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M/s Premier Security Services (Proprietor:- Late Birendra Singh) Versus Commissioner of Central Excise, Lucknow

2017 (12) TMI 721 - CESTAT CHENNAI

SCN on legal heir of proprietor after the death of proprietor - Whether the SCN can be validly issued on the legal heir of the proprietor for duty allegedly short paid on the ground that his son legal heir is carrying the same business after the death of proprietor under the same name and style? - Held that: - the proprietor Birendra Singh, with respect to whom SCN was issued after his death, purportedly on the legal heir Shri Jasjit Singh is ab-initio avoid - it is of no consequence or help .....

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asjit Singh with interest - appeal allowed - decided in favor of appellant. - Appeal No. ST/994/2011-ST [ SM ] - Final Order No. A/71926/2017-SM[BR] - Dated:- 24-11-2017 - Mr. Anil Choudhary, Member ( Judicial ) Shri T. K. Srivastava, Advocate for Appellant Shri Gyanendra Kr. Tripati, Assistant Commissioner (AR), for Respondent ORDER Per: Anil Choudhary The issue in this appeal is whether the show cause notice can be validly issued on the legal heir of the proprietor for duty allegedly short pai .....

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ns and paying the taxes. The said proprietor Shri Birendra Singh died on 11/04/2009. On 15/04/2009, the Department issued a notice with reference to Audit objections in the name of the deceased proprietor. His one of the sons and also legal heir approached the Department to reregister the said proprietorship concern, as proprietor Jasjit Singh with the new PAN Number and new registration under the Service Tax Act. Vide letter dated 05th June, 2009 the Range Superintendent issued a letter, addres .....

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s of such services and further mentioning that as per the gross turnover, total service tax for the period October, 2008 to March, 2009 amounts to ₹ 51,81,652/-, whereas amount deposited is ₹ 13,57,050/-. Thus, an amount of ₹ 38,24,602/- is short paid and such amount was directed to be deposited with interest and late fee. It is also mentioned that with respect to the letter dated 29th May, 2009 written to Mr. Jasjit Singh, he was directed to deposit the short paid service tax .....

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levant to mention that prior to this Mr. Jasjit Singh had filed application for Registration in form ST I under the name and style of M/s Premier Security Services. In response thereto some clarifications were called by the Range Superintendent vide letter dated 18th May, 2009. Mr. Jasjit Singh also filed a fresh lease agreement dated 17th November, 2009, wherein the premises had been taken on lease for office by him, which was earlier the office of the proprietorship of late Birendra Singh. 4. .....

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related with the concerned M/s Premier Security Services situated at 3rd Floor, 309-Murli Bhawan, Hazrat Ganj, Lucknow which was running under the proprietor ship of late Birendra Singh upto his death. By virtue of Affidavit sworn by wife of Late Birendra Singh & 2 other legal heirs further states that Shri jasjit Singh shall also takes the responsibility to act and discharge any seen or unseen legal obligations, in case, if any arises in the future related with the aforesaid concern M/s Pr .....

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Singh filed reply on merits and also sought opportunity of personal hearing. The SCN was adjudicated vide Order-in-Original dated 19th May, 2010, confirming demand of ₹ 33,39,092/- along with penalty under Section 78 of equal amount with interest and further penalty was also imposed under Section 76 & 77 of the Act. Being aggrieved, the appellant preferred appeal before the learned Commissioner (Appeals) who vide the impugned Order-in-Appeal dated 22nd March, 2011 was pleased to reject .....

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prietor, after his death, on his son/legal heir Shri Jusjit Singh. The learned counsel relies on the ruling of Hon ble Supreme Court in the case of M/s Shabina Abraham Vs Commissioner of Central Excise & Customs reported at 2015 (322) ELT 372 (SC), in this case one George Varghese was the sole proprietor of Kerala Tyre and Rubber Co. Ltd., this proprietary concern had stopped manufacture and production of tread rubber. By a show cause notice dated 12/06/1987 for the period January, 1983 to D .....

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death, a second show cause notice was issued on 18/10/1989 to his wife and four daughters asking them to make submissions with regard to the duty demand made in the earlier show cause notice dated 12/06/1987. By their reply dated 25/10/1989, the said legal heirs of the deceased stated that none of them had any personal association with the deceased in his proprietary business and were not in a position to locate any business records. They submitted that the proceedings initiated against the dece .....

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he High Court quashed the proceedings against the legal heirs stating that the Central Excise and Salt Act did not contain any provisions for continuing assessment against a dead person. Against this, revenue went in appeal. The Division Bench of the High Court of Kerala reversed the Single Judge's judgement. The Hon'ble Supreme Court on further appeal by the legal heirs held, it was impermissible to continue such assessment proceedings. In definition of assessee in Section 4(3) (a) of t .....

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not be said that the individual proprietor who died due to natural causes, maneuvered his death to evade Excise duty- The plea that Section 11A ibid was machinery provision which must be construed to make it workable, was rejected as there was no charge of Excise duty under main charging provision on dead person. Further, Section 6 ibid does not say anything about how dead person s assessment is to continue after his death in respect of Excise duty that may have escaped assessment. Definition of .....

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or allowing the appeal with consequential benefits. 8. The learned A.R. for revenue have relied on the impugned order. He further relied on the ruling of Hon ble Kerala High Court in the case of Commissioner of Central Excise Vs Leelamma George (supra). Further, the learned counsel relies on the ruling of Hon'ble Kerala High Court in the case of Commissioner of Central Excise and Customs Vs Leelamma George reported at 2004 (163) ELT 17 (Ker.) wherein the show cause notice was issued on the p .....

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Act can be continued against manufacturer if he had cleared the products paying duty less than what is liable under the Act. The demand is to be met, if it remains unpaid, by legal heirs even after the death of their predecessor-in-interest. The Hon'ble High Court further observed that suppose there had been a case of excess levy from the predecessor-in-interest. If the argument of the writ petitioner is accepted, it will lead to a situation that the legal heirs of the manufacturer who had p .....

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