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TMI Blog2025 (5) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... peals before the Customs Excise and Service Tax Appellate Tribunal (CESTAT/Tribunal) that, on 06.01.2014, came to be dismissed. 2. The present Civil Miscellaneous Appeals were instituted in 2014, and pending the same, Hidyathulla alias Mannady Bharakath passed away on 21.06.2020. His legal heirs, being A2 to A8, have been brought on record vide order dated 04.02.2025 in various CMPs filed for that purpose. Miscellaneous Petitions had also come to filed in 2024 by his legal heirs seeking condonation of delay in filing petitions seeking setting aside of abatement caused by the demise of late assessee and seeking to set aside the abatement of the appeals. Those petitions had been ordered on 04.02.2025 recording that the respondent had no objection to the same being ordered and no counter had been filed. 3. However, Mr.B.Kumar, learned Senior Counsel for Mr.M.A.Abdul Huq, learned counsel for the appellant, would argue that with the demise of the assessee, the appeals have in fact, abated. He argues that with such abatement, the demands raised under the orders-in-original stand extinguished and the consequence thereof is that the legal representatives (LRs) of the deceased assessee st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advances detailed arguments that are summarized below. 9. The first submission is that a levy, to be complete, comprises three stages, imposition, assessment and recovery. In the present case, the first two stages stand completed and what remains is the question of recovery alone. She relies on the case of Chatturam and others v. Commissioner of Income Tax, Bihar (AIR 1947 SC 32). 10. Her next argument is that an appeal does not automatically abate upon the demise of an assessee as it is a statutory right. There is no provision in the Customs Act, 1962 (in short 'Act') setting out the circumstances when an appeal filed by an assessee would abate, and hence such appeal remains to be adjudicated in accordance with the appropriate legal provisions. For this proposition, she relies on the judgments in (i) Imperatrix v. Dongaji Andaji (ILR (1878) 2 Bom. 564), (ii)Pranab Kumar Mitra v. The State of West Bengal and Others (AIR 1959 SC 144) and (iii)Bondada Gajapathy Rao v. State of Andhra Pradesh (AIR 1964 SC 1645). 11. Reference is then made to Section 306 of the Indian Succession Act, 1925 which elucidates as to which causes of action would survive and which would abate, and for thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Clause (a) stands attracted in the case of a person, who, in relation to any goods, does, or omits to do any act which would render such goods liable to confiscation under Section 111 of the Act or abets the doing or omission of such act. Thus the issues for consideration have to be decided both from the view point of the levy (of penalty), as well as the statutory scheme of the Customs Act. 16. We now discuss briefly the judgements cited by the revenue. In the case of Imperatrix (Supra Footnote 5), it was held that the estate of the deceased is liable for discharge of a fine imposed on the deceased in terms of Section 70 of the Indian Penal Code (IPC) as no right has been given to a legal representative to prosecute an appeal. Hence, the position was that while the appeal may not be pursued, the estate would still be liable for discharge of the fine imposed on the deceased. 17.In Pranab Kumar Mitra (Supra Footnote 6), it was held that the right of appeal, being a statutory right, would have to be expressly conferred, or at least conferred by necessary implication. If the fine imposed on the deceased convict is a liability upon the estate of the deceased, then that would be a g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bina Abraham and others V Collector and Central Excise and Others ((2015) 10 Supreme CourtCases 770) was concerned with the recovery of arrears of Central Excise in the hands of the appellant, who was the legal representative of an assessee who had died. The Hon'ble Bench commences the judgment with the following observations: '1."Nothing is certain except death and taxes." Thus spake Benjamin Franklin in his letter of November 13, 1789 to Jean Baptiste Leroy. To tax the dead is a contradiction in terms. Tax laws are made by the living to tax the living. What survives the dead person is what is left behind in the form of such person's property. This appeal raises questions as to whether the dead person's property, in the form of his or her estate, can be taxed without the necessary machinery provisions in a tax statute. The precise question that arises in the present case is whether an assessment proceeding under the Central Excises and Salt Act, 1944, can continue against the legal representative/estate of a sole proprietor/manufacturer after he is dead. The facts of the case are as follows. . . . . 24. The issue framed for resolution in the above matter was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the assessing officer were liable to be quashed. 29. The Court had noted that there was no definition of the word 'assessee' under the Central Excise and Salt Act. Referring to the definition of 'person' under the General Clauses Act, the Court concluded that there was no definition of 'assessee' that included a dead person. The operative portion of the judgment in favour of the assessee is as follows: It remains to consider a judgment cited by learned counsel for the appellants, namely, Commissioner of Central Excise, Bangalore -III v. Dhiren Gandhi, 2012 (281) E.L.T. 64(Karnataka). This judgment is correct in its conclusion that while interpreting the provisions of the Central Excises and Salt Act, legal heirs who are not the persons chargeable to duty under the Act cannot be brought within the ambit of the Act by stretching its provisions. To the extent that this judgment holds what is set out hereinbelow, it is correct:- "We do not find any provision in the Act which foists any such liability in the case of intestate succession. In other words, there is no provision which empowers the authorities to recover due from a deceased assessee by proceeding against his lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods belonging to such person which are under the control of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] or such other officer of customs; or [(c) if the amount cannot be recovered from such person in the manner provided in clause (a) or clause (b)- (i) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified there under as if it were an arrear of land revenue; or (ii) the proper officer may, on an authorisation by 3 [Principal Commissioner of Customs or Commissioner of Customs] and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be a affixed on a conspicuous part of the property and in the notice board of the office of the proper officer. The method for the sale of the property has been set out thereafter. 39. In the present case, no material has been brought on record nor is it the case of the Department that the property had been attached by way of a Certificate of attachment as per the Rules. 40. Finally, Section 142A has been inserted by Act 8 of 2011 providing for any liability under the Act to be a first charge upon the property of the assessee or the person, as the case may be. Section 142A reads under: 142A. Liability under Act to be first charge.- Notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of duty, penalty, interest or any other sum payable by an assessee or any other person under this Act, shall, save as otherwise provided in section 529A of the Companies Act, 1956 (1 of 1956), the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993 (51 of 1993) and 2 [the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 (54 of 2002) and the Insolvency and Bankruptcy Code, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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