Finality of liability permits recovery from a legal heir, while corroborated evidence sustained clandestine clearance findings.

Liability that had crystallised and attained finality during the sole proprietor's lifetime could be recovered from the estate in the hands of the legal representative, so the objection to proceeding against the heir was rejected. On merits, the demand for duty, interest and penalty was sustained because the proprietor's inculpatory statement, shortage in statutory records, and the panchnama supported a finding of clandestine clearance. The firm and proprietor were treated as inseparable on the facts, and no basis was found to interfere with the appellate conclusion.

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Issues: (i) whether the legal heir of a deceased sole proprietor could be proceeded against where the order against the assessee had already attained finality before death; (ii) whether the demand of duty, interest and penalty was sustainable on merits.

Issue (i): whether the legal heir of a deceased sole proprietor could be proceeded against where the order against the assessee had already attained finality before death.

Analysis: The liability had already crystallised and the order of the appellate authority had attained finality during the lifetime of the proprietor. The decision relied on by the appellant was distinguished on facts because, in that case, the notice itself was issued after the proprietor's death. The decisions cited by the Revenue were treated as applicable, supporting the position that recovery could proceed against the estate in the hands of the legal representative.

Conclusion: The objection to recovery through the legal heir was rejected and the legal heir was held liable in the facts of the case.

Issue (ii): whether the demand of duty, interest and penalty was sustainable on merits.

Analysis: The inculpatory statement of the proprietor, shortage reflected in statutory records, and the panchnama supported the finding of clandestine clearance. The penalty was imposed on the firm and the proprietor, and the firm and proprietor were treated as inseparable on the facts. No reason was found to interfere with the appellate authority's conclusion.

Conclusion: The demand, interest and penalty were upheld on merits.

Final Conclusion: The appeal failed in its entirety, and the duty demand, interest and penalty were sustained against the appellant's legal heir on the facts found.

Ratio Decidendi: Where liability has already attained finality during the lifetime of a sole proprietor, recovery may be pursued against the legal representative to the extent permitted by law, and clandestine removal may be sustained on corroborated documentary and oral evidence.

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