2009 (11) TMI 756 - AT - Central Excise

Tribunal Upholds Duty Demand & Penalty for Central Excise; Legal Heirs' Liability Not Considered

MEENA K. AGARWAL Versus COMMISSIONER OF C. EX., VADODARA

The Tribunal rejected the application for rectification of mistakes regarding the liability of the appellant to pay Central Excise duty under Rule 14A of ... - Issues:1. Rectification of mistakes in the order of the Tribunal.2. Liability of the appellant to pay Central Excise duty.3. Interpretation of Rule 14A of Central Excise Rules, 1944.4. Liability of legal heirs to pay Central Excise duty.Analysis:Issue 1: Rectification of mistakes in the order of the TribunalThe appellant sought rectification of mistakes in the Tribunal's order. The advocate highlighted two mistakes in the order. The first mistake was regarding the liability of the appellant to pay duty, where the Tribunal failed to consider a decision of the Hon'ble Bombay High Court cited by the appellant. The Tribunal held that the appellant became liable to pay Central Excise duty under Rule 14A of Central Excise Rules, 1944, as they had not fulfilled their obligations and had submitted forged block transfers. The Tribunal clarified that the appellant, by claiming to have executed the bond and producing block transfers, could not deny liability. The Tribunal acknowledged the omission of mentioning the decision cited by the advocate but maintained the view taken in the order.Issue 2: Liability of the appellant to pay Central Excise dutyThe Tribunal discussed the liability of the appellant to pay Central Excise duty under Rule 14A of Central Excise Rules, 1944. It was emphasized that when obligations are not fulfilled, a merchant exporter becomes liable to pay duty if a bond is executed. The Tribunal held that the appellant, by submitting forged block transfers and holding out as a merchant exporter, became chargeable with duty under Rule 14A. The Tribunal noted the confusion caused by not explaining the connection between Rule 14A and Section 11A of the Central Excise Act, 1944, but maintained the view that the appellant was liable for duty.Issue 3: Interpretation of Rule 14A of Central Excise Rules, 1944The Tribunal delved into the interpretation of Rule 14A of Central Excise Rules, 1944, emphasizing that the appellant's failure to execute a bond led to their liability to pay Central Excise duty. It was clarified that the appellant's submission of forged documents as a merchant exporter attracted the obligation under Rule 14A, making them chargeable with duty. The Tribunal acknowledged the need to refer to Section 11A of the Central Excise Act, 1944, when Rule 14A is not self-contained, ensuring the collection of short paid duty.Issue 4: Liability of legal heirs to pay Central Excise dutyThe Tribunal addressed the issue of the liability of legal heirs to pay Central Excise duty. The advocate cited a decision to support the contention that the liability of legal heirs is limited to the inherited assets of the appellant. The Tribunal clarified that the issue of liability to pay duty was not before them, focusing solely on the correctness of the duty demand and penalty imposed. The Tribunal found that a particular observation in the order exceeded the scope of the issue before them and required modification. The Tribunal upheld the duty demanded from the appellant in the impugned order, modifying a specific sentence in the order.In conclusion, the Tribunal rejected the application for rectification of mistakes regarding the liability of the appellant to pay Central Excise duty, interpreting Rule 14A of Central Excise Rules, 1944, and addressing the issue of the liability of legal heirs to pay duty within the specified scope of the case.