2018 (6) TMI 1151 - AT - Service Tax

Appellate Tribunal rectifies error in case involving deceased proprietor, following legal principles.

The Appellate Tribunal CESTAT Bangalore granted the appellant's application for Rectification of Mistake, finding that proceedings against a deceased ... Rectification of Mistake - The Revenue has stated that the Final Order passed by the Tribunal has held that the present appeal cannot proceed and will abate in view of Rule 22 and accordingly, held that the demand also abates - proceedings against deceased person - Section 86(7) of the Finance Act, 1994 read with Section 35C(2) of the Central Excise Act, 1944 - Held that:- As per Rule 22 of CESTAT (Procedure) Rules, the appeal shall abate on the death of the appellant unless an application is made for continuation of such proceedings by or against the successor in interest, executor, administrator, receiver, liquidator or other legal representatives of the appellant or applicant or respondent, as the case may be. The widow of the proprietor is not contesting the appeal on merit but only filed the appeal because the show-cause notice has been served on her demanding the duty against the dead man and in her appeal, she has categorically stated that the show-cause notice against the dead person is not legally sustainable. In the Final Order No.23254/2017 dated 14.12.2017, we have observed that the proprietor Shri Harsha P.S. has died during the pendency of the appeal whereas actually he died much before the issuance of show-cause notice. This is the only error in the Final Order and therefore, we allow the application of the window and hold that the proprietor died much before the issuance of show-cause notice and has not died during the pendency of the appeal. ROM application allowed. Issues:Rectification of mistake in the Final Order under Section 86(6A) of the Finance Act, 1994 read with Section 35C(2) of the Central Excise Act, 1944.Analysis:The judgment by the Appellate Tribunal CESTAT Bangalore dealt with two applications for Rectification of Mistake (ROM) under Section 86(6A) of the Finance Act, 1994. The first application was filed by the appellant/assessee, while the second was filed by the Revenue. The appellant's application highlighted the issue of the deceased proprietor of the business, stating that the show-cause notice was served to the widow after the proprietor's death. The appellant argued that the proceedings against a deceased person should abate, citing the judgment of the Hon'ble Supreme Court in the case of Shabina Abraham vs. CCE. On the other hand, the Revenue contended that since the wife of the deceased proprietor filed the appeal, the proceedings should continue as per Rule 22.The Tribunal examined both applications and the arguments presented. The consultant for the appellant emphasized that the show-cause notice was invalid as it was issued against a deceased person, and the widow was contesting the notice's validity, not the demand itself. Referring to the judgment in the case of Shabina Abraham, the consultant argued that proceedings against a dead person should abate. The Tribunal reviewed the Supreme Court's decision and noted that initiating proceedings against a deceased individual violated principles of natural justice. Additionally, Rule 22 of CESTAT (Procedure) Rules stated that an appeal shall abate upon the death of the appellant unless continued by the legal representatives.Ultimately, the Tribunal found merit in the appellant's arguments. It concluded that the proceedings against the deceased proprietor should abate as per the principles outlined in the Shabina Abraham case. The Tribunal acknowledged the error in the Final Order regarding the timing of the proprietor's death and rectified it accordingly. In contrast, the Tribunal dismissed the Revenue's ROM application, as it did not find any substance in light of the legal principles discussed. The judgment was pronounced on 10/5/2018, resolving the issues raised by both parties effectively.