2025 (10) TMI 1279 - AT - Customs

Appeal abated under Rule 22 after appellant's death where no continuance sought and personal penalty applied to deceased MD

On the appellant's death the Tribunal abated the appeal under Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 ... Abatement of apeal in terms of provisions of Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 on the death of the Appellant - HELD THAT:- It is found that in terms of Rule 22 of Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, on the death of the Appellant, the proceedings will be abated unless an application is made for continuance of such proceedings. In this case, no such application is made. It is ascertained that the Appellant herein, in this Appeal is the M.D of the Appellant-company who was visited with a personal penalty. It is found that in view of the judgement of the Hon’ble Supreme Court in the case of Shabina Abraham & Ors. Vs. Collector of Central Excise & Customs [2015 (7) TMI 1036 - SUPREME COURT], wherein it has been held that no proceedings can be initiated or continued against a dead person as it amounts to violation of natural justice in as much as the dead person, who is proceeded against is not alive to defend himself. It is held that on the death of the appellant, the Appeal stands abated. ISSUES PRESENTED AND CONSIDERED 1. Whether an appeal before the Tribunal abates on the death of the appellant in the absence of an application for continuance by the successor-in-interest or legal representative within the time prescribed by Rule 22 of the CESTAT (Procedure) Rules, 1982. 2. Whether proceedings imposing or continuing personal penalty or other proceedings against a deceased person can be continued against the estate or legal representatives in the absence of specific statutory machinery permitting such continuation. 3. Whether the Tribunal may permit an extension of time to apply for continuance after the sixty-day period specified in Rule 22 when sufficient cause is shown. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Abatement of appeal on death of appellant under Rule 22 Legal framework: Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982 provides that where a party to proceedings dies the appeal shall abate unless an application for continuance is made by or against the successor-in-interest, executor, administrator or other legal representative within sixty days; the Tribunal may allow a further period if satisfied of sufficient cause. Precedent treatment: The Tribunal applied Rule 22 as the governing procedural rule for continuance after death; no conflicting precedent was relied upon in the judgment. Interpretation and reasoning: The Tribunal held that Rule 22 mandates abatement of the appeal upon the appellant's death unless the specified application is made within sixty days. In the present matter no application for continuance was made by any legal representative or successor. Consequently the procedural precondition for continuation was not fulfilled and the appeal must abate. Ratio vs. Obiter: The holding that absence of a timely application under Rule 22 results in abatement is ratio decidendi of the decision insofar as it decides the appeal's fate based on the rule. Conclusion: The appeal abates for non-compliance with Rule 22 and cannot be continued in the absence of the prescribed application within the statutory period. Issue 2 - Continuation of proceedings against a deceased person / personal penalty Legal framework: Principles of natural justice and relevant tax/adjudicatory jurisprudence govern whether proceedings may be continued against a deceased person or their estate; Rule 22 addresses procedural continuance but does not itself expand substantive power to proceed against a dead person. Precedent treatment: The Tribunal relied on the Supreme Court decision in Shabina Abraham & Ors. v. Collector of Central Excise & Customs, which held that proceedings cannot be initiated or continued against a dead person as it violates natural justice because the dead cannot defend themselves; that case addressed whether assessments could continue against the estate of a sole proprietor without express statutory machinery. Interpretation and reasoning: Applying the principle from Shabina Abraham, the Tribunal reasoned that proceedings of a punitive or personal nature against a deceased individual cannot be continued, and continuation against the estate requires appropriate statutory provision and compliance with procedural prerequisites. The fact that the deceased was visited with a personal penalty reinforced that personal proceedings cannot be maintained after death. Ratio vs. Obiter: The application of Shabina Abraham to hold that proceedings imposing personal penalty abate on death is treated as ratio for the present appeal. The broader observations in Shabina Abraham about taxation of estates and necessity of statutory machinery serve as guiding ratio but may be obiter to extent not squarely required here. Conclusion: Proceedings that are personal to the deceased, including imposition of personal penalty, cannot be continued after death; absent statutory machinery and compliance with Rule 22 by the legal representative, the appeal and proceedings abate. Issue 3 - Discretion to extend time for application under Rule 22 Legal framework: Rule 22 contains a proviso permitting the Tribunal to allow an application for continuance beyond sixty days if satisfied that sufficient cause prevented timely presentation. Precedent treatment: The judgment cites the proviso but records that no application for continuance was filed and no claim of sufficient cause was made. Interpretation and reasoning: Because no application was presented within the sixty-day period and no request invoking the proviso was made, the Tribunal did not exercise discretion to extend time. The availability of the proviso does not operate where no application invoking it is made. Ratio vs. Obiter: The proposition that the Tribunal may, on sufficient cause, extend the sixty-day period is a statement of statutory discretion (ratio as to the statutory power). The Tribunal's refusal to exercise discretion is factual and procedural in this instance (ratio to the extent it disposes the appeal for want of invocation). Conclusion: The Tribunal did not extend time because no application invoking the proviso was filed; absent such an application, the appeal abates and must be disposed of. Final Disposition The Tribunal held that on the death of the appellant and in absence of any application by a successor-in-interest or legal representative within the time prescribed by Rule 22 (or any application showing sufficient cause for extension), the appeal abates; accordingly the appeal was disposed of as abated. The Tribunal relied on the Supreme Court authority that proceedings cannot be continued against a dead person, particularly where a personal penalty was involved.