TaxTMI 
TaxTMI 
2000 (4) TMI 59
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....s of the partnership firm could be proceeded with on the basis of notice issued to its partners. (c) Whether the Tribunal decision in Hindustan Foam Industry v. Collector of Central Excise that charging partnership firm for under-valuation and short levy was unjustified in the absence of issue of show cause notice to the firm needs reconsideration. 2. The Additional Collector of Customs, New Delhi passed a single Order-in-Original No. 214/91, dated 11/20-9-1991 confiscating zip fasteners of market value at Rs. 4,87,250/- and C.I.F. value of Rs. 1,92,000/- under Section 111(d) and (p) of the Customs Act, 1962. He also imposed penalty of Rs. 25,000/- on Shri Bulaki Ram of M/s. Kumar Brothers, of which, Shri Bulaki Ram was stated to be a....
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....s Shri Bulaki Ram and other two persons and not to the firm. He contended that since the notice was not issued to the firm to which the goods belonged, the seized goods are liable to be returned. He stated that the serving of notice to the partners of the firm did not constitute service of a notice on the firm. For this proposition he relied upon the decision of the Tribunal in the case of Hindustan Foam Industry v. Collector of Central Excise reported in 1990 (48) E.L.T. 33. Referral Bench has taken note of the above decision of the Tribunal which has taken into consideration several decisions including the one in M/s. Mukha Mal Gokal Chand v. Collector of Central Excise, New Delhi reported in 1987 (32) E.L.T. 163 (Tribunal) = 1987 (13) EC....
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....d that he and his brothers - Sarwan Kumar and Ashok Kumar were the partners of the firm of M/s. Kumar Brothers. The Department also searched the premises of M/s. Kumar Brothers and made the seizure from the premises of the firm. It is also observed that despite the letter, dated 15-2-1990 written by their Counsel, Shri N.C. Chawla to the Additional Collector requesting for waiver of the requirement of a show cause notice vide his letter, dated 7-9-1989, the notice had been issued. The letter was written by the Counsel as reply on behalf of Shri Bulaki Ram of M/s. Kumar Brothers. The ld. Bench has noted that Shri Bulaki Ram was taking responsibility on himself for the dealings with the department in this case. He had waived the issue of the ....
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....s not been issued to the firm which is the real owner of the seized goods, their confiscation is not valid in law. 6. Shri S. Srivastav, ld. JDR submitted that the issue referred to the Larger Bench is no longer res integra as the same have been answered by the Hon'ble Supreme Court in the case of Union of India v. Mustafa & Najibai Trading Co. [1998 (101) E.L.T. 529 (S.C.)]. He stated that in Paras 28 to 34 of the said judgment, the Hon'ble Apex Court have held that action against the contraband goods in terms of the provisions of this Customs Act, any action in rem and if the SCN is issued to the person who is in a position to explain about the goods, then the requirement of Section 124 of the Customs Act would be fulfilled and the ord....
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.... owner of the goods under Section 124 of the Act, the goods which are found to be smuggled goods cannot be confiscated under Section 111 of the Act ? In our view, this question must be answered in the negative because confiscation of goods under Section 111 of the Act is a penalty in rem which attaches to the goods which are the subject matter of the proceedings for confiscation and if it is found that the goods are liable to be confiscated under Section 111 of the Act, they can be confiscated without ascertaining their real owner. Moreover, in so far as the rule of audi alterm partem is concerned, the position is well settled that an order passed in disregard of the said principle would not be invalidated if it can be shown that as a resul....
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....r an explanation for such contravention". 8. However, coming to the facts of the present case, it seems that the above stated questions of law have been referred to the Larger Bench without first critically examining the claim of the appellants viz., M/s. Kumar Brothers that it is a partnership firm. As per Section 4 of the Indian Partnership Act, 1932, "Partnership" is the relationship between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into relationship with one another are called individually "partners and collectively a firm" and the name under which their business is carried on is called "firm name". 9. The definition of partnership in ....