DHIREN GANDHI Vs. COMMISSIONER OF C. EX., BANGALORE

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Appeal No. 4/2009 dt. 31/7/2009.

(2.) THE relevant facts that arise for consideration are that the appellant herein filed an appeal against Order -in -Original No. 26/2007 and No. 27/2007 both dt. 18 -10 -2007 passed by the Asst. Commissioner, Central Excise, Yeshwantpur Division, Bangalore, under which the Adjudicating Authority confirmed the demand of Rs. 4,03,982/ - and Rs. 87,636/ - along with interest imposing equal amount of penalty and other penalties on the ground that the appellant is bound to pay an amount equal to Cenvat Credit if any allowed to them in respect of inputs lying in stock or in possession or contained in the final product lying in stock on the date of surrendering of Registration certificate to the Department. Aggrieved by such orders, the appellants preferred appeals before the first appellate authority who directed the appellant to pre -deposit an amount of Rs. 1,70,000/ - in stay orders dt. 22 -1 -2008. Aggrieved by which, appellant filed miscellaneous applications for modification of the stay order and requested for full waiver. The said modification applications were not considered by the ld. Commissioner (Appeals) and the appeals were dismissed for non -compliance. Aggrieved by such an order, appellant preferred appeals before the Tribunal and Tribunal vide Final Order No. 917 and 918/2008 dt. 25 -7 -2008 set aside the impugned orders and remanded the issue for decision by the ld. Commissioner (Appeals) after following the principles of natural justice. The current impugned order passed by ld. Commissioner (Appeals) in de novo proceedings after giving an opportunity of hearing to the appellants. By the impugned order, ld. Commissioner (Appeals) has upheld the Orders -in -Original .

(3.) THE ld. Counsel appearing on behalf of the appellant would submit that the Department was intimated on 6 -10 -2003 about the death of the proprietor of M/s. Dee and Em Naturals and Fragrances. Subsequently, in March, 2004, an internal audit took place and a demand has been raised for the inputs in stock or found in final product and in WIP. It is his submission that there is no cause for issuance of the show -cause notice as M/s. Dee and Em Naturals and Fragrances was not in existence due to the death of the proprietor. It is his submission that by directing the current appellant to pay the duty, the Department is demanding the duty from the successor of the sole proprietor. It is his submission that the said duty cannot be demanded as the provisions Section 11 which provides for recovery of the duty from the successor only in specific circumstances and not in the case of demise/death of the predecessor. It is also his submission that even if the said section is held to be applicable, it would be w.e.f. 10 -9 -2004 and he would rely on the decision in the case of Mars Packaging Pvt. Ltd. v. CCE [2010 (257) E.L.T. 463 (T)]. He would also rely upon the decision in the case of Press Fab Precision Components (P) Ltd. v. CCE, Bangalore [2006 (195) E.L.T. 229 (Tri. -Bang.)], affirmed by Honble High Court of Karnataka as reported at 2007 (207) E.L.T. 207 (Kar.). He would also submit that the provisions of Rule 9 of Cenvat Credit Rules, 2002 cannot be pressed into service as the appellant during the relevant period had not availed any exemption notification but surrendered the Registration certificate and moved out of the excise provisions. It is also his submission that the Revenue has demanded the duty for the clearances made during 15 -9 -2003 to 31 -3 -2004 under Notification No. 9/03 -C.E. out of stock goods manufactured by the father of the appellant that the appellant is not liable to pay duty as he was not the manufacturer.