GOPAL INDUSTRIES LTD. Vs. CCE

JUDGEMENT

(1.) THE issue involved in this case is whether outgoing partners are liable to pay excise duty assessed against a registered partnership firm, which was dissolved. Having regard to the importance and wide repercussions of the question involved the appeal has been placed for disposal before this Larger Bench.

(2.) THE Hon'ble High Court of Madhya Pradesh had earlier, by order made in Writ Petition No. 2239/2002 dated 20.2.2002, remanded the matter, after quashing the order passed by the Commissioner on 6.5.2002, with a direction to the petitioners to appear before the Commissioner and file their reply to the show cause notice dated 24.3.2003. Thereafter, fresh adjudication order was made by the Commissioner on 31.1.2004, confirming central excise duty demand of Rs. 46,053,866/ - and ordering its recovery from the original notice No. (1), which is the present appellant No. (1). Penalty of like amount was imposed under Section 11AC of the Central Excise Act, 1944, on the said assessees and interest on the amount of duty was ordered to be paid in terms of Section 11AB of the Act. Penalty of Rs. 5 lacs was imposed on the noticee No. (2) who was the managing partner in the appellant firm.

(3.) INITIALLY the Commissioner had passed an order on 6.5.2002, which was challenged before the Hon'ble High Court of Madhya Pradesh on the ground that Girijesh Rai who was served with the notices issued to the firm and its partners had no locus standi to file any reply and attend the hearing on behalf of the appellants. The Hon'ble High Court set -aside the order dated 6.5.2002 with a direction that the petitioners will appear and file their reply to the show cause notice dated 24.3.2003 before the Commissioner and that the Commissioner after considering their reply shall afford an opportunity of hearing to the petitioners and pass the final order.