Decided on June 10,2003



- (1.) The Collector of Central Excise & Customs, Kochi - 18 has come up with this appeal aggrieved by the judgment passed by the learned Single Judge in O.P.291/1990. Ext. P3 show cause notice was issued to the husband of the first respondent and the father of the remaining respondents, who will be styled in this judgment as writ petitioners. Before the finalisation of the proceedings, he died. The proceedings were continued by issuing Ext. P4 notice to the writ petitioners. They filed Ext. P5 petition before the authority, who issued Ext. P4, contending that the authority did not have jurisdiction to continue the proceedings as the original notice, Ext. P3, had been issued to their father who was no more. There was no law enabling the officer to continue the proceedings with reference to the short levy of the excise duty payable by the deceased, against his legal representatives. But this question was not decided by the authority, who issued Ext. P4. It was at that point of time, the writ petitioners approached this Court challenging Ext. P4 and seeking a declaration that the entire proceedings commencing or continuing from Ext. P3 as abated due to the death of their father. It was contended that S.11A of the Central Excise & Salt Act 1944, which enables the Revenue authority to collect the dues payable including short levy, does not enable the officer to proceed against the legal representatives of the deceased, unlike S.11 which permitted recovery of the dues once it is adjudicated by the designated officer. The learned Single Judge held that S.11A does not enable the designated officer to proceed against the legal representatives and therefore quashed the proceedings in Ext. P4 and granted the declaration as sought for. It is in the above circumstance, as the revenue authority is disabled from recovering the alleged short levy, this appeal has been filed.
(2.) It is contended by the appellant that as per S.3 of the said Act, the Excise duty is leviable on all excisable goods, other than salt which are produced or manufactured in India. Therefore the duty is chargeable on the goods. R.7 of the Central Excise Rules makes the liability to pay the duty on such goods on the manufacturer or the warehouse keeper, as the case may be. Under R.9(1) such duty shall be payable before the goods are removed out of the control of the manufacturer or warehouse keeper and before such removal, he has to remit the duty. S.11A, it is contended by the Central Government Pleader, enables a Central Excise Officer to serve notice on the person chargeable with duty which has not been levied or paid or which has been short levied or short paid, to realise the balance payable within the period provided in the main section or as the case may be, in the proviso thereto. These proceedings are not confined to the manufacturer or the warehouse keeper or the purchaser as the case may be, as referred to in the said Rules. These proceedings can be initiated against whoever found chargeable with the duty. When the husband of the first writ petitioner and the father of the remaining writ petitioners on whom Ext. P3 had been served is no more, Ext. P4 notice can be issued to writ petitioners. It is further contended that when proceedings are initiated legally by issuing a notice under S.11A; notwithstanding the death of the person on whom the notice has been issued, the proceedings can be continued against his legal representatives. Therefore, there is no illegality in continuing the proceedings by calling upon the writ petitioners, in Ext. P4, to show cause to the proceedings initiated. It is further contended that the decisions referred to in the impugned judgment with reference to the provisions in the Income Tax Act and the Bombay Sales Tax Act are not applicable to this case on hand. Therefore, the judgment has to be reversed. It is contended.
(3.) On the other hand, it is contended on behalf of the writ petitioners that a taxing statute has to be construed strictly. S.3, which is the charging section, specified that levy of duty is on manufacturer. It is the manufacturer, who is liable to pay the duty. The proceedings under S.11A can also be initiated against such persons. Sub-r.2 of R.9 also indicates that the proceedings under S.11A have to be initiated against a purchaser. The decisions referred to by the learned Single Judge in Commissioner of Income Tax, Bombay v. Ellis C. Reid (AIR 1931 Bom. 333), Kishenchand Tolaram v. A.B. Ghanekar and others (12 STC 562) and Commissioner of Sales Tax v. Allimullah Haji Salamat (22 STC 165) are strongly relied on to support this contention. It is further submitted that the decision cited on the side of the appellant in Bhagwan Devi Banka and others v. R.B. Sinha and others (26 ELT 890) does not have relevance at all, as it was a proceeding initiated after adjudication during the life time of the manufacturer, warehouse keeper or the purchaser, as the case may be, in which case, the legal heirs can be proceeded against atleast to the extent of the property that they had inherited from their predecessor in interest.;

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