B.S. Garg Vs. Commissioner of Central Excise, Chennai-IV – 2016 (339) E.L.T. 518 (High Court – Madras)

Where main appeal against the manufacturer has been accepted, then the order can be enforced against the proprietor/partner.

Facts: The matter relates to three set of cases. In all the three cases SCN were issued on 02 June 1999. The notices resulted in order in original being passed on 27 April 2004. As against the order in original the department filed only three main appeals. In the course of arguments, the department seems to have realized that proprietor/partners, brokers and persons who issued bills were left out and appeal against dropping of proceedings against them had been omitted to have been filed. The appellant approached tribunal but the application for condonation was rejected. Therefore, with a delay of 2249 days the appeals were filed by Commissioner of Central excise under Section 35 G of The Central Excise Act, 1944.

Held: The Hon’ble Madras High Court held that the main concern of the department is that if proprietors/partners/brokers as well as those who issued bills for selling goods are left out, the main appeals filed by the department against the manufacturer may also fail which is wholly unjustified. Therefore, if the Department had chosen to file appeals only as against the individuals but not against the manufacturer such appeals would certainly fail. But if the Department had filed main appeals against manufacturers, but left out individuals the appeals filed against the manufacturers will not certainly fall on this score. Therefore, the court ordered that if the department succeeds in the main appeals as against the manufacturers, the orders can be certainly enforced against proprietors/ partners. Therefore, the delay of 2249 days in filing appeal cannot be cordon on above grounds.

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