The Hon’ble CESTAT, Chennai vide its order dated 12.06.2023 in the matter of The Commissioner of Customs Vs. M/s K. V. Paints & Chemicals Co., in Custom Appeal No. 41700 of 2013, held that the appeal filed by the department against the sanctioning of refund claim to the respondent, stands abated in terms of Rule 22 of the CESTAT (Procedure) rules, 1982 as the respondent (Proprietor) died during the pendency of the appeal.

The Appellant (Department) filed the appeal before the Hon’ble CESTAT assailing the order passed by the Commissioner (Appeals) vide Order-in-Appeal C. Cus. No. 705/2013 dated 10.05.2013, wherein the departmental appeal was rejected in respect of sanction of SAD Refund to the Respondent.

Facts of the Case: –

  • That M/s K.V. Paints & Chemical (the respondent) filed the refund claim of 4% Additional Duty of Customs in respect of Eighteen Bills of Entry in terms of Notification No.102/2007-Cus dated 14.09.2007 as amended by Notification No.93/2008 dated 01.08.2008 read with Board’s Circulars No.6/2008-Cus dated 28.04.2008 and 16/2008-Cus dated 13.10.2008.
  • The original refund sanctioning authority on scrutiny of the documents submitted by the responded, sanctioned the refund amount of Rs.20,82,736/- to the importer vide Order-in-Original No.12670/2010 dated 13.08.2010.

It was submitted on the behalf of the respondent that M/s. K.V. Paints & Chemicals Co., is a sole proprietorship concern and its sole proprietor is Mr. Kishan Chand Ohri, who died on 22.08.2019 and the Death Certificate issued by Government of Haryana, Municipal Corporation Gurugram has already been submitted.  Further, Directorate General of Foreign Trade’s IEC Registration of K.V. Paints & Chemicals Co., also indicates that it is a sole proprietorship and the proprietor is Mr. Kishan Chand. Referring to the Rule 22 (Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application) of the CESTAT (Procedure) Rules, 1982, submitted that any proceeding will be abated on the death unless an application has been made for continuation of such proceedings within sixty days of the occurrence of the event.

On the other hand, on the behalf of the Appellant the death of the Respondent during the pendency of the proceedings was accepted.

Held: –

  • The Hon’ble CESTAT after considering the submissions made, facts of the case and the CESTAT rules referred, found that it appears that the refund sanctioning authority has not verified compliance to the important conditions for sanctioning the SAD refund. The importer has to comply with following conditions: – No credit of additional duty of Customs have been levied by the Respondent, in terms of Sub-section (5) of Section 3 of the Customs Tariff Act, 1975; ii. The importer is required to pay the appropriate tax applicable; iii. Production of documents evidencing the payment of appropriate tax; iv. Documents evidencing the payment of such additional duty, along-with the invoices.
  • Though, as informed and from the perusal of material on record, it was found by the Hon’ble Bench that the Respondent died on 22.08.2019 during the pendency of the present appeal. That in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982 on the death of the respondent, the proceedings will be abated unless an application is made for continuance of such proceedings.
  • It was found that in the instant case no such application is made and the death has occurred on 22.08.2019, more than three and half years passed already.
  • The Hon’ble Bench referring to the judgment of Hon’ble Supreme Court in case of Shabina Abraham & Ors. Vs. Collector of Central Excise & Customs, wherein it was held that ‘no proceedings can be initiated or continued against a dead person as it amounts to violation of natural justice in as much as the dead person, who is proceeded against is not alive to defend himself’, held that on death of the Respondent, the appeal stands abated.

The Hon’ble CESTAT with the above findings and observations, disposed of the appeal.

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