Case Law Details
M/s Shri Mahavir Industries Vs CGST (CESTAT Delhi)
A proprietary unit is an individual legal entity and any refunds due to the proprietary unit cannot be adjusted or appropriated towards the demand which may be pending recovery against an another independent legal entity, of which the proprietor of unit is a partner. It has to be kept in mind that the present proceeding are not recovery proceeding against the partnership firm so as to make the recoveries independently from the partners also. The dispute relates to the refund of the duty deposited by a proprietary unit and on success of their appeal before Tribunal such refunds have to be sanctioned to the proprietary unit. Any such adjustments against the dues of a partnership firm is neither justified nor proper nor legal.
FULL TEXT OF THE CESTAT JUDGMENT
After hearing both the sides, I find that proceedings for confirmation of demand, on the ground of clandestine removal, were initiated against one M/s Diwan Industries, a partnership firm. Inasmuch as the proprietor of the present appellant M/s Mahavir Industries, Shri Prabhat Jain was one of the partners in M/s Diwan Industries, notice also proposed confirmation of demand against M/s Mahavir Industries i.e. the present appellant. The demand to the extent of around Rs. 32 lakhs was confirmed against M/s Diwan Industries along with imposition of penalty of identical amount of Rs. 36 lakhs and demand to the tune of Rs. 75,444/- was confirmed against M/s Mahavir Industries along with imposition of penalty of identical amount.
2. The matter was taken up by both the assessees before Commissioner (Appeals), who confirmed the order in original impugned before him. On subsequent appeals filed before Tribunal, it is seen that both the assessees were directed to deposit a part amount, as a condition of hearing of their appeal in terms of the provisions of Section 35F. As M/s Diwan Industries did not deposit, their appeal was dismissed for default.
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