Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

New Delhi, the 18th June, 2013


All Chief Commissioners

Sub:     Review of Action Taken Report (ATR) on the Minutes of the Conference of Chief Commissioners and Directors General held on 28.08.2012 – waiver of arrears of penalties on individuals who are no more – reg.


As you may be aware, during the Conference of Chief Commissioners and Directors General on 28th August, 2012, a point was raised that the arrears of penalties imposed on individuals, who are no more, may be waived off.

2.         The issue has been examined and it is observed that there are contrary decisions in these judgements on the issue of recovery of amount of penalty, which has been imposed on an individual during his lifetime, from his legal heir against the personal properties left behind by the defaulters.  The following judgements on this issue are relevant:

                     (i)        Bhagwan Devi Banka and Others [1986(26)ELT 890(Pat)]

                    (ii)        Tarak Nath Gayen and Others [1987(31) ELT 631(Calcutta)]

                   (iii)        Omwati Vs UOI [2000(125)ELT 136(All.)]

                  (iv)        Khadeeja Vs District Collector [2006(2)KLT 654]

3.         It is observed that the hon’ble High Courts at Kerala and Patna have given judgements in favour of the department by ruling that the proceedings can be continued against the personal assets in the hands of the legal heirs.  On the other hand, the hon’ble High Courts at Allahabad and Calcutta have ruled that the penalty imposed in such cases cannot be recovered from the legal representatives of the deceased.  Therefore, the facts of the case in these judgments are not identical and the application of ratio of these judgments will depend on the facts on case to case basis.

 4.         Accordingly, it has been decided not to issue any instructions in this matter. The field formations may, therefore, take action to realise such arrears in accordance with the statutory provisions and legal pronouncements in this regard.

Yours faithfully,

(Surendra Singh)

Under Secretary to the Govt. of India

Tel: 2309 2413

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