Partnership Firm is Considered as Juridical Person and Cannot have Relative defined u/s 2(41) of Companies Act: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the partnership firm was considered a juridical person and mot ad natural person and cannot have relatives which is defined under section 2(41) of the Companies Act,1956. 

Asha Industries, the appellant assessee was a partnership firm comprising Indubhai M Patel, Devangbhai R Patel and Naynaben M Patel were engaged in the manufacture of IPCO creamy snuff falling under the Central Excise Tariff Act, 1985 in their factory Nadiad and obtained Central Excise Registration in the name of the Partnership firm. 

Three partners were endorsed on the reverse of the Registration Certificate and the manufactured by the assessee were sold in the local market. 

The assessee appealed against the order passed by the adjudicating authority for confirming the excise duty demand and for the imposition of a penalty. 

S.P. Mathew, the counsel for the assessee contended that the partnership firm and a Proprietorship firm are related persons and the partnership firm was independently a juridical person and not a natural person a juridical person cannot have a relative as defined in clause 41 of Section 2 of the Companies Act which definition of a relative is adopted in section 4 of the Act. 

Also submitted that the definition of relative provided in the Companies Act applied only to the natural person and therefore the said definition had no application to the fact of the present case. 

R K Agarwal, the counsel for the department relied on the decisions made by the lower authorities and contended that the entire demand and the imposition of penalty raised was as per the law and liable to be sustained. 

The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that the partnership firm was considered a juridical person and cannot have relatives which is defined under section 2(41) of the Companies Act. 

To Read the full text of the Order CLICK HERE

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