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2014 (8) TMI 694 - HC - CustomsPreference of charge / recovery - secured creditors or customs duty payable - Central Excise department initiated proceedings against the respondent no.2-company for payment of excise duties and, an order imposing a demand of duty along with interest and penalty - Central Excise department initiated proceedings under Section 142 of the Customs Act, 1962 and under the Attachment of Property of Defaulters for Recovery of Government Dues Rules, 1995 - Based on the said attachment order, the Assistant Commissioner, Central Excise, Allahabad by an order intimated the petitioner-bank that in view of Section 11 the land, plant and machinery and also any property in the name of respondent no.2-company should not be brought/sold/leased/transferred by the petitioner without the permission of the Assistant Commissioner of Central Excise, Division Allahabad. Held that:- petitioner, who has granted loan to respondent no.2-company is a secured creditor under Section 2(2d) of the said Act and that recovery of the loan granted could be recovered as the first charge in preference to recovery of other dues - On the other hand, Section 11 of the Central Excise Act and Section 142 of the Customs Act, 1962 only provides for recovery of sums due to the government. We do not find that these provisions indicate that the Central Excise department has any preferential charge. The learned counsel for the Central Excise department has failed to show any provision by which government dues could be recovered as the first charge - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, being a special enactment and the petitioner being a secured creditor had the first charge to recover the amount - respondent no.1 had no authority of law to restrain the petitioner-bank from proceeding with the recovery of the amount from the assets of respondent no.2 over which the petitioner had the first charge - Decided in favour of Petitioner.
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