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2022 (7) TMI 230 - AT - Central ExciseRecovery of sums due to Government from the owner of property - default made by the lessee under Leave & Licence Agreement - Cancellation of registration of petitioner - HELD THAT:- The undertaking given at the time of cancellation of Central Excise registration (which says that in case M/s Roma Industries, sachin does not pay the central excise dues due to any reason whatsoever, the directors /partners of M/s Shaniyal Dying and Printing Mill, Sachin will be responsible and pay the government dues), does not ipso facto bind the appellant with the liability which is otherwise not present. The Hon’ble Supreme Court in the case of M/S. TATA CHEMICALS LTD. VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) JAMNAGAR [2015 (5) TMI 557 - SUPREME COURT] held that something illegal cannot convert itself into something legal by act of a third person. It is clear that the said undertaking was given by the Appellant in respect of dues of M/s Shaniyal Dying and Printing mills only. The last para 5 of undertaking was wrongly interpreted by the department in the present matter. The actual meaning of said para is that if the dues related to Appellant i.e. arise after the surrender of registration certificate was not paid by M/s Roma Industries, than the same will be paid by the Directors /Partners of M/s Shaniyal Dying and Printing Mills. The said undertaking nowhere state that dues related to M/s Roma Industries will be paid by the Appellant or for the dues of M/s Roma Industries appellant will be responsible. Clearly, in the present matter entire undertaking has been misinterpreted by the department. In the present matter section 11 of the Act can have no application in the facts of the case. In the present disputed matter appellant have not succeeded or acquired the business or trade of the arrears holder (M/s Roma Industries) and even have not purchased any property of the arrears holder (M/s Roma Industries). M/s. Roma Industries cannot treated as predecessor and the appellant cannot be treated as successor in the business of M/s Roma Industries. Between both of them there is relationship of lessor and lessee - Further as per the said agreement, M/s Roma Industries was absolutely liable for all the government dues for the period during which they were having possession of the said plot. On the identical facts and issue, this tribunal also considered the matter in the case of M/S SAHIL TEXTILES VERSUS COMMISSIONER OF C. EX. & S. TAX, SURAT-I [2017 (1) TMI 704 - CESTAT, AHMEDABAD] has held that recovery cannot be made from the Lessor by attachment of the property. Thus, it is settled that the government dues against the assessee cannot be recovered from the owner of the property which was leased out to the assessee against whom the dues are pending accordingly, the revenue has wrongly collected the amount of dues pertaining to M/s. Roma Industries consequently, the said amount is required to be refunded to the appellant along with interest as per law. Appeal allowed - decided in favor of appellant.
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