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2014 (3) TMI 483 - AT - Central ExciseRecovery of arrears of excise duties - Attachment of property - There was a lease agreement between M/s. Bhavya Apparels Pvt. Ltd. and the appellant herein for leasing out the property - Lease agreement was an unregistered document as there is no stamp duty paid nor it is registered with the authorities - M/s. Bhavya Apparels Pvt. Ltd. stopped then operation from March, 2000 and also that M/s. Bhavya Apparels Pvt. Ltd has not paid the lease rent from March, 2000 - Department has not relied upon this lease agreement as a sole basis for grant of EO permission or any other licences to M/s. Bhavya Apparels Pvt. Ltd. - appellant herein is in possession and control of the premises which is attached - Whether the provisions of Section 142(1)(c)(ii) of the Customs Act, 1962 stand rightly invoked by the authorities below for attaching property in question for recovering the duty confirmed against the tenant. Held that:- Provisions of Section 142 of Customs Act, 1962 provides for recovery of some dues to the Government from any person and the provisions of Section 142(1)(c)(ii) lays down that the proper officer of the Customs has power in accordance with the rules made in that behalf to destrain any movable or immovable property belonging to or under the control of such person for the recovery of amount payable by such person. Thus, it is very clear that any action under Section 142(1)(c)(ii) has to be in accordance with the rules and those rules are Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995. Rules themselves make it clear that the property to be attached should be of the defaulter and it is more clearer from Rule 3 of the said Rules talks about the property owned by the defaulter. Rules 4 and 5 provide for the issuance of the Notice to be served upon the defaulter and then retaining the defaulter’s property until the amount due is recovered. To my mind, it is clear that the attachment, restrainment, etc. of immovable property under Section 142(1)(c)(ii) read with rules, can only be in respect of the property owned by the defaulter. To my mind the wordings used in the Section 142(1)(c)(ii) also very clearly mandate that the immovable property to be attached should be owned by the defaulter and not under his possession. Under these circumstances, mere possession does not give the control of the property because of the control of property always rests with the legal owner and not with the possessor. In case of lease hold properties, the legal control of the property remains with the lessor, even though the possession may be with the lessee and it cannot be said that the lessee has control over the property. It is undoubted that in this case, the lessee has got only the possession of the property by virtue of his right under the lease deed and the same are limited to the extent lease deed indicates. Lease agreement was not the only sole document for granting licence and various permissions to run an EOU and I agree that there is nothing on record to show that the said lease deed was placed before the authorities for grant of permission to the EOU. In such a situation, the Revenue authorities cannot invoke a clause which is an agreement between the lessor and lessee, and was not the only clause which prompted the Department to issue the licence to M/s. Bhavya Apparels Pvt. Ltd. There is also nothing on record to indicate that M/s. Bhavya Apparels Pvt. Ltd. was in possession and control of the said premises, when the authorities initiated the proceedings on 2-2-2006 for attachment of the said property - Therefore, attaching property is not legal. The same is neither just nor fair even on the basis of principle of justice, equity and good conscious. The same is, accordingly, set aside - Decided in favour of appellant.
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