Home Case Index All Cases Central Excise Central Excise + HC Central Excise - 2022 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 1332 - HC - Central ExciseRecovery of Central Excise Duty alongwith interest and penalty - landowners - manufacture of excisable items or not - HELD THAT:- Though the petitioners became owners of the subject land, they cannot be construed as manufacturers of the excisable goods in the plant and machinery which belonged to respondent No.4 out of which the excise duty arose. This issue is squarely covered by the decision of the Supreme Court in M/S. RANA GIRDERS LTD. VERSUS UNION OF INDIA & OTHERS [2013 (8) TMI 540 - SUPREME COURT]. That was a case where land belonging to the manufacturer was purchased in auction sale. When similar demand notice was issued, the same came to be challenged by the auction purchaser. Notice was issued to the auction purchaser because the borrower had failed to discharge the excise duty liability. In Rana Girders Ltd, Supreme Court had considered two earlier decisions in MACSON MARBLES PVT. LTD. VERSUS UNION OF INDIA [2003 (11) TMI 71 - SUPREME COURT] and UNION OF INDIA VERSUS SICOM LTD. [2008 (12) TMI 53 - SUPREME COURT] and thereafter held UPFC being a secured creditor had priority over the excise dues. We further hold that since the appellant had not purchased the entire unit as a business, as per the statutory framework, he was not liable for discharging the dues of the Excise Department. Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property, etc. Likewise, statutory liability arising out of the plant and machinery could be the sales tax, etc. payable on the said machinery. As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefore, these statutory dues are in respect of those items produced and not the plant and machinery which was used for the purposes of manufacture. Following the decision of the Supreme Court in M/S. RANA GIRDERS LTD. VERSUS UNION OF INDIA & OTHERS [2013 (8) TMI 540 - SUPREME COURT] as well as of this Court in GOPAL AGARWAL VERSUS THE COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, HYDERABAD [2015 (2) TMI 607 - ANDHRA PRADESH HIGH COURT], impugned notice dated 02.11.2004 issued by respondent No.3 is hereby set aside. However, it would be open to respondents No.1, 2 and 3 to take such steps as may be permissible in law for recovery of outstanding excise duty from respondent No.4 (M/s. Chemo Steels Private Limited). Petition allowed.
|