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2018 (3) TMI 183 - HC - Central ExciseAttachment of immovable property - recovery of dues of lessee - whether the department can seek recovery of the dues of Harshwardhan Exports through sale of the property of the petitioner? - proviso to subsection (1) of Section 11 of the Central Excise Act as well as on subclause (ii) of clause( c) of subsection (1) of section 142 of the Customs Act. Held that: - invocation of the said provisions by the department is defective. The central excise dues are that of Harshwardhan Exports. The department has not set up any case of Harshwardhan Exports and the petitioner Chandra Dyeing being one and same entity though on paper, separate companies. The transaction of transfer of the leasehold rights of Harshwardhan Exports to the petitioner took place before the order of attachment was passed. It is not a case where the transfer took place after the property was attached. In plain terms, the said provisions apply in case of transfer of business and not merely transfer of property or assets. In absence of any assertion of the department that Harshwardhan Exports and the petitioner Chandra Dyeing are the clones and the entire exercise of creating Harshwardhan Exports as a separate company was a sham transaction to defraud the Government revenue, in facts of the present case, there is no possibility allowing the respondents to sell the property of the petitioner for the unpaid dues of the Harshwardhan Exports. Even in the show cause notice dated 04.02.2010, the department has not built any such case - Merely because Harshwardhan Exports agreed not to vacate the premises till full export obligations are discharged, would not create any additional right in the property which can be sold for the purpose of recovery of the dues of Harshwardhan Exports. The attachment and distress imposed by the department on the property in question are set aside - petition allowed - decided in favor of petitioner.
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