TMI Blog1991 (4) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30-5-1985 passed by the A.C. of Central Excise Div. F-1, Bombay adjusting the sum of Rs. 85,071.83 payable to two Textile Undertakings, namely the Finlay Mills and the Gold Mohur Mills, both of Bombay, against the confirmed demand of Rs. 1,91,381.80 on those two undertakings. 2. The factual position, material for the purpose of the present appeals are, that formerly both the aforesaid Textile Undertakings were functioning as independent units under their own management, and during that period, they had became entitled to get certain refund, which was later worked out at Rs. 85,071.83 and were also held liable to pay the excise dues of Rs. 1,91,381.80 for which the demand was raised and confirmed. Both the undertakings, however, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the provisions of Section 11 of the CESA, 1944, could not stand attracted, the appellants prayed for setting aside the order of adjustment, and for payment of the refund amount to them. The Collector (Appeals) has, vide order referred to above, however negatived the said contention and has confirmed the adjustment. 3. Mr. M.N. Acharya, the General Manager of the appellants, reiterating the same plea as raised before the first appellate authority, drew our attention to the provisions of Section 3 and specifically to the provisions of sub-sections (1), (2) and (7) of the Take Over Act, 1983 and submitted that statutorily, they were entitled to recover all the amounts payable to the Taken Over Undertakings, irrespective of whether the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants, the short question that arises for our determination is whether the statutory provisions of Take Over Act, 1983, provides for investing the right to recover the dues to the taken over unit, in the appellant, with no corresponding liability to pay the debts of such units and if yes, whether those provisions could affect the statutory provisions of Section 11 of the CESA, 1944. 6. Examining first the issue relating to the over-riding effect of the Take Over Act, 1983, over the provisions of CESA, 1944, both the Acts are Central Legislation, CESA, 1944, being a general law applicable to all the manufacturers, whereas the Take Over Act, 1983 providing the special provisions, in relation to a specified class of manufacturers. As per t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king before the appointed day shall be enforceable against the concerned textile company and not against the Central Government or the Custodian. By virtue of sub-section (1), the management of the Textile Undertaking would stand vested in the Central Government. The appellants are the custodian appointed by the Central Government for the management, and as such, the management vests in them from the appointed day. What would include in the word Textile Undertaking has been specified in sub-section (2), where amongst others, all other rights and interest arising out of such property also stand included. Reading the provisions of sub-section (2) in entirety, with specific emphasis on the sentence quoted hereinabove, it becomes clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by which although the assets vest, the liabilities are not taken over by the Custodian and continue to remain with the Textile Company which is divested of its assets. Hence the assets now being in the hands of the Custodian are not liable to be attached or used for purpose of recovery of pre-takeover dues. Hence the refund claims would be recoverable by the Custodian, but the dues cannot be recovered from the Custodian or by way of attachment of their assets. The opinion as given, practically provides a complete answer to the issue raised for our determination. It may however be observed that the authenticity of the opinion is not established inasmuch as, there is no indication available from the copy furnished in the paper book, that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is taken over, the entire Act will become infructuous. 11. Reliance is sought to be placed on the Order Nos. 2196-2198/90-WRB, dated 24-12-1990 of the Single Member (where one of us sat as a Single Member) where such adjustment has been held as permissible. From the discussion made thereunder, it appears that the issue was not projected from the angle as is now done, and also the view expressed by the Bombay High Court was not made available. However, now that the legal position is clear, and when provisions of sub-section (1), (2) and (7) of Section 3 of the Take Over Act, 1983 are read in conjunction, it has to be concluded that the earlier view based on the general principles of appropriation of dues against the debts, cannot be sus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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