Liability of a person for purchasing property under SAFARAEISI Act from a bank under auction

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..... Liability of a person for purchasing property under SAFARAEISI Act from a bank under auction
Query (Issue) Started By: - CLARENCE PEREIRA Dated:- 29-4-2010 Last Reply Date:- 4-5-2010 Central Excise
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Central Excise
This is with reference to property with land,building,machinery,stores etc purchased from the Bank under SAFARAEISI Act. We have disposed the machinery.Central .....

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..... Excise authorities are demanding Central Excise Duty on the grounds that the previous owner may have taken modvat Credit.Under SAFARAEISI Act only the assets are transfered & not the liabilities.We have not purchased from the previous owner nor is it a take over of the previous business.The previous business is part of the old owner and we only have bought the assets.Hence the question of paying E .....

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..... D does not arize,nor reversal of MODVAT as we have no info as to whether MODVAT was taken at all.The Central Excise authorities should make a claim on the previous ownner.It is OK if we had taken over the business lock,stock&barrel from the previous owners. Kindly let us know if our stand is correct and any case law to support our claim. Reply By Surender Gupta: The Reply: I think the action of th .....

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..... e department appears to be not correct. Section 11 of the central excise act, 1944 is applicable in case of succession of business. Whatever the case may be, section 11 is applicable for making recovery only. The provisions of section 11 can not be used to deny the Cenvat / Modvat credit merely saying that previous owner was in default. Reply By Surender Gupta: The Reply: The Securitisation and Re .....

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..... construction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) empowers Banks / Financial Institutions to recover their non-performing assets without the intervention of the Court. Therefore, purchase of an asset under SARFAESI Act should be liable under section 11 of the CE Act, 1944. Reply By Surender Gupta: The Reply: You may also refer to decision of Punjab and Hary .....

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..... ana High Court as reported in T.C. SPINNERS PVT. LIMITED Versus UNION OF INDIA - 2010 TMI - 75132 - PUNJAB AND HARYANA HIGH COURT]
Discussion Forum - Knowledge Sharing .....

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