TMI Blog2019 (5) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... . The excise department cannot claim priority charge over the respondent No. 6/bank - at the time the movable and immovable assets of the respondent No. 5 were put to auction by the respondent No. 6 and the petitioner purchased the same in auction till then, the respondent Nos. 2 to 4/Excise Department had not attached any of the movable or immovable property of the respondent No. 5. No charge was created over the assets of the respondent No. 5 of the excise dues. The Central Excise dues were also not crystalized as on the date the property was put to auction and purchased by the petitioner. The order of recovery was passed by the Central Excise Department in the year 2012 that is after the sale of the assets of the respondent No. 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant petition. 3. Mr. Suryawanshi, the learned advocate for the petitioner submits that, the petitioner is a bonafide purchaser in the auction conducted by the respondent No. 6/bank of movable and immovable assets of the respondent No. 5 under the Securitization Act. The dues of the secured bank shall have priority claim over the excise department. The learned counsel to buttress his submissions relies on the judgment of the Division Bench of this Court in a case of National Steel and Agro Industries Limited Mumbai Vs. State of Maharashtra and others reported in 2015 (2) AIR Bombay Report 805 , so also another judgment of the Division Bench of this Court in a case of Sherwood Resorts Pvt. Ltd. and another Vs. State of Maharash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith unknown encumbrances not known by the bank. After the purchase, the petitioner also approached the respondent No. 4 for Central Excise and Service Tax registration. Unless and until the earlier dues of the respondent No. 5 are recovered and unless the old registration in the name of the respondent No. 5 is cancelled, it is not possible to continue the second fresh registration in the name of the petitioner for the said premises again. In view of the clause in the tender, the purchaser of the respondent No. 5 is liable to pay the Central Excise dues as per the provisions of Sec. 11E of the Central Excise Act and also similar provisions under the Finance Act, 1994. The sale certificate for movable property issued does not speak about unkn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent No. 5/Karkhana. There is also delay in filing the writ petition by the petitioner. 7. Upon having considered the contentions of the parties, the moot question for determination is, Whether the Central Excise Department is entitled to recover the Central Excise dues of the erstwhile owner viz respondent No. 5/Karkhan from the auction purchaser/petitioner having purchased the movable and immovable assets of the respondent No. 5 in auction proceedings conducted by the respondent No. 6 secured creditor under the provisions of the Securitization Act ? 8. It appears that, the respondent No. 6 is a secured creditor of the respondent No. 5. The respondent No. 5 did not pay the dues of the respondent No. 6. The respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner. The sale certificate specifically recites about the property of the respondent No. 5. 9. The petitioner cannot be made liable to pay the excise dues of the erstwhile owner of the property only because the petitioner has purchased the property in auction conducted under the provisions of the Securitization Act. 10. Excise dues is not a liability arising out of land, building or machinery. The excise duty is payable on manufacture of excisable goods. The excise department cannot claim priority charge over the respondent No. 6/bank. The reliance placed by the respondent Nos. 2 to 4/department in a case of M/s Rana Girders Ltd. Vs. Union of India and others would not be of any avail to the respondent Nos. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty payable by an assessee under the Central Excise Act or the Rules made thereunder shall, save as otherwise provided under the Securitization Act 2002 and the other acts detailed therein be the first charge on the property of the assessee or the person as the case may be. Section 11E of the Central Excise Act will have to be read subject to the provisions of the Securitization Act. Section 35 of the Securitization Act provides that the provisions of the Securitization Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. We are not referring to Section 26E of the Securitization Act. Said provision was not in fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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