2014 (11) TMI 1073 - AT - Central Excise

Demand of Excise duty and Customs duty - confirmation of demand post liquidation - whether assessee liable to discharge said duty on the goods cleared from defunct EOU - extended period invoked - waiver of the pre-deposit - Held that - The appellant is the successful bidder in auction proceeding in an order of liquidation by the Hon ble High Court of Gujarat. The clauses which have been heavily relied upon by the ld.D.R. indicate about the dues to be paid of pre-liquidation period and not post-liquidation period. The Show cause notice in these proceedings is issued is for confirmation of demand post liquidation. The Revenue authorities were aware of the winding up of the defunct EOU company. As correctly pointed out by the ld. Counsel by last letter dt.25.10.2004 the Office Superintendent of Central Excise Ahmedabad II Commissionerate has specifically requested the official liquidator to record their claim for the recovery of the Government dues of approximately 36.33 Crores. When such letter is there on record and has been filed with the official liquidator Revenue cannot turn around to say that they can invoke extended period for demand of duty liability. Similar situation arose in the case of Dytron (India) Ltd (1998 (11) TMI 132 - HIGH COURT OF CALCUTTA) wherein held that the importer company if is wound up by the operation of law official liquidator has to be considered as an importer. Thus prima facie all the appellants have made out a case for waiver of the pre-deposit of the amounts involved. Applications for waiver of pre-deposit of the amounts involved are allowed and recovery thereof stayed till the disposal of appeals.

Summary

Issues:
Stay petitions for waiver of pre-deposit of Customs duty, Excise duty, interest, and penalties.

Analysis:
The judgment involves five Stay Petitions filed for the waiver of pre-deposit of Customs duty, Excise duty, interest, and penalties imposed on the appellant. The adjudicating authority confirmed the demand of duties on the appellant for goods cleared from a defunct EOU, purchased in an auction conducted by the official liquidator. The appellant argued that the Revenue should claim dues from the official liquidator based on the judgment of the Hon'ble High Court Kolkata in a similar case. The question of limitation was raised as the company was wound up before the Revenue authorities staked their claim. The Departmental authorities had informed prospective bidders about the duty requirements. The appellant contended that being the successful bidder, they should not be held liable for the Revenue's dues post-liquidation.

The Revenue argued that the extended period was correctly invoked as the goods were from a 100% EOU, and all taxes and dues had to be paid by the purchaser post liquidation. They claimed that the appellant, as the purchaser in the auction, should be considered an importer responsible for the duty demand. After considering the submissions and records, the Tribunal disagreed with the adjudicating authority's findings. They noted that the appellant's liability was for pre-liquidation dues, not post-liquidation ones as per the clauses heavily relied upon by the Revenue. The Tribunal highlighted that the Revenue was aware of the winding up of the EOU and had requested the official liquidator to record their claim for Government dues. They referenced a similar case where the official liquidator was considered an importer by the Hon'ble High Court of Kolkata in a winding-up scenario.

Consequently, the Tribunal held that the appellants had made a prima facie case for the waiver of pre-deposit of the amounts involved. They allowed the applications for waiver and stayed the recovery of the amounts until the disposal of the appeals.