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2016 (1) TMI 1008 - HC - Central ExciseCentral excise registration cancelled - Purchaser of land - Held that - Merely because the defaulter unit, though it had ceased to carry on business on the premises in question, had failed to apply for de-registration, the same should not, in any manner, come in the way of the petitioners in obtaining central excise registration in respect of the premises in question. The stand adopted by the respondent authority that in respect of the same premises, two persons cannot be registered being contrary to the provisions of law, cannot be accepted. See Jagdish Enterprise P. Ltd. and others V/s. Union of India and others 2014 (11) TMI 700 - GUJARAT HIGH COURT Under the circumstances, impugned order dated 26.11.2015 is quashed. Resultantly, the Central Excise Registration of the petitioner would be revived and restored. It is clarified that if the Department has any doubt about the actual manufacturing activity at the site, it is always open for the Department to examine the issue from the angle of any other provisions of the Central Excise law. Petition is allowed and disposed of accordingly
Issues Involved:
1. Cancellation of Central Excise Registration. 2. Outstanding government dues of the erstwhile owner. 3. Absence of plant and machinery at the site. 4. Legal precedents and their applicability. Detailed Analysis: 1. Cancellation of Central Excise Registration: The petitioners challenged the order dated 26.11.2015, issued by the Deputy Commissioner of Central Excise, Bharuch, which canceled the central excise registration of the petitioner. The operative portion of the order stated that the Central Excise Registration was canceled/revoked/suspended under the provisions of Section 6 of the Central Excise Act, 1944, read with Rule 9 of the Central Excise Rules, 2002, and Sub Para 3.2 of Para 3 of Chapter 2 of CBEC's Central Excise Manual of Supplementary Instructions 2005. 2. Outstanding Government Dues of the Erstwhile Owner: The Department issued a show cause notice to the petitioners on 4.9.2015, citing that the erstwhile owner of the land had outstanding government dues of Rs. 8.39 lacs and had not canceled their central excise registration. The Department argued that this outstanding amount was a significant reason for the cancellation of the petitioner's registration. 3. Absence of Plant and Machinery at the Site: Another ground for the show cause notice was the absence of plant and machinery at the site, as found during an inspection by the Excise Officers. However, it was later clarified that for mere registration under the Central Excise Act, it is not necessary that the manufacturing unit should be fully operational. 4. Legal Precedents and Their Applicability: The petitioner's counsel relied on several legal precedents to argue their case, including: - Surat Metallies Ltd. v. Commissioner of Central Excise: This case held that the registration must be by the "Person" and not necessarily linked to the premises. - M/s. Jahaan Steel Ltd. v. Union of India: This judgment supported the view that the failure of an earlier registrant to de-register should not prevent a new registrant from obtaining registration. - Jagdish Enterprise P. Ltd. v. Union of India: This case reiterated that the registration is tied to the person, not the premises, and outstanding dues of the previous owner should not affect the new owner's registration. The court referred to these decisions and noted that the issue of non-issuance of a Registration Certificate to a subsequent purchaser due to the outstanding dues of the previous owner had been consistently resolved in favor of the new registrant. The court emphasized that the registration should be person-specific and not premises-specific, and the outstanding dues of a previous owner should not impede the registration of a new owner. Conclusion: The court quashed the impugned order dated 26.11.2015, thereby reviving and restoring the Central Excise Registration of the petitioner. It was clarified that if the Department had any doubts about the actual manufacturing activity at the site, they could examine the issue under other provisions of the Central Excise law. The petition was allowed and disposed of accordingly.
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