2018 (3) TMI 1885 - HC - Central Excise

Withdrawal of investments made - Clause-F of the notification dated 21-1-2004 - writ petition is preferred with the grievance that in spite of the petitioner being entitled to remove the capital investment in plants and machineries under Clause-F of the notification dated 21-1-2004 the respondent authorities are not allowing the petitioner to do so - HELD THAT - None of the three methods provided under Section 11 of the Central Excise Act 1944 empowers the department to attach any property of an assessee/person on the ground that such person or assessee may be liable to pay the department any amount towards meeting the dues under the Central Excise Act or the Rules framed thereunder. In the absence of such power this Court cannot concur with the stand taken by the respondent authorities in paragraph-8 of the affidavit in opposition that in exercise of power under Section 11 of the Central Excise Act 1944 the plants and machineries of the petitioner are being attached for the purpose of meeting the dues that may be due from the petitioner in respect of such cases mentioned therein which are pending before the Hon ble Supreme Court of India or before the CESTAT Kolkata. The conduct of the Excise Department in not allowing the petitioner to remove the plants and machineries is found to be contrary to the powers conferred under Section 11 of the Central Excise Act 1944 and this Court is of the view that the respondent Excise Department cannot attach any other property of the petitioner other than any excisable goods and also cannot restrain the petitioner from lifting the plants and machineries involved in the present writ petition by taking recourse of Section 11 of the Central Excise Act 1944. The appropriate authority in the Central Excise Department shall not prohibit the petitioner from lifting and taking away the concerned properties by exercising their power under Section 11 of the Central Excise Act 1944 - Petition disposed off.

Summary

Issues:
- Interpretation of Notification No. 8/2004-C.E. regarding exemptions on excise duties
- Application of condition F of the notification on investments made by the petitioner
- Dispute over removal of capital investment equipment by the petitioner
- Examination of Section 11 of the Central Excise Act, 1944 for attachment of property by Excise Department

Interpretation of Notification No. 8/2004-C.E.:
The petitioner, a company engaged in manufacturing gutkha products, sought to remove capital investment equipment from their factory premises based on Notification No. 8/2004-C.E. granting exemptions on excise duties. The notification specified conditions, including Clause-F, restricting withdrawal of investments made before 31-3-2005 for ten years. The petitioner argued their entitlement to remove investments post the ten-year period, as per the notification.

Application of condition F on Investments:
Having invested before 31-3-2005, the petitioner requested to remove capital investments, citing the expiry of the ten-year period as per Clause-F of the notification. However, the Excise Department opposed, citing pending disputes on revenue payable by the petitioner before higher courts as reason for disallowing the removal.

Dispute over Removal of Capital Investment Equipment:
The petitioner filed a writ petition challenging the Excise Department's refusal to allow removal of capital investments. The Department, invoking Section 11 of the Central Excise Act, 1944, claimed authority to attach the petitioner's plants and machineries due to pending revenue disputes.

Examination of Section 11 of the Central Excise Act, 1944:
The Court analyzed Section 11, concluding that it does not empower the Excise Department to attach an assessee's property for potential dues. The Court held that the Department's actions were contrary to Section 11, emphasizing that the Department cannot restrain the petitioner from lifting the plants and machineries under the Act.

In the final judgment, the Court directed the Excise Department not to prohibit the petitioner from removing the concerned properties, asserting that the Department lacks the authority to attach any property beyond excisable goods under Section 11 of the Central Excise Act, 1944. Consequently, the writ petition was disposed of in favor of the petitioner.