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2023 (4) TMI 1259 - HC - Central ExciseRecovery of dues - priority of charges - whether the State (Excise Department) will have priority over the secured creditor s debt? - HELD THAT - The issue involved in the present appeals is no longer res integra and has been settled by the Hon ble Supreme Court in PUNJAB NATIONAL BANK VERSUS UNION OF INDIA ORS. 2022 (2) TMI 1171 - SUPREME COURT where it was held that Commissioner of Customs and Central Excise could not have invoked the powers under Rule 173 Q(2) of the Central Excise Rules 1944 on 26.03.2007 and 29.03.2007 for confiscation of land buildings etc. when on such date the said Rule 173Q(2) was not in the Stature books having been omitted by a notification dated 12.05.2000. Secondly the dues of the secured creditor i.e. the Appellant-bank will have priority over the dues of the Central Excise Department as even after insertion of Section 11E in the Central Excise Act 1944 w.e.f. 08.04.2011 and the provisions contained in the SARFAESI Act 2002 will have an overriding effect on the provisions of the Central Excise Act of 1944. Since the question involved in the present appeal is no longer res integra and has been settled by the Hon ble Supreme Court in Punjab National Bank s case all the Letters Patent Appeals are dismissed.
Issues involved: Priority of State (Excise Department) over secured creditor's debt.
Summary: The High Court of Himachal Pradesh disposed of the Letters Patent Appeals as the issue involved in all the appeals was the same, concerning whether the State (Excise Department) would have priority over the secured creditor's debt. The respondents argued that this issue had already been settled by the Supreme Court in Civil Appeal No. 2196 of 2012, Punjab National Bank vs. Union of India and others. The Supreme Court clarified that the secured creditor would have priority over the Excise Department's dues, even after the insertion of Section 11E in the Central Excise Act in 2011. The SARFAESI Act, 2002 provisions would have an overriding effect on the Central Excise Act of 1944. The Court emphasized that the Commissioner of Customs and Central Excise could not have confiscated assets when the relevant rule was not in force. The Court dismissed all the Letters Patent Appeals based on the settled legal position established by the Supreme Court.
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