2017 (3) TMI 634 - AT - Central Excise

Refund of EMD - Recovery of arrears - auction conducted to recover dues from M/s. Moghul Textiles Ltd. - refund claimed on the ground that the the property is Shikkam land - whether the property is Shikkam land (Property belonging to Government) and therefore requested for setting aside the sale and to return the EMD is justified? - Held that - This question falls within the jurisdiction of a Civil Court and the Tribunal cannot sit and decide the Civil rights regarding to property. If the Department contends that the counter affidavit filed by the Government in the Honorable High Court is sufficient document to hold that the property belongs to M/s. Moghul Textiles Ltd then they can very well put the property for re-auction - The adjudicating authority has set aside the sale and returned the EMD. After such long time, the department would be more benefited if the property is put for re-auction to recover the dues; the property being immovable property - appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Validity of returning the EMD to the respondent.
2. Ownership of the property in question.
3. Jurisdiction of the Tribunal in deciding civil rights regarding property.

Analysis:

1. The appeal was filed by the department challenging the order of the adjudicating authority that directed the refund of the Earnest Money Deposit (EMD) paid in an auction for recovery of arrears from a company. The respondent had bid in the auction, deposited EMD, but later discovered that the property was government-owned. The original authority, after an enquiry, concluded the property was government land and set aside the auction, ordering the return of the EMD to the respondent.

2. The department contended that the property belonged to the company and not the government, disputing the adjudicating authority's decision. The department relied on a counter affidavit filed by the government stating the land was private and not government-owned. The Tribunal considered the ownership issue crucial in determining the validity of returning the EMD to the respondent.

3. The Tribunal analyzed whether the adjudicating authority was correct in returning the EMD and whether the ownership issue was within its jurisdiction. It noted that determining property ownership falls under civil court jurisdiction, and the Tribunal cannot decide civil property rights. The Tribunal highlighted the department's inaction despite the government's counter affidavit, suggesting the property could be re-auctioned for recovery. As the department had not pursued legal remedies or actions to sell the property, the Tribunal found no grounds to interfere with the adjudicating authority's decision to dismiss the appeal.

In conclusion, the Tribunal dismissed the appeal, emphasizing the importance of resolving the ownership issue through appropriate legal channels and actions rather than through the Tribunal.