2017 (10) TMI 1120 - HC - Central Excise

Recovery of the arrears of central excise duty - Garnishee notice - Section 11 of the CEA, 1944 - Held that - the petitioner has now paid only four instalments and defaulted in payment of the fifth instalment - the first instalments of ₹ 21.54 lakhs was paid on 11.09.2017, and even before the petitioner could take steps to pay the second installment before 22.9.2017, one of the secured creditors, who had lent monies to the petitioner, viz. ICICI Bank had moved the National Company Law Tribunal (Division Bench) Chennai (NCLT) by filing CP/564(IB)/CB/2017, under Section 7 read with Rule 4 of the Insolvency and Bankruptcy Code, 2016 - the petitioner can no longer maintain the present Writ Petition - petition dismissed.

Summary

Issues:
Challenge to notice for non-payment of excise duty, interim order for payment of arrears, financial difficulty leading to default in payment, insolvency proceedings leading to dismissal of writ petition.

Analysis:
The petitioner challenged a notice issued by the third respondent, claiming a liability of ?64.62 lakhs for non-payment of excise duty and defaulting on regular duty amounts. An interim order was granted, directing the petitioner to pay ?43.08 lakhs in two installments to demonstrate bona fides. The petitioner had initially agreed to pay arrears in 18 monthly installments of ?21.54 lakhs each but defaulted after the fourth installment, prompting the garnishee notice. Due to financial difficulties, the petitioner sought more time to fulfill the payment commitment. The first installment was paid, but before the second installment, insolvency proceedings were initiated by a creditor, leading to the dismissal of the writ petition. The court ruled that the petitioner could no longer maintain the petition, allowing the Department to pursue recovery proceedings as per rules, with no costs imposed on either party.