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2022 (12) TMI 7 - HC - Central ExciseRecovery of excise dues payable by the erstwhile owner of the land and property - restraint on petitioner from alienating the land in any manner - HELD THAT - Supreme Court in Macson Marbles (P) Ltd. v. Union of India 2003 (11) TMI 71 - SUPREME COURT and Union of India v. SICOM Limited 2008 (12) TMI 53 - SUPREME COURT held that as far as dues of central excise are concerned, those are neither related to plant and machinery nor to the land and building. Thus, it did not arise out of the said properties. Dues of central excise became payable on the manufacturing of excisable items by the erstwhile owner. Therefore, the excise duties were in respect of those items which were produced and not the plant and machinery which were used for the purpose of manufacturing. This decision has been followed by this Court in Gopal Agarwal v. Commissioner of Customs and Central Excise, Hyderabad, 2015 (2) TMI 607 - ANDHRA PRADESH HIGH COURT . While setting aside similar notice, this Court had however left it open to the excise authorities to take any other steps permissible in law for recovery of the arrears of excise duty. Petition allowed.
Issues involved:
Challenge to notice for recovery of excise dues and restriction on alienation of land. Analysis: The High Court heard arguments from both the petitioners' counsel and the counsel representing Customs and Central Excise. The petition sought to quash a notice issued for the recovery of excise dues from the previous owner of the land, Midwest Alloys Pvt. Limited, and to prevent the petitioner from selling the land. The petitioner, engaged in the manufacture of saw-dust powder for mosquito coils, contended that the excise dues were not their liability as they acquired the land after it was seized from Midwest Alloys Pvt. Limited due to default in repayment of financial assistance. The excise authorities initiated recovery action based on the proviso to Section 11 of the Central Excise Act, 1944. The respondent filed a counter affidavit stating the outstanding excise duty and penalty owed by Midwest Alloys Pvt. Limited. The legal issue was whether the excise duty liability could be transferred to the petitioner. The High Court referred to a Supreme Court judgment in Rana Girders Limited v. Union of India, where it was held that a subsequent purchaser is not liable for the excise dues of the previous owner unless there is a specific provision in the statute claiming "first charge for the purchaser." The court emphasized that excise duties are related to the items produced, not the plant and machinery or the land and building. The court clarified that statutory liabilities arising from the land or properties should be borne by the purchaser, but excise dues do not fall under this category. The court also cited a previous decision where a similar notice was set aside, allowing excise authorities to take other legal steps for recovery. Based on the legal principles established by the Supreme Court and previous decisions, the High Court set aside the notices issued for recovery of excise dues and restriction on alienation of the land. The court granted permission to the excise authorities to take lawful steps for recovering the outstanding excise duty from Midwest Alloys Pvt. Limited. The writ petitions were allowed without costs, and any pending miscellaneous applications were closed.
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