1993 (11) TMI 65 - HC - Central Excise

Summary

Issues:
1. Recovery of Excise Duty arrears from a petitioner by invoking the Revenue Recovery Act.
2. Estoppel claim by the petitioner due to an arrangement with a third party for payment of arrears.

Analysis:
1. The petitioner, a small scale unit manufacturing dyestuffs, defaulted on excise duty payments from November 1977 to March 1978. The total due was Rs. 18,620.31, with an agreement to pay in monthly installments. Despite reminders, the arrears remained unpaid. The petitioner then entered an arrangement with another company to pay the arrears, but only partial payments were made. The second respondent sought recovery under the Revenue Recovery Act, leading to the writ petition for quashing the proceedings.
2. The petitioner argued that the second respondent, having agreed to receive arrears from the third party, should not recover the balance from the petitioner. However, the court held that the primary liability to pay the dues rested with the petitioner. The court found the petitioner's claim frivolous, emphasizing the abuse of payment privileges and the continuous liability until the dues are cleared. The court dismissed the writ petition, stating that the liability of the petitioner remains unchanged until fully paid, regardless of arrangements with third parties. The court upheld the right of the second respondent to recover the arrears under the Revenue Recovery Act, as the petitioner failed to fulfill their statutory responsibilities.

Overall, the court rejected the petitioner's estoppel claim and upheld the recovery of Excise Duty arrears under the Revenue Recovery Act, emphasizing the continuous liability of the petitioner until fully paid.