2009 (3) TMI 212 - HC - Central Excise

Summary

Issues:
1. Liability of a purchaser for outstanding excise duty of the erstwhile owner.
2. Legality of the demand notice issued by the Central Excise Authorities.
3. Lack of opportunity given to the petitioner to explain his position.

Analysis:
1. The petitioner, a manufacturing unit owner, purchased a shed from a previous owner in 1997. The Central Excise Authorities demanded payment of outstanding excise duty from the previous owner, holding the petitioner liable. The petitioner contended that as a mere purchaser of land and building, he should not be responsible for the previous owner's dues. The court noted that the demand notice lacked a proper explanation or opportunity for the petitioner to present his case.

2. The court observed that the demand notice did not provide any background information or give the petitioner a chance to present his version before demanding payment. It emphasized the necessity of issuing a notice to the person being made liable for dues, allowing them to respond and present their case. The court directed the authorities to treat the demand notice as a show cause notice, giving the petitioner an opportunity to file objections within six weeks and appear before the Assistant Commissioner for a hearing.

3. The lack of due process in issuing the demand notice led the court to dispose of the writ petition by instructing the authorities to provide a fair opportunity for the petitioner to contest the demand and present his arguments. The court highlighted the importance of following proper procedures and giving individuals a chance to explain their position before holding them liable for outstanding dues of previous owners.

In conclusion, the judgment focused on ensuring procedural fairness and giving the petitioner a chance to contest the demand notice issued by the Central Excise Authorities. It underscored the importance of providing individuals with an opportunity to present their side of the story before making them liable for dues of previous owners, emphasizing the principles of natural justice and due process in such matters.