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2013 (6) TMI 59 - HC - Central ExciseUltr vires - attachment recovery and auction - Application of provisions of Section 142 (b) and 142 (c) (ii) of the Customs Act to the Central Excise Act - Section 12 of the Central Excise Act - recoverable Cenvat / Modvat credit wrongly availed - held that - we do not find any good ground to interfere in the matter. This Court did not grant any interim order against the attachment and sale to recover the amount. It is not uncommon for a statute to adopt by reference the provisions of other statute in so far as the incidental matters are concerned. In the present case the provision of Section 142 of the Customs Act are duly adopted by Section 12 of the Central Excise Act 1944 for the purposes of recovery of excise duty by attachment and sale. Consequently the provisions of the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules 1995 are applicable for attachment of the property for its sale. - Decided against the assessee.
Issues Involved:
1. Validity of Notification No. 68/63 CE dated 4.5.1963 as amended by Notification No. 48/97-CE dated 2.9.1997. 2. Legality of the attachment and auction of the petitioner's property. 3. Recovery of CENVAT credit on inputs lying in stock and inputs contained in finished goods. 4. Applicability of Section 142 of the Customs Act to the Central Excise Act. 5. Compliance with auction procedures and reserve price. Detailed Analysis: 1. Validity of Notification No. 68/63 CE and its Amendment: The petitioner-company challenged the notifications as ultra vires Section 12 of the Central Excise Act, arguing that the provisions of Section 142 (b) and 142 (c) (ii) of the Customs Act should not apply to the Central Excise Act. The court upheld the application of these provisions, stating that it is not uncommon for a statute to adopt provisions of another statute for incidental matters. Section 142 of the Customs Act was duly adopted by Section 12 of the Central Excise Act for recovery purposes. 2. Legality of Attachment and Auction of Property: The petitioner sought to lift the attachment of its property and quash the auction held on 8.11.2005. The court found no error in the attachment and auction proceedings. The first auction on 21.3.1995 did not meet the reserve price, and the second auction on 8.11.2005 followed guidelines allowing the sale at the highest bid close to the reserve price. The court confirmed the legality of the auction process and the subsequent sale of the goods. 3. Recovery of CENVAT Credit: The petitioner contested the recovery of CENVAT credit on inputs lying in stock and inputs contained in finished goods as of 3.5.2000. The CEGAT confirmed the demand of Rs. 38,22,164/- under Section 11-A of the Act, which included inputs used for manufacturing finished goods and stock of raw materials. The court noted that CENVAT credit is not allowed on inputs used in the manufacture of exempted goods as per Rule 57-AD. The Supreme Court upheld the CEGAT's order, rejecting the petitioner's appeal and review petition. 4. Applicability of Section 142 of the Customs Act: The petitioner argued against using Customs Act provisions for recovery under the Central Excise Act. The court dismissed this argument, stating that Section 142 of the Customs Act is applicable for the recovery of excise dues by attachment and sale, as adopted under Section 12 of the Central Excise Act. The court found no grounds to interfere with the application of these provisions. 5. Compliance with Auction Procedures and Reserve Price: The petitioner claimed the auction did not comply with the reserve price and procedures. The court found that the auction followed the guidelines issued by C.B.E.C., which allowed the sale of goods at the highest bid in the second auction, even if it was below the reserve price. The court concluded that the auction process was lawful and dismissed the petitioner's claims. Conclusion: The court dismissed the writ petition, confirming the validity of the notifications, the legality of the attachment and auction of property, the recovery of CENVAT credit, the applicability of Section 142 of the Customs Act, and the compliance with auction procedures.
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