2017 (10) TMI 655 - HC - Central Excise

Rejection of Registration application - Section 6 of the CEA, 1944 - liability of predecessor - Held that - the show cause notice issued to the predecessor of the Respondent is pending adjudication and there was no enforceable demand against the predecessor of the Respondent - the issue of alleged liability of the predecessor of the Respondent to pay demand was completely irrelevant for the consideration of Application made by the Respondent under Section 6 of the said Act and Rule 9 of the said Rules. If the Respondent had complied with all the requirements of law, there was no impediment in the way of granting registration to the Respondent notwithstanding pending proceedings against its predecessor for adjudication of the demand made from the predecessor - the Appellate Tribunal was right in holding against the Appellant - appeal dismissed - decided against appellant.

Summary

Issues:
1. Challenge to the judgment and order dated 17 October 2014 passed by the Customs, Excise and Service Tax Appellate Tribunal.
2. Interpretation of Section 6 of the Central Excise Act, 1944 and Rule 9 of the Central Excise Rules, 2002 regarding registration.
3. Validity of granting fresh registration to a successor when the predecessor's registration is subsisting.
4. Consideration of pending proceedings against the predecessor for adjudication of demand made from the predecessor.

Issue 1: Challenge to the Tribunal's Judgment
The Appellant Revenue contested the judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal dated 17 October 2014. The dispute arose when M/s. Akasha Syncotex Limited transferred its rights in a plot to the Respondent, who then applied for registration under Section 6 of the Central Excise Act. The Assistant Commissioner initially granted registration, but the Commissioner (Appeals) allowed the Revenue's appeal. The Appellate Tribunal later allowed the Respondent's appeal, leading to the Appellant's challenge.

Issue 2: Interpretation of Section 6 and Rule 9
The crux of the matter revolved around the interpretation of Section 6 of the Central Excise Act, 1944, and Rule 9 of the Central Excise Rules, 2002 concerning registration. The Appellant argued that the predecessor of the Respondent should have deregistered itself before the Respondent could be granted fresh registration. However, the Tribunal found that if the Respondent complied with all legal requirements, there was no hindrance to granting registration, irrespective of pending proceedings against the predecessor.

Issue 3: Validity of Fresh Registration
The Appellant contended that granting fresh registration to the Respondent, while the predecessor's registration was still valid, was erroneous. However, findings revealed that the predecessor had surrendered its registration certificate and transferred the plot to the Respondent before any demand was made. The Tribunal emphasized that the liability to pay dues could be enforced separately, even if registration was granted to the successor for the same premises.

Issue 4: Pending Proceedings Against Predecessor
The critical aspect considered was the pending proceedings against the predecessor for the demand made. Both the Assistant Commissioner and the Commissioner (Appeals) noted that the issue required further adjudication. The Tribunal emphasized that the Respondent's compliance with legal requirements for registration was distinct from the pending proceedings against the predecessor, which could continue independently for recovery of dues.

In conclusion, the High Court upheld the Tribunal's decision, emphasizing that the alleged liability of the predecessor did not affect the Respondent's eligibility for registration. The Court clarified that the State could pursue recovery proceedings independently, even after granting registration to the successor. The judgment dismissed the appeal, stating that no substantial question of law arose, and affirmed the Tribunal's decision in favor of the Respondent.