2018 (1) TMI 826 - HC - Central Excise

Attachment of immovable properties - creation of charge on such properties for the recovery of the dues of her husband - case of petitioner is that all the four properties proposed to be attached were purchased by her out of her own source of income and not acquired by her through inheritance from her late husband and the department therefore cannot attach such properties - duty demand against the petitioner wife of deceased assessee. Held that - if the petitioner is correct in contending that all the four immovable properties were purchased by her from her own source of income the department cannot carry out coercive recovery against such properties merely because her husband died leaving behind sizable departmental dues - The departmental authorities have not applied their minds to this aspect of the matter. It is not clear in what manner the petitioner has placed such certificate of the Chartered Accountant dated 10.06.2011 before the departmental authorities. To avoid any confusion we allow the petitioner to place the same before the Commissioner of Central Excise Vadodara alongwith representation pointing out the source of acquisition of such properties. Appeal allowed by way of remand.

Summary

Issues:
Challenge to attachment of immovable properties for recovery of dues of husband.

Analysis:
The petitioner challenged the attachment of her immovable properties by the respondents for the recovery of dues of her deceased husband. The husband was engaged in manufacturing and export of goods through proprietary concerns, facing allegations of unpaid excise duties and wrongly claimed export incentives. The Commissioner confirmed duty demands against the concerns and imposed penalties. The husband challenged the order before CESTAT, which confirmed duty demands but deleted the personal penalty. The Tribunal recognized the wife as the legal heir and confirmed duty demands against the husband only. The department sought to recover the dues from the wife's properties, leading to a legal dispute.

The Tribunal modified its order to confirm duty demands against the husband only, not the wife. The department communicated to the City Survey Superintendent to prevent transfer of the wife's properties for potential attachment. The wife contended that the properties were purchased from her own income and not inherited from her husband, challenging the department's right to attach them. Despite providing details of property acquisition, the department persisted with the attachment, leading to further legal proceedings and dismissal of appeals against the attachment.

The High Court analyzed the issues and clarified that recovery of unpaid dues from the deceased's properties is permissible, even in the hands of legal heirs who inherited them. However, recovery cannot be made from personal properties of legal heirs unrelated to the inheritance. The Court directed the Commissioner of Central Excise to examine the source of acquisition of the wife's properties and lift the attachment if acquired from her income. The Commissioner was instructed to pass a speaking order within four months, considering the Court's observations and the details provided by the petitioner.

In conclusion, the petition challenging the attachment of properties for recovery of dues was disposed of by the High Court, with a direction for the Commissioner to review the source of acquisition of the properties and lift the attachment if found unrelated to the deceased husband's dues.