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TMI Blog2013 (8) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... d in said business - In the facts and circumstances of this case, M/s. Sachin Dyeing & Printing Mills Pvt. Ltd. are not successors in business or trade of Vaishnavi relying upon the decision in the case of Krishna Lifestyle Technologies Ltd.[ 2008 (2) TMI 2 - HIGH COURT, BOMBAY]. The facts of the present case is clearly distinguishable from the facts of the case Rana Girders Ltd. [2012 (11) TMI 478 - ALLAHABAD HIGH COURT], wherein there was a clear and unequivocal stipulation; in the deed of sale and in the agreement of sale of plant & machinery; that all statutory liabilities arising out of said property (land & building) shall be borne by purchaser and that the corporation shall not be held responsible for the same and have held that central excise dues and penalties are statutory liabilities and hence M/s. Rana Girders Ltd. are liable to pay the said statutory dies as they have agreed for discharge of all statutory liabilities. In the case in hand, agreement does not talk about any statutory liabilities that may be undertaken to be paid by the appellant M/s. Sachin Dyeing & Printing Mills Pvt. Ltd. The facts of the case in hand are totally different - Hon’ble High Court of Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tachment and sale of movable/immovable property. It is the submission that the said recovery provisions cannot apply to the appellant as department has never claimed first charge on the said property and GIICL was having first charge on the said property. It is the submission that confirmed dues of Vaishnavi were not recoverable from the appellant as has been held by the apex court in the case of SICOM Ltd. 2009 (233) ELT 433 (S.C.). It is the submission that the show cause notice which was issued to the appellant (dated 16.02.06) has alleged the appellant as successor of Vaishnavi who are alleged as predecessor in the cause title of the show cause notice. It is the submission that appellant cannot be considered as successor as neither the business or trade of Vaishnavi is transferred to the appellant hence conditions of proviso to Section 11 of the Central Excise Act will not apply and are not sustainable. It is the submission that the appellant have not purchased the property from M/s. Vaishnavi directly but have purchased the same from GIICL as per the sale deed executed on 09.01.04. It is the submission that the Hon ble High Court of Madras in the case of Sri Jayajothi Co. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of as is whereas basis and also that there is no dispute as to the fact that Vaishnavi had outstanding central excise duties payable to the department which has attained finality. It is his submission that the GIICL has transferred the property encumbrances, which is ascertainable from clauses 6 7 of the sale deed, which talks about settlement of claims/liabilities of the government by the purchaser. It is his submission that on a similar situation, Hon ble High Court of Allahabad in the case of Rana Girders Ltd. 2012 (281) ELT 700 (All.) has held that excise duty was recoverable from the purchaser as it is on manufacture and not on sale. He would also rely upon the decision of the Apex court in the case of Macson Marbles Pvt. Ltd. Vs. UOI 2003 (158) ELT 424 (S.C.) for the proposition that liability to pay excise duty is on the unit which is purchased the same even if it is in auction proceedings. 5. I have considered the submissions made at length by both sides and perused the records. 6. The issue involved in this case is whether under the facts and circumstances (as has been reproduced by me in paragraph No.2) central excise duty of defaulting company i.e. Vaishnavi can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business as per the proviso to Section 11 of Central Excise Act, 1944. In order to appreciate whether the appellant is a successor or otherwise, it is necessary to consider the provisions of Section 11 which are: SECTION 11.Recovery of sums due to Government. In respect of duty and any other sums of any kind payable to the Central Government under any of the provisions of this Act or of the rules made thereunder including the amount required to be paid to the credit of the Central Government under Section 11D, the officer empowered by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) to levy such duty or require the payment of such sums may deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control, or may recover the amount by attachment and sale of excisable goods belonging to such person; and if the amount payable is not so recovered, he may prepare a certificate signed by him specifying the amount due from the person liable to pay the same and send it to the Collector of the district in which such person re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page 459 considering Section 2(13) of the Income Tax Act, the learned authors have in the context of the expression business noted that the definition is wide, but underlying each of them is the fundamental idea of the continuous exercise of an activity. It connotes some real, substantive and with a set purpose. There is something organic about the whole which does not exist in its separate parts. Business may include activity of taking a market place or godowns. The proviso to Section 11 of the Central Excise Act not only speaks of transfer of business or trade, but uses the expression in whole or in part. In other words, there need not be transfer of the whole of the ownership of business. It is sufficient if there is transfer or disposal of part of the business or any change in the ownership. The consequences must be that the person who purchases must succeed in such business or trade from the reason who was carrying on the business or trade. Would the ratio in Shreyas Papers Pvt. Ltd. (supra) conclude the issues as to the expression transfer or disposal of business in whole or in part Shreyas Papers Pvt. Ltd. (supra), has laid down the law in so far as Section 11 is concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run a part of the business transferred but to enable the transferee to run the business unhampered by the load of debts or for any other appropriate collateral purpose cannot detract from the totality of succession. It would thus appear that whether there is whole or part transfer of business and succession thereto what has to be established is that identity and continuity of the business so transferred is preserved. The High Court of Rangoon in Commissioner of Income Tax v. N.N. Firm (1934) 2 ITR 85 (Rangoon) was again considering the expression Business. It held there where a business is split up and thereafter another person carries on part of the business he does not succeed his predecessor in carrying on the business. Considering the language of our statute, in our opinion, that really would not apply. In Industrial Development Investments Co. Ltd. v. Commissioner of Excess Profits Tax [(1957) 31 ITR 688 (Bom.)], this Court was considering as to what would constitute a succession to a business. The Court speaking through Chagla, C.J. observed that whether there is a succession to a business, two factors have got to be considered. One obviously is the identity of the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as to whether there has been transfer of the whole of the business or part of the business and succession to the original business by the transferee. 17. Our attention was also invited to the judgment in Municipal Corporation of Delhi v. Gurnam Kaur [(1989) 1 SCC 101] as to what can be said to be a binding precedent. The Court noted that Quotability as to law applies to the case, its ratio the only thing binding on an authority is the principle upon which the case was decided. Statements which are not part of the ratio decidendi are distinguished as obiter dicta and are not authoritative. The Court also quoted with approval, P. J. Fitzgerald, 12th edition as to the concept of sub silentio which reads thus :- A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind. The court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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