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TMI Blog2014 (11) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... ter referred to as the Excise Act). 2. M/s. Century Iron and Steels Limited, defaulted in payment of loans to the Punjab Financial Corporation and the Punjab State Industrial Development Corporation. The plant and machinery were possessed, under Section 29 of the State Financial Corporation Act, 1951, and auctioned. The petitioner, admittedly, purchased land, building and machinery, from the Punjab Financial Corporation, in an auction that lead to execution of a sale agreement, dated 28-10-1994. The Central Excise Department served a notice, dated 9-3-1995, calling upon the petitioner to discharge the liabilities of M/s. Century Iron and Steels Limited arising from orders, relating to availment of Cenvat credit etc. The petitioner fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recovered by detaining goods, plant, and machinery till such time as duty is not paid or recovered. It is further submitted that Rule 230(2) of the Rules provides that where any such person transfers or otherwise disposes of his business in whole or in part, or effects any change in the ownership thereof, all excisable goods, material, preparations, plant, machinery, vessels, etc., in possession of the person or persons succeeding to the original owner, may also be detained. It is argued that in view of Rule 230(1) and (2) of the Central Excise Rules, the petitioner cannot be heard to urge that it is not liable to discharge the liability of M/s. Century Iron and Steels Limited and even otherwise as a mere show cause notice has been issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to M/s. Century Iron and Steels Limited has been purchased by the petitioner, free from all encumbrances but with liability to pay land revenue and general and local taxes or cesses for the time being imposed or assessed on the said property. The sale agreement does not require the petitioner to pay any amount that may have arisen from the business or manufacturing activities of M/s. Century Iron and Steels Limited. At this stage, it would be appropriate to point out that the petitioner has not purchased the "business" of M/s. Century Iron and Steels Limited. 8. The questions that arise for adjudication are whether the petitioner is liable to discharge liability of M/s. Century Iron and Steels Limited, under the Excise Act, and whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be fastened with the liability relating to the dues of the Government unless there is a specific provision in the Statute, claiming "first charge for the purchaser". As far as Central Excise Act is concerned, there was no such specific provision as noticed in SICOM as well. Proviso to Section 11 is now added by way of amendment in the Act only w.e.f. 10-9-2004. Therefore, we are eschewing our discussion regarding this proviso as that is not applicable in so far as present case is concerned. Accordingly, we thus, hold that in so far as legal position is concerned, UPFC being a secured creditor had priority over the excise dues. We further hold that since the appellant had not purchased the entire unit as a business, as per the statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant and machinery which is to be discharged by the purchaser. Excise dues are not the statutory liabilities which arise out of the land and building or the plant and machinery. Statutory liabilities arising out of the land and building could be in the form of the property tax or other types of cess relating to property etc. Likewise, statutory liability arising out of the plant and machinery could be the sales tax etc. payable on the said machinery. As far as dues of the Central Excise are concerned, they were not related to the said plant and machinery or the land and building and thus did not arise out of those properties. Dues of the Excise Department became payable on the manufacturing of excisable items by the erstwhile owner, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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