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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 ..... ility to pay excise duty can be recovered from plant, machinery and building, cannot be accepted in view of the binding opinion recorded by the Hon’ble Supreme Court, in Rana Girders Ltd. [2013 (8) TMI 540 - SUPREME COURT]. Whether the show cause notice should be quashed - Held that:- As a general rule, a party is relegated to seeking adjudication of the show cause notice but as controversy in the present petition is squarely covered in favour of the petitioner, by judgment of the Hon’ble Supreme Court in M/s. Rana Girders Ltd. v. Union of India and others [2013 (8) TMI 540 - SUPREME COURT], relegating the petitioner to seeking adjudication of the show cause notice would be an empty formality - Decided in favour of assessee. - Civil Wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is before us challenging the show cause notice. 3. Counsel for the petitioner submits that the petitioner has not purchased a running concern much less the business of M/s. Century Iron and Steels Limited but has only purchased land, plant and machinery. The Hon ble Supreme Court, has held while considering a similar dispute in M/s. Rana Girders Ltd. v. Union of India and Others [2013 (11) SC 226 = 2013 (295) E.L.T. 12 (S.C.)] that a purchaser is not liable to pay excise duty payable by the original owner as the liability to discharge amounts payable under the Excise Act, arise from manufacture of goods and not from the assets purchased by subsequent buyer, it is further submitted that clauses in the sale agreement require the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Union of India and Others and Rule 230 of the Central Excise Rules, 1944. 6. Admittedly, land and machinery belonging to M/s. Century Iron and Steels Limited was possessed by the Punjab Financial Corporation and Punjab State Industrial Development Corporation for default in payment of loans. The land and machinery was sold and purchased by the petitioner on the basis of sale agreement dated 28-10-1994. Clauses 3, 5(ii) and (iii) of the sale agreement read as follows :- 3. The purchaser acknowledges having taken over the possession of the said property consisting of land, building and machinery as mentioned in the Schedule A B hereto on As is where is basis which is free from all encumbrances. 5. The purchaser further co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, building and machinery from a State Financial Corporation Act can be held liable to pay excise duly payable by the original owner. The dispute in the present case is identical. After considering the sale agreement, provisions of Section 29 of the State Financial Corporation Act and relevant provisions of the Central Excise Act and Rules framed, thereunder, the Hon ble Supreme Court, has held that liability to pay excise duty arises from manufacturing of excisable items but as dues under the Excise Act relate to items manufactured and not to land, plant and machinery, these amounts cannot be recovered from the purchaser. The Hon ble Supreme Court has also held that liability can only be fastened upon a buyer who has purchased the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which appellant is held to be liable to pay the dues. These clauses have already been incorporated in the earlier portion of our judgment. 23. We may notice that in the first instance it was mentioned not only in the public notice but there is a specific clause inserted in the Sale Deed/Agreement as well, to the effect that the properties in question are being sold free from all encumbrances. At the same time, there is also a stipulation that all these statutory liabilities arising out of the land shall be borne by purchaser in the sale deed and all these statutory liabilities arising out of the said properties shall be borne by the vendee and vendor shall not be held responsible in the Agreement of Sale. As per the High Court, thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio of the aforesaid judgment. The petitioner purchased land and building and not the business of the owner. The clause in the agreement requires the petitioner to discharge statutory liabilities arising out of land and building. The petitioner, therefore, cannot be called upon to discharge liability of the original owner under the Central Excises and Salt Act, 1944. An argument raised by counsel for the Revenue that in view of Rule 230(1) and (2) of the Central Excise Rules, liability to pay excise duty can be recovered from plant, machinery and building, cannot be accepted in view of the binding opinion recorded by the Hon ble Supreme Court, in the aforesaid judgment. 11. The second question is whether the show cause notice should be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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