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TMI Blog2016 (4) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise authorities, do not have any authority in law to direct the fourth respondent GIDC not to register the transfer of change of ownership without obtaining an NOC from the Central Excise authorities. Consequently, the impugned letter dated 20.5.2014 issued by the Superintendent of Central Excise, Range III, Division V, Surat -I to Regional Manager, GIDC requesting him not to change the ownership of the said premises, that is, Plot No.821 Road No.8, GIDC Sachin, Surat, in any other name unless "No Objection Certificate" is issued by that office so as to enable that office to recover huge Government dues outstanding against M/s. Mahalaxmi Processors, cannot be sustained. Insofar as the challenge to the notice dated 11.12.2013 is concerned, the same is addressed to M/s. Mahalaxmi Processors and does not in any manner prejudice the case of the petitioner. Under the circumstances, as rightly submitted by the learned counsel for the respondents, the petitioner has no locus standi to challenge the same. In the light of the above discussion, the petition succeeds and is, accordingly, allowed in the following terms as the impugned communication dated 20.5.2014 addressed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elram Thakordas Arora for allotment of Plot No.821 in the Sachin Industrial Area consisting of Revenue Survey No.299 within the village limits of Talangpore, Taluka Choryasi, District Surat admeasuring 4816 square metres, the Gujarat Industrial Development Corporation (GIDC) executed a registered lease deed in his favour for a period of ninety nine years commencing from 5.4.1988 till 4.4.2087, which was duly registered with the office of the Sub-Registrar of Assurances, Surat at Serial No.4748. On 1.8.2007, a registered deed of assignment came to be executed between Tehelram Thakordas Arora and the petitioner company (through one of its Directors Mr. Arun Gupta) for transfer and assignment of the leasehold rights in the lease deed dated 29.6.1990 subject to the terms and conditions mentioned therein. The said deed of assignment came to be duly registered at Serial No.15519 with the Sub- Registrar of Assurances. 3.1 Pursuant to an application made by Tehelram Thakordas Arora seeking transfer of plot No.821 in favour of the petitioner company, the competent authority of the GIDC (the fourth respondent herein) by an order dated 13.2.2013 granted such permission. It is the case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 11.12.2013 has also been issued against the said manufacturer viz., M/s. Mahalaxmi Processors under the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 and that vide letter dated 20.5.2014, the Superintendent of Central Excise, Surat had requested the Regional Manager, GIDC not to change the ownership of the said premises in any other name unless a No Objection Certificate is issued by the said office. Since the GIDC was not ready and willing to make any entry in the record in respect of change of ownership by way of change of Directors of the petitioner company and change of business of the petitioner company till NOC is issued by the Central Excise Department and on the other hand, the respondents No.2 and 3 have refused to either grant the application for issuance of NOC and/or reject the said application, the petitioner has filed the present petition. 4. Mr. Devan Parikh, senior advocate, learned counsel with Mr. S. N. Thakkar, learned advocate for the petitioner, invited the attention of the court to the notice of demand to defaulter dated 11.12.2013 to point out that the said notice has been issued in respect of dues which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Mahalaxmi Processors. Besides, the proviso to section 11 of the Act envisages transfer of business of the trader either in whole or in part, whereas it is not the case of the respondents that the petitioner has purchased the business as a going concern from M/s Mahalaxmi Processors. It was submitted that under the circumstances, the liabilities of M/s. Mahalaxmi Processors cannot be foisted upon the petitioner. 4.3 Reference was made to the provisions of section 11E of the Act which provides for creating a first charge on the property of an assessee or person in respect of any amount of duty, penalty, interest, or any other sum payable by the assessee or other person. Reliance was also placed upon the decision of this court in Bhavani Corporation v. Assistant Commissioner, Central Excise Division II, 2014 SCC OnLine Guj 11591, for the proposition that if as on the date when section 11E of the Act was brought on the statute book, the subject property was no longer of the ownership of the defaulting assessee, the question of creating the first charge on such property would not arise. It was submitted that section 11E of the Central Excise Act was brought on the statute book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was submitted that M/s. Mahalaxmi Processors carried on activities on the subject plot and did not comply with the export obligations and huge recoveries, as referred hereinabove, are due from it. It was submitted that the respondents are, therefore, justified in calling upon the GIDC not to grant permission to transfer the said plot on which M/s. Mahalaxmi Processors had carried on activities and GIDC has rightly not granted the permission to change the leasehold rights in respect of the subject land. It was, accordingly, urged that the petition being devoid of merits deserves to be dismissed. 6. A perusal of the record of the case reveals that a lease deed dated 29.6.1990 came to be executed by GIDC in favour of one Shri Tehelram Thakordas Arora in respect of plot No.821 at Sachin Industrial Area. Subsequently, by a Deed of Assignment dated 1.8.2007 Shri Tehelram Thakordas Arora transferred the plot in question in favour of the petitioner Prakhar Estates Private Limited. Subsequent thereto, GIDC granted permission to Shri Tehelram Thakordas Arora to transfer the property in question in favour of the petitioner. Thus, the property stood transferred in favour of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssors is concerned, nothing has been brought on record by the respondents to establish that M/s. Mahalaxmi Processors had any right, title or interest in the plot in question. 10. Section 11 of the Central Excise Act, 1944 on the basis of which the respondents seek to enforce a condition for obtaining NOC from the Department prior to transfer of ownership of the subject plot provides for Recovery of sums due to Government and reads thus: 11. Recovery of sums due to Government.- (1) 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 11-D, 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 or require any other Central Excise Officer or a proper officer referred to in Section 142 of the Customs Act, 1962 (52 of 1962) to deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary; (iii) in a case where the person to whom a notice under this sub-section has been issued, fails to make the payment in pursuance thereof to the Central Government, he shall be deemed to be a person from whom duty and any other sums of any kind payable to the Central Government under any of the provisions of this Act or the rules made thereunder have become due, in respect of the amount specified in the notice and all the consequences under this Act shall follow. 11. Sub-section (1) of section 11 of the Act envisages attachment and sale of excisable goods belonging to a person from whom any duty or other sums of any kind payable to the Central Government under any of the provisions of the Act or the rules made thereunder. In case such amount is not recoverable in the above manner the subsection further provides for issuance of a certificate and sending the same to the Collector to recover such amount as an arrear of land revenue. The proviso thereto provides for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year 2013, after a considerable delay, which by no stretch of imagination can be said to be a reasonable time. Therefore, the impugned action of the respondents is also barred by limitation. Moreover, on a perusal of the notice dated 11.12.2013 it appears that a huge demand of ₹ 1,87,05,178/- has arisen on 25.2.2008, which is subsequent to the date of transfer of the subject plot in favour of the petitioner. It cannot be gainsaid that when the subject plot stood transferred in favour of the petitioner in August 2007, subsequent dues of M/s. Mahalaxmi Processors cannot be sought to be recovered from the petitioner, more particularly, when none of the requirements of section 11 of the Central Excise Act are satisfied in the present case. Also as rightly submitted by the learned counsel for the petitioner, section 11E of the Act was brought on the statute book long after the subject plot stood vested in the petitioner and hence, would have no applicability to the facts of the present case. Considering the case from any angle, the respondent Central Excise authorities, do not have any authority in law to direct the fourth respondent GIDC not to register the transfer of chang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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