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TMI Blog2016 (7) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... ced by the company, they had to sell the factory on outright sale during March 2006 to clear the loans payable to various institutions. It is submitted that the impugned proceedings is in violation of principles of natural justice, as no notice of proceedings was issued to the petitioner prior to serving impugned notice of attachment. Held that:- in the absence of any specific provision under the Customs Act for recovery of the dues of the company from the Directors in their personal capacity, the impugned notice of attachment should be held to be bad in law. Therefore, the respondents having admitted that the dues are payable by the company, then it goes without saying that the recovery could be made only against the company and not aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany imported the capital goods by availing the exemption on the condition to fulfil the export obligation within the time prescribed by the Licensing Authority. A bond was executed by the first petitioner in the capacity of Managing Director of the company undertaking to fulfil the export obligation as per the exemption notification. Consequent upon the failure to fulfil the export obligation, show cause notice dated 08.01.1998 was issued to which there was no response and ultimately, an order was passed by the adjudicating authority, dated 07.03.2011. The amount ordered to be paid under the said order, is now sought to be recovered as Government dues by attaching and bringing for sale, the properties owned by the petitioners. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e followed, which includes issuance of notice in terms of Rule 4, which has not been complied with. Further, it is submitted the bond which has been referred to by the Department, has been signed by the first petitioner in the capacity of Managing Director of the company and the respondents cannot proceed against the petitioners' personal capacity for the alleged dues payable by the company. Further, an affidavit has been sworn to by the first respondent, dated 27.11.2015, stating that the company has not been wound up till date, though the factory and building were sold and the entire sale proceeds have been utilised to clear the outstanding dues of the company including the statutory dues and the dues to the employees. Further, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction and barred by time limit are legally incorrect. It is further submitted that the respondents are acting within the purview of Section 140 of the Customs Act, which deals with 'Offences by companies' and every Director is liable for the offence committed by the company and in the present case, the bond executed by the company for the EPCG licence, is binding on the petitioners. In support of his contention, the learned counsel appearing for the respondents referred to the decision in the case of Textoplast Industries vs. Additional Commissioner of Customs reported in 2011 (272) ELT 513 (Bom). 7. Admittedly, the property which is subject matter of the impugned notice of attachment, is a personal property of the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cases of the Vandana Bidyut Chaterjee vs. UOI Ors., (supra), and Anita Grover vs. Commissioner of Central Excise Ors., (supra). Defaulter as defined under Rule 2(6) of the said Rules means any person from whom Government dues are recoverable under the Act. Therefore, recovery can be made only against the defaulter by following the procedure under the Rules. 9. Admittedly, the defaulter in the instant case is the company. Being conscious of this fact in the counter affidavit, the second respondent refers to the petitioners, as the petitioners-importers. It has to be clarified at this juncture, the importer is the company and the first petitioner was its Managing Director. Therefore, it would not make the petitioners as importers in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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