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TMI Blog2017 (7) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... of a company incorporated under the provisions of the Companies Act, 1956 pursuant to a sale notice issued by a Bank acting under the provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. He submits that, the business of such company was not put up for sale. Only the assets were put up for sale. The first petitioner had purchased such assets from the Bank. He refers to the sale notice issued by the Bank. He refers to the various clauses of the sale notice, which stipulate that the sale was on as is where is and whatever there is basis. He submits that, there is no whisper in the sale notice that the business of the company was being sold. The first petitioner purchased the assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attachment and all consequent orders of attachment made therein should be quashed. The learned advocate appearing for the Department submits that the Bank was well aware of the dues of its borrower towards central excise. The Bank was informed from time to time by the authorities about such dues. The Bank ought not to have put up the property for sale without informing the Central Excise authorities. The first petitioner having purchased the property with the knowledge of default of the central excise, the first petitioner is liable to pay the same. I have considered the rival contentions of the parties and the materials made available on record. Central Excise authorities had various claims against one of its assessees. Such assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na Girders Ltd. (supra). It is of the view that, only when the purchaser purchases the entire business it is liable for central excise due. It is of the following view: "21. A harmonious reading of the judgments in Macson and SICOM would tend us to conclude that it is only in those cases where the buyer had purchased the entire unit i.e. the entire business itself, that he would be responsible to discharge the liability of Central Excise as well. Otherwise, the subsequent purchaser cannot 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 notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, these statutory liabilities would include excise dues. We find that the High Court has missed the true intent and purport of this clause. The expressions in the Sale Deed as well as in the Agreement for purchase of plant and machinery talks of statutory liabilities "arising out of the land" or statutory liabilities "arising out of the said properties" (i.e. machinery). Thus, it is only that statutory liabilities which arises out of the land and building or out of plant and machinery which is to be discharged by the purchaser. Excise dues are not the statutory liabilities which arise out of the said land and building or the plant and machinery. Statutory liabilities arising out of the land and building could be in the form of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructures of the defaulter unit and the third lot was a composite lot comprised of lot 1 and lot 2. It is, therefore, clear that it was the assets of the defaulter company that had been sold to the petitioner and that the erstwhile unit has not been sold as a going concern." Section 11 (E) of the Central Excise Act, 1944 is as follows: "SECTION 11E. Liability under Act to be first charge. - Notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of duty, penalty, interest, or any other sum payable by an assessee or any other person under this Act or the rules made thereunder shall, save as otherwise provided in section 529A of the Companies Act, 1956 (1 of 1956), the Recovery of Debts Due to Banks an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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