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TMI Blog1994 (3) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... any proceedings for recovering the same during the operation of the scheme framed by the Board for Industrial and Financial Reconstruction (hereinafter referred to as B.I.F.R.) in case No. 16/90, dated 3-6-1993 and to pass such orders as are deemed necessary in the facts and circumstances of the case. It manufactures sodium bi-chromate, yellow sodium sulphate and basic chromate sulphate. These chemicals are used in the manufacture of paper, paints and in leather tanning. The petitioner has been declared as a sick industry by the B.I.F.R. on 12-2-1991 under Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to as the Act). It made a representation on 1-9-1992 before the Assistant Collector of Central Excise for grant of excise loan. That application was forwarded to the Collector by the Assistant Collector on 23-9-1992. On 3-6-1993, the B.I.F.R. in Case No. 16/90 passed an order framing a scheme for the petitioner company. Pursuant to that, on 27-10-1993, the petitioner company addressed another letter to the 3rd respondent, Assistant Collector of Central Excise, seeking permission to remove the goods, without payment of central ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, until the excise duty leviable thereon has been paid at such place and in such manner as is prescribed in the Rules or as the Collector may require and except on presentation of an application in the proper form and on obtaining the permission of the proper officer on the form. Of course, the proviso to sub-rule (1) of Rule 9 empowers the Central Government by Notification to enable the goods, subject to excise duty, to be removed without payment or on part payment of the duty leviable thereon under Rule 49. There is no Notification issued by the Central Government enabling removal of the goods without payment or part payment of duty leviable. Rule 49 of the Rules deals with duty chargeable only on removal of goods from the factory premises or from an aproved place of storage. Sub-rule (1) of Rule 49 provides that payment of duty shall not be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from a store-room or other place of storage approved by the Collector under Rule 47. It may be relevant to notice that Rule 9 of the Rules provides for removal of goods fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to pay anything. 6.1 The words "or the like", "execution" and "distress" occuring in Section 22(1) of the Act have been considered by the Supreme Court in Maharashtra Tubes Ltd. v. State Industrial Investment Corporation of Maharashtra Ltd. and Another [1993 (2) SCC 144]. That was a case, in which in respect of a sick industry, a proceeding under Sections 29 and 31 of the State Financial Corporations Act, 1951 during the pendency of an inquiry under Section 16 of the Act, was taken out. Such a proceeding was held to have been covered by Section 22(1) of the Act. While considering the question as to whether the proceedings under Section 29 of the State Financial Corporations Act, 1951 fell within the mischief of Section 22(1) of the Act, the Supreme Court considered the scope of Section 22(1). The relevant portions of the judgment are as follows :- "Section 22(1) shorn of the irrelevant part provides that where an appeal under Section 25 relating to an industrial company is pending, then, notwithstanding anything contained in any other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1951 Act while proceedings under Sections 15 to 19 of the 1985 Act are pending it will render the entire process nugatory. In such a situation, the law merely expects the corporation and for that matter any other creditor to obtain the consent of the BIFR or, as the case may be, the appellate authority to proceed against the industrial concern. The law has not left them without a remedy. We are, therefore, of the opinion that the word `proceedings' in Section 22(1) cannot be given a narrow or restricted meaning to limit the same to legal proceedings. Such a narrow meaning would run counter to the scheme of the law and frustrate the very object and purpose of Section 22(1) of the 1985 Act." (emphasis supplied) 7. In the other decision in Gram Panchayat v. Shree Vallabh Glass Works Ltd. (AIR 1990 S.C. 1017), the question considered was as to whether the Panchayat could recover the amount due to it from out of the properties of the sick industrial company, without the consent of the Board. It has been held that without the consent of the B.I.F.R., the arrears due to the Panchayat cannot be recovered. The relevant portion of the judgment is as follows :- "Section 22(1) provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers it. As such we do not see any justification for the petitioner company to claim that the requirement as to complying with the provisions of Sec. 3 of the Central Excises and Salt Act, 1944 and the Rules framed thereunder would amount to distress or of like nature. On the contrary, it is a part of the sale transaction of the petitioner company, and in the course of that transaction, it recovers the excise duty payable. Hence, we are of the view that in the light of the interpretation placed on Section 22(1) of the Act in the aforesaid two decisions of the Supreme Court and in view of the facts and circumstances of the case, it is not possible to hold that the demand for payment of excise duty for removing the goods for despatch to the purchaser amounts to distress or the like. Consequently, Section 22(1) of the Act is not attracted. As held in Gram Panchayat's case (AIR 1990 SC 1017), certain proceedings against sick industrial company are presumed to be suspended such as (i) winding up of the industrial company, (ii) proceedings for execution, distress or the like against the properties of sick industrial company and (iii) proceedings for appointment of Receiver and proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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