Share purchase and change in control do not transfer ownership of the undertaking, leaving excise duty liability intact.

Purchase of shares giving control of management does not, by itself, transfer ownership of a company's undertaking or mill. The agreement and surrounding facts showed a change in management rather than a sale of the undertaking or its assets, and the company continued as a separate legal entity from its shareholders. Because the transaction also allocated undisclosed liabilities and required payment of outstanding statutory dues, the central excise duty confirmed for goods manufactured before the change in control could still be fastened on the purchaser. The contention that the purchaser became the new owner and escaped liability was rejected.

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Issues: Whether the appellant, having acquired control through purchase of shares, could be treated as the new owner of the mill so as to escape liability for the central excise duty confirmed in respect of goods manufactured before the change in control.

Analysis: The agreement dated 23-7-1979 and the surrounding facts showed that the transaction was a transfer of shares and a change in management, not a sale of the company's undertaking or its assets. The company retained its separate corporate identity from its shareholders. The terms of the agreement also allocated responsibility for undisclosed liabilities and required the purchaser to arrange payment of outstanding statutory dues. On that basis, the adjudicating authority correctly concluded that the change did not amount to a transfer of ownership of the mill itself and that the duty liability could still be fastened on the appellant.

Conclusion: The issue was answered against the appellant. The appellant was held liable for the duty demand, and its contention that it had become the new owner of the company was rejected.

Ratio Decidendi: Purchase of shares resulting in control of management does not, by itself, amount to sale of the company or transfer of ownership of the undertaking; the company remains a separate legal entity and duty liability may continue accordingly.

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