Section 22 protection does not cover post-registration excise duty collected from customers for the revenue.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar recovery of excise duty collected by a sick company from customers after registration of the reference with BIFR. The Court applied the distinction between ordinary dues of the company and amounts realised on behalf of the revenue, holding that post-registration excise collections were money belonging to the revenue and not assets protected by the statutory embargo. Recovery of the post-registration duty amount was therefore permitted, while the protection under section 22(1) was unavailable for that part of the demand.

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Issues: Whether section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 barred recovery of central excise duty collected by the company from its customers after registration of the reference with the Board for Industrial and Financial Reconstruction.

Analysis: Section 22(1) suspends coercive recovery proceedings against a sick industrial company during the pendency of an enquiry under section 16. However, the Court applied the distinction drawn in earlier Supreme Court authority between ordinary dues of the company and amounts collected from customers on behalf of the revenue. Excise duty realised after registration of the reference was treated as money belonging to the revenue and not as an asset of the sick company protected by section 22(1). The Court therefore held that the statutory embargo did not extend to such post-registration collections.

Conclusion: Protection under section 22(1) was unavailable to the petitioner in respect of excise duty collected after registration of the reference, and recovery of that amount was permitted.

Final Conclusion: The petition succeeded only to a limited extent, and the respondents were allowed to recover the post-registration excise duty amount, while the challenge was not accepted for that part of the demand.

Ratio Decidendi: Amounts collected by a sick industrial company from customers as excise duty after registration of the BIFR reference are held for the revenue and do not fall within the protection of section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

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