Bona fide transferee rights prevail where prior attachment and subsisting old registration do not bar Central Excise registration.

Central Excise registration cannot be refused to a bona fide purchaser of immovable property merely because the premises had earlier been attached for recovery of dues and the former occupant's registration had not been cancelled. The court held that the recovery provisions invoked against the defaulter did not apply to purchasers who had only acquired the property from a secured creditor and had not succeeded to the business. It also held that the attachment had no continuing practical effect after years of inaction and intervening third-party rights, and that the relevant transfer was a statutory sale rather than a private alienation by the defaulter. The registration application had to be considered in accordance with law.

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Issues: Whether registration under the Central Excise regime could be refused to the purchaser of an immovable property on the grounds that the property had earlier been attached for recovery of excise dues and that the erstwhile occupant's registration for the same premises had not been cancelled.

Analysis: The refusal was founded mainly on an attachment made under section 142(1)(c)(ii) of the Customs Act, 1962 read with the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995, and on the plea that the same premises could not be registered in the name of two persons. The Court held that the recovery provisions under section 11 of the Central Excise Act, 1944 were not attracted on the facts, because the petitioners had not succeeded to the defaulter's business or trade and had purchased only immovable property from a secured creditor. It further held that the attachment could not operate indefinitely and had lost practical efficacy when no further recovery step was taken for years after the attachment, especially after third-party rights had intervened. The Court also held that rule 9 of the 1995 Rules dealt with private alienation by the defaulter or its representative, whereas the transfer in favour of the petitioners was through a statutory sale by the secured creditor and was not a private transfer. On the registration issue, the Court accepted the view that section 6 of the Central Excise Act, 1944 and rule 9 of the Central Excise Rules, 2002 contemplate registration of the person, and absence of de-registration by the former occupant did not bar registration in favour of a bona fide transferee.

Conclusion: The refusal to grant Central Excise registration was invalid, and the petitioners were entitled to consideration of their registration application in accordance with law.

Ratio Decidendi: Central Excise registration cannot be refused to a bona fide transferee of immovable property merely because the premises were earlier attached for recovery of dues or because the previous occupant's registration remains subsisting, where the statutory recovery provisions do not apply to the transferee and no continuing lawful recovery action is shown.

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