Excise recovery against auction purchaser upheld where statutory scheme allows dues to follow transferred business assets.

Excise recovery can extend to a purchaser who acquires a predecessor's assets through auction where the statutory scheme permits proceeding against successor-held assets after transfer or change in ownership. Section 11 of the Central Excise Act, 1944, as amended, and Rule 230(2) of the Central Excise Rules were treated as recovery provisions allowing enforcement against the assets in the successor's hands. An auction conducted by a secured creditor did not, by itself, exclude central excise dues because the auction terms did not expressly bar such liability. The recovery notices were upheld and the purchaser was held liable for the predecessor's excise dues.

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Issues: Whether the purchaser of assets sold by a financial corporation on auction was liable for the predecessor's central excise dues under Section 11 of the Central Excise Act, 1944.

Analysis: Section 11 of the Central Excise Act, 1944, as amended, permits recovery of excise dues and, where the person liable transfers or otherwise disposes of the business or effects a change in ownership, the attached assets of the successor may also be proceeded against. Rule 230(2) of the Central Excise Rules was treated as a mode of recovery that extends to the assets in the hands of a successor where the sale results in transfer of property by operation of the statutory scheme. The auction sale was not accepted as excluding central excise dues merely because the property was sold by a secured creditor under the State financial corporations law, and the terms of the auction did not exclude such dues.

Conclusion: The purchaser was liable to bear the predecessor's central excise dues, and the recovery notices were upheld.

Final Conclusion: The writ petition failed and the impugned demand notices were sustained, with costs imposed on the petitioner.

Ratio Decidendi: Where statutory provisions governing excise recovery so provide, excise dues can be recovered from a successor who acquires the predecessor's assets through an auction sale, even when the sale is conducted by a secured creditor, unless the governing terms or statute expressly exclude such liability.

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