Transferee liability for excise dues applies only on proof of business succession and within statutory recovery limits; no retrospective use.

A transferee of fixed assets and land cannot be made liable for a predecessor's excise dues, including interest and penalty, unless the statute authorises such recovery and there is proof that the transferee succeeded to the business of the defaulter. The recovery provision relied on applies only to specified movable assets in the successor's custody or possession and does not extend to immovable property such as land. It also cannot be applied retrospectively to a transaction completed on 19-04-2001 when the provision came into force only in 2004. On that basis, the demand was held unsustainable and the recovery order was set aside.

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Issues: Whether a purchaser of fixed assets and land could be made liable for the predecessor's excise dues, including interest and penalty, in the absence of proof that it had succeeded to the business and in the absence of attachment of property covered by the recovery provision; and whether the recovery provision inserted in 2004 could be applied to a transaction of 19-04-2001.

Analysis: The liability provision relied upon by the Revenue was analogous to the erstwhile recovery rule and was available only where the transferee had succeeded to the business of the defaulter. It also permitted attachment only of excisable goods, materials, plant, machinery and similar movables in the custody or possession of the successor, not immovable property such as land. The record did not show any valid attachment with the requisite sanction. The transaction in question had occurred on 19-04-2001, whereas the relevant statutory provision was brought into force only in 2004. The order below therefore fastened liability without first establishing succession to business and without a legally sustainable basis for retrospectively applying the later provision.

Conclusion: The appellant was not liable for the predecessor's arrears on the facts of the case, and the demand was unsustainable.

Final Conclusion: The appeal succeeded and the order demanding recovery from the appellant was set aside.

Ratio Decidendi: A transferee can be fastened with the predecessor's excise dues only when the statute so permits on proof of succession to the business and within the limits of the recovery provision, which cannot be applied retrospectively to a prior transaction.

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