Auction purchaser of isolated assets not liable for predecessor's excise dues absent first charge or business transfer

An auction purchaser of isolated assets on an "as is where is" basis was not fastened with the predecessor's central excise dues under the proviso to Section 11 of the Central Excise Act, 1944. The sale terms were read to cover liabilities attached to the property itself, not excise dues arising from manufacture by the former owner. A subsequent purchaser is not liable for Government dues unless the statute creates a specific first charge or the entire business is acquired as a going concern. Because only land, building, plant and machinery were purchased, the erstwhile owner's excise liability could not be recovered from the purchaser, and the Revenue's challenge failed.

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Issues: Whether the purchaser of land, building, plant and machinery in an auction sale on an "as is where is" basis can be fastened with the predecessor's central excise dues under the proviso to Section 11 of the Central Excise Act, 1944.

Analysis: The sale documents and auction conditions made the properties available free from encumbrances, but the stipulation that statutory liabilities arising out of the land or the said properties would be borne by the purchaser was construed in context. The expression was held to cover liabilities attaching to the property itself, such as property-related levies or taxes on machinery, and not excise dues, which arise from manufacture by the erstwhile owner. The governing principle applied was that a subsequent purchaser is not liable for the Government's dues unless the statute creates a specific first charge or the purchaser has acquired the entire business as a going concern. As the purchaser had acquired only the land and plant and machinery, the predecessor's excise liability could not be transferred.

Conclusion: The purchaser was not liable for the erstwhile owner's central excise dues, and the Revenue's challenge failed.

Final Conclusion: The appeal was rejected because the auction purchaser did not take over the entire business and the statutory dues of the prior owner could not be recovered from it.

Ratio Decidendi: A purchaser of isolated assets in auction does not assume the predecessor's excise dues unless the statute creates a first charge or the entire business is purchased.

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