Excise dues recovery cannot be fastened on an asset purchaser without a valid recovery provision in force at purchase.

Recovery of a predecessor unit's central excise dues from a purchaser of land, factory, plant and machinery was held impermissible where Rule 230 of the Central Excise Rules, 1944 had already been omitted before the purchase and the later proviso to Section 11 of the Central Excise Act, 1944 was not yet in force. Section 38A could not revive a lapsed recovery mechanism or fasten liability on a buyer who was not the successor in business of the defaulting unit. The result was that the purchaser could not be burdened with the former owner's dues, and the Revenue's challenge failed.

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Issues: Whether the Central Excise Department could recover the predecessor unit's dues from the respondent who had purchased the land, factory, plant and machinery after omission of Rule 230 of the Central Excise Rules, 1944.

Analysis: The respondent purchased the unit from the financial corporation after Rule 230 had already been omitted, and the later proviso to Section 11 of the Central Excise Act, 1944 came into force only in 2004. Section 38A of the Central Excise Act, 1944 could not be used to revive a lapsed recovery mechanism against a purchaser who was not the successor in business of the defaulting unit. The precedents relied upon by the Commissioner (Appeals) supported the view that a buyer cannot be fastened with the previous owner's excise dues when the relevant recovery provision was not in force on the date of purchase.

Conclusion: The recovery of the predecessor's excise dues from the respondent was impermissible, and the Revenue's appeal failed.

Ratio Decidendi: A purchaser of assets is not liable for the predecessor's excise dues unless a valid recovery provision existed at the time of purchase and is legally applicable to the purchaser's transaction.

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