Excise liability does not transfer with asset-only auction purchase unless the business or a statutory first charge is acquired.

A purchaser who acquired only land, building and machinery from a financial corporation auction on an "as is where is" basis was not liable for the erstwhile owner's excise dues, because such dues arise from manufacture by the predecessor and do not attach to the assets alone. Liability could be fastened only if the entire business was purchased as a running concern or if the statute created a specific first charge on the assets. As the liability itself was not recoverable from the purchaser, the show cause notices issued to enforce it were unsustainable and were quashed.

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Issues: (i) Whether a purchaser of land, building and machinery from a financial corporation auction can be fastened with the excise liability of the erstwhile owner when the purchaser has not acquired the business as a running concern; (ii) Whether the show cause notices issued to recover such liability were liable to be quashed at the threshold.

Issue (i): Whether a purchaser of land, building and machinery from a financial corporation auction can be fastened with the excise liability of the erstwhile owner when the purchaser has not acquired the business as a running concern.

Analysis: The sale agreement showed that only the property was purchased on an "as is where is" basis and that the purchaser undertook liability only for taxes and cesses arising from the property itself. Excise dues arise from manufacture by the erstwhile owner and are not liabilities attached to the land, building or machinery. The governing precedent held that, absent purchase of the entire business or a specific statutory first charge, the subsequent purchaser cannot be made liable for the predecessor's excise dues.

Conclusion: The purchaser was not liable to discharge the excise liability of the erstwhile owner.

Issue (ii): Whether the show cause notices issued to recover such liability were liable to be quashed at the threshold.

Analysis: Once the liability itself was held not recoverable from the purchaser, requiring the petitioner to undergo adjudication on the notice would serve no useful purpose. The controversy stood concluded by the binding precedent and the notice could not survive.

Conclusion: The show cause notices were liable to be quashed.

Final Conclusion: The writ petition succeeded because excise dues of the former owner could not be recovered from a purchaser who had acquired only the assets and not the business, and the impugned notices were unsustainable.

Ratio Decidendi: A subsequent purchaser of land, building or machinery is not liable for the erstwhile owner's excise dues unless the entire business is purchased or the statute creates a specific first charge on the assets; liabilities arising from manufacture cannot be fastened on assets alone.

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