Successor liability for excise dues upheld where business transfer included assets, registrations and liabilities; demand also within time.

Where a business is transferred as a going concern with assets, goodwill, licences, registrations and liabilities, excise dues of the predecessor may be recovered from the successor under the statutory recovery provision. On the facts, the transfer documents did not exclude excise liability and the earlier registrations and licences stood transferred to the successor, so recovery against the successor was upheld. The cited contrary precedent was distinguished because it involved a separate independent registration. The demand was also held to be within limitation in the context of clandestine removal, and the recovery order was sustained.

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Issues: Whether the successor company could be proceeded against for central excise duty and other recoverable dues arising from the predecessor concern after transfer of the business, registrations and liabilities, and whether the demand was barred by limitation.

Analysis: The agreements placed on record showed that the partnership concern and thereafter the company took over the business as a going concern together with assets, goodwill, licences, registrations and liabilities. The statutory proviso to Section 11(2) of the Central Excise Act, 1944 permits recovery of duty and other sums from the successor where the predecessor transfers or otherwise disposes of the business or changes ownership, and the attached assets of the successor may be used for recovery. On the facts, the transfer documents did not create any exclusion of excise liabilities, and the earlier registrations and licences stood transferred to the appellant. The reliance on the cited High Court decision was rejected because the factual position there involved a separate independent registration, unlike the present case. The demand was also held to be within time in the context of clandestine removal.

Conclusion: The successor was liable for the predecessor's excise dues and the demand was not time-barred.

Final Conclusion: The appeal failed on merits and the order confirming recovery against the appellant was sustained.

Ratio Decidendi: Where a business is transferred together with its assets, registrations and liabilities, excise dues recoverable from the predecessor can be recovered from the successor under the statutory recovery provision.

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