Pre-appointed-date excise liabilities stay with the former owner and cannot be enforced against a nationalised textile unit.

Excise duty arrears for the period before the appointed date under the Sick Textile Undertakings (Nationalisation) Act, 1974 remain liabilities of the former owner and do not transfer to the Central Government, the National Textile Corporation, or a nationalised unit. The Act provides a separate claims process before the Commissioner of Payments under Sections 17 and 20, with payment priorities under Section 21, and its overriding effect under Section 29 does not alter the plain language of Section 5. On that basis, pre-appointed-date liabilities are not enforceable against the successor undertaking.

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Issues: Whether excise duty arrears relating to the period prior to the appointed date under the Sick Textile Undertakings (Nationalisation) Act, 1974 could be enforced against the petitioner, a unit of the National Textile Corporation.

Analysis: Section 5 of the Sick Textile Undertakings (Nationalisation) Act, 1974 makes every liability of the owner in respect of any period prior to the appointed date enforceable against the owner and not against the Central Government or the National Textile Corporation. The Act also provides a complete mechanism under Sections 17 and 20 for filing and adjudication of claims before the Commissioner of Payments, with priorities regulated by Section 21. Section 29 gives the Act overriding effect over other laws. On the plain and unambiguous language of Section 5, liabilities existing before the appointed date do not shift to the nationalised undertaking or its successor entity.

Conclusion: The excise duty demand for the pre-appointed-date period was not enforceable against the petitioner and was liable to be quashed.

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