Priority of statutory excise dues prevails over a secured creditor bank's security interest after adjudication.

Statutory excise dues were treated as having priority over a secured creditor bank's claim where Section 142 of the Customs and Central Excise Act and Supreme Court authority on precedence of statutory dues were applied. On that basis, the departmental claim was held to prevail against the bank's security interest, with payment to follow adjudication of the excise liability. The note reflects that recovery of excise dues can override a secured creditor's enforcement claim when the statutory dues have been duly adjudicated.

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Issues: Whether the Central Excise Department had precedence over the secured creditor bank in recovery of excise dues.

Analysis: The Court relied on Section 142 of the Customs and Central Excise Act and the Supreme Court decisions recognising the priority of statutory dues over claims of secured creditors. On that basis, it held that the departmental claim for excise dues would prevail against the bank's security interest, and that payment would follow adjudication of the dues.

Conclusion: The issue was decided in favour of the Revenue, and the bank was directed to satisfy the excise dues after adjudication.

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