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of <h1>High Court dismisses interim injunction in excise duty dispute, emphasizes statutory provisions</h1> The Andhra Pradesh High Court dismissed the interim injunction granted under Order XXXIX Rule 1 C.P.C., vacating the injunction on excise duty payment ... Jurisdiction- The first respondent company herein purported to have entered into a Memorandum of Understanding with the second respondent herein to undertake commercial production of finished goods on conversion charges apart from supplying raw material and incurring the costs of production within the factory premises of second respondent herein. Issues:1. Granting of interim injunction under Order XXXIX Rule 1 C.P.C.2. Central Excise Duty determination and payment dispute.3. Proviso to Section 11 of the Central Excise Act, 1944 applicability.4. Ownership and attachment of excisable goods.5. Lessee's liability in case of ownership change.6. Availability of alternative remedies.7. Jurisdiction of the trial court.8. Dismissal of the injunction and appeal outcome.Issue 1: Granting of Interim Injunction:The Civil Miscellaneous Appeal challenged the order granting an interim injunction under Order XXXIX Rule 1 C.P.C. The appellant contested the injunction issued by the trial court, arguing that it was a misuse of jurisdiction to evade tax payment. The appellant claimed that the first respondent should have verified tax dues before entering into an agreement and that the court failed to consider the appellant's counter affidavit regarding the liability of the succeeding company to pay arrears.Issue 2: Central Excise Duty Dispute:The dispute revolved around the determination and payment of Central Excise Duty amounting to Rs. 53.00 lakhs by the second respondent company. The appellant contended that the Central Excise authorities had lawfully proceeded to recover the dues but were stalled by the injunction. The appellant highlighted the default in paying instalments leading to the detention of excisable goods by the competent authority.Issue 3: Applicability of Proviso to Section 11:The judgment discussed the Proviso to Section 11 of the Central Excise Act, 1944, emphasizing that excisable goods, materials, and machinery of a succeeding company may be attached for recovering dues from the predecessor. The court noted that the trial court overlooked this provision and failed to consider the liability of the succeeding company to pay arrears.Issue 4: Ownership and Attachment of Goods:The judgment analyzed the ownership and attachment of excisable goods, highlighting that the trial court's findings regarding ownership and attachment were devoid of merit. The court emphasized that all excisable goods of the succeeding company could be attached, as per the provisions of Section 11 of the Act.Issue 5: Lessee's Liability in Ownership Change:The court addressed the argument that the first respondent, even if considered a lessee, could still have excisable goods attached in case of a change in ownership. The judgment reiterated that the Department could attach goods in possession of the successor, irrespective of the lessee's status.Issue 6: Alternative Remedies and Jurisdiction:The judgment emphasized the availability of alternative remedies, such as filing an application before the appellate authority, for aggrieved parties. It criticized the trial court for overstepping its jurisdiction by granting an injunction on excise duty already determined by the competent authority.Issue 7: Dismissal of Injunction and Appeal Outcome:Ultimately, the court set aside the impugned order, dismissing the first respondent's application and vacating the injunction. The Civil Miscellaneous Appeal was allowed, with no costs imposed, concluding the legal dispute over the interim injunction and excise duty payment.This detailed analysis of the judgment from the Andhra Pradesh High Court highlights the intricate legal arguments and considerations surrounding the issues of interim injunction, excise duty determination, statutory provisions, ownership, attachment of goods, and jurisdiction of the trial court.
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