TaxTMI 
TaxTMI 
1991 (4) TMI 272
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....aforesaid Textile Undertakings were functioning as independent units under their own management, and during that period, they had became entitled to get certain refund, which was later worked out at Rs. 85,071.83 and were also held liable to pay the excise dues of Rs. 1,91,381.80 for which the demand was raised and confirmed. Both the undertakings, however, subsequent to such entitlement for the refund and liability to pay the excise dues, were however, taken over by the Central Government, under the provisions of Textile Undertaking (Taking Over of Management) Act, 1983 (hereinafter referred to as "The Take Over Act, 1983) and were given over to the present appellants, for due management of the same, with effect from the appointed day. The refund amount, as indicated above, though had became due and payable prior to taking over of the same, was actually sanctioned subsequent to their being taken over by the appellant. While sanctioning the refund, the Assistant Collector, in exercise of his powers under Section 11 of the Central Excises and Salt Act, 1944, however, adjusted the said amount against the confirmed demands against the said Undertakings. The appellants objected to such....
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....stments, which the provisions of Section 11 of CESA, 1944, has expressly permitted. He also referred to and relied upon the order of the Single Member of this Tribunal No. 2196-2198 of 1990 dated 24-12-1990, where such adjustment is held as permissible, on the ground that both the debt and dues being for the period prior to taking over of the units, were permissible. 5. With no dispute as to the factual position that both the refund and the demand relate to the period prior to the taking over of these units by the appellants, the short question that arises for our determination is whether the statutory provisions of Take Over Act, 1983, provides for investing the right to recover the dues to the taken over unit, in the appellant, with no corresponding liability to pay the debts of such units and if yes, whether those provisions could affect the statutory provisions of Section 11 of the CESA, 1944. 6. Examining first the issue relating to the over-riding effect of the Take Over Act, 1983, over the provisions of CESA, 1944, both the Acts are Central Legislation, CESA, 1944, being a general law applicable to all the manufacturers, whereas the Take Over Act, 1983 provid....
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....aid provisions read conjointly with the provisions of sub-section (1) also reproduced above, have acquired statutory right to receive all the dues to the said undertaking, even when they have accrued to such undertakings before the taking over by the appellants, but had remained unpaid till the appointed day. Simultaneously examining the provisions of sub-section (7), a specific declaration is made that no liability incurred by the Textile Undertaking before the appointed day, shall be enforceable against the Central Government or the custodian. The provision made is so clear and unambiguous that no deliberations are called for to understand what is intended thereby. The liability to pay the excise duty, obviously falls within the ambit of this provision. 8. In order to gain support to their plea, the appellants have produced a copy of the opinion, allegedly given by the Ministry of Law, in relation to legal position of liabilities and receipts of refunds by custodian of Textile Undertakings, where the following conclusion is drawn : "It is thus clear that all actionable claims and other receivables of the Textile Company immediately vest in the custodian from the appoin....
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....een obtained in connection with such past liabilities are enforced against the properties of the textile undertakings whose management is taken over, the entire Act will become infructuous." 11. Reliance is sought to be placed on the Order Nos. 2196-2198/90-WRB, dated 24-12-1990 of the Single Member (where one of us sat as a Single Member) where such adjustment has been held as permissible. From the discussion made thereunder, it appears that the issue was not projected from the angle as is now done, and also the view expressed by the Bombay High Court was not made available. However, now that the legal position is clear, and when provisions of sub-section (1), (2) and (7) of Section 3 of the Take Over Act, 1983 are read in conjunction, it has to be concluded that the earlier view based on the general principles of appropriation of dues against the debts, cannot be sustained in view of specific provision to the contrary made in the statutory enactment, and are meant to be applied to a specified class of manufacturers. 12. To reiterate, refund sanctioned is payable to the custodian, since the same is being paid after the appointed day, whereas the recovery of confirmed de....