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2012 (4) TMI 42

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.... A Communication dated 26 May 2011 issued by the Deputy Commissioner of Central Excise directing the Petitioner to pay the dues of M/s. Verma Mukherjee Pvt. Ltd. along with interest in view of a notice of demand to defaulter dated 9 May 2011;   c) A Certificate No.01/2011-12 dated 2 May 2011 forwarded by the Deputy Commissioner of Central Excise, Kurla Division, Mumbai II to the Deputy Commissioner of Central Excise, Chembur II, Mumbai II; d) A Communication dated 7 June 2011 from the Deputy Commissioner of Central Excise seeking information from the Petitioner about herself and her late father; e) A Notice of attachment dated 1 July 2011 issued to the Petitioner and her late father Balram P Mukherjee in pro forma Appendix 1V of Customs(Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 by the Deputy Commissioner of Central Excise attaching his property; and f) A Notice of attachment dated 14 December 2011 issued to the Petitioner in proforma Appendix 1V of Customs(Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 attaching the property at Plot No.113, at village Vadhavali, Chembur by the Assistant Commissioner....

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....th interest failing which, it was stated, the procedure for attachment under the Recovery Rules 1995 would follow. On 4 June 2011, the Petitioner by a letter addressed to the Deputy Commissioner of Central Excise pointed out that she is the daughter of Balram P Mukherjee and presently owned the said property. The Petitioner further pointed out that neither she nor her father was a defaulter of Excise duty under Section 142 (1) of the said Act or under the Recovery Rules, 1995 as is evident form the notice itself which very clearly states that the arrears of duty and penalty are recoverable from the company. In the circumstances, the Respondents were requested to refrain from taking coercive measures for recovery of duty and penalty from the Petitioner. e) Thereafter, on 1 July 2011, the Deputy Commissioner of Central Excise served a notice of attachment under the Recovery Rules, 1995 at the Petitioner's address to the Petitioner's father and the Petitioner . By the notice, the Petitioner was informed that property has been attached and in terms of Rules 9 and 10 of the Recovery Rules, 1995 the Petitioner was prohibited from in any manner dealing with and /or transferring her inter....

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.... Rules, 1944, it was the person who manufacturers excisable goods who was liable to pay excise duty on manufacture of goods. It was submitted by the Petitioner, that neither the Petitioner nor her father were at any time manufacturers of goods and/or registered under the said Act as manufacturers to become liable to pay Excise duty. That the arrears of duty and penalty were that of the company is an admitted position as accepted in the Affidavit in reply dated 2 February 2012 of the Respondent. It was submitted that it is also evident from the notice/communication dated 26 May 2011 that the arrears of Excise duty and Penalty were payable by the said company of which the Petitioner's father was a Director. Counsel further submitted that there is no provision under the said Act to recover the dues of excise from the Directors of a limited company in case of default on payment of duty by the limited company as in the present case. This was in contrast to Section 179 of the Income Tax Act, 1961 which provides that a Director of the a Private Limited Company which is in liquidation, shall be jointly and severally liable for payment of income tax dues of the company unless he proves that....

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....ility of the Mukherjee Brothers. Therefore Mr. Jelty stressed that as a consequence of the transfer of share holding on 21 Mach 2000 between the Kapoor family and Mukherjee family the entire shareholding was transferred to Mukherjee family, who inter alia accepted their responsibility to discharge the central excise duty payable by the said Company. It was thereafter submitted that a notice of attachment under Rule 4 of the Recovery Rules 1995 was served on Balram P. Mukherjee on 6 December 1995 and therefore any transfer thereafter was a fraudulent transfer of the said property. Consequently, it was submitted by Mr. Jetly that the attachment proceedings were in order and once notice under Rule 4 of the Recovery Rules 1995 has been served, then any further transfer of the said property either by way of gift, sale etc. was a fraudulent transfer done only with a intent to deprive the revenue of its dues. In view of the above, it was submitted by Mr. Jetly that the Court should not issue a writ in the present proceeding as the Respondents were completely within jurisdiction in seeking to recover the dues and penalty of the said company from its erstwhile Director late Balram P Mukherj....

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....he recovery proceedings under the Recovery Rules, 1995 can be taken only against the company, as it alone is the defaulter. There is no provision to recover the arrears of the company from its Directors and or/shareholders under the said Act. The arrears of dues belonging to a limited company are recoverable only from the limited company concerned which is an independent entity in law, particularly so, as it obtains a separate registration under the Act. Therefore in terms of the Recovery Rules 1995, the dues can be recovered only from the limited company. There is no provision in the said Act as is found under Section 179 of the Income Tax 1961 or under Section 18 of the Central Sales Tax Act, 1956 where the dues of a private limited company can be recovered from its Directors when the private limited company is under liquidation, in specific circumstances. It is a well settled position in law that a Company incorporated under the Companies Act, 1956 is a separate person having a distinct independent identity, independent from its shareholders and Directors. Consequently, the dues of the company cannot be recovered from the Directors and/or individual shareholder of the company. F....