AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 276
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.... since they are auction purchaser therefore no recovery should be made from them. However later they sought to withdraw the appeal on the ground that they are not concerned with the dues of M/s Raj & Yash Alloys. On follow up of recovery of M/s Raj & Yash Alloys by the department the Appellant again sought for restoration of appeal. Since the appeal already stood withdrawn the Appellant approached the Hon'ble High Court at Goa who vide order dt. 27.02.2006 ordered for restoration of appeal and issue of relied upon documents to the Appellant. 2. The Appellant argued before the Commissioner (Appeals) on merits as well as on the ground that being auction purchaser of only assets, no recovery can be made from them and there has not been transfer of unit to them. On merits they submitted that the issue involved pertains to demand under Rule 96 ZO (3) and in since in absence of electricity expected goods cannot be produced. That the demand is also for the period after closure of factory. That the annual capacity of the production has not been determined finally and in absence of same no demand can be made. That M/s Raj & Yash Alloys had paid duty upto April 99 whereas the demand is fr....
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....56) ELT 585( TRI). 4. On the other hand, Shri A.B. Kulgod, Assistant Commissioner (AR) appearing on behalf of the revenue supports the impugned order. 5. We have carefully considered the submission made by both sides and perused the records. 6. We find that the Ld. Counsel has first taken the plea that since they are not successor to the business of M/s Raj & Yash Alloys therefore they are not liable for payment of dues of said concern. We find that the Hon'ble High Court of Mumbai in case of M/s Tata Metaliks supra has held that recovery cannot be made from the purchaser of asset in auction and the secured creditors have priority over claim of government dues and the said order stands approved by the Hon'ble Apex Court. The Hon'ble Court held as under : 9. The issue in Writ Petition No. 3020 of 2007 is whether the Central Excise and Customs dues have priority of claims over the dues of the secured creditors and further whether a successful auction bidder in an auction held under the SARFAESI Act is bound to pay the pending excise and customs dues of the erstwhile owner. The issue of priority of excise dues has been considered in Krishna Lifestyle Technologies Ltd....
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....e paid to the credit of the Central Government under section 28B is not paid, transfers or otherwise disposes of his business or trade in whole or in part, or effects any change in the ownership thereof, in consequence of which he is succeeded in such business or trade by any other person, all goods, materials, preparations, plants, machineries, vessels, utensils, implements and articles in the custody or possession of the person so succeeding may also be attached and sold by the proper officer, after obtaining written approval from the Commissioner or Customs, for the purposes of recovering the amount so payable by such predecessor at the time of such transfer or otherwise disposal or change. (2) Where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-Section (1) the amount may, without prejudice to any other mode of recover, be recovered in accordance with the provisions of that sub section. " A perusal of the said section would indicate that if any sum is payable to the Central Govt. the appropriate officer may ....
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....ther the transfer of assets in terms of proviso to Section 142 would amount to transfer or disposal of business or trade in whole or in part We may at this stage note that under the proviso what can be sold are the goods, plant and machineries as described therein. There is no power of sale of immovable property. The immovable property of the tax defaulter can only be sold by issuance of the certificate and the Collector of District acting on the certificate can recover it as an arrears of land revenue. Similar is the position under the Central Excise Act. 11. In our opinion, these issues are similar to the issues which arose in Writ Petition No. 4171 of 2007 decided on 5-2-2007 in Krishna Life Style Technology v. Union of India and Ors. The relevant Act in that case was the Central Excise Act. The provisions for recovery under the Central Excise Act and the Customs Act are more or less, the similar and as such the same tests will have to be applied or satisfied for recovery of the dues. For reference we may reproduce the said issues which were raised and answered : 1. Do tax dues recoverable under the provisions of the Central Excise Act, have priority of claim o....