TaxTMI 
TaxTMI 
2022 (7) TMI 230
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....stries were issued Central Excise Registration. 1.2 M/s Roma Industries ran their business at said premises during the period 11.08.1997 to 14.12.1998 and during the said period confirmed Government dues along with interest were pending against M/s Roma Industries. To recover the Government dues pending against the M/s Roma an Appendix -II was issued to the Appellant on 10.07.2013 for recovery of Government dues to the tune of Rs. 71,48,901/- along with interest pending with M/s Roma . Since the Appellant did not pay the confirmed Government dues pending against M/s Roma, the property Plot No. 8206, GIDC, Sachin, Surat (Land and Building) owned by the Appellant were attached under Panchnama dated 19.07.2013. Appellant made payment of Rs. 1,40,48,110/- against the outstanding dues pending against M/s Roma. Thereafter, Appellant filed the refund claim for said amount on the ground that they have paid the above amount which were not legally liable to be paid by them only to save their property from the possible auction by the department. The payment were made by them are require to be refunded to them. A show cause notice was issued proposing to reject the refund claim and the adjudi....
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....hat, if there are old dues of the appellant, then the appellant will pay the same. It also state that, if the appellant does not pay the same, then M/s Roma Industries will pay the same. But, if M/s Roma Industries does not pay, then the appellant will definitely be liable to pay. The said undertaking has absolutely no connection with the dues of M/s Roma Industries. Hence the entire undertaking has been misconstrued by the department. It is not open to the department to take an undertaking from a person in such situations. 2.3 He also submits that second undertaking of 2002 is concerned, the same is not even executed by Appellant. There is no resolution of the appellant company permitting anyone to give such an undertaking. The said undertaking is given by the Vikesh Jayantilal Mandiviwala. Now, at the relevant time, he was not even director of the Appellant company. 2.4 He further submits that leave and licence does not create any interest in M/s Roma Industries, question of enforcing the demand of M/s Roma Industries against the assets of the appellant under Section 11 also cannot arise. M/s Roma Industries has no interest, whatsoever, on land, plant and building given to them....
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....will be paid by M/s Roma Industries, Plot No. 8206, GIDC, Sachin (Surat) 3. We undertake that M/s Roma Industries will pay any demand or recovery of Central Excise duty due on date of surrender as arrives in future without any factor or time bar. 4. we also undertake to present central excise statutory records for audit or any other purpose whenever required. 5. we also under-take that in case M/s Roma Industries, sachin does not pay the central excise dues due to any reason whatsoever, the directors /partners of M/s Shaniyal Dying and Printing Mill, Sachin will be responsible and pay the government dues. From the plain reading of above undertaking it is clear that the said undertaking was given by the Appellant in respect of dues of M/s Shaniyal Dying and Printing mills only. The last para 5 of undertaking was wrongly interpreted by the department in the present matter. The actual meaning of said para is that if the dues related to Appellant i.e. arise after the surrender of registration certificate was not paid by M/s Roma Industries, than the same will be paid by the Directors /Partners of M/s Shaniyal Dying and Printing Mills. The said undertaking nowhere state that dues....
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....ip thereof, in consequence of which he is succeeded in such business or trade by any other person, all excisable 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 such officer empowered by the Central Board of Excise and Customs, after obtaining written approval from the Commissioner of Central Excise, for the purposes of recovering such duty or other sums recoverable or due from such predecessor at the time of such transfer or otherwise disposal or change.] In the present matter section 11 of the Act can have no application in the facts of the case. In the present disputed matter appellant have not succeeded or acquired the business or trade of the arrears holder (M/s Roma Industries) and even have not purchased any property of the arrears holder (M/s Roma Industries). M/s. Roma Industries cannot treated as predecessor and the appellant cannot be treated as successor in the business of M/s Roma Industries. Between both of them there is relationship of lessor and lessee. The appellant have simply given Factory Plot on lease and later on under Leav....
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....al Excise Officer or a proper officer referred to in Section 142 of the Customs Act , 1962 (52 of 1962) to deduct the amount so payable from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control or may be in the hands or under disposal or control of such other officer, or may recover the amount by attachment and sale of excisable goods belonging to such person; and if the amount payable is not so recovered he may prepare a certificate signed by him specifying the amount due from the person liable to pay the same and send it to the Collector of the district in which such person resides or conducts his business and the said Collector, on receipt of such certificate, shall proceed to recover from such person the amount specified therein as if it were an arrear of land revenue. A proviso to said sub-section (1) of Section 11 was added with effect from 10-9-2004 which reads as under : Provided that where the person (hereinafter referred to as predecessor) from whom the duty or any other sums of any kind, as specified in this section, is recoverable or due, transfers or otherwise disposes of his business....
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....ble or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after any such distress, may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and shall render the surplus, if any, to such person : Provided that where the person (hereinafter referred to as predecessor), by whom any sum payable under this Act including the amount required to be 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 a....
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....he transactions which may have been closed before the insertion by the Legislature would be one question. For the purpose of these proceedings, however, it is not necessary to finally comment on this aspect of the matter. We shall proceed on the basis that said proviso as also the proviso to sub-section (1) of Section 11 of the Central Excise Act, are applicable in the present case. Under sub-clause (ii) of clause (c) of sub-section (1) of Section 142 of the Customs Act, the proper officer can bring distress on the movable or immovable property belonging to or under the control of the defaulter. Proviso to sub-clause (ii) would apply in a case where such person without paying such dues, transfers or otherwise disposes of his business or trade in whole or in part or affects any change in ownership thereof. In such a situation, the property in possession of the transferee may also be attached and sold by the proper officer after following the prescribed procedure. 14. For various reasons, in the present case, invocation of the said provisions by the department is defective. We proceed on the basis that the central excise dues are that of Harshwardhan Exports. The department has not....
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....would expire upon completion of period of six years from the inception i.e. 16-1-1999. By efflux of time, the lease period would in any case, expire on 16-1-2005. Even if no other factor had intervened, Harshwardhan Exports's right in the property was limited to hold on to the possession and to utilize plant and the machinery till 15-1-2005. To realize the unpaid dues of the Harshwardhan Exports in any case, the department could not have sold what Harshwardhan Exports did not own. 17. In absence of any assertion of the department that Harshwardhan Exports and the petitioner Chandra Dyeing are the clones and the entire exercise of creating Harshwardhan Exports as a separate company was a sham transaction to defraud the Government revenue, in facts of the present case, there is no possibility allowing the respondents to sell the property of the petitioner for the unpaid dues of the Harshwardhan Exports. Even in the show cause notice dated 4-2-2010, the department has not built any such case. Case of the department merely was that Harshwardhan Exports had defaulted in paying a sum of Rs. 2.03 crores (rounded off), that Harshwardhan Exports had set up its manufacturing unit on the pl....