TaxTMI 
TaxTMI 
2005 (11) TMI 546
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....28th of June 2003. 2. The conveyance deed was executed on 21.8.2003 and registered on 25th of August 2003. The transfer was made subject to clearance of the liabilities payable to the RIICO which were under taken by the buyer. But no other liabilities of previous owner were disclosed or under taken by the petitioner buyer. 3. It is further averred by the petitioner that it came to know about dues of predecessor owner were of Central Excise Department and that outstanding amount due to non payment of excise duty of Rs. 16,73,410/- when demand/recovery notices dated 8.6.2004 and 24.6.2004 were issued to the petitioner as buyer of the unit, previously owned by M/s. J.M.S.P. Ltd. It was contended by the petitioner before the Excise Department that it being the purchaser from the RFC under Section 29 of the Act and, so all encumbrances and it is not liable for payment of its predecessor-in interest. However, same was not responded to and again demand notices were issued on 3.7.04, 30th September 2004 and 1.10.2004, which were duly replied by the petitioner. 4. After serving of the notice for demand of justice to respondents and for staying recovery proceedings against it, which....
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....ent auction of the assets of the J.M.P.S. Ltd. was made only subject to buyers liability to clear dues of RIICO. 9. Learned counsel for the petitioner places reliance on the principle enunciated by the Hon'ble Supreme Court in Isha Marbles vs. Bihar State Electricity Board and another (1995) 2 Supreme Court Cases 648. In support of his contention that buyer in absence of charge on the property or mala fide, is not liable for any liability or dues of the previous owner unless transfer is specifically under stipulation to that effect. He also pointed out as on the date of transfer took place, neither Rule 230(2) of the Central Excise Rules 1940 in force nor proviso to Rule 11, relied on the respondents came in force. Therefore, transfer which took place for the assets of previous owner was not subject to any statutory provision under which assets of the previous owner could be perused for recoveries under Central Excise Act, 1944, in the hands of buyer. 10. Learned counsel for Union of India too has placed reliance on another decision of the Hon'ble Supreme Court in case of Macson Marbles Pvt. Ltd. vs. Union of India 2003(158) E.L.T. 424 (S.C.), in support of its submis....
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....d assets until dues are paid by the person carrying on such trade or business and against whom liability for dues has arisen. 15. Sub Rule (2) of Rule 230 provided pursuits of goods and articles mentioned in sub rule (1) of the Rule 230 in the hands of the successors in business in whole or part in respect of the dues out standing against the previous owner. 16. However, the Rules of 1944 stood superseded when the Excise Rules 2001 were promulgated vide notification dated 1st of March 2001 which were to be brought in effect from 1st July 2001. 17. The Rules issued vide notification dated 1st of March 2001 itself were superseded by subsequent Rules as The Central Excise (No. 2) Rules, 2001 were promulgated which were also to come in force with effect from 1st day of July 2001. Rule 33 in Central Excise (No. 2) Rules, 2001 envisages rescinding of the Central Excise Rules, 2001. While superseding Rules of 1944 by Rules of 2001 no provision corresponding to Rule 230 was made in the Rule of 2001. Thus w.e.f. 1.7.2001 Rule 230(2) was not in force nor any parallel provision came into force under new Rules, as no such Rule was framed at all. 18. Thereafter vide Finance Act No. ....
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.... person.' 21. The condition for invoking Rule 230(2) or proviso to Section 11 relates to transfer of business or trade in whole or in part or change in ownership of trade or business, but it does not contemplate piecemeal transfer of assets divorced from the transfer of trade or business. 22. Be that it may, since 1.7.2001 in the present case, provision of Section 11 was not brought retrospective effect and Rule 1944 having been superseded by Rules of 2001 and there being no provision akin to Rule 230 of Rules of 1944 when the actual transfer of assets in question took place in May 2003. That being the position, there was no provision on the statute book under which respondent Excise Department are empowered to recover dues against M/s. J.M.S.P. Limited from the buyer of its assets in an auction under Section 29 of the S.F.C. Act. 23. In absence of statutory provision the principle laid down in Isha Marbles case fully governs the facts of the present case. It was a case in which premises in question were transferred by the State Financial Corporation under Section 29(1) and when new owner applied for release of electric connection to new premises, the electricity board....