- (1.) THIS appeal is directed against order -in -appeal No. RKA/13/SRT -I/2011, dated 10 -1 -2011.
(2.) THIS is the second round of litigation before the Bench. In the first round of litigation, vide order dated 10 -5 -2007, Tribunal had remanded the matter back to the first appellate authority to reconsider the issue afresh with specific directions. The impugned order before the Tribunal is passed in de novo proceedings. The relevant facts that arise for consideration are Revenue had passed two orders -in -original in years 2000 and 2001 for the confirmation of demand of duty against assessee called M/s. Shree Vaishnavi Dyeing and Printing Mills Pvt. Ltd. (hereinafter called as Vaishnavi). Vaishnavi did not file any appeal and the orders became final nor any amount was paid by Vaishnavi and turned into a defaulter company. Property of Vaishnavi was taken over by Gujarat Industrial Investment Corporation Ltd. (GIICL) and on an occasion transferred to M/s. Sachin Dyeing and Printing Mills Pvt. Ltd. on as is whereas basis as per the agreement of sale. The Central Excise Department initiated an action of recovery of central excise duty against M/s. Sachin Dyeing and Printing Mills Pvt. Ltd. as dupe of defaulter company from transferring company. Adjudicating authority confirmed the same vide order -in -original dated 30 -11 -2006 which was appealed and the order in appeal was remanded back to the first appellate authority as per the Tribunals order dated 10 -5 -2007. The first appellate authority in the current proceedings has again upheld the said confirmation of the demand against the appellant. Aggrieved by such an order, the appellant is before the Tribunal.
(3.) LD . counsel appearing on behalf of the appellant would submit that unrecovered dues against Vaishnavi were proposed to be recovered from the appellant by taking action under the provision of Section 11 of the Central Excise Act read with Section 142 of the Customs Act, 1962 by attachment and sale of movable/immovable property. It is the submission that the said recovery provisions cannot apply to the appellant as department has never claimed first charge on the said property and GIICL was having first charge on the said property. It is the submission that confirmed dues of Vaishnavi were not recoverable from the appellant as has been held by the Apex Court in the case of SICOM Ltd. - 2009 (233) E.L.T. 433 (S.C.) = 2010 (18) S.T.R. 673 (S.C.). It is the submission that the show cause notice which was issued to the appellant (dated 16 -2 -2006) has alleged the appellant as successor of Vaishnavi who are alleged as predecessor in the cause title of the show -cause notice. It is the submission that appellant cannot be considered as successor as neither the business or trade of Vaishnavi is transferred to the appellant hence conditions of proviso to Section 11 of the Central Excise Act will not apply and are not sustainable. It is the submission that the appellant have not purchased the property from M/s. Vaishnavi directly but have purchased the same from GIICL as per the sale deed executed on 9 -1 -2004. It is the submission that the Honble High Court of Madras in the case of Sri Jayajothi Co. Ltd. - 2011 (268) E.L.T. 164 (Mad.) has categorically settled the law wherein their lordships have held that a purchaser in auction cannot be considered as successor of business or trade. It is submitted that the department has erred in not following the decision of the Honble High Court of Punjab and Haryana in the case of T.C. Spinners Pvt. Ltd. - 2009 (243) E.L.T. 31 (P and H) wherein Honble High Court clearly held that if the department has not created first charge, they cannot claim any dues from the assessee who has purchased the plant and machinery in auction. It is his submission that the reliance placed by the first appellate authority on paragraphs 6 and 7 of sale deed dated 9 -1 -2004 wherein it has been stated that claims/liabilities of the Government, if any, shall be paid by the purchaser in accordance with law, cannot be interpreted by the department to hold that the department can recover the amounts from the assessee. It is his submission that show cause notice which has been issued on 16 -2 -2006 to the appellant as a successos as per provision to Section 11 of the Central Excise Act, unless the appellant is declared as successor by Court appellant cannot be fastened with any liability, as the appellant in accordance with law is not a successor he is not liable for any duty to the Revenue. It is the submission that the liability cannot be fastened on the basis of the said terms, when in accordance with law, appellant is not liable to pay any amount as proposed under show cause notice dated 16 -2 -2006. It is the submission that judgment of the Honble High Court of Bombay in the case of Krishna Lifestyle Technologies Ltd. - 2008 (229) E.L.T. 173 (Bom.) = 2009 (16) S.T.R. 669 (Bom.) is directly on the issue wherein the Honble High Court has interpreted the provisions of Section 11 and more specifically word successor. It is his submission that this decision was carried in appeal by the Revenue by filing a special leave petition before the Apex Court which was dismissed by the Apex Court after condoning the delay as reported at 2009 (242) E.L.T. A118. It is also the submission that the judgment of the Honble High Court of Gujarat in the case of Sweta Gupta v. UOI - 2006 (205) E.L.T. 155 will be applicable on the issue. Ld. DR on the other hand would emphasise upon the findings recorded by the first appellate authority. It is his submission that the factory in question was auctioned on the basis of as is whereas basis and also that there is no dispute as to the fact that Vaishnavi had outstanding Central Excise duties payable to the department which has attained finally. It is his submission that the GIICL has transferred the property encumbrances, which is ascertainable from clauses 6 and 7 of the sale deed, which talks about settlement of claims/liabilities of the Government by the purchaser. It is his submission that on a similar situation, Honble High Court of Allahabad in the case of Rana Girders Ltd. - 2012 (281) E.L.T. 700 (All.) = 2013 (29) S.T.R. 87 (All.) has held that excise duty was recoverable from the purchaser as it is on manufacture and not on sale. He would also rely upon the decision of the Apex Court in the case of Macson Marbles Pvt. Ltd. v. UOI - 2003 (158) E.L.T. 424 (S.C.) for the proposition that liability to pay excise duty is on the unit which has purchased the same even if it is in auction proceedings.;