- (1.) U.P. State Cement Corporation Limited was incorporated as a company under the Companies Act, 1956. The said company carried on commercial operations till 1998 where it is suffered heavy losses and, upon erosion of its net worth, fell within the ambit of the provisions of Sick Industrial Companies (Special Provisions) Act, 1985. The BIFR declared this company as a sick industrial company in 1992 and, subsequently, recommended its winding up. Upon receipt of the recommendation from the BIFR, the High Court passed an order dated 08.12.1999 for winding up the Corporation and appointed the Official Liquidator attached to the High Court to act as the Liquidator of the said Corporation.
(2.) The Official Liquidator issued an advertisement in August, 2005 for sale of the cement plant and other assets of the Corporation. Based on this advertisement, the petitioner gave his bid of Rs.459.00 crores, which was found to be the highest and was accepted. The petitioner, accordingly, paid a sum of Rs. 459.00 crores to the Official Liquidator. The Central Excise Department issued the impugned notice dated 26.08.2010 contending that central excise dues amounting to Rs. 15.97 crores was due and payable by the erstwhile corporation and since the petitioner has purchased a running business of the Corporation, the liability of the Corporation towards the central excise dues has to be cleared by the petitioner and, accordingly, directed the petitioner to deposit the arrears within a month.
(3.) The petitioner, being aggrieved by the issuance of the notice, has filed the present writ petition contending that it had only purchased the assets of the Corporation pursuant to the winding up order of the Corporation and that the petitioner cannot be saddled with the past liability of the Corporation. The petitioner further contended that there was no stipulation in the advertisement that the liability of the Corporation would fall upon the petitioner. The Central Excise Department has filed a counter affidavit and contended that the petitioner has taken over the running business of the Corporation by purchasing the Corporation and its assets and that the arrears of the central excise dues can be recovered from the petitioner under Section 11 of the Central Excise Act (hereinafter referred to as the Act).;