BALIA, J. - (1.) THIS writ petition is filed by the purchaser of the assets of certain Industrial Unit M/s. J. M. Spin Tex Print Pvt. Ltd. , situated in Mandia Road, Industrial Area, Pali, at auction held by Rajasthan Financial Corporation, in exercise of its powers conferred under Section 29 of the State Financial Corporation Act, 1951. Transfer of the assets of unit M/s. J. M. S. P. Limited, was as a result of it being defaulter in payment of principal and interest of the loan borrowed from the Rajasthan Financial Corporation (hereinafter in short RFC ). The auction took place in pursuance of advertisement issued on 3. 5. 2003 and the highest bid made by the petitioner was accepted by the respondents corporation on 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. It is further averred by the petitioner that it came to know about dues of predecessor owner were of Central Excise Department and that out-standing 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. After serving of the notice for demand of justice to respondents and for staying recovery proceedings against it, which was refused by the respondents by the letter dated 1. 10. 04, this petition has been preferred seeking mandamus that the proceedings of recovery undertaken by the respondents vide notice dated 1. 10. 2004 be decided illegal and be quashed and the respondents be restrained from taking proceedings for attachment of property purchased by the petitioner in the auction pursuant to advertisement dated 3. 5. 2003. It was further prayed that other demand notices be also quashed. In this connection the petitioner's contention is that when the petitioner acquired the assets of M/s. J. M. S. P. Ltd. in an auction conducted by RFC under Section 29 of the S. F. C. Act, 1951 no provision which could made the buyer of under taking or assets sold liable for the dues against previous owner. The respondent, Union of India, has placed reliance on proviso to Section 11-A of the Central Excise Act, 1944 to sustain demand made by it against successor in interest of the assets of unit, earlier known as JMS Pvt. Limited and contended that in view of the aforesaid statutory provision where the person (hereinafter called predecessor) from whom the duty or any other sums of any kind, as specified in Section 11-A, is recoverable or due, transferor 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 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, for the purpose of recovering such duty or other sums recoverable or due from such predecessor at the time of such transfer or otherwise disposal or change.
(3.) LEARNED counsel for Union of India also rely on sub rule (2) of Rule 230 of the Central Excise Rules, 1944, since repealed, which was to the same effect, to sustain demand notices issued against the petitioner. State Financial Corporation supported the case of the petitioner by stating that transferee is not liable to any liabilities of previous owner including its liability under the Central Excise Act, except as stated in the advertisement of the auction of the assets of the previous owner. Under the advertisement auction of the assets of the J. M. P. S. Ltd. was made only subject to buyers liability to clear dues of RIICO. 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 persued for recoveries under Central Excise Act, 1944, in the hands of buyer. ;