JUDGMENT : AKIL KURESHI, J. 1. Petitioners have challenged the action of the respondent authorities in attaching a certain immovable property and prevented the petitioners from using the same by placing a prohibition on the petitioner's entering the premises. 2. Brief facts are as under. 3. Petitioner no.1 is Chandra Dyeing and Printing Mills Private Limited, a registered private limited company. Petitioner no.2 is its director. The petitioners would, hereinafter for sake of convenience, be referred to as 'the petitioner company' or 'Chandra Dyeing'. The petitioner company was engaged in the business of textiles. The petitioner was alloted an industrial plot bearing no.342, GIDC, Sachin, admeasuring 367 sq.mtrs. by GIDC on lease for a period of 99 years. The lease deed was executed on 16.01.1999. The petitioner company by raising loans from GIIC and GSFC started the dyeing unit at the said plot by constructing a shed an installing machinery in the year 1990. The business continued at the said place for few years till the company shut down the unit on 01.07.1998 and informed GIDC about closure under a letter dated 01.07.1998. The Central Excise License was also surrendered under a letter dated 08.02.1999. According to the petitioner, the dues of GIIC and GSFC were renegotiated and settled for a sum of Rs.92 lakhs. Some of the directors also exited the company by selling all their shares to the remaining shareholders. These outgoing shareholders, according to the petitioners, were interested in carrying on the same business but in different capacity. They therefore constituted a partnership firm by the name Harshwardhan Exports in May, 1999 which was later on converted into a private company. Harshwardhan Exports then entered into a lease agreement with the petitioner Chandra Dyeing for use of the plot of land, plant and machinery of Chandra Dyeing for a period of 6 years on agreed terms. A lease deed was executed on 16.01.1999. Harshwardhan Exports also obtained central excise registration and started the business of dyeing fabrics for exports as an EO at the same premises. Sometime later, however, Harshwardhan Exports also was not successful in carrying on the business. According to the petitioner, Harshwardhan Exports did not pay the lease rent and the petitioner therefore wrote to Harshwardhan Exports on 20.02.2004 pointng out that Harshwardhan Exports had not paid sizable amount of rent and called upon Harshwardhan Exports to handover the possesion of the factory immediately. According to the petitioner, Harshwardhan Exports did not pay the lease rent and the petitioner therefore wrote to Harshwardhan Exports on 20.02.2004 pointng out that Harshwardhan Exports had not paid sizable amount of rent and called upon Harshwardhan Exports to handover the possesion of the factory immediately. It was also pointed out that the factory was closed since long and that the same be returned in working condition. In response to such letter, Harshwardhan Exports wrote to Chandra Dyeing on 31.03.2004 and conveyed that the central excise license is due to expire on 2602.2004. The letter records handing over of the possession of the unit to Chandra Dyeing. It was further conveyed that the question of arrears of rent will be settled through discussions. 4. On 03.03.2004, Harshwardhan Exports wrote to the Superintendent of Central Excise and pointed out that the central excise license had expired on 25.02.2004. The lessor has asked Harshwardhan Exports to vacate the factory premises and accordingly the possession would be handed over son. 5. On 18.01.2005, Assistant Commissioner of Central Excise, Surat, issued a notice of demand of Rs.40,61,623/- to Harshwardhan Exports. In the said notice, attention of the noticee was also drawn to the rule 9 of the Customs (Attachment of Property of Defaulters for recovery of Government dues) Rules, 1995, (hereinafter to be referred to as the 'said rules of 1995'), as per which, any transfer or delivery of the attachment of any interest therein where an order of attachment has been made would be void as against all claims enforceable under the attachment. According to the department subsequently, the land at GIDC and the plant and machinery situated on such plot of land were also attached by the competent authority under two separate panchnamas dated 21.08.2005. 6. On 04.02.2010, Assistant Commissioner of Central Excise, Surat, issued a show cause notice to Chandra Dyeing. In such show cause notice, it was conveyed to the noticee that Harshwardhan Exports had taken on lease for a period of six years the factory building and machinery of Chandra Dyeing. In relation to such premises, licenses and permissions were granted to Harshwardhan Exports to set up 100% EOU. In such show cause notice, it was conveyed to the noticee that Harshwardhan Exports had taken on lease for a period of six years the factory building and machinery of Chandra Dyeing. In relation to such premises, licenses and permissions were granted to Harshwardhan Exports to set up 100% EOU. It was subsequently found that Harshwardhan Exports was involved in illicit removal of excisable goods, for which, show cause notice was issued and adjudicated, as a result of which, a total demand of duty and penalty of Rs.2,03,46,043/has been confirmed against Harshwardhan Exports. The notice also indicated that Harshwardhan Exports has also failed to pay such amount with interest. In terms of second proviso to Central Excise Act therefore, such dues can be recovered from the petitioner. The notice also referred to and relied upon section 142 of the Customs Act, 1962. The petitioner was therefore called upon to show cause why such sum of Rs.2,03,46,043/- be not recovered by attachment of plant and machinery and the factory building at plot No. 343, GIDC, Sachin. 7. The petitioner replied to such show cause notice under a communication dated 04.03.2010. The petitioner pointed out that the property was merely given to Harshwardhan Exports on lease for six years. Such lease was also terminated since Harshwardhan Exports could not pay the lease amount. In fact, the case of the petitioner was that even such lease was not permitted by GIDC which was one of the reasons why the lease was terminated. 8. No final order on such show cause notice was passed by the competent authority. The trigger for the petitioner to file the present petition appears to be a dispute between the petitioner and the department According to the department, the petitioner tried to remove the machinery from the site despite attachment. According to the petitioner, no such attachment was ever served or even affixed on the premises. In background of such disputes, the department put its lock on the premises, upon which, the present petition came to be filed. 9. Short question that calls for consideration is whether the department can seek recovery of the dues of Harshwardhan Exports thrugh sale of the property of the petitioner. To summarize the relevant facts, the petitioner is enjoying lease of 99 years on the plot of land situated at GIDC, Sachin. 9. Short question that calls for consideration is whether the department can seek recovery of the dues of Harshwardhan Exports thrugh sale of the property of the petitioner. To summarize the relevant facts, the petitioner is enjoying lease of 99 years on the plot of land situated at GIDC, Sachin. The petitioner has set up a dyeing unit on such plot by installing plant and machinery. After operating said unit for few years, the petitioner closed down the said unit in the year 1999 and also surrendered the central excise license around the same time. Some of the directors of the petitioner company exited and set up a new company. This new company Harshwardhan Exports took the unit on lease for a period of six years to set up its dyeing unit exclusively or exports. The department has raised sizable central excise dues against Harshwardhan Exports. In the meantime, the lease between the petitioner and the Harshwardhan Exports came to be terminated on 20.02.2004. Under a letter dated 31.03.2004, Harshwardhan Exports also handed over the possession of the unit to Chandra Dyeing. 10. In this background, we may peruse the statutory provisions. Section 11 of the Central Excise Act, 1944, pertains to recovery of sums due to Government. Sub-section (1) of section 11 till 10th of September, 2004, provided as under : 11. Recovery of sums due to Government. 10. In this background, we may peruse the statutory provisions. Section 11 of the Central Excise Act, 1944, pertains to recovery of sums due to Government. Sub-section (1) of section 11 till 10th of September, 2004, provided as under : 11. Recovery of sums due to Government. – (1) In respect of duty and any other sums of any kind payable to the Central Government under any of the provisions of this Act or f the rules made thereunder, [including the amount required to be paid to the credit of the Central Government under section 11D] the officer empowered by the [Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963)] to levy such duty or require the payment of such sums [may deduct or require any other Central 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 n 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 ad 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 10.09.2004 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 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, after obtaining written approval from the [Principal Commissioner of Central Excise or 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.] 11. Section 142 of the Customs Act, 1962, pertains to recovery of the sums due to Government and reads as under : 142. Recovery of sums due to Government. Section 142 of the Customs Act, 1962, pertains to recovery of the sums due to Government and reads as under : 142. Recovery of sums due to Government. – (1) [Where any sum payable by any person] under this Act [including the amount required to be paid to the credit of the Central Government under section 28B] is not paid, – (a) the proper officer may deduct or may require any other officer of customs to deduct the amount so payable from any money owingto such person which may be under the control of the proper officer or such other officer of customs; or (b) the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may recover or may require any other officer of customs to recover the amount so payable by detaining and selling any goods beonging to such person which are under the control of the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] or such other officer of customs; or (c) if the amount cannot be recovered from such person in the manner provided in clause- (a) or clause- (b) – (i)the [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business and the said Collector on receipt of such certifiate shall proceed to recover from the said person the amount specified thereunder as if it were an arrears of land revenue; or (ii) the proper officer may, on an authorisation by a [Principal Commissioner of Customs or Commissioner of Customs] and in accordance with the rules made in this behalf, distrain any movable 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 approval from the [Principal Commissioner of Customs or Commissioner of Customs], for the purposes of recovering the amount so payable by such predecessor at the time of such transfer or otherwise disposal or change. [(d)(i)The proper officer may, by a notice in writing, require any other person from whom money is due to such person or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount; (ii) every person to whom the notice is issued under this section shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before the payment is made, notwithstanding any rule, practice or requirement to the contrary; (iii) in case the person to whom a notice under this section has been issued, fails to make the payment in pursuance thereof to the Central Government, he shall be deemed to be a defaulter in respect of the amount specified in the notice and all the consequences of this Chaptershall follow.] (2) Where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub-section. 12. The department would rely on the proviso to sub-section (1) of Section 11 of the Central Excise Act as well as on sub-clause- (ii) of clause-(c) of sub-section (1) of section 142 of the Customs Act. 13. We may record that proviso to sub-section (1) of section 11 so also, proviso to sub-clause- (ii) of clause-(c) of sub-section (1) of section 142 of the Customs Act were inserted with effect from 01.10.2004. 13. We may record that proviso to sub-section (1) of section 11 so also, proviso to sub-clause- (ii) of clause-(c) of sub-section (1) of section 142 of the Customs Act were inserted with effect from 01.10.2004. The question of applicability of the said proviso to the transactions which may have been closed before the insertion by the lgislature 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 prescribe 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 set up any case of Harshwardhan Exports and the petitioner Chandra Dyeing being one and same entity though on paper, separate companies. In other words, it is not the case of the department that entire creation of Harshwardhan Exports as the company was a sham transaction only with a view to defraud the government revenue or other creditors and in fact it was behind the scene that the petitioner alone was operating the entire business. The case of the department emerging from the record simply is that Harshwardhan Exports had sizable unpaid dues of the department and such dues can be recovered from its property even after its transfer. 15. The case of the department emerging from the record simply is that Harshwardhan Exports had sizable unpaid dues of the department and such dues can be recovered from its property even after its transfer. 15. If this be the case, we may recall the property referred to by the department was nothing other than the lease for a period of six years granted to the petitioner by Harshwardhan Exports to utilize the plant and machinery situated on the plot no.342, GIDC, Sachin. Such lease was terminated on or around 20.02.2004 since Harshwardhan Exports could not pay its rental dues. Possession of leased premises was handed over by the Harshwardhan Exports to the petitioner on 31.03.2004. The first order of attachment was passed on 28.01.2005 which followed the notice dated 18.01.2005 issued to Harshwardhan Expots for unpaid dues of the department. Thus, the transaction of transfer of the leasehold rights of Harshwardhan Exports to the petitioner took place before the order of attachment was passed. It is not a case where the transfer took place after the property was attached. In plain terms, the said provisions apply in case of transfer of business and not merely transfer of property or assets as held by the SupremeCourt in case of State of Karnataka and Another v. Shreyas Papers (P) Ltd. and others reported in (2006) 1 SCC 615 . 16. The issues can be looked from a slightly different angle. At the very best, the department could have sold the property of the Harshwardhan Exports for its entire unpaid dues of the government. In the present case, the property under reference is a leasehold right over the plant and machinery at GIDC, Sachin. If at all, the department could have put such right to sale for the remainder of the lease period. After the lease period was over, in any case, there would be no residue of the ownership right of Harshwardhan Exports in such property. Even ignoring the premature termination of the lease, the lease would expire upon completion of period of six years from the inception i.e. 16.01.1999. By efflux of time, the lease period would in any case, expire on 16.01.2005. 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 15.01.2005. By efflux of time, the lease period would in any case, expire on 16.01.2005. 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 15.01.2005. 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 th entire exercise of creating Harshwardhan Exports as a separate company was a sham transaction to defraud the Government revenu, 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 Harshwardha Exports. Even in the show cause notice dated 04.02.2010, 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 plot of land leased by the petitioner to Harshwardhan Expors and that the petitioner should therefore pay up such sum. Significantly, such notice referred to one of the conditions for granting permission to Harshwardhan Exports to set up a 100% EOU at the said place. This condition provided that the lease would last till 15.01.2005 and in any case, the factory would not be vacated till the export obligation of the Harshwardhan Exports are discharged and consent is obtained from the authorities in respect to the same. Firstly, it is not clear whether the petitioner was signatory to any such condition. Secondly, if at all, it would be the breach of the condition but would not change the complexion so far as the title and rights of Harshwardhan Exprts in the leased property are concerned. Merely because Harshwardhan Exports agreed not to vacate the premises till full export obligations are discharged, would not create any additional right in the property which can be sold for the purpose of recovery of the dues of Harshwardha Exports. 18. Merely because Harshwardhan Exports agreed not to vacate the premises till full export obligations are discharged, would not create any additional right in the property which can be sold for the purpose of recovery of the dues of Harshwardha Exports. 18. In view of such facts, it is not necessary to refer to various judgments cited by the counsel for the petitioners in the context of the applicability of section 142 of the Customs Act or section 11 of the Central Excise Act. 19. In the result, the attachment and distress imposed by the department on the property in question are set aside. Petition is disposed of accordingly.