Research › Search › Judgment

Gauhati High Court · body

2018 DIGILAW 409 (GAU)

Pan Parag India Ltd. v. Union of India

2018-03-08

ACHINTYA MALLA BUJOR BARUA

body2018
JUDGMENT & ORDER : 1. Heard Ms. S.K Kejriwal, learned counsel for the petitioner and Mr. B. Sarma, learned Standing Counsel for the Excise Department. 2. The petitioner, which is a Company incorporated under the Companies Act, 1956 having its registered office at Pan Parag House, 24/19 in Kanpur (Uttar Pradesh), carries out the business of manufacture and sale of certain gutkha products. In course of their business, the petitioner amongst others, also owned two manufacturing units/factories/industries namely Unit-1 and Unit-2, which are located at A-1 to A-4 Industrial Estate, Cinnamara, Jorhat. 3. As per notification No.8/2004-CE of the Under Secretary to the Government of Assam in the Finance Department, issued u/s 5A (1) of the Central Excise Act, 1944 read with Section 3 (3) of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 and Section 136 (3) of the Finance Act, 2001, certain exemptions were granted in respect of excise duties falling under sub-heading 2401.90, 2402.00, 2404.41, 2404.49, 2404.50 or 2404.00 of the First Schedule and the Second Schedule of the Central Excise Tariff Act, 1985, from the whole of duties of excise, additional duties of excise leviable under Central Excise Tariff Act, the Additional Duties of Excise (Goods of Special Importance) Act and National Calamity Contingent duty leviable u/s 136 (1) of the Finance Act. 4. In the said notification, the said exemptions are stated to be in supersession of the earlier notification of the Government of India in the Ministry of Finance (Department of Revenue) No.69/2003/Central Excise dated 25.08.2003. 5. The aforesaid exemptions were granted subject to certain conditions, which amongst others, is condition F, which provides that the investments made under the said notification, shall not be allowed to be withdrawn before the expiry of 10 years from the date on which the investment is made, except in a case where the investment withdrawn is reinvested in the same manner as specified in the notification. 6. In the aforesaid manner, the petitioner had made certain investments and the last of the investment was made on or before 31.03.2005 as reflected in Annexure-E page 25 of the writ petition. Accordingly, Clause-F of the notification dated 21.01.2004 would imply that the investment made by the petitioner on or before 31.03.2005 cannot be withdrawn by them before expiry of ten years, thereby meaning that they cannot withdrawn before 31.03.2015. 7. Accordingly, Clause-F of the notification dated 21.01.2004 would imply that the investment made by the petitioner on or before 31.03.2005 cannot be withdrawn by them before expiry of ten years, thereby meaning that they cannot withdrawn before 31.03.2015. 7. In the aforesaid circumstance, the petitioner made an application dated 03.10.2015 to the Commissioner of Central Excise and Service Tax at Dibrugarh requesting the authorities to allow them to remove the capital investment equipment comprising of plants and machineries from the factory premises which were the result of the investment pursuant to the said notification dated 21.01.2004. In their communication, the petitioner specifically stated that the ten years period prescribed in Clause-F of the notification dated 21.01.2004 had already expired and therefore, the petitioner is entitled to remove the capital investments, which were made prior to 31.03.2005 in the form of plants and machineries. 8. This writ petition is preferred with the grievance that in spite of the petitioner being entitled to remove the capital investment in plants and machineries under Clause-F of the notification dated 21.01.2004, the respondent authorities are not allowing the petitioner to do so. 9. The stand of the Department as reflected in their affidavit in opposition dated 16.08.2017 in paragraph-8 is that a dispute as regards revenue payable by the petitioner is involved in certain pending cases before the Hon’ble Supreme Court as well as before the CESTAT, Kolkata and therefore, the petitioner is not allowed to remove the plants and machineries. 10. In order to justify such stand, the Excise Department in their affidavit in opposition relies upon the provisions of Section-11 of the Central Excise Act, 1944, which according to the department provides for attachment of the plants and machineries of the petitioner. In the aforesaid circumstance, the issue for determination is that whether u/s 11 of the Central Excise Act, 1944, the Excise Department is empowered to attach and retain the plants and machineries of the petitioner on the ground that certain amount are due from the petitioner in respect of some cases, which are pending before the Hon’ble Supreme Court and the CESTAT, Kolkata. 11. In order to adjudicate upon the said issue, an examination of the provisions of Section -11 of the Central Excise Act, 1944 would be relevant. Section-11 of the Central Excise Act, 1944 is as under:- "11. 11. In order to adjudicate upon the said issue, an examination of the provisions of Section -11 of the Central Excise Act, 1944 would be relevant. Section-11 of the Central Excise Act, 1944 is as under:- "11. Recovery of sums due to Government.—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 of the rules made thereunder, 1[including the amount required to be paid to the credit of the Central Government under section 11D] the officer empowered by the 2[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 the amount so payable from any money owing to the person from whom such sums may be recoverable or due which may be in his hands or under his disposal or control, 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 and the said Collector, on receipt of such certificate, shall proceed to recover from the said person the amount specified therein as if it were an arrear of land revenue]: 3[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 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.]" 12. A bare perusal of Section -11 makes it apparent that under the said provisions, in the event any duty or any other sum of any kind is payable by an assessee to the Central Government under the Central Excise Act, 1944 or the Rules framed thereunder, the Central Government (i) may deduct the amount so payable from any money owed to such person by the department; (ii) recover the amount by attachment and sale of excisable goods belonging to such person or (iii) if such amount payable is not recovered, the appropriate authority in the department may issue a certificate specifying the amount due from the concerned person and send the certificate to the Collector of the district in which such person resides or conduct his business and the Collector upon receipt of such certificate, shall proceed to recover from the said person as if it were an arrear of land revenue. 13. None of the three methods provided u/s 11 of the Central Excise Act, 1944 empowers the department to attach any property of an assessee/person on the ground that such person or assessee may be liable to pay the department any amount towards meeting the dues under the Central Excise Act or the Rules framed thereunder. In the absence of such power, this Court cannot concur with the stand taken by the respondent authorities in paragraph-8 of the affidavit in opposition that in exercise of power u/s 11 of the Central Excise Act, 1944, the plants and machineries of the petitioner are being attached for the purpose of meeting the dues that may be due from the petitioner in respect of such cases mentioned therein, which are pending before the Hon’ble Supreme Court of India or before the CESTAT, Kolkata. 14. The conduct of the Excise Department in not allowing the petitioner to remove the plants and machineries is found to be contrary to the powers conferred u/s 11 of the Central Excise Act, 1944 and this Court is of the view that the respondent Excise Department cannot attach any other property of the petitioner other than any excisable goods and also cannot restrain the petitioner from lifting the plants and machineries involved in the present writ petition by taking recourse of Section 11 of the Central Excise Act, 1944. 15. 15. Accordingly, it is ordered that the appropriate authority in the Central Excise Department shall not prohibit the petitioner from lifting and taking away the concerned properties by exercising their power u/s 11 of the Central Excise Act, 1944. In terms of the above, this writ petition stands disposed of.