Custom, Excise & Service Tax Tribunal
Cce, Jaipur-I vs M/S.Packwell Polymers India Pvt. Ltd on 12 December, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
BENCH-DB
COURT-II
Excise Appeal No.E/2211/2005 in
[Arising out of Order-in-Appeal No.80/CE/JPR-I/2005 dated 23.03.2005 passed by the Commissioner (Appeals-II), Central Excise, Jaipur]
For approval and signature:
HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)
1. Whether Press reporters may be allowed to see the
order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in
any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
__________________________________________________
CCE, Jaipur-I Appellant
Vs.
M/s.Packwell Polymers India Pvt. Ltd. Respondent
Present for the Appellant : Mr.R.K.Grover, DR
Present for the Respondent: Ms. Rinki Arora, Advocate
Coram:HONBLE MR. RAKESH KUMAR, MEMBER (TECHNICAL)
HONBLE MR.S.K. MOHANTY, MEMBER (JUDICIAL)
Date of Hearing/Decision: 12/12/2014
FINAL ORDER NO.54923/2014
PER: RAKESH KUMAR
The facts leading to filing of this appeal by the Revenue in brief, are as under:-
1.1. The respondent had taken over the factory premises alongwith plant and machinery from M/s.Unistar Polymers (P) Ltd. on 31.07.2003 and obtained the Central Excise Registration in their name on 03.12.2003. An arrear of Revenue comprising of the Central Excise duty and penalty of Rs.9,73,676/- were pending recovery against M/s. Unistar Polymers (P) Ltd. with effect from 10.09.2004. Section 11 of the Central Excise Act, 1944 regarding recovery of sums due to Government was amended and a Proviso was added to this Section providing for recovery of adjudicated liability of a manufacturer from a person, who had taken over/ purchased the manufacturers business alongwith the factory, by attaching the machinery, vessels, utensils, implements and articles in the possession of that person. The Assistant Commissioner invoking the Proviso to Section 11 initiated recovery proceedings against the respondent by attachment order dated 29.10.2004 attaching the land and building of the respondent. On appeal being filed to Commissioner (Appeals) against the order dated 29.10.2004 of the Assistant Commissioner, the Commissioner (Appeals) vide order in appeal dated 04.04.2005 allowed the respondents appeal holding that the dues pending recovery against the previous owner M/s.Unistar Polymers (P) Ltd. cannot be recovered from the Respondent (present owner) and in this regard he relied upon the judgment of the Apex Court in the case of Macson Marbles Pvt. Ltd. vs. Union of India reported in 2003 (158) ELT 424 (S.C.) wherein the Apex Court with regard to Rule 230 (2) of the Central Excise Rules, 1944 having similar provision, held that penalty cannot be recovered from the successor, as it is difficult to conceive that the successor had any opportunity to participate in the adjudication proceeding and contest against the levy of penalty. Against this order of the Commissioner (Appeals), the Revenue is in appeal.
2. Heard both sides.
3. Shri R.K. Grover, ld. Departmental Representative, assailed the impugned order by reiterating the grounds of appeal and emphasized that the judgment of the Apex Court in the case of Macson Marbles Pvt. Ltd. (supra) is not applicable to the facts of this case. He emphasized that in view of Proviso to Section 11 of the Central Excise Act, 1944, the arrears of Revenue pending recovery against the previous owner of the factory i.e. M/s. Unistar Polymers (P) Ltd. are recoverable from the respondent the present owner and, therefore, the impugned order is not correct.
4. Ms. Rinki Arora, Advocate, the learned Counsel for the Respondent. defended the impugned order by reiterating the findings of the Commissioner (Appeals) and also cited the judgement of the Tribunal in the case of Eklinggji Finance Pvt. Ltd. vs. CCE, Jaipur reported in 2013 (295) ELT 81 (Tri.Del.) wherein the Tribunal has held that proviso to section 11 which came into effect from 10.09.2004 would not apply to a successor in business who purchased the business and the factory of the default during the period prior to 10.09.2004. She pleaded that the ratio of the judgment is squarely applicable to the facts of the case.
5. We have considered the submissions from both the sides and perused the records. The undisputed facts are that the factory premises alongwith all the plant and machineries were taken over by the respondent from its previous owner M/s. Unistar Polymers (P) Ltd. on 31.07.2003 and the Central Excise Registration Certificate was issued to the respondent on 03.12.2003. There was a confirmed duty demand and penalty totalling to Rs.9,73,676/- pending recovery against M/s. Unistar Polymers (P) Ltd. However, at the time of purchase of business of M/s.Unistar with plant and machinery by the respondent, there was no Provision in Section 11 of the Central Excise Act for recovery of dues pending against a manufacturer- defaulter from the person who purchased his business alongwith his factory. Such a provision was made by inserting proviso to section 11 with effect from 10.09.2004 and by this proviso to section 11, the arrears of Revenue pending recovery from the predecessor could be recovered even after change of ownership of the factory by attaching the machinery, vessels, utensils, implements and articles in possession of the successor of business. Since, there is nothing in this proviso to indicate that this amendment has retrospective effect, the same cannot be applied retrospectively and therefore the Department invoking Proviso to Section 11 could not recover from the respondent the arrears of Revenue of M/s. Unistar Polymers (P) Ltd. We find that same view has been taken by the Tribunal in the case of Eklinggji Finance Pvt. Ltd. (supra) and also by Honble Karnataka High Court in the case of CCE, Bamgalore-I vs. Press Fab Precision Components Pvt. Ltd. reported in 2007 (207) ELT 207 (Kar.). In view of this, we do not find any infirmity in the impugned order. The Revenues appeal is dismissed.
[Dictated & Pronounced in the open Court].
(S.K.MOHANTY) (RAKESH KUMAR) MEMBER (JUDICIAL) MEMBER (TECHNICAL) Anita ?? ?? ?? ?? 0 2