RIDDHI PRINTS Vs. COMMISSIONER OF CENTRAL EXCISE, SURAT

JUDGEMENT

(1.) APPELLANT had leased out the factory to M/s. Shivam Export, against whom the department has made out a case for payment of Rs. 38,52,93,416/ - on the ground that export obligation was not discharged. Since Shivam Exports has not paid the dues, factory premises has been attached for recovery of the same. Lower authorities have passed the order holding that department has power to attach the factory leased out to M/s. Shivam Exports under Section 11 of Central Excise Act, 1944, even though the appellant has got the possession back in view of the fact that in the lease deed, there was a specific condition that factory shall not be vacated till the export obligation is discharged and consent is from the authorities concerned in respect of 100% EOU. Lower authorities have observed that export obligation has not been discharged and consent has not been obtained. Hence the department can sell the same to recover the dues.

(2.) LEARNED advocate on behalf of appellants submits that amended Provisions of Section 11 making the successor liable to dues were not available during the relevant time. Further, she also submits that they cannot be held responsible for the dues payable by the lessee. She also relies upon several decisions of the Tribunal in support of her contention that successor is not liable to pay dues of the predecessor. On the other hand learned DR submits that in view of the specific provision in the lease deed Shivam Exports could not have vacated the premises in terms of the lease deed, department has the liberty to attach the factory and he also submits that consent has not been obtained and notice has been issued to the appellants only because they hold the possession of the premises and in the absence of Shivam Exports. In reality and in the eyes of law Shivam Exports can be said to be still in possession of premises, he submits.

(3.) WE have considered the submissions made by both sides. As rightly pointed by learned DR lessee in the eyes of law can be said to be still in possession of the property. Therefore, department does not seem to have lost the right of attaching the property. Lease deed clearly provides premises shall not be vacated without consent of the authority concerned or without fulfilment of export obligation. In these circumstances, Provisions of Section 11 and applicability of amendment to the Section dated 10 -9 -2004 are not relevant to the present case. Therefore, decisions cited by the learned advocate are of no help. We find that department has made out a strong prima facie case and we do not find this to be a fit case for grant of stay. At this stage, learned DR. submitted that in this case stay can not be granted since there is no duty demand is involved and appellant is not seeking waiver of pre -deposit or stay against recovery of dues. However, we do not agree with the views of learned DR that Tribunal cannot pass such order. We consider that the Tribunal has inherent powers to pass an order. In view of the above discussion, we asked learned advocate whether the appellant is willing to give undertaking that they would not dispose of or encumber the property in full or part thereof during the pendency of appeal. She agrees to do so. Therefore, subject to giving an undertaking to the jurisdictional Assistant Commissioner/Divisional Commissioner, we allow the application and stay the action to dispose of the property by the Revenue, during pendency of appeal. Stay petition is disposed of in above manner.