THE HON’BLE SRI JUSTICE K.C.BHANU CIVIL MISCELLANEOUS APPEAL No. 379 OF 2009 JUDGMENT: 1. This Civil Miscellaneous Appeal is preferred aggrieved by the order dated 25.03.2008 in I.A. No.101 of 2008 in O.S. No.32 of 2008 on the file of the Senior Civil Judge, Nalgonda, whereunder and whereby the petition filed by the first respondent herein under Order XXXIX Rule 1 C.P.C. for interim injunction, was partly allowed. 2. Central Excise Duty has been determined by the competent authority whereunder and whereby Rs.53.00 lakhs and odd was payable to the Central Excise Department by the second respondent company herein. The first respondent company herein purported to have entered into a Memorandum of Understanding with the second respondent herein to undertake commercial production of finished goods on conversion charges apart from supplying raw material and incurring the costs of production within the factory premises of second respondent herein. When the first respondent purportedly entered into Memorandum of Understanding, it ought to have verified the tax or other dues. Without adverting to the basic question, the learned Judge simply granted injunction restraining the respondents therein from collecting the taxes due to the government. The contention of the first respondent that no notice was served on it before finalizing the duty due, cannot be accepted. It is totally a misuse of the jurisdiction of the Court to evade tax payment. 3. Proviso to Section 11 of the Central Excise Act, 1944, reads thus: “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.” When the Central Excise authorities have proceeded in accordance with law, their actions have been stalled by way of granting injunction. When a specific plea has been taken by the appellants herein in their counter affidavit filed before the court below that the succeeding company is liable to pay arrears and if the same are not paid, the department can recover the amount by way of attachment and sale of plant, machinery and excisable goods. That aspect has not at all been considered by the trial court. The entire order of trial court goes to show that it was decided as if it is an appeal against the order of determination of the duty. In the counter filed by the appellants, it is specifically stated that the Commissioner at the request of the manufacturer, has permitted them to clear the dues amounting to Rs.1,47,64,497/- (arrears pertaining to the period from December, 2003 to January, 2006) in 36 instalments, at the rate of Rs.4,15,935/- per month. After paying three instalments promptly, the assessee failed to adhere to the Commissioner’s permission and defaulted in paying the monthly instalments. Thereafter, action was initiated for recovery of the outstanding dues by treating them as arrears. Then the detention order dated 15.11.2007 was issued by the competent authority detaining the excisable goods lying in the factory. 4. From the record, it is clear that the entire operations in the factory premises are being operated through the second respondent herein. As a matter of fact, the Central Excise Registration is obtained by the second respondent herein. The monthly returns, the duty amount for the manufacture and clearance of goods, and correspondence are being undertaken by the second respondent herein alone. The second respondent never raised any objection when excisable finished goods were attached on 15.11.2007. The duty default occurred from April, 2003 to January, 2006. During that period, the first respondent was getting the goods manufactured. Therefore, the contention of first respondent that the taxes due to the department was committed during the period of second respondent, cannot be accepted. Even assuming that the taxes due occurred during the period of management of second respondent, still, proviso to Section 11 of the Central Excise Act, 1944, is very clear that all the excisable goods, materials, plants, machinery, vessels, etc. of succeeding company may also be attachable by the competent authority. This aspect of the law is completely overlooked by the trial Court. The finding that the first respondent was paying conversion charges and other manufacturing charges to the second respondent and that the third respondent is paying excise duty to petitioners herein is without basis and material on record. Similarly, the finding that the ownership of all the materials like sponge iron lumps, sponge iron finishes, sponge iron briquettes and other residues vest with the first respondent herein and not attachable, is totally devoid of merit and it is a perverse finding in view of the proviso to Section 11 of the Act, 1944, which was inserted by Act 23 of 2000 and came into effect from 10.09.2004. 5. The claim of the first respondent company is that it is a lessee of second respondent. Even assuming that the first respondent is a lessee, still, the proviso to Section 11 of the Act is crystal clear that a person transfers or otherwise disposes of his business or trade in trade in whole or in part or effects any change in the ownership thereof, still all excisable goods in the possession of successor may be attached by the Department. 6. As a matter of fact, other remedy is available to the aggrieved party to file an application before the appellate authority if the first respondent is aggrieved by the orders passed by the Central Excise Authorities. Therefore, the trial Court is not justified in granting injunction with regard to excise duty payable, which was already determined by the competent authority. The impugned order is totally outside the jurisdiction of the trial Court and the same is not sustainable under law. 7. In the result, the impugned order is set aside and I.A. No.101 of 2008 filed by the first respondent herein is dismissed vacating the injunction. 8. The Civil Miscellaneous Appeal is, accordingly, allowed. No costs. -------------------- 19.2.2010 DRK THE HON’BLE SRI JUSTICE K.C.BHANU CIVIL MISCELLANEOUS APPEAL No. 379 OF 2009 Date: 19.2.2010 Between: The Assistant Commissioner of Central Excise, Nalgonda & another …appellants And M/s. Global Enterprises, Secunderabad & another …Respondents THE HON’BLE SRI JUSTICE K.C.BHANU CIVIL MISCELLANEOUS APPEAL No. 379 OF 2009 19.2.2010