(Per : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1) Since common issues are involved in both these petitions and facts are also substantially similar, the same were taken up for hearing together and decided by this common judgment.
2) The facts of each case may be stated briefly.
2.1) Special Civil Application No.5193 of 2009: The petitioner is engaged in the business of manufacture of steel ingots and steel products. Pursuant to a tender issued by the G.S.F.C through public advertisement for sale of land, building, plant and machinery of M/s. Shri Pramukh Industries Private Limited, situated at plot Nos.1514/1515, G.I.D.C Estate, Kerala, District: Ahmedabad and Non- agricultural Plot at Block No.210, village Kerala, District: Ahmedabad (hereinafter referred to as “the subject property”), the tender committee of G.S.F.C on 4.1.2008 and the subsequent Recovery Committee considered the offer of M/s. India Steel Traders Ltd. (the petitioner in Special Civil Application No.5194 of 2009) in exercise of powers conferred under section 29 of the State Financial Corporations Act, 1951 and accepted the offer of Rs.381 lakhs and by a sale letter dated 22nd January, 2008 the subject property came to be sold to M/s. India Steel Traders for Rs.381 lakhs subject to the conditions stated therein. One of the conditions was that the offerer was not liable for unpaid dues/liabilities towards G.I.D.C, G.E.B, Central Excise, Sales-tax and Income-tax. M/s. India Steel Traders had deposited the entire amount with G.S.F.C, pursuant to which the possession of property was handed over to M/s. India Steel Traders.
2.2) The petitioner company is one of the partners of M/s. India Steel Traders. The subject property comprised of 42,000 square metres of land, out of which M/s. India Steel Traders executed a lease deed in favour of the petitioner with respect to 6500 square metres of land for setting up a unit. The petitioner, thereafter, obtained necessary certificates from the District Industries Centre, Sales-tax Department and other Government Authorities. After entering into the lease agreement in respect of 6500 square metres of land, the petitioner, on 2.3.2009, made an application for registration under the provisions of the Central Excise Act, 1944 (hereinafter referred to as “the Act”). By a communication dated 3.3.2009, the petitioner was informed that its request for registration cannot be accepted as the surrender of registration of M/s. Shri Pramukh Industries Private Limited has not yet been accepted and that registration of two units on the same premises cannot be given. The petitioner was, accordingly, requested to provide indemnity bond for the dues of the amount of Rs.1,16,28,210/-.
2.3) The petitioner on 5.3.2009 addressed a communication to G.S.F.C drawing its attention to the conditions contained in the sale letter and inquiring as to who was liable for the unpaid dues of the erstwhile unit. On 5.3.2009, the petitioner once again requested the Commissioner to issue licence as the petitioner had already placed an order for the furnace and all other necessary machineries for setting up its unit.
2.4) Being aggrieved by the refusal of the central excise authorities in granting registration licence to it, the petitioner has filed the present petition seeking a direction to the respondents No.2 and 3 to issue Central Excise Registration licence to the petitioner pursuant to its application dated 2.3.2009 without insisting on payment of the outstanding amount of the earlier occupier M/s. Shri Pramukh Industries Private Limited
2.5) The facts of Special Civil Application No.5194 of 2009 are more or less similar. The petitioner, M/s. India Steel Traders purchased the subject property as narrated hereinabove from the G.S.F.C. Being desirous of setting up a furnace for stainless steel, on 23rd March, 2009 the petitioner applied for registration with the proper officer under section 6 of the Act read with rule 9 of the Central Excise Rules, 1944. Since the said application was not processed the petitioner inquired from the respondent No.3 as to why the same was not being processed and learnt that the Central Excise Department was refusing to grant registration because of the outstanding amount of the previous occupier M/s. Shri Pramukh Industries Private Limited. It appears that the petitioner had approached the Central Excise Authorities pointing out that the petitioner could not be refused registration when the petitioner had purchased the land, building, plant and machinery from the G.S.F.C pursuant to a public advertisement given by the G.S.F.C for selling the subject property and drawing their attention to the decision of the Supreme Court in Union of India v. SICOM, (2009) 2 SCC 151, however, registration was not granted. Being aggrieved the petitioner has filed the present petition seeking a direction to the respondents No.2 and 3 to issue Central Excise Registration Licence to the petitioner pursuant to the application dated 23.3.2009 without insisting for payment of outstanding dues of the earlier occupier M/s. Shri Pramukh Industries Private Limited
2.6) By an order dated 16.7.2009 passed in Civil Applications No.7450 and 7451 of 2009 filed in the captioned petitions, a Division Bench of this Court had granted interim relief directing the respondents No.2 and 3 to issue ad-hoc Central Excise Registration Licence to the petitioners forthwith pursuant to the applications dated 2.3.2009 and 23.3.2009 respectively, without insisting for payment of outstanding amount of the earlier occupier M/s. Shri Pramukh Industries Private Limited. It appears that pursuant to the interim order passed by this Court, the petitioners have been granted provisional registration under the Central Excise Act.
2.7) In response to the petition, affidavit-in-reply has been filed on behalf of the respondents No.2 and 3, wherein it has been pointed out that M/s. Shri Pramukh Industries Private Limited (hereinafter referred to as “the assessee”) was engaged in the manufacture of Hot Re-rolled Products. Vide order-in- original dated 30.9.2002, Central Excise duty of Rs.39,98,580/- and penalty of Rs.76,29,630/- had been imposed on it. Against the said order, the assessee preferred an appeal before the Commissioner (Appeals) which came to be dismissed by an order dated 15.10.2003. The assessee was registered under the BIFR vide Case No.183 of 2001 dated 23.12.2003, wherein an order came to be passed appointing Dena Bank, Ashram Road Branch, Ahmedabad as operating agency. The claim for recovery of the dues of the assessee has been lodged by the concerned Assistant Commissioner with Dena Bank vide letter dated 29.7.2004. The assessee by its letter dated 8.1.2008 informed that possession of the plot had been taken over by the G.S.F.C on 11.12.2007, which had decided to sell the property and in respect thereof, an advertisement had been given on 25.12.2007. Upon coming to know of the above, the Department approached the G.S.F.C, which in turn, informed the Department by a letter dated 15.1.2008 that it had exercised powers under section 29 of the State Financial Corporation Act, 1951 to liquidate the public money and had taken over the charged assets of the unit being a secured creditor of the unit. It was also informed that being a secured creditor, it had first charge to liquidate its dues from the charged properties and that if there was any surplus amount, after adjusting the Corporation's dues, the claim of the Department would be considered on merits. It is further stated in the affidavit that the assessee-M/s. Shri Pramukh Industries Private Limited had submitted an application dated 5.5.2009 for cancellation of its licence which was received by the respondents on 11.5.2009, however, the said application was sent without enclosing the original licence and without submitting required indemnity bond and, as such, the said licence had not been cancelled till date. According to the respondents, since one licence is in operation on the plot, another licence cannot be granted to any other person on the same plot. It is further the case of the respondents that though the petitioner has taken over the subject property from G.S.F.C through tender, it is to be treated as a successor of the business of M/s. Shri Pramukh Industries Private Limited. Also, the application for fresh Central Excise Licence of the petitioner is neither refused nor rejected but it is kept pending as in respect of such premises, a Central Excise Licence has been granted in the name of M/s. Shri Pramukh Industries Private Limited which has not been cancelled till date.
3) Mr. B. T. Rao, learned counsel for the petitioners submitted that the third respondent was not justified in refusing to grant registration to the petitioner inasmuch as the petitioner is not the successor of M/s. Shri Pramukh Industries Private Limited nor has it taken over the business of the said unit. Under the circumstances, the petitioner is not liable to pay the outstanding dues of the erstwhile owner. It was pointed out that M/s. India Steel Traders had purchased the subject property from the G.S.F.C pursuant to a tender notice issued by it. It was submitted that it is settled legal position as held by the Supreme Court in the case of Union of India Vs. SICOM Ltd., (2009) 2 SCC 151 that a debt which is secured or which by reason of the provisions of a statute becomes the first charge over the property having regard to the plain meaning of Article 372 of the Constitution of India must be held to prevail over the Crown debt which is an unsecured one. Thus, once the G.S.F.C, as a secured creditor has sold the subject property to M/s India Steel Ltd., the Central Excise Authorities cannot lay any claim to recover any outstanding dues in respect of the said property. The petitioner is, therefore, not liable to pay any of the outstanding dues of the previous occupier and that the respondents are not justified in insisting for payment of the outstanding amount of the previous owner as a condition precedent for granting registration.
4) Mr. Y.N. Ravani, learned senior standing counsel for the contesting respondents, reiterated the contents of the affidavit-in-reply filed on behalf of the respondents No.2 and 3. It was submitted that the petitioners, having purchased the assets of M/s. Shri Pramukh Industries Private Limited would be a successor of the business of M/s. Shri Pramukh Industries Private Limited as contemplated under the proviso to section 11 of the Central Excise Act. It was submitted that in the light of the proviso of section 11 of the Act, it is permissible for the Central Excise Authorities to recover the outstanding duty from a person who transfers or otherwise disposes of this business or trade in whole or in part, or effects any change in the ownership thereof, in consequence of which, such person is succeeded in such business or trade by any other person. It was further submitted that in respect of the subject land, a Central Excise Licence under the Central Excise Act has already been granted in favour of M/s. Shri Pramukh Industries Private Limited, which has not yet been cancelled. Under the circumstances, the applications of the petitioners for grant of Central Excise Licence had not been considered at the relevant time. Reliance was placed upon the decision of the Supreme Court in the case of Macson Marbles Private Limited v. Union of India, 2003 (158) E.L.T. 424 (S.C.) for the proposition that when an industrial unit is sold in terms of section 29 of the State Financial Corporation Act, 1951, such sale is deemed to be a sale made by the owner of the property. Hence, rule 230(2) of the Central Excise Rules would be attracted. The said Act though a special enactment would not prevail upon the Central Excise Act because the Central Excise Act is also a special enactment. It was submitted that in the light of the aforesaid decision, the petitioner would step into the shoes of M/s. Shri Pramukh Industries Private Limited and the provisions of section 11 of the Act would be squarely attracted.
5) Reliance was also placed upon the decision of the Bombay High Court in the case of Manibhadra Processors Vs. Additional Commissioner of Central Excise, 2005 (184) E.L.T 13 (Bombay) for the proposition that one and the same premises cannot be registered in the name of two different persons. The person holding earlier registration certificate must surrender its registration certificate in respect of the said premises, it is only then a new person can get registration in respect of the said premises. It was, accordingly, submitted that the action of the respondents in not granting registration certificate prior to the cancellation of the registration of M/s. Shri Pramukh Industries Private Limited, is thus legal and proper and does not warrant interference of this Court.
6) Another contention advanced by the learned counsel was that this is a pending case in relation to the recovery of the dues of the erstwhile unit, under the circumstances, the provisions of section 11E of the Act which provides for liability under the Central Excise Act, 1944 to be first charge on the property of the assessee, would be applicable to the present case and as such the contention that GSFC has a first charge over the subject property deserves to be rejected.
7) Mr. Rajesh Dave, learned counsel for the respondent No.4, Gujarat State Financial Corporation supported the case of the petitioner, and submitted that the GSFC having first charge over the subject property had sold the same to the petitioner for recovery of its dues, and as such the Central Excise authorities have no right or authority to seek to recover the outstanding dues of the erstwhile unit from the petitioners as the same would amount to recovery in respect of the same property after the same had already been sold for such purpose, which is not permissible in law. It was submitted, that therefore denial of registration by the Central Excise authorities is unjustified.
8) Before adverting to the merits of the case, it may be germane to notice certain significant facts emerging from the record. By an order-in-original dated 30.9.2002, central excise duty to the tune of Rs.39,98,580/- came to be confirmed against the erstwhile unit-M/s. Shri Pramukh Industries Private Limited with penalty of Rs.76,29,630/-. M/s. Shri Pramukh Industries Private Limited carried the matter in appeal before the Commissioner (Appeals), however, by an order dated 15.12.2003, the said appeal came to be dismissed on account of failure of the said appellant to make the pre-deposit in terms of the provisions of section 35F of the Act. M/s. Pramukh Industries Private Limited filed a reference with B.I.F.R under section 15(1) of the Sick Industrial Companies (Special Provisions) Act,1985 and was declared to be a sick industrial company in terms of section 3(1)(o) of the said Act. In the said proceedings, Dena Bank was declared as the operating agency. By a communication dated 25.7.2007, the Superintendent of Central Excise, Ahmedabad-II lodged a claim of Rs.39,98,580/- towards Central Excise duty and penalty of Rs.76,29,630/- plus interest. Thus, it appears that insofar as the assessee-M/s. Shri Pramukh Industries Private Limited is concerned, in the light of the fact that the said unit has been declared a sick industrial unit, the Central Excise Authorities were not in a position to recover the outstanding amount.
9) The G.S.F.C, a secured creditor, for the purpose of recovering its dues, issued a public advertisement for sale of the subject property belonging to the erstwhile owner M/s. Shri Pramukh Industries Private Limited by inviting tenders in this regard. The petitioner-M/s. India Steel Traders, being the highest bidder, its tender came to be accepted and the subject property came to be sold to it. Part of the property was leased to M/s. Jahan Steels Ltd. (the petitioner in Special Civil Application No.5193 of 2009). Both the petitioners, being desirous of setting up industrial units on the subject property, made applications seeking registration under the provisions of section 6 of the Central Excise Act read with Rule 9 of the Central Excise Rules. However, the said applications were not granted in view of the outstanding dues of the erstwhile owner.
10) In the present case, it is not the case of the petitioners that the respondents No.2 and 3 seek to enforce any recovery against them in respect of the dues of the erstwhile owner. However, central excise registration is being denied to them in view of the fact that the registration of the erstwhile owner has not been cancelled in view of its outstanding dues. The Central Excise authorities have, therefore, informed the petitioners that such application cannot be granted till the registration of the erstwhile owner stands and have requested the petitioners to provide indemnity bond for such dues. Thus, payment of the outstanding dues of the erstwhile unit appears to be a precondition for cancellation of its registration and it is only thereafter that the Central Excise authorities would consider the grant of registration licence to the petitioners.
11) Though no recovery is sought to be made against the petitioners as aforesaid, the respondents trace their right to recover such sums from the subject property to the provisions of section 11 of the Act. Insofar as such claim is concerned, the said issue is no longer res integra inasmuch as the Supreme Court in the case of Union of India v. SICOM Ltd., 2009(233) E.L.T. 433 (S.C.) has held that a debt which is secured or which by reason of the provisions of a statute becomes the first charge over the property having regard to the plain meaning of Article 372 of the Constitution of India must be held to prevail over the Crown debt which is an unsecured one. The court further held that the right of a State Financial Corporation under the State Financial Corporation Act, 1951 is a statutory one and the non obstante clause contained in section 46-B thereof shall prevail not only over the contract but also other laws. Under the circumstances, the G.S.F.C, having a first charge over the property in question, the same would prevail over the dues of the Central Excise Authorities. The contention that the proviso to section 11 of the Act would be applicable in the facts of the present case, therefore, does not merit acceptance inasmuch as the subject property, having been sold by the G.S.F.C for securing its dues as a secured creditor, the Central Excise Authorities cannot seek to recover the outstanding dues of the erstwhile owner from the said property once again.
12) However, on behalf of the respondents reliance has been placed on the provisions of section 11E of the Act for the purpose of contending that the Central Excise Authorities have first charge over the property of M/s. Shri Pramukh Industries Private Limited. The said section reads thus:
11-E. Liability under Act to be first charge.— Notwithstanding anything to the contrary contained in any Central Act or State Act, any amount of duty, penalty, interest, or any other sum payable by an assessee or any other person under this Act or the rules made thereunder shall, save as other- wise provided in Section 529-A of the Companies Act, 1956 (1 of 1956), the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993 (51 of 1993) and the Securitisation and Recon- struction of Financial Assets and the Enforcement of Security Interest Act, 2002 (54 of 2002), be the first charge on the property of the assessee or the person, as the case may be.
13) It has been contended that the said provision, though inserted vide of the Finance Act, 2011 (8 of 2011) with effect from 8.4.2011, would apply to pending proceedings which would include the proceedings of the present petitions and as such the said provision would be applicable to the subject property also. The said contention is fallacious for the reason that an amendment, though not retrospective in effect, would apply to pending proceedings provided the same is procedural in nature and does not affect substantive rights of parties. On a plain reading of section 11E of the Act, it is amply clear that the same is in no manner procedural in nature. The said provision is purely substantive in nature as the same creates a first charge as regards any amount of duty, penalty, interest, or any other sum payable by an assessee or any other person under the Act or the rules on the property of the assessee or the person.
14) At this juncture it may be germane to refer to certain decisions of the Supreme Court on the scope and ambit of an amending Act and its retrospective effect.
15) In Hitendra Vishnu Thakur v. State of Maharashtra, AIR 1994 SC 2623, the Supreme Court held thus:
“From the law settled by this Court in various cases the illustrative though not exhaustive principles which emerge with regard to the ambit and scope of an Amending Act and its retrospect- ive operation may be culled out as follows:
(i) A statute which affects substantive rights is presumed to be prospective in operation un- less made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a con- struction is textually impossible, is pre- sumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.
(ii) Law relating to forum and limitation is pro- cedural in nature, whereas law relating to right of action and right of appeal even though remedi- al is substantive in nature.
(iii) Every litigant has a vested right in sub- stantive law but no such right exists in proced- ural law.
(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or ob- ligations or to impose new duties in respect of transactions already accomplished.
(v) A statute which not only changes the pro- cedure but also creates new rights and liab- ilities shall be construed to be prospective in operation, unless otherwise provided, either ex- pressly or by necessary implication.”
16) In Ahmedabad Manufacturing and Calico Printing Co. Ltd. v. S.G. Mehta, Income-tax Officer, (1963) 48 ITR 154 (SC), the Supreme Court held thus:
“A statute which is not declaratory of a pre- existing law nor a matter relating to proced- ure but affects vested rights cannot be given a greater retrospective effect than its language renders necessary, and even in construing a section which is to a certain extent retrospect- ive, the line is reached at which the words of the section cease to be plain. These are well settled principles, and there is no reason to doubt their accuracy.”
17) In J.P. Jani, Income-tax Officer v. Induprasad Devshankar Bhatt, (1969) 72 ITR 595 (SC), a three Judge Bench of the Supreme Court held as follows:
“It was contended that Section 297(2)(d)(ii) of the new Act was wide in its sweep and it took in all assessment years after the year ending on 31st March, 1940 irrespective of the question whether the right to re-open the assessment in respect of any such assessment years was barred or not under the old Act at the date when the new Act came into force. According to Mr. Narasaraju the legislative intention was that once the new Act came into force, the question whether the as- sessment in respect of any assessment year after the year ending on 31st March, 1940 was li- able to be reopened or not should be decided with reference to the provisions of the new Act. It was argued that the new Act authorised such assessment to be reopened whatever might be the position in regard to the right to re-open such assessment under the old Act. In our opin- ion, the argument put forward by Mr Narasaraju is not warranted. It is admitted in this case that the right of the Income Tax Officer to re-open the assessment for the year 1947-48 was barred under the old Act before the new Act came into force. In our opinion it not permissible to con- strue Section 297(2)(d)(ii) of the new Act as re- viving the right of the Income Tax Officer to re- open the assessment which was already barred un- der the old Act. The reason is that such a con- struction of Section 297(2)(d)(ii) would be tan- tamount to giving of retrospective operation to that section which is not warranted either by the express language of the section or by neces- sary implication. In our opinion it not permiss-
ible to construe Section 297(2)(d)(ii) of the new Act as reviving the right of the Income Tax Of- ficer to re-open the assessment which was already barred under the old Act. The reason is that such a construction of Section 297(2)(d)(ii) would be tantamount to giving of retrospective operation to that section which is not warranted either by the express language of the section or by neces- sary implication. The principle is based on the well-known rule of interpretation that unless the terms of the statute expressly so provide or unless there is a necessary implication, retrospective operation should not be given to the statute so as to affect, alter or destroy any right already acquired or to revive any remedy already lost by efflux of time.
18) Applying the aforesaid principles to the facts of the present case, the GSFC at the relevant time had a first charge over the subject property as a secured creditor. In its capacity as a secured creditor, the GSFC sold the subject property to M/s India Steel Traders to recover the outstanding dues of the erstwhile unit. Thus, the right of the secured credit- or over the subject property stood exhausted much be- fore section 11E came to be inserted in the Act and the property stood vested in the buyer. As held by the Apex Court in the above decisions, retrospective operation should not be given to the statute so as to affect, alter or destroy any right already acquired or to revive any remedy already lost by efflux of time. Here, the petitioner had already acquired rights in the subject property much before section 11E was brought on the statute book. Under the circumstances, the said provision would not be applicable to rights which have crystallized prior to its insertion.
19) Apart from the fact that section 11E of the Act is not retrospective in operation, the contention that the present petition is a pending proceeding is also misconceived, inasmuch as the present petition arises on account of refusal of the Central Excise authorit- ies to grant registration to the petitioners and is not directed against any proceedings initiated by the Central Excise authorities under section 11 of the Act for recovery of the outstanding dues of the erstwhile unit from the petitioners.
20) As regards the contention that in respect of the same property, two parties cannot be granted Central Excise Registration, it may be germane to refer to the decision of this court in the case of Surat Metallics Ltd. & One v. Commissioner of Central Excise, Division-V, & one, rendered on 23.2.2001 in Special Civil Application No.8734 of 2010, wherein it has been held as under:
“27. As regards the refusal to grant registration under the provisions of the Central Excise Act to the petitioners in relation to the subject property on the ground that the same has been attached under rule 142 of the Customs Act on 29th December, 2004, as noted hereinabove, the lands in question having been sold to the petitioners, in exercise of powers under the Securitisation Act, any attachment made prior thereto would no longer survive. In any case, the attachment made in the year 2004 would not continue till the year 2009, in the absence of any further action having been taken by the respondent authorities under the relevant provisions of the Act and the rules. In case the Central Excise authorities were prevented from proceeding further pursuant to the attachment by any other reason, viz., by an order of a court of competent jurisdiction staying further proceedings, etc., the matter would stand on a different footing. But properties cannot be simply attached for years together without taking any further action. More so, in a case like the present one, where the Central Excise have permitted third party interests to be created. In the circumstances, the respondent No.1 was not justified in refusing to grant registration to the petitioners on the ground of attachment made under section 142 of the Customs Act, 1962.
28. Though not expressly stated in the order refusing registration, before the Court, on behalf of the respondent No.1, it has been contended that premises can be registered under the Central Excise Act only in relation to one person; that the defaulter M/s. Veenutex Dyeing & Printing Mills Private Limited having already been registered in relation to the subject premises, unless such registration is revoked and cancelled, registration cannot be granted to the petitioners in relation to the said property. Attention was invited to notification No.35/2001 C.E. (N.T.) dated 26th June, 2001 as amended from time to time, issued in exercise of powers under rule 9 of the Central Excise Rules, 2001 which provides for the conditions, safeguards and procedures for registration and exemption in specified cases. Reference was made to clause (2) thereof which says that if the person has more than one premises requiring registration, separate registration certificate shall be obtained for each of such premises; clause (4) thereof which says that where a registered person transfers his business to another person, the transferee shall get himself registered afresh as well as clauses (6) and (7) thereof which provide for de-registration and revocation or suspension of registration, to submit that on a conjoint reading of the said clauses it is apparent that unless registration in relation to the same premises granted to another person is revoked, no registration can be granted to another person in respect of the same unit as two persons cannot be simultaneously registered in respect of the same premises. In support of the said contention, the learned counsel had placed reliance upon a decision of the Bombay High Court in the case of Manibhadra Processors vs. Additional Commissioner of Central Excise (supra) wherein it has been held that one and the same premises cannot be registered in the name of two different persons. That the person holding earlier registration certificate must surrender registration certificate in respect of that premises, then only can a new person get registered in respect of that premises. However, on behalf of the petitioners, reliance had been placed upon a decision of the Bombay High Court in the case of Tata Metalliks Ltd. vs. Union of India and others, 2009 (234) E.L.T. 596 (Bom.) wherein the Court after considering the provisions of section 6 of the Act, Rule 9 of the Central Excise Rules, and the notification issued thereunder, has interalia held thus:
“7. A perusal of Section 6 makes it absolutely clear that who has to be registered is the pre- scribed person. Under the rules also, it is the person who has to get registered. The noti- fication in Clause (2) only sets out that if such registered person has more than one premises, then each of such separate premises would require registration certificate for each of such premises. In other words, it is the person who has to obtain separate registration certificate for each of the said premises. It is open to a person who has ceased to carry on the business to apply for deregistration. Would that mean in the absence of the person who has closed or sold the business or premises, applying for deregistra- tion, there is no jurisdiction to grant another person registration of the premises as in the case of a bona fide transferee for value or for that to the owner of the premises whose less- ee has defaulted in payment of excise dues. Section 6 and Rule 9 and the notification contem- plates that it is the person who must be re- gistered. Neither Section 6 nor Rule 9 and the Notification is a provision for enforcing the claim for dues of the department. That is contained in different provisions. An immovable property by itself cannot be sold unless the owner of the premises is defaulter and that too under a certificate as arrears of land revenue. That sale would be subject to the priority of claims. In case of a lease hold property given for a particular period, there would be no ques- tion of sale of the property except the limited interest. In our opinion, the case of bona fide transferee was not in issue in the case of M/s. Manibhadra Processors (supra) or the instances we have cited above. The Respondent No. 3 has there- fore, clearly acted without jurisdiction in re- fusing to grant registration on the specious plea that M/s. Usha Ispat whose assets has been sold and purchased by the Petitioners has not applied for deregistration. In the absence of a specific power to deny registration, the alternate would be whether there would be implied power. Neither section 6 or rule 9 or for that matter the no- tification confers such power. The right of rev- enue however, would subsist for recovery of dues both against the defaulter or the transferee if the predicates for recovery are met. An incid- ental aspect of the matter would be if the li- cence is for a particular period, on expiry of that period, the registration certificate would cease to be operative. In such cases, there would be no question of cancelling the certific- ate of registration.”
29. This Court is in agreement with the aforesaid view expressed by the Bombay High Court and as such, is of the opinion that merely because the defaulter unit, though it had ceased to carry on business on the premises in question, had failed to apply for de-registration, the same should not, in any manner, come in the way of the petitioners in obtaining central excise registration in respect of the premises in question. The stand adopted by the respondent authority that in respect of the same premises, two persons cannot be registered being contrary to the provisions of law, cannot be accepted.”
21) Thus, the said issue stands squarely covered by the aforesaid decision. Under the circumstances, for the reasons stated therein as reproduced hereinabove, the respondents are not justified in refusing to grant registration to the petitioners under section 6 of the Central Excise Act on the ground that the registration of the erstwhile owner has not yet been cancelled.
22) For the foregoing reasons, the petitions succeed and are, accordingly, allowed. Considering the fact that by virtue of the interim order passed by this Court, the petitioners have already been granted provisional Central Excise Registration Licence, the petitioners shall be entitled to grant regular Central Excise Registration Licence pursuant to the applications made by them without insisting for payment of outstanding amount of the earlier occupier M/s. Shri Pramukh Industries Private Limited. Rule is made absolute accordingly in each of the petitions with no order as to costs.
(AKIL KURESHI,J.)
Vahid
(HARSHA DEVANI,J.)