Allowed

The Mah State Co-Op Bank Ltd. v. the Union of India and Ors.

Bombay HC30 Aug 2012WP/2581/2012

Case brief

AI extract

What is this about?

Petitioners challenged the attachment of sugar bags by the Excise department while they were already in the bank's possession under the Securitisation Act. The court held the excise department's action unsustainable and allowed the petitions.

What did the court decide?

Impugned order of attachment quashed and set aside; subsequent attachment proceedings set aside; rule made absolute.

The Mah State Co-Op Bank Ltd. Vs the Union of India and… — Banking and Recovery | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY, BENCH AT AURANGABAD

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WRIT PETITION NO. 2581 OF 2012

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The Maharashtra State Co-operative Bank Ltd Mumbai Pay Office at Nanded through its Assistant Manager Shri Ramrao Kisanrao Lokhande aged 48 years, occ. service r/o Nanded, Tq. & Dist. Nanded.

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.. PETITIONER

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VERSUS

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The Union of India through its Secretary Excise and Affairs New Delhi.

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The Superintendent of Central Excise, Customs and Service Tax First Floor, Padile Complex, Near S.T. Workshop, Ambajogai Road Latur Range, Latur, Tq. & Dist. Latur.

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M/s Jay Jawan Jay Kisan Sahakari Sakhar Karkhana Ltd. Nalegaon Tq. Chakur. Dist. Latur. through its Managing Director. .. RESPONDENTS

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Mr. Sandeep Gorde Patil, advocate for petitioner. Mr. S. K. Tambe, AGP for the State. Mr. Alok Sharma, Standing Counsel for respondent nos. 1 and 2. Mr. V. G. Sakolkar, advocate for respondent no. 3.

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WITH

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WRIT PETITION NO. 357 OF 2012

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The Maharashtra State Co-op. Bank Ltd. Mumbai having its registered office at 9, Maharashtra Chambers, Commerce Lane, Mumbai 23 through its Deputy Manager Shri Rajendra Hari Patil

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age 48 years, occ. service as Dy. Manager r/o Plot No. 3, Sector ‘E’, Bombay Agra High Way, Nasik, Tq. & Dist. Nasik.

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.. PETITIONER

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VERSUS

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The Union of India 2. The Superintendent Central Excise and Customs, Plot No. 1, Shastri Colony, Dhondaicha, Sindhkheda Dist. Dhule. 3. The Assistant Commissioner Central Excise and Customs Bendre Tower, near Ichhadevi N.H. No. 6, Bhusawal Road, Jalgaon. 4. Pushpa Danteshwar Sahakari Sakhar } Deleted as per order karkhana Ltd. Shamsherpur } dated 28-3-2012. Tq. & Dist. Nandurbar } Through its Managing Director }

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Mr. Sandeep Gorde Patil, advocate for petitioner. Mr. S. K. Tambe, AGP for the State. Mr. Alok Sharma, Standing Counsel for respondent nos. 1 to 3.

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=====

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CORAM : R.M. BORDE & S. S. SHINDE, JJ. DATE : 30^th AUGUST, 2012.

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ORAL JUDGMENT : ( PER R. M. BORDE J.)

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Heard.

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Rule. Rule made returnable forthwith. With the consent of the parties,

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both the petitions are taken up for final disposal at admission stage.

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Action of attachment of sugar bags belonging to the concerned sugar factory by respondent Central Excise department for recovery of excise dues is subject matter of challenge in these petitions.

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It is the contention of petitioner that sugar bags are already attached and are in custody of petitioner / bank. Banks had advanced loan to the concerned sugar factory and since the factory failed to repay the same, action was taken under the provisions of Securitisation Act and the sugar bags in dispute are attached and are in custody of petitioners / banks. Subsequent action by respondent / excise department of attachment of sugar bags belonging to concerned sugar factory for recovery of excise dues is not permissible in view of the judgment of the Apex Court in the matter of Tata Metaliks Limited and another Vrs. Union of India and others reported in 2008(4) BCR 853 . Reliance

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is also placed on a judgment delivered on 25-3-2010 in Writ Petition No. 920/2009.

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Heard submissions advanced by learned counsel for respective parties.

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Mr. Alok Sharma, Standing Counsel for respondent / Excise department submits that in view of provisions of section 11E of the Central Excise Act,

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1944, the provisions of Excise Act shall have an over-riding effect over the provisions contained in any other Central Act or the State Act and, as such, the action taken by department is in consonance with the amended section 11E of the Central Excise Act, 1944. Perused provisions of section 11E of the Act which reads thus :

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SECTION 11E : 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 otherwise provided in section 529A 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 Reconstruction 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.

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. Even on perusal of provisions of section 11E of the Act, the action is unsustainable for the reason that provisions of Central Excise Act have overriding effect over any other Central Act or State Act, save as otherwise provided in section 529A of the Companies Act, 1956, Recovery of Debts Due to Banks and the Financial Institutions Act, 1933 and Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002.

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In the instant matter, the sugar bags are taken in custody by petitioner /

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bank in pursuance to the action initiated under the Act (54 of 2002 ). In this

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view of the matter and considering the law laid down by Apex Court in the matter of Tata Metaliks Limited and another vs. Union of India and others, the impugned action of attachment of sugar bags is unsustainable. Petitions are therefore allowed. Impugned order passed by respondent / department stands quashed and set aside. Subsequent action taken by respondent / department attaching sugar bags is also set aside. Rule is accordingly made absolute. In the facts and circumstances of the case, there shall be no order as to costs.

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Pending civil application, if any, does not survive and stands disposed

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of.

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( S. S. SHINDE, J. ) ( R. M. BORDE, J. )

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dyb

The Mah State Co-Op Bank Ltd. v. the Union of India and Ors.

Case brief

What is this about?

What did the court decide?

The Mah State Co-Op Bank Ltd. v. the Union of India and Ors.

Case brief

What is this about?

What did the court decide?

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