SARFAESI Act Has Overriding Effect on Central Excise Act; Dues of Secured Creditor Has Priority over Dues of Central Excise Dept.

Case: Punjab National Bank vs. Union of India

Coram: Justices L. Nageswara Rao and Vineet Saran

Case No.: CA 2196 OF 2012

Court Observation: “Thus, as has been authoritatively established by the aforementioned cases in general, and Union of India vs SICOM Ltd. (supra) in particular, the provisions contained in the SARFAESI Act, 2002, even after insertion of Section 11E in the Central Excise Act, 1944 w.e.f. 08.04.2011, will have an overriding effect on the provisions of the Act of 1944.”

“To conclude, the Commissioner of Customs and Central Excise could not have invoked the powers under Rule 173Q(2) of the Central Excise Rules, 1944 on 26.03.2007 and 29.03.2007 for confiscation of land, buildings etc., when on such date, the said Rule 173Q(2) was not in the Statute books, having been omitted by a notification dated 12.05.2000. Secondly, the dues of the secured creditor, i.e. the Appellant bank, will have priority over the dues of the Central Excise Department, as even after insertion of Section 11E in the Central Excise Act, 1944 w.e.f. 08.04.2011, and the provisions contained in the SARFAESI Act, 2002 will have an overriding effect on the provisions of the Central Excise Act of 1944”

Previous Posts

Service Tax – Exemption Notification Should Not Be Liberally Construed; Assessee Has To Show That He Comes Within Its Purview: Supreme Court

Financier Possessing Vehicle Based On Hire-Purchase Or Hypothecation Agreement Liable To Pay Tax Under U.P. Motor Vehicles Taxation Act: Supreme Court

Duration Of Blacklisting Cannot Be Solely Per Offence: Supreme Court Disapproves Guidelines Framed By Odisha Govt.

Pure Business To Business Disputes Cannot Be Construed As Consumer Disputes: Supreme Court

Section 138 NI Act – Prima Facie Indication That Complaint Is Filed By Authorized Person of Company Sufficient For Magistrate to Take Cognisance: Supreme Court

S. 50 Of NDPS Act- Presence Of Magistrate During Search Of Contraband Articles Not Mandatory If Accused Waives His Right: Delhi High Court Daily Judgement