JUDGMENT :

VINEET SARAN, J.

1. The present Civil Appeal arises out of the judgment and order dated 05.08.2008 passed by the Allahabad High Court, wherein the writ petition filed by the Appellant was dismissed in limine.

2. The brief facts of the case, relevant for the purpose of the present appeal, are that the Commissioner, Customs and Central Excise, Ghaziabad (Respondent No. 2) issued a show cause notice dated 31.12.1996 to M/s Rathi Ispat Ltd. Respondent No. 4 (for short “RIL”) for evasion of excise duty and violation of the Central Excise Act, 1944. By an order dated 25.11.1997, Respondent No. 2 confirmed an excise duty demand of Rs. 6,97,62,102/- against RIL and imposed a penalty of Rs. 7,98,03,000/- under Rule 173Q(1) and confiscated the land, building, plant and machinery of RIL under Rule 173Q(2) of the Central Excise Rules, 1944 (for short “1944 Rules”). Sub-Rule 2 of Rule 173Q of the Central Excise Rules, 1944, came to be omitted by a notification dated 12.05.2000 issued by the Government of India. Subsequently, the order dated 25.11.1997 was set aside by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT), now known as the Customs Excise and Service Tax Appellate Tribunal (CESTAT), on the ground of violation of principles of natural justice, and the matter was remanded back for de novo proceedings.

3. In 2005, RIL availed credit facilities under various schemes from the consortium of banks, with the Appellant/Punjab National Bank as the lead bank, and mortgaged/ hypothecated all its movable and immovable properties for securing the loan. RIL created a charge on both the assets (raw material, stock in progress, finished goods, receivables etc.) and block (land, building, plant, machinery and other fixed assets) of the company in favour of the Appellant bank.

4. Subsequently, the Commissioner Customs and Central Excise, Ghaziabad vide order dated 26.03.2007, confirmed the demand of excise duty of Rs. 7,98,02,226/- and a penalty of Rs. 7,98,03,000/- on RIL. The Commissioner also ordered, under rule 173Q(2) of the 1944 Rules, for the confiscation of all the land, building, plant, machinery and materials used in connection with manufacture and storage.

5. The Central Excise Commissioner, vide another order dated 29.03.2007, confirmed a demand of central excise duty amounting to Rs. 2,67,00,348/- and Rs. 74,24,332/- from RIL. The Commissioner also imposed a penalty of Rs. 3,41,24,680/- and further, under rule 173Q(2) of the 1944 Rules, ordered confiscation of land, building, plant, machinery, material, conveyance etc. of RIL that were used in connection with manufacture, production, storage or disposal of goods.

6. However, in light of the fact that RIL had defaulted in clearing the loan amount and had failed to liquidate outstanding dues, the Appellant bank, on 02.08.2007, issued notice to RIL under section 13(2) of the SARFAESI Act, 2002, further, notice was issued to RIL under section 13(4) of SARFAESI Act, 2002.

7. In light of the section 13(4) notice, the Office of the Assistant Commissioner, Customs and Central Excise Division informed the bank, vide a letter dated 27.11.2007, that the property was already confiscated by virtue of Rule 173Q(2) of 1944 Rules and that an appeal is pending against the orders and the matter is sub-judice. Appellant bank r