( 1 ) THIS writ petition is filed for a Writ of Mandamus declaring the order of the 1st respondent dated 21-2-1994 as illegal, arbitrary and unjust.

( 2 ) THE facts in brief are as follows: one M/s. Dakshin Fabrics Ltd. , has taken a loan from A. P. Industrial development Corporation, a financial institution. Since there was default in payment of loan the unit of Dakshin Fabrics Ltd. , was brought to sale under section 29 of the State Financial Corporations Act, 1951 on 4-2-1992. The petitioner participated in the auction and became the highest bidder and the sale was knocked down in his favour on 30-3-1992. The A. P. Industrial development Corporation confirmed the sale in favour of the petitioner for rs. 76. 00 lakhs and had issued proceedings to the said effect. On 31-3-1992 the petitioner paid Rs. 15. 20 lakhs being 20% of the sale price. The petitioner was effecting repairs to the plant and machinery after taking possession of the same. On 21-2-1994, the 1st respondent Assistant Collector of Customs and Central Excise issued notice to the petitioner under Rule 230 (2) of Central excise Rules, 1944 requiring the petitioner to pay a sum of Rs. 4,40,159. 23 ps. in terms of adjudication Order No. 4/90, dt. 9-3-1990 which was payable by m/s. Dakshin Fabrics Ltd. Again on 13-6-1994 the Superintendent of Central excise detained the plant and machinery of M/s. Dakshin Fabrics Ltd. , on the ground that it has to pay a sum of Rs. 8,27,792. 10 ps. in terms of adjudication order Nos. 4/90, dated 9-3-1990 and 79/90, dated 11-11-1990. Aggrieved by the orders of adjudication and also the order of demand dated 21-2-1994 and 13-6-1994 the present writ petition is filed.

( 3 ) THE Central Excise authorities have also written a letter to A. P. Industrial development Corporation not to handover the unit to the petitioner on the ground that M/s. Dakshin Fabrics Ltd. has to pay a sum of Rs. 3,76,50,083. 85 ps. in terms of adjudication order No. 50/96.

( 4 ) THE 2nd respondent M/s. A. P. Industrial Development Corporation has filed a counter-affidavit stating that under Section 29 of the State Financial corporations Act, the 2nd respondent-Corporation has a statutory right to transfer by way of sale and realise the property hypothecated by the company in case of default in repayment of loan advanced to it by the Corporation. The entire property of M/s. Dakshin Fabrics comprises of land, plant, machinery, assets and the goods manufactured have been mortgaged to the corporation as security for the repayment of loan. Since the company committed default in payment of loan the Corporation sold the mortgaged property under Section 29 of the State Financial Corporations Act to Mr. Sithani on as is where is basis. The petitioner-company has not paid the entke sale consideration as per conditions of sale agreement.

( 5 ) UNDER Section 11 of Central Excises and Salt Act the Central Government may recover the Central Excise dues from any person by attachment and sale of excisable goods belonging to such person as if it were an arrears of land revenue from the said person. Since M/s. Dakshin Fabrics was stated to be the defaulter of excise levy the 1st respondent can recover the same by attachment and sale of excisable goods of Dakshin Fabrics. Since the unit has been sold to the petitioner-company M/s. Dakshin Fabrics ceases to be its owner. Hence the 1st respondent has no power to attach the goods of the petitioner-company. Rule 230 of Central Excise Rules of 1944 empowering the attachment of excisable goods in possession of person succeeding the original owner exceeds the scope of Section 11 of Central Excise Act. Further section 11 of the Central Excise Act contemplates attachment and sale of excisable goods only, whereas Rule 230 empowers the authorities to sell the plant, machinery and other assets of the company. The rule is therefore ultra vires of Section 11 and cannot be relied upon.

( 6 ) THE 1st respondent-Assistant Collector