Case Law Details
Ruchi Soya Industries Ltd. Vs Union of India (Madras High Court)
Conclusion: Once a resolution plan was duly approved by the Adjudicating Authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The case was therefore remitted back to the respondent to await clarification to be obtained by assessee from the NCLT as to whether the Corporate Resolution Plan filed by the Corporate Applicant included the “customs duty” to be paid by assessee on the import under the subject bill of entry.
Held: Assessee-company had filed the above Bill of Entry in advance to clear the consignment of crude palm oil of edible grade in bulk. In the Bill of Entry, it had proposed to pay Basic Customs Duty (BCD) at 7.5% as per Serial No.55 to Notification No. 12/2012-Customs dated 16.3 .2012 as it stood on 15.09.2015. However, after the import and at the time when the said Bill of Entry was taken up for assessment, Serial No.55 to Notification No.12/2012-Customs dated 17.3.2012 was amended vide Notification No.46/2015-Customs dated 17.9.2015 which had increased the rate of Basic Customs Duty ( BCD) to 12.5% from 7.5%. The issue arose for consideration was that the amendment to Serial No. 55 to Notification No.12/2012-Customs dated 17.3.2012vide Notification No. 46/2015- Customs dated September 17, 2015 which increased the rate of duty from 7.5% to 12.5% could not be said to have come into force on the date of assessment on March 17, 2012 as per the Section 25 of the Customs Act, 1962 as it stood on the date. Also, assessee was under the provisions of the Insolvency and Bankruptcy Code, 2016 during the pendency of the present writ petition. National Company Law Tribunal, Mumbai had appointed an Interim Resolution Professional (RP) and that RP filed M.A.No. 1721/2019 under Section 30 (6) of the aforesaid Code for approval of the Corporate Resolution Plan submitted by a Consortium led by Patanjali Ayurvedic Ltd as Corporate Application as approved by the members of the Committee of Creditors (COC). Assessee contended that RP called upon the creditors of assessee to submit their claims and since the Customs Department did not come forward to participate in the said proceedings before the National Company Law Tribunal, Mumbai, it had lost all its rights as they stood extinguished. It was held that once a resolution plan was duly approved by the Adjudicating Authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; The case was therefore remitted back the respondent to await clarification to be obtained by assessee from the NCLT as to whether the Corporate Resolution Plan filed by the Corporate Applicant included the “customs duty” to be paid by assessee on the import under the subject bill of entry. Assessee should therefore file an appropriate application before NCLT the National Company Law Board and get the issue clarified from NCLT that the indeed crown debts like the differential “ customs duty” payable to respondent under the subject bill of entry were treated as “operational debt” before it by the “ corporate applicant” . During the period of next 180 days from the date of the receipt of this Order, the respective parties are to maintain status quo as on date as far as demand of duty confirmed under the subject bill of entry was concerned. The respondents should proceed to recover and/or remit the duty as the case may be at the expiry of 180th day from the date of receipt of this Order. In case, assessee produced appropriate clarification from NCLT within such time, recovery shall be subject to such terms. If assessee failed to get any clarification from NCLT within such time, the respondents should proceed to recover the amount of duty short paid under the subject bill of entry together with interest from assessee in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
In the present writ petition, the petitioner has challenged the reassessment of the Bill of Entry No. 2606926 dated 15.9.2015. It is the case of the petitioner that the amendment to Serial No. 55 to Notification No. 12/2012-Customs dated 16.3 .2012 vide Notification No.46/2015-Customs dated 17.9.2015 which increased the rate of duty from 7.5% to 12.5% cannot be said to have come into force on the date of assessment on 17.3.2012 as per the Section 25 of the Customs Act, 1962 as it stood on the date.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
