Case Law Details
Assistant Commissioner of Central Tax Vs Sreenivasa Rao Ravinuthala (NCLAT Chennai)
NCLAT Chennai held that dues under ‘Central Excise Act, 1944’ would have first charge only after the dues under the Provisions of the Code are recovered. Accordingly, application against approved Resolution Plan dismissed as Resolution Plan meets requirement of Section 30(2) of the Code.
Facts- Challenge in this Appeal is to the Impugned Order passed by National Company Law Appellate Tribunal, Hyderabad Bench, allowing the Application preferred by the Resolution Professional of the Corporate Debtor Company, seeking approval of the Resolution Plan of ‘M/s Renganayaki Agencies’.
The Appellant challenges the approval of the Resolution Plan on the ground that the Corporate Debtor owes Rs. 22,60,32,948/- towards default in payment of Central Excise Duty, interest and penalty as per Central Excise Returns filed with the Appellant Department. As per the Resolution Plan, only 13% has been earmarked towards Government dues, and the Financial Creditor is getting 44.5% of the Claim amounts and the other Operational Creditors are getting 0.51% of their Claim amounts, which is stated to be unfair.
Conclusion- Held that the Master Circular No.1053/02/2017-CX, issued by the Ministry of Finance, Department of Revenue, Central Board of Excise and Customs specifies that dues under ‘Central Excise Act, 1944’ would have first charge only after the dues under the Provisions of the Code are recovered.
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