Case Law Details
Commissioner of Central Tax Visakhapatnam – I Vs Tata Steel Limited (CESTAT Hyderabad)
Conclusion: Any orders passed beyond Tribunal’s vested powers would be non-est in law (invalid) and that these appeals had become infructuous due to the resolution plan’s approval, with no further issues for adjudication. Commissioner’s appeals were deemed abated with effect from May 15, 2018, and Tribunal dismissed the matter accordingly.
Held: Assessee-company acquired Bhushan Steel Limited through a resolution plan approved by the NCLT on May 15, 2018, as part of the Corporate Insolvency Resolution Process (CIRP). The appeals arose from multiple orders issued by the Commissioner of Customs, Central Excise, and Service Tax (Appeals). The Kolkata Bench of Tribunal had earlier ruled that similar appeals abate under Rule 22 of the CESTAT (Procedure) Rules, 1982, following the approval of a resolution plan. Revenue department argued that the same principle also covered the appeals under consideration in the Hyderabad Bench and should abate accordingly. Assessee sought an adjournment due to the unavailability of the designated lawyer but Tribunal declined the request citing the legal clarity established in earlier decisions by the Kolkata Bench and the Supreme Court, including Ghanshyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. The Kolkata Bench Tribunal referred to Rule 41 of the CESTAT (Procedure) Rules, which explained that the CESTAT became functus officio (lacking authority) once appeals abate. Revenue further argued that three of the appeals listed had already been withdrawn due to monetary limits and that the remaining appeals were no longer substantial. It was held that as clearly brought out in the Order of the Coordinate Bench vide Final Order No. 75665-75669/2024 dt.16.04.2024 and in view of Rule 22 and Rule 41 of the CESTAT (Procedure) Rule, 1982, these appeals would abate and after abatement of these appeals, the Tribunal would be rendered functus officio in the matters relating to these appeals and thus would not be able to decide any other issues connected with the said appeals.
FULL TEXT OF THE CESTAT HYDERABAD ORDER
Learned Advocate for the appellant, vide e-mail dt.16.12.2024, has requested for adjournment on the grounds that the Counsel, who was supposed to appear in respect of Appeals listed at Sl. No.4 to 12 in the cause list is not in a position to appear and therefore, they are seeking adjournment to another date, preferably after 10.02.2025.
2. On the other hand, learned AR for Revenue points out that the similar matter in respect of same appellant is covered in a recent decision of the Kolkata Bench of this Tribunal, whereby, they have decided that the appeals pending before the Bench at Kolkata Tribunal abates, in view of the factual matrix and the fact that the appellants – M/s Tata Steel Ltd., have taken over the company from Bhushan Steel Ltd, after NCLT has approved the Resolution Plan passed Order for abating the appeals. They have also considered the Hon’ble Apex Court’s decision in the case of Ghanshyam Mishra and Sons Pvt Ltd Vs Edelweiss Asset Reconstruction Company Ltd [2021 (4) TMI 613 – SC], as also SOP prescribed by CBIC dt.23.05.2022. It was also pointed out that though the learned Advocate has referred to matters posted at Sl.No.4 to 12 of the cause list, the three appeals out of the bunch of appeals have already been withdrawn by the Department on account of monetary limit. Therefore, what he is referring to is present appeals, which are pending before this Bench from Sl.No.4 to 9 today.
3. Since the issues involved are clear and covered by the order in their own appeal by Kolkata Bench, therefore, instead of adjourning the matter, we take up these appeals for final disposal on merits itself without adjourning the matter.
4. We have gone through the Order of the Coordinate Bench vide Final Order No. 75665-75669/2024 dt.16.04.2024 and find that the Bench had recorded that the appellant company underwent CIRP in terms of IBC, which culminated into approval of Resolution Plan of Bhushan Steel Ltd by the Adjudicating Authority at NCLT, Principal Bench at New Delhi. They have also considered the relevant clauses of the Resolution Plan and the fact that both sides viz., the appellant as well as the Revenue have no qualms over the impugned appeals being abated and having been rendered infructuous, in view of the above said developments. The Order of the Coordinate Bench in respect of the same appellant for other appeals pending before the said bench has held that in the facts of the case, all those appeals abate. In addition, they have also gone through plethora of case laws, etc., keeping in view some of the other arguments concerning refund of pre-deposits, etc., and came to the conclusion that any order passed by the Tribunal beyond the vested power would ipso facto be non-est in law. The Order passed by the Tribunal at Para 37 is reproduced for ease of reference:-
“37. In all the above cases, the Tribunal has consistently held that the appeal abated (once the IRP is appointed and Resolution Plan approved) as per Rule 22 of the CESTAT (Procedure) Rules, 1982 and that is the only relief / Order that could be passed as prescribed under the Rules.
Thus, any order passed by the Tribunal beyond the vested powers would ipso facto be non-est in law.”
5. Therefore, in view of the settled legal position, as clearly brought out in the Order of the Coordinate Bench dt.16.04.2024 and in view of Rule 22 and Rule 41 of the CESTAT (Procedure) Rule, 1982, we are of the view that these appeals would abate and after abatement of these appeals, the Tribunal would be rendered functus officio in the matters relating to these appeals and thus would not be able to decide any other issues connected with the said appeals.
6. Therefore, these appeals abate with effect from the date of approval of Resolution Plan by the NCLT vide its Order dt.15.05.2018 and are disposed of accordingly.
(Dictated and pronounced in the Open Court)
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