Assistant Commissioner CGST & Central Excise Vs Pradeep Kabra (NCLAT Delhi)
In the case of Assistant Commissioner CGST & Central Excise Vs Pradeep Kabra, the NCLAT Delhi dealt with a challenge by the Assistant Commissioner, CGST and Central Excise, Kadi Division, against the approval of the Resolution Plan for the corporate debtor, M/s. Cengres Tiles Limited. The appellant argued that its claim of Rs. 11.76 crore, arising under the Central Excise Act, should have been treated as a secured debt, entitled to higher payment in the Resolution Plan, similar to other secured creditors. However, the tribunal rejected this claim, affirming that the dues under the Central Excise Act are considered operational debts and not secured debts under the Insolvency and Bankruptcy Code (IBC).
The tribunal referred to several legal precedents, including the Supreme Court’s ruling in Rainbow Papers Ltd. and earlier NCLAT decisions, to emphasize that claims under Section 11E of the Central Excise Act and similar provisions are not categorized as secured debts in insolvency proceedings. The key distinction is that these provisions carve out exceptions related to the treatment of government dues under IBC, making such claims operational rather than secured. The tribunal also noted that the appellant’s claim was treated according to the operational debt guidelines under Section 30(2)(b) of the IBC, and the Resolution Plan complied with the legal framework, rejecting any claim for special treatment. As a result, the appeal was dismissed, upholding the resolution plan as approved by the Adjudicating Authority.
