Case Law Details
Neoteric Infomatique Ltd. Vs Commissioner of Customs (Air) (CESTAT Chennai)
Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, dismissed the customs appeal filed by Neoteric Infomatique Ltd. following the approval of its resolution plan by the National Company Law Tribunal (NCLT). The tribunal ruled that once an adjudicating authority under the Insolvency and Bankruptcy Code (IBC) has approved a resolution plan, pending appeals related to the company’s liabilities stand abated. This decision aligns with the Supreme Court ruling in Ghanashyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Co. Ltd. (Civil Appeal No. 8129 of 2019, judgment dated 13.04.2021).
The appellant had challenged an order by the Commissioner of Customs, Chennai. However, records indicated that the NCLT had approved the resolution plan and appointed an office liquidator. Under established legal principles, once the resolution plan is approved, all pending claims against the corporate debtor, including customs duty appeals, are extinguished unless explicitly provided for in the resolution plan. The tribunal cited multiple precedents, including Orchid Chemicals & Pharmaceuticals Ltd. vs. Commissioner of GST & Central Excise, Chennai (Final Order No. 40066 of 2024) and Jet Airways (India) Ltd. vs. Commissioner of Service Tax, Mumbai (Final Order No. A/85897/2023), which affirmed the abatement of such appeals.
CESTAT noted that the appellant itself had sought closure of the appeal due to the resolution plan’s approval. Given this, and in accordance with past rulings, the tribunal upheld the position that customs duty appeals are not maintainable once an NCLT-approved resolution plan is in place. This ruling reiterates that the provisions of the IBC override conflicting claims under customs and excise laws post-resolution approval.
The decision underscores the impact of insolvency proceedings on pending litigation in various forums, reaffirming the Supreme Court’s stance that no claims or liabilities can be pursued against a company once it undergoes resolution under the IBC framework. The tribunal’s ruling provides clarity on the legal position for similar pending appeals, reinforcing the finality of NCLT-approved resolution plans in insolvency matters.
FULL TEXT OF THE CESTAT CHENNAI ORDER
These appeals are filed by the Appellant passed by Commissioner of Customs, Chennai.
2. Heard Shri Madan G., Ld. Advocate for the Appellant and Shri Sanjay Kakkar, Ld. Dy. Commissioner for the Respondent.
3. We find from the records that the NCLT had accepted the Resolution Plan and Office Liquidator has been appointed. Hence, the present appeals could not survive, since the appeals would stand abated, in view of the decision of the Hon’ble Apex Court in the case of Ghanashyam Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd. & Ors. (Civil Appeal No.8129 of 2019) vide judgement dated 13.04.2021.
4. We find that the CESTAT Benches have been consistently holding the abatement of appeals, wherever the Resolution Plan is shown to have accepted by the Adjudicating Authority, including Chennai Bench, in the case of M/s. Orchid Chemicals & Pharmaceuticals Ltd., Vs. Commissioner of GST & Central Excise, Chennai. This appeal in its Final Order No.40066 of 2024 dated 18.01.2024, has followed an earlier Order of Mumbai Bench of CESTAT, in the case of M/s. Jet Airways (India) Ltd. Vs. Commissioner of Service Tax, Mumbai & Anr., in Final Order No.A/85897/2023 dated 12.05.2023. Moreover, the present appeal is filed by the appellant-assessee, who is praying for the closure of appeal in view of their resolution plan being accepted by the NCLT.
5. Respectfully, therefore following the above ratio of the coordinate Bench, we hold that the present appeals shall also stand abated. The appeals filed by the Appellants are disposed of accordingly.
(Order dictated and pronounced in open court)
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