2014 (3) TMI 242 - AT - Central Excise

Continuance of proceedings after death or adjudication as an insolvent of a party to the appeal or application - company under liquidation - Rule 22 of the CESTAT Procedure Rule - Held that - when an appeal or an application is filed by a company and same is being wound up, the appeal or application shall abate unless an application is made for continuance of such proceedings by or against the successor in interest, the executor, administrator, receiver, liquidator or other legal representative of the appellant or applicant or respondent, as the case may be. In this case, from the order of Hon ble Allahabad High Court, it is clear that the appellant company is being wound up and official liquidator has been appointed. But, since no application for continuance of the proceedings has not been received from the official liquidator in accordance with the Rule 22 of the CESTAT Procedure Rules, all these appeals, stay applications and miscellaneous applications filed by the appellant company M/s DSM Sugar shall be treated as abated in terms of Rule 22 of the CESTAT Procedure Rules. The department can present its claim of Revenue against the appellant before the official liquidator and the official liquidator, is also, at liberty to file applications before this Tribunal for restoration of the appeals and stay applications and their continuance.

Summary

Issues:
Appeal against duty demands upheld by Commissioner and CCE (Appeals) - Abatement of proceedings due to company winding up - Legal implications of BIFR and High Court orders - Rule 22 of CESTAT Procedure Rules - Representation by official liquidator - Separate appeals by employees challenging penalties.

Analysis:
The judgment involves appeals against duty demands upheld by the Commissioner and CCE (Appeals), which have been filed by the appellant company. These appeals, along with stay applications, are against multiple orders, each specifying duty amounts and penalties. The Tribunal had previously directed pre-deposit of 50% of the duty demand, which was challenged in the High Court resulting in a remand to the Tribunal for a fresh decision. The company is under the purview of BIFR, and stay applications are being considered for the first time, with miscellaneous applications for additional evidence and early hearing.

The appellant's legal representative informed the Tribunal that due to a High Court order for liquidation of the company, he no longer represents the appellant. The Joint CDR highlighted Rule 22 of the CESTAT Procedure Rules, suggesting that since the company is in the process of winding up, all appeals and applications should be abated unless continued by the official liquidator. The BIFR order recommended winding up of the company, and the High Court directed for liquidation and official possession of assets by the official liquidator.

Rule 22 of the CESTAT Procedure Rules mandates that when a company is being wound up, proceedings shall abate unless continued by the legal representative or successor in interest. As no application for continuation has been received from the official liquidator, all appeals and applications by the appellant company are deemed abated. The department can present claims to the official liquidator, who may seek restoration of the appeals and applications. Separate appeals by employees challenging penalties will be addressed separately.

In conclusion, the judgment addresses the abatement of proceedings due to the company's winding up, as per Rule 22 of the CESTAT Procedure Rules, and the legal implications of the BIFR and High Court orders regarding liquidation. It clarifies the necessity of representation by the official liquidator for continuation of legal proceedings and provides for separate consideration of appeals by employees challenging penalties.