2024 (6) TMI 1043 - AT - Customs

Continuation of appeal after Order of NCLT approving the resolution plan has been passed - Rule 22 of CESTAT (Procedure) Rules 1982 - HELD THAT - The Mumbai Bench of this Tribunal in the case of M/s. Alok Industries Ltd s case 2022 (10) TMI 801 - CESTAT MUMBAI analysed in detail Rule 22 of CESTAT (Procedure) Rules 1982 and observed that aforesaid Rule 22 should be applicable the moment the successor interest with sufficient rights is appointed by NCLT to make an application for continuation of the proceeding. In the appellant s own case the Hon ble Gujarat High Court in R/Tax Appeal No. 32 of 2019 2022 (8) TMI 1459 - GUJARAT HIGH COURT taking note of the judgments on the subject including that of Hon ble Supreme Court in Ghansyam Mishra s case 2021 (4) TMI 613 - SUPREME COURT held that in such circumstances the appeal abates. As observed by the Hon ble Supreme Court and High Courts in a catena of cases that the Tribunal is a creature of the statute; it cannot travel beyond the express powers vested under the Statute or Rules framed under the statute while deciding a statutory Appeal filed before it against the Orders of the prescribed statutory authorities mentioned under the statute. The corollary any order passed by the Tribunal beyond the vested powers under the statute would be non-est in law. The appeal abates once the IRP is appointed and/or Resolution plan approved. Consequently this appeal abates as per Rule 22 of CESTAT (Procedure) Rules 1982 and this is the relief/Order could be passed as prescribed under the said Rule.

Summary

Issues:
Whether the appellants are entitled to continue with the Appeal and claim relief after the Order of NCLT approving the resolution plan has been passed.

Analysis:
The appeal was filed against the Order-in-Original No.1/2012-Commr. dated 31.7.2012 by the Commissioner of Customs, Mangalore. The appellant contested the Order of the Commissioner under Section 129A of the Customs Act, 1962. However, during the pendency of the appeal, Standard Chartered Bank initiated Corporate Insolvency Resolution Process (CIRP) against the appellant as the Corporate Debtor, leading to the approval of the Resolution Plan by the NCLT on 24.07.2019. Subsequently, the appellants filed a miscellaneous application before the Tribunal, citing the abatement of the appeal post the NCLT's approval of the Resolution Plan.

The main issue revolved around whether the appellants could continue with the appeal and claim relief after the NCLT approved the resolution plan. The Rule 22 of CESTAT (Procedure) Rules, 1982 was crucial in determining the abatement of the appeal post the NCLT's approval. The Mumbai Bench of the Tribunal in a previous case highlighted that Rule 22 becomes applicable once the successor interest with sufficient rights is appointed by the NCLT to continue the proceedings. In the absence of such an application by the successor interest, the appeal stands abated as per the Rule.

The Tribunal, along with other Benches, reiterated that appeals abate as per Rule 22 of the CESTAT Procedure Rules, 1982, upon the approval of the resolution plan by the NCLT. The Hon'ble Gujarat High Court also upheld the abatement of appeals in similar circumstances. It was emphasized that the Tribunal's powers are limited to those vested under the statute or rules framed under the statute. Any order passed beyond these powers would be legally non-existent. Therefore, the Tribunal concluded that the appeal abates once the Insolvency Resolution Professional (IRP) is appointed and/or the Resolution plan is approved, in line with Rule 22 of CESTAT (Procedure) Rules, 1982.

In conclusion, the Tribunal held that the appeal abates post the approval of the Resolution Plan by the NCLT, in accordance with Rule 22 of CESTAT (Procedure) Rules, 1982. The consistent view expressed by the Tribunal and the legal framework supported the abatement of the appeal, leading to the dismissal of the appellant's claim for relief.