2022 (11) TMI 39 - AT - Central Excise

Recovery of dues - existence of dues as per the resolution plan approved by NCLT or not - HELD THAT - From the terms of the resolution plan approved by the NCLT, it prima facie appears that the appellant is not liable to pay any dues. However, this tribunal is not competent to decide regarding the recovery of any dues. It is the department who has to decide whether any dues is recoverable or otherwise, in the light of the resolution plan approved by the NCLT. As per the resolution plan approved by the NCLT and in the light of Hon ble Supreme Court judgment in the case of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR ORS. 2021 (4) TMI 613 - SUPREME COURT , it prima facie appears that the adjudged dues cannot be recovered by the department however, this issue has to be decided by the department and not by this tribunal. For this reason, that firstly, there is no provision made in the Customs and Central Excise Act to give effect of NCLT proceedings. This tribunal being creature under the Customs Act, even though the Insolvency and Bankruptcy Code have over riding effect over all the other acts, in absence of any explicit provision under the Customs/Central Excise Act, this tribunal cannot decide finally whether the adjudged amount can be recovered by the department or otherwise. This issue has to be resolved by the respondent. The appeals became infructuous and is dismissed - the Central Board of Indirect Taxes Customs may consider issuing guideline/procedure for dealing with the case before this tribunal wherein, against the assesse s company IBC proceeding has been initiated.

Summary

Issues:
1. Interpretation of NCLT order and its impact on recoverability of dues under Central Excise Act, 1944.
2. Competence of the tribunal to decide on recovery of dues based on NCLT proceedings.
3. Disposal of appeals due to NCLT order extinguishing government dues pre-08.03.2019.
4. Lack of guidelines for revenue-department in cases of IBC proceedings.

Analysis:
1. The judgment involves the interpretation of a resolution plan approved by NCLT, where the applicant argued that no dues exist post-approval. The department contended that the Central Excise Act lacks provisions for setting aside demands based on NCLT proceedings.

2. The tribunal acknowledged the NCLT order extinguishing pre-08.03.2019 government dues. However, it emphasized its inability to conclusively determine the recoverability of dues, stating that the department must decide based on the resolution plan and Supreme Court precedents.

3. As a result of the NCLT order's impact on government dues, the appeals were deemed infructuous and dismissed. Parties were granted liberty to revive the appeals for further consideration if no amicable resolution is reached.

4. The judgment highlighted the absence of guidelines for the revenue-department in cases involving IBC proceedings. It urged the Central Board of Indirect Taxes & Customs to issue guidelines for handling cases where IBC proceedings are ongoing, emphasizing the need for clarity in such scenarios.

This comprehensive analysis of the judgment before the Appellate Tribunal CESTAT AHMEDABAD delves into the key issues of interpretation, competence, disposal of appeals, and the necessity for guidelines in cases involving NCLT orders and IBC proceedings.