2023 (5) TMI 184 - AT - Central Excise

Abatement of appeal subsequent to finalization of the resolution plan by the NCLAT, New Delhi - HELD THAT - Hon ble Supreme Court 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 has categorically held all the dues including the statutory does owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued. It is found from the date of approval of the Resolution Plan by the NCLAT, the Appeal filed by the Appellant has abated and this Tribunal has become functus officio in the matters relating to this Appeal. Further it is also settled that the impugned Order-in-Appeal has got merged in the order of the NCLAT approving the Resolution Plan. The Appeal stands abated as per Rule 22 of the CESTAT Procedure Rules, 1982 w.e.f. the date of approval of the Resolution Plan by the NCLAT, i.e., 05.09.2019. Appeal disposed off.

Summary

Issues Involved:
The appeal assails the Order-in-Original confirming Central Excise duty demand, interest, and penalty. The main issue is whether the demands against the Appellant prior to the closing date of the insolvency resolution process stand discharged and settled as per the approved Resolution Plan.

Summary:
The Appellant, undergoing Corporate Insolvency Resolution Process (CIRP), asserts that demands prior to the closing date of insolvency proceedings stand discharged due to the approved Resolution Plan by NCLAT, New Delhi. The Appellant relies on CBIC Circular and precedents like Alok Industries Ltd. case to support the claim that no further demand can be raised post-Resolution Plan approval. The Appellant argues that the NCLT order is binding on all stakeholders, extinguishing liabilities beyond the approved plan. The Department's representative agrees that the appeal stands abated post-NCLAT's Resolution Plan approval.

The Tribunal notes the CBIC's Standard Operating Procedure for NCLT cases, emphasizing the importance of timely claim submissions by GST and Customs authorities during insolvency proceedings. The Tribunal cites the Supreme Court's ruling in Ghanashyam Mishra & Sons Pvt. Ltd. case, highlighting that once a Resolution Plan is approved, claims not included in the plan stand extinguished, binding on all stakeholders. Consequently, the Tribunal rules that the appeal has abated post-NCLAT's Resolution Plan approval, in line with CESTAT Procedure Rules.

Therefore, the Tribunal concludes that the appeal stands abated from the date of NCLAT's Resolution Plan approval, settling all issues raised in the original order.