2024 (10) TMI 1338 - AT - Central Excise

Abatement of appeal under Rule 22 of CESTAT (Procedure) Rules, 1982 - Liquidation proceedings - recovery of irregular CENVAT credit availed, with interest and penalty - HELD THAT - As the Department has already registered its claim with the Liquidator, no further proceedings can survive in this appeal. As the NCLT, Chennai has ordered for Liquidation of the appellant vide its order dated 19.03.2018 and as the Liquidator has confirmed the receipt of claim from the Deputy Commissioner of GST and Central Excise, Trichy and also as no application as per Rule 22 has been made by the Official Liquidator appointed by the NCLT for continuance of the appeal, the appeal should abate in terms of the above referred Rule. As such the appeal gets abated in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982 and also gets dismissed being infructuous.

Summary

Issues:
Liquidation proceedings and abatement of appeal under Rule 22 of CESTAT (Procedure) Rules, 1982.

Analysis:
The case involved M/s. Veesons Energy Systems Pvt. Ltd., Trichy, appealing against a demand for irregular CENVAT credit and penalty imposed by the Lower Adjudicating Authority. The appellant's appeal was rejected by the Commissioner of Customs and Central Excise, leading them to approach the Appellate Tribunal CESTAT CHENNAI.

The appellant, represented by a Chartered Accountant, was under liquidation as confirmed by the Official Liquidator. The Liquidator received claims from the Deputy Commissioner of GST & Central Excise, which included the demanded amount in the appeal. The Liquidator, in accordance with the Liquidation Process Regulations, was to distribute the sale proceeds following the prescribed mechanism under Section 53 of the IBC.

The Liquidator requested the appeal to be disposed of as closed, indicating that the appellant had come under liquidation, and the claimed amount had been admitted by the Department through the Liquidator. The proceedings in the appeal were deemed infructuous due to the liquidation status and the claim filed with the Liquidator.

Referring to the legal precedent set by the Hon'ble Apex Court in a specific case, it was established that once a resolution plan is approved, claims not part of the plan stand extinguished. As the Department had registered its claim with the Liquidator, no further proceedings could be pursued in the appeal.

Considering Rule 22 of the CESTAT (Procedure) Rules, 1982, which addresses the continuance of proceedings after liquidation, the Tribunal concluded that since the appellant was under liquidation, and no application for continuance was made by the Official Liquidator, the appeal should abate. Consequently, the appeal was abated under Rule 22 and dismissed as infructuous.

The judgment was pronounced by the Tribunal on 24th October 2024, officially closing the appeal due to the appellant's liquidation status and the claim filed with the Liquidator, rendering the proceedings infructuous.