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TMI Blog2020 (8) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... lvency and Bankruptcy Code, 2016 ("I&B Code" for short) before the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad has been approved in terms of order dated 17th October, 2019. Same has been assailed by the Specified Officer, Special Economic Zone, Warora (Appellant) through the medium of instant appeal primarily on the ground that the exemption/ concession granted by the Adjudicating Authority in the impugned order is in direct conflict of the provision of Special Economic Zone Act, 2005 ("SEZ Act, 2005"/ Act for short) as well as the Special Economic Zone Rules, 2006 ("SEZ Rules, 2006"/ Rules for short). It is contended that the amount to be paid at the time of de-bonding/ exit from SEZ is subject to the assessment to be made by the Development Commissioner under Rule 74 of the 'SEZ Rules, 2016'. It is further contended that such amount is not a crystallized debt but an amount to be assessed by the development commissioner in exercise of its jurisdiction under the 'SEZ Act, 2005' and 'SEZ Rules, 2016'. It is submitted that such assessment is to be made at the time of exit and cannot be classified as a crystallized debt. Learned counsel for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 30(2) of the 'I&B Code'. 3. The challenge to the approved Resolution Plan in the instant appeal filed by Special Economic Zone (Appellant) is limited to concession incorporated in Clause 3 (j) & (r) of the impugned order which deals with 'Relief and Concession in the Resolution Plan sought by the Resolution Applicant'. A cursory look at the relevant provision brings it to fore that an amount of Rs. 45 Crores was provided to be paid to Custom Department for the de-notification of Special Economic Zone ("SEZ"). The Resolution Applicant sought a direction for waiving off any additional amount required to be paid by the Corporate Debtor in the form of interest or penalty in connection with such de-notification. It is manifestly clear that the Resolution Applicant did not seek to evade liability in respect of payment of Rs. 45 Crores to Custom Department for de-notification of SEZ but only sought a direction for waiving off additional amount required to be paid by the Corporate Debtor which may be levied as an interest or penalty in connection with such denotification. 4. Learned counsel for the Appellant submits that the impugned order dated 17th October, 2019 was passed at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de-bonding. 6. Heard learned counsel for the parties and also perused the written submissions filed by the Respondent. However, Appellant has not chosen to file written submissions. 7. Before leaping forward to come to grips with the merits of the case, it would be appropriate, at the outset, to deal with the issue of limitation. Section 61 of the 'I&B Code' provides for appeal against an order passed by the Adjudicating Authority under Part-II of the 'I&B Code' covering Sections 4 to 77 of the 'I&B Code'. An aggrieved person may prefer an appeal to NCLAT within 30 days. This Appellate Tribunal has been vested with powers to allow an appeal to be filed after the expiry of 30 days if it is satisfied that there was sufficient cause for not filing the appeal within the prescribed time. However, such period shall not exceed 15 days. This provision engrafted in Section 61 (1) & (2) provides special Rules of limitation and the phraseology of Section 61 (1) in unambiguous terms provides that such right of appeal shall be available to aggrieved party notwithstanding anything to the contrary contained under the Companies Act, 2013. This leaves no room for doubt that the appeal provided f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the purview of extended timeline of 45 days within the ambit of Section 61 (2) proviso of the 'I&B Code' subject to assigning of a sufficient cause but the controversy does not end here. According to respondent, the impugned order was communicated to Appellant by Respondent vide letter dated 29th November, 2019 forming Annexure R1 to the Affidavit filed by the Respondent. Same appears to have been replied on 10th December, 2019, the reply forming Annexure R2 to the Affidavit of the Respondent. In the aforesaid reply, the Appellant has acknowledged receipt of impugned order of the Adjudicating Authority, therefore, the date of knowledge of the impugned order would have to be reckoned from 29th November, 2019 i.e. the day when the impugned order was communicated by the Respondent to Appellant vide Annexure R-1 to Respondent's Affidavit. Computed from 29th November, 2019, the appeal has been preferred after 75 days. Viewed thus, it is abundantly clear that the appeal has been preferred even 30 days beyond the extended timelines of 45 days envisaged under Section 61(2) proviso of the 'I&B Code'. It is, therefore, irrelevant as to whether the cause assigned for non-filing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted to a special economic zone from the domestic tariff area shall be chargeable to export duties at such rates as are leviable on such goods when exported; (b) any goods removed from a special economic zone for home consumption shall be chargeable to duties of customs including anti-dumping, countervailing and safeguard duties under the Custom Tariff Act, 1975, where applicable, as leviable on such goods when imported; and (c) the rate of duty and tariff valuation, if any, applicable to goods admitted to, or removed from, a special economic zone shall be the rate and tariff valuation in force as on the date of such admission or removal, as the case may be, and where such date is not ascertainable, on the date of payment of the duty. 76.G. Authorized operations.- All goods admitted to a special economic zone shall undergo such operations including processing or manufacturing as may be specified in the rules made in this behalf. 76.H. Goods utilized with a special economic zone.- (1) The Central Government may make rules in this behalf to enumerate the cases in which goods to be utilized inside a special economic zone may be admitted free of duties of customs and lay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent; (ii) In case the Unit has failed to fulfil the terms and conditions of the Letter of Approval and penal proceedings are to be taken up or are in process, a legal undertaking for payment of penalties, that may be imposed, shall be executed with the Development Commissioner; (iii) The Unit shall continue to be treated a Unit till the date of final exit. (3) In the event of a gems and jewellery unit ceasing its operation, gold and other precious metals, alloys, gem and other materials available for manufacture of jewellery shall be handed over to an agency nominated by the Central Government at a price to be determined by that agency. (4) Development Commissioner may permit a Unit, as one time option, to exit from Special Economic Zone on payment of duty on capital goods under the prevailing Export Promotion Capital Goods Scheme under the Foreign Trade Policy subject to the Unit satisfying the eligibility criteria under that Scheme. (5) Depreciation norms for capital goods shall be as given in sub-rule (1) of rule 49." 13. It is manifestly clear that the dues or penalty payable is to be calculated at the time of exit from SEZ with the approval of the Development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on all stakeholders including the Central Government but it would not be correct to hold that the amount of Rs. 45 crores set apart is a crystallised debt and in that sense same is not subject to any variation or change. The proposed Resolution Plan allocated an amount of Rs. 45 Crores for being paid to the Development Commissioner as chargeable duty/ penalty for de-notification from SEZ purely on the basis of an estimate. Such allocation was to take care of the duties chargeable/ penalties imposed being realized from the Successful Resolution Applicant when the Development Commissioner was approached for grant of approval within the ambit of Rule 74. It appears that the Corporate Debtor was not enjoying any benefit as a SEZ unit when the Resolution Plan was approved and in view of the same, the proposed Resolution Plan provided for seeking its de-notification. While dealing with reason for de-notification, it was stated in the Resolution Plan (at page 15): "Since the Corporate Debtor is currently not availing any benefit as an SEZ, it seems prudent to get denotified as the Customs Act, 1962 has a provision for the same. By paying a one-time cost to be arrived at based on the wr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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