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of <h1>Appeal abated after NCLT plan approval extinguishing non-included claims. Rule 22 applied. Operational Creditors prioritized.</h1> <h3>M/s. Jet Airways (India) Ltd Versus Commissioner of Service Tax, Mumbai-I (Vice-Versa)</h3> M/s. Jet Airways (India) Ltd Versus Commissioner of Service Tax, Mumbai-I (Vice-Versa) - TMI Issues Involved:1. Abatement of appeal due to approval of resolution plan by NCLT2. Application of Rule 22 of CESTAT Procedure Rules, 19823. Treatment of Operational Creditors in the Resolution Plan4. Claim for refund of pre-deposit post approval of resolution planAbatement of Appeal due to Approval of Resolution Plan by NCLT:The judgment pertains to appeals where the company faced financial difficulties leading to insolvency proceedings under the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal (NCLT) initiated Corporate Insolvency Resolution Process (CIRP) for the company, and a Resolution Plan was approved by NCLT on a specified date, making it effective from that date. The Tribunal observed that once a resolution plan is approved by the NCLT, claims provided in the plan stand frozen and become binding on all stakeholders, extinguishing any claims not part of the plan. The judgment cites relevant Supreme Court decisions emphasizing the binding nature of approved resolution plans.Application of Rule 22 of CESTAT Procedure Rules, 1982:The judgment discusses the application of Rule 22 of the CESTAT Procedure Rules, 1982, which states that in case of death, insolvency, or winding up of a party, proceedings shall abate unless continued by the successor-in-interest within a specified period. The Tribunal held that in the present case, the appeal stands abated as no application for continuance of proceedings was filed by the successor-in-interest, as required by the rule.Treatment of Operational Creditors in the Resolution Plan:The Resolution Plan outlined the treatment of Operational Creditors, stating that their liquidation value would be paid within a specified period if not presumed to be NIL. The judgment highlights that the protection of licenses and concessions would not be available to the company as it ceased operations during the CIRP, unlike in certain precedent cases. The plan prioritized payment to Operational Creditors over Financial Creditors in specific scenarios.Claim for Refund of Pre-Deposit Post Approval of Resolution Plan:The applicant sought a refund of pre-deposit based on a Supreme Court judgment stating that claims not part of the approved resolution plan stand extinguished. The Tribunal noted that once the resolution plan is approved, claims not included in the plan do not survive, leading to the abatement of the appeal and rendering CESTAT functus officio in matters related to the appeal. The judgment emphasizes the importance of timely filing of claims by authorities involved in insolvency proceedings to avoid claim rejection post-resolution plan approval.This detailed analysis of the judgment covers the issues involved comprehensively, providing insights into the legal implications and decisions made by the Tribunal regarding each aspect of the case.
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