Resolution plan discharge and insolvency procedure: appeal treated as infructuous, and Rule 22 held inapplicable.

An approved resolution plan under the insolvency process discharged contingent liabilities, pending litigations, claims and dues of the corporate debtor, leaving no further recourse against the corporate debtor or resolution applicant; the appeal was therefore treated as infructuous. The Tribunal also held that Rule 22 of the CESTAT Procedure Rules, 1982 applies only where an assessee is adjudged insolvent or a company is wound up, and not where the company merely undergoes a resolution process and change of name. On that basis, no application for continuance of proceedings was required and the matter was disposed of as infructuous.

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Issues: (i) Whether the appeal had become infructuous in view of the resolution plan approved by the NCLT and the consequent discharge of claims against the corporate debtor; (ii) whether Rule 22 of the CESTAT Procedure Rules, 1982 was attracted so as to require an application for continuance of the proceedings.

Issue (i): Whether the appeal had become infructuous in view of the resolution plan approved by the NCLT and the consequent discharge of claims against the corporate debtor.

Analysis: The approved resolution plan provided that contingent liabilities and pending litigations stood discharged and withdrawn, and that claims and dues relating to the corporate debtor were fully settled with no further recourse against the corporate debtor or the resolution applicant. The Tribunal also noted that, although the plan prima facie indicated that the adjudged dues could not be recovered, the question of actual recovery had to be decided by the department and not by the Tribunal in the absence of an express provision in the customs and central excise framework giving effect to NCLT proceedings.

Conclusion: The appeal had become infructuous.

Issue (ii): Whether Rule 22 of the CESTAT Procedure Rules, 1982 was attracted so as to require an application for continuance of the proceedings.

Analysis: Rule 22 was held to apply only where an assessee is adjudged insolvent or where a company is wound up. The company in question had not been wound up; it had only undergone a resolution process and a change of name, and therefore remained an ongoing entity. The Tribunal further distinguished the authority relied upon by the revenue and held that insolvency as contemplated by Rule 22 was not applicable to a company in the present circumstances.

Conclusion: Rule 22 of the CESTAT Procedure Rules, 1982 was not applicable.

Final Conclusion: In light of the approved resolution plan and the absence of any basis for continuing the appeal on merits, the proceeding was treated as infructuous and disposed of accordingly.

Ratio Decidendi: Where a resolution plan extinguishes pre-resolution claims and pending litigations, and the forum has no express statutory mechanism to determine post-resolution recovery of dues, the appeal may be treated as infructuous; Rule 22 governing insolvency or winding up does not apply to a mere resolution-process change in the company's status.

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