Tribunal lacks authority to decide recovery in NCLT-approved resolution plan appeal

The tribunal ruled that the NCLT-approved resolution plan absolved the appellant of dues, but it lacked authority to decide on recovery. Emphasizing the department's role in determining recoverability, the tribunal highlighted the need for departmental action and engagement with relevant parties. The appeal was deemed infructuous, allowing parties to seek tribunal intervention if needed. The tribunal recommended guidelines from the Central Board of Indirect Taxes & Customs for clarity in similar IBC-related cases, underscoring the complexities of resolving dues under the Insolvency and Bankruptcy Code.

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Issues:
1. Interpretation of resolution plan approved by NCLT
2. Recoverability of dues by the department in light of NCLT order
3. Competency of tribunal to decide on recovery of dues
4. Effect of Insolvency and Bankruptcy Code on Customs and Central Excise Act
5. Disposal of appeal as infructuous due to resolution plan approval

Analysis:
1. The judgment pertains to a miscellaneous application filed in view of an NCLT order dated 24.07.2019. The applicant argued that as per the resolution plan approved by NCLT, no dues exist against them, rendering the appeal infructuous. The revenue, however, stated that claims were filed with the resolution professional and subsequently with NCLT-Mumbai, indicating a potential recovery of dues.

2. The NCLT approved a resolution plan for a company, indicating no liability to pay dues for the appellant. However, the tribunal clarified that it cannot decide on the recovery of dues, emphasizing that it is the department's prerogative to determine recoverability in light of the NCLT-approved plan.

3. The tribunal noted that the department filed an appeal under Section 42 of IBC before NCLT-Mumbai, but the outcome was not evident. It highlighted that the department, not the tribunal, must resolve the issue of recovering adjudged dues, as the tribunal lacks explicit provisions to enforce NCLT proceedings under the Customs and Central Excise Act.

4. Referring to a Supreme Court judgment and the overriding effect of the Insolvency and Bankruptcy Code, the tribunal emphasized that the recoverability of dues is within the department's purview. It underscored the need for the department to engage with the appellant, NCLT, and resolution professional to address the recovery issue.

5. Consequently, the tribunal deemed the appeal infructuous based on the NCLT-approved resolution plan, allowing parties to approach the tribunal if an amicable resolution is not reached. It also urged the Central Board of Indirect Taxes & Customs to issue guidelines for cases where IBC proceedings are ongoing, emphasizing the need for clarity in such situations.

This detailed analysis of the judgment showcases the nuanced considerations surrounding the interpretation of the NCLT-approved resolution plan, the recoverability of dues, and the tribunal's jurisdiction in such matters, culminating in the disposal of the appeal as infructuous.

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