2023 (5) TMI 381 - AT - Central Excise

Appeal on service tax credit disallowance resolved through NCLT-approved Resolution Plan

M/s. Ruchi Soya Industries Limited Versus Principal Commissioner of GST & Central Excise, Chennai

The appeal filed by Ruchi Soya Industries Limited against the disallowance of cenvat credit of service tax amounting to Rs.88,84,632 for the period ... Disallowance of availment of cenvat credit of service tax - Corporate Insolvency Resolution Process (CIRP) was initiated in respect of the appellant under the provisions of the Insolvency and Bankruptcy Code, 2016 - It is submitted by the Ld. Counsel that in view of the order passed by the NCLT, the Resolution Plan may be taken into consideration and the appeal may be disposed accordingly. HELD THAT:- NCLT passed the following order: (i) Maximum of Rs.25 crores or the liquidation value allocable towards the statutory dues, whichever is higher, is proposed to be made towards claims by Government Authorities. (ii) All claims or liabilities etc owed to any Government Authority by the Corporate Debtor, in relation to any period prior to the Effective Date or on acquisition of control of the Corporate Debtor by the Resolution Applicant through the SPV proposed to stand extinguished upon the receipt of the said amount towards statutory dues pursuant to the approval of the resolution plan by the Hon’ble NCLT. In view of the order passed by the NCLT, the appeal filed by the appellant viz. Ruchi Soya Industries Limited is disposed of accordingly. The appeal challenged an order disallowing CENVAT credit of service tax of Rs.88,84,632 for Feb-Mar 2011 and directing recovery with interest and imposition of equal penalty under the Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Corporate Insolvency Resolution Process (CIRP) had been initiated and the NCLT approved a Resolution Plan. The NCLT order (24.07.2019) lists 'Statutory Dues (Claims by Government Authorities)' with Verified Claims Rs.44.96 crores and Proposed Payment Rs.25.00 crores, providing that: '(i) Maximum of Rs.25 crores or the liquidation value allocable towards the statutory dues, whichever is higher, is proposed to be made towards claims by Government Authorities.' and that 'All claims or liabilities etc owed to any Government Authority by the Corporate Debtor, in relation to any period prior to the Effective Date ... proposed to stand extinguished upon the receipt of the said amount towards statutory dues pursuant to the approval of the resolution plan by the Hon'ble NCLT.' In view of this NCLT order, the appeal was disposed of accordingly.