2023 (11) TMI 1038 - AT - Customs

Revenue Appeals Dismissed as Insolvency Proceedings Extinguish Government Dues, Following NCLT Resolution Plan Approval.

The Tribunal dismissed the revenue's appeals against the orders of the Commissioner (Appeals) due to the impact of insolvency proceedings. The respondent ... Recovery of outstanding government dues - present respondent company has undergone the proceedings under insolvency and bankruptcy code - company has been taken over by some other company - HELD THAT:- It can be seen that all the government dues stand extinguished as per the resolution approved by the NCLT vide order dated 01.07.2022, therefore, there is no purpose even to proceed with the present appeals by the department. Accordingly, in our view, the Revenue’s appeals became infructuous. The appeals are dismissed as infructuous. Issues Involved:The issues involved in the judgment are the revenue's appeals against the impugned orders passed by Commissioner (Appeals) and the impact of insolvency and bankruptcy proceedings on government dues.Revenue's Appeals:The appeals were made by the revenue against the orders passed by Commissioner (Appeals). The respondent company had undergone insolvency proceedings under the insolvency and bankruptcy code, resulting in the company being taken over by another entity. A previous Tribunal order had made observations regarding the insolvency issue decided by the NCLT. The NCLT order approved a resolution plan which extinguished government dues. The Tribunal noted that due to the extinguishment of government dues as per the NCLT order, the revenue's appeals had become infructuous and were dismissed.Impact of Insolvency Proceedings on Government Dues:The NCLT order approved a resolution plan under the insolvency and bankruptcy code, which led to the extinguishment of government dues. The Tribunal referenced relevant Supreme Court judgments emphasizing the freezing of claims to allow resolution applicants to start afresh without surprise claims. The Supreme Court's ruling clarified the limited jurisdiction of authorities to assess customs duties during insolvency proceedings and the procedures for submitting claims. In light of the NCLT order and Supreme Court judgments, the Tribunal concluded that government dues, including present dues, were not prima facie recoverable. However, the Tribunal decided the appeal on its merits and facts without giving a conclusive finding based solely on the NCLT order.(Separate Judgement by Judges: Not Applicable)