Customs duty claims extinguished upon approval of resolution plan under Section 31 of IBC, overriding Customs Act provisions.

Delhi HC ruled that customs duty claims are extinguished upon approval of resolution plan under Section 31 of IBC. Court held that IBC provisions override Customs Act, citing SC precedents in ABG Shipyard and Essar Steel cases. Once resolution plan is approved by Committee of Creditors, it binds all stakeholders including revenue authorities, ensuring successful applicant operates on clean slate. Petition challenging customs demand was allowed as the impugned order could not be sustained.

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Issues involved:
The judgment involves challenging the order passed by the Commissioner of Customs and the consequential duty demand based on the Insolvency and Bankruptcy Code, 2016 (IBC).

Impugned Order and Duty Demand:
The petitioner contested the order and duty demand related to the period prior to Corporate Insolvency Resolution Process (CIRP) and import of capital goods under EPCG licenses. The petitioner argued that these demands should be extinguished post approval of the Resolution Plan under Section 31 of the IBC.

Resolution Plan Approval and Claims:
The Resolution Plan was approved by the NCLT, NCLAT, and Supreme Court, involving claims by customs authorities. Two claims were admitted and disbursed as per the Resolution Plan, while two other authorities did not claim before the Resolution Professional.

Legal Provisions and Precedents:
The judgment highlighted Section 31 of the IBC, emphasizing its binding nature post approval of the Resolution Plan. It referenced the Supreme Court's decision in ABG Shipyard Liquidator case, which established the precedence of IBC over the Customs Act. The judgment also cited Essar Steel and Ghanashyam Mishra cases, affirming the extinguishment of dues not part of the Resolution Plan.

Conclusion:
The Court ruled in favor of the petitioner, stating that the demands pertaining to the period before the Resolution Plan approval should be extinguished under the IBC. The impugned order was quashed, and the writ petition was allowed.

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