Appeals automatically abated after company liquidation when official liquidator failed to file continuance application under Rule 22

CESTAT Allahabad held that appeals filed by a company abated under Rule 22 of Custom, Excise Service Tax Appellate Tribunal Procedure Rules, 1982. The NCLT had ordered company liquidation on 20.09.2018 and appointed an official liquidator. Despite over five years passing since the liquidation order, the official liquidator failed to file any application for continuance of the appeal proceedings before the tribunal, resulting in automatic abatement of the appeals.

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Issues Involved:
1. Confirmation of demand of duty and interest.
2. Imposition of penalty.
3. Commencement of Corporate Insolvency Resolution Process (CIRP).
4. Application of moratorium u/s 14 of IBC, 2016.
5. Liquidation order by NCLT.
6. Abatement of appeal u/s 22 of Custom Excise Service Tax Appellate Tribunal Procedure Rules, 1982.

Summary:

1. Confirmation of demand of duty and interest:
The appeal challenges the order dated 28.09.2011 by the Commissioner (Appeal) Customs, Central Excise, and Service Tax, Noida, which upheld the confirmation of demand of duty of Rs 35,183/- along with interest of Rs 3833/-, but set aside the imposition of penalty on the appellant.

2. Imposition of penalty:
The Commissioner (Appeal) set aside the imposition of penalty on the appellant, which was part of the original order being appealed.

3. Commencement of Corporate Insolvency Resolution Process (CIRP):
The Deputy Registrar informed the Tribunal about the commencement of CIRP for the appellant company, Moser Baer India Ltd. (MBIL), as per the letter dated 06.01.2018 from the Resolution Professional, citing the order dated 14.11.2017 by the Hon'ble NCLT.

4. Application of moratorium u/s 14 of IBC, 2016:
The Resolution Professional advised that any recovery action against MBIL would violate Section 14 of IBC, 2016, and could lead to penal action u/s 74 (2) of IBC, 2016.

5. Liquidation order by NCLT:
The NCLT ordered the liquidation of MBIL on 20.09.2018 due to the absence of a resolution plan, with a unanimous decision by the Committee of Creditors (COC). The liquidation was to be conducted as per Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016.

6. Abatement of appeal u/s 22 of Custom Excise Service Tax Appellate Tribunal Procedure Rules, 1982:
Rule 22 stipulates that an appeal shall abate if the appellant company is wound up unless an application for continuance is made by the liquidator. No such application was made within the stipulated period, leading to the appeal abating in terms of Rule 22.

Conclusion:
The appeal abates due to the winding up of the appellant company and the absence of an application for continuance by the liquidator, as pronounced in open court on 05 April 2024.

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