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Company appeal dismissed as abated under Rule 22 after liquidation proceedings with Department claim already registered CESTAT Chennai dismissed an appeal as abated under Rule 22 of CESTAT (Procedure) Rules, 1982 following liquidation proceedings. The appellant company was ...
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Company appeal dismissed as abated under Rule 22 after liquidation proceedings with Department claim already registered
CESTAT Chennai dismissed an appeal as abated under Rule 22 of CESTAT (Procedure) Rules, 1982 following liquidation proceedings. The appellant company was ordered for liquidation by NCLT Chennai on 19.03.2018. The Department had registered its claim with the Liquidator regarding irregular CENVAT credit recovery with interest and penalty. Since no application for continuance was made by the Official Liquidator and the Department's claim was already registered, the appeal became infructuous and was dismissed as abated.
Issues: Liquidation proceedings and abatement of appeal under Rule 22 of CESTAT (Procedure) Rules, 1982.
Analysis: The case involved M/s. Veesons Energy Systems Pvt. Ltd., Trichy, appealing against a demand for irregular CENVAT credit and penalty imposed by the Lower Adjudicating Authority. The appellant's appeal was rejected by the Commissioner of Customs and Central Excise, leading them to approach the Appellate Tribunal CESTAT CHENNAI.
The appellant, represented by a Chartered Accountant, was under liquidation as confirmed by the Official Liquidator. The Liquidator received claims from the Deputy Commissioner of GST & Central Excise, which included the demanded amount in the appeal. The Liquidator, in accordance with the Liquidation Process Regulations, was to distribute the sale proceeds following the prescribed mechanism under Section 53 of the IBC.
The Liquidator requested the appeal to be disposed of as closed, indicating that the appellant had come under liquidation, and the claimed amount had been admitted by the Department through the Liquidator. The proceedings in the appeal were deemed infructuous due to the liquidation status and the claim filed with the Liquidator.
Referring to the legal precedent set by the Hon'ble Apex Court in a specific case, it was established that once a resolution plan is approved, claims not part of the plan stand extinguished. As the Department had registered its claim with the Liquidator, no further proceedings could be pursued in the appeal.
Considering Rule 22 of the CESTAT (Procedure) Rules, 1982, which addresses the continuance of proceedings after liquidation, the Tribunal concluded that since the appellant was under liquidation, and no application for continuance was made by the Official Liquidator, the appeal should abate. Consequently, the appeal was abated under Rule 22 and dismissed as infructuous.
The judgment was pronounced by the Tribunal on 24th October 2024, officially closing the appeal due to the appellant's liquidation status and the claim filed with the Liquidator, rendering the proceedings infructuous.
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