2025 (2) TMI 560 - AT - Service Tax

Service tax appeal abated after company liquidation as liquidator received no claim from tax authorities

CESTAT Chennai ordered abatement of appeal regarding non-payment of service tax under Goods Transport Agency Services on freight amounts paid to logistics ... Abatement of appeal - Non-payment of Service Tax under Goods Transport Agency Services on freight amounts paid to M/s. Gaerish Logistics (P) Ltd. for handling export goods - eligibility for exemption under N/N. 18/2009-ST. - HELD THAT:- As the NCLT, Chennai has ordered for Liquidation of the appellant vide its order dated 19.03.2018 and as the Liquidator has confirmed non receipt of claim from the Deputy Commissioner of GST and Central Excise, Trichy and also as no application as per Rule 22 has been made by the Official Liquidator appointed by the NCLT for continuance of the appeal, the appeal should abate in terms of the above referred Rule. As such the appeal gets abated in terms of Rule 22 of the CESTAT (Procedure) Rules, 1982. The case involves an appeal filed by M/s. Veesons Energy Systems Pvt. Ltd. against an Order-in-Appeal issued by the Commissioner of Customs and Central Excise. The core issue revolves around the non-payment of Service Tax under 'Goods Transport Agency Services' on freight amounts paid to M/s. Gaerish Logistics (P) Ltd. for handling export goods. The Liquidator representing the appellant argued that the demand for Service Tax should be set aside and a refund of the pre-deposit should be ordered.The Liquidator highlighted that the appellant was under Corporate Insolvency Resolution Process (CIRP) and subsequently liquidated. All assets were sold, and claims were admitted and distributed as per regulations. The Liquidator received claims from the Central Excise Department, which were admitted, but the Service Tax demand in question was not part of these claims.The Liquidator argued that the demand for Service Tax was unjustified as the services provided by M/s. Gaerish Logistics (P) Ltd. were exempted under Notification No. 18/2009-ST for exporters. The Liquidator also emphasized that the Liquidation Process Regulations dictate the distribution of sale proceeds according to the prescribed mechanism under the Insolvency and Bankruptcy Code.The Tribunal referred to a Supreme Court case regarding the freezing of claims once a resolution plan is approved, stating that claims not part of the resolution plan are extinguished. Since the Department had not registered its claim with the Liquidator, no further proceedings could be pursued in the appeal.Considering Rule 22 of the Customs, Excise, Service Tax Appellate Tribunal (Procedure) Rules, 1982, which addresses the continuance of proceedings after liquidation, the Tribunal concluded that since the Liquidator confirmed non-receipt of the claim and no application for continuance was made, the appeal should abate.Therefore, the Tribunal pronounced that the appeal abates in accordance with Rule 22 of the CESTAT (Procedure) Rules, 1982, due to the liquidation of the appellant and the absence of a claim registration or application for continuance.