Custom, Excise & Service Tax Tribunal
Ruchi Soya Industries Ltd vs Mangalore on 9 November, 2023
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 25387 of 2013
[Arising out of Order-in-Original No. 22/2012 dated 02.11.2012 passed by the
Commissioner of Central Excise & ST, Mangalore]
Ruchi Soya Industries Ltd ......Appellant
Factory No. 2 P, 3 P & 4 P,
Baikampady Industrial Area,
Mangalore, Karnataka
VERSUS
Commissioner of CE & ST, ......Respondent
Mangalore
7th Floor, Trade Centre,
Bunts Hostel Road,
Mangalore, Karnataka 575003
APPEARANCE:
Present for the Appellant: Sh. Rajesh Rawal, Advocate
Present for the Respondent: Sh. H. Jayathirtha, Authorized Representative
CORAM:
HON'BLE Dr. D. M. MISRA, MEMBER (JUDICIAL)
HON'BLE Mr. PULLELA NAGESWARA RAO, MEMBER (TECHNICAL)
FINAL ORDER NO. 21234/2023
DATE OF HEARING: 22.08.2023
DATE OF DECISION: 09.11.2023
PER D. M. MISRA
This appeal is filed against Order-in-Original No. 22/2012
dated 02.11.2012 passed by the Commissioner of Central Excise
& ST, Mangalore.
Page 1 of 8
E/25387/2013
2. Briefly stated facts of the case are that the appellant is
manufacturer of Edible Refined Oils falling under Chapter 15 and
Fatty Acids under Chapter Heading 3823 of the Central Excise
Tariff Act, 1985. Alleging that they were clearing RBD Palm
Stearin at 'Nil' rate of duty by wrongly claiming exemption under
Notification No. 3/2006-CE dt. 01.03.2006 as amended,
investigation was initiated against the appellant and on
completion of the same, show cause notice was issued to the
appellant on 26.03.2012 for proposing classification of "RBD Palm
Stearin" under sub-heading 38231112 of the Central Excise Tariff
Act, 1985; recovery of duty of Rs. 16,02,10,687/- for the period
from 14.07.2009 to 31.08.2011 with interest and proposal for
penalty. On adjudication, the classification was confirmed under
the proposed Chapter Heading 38231112 of CETA, 1985 and duty
of Rs. 8,06,44,997/- was confirmed with equal amount of interest
and penalty.
3. The present appeal is filed, being aggrieved by the Order
of the ld. Commissioner, on various grounds, under section 35B of
the CEA, 1944.
4. During the pendency of this Appeal, it is brought on
record that, Standard Chartered Bank filed a petition under
Section 7 of Insolvency and Bankruptcy Code, 2016 (in short,
"IBC, 2016") as the Financial Creditor for initiation of Corporate
Insolvency Resolution Process (in short, "CIRP") against the
Page 2 of 8
E/25387/2013
appellant as Corporate Debtor and necessary Orders were passed
by the Hon'ble National Company Law Tribunal (in short, "NCLT"),
Hyderabad on 08th December 2017 & 15th December 2017. Later
the NCLT approved the Resolution Plan under Section 31(1) of the
IBC, 2016 and passed the Order dated 24.07.2019.
5. Consequent to the approval of Resolution Plan vide order
dated 24.07.2019 and subsequent order dated 04.09.2019, the
appellant have filed a miscellaneous application before this
Tribunal on 13.08.2021. In the miscellaneous application, the
appellant narrated the facts of the proceedings before the Hon'ble
NCLT and enclosed orders passed from time to time. Further,
referring to the judgment in the case of Ghansyam Mishra Vs.
Edelweiss Reconstruction Company Ltd. - 2021 SCC Online SC
313 and other judgments mentioned in para 14 of the
miscellaneous application that the demands for the period from
July, 2007 to August, 2011 in relation to the appellant became
infructuous, hence stands abated and any/all liability, if any, of
any nature whatsoever, stands extinguished and prayed
accordingly in the said application.
6. The ld. Advocate for the appellant during the course of
hearing, reiterated the submissions advanced in the miscellaneous
application and drew our attention to the orders of Hon'ble NCLT
dated 24.07.2019 and 04.09.2019. He has submitted that in view
of the judgment of Hon'ble Supreme Court in Ghansyam Mishra's
Page 3 of 8
E/25387/2013
case, which has been followed in the appellant's own case by the
Hon'ble Gujarat High Court and observed that in such
circumstances, the appeal abates, therefore, the present appeal
also abates.
7. Per contra, the ld. A.R. for the Revenue submits that once
the Resolution Plan is approved by the Hon'ble NCLT, the appeals
stand abated as per Rule 22 of CESTAT (Procedure) Rules, 1982
and the Tribunal becomes functus officio. In support, he has
relied on the following case-laws:-
1) M/s MC Nally Sayaji Engineering Limited vs. CCGST, Bolpur
- 2023 (4) TMI 1076 - CESTAT KOLKATA
2) CCE & ST, Surat-II vs. Arcelormittal Nippon Steel India Ltd -
2023 (2) TMI 231 - CESTAT AHMEDABAD
3) M/s Jet Airways India Ltd vs. CST, Mumbai-V - 2023 (5) TMI
767 - CESTAT MUMBAI
4) M/s Bhushan Power & Steel Ltd vs. CCE, Kolkata-IV - 2023
(5) TMI 184 - CESTAT KOLKATA
5) M/s Alok Industries Ltd vs. CCE, Belapur & Mumbai - 2022
(10) TMI 801 - CESTAT MUMBAI
6) M/s Murli Industries Ltd vs. CCE, Nagpur - 2022 (11) TMI
289 - CESTAT MUMBAI
8. Heard both sides and perused the records.
9. The issue involved in present appeal is: whether the
appellant are entitled to continue with the Appeal and claim relief
after Order of NCLT approving the resolution plan has been
passed.
Page 4 of 8
E/25387/2013
10. Undisputedly, during the pendency of the appeal,
necessary orders have been passed 8th December, 2017 by the
Hon'ble NCLT approving the Resolution Plan under Section 31(1)
of the IBC, 2016.
11. The relevant provision under the CESTAT (Procedure)
Rules, 1982 prescribed at Rule 22 reads as under:
"RULE 22. Continuance of proceedings after
death or adjudication as an insolvent of a party
to the appeal or application. --
Where in any proceedings the appellant or applicant or
a respondent dies or is adjudicated as an insolvent or
in the case of a company, is being wound up, the
appeal or application shall abate, unless an application
is made for continuance of such proceedings by or
against the successor-in-interest, the executor,
administrator, receiver, liquidator or other legal
representative of the appellant or applicant or
respondent, as the case may be : Provided that every
such application shall be made within a period of sixty
days of the occurrence of the event : Provided further
that the Tribunal may, if it is satisfied that the
applicant was prevented by sufficient cause from
presenting the application within the period so
specified, allow it to be presented within such further
period as it may deem fit."
12. The Mumbai bench of this Tribunal in the case of M/s Alok
Industries Ltd's case (supra) analysed in detail Rule 22 of CESTAT
(Procedure) Rules, 1982 and the case laws on the issue including
those cited by the Ld. Advocate for the appellant observed that
aforesaid Rule 22 should be applicable the moment the successor
interest with sufficient rights is appointed by NCLT to make an
application for continuation of the proceeding. It is observed as:
Page 5 of 8
E/25387/2013
"4.4 ----------------
Learned advocate has labored to explain why this rule should
not be made applicable in his case. However, in view of the
fact as stated in the para 4.2 and 4.3 above we are of the
view that moment the successor interest with sufficient
rights to be represented is appointed by the NCLT this rule
will become applicable and it is for the successor interest to
make an application for continuance of the proceedings. In
the present case no such application has been filed by the
successor interest for the continuance of the proceedings
and hence the appeal stands abated by the operation of this
rule.
4.5 ............................
4.6 There is no dispute to the binding nature of the
resolution plan as approved by the NCLT. It has been settled
by the Hon'ble Apex Court in the cases referred to by the
learned counsel for the applicant.
4.7 -----------------
4.8 However, from the date of approval of the resolution
plan by the NCLT, the appeal filed by the applicant has
abated and CESTAT has become functus officio in the
matters relating to this appeal. Further it is also settled that
the impugned orders in the appeals have got merged in the
order of the NCLT approving the Resolution Plan. The
decision of the Hon'ble Bombay High Court referred to by the
learned Authorized representative clearly lays down the test
as in which condition the said doctrine shall apply in
following manner.
-----------------
4.9 We are satisfied that the test laid down by the Hon'ble High Court is applicable in the present case for us to hold so. It is quite interesting to note that applicant to the extent of demand made finds the order of NCLT binding and wants pronouncement in respect of the refund by this tribunal. Can we sit in judgement over the order of NCLT approving the resolution plan? Further issue of refund is any case not the issue raised in appeal it is for the applicant to approach the relevant authorities in the matter.
--------------
5.1 The appeals filed abate as per the Rule 22 of the CESTAT Procedure Rules, 1982, with effect from the date of the approval of the resolution plan by the NCLT. Page 6 of 8
E/25387/2013 5.2 Since the appeals have abated the miscellaneous application filed by the applicant/appellant does not survive."
13. Similar view has been expressed by other Benches of this Tribunal in the cases cited by the ld. A.R. for the Revenue i.e.(i) M/s MC Nally Sayaji Engineering Limited vs. CCGST, Bolpur - 2023 (4) TMI 1076 - CESTAT KOLKATA; (ii) CCE & ST, Surat-II vs. Arcelormittal Nippon Steel India Ltd - 2023 (2) TMI 231 - CESTAT AHMEDABAD; (iii) M/s Jet Airways India Ltd vs. CST, Mumbai-V - 2023 (5) TMI 767 - CESTAT MUMBAI; (iv)M/s Bhushan Power & Steel Ltd vs. CCE, Kolkata-IV - 2023 (5) TMI 184 - CESTAT KOLKATA; (v)M/s Murli Industries Ltd vs. CCE, Nagpur - 2022 (11) TMI 289 - CESTAT MUMBAI.
14. In the appellant's own case, the Hon'ble Gujarat High Court in R/Tax Appeal No. 32 of 2019 taking note of the judgments on the subject including that of Hon'ble Supreme Court in Ghansyam Mishra's case held that in such circumstances, the appeal abates.
15. Needless to mention, as observed by the Hon'ble Supreme Court and High Courts in a catena of cases that the Tribunal is a creature of the statute; it cannot travel beyond the express powers vested under the Statute or Rules framed under the statute while deciding a statutory Appeal filed before it against the Orders of the prescribed statutory authorities mentioned under the statute. The corollary, any order passed by the Tribunal Page 7 of 8 E/25387/2013 beyond the vested powers under the statute would be non est in law.
16. In the circumstances, we are in complete agreement with the view consistently expressed by this Tribunal in a series of cases referred as above that the appeal abates once the IRP is appointed and/or Resolution plan approved. Consequently, the appeal abates as per Rule 22 of CESTAT (Procedure) Rules, 1982 and this is the relief/Order could be passed as prescribed under the said Rule.
(Order pronounced in the court on 09/11/2023) (D. M. MISRA) MEMBER (JUDICIAL) (PULLELA NAGESWARA RAO) MEMBER (TECHNICAL) RA_Saifi Page 8 of 8