The CESTAT held that the present appeal stands abated because the NCLT approved the Resolution Plan for the appellant, rendering the Tribunal functus officio as per Supreme Court precedents. Consequently, the demand proceedings prior to that approval were extinguished.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHANDIGARH
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 60789 of 2019
[Arising out of Order-in-Appeal No. LUD-EXCUS-001-APP-2306-19 dated 25.04.2019 passed by the Commissioner (Appeals), Central Excise, Ludhiana]
M/s Oliver Engg. Pvt. Ltd. ……Appellant
Sandharshi Tehsil Rajpura, Patiala, Punjab-140401
VERSUS
Commissioner of Central Excise & ……Respondent Service Tax, Ludhiana
GST Bhawan, F-Block, Rishi Nagar, Ludhiana, Punjab-141001
APPEARANCE:
None for the Appellant
Shri Aniram Meena, Authorized Representative for the Respondent
CORAM: HON’BLE MR. S. S. GARG, MEMBER (JUDICIAL) HON’BLE MR. P. ANJANI KUMAR, MEMBER (TECHNICAL)
FINAL ORDER NO. 60355/2026
DATE OF HEARING/DECISION: 15.05.2026
S. S. GARG:
The present appeal is directed against the impugned order dated 25.04.2019 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has set aside the demand for the extended period and demand for the normal period has been upheld.
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Plan and the order approving the Resolution Plan has also been placed on record. Learned AR submits that once the Resolution Plan has been approved, the present appeal needs to be abated in view of the law laid down by the Hon'ble Supreme Court in the case of Ghanashyam Mishra & Sons Pvt Ltd vs. Edelweiss Asset Reconstruction Company Ltd & Ors in Civil Appeal No. 8129 of 2019.
“ 4 . We also find that the matter is no more res integra , as the Hon’ble Supreme Court in Civil Appeal No. 8129 of 2019, in the case of Ghanashyam Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd. & Ors. vide judgement dated 13.04.2021 , had decided the settled position of law, as under:-
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“2. The short but important questions, that arise for consideration in this batch of matters, are as under:-
(i) As to whether any creditor including the Central Government, State Government or any local authority is bound by the Resolution plan once it is approved by an adjudicating authority under subsection (1) of Section 31 of the Insolvency and Bankruptcy Code, 2016 (herein after referred to as ‘I&B Code’)?
(ii) As to whether the amendment to Section 31 by Section 7 of Act 26 of 2019 is clarificatory/ declaratory or substantive in nature?
(iii) As to whether after approval of resolution plan by the Adjudicating Authority a creditor including the Central Government, State Government or any local authority is entitled to initiate any proceedings for recovery of any of the dues from the Corporate
Debtor, which are not a part of the Resolution Plan approved by the adjudicating authority?
CONCLUSION
95. In the result, we answer the questions framed by us as under:
(i) That once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan;
(ii) 2019 amendment to Section 31 of the I&B Code is clarificatory and declaratory in nature and therefore will be effective from the date on which I&B Code has come into effect;
(iii) Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if
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not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior the date on which the Adjudicating Authority grants its approval under Section 31 could be continued.”
5. We also find that CBIC has vide Instruction No.1083/04/2022-CX9 dated 23.05.2022 has laid down the guidelines in the form of Standard Operating Procedure (SOP) for handling the NCLT cases by the department, and reiterated the legal position that as operational creditors, GST and Customs authorities are required to submit their claims against the corporate debtors when the corporate insolvency and resolution process has been initiated. Once the Resolution plan is approved by NCLT, no demands can be raised on the Resolution Applicant. The relevant paragraph of said instructions is extracted below:
Government of India
Ministry of Finance (Department of Revenue) Central Board of Indirect Taxes & Customs, New Delhi
Dated 23.05.2022
To All Principal Chief Commissioner(s)/ Chief Commissioner(s) of Customs/ Customs (Preventive)/ Customs & CGST, All Principal Chief Commissioner(s)/ Chief Commissioner(s) of CGST, Webmaster: [email protected]
Madam/Sir,
Subject: Standard Operating Procedure (SOP) for NCLT cases in respect of the Insolvency and bankruptcy Code (IBC) – reg.
I am directed to inform the Insolvency and Bankruptcy Board of India has requested that role of GST and Customs authorities in certain key issues under the Insolvency and bankruptcy Code, 2016 needs to be formulated. Further, GST and Customs Authorities have been classified as operational creditors and are required to submit their claims against corporate debtors when the Corporate insolvency and resolution process is initiated and public announcement inviting claims is made by the insolvency professional.
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2. A timeline of 90 days from the insolvency commencement date is available for filing of claims. However, it has been observed that there is an inordinate delay in filing of claims by Customs and GST authorities. This leads to their claims not being admitted and extinguished once a resolution plan is approved. It is also observed that the authorities then litigate on the rejection of each claims, despite the settled position that no claims can be raised once the plan is approved and no demands can be raised on the Resolution Applicant who has taken over the company through such a resolution plan.”
6. Appellant-assessee has also claimed that the refund of pre-deposit to be paid to them at the time of filing the captioned appeal. In this regard, we find that the matter has already been decided by the Hon’ble Supreme Court in the case of Ruchi Soya [2022 (380) ELT 8 (SC)] . The relevant paras of the judgement is extracted as follows:
“14. Admittedly, the claim in respect of the demand which is the subject matter of the present proceedings was not lodged by the respondent No. 2 after public announcements were issued under Sections 13 and 15 of the IBC. As such, on the date on which the Resolution Plan was approved by the Learned NCLT, all claims stood frozen, and no claim, which is not a part of the Resolution Plan, would survive.
15. In that view of the matter, the appeals deserve to be allowed only on this ground. It is held that the claim of the respondent, which is not part of the Resolution Plan, does not survive. The amount deposited by the appellant at the time of admission of the appeals along with interest accrued thereon is directed to be refunded to the appellant.”
7. 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.
8.1 In view of the order passed by the Co-ordinate Bench of this Tribunal vide Final Order No. A/86026-86036/2022 dated 19.07.2022 and on the basis of the judgement of the Hon’ble Supreme Court in Ghanashyam Mishra (supra) and upon taking note of the fact that the NCLT has approved the resolution plan in the insolvency proceedings in regard to the corporate debtor of the appellant-assessee company, we are of
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the view that the appeals before this Tribunal are abated.”
7. The appeal is disposed of as abated.
(Operative part of the order pronounced in the open court)
(S. S. GARG) MEMBER (JUDICIAL)
(P. ANJANI KUMAR) MEMBER (TECHNICAL)
PK
3 issues framed by the court
Whether an appeal before CESTAT abates upon approval of a Resolution Plan by NCLT under the Insolvency and Bankruptcy Code.
Whether creditors including the Central Government are bound by a Resolution Plan approved by an adjudicating authority.
Whether statutory dues not part of the approved Resolution Plan remain enforceable after its approval.
Colour shows how this judgement treated each authority
Ghanashyam Mishra & Sons Pvt Ltd vs. Edelweiss Asset Reconstruction Company Ltd & OrsApplied¶27
Ghanashyam Mishra & Sons Pvt Ltd vs. Edelweiss Asset Reconstruction Company Ltd & Ors (Civil Appeal No. 8129 of 2019)
M/s Jet Airways (India) Limited vs. Commr of Service Tax-V, MumbaiApplied¶26
M/s Jet Airways (India) Limited vs. Commr of Service Tax-V, Mumbai (Final Order No. 85896-85897/2023)
Icomm Tele Ltd. vs. Commr of Central Tax, PuducherryApplied¶26
Icomm Tele Ltd. vs. Commr of Central Tax, Puducherry (Final Order No. 30309/2023)
Ruchi SoyaExplained¶54
Ruchi Soya [2022 (380) ELT 8 (SC)]
2 provisions across 2 enactments
M/s Oliver Engg. Pvt. Ltd.
Commissioner of Central Excise & Service Tax, Ludhiana
S. S. GARG
P. ANJANI KUMAR
As recorded by the court registry
An appeal in a central excise matter before CESTAT.
Judgements on the same questions, provisions and authorities, from every court
