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2021 (5) TMI 45 - HC - CustomsReassessment of the Bill of Entry - dues are within the Operational debt under IBC or not - It is the case of the petitioner that the amendment to Serial No. 55 to Notification No. 12/2012-Customs dated 17.3.2012vide Notification No. 46/2015- Customs dated 17.9.2015 which increased the rate of duty from 7.5% to 12.5% cannot be said to have come into force on the date of assessment on 17.3.2012 as per the Section 25 of the Customs Act, 1962 as it stood on the date - Alternative remedy of appeal - HELD THAT:- The petitioner has an alternate remedy to file an appeal against the assessment before an Appellate Commissioner under Section 128 of the Customs Act, 1962 against the reassessment in the impugned Bill of Entry - There are no point in relegating the petitioner to work out the remedy before the Commissioner of Customs (Appeals) at this distant point of time straight away without examining the case on merits. The petitioner has also persuaded this court that a final decision may be given on merits as well. Whether the “customs duty” payable under the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975 is “an operational debt” of the petitioner within the meaning of Section 5 (21) of the IBC Code, 2016 and whether the respondent Customs Department is an “operational creditor” within the meaning of Section 5 (20) of the IBC Code, 2016? - HELD THAT:- It should be remembered that Insolvency and Bankruptcy Code 2016 was enacted with a view to provide a speedy mechanism for resolving bankruptcy and insolvency of such person. It is being implemented in a phased manner. The provisions of the Companies Act, 1956 which contained provisions for winding up has been regrafted into the IBC, 206 with modification - Under the scheme of the IBC, 2016, any “operational creditor “ or a “financial creditor” to whom a corporate debtor owes any amount above Rupees One Lakh and above is entitled to file an application for corporate insolvency resolution proceeding against such debtor under Section 9(2) of the IBC, 2016 read with Rule 6 in Form 5 before the NCLT with a fee of ₹ 2,000/- accompanied with documents and records as are required under Section 9(3) and under Regulation 7(2) - If Corporate Resolution Plan filed by Corporate Applicant is approved by the jurisdictional Company Law Board, the creditors are bound by it. “Operational debt” is incurred by a “corporate debtor” by failing to meet his liability to pay or clear the “Operational debt” as defined in Section 5(21) of the IBC, 2016. Thus, “tax” and duties levied and collected under law can never be treated as “Operational debt” as defined in Section 5(21) of IBC, 2016 - As an importer, such a person is liable to pay customs duty under Section 12 of the Customs Act, 1962 at the rates specified under the Customs Tariff Act, 1975, or any other law for the time being in force. The entire tax administration of the country is now in a pell-mell. All the tax authorities will have to make a beeline before the National Company Law Tribunal every time to recover tax dues if under any circumstances proceedings are initiated against corporate debtor under the IBC, 2016. This was not the intention when the Act was enacted - Insolvency and Bankruptcy Code (Amendment) Bill, 2019 has changed the Act. This is evident from a reading of the “Statement of Objects and Reasons” of the Insolvency and Bankruptcy Code (Amendment) Bill, 2019. Though the definition of “Operational Debt” in Section 5(21) of the IBC, 2016 is not intended to include “crown debt” such as taxes and duties payable to the Government and is distinct from the “claim” and “debt” as defined in Section 3 (6) and 3(11) of the IBC,2016, as mentioned above in the beginning of the discussion on the second part of this order, this Court is bound by the interpretation placed in the above decision of the Hon’ble Supreme Court in Ghanashym Mishra and Sons Vs. Edelweiss Asset Construction, [2021 (4) TMI 613 - SUPREME COURT] and the reasons given therein and in the light of the amendment to the IBC, 2016 in 2019 and in the light of the clarification of the Finance Minister when the 2019 bill was put to discussion in the parliament - This Court therefore partly accepts the contention of the petitioner in so far as issue relating to extinguishment of the rights of the respondent customs department to claim the customs duty in the light of the decision of the Hon’ble Supreme Court in Ghanashym Mishra and Sons Vs. Edelweiss Asset Construction referred. The case is therefore remitted back the respondent to await clarification to be obtained by the Petitioner from the National Company Law Board as to whether the Corporate Resolution Plan filed by the Corporate Applicant included the “customs duty” to be paid by the Petitioner on the import under the subject bill of entry - Petition allowed by way of remand.
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