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2023 (7) TMI 156 - AT - Insolvency and BankruptcySeeking to release the attachment of the tiles relating to the Corporate Debtor - Attachment of goods by the GST department before initiation of CIRP - whether RP was entitled for a direction from the Adjudicating Authority for release of the goods, which were under attachment of Respondent since 02.02.2018? HELD THAT:- The Respondent has filed a reply to the Appeal, where it has been stated that Respondent has auctioned the attached tiles, but it has to refund the money received from the auction purchaser under the orders of High Court, which amount has been refunded to auction purchaser and the end result is that the attachment by the Respondent for recovery of its excise dues still continues. The attachment was for the purposes of recovering the excise dues. After commencement of the CIRP, by virtue of Section 14 of the Code, no action to recover against the Corporate Debtor by any of the creditors can be undertaken. The Respondent has also filed their claim in Form-B, which has been accepted by the RP and revised claim has also been filed by the Respondent in Form-C, relying on judgment of the Hon’ble Supreme Court in State Tax officer vs. Rainbow Paper Limited, which revised claim has not been accepted by the RP and an Application filed by Respondent with regard to revised claim is pending consideration before the Adjudicating Authority - In the present Appeal, we are not required to answer any question regarding nature of the claim of the Respondent. Only question which needs to be answered is that whether the Adjudicating Authority required to direct the Respondent to release the attachment so that assets of the Corporate Debtor can be used for the benefits of the creditors - In view of the Circular dated 23.03.2020 issued by Central Board of Excise and Customs, the Department itself has understood that when CIRP has been initiated for recovering any amount, the claim has to be filed and no recovery can be made since moratorium has been imposed under the Code. The Respondent after imposition of moratorium with effect from 27.04.2022 could not have recovered its dues. The attachment of the goods of the Corporate Debtor were made before initiation of CIRP. The assets, which were attached were still the assets of the Corporate Debtor, which were in the ‘supurdagi’ of the Corporate Debtor. Respondent being unable to recover the amount from the attached assets, the RP has rightly filed the Application seeking a direction for release of the attachment, so that assets can be included in the assets of the Corporate Debtor for payment to the creditors. The Adjudicating Authority has committed error in rejecting Application filed by RP, by holding that Adjudicating Authority has no jurisdiction to issue direction to the State Authority, when the IRP is duty bound to take custody and control of the assets belonging to the Corporate Debtor, Application under Section 60, sub-section (5), sub-clause (c) was clearly maintainable and the Adjudicating Authority had ample jurisdiction to issue necessary direction. The order dated 07.02.2023 passed by the Adjudicating Authority - the Respondent are directed to release the attachment in question - appeal allowed.
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