2024 (5) TMI 805 - AT - Central Excise

Abatement of appeal - Resolution Plan approved by NCLT - recovery of CENVAT Credit with interest and penalties - HELD THAT - The identical matter has been considered by two coordinate benches of the Tribunal in the case of M/s Jet Airways (India) Limited vs. Commissioner of Service Tax-IV 2023 (5) TMI 767 - CESTAT MUMBAI and Hyderabad Bench in the case of Icomm Tele Ltd. vs. Commissioner of Central Tax Puducherry 2023 (10) TMI 1344 - CESTAT HYDERABAD . It is pertinent to refer the findings of Mumbai Bench of the Tribunal in the case of M/s Jet Airways (India) Limited 2023 (5) TMI 767 - CESTAT MUMBAI which was disposed of and it was ordered that the appeals stand abated once the Resolution Plan has been approved by NCLT and the CESTAT has become functus officio in the matters relating to this appeal. Once the Resolution Plan has been approved by the NCLT thereafter the present appeal stands abated as the CESTAT has become functus officio in the matter relating to the present appeal - the appeal filed by the appellant is disposed of as abated.

Summary

Issues involved:
The issues involved in the judgment are the disallowance of Cenvat Credit, recovery of the disallowed amount along with interest, imposition of penalties under the Cenvat Credit Rules, and the abatement of the appeal due to the approval of the Resolution Plan by the NCLT.

Disallowance of Cenvat Credit and Recovery:
The Commissioner disallowed Cenvat Credit under Rule 14 of the Cenvat Credit Rules, 2004, u/s 11 A of the Central Excise Act, 1944, and ordered the recovery of the disallowed amount along with interest u/s 11AB of the Act. Another disallowance was made under the same provisions for a different amount, with an order for recovery along with interest u/s 11 AB (now 11AA) of the Act. Penalties were imposed under Rule 15 of the Cenvat Credit Rules, 2004, read with Section 11AC of the Central Excise Act, 1944.

Abatement of Appeal due to Resolution Plan Approval:
The appellant's financial difficulties led to the initiation of Corporate Insolvency Resolution Process (CIRP) against the appellant's company. The NCLT approved the Resolution Plan, which became effective on a specified date. The Tribunal considered the Resolution Plan and found similar matters had been considered by other benches. The Tribunal referred to a relevant Supreme Court decision and a CBIC instruction regarding the binding nature of approved Resolution Plans on creditors, extinguishing claims not part of the plan. The Tribunal noted that once a Resolution Plan is approved, the appeal stands abated, and the Tribunal becomes functus officio in the matter.

Conclusion:
In line with the decision of a Co-ordinate Bench and the Supreme Court judgment, the Tribunal held that the appeal abates due to the approval of the Resolution Plan by the NCLT. The Tribunal found that it had become functus officio in matters relating to the appeal and disposed of the appeal as abated.