PRINCIPAL BENCH, NEW DELHI
IN THE MATTER OF:
Pradeep Kumar Kabra,
Vs
Assistant Commissioner, CGST & Central Excise
BRIEF FACTS OF THE CASE:
The instant appeal was filed by Resolution Professional (“RP”) of Corporate Debtor M/s Cengres Tiles Limited challenging the order passed by the National Company Law Tribunal, Ahmedabad Bench Ahmedabad, rejecting interim application filed by the RP, seeking direction to Assistant Commissioner of CGST & Central Excise to release the attachment of the tiles relating to the Corporate Debtor.
FACTUAL MATRIX:
- M/s Cengres Tiles Limited – the Corporate Debtor is engaged in the business of manufacturing of non-metallic minerals products including tiles. On 02.02.2018, the Respondent for the purpose of recovering central excise due for an amount of Rs.5,10,12,500/- attached the 81,620 boxes of vitrified tiles. The Panchanma was drawn on 02.02.2018, under which goods were put under ‘supurdagi’.
- On an Application filed by Axis Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, Corporate Insolvency Resolution Process (“CIRP”) was initiated against the Corporate Debtor vide order dated 04.03.2021 by the Adjudicating Authority. The Appellant was appointed as the RP in the Meeting of the Committee of Creditors (“CoC”) dated 23.05.2022.
- The Respondent had submitted its claim to the erstwhile Interim Resolution Professional (“IRP”) under Form B of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016) claiming a sum of Rs.39,62,94,872/-, which also included the amount of Rs.5,10,12,500/- for recovering which excise duty, tiles were attached.
- The RP issued a letter dated 10.09.2022 to the Respondent requesting them to release the attached goods. The RP filed an interlocutory application before the Adjudicating Authority, wherein following prayers were made:
“[A] That this Hon’ble Adjudicating Authority may be pleased to allow the present application, in the interest of justice;
(B] That this Hon’ble Adjudicating Authority may be pleased to direct the opponent to forthwith release the goods (viz. vitrified tiles) seized by opponent as per Panchnama dated 02.02.2018 in favour of Corporate Debtor, in the interest of justice;
[C] That this Hon’ble Tribunal may be pleased to grant such other and further reliefs as may be deemed fit and proper by this Hon’ble Tribunal, in the interest of justice;”
- The Adjudicating Authority rejected the Application, observing that Adjudicating Authority has no jurisdiction to issue direction to the State Authorities about the action, which are taken prior to the CIRP and RP to approach the proper Forum.
ISSUE IN QUESTION:
The question which arise for consideration in the Appeal is as to 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?
OBSERVATION:
It was observed that 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.
HELD:
The Appeal was allowed and set-aside the impugned order passed by the Adjudicating Authority and it was further directed the Respondent to release the attachment in question.
Written by:
Advocate Deepak Gollen
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