CESTAT Appeal Abates From The Date Of Approval Of The Resolution Plan By The NCLT: CESTAT

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that from the date of approval of the resolution plan by the National Company Law Appellate Tribunal (NCLT), the appeal filed by the applicant has abated, and CESTAT has become functus officio in the matters relating to the appeal filed by Jet Airways.

The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that the NCLT has approved the resolution plan in the insolvency proceedings with regard to the corporate debtor of the appellant-assessee company, and the appeals before CESTAT are abated.

The proceedings were initiated under Section 73(1A) for the recovery of service tax on codeshare charges and interline service charges. The Commissioner of Service Tax-V, Mumbai, adjudged the case, confirming the demands for Rs. 20,28,56,543 along with applicable interest, besides the imposition of a penalty under Section 78 of the said Act.

During the pendency of the appeals, the appellant-assessee faced financial difficulties, and an application was filed by one of the financial creditors under Section 7 of the Insolvency and Bankruptcy Code, 2016 for recovering debts owned by the appellant-assessee company.

The National Company Law Tribunal, Hyderabad Bench (NCLT) issued an order dated June 20, 2019 for initiating the Corporate Insolvency Resolution Process (CIRP) in regard to the appellant-assessed company under Section 13 of the IBC.

A resolution plan was floated by the resolution professional for approval by the Committee of Creditors. The resolution plan submitted before NCLT was approved by NCLT vide order dated June 22, 2021, and the resolution plan is effective from this date, i.e., the NCLT Approval Date.

The tribunal relied on the decision of the Supreme Court in Ghanashyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. & Ors. and upon taking note of the fact that the NCLT has approved the resolution plan in the insolvency proceedings with regard to the corporate debtor of the appellant-assessee company, the appeals before CESTAT are abated.

Case Title: M/s Jet Airways (India) Limited Versus Commissioner of Service Tax-V, Mumbai

Case No.: Service Tax Appeal No. 86949 of 2015

Date: 12.05.2023

Counsel For Appellant: Anand Kumar

Counsel For Respondent: Gopal Mundra

Click Here To Read The Order