The Chennai bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that appeal before the tribunal abates from the date of approval of the resolution plan by the National Company Law Tribunal (NCLT).
M/s. Dhanalakshmi Paper Mills Pvt. Ltd, the appellant challenged the Order in Appeal No. 269/2013 passed by the Commissioner of Central Excise (Appeals), Madurai. The appellants are engaged in the manufacture of paper and paper products classifiable under Chapter 48 of the Central Excise Tariff Act (CETA), 1985.
It was found that the appellants had imported machinery during the year 2006 – 07 for which they had paid a commission to the foreign agency for facilitating the procurement of machinery which comes under the ambit of Business Auxiliary Service. The appellants did not discharge their service tax liability on commission paid to foreign agents.
A Show Cause Notice was issued to the appellants seeking to demand the service tax amount which was not paid along with interest and penalty. After due process of law, the original authority confirmed the proposals in the Show Cause Notice and demanded an amount of Rs.4,94,606/- being the service tax payable on ‘Business Auxiliary Service’ along with applicable interest.
The adjudicating authority also imposed penalties under various provisions of the Finance Act, of 1994. The Commissioner (Appeals) affirmed the demand and dismissed the appeal filed by the appellant.
Shri D. Jaishankar appeared for the appellant and Shri N. Satyanarayanan appeared for the Revenue.
The counsel for the appellant submitted that the Resolution Professional has approached NCLT against the appellant and the NCLT has approved the Resolution Plan under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code, 2016 (Code).
The Tribunal observed that the order of the NCLT, Chennai dated 26.3.2019 has approved the Resolution Plan of the Resolution Professional which is bound to the Corporate Debtors and other stakeholders involved. As per the non-obstante clause of Section 238 of the Code, the provisions of the Code will have an overriding effect if there are any inconsistencies with any of the provisions of the law for the time being in force.
In light of Ghanashyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd. & Ors. the two-member bench Shri P. Dinesha, Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) that “the appeal filed before this Tribunal abates. The matter is disposed of accordingly.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
