TATA Steel Took Over Bhushan Steel: CESTAT Clarifies Appeals Are Abated Post RP Approval By NCLT Under IBC, It Becomes Functus Officio [Read Order]

The Hyderabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) clarified that appeals abate and the tribunal becomes functus officio ( devoid of authority ) once a resolution plan is approved under the Insolvency and Bankruptcy Code ( IBC ).

Tata Steel Limited, the appellant, acquired Bhushan Steel Limited through a resolution plan approved by the NCLT on May 15, 2018, as part of the Corporate Insolvency Resolution Process (CIRP). The appeals arose from multiple orders issued by the Commissioner of Customs, Central Excise, and Service Tax (Appeals).

The Kolkata Bench of the Tribunal had previously ruled that similar appeals abate under Rule 22 of the CESTAT (Procedure) Rules, 1982, following the approval of a resolution plan. The revenue department argued that the same principle also covered the appeals under consideration in the Hyderabad Bench and should abate accordingly.

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The appellant’s counsel sought an adjournment due to the unavailability of the designated lawyer but the tribunal declined the request citing the legal clarity established in earlier decisions by the Kolkata Bench and the Supreme Court, including Ghanshyam Mishra and Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd.

The Kolkata Bench Tribunal referred to Rule 41 of the CESTAT (Procedure) Rules, which explains that the CESTAT becomes functus officio (lacking authority) once appeals abate. The revenue further argued that three of the appeals listed had already been withdrawn due to monetary limits and that the remaining appeals were no longer substantial.

The two-member bench, comprising A.K. Jyotishi (Technical Member) and Angad Prasad (Judicial Member), agreed with the Revenue’s arguments. The tribunal observed that appeals automatically abate from the date the NCLT approves the resolution plan, making further proceedings non-maintainable.

The tribunal explained that any orders passed beyond its vested powers would be non-est in law (invalid) and that these appeals had become infructuous due to the resolution plan's approval, with no further issues for adjudication. The Commissioner's appeals were deemed abated with effect from May 15, 2018, and the tribunal dismissed the matter accordingly.

To Read the full text of the Order CLICK HERE

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