Case Details: Nirmal Lifestyle Realty Pvt. Ltd. vs. Commissioner of Customs and Excise, Mumbai-III (2025) 34 Centax 3 (Bom.)
Judiciary and Counsel Details
- M.S. Sonak & Jitendra Jain, JJ.
- S/Shri Shyam Kapadia, a/w., Shikha Ginodia, Guarav Suryavanshi, Advs. & Eepsa Bansal, i/b. ANM Global, for the Appellant.
- S/Shri Ram Ochani, a/w. & Harshad Shingnapurkar, for the Respondent.
Facts of the Case
The appellant filed an appeal under Section 35G of the Central Excise Act, 1944 against an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). After the CESTAT order, and before the filing of the appeal, the National Company Law Tribunal (NCLT) approved the appellant’s resolution plan under Section 31 of the Insolvency and Bankruptcy Code, 2016. The appellant contended before the High Court that, upon such approval, all past liabilities stood extinguished and therefore the CESTAT order ought to be quashed. The department submitted that the plea regarding the effect of the insolvency process had not arisen before the adjudicating authority or the CESTAT and sought an opportunity to address factual issues by placing additional material. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that a substantial question of law under Section 35G of the Central Excise Act, 1944 should ordinarily have arisen before the CESTAT, and the issue arising from the NCLT’s approval of the resolution plan was neither raised before the CESTAT nor involved in the appeal before the Court. The Court observed that it would be inappropriate to decide the appeal solely on the basis of the NCLT order, yet such subsequent development under the IBC could not be ignored. The Court reasoned that remanding the matter would enable the CESTAT to consider the effect of the approved resolution plan while permitting the department to place all relevant material concerning the insolvency proceedings. The Court accordingly set aside the CESTAT order and remanded the matter to the CESTAT to consider the NCLT order and allow the department to produce additional relevant material.
List of Cases Reviewed
- Nirmal Lifestyle Realty Pvt. Ltd. — Order dated 11-12-2017 by CESTAT, Mumbai — Remanded [Paras 2, 15]
List of Cases Cited
- Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited — (2021) 9 SCC 657 — Followed [Paras 4, 12]
- Patanjali Foods Limited v. Commissioner — (2025) 36 Centax 26 (Kar.) — Distinguishesd [Paras 5, 11]
- Commissioner v. Patanjali Foods Limited — (2025) 36 Centax 178 (Guj.) — Distinguishesd [Paras 5, 11]
