M/S. Tata Steel Limited (Formerly Tata Steel Bsl Limited) vs. Union Of INDIA And Ors.

Held

The Court held that the CESTAT did not act irregularly or fail to exercise its jurisdiction in not adjudicating whether the payments made in relation to the adjudication orders, which formed the subject matter of the appeals, could constitute a claim by the respondent no.2. The Court reasoned that the appeals were heard on the basis of orders waiving pre-deposits, and that the CESTAT, as a creature of statute, could not adjudicate on the voluntary deposit made by the petitioner prior to the appeals as a security deposit once the appeals had abated. The Court found no irregularity or jurisdictional error in the CESTAT's common order, noting that the respondent no.2, as an operational creditor, did not include any claim related to the disputed assessment in its filings, and that the appeals stood abated by operation of law. The petitioner failed to identify any illegality or violation of principles of natural justice. Therefore, no interference was called for.

Facts

The petitioner, M/s. Tata Steel Limited (formerly M/s. Bhusan Steel Ltd. - BSL), filed writ petitions challenging a common final order dated April 16, 2024, by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had held that appeals filed by BSL against orders disallowing CENVAT credit had abated due to the corporate insolvency of BSL. The dispute concerns CENVAT credit taken on steel structures, parts, accessories, and cement procured by BSL between August 2005 and July 2009, which the revenue authorities classified as "supporting structures" and not "capital goods." The total disputed CENVAT credit amounted to approximately Rs. 170.30 crores across four orders in original. BSL had reversed the credit under protest and filed appeals before the CESTAT, which were stayed pending pre-deposit waiver.

Key Issues

1. Whether the CESTAT erred in holding that the appeals filed by the petitioner's erstwhile entity, M/s. Bhusan Steel Ltd. (BSL), abated due to the corporate insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC)? Petitioner's Argument: The petitioner contended that the resolution plan approved under the IBC provided for the extinguishment of all claims, including tax dues, whether claimed or not, prior to its approval. They argued that the petitioner took over BSL's assets, including receivables, and that the abatement of appeals by the CESTAT was irregular, especially since the respondent no.2 (an operational creditor) did not file a claim for the disputed amount. The petitioner relied on the Supreme Court's decision in Ghanashyam Mishra and Sons Pvt. Ltd. to argue that the resolution plan's provisions should be upheld. Revenue's Argument: The revenue authorities argued that the CESTAT acted within its jurisdiction by holding the appeals to have abated. They contended that the IBC and relevant rules do not provide for the adjudication of claims in abated appeals, and that the petitioner had not identified any illegality or violation of natural justice in the CESTAT's order. The revenue emphasized that taxing statutes must be interpreted strictly based on their literal wording, without equitable considerations.