2025-VIL-1170-CAL-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Corporate Insolvency Resolution Process, Abatement of appeals before CESTAT, Jurisdiction of Tribunal to adjudicate the issue – Challenge to final order passed by the CESTAT, holding the appeals to have abated consequent upon the Corporate Insolvency of the petitioner's erstwhile entity – Disallowance of CENVAT credit on steel structures, parts and accessories as well as cement – Petitioner’s case that notwithstanding the abatement of the appeals, the amount deposited by the erstwhile entity by way of reversal of CENVAT credit is required to be refunded as the said amount was in nature of security deposit – HELD – The CESTAT did not act irregularly or failed to have exercised jurisdiction in not adjudicating whether the payments made in relation to the adjudication orders which formed subject matter of challenge in the appeals could constitute a claim by the operational creditor, especially when the appeals were heard on the basis of orders which waived payment of the pre deposits – Further, the Tribunal being creature of the statute in absence of any express provision could not have adjudicated as to whether the voluntary deposit made by the petitioner prior to filing of the appeals would constitute a security deposit, once, the appeals had abated. Once the appeals abated, the Tribunal's jurisdiction over the matter ceased, and Tribunal became functus officio – Further, the petitioner's argument that the voluntarily reversed CENVAT credit was a pre-deposit was untenable because BSL had explicitly sought and been granted a waiver of the pre-deposit requirement, making the reversal a voluntary act and not a deposit to maintain the appeal. Since the appeals themselves ceased to exist due to abatement, the Tribunal could not adjudicate upon a consequential claim for a refund arising from those very appeals. The Tribunal's refusal to examine the effect of the resolution plan on the reversed amount was not a failure to exercise jurisdiction but a recognition of the legal consequence of abatement - The CESTAT did not act irregularly, illegally, or in violation of principles of natural justice, and thus, no jurisdictional error was identified that would warrant interference - The writ petitions are dismissed
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