The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai Bench has held that once the resolution plan is approved by National Company Law Tribunal (NCLT), no demands can be raised on the Resolution Applicant, Reliance Infratel.
BACKGROUND
The appellants are engaged in the activity of setting up telecommunication towers and leasing them to Telecom Service providers, and pay service tax under the category of Business Support Services in respect of activity. The appellants have availed CENVAT credit on inputs/capital goods and input services to erect telecom towers which the department had claimed as immovable property and that it is neither excisable goods nor leviable to service tax. The Department interpreted that the appellants have availed ineligible CENVAT credit, which were proposed for recovery by issue of show cause proceedings.
During the pendency of these appeals the appellants had undergone Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The National Company Law Tribunal, Court-I, Mumbai Bench (NCLT) issued are order dated 15.05.2018 for initiating CIRP under section 13 of IBC. The Resolution Plan submitted before NCLT was approved by NCLT vide order dated 03.12.2020.
The appellant submitted that the CIRP was completed on 28.12.2022 i.e., the effective date when the entire payment to the creditors in terms of the Resolution Plan was made by the resolution applicant and by taking over the management and business of the appellant.
RULING
The CESTAT held that the NCLT has approved the resolution plan in the insolvency proceedings in regard to the corporate debtor, the appeals before the CESTAT are abated.
Case Title: M/s Reliance Infratel Limited V/s Commissioner of Service Tax-VII, Mumbai
Citation: Service Tax Appeal No. 87418 of 2015