# In the matter of Central Board of Indirect Taxes and Customs Vs.
Sundaresh Bhatt The Liquidator of ABG Shipyard Company Appeal (AT) (Insolvency) No. 236 of 202

> NCLAT judgment dated 2021-11-22. Citation: TCN-2021-NCLAT-00046. This case involves an appeal against an order dated February 25, 2020, passed by the…

- **Court:** NCLAT
- **Order date:** 22 Nov 2021
- **Citation:** TCN-2021-NCLAT-00046
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/central-board-of-indirect-taxes-and-customs-vs-sundaresh-bhatt-the-liquidator-of-ccd523ff

## Summary

### Background

This case involves an appeal against an order dated February 25, 2020, passed by the Adjudicating Authority/National Company Law Tribunal, Ahmedabad Bench, in IA No. 474/2019 in Company Petition (IB) No.53/NCLT/AHM/2017. The order directed the Appellant (Central Board of Indirect Taxes and Customs) to allow the removal of materials lying in Customs Bonded Warehouses without payment of Customs Duty, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The Respondent is the Liquidator of the Corporate Debtor, ABG Shipyard. The Appellant contends that the warehoused goods do not belong to the debtor and cannot be released to the Liquidator without payment of customs duty. The Respondent argues that the Corporate Debtor is the owner of the goods and that the

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## Facts

ABG Shipyard, the Corporate Debtor, imported materials that were stored in customs bonded warehouses for constructing ships intended for export. ABG Shipyard availed benefits under the Export Promotion Capital Goods Scheme (EPCG Scheme). The Corporate Debtor failed to submit an Export Obligation Discharge Certificate (EODC), leading the Customs Authority to issue notices directing the Corporate Debtor to pay applicable customs duty. The Corporate Debtor entered liquidation on April 25, 2019. The Liquidator filed an application seeking the removal of the materials from the warehouses without paying customs duty, which was initially granted by the NCLT Ahmedabad. The Customs Department appealed this decision, arguing that the goods cannot be released without paying

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in directing the release of materials lying in …

**Ratio:** The Customs Act, 1962, specifically Sections 45, 47, 48, 68, 71, and 72, provides that

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**Reasoning:** The NCLAT reasoned that the Corporate Debtor had abandoned the imported goods in the

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**Interpretation:** The interpretation of Section 60(5) of the IBC is limited by the specific

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**Application:** The NCLAT applied the provisions of the Customs Act to the facts of the case,

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## Parties

- **Judges:** M. Venu…; V. P. S…; +1 more
- **Appellants:** Central Board of…
- **Respondents:** ABG Shi…; Sundaresh…

## Timeline

- **2012-01-01 — Import of Con…**: The Corporate Debtor imported…
- **2015-12-31 — End of Import…**: The period during which the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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