# In the matter of Principal Commissioner of Customs & Ors. vs. Pratim Bayal

> NCLAT judgment dated 2024-04-19. Citation: TCN-2024-NCLAT-00493. This case involves an appeal against an order dated 05.06.2023 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 19 Apr 2024
- **Citation:** TCN-2024-NCLAT-00493
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/principal-commissioner-of-customs-ors-vs-pratim-bayal-0544656f

## Summary

### Background

This case involves an appeal against an order dated 05.06.2023 passed by the National Company Law Tribunal (NCLT), Kolkata Bench, in IA No.749. The Resolution Professional (RP) of B.K.M. Industries Limited filed an application seeking the release of assets comprising machineries of the Corporate Debtor. The Adjudicating Authority allowed the application and directed the release of the assets. Aggrieved by this order, the Principal Commissioner of Customs and others filed the appeal.

## Facts

M/s. B.K.M. Industries Limited faced Corporate Insolvency Resolution Process (CIRP) starting 30.12.2020. Prior to CIRP, B.K.M. Industries had an agreement with Maruti Cottex Limited to transfer machinery to its Nigerian subsidiary. Customs Authorities seized a consignment being exported by Maruti Cottex Ltd. on 06.03.2019. A Show-Cause Notice was issued to B.K.M. Industries and Maruti Cottex Ltd. Additional Commissioner confiscated the goods on 03.12.2020, under Section 113(i) of the Customs Act, 1962, offering redemption on payment of Rs.16,83,872/-. The Interim Resolution Professional (IRP) requested the Customs Department to return the goods on 05.06.2021, with reminders issued later. After no response, IA No.749 of 2021 was filed by the RP seeking release of the

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## Issues and analysis

### Issue 1: Whether the order of the Adjudicating Authority directing the release of confiscated goods is …

**Ratio:** The vesting of goods with the Central Government occurs upon confiscation under Section

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**Reasoning:** The NCLAT reasoned that the Adjudicating Authority's order was unsustainable because it

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**Interpretation:** Section 126(1) of the Customs Act clearly states that when goods are

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**Application:** Since the goods were confiscated before the CIRP, and the Corporate Debtor did

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Principal…
- **Respondents:** B.K.M. Industries…; PratimB…
- **Advocates:** Piyush Be…; Nikhil Kumar…; +2 more

## Timeline

- **2019-03-06 — Seizure of Con…**: Customs Authorities seized a consignment…
- **2020-12-03 — Confiscatio…**: Additional Commissioner confiscated the goods under Section 113(i) of the Customs Act,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 18(f) — Duties of interim resolution professional](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-18)

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