# Sundaresh Bhatt,  Liquidator of ABG Shipyard Vs. Central Board of Indirect Taxes And Customs Civil Appeal No. 7667 of 2021

> SC judgment dated 2022-08-26. Citation: TCN-2022-SC-00029. The Civil Appeal was filed against the impugned judgment dated 22.11.2021 passed by the National…

- **Court:** SC
- **Order date:** 26 Aug 2022
- **Citation:** TCN-2022-SC-00029
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/sundaresh-bhatt-liquidator-of-abg-shipyard-vs-central-board-of-indirect-taxes-an-22198c84

## Summary

### Background

The Civil Appeal was filed against the impugned judgment dated 22.11.2021 passed by the National Company Law Appellate Tribunal (NCLAT), New Delhi, in Company Appeal (AT) (Insolvency) No. 236 of 2021. The NCLAT had allowed the appeal filed by the Central Board of Indirect Taxes and Customs (respondent) against the order of the National Company Law Tribunal (NCLT), Ahmedabad. The NCLT had directed the release of certain goods lying in the Customs Bonded Warehouses without payment of custom duty. The Corporate Debtor, ABG Shipyard, was in the business of shipbuilding and used to import materials for constructing ships, storing them in Customs Bonded Warehouses. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 01.08.2017,

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## Facts

ABG Shipyard, the Corporate Debtor, was in the business of shipbuilding and regularly imported materials for constructing ships, which were stored in Customs Bonded Warehouses. The Corporate Debtor availed benefits under the Export Promotion Capital Goods Scheme (EPCG Scheme). On 01.08.2017, the NCLT initiated the CIRP against the Corporate Debtor, and Sundaresh Bhatt was appointed as the Interim Resolution Professional and later as the liquidator. The respondent, Central Board of Indirect Taxes and Customs, issued demand notices to the Corporate Debtor for non-fulfillment of export obligations under the EPCG licenses, demanding customs duty with interest. The respondent filed claims before the appellant under the IBC. On 25.04.2019, the NCLT passed an order commencing

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## Issues and analysis

### Issue 1: Whether the provisions of the IBC would prevail …

**Ratio:** The IBC, being the more recent statute, clearly overrides the Customs Act. This is

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**Reasoning:** The Court reasoned that the purpose of the moratorium under Section 14 of the IBC is to

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**Interpretation:** The Court interpreted Section 238 of the IBC as a non-obstante clause that

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**Application:** The Court applied the ratio to the facts of the case, holding that the demand

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## Parties

- **Judges:** N.V. RA…; J.K. MAHE…; +1 more
- **Appellants:** Sundaresh…
- **Respondents:** ABG Shi…; CENTRAL BOARD OF…
- **Other parties:** 7th Edition…; Morato…; +7 more

## Timeline

- **2017-08-01 — CIRP Init…**: The National Company Law Tribunal (NCLT), Ahmedabad, passed an order commencing the…
- **2017-08-01 — Appointment…**: Sundaresh Bhatt was appointed as the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 62(1) — Appeal to Supreme Court](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-62)

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