Published on: 23 October 2022 at 10:00 IST
Court – Supreme Court of India
Citation – Sundarshan Bhatt v/s Central Board of Indirect Taxes & Customs (2022)
Hon’ble Supreme Court of India has clearly held that Insolvency and Bankruptcy Code 2016 would prevail over other acts such as Customs Act, 1962 to the extent that once moratorium is imposed in terms of Sections 14 or Section 33(5) of the Insolvency and Bankruptcy Code 2016.
However, it is held that Customs Authority can only assess / determine the quantum of customs duty and other levies during the time period of moratorium but it does not have the power to initiate recovery of dues by means of sale / confiscation.
Para – 56
On the basis of the above discussions, following are our conclusions:
i) Once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC as the case may be, the respondent authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act.
ii) After such assessment, the respondent authority has to submit its claims (concerning customs dues/operational debt) in terms of the procedure laid down, in strict compliance of the time periods prescribed under the IBC, before the adjudicating authority.
iii) In any case, the IRP/RP/liquidator can immediately secure goods from the respondent authority to be dealt with appropriately, in terms of the IBC.
Drafted By – Abhijit Mishra
Key Words – Limited Jurisidiction, Moratorium, Customs Authority.