In the matter of Adhunik Metaliks Ltd.

NATIONAL COMPANY LAW TRIBUNAL CUTTACK BENCH rA(rBl No. L24lcBl2o25 In T.P. NO. 44|CTB|2OL9 [earlier c.P. (IB) NO. 373/KBl2ol7l (An applicationunder Section 60(5) of lhe Insoluency & Bankruptcg Code, 2016 readutitltRule 11 of NCLT Rules) In the Matter of: INDIA STATE BANK OF ...... trIreNCrAL CRpprron VpRsus LTD. ADHUNIK METALIKS ...... ConPoRATE DpsTon AND In the Matter of: ADHUNIK METALIKS LTD. Through Authorised Representative Mr. Rajiv Bajaj having Registered Office at Chadri Hariharpur, P.O.: Kuarmunda, Dist. : Sundergarh, Odisha - 77OO39. Email-rajiv.bajAi@libertyltou.s"_euk",.p_o-{t "..... Appr,rcANT VpRsus PRINCIPAL COMMISSIONER OF' CUSTOMS (PORT) at Office of the Principal Commissioner of Customs (Port), Custom House: 15ll, Strand Road, Kolkata- Bengal. 700001, West ....." RpspoNDENT OnppR PRonouwcED oN: 2L.O8"2O26 CoRanr: Cnppxerr Repna Knrsnue, MpwrspR (Juorcw| BarwaRr Lal Mpeua, Moutrnn (TecHwrcalf AppolRarcp: Fon ApplrcANT: Mn. SaswAT KUMAR AcHeRya, Anv" Mn. JersH JosHr, Apv. Fon RSSpoNDENT: Mn. Umpsn Cuerpne Sauoo, Apv.

6a SA rA(rB) NO. L24lCBI2025 In T"P. NO. 44lCTBl2ALg [earlier C.P" (IB) No" 373/KBl20171 ORDER PBn: BaNwaRI LeL MBBNe. MBnnsBn (TpcrrNrcar,l 1" The present application was filed on 07.05.2025 under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as "Code") read with Rule 11 of the NCLT Rules, 2076 seeking the following reliefs: A. An order declaring that the demand raised uide order dated. 06.03.2025 staruds extinguished, and consequentlg, quashing the order dated 06.03"2025 under ANNEXURE-I9, and all consequential pro ce eding s, if arry; B" Interim ord.ers of protection in terms of prayers (A) restrainirug the Respondent from taking anA coerciue actions against the Applicant pursuant to the impugrued demand, pending disposal of the instant, application; and C, Fass such other order(s) as this Hon'ble Tribunal deems fit, and proper in the facts and circumstcLnces of the cdse" SUMMARY OF PLEADINGS CONTENTIONS BY APPLICANT: 2, The applicant in its application has made inter alia, the following averments: a. The Counsel for the Applicant submitted that the Corporate Insolvency Resolution Process ("CIRP") against the Corporate *CD') Debtor ("Adhunik Metaliks LLd."

I was initiated under Section 7 of the Code uideorder dated O3.08.2O17 passed by the NCLT, Kolkata Bench, wherein Mr. Sumit Binani was appointed as the Resolution Professional ("RP'). b" It was submitted. that pursuant to the public announcement issued by the RP inviting claims, the final list of creditors was prepared and published on 02.O7.2018. Thereafter, the Resolution PIan submitted by Liberty House Group Pte. Ltd. 3A .qA Page 2 of L2 rA(rB) NO" r.24lCB I 2A26 H; 13:!i!9,tr8,331i,o rear,ier ""';" ("Successful Resolution Applicant" / "SRA") was approved by the Committee of Creditors ("CoC") and subsequently received approval from the NCLT, Kolkata Bench uide order dated L7.O7.2O18 under Section 31(i) of the Code" It was further submitted that although implementation issues arose leading to an order of liquidation date d 09 .OT .20 19 passed by this Adjudicating Authority, the Hon'ble NCLAT, New Delhi, uide tts judgment dated 03.Oll .2O2O in Company Appeal (AT) (lnsolvency) No. 724 oi 2019, set aside the liquidation order and held that the Resolution Plan had attained finality and was to be implemented in letter and spirit d. It was pointed out that under the express provisions of the approved Resolution Plan specifically Clause 4.1 of the DetailecX F"inancial Proposal read with Schedule 3 (Clauses 13 and nQ aII claims, liabilities, or demands pertaining to any period prior to the approval date, including dircct or indirect tax dues, statutory charges, penalties, and dutics owed to any Governmental Authorities, stood permanently extinguished, abated, and discharged in perpetuity.

It was contended that despitc the settled 1egal position, the Respondent issued a Show Cause-cum-Bond Enforcement Notice dated 18.O2.2021under Sectior-r 143(3) of the Customs Act, 1962, demanding customs duty of Rs. 1,94,60,1241- along with interest. The said notice pertained to alleged non-submission of Export Obligation Discharge Certificate ("EODC") against Export Promotion Capital Goods ("BPCG") licenses for the financiatr years ranging from 2OO9 to 2O12,long preceding the initiation of the CIRP. Further, the Responclent issued another notice dated 3 1 "O 1 .2022 to the Applicant to submit proof of discharge of EODC against different EPCG authorisations. f" The Applicant stated that replies dated 03.O2.2O22, 07.O3.2022, and 03.03.2025 were submittccl, and written notes of arguments 9a Page 3 of L2 rA(rB) NO. L24lCB|2A25 In T.P. NO" 44ICTBl2O\9 [earlier C.P. (IB) NO" 373/KBf 2OLT\ were filed during personai hei,rrings, explicitly bringing to the Respondent's notice the complotion of the CIRP, the approvai of the Resolution Plan, and the re sultant extinguishment of a1l pre- CIRP liabilities. g. The Applicant submitted that notwithstanding these comprehensive explanations, the Respondent passed the impugned Order-in-Original ("OIO") dated 06.O3.2025 (DIN: '2O25O376NN0O0O333ECD) altcr an inordinate delay of neariy four years from the initial S}-r<;w Cause Notice, confirming the demand of Rs" I,94,60,124 I - . h" The Applicant vehemently argr-rcd that the Respondent failed to submit any claim before the RP during the CIRP.

Therefore, nelying upon the "Clean Slate 'Ilheory" laid down by the Hon'ble Supreme Court tn Committee of Creditors of Essqr Steel India Limited a. Satish Kumqr Gupta & Ors. l(2O2O) 8 SCC 5311 and Ghanshyam Mishra and Sons Priaqte Limited a. Edelweiss Asset Reconstrttction Company Limited l(2O21) SCC Online SC 313], all unasserted pre CiRP claims stood frozen and extinguished, and no recovery proceedings could be initiated or continued in respect thereof. The Applicant further placecl reliance on the decisions of the Hon'ble Supreme Court in Ruchi Soga Industries Ltd. a. Union of Indial(2o22) SCC Online S(l 4551 and JSW Steel Limlted u. Fratishtha Tho.kur Haritwal U2O25) SCC Online SC 6721, wherein it was held that any trction by statutory authorities to enforce pre-CIRP demands contrary to the Ghanshl4am Mishra ruling was illegal and non-tenable in law. j" In conclusion, the Applicant surbmitted that by virtue of Section 31(1) read with the overriding effect under Section 238 of the Code, the approved Resoluujon Plan is binding on all governmental authorities. I'lcrrce, the demand raised uide the 3A- gJ Page 4 of L2 rA(rB) NO" L24lCB|2O26 In T.P.

NO.44lCTBlzALg [earlier C.P. (IB) NO" 373/KBl2AW1. impugned OIO dated 06.03.2025 was completely non-existent, illegal, and liable to be quashcd in its entirety" R"EPI,Y BY RESPONDENT: 3" The submissions by the Respondent are summarised herein: The Respondent submitted by way of Preliminary Objections that the present application filed under Section 60(5) of the Code was misconceived, non-maintainable, and liable to be dismissed for want of jurisdiction; It was contended that the Applicant was seeking to convert the insolvency jurisdiction of this Tribunal into an appellate forum to challeuge an OIO passed under the Customs Act, 1962, b" Relying upon the jurdgments ol'the Hon'ble Supreme Court in Dmbassg Propertg Deaeloprnents Put. Ltd. a. Sto:te of Karnataka & Ors. and Tata. Consultancg Seraices Ltd. a" Vishal Ghisulal Jain, the Rcspondent submitted that the NCLT cannot adjudicate disputes or sct aside orders that fall strictly within the exclusive domain and statutory appellate framework of other authorities under spccial enactments like the Customs Act, 1962. c. It was submitted that the impr.Lgned demand of Rs. 1,94,60,1241-along with interest arose or-lt of statutory proceedings initiated under Section 143(3) of thc Customs Act, 1962 due to the Applicant's failure to fulfill lDxport Obligations and non-submission of EODC undr:r conditional EPCG exemption notifications.

It was argued that these constituted statutory consequences for breach of cxcmption conditions and were not mere operational debts left unclaimed during CIRP. d" The Respondent vehemently contended that the "Clean Slate" doctrine and the protection i:n<1er Section 31(1) of the Code are not absoiute and do not gran L blanket immunity from sovereign debts, especially where the irnl>lcmentation of the Resolution Plan 3A' S.t rA(rB) NO" 124lCB(2A26 In T.P. NO" 44ICTBlzALg [earlier C.P. (IB) NO" 373/KBl2OL71 was interrupted by persistent dcfaults, protracted litigation, and an intervening order of liquidation passed by this Adjudicating Authority on 09.07 .2019 " e" trt was argued that the failure and rejection of the Resolution Plan uid"e order dated 09.O7.2O19 relrdered the proposed waivers and "haircuts" null and void, tirereby reviving the Department's statutory claims to be prtortLrzed under the Waterfall Mechanism under Section 53 of the Code. The Respondent submitted that the subsequent setting aside of the iiquidation order by the I{on'ble NCLAT uide order dated 03"03.2020 did not zpso facto extinguish the statutory liabilities that had crystallized during the intervening period of default and non-implementation.

It was asserted that the "Clean Slate" doctrine cannot be retrospectiveiy invoked to benefit an applicant frorn its own material breachcs and delays in adhering to court-mandated timelines. g" Placing reliance on the decision of the Hon'ble Supreme Court in Sundaresh Bhqtt, Liquidator of ABG Shipgard u, Central Boq.rd of Indirect Taxes and Customs (CBIC), the Respondent submitted that the Customs Authorities are well within their statutory mandate to assess, determine, and crystallize the quantum of outstanding sovereign dues, and such assessment is not prohibited by th<-' moratorium or insolvency framework. h" The Learned Counsel furtl-rcr submitted that the landmark rulings in Cornrnittee of Creditors of Essar Steel India Li.mited a. Satish Kumar Gwpta and Ghanshgam Mishra and Sons Fut. Ltd, a, Edelrueiss Asset Reconstruction Compang Ltd. relied upon by the Applicarrt were factually distinguishable and inapplicable to the unique facts of the present case, as the "Clean Slate" protection cannot serve as a cloak to wash away liabilities accrued due to non-performance. 9^---- -?4 Page 6 of L2

,'flt') 13. #f133i:3?3 [earlier C.P. (IB) NO" 373/KBl2017l i" In conclusion, the Respondent. submitted that the demand raised uid.e OIO dated 06.03.2025 remains a valid, subsisting sovereign debt and a statutory charge Llpon the assets of the CD, lawfully issued to protect the Public Exchequer. Therefore, the Respondent prayed for the disrnissal of the application with costs" ANATYSIS AND FINDINGS 4. V/e have heard the counscls; appearing for both the parties, perused the pleadings on record, zrnd examined the written notes r:f arguments and relevant judicial pr-ecedents. The primary issue that falls for our consideration is whether the Respondent/Customs Authority is entitled to demand, adjudicate, and recover customs duty/statutory dues pertaining to the pre-CIRP period (FY 2009-2ol2l after the approval and implementation of the Resolution Plan under Section 31 of the Code. 5" At the outset, dealing with thc preliminary objection raised bry the Respondent regarding the maintainability and jurisdiction of this Adjudicating Authority under Seclion 60(5) of the Code in light of Embassg Propertg Deuelopments ],ut. Ltd. u. State of Karnataka & Ors" l(2O2O) 13 SCC 3081 and Tq.ta Consultancg Seraices Ltd" u, Vislaal Ghisulql JainU2O22) 2 SCC 5831, we find the said objection to be misplaced and unmerited. The clecisions in Embassy Property and TCS pertained to scenarios during an ongoing CIRP where the Adjudicating Authority hacl erroneously ventured into adjudicating the substantive validity of statutory lease terminations or contractual breaches governed strictly by public law or private contract law" trn contrast, the present application does not call upon this Tribunal to assess the tax liability on rnerits, vcrify export obligations, or sit as an appellate authority over an OIO uncler the Customs Act, 7962. Rather, the Applicant seeks the cnforcemcnt of the statutory consequences flowing from the approval of the Resolution Plan under Section 3 1 (1) of the Code and a declaration regarding the extinguishment of pre-CIRP qA 9a Page 7 of L2

,iflT' 13:llflliil"?8 [earlier C.P. (IB) NO" 373/Ktsl?OLV| liabiiities under the settled "Clean iilate" doctrine. Such an inquiry is intrinsically linked to and arises dircctly out of the insolvency resolution process of the CD, which squarely ferlls within the residuary jurisdiction of this Adjudicating Authority uncier Section 60(5)(c) read with the overriding mandate of Section 238 of the Code. Thcrefore, this Tribunal has full iurisdiction to determinc whether the impugned demand survives post-plan approval and imlrlementation. 6" Addressing next the primary defense set up by the Respondent that the liquidation order dated 09.O7.2O 19 broke the 'clean slate'and revived the statutory claims under Section 53 of the Code. We find the sarne to be factually contrary to thc record and legally unsustainable" trt is a matter of undisputed record that the liquidation order dated A9"O7"2O19 was challenged in appcal, and the Hon'ble NCLAT uide its final judgment dated 03.03.2020 in Company Appeal (AT) (Insoluency) No. 724 of 2019 set aside the liquidation order, restored the Resolution Plan, and directed its implementation in letter and spirit. The legal effect of setting aside the liquidation order is that the order stood wiped out ab initio, rendering arry reliance on Section 53 of the Code completely redundant" Furl-hermore, the reliance placed by the Respondent on the decision o{ the Hon'ble Supreme Court in Sundaresh Bhatt, Liquidator of aBG Shipgard u. Central Board of Indirect 'Iaxes and Customs (C13rc) [QO23) 1 SCC 472], is entirely misplaced and misconstrued. In Surudaresh Bhatt, the Hon'ble Apex Court recognlzed the limited jurisdiction of the Customs Authority to assess and determine dutlr liabilitics during the pendency of a CIRP or liquidatiotL process solely for the purposc of enabling the department to lodge its claim as an operational creditor before the Resolution Frofessional or Liquidator within tire statutory timelines of the Code. The said ruling neither creates ain exception to the "Clean Slate" doctrine nor permits the Customs Authority to initiate fresh assessment and recovery proceedings years :,Lfter the approval and successful implementation of a Resolution Plarr under Section 31(1) of the Code. a1 \ -.-- 5q Page 8 of L2 3.q

,ifl'Xl 13:l?fl83i33?3 [carlier C.P" (IB) NO" 373/KBl20171 In the present case, both the Show Cause Notice dated lB.O2.2O2i and the impugned OIO dated 06.03.2025 were issued long after the R.esolution Plan was approved and implemented pursuant to the F{on'ble NCLAT's final order datcd O3.O3.2O2O. Consequently, the Respondent cannot seek shelter under Sundaresh Bhatt to validate an otherwise extinguished pre-CIRP demand. 7. It is undisputed that the demand of 1?s. 7,94,60,1241 -corresponds to non-submission of EODCs under trPCG licenses for the period FY 2009 to F'Y 2012, which is long prior to the Insolvency Commencement Date (03.08.2017). It is equally undisputed that the Respondent did not lodge any claim before the RP during the CIRP. E" The question of whether unasserted pre-CIRP claims of statutory authorities survive against SltA is no longer res integra. In Comrnittee of Areditors of Essar Steel Indio. Limited u. Sa,tish Kumar Gupta, & Ors" 8 SCC 531], the Horrble Supreme Courtlaid down the l(2O2O) *tClean Slate Theory" and observed as under: * 1 05. Section 3 1 ( 1 ) of the Code makes it clear that once a resolution plan is approued by the Committee of Creditors it shall be binding on all stakeholders, including guarantors. 'Ihls ls for the reason that this prouision ensures that the successrful resolution applicarut starts rururuing the business of the corporate debtor oru a fresh slate as it were.

10;; .." A successJuL resolution applicant cannot sud-d.erily be faced. with "urudecided" claims afler the resolution plan submitted by him has been accepted as this u.totLld amount to a hydra head popping up ultich would tLtrout into uncertainty amounts payable bA a prospectiue resolution applicant who successfully take ouer the business of the corporate debtor. All claims must be submitted to arud decided by the resolution professional so that a prospectiue resolution applicant lcnows exactlg uhat has to be paid in order that it may then talce ouer and run the business o/ the corporate SA Page 9 of L2 Sa --------2

,'flH) 13. i:fIFXi;8?S [earlier C.P. (IB) NO" 373/KBl?OLV| debtor. TLtis the successf/l resolution applicarut does orl a fresh slate." 9" Reiterating and expanding this principle specifically to statutory dues owed to Central and State Governments, the Hon'ble Supreme Cor.rrt in Ghanshgam Mishro. and Sons Priaate Limited a, Edelweiss Asset Reconstruction Compang Limited, l(2021) SCC Online SC 3131, held as follows: "95. In the result, we ansu)er the questiorus framed bg us as under: (i) That once a resolutioru plaru ls duly approued by the Ad.judicating Authority under subsection (l) of Section 31, the claims as prouided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and l/s employees, members, creditors, including the Certral Gouernmen| e.nq State Gouemment or any local authonty, guarantors arud other stakeholders. On the date of approuaL of resolution plan by the AcLjudicating Autltonty, all sueh claims, uthich are rtot a part of resolutioru plan, shall stand extinguished and no person uill be entitled to initiate or continue anA proceedings in respect to a claim, uhich is not part of the resolution plan; (ii)2019 amend"ment to Section 31 of the I&B Cod"e is clarificatory and declaratory in nature and therefore will be effectiue from the date on uhich I&B Code has come into effect; (iii) Consequentlg qllthe dues including the statutory dues owed to the Central Goaernment, ang State Gouernment or ang local authoritg, if not pqrt of the resolution plano shall stand extinguished and no proceedings in respect of such dues Jor the period prior to the date on which the Adjudicating Authoritg grants its approual under Section 37 could be contintted."

Sd SA Page LO of 12 l# ,"'flT l?flg.,rii,8?S [carlier C"P" (IB) NO. 373/KBl2OLV| 3.0" The aforesaid position was specifically applied to the demands of the Customs Department in Ruchi Soga Industries Ltd" u" Union of, Indial(2O22) SCC Online SC 4551. Moreover, the High Court of Orissa in the Applicant's own matter, titled Adhunik Metaliks Ltd, a, State of Odisha, W.P. (C) No. 1553 of 2022 (Order dated 08"t2.2O22\, quashed all the pre-CIRI'J tax demands by applying the GhansLtAam IWishra ruling. 1. Recently, in JSW Steel Limited o. Pratishtha Thakur 1 tr{aritual [2025 SCC Onl,ine SC 672], the Hon'ble Supreme Court deprecated the practice ol statutory authorities continuing recovery proceedings in disregard oI the clean slate doctrine, holding as follows: "45" Undoubtedly, inthe preserut case, in spite of publicnotice, neither the State of Chhattisgarh nor its auttnrities raised any claim before the CoC. Iru that uiew of the matter, we are of the considered uiew that the case of the present Petitioner is specifically couered bg the judgment of this Court in the case of Gharushyam Mishra (supra), which judgment was brought to the notice of the respondents/ authorities, the respondents/ authorities could not haue proceeded with the recouerA proceedings. 45" When the latu laid dotun by this Court in the cdse of Gharushgam Mishra (supra) is clear and unambiqttous arud specificallg uthen the Petitioner's own case u)as patl of the batclt uthich is specifi"cally dealt witLt bg this Court, the respondents/ alleged contemnors ought not to haue proceeded further uith the recouery proceedings and ought to haue dropped them forthuLith. The continuation of such proceedings despite the judgment and order of this Court being pointed out to their notice is nothing but contemptuous in ruature. 47" We haue, therefore, ruo hesitation in holdirug that the continuation of the proceedings bA the resporuderuts/ authonties euen after the judgment of this Court in Ghanashyam Mishra. was specifi.cally brought to their notice is corutemptuous in nature. Ifotueuer, LUe do not / sa S.l *age r. Lof L2

,I3 ,iflT :?fli3i3373 [carlier C.P" (IB) No. 373/KBl2OLVtr propose to proceed against the resporudent contemnors inasmuch as they are erutitled to beruefit of doubt." 1,2" in light of the statutory scheme of Section 3 1(1) read with Section 238 of the Code and the settled judicial precedents, all claims of the Respondent pertaining to the pre-CIRP period stand cxtinguished in perpetuity, rendering the demand arising out of Orde r-in-Original dated 06.A3.2025 legally unenforceable against the Applicant/Corporate Debtor. Accordingly, the present Interlocutory Application I.A. (IB) No. L24lCB|2O25 is ALLOWED with the following directions: a" The demand of Rs. 1,94,6O,L241- along with applicable interest and penalties raised vidr: Order-in-Original No. KoL/CUs/PoRT/ Ac l334lE'oIs[C 12o25 dated o6.03.2o25 (DINI 2O25O376NNOOOO333ECD) stands extinguished in terms of the law laid down by the Hon'ble Supreme Court in Ghanshgam Mishra and. Sons Pat. Ltd," u. Ed.ekrreiss Asset Reconshttction Co. Ltd, and is rendercd non-enforceable against the Applicantl Corporate Debtor" b" The Respondent shall not initiate or pursue any coercive recovery proceedings against the Applicant/Corporate Debtor or its management in respcct of the aforesaid extinguished demand. 13, Accordingly, I.A. (IB) No. L24lCBl2025 in T.P. No. 44{CfBl2OL9 stands disposed of.

5rr 3a BAT\trARI tAL MEENA CHEEI{ATI RADHA KRISHNA MEMBER (TECHNTCALI MEMBER (JUDICIAL}

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