Unfiled pre-CIRP customs dues extinguished after resolution plan approval, Delhi HC rules

Jaiprakash Associates Limited imported Digital and Network Video Recorders on 15 September 2023 under Bill of Entry No. 7856824 and availed concessional Basic Customs Duty under Serial No. 499A of CBIC Notification No. 50/2017-Customs.

CIRP commenced against the Petitioner on 3 June 2024, following which a public announcement invited claims, with 17 June 2024 prescribed as the last date for submission.

The Customs Department did not submit any claim before the Resolution Professional.

During the CIRP, Customs issued a pre-notice consultation letter and subsequently a show-cause notice proposing recovery of differential customs duty of ₹5,89,366, interest and penalty on the ground that the concessional exemption was unavailable.

The Committee of Creditors approved a Resolution Plan on 31 October 2025, and the NCLT approved it under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 on 17 March 2026.

The Petitioner informed Customs of the NCLT approval and relied on Clause 4.12.1 of the Resolution Plan, which extinguished pre-CIRP claims not submitted to, or not verified by, the Resolution Professional.

Nevertheless, on 2 June 2026, the Additional Commissioner confirmed the differential duty and interest and imposed a penalty of ₹4,00,000 under Section 117 of the Customs Act.

Whether a customs liability arising from a transaction predating the Insolvency Commencement Date constitutes a “claim” under Section 3(6) of the IBC, notwithstanding that the liability had not been adjudicated or quantified before commencement of CIRP?

Whether, after approval of the Resolution Plan under Section 31(1) of the IBC, the Customs Department could continue adjudication and enforcement proceedings in respect of an unfiled pre-CIRP claim?

Whether the availability of an appellate remedy under the Customs Act barred exercise of writ jurisdiction where the challenge concerned the binding effect of the IBC and the alleged extinguishment of the claim?

The Court applied Section 3(6) of the IBC, which defines “claim” broadly to include a right to payment whether adjudicated or not, and whether fixed, disputed, unmatured or unsecured.

Sections 31(1) and 238 of the IBC were held to mean that an approved Resolution Plan binds the Corporate Debtor, creditors and governmental authorities to whom statutory dues are owed, and that claims not forming part of the plan stand extinguished and cannot thereafter be pursued; Section 238 gives the IBC overriding effect over inconsistent laws.

Relying principally on Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657, and the principles reiterated in Essar Steel India Ltd. v. Committee of Creditors, (2020) 8 SCC 531, Ireo Fiveriver Pvt. Ltd. v. Income Tax Department, and Vaibhav Goel v. Deputy Commissioner of Income Tax, the Court held that the successful resolution applicant must receive the Corporate Debtor on a “fresh slate” and cannot be confronted with undisclosed or undecided pre-CIRP claims.

ABG Shipyard Liquidator v. Central Board of Indirect Taxes & Customs, (2023) 1 SCC 472, was distinguished as permitting determination of customs dues during CIRP subject to the IBC, but not enforcement of an unfiled pre-CIRP claim after approval of the Resolution Plan.

The Court held that the relevant customs liability arose from the import transaction of 15 September 2023, substantially before the CIRP commencement date of 3 June 2024.

Under Section 3(6) of the IBC, the underlying right to payment constituted a “claim” even though Customs issued the show-cause notice and quantified the duty only during the CIRP.

The statutory public-announcement mechanism placed the responsibility on Customs, as a creditor, to submit its claim; the absence of individual notice did not excuse its failure to participate.

Once the NCLT approved the Resolution Plan, Section 31(1), reinforced by Section 238 and Clause 4.12.1 of the Plan, extinguished pre-CIRP claims that had not been submitted or verified.

The Adjudicating Authority therefore erred in requiring the Petitioner to prove that the customs liability had been placed before the RP or considered by the NCLT; the material question was whether Customs had a pre-CIRP claim and failed to file it.

The Court further held that the Customs appeal remedy was not an adequate bar because the challenge concerned the legal authority to continue proceedings after extinguishment under the IBC, rather than the merits of classification or computation.

It held that the differential customs duty arose from a pre-CIRP claim, that the Customs Department’s failure to submit the claim during CIRP could not preserve an independent right of recovery, and that the claim stood extinguished upon approval of the Resolution Plan under Section 31(1) of the IBC.

The Order-in-Original dated 2 June 2026 confirming ₹5,89,366 as differential customs duty, directing recovery of interest and imposing the penalty was quashed and set aside.

The Court clarified that it expressed no opinion on the merits of classification or exemption eligibility under the Customs Act.

The writ petition was allowed, the pending application was disposed of, and there was no order as to costs.