Customs Authorities can invoke Bank Guarantee/Fixed Deposit, made against Zero Import Duty, during moratorium period in force under Section 14 of IBC – Mr. Vijay Kumar Garg, Liquidator of Lance Vidarbha Thermal Power Ltd. Vs. Deputy Commissioner of Customs, Division-I, Nagpur – NCLAT Chennai

NCLAT held that: (i) In the present case, invocation of BG is not about recovery of any claim by the customs authorities, but is about revocation of surety provided by the Corporate Debtor to the customs authorities in the form of FDRs and BG. (ii) ABG Shipyard vs. Central Board of Indirect Taxes and Customs (2022) ibclaw.in 103 SC is distinguished on the basis that in the present case, the customs authorities are not recovering any amount on the basis of assessed customs/import duty, but the issue in the appeal is about invocation of the BG and FDRs. (iii) In the light of the judgment in the matter of V. Ramakrishnan & Anr. (supra) and of in the matter of Bharat Aluminium Co. Ltd. vs. M/s. J.P. Engineers Pvt. Ltd. & Anr.(supra), it is clear that section 14(3)(b) allows for invocation of BGs.

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