Brief Facts of the case:

Corporate Debtor imported machinery from outside India, custom duty as assessed the custom officer was not paid in full by the corporate debtor due to dispute regarding amount of duty. Department carry out certain e-auction for disposal of uncleared imported cargo but not find any bidder. Corporate debtor filed an application u/s 10 for corporate Insolvency Resolution Process (CIRP) which was admitted by the NCLT and moratorium was imposed. Post that customs department again carried out the e-auction which was challenged by the RP of corporate debtor and filed an application with NCLT praying for issuing directions to the Appellant not to proceed with e-auction of machineries. While NCLT accepted the application, custom department challenged the order in NCLAT.

Question before Adjudicating Authority:

Whether custom department can carry out e-auction of goods of corporate debtor during the CIRP period which are lying with them due to non-payment of custom duty? And whether Resolution professional can take control of this asset?

Legal Position:

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