NCLAT Delhi Rules Section 11E Claims Under Central Excise Act Are Not Secured Debt

The NCLAT held that claims under Section 11E of the Central Excise Act, 1944, cannot qualify as secured debt, as "secured interest" under the IBC excludes charges created by operation of law.

It distinguished Section 11E from Section 48 of the Gujarat VAT Act, 2003, ruling that the Supreme Court’s judgment in State Tax Officer vs. Rainbow Papers Limited (2023) does not apply.

Referring to Assistant Commissioner of Central Tax (2021), the tribunal reiterated that Section 11E claims must follow the IBC framework.

The NCLAT upheld the NCLT’s resolution plan approval, treating the claim as operational debt under Section 30(2)(b), and dismissed the appeal.