Insolvency and Bankruptcy Code (IBC) 2016 was implemented through an act of Parliament. It got Presidential assent in May 2016. Centre introduced the IBC in 2016 to resolve claims involving insolvent companies. The Insolvency and Bankruptcy Code, 2016 (IBC) enacted on May 28, 2016, against the backdrop of mounting non-performing loans, with a view to establishing a consolidated framework for insolvency resolution of corporations, partnership firms and individuals in a time-bound manner. The IBC Code provides an international standard for the safe carriage in bulk by sea of dangerous chemicals and noxious liquid substances listed in chapter 17 of the Insolvency and Bankruptcy Code.

The bankruptcy code is a one stop solution for resolving insolvencies, which previously was a long process that did not offer an economically viable arrangement. The code aims to protect the interests of small investors and make the process of doing business less cumbersome. The IBC has 255 sections and 11 Schedules. IBC was intended to tackle the bad loan problems that were affecting the banking system. It provides for a time-bound process to resolve insolvency. When a default in repayment occurs, creditors gain control over debtor’s assets and must take decisions to resolve insolvency. Under IBC, debtor and creditor both can start ‘recovery’ proceedings against each other. The IBC process has changed the debtor-creditor relationship. A number of major cases have been resolved in two years, while some others are in advanced stages of resolution.

PROCESS OF IBC- starts by the initiation of CIRP against the corporate debtor through the application to be filed at NCLT, after the acceptance of this application NCLT will pass the order declaring the moratorium for prohibiting certain required actions, and then a committee will form of the creditors which will appoint resolution professional, which will prepare the information memorandum than comes the approval of the resolution plan within 180 days from the initiation of the CIRP at the final stage.

Customs Duty is an Indirect tax collected by Central Govt. on Imports and Export of goods.  Customs Duty in India is governed by the Customs Act 1962. All the business entity who is interested in Import or export business needs to register with customs or engage a clearing forwarding agent before they can actually start the work. Custom duty rates in India are same as Excise duty rate of customs duty. It depends on goods and exhaustive lists are provided in the Customs Tariff Act.

In developing, a nation the importance of custom duty is very important for its local traders or manufacturers.

• Customs duty is applied to provide protection to the local developing industries against multinational companies by charging them some amount for a fixed period of time.
• It provides a fair and equal opportunity to both entities to expand for their market. 
• It proves a source of revenue for the government.
• It promotes the export of the country.
• It saves foreign exchange.

Following are broad categories which are generally exempt from Customs Duty:-

• Export-oriented units
• Certain SEZ
• Export of goods as provided in the Finance Act.
• Imports as provided in the Finance Act of that particular Year
• Imports mean for Govt. Agencies consumptions

The Supreme Court in the case of SUNARESH BHATT, LIQUIDATOR OF ABG SHIPYARD VERSUS CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS has held that in case of any conflict, the Insolvency and Bankruptcy Code will override the Customs Act.  CJI Ramana led bench has observed that-

“The IBC would prevail over the Customs Act, to the extent that once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC as the case may be, the respondent authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act.”

The top court bench also comprising Justices JK Maheshwari and Hima Kohli has held that once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC, as the case may be, the Central Board of Indirect Taxes and Customs only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. It has been further clarified that the authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act. Top Court has held that NCLAT had not directly answered the question of law but had entered into the facts of the case to distinguish the applicability of IBC as compared to the Customs Act. It has been further held that the IBC, being the more recent statute, clearly overrides the Customs Act.