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Showing 41 to 60 of 412 Records
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2025 (1) TMI 372
Addition u/s. 69A - unaccounted deposits introduced by the assessee into the firm - HELD THAT:- It is admitted fact that the additions had been made by the AO based on incriminating material only. Further, we have observed that the financial position extracted / culled out and furnished by the assessee from the incriminating materialsi.e. books of accounts maintained in the software ‘foxpro’ available and perused by the AO.
The extract prepared from books seized cannot be regarded as fresh evidence, within the meaning of Rule 46A of the IT. Rules 1962. Balances of receivable from the borrowers are carried forward from the preceding financial years.
Hence, we find force in the argument of the Ld.AR that the opening balance cannot be added as income of the current year by invoking section 69A -
AO made addition based on the loose sheets seized but without bringing on record any other evidence to support his case that the amount in question was invested by the partner during the year under appeal. We also note that the Ld.DR could not produce any evidence to support the point that the amount in question was invested by the partner into the firm in the impugned assessment year.
The amount in question, being opening balance, cannot be added as income of the assessee u/s. 69A of the Act and we find no infirmity in the order of the ld.CIT(A) in so far as his direction to delete the addition made by the AO and hence, we uphold the same.
Addition u/s 69A apply to the deposits made by a partner into the firm - Amount of deposit made by the partner into the firm would not fall under the provisions of section 69A of the Act and therefore, we find no infirmity in the order passed by CIT(A) in holding that the addition made u/s. 69A of the Act is invalid.
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2025 (1) TMI 371
Addition u/s 68 - bogus LTCG - Investigation Wing had carried out investigation with regard to the price manipulations and generation of bogus long term capital gains in number of stocks, classified as penny stocks - HELD THAT:- We notice that the investigation report prepared by Investigation Wing is a generalized report with regard to the modus operandi adopted in manipulation of prices of certain shares and generation of bogus capital gains.
AO has placed reliance on the said report without bringing any material on record to show that the transactions entered by the assessee were found to be a part of manipulated transactions, i.e., it was not proved that the assessee has carried out the transactions of purchase and sale of shares in connivance with the people who were involved in the alleged rigging of prices. It is stated by the Ld.AR that the transactions carried on by the assessee were not subjected to scrutiny by SEBI at all.
AO has recorded statement from the assessee u/s 131 of the Act, but he could not find any fault with the assessee. AO has only observed that the assessee could not explain as to why he invested in the shares of company, whose fundamentals are weak. However, the assessee had stated that she has made investment on the basis of market information that the future of this company is bright. In our view, the rationale of making investment may not be relevant to arrive at the conclusion that the transactions of purchase and sale of shares are bogus.
AO has also referred to a statement given by a person named Shri Rakesh Somani before the Investigation Wing, but did not furnish the same to the assessee to rebut it. He also did not provide opportunity of cross-examination to the assessee. It was not known as to whether Shri Rakesh Somani has stated that the transactions entered by the assessee were bogus. Another important aspect is that the assessee has sold only a part of shares of above said company, i.e., 5,20,000 shares. The remaining 14,80,000 shares are still held by the assessee. Further, the assessee is also a regular investor holding shares of other companies also. Hence, it is not a case of isolated transaction of purchase and sale of shares. In view of the above, we are of the view that there is no reason to suspect the purchase and sale of shares undertaken by the assessee.
As noticed that the evidences furnished by the assessee to prove the purchase and sale of shares, payment made/received, entry/exit of shares in the demat account of the assessee etc., were not doubted with.
In the case of PCIT vs. Smt Krishna Devi [2021 (1) TMI 1008 - DELHI HIGH COURT] has noticed that the reasoning given by the AO to disbelieve the capital gains declared by the assessee, viz., astronomical increase in the price of shares, weak fundamentals of the relevant companies are based on mere conjectures - Decided in favour of assessee.
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2025 (1) TMI 370
Denial of Exemption u/s 11 and 12 - audit report in the instant case was not filed on or before the specified date referred to in section 44AB - CIT(A) confirming the appellant's income assessed by the AO instead of returned income of "Nil" as declared by appellant - HELD THAT:- We find that the assessee is a public trust filed its return of income belatedly but within the time limit allowed u/s 139 of the IT act claiming exemption u/s 11/12 of the IT Act.
Return was processed by CPC u/s 143(1) without allowing exemption claimed u/s 11/12 of the IT Act and whole of the receipt was determined as taxable income without allowing deduction of expenditure which was claimed in the return of income. We also find that no notice for proposed adjustments u/s 143(1)(a) was issued to the assessee by the Assessing Officer/CPC.
Apparently the adjustments u/s 143(1)(a) was made without any prior notice to the assessee. We also find that Ld. Addl./JCIT(A), Thiruvanantpuram dismissed the appeal of the assessee by observing that audit report was not furnished before the specified date.
We find some force in the arguments of assessee that Ld. Addl./JCIT(A), Thiruvanantpuram failed to take note of ground no.2 and alternative ground no.3 which were specifically raised in grounds of appeal in Form No.35 of first appeal memo and since each and every ground raised by the assessee has not been specifically dealt/decided/adjudicated by Ld. Addl./JCIT(A), Thiruvanantpuram, the order becomes bad in law.
We deem it fit to set-aside the order passed by Ld. Addl./JCIT(A), Thiruvanantpuram and remand the matter back to him with direction to decide the appeal afresh deciding all the grounds raised in the appeal memo - Appeal filed by the assessee is allowed for statistical purposes.
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2025 (1) TMI 369
Exemption u/s 11 - Charitable activity - Revenue Authorities held that the assessee has been covered by the first proviso to Section 2(15) of the Act based on the fees collected by the assessee against the services provided to the members as well as non-members - HELD THAT:- This matter has been examined by the Tribunal in earlier year and has been referred to the Revenue Authorities to examine the bifurcation of the fees collected from members and non-members.
The entire conspectus of Section 2(15) of the Act has been examined in the case of ACIT Vs. Ahmedabad Urban Development Authority [2022 (10) TMI 948 - SUPREME COURT] wherein a detailed order has been made with regard to computation of amounts which constitute receipts from trade, commerce or business. Hence, the matter is referred to the Jurisdictional Assessing Officer to examine the allowability of the claim u/s 11 of the Act in view of the decision of the Hon’ble Apex Court.
Disallowance of amount write off of non-recoverable amount from the terminated members - Revenue Authorities disallowed the claim on the ground that the assessee was well within their right to recover the dues from the security deposits which has been collected from the members - HELD THAT:- As before us, it was submitted that the security deposit was non-refundable and taken into corpus of the assessee and the dues have already been shown as income in the respective years. Since dues are non-recoverable from the security deposit, we hold that the assessee has a right to write off all the non-recoverable dues.
Appeals of the assessee are allowed for statistical purposes.
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2025 (1) TMI 368
Setoff of accumulated deficit against the current year surplus - HELD THAT:- We find considerable cogency in the submissions of the Assessee’s that in view of the Hon’ble Supreme Court of India in the case of CIT vs. Subros Educational Society, [2018 (4) TMI 1622 - SC ORDER] the set off of accumulated deficit is allowable.
We further find force in the contention of the Ld. AR that in various aforesaid case laws, it has been expounded by the Hon’ble Courts that excess of expenditure in earlier year can be set off against income of subsequent years and would amount to application of income for subsequent years. Though amendment has been made in Section 11 denying the set off of such deficit by the Finance Act, 2021 w.e.f. 01.04.2022 by inserting explanation 5 to section 11(1) but this is applicable prospectively.
The accumulated deficit arising out of expenditure over income for the previous year is allowed to be set off against the surplus of the impugned year. Decided in favour of assessee.
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2025 (1) TMI 367
Addition u/s 68 - unexplained cash credit on account of share capital and share premium - as per revenue identity, creditworthiness, and genuineness of the not proved - HELD THAT:-Assessee company after having contacted various other private limited companies was able to convince the alleged share applicants to make investment in its equity share capital. Though the assessee company in the year under consideration is not having a huge turnover but the book value of each of its equity share on the date of issue is Rs. 193.63. A certificate to this effect has been given by the Chartered Accountant Firm giving information about the fixed assets, current assets and then after reducing the net current liabilities from the total of the asset side, book value has been calculated by dividing the remaining sum with a number of equity shares.
The book value so arrived is Rs. 5,75,07,068/- and on dividing the same by number of equity shares i.e. 2,97,000 the book value per share is Rs. 193.63 and the same is more than the share premium of Rs. 190/- per share charged by the assessee. We, therefore, considering the facts of the case are satisfied that the assessee has successfully proved the genuineness of the transaction.
Assessee has been able to explain the identity and creditworthiness of share applicant and genuineness of transaction and, therefore, there was no justification of invoking sec. 68 of the Act on the given transaction of receiving alleged share capital and share premium.
In the assessment orders of the alleged share applicants the source of source of share application money which has been received by the assessee has already been taxed in the hands of the share applicants and taxing the same again in the hands of the assessee would tantamount to double additions. See Mahaveer Kumar Jain [2018 (4) TMI 1078 - SUPREME COURT] - Decided in favour of assessee.
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2025 (1) TMI 366
Revision u/s 263 - under-assessment of income - Addition u/s 56(2)(x) on differential between stamp duty valuation and the purchase price - By Joint Development Agreement (JDA) proprietorship concern of this assessee (G.C Construction), being developer, would start the construction work of the proposed building after obtaining sanction of the building plan and delivery of vacant possession of the said property
HELD THAT:- AO enquired and apparently been satisfied by the assessee's contention. Thus, the ld. Pr. CIT is seen to have taken an adverse note of the JDA in as much as income has been determined in the assessment year under consideration, whereas the ld. AO had been convinced by the bona fide of the assessee's arguments before him and not taken any adverse view in this very same matter
Operation of Section 45(5A), taxable income would arise once the project as per a JDA would obtain a certificate of completion for the whole or part of the project, from the competent authority. In this case, in the year under consideration, none of the conditions laid down in this Section are fulfilled for recognizing revenue. It is also seen that another anomaly has crept into the impugned order when the ld. Pr. CIT has resorted to several assumptions, without backing of facts, leading him to conclude that the fiscal behaviour of the appellant was allegedly not in keeping with what a prudent businessman would normally do. Thus, for example, he has presumed that just because the advance amount paid by the appellant has not been returned back then he has mentioned that no prudent businessman would block his capital for an indefinite period.
Thus it is held that not only was the impugned issue considered by the ld. AO but also the provisions of Section 45(5A) of the Act would lead to the conclusion that the adverse inference drawn by the ld. CIT(A) was not justified. Also, the impugned order is based on a number of assumptions which could not possibly be used to draw any adverse conclusion against the appellant. Hence, his action cannot be supported and considering the tests discussed (supra), this matter is decided in favour of the appellant and the order of ld. Pr. CIT is quashed.
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2025 (1) TMI 365
Limited scrutiny assessment - additions on account of unexplained receipt - HELD THAT:- Assessee has duly demonstrated that the assessee had duly replied and furnished the relevant documents.
As explained that the aforesaid amount of Rs. 1 Crore was out of the earlier security deposits which were received back in the year under consideration. Assessee's balance sheet as on 31.03.2017, wherein, short-term loans and advances as on 31.03.2016 have been mentioned at Rs. 1,00,25,000/- whereas, the same were at Rs. 25,000/- as on 31.03.2017. Assessee invited our attention to ‘Note-9’ containing details of the short-term loans and advances wherein also, the same figures have been mentioned. Copy of the bank account of HMP Ltd. reflecting the transaction of Rs. 1 Crore on 22.07.2016 and paperbook showing the corresponding receipt/deposits of Rs. 1 Crore in the bank account of the assessee. The ld. AO thus, totally ignored the aforesaid factual evidence on the file produced by the assessee. CIT(A) has merely paraphrased the findings of the ld. AO without making any effort to appreciate the reply and evidences furnished by the assessee.Thus, addition made by the lower authorities on this issue is not sustainable.
Addition u/s 14A - addition on account of estimated income from investments - Assessee has demonstrated that the assessee during the year did not earn any tax exempt dividend income out of the investments made. Therefore, as per the law laid down by various Courts of the country, no disallowance u/s 14A of the Act is attracted. Thus, as Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] and Shivam Motors (P.) Ltd. [2014 (5) TMI 592 - ALLAHABAD HIGH COURT] if the assessee during the year has not earned any tax exempt income, no disallowance u/s 14A of the Act will be warranted.
Appeal of assessee allowed.
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2025 (1) TMI 364
Validity of reopening of assessment - notices issued under the old section 148 - as argued notice u/s 148 was issued on 30.06.2021 when this section was no more applicable, because w.e.f. 1st April, 2021, a new scheme of reassessment was introduced in the shape of section 148(A) - HELD THAT:- 1st Appellate Authority ought to have recorded a categorical finding on the merits of assessment orders impugned before it i.e. sustainability assessment orders dated 31.03.2022 passed vide notice issued on 30.06.2021 under section 148.
CIT(Appeals) in a deeming manner assumed that subsequent proceeding taken by AO is a legal one, therefore, he can simply observe that these assessment orders are non-est and appeals become infructuous. It is pertinent to note that once reassessment order is passed by theAO (in the present appeal, such orders were passed on a notice issued under section 148, i.e. old provisions), then, whether an AO himself can suo motu treat those orders as non-est and start fresh re-assessment proceeding is a debatable point. It cannot be considered by the CIT(Appeals) in the manner as is done in the impugned order. The legal status of both the re-assessment orders are to be determined independently without getting influenced by the action of the AO initiated under section 148(a).
Suo motu it cannot be construed by AO that earlier assessments passed on 31.03.2022 on a notice issued under section 148 would automatically obliterate or extinguish by the guidelines issued by the Hon’ble Supreme Court in the case of Ashish Agarwa [2022 (5) TMI 240 - SUPREME COURT]
The Hon’ble Delhi High Court [2024 (4) TMI 96 - DELHI HIGH COURT] has held that those orders would remain unaffected and their status is to be decided on the basis of their own merits. It cannot be a case that they would automatically extinguish and AO will be enable to pass the fresh assessment u/s 148(a) of the Income Tax Act.
Therefore, ideally ld. CIT(Appeals) should have not assumed, as if subsequent proceeding initiated by the ld. Assessing Officer under section 148(a) and assessment orders passed thereon are valid and, therefore, earlier assessment orders deserve to be just ignored. This understanding of the ld. CIT(Appeals) is not in accordance with law.
Old assessments have been passed on the strength of a notice issued under section 148, which was not in existence on the day of its issuance, which was not inexistence on the day when notice was issued on 30.06.2021. Therefore, on this very foundation, no assessment orders could be passed. These assessment orders ought to have been quashed by the ld. CIT(Appeals). The assessment orders passed u/s 143(3) read with section 147 are invalid assessments - Decided in favour of assessee.
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2025 (1) TMI 363
Valuation of imported goods, especially when the importer and the exporter are unrelated - Rejection of transaction value - enhancement of value with the support of a Chartered Engineer’s report - HELD THAT:- The issue has been dealt-with by the Hon’ble Supreme Court in the case of CENTURY METAL RECYCLING PVT. LTD. AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2019 (5) TMI 1152 - SUPREME COURT] where it was held that 'Declared valuation can be rejected based upon the evidence which qualifies and meets the criteria of ‘certain reasons’. Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges etc., to find out the correct international price of concerned goods would be relevant but reliance can be placed on such material only when the adjudicating authority had conducted enquiries and ascertained details with reference to the goods imported which are identical or similar and ‘certain reasons’ exists and justifies detailed investigation.'
It is never the case of the Revenue that the parties were related, that there was any extra/on money exchanged between the importer and the exporter or that the value admitted in the bill of entry was influenced by any extraneous considerations/circumstances. Hence, as declared by the Hon’ble Apex Court in Century Metal Recycling Pvt. Ltd., it is found that the Revenue has miserably failed in discharging the burden of proving in accordance with law that the declared value was not acceptable for any justifiable reason/s or that the same was hit by the non-fulfillment of Rule 12 ibid.
Conclusion - The authorities below have erred in rejecting the declared/transaction value of the import without any basis.
Appeal allowed.
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2025 (1) TMI 362
Scope of amendment by Notification No. 127/2011-Cus. dated 30.12.2011 - Whether the appellant is eligible for the benefit of N/N. 46/2011–Cus. dated 01.06.2011 which provides for concessional rate of Basic Customs Duty (BCD) for all the goods classifiable under CTH 480830 to 480990? - HELD THAT:- Reliance placed upon decision of the Hon’ble Apex Court in the case of M/S. RALSON (INDIA) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH-I [2015 (4) TMI 74 - SUPREME COURT] where it was held that 'Compounded rubber was also rescinded by the same Notification dated 1.3.94 and reintroduced in the same manner vide another Notification issued on 28.3.1994.'
Thus, during the interregnum period, the taxpayer was eligible for the benefit of Notification in question, denial by the Revenue was not in accordance with law.
Conclusion - The appellant was eligible for the concessional rate of BCD under the original notification, even during the period when the notification did not explicitly list the relevant CTH headings.
Appeal allowed.
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2025 (1) TMI 361
Jurisdiction of Directorate of Revenue Intelligence (DRI) officers to issue a SCN under the Customs Act, 1962 - confiscation of the bike and also imposition of penalty on the ground that the bike was smuggled into India and the documents provided along with the said bike are fake - HELD THAT:- Hon’ble Supreme Court in the case of COMMISSIONER OF CUSTOMS VERSUS M/S CANON INDIA PVT. LTD. [2024 (11) TMI 391 - SUPREME COURT (LB)] now held that DRI Officers have jurisdiction to issue show cause notice under Section 28 of the Customs Act.
The appellant states that Department has failed to discharge its burden to prove that the said bike was smuggled into India and being non-notified good, burden is on the Revenue to prove the case. The appellant is genuine buyer of the bike which was registered in the name of another buyer. The concerned bike is registered in the fake name and other documents also found fake. Appellant purchased the bike with a price more than Rs. 13 lakhs in Rs. 5,70,000/- and paid in cash Rs. 5 lakhs without ascertaining the actual owner or registered owner. Bike is find goods as the appellant stated in his statement dated 24.10.2011 that he is interested in owning super bikes and went Marine Drive, Mumbai on a Sunday to attend super bikes assemble held by owners of such motor bikes. Therefore, the appellant is well aware about bikes. In these facts and circumstances, it is clear that appellant is not bonafide purchaser.
Hon’ble Supreme Court in NALIN CHOKSEY APPELLANT VERSUS THE COMMISSIONER OF CUSTOMS, KOCHI [2024 (12) TMI 687 - SUPREME COURT] held that as per Section 125(1) of the Customs Act and the possession of the vehicle can be made liable only when the owner of the goods is not known. In this case, owner of the vehicle is unknown and appellant is possessor of the vehicle. Therefore, he is liable to pay the duty.
Conclusion - The possession of the vehicle can be made liable only when the owner of the goods is not known. In this case, the owner of the vehicle is unknown and appellant is possessor of the vehicle. Therefore, he is liable to pay the duty.
Appeal dismissed.
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2025 (1) TMI 360
Classification of imported goods - Process Betel Nuts - to be classified under CTH as 21069030 or under CTH 08028020 - rejection of declared value - redetermination of value based on the fixed Tariff Value as per the Customs Act, 1962 - confiscation - penalties - permission to re-export the goods.
Classification of goods - HELD THAT:- All the arguments advanced by the appellant in respect of the classification have been considered by Chennai Bench in case of M/S. S.T. ENTERPRISES AND M/S. AYUSH BUSINESS OVERSEAS VERSUS COMMISSIONER OF CUSTOMS (CHENNAI VII) [2021 (3) TMI 27 - CESTAT CHENNAI] and rejected observing 'since the import goods are ‘betel nuts whole‘, these would merit classification under Chapter 8 and specifically under Chapter 0802 80 10 as classified by the department.'
This decision of Chennai Bench ahs been affirmed by Hon’ble Supreme Court in M/S AYUSH BUSINESS OVERSEAS ETC. VERSUS COMMISSIONER OF CUSTOMS (CHENNAI VII) [2021 (3) TMI 1285 - SC ORDER]. Thus, the goods imported by the appellant have been rightly held to be classifiable under the heading 0802 8030.
Valuation of goods - HELD THAT:- The impugned order relies on the Notification of the DGFT fixing the minimum import price for the import of the areca nuts classifiable under Chapter 0802. The minimum import price fixed by the DGFT could not be called the tariff value as has been done by the impugned order. The Tariff Value as defined by the Custom Act, 1962 is the value of the good fixed by the Board and could not have been fixed by any DGFT. Minimum Import Price fixed by the DGFT is an indicative minimum price of the goods imported and the goods if imported below this price could not have been allowed clearance for home consumption. However this price could not have been basis for rejection of the transaction value declared by the importer. Appellant has for this reason instead of clearing the goods for home consumption sought the re-export.
Appellant has in his submissions made before the adjudicating authority has submitted that the redemption fine be imposed on @ of 5%. Agreeing to the submission made, the end of justice will be met if we reduce the redemption fine to 5 of the value determined in the impugned order on the basis of minimum import price fixed by the DGFT. Thus redemption fine in case of goods imported as per B/E No 2329397 is reduced to Rs.3,45,000/- and goods imported as per B/E No.2625658 to Rs.7,50,000/-. Thus the total redemption fine is reduced to Rs.10,95,000/- - the penalty imposed on the appellant under Section 112 (a) of the Customs Act, 1962 reduced to Rs.5,00,000/-.
Conclusion - The goods were correctly classified under CTH 08028020. The confiscation and penalties were justified, and re-export is allowed with a reduced redemption fine.
Appeal allowed in part.
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2025 (1) TMI 359
Recovery of differential customs duty with penalty under section 112(a) (ii) and 114 (AA) of the Customs Act, 1962 - self-assessed transaction value was rejected and re-determination of the value - undervaluation of the goods - no opportunity for the pre-show cause notice consultation was provided - Violation of principles of natural justice.
Violation of principles of natural justice - no opportunity for the pre-show cause notice consultation was provided - HELD THAT:- The pre-liminary contention raised by the learned counsel for the appellant that no opportunity for the pre-show cause notice consultation was provided, needs to be rejected out rightly as from the records of the case, it is found that the appellant had been evading the investigation as despite service of summons dated 09.04.2019, 16.05.2019, 24.10.2019 and 21.02.2020 seeking their appearance on the dates specified, the appellant failed to appear. Once the appellant had chosen not to cooperate with the Department, the question of providing the pre-show cause notice consultation does not arise - thee are no violation of the mandatory provisions of providing pre-show cause notice consultation to the appellant.
Whether there was any mis- declaration in the valuation of the goods imported by the appellant? - HELD THAT:- The investigation was initiated on the basis of an intelligence that many Delhi based importers were engaged in suppression of actual transaction value and resorted to gross undervaluation in import of Automotive Windshield (Automotive Safety Glass) of assorted sizes for various models of vehicles and the appellant was one of such importers. Search of the office premises of the appellant company on 12.10.2018, resulted in recovery of a CPU, printouts were taken from the email of certain documents including actual invoices under a Panchnama of the same date - From the recovery of invoices, it is evident that two sets of parallel invoices were maintained, one was the actual invoice bearing higher valuation and the other parallel set of invoice of lower valuation was for the purpose of presentation before the customs for assessment. The apparent intent in resorting to such unlawful means was to suppress the actual transaction value so as to evade duty on the higher amount.
Once the goods imported are found to be mis-declared in valuation, the declared value needs to be rejected under rule 12 of CVR, 2007. Here the appellant has indulged in manipulation of the invoices and fraudulently suppressed the actual transaction value of the goods imported by them so as to evade the customs duty on higher valuation and therefore, the declared value has been rightly rejected in terms of rule 12 - there are no error in determining the value of the goods on the basis of the actual invoices. In fact, there can be no better evidence of correct transaction value, as reflected in the original invoices issued by the foreign supplier and which has been admitted by the appellants and in fact, Jaspreet Singh had admitted to make the payment of duty on that basis.
The department has adduced direct evidence of undervaluation. The modus operandi between Shri Jagmohan Kaushal and Shri Jaspreet Singh clearly establishes a case of conspiracy and in view of the settled principle it is therefore, impossible for the department to unravel every link of the transaction, many facts relating to these illicit transactions remain in the knowledge of the person concerned, CC, Madras vs. D.Bhoormull. The department has sufficiently discharged the burden of proving the undervaluation, which is unrebutted by the appellant in the absence of any substantial evidence.
Since it is an established case of mis-declaration, under valuation and suppression of actual invoices, the goods are liable for confiscation as per section 111(m) of the Act - In view of the reasoning for invocation of the extended period of limitation and the findings recorded by the adjudicating authority, the penalty imposed on the appellant under section 114(A) and 114(AA) affirmed. No interference is called for even on the quantum of penalty in view of the discussion on merits.
Conclusion - The mis-declaration and undervaluation warrant rejection of declared values and imposition of penalties.
Appeal dismissed.
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2025 (1) TMI 358
Refund of excess paid duty due to a System error - 6 – 7 months delay in filing the bill of entry after the record of error alluded to by the appellant - whether the appellant was indeed responsible for having caused the error by non-updation of the bond details manually? - HELD THAT:- Section 11(4) states that a licensee shall file with the bond officer a monthly return of the receipt, storage, operations and removal of the goods in the warehouse, within ten days after the close of the month to which such return relates. The said provisions are reiterated in the above-mentioned Boards Circular. As stated by the appellant the provisions did not require an importer to keep the electronic bond module updated. This being so the department cannot fasten the delay in up-dation of the bond module on the importer and deny him the facility to file the bill of entry citing ‘well known procedure’ which has no legal basis. Defects in linking of the bond module and ICES by the department, cannot be made a reason to deny the adherence to a statutory requirement by an importer, more so when the statute does not require the importer to enter such details in the ICES prior to filing a bill of entry. It is at best a curable defect and not a substantive one.
The question arises whether the Commissioner (Appeals) was right in allowing the rate of duty as on 26/09/2018 to be applied after a period of 6 – 7 months, when the goods were actually cleared, which is against section 15 of the Customs Act 1962. It is true that in this case a Bill of Entry number was not generated by the Indian Customs Electronic Data Interchange System (ICES) for the said declaration and the self-assessed copy of the Bill of Entry was not electronically transmitted to the authorised person.
The instruction pertains to payment of charges for late presentation of Bill of Entry, which has a discretionary element, unlike the relevant date for the rate of duty to be effective, which is fixed by the Customs statute and does not leave room for discretion. However, the issue that delays in filing of Bill of Entry happen due to system related faults is acknowledged by the instruction and has legal implications. In an era with progressive use of modern technology, the instruction take a pragmatic view of the procedure in vogue at the time the law was enacted and as applicable to the present. In such a situation the appellant should not be blamed for the delay and held responsible.
Conclusion - The appellant should not be blamed for the delay and held responsible, once it is shown that an importer had attempted filing the bill of entry prior to the issue of a rate change notification. Importers should not be penalized for system-related faults.
No purpose would be served in remanding the matter to the Original Authority to re-examine whether ex-bond bills of entry was filed for the entire lot of imported 6680 packages of Split Air Conditioners as claimed by the appellant or only for a part or for some other goods, as this would involve a fresh investigation of the facts which is beyond the issue on the file of the Original Authority and would result in a new proceedings - the lower authority has taken a view which is reasonable, legal and proper - Appeal disposed off.
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2025 (1) TMI 357
Alleged import of excess quantity of MACE, beyond the quantity declared in the BE and the value of the goods was also allegedly undervalued - misdeclaration of quantity, grade, and value of imported Mace to evade customs duties - onus to prove - HELD THAT:- The non-supply of the Bill of Entry relied upon to enhance the price of the imported goods and lacunae in the analytical report dated 30.07.2009 given by the Spice Board, Cochin, regarding the grade of the goods is fatal to the department’s case. It is settled law that the onus to prove that the declared price did not reflect the true transaction value is always on the Department. Further NIDB data can be a guideline for the customs to arrive at the value of the goods but the NIDB data cannot be applied directly unless the value given therein falls within the parameters of identical goods or similar goods as stated in section 14 of the Customs Act 1962 and the Customs Valuation Rules. As stated by the Hon’ble Supreme Court, it is always for the Customs Authorities to establish by methods known to law and in a satisfactory manner that the value of imported goods is not what the importer says it is and what that value actually is. That onus cannot be shifted to the importer.
Similarly, any analytical report must state the grade of the goods being tested, the prevalent national / international standards if any for that product and how the product matches or deviates from that standard. Without that, the opinion is of no help. It can only be treated as an opinion in general and not pertaining to the goods in question as in the present case.
Conclusion - The Department failed to meet the burden of proof. If the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice.
In the light of the infirmities in the SCN and the resultant erroneous decision taken in re-determining the value of the goods in the OIO and the impugned order, the re-determined value merits to be set aside along with fine and penalties imposed. As regards the case of the excess quantity of 590.83 Kgs the price as declared should be adopted and appropriate duty demanded from the importer-appellant as per law - Appeal disposed off.
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2025 (1) TMI 356
Time Limitation - Rejection of appeal on the ground of delay - HELD THAT:- It is observed that apparently the appeal has been filed beyond the period of limitation meant for filing the appeal before Commissioner (Appeals) in terms of Section 128 of Customs Act, 1962. However, from the copy of the grounds of appeal filed before Commissioner (Appeals), it is observed that the reason for the delay that occurred in filing the said appeal was sufficiently explained by the appellant. However, the impugned order has not dealt with those reasons. The appeal has mechanically been rejected on ground of limitation by quoting the provision of Customs Act, 1962 and the decision of Hon’ble High Court Delhi in the case of DELTA IMPEX VERSUS COMMISSIONER OF CUSTOMS (ACU) , NEW DELHI [2004 (2) TMI 81 - HIGH COURT OF DELHI]. There is no discussion about the explanation given by the appellant for the delay that has occurred. Though, the Commissioner (Appeals) having no statutory power to condone the delay beyond 90 days of the receipt of order in original, seen from that perspective no infirmity can be found in the impugned order.
In view of the explanation given by the appellant, the appeal was otherwise well within time when it was filed before Commissioner (Appeals). There has been catena of decisions referring that the matter shall be referred to be disposed on merits and the plea of limitation has to be dealt with liberally.
Conclusion - The appeal filed on 30.02.2019 is within one month of date of receipt of order in original with the appellant. Keeping in view that there is nothing on or record, otherwise to show that the appellant deliberately had caused the impugned delay. Otherwise also while appellant is not going to gain anything while causing delay in filing the appeal.
Present is deemed to be a fit case to be re-heard by Commissioner (Appeals) vis-à-vis the merits of the appeal. Resultantly, the matter remanded back for de-novo adjudication on merits without discussing the aspect of limitation - appeal allowed by way of remand.
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2025 (1) TMI 355
Evaison of ADD - Confiscation - interest - penalty along with anti-dumping duty - misdeclaration of imported goods - Aluminum Printing Plates having one side blue in colour and other side natural aluminum colour, declared as "P.S. Printing Plates (Photosensitive Printing Plate)".
The basic challenge of the appellant is to the test report relying on the findings of this Tribunal in the later decision in Sun N Sand [2024 (10) TMI 158 - CESTAT NEW DELHI], where test report was held to be not reliable as the lab was lacking proper infrastructure for CTCP machine testing and, therefore, outsourced it for testing.
HELD THAT:- The facts of the present case are not identical to the case of Sun N Sand in so far as the authenticity of the test report is concerned. Though in both the cases, the Government labs had refused to conduct the test due to non-availability of the infrastructure and the testing was forwarded to the private lab, i.e., M/s. Don Bosco, however, the present case is distinguishable as the testing had not been outsourced by M/s. Don Bosco and it has also not been proved by the appellant herein that M/s. Don Bosco was not fully equipped to carry out the testing of the samples. In the case of Sun N Sand, it was noted that on cross-examination of the technical expert from M/s. Don Bosco, the Commissioner (Appeals) had set aside the imposition of anti-dumping duty, whereas in the present case as noted by the original authority and as is evident from the absence of the appellant before the adjudicating authority, they have never sought for any cross-examination of the technical experts of M/s Don Bosco and in that view, the contention raised by the appellant that they have not been granted any opportunity of cross examination is unsustainable. Hence, the findings of the Tribunal in Sun N Sand are not applicable in the present case and no fault can be attributed to the test report.
The fact cannot be ignored that as per the procedure for drawing the samples, one sample is given to the aggrieved party, i.e. the appellant herein and the appellant had an option to get the retesting done through the sample given to him, however, they refrained from exercising this right.
On the issue, that the test was conducted after the expiry period of 18 months and therefore, the test report cannot be relied upon has been rightly rejected by the adjudicating authority as the testing agency has no way stated in the test report that the shelf life of the Plates had expired. Nor the appellant had produced any evidence from the supplier about the shelf life of the plates. Considering that the invoice of the goods is dated 18.04.2015 and hence they could have been manufactured sometime before the said date, the samples drawn from the consignment on 03.11.2015 were initially forwarded to the Government lab on 19.11.2015 but due to the unforeseen circumstances, the samples were finally sent on 14.12.2017 and soon, thereafter, the test report was made on 30.03.2017 - Since only the date of invoice as 18.04.2015 is available, the delay, if any, is not really very material as it would not change the nature and characteristics of the goods. The declared goods, as P.S. Plates, would remain the same even on the expiry of eighteen months and would not convert to CTCP Printing Plates. The simple illustration is, that if a food item, for example, bread which normally comes with the specification, “Best before” say 15th January 2025, if tested anytime after the said date would not convert into “Roti”. The bread would remain bread and infact, is edible for a few days later even after the expiry date. Therefore, the argument of the learned counsel that expired goods no way reflect its authentic and correct characteristics on testing has no merit and is unsustainable.
Conclusion - The test report by Don Bosco was not faulty and relying on the same the authorities below have rightly held that the subject goods have been mis-declared by the appellant as Aluminium P.S. Printing Plates so as to evade the imposition of anti-dumping duty under the notification no. 51/2012-CUS(ADD) dated 03.12.2012. The appellant having given wrong description have violated the provisions of section 46(4) of the Act as such the goods are liable for confiscation under section 111 (m) of the Act. Consequently, the appellant is liable to pay the anti-dumping duty of Rs. 44,15,360/- along with the penalty of the same amount under section 114 (A) of the Act.
Appeal dismissed.
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2025 (1) TMI 354
Correctness of High Court of Karnataka exercising power of judicial review interdicting Corporate Insolvency Process culminating in the acceptance of a resolution plan by the Committee of Creditors - HELD THAT:- The jurisdiction and power of the Adjudicating Authority under Section 60(5)(c) has already been reiterated by this Court in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2019 (11) TMI 731 - SUPREME COURT] and Gujarat Urja Vikas Nigam Limited v. Amit Gupta [2021 (3) TMI 340 - SUPREME COURT]. It is important to note that CIRP proceedings commenced on 26.10.2018, six years ago, and the resolution plan of the appellant was approved in 2020, four years back. The importance of concluding the CIRP proceedings was highlighted by this Court, on a number of occasions.
In a recent order in COMMITTEE OF CREDITORS OF KSK MAHANADI POWER COMPANY LIMITED VERSUS M/S UTTAR PRADESH POWER CORPORATION LIMITED AND OTHERS [2024 (10) TMI 1624 - SUPREME COURT], this Court has observed that an unjustified interference with the proceedings initiated under the Insolvency and Bankruptcy Code 2016, breaches the discipline of law.
In view of the delay in approaching the High Court, particularly when respondent no.1 himself has initiated proceedings under the Code by filing interlocutory applications seeking similar relief, the High Court committed an error in entertaining the writ petition.
Apart from delay and laches, High Court should have noted that Insolvency and Bankruptcy Code is a complete code in itself, having sufficient checks and balances, remedial avenues and appeals. Adherence of protocols and procedures maintains legal discipline and preserves the balance between the need for order and the quest for justice.
Conclusion - The supervisory and judicial review powers vested in High Courts represent critical constitutional safeguards, yet their exercise demands rigorous scrutiny and judicious application.
Appeal allowed.
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2025 (1) TMI 353
Exclusion of the asset from the liquidation estate of the CD - Whether the Wockhardt Cephalosporin Facility, which was situated in area of 13,000 sq. ft. of the larger property is not the asset of the CD and need to be excluded from the liquidation estate of the CD? - whether in the impugned order the Adjudicating Authority did not record any reason? - HELD THAT:- From the impugned order of the Adjudicating Authority, it does appear that reasons have been given by the Adjudicating Authority for holding that CD has absolute right over the property and area of 13,000 sq. ft., cannot be excluded from the liquidation estate. It is true that only brief reasons have been given by the Adjudicating Authority for rejecting the Application of the Appellant and the order also notices the submission of the Appellant and the Liquidator to rely on Assignment Deed dated 27.03.2018 and the conclusion was recorded by the Adjudicating Authority. The order impugned cannot be set aside on the ground that it does not record any reason. Reasons have been recorded, though, briefly in the impugned order.
The consent letter dated 09.03.2017 was consent letter for transfer of Plot No.B-15/2 admeasuring 64,925 sq. mtrs. was in favour of CD for which consent was granted by MIDC. Thus, consent letter dated 09.03.2017 read with Assignment Agreement dated 27.03.2018 in favour of CD was assignment of entire area of 64,925 sq. mtrs. Hence, the CD acquired the leasehold rights of the entire area of Plot No.B-15/2 admeasuring 64,925 sq. mtrs. and the letter dated 09.03.2017 clearly mentions that there is no consent, rather prayer to continue sub-letting was not granted and Transferee was asked to apply for fresh sub-letting and Transferee clearly meant CD, i.e. M/s Euro Healthcare Pvt. Ltd. There is nothing on record to indicate that CD after assignment in its favour, obtained any consent for sub-letting in favour of Wockhardt Ltd., nor there is anything on record to indicate that sub- letting consent was ever granted by MIDC for Wockhardt Cephalosporin Facility area.
Thus, amount which was demanded by MIDC was due to there being unauthorised sub-tenant and the said letter in no manner can be read as granting of consent for sub-tenant by the MIDC. The Lessee was prohibited to part with any portion of the leased land without prior consent of MIDC and there being no consent by MIDC for sub-letting, the claim of the Appellant that it is entitled to area of Wockhardt Cephalosporin Facility, which would be excluded from the assets of the CD, cannot be accepted. The payment made by the Appellant in pursuance of letter issued by RP, asking to make payment of unauthorised sub-letting charges, cannot be read as any valid sub-letting in favour of the Appellant of the 13,000 sq. ft. area, as claimed by the Appellant. In the reply, which was filed by the Liquidator before the Adjudicating Authority, it was categorically pleaded that Sub-Letting Agreement was an un-registered Agreement and sub-letting of leased land could have been done only by registered agreement.
Conclusion - The Wockhardt Cephalosporin Facility is part of the liquidation estate of the CD.
Appeal dismissed.
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