|
Advanced Search Options
Case Laws
Showing 301 to 320 of 324 Records
-
2025 (3) TMI 24
Rejection of registration u/s 12A and rejection of approval u/s.80G(5) - As in the absence of the copy of provisional registration granted u/s12A(1)(ac)(vi) of the Act, the application was non-maintainable -
HELD THAT:- CIT(E) had rightly noticed that the registration u/s 12A(1)(ac)(iii) could have been granted only if the assessee had a provisional registration certificate u/s 12AB. The assessee had enclosed provisional registration granted u/s 10(23C)(vi) of the Act in Form No. 10AC along with the application. Accordingly, the Ld. CIT(E) had issued a show cause notice to the assessee to rectify this defect, which was not complied. Therefore, he had rejected the application for registration u/s.12A of the Act.
It is found that the provision of section 12A(1)(ac)(iii) of the Act has since been amended w.e.f. 01.10.2024 as per which the registration u/s.12A of the Act can be allowed on the basis of provisional approval u/s 10(23C)(vi) of the Act.
We deem it proper to set aside the matter to the file of the Ld. CIT(E) with a direction to allow another opportunity of being heard to the assessee to rectify the defect in the application as noticed by him. The Ld. CIT(E) is also free to consider the application of the assessee on the basis of provisional approval u/s 10(23C)(vi) of the Act filed by the assessee along with the application, in accordance with the amended provisions of the section.
Application for registration u/s. 80G(5)(iii) - Since, the matter regarding registration u/s.12A of the Act has been set aside to the file of the Ld. CIT(E), we deem it necessary to set aside the present matter as well to the file of the Ld. CIT(E), who will re-adjudicate the issue of approval u/s.80G of the Act after deciding the matter of registration u/s.12A of the Act.
-
2025 (3) TMI 23
TP Adjustment - comparable selection - inclusion of the four entities herein i.e. Eclerx Services Ltd.; TCS E-serve Ltd.; Infosys BPO Ltd.; and Tech. Mahindra Ltd. - HELD THAT:- We see no reason to sustain the learned lower authorities action to this effect. We wish to make it clear that although the Revenue’s foregoing vehement contention that each and every assessment year involves its own set of facts could not be simply brushed aside, the fact however remains that it is incumbent for the department only to pin point specific distinction in light of the corresponding change in the specified segment involved in such an instance.
We further deem it appropriate to emphasize here that right from A.Y. 2010-11 to A.Y. 2013-14 before us, the assessee’s corresponding segment of IT-enabled services has not witnessed any change at all which could take us to a different conclusion as it is projected at the Revenue’s behest.
Two of the four entities in question herein i.e. Infosys BPO Ltd.; and M/s Tech. Mahindra Ltd. had witnessed extraordinary event of acquisition in the relevant prescribed time period of two years prior to the relevant financial year as per Rule 10B(4) 1st proviso as well and, therefore, these two entities do not deserve to be included in the array of comparables. The Revenue could further not dispute that these latter two entities i.e. Infosys BPO Ltd.; and Tech. Mahindra Ltd. do not satisfy the corresponding relevant related party transaction filter of less than 25% adopted by the TPO himself as well.
CIT(DR) at this stage sought to buttress the point that the assessee’s vehement contentions seeking to exclude the foregoing comparable entity by applying turnover filter do not deserve to be accepted.
We find in this factual backdrop that in case of M/s Pentair Water India Pvt. Ltd. [2016 (5) TMI 137 - BOMBAY HIGH COURT] has already rejected the Revenue’s very argument involving M/s Infosys BPO Ltd., thereby upholding the tribunal’s order directing exclusion thereof on turnover filter. The Revenue’s instant last argument fails in very terms therefore. We accordingly accept the assessee’s instant third substantive ground to the limited extent seeking exclusion of these four entities namely Eclerx Services Ltd.; TCS E-serve Ltd.; Infosys BPO Ltd.; and Tech. Mahindra Ltd. and direct the learned TPO to finalize his afresh computation as per law in very terms.
-
2025 (3) TMI 22
Denial of registration u/s.12AB - lack of registration under the Rajasthan Public Trust Act, 1959 (RPT Act) - HELD THAT:- There is no law which is required to be complied with for achieving the objects of the assessee trust. Section 17 of the RPT Act, 1959 requires that trustees of the trust has to apply for registration of a public trust, however, there is no section in the RPT Act, 1959 which prohibits a trust to carry out its objects if it is not registered under the RPT Act, 1959.
Both the statutes have their own provisions and implications and none of them have overriding effect. Even if, the assessee trust is not registered with the RPT Act, 1959 and the concerned officials under the RPT Act, 1959 deems it necessary to get the entity registered u/s 17 of the RPT Act, 1959, appropriate action can be taken and against the trustees of the trust. But this issue can’t be a hurdle in getting registration before the Income Tax Department u/s. 12AB of the Act.
No force in the findings of the Ld. CIT (E), Jaipur while holding registration application untenable in the absence of registration under the RPT Act, 1959.
Violation of Foreign Contribution Regulation Act, 2010 (FCRA) - Considering the provisions of relevant statute we restore the matter back to the file of the Ld. CIT (E), Jaipur and simultaneously directed the assessee trust to incorporate the relevant amendment in the trust deed mentioning that prior to receiving any foreign remittance whatever may be the form or nomenclature, prior approval will be taken from the Ministry of Home Affairs, Govt. of India and produce the same for verification (In original) before the Ld. CIT (E), Jaipur. On this issue ground raised by the assessee is allowed for statistical purposes.
Question on genuineness of activities of the assessee trust -as submitted that other than purchase of land for hostel building construction, no other activity was carried out - Its beyond our understanding what else a newly established society/trust can furnish in response to the letter of Ld. CIT (E), Jaipur. Rather, observations on genuineness of the trust observations, made by the Ld. CIT (E), Jaipur are either wrong or self-contradictory in nature. On the one hand the Ld. CIT (E), Jaipur is claiming that no I/E accounts for the F.Y. 2023-24 furnished by the assessee, on the other hand he is commenting on various aspects, which can be fetched only from the financials of the assessee. The copy of the financials were produced before us also vide page nos. 31-35 of the paper book and the same was placed before the Ld. CIT (E), Jaipur also.
As per case of Rural Education and Women Welfare Society Sas Nagar [2019 (11) TMI 1148 - SC ORDER] we are of the opinion that the observations of the Ld. CIT (E), Jaipur are baseless and can’t be used against the assessee to refuse registration u/s. 12AA - it is found that the observations of the CIT (E), Jaipur has no legs to stand and the activities of the assessee are not under any challenge, which warrants rejection of registration.
-
2025 (3) TMI 21
Validity of assessment framed u/s.143(3) r.w.s. 147 in absence of notice u/s.143(2) - HELD THAT:- As in the present case before us remained well within his right to assail the validity of the jurisdiction that was assumed by the AO for framing of assessment u/s. 143(3) r.w.s. 147 in absence of notice u/s. 143(2) of the Act.
Apropos the maintainability of the aforesaid claim of the assessee, we find that in the cases of Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT]] and Laxman Das Khandelwal [2019 (8) TMI 660 - SUPREME COURT] had held that pursuant to the return of income filed by the assessee, the A.O remains under a statutory obligation to issue notice u/s. 143(2) of the Act for framing the assessment.
Our aforesaid view is further fortified by Shri Jai Shiv Shankar Traders (P) Ltd. [2015 (10) TMI 1765 - DELHI HIGH COURT] held that absence of notice u/s.143(2) of the Act impregnates the proceeding with a jurisdictional defect, and hence, renders it as invalid in the eyes of law.
Thus, order passed u/s. 143(3) r.w.s. 147 in absence of a notice u/s. 143(2) of the Act having been issued by him cannot be sustained and is liable to be quashed. Decided in favour of assessee.
-
2025 (3) TMI 20
Revision u/s 263 - unexplained money u/s 69A r.w.s. 115BBE - non-application of mind by the AO to reach on the conclusion leading thereby an erroneous order u/s 147 - HELD THAT:-Reopening assessment u/s 147, assessee was required to furnish necessary information and explanations qua the cash deposited in her bank account to the tune and interest income.
The reopening was done for the reason that as per available information with the department huge cash amounts were deposited by the assessee, whereas ROI for the relevant AY was not submitted. During the course of reassessment proceedings notice u/s 142(1) were issued twice and the onus to respond towards such notices was duly complied by the assessee.
No further explanations were sought by the AO, shows that the AO was satisfied with the submissions of the assessee and, therefore, the assessment was completed accepting the returned income of the assessee.
Revisionary proceedings u/s 263 were initiated, which were led only for the reason that the assessee has a surplus of Rs. 16 lac as opening cash balance which was subsequently deposited in the bank account in piecemeal manner on 92 occasions @ Rs. 25,000/- each. Such deposits surely have the reason for Ld. PCIT to revisit the assessment, however the amount proposed to be treated as unexplained money u/s 69A was mostly emanating from the opening cash balance.
The amount escaped assessment pertains to AY 2012-13 and not relevant for the year under consideration. On the basis of such information, the department may have adopted the recourse available with them to reopen the income escaping assessment u/s 147 for the AY 2012-13.
However, in the present case wherein enquires are made, explanations are offered, and a plausible view has been adopted, which cannot be set to be without application of mind by the Ld. AO, who had initiated the revisionary proceedings by issuing the notice u/s 148 and completed the assessment u/s 147.
In such a scenario, we observed that specific inquiries, as expected from the Ld. AO were made and after receipt of necessary information, explanation and compliances by the assessee, a plausible view have been taken and the retuned income was accepted, therefore, the initiation of revisionary proceedings u/s 263 are not according to settled principle of law as laid down in the case of PCIT vs Mukesh Chand [2023 (10) TMI 1064 - GUJARAT HIGH COURT]
Thus, order of Ld. PCIT u/s 263 was under misconception that the Ld. AO had not conducted necessary inquiries on the issue or there was non-application of mind by the AO to reach on the conclusion leading thereby an erroneous order u/s 147, thus, the order passed u/s 263, being bereft of merits cannot sustain in the eyes of law, hence, quashed. Appeal of the assessee stands allowed.
-
2025 (3) TMI 19
Seeking release of the gold chain of foreign origin which was detained by the Customs Department - undertaking in a standard format for wavier of show cause notice and personal hearing signed by the concerned tourist.
Detention of jewellery or personal effects of a tourist, especially those of foreign origin, under the Baggage Rules, 2016 - HELD THAT:- The Indian Customs Declaration Form (hereinafter “Declaration Form”) issued by the CBIC as part of the Guide for Travellers has also been perused by the Court, which would show that gold and gold jewellery is being treated as prohibited articles where the same is beyond the prescribed limits under Rule 5 of Baggage Rules, including gold bullion.
The Supreme Court in Pushpa Lekhumal Tolani [2017 (8) TMI 684 - SUPREME COURT] has considered whether jewellery being carried by a tourist as part of her baggage would qualify as smuggling under the Act read with the Baggage Rules, 1998, that was in force during the relevant period. The Supreme Court clearly holds that it is not permissible to completely exclude jewellery from the ambit of ‘personal effects’. Accordingly, the Court declared that the seized jewellery items therein were the bona fide jewellery of the tourist for her personal use and was intended to be taken out of India.
In Saba Simran v. Union of India & Ors. [2024 (12) TMI 19 - DELHI HIGH COURT] this Court was seized with the issue of deciding the validity of the seizure of gold jewellery by the Customs Department from an Indian tourist. The Court considered the ambit of ‘personal effects’ vis-à-vis jewellery under the Baggage Rules in effect from time to time.
A conspectus of the above decisions and provisions would lead to the conclusion that jewellery that is bona fide in personal use by the tourist would not be excluded from the ambit of personal effects as defined under the Baggage Rules. Further, the Department is required to make a distinction between ‘jewellery’ and ‘personal jewellery’ while considering seizure of items for being in violation of the Baggage Rules.”
Thus, it is now settled law that the Customs Officials are required to consider the facts of each case and apply their mind before detaining the goods of a tourist, either of Indian or foreign origin. The Customs Officials have to be conscious of the fact that personal effects including jewellery of tourists are protected by the law from detention and same cannot be detained in a mechanical manner.
Applicability of the Baggage Rules qua tourists of foreign origin - HELD THAT:- It is noted that the Petitioner is a Russian passport holder and thus, the extent of applicability of the Baggage Rules to a tourist of foreign origin has to be kept in mind. This issue has also been discussed by various decisions of the of this Court including in Nathan Narayansamy vs. Commissioner of Customs, [2023 (9) TMI 1549 - DELHI HIGH COURT], wherein the Co-ordinate Bench of this Court was dealing with a similar situation wherein certain jewellery was recovered and seized from the baggage items of a tourist holding Malaysian passport.
Further, the predecessor Bench of this Court in Farida Aliyeva v. Commissioner of Customs, [2024 (12) TMI 755 - DELHI HIGH COURT] while relying upon the decision in Nathan Narayansamy, directed release of jewellery seized from a tourist who was travelling from Azerbaijan to India.
It is an undisputed fact that the Petitioner is a Russian passport holder. In view of the law discussed above, on the ground of limited applicability of the Baggage Rules to the tourist of foreign origin and as jewellery is part of personal effects, the detention of Petitioner’s gold chain would have to be set aside. However, there is another aspect of this case which has bearing on the validity of the detention of the Petitioner’s gold chain.
Undertaking in a standard format for wavier of show cause notice and personal hearing signed by the concerned tourist - HELD THAT:- The undertaking signed by the Petitioner in the present case cannot be sustained in law. Accordingly, the Customs Department has failed to satisfy the requirements of Section 124 of the Act in the present case. Therefore, the detention of the Petitioner’s gold chain has to be set aside.
Conclusion - i) Jewellery bona fide in personal use by a tourist is not excluded from personal effects under the Baggage Rules, and the Customs Department must distinguish between "jewellery" and "personal jewellery." ii) The Baggage Rules have limited applicability to foreign nationals, and the detention of the Petitioner's gold chain was unjustified. iii) The standard form used by the Customs Department for waiving show cause notice and personal hearing does not satisfy the requirements of Section 124 of the Customs Act, violating principles of natural justice.
The detention of the Petitioner’s gold chain would be contrary to law and accordingly, the same is set aside - The gold chain of the Petitioner shall be released to the Petitioner subject to payment of any charges within four weeks - Petition disposed off.
-
2025 (3) TMI 18
Denial of conversion of shipping bills from DEEC scheme to drawback scheme - rejection of claim on the purported ground that drawback serial number 6204 was meant for woven fabric and exports were done under CTH 6104, which were for knitted fabric - HELD THAT:- The said issue has been decided by this Tribunal in the appellant’s own case [2001 (10) TMI 181 - CEGAT, KOLKATA] has held that 'We find that the samples have been drawn and due verification of the nature of fabric and the market value etc. can be got conducted and drawback claim determined under appropriate All Industry Rate schedule. We find no force in the reasons for denying the conversion of the S/Bills into drawback claim of S/Bills. The order is therefore, required to be set aside.'
Conclusion - The appellant is entitled for conversion of their shipping bills from DEEC scheme to drawback scheme.
The adjudicating authority shall within one month of receipt of this order, shall calculate the drawback claim of the appellant and pass an appropriate order for sanctioning of drawback claim in accordance with law - Appeal disposed off by way of remand.
-
2025 (3) TMI 17
Interest on refund of SAD - Section 27A of the Customs Act, 1962 - compensation on account of the delay in credit of the refund amount - HELD THAT:- The interest paid under physical statute are compensatory in nature but is statutory prescribed for any delay in refunding the amounts due to the appellant.
In the case of M/s RANBAXY LABORATORIES LTD. Vs M/s UNION OF INDIA [2011 (10) TMI 16 - SUPREME COURT] Hon’ble Supreme Court has held that 'the only interpretation of Section 11BB that can be arrived at is that interest under the said Section becomes payable on the expiry of a period of three months from the date of receipt of the application under sub-section (1) of Section 11B of the Act and that the said Explanation does not have any bearing or connection with the date from which interest under Section 11BB of the Act becomes payable.'
There are no merit in the impugned order, rejecting the claim of interest made by the appellant for the delay in crediting the amount to the account of beneficiary.
As the entire delay has been on the account of the dispute between the Resolution Professional earlier appointed in the matter and the Official Liquidator appointed subsequently, we are in agreement with the findings recorded in the impugned order to the effect that appellant is not entitled to any compensation. Compensation claimed would also not be admissible under Customs Act,1962 as the statute do not provide for any such compensation to be paid in any manner. Commissioner (Appeals) nor this Tribunal, being creature of Customs Act, 1962, can grant any compensation as claimed by the appellant.
Conclusion - Appellant should be paid interest as prescribed under Notification No. 25/2003-Cus(N.T.) dated 21.09.2003 to the appellant for the period of delay in crediting the amount to his account.
Appeal allowed in part.
-
2025 (3) TMI 16
Valuation of imported aluminum scrap - rejection of declared value - enhancement of declared value on the basis of related party transaction and LME prices as bench mark based on contemporaneous import data which indicates the undervaluation done by the Appellant - impugned order passed without properly appreciating the facts and the law - violation of principles of natural justice.
Related party transaction - HELD THAT:- The departmental officers never even claimed the re-assessment done by them on the basis of related party transaction and it is the Commissioner (Appeals) who, for the first time, has made out a new case of related party transaction in order to distinguish the binding precedents in favour of the assessee. Further, it is found that the Commissioner (Appeals) has unilaterally and erroneously relied upon the Order-in-Original dated 14.12.2017 to come to a conclusion that CMR America LLC, USA is a related party of the Appellant. This finding of the learned Commissioner (Appeals) is perverse for the reason that the said OIO was rendered in the case of M/s Sanjeevani Non-Ferrous Trading Pvt Ltd and not in the case of the Appellant and imported the said OIO without assessing the facts of the present case reflects complete non-application of mind.
Whether the enhancement of value, solely on the basis of coerced consent letters, DGoV Circular and in the absence of contemporaneous import data, is legal and valid? - HELD THAT:- This issue has been considered by various benches of the Tribunal and also, in the Appellant’s own case which has gone upto the Supreme Court and has been decided in favour of the assessee in [2019 (5) TMI 1152 - SUPREME COURT]. Further, the Hon’ble High Court of Delhi, in a bunch of appeals, has considered the identical issue in detail after considering the various judgments of the Tribunal as well as of the Supreme Court. After considering all the judgments, the Hon’ble High Court of Delhi in the case of Hanuman Prasad & Sons Vs Commissioner of Customs [2024 (11) TMI 1361 - DELHI HIGH COURT], has decided the issue in favour of the importer-assessee by setting aside the Tribunal’s order dated 20.10.2020.
Conclusion - i) The related party transaction argument was unfounded and could not justify the reassessment. ii) The appellant's acceptance under duress did not bar them from appealing the reassessment. iii) The procedural lapses rendered the reassessment invalid.
The impugned order is not sustainable in law - Appeal allowed.
-
2025 (3) TMI 15
Jurisdiction of Commissioner to adjudicate the demand of duty against DTA sales made by an SEZ unit under section 30 of the SEZ Act, 2005 - jurisdiction of Additional Commissioner to issue the SCN demanding duty against DTA sale made by SEZ unit under section 30 of the SEZ Act, 2005 - pecuniary jurisdiction to issue SCN at the relevant date where the demand of duty is more than Rs. 50 lakhs - jurisdiction to confirm demand under section 28(4) of the Customs Act - suppression of facts or not.
Jurisdiction of the Commissioner to adjudicate the matter relating to the demand of duty where the sale was under section 30 of the SEZ Act - HELD THAT:- Section 51 read with section 53 of the SEZ Act makes it clear that to the extent of authorised operations, SEZ will be treated as ‘outside the Customs territory of India‘- no more and no less. Thus, the Commissioner of Customs will not have jurisdiction only to the extent of the authorised operations within the SEZ. The words of both section 51 and 53 are fully in consonance with the object of the Act as is evident from its long title- to promote exports. SEZ cannot be treated as outside the Customs territory of India to carry on unauthorised operations and activities. In case of such activities, SEZ itself will be treated as Customs port, airport, ICD, etc. under section 7 of the Customs Act. Sub-section (2) of Section 53 makes this position explicit.
Once the goods are imported into the DTA, all duties as applicable have to be paid and if there is any short payment in such duties appropriate action can be taken. The goods in this case have been brought into the DTA falling under the jurisdiction of the Commissioner of Customs, Indore. If any duty is short paid, he has both the authority and duty to recover it. Merely because the goods were removed from SEZ unit as provided under section 30 of the SEZ Act and not directly imported from outside India would make no difference.
The specified officer, i.e., the Joint/Deputy/Assistant Commissioner posted in the SEZ has certain functions and they do not include issuing notices under section 28 - neither any provision of SEZ Act nor any provision of Customs Act excludes the jurisdiction of the Commissioner of Customs under section 28 in respect of the goods sold from an SEZ unit in DTA. There is therefore, no force in the submission of the learned counsel that the Commissioner of Customs lacks jurisdiction to adjudicate the matter and to issue a notice under section 28.
Jurisdiction of the Additional Commissioner to issue a notice under section 28 in a matter where the sale was under section 30 of the SEZ Act - HELD THAT:- In view of the findings on the question of jurisdiction of the Commissioner to adjudicate the matter, there are no reason to take a different view regarding the jurisdiction of the Additional Commissioner to issue the SCN.
Jurisdiction of the Additional Commissioner to issue SCN demanding duty in excess of Rs. 50,00,000/- - HELD THAT:- There are nothing in section 28 to support this argument.
Commissioner confirmed the demand under section 28(4) of the Customs Act when the SCN was issued under section 28(1) and no corrigendum was issued to the SCN - HELD THAT:- The SCN was clearly not issued under section 28(1) as asserted by the learned counsel but was issued under the proviso to section 28(1). Instead of quoting the amended provision of section 28(4) in the SCN, the Additional Commissioner quoted the unamended provision [proviso to section 28(1)]. In the impugned order, the Commissioner quoted correctly the amended provision of section 28(4).
Mere mentioning of the old provision [proviso to Section 28(1)] instead of the provision applicable to the relevant period [section 28(4)] in the SCN and mentioning of the correct provision [section 28(4)] in the impugned order does not in any way invalidate the impugned order - the submission of the learned counsel that the impugned order is invalid on the ground that it confirmed the demand under section 28(4) while the SCN demanded duty under section 28(1), therefore, has no force.
Misconstruction/ misinterpretation of the provision of the notification does not amount to suppression of facts to invoke demand enlarging the period for issuing the SCN under section 28(4) of the Customs Act - HELD THAT:- Section 28(4) can be invoked in case duty is short paid by reason collusion, wilful misstatement or suppression of facts. According to the learned special counsel for the Revenue, Prestige had indulged in wilful misstatement and suppression of facts while claiming the benefit of the notification which was available subject to the condition that the goods would be used in manufacture after following the procedure prescribed in the Rules - Trading in SEZ does not mean importing goods and selling in domestic market. Prestige did not use the imported goods either to manufacture or to export. Instead, it cleared and sold them in the DTA. Even in the Bills of Entry which it filed to clear the goods to DTA, Prestige claimed the benefit of the Notification No. 12/2012-Cus which was available only for goods to be used in manufacture of final goods following the procedure under ICGR, 1996. Prestige sold the goods to traders in the DTA.
There are no reason for Prestige to have claimed the benefit available to goods to be used in the manufacture when it neither had any such facility to manufacture and it simply imported the goods and within a few days sold them to another trader in DTA. The wilful misstatement or suppression of facts with an intention to evade can only be inferred from the circumstances and we find it in the facts of this case. It is found in favour of the Revenue and against Prestige on the question of confirming demand under section 28(4).
Misconstruction/ misinterpretation of the provision of the notification does not amount to suppression of fact and misstatement for imposition of penalty under section 114AA of the Customs Act - HELD THAT:- The expressions ‘suppression of fact' and ‘misstatement' do not even find place in this section. Learned counsel appears to have confused this section with the provision under section 28(4) to issue a demand invoking extended period of limitation. Section 114AA is attracted if any person knowingly makes signs or uses, or causes to be made, signed or used, false or incorrect declaration statement or document in the transaction of any business under the Customs Act - the submission that penalty under section 114AA could not have been imposed because there is no suppression of facts is without any force and deserves to be rejected. However, the allegation in the SCN and the finding in the impugned order is that Prestige had wrongly claimed the benefit of an ineligible exemption notification in the Bills of Entry and NOT that there was any factual mis-declaration in the Bills of Entry. Therefore, the penalty under section 114AA deserves to be set aside.
Penalty under section 114A of the Customs Act cannot be imposed, if the demand has been raised under section 28(1) of the Customs Act - HELD THAT:- The correct provision applicable during the relevant period was 28(4) which is the same as the old provision of “proviso to section 28(1)”. It is also found that the well settled legal position is that merely citing a wrong provision will not vitiate the SCN or the order. Therefore, there are no force in this submission of Prestige that penalty under section 114A could not have been imposed because the demand was under section 28(1).
The adjudicating authority failed to deal with the Notification No. 18/2011 which amended earlier Notification No. 45/2005-Cus dated 16.5.2005 since the Notification No. 18/2011 has substituted the words “produced or manufactured in” with the words “cleared from” - HELD THAT:- Learned counsel is correct in her submission that the SAD was exempted by this Notification on all goods cleared from an SEZ unit. However, this is subject to the condition that if the goods which are sold in the DTA are not exempted from the Sales tax by the State Government. This is a fact to be verified in respect of each of the invoices and the issue needs to be remanded to the Commissioner for examination and re-determination of SAD, if any.
Since Prestige was the exporter and not the importer in the DTA Bills of Entry, no duty can be demanded from it - HELD THAT:- As per section 28, the short paid duty can be demanded from the person chargeable with duty or interest. The person who is chargeable with duty or interest is the one who had allegedly short paid the duty and cleared the goods to DTA. In the facts of this case, Prestige paid duty and cleared the goods. The entities to which Prestige had sold the goods after clearing them from customs at their places neither filed the Bills of Entry nor paid the duty. They bought them from Prestige after they were cleared and the sale took place at their premises. Therefore, if Prestige short paid any duty and cleared the goods, such short paid duty can only be demanded from Prestige and not from the entities to which it had, after clearing them, sold the goods.
Since SEZ is treated as outside the customs territory of India, bringing goods into DTA from SEZ area is the import. Once such goods are cleared for consumption in the DTA, they cease to be imported goods. Therefore, there cannot be any assessment of duty under section 17 after they are cleared for consumption in the DTA - Prestige, as the owner of the goods, as the one who filed the Bills of Entry, as the one who paid the duty and cleared the goods to DTA, was also the importer in the case. It was responsible for paying the duty short paid and therefore, demand under section 28 has been correctly made on Prestige - In respect of the DTA Bills of Entry, Prestige was not only the exporter but was also, for the reasons stated before, the importer. The demand of duty short paid by Prestige can only be made from Prestige by issuing a notice under section 28.
Notification no. 12/2012-Cus dated 17.3.2012 (S.No.432) exempts BCD unconditionally and Additional Duty of Customs subject to the condition indicated therein and Prestige had paid the additional duty of customs as it had not fulfilled the condition - HELD THAT:- Notification No. 21/2002-Cus had, in turn, replaced its predecessor mega Notification No. 17/2001-Cus which had, until then, prescribed the effective rates of duties for all goods. All these three Notifications are worded similarly and have tables with similar columns viz., S. No., Chapter heading or sub-heading, description of goods, standard rate, additional duty rates and condition no. against each entry where the exemption is subject to a condition, the condition number is indicated and the conditions under each S. No. were described at the end.
The ambiguity in Notification No. 12/2012-Cus created by lack of an extra line space between the second clause and the clause pertaining to the condition must be interpreted in favour of the Revenue. It is held by the Constitution Bench of Supreme Court in Commissioner of Customs (Import), Mumbai versus Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT (LB)] that in case of any ambiguity in a Notification, it should be interpreted in favour of the Revenue and against the assessee. In this case, the ambiguity is only on account of typographical mistake in not leaving an extra line space in the Notification. Therefore, condition no. 5 at S. No. 432 of the exemption Notification No. 12/2012-Cus, as amended, must be fulfilled to avail the benefit of exemption from basic customs duty also. The remark of the Commissioner in paragraph 28 of the impugned order is not correct and his final order confirming the demand of basic customs duty is correct.
Penalties imposed on Manish and Chirag - HELD THAT:- Nothing in the section confines its application to only mis-declarations in exports. Evidently, it applies to both imports and exports. In this case, in the Bills of Entry filed by Prestige, a wrong exemption Notification was claimed which it was not entitled to because on the very face of the Notification, it is clear that it is subject to a condition of the imported goods being used for manufacture following a procedure. Neither Prestige nor its buyers had any manufacturing facilities, let alone, manufacturing goods after following the proper procedure. However, no facts were mis-declared in the Bills of Entry. Therefore, penalty under section 114AA on Manish and Chirag canCnot be sustained.
Conclusion - i) SEZ is treated as outside the customs territory of India only for authorized operations. For unauthorized operations, SEZ is treated as a customs port. ii) The Commissioner of Customs has jurisdiction to demand duty on goods cleared from SEZ to DTA. iii) Misstatement or suppression of facts justifies invoking the extended period of limitation under section 28(4). iv) The exemption from basic customs duty under Notification No. 12/2012-Cus is conditional upon the use of goods for manufacturing, which was not met by Prestige. v) Penalty under section 114AA was set aside due to lack of factual mis-declaration. vi) The demand of duty and penalty under section 114A were upheld, subject to re-examination of SAD exemption.
Appeal filed by Prestige is partly allowed to the extent of setting aside the penalty under section 114AA, partly rejected to the extent of confirmation of demand of basic customs duty and additional duty of customs and partly remanded to determine if there is any evidence of the imported goods being exempted from VAT or Sales Tax by the State Government and accordingly determine if any SAD is required to be paid and also to consequently re-determine the quantum of penalty under section 114A.
-
2025 (3) TMI 14
Maintainability of petition u/s 10-A of the Insolvency and Bankruptcy Code, 2016 - jurisdiction of NCLT to entertain the Company Petition given the default period in question - HELD THAT:- Section 10-A of IBC, 2016 is only a moratorium temporarily suspending initiation of CIRP. It is true that Section 10-A prohibits an application for initiation of CIRP of a Corporate Debtor, for any default arising on or after 25.03.2020 for a period of six months. The proviso also indicates that no application can ever be filed for initiation of CIRP of a Corporate Debtor for the said default occurring during the said period, i.e., on or after 25.03.2020 for a period of six months or such further period not extending one year from such date.
In the instant case, though the default commenced after the period specified in Section 10-A, it is not in dispute that it continued even after the moratorium period. The intention of the legislature is to give relief by suspending initiation of CIRP. This Court, from the plain reading of Section 10-A is unable to agree with the learned Senior Counsel that even in a case where the default continued after the period of moratorium, no application can be filed.
Since proviso to Section 10-A mandate that no application shall ever be filed for initiation of CIRP of the Corporate Debtor for the default occurring during the moratorium period, the above judgment relied upon by the learned Senior counsel is in tune with the statutory provision. However, the proviso cannot be extended to cases where the default is continued beyond the moratorium period. Therefore, there is no jurisdictional error to entertain a writ bye-passing an effective alternative remedy.
Conclusion - The writ petition was not maintainable, as the NCLT had jurisdiction to entertain the petition due to the continued default beyond the moratorium period.
Petition dismissed.
-
2025 (3) TMI 13
Obligation to pay for electricity consumed during the CIRP period - Termination of electricity supply to the corporate debtor during the Corporate Insolvency Resolution Process (CIRP) under Section 14(2) of the Insolvency and Bankruptcy Code (IBC) - HELD THAT:- Section 14(2A) was inserted by Act 1 of 2020 w.e.f. 28.12.2019. Sub-section (2A) contemplates that where the interim resolution professional or resolution professional considers the supply of goods or services critical to protect and preserve the value of the corporate debtor and manage the operations of such corporate debtor as a going concern when the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period. The goods or services which are critical to protect and preserve the value of the corporate debtor is thus dependent on the decision taken by the IRP and the resolution professional. Sub-section (2) and (2A) uses two expressions i.e. ‘essential goods or supply’ (which may be specified).
The essential supply thus has need to be specified by the Board as per Regulation and Regulation 32 of the CIRP Regulations specified the ‘essential supplies’. Thus, essential supplies have to be treated in a manner and to the extent as provided in Regulation 32. It is thus clear that the electricity which is not a direct input to the output produced is essential supply within the meaning of Section 14(2) read with Regulation 32 of the CIRP Regulations and it is clearly covered by the protection extended by legislature under Section 14(2).
The Hon’ble Supreme Court again in Madanlal Fakir Chand Dudhediya vs. Shree Changdeo Sugar Mills Ltd. and Ors. [1962 (3) TMI 33 - SUPREME COURT] had held that first rule of construction is that the words used in the section must be given their plain grammatical meaning and the two sub- sections must be read as parts of an integral whole and an attempt should be made in construing them to reconcile them.
The fact that payment to essential supplies can be made as per the decision of the resolution professional even during currency of the CIRP when the costs is incurred by the resolution professional. The statutory scheme, however, as contained in Section 14(2) prohibits the supplier of essential goods from terminating/ discontinuing the supply during moratorium period. As per statutory scheme, the corporate debtor is entitled to receive the essential goods and services during moratorium and even the payment is not made of essential goods and services that shall form part of the CIRP costs.
The above Discussion Paper highlights the issue of operational difficulty with regard to supply of electricity under Section 14(2) read with Regulation 32. The illustration which is now sought to be amended, amending the regulation now contemplate that if the corporate debtor operates a manufacturing facility that may be treated as critical service by the insolvency professional for which current dues for such services must be paid.
In M/s Power Mech Projects Ltd. vs. Essar Power (Jharkhand) Ltd. & Anr. [2025 (2) TMI 217 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB] the effect and consequences of Discussion Paper considered. It is already held that the Discussion Paper has no effect on statutory scheme operating in the field and Discussion Paper only can be basis for amending regulation. The Discussion Paper, thus highlights the issues and the amendment in statutory scheme, if any, may take place only when the regulation are amended and notified.
The resolution professional, as assured to the appellant, need to take steps to clear the electricity dues, however, non-payment of electricity dues cannot be a ground to discontinue the electricity which is a clear mandate by Section 14(2). The IBBI has already taken notice of the operational issues and having proposed Regulation 32 of the CIRP Regulations, need to expedite its process and amendment, if any, which may be carried out at an early date to mitigate the hardship of the supplier of essential services.
Conclusion - i) The order of the Adjudicating Authority directing Appellant not to discontinue the electricity connection necessary for running the manufacturing facilities of the corporate debtor is not interfered with. ii) The resolution professional shall endeavour to pay the electricity dues as assured by it through various letters to the Appellant by taking steps including raising interim finance, if any. iii) IBBI in furtherance of its Discussion Paper dated 04.02.2025 which proposes amendment in Regulation 32 may expedite its steps regarding amendment, if any, which amendment may redress several operational issues as noticed by the IBBI itself.
Appeal disposed off - Let Registry communicate the copy of this order to Insolvency and Bankruptcy Board of India (IBBI).
-
2025 (3) TMI 12
Dismissal of Application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Respondent, seeking resolution of an outstanding amount - existence of Pre-Existing Dispute between the Parties or not - HELD THAT:- On candidly asking the Appellant as to whether the Appellant has denied the conversation in the grounds of Appeal to have ever happened or in the manner it has happened, to which he could not answer in negative. Thus, once there is no dispute that there has been conversation between the Parties, even on WhatsApp which is a common mode of communication these days, it does not lie in the mouth of the Appellant to contradict the same on the basis of the Judgment in the case of M/s. Kashyap Infraprojects Pvt. Ltd. [2024 (11) TMI 1288 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB].
The Learned Tribunal has categorically observed that there was conversation between the Parties that the rates of Soya Bean have gone down and further recorded the conversation between the Parties to the effect that Appellant wanted to wait for the market to improve and did not receive the goods. The same conversation has been noticed by the learned Tribunal in Para 23 of the Impugned Order. Therefore, the Tribunal has rightly come to the conclusion that there was a Pre-Existing Dispute between the Parties and the process under the Code is being used for recovery for which it is not the appropriate forum.
Conclusion - The dismissal of the application upheld, concluding that there was a pre-existing dispute between the parties and that the Code was not the appropriate forum for the claim.
There are no reason to interfere in the Impugned Order and hence the present Appeal is hereby dismissed
-
2025 (3) TMI 11
Invocation of extended period of limitation under the First Proviso to Section 73 (1) of the Finance Act, 1994 - service tax not levied or paid due to fraud, collusion, willful misstatement, or suppression of facts by the petitioner - HELD THAT:- As is evident from the proposition which came to be propounded by the Supreme Court in P&B Pharmaceuticals and Larsen & Toubro [2007 (5) TMI 1 - SUPREME COURT], it was held that once necessary facts had already been brought to the notice of the authorities at different points in time, the same would clearly be a circumstance destructive of any allegation of the First Proviso to Section 73 (1) being applicable. The Supreme Court held that once the stand of the assessee was known and formed the subject matter of earlier notices, it would be impermissible for the respondents to allege suppression of facts. When those principles are applied to the facts of the present case, it becomes apparent that it was wholly impermissible for the respondents to resort to the First Proviso to Section 73 (1) of the Act.
As is ex facie apparent from a reading of the above, there is no material on the basis of which the allegation of a wilful suppression of facts is sought to be sustained. Regard must be had to the fact that the extended period of limitation cannot be justified by a mere reproduction or incantation of the language of the statute. A wilful suppression of facts, and which may have allegedly lead to a failure to pay tax, would have to rest on material which constitutes proof of the allegation levelled.
Conclusion - The invocation of the extended period of limitation under the First Proviso to Section 73 (1) was unjustified, as the facts were already known to the respondents from previous proceedings.
The impugned SCN is quashed - petition allowed.
-
2025 (3) TMI 10
The Appeal Tribunal considered Service Tax Appeal No. ST/40660/2018 filed by M/s. Cognizant Technology Solutions India Private Limited against the Order-in-Appeal No. 415/2017 passed by the Commissioner of Central Excise (Appeals - II), Chennai. The appeal challenged the rejection of refund claims on the grounds of limitation and merits. The Appellant, engaged in providing IT services, sought refund of accumulated CENVAT credit for the periods from July 2009 to December 2009, August 2011 to October 2011, and January 2012 to March 2012. The Departmental appeal was allowed by the Commissioner, leading to the Appellant's appeal before the Tribunal.The key issues considered in the judgment are as follows:1. Whether the Appellant's refund claims were rightly rejected by the Commissioner of Central Excise (Appeals - II) on the grounds of limitation and merits.2. Whether the Appellant's transition of CENVAT credit to the GST regime rendered them ineligible for the refund claims.The Appellant argued that the transition of CENVAT credit to the GST regime made them ineligible for the refund claims and requested withdrawal of the appeal. The Department, represented by Shri Anoop Singh, highlighted procedural deficiencies in the appeal memorandum, emphasizing the absence of essential documents such as the original refund application and deficiency memo.The Tribunal, after hearing both parties, noted the Appellant's submission regarding the transition of CENVAT credit to the GST regime and their request for withdrawal of the appeal. Consequently, the Tribunal dismissed the appeal as withdrawn without expressing any opinion on the merits of the case.In conclusion, the Tribunal dismissed the appeal as withdrawn, considering the Appellant's transition of CENVAT credit to the GST regime, which rendered them ineligible for the refund claims. The judgment was pronounced on 28.02.2025.
-
2025 (3) TMI 9
Classification of service - Works Contracts Service (WCS) or Construction of Residential Complex Service (CRCS) - HELD THAT:- Upto 1.7.2010, the classification of service would remain the same as declared by the service provider but however, post-1.7.2010 the tax would be chargeable under ‘Construction of Complex Service’ if it is service simpliciter and under ‘Works Contract Service’ if it is a composite works contract.
From the discussions in the respective Orders-in-Original, there is no dispute that (i) the nature of work was under composite contract and (ii) in respect of ongoing projects commenced prior to 1.6.2007 for which the appellant had already remitted the service tax under SCS, though no service tax in respect of a composite contract was leviable in view of decision in L&T Ltd. [2015 (8) TMI 749 - SUPREME COURT]. In any case, it is an admitted fact on record that during the periods under dispute, the appellant continued to remit the service tax under WCS and hence there was no reason for the Revenue not to accept the same. Hence in the light of decision of Larsen & Toubro Ltd, which has been followed by various Benches of Tribunal across India, the liability as under CRCS cannot sustain.
Since the issue of interpretation was involved, there cannot be any scope of to allege suppression or whatsoever and hence no penalty could be exigible and hence demand and penalties are set aside.
Conclusion - The liability for service tax under CRCS cannot sustain for the period before 1-7-2010.
Appeal disposed off.
-
2025 (3) TMI 8
Dismissal of appeal holding the appeal to be time-barred in terms of proviso to (3A) of Section 85 of Finance Act, 1994 - HELD THAT:- The appellant has not come present to contest the findings nor any evidence contrary to these findings has been brought on records. The grounds of appeal are silent to this effect. Resultantly, there are no reason to differ from the findings as arrived by the Commissioner (Appeals).
The Hon’ble Supreme Court in Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT] has already held that the Commissioner (Appeals) has the power to condone the delay only up to 30 days after the expiry of 60 days from the date of receipt of the order in original. In the present case, the order in original dated 23.02.2015 was duly dispatched by the department to the appellant on the date of order itself and the same address on which the show cause notice was served to the appellant which was duly received. The presumption of service is very much attached to the said dispatch. Though, the presumption was rebuttable but the appellant has not produced any document on record to rebut the same. He has not even appeared in person to make any submission in rebuttal thereof.
There are no infirmity in the impugned order. The same is hereby upheld - appeal dismissed.
-
2025 (3) TMI 7
Dismissal of appeal due to non-compliance of the pre-deposit condition mandated under Section 35F of the Central Excise Act, 1944 - HELD THAT:- There is no dispute about the fact that 7.5% was initially deposited before the Commissioner (Appeals) at that time when the integrated portal did not exist. Thereafter, while approaching the CESTAT, the remaining 2.5%has been deposited by the Petitioner. Thus, in effect the entire 10% which is the pre-deposit amount, stood deposited.
The appeal could not have been rejected merely on the ground that it was deposited on a wrong account especially when the said integrated portal was not even available for the Petitioner at the time of the initial deposit.
Following the decision of the Bombay High Court in Sodexo India Services Pvt. Ltd. vs. Union of India [2022 (10) TMI 264 - BOMBAY HIGH COURT], this Court is, therefore, inclined to direct that the appeal would now be heard by CESTAT on merits without any further deposit being insisted upon. The deposit already made shall be treated as satisfaction of the pre-deposit condition.
Conclusion - The appeal would be heard by CESTAT on merits without any further deposit being insisted upon. The deposit already made was deemed sufficient to satisfy the pre-deposit condition.
The order dated 08th November, 2024 passed by CESTAT is set aside - petition allowed.
-
2025 (3) TMI 6
Dismissal of appeal due to non-compliance with the pre-deposit condition under Section 35F of the Central Excise Act, 1944 - HELD THAT:- Admittedly, the pre-deposit was made by the Appellant way back on 13th August, 2018 and 17th August, 2018 itself for a sum of Rs. 1,60,600/- and Rs. 4,750/- respectively. The Petitioner has also submitted the challans showing the deposit. The ground taken in the impugned order is that the same was deposited in a wrong account and therefore credit cannot be given of the pre-deposit and hence the appeal does not deserve consideration on merits.
A mere deposit in the wrong account, that too, when the integrated portal might not have been fully functional or the existence of the same was not within the knowledge of the Petitioner, cannot result in a rejection of the appeal on the ground of defects. The matter in the opinion of this Court deserves consideration on merits by the CESTAT.
Let a competent official from the Respondent-Department be present on the next date of hearing with the instructions - List on 21st February, 2025.
-
2025 (3) TMI 5
Method of valuation - whether the valuation of goods sold by the appellant from their depot during the period from 01.04.2004 to 31.12.2012 is covered under Rule 7 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000? - HELD THAT:- It is an admitted fact that 90% of the sales are carried at the factory gate to unrelated customers and as per the Rule 7 of the Central Excise Valuation (Determination of price of Excisable goods) Rules, 2000, it is very clearly stated that, where excisable goods are not sold by the assessee at the time and place of removal, Rule 7 can be invoked.
Considering the decisions relied by the learned Consultant for the appellant, the demand by invoking the Rule 7 of the Central Excise Valuation (Determination of price of Excisable goods) Rules, 2000 is unsustainable.
Appeal allowed.
....
|
9911796707
