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2024 (3) TMI 1254
Income deemed to accrue or arise in India - Payments received by the assessee from it Indian customers on account of Centralized Services - Fee for Technical Services as defined u/s 9(1)(vii) of the Income Tax Act, 1961 or “Fee for included Services as defined u/Article 12(4)(a) of the India - US DTAA - absence of a PE in India - Assessee Company is a Company incorporated in United States of America (USA) and carries on the business of providing various hotel related services in several countries across the world - HELD THAT:- As decided in assessee own case [2023 (9) TMI 1448 - ITAT DELHI] for A.Y. 2018-19 and A.Y. 2019-20 we agree with the decision of learned first appellate authority in declaring the receipts from centralized services to be not in the nature of FTS/FIS.
Fee received by the assessee under the Centralized Services Agreement cannot be treated as FIS either under Article 12(4)(a) or 12(4)(b) of the India–US Tax Treaty. As a natural corollary, it can only be treated as business income of the assessee. Hence, in absence of a PE in India, it will not be taxable. Decided in favour of assessee.
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2024 (3) TMI 1253
Levy of stamp duty on ‘Bill of Entry’ (BoE) and on Delivery Orders (DO) - goods imported in Maharashtra - seek refund paid on stamp duty - Whether the State of Maharashtra has the legislative competence to levy, impose and collect stamp duty on a Delivery Order, an ‘instrument’ defined in Section 2(l) of the Maharashtra Stamp Act, 1958, chargeable with duty as mentioned in Article 29 of the First Schedule in the Maharashtra Stamp Act, 1958? - Entries 41 and 83 of List I of Schedule VII of the Constitution of India - ultra vires Article 246(1), 286(1)(b) and 286(2) - HELD THAT:- A plain reading of the taxing provision of the MSA suggests that a DO mentioned in Article 29 is indeed an instrument. It is not excluded from the definition of instrument. It creates an entitlement in the consignee, i.e., the Petitioners herein or any person named by them in the DO, to take delivery of the goods lying in any dock or port, in any warehouse in which the goods are stored, or deposited on rent or hire or upon any wharf etc.
The definition of ‘instrument’ includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished, or recorded. Certain documents have been specifically excluded from the definition. A DO is not one of them.
Once the goods reach the destination port, they are unloaded and stored in a warehouse or storage as directed by transacting parties. In the meantime, the consignee or his agent presents a document called the BoE also containing a description of the goods matching that contained in the BoL and other details to the customs authorities. It is on the basis of the BoE that customs duty payable is computed and paid by the consignee. Upon evidence of payment of customs duty, and also its own charges, the shipper then issues the DO saying that the custodian of the goods may hand the goods over to the consignee (as there is no pending duty, claim or demand). Stamp duty is then paid on the DO and upon verification of payment of the same, the custodian releases the custody of the goods.
Whether the DO is an integral part of the chain of events in the course of import of goods or is independent of the import albeit incidental thereto - If it is the latter, and not an integral part of the import, the State is well within its powers to levy stamp duty on it as per the pith and substance rule since the primary object and the essential purpose of Article 29 read with Section 2(l) of the MSA is then identified as distinct and not an integral part of an import but more as consequence of import.
The BoE is presented for computation of the customs duty. Once the customs duty is paid, the import process so far as the customs authorities and the Customs Act is concerned ends. The DO is then issued by the shipper upon proof of payment of customs duty and its own charges. The DO does not form part of the chain of the import process and the taxing event occurs beyond the course of import. As Dr Saraf puts it, if a consignee can take delivery without a DO, there would be no question of a stamp duty impost. There is thus, no overlap in the legislative field and, the State and the Centre are both well within their own occupied area of Legislation.
The DO in question in this group of cases only springs into being when that frontier has ended, i.e., after the process of assessment and recovery of customs duty is complete. The BoL, a document of title, originates when goods are laden on the vessel. It is the first in point of time. The BoE, as the Gujarat High Court judgments point out, is for the purposes of customs duty assessment. This is second in point of time. The DO comes into existence third in time sequence, after the customs duty, dues, freight, etc., are paid and the goods are lien-free, i.e., available for delivery. The ‘customs barrier’ is, therefore, not a physical ‘barrier’ per se, but speaks of a point in time after the role of customs has ended.
Thus, a parallel can be drawn between the taxing power of the State in respect of levy of entry tax in the aforesaid decision and levy of stamp duty on a DO in the present case. Article 286(1)(b) of the Constitution restricts the power of the State to impose tax on the supply of goods imported into the country. The imposition of stamp duty on a DO in no manner encroaches upon the parliamentary legislature in Entry 83 of List I of the VIIth Schedule.
Shipper’s lien on the goods - The DO in the present circumstances has nothing to do with the customs duty nor the clearance by the customs authority for domestic consumption. Dr Saraf candidly says that if the Petitioners are able to bye-pass the requirement of a DO, the State will not have any claim of stamp in such a situation. But the moment there is a DO, the same will not be valid or accepted by the custodian without proof of payment of the stamp duty.
DO is not a document of title under Article 29 of the MSA and hence, it is not an ‘instrument’ - It is a DO which entitles the person named therein to take delivery of the goods after discharging the dues of a shipper. It is only after the shipper’s charges are cleared that his lien on the goods is extinguished. A right to possession of the goods is distinct from ownership of the goods. Although title to goods includes ownership and possession, the former may exist without the latter. Ownership denotes de jure possession, but another person may be in de facto possession of the goods. The distinction between title and possession is self-evident. A BoL may, for instance, be transacted in a sale in the high sea. Title would pass. But the new/substituted consignee would not get physical possession of the goods sold, the high seas’ sale notwithstanding, until the goods were cleared through customs on arrival at the destination port. That possession may happen with or without a DO; and it is for each state government to decide whether or not to levy stamp duty on the DO.
Consequently, the DO is not a BoL, nor a BoE, and it is not covered by any exclusion of the BoL or the BoE. As in the present case, even if we were to accept the contention of the Petitioners that the BoL constitutes title to the goods, without a DO, the owner or the consignee may not have possession of the goods without payment of the carrier’s charges. Only upon release of the shipper’s lien is the consignee entitled to delivery/possession of the goods. Thus, it is not necessary for the DO to be a document of title to fall within the purview of the definition of ‘instrument’.
Once we have held that the State has not encroached upon the legislative field of the Union, merely because the amount of stamp duty is computed on the valuation of the goods does not preclude a DO from being an ‘instrument’ chargeable to stamp duty by the State.
Thus, we hold that the action of the State of Maharashtra in levying stamp duty on ‘DO’ as provided in Article 29 of Schedule I of the MSA is well within the legislative competence of the State and does not intrude upon the legislative domain of the Parliament as reserved in Entries 41 and 83 of List I of Schedule VII of the Constitution of India and is not ultra vires Article 246(1), 286(1)(b) and 286(2) of the Constitution of India.
The alternative prayer of the Petitioners to read down Article 29 of Schedule I of the Stamp Act of 1958 to not apply to a DO issued in respect of goods imported in Maharashtra is untenable. As held by the apex court in the matter of The Authorised officer, Central Bank of India vs Shanmugavelu [2024 (2) TMI 291 - SUPREME COURT], the rule of reading down is to be used for a limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is to be used keeping in view the scheme of the statute and to fulfil its purpose. We have already held that the DO is not an extension of a BoL and both are mutually exclusive documents. Thus, there is no statutory conflict and the requirement of reading down the provision does not arise.
Since we hold as such, the further question of granting refund of payments made by the Petitioners towards stamp duty is redundant.
All interim applications pending therein also stand disposed.
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2024 (3) TMI 1252
Seeking direction to sanction and grant refund of excess duty - imports networking equipment - Non speaking order - HELD THAT:- Learned counsel for petitioner submits that the order in appeal was passed on 31.10.2022 and till date the adjudicating authority has not disposed of the proceedings. He further submits that the impugned order which records that the Notification dated 10.12.2019 was made effective from 01.01.2020 seems to suggest that the bill of entry lodged by the petitioner was filed after the Notification came into force. He submits that bill of entry was filed on 16.11.2019 before the Notification admittedly came into force on 01.01.2020.
Thus, the petition is disposed of directing the adjudicating authority to dispose of the proceedings expeditiously within a period of six weeks from today after giving an opportunity of personal hearing to the petitioner.
The petition is disposed of.
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2024 (3) TMI 1251
EPCG Scheme - Benefit of an EXIM scheme - Non fulfilment of the export obligations - Scope and terms of the Bond executed - Duty demand - differential duty - confiscation of the goods imported - fine - penalty - manufacture and export of air purifiers - Import of machinery at concessional rate of customs duty - HELD THAT:- Rule 6 deals with the conditions of licence, Sub Rule (2)(b) of the Rules mandates that an applicant for a licence should execute a bond for complying with the terms and conditions of the licence. The said Rule in clear terms mandates that an applicant for licence should execute a bond for complying with the terms and conditions of the licence. In compliance with the said Rule, the bond had to necessarily be executed by the appellant herein. It is axiomatic that when a person claims certain benefits on certain conditions and if that benefit is extended to a particular individual, he would have to fulfill his obligations on which basis the licence had been granted, or otherwise the executor can be penalised.
In this case he had been granted a benefit of reduced customs duty on the promise of bringing in foreign exchange into the country. Since, it had not full filled its part of obligations, definitely it is liable to be penalised. The condition which the appellant counsel seek to be void on the basis of not being supported by any substantive provision would have to fall, since an execution of bond is contemplated under Rule 6 (2) (b) of Foreign Trade (Regulation) Rules 1993 and the reason for the execution of the bond is for the appellant to fulfill its obligation under the licence. Therefore, it is too farfetched for the appellant to content that the said condition would be a void condition.
Thus, we are not inclined to interfere with the order passed by the learned Single Judge. In fine, this Writ Appeal fails and is accordingly, dismissed.
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2024 (3) TMI 1250
Validity of order of CESTAT - Redemption for home consumption allowed, despite admitting the fact that the condition of para 2.31 of the Foreign Trade Policy are not satisfied - CRO itself is formulated under the provisions of Bureau of Indian Standards Act - whether CESTAT is right in overlooking the CRO, 2012, which covers Multifunctional and Printers/ Devices (MFDs) along with printers and plotters? - HELD THAT:- It is submitted by both the counsel that the goods have already been released on payment of duty and other dues, as per the order of the Tribunal.
This Civil Miscellaneous Appeal stands dismissed, keeping the substantial questions of law involved herein open to be adjudicated in appropriate proceedings.
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2024 (3) TMI 1249
Recovery of duty drawback which was granted earlier with interest - Non-realisation of export proceeds - 100% Export Oriented Unit - exporter of cotton woven powerloom bed covers, pillow covers, cushion covers and bags to France - HELD THAT:- The learned counsel for the petitioner has relied on the web portal of the Directorate General of Foreign Trade and submits that the consignment dated 19.03.2014 was realised in the petitioner's account on 12.05.2014 and he is also having the certificate to that effect. However, the petitioner claims that it could have been verified by the respondent in their portal before passing the impugned order. On the other side, the respondents claim that the certificate ought to have been produced by the petitioner at the relevant point of time. This Court, in order to provide one more opportunity to the petitioner, is inclined to remand this matter back to the authorities to consider the matter afresh.
Thus, this writ petition is allowed. The order impugned in this writ petition is hereby set aside and the matter is remanded back to the respondents. The petitioner shall appear before the respondents on 15.02.2024, with the Bank Realization Certificate issued by the Directorate General of Foreign Trade and on such appearance, the respondents shall take a decision afresh after affording opportunity to this petitioner. No costs. Consequently, connected Miscellaneous Petitions are closed.
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2024 (3) TMI 1248
Valuation - Validity of Re-determination of Value - Goods have already been cleared from the port of import after examination and enhancement of value - Valuation based on Chartered Engineer Certificate - Import of second-hand printing machines - No opportunity to cross-examine the Chartered Engineer - seizure - provisionally released on execution of Bond and Bank Guarantee - confiscation - differential duty - penalty - HELD THAT:- We are of the considered opinion that the Department cannot re-assess the impugned goods for the second time. We find that the investigating officers did not question the Chartered Engineer, who issued the certificate on import and have also not questioned the proper officers, who allowed the clearance of Bill of Entry after the initial re-assessment. Department has not brought forth any omission or commission on the part of the Chartered Engineer or the proper officer so as to necessitate the revision of the assessment order passed in respect of the impugned goods. The assessment orders, which have attained finality, have also not been challenged; the same were neither stayed nor set aside by a competent higher forum or authority. Thus, we find that the Department is not within their right to subject same machines to another examination and assessment.
We find that Department has seriously erred in re-determining the value of the impugned goods; the value of which is already enhanced at the time of import. We find that CVR 2007 does not give any scope for such re-assessment particularly when there was no challenge to the assessment made at the time of import by way of filing any appeal. Moreover, we find that whatever is construed as evidence in the impugned case pertains to import of some other machine albeit by the same importer. We find that evidence in one case cannot be a basis for confirmation of offence in some other case; such a confirmation defies all established principles of law.
The impugned order passed without giving an opportunity to the appellants to cross-examine the Chartered Engineer is a serious violation of principles of natural justice. An order passed in this manner cannot be held to be legal, proper and justified. We find that the Revenue has not made out any case for redetermination of the declared value which was already enhanced at the time of import. Therefore, there is no violation of any of the provisions of the Customs Act by the appellant-importer and thus, the goods are not liable for confiscation and no differential duty is payable by the appellant importer. Consequentially, no penalty is imposable either on the appellant-importer or their directors.
Thus, the impugned order is set aside and the all the appeals are allowed, with consequential relief, if any, as per law.
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2024 (3) TMI 1247
Misdeclaration of the transaction value - Confiscation of goods - Recovery of the differential duty - interest and penalty - Import of Copper Cathodes - Acceptance of loaded value of the consignments earlier - HELD THAT:- We find that learned Commissioner finds that the date of invoice is later than the date of bill of lading; the appellants did not submit the original copy of the contract and therefore, there are reasons to believe that the transaction value is liable for rejection. On the other hand, learned Counsel for the appellants submits that, their business model was informed to the Commissioner and have produced the original contract along with bank payment remittance advice on 06/09/2012 and this being so rejection of the transaction value was incorrect; He further submits that none of the conditions illustrated under Rule 12 exist in the instant case and therefore, the rejection was not proper and legal. We find that Learned Commissioner finds that the importer was accepting the loaded value of the consignments cleared earlier and for that reason the importer does not have any reason for not accepting the loading of the value in the instant case.
It is also not explained as to how the situations illustrated under Rule 12 are existing and no case of payment of differential amounts through non-banking channels is alleged. Thus, we find that Revenue has not made any case for rejection of the transaction value i.e, the value declared by the importer.
Thus, we find that no case has been made for rejection of the declared value in the impugned case and therefore, the consequential redetermination of value, confiscation of the impugned goods and imposition of penalty are not proper and legal. Hence, the impugned order is set aside and the appeal is allowed.
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2024 (3) TMI 1246
Misdeclaration and undervaluation of the goods - redemption fine and penalty - Imports Pile Fabrics declaring the same as ‘Stock Lot Polyester Knitted Fabrics’ - whether the enhancement of value as well as the allegation that the goods have been mis-declared is legal and proper - HELD THAT:- It can be seen that the textile expert who reported that the goods have brushing on one side does not have knowledge about what is brushing and how it is carried out. The allegation that the goods have been mis-declared is without any factual basis. Further, in para-2 of the SCN dt. 12.3.2008 it has been categorically stated by the department that docks officers have examined and reported that the goods are Stock Lot of Polyester Knitted Fabrics in different colours. We therefore hold that the finding of the department that goods have been mis-declared is without any factual basis and requires to be set aside.
Undervaluation of the goods - The appellant has declared the value of the goods as USD 1/kg. However, the department has re-determined the value as Rs.112.18/ kg and Rs.137.47/kg in the de novo orders. In the show cause notice, the enhancement of value has been proposed on the basis of market enquiry. This evidence with regard to the market enquiry was supplied to the appellant along with show cause notice. The appellant then cross examined these traders in the de novo proceedings. None of the traders supported the case of the department. Thereafter, in the de novo proceedings the original authority has completely rejected the evidence of the traders and relied upon the National Import Data Base (NIDB). The details of the NIDB data of which the adjudicating authority has relied for enhancing the value has not been supplied to the appellant. The SCN does not draw any reference of NIDB data and the enhancement was proposed in the SCN on the basis of market enquiry only. The department ought not to have relied on the NIDB data without providing copies to appellant. We therefore find that the enhancement of value is without any legal or factual basis. The same requires to be set aside which we hereby do.
Thus, we are of the considered opinion that the demand, interest, redemption fine and penalty imposed cannot sustain.
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2024 (3) TMI 1245
Monetary Limit - Filing of Appeal by the Revenue / Department - threshold limit for filing appeals as per Central Board of Indirect Customs (CBIC) circulars - Instruction are binding effect Or not - Valuation of imported goods - Aluminum Scrap - rejection of declared value - enhancement of assessable value - HELD THAT:- On Persual of the provisions, it is clear that the Instruction/Circulars are mandatory/binding vis-a-vis the Departmental Officers are concerned. However, vis-a-vis the Superior Courts including Tribunals, the objective is different. The Tribunal as well as Superior Courts have to prioritize the interest of justice. It is the mandate for the Courts to see that none shall be condemned un-heard and that none shall be pre-judicially affected. The Courts/Adjudicating Authorities have to see whether any Circular/Instruction of the department is sufficient enough to fulfil the requisite interest of justice in the given set of circumstances.
The order of Commissioner (Appeals) under challenge before us is held to have been passed in violation of statutory mandate. Hence it cannot be allowed to attain finality due to Departmental Instructions or Clarifications which have to be within the four corners of parent legislation. The circular was for department to follow and not for the assessee to rely upon, especially when the self assessment of assessee is under shadow of doubt, more so when the department is being denied the proper opportunity to defend its stance. Above all, there cannot be any intention of the Department to issue any instruction which is detrimental to its own interest. As observed above, the only intention of the impugned instruction for fixing monetary limit is to reduce the Department litigation.
The instruction cannot be enforced at the cost of prejudice to the issuing authority itself. Rule of law requires a fair opportunity of being heard even to Government Authorities/Department herein. Commissioner (Appeals) has wrongly relied upon the decision of Sanjivani Non-ferros Trading Pvt. Ltd. Vs. Commissioner of Customs, [2018 (12) TMI 738 - SUPREME COURT] as in that case, the enhancement has not under Section 17 of the Customs Act, 1962.
Instead of counting each Bill of Entry for the purpose of calculating threshold monetary limit for filing appeal, it may be seen that all the 30 Bills of Entry pertain to one importer, namely Century Metal Recycling Private Limited for the same commodity i.e. aluminium scrap imported during more or less same period/time. Further, the Commissioner (Appeals) has passed one Order -in -Appeal for all the 57 Bills of Entry though numbered as 59-115/2019. Against the said OIA, this appeal is filed before this Tribunal (CESTAT).
In view of said Rule 6A of CESTAT Procedure Rule, 1982, we hold that the present case to be a fit case for this bench to exercise its power to not accept the CBIC instructions in this particular appeal and hold that CBIC Instruction F. No. 90 dated 17.08.2011 prescribing monetary limit for filing appeals before this Tribunal is not mandatory. Consequently, we hold that the Departmental Appeals shall be heard on merits. List for final hearing on 13th May, 2024.
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2024 (3) TMI 1244
Valuation - import of Old and used Digital Multifunction Printer - enhancement of value - restricted items - Without license - Confiscation - HELD THAT:- We hold that the date of importation in this case is from 19.10.2012 to 22.01.2013, which are prior to issuance of DGFT Notification No.35(RE-2012)/2009-2014 dated 28.02.2013. Therefore, following the decisions in the case of Bhawani Enterprises [2017 (11) TMI 974 - CESTAT KOLKATA], we hold that as the import has been affected prior to 28.02.2013, there is no restriction of import of the subject goods. Hence, no specific license is required for import of the impugned goods.
In that circumstances, we hold that for enhancement of value, the Chartered Accountant’s Certificate cannot be relied upon unless and until there is corroborative evidence. Therefore, we hold that that the goods are not liable for confiscation. No redemption fine can be imposed and no penalty on the respondent.
In the result, the Revenue’s appeal is dismissed.
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2024 (3) TMI 1243
Oppression and Mismanagement - denial of inspection of the books of accounts - EOGM not called for - purchase of loan without consent - failure to comply with statutory compliances - Validity of direction for independent forensic audit - HELD THAT:- The appellant was directed to file reply affidavit. Admittedly the appellant neither filed its reply affidavit nor documents as are now filed before us. It is in these circumstances it is needed to examine if the impugned order was wrong. Admittedly if the reply affidavit and documents were not filed before the Ld. NCLT then there was nothing before the Ld. Tribunal except to proceed on submissions made in the petition or in an application for interim relief. Such submissions have been duly noted in the impugned order. Para 9 of the impugned order rather says it is only in view of the averments made by the petitioner in its petition the interim order is passed.
There are no infirmity in the impugned order before us, specially in view of the fact only oral submissions were made before the Ld. NCLT as alleged, without support of any documents or reply. Even otherwise conduct of forensic audit does not determine the rights and liabilities of the parties but merely would enable the Ld. Tribunal to appreciate the issues involved. The issues raised in the petition before Ld. NCLT are allegations of siphoning of funds, grave lapses in the appointment of statutory auditors, lack of approval of petition on reserved matter, non-maintenance of proper books of accounts and hence this conduct of forensic audit will only come to the aid of the Tribunal to adjudicate the petition.
Thus in view of the allegations of serious lapses and non-compliance in the financial statements, no proper disclosure of related party transactions, non-reporting, non-disclosure and non-compliance of statutory compliances, as alleged in the petition before Ld. NCLT, the interim order passed by the Ld. NCLT is justified and there are no reason to interfere in the impugned order.
Appeal dismissed.
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2024 (3) TMI 1242
Seeking restoration of name of the company on ROC - failure to file the Financial Statement and Annual Returns since incorporation - Section 252 of Companies Act, 2013 - HELD THAT:- It is not the case of the respondent that appellant company was ever engaged in the transfer of the funds to its own sister concerns or that it is a Shell company or is engaged in siphoning of funds of another company. Rather the appellant claims to have carried commercial transactions with a view to establish a relationship with DPIL in order to commence its operations in consonance with the objectives of the appellant company and had amassed substantial assets but due to the fact DPIL went into insolvency in the year 2017, the company suffered a loss.
On going through the auditor reports for the financial years 2016- 17, 2017-18, 2018-19, 2019-20, 2020-21 which show the Non-Current Liabilities to the tune of Rs.7,36,23,359/-; Current Liabilities to the extent of Rs.88.00 Crores; Non-Current Assets to the extent of Rs.06.00 Crores (approximately), the Current Assets of Rs.25.94 Crores, the Fixed Assets of Rs.56.32 Crores; the Loan & Advances of Rs.25.93 Crores etc., and further since it is not a case of RoC the appellant is a Shell company and was at any time engaged in siphoning of the funds, hence, if the company’s name is restored it shall cause no prejudice to RoC. Admittedly, Nil revenue from operations cannot be a sole cause for striking of the name.
The appellant undertakes to be more cautious and vigilant in future in filing compliances under the applicable Laws and would adhere to all stipulated timelines designated without fail and shall pay cost imposed as per law. An affidavit in this regard be filled within a week from today before this Tribunal.
It is just and equitable to restore the name of the appellant company to the record of RoC - the impugned order set aside - RoC, New Delhi is directed to restore the name of the company to the Register of Companies subject to the fulfilment of compliances imposed - appeal disposed off.
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2024 (3) TMI 1241
Sanction of composite scheme of amalgamation - Section 230-232 of the Companies Act read with Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 - The appellants contested the impugned order, alleging it was passed without considering the relevant clauses of the scheme of amalgamation - HELD THAT:- The impugned order doesn’t discuss if the scheme of amalgamation was separable as pointed out in clauses no. 1.2.2 and 23.1. The impugned order is completely silent on these clauses.
Even otherwise, section 231(1) (b) of the Companies Act duly empowers the Ld. NCLT to exercise discretion to “give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper implementation of the compromise or arrangement”. The Ld. NCLT was thus duly vested with sufficient powers under the Companies Act, to even partly sanction the scheme.
The impugned order dated 23.02.2023 is set aside - the Ld. NCLT, New Delhi Bench is directed to revisit the application of second motion in the light of the observations made by this Tribunal above and after considering the observations/clarifications of Regional Director, may dispose of the petition in accordance with law within six weeks from the date of communication of this order.
Appeal disposed off.
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2024 (3) TMI 1240
Professional mis-conduct by CA - SCN was not accompanied with documents relied upon against the Appellant and only a reference to the documents has been made in Annexure A appended with the show cause notice - non-compliance/violation of principle of natural justice by the NFRA - HELD THAT:- The fact remains that the Appellant has relied upon the reply filed by the Firm to the SCN which is pari materia the same in which he was working as engagement partner and shall knock the bottom of his case as now he cannot be allowed to take a different stand. The Appellant was required to file the reply to the show cause notice dated 15.11.2022 within a period of 30 days up to 15.12.2022. No such reply was filed within this period, rather, the Appellant sought extension of time of 45 days to submit his response vide his letter dated 14.12.2022. The NFRA considered the request made by the Appellant and on 03.01.2023 the period was extended till 29.01.2023. The Appellant during this period did not ask for any documents from the Respondent and rather relied upon the reply filed by the Firm which is apparent from the letter dated 30.01.2023, in which the Appellant has categorically stated that “the Auditor (firm) has submitted detailed reply dated 24.01.2023 to the SCN issued on the Firm.
Since the Appellant himself has relied upon the reply filed by the Firm to whom all the documents had already been served and has made a statement that the reply filed by the Firm shall be considered as his reply to the show cause notice then the nothing remains in this case to raise hue and cry for the alleged violation of principle of natural justice especially when the Appellant also did not ask for a personal hearing as well. No other point has been argued.
There are no merit in the submission made by the Appellant and hence the appeal fails and the same is hereby dismissed though without any order as to costs.
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2024 (3) TMI 1239
CIRP - Appellant seeks to modify the project completion date from 03.12.2023 to 03.12.2024, as stated in the subsequent certificate issued by the Real Estate Regulatory Authority (RERA) - correction of error in exercise of inherent jurisdiction of this Tribunal - HELD THAT:- There can be no dispute to the preposition that this Tribunal has inherent power to correct mistake or slip occurred in the order that such power is preserved in the Rule 11 of the NCLAT Rules, 2016 but the power cannot be exercised when there is no mistake or slip in the order or decree. Present is not a case where any mistake or slip occurred in the order passed by this Tribunal. The date 03.12.2023 was a date which was noticed by the Adjudicating Authority in the impugned order and which date is reflected in the order while dismissing the appeal.
This is not a fit case to exercise any inherent jurisdiction to correct any error in the judgment - Application is rejected.
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2024 (3) TMI 1238
Admission of Section 7 application under IBC - CIRP initiated against the Corporate Debtor, Personal Guarantor and the Corporate Guarantors - OTS proposal has been accepted by the Bank - HELD THAT:- The settlement agreement is taken on record and the CIRP proceedings against the Corporate Debtor, Corporate Guarantors as well as proceedings under Section 95 against the Personal Guarantors is closed. The orders impugned in these appeals dated 04.07.2023, 08.12.2023 and 06.12.2023 are set aside. CIRP is closed and Corporate Debtor, Corporate Guarantors and Personal Guarantors are freed from CIRP. Liberty is reserved to the Bank to make an application.
Learned counsel for the Bank submits that with regard to the Appeals of the Personal Guarantors amount of Rs.2 Lakhs each has been paid to the IRP - In view of the aforesaid amount having been paid, no further amount have to be paid to the IRP. Amount of Rs.5 Lakhs as required to be paid, if not already paid, shall be paid by the Appellant within two weeks.
Amount deposited by the Appellant in Company Appeal shall now be handed over to the Bank of India as per the Settlement Terms - appeal disposed off.
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2024 (3) TMI 1237
Admission of Section 7 application - It is the case of the Appellant that after restructuring the debt was not due on alleged default dates claimed by the Respondent, as such the admission of Section 7 application by the Adjudicating Authority was illegal and perverse - HELD THAT:- The Corporate Debtor requested for restructuring benefit being MSME and the Respondent sanctioned the same vide sanction letter dated 30.03.2019 as per their guidelines dated 15.01.2019 applicable to all MSME including the Corporate Debtor. We have taken into consideration the pleadings of the parties and note that for restructured Funded Interest Terms Loan (FITL) and Working Capital Term Loan (WCTL), moratorium was indeed allowed, however the said moratorium was only for principal amounts and not for interests whereas the Appellant has taken the plea that the moratorium was blanket for both principal amount as well as for the interest component and therefore, the moratorium was absolute.
As regard, the different date of default as alleged by the Appellant, both the parties during the pleadings, brought out that the Adjudicating Authority had asked the Respondent to file a supplemental affidavit which was filed on 16.04.2019 where the Respondent elaborated that the Corporate Debtor committed first default in 2018 the loan accounts of the Corporate Debtor were classified as NPA on 30.04.2018, however, on payment of over due amount the account of the Corporate Debtor were upgraded to the standard category.
The Corporate Debtor, having not deposited the interest from time to time, defaulted and outstanding balance remained continuously in excess of sanction limit, entitling the Respondent bank to classify the loan accounts of the Corporate Debtor as NPA - there are no strength in the arguments of the Appellant regarding alleged wrong date of defaults which has been consciously elaborated in the Impugned Order.
Thus, the grounds of the Appellant that there was no default whatsoever is not found to be true in view of various loans agreements, restructuring approvals letters, supplemental terms loan agreements, various statement of accounts provided by the banks w.r.t to the Corporate Debtor. There was clear default on the part of the Corporate Debtor to the Respondent Bank - there are no error in the Impugned Order which has gone into details of all the facts and came to the clear conclusion that there has been default on the part of the Corporate Debtor.
Appeal dismissed.
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2024 (3) TMI 1236
CIRP - Delay in making claim by the Homebuyers - Condonation of delay of 544 days in submitting the claim FORM -CA - seeking a direction to the Resolution Professional/ Respondent to accept the claim of the Applicant as Financial Creditor - HELD THAT:- The very fact that effected party in this case has given a concession in so many words that it has no objection if the claim of the Appellant is also entertained and the delay in filing the claim is condoned, therefore, it is not required to go into the merits of this case and decide the appeal only on the basis of concession made by the Mr. Ritesh Jain.
The present appeal succeeds and the Impugned Order is set aside. The Respondent/ Resolution Professional shall now accordingly include the claim of the Appellant and submit the updated claim to the Adjudicating Authority - Appeal allowed.
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2024 (3) TMI 1235
CIRP - Completion of Real estate project during the Proceedings - Appellant filed an application seeking permission for unsecured and secured financial creditors to vote on the Project Completion Proposal - HELD THAT:- The Corporate Debtor is allowed to complete the project under the guidance of the IRP, in terms of the affidavit filed on 24.08.2023, 04.09.2023 and 23.12.2023 and also on the principles of reverse CIRP which has been propounded by this Tribunal in the case of FLAT BUYERS ASSOCIATION WINTER HILLS – 77, GURGAON VERSUS UMANG REALTECH PVT. LTD THROUGH IRP & ORS. [2020 (2) TMI 1409 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI].
The request has been made by the appellant is hereby accepted and as a result thereof, the present appeal is hereby disposed of.
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