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2025 (3) TMI 264
Valuation of Central Excise duty - inclusion of components like “Royalty”, “Stowing Excise Duty” (SED), and “Assam Land Tax” in the assessable value - invocation of extended period of limitation - penalty - HELD THAT:- As on date, the issue as to whether “Royalty” is tax of not, stands clearly held against the appellant in view of the 9 Member Supreme Court decision in the case of MINERAL AREA DEVELOPMENT AUTHORITY & ANR. VERSUS M/S STEEL AUTHORITY OF INDIA & ANR ETC. [2024 (7) TMI 1390 - SUPREME COURT (LB)]. Therefore, on merits the appellants do not have any case. Accordingly, we hold that the Royalty component is required to be added to arrive at the Assessable Value. We dismiss the appeal on merits to this extent in respect of Royalty component.
he levy is being termed as “Duty of Excise” and also being treated as such. It is also not disputed that in the case of the goods in question, the Stowing Excise Duty is being paid by the appellant. The Revenue cannot take a contorted and narrow view that only when the Duty of Excise is paid as Central Excise Duty, such exclusion is available. It is to be noted that the word used is “duty of excise” along with “sales tax” and “other taxes”, which would clarify that if these are paid to State Govt or to any other agency also, the transaction value should exclude the same.
Assam Land Tax - HELD THAT:- The very word used therein is Tax. As we have observed above, the Section 4 (3) (d), when speaking of Tax, speaks of Central Govt and State Govt Taxes. Hence, we hold that the Assam Land Tax is not required to be included while arriving at the Assessable Value. Accordingly, we set side the confirmed demand on account of the Assam Land Tax component.
Time limitation - HELD THAT:- Admittedly the appellant is a reputed Public Sector Undertaking, having no necessity to indulge in any suppression with an intent to evade Excise Duty payment. They have been paying the Excise Duty on the AV arrived at by them as per their interpretation and filing their Returns. Hence, no case of suppression has been made out by the Revenue, so as to invoke the extended period provisions.
Levy of penalty - HELD THAT:- When the penalty under Section 11AC is waived on the ground that no case of suppression has been made out, even the duty demand would not legally sustain. There cannot be a case where it is held that there is no suppression, but only the penalty is dropped, but the Duty is confirmed. Both the Duty as well as penalty are required to be dropped if the case of suppression is not made out.
Conclusion - i) The demand on account of Royalty component sustains. ii) The demand on account of Stowing Excise Duty and Assam Land Tax components gets set aside. iii) The confirmed demand towards the extended period stands set aside and the demand stands allowed on account of time- bar to this extent.
Appeal allowed in part.
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2025 (3) TMI 263
Levy of Centrat Excise Duty - amount of performance incentive received from the buyers for the Financial Year 2010-11 - suppression of facts or not - invocation of extended period of limitation - penalty - HELD THAT:- In this case, it is found that the observation of the adjudicating authority while dropping the penalty against the appellant under Section 11AC of the Central Excise Act, 1944, has attained finality - the extended period of limitation is not invokable in the facts and circumstances of the case.
The extended period of limitation is not invokable. Consequently, whole of the demand is set aside - appeal allowed.
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2025 (3) TMI 262
Process amounting to manufacture - whether the excise duty paid by appellant by utilizing the CENVAT credit is recoverable? - HELD THAT:- While disposing the Revenue appeal regarding manufacture, it is beyond the scope of show cause notice since there is no such allegation as to the activity of the appellant not falling under manufacture in the Show cause notice.
Moreover, the issue is well settled by the decision of this Tribunal in M/S. MINERAL ENTERPRISES LIMITED VERSUS COMMISSIONER OF CUSTOMS AND SERVICE TAX [2017 (5) TMI 99 - CESTAT BANGALORE], M/S. MINERALS ENTERPRISES LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, BANGALORE [2017 (10) TMI 500 - CESTAT BANGALORE] and M/S. MINERAL ENTERPRISES LTD. VERSUS THE COMMISSIONER OF CUSTOMS, BANGALORE [2024 (8) TMI 848 - CESTAT BANGALORE] holding that the activity carried out by the Appellant is manufacture. As regards allegation of considering the excise duty paid by the appellant has deposit, there are strong force in the contention of the appellant that once the duty is not exempted absolutely, as per the provision of Section 5(1) of the Central Excise Act, it is an option available to the appellant to either opt for the benefit of Notification No. 23/2003-CE or not and it is for the assessee to decide the best method of making payment and merely if the assessee fails to avail the benefit of said notification, no allegation can be made that they have made an attempt to evade duty and to confirm demand of duty and impose penalty alleging violation of provision of law.
Conclusion - The findings on manufacture by the Appellate Authority are beyond the scope of the Show Cause Notice and were settled by previous Tribunal decisions in favor of the appellant.
Appeal allowed.
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2025 (3) TMI 261
Method of Valuation - clinkers transferred by the appellant to their sister concern - to be valued under Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 or under Rule 4 read with Rule 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000? - Revenue neutrality - HELD THAT:- This Tribunal in appellant’s own case for their own unit for the period from March 2011 to November 2013 held that Rule 4 read with Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 be adopted following the judgment of the Larger Bench of the Tribunal in the case of Ispat Industries case [2006 (9) TMI 181 - SUPREME COURT].
This Tribunal in M/S. ULTRATECH CEMENT LTD., (UNIT: RAJASHREE CEMENT WORKS) , VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS, [2024 (1) TMI 663 - CESTAT BANGALORE] observed as 'we have no hesitation to hold that the appropriate rules for determination of the assessable value of the goods for the transferred clinkers to sister units will be Rule 4 read with 11 of the Central Excise Valuation Rules, 2004 rather than Rule 8 of the Central Excise Valuation Rules, 2000 for the period in question.'
Revenue neutrality - HELD THAT:- The revenue neutrality is not a statutory concept but a principle of equity developed by courts as a mitigating factor in appreciating the intention of the persons while applying the principle of law to a particular situation to determine the reason for non-payment of duty. Revenue neutrality cannot be considered as an incentive not to follow the statutory provision governing principle of valuation solely on the ground that the other unit could avail the benefit of credit of the differential duty payable.
Conclusion - i) The goods transferred should be valued under Rule 4 read with Rule 11. ii) Revenue neutrality cannot be a reason to deviate from statutory provisions and that the correct method of valuation should be applied.
Appeal allowed by way of remand.
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2025 (3) TMI 260
Reversal of CENVAT Credit under Rule 3(5B) of the CENVAT Credit Rules, 2004, due to provisions made in the books for slow-moving inventory - invocation of extended period of limitation - HELD THAT:- The appellant had not written off the obsolete items. They only reduced the value of the slow-moving items, at the end of each financial year, if such inputs were lying in stock for a specified period. It is intended to determine the profit & loss at the end of the year. It is based on the principle of conservatism and to comply with the Accounting Standards, which was never with an intention to write off any portion of inventory in the Books of Accounts. Since it is not concerned with obsolete items, which are unusable, we hold that the provision of Rule 3(5B) of the CENVAT Credit Rules was not applicable.
The issue is no more res integra as the issue has been decided by this Tribunal in the case of M/S. STEEL AUTHORITY OF INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, DURGAPUR NOW COMMISSIONER, CGST & CX, BOLPUR COMMISSIONERATE [2024 (12) TMI 1538 - CESTAT KOLKATA], wherein it has been held that the provisions of Rule 3(5B) of the CENVAT Rules are not applicable in such cases.
Extended period of limitation - HELD THAT:- The appellant is a wholly owned Govt. of India undertaking whose complete set of records were maintained and whose accounts were audited by statutory auditors appointed by CAG as well as supplementary audit by representatives of CAG-New Delhi. The appellant did not suppress any information from the Department and in fact maintained all the statutory documents, records/registers and accounts and filed the statutory returns. Thus, it is observed that the conditions precedent for invoking longer period of limitation under proviso to Section 11A(4) of the Central Excise Act are not satisfied in the present case and hence the demand confirmed by invoking the extended period of limitation is not sustainable.
Conclusion - i) Rule 3(5B) of the CENVAT Credit Rules, 2004, does not apply to provisions for slow-moving inventory that are not written off. ii) The demand, interest, and penalty set aside as unsustainable. iii) The extended period of limitation under Section 11A(4) was not applicable due to the appellant's transparent and audited practices.
The demands confirmed in the impugned order set aside - appeal allowed.
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2025 (3) TMI 259
CENVAT credit - input services - GTA services used for transportation of goods on FOR basis - initiation of proceedings against the Input Service Distributor (ISD) instead of the appellant for the alleged incorrect availment of CENVAT Credit.
Whether the appellant is entitled to CENVAT Credit in respect of GTA services and clearing and forwarding agency services in case of FOR destination contracts or not? - HELD THAT:- The said issue has been examined by this Tribunal in the case of M/s. The Ramco Cements Ltd. v. Commissioner of C.Ex., Puducherry [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] wherein it has been observed that 'the eligibility of CENVAT credit on GTA services for outward transportation should be determined by ascertaining the place of removal based on the facts of each case, considering the Supreme Court's judgments and the Board's Circular.' - Thus, the appellant is entitled for availment of CENVAT Credit on GTA services and clearing and forwarding agency service in case the good are sold on FOR basis. Accordingly, the CENVAT Credit cannot be denied.
Whether proceedings should have been initiated against the Input Service Distributor (ISD) instead of the appellant for the alleged incorrect availment of CENVAT Credit? - HELD THAT:- The appellant has availed CENVAT Credit on the basis of invoices issued by their ISD and admittedly, no proceedings had been initiated against the ISD. In these circumstances, the CENVAT Credit availed at the end of the appellant cannot be denied, as held by this Tribunal in the case of Indsil Energy Electrochemicals Ltd. v. Commissioner of C.Ex. and S.Tax, Raipur [2016 (9) TMI 944 - CESTAT NEW DELHI] - the CENVAT Credit in respect of the said input services cannot be denied to the appellant.
Conclusion - The appellant had correctly taken CENVAT Credit and the denial of CENVAT Credit is therefore not sustainable. Accordingly, no penalty is imposable on the appellant.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 258
Extended period of limitation - undervaluation of goods - stock transfer to related units - contravention of provisions of Section 4(1)(b) of the Central Excise Act, 1944 read with Rule 8 and Rule 9 of the Valuation Rules - Revenue Neutrality - HELD THAT:- In this case, the appellant has cleared the goods to their sister unit on payment of duty under Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, by adopting 110% of the cost of the product determined as per CAS-4. If any excess duty is to be paid by the appellant, the same is entitled to take the cenvat credit by the appellant’s unit only.
In that circumstances, it is the case of revenue neutrality as held by this Tribunal in the case of M/s Hindalco Industries Limited [2023 (5) TMI 720 - CESTAT KOLKATA] wherein this Tribunal has held 'When excess paid duty is adjusted against the short payment that net result is that there is no short payment by the Appellant. The Adjudicating Authority failed to do this adjustment. Demanding duty onlu on the short payment, ignoring the excess payment is bad in law. Accordingly we hold that the demand confirmed in the impugned order is not sustainable.'
Accordingly, relying on the decision of this Tribunal in the case of Hindalco Industries, it is held that it is a revenue neutral situation. No demand is sustainable against the appellant.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 257
Challenge to order of adjustment of demand made by the department against the rebate claim which was sanctioned - suo moto adjustment of rebate amount is done - HELD THAT:- The rival submissions have been considered by this court. It finds weight in whatever learned advocate has stated that as on date with the setting aside of the order by the Revisionary Authority, there is no demand which is existing.
Appeal allowed.
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2025 (3) TMI 256
Dishonour of Cheque - Security Cheque against renting / leasing of property - whether the appellant-accused is liable under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) for the dishonour of four post-dated cheques issued to the respondent-complainant, and whether the amount of compensation awarded by the lower courts was justified? - HELD THAT:- It is evident from the record that the appellant-accused was prosecuted for the dishonour of four post-dated cheques totalling to an amount of Rs.9,00,000/- which were issued by him in favour of the respondent-complainant and on presentation, had been dishonoured with an endorsement ‘funds insufficient’. In regard to the dishonour of these four post-dated cheques, the respondentcomplainant instituted four separate complaints. The trial Court convicted the appellant-accused under Section 138 of the NI Act concluding that the specific plea taken by the appellant-accused that he had repaid a sum of Rs.5,00,000/- to the respondentcomplainant was not controverted by the respondent-complainant by way of any rejoinder or counter to the reply notice submitted by the appellant-accused - the trial Court while convicting the appellantaccused for the offence punishable under Section 138 of the NI Act confined the sentence of fine, to Rs.3,00,000/- with simple interest @ 6% per annum from the date of the cheques till realisation, to be paid by the appellant-accused to the respondent-complainant. From the said amount of Rs.3,00,000/-, a sum of Rs.5,000/- was directed to be forfeited to the State Exchequer towards defraying expenses. In default, the appellant-accused was directed to undergo simple imprisonment for a period of one year.
Despite the decree, the respondent-complainant failed to vacate the subject flat on which the appellant-accused, being the decree-holder, was compelled to institute execution proceedings. The Small Causes Court, Bengaluru after perusing the bailiff report which stated that the respondent-complainant(judgment debtor) had locked the subject flat, vide order dated 2nd January, 2020, directed police assistance to break open the locks in order to ensure that the decree is satisfied and possession of the subject flat is handed over to the appellant-accused(decree holder). In compliance of the aforesaid order, the locks were broken and possession of the subject flat was handed over to the appellant accused( decree holder) on 8th January, 2020.
The appellant-accused was definitely not liable to refund the entire security deposit amount of Rs.9,00,000/- covered by the post-dated cheques, to the respondent-complainant because he was entitled to deduct the amount of due rent and maintenance from the said amount. Hence, the respondent-complainant failed to lead evidence to conclusively establish that the entire amount under the post-dated cheques was a legally enforceable debt against the appellantaccused.
Conclusion - The appellant-accused was definitely not liable to refund the entire security deposit amount of Rs.9,00,000/- covered by the post-dated cheques, to the respondent-complainant because he was entitled to deduct the amount of due rent and maintenance from the said amount.
The impugned judgments, dated 6th March, 2018 passed by the appellate Court and dated 8th July, 2024 passed by the High Court are hereby, quashed and set aside. The judgment dated 9th November, 2016 rendered by the trial Court is restored - Appeal allowed in part.
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2025 (3) TMI 255
Dishonour of Cheque - seeking quashing of criminal proceedings initiated against the Appellant(s) under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 - vicarious liability of non-executive directors - HELD THAT:- This Court has consistently held that non-executive and independent director(s) cannot be held liable under Section 138 read with Section 141 of the NI Act unless specific allegations demonstrate their direct involvement in affairs of the company at the relevant time.
In Pooja Ravinder Devidasani v. State of Maharashtra & Anr., [2014 (12) TMI 1070 - SUPREME COURT], this Court while taking into consideration that a non-executive director plays a governance role, they are not involved in the daily operations or financial management of the company, held that to attract liability under Section 141 of the NI Act, the accused must have been actively in charge of the company’s business at the relevant time. Mere directorship does not create automatic liability under the Act. The law has consistently held that only those who are responsible for the dayto- day conduct of business can be held accountable.
There is no material on record to suggest that they were responsible for the issuance of the cheques in question. Their involvement in the company’s affairs was purely non-executive, confined to governance oversight, and did not extend to financial decisionmaking or operational management - The complaint lacks specific averments that establish a direct nexus between the Appellant(s) and the financial transactions in question or demonstrate their involvement in the company’s financial affairs.
Conclusion - Non-executive directors cannot be held liable under Section 138 read with Section 141 of the NI Act without specific allegations of their direct involvement in the company's affairs.
Appeal allowed.
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2025 (3) TMI 254
Dishonour of Cheque - appellant (director of company) is a signatory to the cheque or not - HELD THAT:- As the appellant is not a signatory to the cheque, he is not liable under Section 138 of the 1881 Act. As it is only the signatory to the cheque is liable under Section 138, unless the case is brought within the four corners of Section 141 of the 1881 Act, no other person can be held liable.
There are twin requirements under sub-Section (1) of Section 141 of the 1881 Act. In the complaint, it must be alleged that the person, who is sought to be held liable by virtue of vicarious liability, at the time when the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company. A Director who is in charge of the company and a Director who was responsible to the company for the conduct of the business, are two different aspects. The requirement of law is that both the ingredients of sub-Section (1) of Section 141 of the 1881 Act must be incorporated in the complaint. Admittedly, there is no assertion in the complaints that the appellant, at the time of commission of the offence, was in charge of the business of the company. Therefore, on a plain reading of the complaints, the appellant cannot be prosecuted with the aid of sub-Section (1) of Section 141 of the 1881 Act.
Conclusion - The appellant, who was not a signatory to the cheque and did not meet the requirements under Section 141(1) of the 1881 Act, could not be held liable under Section 138.
Appeal allowed.
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2025 (3) TMI 253
Liability of defendant to pay the plaintiff with interest as prayed in the plaint - suit promissory note was supported by consideration or not - discharge of a lawfully owed debt payable under the suit promissory note or not - discharge of legal presumption or not - HELD THAT:- It is needless to state that as per Section 118(a) of the Negotiable Instruments Act, 1881 until the contrary is proved, it shall be presumed that every negotiable instrument was made or drawn for consideration. This presumption can be rebutted by the opposing party by way of evidence that the instrument was not issued for consideration effectively disproving the initial presumption. In other words, it is obligatory on the part of the court to raise the initial presumption in every case where the factual basis for the raising of the presumption has been established. Such a presumption is rebuttable. The defendant can prove the non-existence of a consideration by raising a probable defence.
In Kundan Lal Rallara v. The Custodian, Evacuee Property Bombay [1961 (3) TMI 100 - SUPREME COURT], the Hon'ble Supreme Court has held that the presumption of law under Section 118 of the Negotiable Instruments Act could be rebutted, in certain circumstances, by a presumption of fact raised under Section 114 of the Evidence Act.
Whether the execution of Ex.A.1-Promissory Note and Ex.A.2-Cheque have been proved to attract the legal presumption? - Whether the defendant has brought out circumstances to discharge such legal presumption? - HELD THAT:- Though it was stated by the plaintiff that Ex.A.1 Promissory Note was executed by the defendant on 09.09.2014 and Ex.A.2 Cheque dated 15.10.2016 was issued by the defendant in discharge of the legally owned debt under the promissory note, during cross examination, it was clearly admitted by the plaintiff that he was an Electrical Contractor for the defendant mill. P.W.2-P.K.Rajendran in his crossexamination stated that he was present at the time of borrowal of the suit loan by the defendant, but in the chief examination he never spoke about the execution of promissory note nor stated that Ex.A.1 was signed by the defendant in his presence. P.W.2’s evidence had proceeded as if he had signed as a witness on the promissory note.
The burden shifts to the plaintiff to establish the fact that consideration was passed on to the defendant under Ex.A.1 promissory note. The plaintiff has placed much reliance on Ex.A.10-Statement of Account from Axis Bank for the period between 01.08.2024 and 31.08.2024 and Ex.A.11- Statement of Account from Canara Bank for the period between 01.09.2014 to 26.09.2015 relating to Roja Textiles. According to him, from 01.08.2014 to 30.08.2014, he has sufficient funds in the account.
To show whether the plaintiff was running Roja Textiles or not, no material whatsoever was produced by the plaintiff. Even if it is assumed that the plaintiff was running that company, merely showing the income in the account of Roja Textiles would not by itself prove that the plaintiff had sufficient means at the relevant point in time, i.e., on the date of the Ex.A.1 promissory note dated 09.09.2014. Ex.A.10 and Ex.A.11 do not show any entry to prove that the amount had been withdrawn from his bank account to pay the consideration under the promissory note. Therefore, merely showing that some amount is lying in the bank account, by producing a bank statement, it cannot be said that the burden of establishing passing of consideration has been discharged. When the plaintiff was working as an electrical contractor in the defendant's mill and he was aware of the fact that the defendant's mill had been closed and was sold in the year 2013, still by reciting in the promissory note as if the mill was run by the defendant even in the year 2014 and getting a cheque in 2016 drawn by the company that was closed in the year 2013 is highly improbable. It goes against the normal prudence of an ordinary man.
It is further to be noted that though the promissory note was said to be executed on 09.09.2014, a suit was not filed immediately for recovery of money due on the promissory. On the contrary, pursuant to the so-called cheque (Ex.A.2), which was returned dishonored for the reason “account closed,” a notice was caused to the defendant, and thereafter, a private complaint under Section 200 of Cr.P.C. was filed against the defendant alleging an offence under Section 138 of the Negotiable Instruments Act, 1881, before the jurisdictional magistrate - The trial court has completely lost sight of all these aspects of the matter and erred in decreeing the suit of the plaintiff by granting the relief of recovery of money against the defendant.
Conclusion - The plaintiff failed to establish the passing of consideration and the execution of the promissory note and cheque. The defendant successfully rebutted the presumption of consideration and execution under the Negotiable Instruments Act.
The appeal suit is allowed.
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2025 (3) TMI 252
Revision u/s 263 - assessee was surveyed and he surrendered a sum comprising of undisclosed debtors, excess cash found and unaccounted construction - HELD THAT:- PCIT has to be satisfied the twin conditions, namely the order of the AO sought to be revised is erroneous; and it is prejudicial to the interests of the Revenue. If any one of them is absent i.e. if the assessment order is not erroneous but it is prejudicial to the Revenue, Sec.263 cannot be invoked.
While filling the return of income assessee has admitted the additional income disclosed in the survey proceedings. While conducting the assessment proceeding the AO initiated a specific enquiry to the assessee and a show cause notice was issued proposing the variation in the assessment asking the assessee-appellant as to why the provision of section 115BBE should not be applied vide notice dated 24.09.2021.
There is not the case of the revenue that the assessing officer has not raised the issue and has not conducted any enquiry, but while doing so he has applied his mind and taken a plausible view on the matter. That view so taken being not erroneous and prejudicial ld. PCIT merely cannot impose her view that the ld. AO should have considered that income so offered u/s 69 as Unexplained Investment for Rs. 66,50,000 (45,50,000+21,00,000) and Rs. 9,50,000/- (Unexplained Money) u/s 69A of the Act.
It is noted that even the amendment [i.e.Expl. 2(a)] does not confer blind powers and it is held that despite there being an amendment, enlarging the scope of the revisionary power of the ld. PCIT u/s 263 to some extent, it cannot justify the invoking of the Expl. 2(a) in the facts of the present case.
Thus, it is not at all a case where the subjected assessment should be alleged to be erroneous in so far as prejudicial to the interests of the revenue. There is neither error of law nor of facts. There is no erroneous assumption by the AO of either the facts or of law, as alleged by the ld. PCIT. Decided in favour of assessee.
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2025 (3) TMI 251
Unexplained money u/s 69A - additions made on account of the cash found from the possession of employee - HELD THAT:-Considering the facts and circumstances of the case and also the retraction made by the assessee from his earlier statement recorded u/s 131 the version of the assessee was not found acceptable and therefore, it is considered that the amount found from the possession of Shri Shyam Singh Rathore and belongs to Shri Turab Ali Bohra was considered as unexplained money of Shri Turab Ali Bohra for which he has not been able to satisfactorily prove the sources thereof. Accordingly, an addition was made to the total income of the assessee on substantive basis by considering the same as his unexplained money u/s 69A r.w.s. 115BBE of the I.T. Act, 1961 and brought to tax accordingly.
Assessee though retracted from the statement, and he has filed the details relating to the claim and substantiated his case to support the cash found in possession of the employee of the assessee - DR objected that since these records are not discussed or verified the relief cannot be granted to the assessee without being confronted to the assessee on the material placed on the record - In light of this set of facts before us, we deem it fit to restore the matter to verify the contention that has been made by the assessee with that of the statement recorded at the time of survey.
AO will verify the contentions of the cash sales made by the assessee and consequential collection of cash from that collection centre is requires in depth verification. Therefore, we deem it fit in the interest of justice to restore the matter to the file of ld. AO who will verify the contentions raised at the time of assessment which though contrary to the statement recorded at the time of survey. Ground allowed for statistical purposes.
Addition being the amount of excess stock found at the premises of the assessee, during survey proceedings - During hearing of the present appeal when the details of difference of stock and the inventory prepared at the time of survey was requested to be placed on record. But both the parties did not consider it fit to place on record that as to how the difference is arrived whether it is on account of quantity difference or on account of valuation difference. Considering that peculiar facts being not available before us we deem it fit to restore the matter before ld. AO who will justify the addition after discussing the reasons of difference and after affording due to opportunity to the assessee to explain the difference. Based on these observations, ground No. 3 raised by the assessee is allowed for statistical purposes.
Charging a special rate of tax on account of provisions of section 115BBE - Since we restore the matter of dispute to the file of ld. Assessing Officer on merits, so obviously the levy of tax being consequential in nature will depend upon the finding of the ld. AO.
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2025 (3) TMI 250
Vires of extension of time limits specified under the CGST Act - Chellenge to N/N. 9/2023-Central Tax dated 31st March, 2023, N/N. 56/2023 – Central Tax dated 28th December, 2023, N/N. 9/2023-State Tax dated 24th May, 2023 and N/N. 56/2023 dated 16th January, 2024 - HELD THAT:- In a similar matter, in the case of Aspect Integrated IT Pvt. Ltd Vs. Union of India [2024 (7) TMI 1601 - BOMBAY HIGH COURT], the Nagpur Bench of this Court has directed the Respondents in the said matter not to take any coercive action against the Petitioner. Here also, since the issue is whether the Notifications are valid and whether the impugned order could have been passed (especially, if Notifications dated 28th December, 2023 and 16th January, 2024 are set aside), a strong prima facie case is made out for granting interim relief to the Petitioner.
Liberty granted to the parties to apply in the event the matter before the Hon’ble Supreme Court is disposed of one way or the other.
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2025 (3) TMI 249
Seizure of goods on the ground of under valuation - sufficient evidence to prove the actual movement of goods from West Bengal/Assam to Delhi via Kanpur or not - burden to prove - power to seize goods - HELD THAT:- Under the taxing statute, in the original proceeding or in the summary proceeding, the primary burden is to be discharged by the assessee by bringing on record the cogent material. The burden of proof is shifting to the department only in the re-assessment proceeding or subsequent proceeding not being the original proceeding. In other words, the assessee in the original proceeding is duty bound to bring the material on record in support of its claim but in the subsequent proceeding i.e. re-assessment proceedings, the burden shifts on the revenue - Under the taxing statute, in the original proceeding or in the summary proceeding, the primary burden is to be discharged by the assessee by bringing on record the cogent material. The burden of proof is shifting to the department only in the re-assessment proceeding or subsequent proceeding not being the original proceeding. In other words, the assessee in the original proceeding is duty bound to bring the material on record in support of its claim but in the subsequent proceeding i.e. re-assessment proceedings, the burden shifts on the revenue.
The Hon’ble Apex Court in the case of State of Karnataka Vs. M/s Ecom Gill Coffee Trading Pvt. Ltd. [2023 (3) TMI 533 - SUPREME COURT] has held that burden was upon the dealer to prove beyond doubt its claim. Further, the Apex Court has emphasised in the said judgement that if the dealer is claiming any exemption, then burden to prove the genuineness of the transaction is upon the person claiming the benefit. On that background, the Hon’ble Apex Court has held that dealer has to prove the actual physical movement of the goods.
Following the said judgement, this Court in the case of M/s Shiv Trading Vs. State of UP and Others [2023 (11) TMI 1157 - ALLAHABAD HIGH COURT] has held that onus to prove and establish beyond doubt the actual transaction, physical movement of the goods as well as genuineness of transaction is required.
In the case in hand, the petitioner was duty bound to establish beyond doubt the actual physical movement of the goods from West Bengal / Assam to Delhi via Kanpur but the petitioner has failed to do so, therefore, accompanying tax invoices and other documents cannot said to be genuine. In other words, it is a clear case of contravention of Act as well as the Rules - The petitioner has failed to bring on record any material to show actual movement of the goods from West Bengal / Assam. The details of truck number or toll receipt crossed during its journey from West Bengal / Assam to Kanpur have not been filed at any stage.
The petitioner even failed to bring on record any cogent material to show actual movement of the goods. Once the actual journey as claimed by the petitioner was not proved, the proceedings cannot be said to be illegal or arbitrary - Section 129 of the GST Act refers that any person transports any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, the said goods shall be liable to be detained or seized.
A Division Bench of this Court in the case of M/s Shiv Shakti Trading Company Vs. State of UP and Others [2011 (5) TMI 874 - ALLAHABAD HIGH COURT], has an occasion to upheld the seizure of the goods being made on the ground of under valuation. The Division Bench has held that it is incumbent on a person, who is transporting goods, to declare the true value of the goods and failure to declare the same, would result non proper document in the context of the valuation, therefore, the power of seizure of goods has correctly been exercised against the petitioner.
Conclusion - i) Under-valuation with intent to evade tax justifies seizure under the GST Act. ii) The seizures were lawful and the petitioner failed to provide necessary evidence to challenge the findings of the respondent authorities.
Thus, no interference is called for by this Court in the impugned order - petition dismissed.
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2025 (3) TMI 248
Refund of IGST - zero rated supply - HELD THAT:- The issue raised in the writ petition is no longer res integra. The Hon'ble Division Bench of Gujarat High Court in the decision reported in M/s.Amit Cotton Industries Through Partner, Veljibhai Virjibhai Ranipa Vs Principal Commissioner of Customs [2019 (7) TMI 472 - GUJARAT HIGH COURT] had categorically held that the aforesaid circular cannot prevail over Rule 96. The Hon'ble Division Bench observed that the circular will not save the situation for the Department.
The impugned order dated 24.11.2020 is set aside and the respondent is directed to refund a sum of Rs. 25,84,277/- together with applicable interest to the petitioner within a period of eight weeks from the date of receipt of a copy of this order - Petition allowed.
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2025 (3) TMI 247
Challenge to assessment order - reversal of ITC claim - HELD THAT:- The issue involved in the present Writ Petition, has been squarely covered by the common order of this Court, in SRI GANAPATHI PANDI INDUSTRIES, REP. BY ITS PROPRIETOR VERSUS THE ASSISTANT COMMISSIONER (STATE TAX) (FAC) TONDIARPET ASSESSMENT CIRCLE, CHENNAI [2024 (10) TMI 1631 - MADRAS HIGH COURT], wherein, this Court has categorically held that 'The orders impugned in all Writ Petitions are quashed insofar as it relates to the claim made by the petitioners for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act'.
The order impugned in all Writ Petition is quashed insofar as it relates to the claim made by the petitioner for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act - petition allowed.
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2025 (3) TMI 246
Reversal of ITC claim - imposition of tax, penalty and interest - HELD THAT:- The issue involved in the present Writ Petition, has been squarely covered by the common order of this Court, in SRI GANAPATHI PANDI INDUSTRIES, REP. BY ITS PROPRIETOR VERSUS THE ASSISTANT COMMISSIONER (STATE TAX) (FAC) TONDIARPET ASSESSMENT CIRCLE, CHENNAI [2024 (10) TMI 1631 - MADRAS HIGH COURT], wherein, this Court has categorically held that 'The orders impugned in all Writ Petitions are quashed insofar as it relates to the claim made by the petitioners for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act'.
The order impugned in all Writ Petition is quashed insofar as it relates to the claim made by the petitioner for ITC which is barred by limitation in terms of Section 16 (4) of the CGST Act, 2017 but, within the period prescribed in terms of Section 16 (5) of the said Act - petition allowed.
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2025 (3) TMI 245
Cancellation of petitioner’s registration on the ground of non-filing of return - petitioner has paid all the revenue due and further agrees to pay any outstanding revenue for restoring its registration - HELD THAT:- This petition is disposed of by setting aside the impugned order of both the concerned authorities and by directing the respondent CGST/WBGST authority to restore the petitioner’s registration and open the portal for a period of 45 days from date of communication of this order by the counsel of the respondent authority to enable the petitioner to make the payment of revenue due as well as any other due including penalty to be indicated by the respondent authority concerned within a period of 15 working days.
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