TMI Tax Updates - e-Newsletter
January 10, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise Indian Laws

Articles

1. ROLES AND RESPONSIBILITIES OF TRUSTEES UNDER MUTUAL FUND REGULATIONS

   By: DR.MARIAPPAN GOVINDARAJAN

2. Game-Changer for AEO-T2 and T3 Clients: CBIC Rolls Out Automated Out of Charge!

   By: DrJoshua Ebenezer

3. State Wise Guidelines for FSSAI Certificate Download in India

   By: Ishita Ramani

4. SCN and Order uploaded under Heading “View Additional Notices and Orders” not proper service

   By: Bimal jain

News

1. Rationalise GST slabs, provide relief to middle class, lower income groups: Cong leader Pilot

2. Implementation of mandatory mentioning of HSN codes in GSTR-1 & GSTR 1A

3. India’s GST world’s ‘worst’ tax regime, middle class contributing to govt's revenue collection: Cong

4. Days ahead of Union Budget, revenue secretary Arunish Chawla shifted to DIPAM

5. Chouhan discusses agri proposals with FM ahead of Budget

6. Register PMLA case against Walmik Karad, demands Sule

7. Finance Secretary Shri Tuhin Kanta Pandey takes charge as Secretary, Department of Revenue, Ministry of Finance, today

8. Japan's Ishiba heads to Malaysia, Indonesia to strengthen defence, economic ties

9. Delhi elections: I-T dept sets up control room to keep vigil on movement of unaccounted wealth

10. Govt revises gold import data from April; cuts Nov figures by USD 5 bn to USD 9.84 bn

11. Jharkhand govt to act against firm for 'economic offence': Minister

Notifications

GST - States

1. G.O.Ms.No.273 - dated 22-11-2024 - Andhra Pradesh SGST

Amendment in Notification No. G.O.Ms.No.226, Revenue(CT-II) Department, dated 22nd June, 2017

2. G.O.Ms.No.272 - dated 22-11-2024 - Andhra Pradesh SGST

Provide waiver of late fee for late filing of NIL FORM GSTR-7

3. 07/2024-State Tax (Rate) - dated 8-1-2025 - Delhi SGST

Amendment in Notification No. 11/2017- State Tax (Rate), dated 30th June, 2017

Highlights / Catch Notes

GST

• Petitioner's GST registration cancellation set aside if outstanding dues paid in a week.

  Case-Laws - HC : Petitioner's GST registration cancellation set aside by HC on condition of depositing outstanding tax dues including interest and penalty within one week and applying for reversal of cancellation. Competent authority directed to consider application and pass appropriate order within one week from production of certified HC order copy along with application.
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• Sikka Ports denied ITC on vessel repairs and hiring under CGST Act.

  Case-Laws - AAAR : The AAAR held that the respondent, M/s. Sikka Ports and Terminals Ltd., is not eligible for availing input tax credit (ITC) on input services for repairs and maintenance of Diving Support Vessels (DSVs) and Security Patrol Vessels (SPVs) as these vessels are not used for transportation of goods. Additionally, the respondent cannot claim ITC on hiring of SPVs u/s 17(5)(b) of the CGST Act, 2017, as the hiring service was not used for making an outward taxable supply of the same category of service or as an element of a taxable composite or mixed supply.
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• Employees' free bus transport not subject to GST; ITC allowed for >13-seater buses.

  Case-Laws - AAAR : The AAAR held that the respondent is not liable to pay GST on free bus transportation facility provided to its employees as per employment contract. ITC is admissible for transportation services with a seating capacity of more than 13 persons. Recoveries made by the applicant from employees for providing canteen facility are exempt under Sl. No. 15 of N/N. 12/2017 - Central Tax (Rate) dated 28.06.2017.
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Income Tax

• Transfer of tax case u/s 127(2) from Mumbai to Delhi upheld for coordinated probe.

  Case-Laws - HC : The HC dismissed the petition challenging the order transferring the petitioner's case from the jurisdictional officer in Mumbai to the counterpart in New Delhi u/s 127(2). The HC held the impugned order reasoned that centralised and coordinated investigation was required to protect revenue interests, considering the petitioner's alleged bogus transactions with entities of the 'Pacific Group'. The HC found the reasons relevant and rejected the grounds of lack of reasons and absence of agreement between the two Commissioners. The HC concluded no infirmity warranted interference under extraordinary jurisdiction.
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• JDA: Land possession transfer without ownership change not 'transfer' u/s 2(47) for capital gains: HC.

  Case-Laws - HC : The HC held that handing over possession of land to a developer for construction purposes under a development agreement, without actual transfer of ownership or payment of consideration, does not constitute a 'transfer' u/s 2(47) of the Income Tax Act to attract capital gains tax. The performance guarantee amount is refundable and not consideration. The HC distinguished the cases of Potla Nageswara Rao and Arvind S Phake, where transfer was complete with possession handover and consideration payment. The Tribunal's finding that the assessee handed over full possession for 60% constructed area and was liable for capital gains during the relevant year was held perverse.
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• Tax authorities to reassess salary expenses afresh without relying on earlier audit report.

  Case-Laws - HC : Impugned assessment order set aside by HC. Matter remitted back to pass fresh order independently without relying on special audit report u/s 142(2A) for earlier years. Disallowance of entire salary expenses found unsustainable. Authorities to decide afresh in accordance with law.
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• Domestic company paying dividend tax not entitled to DTAA benefits.

  Case-Laws - AT : The ITAT held that where a domestic company declares, distributes, or pays dividends to non-resident shareholders, attracting Additional Income-tax (Tax on Distributed Profits) u/s 115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in Section 115-O and not at the rate applicable to the non-resident shareholders as per the relevant DTAA. The ITAT was conscious of the sovereign's prerogative to extend treaty protection to domestic companies paying dividend distribution tax through DTAAs. However, the domestic company can claim the benefit of the DTAA only if the Contracting States intend to extend such treaty protection. The decision was against the assessee.
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• Furnishing of documents and information u/s 92D(3): ITAT Rejects Penalty u/s 271G Following Bombay HC Precedent.

  Case-Laws - AT : The ITAT rejected the Revenue's appeal and held that the penalty u/s 271G was not exigible. The ITAT relied on the Bombay High Court's decision in Undercarriage and Tractor Parts (P.) Ltd. Vs. Dispute Resolution Panel, wherein the High Court had quashed the assessment order passed u/s 143(3) read with section 144C(13). The ITAT observed that the CIT(A) had failed to consider this High Court decision while allowing the assessee's penalty appeal. Since the Revenue did not bring any contrary decision of a Higher Forum, the ITAT held that the impugned penalty was not leviable and dismissed the Revenue's appeal.
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• Assessee's custodial role exempts income from tax, CIT(E)'s revisional order quashed.

  Case-Laws - AT : The assessee's role was purely custodial, acting as an agent with ownership of collected funds remaining with State Government. Hence, income could not be taxed in assessee's hands, obviating need for detailed analysis u/s 11. Revenue's contention of commercial nature of activities was rejected based on Supreme Court ruling in Ahmedabad Urban Development Authority. CIT(E)'s direction u/s 263 to verify Section 11 exemption was held unjustified as nature of receipts was already examined by ITAT and no new income sources were identified. Relying on precedents, it was held Section 263 cannot be invoked merely on change of opinion. Accordingly, CIT(E)'s revisional order u/s 263 was quashed and assessee's appeal was allowed.
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• Mandatory valuation methods for shares u/s 56(2)(viib) to be followed.

  Case-Laws - AT : The ITAT held that for determining the fair market value of shares u/s 56(2)(viib) of the Income Tax Act, it is mandatory to follow the methods prescribed u/rs 11U and 11UA. The valuation report submitted by the assessee, which used methods like future earning analysis and adjusted net asset method not allowed under the Rules, was rightly rejected by the AO. The ITAT directed the AO to delete the addition made by treating the share premium and share capital as income u/s 56(2)(viib), as the assessee had discharged its onus by submitting a valuation report as per the prescribed Rules. The decision was in favor of the assessee.
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• Domain name registrar's income not taxable as royalty under DTAA.

  Case-Laws - AT : The ITAT held that the appellant, being a domain name registrar, does not own the domain names it helps register and cannot confer the right to use or transfer such domain names. Therefore, the income earned from domain name registration services is not taxable as royalty u/s 9(1)(vi) of the Act and Article 12(3)(a) of the India-USA DTAA. The ITAT affirmed the Delhi HC's decision in the appellant's own case for earlier years. Regarding treaty benefits, the ITAT held that the appellant, being an LLP, is eligible for benefits under the DTAA, relying on precedents. The income from non-domain services like web hosting and web designing does not involve transfer of technical knowledge or know-how and hence cannot be taxed as fees for included services under Article 12(4)(b) of the DTAA.
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• Willful income misreporting attracts penalty u/s 270A, intention irrelevant.

  Case-Laws - AT : Penalty u/s 270A levied for assessee's willful misreporting of income by claiming both capital expenses and depreciation as application of income. ITAT held mens rea not essential for imposing penalties under civil acts like Income Tax Act. Contravention sufficient to attract penalty irrespective of intention behind it as per precedent in Dharmendra Textile Processors. Assessee's failure to rectify mistake by revising return voluntarily also noted. Order of CIT(A)/NFAC set aside, AO's order levying penalty u/s 270A sustained by allowing Revenue's appeal.
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• Taxpayer permitted to opt for concessional tax rate in subsequent year despite late Form 10IE filing in previous year.

  Case-Laws - AT : Assessee allowed to opt for concessional tax rate u/s 115BAC(5)(i) for AY 2023-24 based on Form 10IE submitted late for previous AY, subject to fulfilling other legal requirements. ITAT held that once Form 10IE rejected for late submission in earlier AY, law does not debar assessee from submitting fresh form before due date of subsequent AY's ITR to avail new tax regime benefits. No revenue loss caused by permitting option exercise for next AY based on earlier rejected form.
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• Unsustainable Rs. 14 crore addition based only on assessee's statement; ITAT allows appeal citing lack of corroborative evidence.

  Case-Laws - AT : Addition of Rs. 14 crores based solely on assessee's statement recorded during survey u/s 133A without corroborative evidence regarding land transactions, parties involved, computation method is unsustainable. ITAT allowed assessee's appeal, holding that additions cannot be made only on the basis of statement unless supported by incriminating evidence.
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• Reopening notices upheld, objections allowed in reassessment proceedings.

  Case-Laws - HC : The HC rejected the petitioner's submissions and held: The issue of alleged cash receipt was not examined during regular assessment proceedings as the information was received after conclusion of assessment. The reopening is based on information under CBDT's Risk Management Strategy, not on the erroneous statement that no return was filed. The approval u/s 151 is not without application of mind as remarks show consideration of material and information. No reason to quash the reopening notices, but petitioner can raise objections in reassessment/appellate proceedings.
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• Bombay HC directs tax authorities to verify TDS, refund amount within 4 months.

  Case-Laws - HC : Petitioner filed representation seeking refund based on TDS certificate. HC directed Respondents to dispose of representation within 3 months by verifying deductions status with Percept Pictures Company Pvt Ltd after hearing Petitioner. If deductions confirmed as per TDS certificate, refund amount to Petitioner within 1 month of determination.
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• Coupon rate on CCDs treated as debt, depreciation allowed on goodwill from slump sale Pricing.

  Case-Laws - AT : The ITAT held that the coupon rate of 11% paid by the assessee company on Compulsorily Convertible Debentures (CCDs) was within the arm's length range based on benchmarking analysis. Hence, the addition made by TPO/DRP treating CCDs as equity was incorrect since CCDs remain debt until converted. Regarding depreciation on goodwill from slump sale, the ITAT allowed depreciation u/s 32, following jurisdictional High Court precedents that goodwill constitutes an intangible asset eligible for depreciation.
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Customs

• Streamlined DPD facility application process for new importers via verified contacts.

  Circulars : The JNCH Public Notice streamlines the process for first-time importers to obtain DPD facility. Email addresses and phone numbers of importer applicants will be verified from Advait to ensure OTP receipt on registered contacts. The DPD cell will send IEC lists to LRM for confirming authorized contacts. Importers can request changes to email/phone number through authorized email. Previous notices on DPD are modified accordingly.
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• Export containers to undergo mandatory weighment at CPP for certain exports.

  Circulars : The Public Notice mandates weighment of self-sealed export containers at the Centralized Parking Plaza (CPP) for non-AEO exporters in certain categories before registration with Customs: (i) drawback claim over Rs. 1 lakh or IGST refund over Rs. 5 lakh, (ii) exports under special schemes, (iii) goods subject to export duty, and (iv) 10% random selection. Containers must have the CPP custodian's weighment slip for Shipping Bill registration. The Notice aims to streamline export procedures and comes into force on 01.09.2024.
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• Importers' containers released, legal issues left open by HC.

  Case-Laws - HC : Petitioners granted release of containers containing imported consignments held by Respondents for various reasons. HC left legal issues open given unique facts and pending cases for several years. Handling charges to CONCOR left undecided. Petition disposed of.
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• CESTAT: Investigation Report not appealable, can be challenged in adjudication.

  Case-Laws - AT : The CESTAT held that the Investigation Report (IR) issued by the department is not an appealable order. The appellant failed to demonstrate that the IR is a quasi-judicial decision or order under the statute, depriving them of any legal right. The IR is a product of a consultative process, and the appellant had ample opportunity to present their views. The appellant can assail the IR during the adjudication proceedings and appeal against the final order as per the statutory provisions. The right to appeal is statutory, not constitutional. The impugned order holding the IR as non-appealable is legal and proper.
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• Appellant liable for interest on delayed SAD, penalties set aside.

  Case-Laws - AT : CESTAT held that appellant-importer is liable to pay interest for delayed payment of SAD u/s 28AB of Customs Act, 1962. However, penalties imposed on appellant-importer u/ss 114A and 114AA, and on CHA u/s 112(a)(ii) were set aside as conditions for invoking these provisions were not met. Confiscation of imported goods was denied as goods were cleared after due permission. Proceedings against company officials were rightly dropped by adjudicating authority. Interest already paid by appellant-importer to be appropriated against interest liability. Appeals disposed of accordingly.
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Corporate Law

• Govt appoints 22 judicial, 13 technical members to NCLT for 5 years.

  Notifications : The Central Government appointed 22 Judicial Members and 13 Technical Members in the National Company Law Tribunal (NCLT) for a period of five years or till attaining 65 years of age, whichever is earlier. The appointments are effective from the date each member assumes charge of their respective office as per the pay scale and terms specified.
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• Look Out Circular lacks proportionality, can't curtail right to travel indefinitely.

  Case-Laws - HC : Petitioner's right to travel abroad, integral to personal liberty under Article 21, cannot be curtailed indefinitely without credible material. While allegations of financial impropriety warrant investigation, absence of evidence of intent to abscond or obstruct investigation necessitates permitting conditional travel abroad. LOC imposed lacks proportionality given SFIO's ability to independently obtain evidence, Petitioner's disclosed foreign assets, and lack of allegations of tampering or intimidation. HC allows conditional travel, subject to applicable conditions and forfeiture of security upon violation, disposing petition.
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IBC

• Corporate Debtor's Contempt Application Against CIRP Initiation for Samhita Project Dismissed.

  Case-Laws - AT : NCLAT dismissed the contempt application against adjudicating authority. It held no contempt was committed in admitting section 7 application against corporate debtor's project Samhita by order dated 24.08.2023. Adjudicating authority exercised statutory jurisdiction under IBC while admitting section 7 application filed by financial creditors. Initiation of CIRP against Samhita project did not violate or disobey previous NCLAT order dated 13.01.2021. Contempt application lacked merit.
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Indian Laws

• Partners liable for firm's dishonoured cheques under Negotiable Instruments Act.

  Case-Laws - HC : The HC upheld the order of the Revisional Court, declining to quash the complaint u/ss 138/141 of the NI Act against the petitioners, who were partners of the accused-firm. While the petitioners could not be held liable for cheques issued by a partner in personal capacity, they were rightly made accused for cheques issued by the partner on behalf of the firm. The HC found no reason to exercise inherent powers u/s 482 of the Code to quash the proceedings.
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• Arbitral Tribunals can recall orders, condone delays upon showing "sufficient cause.

  Case-Laws - HC : HC held that Arbitral Tribunals have discretion to recall orders and condone delays upon showing "sufficient cause." Judicial interference in arbitral proceedings should be minimal, and the HC found no reason to interfere with the Tribunal's order condoning delay in filing Statement of Defence, as exercise of such discretion did not demonstrate perversity or bad faith. Petition dismissed.
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PMLA

• Petitioners' acts not money laundering; bank fraud or forgery at most.

  Case-Laws - HC : The HC held that exercising its inherent powers u/s 482 CrPC to prevent abuse of process and secure ends of justice, none of the ingredients for money laundering offense existed against petitioners. Petitioners never possessed or controlled alleged proceeds of crime transferred directly to land owners' accounts. Securing loan fraudulently by submitting false documents at most constituted forgery or bank fraud, not money laundering. Petitioners' act of mortgaging property to bank for securing loan could not be termed money laundering. Petition allowed quashing proceedings against petitioners.
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SEBI

• SEBI Issues Guidelines for Research Analysts: Registration, Compliance, Fee Caps.

  Circulars : The SEBI circular provides the following key points regarding research analysts (RAs): 1. Eligibility criteria for part-time RAs, including restrictions on providing advice/recommendations on securities without SEBI registration. 2. Compliance requirements such as appointing a compliance officer, using AI tools responsibly, maintaining research reports, disclosing terms and conditions to clients, and obtaining client consent. 3. Guidelines on fees chargeable to clients, with an annual limit of Rs. 1.51 lakh per family for individual/HUF clients. 4. Mandatory client-level segregation of research and distribution activities within an RA's group/family. 5. Guidelines for recommending model portfolios, including disclosures, methodology, benchmarking, and audit requirements. 6. KYC obligations, record maintenance of client interactions, and grievance redressal mechanisms. 7. Annual compliance audit requirements, including reporting adverse findings to SEBI and publishing the audit status on the RA's website. 8. Requirement to maintain a functional website with specified details. The circular aims to enhance transparency, mitigate conflicts of interest, and standardize practices in the research analyst industry.
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• PACL must refund Rs. 49,000 cr raised through illegal investment schemes: SAT.

  Circulars : SAT upheld SEBI's order directing PACL to refund over Rs. 49,000 crore collected through illegal collective investment schemes. Key legal principles: PACL's activities violated SEBI CIS Regulations as it mobilized huge sums without regulatory approval. PACL failed to prove its business model was legitimate. SAT rejected PACL's arguments and upheld SEBI's directions to wind up schemes and refund investors.
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• Revised timelines for Credit Rating Agencies: faster rating reviews, press releases, non-payment tagging.

  Circulars : SEBI modified timelines in Master Circular for Credit Rating Agencies (CRAs) to promote ease of doing business. Key changes are publication of press release within 7 working days of rating action, conducting rating review within 2 working days of receipt of delayed payment statement, tagging ratings as INC within 5 working days of 3 consecutive non-submission of no-default statements, following up with issuer within 2 working days if no confirmation received from debenture trustee on debt servicing. The circular is effective immediately under SEBI Act, 1992 and CRA Regulations.
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Service Tax

• GTA: Transport of iron ore was composite service, not separate cargo handling.

  Case-Laws - AT : Appellant provided services of loading, unloading, shifting, and transportation of iron ore under separate contracts. CESTAT held it was a composite service for transportation, not cargo handling. Loading/unloading activities were incidental, contract couldn't be artificially divided. For 2010-11 to 2011-12, goods were exported, so demand set aside. For extended period, demand time-barred as no suppression of facts by appellant who believed no service tax payable. Appeal allowed, demand unsustainable.
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Central Excise

• Statements recorded by officer can't be used against assessee without cross-examination.

  Case-Laws - HC : The HC held that u/s 9D(1)(a) of the Excise Act, statements recorded by the Gazetted Central Excise Officer during investigation cannot be used against the assessee unless the witnesses are produced for cross-examination during adjudication proceedings, as per Section 9D(1)(b). The incriminating material/statements recorded behind the assessee's back cannot be used against them without allowing cross-examination. The appeal was dismissed.
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• Appellant eligible for duty exemption notifications 6/2002-CE, 6/2006 CE after reversing Cenvat Credit with interest before notice.

  Case-Laws - AT : The appellant is entitled to the benefit of notification no. 6/2002-CE and notification no. 6/2006 CE. The appellant reversed the Cenvat Credit attributable to the goods cleared without payment of duty along with interest during the investigation itself before issuance of the show cause notice, thereby fulfilling the condition of the notifications. No penalty is imposable. The CESTAT disposed of the appeal.
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• CENVAT credit allowed for goods exported under Notification No. 4/2006-CE, reversal u/r 6(3) not required.

  Case-Laws - AT : The appellant had reversed CENVAT credit amount u/r 6(3) for goods cleared for export under Notification No. 4/2006-CE and claimed refund. CESTAT held that reversal u/r 6(3) was not justified for exports under conditional Notification No. 4/2006-CE as per Rule 6(6)(v). The exempted goods cleared for export are eligible for CENVAT credit. The appellant is not required to pay amount u/r 6(3) for goods exported under said notification. Impugned order set aside and appeal allowed.
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• Excise penalty on co-noticee set aside after main case settled under SVLDRS.

  Case-Laws - AT : Appellant's appeal allowed. CESTAT held when main case settled under SVLDRS 2019, penalties on co-noticees in same case unsustainable. Relying on division bench judgments, CESTAT set aside penalty imposed on appellant co-noticee u/r 26 of Central Excise Rules 2002 as main noticee's case settled under SVLDRS 2019.
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Case Laws:

• GST

• 2025 (1) TMI 467
  Cancellation of GST registration of petitioner - petitioner is ready to deposit all the outstanding dues of tax including interest and penalty - HELD THAT:- The present writ petition is disposed of with a direction that if the petitioner deposits outstanding dues of tax including interest and penalty, if any, and submits his application for reversal of the cancellation of GST registration within one week from today, the competent authority shall consider the application of the petitioner and pass an appropriate order as per law within a period of one week from the date of production of the certified copy of this order along with the application.

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• 2025 (1) TMI 466
  Challenge to impugned order on the limited ground that the impugned order suffers from violation of principles of natural justice inasmuch as it does not apply its mind to the material on record while confirming the levy of interest and penalty - HELD THAT:- Taking into account the peculiar facts of the case, wherein, the petitioner has already reversed the ITC which is in dispute, this Court is of the view that the petitioner may be granted one final opportunity to put forth his objections, which was not objected to by the learned Special Government Pleader for the respondent. The impugned order, dated 07.12.2023 is set aside. The impugned order shall be treated as show cause notice and the petitioner shall filed their objections within a period of four weeks from the date of receipt of a copy of this order. Petition disposed off.

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• 2025 (1) TMI 465
  Input Tax Credit - services procured for the operation and maintenance of Diving Support Vehicle owned by them and used by it for supplying port and terminal handling services - services procured for hiring, and for operation and maintenance of Security Patrol Vessel used by it for supplying port and terminal handling services. ITC in respect of services procured for the operation and maintenance of DSV and SPV - HELD THAT:- It is evident that section 17 (5) (ab) read with the proviso beneath, restricts ITC in respect of repair and maintenance of vessels. However, the proviso makes the ITC available if the vessels referred to in clause (aa) are used for the purposes specified therein.There are not much merit in it. GAAAR being a creature of the statute [ie CGST Act], is not permitted to either put words into the statute or stretch the statute. On a bare reading of the provisions, it is found that as far as ITC of repairs and maintenance of vessels is concerned it would not be available to the respondent since the vessels per se [DSV and SPV] are not being used for transportation of goods. The respondent therefore will not be eligible for availing ITC on input services in respect of repairs and maintenance received by them. ITC in respect of hiring services of SPV - HELD THAT:- In terms of the proviso beneath section 17 (5) (b) (i), ITC is available on hiring of SPV, where an inward supply of such goods or services is used by a registered person for making an outward taxable supply of the same category of goods/service or as an element of taxable composite or mixed supply; that the services procured are not merely those of hiring of vessels but those of operation and maintenance of said vessels. It is an undisputed fact that hiring service was not used for making an outward supply of the same category of service. Further nothing has been produced to contend that the hiring service was used by the respondent for making an outward taxable supply of services which is an element of a taxable composite or mixed supply. There is no explanation forthcoming as to how the input hiring service of SPV was an element of the taxable output service operation and maintenance either as a composite or a mixed supply - ITC is blocked under section 17 (5), ibid in respect of hiring of vessel [SPV] wherein the contractor of the respondent has discharged GST under SAC code 996602 and 996609. Conclusion - i) M/s. Sikka Ports and Terminals Ltd., [the respondent] is not eligible for availing ITC on input services in respect of repairs and maintenance received by them for DSVS and SPVs. ii) M/s. Sikka Ports and Terminals Ltd., [the respondent] is not eligible to avail ITC on hiring of SPVs in terms of section 17 (5) (b) of CGST Act, 2017.

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• 2025 (1) TMI 464
  Levy of GST - recoveries made by the Applicant from the employees for providing canteen facility to its employees - free of cost bus transport facilities provided by the Applicant to its employees - Exemption under the Sl. No. 15 of N/N. 12/2017 Central Tax (Rate) dated 28 June 2017 - admissibility of input tax credit to the Applicant for the GST charged/paid to the vendors on procurement of such services in terms of Section 16 of CGST Act, as the same are used in relation to furtherance of business. Levy of GST - recoveries made by the Applicant from the employees for providing canteen facility to its employees - free of cost bus transport facilities provided by the Applicant to its employees - Exemption under the Sl. No. 15 of N/N. 12/2017 Central Tax (Rate) dated 28 June 2017 - HELD THAT:- The respondent has arranged free of cost transportation facility to its employees in non -AC bus, which is provided by a third party vendor, as a part of its HR policy and as per employment agreement. These facts are not in dispute. The perquisite of providing free bus transportation by the respondent to their employee in terms of contractual agreement entered into between the respondent and their employee are in lieu of the services provided by employee to the employer in relation to his employment and will not be subjected to GST when the same are provided in terms of the contract between the employer and employee. M/s. Emcure [respondent] is not liable to pay GST on free bus transportation facility provided to its employees. Admissibility of ITC - HELD THAT:- ITC is admissible for transportation services with a seating capacity of more than 13 persons. Conclusion - Respondent is not liable to pay GST on free bus transportation facility provided to its employees. ITC is admissible for transportation services with a seating capacity of more than 13 persons.

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• Income Tax

• 2025 (1) TMI 463
  Validity of Revision proceedings u/s 263 - period of limitation - Delay filling SLP - HC [ 2024 (2) TMI 1381 - RAJASTHAN HIGH COURT] decided for the purposes of exercising powers u/s 263 the period of limitation for passing the order has to be reckoned from the date of original assessment order and not from the date of reassessment order, thus decided issue in favour of assessee - HELD THAT:- There is a delay of 180 days in filing the Special Leave Petition which has not been satisfactorily explained. Even otherwise, we have gone through the Special Leave Petition and do not find any merit in the same. Special Leave Petition is, therefore, dismissed on the ground of delay as well as on merits.

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• 2025 (1) TMI 462
  Reopening of assessment u/s 147 - claim of deduction u/s 36(1)(viia) - Petitioner filed its return of income ( ROI ) for AY 2010-11 declaring a total income but subsequently, filed a revised ROI as added back an amount being a provision for Non-Performing Advances as per the RBI Regulations. Petitioner has also claimed an amount as deduction u/s 36(1)(viia) being 7.5% of the profit of Petitioner and claim was disclosed in the computation of income - As decided by HC [ 2024 (3) TMI 731 - BOMBAY HIGH COURT] allow the claim of Petitioner for deduction u/s 36(1)(viia) of the Act and clear case of change of opinion and that cannot be a basis for reopening the assessment, thus decided in favour of assessee - delay filling SLP - HELD THAT:- There is a delay of 162 days in filing the Special Leave Petition which has not been satisfactorily explained. Even otherwise, we have gone through the Special Leave Petition and do not find any merit in the same. Special Leave Petition is, therefore, dismissed on the ground of delay as well as on merits.

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• 2025 (1) TMI 461
  Order u/s 127 (2) transferring the petitioner s case from the jurisdictional officer in Mumbai to the counterpart in New Delhi - HELD THAT:- The impugned order notes that the cases are centralised with Central Circle for coordinated investigation in group cases to protect the interest of revenue. The convenience of the assessee is adverted to, but the impugned order observes that this aspect is secondary and may have to yield to the more significant interest of centralised and coordinated investigation. The order also records that the centralisation is for a limited period, and once the assessment concludes as per the norms, then there would be de-centralization. The impugned order also refers to certain precedents of the Hon ble Supreme Court and the jurisdictional High Courts. The impugned order reasons that the contentions of the inconvenience raised by the assessee can always be addressed through modern technological advances, thereby obviating the necessity of extensive travel by the assessee or its representatives. The impugned order also refers to protecting the revenue s interest, which a coordinated investigation could fairly achieve. The impugned order records that all cases of Pacific Group are being assessed at Delhi in a centralised place. Consequently, there would be no good reason to exclude only the case of the petitioner-assessee. The charge that the impugned order is unreasoned must fail. At least prima facie, the reasons cannot be considered irrelevant or extraneous. Therefore, we find no infirmity in the impugned order on the ground that it is bereft of reasons. Absence of agreement between the two Commissioners - As noted earlier, Section 127 (2) of the Income Tax Act contemplates granting the assessee a reasonable opportunity to be heard. Such opportunity was given to the petitioner-assessee. In the objections filed by the petitioner-assessee, specific issues were flagged. Therefore, by communication dated 29 December 2022, the Principal Commissioner of Income Tax-4, Mumbai, wrote to the Principal Commissioner of Income Tax (Central)-2, New Delhi, to provide evidence/documents so that the objections raised by the petitioner-assessee would be considered fairly and reasonably. By response dated 16 February 2023, the Principal Commissioner of Income Tax in New Delhi clarified the matter. Reference was made to the bogus transaction allegedly undertaken by the petitioner as a service provider to the extent of Rs.1 crore during FY 2021-22. Reference was also made to the entities belonging to Pacific Group having claimed bogus expenses in their transactions with the petitioner-assessee. This communication records that the transactions, if assessed without considering the modus of evasion carried out by the Pacific Group, may result in a loss of revenue. Thus, the communications dated 29 December 2022 and 16 February 2023 were in the context of the fair hearings offered to the petitioner. Based on these communications, we cannot sustain any argument regarding the alleged absence of agreement between the two Commissioners. Accordingly, we are satisfied that the impugned order is not vulnerable on the two grounds alleged by the petitioner. We see no infirmity in it that warrants interference in the exercise of our extraordinary jurisdiction.

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• 2025 (1) TMI 460
  Capital gain computation - Transfer of capital asset u/s 2(47) - JDA - applicability of Section 53A of the Transfer of Property Act, 1882 - real ownership - assessee handed over the possession of the land to the developer - HELD THAT:- Even though there is a contract to transfer the immovable property, which is signed by the parties, yet the contract has not been executed for consideration. A sum of Rs. 2,00,000/- mentioned in paragraph 6 of the development agreement is only the performance guarantee which is refundable. The aforesaid amount has not been paid by way of consideration of the transaction. The developer has been handed over the possession for the limited purpose of carrying out the development work. Therefore, in pursuance of the development agreement, the possession of the immovable property has not been handed over to the developer as contemplated u/s 53A of the Transfer of the Property Act, 1882. Therefore, the same does not fall within the definition of transfer under Section 2 (47) of the Act. Reliance placed by the Revenue in Potla Nageswara Rao [ 2014 (8) TMI 636 - ANDHRA PRADESH HIGH COURT] the same is an authority for the proposition that element of factual possession and agreement are contemplated as transfer within the meaning of Section 2 (47) of the Act. It has further been held that when the transfer is complete, the consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of assessment of income. In the instant case, under the development agreement there is no transfer and the consideration has also not been paid. Therefore, the aforesaid decision of the Division Bench has no application to the fact situation of the case. Similarly, in the case of Arvind S Phake [ 2017 (12) TMI 1235 - BOMBAY HIGH COURT] , the possession was handed over to the developer and the entire consideration was paid. In the instant case, consideration has not been paid. Therefore, the Division Bench decision of the Bombay High Court also does not apply to the fact situation of the case. The finding has been recorded by the Tribunal that the appellant has handed over the possession of the entire property enabling the developer to enjoy 60% of the constructed area of the building cannot, but be said to be perverse. Similarly, the finding that the assessee is liable to pay capital gains tax during the assessment year 1997-98 also cannot be sustained. Substantial questions of law framed answered in favour of the assessee and against the revenue.

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• 2025 (1) TMI 459
  Reopening of assessment u/s 147 - violation of the principles of natural justice due to the denial of a personal hearing requested by the petitioner - HELD THAT:- Circular No. F.No.225/97/2021/ITA-II dated 6 September 2021 in the context of approval for the transfer of assessments/penalties proceedings to jurisdictional AO. This Circular provides that the request for personal hearings shall generally be allowed to the assessee with the approval of the Range Head, mainly after the assessee has filed a written submission to the show cause notice. Personal hearings may be allowed for the assessee, preferably through video conference. If Video Conference is not technically feasible, personal hearings may be conducted in a designated area in the Income-Tax Office. The hearing proceedings may be recorded. Given this Circular, the defence raised, or the justification offered in paragraph 6(e) of the Respondents affidavit cannot be accepted. In this case, though the assessment order was appealable, we have entertained this petition because a case of complete failure of natural justice was made out. No personal hearing was granted to the Petitioner, and such denial was not for valid reasons. We set aside the impugned assessment order dated 26 March 2024 and remand the matter to the concerned Respondent to dispose of the show cause notice issued to the Petitioner following the law and after granting the Petitioner a personal hearing. The concerned Respondent should complete the assessment proceedings within three months of uploading this order on this Court s website. Now that we have set aside the impugned assessment order, the consequential demand notice and penalty notice based on this order are also set aside. All contentions of all parties are left open for consideration of the AO in the first instance.

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• 2025 (1) TMI 458
  Validity of Reopening of assessment u/s 147 - issues already examined - objections raised by the petitioner non addressed - validity of approval granted u/s 151 - HELD THAT:- The first submission of petitioner that these issues were examined and, therefore, the proceedings are without jurisdiction is required to be rejected. The issue of alleged cash receipt was not examined during the course of the regular assessment proceedings since the information from Faridabad Officer was received after the conclusion of the assessment proceedings. The assessment proceedings were concluded on 30 November 2018 whereas the information of alleged cash receipt was received on 21 February 2022. From the questionnaire issued to examine issues in the regular assessment proceedings there is no query on credit card expenses or alleged cash receipt. Therefore, both issues do not appear to have been examined. The assessment order further records that the assessment was limited scrutiny assessment only for verification of deduction under Chapter VI. The Petitioner has not enclosed the submissions made during assessment proceedings in the present petition, and therefore, we cannot give any conclusive findings in the writ proceedings. Therefore, on these counts, the submissions made prima facie are required to be rejected. Non addressing of objections raised by the petitioner - Second submission that in the annexure to notice u/s 148A(b), it is stated that the return is not filed is incorrect since the return was, in fact filed and the same has not been disputed in the order rejecting the objections. In our view, the reopening has to be done based on information and the said information has been reproduced in the annexure to the notice under Section 148A(b). It is based on the said information that the present proceedings are initiated. Although the respondents in the said annexure to the notice have stated that the return has not been filed, but in our prima facie view, that is not the basis on which the reopening is sought. ' The reopening is based on the information in accordance with the Risk Management Strategy Formulated by the CBDT. The respondents in their replies have stated that the statement in the information annexed to the notice that the petitioner has not filed return of income is a typographical error. In our view, without going into the same, prima facie since the reopening is based on the information, this submission made by Ms Pawar is rejected and can better be examined in appellate proceedings. Submission concerning approval u/s 151 - Appelant submitted that the approval is without application of mind. We have perused the approval memo, which was annexed to the petition and we do not find prima facie that the approval is without application of mind. In the remarks column in Item 21 and 22 it is stated after going through the annexure, the authority has given its approval by referring to the material available on record and consideration of the same. This is not a case where in the approval column, the approving authority has only stated yes , but the approval records the perusal of the draft order submitted by the assessing officer, material available on record, consideration of the same and the information as per Risk Management Strategy. Therefore, prima facie we are not impressed with the submission of the petitioner on this count. No reason to interfere in the impugned proceedings to quash the notices challenged in the present petition. However, the petitioner is at liberty to raise the same in normal reassessment / appellate proceedings if and when the occasion arises.

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• 2025 (1) TMI 457
  Refund as reflected in the TDS certificate - Petitioner, on instructions submitted that the Petitioner will not claim any interest on the refund, however, since the TDS certificate has been placed on record, the Respondents should at least verify the position regarding deductions and grant a refund to the Petitioner - HELD THAT:- In the peculiar facts of this case, we think that the Respondent must dispose of the Petitioner s representation dated 19 June 2019 within three months from today. For this, the Respondents must verify the status of deductions, if any, carried out by Percept Pictures Company Pvt Ltd. If the Petitioner has any further material regarding the deductions, the Petitioner is granted liberty to place the same before the concerned Respondent within two weeks from today. The concerned Respondent must hear the Petitioner, consider the material placed by the Petitioner on record, verify the status of deductions, if any, made by Percept Pictures Company Pvt Ltd and the other material available with the department and dispose of the Petitioner s representation, dated 19 June 2019. Suppose the concerned Respondent is satisfied that deductions were indeed made as reflected in the TDS certificate. In that case, this amount should be refunded to the Petitioner within a month from such determination.

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• 2025 (1) TMI 456
  Assessment completed putting reliance on Special Audit Report of the External Auditor appointed for this purpose u/s 142(2A) - HELD THAT:- Prima facie, a reliance on the report generated for the earlier Assessment Years cannot be basis to conclude that the similar pattern would have been followed by an assessee during the subsequent Assessment Years to do so and would amounting to assessment by sampling which is frowned upon by this Court. Therefore, to that extent, the Impugned Assessment Order deserves an interference. That apart, it appears that the entire amount of expenses incurred by the petitioner towards the salaries of its staffs has been disallowed. Thus, a reading of the table in the Impugned Assessment Order particularly the table which has been extracted stated that no allowance has been made for the expenses incurred by the petitioner towards administrative and salary expenses of the petitioner. Under these circumstances, the Impugned Assessment Order is liable to be set aside and is accordingly set aside and the case is remitted back to the respondents to pass a fresh order on merits and in accordance with law independently without getting influenced from the Special Audit Report dated 02.06.2017 u/s 142(2A) of the Income Tax Act, 1961 generated for the Assessment Year 2014-2015.

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• 2025 (1) TMI 455
  Dividend Distribution Tax paid by the Company is a tax on shareholders income or the company itself - HELD THAT:- The aforesaid issue is squarely covered against the assessee by decision of Total Oil India Pvt. Ltd.[ 2023 (4) TMI 988 - ITAT MUMBAI (SB)] hold that where dividend is declared, distributed or paid by a domestic company to a non-resident shareholder( s ), which attracts Additional Income-tax (Tax on Distributed Profits) referred to in sec.115-O of the Act, such additional income tax payable by the domestic company shall be at the rate mentioned in section 115-O of the Act and not at the rate of tax applicable to the non-resident shareholder( s ) as specified in the relevant DTAA with reference to such dividend income. We are conscious of the sovereign's prerogative to extend the treaty protection to domestic companies paying dividend distribution tax through the mechanism of DTAAs. Thus, wherever the Contracting States to a tax treaty intend to extend the treaty protection to the domestic company paying dividend distribution tax, only then, the domestic company can claim benefit of the DTAA, if any. Decided against assessee.

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• 2025 (1) TMI 454
  Penalty u/s 271G by TPO - as argued TPO had not asked for specific information/data in statutory notice u/s 92D(3) and that it is not the case where the documents were not furnished at all by the assessee and that there was a reasonable cause for delay in furnishing the details/documents - HELD THAT:- Hon ble Bombay High Court in the case of Undercarriage and Tractor Parts (P.) Ltd. Vs. Dispute Resolution Panel[ 2023 (9) TMI 759 - BOMBAY HIGH COURT] wherein the assessee challenged the validity of the assessment order passed u/s 143(3) r.w.s. 144C(13) and the Hon ble Bombay High Court quashed and set aside the directions issued by the Ld. DRP and consequent assessment order. However, the Ld. CIT(A) has failed to take cognizance of the said decision of the Hon ble Bombay High Court while allowing the penalty appeal of the assessee. Before us, the Revenue has not brought on record any decision of the Higher Forum against the said decision of the Hon ble Bombay High Court (supra). Thus, in our considered view, the impugned penalty is not exigible. Consequently, we reject the appeal of the Revenue being devoid of any merits and substance.

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• 2025 (1) TMI 453
  Revision u/s 263 - exemption claimed u/s 11 - DR argued that while the ITAT considered the gross receipts as exempt in the hands of the assessee, it made no specific observations regarding Section 11, retaining it for academic purposes only - HELD THAT:- A critical aspect of the decision was that the assessee s role was purely custodial, with ownership of the collected funds (lease premiums, etc.) remaining with the State Government. As the assessee merely acted as an agent, the income could not be taxed in its hands, thereby obviating the need for a detailed analysis under Section 11. The revenue s contention that the assessee s activities were commercial in nature was also examined. This issue was conclusively addressed in Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT ] wherein it was held that similar activities did not constitute commercial activity. Further, in the revisional order under Section 263 of the Act, the Ld. CIT(E)directed the Ld. AO to verify the exemption claimed under Section 11 of the Act. However, the nature of gross receipts had already been examined in the ITAT s ruling, which was duly followed by the Ld. AO. Despite issuing notices under Section 263, the Ld. CIT(E) was unable to identify any new income sources beyond what had already been disclosed by the assessee. Consequently, the Ld. AO adhered to the directions of the higher authority. We respectfully rely on the rulings in Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ], NYK Line (India) Ltd. [ 2012 (2) TMI 283 - BOMBAY HIGH COURT ], and M/s Paul Brothers [ 992 (10) TMI 5 - BOMBAY HIGH COURT ] as well as N.N. Agrawal [ 1991 (1) TMI 119 - ALLAHABAD HIGH COURT ] all of which underscore that Section 263 cannot be invoked merely on the basis of a change of opinion. In our considered view, the direction to verify Section 11 is inapplicable in this case. Accordingly, the revisional order passed by the CIT(E) under Section 263 is unjustified and is hereby quashed. Assessee appeal allowed.

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• 2025 (1) TMI 452
  Rejection of application for registration of trust u/s 12AB and provisional registration u/s 80G(5) - applicant failed to file documentary evidences to enable him to satisfy about (i) genuineness of activities of the trust or institution, (ii) that the activities of trust or institution are in consonance with the objects of the trust or institution and (iii) that other laws material for the purpose of achieving objects are complied with - HELD THAT:- CIT(E) has decided the matter ex parte due to non-compliance by the applicant to the two notices issued by him. There was also no adjournment request by the assessee. AR has contended that the assessee-trust is ready to submit all the details and evidences needed by the CIT(E). He requested that in the interest of justice, one more opportunity may be given to the assessee to plead its case, which is strong on merits. We are of the view that one more opportunity should be given to the assessee to file requisite documents and evidences before the CIT(E) and to plead its case before him. It is a settled law that the principles of natural justice require the affected party to be granted sufficient opportunity of being heard to contest his case. Grounds of appeal raised by the assessee are allowed for statistical purposes.

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• 2025 (1) TMI 451
  Revision u/s 263 - excess claim of depreciation on the part of the assessee while computing the book profit u/s 115JB - HELD THAT:- CIT invoked the provisions of section 263 on the basis of incorrect facts, whereas the claim of depreciation in the return of income filed by the assessee i.e. FDPL was found in order by the Assessing Officer as per the details furnished by the assessee. We also notice that there is no discrepancy in the claim of the assessee in the book depreciation while computing the book profit u/s 115JB of the Act as the amount of claim is same as reflected in the P L Account. All these details were available before the learned Pr. CIT as well as before the AO. However, without considering the facts and details objectively, the learned Pr. CIT has passed the impugned order and directed the Assessing Officer to re-verify the claim of the assessee. It is pertinent to note that as per the order sheet in details and office note of the National E-Assessment Centre, the Regional Assessing Officer of the Assessment Unit has admitted the fact that the assessment order passed in the case of the assessee is not sustainable being passed against the non-existing entity. The impugned order passed by the learned Pr. CIT u/s 263 is based on incorrect facts is not sustainable in law and liable to be quashed.Appeal filed by the assessee is allowed.

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• 2025 (1) TMI 450
  Addition u/s 56(2)(viib) - issue of share at premium - Addition of share premium and share capital treating the value of share value at Rs. Nil u/s 56 - valuation report submitted by the assessee rejected - AR submitted share valuation report which was not as per rule 11UA but valuation of shares was done as per 'Adjusted Net Asset Method and as per 'future earning analysis - AO noted that future earning analysis method not allowed in rule 11UA but that rule allow two methods discounted free cash flow method and 'Book value of net asset method. HELD THAT:- As during Assessment Proceedings Appellant-assessee company filed Valuation Report obtained from an Accountants as per requirement of Rule 11UA of the Income Tax Rule. In the said report valuation of Equity Share is carried out on various methods i.e. Fair Market Value, Net Asset Value, Future Earning Method and Discounted Cash Flow method. CIT(A) did not discuss as to why the report of an accountant placed on record which is based on the relevant rule for valuation of shares is not considered and he has simply confirmed the view of the assessing officer. Before us ld. AR supported that valuation done was as prescribed by the rule and that report of the independent accountant submitted by the assessee was not doubted or challenged on any of the aspect. The assessee has discharged his onus by submitting the relevant report in support of the fair market value adopted by the assessee. Assessee-appellant having placed on record the report of the accountant dated 05.01.2015 that the fair market value of the share shall be determined under various methods of valuation including discounted cash flow method. However as per explanation given under provision of section 56(2)(viib) of the Act, the fair market value of the shares shall be the value as may be determined in accordance with rule 11Uand 11UA of I. T. Rules. Therefore it is mandatory that the fair market value of the shares for the purpose of section 56(2)(viib) of the Act is determined as per the method prescribed under rule 11U and 11UA of the I. T. Act only and thus the fair market value of shares determined by any other method is not to be considered. See Idana Pet Industries P. Ltd [ 2023 (12) TMI 1393 - ITAT JODHPUR] . Thus direct the AO to delete the addition so made in the hands of the assessee. Decided in favour of assessee.

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• 2025 (1) TMI 449
  Income taxable in India - Taxability of income from domain name registration services - royalty receipts - whether income from domain name registration services squarely fell within the definition of royalty as per section 9(1)(vi) of the Act as well as Article 12(3)(a) of India-USA DTAA - HELD THAT:- Appellant, being a Registrar, is not the owner of domain name that it helps to register and does not hold any proprietorship rights in the names used domain names. This is affirmed by clause 3.5 of the Accreditation Agreement between the Appellant and ICANN and reference and clause 2 of the agreement between the Appellant and its customers, was made. It was contended that in the absence of ownership over the domain names, the Appellant cannot confer the right to use or transfer the right to use such domain names to another person / entity. Therefore, the income earned by the Appellant from domain name registration services is not chargeable to tax in India as royalty under the provisions of section 9(1)(vi) of the Act as well as Article 12(3)(a) of India-USA DTAA. We find that this view has also been affirmed by Hon ble Delhi High Court in the Appellant s own case for AY 2013-14 to AY 2015-16 [ 2023 (12) TMI 718 - DELHI HIGH COURT ] wherein, vide order dated December 11, 2023, it has been held that the income earned by the Appellant from assisting customers in registration of domain names cannot be treated as royalty under the provisions of section 9(1)(vi) of the Act itself. DR could not cite before us any new or different set of facts for the present years to claim that the clauses of the relevant agreements are not identical to the years for which the above mentioned order was passed by the Hon ble Delhi High Court. Thus the ratio of the said decision should apply and the income earned by the Appellant from providing domain name registration services to Indian customers during the year under consideration cannot be held to be taxable in India under the provisions of section 9(1)(vi) of the Act as well as Article 12(3)(a) of India-USA DTAA. Ground no. 3 is sustained. Eligibility of assessee for benefit of DTAA and taxability of income from non-domain services such as web hosting, web designing services etc. - AO has erred in giving a findings that being a LLP the assessee is not eligible for treaty benefits. The law in this regard is quite settled as it is now settled that the term, liability to taxation has to be distinguished from actual payment of taxation. Liability to taxation indicates the powers of taxing an income though the incidence of taxation and actual payment may be different. The reliance of the ld. counsel on the decision of Wild West Domains, LLC [ 2024 (8) TMI 356 - ITAT DELHI ] certainly takes care of the issue wherein relying the decision of Linklaters LLP [ 2010 (7) TMI 535 - ITAT, MUMBAI ] and Herbert Smith Freebills LLP [ 2022 (10) TMI 903 - ITAT DELHI ] the coordinate bench has given benefit of DTAA, irrespective of the fact that the assessee in that case was fiscally transparent entity in USA, like the present assessee. Accordingly, ground No.2 is sustained in favour of the appellant. Income from provision of non-domain services (such as web hosting, web designing services etc.) - A web host provides multiple web servers to host many different websites, ensuring they are accessible on the internet. One can even set up a web site on two separate servers from two different hosting companies with the same domain just by ensuring that domain names are set up on both servers. A person may buy domain and hosting from different providers. It even has benefits like buying domains and hosting from different providers can give you more flexibility and control over your website, as such person is able to choose the best provider for each service. It is sometimes more cost-effective, as one may find better deals on either domain or hosting by shopping around. AO has fallen in error to consider web hosting charges and other non-domain services charges as FTS, being ancillary and subsidiary to the application or enjoyment of domain name registration. The customized technology and services of the provider are fairly available to everyone who proceeds to acquire a domain name or pays for web hosting services. There is no transfer of any knowledge or know-how by the service provider which can deliver any enduring benefit to said person. In fact, to make the website operational on the basis of ownership of a domain name and having services of web hosting, the person creating a website has to independently engage its technological inputs which may be unique to the needs of that person in terms of the objectives of the website. Thus the income from provision of non-domain services (such as web hosting, web designing services etc.) do not make available any technical knowledge, experience, skill, know-how, or processes or result in transfer of any technical plan or technical design to the users. Accordingly, the consideration received by the Appellant for rendering such services should fall outside the ambit as FIS as per Article 12(4)(b) of the India-USA DTAA. Ground no. 4 is sustained.

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• 2025 (1) TMI 448
  Penalty u/s 270A - willful negligence or a misreporting of income - assessee has claimed both the capital expenses and depreciation as application of income - scope of mens rea - HELD THAT:- It is well settled law that mens rea is not an essential condition for imposing penalties under civil acts. This is because the intention of the legislation is clear, and the penalty is levied once a specific eventuality occurs as prescribed under section 270A of the Act. The Apex Court has also ruled that penalty provisions are for breach of civil obligation, so mens rea is not an essential ingredient. Further the Mens rea is not necessary for a conviction in strict liability crimes. This means that someone can be held accountable for the deed itself, regardless of whether they intended to commit the crime. Therefore, following the precedent set in Dharmendra Textile Processors [ 2008 (9) TMI 52 - SUPREME COURT] we hold that mens rea is not an essential element for imposing penalties for breach of civil obligations as held by the ld. CIT(A)/NFAC and finding of the contravention is sufficient to attract penalties under the Income Tax Act, irrespective of the intention behind the contravention. Thus, even in the Audit report filed way before the filing of return of Income, the total revenue expenditure claimed as application of income includes the depreciation claim and the assessee has also claimed the capital expenditure as application of income which amounts to claim of double deduction. Further in the present case as observed by the AO, the assessee had option to rectify its mistake by filing revised return of income as per section 139(5) of the Act and during the proceedings it was noticed by AO that assessee has not filed it voluntarily. More remarkably during the course of Assessment proceedings, as observed by the AO, the assessee submitted that depreciation on assets has not been claimed as application of Income. Thus we set aside the Order of the ld. CIT(A)/NFAC sustain the order of the AO in levying the Penalty U/s 270A of the Act by allowing the appeal filed by the Revenue.

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• 2025 (1) TMI 447
  Denial of benefit of new tax regime - Form 10 1E required to be submitted before or at the time of filing of ITR, but was submitted late - HELD THAT:- As due date relates to furnishing of returns of income for any previous year, relevant to the assessment year commencing on or even after 1.4.2021. From said provision, it cannot be said that law debars such an assessee from uploading of said Form, before or on the due date of ITR for the subsequent Assessment Year, even after one Form 10IE for the previous Assessment Year stands rejected from consideration by the department due to its late submission i.e. beyond the due date. Once said Form submitted for an Assessment Year is not accepted by the department only because same was uploaded beyond the due date, the abovesaid provision does not debar the assessee from repeating his option or desire to continue to opt to avail benefits of new tax regime in the very next Assessment Year, by furnishing fresh Form 10IE before or on the due date for furnishing of ITR for the very next Assessment Year. There is nothing to suggest that permitting an assessee to continue to opt on the basis of previously submitted Form or allowing him to furnish fresh Form for the very next assessment year, is going to cause any loss of revenue to the State. Having regard to the given facts and circumstances, and while applying the decision for the appellant, we deem it a fit case to allow the assessee to avail of benefit of concessional rate u/s 115BAC(5)(i) for the year under consideration i.e. AY 2023-24, on the basis of option already expressed to be exercised in the previous Assessment Year, subject to the condition that the assessee fulfills all other requirements of law as available u/s 115BAC(5)(i) of the Act. This appeal is allowed and department is directed to consider the option already expressed to be exercised in the previous Assessment Year, on the basis of Form 10 1E then submitted, subject to the condition that the assessee fulfills all other requirements of law as available u/s 115BAC(5)(i) of the Act.

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• 2025 (1) TMI 446
  TP adjustment - Addition towards interest on Compulsory Convertible Debenture ( CCDs ) - selection of MAM - HELD THAT:- The assessee company in order to justify the arm's length price of the interest due on CCD s had selected in its TP study Comparable Uncontrolled Price method as the most appropriate method and performed a detailed benchmarking analysis arriving at a list of 57 comparable issuance of CCD s. Based on such analysis, the assessee arrived at an arm's length range of 10.00% to 12.65% and concluded that the coupon rate of 11% was at ALP. The TPO ignored the benchmarking analysis undertaken by the assessee company without giving any cogent reasons, held that the ALP is NIL. TPO did not conduct any search in accordance with TP regulations under the Act and Rule. As decided in case of India Debt Management (P.) Ltd [ 2019 (9) TMI 920 - BOMBAY HIGH COURT] that where TPO made addition to assessee's ALP in respect of interest paid to AE on CCD, in view of fact that interest rate of comparables was ranging between 11% to 12%, 11.30% interest paid by assessee to its AE was very much within arm's length rate. Accordingly, the Hon ble High Court deleted the impugned addition. In the instant case, the coupon rate of 11% paid by the assessee was well within the arm s length range based on the benchmarking conducted by the assessee and hence the same is at ALP. Therefore, the action of the TPO / DRP in treating that CCDs as in the nature of equity is not permissible since CCDs remain as debt until they are converted. Bench had asked the ld.AR regarding the applicability of section 94B of the Act. The ld.AR by referring to the audit report at page 49 of the paper-book submitted that no disallowance is called for u/s. 94B of the Act (since interest payment on CCD s did not exceed 30% of EBITDA). However, this aspect needs to be examined if need be, by the AO. In the result, the Grounds are allowed. Disallowance of depreciation on goodwill on slump sale - assessee had entered into a Business Transfer Agreement ( BTA ) on 20.09.2017 pertaining to assessment year 2018-19 to acquire the marketing and sales division of leather chemical business of BASF India Limited ( BASF India ) by way of a slump sale - HELD THAT:- As per section 32 of the Act, depreciation would be available in respect of the assets owned, wholly or partly, by the assessee company and used for the purposes of the business or profession. Explanation 3 to section 32(1) of the Act, defines intangible assets to include know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature. The issue regarding whether goodwill constitutes a business or commercial right of similar nature is no longer res integra. The Hon ble Apex Court in the case of Smifs Securities [ 2012 (8) TMI 713 - SUPREME COURT] had held that goodwill constitutes an intangible asset as envisaged under section 32 of the Act. The Hon ble Jurisdictional High Court in the case of Mobis India Ltd. [ 2018 (2) TMI 307 - MADRAS HIGH COURT] had held though in the context of challenging the notice issued u/s. 148 had approved the original assessment order wherein the AO had allowed depreciation on goodwill acquired under business acquisition under BTA. As goodwill came into existence for the first time pursuant to slump sale. Thus, in absence of an asset already recorded in the hands of predecessor company, the provisions of Explanation 7 to section 43(1) of the Act will have no application Thus we hold that the depreciation on goodwill arising out of the slump sale is to be allowed under Section 32 of the Act for the concerned assessment year. Decided in favour of assessee.

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• 2025 (1) TMI 445
  Deduction claimed u/s 80P(2)(d) - interest received from Bank deposits from Co-operative Banks and Nationalized Bank - AO denied deduction and taxed the interest income as income from other sources u/s 56 - HELD THAT:- This issue is no more res integra by the very recent Jurisdictional High Court judgment in the case of Ashwinkumar Arban Cooperative Society Ltd. [ 2024 (11) TMI 971 - GUJARAT HIGH COURT] which has considered Karnataka High Court [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and Supreme Court judgment in the case of Totagars Coopeartive Sale Society [ 2010 (2) TMI 3 - SUPREME COURT] and amendment in Section 194C(3)(v) of the Act and held that the interest earned on the investment made with the Coopearitve Society which was carried out the banking business, the assessee cannot be denied the deduction u/s. 80P(2)(d) - Decided in favour of assessee.

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• 2025 (1) TMI 444
  Rejection of the books of accounts - Net profit determination - as argued comparables relied upon by the AO for computing the net profit at 5.59% are in the business of manufacturing speciality chemicals while the assessee is in the business of trading Bitumen and other bulk chemicals - HELD THAT:- From the perusal of the record, it is evident that the assessee did not respond to the last two notices issued by the AO seeking various details in respect of the expenditure claimed by the assessee. We further find that before CIT(A) the assessee tried to explain the nature of the expenditure incurred by it during the year under consideration, however, the CIT(A) without pointing out any specific deficiency in such evidence upheld the conclusion of the AO in rejecting the books of account of the assessee. In light of the submissions of the assessee that all the bills and vouchers of the expenses are available with the assessee and the assessee can justify such expenses, we deem it appropriate to restore this issue to the file of the Jurisdictional AO for de novo adjudication after considering the submissions and details as may be filed by the assessee after granting opportunity of being heard to the assessee. The assessee is directed to furnish all the details/evidence as may be sought by the AO for complete adjudication of this issue and also duly cooperate in the assessment proceedings. With the above directions, the impugned order is set aside and the grounds raised by the assessee and the Revenue are allowed for statistical purposes.

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• 2025 (1) TMI 443
  Reopening of assessment u/s 147 - unexplained cash deposits and gifts - HELD THAT:- Merely stating the assessment order passed by AO is upheld, and that the assessee has not submitted details/documents is not sufficient. CIT(A) is not toothless as his powers are co-terminus with the powers of the AO., which even includes power of enhancement. It is equally true that the assessee also did not complied with the notices issued by CIT(A) and did not file the requisite details/documents during appellate proceedings to support his contentions. It is also observed that the AO had rejected the contentions of the assessee without making any verification and investigation of facts. With respect to 11 donors from whom the assessee has claimed to have received gifts were never summoned by the AO u/s 131 nor information was called u/s 133(6) from these donors, and plea of the assessee was outrightly rejected by the AO. Similarly, other contentions of the assessee were rejected by the AO without making further enquiries/verifications. It is claimed that even reasons for re-opening of assessment were not provided by the AO, and even notices u/s 143(2) were not issued. In the fitness of the things and in the interest of justice and fairness to both the parties, since the matter requires investigation/verification of facts and the issue raised by the assessee goes to the root of the matter, it will be fit and appropriate that the matter can be set aside back to the file of AO for de novo assessment after providing proper opportunity to the assessee in accordance with principles of natural justice - Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 442
  LTCG - Nature of land sold - Disallowance of deduction u/s. 54B - re-investment by assessee in his wife and daughter and daughter-in-law s name - DR has submitted that the village -Gahri, Alawalpur to 2.3 KM from the Municipal limit of Dharuhera and hence it should be considered as a capital asset. He has submitted that the google map depicting the distance HELD THAT:- In the instant case the land in question is undisputedly situated in the village Garhi Alawalpur situated in the District Rewari which is within 5 Kms of the present Municipality Dharuhera . We find that this Municipality has not been mentioned in the said notification. The revenue could not bring to our notice any other notification issued wherein the Municipality Dharuhera situated in District Rewari is mentioned for the purpose of provisions of section 2(14). The coordinate Bench held that the land which is situated at Garhi Alawalpur Municipality Dharuhera of District Rewari cannot be treated as the capital asset and not liable to tax under the head Long Term Capital Gains . The amendment in the said section has been brought w.e.f 01-04-2014 and the land in question was sold on 21-03-2013 pertaining to A.Y. 2013-14. Since the proceeds cannot be treated as taxable in the hands of assessee. The issues of deduction u/s 54F and u/s 54B becomes academic in nature.

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• 2025 (1) TMI 441
  Exemption u/s. 11 - books of accounts of the earlier two A.Ys.2005-06 2006-07, were not audited and the opening balances for the impugned A.Y. has been taken are incomplete and hence the application of funds for the purpose of objectives of the trust is not acceptable - CIT(A) allowed exemption - HELD THAT:- Assessee has furnished the entire details of the hostel building rent along ledger extracts the CIT(A), which has been referred to the AO for remand report and the AO has not given adverse remarks to ld.CIT(A) and hence ground of the revenue is devoid of merits. In the present facts and circumstances of the case, we are of the considered opinion that there is no need to interfere in the orders of the ld.CIT(A). CIT(A) has allowed the exemption u/s. 11 of the Act to the assessee, after perusal of the documents in relation to books of accounts, audit report, filing of return and assessment by the department, which were furnished by the assessee with reference to the earlier A.Ys.2005-06 2006-07. Since, there is no change in the activities of the trust and the assessee is continued to enjoy the exemption u/s. 11 of the Act for the earlier A.Ys. 2005- 06 2006-07, we do not find any fault in the decision of allowing exemption u/s. 11 of the act to the assessee by the ld.CIT(A) for the impugned A.Y. 2007-08 and hence we dismiss the grounds of the appeal raised by the revenue.

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• 2025 (1) TMI 440
  Addition based on a statement made during a survey u/s 133A - retraction of the statement by the assessee - lack of documentary evidence to support the alleged undisclosed income - HELD THAT:- Additions have been made in the hands of the assessee primarily on the basis of statement of the assessee recorded during the course of survey proceedings. It is observed that while making the additions in the hands of the assessee on account of undisclosed income earned from land broking, there is no specific reference to land transactions deals done by the assessee during the impugned assessment year, there is no specific reference with regards to the name of purchaser and seller of such properties, there is no reference as to how this figure of Rs. 14 crores was arrived by the Department and in respect to which specific properties, there is no specific details of land which was purchased and sold for which the assessee earned brokerage income and further, there is no mention of the value of transactions for which the assessee earned brokerage income. It is seen that the entire basis of making addition of Rs. 14 crores to the income of the assessee is on the basis of statement recorded u/s 131A of the Act, during the course of survey proceedings. It is a well settled law that no additions can be made only on the basis of statement of the assessee unless supported by incriminating evidence against the assessee. The present additions are not liable to be sustained in the hands of the assessee. Appeal of the assessee is allowed.

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• Customs

• 2025 (1) TMI 439
  Direction to Respondents to release various containers containing imported consignments that have not been released to the respective Petitioners for various reasons - clearance of subject containers and the manner and mode in which the goods contained therein are to be disposed of - whether any handling charges are to be paid to CONCOR or not for clearing the subject containers? - HELD THAT:- The present order is being passed in the unique facts and circumstances of the present cases which have been pending for several years. The legal issues raised are left open. The appearance of Ms. Anju Gupta and Mr. Roshan Lal Gupta, ld. Counsels for Respondent No. 1 in W.P.(C) 2580/2018 may be reflected in order dated 10th December, 2024. Petition disposed off.

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• 2025 (1) TMI 438
  Maintainability of an appeal before the Commissioner (Appeal) against a letter received from the department enclosing SVB s Investigation Report - Investigation Report (IR) - HELD THAT:- The power of the Government to issue instructions has been recognised by a Constitution Bench of the Hon ble Supreme court in SANT RAM SHARMA VERSUS STATE OF RAJASTHAN ANR. [ 1967 (8) TMI 117 - SUPREME COURT] . The Hon ble Court held that while statutory rules cannot be amended by Executive instructions but if the rules are silent on any particular point, Government can fill up the gaps by issuing executive instructions, in conformity with the existing rules. The Circular per se is not under challenge. It deals with the subject; Procedure for investigation of related party import cases and other cases by the Special Valuation Branches . In the instant case, the appellant has not been able to demonstrate that the IR is a quasi-judicial decision or order issued under the statute and that they are an arraigned party having a legal grievance , that they satisfy the criteria stated in the above judgment, inasmuch as the IR has wrongly deprived them of something, or wrongly refused them something, or wrongfully affected their title to something. Hence they cannot be stated. The appellant has also not demonstrated any real prejudice caused to them by the investigation report. Merely being disappointed or dissatisfied is not enough. Further the IR is the product of a consultative process between the department and the appellant as the facts are known only to the appellant. It is a compilation of evidence gathered, and subjective conclusions reached by the investigators. The appellant had ample opportunity to put forward his views orally and in writing - They involve a quasi-judicial procedure with inbuilt safeguards of natural justice and procedural fairness. The appellant has a fair chance to represent his case including assailing the investigation report, which is not binding on the Original Authority while deciding the lis and if he is still aggrieved by the final decision, the appellant can take up the matter in further appeal as provided in the statute. Hence the appellant has not made out a case for quashing the impugned order and the same is upheld. Conclusion - The impugned order holding that the IR is not an appealable order is legal and proper. The right to appeal is a statutory right, not a constitutional one, and is subject to the conditions set forth in the statute. Appeal dismissed.

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• 2025 (1) TMI 437
  Demand of interest for the delayed payment of SAD - imposition of penalties - HELD THAT:- Section 3(12) of CTA provides that the provisions of the Customs Act, 1962 and the rules and regulations made there under, including those relating to drawbacks, refunds and exemption from duties shall apply in relation to the duties leviable under that Act. By citing this provision, the appellant-importer has claimed that there is no provision in CTA, including Section 3 thereof, for levy of interest and penalty for non-payment / delayed payment of SAD - When there is a delay in payment of SAD, interest is automatically liable to be paid as per Section 28AB of Customs Act, 1962, which is applicable in this case. Accordingly, the interest has been rightly demanded in the impugned order. Accordingly, the interest already paid appropriated by the appellant-importer against their interest liability confirmed in the impugned order. Penalties have been imposed under Sections 114A and 114AA of the Customs Act, 1962 - HELD THAT:- The appellant-importer were under the bona fide belief that SAD was exempted for the raw sugar was available even after April 8, 2011 and filed the bills of entry claiming the exemption. If the exemption was not available to them, the Customs authorities should have pointed out the same. Instead, we observe that the Bills of Entry filed by the appellant-importer were cleared without raising any query by the officers. Thus, the appellant-importer cannot be held responsible for the delay in payment of SAD. Further, we observe that Section 114A provides for imposition of penalty for short levy or non-levy or short payment or non-payment of duty by the reason of collusion or any wilful misstatement or suppression of facts. In this case, it is observed that there is no wilful misstatement or suppression of fact on the part of the appellant and hence the primary condition precedent for invoking Section 114A are absent. Accordingly, the penalties imposed on the appellant-importer under Sections 114A and 114AA of the Customs Act, 1962 are not sustainable and hence the same is set aside. Confiscation of the goods imported - HELD THAT:- All the Bills of entry were cleared after obtaining due permission from the jurisdictional Customs authorities. The customs authorities at Kolkata/Haldia initiated the instant proceeding against the appellant-importer only after issue of the Alert Notice dated April 10, 2013 by the Kandla Customs authorities asking all Customs formations in the country, including the respondent, to levy 4% SAD on the plea that exemption from SAD was no longer available. Thus, the goods imported by the appellant-importer and cleared after obtaining due permission from the proper officers are not liable for confiscation. Penalty imposed on the CHA, M/s. J.M. Baxi Co. - HELD THAT:- It is observed that they have filed the bills of entry as per the documents furnished by the appellant-importer. They have been filing Bills of Entry for importing raw sugar prior to April 2011, by claiming the exemption as provided under the Notification No. 12/2012-Cus (Serial No. 76, condition 3A), without payment of SAD for the period prior to April 8, 2011. They continued to file the Bills of Entry by claiming the same exemption even after April 2008. If the exemption was not available to them, then the Customs authorities should have pointed out the same and raised the query. Instead, we observe that the Bills of entry filed by the CHA were cleared without raising any query by the officers. Thus, the appellant-CHA cannot be held responsible for the wrong claim of the benefit of the exemption as provided under the Notification No. 12/2012-Cus. Accordingly, the penalty imposed on the CHA under Section 112(a)(ii) of the Act is not sustainable and hence, the same is set aside. The ld. adjudicating authority could not find any valid reason for imposing penalty on the said five persons of the company and hence dropped the proceedings against the said officials. There are no infirmity in the impugned order dropping the proceedings against the said persons. Conclusion - The appellant-importer is liable to pay interest for the delay in payment of SAD. The interest already paid by the appellant-importer is appropriated against this liability. The goods imported by the appellant-importer are not liable for confiscation. The penalty imposed on the appellant-importer under Sections 114A and 114AA of the Customs Act, 1962 is set aside. The penalty imposed on the CHA under Section 112(a)(ii) of the Customs Act, 1962 is set aside. All the appeals are disposed of.

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• Corporate Laws

• 2025 (1) TMI 436
  Seeking suspension of the LOC - whether the apprehensions raised by the investigative agencies justify the continued imposition of restrictions on Petitioner s right to travel? - HELD THAT:- A Look Out Circular serves as a preventive measure to restrict an individual from leaving the country, particularly when there are reasonable grounds to believe that such departure may hinder legal proceedings or jeopardize investigations into serious transgressions. While the issuance of an LOC aims to safeguard the interests of justice, it must be reconciled with the constitutional guarantees of personal liberty. The right to travel abroad has been recognized as an integral aspect of the right to life and personal liberty enshrined under Article 21 of the Constitution of India. The principle of res judicata, enshrined in Section 11 of the Code of Civil Procedure, 1908, precludes a Court from adjudicating an issue that has been directly and substantially decided in a prior proceeding between the same parties. However, the doctrine of res judicata does not rigidly apply to writ proceedings, especially in cases where ongoing violations of fundamental rights are alleged. Even the principle of constructive res judicata which is often applied to ensure judicial finality, cannot prevent the enforcement of fundamental rights when the cause of action has undergone change. When subsequent developments alter the factual or legal matrix, courts retain the flexibility to revisit and adjudicate such matters to ensure justice. In the present case, while Petitioner s earlier request for suspension of the LOC in W.P.(Crl.) 2332/2022 was declined, the doctrine of res judicata cannot mechanically bar the current petition. This is because the dismissal of the earlier writ petition was premised in the nascent stage of the SFIO investigation and the preliminary nature of the proceedings under the Black Money Act at that time. However, the circumstances prevailing at the time of adjudicating W.P.(Crl.) 2332/2022 have significantly changed - This assessment is currently under challenge by the Petitioner before the Commissioner of Income Tax (Appeals)-31, New Delhi. Moreover, vide Assessment Order dated 30th March, 2024, the total quantified taxable undisclosed assets of the Petitioner s son, Mr. Shiv Punj, has been assessed at NIL. Proceedings under the RBI Master Circular on Fraud - HELD THAT:- The classification of PLL s account as fraud by IDBI Bank was previously challenged before this Court in W.P.(C) 10796/2020. On 12th May, 2023, this Court set aside the Financial Monitoring Report and the classification of PLL s account as fraudulent. However, this decision was rendered on account of procedural infirmities, resting on the lack of an opportunity of hearing provided to PLL rather than a substantive adjudication on the merits of the allegations. SFIO has correctly contended that the ruling did not exonerate PLL or the Petitioner but was limited to ensuring compliance with principles of natural justice. While these proceedings signal the gravity of the allegations, they remain at a preliminary stage. As of now, no formal complaint has been filed by IDBI Bank, nor any FIR has been registered against the Petitioner or PLL. This lack of conclusive action demonstrates that the allegations have yet to translate into definitive findings of wrongdoing - In the instant case, in absence of any definitive findings or legal proceedings, an imminent risk warranting the continuation of the LOC against the Petitioner cannot be established. Status of SFIO Investigation - HELD THAT:- SFIO possesses the mechanism to obtain evidence independently, including through forensic analyses of PLL s financial accounts. The liquidator of PLL, appointed during the liquidation proceedings, holds custody of all relevant company records, which are readily accessible to the SFIO for their investigation. It is also noteworthy that the investigating agencies are already apprised of the Petitioner s foreign assets, leaving little room for concealment or evasion. Crucially, there have been no credible allegations of evidence tampering, witness intimidation, or any conduct by the Petitioner that could potentially derail the investigation. In such circumstances, the indefinite continuation of the LOC imposed on the Petitioner cannot be justified. As observed in multiple judgments, including MANEKA GANDHI VERSUS UNION OF INDIA [ 1978 (1) TMI 161 - SUPREME COURT ] any restriction on personal liberty must meet the test of proportionality and be reasonably connected to the legitimate - while the SFIO s concerns regarding the gravity of the allegations cannot be dismissed outright, investigations must not become an instrument for imposing indefinite constraints on an individual s fundamental rights, particularly when no substantive evidence has been presented to establish non-cooperation or obstruction by the Petitioner. Discharge from Personal Guarantees. Furthermore, an application filed by the Union Bank of India under Section 95 of the Insolvency and Bankruptcy Code, 2016, seeking to invoke the Petitioner s personal guarantees, was dismissed by the NCLT in its order dated 10th January, 2024. The NCLT s relied on the DRT s findings, which had already discharged the Petitioner from his personal guarantees. Conclusion - The right to travel abroad, being an essential component of the right to personal liberty under Article 21 of the Constitution, cannot be curtailed arbitrarily or indefinitely. Restrictions such as an LOC must pass the test of proportionality and necessity, ensuring that they are imposed only when supported by credible material. In the present case, while the State s interest in investigating allegations of financial impropriety is undeniable, this Court finds that the absence of tangible material on record of the Petitioner s intent to abscond or tamper with the investigation tilts the balance in favour of permitting conditional travel - The permission to travel abroad given in this order shall be subject to all other applicable conditions and shall not be deemed as a direction to any other authority. In case any of the afore-noted conditions are violated, the security shall be forfeited. The present petition is disposed of.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 435
  Admission of section 7 application - Prayer for initiation contempt proceedings for violation of order - time limitation - HELD THAT:- The present Contempt Application has been filed on 16.06.2024, i.e. within a period of one year, the Contempt Application, which alleges violation of order dated 13.01.2021 by the order of Adjudicating Authority dated 24.08.2023 needs to be heard on merits, it having been filed within one year from passing of the order dated 24.08.2023. It is proceeded to consider the Contempt Application filed by the Applicant on merits. The Applicant has rightly filed Application with respect to other Projects, i.e. Sneh Project and Samhita Project for deciding upon the CIRP cost of the Applicant, which Application was wrongly rejected by the Adjudicating Authority. It is submitted that the Adjudicating Authority while passing the order dated 24.08.2023 for initiating CIRP with regard to Project Samhita of the CD, has violated the order dated 13.01.2021. Hence, both the Members of the Adjudicating Authority, who are Respondent Nos.1 and 2 need to be proceeded under the Contempt of Courts Act, 1971. The Applicant submits that the present RP, who is appearing in CP(IB) No. 84 of 2019 is misconducting himself and not taking steps to pay the CIRP costs to the Applicant. Various fraudulent activities are being undertaken by present RP - Shri K.P. Raju. The Applicant submits that order dated 24.08.2023, by which the CIRP has been initiated against another Project of CD, i.e. Samhita Project is in violation of order dated 13.01.2021. Hence, both the Members of the Adjudicating Authority be proceeded under the Contempt of Courts Act. The law is well settled that civil contempt under Section 2(b) of the Contempt of Courts Act must be wilful and where there is deliberate flouting of the orders of the Court, the Court may initiate action. On looking into the facts of the present case, the Adjudicating Authority has passed order dated 24.08.2023 on an Application filed by Apartment Buyer s Consumer Association seeking initiation of CIRP with respect to Project Dreamz Samhita. The Adjudicating Authority after finding debt and default has admitted Section 7 Application and directed the CIRP to commence with respect to Project Dreamz Samhita. While admitting Section 7 Application, which was filed by Financial Creditors in a class, no contempt can be said to have been committed by the Adjudicating Authority, who was exercising its statutory jurisdiction under Section 7 of the IBC, while admitting Section 7 Application filed by the Financial Creditors in a class. It has already been held by Adjudicating Authority and affirmed by this Tribunal that Applicant for his unpaid CIRP costs has to approach in CP(IB)No.84/BB/2019 in which CIRP, the Applicant was appointed as RP by order dated 17.12.2019, which order was subsequently set aside on 13.01.2021 by this Tribunal. In the present case, the facts and sequence of events and various orders passed have already been noticed above and it is clear that Adjudicating Authority while passing the order dated 24.08.2023 has not disobeyed any directions, nor circumvented any proceedings. Conclusion - Thus, no contempt has been committed by Adjudicating Authority in admitting Section 7 Application by order dated 24.08.2023 with respect to Project Samhita of the CD. There are no ground to initiate any contempt proceedings against the Adjudicating Authority. The Contempt Application is devoid of any merit and is accordingly dismissed.

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• PMLA

• 2025 (1) TMI 434
  Money Laundering - proceeds of crime - scheduled offence - ambit and scope of exercise of inherent power of this Court saved under Section 482 Cr. P.C. for quashing of a complaint/FIR - HELD THAT:- The consistent view of the Constitutional Courts that it is neither possible not desirable to lay down any inflexible rule which would govern the exercise of inherent jurisdiction and no legislative enactment dealing with procedure can provide for all cases that may possibly arise, thus suggesting that the courts have inherent powers apart from provisions of law which are necessary for proper discharge of functions and duties imposed upon them by law. That is the doctrine which finds expression in Section 482 Cr. P.C. which merely recognises and preserves the inherent power of the High Court to do the right and to undo the wrong in the course of administration of justice on the principle that when the law gives a person anything, it gives him that without which it cannot exist and that the inherent power is exercised ex debito justitiae to do real and substantial justice for the administration of which alone the courts exist and that the authority of court exists for advancement of justice and if any attempt is made to abuse the authority so as to produce injustice, the court has power to prevent abuse and that it would be an abuse of process of court to allow any action which would result in injustice and prevent promotion of justice and that in exercise of powers, the court would be justified to quash any proceeding if it finds that the initiation/continuance of it amounts to abuse of process of court or quashing of these proceedings would otherwise serve the ends of justice. Perusal of the record tends to show that initially the investigation in the matter was initiated by the ACB upon registration of FIR 4/2020 under the J K Prevention of Corruption Act, wherein crux of the composite allegations against the petitioners in both the petitions was that the Society was falsely created which succeeded in obtaining the loan from the Bank on a false premise, which loan had been sanctioned by the Bank illegally and fraudulently without following Standard Operative Procedure, proper documentation, KYC norms, inasmuch as without obtaining tangible security and that the whole exercise had been undertaken by the accused persons including the petitioners herein at the behest and instance of Chairman of the Bank being petitioner, who was alleged to be the kingpin in the whole affair and upon completion of the investigation in the said FIR, charge-sheet came to be laid before the competent court against the petitioners, which is pending trial and whether the accused persons including the petitioners herein committed a scheduled offence is for the court of competent jurisdiction to decide. Further perusal of the record tends to show and as has been noticed in the preceding paras, admittedly no money was transferred to the accounts of the petitioners herein, therefore, there was no occasion for the petitioners herein to indulge in any activity associated with the so called proceeds of crime as the money that has been released out of the sanctioned loan, which is described as the proceeds of crime in the complaint, had admittedly been transferred/credited directly into the accounts of the land owners and the petitioners herein had never been in possession or control of the said money, which is alleged to have been laundered - In the instant case, proceeds of crime in favour of the petitioners would have arisen only had the petitioners developed the plots in the colony and sold them to earn profit in the process, in that, the said profits would have been the proceeds of crime and any activity related to such profits may have resulted in money-laundering, which stage in the instant case has not reached. Conclusion - None of the ingredients of the offence of money-laundering against the petitioners herein is found to be existing in the present case, more so in view of the fact that an act of mortgaging the property with the Bank for securing the loan that is said to have been obtained fraudulently without following Banking rules and regulations cannot by any stretch of imagination be termed as money-laundering and that the act of the petitioners herein of having fraudulently secured loan for development and establishment of satellite township by submitting false documents, at the most makes out a case for forgery or Bank fraud. Petition allowed.

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• Service Tax

• 2025 (1) TMI 433
  Classification of services - business auxiliary services or not - case of Revenue is that the Tribunal ought to have appreciated that the services rendered by the appellant cannot be treated as business auxiliary services - HELD THAT:- The Tribunal, inter alia, has held that the business auxiliary services at the relevant period included the services related to promotion or marketing or sale of goods produced or provided by or belonging to the client. The agreements which have been entered into by the appellant clearly state that it has been employed as promoter of the products of its clients. It has further been found that the appellant is required to promote and market the goods to the sole customer, namely APBCL. The Tribunal after taking into account the provisions of the agreement, has recorded the finding that the services rendered by the appellant are business auxiliary services. The aforesaid finding is a finding of fact which has been arrived at by the Tribunal by assigning valid and cogent reasons. The aforesaid finding of fact cannot be termed as perverse - no substantial question of law arises for consideration in this appeal. Conclusion - The agreements which have been entered into by the appellant clearly state that it has been employed as promoter of the products of its clients. The services provided by the appellant were classified as business auxiliary services. Thus, no substantial question of law arises for consideration in this appeal - appeal dismissed.

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• 2025 (1) TMI 432
  Levy of service tax - Business auxiliary services - income from sponsorship from sports associations - SCN was issued demanding Service Tax without specifying any particular category of service under which the Service Tax was payable - scope of SCN - demand of interest and penalty. Levy of service tax - Sponsorship services - HELD THAT:- The Show Cause Notice has been issued on the basis of the information available in the balance sheet of the Appellant for the years 2010-11 and 2011-12. The Appellant has shown the income under the category of income from sponsorship from sports associations . As per Rule 2(1)(d)(vii), Service Tax on the amount sponsored is liable to discharged by the person who sponsors the programme, under reverse charge mechanism. Thus, in respect of sponsorship service, the liability is not on the Appellant. Consequently, the demand of Service Tax from the Appellant under sponsorship service is not sustainable. Levy of service tax - Business auxiliary services - scope of SCN - HELD THAT:- In the Order-in-Original, the ld. adjudicating authority has confirmed the demand of Service Tax under the category of business auxiliary service, which was not there in the Show Cause Notice. Thus, ld. adjudicating authority has gone beyond the scope of the Show Cause Notice and confirmed a demand which was not raised in the Show Cause Notice. Accordingly, the demand confirmed in the Order-in-Original, which was upheld by the Ld. Commissioner (Appeals) in the impugned order, is not sustainable as the Show Cause Notice has not specified the Service Tax payable under any particular category of service. Demand of interest and penalty - HELD THAT:- Since the demand itself is not sustainable, the question of demanding interest and imposing penalties does not arise. Conclusion - In respect of sponsorship service, the liability is not on the Appellant. As regards Business Auxiliary service, Show Cause Notice must specify the category of service for a demand to be sustainable. The ld. adjudicating authority has gone beyond the scope of the Show Cause Notice and confirmed a demand which was not raised in the Show Cause Notice. Appeal allowed.

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• 2025 (1) TMI 431
  Refund claim - rejection of refund on the ground of time-bar holding that the payment of Service Tax was made on 03.06.2014 and the refund claim was filed by the claimant on 21.03.2016, which is beyond the period of one year fixed for filing of a refund application in terms of Section 11B of the Central Excise Act, 1944 as made applicable to Service Tax by virtue of Section 83 of the Finance Act, 1994. HELD THAT:- The Appellant have not submitted any evidence before the original authority or the appellate authority to substantiate their claim that they had undertaken construction of road work. Thus, the claim of the Appellant that they are not liable to pay Service Tax in terms of Notification No. 25/2012-S.T. dated 20.06.2012 [Entry No.13(a)] has not been established or affirmed by any order. The Appellant cannot merely claim that they have rendered construction of roads and bridges and thus eligible for exemption under Notification No. 25/2012-S.T. dated 20.06.2012. In the absence of any order allowing the benefit of Notification No. 25/2012-S.T. dated 20.06.2012 to the Appellant, it is found that the Appellant cannot claim the refund suo moto without producing any corroborative evidence. Conclusion - The refund claim was filed by the Appellant on 21.03.2016, which is beyond the period of one year prescribed under Section 11B of the Central Excise Act, 1944 as made applicable to Service Tax by virtue of Section 83 of the Finance Act, 1994. Since the Appellant has paid the amount as Service Tax, the refund claim, if any, has to be filed as per the time-limit provided under Section 11B of the Central Excise Act,1944. As the Appellant has not filed the refund claim within the period of one year as prescribed under Section 11B of the Act, the lower authorities have rightly rejected the refund claim on the ground of limitation. There are no infirmity in the impugned order upholding the rejection of the refund claim filed by the Appellant and accordingly, the appeal filed by the Appellant is liable to be rejected - the appeal filed by the Appellant stands rejected.

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• 2025 (1) TMI 430
  Levy of service tax - GTA service or cargo handling service - services provided by the appellant under separate contracts for loading, unloading, shifting, and transportation of iron ore - composite service or not - HELD THAT:- the appellant is basically carrying out the activity of loading of iron ore and shifting the same as per the direction of their client, and unloading the same at the other end. The major portion of the contract is towards transportation of the goods. Admittedly, the appellant has been given two different contracts towards loading/shifting and towards transportation of the iron ore - However, it is seen that this arrangement is more in the nature of a convenience so as to make the payments part by part to the appellant for the activities undertaken by them. By such different contracts themselves, the Revenue cannot come to the conclusion that the entire activity would amount to cargo handling service. This Bench in the case of M/S MAA KALIKA TRANSPORT PRIVATE LIMITED VERSUS COMMISSIONER OF CGST CENTRAL EXCISE, ROURKELA, ROURKELA [ 2023 (7) TMI 435 - CESTAT KOLKATA] has gone through a similar issue and has held ' We observe that the contract is a composite contract primarily for the purpose of transportation of coal beyond 180 to 200 KM. The activities like loading, unloading, obtaining delivery orders etc. are incidental or ancillary to the transportation service. The contract has not provided any separate charges for these activities. The composite contract cannot be vivisected to arrive at the value of service for each activity artificially.' It is found that for the period from 2010-11 to 2011-12, the Ld. Commissioner (Appeals) has got the documents verified and has found that the goods in question were actually exported by M/s. Rungta Mines Ltd. Accordingly, he has set aside the demands for the said period - the confirmed demand does not survive. Time limitation - HELD THAT:- There are substantial force in the appellant s claim that the confirmed demand for the extended period is hit by time-bar. The appellant is duly registered with the Service Tax Department and admittedly, have been paying Service Tax as well as filing their S.T.-3 Returns. Even the data towards turnover on account of these activities has come to light only on the basis of the Income Tax Returns and P L Account maintained by the appellant. This shows that there has been no attempt on the part of the appellant to suppress any fact - the appellant genuinely believed that no Service Tax was required to be paid on this service. Therefore, they were neither charging the same on their client nor collecting the same and nor paying the same to the Service Tax Department. In view of this factual evidence brought in by the appellant, it is found that the confirmed demand for the extended period is legally not sustainable, on account of time bar - the confirmed demand set aside in respect of the extended period on account of time bar also. Conclusion - The composite contract cannot be vivisected to arrive at the value of service for each activity artificially. Revenue cannot come to the conclusion that the entire activity would amount to cargo handling service. There has been no attempt on the part of the appellant to suppress any fact, demand not sustainable on the ground of time bar also. Appeal allowed.

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• 2025 (1) TMI 429
  CENVAT Credit - denial of credit on the ground that appellant had availed and utilized Cenvat credit on input services on the strength of invoices which were not addressed to its registered premises as per Rule 4A(1) of the Service Tax Rules, 1994 read with Rule 9(2) of Cenvat Credit Rules, 2004 - HELD THAT:- This issue is no more res integra and the Tribunal in various decisions has consistently held that Cenvat credit cannot be denied on procedural irregularities. Reliance can be placed in SPICE DIGITAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH [ 2023 (5) TMI 196 - CESTAT CHANDIGARH] where it was held that ' the availment based on invoices issued by input service distributor prior to registration under Service Tax (Registration of Special Category of Persons) Rules, 2005 is only procedural irregularity and hence the denial of credit is bad in law.' Further, it is found that in the case of M/S RAJENDER KUMAR ASSOCIATESS VERSUS COMMISSIONER OF SERVICE TAX, DELHI-II [ 2020 (11) TMI 621 - CESTAT NEW DELHI] , Hon'ble CESTAT has held that registration of the premises is not a condition for availing cenvat credit. In this order. Hon'ble CESTAT has relied upon Hon'ble Karnataka High Court's ruling, in MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [ 2011 (9) TMI 450 - KARNATAKA HIGH COURT] that there is no requirement in law that the premises should be registered for availing cenvat credit. Conclusion - Substantial benefit cannot be denied because of procedural irregularity. The impugned orders are not sustainable in law therefore set aside - appeal allowed.

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• 2025 (1) TMI 428
  Classification of services - renting of immovable property service or storage and warehousing services? - providing storage and warehousing services to the Food Corporation of India (FCI) mainly for storage of agriculture produce - HELD THAT:- The appellant is not liable to pay service tax under the category of renting of immovable property service . Here it is pertinent to reproduce the relevant findings of the Tribunal in the appellant s own case PUNJAB STATE WAREHOUSING CORPORATION VERSUS CCE, CHANDIGARH [ 2018 (2) TMI 154 - CESTAT CHANDIGARH] where it was held that ' the appellants are engaged in the activity of providing of space for storage and warehousing as well as keeping the records thereof and providing insurance security service. As the appellant is providing various other services apart from the space for storage, therefore, the services appropriately fall under the category of Storage and Warehousing Services. Further, as these services are for agricultural produce, which is not in dispute, therefore, the appellant is not liable to pay service tax on Storage and Warehousing which has been exempted from service tax as per section 65 (105) (zzza) of the Finance Act, 1994.' Conclusion - The appellants are engaged in the activity of providing of space for storage and warehousing as well as keeping the records thereof and providing insurance security service. The impugned order set aside - appeal allowed.

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• 2025 (1) TMI 427
  Levy of service tax - clearing and forwarding agency service for the period 2010-11 to 2013-14 - SCN has been issued on the basis of the difference between the figures found in the balance sheet and S.T.-3 Returns - suppression of facts or not - Demand of Service Tax under the category of GTA service - Appellant's failure to register and file returns under this category during the relevant period - Levy of penalty. Levy of service tax - clearing and forwarding agency service for the period 2010-11 to 2013-14 - SCN has been issued on the basis of the difference between the figures found in the balance sheet and S.T.-3 Returns - suppression of facts or not - HELD THAT:- As the Appellant had been filing their Returns regularly under the category of clearing and forwarding agency service, it is found that they have not suppressed any information from the Department. If there is any short payment of Service Tax under this category, then the demand should have been raised within the normal period of limitation - the demand of Service Tax confirmed in the impugned order by invoking the extended period of limitation under the category of clearing and forwarding agency service is not sustainable. The Appellant is liable to pay Service Tax for the normal period of limitation confirmed in the impugned order. As there is no suppression of fact with intention to evade the tax established in this case, no penalty is imposable for the demand confirmed under this category for the normal period of limitation. Demand of Service Tax under the category of GTA service - Appellant's failure to register and file returns under this category during the relevant period - HELD THAT:- The Appellant had not taken registration under the category of GTA service and not filed Returns in respect of this category. It is on record that the Appellant had been collecting Service Tax under the category of GTA service and had been paying Service Tax under the category of GTA service, but had not filed returns to that effect under the said category. The Appellant has suppressed information regarding collection of Service Tax by them under the category of GTA service and not paid appropriate Service Tax to the Department. Hence, the extended period of limitation has been rightly invoked to demand Service Tax under the category of GTA service. Therefore, the Appellant is liable to pay Service Tax of Rs.4,31,764/-, along with interest, under the category of GTA service. Levy of penalty - HELD THAT:- The Appellant had taken registration under the category of GTA service only on 04.09.2013. Hence, penalty has been rightly imposed on them under Section 77 of the Finance Act, 1994. Accordingly, the penalty imposed for non-registration under Section 77 of the Finance Act, 1994 upheld. Conclusion - (i) The demand of Service Tax under the category of clearing and forwarding agency service for the extended period of limitation is set aside. The Appellant is liable to pay Service Tax for the normal period of limitation. No penalty shall be imposable for the demand confirmed under this category for the normal period of limitation. (ii) The issue is remanded back to the adjudicating authority for the purpose of quantification of the demand under the category of clearing and forwarding agency service . (iii) The Appellant is liable to pay the Service Tax of Rs.4,31,764/-, along with interest, under the category of GTA service. They are also liable to pay penalty equal to the amount of tax confirmed under Section 78 of the Finance Act, 1994. (iv) The penalty imposed under Section 77 of the Finance Act, 1994 is upheld. Appeal disposed off.

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• 2025 (1) TMI 426
  Non-payment of service tax - Construction Service - exemption from payment of service tax as per entry no. 13 of N/N. 25/2012 dated 20.06.2012 - HELD THAT:- It is observed that the findings of the ld. adjudicating authority reproduced are legally not sustainable. He cannot ignore the verification report submitted by his own officer without any valid reason. He cannot say that the report is not acceptable to him without any reason to counter the findings of the Superintendent in the said report. It is thus observed that the ld. Adjudicating authority has not examined the claim of the appellant that they rendered the services of construction of road, bridge, etc., and the said services are exempted from payment of service tax as per entry no. 13 of Notification No. 25/2012 dated 20.06.2012. The Ld. Commissioner has not given any finding in the impugned order on this claim of the appellant. Hence, the demand confirmed in the impugned order, without verifying the eligibility of the said Notification benefit to the appellant, is liable to be set aside. Conclusion - The adjudicating authority must thoroughly verify exemption claims and cannot disregard internal reports without justification. The adjudicating authority should give an opportunity to the appellant and examine the claim made by the appellant based on the documentary evidence, within a period of four months from the date of receipt of this order - appeal allowed by way of remand.

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• Central Excise

• 2025 (1) TMI 425
  Clandestine removal - whether CESTAT was justified in upholding the order of the Commissioner (Appeals) in which the appellant's challenge to the original order was dismissed based on the appellant's voluntary participation in the Kar Vivad Samadhan Scheme? - HELD THAT:- From the material available on record, it is evident that during pendency of the appeal against the order passed in original proceeding, the appellant with its eyes wide open had applied under the Scheme. Thereafter, the appellant paid the amount due under the Scheme and produced the certificate of payment. The Commissioner (Appeals) therefore was justified in dismissing the appeal preferred by the appellant on the ground that appellant is not entitled to challenge the order dated 28.10.1997. Despite several opportunities the appellant did not even appear before the Tribunal. The Appellate Tribunal by assigning valid and cogent reasons had affirmed the order passed by the Commissioner (Appeals). The orders impugned in this appeal do not suffer from any infirmity. Conclusion - The order passed by the Commissioner (Appeals) does not suffer from any infirmity, as the appellant itself had opted for settlement under the Scheme and the amount was paid accordingly. Appeal dismissed.

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• 2025 (1) TMI 424
  Clandestine manufacture and removal - circumstantial evidence are clearly brought out or not - evasion of duty is clearly established beyond doubt or not - whether the Tribunal can ignore binding admissions made by the managing partner of the respondent firm and its sole distributors and various other traders? - HELD THAT:- So far Section 9D (1) (a) of the Excise Act is concerned, it has no application in the instant case. Sub-section (1) (a) can be pressed into service (a) when person who had given the statement is dead, (b) when he cannot be found, (c) when he is incapable of giving evidence, (d) when he is kept out of the way by the adverse party and (e) when his presence cannot be secured without an amount of delay or expense, which officer considers unreasonable. In the considered opinion of this Court, this provision is based on doctrine of necessity. Admittedly, in the instant case, sub-section 1 (a) of Section 9D of the Excise Act has no application. The judgment of Jharkhand High Court in Bihar Foundry Casting Ltd s [ 2022 (3) TMI 694 - JHARKHAND HIGH COURT] makes it clear that the statement recorded by the Gazetted Central Excise Officer during enquiry or investigation is in a quasi criminal proceeding. In this view of the matter, the word prosecution needs to be understood. The proceeding may lead into imposition of penalty. In some cases, it may also result into prosecution . The view taken by Division Bench of Jharkhand High Court in Bihar Foundry Casting Ltd. Thus, it is unable to persuade ourselves with the line of argument of revenue that because of use of the word prosecution in Section 9D of the Excise Act, the requirement of producing evidence in adjudication proceeding can be done away with. It is clear like noon day that the incriminating material/statements recorded behind the back of the petitioner cannot be used against him, unless, such witnesses are produced in adjudication proceedings and they were permitted to be cross-examined by the petitioner. Conclusion - In the teeth of Section 9D (1) (b) of the Excise Act, unless, the incriminating material and witnesses are produced in the adjudication proceedings and are permitted to be cross-examined by the assessee, the said incriminating material cannot be used against the assessee. Appeal dismissed.

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• 2025 (1) TMI 423
  CENVAT credit of additional duty of customs (SAD) availed by the Appellant can be demanded due to failure on the part of the Appellant to comply with Rule 3(5) of Cenvat Credit Rules, 2004 or not - suppression of facts or not - extended period of limitation. HELD THAT:- The fact that the said items were imported inputs cleared 'as such' as established by the investigation by correlating the part number indicated in the invoices with those reflected in the Bills of Entry under which the said items were imported. Therefore, there has been a continuous attempt on the part of assessee to misrepresent and suppress the facts deliberately with the intention to avoid payment of the amount availed as CENVAT Credit at the time of 'as such' clearances. Thus, Appellant is liable to be imposed with penalty as held by the Adjudication authority. Extended period of limitation - HELD THAT:- As per the finding in the impugned order, the Adjudication authority held that the facts regarding inputs cleared 'as such' was established by investigation. However as evident from the ER-1 return submitted by the Appellant and as per the invoices relied in the impugned order, Appellant had clearly mentioned in the invoice that the goods are cleared 'as such'. Facts being so, there is no reason to allege that the Appellant has suppressed the facts regarding removal of inputs 'as such' and it was not established by way of investigation by the Department. Hence, the impugned order is not tenable on limitation. Reversal of Cenvat credit on 'as such' clearances - HELD THAT:- The case of the department is that they have not reversed the Cenvat credit taken of the SAD amounts, on their 'as such' clearances. However as per Rule 3(5) of Cenvat Credit Rules, 2004 when the goods are cleared as such they have to either reverse the Cenvat credit availed on such goods or pay duty equivalent to the Cenvat credit availed on such goods. In this case the appellant paid duty which was higher than the reversable Cenvat credit. Hence, there is no Revenue loss. Conclusion - i) There has been a continuous attempt on the part of assessee to misrepresent and suppress the facts deliberately with the intention to avoid payment of the amount availed as CENVAT Credit at the time of 'as such' clearances. Thus, Appellant is liable to be imposed with penalty as held by the Adjudication authority. ii) There is no reason to allege that the Appellant has suppressed the facts regarding removal of inputs 'as such' and it was not established by way of investigation by the Department. Hence, the impugned order is not tenable on limitation. iii) In this case the appellant paid duty which was higher than the reversable Cenvat credit. Hence, there is no Revenue loss. Appeal allowed.

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• 2025 (1) TMI 422
  Method of valuation of job-worked goods - it appeared that the value adopted by the Appellants by considering the cost of materials plus conversion cost, was not in accordance with Rule 10A (iii) read with Rule 8 of Central Excise Valuation Rules, 2000 (CEVR) resulting in short payment of duty - HELD THAT:- The Appellants have manufactured HDPE Plastic Caps on job work basis and have paid duty on the assessable value worked out by taking into account the cost of materials plus conversion cost. The principal manufacturer (M/s. Marico) used the caps for fitment onto bottles, in its factory, for filling coconut oil. The department therefore contends that after 01.04.2007 the valuation should be done applying Rule 10A(iii) r/w Rule 8 of Central Excise Valuation Rules which applies when goods are not sold. The appellant does not captively consume the goods nor does M/s. Marico consume it on behalf of appellant. The very same issue has been considered by this Tribunal in the Appellants case [ 2018 (2) TMI 139 - CESTAT CHENNAI ] following the judgement in the case of M/s. Advance Surfactants India Ltd. Vs CCE, Mangalore [ 2011 (3) TMI 1380 - CESTAT, BANGALORE ], where it was held that ' it is undisputed that LABSA is manufactured by job worker and cleared to HUL for further consumption and the said LABSA is the intermediate product required by HUL which is manufactured or produced by the appellant as a job worker. The key words in Rule 8 that needs to be interpreted are consumption by an assessee or on his behalf for applying the said Rule for arriving at valuation or determination of goods. In the case in hand, it is very clear and not disputed that the appellant is not consuming the said LABSA nor is it consumed on his behalf by HUL. In our considered view, the provisions of Rule 8 will not get attracted in this case.' Conclusion - Rule 8 of the CEVR applies only when goods are consumed by the assessee or on their behalf, and that valuation should be based on the cost of materials plus job work charges when these conditions are not met. The demand confirmed is not legally sustainable and requires to be set aside - Appeal allowed.

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• 2025 (1) TMI 421
  CENVAT credit can be availed by the Gurgaon unit of the appellant when the invoices had been inadvertently addressed to the Bangalore office - Extended period of limitation - HELD THAT:- The appellant is presently the only unit engaged in the manufacture of the said goods and it s another unit at Bangalore which was operative has closed down from April 2007. It is also found that it is not in dispute that the service tax under reverse charge has been paid by the Gurgaon unit and GAR-7 challan also mention the address of the Gurgaon unit and payment has also been made by the appellant and therefore, the Gurgaon unit is eligible to avail CENVAT credit in respect of these invoices. Further, the appellant has produced on record the service tax payment challan which is a valid document for availment of CENVAT credit in terms of Rule 9(1)(e) of CENVAT Credit Rules. It is found that in the present case, the input services could not have been used by any other unit other than the Gurgaon unit being the only manufacturing unit and moreso, when they have discharged the service tax liability under reverse charge, it has been consistently held in the decisions relied upon by the appellant that CENVAT credit can be availed on the basis of challan evidencing payment of duty. The Department has not been able to establish suppression on the part of the appellant with intent to evade payment of service tax and therefore, the invocation of extended period of limitation is not justified in the present case. The impugned order is not sustainable in law - Appeal allowed.

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• 2025 (1) TMI 420
  Valuation for stock transfers to sister units - Short payment of duty due to under valuation - Excess payment of duty due to over valuation of finished goods - Excess duty payment resulted in 'excess' refund not falling under impugned notification - reversal of refund being excess - area- based exemption under N/N. 56/2002-CE dated 14.11.2002 availed - Levy of penalty - HELD THAT:- During the period of dispute from 27.08.2004 to 07.06.2005, the appellant had cleared goods on stock transfer to their sister units at Dadra and Silvasaa but while clearing the goods, it was not possible to determine the cost of production for each removal and therefore, the appellant transfer the stock at pre-determined value based on previous year CAS-4 data and after the cost audit which resulted in over or under valuation when each invoice was taken separately and the same resulted in excess payment or short-payment. It is noted that wherever there was a short payment of duty, the appellant paid it immediately along with interest and in the case of excess payment of duty, the Department has demanded the same as to the extent of excess duty paid where the appellant has availed the excess refund - sub-section (2B) of Section 11A specifically provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). Levy of penalty - HELD THAT:- The short/ excess payment of duty was being made due to provision of Valuation Rules in case of supply to the related party, hence, there is no intention to evade payment of duty because whatever duty paid was available as refund to the appellant and hence there is no intention to evade payment of duty and therefore, no penalty is liable to be imposed. Conclusion - The short/ excess payment of duty was being made due to provision of Valuation Rules in case of supply to the related party, hence, there is no intention to evade payment of duty. The impugned order is not sustainable in law and is therefore set aside - appeal allowed.

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• 2025 (1) TMI 419
  Benefit of N/N. 50/2003-CE dated 10.06.2003 - non-fulfilment of criteria required for availing of the said exemption in as much as they have not commenced commercial production on or before the appointed date i.e. 1.03.2010 - HELD THAT:- The department has tried to establish the case on the basis of the visit of the central excise offices on 06.04.2010 and certain conclusions drawn on the basis of circumstances and thus comes to a conclusion that commercial production would not have been commenced from 31.03.2010. It is also mentioned that raw material/parts of galvanization pipes were purchased vide invoices dated 09.04.2010, 19.04.2010 and 04.09.2010, and, therefore, no production could be started on 31.03.2010. It is found that Superintendent, Central Excise Range, Bilaspur, issued certificate dated 29.07.2010 certifying that the unit of the appellant was working and availing exemption under Notification No. 50/2003- CE. It is pertinent to note that the said certificate was later than the date of visit of the officers. It is failed to understand as to why the Commissioner relied on one set of evidence while ignoring the report of the superintendent, when both evidences are by the department itself. The appellant s submits on the basis of available CENVAT credit is also not considered by the learned adjudicating authority. In view of the categorical certification by the Range Superintendent that the unit has been operational as on 31.03.2010, availing exemption and due to the fact that the allegation of clandestine production and sale has not been evidenced and even a minimum level of investigation into the transportation and financial transactions of excisable goods, was conducted, it is opined that the issue needs to travel back to the original authority for a fresh consideration of all the issues relevant to the case after taking into account the submissions of the appellants and on verifying the available evidence in the form of documents and after giving due opportunity to the appellants in the interest of natural justice. Conclusion - It is failed to understand as to why the Commissioner relied on one set of evidence while ignoring the report of the superintendent, when both evidences are by the department itself. The appeal is allowed by way of remand and it is directed that the order in remand to be passed within 16 weeks of the receipt of this order, as far as possible.

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• 2025 (1) TMI 418
  Classification of Dumpers/Trippers - to be classified under tariff sub heading 87051090 as special type vehicles or as Dumpers/Trippers under sub-heading 87041010 and 87041090? - whether the appellant is entitled for the benefit of notification no. 6/2002-CE dated 01.03.2002 and notification no. 6/2006 CE dated 01.03.2006 or not? HELD THAT:- The claim of the appellant is that during the course of investigation, they have already paid an amount equal to 29 lakhs whereas the Cenvat Credit involved is Rs. 13,78,470/- - as the appellant has already reversed the Cenvat Credit attributable to the goods cleared without payment of duty taking the benefit of notifications, the condition of notification has been fulfilled by the appellant. The contention of the Revenue in this case is that if it is not detected, the appellant would not have reversed the Cenvat Credit, therefore, they are not entitled for benefit of notifications. The said contention is not sustainable, as appellant has reverse the Cenvat Credit during investigation itself before issuance of the Show Cause Notice. Conclusion - The Cenvat Credit is attributable to the goods cleared by the appellant without payment of duty claiming the benefit of notification no. 6/2002 CE dated 01.03.2002 and notification no. 6/2006 CE dated 01.03.2006 reversed Cenvat Credit attributable to the other goods used in manufacture of those goods along with interest. The appellant is entitled for the benefit of notification no. 6/2002 CE dated 01.03.2002 and notification no. 6/2006 CE dated 01.03.2006. No penalty is imposable on the appellants. Appeal disposed off.

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• 2025 (1) TMI 417
  Refund claim - CENVAT Credit for goods cleared under exemption Notification No. 4/2006-CE for export - Applicability of rule 6(6)(v) of CCR - HELD THAT:- In the present case the appellant have reversed the amount in terms of Rule 6(3) in respect of the exempted goods under Notification No. 4/2006-CE and cleared for export and for the said reversal the appellant filed the refund claim. On the identical issue in the appellant s own case where the revenue had demanded the amount under rule 6(3) in respect of the similar nature of export this tribunal vide order no. 11450-11451/2023 dated 07.07.2023 [ 2023 (7) TMI 360 - CESTAT AHMEDABAD] held that the appellant was not required to pay an amount under rule 6(3) of Cenvat Credit Rules even though the goods are exempted under Notification No. 4/2006-CE for the reason that the said notification is conditional one. The appellant have reversed the Cenvat Credit amount in terms of rules 6(3) therefore claiming refund of the same amount is nothing but seeking a credited of the Cenvat amount. It is a settled law that if any amount of Cenvat is reversed for any reason which is not liable to be reversed the same can be recredited in the Cenvat account if the amount is reversed from Cenvat account. If the said amount was reversed from the cash the appellant is entitled for the cash account. Therefore, the contention of the revenue that the present refund is not governed by Section 11B is not relevant in the facts in the present case. Conclusion - The exempted goods cleared for export under bond are eligible for Cenvat Credit, and reversal under Rule 6(3) is not justified. The Appellant is not required to pay an amount under Rule 6(3) of Cenvat Credit Rules in respect of the goods exported under Notification No. 4/2006-CE in terms of Rule 6(6)(v) of Cenvat Credit Rules, 2004. The impugned order is not sustainable - Appeal allowed.

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• 2025 (1) TMI 416
  Eligibility (of co-noticee) for waiver of penalty imposed under Rule 26 of the Central Excise Rules, 2002 - main case of M/s Suryansh Trading Company has been settled under SVLDRS- 2019 - HELD THAT:- As per the judgments of not only Single Member Bench but also of the division bench cited by the learned Counsel, it has been held that in case of settlement of case under SVLDRS-2019 against the main party on whom there is duty demand, the co-noticee/co-appellant shall not liable to penalty under Rule 26 of Central Excise Rules, 2002. The one division bench judgment, in the case of Prakash Steeladge Ltd [ 2024 (11) TMI 468 - CESTAT AHMEDABAD ] held that ' the penalties imposed on the co-noticees in a case where the main noticee against whom the demand is confirmed, the case is settled under SVLDRS then in respect of other co-noticees penalty will not sustain even if they have not filed a declaration under SVLDRS-2019 and decision on the issue of SVLDRS-2019 in the case of Four R Associates and others reported as [ 2023 (11) TMI 9 - CESTAT CHENNAI ] given by Single Member Bench whereas the aforesaid cited decisions are given by Division Bench. Therefore, Division Bench judgment will prevail over Single Member Bench.' Conclusion - When a main case is settled under SVLDRS 2019, penalties on co-noticees involved in the same case are not sustainable. The penalty on the appellant is set aside. Appeal is allowed.

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• Indian Laws

• 2025 (1) TMI 415
  Seeking for interim release of a seized vehicle pending the conclusion of a criminal trial - drug trafficking - HELD THAT:- Upon a reading of the NDPS Act, this Court is of the view that the seized vehicles can be confiscated by the trial court only on conclusion of the trial when the accused is convicted or acquitted or discharged. Further, even where the Court is of the view that the vehicle is liable for confiscation, it must give an opportunity of hearing to the person who may claim any right to the seized vehicle before passing an order of confiscation. However, the seized vehicle is not liable to confiscation if the owner of the seized vehicle can prove that the vehicle was used by the accused person without the owner s knowledge or connivance and that he had taken all reasonable precautions against such use of the seized vehicle by the accused person. This Court is further of the opinion that there is no specific bar/restriction under the provisions of the NDPS Act for return of any seized vehicle used for transporting narcotic drug or psychotropic substance in the interim pending disposal of the criminal case. In the absence of any specific bar under the NDPS Act and in view of Section 51 of NDPS Act, the Court can invoke the general power under Sections 451 and 457 of the Cr.P.C. for return of the seized vehicle pending final decision of the criminal case. Consequently, the trial Court has the discretion to release the vehicle in the interim. However, this power would have to be exercised in accordance with law in the facts and circumstances of each case. This Court is of the view that criminal law has not to be applied in a vacuum but to the facts of each case. Consequently, it is only in the first two scenarios that the vehicle may not be released on superdari till reverse burden of proof is discharged by the accused-owner. However, in the third and fourth scenarios, where no allegation has been made in the charge-sheet against the owner and/or his agent, the vehicle should normally be released in the interim on superdari subject to the owner furnishing a bond that he would produce the vehicle as and when directed by the Court and/or he would pay the value of the vehicle as determined by the Court on the date of the release, if the Court is finally of the opinion that the vehicle needs to be confiscated. This Court is also of the view that if the Vehicle in the present case is allowed to be kept in the custody of police till the trial is over, it will serve no purpose. This Court takes judicial notice that vehicles in police custody are stored in the open. Consequently, if the Vehicle is not released during the trial, it will be wasted and suffering the vagaries of the weather, its value will only reduce. Conclusion - In the absence of a specific prohibition under the NDPS Act, the general provisions of the Cr.P.C. could be applied for the interim release of seized vehicles. The appellant was entitled to the interim release of the vehicle, subject to conditions ensuring its availability for trial and preventing its misuse. The present Criminal Appeal is allowed with directions to the trial Court to release the Vehicle in question in the interim on superdari after preparing a video and still photographs of the vehicle and after obtaining all information/documents necessary for identification of the vehicle, which shall be authenticated by the Investigating Officer, owner of the Vehicle and accused by signing the same.

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• 2025 (1) TMI 414
  Dishonour of cheque - vicarious liability of partners of the accused-firm - whether this Court can exercise inherent powers under Section 482 of the Code (Section 528 of the BNSS) for quashing the complaint bearing no. 4971/2020 and impugned order dated 3rd August, 2023? - HELD THAT:- It is imperative to understand the scope of interference of this Court under Section 482 of the Code i.e., Section 528 of the BNSS, wherein, this Court is bestowed with the inherent jurisdiction to exercise its powers to either prevent any abuse of process of law or secure the ends of justice . However, the said terminologies are devoid of any specific definition due to its wide ambit and therefore, the determination as to whether the case falls within the scope of the aforesaid term lies with the Court and must be testified based on the established principles of law. Moreover, under this provision, the Court must exercise its powers sparingly, cautiously and in exigent cases. The Court can exercise its inherent powers under Section 482 of the Code to quash complaints and criminal proceedings emanating therefrom, if it does not constitute a prima facie offence against the accused and the same was elaborately dealt with by the Hon ble Supreme Court in the case of INDIAN OIL CORPORATION VERSUS NEPC INDIA LTD ORS [ 2006 (7) TMI 575 - SUPREME COURT ]. Considering the peculiar factual situation, the demand notice dated 1st September, 2020 issued under Section 138 of the NI Act is within the prescribed time and despite the service of the same on the petitioners, no amount was paid by the petitioners. Therefore, an offence under Section 138 of the NI Act has been made out against the petitioners - Now coming to Section 141 of the NI Act, it is observed that when a company commits an offence under Section 138 of the NI Act, any person who is in charge of or responsible for the conduct of the affairs of the company shall be held guilty of the offence. However, if it is proved that the said offence is committed without the knowledge, the said person cannot be made liable. Therefore, the burden of proving the same lies on such person claiming such defence. It is a settled principle of law that under Section 138 of the NI Act, only a drawer of the cheque is liable for the dishonour of the said cheque. In this case, Mr. Harkaran Singh has issued cheque nos. (a), (b), (d), (e) (g), (h) and (i) in his personal capacity and not in the name of the firm and hence, the petitioners, as partners of the accused-firm, cannot be made to share the liability for the dishonour of said cheques. However, Mr. Harkaran Singh has issued cheque nos. (c) and (f) to the complainant as an Authorised Signatory on behalf of the accused-firm. Therefore, the learned Revisional Court has rightly observed that a prima facie case has already been made out under Sections 138/141 of the NI Act against the petitioners only with respect to cheque nos. (c) and (f). Conclusion - This Court is of the considered view that the learned Revisional Court has not committed any error or illegality in passing the impugned order and therefore, this Court does not find any reason to exercise its inherent powers under Section 482 of the Code to grant the reliefs prayed for. The impugned order passed by the learned Session Judge, South-East District, Saket Courts, New Delhi in criminal revision petition bearing no. 455/2022 is, hereby, upheld - Petition dismissed.

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• 2025 (1) TMI 413
  Power of Arbitral Tribunal to recall/review its orders - discretion of Hon ble Tribunal to condone the delay in filing the SOD and CC - whether sufficient cause existed or not for the purpose of condoning delay in filing Statement of Defence? - HELD THAT:- Having seen the order passed by learned Sole Arbitrator, this Court does not find any reason to interfere with the impugned order. The aspect whether the ground shown is sufficient or not is primarily in the domain of discretionary jurisdiction and even if this Court was to take a contrary view, the impugned order cannot be set aside while exercising supervisory power under Article 227 of Constitution of India, particularly in context of arbitral proceedings where such interference is, to a very large extent, proscribed. There is also nothing which may indicate that exercise of such discretion smacks off any bad faith or demonstrates any perversity, much less of extreme nature. Conclusion - Arbitral Tribunals have the power to recall orders and condone delays upon showing sufficient cause, and that judicial interference in arbitral processes should be minimal. Petition dismissed.

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