TMI Tax Updates - e-Newsletter
January 28, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax CST, VAT & Sales Tax

Articles

1. Job Work of Jewellery and Precious Metals Under GST

   By: Tushar Malik

2. LEVY OF PENALTY UNDER SECTION 112(a) AND/OR SECTION 112 (b) OF CUSTOMS ACT, 1962

   By: DR.MARIAPPAN GOVINDARAJAN

3. Export of Cashew from India

   By: YAGAY andSUN

4. Barter Trade

   By: YAGAY andSUN

5. Proceedings under Section 73 of the CGST Act imposing interest and penalty on availment of Credit under wrong head not maintainable

   By: Bimal jain

6. Eligibility Criteria for MSME Benefits and How to Apply

   By: Ishita Ramani

7. Export of Goods on Lease, Hire, etc., from India

   By: YAGAY andSUN

8. RBI Exporter's Caution List: An Overview

   By: YAGAY andSUN

News

1. Attention – Hard - Locking of auto-populated liability in GSTR-3B

2. Advisory on the Introduction of E-Way Bill (EWB) for Gold in Kerala State

3. Union Budget: Kerala on high hopes, says Minister K N Balagopal

4. Budget must increase MGNREGA wages: Cong

5. Kota pins hope on IT, tourism as incidents of suicide by students dent local economy

6. Smriti Irani Leads a Transformative Gender Equity Agenda at Davos 2025

7. 86th Meeting of Network Planning Group under PM GatiShakti evaluates four Rail and Road Projects for multimodal connectivity

8. Union Minister of Commerce & Industry Shri Piyush Goyal to visit Oman from January 27-28, 2025

9. India's Investment and External Commercial Borrowings (ECB) Landscape

10. Colombian president orders increase of import tariffs on US goods in retaliation to Trump order

11. MRAI's 12th IMRC to Discuss India's Transition Towards Circular Economy, Environmental Sustainability, and Economic Growth

Notifications

GST - States

1. 15 /GST-2 - dated 16-1-2025 - Haryana SGST

Amendment of notification no.28/ST-2, dated 25.01.2018 under the HGST Act, 2017

2. 14 /GST-2 - dated 16-1-2025 - Haryana SGST

Amendment of notification no.111/ST-2, dated 18.10.2017 under the HGST Act, 2017.

3. S.R.O. No. 54/2025 - dated 16-1-2025 - Kerala SGST

Amendment in Notification G.O.(P) No.102/2018/TAXES, dated the 11th July, 2018

4. 26/2024-State Tax - dated 13-1-2025 - Maharashtra SGST

Extension of due date for filing of return in FORM GSTR-3B for the month of October, 2024

Circulars / Instructions / Orders

DGFT

1. 43/2024-25 - dated 27-1-2025

Amendments to Para 2.91 & 2.93 of HBP, inline with the Implementation of the eCertificate of Origin System

Highlights / Catch Notes

GST

• Input Tax Credit Claims Under GST Rejected Due to Procedural Violations of Sections 107(8) and 107(12), HC Orders Fresh Hearing.

  Case-Laws - HC : HC set aside orders from Appellate Authority and Primary Authority regarding disputed Input Tax Credit claims under GST. The court found procedural violations, specifically non-compliance with Sections 107(8) and 107(12) of JGST Act 2017. The Appellate Authority failed to provide mandatory hearing opportunity and issue a reasoned written order stating determination points and decisions. Court noted petitioner had submitted required documents including ASMT-11 response, contradicting respondents' claim of no reply. Matter remanded to Primary Authority with directions to issue hearing notice, consider submitted documents including online ASMT-11 response, and pass reasoned order in accordance with law.
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• High Court Upholds Additional Commissioner's Authority to Adjudicate DGGI Show Cause Notices Under CGST Act Per Notification 31/2018.

  Case-Laws - HC : HC dismissed petitions challenging territorial jurisdiction of Additional Commissioner, Kanpur to adjudicate show cause notices (SCNs) issued by DGGI Ahmedabad under CGST Act. Petitioners contested jurisdiction based on Circular 169/2022 and Notification 2/2022, arguing Additional Commissioner lacked All-India jurisdiction. Court held that as per Notification 31/2018, Additional/Joint Commissioner has authority to determine tax liability for SCNs issued by DGGI. Court directed petitioners to raise jurisdictional and other contentions during adjudication proceedings, declining to exercise extraordinary writ jurisdiction under Article 226 at this preliminary stage.
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• High Court Grants Bail in GST Fraud Case After 1-Year Custody, Citing Trial Delays and Personal Liberty Concerns.

  Case-Laws - HC : HC granted bail to accused in GST fraud case involving unauthorized Input Tax Credit (ITC) passed through fictitious firms. The court considered material factors including filing of complaint, ongoing investigation status, and accused's custody period since November 2022. Given likelihood of prolonged trial duration, court deemed accused eligible for bail release. Release ordered upon furnishing personal bond with two local sureties subject to specified conditions. The ruling balanced prosecutorial interests with personal liberty, applying standard bail jurisprudence principles where continued detention appeared unwarranted given case circumstances.
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• High Court Orders Prompt Processing of GST Refund Claim After State Authorities' Delay, Sets Verification Guidelines.

  Case-Laws - HC : HC directed state authorities to process petitioner's GST refund claim promptly following inaction on previous requests. The authorities must verify facts, assess entitlement, and consider the state government's order dated 10.10.2018 along with subsequent relevant orders. Court noted petitioner's argument that GST had been refunded in similar cases. State authorities were instructed to examine the claim comprehensively, factoring in both verification requirements and precedent of comparable refund situations. The decision emphasizes administrative duty to process tax refund claims efficiently while maintaining proper verification protocols. Petition disposed with specific directions for immediate processing of refund claim.
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Income Tax

• High Court Upholds Assessment Order u/s 143(3), Rules Natural Justice Not Violated When Show-Cause Notice Was Clear.

  Case-Laws - HC : HC dismissed writ petition challenging assessment order under s.143(3) r.w.s. 144B, finding no clear breach of natural justice principles to warrant bypassing alternate remedies. Show-cause notice adequately informed petitioner about unreliable sales figures and proposed assessment methodology. Final assessment order did not materially deviate from notice parameters. Petitioner's conditional request for video conferencing hearing was not mandatory since AO required no clarifications. Court held statutory appeals must be exhausted first as no patent violation of natural justice was established to justify extraordinary writ jurisdiction.
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• Excise Duty Refund Under Kutch Earthquake Relief Scheme Ruled Capital Receipt, Not Taxable Per Notification 39/2001.

  Case-Laws - AT : ITAT determined that excise duty refund received under Notification No.39/2001 Central Excise, issued as part of earthquake relief incentive scheme for Kutch District, Gujarat, constitutes a capital receipt. Following precedent established in prior rulings (2005-06 and 2006-07), the Tribunal maintained that such refunds, granted as disaster relief incentives, retain capital character and are not subject to taxation. Considering the scheme's objective of rehabilitation post-devastation, the refund represents a capital inflow rather than revenue receipt. Appeal allowed, confirming the non-taxable nature of the excise duty refund as capital receipt.
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• Tax Tribunal Allows Mother's Loan as Valid Source for Property Investment, Directs Verification of Interest Claims u/s 24.

  Case-Laws - AT : ITAT reversed CIT(A)'s addition under s.69 regarding unexplained property investment, accepting loan from assessee's mother as legitimate source after verification of her creditworthiness in reopened assessment. On interest disallowance under s.24, ITAT directed AO to verify if assessee's investment from borrowed funds was limited to their ownership share. Interest deduction permitted only on borrowed funds used for initial property investment up to assessee's share portion, following prudent investment principle. Subsequent investments, even if from borrowed funds, deemed ineligible for s.24 interest deduction. Matter remanded to AO for verification of fund utilization patterns in bank accounts and determination of allowable interest based on initial investment share.
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• Assessment Order u/s 153C Quashed: ITAT Rules 111-Day Delay Beyond December 2020 Deadline Makes Order Time-Barred.

  Case-Laws - AT : ITAT determined the assessment order under s.153C r/w s.143(3) for AY 2016-17 was barred by limitation. The order dated 21.04.2021 exceeded the statutory deadline of 31.12.2020 by 111 days. Following the legal maxim 'Expressio unius est exclusion alteris', when statute prescribes a specific timeframe, compliance is mandatory and no alternative method is permissible. The assessment should have been completed within prescribed 9 months or 21 months period, whichever is later, per s.153B. Since AO failed to pass the order within statutory limitation period, the assessment was quashed and appellant's appeal was allowed on grounds of time-barred proceedings.
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• High Court Invalidates Section 271D Penalty Due to Time-Barred Proceedings and Delayed Show Cause Notice.

  Case-Laws - HC : HC affirmed penalty proceedings under s271D were time-barred due to procedural delays. Initial reference by ITO on 16.11.2016 was followed by Show Cause Notice from Additional CIT only on 10.11.2017, with final penalty order issued on 22.02.2018. This exceeded statutory limitation period from reference date. Revenue provided no justification for delayed issuance of show cause notice. Court rejected Revenue's reliance on TAM TAM precedent as fact-specific, distinguishing it from present case. Tribunal's order upheld, finding proceedings initiated beyond limitation period invalid. Questions of law resolved in assessee's favor, invalidating penalty imposed for s269SS violations.
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• High Court Quashes Income Tax Reassessment Notice u/s 148 for Exceeding Time Limit Despite Revenue's Litigation Delay Claims.

  Case-Laws - HC : HC held reassessment proceedings initiated u/s 148 were invalid due to statutory limitation u/s 149. The original notice was set aside for lacking mandatory approvals from competent authority. Court rejected Revenue's argument that limitation period should be extended due to prior litigation, stating time spent in previous challenges cannot extend statutory limitation periods. The fact that Revenue failed to take proper legal steps within prescribed timeframe cannot be used to justify extension of limitation period. No court order prevented Revenue from issuing valid notice within limitation period. Petition allowed, reassessment order and notices quashed as time-barred. Litigation time exclusion claim denied as limitation u/s 149 remained absolute.
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• Life Insurance Business Profits Must Follow Insurance Act 1938 Valuation Rules for Tax Exemptions u/s 10(15).

  Case-Laws - AT : ITAT admitted additional ground regarding exemption under s.10(15)(iv)(h) for interest income from PSU bonds/debentures, following NTPC precedent and Bombay HC ruling in Siva Equipment. Matter remanded to AO for verification of eligibility criteria. On s.80G deduction claim, following previous ITAT ruling for AY 2006-07, issue remanded to AO for fresh examination. Regarding computation u/r 2 of First Schedule (s.44), ITAT affirmed that life insurance business profits must be calculated as annual average surplus between inter-valuation periods per Insurance Act 1938 requirements. Revenue's appeal dismissed on all grounds, maintaining consistency with prior coordinate bench decisions. AO directed to verify factual aspects of exemption claims while adhering to statutory provisions.
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• Seized Cash Cannot Be Adjusted Against Advance Tax But May Qualify for Self-Assessment Tax Adjustment u/s 132B.

  Case-Laws - AT : During a 2014 search operation, seized cash adjustment against advance tax liability was denied per Section 132B and Explanation 2. ITAT held that while self-assessment tax qualifies as 'existing liability', the assessee failed to include seized cash in total income computation. The matter of adjusting seized cash against self-assessment tax was remanded to AO for verification of circumstances similar to precedent case. Regarding interest u/s 220, ITAT ruled the assessee cannot be deemed in default as seized cash was already with Department within 30-day notice period. AO directed to adjust seized cash against tax liability if self-assessment tax adjustment relief is denied post verification.
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Customs

• High Court Allows PCB Exporter to Appeal Enhanced Penalty with Lower Pre-deposit Based on Original Penalty Amount.

  Case-Laws - HC : HC addressed valuation dispute regarding exported Printed Circuit Boards where penalty was significantly increased from Rs.1,00,000 to Rs.1,00,00,000 in subsequent Order-in-Original. While acknowledging statutory alternative remedy exists, HC permitted petitioner to file appeal within three weeks against Order dated 31.10.2022. Following precedent from Delhi HC, court directed that appeal be considered without requiring full pre-deposit of enhanced penalty. Petitioner allowed to proceed with pre-deposit based on initial Rs.1,00,000 penalty amount, without prejudice to final determination on merits by appellate authority. Court emphasized this concession on pre-deposit requirement would not influence substantive appeal determination. Petition disposed accordingly.
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• Customs Court Allows Fresh Representation for Sodium Carbonate Import Case, Sets 48-Hour Timeline for Drug Controller Inspection.

  Case-Laws - HC : HC addressed a dispute over 2091 bags of Sodium Carbonate incorrectly declared as Arecanuts in import documentation. The court permitted the petitioner to submit additional representation for a Detention and Demurrage Free Certificate, requiring authorities to process such requests within two weeks after providing a hearing opportunity. The ruling established that petitioner may request Assistant Drug Controller inspection of goods, which must be facilitated within 48 hours. Authorities must consider granting clearance upon receiving No Objection Certificate from Assistant Drug Controller following inspection. Court emphasized procedural compliance while balancing regulatory oversight with commercial interests.
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• CESTAT Cancels Customs Penalties in Cigarette Smuggling Case Due to Insufficient Evidence and Denied Cross-examination Rights u/s 138B.

  Case-Laws - AT : CESTAT set aside penalties imposed u/ss 112(a)(i) and 114AA of Customs Act in a case involving smuggled cigarettes concealed as ladies garments. The Tribunal found insufficient evidence linking the appellant to smuggling operations. Bank transactions between appellant's company and co-accused's firms were deemed regular business dealings. The primary evidence, a statement by co-accused VA, was ruled inadmissible as appellant was denied cross-examination rights u/s 138B. The Tribunal emphasized that no documentation proved appellant's prior knowledge of concealment or use of false declarations. Following natural justice principles and citing lack of corroborative evidence, CESTAT concluded penalties were legally unsustainable and allowed the appeal.
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• Customs Broker License Revocation Reversed: CESTAT Rules Verification of Import Documents Sufficient Under CBLR 2018 Rules.

  Case-Laws - AT : CESTAT reversed revocation of Customs Broker License, finding no violations of CBLR 2018. The tribunal held that the broker fulfilled obligations by verifying documents provided by importers, as law does not require brokers to investigate authenticity of official certificates or physically inspect pre-customs goods. No evidence supported allegations of forged Sri Lankan Certificates of Origin or broker's connivance in misdeclaring goods' origin. The retracted statement of the broker could not be sole basis for penalties without corroborating evidence. The tribunal emphasized that brokers operate based on supplied documents and cannot challenge certificates that even customs authorities must accept through prescribed procedures. Order revoking license, forfeiting security deposit, and imposing penalties was set aside.
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• Customs Tribunal Rules Imported Engines Under DFIA License Need Not Match Export Use When Authorization Lacks Specific Restrictions.

  Case-Laws - AT : CESTAT allowed appeal concerning disputed classification of imported internal combustion engines under transferrable DFIA license. Per N/N. 98/2009-Cus, customs duty exemption requires only that imported materials match authorization's description, value, and quantity. While export item aligned with SION Category C969, the authorization contained no explicit import restrictions or category specifications. CBEC Circular 46/2007 confirms correlation between inputs and exports needed only for specific products under para 4.55.3 of Handbook. Tribunal held appellant not required to correlate imports with original licensee's exports, as authorization language imposed no restrictions limiting engine imports to specific export-related uses. Impugned order set aside.
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• Customs Tribunal Awards 12% Interest on 14-Year Delayed Export Duty Refund u/s 27A and Section 154.

  Case-Laws - AT : CESTAT allowed appeal concerning export duty refund and interest payment on delayed refund. While appellant claimed provisional assessment, tribunal determined it was a case of final assessment requiring rectification u/s 154 of Customs Act. Revenue's 14-year delay in processing rectification warranted interest payment. Interest awarded at 12% per annum from January 11, 2011 (three months after original order-in-appeal dated October 11, 2010) until September 5/6, 2023 (refund date). Tribunal applied Ranbaxy and Sandvik Asia precedents regarding interest eligibility on delayed refunds. Case established that though initially claimed as provisional assessment, matter was treated as rectification of final assessment, triggering Section 27A interest provisions.
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Corporate Law

• High Court: Settlement with Creditors Alone Not Grounds to Stay Company Liquidation u/s 466 Companies Act.

  Case-Laws - HC : HC ruled that principles of res judicata apply to subsequent applications u/s 466 of Companies Act, 1956. The Court dissolved the stay on winding-up proceedings, emphasizing that mere settlement with creditors or workers is insufficient grounds for staying liquidation. The discretionary power u/s 466(1) requires proof satisfying the Court that proceedings ought to be stayed. The Court must consider commercial morality beyond creditors' wishes. The jurisdiction to stay proceedings can only be exercised to revive the company or its business, not to facilitate acquisition of assets at undervalued prices. The appeal was allowed, setting aside previous orders for failing to properly apply Section 466 principles and consider vital evidence.
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• NCLAT Upholds Interim Order u/s 242(4) to Maintain Corporate Stability Amid Family Dispute Over Trust Management.

  Case-Laws - AT : NCLAT dismissed the appeal challenging interim orders regarding trustee replacement and management powers. The Tribunal acknowledged severe family hostilities and non-compliance with previous orders by both parties. The contested interim order was upheld as it maintained corporate stability by preserving the legally constituted board, protected banking relationships, safeguarded company assets, and retained appellant's directorship. The order, issued u/s 242(4) of the Act, effectively prevented unauthorized takeover while protecting interests of 2500 employees and operational continuity. NCLAT found the NCLT's interim measures appropriate for regulating company conduct pending final hearing of Section 241-242 petition, maintaining status quo ante regarding management and shareholding structure.
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IBC

• NCLAT Upholds IBC Section 9 Application, Rules Last Payment Extends Limitation Period and Partnership Registration Not Required.

  Case-Laws - AT : NCLAT dismissed an appeal challenging admission of Section 9 IBC application, affirming the application was within limitation period. Last payment made on 17.02.2017 extended limitation to 17.02.2020, and filing on next working day was permissible under Limitation Act. Tribunal rejected appellant's claim of improper demand notice service and pre-existing dispute. CD's contention of cash payments was unsupported by evidence beyond self-serving ledger entries. The alleged dispute emerged only post-demand notice. Application's maintainability was upheld despite OC being unregistered partnership firm, as Section 69(2) of Partnership Act restrictions don't apply to IBC proceedings. CIRP to continue against CD.
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• Corporate Debtor's Liquidation Under IBC Section 33(2) Upheld by NCLAT Despite Allegations of Document Forgery.

  Case-Laws - AT : NCLAT upheld the liquidation order of the Corporate Debtor following CoC's unanimous (100%) resolution u/s 33(2) of IBC. While allegations were raised regarding forged documents in Section 7 admission and questionable conduct of Resolution Professional in claim verification, the tribunal found insufficient evidence of manipulation. The additional ledger documents from SVC Bank were deemed admissible as part of judicial record, establishing Corporate Debtor's position as co-borrower and Corporate Guarantor. Despite concerns about CoC's limited resolution efforts, NCLAT confirmed that Section 33(2) leaves minimal discretion when CoC resolves for liquidation with required majority. Given absence of assets and viable resolution options, the appeal was dismissed, affirming the Adjudicating Authority's liquidation order.
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• NCLAT Excludes 14-Month Period From Resolution Plan Timeline Due To Interim Order Restricting Unit Transfers And Fund Recovery.

  Case-Laws - AT : NCLAT upheld the exclusion of period from 12.04.2023 to 01.07.2024 from the Resolution Plan implementation timeline. The Successful Resolution Applicant (SRA), an association representing 250 allottees, had demonstrated substantial implementation efforts by infusing Rs.7 crores out of Rs.10 crores, pursuing environmental clearances, and restoring electricity connections. During this period, an interim order restricted the SRA from transferring units and realizing Rs.50 crores. The Tribunal found that since the Resolution Plan's approval was under challenge with an operative interim order, the exclusion of implementation period was justified. The interim orders affecting financial execution warranted timeline extension. Appeal dismissed, affirming the Adjudicating Authority's order dated 28.08.2024.
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Service Tax

• CESTAT Overturns Rs. 2.39 Crore CENVAT Credit Demand, Validates Input Services and Capital Goods Treatment u/r 3(5A).

  Case-Laws - AT : CESTAT allowed appeal concerning CENVAT credit disputes. Tribunal set aside demand of Rs.1,79,11,286 based on ST-3 returns and credit register differences, noting statutory compliance in utilizing 50% credit on capital goods. Demand of Rs.59,94,339 for input services was reversed as manpower services qualified as eligible inputs for telephonic services. Demand u/r 3(5A) for capital goods sold as scrap was invalidated as no CENVAT credit was originally claimed on pre-2004 goods. Extended limitation period was rejected considering regular ST-3 filing, departmental audits, and appellant's PSU status precluding mala fide intent. All demands were set aside and appeal was allowed in appellant's favor.
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• CESTAT Restores CENVAT Credit Despite Challan Number Errors, Rules Technical Discrepancies Cannot Override Substantive Benefits.

  Case-Laws - AT : CESTAT upheld appellant's entitlement to CENVAT credit despite typographical errors in challan numbers noted in AG Audit report and show cause notice. The Tribunal emphasized that CENVAT credit scheme, being beneficial legislation, cannot be denied on technical grounds. The manually maintained Service Tax Payable and Credit Registers, duly signed by authorized representatives, were deemed valid documentation as no statutory mandate exists for electronic record-keeping. The discrepancy in challan numbers (28067 vs. correct number, and 29936 vs. 29935) were ruled as mere clerical errors. The Tribunal concluded that procedural irregularities cannot override substantive benefits when taxpayer presents adequate supporting evidence. Appeal allowed with CENVAT credit restored.
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• Cooperative Society Wins Service Tax Appeal: 75% Abatement Valid Under N/N 30/2012-ST, Pure Agent Reimbursements Non-Taxable.

  Case-Laws - AT : CESTAT ruled in favor of appellant cooperative society, confirming their eligibility for 75% service tax abatement under N/N. 30/2012-ST. The tribunal held that as a registered cooperative society, appellant qualified for tax reduction and had properly discharged 25% tax liability. Following SC precedent in Intercontinental Consultants case, amounts received as pure agent reimbursements (salaries, PF, ESI) were deemed non-taxable. Extended limitation period was incorrectly invoked as there was no tax evasion, given appellant's legitimate exemption claim. The tribunal set aside the original order denying exemption and service tax demands on reimbursements, fully allowing the appeal.
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• CESTAT: Direct Advisory Services to Foreign Clients Not Intermediary Services u/r 9 of POPS Rules 2012.

  Case-Laws - AT : CESTAT ruled against Revenue's contention that services constituted intermediary services u/r 9 of Place of Provision of Service Rules, 2012. The Tribunal emphasized that intermediary services require a tripartite arrangement involving a supplier, recipient, and facilitator. In this case, only a bipartite agreement existed between Respondent and overseas clients for identifying prospective buyers. The services were provided directly on Respondent's own account, not facilitating supply between parties. Following precedents from IDEX India and Cube Highways cases, which established that advisory services rendered independently do not qualify as intermediary services, CESTAT dismissed Revenue's appeal, confirming the services qualified as export of services.
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Case Laws:

• GST

• 2025 (1) TMI 1249
  Recovery of dues - Interpretation of Statute - Section 122(1-A) and Section 137 of the GST Act - HELD THAT:- The High Court after assigning cogent reasons took the view that the respondent herein was merely an employee of the Company and he could not have been fastened with the liability of Rs. 3731 Crore. There are no good reason to interfere with the common impugned Orders passed by the High Court - SLP dismissed.

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• 2025 (1) TMI 1248
  Availment of excess amount of Input Tax Credit in GSTR-3B than the amount of Input Tax Credit available as per GSTR-2A -petitioner contended that merely because data of purchase is not reflected in GSTR-2A, it is not a valid ground for denial of Input Tax Credit - HELD THAT:- The fact that the petitioner had uploaded documents along with the appeal filed before the Joint Commissioner can be seen from Serial No.18 of Form GST APL-01 along with brief facts and also mentioning several grounds of appeal . The said documents include online reply ASMT-11 to the ASMT-10 notice. Therefore, the stand of the respondents that no reply was given to ASMT-10 notice is factually incorrect. Therefore, the order of the 2nd Respondent is vitiated on account of non-consideration of the same. Under Section 107(8) of the Act, it is duty of the Appellate Authority to give an opportunity to the appellant of being heard. There is no evidence that such opportunity of hearing was provided to the appellant by the Joint Commissioner - Moreover, under Section 107(12) of the Act, the order of the Appellate Authority disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reasons for such decision. Conclusion - Since the order (Annexure-3) passed by the Appellate Authority is in blatant violation of the above provisions of the Jharkhand Goods and Services Tax Act, 2017, on account of non-compliance with Sections 107 (8) and 107 (12) thereof , the said order as well as the order of the Primary Authority (Annexure-1) are both set aside; the matter is remitted to the Primary Authority (Respondent 2) to issue notice of hearing to the petitioner, consider the documents, such as, ASMT-11 filed online by the petitioner to ASMT-10 notice and then pass a reasoned order in accordance with law. Petition allowed by way of remand.

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• 2025 (1) TMI 1247
  Territorial Jurisdiction to adjudicate the SCN issued to the petitioners - levy of penalty on the petitioners under section 122 (1) (i) (x) (xvii) (xviii) and (xix) of the Central Goods and Service Tax Act, 2017 - invocation of writ jurisdiction under Article 226 of the Constitution to challenge the SCNs - alleged evasion of tax by the three concerns - unaccounted production and clandestine supplies/clearances of pan masala and scented tobacco/jarda - HELD THAT:- It appears that the petitioners have tried to raise the contentions with regard to the jurisdiction of adjudication of the show cause notices by Additional Commissioner, Kanpur heavily relying upon para no. 7.1 which is inserted by Circular No. 169 of 2022 in Circular No. 31 of 2018 which provides for powers of adjudication of the show cause notice issued by DGGI where the principal place of business of noticee/s fall under jurisdiction of multiple Central Tax Commissionerate or where multiple show cause notices are issued on the same issue on different noticee/s, such show cause notices may be adjudicated irrespective of amount involved in the show cause notices by one of the Additional/Joint Commissioners of Central Tax empowered with All India jurisdiction as per Notification No. 2 of 2022. Therefore, reliance is placed on Notification No. 2 of 2022 which refers to Principal Commissioners/ Commissioners of the Central Tax which includes the Principal Commissioner of Lucknow only. The petitioners have therefore, referred to Notification No. 2 of 2017 which provides for notified officers having jurisdiction and as per Entry no. 12, Principal Commissioner of Lucknow falls within the Principal Chief Commissioner, Lucknow whereas Commissioner, Kanpur also would be under the territorial jurisdiction of the Principal Chief Commissioner of Lucknow. It was therefore, contended that as per para no. 7.1 of the Circular no. 169/2022, Principal Commissioner, Kanpur would not have All India jurisdiction as per Notification No. 2 of 2022 and as such, Additional Commissioner, Kanpur shall not have any power to adjudicate the impugned show cause notices qua the petitioners. It appears that petitioners have been swayed away by the territorial jurisdiction prescribed in Notification No. 2 of 2017 whereas the impugned show cause notices are issued by DGGI, Ahmedabad and as per Notification No. 31 of 2018, proper officer under sections 73 and 74 under the GST Act and IGST Act would be Additional or Joint Commissioner of Central Tax who is required to determine the liability of tax and interest in the hands of the main noticee/s. Conclusion - It would not be proper to entertain the writ petitions while exercising extraordinary jurisdiction under Article 226 of the Constitution of India in view of the fact that allegations made in the show cause notices are required to be examined in the adjudication proceedings before one adjudicating authority only, it is opined that no interference is called for in the impugned show cause notices at this stage and the petitioners may raise all the contentions which are raised in these petitions before the adjudicating authority including the issue of jurisdiction as all the questions raised by the petitioners herein are left open to be adjudicated by the adjudicating authority. Petition dismissed.

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• 2025 (1) TMI 1246
  Seeking grant of regular bail - passing on unauthorized Input Tax Credit (ITC) to various firms through non-existent firms - HELD THAT:- Taking into account the fact that complaint has already been field against the applicant/accused and the further investigation is going on, moreover, the applicant is in jail since 22.11.2024, conclusion of the trial may takes some more time. Therefore, this Court is of the view that the present applicant is entitled to be released on bail in this case. Let the Applicant, Rohit Singla, be released on bail on furnishing personal bond with two local sureties in the like sum to the satisfaction of the Court concerned with the conditions imposed. Bail application allowed.

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• 2025 (1) TMI 1245
  Maintainability of petition - appellant was relegated to file an appeal as provided under Section 107 of the GST Act - Challenge to an order of adjudication passed under Section 73 of the CGST/WBGST Act, 2017 - HELD THAT:- The learned Single Bench was right in relegating the appellant to file the statutory appeal. It is no doubt true that such a prayer cannot be made to the appellate authority - Appeal dismissed.

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• 2025 (1) TMI 1244
  Refund the differential GST amount paid by the petitioner for the works executed by the petitioner - HELD THAT:- In the case of SHRI M.G. ARUNKUMAR VERSUS THE STATE OF KARNATAKA, THE DEPUTY COMMISSIONER, THE UNION OF INDIA [ 2023 (8) TMI 1531 - KARNATAKA HIGH COURT] it was held that The respondent is hereby directed to reimburse GST amount as indicated in the representation dated 15.04.2023 vide Annexure-E. . Conclusion - The respondents are hereby directed to reimburse GST amount as indicated in the representation dated 21.11.2024. Petition allowed.

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• 2025 (1) TMI 1243
  Inaction on the part of the respondents in not refunding the amount of GST collected from the petitioner in the course of the execution of the contract that was awarded to the petitioner - grievance of the petitioner is that inspite of repeated approach being made to the respondents, there is a total inaction on the part of the respondents so far as refund of GST is concerned - HELD THAT:- The writ petition as of now stands disposed of directing the State Authorities to immediately process the claim of the petitioner so far as refund of GST is concerned, after due verification of facts and also the entitlement part of the petitioner is concerned. Let an appropriate decision be taken keeping in view the earlier order of the State Government dated 10.10.2018 in this regard and all subsequent orders also passed in this regard by the State. The State Authorities shall also keep in mind the contention of the petitioner that in many of the similar cases, the govt. itself has refunded the GST. Petition disposed off.

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• Income Tax

• 2025 (1) TMI 1242
  Block assessment u/s 158BC - penalty levied u/s 158BFA - offences allegedly committed u/s 276C and 277 r.w.s. 278B - Delay in filling SLP - as decided by HC [ 2023 (8) TMI 162 - BOMBAY HIGH COURT] since, the Revenue has failed to produce the satisfaction note we have to and we hereby hold that the search action u/s 132(1) and, consequently, the block assessment order passed u/s 158BC, order levying penalty u/s 158BFA cannot survive as they are all predicated on the existence of a valid search - HELD THAT:- There is a gross delay of 404 days in filing the Special Leave Petitions which has not been satisfactorily explained by the Revenue. Even otherwise, we see no reason to interfere with the common impugned orders passed by the High Court.Special Leave Petitions are, accordingly, dismissed on the ground of delay as well as merits.

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• 2025 (1) TMI 1241
  Proceedings u/s 153C - period of limitation - issuance of the notice was preceded by the drawl of a Satisfaction Note by the jurisdictional AO - Distinction between Section 153A and Section 153C - Delay filing SLP - As decided by HC abatement of the six AYs or the relevant assessment year u/s 153C would follow the formation of opinion and satisfaction being reached that the material received is likely to impact the computation of income for a particular AY or AYs that may form part of the block of ten AYs . Invocation of Section 153C in respect of AYs for which no incriminating material had been gathered or obtained. Satisfaction Notes also fail to record any reasons as to how the material discovered and pertaining to a particular AY is likely to have a bearing on the determination of the total income for the year which is sought to be abated or reopened in terms of the impugned notices. HELD THAT:- There is a delay of 162 and 145 days respectively in filing the Special Leave Petitions which has not been satisfactorily explained by the petitioners - Revenue. Even otherwise, we see no reason to interfere with the common impugned orders passed by the High Court. Special Leave Petitions are, accordingly, dismissed on the ground of delay as well as on merits.

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• 2025 (1) TMI 1240
  Assessment order issued u/s 143 (3) r.w.s. 144B made by the second Respondent - Petitioner contended that since this was a clear case of breach of principles of natural justice, the rule for the exhaustion of alternate remedies should not be applied, and this Court should entertain this Petition. HELD THAT:- Show-cause notice clearly informed the Petitioner that the sales figures could not be relied upon. The methodology by which the correct figures were proposed to be assessed was also clearly indicated in the notice itself. Thus, it is clear that the notice referred to a tentative assessment. Still, the Petitioner was clearly put on guard regarding the tentative opinion that the sales figures were unreliable. An assessment exercise was to be carried out according to the methodology indicated. Therefore, at least prima facie, this is not a clear case of the impugned assessment order travelling beyond the show cause notice or a case where it could be ex-facie concluded that the Petitioner was prejudiced on account of the variation in the tentative figures suggested in the show cause notice and the final determination. Finally, this is also not a case in which the Petitioner, in response to the show-cause notice and the further submissions, clearly and categorically requested a personal hearing. In the response dated 20 December 2022, in the last three lines, the Petitioner stated that it hoped the reply would satisfy the authorities, and if any further clarification is required in the matter, a video conferencing opportunity may please be given to clarify the stand. Since the AO may not have required any further clarification, no video conferencing opportunity was granted to the Petitioner. Again, based on this material, we cannot hold that this is a case of patent violation of natural justice based on which the rule of exhaustion of alternate remedies ought to be bypassed.

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• 2025 (1) TMI 1239
  Transfer of the assessee s case from Mumbai to Kochi - petitioner, submits that without furnishing a copy of the transfer proposal and the comments on the petitioner s objections, the petitioner was disabled from showing appropriate cause why the proceedings should not be transferred - HELD THAT:- This does appear to be a case of denial of fair opportunity and, consequently, a violation of the principles of natural justice. On this ground, we set aside the impugned orders and remand the matter to PCIT to decide on the proposal for transfer from Mumbai to Kochi afresh. The copy of the transfer proposal and response/comments on the petitioner s objections have already been furnished/made known to the petitioner. Therefore, there is no question of granting any further documents to the petitioner. The petitioner may, if it so chooses, file a fresh response or additional response within 15 days from today to the PCIT. PCIT should then grant the petitioner an opportunity for a personal hearing and dispose of the proposal for transfer in accordance with law and on its own merits. A reasoned order must be made and communicated to the petitioner. This exercise must be completed on or before 28 February 2025.

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• 2025 (1) TMI 1238
  Assessment order u/s 143(3) passed on a non-existent entity - entity assessed has been merged consequent to merger proceedings - HELD THAT:- Where the assessee-company was amalgamated with another company and thereby lost its existence, the assessment order passed in the name of the said non-existing entity would be without jurisdiction and was liable to be set aside. See Maruti Suzuki India Limited [ 2019 (7) TMI 1449 - SUPREME COURT ] Maintainability of appeal before High Court - Section 260A (4) provides that the appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question. However, the proviso to this sub-section states that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. Usually, for a case to involve such a question, the same should have been raised before the original authority or at least the appellate authorities. When a question was never raised before the original authority or the appellate authorities, then, typically, it would not be easy to hold that such a question was involved and, therefore, should be framed by exercising the powers under the proviso to sub-section (4) of Section 260A. However, to the above general proposition, there are exceptions. Suppose a question of law goes to the root of the jurisdiction, and there is no necessity to investigate new facts or if there is no serious dispute on facts. In that case, such a question can be framed even though the same may not have been raised in the earlier proceedings before the original or appellate authority. Consent, per se, cannot confer jurisdiction upon an authority where such jurisdiction is inherently lacking. In Ashish Estates Properties (P.) Ltd. [ 2018 (8) TMI 1726 - BOMBAY HIGH COURT ] the Co-ordinate Bench of this Court held that a question which was not raised before Tribunal should not ordinarily be allowed to be raised in an appeal under Section 260A unless it was a question on the issue of jurisdiction or question, which went to the root of the jurisdiction. We are satisfied that the question proposed by Mr. Mistri is involved in these appeals, and therefore, we frame the above question in all these appeals. If answered in favour of the assesses, the question would go to the root of jurisdiction. After framing this question, we defer the hearing to 27 January 2025 so that the counsel for the parties would have sufficient time to address, inter alia, the additional question that we have now framed in these appeals. List the matters on 27 January 2025

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• 2025 (1) TMI 1237
  Validity of penalty order passed u/s 271D as barred limitation - violation of Sec. 269SS - HELD THAT:- ITO vide letter dated 16.11.2016 had admittedly made the reference. Additional Commissioner of Income Tax issued the Show Cause Notice only on 10.11.2017 (nearly a year later) proposing the levy of penalty u/s 271D. Penalty Order was made on 22.02.2018. If the reckoning point is 16.11.2016, it is clear that the proceedings were completed beyond the period of limitation, as rightly contended by the learned counsel appearing for the Assessee. Even otherwise , the concept of delay latches would crop in; no explanation whatsoever has been offered by the Revenue for the laxity shown in belatedly issuing the show cause notice / proposition notice which they claim, amounted to initiation of penalty proceedings. This view has animated the reasoning of the impugned order of the Tribunal, may be a bit inarticulately . Reliance of Revenue on TAM TAM PEDDA GURUVA REDDY [ 2006 (7) TMI 141 - KARNATAKA HIGH COURT ] does not come to his aid since the same has been rendered largely fact-specific. Thus the questions of law framed to be answered in favour of assessee.

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• 2025 (1) TMI 1236
  Reopening of assessment u/s 148 as barred by limitation as prescribed un/s 149 - notices issued u/s 148 under the old regime, but after 01.04.2021, be construed as notices under Section 148A (b) - Notice issued without the necessary mandatory approvals - HELD THAT:- Notice issued u/s 148 of the Act in the earlier round was set aside on the ground that the AO had not followed the mandatory requirement of seeking an approval from the competent authority. Clearly, the fact that the petitioner had succeeded in its challenge to the said notice cannot be a ground for exclusion of the period spent by the assessee in pursuing the said litigation. The time spent by the petitioner in pursuing the challenge can neither be excluded nor can be claimed as resulting in extension of the period of limitation. Revenue is required to take all necessary steps for initiation of the assessment proceedings within the period of limitation. This would obviously mean proper steps in accordance with law. The fact that the Revenue had not taken the steps in accordance with law cannot possibly be construed as a factor in favour of the Revenue for extending the limitation as stipulated under Section 149 of the Act. Plainly, there was no court order impeding the Revenue from issuing a notice under Section 148 of the Act, in accordance with law. We reject the contention that the period of limitation as stipulated u/s 49 (1) of the Act stood extended by virtue of the proceedings initiated by the orders passed in TWYLIGHT INFRASTRUCTURE PVT LTD, ARUN GARG, R.P. BASIA CO, SUSHMA GOEL, ADA NEWS IN SHORTS PVT LTD, ABHINAV JINDAL, MANGLA [ 2024 (1) TMI 759 - DELHI HIGH COURT ] Thus, the present petition is allowed and reassessment order and notices quashed - Decided in favour of assessee.

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• 2025 (1) TMI 1235
  Nature of receipts - treatment to excise duty refund received - revenue receipt or capital receipt - HELD THAT:- Tribunal in 2005-06 and 2006-07 [ 2024 (10) TMI 242 - ITAT DELHI] after taking note of the Notification No.39/2001 Central Excise dated 31.07.2001 issued by Central Government in the wake of devastation caused by earthquake in the Kutch District of Gujarat and the salient features of the said Incentive Scheme and the applicability of the same to the assessee decided identical issue holding that the Excise Duty refund received by the assessee is in the nature of capital receipt not exigible to tax. Thus, we hold that the excise duty refund received by the assessee is in the nature of capital receipt not chargeable to tax. Appeal of the assessee is allowed.

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• 2025 (1) TMI 1234
  Taxability of investment u/s 69 - claimed to be sourced as a loan from the assessee s mother - HELD THAT:- We find force in the argument of Revenue was required to assess the unexplained investments made directly or indirectly in the said property in the hands of the respective co-owners if their creditworthiness was doubtful. We are of the considered view that the ACIT, Circle 2(1)(1), Ghaziabad, by accepting the version of assessee s mother/Smt. Sudha Goyal in reopened assessment proceedings has held that she has the creditworthiness for making investments/advances in the relevant year. Thus, the creditworthiness of Smt. Sudha Goyal does not remain questionable thereafter. Hence, we reversed the finding of the CIT(A) in this regard and delete the addition Disallowance of interest u/s 24 - Appellant/ assessee is required to make investment to the extent of his share. Thus, we hereby direct the AO to verify from the record that whether the investment made by the assessee to the extent of his share from the borrowed fund on interest. The initial investment has to be treated as assessee s share. In case, the bank account of the assessee after taking borrowed fund is found utilized for the acquiring the property to the extent of initial investment (as any prudent man will invest to the extent of his share only and thereafter the surplus investment), then the interest on that fund should be allowed after proper investigation. The subsequent investment; i.e. after even sourced from borrowed fund will not be eligible for the interest deduction u/s 24 of the Act.

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• 2025 (1) TMI 1233
  Revision order u/s 263 passed in the name of a non-existing entity - effect of amalgamation scheme approved - HELD THAT:- Once the relevant order had been passed in the name of a non-existent entity and the fact of amalgamation has been duly intimated to the concerned Tax Authorities, then the order passed is void-ab-initio. In view of the above settled position of law, we are of the considered view that the order passed under Section 263 of the Act is void and hence, liable to be set-aside. In the case of PCIT v. Maruti Suzuki India Ltd [ 2019 (7) TMI 1449 - SUPREME COURT] held that where assessee company was amalgamated with another company and thereby lost its existence, assessment order passed subsequently in name of said non-existing entity, would be without jurisdiction and was to be set aside. Decided in favour of assessee.

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• 2025 (1) TMI 1232
  Penalty u/s 271D - acceptance of a cash loan in contravention of Section 269SS - HELD THAT:- Addition made in the assessment order passed u/s 153C was quashed by the CIT (A) on the basis of absence of valid satisfaction note and no incriminating material seized during the search. Accordingly, it was concluded that notice u/s 153C issued by the Assessing Officer for assessment year under consideration need to be treated as ab initio invalid and legally not sustainable and quashed. Since the penalty levied u/s 271D is against such additions made in the assessment order passed u/s 153C and the same was quashed, accordingly the penalty levied u/s 271D also does not survive. The similar issue was considered in the case of Ravi Nirman Nigam Ltd. [ 2024 (7) TMI 87 - ITAT MUMBAI ] - we are inclined to delete the penalty levied u/s 271D - Appeal filed by the assessee is allowed.

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• 2025 (1) TMI 1231
  Revision u/s 263 - disallowance u/s 14A - HELD THAT:- As specific queries were raised by the AO, reply was duly filed by the assessee along with details as asked for which has been duly considered by the Ld. AO in its proper perspective and the return filed by the assessee was then accepted, taking into consideration of the judgment passed in the case of Indian Farmers Fertilizers Cooperative Ltd. [ 2017 (8) TMI 422 - DELHI HIGH COURT] and further that the Explanation 2 of Section 263 of the Act which has been amended by the Finance Act, 2022 giving effect on and from 01.04.2022 and further that the judgment passed in the case of Malabar Industrial Company Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] we don t find any reason to deviate from the stand taken by the Coordinate Bench in the identical situation. Assessee s appeal is allowed.

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• 2025 (1) TMI 1230
  Unexplained investment - on-money payments for property purchase was justified - HELD THAT:- It is a common practice in real estate transaction that consideration for purchase of property, whether it is cash or cheque has been fully paid either before the registration of the property or at the time of registration of the property. Therefore, going by the said logic, in our considered view, cash payment as alleged by the AO made for purchase of property should be considered in light of sale deed registered for purchase of property. If we go by the said dates, the alleged cash payment towards purchase of property assessed by the AO as unexplained investment does not fall under the A.Y.2020-21.This fact has been confirmed by subsequent affidavit filed by Shri MSN Reddy, who has thoroughly explained the transaction on the basis of evidence and admitted additional income in the name of appellant company for the A.Y.2019-20. Therefore, we are of the considered view that the cash payment if any made for purchase of property cannot be assessed for the A.Y.2020-21. Thus, we direct the AO to delete the addition as unexplained investment for the A.Y.2020-21. Valid satisfaction note recorded by the AO for assessment or jurisdiction u/s 153C - Although, both the parties have argued the issue extensively, in light of certain judicial precedents, but the issue become merely academic in nature, because the additions made by the AO towards unexplained investment for purchase of the property has been deleted on substantial ground and therefore, legal ground taken by the appellant, challenging the jurisdiction of the AO becomes infructuous. Thus, the ground of appeal taken by the appellant challenging the jurisdiction of the AO in light of judicial precedents, including the decision of Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT ] has been dismissed as infructuous.

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• 2025 (1) TMI 1229
  Admission of additional ground - Exemption u/s 10(15)(iv)(h) - interest income from investments in redeemable non-convertible bonds/debentures issued by public sector companies - HELD THAT:- The Supreme Court in in NTPC [ 1996 (12) TMI 7 - SUPREME COURT ] permits the ITAT to entertain additional grounds u/s 254 of the IT Act for the first time with the only caveat that the relevant facts are on record in respect of that item. In the instant case the relevant facts of investment in PSU Bonds/debentures etc are available in the audited balance sheet and was before the assessing officer. We find from the recent decision in the case of Siva Equipment (P.) Ltd. [ 2020 (2) TMI 371 - BOMBAY HIGH COURT ] which held that a taxpayer is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before the appellate authorities. In view of the above, we admit the additional ground raised. As investments in PSU Bonds and debentures are available in the audited accounts, the assessing officer needs to examine the same with regard to the eligibility of assessee s claim considering the eligibility criteria laid down in section 10(15)(iv)(h). For this purpose, we find it fit to set aside this issue to the file of the assessing officer for examining the claim of the assessee. Where the claim made is as per the law, the same should be allowed. The additional ground is allowed for statistical purpose Non-allowance of deduction u/s 80G - HELD THAT:- CIT(A), has not adjudicated the issue of allowance/disallowance u/s 80G although the assessee had taken this ground before the CIT(A). The assessee has claimed that the issue of 80G was set aside to the file of AO for verification in the assessee s own case by the ITAT in AY 2006-07 Following the earlier ITAT decision, we are of the considered view that the issue of 80G be set aside to the file of Assessing officer to decide on the issue. Computation of income as per Rule-2 of First Schedule of Section 44 - Determination of income for a life insurance company - HELD THAT:- As per rule 2 of the First Schedule to the Act, profits and gains of life insurance business has to be taken to be the annual average of the surplus arrived at by adjusting the surplus or deficit disclosed by the actuarial valuation made in accordance with the Insurance Act, 1938, in respect of the last inter valuation period ending before the commencement of the assessment year, so as to exclude any surplus or deficit included therein, which was made in any earlier inter valuation period. According this rule as is applicable from A.Y.1977-78, the surplus or deficit between two inter valuation periods disclosed by the actuarial valuation made in accordance with Insurance Act, 1938, can only be taken as income or loss of the period. The old Rule 2 which was in existence prior to amendment made by Finance Act, 1976 contains two methods of determining profits and gains of the 10 which has been allowed by the ITAT As no distinguishing decision has been brought to our notice, we, therefore, respectfully following the decision of the co-ordinate bench, dismiss all the grounds raised by the Revenue.

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• 2025 (1) TMI 1228
  Validity of assessment order u/s 153C as barred by limitation - As argued assessing officer has not passed the order u/s 153C in case of all these assessees, within the time limit, prescribed u/s 153B - HELD THAT:- The assessment should be completed within 9 months or 21 months, whichever is later. Therefore, taking the lead case for AY 2016-27 we note that assessment order was passed by the assessing officer, under section 153C read with section 143(3) of the Act, on 21.04.2021. The assessment order ought have been passed on 31.12.2020. Therefore, number of days of delay in passing the assessment order comes at 111 days. Assessment order ought to have been passed on (A) or (B), whichever is later, that is, on 31.12.2020. However, actual date of passing the assessment order in the assessee s, case, is on 21.04.2021, hence, assessment order passed by the assessing officer, under section 153C read with section 143(3), dated 21.04.2021, is barred by limitation, by 111 days, therefore, the assessment order, should be quashed, on this fact only. Law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim Expressio unius est exclusion alteris , meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible. Thus, as the assessment order was not framed within the time limit prescribed u/s 153B therefore, assessment order passed by the assessment officer u/s 153C r/w section 143(3) of the Act, is here by quashed, and consequently, we allow the appeal of the assessee.

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• 2025 (1) TMI 1227
  Cash seized during a search operation adjustment against the advance tax liability of the assessee - HELD THAT:- The section 132B of the Act prescribes as how the cash seized should be adjusted against the tax liability including existing tax liability and liability determined on completion of the search assessments orders / penalty order etc i.e. regular tax demand. Given that the search action in this case occurred in the financial year 2014 subsequent to the insertion of Explanation 2 its provisions are applicable to the facts of this case. Thus, the prayer of the assessee for adjustment of the seized case against advanced tax liability is not permissible and accordingly relevant prayer of the assessee is rejected. Adjusting the seized case against the self-assessment tax liability - It is evident that self assessment tax liability could be treated as part of the existing liability , but in the instant case, the assessee has apparently not included the said amount of the cash seized as part of his total income and computed the self-assessment tax liability corresponding to said income. Assessee communicated to the AO for offering of cash seized as income and requested for adjusting the tax due from the cash seized as the assessee did not have liquidity to discharge the tax liability. In the instant case before us, the learned counsel could not readily substantiate evidences in support of existence of identical circumstances, therefore, we feel it appropriate to set-aside the finding of the CIT(A) on issue in dispute and restore the matter back to the file of the AO for determining the issue of adjustment of self-assessment tax liability after verification of application filed by the assessee seeking such adjustment other documentary evidences to support that circumstances identical to the case of Arun Banal [ 2023 (6) TMI 39 - ITAT DELHI] existed in the case and then decide the issue in accordance with law. Interest charged u/s 220 in respect of regular tax demand consequent to assessment order - The assessee cannot be held as assessee in default for non-payment of the tax on time and no interest under section 220 can be charged from the assessee in such circumstances. Accordingly, we direct the AO to adjust the seized cash against the tax liability raised in notice for demand dated 30/12/2016 as said cash was already available with the Department for adjustment within the period of 30 days provided under said notice. We may clarify that this issue of adjustment against regular demand is to be considered by the AO if the assessee does not get relief on the issue of adjustment of cash seized against self assessment tax while verification of the issue self-assessment tax liability adjudicated by us in preceding paragraphs.

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• Customs

• 2025 (1) TMI 1226
  Seeking grant of bail - smuggling of cigarettes - challenge to summons issued under Section 108 of the Customs Act, 1962 - it was held by High Court that After approaching this Court by filing a Writ Petition challenging the notice issued under Section 108 of the Customs Act, which is not entertained by this Court, it is not proper on the part of the petitioners to approach this Court with a bail application. HELD THAT:- The Special Leave Petition is dismissed as infructuous reserving liberty to the petitioner herein to seek regular bail, if so advised.

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• 2025 (1) TMI 1225
  Valuation of export goods - Printed Circuit Boards -Rejection of declared value - redetermination of value - absolute confiscation - imposition of a significantly higher penalty in the subsequent Order-in-Original - HELD THAT:- This is not in dispute that there exists a statutory alternative remedy to the petitioner. This is also not in dispute that based on the same fact situation in the Order-in-Original dated 31.12.2020, penalty imposed was Rs.1,00,000/-, whereas in the second Order-in-Original it is enhanced to Rs.1,00,00,000/-. The Delhi High Court in ASHISH BANSAL VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (PREVENTIVE) [ 2023 (5) TMI 230 - DELHI HIGH COURT] opined that Considering that the petitioner has a remedy of appeal before the Customs Excise and Service Tax Appellate Tribunal (hereafter Tribunal ), we do not consider it apposite to examine the petitioner s challenge to the impugned order in this petition. However, given the manner in which the penalty has been computed and the financial condition of the petitioner, we consider it apposite to direct the Tribunal to consider the petitioner s appeal without any pre-deposit. The petitioner may prefer an appeal against the impugned Order-in-Original dated 31.10.2022 within three weeks from today. If the appeal is preferred within the aforesaid time, the appellate authority shall consider and decide it on merits and shall not dismiss it on the ground of delay - Considering the fact that the petitioner suffered a penalty of Rs.1,00,000/- in the previous round, which is enhanced to Rs.1,00,00,000/-, in the peculiar factual backdrop of this matter, it is deemed proper to permit the petitioner to pre-deposit on the basis of the penalty of Rs.1,00,000/- before the appellate authority. However, this will not have any effect on merits of the matter and the appellate authority will be free to decide the appeal on its own merits. Conclusion - The petitioner is allowed to pre-deposit based on the initial penalty of Rs.1,00,000/-, rather than the enhanced amount, ensuring this does not affect the merits of the appeal. Petition disposed off.

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• 2025 (1) TMI 1224
  Seeking change of name of the Company - tax exemption under the Special Economic Zones Act, 2005 - HELD THAT:- The stand of the petitioner regarding change of name of Company is not accepted mainly on the ground that original certificate issued by Registrar of Companies was not produced by the petitioner. A plain reading of impugned order shows that the petitioner submitted copy of relevant certificate issued by the competent authority showing the change of name of the company. The said certificate is disbelieved by holding that certified copy of the same was not filed. No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar. No reasons are assigned as to why true/photocopy of certificate is to be disbelieved. Similarly, there is no iota of discussion whether the petitioner deserves any exemption for functioning in SEZ. These relevant aspects are required to be looked into. Conclusion - i) No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar. No reasons are assigned as to why true/photocopy of certificate is to be disbelieved. ii) The matter remanded back to the same authority for reconsideration. Petition disposed off by way of remand.

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• 2025 (1) TMI 1223
  Seeking of release 2091 bags /104000 KGs of Sodium Carbonate (Sajji Khar) under Bill of Entry No.7757409 on a provisional assessment basis at the declared value - alleged mis-declaration of Sodium Carbonate as Arecanuts - HELD THAT:- It is open to the petitioner to submit an additional representation for issuance of Detention and Demurrage Free Certificate . If any, such representation is made, the same would be considered by the respondents and orders shall be passed on merits and in accordance with law with regard to Detention and Demurrage Free Certificate , within a period of two weeks from the date of receipt of a copy of this order, after affording the petitioner, a reasonable opportunity of hearing. It is open to the petitioner to make a request for grant of access to the Assistant Drug Controller to inspect the consignment/goods for issuance of aforesaid certificate. If such request is made, the appropriate authority would provide access to the Assistant Drug Controller to inspect the consignment/goods within 48 hours of such request. On such examination being made by the Assistant Drug Controller and if No Objection Certificate is issued by the Assistant Drug Controller. Petition disposed off.

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• 2025 (1) TMI 1222
  Levy of penalties u/s 112(a)(i) and Section 114AA of the Customs Act, 1962 - smuggling of cigarettes concealed as ladies garments without statutory health warnings - violation of the Cigarettes and Other Tobacco Products Act, 2003 - HELD THAT:- The money transaction details available in the Bank Statements are due to their normal business on account of trading of cigarettes and other tobacco products. They have no relation with the smuggled cigarettes. There is no evidence brought on record by the Revenue to substantiate the allegation that the transaction between M/s. Blue Water Agencies, the company of the appellant and the companies owned by Mr. Vivek Agarwal were related to illegal smuggling of cigarettes. In the absence of any corroborative evidence, the money transaction through bank between the companies of Mr. Vivek Agarwal and Appellant s company, M/s. Blue Water Agencies cannot be the ground to conclude the involvement of the appellant in the alleged smuggling of foreign cigarettes. From the documents available on record, it is observed that there is no evidence brought on record to indicate that the appellant had prior knowledge about the concealment of cigarettes in the consignments declared as ladies garments . Thus, this evidence cannot be the basis for imposing penalties on the appellant. The impugned order has confirmed the demand mainly on the basis of the statement dated 27.06.2022 of Mr. Vivek Agarwal - HELD THAT:- There is no other evidence brought on record regarding the conspiracy hatched by the appellant in relation to smuggling of the foreign brand cigarettes into the country. Since the main evidence relied upon by the adjudicating authority against the appellant is the statement of Shri. Vivek Agarwal, an opportunity to cross-examine the person who made that statement ought to have been given as provided under Section 138B of the Customs Act, 1962. However, the ld. adjudicating authority has not granted the opportunity for cross-examination of Mr. Vivek Agarwal. Accordingly, the provisions of Section 138B of the Customs Act, 1962 have been violated in this case. When any statement is used against an assessee, an opportunity for cross-examining the person who made such statement ought to be given to the assessee. Since the opportunity of cross examination has not been given to the appellant, the statement of Shri. Vivek Agarwal cannot be relied upon to implicate the appellant in the alleged smuggling of foreign brand cigarettes. Violation of principles of natural justice - HELD THAT:- In the case of ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [ 2015 (10) TMI 442 - SUPREME COURT] , the Hon ble Apex Court has held that denial of cross-examination would be a serious flaw - the statement of Mr. Vivek Agarwal cannot be relied upon to implicate the appellant in the alleged offence as the provisions of Section 138B of the Customs Act, 1962 have not been followed. Penalty - HELD THAT:- Penalty under Section 114AA can be imposed when the evidence available on record indicates that the appellant has made, signed or used, any declaration, statement or document which is false or incorrect. In this case, there is no evidence available on record indicate the involvement of the appellant in the alleged offence of smuggling of foreign brand cigarettes. There is no evidence available on record to implicate the appellant in the offence. The only evidence relied upon by the adjudicating authority to implicate the appellant, i.e., the statement dated 27.07.2022, cannot be relied upon, as the opportunity to cross examine the person who has given the statement was not granted to the appellant. This said statement has been given by another accused in this case, who could have implicated the appellant with a view to extricate himself from the alleged smuggling of cigarettes. Thus, the appellant cannot be penalised only on the basis of the statement given by another accused in this case. Conclusion - The evidence available on record does not indicate that the appellant had prior knowledge about the concealment of cigarettes in the consignments imported as ladies garments . Thus, the ingredients required for imposing penalty under Section 112(a) of the Act have not been established in this case. It is also observe that there is no evidence available on record indicating that the appellant has made, signed or used, any declaration, statement or document which is false or incorrect. Thus, the ingredients required for imposing penalty under Section 114AA of the Act have not been established in this case. Therefore, the penalties imposed on the appellant under both the above provisions/Sections are not sustainable in law. Penalties set aside - appeal allowed.

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• 2025 (1) TMI 1221
  Revocation of the Customs Broker License - forfeiture of security deposit - imposition of a penalty on the appellant - violations of the Customs Brokers Licensing Regulation (CBLR) 2018 - appellant had connived with importers to misdeclare the origin of imported goods or not. Whether the appellant as Customs Broker have violated Regulations 10(a), 10(d) 10(e) of Customs Broker License Regulations, 2018 (CBLR)? - HELD THAT:- Appellant as CB is bound by the documents given to him by the importers. Further, till date department has not been able to produce any evidence that any of the documents submitted at the time of clearance of the imported Areca Nuts are forged or false. No report from the Country of Origin i.e Sri Lanka or from the alleged countries i.e. Indonesia and Veitnam have been obtained - The task of verification of documents is of the departmental officers. Law also does not empower the CB to undertake any investigations. Hence this part of the allegation is without any basis and wrongful presumption that CB should have investigated the documents provided by the importers. Further, when law of the land states that COO certificates can not be challenged even by the Customs Authorities except by following a prescribed procedure, how can a CB challenge those documents and in particular when the certificates were supported by Bill of lading,Commercial invoice etc. None of these documents have been objected nor have been denied by the importers to have been provided to the appellant. Law does not require a custom broker to physically deal with the goods before the same are received in custom area. The Custom Broker operates on the basis of document supplied to him and in that context it can hardly be held that the documents/ details filed by the Custom Broker on the strength of documents supplied by the importers are wrong - there are no merit in confirmation of charge under Regulation 10(d) and 10(e)of the CBLR 2018. The same is therefore liable to be dropped. Violation of provisions of Regulation 11(n) of CBLR, 2018 - HELD THAT:- Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine - the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n). Thus, none of the provisions of CBLR, 2018 have been violated by the appellants. The findings to that extent are liable to be set aside. Whether the appellant/Customs Broker has connived with the importer and abetted the alleged act of misdeclaring the goods to be of Sri Lankan Origin? - HELD THAT:- The statement of appellant cannot be considered for want of any cogent corroboration for it as got retracted at the initial stage of seeking bail. There is no such evidence on record which may prove that COO from Sri Lanka, is a fake document that it was not issued by Sri Lankan Government. Thus the very basis of the allegations vanishes. In absence thereof, allegation of abetting the alleged imports by appellant being mastermind cannot at all sustain. The findings about retracted statement are wrong in light of the discussed case law while adjudicating Question No.1. Hence, appellant is wrongly alleged to be abetter/mastermind for such act/omission which department has failed to prove. There is also no evidence on record to prove that Arica nuts were being imported from Indonesia and black pepeers were being imported from Vietnam. In absence of any such documentary evidence the document issued by Sri Lankan Government (Certificate of Origin) is wrongly been doubted by the department. The sole statement of appellant himself alleging it to be his confession has wrongly been used against him while penalizing him. The adjudicating authority, while doing so, has acted in gross violation of Article 21 of the Constitution of India. Conclusion - The appellant did not violate any provisions of the CBLR, 2018, and there was no evidence of connivance or abetment in the alleged misdeclaration of goods origin. The impugned order is set aside - appeal allowed.

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• 2025 (1) TMI 1220
  Classification of import goods - whether the Appellant could have imported internal combustion engines meant for use in medium and heavy commercial vehicles covered under SION category C1059 by utilizing this transferrable DFIA license? - HELD THAT:- The exemption from Customs duty in respect of imports against DFIA licences are governed by N/N. 98/2009--Cus dated 11.09.2009. To the extent relevant, this notification stipulates that the exemption shall be granted provided that the description, value and quantity of materials imported are covered by the authorization, and the authorization is produced before the proper officer at the time of clearance. Certain additional restrictions are in place in respect of products specified in paragraph 4.32.3 of the Handbook of Procedures (Vol. I) of the Foreign Trade Policy (FTP). The SION category does not find any mention in the authorization at all. It is true that the export item name which is set out in a separate table titled item(s) details is identical to the description of the SION Category C969. However, the category code itself finds no mention in the authorization. Further, if anything, the category restriction is relevant only to the goods exported. There appears to be nothing on the authorization restricting the category of goods imported. It might be true, as the Revenue contends, that in the application for the authorization, the importer sets out the categories of goods to be exported and imported. However, the language or particulars of the application cannot be read into the authorization so as to restrict the scope of the authorization to a field narrower than that which the words of the authorization themselves contemplate. Circular No. 46/2007 dated 20.12.2007 of the CBEC indicates that it is only in respect of product specified in paragraph 4.55.3 of the Handbook that a correlation of technical characteristics, quality and specification of the inputs with the export products is required to be established. The circular goes so far, as to say that such correlation is not required to be established in other cases unless the SION prescribe the same. Conclusion - The Appellant cannot be expected to correlate its imports with the exports of the person to whom the license was originally issued. It is further found that there is nothing in the license which restricts the import of internal combustion engines only to such internal combustion engines as would have been used in the goods which are permitted to be exported by the authorization. No such restriction can be read in where the words of the authorization do not themselves create such a restriction. The impugned order therefore deserves to be set aside - appeal allowed.

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• 2025 (1) TMI 1219
  Refund of export duty paid by Vedanta Ltd. (formerly Sesa Goa Ltd.) on iron ore exports - export duty assessment was provisional or final - rejection of claim for interest on the ground that the refund was granted within 8 weeks from the date of the Calcutta High Court s order - rectification under Section 154 of the Customs Act - relevant date of interest - relevant rate of interest. Whether the assessment is Provisional, as is being claimed by the appellant or is Final, as is being claimed by the Revenue? - HELD THAT:- The Adjudicating authority after considering the Tribunal s no uncertain order, recorded the entire chronological event and took the stand that the appellant has filed the refund claim on 05.08.2022. In a carefully drafted order, he holds that the appellant has not opted for Provisional Assessment because of which no sample was drawn nor was any test conducted. Therefore, as per him, it is a case of Final Assessment. Thus, for all purposes, it is a mere case of rectification in view of the decision of the Tribunal and also to follow the procedure of Gangdhar Supreme Court ruling and the CBIC s circular 04/2012 Cus dated 17.2.2012. Whether this is a case of Section 154 Rectification of the Finally assessed order as is being claimed by the Revenue or is a case of finalization of assessment as is being claimed by the appellant? - HELD THAT:- Since lot of discussion has taken place and Tribunal and High Court have held that it is a case of omission and the rectification is required to be carried out, we take the view that it is a case of Section 154. Since the rectification was required to be carried out for the period 2007-2008 and all the documents were available with the Revenue by May 2009 itself, the Rectification should have been carried out based on the request made on 01.10.2009. No attempt was made to take up this request. Even after this matter reached the Commissioner (Appeals) and it was held by him that the issue will call for rectification under Section 154, his order was not followed - the Adjudicating authority has also gone on to decide the issue in terms of Section 154 and has cited the provisions of Section 27 while granting the refund. Whether any interest is payable to the appellant? - HELD THAT:- Admittedly, due to this inordinate delay, the appellant would have been compelled to borrow from banks on payment of interest - the Ranbaxy judgement [ 2011 (10) TMI 16 - SUPREME COURT ] of the Hon ble Supreme Court would be squarely applicable to the facts of the present case. This is a case where the erroneously excess Export Duty was collected from the appellant during the period 2007-2008. After following up from 2009 onwards for proper rectification of the assessment order and litigation at various forum, finally the refund was granted on 5.9.2024. In terms of Ranbaxy judgement, the appellant would be eligible interest on the refund amount granted to them. In the present case, the delay in taking up the issue for re-assessment by the Revenue was to the tune of more than 14 years. Hence, the decision of the Hon ble Supreme Cour in the cited case of Sandvik Asia [ 2006 (1) TMI 55 - SUPREME COURT ] is squarely applicable, where it was held that There cannot be any doubt that the award of interest on the refunded amount is as per the statute provisions of law as it then stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the Court has to take all relevant factors into consideration while awarding the rate of interest on the compensation. If they are found to be eligible to interest, what would be the relevant date of interest? - HELD THAT:- It is seen that the appellant has filed their first letter seeking the finalization of assessment on 26.05.2009 for the Export Duty paid during 2007-2008. They have subsequently requested for rectification in terms of Section 154 on 01.10.2009. The refund has been given to the appellant only after the rectification under Section 154 has been carried out, as can be observed from the OIO dated 5.9.2023 - The High Court in all their Orders and Tribunal in their order have taken cognizance of this OIA and have made specific reference that no further appeal was preferred by the Revenue against this OIA and in fact after about 5 years from this OIA, an OIO was passed. The subsequent events resulting in the High Court Orders and Tribunal orders holding that rectification under Section 154 also emanate basically from this OIA dated 11.10.2010 - 11.10.2010 should be taken as the date on which the consequential refund would accrue. Since the supporting documents were already available with the Revenue on 26.05.2009 [when the first letter was filed] and on 01.10.2009 [when the rectification request letter was filed], the Revenue could have completed the rectification/re-assessment within 3 months from 11.10.2010 [OIA order date]. After allowing the 3 months from 11.10.2010, the interest would be payable from 11.01.2011. The Revenue is directed to pay the interest from 11.01.2011 till 05/06.09.2023, the date on which the refund was paid. If the interest is payable what would be the rate of interest to be paid? - HELD THAT:- In the present case, the Export Duty was paid at the time of Exports and the excess Export Duty paid remained with the Revenue till it was refunded. In the OIO , it has been held that the appellant was not required to pay the Export Duty @ Rs.300 PMT and was required to pay the same @ Rs.50 PMT only. Thus the amount retained by the Revenue would be akin to the appellant making the payment during the course of investigation - the appellant is eligible to get the interest @ 12% per annum from 11.01.2011 to 5/6.09.2023. Conclusion - i) Though the appellant has claimed this to be a case of Provisional Assessment, duly finalized on 5.9.2023, the view cannot be accepted, since there is nothing to indicate that they have opted for Provisional Assessment. After filing their letter on 18.05.2009 [26.05.2009] seeking Finalization of Provisional Assessment, they themselves have requested for rectification in terms of Section 154. This request has been considered and endorsed by the High Court and Tribunal. ii) This is the case of rectification being carried out by the Revenue, in terms of Section 154 of Customs Act 1962, as directed by the Hon ble High Court, resulting in re-assessment Order being passed by the Adjudicating authority on 05.09.2023. iii) The case falls under the category (b) and the provisions of Section 27A are attracted and accordingly, interest is required to be paid. iv)The date of filing of the refund claim is being taken as 11.10.2010, when the OIA has been passed directing the Adjudicating authority to carry out the necessary rectification . After giving three months time from this date, the interest is payable from 11.01.2011 till 5/6.09.2023 when the refund amount was finally paid. v) The interest is payable @ 12 p.a. Appeal allowed.

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• Corporate Laws

• 2025 (1) TMI 1218
  Winding up of Company - Section 466 of the Companies Act, 1956 - applicability of principles of res judicata apply to the second application under Section 466 of the Companies Act, given the dismissal of a similar earlier application - HELD THAT:- The Courts in NILKANTA KOLAY VERSUS THE OFFICIAL LIQUIDATOR [ 1995 (8) TMI 327 - CALCUTTA HIGH COURT] have held that bona fide must be established before a stay on winding up proceedings can be granted. Mere consent of the creditors or an offer of full payment to them is insufficient. The Court must consider the interests of commercial morality, not merely the wishes of the creditors or contributories. The jurisdiction to stay can be used to revive the company or its business and not merely for the benefit of its creditors. This jurisdiction certainly cannot be used to acquire immovable properties or assets of the company at some throwaway price or at a price that bears no proportion to the price that the liquidator could have obtained at a free, fair, transparent public auction. The scope and import of Section 466 of the Companies Act and the principles on which the Company Court would exercise its powers to stay the proceedings in winding up either altogether or for a limited time on such terms and conditions as it thinks fit. The Appeal Court has held that Section 466(1) confers a discretion on the Court and not a mandate. The discretion must be exercised on the satisfaction that a stay of the proceedings in relation to winding up ought to be granted. The legislature has carefully used the expressions on proof to the satisfaction and ought to be stayed . Before the Court grants a stay, the statutory requirement is that there must be proof brought before the Court based on which it is satisfied that the proceedings ought to be stayed. There is no question of this Court for the first time considering the materials on record and deciding whether the discretion should be exercised for grant of stay under Section 466 of the Companies Act. Perhaps, on the ground that there was no substantial change of circumstances or that no material was placed on record to displace the strong findings recorded regarding the motives of the first and third Respondents, we would have declined to exercise our discretion and stayed the proceedings under Section 466 of the Companies Act. But that is, to some extent, besides the point. The impugned orders deserve to be set aside for failure to consider vital material. Conclusion - i) The principles governing the exercise of discretion under Section 466 of the Companies Act were not noticed and applied at either stage. ii) Mere settlement of the creditors or workers does not entitle any party to a stay of the winding up proceedings under Section 466 of the Companies Act. The stay on the winding-up proceedings of the said company is dissolved - the impugned orders set aside - appeal allowed.

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• 2025 (1) TMI 1217
  Validity of amendment to the Trust Deed by Respondent No.3, which replaced the Appellant as Principal Trustee - legality of actions taken by Respondent No.3 in convening a Board Meeting and revoking the Appellant s managerial powers - HELD THAT:- There exist extreme hostilities between entire family members and the Ld. Tribunal has also noted about the disputes inter se and went on to say its earlier orders of dated 19th December, 2024 and dated 27.12.2024 have not been complied with by either of the parties and both groups are trying to protect their own interest by changing management at their own will. The impugned interim order rather serves to maintain critical corporate stability. It preserves the legally constituted board, including independent directors, ensures uninterrupted banking relationships, and protects Respondent No.1 company s record and assets. Most notably, it maintains the Appellant s own position as a director of Respondent No.1. The interim order thus not only prevents an illegal takeover but also protects the interests of 2500 employees, banking relationships, and Respondent No.1 company s operational stability. The impugned order has been passed by the Ld. NCLT in exercise of its powers under Section 242(4) of the Act, whereby it is empowered to make any interim order it thinks fit for regulating the conduct of the company pending the final hearing of a petition filed under Section 241-242 of the Act. Conclusion - The interim orders upheld, maintaining the status quo ante regarding the company s management and shareholding structure. It is not required to interfere in the interim order of Ld. NCLT - The appeal is accordingly dismissed.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 1216
  Admissibility of application under Section 9 of the Insolvency and Bankruptcy Code (IBC) - barred by the limitation period or not - pre-existing dispute or not - service of demand notice. Maintainability on the grounds of limitation - multiples dates of default have been mentioned - HELD THAT:- On the question whether the Petition was filed within the limitation period, it is pertinent to note that the last part payment made by the CD on 17.02.2017 is undisputed. Accordingly, the limitation period was extended for 3 years from 18.02.2017, expiring on 17.02.2020. The Petition was admitted and filed on 17.02.2020, making it well within the limitation period. Even assuming, without prejudice, that the limitation period is reckoned from 17.02.2017 (the date of the last payment), the 3-year period would expire on 16.02.2020, which was a Sunday and a non-working day for the Tribunal and its registry. As per Section 4 of the Limitation Act, read with Rule 3 of the NCLT Rules, the Petition could be validly filed on the next working day, i.e., 17.02.2020, which is when it was indeed filed. Hence, the Petition is still within the limitation period - Appellant s grounds on limitation cannot be therefore accepted and the application is very much maintainable on this ground. Whether the Demand Notice in Form-3 dated 15.01.2020 was properly served or not? - HELD THAT:- CD claims that the OC falsely asserted in its affidavit that it did not receive a Reply to the Demand Notice. The CD claims that it duly responded to the Demand Notice, with supporting postal receipts provided as evidence. The tracking reports were unavailable due to the operational challenges during the COVID-19 pandemic. It is claimed that CD replied to the Demand Notice within the statutory period and raised a legitimate dispute regarding the claimed amount. Consequently, the Order violates Section 9(5) of the Insolvency and Bankruptcy Code (IBC), as the application is incomplete and OC has not received the reply to the demand notice and for that reason should be set aside by this Tribunal - there are no infirmity in the conclusion of the Adjudicating Authority on this hyper-technical ground raised by the Appellant. Pre-existing dispute or not - HELD THAT:- There is no material placed on record to show that the dispute existed between the parties much before the issuance of the Demand Notice. There is no correspondence between the parties to that effect. Further only after the service of Demand Notice and filing of Petition by OC, CD disputed it. Further, on the one hand, the Appellant contends pre-existing dispute, while on other hand, assumes an entirely contradictory position that the entire debt amount was paid by way of cash in instalments during the period of 03.05.2018 to 27.02.2019. Further, the CD claims to have passed entries of cash payments in its ledger annexed at Page No. 158 to 160 of APB while acknowledging debt payable by the CD for principal debt amount of Rs 11,69,948/- as on 01.04.2018. These are self-serving accounts of OC. Except for CD s ledger account, with large number of small value cash entries, without producing any evidence, including any cash receipts nothing else has been placed on record. The assertions of the Appellant cannot be, therefore, relied upon basis such material record. Hence, it can be safely concluded that there is no pre-existing dispute regarding the claim in hand. Conclusion - i) The application was filed within the limitation period, as the last payment extended the limitation period, and the application was filed timely. ii) The Demand Notice was properly served and that no pre-existing dispute was established. iii) The application was maintainable despite the OC being an unregistered partnership firm, as the bar under Section 69(2) of the Indian Partnership Act does not apply to insolvency applications. The Appeal is, therefore, dismissed and Section 9 proceedings against the CD must go on.

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• 2025 (1) TMI 1215
  Liquidation of the Corporate Debtor - CoC had not taken full initiatives to resolve the Corporate Debtor which is against the spirit of the Code - Section 7 application was admitted on forged documents - Request to Appellate Tribunal not to consider such additional document filed by the Respondent No. 1. The CoC had not taken full initiative to resolve the Corporate Debtor against the spirit of the Code - HELD THAT:- Section 33(2) of the Code leaves hardly any choice to the Adjudicating Authority, once the CoC decide with the 66% voting rights to liquidate the Corporate Debtor. In the present case, the resolution to liquidate was passed by 100% votes in CoC. Hence, there are no error in the Impugned Order. Section 7 application was admitted on forged documents filed by the Respondent No. 1 - HELD THAT:- The Section 7 application was admitted on forged documents filed by the Respondent No. 1 and the conduct of the Resolution Professional is not good as it accepted the claims of the Financial Creditor without verification. Additional documents of ledger accounts of SVC Bank were introduced to harm the Corporate Debtor - HELD THAT:- These documents were part of the judicial record and necessary for determining the validity of the Section 7 application. There are no merit in the Appellant s objections to the introduction of these documents. Alleged manipulation of record by Financial Creditor - HELD THAT:- No concrete evidenced has been reproduced by the Appellant to establish the said allegations. It is already noted that the documents produced by the SVC Bank clearly stipulate responsibilities of the Corporate Debtor as co-borrower and Corporate Guarantor. There are no merit in the submissions made on this account by the Appellant. Conclusion - i) The CoC s decision to liquidate, supported by 100% voting, was in compliance with Section 33(2) of the Code, which mandates liquidation if the CoC resolves to do so with the requisite majority. ii) There are no error in the Adjudicating Authority s order to liquidate, given the absence of assets and the lack of viable resolution options. There are no error in the CoC decision to the Liquidator of the Corporate Debtor which was accepted by the Adjudicating Authority in the Impugned Order - appeal dismissed.

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• 2025 (1) TMI 1214
  Exclusion of period from 12.04.2023 until 01.07.2024 from the period of implementation of the Resolution Plan approved by NCLT - effect of interim order, which restrained the Successful Resolution Applicant (SRA) from transferring any units, in the Resolution plan - HELD THAT:- The present is not a case where after approval of the Resolution Plan, the Applicant has not taken any steps towards the implementation of the Resolution Plan and has not infused any funds. It is the case of the Appellants that although an amount of Rs.10 crores was to be infused by the SRA. The fact that SRA has infused Rs.7 crores, is not even disputed and it is an admitted fact. In the Application, which was filed before the Adjudicating Authority, the SRA has given the details of various steps taken by it towards implementation of the Plan and amount spent by the SRA towards the implementation of the Plan - Huge amount has been spent by the SRA for obtaining the renewal. As noted above the SRA has also submitted an application to the State Environment Impact Assessment Authority for securing the grant of environment clearance and amount has been deposited where on 28.05.2024, the State Environment Impact Assessment Authority has recommended for grant of environmental clearance. Electricity connection has been restored by Dakshin Haryana Vidyut Nigam, Faridabad. The present is a case where approval of Resolution Plan was challenged before this Tribunal in four Appeal(s), in which Appeal(s), interim order was also passed on 12.04.2023 and Appeal(s) could be ultimately decided on 01.07.2024, rejecting the challenge to the approval of Resolution Plan by elaborate consideration. The period, which was sought to be excluded by the SRA is period from which interim order was started operating against the SRA. When the approval of Resolution Plan is challenged in the Appeal(s), and the issues remained sub-judice and pending consideration and an interim order was also passed by this tribunal, there are no error in the order of the Adjudicating Authority, excluding the period from implementation of the Resolution Plan, during which an interim order was operating against the SRA. As noted above, the SRA has moved an Application in the Appeal(s) for vacation of the interim order, which Application could not be decided and remained pending till the dismissal of the Appeal till 01.07.2024. The substantial steps were taken by the SRA to implement the Resolution Plan and various steps were taken by the SRA to implement the Plan as has been pleaded in the Application filed by the SRA as well as in the affidavit in the present Appeal. It is also noticed above that SRA is none-else than the Association of allottees, which is representing about 250 allottees. One of the Association of the allottees had also challenged the Resolution Plan, which Appeal was also dismissed. Conclusion - i) The interim order passed by this Tribunal clearly prohibited the SRA to realize the aforesaid amount of Rs.50 crores. ii) The interim orders affecting the financial execution of a Resolution Plan justify the exclusion of time from the implementation timeline. iii) There are no error in the order passed by the Adjudicating Authority dated 28.08.2024 excluding the period from 12.04.2023 to 01.07.2024, during which the interim order passed by this Tribunal in the Appeal(s) challenging the approval of Resolution Plan was in operation. Appeal dismissed.

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• Service Tax

• 2025 (1) TMI 1213
  Classification of services - Works Contract Service or not - service of construction, installation maintenance of petrol bunks owned by M/s. HPCL and M/s BPCL - recovery of tax not paid/levied u/s 73 (1) of the Finance Act, 1994 - levy of penalty under Sections 76, 77 and 78 of the Finance Act, 1994. HELD THAT:- A perusal at the order is indicative of an unequivocal fact that after issuance of the SCN, the petitioner has paid the entire amount of Service Tax including the penalty, long before the issuance of SCN in the year 2009 itself. The SCN comes to be issued in the year 2013. The proceedings are instituted after the receipt of the entire amount of arrears and default Service Tax and penalty on the score that the entire penalty or interest is not paid by the petitioner. The order quoted captures the fact that the amount of Rs.3,19,129/- is also appropriated by the authority during the investigation towards the demand. Therefore, there is nothing today to be paid by the petitioner as long before the SCN, an amount of Rs.20,64,849/- had been paid which is recorded by the authority. The order also records that it was the payment of service tax and interest that was paid by the petitioner and later on account of the proceedings, an amount of Rs.3,19,129/- is also appropriated. The proceedings have gone on only to the satisfaction of the respondents Department as there was nothing to be paid or recovered from the hands of the petitioner. The proceedings itself were redundant insofar as the principal amount was concerned and the interest is also paid by the petitioner or appropriated by the department from the petitioner. Reference being made to the judgment rendered by the Division Bench of this Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [ 2011 (9) TMI 114 - KARNATAKA HIGH COURT] , in the circumstance becomes opposite and the Division Bench interpreting Sections 73 and 76 of the Finance Act, 1994 has held that The assessee has paid both the service tax and interest for delayed payments before issue of show cause notice under the Act. Sub-sec. (3) of Section 73 of the Finance Act, 1994 categorically states, after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-sec. (1) in respect of the amount so paid. Therefore, authorities have no authority to initiate proceedings for recovery of penalty under Sec. 76 of the Act. Conclusion - i) The classification of the petitioner s services under Works Contract Service confirmed. ii) The impugned orders and notices quashed, acknowledging that the petitioner had settled all dues prior to the show cause notice, rendering further proceedings redundant. Petition allowed.

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• 2025 (1) TMI 1212
  Eligibility for a rebate on the provision of investment advisory services classified under banking and other financial services as per Section 65(105)(zm) of the Finance Act, 1994 - rebate under N/N. 11/2005-ST dated 19.04.2005 - HELD THAT:- It is noted that sub-rule (2) of Rule 3 of Export of Services Rules has laid down a condition that unless a payment is received in convertible foreign exchange, the service is not treated as export. Further, there is one more condition of provision of export of service and that is specified for various services in various clauses of sub-rule (1) of Rule 3 ibid. For the service provided by the appellant which is classifiable under Section 65(105)(zm), clause (c) of clause (iii) of sub-rule (1) of Rule 3 of Export of Services Rules, 2005 is applicable and according to the said provision, the export of taxable service is on provision of such service to a recipient located outside India. In the present case the invoice is raised on 29.06.2012 which is the date prior to the date on which Notification No. 11/2005-ST was rescinded. The order passed by the original authority allowing refund was in accordance with law - Appeal allowed.

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• 2025 (1) TMI 1211
  CENVAT Credit - input services used for providing assistance in trading of the goods - applicability of provisions of sub-rule (7) of Rule 4 of Cenvat Credit Rules, 2004 - SCN issued without allocation of mind - extended period of limitation - penalties. Extended period of limitation - HELD THAT:- The original authority nor the show cause notice indicates as to which information was required by Revenue in accordance with which provision of law that was not filed or submitted by the appellant and how there was wilful misstatement or suppression of fact to invoke extended period of limitation. In the absence of any such finding by the original authority, the present proceedings are hit by limitation and that ground alone is enough for setting aside the impugned order. Disallowance of CENVAT Credit on the ground that cenvat credit was not admissible since the appellant was engaged in trading of the goods - HELD THAT:- There is no finding that the appellant has not received the input services on the basis of which the appellant has taken the cenvat credit nor there is any finding that the said input services did not suffer service tax. Therefore the appellant had received input services from various input service providers. The provisions of Cenvat Credit Rules do not have any provision wherein the cenvat credit availed lapses. There is no examination as to how the said input services were not eligible for providing output services such as colocation services, hosting services etc. Therefore, the finding of the original authority that cenvat credit of Rs.634.05 crores were not admissible to the appellant has no basis and, therefore, the said finding is set aside. The appellant had received input services from various input service providers. The provisions of Cenvat Credit Rules do not have any provision wherein the cenvat credit availed lapses. There is no examination as to how the said input services were not eligible for providing output services such as colocation services, hosting services etc. Therefore, the finding of the original authority that cenvat credit of Rs.634.05 crores were not admissible to the appellant has no basis and, therefore, the said finding is set aside. Demand on the advances received from customers - HELD THAT:- It is noted that by the time the show cause notice was issued, on 04.04.2017 the said amount was paid back. Therefore, it was not available with the appellant as advances from customers as on the date of issue of show cause notice. Therefore, the demand on account of the same amounting to Rs.78.08 crores confirmed by the original authority does not sustain. Demand of service tax of Rs.583.26 crores under proviso to sub-section (1) of Section 73 of Finance Act, 1994 - HELD THAT:- The issue of valuation and taxability both are involved in the present issue. As can be seen from the record, the current liability which stood as on 31.03.2018 was Rs.3888.40 crores. The operation of Chapter V of Finance Act, 1994 which included charging section for charging of service tax and Section 67 for determination of value for assessment of service tax ceased to exist prospectively with effect from 01.07.2017. Therefore, both the provisions, viz. charging section i.e. Section 66B and Section 67 on valuation of taxable services for charging service tax were not operational for levy and collection of service tax as on 31.03.2018 and, therefore, confirmation of demand of Rs.583.26 is not sustainable. Recovery of interest on payment of service tax - HELD THAT:- On the basis of Rule 3 of Point of Taxation Rules which provides that point of taxation shall be the date of invoice or the date of payment whichever is earlier, the original authority has ordered for recovery of interest on payment of service tax of Rs.52.45 crores which was paid during the year 2016-17. An adjustment was made in balance of unsecured loans amount availed from M/s. Reliance Infocom Engineering Pvt. Ltd. for receipt of payment in respect of the invoices raised for provision of servie and the said loan was received by the appellant in 2014 and, therefore, learned original authority ordered for recovery of interest from the earlier period - the provisions of Rule 3 of Point of Taxation Rules are not applicable in the present case. Therefore, the order by the original authority for recovery of interest on payment of service tax of Rs.52.45 crores does not sustain. Interest and penalties - HELD THAT:- Since no part of the order-in-original either disallowing cenvat credit or confirming the demand of service tax sustains the order for recovery of interest on the same and imposition of penalties does not sustain. Conclusion - CENVAT credit cannot be denied without substantial evidence of misuse or non-compliance with the Cenvat Credit Rules. The advances incorrectly classified due to accounting errors, and subsequently rectified, do not attract service tax Demand of interest and penalties do not sustain. The present proceedings are hit by limitation and that ground alone is enough for setting aside the impugned order. Appeal allowed.

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• 2025 (1) TMI 1210
  CENVAT Credit - input services - gardening services - excess availment of Cenvat credit on capital goods, in violation of the Cenvat Credit Rules - discrepancies between the credit register and ST-3 returns - availment of credit without any supporting document in violation of Rule 9(5) of the CCR - short-paid Education Cess and Secondary Higher Education Cess by cross-utilizing available credit - interest on late payment of service tax for September 2011 - Short payment of Service tax during the period from April 2012 to June 2012 - Non-payment of amount under Rule 6(3) of the Credit Rules related to exempted village panchayat telephones - Non-payment of amount under Rule 3(5A)(b) of the Credit Rules on sale of capital goods as scrap - Non-payment of interest due to date of tax liability as per the POT Rules - extended period of limitation. CENVAT Credit on the basis of the difference noticed in the ST-3 returns and the Cenvat Credit Register - HELD THAT:- The difference between the amount of Cenvat credit availed as reflected in the Cenvat Credit Register than the one recorded in the ST-3 returns is an admitted fact, however, the contention of appellant is that the Cenvat Credit Register shows that 100% credit was taken by the appellant during the period in dispute in their credit register but only 50% thereof as has been utilized is reflected in their ST-3 returns. The difference is due to the balance 50% of the amount which was not utilized and therefore was not shown in the ST-3 returns - The perusal makes it clear abundantly that it was the statutory mandate on the appellant-assessee to utilize only 50% of the Cenvat credit availed on the capital goods. The department has not produced any evidence to falsify the same. In the case of J.K. TYRE INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [ 2016 (11) TMI 911 - CESTAT BANGALORE - LB] , Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty. The noticed difference was statutorily permissible and has been denied to be ground for raising the demand of reversal. The unutilized credit has clearly been held as good as the non availed Cenvat credit. In the light of this discussion, there are no justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside. CENVAT credit - Input services including the security services are not the eligible input services - availment of Cenvat credit on the input services has been denied for the reason that there is no mention of supply of any security services on the invoices based whereupon the Cenvat credit has been availed and no evidence about supply of skilled manpower - HELD THAT:- The difference of supply of unskilled and skilled labour has wrongly been created by the adjudicating authority below as the same is not relevant to decided as to whether the service provided shall qualify for input service or not. It appears to be an admitted fact that manpower was supplied by the service provider to M/s. BSNL for being deployed at various offices of BSNL/appellant. The work power irrespective skilled or unskilled was meant to facilitate M/s. BSNL to render their output telephonic services. The service provided is eligible input service. Hence, denial of availment of Cenvat credit on the eligible input services is wrong. The findings in the order under challenge are liable to be set aside to this extent as well. The demand of Cenvat credit amounting to Rs.59,94,339/- is therefore set aside. Cenvat credit availed on capital goods was required to be reversed in terms of Rule 3(5A) of Cevat Credit Rules, 2004 - HELD THAT:- The Rule 3(5A) cannot apply in a situation where Cenvat credit has not been availed on capital goods. In the present case, the appellant s plea is that the scrap material in question pertains to those capital goods on which the appellant had not availed the Cenvat credit, as majority of those capital goods were purchased prior to 2004 i.e. prior the enactment of Cenvat Credit Rules. The details of those capital goods were duly been provided by the appellants. The onus was of the department to prove that the appellant has availed the Cenvat credit on the capital goods which later got cleared as scrap but there is no such evidence produce. Hence, there is no rebuttal to the said contention of the appellant - The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable. Extended period of limitation - HELD THAT:- The appellant had been regularly filing its ST-3 returns and its records were being regularly audited by the department. Thus, the entire material was already to the notice of the department. In such circumstances, the appellant cannot be held accountable for not disclosing the activity of making provision made by it, specifically, when the same was not required in the law. It is held that suppression of facts has wrongly been alleged against the appellant - This Tribunal in the case of INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [ 2013 (9) TMI 310 - CESTAT AHMEDABAD] held that PSU cannot have mala fide intentions for non-disharge of duty and there cannot be an allegations of intention to evade duty. Hon ble High Court of Punjab Haryana in the case of COMMISSIONER VERSUS MARKFED REFINED OIL ALLIED INDUS [ 2009 (7) TMI 1204 - PUNJAB AND HARYANA HIGH COURT] held that once the assessee is government organization, it is not easy to infer any evasion of duty much less its intention to do so - The suppression of facts was wrongly alleged, and the extended period for issuing the show cause notice was unjustified. Conclusion - i) There are no justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside. ii) The work power irrespective skilled or unskilled was meant to facilitate M/s. BSNL to render their output telephonic services. The service provided is eligible input service. Hence, denial of availment of Cenvat credit on the eligible input services is wrong. The findings in the order under challenge are liable to be set aside to this extent as well. iii) The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable. iv) The suppression of facts was wrongly alleged, and the extended period for issuing the show cause notice was unjustified. Appeal allowed.

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• 2025 (1) TMI 1209
  Recovery of wrongly taken/availed Cenvat credit of Input Services - typographical error in the AG Audit report/SCN vis- -vis. the challan numbers - HELD THAT:- It is a settled law that the Cenvat credit scheme is a beneficial scheme for the taxpayers and the benefit of this scheme cannot be blocked or taken away from the taxpayers on technical and procedural grounds. The appellate authority failed to appreciate that both Service Tax Payable Registers and Service Tax Credit Registers were signed by authorized representative at the end of each month where summary of the transactions of the month was prepared and tabulated at the month end. It appears that the appellate authority has overlooked the signatures in both the registers in discarding these registers as merely a piece of paper. The objection of the appellate authority that the registers were maintained manually is without any basis. He failed to appreciate that the Government has not mandated that records of Service Tax Payable Register and Service Tax Credit Register should be maintained by the taxpayer or on other electronic device. These records are being maintained by the appellant since beginning and no objection was raised by the Department or by the Audit Team. Hence the objection of the appellate authority to the effect that the registers are maintained manually by the appellant is without any valid basis and the same is not sustainable in the eyes of law. Disallowance of credit for want of the correct challan - HELD THAT:- The challan number in show cause notice (28067) is nothing but a typographical error. Substantial benefit which is otherwise available to the appellant cannot be denied merely on the basis of the typographical error that too, committed at the end of the department. Similar error has been committed with respect to challan filed with Entry No. 1669 dated 06.07.2017. Only one challan admittedly pertains to the said entry. Appellant has claimed it to be the Challan bearing No. 29935 dated 06.07.2017. For the same reason as above mentioning of 29936 as challan number is held to be nothing but a typographical error. Conclusion - The procedural or technical errors, such as typographical mistakes, should not hinder the entitlement to Cenvat credit, especially when the appellant provides substantial evidence to support their claim - credit remains allowed. Appeal allowed.

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• 2025 (1) TMI 1208
  Applicability of Service Tax on the markup charged by the appellant, M/s Balaji Integrated Shipping India Pvt Ltd., on ocean freight services provided to their clients - HELD THAT:- Reliance placed on BIZSOLINDIA SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE - III [ 2016 (5) TMI 134 - CESTAT MUMBAI] , wherein the Tribunal considered that since the appellant has been charging more than the expenditure incurred by him as pure agent, while billing the client, he was liable to Service Tax. This reliance by the Commissioner (Appeals) in the impugned order is misplaced, inasmuch as the issue here is that the appellants were trading in space, whereby, they were buying in bulk and then selling to different clients in due course as per their requirement. While selling, they were charging more than what they have paid to the shipping lines, etc. The appellant never said that they are acting as pure agent for this charge. In so far as the markups are concerned, admittedly there is no separate Service Tax liability on the ocean freight, which has been considered as not chargeable to Service Tax. The markup in respect of the activity, which is not chargeable to Service Tax cannot be fastened to some other activities without having clear evidence that there was some service provided by them in integrated manner. Therefore, the profit earned on account of trading in space cannot be added to the gross value of other services without bringing sufficient evidence to support that this was a ploy adopted by the appellant to charge towards the CFS charges by suppressing the actual value of CFS. No such specific charges have been made out in the SCN. Conclusion - The markup on ocean freight constitutes a trading profit, not a service charge, and thus is not subject to Service Tax. Appeal allowed.

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• 2025 (1) TMI 1207
  Liability of appellant, a property developer, to pay service tax on the amounts received as consideration from Customers towards rendering the said service - Construction of Residential Complex Service - period from April 2009 to June 2010 - levy of penalty. Whether the Appellant is liable to pay service tax under the construction of residential complex service? - HELD THAT:- The issue is no more res integra as this Tribunal had in respect of the same issue involving the Appellant, for earlier period from 16.06.2005 to 31.03.2009 [ 2019 (3) TMI 1389 - CESTAT CHENNAI ] set aside the demand of service tax on construction of residential complex service. It is also found that the actual service with regard to construction of flats was rendered by M/s. Golden Homes Pvt. Ltd., a contractor employed by the Appellant for rendering the service on a turnkey basis in terms of the Turnkey Project Contract, in terms of agreement dated 14.04.2004 entered by the Appellant with the said contractor. Therefore, any demand of service tax from the Appellant who is the promoter is not legally proper and sustainable in the eyes of law. Levy of penalty - HELD THAT:- The penalty imposed is unjustified. Conclusion - The appellant was not liable for service tax under the Construction of Residential Complex Service and that the penalty imposed was unjustified. Appeal allowed.

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• 2025 (1) TMI 1206
  Benefit of reduced service tax liability in terms of N/N. 30/2012-ST dated 20.03.2012 - appellant is a cooperative society - service tax on amounts received as reimbursements, such as salaries to guards, PF, and ESI - Invocation of Extended period of limitation. The demand of service tax denying appellant the benefit of N/N. 30/2012 date 20.03.2012 - HELD THAT:- The table given in the notification, Para B thereof, the Entry No. 8 exempts the services provided by way of supply of manpower for any person to the extent of 75% which has to be paid by the service recipient. The appellant admittedly is a co-operative society registered under Rajasthan Co-operative Society Act, 2001. The copy of certificate of registration is also produced by the appellant. There is no evidence to the contrary by the department. In the light of above observations with respect to N/N. 30/2012, the appellant being a co-operative society was very much eligible for the abatement/exemption of 75% of the tax liability. The Order-in-Original has denied the said exemption holding the appellant is not the Association of Person . The said comparison is not required for the purpose of the impugned notification. It is an admitted fact that 25% of tax liability has been discharged by the appellant. In light of this discussion the confirmation of remaining 75% of the gross value as service tax from appellant is not sustainable. The demand of service tax on the amount claimed to have been received as pure agent and reimbursable - HELD THAT:- The issue stands already decided by Hon ble Supreme Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2018 (3) TMI 357 - SUPREME COURT] . In light of the said decision the demand on the amount received as pure agents or on the amount of reimbursement is also not sustainable. Order to that extent is also liable to be set aside. Invocation of Extended period of limitation - HELD THAT:- The appellant was not liable to the tax as has been proposed by the impugned show cause notice and has been confirmed by the impugned order. Hence, the question of evasion of tax becomes redundant. Also no question arises with the appellant to have an intent to evade the same. Accordingly, the extended period has wrongly been invoked. Conclusion - The cooperative societies are entitled to specific tax abatements under N/N. 30/2012-ST and that reimbursements do not constitute taxable service value. The extended period has wrongly been invoked. Appeal allowed.

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• 2025 (1) TMI 1205
  Classification of services - intermediary services or not - applicability of Rule 9 of Place of Provision of Service Rules, 2012 - denial of benefit of export of service - HELD THAT:- The arrangement between the Respondent and their overseas clients and Indian buyers of the goods are not in dispute. All the facts as stated clearly points out that there is only a by-party agreement with regards to the identification and introduction of prospective buyers for their foreign clients. There are no tripartite agreement. Mumbai Bench has in case of IDEX INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST, MUMBAI EAST [ 2023 (2) TMI 482 - CESTAT MUMBAI] has held that The supplier of main service may decide to outsource the supply of main service, either fully or partly, to one or more sub-contractors. Such sub-contractor provides the main supply, either fully or a part thereof and does not merely arrange or facilitate the main supply between the principal supplier and his customers and therefore clearly not an intermediary. Who is an intermediary and what is intermediary service has been clarified by Central Board of Indirect Taxes and Customs (C.B.I. C.) vide Guidance Note dated 20-6-2012 and under GST regime also a clarification has been issued by C.B.I. C. on 20-9-2021 both of which are in line with the discussions made hereinabove about intermediary . In view of the facts involved herein the appellant cannot be termed as an intermediary. In case of M/S. CUBE HIGHWAYS AND TRANSPORTATION ASSETS ADVISOR PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER CGST DIVISION ORS. [ 2023 (8) TMI 980 - DELHI HIGH COURT] , Hon ble Delhi High Court observed that implicit in the concept of an Intermediary that there are three parties, namely, the supplier of principal service; the recipient of the principal service and an intermediary facilitating or arranging the said supply. Where a party renders advisory or consultancy services on its own account and does not merely arrange it from another supplier or facilitate such supply, there are only two entities, namely, service provider and the service recipient. In such a case, rendering of consultancy services cannot be considered as Intermediary Services or services as an Intermediary . Conclusion - An intermediary requires a tripartite arrangement, which was absent in this case. The Respondents provided services directly to their overseas clients, not facilitating a supply between two parties. The services provided on one s own account do not constitute intermediary services. In absence of any such tripartite agreement there are no merits in the appeal filed by the Revenue - appeal dismissed.

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• 2025 (1) TMI 1204
  Levy of service tax - discount/commission/incentives received from M/s. Vodafone Digilink by way of marketing, selling and distribution of Vodafone products - HELD THAT:- In Chote Lal Radhey Shyam [ 2015 (11) TMI 979 - CESTAT ALLAHABAD] , a Division Bench of this Tribunal while examining this issue, held that in this case, BSNL had already paid service tax on the sim cards and recharge coupons sold to the franchisee and again demanding service tax from the franchisee would amount to double taxation which is not permissible in law. Secondly, we find that the appellant is only engaged in purchase and sale of sim cards and recharge coupons and his relationship with BSNL is of principal-to-principal basis. The appellant cannot be termed as an agent of BSNL. Conclusion - The appellant was not liable for service tax on the commissions or incentives received from Vodafone. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 1203
  Condonation of delay of 205 days in filing a revision application under Section 28(2) of the Uttar Pradesh VAT Act - sufficient cause for delay present or not - HELD THAT:- The record shows that the limitation for filing the revision was up to 23.09.2023, but the matter was presented, for seeking permission for filing the revision, before the legal committee on 18.10.2023 to which no proper explanation has been submitted and even after the receipt of the permission for filing of the revision on 20.11.2023, , the revision has not been filed immediately without any further delay. In the application, various dates have been mentioned but the copy of the letters have been annexed surprisingly for the first time in the rejoinder affidavit trying to justify the delay. However, the emphasis has been made that the officers were busy in finalizing the proceedings of Assessment Years 2017-18, 2018-19 2019-20, but no proper explanation for day to day delay was submitted after getting the permission from the legal committee for filing the revision in October, 2023. This Court in the case of STATE OF U.P. AND 3 OTHERS VERSUS ARPITA SHUKLA AND 2 OTHERS [ 2025 (1) TMI 1091 - ALLAHABAD HIGH COURT] .] has not condoned the delay of 179 days. It was held in the case that The affidavit, which has been filed, does not give sufficient cause for the delay of 179 days in filing the appeal inasmuch as there are large gaps in affidavit wherein the period spent between 22.5.2024 till 13.9.2024 has nowhere been explained/adverted to despite, as noticed hereinbefore, the fact that the Court had granted only three months for the compliance. The manner in which the direction including time line, as indicated by the Court, has been taken and thereafter also the proceedings of the matter at snail pace cannot be countenanced in a case, wherein the direction by the Court only pertains to reconsideration of the matter by the appellants. Conclusion - The reasons provided by the revisionist were insufficient to justify the delay. As a result, the delay condonation application was dismissed, leading to the dismissal of the revision application itself. The instant revision fails as no proper explanation has been submitted for condoning the delay in filing the instant revision, hence the delay condonation application is rejected.

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