TMI Tax Updates - e-Newsletter
February 1, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Securities / SEBI Insolvency & Bankruptcy FEMA PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Non-Profit Organizations Under Section 8 of the Companies Act: A Complete Guide

   By: neha neha

2. UNIT IN A SPECIAL ECONOMIC ZONE – CHANGE IN NAME OF THE COMPANY

   By: DR.MARIAPPAN GOVINDARAJAN

3. RBI Master Direction on Import of Goods and Services

   By: YAGAY andSUN

4. REX for European Union – GSPCertificate of Origin

   By: YAGAY andSUN

5. PAS 6 Applicability for Non-Listed Companies: What You Should Know

   By: Ishita Ramani

6. High Court remands back matter relating to levy of GST on transfer/assignment of Leasehold rights directing Department to consider Gujarat HC Judgment

   By: Bimal jain

7. Imports from Least Developed Countries (LDCs)

   By: YAGAY andSUN

8. Duty Free Tariff Preference (DFTP) Scheme

   By: YAGAY andSUN

9. Import and Export under CITES

   By: YAGAY andSUN

News

1. Eco survey calls for Ease of Doing Business 2.0 but silent on GST 2.0, ending 'tax terrorism': Cong

2. SERVICE SECTOR'S CONTRIBUTION TO TOTAL GVA RISES FROM 50.6% IN FY14 TO 55.3% IN FY25: ECONOMIC SURVEY 2024-25

3. Ground Level Agriculture Credit Disbursement reaches 19.28 lakh crore for FY 2024-25 with special focus on allied activities

4. SHARE OF GOVERNMENT HEALTH EXPENDITURE IN THE TOTAL HEALTH EXPENDITURE HAS INCREASED FROM 29.0 % TO 48.0 % BETWEEN FY15 AND FY22: ECONOMIC SURVEY 2024-25

5. GOVERNMENT WELFARE SCHEMES SPUR CONSUMPTION AND INCOME GENERATING ACTIVITY IN LOW-INCOME HOUSEHOLDS, FAVOURABLY IMPACT STANDARD OF LIVING BY REDUCING INEQUALITY: ECONOMIC SURVEY 2024-25

6. GOVERNMENT’S THRUST ON IMPROVING THE QUALITY OF LIFE IN RURAL AREAS TO ENSURE EQUITABLE AND INCLUSIVE DEVELOPMENT: ECONOMIC SURVEY 2024-25

7. 7.75 CRORE KISAN CREDIT CARDS OPERATIONAL AS OF MARCH 2024: ECONOMIC SURVEY 2024-25

8. COVERAGE OF IRRIGATION AREA INCREASED BETWEEN FY16 AND FY21 FROM 49.3 PER CENT TO 55 PER CENT OF GROSS CROPPED AREA: ECONOMIC SURVEY 2024-25

9. INDIA’S AGRICULTURE SECTOR DEMONSTRATES RESILIENCE, AVERAGE GROWTH RATE OF 5 PER CENT DURING FY17 TO FY23: ECONOMIC SURVEY

10. INDIAN ECONOMY RECORDS STEADY CREDIT GROWTH; BANKS POST HIGHER PROFITABILITY, LOWER NPAs: ECONOMIC SURVEY 2024-25

11. SERVICE SECTOR'S CONTRIBUTION TO TOTAL GVA RISES FROM 50.6% IN FY14 TO 55.3% IN FY25: ECONOMIC SURVEY 2024-25

12. REDUCTION IN RETAIL INFLATION FROM 5.4 % IN FY24 TO 4.9 % IN FY25

13. CAPACITY ADDITION IN PHYSICAL CONNECTIVITY SECTORS STAYS ON COURSE DURING FY25: ECONOMIC SURVEY 2024-25

14. ECONOMIC SURVEY UNDERLINES THE IMPORTANCE OF PRIVATE PARTICIPATION IN INFRASTRUCTURE SECTOR TO REALIZE VIKSIT BHARAT@2047

15. LABOUR MARKET INDICATORS SHOW SUBSTANTIAL IMPROVEMENT IN LAST FEW YEARS: ECONOMIC SURVEY 2024-25

16. GOVERNMENT IS IMPLEMENTING THE MICRO AND SMALL ENTERPRISES-CLUSTER DEVELOPMENT PROGRAMME (MSE-CDP) TO DEVELOP CLUSTERS ACROSS THE COUNTRY: ECONOMIC SURVEY 2024-25

17. GOVT CAPITAL EXPENDITURE ON KEY INFRA SECTORS GROWS AT 38.8 PERCENT BETWEEN FY 20 AND FY 25: ECONOMIC SURVEY 2024-25

18. DEGREE OF INDUSTRIALIZATION VARIES ACROSS STATES; SOME STATES BETTER POSITIONED TO LEVERAGE THEIR INDUSTRIAL SECTORS TO GENERATE HIGHER INCOME LEVELS FOR THEIR POPULATIONS: ECONOMIC SURVEY 2024-25

19. INDUSTRY: ALL ABOUT BUSINESS REFORM

20. BY LEVERAGING ITS YOUNG, DYNAMIC, AND TECH-SAVVY POPULATION, INDIA HAS THE POTENTIAL TO CREATE A WORKFORCE THAT CAN UTILISE AI TO AUGMENT THEIR WORK AND PRODUCTIVITY - ECONOMIC SURVEY 2024-25

21. INDIA’S EXPORTS GROW BY 6 PERCENT AS BOTH MERCHANDISE AND SERVICES EXPORTS OVERCOME GLOBAL HEADWINDS, GLOBAL COMPETITION AND RISING PROTECTIONISM: ECONOMIC SURVEY 2024-25

22. GEO-ECONOMIC FRAGMENTATION REPLACING GLOBALISATION WORLDWIDE WITH BACKSLIDING OF ECONOMIC INTEGRATION: ECONOMIC SURVEY 2024-25

23. ECONOMIC SURVEY 2024-25 CALLS FOR ENHANCED DEREGULATION FOR MICRO, SMALL AND MEDIUM ENTERPRISES (MSMES)

24. PREFACE OF ECONOMIC SURVEY 2024-25

25. Rice industry seeks budget support for exports, agri infra amid surplus stock, price drop

26. HIGHLIGHTS OF ECONOMIC SURVEY 2024-25

27. SUMMARY OF ECONOMIC SURVEY 2024-25

28. MENTAL HEALTH OF YOUTH WILL DRIVE FUTURE ECONOMY: ECONOMIC SURVEY 2024-25

29. INDIA'S SCHOOL EDUCATION SYSTEM SERVES 24.8 CRORE STUDENTS ACROSS 14.72 LAKH SCHOOLS WITH 98 LAKH TEACHERS: ECONOMIC SURVEY 2024-25

30. CLIMATE CHANGE ADAPTATION, BUILDING RESILIENCE DEMAND TARGETED POLICY MEASURES AND SUFFICIENT FINANCING OPTIONS: ECONOMIC SURVEY 2024-25

31. Karnataka seeks Rs 11,495 cr special grants among others in Union Budget

32. Budget session: President Murmu highlights inclusive growth, welfare initiatives

33. Lalduhoma to present Mizoram budget in assembly on March 4

34. Expectations from the Union Budget 2024-25: A Vision for Economic Growth and Women's Empowerment

35. Lalduhoma will present Mizoram budget in Assembly on March 4

36. J-K Assembly's first budget session in 6 years to begin on Mar 3

37. GHMC council meeting approves budget of Rs 8,440 crore for 2025-26

38. Unions hopeful demands for staff welfare, rail safety to be accepted and announced in Union Budget

39. Kerala Finance Minister hopes special package for state in Union Budget

40. Stormy Budget session likely as opposition to raise Maha Kumbh stampede

41. Economic Survey points to laws, schemes aimed at delivering justice at grassroots level

42. AI impact on labour will be globally felt but problem magnified for India, warns Economic Survey

43. DGFT streamlines export regulations in alignment with Ministry of Health & Family Welfare regulatory framework

44. Ultra-processed junk food adversely affects mental well-being: Economic Survey citing study

45. Economic Survey 2024-25: Rail network expansion comes down; production of wagons, locos up

46. Govt's emphasis on improving quality of life in rural areas: Economic survey

47. Lack of climate finance may prompt reworking of climate targets: Economic Survey

48. Gold prices to decline, silver to rise in 2025: Economic Survey

49. Adoption of AI in Indian healthcare sector faces several challenges: Economic Survey

50. Kerala has replicable model for localisation of SDG: Economic Survey

51. Highlights of Economic Survey 2024-25

52. India needs to develop climate-resilient crop varieties: Economic Survey

53. Finance Minister Sitharaman tables Economic Survey 2024-25 in LS

54. Economic Survey likely to project 6.3-6.8 pc GDP growth in FY'26

55. Consultation with Ministries/ Departments and other Stakeholders on estimation of Informal Sector in Gross Domestic Product held on 30th January,2025 in Tagore Chamber, SCOPE Convention Centre, New Delhi.

56. Trump says tariffs on Canada, Mexico coming Saturday, deciding whether to tax their oil

57. Sitharaman to table Economic Survey in Parliament on Friday

Notifications

Customs

1. 05/2025 - dated 28-1-2025 - Cus (NT)

Seeks to amend Notification No. 12/97-Customs (N.T.) dated the 2nd April, 1997 - Inland Container Depots for loading and unloading of goods

GST - States

2. F. No. 3(24)/Fin (Exp-I)/2024-25/DSI/116 - dated 30-1-2025 - Delhi SGST

Supersession Notification No. F. 3 (10)/Fin(Exp-I)/2022-23/DS-I/934 dated 5th December, 2022

IBC

3. IBBI/2024-25/GN/REG121 - dated 28-1-2025 - IBC

Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2025

4. IBBI/2024-25/GN/REG120 - dated 28-1-2025 - IBC

Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2025.

Income Tax

5. 12/2025 - dated 30-1-2025 - IT

U/s 138(1) of IT Act 1961 - Central Government specifies ‘Joint Secretary to Government of India, Department of Food and Public Distribution (DFPD), Ministry of Consumer Affairs, Food & Public Distribution’

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MIRSD/TPD/CIR/2025/10 - dated 31-1-2025

Framework for Monitoring and Supervision of System Audit of Stock Brokers (SBs) through Technology based Measures.

2. SEBI/HO/MRD/POD-III/CIR/P/2025/12 - dated 30-1-2025

Parameters for external evaluation of Performance of Statutory Committees of Market Infrastructure Institutions (MIIs); and Mechanism for internal evaluation of Performance of MIIs and its Statutory Committees

DGFT

3. 44/2024-25 - dated 31-1-2025

Withdrawal of Para 2.76 of Handbook of Procedure -2023 regarding Track and Trace system for export of drug formulations

Customs

4. Public Notice No. 32 / 2024-25 - dated 20-1-2025

Digitalization of customs duty payment of consumables and implementation of Advisory No. 26 /2024 for S-Ship Stores, V-Vessel and A -Aircraft-reg.

Highlights / Catch Notes

GST

• Late Fee Under Section 47(2) Applies Until Complete Filing of Both GSTR-9 and GSTR-9C Annual Returns

  Circulars : Late fee under CGST Act section 47(2) applies for delayed filing of complete annual return comprising both GSTR-9 and GSTR-9C (where required). For taxpayers with turnover exceeding specified thresholds, annual return is deemed incomplete without GSTR-9C. Late fee calculation period extends from due date until complete submission. Per notification 08/2025-CT, excess late fee beyond GSTR-9 filing date is waived for FY 2022-23 and earlier if GSTR-9C is filed by March 31, 2025. No refund available for previously paid late fees. Single late fee applies for the entire delay period rather than separate penalties for GSTR-9 and GSTR-9C.
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• Penalties Under Section 74 CGST Act Upheld For Wilful Suppression Through Non-Filing Returns Despite Receiving Client Payments

  Case-Laws - HC : HC affirmed penalties under Section 74 of CGST Act against petitioner for wilful suppression of facts through non-filing of monthly returns and non-payment of GST. Despite petitioner's claim that non-payment resulted from client's default, evidence showed partial payments were received from the client. Court held that Section 74 penalties require proof of intentional evasion through fraud, wilful misstatement, or deliberate suppression - mere non-payment is insufficient. Here, petitioner's conduct demonstrated wilful suppression as defined in Explanation-2, warranting penalties. Court rejected argument that Section 74 notice was invalid because tax was paid before notice issuance, noting interest under Section 50 remained unpaid. Additional consequential penalties were upheld.
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• Taxpayer Wins Rs.33.69 Lakh GST Refund Case Under Section 128A After Department Confirms PLA Account Credit Adjustment

  Case-Laws - HC : HC determined petitioner entitled to refund of Rs.33,69,271 paid under CGST Act following Section 128A implementation. Department confirmed adjustment of amount through PLA account credit against returns filed on 31.10.2017. Court granted liberty to petitioner to file refund application for deposited amount. Department acknowledged compliance with previous court queries from 17.12.2024 order, particularly paragraphs 5 and 6. Writ petition concluded with directive for processing refund as per statutory provisions under CGST framework.
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• Gold Jewelry Transport Case: Tax Evasion Through Rules 138 and 55 Leads to Confiscation Under Section 130

  Case-Laws - HC : HC upheld confiscation notice issued under Section 130 of TNGST Act regarding transport of gold jewelry. Officials established prima facie evidence of tax evasion through misuse of Rules 138 and 55 of CGST Rules. Court distinguished between Section 129 (seizure) and Section 130 (confiscation), ruling they operate independently despite non-obstante clause in Section 129. Following Synergy Fertichem precedent, authorities demonstrated sufficient grounds beyond mere suspicion for confiscation proceedings. Petitioner failed to provide adequate documentation to counter allegations of intentional tax evasion. Authorities' formation of opinion met threshold requirements for invoking Section 130. Petition dismissed, upholding validity of confiscation notice.
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• GST Appeal: Interim Stay Granted on Tax Demand with 10% Payment Required Beyond Section 107(6) Deposits Within Two Weeks

  Case-Laws - HC : HC granted interim stay on appellate order demanding GST dues for two weeks, conditional upon petitioner paying 10% of disputed tax balance beyond Section 107(6) deposits. Stay extension contingent on payment within two weeks, to continue until writ petition disposal or further orders. Prima facie case established by petitioners warranted temporary relief. Court directed respondents to file opposition affidavit within six weeks, with one week allowed for reply. Stay operates as temporary measure balancing revenue interests with taxpayer rights pending full adjudication of underlying dispute by Appellate Tribunal.
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• GST Registration Suspension Notice Quashed Due to Parallel DGGI Investigation Under Rule 21(c)

  Case-Laws - HC : HC quashed the Show Cause Notice (SCN) dated 25 April 2024 issued by State GST authorities regarding suspension of petitioner's GST registration. The court noted ongoing parallel investigation by Directorate General of GST Intelligence (DGGI) through a separate SCN dated 01 July 2024, which remained pending. Given the concurrent jurisdiction and pending DGGI proceedings, as acknowledged in State GST authorities' counter affidavit, the court found the subsequent State GST SCN untenable under Rule 21(c) of CGST Rules, 2017. The petition was allowed, invalidating the State GST's SCN to prevent duplicative proceedings.
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• Tax Liability Notice on Royalty Under Section 73(5) Not Final Order, Premature Challenge Dismissed

  Case-Laws - HC : HC dismissed the premature writ petition challenging tax liability on royalty under KGST/CGST Act. The disputed Annexure-D was merely an intimation of ascertained tax under s.73(5), providing opportunity to either pay with interest or file submissions. No formal show cause notice under s.73(1) or final order under s.73(9) had been issued yet. The court held that petitioner retained remedy to file submissions against the intimation, and formal adjudication process including show cause notice would follow only upon non-payment. Given the preliminary stage of proceedings, petition was rejected as premature.
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• Dismissal Order Reversed: Appeal to Proceed After Pre-deposit Payment Within Two Weeks Despite Initial Technical Rejection

  Case-Laws - HC : HC set aside the dismissal order regarding petitioner's appeal, which was initially rejected due to non-payment of mandatory pre-deposit. The court found procedural irregularities in the Appellate Authority's issuance of a common order for multiple appellants without establishing identity of cause of action or parties. While some appeals were partially allowed, the petitioner's case was dismissed solely on technical grounds of non-payment. Given petitioner's willingness to comply with payment requirements, HC granted relief conditional upon full pre-deposit payment within two weeks, enabling adjudication on merits.
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Income Tax

• Transfer Order Under Section 127(2) Quashed Due To Procedural Violations And Denial Of Fair Hearing Rights

  Case-Laws - HC : HC invalidated transfer order under s127(2) due to multiple procedural violations and lack of natural justice principles. Order failed to obtain mandatory jurisdictional Principal Commissioners' concurrence and denied petitioner reasonable opportunity for hearing. Scheduled hearing during Durga Puja holidays with inadequate notice, ignoring rescheduling request. Order lacked substantive reasoning, relied on vague allegations of unaccounted cash payments without credible evidence. Respondent's claim for transfer necessity based on coordinated investigation remained unsubstantiated. Allegations of income concealment by partnership firm lacked specific evidentiary support linking to petitioner's assessment. Transfer order deemed legally void for procedural defects and arbitrary decision-making.
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• Tax Department Must Hear Objections Before Adjusting Refunds Against Demands Under Section 245 of Income Tax Act

  Case-Laws - HC : HC found adjustment of tax refund against outstanding demand invalid due to procedural violations of natural justice under Section 245 of IT Act. Despite taxpayer submitting objections on December 5-7, 2023, revenue authorities proceeded with adjustment on March 16, 2024, without granting hearing or issuing formal order addressing objections. Court quashed the adjustment noting gross violation of principles of natural justice and fair play, directing authorities to deposit Rs. 4,91,45,369/- within two weeks. Decision emphasizes mandatory requirement of proper hearing and reasoned order before exercising adjustment powers under Section 245.
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• Online Tax Filing Systems Must Allow Section 87A Rebate Claims Without Technical Restrictions For All Eligible Taxpayers

  Case-Laws - HC : HC determined that online tax filing utilities cannot inherently prevent taxpayers from making legitimate claims under Section 87A of the Income Tax Act. While referencing similar precedents where manual returns were permitted when electronic filing systems were restrictive, the court held that assessees cannot be barred from making statutory claims, whether filing online or manually. The court directed modification of the online utility to allow Section 87A rebate claims for AY 2024-25 and subsequent years, including revised returns under Section 139(5). However, the court clarified that the actual eligibility determination of Section 87A claims remains with tax authorities during return processing, maintaining their statutory authority to examine claim validity.
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• Software Payments Not Automatic Royalty Under Section 9: Commissioner Must Examine DTAA's "Make Available" Clause

  Case-Laws - HC : HC allowed the writ petition challenging Commissioner's order under Section 264. Prior amendment of Return of Income was not mandatory before filing revision application. Commissioner failed to consider DTAA provisions and "make available" clause for determining royalty payments. Following Vijay Gupta and Interglobe Enterprises precedents, Court held that taxpayers can rectify earlier mistaken positions through Section 264, even for suo moto disallowances made under incorrect interpretation. Tax liability exists only for income chargeable under the Act. Commissioner directed to reconsider revision application examining DTAA implications and royalty characterization afresh, particularly the "make available" condition.
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• Penalty Proceedings Under Section 271DA Valid When Initiated Within 11 Days of Assessment Order Completion

  Case-Laws - HC : HC dismissed petition challenging penalty proceedings under s271DA. AO initiated proceedings via reference to Addl. CIT within 11 days of assessment order completion (08.04.2024), following assessment order dated 28.03.2024. Six-month limitation period commenced from reference date. Court held timing reasonable, rejecting petitioner's argument of arbitrary extension. While acknowledging that inordinate delays require scrutiny and reasonable timeframe applies where no specific limitation exists, HC found 11-day gap between assessment completion and penalty initiation well within acceptable bounds. Proceedings deemed within limitation period prescribed under s275(1)(c).
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• Tribunal Sets 2.5% Profit Margin on Unverified Purchases Despite Historical Rate of 1.55% in Grey Market Dealings

  Case-Laws - AT : ITAT examined unverifiable purchases from 22 parties where assessee failed to provide conclusive proof. While books of accounts were accepted by AO and historical gross profit rates averaged 1.55% with current year at 1.6%, the Tribunal determined these transactions likely occurred in grey market warranting higher margins. Despite prior assessments under s.143(3) raising no concerns, ITAT estimated a 2.5% profit margin on disputed purchase value as reasonable given the informal nature of transactions. This modified profit estimation approach balanced the established business pattern with appropriate adjustments for unverified grey market dealings. Appeal partially allowed with revised profit computation.
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• Tribunal Quashes Property Valuation Addition Under Section 56(2)(vii)(b) and Partially Allows Section 54B Agricultural Land Relief

  Case-Laws - AT : ITAT ruled against AO's addition under s.56(2)(vii)(b) of Rs. 50,65,900/- in a limited scrutiny case, finding the AO lacked jurisdiction to examine property valuation issues beyond the specific CASS-selected parameters without converting to complete scrutiny per CBDT Instruction No.20/2015. On s.54B deduction claim, ITAT partially allowed relief for two agricultural land parcels (1.424 hectares and 1.781 hectares) after confirming their agricultural usage in two years preceding transfer. The tribunal directed AO to verify other statutory conditions and allow appropriate deduction. The assessment order under s.143(3) was modified accordingly, with jurisdictional grounds quashed and agricultural land deduction claims partially sustained.
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• Share Transaction Investigation Valid Under Limited Scrutiny As Investments Were Funded Through Undisclosed Loans

  Case-Laws - AT : ITAT upheld AO's jurisdiction to examine undisclosed share transaction investments under limited scrutiny assessment. AO's examination of unsecured loans was deemed valid as investments were funded through loans, necessitating verification of creditors' genuineness and creditworthiness. Regarding Rs. 21 lakhs loan from spouse secured against property, ITAT remanded matter to AO for detailed verification of loan creditors and documentation. While assessee provided affidavits, insufficient evidence existed to establish creditors' creditworthiness. AO directed to verify loan credits and issue necessary summons to creditors. First ground of appeal dismissed, second ground partially allowed for statistical purposes.
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• Transfer Pricing Appeal: ITAT Accepts 8.70% Interest Rate on Masala Bonds, Orders TPO Review of Aggregation Method

  Case-Laws - AT : ITAT partially allowed the appeal concerning transfer pricing matters. The Tribunal remanded the aggregation approach issue back to TPO for verification of inter-linked transactions with documentary evidence, rejecting automatic reliance on previous years' decisions due to substantial changes in service nature. On Masala Bonds, ITAT accepted assessee's position allowing interest rate of 8.70% p.a. instead of TPO's 7.53% benchmark. The Tribunal directed refund of excess DDT payment subject to verification. Regarding tax credits, AO was instructed to allow appropriate MAT and TCS credits after record verification. TNMM application was scrutinized against TPO's preference for CUP and OM methods, emphasizing the need for transaction-specific analysis rather than blanket application of previous years' approaches.
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• Cost Allocation Services Without Technical Knowledge Transfer Not Taxable as FTS Under DTAA "Make Available" Requirements

  Case-Laws - AT : ITAT held that services provided under India-Netherlands DTAA did not qualify as Fees for Technical Services (FTS) as the "make available" clause requirements were not satisfied. While cost allocations were deemed taxable due to presence of income element beyond pure reimbursement, the tribunal ruled that the 10% tax rate under Article 12 was inclusive of surcharge and education cess, prohibiting additional levies. The matter of TDS credits, tax calculation accuracy, and refund adjustments was remanded to the Assessing Officer for verification and fresh determination after providing the assessee opportunity of hearing. The tribunal allowed multiple grounds of appeal concerning FTS qualification under the treaty provisions, affirming that mere cost recovery services without technical knowledge transfer did not constitute FTS under the tax treaty framework.
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• Tribunal Allows One-Time Superannuation Fund Contribution and Approves Delayed PF Deposits Under Section 36(1)(va)

  Case-Laws - AT : The ITAT ruled in favor of the assessee regarding multiple contribution-related disputes. The Tribunal upheld the one-time superannuation fund contribution made to bridge actuarial valuation gaps, determining that ceiling rules were inapplicable as it wasn't an initial or annual contribution. Similarly, excess contribution to approved gratuity fund was allowed, following precedent that recognition status must be presumed valid until explicitly withdrawn by Commissioner. Additionally, the Tribunal deleted disallowances under s.36(1)(va) regarding delayed provident fund deposits, noting that absent specific due dates in KPT Regulations 1988, contributions credited within the following month were acceptable. The Revenue's appeals on all grounds were dismissed.
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Customs

• Customs Act Section 125: Absolute Gold Confiscation Without Redemption Option Deemed Illegal For Non-Prohibited Restricted Items

  Case-Laws - HC : HC determined that absolute confiscation of undeclared gold carried by travelers without offering redemption option violates customs regulations. While gold import is restricted and regulated, not prohibited, travelers must pay appropriate customs duty whether wearing or carrying gold ornaments. The court set aside the impugned order of absolute confiscation, holding that Section 125 of Customs Act requires authorities to offer redemption option for non-prohibited goods. Matter remitted to Joint Commissioner of Customs to determine appropriate redemption fine. Court emphasized distinction between restricted versus prohibited goods, confirming gold falls under former category requiring regulated import rather than outright prohibition.
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• Data Processing Servers Ruled Exempt Under CTH 84714190, Tribunal Sets Aside Penalties and Confiscation Orders

  Case-Laws - AT : CESTAT overturned confiscation and penalties regarding imported data processing servers. The tribunal distinguished servers from automatic data processing machines, ruling they are properly classified under CTH 84714190 and eligible for exemption under N/N 24/2005-Customs. The DGFT restrictions on computers do not apply to servers. The tribunal rejected allegations of misdeclaration, finding undeclared items were integral server components included in declared value. Penalties of Rs. 20 lakhs under Section 112(a)(i) and Rs. 30 lakhs under Section 114AA were set aside as the goods were not restricted and no misdeclaration occurred. The appeal was allowed with confiscation order vacated.
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• Customs penalties under Sections 114A and 114AA overturned as evidence fails to prove collusion or willful misstatement

  Case-Laws - AT : CESTAT set aside penalties imposed under Sections 114A and 114AA of Customs Act, 1962. The Commissioner's finding of collusion between appellant and R.K. Pal was based on conjecture without substantive evidence. The appellant had paid correct duty through banking channels to R.K. Pal, who admitted misappropriating funds for personal gain. Section 114A penalty requires proof of collusion or willful misstatement, while Section 114AA demands evidence of knowingly submitting false declarations. Neither condition was met as appellant had no knowledge of R.K. Pal's fraudulent activities. The tribunal directed appropriation of appellant's deposit towards confirmed duty demand with interest. Appeal allowed.
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• Tribunal Overturns Section 114(i) Penalties Against Cold Storage Owner and Employee in Beef Export Misdeclaration Case

  Case-Laws - AT : CESTAT allowed appeals against penalties imposed under Section 114(i) of Customs Act for alleged misdeclaration of beef as frozen buffalo meat. For Appellant 1, though registered owner of A.M. Enterprise, was merely an employee handling loading operations for Global Foods International at Rs.22,000 monthly salary. Real control rested with Mr. Ankit Kapoor. Section 114 penalty requires knowing abetment, which wasn't established. Appellant 2, being only the cold storage facility lessor per rental agreement, had no involvement in export operations. The Tribunal held that neither appellant knowingly abetted any customs violations, setting aside penalties against both parties as legally unsustainable.
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• Epoxidised Soya Bean Oil Classification Dispute: Tribunal Upholds CTH 1518 Status Under Rule 3(a)

  Case-Laws - AT : CESTAT ruled on classification dispute regarding Epoxidised Soya Bean Oil (ESBO). The tribunal upheld classification under CTH 1518 as chemically modified vegetable oil rather than CTH 3812, based on HSN notes and Rule 3(a) of RIT. While the show cause notice was deemed timely (calculated from January 4, 2023, when complete documents were provided), penalties and confiscation were set aside as no misdeclaration was established. The appellant's alternate classification view was considered reasonable given product documentation submitted. Interest on duty remained payable per SKF India precedent. The tribunal emphasized that department's reclassification through DRI investigation was procedurally proper, following Warner Hindustan principles requiring fresh show cause notice. Appeal partially allowed, maintaining duty liability with interest but removing penalties.
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• Drawback Interest Must Begin One Month After Export Clearance, Not After Show Cause Notice Resolution Under Section 75A

  Case-Laws - AT : CESTAT determined appellant entitled to drawback interest from 14.04.2003 (one month after "let export order" date) rather than from 01.07.2012 as initially granted. Under Customs Act s.75A and Drawback Rules r.13, interest calculation begins one month from customs clearance order, not from date of show cause notice resolution. CESTAT rejected department's prolonged litigation as grounds for delayed interest, noting appellant shouldn't be penalized for departmental proceedings. The tribunal distinguished from Web Knit Exports precedent, emphasizing that export value documentation was complete and verified at initial filing. Appeal succeeded, granting interest from original eligibility date through drawback payment date at s.27A prescribed rate.
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• Customs Tribunal Confirms Multimedia Speakers Classification Under CTH 8518, Following Previous Cases on Essential Functionality

  Case-Laws - AT : CESTAT ruled on classification dispute regarding imported multimedia/computer speakers. Following established precedent in multiple cases including Logic India Trading Co. and Global Enterprises decisions, tribunal affirmed classification under CTH 8518 rather than CTH 8519/8527. The matter was deemed no longer res integra due to consistent judicial interpretation in similar cases. The tribunal emphasized that multimedia speakers' essential character and functionality align with specifications under CTH 8518. Appeal was allowed, confirming proper classification of imported multimedia speakers under CTH 8518.
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DGFT

• Exporters Claiming RoDTEP Benefits Over Rs. 1 Crore Must File Annual Returns Through New Online Module

  Circulars : DGFT has introduced an online module for filing Annual RoDTEP Return (ARR) on its portal for exporters who claimed RoDTEP benefits exceeding Rs. 1 crore in FY 2023-24. Separate returns must be filed for DTA and AA/EoU/SEZ exports. Returns are mandatory only for 8-digit HS codes where claimed RoDTEP benefit value is Rs. 50 lakhs or more annually. The module requires detailed reporting of embedded taxes including VAT, excise duty on transportation, electricity duty, stamp duty and other levies that are not refunded through other mechanisms. Merchant exporters claiming over Rs. 1 crore must file ARR in coordination with manufacturer suppliers. The system calculates total tax incidence based on input details and tax components provided. Supporting documentation for calculations must be maintained for verification.
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FEMA

• Enforcement Directorate's FEMA Charges Dropped After Lab Reports Confirm Valid Fe Content Declaration in Export Pricing Case

  Case-Laws - AT : AT dismissed appeals challenging the Additional Director of Enforcement's order dropping FEMA charges against respondent companies. The charges stemmed from DRI's Show-Cause Notice under Customs Act alleging customs duty evasion through value suppression of export goods. AT found the Fe content declaration was properly based on government-accredited lab reports, following prescribed procedures for independent certification and sample testing. The pricing variation fell within acceptable tolerance range for arm's length transactions. With the underlying customs case nullified and no evidence of lab report manipulation, AT upheld the original order dropping FEMA charges, noting that challenging government lab reports requires demonstrating they are palpably wrong, citing established precedent.
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Corporate Law

• Companies Must Pay Late Filing Fees Despite Administrative Circular as Statutory 30-Day Window Under Section 137 Prevails

  Case-Laws - HC : HC ruled against petitioner companies seeking refund of additional fees charged for delayed financial statement filing. Companies held AGM on 29.10.2019 within statutory period but failed to submit financial statements within mandatory 30-day window per Section 137 of Companies Act. Court determined that administrative circular dated 29.10.2019 extending filing deadline to 30.11.2019 cannot override statutory timeframes. Circular only applied to companies with ROC-approved AGM extensions beyond September 30. Penalty imposed from 30.10.2019 was upheld as legally valid since administrative directives cannot amend statutory provisions. Court emphasized that Section 403 mandates penalties of minimum Rs.100/day for late filings without discretionary waiver options.
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IBC

• IBBI Extends Grievance Filing Timeline Under Regulation 3(4) Until 30 Days After Final Legal Proceedings Conclude

  Notifications : IBBI amended the Grievance and Complaint Handling Procedure Regulations through notification dated January 28, 2025. The key modification extends the timeline in regulation 3(4) for filing grievances or complaints. The new provision allows submission within thirty days from the closure of all proceedings related to the insolvency process, whether before the AA, NCLAT, HC, or SC. This amendment supersedes the previous 30-day fixed timeline and provides flexibility by linking the filing deadline to the conclusion of all related legal proceedings. The regulation aims to ensure stakeholders have adequate time to file complaints after exhausting all available legal remedies under the IBC framework.
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• IBBI Amends Regulations to Define "Associated" Personnel in Investigation and Inspection Processes Under IBC

  Notifications : IBBI amended its Inspection and Investigation Regulations 2017 through powers under IBC sections 196, 217-220, and 240. The amendment introduces a clarification to regulation 2(1)(c) by inserting an explanation defining "associated" in the context of investigations and inspections. The term now specifically means involvement in conducting investigations/inspections, considering investigation/inspection reports, or issuing show cause notices. The amendment, effective upon official gazette publication, aims to provide clearer interpretation of associative roles in regulatory oversight processes. This modification enhances regulatory clarity regarding personnel involvement in IBBI's investigative functions.
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• IBBI Extends Timelines for Professional Member Disciplinary Proceedings to 90 Days Under Model Bye-Laws

  Notifications : IBBI amended the Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations through notification dated January 28, 2025. The amendment modifies time periods in para VI, clause 12A of the Schedule. The period in proviso to sub-clause (3) is extended from forty-five days to ninety days. Similarly, in sub-clause (5), the timeline is increased from fifteen days to ninety days. These modifications to the 2016 regulations became effective upon official gazette publication. The amendment follows previous changes made through regulations notified on January 31, 2024, exercising powers under sections 196, 204, and 205 read with section 240 of IBC, 2016.
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• Pro-rata Distribution of Liquidation Proceeds Under IBC Section 53(1) Upheld Over Exclusive Security Interest Claims

  Case-Laws - AT : NCLAT dismissed appeal regarding distribution of liquidation proceeds under IBC's waterfall mechanism. Following failed CIRP, dispute arose over distribution method - whether based on security interest or pro-rata as per admitted claims under Section 53(1). Tribunal upheld earlier precedent from Oriental Bank case, rejecting exclusive distribution to creditor with charge over corporate debtor's property. Stakeholder undertakings regarding return of excess distributions under Regulation 43 of Liquidation Process Regulations were deemed not to affect redistribution rights. Adjudicating Authority's direction for pro-rata distribution based on admitted claims of Financial Creditors was affirmed as legally sound.
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• NCLT Has Jurisdiction Over Personal Guarantor Insolvency Under Section 95 IBC

  Case-Laws - AT : NCLAT dismissed an appeal challenging NCLT Delhi's jurisdiction to entertain Section 95 applications against personal guarantors under IBC. The Tribunal held that NCLT is the appropriate adjudicating authority for personal guarantor insolvency proceedings per Section 60(1), regardless of whether proceedings against the corporate debtor are pending. The expression "without prejudice" in Section 60(2) does not limit NCLT's jurisdiction only to cases where CIRP/liquidation of corporate debtor is ongoing. Following Supreme Court's interpretation in Lalit Kumar Jain case, personal guarantors constitute a distinct category of individuals, and their insolvency resolution falls within NCLT's jurisdiction. The appeal lacked merit as NCLT Delhi had rightful jurisdiction to entertain the Section 95 application filed by the financial creditor.
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Indian Laws

• Court Upholds Director's Resignation as Valid Defense Against Cheque Dishonor Case Under NI Act Sections 138/141

  Case-Laws - HC : HC ruled in favor of petitioner, quashing criminal proceedings under Negotiable Instruments Act Sections 138/141. Director's unilateral resignation was deemed valid from date of company's receipt, despite non-filing of Form 32 or ROC notification. Court emphasized that filing statutory forms is company secretary's duty, not director's responsibility. Resignation's effectiveness under Companies Act Section 168(2) occurs upon company's receipt or specified date, whichever later. Petitioner's March 14, 2020 resignation (delivered March 16, 2020) preceded dishonored cheque, eliminating vicarious liability. Court held criminal proceedings would constitute judicial process abuse, noting criminal law cannot be tool for settling personal disputes.
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• Court Rules Section 143A of NI Act for Interim Compensation in Cheque Bounce Cases Applies Only After September 2018

  Case-Laws - HC : HC ruled on the applicability of Section 143A of Negotiable Instruments Act, 1881, which allows courts to direct drawer of dishonored cheque to pay interim compensation up to 20% of cheque amount. Following G.J. Raja vs. Tejraj Surana precedent, court held Section 143A operates prospectively from September 1, 2018, and cannot be applied retrospectively to complaints filed before this date. Distinguished from Section 148 which applies retrospectively per Surinder Singh Deswal ruling. Court emphasized that prior to Section 143A's insertion, no provision existed for interim compensation before conviction under Section 138. Petition challenging retrospective application was allowed, confirming Section 143A applies only to post-September 2018 complaints.
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PMLA

• Money Laundering Bail Denied: Court Finds Strong Evidence Under PMLA Sections 19, 45, and 50 in Spurious Medicine Case

  Case-Laws - HC : HC denied bail in a money laundering case, finding the arrest complied with Section 19 of PMLA requirements for "reason to believe" based on concrete evidence including financial records, digital communications, and statements from multiple co-accused. The Court determined statements recorded under Section 50 PMLA were admissible as evidence. Applicant failed to satisfy the twin conditions under Section 45 PMLA - neither establishing reasonable grounds for innocence nor proving unlikelihood of committing further offences while on bail. The ongoing investigation, organized nature of the offense involving spurious medicines, and applicant's alleged active role in the financial syndicate warranted continued detention. The bail application was dismissed to maintain investigative integrity.
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• Drug Company Partner Denied Bail in Money Laundering Case Over Fake Cancer Medicines Under PMLA Sections 19, 24, 45

  Case-Laws - HC : HC denied bail in a money laundering case involving counterfeit anti-cancer drugs. The accused, a partner in a medicine hub, was arrested under PMLA for procuring and selling spurious medications including Keytruda and Opdyta. The Court found sufficient evidence through financial records, WhatsApp communications, and Section 50 PMLA statements demonstrating accused's involvement in illegal procurement and hawala transactions. The investigating agency established reasonable grounds for arrest per Section 19 PMLA, and accused failed to rebut presumption under Section 24. Court held twin conditions under Section 45 PMLA weren't satisfied given the gravity of offense, ongoing investigation, and substantial evidence linking accused to proceeds of crime through counterfeit medicine syndicate.
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• Bail Denied in PMLA Case: Accused Orchestrated Rs. 40 Per Quintal Extortion Scheme Through Rice Miller Payment Threats

  Case-Laws - HC : HC denied bail to the accused in a PMLA case involving an extortion racket targeting rice millers. The accused allegedly orchestrated collection of Rs. 40 per quintal from special incentive payments. ED investigation revealed the accused as a key conspirator who facilitated proceeds of crime through threats to withhold MARKFED payments. Despite claims of insufficient direct evidence, the Court found substantial material establishing a money trail and strong nexus between the accused and co-conspirators. Considering the organized nature of the crime, gravity of allegations, and stringent provisions under Section 45 PMLA, the Court rejected bail application under Section 483 BNSS read with Section 45 PMLA for offenses under Sections 3 and 4 PMLA.
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VAT

• Penalty Upheld: High Court Confirms VAT Penalty for Excess Goods Transport Without Required Documentation at Check Post

  Case-Laws - HC : HC upheld penalty imposed under Punjab VAT Act for tax evasion where goods transported exceeded declared weight and required documentation was not furnished at Inter-State Check Post (ICC). While appellant claimed inability to generate information due to blocked TIN number, subsequent production of retail invoices and GR documents after detention demonstrated clear intent to evade tax. The goods owner's belated submission of documentation violated Section 51(2) requirements for contemporaneous document presentation at ICC. AETC's penalty order under Section 51(7)(c), sustained by VAT Tribunal, was procedurally sound with adequate opportunity for hearing. HC found no grounds to interfere with Tribunal's determination, dismissing the appeal.
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• High Court Upholds Right to File Under Section 84 TNVAT Act for Input Tax Credit Despite Previous Writ Petition Dismissals

  Case-Laws - HC : HC ruled in favor of petitioner's right to file under Section 84 of TNVAT Act, 2006 regarding input tax credit denial. Court determined that the Section 84 application was timely, and previous dismissals of writ petitions due to latches did not bar this remedy. Despite unavailability of appellate remedy under Section 51, Section 84 remedy remains valid, especially given settled law favoring assessees. Court quashed order dated 11.05.2022 and remanded case back to respondent for fresh merit-based determination. Significant precedent established regarding availability of Section 84 remedy independent of other procedural limitations.
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• High Court Refuses to Quash 24-Year-Old FIR in Serious Fraud Case Despite Elderly Accused's Age and Trial Delays

  Case-Laws - HC : HC declined to quash 1999 FIR involving charges under IPC Sections 406/420/468/471/120B and tax laws. Despite the 24-year pendency and petitioner's age (71), the court found the allegations of forgery, breach of trust, and false documentation too serious for quashing. While acknowledging the constitutional right to speedy trial under Article 21 per Hussainara Khatoon precedent, HC noted only 5 of 17 prosecution witnesses had testified since charges were framed in 2021. Court directed expedited trial proceedings rather than quashing, finding insufficient grounds despite prolonged prosecution. Petition disposed of with instructions for timely conclusion of trial.
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Service Tax

• Tribunal Orders Refund of Section 35F Pre-Deposit with 12% Interest After Successful Appeal Against Service Tax

  Case-Laws - AT : CESTAT ruled in favor of appellant regarding refund of Rs.16,14,167/- deposited as pre-deposit under Section 35F. The amount was determined to be a mandatory pre-deposit for appeal consideration rather than service tax liability, making Section 11B's limitation period inapplicable. The tribunal rejected the department's contention regarding time limitation and non-submission of reconciliation statements. The appellant was granted refund with 12% per annum interest from deposit date. The ruling clarified that statutory appeals under Section 35F are maintainable subject to compliance with statutory conditions, and pre-deposits are refundable upon successful appeal. Original order rejected, appeal allowed with costs.
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• Service Tax Recovery Case: Extended Limitation Invalid Without Proof of Willful Suppression Under Section 73(1)

  Case-Laws - AT : The CESTAT ruled in favor of the appellant regarding service tax recovery for 2011-2012. The demand for April-September 2011 was time-barred, exceeding even the extended five-year limitation period under Section 73(1) of the Finance Act. For October 2011-March 2012, the Tribunal found insufficient grounds to invoke extended limitation, following SC precedent that suppression of facts must be willful and demonstrate clear intent to evade tax. The court emphasized that mere suppression alone is insufficient - it must be deliberate and accompanied by intent to evade payment, similar to other serious infractions like fraud or collusion. The service tax demands for both periods were invalidated and the appeal was allowed.
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Case Laws:

• GST

• 2025 (1) TMI 1519
  Refund of Input Tax Credit (ITC) accrued to the petitioner under the Value Added Tax (VAT) regime - Transition to GST regime - petitioner s contention based on Section 143(8)(b) is that when an assessment is carried out and a refund is ordered then necessarily, the same shall be refunded to the assesee as per clause (8)(b) of Section 142 - it was held by High Court that There are no reason to interfere with the order rejecting the claim for refund, which refund in any event is not applicable, and the petitioner can only claim ITC as set-off against the output tax. HELD THAT:- There are no good reason to interfere with the impugned order passed by the High Court. SLP dismissed.

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• 2025 (1) TMI 1518
  Applicability of penalties under Section 74 of the CGST Act, 2017 - petitioner s failure to pay GST and file returns within the stipulated time - suppression of facts or not - contravention of the provisions of Section 37 of the CGST Act - HELD THAT:- Non-payment of tax, would attract penalties, under Section 74 (1), in three circumstances. The first two circumstances are fraud and wilful mis-statement. Both these require an intention to evade tax by unfair or illegal means. The third circumstance is suppression of fact, which is also defined, in Explanation-2, as non-declaration of relevant information. In view of the collocation of the terms, before this term, and in view of the requirement, under the two earlier terms of mens rea, the term suppression of facts would have to be read as wilful or deliberate suppression of fact, for evading tax. The term evade puts this issue beyond controversy, as this term means that the suppression must be for the purpose of evasion, which clearly requires intention and mens rea. There can be no quarrel with this view relating to Section 74 (1) of CGST Act. Every non-payment of tax cannot be treated as evasion of tax by way of fraud, wilful misstatement or suppression of facts. Every case needs to be looked into for ascertaining whether necessary evidence of fraud, wilful misstatement or suppression of fact, for the purpose of evading tax, is available in the record and whether such material has been demonstrated before the authority. The scheme, under section 74, appears to be in the nature of a permanent amnesty/settlement/compunding scheme, where the tax payer, liable to pay penalty under Section 74, is given an opportunity to voluntarily accept wrong doing and reduce the penalty that would be payable - While the petitioner had paid the tax prior to the issuance of notice under Section 74 (1) of the CGST Act, the interest payable under section 50, was paid after the notice had been issued. Further penalty of 15% was not paid - The contention of the learned Senior Counsel that a notice under Section 74 could not have been issued as the tax had been paid prior to the issuance of the notice would have to be rejected. Non-filing of tax returns and non-payment of tax - petitioner had time, up to 07.02.2020, to file the annual returns under Section 44 - HELD THAT:- In the present case, there has been a failure, on the part of the petitioner, in filing the monthly returns and making payment of tax under the said monthly returns. This may not amount to fraud or misstatement. Explanation-2 to Section 74 states that suppression, for the purpose of the Act, would mean non-declaration of facts or information which is required to be declared in the returns, statement or report or any other document which needs to be furnished under the Act. To that extent, non-filing of the monthly return would amount to suppression of fact. However, the requirement under Section 74 is not fulfilled on mere suppression of fact. The said suppression of fact would have to be wilful suppression of facts. The petitioner herein has neither filed the monthly returns nor made the necessary payments of tax. The defense of the petitioner is that his sole client, viz., M/s. Vijay Nirman Company had not paid its dues, due to which the petitioner could not remit the necessary taxes along with returns. The appellate authority held that the petitioner had been paid certain amounts by his main client M/s. Vijay Nirman Company and as such, there was no impediment for the petitioner to remit the necessary taxes - the appellate authority held that there was wilful suppression and upheld the penalty. In such a situation it is difficult to accept the contention, of the petitioner, that there was no wilful intention to suppress facts or the turnover of the petitioner and the requirement to pay tax. The other penalties levied against the petitioner are natural corollaries of the above finding and do not require any further consideration. Conclusion - i) Section 74 can be invoked for non-payment of tax if there is evidence of fraud, wilful misstatement, or suppression of facts. ii) Non-filing of monthly returns and non-payment of GST can constitute suppression of facts if it is wilful and intended to evade tax. iii) The statutory requirement to file monthly returns and pay GST is independent of the annual return deadline, and non-compliance can attract penalties. Petition dismissed.

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• 2025 (1) TMI 1517
  Refund of the amount paid as tax under the Central Goods and Services Tax (CGST) Act, 2017, following the insertion of Section 128A into the Act - HELD THAT:- The Department have duly taken into consideration the queries so raised by this Court in its order dated 17.12.2024 and, more particularly, at paragraph Nos. 5 and 6 which have been already quoted herein above. It has been further mentioned in the said affidavit that the Respondent Department would be adjusting the amount paid by the petitioner to the tune of Rs.33,69,271/- by using the credit in the PLA account towards the returns filed on 31.10.2017 under the CGST Act, 2017. It is further mentioned that the amounts so deposited by the petitioner in pursuance to the order dated 21.12.2023 would be refunded to the petitioner. The instant writ petition therefore stands closed, thereby granting liberty to the petitioner to file application for refund of the amount of Rs.33,69,271/- which was deposited by the p

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• 2025 (1) TMI 1516
  Input tax credit - amendment of the Central Goods and Services Tax (CGST) Act, 2017, particularly by insertion of sub-section (5) in Section 16 - HELD THAT:- Admittedly, the petitioner submitted its invoice/debit note pertaining to the financial year 2018-2019 and, that too, prior to 30.11.2021 and, therefore, the case of the petitioner very well comes under the provisions of sub-section (5) of Section 16. The respondent authorities are directed to consider the matter and pass an appropriate order taking into consideration the provision of Sub-Section (5) of Section 16 of the Central Goods and Services Tax Act, 2017, vide Amendment (Finance Act, 2024) dated 16.08.2024. Appeal disposed off.

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• 2025 (1) TMI 1515
  Challenge to confiscation notice issued by the respondent dated 02.08.2024 under Section 130 of the Tamil Nadu Goods and Service Tax Act, 2017 - HELD THAT:- After considering all the reasons and material evidences, the Officials have come to the conclusion that the goods were transported only with the intention of evading the payment of tax under the pretext that the gold jewelleries were carried to showcase the same to its customers, by misusing the provisions of Rules 138 and Rule 55 of the CGST Rules. In the impugned notice also, the Officials have clearly stated all the aforesaid aspects - Under these circumstances, it is a bounded duty of the petitioner to file an appropriate reply and satisfy the respondent on the aspects of the various opinion formed against the petitioner as indicated in the impugned confiscation notice. As far as the over-riding effect of Section 129 of TNGST Act over Section 130 of the of TNGST Act due to the non-obstante clause is concerned, it would be applicable with regard to the detention and seizure of goods and not for the confiscation, i.e., the non-obstante clause available in Section 129 would be applicable only for the seizure. In other words, if there is any provision contained in the Act with regard to the seizure in any other manner, Section 129 will supersede over the same. Therefore, as far as confiscation is concerned, the said non- obstante clause available in Section 129 will not supersede the provisions of Section 130, since Section 129 only talks about the seizure of the goods and not about confiscation. Thus, both these Sections are independent in nature. In the judgment of Synergy Fertichem [ 2019 (12) TMI 1213 - GUJARAT HIGH COURT ], it has been held that any opinion of the authority to be formed is not subject to objective test. The purpose of invoking Section 130 of the Act at the very threshold, the authorities need to make out a very strong case. Merely on suspicion, the authorities may not be justified in invoking Section 130 of the Act straightway. In this case, the officials had formed clear cut prima facie opinion to make out a very strong case in their favour for issuing notice under Section 130 of the TNGST Act. Conclusion - The authorities had sufficient prima facie evidence to issue the confiscation notice and that the petitioner failed to provide adequate documentation to refute the allegations. The Court clarifies that Section 129 and Section 130 of the TNGST Act operate independently, with Section 129 dealing with seizure and Section 130 with confiscation. Petition dismissed.

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• 2025 (1) TMI 1514
  Recovery of outstanding dues in cases wherein first appeal has been disposed of, till Appellate Tribunal comes into operation - reliability of Circular No.224/18/2024-GST dated 11th July, 2024 issued by the Ministry of Finance - HELD THAT:- The petition should be heard. Since, the petitioners have been able to make out a prima facie case, there shall be an unconditional stay of the demand of the Appellate order dated 18th June, 2024, for a period of two weeks from date - In the event, the petitioners makes payment of 10% of the balance amount of tax in dispute, in addition to the amount already deposited in terms of Section 107(6) of the said Act, within two weeks from date, the interim order passed herein, shall continue till the disposal of the writ petition or until further order, whichever is earlier. Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date, reply, if any, be filed within one week thereafter.

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• 2025 (1) TMI 1513
  Challenge to order passed un/s 73 of Karnataka Goods and Services Tax Act, 2017 clubbing the financial years from 2019-20 to 2023-24 - whether the impugned order requires interference at the hands of this Court? - HELD THAT:- Admittedly, Annexure-C order passed under Section 73 of 2017 Act is in respect of the financial years 2019-20 to 2023-24. By clubbing more than one financial year, the petitioner was issued with show-cause notice and the order is passed under Section 73 of 2017 Act which is impermissible. In terms of Section 73 of KGST Act, specific action must be completed within the relevant year since the limitation is prescribed. Hence, clubbing multiple assessment years is impermissible. This Court, in an identical fact situation in M/S. VEREMAX TECHNOLOGIE SERVICES LIMITED VERSUS THE ASSISTANT COMMISSIONER OF CENTRAL TAX BENGALURU. [ 2024 (9) TMI 1347 - KARNATAKA HIGH COURT] allowed the writ petition and set aside the impugned show-cause notice, with liberty to the Authorities to issue separate show-cause notices for each assessment year in compliance of Section 73 of KGST Act and proceed further in the matter. Petition allowed.

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• 2025 (1) TMI 1512
  Grant of privilege of anticipatory bail - facilitation for registration of a proprietary firm on the basis of fake and vague documents for evading huge tax of government - offence u/s 132(1)(b)/13(1)(e)/132 (1) (1) of Jharkhand Goods and Services Tax (JGST) Act - HELD THAT:- It is a fit case where the above named petitioner be given the privilege of anticipatory bail. Hence, in the event of his arrest or surrender within a period of six weeks from the date of this order, he shall be released on bail on depositing cash security of Rs. 50,000/- and on furnishing bail bond of Rs. 25,000/- with two sureties of the like amount each to the satisfaction of learned J.M. 1st Class, Jamshedpur, in connection with Telco P.S. Case No.104 of 2018 (G.R. No. 2027 of 2018) with the condition that the petitioner will cooperate with the investigation of the case and appear before the Investigating Officer as and when noticed by him and will furnish his mobile number and a copy of his Aadhar Card in the court below with the undertaking that he will not change his mobile number during the pendency of the case subject to the conditions laid down under Section 438 (2) of Cr.P.C. Petition allowed.

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• 2025 (1) TMI 1511
  Suspension of the petitioner s GST registration - parallel enquiry by the State and Central GST authorities - violation of Rule 21 (c) of the Central Goods and Services Tax Rules, 2017 - HELD THAT:- The challenge to the SCN proceeds in light of the investigation which has been initiated by the Directorate General of GST Intelligence [DGGI] in terms of a SCN dated 01 July 2024 and which stands placed on our record as Annexure P-6. Admittedly, the said SCN proceedings are yet to be concluded. From the counter affidavit which has been handed over by the State GST authorities in these proceedings, it is evident that the pendency of proceedings before the DGGI is conceded. In view of the aforesaid, we find ourselves unable to sustain the validity of the impugned SCN dated 25 April 2024. The impugned SCN dated 25 April 2024 is quashed - petition allowed.

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• 2025 (1) TMI 1510
  Liability to pay tax on royalty - intimation of tax issued u/s 73(5) of the KGST/CGST Act, 2017 - HELD THAT:- The writ petition of the petitioner is too premature and the same is liable to be rejected at this stage. A perusal of Annexure-D, intimation of tax ascertained under Section 73(5) of KGST Act, 2017 would reveal that it is only an intimation of ascertained tax with liberty to the petitioner to pay along with interest or to file his submission. Failing to pay the ascertained tax, petitioner would be issued further notice under Section 73(1) and thereafter the Competent Authority shall have to pass order under Section 73(9) of KGST Act. Further, intimation of tax ascertained at Annexure-D also provides an opportunity to file any submission of the petitioner against the said intimation itself. Since no show cause notice under Section 73(1) of KGST Act is issued and no order in terms of Section 73(9) of KGST Act is passed, the present writ petition would be premature. Hence, writ petition stands rejected.

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• 2025 (1) TMI 1509
  Dismissal of appeal filed by the petitioner - mandatory pre-deposit was not paid - HELD THAT:- It is curious to note that the Appellate Authority has passed the impugned order as a common order in respect of different appellants. A reading of the impugned order does not reveal any identity of cause of action or identity of parties to enable the Appellate Authority to pass a common order as such. As far as the other persons mentioned in Exhibit-P6 order are concerned, some of their appeals have been allowed in part, and since those orders are not under challenge, the merits of the said aspect not gone into. Suffice to state that such a common order relating to different appellants, without any identity in cause of action is not a proper procedure. Be that as it may, as far as petitioner is concerned, its appeal has been dismissed on the ground of non payment of the mandatory pre-deposit. Since the petitioner has expressed its willingness to pay the pre-deposit immediately, the said technicality should not stand in the way of the petitioner obtaining an adjudication on merits, provided the deposit is made. Exhibit-P6 order set aside to the extent it dismissed the appeal of the petitioner for non-payment of mandatory pre-deposit, on condition that petitioner shall pay the entire deposit within two weeks from today - petition disposed off.

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• 2025 (1) TMI 1508
  Challenge to section 174(2) of the GST Act, 2017 - HELD THAT:- The issue involved in the present petition stands finally adjudicated by this Court in Tecnimont Spa India Project Office vs. State of Punjab and another [ 2024 (12) TMI 1223 - PUNJAB AND HARYANA HIGH COURT ], wherein, it is held that Challenge to vires of the said section was laid before the High Court of Kerala in bunch of cases which were decided in favour of the Revenue holding the provisions as within the framework of the Constitution of India, and also the action was held to be within the competence of the department. Petition disposed off.

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• 2025 (1) TMI 1507
  Violation of principles of natural justice - denial of fair opportunity to respond to a Show Cause Notice - SCN uploaded under the Additional Notices tab on the GST portal - HELD THAT:- Clearly, petitioner has made out a case that Petitioner has missed out the receipt of the notice as it was merely uploaded on the portal under the category of Additional Notices tab and accordingly could not respond to the Show Cause Notice. The impugned order dated 14-3-2024 is set aside. Since the only reason for passing the impugned order is that Petitioner had not filed any reply/explanation, Petitioner needs to be granted one opportunity to respond to the Show Cause Notice and thereafter, the Show Cause Notice to be re-adjudicated. Petition disposed off.

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• Income Tax

• 2025 (1) TMI 1506
  Exemption u/s 11 - exemption disallowed on the ground that registration u/s 12AA granted to the assessee stood cancelled - what s the charitable nature of activities carried out by assessee in terms of Section 2(15)? - as decided by HC [ 2022 (8) TMI 1400 - ALLAHABAD HIGH COURT] for the applicability of proviso to Section 2(15), the activities of the trust should be carried out on commercial lines with intention to make profit. Where the trust is carrying out its activities on noncommercial lines with no motive to earn profits, for fulfillment of its aims and objectives, which are charitable in nature and in the process earn some profits, the same would not be hit by proviso to section 2(15). The aims and objects of the assessee-trust are admittedly charitable in nature. Learned counsel invites our attention to the order passed in M/s. Ghaziabad Development Authority Vikas Path [ 2023 (7) TMI 1551 - SC ORDER] wherein In the light of the decision in the case of Ahmedabad Urban Development Authority [ 2022 (10) TMI 948 - SUPREME COURT] and as corrected by the order [ 2022 (11) TMI 255 - SUPREME COURT] the present Special Leave Petition stands disposed of in terms of the said decision. Pending application also stands disposed of. As such, as jointly prayed for, the present special leave petitions are disposed of in terms of the order extracted supra. Exemption u/s 11 - exemption disallowed on the ground that registration u/s 12AA granted to the assessee stood cancelled - what s the charitable nature of activities carried out by assessee in terms of Section 2(15)? - It is not in dispute that the issue in question stands squarely covered and the similar petition preferred by the petitioner stands dismissed in terms of order passed by the Coordinate Bench of this Court M/s. Ghaziabad Development Authority Vikas Path [ 2022 (11) TMI 255 - SUPREME COURT] - Ordered accordingly.

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• 2025 (1) TMI 1505
  Transfer order issued u/s 127 (2) is found to be procedurally flawed, arbitrary, and violative of the principles of natural justice - absence of documented concurrence between the jurisdictional Principal Commissioners as mandated u/s 127 - HELD THAT:- The respondent no. 1 failed to adhere to the principles of natural justice. Despite the Petitioner s detailed objections to the proposed transfer and a request for the disclosure of incriminating material, no opportunity of being heard was provided and the requested material was not furnished. Petitioner was not provided with a reasonable opportunity to respond to the allegations due to inadequate notice for the hearing scheduled on October 14, 2024, coinciding with the Durga Puja holidays. Despite a valid request for rescheduling, Respondent No. 1 failed to accommodate the petitioner s concerns, effectively depriving the petitioner of a fair chance to present its case. Such omissions violate the procedural safeguards enshrined u/s 127 (2), rendering the transfer order invalid. The impugned order also lacked cogent reasoning and failed to address the specific objections raised by the petitioner. The allegations of unaccounted cash payments and irregularities in the transaction were vague and unsupported by any credible evidence. The respondent s reliance on vague references to incriminating material without disclosing the basis or specifics of the evidence rendered the transfer order speculative and unsustainable. The Respondents argument that the transfer was necessitated for coordinated investigation and meaningful assessment holds merit only when supported by valid reasons and material evidence. In the present case, the purported need for coordination is not substantiated by specific or credible evidence linking the Petitioner s assessment to the alleged concealment of income by the partnership firm. Thus the impugned transfer order is legally unsustainable.

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• 2025 (1) TMI 1504
  Reassessment notice against non-existent entity post-merger - HELD THAT:- We cannot condone the fundamental error in issuing the impugned notices against a non-existing company despite full knowledge of the merger. The impugned notices, which are non-est cannot be treated as good as urged on behalf of the Respondents. In Maruti Suzuki [ 2019 (7) TMI 1449 - SUPREME COURT] has held that issuing notice in the name of a non-existing company is a substantive illegality and not a mere procedural violation of the nature adverted to in Section 292B of the IT Act. Decided in favour of assessee.

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• 2025 (1) TMI 1503
  Adjustment of refund against the outstanding demand in the purported exercise of powers u/s 245 - Violation of principle of natural justice - HELD THAT:- An intimation proposing an adjustment was sent to the petitioner. However, after that, the petitioner was not granted a hearing, and no formal order was made under Section 245 of the IT Act. Instead, by communication dated 16 March 2024, the Petitioner was informed of the adjustment against the outstanding demand for assessment year 2018-2019. In our judgment, the procedure followed by the Respondents grossly violates the principles of natural justice and fair play. The record shows that the Petitioner addressed communications dated 5 December 2023, 6 December 2023 and 7 December 2023 to the Respondents regarding objections to the proposed adjustments. There was no consideration of these objections. The petitioner was granted no opportunity of a hearing. No formal order was also made dealing with the petitioner s objections. All this violates the principles of natural justice. We quash the adjustments made in the purported exercise of powers under Section 245 and direct the Respondents to deposit an amount of Rs. 4,91,45,369/- in this Court within two weeks from today.

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• 2025 (1) TMI 1502
  Validity of reassessment proceedings - notice u/s 148A (b), 148A (d) and 148 were not served either on email-id or by postal and, therefore, the proceedings are bad in law - HELD THAT:- As Petitioner submitted that the Petitioner has changed her address, but same was not informed to the Income-Tax Department and, therefore, the postal authorities may have returned the notices with the remark left. In our view, it was the duty of the Petitioner to inform change about her address to the Income-Tax Department and make necessary changes in the PAN card details. Having not done so, no fault can be attributed to the Respondents on account of non-service of the notices. Petitioner being an individual lady, and her husband being on transferable job by way of giving an opportunity, order u/s 148A(d) and notice u/s 148 and consequent notice u/s 142(1) are quashed. At the directions of the Court, Petitioner has given postal address and email-id on which the subsequent notices can be served.

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• 2025 (1) TMI 1501
  PIL - online utility provided by the respondents denied the assessees benefit of claiming a rebate u/s 87A of the Income-tax Act for the assessment year 2024-25 while filing online return against tax computed under various sections of Chapter XII of the Act - seeking direction or order directing the Respondents to allow assesses to file a manual return of income for claiming rebate Whether respondents are justified in modifying their utility, whereby an assessee is debarred at the threshold from making a rebate claim under Section 87A while uploading his return of income online? - HELD THAT:- As in the course of the hearing, our attention was drawn to the subject matter of Writ Petition in the case of Lupin Ltd. [ 2024 (3) TMI 1406 - BOMBAY HIGH COURT] wherein the assessee was prevented from making the claim of deduction based on the Supreme Court decision since electronic mode of filing the return was not permitting the assessee to do so. On a writ petition being filed and on a direction by this Court, a manual return was permitted to be filed for making the said claim. We were informed that while processing the manual return, the claim of the assessee was accepted. We are referring to this decision for the limited purpose to bring our point in support of our analysis that certainly the utility cannot be designed to prevent an assessee from making a claim which subsequently by adjudication and appeal process may be found to be correct. As in the case of Tata Sons Pvt. Ltd. [ 2024 (3) TMI 1405 - BOMBAY HIGH COURT] also permitted the assessee to file paper return which came to be processed and thereafter an appeal against such processing was filed by the assessee. This decision is also relied upon to the limited extent that the online system did not provide to make a claim which was permitted by paper return and processed accordingly. Therefore, it is not that an assessee can be debarred from making a claim in the return of income whether online or manual. If any such claim is made, the revenue would certainly be free to examine the same as per the provisions of the Act. Both the revenue and the assessee have remedies under the Act for testing the validity of such a claim. We, however, refrain from expressing any views on whether the submissions made by the learned senior counsel for the petitioners or the learned ASG are correct since that would be something which has to be examined by the quasi-judicial authorities under the Act in the first instance and not by a writ court in its exercise of extraordinary jurisdiction. We agree with the learned ASG that unless there is a demand for justice which has been rejected or a failure on the part of the revenue to exercise its duty under the Act, such a writ as prayed for in prayer clause (c) cannot be granted. We also agree with the learned ASG that unless there is some concrete instance, the Court should grant no relief in such broad and general terms. Such reliefs, in general terms, are typically not to be granted because the ramifications would be unclear. For the present, we do not propose to consider relief in terms of the prayer clause (c) of the petition by leaving the question open. Order:- Hon ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, direction or order directing the Respondents to modify the utilities for filing of the return of income u/s 139 of the Act immediately, thereby allowing assessees to make a claim of rebate u/s 87A of the Act read with the proviso to section 87A, in their return of income for the AY 2024-25 and subsequent years including revised returns to be filed under section 139 (5) of the Act. The issue of adjudication of eligibility of a claim under Section 87A is left to the authorities under the Act while processing the returns filed by the assessees.

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• 2025 (1) TMI 1500
  Revision u/s 264 - Necessity of amendment of the RoI before the application u/s 264 - TDS liability u/s 195 - payment made by the petitioner, which was initially disallowed u/s 40(a)(i) due to non-deduction of tax at source - Applicability of Article 12 of the DTAA HELD THAT:- The scope of the power which the Commissioner could have exercised under Section 264 it was clearly not imperative for the petitioner to have amended its RoI. As was pertinently observed both in Vijay Gupta [ 2016 (3) TMI 977 - DELHI HIGH COURT] and Interglobe Enterprises [ 2023 (2) TMI 34 - DELHI HIGH COURT] an assessee could be taxed only in respect of such part of its total income as was exigible under the Act. The judgments noted supra, further hold that an assessee could invoke the power conferred by Section 264 in order to rectify a mistaken stand taken earlier and where it may have offered income to tax even though the law placed no such liability. It was pertinently observed that an assessee is liable to pay tax only on such income which is otherwise chargeable under the Act. Our Court thus held that merely because certain income or receipt may have been mistakenly offered to tax, the same would not be conclusive if it were found and established that the same was not chargeable at all. The said principles would equally apply to the suo moto disallowance which the petitioner had made under the bona fide and yet mistaken belief that the same was liable to be offered for taxation. The said stand, in our considered opinion, could not have been negated merely because the RoI had not been amended. The conclusion so reached by the Commissioner in this regard clearly fails to bear in consideration the salutary power that Section 264 creates and confers. The power that the statute vests in the Commissioner could have been validly invoked if the assessee were to assert that it had erred or proceeded on the mistaken assumption that the said item of income or expenditure was liable to be taxed under the Act. Findings rendered in the context of Section 9 are concerned, as noted hereinabove, the Commissioner has failed to either advert to or examine the aspect on the anvil of the DTAA and the stand of the petitioner that the make available condition was not satisfied and the expenditure thus not liable to be viewed as royalty on which tax could have been validly imposed. Allow the instant writ petition and quash the order. The revision application shall consequently be taken up for consideration afresh, bearing in mind the observations appearing hereinabove.

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• 2025 (1) TMI 1499
  Validity of Tribunal order in breach of principles of natural justice - HELD THAT:- There is no dispute that the facts in the present appeal and those in the connected appeals are identical. Therefore, for the reasons we have recorded in our order disposing of the three connected appeals, we allow this appeal by passing the following order as order is dated 31 March 2017 [ 2017 (3) TMI 1959 - ITAT MUMBAI] set aside and the matter is remanded to the tribunal for fresh consideration in accordance with law and on its own merits.

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• 2025 (1) TMI 1498
  Monetary limits for filing Income Tax Appeals by the department before the High Court - Maintainability of appeal on low tax effect - HELD THAT:- As per submission of appellant where monetary limit (tax liability) in the present case is less than Rs. 2 Crores, therefore, in light of aforesaid circular (Para-5) dated 17/09/2024, the instant Tax Case stands disposed of.

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• 2025 (1) TMI 1497
  Communication Letter of the 1st respondent wherein the petitioner has been reminded by the arrears of income tax of various Assessment Year 2010-2011 to the Assessment Year 2020-2021 - petitioner has also challenged the Impugned Assessment Order passed by the 2nd respondent u/s 143(3) r.w.s.143(3A) and Section 143(3B) - contention of the petitioner that the Impugned Assessment Order was not communicated to the petitioner by the respondents - HELD THAT:- The challenge to the Impugned Assessment Order only on the ground that the same was not communicated to the petitioner cannot be countenanced, as the petitioner has not only participated in the proceedings but also was communicated with the Impugned Assessment Order dated 07.04.2021 through web portal. The petitioner has altered the E-mail ID and therefore, the petitioner has not received communication of passing of the Impugned Assessment Order dated 07.04.2021 through E-mail ID. Demand in the Impugned Communication Letter for the Assessment Year 2018-2019 demanding a sum of Rs. 7,07,61,360/- from the petitioner would be in line with the computation u/s 156 which would have accompanied with the Impugned Assessment Order dated 07.04.2021. The petitioner, has, however not kept a copy of the same along with typed set of papers. It is, therefore, open to the petitioner to file an appeal before the Appellate Commissioner under Section 246A of the Income Tax Act, 1961 against the Impugned Assessment Order dated 07.04.2021, since the present Writ Petition was filed on 09.09.2022. Liberty is granted to the petitioner to file a statutory appeal under Section 246A within a period 30 days from the date of receipt of a copy of this order. Stay of recovery of tax - As it is open to the petitioner to workout his remedy u/s 220(6) of the Income Tax Act, 1961 before the AO.

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• 2025 (1) TMI 1496
  Penalty proceedings 271DA beyond the period of limitation - whether the impugned order is beyond the period of limitation as prescribed in 275 (1) (c)? - HELD THAT:- Undoubtedly in the present case, the proceedings during the course of which decision for that proceedings for levy of penalty u/s 269ST should be initiated, had taken place during the financial year 2023-24 as it is reflected in the assessment order dated 28.03.2024. The assessment order clearly reflects that the penalty proceedings are being initiated separately. The order records that separate reference is being sent to the office of Addl. CIT-Central Range-04, Delhi for initiation of penalty proceedings U/s 269ST. AO has done so by making a reference on 08.04.2024. Thus, clearly the period of six months is required to be reckoned from the date of the reference, that is, from 08.04.2024 as that is the period which expires later than the end of the financial year in which the proceedings, during the course of which the decision was taken to initiate the penalty proceedings, were completed. There is merit in the petitioner s contention that the date of initiation of the penalty proceedings cannot be extended arbitrarily and indefinitely. Clearly in cases where there is an inordinate delay in initiation of the proceedings, it would be necessary to examine whether the period of limitation would stand extended on account of such delay. As settled law that in cases where no limitation period is mentioned for acts to be done, the same are required to be done within a reasonable period. See State of Punjab Ors. vs. Bhatinda District Cooperative Milk Producers Union Ltd. [ 2007 (10) TMI 300 - SUPREME COURT ] Thus, in cases where the initiation of the penalty proceedings are inordinately and inexplicably delayed beyond a reasonable period, the said issue may rise for consideration. In the present case no such issue arises for consideration of this court as the penalty proceedings were initiated within a period of eleven days of the culmination of the assessment proceedings whereas the decision to make a reference for initiation of the penalty proceedings was taken. We are unable to accept that this period can be termed as unreasonable. No merit in the present petition. The same is accordingly dismissed.

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• 2025 (1) TMI 1495
  Reopening of assessment u/s 147 - reason to believe - treatment of Foreign Exchange Loss and Premium on Forward Contracts - HELD THAT:- A reading of the documents that have been filed before this Court which have been referred to supra indicates that all the informations that were required for completing the Assessments were furnished by the petitioner in response to specific notices issued to the petitioner u/s 143(2). Specifically, information relating to Foreign Currency transactions and the loss based on which the expenses was claimed as the deduction under Section 37 of the Act was claimed was subject matter of the query by the Department pursuant to which Assessment Order came to be passed on 17.12.2018. Merely because, no opinion is expressed in the Assessment Order would not mean that the Assessment was completed without forming any opinion on the queries raised by the Department before the Assessment was completed. The Courts have taken a categorical stand that it cannot be assumed that Assessments were completed without forming an opinion. Merely because, opinion is not reflected in the Assessment that was completed earlier will not mean no opinion was formed earlier. If indeed no opinion was formed, as has been stated the remedy to correct such order lies by way of revision u/s 263 of the Income Tax Act, 1961. Therefore, impugned order has to go as the issue was considered before the Assessment Order dated was passed. Therefore, the impugned order is liable to be set aside. WP allowed.

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• 2025 (1) TMI 1494
  Unexplained money u/s 69A - cash deposits during the demonetization period - HELD THAT:- AO had applied the net profit rate of 8% for the rest of the year and only the cash deposited during the demonetization period was treated as unexplained, which is not correct. Merely because the money was deposited during the demonetization period, the same, in the absence of any evidence to the contrary, cannot be treated as unexplained deposit; more so when the deposits during the rest of the financial year are being treated as the business income of the assessee. Assessee had stated that the business was based on 100% cash transactions and total transactions in the bank account were due to business transactions, therefore, on the principle of consistency and without giving reasons why the specific amount was held to be not pertaining to the business, once the deposits for the rest of the year were being treated as part of the business income, the deposit during the demonetization period could not be excluded and added u/s 69A of the Act merely because they pertained to the demonetization period. Assessee filed the written submission claiming that his entire business was in cash - Instead of adding a sum u/s 69A and the addition on account of business income AO is directed to apply the net profit rate of 8% on the entire bank deposits. Appeal filed by the assessee is partly allowed.

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• 2025 (1) TMI 1493
  Bogus purchases - Estimation of income - HELD THAT:- The entire books of accounts have been placed before the Learned AO and the book results were accepted by the Learned AO and the same were not rejected by him. At the same time, the assessee also from its side could not prove the purchases made from 22 parties beyond reasonable doubt. Hence, it becomes a case of unverifiable purchases. We find that the average of last 3 years gross profit rate worked out to 1.55 percent and during the year under consideration, the assessee had earned gross profit of 1.6 percent. AR also submitted that in most of the earlier years, the assessments were completed u/s 143(3) of the Act in the case of the assessee and no adverse inference was drawn thereon. But the case involved herein is a case of unverifiable purchases where the profit margin would be slightly higher as purchases had been made in the grey market. Accordingly, we deem it fit and appropriate to estimate the profit margin embedded in the value of such disputed purchases at 2.5%, which in our considered opinion, would meet the ends of justice. Appeal of the assessee is partly allowed.

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• 2025 (1) TMI 1492
  Income tax liability against company dissolved - Disallowance u/s 14A r.w.r.8D - HELD THAT:- Section 14 of IBC Code is very clear on the aspect that once moratorium is drawn and the insolvency commencement date is declared any institution of suits or definition of pending suits or proceedings against the creditor, debtor (in the present facts of the case of assessee before us) including the execution of any judgment, decree, or order in any Court of law, Tribunal, Arbitration Resolution Plan/Process has been accepted by the NCLT. We refer to the decision of Ghanshyam Manz Retails Pvt. Ltd. Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Co. Ltd. [ 2021 (4) TMI 613 - SUPREME COURT] wherein as considered a situation wherein, the resolution plan was approved by the adjudicating authority under Section 31(1) of the IBC Code - once the resolution plan was drawn, the claim as provided in the resolution plan stood frozen, and will be binding on the corporate debtor, its employee, its members, creditors, Central Government and any State Government or legal authority, guarantor and other stakeholders. We also note that in the present facts of the case, the resolution plan is yet to be finalized. When, we read the newly inserted provisions of Section 156A of the Act, it is necessary to remand the appeal to the Ld. AO to take necessary steps/action as per Rules. Hence, we deem it fit and proper to remand this appeal back to the file of Ld. Assessing Officer to take necessary steps as per Section 156A of the Act. Accordingly, we allowed the appeal filed by the assessee.

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• 2025 (1) TMI 1491
  Genuineness of expenses claimed against the compensation received from assessee company - such expenses do not have any nexus with the assessee company nor does it affect the genuineness of compensation paid by assessee company - AO has made disallowance in the instance case solely by relying on the Report of Investigation Wing- Goa, wherein the Investigation Officer has expressed suspicion regarding the expenses booked by Mr. Surya - CIT(A) held perusal of order passed by the Ld. AO, it is crystal clear that no enquiry has been done and no even evidence has been collected and brought on record and addition has been made purely on conjuncture and surmises HELD THAT:- We are of the opinion that there is a substance in the submissions of the assessee and the Ld. CIT(A) passed detailed order with full discussions and there is no any ground exist, for which needs to interfere. Hence, grounds raised by the Revenue are not allowable and accordingly dismissed.

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• 2025 (1) TMI 1490
  Penalty levied u/s. 270A - guilty of misreporting of income - appellant had not filed original return of income and filed the return of income in response to notice u/s. 148 disclosing income - eligibility for immunity u/s 270AA - As per assessee income was offered voluntarily and also that the application u/s. 270AA of the Act seeking immunity from imposition of penalty was filed in the prescribed form HELD THAT:- Case of the appellant does not fall under the category of unreported income. It can be considered under clause (b) of subsection (2) of section 270A of the Act. So it cannot be said that the case of the appellant falls under subsection (9) of section 270A of the Act. Under the circumstances the AO was neither justified in rejecting the application u/s. 270AA of the Act nor ought not have levied penalty holding the appellant is guilty of misreporting of income. It is the settled position of law that when penalty proceedings were initiated invoking one limb of section 270A, penalty cannot be levied under another limb of this section. As decided in Prem Brothers Infrastructure LLP [ 2022 (6) TMI 130 - DELHI HIGH COURT] AO as well as assessee had used same details to arrive at different quantum of disallowances, this by no stretch of imagination could be held to be misreporting and further, in absence of details as to which limb of section 270A was attracted, impugned penalty order was to be quashed and revenue was to be directed to grant immunity u/s 270AA. Decided in favour of assessee.

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• 2025 (1) TMI 1489
  Revision u/s 263 - genuinity of assessee s claim of Long Term Capital Gain (LTCG) - as per CIT AO has mechanically accepted the reply filed by the Assessee and held that the capital gain earned on transfer of shares of M/s Trinity Tradelink Ltd. were genuine and further submitted that the SEBI has also amongst various penalty and declared M/s Trinity Tradelink Ltd. as a shell company itself declared as shell company and the said Company before the SEBI HELD THAT:- Case of the Assessee was reopened by issuing notice u/s 148 based on the information from Investigation conducted by Income Tax Department. After considering the reply filed by the Assessee and the document produced thereon, A.O. was fully satisfied about the genuineness of the transition and credits appearing in the bank account, accepted the Long Term Capital Gain as per Section 10(38) as genuine and framed the assessment order accepting in the returned income of the Assessee. It is not the case of no enquiry conducted by the A.O., on the other hand. The Assessee was re-opened in respect of the transaction made with M/s Trinity Trade Link Ltd. Company on the issue of Long Term Capital Gain and the Assessee produced all the relevant documents and after verification of the documents and due diligence. A.O. fully satisfied about the genuineness of the transaction and accepted the exemption of LTCG as per Section 10(38) of the Act, therefore, in our considered opinion, the Ld. PCIT committed error in invoking provision of Section 263. Also as on the date of issuing notice u/s 148 of the Act i.e. on 31/03/2021 and as on the date of passing assessment order u/s 147 of the Act i.e. on 14/03/2022, there was no such order of the SEBI and the SEBI has passed the order only on 29/06/2022, thus at no stretch of imagination, the A.O. could take cognizance to the findings of either SEBI or SAT orders. Decided in favour of assessee.

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• 2025 (1) TMI 1488
  Unaccounted cash credit u/s 68 - Addition at higher tax rate of 60% u/s 115BBE - deposits during demonetization period - ignorance of documentary evidences filed by the appellant during the appellate proceedings - whether sales taken place in October and November, 2016 are non-genuine and taxability of such sales under section 68 justified? - HELD THAT:- AO doubted such sales because the average cash sales were highly abnormal than the average sales during the corresponding period of preceding years and backdating of sales during October and November, 2016 could not be ruled out as the due date of filing of VAT Return for the third Quarter (October, November December, 2016) was 31.01.2017. However, there is no reference of any corroborating material to buttress such inference in the assessment order. Revenue has not placed any material to demonstrate that the details of cash sales shown by the appellant/assessee are fictitious/bogus. The books of account have not been rejected by the AO. The AO has not-doubted/questioned either purchases or stock-in-trade. AO has taxed the income embedded in the doubted/questioned sales of Rs. 63,37,500/- @ 30% and again taxing the doubted/questioned sales of Rs. 63,37,500/- u/s 68 @ 60%. Such contradictions; prima-facie, do not seem justified. The Revenue has also failed to place any material on the record to demonstrate that the VAT returns of the relevant year have not been accepted by the VAT authority. Decided in favour of assessee.

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• 2025 (1) TMI 1487
  Nature of expenses - capitalization of license fee - license fee expenses incurred in lieu of rights to use telecommunication spectrum license - revenue v/s capital expenditure - HELD THAT:-We noted that this issue stands covered by Hon ble Supreme Court decision in the case of assessee sister concern CIT Vs. Bharti Hexacom Ltd. [ 2023 (10) TMI 786 - SUPREME COURT] wherein held that the license fee paid under 1994 policy regime must be amortized as there is no basis to reclassify the same under the Policy of 1999 regime as revenue expenditure. Thus, held that the payment of licence fee to DTO under Telecom Policy, 1999 was capital in nature and allowed this appeal of Revenue.

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• 2025 (1) TMI 1486
  TP Adjustment - international transaction akin to an unsecured loan - delay in receiving the trade receivables is a separate international transaction akin to unsecured loan entered by the assessee with its Associate Enterprises(AE) and charged interest @ 5.068% for 93.6 days as being number of days over and above 30 days - HELD THAT:- We find that this issue is squarely covered by the decision of Kusum Health Care (P) Ltd. [ 2017 (4) TMI 1254 - DELHI HIGH COURT ] wherein laid down ratio that where the assessee having factored the impact of receivables on the working capital adjustment thereby on its pricing/profitability vis- -vis that its comparables, any further adjustment on the basis of outstanding receivables would distort the profitability and re-characterize the transaction. Disallowance the provisions of gratuity u/s 43B - HELD THAT:-We noted that the assessee has already added the provision of gratuity in its computation of income, which is not disputed by CIT-DR, however, to verify the same, we remit this issue to back to the file of the AO, who will verify the computation of income, whether the provisions of gratuity has been added by the assessee and not claim any further deduction. Hence, we remit this issue back to the file of the AO. Late payment towards employee s contribution to provident fund/ESI as prescribed - HELD THAT:- Assessee conceded this ground and stated that the issue is covered by decision of Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT ] Since, payments are belated payments in terms of respective statutes of ESI and PF Act, and, hence, appeal of the assessee on this issue is dismissed. Appeal filed by the assessee is partly allowed for statistical purposes.

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• 2025 (1) TMI 1485
  Denial Foreign Tax Credit based on TDS Certificate u/s 90 of the Income Tax Act, 1961 read with Article 23 of the Indo Japan DTAA - claim of the assessee was declined by the Ld. CIT(A) on the basis that Form No. 67 was filed after a gap of five years - HELD THAT:- As we hold that the claim of FTC does not get controlled solely by the delay in filing of Form 67 prescribed under rule 128(9) of the Income Tax Rules. Hence, we set aside the action of the Ld. CIT(A) and direct the AO to take cognizance of Form No.67 so filed and grant FTC as may be entitled to the assessee in accordance with law. Therefore, we here by direct the AO to allow benefit of Foreign Tax Credit subject to such enquiries and verifications as may be considered expedient. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1484
  Addition u/s 68 - unsecured loan obtained by the assessee / appellant from his wife Freyan Jamshed Desai by alleging that source of credit - HELD THAT:- We find materials substance in the submissions of assessee / appellant by which is crystal clear that the identity of the lender, genuineness of the Transaction and creditworthiness of wife of assessee / appellant is beyond question and by furnishing documentary evidences, the assessee appellant succeeded to discharge primary onus to prove or establish the same and there is nothing on record to controvert which has to bring the necessarily on record by the Revenue as per law, and even the Ld. AO /CIT(A) nowhere doubted about genuineness of the document placed on record by assessee. In above fact situation addition made by the Ld. AO on account of unsecured loan obtained by the assessee / appellant from his wife which was affirmed by the CIT(A) is quite unsustainable in the eye of law and hence ground no. 2, 2.1, and 2.2 is hereby allowed. Denial of exemption u/s 10(13A) of the HRA alleging absence of proof regarding payment of actual rent - As relevant that alleging absence of proof regarding payment of actual rent is unwarranted more so when the eligibility to claim HRA exemption is not disputed by the Revenue. It is also submitted that strangely the Ld. CIT(A) while deciding the appeal, ignored the back account statement submitted before him and dismissed the plea by stating that in the absence of actual rent paid by the assessee the submissions of him not accepted and above all it is highly relevant that the case of the assessee / appellant for the subsequent assessment years i.e. 2018-19 was also selected for scrutiny assessment wherein identical issue relating to exemption of HRA was examined in detail and thereafter the assessing officer fully allowed the claim to appellant without any deviation / disallowance. We find substance in submissions which is supported with relevant material on record and hence this ground of appeal is allowed.

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• 2025 (1) TMI 1483
  Addition u/s. 56(2)(vii)(b) - case was selected for limited scrutiny - assuming jurisdiction for making an addition u/s. 56(2)(vii)(b) an issue which did not form a basis for selection of the assessee s case for limited scrutiny ? Whether or not, the A.O without making any reference to the valuation cell rightly triggered the provisions of Section 56(2)(vii) r.w.s. 50C(2) of the Act and substituted the FMV of the lands purchased by the assessee as against the actual purchase consideration? Whether or not the A.O is right in law and facts of the case in concluding that the assessee had failed to substantiate his entitlement for claiming deduction u/s. 54B of the Act? HELD THAT:- Admittedly, the examination of the difference/variance in the purchase consideration of the property i.e. land situated at Mouja : Khapargaunge, Bilaspur (admeasuring 206.143 Aq. Mtrs.) that was purchased by the assessee for a consideration of Rs. 5 lacs as against the FMV/stamp duty value of Rs. 55,65,900/- in the backdrop of Section 56(2)(vii)(b) of the Act was not an issue for which the case of the assessee was selected for limited scrutiny u/s. 143(2) of the Act. Addition u/s. 56(2)(vii)(b) of the Act with respect to difference in the Fair Market Value (FMV) i.e. stamp duty/segment rate of property - Since the assessee s case was selected for limited scrutiny under CASS with respect to certain specific issues, therefore, the jurisdiction of the A.O in the absence of getting the said case converted into complete scrutiny as per the CBDT Instruction No.20 of 2015 dated 29.12.2015, was confined only to the specific reason/issue based on which the case of the assessee was picked up for such scrutiny. Accordingly, on the basis of our aforesaid observations, we are of the considered view that the addition of Rs. 50,65,900/- (supra) made by the A.O u/s. 56(2)(vii)(b) is liable to be quashed for want of valid assumption of jurisdiction by the A.O while framing the limited scrutiny assessment vide his order u/s. 143(3) of the Act, dated 15.12.2017. Thus, the addition of Rs. 50,65,900/- made by the A.O. is vacated for want of valid assumption of jurisdiction. Deduction u/s. 54B - We find that the agricultural lands sold by the assessee during the year under consideration, viz. (i) agricultural land admeasuring 1.424 hectares (out of 1.922 hectares) sold by the assessee vide registered sale deed dated 02.09.2014 i.e. (out of Khasra No.22/1, 22/4 and 28/2) situated at Mauja: Parsoda, Tehsil: Bilaspur; and (ii) agricultural land admeasuring 1.781 hectares (bearing Khasra No.17/1) situated at Mauja : Parsoda, Tehsil: Bilaspur sold by the assessee vide registered sale deed dated 02.09.2014, were in the two years immediately preceding the date on which they were transferred i.e. on 02.09.2014, being used by the assessee for agricultural operations i.e. growing paddy crop. Accordingly, we herein conclude that the aforesaid pre-condition contemplated u/s. 54B(1) of the Act i.e. usage of the agricultural lands in the two years immediately preceding the date on which they were transferred is duly satisfied by the assessee in so far the aforesaid agricultural lands admeasuring 1.424 hectares (supra) and 1.781 hectares (supra) are concerned. We, thus, modify the order of the CIT(Appeals), and conclude that the pre-condition as regards usage of the lands sold by the assessee for agricultural purposes in the two years immediately preceding the date on which they were transferred is found to have been satisfied in so far the aforesaid lands are concerned, viz. (i) agricultural land admeasuring 1.424 hectares (out of 1.922 hectares) (supra); and (ii) agricultural land admeasuring 1.781 hectares (supra). Accordingly, the A.O is directed to allow the assessee s claim for deduction u/s. 54B of the Act in so far the same pertains to the aforesaid lands sold by him during the subject year are concerned subject to verification of satisfaction of the other conditions contemplated in the said statutory provision. Thus, the Grounds of appeal No.3 4 raised by the assessee are partly allowed in terms of our aforesaid observations.

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• 2025 (1) TMI 1482
  Unexplained cash credit - On the date of search assessee stated that his father had the details of the cash found in his possession - assessee himself has disclosed the excess stock found during the course of the survey - HELD THAT:- Sales as shown which also include the sales which are treated as unexplained and added as unexplained cash credit by the Ld. AO however, the income from the same has not been excluded from the income computed by the assessee nor the purchases corresponding to the sales have been disturbed. In case the purchases are not disturbed, but the sales are treated as bogus, the same would go to increase the closing stock of the assessee and, therefore, would cover part of the excess stock disclosed during the survey, which adjustment has not been done. The copy of statement recorded at the NSCBI Airport was requested, which has not been provided as per the statement made by the assessee. Since the enhancement of income has been carried out without considering the submission of the assessee and apparently the cash sales have been included as part of the total sales and have also been added u/s 68 therefore, the treatment given to the transactions by the Ld. AO does not appear to be in consonance with the accounting principles. As the sales were treated as unexplained cash credit, they ought to have been reduced from the sales shown in the profit and loss account and the profit and loss account should have been recast to arrive at the total income of the assessee. Hence, the order of the Ld. CIT(A) is set aside with the above observations and the Ld. CIT(A) is directed to examine the profit and loss account and provide another opportunity to the assessee to make his submission on the income enhanced, which shall be considered before making any enhancement or upholding the addition made by the Ld. AO. The assessee had included the excess stock as part of his income and at the same time has denied the disclosure on account of excess stock made. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1481
  Addition on account of unsecured loans taken under limited scrutiny - procedure of converting the limited scrutiny assessment to the completed scrutiny - HELD THAT:- Since the assessee has not shown any income/loss from share transaction business in her return of income filed and further no details were filed with respect of the investment made in the share transactions business, in our opinion, the AO was well within the jurisdiction for examining the investments as they were not disclosed by the assessee which include the source thereof and identity, genuineness and creditworthiness of the transaction. When the AO has reason to examine the issue of investment it covers all the aspects related to it i.e. source. As the assessee stated that investments were made out of loans taken, the AO has left with no other option but to examine these loans and it is the duty of assessee to establish the genuineness and creditworthiness of such loan creditors. We are not inclined to accept the argument of the ld. AR that the AO has exceeded his jurisdiction without following the procedure of converting the limited scrutiny assessment to the completed scrutiny. Accordingly, this ground of appeal i.e. Ground No.1 of the assessee is dismissed. Addition on account of loans taken by the assessee for making investments in the share business - We find that the assessee has submitted the affidavits and other documents which were also submitted before the AO during the course of hearing, however, besides filing these details no further evidence such as their return of income etc were filed to prove the creditworthiness of the loan creditors. It is also seen that a sum of Rs. 21 lakhs was received by the assessee from her husband Shri Pradipta Kumar Pradhan and the immediate source of the same is explained as withdrawals from the bank account where he has taken loan against the property. All these facts need to be verified and considered by the AO, who has not made any comment on such evidences filed by the assessee. Therefore, we set aside the issue to the file of AO to make necessary verification of the loan credits and if needed, necessary summons to be issued to such loan creditors as has been held in the case of Odisha Corporation (P) Ltd. [ 1986 (3) TMI 3 - SUPREME COURT] Thus, this ground of appeal is partly allowed for statistical purposes.

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• 2025 (1) TMI 1480
  Revision u/s 263 beyond period of limitation - disallowance u/s 43B(e) of the Act on account of interest payable to scheduled banks on bank loan - HELD THAT:- Case the assessee filed the original return of income on 06.09.2017 the said return was processed and an intimation u/s. 143(1) was issued on 16.10.2018. Thereafter, notice u/s. 148 was issued on 17.03.2020 and that re-opened assessment order was passed on 15.04.2021. The issues on which PCIT is seeking to exercise the jurisdiction u/s. 263 of the Act were concluded by virtue of an intimation dated 16.10.2018 issued u/s. 143(1) of the Act which admittedly was done beyond a period of two years prior to the notice dated 14.02.2023 issued u/s. 263 of the Act. As relying on CHAMBAL FERTILISERS [ 2024 (2) TMI 1381 - RAJASTHAN HIGH COURT] also confirmed by SC [ 2025 (1) TMI 463 - SC ORDER] the order of the PCIT was barred by limitation as prescribed under the Act and thereby we considered the ground no. 1 and 2 raised by the assessee.

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• 2025 (1) TMI 1479
  Brought forward business loss set off against deemed short term capital gain taxable u/s 50 - assessee had transferred certain capital asset forming part of a block of depreciable assets and derived capital gain - HELD THAT:- Hon ble Jurisdictional High Court has decided identical issue in favour of the assessee in case of PCIT vs. Alcon Developers [ 2021 (2) TMI 284 - BOMBAY HIGH COURT ] this Court has accepted the position that it is not the requirement of section 72 of the said Act that such gain or profit must be taxable only under the head of profits and gains of business or profession . The carry forward business losses would therefore be set off against the short-term capital gains on the sale of building, plant, and machinery. This is yet another reason not to accept the submissions of revenue and to answer the substantial questions of law against the Revenue and in favour of the assessee. Special Leave Petition (SLP) filed by the Revenue [ 2022 (7) TMI 1574 - SC ORDER] against the aforesaid decision of the Hon ble Jurisdictional High Court has been dismissed by the Hon ble Supreme Court, of course, due to low tax effect. Identical issue has been decided in favour of the assessee by the Coordinate Bench in case of Digital Electronics Ltd. [ 2010 (10) TMI 722 - ITAT, MUMBAI ] and the decision has been upheld by the Hon ble Jurisdictional High Court [ 2017 (3) TMI 274 - BOMBAY HIGH COURT ] Thus we direct the AO to allow assessee s claim of set off of carried forward business loss against the deemed short term capital gain computed u/s. 50 of the Act. Assessee appeal allowed.

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• 2025 (1) TMI 1478
  Final assessment order was passed u/s. 143(3) without first passing draft assessment order - HELD THAT:- A perusal of assessment order dated 12.12.2019 shows that the assessment order has been passed u/s. 143(3) of the Act and not u/s. 144C(1) of the Act. Further, issuance of demand notice and penalty notice along with said order clearly indicates that mentioning of section 143(3) of the Act, on the order is not merely a typo mistake but a well thought out final assessment order passed by the AO. The final assessment order passed without following mandatory provisions set out u/s. 144C of the Act is without jurisdiction, hence, liable to be quashed. Timelines in passing the assessment order as time barred - Assessment order was passed by the AO on 29.09.2021 i.e. almost after 12 months from the end of month in which the DRP directions were passed. Even if, benefit of TOLA is allowed to the AO the notification issued on 27.04.2021 under TOLA, extended time for passing order u/s. 144C(13) of the Act up to 30.06.2021, hence, final assessment order passed by the AO is time barred. [Re. Shell India Markets P. Ltd. [ 2022 (2) TMI 1149 - BOMBAY HIGH COURT ]). Hence, assessment order dated 29.09.2021 is barred by limitation. Assessee appeal allowed.

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• 2025 (1) TMI 1477
  Rectification u/s 154 - Addition for provisions for expenses - basic accounting principles - CIT(A) deleted addition - HELD THAT:- As submitted to the AO that the issue has already been heard by the Jaipur Bench of ITAT and decided in favour of the assessee, and further, it was also explained that the assessee has not separately claimed Provision of Expenses in the income tax return, AO without considering the order of the Coordinate Bench of ITAT on the same issue, passed an order u/s 154 making an addition which shows the high handedness of the AO to interfere in the already concluded proceedings. At this point we note the observation of the apex court in the case of Parashuram Pottery Works Co. Ltd. [ 1976 (11) TMI 1 - SUPREME COURT] wherein noted that At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi judicial controversies as it must in other spheres of human activity . Bench also that the Association filed an appeal before the Ld CIT(Appeals) against the order passed by the AO, where ld. CIT(A) allowed the appeal in the favor of the Association by holding at last the order that It appears that the A.O. has not perused the above documentary evidences filed by the appellant at various stages and the computation of income and the financials of the appellant which would be available in the assessment record and after giving the appeal effect of order of CIT(A) which has also been confirmed by the Hon ble ITAT, has made the order u/s. 154 withdrawing the appeal effect/making addition of Rs. 2,30,26,342/- without an iota of verification or application of mind about the issue and the facts involved . Thus, we feels that there is no ambiguity in the order of the ld. CIT(A) and we do not incline to interfere in the order of the ld CIT(A). Hence, the appeal of the Revenue is dismissed.

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• 2025 (1) TMI 1476
  Addition of 20% of the expenses u/s. 37 - reasons given by the ld. AO show that considering the PSU status and turnover of assessee, the claimed expenses are very high and raises suspicion on the payment - HELD THAT:- Before the ld. CIT(A), assessee submitted additional evidences which were admitted for the reason that during the short span of time it was not possible to collect the invoices and other details from all the branches and units. CIT(A) forwarded all these details to the jurisdictional AO for submission of remand report, even after considerable time, the ld. AO did not submit remand report. CIT(A) admitted additional evidences, verified the same on test check basis and deleted the disallowance. It is not the case of the ld. DR even now that details submitted by the assessee before the ld. CIT (A), which were sent to ld. AO for submission of remand report were not complete and proper. Therefore, we do not find any infirmity in the order of the ld. CIT A in deleting the above disallowance. Accordingly ground number 1 of the appeal is dismissed. Addition of 5% of sundry creditors payable towards purchase suppliers and work and for expenses as a cessation of liability under section 41 (1) read with section 28 (iv) - HELD THAT:-Natural corollary would be that the amount of addition u/s 41(1) cannot be made on ad hoc basis. The learned assessing officer has applied five percentage of the total liability outstanding in the books of the assessee and held that it has ceased to exist and therefore chargeable to tax under section 41 (1). On reading of the provisions under section 41 (1) of the Act any ad hoc addition is not warranted. It must be the actual liability which has ceased to exist, is chargeable to tax in the hands of the assessee. Therefore, no infirmity in the order of CIT A in dealing with the additional evidences filed by the assessee, which were sent for remand report to the assessing officer but for substantial time no such remand report was submitted, and therefore on examination by the learned CIT A, he has reached at a conclusion that the liability is stated by the assessee as on 31/3/2017 is in existence and has not ceased and therefore not chargeable to tax under section 41 (1) of the act. Accordingly, we dismiss ground number 2 of the appeal of the learned AO. Disallowance of provision - CIT(A) has disallowed only because in absence of specific identity of the debtors, it is not possible to close the account of such debtors and therefore the disallowance was made and confirmed - HELD THAT:- Had the details of individual accounts available with the assessee, there would not have been a separate account opened for such consolidated debtors. From that consolidated account of the debtors, part of the sum comprising of 83.59 crores could not be reconciled, which was written off. Therefore, disallowance, of the sum considered as bad debt by the assessee, by the learned lower authorities is not correct, as it satisfies all the conditions of section 36 (1) (vii) read with section 36 (2) of the act. This claim of the assessee is allowed based on the principles of the allowability of bad debts, which are otherwise allowable irrespective of the additional evidence submitted by the assessee. Accordingly, the learned assessing officer is directed to delete the disallowance of 83.59 Crores being amount written off in relation to the number of sundry debtors (the customers). Disallowance as bad and doubtful debts from ex-employees - HELD THAT:- Apparently from the books of accounts of the assessee its shows that this is provided as bad and doubtful debts. Therefore now the question of claiming the same as a business loss does not arise because assessee has failed to show that the loss has arisen during the year. Merely because it is the claim of the assessee that same should be allowed as a business loss, it cannot be allowed unless it satisfies the provisions of section 28-29 of the income tax act. In fact when the books of accounts shows that this is merely a provision for bad and doubtful debts, naturally there is no provision in the income tax act applicable to the assessee, which shows that it is allowed while computing taxable profits of the assessee. Various judicial precedents relied upon by AR also does not support the case. Accordingly we do not find any infirmity in the order of the learned CIT A in confirming the disallowance being amount provided as bad and doubtful debts from ex-employees to whom materials issued are not returned as well as excess material is drawn by them. Excess balance of in the said bank - HELD THAT:- These are the minor differences arising on account of reconciliation. It was pointed out by the audit party. The assessee on its failure to reconcile the same decided to write it off to the profit and loss account but wrongly clubbed into another account head. Therefore, if the assessee has come to know about the error in its books of account during the year, of non-existence of an asset, though disclosed as an existing asset in books of accounts of the assessee, writing off the same would be allowable to the assessee as deduction. Therefore, as the amount is small and it has arisen out of the bank reconciliation, same is allowable to the assessee u/s 28 of the act for computation of profits and gains. Accordingly, we direct the learned lower authorities to delete an amount on account of excess balance of in the said bank. Disallowance being amount written off consisting of advances given to various parties - HELD THAT:- Except the standard operating procedure, the nature of accounting entries being passed, no substantial evidence could be placed with respect to the claim. Before us also, merely judicial precedents are cited without showing the facts. Therefore, we do not have any option, but to confirm the order of the learned lower authorities in confirming the disallowance with respect to the suppliers. Second item of the advances to the staff, similar conditions apply as far as the claim of the loss raised by the assessee. For this also assessee has failed to give any reason that why such losses are treated as incurred during the year. No further details were provided, except showing us the standard operating procedure, which does not help the case of the assessee. Accordingly, the disallowance by CIT A is also confirmed. Computation of book profit u/s 115JB - HELD THAT:- As accepted fact that the learned assessing officer has computed the book profit under section 115JB of the act without any form number 29B filed by the assessee. In absence of any details of any brought forward losses or unabsorbed depreciation as per the books of accounts, the learned assessing officer did not grant deduction of least of these two items. When the matter reached before the learned CIT A, he directed the learned assessing officer to compute the book profit under section 115JB of the act by giving an opportunity of hearing to the assessee and then compute the same in accordance with the provisions of the law. As the issue has been restored back to the file of the learned assessing officer to compute the book profit correctly, it is the duty of the assessee to show that there is any book loss or unabsorbed depreciation available to the assessee to be granted as deduction from the book profit. It is for the assessee to compute and show before the learned assessing officer the brought forward losses and unabsorbed depreciation as per the books of account.

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• 2025 (1) TMI 1475
  TP Adjustment - selection of MAM - Assessee had adopted the aggregate transactions approach and applied Transactional Net Margin Method ( TNMM ) for bench marking of the international transactions - TPO and Ld. DRP adopted the Comparable Uncontrolled Price ( CUP ) and Other Method ( OM ) and rejected the TNMM adopted by the assessee - Whether close inter-linking between all the transactions exist or not, so as to justify the aggregation approach? - HELD THAT:- There is a substantial change in the nature of services received by the assessee and the service provider in A.Y. 2018-19 as compared to A.Y. 2009-10. It is also a fact that, the co-ordinate bench of ITAT in assessee s own case for A.Ys. 2011-12 to 2014-15, 2016-17 and 2017-18 has given their findings in favour of the assessee relying on the findings of A.Y. 2009-10. As there is substantial changes in the nature of services received by the assessee and the service provider in A.Y. 2018-19 as compared to A.Y. 2009-10, the facts on the basis of which the Tribunal has decided the issue in A.Y. 2009-10, has got substantially changed. Therefore, close inter-linking between all the transactions are required to be established with documentary evidence, before deciding, whether aggregate transactions approach can be adopted or not. Therefore, we set aside the issue to the file of Ld. TPO to verify with the documentary evidence and confirm whether there is any close inter- linking between all the transactions or not and decide as per law. Accordingly, the grounds of the assessee are dismissed. Adjustment for payment of interest on Masala Bond - assessee has paid interest on Masala Bond @ 8.70% per annum and the Ld. TPO bench marked the same at 7.53% per annum - HELD THAT:- Considering the factual matrix of the case, we are of the opinion that, the bench marking of the interest on Masala Bond can be taken at 8.70% per annum. Therefore, we direct the Ld. TPO to consider the rate of interest on Masala Bond at 8.70% per annum and delete the addition. Accordingly, these grounds of assessee are allowed. Refund of excess Dividend Distribution Tax ( DDT ) - HELD THAT:- We are of the considered opinion that, if any tax has been paid erroneously in excess over the applicable rate, then, it should be refunded to the assessee. Therefore, we direct to the AO to verify the same from the record and issue the refund towards the excess payment, if any, made by the assessee. Accordingly, these ground of the assessee are allowed for statistical purposes. AO allowed less credit on account of MAT and TCS - HELD THAT:- We are of the considered opinion that, the eligible credit on account of MAT and TCS should be provided to the assessee. Accordingly, we make a direction to the Ld. AO to allow necessary credit on account of MAT and TCS after verification of the record, as per law. Accordingly, these grounds of the assessee are allowed for statistical purposes

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• 2025 (1) TMI 1474
  Revision u/s 263 - Validity of reassessment proceedings - case of the assessee was assessed as protective assessment - non-examination of sundry creditors - HELD THAT:- It is observed that the case of the assessee was assessed as protective assessment for the preceding year also. It confirms the stand of the Revenue that, in the matter of the assessee, the revenue is firm about the status of the matter, i.e. to be assessed under the protective scheme of assessment. It is further observed that the order of the Ld. CIT (A) in the case of Sh. Mahendra Mehra for A.Y.s 2012-13 and 2013-14 was passed on 12.10.2023 and confirmed the order as substantive assessment, whereas the notice u/s. 263 of the Act was issued first time on 04-08-2022 and final order was passed on 14.03.2024. This chronology of event has its own importance, i.e. when the status of Sh. Mahendra Mehra has been taken as substantive and further confirmed by the Ld. CIT (A), there is no protective assessment stands on its own feet now against the assessee under consideration. The notices issued u/s. 263 of the Act are no more valid as the order against which the same were issued, is no more in existence, as the department has taken a firm stand against Sh. Mahendra Mehra. Now let s consider the position of law with regard to protective assessments. The concept of protective assessment has not been defined in the Income-tax Act and there are no specific provisions governing the same. However, it is well settled by judicial precedents and it is an established departmental practice which has gained judicial recognition by the Courts over the years that in the interest of revenue, protective assessment can be framed in a situation where the revenue during the proceedings finds that a particular amount of income can be taxed in the hands of different persons/assessee but the Assessing Officer is not sure enough about such person in whose hands the income is chargeable to tax. A protective assessment is regarded as being protective because it is an assessment which is made ex abundanti cautela where the department has a doubt as to the person who is or will be deemed to be in receipt of the income . Thus, we are of the firm view that, the revenue has taken a firm view against Sh. Mahendra Mehra; hence there can t be any simultaneous proceedings of the same matter and amount against the assessee under consideration. Non-consideration of the assessee s submissions - On this issue we have gone through the factual paper book submitted by the assessee, wherein it is submitted before us in the form of screen shots of reply uploaded (Copies of replies also submitted before us). It is observed that the contentions raised by the assessee are correct and the order passed by the Ld. PCIT (Central), Jaipur was being passed without due consideration of the assessee s submission and certainly a serious violation of the Principle of the Natural Justice. In the result, Ground No. 3 raised by the assessee is also allowed.

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• 2025 (1) TMI 1473
  Rejection of application for registration u/s 12AA based on a typographical error in the application form - as submitted due to a typographical/inadvertent error the application was filed u/s 12A(1)(ac)(vi)(B) whereas the assessee was required to file application u/s 12A(1)(ac)(iii) since it was an old trust already registered u/s 12 of the IT Act and was required to get registration under the new provisions of the IT Act HELD THAT:- As relying on Raj Krishan Jain Charitable Trust [ 2024 (6) TMI 1400 - ITAT DELHI] we find force in the arguments of Ld. Counsel of the assessee that Ld. CIT, Exemption, Pune erred in dismissing the application for registration merely on a technical ground and accordingly we deem it proper to set-aside the order passed by Ld. CIT, Exemption, Pune and direct him to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (vi) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (1) TMI 1472
  Revision u/s 263 - AO failed to initiate penalty u/s. 270A for under-reporting of income vitiates the assessment order passed by the AO u/s. 153A of the Act thereby making assessment order, erroneous as well as prejudiced to the interest of the Revenue - HELD THAT:- As undisputed that there has been no Intimation issued by the revenue u/s. 143(1)(a) of the Act. Therefore, it can be safely presumed that the assessee cannot be considered to have under-reported his income within the meaning of sub-section(2) of section 270A of the Act. In that event, unless assessee s case falls in the ken of sub-section 2, the invocation of sub-section (9) of section 270A does not arise. Moreover, machinery provisions to levy penalty u/s. 270A of the Act also fails because, the penalty is computed @50% of the amount of tax payable on the under-reported income in consequence to mis-reporting of income or @200%of the amount of tax payable on the under-reported income in consequence to mis- reporting of income. So, without computing under-reporting income as per sub-section (2) of section 270A of the Act, machinery provisions also fails. It is a trite law that the penalty provisions must be construed strictly. Therefore, the direction given by the Ld.PCIT modifying the assessment order with a direction to AO to invoke the applicable penalty provisions u/s. 270A(9)(e) on the entire sum is legally untenable - Appeal of the assessee is allowed.

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• 2025 (1) TMI 1471
  Disallowance u/s 14A r/w Section 8D - HELD THAT:- As the appellant company had not earned any exempt income from the investment and the investment did not fall under the category of exempt income in the year under consideration. Hon ble High Court had rendered decision in the appellant s own case for the A.Y. 2012-13 [ 2021 (12) TMI 441 - ITAT DELHI] Therefore, deletion on account of disallowance deserves to be upheld. Addition on account of Rental Income - CIT(A) by referring the details of Rental income observed that appellant had submitted details of documents before the AO for verification - CIT(A) directed the learned AO to consider the submissions made by the appellant/assessee and give relief subject to verification of evidence. In the given facts, the order of learned CIT(A) deserves approval. Disallowance of Misc. Foreign Expenses - Genunity of expenses not doubted and expenses being incurred wholly and exclusively for purposes of business are not disputed by the revenue. So assessee deserves relief. Disallowance of Advertisement and sales promotion exp on being 1% of total expenditure on the head - The books of accounts were not rejected. In the case of assessee s own case, learned CIT(A) for A.Ys. 2011-12 2012-13 had decided the issue in favour of the assessee. So the contention of learned AO was not justifiable and the reasons of treating 1% of total expenditure as bogus or unexplained was unwarranted. Disallowance of 50% of software expenses - Since learned AO had not given any specific reason and exact amount of the expenditure to treat such expenditure as capital in nature. Relying on judgments of learned CIT(A) and ITAT in appellant s own case, the view taken by learned CIT(A) is meritorious. Disallowance of expenses of Consumption debtors - CIT(A) appreciated party wise details of consumption debtors showing that the discount was very much ascertained. The consumption debtors were filed before the learned AO during the course of assessment proceedings. ITAT has also allowed this claim of the A.Ys. 2011-12, 2012-13, 2013-14 2014-15 and the Hon ble High Court of Delhi [ 2022 (8) TMI 361 - DELHI HIGH COURT] also allowed the case in favour of the assessee. The learned CIT(A) rightly relying on the judgments deleted additions Disallowance u/s 43B of the Act towards claim of Leave Encashment - As per ratio of judgment in the case of Exide Industries Ltd. [ 2007 (6) TMI 175 - CALCUTTA HIGH COURT] the directions for verification of the claim of assessee are deserves to be upheld. Revenue appeal dismissed.

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• 2025 (1) TMI 1470
  Disallowance being provisions for bad and doubtful reserve - whether appellant was entitled to the relief u/s 36(1)(viia)? - HED THAT:- As in case of Bharuch Dist. Central Co-op. Bank Ltd. [ 2013 (8) TMI 405 - ITAT AHMEDABAD ] as held that amount credited by bank to reserve for bad and doubtful debts towards standard assets is not deductible u/s 36(1)(viia), as it is not akin to provision for bad and doubtful debts. The terms reserve and proviso are not one and same. Provision for bad and doubtful debts is a liability whereas reserve is assessee s own fund. Hence, both cannot be equated and assessee is not entitled for any deduction in absence of any provision for bad and doubtful debts. The facts of present case are similar to the above decision. It is clear from the details given by the appellant during the proceedings before ITAT that the appellant has not created any provisions for bad and doubtful debts. The reserve account cannot be considered as provision for the purpose of allowing deduction u/s 36(1)(viia) of the Act. The decisions relied upon by Ld. AR are not applicable because facts in those decisions are different. The issue in these cases pertained to Provision for bad and doubtful debts and not reserve . Therefore, claim of deduction u/s 36(1)(viia) of the Act is not allowable. Therefore, the decision of the CIT(A) is confirmed, and the ground of the assessee is dismissed. Write up u/s 36(1)(vi) of investment in Madhavpura Mercantile Co-Op. Bank (MMCB) - appellant has also taken alternate ground that the same is allowable even without provisions of section 36(1)(vii)/36(1)(viia) - whether investment of FDs written off by a Co-operative Bank is capital or revenue in nature? - HELD THAT:- It is seen that as per section 6 of the Banking Regulation Act, 1949 which deals with the form and business in which the banking companies may engage, dealing in funds is a part of banking business. Apart from accepting deposits and lending money, investing in deposits is also a part of banking business. Accepting deposits and giving of loans and advances, making investments, deposits etc. form part of core activity of banking business. Thus, the deposits placed with MMCB was wholly in the course of and for the purpose of business. Therefore, the deposits held by the assessee-bank cannot be treated as capital asset and they formed part of stock-in-trade. This is also fortified by the fact that the interests earned on such deposits are offered to tax and have been taxed by the Department as business income. Whether write off the said deposit is a loss arising in the course of carrying on banking business ? - Once it is held that holding of deposits forms part of banking business, write off such loss will be a loss arising in the course of carrying on banking business. From the facts of record, it is seen that the same MMCB incurred huge losses and the RBI cancelled its license to carry on banking business. The RBI also directed the banks which had deposits with MMCB to write off those losses. Accordingly, we are of the view that loss incurred by the appellant is a business loss incurred during the course of carrying on its banking business. Whether loss can be claimed without debiting the P L account? - On the issue of violation of RBI norms, it is for RBI to take appropriate action against the bank, if at all there was any violation in 2011-12. It is further seen that in the subsequent period, the appellant had recovered part of the deposit amount which was also offered to tax. This also strengthens the claim of the appellant as a business loss was incurred in the course of carrying on of banking business. In his brief summary, the Ld. AR submitted that assessee has offered subsequent recovery from MMCB as income and the assessee may recover further amount in future. The assessee has also conceded deduction of Rs. 35,00,000/- out of Rs. 7.81 crore, which pertained to AY.2013-14. Claim of the appellant that write off of FDs with MMCB as a business loss is partly allowed and AO is directed to delete addition. Accordingly, the ground of appeal is partly allowed .

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• 2025 (1) TMI 1469
  Accrual of income in India - FTS under Article 12 of the India-Netherlands DTAA - cost recoveries received by the assessee from its affiliates - technical knowledge, experience, and skill - scope of make available clause - HELD THAT:- We concur with the view of the assessee that there is no specific reference as to how the make available under the India-Netherlands Tax Treaty has been satisfied while rendering the above services, so as to fall within the ambit of FTS under the India-Netherlands Tax Treaty. Accordingly, in view of our observations in the preceding paragraphs while dealing with the issue for A.Y. 2009-10 to 2018-19 vide order dated 20.03.2024, we are of the considered view that the make available clause has not been satisfied in the instant facts and therefore, the services mentioned above do not qualify as FTS under India-Netherlands Tax Treaty. In the result, we hold that the above services did not qualify as FTS under the India-Netherlands Tax Treaty, since the make available clause has not been satisfied in the instant facts. Ground Nos. 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the assessee s appeal are allowed, since the services do not qualify as FTS under the India-Netherlands Tax Treaty. Whether services are merely cost allocation / reimbursement are taxable? - We have decided this issue against the assessee for previous assessment years and therefore held assessee has not been able to demonstrate that only the precise cost incurred for rendering services has been recovered, and therefore, there is no income element at the India level, during the course of rendering of the services. Accordingly, we are not inclined to agree with the aforesaid argument of the assessee. levy of surcharge, education cess and secondary and higher education cess on the tax levied - Rate of tax on total income @ 12% instead of 10% - We observe that this issue has been decided in favour of the assessee in the aforesaid order [ 2024 (3) TMI 1066 - ITAT AHMEDABAD ], as held Article 12 read with Article 2 of the Tax Treaty makes it clear that the rate of tax at 10% would encompass surcharge and education cess as it is also in the nature of tax. Therefore, we hold that levy of surcharge and cess over and above the taxable rate of 10% on royalty and FTS is not permissible as per the Treaty provisions. Short Credit of TDS, Arithmetical inaccuracy in calculating tax liability and Incorrect Adjustment of Refund - The issue is restored to the file of the Ld. AO to verify the facts, after giving due opportunity of hearing to the assessee to present the complete set of facts and thereafter pass an order, in accordance with law.

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• 2025 (1) TMI 1468
  Disallowances u/s 36(1)(iv) - Contribution made to approved superannuation fund to bridge the gap between actual contribution and actuarial valuations - HELD THAT:- As decided in Exide Industries [ 2022 (9) TMI 1259 - CALCUTTA HIGH COURT] amount which was remitted by the respondent assessee is neither towards an initial contribution nor towards an ordinary annual contribution and, therefore, the ceiling fixed under the rules will not apply to such a contribution. That apart, this contribution had to be made considering the peculiar circumstances and it was a one-time payment, therefore we are of the view that the learned Tribunal rightly allowed the appeal filed by the assessee. Decided against the Revenue. Excess contribution to approved gratuity fund to part fund the gap in actuarial valuation and actual contribution - As decided in Eastern Equipment and Sales [ 1990 (11) TMI 27 - CALCUTTA HIGH COURT] as relying on Gestetner Duplicators (P) Ltd. [ 1978 (12) TMI 1 - SUPREME COURT] where the Supreme Court while considering the approved provident fund held that if the provident fund contravenes any of the conditions to be satisfied for its recognition, the taxing authority may refer the question of withdrawal of recognition to the Commissioner, but until the Commissioner acting under the powers reserved to him withdraws such recognition, the taxing authority must proceed on the basis that the provident fund has satisfied all the conditions for its recognition in that year, any other course is bound to result in chaos and uncertainty which has to be avoided. Decided against the Revenue. Addition u/s 143(1) being sustained at the level of Ld. AO - As the concerned Kolkata Port Trust (Non-contributory Provident Fund) Regulations 1988 notified under the Major Port Trust Act does not specify any due date for this purpose, no disallowance u/s 36(1)(va) is warranted on account of the delay in deposit of the contribution. It is not disputed by the A.O. that the deposit was actually made within a couple of days from the artificial due date . Perusal of the column 20(b) of Form 3CD reflects that for most of the months the contribution as deposited well before the artificial due date itself. Therefore, in my considered opinion, in the absence of any specified due date, deduction u/s 36(1)(va) cannot be denied when the contribution has actually been credited in the concerned fund within the following month of contribution. Consequently, the disallowance made by the A.O. u/s 36(1)(va) is hereby delete d.

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• Customs

• 2025 (1) TMI 1467
  Seeking issuance of an appropriate writ for directing the Respondents to release and return the seized gold ornaments belonging to the Petitioner - Smuggling of Gold - prohibited goods or not - HELD THAT:- The Supreme Court in Pushpa Lekhumal Tolani [ 2017 (8) TMI 684 - SUPREME COURT ] has considered whether jewellery being carried by a tourist as part of her baggage would qualify as smuggling under the Act read with the Baggage Rules, 1998, that was in force during the relevant period. The Supreme Court clearly holds that it is not permissible to completely exclude jewellery from the ambit of personal effects . Accordingly, the Court declared that the seized jewellery items therein were the bona fide jewellery of the tourist for her personal use and was intended to be taken out of India. In Saba Simran v. Union of India Ors. [ 2024 (12) TMI 19 - DELHI HIGH COURT ] this Court was seized with the issue of deciding the validity of the seizure of gold jewellery by the Customs Department from an Indian tourist. The Court considered the ambit of personal effects vis- -vis jewellery under the Baggage Rules, in effect from time to time. A conspectus of the above decisions and provisions would lead to the conclusion that jewellery that is bona fide in personal use by the tourist would not be excluded from the ambit of personal effects as defined under the Baggage Rules. Further, the Department is required to make a distinction between jewellery and personal jewellery while considering seizure of items for being in violation of the Baggage Rules. The Baggage Rules have to be interpreted in a manner that does not lead to unnecessary burden upon the tourist, being either of Indian or foreign origin. Accordingly, the term personal effects cannot exclude personal jewellery or ornaments, as is clear from a harmonious reading of the Baggage Rules. Conclusion - i) The jewellery of the Petitioner which has been seized deserves to be released. Let the same be released within a period of two weeks from today to the Petitioner. Petition allowed.

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• 2025 (1) TMI 1466
  Seeking grant of regular bail - smuggling of Heroin - seizure and sampling done by the prosecution suffers from substantial irregularities and non-adherence to Standing Order or not - substantial delay of two months in filing the application under Section 52A of the NDPS Act for the drawing of samples before the Magistrate - right to speedy trial - HELD THAT:- While Section 37 of the NDPS Act is undoubtedly applicable, the Applicant s fundamental right to a speedy and expeditious trial must also be given due consideration. This right serves as a safeguard against undue and oppressive incarceration, ensuring that the judicial process does not inflict punishment prior to a finding of guilt. In the present case, the Applicant has been in judicial custody for over 3 years and 8 months, while the trial before the Special Judge (NDPS) remains at the stage of prosecution evidence. Acknowledging these delays, the Court called for an updated Nominal Roll of the Applicant and a Status Report from the Trial Court detailing the reasons for the protracted trial proceedings. The updated Nominal Roll, dated 07th January, 2025, confirms that the Applicant has been in custody for 3 years, 8 months, and 18 days. This prolonged detention raises significant concerns about the balance between the rigours of Section 37 and the constitutional guarantee of a fair and timely trial. The report of the Trial Court indicates that the delay in the trial proceedings cannot be attributed to any fault of the Applicant. Instead, the matter has been adjourned on multiple occasions due to the non-appearance of prosecution witnesses. The Special Judge has observed in the report that the Special Public Prosecutor for Customs, appointed in this case, is available only on Wednesdays, Fridays, and Saturdays, and hearing dates are being scheduled to accommodate this limitation. Thus, it cannot be said that the delay in Trial in the present case can, in any way, be attributed to the Applicant who has been in incarceration for a period of almost 4 years. The next date of hearing is scheduled for 19th February, 2025, making it evident that the trial s conclusion is not foreseeable in the near future. The Court must strike a balance between the fundamental right to a speedy trial, an integral aspect of the right to life and liberty under Article 21 of the Constitution of India, and the stringent requirements of Section 37 of the NDPS Act. While the rigours of Section 37 must be meticulously applied, they cannot override the constitutional mandate for timely justice. The right to life and personal liberty cannot be undermined by unwarranted delays in the judicial process, particularly when such delays are neither attributable to the accused nor adequately justified by the prosecution with compelling reasons. In a recent decision of KULWINDER VERSUS STATE OF PUNJAB [ 2025 (1) TMI 1314 - PUNJAB AND HARYANA HIGH COURT] , the High Court of Punjab and Haryana held that the rigours of Section 37 of the NDPS Act must be meticulously scrutinised against the backdrop of the accused s fundamental right to a speedy trial. In the present case, even though the prosecution has argued that if the Applicant is released on bail, she may avoid the course of justice, however, this Court is empowered to put the conditions of bail in such a manner, so as to ensure her presence during Trial. Conclusion - The Court granted bail to the applicant, considering the prolonged detention and the constitutional guarantee of a fair and timely trial. The Applicant is directed to be released on bail subject to fulfilment of conditions imposed - bail application allowed.

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• 2025 (1) TMI 1465
  Smuggling of Gold - Absolute Confiscation - whether the absolute confiscation without objection for redemption of the golds carried in person are in violation of Baggage Rules, 1998? - HELD THAT:- The import of gold is not prohibited. Rather, it is restricted and regulated. Therefore, any person carrying gold ornament ought to have paid appropriate customs duty if whether such gold jewellery/ornament was worn in person or kept in the baggage - Absolute confiscation of the imported quantity of gold in the hands of each of these petitioners cannot be ordered to be absolutely confiscated under Section 125 of the Customs Act, 1962. The option ought to have been given to the owner of such gold to redeem in lieu of confiscation under Section 125 of the Customs Act, 1962. Therefore, the Order rejecting the request for redemption or reexport cannot be sustained - Considering the fact that the goods are not absolutely confiscable, the Court is of the view that the Impugned Order dated 25.10.2021 passed by the 4th respondent, holding the goods are not redeemable and is not liable to be confiscated is to be interfered with. Conclusion - The goods not declared under customs regulations are liable for confiscation, but absolute confiscation is not mandatory if the goods are not inherently prohibited. The impugned order affirming the absolute confiscation of the gold set aside. The case remitted to the Joint Commissioner of Customs to impose a redemption fine under Section 125 of the Customs Act. Petition allowed.

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• 2025 (1) TMI 1464
  Absolute confiscation of the gold recovered from Shri Firoze Sekh - imposition of penalty on the appellants - smuggling of foreign origin gold bars - Admissible evidences - HELD THAT:- In this case, two gold bars totally weighing 1999.000 grams were recovered from the possession of one Shri Firoze Sekh on 26.06.2018 when he was travelling by a Sealdah bound Train No. 12378. In his statement, Shri Firoze Sekh has stated that the gold had been handed over to him by Shri Durlav Paul (appellant no. 1 herein) for delivering the same to M/s.H.K. Jewellers, Kolkata (appellant no. 2) - when the appellants came to know about the seizure of the gold, they came forward and produced all the documents regarding ownership of the said gold. The invoices are G.S.T. paid invoices. The appellants have also produced the certificate showing the payment of appropriate Tax / G.S.T. on the said invoices. Further, Form GSTR-2A is also placed on record. Further, Form GSTR 1 submitted by the appellants also shows that the said transactions had been recorded by the appellants and reported to the G.S.T. Department. As the claim made by the appellants with regard to ownership of the gold in question is supported by documentary evidence, in these circumstances, oral evidences will not prevail over the documentary evidence available on record. Therefore, the statements recorded during the course of investigation are not admissible evidence. Moreover, it is observed that the purity of the gold was found to be only 99.6% by weight of gold (as recorded at paragraph 37.1, page 38 of the Order-in-Original dated 08.07.2020). It is also not a case of seizure of gold from Port, Airport or International Border and the gold does not bear any marking of foreign origin. The gold in question cannot be confiscated. Consequently, the confiscation of the gold in question is set aside - no penalty is imposable on the appellants. Conclusion - i) As the claim made by the appellants with regard to ownership of the gold in question is supported by documentary evidence, in these circumstances, oral evidences will not prevail over the documentary evidence available on record. Therefore, the statements recorded during the course of investigation are not admissible evidence. ii) It is also not a case of seizure of gold from Port, Airport or International Border and the gold does not bear any marking of foreign origin. iii) The gold in question cannot be confiscated. iv) No penalty is imposable on the appellants. Appeal allowed.

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• 2025 (1) TMI 1463
  Classification of imported goods - Data Processing Server with all standard parts and accessories (second hand) - exemption under N/N. 24/2005-Customs, dated 01.03.2005, under entry No. 8 - misdeclaration of goods - confiscation of goods - import of restricted goods in violation of DGFT Notification No.05/2015-2020 dated 07.05.2019 read with Electronics And Information Technology Goods (Requirement for Compulsory Registration) order 2012 - penalty u/s 112(a) (i) of the Customs Act, 1962 for violation of Section 111(d), 111(l) and 111(m) of the Act - penalty u/s 114AA of the Customs Act, 1962 for violation of Section 111(d), 111(l) and 111(m) of the Act. Classification of imported servers - HELD THAT:- Servers are entirely different from Automatic Data Processing Machines . The function of a server is to receive and share data to other computer on its network. A server is an apparatus for the transmission or reception of information, image or data. The server may work in conjunction with the automatic data processing machine but a server itself never processes any data automatically like desktop, personal computer or laptop. The servers imported by the appellant are meant for specific application in a network, are entirely different from the Automatic Data Processing Machine including personal computers and laptop computers, which are actually stand-alone equipment. It is observed that servers imported by the appellant don t have the keyboard and monitors. Thus, the restrictions in the Exim Policy as per Para 2.31 of the Foreign Trade Policy (FTP) as notified by the DGFT Notification No.05/2015-20, dated 07.05.2019 are applicable only to computers including personal computer and laptop computer and not to servers imported by the appellant. Servers are classifiable under the CTH 8417. This view is supported by the decision in the case of COMMR. OF CUS., BANGALORE VERSUS MICROSOFT CORPN. INDIA PVT. LTD. [ 2007 (11) TMI 203 - CESTAT, BANGALORE] , wherein at paragraph 3, it has been held that normally the servers will be the larger machines having very high memory. The processing speed also will be very high and there are various types of servers for various applications. There is no reason to exclude them from the scope of Capital Goods . So, they are not stand-alone computer. In any case, the Commissioner (Appeals) has upheld the confiscation on some other ground and he has also imposed redemption fine and penalty which is the final penalty imposed or only reduced. The appellant has rightly classified the goods imported by them under the Customs Tariff Item No.84714190 and rightly claimed exemption under Notification No.24/2005-Customs, dated 01.03.2005, under entry No.8. Mis-declaration of goods - HELD THAT:- The goods not declared are items such as Output Power Supply, Switching Power Supply, AC-DC converter Delta Energy system and Switches. These items are parts and accessories of the servers imported by the appellant without which the servers cannot function. The value of the same has already been included in the value of the servers and no separate value has been paid for the parts and accessories. Thus, the findings of the lower authorities not agreed upon that the appellant has mis-declared these items. Thus, the allegation of mis declaration in the impugned order is not sustained. Accordingly, the confiscation of the goods on account of mis-declaration is not warranted. Undervaluation of goods - HELD THAT:- The value addition is mainly on account of inclusion of value of undeclared goods such as Output Power Supply, Switching Power Supply, AC-DC converter Delta Energy system. However, these undeclared items are parts and accessories of Server and their value has already been included in the value of servers and hence no additional value need to be added for the undeclared items. Accordingly, the assessable value declared by the appellant is correct as there is no under valuation established. Hence, the value enhancement by the lower authorities rejected. Penalty imposed under Section 114AA of the Customs Act, 1962 - HELD THAT:- The appellant has filed the Bill of Entry with correct information and the allegation of mis declaration is not sustained. The classification of the goods as servers under the CTH 8471 4190 is found to be in order - classification dispute cannot be considered as violation Section 114AA of the Act and accordingly, penalty imposed under section 114AA of the Act on the appellant is not sustainable. Penalty imposed under Section 112(a) of the Customs Act - HELD THAT:- Penalty under Section 112(a) relates to violations in regard to situation where goods are liable for confiscation under Section 111. In the instant case, the imported goods are not restricted goods . These goods are duty free goods and can be imported freely. In the instant case, confiscation of the goods is made on erroneous premises of law, by mis-interpreting the DGFT Notification No.05/2015-20, dated 07.05.2019, as the authority below has mixed up the server with Desktops Computer and Personal Computers / Laptop and considered the same as Automatic Data Processing Machine and erroneously confiscated the server. Thus, the confiscation in the impugned order is not sustainable. For the same reason, the penalty imposed on the appellant under Section 112(a) of the Act is not sustainable. Conclusion - i) The confiscation of the imported server falling under CTH 84714190 is not warranted, as the goods imported by the appellant are not restricted goods and there is no violation of DGFT Notification No.05/2015-2020 dated 07.05.2019 read with the Electronics And Information Technology Goods (Requirement for Compulsory Registration) Order, 2012. ii) Imposition of penalty of Rs.20,00,000/- under Section 112(a)(i) of the Customs Act, 1962 is set aside. iii) Imposition of penalty of Rs.30,00,000/- under Section 114AA of the Customs Act, 1962 is set aside. The impugned order set aside - appeal allowed.

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• 2025 (1) TMI 1462
  Revocation of their customs broker licence - forfeiture of entire amount of security deposit - Levy of penalty - importation of black pepper and cigarettes - breach of regulation 10(d) and 10(n) of Customs Brokers Licensing Regulations, 2018. Breach of regulation 10(d) of Customs Brokers Licensing Regulations, 2018 - HELD THAT:- Regulation 10(d) of Customs Brokers Licensing Regulations, 2018 prescribes that a customs broker is required to advice his client to comply with the provisions of statute and, in the event of non-compliance, to bring the matter to the notice of the designated official. This charge has been established on the finding that the appellant had never met the proprietor of the importing entity and had not contacted the holder of the Importer-Exporter Code (IEC) thus precluding rendering of advice - The licensing regulations are also bereft of any definition of client and, it would appear that there is no bar on the importer/exporter approaching the customs broker through an employee/agent. The essence of this obligation is restricted to the advice given specifically in relation to a particular consignment and is not broad enough to place the onus of educating the importer/exporter on the letter and spirit of customs statute on the customs broker. The factual circumstances in which this charge came to be laid at the door of the customs broker is not evident in the records. Imputations are inadequate, the findings based on facts which have nothing to do with the framework of the obligations and externalities have been grafted to conclude that the regulation has been breached. Breach of regulation 10(n) of Customs Brokers Licensing Regulations, 2018 - HELD THAT:- It is necessary for customs broker, to be particularly careful about credibility of clients before undertaking to handle customs procedures. The mandate of the obligation is for ascertaining the existence of the client, the operation of the premises at which the client is reported to be functioning and the documents that are required for imports and exports. It is apparent that the customs broker had not carried out the mandate of the obligation inasmuch as the importer was reported as not existing at the stated address and the customs broker has been unable to produce evidence not only of such existence but also of having verified the antecedent before securing the authorization for handling the consignment. In these circumstances, breach of regulation 10(n) of Customs Brokers Licensing Regulations, 2018 cannot but to be held as proved. As it is only this breach which may be held as proved, the imposition of all the detriments offered by Customs Brokers Licensing Regulations, 2018 appears to be disproportionate. Penalty - HELD THAT:- Considering the specific breach and the gravity of the consequence of such breach, ends of justice would be met by setting aside the revocation under regulation 14 of Customs Brokers Licensing Regulations, 2018 and imposition of penalty under regulation 18 of Customs Brokers Licensing Regulations, 2018. Conclusion - i) The breach of Regulation 10(n) was proven due to the customs broker s failure to verify client details adequately. ii) The penalties of license revocation and monetary penalty were disproportionate to the breach established. iii) The forfeiture of the security deposit was upheld, with provisions for license restoration contingent on a new security deposit. Appeal disposed off.

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• 2025 (1) TMI 1461
  Waiver of penalty imposed upon the appellant u/s 114A and 114AA of the Customs Act, 1962 - appropriation of deposit made by the appellant towards the duty demand that has been confirmed - HELD THAT:- The Commissioner has expressed concerns in the impugned order as to why Raj Kumar Pal had appeared before the authorities after he had substantially defrauded the appellant and as to why the appellant lodged a police complaint instead of a First Information Report and as to why the appellant had not instituted a civil suit against Raj Kumar Pal for recovery of the amount. The Commissioner, for these reasons, concluded that the appellant had deliberately and in a very systematic and planned manner arranged to submit doctored and forged documents to evade payment of customs duties and Raj Kumar Pal was a dummy planted by the appellant. It is for this reason that the Commissioner imposed penalties upon the appellant under sections 114A and 114AA of the Customs Act. Such a finding has been recorded by the Commissioner on the basis of conjectures and surmises. There is nothing on record to indicate that the appellant and Raj Kumar Pal had colluded. The fact that the appellant had paid the correct amount of duty to Raj Kumar Pal through banking channels does not support the finding recorded by the Commissioner. Raj Kumar Pal clearly stated in his statement before the customs authorities that he had received the correct amount from the appellant but for his own gains he paid a reduced amount. The appellant has deposited the differential amount of duty with interest. Section 114A of the Customs Act provides that where the duty has been short paid for reason of collusion or any willful statement or suppression of facts, the person who is liable to pay duty shall be liable to pay the penalty equal to the duty - In the absence of any collusion or any willful mis-statement or suppression of facts by the appellant, penalty under section 114A could not have been imposed upon the appellant. Penalty under section 114AA of the Customs Act is imposed if a person knowingly makes, signs or uses or causes to be made, signed or used, any declaration is false or incorrect in any material particular, in the transaction of any business for the purposes of the Customs Act, shall be liable to a penalty not exceeding five times the value of goods - The appellant had not submitted any Bills of Entry. They were submitted by Raj Kumar Pal. The appellant also had no knowledge that any incorrect statement was made by Raj Kumar Pal. Penalty could not have been imposed upon the appellant under section 114AA of the Customs Act. It is not in dispute that the appellant had deposited the entire amount of duty with interest. This fact has also been noted by the Commissioner, but this amount has not been appropriated. This amount is, therefore, required to be appropriated against the demand of duty that has been confirmed. Conclusion - i) Penalties under Sections 114A and 114AA require evidence of collusion or willful mis-statement, which was absent in this case. The penalties imposed under Sections 114A and 114AA were set aside. ii) An appellant s liability for duty does not automatically imply liability for penalties without evidence of intent or knowledge of fraudulent activities. The amount deposited by the appellant should be appropriated towards the duty demand. Appeal allowed.

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• 2025 (1) TMI 1460
  Penalties u/s 114(i) of the Customs Act, 1962 - alleged involvement in the mis-declaration and attempted export of prohibited goods (beef) as Frozen Boneless Buffalo Meat - HELD THAT:- The appellant no. 1 was mainly engaged for the purpose of loading and unloading of export cargo of M/s. Global Foods International and he got a remuneration of Rs.22,000/- per month. We find that although the business under the name of M/s. A.M. Enterprise was registered in the name of appellant no. 1, the entire activities of the said Firm has been controlled and managed by Mr. Ankit Kapoor of M/s. Global Foods International. From the documents available on record, it is observed that Mr. Ankit Kapoor used to make contact and finalize the dealings with all the persons concerned who used to supply cattle meat to the said firm; those meat products purchased for export from NS Dock, Kolkata, were exported in the name of M/s. A.M. Enterprise and not in the name of M/s. Global Foods International. The goods were being shown as sold by M/s. A.M. Enterprise in favour of M/s. Global Foods International and accordingly, online fund transactions were made by M/s. Global Foods International in favour of M/s. A.M. Enterprise and the money was being paid to all such suppliers in the name of M/s. A.M. Enterprise. The money transactions done through M/s. A.M. Enterprises has been mainly used by Mr. Ankit Kapoor for the purpose of renovation of the cold storage. Penalty under Section 114 - HELD THAT:- Penalty under Section 114 is imposable only when the person abets an offence which leads to confiscation of the goods. It must be established that he has abetted the offence knowingly. In this case, the appellant no. 1 had to carry out the packing, loading and unloading of the goods, as directed by his employer. Thus, the appellant no. 1 has not contravened any of the provisions under the Customs Act, 1962 warranting imposition of penalty under Section 114(i) of the Customs Act, 1962. Thus, the penalty under Section 114(i) is not imposable on the appellant no. 1 in this case. Accordingly, the penalty imposed on appellant no.1 in the impugned order is set aside. Penalty imposed on appellant no. 2 - HELD THAT:- The rent agreement specifically mentioned that the cold storage is meant only for the purpose of storage of the goods, i.e., meat as agreed upon in the agreement. Thus, appellant no. 2 is in no way concerned with the alleged export of beef and hence the penalty imposed on him for abetting the offence under Section 114(i) of the Customs Act, 1962 is not sustainable and accordingly, the penalty imposed on him set aside. Appeal allowed.

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• 2025 (1) TMI 1459
  Classification of imported goods - Epoxidised Soya Bean Oil (ESBO) - to be classified under CTH 3812 3990 or under CTH 1518 0039? - benefit of availment of BCD @7.5%vide Sl. No. 262 of N/N. 50/2017 dated 30.6.2017 - SCN issued beyond two years of date of clearance of BoE for home consumption - Abrupt change in classification - mis-declaration of goods - Confiscation and penalties. Classification of imported Epoxidised Soya Bean Oil - HELD THAT:- ESBO is a chemically modified vegetable oil. As per the product declaration given by the supplier, the composition of the product is 99.8% epoxidized Soyabean oil and 0.2% water. It is not disputed that the production process undertaken to convert the raw material soyabean oil to epoxidised Soya Bean oil include epoxidation, vacuum distillation, centrifugation and filtration and that it is a secondary plasticiser. As stated in the OIO the product is a bio-based product from the epoxidation of soya bean oil with hydrogen peroxide and either acetic or formic acid obtained by converting the double bonds into epoxy group which is non-toxic and of higher chemically reactivity. As per the Explanatory Notes heading 1518 covers epoxidized oils obtained by treating, for example soya bean oil with per acetic acid pre-formed or formed in situ by reaction between hydrogen peroxide and acetic acid in the presence of a catalyst. They are used as plasticisers or stabilisers for e.g. vinyl resins - note 6(c) fits the impugned goods squarely and the impugned goods hence are covered under CTH 1518. While plasticisers, are also covered by heading 3812 it pertains to the category of compound plasticisers. The HSN notes makes it clear that ESBO fall under CTH 1518 which is the more specific heading hence as per Rule 3 (a) of RIT the goods have been classified correctly. The classification of goods as per the impugned order is hence upheld. Proper date for calculating time bar of SCN / demand - HELD THAT:- As regards the date of supplying all RUDs, the appellant has stated that although the SCN mentioned that the relied upon documents were enclosed as Annexure A along with a detailed worksheet as Annexure B, these documents were not enclosed as stated. Repeated requests were made for service of the complete show cause notice vide their letters dated 09.08.2022, 07.09.2022, 03.11.2022 and 24.11.2022. It was only on 04.01.2023 that the missing annexures were mailed to the them by the department. The said documents were quintessential to submit a reply showing cause to the claims made in the notice - the principles of natural justice and procedural fairness require that the time limit for the purpose of calculating time bar, be reckoned from the date when the documents and worksheet was made available to the appellant, enabling him to commence making a proper defence of his case, which was on 04.01.2023. Abrupt change in classification as held in the impugned order without any change in facts or law is improper - HELD THAT:- A healthy balance needs to be maintained between the need for uniformity in assessment of similar goods belonging to different assessee, correcting any deviation when necessary and the need to maintain certainty and predictability of taxes over a long period of time against frivolous allegations as per the doctrine of consistency or the precedential value of the earlier pronouncement. No blanket principle is possible and the judgements cited by the appellant are peculiar to the facts of the individual cases - In this case the department had investigated the matter by a specialized investigative agency (DRI). Such an enquiry is generally able to unearth facts and obtain statements of those involved which gives a more complete picture of the goods involved and the declaratory practices adopted, which is not possible to be obtained by the normal assessing officer. In WARNER HINDUSTAN LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, HYDERABAD [ 1999 (8) TMI 75 - SUPREME COURT] , the Hon ble Supreme Court opinioned that the correct course for making a change of an approved classification was to issue a fresh show cause notice to the appellant on the basis of the fresh details gathered. This would have given the appellant the opportunity to place on record such material as was available to it to establish the contrary. This requirement has been met in the present case. Hence there are no infirmity and their plea is rejected. Classification based on appellants belief, cannot be said to be a misdeclaration - HELD THAT:- The non-adoption of the classification as stated in the COO certificate was evident to the departmental officers in the two cases examined by them. The appellant had provided the product literature, letter describing the captive use of the product and the material safety data sheet when called for by the department officer. This was followed by the department accepting the classification in one case. Further the impugned goods which are plasticisers, are also covered by heading 3812, although it may not have been the more specific heading and had to yield to heading 1518. The importer cannot be held responsible for taking an alternate view when he has submitted all the necessary documents that have helped the department to now come to a different view. The plea of the appellant hence succeeds on this issue. The department has failed to make out a case of suppression or misdeclaration etc. Confiscation and penalties are liable to be set aside since there is no suppression of facts etc. - HELD THAT:- No case of suppression, mis-decleration etc., has been made out. This being so the demand has to be limited to the normal period and the question of confiscation and penalties does not arise. However it is seen that interest is necessarily linked to the duty payable, such liability arises automatically by operation of law and is payable on any demand due. As per the Hon ble Supreme Court s judgment in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [ 2009 (7) TMI 6 - SUPREME COURT] interest is leviable on delayed or deferred payment of duty for whatever reasons. Conclusion - i) The classification of ESBO under CTH 1518 upheld. ii) SCN was not time-barred, considering the date of providing all RUDs as the starting point for the time limit. iii) Confiscation and penalties were set aside, but interest on the duty was upheld. Appeal allowed in part.

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• 2025 (1) TMI 1458
  Grant of interest - relevant date for calculation of interest - whether the appellant should be granted interest from 14.04.2003, which date is one month after the issuance of the let export order on 13.03.2003, or from one month after 31.05.2012 on which date the proceedings initiated against the appellant by issuance of show cause notice were dropped for the second time? - HELD THAT:- Section 75 of the Customs Act deals with drawback on imported materials used in the manufacture of goods which are exported. Sub-section (1) provides that drawback should be allowed of the duties of customs chargeable under the Customs Act on any imported material of a class or description used in the manufacture or processing of such goods or carrying out any operation of such goods. It also provides that the Central Government may make rules for the purpose of carrying out the provisions of sub-section (1). In the present case, the appellant had filed seven shipping bills on 24.02.2003 and the let export order was given on 13.03.2003. Under rule 13 of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995 that have been framed under section 75(2) of the Customs Act, the submission of the shipping bills is deemed to be a claim for drawback filed on the date on which the proper officer of customs makes an order permitting clearance and loading of goods - The amount of drawback should have been sanctioned within a period of one month from the date the let export order was issued on 13.03.2003 but it was actually sanctioned on 24.04.2022. Interest has been paid to the appellant by the Commissioner (Appeals) from a date after a period of one month from 31.05.2012 when the show cause notice was dropped by the adjudicating authority for the second time pursuant to the order passed by the Supreme Court and not from 13.03.2003 when the let export order was issued. It is on the instance of the department that proceedings were initiated and ultimately the claim of the appellant was found to be correct and the drawback was sanctioned. In such circumstances the issue that would require consideration is whether 31.05.2012 should be the date relevant for the purposes of determining interest payable to the appellant. This date cannot be the relevant date. The appellant cannot be blamed or penalized for the prolonged litigation undertaken by the department. Rule 13 of the Drawback Rules, which has been referred to by the Commissioner (Appeals) in the impugned order, clearly provides that the shipping bills shall be treated as a claim for drawback filed on a date on which the proper officer of customs makes an order permitting clearance. In terms of section 75A of the Customs Act, the appellant is entitled to get interest from a date after the expiry of one month from 13.03.2003 upto the date of payment of the drawback amount. The appellant had, accordingly, claimed interest from 14.04.2003 but the Commissioner (Appeals) allowed interest only from 01.07.2012, which date is after the expiry of a period of one month from 31.05.2012. 26. The Commissioner (Appeals) has relied upon the decision of a learned member of this Tribunal in Web Knit Exports [ 2014 (1) TMI 1118 - CESTAT CHENNAI ] to hold that the relevant date would be 31.05.2012 because the value of the export goods stood finalized when the adjudicating authority passed the order. The said decision of a learned Member the Tribunal would not be applicable to the facts of the present case. In the present case, it is not the case of the department that the documents, as contemplated under rule 13 of the Drawback Rules, had not been filed by the appellant. On the other hand, the show cause notice that was issued to the appellant raising a doubt about the value of the export goods was dropped by order dated 31.01.2005. Thus, the value of the export goods declared by the appellant was found to be correct and the Deputy Commissioner after remand of the matter by the Supreme Court also dropped the show cause notice. Conclusion - Where drawback should have been given to the appellant within a period of one month from 13.03.2003 when the let export order was issued and since it was not given, the appellant would be entitled to interest from a period after month at the rate provided for in section 27A of the Customs Act upto the date of payment of drawback. Appeal allowed.

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• 2025 (1) TMI 1457
  Invocation of extended period of limitation under section 28(4) of the Customs Act, 1962 - classiication of imported goods - benefit of reduced Basic Customs Duty under N/N. 24/20058 dated 01.03.2005 and N/N. 12/2012 dated 17.03.2012. Whether the Commissioner (Appeals) is justified in holding that the extended period of limitation could not have been invoked in the facts and circumstance of the case? - HELD THAT:- On record is the examination report dated 03.01.2019 which shows that the medical equipment was as per the invoice and the Bills of Entry. Once, the respondent had declared the goods in the Bills of Entry under a particular Tariff Item, nothing prevented the officers from verifying the same and in the present case, as noted above, the verification was also done after which the goods were cleared. It is subsequently that the department believed that the goods deserved classification under a different Tariff Item declared by the respondent. The invocation of the extended period of limitation was, therefore, for goods reasons set-aside by the Commissioner (Appeals) as the respondent had not suppressed facts, and in any case it cannot be said that the facts were suppressed with an intent to avoid payment of duty. Whether the Commissioner (Appeals) was justified in remanding the matter to the adjudicating authority for a fresh determination of classification of the imported goods for the normal period? - HELD THAT:- In view of the findings recorded by the Commissioner (Appeals) that the notices could not be served because of change of address, the respondent was prevented from filing a reply to the show cause notice or appearing before the Commissioner (Appeals). The Commissioner (Appeals) has granted an opportunity to the respondent to file a reply to the show cause notice and also appear before final hearing - It is also not possible to accept the contention advanced by the learned counsel for the respondent that the Commissioner (Appeals) should have himself determined the correct classification of the imported goods instead of remanding the matter. The matter can only be examined after the respondent files a reply to the show cause notice and this is precisely what has been done by the Commissioner (Appeals). There is, therefore, no infirmity in this part of the order of the Commissioner (Appeals). The appeal filed by the department deserves to be dismissed and is dismissed.

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• 2025 (1) TMI 1456
  Classification of imported goods - Multimedia Speakers/Computer Speakers - to be classified under Customs Tariff Heading (CTH) 8518 or under CTH 8519/8527? - HELD THAT:- The subject issue is no more res integra. There are a catena of decisions holding the classification of the impugned goods under heading under CTH 8518. In the case of LOGIC INDIA TRADING CO VERSUS COMMISSIONER OF CUSTOMS [ 2016 (3) TMI 5 - CESTAT BANGALORE] , while dealing with similar set of facts, the courts have held the classification of the said goods under CTH 8518. The aforesaid decision has been subsequently followed in a series of cases of similar nature. Thus, in the case of Global Enterprises vs Commissioner of Central Excise, Delhi-II [ 2017 (8) TMI 1267 - CESTAT NEW DELHI ], identical question of law was considered. The Tribunal held the classification of the said goods under CTH 8518. Conclusion - The imported multimedia speakers were correctly classifiable under CTH 8518. Appeal allowed.

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• Corporate Laws

• 2025 (1) TMI 1455
  Refund of excess amount of Additional Fees charged from the Petitioner Companies on account of delay in filing Financial Statements along with interest - HELD THAT:- It emerges that the AGM of a Company has to be held by the 30th September of the given year which can be extended maximum by three months by the ROC. It is a Statutory Provision and the date of holding of AGM cannot be modified or changed by any Office Order. In the present case, the Petitioners in consonance with the provisions of the Companies Act, held their AGM on 29.10.2019 i.e. within the statutory period. Having so done and the financial statements having been approved in the AGM, they were bound to submit the said statements to the ROC within thirty days of the AGM as has been provided in Section 137 of the Companies Act. There is no circumstance in which Section 137 can be modified or the period of submitting the Financial Statements extended beyond the 30 days from the date of holding the AGM. From this Section 403 also, it is evident that whatever are the timeframes provided under the Act for filing of the documents, statement etc., if not done within the given time, then the same shall be accepted on payment of the penalty as described therein i.e. not less than Rs.100/- per day. This Section also does not give any discretion to extend the time of taking the Statements u/s 92 or 137 of the Companies Act or of reducing/waiving the fines - From the bare perusal of Circular dated 29.10.2019, it is abundantly clear that it provided a window for filing the Financial Statements by the Companies latest by 30.11.2019. It was only to deal with the situation where any Company had failed to submit their Financial Statements within the prescribed time period, they permitted to be filed within the relaxation period extended vide Circular dated 29.10.2017, i.e. by 30.11.2019. This situation would have arisen for Companies which may have sought extension of time from ROC to conduct their AGM beyond 30th of September. This Circular cannot be interpreted to read that the date of holding the AGM as provided under S. 97 or of consequent submission of Financial Statements within 30 days thereafter as provided under S. 137 of Companies Act, was modified or extended. To interpret the Circular as extending the time of filing the Financial Statements beyond 30 days of AGM, would tantamount to amendment of the Provisions of the Act, which no Administrative Circular can do - the Petitioners are not correct in their Claim that the Financial Statements could have been filed by 30.11.2019. Conclusion - The Petitioners were liable to submit their Financial Statements by 29.10.2019 which they have failed to do in accordance with Section 137 of the Companies Act. Therefore, the penalty has been rightly imposed by the Respondents w.e.f. 30.10.2019. Petition dismissed.

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• Securities / SEBI

• 2025 (1) TMI 1454
  SEBI orders against non-executive Chairman and Managing Director Chief Executive Officer - Appellant as the Non-Executive Chairman failed in his duties by not acceding to the requests of Independent Directors for legal advice and not providing necessary documentation regarding the appointment of Mr. Ratnesh - Non acceding to request for legal advice in relation to appointment of Mr. Ratnesh etc. - HELD THAT:- Appellant was appointed as the Non-Executive Chairman of PFC on November 8, 2021. The allegation is, not acceding to the request made by the independent directors for obtaining external legal advice and not providing information about appointment and joining of Mr. Ratnesh, which was the most contentious issue leading to differences between the Management and the independent directors. The first email from the independent directors to the Noticee No. 1 seeking independent legal advice from a lawyer of their choice is dated December 7, 2021. The appellant had informed the Independent Directors that the management was in the process of submitting a comprehensive report and therefore a separate legal consultation was pre-mature. On December 15, 2021 the independent directors conveyed to Noticee No. 1 that they were going ahead with the appointment of an Advocate and did so. The expenses incurred in that behalf were also informed to Noticee No. 1 on April 5, 2022. With regard to not calling meeting of NRC, it was urged that the Appellant was not a member of NRC and had no role to play. The RoC had addressed this issue and did not hold the Appellant responsible. It was also urged that the Management attempted to reconstitute the NRC through a resolution dated December 31, 2021, however the independent directors did not approve the same. It is relevant to record that firstly the independent directors had made their request to the Noticee No. 1 and not to the Appellant. Secondly, the independent directors went ahead and decided to appoint an Advocate themselves and obtain legal advice. The gap between their initial request and their decision to appoint an Advocate is about 8 days which cannot be considered as undue delay. Thirdly, the appellant had instructed the HR department of PTC to give the information sought by the independent directors. Fourthly, Ms. Renu Narang was withdrawn by NTPC. Fifthly, RoC had addressed the issue with regard to conducting meeting of NRC and not held the appellant responsible. In view of the undisputed facts recorded hereinabove, we find that the above three charges in Issue No.1 made against the Appellant are not substantiated. Providing no information or limited / incomplete information to the Board - Appellant submitted that the WTM has noted in the impugned order that Mr. Ratnesh had rejoined NTPC on December 6, 2021. Therefore, he could not have been invited for the Board meeting scheduled on January 22, 2022. He is right in his contention. Therefore, the allegation of not inviting Mr. Ratnesh and the meeting becoming invalid is untenable It is the duty of the Company Secretary to provide guidance with regard to proper conduct of meetings. Independent Directors while raising certain issues in their emails sent during 2021 never sought for those issues to be discussed in the board meetings. Thus, there is no doubt that there was lack of clear communication between the Independent Directors and the management, however, we may note that the Independent Directors themselves had graded the flow of information between the management and the board as excellent in the meeting held on October 5, 2021. No substance in the allegation contained in Issue No. 2. Reconstitution of Audit Committee prior to submission of FAR 2022 - As noted in the Impugned Order, Section 177 of the Companies Act, 2013 provides that the Audit Committee shall be constituted by the Board. The Board had constituted the Audit Committee. SEBI s direction was not to change the composition of the Board. Therefore, SEBI contention that SEBI s instructions also included not making any change in the audit committee also, is without any merit and liable to be rejected. Hence, we hold that the charge in Issue No.3 is also baseless. Functioning of the Audit Committee - It is true that the Chairman of the Audit Committee had flagged the issues in functioning of the Audit Committee with respect to Noticee No. 1. The Respondent s charge is not that the Appellant was responsible but that he was aware of the shortcomings pointed out and yet, did not take remedial steps. In our view, once the respondent holds that appellant is not responsible, nothing further survives for consideration. Hence charge in issue No.4 is also baseless. On a careful perusal of the allegations leveled against the appellant and the contentions urged on both sides, for reasons recorded hereinabove, we are of the view that all the allegations against the appellant in Issues Nos. 1 to 4 are baseless. Therefore, the directions contained in paragraph No: 253 of the impugned order qua the appellant are unsustainable and liable to be quashed. The appellant, has suffered the order for about 6 months for no fault. Appeal allowed. Orde passed by the WTM, SEBI qua the appellant is quashed.

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• Insolvency & Bankruptcy

• 2025 (1) TMI 1453
  Distribution of liquidation proceeds - waterfall mechanism - distribution to be made based on the security interest of secured creditors or in proportion to their admitted claims as per Section 53(1) of the Insolvency and Bankruptcy Code, 2016? - No Resolution Plan having been approved in the CIRP - HELD THAT:- This Tribunal in the matter of Oriental Bank of Commerce Vs. Anil Anchalia Anr. [ 2022 (5) TMI 1367 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI ] had occasion to consider distribution of sale proceeds in the Liquidation as per Section 53 of the Code, in which proceeding, an IA was filed by Oriental Bank of Commerce seeking a direction to distribute the entire sale proceeds to the Punjab National Bank who has exclusive charge over the property of the Corporate Debtor. The Application was rejected by the Adjudicating Authority against which the Appeal was filed. The Appeal was heard and by the Judgment of this Tribunal dated 26.05.2022, the Appeal was dismissed. Coming to the undertaking which is relied by the Appellant, the undertaking submitted before the Adjudicating Authority was to the effect that excess money received as per distribution shall be returned, when Order is passed by Tribunal or Hon ble Supreme Court the undertaking given by stakeholders was in terms of Regulation 43 of the Insolvency and Bankruptcy Board of India, Liquidation Process Regulations 2016, which undertaking has to be given while accepting any distribution of the sale proceeds in the Liquidation, which undertaking was for the benefit of the Secured Creditors, who is ultimately found to have larger share of sale proceeds in the Liquidation. Thus, undertaking given by the Parties in no manner can come in the way of Adjudicating Authority in issuing direction for re-distribution in accordance with law. Conclusion - The Adjudicating Authority has not committed any error in directing distribution of sale proceeds as per the admitted claim of the Financial Creditor pro-rata basis. Appeal dismissed.

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• 2025 (1) TMI 1452
  Appointment of the Resolution Professional (RP) in accordance with Section 97, sub-section (3) of the Insolvency and Bankruptcy Code, 2016 (IBC) - submission of the Appellant is that the Adjudicating Authority ought to have directed the IBBI to nominate the RP for the insolvency resolution process, which was not done and the Adjudicating Authority relied on a Circular issued by the IBBI - HELD THAT:- There is no dispute with regard to interpretation of Section 60, sub-section (2), which provides that where a CIRP or liquidation proceedings of a Corporate Debtor is pending before a NCLT, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, shall be filed before such NCLT. The question to be answered is as to whether when no CIRP or liquidation proceedings of a Corporate Debtor is pending before the NCLT, whether an Application for personal insolvency against a Personal Guarantor has to be filed before the NCLT. Sub-section (2) of Section 60 begins with the expression Without prejudice to sub-section (1) . Thus, the provision of sub-section (2) are without prejudice to provisions of sub-section (1) of Section 60. The expression without prejudice , came for consideration before the Hon ble Supreme Court in large number of cases. Reference made to judgment of the Hon ble Supreme Court in Shri Shiv Kripal Singh vs. Shri V.V. Giri [ 1970 (9) TMI 127 - SUPREME COURT ], where the Hon ble Supreme Court held that the expression without prejudice is to the generality of the provisions of sub-section (i) . It is well settled that when this expression is used anything contained in the provisions following this expression is not intended to cut down the generality of the meaning of provision. Two judgments have been relied by learned Counsel for the Respondent, which need to be noticed. The first judgment, which has been relied by learned Counsel for Respondent is State Bank of India vs. Mahendra Kumar Jajodia [ 2022 (1) TMI 1294 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI ], in which case, an Application under Section 95 was filed by the State Bank of India before NCLT, Kolkata Bench, seeking initiation of CIRP against Personal Guarantor, which Application came to be rejected by the Adjudicating Authority as premature relying on Section 60, sub-section (2) and holding that for an insolvency resolution process to be initiated against the guarantor there must be CIRP or liquidation process pending against the principal borrower/ Corporate Debtor. The above Notification dated 15.11.2019 came to be challenged before the Hon ble Supreme Court in Lalit Kumar Jain vs. Union of India Ors. [ 2021 (5) TMI 743 - SUPREME COURT ]. One of the grounds to challenge the notification was whether provisions of IBC against Personal Guarantors have been enforced, which is discriminatory and is violative of Article 14 of the Constitution of India. In reference to challenge to the aforesaid Notification, the Hon ble Supreme Court had occasion to consider the Scheme of IBC. The Hon ble Supreme Court noticed the 2018 amendment and the Report of the Insolvency Law Committee - The above judgment of the Hon ble Supreme Court also clearly emphasized that Personal Guarantor of the Corporate Debtor has been treated as a separate species of individuals. Hence, provision regarding Personal Guarantor of the Corporate Debtor have been enforced and when we read Section 60, sub-sections (1) and (2), the conclusion is inescapable that for insolvency resolution process of personal guarantor, the jurisdiction is with the NCLT. This Tribunal in its judgment in Mahendra Kumar Agarwal has noticed the judgment of the Delhi High Court in Axis Trustee Services Ltd. vs. Brij Bhushan Singal [ 2022 (11) TMI 297 - DELHI HIGH COURT ], where the Delhi High Court had occasion to consider Section 60 of the IBC. After considering Section 60 and 179 of the IBC, the Delhi High Court held that NCLT will be the Adjudicating Authority in respect of insolvency proceedings against Personal Guarantors. Conclusion - The NCLT is the appropriate adjudicating authority for insolvency proceedings against personal guarantors of corporate debtors, as per Section 60(1) of the IBC. Section 60(2) does not restrict the filing of applications against personal guarantors to situations where proceedings against the corporate debtor are pending. It is not required to accept the submissions of the Appellant that NCLT Delhi has no jurisdiction to entertain Section 95 Application filed by the Financial Creditor against the Personal Guarantor for initiating insolvency resolution process - there is no merit in the appeal - appeal dismissed.

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• FEMA

• 2025 (1) TMI 1451
  Validity of order of the Additional Director of Enforcement dropping charges under the Foreign Exchange Management Act, 1999 (FEMA) - case against the appellants under FEMA, 1999 was initiated based on a Show-Cause Notice issued by the DRI under the Customs Act, 1962 - in SCN, it was alleged that both the respondent companies had evaded Customs Duty by suppressing and mis-stating the actual transaction value of the export goods - HELD THAT:- We find force in the argument of the respondents that the allegations against the appellants in this case drew sustenance primarily from the allegations contained in the SCN issued by the DRI under the Customs Act, 1962 which now stands entirely nullified. Also find considerable substance in the contention of the appellant that the Fe content declared was based on the report of the government accredited lab (GAL). Indeed, it is acknowledged by the appellant Directorate itself in the appeal memo, that the price of the iron ore exported was raised by the appellants based on the certificate of Quality Services and Solutions, Goa, a government-accredited lab. Further, the detailed procedure for valuation has been explained in para- 61 of the order of the Ld. Commissioner of Customs. Once the prescribed procedure for independent certification by Govt. Lab and samples being drawn in the presence of Customs and being sent to Govt. lab for sample testing has been followed, do not see how the charge of manipulation of Fe content can be sustained unless the findings of the labs are challenged as perverse. In this regard, we have also taken note of the judgment of Reliance Cellulose Products Ltd. [ 1997 (7) TMI 652 - SUPREME COURT ] cited by the appellants wherein it was held that unless a government lab report is challenged and demonstrated as being palpably wrong, the same cannot be brushed aside. Even from the Income-tax point of view, the variation in price at which export was made by the appellants and the arm s length price assessed was found to be within the tolerance range. It is not considered necessary to go into other issues such as cherry picking of few transactions out of many (2 out of 7 in case of Appellant No.1 and 5 out of 42 in case of Respondent No.2); existence of instances where Fe content declared by the Indian companies was more than that declared by the foreign entity on further sale; day to day fluctuations in international iron ore prices, the difference arising out the transactions being expressed in wet or dry metric tons; difference in of method of drawal of samples, testing technology and methodology; the legal tenability of challenging the impugned order before this Appellate Tribunal when the customs s Case, which formed the sole basis of the case under FEMA stands quashed etc, are not gone into on the merits. We do not find any reason to interfere with the order of the learned adjudicating authority which has been impugned in the present appeals filed by the Directorate. Accordingly, all the three appeals are hereby dismissed.

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• PMLA

• 2025 (1) TMI 1450
  Seeking grant of regular bail - Money Laundering - reasons to believe - compliance with the statutory requirements under Section 19 of the PMLA - whether the applicant s arrest was carried out in adherence to the statutory requirements under Section 19 of the PMLA which mandates that the authorized officer must have reason to believe based on material evidence before arresting an individual accused of money laundering? - HELD THAT:- This Court is satisfied that the investigating authority followed due process and substantiated the reason to believe with concrete evidence rather than mere suspicion. Accordingly, the challenge to the legality of the arrest is without merit, and no relief is warranted to the applicant on this ground. The investigating authority did not rely solely on the statement of any one co-accused, rather it relied upon the statement of the applicant as well as other co-accused persons namely Neeraj Chauhan, Tushar Chauhan and Viphil Jain along with the documentary evidence including the Whatsapp chats etc. which shows the financial trail of the proceeds of crime in the instant matter. The same goes to show that the respondent ED has corroborating evidence on its record to justify the implication of the applicant herein - This Court is satisfied that the respondent ED has considered independent material, including financial records, digital evidence, and the applicant s own communications, which substantiate the applicant s involvement in the alleged offence. Whether the statements recorded under this provision are admissible as evidence and to what extent they can be relied upon to justify the applicant s arrest and continued detention? - HELD THAT:- The statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon ble Supreme Court in Rohit Tandon v. Directorate of Enforcement [ 2017 (11) TMI 779 - SUPREME COURT] , while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA - this Court is of the considered view that statements recorded under Section 50 of the PMLA are admissible in evidence and can be relied upon to establish culpability in money laundering cases. It is observed by this Court that the respondent had sufficient material in its possession, including financial records, digital evidence, and the applicant s communications, to establish a valid reason to believe that the applicant was guilty of the offence of money laundering. The procedural safeguards under the Act were duly followed, and the challenge to the legality of the arrest is without any merit - the contention that the applicant s arrest was solely based on the statement of co-accused persons under Section 50 of the PMLA is unfounded. Compliance with the twin conditions of bail under Section 45 of the PMLA or not - HELD HAT:- Having considered the legislative intent behind Section 45 of the PMLA and the judicial precedents interpreting its application, this Court shall now proceed to apply the established principles to the facts of the present case to assess whether the applicant has successfully satisfied this Court that he falls under the proviso to Section 45 of the PMLA and if not, whether he has discharged the burden of proving that he is not guilty of the alleged offence and is unlikely to commit any offence while on bail - The material on record demonstrates that the accused persons operated in a highly coordinated and systematic manner, with clear understanding and collaboration among them to facilitate the offence. The applicant has failed to discharge the burden placed upon him under Section 45(1)(ii) of the PMLA which requires him to that there are reasonable grounds for believing that he is not guilty of the offence. The material produced by the respondent, including financial transactions linked to the proceeds of crime and the applicant s own admissions, points to his direct and active involvement in the offence. Mere assertions that the applicant was a passive investor and was unaware of the illegality of the transactions do not satisfy the threshold required to overcome the presumption under the PMLA - Further, the second limb of Section 45(1)(ii) of the PMLA, which mandates that the applicant must satisfy the Court that he is not likely to commit any offence while on bail, is also not met. This Court finds that the twin conditions prescribed under Section 45 of the PMLA have not been satisfied. The evidence on record, the ongoing nature of the investigation, and the applicant s alleged role in the broader financial and selling of spurious medicines syndicate indicate that the rigors of Section 45 of the PMLA continue to apply. This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, it is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of the PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further investigation. Conclusion - i) The applicant s arrest complied with the statutory requirements under Section 19 of the PMLA, supported by concrete evidence rather than mere suspicion. ii) Statements recorded under Section 50 of the PMLA are admissible as evidence and can be relied upon to establish culpability in money laundering cases. iii) The applicant was not exempt from the twin conditions of bail under Section 45 of the PMLA, given the organized nature of the offence and the broader context of the criminal conspiracy. iv) The applicant failed to satisfy the twin conditions for bail under Section 45 of the PMLA, as well as the general considerations for bail under Section 439 of the CrPC. v) The Court emphasized the importance of maintaining the integrity of the ongoing investigation and preventing potential misuse of the judicial process. This Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed.

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• 2025 (1) TMI 1449
  Seeking grant of regular bail - Money Laundering - proceeds of crime - reasons to believe - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - reasons to believe - whether the applicant s arrest was carried out in adherence to the statutory requirements under Section 19 of the PMLA which mandates that the authorized officer must have reason to believe based on material evidence before arresting an individual accused of money laundering? HELD THAT:- After thorough examination of the grounds of arrest, it becomes evident that the investigating agency has outlined specific details highlighting the applicant s involvement in the alleged offence. It is observed that the applicant was duly informed about his firm s involvement and that the applicant was a partner is M/s Delhi Medicine Hub along with co-accused Akshay Kumar and both mutually took financial and business decisions regarding the procurement and sale of spurious anti-cancer medicines, which is clearly evident from the grounds of arrest - The investigating authority has also relied on statements recorded under Section 50 of the PMLA, which reveal that the applicant was directly involved in sourcing counterfeit medicines without invoices, demanding sealed and unsealed Keytruda injections, and receiving payments through both formal banking channels and illegal hawala transactions. The financial records cited hereinabove indicate substantial money transfers from M/s Delhi Medicine Hub to the accounts of known associates involved in the counterfeit medicine syndicate. These transactions, along with the applicant s control over the business operations, substantiate the claim that he was engaged in money laundering activities - This Court is satisfied that the investigating authority followed due process and substantiated the reason to believe with concrete evidence rather than mere suspicion. Accordingly, the challenge to the legality of the arrest is without merit, and no relief is warranted to the applicant on this ground. A careful reading of the provision reveals that the authorities empowered under Section 50 of the PMLA possess the authority to enforce discovery and inspection, compel the attendance of individuals, examine them on oath, require the production of records, receive evidence through affidavits, and issue commissions for the examination of witnesses and documents - The provision further clarifies that any person summoned under sub-section (2) is legally bound to comply, state the truth regarding matters under inquiry, and produce the requisite documents as directed by the authorities. It is pertinent to note that such proceedings are deemed to be judicial proceedings under Sections 193 and 228 of the IPC. Whether the statements recorded under this provision are admissible as evidence and to what extent they can be relied upon to justify the applicant s arrest and continued detention? - HELD THAT:- The Hon ble Supreme Court in Rohit Tandon v. Directorate of Enforcement, [ 2017 (11) TMI 779 - SUPREME COURT ] made the following observations regarding the admissibility of statements recorded under Section 50 of the PMLA - it is evident that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings. The Hon ble Supreme Court, while emphasizing the legal sanctity of such statements, observed that they constitute valid material upon which reliance can be placed to sustain allegations under the PMLA. Hon ble Supreme Court also reaffirmed the admissibility of Section 50 of the PMLA distinguishing them from statements recorded under the CrPC. The Court underscored that such statements, being recorded during an inquiry rather than an investigation, are not subject to the restrictions under Article 20(3) and Article 21 of the Constitution. Instead, they are deemed to be judicial proceedings under Section 50 (4) of the PMLA and, therefore, admissible as evidence in proceedings under the PMLA. The Hon ble Court further clarified that the provisions of Section 50 of the PMLA having an overriding effect by virtue of Sections 65 and 71 of the PMLA prevail over the procedural safeguards under the CrPC. - this Court is of the considered view that statements recorded under Section 50 of the PMLA are admissible in evidence and can be relied upon to establish culpability in money laundering cases. In the present case, the investigating agency has relied not only on the statement of co-accused under Section 50 of the PMLA but also on financial records, WhatsApp communications, and transactional data, which indicate the applicant s active role in the alleged money laundering activities - By virtue of Section 24 of the PMLA, the respondent is not required to conclusively establish the applicant s guilt at the pre-trial stage, rather, the applicant must demonstrate that the proceeds of crime attributed to him are not linked to money laundering. In the absence of any rebuttal by the applicant, the presumption under Section 24 of the PMLA stands in favor of the respondent, thereby, justifying his continued detention. In light of the principles enunciated by the Hon ble Supreme Court in Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB) ] and reiterated in Prem Prakash [ 2024 (8) TMI 1412 - SUPREME COURT ] this Court must determine whether the foundational facts necessary to invoke the presumption under Section 24 of the PMLA have been established by the respondent. The Hon ble Supreme Court has categorically held that the prosecution must satisfy three essential ingredients. First, the commission of a scheduled offence must be established. Second, the property in question must be shown to have been derived or obtained, directly or indirectly, as a result of such criminal activity and third, the accused must be linked, directly or indirectly, to any process or activity connected with the proceeds of crime. It is observed by this Court that the respondent has presented corroborative material, including financial transactions and records, linking the applicant to the proceeds of crime. Considering the presumption under Section 24 of the PMLA, the burden shifted to the applicant to disprove his involvement in the alleged offence. However, the applicant has failed to provide any credible evidence to rebut the statutory presumption - this Court finds that the applicant s arrest was conducted in compliance with the statutory mandate of Section 19 of the PMLA. It is pertinent to mention here that the word used in the proviso to Section 45 of the PMLA is may which indicates that it is the discretion of the Court concerned and it is not a mandate. As observed by the Hon ble Supreme Court in a catena of judgments, it is the discretion of the Court and all the other relevant factors are needed to be weighed in while adjudicating the bail application. The relevant factors include the gravity of the offence, likelihood of reoccurrence, criminal antecedents etc. - this Court holds that the applicant cannot claim the benefit of the monetary threshold exemption under the proviso to Section 45 of the PMLA. Conclusion - This Court is of the view that considering the filing of the first supplementary prosecution complaint and the ongoing nature of the investigation, this Court is not satisfied that the applicant has fulfilled the twin conditions under Section 45 of PMLA. The respondent has presented sufficient material to warrant further investigation, including financial records, electronic evidence, and statements of co-accused implicating the applicant. These materials suggest an active involvement in laundering proceeds of crime and a pattern of financial transactions that need further investigation. The applicant has been unable to put forth any propositions before this Court that are sufficient for grant of bail and thus, the same are rejected. In view of the same, this Court is not inclined to release the applicant on bail and the instant application, is, hereby, dismissed along with the pending applications, if any - Bail application dismissed.

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• 2025 (1) TMI 1448
  Seeking grant of bail - Money laundering - alleged illegal extortion on Coal Transportation, payments collected by the applicant and his associates - twin conditions of Section 45 of the PMLA, 2002 fulfilled or not - HELD THAT:- It is quite vivid that the applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002 and also considering the submission that the applicant has not prima facie reversed the burden of proof and dislodged the prosecution case which is mandatory requirement to get bail. Hon ble the Supreme Court in case of DIRECTORATE OF ENFORCEMENT VERSUS ADITYA TRIPATHI [ 2023 (5) TMI 527 - SUPREME COURT] has held that the High Court has neither considered the rigour of Section 45 of the PML Act, 2002 nor has considered the seriousness of the offences alleged against accused for the scheduled offences under the PML Act, 2002 and the High Court has not at all considered the fact that the investigation by the Enforcement Directorate for the scheduled offences under the PML Act, 2002 is still going on and therefore, the impugned orders passed by the High Court enlarging respective respondent No. 1 on bail are unsustainable and the matters are required to be remitted back to the High Court for afresh decision on the bail applications after taking into consideration the observations made hereinabove. Considering the ECIR and other material placed on record, which prima facie shows involvement of the applicant in crime in question and also considering the law laid down by Hon ble the Supreme Court, it is quite vivid that the applicant is unable to fulfill the twin conditions for grant of bail as provided under Section 45 of the PMLA, 2002. Thus, the Point is answered against the applicant. Conclusion - Applicant is unable to fulfill twin conditions for grant of bail as per Section 45 of the PMLA, 2002. The bail application filed under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 is liable to be and is hereby rejected. Bail application rejected.

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• 2025 (1) TMI 1447
  Maintainability of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) in the absence of a scheduled offence - applicant s arrest and subsequent detention - lack of necessary sanction and procedural irregularities - Sufficiency of statements under Section 50 of the PMLA to establish a prima facie case of money laundering against the applicant - HELD THAT:- The crux of the allegation against the applicant is that he was involved in running an extortion racket by way of Rs. 20+20=Rs. 40/- per quintal of custom milled rice out of the special incentive price of Rs. 120/- payable by the State of Chhattisgarh to the custom rice millers. Hence the offence under Section 383/384 of the IPC has been levelled against the applicant. Similarly, the allegation of cheating under Section 420 IPC has been made against the applicant. Though it has been submitted by the counsel for the applicant that there is no direct or specific evidence against the applicant to suggest that he was involved in any of the offence as alleged in the subject ECIR or the prosecution complaint. From the investigation of the ED, it has been revealed that the applicant was one of the key conspirator and main beneficiary of the POC extorted from the rice millers. It has also been revealed that the rice milers were forced for payment of the same under threat that their incentive bills would not be cleared from the MARKFED. As per Section 50(4) of the PML Act, the statements recorded under Section 50 of the PMLA has evidentiary value as the proceedings under Section 50(2) and (3) are deemed to be a judicial proceeding within the meaning of Section 193 and 228 of the IPC, 1860. The applicant is closely connected with POC as he had deputed some persons at certain place and the cash was not physically taken by him but it was initially demanded by the applicant and payment, he conveyed it to the rice millers over phone. It has come in the statements of some of the rice millers who have personally handed over the extortion amount as demanded by the applicant - the application for bail of the Appellant should be seen at this stage while the Appellant is involved in the economic offence, in general, and for the offence punishable Under Section 4 of the PMLA, in particular. In the present case, it is not acceptable that the applicant was not involved in the offence of money laundering. In fact, the applicant was assisting the co-accused Roshan Chandrakar in running an alleged extortion racket wherein an amount of Rs. 40/- (Rs. 20+20/-) per quintal was extorted from the custom milled rice out of the special incentive price of Rs. 120/- payable by the State Government to the custom rice millers Denial by the applicant itself is not sufficient to consider prima facie that there is no mens rea of the applicant in the said offences. Although the statements of the witnesses are required to be tested at the time of trial, but for the purpose of consideration of bail application, the statements of the witnesses are relevant for consideration of bail application of the applicant. It cannot be said that there is no involvement of the applicant in the offence in question. The Court after examining the entire documents found substantial material indicating a strong nexus between the applicant and the other accused persons in the commission of the crime. There were documents and evidences that reflected the involvement of the applicant and he is the key conspirator and beneficiary from the said scam. The investigation have revealed that the applicant was involved in the extortion of money from the rice millers which was allegedly used for constituting proceeds of crime. The applicant s medical record indicates manageable conditions and it has been found that there is no compelling medical reason for granting bail to the applicant. The Court has found substantial material indicating a strong nexus between the applicant and the crime, thereby failing to satisfy the conditions of bail under Section 45 of the PMLA. The guilt of the accused in the offence of money laundering has been gathered and since, the allegations against the applicant were extremely serious and taking into account, the nature and gravity of the offence and from perusal of the record and in view of the fact that looking to the special and stringent provision under Section 45(1) of the PMLA for grant of bail, in the considered opinion of this Court, prima facie the money trail has been established by the prosecution and therefore, it is not proper to order release of present applicant on regular bail for the reasons. Conclusion - Considering the role of the applicant in obtaining the money through illegal source, which is the proceeds of crime and that there is sufficient evidence collected by the ED to prima facie show the involvement of the applicant in the alleged offences. It is an organized crime having various facets of its complexion, therefore, further considering the nature of offence and material collected during the investigation, this Court is satisfied that there is prima facie evidence for believing that the applicant is involved in the offence, therefore, it is not required to release the applicant on bail. The prayer for bail made by the applicant under Section 483 of the Bhartiya Nagrik Suraksha Sanhita, 2023 (BNSS) read with Section 45 of the PMLA, 2002 for the offences under Section 3 4 of the PMLA, 2002, deserves to be and is hereby rejected.

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• Service Tax

• 2025 (1) TMI 1446
  Applicability of Service Tax on certain services provided by the appellant - classification and exemption of services under the categories of Construction of Complex Service (CCS) and Management, Maintenance or Repair Service (MMRS) - HELD THAT:- It is obvious that in the course of adjudication, they were able to exclude certain activities not covered within the MMRS to building, etc., for which the feasibility under the exemption notification 45/2010-ST was also examined. It is also obvious that while examining the same, the Adjudicating Authority felt that they will fall either in the category of transmission or distribution of electricity and by considering that in relation to is an expression which includes varied nature of activities and therefore, granted them the benefit of exemption notification in relation to such activities, which were not covered by virtue of section 98 of the Finance Act, 2012. In respect of non-commercial MMRS to buildings, after the amendment in Finance Act, 2012, vide section 98, no demand will survive. For the MMRS to others, the exemption notification 45/2010-ST needs to be examined and we have examined the same. It is found that there was Notification No. 11/2010-ST dt.27.02.2010, which exempted the services provided for transmission of electricity. Similarly, in terms of Notification No. 32/2010-ST dt.22.06.2010, the services provided for distribution of electricity were exempt - the Adjudicating Authority has considered this notification 45/2010-ST to cover that entire activity of MMRS as falling in the category of transmission and distribution of electricity. N/N. 45/2010-ST does not provide for such expression and it merely covers services in relation to transmission and distribution of electricity. The Adjudicating Authority has clearly brought out these facts in the impugned order and has categorically held that these activities are squarely covered within the ambit of transmission or distribution of electricity. In view of the same, we find that there is nothing wrong in the order of the Commissioner extending the benefit of notification 45/2010-ST for MMRS provided in relation to transmission and distribution of electricity to defence establishments. Conclusion - i) The demand for Service Tax under CCS for the period prior to 01.07.2010 is unsustainable. ii) The MMRS provided to non-commercial government buildings, specifically defense establishments, are exempt from Service Tax for the period covered by the SCN, as per the amendment in the Finance Act, 2012, section 98. iii) The application of Notification No. 45/2010-ST to MMRS related to transmission and distribution of electricity is appropriate, and the exemption is applicable to the appellant s services. Appeal allowed.

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• 2025 (1) TMI 1445
  Leviability of tax on actual performance of management activities - Management Consultancy Services - services rendered by the appellants to clients located outside India qualify as Export of Services - exemption from service tax - service tax on out-of-pocket expenses (OPE) - extended period of limitation. Leviability of tax on actual performance of management activities - HELD THAT:- The Tribunal in the case of appellant s themselves [ 2014 (8) TMI 227 - CESTAT NEW DELHI] finds that Though the definition at Section 65(65) includes any service in connection with management of any organization, the scope of the definition gets restricted to services in relation to consultancy as is evident from the name given to the service and commercial understanding of the expression Management or Business Consultancy. - CESTAT has been consistently holding that actual performance of the activities do not fall under Management Consultancy Service. Therefore, the issue stands decided in favour of the appellants. Export of services - HELD THAT:- Tribunal Ahmedabad Bench in the case of B A Research India Ltd. [ 2009 (11) TMI 213 - CESTAT, AHMEDABAD] held that The performance of testing and analysing has no value unless and until it is delivered to its client and the service is to be complete when such report is delivered to its client. Thus, delivery of report to its client is an essential part of the service report was delivered outside India and same was used outside India. This is not the disputed fact. We hold that the respondent satisfied the conditions of Rule 3(2) and accordingly the respondents are eligible for the exemption under Notification No. 11/2007-S.T. dated 1-3-2007. - thus the Export of Services claimed by the appellants is in order and the impugned order cannot be sustained on this count. Levy of service tax on the Out-of-Pocket Expenses - HELD THAT:- The dispute has been laid to rest by the decision in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [ 2012 (12) TMI 150 - DELHI HIGH COURT] . The learned Commissioner did not have the benefit of the said judgment while passing the impugned order. This Bench in the case of Smt. Ritu Arora [ 2023 (11) TMI 1130 - CESTAT CHANDIGARH] has followed the above decision. In view of the same, this issue also stands settled in favour of the appellants. Appeal allowed.

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• 2025 (1) TMI 1444
  Service or not - reimbursement of fixed costs by the appellant to refrain from utilizing their plant and machinery for other parties - levy of service tax - HELD THAT:- Learned Commissioner (Appeal) while adjudicating the matter has not considered various legal pronouncements on this issue. The matter is no longer res-integra, as the matter has already been decided by this Tribunal in case of the appellant in case of Commissioner of Central Excise Service Tax, Anand Vs. Standard Pesticides Pvt. Limited [ 2024 (3) TMI 1043 - CESTAT AHMEDABAD ] where it was held that The fact that appellant (earlier known as PMSL) was charging two components towards job-charges separated as fixed cost and variable cost cannot alter this situation so long as goods were manufactured. In a situation where goods were not manufactured but charges were collected under the fixed component it could have been considered as a service. While working out cost of any manufactured product costing is done by splitting cost elements into fixed cost and variable cost and that cannot change the nature of the activity. What could have changed the nature of the activity is a situation where no manufacturing activity took place and still the appellant collected their charges. There is no merit in the impugned order-in-appeal - Appeal allowed.

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• 2025 (1) TMI 1443
  Addition of TDS on the gross amount to arrive at the taxable value - Service Tax demand on exempted services - denial of Abatement under N/N.1/2006 - liability of sub-contractors to pay service tax. Addition of TDS on the gross amount to arrive at the taxable value - HELD THAT:- It is found from Annexure-II attached to the show cause notice that in order to arrive at the taxable value, TDS amount is added to the Gross amount of the contract value, whereas in the Form 16A enclosed with the appeal, it is found that the TDS amount is deducted from the amount paid to the appellant and hence, the amount paid is itself the gross amount. Therefore, adding TDS amount once again has resulted in arriving at the inflated taxable value. TDS is always deducted from the amount payable and it is not any other consideration. Therefore, the demand on this score cannot sustain and hence, the impugned order to this extent is set aside. Service Tax demand on exempted services - denial of Abatement under N/N.1/2006 - HELD THAT:- Construction of (a) Toilets at TNEB office (b) Construction of Security Protection wall (i) in and around LMHEP Barrage unit (ii) right side of Dam Power House, (iii) in and around of central stores and raising of compound wall of the central stores are exempt in terms of Letter F. No. B2/8/2004 TRU dt.10.09.2004 - Similarly, Laying of underground power cable at Lower Mettur Hydro Electric Projects at Chekkanur Barrage, Nerinjipettai Barrage, and Kuthiraikkalmedu Barrage are exempt from tax in terms of Board s Clarification in C. No. 123/5/2010-TRU dt. 24.05.2010 (F. No. 332/5/2010 - TRU) and Circular No. 62/11/2003 ST - dated 21.8.2003 (F. No. B3/7/2003-TRU) - Wiring and rewiring at quarters/town quarters and LMHEP quarters at Kuthiraikkalmedu is also exempt from service tax vide Board s Circular No. 62/11/2003-S.T., dated 21-8-2003 F. No. B3/7/2003-TRU - Providing WBM and Black topping over existing path in Thokkanampatti camp area and inside barrage -II at Nerinjipettai is exempt from service tax as per Section 65(25b) of the Finance Act, 1994, in terms of Para 2(i) of Board s Circular No.123/5/2010 TRU dated 24.05.2010 in F.No.332/5/2010-TRU. The demand made in the impugned order on this score also cannot sustain and hence, the impugned order to this extent stands set aside. Liability of sub-contractors to pay service tax - HELD THAT:- The Larger Bench in the case of COMMR. OF S.T., NEW DELHI vs MELANGE DEVELOPERS PRIVATE LIMITED [ 2019 (6) TMI 518 - CESTAT NEW DELHI-LB ] held that in the scheme of Service Tax, the concept of Cenvat credit enables every service provider in a supply chain to take input credit of the tax paid by him which can be utilized for the purpose of discharge of taxes on his output service. The conditions for allowing Cenvat credit have been provided for in Rule 4. The mechanism under the Cenvat Credit Rules also ensures that there is no scope for double taxation . Suppression of facts - penalty - HELD THAT:- The suppression cannot be alleged and hence, consequent penalty is not imposable. Conclusion - i) The demand of service tax confirmed in the impugned order except sub-contractors, are set aside. ii) The demand of service tax on sub-contractors is sustained only for normal period and the other demand confirmed in the OIO by invoking extended period is set-aside. iii) The matter is remanded for the limited purpose of determining of tax liability for the normal period, along with applicable interest, but however, there shall be no penalty on such determination of tax and interest. Appeal allowed by way of remand.

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• 2025 (1) TMI 1442
  Refund of amount which the appellant had deposited in compliance to the Stay Order dated 11.11.2013 by the Tribunal - rejection of refund claim on the ground of time limitation - non-submission of the re-conciliation statement of the service tax paid on Renting of Immovable Property Services . Whether the amount of Rs.16,14,167/- deposited by the appellant on 19.12.2013 has to be treated towards the service tax liability or as pre-deposit in terms of Section 35F? - HELD THAT:- The Tribunal has granted waiver of pre-deposit and stayed the proceedings in terms of the impugned order, subject to the condition that the appellant shall remit the requisite amount along with interest within a period of 6 weeks. The order passed is simple and clear that the appellant was required to make the pre-deposit for consideration or appeal and also to avail the benefit of the Stay Order as otherwise, they would have suffered the dismissal of appeal. The amount in the form of pre-deposit is also towards the liability of tax to avail the remedy of statutory appeal. Learned counsel for the appellant submitted that Section 35F before substitution by the Act 25 of 2014 (w.e.f. 06.08.2014) required the assessee to deposit the duty demanded or the penalty levied for challenging the impugned order and the appellant was required to make an application for dispensing with the pre-deposit of duty demanded or penalty levied. The appeal under the provisions of Section 35F is a statutory appeal and it is a settled principle of law that a statutory appeal is maintainable subject to the compliance of the conditions laid down in the statue providing the remedy of appeal. Section 35F, in unequivocal terms says person desirous of appealing the order demanding the duty is required to deposit the duty/ penalty demanded, pending the appeal. in terms thereof, the Tribunal directed the appellant to deposit part of the duty amount involved and appellant paid the same in compliance thereof. The interest on delayed refund has been held to be payable to the assessee from the date of deposit in the case of Executive Engineer (Workshop) M. P. Power Transmission Co. Ltd., vs. Commissioner (Appeals) Central Excise Customs CGST [ 2025 (1) TMI 1254 - CESTAT NEW DELHI] till the date of its refund. In similar circumstances where refund was directed to be paid to the assessee, we had also granted interest @ 12% per annum. Conclusion - i) The amount deposited by the appellant was a pre-deposit under Section 35F and not a service tax liability. ii) Section 11B s limitation period does not apply to refunds of pre-deposits made under Section 35F. iii) The appellant is entitled to a refund of the pre-deposit amount along with interest at 12% per annum from the date of deposit. The impugned order is unsustainable and is hereby set aside - Appeal allowed.

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• 2025 (1) TMI 1441
  Recovery of service tax with interest and penalty - it is alleged that for the period 2011-2012, it had shown less income, thereby, made short payment of service tax - invocation of extended period of limitation. Invocation of Extended period of limitation - HELD THAT:- It would be seen from a perusal of sub-section (1) of section 73 of the Finance Act that where any service tax has not been levied or paid, the Central Excise Officer may, within one year from the relevant date, serve a notice on the person chargeable with the service tax which has not been levied or paid, requiring him to show cause why he should not pay amount specified in the notice. The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made there under with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word one year , the word five years has been substituted - the demand for the period from April, 2011 to September, 2011 is hit by limitation as it is even beyond the period of five years. Whether the extended period of limitation could have been invoked in the facts and circumstances of the case for the period from October, 2011 to March, 2012? - HELD THAT:- It is correct that section 73 (1) of the Finance Act does not mention that suppression of facts has to be wilful since wilful precedes only misstatement. It has, therefore, to be seen whether even in the absence of the expression wilful before suppression of facts under section 73(1) of the Finance Act, suppression of facts has still to be willful and with an intent to evade payment of service tax. The Supreme Court and the Delhi High Court have held that suppression of facts has to be wilful and there should also be an intent to evade payment of service tax. In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT] , the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. The extended period of limitation could have been invoked only if there was suppression of facts with intent to evade payment of service tax. Conclusion - The service tax demand for the period from April, 2011 to September, 2011 is beyond the period of five years and the service tax demand from October, 2011 to March, 2012 could not have been confirmed and the extended period of limitation could not have been invoked. Appeal allowed.

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• 2025 (1) TMI 1440
  Failure to discharge proper service tax - Storage and Warehousing Services (SWS) - Goods Transport Agency service (GTA) - Renting of Immovable Property Service (RIS) - whether in the facts of the case, the demand levied on the appellant under section 73 under different categories viz., SWS, GTA and RIS as also under section 73A are sustainable or otherwise? Storage and Warehousing Services (SWS) - HELD THAT:- The rates have been prescribed for various activities covered within the ambit of rake handling contract and it was agreed that the appellant will pay wharfage and demurrage charges, if any, in time to Railways and inform the company for reimbursement. Therefore, the perusal of these documents, which clearly show that it was agreed upon that initially the appellants would pay to railways the wharfage and demurrage charges and thereafter, claim the same on actual basis from cement companies. These documents support the submission of the appellant that they were merely paying on behalf of the cement companies and it was on reimbursement basis. The Adjudicating Authority has denied the exclusion of these charges primarily on the grounds that there is no evidence to suggest that this was being reimbursed on actual basis by the cement companies to the appellant, which, however, is not correct, in view of the representative documents submitted by the appellant. In any case, the department s stand is that in terms of Rule 5 of the Service Tax (Determination of Value) Rules, 2006, any amount received as reimbursement needs to be included in the gross value. However, in view of the judgment of Hon ble High Court of Delhi, subsequently, upheld by Hon ble Supreme Court, in the case of Intercontinental Consultants Technocrats Pvt Ltd [ 2018 (3) TMI 357 - SUPREME COURT ], Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 was held ultravires. It was only after amendment in Section 67 by the Finance Act, 2015, the reimbursement expenditure or costs were required to be included for determination of gross value. Therefore, in view of this decision, any amount proposed to be included in the gross value on SWS, which has been received on reimbursement basis would not sustain and on this ground also, demand to the extent of non-inclusion of income on account of reimbursable wharfage and demurrage charges would not sustain. Goods Transport Agency service (GTA) - HELD THAT:- In the facts of the case, the Service Tax liability has to be made good by the cement companies on RCM basis and not by them, whereas, the department is also admitting that this amount of transportation charges from the railway station to their godown is not taken into account for the purpose of calculating gross value and short payment and only ex-godown has been taken into consideration. The other issue is whether department has relied on the income shown as local transportation charges, which has been subsequently reimbursed at agreed rate, as also any other charges, which could be on account of their having paid initially for transportation of goods from railway station or godown directly to the distributor premises and later recovered by them. Since these aspects are not clear from the facts of the case, this needs to be ascertained. Applicaility of Section 73A - HELD THAT:- There is enough evidence to suggest that certain amount collected has already been paid and therefore, entire amount cannot be considered as recoverable. There is some dispute about actual amount of Service Tax paid from the amount collected, which has to be corroborated with the evidence. Therefore, this also needs to be ascertained. Imposition of penalty on RIS - HELD THAT:- The penalty under Section 76, 77 78 would not survive if the payment including interest has already been made prior to 2012 itself. This also needs to be re-ascertained and reconciled before imposing penalty for balance amount of Service Tax collected but not paid before 2012. Time limitation - HELD THAT:- The demand is based on P L account and ST3 returns and it is an admitted position that this P L account breakup and other things were not reflected in ST3 returns and in fact, they have taken various grounds in defence of denying leviability of Service Tax on income reflected in P L account including their being pure agent, etc. In the facts of the case, we find that ground of limitation has been rightly invoked. However, it is subject to demand getting sustained on merit itself in the denovo proceedings. Conclusion - i) The demand for including wharfage and demurrage charges in the gross value for SWS is unsustainable, and this portion of the demand is set aside. ii) The issue of GTA service liability is remanded for determination of who is liable to pay the Service Tax and whether the cement companies have discharged the liability. iii) The amount of Service Tax collected and paid under Section 73A needs to be redetermined, and penalties should be reassessed accordingly. iv) Penalties under Sections 76 and 78 cannot be imposed simultaneously, and reassessment is required based on the sustainable demand. v) The issue of the correct penalty rate under Section 76 is remanded for determination based on the actual cut-off date and statutory provisions. Appeal allowed in part by way of remand.

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• Central Excise

• 2025 (1) TMI 1439
  CENVAT Credit - electricity generated by the respondent s captive power plant and subsequently cleared to the Haryana State Electricity Board (HSEB) was used in the manufacture of final products within the factory - suppression of facts or not - extended period of limitation - HELD THAT:- The dispute in the present case is that the electricity generated in captive plant was not used in or relation to manufacture of final products within the factory of production but was sold to HSEB whereas learned Tribunal did not decide this dispute and held that there is no dispute with regard to the appellant receiving same quantity of electricity which was cleared to the Electricity Board, therefore, the issue in dispute was never decided by the learned Tribunal. The matter was remanded for reconsideration of whether the electricity was used in manufacturing within the factory, as required for credit eligibility.

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• 2025 (1) TMI 1438
  CENVAT Credit - whether the appellant is entitled to the benefit of CENVAT Credit under the CENVAT Credit Rules, 2004, despite having claimed depreciation on the same capital goods under Section 32 of the Income Tax Act, 1961? - violation of Rule 4(4) of the CENVAT Credit Rules, 2004 - HELD THAT:- The admitted fact on record is that the appellant availed CENVAT Credit on capital goods to the tune of Rs. 6,36,381 in the year 2001-02 and Rs. 2,25,141/- during the year 2002-03. During the course of audit of the financial and excise records of the appellant conducted by Central Excise audit team, it was observed by the audit party that the assessee had simultaneously claimed the benefit of depreciation on the capital goods in their financial accounts as well as Income Tax returns for the relevant years. And admittedly, it was only when it was pointed out to the appellant that they had availed two benefits, the appellant revised their Income Tax return for the year 2003-04 on 31.05.2005 whereas the period in dispute was 2001-02 and 2002-03.The net result is that during the financial years 2001-02 and 2002-03, the appellant had availed and utilized CENVAT Credit on the capital goods and simultaneously claimed benefit of depreciation on these capital goods under Section 32 of the Income Tax Act, 1961 in their Income Tax returns for the assessment years 2002-03 and 2003-04 and the benefit of said depreciation was never surrendered by them as they had neither filed the revised Income Tax returns for the assessment years 2002-03 and 2003-04 nor they had discharged the liability of additional income tax, which would have accrued on account of surrender of benefit of depreciation, so claimed, during the above assessment years. As per the legal provisions, the CENVAT Credit was not allowable to the appellant on the capital goods since they claimed depreciation on these goods in their books of accounts and Income Tax returns for the year 2001-02 and 2002-03 and as per Rule 4 (4) of CENVAT Credit Rules, 2002/2004, the appellant did not fulfil the condition for allowing the CENVAT Credit, therefore, became liable for recovery of CENVAT Credit wrongly taken or erroneously refunded under Rule 14 of the CENVAT Credit Rules, 2004. There are no infirmity in the impugned order dated 25.01.2011 passed by the learned Customs, Excise and Service Tax Appellate Tribunal - appeal dismissed.

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• 2025 (1) TMI 1437
  CENVAT Credit - Ammonium Sulphate used in urea under Rule 6(3) of CENVAT Credit Rules was or was not required to discharge any duty during the impugned period during May 2015 to March 2016 - HELD THAT:- It finds that issue is no more res-integra and has been recently decided based on various other case laws in HINDUSTAN CHEMICALS COMPANY VERSUS COMMISSIONER OF C.E. S.T. -SURAT-II [ 2024 (5) TMI 459 - CESTAT AHMEDABAD ] in which inter alia, it was held by Division Bench of CESTAT Ahmedabad that the Ammonium Sulphate being a by-product arising out of manufacture of final product, namely Potassium Cyanides and Sodium Cyanides, will not be liable for payment of any amount in terms of Rule 6(3) of the Cenvat Credit Rules, 2004. Conclusion - Ammonium Sulphate, as a by-product from manufacturing Potassium Cyanides and Sodium Cyanides, was not liable for payment under Rule 6(3) of the CENVAT Credit Rules. Appeal allowed.

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• 2025 (1) TMI 1436
  Re-determination of valuation of the goods i.e. parts/components manufactured by the appellant in terms of Section 4(1)(b) of the Central Excise Act, 1944 read with Rules 6 and 11 of the Central Excise Valuation Rules, 2002 along with penalty - whether the notional cost of design and drawings provided free of cost by MSIL to the appellant should be included in the assessable value for excise duty purposes? - HELD THAT:- The issue raised was whether the notional cost of specifications in the form of drawings and designs supplied free of cost by Maruti to the potential vendors should be included in the assessable value of the parts or components manufactured by the vendors and cleared to Maruti for their motor vehicles. To appreciate the issue the Principal Bench considered the provisions of Section 4 of the Central Excise Act and Rule 6 of the Central Excise Valuation Rules, 2000 and also distinguished the decision of the Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE JAMSHEDPUR VERSUS TATA MOTORS [ 2008 (12) TMI 129 - CESTAT KOLKATA] and concluded that the notional cost of drawings and designs supplied free of cost by Maruti to the vendors cannot be included in the assessable value of the parts and components manufactured by vendors and cleared to Maruti for the purpose of payment of central excise duty. It is also pertinent to take note of the fact that the Principal Bench had noted the distinction between the mere specification and detailed engineering drawing as considered by the Tribunal in the earlier decision in M/S. MANGALORE REFINERY PETROCHEMICALS LIMITED. VERSUS THE COMMISSIONER OF CUSTOMS MANGALORE. [ 2012 (9) TMI 712 - CESTAT, BANGALORE] , where the Tribunal has held that there is a distinction between mere specifications and detailed engineering drawing. It is only the latter which is covered under rule 9(1)(b)(iv) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 (which is now rule 10(1)(b)(iv) of the 2007 Customs Valuation Rules). Conclusion - The specifications in the nature of design/drawings provided by MSIL were merely layout or dimensions of the desired parts and components as they have to be necessarily manufactured as per the requisite dimensions so that they can be fitted in the vehicle manufactured by the Maruti. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (1) TMI 1435
  Levy of penalty - evasion of tax under the Punjab VAT Act by not submitting the bills at ICC despite the fact that the details of bills are duly mentioned in the Statutory Form of Rajasthan (VAT 47) and was produced at the time of generation of information for other transactions - jurisdiction to check and detain the vehicles at the ICC premises - HELD THAT:- The undisputed fact is that the goods i.e. iron goods being transported in two vehicles were detained by the Excise and Taxation Officer (MW), Bathinda for verification on the grounds that the goods in transit were in excess by weight as was detected after weighment, and requisite information in respect of excess goods was not furnished at any ICC. After issuance of show cause notice, Shri Neeraj Kumar Manager of the firm M/s Shree Shiva Steels, Mandi Gobindgarh, appeared before the Detaining Officer who claimed himself to be the owner of the excess goods loaded in both the vehicles. A perusal of the record further shows that the drivers of both the trucks did not produce any document in respect of excess goods and categorically stated that they have no other document relating to the goods in question. The explanation given by owner of the goods that since the TIN of the consignor firm was blocked, therefore, the drivers could not generate the information in respect of excess goods, cannot be believed since perusal of the record shows that GR No.980 and 981 alongwith retail invoices No.39 and 40 dated 19.08.2009 were produced by Sh. Neeraj Kumar stated to be Manager of the appellant-firm, after the show cause notice was issued to the owner of the goods. Further these documents should have been with the drivers at the time of furnishing information at ICC as per the requirement of Section 51 (2) of the Act as referred to above. This proves the intention of the appellant to evade tax. A perusal of the record shows that the Ld. AETC (MW) Bathinda after conducting proper inquiry and after giving full opportunity of being heard to the appellant, has passed the penalty order under Section 51 (7) (c) of the Act. There are no infirmity in the order dated 30.07.2010 passed by the Ld. VAT Tribunal, Punjab, Chandigarh, the same is upheld - appeal dismissed.

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• 2025 (1) TMI 1434
  Denial of input tax credit in terms of Section 19(5)(c) and 19(2)(V) of the TNVAT Act, 2006 - whether the petitioner was entitled to file a petition under Section 84 of the TNVAT Act, 2006 which is pari materia to Section 55 of the TNGST Act, 1959? - HELD THAT:- The application that was filed by the petitioner under Section 84 of the TNVAT Act, 2006 is in time. Even if the writ petition that were filed by the petitioner earlier challenging the Recovery Notice and the Assessment order dated 24.06.2016 were to be dismissed on account of latches, it cannot be construed that the application under Section 84 of the TNVAT Act, 2006 were barred. Even if the Appellate remedy is not available under Section 51 of the TNVAT Act, 2006, the remedy under Section 84 of the Act cannot be denied particularly when the law has been settled in favour of the assessee. The impugned order dated 11.05.2022 stands quashed and the case stands remitted back to the respondent to pass a fresh order on merits - Petition allowed by way of remand.

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• 2025 (1) TMI 1433
  Seeking quashing of FIR - prolonged trial - right to speedy trial - Petitioner has asserted that she was never involved in any illegal activity and cooperated during the investigations and had also provided all the documents to the Investigating Officer, but the facts were not presented in a correct manner before the Court - HELD THAT:- It is not in dispute that the FIR had been registered in the year 1999 for the offences, punishable under Sections 406/420/468/471/120B of IPC, 1860 and Section 50 (1) of the DST Act and Section 9 of the CST Act along with the allegations of Forgery, Breach of Trust and use of False Documents. From the FIR, the Chargesheet and the Charges which have been framed, it is evident that the allegations made against the Petitioner are serious in nature. In Hussainara Khatoon (I) vs. Home Secretary, State of Bihar [ 1979 (2) TMI 194 - SUPREME COURT ], the Apex Court observed that Article 21 of the Constitution of India confers constitutional right on every person not to be deprived of his life or liberty, except in accordance with the requirement of that Article that some semblance of a procedure should be prescribed by law which should be reasonable, fair and just. If a person is deprived of his liberty under a procedure which is not fair, reasonable or just, such deprivation would be violative of Fundamental Right. It was further observed that deprivation of liberty of a person cannot be termed as reasonable, fair or just unless such procedure ensures a speedy trial for the determination of guilt of such person. Therefore, reasonably expeditious trial is an integral and essential part of the Fundamental Right and Liberty enshrined under Article 21 of the Constitution. It was further observed that peculiar facts and circumstances of the individual cases may be considered for quashing of the proceedings. The Apex Court in the matter of Santosh Dev [ 1994 (2) TMI 330 - SUPREME COURT] , it was observed that Article 21 of the Constitution of India recognises the constitutional right of speedy trial. It was also noted that the trial was not concluded within four years but in terms of Section 245 (3) of Code of Criminal Procedure, 1973 which was inserted in 1998, mandated that the trial be completed in four years. In the present case, it cannot be denied that the FIR got filed in the year 1999, in which the Chargesheet came to be filed on 10.11.2003 and the Charges were framed in 2021. However, since then, testimony of 5 witnesses, out of 17 prosecution witnesses, has been recorded. None of the grounds as stated in the aforesaid judgments has been pleaded in the present case, aside from the fact that the Petitioner has appeared umpteen times before the Court and is now 71 years old and is ailing. There is no case made out for quashing of the Chargesheet as well as of the FIR. Conclusion - There was no basis for quashing the FIR or Chargesheet. The trial court is directed to expedite proceedings to ensure a timely conclusion. Petition disposed off.

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• Indian Laws

• 2025 (1) TMI 1432
  Dishonour of cheque - petitioner arraigned as an accused in a proceeding initiated u/s 138 read with section 141 of the Negotiable Instrument Act - petitioner resigned from the company before the issuance of the cheque - complaint lacked specific allegations - HELD THAT:- In NARENDER KUMAR SURI AND OTHERS VERSUS M/S NARENDRA POLYMERS PVT. LTD. [ 2014 (10) TMI 1084 - PUNJAB AND HARYANA HIGH COURT] , a Single Bench of Punjab and Haryana High Court held that the Director of Public Limited Company or Private Ltd. Company can tender his resignation unilaterally and without filing in Form 32 and without sending a notice to Registrar of Companies. Filing in of said Form and giving of due intimation and information to Registrar of Companies is duty of company secretary and not of an individual director. it is for the company secretary to fill in forms as prescribed and to give due information and intimation to the ROC, as the law requires and thereafter, to be so mentioned in all the prescribed registers of company, accounts and balance sheet of company and thereafter the said fact is to be brought to the notice of the members of the company as early as possible and at the latest in annual general meeting. Section 168 (2) of the Companies Act, 2013 also provides that the resignation of a director shall take effect from the date on which the notice is received by the company or the date if any specified by the director in the notice, whichever is later. In the present case from the supplementary affidavit filed by the petitioner it further discloses that the letter of resignation was sent through speed post on 14.03.2020 and it was delivered to the accused company on 16.03.2020 - Proviso to section 168 (1) states that a director may also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within 30 days of resignation but this proviso is not mandatory. A resignation cannot be treated as not accepted by the Company simply because Director had not sent the copy of resignation to the Registrar within 30 days. Similarly, even after tendering resignation and the company even after receiving the same, if does not call meeting for its acceptance that also beyond the control of the petitioner and the petitioner cannot be held responsible for the same. It is settled law that putting the criminal law into motion is not a matter of course or to settle the scores between the parties. Courts cannot be a mere spectator to it. Before a magistrate taking cognizance of an offence under section 138/141 of the N.I. Act, making a person vicariously liable has to ensure strict compliance with the statutory requirement. In the aforesaid factual backdrop and the legal position as stated above, continuation of the proceeding quo the petitioner will clearly be an abuse of process of the court. Conclusion - The petitioner was not liable under Section 138/141 of the N.I. Act due to his resignation prior to the cheque issuance and the lack of specific allegations in the complaint. Application allowed.

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• 2025 (1) TMI 1431
  Dishonour of cheque - petitioner resigned as a director prior to the issuance of the dishonored cheque - Section 138 read with Section 141 of the Negotiable Instruments Act - HELD THAT:- In NARENDER KUMAR SURI AND OTHERS VERSUS M/S NARENDRA POLYMERS PVT. LTD. [ 2014 (10) TMI 1084 - PUNJAB AND HARYANA HIGH COURT] , a Single Bench of Punjab and Haryana High Court held that the Director of Public Limited Company or Private Ltd. Company can tender his resignation unilaterally and without filing in Form 32 and without sending a notice to Registrar of Companies. Filing in of said Form and giving of due intimation and information to Registrar of Companies is duty of company secretary and not of an individual director. it is for the company secretary to fill in forms as prescribed and to give due information and intimation to the ROC, as the law requires and thereafter, to be so mentioned in all the prescribed registers of company, accounts and balance sheet of company and thereafter the said fact is to be brought to the notice of the members of the company as early as possible and at the latest in annual general meeting. Section 168 (2) of the Companies Act, 2013 also provides that the resignation of a director shall take effect from the date on which the notice is received by the company or the date if any specified by the director in the notice, whichever is later. In the present case from the supplementary affidavit filed by the petitioner it further discloses that the letter of resignation was sent through speed post on 14.03.2020 and it was delivered to the accused company on 16.03.2020 - Proviso to section 168 (1) states that a director may also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within 30 days of resignation but this proviso is not mandatory. A resignation cannot be treated as not accepted by the Company simply because Director had not sent the copy of resignation to the Registrar within 30 days. Similarly, even after tendering resignation and the company even after receiving the same, if does not call meeting for its acceptance that also beyond the control of the petitioner and the petitioner cannot be held responsible for the same. It is settled law that putting the criminal law into motion is not a matter of course or to settle the scores between the parties. Courts cannot be a mere spectator to it. Before a magistrate taking cognizance of an offence under section 138/141 of the N.I. Act, making a person vicariously liable has to ensure strict compliance with the statutory requirement. In the aforesaid factual backdrop and the legal position as stated above, continuation of the proceeding quo the petitioner will clearly be an abuse of process of the court. Conclusion - The petitioner was not liable under Section 138/141 of the N.I. Act due to his resignation prior to the cheque issuance and the lack of specific allegations in the complaint. Application allowed.

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• 2025 (1) TMI 1430
  Dishonour of Cheque - whether the amended provision contained under Section 143A of the Negotiable Instruments Act, 1881 would apply on the complaint filed prior to enactment and enforcement of this provision? - HELD THAT:- Bare perusal of Section 143A of the Act of 1881 indicates that the Court trying an offence under Section 138 of the Act of 1881, may direct the drawer of the cheque to pay interim compensation to the complainant i.e. amount not exceeding 20% of the cheque amount. The sub-section (4) of Section 143A of the Act of 1881 provides that in case the drawer of the cheque is acquitted, the Court shall direct the complainant to repay the same amount to the drawer - This Court cannot lose sight of the fact that, prior to insertion of the new provision, i.e., Section 143A in the Act of 1881, there was no provision in the Act for issuing directions to the drawer of cheque to pay interim compensation of 20% of the cheque amount to the complainant prior to the commission of the offence under Section 138 of the Act of 1881. Hon ble Apex Court in the case of Surinder Singh Deswal [ 2019 (5) TMI 1626 - SUPREME COURT] has held that the new provisions contained under Section 148 of the Act of 1881 as amended on 01.09.2018 shall be applicable to the appeals against the order of conviction and sentence for the offence under Section 138 of the Act of 1881, even in the cases where the criminal complaints for the offence under Section 138 of the Act of 1881 were filed prior to the amending Act No. 20/2018 i.e. prior to 01.09.2018. It is not worthy to mention here that the Hon ble Apex Court dealt with the applicability of Section 148 of the Act of 1881, even on the complaints filed prior to 01.09.2018 but the issue of applicability of Section 143A of the Act of 1881 was not under challenge in the case of Surinder Singh Deswal @ Col. S.S. Deswal [ 2019 (5) TMI 1626 - SUPREME COURT] before the Hon ble Apex Court. The issue of applicability of the new provision of Section 143A of the Act of 1881 on the complaints filed prior to 01.09.2018 came up before the Hon ble Apex Court in the case of G.J. Raja vs. Tejraj Surana [ 2019 (8) TMI 91 - SUPREME COURT] and it was held by the Hon ble Apex Court that prior to insertion of Section 143A of the Act of 1881, there was no provision under the Act of 1881 to direct the accused to pay interim compensation to the complainant prior to his conviction for the offence under Section 138 of the Act of 1881. It was held that provisions of Section 143A of the Act of 1881 would apply with its prospective effect and the provisions of Section 148 of the Act of 1881 would not apply with its prospective effect after conviction of the accused for the offence under Section 138 of the Act of 1881. Conclusion - Section 143A of the Act of 1881 has its prospective effect and the same is applicable upon the complaints filed under Section 138 of the Act of 1881 after introduction/insertion of Section 143A of the Act of 1881 i.e. after 01.09.2018. This provision cannot have its retrospective effect upon the complaints filed prior to 01.09.2018. Petition allowed.

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