TMI Tax Updates - e-Newsletter
February 10, 2025

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Difference Between Nil TDS Return and Regular TDS Return

   By: Ishita Ramani

2. REFUND OF IGST PAID ON EXPORT OF GOODS

   By: DR.MARIAPPAN GOVINDARAJAN

3. Services and Processes in TNREGINET: A Comprehensive Overview

   By: shubham jadhav

4. India's Stand on WTO High Seas Fishing Decision and Its Impact on Fishermen

   By: DrJoshua Ebenezer

5. Agriculture Export Policy of India

   By: YAGAY andSUN

6. NTM, TBT and SPS “Foe” or “Friend” in International Trade.

   By: YAGAY andSUN

7. Over Invoicing and Mis-Declaration related to Exports under Customs Laws

   By: YAGAY andSUN

News

1. Advisory for Biometric-Based Aadhaar Authentication and Document Verification for GST Registration Applicants of Maharashtra and Lakshadweep

2. Modi govt spent Rs 11 lakh crore on infrastructure development in one year: Scindia

3. J-K CM holds pre-budget meeting with industry stakeholders, focuses on Jammu's tourism potential

4. Bengal Assembly budget session to begin on February 10 with Guv's address after one-year gap

5. J-K CM holds pre-budget consultations with stakeholders in tourism, industries, education

6. Hope to introduce new income tax bill in Lok Sabha next week: Sitharaman

7. Market forces decide rupee value, RBI not worried about day-to-day fluctuation: Governor

8. Additional Factor of Authentication (AFA) for cross-border Card Not Present (CNP) transactions – Draft Directions

9. Statement on Developmental and Regulatory Policies

10. Cabinet clears new I-T bill; to be introduced in Parliament next week

Notifications

DGFT

1. 58/2024-25 - dated 7-2-2025 - FTP

Amendment in Import Policy condition no. 1(III) under Chapter 87 of ITC (HS), 2022, Schedule —I (Import Policy)

GST - States

2. 38/1/2017-Fin(R&C)(288)/27549 - dated 5-2-2025 - Goa SGST

State Tax Notification for waiver of the late fee

3. 38/1/2017-Fin(R&C)(287)/27548 - dated 5-2-2025 - Goa SGST

Goa Goods and Services Tax (Amendment) Rules, 2025.

4. 23/2024-State Tax - dated 16-12-2024 - Himachal Pradesh SGST

Supersession Notification No. 22/2021- State Tax, dated 13.08.2021

5. 21/2024-State Tax - dated 16-12-2024 - Himachal Pradesh SGST

State Government notifies the respective date by which payment for the tax, as per the notice, statement, or order, must be made to qualify for a waiver of interest and penalties under Section 128A of the HPGST Act

6. MGST-1024 /C.R.-45/Taxation-1 - dated 28-1-2025 - Maharashtra SGST

Supersession of Notification No. GST.1020/C.R.47/Taxation-1.—Dtd. 26.05.2020 (regarding reconstitution of the State Level Screening Committee.

7. 1A/2025-State Tax - dated 28-1-2025 - Maharashtra SGST

Seeks to notify section 35, 2 and 9, 7, 32, 38 and 40, 3 to 6, 8, 10 to 31, 33, 34, 36, 37 and 39 of Maharashtra Goods and Services Tax (Amendment) Act, 2024

8. F.12(5)FD/Tax/2025-120 - dated 6-2-2025 - Rajasthan SGST

Seeks to amend Rajasthan Goods and Service Tax Rules, 2017

9. F.12(5)FD/Tax/2025-119 - dated 6-2-2025 - Rajasthan SGST

Rajasthan Goods and Services Tax (Amendment) Rules, 2025

Circulars / Instructions / Orders

GST

1. Instruction No. 02/2025 - dated 7-2-2025

Procedure to be followed in department appeal filed against interest and/or penalty only, related to Section 128A of the CGST Act, 2017

Highlights / Catch Notes

GST

• Input Tax Credit Refund Restrictions Under Notification 9/2022 Cannot Apply to Credits Accrued Before July 2022

  Case-Laws - HC : HC held that refund restrictions on input tax credit introduced by Notification No. 9/2022 (effective 18.07.2022) cannot be applied retrospectively. The Court invalidated Circular No. 181/13/2022-GST to the extent it made restrictions applicable to all refund applications filed after 18.07.2022, regardless of when input tax credit accrued. The Court emphasized that registered persons retain the right to recover input tax credit that arose from rate mismatches prior to 18.07.2022 under Section 54 of CGST Act. Impugned refund rejection orders were set aside, directing authorities to reconsider applications without applying the contested circular's clarification. This preserves taxpayers' vested rights to claim refunds for periods before the notification's effective date.
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• Manpower Services for Jal Jeevan Mission's Data Entry and Engineering Support Qualify as GST-Exempt Pure Services

  Case-Laws - AAR : AAR ruled that manpower services supplied to Public Health Engineering Department for Jal Jeevan Mission qualify as exempt "pure services" under Notification 12/2017. The services meet three key criteria: they constitute pure services without goods transfer, are provided to state government (West Bengal), and relate to constitutional functions of Panchayat/Municipality under Articles 243G/243W regarding water supply. The supply of data entry operators and junior engineers for system administration and software support throughout West Bengal is therefore exempt from GST as it fulfills all conditions specified in Serial No. 3 of the notification.
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• Pure Services for Water Distribution Network Support Under Jal Jeevan Mission Qualify for GST Exemption

  Case-Laws - AAR : The AAR ruled that services provided by the applicant to the Public Health Engineering Directorate (PHED), Government of West Bengal, qualify for GST exemption as "pure services." The services involve technological support for water distribution networks under Jal Jeevan Mission, including system maintenance, data management, and application development, without any goods transfer. The AAR determined these services meet three essential criteria: they constitute pure services, are provided to a State Government entity (as PHED divisions are integral parts of the state government), and relate to functions entrusted to Panchayats/municipalities under Articles 243G/243W of the Constitution regarding water supply. The ruling confirms GST exemption for services to both main PHED and its divisional offices.
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• Period of Three Months Under Section 107 CGST Act Must Be Counted As Calendar Months, Not Days

  Case-Laws - HC : HC examined interpretation of limitation periods under Section 107 of CGST Act 2017. The period of "three months" for filing appeal and "one month" for condonation of delay should be interpreted literally, not converted to 90 days and 30 days respectively. Following precedent from a recent arbitration case, HC determined that three-month period should be calculated calendar month-wise, not by counting days. In the instant case, appeal filed on 26.04.2024 fell within the extended one-month period from original deadline of 27.03.2024. Appellate authority erred by converting months to days. HC ruled that legislative intent clearly specified periods in months, not days. Appeal was held maintainable within condonation period subject to showing sufficient cause.
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• Tax Authority Can Extend 5-Year Limitation Under Section 73(1) Without Mandatory Pre-Show Cause Consultation in Fraud Cases

  Case-Laws - HC : HC held that pre-show cause consultation was not mandatory in tax evasion cases and extended 5-year limitation period under Section 73(1) applied when proceedings involved allegations of fraud or suppression. The Court declined to examine whether fraud existed, ruling this was within the Appellate Authority's domain. While Section 74(1) of CGST Act requires specific evidence of fraud or willful misstatement for invocation, the authority's reasonable belief formation was valid despite petitioner's non-response. The writ petition was dismissed as premature given available statutory appeal remedies. The Court emphasized that "where possible" timeframes for tax determination were directory, not mandatory, allowing proceedings to continue beyond prescribed periods.
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• Power Company Wins IGST and Service Tax Refund After Proving Consumer Benefit Plan Through Tariff Adjustments

  Case-Laws - HC : HC held that petitioner was entitled to refund of IGST and Service Tax paid on ocean freight following Mohit Minerals precedent. While addressing unjust enrichment concerns, court found petitioner's commitment to refund consumers through tariff adjustments satisfactory. Petitioner established plan to maintain refund amount in separate account for consumer benefit under Electricity Act provisions. Court rejected authorities' transfer of Rs. 23 Crores to Consumer Welfare Fund, finding it inappropriate when mechanism exists to return funds to affected consumers. Orders transferring refund to Consumer Welfare Fund quashed. Authorities directed to refund amount to petitioner within two weeks, with understanding funds would benefit consumers through regulated tariff reductions.
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Income Tax

• Infrastructure Debt Fund Guidelines Updated: New Rules for Post-Operational Projects and Investment Restrictions Under Section 10(47)

  Notifications : CBDT amended Income-tax Rules 1962 regarding Infrastructure Debt Fund (IDF) guidelines under section 10(47). IDFs must operate as NBFCs under RBI regulations, investing exclusively in post-operational infrastructure projects with minimum one-year commercial operations or toll-operate-transfer projects. Funding mechanisms include rupee/foreign currency bonds, zero coupon bonds per Rule 8B, and external commercial borrowings with minimum 5-year tenor. ECBs cannot be sourced from foreign branches of Indian banks. Investment restrictions apply where specified shareholders (holding >=30% voting power) or associated enterprises have substantial interests. The amendment introduces stricter operational parameters and clarifies funding mechanisms while maintaining regulatory oversight by RBI and alignment with FEMA regulations.
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• Assessment Order Against Dissolved Company Invalid After Resolution Plan Extinguishes Tax Dues Under IBC Section 31

  Case-Laws - AT : ITAT held that assessment order dated 27/09/2021 against dissolved company lacks legal enforceability. During insolvency proceedings, tax department's claim of Rs. 10.14 Cr for TDS violations was rejected, with subsequent NCLAT dismissal. Approved resolution plan explicitly extinguished all revenue department dues prior to NCLT approval date. Following established jurisprudence, tribunal determined assessment order lost legal sanctity post-dissolution. Department's grounds challenging CIT(A) order deemed non-sustainable. Appeal dismissed as resolution plan's approval effectively extinguished pre-existing tax liabilities.
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• Income Tax Assessment Order Set Aside As Taxpayer Denied Fair Hearing Opportunity Under Natural Justice Principles

  Case-Laws - HC : HC remanded proceedings back to ITAT for de novo hearing due to violation of natural justice principles. The original assessment order by NFAC was passed ex-parte without granting the petitioner an opportunity to be heard. ITAT failed to address this procedural defect and proceeded to evaluate the case on merits, disregarding written submissions presented by the petitioner. The court found the violation of natural justice principles to be real and palpable, as the petitioner was deprived of presenting their case both before the assessing officer and ITAT. The matter requires fresh consideration with proper hearing opportunities in accordance with principles of fairness and natural justice.
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• Technical Glitch Causing 1 Hour Delay in Tax Audit Upload Deserves Condonation Under Section 119(2)(b)

  Case-Laws - HC : HC overturned revenue authority's rejection of delay condonation for late audit report filing. The delay of 1 hour, 19 minutes, and 16 seconds occurred due to technical difficulties during upload, extending past midnight of the deadline. While petitioner's technical glitch claims lacked specific proof, HC adopted a pragmatic approach, noting the minimal time overrun occurring in early morning hours would not impede revenue processing. The court found the revenue authority's order rejecting condonation to be perverse, particularly given the brief duration of delay and circumstances of submission under deadline pressure. Petition granted, delay condoned under s.119(2)(b).
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• Stock Market Gains From Penny Trades Valid as Assessee Proves Legitimacy Through Documents Under Section 68

  Case-Laws - AT : ITAT dismissed revenue's appeal concerning disputed long-term capital gains from penny stock transactions. While AO treated gains as unexplained cash credits under Section 68, assessee successfully demonstrated transaction legitimacy through comprehensive documentation including bank statements, contract notes, demat records and audited financials. Revenue failed to establish price manipulation or collusion with counterparties through direct evidence. Mere suspicion of accommodation entries in penny stocks insufficient to sustain addition without concrete proof rebutting assessee's evidence. CIT(A)'s deletion of addition upheld as assessee discharged onus of proving genuine nature of LTCG while revenue relied on generalized allegations without substantive material establishing non-genuineness.
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• Finance Lease Rental Payments Qualify as Revenue Expenditure Under Section 37(1), Rejecting Capital Expenditure Classification

  Case-Laws - AT : ITAT upheld CIT(A)'s decision allowing deduction of Finance Lease Rental Payments under section 37(1) as revenue expenditure. Revenue's appeal challenging depreciation allowance was deemed infructuous based on precedent from Karnataka HC regarding lessor's treatment of lease payments. The tribunal affirmed that finance lease rental payments qualify as allowable business expenditure rather than capital expenditure as initially classified by AO. The ruling maintains consistency with established judicial interpretation of lease payment characterization under Income Tax Act provisions. Revenue's appeal dismissed, confirming assessee's entitlement to claim rental payments as deductible business expense.
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• Employee's Leave Salary Exemption Claim Under Section 10(10AA) After PSU Absorption Found Valid, Penalty Under 270A Quashed

  Case-Laws - AT : AO's penalty order under s270A regarding leave salary exemption claimed on voluntary retirement under s10(10AA) was set aside by ITAT. The appellant, permanently absorbed in MTNL from government service, claimed full exemption in revised ITR based on genuine belief. ITAT held that penalty imposition is discretionary due to word "may" in s270A(1), not mandatory "shall". The bona fide belief clause in s270A(6)(a) supports discretionary interpretation. The claim's debatable nature was evident from SC judgments on employee rights in PSUs versus government service. The tribunal found appellant's explanation legitimate, noting full disclosure of service details and circumstances leading to exemption claim. Penalty order quashed considering genuine mistake and absence of deliberate misreporting.
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• Tunnel Construction Company's Section 80IA Claim Rejected But Technical Service Fees Allowed As Business Expenditure

  Case-Laws - AT : Taxpayer denied deduction under section 80IA as they failed to meet statutory requirements for infrastructure development projects. ITAT found that LMRCL, being a special purpose vehicle with 50:50 equity between Central and State governments, did not qualify as government authority/statutory body under section 80IA(4). Assessee's role was limited to tunnel construction per contract specifications. Regarding disallowance of technical service fees paid to Gulemark TPL JV, ITAT reversed AO's decision, holding that expenses were legitimate business expenditures deductible under section 37. Since AO had accepted these as revenue expenditure rather than capital expenditure, technical service fees were allowed as claimed. Revenue's appeals dismissed.
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• Income Tax Section 69 Addition Deleted As NRI Property Investment Through Banking Channels Found Valid With Documentation

  Case-Laws - AT : ITAT ruled against the addition made under section 69 regarding unexplained investment in Oberoi Reality property. The assessee had provided complete documentation, banking channel evidence, and proper explanations for the property purchase made in 2010. The tribunal found that AO and DRP failed to specify valid grounds for rejecting the submitted evidence. Since the property was purchased in 2010 with major payments made that year, the addition in AY 2018-19 was inappropriate. The tribunal also emphasized that money brought to India by non-residents for investment purposes is not taxable when proper remittance evidence exists through banking channels. The appeal was allowed, and the addition was deleted.
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• Interest from Fixed Deposits of Government Grants Counts as Grant Income Under Section 10(23C)(iiiac) for Educational Institutions

  Case-Laws - AT : ITAT ruled that interest earned on fixed deposits from unspent government grants qualifies as grant income under section 10(23C)(iiiac). When this interest is added to direct grants received, total government funding exceeds the required 50% threshold. The institution, managed by state government, meets eligibility criteria for tax exemption. ITAT upheld CIT(A)'s decision that the assessee qualifies for exemption under both section 10(23C)(iiiac) and section 11(2) of Income Tax Act. Revenue's objections were dismissed, confirming the educational institution's exempt status based on combined grant receipts and associated interest income meeting statutory requirements for substantial government funding.
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Customs

• Rajkot Airport Designated for International Cargo Operations Under Section 7 of Customs Act for Import-Export Activities

  Notifications : CBIC exercised powers under Section 7(1)(a) and 7(2) of Customs Act 1962 to amend Notification 61/94-Customs (N.T.) by designating Rajkot in Gujarat as a customs airport. The amendment authorizes Rajkot airport for unloading imported goods and loading export goods. This modification appears in the Table against serial number 6 relating to Gujarat as entry (e), expanding the network of customs-enabled airports in the state. The notification enhances trade facilitation by establishing new customs infrastructure for international cargo operations.
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• Customs Ordered Release of Seized Self-Drilling Bars Under Bond with 30% Bank Guarantee in HSN Classification Dispute

  Case-Laws - HC : HC addressed provisional release of seized goods involving classification dispute between HSN entries 82.07 and 73.04 for self-drilling bars. While noting statutory appellate remedies should typically be exhausted before seeking writ jurisdiction, court considered prolonged seizure duration and regular import status. Given goods' detention since May 2024 and six-month petition pendency, HC ordered release under bond with 30% differential duty as bank guarantee, departing from standard 70-80% requirement. Decision balanced procedural requirements with commercial practicality, allowing expedited resolution while maintaining adequate security for customs authority pending final classification determination.
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• Iron Ore Export: Shipping Bills Must Be Assessed Individually, Fe Content Determined on Wet Basis Under Customs Act

  Case-Laws - AT : CESTAT ruled that separate shipping bills for goods exported in a single vessel must be assessed individually, not collectively, under the Customs Act. The tribunal emphasized that Fe content in iron ore fines must be determined on a wet basis, following SC precedent in Gangadhar Narsingdas. The Commissioner's order demanding differential duty based on combined assessment of multiple shipping bills and dry basis Fe content determination was overturned. The tribunal clarified that neither DRI officers nor Customs Commissioner has statutory authority to assess multiple shipping bills together, even when goods are loaded on the same vessel or covered under a single Bill of Lading. The appeal was allowed, setting aside the Commissioner's order dated 30.11.2022.
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• Customs Duty Refund Claim Under EPCG Scheme Rejected Due to Time-Bar Under Section 27 of Customs Act

  Case-Laws - AT : CESTAT upheld rejection of a customs duty refund claim filed on 09.01.2024 relating to payments made via challans between March-December 2017 under EPCG scheme. The appellant's claim was time-barred under Section 27 of Customs Act, 1962, as it exceeded the one-year limitation period from duty payment date. The Tribunal noted that no statutory relaxations under Section 27(1B) were applicable. Following precedent from IFGL Refractories case, CESTAT found no grounds to interfere with the original order rejecting the refund claim due to clear statutory time-bar. The appeal was dismissed on merits, affirming that limitation periods under Customs Act must be strictly observed.
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• Customs Notification 94/96 Benefits Must Be Granted For Re-Imported Goods Previously Exported Despite Post-Clearance Claim

  Case-Laws - AT : CESTAT held that appellant was entitled to benefit under N/N. 94/96-Cus for imported goods that were initially exported and returned. While the adjudicating authority denied benefits claiming they cannot be granted post clearance, and Commissioner(Appeals) upheld this view, CESTAT found this contradicted earlier Commissioner(Appeals) direction to allow notification benefits. Without any higher forum modifying the previous direction, Assistant Commissioner was bound to grant benefits. Following Supreme Court precedent in Share Medical Care case, CESTAT ruled notification benefits were wrongly denied and allowed the appeal, directing reassessment of goods under N/N. 94/96-Cus.
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DGFT

• Export of Wheat-Millet Flour Blend Allowed Under SION E-136: Minimum 60% Wheat, 15% Millets Required

  Circulars : DGFT amended SION E-136 to permit export of Wheat Flour (Atta) with Millets under specified conditions. The export product must contain minimum 60% Wheat Flour and 15% Millets, with domestically sourced ingredients. Import entitlement for Wheat under Advance Authorization will be calculated proportionally at 1.07 kg Wheat import per 1 kg Wheat Flour export. Shipping documentation must clearly specify percentage composition of ingredients. The amendment maintains consistency with previous conditions established in PN 38/2015-20 and PN 62/2015-20, while expanding scope to include millet-based flour products under the export framework.
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IBC

• Delay of 115 Days in IBC Appeal Rejected as Explanations Found Insufficient and Contradictory Under Section 61

  Case-Laws - AT : NCLAT dismissed an application seeking condonation of 115-day delay in refiling a company appeal. The appellant's explanations regarding inability to physically inspect records due to geographical location and delays in obtaining certified copies were deemed insufficient. The tribunal noted that the certified copy was obtained on the same day of application (09.12.2024), contradicting claims of procedural delays. Given IBC's emphasis on timely resolution and the one-year timeline for liquidation processes, the tribunal found the appellant's approach nonchalant and the reasons for delay perfunctory. The delay was deemed detrimental to the liquidation process's integrity, resulting in rejection of the condonation application and subsequent dismissal of the appeal.
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• Financial Creditor's CIRP Application Under Section 7 IBC Upheld After Proper Notice Service and Default Verification

  Case-Laws - AT : NCLAT upheld NCLT's decision to admit Corporate Debtor into CIRP under Section 7 of IBC, 2016. The Corporate Debtor's challenge regarding improper notice service was rejected as notice was effectively served through multiple channels including newspaper publications, speed post, and email. The debt and default were verified through Information Utility (NeSL) records, with authenticated default submission showing no response from Corporate Debtor. The Tribunal found all essential requirements for Section 7 admission were met: existence of debt, default in repayment, and application within limitation period. Corporate Debtor's non-commitment to debt repayment during proceedings further supported the admission decision. Appeal dismissed, confirming validity of CIRP initiation.
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• Secured creditor must share liquidator's fee within 90 days of opting for SARFAESI, rules Regulation 21-A

  Case-Laws - AT : NCLAT dismissed appeal concerning liquidator's fee payment under IBC 2016. Secured creditor (Bank) opted to realize security interest under SARFAESI Act without relinquishing security interest. Per Regulation 21-A of Liquidation Process Regulations, secured creditors must share liquidation costs within 90 days of deciding to realize security interest. Bank's contention that liquidator's fee applies only upon actual realization/distribution was rejected. NCLAT upheld that secured creditors are mandatorily obligated to pay their share as per Section 53(1)(a) and 53(1)(b)(i) waterfall mechanism, regardless of whether liquidator directly handled asset realization. Non-compliance would result in secured asset becoming part of liquidation estate under Regulation 21A(3).
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Indian Laws

• New Direct Tax Code to Replace 60-Year-Old Income Tax Act: Simplified Language and Streamlined Compliance

  News : Union Cabinet approved a new Income Tax Bill to replace the Income Tax Act, 1961, aimed at simplifying direct tax legislation. The bill, characterized by simplified language and elimination of complex provisos and explanations, maintains existing tax obligations without introducing new burdens. Following cabinet approval, the legislation will be introduced in Parliament and referred to the Standing Committee on Finance. The reform stems from FM's announcement in Budget 2025-26, with CBDT overseeing the comprehensive review through specialized committees. The modernization effort incorporated 6,500 stakeholder suggestions focusing on language simplification, litigation reduction, compliance streamlining, and removal of obsolete provisions. Implementation will proceed through parliamentary deliberation, with the bill's introduction scheduled for the current session.
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• Entertainment Tax Staff Integration with Commercial Tax Department Under Merger Rules 2022 Upholds Constitutional Standards

  Case-Laws - HC : HC upheld the Merger Rules 2022 combining Entertainment Tax Department employees into Commercial Tax Department. Court found no constitutional violations of Arts. 14, 16, and 21 despite impact on petitioners' seniority and promotion prospects. Following precedent in Indian Airlines Officers case, ruled that policy decisions affecting employee placement and seniority are valid unless manifestly arbitrary. Court determined placement at bottom of seniority list from merger date (24.04.2018) was legitimate policy decision outside judicial interference. Rules properly preserved service continuity while implementing departmental reorganization. Petitioners must accept appointment dates and status as specified in Merger Rules 2022. Petition challenging constitutional validity dismissed.
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• Managing Director Not Liable Under Section 138 NI Act for Delivering Third Party's Dishonored Cheque

  Case-Laws - HC : HC ruled that a Managing Director cannot be held vicariously liable under Section 138 of Negotiable Instruments Act for a dishonored cheque that was not drawn by their company. While the petitioner, as MD of Kwality Ltd, handed over the dishonored cheque to the complainant, the cheque was actually drawn by DRTPL and signed by its director. The court clarified that Section 138 liability attaches to the drawer of the cheque and their company's responsible officers, not to third parties who merely deliver the instrument. Since the petitioner was not a director of DRTPL (the drawer company), merely delivering the cheque did not create liability under Section 138. Petition allowed.
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PMLA

• Money Laundering Arrest Quashed: ED Failed to Meet "Reason to Believe" Standard Under Section 19(1) PMLA

  Case-Laws - HC : HC ruled petitioner's arrest for money laundering under PMLA illegal. Court found ED failed to establish "reason to believe" standard required under Section 19(1) PMLA. No tangible evidence demonstrated petitioner's involvement in illegal sand mining operations or financial transactions with proceeds of crime. ED's investigation lacked proof of petitioner's share deposits in mining bids or direct participation in money laundering activities. While petitioner acknowledged financial dealings with AMPL, prosecution failed to establish connection to proceeds of crime or involvement in concealment, possession, or projection of untainted property. Court emphasized arrest power under PMLA requires substantive evidence of guilt, not merely investigative purposes. Petition granted, arrest declared violation of Section 19(1) PMLA safeguards.
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Service Tax

• Service Tax Applicable for Subcontractors in Power Transmission Despite Main Contractor's Payment Under N/N 45/2010-ST

  Case-Laws - AT : CESTAT examined service tax liability for electricity transmission/distribution services. Court held subcontractors must pay service tax independently even if main contractor paid tax on full amount, following precedent in Melange Developers. Regarding N/N. 45/2010-S.T. exemption for electricity transmission services, matter remanded to adjudicating authority to verify work orders and determine eligibility. Authority directed to examine extended limitation period applicability based on specific circumstances and verify if appellant acted as subcontractor. Additional service categories including site formation, transport, and construction services also remanded for fresh examination of work orders. Matter disposed through remand for comprehensive review of documentary evidence and precise determination of tax liability periods.
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• CENVAT Credit Allowed on ATD After Verification But Denied for Rent-A-Cab Services Under Input Service Rules

  Case-Laws - AT : CESTAT partially allowed appeal concerning CENVAT credit disputes. Matter regarding CENVAT credit on Advice of Transfer Debit (ATD) remanded to original authority for reconsideration, following precedent that procedural lapses alone cannot justify credit denial when duty payment and equipment usage are verified. Interest and penalty determination linked to ATD credit admissibility also remanded. However, tribunal upheld denial of CENVAT credit on rent-a-cab services, with associated interest and penalties, following Bombay HC precedent that employee transportation constitutes personal service and cannot qualify as "input service" post April 2011 amendment. Original authority directed to reassess ATD-related credits while maintaining disallowance of rent-a-cab service credits.
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Central Excise

• Rectification Application Under Section 35C(2) Rejected Due to Six-Month Limitation Period Cannot Be Extended

  Case-Laws - HC : HC upheld rejection of rectification application filed under Section 35C(2) of Central Excise Act, 1944. Following precedent set in Hongo India Pvt Ltd case, court affirmed that statutory time limits for rectification applications cannot be extended beyond six months prescribed period. Post-2002 amendment reduced time limit from four years to six months for rectification of apparent mistakes in Tribunal orders. Tribunal lacks discretionary power to condone delays beyond statutory period, as Section 5 of Limitation Act remains excluded. Absence of explicit provision for condonation of delay in Section 35C(2) means strict adherence to six-month limitation. Appeal dismissed as Tribunal acted within jurisdictional bounds in rejecting time-barred application.
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• Sales Tax Amounts Retained Under State Deferment Scheme Must Be Added to Transaction Value for Excise Duty Under Section 4

  Case-Laws - AT : CESTAT determined that sales tax/VAT amounts retained by appellant under state government's deferment scheme must be included in transaction value for computing central excise duty under Section 4 of Central Excise Act, 1944. This follows established precedent regarding inclusion of retained tax portions in assessable value. However, extended period of limitation was deemed unjustified as department failed to prove suppression of material facts with intent to evade duty. Issue involved legal interpretation rather than deliberate evasion. Final ruling confirmed demand for normal period with interest and cum-duty benefit, without penalties. Extended period demand was set aside. Matter concerned tax retention under state concession scheme and its treatment under central excise valuation.
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• Add-on Cards and Motherboards Classified Under Chapter 8473 at 20% Duty Rate Instead of 8471.00

  Case-Laws - AT : CESTAT rejected the appeal regarding classification of Add-on Cards, affirming their classification under Chapter Heading 8473 of Central Excise Tariff Act, 1985, attracting 20% duty rather than under 8471.00 (15% duty). The Tribunal determined that Add-on Cards and motherboards are not automatic data processing machines but rather parts and accessories suitable for use with machines under Heading 84.71. The demand for duty was confirmed, though without interest payment requirement under Section 11AB of Central Excise Act, 1944, as this provision became applicable only from 28.09.1996. The penalty initially imposed was set aside in the final ruling.
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Case Laws:

• GST

• 2025 (2) TMI 303
  Interpretation of statute - section (4) of Section 107 of the Central Goods and Services Tax Act, 2017 - whether the period of three months mentioned in sub-section (1) and the period of one month under sub-section (4) of Section 107 of the Act of 2017 is liable to be interpreted as a period of ninety days and thirty days respectively as has been held by the learned appellate authority? HELD THAT:- On a bare reading of sub-section (1) of Section 107 of the Act of 2017, it would appear that the prescribed period for filing an appeal before the appellate authority against an order of the adjudicating authority is three months from the date on which the said decision or order is communicated to the said person. It is also evident that under sub-section (4), the appellate authority has power to condone a delay of further period of one month if the appellate authority is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months. In a recent judgment, in case of State of West Bengal vs. Rajpath Contractors and Engineers Ltd., [ 2024 (7) TMI 457 - SUPREME COURT] the Hon ble Supreme Court considered sub-section 3 of Section 34 of the Arbitration and Consolidation Act, 1996 and Section 4 of the Limitation Act. In the said case it was found that the award made by the Arbitral Tribunal on 30th of June, 2022 was served upon the appellant on the same day. The period of limitation for filing petition under sub-section 3 of Section 34 is three months from the date on which the party making the application had received the arbitral award or, if a request had been made under Section 33 of the Arbitratioin Act, from the date on which that request had been disposed off by the Arbitral Tribunal. The starting point of the period of limitation was 1st of July, 2022, therefore, it was held that the last day of the period of three months i.e. 30th September, 2022 would be the period of limitation. There are no iota of doubt that in the present case, the three months period from the date of receipt of the order of the adjudicating authority expired on 27.03.2024. The appellant could have preferred an appeal within a further period of one month i.e. 27.04.2024 showing sufficient cause to the appellate authority to satisfy him that the appellant was prevented by sufficient cause from presenting the appeal within the further period of one month. In this case, the appeal was preferred on 26.04.2024, therefore, the appellate authority was required to consider the cause shown by the appellant to condone the delay. Conclusion - The appellate authority has completely erred in appreciating the legislative scheme under Section 107 of the CGST/BGST Act. The legislatures have clearly provided in wisdom that the period of limitation for filing the appeal would be three months and it may be presented within a further period of one month subject to showing sufficient cause to the appellate authority for not preferring the appeal within the prescribed period of limitation. Application allowed.

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• 2025 (2) TMI 302
  Rrefund of the input tax credit for the periods prior to 18.07.2022 - validity and applicability of Circular No. 181/13/2022-GST, dated 10.11.2022 - HELD THAT:- As per sub-section (3) of Section 54, any registered person who is supplying any kind of goods would be entitled for refund of input tax credit once the rate of tax on inputs is higher than the rate of tax on the output supply made by him. However, the very same provision also stipulates that the Government, on the recommendations of the council, can notify goods which would not be eligible for such refund. In the present case, the Government, by Notification No. 5/2017 dated 28.07.2017, had initially set out a list of goods which would not be eligible for claiming refund under Section 54 of the CGST Act. Subsequently, this list was increased by inclusion of various other goods, by Notification No. 9/2022 dated 13.07.2022. The goods, so included, were various kinds of edible oils and specialty fats apart from coal, lignite etc. This notification came into force on 18.07.2022. This Court would hold that once a stipulation is made that the notification, in question, operates from 18.07.2022, it would mean that any input tax credit which arose on account of the mismatch between the input tax and the output tax, prior to 18.07.2022, can always be recovered by the registered person, by making an application under Section 54 of the CGST Act. Circular No. 181/13/2022-GST, dated 10.11.2022, would have to be struck down, to the extent of the clarification that the restriction imposed by the Notification, dated 13.07.2022, would be applicable in respect of all refund applications filed on or after 18.07.2022. Conclusion - The impugned orders of rejection of refund are set aside and the said respondents are required to reconsider the said applications, in terms of Section 54 of the CGST Act and without relying upon the clarification issued in Circular No. 181/13/22-GST, dated 10.11.2022, for non-suiting the petitioners herein. These Writ Petitions are allowed.

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• 2025 (2) TMI 301
  Time limitation - Issuance of the show cause notice without pre-consultation - exemption from service tax, for service provided by the petitioner under N/N. 25/2012 - proceedings were barred by limitation under Section 73 of the Finance Act, 1994 - HELD THAT:- What is the requirement to prove fraud and collusion is the intent to evade duty. How to gather this intention or judge it would remain a question of fact and this issue as to whether it is a case of fraud, or wilful mis-statement, collusion or is falling under any of the clauses (a) to (b) of the proviso to sub-Section (1) of Section 73 may be properly adjudicated by either the Adjudicating authority or the Appellate Authority with reference to the materials on the record. This Court would not usurp the powers of the Appellate Authority. This Court sitting under Article 226 of the Constitution of India would refrain itself as a matter of self-restraint in conducting an enquiry as to whether it is a case of fraud or not. It is left open to be considered by Appellate Authority. On a bare reading of sub-Section (1) of Section 73 that the period of limitation for serving a notice under this provision was 18 months at the relevant time but the proviso to sub-Section (1) carves out an exception and it clearly provides that in the cases falling under any one of the reasons stated under clauses (a) to (e) of the proviso, the provisions of the sub-Section shall have effect, as if for the words 18 months , the words five years have been substituted. Since the initiation of proceeding itself has been done taking this case as one of evasion of tax, the respondents have rightly argued that the period of limitation in this case would be five years - No doubt the legislative intent is that the Central Excise Commissioner shall determine the amount of service tax due under sub-Section (2) (a) within six months from the date of issue of notice where it is possible to do so, in respect of cases falling under Sub-Section (1); (b) within one year from the date of notice where it is possible to do so in respect of cases falling under the proviso to sub-Section (1), the cluster of words where it is possible to do so clearly indicates that the legislatures were never of the view that a proceeding which would not be concluded within the period of limitation for whatever reasons would be closed by virtue of the expiry of the period of limitation alone. Section 74 (1) of CGST Act cannot be invoked merely on account of non-payment of GST, without specific element of fraud or wilful mis-statement or suppression of facts to evade tax. It further provides that only in the cases where the investigation indicates that there is material evidence of fraud or wilful mis-statement or suppression of fact to evade tax on the part of the taxpayer, provisions of Section 74 (1) of the CGST Act may be invoked for issuance of show cause notice and such evidence should also be made a part of the show cause notice. No fault may be found on the part of the competent authority in forming of a reasonable belief in absence of a response by the petitioner - it is not a fit case to interfere with the impugned order in original (Annexure P2 ) in exercise of the writ jurisdiction of this Court. Conclusion - i) The pre-show cause consultation requirement is not mandatory in cases involving allegations of tax evasion. ii) The extended limitation period under Section 73(1) applies when proceedings are initiated on grounds of evasion, fraud, or suppression of facts. The writ application was not maintainable due to the availability of an appellate remedy.

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• 2025 (2) TMI 300
  Challenge to impugned order - claim of excess input tax credit on inward RCM supplies in GSTR 3B than the actual reverse charge liability declared and paid - the petitioner is ready and willing to pay 25% of the disputed tax - HELD THAT:- The petitioner shall deposit 25% of the disputed taxes as admitted by the learned counsel for the petitioner and the respondent, within a period of four weeks from the date of receipt of a copy of this order. The impugned order dated 14.11.2023 is set aside - Petition disposed off.

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• 2025 (2) TMI 299
  Refund of the amount paid towards ocean freight which is held to be unconstitutional - reverse charge mechanism - violation of Article 225 of the Constitution of India - HELD THAT:- In view of the facts of the case, it is undisputed fact that the petitioner is entitled to the refund of both IGST and Service Tax paid by the petitioner on the ocean freight in view of the decision of this Court in case of Mohit Minerals Private Limited [ 2022 (5) TMI 968 - SUPREME COURT ] which is affirmed by the Hon ble Supreme Court and in view of the orders passed by this Court in the Writ Petitions filed by the petitioner for refund of such amount which was collected by the respondent-Authorities under Notification No.10 of 2017 which was held to be unconstitutional. Considering the averments made in the affidavit together with the Board Resolution of the petitioner-Company, it is amply clear that the petitioner is not at all interested in having unjust enrichment over the amount of refund and the petitioner is to refund the same to the consumers who have borne the loss of such amount of tax which was passed on by the petitioner by including the same in the tarrif charged by it. The consumers of the petitioner have suffered the real loss who can claim the refund of the amount of the IGST and the Service Tax paid by the petitioner, however, such persons are now being represented by the petitioner as a custodian of its consumer and the methodology by which the petitioner has come forward by keeping the amount of refund in a seperate bank account to be considered as a revenue in the tarrif determination by the Gujarat Electricity Board as per the provisions of the Electricity Act, 2003, it cannot be said that it is not possible to refund the amount to such consumers for one or other reason. Therefore, it would not be just and appropriate that the respondent- Authorities can retain the amount of refund by transferring the same to the Consumer Welfare Fund. Conclusion - The refund is only permissible if the petitioner has not passed on the tax burden to others or if the refund can be effectively returned to those who bore the burden. The orders transferring the refund amount to the Consumer Welfare Fund quashed. The impugned orders passed by the respondent-Authorities, so far as it relates to transfer of the amount of refund of Rs.19 Crores and 4 Crores to the Consumer Welfare Fund, are hereby quashed and set aside - The respondent-Authorities are directed to refund the aforesaid amount to the petitioner within a period of two weeks from the date of receipt of the copy of this order. Petition allowed.

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• 2025 (2) TMI 298
  Taxability of supply of man power services to PHE Department in terms of Serial No 3 of Notification no. 12/2017-State Tax (Rate) vide 1136 F.T. dated 28.06.2017 - HELD THAT:- The term pure services has not been defined under the GST Act. However, a bare reading of the description of services as specified in entry serial number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, denotes supply of services which does not involve any supply of goods can be regarded as pure services. The applicant has submitted that as per the work order issued to him by PHE, he provides manpower services of 583 Junior Engineers for executing JAL JEEVAN MISSION Project. It prima facie appears that the aforesaid supply doesn t involve any transfer of materials in goods. The supply of services as provided by the applicant is pure services. The second condition i.e., whether the applicant provides services to the Central Government, State Government or Union Territory or local authority. Both the work order and the letter bearing memo no 1919/RS dated 15.07.2024 submitted by the applicant issued by Directorate of Public Health Engineering, Govt of West Bengal. It transpires from above that the applicant provides the aforesaid services to Government of West Bengal. The first and second conditions i.e., the supply of services can be regarded as pure supply of goods and services and having been provided to the State Government get satisfied. Whether the said services are in relation to any functions entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India? - HELD THAT:- The functions entrusted to a Panchayat or to a municipality as listed in the Eleventh and/or Twelfth Schedule includes the functions like drinking water or water supply for domestic, industrial and commercial purposes. Thus, the services as provided by the applicant for supply of data entry operator junior engineer (System Administrator, Software Support Personnel) throughout the West Bengal in connection with JJM is found to be covered by the subject matter as listed in the Eleventh and/or Twelfth Schedule thereby can be regarded as a supply in relation to functions entrusted to a Panchayat under article 243G and/or to a municipality under article 243W of the Constitution of India. Conclusion - Supplies of data entry operator junior engineer (System Administrator, Software Support Personnel) made by the applicant to the Public Health Engineering Department (PHE), Government of West Bengal for executing Jal Jeevan Mission is exempted from payment of tax vide serial number 3 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 [corresponding State Notification No. 1136 F.T. dated 28.06.2017], as amended.

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• 2025 (2) TMI 297
  Exemption from GST - Pure services or not - services provided by the applicant to the Directorate of Public Health Engineering, Government of West Bengal - applicant provides services to the Central Government, State Government or Union Territory or local authority? - said services are in relation to any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India? Whether the instant supply of services can be regarded as pure services? - HELD THAT:- From the copies of work orders issued by the Directorate of Public Health Engineering, Government of West Bengal as produced at the stage of hearing, we find that the applicant has been awarded with the work of providing technological support for smooth running of water distribution networks for the Directorate of Public Health Engineering, Government of West Bengal which plays a key role under Jal Jeevan Mission for supplying safe drinking tap water to every household in Bengal. The scope of works involves up-gradation and maintenance of integrated water quality management information system, overall coordination, supervision, handholding support, data management, digital scrutinization of pipeline alignment and asset evaluation and data collection from field through WB-JJM mobile application, design of mobile app, web application etc. - considering the scope of works being undertaken by the applicant, it appears prima facie that the supply doesn t involve any transfer of materials in goods. The supply of services as pure services. Whether the applicant provides services to the Central Government, State Government or Union Territory or local authority? - HELD THAT:- As the work orders have been issued from Nadia Division, Burdwan Division and Resource Division of Public Health Engineering Directorate, Government of West Bengal, admittedly the applicant provides the aforesaid services to Government of West Bengal. It is found that the first and second criteria i.e., the supply of services can be regarded as pure services and having been provided to the State Government get satisfied. Whether the said services are in relation to any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India? - HELD THAT:- The services being provided by the applicant for designing and development of Web and mobile based applications; Designing and drawing of GIS mapping and analysis; Digital or Analog surveying; Relevant Data management, analysis and documentation and other technical consultancy are in relation to the functions entrusted to a Panchayat or to a municipality as listed in the Eleventh and/or Twelfth Schedule which inter alia includes drinking water or water supply for domestic, industrial and commercial purposes. The Nadia Division and Burdwan Division of the PHE Department are not independent entities; they are merely a divisional office of the Directorate of Public Health Engineering (PHED), Government of West Bengal. These divisions function under the State Government to manage public water distribution networks and related infrastructure within their geographical jurisdictions. Supply of services against work order issued by the said divisions would therefore be regarded as supply to the State Government. Conclusion - i) The services provided by the applicant to the Directorate of Public Health Engineering are exempt from GST as pure services. ii) The same exemption applies to services provided to the Nadia Division and Burdwan Division of the PHED. iii) The question of classification and tax rate if exemption is denied is not applicable.

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• Income Tax

• 2025 (2) TMI 309
  Revision u/s 263 - as per CIT Assessment Order was passed without making inquiries or verification, which would have been made in respect of disallowance u/s 14A read with Rule 8D of the Rules as prescribed - HELD THAT:- It is not in dispute that during the course of the regular assessment carried out under Section 143 (3) of the Act, the queries were raised with regard to the issue of disallowance under Section 140 of the Act with Rule 8D of the Rules and the petitioner was called upon to furnish the details of expenses claimed in respect of any exempt income, working of disallowance under Section 14A of the Act and the petitioner has furnished such information in the reply filed during the course of the assessment proceeding. Therefore, it appears that during the course of the regular assessment, the Assessing Officer has accepted the explanation and reply filed by the petitioner and the return income was accepted. AO was not required to record any reason for not making any disallowance u/s 14A of the Act while passing the Assessment Order. The impugned show-cause notices and impugned orders cannot be sustained. The petitions therefore succeed and are accordingly allowed.

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• 2025 (2) TMI 308
  Reopening of assessment u/s 147 - mere change of opinion - HELD THAT:- As the AO has failed to provide the details of mismatch on the basis of Bank Remittance Data obtained from the Jammu Kashmir Bank and in absence of an opportunity of hearing provided to the petitioner, the impugned notice dated 31.03.2022 issued under Section 148 of the Act is apparently without jurisdiction. Decided in favour of assessee.

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• 2025 (2) TMI 307
  Validity of reassessment proceedings - reply filed by the petitioner is not considered while passing the impugned order holding that it is a fit case to reopen the assessment - denial of the adjournment requested by the petitioner HELD THAT:- It is clear that the AO which could not have rejected the adjournment sought for by the petitioner as provided in the said provision and could have granted the time to the petitioner as the last date for issuance of notice u/s 148 was on 31.3.2022. Petitioner had already filed the detailed reply on 22nd March, 2022 could also have been considered by the respondent while passing the impugned order holding that it is a fit case to reopen the assessment without considering the reply filed by the petitioner containing more than 500 pages. The impugned order passed u/s 148A (d) of the Act dated 30th March, 2022 and the notice issued u/s 148 of the Act dated 31st March, 2022 are hereby quashed and set aside. The matter is remanded back to the AO to furnish the information in his possession which is the basis for issuance of the notice under Section 148A (b) of the Act so as to enable the petitioner to file further reply if required, in addition to the reply filed on 22nd March, 2022. After considering the reply dated 22nd March, 2022 and further reply which may be filed by the petitioner on receipt of the information from AO, the fresh denovo order u/s 148A (d) of the Act shall be passed in accordance with law.

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• 2025 (2) TMI 306
  Reopening of assessment u/s 147 - Slump Sale - reopening beyond four years - HELD THAT:- Information received in the 2018 to the effect that the holding Company of the petitioner, in the application filed before the Settlement Commission submitted that the accommodation entries for purchase of capital assets were obtained by it. When the petitioner has already paid a lumpsum price of Rs. 554 crore to acquire the injectable unit as a going concern on Slump Sale basis, the petitioner is not at all concerned with the amount of cost of such assets being reflected in the books of accounts of the seller and the petitioner is only required to claim the depreciation on the amount of consideration paid by it to acquire the going concern on Slump Sale basis without considering the individual value of the assets, which are duly reflected in the schedule to the Slump Sale Agreement as well as in the valuation report. Therefore, the entire basis on which the reasons recorded is dehors the basic concept of Slump Sale which the petitioner and the acquisition of the injectable unit by the petitioner from its holding Company as a going concern for Rs. 554 crore. The reasons recorded pertaining to the submission made by the holding Company of the petitioner before the Settlement Commission so as to disallow the depreciation claimed by the petitioner on such submission of accommodation entry for purchase of the capital assets on the WDV of such capital assets, it would be without any basis as the claim of depreciation made by the petitioner has nothing to do with the WDV reflected in the books of accounts of M/s. Claris Lifesciences Pvt. Ltd. as the petitioner is entitled to depreciation on the basis of the valuation made by the expert valuer of each of the assets forming part of the sale consideration of the Rs. 55 crore and the balance is treated as a goodwill upon which the depreciation was allowed by the AO at the rate of 25% during the course of the regular assessment as per the provisions of the Act. Therefore, we are of the opinion that the AO could not have assumed the jurisdiction on such to form a reason to believe that income has escaped the assessment. The decisions relied upon by on behalf of the respondent are either pertaining to the transaction of bogus purchase or transaction of bogus loan obtained by the respective assessee in the facts of the said cases, which would not be applicable in the facts of this case as there is no dispute with regard to the petitioner entering into transaction of Slump Sale to acquire the injectable unit as a going concern from its holding Company. All the impugned notices are quashed and set aside.

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• 2025 (2) TMI 305
  Validity of assessment passed within time limit provided u/s 144C(13) or not? - HELD THAT:- As decided in Rapsican Systems Pvt. Ltd. [ 2025 (1) TMI 599 - TELANGANA HIGH COURT] wherein emphasized that the time limit provided under Section 144C(13) is mandatory and that the final order is required to be passed within the prescribed time under the Act. In the present case, no contrary evidence was filed by the Revenue or brought to the notice that the order passed by the DRP was not received on the date when it was uploaded on the Portal i.e., on 22.05.2024. Therefore, we presume that the date of communication of the DRP s directions is 22.05.2024. AO received the TPO s order giving effect on 12.06.2024 and still had sufficient time to pass the consequential order u/s 144C(13) on or before 30.06.2024. AO passed the order only on 19.07.2024, which is beyond the statutory time limit. Therefore, in our considered opinion, the order passed by the AO is barred by limitation and is liable to be quashed. Appeal filed by the assessee is allowed.

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• 2025 (2) TMI 304
  Income tax proceedings against company dissolved - HELD THAT:- Insolvency proceedings establish that the impugned assessment order was framed on 27/09/2021 and during the insolvency proceedings income tax Department was informed by the resolution professional and only claim with regard to TDS violation of Rs. 10.14 Cr. was filed. The same was also not accepted in insolvency proceedings and even appeal by the department stands dismissed by the NCLAT. The resolution plan as adopted, specifically, held that all dues of the revenue department in relation to any period prior to the closing date, which the date of approval of resolution plan by NCLT, shall stand extinguished. The law in this regard is quite settled now and we have no hesitation to hold that the impugned assessment order is not left with any legal sanctity and enforceability under law. The grounds of challenge of the order of ld. CIT(A) by the department no more survive.

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• 2025 (2) TMI 296
  Validity of the order passed by ITAT - contravention of the well settled jurisprudential principles of natural justice - As alleged order of the NFAC was an ex-parte order, as it was passed in absence of a hearing being granted to the petitioner/his representative. HELD THAT:- Violation of the settled principles of natural justice is not just apparent but real, palpable and clearly visible. The petitioner is deprived of an opportunity to present its case not only before the respondent no. 2 but also subsequently before the ITAT. In not affording a reasonable opportunity to the petitioner to present its case had perpetuated from the ex-parte order passed by respondent no. 2 which in our opinion was not noticed by the ITAT in passing the impugned order. Not disputed that the jurisdictional assessing officer, i.e., respondent no. 2 under the faceless regime passed an ex-parte assessment order, without affording an opportunity to the petitioner of being heard. Thus, evaluation of assessment of the petitioner s income and rejecting the submissions of the petitioner was undertaken also ought to have been appropriately undertaken by following the natural rules of fairness adhering to the principles of natural justice and such infirmity at least should have been addressed by the ITAT in passing the impugned order. A perusal of the impugned order of the ITAT makes it clear that it proceeded to deal with the case of the petitioner on merits as is evident from paragraph 5 of its order. The petitioner submitted that considering the fact that the order impugned before the ITAT itself was passed by respondent no. 2 was passed ex-parte, it would be just and proper for the ITAT to remand the matter to respondent no. 2 for passing orders on merits, after considering submissions of the petitioner. Also, the written submissions being tendered on behalf of the petitioner before the ITAT on 12 March 2024 the same appear to have not being considered in the impugned order being passed by the Tribunal. We accordingly remand the proceedings to the ITAT, i.e., respondent no. 1 for de novo hearing of the petitioner s appeal filed before it. ITAT shall after hearing the parties, pass fresh orders on merits.

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• 2025 (2) TMI 295
  Condonation of delay in filing an audit report - client was late by 1 hour, 19 minutes and 16 seconds in uploading the audit report - As per revenue reasons mentioned for delay are not sufficient and it was not a fit case for condoning delay in exercise of power u/s 119 (2) (b) HELD THAT:- The authority considered reason given by petitioner for the delay to be mere asking on the basis of vague assertion without proof. Required proof, therefore, is reason for technical glitch causing delay in uploading the report. The delay is of 1 hour, 19 minutes and 16 seconds. The report stood uploaded beyond midnight of the last date, at 1:19 and 16 seconds in the following morning of 1st November, 2023. Where the pressure of meeting the timeline expiring in a few hours or minutes, there may have been mistakes made in uploading, attributed by petitioner as technical glitch. Even assuming such was the case, the report stood uploaded beyond midnight of the last date by 1 hour, 19 minutes and 16 seconds. There has to be pragmatic approach in exercising power to enlarge time. Here the time overrun over is a little more than an hour, on the report uploaded in the wee hours of the next day, 1st November, 2023. We cannot imagine the delay would have hampered work of revenue in dealing with the report. It is clear to us that impugned order is perverse. As such we have dealt with the writ petition without granting adjournment.

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• 2025 (2) TMI 294
  Appeal submitted manually, instead of electronically - writ petition against impugned attachment order passed pursuant to dismissal of his appeal - HELD THAT:- We do see that the Income Tax Appellate Tribunal in Mumbai had dealt with the situation by requiring appellant therein to file the appeal with accompanying direction on condonation of delay. In this case petitioner has causes for consideration and satisfaction obtained, to apply on filing e-appeal, for condonation of delay in not having so filed earlier. Fact of appeal filed manually within time is a relevant fact to be considered. There is apprehension expressed on whether the portal will allow such appeal being uploaded. Petitioner has leave to produce certified copy of this order and seek facilitation from appropriate department in revenue, for preferring the appeal. In event the appeal is uploaded on or prior to 24th February, 2025, impugned attachment order will stand set aside and quashed leaving the First Appellate Authority to proceed with adjudication on condonation of delay and, if satisfied, to admit the appeal and adjudicate thereon. There is also involved assessment year 2012- 13 in impugned attachment notice, appeal against which was decided on merits. Our direction regarding stay of operation of impugned attachment notice is excluding the attachment pursuant to First Appellate order in respect of assessment year 2012-13. We record that we have not adjudicated on the particular challenge, for petitioner to separately agitate, if permissible in law. Petitioner is left to find remedy regarding order made by the FAA in respect of assessment year 2012-13, including by preferring appeal to the Tribunal.

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• 2025 (2) TMI 293
  Disallowance of 25% of total other expenses on an ad-hoc basis - assessee s failure to produce complete supporting documents during the assessment proceedings - CIT(A) deleted addition - HELD THAT:- It is well settled by various judicial precedents that an ad-hoc disallowance without identifying specific defects is legally unsustainable. In the case of ACIT vs. Anu Bajaj [ 2024 (6) TMI 1208 - ITAT DELHI] held that if relief is granted based on the AO s own remand report, the Revenue is precluded from challenging the same before the Tribunal. DR has merely relied on the assessment order of the AO without providing any new arguments to support the disallowance. Since the AO s own remand report does not justify the ad-hoc addition, we find that the CIT(A) rightly deleted the disallowance. Accordingly, we find no infirmity in the order of the CIT(A) in deleting the addition - Appeal filed by the Revenue is dismissed.

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• 2025 (2) TMI 292
  Bogus LTCG - unearthed accommodation entry operations in penny stocks - onus to prove - AO rejected the argument that the purchase and sale were genuine and concluded that penny stock frauds operate as an ecosystem - LTCG was treated as unexplained cash credit u/s 68 - CIT(A) deleted the addition, holding that the assessee had furnished all supporting documents such as bank statements, contract notes, Demat account records, and audited financials, proving the genuineness of the transaction. HELD THAT:- In the present case, the assessee has duly discharged the onus by producing all necessary evidence, and the Revenue has failed to rebut them with substantive material. AO has neither examined the counterparty to establish collusion nor provided any direct evidence of price rigging. The addition, therefore, appears to be made on the basis of suspicion and generalization rather than concrete facts. No reason to interfere with the well-reasoned order of the CIT(A). Revenue has failed to establish that the LTCG earned by the assessee is non-genuine, and the addition made under Section 68 is unsustainable. Decided against revenue.

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• 2025 (2) TMI 291
  Proceedings u/s 153C or 147/148 - incriminating material seized during a search operation - HELD THAT:- AO had to proceed u/s 153C of the Act, instead of section 147/148 of the Act, the reason being that the proceedings were initiated on the basis of incriminating material in the form of documents including pen-drives seized during search at the premises of the above named group, as well as statements recorded during said proceedings. Today, when the appeal has been taken up for hearing, assessee has submitted copy of notice u/s 153C of the Act issued by Assistant Commissioner of Income Tax, Central Circle-4, Jaipur, relating to the same assessment year 2011-12 whereby the assessee has been required to prepare true and correct return of his total income for the said assessment years.

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• 2025 (2) TMI 290
  Rejection of books of accounts - GP estimation - HELD THAT:- AO has rejected accounts and estimated the GP in respect of turnover shown by the assessee, hence, CIT(A) has taken a correct view that once the books of accounts are rejected, it does not warrant any adhoc addition. Accordingly, he rightly restricted the GP @ 1% instead of 1.5% estimated by the AO. During the hearing, both the parties fairly agreed that restricting the GP @1% by the Ld. CIT(A) serves the end of justice, which does not need any interference.

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• 2025 (2) TMI 289
  Addition u/s 56(2)(x) - difference between the agreement value and the stamp value - HELD THAT:-Admittedly, the safe harbour applicable for year under consideration is 3%. There is no doubt that the difference between originally agreed price vis- -vis the actual price in to the facts of the present case, as per the registered agreement for sale dated 18/11/2017 is 1.5%. CBDT vide circular number 8/2018 explained the intention of rationalisation in section 43CA, section 50C and section 56 of the act, explaining bona fide variation and the undue hardships faced by assessee s. In the present facts of the case though we need not look into the reason behind the bona fides variation, it is apparent that the builder was called upon wide press release to accommodate the purchasers in respect of transferring the benefit of the GST by including the same in the total value of consideration. As a result of which the value that was all generally agreed had to include the GST was payable by the purchasers. Such an adjustment cannot anyway fall within the ambit of section 56(2)(x) of the act. The provisions u/s 56(2)(x) of the act was introduced to curb the practice of receiving any property without consideration or for inadequate consideration by resorting to the registered valuation as per the stamp authorities. We do not find any such intention in the present facts of the case in order to invoke the provisions of section 56(2)(x) of the act and therefore the addition made by the authorities below cannot be upheld. Decided in favour of assessee.

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• 2025 (2) TMI 288
  Validity of the assessment made u/s 143(3) - search and seizure operations on a third party - HELD THAT:- Issue decided in Arti Dhall [ 2025 (1) TMI 1407 - ITAT DELHI ] wherein held since the assessment was made pursuant to search and based on materials found in the course of search, the assessment in the case of the Assessee being the person other than the searched person should have been made u/s 153C of the Act instead of regular assessment u/s 143(3) and therefore the assessment made u/s 143(3) is void ab initio. Decided in favour of assessee.

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• 2025 (2) TMI 287
  Nature of expenditure - Disallowance of Finance Lease Rental Payments - AO treated it as Capital Expenditure for payment of Finance Lease Rental Payments - CIT(A) deleted addition - assessee s claim of deduction of Finance Lease Rental Payment under section 37(1) - HELD THAT:- Considering the decision of the Hon ble Karnataka High Court in lessor s case [ 2021 (7) TMI 121 - KARNATAKA HIGH COURT ] the claim of deduction of Finance Lease Rental Payment under section 37(1) of the Act has been allowed to the assessee by the coordinate bench for the year under consideration, the present appeal by the Revenue challenging the findings of the learned CIT(A) in allowing depreciation in the hands of the assessee has become infructuous and, therefore, is dismissed accordingly. Appeal by the Revenue is dismissed.

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• 2025 (2) TMI 286
  Penalty order u/s 270A - exemption on leave salary received on voluntary retirement u/s 10(10AA) - Whether claim of exemption is debatable? - whether word may be is discretionary and not mandatory? HELD THAT:- Government of India, Ministry of Communication and IT Department of Telecommunication vide their dated 19.01.2004 had permanently absorbed the assessee in MTNL (PSU), a the Government of India undertaking with effect from 01.10.2000 in accordance with the provisions of Rule 37A-A of CCs(Pension) Rules. In these scenario the return was revised by the assessee. Therefore, the belief under which full exemption of retirement benefit claimed in the revised ITR which was bona fide and not synthetic one and the genuine explanation offered by the appellant in support of her mistaken but bona fide belief and disclosed all material facts of her service the circumstance which swayed to claim full exemption in her revised ITR. Imposition of penalty is at the discretion of Ld. AO, since sub-section (1) of section 270A refers to the word may and not as shall . The word may used in sub-section (1) of section 270A shall have to be read as an enabling discretionary provision and not mandatory. The legislature has in its wisdom and foresight refrained from using the word shall . The interpretation of the word may as shall will lead to consequences which are never intended by the legislature. It will also lead to disastrous consequences. From another angle, we observe that the word bona fide in clause (a) of sub-section (6) of section 270A itself shows that the word may be is discretionary and not mandatory. AO in the assessment order while refusing to partial claim on merits has relied upon the judgments of Officers Supervisors of I.D.P.L Vs Chairman M.D.I.D.P.L. [ 2003 (7) TMI 733 - SUPREME COURT] and K. Bindal [ 2003 (4) TMI 406 - SUPREME COURT] interpreting the legal rights of the employees of the government companies/PSUs and government employees. Hence, the issue of claim of leave encashment was not free from shadow while filing the revised return by the assessee. We set-aside the impugned order of Ld. NFAC and quashed the order of penalty. Decided in favour of assessee.

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• 2025 (2) TMI 285
  Denial of deduction claimed u/s 80IA - treating the assessee as a contractor - HELD THAT:- The assessee was only awarded the contract for design and construction of tunnel as specified in the tender document and the job of the assessee was over when the construction of tunnel was done as per the design approved. Assessee also does not fulfil the condition that the agreement has to be with Central Government/ State Government / Local Authority/Statutory Authority as LMRCL, does not fit in any of them. It can be seen from the record that LMRCL was incorporated on 25/11/2013 under the Companies Act, 1956 as a special purpose vehicle between the Central and State Government with equity share of 50:50, therefore, in our understanding of the law it cannot be regarded as Central Government or State Government, nor does it fall under the definition of local authority statutory authority. It is trite law that for claiming deduction u/s 80IA(4) of the Act, all conditions have to be fulfilled cumulatively. No merit in the claim of deduction u/s 80IA and the lower authorities have not faulted anywhere by denying the same. Ground raised by the assessee dismissed. Disallowance of legal and professional fees (fees for technical services) paid to Gulemark TPL JV - sole reason for the disallowance is that Gulemark TPL JV, has not rendered the services, therefore, the claim was disallowed u/s 37 of the Act - HELD THAT:- The fees for technical services as claimed by the assessee has been incurred for the purpose of business and, therefore, eligible for deduction under section 37 of the Act. Moreover, the AO has never treated the said claim as capital expenditure and has accepted the same as revenue expenditure, therefore, we do not find any reason to interfere with the findings of the ld. CIT(A). Accordingly, appeals of the revenue are dismissed.

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• 2025 (2) TMI 284
  Jurisdiction from ITO-1, Ambikapur to ITO-3, Korba under Section 127 - Validity of reassessment proceedings - non serving Notice u/s.148 and without allowing opportunity to the appellant opportunity to the Appellant to explain the case - order passed by the Pr. CIT, Bilaspur u/s. 127 transferring the case of the assessee from ITO-1, Ambikapur to ITO-3, Korba Whether or not, the CIT(Appeals) is justified in refraining from adjudicating the specific grievance of the assessee that the ITO-3, Korba had wrongly assumed jurisdiction and framed the assessment vide his order passed u/s. 144 r.w.s. 147 in absence of a valid order of transfer having been passed by the Pr. CIT, Bilaspur u/s. 127 ? - HELD THAT:- Assessee had assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment u/s. 144 r.w.s. 147 on the ground that the order of transfer passed by the Pr. CIT, Bilaspur u/s. 127 of the Act was not as per the mandate of law. We unable to concur with the CIT(Appeals) that he was not vested with any jurisdiction to deal with the specific challenge raised by the assessee as regards the validity of the assessment order that was framed by the A.O de-hors a valid assumption of jurisdiction on his part in absence of an order of transfer u/s. 127 of the Act as required per the mandate of law. CIT(Appeals) ought to have taken call and adjudicated the aforesaid specific issue, instead of refraining from dealing with the same, which, thus, had resulted to multiplicity of litigation and pushed the assessee into further litigation on the said issue. Accordingly, not being able to persuade to concur with the view taken by the CIT(Appeals) restore the matter to his file with a direction to adjudicate the challenge thrown by the assessee as regards the validity of the jurisdiction that was assumed by the A.O for framing of the assessment vide his order passed u/s. 144 r.w.s. 147 of the Act dated 16.12.2018 de-hors an order of transfer u/s. 127 of the Act passed by the Pr. CIT, Bilaspur as per the mandate of law. Thus, the Ground of appeal No.2 raised by the assessee is allowed for statistical purposes

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• 2025 (2) TMI 283
  Additional Income surrendered tax liability u/s 115BBE - As per AO assessee has failed to deposit the tax as per the additional income as per the provision of Section 115BBE - at both the stages below i.e. before ld. AO and before CIT(A), the assessee has remained dormant and has not effectively pursued anything - HELD THAT:- Almost both the orders of lower authorities are ex-parte meaning thereby that assessee despite opportunity after opportunity has not explained his case on merits. Consequently, there is no effective disposal of the case on merits especially before CIT(A). Accordingly, we set aside the impugned order and direct the assessee to put forth his case on merits before ld. CIT(A) as expeditiously as possible. This Tribunal desires disposal of the case on merits alongwith reasoned and speaking order which deals with core of the dispute between assessee and Revenue. The unspeaking/non speaking order by First Appellate Authority is dangerous trend and so also non participation in First Appellate Proceedings by the assessee. We do not want Tax Administration getting clogged by such trend. One more final opportunity be given to the assessee so that ends of justice are met - we set aside the impugned order with direction to assessee to avail only one more opportunity of hearing as and by way of last chance.

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• 2025 (2) TMI 282
  Unexplained investment in purchase of immovable property u/s 69 - Addition being the Fair Market Value of the property, at Oberoi Reality, purchased by the assessee - HELD THAT:- We find that there was no mistake on the part of the assessee to submit the relevant documents and evidences and explanations before the assessing officer, as well as DRP. AO as well as DRP, did not find any mistake in the documents and evidences and explanation submitted by the assessee, except to say that these documents and evidences are not acceptable. It is not tenable in the eye of law. AO and DRP, do not mention why they are not accepting these evidences, and when an assessee has all the possible evidence in support of its claim, they cannot be brushed aside based on surmises, as noted by us above, therefore, based on this score only, the addition made by the assessing officer should be deleted. Coordinate Bench of ITAT Delhi, in the case of Russian Technology Centre (P.) Ltd, [ 2013 (4) TMI 659 - ITAT DELHI] held that if identity of non-resident remitter is established and money has come in through banking channels, it cannot be treated as deemed income under section 68 or 69. in the assessee`s case under consideration, the assessee purchased the property on 25.02.2010, and major payment was made to Oberoi Realty Limited in the year 2010 itself. Therefore, it should not be taxable in the assessment year 2018 19. That is, no addition under section 69 could be made in year under consideration in respect of investment in immovable property made in earlier year(s). Money brought in India by non-resident for investment or for other purposes is not liable to tax under provisions of Act and question of assessment to income-tax arises only when there is no evidence to show that amount in question in fact represents remittance from abroad, for that reliance is based on the decision of the Coordinate Bench of ITAT Panaji in the case of Iqbal Ismail Virani, [ 2021 (3) TMI 664 - ITAT PANAJI] Thus addition made by the assessing officer/DRP needs to be deleted - Appeal of the assessee is allowed.

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• 2025 (2) TMI 281
  Exemption u/s. 10(23C)(iiiac) - As contented government grants received by the assessee during the financial year 2016-17 relevant to the assessment year 2017-18, had fallen short of the stipulated 50% of the total receipts - HELD THAT:- Interest received on the fixed deposits made out of the unspent grants also would be treated as a grant and if the said interest amount is added to the total grants received during the AY, it will exceed the 50% prescribed u/s. 10(23C)(iiiac). Therefore we found that apart from the grants received during the assessment year, the assessee is also receiving interest income on the unspent grants which is also a grant and in that circumstances, CIT(A) had granted the relief which is in accordance with law. The Ld.CIT(A) in his order had considered the said facts and also considered the fact that the assessee is an institute wholly and substantially managed by the Government of Karnataka and therefore they are entitled for deduction u/s. 10(23C)(iiiac). The assessee is eligible for exemption u/s. 10(23C)(iiiac) of the Act and also u/s. 11(2) of the Act. In these circumstances, we find no merit in the contention of the Ld.DR - Decided against revenue.

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• Customs

• 2025 (2) TMI 280
  Maintainability of petition - availability of alternative remedy - Challenge to SCN - delay in adjudication and the procedural lapses - grievance of the Petitioner is that though the SCN is of 2019, a proper personal hearing was conducted only on 25th September, 2024 - violation of principles of natural justice - HELD THAT:- The grounds which have been raised in the present writ petition can always be raised before the Appellate Authority as per the Act. The Court is of the opinion that this is not an extraordinary case for exercise of writ jurisdiction by this Court. It is, however, clarified that none of the questions of law raised have been gone into by the Court. Petition dismissed.

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• 2025 (2) TMI 279
  Provisional release of seized goods of the Petitioner under Bond with security amount, however, without any Bank Guarantee - classification of imported self-drilling bars - to be classified under Entry No. 82.07 or 73.04 of the Harmonized Commodity Description and Coding System (HSN) classification - HELD THAT:- The Court has perused the HSN classification entries as also the respective bills of entry and the description therein. The Court has also perused the judgment in Hind Global Enterprises [ 2017 (11) TMI 1125 - DELHI HIGH COURT] . In the said matter, the Coordinate Bench of this Court had observed that in cases of this nature, the Petitioner ought to invoke the appellate statutory remedy. The parties ought to avail of the appellate remedy and not rush to the Court that too invoking the extraordinary writ jurisdiction. However, in this case, the Petitioner claims to be a regular importer of the seized goods. The seized goods have been lying with the Customs Department since May 2024. The present petition is also pending for the last six months. Relegating the Petitioner to the appellate remedy at this stage would cause further delays in the release of the seized goods itself. Ultimately the classification has to be decided by the Department. The Court has considered the total value of the goods and the amount of the Bank Guarantee. The calculated amount for the bank guarantee would be substantial and may almost constitute 70-80% of the value of the goods itself. The imposition of conditions being a discretionary matter, in the facts of this case, this Court is of the opinion that it would be just and fair that apart from the Bond which has been directed, the Bank Guarantee to the tune of 30% of the differential duty be furnished by the Petitioner. Petition disposed off.

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• 2025 (2) TMI 278
  Seeking to quash SCN - Inordinate delay in adjudicating the said Show Cause Notice - HELD THAT:- Considering that the SCN has already been quashed and set aside in the case of a Co-Noticee, for the very same reasons as set out in PRADEEP SUBHASHCHANDRA MEHTA VERSUS THE UNION OF INDIA ORS. [ 2024 (11) TMI 910 - BOMBAY HIGH COURT] , there are no hesitation in following the same course of action. The impugned Show Cause Notice dated 28th March, 2013 is quashed and set aside - petition disposed off.

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• 2025 (2) TMI 277
  Assessment of two or more Shipping Bills together to determine the duty or to demand differential duty - determination of Fe content on a wet basis or dry basis - law laid down by Supreme Court in Gangadhar Narisnghdas [ 1995 (8) TMI 73 - SUPREME COURT] is required to be followed or not. HELD THAT:- Section 50 of the Customs Act requires the exporter to make an entry of the export goods by filing the Shipping Bill or Bill of Export (in case of exports by land) and section 51 of the Customs Act empowers the proper officer to give clearance for the export consignments. The Shipping Bill is not only a declaration of the goods to be exported but is also the document through which export duty, if any, is assessed. Duty must be self- assessed by the exporter and it can be re-assessed by the proper officer under section 17 of the Customs Act. The Customs Act does not empower any officer to compel anyone to file a Shipping Bill (or Bill of Entry) or to file it in any manner or forbid anyone from filing a Shipping Bill. Once a Shipping Bill is filed, the proper officer can give clearance as per section 51 if he is satisfied that the export goods are not prohibited goods and that if any export duty is to be paid, it has been paid - Nothing in the Customs Act requires a single Shipping Bill to be filed in respect of all the goods exported in the same vessel- whether the goods are stored separately or in a single hatch in the vessel. The appellants were fully within their rights and committed no error in filing two or more Shipping Bills in respect of the goods exported in a single vessel and for which a single Bill of Lading was issued by the Master of the vessel. Whether two or more Shipping Bills could be considered together and assessed? - HELD THAT:- There are no provision in the entire Customs Act for such an assessment. The exporter who wants to export goods must file a Shipping Bill (under section 50) and also self-assess the duty payable (under section 17) and the proper officer can re-assesss the duty and if the proper officer who is authorised to give clearance under section 51 (or LEO) is satisfied that the goods were not prohibited goods and the duty has been paid, he can give clearance. There is no provision under the Customs Act under which various Shipping Bills filed by an exporter can be assessed together with respect to specifics such as weight, volume, or as in this case, Fe content and with respect to determining the eligibility of any exemption notification. If the exporter is entitled to the benefit of a notification in one Shipping Bill, that benefit cannot be taken away by combining the goods exported under that shipping Bill with the goods exported under another Shipping Bill, drawing a sample of the mixture of the two goods and testing it for Fe content. The fact that the goods under both Shipping Bills were loaded in the same vessel or even in the same hatchet of the vessel or exported to the same party would make no difference. It does not give the department the power to re-determine the duty. Conversely, if after mixing the goods exported under different Shipping Bills and drawing a sample, the Fe content falls below the threshold, the exporter cannot claim exemption for all the Shipping Bills. Each Shipping Bill must be assessed individually. Basis for determination of the Fe content - whether the Fe content should be reckoned on wet basis or on dry basis? - HELD THAT:- It is evident that the case before the Supreme Court in Gangadhar Narsingdas was on identical issue and the ground taken by the Revenue that the standard testing method prescribed by ISI (now BIS) provides for determination of Fe content on dry basis were considered and rejected by the Supreme Court. When issuing the SCN, the Additional Director General and while passing the impugned order, the Commissioner of Customs (Adjudication) violated the norms of judicial discipline in not following Gangadhar Narsingdas. The facts of any case and whether goods cleared under different Shipping Bills were exported in the same vessel or the same hatchet of the vessel has no bearing whatsoever on how the Fe content should be tested (wet or dry basis). The testing methodology prescribed by ISI (now BIS) had been already taken as a ground to determine Fe on dry basis by the Revenue and was rejected by the Supreme Court in Gangadhar Narsingdas. The fact that invoicing was done on dry basis also is not relevant to the testing method because the eligibility of exemption notification cannot depend on how the invoice was issued. Conclusion - i) Each Shipping Bill or Bill of Entry has to be assessed and the Customs Act does not provide for assessing two or more Shipping Bills together. ii) The classification, valuation or determination of any other parameter relevant to assessment also has to be for each Shipping Bill or Bill of Entry. iii) No officer of Customs including the DRI officers and the Commissioner of Customs has any power under the law to assess two or more Shipping Bills together or determine the Fe content or any other parameter combining goods covered by two or more Shipping Bills, even if they are loaded in the same vessel. iv) The Bill of Lading is the document of title issued by the Master of the vessel or the shipping line to the exporter and the fact that a single Bill of Lading is issued in respect of two or more Shipping Bills does not confer any right on any officer of customs to assess two or more Shipping Bills together or to demand consequential differential duty. v) Fe content of iron ore fines for export has to be determined on wet basis as per the judgment of Supreme Court in Gangadhar Narsingdas and the CBEC s Circular that followed and the Commissioner erred in reckoning the Fe content on dry basis. The impugned order dated 30.11.2022 passed by the Commissioner cannot, therefore, be sustained and needs to be set aside - appeal allowed.

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• 2025 (2) TMI 276
  Rejection of refund claim on the ground of time limitation - section 27 of the Customs Act, 1962 - HELD THAT:- After the expiry of obligation period under EPCG, the appellant paid the amount of duty foregone vide challans dt.01.03.2017, 12.10.2017, 15.11.2017 11.12.2017 and that the refund claim was filed on 09.01.2024 which is beyond the date of payment of duty. None of the relaxations given under section 27(1B) of the Customs Act would apply to the present case. Reliance placed on the order of this Tribunal in the case of IFGL REFRACTORIES LTD VERSUS COMMISSIONER OF CENTRAL TAX, GUNTUR [ 2024 (11) TMI 807 - CESTAT HYDERABAD] , wherein the issue was that the original refund sanctioning authority, after going through the facts and submissions made by the appellant, inter alia, held the refund claim as time barred as the same was not filed before the expiry of one year period from payment of duty and interest. Conclusion - In the facts of the case, no fault can be found with the rejection of the refund claim, which has admittedly been filed beyond the limitation period under the relevant statute i.e., Customs Act, 1962 and therefore, there is no ground for interfering with the impugned order. There are no merit in the appeal filed by the appellant and the appeal is liable to be dismissed.

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• 2025 (2) TMI 275
  Imposition of penalty for non-submission of the documents as per Regulation 5 of the Customs (Provisional Duty Assessment) Regulations, 2011 - HELD THAT:- From the records it is seen that the appellant has imported goods vide 21 Bills of Entry and there was a delay in submission of the documents only in respect of four Bills of Entry, for finalisation of the provisional assessments. Subsequently, they have submitted all the documents, in respect of the remaining four Bills of Entry also, and they have been finalised. As there was a delay in submission of documents in respect of four Bills of Entry, the Department initiated proceedings for imposition of penalty under Regulation 5 of the above said Regulations 2011. In the case of M/S JAI BALAJI INDUSTRIES LTD. VERSUS COMMR. OF CUSTOMS (PREVENTIVE) , BHUBANESWAR [ 2021 (1) TMI 767 - CESTAT KOLKATA] , this Tribunal has held that The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to the maximum of Rs. 50,000/- per Bill of Entry yet to be finalised. The penalty of Rs.15,000/- imposed by the Assistant Commissioner would be sufficient to meet the ends of justice - the enhanced penalty set aside - appeal allowed.

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• 2025 (2) TMI 274
  Entitlement to the benefit of N/N. 94/96-Cus dated 16.12.1996 for the imported goods that were initially exported, returned, and not re-exported within the stipulated period - HELD THAT:- In response to the show-cause notice, the appellant submitted that the alternate benefit of N/N. 94/96-Cus. is admissible to them. The said benefit was initially denied by the adjudicating authority, but later on appeal, the learned Commissioner(Appeals), accepting the argument of the appellant, remanded the case with the direction to allow the benefit of the said notification and reassess the goods accordingly. However, without adhering to the direction of the learned Commissioner(Appeals), the adjudicating authority denied the benefit of N/N. 94/96-Cus. on the ground that once the Bill of Entry filed and goods were cleared, benefit of notification not claimed previously, cannot be claimed subsequently. The same view was upheld by the learned Commissioner(Appeals). It is found that subsequent impugned order is in contravention to the earlier direction given by the learned Commissioner(Appeals) allowing the benefit of N/N.94/96-Cus. dated 16.12.1996. In absence of any appellate order from the higher forum modifying the said direction, the Assistant Commissioner ought to have followed and allowed the benefit of the said Notification. Therefore, the observation of the learned Commissioner(Appeals) denying the benefit at this second stage cannot be sustained. Otherwise also, the appellant is entitled to the benefit of the N/N. 94/96-Cus. in view of the judgment of the Hon ble Supreme Court in the case of SHARE MEDICAL CARE VERSUS UNION OF INDIA [ 2007 (2) TMI 2 - SUPREME COURT] . Conclusion - The appellant was entitled to the benefit of Notification No.94/96-Cus, and the denial of this benefit by the adjudicating authority and the Commissioner(Appeals) was incorrect. Appeal allowed.

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• Insolvency & Bankruptcy

• 2025 (2) TMI 273
  Condonation of delay of 115 days in refiling the Company Appeal - sufficient cause for delay or not - HELD THAT:- In the present case, it is an admitted fact that defects were notified by the NCLAT Registry on 12.08.2024 with directions to cure the defects by 19.08.2024. However, the defects were cured after an efflux of 115 days. The question of condoning this delay in refiling would therefore need to be seen in the context of explanation offered as to whether the reasons causing the delay were beyond the control of the Applicant and that the defects could not be cured inspite of genuine efforts put in by the Applicant. It is noticed that one of the principal grounds adduced to explain the delay was that since the Applicant and their counsel were based out of Ahmedabad, they could not physically inspect the record in person. Equally facile is the explanation that despite constant coordination and follow up, the process of obtaining a certified copy of the impugned order took a lot of time. This feeble defence is belied by the fact that when we look at page 62 of Appeal Paper Book (APB) it is found that the date on which the application for certified copy was reapplied was 09.12.2024 and the NCLT Registry had delivered the certified copy on the same date. This clearly demonstrates that had the Applicant been serious and earnest in their efforts in pursuing the matter with the NCLT Registry, there would have been no need to wait for nearly four months to obtain certified copy of the impugned order which was pronounced as early as 21.06.2024. It is not persuaded to accept that the Applicant had been prevented by any exceptional reason beyond its control in obtaining certified copy of the impugned order in a timely fashion. It is well recognised that speed is of essence in IBC. It is a given that the need of speed is important both for insolvency as well as for liquidation process. It flows therefrom that once the liquidation process is set into motion, the liquidator is expected to act swiftly and ensure that minimal time is lost in procedural technicalities including curing of defects etc. while conducting the liquidation exercise. The initiation and closure of liquidation is a time-bound process which is to be completed within one year. A liquidator therefore has the principal responsibility of completing the liquidation process as quickly as possible by adhering to the legal regulations and time-frame set therein for conduct of the liquidation process and not allow scope of any unnecessary delay. Conclusion - The delay in refiling by nearly four months has been occasioned by rather perfunctory reasons. The Applicant is found to have remained nonchalant and callous about the need to correct the defects pointed out in the Appeal Petition by the NCLAT Registry in a timely manner. In such circumstances, allowing refiling delay condonation on such frivolous grounds would be an anathema to the timeliness and integrity of the liquidation process. There are no merit in the Application filed for seeking condonation of 115 days delay in refiling the appeal. Sufficient grounds have not been made out for condonation of delay in refiling - appeal dismissed.

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• 2025 (2) TMI 272
  Dismissal of Section 7 application filed by the Appellants on the grounds that neither debt nor default is reasonably proved - insufficient proof of debt and default - amicable settlement of disputes - HELD THAT:- The matter went through several rounds of hearing and after considering the arguments advanced by the Learned Counsels for all the parties, the matter was reserved for judgement on 19.12.2024. After the matter got reserved, the parties approached each other for amicable settlement to resolve the disputes. It has now been submitted that a Settlement Agreement dated 15.01.2025 has been entered upon. In view of the mutual settlement having been entered into between the parties, no opinion expressed on the rights and contentions of either of the parties. Nothing survives to be decided in the appeals. Hence, all the three appeals stand disposed of. No costs. Appeal disposed off.

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• 2025 (2) TMI 271
  Admission of application filed u/s 7 of the Insolvency and Bankruptcy Code, 2016 - proper service of notice or not - Notice served through two newspaper publications - declaration of the loan as a non-performing asset (NPA) by the Financial Creditor - time limitation - HELD THAT:- It is found that at no stage the Corporate Debtor had denied its liability to pay to the Respondent bank. The feeble argument raised is that the publication of notice was in Kolkata editions of the newspaper, which are not readily available in Jalpaiguri, where the registered office of the Corporate Debtor is situated. However, it is found that advance notice of the application has been served on the Corporate Debtor. Further, the notice issued by the Registry through Speed Post and Email has been duly served upon the Corporate Debtor. The Corporate Debtor was admittedly served on earlier occasions and since none appeared on its behalf, it was only as an abundant caution the service by publication was ordered. Now the Corporate Debtor cannot say that earlier service was invalid or withdrawn because of reservice being ordered. It is also found that the debt and default are recorded in the records of the Information Utility (NeSL). The debt has been authenticated by NeSL with the description default submission indicating that no response had come from the Corporate Debtor. Apparently, it is the Corporate Debtor who has chosen not to join the proceedings. Even during the appeal proceedings, on query, the Corporate Debtor was unable to commit to the repayment of debt. This case meets all the ingredients required for admission under Section 7 of the IBC, 2016, including existence of debt, failure to repay the debt leading to default and application filed under Section 7 within the limitation. Conclusion - The service of notice was proper, the NPA declaration was valid, and the initiation of CIRP under Section 7 was justified, leading to the dismissal of the appeal. There are no reason to interfere in the orders of Ld. NCLT in admitting the Corporate Debtor under CIRP - appeal dismissed.

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• 2025 (2) TMI 270
  Seeking direction against the Appellant to pay the Liquidator s fee for liquidation process under the Insolvency and Bankruptcy Code, 2016 - Whether the Liquidator s fee is payable even if the Liquidator did not directly realise or distribute the secured asset? - compliance with Regulation 21A of the Liquidation Process Regulations, 2016 or not. HELD THAT:- The Appellant / Shikshak Sahakari Bank Ltd. is a Secured Creditor who decided not to relinquish security interest and opted to realise its security interest through its own proceedings under the SARFAESI Act. On 11.05.2023, the Appellant intimated the Respondent / Liquidator its intent to realise the secured asset in the manner as provided under Section 52(1)(b) of the Code and decided the reserve price to be Rs 2,24,15,000/- - The Appellant has been seeking clarifications with respect to the calculation of the liquidation cost, which has been duly replied to time and again by the Respondent / Liquidator, along with the provision of Regulation 21-A(2) and also Regulation 2(ea) of the Liquidation Process Regulations, 2016. Regulation 21-A of the Liquidation Process Regulations, 2016, mandates Secured Creditors to inform the Liquidator of their decision to realise their security interest and to pay their share of the liquidation costs within 90 days. It was agreed by the Appellant that the liquidation cost will of 2013), if any, shall not form part of liquidation cost. be shared as per Regulation 21-A but was raising clarifications regarding its calculations and which was clarified also by the liquidator again and again and this exchange was going on for quite some time. It will be clear from this provision that the Secured Creditor is mandatorily obligated to pay its share as per Section 53(1)(a) and 53(1)(b)(i) of the Code which provides for distribution of assets from the sale of liquidation assets in the order of priority. (waterfall mechanism). Further, Regulation 21A (3) of Liquidation Process Regulations, 2016, provides that where a Secured Creditor fails to comply with Sub-Regulation (2), the asset, which is subject to security interest, shall become part of the liquidation estate. Conclusion - Regulation 21-A(2)(a), which is applicable in this case. The Liquidator s fee is also prescribed under Regulation 4. Regulations 4(1) and 4(1A) provides primacy to CoC and consultation Committee. The Respondent s claim that the Liquidator is entitled for a fee under Regulation 4(2)(b) only when he has actually realised or distributed any amount is not tenable in the light of Regulation 21A. There are no infirmity in the orders of the Adjudicating Authority. Appeal dismissed.

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• PMLA

• 2025 (2) TMI 269
  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 - it was held by High Court that 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. HELD THAT:- It is not required to interfere with the impugned judgment and order of the High Court; hence, the special leave petition is dismissed.

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• 2025 (2) TMI 268
  Money Laundering - seeking grant of bail - illegal procurement of empty vials and raw materials of anti-cancer drugs such as Keytruda and Opdyta - twin conditions prescribed under Section 45 of the PMLA satisfied or not - it was held by High Court that this Court is of the view that considering the filing of the 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 the PMLA. HELD THAT:- It is not required to interfere with the impugned order - SLP dismissed.

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• 2025 (2) TMI 267
  Legality of arrest of Petitioner - violation of Section 19 of the PMLA and Article 21 of the Constitution of India - Money Laundering - illegal mining of sand and selling the same without issuance of transit challans - proceeds of crime - scheduled offence or not - reason to believe - HELD THAT:- The term reason to believe cannot be equated with the term reasonable complaint or credible information or reasonable suspicion contained in Section 41 (1) (B) of the Cr.P.C. Reason to believe is the tangible evidence or material which constitutes sufficient cause to believe existence of certain facts. This reason to believe goes to the root of the power of arrest. The subjective opinion of Arresting Officer is based upon fair and objective consideration of material as available with him on the date of arrest. On the basis of reason to believe, the Court shall form the secondary opinion on the validity of the exercise undertaken for compliance of Section 19 (1) of the PMLA when the arrest is made. Power to arrest under Section 19 (1) of the PMLA is not for the purpose of investigation. Arrest can and should wait and the power in terms of Section 19(1) of the PMLA can be exercised only when the material with the designated officers enables them to form an opinion by recording reasons in writing that the arrestee is guilty. Section 19(1) thus, does not permit arrest only to conduct investigation. Conditions of Section 19(1) have to be satisfied Clauses A, C, D and E to Section 41(1)(ii) of the Cr.P.C., apart from other considerations may be relevant. In order to prove the involvement of the petitioner in illegal sand mining business, at least some material was required to be produced to the effect that the petitioner deposited money as per his share for winning the bid. No such evidence, unfortunately, was produced by the ED in course of its investigation. There is absolutely no ambiguity with regard to the scope of Section 50. The only question is as to whether the statement of the petitioner involved him in an offence of moneylaundering. The petitioner admitted that he had financial transitions with M/s AMPL. According to the case of the prosecution, it is M/s AMPL and its Director who have proceeds of crime. There is absolutely no evidence that the petitioner directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity (here sand scam) connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property. Conclusion - The statement containing reason to believe delivered by ED to petitioner does not contain satisfactory material to hold that the petitioner is guilty of offence under Section 3 of the PMLA. The petitioner s arrest, dated 20th of September of 2024, is illegal and in violation of the safeguards contained in Section 19(1) of the PMLA. Petition allowed.

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• Service Tax

• 2025 (2) TMI 266
  Levy of service tax - business support service - reimbursements received by the appellants from their group companies for expenses incurred on their behalf - reimbursements can be considered as consideration for the purpose of levying service tax as per the Explanation to Section 67 of the Finance Act, 1994 or not - it was held by CESTAT that the reimbursement of expenses incurred by one entity on behalf of another, without the provision of a service, does not constitute a taxable service. Such reimbursements do not qualify as consideration for service tax purposes. HELD THAT:- There are no good ground and reason to interfere with the impugned judgment; hence, the present appeal is dismissed.

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• 2025 (2) TMI 265
  Rejection of refund claim - Revenue submits that since the petitioner has been diligently pursuing the matter before this Court, he is certainly entitled to the benefit under Section 14 of the Limitation Act. Further, he fairly submits that if any such appeal is filed within four weeks from today, the same shall be entertained - HELD THAT:- In the wake of the position sketched, as also the statements made by learned counsel for the parties, the petition stands disposed of.

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• 2025 (2) TMI 264
  Levy of service tax - reverse charge mechanism - whether the Withholding Tax paid by the appellants in respect of the consideration received from their overseas partners i.e VISA and MasterCard, in the assessable value of the service tax payable by the appellant under Reverse Charge Mechanism? - invocation of extended period of limitation - HELD THAT:- In the facts and circumstances of the case, the contracts entered into by the appellants are distinct in relation to the reimbursement of WHT; while the Agreement with MasterCard indicated that such WHT is not reimbursable, the Agreement with VISA indicated that VISA would reimburse the WHT periodically on providing the necessary proof of payment of WHT by the appellants. In this background, it is seen that the appellants have been paying service tax on the grossed-up value in respect of the consideration received from the MasterCard and have not been paying service tax in respect of VISA. Hon ble Supreme Court in the case of Bhayana Builders [ 2018 (2) TMI 1325 - SUPREME COURT] held that Explanation 3 to sub-section (1) of Section 67 removes any doubt by clarifying that the gross amount charged for the taxable service shall include the amount received towards the taxable service before, during or after provision of such service, implying thereby that where no amount is charged that has not to be included in respect of such materials/goods which are supplied by the service recipient, naturally, no amount is received by the service provider/assessee. Though, sub-section (4) of Section 67 states that the value shall be determined in such manner as may be prescribed, however, it is subject to the provisions of sub-sections (1), (2) and (3). Moreover, no such manner is prescribed which includes the value of free goods/material supplied by the service recipient for determination of the gross value. Section 67A of the Finance Act, 1994, gives an understanding that the consideration received must be for the service provided. In case, a part of the consideration is identifiable not to be for provision of such service, the same cannot be considered as consideration for the purposes of payment of service tax. In the impugned case, it is found that there is a clear-cut demarcation between the two Agreements. While the Agreement with MasterCard does not recognize the payment of WHT by the appellants as reimbursable expenses, the Agreement with VISA considers it to be reimbursable subject to provision of proof. In case of the MasterCard Agreement, the entire consideration received by the appellants is to be treated as gross consideration as that is the amount paid by the appellant to the overseas MasterCard for the services received. Therefore, rightly the appellant treated the grossed-up value as the consideration and discharged the due service tax. It is clear that the consideration as received for the service, that is to say the consideration mentioned in invoice to be to such service, is the assessable value for the purposes of levy of service tax, provided no other amounts have been paid over and above the value shown in the invoice. As far as the amounts that flow to the service provider (to the service receiver in case of reverse charge), the same constitutes gross consideration in terms of Section 67D - the grossed-up value is correctly considered by the appellants as consideration and applicable service tax was discharged on the same. In case of amounts paid to VISA card, the amount of WHT is agreed to be reimbursed to the appellant and therefore, that amount does not form part of consideration as it flows back to the appellant, the service recipient. Therefore, the appellants were right in not discharging the service tax on the same. Extended period of limitation - HELD THAT:- As the issue came to be settled by a series of judgements by the Tribunal at a later date, there are reasons to believe that the appellants could have entertained a bona fide belief. Moreover, Revenue does not highlight with evidence any act of suppression etc. on the part of the appellants with an intent to evade payment of duty. Moreover, the appellants have been filing ST-3 Returns regularly. The Revenue has not made out any case for invocation of extended period. Conclusion - The appellants correctly excluded the reimbursed WHT from the assessable value for VISA and that the demand for the extended period was unsustainable. Appeal allowed.

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• 2025 (2) TMI 263
  Rejection of rebate claim - export of services - whether the Tribunal has the authority to entertain appeals relating to rebate claims or if such matters should be directed to the Revisionary Authority under Section 35EE of the Central Excise Act, 1944? - HELD THAT:- In view of the first proviso to Section 35B of the Central Excise Act, 1944 where an order passed by the Commissioner (Appeals) under Section 35A, the Tribunal shall not have jurisdiction to decide any appeal relating to rebate of duty of excise on goods exported against the Order-in-Appeal passed by the Commissioner (Appeals) under Section 35B(1)(b). In respect of rebate claims filed, appeals have to be filed before the Revisionary Authority, Government of India under Section 35EE of the Central Excise Act, 1944. In terms of provisions of Section 86 of the Finance Act, 1994 where an order relating to service which is exported which has been passed under Section 85 and the matter relates to grant of rebate of service tax on input services or rebate of duty paid on inputs, appeals are required to be filed before the Revisionary Authority, Government of India in accordance with the provisions of Section 35EE of the Central Excise Act, 1994. The proviso of Section 35B of the Central Excise Act, 1944 clearly speaks of exclusion of jurisdiction of this Tribunal in relation to matters relating to rebate of duty. As all the impugned orders passed by the Commissioner (Appeals) relates to rebate claims, the Tribunal lacks jurisdiction in these matters. These appeals are not maintainable before this Tribunal as the remedy lies under Section 35EE of the Central Excise Act, 1944 by way of filing revision applications to Central Government. Conclusion - In view of the first proviso to Section 35B of the Central Excise Act, 1944 where an order passed by the Commissioner (Appeals) under Section 35A, the Tribunal shall not have jurisdiction to decide any appeal relating to rebate of duty of excise on goods exported against the Order-in-Appeal passed by the Commissioner (Appeals) under Section 35B(1)(b). These appeals are dismissed for want of jurisdiction.

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• 2025 (2) TMI 262
  Exemption from Service Tax under N/N. 45/2010-S.T. dated 20.07.2010 - services rendered by the Appellant in connection with the transmission and distribution of electricity - Appellant, acting as a sub-contractor, is liable to pay Service Tax even if the main contractor has already paid the Service Tax on the entire amount - Extended period of limitation. Transmission / distribution of electricity - HELD THAT:- N/N. 45/2010-S.T. exempts all services rendered in relation to transmission / distribution of electricity from payment of service tax. However, it is observed that the Ld. adjudicating authority has not considered the services rendered by the appellant such as Commercial or Industrial Construction Service as related to transmission and distribution of electricity on the ground that they are mainly related to works such as painting/plumbing/sanitary works at electric sub-stations and thus the same could not be considered as services related to transmission and distribution of electricity - the appellant could not produce the work orders at the time of hearing before this Tribunal as they were voluminous in nature, but expressed their willingness to produce the same before the adjudicating authority for re-examining the eligibility of the said notification along with the respective work orders. Thus, it is opined that this issue needs to be re-examined by the adjudicating authority afresh, after verification of the work orders related to transmission and distribution of electricity. Commercial or Industrial Construction Service - supply of tangible goods service - service rendered as a sub-contractor - HELD THAT:- Even if the main contractor pays Service Tax on the full amount, the sub-contractor shall be liable to pay Service Tax for the services rendered by them to the main contractor. The appellant has not produced the work orders wherein they have rendered the service as a sub-contractor. If the services are rendered after issue of the clarification by the Board, then the appellant is liable to pay service tax as a sub-contractor, even if the main contractor pays the service tax. However, at the time of hearing before this Tribunal, the appellant could not produce the work orders wherein they have rendered the services as a sub-contractor - this issue needs to be re-examined by the adjudicating authority afresh on the basis of our observations supra, after verification of the work orders where the appellant rendered the services as a sub-contractor. The adjudicating authority needs to examine the issue on the basis of the documentary evidences produced by the appellant in this regard. The same view has been held by the Larger Bench of the Tribunal in the case of Commissioner of Service Tax, New Delhi v. M/s. Melange Developers Pvt. Ltd. [ 2019 (6) TMI 518 - CESTAT NEW DELHI-LB] , wherein it has been held that a sub-contractor is liable to pay Service Tax even if the main contractor pays service tax on the entire value. Applicability of extended period of limitation - HELD THAT:- The issue regarding applicability of extended period of limitation has to be examined with respect to the facts and circumstances of each case separately. In this case, the adjudicating authority is required to examine whether the appellant has actually rendered the services in the capacity of a sub-contractor or not and the period involved to take a decision as to whether extended period of limitation can be invoked or not. For the above purposes of verification, the issue needs to be remanded back to the adjudicating authority. In respect of the demands confirmed under the categories such as site formation, clearance, excavation and earth moving and demolition service , Goods Transport Agency Service , Rent-a-cab service , construction of residential complex service , etc., it is observed that the appellant has not offered any specific explanation regarding the nature of service rendered by them and their service tax liability on such services. Considering the fact that the work orders relating to these services are overlapping with other services in the work orders, it is opined that this issue needs to be re-examined by the adjudicating authority afresh, after verification of the work orders. Conclusion - i) The eligibility for exemption needs to be re-examined by the adjudicating authority after verifying the work orders. ii) The sub-contractors are liable for Service Tax, even if the main contractor has paid the tax, and remanded the issue for verification of work orders. iii) The applicability of the extended period should be examined based on the case s specifics. Appeal disposed off by way of remand.

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• 2025 (2) TMI 261
  Levy of penalty when the entire amount of service tax has been paid much before issuance of SCN - appellant willing to pay the applicable interest - HELD THAT:- The appellant is willing to pay interest on the service tax paid before issuance of the show-cause notice. It is the contention of the learned advocate for the appellant that even though during the relevant period they had not paid service tax on turnkey contracts, since both service as well as materials had been supplied under the said contract treating the same as works contract. However, since those contracts are not available with them being more than two decades old, it would be difficult on their part to substantiate their claim. Therefore, on instruction from the appellant, the learned advocate submits that they are willing to discharge interest applicable on the service amount of Rs.29,47,547/- already paid and prays for invoking Section 80 of the Finance Act, 1994. The entire amount of service tax confirmed has been paid by the appellant much before the issuance of show-cause notice. It is their contention that wherever services are rendered during the period 01.07.2003 to 27.03.2007 involving only Erection, Installation and Commissioning, appropriate Service Tax was paid and they had not discharged Service Tax on works contract. Fairly they submitted that these contracts could not be placed being not traceable. Hence, it is only in the nature of works contract cannot be ascertained, since all these contracts could not be placed on record due to lapse of time. In their reply to show-cause notice and in their Appeal Memorandum, they have been claiming consistently that the service rendered by them, wherever VAT is paid and service tax not paid when it is in the nature of works contract service. The applicable Service Tax has been already paid and the appellant agree to discharge the interest on the said amount. There are no reason not to invoke Section 80 of the Finance Act, 1994 as far as imposition of penalty is concerned. Conclusion - i) The applicable Service Tax has been already paid and the appellant agree to discharge the interest on the said amount. ii) There are no reason not to invoke Section 80 of the Finance Act, 1994 as far as imposition of penalty is concerned. Appeal disposed off.

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• 2025 (2) TMI 260
  Denial of CENVAT Credit availed by the Appellant on the basis of Advice of Transfer Debit (ATD) - Liability to pay interest on the excess CENVAT Credit availed on capital goods in the first year itself - levy of penalty - Rent a cab service. Denial of CENVAT Credit availed on the basis of Advice of Transfer Debit (ATD) - HELD THAT:- Appellant is a Government of India Undertaking providing the same services from different locations across the country. The same issue for denial of the credit availed by the appellant on the basis of Advice of Transfer Debit (ADT) was raised in the jurisdiction of the Salem Commissionerate. Matter was finally decided by the Chennai Bench BHARAT SANCHAR NIGAM LTD. ERODE VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM [ 2013 (12) TMI 742 - CESTAT CHENNAI ] holding that It is true that assessee has not complied with provisions of CCR, 2004 read with Central Excise Rules, 2002 strictly. However, I find that existence of original invoice and its genuineness is not disputed by Revenue. In fact, such documents were produced before lower authorities. Therefore, the duty involved has been paid and there is no dispute that the equipment in question has been used at the sites where credits were taken. In such circumstances, considering the commercial practice which was necessary for efficient procuring the equipment in question, this procedural lapse cannot be considered as a reason to deny Cenvat credit involved. Matter remanded back on this issue to the original authority to re-determine the admissibility of CENVAT Credit on the strength of ATD in terms of this decision of Hon ble High Court. Interest and penalty - HELD THAT:- As the demand of the interest is completely linked with the admissibility of CENVAT Credit on the basis of the ATD, for which the matter is being remanded back to the original this issue should be decided by the adjudicating authority on the basis of the findings arrived at by in respect of admissibility of CENVAT Credit - Further adjudicating authority should re-determine the issue of penalty on these credits after determining the admissibility of CENVAT Credit in remand proceedings as has been directed by the Hon ble High Court. CENVAT Credit on rent-a-cab service - HELD THAT:- The issue of admissibility of CENVAT credit in respect of the Rent a cab service has also been decided by the Hon ble Bombay High Court in case of Solar Industries India Ltd [ 2021 (12) TMI 1047 - BOMBAY HIGH COURT ] holding as the Tribunal did not commit any error whatsoever in disallowing Cenvat credit to the appellant after 1-4-2011 in view of the amended provisions. The service provided was mere in the nature of personal service to its employees which is not permitted to be treated as input service . Thus in view of the above decision of Hon ble Bombay High Court, affirmed by Hon ble Supreme Court, the findings recorded in the impugned order upholding the denial of this credit affirmed. Conclusion - i) The matter regarding the denial of CENVAT Credit on ATDs is remanded back to the original authority for reconsideration. ii) The disallowance of CENVAT Credit on rent-a-cab services, along with interest and penalties upheld. Appeal partly allowed and matter is remanded back to the original authority.

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• Central Excise

• 2025 (2) TMI 259
  Rejection of an application for rectification of mistake due to a delay in filing, under Section 35C(2) of the Central Excise Act, 1944 - failure to follow the principles laid down by the Supreme Court in the case of SUNITADEVI SINGHANIA HOSPITAL TRUST v/s UNION OF INDIA [ 2008 (11) TMI 249 - SUPREME COURT ]. HELD THAT:- The Hon ble Apex Court in the case of Commissioner of Customs and Central Excise versus Hongo India Private Limited and another [ 2009 (3) TMI 31 - SUPREME COURT ], while interpreting the provisions of Sections 35, 35B, 35EE, 35G and 35 H of the Central Excise Act, 1944, held that the language used in the provisions was clear that the Legislature intended the Appellate Authority to entertain appeal by condoning delay up to 30 days and as per unamended provision of Section 35H, sufficient time of 180 days was prescribed for filing an appeal and revision, and therefore, it was held that the Section 5 of Limitation Act, 1963 excluded in absence of laws condoning the delay by showing sufficient cause after prescribed period. There is no clause permitting the Tribunal to condone the delay. It is pertinent to note that Section 35C (2) has been amended with effect from 11.05.2002 vide Section 140 (i) of Act of 20 of 2002 to reduce the time limit from four years to six months for rectification of the mistake in the order of the Appellate Tribunal. Thus, the Legislature in his wisdom has fixed the time period of six months to rectify any mistake apparent on record in the order of the Tribunal within a period of six months only, and as such the Tribunal has no power to extend the period prescribed beyond six months to entertain any application for rectification of mistake. Conclusion - The statutory time limits are binding and cannot be extended by the Tribunal unless explicitly provided by law. The Tribunal acted within its legal bounds by rejecting the rectification application due to the delay. Appeal dismissed.

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• 2025 (2) TMI 258
  Levy of Central Excise duty - appellant retained 50% of the sales tax/VAT collected from its customers - invocation of extended period of limitation. Whether the amount which was paid to the appellant as sales tax by its customers but retained by the appellant on the strength of state government s deferment scheme, merits inclusion in the transaction value for computing central excise duty under Section 4 of the Central Excise Act, 1944 or not? - HELD THAT:- This issue is no more res integra as the Tribunal in the case of M/S HONDA MOTORCYCLES SCOOTERS INDIA PVT. LTD. VERSUS CCE, DELHI-III [ 2016 (9) TMI 533 - CESTAT CHANDIGARH] has considered the issue of retention of 50% of the amount under tax concession scheme allowed by the Haryana State Government and has held the impugned order is correct in upholding the inclusion of that portion of Sales Tax/VAT in the assessable value collected by the appellants but not paid or payable to the State Government followed by the various decision of Hon ble Supreme Court. Extended period of limitation - HELD THAT:- The learned Commissioner confirmed the demand by invoking the extended period, but the department had not established anything on record to show that the appellant has suppressed the material facts with intent to evade the payment of duty. Further, it is found that the issue involved in the present appeal relates to interpretation of the law and the Rules and finally, the Hon ble Apex Court in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-III VERSUS M/S. MARUTI SUZUKI INDIA LTD. [ 2014 (9) TMI 229 - SUPREME COURT] has settled the position of law, therefore, invoking extended period is not justified in the present case. Conclusion - i) The demand by invoking extended period of limitation is set aside. ii) The demand for the normal period is confirmed along with interest. iii) The appellant is entitled to benefit of cum-duty. iv) No penalty is imposable on the appellant. Appeal disposed off.

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• 2025 (2) TMI 257
  Benefit of the exemption N/N. 6/2006-CE dated 01.03.2006 for supplies made to mega power projects against International Competitive Bidding - Invocation of Extended period of limitation - HELD HAT:- Before considering the merits of the case, it is necessary to examine the grounds on which extended period of limitation was invoked - The Assistant Commissioner had not examined the question of limitation because he found in favour of the appellant on merits. The Commissioner (Appeals) did not record any findings on the question of limitation. Extended period of limitation - HELD THAT:- The extended period of limitation was invoked only on the ground that the appellant, by way of willful mis-statement and wrong availment of the said notification by way of mis-representation of facts, which came to the knowledge only during the audit, invoked extended period of limitation. It is a well-settled principal that extended period of limitation cannot be invoked unless one of the five elements necessary to invoke it viz., fraud or collusion or willful mis-statement or suppression of facts or violation of Act or Rules with an intent to evade payment of duty is established. In this case there are no details, let alone evidence in the SCN, of either willful mis-statement or mis-representation of facts. There was no ground to invoke extended period of limitation. The entire period of demand from June 2010 to October 2010 was beyond the normal period of limitation and was time-barred. Therefore, it is not necessary to examine the merits of the case. Appeal allowed.

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• 2025 (2) TMI 256
  Classification of goods - Add-on Cards - to be classified under Chapter sub-heading 8471.00 attracting Central Excise Duty @ 15% or under Chapter sub-heading 8473.00 attracting Central Excise Duty @20%? - HELD THAT:- The issue regarding the classification of Add-on Cards is no more res integra in view of the decision passed by the Tribunal, Mumbai in the case of Commissioner of Central Excise, Mumbai-II Vs. Virtual Computers Pvt. Ltd. [ 2012 (7) TMI 232 - CESTAT, MUMBAI] holding that Mother Boards and Add-on Cards are classifiable under Chapter Heading 8473 of the Central Excise Tariff Act, 1985. The Tribunal, Mumbai has held that The add-on card and motherboard cannot be considered as automatic data processing machines. The same are parts and accessories suitable for use with the machine falling under Heading 84.71 of the Tariff. In view of the above, as the goods in question are parts and accessories of the data processing machine falling under Heading 84.71 of the Tariff, therefore being parts and accessories are classifiable under Heading 8473 of the Tariff. The appeal is rejected upholding the classification of Add-on Cards under Chapter Heading 8473 of the Central Excise Tariff Act, 1985. As such demand of duty is confirmed. No interest is payable as the provision for payment of interest in terms of Section 11AB of the Central Excise Act, 1944 is applicable from 28.09.1996. Conclusion - The classification of Add-on cars under Chapter Heading 8473 upheld. The appeal is rejected but for the modification to the extent of setting aside the penalty imposed.

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• 2025 (2) TMI 255
  Rejection of refund claim - rejection on the ground that the items Gemcitabine Hydrochloride and Doxorubicin Hydrochloride are not the drugs specified in the list - 3 4 of the N/N. 21/2002-Cus dated 01.03.2002, which forms the base for claiming the exemption under N/N. 04/2006-CE dated 1/3/2006 - appellant has passed the duty component claimed as refund to the customers or not - principles of unjust enrichment - HELD THAT:- Notification No. 4/2006-CE dated 01.03.2006 at S.No. 47 grants exemption to various drugs or medicines including their salt and esters, specified in List 3 or 4 appended to the Notification 21/02-Cus dated 01.03.2002. It is also found that in the appellant s own case the Ld. Commissioner during the relevant period has held that the appellant is entitled to the exemption provided under the Notification as the same is extendable to the hydrochlorides of the drugs or medicines prescribed under list 3 and 4 of the Customs Notification vide Order in Original No. V(30)15/CE/ADJ/81/2007/296 dated 14.01.2016. The pharmaceutical substances are prepared as hydrochlorides so that they may be quickly released in the gastrointestinal tract which body usually absorbs within 15-30 minutes; therefore, exemption granted to various formulations under the notifications also includes their salts, esters, and not including of Hydrochlorides under Notification will make the Notification redundant and this aspect has also been indicated in the various Pharmacoepia - the denial of exemption to the appellant amount to discrimination because the other manufacturer who are manufacturing the identical goods are availing the exemption which has been sought to be denied to the appellant which is not permitted in law. Principles of unjust enrichment - HELD THAT:- The appellant has procured the bulk drug on payment of duty which was borne by them and has not been passed on to any customer and in order to establish this fact, the appellant has produced the copies of balance sheet, wherein it has been recorded that the amount of duty paid on bulk drug as Receivable under Current Asset and not included the same in the cost of the injections manufactured by the appellant. Conclusion - i) The exemption under Notification No. 04/2006-CE extends to hydrochlorides of specified drugs, consistent with legislative intent. ii) The appellant successfully demonstrated that the duty was not passed on to customers, satisfying the test of unjust enrichment. Appeal allowed.

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• 2025 (2) TMI 254
  Entitlement to the duty exemption under N/N. 10/97-CE dated 01.03.1997 for the goods supplied to the Aeronautical Development Agency (ADA) - HELD THAT:- It is an admitted fact that the goods were supplied by the appellant without payment of duty, since the institution to whom the goods were supplied are exempted from payment of duty under N/N. 10/1997-CE and they have also produced valid certificates from the competent authority as required under N/N. 10/1997-CE in support of their claim. Further, it is found that as held by this Tribunal in appellant s own case [ 2016 (8) TMI 438 - CESTAT BANGALORE ], the items supplied by the appellant to Aeronautical Development Agency (ADA) a non-Commercial Research Institution under the administrative control of the Department of Defence Research Development of Government of India, Ministry of Defence are eligible for the benefit of exemption under the N/N. 10/1997-CE dated 01.03.1997 as they have fulfilled the conditions for claiming the exemption benefit. Conclusion - The appellant are eligible for the benefit of exemption under the N/N. 10/1997-CE dated 01.03.1997 as they have fulfilled the conditions for claiming the exemption benefit. Appeal allowed.

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• CST, VAT & Sales Tax

• 2025 (2) TMI 253
  Challenge to orders of attachment of the bank account and the immoveable property - time limitation for issuing an assessment order under Section 21 (4) of AP VAT Act - HELD THAT:- A perusal of the impugned order would show that the entire order goes on the basis of best judgment assessment, relying upon the returns filed by the petitioner. There is nowhere any mention of suppression of facts, much less, willful suppression of facts, resulting in willful evasion of tax, which is the sine qua non, for invoking Section 21 (5) of the Act. In such circumstances, the provisions of Section 21 (5) of the Act would not be applicable and the period of limitation would be four years, as set out under Section 21 (4) of the Act. Conclusion - As the impugned assessment order has been passed beyond the period stipulated under Section 21 (4) of the Act, it must be held that the impugned order is beyond limitation and non-est. Both the writ petitions are allowed setting aside the impugned assessment order of the Commercial Tax Officer, Addanki Circle, dated 24.08.2021 and penalty notice dated 16.09.2021.

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• Indian Laws

• 2025 (2) TMI 252
  Enforceability of clause 49.5 of the General Conditions of Contract (GCC), which prohibits claims for damages due to delays caused by the respondent - appellant contended that the delay in construction work has resulted in an additional financial burden on account of the establishment and overheads, etc., for a longer period than planned, for which the appellant would be claiming separately - HELD THAT:- Clause 49.5 was waived by the respondent. In fact, the respondent stated that the claim for financial burden would have to be dealt with together with the proposal for an extension of time, and the said claim cannot be processed separately. Thereafter, on two occasions, on specific requests made by the appellant under clause 49 of the GCC, the extension of time was granted by the respondent. Except sub-clause 5 of clause 49, there is no other sub-clause which provides for grant of extension when the delay was attributable to the respondent. The extensions were granted at the instance of the appellant by invoking clause 49. Hence, the argument of waiver of Clause 49.5 by the respondent deserves to be rejected. Moreover, detailed claim, as stated in the letter dated 14th October, 2013 was not submitted by the appellant. As far as scope of interference in an appeal under Section 37 of Arbitration Act is concerned, the law is well settled. In the case of Larsen Air Conditioning and Refrigeration Company v. Union of India and Ors. [ 2023 (8) TMI 985 - SUPREME COURT ], this court held that the limited and extremely circumscribed jurisdiction of the court under Section 34 of the Act, permits the court to interfere with an award, sans the grounds of patent illegality i.e. that illegality must go to the root of the matter and cannot be of a trivial nature ; and that the Tribunal must decide in accordance with the terms of the contract, but if an arbitrator construes a term of the contract in a reasonable manner, it will not mean that the award can be set aside on this ground In the case of Konkan Railway Corporation Limited v. Chenab Bridge Project Undertaking [ 2023 (8) TMI 1227 - SUPREME COURT ], this court held Scope of interference by a court in an appeal under Section 37 of the Act, in examining an order, setting aside or refusing to set aside an award, is restricted and subject to the same grounds as the challenge under Section 34 of the Act. Conclusion - The appellant s claims were found to be barred by clause 49.5, and no grounds existed for judicial interference under Sections 34 and 37 of the Arbitration Act. Considering the limited scope of interference, as laid down by this Court, there are no merit in the appeal and the same is accordingly dismissed.

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• 2025 (2) TMI 251
  Placement of the petitioners in the Commercial Department - Merger Rules, 2022, which merged employees from the Entertainment Tax Department into the Commercial Tax Department, violated Articles 14, 16, and 21 of the Constitution by treating these employees differently and affecting their promotion prospects? - HELD THAT:- The overriding effect has been mentioned in Rule 2 of the Merger Rules. Rule 3(3) of the Rules defines the date of Substantive Appointment as the date of appointment at the post held on the date of Notification dated 24.04.2018. Rule 3 (4) of the Merger Rules, 2022 defines the cadre of posts in the Commercial Tax Department and the Entertainment Tax Department. Rule 4(4) provides that promotion and other service matters of related posts shall be decided under the concerning Rules of service cadre of the Commercial Tax Department. Rule 4(5) of the Merger Rules, 2022 clarifies that the services of the merged employees shall be governed by the concerned Service Rules governing the cadre. Rule 4(7) of the Merger Rules, 2022 plays a pivotal role in preserving and protecting the continuity of services of the petitioners. Hence their date of merger is being treated as the date of appointment in the related service cadre of Commercial Tax Department to maintain the continuity of service. It is clear that till framing of Merger Rules, 2022 the petitioners have no grievance as they continued to enjoy the service benefits as per the Uttar Pradesh Entertainment and Betting Tax (Gazetted) Service Rules, 1992. On account of Merger Rules, 2022, when they have been placed at the bottom of the seniority list in the respective cadres of the Commercial Tax Department as on 24.04.2018, they raised their grievance by means of the aforesaid writ petitions stating that the action taken by the State Government is hit by Article 14 of the Constitution of India. The only grievance raised before this Court is that the placement of the petitioners in the Commercial Department has caused prejudice. In this regard, reliance placed by the learned counsel for the respondents on INDIAN AIRLINES OFFICERS VERSUS INDIAN AIRLINES LTD. ORS [ 2007 (7) TMI 660 - SUPREME COURT] is fully applicable as it has been held that the whole scheme cannot be said to be arbitrary/discriminatory merely because some employees suffer in terms of promotion/seniority and ultimately their chances of promotion are affected. There is no violation of Articles 14, 16 21 of the Constitution of India and since nothing in the Merger Rules, 2022 violates the aforesaid Articles, the prayer made by the petitioners in both the writ petitions for declaring it ultra vires has no substance and the same has no force in law as the matter pertains to policy decision taken by the State Government. Conclusion - The Merger Rules, 2022, were not ultra vires the Constitution. The policy decisions are not subject to judicial interference unless they are manifestly arbitrary or violate specific constitutional provisions. The petitioners substantive appointment and status be treated as of the date specified in the Merger Rules, 2022. Petition dismissed.

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• 2025 (2) TMI 250
  Dishonour of cheque - vicarious liability of Managing Director of M/s. Kwality Limited u/s 138 of the Negotiable Instruments Act, 1881 - the cheque dishonored, was not drawn by him or the company he represents but was handed over by him to the complainant - HELD THAT:- The petitioner is being sought to made an accused on account of being the Managing director of M/s. Kwality Limited, the borrower of the subject loan. It is not in doubt that when the principal offender under Section 138 of the NI Act is a company, then every person who is in charge of the affairs of the company, at such time when the subject cheque is dishonoured would be liable. However, it is evident from a perusal of the record that the petitioner is a Managing Director of M/s. Kwality Limited, admittedly, the borrower of the loan. The subject cheque was admittedly issued by DRTPL, and signed by Makardhwaj Kumar, director of DRTPL. The only role attributed to the petitioner in the instant case is that the petitioner had handed over the cheque admittedly issued by DRTPL to the complainant. However, merely because the subject cheque was handed over by the petitioner, the same does not shift the onus from the drawer in terms of Section 138 of the NI Act. From a plain reading of Section 138 of the NI Act, it materialises that liability is imputed on the person who draws the cheque on an account maintained by them. In the present case, even though the cheque was handed over by the petitioner who is the director of M/s. Kwality Limited, the same was not drawn by the M/s. Kwality Limited. The subject cheque was duly executed and issued by DRTPL. Considering that the petitioner is not the director of the accused company who is the drawer of the subject cheque, he cannot be made liable for the offence under Section 138 of the NI Act. Conclusion - The petitioner, as the Managing Director of M/s. Kwality Limited, cannot be held liable under Section 138 of the NI Act for the dishonored cheque issued by DRTPL. Petition allowed.

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