TMI Tax Updates - e-Newsletter
March 19, 2025

Case Laws in this Newsletter:

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

Articles

1. Mediation under IBC

   By: Simranjeet Mirani

2. Forms and Documents Required for LLP Annual Return Filing

   By: Ishita Ramani

3. Judicial Perspectives on Condonation of Delay: Analysing Section 5 of the Limitation Act and Section 107 of the CGST Act.

   By: Shrey Bhatnagar

4. Are you exporting IT or IT-enabled services you cannot ignore SOFTEX Compliance.

   By: Pradeep Reddy

5. Budget 2025-Customs Law Changes: If Implemented Well-Could Improve Ease of Doing Business!

   By: Pradeep Reddy

6. ‘NRE’ DEPOSITS SOURCED FROM FOREIGN REMITTANCES ARE BEYOND INDIAN TAXATION

   By: DR.MARIAPPAN GOVINDARAJAN

7. Clearance of Shipments under Direct Port Delivery (DPD) for Imports and Direct Port Entry (DPE) for Exports.

   By: YAGAY andSUN

8. FOB Incoterm: An Introduction

   By: YAGAY andSUN

9. Global Warming Potential (GWP) of Gases - Rated from Low to High[Environmental Laws - Climate Change]

   By: YAGAY andSUN

10. The Customs (On-Arrival Movement for Storage and Clearance at Authorised Importer Premises) Regulations, 2025

   By: YAGAY andSUN

11. Good and Bad Refrigerants – An Introduction[Environment & Climate Change]

   By: YAGAY andSUN

12. Blue Category of Essential Environmental Services [Environmental Laws]

   By: YAGAY andSUN

13. Blue Category of Industries or Services.[Environmental Laws]

   By: YAGAY andSUN

News

1. TMC MPs stage walkout over FM's reply on Manipur budget in RS

2. Parliament clears Rs 51,463 cr extra spending for FY25, Manipur Budget for FY26

3. Haryana CM Saini proposes Urban Drainage Fund of Rs 100 cr in budget to improve infra

4. Haryana Budget: CM announces new scheme for gig workers, affordable rental housing for migrants

5. 1025 new buses to be added to Haryana State Transport fleet: CM Saini

6. Oppn MPs flag concerns over railway safety, claim rail budget no record breaking but failed budget

7. Haryana Budget proposes scholarship for children of martyred soldiers, paramilitary personnel

8. Delhi CM gets BJP MPs' feedback on budget, says govt to work for city's holistic development

9. Empty rhetoric, nothing for farmers: Opposition slams Haryana budget

10. Afforestation, EVs, natural farming and renewables to help Himachal become green state by 2027: CM

11. India and New Zealand working on a comprehensive, mutually beneficial Free Trade Agreement: Shri Piyush Goyal

12. Various measures have been taken by the government to strengthen cyber security in the financial sector

13. Mutual Credit Guarantee Scheme for MSMEs (MCGS- MSME) provides 60% guarantee for credit facility up to Rs.100 crore

14. A total of 55.02 crore Jan-Dhan accounts have been opened till 7th March 2025, out of which 36.63 crore accounts are in rural and semi-urban areas

15. CBDT seeks inputs from stakeholders on income-tax rules and related forms on provisions of Income Tax Bill 2025, after it was introduced in Parliament

16. RBI and Bank of Mauritius sign pact on use of local currencies for bilateral transactions

17. ED searches Soros' funding agency, investment arm in Bengaluru to probe FEMA 'violations'

18. Pakistan PM to visit Saudi Arabia to strengthen bilateral ties, enhance economic cooperation

19. CCI approves acquisition of steel-making coal portfolio of Anglo American plc in Australia by Peabody MNG Pty Ltd and Peabody SMC Pty Ltd

20. CCI approves the proposed acquisition of 100% shareholding of O2 Power Midco Holdings Pte. Ltd. and O2 Energy SG Pte. Ltd. by JSW Neo Energy Limited.

21. CCI approves the proposed acquisition of shareholding in Dhoot Transmission Private Limited by BC Asia Investments XV Limited and BC Asia Investments XVI Limited

22. CCI approves acquisition of Uprising Science Private Limited by Hindustan Unilever Limited

23. CCI approves the acquisition of certain additional shareholding in Tata Play Limited (Tata Play) by Tata Sons Private Limited (Tata Sons) from Baytree Investments (Mauritius) Pte Ltd.

24. The cumulative exports (merchandise & services) during April-February2024-25 is estimated at USD 750.53 Billion, as compared to USD 706.43 Billion in April-February2023-24, an estimated growth of 6.24%

25. Smt. Nirmala Sitharaman launches PM Internship Scheme App in presence of MoS, Corporate Affairs Shri Harsh Malhotra

26. One Time Settlement Scheme for taxpayers to be implemented from next week: Nayab Saini

27. In 'dry' Gujarat, govt collects Rs 33.98 cr in tax in two years on liquor sales

28. 'Money laundering by persons in power erodes public confidence': SC junks Guj officer plea

29. RBI permits settlement of trade transactions with Maldives in local currencies

Notifications

Customs

1. 03/2025 - dated 17-3-2025 - ADD

Seeks to impose Anti-dumping duty on Vacuum Flasks from China PR

2. 02/2025 - dated 17-3-2025 - ADD

Seeks to impose provisional ADD on Aluminium Foil upto 80 microns, excluding Aluminium Foil below 5.5 micron for non-capacitor application from China PR

GST - States

3. 348-F.T. - dated 3-3-2025 - West Bengal SGST

Seeks to further amend Notification No 1141-F.T. dated 28.06.2017 and inter alia seeks to substitute the definition of "specified premises"

4. 342-F.T. - dated 3-3-2025 - West Bengal SGST

Seeks to further amend Notification No. 1126-F.T. dated 28.06.2017 and inter alia seeks to reduce the rate on Gene Therapy from the existing 12% to nil.

5. 341-F.T. - dated 3-3-2025 - West Bengal SGST

Seeks to further amend Notification No. 1125- F.T. dated 28.06.2017 and inter alia seeks to reduce the rate of taxes on supply of all Fortified Rice Kernels.

6. 311-F.T. - dated 25-2-2025 - West Bengal SGST

West Bengal Goods and Services Tax (Second Amendment) Rules, 2025.

Circulars / Instructions / Orders

IBC

1. IBBI/CIRP/83/2025 - dated 17-3-2025

Disclosure of information relating to carry forward of losses in Information Memorandum (IM)

FEMA

2. 22 - dated 17-3-2025

Asian Clearing Union (ACU) Mechanism – Indo-Maldives trade

Highlights / Catch Notes

GST

• GST Registration Requires Applicants to Disclose All Business Premises, Automatic Registration Not Mandated Under Section 107

  Case-Laws - HC : The HC dismissed the petition challenging a GST demand, finding the petitioner's claim that the Partnership Deed's reference to a fourth business site should have prompted automatic registration by authorities to be baseless. The court held that applicants bear responsibility to disclose all business premises for GST registration, and the petitioner had failed to register the fourth site for over six years. The court noted that the petitioner had not pursued the available statutory remedy of appeal under Section 107 of the GST Act, instead filing this petition over a year after the impugned order. The HC concluded no grounds existed to invoke jurisdiction under Article 226 of the Constitution, as the challenge primarily involved factual determinations properly addressed through statutory appeals.
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• Jurisdictional Defects in CGST Notice Under Section 74 Lead to Stay Order as Rule 142 Ignored

  Case-Laws - HC : The HC stayed a common final order issued during pending litigation, finding prima facie merit in petitioners' challenges. The court determined that the original show cause notice under CGST Act s.74 was issued without jurisdiction for failing to comply with mandatory provisions of Rule 142 of CGST Rules. Applying the maxim "sublato fundamento cadit opus," the court held that when the foundation of proceedings is defective, all subsequent actions and orders automatically fail. Additionally, the denial of petitioners' right to cross-examine witnesses whose testimony was relied upon by respondents constituted a violation of natural justice principles. The court admitted the petitions for final hearing and stayed the operation of the impugned order to prevent irreparable harm to petitioners.
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• Limitation Period for GST Refund Claims Cannot Be Altered by Circulars or Retrospective Rule Amendments

  Case-Laws - HC : The HC dismissed a petition seeking to extend the benefit of the proviso to Rule 90(3) of CGST Rules to exclude days between filing refund claims and issuance of deficiency memos for limitation calculation. The court determined that the petitioner's refund claims for zero-rated supplies (exports) made during July-September 2017 were filed within the statutory limitation period under Section 54 of CGST Act. The court held that Circular No.125/44/2019 could not impose a fresh limitation period contrary to statutory provisions, and the 2021 amendment to Rule 90(3) could not be given retrospective effect. The amendment to Explanation 2(e) to Section 54 was deemed inapplicable as the petitioner's claims predated this amendment.
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• Circular Trading Adjudication Must Include All Five Assessees; Petitioner's Writ Petition Restored

  Case-Laws - HC : The HC recalled its earlier order and restored the writ petition, acknowledging that the petitioner should not be excluded from proceedings involving circular trading adjudication. The court recognized that circular trading issues must be decided with all five assessees participating collectively. The petitioner sought restoration to challenge the adjudicating authority's final order alongside four other assessees. The court determined that changed circumstances warranted restoration of the petition to its original number (8015/2024), thereby allowing the petitioner to join the collective proceedings. The review petition was accordingly disposed of, with the court's 17.12.2024 order being formally recalled.
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• GST Fraud Case: Court Rejects FIR Quashment Despite Section 132(6) CGST Act Protection Claim

  Case-Laws - HC : The HC dismissed a petition seeking quashment of an FIR filed under Sections 420, 467, 468, 471 & 120-B IPC related to tax fraud. While the petitioner argued protection under Section 132(6) of CGST Act, the court distinguished that the prosecution was for IPC offenses, not CGST violations. The petitioner allegedly fabricated tax invoices through "Dabang Duniya" publication, falsely claiming sales of 100,000 copies daily (versus actual 5,000-8,000) to facilitate GST evasion of approximately 500 crore. The court rejected both the quashment request and the constitutional challenge to Section 132(6), finding no grounds to interfere with the ongoing investigation.
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• Show-Cause Notice Under CGST Act Section 73 Quashed: Parallel Proceedings For Same Transaction Creates Legal Uncertainty

  Case-Laws - HC : The HC quashed a show-cause notice issued under s.73 of the CGST Act regarding irregularities in transitional credit claimed via TRAN-1. Relying on Usha Martin Limited vs. Additional Commissioner precedent, the court determined that despite the general rule of exhausting statutory remedies before seeking judicial review, writ petitions are maintainable when challenging actions wholly without jurisdiction. The court examined s.174 of the CGST Act and relevant constitutional provisions, concluding that parallel proceedings under both pre-GST and GST regimes for the same transaction would create legal uncertainty. The court held that the impugned show-cause notice was issued without jurisdiction and accordingly allowed the petition.
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• GST Registration Cancellation Quashed: Authorities Failed to Consider Medical Reasons and Payment of Dues

  Case-Laws - HC : The HC quashed the order cancelling petitioner's GST registration for failure to file returns for six months. The Court found that authorities failed to consider the petitioner's contentions regarding payment of dues and medical reasons for delay, constituting a violation of natural justice principles. Following precedent established in Aggarwal Dyeing and Printing, which emphasized scrupulous adherence to procedural aspects, the matter was remanded to the Assessing Officer at the show cause notice stage. The AO must conduct fresh adjudication within twelve weeks, providing the petitioner an opportunity of hearing and issuing a reasoned order thereafter.
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• GST Registration Cancellation Cannot Be Retrospective Without Prior Notice in Show Cause Notice

  Case-Laws - HC : The HC held that the retrospective cancellation of petitioner's GST registration was invalid due to procedural defects in the Show Cause Notice. The original SCN dated September 19, 2024, contained no disclosure of intent to cancel registration retrospectively, nor provided supporting reasons for such action. This failure to place the petitioner on prior notice violated principles of natural justice. The Court allowed the writ petition, modifying the impugned order to stipulate that the cancellation would take effect from the date of the SCN itself rather than retrospectively, thereby protecting the petitioner from backdated consequences while maintaining the validity of the cancellation from the notice date forward.
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Income Tax

• New Tax Offense Compounding Guidelines: No Limitation Period, Payment Extensions Up to 24 Months, and Progressive Fee Structure

  Circulars : The revised compounding guidelines for tax offenses provide significant procedural updates regarding application eligibility and processing. Applications pending as of October 17, 2024 will be processed under the new guidelines without requiring fresh submissions or fees. The limitation period for applications has been eliminated, allowing previously rejected applications to be refiled as subsequent applications. Co-accused may apply separately or jointly, with no separate fees required. Payment extensions up to 24 months are permitted. Compounding charges are determined by application sequence and offense type, with subsequent applications for the same offense incurring higher rates (1.2x, 1.4x, etc.). Applications filed more than 12 months after prosecution launch face a 50% surcharge. The guidelines also address cases involving convicted persons and those under investigation by other agencies.
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• Ancestral Property STCG Case Remanded to Determine If Transfer Occurred Before Assessing Capital Gains

  Case-Laws - AT : The ITAT set aside the CIT(A)'s order concerning STCG on an ancestral property allegedly sold by the assessee with ten co-owners for Rs. 9.08 crores. The Tribunal remanded the case to the JAO to determine whether the assessee actually transferred any immovable property in AY 2016-17. If no transfer occurred, no capital gain would be taxable; if a transfer is confirmed, capital gains should be assessed according to law. Similarly, the penalties under s.271(1)(c) for concealment of income and s.271F for non-filing of returns were set aside, with instructions that penalties may only be imposed after the JAO completes the reassessment and establishes taxable income exceeding the threshold limit.
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• Penalty Under Black Money Act Deleted: Non-Disclosure of Foreign Assets Deemed Bona Fide Mistake Under Section 43

  Case-Laws - AT : ITAT deleted the penalty imposed under Section 43 of the Black Money Act for failure to disclose foreign assets in the income tax return. The Tribunal found that since no fresh investments were made during the assessment year and the explanation regarding source of previous investments was accepted, the non-disclosure constituted a bonafide mistake rather than an attempt to evade the Act. The Tribunal held that while Sections 3, 10, and 43 of the BMA may be independent provisions, they must be read together to determine legislative intent. Following Ocean Diving (ITAT Mumbai) and Mylan Laboratories (Telangana HC), the appeal was allowed.
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• Tax Reassessment Upheld: Subsidiary's Funds Deemed Unaccounted Income Under Section 68 Despite Prior Tribunal Ruling

  Case-Laws - HC : The HC upheld reassessment proceedings initiated by the AO against the petitioner based on funds received by NNPLC (petitioner's wholly-owned subsidiary). The AO relied on DRP's view that NNPLC was established without reasonable business purpose and its funds constituted unaccounted income of the petitioner under Section 68. Despite a Special Bench of the Tribunal previously concluding that petitioner had not extended corporate guarantee to NNPLC, the HC determined sufficient material existed to justify reassessment. The court rejected petitioner's argument that DRP's order was misconstrued, noting this contention was not raised in earlier litigation before HC or SC. The SC had previously affirmed the AO's reliance on DRP's order was justified. Challenge to reassessment action dismissed.
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• Reopening of Assessment Quashed: Department Failed to Prove Non-Disclosure of Material Facts Under Section 147

  Case-Laws - HC : The HC quashed the reopening of assessment under section 147 as the Department failed to establish that the assessee had not made a full and true disclosure of material facts at the original assessment stage. The Court relied on several SC precedents including Kelvinator, Bimal Kumar Damani, and Calcutta Discount Co. Ltd. to determine that assumption of jurisdiction under section 147 was bad in law when initiated beyond the four-year limitation period without proving failure of disclosure by the assessee. Regarding write-off of bad debts amounting to Rs. 4.94 crores (restricted to Rs. 4.07 crores), the Court allowed the claim applying the ratio in TRF Ltd., rejecting the lower court's direction to relegate the assessee to appeal remedies.
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• Interest on Non-Performing Assets Not Taxable Until Received, Following RBI Guidelines Over Section 43D

  Case-Laws - AT : The ITAT ruled that interest accrued on Non-Performing Assets (NPAs) cannot be added to taxable income when not credited to the Profit and Loss account. The Tribunal noted that the assessee maintained books in compliance with RBI norms, which require interest on NPAs to be recognized only upon receipt. Despite the AO and CIT(A)'s contention that income tax law does not exempt such accrued interest, the ITAT held that Section 43D of the Income Tax Act cannot override RBI Act provisions. The Tribunal set aside the CIT(A)'s order, directed deletion of the addition of accrued interest on NPAs, and ordered recomputation of the assessee's income.
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• Assessment Under Normal Provisions Invalid When Section 153A Applies to Abated Returns Following Search Action

  Case-Laws - AT : The ITAT ruled in favor of the assessee, finding that the assessment under normal provisions rather than section 153A was legally unsustainable. Since the assessee was subject to a search action on July 23, 2015, and had filed its return for AY 2014-15 on September 30, 2014, the assessment was in "abated" status at the time of search per section 153A's second proviso. The Tribunal determined that the non-obstante clause "notwithstanding anything contained in section 139" required assessment under the specific provision applicable to searched persons rather than normal provisions. The authorities' failure to apply the correct statutory framework constituted an error of law and fact.
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• Tax Tribunal Deletes Unexplained Cash and Jewelry Additions Due to Retracted Statement and Improper Valuation Process

  Case-Laws - AT : The ITAT allowed the appellant's appeal, deleting three additions made by the AO. Regarding unexplained cash under s.69A, the Tribunal held that a statement made during search, though important evidence, is not conclusive and can be retracted. For the silver jewelry addition, the Bench found the AO failed to make proper inquiries despite documentary evidence of approval stock being available. Concerning the alleged excess 18-carat gold jewelry and shortage of 22-carat items, ITAT determined this discrepancy resulted from improper segregation during valuation when tags became jumbled. The negligible weight difference between book records and physical inventory, supported by day-to-day stock registers, justified deletion of these additions.
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• Voluntary Contributions Without Corpus Designation Not Exempt Under Sections 11 and 12 for Unregistered Charitable Trust

  Case-Laws - AT : ITAT denied exemption under sections 11 and 12 for voluntary contributions received by the assessee. The tribunal found no evidence demonstrating that donations were specifically directed toward corpus formation as required under section 11(1)(d). Per section 12, voluntary contributions without specific corpus designation must be treated as income of charitable trusts. Additionally, the assessee failed to satisfy the prerequisite condition of registration or application filing under section 12AA, which is necessary for exemption eligibility under sections 11 and 12A. The tribunal determined that "Income" under section 2(24)(iia) would remain part of total income absent proper registration. Accordingly, the assessee's appeal was dismissed.
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• Foreign Bank Accounts Inherited from Parents Not Subject to Black Money Act as Funds Originated Abroad

  Case-Laws - AT : The ITAT allowed the assessee's appeal against additions made under the Black Money Act regarding foreign bank accounts. The Tribunal found that the accounts were opened and operated by the assessee's parents during their lifetime, with deposits made prior to 2010. Evidence confirmed the father conducted business in Sudan under the trade name "BABU" and the mother independently managed financial affairs as shown by passport entries. The ITAT recognized the inherent difficulty for the assessee to provide complete documentation for transactions managed by deceased parents. Since the deposits originated from income earned abroad by the parents, not from undisclosed Indian income, the Tribunal concluded the Black Money Act was inapplicable and directed deletion of the additions.
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• Tax Implications for Cooperative Sugar Factory Selling Sugar at Concessional Rates Under Section 79(A)

  Case-Laws - AT : The ITAT set aside the CIT(A)'s order regarding the sale of sugar at concessional rates by a cooperative sugar factory. While acknowledging the customary practice of selling sugar at concessional rates to farmers, the Tribunal noted that the assessee failed to specify the number of members and non-members who received such concessions. The Sugar Commissioner's directions under Section 79(A) of Maharashtra Co-operative Societies Act, 1960 permitted sale of maximum 5 kg sugar monthly at concessional rates only to members who supplied sugarcane. The matter was remanded for denovo adjudication, requiring CIT(A) to analyze specific facts in light of the Supreme Court's decision in Krishna SSK Ltd. Appeal allowed for statistical purposes.
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• Penalty under Section 271AAB deleted as AO failed to satisfy statutory requirements for seized cash during search operation

  Case-Laws - AT : The ITAT allowed the assessee's appeal and deleted the penalty imposed under section 271AAB regarding seized cash during a search operation. The Tribunal found that the AO failed to satisfy the statutory requirements under section 271AAB. The ITAT distinguished the present case from Pr. CIT v. Sandeep Chandak, noting that the Revenue's reliance on Veena Estate Pvt. Ltd. was misplaced as that decision did not specifically address search penalties under section 271AAB. The Tribunal also observed that the main appeal in the Veena Estate case remained pending before the Bombay HC. Consequently, the impugned penalty was deleted due to the AO's failure to fulfill the necessary conditions under section 271AAB.
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• Parking Receipts Classified as Business Income, Not Rental Income; Depreciation Allowed Under Section 32 for Parking Facilities

  Case-Laws - AT : The ITAT ruled that car parking receipts should be treated as business income, following precedents established in Radhasoami Satsang and National Leasing Limited cases. Depreciation claimed under s.32 on the building used for car parking was allowed, as the Tribunal determined parking facilities were incidental to the assessee's main hotel business. However, depreciation on plant and machinery for garden and clubhouse maintenance was denied since the assessee failed to meet the mandatory conditions of s.56(2)(ii) & (iii) and s.57(ii) by not showing related income. Regarding disallowed expenditures (legal fees, repairs, maintenance), the ITAT directed these expenses be allowed under s.37(1), rejecting the AO's contention that such expenses should be borne by the lessee (Mars Enterprises).
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• Tax Authorities Cannot Rely on Uncertified Foreign Bank Documents to Prove Undisclosed Assets Under Black Money Act

  Case-Laws - AT : In a case concerning alleged undisclosed foreign assets under the Black Money Act, the ITAT ruled in favor of the assessee. The Tribunal found that the AO had relied solely on uncertified documents received from a foreign government under DTAA without verifying their authenticity. The assessee had categorically denied any connection with the foreign bank accounts during sworn testimony. The ITAT emphasized that under the Banker's Book Evidence Act 1891, bank records must be properly certified to be admissible as evidence. Without authenticated copies or corroborating evidence, the revenue failed to establish the assessee's beneficial ownership of foreign assets. Consequently, the appellate order was set aside.
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Customs

• Suspension of Sudharsan Logistics' CFS Operations Under Section 45 of Customs Act and Regulation 11(2) of HCCAR

  Circulars : The custodianship of Sudharsan Logistics Pvt. Ltd. CFS, Chennai, previously granted under Section 45 of Customs Act, 1962 via Public Notice No. 213/2015, has been suspended effective March 14, 2025 pursuant to Regulation 11(2) of HCCAR, 2009. While fresh receipt of export/import goods has been halted immediately, goods already in custody prior to suspension may still be cleared during official hours after proper customs verification. This exception applies only to existing inventory and shipments with bills of entry or shipping bills filed before the suspension date. The suspension remains in effect until further orders from the Commissioner of Customs.
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• Exporters Must Submit e-BRCs or Repay Drawback Amounts with Interest Under Rule 18 During BRC Compliance Drive

  Circulars : Chennai Customs has initiated a BRC Compliance Drive from January 29 to February 28, 2025, requiring exporters to submit proof of export sale proceeds realization. Analysis via ADVAIT system revealed numerous cases where proceeds remain unrealized beyond FEMA's mandated period. Consequently, drawback amounts for these exports are recoverable under Rule 18 of Customs, Central Excise Duties Drawback Rules, 2017, with applicable interest per Customs Act SS75A(2). Affected exporters must submit e-BRCs or repay drawback amounts with interest through ICEGATE's online payment facility. The Commissioner has published lists of non-compliant shipping bills on the Chennai Customs portal and established a dedicated BRC Cell for verification and case closure.
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• E-Bike Components Without Battery Pack Cannot Qualify for Reduced Customs Duty Under Notification 50/2017-Cus

  Case-Laws - AT : CESTAT ruled that imported e-bike components without battery pack or electric compressor do not qualify for reduced duty rates (15% or 25%) under S.No. 531A(1)(a) or (b) of Notification No. 50/2017-Cus. The tribunal rejected appellant's claim that goods declared as "E-Bike in CKD Condition" qualified under the notification, as the examination revealed only parts like plastic cover, chassis, disc brake, shocker, front fork, seat, wheel rim, converter, and controller. Since the shipment lacked the battery pack (either disassembled or preassembled), the standard 50% duty rate applied. However, CESTAT remanded the case to the original adjudicating authority to determine whether the goods could be classified under CTH 87141090 as e-bike parts.
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• Betel Nuts Can Not be Confiscated as Department Failed to Prove Foreign Origin Under Section 123 of Customs Act

  Case-Laws - AT : CESTAT held that the Department failed to establish the foreign origin of seized betel nuts, which is not a notified item under Section 123 of the Customs Act, 1962. The tribunal ruled that the Arecanut Research and Development Foundation (ARDF) report alone was insufficient evidence, as ARDF is not a government-accredited organization for issuing certificates of origin, following the precedent set in Maa Kamakhya Trader v. Commissioner of Customs. Without corroborative evidence beyond mere suspicion, the goods were not liable for confiscation. Consequently, the redemption fine and penalty under Section 112(b) were set aside, and the appeal was allowed.
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• Gold Seizure Overturned: Commissioner's Order Lacked Evidence on Manufacturing Equipment for Export Obligations Under Advance Authorization

  Case-Laws - AT : CESTAT allowed appellant's appeal for release of 53 kgs of gold seized by DRI. The Tribunal found that the Commissioner's order lacked evidentiary basis, particularly regarding the allegation that premises lacked fully mechanized jewelry manufacturing equipment. The panchanama clearly documented two jewelry manufacturing machines on the fifth floor, which the Commissioner erroneously assumed were not fully mechanized without proper verification. The gold was detained on 17.08.2020, preventing fulfillment of export obligations under the Advance Authorization. The Delhi HC had previously ruled that appellant could apply for extension/revalidation of the Advance Authorization License after adjudication of the show cause notice, acknowledging the appellant was prevented from exporting due to the seizure.
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• Importer's Valuation Challenge Fails After Previously Accepting Higher Price for Identical Goods Under Provisional Assessment

  Case-Laws - AT : CESTAT held that appellant's challenge to valuation enhancement failed as they had previously imported identical goods (4000 oath tokens) at USD 50 but later declared similar goods at USD 6.5. Having previously accepted the USD 50 valuation, appellant cannot now object to this basis for redetermination. However, since the assessments were provisional (as marked on the bills of entry), the tribunal ruled that investigation and penalty imposition were premature without finalized assessments. The tribunal allowed the appeal by way of remand, affirming the Commissioner's redetermined valuation while recognizing the provisional nature of the assessment precluded penalties at this stage.
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• Demand for IGST, Interest, and Penalties Set Aside as Show Cause Notice Barred by Limitation

  Case-Laws - AT : CESTAT set aside the demand of differential IGST, interest, redemption fine, and penalty against the appellant. The tribunal held that the show cause notice issued on 29.07.2020 for imports that occurred between November 2017 and January 2018 was barred by limitation. Following precedent in DIC India Limited, CESTAT determined that re-classification of imported goods based on test reports was not sustainable. The tribunal ruled that the extended period of limitation was not invokable, rendering the proceedings against the appellant unsustainable. The appellant's classification under Chapter 86 was upheld and the appeal allowed.
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• Customs House Laboratory Reports Deemed Unreliable Evidence Due to Cryptic Content and Significant Delays

  Case-Laws - AT : CESTAT ruled that Customs House Laboratory reports were unreliable evidence due to cryptic content and significant delays in delivery (approximately 1-8 months after sampling). Following precedent from Moorgate Industries, the Tribunal determined the reports lacked proper testing protocols and methodology details. Since samples were drawn per International Standards but test reports were deficient, they could not justify rejection of transaction value or support additional customs duty demands. The Tribunal held that the appellant's duty payment based on transaction value was correct. All penalties were dropped and the impugned orders were set aside, with the appeal being allowed.
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Corporate Law

• Foreign Arbitral Award of EUR 5.5 Million Enforced Despite FEMA and Double Recovery Objections

  Case-Laws - HC : The HC enforced a foreign arbitral award requiring JD to pay EUR 5.5 million to DH. JD's objections regarding FEMA violations were dismissed due to RBI's post facto approval. The court rejected JD's argument about potential "double dip" recovery from both Minda Germany's liquidator and Minda India, noting that the Settlement Agreement constituted the entire agreement between parties and expressly waived all prior claims. The court found JD's objections to enforcement lacked bona fides, as JD had knowingly entered into the settlement and consented to the award with full awareness of the previous Bilgery Settlement. The HC directed enforcement of the foreign award as a decree, with JD having already deposited approximately Rs. 52 Crores with the court registry.
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State GST

• West Bengal GST Amendment Extends ITC Claim Deadline to November 30, 2021 for FY 2017-18 to 2020-21

  Circulars : The WBGST Act was amended to retrospectively extend the time limit for claiming input tax credit for financial years 2017-18 through 2020-21 until November 30, 2021, and to establish special provisions for taxpayers whose registration was cancelled and subsequently revoked. The DCT clarified implementation procedures across various scenarios: ongoing investigations, pending demand notices, cases under adjudication, appellate proceedings, and revision proceedings. Taxpayers with final orders confirming demands for improper ITC claims may apply for rectification within six months from October 8, 2024. While no refund is available for tax already paid or ITC reversed due to these amendments, pre-deposits made during appeals are refundable if decided favorably.
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• GST Interest and Penalty Waiver Scheme Offers Relief for 2017-20 Tax Demands if Paid by March 2025

  Circulars : The WBGST Act amendment provides a waiver scheme for interest and penalties on tax demands for FY 2017-18 to 2019-20. Taxpayers must pay the full tax amount by March 31, 2025 to qualify. For cases where ITC was denied solely due to Section 16(4) violations but now allowed under retrospectively inserted Sections 16(5) and 16(6), taxpayers may deduct such amounts from their payment. Applications must be filed in Form GST SPL-01 or SPL-02 depending on case status. The proper officer must issue an order within prescribed time limits or the application is deemed approved. No appeal lies against approval orders, though rejection orders can be appealed. The scheme covers IGST and Compensation Cess but excludes import IGST under Customs Act.
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• GST Clarification: Pepper at 5%, Agriculturists Exempt, Popcorn Rates Vary, AAC Blocks at 12%

  Circulars : The CBIC circular, adopted by Maharashtra State Tax, clarifies several GST classification issues. Pepper of genus Piper attracts 5% GST, with agriculturists exempt from registration when supplying dried pepper from their cultivations. Similarly, agriculturists supplying raisins are exempt from GST registration. Ready-to-eat popcorn with salt and spices attracts 5% GST (unpackaged) or 12% GST (packaged/labeled), while caramel popcorn attracts 18% GST. Past classifications until February 14, 2025 are regularized on an "as is where is" basis. Autoclaved aerated concrete blocks with over 50% fly ash content attract 12% GST. The amended compensation cess for utility vehicles with specific engine capacity, length, and ground clearance applies from July 26, 2023.
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• Late Fee Under GST Section 47(2) Applies to Incomplete Annual Returns Without GSTR-9C for High-Turnover Businesses

  Circulars : The CBIC clarified that late fee under section 47(2) of the CGST Act applies to delayed filing of complete annual returns under section 44, which includes both FORM GSTR-9 and GSTR-9C (where required). Late fee is calculated from the due date until the complete return is furnished. For taxpayers with aggregate turnover exceeding the threshold (5 crore post-August 2021), annual return filing is incomplete without GSTR-9C. Per Notification No. 08/2025-Central Tax, excess late fee for financial years up to FY 2022-23 is waived if GSTR-9C is filed by March 31, 2025, with no additional fee beyond what was payable up to the GSTR-9 filing date. No refunds are available for late fees already paid.
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• Maharashtra State Tax Commissioner Adopts CBIC Circular 245/02/2025-GST Clarifying Payment Aggregator Exemptions and Penal Charges

  Circulars : The Commissioner of State Tax, Maharashtra has adopted CBIC Circular No. 245/02/2025-GST dated January 28, 2025, making it applicable to the MGST Act, 2017. The circular provides several GST clarifications: penal charges levied by Regulated Entities per RBI directives are not subject to GST; Payment Aggregators qualify for GST exemption under Sl. No. 34 of notification No. 12/2017-CTR; GST payments are regularized for research services by Government Entities (2017-2024) and skilling services by NSDC-approved Training Partners (2024-2025); facility management services to MCD are GST-taxable; DDA is not a local authority under GST law; and various other GST regularizations for composition levy taxpayers and electricity utilities.
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IBC

• Power Companies Must Pay Fuel Surcharges Despite Resolution Plan as They Are Not Pre-Insolvency Liabilities

  Case-Laws - AT : The NCLAT upheld that Fuel Surcharge (FS) and Special Fuel Surcharge (SFS) are statutory charges that become due only upon billing, and cannot be considered pre-insolvency liabilities extinguishable under a resolution plan. These charges, arising from variations in power purchase costs and Supreme Court decisions on change in law, are recovered in installments as mandated by RERC. The Tribunal found no conflict between the Electricity Act and IBC, applying harmonious construction between the statutes. The appellant's contention that Section 238 of IBC overrides the Electricity Act was rejected as no specific conflicting provision was identified. The appellant must pay outstanding FS and SFS within 60 days or face penalties under the Electricity Act.
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• Resolution Applicant Entitled to Pursue Tea Garden Lease Renewals After CIRP Approval Under IBC

  Case-Laws - AT : Following the approval of a Resolution Plan in the Corporate Debtor's CIRP, the NCLAT dismissed an appeal challenging provisions that permitted the Successful Resolution Applicant (SRA) to pursue tea garden lease renewals. The Tribunal held that the SRA, having stepped into the Corporate Debtor's position, was entitled to pursue pending renewal applications or file new ones where necessary. The Adjudicating Authority's direction was limited to granting the right to pursue renewals without expressing any opinion on the merits of such applications, which remain within the State Government's domain. The Tribunal clarified that only stakeholders with direct interest in the CIRP have standing to challenge the Resolution Plan, and affirmed that the state's authority over lease decisions remains unaffected.
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Indian Laws

• Section 148 NI Act: Court Sets Aside Order Requiring 20% Compensation Deposit Due to Insufficient Reasoning

  Case-Laws - HC : The HC allowed the petition challenging the ASJ's orders requiring deposit of 20% compensation under Section 148 of the NI Act. The Court found that the ASJ's reasoning was insufficient, as neither the NI Act's presumptions nor the petitioner's conviction by the MM constituted adequate grounds for mandating the deposit at the appeal's threshold. The Court determined that requiring such deposit would effectively prejudge the pending appeal. The HC concluded that the ASJ failed to provide clear findings regarding whether the petitioner had established exceptional circumstances warranting waiver of the deposit requirement, rendering the impugned orders inadequate in their reasoning and justification.
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• Indian Railways Cannot Be Forced into Arbitration with Subcontractor Despite Direct Payments for Hospital Project

  Case-Laws - SC : The SC held that the second respondent, appointed by M/s Pratibha Industries Limited to perform electrical work on a hospital construction project for the appellant, was not a party to the arbitration agreement. Direct payment by the appellant to the second respondent did not make the latter a beneficiary under the contract containing the arbitration clause. The High Court erred in its determination. The SC ordered that any amounts deposited by the second respondent toward arbitration costs with the Delhi International Arbitration Centre should be refunded upon proof of payment being furnished. The application was disposed of accordingly.
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Service Tax

• Composite Advertising Contracts: Service Tax Demand Set Aside as Proper Separation of Goods and Services Established

  Case-Laws - AT : CESTAT ruled in favor of the appellant, setting aside the service tax demand of Rs 5,94,38,654/- after finding no discrepancy between Balance Sheet and ST-3 returns once adjustments for sale of goods (Rs 13,35,68,175/-) and services under negative list (Rs 30,42,96,081/-) were made. The Tribunal also overturned the denial of CENVAT credit of Rs 97,36,884/-, recognizing that leasing space for billboards constituted legitimate input services for providing advertisement services. The court determined the composite contract properly separated advertisement services from goods sold, with appropriate service tax and VAT applied to respective components, consistent with Imagic Creative precedent. Late fees were invalidated due to reasonable delay caused by delayed collection of dues. The appeal was allowed with consequential reliefs.
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• Cricketer's Brand Endorsement Charges Not Subject to Additional Service Tax Under "Qui Facit Per Alium" Principle

  Case-Laws - AT : CESTAT ruled in favor of the appellant, quashing the service tax demand on brand endorsement charges. The Tribunal found that tax was properly discharged either by the appellant directly or through agents under the legal principle "Qui Facit Per Alium Facit Per Se." Regarding IPL playing fees, the appellant had self-assessed and paid applicable taxes with interest, rendering the demand unsustainable. The Tribunal clarified that match winning bonuses were not taxable as they did not constitute service rendering. CESTAT rejected revenue's allegations of fraud or suppression, finding no evidence of intent to evade payment, thereby invalidating the extended limitation period. Consequently, all penalties under Sections 76, 77, and 78 of the Finance Act were set aside.
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Central Excise

• Limitation Period for CENVAT Credit Claims Applies Regardless of When Imports Occurred Under Rule 4

  Case-Laws - HC : HC dismissed the petition challenging the Settlement Commission's rejection of CENVAT credit claims for CVD paid on imported capital goods. Following Osram Surya, the court held that the limitation period introduced via amendment to Rule 4 of CENVAT Credit Rules applies to claims made after the amendment came into force, regardless of when imports occurred. The petitioner's failure to fulfill export obligations under EPCG scheme for four out of nine licenses, despite receiving an extended period of 8 years, and payment of duty only after DRI investigation commenced, further justified the rejection. The court emphasized the finality of settlement proceedings under Section 127(j) of the Customs Act.
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• Refund Claim Cannot Be Reopened Through Piecemeal Adjudication After Partial Allowance By First Appellate Authority

  Case-Laws - AT : CESTAT held that the department improperly attempted to reopen a previously settled refund claim through piecemeal adjudication. The Tribunal applied the doctrine of res judicata, noting that Revenue failed to challenge the First Appellate Authority's order which had partially allowed the appellant's claim. The department's subsequent review violated judicial discipline and fundamental principles of justice administration. The Tribunal emphasized that an earlier adjudication is conclusive on the same subject matter between the same parties, and that no person should be vexed twice for the same cause. The impugned order was set aside, with the appeals allowed and consequential relief granted to the appellant.
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Case Laws:

• GST

• 2025 (3) TMI 837
  Maintainability of petition - alternative remedy of appeal under Section 107 of GST Act - Challenge to demand against the petitioner which is based on presumptions and surmises, without concrete evidence on record - HELD THAT:- The only plea raised in response to the show cause notice has been that the Partnership Deed, which was annexed with the application seeking registration, also contained particulars about the fourth site and, therefore, it cannot be said that the petitioner did not disclose the said site and consequently the charge against the petitioner cannot be sustained. The plea raised is ex facie baseless. Merely because the Partnership Deed makes reference to premises other than qua which the registration is sought, the Registering Authority is not expected to register the said premises also for the purpose of GST. It is for the party to fairly disclose all the sites wherein the business is being conducted by the applicant and, therefore, despite the fact that business was being conducted at the fourth site and only three sites were got registered and such registration continued for over six years, and no attempt was made by the petitioner to get the said premises included for the purpose of GST, the attempt made to shift the burden on the respondents in not registering the same, cannot be countenanced. Except for taking the said plea, no other issue has been raised in the petition pertaining to the determination made by the competent authority except for a vague submissions regarding not considering the contentions raised and argued in support of the case. For the said plea raised, which would essentially be factual, it was required of the petitioner to file appeal under the provisions of the Act which, for reasons best known to the petitioner, it has not availed and even the present petition has been filed after passage of over one year since passing of the order dated 13.02.2024, on 28.02.2025. No case for invoking jurisdiction of this Court under Article 226 of the Constitution of India has been made out in the petition. There are no reason to interfere in the order impugned passed by the competent authority. The petition is, therefore, dismissed.

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• 2025 (3) TMI 836
  Validity of common SCN issued u/s 74 of the CGST Act, 2017 - non-compliance with Rule 142 of the CGST Rules, 2017 - violation of principles of natural justice - HELD THAT:- It is reflected from record that before this court could hear the case on the question of admission and interim relief, Respondent No. 2 has passed common final order dated 21.01.2025 during the pendency of these petitions to which challenge has been made by the petitioners in their respective petitions by carrying out amendment in pursuance of order dated 23.01.2025 of this court, mainly on the ground that since the show cause notice was itself without jurisdiction and was issued without complying with mandatory provision of Rule 142 of CGST Rules, the subsequent order is non est in light of the principle that if initial action is not in consonance with law, all subsequent and consequential proceedings would fall through for the reason that illegality strikes at the root of the order. In such a fact-situation, the legal maxim sublato fundamento cadit opus meaning thereby that foundation being removed, structure/work falls, comes into play and applies on all scores in the present case. Also, Once the basis of a proceeding is gone, all consequential acts, actions, orders would fall to the ground automatically and this principle is applicable to judicial, quasi-judicial and administrative proceedings equally. It is also a settled legal proposition that if an order is bad in its inception, it does not get sanctified at a later stage. A subsequent action/development cannot validate an action which was not lawful at its inception, for the reason that the illegality strikes at the root of the order. Another ground for challenge of common final order dated 21.01.2025 which has been raised is that the petitioners herein specifically sought right to cross examine witnesses whose testimony are being relied upon by the Respondents but admittedly such right was not afforded to the petitioner despite making multiple request and failure to grant opportunity of cross examination is violative of principles of natural justice and on this ground common final order dated 21.01.2025 is bad in law and liable to be set aside. This court is of the considered opinion that prima facie case exists in favour of the petitioners and if the common impugned final order dated 21.01.2025 is not stayed during the pendency of the present petitions then the petitioners would suffer irreparably - these petitions are admitted for final hearing and it is directed that effect and operation of common impugned final order dated 21.01.2025 shall remain stayed, pending adjudication of these petitions. Conclusion - i) The non-compliance with Rule 142 of the CGST Rules potentially invalidates the show cause notice, echoing the consistent judicial view that such procedural lapses are fatal to the validity of notices. ii) The invocation of Section 74 without allegations of tax evasion is inappropriate. These petitions are admitted for final hearing and it is directed that effect and operation of common impugned final order dated 21.01.2025 shall remain stayed, pending adjudication of these petitions.

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• 2025 (3) TMI 835
  Time limitation for filing refund claim - seeking to direct the first respondent to extend the benefit of proviso introduced under Rule 90(3) of the Central Goods and Services Tax (CGST) Rules, 2017 to exclude the number of days from the date of filing of refund claim to the date of issue of Deficiency Memo for the purpose of computation of limitation - applicability and interpretation of Paragraph 12 of Circular No.125/44/2019 issued by the Central Board of Indirect Taxes and Customs (CBIC) regarding the treatment of refund applications filed after rectification of deficiencies. HELD THAT:- Admittedly, the exports were made by the petitioner during July 2017, August 2017 and September 2017. Refund claims were filed during the months of September 2018 and October 2018. These refund claims were filed in the portal and were thus prima facie in time. This was in accordance with Circular No.79/53/2018-GST dated 31.12.2018 which was vague. It specified that the refund application in FORM GST RFD-01A, along with all supporting documents, shall be submitted electronically. Since the petitioner has effected Zero Rated Supplies within the meaning of Section 16(1) of IGST Act, 2017, the relevant date during the period in dispute would be 2 years from the end of the tax period .Admittedly, in this case, the refunds are all unutilized Input Tax Credit on the Zero Rated Supply (Exports) under Section 16(3)(a) of IGST Act, 2017 - The amendment to Explanation 2(e) to Section 54 of CGST Act, 2017 with effect from 01.02.2019 vide N/N. 02/2019-CT dated 29.01.2019 pursuant to CGST Amendment Act, 2018 (31/2018) dated 30.08.2018 was intended clarify what was explicit in Clause (ii) to Proviso to Section 54(3) of CGST Act, 2017. A reading of the limitation under Explanation 2(a) to Section 54 of CGST Act, 2017 and Explanation 2(e) to Section 54 of CGST Act, 2017 till 31.01.2014 indicates that they provide two periods of limitation namely for refund of unutilised Input Tax Credit. As per Circular No.79/53/2018-GST dated 31.12.2018, an exporter was required to file refund claim / application FORM GST RFD-01A on the common portal and take a print out of the same and submit it physically to the jurisdictional tax office along with all supporting documents. Thus, refund claims were refiled manually along with supporting documents on 28.03.2019. These refund claims were however returned for defects. Thus, they were thereafter re-presented on 18.10.2019 and were acknowledged on 01.11.2019 - The amendment to Clause 2(e) to Section 54(14) of CGST Act vide Notification No.02/2019-CT dated 29.01.2019 is not relevant for the purpose of computation of limitation. Proviso to Rule 90(3) was inserted with effect from 18.05.2021 vide Notification No.15/2021-CT dated 18.05.2021. It was not in the statute where refund claims were originally filed or later represented. Therefore, it cannot be given retrospective effect. Conclusion - i) The refund claims filed by the petitioner were within the limitation period as per the statutory provisions of Section 54 of the CGST Act, 2017. ii) Circular No.125/44/2019 could not impose a fresh limitation period contrary to the statutory provisions. iii) The proviso to Rule 90(3) of the CGST Rules, 2017, introduced in 2021, was not applicable retrospectively to the petitioner s claims. iv) The amendment to Explanation 2(e) to Section 54 did not affect the limitation period for the petitioner s claims, as they were filed prior to the amendment. Petition dismissed.

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• 2025 (3) TMI 834
  Violation of principles of natural justice - assessment orders impugned have been passed without granting a personal hearing - HELD THAT:- The impugned orders and the orders in Form GST DRC-07 dated 30.10.2023 and 21.04.2024 (Annexure P-5 series) respectively, are set aside on violation of the statutory mandate for notice of personal hearing and the matter is remitted to the Assessing Officer directing the assessee to appear before the Assessing Officer on 15.01.2025. If he appears on the date notified, or on a date once adjourned, the Assessing Officer after hearing the assessee shall pass orders within three months from the date of this judgment or within the limitation period provided, if not expired, whichever falls later. Petition disposed off.

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• 2025 (3) TMI 824
  Denial to entertain the writ petition only on the ground that petitioner alone cannot be singled out in the circular trading adjudication for the purpose of quashing of SCN - it is submitted that this petition may kindly be restored so that petitioner can also challenge the final order passed by adjudicating authority by way of amendment in writ petition along with other four assessee s - HELD THAT:- It is correct that issue of circular trading is liable to be decided in presence of all the five assessee s, hence in order to participate along with four other assessee s, the petition is liable to be restored in view of change circumstance. In view of the above, the order 17.12.2024 is hereby recalled and the writ petition no.8015/2024 is restored to its original number. The review petition is disposed off.

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• 2025 (3) TMI 823
  Maintainability of petition - alternative efficacious remedy is available to the petitioner to challenge the impugned orders-in-original or not - HELD THAT:- In view of the decision of the Hon ble Apex Court in the case of THE ASSISTANT COMMISSIONER OF STATE TAX AND OTHERS VERSUS M/S COMMERCIAL STEEL LIMITED [ 2021 (9) TMI 480 - SUPREME COURT] , alternative efficacious remedy is available to the petitioner to challenge the impugned orders-in-original and therefore, the petitioner is relegated to avail such opportunity. The petitions are not entertained only on the ground of alternative remedy available to the petitioner. Petition disposed off.

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• 2025 (3) TMI 822
  Seeking quashment of FIR for the commission of offences punishable under Sections 420, 467, 468, 471 120-B of the Indian Penal Code - constitutional validity of Section 132(6) of the Central Goods Services Tax Act, 2017 - HELD THAT:- In the present case, the petitioner is not being prosecuted for any offence under the CGST Act for which the Enforcement Case Information Report (ECIR) was registered, and the investigation is ongoing on. The present FIR is registered under various sections of I.P.C. as the present petitioner has fabricated a large number of tax invoices to show on record vide circulation of Dabang Duniya. The GST evasion of Rs.500 crore is said to have been adjusted in the sale of Daband Duniya by showing the artificial sale of one lakh copies per day, whereas the actual sale was five to eight thousand. The GST Authorities also found various fake invoices to transform black money into white, therefore, this case is triable under Sections 420, 467, 468, 471 120-B of the IPC and not under the provisions of the CGST Act. The only link is that the GST amount which the petitioner did not pay to the Government was tried to make white by his sister concern Daband Dunia Publication Private Limited owned by the present petitioner. There are no ground to interfere with the investigation which is going on against the present petitioner. Conclusion - i) The petition seeking quashment of the second FIR is dismissed, as the FIR addressed separate criminal conduct under the IPC. ii) The challenge to the constitutional validity of Section 132(6) of the CGST Act is rejected, affirming its protective purpose. Petition dismissed.

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• 2025 (3) TMI 821
  Competent authority under the GST-STD Act - HELD THAT:- The competent authority under the GST-STD Act shall deal with the glimpse of the petitioner in accordance with law and after taking into account the Finance (2) Act of 2024. Petition disposed off.

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• 2025 (3) TMI 820
  SCN issued u/s 73 of the CGST Act was within the jurisdiction of the authority - irregularity in the transitional credit of CGST availed under TRAN 1 - HELD THAT:- An identical issue was decided by the Hon ble Division Bench of the High Court of Jharkhand in the case of Usha Martin Limited vs. Additional Commissioner, Central GST and Excise, Jamshedpur and Ors. [ 2022 (11) TMI 1266 - JHARKHAND HIGH COURT ]. In paragraph 9 of the said judgment, the contention raised by the Department has been noted and in fact, the learned Senior Standing Counsel appearing for the respondents/Department has made identical submission before us to sustain the impugned show-cause notice. The Hon ble Court firstly considered as to the scope of entertaining a writ petition under Article 226 of the Constitution challenging a show-cause notice when the normal course to be adopted is to submit a reply and face the adjudication proceedings. The Court, after taking note of the several decisions of the Hon ble Supreme Court held that there is always an exception to the rule of alternate remedy but when the orders of proceedings are wholly without jurisdiction, there is an exception drawn and writ petitions were held to be maintainable - Thus, when a jurisdictional issue is being canvassed, the alternate remedy provided under the CGST Act would not operate as a restriction for this Court to decide upon the jurisdiction of the respondents to issue the show-cause notice invoking the provisions of the CGST Act. The Court in the case of Usha Martin Limited vs. Additional Commissioner, Central GST and Excise, Jamshedpur and Ors. noted section 174 of the C.G.S.T Act and other Constitutional provisions and held: it is obvious the new regime had to make provisions for the transactions which remained incohate under the existing law. It is also a well-settled legal position that on account of the new legislation the implementation of the G.S.T. regime could not be left to a realm of uncertainty. For a violation under the existing law, parallel proceedings could not be conducted under the existing law at the behest of jurisdictional officer and at the same time under the new law at the instance of another jurisdictional officer of the G.S.T. Act. Conclusion - There are no hesitation to hold that the impugned show-cause notice is without jurisdiction. Petition allowed.

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• 2025 (3) TMI 819
  Cancellation of Petitioner s registration due to failure to furnish returns for a continuous period of 6 months - Petitioner submitted that the reasons are cryptic, if not lacking and the petitioner s case on merits has not been considered at all - violation of principles of natural justice - HELD THAT:- Neither the contention of the petitioners that all the dues have been paid has been considered by the authorities which cancelled the registration, nor the cogent grounds on delay, namely, the medical issues, are taken into consideration. In Aggarwal Dyeing and Printing Vs. State of Gujarat [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] , this Court had held that The procedural aspects should be looked into by the authority concerned very scrupulously and deligently. Why unnecessarily give any dealer a chance to make a complaint before this Court when it could have been easily avoided by the department. The impugned order dated 14.11.2023 passed by the Appellate Authority is quashed and set aside and the matter is remanded back to the Assessing Officer at the show cause notice stage to enable the respondent-authorities to pass a fresh order in accordance with law after conducting a fresh adjudication, by providing an opportunity of hearing to the petitioner and giving detailed reasons thereafter. The same may be done within a period of twelve (12) weeks from the date of receipt of a copy of this order. Petition allowed.

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• 2025 (3) TMI 818
  Retrospective cancellation of the petitioner s GST registration - absence of reasons in the original SCN - violation of principles of natural justice - HELD THAT:- It becomes pertinent to note that the proceedings had come to be initiated pursuant to a Show Cause Notice (SCN) dated 19 September 2024. That notice embodied no intent or disclosure of the respondents contemplating cancellation from a retrospective date. It becomes apparent that absence of reasons in the original SCN in support of a proposed retrospective cancellation as well as a failure to place the petitioner on prior notice of such an intent clearly invalidates the impugned action. WThe writ petition is entitled to succeed on this short ground alone. The writ petition is allowed by modifying the impugned order and providing that the cancellation of the petitioner s GST registration shall come into effect from the date of the SCN i.e. 19 September 2024.

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• Income Tax

• 2025 (3) TMI 833
  Validity of reopening of assessment as contradicted u/s 149 - revenue vehemently argues that the impugned order being contrary to the scheme of Section 149, once an amount of Rs. 50.00 lakh is ascertained as escaped income for assessment, the interference of the Writ Court was uncalled for - assessee, per contra, submits that merely because the concerned conveyance mentions Rs. 55.00 lakh, that itself cannot be taken as the income escaping assessment inasmuch as the cost of acquisition to be deducted from it and if that is done, it would fall below the ceiling limit of Rs. 50.00 lakh HELD THAT:- We are broadly in agreement with the views of the learned Single Judge, inter alia, to the effect that while assessing the quantum of escaped income in matters like this, the amount mentioned in the registered conveyance cannot be straight away taken without deducting the cost of acquisition therefrom. This apart, as rightly submitted by assessee, the Jabalpur Bench of Madhya Pradesh High Court, in the case[ 2023 (8) TMI 1027 - MADHYA PRADESH HIGH COURT] followed the impugned order of the learned Single Judge of this Court [ 2023 (6) TMI 49 - KARNATAKA HIGH COURT] and later the challenge by the Revenue before the Apex Court of the Country 2024 (9) TMI 1138 - SC ORDER] has been repelled. Appeal dismissed.

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• 2025 (3) TMI 832
  TP adjustment made to the arm s length price (ALP) of the international transactions carried out by the assessee with its Associate Enterprises (AE) in terms of section 92C - comparable selection - HELD THAT:- We direct the AO to include Nimbus Pipes Ltd. in the final comparable sets, and thereafter determine whether international transactions of the assessee were at ALP in accordance with law and rules in this regard.

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• 2025 (3) TMI 831
  Addition u/s. 68 of unsecured loan - HELD THAT:- Perusal of the appellate order clearly shows that three Remand Reports had been obtained from AO and every Loan creditor details were discussed by CIT(A) of his appellate order. Revenue has not placed on record any contra evidences of loans and repayments. Thus we do not find any infirmity in the order passed by Ld. CIT(A) on the genuineness of the loan transaction. Thus the deletion made by the CIT(A) does not require any interference. Therefore the Ground No. 2 raised by the Revenue is devoid of merit and the same is hereby dismissed. Addition on account of sundry creditors - HELD THAT:- There have been payments towards purchases of traded goods, i.e. fruits on wholesale basis. In case of Hotel German Palace, there were purchase of capital goods (i.e. movables like Air-conditioners, building material, etc.) and these creditors are categorized as Creditors for construction . Therefore, there appears no justification of disallowing the expenses incurred on capital goods. There are two other groupings i.e. Creditors for goods and creditors for expenses . Since the A.O. himself has satisfied with the details furnished during the remand report proceedings to which the appellant also agreed by offering some additional comments through rejoinder to remand report No.3, been left with no alternative but to agree with the A.O. Therefore, the total addition made by the A.O. by invoking the provisions of section 68 of the Act is deleted. Addition on account of estimated net profit u/s. 145A - HELD THAT:- AO without rejecting the books of accounts estimated the GP, whereas the GP rate declared by the assessee shows increase by 0.2% for the present year under consideration. Therefore CIT(A) deleted the addition which does not require any interference.

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• 2025 (3) TMI 830
  Short Term Capital Gain [STCG] - taxability related to transfer of share/interest on an ancestral immovable property (scheduled property) sold by assessee and ten (10) co-owners for a consideration of Rs 9.08 crores - transfer of property after reducing ad-hoc 10% of the consideration received towards cost of acquisition from the entire income from sale of immovable property HELD THAT:- Assessment order passed in the case of the present assessee, based on CIB information that the assessee has sold immovable property along with ten (10) other co-owners for a consideration of Rs.9,08,95,000/- and the assessee s share out of the above was Rs.82,62,181/- (Rs.9.08 crores/11), the AO s action perse of computing the STCG at Rs.74,36,863/- cannot be legally sustained for the simple reason that very same transfer of immovable property had been subjected to scrutiny after reopening the assessment in the case of assessee s sister (Smt P.Yasodha) and other heir Shri Parthasarathy Varadhan and similar additions made by the AO in the hands of both persons have been deleted by the CIT(A)-10, which has been accepted by the Department. Hence, the STCG computed on the transfer of property which took place on 17.02.2014 i.e. in AY 2014-15 in the relevant year i.e. AY 2016-17 is per-se erroneous and therefore, cannot be added in AY 2016-17. Therefore, action of the CIT(A) brushing aside the relevant documents filed by the assessee cannot be countenanced and therefore, we set aside the impugned order of the Ld.CIT(A); and restore it to the file of the JAO for a limited purpose i.e. to examine the veracity of the assesse s contention that she has not made any sale/transfer of any immovable property in the relevant year i.e. AY 2016-17; and if it is found that the assessee didn t undertake any transfer/sale of immovable property in AY 2016-17, then no capital gain to be taxed in the hands of the assessee for AY 2016-17; and if it is found that the assessee along with ten (10) co-owners have sold immovable property for Rs 9.08 Crs, in AY 2016-17, then AO to assess the capital gains from such transfer of property in accordance to law; after giving opportunity to assessee. Penalty u/s.271(1)(c) for concealment of income - HELD THAT:-Nassessee which emanates from the Assessment order u/s.147 r.w.s.144 of the Act dated 27.03.2022 which has been set aside back to the file of the JAO for limited purpose to examine whether assessee had carried out any transfer of immovable property in AY 2016-17; and if the answer is in the affirmative, then AO to assess the capital gains from such transfer of property and thereafter, the AO to proceed against the assessee in accordance to law for levy of penalty. then AO to assess the capital gains from such transfer of property; and if it is found that the assessee didn t undertake any transfer/sale of immovable property in AY 2016-17, then no capital gain to be taxed in the hands of the assessee for AY 2016-17, then no penalty to be initiated against the assessee for AY 2016-17. Therefore, impugned penalty confirmed by the Ld.CIT(A) is set aside back to the file of JAO with the liberty to proceed against the assessee (levy penalty) after the assessment if any framed against the assessee. Penalty u/s.271F - non-disclosure and non-filing of returns by the assessee - HELD THAT:- Penalty u/s.271F can be imposed only if the AO is able to show that assessee had in the first-place taxable income beyond the threshold limit, then only the fault can be attributed on the assessee for failure to file return of income u/s.139(1). And since, we have set aside the assessment back to the JAO to find an answer to the said question, the penalty levied u/s.271F of the Act cannot be sustained and therefore, it is set aside back to the JAO and he is at liberty to take action in this regard after assessment is made as ordered. Therefore, we set aside the impugned order of the CIT(A) and restore the same back to the file of the AO to take action after the assessment is made as directed for AY 2016-17.

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• 2025 (3) TMI 829
  Penalty u/s. 43 of the Black Money - failure to disclose foreign assets in the return of income - HELD THAT:- In the present assessment year, no fresh investment was made by the assessee and the previous investments made by the assessee were required to be disclosed during the year under consideration. Undoubtedly, the explanation of source of investment as per Sections 3 and 10 of B.M.A Act and failure to disclose as per Section 43 of B.M.A Act per se may be independent but both are required to be read together and find out the intention of the Legislation. In the present case, since the explanation relating to the source of investment has been accepted and therefore, the failure on the part of the assessee to disclose the assets for the year under consideration cannot be vitiated on account of malafide or an attempt to evade the rigours of the Act. No fresh investment has been made and all the investments made in the earlier years, simply have been continued in the year under consideration. All these aspects clearly show that there was bonafide mistake on the part of the assessee to mention and disclose the same in the return of income. In view of the above, the penalty imposed by the lower authority is required to be deleted. Respectfully, following the decision of Ocean Diving [ 2023 (12) TMI 54 - ITAT MUMBAI] and the judgment of Mylan Laboratories [ 2022 (1) TMI 1353 - TELANGANA HIGH COURT] , we hereby allow the appeal of the assessee.

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• 2025 (3) TMI 817
  Validity of notices issued u/s 153C within the prescribed time limits - Whether the petitioner was provided with an opportunity to challenge the satisfaction note? HELD THAT:- AO has given the opportunity to the petitioner to decide its course of action, and therefore, the petitioner has approached this Court by filing writ petition. Insofar as non-entertainment of further objections is concerned, we do not find any infirmity since at some stage the filing of objections to the proceeding has to stop. Otherwise, there will be no end to the petitioner s time and again filing objections and the officer passing order every time. Therefore, the contention raised by the petitioner on this issue for this Court to exercise its discretionary jurisdiction must also be rejected. Satisfaction note is not for all the assessment years, and in the absence of any co-relation of the document with the assessment years for which the notice is issued, the same constitutes a violation of condition of Section 153C - In our view, this would require examining the documents with the assessment year for which the notice is issued. This investigation of co-relation of the documents assessment year wise cannot be done by this Court and more so while exercising discretionary extraordinary jurisdiction under Article 226 of the Constitution of India. This factual co-relation must be done by the authorities under the Act and therefore the efficacious and alternate remedy is more appropriate for adjudication of this issue and this Court cannot be converted into the role of an assessing officer for carrying out this investigation. Therefore, even this submission is required to be rejected. Question of limitation is a mixed question of law and facts. Furthermore, Section 153B (1) (ii) provides that the period of limitation for assessing case of other persons referred to under Section 153C shall be the period of 12 months from the end of the financial year in which the last of the authorization for search under Section 132A was executed or 12 months from the end of the financial year in which books of accounts or documents or assets seized or requisition are handed over u/s 153C to the assessing officer having jurisdiction over such person whichever is later. To examine whether the limitation for deciding whether the assessment has become time-barred or not would require this Court to ascertain what was the last date of authorisation for search in the case of Alankit Group. We have not been shown by the petitioner the date of last authorisation. Therefore, it would not be appropriate for this Court to examine the issue of limitation raised in the present proceedings. It would be premature to presume that the assessment order passed under Section 153C would be against the petitioner. If during the assessment proceedings, and based on the submissions made by the petitioner, if the assessing officer is convinced on the merits of the case, then no prejudice would be caused to the petitioner. However, if the assessment proceedings are intricated at this stage, it would undoubtedly preclude the assessing officer from investigating. This is the case of search and seizure where huge unaccounted income in accommodation entry has been detected. In our view, this Court cannot exercise its discretionary jurisdiction in such type of cases by which the officer should be prevented to proceed with such type of assessment proceedings. The petitioner has relied upon various case laws. However, these are the case laws on the merits of the case. As observed above, the issues raised in this petition require investigation of facts and raised mixed questions of law and facts. We do not wish to exercise our discretionary jurisdiction by entering the arena of factual investigation. This course of action is best left for the authorities under the Act to be examined. We do not propose to deal with the case laws since as observed above, we are not inclined to entertain the present petition, but the petitioner is relegated to raise all the issues raised in these petitions before the authorities under the Act in accordance with law. WP dismissed.

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• 2025 (3) TMI 816
  Assessment u/s 153A - absence of incriminating material a completed assessment cannot be opened - CIT (A) and the ITAT deleted - HELD THAT:- We are of the view that the CIT(Appeals) as well as ITAT, after carefully scrutinizing the material collected by the AO has recorded a finding of the fact that other than the retracted statement no other evidence/material was relied upon by the Assessing Officer to invoke the addition. CIT (Appeals) and the ITAT were of the view that the said piece of evidence, i.e. retracted statement cannot be termed as incriminating material. Taking into consideration the above fact, we are of the view that the said finding of fact recorded by the Commissioner of Income Tax (Appeals) as well as ITAT is not liable to be interfered with in this appeal since this Court can only exercise jurisdiction when any substantial question of law arises.

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• 2025 (3) TMI 815
  Addition u/s 68 - unexplained cash credit - onus of proving the identity creditworthiness of the parties from whom the assessee received money and the genuineness of such transaction. HELD THAT:- Whether the tax recovery officer was an AO after referring to various statutory provisions which was held that the assessee was covered under clause (a) of sub-section (3) of section 143. Apart from that it was held that not only the tax recovery officer-10/tax recovery officer-4, Kolkata was fully empowered to pass the order u/s 143 and the question of the assessee raising the issue of jurisdiction beyond the prescribed time limit does not arise. Addition u/s 68 - ITAT deleted addition - Tribunal has stated that on perusal of the paper book and document three factors have been proved by the assessee. This, in our view, is wholly inadequate and insufficient for the tribunal to set aside the order passed by the appellate authority. Tribunal was required to examine the correctness of the factual findings recorded by the appellate authority and then recorded its views as to why it is not in agreement with the findings of the appellate authority. On reading of the impugned order it is seen that this aspect of the matter is conspicuously absent. The test of human probability was also applied and when done so it was held that high premium share defying logic. Thus, if the test of human probability is applied in the facts of the case on hand, it should have been established by the assessee as to why and for what reason the share subscription invested in shares of the assessee company at such huge premium despite the factual position being that the assessee company had no track record. Thus, we are of the view that tribunal did not go into all these aspects and proceeded to accept the case of the assessee solely by making certain observations with regard to the paper book which was filed by the assessee. Tribunal over-turning the order passed by the appellate authority was required to examine the correctness of the findings recorded by the appellate authority and then come to the conclusion why such findings are not acceptable and while doing so reasons have to be recorded in writing. In the absence of all these essential requirements, we have no hesitation to hold that the impugned order is not sustainable in law and the learned tribunal committed an error of law in allowing the assessee s appeal. Decided in favour of the revenue.

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• 2025 (3) TMI 814
  Condonation of delay in filing return of income for A.Y. 2020-21 u/s 119 (2) (b) - genuine hardship to justify the condonation of delay in filing the income tax return - HELD THAT:- As it is not in dispute that the petitioner is residing at USA and the transaction was entered by his late father on the basis of Power of Attorney executed by the petitioner. The petitioner therefore, could not file the return of income due to the Covid-19 Pandemic Situation at the relevant point of time. As per the Circular No. 9/2015 dated 09.06.2015, the respondent was required to exercise the power vested upon him u/s 119 (2) (b) of the Act and there is nothing on record to show that the petitioner is not entitled to the refund on the basis of the computation of income for the year under consideration. Petitioner was prevented by sufficient cause for not filing return in time and the delay caused in filing return ought to have been condoned by the respondent while exercising the powers u/s 119(2) (b) of the Act. Petition is allowed.

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• 2025 (3) TMI 813
  Reopening of assessment - initiation of reassessment action in the second round - reason to believe - AO in the first round had sought to invoke Section 148 relying upon the order of DRP to hold that the funds received by NNPLC, which was a wholly owned subsidiary of the petitioner, were actually the funds of the writ petitioner itself - A Special Bench of the Tribunal which had come to be constituted to examine that issue ultimately came to conclude that the petitioner could not be said to have extended a corporate guarantee to support the activities undertaken by NNPLC. HELD THAT:- As we view, the disclosures which are made in the reasons to believe, we find that the AO has yet again, relied upon and confirmed the formation of belief basis the view that had been expressed by the DRP of NNPLC being in abuse of organisation and legal form and allegedly set up without a reasonable business purpose. It has thus reiterated its earlier position that the money and funds which were held in NNPLC were in fact unaccounted income of the assessee and thus the provisions of Section 68 of the Act being attracted. We are undoubtedly confronted by a clear and categorical finding rendered in the first round of litigation and where the Supreme Court had in unequivocal terms held that the material on the basis of which the AO formed an opinion to reopen was sufficient. We are thus of the firm opinion that sufficient material existed before the AO and which would have justified the power to reassess being exercised. Whether entire action is based on a wholly incorrect reading of the DRP s order ? - As his submission that the said order has been misconstrued and misinterpreted and thus the impugned action liable to be set aside on this score. We find ourselves unable to sustain this submission bearing in mind the undisputed fact that this was not a contention raised, urged or canvassed either before this Court or for that matter before the Supreme Court [ 2020 (4) TMI 133 - SUPREME COURT] In fact the Supreme Court had answered question (i) in the affirmative upon noticing the reliance which was placed by the AO on the order of the DRP. The petitioner does not appear to have even argued that the conclusion drawn by the AO basis the order of the DRP was incorrect or arbitrary. It now essentially requires us to review and revisit the findings rendered in this context in the first round of litigation. We consequently find no justification to tread down this path. We find no merit in the challenge which stands raised to the reassessment action.

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• 2025 (3) TMI 812
  Reopening of assessment u/s 147 - notice beyond the period of four years - Reason to believe - HELD THAT:- Judgments of the Supreme Court in the case of Kelvinator [ 2010 (1) TMI 11 - SUPREME COURT ], Bimal Kumar Damani [ 2003 (2) TMI 49 - CALCUTTA HIGH COURT ], Srikrishna (P) Ltd. [ 1996 (7) TMI 2 - SUPREME COURT] ], Phool Chand Bajrang Lal [ 1993 (7) TMI 1 - SUPREME COURT ] Lakhmani Mewal Das [ 1976 (3) TMI 1 - SUPREME COURT ] and Calcutta Discount Co. Ltd. [ 1960 (11) TMI 8 - SUPREME COURT ] were taken into consideration by the Court and the re-assessments were ultimately quashed on the ground that the Department had not established any failure on the part of that assessee to make available relevant material for completion of assessment even at the original stage. As admitted and apparent position that the Department has not brought on record any material to establish failure of the Appellant to make a full and true disclosure, the assumption of jurisdiction under section 147 if held to be bad in law. Write-off of bad debts - In the present case, the assessing authority finds that the assessee has, during the year in question written off bad debts of a sum of Rs. 4.94 crores, restricted to a sum of Rs. 4.07 crores (incidentally, the assessee states that it has filed an appeal as against the said restriction which is pending before the Commissioner of Income Tax (Appeals)). With the aforesaid finding, the claim as regard bad debts is liable to be allowed applying the ratio of the judgement in TRF Ltd. [ 2010 (2) TMI 211 - SUPREME COURT ] Writ Court has proceeded on the basis that the assessee should be relegated to appeal. In light of the settled legal position as have we have adumbrated above, we see no necessity for the same

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• 2025 (3) TMI 811
  Commission income deemed to have been earned by the assessee from transactions involving penny stocks - HELD THAT:- We find that the AO had applied a commission rate of 3%, which was upheld by the CIT(A). During the appeal proceedings, the assessee placed reliance on the decision of the co-ordinate bench of the ITAT, which had adjudicated that the applicable commission rate should be 0.15% on the total sales and purchases, i.e., the total transaction value. Upon perusal, we find that the issue in question is covered by the decision of Mukesh Chokshi [ 2016 (5) TMI 1408 - ITAT, MUMBAI] ] and M/s Goldstar Finvest Pvt. Ltd. [ 2023 (4) TMI 1404 - ITAT MUMBAI] - DR was unable to furnish any contrary judgment to rebut the submissions made by the Ld. AR. Consequently, the addition made by the Ld. AO is deleted, and we uphold the commission rate at 0.15% on the total transaction value. Accordingly, the assessee s appeal is allowed.

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• 2025 (3) TMI 810
  Accrual of income - addition of interest accrued on NPA based on the foot note shown in the balance sheet of the assessee - HELD THAT:- We note that the assessee s books are maintained as per the norms and provisions of the RBI Act and audited by its statutory auditors. Therefore, in terms of section 45Q of the RBI Act, the assessee has disclosed the details of interest accrued on loans which have become NPA without crediting the same to the Profit and loss account. These amounts are need to be credited to the Profit and loss account only on receipt basis. AO and the of CIT(A) have made an addition of the accrued interest on NPA for the A.Y.2008-09 stating that income tax law does not allow exemption of the same. In relation to the present case, it is pertinent to note the following judicial precedents have held that section 43D of the Act cannot override the provisions of the RBI Act and hence the levy tax on accrued interest without realization of the same by the assessee is bad in law. AO and that of CIT(A) have erred in making addition of interest accrued on NPA based on the foot note shown in the balance sheet of the assessee and hence we set aside the order of the ld.CIT(A) by allowing the grounds raised by the assessee. Thus, we direct the AO to delete the addition of accrued interest on NPA and recompute the income of the assessee. Decided in favour of the assessee.

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• 2025 (3) TMI 809
  Mistake apparent from the record u/s 18(7) of the Black Money Act - Tribunal has completely overlooked the written submissions so given by the assessee s - HELD THAT:- Non-consideration of the detailed written submissions furnished by the assessee s along with relevant evidences would result in a mistake apparent from the record in the orders passed by the Tribunal in the hands of both the assessee s with regard to the impugned issue. Accordingly, we recall the order passed in [ 2021 (11) TMI 420 - ITAT MUMBAI ] ITA No.5/Mum/2021 in the case of Shri Rashesh M Bhansali and ITA No.4/Mum/2021 in the case of Smt Ami R Bhansali in respect of the issue relating to addition of US$ 32,13,307.60 made in their hands respectively. Accordingly, we direct the registry to post both the above said appeals in the normal course before the regular bench for limited purpose of disposing the above said issue raised in the respective appeals filed by the revenue, referred supra.

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• 2025 (3) TMI 808
  Validity of assessment u/s 153A - validity of the impugned assessment framed as not sustainable in law given the fact that it had been subjected to a search action dated 23rd July, 2015 - HELD THAT:- There is no dispute raised at the Revenue s behest regarding the assessee s status on the searched persons on 23rd July, 2015. We wish to reiterate here that the assessment year before is assessment year 2014-15, wherein, the assessee had filed its return of income on 30th September, 2014. Meaning thereby that its assessment on the date of search was indeed an abated one going by section 153(A) 2nd proviso, and therefore, we are of the considered view that going by statutory provisions containing a non-obstante clause notwithstanding anything contained in section 139 , the learned lower authorities have erred in law and on facts in assessing it under the normal provision than the foregoing specific provision applicable in case of searched person. Decided in favour of assessee.

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• 2025 (3) TMI 807
  Addition u/s 56(2)(vii)(b)(ii) - differential amount of the stamp duty valuation and the purchase value added in the income of the Assessee - HELD THAT:- As observed by this Court that admittedly the difference in the stamp duty value and the purchase value {as declared by the Assessee} of unit no.307 is of Rs. 5,14,461/- which is below than the amount equal to 5% of the consideration, as per exception carved out in the provisions of section 56(2) (x) (b) (B) (ii) and section 50(c) of the Act. Though the provisions of section 56(2)(x) and section 50(c) of the Act are not applicable to the instant case, as this case pertains to A.Y. 2015-16, however such provisions are corollary to the provisions of section 56(2)(vii) of the Act as applicable to the instant case, hence this Court considering the peculiar facts and circumstances in totality, the Assessee s prayer for taking a lenient/liberal view, the substantial justice and in order to cut short the litigation, is inclined to delete the addition of Rs. 5,14,461/- being difference between stamp duty value of Rs. 1,35,96,759/- minus purchase value of Rs. 1,30,82,298/- of unit no 307, being covered under exception carved out in the provisions of section 56(2) (x) (b)(B)(ii) of the Act. Thus the addition of Rs. 5,14,461/- (pertaining to unit no 307) is deleted. Resultantly, addition Assessee gets part relief. Appeal filed by the Assessee stands partly allowed.

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• 2025 (3) TMI 806
  Unexplained money u/s 69A - cash found at business premises of the appellant at the time of search, remained unexplained - AO relied on the statement made by the Director during the search - HELD THAT:- Statement of the assessee is an extremely important piece of evident but it cannot be conclusive and later on the same may be amended. In support of this argument, the appellant relies upon the judgment of Pullangode Rubber Produce Company Ltd. [ 1971 (9) TMI 64 - SUPREME COURT] where in held that the admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the assessee who made admission to show that it is incorrect and the assessee should be given proper opportunity to show the correct state of affairs. Hon ble Delhi High Court in CIT vs. Sunil Aggarwal [ 2015 (11) TMI 286 - DELHI HIGH COURT] held that addition cannot be made merely on the basis of the statement which is subsequently retracted even belatedly. Thus Bench does not concur with the findings of the ld. CIT(A) and the impugned addition made on account of alleged excess cash in hand is wrong and against the fact of the case. Thus the Ground No. 1 of the assessee is allowed. Addition as excess stock of silver jewellery - HELD THAT:- The Bench noted from the orders of the lower authorities that no details or particulars were asked regarding silver jewellery received on approval by the ld. AO. The assessee had submitted the copy of statement of the Director from which facts and submissions are evident from the statement of the Director of the company recorded during the course of search. Thus, the allegation of the AO that the appellant could not explain such as name of the entity from which the same has been received. In the statement recorded u/s 132(4) of the IT Act, 1961, the appellant further submitted that the goods received on approval was duly recorded in the stock register and a copy of purchase bills of M/s Sangam Handicrafts for purchase of silver earlier received on approval was filed. It is also evident from the assessment order that the AO made no enquiry or collected any other legal evidence at his level regarding the said silver purchased from the above said concern. Thus, the addition made by the AO on this account is against the correct facts duly supported by the documentary evidences. Ground No 2 of the assessee is allowed. Excess stock weighing 1567.89 gms of 18 cts. Gold jewellery and GP on the alleged undisclosed sales of the short weight of 22 cts. jewellery and gold ornaments - AO made the said additions for the reason that the 18 cts. Gold jewelry was in excess and 22 cts. gold jewellery was short as inventoried and valued by a registered valuer in presence of a representative of the assessee company - HELD THAT:- As evident from the valuation report and a known method / procedure adopted by the valuer during the course of search that he heaped / piled up of the ornaments of both the purity items at one place instead of segregation of ornaments of both purities. It is noticed that during the said process, the tags of so many items were jumbled / separated and vice versa from the ornaments and the registered valuer valued the ornaments as per his own wisdom and experience. Ss evident from the records after taking together, the weight of 22 cts. and 18 cts. gold jewellery, there remains a negligible difference in the total weight of jewellery ornaments as per books of accounts and physically found and valued during search. In this connection, it is also pertinent to mention here that in jewellery shop, the movement of each and every ornament including physical existence thereof is being monitored minutely otherwise no businessman can survive. For verification and in support of the above facts, appellant also submitted copy of day-to-day stock register maintained for the period 01.04.2017 to 02.08.2017 before the lower authorities. We noted that the said record was available at the time of search and a copy thereof is lying seized with the AO. Hence,short weight of 191.142 gms. in gold jewellery ornaments of 22 cts and 18 cts purity and valuation was negligible and the same was occurred due to using the different weighing machines, etc and thus the additions directed to be deleted. Hence, Ground No. 3 4 of the assessee are allowed.

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• 2025 (3) TMI 805
  Validity of assessment u/s 153A - No valid approval granted u/s.153D - HELD THAT:- Though the Addl. CIT has granted approval for Assessment Years. 2003-04 to 2009-10, still in para 3 of the approval letter, he has directed the AO to verify whether any addition is proposed on account of specific expenditure incurred on wedding on 4th March, 2009 in the assessment year 2009-10. This clearly shows that either the draft orders were not available with the Adl. CIT or he has not even bothered to gone through the same though he was giving approval for AY 2009-10 also. If the draft assessment order for AY 2009-10 was available with him, there was no need to give such directions and he himself could take a note of this fact. In the case of Rishabh Buildwell [ 2019 (7) TMI 365 - ITAT DELHI] the observations of the tribunal shows that the approval granted u/s 153D in the said case was similarly worded wherein JCIT has directed the DCIT to ensure the seized material and the findings of the appraisal report to be incorporated in the final assessment order. ITAT Delhi has observed that such directions clearly proves that the approval given by the JCIT is not a final approval as required u/s 153D of the Act but a conditional approval subject to modifications by the DCIT after receiving of the approval which makes it invalid, qualified, uncertain approval against the mandate of the Act. Decided in favour of assessee.

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• 2025 (3) TMI 804
  Exemption u/s 11 12 denied - corpus donations received by the Assessee - Tax treatment of voluntary contributions - HELD THAT:- In present assessee s case, there was no evidence to show that the donations received are for corpus. As per section 11(1)(d) of the Act, voluntary contributions received by the trust or charitable institutions with a specific direction that the contribution shall form part of the corpus of the trust or institution shall not be treated as income of the trusts or institution, but this is not the case of the assessee. As per Section 12 of the Act, any voluntary contribution not with a specific direction that it will form part of the corpus will be treated as income of the trust or institution existing for charitable purposes. As per section 12A of the Act, the benefit of Sections 11 12 will be available only if the trust or the institution is registered under the Income Tax Act as a trust or charitable institution u/s 12AA. The Income under Section 2(24)(iia) of the Act would not form part of total income u/s 11 and 12A of the Act only if the assessee is registered or filed an application before the competent authorities, the condition of which is absent in present case. In the background of these facts, provisions of the Act viz. Sections 2(24)(iia), 10(23), Sec. 11 12A , Explanatory Notes to the provisions of the Finance (No.2) Act, 2014 - Circular No. 01/2015, dated 21.01.2025 and the judgments, we, therefore, decline to interfere with the order of the ld. CIT(A). Appeal of the assessee is dismissed.

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• 2025 (3) TMI 803
  Rejection of application for registration u/s 12AA - assessee trust was required to file application under clause (iii) of section 12A(1)(ac) of the IT Act but due to inadvertent error the application was filed under clause (vi) of section 12A(1)(ac) - HELD THAT:- We find that under identical situations, in the case of Raj Krishan Jain Charitable Trust [ 2024 (6) TMI 1400 - ITAT DELHI] wherein held typographical error deserves to be corrected. Thus we deem it proper to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (vi) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.

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• 2025 (3) TMI 802
  Undisclosed foreign income and asset u/s.10(3) of the Black Money Act - deposits in the foreign bank accounts - as per AO assessee could not furnish any document to prove that the deposits were initially made by his father and later managed by his mother - HELD THAT:- Tax authorities have asked the assessee to explain the sources of deposits, which are claimed to have been made by the parents of the assessee, when they were alive. Hence, it is seen that the assessee was not involved in the banking transactions when her mother was alive. Assessee s mother was active and was travelling to various countries, which shows that she was independently managing the affairs herself. In this kind of situation, it is quite natural that the assessee may not be having all details relating to sources of deposits and hence, it would be difficult for anyone to furnish the complete details to the satisfaction of the tax authorities, since the banking affairs were managed by the parents of the assessee. Hence, the assessee could furnish only the information, which were available with him. Hence the explanations of the assessee, in our view, have to be appreciated duly keeping in mind the constraints that would be faced by the assessee in this kind of situation. Accordingly, this issue requires to be examined on the basis of best possible/available evidences. The object of BMA Act was to assess the income that was not subjected to tax in India and which has been stashed away abroad. If an assessee is holding any asset abroad out of the income already subjected to tax in India, then the BMA would not be applicable. Similarly, if the asset held abroad has been acquired out of the income earned there, which is not liable to taxed in India, then also the BMA Act will not apply. In the instant case, the sequence of events that have been narrated by the assessee would show that the bank accounts have been opened by the parents of the assessee and they were only operating the bank accounts during their life time. Deposits, which is sought to be taxed in the hands of the assessee have been made earlier to the year 2010. It included transfers from other bank accounts and in those bank accounts, the deposits would have been made even earlier. The assessee has stated that his father was doing business in Sudan and before bank authorities also, the assessee has stated that the trade name of business was BABU . The fact the parents of the assessee had resided in Sudan is proved by the passport of the mother and also by the fact that his brother has born in Sudan. The entries in the passport of the mother also show that she was managing her affairs independently including the bank accounts. Thus, impugned deposits have been made by the parents of the assessee out of their income earned abroad. Accordingly, we are of the view that the AO was not right in assessing the impugned deposits in the hands of the assessee. Accordingly, we set aside the order passed by the Ld.CIT(A) and direct the AO to delete the additions made by him. Appeal filed by the assessee is allowed.

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• 2025 (3) TMI 801
  Addition on account of sale of sugar on concessional rate - Whether practice of selling sugar at concessional rate is a custom in the Co-operative Sugar Industry? - CIT(A) deleted addition - HELD THAT:- We have observed that indeed it is a customary practice among all sugar factoriesin this belt to sale sugar at concessional rate to Farmers. However, nowhere the exact number of members to whom sugar has been sold at concessional rate is mentioned by the Assessee. The said fact has not been mentioned by the Assessee even in the paper book filed before us. Also, Assessee has not mentioned to how many non-members sugar was sold at concessional rate and how concessional sugar was provided to non-members when the resolution, dated 14.02.1990 only allows concessional sugar to members. The Sugar Commissioner Maharashtra Government gave the directions to all sugar factories as per Section 79(A) of Maharashtra Co-operative Societies Act, 1960. The Sugar Commissioner gave the direction that Sugar Factories shall sale maximum 5 kgs of sugar per month at concessional rate to its members only. The rate shall be @ levy sugar (+) excise duty. The sale of sugar at concessional rate shall be applicable only to those members who have supplied their Sugar Cane to the factory. The Hon ble Supreme Court in the case of Krishna SSK Ltd. [ 2012 (11) TMI 669 - SUPREME COURT ] had set-aside the issue with specific direction. Commissioner of Sugar had issued Circular dated 01.03.2006 in public interest. One arm of the Law cannot be used to defeat purpose of another arm of the Law. In this case, the Assessing Officer has not analysed and brought on record all the above details, which was mandatory in the light of decision of Hon ble Supreme Court in the case of Krishna SSK Ltd.(supra). Thus, we set-aside the order of ld.CIT(A), qua sale of sugar at concessional rate to the ld.CIT(A) for denovo adjudication. The ld.CIT(A) shall bring on record the specific facts mentioned by us in earlier paragraphs. Ld.CIT(A) shall also bring on record the specific facts mentioned by Hon ble Supreme Court in the Krishna SSK Ltd.,(supra). Appeal of the Revenue allowed for statistical purpose.

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• 2025 (3) TMI 800
  Penalty u/s 271AAB - seized cash during the course of search conducted in his group of cases - allegation of non specification of clear charge - HELD THAT:- We find no reasons to hold the impugned penalty. This is for the precise reasons that learned coordinate bench has already distinguished Pr. CIT vs Sandeep Chandak [ 2017 (12) TMI 70 - ALLAHABAD HIGH COURT] and that the case law quoted by the Revenue i.e Veena Estate Pvt. Ltd [ 2024 (1) TMI 701 - BOMBAY HIGH COURT] is found not to have dealt with the specific issue of a search penalty u/s 271AAB as is the case before us. We further reiterate that the main appeal before the hon ble Bombay high court is still pending for final adjudication thereof. Be that as it may, we conclude that given the fact that AO s not having satisfied the corresponding limb u/s 271AAB hereinabove, the impugned penalty deserves to be deleted only. Assessee appeal allowed.

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• 2025 (3) TMI 799
  Rejection of application for registration of trust u/s 12A(1)(ac)(iii) and application for grant of final registration u/s 80G(5)(iii) and cancelled the provisional approval u/s 80G(5)(iii) granted earlier - AR has contended that the assessee-trust is ready to submit all the details and evidences needed by the CIT(E) and requested that in the interest of justice, one more opportunity may be given to the assessee to plead its case, which is strong on merits HELD THAT:- We find that the CIT(E) has decided the matter ex parte due to non- compliance by the applicant to the two notices issued by him. There was also no adjournment request by the assessee. We are of the view that one more opportunity should be given to the assessee to file requisite documents and evidences before the CIT(E) and to plead its case before him. It is a settled law that the principles of natural justice require the affected party to be granted sufficient opportunity of being heard to contest his case. Therefore, in the interest of justice, we restore the matter to the file of the CIT(E). Accordingly, we set aside the order of CIT(E) and remit the matter to CIT(E) with a direction to pass fresh order in accordance with law after granting reasonable opportunity of hearing to the assessee. Appeal of the assessee is allowed for statistical purposes.

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• 2025 (3) TMI 798
  Rejecting the application for registration in Form No.10AB under clause (iii) of section 12A(1)(ac) and u/s 80G - HELD THAT:- We find that admittedly the assessee made compliance to the initial notices issued by the Ld. CIT, Exemption, Pune. It is the sole contention of the assessee that only the last notice could not be complied by the assessee and it was the prayer of AR that one more opportunity may kindly be granted to the assessee to explain his case. Considering the totality of the facts of the case and in the interest of justice without going into the merits of the case, we set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to decide the application for registration afresh as per fact and law after providing reasonable opportunity of hearing to the assessee.

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• 2025 (3) TMI 797
  Penalty levied u/s. 43 of the Black Money Act, 2015 - a ssessee herein was shown as a joint-holder - AO received information that the assessee along with his son has made investment in MAURITIUS and assessee has not disclosed the above said assets held in a foreign Country in Schedule FA of income tax returns filed for these three years under consideration. Whether the joint holder is liable to disclose the foreign assets, even if he is not the beneficial owner and even if the beneficial owner has disclosed the same as 100% owner in his return of income as per his understanding of the provisions of BM Act? - HELD THAT:- In the instant cases, there is no dispute with regard to the fact that the investments have been made in the foreign asset by Shri Chinthan Sanjay Shah and he himself has declared as 100% of owner of the same in the Income tax return filed by him. The assessee has been included as a secondary owner, for administrative purposes and hence the assessee was under bonafide belief that he is not required to disclose the foreign assets, as it belongs to his son. Tax authorities have placed reliance on the fact that the assessee has lent money to his son Shri Chintan S Shah, who has, in turn, used those funds to make investments. Under the General law, merely for the reason that a person has purchased certain assets out of borrowed funds, the lender would not automatically become owner of those assets. The buyer would continue to remain owner of those assets, until it is recovered from him by the lender in accordance with law. In the event of failure of the borrower to adhere to the terms and conditions of loan. Further, the said loan transaction has taken place in India and it has been duly recorded in the books of both the lender and borrower. Hence the provisions of BMA will not extend to the loan transaction entered between the parties in India. We are of the view that the tax authorities are not justified in levying penalty of Rs. 10.00 lakhs in each of the three years under consideration. Appeals of the assessee are allowed.

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• 2025 (3) TMI 796
  Correct head of income - income from car parking facilities - income from other sources OR income from business - HELD THAT:- As no new facts have been brought on record by the AO and the law has not changed, therefore, following the ratio laid down in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT ] and National Leasing Limited Ors [ 2024 (10) TMI 1209 - BOMBAY HIGH COURT ] we direct the AO to treat the parking receipts as business income. Depreciation claimed u/s 32 on the building used for car parking - We are of the considered view that the assessee is entitled for depreciation even on part of the building mentioned hereinabove which was used as a parking facility to the adjoining hotel and in our understanding of the facts, the parking facility is part and parcel of the business of hotel and such facilities are incidental to the carrying on of the main business of the assessee. Therefore, the assessee is very much entitled for the depreciation on the same and the AO is directed to allow the depreciation. Denial of the claim of depreciation on plant and machinery used for maintaining the garden and club house - A conjoint reading of both the provisions show that the income should be chargeable under the head income from other sources for the claim of depreciation. Since no income has been shown by the assessee, the assessee has not fulfilled the mandatory condition of Section 56(2)(ii) (iii) and Section 57(ii). Therefore, the action of the AO cannot be faulted with. This Ground is accordingly dismissed. Disallowance of the claim of expenditure which are legal and professional fees, repairs and maintenance of building, repairs and maintenance of plant and machinery, landscaping and corresponding expenses - AO has denied the expenses because according to the AO, all the expenses have to be borne by the lessee i.e., Mars Enterprises and not the assessee - HELD THAT:- We do not concur with this view of the AO since the assessee has been showing the income from royalty as business income and also parking receipts are directed to be taxed under the head profits and gains from business or profession. The expenses incurred by the assessee have to be allowed. Merely because Mars Enterprise has to incur the expenses, cannot be a reason to deny the claim u/s 37(1) of the Act to the expenses incurred by the assessee. We accordingly direct the AO to allow the claim of expenses.

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• 2025 (3) TMI 795
  Proceedings under the Black Money Act - allegation of beneficial owner of undisclosed foreign assets - as per revenue Since the Assessee has been shown as beneficiary in the bank accounts, the monies lying in the said accounts are to be regarded as Foreign Assets i.e., in respect of which the Assessee is a beneficial owner - whether uncertified documents in the form of bank statements, would be admissible as evidence? HELD THAT:- AO has simply relied on the documents received from the foreign Government under DTAA and exchange of information without verifying the authenticity and veracity of these documents. We note that during the course of assessment proceedings, AO examined the assessee on oath when he appeared in compliance to summons issued on 05.06.2018 where Mr. Anurag Kejriwal the assessee has totally denied to have any connection with the Bank and AO has extracted relevant questions and answers as recorded in the said statement in the assessment order. We note that Mr. Anurag Kejriwal has totally denied to have any interest whatsoever in the said entities qua which information was passed on by DDIT (Inv.), Ward-3(3), Kolkata. We are inclined to hold that the assessee is not a beneficiary of the assets abroad as has been noted by the ld. Assessing Officer. The case of the assessee finds support from the decision of the Addl. CIT -vs.- Jatinder Mehra We have a legislation in India called the Banker s Book Evidence Act 1891. The said Act provides for conditions to be satisfied while submitting bank records as evidence in a court of law. Section 4 of Banker s Book Evidence Act 1891 provides that Bank records should be accompanied by a certificate in accordance with section 2(8) and 2A of the Act. A copy of the bank records duly certified as above constitutes a certified copy . A certified copy, as defined under Section 2(8) of the Act, of any entry of banker s book, shall be admissible prima facie as Evidence. The foreign banks would, under ordinary circumstances, not part with certified copies of bank statements, as that would violate the contract of secrecy with their customers of details of bank accounts, which they have to maintain. In the absence of authenticated copies of original records, it is for revenue to corroborate with other evidences whatever information in the form of unauthenticated copies of original records, to establish facts with regard to whether or not the assessee held as a beneficiary assets outside India. We are inclined to hold that the assessee does not have any beneficial interest in the above four bank accounts nor did have any undisclosed foreign asset. Consequently, the appellate order is set aside and the AO is directed accordingly.

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• Customs

• 2025 (3) TMI 827
  Classification of imported goods - e-bikes in CKD-Kit or part of e-bike? - to be classified under HS code 8711 (1) (b) or HS code 8711 (2)? - assessment under S.No. 531A(1)(b) of N/N. 50/2017-Cus. dated 30.06.2017. Whether the goods imported by the appellant under Bill of Entry No. 5864756 dated 28.11.2019, declared as E-Bike in CKD Condition, merit assessment under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. dated 30.06.2017? - HELD THAT:- Admittedly the goods at the time of 100% examination were found to be the parts of e-bike like plastic cover, chasis, disc brake, shocker, front fork, seat, wheel rim, converter, controller etc. Admittedly the goods do not contain battery/battery pack and the electric compressor. The bare perusal, in the light of above two admitted facts, makes it clear that the E-Bikes in CKD Condition were eligible for the benefit of customs duty/BCD at the rate as given in the said notification (at the rate of 15%) provided the knocked down kit of e-bike along with all necessary components, parts or subassemblies also has the disassembled battery pack, the motor controller etc. [sub clause (a)] or the preassembled battery pack, the motor controller etc. [sub clause (b)]. The duty benefit of 15% is available in case of disassembled battery pack and that of 25% is available to preassembled battery pack. For any other form of knocked down kit of e-bike the duty to be paid is at the rate of 50%. Since admittedly the impugned Bill of Entry does not contain the battery pack either disassembled or preassembled a clear understanding of this entry of notification establishes that the benefit of this notification was not available to the appellant. Entry at S.No. 531A of Notification No. 50/2017 dated 30.06.2017 has apparently no ambiguity. If for sake of it, the ambiguity been there, it should be understood in favour of Revenue. The entry cites three situations with three different rates of duties. S.No. 531A(1)(a) required duty at the rate of 15%, 531A(1)(b) requires duty at the rate of 25% and S.No. 531A(2) required duty at the rate of 50%. Apparently and admittedly the impugned goods do not fall under 1(a) and 1(b) of 531A, hence the benefit of the Notification No. 50/2017 has rightly been denied. Imported goods to be considered as the part of e-bikes which merit classification under CTH 87141090 or not? - the Commissioner (Appeals) has denied that relief based on the declaration of the appellant in the impugned Bill of Entry that the imported goods are E-Bike in CKD Condition - HELD THAT:- It is opined that the said declaration was made with a view of taking benefit of N/N. 50/2017-Cus. dated 30.06.2017. It is already held appellant not entitled for the said benefit. In the given circumstances, there has to be a specific finding vis- -vis the entitlement of the appellant about the said alternate plea. It is deemed necessary that the original adjudicating authority shall examine the entitlement/eligibility of the appellant vis- -vis impugned Bill of Entry as to whether the imported goods can fall under CTH 87141090 in the given set of circumstances. Conclusion - The appellant was not entitled to the duty benefit under the claimed notification due to the absence of necessary components in the imported kit. However, matter remanded to the original adjudicating authority to examine the appellant s alternate plea regarding classification under a different tariff heading. Appeal allowed by way of remand.

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• 2025 (3) TMI 794
  Legality and validity of the purported DEPB license cancellation letter - Non-adjudication of the Show Cause Notice (SCN) issued on 02.05.2005 for nearly two decades - HELD THAT:- The 38 DEPB Scrip Cancellation letters are in respect of the same DEPB Scrips which were subject matter of the impugned SCN which remains unadjudicated till date. As noticed in the order dated 28.01.2025, the non-adjudication of the impugned SCN was conceded by the concerned Deputy Director General of Foreign Trade, who was present in Court on the said date - It is also apparent that the cancellation order/letter dated 07.08.2019 was passed without any prior intimation/notice to the petitioner and almost 15 years after the impugned SCN was initially issued. The basis for issuance of the 38 DEPB Scrip cancellation letters has been set out in the impugned SCN. The factual premise of the same is strenuously contested by the petitioner. As noticed in the present case, despite the impugned SCN remaining unadjudicated for decades, the cancellation order / letter dated 07.08.2019 was issued, which effectively condemned the petitioner unheard. Conclusion - i) The non-adjudication of the SCN for nearly two decades is a valid ground for setting it aside. ii) The cancellation of the DEPB licenses without affording the petitioner a hearing violated principles of natural justice, rendering the cancellation invalid. iii) The issuance of DEPB Scrip cancellation letters without adjudicating the SCN is procedurally flawed, leading to their invalidation. The impugned SCN, the communication dated 07.08.2019 and the 38 DEPB Scrip Cancellation letters referred to in the impugned cancellation order/ letter dated 07.08.2019, addressed to Commissioner of Customs Department (Preventive) by the Foreign Trade Development Officer, are set aside - Petition allowed.

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• 2025 (3) TMI 793
  Seeking provisional release of 53 kgs of gold seized by the Directorate of Revenue Intelligence (DRI) - import of gold under Advance Authorization - diversion of duty free gold imported - HELD THAT:- Under the Advance Authorization, the export obligation was required to be fulfilled within 120 days from the date of clearance. The gold was detained by the authorities on 17.08.2020. It is for this reason that the appellant contended that the obligation could not be fulfilled and it had sought extension of the date for fulfillment of the export obligation. In regard to the prayer made by the appellant for extension of the Advance Authorization License, the Delhi High Court observed that the appellant would be at liberty to apply for extension/re-validation after the adjudication of the show cause notice dated 11.08.2021. The appellant had filed a Writ Petition in the Delhi High Court not only for release of the seized gold but also for extension of the Advance Authorization and the Delhi High Court, in its judgment [ 2024 (1) TMI 538 - DELHI HIGH COURT ], made it clear that the appellant would be at liberty to apply for extension/re-validation of the Advance Authorization License after the show cause notice dated 11.08.2021 was adjudicated. The Delhi High Court also made it clear that as and when such application is filed, the Directorate General of Foreign Trade shall consider the same in accordance with law keeping in mind the peculiar facts of the case as the appellant was prevented from exporting the jewellery because the gold had been seized. The finding recorded by the Commissioner that the premises did not have a fully mechanized machine for manufacture of jewellery is not based on any evidence. The panchanama dated 13/14.08.2020 clearly mentions that two machines for manufacture of jewellery were available on the fifth floor. The Commissioner assumed that these two machines were not fully mechanized. It was imperative for the Commissioner to have obtained a report about the two machines found on the fifth floor before recording a finding whether they were mechanized or not. Conclusion - There are prima facie merit in the contention advanced on behalf of the appellant that 53kgs of gold bars at the time of detention were found in the declared premises and, thus, could not have been seized. The impugned order dated 01.05.2024 passed by the Commissioner cannot not be sustained and is set aside - Appeal allowed.

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• 2025 (3) TMI 792
  Levy of penalty for non finalization of provisionally assessed Bills of Entry - Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 - HELD THAT:- It is seen that in case of 8 Bills of Entry, the assessment were not finalized without any fault on the part of the Appellant. The issue is also covered by the case law of Jai Balaji Industries Ltd. [ 2021 (1) TMI 767 - CESTAT KOLKATA ] wherein, this Tribunal has held that The department has not been able to establish any deliberate delay or any mala fide intention on the part of the appellant. As and when the appellant could gather the requisite documents they were presented before the assessing officers for finalizing the provisional assessments. In fact, out of the 35 Bills of Entry involved, 27 could be finalized even before passing of the adjudication order. Conclusion - Penalties should be proportionate and based on the actual conduct and fault of the parties involved. In the absence of deliberate delay or mala fide intention, a lenient penalty is appropriate. Appeal allowed.

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• 2025 (3) TMI 791
  Undervaluation of imported goods - Oath Token - enhancement of value - rejection of value under Rule 12 of the Customs Valuation Rules, 2007 (CVR) - redetrmination of value by proceeding sequentially through Rule 4 to 9 of CVR, 2007 - It is submitted that the enhancement of value in the present case cannot be sustained based on the earlier enhancement by the Revenue - HELD THAT:- It is a fact that the appellant had filed Bills of Entry 4200544 and 2454990 had imported 4000 oath tokens and declared the value as 50 USD in the Bills of Entry and cleared the same on payment of duty. The present consignment of identical goods quantity varying from 800 to 1600 have been declared at 6.5 USD inspite of the fact that the earlier consignment value was accepted as 50USD. Hence the revenue enhanced the value to USD 50 which is objected to by the appellant only on the ground that earlier also they had declared 6.5 USD which was enhanced to USD 50 accepted by the appellant. Having accepted the value the appellant cannot now claim that the enhanced value cannot be the basis for redetermination of the value. The Supreme Court of India in the case of Century Metal Recycling Pvt. Ltd. vs. UOI [ 2019 (5) TMI 1152 - SUPREME COURT] observed that Declared valuation can be rejected based upon the evidence which qualifies and meets the criteria of certain reasons . Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges, etc. to find out the correct international price of concerned goods would be relevant but reliance can be placed on such material only when the adjudicating authority had conducted enquiries and ascertained details with reference to the goods imported which are identical or similar and certain reasons exists and justifies detailed investigation. These reasons are to be recorded and if requested disclosed/communicated to the importer. Valuation alerts could be relied upon for default valuation computation under the Rules. Since the appellant had cleared identical products earlier on payment of USD 50, the Commissioner s order to redetermine the value based on the earlier acceptance of the value at USD 50 cannot be found fault with. In fact, the appellant in the present 5 Bills of Entry vide his letter dated 29.09.2011 has clearly admitted that the differential duty and interest has been voluntarily paid and had requested to drop all proceedings. It is also a fact that the appellant had admitted that the goods were received free of charge under no charge invoice as submitted by them in their letter dated 15.11.2011. However, the claim of the appellant that the assessments were provisional has to be accepted as we notice that the present bills of entry the word provisional is mentioned in all these bills of entry. Hence, since the assessments are provisional the question of investigation and imposition of penalty without finalizing the assessments does not arise. Conclusion - i) Having accepted the value the appellant cannot now claim that the enhanced value cannot be the basis for redetermination of the value. ii) Since the assessments are provisional, the question of investigation and imposition of penalty without finalizing the assessments does not arise. Appeal is allowed by way of remand.

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• 2025 (3) TMI 790
  Adjudication of the Show Cause Notice issued on 28.09.2004, which was concluded on 22.09.2023 - Jurisdiction of Additional Director General of DRI to issue the SCN - delay in adjudication constitutes a violation of the principles of natural justice or not - HELD THAT:- The facts which are not in dispute are that imports took place during the period July, 2002 to November, 2002 and the Show Cause Notice has been issued on 28.09.2004 and the adjudication took place on 22.09.2023. The said adjudication is bad in law as held by this Tribunal which has examined the issue of adjudication in reasonable time in the case of Kopertek Metals Pvt. Ltd. and Others [ 2024 (12) TMI 269 - CESTAT NEW DELHI ] observing that the adjudication has taken place beyond the period stipulated in sub-section (11) of section 11A of the Central Excise Act and there is no plausible explanation as to why it was not possible for the Adjudicating Authority to complete the adjudication process within the stipulated time. The Show Cause Notice has been adjudicated with inordinate delay. In that circumstances, the proceedings against the appellants are not sustainable. Appeal allowed.

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• 2025 (3) TMI 789
  Demand of differential I.G.S.T., along with interest and imposing redemption fine and penalty - rejection of classification adopted by the appellant on the imported goods - to be re-classified under CTH 8709 1100 or not - extended period of limitation - HELD THAT:- It is a fact on record that the import took place during the period from November, 2017 to January, 2018 and the goods were cleared for home consumption by assessment of the Bills of Entry. Therefore, we observe that the Show Cause Notice issued on 29.07.2020 is highly barred by limitation. The same view has been taken by this Tribunal in the case of M/S. DIC INDIA LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA [ 2024 (9) TMI 186 - CESTAT KOLKATA] wherein it has been observed that the re-classification of the imported goods vide the 17 Bills of entry under CTH 2710, on the basis of Test Report received from IIT, Kharagpur, is not sustainable. The extended period of limitation is not invokable in the case. Consequently, the proceedings against the appellant are not sustainable. Conclusion - Classification under Chapter 86 upheld. The extended period of limitation is not invokable in the case. Consequently, the proceedings against the appellant are not sustainable. The impugend order is set aside - appeal allowed.

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• 2025 (3) TMI 788
  Liability to pay Social Welfare Surcharge (SWS) in case Basic Customs Duty is exempted in terms of N/N. 24/2015-Cus 25/2015-Cus both dated 08.04.2015 - HELD THAT:- The said issue has already been decided by this Tribunal in their own case vide Final Order No.77304-77500/2024 dated 14.11.2024 [ 2024 (11) TMI 746 - CESTAT KOLKATA] , wherein this Tribunal has held that SWS is payable at 10% on BCD but where the BCD is Nil. SWS shall also be computed Nil. Conclusion - The appellants are not liable to pay Social Welfare Surcharge (SWS) when Basic Customs Duty is exempted in terms of N/N. 24/2015-Cus 25/2015-Cus both dated 08.04.2015 issued under the MEIS and SEIS Scheme. The impugned order is set aside and the appeals are allowed.

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• 2025 (3) TMI 787
  Tenability of Customs House Laboratory Report relied upon by the departmental authorities - rejection of transaction value without adequate justification - levy of penalties - HELD THAT:- In this case, the samples were taken by CRCL on 03.10.2002 for Bill of Entry No.226 and 29.11.2002 in case for Bill of Entry No.313 and the test report has been delivered on 20.11.2002 and 22.07.2003 respectively. The said report has lost their evidential value as the test reports are cryptic and its results have been delivered after a long delay. In that circumstances, the test reports are not reliable test reports. In the case of M/s Moorgate Industries (I) Private Limited Vs. Commissioner of Customs (Port), Kolkata [ 2023 (12) TMI 963 - CESTAT KOLKATA ] , this Tribunal has observed Since the report of the Customs Lab is cryptic and incomplete without showing the BIS Standard and protocol and method of testing, it is noticed that the appellant sought to cross examine the Customs Officer who had drawn the sample and the Chemical Examiner who had tested the sample. Admittedly, in this case, the samples were drawn in terms of International Standards. Moreover, the test report is cryptic and it is submitted with a delay. The test report is required to be submitted immediately. The test reports produced by CRCL, which has been relied upon by the adjudicating authority to demand Customs Duty on the appellant, are not reliable evidence. Accordingly, it is held that it is not a piece of evidence to demand the Customs Duty from the appellant. Accordingly, the duty paid by the appellant on transaction value is the correct duty paid by them. The penalties are also dropped. Conclusion - i) The test reports produced by CRCL, which has been relied upon by the adjudicating authority to demand Customs Duty on the appellant, are not reliable evidence. ii) The transaction value is valid, and the penalties are unjustified. The impugned orders are set aside - appeal allowed.

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• 2025 (3) TMI 786
  Smuggling - Confiscation of seized consignment of betel nuts of foreign origin - onus to prove - report from the Arecanut Research and Development Foundation (ARDF) is a valid basis to determine the origin of the betel nuts or not - notified item under Section 123 of the Customs Act, 1962 or not - Penalty u/s 112(b) of the Customs Act - HELD THAT:- There is no evidence brought on record to substantiate this allegation that the goods were of foreign origin and smuggled in nature. It is observed that betel nut is not a notified item under Section 123 of the Customs Act, 1962. Thus, the onus is on the Department to prove that the goods were smuggled in nature. The lower authorities have relied on the Report received from ARDF to substantiate their allegation that the goods were of foreign origin and smuggled into India. In this regard, it is observed that ARDF is not an organization accredited by the Government for issuing the certificate of origin - This view has been expressed by the Hon ble Allahabad High Court in the case of Maa Kamakhya Trader v. Commissioner of Customs (Preventive) [ 2024 (3) TMI 140 - ALLAHABAD HIGH COURT] , wherein it has been observed that The report of the ARDF has also been held to be not reliable inasmuch as it could not be shown with any degree of certainty that the origin of the betel nuts could be established by testing in a laboratory, as is clear by the answer to the RTI query given by Directorate of Arecanut And Spice Development, Ministry of Agriculture and Farmers Welfare, Government of Kerala. Therefore, by relying on the decision, it is held that the ARDF Report alone cannot form the basis for arriving at the conclusion that the goods were of foreign origin and smuggled in nature. The allegation of foreign origin and smuggled nature of the goods must be substantiated with cogent evidence. Confiscation of the goods cannot be done merely on the basis of assumptions and presumptions or a mere suspicion that the goods were of foreign origin. There is no corroborative evidence brought on record by the investigation to substantiate the allegation that the goods were of foreign origin and smuggled in nature. Thus, the Department has failed to establish that the goods were of foreign origin and smuggled into the country without payment of customs duties - Since betel nut is not a notified item under Section 123 of the Customs Act, 1962, the onus is on the Department to prove that the goods were smuggled in nature. As the Department could not produce any evidence to substantiate the allegation that the betel nuts were of foreign origin, except the ARDF report, the goods are not liable for confiscation. As the goods are not liable for confiscation, the question of imposing redemption fine in lieu of confiscation does not arise. Penalty u/s 112(b) of the Customs Act - HELD THAT:- Since the violations alleged by the Department has not been substantiated with evidence, the appellants are not liable for penalty. As the confiscation of the goods is not sustained, the penalty imposed on the Appellant No. 1 under Section 112(b) of the Customs Act is not sustainable and accordingly, the same is set aside. Conclusion - i) The burden of proof lies on the Department to establish the foreign origin and smuggled nature of goods not notified under Section 123 of the Customs Act. ii) Reports from non-accredited organizations cannot be solely relied upon to substantiate such claims. The impugned order is set aside - appeal allowed.

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• Corporate Laws

• 2025 (3) TMI 785
  Validity of Foreign Arbitral Award - Enforcement of the Award would be violative of the provisions of FEMA or not - remittance of Euro 5.5 million by Minda Corporation Limited to Mercedes Benz AG pursuant to the consent award passed in the arbitration proceedings - overlap between the settlement with the Liquidator of Minda Germany and Consent Award with Minda India - benefit of double dip by virtue of the payments agreed by Minda India under the settlement - Whether the enforcement of the Award would be contrary to the public policy of India, as per Section 48(2)(b) of the A C Act? HELD THAT:- Considering in the instant case, the issue of violation of provisions of FEMA is not germane to the matter anymore considering the post facto approval of the RBI Only issue would be whether fundamental policy of law would cover the principal objection of the JD that they did not have visibility of the Bilgery Settlement and therefore, could not ascertain whether there was a double dip by the DH (i.e. recovery both from the Liquidator of Minda Germany and also from Minda India), or if there was a waiver in the Bilgery Settlement. - Needless to state, both these aspects become a non-issue since the Consent Award was passed with the JD having full knowledge of what was before them. The Settlement Agreement itself, would show that the agreement was the entire agreement between the parties, superseded and extinguished all previous agreements, promises, assurances, warranties, and parties has agreed that no other claim shall lie between them with respect to the matters being settled. Firstly , the parties have unconditionally and irrevocably waived any or all claims against each other existing prior to the date of the settlement; secondly , the request for Bilgery Settlement had been made prior to the settlement with Minda India and a motion was filed before a court in Germany for disclosure, which had been rejected by the courts in Germany. This would obviously preclude the JD from raising this issue yet again, post the Consent Award; thirdly and more specifically, regards the issue of double dip , the communication of 28th September 2021 recorded Minda India s confirmation to render an Award by consent and the preamble of the settlement leaves no doubt of the DH s confirmation that it will not benefit from any double dip by virtue of payments agreed under the settlement. As regards the waiver, DH had filed an affidavit before this Court, pursuant to order dated 17th November 2023. The said affidavit of 22nd November 2023 also confirmed the enforcement of the Award will not result in a double benefit to the decree holder and that there was no overlap between the settlement with Minda Germany and the Consent Award with Minda India. The JD, therefore, had consistently confirmed that they were agreeing to settlement, not only through the communication dated 28th September 2021 but also as per clause 3(i) of the Settlement Agreement and agreed to passing of the Consent Award. The objections being pressed by the JD to the enforcement are not bona fide, unjust, unreasonable and a clear attempt to obstruct the enforcement, deploying one stratagem or the other. The Court deprecates the stand taken by the JD, particularly, having fully and knowingly entered into a settlement and agreed to a Consent Award being passed, in complete know of facts and circumstances available to them, relating to the previous Bilgery Settlement . Accordingly, it is directed, that the Foreign Award dated 29th November 2021 passed by an Arbitral Tribunal comprising of Dr. Fabian Von Schlabrendorff, Dr. Ulrich Trost, And Mr. Arne Fuchs in Stuttgart, Germany under the Rules of Arbitration of the International Chambers of Commerce, 2012 in ICC Case No. 22523/FS, be enforced as a decree of this Court, per section 49 of the A C Act. As JD was directed to deposit the entire amount, being EUR 5.5 million, in terms of the Arbitral Award with the Registrar General of this Court in an interest-bearing deposit. The said amount is approximately Rs. 52 Crores and has since been deposited by JD before the Registry of this Court, as noted in the order of this Court dated 20th May 2024.

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• Insolvency & Bankruptcy

• 2025 (3) TMI 784
  Extinguishment of Fuel Surcharge (FS) and Special Fuel Surcharge (SFS) Claims Under IBC - conflict between the Electricity Act, 2003 and IBC, 2016 - Do FS and SFS count as pre-insolvency liabilities that were erased when the resolution plan was approved under Section 31 of the Insolvency and Bankruptcy Code, 2016 (IBC)? - HELD THAT:- It can be seen from Section 54G and Regulation 20 that it is the responsibility of Corporate Debtor to provide the complete claims from all the creditors to the Resolution Professional for inclusion in Form-P10. The respondents submit that the CD has a running account with the Respondents in which payments are made in tranches and reconciliation is done from time to time between CD and Respondents. He further cites letter dated 08.11.2024 from CD to Respondents in this regard. The Respondent submits that they did not file any claim subsequent to publication of Form P10 on account of FS and SFS as these charges become due only after the bill is raised by the Discom. It is important to understand the genesis of SFS. The SFS was imposed on Electricity Distribution Companies of Rajasthan, as a result of dispute with M/s Adani Power Rajasthan Ltd. (APRL), which was running a coal based thermal power plant with an installed capacity of 1320 MW at Kawai, Rajasthan. The power generated by the Kawai plant was to be purchased by 3 electricity distribution companies of Rajasthan viz. Jaipur Vidyut Vitran Nigam Ltd. (JVVNL), Ajmer Vidyut Vitran Nigam Ltd. (AVVNL) and Jodhpur Vidyut Vitran Nigam Ltd. (JdVVNL). These three electricity distribution companies are collectively referred to as Rajasthan Discoms. APRL had signed Power Purchase Agreement (PPA) with the Rajasthan Discoms for supply of 1200 MW from their plant. The FSA is commonly known as SFS by the consumers and the same terminology is used by Discoms in their electricity bills. It is clear from the sequence of events in preceding paragraphs that the SFS has arisen as a result of Judgment of Hon ble Supreme Court vide order dated 25.02.2022 [ 2022 (2) TMI 1499 - SC ORDER] based on change in law in terms of existing PPA between APRL and RUVNL/Rajasthan Discoms. Based on the Judgment of Hon ble Supreme Court the RERC had laid down the manner and mode of recovery of the SFS. The same was to be recovered @ Rs. 0.07 per unit from the consumers being billed on monthly basis in 60 equal instalments. In view of Section 142, it is further noted that the respondents had no option, but to comply with the orders of RERC regarding payment of FS SFS by the consumers. The installments of FS were decided by RERC at an earlier occasion. Accordingly, The bills for SFS and FS are sent to the consumers along with monthly bills for consumption of electricity as per the instalments fixed by RERC. The amount of SFS or FS as decided can only be claimed in accordance with the manner laid down in the tariff order. In this case RERC has fixed that SFS be recovered from the consumers in 60 monthly instalments @ Rs. 0.07 per unit. Similar orders have been issued in regard to FS earlier. It is seen from the records that FS and SFS charges have been paid upto April, 2023. The appellant stopped paying the dues from May, 2023 onwards after obtaining the interim protection against disconnection from Adjudicating Authority on 25.05.2023. The claim of the appellant for eradication of entire liability on account of FS/SFS would not hold as the bills for subsequent period were not issued by the respondent. Any amount which is due in future cannot be eradicated by including the same in resolution plan. The FS/SFS charges which are statutory dues and become due only after the bill is submitted cannot be eradicated by such resolution plan. FS/ SFS arise due to changes in power purchase cost beyond the control of Discoms and the same is treated as an uncontrollable parameter in tariff regulations. The Fuel Surcharge and Special Fuel Surcharge in the present case have arisen due to variation in fuel cost. Further, in case of SFS due to change in law as decided by Hon ble Supreme Court. It is due to peculiarities in the instant matter that the final decision about amount payable to ARPL and subsequent manner of recovery of arrears from consumers had to be decided at the level of Hon ble Supreme Court and manner of recovery from end consumer was finalized by the RERC. FS and SFS are in our view statutory charges as decided by RERC and are payable only after the bill is raised in monthly instalments as decided by RERC consequent to final decision of Hon ble Supreme Court. In this regard, Appellants have relied upon the judgement of Hon ble SC in Paschimanchal Vidyut Vitran Nigam Ltd. vs. Raman Ispat Pvt. Ltd. Ors. [ 2023 (7) TMI 831 - SUPREME COURT] . The aforesaid Judgment holds that Section 238 of the IBC overrides the provisions of the Electricity Act, 2003 despite the latter containing two specific provisions, which open with non-obstante clauses i.e. Section 173 and 174. The matter in aforesaid case related to liquidation proceedings under the Code, where the appellant Discom held security interest against a property of the respondent and which was attached on the application of the appellant. In the present case, the appellant has not identified any specific provision of the Electricity Act that is in direct conflict with the IBC. A mere assertion of overriding effect, without demonstrating any inconsistency, is insufficient, it is required to follow the principle of harmonious construct between the two legislations. Conclusion - i) FS and SFS are statutory charges that become due upon billing, not pre-insolvency liabilities extinguished by the resolution plan. ii) There is no conflict between the Electricity Act and IBC; both can be harmoniously interpreted. iii) The Appellant is directed to pay outstanding FS and SFS within 60 days, with penalties applicable for non-compliance under the Electricity Act. The impugned order dated 14.06.2024 is upheld, the Appellant is directed to pay the outstanding FS and SFS within 60 days. Failure to comply will result in penalties as per the Electricity Act, 2003 - appeal dismissed.

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• 2025 (3) TMI 783
  Approval of Resolution Plan in the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor - renewal of leases for Tea Gardens - no locus to file the Appeal - HELD THAT:- In view of the approval of the Resolution Plan, the SRA has come into the shoes of the CD and when CD had applied for renewal of the leases, where period of the leases had expired, no exception can be taken to the direction of the Adjudicating Authority permitting the SRA to pursue the renewal application or to file application where renewal application has not been made. The prayers made on behalf of the Appellant to set aside paragraph 18 and Clause 9.2.1 of the sub-paragraph 20 of the order, cannot be accepted. The Adjudicating Authority while approving the Resolution Plan or issuing direction contained in paragraphs 18 and 9.2.1 has to be treated not to have expressed any opinion with regard to renewal of the leases, which is in the domain of State of West Bengal. Only liberty to pursue the application was granted and the question of granting renewal is in the domain of the State Government. The Adjudicating Authority has not made any observation with regard to grant or non-grant of renewal of leases. It is clarified that directions of the Adjudicating Authority has to be treated, limited to right to pursue the renewal application/ make an application for renewal and the Adjudicating Authority has not have expressed any opinion on the merits of renewal application, which is in the domain of State Government. Conclusion - i) Only stakeholders with a direct interest in the CIRP have the standing to challenge the Resolution Plan. ii) It is also clarified that the SRA could pursue lease renewals as a successor to the CD, without affecting the state s authority over lease decisions. Appeal dismissed.

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• Service Tax

• 2025 (3) TMI 782
  Recovery of service tax with interest and penalty - difference in figures of P L A/c and ST-3 returns - whether the Appellant has correctly disclosed the value of taxable services in ST-3 returns? - levy of late fees and penalties u/s 78, 77(1)(c), 77(1)(d) 77(2) of FA. Demand of service tax of Rs 5,98,38,654/- based on difference in figures of P L A/c and ST-3 returns and whether the Appellant has correctly disclosed the value of taxable services in ST-3 returns - HELD THAT:- A perusal of the two invoices reproduced in the impugned order also shows that the Appellant has separately charged for advertisement services and sale of goods along with service tax and VAT on respective components of invoices. The consideration for the two being identified and charged separately, the contract is clearly a composite contract for providing advertisement services and sale of goods and not an indivisible contract, which is also accepted in paragraph 16.6 of the impugned order. Therefore, the Appellant has rightly paid service tax and VAT on respective components, which is in consonance with the law laid down in Imagic Creative (P) Ltd. v. CCT [ 2008 (1) TMI 2 - SUPREME COURT] where while considering the composite contract relating to advertisement services, the Hon ble Supreme Court held Payments of service tax as also VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It is, therefore, difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract, irrespective of the element of service provided. The approach of the assessing authority, to us, thus, appears to be correct. Once the amounts representing sale of goods i.e. Rs 13,35,68,175/- and amounts representing value of services falling under negative list i.e. Rs 30,42,96,081/- are adjusted and deduction in terms of Circular No. 341/43/96 dated 31.10.1996 is applied which has also been allowed in the impugned order, there is no difference in figures appearing in Balance Sheet and ST-3 returns and therefore, the demand of service tax of Rs. 5,94,38,654/- cannot be sustained. Denial of cenvat credit of Rs 97,36,884/- is sustainable on the grounds stated in the impugned order - HELD THAT:- The impugned order does not dispute the explanation that the Appellant has taken space on lease from institutions including Lucknow Golf Club, India Industries Association and others for installation of bill boards, LED signage etc. and used such space for providing advertisement services through such bill boards, LED signage etc.. This activity of taking space on lease is clearly an input service used for providing output service and therefore the Appellant is entitled to credit of service tax charged on lease rentals and hence credit cannot be denied on this ground. The last allegation of non-submission of invoices also does not survive, as the order records that the invoices were subsequently produced by the Appellant, which were verified and after verification credit of only Rs 97,36,884/- has been denied, the merits of which has already been discussed in this order. Thus, the denial of credit in the present case is not warranted. Whether late fees can be demanded and penalties u/s 78, 77(1)(c), 77(1)(d) 77(2) can be imposed? - HELD THAT:- The show cause notice proposed imposition of penalty u/s 77 (1)(c) for failure to furnish information, u/s 77(1)(d) for failure to pay tax electronically and Section 77(2) for contravention of the provisions, without alleging anything as to when and what information was not furnished by the Appellant, when and what amount of tax was not paid electronically and which provisions have been contravened by the Appellant. It is a settled law that show cause notice is the foundation of the case set up by the Revenue and once the show cause notice lacks necessary particulars, it is difficult to uphold imposition of penalties under these provisions. As regards late fee, the demand of late fee has been confirmed under Section 70 read with Rule 7(C) on the ground that the Appellant has not averred anything in the defence reply or at the time of personal hearing. This finding appears to be perverse and contrary to record, as in paragraph 8 of reply dated 13.02.2020, the Appellant has clearly stated that delay in submission of ST-3 return was on account of delayed collection of dues and the Appellant has filed the service tax returns by paying tax from his own pocket. The delayed submission of return on account of delayed collection of tax and payment of service tax from own pocket, which otherwise is to be charged and deposited, is a reasonable ground for belated submission of ST-3 returns and therefore the late fee imposed cannot be sustained. Conclusion - i) The demand of service tax and denial of CENVAT credit were not sustainable. ii) Once the amounts representing the sale of goods and services under the negative list were adjusted, there was no discrepancy between the Balance Sheet and ST-3 returns, rendering the service tax demand unsustainable. iii) The denial of credit was unwarranted, as the Appellant had demonstrated compliance with relevant provisions and maintained proper accounts. iv) Imposition of penalties are upheld. Late fees not sustained. The appeal is liable to be allowed and the impugned order, to the extent challenged, is set-aside, with consequential reliefs to the Appellant.

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• 2025 (3) TMI 781
  Recovery of service tax with interest and penalty - Original Authority has determined the tax due from the appellant to be less than the amount claimed to be payable by the appellant as per the calculation chart submitted by the appellant, and paid by them - non application of the mind by the adjudicating authority - violation of principles of natural justice - HELD THAT:- From the computation made by the appellant and submitted before the original authority, it is evident that after claiming all the deductions, they admit that the service tax short paid by them was Rs 4,30,056.00/-. Both the authorities below have misdirected themselves as there was no contest by the appellant to the invocation of the extended period or the demand of service tax. Appellant has suo motto computed the service tax due. He made the submission to this effect before the original authority and also before the appellate authority. He also pleaded his lack of knowledge and status as petty contractor not having means to understand the complexity of taxation of services. Both the authority agreed to these submissions and have still gone on to impose penalties under Section 77 and 78 of the Finance Act, 1994. Undisputedly appellant is a petty contractor whose total turnover during the entire period of dispute i.e. from 16.06.2005 to 31.03.2010 was meager Rs 1,13,39,820/-. Taking note of undisputed findings with regards to status of appellant and his compliance/ intention to comply even before the adjudication/ appellate proceeding has been concluded there are no justification for not having considered extending the benefit of Section 80 of the Finance Act, 1994 and waiving of all the penalties imposable on the appellant. There are no merits in the impugned order to the extent it is in relation to the penalties imposed on the appellant. This is a fit case where penalties imposable under Section 77 and 78 should have been waived in terms of provisions of Section 80 of the Finance Act, 1994. Conclusion - i) The demand for service tax, as quantified by the adjudicating authority, is confirmed, but the penalties imposed are set aside. ii) There are no merit in the imposition of penalties, considering the appellant s status and compliance efforts. Appeal allowed in part.

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• 2025 (3) TMI 780
  Levy of Brand Endorsement charges received by the appellant under the guise of Business Auxiliary Charges/Brand Promotion Charges - Levy of service tax on IPL Playing Fee attributing the same as rendering of Business Support Service - time limitation. Levy of Brand Endorsement charges received by the appellant under the guise of Business Auxiliary Charges/Brand Promotion Charges - HELD THAT:- The fact of appellant having discharged tax on amounts directly received by him as aforestated is not disputed by the Revenue. In this regard the appellant has also taken us through the certified statement copies enclosed as part of the paper book, of Rithi Sports Management Pvt. Ltd. and the various schedules pertaining to Mindscapes Maestros, DB Corp. ltd. Lafarge India, Nutrine Confectionery Company, Dabur, Aircel, Parle Products Pvt. Ltd. NDTV, MAXX and Purple People Entertainment Pvt. Ltd, who acted as agents of the appellant - The impact analysis of this difference ought to have been taken note of by the authorities while working out the demand and as ascertained from the balance sheet, the figures pertaining to the debtors. It is also noted that a fairly large amount of tax that was paid by the appellant s agents on his behalf and as presented in Annexure XI of the paper book (incidentally this is a communication of the department dated 30/10/2013), were not taken note of by the lower authority, though, these details were well available with the adjudicating authority at the time of adjudication. In Qui Facit Per Alium Facit Per Se, a common legal principle to state that one who acts through another actually acts himself, there remains no doubt that tax as discharged by the various agents would need to be taken note of, for arriving at the total tax liability, if any on the appellant. As elaborately explained, that tax was duly discharged either by the appellant himself or on his behalf by the agent, the demand raised towards Brand Endorsement does not survive and is required to be quashed. Levy of service tax on IPL Playing Fee attributing the same as rendering of Business Support Service - HELD THAT:- It has been placed on record that tax due thereon was admitted and paid and was so indicated in their rejoinder reply dt. 2.1.2012, whereby the appellant self-assessed to tax on the said service as Brand Promotion Service and thereafter paid the tax @ 10% of the value of Playing Fees vide challans dt. 31.01.2012 13.2.2012 along with interest as applicable. It is noted that this amount does not find a mention as having been appropriated in the impugned order. Upon a query from the Bench, the ld. CA for the appellant undertakes not to claim refund of the said amount paid. In view of the fact that the total demand on this count of Rs. 14,96,402 (Ist SCN-1,16,300, IInd SCN- 12,80,102/-) stands paid along with interest, there is no merit in sustaining the same. Likewise, for the IInd SCN, it is noted that the appellant having admitted his liability to tax under BPS for the amount directly received by him and having paid the same vide challan dated 22.12.11 alongwith interest, the said demand would no more survive. It is also clarified from records that the demand of Rs. 12,80,102/- as worked out by the revenue was inclusive of Match Winning Bonus. This amount has no bearing with rendering of service and needs to be excluded. Accordingly, tax @ 10% of Player Fee of Rs. 11.50 Cr, exclusive of Bonus is leviable to tax which as per challans as indicated above stands discharged. Thus no liability survives on this count as well. Time limitation - HELD THAT:- There are no basis to sustain this charge of the revenue. It is settled law that to invoke these ingredients, it is for the authorities to indicate specifics to prove their case. In the absence of no such evidence forthcoming, any allegation invoking such strong and harsh measures regarding fraud, suppression, misdeclaration is clearly unsustainable and there appears no intent on part of the appellant to evade payment of duty, who has himself paid tax as due along with interest. Under the circumstances, no case is made out in the matter to sustain the said allegations and the same is dismissed. Conclusion - i) The appellant was not liable for service tax under the categories of Business Auxiliary Service and Brand Promotion Service for the periods in question. ii) There are no evidence of suppression or willful misstatement by the appellant, and therefore, the invocation of the extended period of limitation was not justified. iii) The penalties imposed under Sections 76, 77, and 78 of the Finance Act were set aside as unjustified. Appeal allowed.

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• Central Excise

• 2025 (3) TMI 828
  Removal of certain machineries, imported without payment of Customs duty and Excisable goods procured without payment of Central Excise duty under 100% EOU scheme from their premises to other GTA unit without following any procedure and without payment of due duties - levy of penalty in terms of Section 112 and 117 of the Customs Act and Rule 27 of the Central Excise Rules, 2002 - contravention of the provisions of N/N. 52/2003-Cus and 22/2003-CE - HELD THAT:- Undisputed fact is that the appellant had removed the goods-capital goods received under EOU scheme without payment of customs duty/Central Excise duty outside their bonded premises to the premises of DTA. The said premises where these goods were found in any way does not belong appellant. These machines were found in the premises of M/s D Y Technologies Pvt. Ltd., whom appellant claim to be a job-worker. M/s D Y Technologies Pvt. Ltd. even if job-worker on principal to principle basis and separate entity having no relationship with the appellant the renewal of these capital goods to their premises has been done in contravention of the provisions of Notification No 52/2003-Cus and 22/2003-CE. Admittedly, M/s D Y Technologies Pvt. Ltd. is also not EOU unit for a bonded premises removal of these goods in contravention of the provisions of the EOU scheme and the benefit executed by the appellant in this regard. It is quite evident that the there was no permission to remove the capital goods machines from the premises of the EOU to any other place as claimed by the appellant. Further even the claim made by the appellant that they had cleared the said machines to the premises of job worker under a bonafide interpretation of the permission granted is also belied by the job work challans. It is clearly mentioned on the format of challan itself that these challans are meant only for removal of inputs/ partially processed inputs . The claim made by the appellant of bonafides does not carry any weight and needs to be rejected. There are no merits in these submissions as the seized machines were confiscated by order dated 31.03.2017 and allowed to be redeemed on payment of redemption fine of Rs.75,10,000/-. The said order of confiscation and redemption has been upheld by the Appellate Authority. Both the orders were passed prior to the date of permission - undisputedly the goods has been removed in contravention of provisions of Notification No.52/2003-Cus and 22/2003-CE from the premises of the EOU to DTA unit of the unconcerned party. There are no merits in the submissions of the appellant. The demand for duty in respect of these goods needs to be upheld. The claim to the depreciation has been rightly rejected by the Original Authority by observing that the depreciation could have been allowed only when the said goods were cleared after obtaining approval from the Commissioner and after payment of due customs duty. In absence of any such procedure being followed, there are no merits in the said claim of the appellant. Reliance is placed by the appellant in the case of M/s D Y Technologies Pvt. Ltd. was not part of the alleged contraventions made by the appellant. He has dropped the penalties imposed. Dropping of penalties imposed on M/s D Y Technologies Pvt. Ltd. cannot said to be clean chit given to the appellant in matter of clearance without following the due procedure. The order of confiscation of these machines upheld but the redemption fine reduced from Rs.75,10,000/- to Rs.50,00,000/- - Penalties imposed on the appellant was alleged for the above contraventions leading to evasion of duties needs to be upheld. Conclusion - i) Strict compliance with procedural requirements is necessary to avail benefits under exemption schemes. ii) The confiscation of goods, the demand for duties and interest, and the imposition of penalties upheld. The redemption fine reduced from Rs. 75,10,000/- to Rs. 50,00,000/-. Appeal allowed in part.

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• 2025 (3) TMI 826
  Liability of appellant, as a job worker, to pay excise duty - activities of converting lead scrap into lead alloy ingots - Processes undertaken by the appellant as a job worker amounts to manufacture or not - applicability of Rule 4(5)(a) of the CENVAT Credit Rules, 2004 - extended period of limitation - HELD THAT:- Rule 4(5) specifically states that CENVAT Credit is allowable if any input or capital goods after being partially processed, are sent to a job worker for further processing, testing, repair, re-conditioning, or for the manufacture of intermediate goods necessary for manufacture of final products, etc. From the chain of events, it is clear that the lead scrap and other raw materials supplied by EIL are in the nature of inputs (semi-processed). The Larger Bench of the Tribunal in the case of Wyeth Laboratories Ltd. vs Collector of Central Excise, Mumbai [ 2000 (7) TMI 109 - CEGAT, NEW DELHI] , had held that waste scrap could be sent to a job worker for purpose of processing and manufacture of intermediate products which could be further put to use in the manufacture of final product at the end of the principal manufacturer. The said rule obligates that the goods that are sent by the principal manufacturer without payment of central excise duty, are subsequently returned for further processing to the principal manufacturer for utilization in the final product (viz. lead storage battery, in the present case), within the specified period. Also, with respect to the Standard Input Output Norms (SION), we take note of the appellant s assertion that quality of lead scrap is an important variable and is necessary for consideration to arrive at the recovery percentage (based on thorough testing of waste and scrap) as undertaken by EIL in their R D section. The percentage of recovery would depend on the lead content in the waste and scrap and the nature of the scrap, like lead scrap or dross or sludge etc. There cannot therefore be a fixed one-to-one formula. Thus as for the Department s contention on the recovery part and adoption of the SION norms to the present matter is concerned, it cannot be doubted that the recovery percentage would vary from case to case, more so when the scrap supplied is not the kind of standard scrap as enumerated in the norms as has also been duly tested and certified by the R D wing of EIL at the time of supply. We further note that the kind of scrap indicated in the norms is well-defined and clearly states of its constitution, etc. In view of the fact that the goods were supplied in terms of job challans issued under rule 4(5)(a) ibid, the purchase orders as supplied by EIL indicating recovery percentages in addition to other details, we are of the view that there is no case made out for demand of duty of excise, if any, from the job worker. There is also no merit in the department s proposition in denying the appellant the job work status by imputing that the lead converted from lead scrap could not be cleared from their end upon payment of central excise duty as the said amounts to manufacture - the claim of the Department disentitling the waste and scrap for the benefit of Rule 4(5)(a) of the Cenvat Credit Rules, 2004 does not stand to any merit - there are no justification for the demand of duty or imposition of penalty on the appellant in the matter. Conclusion - i) Job work under Rule 4(5)(a) does not require the processes to amount to manufacture under Section 2(f) of the Central Excise Act. The responsibility for duty liability lies with the principal manufacturer, not the job worker. ii) There is also no merit in the department s proposition in denying the appellant the job work status by imputing that the lead converted from lead scrap could not be cleared from their end upon payment of central excise duty as the said amounts to manufacture. Appeal allowed.

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• 2025 (3) TMI 779
  Rejection of claim of the Petitioner for CENVAT Credit of the countervailing duty (CVD) paid on the imported capital goods - whether the Petitioner can avail CENVAT Credit for the CVD qua the imported capital goods in terms of Rule 4 of the CENVAT Credit Rules, 2004? - HELD THAT:- In Osram Surya [ 2002 (5) TMI 49 - SUPREME COURT ] the Supreme Court was seized with the question whether manufacturers who had imported goods prior to the amendment to Rule 57-G of the Central Excise Rules, 1944, could claim MODVAT credit post the said amendment. Vide the amendment to Rule 57-G, the manufacturers could avail credit only within a period of six months from the date of issuance of documents mentioned in the proviso to the said Rule. Relying on the said amendment, the claims of the Appellants therein were rejected by the revenue authorities as being time barred. The Appellants challenged the said decision. In the said challenge, the Supreme Court held that credit cannot be sought beyond the period of six months, though the import was made prior to the amendment. Further, the manufacturers vested rights prior to the amendment in claiming the credit was held not to be affected by the amendment. However, the said amendment did limit the time within which the same could be claimed. The Supreme Court also clarified the retrospective and prospective effect of the said amended proviso to Rule 57-G of the 1944 Rules. Thus, as per the Supreme Court the limitation introduced via amendment to the Rule 57G would be applicable against any manufacturer claiming credits after the said amendment came into force. In Philips India [ 2005 (2) TMI 399 - CESTAT, MUMBAI ] the CESTAT, Mumbai was dealing with similar facts wherein the Appellant therein had imported certain capital goods under the EPCG Scheme and failed to fulfill the export obligations under the said scheme. The goods were exported in the year 1994-1995 and the applicable duty was paid only after the order of the Settlement Commission. Thereafter, a claim was raised for CENVAT Credit in May, 2003 which was rejected by the Commissioner of Customs inter alia on the ground that the same is time barred. In Global Ceramics [ 2019 (5) TMI 1432 - DELHI HIGH COURT ] the Court was dealing with CENVAT Credit in respect of inputs for the domestic market which is governed by Rule 4 (1) of the CENVAT Credit Rules. In the present case, the Court is dealing with CENVAT Credit in respect of capital goods under Rule 4 (2) of the CENVAT Credit Rules. Further, it is noted that the Court did not discuss the decision of the Supreme Court in Osram Surya (supra) wherein it is clearly held that the second proviso to Rules 57-G of the 1944 Rules (which is identical to the third proviso to Rule 4 of the CENVAT Credit Rules) would be applicable qua manufacturers claiming credit after introduction of the said proviso. Thus, the limitation introduced via the amendment would affect any claim raised after the amendment came into effect. In the facts of the present case, the Petitioner did not by itself voluntarily deposit the duty and penalty. The admitted position is that out of nine EPCGs, qua four EPCGs, the export obligation was not fulfilled. A substantial period of time i.e., 8 years was given to the Petitioner for fulfilling its export obligations. Extension of two years was also given qua certain EPCGs. After the said extended period had also expired, the show cause notice was issued. The DRI then started investigation in respect of the unfulfilled export obligation. Even at that stage, the customs duty along with interest was not paid by the Petitioner. Only after the investigation was started, the Petitioner tendered the said amount in order to avoid prosecution and approach the Settlement Commission. The confiscation of goods also could not also take place as the goods were no longer available for confiscation which is clearly captured in the order of the Settlement Commission. Conclusion - i) The Settlement Commission s order is correct and that the Petitioner s claim for CENVAT Credit is rightfully rejected as time-barred. ii) The Settlement Commission s decision upheld, emphasizing the finality of settlement proceedings under Section 127 (j) of the Customs Act. The Settlement Commission s order does not warrant any interference - Petition dismissed.

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• 2025 (3) TMI 778
  Review of refund claim which was already granted - Determination of physician samples - Rule 4 or Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - rejection of refund claim partly as being time barred and rejection of balance amount stating that valuation of physical samples were to be determined under Rule 4 of the Valuation Rules 2000 - applicability of CBEC Circular dated 25.4.2005 - HELD THAT:- This is a case where the appellant initiated a refund claim based on Boards Circular. It was for the department to examine the claim from all angles, on fact and law, and issue a SCN if they choose to reject the claim. In doing so they were obliged to bring out all the objections that they had in sanctioning the claim, so that the noticee could effectively respond to the allegations being made at one go. Piecemeal issue of SCN or adjudication cannot be done. It is not the departments case that the second round of appeal was caused by the Lower Authority going beyond the remit of the First Appellate Authority s order. The Hon ble Supreme Court in Gangai Vinayagar Temple Vs Meenakashi Ammal, [ 2009 (9) TMI 1095 - SUPREME COURT] , held that res judicata is an ancient doctrine of universal application and permeates every civilised system of jurisprudence. This doctrine encapsulates the basic principles in all judicial systems which provide that an earlier adjudication is conclusive on the same subject-matter between the same parties. The issue could not have been reopened again in an appeal by the same Authority, nor could fresh issues which were omitted to be alleged in the first round of appeal be added in the second round, multiplying the litigation. A decision or order made by an Authority of competent jurisdiction is final, unless it is modified or reversed in appeal. The well settled principles of res judicata debars an Authority from exercising its jurisdiction to determine the lis if it has attained finality between the parties. This is based on public policy in order to put an end to litigation. Further no man should be vexed twice for the same cause. Revenue should not have reviewed and taken up the refund orders in appeal when they did not challenge the order of the First Appellate Authority which partly allowed the appeal leading to the sanction of the refund - The binding nature of the first appellate order on the parties to the litigation would endure, as it had not been appealed against, even in circumstances where the basis of which it was made is subsequently held to be an incorrect application of the relevant tax law. To do otherwise is in breach of judicial discipline and is destructive of the basic principles of the administration of justice. Conclusion - i) The department s attempt to reopen settled issues without challenging the first appellate order was procedurally improper and legally unsound. ii) The Tribunal set aside the impugned order, allowing the appeals and granting the appellant eligibility for consequential relief. Appeal allowed.

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• 2025 (3) TMI 777
  100% Export Oriented Unit (EOU) - liability to pay duty on inputs used in the manufacture of final products cleared in the Domestic Tariff Area (DTA) without payment of duty - violation of N/N. 52/2003-Cus dated 31.03.2003, without invoking Section 28 of the Customs Act, 1962, or Section 11A of the Central Excise Act, 1944 - invocation of extended period of limitation. Whether the appellant is liable to pay duty on the inputs utilised in the manufacture of the final products which are cleared under DTA without payment of duty availing the benefit of various exemption notifications? - HELD THAT:- In view of the N/N. 52/2003-Cus dated 31.03.2003, since the goods have been cleared under DTA without payment of duty, the observation of the Commissioner that duty foregone on the inputs utilized in the manufacture of the above exempted products has to be discharged by the appellant needs to be sustained. The claim of the counsel that they fall under the main clause of the notification and the question of reading the proviso into the main clause cannot be accepted in view of the fact that the proviso to the main clause has to be necessarily read with the main clause which brings in certain restrictions in the situations referred in the main clause. The Hon ble Supreme Court in the case of Union of India vs. VKC Footsteps India Pvt. Ltd. [ 2021 (9) TMI 626 - SUPREME COURT] while dealing with the interpretation of the proviso to Section 54(3) oof the CGST Act observed that Rule 89(5) is consistent with Section 54(3) of the CGST Act. Thus, there are no reason to accept the contention of the learned counsel that the proviso is independent of the main clause para 3 of the Notification 52/2003. Whether the provisions of conditions of notification 52/2003 can be invoked to demand the duty when these conditions are violated without invoking Section 28 of the Customs Act, 1962 or Section 11A of Central Excise Act, 1944? - HELD THAT:- The Supreme Court of India in the case of Moser Baer India Ltd. vs. Commissioner of Customs, Noida [ 2015 (11) TMI 137 - SUPREME COURT] while dealing with invocation of extended period in terms of the bond executed by an 100% EOU observed that the goods are used for the purpose for which they are imported. If the perception of the Revenue was that these are not captive goods or the benefit of Notification No. 53/97 is not available to the assessee, the period of limitation started at the threshold and therefore, on the facts which were known to the Revenue the Show Cause Notice could have been issued within a normal period of limitation prescribed under Section 28 which was six months at the relevant time. Thus, there is no question of violation of any of the conditions of the Notification since they had legitimately availed the benefit of the exemption Notifications. This aspect was known to the department and hence, the question of invoking extended period does not arise. Since the show-cause notice was issued on 11.05.2011, the demand for the normal period alone is to be sustained. Conclusion - i) The demand for duty on inputs used in the manufacture of goods cleared in DTA without payment of duty upheld. ii) The duty demand on inputs for the normal period upheld, rejecting the extended period invocation. Appeal allowed in part.

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• 2025 (3) TMI 776
  Clandestine removal - discrepancy between ER-1 and ER-4 Returns - typographical error in ER 4 - extended period of limitation - HELD THAT:- Admittedly, the entire proceedings have been initiated on account of audit taken up in May 2015. The audit team has issued Spot Memo on 09/5/2015 raising the issue that ER-4 Returns are showing higher quantity of sales as against the quantity shown in the ER-1 Returns. Audit has pointed out that the difference between these figures is to tune of 945.900 MT. The appellant submitted their explanation on 19/06/2015 stating that while filing the ER-4 for the month of January 2014, instead of typing 10 MT, they have typed the same as 100 MT because of which the excess quantity of 90 MT has been shown in the ER-4 Returns. In respect of 755.900 MT, they have explained that the scrap generated in the course of manufacture has been shown in the ER-4 under the sales column but has been consumed by them captively for re-cycling the same. Since the ER 4 Return does not have any specific column to show such captively consumed figures, they have shown the same in the Sales column. The entire demand has been confirmed based solely on the basis of audit objection, without giving due consideration to the documentary evidence placed by the appellant. Therefore, on this count itself, the confirmed demand is not sustainable. Time limitation - HELD THAT:- It is found that by way of Spot Memo dated 09/5/2015, the issue about the differential 946 MT was raised by the audit team for which the appellant has filed their reply on 19/6/2015. Therefore, the Department has come to know about the issue on 19/06/2015 itself. However, they have waited for next nearly two years to issue the Show Cause Notice by invoking the extended period, without showing as to what kind of investigation was taken up during the intervening period. Moreover, it is found that the difference in quantification of demand has been gathered from ER-1, ER-4 and ER-6 Returns which have been filed by the appellant. All these facts go on to show that the Department has not made out any case of suppression on part of the appellant - the demand set aside even on account of limitation. Conclusion - i) The demand based on an alleged discrepancy between ER-1 and ER-4 Returns is not sustainable due to a lack of corroborative evidence of clandestine clearance. ii) The demand is time-barred, as the Department failed to issue the Show Cause Notice within the appropriate timeframe without justification. The appeal is allowed both on account of merits as well as on account of time bar.

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• Indian Laws

• 2025 (3) TMI 825
  Dishonour of cheque - interpretation of Section 148 of the NI Act - whether the petitioner has been able to make out any exception for not to deposit 20% of the fine or compensation awarded by the learned MM before the learned ASJ as also whether the learned ASJ has exercised the discretion after taking into consideration the various factors? HELD THAT:- Since the petitioner has sought to challenge the reasonings in the two impugned orders passed by the learned ASJ, the issue of non-challenge to any of the two earlier orders dated 07.08.2024 and 23.09.2024 and/ or their non-compliance by the petitioner as also the other contentions raised by the learned counsel for the respondent(s) need not be gone into by this Court. Likewise, the contention of the learned counsel for respondent(s) herein that the petitioner had acquiesced with either of those two earlier orders dated 07.08.2024 and 23.09.2024 passed in the very same two appeals by the very same learned ASJ is of no significance. Therefore, in such a scenario wherein the reasonings given by the learned ASJ in the impugned orders are in question, the present petitions challenging them are per se maintainable. In the considered opinion of this Court, neither of the aforesaid factors spelt out as ought to be for the learned ASJ to direct the petitioner to deposit 20% of compensation amount as awarded by the learned MM vide order(s) dated 08.07.2024. It is said so, since neither the presumptions of/ in the NI Act nor the appellant being pronounced as guilty , per se, can be held sufficient for calling upon any such guilty like the appellant thereto/ petitioner herein to deposit the 20% of compensation amount as awarded by the learned MM at the very threshold of the appeal itself. Similarly, since vide a detailed judgment passed by the learned MM, has convicted the appellant (like the petitioner herein) and is pronounced as guilty cannot qualify to be a reason, necessarily not a sufficient one, since the appeal thereagainst is already pending adjudication/ disposal before the very same learned ASJ and doing so will tantamount to pre-judging the case of the appellant. Conclusion - This Court finds that there is no clear finding as it is not spelt out in any of the impugned orders as to whether the petitioner has been able to make out any exception for waiver of depositing 20% of the fine or compensation awarded by the learned MM before it as also the aforesaid factors considered by the learned ASJ and the reasons spelt out therein, and instead calling upon the petitioner to deposit 20% of the compensation amount as awarded by the learned MM in the two impugned orders, are insufficient. Petition allowed.

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• 2025 (3) TMI 775
  Challenge to involvement of the second respondent in an arbitration agreement - HELD THAT:- Under the agreement containing an arbitration clause, M/s Pratibha Industries Limited was appointed as a contractor by the appellant for construction of a hospital consisting of 200 beds. M/s Pratibha Industries Limited has appointed the second respondent to do the electric work. Only because certain payment was directly made by the appellant to the second respondent, it cannot be said that the second respondent becomes a beneficiary under the contract in which arbitration clause was provided. Therefore, the High Court has committed an error. If the 2 second respondent has deposited any amount towards the cost of arbitration with the Delhi International Arbitration Centre, on the second respondent furnishing proof of the payment, the Delhi International Arbitration Centre shall refund the same to the second respondent - Application disposed off.

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