TMI Tax Updates - e-Newsletter
August 31, 2024

Case Laws in this Newsletter:

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

Articles

1. Detention of goods in transit-What to expect when your goods are detained or seized while in transit

   By: Pradeep Reddy

2. FILING OF BILL OF EXPORT FOR THE SUPPLY OF ‘SEZ’ UNITS – MANDATORY?

   By: DR.MARIAPPAN GOVINDARAJAN

3. Bail can be granted to an accused of furnishing purchases from fake suppliers if trial is prolonged

   By: Bimal jain

4. A New Era of Transparency and Efficiency with the 2024 GI Rules

   By: DrJoshua Ebenezer

News

1. Meeting of State/UTs Food Secretaries discusses procurement of foodgrains in Kharif Marketing Season (KMS) 2024-25 (Kharif Crops) for central pool

2. Bureau of Indian Standards hosts Twin-Conventions aligning academic research with standards

3. Monthly Review of Accounts of Government of India upto the month of July 2024 (FY2024-25)

4. Address by Shri Shaktikanta Das, Governor, Reserve Bank of India at the Global Fintech Fest (GFF), 2024, Mumbai, August 30, 2024

5. CBIC hosted 4th National Conference on functioning of Land Customs Stations (LCSs) in New Delhi

Notifications

GST - States

1. 29/2023-State Tax - dated 28-8-2024 - Delhi SGST

Special procedure to be followed by a registered person or an officer u/s 107(2) of DGST Act who intends to file an appeal against the order passed by the proper officer

2. 22/GST-2 - dated 28-8-2024 - Haryana SGST

Amendment of Notification no. 89/GST-2, dated 21.09.2018 (reducing rate of TCS from 0.5% to 0.25%) under the HGST Act, 2017

SEBI

3. SEBI/LAD-NRO/GN/2024/202 - dated 26-8-2024 - SEBI

Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Fourth Amendment) Regulations, 2024.

4. SEBI/LAD-NRO/GN/2024/201 - dated 26-8-2024 - SEBI

Securities and Exchange Board of India (Intermediaries) (Amendment) Regulations, 2024.

5. SEBI/LAD-NRO/GN/2024/200 - dated 26-8-2024 - SEBI

Securities and Exchange Board of India (Depositories and Participants) (Second Amendment) Regulations, 2024

SEZ

6. S.O. 3639 (E) - dated 28-8-2024 - SEZ

Central Government de-notifies an area of 17.6264 hectares, thereby making the resultant area as 20.4149 hectares at Ahmedabad in the State of Gujarat

Circulars / Instructions / Orders

GST - States

1. CCT/26-4/2024-25/G/1625 - dated 30-7-2024

Clarification on various issues pertaining to taxability and valuation of supply of services of providing corporate guarantee between related persons.

DGFT

2. 21/2024-25 - dated 30-8-2024

Delisting of an Agency Authorized to issue Certificate of Origin (Non Preferential) from Appendix 2E of FTP, 2023

3. 20/2024-25 - dated 29-8-2024

Further abeyance of Public Notice No. 05/2024 dated 27.05.2024 until 15.09.2024.

4. Trade Notice No. 15/2024-2025 - dated 29-8-2024

Abeyance of Public Notice No. 05/2024 dated 27.05.2024

Highlights / Catch Notes

GST

• Petitioner's contradictory statements on address & business led court to conclude fraud, dismissing plea against bank account attachment.

  Case-Laws - HC : Petitioner challenged the provisional attachment of his bank account u/s 83 of the CGST Act by invoking the jurisdiction of the High Court under Article 226 of the Constitution. However, the Court found contradictions in the petitioner's statements regarding his permanent address and business location. Combined with the respondents' assertions of the petitioner being non-genuine, the Court concluded that the petitioner was committing fraud on both the Revenue and the Court. Consequently, the Court refused to exercise its discretionary jurisdiction and dismissed the petition.
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• Supreme Court Clarifies Limitation Act's Application to Tax Laws, Excludes Section 5 for Delays Beyond 30 Days.

  Case-Laws - HC : Section 29(2) of the Limitation Act, 1963 is applicable in relation to the period of limitation under tax laws like the Central Excise Act and the APGST Act. The Supreme Court has held that where the special law restricts the additional period for condonation of delay, it effectively excludes Section 5 of the Limitation Act by necessary implication. Section 107 of the APGST Act prescribes the limitation period for filing appeals and restricts the condonable period to 30 days. Therefore, Section 5 of the Limitation Act stands excluded, and the appellate authority cannot condone delay beyond 30 days u/s 107(4) of the APGST Act. The HC dismissed the petition, upholding the applicability of Section 29(2) and the exclusion of Section 5 in such cases.
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• Bank account freeze challenged; refund process clarified. Seized laptops stolen, FIR lodged.

  Case-Laws - HC : The High Court adjudicated a matter concerning refund of an amount deposited under compulsion and provisional attachment of bank accounts. The court refrained from issuing directions for refund, clarifying that the petitioners could apply for refund in accordance with law without awaiting adjudication of the show cause notice. Regarding seized articles and documents, the respondent stated that all hard disks and other articles were returned, except two laptops which were stolen, with an FIR lodged for the same. The petition was consequently disposed of.
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• Bail Granted: Accused Released Due to Delayed Trial, Uncertain Involvement, and Controlled Evidence; Personal Bonds Required.

  Case-Laws - HC : The court granted bail to the accused applicant, considering the following factors: the trial has not yet commenced, the applicant's complicity is yet to be determined, relevant evidence is under the department's control, and there is no indication that the applicant's release would adversely affect the trial. Additionally, the alleged offense carries a maximum punishment of five years' imprisonment, and the applicant has already been in jail for a substantial period. The court opined that the applicant has made a case for bail, subject to furnishing personal bonds and sureties to the satisfaction of the concerned court and fulfilling imposed conditions. The decision was based on the Supreme Court's precedents, which emphasize considering the gravity of the offense, the object of the relevant Act, and the attending circumstances, rather than categorizing all economic offenses as one group and denying bail.
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• Petitioner seeks release of provisionally attached bank accounts, return of seized electronic devices & refund of Rs. 22 lakh after search & seizure raid.

  Case-Laws - HC : Petitioner sought release of provisionally attached bank accounts, return of seized laptops, CPUs, mobile phones and documents, and refund of Rs. 22 lakh allegedly deposited during search and seizure raid. Commissioner justified freezing bank accounts through speaking order. Regarding seized devices, Commissioner directed to examine retaining them beyond 30 days as per Section 67(3) of CGST Act and ensure data access to petitioner. Counter-affidavit by respondents on refund claim not on record, to be filed before next hearing on 20.08.2024. Matter listed accordingly.
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• Seized gold ornaments to be released upon payment of fine, as stock-in-trade exemption applies.

  Case-Laws - HC : Petitioner sought implementation of Appellate Authority's order to release seized gold ornaments due to discrepancy between delivery challan quantity and actual quantity. Court held that although goods are liable for confiscation, they can be released upon payment of fine considering they are petitioner's stock-in-trade. Petitions disposed, directing release of entire 1647.970 grams of seized gold to petitioners upon executing bonds, undertaking not to alienate covered property until proceedings culminate. Parties entitled to approach Appellate Tribunal if aggrieved by Appellate Authority's proceedings.
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• Court Upholds ITC Block; Confirms Deputy Commissioner's Jurisdiction, Dismisses Natural Justice Violation Claims.

  Case-Laws - HC : The High Court dismissed the petition seeking a declaration that the blocking of Input Tax Credit (ITC) was unlawful due to lack of jurisdiction and violation of principles of natural justice. The court held that u/r 86A(1) of the OGST Rules, 2017, the Deputy Commissioner of State Taxes, being higher in rank than an Assistant Commissioner, had jurisdiction to pass the impugned orders relating to State GST. The court clarified that the circular issued by the Government of India on 02.11.2021 is applicable only to Central GST and not State GST unless adopted by the State Government through a declaration, which was not done in this case. Consequently, the claim of lack of jurisdiction and violation of natural justice was rejected, and the petition was disposed of.
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• Dealer's registration cancelled for non-payment; failed to revive under amnesty by clearing dues & filing returns. Delay proves fatal for petition.

  Case-Laws - HC : Appeal dismissed due to filing beyond statutory limitation period. Petitioner's registration cancelled earlier, failed to avail amnesty scheme allowing restoration upon clearing dues. Petitioner not registered dealer during intervening period, activities unmonitored, transactions unascertainable. Petitioner did not controvert allegation of non-filing returns for six months. Law favors diligent, not indolent. Delay counted against petitioner. Petition dismissed.
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• Tax credit availed through bogus invoices; Court upholds statutory remedy over judicial interference.

  Case-Laws - HC : The High Court dismissed the appeal, upholding the Single Judge's decision to relegate the appellant to the alternative remedy of replying to the show cause notices and adjudication by the statutory authority. The Department suspected availing of input tax credit on bogus invoices, prompting the issuance of an intimation u/r 86A to prevent irregular availment. Although there was a delay in issuing show cause notices, the appellant did not approach the court during that period. The court found no grounds for belated interference with the intimation under Article 226, as the appellant had the statutory recourse of adjudication after responding to the show cause notices.
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• GST Exemption Changes for Maharashtra Jeevan Pradhikaran: Pre-2022 Services Exempt, Post-2022 Services at 18% Rate.

  Case-Laws - AAR : The key aspects covered are the applicable GST rates for services provided by the applicant to Maharashtra Jeevan Pradhikaran (MJP) as part of the Jal Jeevan Mission, based on the time of supply. Services provided before 01.01.2022 are exempt under Entry 3 of Notification 12/2017-Central Tax (Rate), while those after 01.01.2022 are taxable at 18% GST. The authority examined whether MJP qualifies as a 'Government Authority' under the exemption entry and concluded that for services after 01.01.2022, MJP does not meet the criteria due to the omission of 'Government Authority' from the entry. The role of MJP as an agency implementing water supply schemes under constitutional provisions was analyzed, with the authority determining that MJP's actions exceed the scope of an agency. The summary covers the key legal aspects, GST rates, and the rationale behind the rulings based on the relevant notifications and constitutional provisions.
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• Land lease not exempt, commercial office complex setup faces GST.

  Case-Laws - AAR : The services provided by SMPK by way of granting a long-term lease of land at Taratala Road for a period of thirty years for setting up a commercial office complex to the applicant do not satisfy all the conditions specified in entry number 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. The services by way of granting a long-term lease of land by SMPK to the applicant for the purpose of "setting up a commercial office complex" are not covered under entry 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and therefore cannot be treated as an exempt supply.
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• Exemption for RWAs on reimbursement up to Rs. 7,500/month per member, not collective limit.

  Case-Laws - AAR : The Advance Ruling Authority held that the exemption under Serial No. 77 of Notification No. 12/2017 - Central Tax (Rate) is member-specific for Resident Welfare Associations (RWAs). If an RWA collects up to Rs. 7,500 per month from a member as reimbursement of charges or contribution share, it shall not be liable to pay GST on such amount, irrespective of whether the contribution from other members exceeds Rs. 7,500 per month. The exemption applies individually to each member's contribution, not collectively to the RWA's total collections. Therefore, if an RWA registered under GST collects Rs. 7,000 from one member and Rs. 9,000 from another in the same residential complex, it shall not be liable to pay tax on the Rs. 7,000 amount.
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• Engineering consultancy for urban drinking water supply projects qualifies for tax exemption.

  Case-Laws - AAR : Pure services provided by the applicant for survey, design, drawing, estimates, and comprehensive plan preparation related to water supply schemes qualify as services supplied to the State Government under the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) project. These services relate to functions entrusted to Panchayats under Article 243G or Municipalities under Article 243W of the Constitution, such as drinking water supply for domestic, industrial, and commercial purposes listed in the Eleventh and Twelfth Schedules. Consequently, the applicant's services satisfy the condition specified in serial number 3 of the exemption notification regarding the status of the recipient and the nature of services provided.
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Income Tax

• Income Tax Act Section 14A: Expenses Disallowed for Exempt Income, Limited to Exempt Income Earned.

  Case-Laws - HC : This case deals with the disallowance of expenditure u/s 14A of the Income Tax Act, which pertains to expenditure incurred in relation to exempt income. The key points are: Section 14A mandates disallowance of expenditure incurred in earning exempt income to prevent the assessee from claiming dual benefit of exempt income and deduction of related expenditure against taxable income. The disallowance is restricted to the extent of exempt income earned during the year. Existence of exempt income is a prerequisite for invoking Section 14A. The court affirmed the principle of apportionment and identification of expenditure related to exempt income. Expenditure can be claimed as deductible only if incurred to earn taxable income. Section 14A(2) and Rule 8D reinforce this principle. The Explanation appended to Section 14A, seeking to apply the provision irrespective of exempt income earned, is prospective and applies from Assessment Year 2022-23 onwards, as clarified in the Memorandum to the Finance Bill, 2022. Consequently, the court upheld the Tribunal's view that disallowance u/s 14A is restricted to the extent of exempt income earned during the year for the relevant assessment years.
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• Reassessment Blocked if Initial Grounds Invalid: New Notice Required Under Income Tax Act Section 147.

  Case-Laws - HC : The case pertains to the validity of reopening an assessment u/s 147 of the Income Tax Act. The crux lies in determining whether the reassessment proceedings can continue when the original reason for initiating them is no longer available. Relying on precedents from the Bombay and Madras High Courts, it was held that if the ground for reopening is no longer valid, the reassessment cannot proceed based on the original notice u/s 148, necessitating a fresh notice. In the present case, the assessment order revealed that no additions were made concerning the deletion of the immovable asset, which formed the basis for reopening. Consequently, since reassessment could not be sustained on this ground, the assessment order was set aside in favor of the assessee, without examining other contentions regarding the invalidity of the notice u/s 148.
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• Seizure of incriminating material triggers reassessment proceedings u/s 153C, not reopening of assessment.

  Case-Laws - AT : Applicability of Section 153C and Section 148 of the Income Tax Act in cases involving seizure of incriminating material during search or requisition of documents related to an assessee other than the one against whom the search was conducted. The Rajasthan High Court's judgment clarified that if the twin conditions for invoking Section 153C are satisfied, the Assessing Officer must proceed u/s 153C, issuing notices for filing returns for relevant preceding years and assessing or reassessing the total income. Resorting to Section 148 is not permissible in such cases. The findings of the Delhi ITAT in the case of M/s Mah Impex Pvt. Ltd. involving the Surendra Kumar Jain Group were applied, allowing the assessee's appeal.
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• Software Project Abandoned, Expenses Allowed: Technology Obsolescence Halts Development.

  Case-Laws - AT : The case pertains to the disallowance of product development expenses written off due to technological obsolescence. The assessee had abandoned a software development project titled "ProHR" as it was unlikely to yield economic benefits. The authorities presumed the project was completed, leading to disallowance of expenses. However, the project was not even put for initial trial, rendering it unsellable. Since the project was abandoned without any enduring benefit or existence of new software, the expenses were held to be revenue in nature. Consequently, the addition made by the lower authorities was deleted, and the assessee's appeal was allowed.
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• Tax reassessment notice invalid due to improper sanction & income below Rs. 50L threshold.

  Case-Laws - AT : Reopening of assessment beyond three years requires sanction from Principal Chief Commissioner of Income Tax, whereas the assessee obtained sanction from Principal Commissioner of Income Tax, rendering it invalid as per the Siemens Financial Services case. The alleged escaped income of Rs. 9,00,000/- is below Rs. 50,00,000/-, barring the notice u/s 148 due to limitation u/s 149(1)(b), as held in Ganesh Dass Khanna case, where the extended ten-year period applies only for serious tax evasion cases with concealment of income above Rs. 50 lakhs. Consequently, the impugned notice issued u/s 148 is without jurisdiction and set aside, making the resultant reassessment order null and void, decided in favor of the assessee.
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• Tribunal Upholds Removal of Unexplained Income Additions; Revenue's Appeal Dismissed Due to Lack of Evidence.

  Case-Laws - AT : The assessee received cash credits which were treated as unexplained income u/s 68 by the Assessing Officer (AO). However, the Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition. The Tribunal upheld the CIT(A)'s order, observing that apart from the first two payments made on the transaction date, the third payment was received in advance by the assessee through banking channels. The Revenue only raised doubts about the sales bills but did not dispute the receipt of money. The assessee furnished stock statements, and the Revenue did not raise any doubts. Since the sales transaction was declared as revenue receipt, the Tribunal found no infirmity in deleting the addition u/s 68. Regarding the cash deposit addition, the assessee submitted relevant records like sales register, purchase register, stock statement, cash book, bank book, and bank statements. The AO made the addition u/s 68 solely because the assessee showed cash sales on a single day, without appreciating that it was the day of demonetization announcement when people anxiously converted old currency notes into other forms like gold. In the absence of any material to doubt the availability of gold stock, the Tribunal upheld the CIT(A)'s decision to delete the cash deposit addition, dismissing the Revenue's appeal.
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• ITAT Overturns Unexplained Cash Addition; Accepts Assessee's Cash Book as Legitimate Explanation.

  Case-Laws - AT : This case pertains to the addition made u/s 69A of the Income Tax Act regarding unexplained cash found during a search operation. The assessee produced a cash book to explain the cash, but the Departmental Representative argued that maintaining a cash book is not mandatory for individuals, and the cash book was an afterthought. The CIT(A) disbelieved the cash book solely on the ground that individuals generally do not maintain cash books, without any substantive basis. The CIT(A) treated the amount as explained on an estimated basis and confirmed the remaining addition. The ITAT held that the CIT(A)'s findings on the cash book were baseless and perverse. Since the assessee produced the cash book and explained the cash found during the search, contending it belonged to family members, and the Panchnama drawn during the search also mentioned the names of the assessee and other family members, the authorities erred in making/sustaining the addition. Consequently, the assessee's appeal was allowed.
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• Tribunal Directs Tax Officer to Grant Exemption After Assessee Files Form 10B Within Extended Deadline.

  Case-Laws - AT : Assessee failed to file return of income and Form No. 10B before due date, resulting in denial of benefit u/ss 11 and 12. However, consistent judicial precedents, including Sarvodaya Charitable Trust, Shri Laxmanarayan Dev Shrishan Seva Khendra, and Sh. Rajkot Vishashrimali Jain Samaj cases, have held that exemption cannot be denied merely for delay in furnishing audit report in Form No. 10B, especially when authorities have discretionary powers to condone such delay. The Appellate Tribunal noted that the assessee filed Form No. 10B within the extended due date, and the denial of Section 11 benefit was due to incorrect factual appreciation. Consequently, the Tribunal directed the Assessing Officer to consider Form No. 10B and allow the exemption claim u/s 11.
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• Tribunal Rules No Permanent Establishment for Adobe in India, Deletes Tax Additions, Upholds Appeal Decision.

  Case-Laws - AT : The assessee, Adobe Systems Software Ireland Limited, is a company incorporated under Irish laws and a tax resident of Ireland per the India-Ireland tax treaty. The tribunal held that the issue of existence of a Permanent Establishment (PE) in India is covered by a coordinate bench order, which deleted additions made by the Assessing Officer. It was held that no addition was proposed by the Transfer Pricing Officer for Adobe India regarding marketing support services. Attributing profits to the alleged PE (Adobe India) would contradict Supreme Court rulings in Morgan Stanley and E-Funds cases. The tribunal rejected the reasons and conclusions on which the Assessing Officer and Dispute Resolution Panel's findings of PE existence were premised. Consequently, the additions made by the Assessing Officer were deleted on merits for the year under consideration, and the assessee's appeal was allowed.
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Customs

• Exporter Vindicated: Arbitrary Recovery Order Quashed for Lack of Proper Probe into Alleged Forgery.

  Case-Laws - HC : Adjudicating authority violated principles of natural justice by failing to consider petitioner's submissions and passing a non-speaking order simply stating recovery was made, without conducting proper investigation or tracing full truth. Court held petitioner did not admit liability, paid amounts under pressure to fulfill export order due to alert on IEC. Incomplete investigation and lack of evidence made it unjustified to confirm charges against petitioner. Impugned order set aside. Respondent directed to investigate how forged scrip was registered, re-registered license used by two importers, why parties not summoned or verification done, and ascertain truth. Petition disposed.
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• Cargo Smuggling into SEZ Zone: Legalities Questioned, Powers Scrutinized.

  Case-Laws - AT : Violation of Special Economic Zones Act, 2005, Special Economic Zones Rules, 2006, and Customs Act regarding smuggling into the NSEZ. Determination of whether a customs officer is a Proper Officer under the SEZ Act. Failure to establish contravention of Sections 111(m), 112(a), 112(b), and 114AA of Customs Act. Section 110 of Customs Act not a notified offence under SEZ Act. Lack of notification authorizing NSEZ officers to seize goods, rendering seizure and subsequent confiscation u/s 111(m) unsustainable. Vehicles used without knowledge of owner or person-in-charge, invalidating confiscation u/s 115(2). Confiscation of goods, seizure of vehicles, and penalty imposed on the Appellant set aside. Impugned orders quashed, appeal allowed.
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• Aluminium scrap vs wire classification dispute resolved: Scrap tassel prevails over coiled wire form.

  Case-Laws - AT : Goods classified as Aluminium Scrap Tassel under CTH 76020010 instead of Coils of Aluminium Wire under 76051100. Chartered Engineer Certificate confirmed goods not in primary form of coils, but Aluminium Scrap Tassel as per ISRI specification including old, unalloyed Aluminium wire and cable with defects. Enhancement of value based on NIDB data not sustainable as goods correctly classified as Aluminium Scrap. Tribunal set aside the impugned order, allowing the appeal.
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• Tribunal Upholds CVD on Chinese Steel Imports Before Exemption; Allows Duty Drawback and Shipping Bill Amendments.

  Case-Laws - AT : Imposition of countervailing duty (CVD) on imports of stainless steel coils and plates from China, confiscation and penalties, duty drawback claims, and amendment of shipping bills. The Tribunal held that the imports on 12.10.2017 were liable for CVD u/s 9 of the Customs Tariff Act, 1975, as the exemption notification was issued later on 13.10.2017. While upholding the CVD demand, the Tribunal set aside the confiscation of goods u/s 111(d) of the Customs Act, 1962, and penalties u/ss 112(a), 114A, and 114AA, citing lack of evidence. The appellants' duty drawback claim and request for amendment of shipping bills u/s 149 were allowed, directing the Commissioner to examine and provide relief as per law. The Tribunal relied on relevant legal provisions, notifications, and judicial precedents in its decision.
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• Confiscation of HDPE Regrind Overturned: CESTAT Rules Import License Unnecessary Due to Unreliable Lab Test.

  Case-Laws - AT : The imported goods, HDPE Regrind, were classified under Customs Tariff Item (CTH) 3901 2000. The issue was whether the goods were permissible for importation into the country under the Foreign Trade Policy. The impugned order upheld the confiscation of imported goods, imposition of redemption fine for re-export, and imposing of penalty on the appellants by the original authority. The imported goods were tested by three laboratories: CRCL JNCH laboratory, CIPET Aurangabad, and Envirocare Labs Pvt. Limited. The CRCL JNCH laboratory's test report was based on visual examination and could not ascertain the nature of the constituent material, rendering it unreliable. The BIS standard IS 14534:1998 prescribes only post-consumer waste and in-house scrap for quality monitoring and identification of basic raw material. The imported product did not qualify as plastic waste/scrap under this standard. The impugned order upholding confiscation based on violation of DGFT's Public Notice requiring an import license was found improper and unjustified. Consequently, the CESTAT (Appellate Tribunal) set aside the impugned order dated 07.12.2022 passed by the Commissioner of Customs (Appeals), JNCH.
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• Customs Broker's License Revocation Overturned; Reduced Penalty for Mis-Declaration of Goods to Evade Duty.

  Case-Laws - AT : Customs broker's license suspension case involving violations of Regulations 10(d) and 10(e) of Customs Brokers Licensing Regulations (CBLR), 2018. Gross mis-declaration of quantity, description, and nature of goods with intent to evade applicable customs duty. Delay in issuing show cause notice and submission of inquiry report. Initiation of inquiry proceedings under Regulations 14, 17, and 18 for CBLR violations and levy of penalty. Violation of Regulation 10(d) upheld as broker failed to file bills of entry per correct documents, advise importers on proper declaration and duty payment, and inform customs authorities about doubts. Violation of Regulation 10(e) not sustainable as charges framed under separate CBLR proceedings requiring specific findings based on inquiry. Slight delay in issuing show cause notice and submitting inquiry report, but adjudication completed within prescribed time. Penalty of Rs.10,000/- imposed for failure to be proactive under Regulation 10(d). License revocation and security deposit forfeiture set aside due to lack of Regulation 10(e) violation. Appeal allowed in favor of appellants with reduced penalty.
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• Malaysian clear glass import wrongly taxed, penalty overturned for technical misclassification.

  Case-Laws - AT : The case pertains to the classification of imported Clear Float Glass (CFG) from Malaysia under the Customs Tariff Heading (CTH) 7005 1090 or 7005 2990, and its eligibility for exemption under Notification No. 46/2011-Cus. The appellant was alleged to have willfully misclassified CFG under CTH 7005 1090 to avail undue FTA benefit, resulting in short levy of customs duty. The Tribunal held that CFG is appropriately classifiable under CTH 7005 1090, making it eligible for exemption under the said Notification. The invocation of the extended period of limitation and imposition of penalties were found unsustainable as the appellant did not suppress or misdeclare any facts. The Tribunal set aside the Order-in-Original, allowing the appeal.
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• Customs Broker License Revocation Overturned Due to Lack of Evidence and Procedural Errors.

  Case-Laws - AT : Customs broker's license revocation order set aside due to lack of evidence for alleged violations. Key findings: no proof of misdeclaration or undervaluation to establish violation of due diligence under Regulation 10(e); KYC norms followed as per instructions, no violation of 10(n); inadvertent error in referring to 10(q) instead of 10(n) in order; authorized signatories approved by Customs authorities, no unauthorized handling under Regulations 13(3), 13(4), 13(7), 13(12). Procedural lapses: undue delay in inquiry completion beyond stipulated timeline; improper deemed suspension despite ongoing suspension; no legal provision for future deemed suspension. Order unsustainable due to lack of evidence for violations and procedural irregularities.
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• Areca nuts from Sri Lanka eligible for duty exemption under FTA.

  Case-Laws - AT : Eligibility for customs duty exemption under India-Sri Lanka Free Trade Agreement for imported areca nuts classified under CTH 0802 8090 - goods fulfill requirements of DGFT notification for import as 'free' - country of origin determined as Sri Lanka based on evidence - declared value complies with MIP notification - no violations u/ss 111(d) and 111(m) of Customs Act proved - goods eligible for duty exemption under Notification No. 26/2000-Customs - impugned order upholding demands set aside - appeal allowed.
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• Tribunal Rules Clear Float Glass Correctly Classified; Exemption Granted, No Extended Duty Period Due to No Misdeclaration.

  Case-Laws - AT : The appeal pertains to the classification of imported Clear Float Glass (CFG) under the appropriate Customs Tariff Heading (CTH). The key issues addressed are: (1) Whether CFG should be classified under CTH 70051090 as declared by the Appellant or under CTH 7005 2990 as reclassified by the Department; (2) Whether the extended period for demand of differential duties and penalties is invokable. The Tribunal held that CFG is appropriately classifiable under CTH 7005 1090, eligible for exemption under Notification No. 46/2011-Cus, following previous orders on identical issues. Regarding the extended period, the Tribunal ruled in favor of the Appellant, stating that after finalization of assessments for over 5 years, the Department cannot invoke the larger period of limitation, as the Appellant did not suppress or misdeclare any facts. Consequently, the order of confiscation, fines, and penalties was set aside, and the appeal was allowed.
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FEMA

• Court Upholds Seizure Orders; Valid "Reason to Believe" Confirmed, Investigation to Proceed Without Court Intervention.

  Case-Laws - HC : The High Court examined the seizure orders and found that the officer had analyzed the relevant material and formed a "reason to believe" before effecting seizures. The Competent Authority's order confirming the seizures was based on tangible material. At this stage, a Constitutional Court cannot interdict investigations or probe evidentiary value. The Court exercises judicial review to determine if objective and tangible material was available before seizure action. The writ Court is not an appellate authority and cannot evaluate disputed facts like the nature of transactions, connections with other entities, and alleged FEMA violations. The Single Judge rightly relegated the matter to the Adjudicating Authority, which will decide on the sanctity of seizure and validity of the Confirmation Order while adjudicating the complaint. The High Court found no reason to interfere with the Single Judge's observations.
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Indian Laws

• Court Orders Release of Export Subsidy for Milk Powder, Upholds Fairness and Non-Discrimination Principles.

  Case-Laws - HC : The petitioner sought release of an export subsidy of Rs. 8,08,50,000/-. The respondent confirmed that the milk powder exported by the petitioner, amounting to 1617 metric tonnes, was from stock existing on June 30, 2018, entitling the petitioner to receive the export subsidy under the government resolution dated July 31, 2018. The court observed that once a similarly placed party like Indapur received such subsidy, which is a state largesse, the principles of reasonableness and fairness emanating from Article 14 of the Constitution of India require the respondents to extend similar treatment to the petitioner, who was identically placed. Differential treatment would result in a breach of the petitioner's right to non-discrimination under Article 14. The subsidy scheme is a welfare scheme, fully implemented and acted upon in Indapur's case. The Supreme Court judgments relied upon by the respondents regarding negative equality are distinguishable as the court had directed the release of export subsidy to Indapur based on its legal entitlement, without any illegality involved. Consequently, the respondents were directed to release the export subsidy amount of Rs. 8,08,50,000/- to the petitioner within six weeks.
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• Counterfeiting Indian currency: Possession unexplained, conviction upheld with reduced sentences.

  Case-Laws - HC : Seizure of large quantity of counterfeit Indian currency notes, determining ingredients u/s 489B of IPC. Interpretation of 'possessing', 'traffic', and 'otherwise trafficking in' terms. Reliance on previous judgments regarding active transportation and burden of proof u/s 106 of Evidence Act when no explanation offered. Appellant found in possession of 71 fake Rs. 500 notes at public place, failed to explain manner of obtaining them. Conviction u/ss 489B and 489C upheld, sentences modified to 5 years RI and Rs. 10,000 fine for 489B, 3 years RI and Rs. 5,000 fine for 489C. Appeal partly allowed by reducing sentences without interfering with conviction order.
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IBC

• Appellate Tribunal Upholds RP's Authority in Section 95 Proceedings; Affirms Natural Justice Principles Apply.

  Case-Laws - AT : The Appellate Tribunal examined the objections raised by the Personal Guarantors regarding the violation of principles of natural justice and the locus standi of the Resolution Professional (RP) to file the application. The Tribunal held that while principles of natural justice are applicable in proceedings u/s 95, the Supreme Court has ruled that the Adjudicating Authority's role cannot be held applicable at the stage of Section 97(5), i.e., when the RP has been appointed. The Appellants failed to implead the RP in their appeal challenging the RP's appointment, and cannot now claim that the RP lacks locus standi. The RP cannot be precluded from submitting its report as per the Supreme Court's judgment, and the Adjudicating Authority must consider all objections raised by the Appellants during the Section 100 hearing. The Tribunal's previous order cannot be interpreted as excluding the applicability of the Supreme Court's judgment. The Adjudicating Authority may proceed with the Section 95 proceedings as per the law.
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• Tribunal: Arbitral award can't be enforced against IL&FS due to existing restraint orders.

  Case-Laws - AT : Tribunal clarified that its order dated 26.05.2022 did not modify or vary the earlier orders dated 15.10.2018 and 11.01.2019, except for directing sealed cover containing arbitral award to be opened. Despite award being communicated to respondents, they cannot enforce it due to the interim direction dated 15.10.2018, affirmed on 12.03.2020, prohibiting enforcement or execution of arbitral awards against IL&FS or its group companies. The application filed by respondent seeking restraint on enforcement or execution of arbitral award was allowed.
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• Insolvency moratorium halts bank's SARFAESI proceedings against property until lifted.

  Case-Laws - AT : Once symbolic possession of the property is taken over by the appellant under the SARFAESI Act, 2002, the moratorium u/s 96 of the Insolvency and Bankruptcy Code prevents the appellant from further proceedings against the property until the moratorium is lifted. The Appellate Tribunal upheld the order barring the appellant from proceeding further under SARFAESI Act regarding the subject property while the moratorium is in effect, dismissing the appeal. This aligns with the recent Delhi High Court judgment that a bank cannot proceed under SARFAESI Act due to the interim moratorium arising from pending insolvency proceedings against the personal guarantor.
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SEBI

• Individual Banned from Securities Market for 3 Years for Concealing Identity and Manipulative Trading Practices.

  Case-Laws - Board : The Noticee (Mr. Vijay Mallya) violated SEBI Act and PFUTP Regulations by concealing his identity and using the FII route to trade in securities of his group companies in India. He employed manipulative and deceptive tactics by layering transactions through overseas entities he controlled, despite being the beneficial owner. This was detrimental to investors and intended to deceive the market, violating Regulations 3(a), (b), (d) of PFUTP Regulations and Sections 12A(a), (c) of SEBI Act. Matterhorn Ventures' shareholding in Herbertsons, shown as FII, actually belonged to the promoter category as it was funded by Mallya, misrepresenting facts and violating Regulation 4(2)(f) of PFUTP Regulations. Mallya devised a scheme to trade indirectly in his group companies' shares through layered transactions and the FII route, masking his identity and defying regulatory norms - fraudulent, deceptive acts threatening market integrity. SEBI restrained Mallya from accessing the securities market, dealing in securities directly/indirectly, or associating with any listed/to-be-listed company for 3 years, and froze his existing securities holdings during this period.
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Service Tax

• Service Tax Demand Overturned: Consultancy Services Classified Correctly, No Penalties or Interest Due.

  Case-Laws - AT : Classification of service provided by company - Not Chartered Accountant Services or Market Research Agency's Services - Nature of services rendered includes consultancy, advice, assistance in mergers & acquisitions, due diligence, financial viability evaluation, classifiable under Management or Business Consultants Services. Services cannot be classified under Chartered Accountant Services as company is not engaged in practice of chartered accountancy or permitted by Institute of Chartered Accountants of India. Export of service - Services provided to PwC Overseas Network Firms, not directly to clients, qualify as export of services under Export of Services Rules, 2005 with consideration received in convertible foreign exchange. Time Limitation - Extended period of limitation not invocable as dispute involves interpretation of statutory provisions, no fraud or willful misstatement established. Interest and penalty - Not payable as demand of service tax itself unsustainable. Impugned order set aside, appeal allowed.
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• Clinical Study Services in India Ruled as Export, Exempt from Service Tax; Previous Order Overturned in Favor of Appellant.

  Case-Laws - AT : The appellant performed clinical study services in India on drugs supplied by their foreign client and delivered the clinical study report through email, courier, or website. The department argued that since the service was performed in India on goods supplied by the recipient, it did not qualify as export of service u/r 4 of the Place of Provision of Service Rules, 2012. However, relying on previous judgments in Sai Life Sciences Ltd. and Fertin Pharma Research & Development India Pvt. Ltd., it was held that conducting clinical trials on drugs supplied by a foreign service recipient and providing the technical report constitutes export of service u/r 3 of the Rules, 2012. Therefore, such services are not liable to service tax. The impugned order was set aside, and the appeal was allowed.
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• Vintage Car Museum Qualifies for Service Tax Exemption - Hotel Wins Appeal.

  Case-Laws - AT : Benefit of Exemption for vintage classic car collection displayed by the appellant hotel. The Department contested the exemption, arguing the display area cannot be called a 'museum'. The Tribunal held that terms undefined in statutes should be interpreted in their ordinary sense, not technical definitions from other statutes on unrelated subjects, as per Supreme Court precedent. The vintage car display area qualified as a 'museum' under the exemption notification. Therefore, the demand for service tax on entry fees to the vintage car museum was set aside, allowing the appeal.
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Central Excise

• Eligibility for CENVAT Credit Challenged; Extended Limitation Invoked, Fines Imposed for Job-Work Non-Compliance.

  Case-Laws - AT : Eligibility for input CENVAT credit utilization, invocation of extended period of limitation, and imposition of fines and penalties in a case involving job-worked goods. The appellant failed to comply with record-keeping requirements u/r 9(5) of the Central Excise Rules, making it ineligible for CENVAT credit on inputs used in job-worked goods. However, the appellant can avail credit subject to verification of duty-paid invoices/documents within six months. The extended period was rightly invoked due to non-disclosure of job-work activity and non-payment of excise duty/service tax. The executive director's claim of mistaken impression was rejected, and penalties were upheld for willful contravention. While penalties on other appellants were reduced, the main appeal was partly remanded and partly allowed by the CESTAT.
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• SEZ Goods Exempt from Special Additional and Additional Excise Duties: SEZ Act Prevails Over Finance Act Provisions.

  Case-Laws - AT : This case deals with the applicability of Special Additional Excise Duty (SAED) levied u/s 147 of the Finance Act, 2002, and Additional Duty of Excise (AED) levied as Road and Infrastructure Cess u/s 112 of the Finance Act, 2018, on goods manufactured and exported by a unit located in a Special Economic Zone (SEZ). The key points are: 1) SAED and AED are additional duties levied on excisable goods under the Central Excise Act, 1944. 2) Section 3 of the Central Excise Act excludes goods produced or manufactured in SEZs from excise duty. 3) Sections 147 and 112 of the Finance Acts mandate that SAED and AED shall be levied and collected as per the Central Excise Act provisions. 4) The Notifications attempting to levy SAED and AED on SEZ units are subordinate legislation and cannot override the primary legislation (Central Excise Act and Finance Acts). 5) The SEZ Act, 2005, has an overriding effect on any inconsistent provisions of other laws regarding SEZ units. 6) Since the SEZ Act exempts duties on goods manufactured in SEZs, it overrides the Finance Acts' provisions regarding SAED and AED on.
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VAT

• Court Clarifies "Disputed Tax" in Maharashtra Municipal Corporation Act; Excludes Interest and Penalties for Recalculation.

  Case-Laws - HC : The court interpreted provisions of the Maharashtra Municipal Corporation Act, 1949 and the Maharashtra Municipal Corporation (Local Body Tax) Rules, clarifying the scope of the phrase "disputed tax" in Section 406(8) of the Act. It held that the scheme of levy of Local Body Tax (LBT) distinguishes between tax, interest, and penalty. The Rules provide for liability to pay LBT, interest, and penalty separately. The legislature intended "disputed tax" to mean only the tax amount, not interest or penalty. The court distinguished a previous case on property tax penalties, as the present case related to LBT governed by different provisions. The impugned order was quashed, and the matter was remanded for fresh consideration by the appellate authority after giving a personal hearing to the petitioner.
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• Supreme Court: Corrugated and Non-Corrugated Iron Sheets Same for Tax; No Change in Commercial Nature.

  Case-Laws - HC : The issue pertained to the categorization of galvanized iron sheets under the Central Sales Tax (CST) Act and the Andhra Pradesh Value Added Tax (VAT) Act. The Supreme Court in State of Tamil Nadu v. Pyare Lal Malhotra held that a product created from another within the same sub-category cannot be treated as a different commercial product for tax purposes. Entry 70(vi) of the AP VAT Act includes sheets, hoops, strips, and skelp, whether black, galvanized, hot/cold rolled, plain or corrugated, under the same sub-entry. This implies that corrugating plain sheets into corrugated iron sheets does not change the product's category. The Calcutta High Court in Phanindra Nath Manna & Company v. Commercial Tax Officer concurred, stating that galvanized sheets include corrugated and plain sheets, and corrugation does not alter their character as iron sheets. Therefore, the Deputy Commissioner could not have refused deferment of hearing on this issue.
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Case Laws:

• GST

• 2024 (8) TMI 1388
  Provisional attachment of petitioner s Bank account - Invocation of jurisdiction of this Court under Article 226 of the Constitution of India - Seeking discretionary reliefs in relation to the attachment notice as issued under Section 83 of the CGST Act - HELD THAT:- In rejoinder, petitioner has stated that his permanent address is at Rajasthan and at the time of filing rejoinder he is at Mumbai whereas in paragraph 1 of the petition he has stated that he is carrying on business at the address mentioned in cause title which is at Dahisar, Mumbai. This contradiction coupled with what is stated by respondents in their reply on petitioner being non-genuine goes on to indicate that petitioner is playing fraud not only on the Revenue but also on this Court and, therefore, it is not required to exercise discretionary jurisdiction in the present matter. Petition dismissed.

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• 2024 (8) TMI 1387
  Appeal dismissed on the ground that they had been filed beyond limitation - Applicability of Section 29 (2) of the Limitation Act, 1963 in relation to the period of limitation - HELD THAT:- In the case of Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and Ors. [ 2007 (12) TMI 11 - SUPREME COURT] , the Hon ble Supreme Court considered the applicability of Section 29 (2) of the Limitation Act to the provisions of Section 35 of the Central Excise Act. Section 35 of the Central Excise Act provided for an appeal to be filed, before the Commissioner (Appeals), within 60 days from the date of communication, of the decision against which the appeal is being filed. The proviso to Section 35 permitted the Commissioner (Appeals), if he was satisfied that sufficient cause is made out, to permit filing of an appeal within a further period of 30 days beyond the statutory provisions of the Limitation Act. It was held that, the affected party cannot invoke Section 5 of the Limitation Act. Though Section 29 (2) requires an express exclusion to be found in the special or local law, the Hon ble Supreme Court, in Union of India v. Popular Construction Co. [ 2001 (10) TMI 1044 - SUPREME COURT] had held that where the language of the legislation, excluded the applicability of the provisions of the Limitation Act, by necessary implication, any benefit under the provisions of the Limitation Act cannot be claimed. In view of this ratio, it is not necessary that there should be an express exclusion of the provisions of section 4 to 24 of the limitation Act. Where a special or local law, by express statement excludes all or any of Sections 4 to 24 of the Limitation Act, they cannot be applied to any proceedings under such special or local law. Where such exclusion is to deduced, by way of necessary implication, each provision would have to be considered separately and exclusion of one provision would not result in exclusion of the other provisions of section 4 to 24 of the limitation Act. In the present case, Section 107, which provides for an appeal against orders passed under the APGST Act, stipulates that (A) an appeal, under Section 107 (1), by a dealer against any order of an adjudicating authority, can be filed within three months from the date on which the order is communicated; (B) an appeal, under Section 107 (2), by an authority under the Act, against any order of an adjudicating authority, can be filed within six months from the date on which the order of the Chief Commissioner directing the filing of such an appeal is received by the said authority. The Hon ble Supreme Court, while considering similar provisions, in Union of India v. Popular Construction Co and Singh Enterprises vs. Commissioner of Central Excise, Jamshedpur and Ors. [ 2007 (12) TMI 11 - SUPREME COURT] had held that the restriction of the additional period, for which delay may be condoned, in the special statute, effectively excluded Section 5 of the Limitation Act. Since the period of limitation available, under Section 107 of the APGST Act, cannot be extended beyond the period stipulated therein, Section 5 of the Limitation Act would stand excluded - The appellate authority under Section 107 of the APGST Act would not have any power to condone the delay in filing an appeal, under Section 107 of the APGST Act, beyond the period of 30 days set out in Section 107 (4) of the APGST Act. Petition dismissed.

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• 2024 (8) TMI 1386
  Refund of amount deposited under compulsion - provisional attachment of bank accounts - HELD THAT:- It is considered apposite to issue any directions for refund of the deposit in these proceedings. However, it is clarified that the petitioners would be entitled to apply for refund of the same in accordance with law without waiting for the adjudication of the show cause notice. Insofar as the petitioner s request for return of the articles and documents seized during the course of the proceedings are concerned, the respondent states that all hard disks and other articles have been returned except two laptops. He submits that two laptops have been stolen from the office of the GST Authorities and an FIR in this regard had been lodged. Petition disposed off.

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• 2024 (8) TMI 1385
  Seeking cancellation of bail granted in favour of the respondent, invoking Section 439(2) of Cr.P.C. - Whether the State has made out any grounds for cancellation of bail granted in favour of the respondent? - HELD THAT:- Admittedly, the respondent was apprehended, subjected to interrogation, later he was enlarged on bail subject to conditions. Initially, while filing the petition, it is not the contention of the petitioner that the respondent has violated any of the conditions imposed on him, but later additional grounds were pleaded to contend that there is violation of conditions. Simply because the respondent has not produced the documents that are called for by the Investigating Officer, it will not amount to violation of any of the conditions imposed while granting bail. If the petitioner is of the opinion that certain documents are withheld by the respondent deliberately or it is of the opinion that concocted documents are relied on by the respondent, it can still proceed further by making such grounds against the respondent to speed up the investigation and pass the assessment order. It is well settled proposition of law that denying bail to the accused is entirely different from cancellation of bail already granted by the Court as it amounts to withdrawing the liberty granted in favour of the accused which requires strong grounds. No such strong grounds are made out to seek cancellation of bail which is already granted. The Court has taken into consideration the facts of the case and has assigned valid reasons for enlarging the respondent on bail - there are no compelling reason for cancellation of bail granted in favour of the respondent - Criminal Petition is dismissed.

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• 2024 (8) TMI 1384
  Grant of bail - availment of ITC from the suspicious suppliers who have either self mismatch or very high mismatch in its inward supply from GSTR-2A and GSTR-3B to the said firm - HELD THAT:- The attention of the Court is also drawn to a relevant pronouncement made by Hon ble Apex Court in SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION ANR. [ 2022 (8) TMI 152 - SUPREME COURT] wherein dealing specifically with the economic offences, it has been held by the Hon ble Apex Court that The gravity of the offence, the object of the Special Act, and the attending circumstances are a few of the factors to be taken note of, along with the period of sentence. After all, an economic offence cannot be classified as such, as it may involve various activities and may differ from one case to another. Therefore, it is not advisable on the part of the court to categorise all the offences into one group and deny bail on that basis. Suffice it to state that law, as laid down in the following judgments, will govern the field. In SANJAY CHANDRA VERSUS CBI [ 2011 (11) TMI 537 - SUPREME COURT ], the Hon ble Apex Court noticed that it was a case of fraud wherein by cheating and dishonestly inducing delivery of property by using as genuine a forged document was involved but the punishment for the offence was imprisonment for a term which may extend to seven years. The Hon ble Apex Court held that it is, no doubt, true that the nature of the charge may be relevant but at the same time the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration. Keeping in view the fact that in the instant matter trial has not started even yet and the complicity of the accused applicant is yet to be determined in trial and everything relevant to the matter is under control of the department itself and there is probably nothing on record to demonstrate that the applicant, if enlarged on bail, would in any way adversely affect the trial; further no final verdict of any Court / Authority for any criminal liability to the credit of the applicant has been brought to the notice of this Court and noticing that the alleged offence is punishable with the maximum period of imprisonment of five years, the applicant is in jail since 1.5.2024, without commenting upon the merits of the case, it is opined that the applicant has made out a case for bail. Let the applicant be released on bail on furnishing a personal bond and two heavy sureties each in the like amount to the satisfaction of the court concerned subject to fulfilment of conditions imposed - bail application allowed.

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• 2024 (8) TMI 1383
  Release of provisionally attached bank accounts of petitioner - HELD THAT:- The Commissioner passed a speaking order dated 16.04.2024 setting out in detail, its reasons for not acceding to the petitioners prayer and justifying the impugned orders for freezing the bank accounts in question - the petitioners does not, at this stage, press any relief regarding the freezing of the bank accounts. Return of the laptops, CPUs, Mobile Phones and other documents, which were seized during the search and seizure operations - HELD THAT:- In terms of Section 67 (3) of CGST Act, all documents, books, or things seized under Section 67 (2) of CGST Act, are required to be returned to the person from whom the same are seized within the period not exceeding 30 days from the date of issuance of the notice - the Commissioner may retain the documents, records, laptops, CPUs, and Mobile Phones which were seized but only till the time, the same are required and in any event not later than 30 days after issuance of notice, as required under Section 67 (3) of the CGST Act, 2017 - the Commissioner is requested to examine this aspect and ensure that the data recorded on the devices is not withheld from the petitioners. Whether the petitioners are entitled to the refund of Rs. 22,00,000/- which, the petitioners claim, they were compelled to deposit during the course of the search and seizure raid? - HELD THAT:- It is seen that the counter-affidavit filed by the respondents is not on record. The respondents shall ensure that the same is placed on record before the next date of hearing. List for hearing on the aforesaid question on 20.08.2024, the date already fixed.

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• 2024 (8) TMI 1382
  Seeking an implementation of the order of the Appellate Authority by releasing the seized material - difference in the quantity mentioned in the delivery challan and in the actual quantity of gold - HELD THAT:- Though the learned Senior Government Pleader would contend that the goods in question in this case (namely the gold ornaments) are liable for confiscation, since it is settled that the goods can be released on the payment of fine in lieu of confiscation and considering the fact that the gold ornaments are stock-in-trade of the petitioner, these writ petitions are disposed off without going into the merits of the contentions raised by either side and directing that the entire quantity of 1647.970 grams of gold which has been seized from the petitioner shall be released on the aforesaid Diljith K K and the aforesaid Mohandas K K executing bonds in the manner and form required by the 2nd respondent. The aforesaid Diljith K K and the aforesaid Mohandas K K will undertake that they will not alienate the property covered by Exts. P9 and P10 documents till the culmination of proceedings. The petitioner as also the State will thereafter be entitled to approach the Appellate Tribunal (yet to be constituted) if they are in any manner aggrieved by the proceedings of the Appellate Authority. Petition disposed off.

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• 2024 (8) TMI 1381
  Seeking declaration that the blocking of ITC in question is bad in law - lack of jurisdiction to pass the order - orders impugned also have been passed without complying the principles of natural justice - HELD THAT:- The orders impugned relates to State GST and the same having been passed by the Deputy Commissioner of the State Taxes, the contention raised that he has no jurisdiction to pass the order, cannot be a justifiable ground in view of Rule 86 A (1) of the OGST Rules, 2017. It is made clear that the Commissioner or an officer authorized by him in this behalf, not below the rank of an Assistant Commissioner, can pass the order and in the instant case, the impugned orders having been passed by the Deputy Commissioner, who is higher in rank to Assistant Commissioner, it is well within his jurisdiction to pass such orders. So far as the contention raised with regard to the Circular issued by Government of India dated 02.11.2021 under Annexure-2 is concerned, that ipso facto can only applicable to the Central GST and not to the State GST unless the said circular is adopted by the State Government by making a declaration. Nothing has been placed on record to show that the said circular has been adopted by the State Government for State GST. The claim made by the petitioner that the orders impugned under Annexures-1 and 5 have been passed by an officer having no jurisdiction, cannot be sustained in the eye of law - Petition disposed off.

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• 2024 (8) TMI 1380
  Time limitation - appeal filed beyond time limitation - Cancellation of registration of petitioner - HELD THAT:- The petitioner filed an appeal on 22.12.2023, after expiry of the limitation period - Further, the Government had come out with an Amnesty Scheme by Circular No. 3 of 2023 by which the registered dealers, whose registrations were cancelled, were permitted to restore their registration, on payment of all dues, between 31.03.2023 to 31.08.2023. The petitioner did not avail of such remedy also. The petitioner being not a registered dealer, there was no monitoring of his activities by the Department in the intervening period. There is no way to ascertain as to whether there was any transaction carried out during the said period. It is also a fact that the petitioner has filed a delayed appeal and also not availed the remedy of Amnesty Scheme which was made applicable. The petitioner also does not in the memorandum of writ petition controvert the allegation in the show cause notice that he failed to furnish returns for a continuous period of six months. The law favours the diligent and not the indolent. The delay stands against the petitioner. Petition dismissed.

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• 2024 (8) TMI 1379
  Blocking of Input Tax Credit - Rule 86A of the GST Rules - jurisdictional error with regard to the issuance of the intimation more so when the reasons that weighed with the Department to issue the intimation notice were mentioned in Ext.P6 and P7 show cause notices that were issued shortly thereafter - HELD THAT:- It is found from a perusal of Exts.P6 and P7 notices that were subsequently issued to the appellant that the Department was of the view that input credit was being availed on the basis of bogus invoices and it was this suspicion, based on materials gathered by the Department, that prompted the Department to issue Ext.P2 intimation so as to prevent the irregular availment of input tax credit by the appellant. While the appellant may have had a case to approach the writ court if there was any inordinate delay occasioned by the respondents in issuing the show cause notices, we find that the appellant had chosen not to approach this Court during the period between the receipt of intimation and the receipt of Ext.P6 and P7 show cause notices. The learned Single Judge was correct in relegating the appellant to his alternate remedy of replying to the show cause notices and getting the matter adjudicated by the adjudicating authority under the statute. As rightly observed by the learned Single Judge, this is not a case that warrants a belated interference with Ext.P2 intimation, by this Court under Article 226 of the Constitution of India. Appeal dismissed.

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• 2024 (8) TMI 1378
  Violation of principles of natural justice - petitioner did not have a reasonable opportunity to contest the tax demand on merits - wrongful availment of Input Tax Credit (ITC) - HELD THAT:- On examining the impugned order, it appears that the tax proposal was confirmed largely on the ground that there was no proof of actual movement of goods. By taking into account the nature of documents submitted by the petitioner, which include the bank statement showing payments made to the supplier, the GSTR 2A indicating the availability of ITC, it is just and appropriate that the petitioner be provided an opportunity to produce relevant documents to prove actual movement of goods. As a condition for remand, however, it is also necessary to put the petitioner on terms. The matter is remanded for reconsideration on condition that the petitioner remits 20% of the disputed tax demand as agreed to within a period of two weeks from the date of receipt of a copy of this order - impugned order is set aside - petition disposed off by way of remand.

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• 2024 (8) TMI 1377
  Additional tax liability for execution of subsisting Government contracts either awarded in the pre-GST regime or in the post GST regime without updating the Schedule of Rates (SOR) incorporating the applicable GST while preparing Bill of Quantities (BOQ) for inviting the bids - HELD THAT:- List this matter for final hearing in the monthly list of July, 2024.

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• 2024 (8) TMI 1376
  Rate of tax - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced before 01.01.2022 - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed invoiced after 01.01.2022 but which is allotted before 01.01.2022 - work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced after 01.01.2022 - service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided before 01.01.2022 - service receiver within the meaning of Sec. 2 (93) of CGST/MGST Act in respect of amounts received as grants by MJP which are paid to the applicant on services provided after 01.01.2022 - appointment of MJP as an agency to implement water supply schemes amounts to delegation of sovereign function enumerated in Sch. XI XII within the framework of Constitution of India so as to hold that MJP has performed the function entrusted under Article 243G 243W of the Constitution of India. What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran ( MJP ) as a part of Jal Jeevan Mission which is a mission of Government of India allotted, performed invoiced before 01.01.2022? - HELD THAT:- Nil, being exempted under Entry at Sr No. 3 of the Notification No. 12/2017-Central tax (Rate)- dated 28th June 2017. What is the rate of tax in respect of work allotted by Maharashtra Jeevan Pradhikaran (MJP) as a part of Jal Jeevan Mission which is a mission of Government of India which is performed invoiced after 01.01.2022 but which is allotted before 01.01.2022? - HELD THAT:- The services supplied by the applicant are in nature of Technical Consultancy for Project Development and Management support services, and hence classifiable under SAC code-998399- Other professional, technical and business services n.e.c., under the head Business and Production Services covered at Sr No 21 (ii) in the Notification No 11/2017-Central Tax (Rate)-dated 28th June 2017 and are taxable at rate of 18% (9% CGST SGST each), wherever exemption is not applicable. Whether Services provided to MJP for the Constitutional function of State Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies are in fact made to the Central State Government? - HELD THAT:- The argument of the applicant that services provided to MJP for the Constitutional function of State Central Governments, for which these Governments are liable to pay the consideration of contract, and as payment is made through PFMS, supplies are in fact made to the Central State Government. Hence, even after deletion of the word Government Authorities with effect from 01-01-2022, from the notification entry number 3, the services provided by the applicant shall be eligible for benefit of exemption services provided by it to MJP, is not based on evidence, far-fetched and based on conjectures and surmises and very specious argument and hence rejected. Whether the MJP is Governmental Authority as required in entry number 3 defined in definition 2 (zf) of the exemption notification? - HELD THAT:- Supply of services where Time of supply is on or before 31-12-2021. After Considering all the aforesaid facts, provisions of Law, issues and decision therein, we have no hesitation in holding the Technical Consultancy for Project Development and Management support services , provided by the applicant to the MJP for its Water supply schemes where time of supply is on or before 31-122021. are covered by the exemption entry at Sr No. 3 of the exemption notification No 12/2017-Central Tax (Rate), dated 28th June 2017. The extent of agency is limited to carrying out the means or a mode of doing an act not to decide the very act itself. Actions of MJP in fixing the technical qualifications necessary for being eligible in the tender process, to enter into an agreement with applicant confirming his empanelment eligibility, to enter into contractual negotiations for fixing consideration are much too broad decisive to be narrowly circumscribed by the trappings of an agency - It is trite law that the words of a notification have to be strictly construed any ambiguity has to be construed in favour of the revenue. Since, the words government authority or entity have been removed, tax is undisputedly attracted. There are no hesitation in holding the Technical Consultancy for Project Development and Management support services , provided by the applicant to the MJP for its Water supply schemes where time of supply is on or after 01-01-2022, are not covered by the entry at Sr No. 3 of the Notification No 12/2017-Central Tax (Rate), dated 28th June 2017. As the words or a Government Authority or a Government Entity , are omitted from the aforesaid Entry at Sr, No, 3.

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• 2024 (8) TMI 1375
  Whether the services of leasing of an industrial plot of land at Taratala Road for a period of thirty years (30 years) for setting up commercial office complex against upfront lease premium provided by SMPK to the applicant is exempted from payment of tax or not in terms of entry number 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017? - HELD THAT:- The services provided by SMPK by way of grant of long term lease of land at Taratala Road for a period of thirty years (30 years) for setting up commercial office complex to the applicant, as involved in the instant case, doesn t satisfy all the conditions specified in entry number 41 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. Services by way of grant of long term lease of land by SMPK to the applicant for the purpose of setting up commercial office complex as involved in the instant case is found not to be covered under entry 41 of Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017 and therefore cannot be treated as an exempt supply.

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• 2024 (8) TMI 1374
  Applicability of Serial No 77 of the N/N. 12/2017 - such members of RWA (unincorporated body) whose share of contribution is less than Rs. 7,500 per month and whereas the monthly maintenance (share of contribution) of other members of the same RWA are more than Rs. 7,500/- - chargeability of GST - HELD THAT:- The benefit of exemption as allowed vide serial no 77 of the N/N. 12/2017 Central Tax (Rate) dated 28.06.2017, as amended, is entirely member specific meaning thereby if a RWA collects up to an amount of Rs. 7500/- per month from a member by way of reimbursement of charges or share of contribution, the RWA shall not be liable to pay tax on such amount irrespective of the fact that there may be other members (even from the same person if he owns another flat in the same housing society or residential complex) in respect of whom such quantum exceeds Rs. 7500/- per month. To illustrate, if a RWA who is registered under the GST Act, collects Rs. 7000/- per month as maintenance charges from one of its member and Rs.9000/- from another member in the same residential complex, the RWA shall not be liable to pay tax on Rs. 7000/-. The applicant shall not be liable to pay tax on the amount which is collected from its members by way of reimbursement of charges or share of contribution where such amount does not exceed Rs. 7500/- per month per member.

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• 2024 (8) TMI 1373
  Classification of supply - supply of services or not - pure services - applicant provides services to the Central Government, State Government or Union Territory or local authority or a Governmental authority or not - services in relation to any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India. Whether such pure services being provided by the applicant satisfies the condition as specified in serial number 3 of the exemption notification supra in respect of the status of the recipient? - HELD THAT:- Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is a development mission launched by Central Government with the focus to establish infrastructure that could ensure adequate robust sewage networks and water supply for urban transformation by implementing urban revival. In the state of West Bengal, activities under AMRUT project are supervised by Department of Urban Development and Municipal Affairs, Government of West Bengal. The applicant s supply under this project therefore qualifies as a supply to the State Government. Whether the said services are in relation to any functions entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution of India? - HELD THAT:- The functions entrusted to a Panchayat or to a Municipality as listed in the Eleventh and/or Twelfth Schedule includes the functions like drinking water or water supply for domestic, industrial and commercial purposes. The services provided by the applicant for survey, design, drawing, estimate and preparation of comprehensive plan related to water supply schemes application is found to be a matter as listed in the Eleventh and/or Twelfth Schedule in relation to functions entrusted to a Panchayat under article 243G and/or to a municipality under article 243W of the Constitution of India.

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• Income Tax

• 2024 (8) TMI 1372
  Maintainability of appeal in HC - Unexplained cash credits u/s 68 - unexplained unsecured loans - Onus to prove - substantial question of law OR fact - addition made as assessee has failed to establish identity, creditworthiness of the lender companies as well as genuineness of the transactions - ITAT setting aside the order of the ld.CIT(A) which upheld the addition - HELD THAT:- As in the instant case no substantial question of law arises from the order of the Tribunal as the appellant has raised all the questions of facts and have disputed the fact findings of the ITAT in the garb of substantial questions of law which is not permitted by the statute itself. This Court refrains from entertaining this appeal as there is no perversity in the order passed by the ITAT since the ITAT has dealt with all the grounds raised by the appellant in the order impugned and has passed a well reasoned and speaking order taking into consideration all the material available on record. Tribunal being a final fact finding authority, in the absence of demonstrated perversity in its finding, interference with the concurrent findings of the CIT (A) as well as the ITAT therewith by this Court is not warranted. We have no hesitation in holding that no question of law, much less any substantial question of law arises from the order of the Tribunal requiring consideration of this court. Appeal dismissed.

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• 2024 (8) TMI 1371
  Disallowance u/s14A - liable to be restricted to the extent of exempt income earned during the year or not? - ITAT held that disallowance u/s 14A would be liable to be restricted to the extent of exempt income earned during the year - HELD THAT:- As would be evident from the aforesaid conclusions rendered in Maxopp [ 2011 (11) TMI 267 - DELHI HIGH COURT] it was found that Section 14A is clearly concerned with an identification and attribution of expenditure with reference to exempt income which otherwise would not form part of total income. It was thus explained that where the income of an assesse has both taxable and non-taxable elements, it would be the principle of apportionment of expenditure relating to non-taxable income which would have to be identified. The view expressed by this High Court was ultimately affirmed. Fundamental principle being of ensuring that expenditure incurred in the course of earning exempt income is not set off against income which is otherwise taxable. It is this basic tenet which constrains one to bifurcate and apportion the expenditure which may be claimed by an assessee. Right from Walfort, all judgments rendered in the context of Section 14A and noticed hereinabove, have consistently spoken of apportionment of expenditure and the imperatives of an enquiry to identify whether the expenditure which is claimed is not in relation to exempt income. The expenditure which can be legitimately claimed by an assessee as deductible can only be that which has been expended to earn taxable income. The assessee is not permitted to avail of a dual benefit of firstly claiming the income as being exempt and thereafter seeking to set off the expenditure incurred in connection therewith against income which is taxable. This if countenanced would clearly lead to the taxable income and which is exigible to the levy of tax under the Act being further reduced. As we read Section 14A, it becomes apparent expenditure is liable to be excluded from consideration only if the assessee is found to have earned exempt income and the expenditure pertains to that income. Absent any income which is exempt or claimed as such in the relevant year, the statutory exclusion would not apply. The existence of exempt income is thus a sin qua non for the invocation of Section 14A. It is pertinent to note that the Act is not concerned with notional or illusory income. Thus, unless there be non-taxable income which arises or accrues, the expenditure would not suffer disqualification under Section 14A. We are conscious of the Explanation which has come to be inserted in Section 14A and which now seeks to assert that the provision would apply irrespective of whether exempt income had arisen, accrued or had been received in the previous year. However, the extent to which the said statutory amendment would apply to the assessment years in questions is an issue which we propose to dwell upon in the subsequent parts of this decision. Our view on the imperatives of apportionment and the identification of expenditure with reference to exempt income is further fortified not only from a plain reading of Section 14A (2) which alludes to income which does not form part of total income, but also Rule 8D and which is the machinery provision for determination of the amount of expenditure incurred in relation to exempt income. Expenditure is indelibly linked to income which does not form part of total income and the expenditure being directly relatable to such income. Scope of Explanation appended to Section 14A - High Court in Era Infrastructure [ 2022 (7) TMI 1093 - DELHI HIGH COURT] had clearly held that the mere usage of the expressions for the removal of doubts , clarified or titling a provision as an explanation would not be determinative of whether it is to apply retrospectively. It was thus held that where it be found that the amendment fundamentally alters the statutory position which prevailed, it clearly ceases to be explanatory or one which is aimed at removing an ambiguity. However, any debate that could have possibly ensued in the aforesaid context stands laid to rest by virtue of the Memorandum explaining the provisions of the Finance Bill, 2022 and which unequivocally declares that This amendment will take effect from 1st April, 2022 and will accordingly apply in relation to the assessment year 2022-23 and subsequent assessment years . We thus find ourselves unable to discern any justifiable reason to take a view contrary to what was expressed in Era Infrastructure. Accordingly, and for all the aforesaid reasons, we uphold the view taken by the Tribunal and dismiss the instant appeals.

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• 2024 (8) TMI 1370
  Reassessment proceedings against dead person - HELD THAT:- We note the pertinent observations in the case of Savita Kapila [ 2020 (7) TMI 441 - DELHI HIGH COURT] wherein, while dealing with the identical question, it has been held that the pre-requisite of issuing a notice in the name of the correct person and not in the name of a dead person is sine qua non for acquiring the jurisdiction and initiating the action u/s 148 of the Act. Thus, the action u/s 148 cannot be initiated on the factum as the impugned notices were issued to a dead person. Furthermore, present is a case where the petitioner had already intimated the Revenue about the death of the assessee and yet it proceeded to reopen the assessment under Section 148 of the Act. The course as adopted is clearly reflective of complete non-application of mind. Assessee appeal allowed.

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• 2024 (8) TMI 1369
  Validity of reopening of assessment - Reason to believe - no Capital Gains was offered for assessment on sale of land - whether the impugned notice and proceedings consequent thereto are liable to be interfered with? - HELD THAT:- In effect, both in Jet Airways [ 2010 (4) TMI 431 - BOMBAY HIGH COURT] and TAFE [ 2018 (12) TMI 1217 - MADRAS HIGH COURT] , the Court held that Section 147 enables the assessing officer to travel beyond the reasons for initiating reassessment proceedings provided such reassessment is also carried out on the grounds or reasons on which reassessment was initiated. On the other hand, if the ground on which reassessment was initiated was no longer available to the assessing officer, the Court held that reassessment cannot be continued on the basis of the original notice under Section 148, and that a fresh notice is necessary. Counsel as submitted that the interpretation placed on Section 147 in Maninder Singh Kang [ 2012 (6) TMI 616 - PUNJAB AND HARYANA HIGH COURT] and Govindaraju [ 2015 (8) TMI 271 - KARNATAKA HIGH COURT] should be adopted. In view of the binding decision of the Division Bench of this Court in TAFE , the course of action canvassed by learned senior standing counsel is not open and his contention cannot be countenanced. Keeping the above legal position in mind, it becomes necessary to examine the assessment order to determine the basis of such order. In paragraph 15 of the assessment order, the assessing officer recorded findings with regard to the transaction that triggered reassessment proceedings. The reason cited for reopening the assessment for assessment year 2013- 14 was the deletion under the head land without offering capital gains for assessment. As discussed earlier, the assessment order clearly discloses that no additions were being made on this account since there was no capital gain. The conclusion that follows from the above discussion is that no additions were made in the assessment order as regards the deletion of the relevant immovable asset although the said transaction formed the basis for reopening assessment - the notice u/s 148 and, therefore, the assessment order issued cannot be sustained. Since reassessment cannot be sustained on this ground, the other contentions regarding the invalidity of the notice under Section 148 are not being examined. Decided in favour of assessee.

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• 2024 (8) TMI 1368
  Validity of assessment order without considering objections raised - HELD THAT:- The objections filed in Form 35A before the DRP are on record. The date stamp of the DRP on the cover letter evidences receipt of the objections on 27.10.2023. Therefore, the DRP undoubtedly received the objections before the expiry of the time limit for filing objections. As regards the obligation to submit a copy of such objections to the AO, an e-mail of 30.10.2023 is on record. In the said e-mail, the petitioner asserts that objections were filed before the DRP and that a copy of such objections could not be placed before the AO through the e-filing facility because such facility was not available. The objections were also attached to the e-mail. It appears that the AO has proceeded to issue the assessment order on account of being unaware that objections were submitted before the DRP. Consequently, the petitioner s total income has been determined in a sum of Rs. 97,50,98,539/- against the income of Rs. 54,36,39,810/- as per the petitioner s return. The conclusion that follows is that the petitioner is put to considerable prejudice without its objections being considered by the DRP. On this limited ground, the impugned assessment order dated 24.11.2023 is quashed. AO is directed to await the decision of the dispute resolution panel before issuing a fresh assessment order.

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• 2024 (8) TMI 1367
  Validity of final assessment order passed u/s 144 r.w.s. 144C(3)/144B along with the notice of demand issued u/s 156 and notice of penalty u/s 274 r.w.s. 270A - as argued petitioner had filed detailed objections before DRP and since the matter is sub-judice before the DRP, National e-Assessment Assessment Centre/AO had no jurisdiction to pass the impugned final assessment order without waiting for the directions from the DRP. HELD THAT:- Recently, this Court has decided a similar controversy in Pepsico India Holdings Private Limited [ 2023 (12) TMI 226 - DELHI HIGH COURT] once the objections have been filed by the assessee against a draft assessment order within the time limit prescribed u/s 144C(2)(b), the rest of the procedure should be followed as prescribed and the final assessment order ought to be passed by the AO in accordance with the directions issued by the DRP. This Court is further of the view that no prejudice will be caused to the Respondent-Department if the present petition is allowed and the impugned assessment order is set aside as Respondent-Department would be well within its rights to pass a fresh assessment order post the receipt of direction from the Respondent No. 3-DRP

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• 2024 (8) TMI 1366
  Illegal exercise of jurisdiction u/s 147 instead of Section 153C - as submitted that due to non-obstante clause in Section 153A coupled that the principle of abatement the mechanism contained in the provisions of search assessments, the assessment can be concluded in case of incriminating material relied u/s 153C only - HELD THAT:- Judgment which the DR has relied has been considered in the case of Nishit Gupta son of Shri Ramesh Gupta Vs. ACIT [ 2024 (4) TMI 196 - RAJASTHAN HIGH COURT] Hon ble Rajasthan High Court has considered the issue involved in the bunch of writ petitions about the applicability of Section 153C and Section 148 of the Act in the case of seizure of material in search or requisition of books/documents relating to Assessee other than on whom the search was conducted or requisition made and after taking into consideration the history of special provisions in search cases and various judicial pronouncements including Judgment of Abhisar Buildwell P. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] as held the argument that Section 153C can be invoked in case there is incriminating material for all the relevant preceding years and otherwise Section 148 is to be resorted to, is misplaced. On satisfaction of the twin condition for proceedings under Section 153C, the AO has to proceed in accordance with Section 153A. Notice is to be issued for filing of the returns for relevant preceding years and thereupon proceed to assessee or re-assessee the total income . It is not obligatory on the AO to make assessment for all the years, the earlier orders passed may be accepted. But once there is incriminating material seized or requisitioned belonging or relatable to the person other than on whom search was conducted, Section 153C is to be resorted to. The findings of this Bench in the case of M/s Mah Impex Pvt. Ltd [ 2024 (1) TMI 411 - ITAT DELHI] which also involved the case of search conducted in Surendra Kumar Jain Group squarely applies to the case of the assessee before us. Assessee appeal allowed.

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• 2024 (8) TMI 1365
  Nature of expenses - Disallowance of Product Development expenses written off - due to technological obsolescence, the said project is not likely to result in any economic benefits to the assessee and the capital work-in-progress of this project was written off and ultimately the project was abandoned - HELD THAT:- AO presumed that the Software Development Project was completed, whereas the software project ProHR was not completed and not even put for initial trial with any customers then only the product can be sellable in the open market. Since the software project Pro HR was abandoned, there was no enduring benefit to the assessee, as there is no existence of a new software. Therefore the expenses are to be allowed as Revenue in nature and the addition made by the lower authorities are liable to be deleted. Appeal filed by the Assessee is allowed.

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• 2024 (8) TMI 1364
  Rejection of registration u/s 80G(5)/12AA of existing trust - instead of applying under clause (i) of the proviso to section 80G, it applied u/clause (iii) as a new trust - assessee did not file the form no- 10AB within the stipulated time limit - requirement for seeking any provisional approval HELD THAT:- As the assessee was an existing trust and had been granted approval u/s 12AA of the Act as well as under section 80G of the Act earlier but instead of applying under clause (i) of the proviso to section 80G, it applied under clause (iii) as a new trust. If it had applied under clause (i), there was no need of issuing any provisional certificate and as per the second proviso to section 80G, the Principal Commissioner or Commissioner would have passed an order in writing granting it approval for a period of five years and there was no requirement for seeking any provisional approval which is required only for a new trust. The whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iv) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AC whereas the same should have been mentioned as clause (i) of the first proviso to sub-section (5) of section 80G and AR also admitted this fact in the course of the hearing. Since, Form No. 10AC was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application on Form No. 10AC is deemed to be filed under clause (i) of the first proviso to sub-section (5) of section 80G. The order of the Ld. CIT(Exemption) is hereby set aside and he is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) of the Act and consider the same for grant of approval. Appeal of the assessee is allowed for statistical purposes.

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• 2024 (8) TMI 1363
  Reopening of assessment - valid sanction accorded u/s 151 or not? - HELD THAT:- As the assessment was reopened beyond three years, sanction is required from Pr. CCIT whereas in the case of assessee, sanction has been obtained from Pr. CIT. this issue has been considered in the case of Siemens Financial Services (P.) Ltd. [ 2023 (9) TMI 552 - BOMBAY HIGH COURT] as held that as the notice under section 148 of the Act is issued on 31 July 2022 and, hence, is issued beyond period of three years from the end of the relevant assessment year and, accordingly, the approval of the specified authority under section 151(ii) of the Act should be taken. Time limit for reopening under the new regime - HELD THAT:- As on perusal of the reasons recorded for re-opening the assessment, the escapement of income is only Rs. 9,00,000/- and for which alleged escapement is less than Rs. 50,00,000/-, notice issued u/s 148 of the Act is barred by limitation considering Section 149(1)(b) of the Act. This issue has been duly considered in the case of Ganesh Dass Khanna [ 2023 (11) TMI 763 - DELHI HIGH COURT] as decided that new regime for reopening assessments was enacted is that where escapement of income was below Rs. 50 lakhs, the normal period of limitation, i.e., three (03) years was to apply. In comparison, the extended period of ten (10) years would apply in serious tax evasion cases where there was evidence of concealment of income of Rs. 50 lakhs or more in the given period. Thus we are of the considered view that the impugned notice issued u/s 148 of the Act is without jurisdiction and hence set aside making the resultant re-assessment order null and void - Decided in favour of assessee.

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• 2024 (8) TMI 1362
  Unexplained cash credit u/s 68 - AO has established that the assessee had used Gold purchaser as conduct of unaccounted money bring into Bank account as He/Gold purchaser never deal with trading in gold in his life time before demonetization - CIT(A) deleted addition - HELD THAT:- Apart from the first two payments which were made on the same date as the said transaction, the third payment was received by the assessee in advance. In the present case, the Revenue has only raised doubts about the sales bills and did not dispute the aforesaid receipt of money through the banking channel. Even though stock statements were also furnished by the assessee, in response to notice issued u/s 131 there is no dispute or doubt on the same by the Revenue. Such being the facts, when the sale transaction has been declared as revenue receipt by the assessee, we find no infirmity in the impugned order in deleting the addition made u/s 68. Addition on account of cash deposit - In the present case, it is undisputed that the assessee has submitted a copy of the sales register, purchase register, stock statement, cash book, bank book and bank statements. There is no material available on record to show that the AO has pointed out any mistake in the availability of stock as of 08/11/2016. Just because only on the one-day out of 365 days in a year, the assessee has shown cash sales AO proceeded to make the addition u/s 68, without appreciating the fact that on the date, i.e. 08/11/2016, the Government had announced demonetisation of old notes and it was an exceptional day and various people anxiously converted the old currency notes into other form and some purchased gold or other jewellery. In the absence of any material to doubt the availability of stock of gold with the assessee, we are of the considered view that the learned CIT(A) has rightly deleted the addition made by the AO on account of cash deposits. Revenue s appeal is dismissed.

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• 2024 (8) TMI 1361
  Cash deposit during demonetization period as taxed u/s 69A r.w.s. 115BBE - source of cash deposit is treated to be out unaccounted sales made by the assessee. HELD THAT:- Admittedly, assessee has been making sales in cash from his small retail outlet for lades lower garments that the price of such garment is less than Rs. 2,000/- per piece. Thus, it would be better to apply net profit rate of 8% on these unaccounted sales of Rs. 32,00,000/- which works out to Rs. 2,56,000/-. Thus, the addition is restricted to Rs. 2,56,000/- as against addition of Rs. 32,00,000/- made by the AO. The reason for adopting the net profit rate of cash deposit is that assessee does not have any source of income nor has made any investment and is only involved in petty retail business. Thus, it cannot be held that assessee had some other unexplained cash from some other sources. Accordingly, the addition is sustained on the basis of application of net profit of 8% on cash deposits as the same is treated as income from business and profession and not to be taxed u/s. 69A r.w.s. 115BBE. Accordingly, the appeal of the assessee is partly allowed.

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• 2024 (8) TMI 1360
  Unexplained cash - addition u/s 69A in respect of the cash found during the search - Assessee produced cash book to explain cash - DR submitted that the cash book produced by the assessee is an afterthought and maintaining of cash book is not mandatory for the individual, therefore, the assessee cannot rely on such document - as argued Assessee s name along with Subhash Chand Aggarwal and other family member s name written but the addition has been made only in the name of the assessee. HELD THAT:- CIT(A) has disbelieved the cash book only on the ground that generally individuals do not maintain cash book and it is not mandatory to maintain cash book for the individual . CIT(A) without any basis observed that the cash book was created to explain the unaccounted cash found and seized during the course of the search. CIT(A) treated that the amount as explained on the estimated basis and confirmed the rest of the addition - In our considered opinion, the findings given by the CIT(A) on the cash book is baseless and perverse. Assessee having been produced the cash book and explained the cash found during the search and seizure operation contending that the cash found during the search are belongs to family members and considering the fact that even the Panchnama drawn during the search proceedings containing the names of the Assessee and other family members and the A.O. who has examined the cash book has not found fault on the same on the merit of it, in our considered opinion, the authorities have committed error in making/sustaining the addition. - Assessee appeal allowed.

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• 2024 (8) TMI 1359
  Denial of benefit of section 11 12 - assessee failed to file the return of income and form no. 10B before the due date of filling the return of income - HELD THAT:- This issue is decided in the case of Sarvodaya Charitable Trust [ 2021 (1) TMI 214 - GUJARAT HIGH COURT] where assessee, a public charitable trust registered u/s 12A, had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form No.10B especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. The similar issue is also dealt in the case of ITO(E) Vs. Shri Laxmanarayan Dev Shrishan Seva Khendra [ 2023 (7) TMI 293 - ITAT AHMEDABAD] and Sh. Rajkot Vishashrimali Jain Samaj [ 2023 (3) TMI 765 - ITAT RAJKOT] . On being consistent view in the matter we direct the ld. Jurisdiction Assessing Officer (JAO) to consider the Form no. 10B and allow the claim of exemption u/s. 11 of the Act to the assessee. The bench in fact noted that the assessee filed the form no. 10 B within the extended due date and thus the denial of section 11 benefit was on account incorrect appreciation of the fact. Thus, based on this observation ground raised by the assessee is allowed.

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• 2024 (8) TMI 1358
  Accrual of income in India - Existence of PE in India - case of assessee is that Adobe Systems Software Ireland Limited is a company incorporated under the laws of Ireland and is a tax resident of Ireland in accordance with the DTAA or tax treaty between India and Ireland - HELD THAT:- Issue of existence of PE is fully and squarely covered by the order of the Co-ordinate Bench where vide a common order [ 2022 (7) TMI 1365 - ITAT DELHI] , the coordinate Bench has deleted the additions made by the Ld. AO. It has been held that no addition had been proposed by the Ld. Transfer Pricing Officer in the case of Adobe India with respect to marketing support services. In such circumstances, further attribution of profits to the alleged PE i.e. Adobe India will be contrary to the settled position of law as laid down by the Hon ble Apex Court in the case of Morgan Stanley [ 2007 (7) TMI 201 - SUPREME COURT] and E-Funds [ 2017 (10) TMI 1011 - SUPREME COURT] On the issue of existence of a PE, it was held that the finding itself of existence of a PE is without any cogent reasons. Tribunal has rejected the reasons and conclusions on which the findings of the AO and Hon ble DRP were premised. Accordingly, the additions made by the Ld. AO in the impugned case deserve to be deleted on the merit for the year under consideration. Thus, the grounds raised are allowed and appeal of asseessee is allowed.

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• Customs

• 2024 (8) TMI 1357
  Violation of the principles of natural justice - contravention of provisions of Section 28AAA of the Customs Act, 1962 - Adjudicating Authority did not consider any of the submissions of petitioner or deal with any submissions made by petitioner during the personal hearing but passed a non speaking order simply saying that recovery has been made from petitioner and, therefore, nothing further has to be done - HELD THAT:- One thing is certain that petitioner has nowhere admitted its liability and petitioner had paid the amounts only in view of the tremendous pressure that was on petitioner to fulfill its export order and because an alert was put against IEC in system. It is also clear that no investigation has been conducted and SIIB(X), JNCH has only adopted a shortcut approach without investigating to trace the full truth. This method is unacceptable and has to be deprecated. Respondent no. 3 has also accepted that in view of incomplete investigation and lack of proper evidence it is not justified to confirm charges against petitioner. Jurisdiction is exercised and the impugned order dated 17th August 2021 passed by respondent no. 3 set aside. Respondent no. 2 is directed to investigate how a forged scrip was registered at JNCH and how re-registered license was used by two importers in ICD Tughlakabad. Respondent no. 2 shall also investigate why none of those parties were neither summoned nor any verification at Tughlakabad end has been done and ascertain the truth - petition disposed off.

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• 2024 (8) TMI 1356
  Smuggling into the NSEZ - violation of the Special Economic Zones Act, 2005, Special Economic Zones Rules, 2006 and the Customs Act - Officer of customs is a Proper Officer for the purposes of SEZ Act or not - HELD THAT:- The Ld. Commissioner (Appeals) has not discussed as to how the provisions under the SEZ Act read with the SEZ Rules have been violated in the instant case and have failed to establish as to how the Appellant contravened Section 111(m), Section 112(a), 112(b) and Section 114AA of the Customs Act. Section 110 of the Customs Act is not a notified offence for the purposes of the SEZ Act vide Notification No. S.O. 2665(E) dated 05.08.2016 and therefore, even if by virtue of Notification No.110/2003, the Preventive Officer, NSEZ has been designated as an officer of Customs for the purposes of Customs Act, however by virtue of the Notification SO 2665(E), such officer had no power to detain the subject goods in terms of Section 110 of the Customs Act as the same is not a notified offence under the SEZ Act. In the absence of any notification issued by the Board authorizing the NSEZ officers below the rank of the jurisdictional Commissioner to seize the subject goods, the seizure of the subject goods was legally unsustainable and therefore, confiscation under Section 111(m) of the Customs Act pursuant to such seizure is also bad in law and therefore, is liable to be set aside - the subject vehicles which were made liable for confiscation under Section 115(2) of the Customs Act, and are in appeal is unwarranted for, since the subject vehicles were used for carrying the goods out of and into the NSEZ without the knowledge of the owner or person-in-charge of the subject vehicles which is a mandate as per the bare reading of Section 115 (2) of the Act. The confiscation of the goods and seizure of vehicles cannot sustain and it is hereby set aside - the penalty imposed on the Appellant is unwarranted - the impugned orders in both the appeals are set aside - appeal allowed.

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• 2024 (8) TMI 1355
  Misdeclaration of imported goods - Rejection of declared value - redetermination of assessable value - Valuation Rules are to be followed sequentially through rules 4 to 9 or not - Confiscation - penalties. Mis-declaration of description or value of the goods or not - HELD THAT:- It is a matter of record that the goods were examined under Panchnama and the quantity was found to be more than what was declared. When questioned, Ajay Garg said that he had declared less quantity so as to save shipping charges. It is also a mater of record that instead of mutilated articles what were found was old and worn cloths whose import was prohibited - the submissions made by the learned counsel for the appellant are false and can be verified from the statements of Ajay Garg and from the orders of the lower authorities. Rejection of transaction value - HELD THAT:- When the appellant himself has produced true invoices showing the correct transaction value and also tendered his statement to this effect, the proper course for the officer is to re-assess the Bills of Entry as per the correct transaction value declared by the appellant - If the officer had rejected the declared assessable value of 0.95 US dollars per kg submitted by the appellant as the correct transaction value, then he would have had to go through the Valuation Rules 4 to 9. The officer simply accepted the assessable value declared by the appellant as correct assessable value. There is no infirmity in re-determining the assessable value and calculating the differential duty on the basis of declared true invoices . Confiscation - redemption fine - penalties - HELD THAT:- Since the mis-declaration of the nature of the goods, quanitity and value and import of the goods which were restricted without the required licence are not in dispute, the confiscation of the goods, the redemption fine and penalties need to be upheld. The impugned order needs to be sustained - appeal dismissed.

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• 2024 (8) TMI 1354
  Granting of provisional release of the seized goods wherein the appellant was directed to furnish their bond equal to the value of goods and to furnish a bank guarantee equal to the duty - seized imported areca nuts - non-submission of legitimate documents regarding the source of said seized goods - HELD THAT:- The goods were seized after primary investigation. There is no evidence that even though it is assumed that the goods were diverted from SEZ but as per the documents submitted by the appellant the goods were procured by the appellant from domestic supplier. It is also fact that transaction also suffered the GST and E-way bill and invoices were raised. It is also found that the detail investigation is yet to be carried out and only thereafter it can be established whether the goods under seizure is clandestinely form KASEZ or otherwise. In this position, the condition of bank guarantee of Rs. 6,20,26,403/- appears to be very harsh. Therefore, the amount of bank guarantee needs to be reduced, in the facts and circumstances of the case. Accordingly, the goods may be provisionally released on execution of bond for Rs. 3,65,78,838/- with a bank guarantee of Rs. 3 crores. The impugned order is modified - Appeal disposed off.

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• 2024 (8) TMI 1353
  Classification of imported goods - Aluminium Scrap Tassel - to be classified under CTH 76020010 or under 76051100 - enhancement of value of the goods on the basis of NIDB data - entire case was made out on the basis of the examination report of Assistant Commissioner (Docks) - HELD THAT:- From the above Chartered Engineer Certificate, it is crystal clear that goods are not in the primarily form of Coils of Aluminium Wire of Uniform Diameter of 10MM . Therefore, the goods cannot be considered as the fresh coils of Aluminium wire but as per the nature of the goods described by the Chartered Engineer, it is clearly Aluminium Scrap Tassel as per ISRI. Therefore, the same is correctly classified under the classification RITC 76020010, by no stretch of imagination, the same can be classified under 76051100. The Tassel under the ISRI specification for Aluminium scrap includes old, unalloyed Aluminium wire and cable. Therefore, even the Aluminium scrap if it is in rejected wire form having various defects as described by the Chartered Engineer. Even from the look of the product, it may appear as Aluminium Wire but the same carries various defect, cut, etc., hence it will clearly falls under Aluminium scrap - Therefore, in the facts of the present case, the appellant have correctly classified the goods as Aluminium Scrap under RITC 76020010 and since, the nature of goods is clearly as per the descriptions declared in the bill of entry, the enhancement of the value being consequently to the claim of the Revenue, the enhancement of value will also not be sustainable. The impugned order is not sustainable and is set aside - appeal allowed.

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• 2024 (8) TMI 1352
  Payment of anti-subsidy/ Countervailing Duty (CVD) imposed on the import of stainless steel coils and plates from China under Section 9 of the Customs Tariff Act, 1975 - amendment of the shipping bills under Section 149 of the Customs Act, 1962 - permission for procedural relaxation under Drawback Rules, 2007. Whether import of stainless steel coils and plates from China in eight impugned B/Es all dated 12.10.2017 are liable for payment of Countervailing Duty (CVD) imposed under Section 9 of the Customs Tariff Act, 1975 or whether such imports under Advance Authorization Licenses are eligible for CVD exemption vide Notification No.18/2015-Customs dated 01.04.2015, as amended, vide Notification No.79/2017-Customs dated 13.10.2017? - HELD THAT:- Section 9 of the Customs Tariff Act, 1975, clearly demonstrate that the Central Government has power to impose a specific Countervailing duty (CVD) not exceeding the amount of subsidy bestowed upon the manufacture or production therein or the exportation therefrom of any article including any subsidy on transportation of such article, when such subsidized article is imported into India. Accordingly, Notification No. 01/2017-Customs (CVD) dated 07.09.2017issued by the Central Government had imposed CVD on import of Flat rolled products of stainless steel, whether hot rolled or cold rolled of all grades/series; whether or not in plates, sheets, or in coil form or in any shape, of any width, of thickness 1.2 mm to 10.5 mm in case of hot rolled coils; 3 mm to 105 mm in case of hot rolled plates sheets; and up to 6.75 mm in case of cold rolled flat products falling under CTH 7219 or 7220. Therefore, it could be concluded that there was a levy of CVD in force in terms of the said notification dated 07.09.2017. However, such levy was exempted only after the issuance of Notification No.79/2017-Customs dated 13.10.2017. In terms of Section 159A ibid which provide that the effect of amendment do not revive anything that was not in force or existing at the time at which the amendment takes effect, we are of the considered view that import of stainless steel coils and plates from China in eight impugned B/Es all dated 12.10.2017 are liable for payment of Countervailing Duty (CVD) imposed under Section 9 of the Customs Tariff Act, 1975. To this extent the impugned order dated 01.11.2019, passed by learned Commissioner of Customs in confirmation of the demand of CVD duty is legally sustainable. Whether confiscation of imported goods covered in eight impugned B/Es under Section 111(d) of the Customs Act, 1962 and imposition of penalty on the appellant company under Section 114A ibid; penalties on S/Shri Hemant Bohra and Vimal Bohra, Directors of the appellant company under Sections 112(a) and 114AA ibid in the impugned order dated 01.11.2019 is sustainable? - HELD THAT:- From plain reading of the legal provisions under Section 112(a) of the Customs Act, 1962, it is clear that a penalty is imposed, if it established that in relation to goods which are liable to confiscation under Section 111 ibid, and that such penalty is liable to be imposed on any person . It is not the case that in the factual matrix of the present case, that the impugned imported goods were imported by the appellants involving any prohibition imposed under Customs Act, 1962 or any other Act. In fact, the appellants importer have given the specific Advance Licenses on which they had claimed exemption from the levy of CVD, and the departmental authorities at the Customs port of importation had also permitted such impugned imported goods to be cleared without payment of such CVD approving of such act by the appellants - it is clearly proved that there is no trace of any element of violation of Section 111(d) ibid and hence the imposition of penalty under Section 112(a) ibid is without any evidence or grounds and hence to this extent the impugned order is not legally sustainable. In respect of penalty imposable under Section 114AA ibid is concerned, the legal provisions clearly provide that such penalty is imposed if a person is knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular - The penalty provision introduced by the Government under Section 114AA has been proposed considering the serious frauds being committed as that no goods are being exported, but papers are being created for availing the number of benefits under various export promotion schemes as has been held in the case of SURESH KUMAR AGGARWAL VERSUS COMMISSIONER OF CUSTOMS -III, RAIGAD, MAHARASHTRA [ 2024 (6) TMI 779 - CESTAT MUMBAI] . Therefore, the imposition of penalty under Section 114AA ibid is without any evidence or grounds and hence the impugned order is not legally sustainable in this aspect also. Duty drawback claim - HELD THAT:- The case of the appellants for claim of drawback in respect of the CVD suffered cannot be rejected as was decided in the case of appellants by the Commissioner of Customs, Nhava Sheva-II in the impugned letter dated 19.04.2022. Further, the aforesaid instructions issued by CBEC and DGFT specifically provide for accepting the claim for drawback and allowing the exporters/importers to file the documents with the jurisdictional customs authorities. As the appellants have submitted complete details with respect to the B/Es and Shipping Bills relevant to their claims for drawback along with supporting documents, there is no ground for denying the same under Rule 13 (1) (a) of the Customs and Central Excise Duties Drawback Rules, 2017 - the application for claim of drawback submitted by the appellants is eligible to be considered under Customs and Central Excise Duties Drawback Rules, 2017. Rejection of the request for amendment of shipping bills under Section 149 of the Customs Act, 1962, on the ground that there is delay of more than five months in filing the application - HELD THAT:- The legal provisions do not prescribe any specific time limit and the time limit prescribed under Circular No.36/2010-Customs dated 23.09.2010 has been struck down by a number of judgements of Hon ble High Courts and Hon ble Supreme Court - The Hon ble High Court of Madras has held in the case of M/S. ANGEL OVERSEAS CORPORATION VERSUS UNION OF INDIA, DEPUTY COMMISSIONER OF CUSTOMS [ 2018 (7) TMI 1019 - MADRAS HIGH COURT] that the object being that the exporter should be entitled to drawback, the delay in filing claim filed for drawback should be entertained by condoning the delay. The Hon ble High Court of Ahmedabad has held in the case of MESSRS MAHALAXMI RUBTECH LTD. VERSUS UNION OF INDIA [ 2021 (3) TMI 240 - GUJARAT HIGH COURT] that the time limit of the submission of the request for conversion of shipping bills from one scheme to another within three months form the date of Let Export Order is held as ultra vires to Section 149 of the Customs Act, 1962. The impugned order dated 01.11.2019 passed by learned Commissioner of Customs, NS-III, JNCH, Nhava Sheva to the extent it has confirmed the confiscation of impugned goods under Section 111(d) of the Customs Act, 1962 and imposed penalty on the appellant company under Section 114A ibid and also imposed penalties on S/Shri Hemant Bohra and Vimal Bohra, Directors of the appellant company under Sections 112(a) and 114AA ibid is not legally sustainable and the same is set aside. However, there are no reason to interfere with the confirmation of Countervailing Duty (CVD) imposed under Section 9 of the Customs Tariff Act, 1975 in the impugned order and the same is upheld. Denial of grant of permission for giving exemption from compliance of Rule 13(1)(a) ibid in terms of the proviso appended to such Rule - denial of amendment of shipping bills sought by the appellants under Section 149 ibid read with earlier letter dated 21.02.2022 - HELD THAT:- The impugned letter dated 19.04.2022 is set aside and the jurisdictional Commissioner of Customs is directed to examine the application filed by the appellants and provide necessary relief in grant of drawback benefits as per law. The impugned order is set aside - appeal allowed.

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• 2024 (8) TMI 1351
  Classification of the imported goods - HDPE Regrind - classifiable under Customs Tariff Item (CTH) 3901 2000 or not - permissible for importation into the country, in terms of Foreign Trade Policy - whether the impugned order, in upholding the confirmation of confiscation of imported goods, imposition of redemption fine for re-export and imposing of penalty on the appellants by the original authority is legally sustainable or not? HELD THAT:- The imported goods have been tested by three laboratories viz., (i) CRCL JNCH laboratory, which is also known as DYCC, JNCH laboratory, is an in-house customs testing facility; (ii) Government laboratory of CIPET, Aurangabad, and (iii) Envirocare Labs Pvt. Limited, which is a NABL accredited laboratory. As regards CRCL JNCH laboratory, we find that the Commissioner of Customs, NS-V, JNCH had issued Public Notice No.56/2021 dated 16.06.2021 informing the importers, exporters and the EXIM trade that the said laboratory cannot analyse/test certain 20 specified goods due to non-availability of facility in that laboratory - on perusal of the test report given by CRCL, JNCH laboratory, it transpires that it is given mainly on the basis of visual examination and the nature of constituent material could not be ascertained by them. Hence, such test reports of CRCL, JNCH laboratory cannot be relied upon as it does not have any legal basis. It is seen that the BIS standard in IS 14534:1998 inter alia prescribe only post-consumer waste, in-house scrap for the purpose of monitoring the quality and for facilitating identification of the basic raw material. In such context, there is a mention of visible contamination with respect to post-consumer plastics which have been elaborated in Annexure-A to such Standard, as goods covering trash/carry bags, Carry bags, non-food containers, office supplies, municipal supplies, building products, pipe and fittings of PP, PE, nylon etc., Thus, it is clear that in terms of BIS standard, the imported product do not quality as plastic waste/scrap. The impugned order upholding confiscation of goods on the basis of violation of DGFT s Public Notice requiring an import license in respect of the imported goods, is not proper and justified. The impugned order dated 07.12.2022passed by the Commissioner of Customs (Appeals), JNCH, Mumbai-IIis not legally sustainable and the therefore the same is set aside - appeal allowed in favour of the appellants.

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• 2024 (8) TMI 1350
  Suspension of CB license - Violation of Regulations 10(d) and 10(e) of Customs Brokers Licensing Regulations (CBLR), 2018 - gross mis-declaration of the quantity, description and nature of the goods with an intent to evade the applicable customs duty - Delay in issue of SCN, submission of inquiry report - initiation of inquiry proceedings under Regulation 14 ibid read with 17 and 18 ibid, against violations of CBLR - levy of penalty. Vioaltion of Regulation 10(d) ibid - HELD THAT:- The appellants have failed to file the bills of entry as per the correct documents given by the importers and available in their possession. They have also failed to inform the importers about the correct requirement of customs statute to properly declare the details of imported goods and for payment of applicable customs duty thereon, and hence the appellants CB is liable for their failure to advise their client importers to comply with the provisions of the Customs law. Further, if there was any doubt about the imported goods during the relevant point of time, from the time of its import to its storage in FTWZ under customs bond, then the appellants CB could have brought it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC), but they failed to do so. Thus, the violation of Regulation 10(d) ibid, as concluded in the impugned order is sustainable. Violation of the Regulation 10(e) ibid - HELD THAT:- The charges framed under the SCN dated 09.03.2023 are an independent proceeding under CBLR, 2018 for which the adjudicating authority is required to give specific findings on the basis of inquiry proceedings conducted as per Regulation 17 and 18 ibid. Further, with respect of the packing lists containing the correct description, quantity etc., the appellants CB did not impart any specific information to the importers, rather it is the case that such information was provided by the importers to the appellants. Thus, it is not feasible to sustain this charge on the appellants CB, that they did not exercise due diligence to impart correct information to their clients on the basis of an adjudication done in different proceedings - the conclusion arrived at by the Principal Commissioner of Customs (General) is without any basis of documents or facts, and the impugned order with respect to Regulation 10(e) ibid, and therefore it is not sustainable. Delay in issue of SCN, submission of inquiry report - HELD THAT:- There is slight delay in issue of SCN, submission of inquiry report; however, the adjudication of the case and passing of the impugned order by the learned Principal Commissioner was completed within prescribed time from the submission of inquiry report - it is not found that the argument made by the learned Advocate by referring to various case laws for compliance with the time limits prescribed under the CBLR, 2018 was not followed as in the present case it cannot be said that there was inordinate delay and there was reasonable grounds in terms of the test laid down by the Hon ble High Court of Bombay in the case of Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P Ltd. [ 2018 (4) TMI 1053 - BOMBAY HIGH COURT] and there was no undue delay. Levy of penalty - HELD THAT:- Tthe appellants could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, when the correct packing list providing detailed and correct description, quantity of imported exports goods were available with the appellants CB and the same was not brought to the notice of the Customs department. Thus, to this extent the imposition of penalty for failure in not being proactive for fulfilling of regulation 10(d) of CBLR, 2018 is appropriate and justifiable. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants and for forfeiture of security deposit, inasmuch as there is no violation of regulation 10(e) ibid and the findings in the impugned order is contrary to the facts on record. However, in view of the failure of the appellants to have acted in a proactive manner in fulfillment of the obligation under regulation 10(d), we find that it is justifiable to impose a penalty of Rs.10,000/- against the appellants, which would be reasonable. The appeal allowed in favour of the appellants.

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• 2024 (8) TMI 1349
  Classification of imported goods - Float Glass - to be classified under CTH 7005 1090 or under CTH 7005 2990? - it was alleged that the CFG imported from Malaysia was wilfully mis-classified under CTH 70051090 for the purpose of availing undue FTA benefit of the said Notification, resulting in short levy of applicable Customs duty - eligibility for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011 - invocation of extended period of limitation. Classification of imported goods - HELD THAT:- The issue of classification of CFG is no more res integra since the issue and identical arguments submitted by litigants were already elaborately dealt with in the Orders of the Kolkata Tribunal in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chennai [ 2024 (5) TMI 943 - CESTAT CHENNAI] wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975 - the issue of classification of Clear Float Glass is decided in favour of the appellant. Thus, the appellant succeeds on merits. Invocation of extended period of limitation - penalties - HELD THAT:- After finalisation of assessments relying on the Test Report, it is not open for the Department to invoke the larger period of limitation as these assessments have undergone the rigours of provisional assessment and subsequent finalisation for the same product and for the same reason, the appellant has not suppressed or mis-declared any fact and the proposal to reclassify was only on the basis of interpretation made in the CRA objection and not on account of any shortcoming on the part of the appellant - Therefore, invoking extended period in these proceedings, either for demand of duty or for imposition of mandatory penalty is not at all sustainable. So, the issue of limitation is decided in favour of the appellant and consequently the order of confiscation and imposition of fine and penalties are set aside. The imported Clear Float Glass is more appropriately classifiable under Customs Tariff Heading 7005 1090 of the Customs Tariff Act, 1975 and thus is eligible for exemption of the benefit of the Notification No. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102220/2023 dated 09.06.2023 is set aside. Appeal allowed.

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• 2024 (8) TMI 1348
  Revocation of Customs Broker (CB) license - Forfeiture of security deposit and levy of penalty - violation of Regulations 10(e), 10(n), 10(q), 13(3), 13(4), 13(7)and 13(12) of CBLR, 2018 - Procedural compliance with Regulation 17 of CBLR, 2018 or not - mis-declaration and under valuation in respect of post imports - inquiry officer though appointed on 08.07.2022 had taken about 13 months to submit his report on 07.08.2023, whereas the Regulations provide for 90 days period from the date of issue of notice. Violation of Regulation 10(e) ibid - HELD THAT:- In the absence of any document to prove the claim of mis-declaration and under valuation of import goods on the part of the appellants, the findings given by the learned Principal Commissioner of Customs in the impugned order that the appellants has failed to exercise due diligence to ascertain the correctness of information is difficult to prove for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(e) ibid. Violation of Regulation 10(n) ibid - HELD THAT:- The appellants CB had obtained the KYC documents from the importers and verified the existence of the importers through digital mode viz., Certificate of Importer-Exporter Code issued by the Additional Director General of Foreign Trade, Ministry of Commerce and Industry, Government of India; signature and account verification from bank. The inquiry authority had also accepted the same and dropped the charges against this violation in his inquiry report - CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and verification of any two documents among specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. Thus, there are no legal basis for upholding the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order. Violation of Regulation 10(q) - HELD THAT:- It is interesting to note that learned Principal Commissioner had examined the issue and had held that the appellants had not violated the said Regulation 10(q) ibid, though inadvertently he has mentioned the regulation as 10(n) instead of 10(q) . However, in the order he has simply confirmed the violation by stating that the appellants CB had failed to discharge his duties cast upon him inter alia Regulation 10(q) ibid. Further, both sides have not brought to our knowledge of any corrigendum issued in this respect or in general of the impugned order. Procedural compliance with Regulation 17 of CBLR, 2018 - HELD THAT:- In terms of Regulation 17 ibid, the learned Principal Commissioner could have waited for the entire inquiry proceedings to be completed involving two separate proceedings and then pass necessary orders as provided in the CBLR. However, it is seen that despite the CB license already under suspension as on date of passing the impugned order, again one another deemed suspension to take effect from a future event and date was prescribed and even here neither the prescribed time lines for completion of inquiry proceedings were followed nor reasonable explanation offered for the delay in conclusion of CBLR proceedings - there is no legal provision under CBLR for taking such action by the licensing authority. The above casual manner of handling the customs broking license matters by the authorities below do not instill confidence with us to state that CBLR is properly implemented for the purpose for which it has been framed for carrying out the provisions of Section 146 of the Customs Act, 1962. Hence, on this account too, the impugned order is not legally sustainable. Allegation against Regulations 13(3), 13(4), 13(7) and 13(12) ibid - HELD THAT:- As the AC/DC of Customs in-charge of the Customs Broker Section, New Customs House themselves have approved the persons nominated by the appellants as authorised signatory for transacting business with customs in the above Public notices confirming that those two persons are duly authorised to transact with customs, and in the absence of any proof for such allegation, we are unable to accept the findings arrived at by the learned Principal Commissioner in the impugned order that the documents were handled in unauthorized manner. There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in deemed revocation of the CB license of the appellants; for forfeiture of security deposit second time and for imposition of penalty, inasmuch as there is no violation of regulations 10(e), 10(n), 10(q) and 13(3), 13(4), 13(7) and 13(12) ibid, and the findings in the impugned order is contrary to the facts on record. Further, the impugned order is not sustainable as it has been issued in violation of Regulation 17(7) ibid. The impugned order is set aside - appeal allowed in favor of appellant.

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• 2024 (8) TMI 1347
  Eligibility for benefit of customs duty exemption under Notification No.26/2000-Customs dated 01.03.2000 in terms of India Sri Lanka Free Trade Agreement - imported goods classified under CTI 0802 8090 and declared as Sri Lanka Areca Nuts with value of USD 351000 for 90 MTs - imported goods fulfill the requirement of DGFT Notification No. 35/2015-2020 dated 17.01.2017, in order to claim the import of impugned goods as Free or not - Country of origin - HELD THAT:- Neither the jurisdictional Customs authorities have drawn the samples of the impugned goods for testing by the Departmental Central Revenue Control Laboratory (CRCL) or the laboratories certified/approved by the Port Health Officer (PHO)/ Food Safety and Standards Authority of India (FSSAI). Further, when the test results were not acceptable to the appellants, facility for re-testing have not been conducted to provide a reasonable evidence on the test results, as per the guidelines prescribed by CBEC. However, the appellants have got the impugned goods tested in RCA Laboratories, Mumbai, which is approved by the FSSAI and the rest result in report dated 02.07.2018 provides the results of chemical testing, microbiological identification, tracing of residues and other trace metals, to conclude that it cannot recognize the country of origin of the tested samples on the basis of above factors. In the above factual matrix, it is opined that the test results obtained either by the Department or by the appellants do not provide any concrete evidence for determination of the origin of the imported goods. Hence it is not feasible to take the same for arriving at the conclusion of the disputed issue. From the documents/evidences produced to support the fact about the country of origin of the impugned goods is of Sri Lanka, it is opined that country of origin (COO) as stated by the appellants is correct, and there are no independent evidence adduced by the Department to prove against such fact. Thus, the impugned goods are eligible for the customs duty exemption under Notification No.26/2000-Customs dated 01.03.2000. Value of imported goods - whether it is in compliance with MIP notification of the DGFT or not - HELD THAT:- The declared value of goods was amended from USD 43,200 to USD 70,200 in CUSDEC documents No. E 60934, No. E 60269, No. E 60935 in respect of 18 MTs of areca nuts each (altogether 54 MTs); and another CUSDEC document No. E 60271 was also amended from USD 86,400 to USD 140,400 for 36 MTS of areca nuts by Sri Lanka customs authorities on 12.12.2018. On the above basis, and as per the declared value in the B/E, the average value of imported goods per Kg. works out to Rs.252/- which is in compliance with the MIP of Rs.251/- notified by the DGFT, Ministry of Commerce Industry in Notification No.35/2015-2020 dated 17.01.2017. Thus, we are of the considered view that the areca nuts imported by the appellants from Sri Lanka can be allowed for import as Free . Therefore, the conclusion arrived at by the authorities below, that the imported goods have violated the legal provisions under Section 111(d) and 111(m) of the Customs Act, 1962, is not sustainable - In the absence of any evidence produced by the department to prove the violations in respect of imported goods as per Section 111(d) and 111(m) ibid, the proposal for confiscation of the impugned goods and imposition of redemption fine by the authorities below are not legally sustainable. The impugned goods classifiable under CTI 0802 8090 are eligible for availing the benefit of customs duty exemption under Notification No.26/2000-Customs dated 01.03.2000 in terms of India Sri Lanka Free Trade Agreement read with Notification No. 19/2000-Customs (N.T), dated 01.03.2000 and DGFT Notification No. 35/2015-2020 dated 17.01.2017 - the impugned order upholding confirmation of adjudged demands in the original order does not stand the scrutiny of law and therefore is not legally sustainable. Appeal allowed.

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• 2024 (8) TMI 1346
  Classification of imported goods - Clear Float Glass (CFG) - to be classified under CTH 70051090 adopted by the Appellant or under CTH 70052990? - denial of the benefit of Notification No. 46/2011-Cus dated 01.06.2011 - demand of differential Customs duties in respect of imports of CFG during the period from 13.09.2017 to 01.04.2022, arising on account of short levy, under Section 28(4) of the Customs Act, 1962 along with applicable interest under Section 28AA of Customs Act, 1962 - confiscation of subject import goods u/s 111(m) of the Act - penalty u/s 114A/112(a) of Customs Act, 1962. Whether the imported Clear Float Glass, is classifiable under CTH 70051090 as declared/self- assessed by the Appellant or under CTH 7005 2990 as re-classified/re-assessed by the Department in terms of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975? - HELD THAT:- The issue of classification of CFG is no more res integra since the issue and identical arguments submitted by litigants were already elaborately dealt with in the Orders of the Kolkata Tribunal in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chennai [ 2024 (5) TMI 943 - CESTAT CHENNAI] wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975. Whether Extended Period is invokable or not considering the evidence and facts in this appeal? - HELD THAT:-After finalisation of assessments for over 5 years, it is not open for the Department to invoke the larger period of limitation as these assessments have undergone the rigours of provisional assessment and subsequent finalisation for the same product and for the same reason, the appellant has not suppressed or mis-declared any fact and the proposal to reclassify was only on the basis of interpretation made in the CRA objection and not on account of any shortcoming on the part of the appellant. Therefore, invoking extended period in these proceedings, either for demand of duty or for imposition of mandatory penalty is not at all sustainable. So, the issue of limitation is decided in favour of the appellant and consequently the order of confiscation and imposition of fine and penalties are set aside. The imported Clear Float Glass is more appropriately classifiable under Customs Tariff Heading 7005 1090 of the Customs Tariff Act, 1975 and thus is eligible for exemption of the benefit of the N/N. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102161/2023 dated 05.06.2023 is ordered to be set aside. Appeal allowed.

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• Securities / SEBI

• 2024 (8) TMI 1345
  Routing of funds to the Indian Securities Market by Noticee/Mr. Vijay Mallya -Violation of SEBI Act and PFUTP Regulations - financial route i.e. the FII route was used by the Noticee to trade in the Indian Securities market by concealing his identity - layering the transactions in the names of various overseas registered entities and opening accounts in their names in UBS-UK Bank, even though the Noticee himself was the actual beneficial owner of each of these front entities HELD THAT:- Noticee in abusing the framework of the FII Regulations and dealing in securities of listed companies of his group of companies in India, indirectly, in a fraudulent manner and by employing a manipulative and deceptive artifice, thereby, indulging in purchase and sale of securities of Herbertsons / USL clearly was detrimental to the investors at large and was with an intention to deceit the market players in violation of the provisions of Regulation 3(a), (b) and (d) of the PFUTP Regulations, 2003 and Section 12A(a) and 12A(c) of SEBI Act, 1992. The shareholding pattern of Herbertson available on the BSE website for the quarter ending December 31, 2005 that Phipson, McDowell and UBHL were shown as Indian Promoters of Herbertsons holding 53,49,775 shares (56.18%), 4,59,809 shares (4.83%) and 22,46,756 (23.59%), respectively. As Phipson was wholly owned subsidiary of McDowell and Herbertsons was subsidiary of Phipson. Thus, find that all the said companies were belonging to the same group i.e. UB group of which the Noticee was the Chairman. These shares of Herbertsons were partially transferred to Matterhorn through block deals dated February 28, 2006 and March 03, 2006. Post such transfer of shares, Matterhorn Ventures was shown as a Non-Promoter Public Shareholder under sub-section of FIIs in Shareholding Pattern of Herbertsons as on March 31, 2006. As already found entire transaction in the shares of Herbertsons and USL was funded by the Noticee, indirectly, through VNHL by routing funds through overseas bank accounts and therefore, the shareholding of Matterhorn Ventures of 9.98% shares of Herbertsons actually belonged to the promoter category being totally funded by the Noticee. Noticee/Mr. Vijay Mallya indeed had misrepresented the truth and concealed a material fact known to him that the shareholding shown in the name of Matterhorn actually belonged to the promoter category as the same was totally funded by the Noticee thereby, violating the provisions of Regulation 4(2)(f) of the PFUTP Regulations, 2003. Section 11 of the SEBI Act, 1992 confers a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market. The said objectives are all interlinked. Noticee, in the instant case, has devised a scheme to indirectly trade in the shares of his own group companies through layered transactions / fund flow using his overseas related companies through FII route in order to keep his identity masked and trade in the Indian Securities market in defiance of the regulatory norms. Such acts of the Noticee are not only fraudulent and deceptive but are a threat to the integrity of the securities market. Earlier, also WTM, SEBI had debarred the Noticee from accessing the securities market and prohibited him from buying, selling or otherwise dealing in the securities in any manner for a period of 3 years from the date of the said order (i.e. from June 01, 2018 till May 31, 2021) for manipulative activities such as diversion of funds and / or improper transactions in the scrip of USL in violation of the PFUTP Regulations, 2003 read with the SEBI Act,1992. SEBI had also restrained the Noticee from holding a position as Director or Key Managerial Person of a listed Company for a period of 5 years from the date of the said order (i.e. from June 01, 2018 till March 31, 2023). The said order was challenged before the Hon ble SAT, which later was dismissed due to want of prosecution which ultimately resulted in attainment of finality of the directions issued by the WTM, SEBI in the order dated June 01, 2018. Thus, I find that the Noticee has been indulging in manipulative and fraudulent activities and indulging in unfair trade practices while dealing in the securities market in violation of the securities laws. Thus, find that appropriate directions under Section 11B read with Section 11(1) of the SEBI Act, 1992 in order to protect the market integrity and deter such activities from the markets would meet the ends of justice. ORDER:- The Noticee is hereby restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, for a period of three (3) years from the date of this order. The Noticee is further restrained from associating himself with any listed company or proposed to be listed company, in any capacity, directly or indirectly, for a period of three (3) year from the date of this order. As during the period of restraint, the existing holding of securities including the holding of units of mutual funds of the Noticee shall remain frozen. The obligation of the debarred Noticee, in respect of settlement of securities, if any, purchased or sold in the cash segment of the recognized stock exchange(s), as existing on the date of this Order, can take place irrespective of the restraint /prohibition imposed by this Order only, in respect of pending unsettled transactions, if any. All open positions, if any, of the Noticee debarred in the present Order, in the F O segment of the stock exchanges, are permitted to be squared off, irrespective of the restraint/prohibition imposed by this Order.

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• Insolvency & Bankruptcy

• 2024 (8) TMI 1344
  Violation of principles of natural justice - Seeking clarification of the judgment dated 30.05.2023 - RP has locus to file the Application or not - appointment of the Resolution Professional (RP) and the objections raised by the Personal Guarantors - HELD THAT:- There cannot be any denial that principles of natural justice are also attracted in the proceeding in Application under Section 95. However, the Hon ble Supreme Court, after noting the scheme of insolvency proceeding, has held that Adjudicating Authority role cannot be held to be applicable at the stage of Section 97(5), i.e., at the stage when RP has been appointed. It is to be noted that Appeal(s) were filed by the Appellant challenging order dated 10.04.2023 by which, RP was appointed in the Application under Section 95 filed by the Financial Creditor. The Appellant while challenging order dated 10.04.2023, did not implead the RP as one of the party, whereas RP was required to be impleaded, since the appointment of RP was sought to be challenged in the Appeal, the Appellant cannot take benefit of its own mistake, in not impleading the RP in the Appeal, who was required to be impleaded. It does not lie in the mouth of the Appellant to contend that RP has no locus to file the Application. The objection, which are sought to be raised by the Appellant, are only clear endeavor to prolong the proceedings under Section 95 - the submission of the Appellant that RP has no locus is rejected. Furthermore, the Adjudicating Authority in its order dated 09.05.2024 has observed that there is no assistance from the learned Counsel for the RP in the matter. It was due to the above observations that present Application has been filed by the RP, which cannot be said to be without any locus. RP cannot be precluded form submitting its Report as per the law laid down by the Hon ble Supreme Court and the Adjudicating Authority has to consider all objections raised by the Appellant(s) at the time of hearing of Section 100 and the order passed by this Tribunal dated 30.05.2023, cannot be read in any manner as to exclude the applicability of judgment of Hon ble Supreme Court dated 09.11.2023 in Dilip B Jivrajka. The Adjudicating Authority may proceed in the proceedings under Section 95 as per the law - Application disposed off.

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• 2024 (8) TMI 1343
  Prayer for clarification of the order dated 26.05.2022 passed by this Tribunal - prayer that Respondent - seeking Restraint on enforcement or execution of Arbitral Awards - HELD THAT:- It is noted that by order dated 11.01.2019, this Tribunal directed for continuation of pending proceedings before Arbitral Tribunals, which was with a caveat that Arbitral Tribunals are prohibited to pass any order under Section 17 of the Arbitration Conciliation Act, 1996 against IL FS or any of its Group Companies. Award passed, if any was to be kept in sealed cover till final decision of the petition under Section 241 and 242 of the Companies Act, 2013 pending before the NCLT. It was further observed that after the Award is given in favour of the IL FS or any of its Group Companies, in such case, the Award need not be kept in sealed cover, even during the pendency of the Company Petition. An IA No.2114 of 2021 was filed by Respondent - Sadbhav Engineering Ltd. This Tribunal in the order has observed that the order dated 26.05.2022 clearly indicate that Tribunal did not enter into the issues raised by the respective parties. It was further observed that the observations made in the order dated 26.05.2022 cannot be read to mean that it has in any manner varied the order dated 15.10.2018 passed in the Appeal, which was operating till date. It is reiterated that order dated 26.05.2022 neither vary, nor modified the order dated 15.10.2018 or the entire order dated 11.01.2019. The only modification was made in paragraph 2 of the order dated 11.01.2019 that sealed cover be opened, which was directed to be kept till the final decision of the Company Petition filed under Section 241 and 242. When the order dated 15.10.2018 has not been varied or modified, even if an Award has been opened from the sealed cover and communicated to the Respondents, the Respondents are not entitled to enforce the Award during the continuation of the interim direction dated 15.10.2018, which was subsequently affirmed by this tribunal on 12.03.2020. Application allowed.

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• 2024 (8) TMI 1342
  Effect of moratorium when symbolic possession has already been taken over by the appellant - If the proceedings under the SARFAESI Act, 2002 were complete on 20.06.2019 when symbolic possession of the property of the Corporate Debtor was taken over by the Appellant and whether the moratorium under Section 96 of the Code would not affect the rights of the appellant? HELD THAT:- This issue has already been answered in a recent judgement in Sanjay Dhingra Vs IDBI Bank Ltd Ors [ 2024 (7) TMI 812 - DELHI HIGH COURT] where it was held that The respondent-bank cannot proceed further under the SARFAESI Act, in view of the interim moratorium, operating on account of the Insolvency Proceedings pending against the petitioner, the personal guarantor. The impugned order dated 25.02.2021 need not be interfered - the appellant shall not proceed further under the SARFAESI Act qua the subject property till the moratorium is lifted - appeal dismissed.

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• FEMA

• 2024 (8) TMI 1341
  Eligibility of reason to believe before effecting seizure - as argued non-consideration of such evidence and tangible material placed on record by the appellant, would by itself, vitiate not only the seizure orders but also the order passed by the Competent Authority. HELD THAT:- As perused the Seizure Orders and find that the Officer has examined the relevant material before him in great detail and has, apparently after analysing the same, coupled with the statement of the CEO of the appellant, formed his reasons to believe before effecting seizures. We have also examined the orderof the Competent Authority under the FEMA and find that the same is based on tangible material which was analysed and consequently the seizure orders were confirmed. At that stage a Constitutional Court is not to interdict the investigations or probe the evidentiary value of such material gathered. It is trite that Courts exercising powers of judicial review would consider as to whether there was objective and tangible material available with the authorities before any action of effecting seizure was contemplated. A Court exercising writ jurisdiction is not sitting as an appellate court or authority. Thus, we are satisfied that the learned single Judge has exercised the jurisdiction vested, correctly. As urged many facts which cannot be evaluated or considered by a writ Court since the same would require evidence and the evaluation thereof - The issue as to what constitutes capital account transaction and current account transaction and as to how the appellant has transacted its business and by what mode etc. and whether the appellant is connected to the Opera Group and other entities like Mobimagic and HK Fintango, with whom and through whom, it is alleged that financial transactions were made which are alleged to be in violation of the provisions of FEMA, in our considered opinion, are highly disputed questions of fact. Having regard to the fact that the records indicate that there exists an absolutely diametrically opposite and contrary set of disputed facts, it is apparent that the Court exercising powers of judicial review under Article 226 of the Constitution of India, does not have the necessary wherewithal to render its opinion thereon. Impugned order relegating the appellant to the proceedings before the Adjudicating Authority without deciding the matter on merits itself - We find that the ld Single Judge has noted that the respondents have already filed a statutory complaint before the Adjudicating Authority and substantial hearings have already taken place before it. We have found that the learned Single Judge has already examined the issue on merits and passed the impugned judgment. Having regard to the fact that the Adjudicating Authority while deciding the complaint shall obviously also decide the sanctity of the seizure as also the validity of the Confirmation Order dated 04th February, 2022 passed by the Competent Authority, we too find no reasons to interfere with the observations rendered by the learned Single Judge in the impugned judgment.

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• Service Tax

• 2024 (8) TMI 1340
  Jurisdiction to issue order - Recovery of service tax with interest and penalty - Challenge to assessment order - execution of works contracts as a sub-contractor to the main contractor - petitioner having declared income from sub-contracts, and paid income-tax, failed to pay the service tax by duly filing the ST-3 returns - HELD THAT:- As against the order-in-original statutory appeal lies to the Commissioner (Appeals). However, without availing the said remedy the petitioner has approached this Court stating that the order of the 3rd respondent is without jurisdiction, in as much as the services rendered by it to the main contractor are exempt from payment of service tax in terms of the Notification No. 25/2012-Service Tax, dated 20.06.2012. On the basis of the material before it, the 3rd respondent has passed the order in original. If the petitioner is really aggrieved by the said order remedy is to file an appeal before the appellate authority before which the petitioner can in a better manner, if he has some material to support his contention, establish his case of sub-contract. It could not be argued by learned counsel for the petitioner as to how the order is without jurisdiction. The issue of the work in question was done as contractor or sub-contractor is one of fact on which finding has been recorded by the 1st authority against the petitioner. No justifiable ground has been pointed out by the petitioner seeking indulgence of this court under Article 226 of Constitution of India - the writ petition cannot be entertained - Writ Petition is dismissed on the ground of availability of alternative remedy to the petitioner.

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• 2024 (8) TMI 1339
  Invocation of extended period of limitation - SCN issued on the third party data - Recovery of service tax - levy of penalty - HELD THAT:- The show cause notice dated 06.09.2018 seeks to cover the period 2012-13 onwards as submitted by the learned Counsel for the appellant; the period before 01.10.2012 is clearly beyond even the extended period; for this reason, the demand confirmed cannot be sustained and confirmation of demand, if any, has to be for the period 01.10.2012 to 31.03.2013 only. In addition, learned Counsel for the appellant submits that as the appellant has rendered only one service, abatement @60% in terms of Rule (2C) of the Service Tax (Determination of Value) Rules, 2006 should be allowed to them. The argument of learned AR that the appellant has not obtained registration and not filed returns should not come in the way of the benefit i.e. legally due to the appellant. On going through the facts and circumstances of the case, this Bench finds that there are no reasons to disbelieve the learned Counsel for the appellant. This Bench appreciates the fairness of the learned Counsel in accepting the liability even when extended period cannot be invoked. This Bench finds its appropriate to confirm the duty for the period 01.10.2012 to 31.03.2013 along with interest. This Bench is of the considered opinion that no penalty is imposable on the appellant. The appeal is partially allowed by confirming the demand of Rs.42,013/- for the period 01.10.2012 to 31.03.2013 along with interest.

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• 2024 (8) TMI 1338
  Refund of service tax paid on the services availed in course of export by whatever name the said services are availed under N/N. 41/2007- ST dated 06.10.2007 - procedural violation - HELD THAT:- The Tribunal in the case of M/S. DURGA MARBLE MINERALS VERSUS C.C.E. JAIPUR-II [ 2016 (12) TMI 993 - CESTAT NEW DELHI] has held that Since, export of goods in question has not been disputed by the Department, service tax paid on the taxable services used for ultimte exportation of goods, in our opinion, should merit consideration for refund in terms of the Notification dated 6- 10-2007. The appellants are eligible to avail refund on GTA Services; however, as submitted by the learned Authorized Representative, the refund shall be limited to the GTA Services availed from the ICD to the Port of export; for this purpose, the matter has to travel back to the Original Authority for verification of the claim of the appellants. Also, in the case of Inspection and Testing Charges, as per their own averment, the appellants did not submit the copies of agreements before the Original Authority; the appeals as far as these charges are concerned also require to be verified by the Original Authority only to the extent of verification of concerned agreements - the credit of service tax paid for C F Services shall be admissible only w.e.f. 07.12.2008. The appeals are partly allowed by way of remand to the Original Authority.

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• 2024 (8) TMI 1337
  Classification of service provided by PwC - Chartered Accountant Services or not - Classification of service - Market Research Agency s Services or not - Export of service - Time Limitation - Interest and penalty. Classification of service - Chartered Accountant Services or not - HELD THAT:- The appellant, which is a Private Limited Company i.e. an Incorporated Company, is not engaged in the practice of Chartered Accountancy and does not function as statutorily required for Practicing Chartered Accountants and the appellant is not permitted to practice as a firm of chartered accountants by the Institute of Chartered Accountants of India. Therefore, the services rendered by the appellant cannot be classified under CA Services by any stretch of imagination. Classification of service - Market Research Agency s Services or not - HELD THAT:- The nature of services rendered by the appellant includes providing consultancy or advice, assistance in mergers acquisition of companies, conducting due diligence under specific situations/transactions, conducting health check or diagnostic reviews, evaluation financial viability of a transaction amongst others. Rather, the nature of services rendered by the appellant, it can be rightly classified under the category of Management or Business Consultants Services. The word management signifies ways and means for managing the organization, by any means i.e. by directions or by regulations or by administration. The word direction indicates framing of policy and the word regulation or administration indicates the standard operating procedure to be followed for achievement of the policy. The demand of Rs.1,27,90,193/- has been confirmed considering that the services are to be classified under the practicing Chartered Accountant Services and the Market Research Agency s Services; but it has not been quantified in the impugned order as to how much is the demand under each category; therefore, the impugned order is bad classifying the services rendered by the appellant under the category of Chartered Accountant Services and the Market Research Agency s Services. Export of service - HELD THAT:- The appellant has entered into contract/agreement with PwC Overseas Network Firms and not with the clients of PwC Overseas Network Firms under which the appellant provides services, which can either be provided from the premises of the appellant or any other place as agreed with PwC Overseas Network Firms. The privity of contract arises between the appellant and PwC Overseas Network Firms and not between the appellant and the clients of PwC Overseas Network Firms, because the PwC Overseas Network Firms have separate agreement with its clients. The issue whether the services provided by the appellant to the Foreign Network Firms and other Foreign Companies for a consideration collected in convertible foreign exchange would be qualified for export services under Export of Services Rules, 2005 or otherwise is no more res integra and has been settled by the Hyderabad Bench of the Tribunal in the appellant s own case CCCE ST, HYDERABAD-II VERSUS PRICE WATERHOUSE (VICE-VERSA) [ 2018 (11) TMI 32 - CESTAT HYDERABAD] where it was held that It is undisputed that the appellant herein rendered services to their overseas network entities as well as to their clients located outside India and the consideration for such services was collected inconvertible foreign currency. The findings of the adjudicating authority is that the services rendered by the appellant are in the form of auditing and accounting of various entities situated in India but had only forwarded the certificate to the foreign entities which is not service rendered outside India; it is also finding that the services are rendered to foreign clients, but performed wholly within India. Time Limitation - HELD THAT:- The dispute in this case involves interpretation of classification of service and eligibility for export of service and it has been held by the Hon ble Apex Court in the case of PADMINI PRODUCTS VERSUS COLLECTOR OF C. EX. [ 1989 (8) TMI 80 - SUPREME COURT] that when the matter involves interpretation of statutory provisions, extended period of limitation cannot be invoked. Further, the extended period cannot be invoked in the present case as there is no evidence on record to show that there is any fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of law or rules made thereunder with intent to evade payment of tax. Interest and penalty - HELD THAT:- When the demand of service tax itself is not sustainable, therefore, the question of interest and penalty does not arise. The impugned order is not sustainable in law and is set aside - appeal allowed.

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• 2024 (8) TMI 1336
  Classification of service - Construction of complex service or Works Contract service - scope of SCN - Time limitation - HELD THAT:- While the SCN demanded the Service Tax under the category of Works Contract service for the period 01.06.2007 to 31.03.2011, the Adjudicating Authority has confirmed the demand under the different category i.e., under the category of Construction of Residential Complex service and has also given some justification to come to this conclusion. This would amount to traversing beyond the scope of SCN. This will also amount to non-following of principles of natural justice. The Appellant was never put to notice that the demand is going to be confirmed under the category of Construction of complex service . They were issued notice seeking as to why the demand should not be confirmed under the category of Works Contract service . Therefore, they are defending the demand made under the category of Works Contract, without taking any defence on account of Construction of Complex service. The confirmed demand is not legally sustainable since the demand was confirmed under the category of Construction of Residential Complex service while the SCN was issued under the category of Works Contract service . The Tribunals have also been holding that no Service Tax is payable till 01.07.2010 irrespective of the category under which the service may fall - Appeal allowed. Time limitation - HELD THAT:- First of all, the Appellant was properly registered with the Department and they have been filing their Returns regularly. Their ST3 Returns are one of the relied upon documents while issuing the SCN. Further, the VAT Returns have been referred to in the SCN, which shows that they have filed their VAT Returns regularly. Thus, all the data with regard to their turnover was very much being shown in the Returns. Further, in order to clarify the issue as to whether Construction of Residential Complex service would be taxable or not, CBIC had issued various circulars between the period 2006 and 2012 - Hence, it can also be said to be as an issue of interpretation. In such circumstances, the Appellant cannot be fastened with the allegation of suppression - Accordingly, the confirmed demand for the extended period set aside on account of time bar also. Appeal disposed off.

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• 2024 (8) TMI 1335
  Classification of services - Management, Maintenance Repair Service or Works Contract Service (WCS) - appellant were providing services and were also using their own goods - short payment of service tax - denial of Cenvat Credit - GTA Services - penalties. Classification of services - Management, Maintenance Repair Service or Works Contract Service (WCS) - appellant were providing services and were also using their own goods - HELD THAT:- There are force in the Appellant s argument that no Service Tax was payable for the period till 31.05.2007 as held in catena of decisions. The Adjudicating Authority is required to verify the documentary evidence to the effect that the services would fall under the category of Works Contract service and once he is satisfied, the demands till 31.05.2007 should be dropped. In case of MMRS, the Appellant has also pleaded that even under this category, they would be eligible for tax exemption if the service is provided to Government. The Adjudicating Authority should give opportunity to the Appellant to make their submissions on this count also. Short payment of service tax - HELD THAT:- The Appellant submits that Rs.24,26,857/- along with interest of Rs.9,34,164/- has already been paid by them and appropriated by the Adjudicating Authority while passing the impugned order. In respect of the balance Rs.6,36,381/-, their pleading towards services being provided under Works Contract service for the period till 31.05.2007 is to be verified by the Adjudicating Authority and if it is found so, the demand has to be dropped. Denial of Cenvat Credit - HELD THAT:- The Adjudicating Authority should consider all the documents together and pass his Order accordingly. In respect of denial of Cenvat Credit of Rs.39,47,390/-, the Appellant has admitted that they are not in a position to provide any documentary evidence, whatsoever, for an amount of Rs.9,16,391/-. Therefore, the Appellant is directed to pay this amount along with interest thereon. The Appellant is directed to produce photo copies of the invoices in respect of the balance Cenvat Credit along with other corroborative evidence in the form of ledgers for having received the stocks and using the same for provision of taxable services. The Adjudicating Authority to pass considered decision after going through the documentary evidence placed before him. GTA Services - HELD THAT:- The Appellant s pleading is that out of demand of Rs.9,77,011/-, they have already paid Rs.8,06,767/-. The Appellant is required to pay interest on this amount and also provide evidence as to why the balance amount is not payable. The Adjudicating Authority to consider these facts and if any further amount is required to be paid for which the Appellant has not provided proper evidence, the balance amount towards GTA services should be recovered from the Appellant along with interest. Penalties - HELD THAT:- To a great extent, the Appellant has been able to prove that if the service happens to be falling under Works Contract service; that too prior to 31.05.2007, no Service Tax is required to be paid. Further, in many cases they have paid the Service Tax with or without interest. The Adjudicating Authority to consider the factual details and impose the penalty as per the statutory provisions. Appeal disposed off.

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• 2024 (8) TMI 1334
  Miscellaneous application seeking change of name of the Respondent - Scope of SCN - it is submitted that in the SCN in the present case there was no allegation for proposing demand on the appellant for services provided to HPCL under the head site formation and clearance, excavation and earthmoving and demolition - Violation of principles of natural justice - HELD THAT:- The SCN was issued to the appellant proposes to classify the demand under Commercial or Industrial Construction Service under Section 65(105)(zzq) of the Act, whereas in the impugned order the demand has been confirmed by changing the classification under the head Site Formation and clearance, excavation and Earthmoving and Demolition which cannot be done and hence the impugned order is bad in law. Secondly, it is undisputed that the services rendered by the appellant is classifiable under Works Contract Service as provide under Section 65(105)(zzzza) of the Finance Act, 1994 as it involves both supply of goods as well as service; once, it is not disputed, it is the works contract service then demand of service tax under site formation and clearance, excavation and earthmoving and demolition is not sustainable in law. The impugned orders are not sustainable in law and the same are set aside by allowing the appeals of the appellant with consequential relief - Appeal allowed.

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• 2024 (8) TMI 1333
  Classification of service - appellant had performed service in India and delivered clinical study report to their foreign client through E-mail, Courier or website - case of the department is that since the performance of service is in India and the clinical study was carried out on the goods supplied by the service recipient, therefore, the service of the appellant does not fall under the category of Export of Service in terms of Rule 4 of Place of Provision of Service Rules, 2012 - HELD THAT:- The appellant have carried out the clinical study on the drugs supplied by the foreign based service recipient. After carrying out the clinical study on the goods supplied by the service recipient the technical report thereof was supplied to the service recipient. The service recipient is located outside India. On the identical facts and the activity involved in the present case, various judgments have been passed - reliance can be placed in COMMISSIONER OF CENTRAL EXCISE PUNE-I VERSUS SAI LIFE SCIENCES LTD. [ 2016 (2) TMI 724 - CESTAT MUMBAI] where it was held that it can be safely said that the Research Development Service performed by the Appellant is export of service in terms of Rule 3 of Rules, 2012. Earlier also for the period July, 2012 to September, 2012, October, 2012 to December, 2012 and January, 2013 to March 2013, the said services were treated as export of services by the department and no relevant material has been placed on record to treat the same differently for the period in dispute. Therefore the Scientific and Technical Consultancy Services provided by the Appellant to DITC is to be treated as export of service. In the case of M/S FERTIN PHARMA RESEARCH DEVELOPMENT INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST, NAVI MUMBAI [ 2018 (10) TMI 1373 - CESTAT MUMBAI] the tribunal observed the appellants are eligible to cash refund of the accumulated Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004, except in relation to credit availed input services denied by the Learned Commissioner (Appeals) observing that necessary evidences in relation to Building maintenance charges were not produced to establish the nexus with the output service and secondly the rent-a-cab service since placed under the exclusion clause of the definition of input service after amendment to Rule 2(l) of the Cenvat Credit Rules, 2004 with effect from 1-4-2011. Thus, the activity of clinical trial on the drugs supplied by the foreign service recipient to the appellant amounts to export of service, hence, same is not liable to service tax - the impugned order is set aside - appeal allowed.

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• 2024 (8) TMI 1332
  Denial of abatement as per N/N. 32/2004-ST dated 03.12.2004 - benefit denied on the grounds that the invoices issued by the GTA operators did not carry an endorsement to the effect that CENVAT credit has not been availed - HELD THAT:- It is found that the condition laid down in the N/N. 32/2004 is understandably for the GTA Service providers, who pay service tax themselves. It is not applicable to the appellant who pays the service tax on GTA Services received on Reverse Charge basis. Therefore, the Department is reading beyond the scope of the Notification. Hon ble Apex Court in the case of M/S. SANDUR MICRO CIRCUITS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELGAUM [ 2008 (8) TMI 3 - SUPREME COURT] held that The issue relating to effectiveness of a Circular contrary to a Notification statutorily issued has been examined by this Court in several cases. A Circular cannot take away the effect of Notifications statutorily issued. In fact, in certain cases, it has been held that the Circular cannot whittle down the Exemption Notification and restrict the scope of the Exemption Notification or hit it down. In other words, it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed. The principle is applicable to the instant cases also, though the controversy is of different nature. The issue is no longer res integra being covered by a catena of judgments. Therefore, the impugned order cannot be sustained - the issue of limitation etc. not gone into as the appellants succeed squarely on merits. Appeal allowed.

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• 2024 (8) TMI 1331
  Applicability of Sr. No. 45 as as inserted on 01.04.2015 in the Mega Exemption N/N. 25/2012-ST dated 20.06.2012 - amount collected on account of vintage classic car collection w.e.f. 01.04.2015 - Department alleged that the appellant does not fall under the said entry for the reason that the space in the appellants premises for keeping the vintage car cannot be called as Museum covered under the said entry. Whether, after 01.04.2015 also, the appellant was still liable to pay service tax on the entry fee as the display of vintage car collection in appellant s hotel cannot be called as museum ? HELD THAT:- It is the settled principle of statute interpretation that the terms which have not been defined in a statute are to be understood in their ordinary or popular sense instead of being defined in technical sense. The adjudicating authorities below have relied upon the technical definition of Museum given by ICOM statutes adopted by 22nd General Assembly in Vienna, Austria on 24.08.2007. Support drawn from the decision of Hon ble Apex Court in the case of MSCO PVT. LTD. VERSUS UNION OF INDIA AND OTHERS [ 1984 (10) TMI 44 - SUPREME COURT] wherein it has been held that while construing a word in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or the statutory instrument understand it. The Hon ble Apex Court clarified that it is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. The said decision of Hon ble Supreme Court is sufficient to hold that the Adjudicating Authorities have committed an error while relying upon ICOM for the definition of word Museum as a building in which objects of historical etc., interest are stored or a place having an archive of objects. It is undisputed fact that the appellants were displaying historical/vintage cars in a specific earmarked area in their hotel - the amount collected as entry fee is towards admission to museum as is covered under Sr. No. 45 of the exemption notification number. The amount of entry fee is the fee collected for providing service as that of admission to the vintage car museum in the appellant s premises, hence, is clearly exempted unless entry no. 45 of the exemption notification. Hence, the demand with respect to the amount of service tax confirmed in this appeal vis- -vis entry fee to vintage car museum, the demand is held liable to be set-aside. To that extent, the findings in the order under challenge are liable to be set-aside. The order under challenge of M/s Lake Palace Hotels and Motels Private Limited set aside - appeal allowed.

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• 2024 (8) TMI 1330
  Levy of service tax - appellant s activity of charging market fee for using licenses to traders/agents/factory etc. - Jurisdiction of officials of the DGGSTI - HELD THAT:- This issue is no more res-integra. The Hon ble Supreme Court in the case of Krishi Upaj Mandi Samiti vs. Commissioner of Central Excise Service Tax [ 2022 (2) TMI 1113 - SUPREME COURT] and held The fact that, on and after 1-7-2012, such activity by the Market Committees is put in the Negative List, it can safely be said that under the 2006 circular, the Market Committees were not exempted from payment of service tax on such activities. At this stage, it is required to be noted that it is not the case on behalf of the Market Committees that the activity of rent/lease on shop/land/platform as such cannot be said to be service. However, their only submission is that the Market Committees are exempted from levy of service tax on such service/activity as provided under the 2006 circular, which as observed hereinabove has no substance. The adjudication is a quasi-judicial function of the departmental officers of the Central Board of Indirect Taxes and Customs. It is mandatory that a Show Cause Notice (SCN) is issued if the department contemplates any action prejudicial to the assessee. The SCN would detail the provisions of law allegedly violated and ask the noticee to show cause why action should not be initiated against him under the relevant provisions of the Act/Rules. Thus, an SCN gives the noticee an opportunity to present his case. It is noted that the SCN in the present case was issued by the Central Excise officer on 19.06.2014, which is well before the introduction of GST in India. Thereafter, the impugned order was passed in 2018, which was after the introduction of GST - Section 174 of the CGST Act 2017, unequivocally saved all rights, obligations, privileges and liabilities that were available under the old laws, which would continue in the new regime - Section 174 of the CGST Act 2017, unequivocally saved all rights, obligations, privileges and liabilities that were available under the old laws, which would continue in the new regime. It is noted that in the impugned order, the Commissioner (Appeals) has already upheld the demand for the normal period only. Therefore, this argument of the Counsel does not hold. The impugned order upheld - appeal dismissed.

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• Central Excise

• 2024 (8) TMI 1329
  Classification of goods - bins - to be classified under Tariff Sub-Heading 8474 90 or under Tariff Sub-Heading 7308 90? - Applicability of Rule 57U and Rule 57AH - HELD THAT:- The SCN was issued under Rule 57U and not under Rule 57AH. Admittedly, Rule 57U was omitted by the time the SCN was issued. This issue was never argued at any stage by either side nor had this Tribunal examined if Rule 57U existed at all while passing the final order remanding the matter to the Commissioner. Everyone including this Tribunal proceeded on the presumption that it had existed at that time. Even in the written submissions given to the Commissioner on 8.3.2021, the appellant did not raise this issue. After two years, on 26.4.2023, the Commissioner held a personal hearing when the appellant had appeared and made submissions. It does not appear that at any of these stages, the Commissioner had pointed out to the appellant that their case would be examined under Rule 57AH and not under 57U and had given then an opportunity to examine Rule 57AH and make submissions. Only in the discussions part of the impugned order, the Commissioner held that Rule 57U was already repealed and examined the case under Rule 57AH - there are no reason why the Commissioner did not point out that Rule 57U had not existed at the relevant time and therefore, he would be examining the case under Rule 57AH. Also, the new Rule 57AH increased the time limit from 6 months to one year and therefore, the liability of the appellant was increased in the impugned order behind the appellant s back without ever giving the appellant even an opportunity to defend itself. The SCN was issued under Rule 57U which was not existing at that time and the appellant was never given an opportunity defend against or were even put to notice that their case will be examined under a new Rule 57AH which increased their liability. The impugned order is set aside - appeal allowed.

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• 2024 (8) TMI 1328
  Eligibility for input Cenvat credit and its utilisation for payment of duty demanded on job worked goods - invocation of Extended period of limitation - levy of fines and penalties. Whether the Appellant is eligible to the input Cenvat credit and its utilisation for payment of duty demanded on job worked goods? - HELD THAT:- There is no evidence on record to show that the goods have been directly received by the Appellant on the directions of the principals. The Appellant (A1) has failed to comply with Rule 9(5) of CCR as they have failed to maintain proper records for the receipt, disposal, consumption and inventory of the inputs in which the relevant information regarding the value, duty paid and Cenvat credit taken and utilised, the persons from whom such inputs are procured is recorded and the burden of proof regarding the admissibility of Cenvat credit shall lie upon the manufacturer which is the Appellant (A1) in this case. It is a settled law that adjustment of Cenvat credit of inputs is permissible whenever demand is made by the Department on the final manufactured goods. The Appellant (A1) is eligible to avail Cenvat Credit on the inputs used in the manufacture of job worked goods provided the suppliers of these raw materials endorse the documents in favour of the Appellant (A1) and subject to verification of the duty paid nature of input invoices / documents / Bills of Entry, which were already submitted to the Adjudicating Authority. In paragraph 46.15 of the Order of Adjudicating Authority, it was mentioned that all the documents in five spiral bound booklets for examining the Appellant s eligibility for input Cenvat credit were sent to the Assistant Commissioner of Central Excise, Coimbatore-II division for conducting verification - As there is a considerable delay, verification of the documents submitted to be got completed within a period of 6 months from the date of communication of this order. Whether Extended Period is invokable or not considering the evidence and facts in this appeal? - HELD THAT:- The Appellants have not given the true picture of the activity carried out by them on job work. It is also to be noted that the Appellant (A1) has not paid service tax till the raising of the Audit objection in March 2012 though they have started job work production for the suppliers of raw materials from June, 2010. Neither they have paid excise duty nor service tax during this period. The details relating to manufacture of excisable goods on job work basis out of the raw materials supplied by the traders and non-payment of central excise duty thereon was not disclosed by the Appellant (A1) either in the ER-1 Returns filed or by service tax payment or in any other manner - Even, the conduct of appellant defies logic when they have not discharged the excise duty on job worked goods but were paying on its own production of identical goods. In view of the above detailed reasoning, it is held that larger period has been rightly invoked. Whether the imposed fines and penalties are justifiable or not? - HELD THAT:- There are no merit in submission of Shri Vikas Sanghrajka (A5), Executive Director of Appellant (A1) that they were under mistaken impression that job work activity undertaken by them would not be manufacturing activity when they have obtained registration and treating the identical activity as manufacture. He is well aware that there was no difference between the manufacturing activity in respect of their own goods and the job work done in respect of suppliers goods - As in charge of day to day activities of the company, he is accountable for deliberate and well planned contravention of the provisions of law in job work manufacture and clearance of the excisable goods without payment of duty. The statement of Smt. Libra, Director of Appellant (A1) to the effect that the company had made incorrect mention of the activity as cutting with an objective to limit duty liabiity supports wilful contravention of law to evade payment of applicable excise duty. Thus, he has played a crucial role in facilitation of removal of excisable goods manufactured on job work without payment of duty. The Appellants (A2-A4) had connived in the commission of offence of non payment of duty on the job worked goods and so are liable to penalty under the Rule 26 (1) of the Central Excise Rules, 2002 - however, the penalties imposed are on the higher side and to meet the ends of justice, the same are reduced. The appeals are partly remanded and partly allowed.

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• 2024 (8) TMI 1327
  Special Additional Excise Duty (SAED) levied as a Surcharge under Section 147 of the Finance Act 2002 - Additional duty of Excise (AED) levied as Road and Infrastructure Cess under Section 112 of the Finance Act 2018 - goods manufactured and exported by the Respondent viz. Reliance Industries Limited - rejection of refund application on the ground that SAED (Surcharge) and AED (Cess) were payable on MS, HSD and ATFwith effect from 1-7-2022 under the said Notification no.4/2022-CE dated 30-6-2022, Notification No.5/2022-CE dated 30-6-2022 and Notification no.10/2022-CE dated 30-6-2022. Whether the levy of special additional excise duty as surcharge under Section 147 of the Finance Act, 2002 and additional duty of excise levied as road and infrastructure cess under Section 112 of Finance Act, 2018 read with relevant Notifications Nos.04/2022-CE dated 30.06.2022, 05/2022-CE dated 30.06.2022, 10/2022-CE dated 30.06.2022 and 19/2022 dated 19.07.2022 in respect of SEZ unit is correct and if not whether the respondent are eligible for the refund of the duty which has already been paid by the respondent? HELD THAT:- Under both the Sections 147 and 112 of the Finance Act, 2002 and 2018 respectively, it is clear that both the duties are in addition to the duties of excise chargeable on such goods under the Central Excise Act. Therefore, these duties are in other words become a part of duties of excise chargeable on such goods in terms of Section 3 of the Central Excise Act, 1944. Moreover, sub section (3) of both the Sections 147 of the Finance Act, 2002 and Section 112 of Finance Act, 2018 clearly provide that the provision of Central Excise Act and the Rules made there under, shall as far as may be apply in relation to levy and collection the SAED and AED on the goods in question under that Act or those rules as the case for. In view of this clear position since the levy of SAED and AED under Section 147 and 112 of the Finance Act 2002 and 2018 respectively are in addition to the duties of excise chargeable on such goods under the Central Excise Act, the provision of relevant Section 3 of Central Excise Act, 1944 shall be statutorily invoked and applied in this case. From the Section 3 which is Parent Act for levy of Excise duty clearly provides that the duties of excise to be called as central value added tax shall be levied and collected on all excisable goods which are produced or manufactured in India. However, it clearly eschewed the goods produced or manufactured in Special Economic Zone. The levy of SAED and AED cannot be made in isolation in terms of Section 147 of the Act, 2002 and Section 112 of Finance Act, 2018 without applying the provision of Section 3 of the Central Excise Act as per the mandate given in sub Section (3) of Section 147 and Section 112 of the Finance Act, 2002 and 2018 respectively - in view of the clear statutory provision as reproduced above. In respect of goods manufactured or produced in special economic zones, no excise duty as well as SAED and AED is levied. It is a settled law that the subordinate legislation cannot overrule the primary legislation. The primary legislation is enacted by parliament and under the said legislation the executive power is given to make laws in order to implement and administer the requirements of the primary legislation. Such law is the law made by a person or body other than the legislature but with the legislature s authority. Article 13(3) of the Indian Constitution includes within the definition of law forms of subordinate legislation such as order, rule, regulation, notification. Therefore, the subordinate legislation in the present case i.e. Notification No.19/2022-CE dated 19.07.2022 which was issued contrary to the provision of Section 3 of Central Excise Act read with Section 147 and 112 of Finance Act, 2002 and 2018 respectively. Hence the same cannot prevail over the primary legislation - even though, the Notification No.19/2022- CE created the same is not binding for the reason that the same is not in consonance with primary legislations which is Section 3 of Central Excise Act, 1944 read with Section 147 of the Finance Act, 2002 and Section 112 of the Finance Act, 2018. This Tribunal has to give primacy to the primary legislation and not to the subordinate legislation. For levy under Section 147 and 112 of 2002 and 2018 Act respectively the taxable territory needs to be decided on the basis of Section 3 of Central Excise Act 1944 which excludes the territory of SEZ. Therefore as regard the taxable territory such exclusion shall apply mutatis mutandis for levy of SAED and AED under Section 147 of 2002 Act and 112 of 2018 of Finance Act. Similar issue has been considered in the respondent s own case by this Tribunal RELIANCE INDUSTRIES LTD. VERSUS C.C.E ST-CGST CE-RAJKOT [ 2024 (2) TMI 1419 - CESTAT AHMEDABAD] wherein, this Tribunal held that goods manufactured in the SEZ unit are not liable to said SAED ( surcharge ) AED (road and infrastructure cess) under Section 147 of Finance Act, 2002 and Section 112 of Finance Act 2018 respectively. From the plain reading of the Section 51 of SEZ Act, 2005, it makes clear that the provision of SEZ Act shall have overriding effect on any law or Act in respect of the provision which is inconsistent with the provision of SEZ Act. In the present case, the SEZ Act exempts all duties in respect of the goods manufactured in the SEZ whereas the Revenue contented that Section 147 of Finance Act 2002 and Section 112 of Finance Act, 2018 are independent Act under which the levy of SAED and AED are applicable on SEZ unit also. In this position, since the Section 147 of the Finance Act, 2002 and 112 of Finance Act, 2018 creating an inconsistency with the provision of SEZ Act then the provision of SEZ Act overrides the provision of Finance Act, 2002 and 2018. For this reason also, the Revenue s proposal for levy of SAED and AED on the respondent s SEZ unit is illegal and incorrect. The respondent was not liable for payment of SAED and AED being an SEZ unit. Hence the said duties so paid are refundable to the respondent along with interest, in accordance with law. As a result the revenue s appeal is dismissed.

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• CST, VAT & Sales Tax

• 2024 (8) TMI 1326
  Interpretation of provisions of the Maharashtra Municipal Corporation Act, 1949 (the Act) and the Maharashtra Municipal Corporation (Local Body Tax) Rules (the Rules) - Scope of the phrase disputed tax as appearing in Section 406 (8) of the Act - whether Petitioner is liable to pay Local Body Tax (LBT)? - HELD THAT:- The scheme of levy of LBT makes a distinction between levy of tax and interest and penalty. Rule 5 of the said rules provides for liability to pay LBT in certain cases and various sub-rules therein prescribes liability to pay LBT including any interest and penalty. Rule 27 of the said Rules provides for lump sum payment of LBT in case of registered dealer having small turnover and the LBT based on the turnover ranges from Rs. 2,000/- to Rs. 5,000/-. The provisions in the Act, the said Rules and Forms point to the fact that even the law makers wanted to indicate that tax, interest and penalty are distinct. If the legislature intended to make tax, interest and penalty as a pre-condition they would have simply stated disputed demand and not disputed tax . In Chennai Network Infrastructure Limited [ 2017 (4) TMI 1152 - BOMBAY HIGH COURT ] the issue that arose before Co-ordinate Bench of this Court was for filing an appeal under Section 406 of the Act for challenging the penalty imposed under Section 267-A of the said Act, whether the appellant is required to pay the said penalty as a condition precedent for entertaining appeal. It was the contention of the appellant therein that penalty is not a tax and Section 406 requires, as a condition precedent for entertaining appeal, payment of disputed tax and since the penalty imposed was not a tax, no amount is required to be paid. This Court rejected the contention of the appellant after analysing the provisions of Sections 128-A, 129 and 267-A which dealt with property taxes - the Court came to a conclusion that an appellant has to pay penalty amount for entertaining the appeal. In the present case the issue does not relate to property tax under Sections 128-A, 129 and 267-A of the Act nor it is the case made out by respondent in the impugned order that Section 406 (2) of the Act is applicable to petitioner. The issue raised in the appeal by petitioner is with respect to levy of LBT on entry of goods within the Municipal limits of respondents and the interest is charged on the premise that the demand made for the period 2015 to 2017 has not been paid and further penalty of Rs. 15,000/- is imposed under Rule 48 of the said Rules. The levy of LBT is governed by Section 127 of the Act read with the said Rules. Therefore, the provisions of Sections 128-A, 129 and 267-A are not applicable and are also not the subject matter of the appeal filed by petitioner. The impugned order dated 22nd February 2024 is hereby quashed and set aside and the matter is remanded for denovo consideration. The appellate authority shall dispose the appeal in accordance with law by giving a personal hearing, notice whereof shall be communicated atleast 5 working days in advance - Petition disposed off.

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• 2024 (8) TMI 1325
  Refusal of the 1st respondent in accepting the C Forms and F Forms produced by the petitioner - refusal on the ground that the assessment had been completed - HELD THAT:- The Hon ble Division Bench of the erstwhile High Court of Andhra Pradesh in the case of RAJESWARI STONE POLISHERS VERSUS STATE OF ANDHRA PRADESH [ 1982 (11) TMI 158 - ANDHRA PRADESH HIGH COURT] . The Hon ble Division Bench, after considering the proviso had held that the dealer can file the said C Forms at any time after making of the assessment as long as he is able to satisfy the authority about the sufficient cause why the C Forms could not be filed within time. This judgment was followed by another Hon ble Division Bench of the erstwhile High Court of Andhra Pradesh in the case of GODREJ AGROVET LTD. VERSUS COMMERCIAL TAX OFFICER, ELURU, WEST GODAVARI DISTRICT NOVARTIS HEALTH CARE PVT. LTD. (FORMERLY NOVARTIS NUTRITION INDIA PVT. LTD.) VERSUS COMMERCIAL TAX OFFICER, BENZ CIRCLE, VIJAYAWADA [ 2005 (10) TMI 516 - ANDHRA PRADESH HIGH COURT] . The Hon ble Division Bench, in the subsequent judgment, had also held that the assessing authority need not wait for the C Forms to be received before passing an assessment order, if there is a danger of limitation expiring for passing of such an assessment order. However, the assessing authority would have to consider any C Forms filed subsequent to the assessment order, provided the dealer is able to make out sufficient cause while such C Forms could not be filed within the time stipulated under Rule 12 (7) of the CST (R T) rules. The Hon ble Division Bench went on to hold that passing of an assessment order would not preclude the assessing authority from taking these into account and modifying the assessment order. A perusal of the assessment order would show that the objections raised by the petitioner, in relation to the arithmetical or clerical mistakes in the order should also be considered as a prima facie reading of the order shows that there are various discrepancies in the figures and such discrepancies can be construed to be arithmetical or clerical mistakes. This Writ Petition is disposed of directing the 1st respondent to consider the request of the petitioner to accept the C Forms and F Forms produced by the petitioner subject to the 1st respondent being satisfied that sufficient cause has been shown by the petitioner explaining the delay in filing these Forms.

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• 2024 (8) TMI 1324
  Clarification of the galvanized iron sheets - whether the Deputy Commissioner, could have refused deferment of hearing despite the said question being before this Court? - HELD THAT:- Under Section 14 (iv) of the CST Act, the various products of Iron Steel were sub-categorised into (i) to (xvi). The issue before the Hon ble Supreme Court in the case of STATE OF TAMIL NADU VERSUS PYARE LAL MALHOTRA [ 1976 (1) TMI 151 - SUPREME COURT] was whether a product, which is created or procured from another product within the same sub-category, can be treated commercially as a different product, whose sale is exigible to tax. The Hon ble Supreme Court replied in the negative - This entry under the Central Sale Tax, Act has now been shifted as the Entry 70 (vi) of the IV Schedule of the AP VAT Act. Entry 70 (vi) of the IV Schedule of the AP VAT Act includes sheets, hops, strips and skelp, which could be black or galvanished or hot and cold rolled or plain and corrugated. This would mean that corrugating plain sheets resulting in corrugated iron sheets or corrugated coil from iron or steel into sheets would not move any of the products out of the sub-entry. The view of the Calcutta High Court in the case of PHANINDRA NATH MANNA AND COMPANY VERSUS COMMERCIAL TAX OFFICER AND OTHERS [ 1973 (9) TMI 85 - CALCUTTA HIGH COURT] can also be taken into account. The Calcutta High Court while dealing with a similar issue had held In commercial parlance galvanised sheet includes both corrugated and plain sheets. The certification marks scheme formulated by the Indian Standard Institute for steel products shows that galvanised sheet includes corrugated and plain sheets. Such sheets after corrugation do not lose their character as iron sheets. Petition disposed off.

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• Indian Laws

• 2024 (8) TMI 1389
  Withdrawal of writ petition - HELD THAT:- There is no objection of the State - Withdrawal application is allowed. Writ petition is dismissed as withdrawn.

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• 2024 (8) TMI 1323
  Restrictive scope of appellate jurisdiction under Section 125 of the Electricity Act, 2003 - Applicability of the force majeure clause - Whether the extension of the Scheduled Commissioning Date was occasioned under the force majeure clause of the Power Purchase Agreement? - whether the reduction in tariff payable to the respondents is justified. HELD THAT:- The law on force majeure, specifically in the context of PPAs, has been comprehensively dealt with by this Court in Energy Watchdog v. Central Electricity Regulatory Commission [ 2017 (4) TMI 1385 - SUPREME COURT] . The Court delved into contractual jurisprudence on force majeure clauses and frustration of contracts. It held that Sections 32 and 56 of the Indian Contract Act, 1872 govern the law on force majeure. When the contract contains an express or implied force majeure clause, it is governed under Chapter III of the Contract Act, specifically Section 32. In such cases, the doctrine of frustration in Section 56 does not apply and the court must interpret the force majeure clause contained in the contract. It held that a force majeure clause must be narrowly construed. The entire dispute before the KERC and the APTEL revolves on a question of fact whether the respondents were negligent or not diligent in securing approvals and hence, is the delay in commissioning attributable to them. The KERC s appreciation of the evidence has led it to the conclusion that the delay in commissioning was due to the respondents delay in making the applications, despite the approval of the PPA. However, the APTEL has taken note of certain additional factors affecting the time taken to secure the approvals that were not considered by the KERC. These include the time taken by the government to provide the PTCL that is required for approval of land conversion, and the delay caused by the authority in evacuation approval - there is no error in the APTEL s approach, and it is reasonable in its reappreciation of evidence. The delay is not attributable to the respondents and that the force majeure clause is applicable, it rightly held that the extension of time under Article 2.5 is warranted and the commissioning of the project on 24.08.2017 is within the extended period of 24 months. Consequently, the APTEL also rightly held that there is no occasion for the imposition of liquidated damages under Articles 2.2 and 2.5.7 or for the reduction of tariff under Article 5.1 of the PPA - The APTEL has primarily decided a question of fact as to the attributability of the delay, and from the above, it is clear that the APTEL s findings are neither illegal nor unreasonable. There are no reason to interfere with the same. Appeal dismissed.

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• 2024 (8) TMI 1322
  Seeking release of export subsidy of Rs. 8,08,50,000/- - Respondent No. 2 submitted a report confirming that the Milk Powder exported by the Petitioner, i.e., 1617 metric tonnes, is out of the stock which was in existence on 30th June 2018 and hence the Petitioner was entitled to receive the export subsidy under the Government Resolution dated 31st July 2018 - HELD THAT:- It is observed that once a party like Indapur, who was similarly placed like the Petitioner, was in receipt of such subsidy, which is certainly in the nature of a State largesse, all attributes of reasonableness and fairness emanating from Article 14 of the Constitution of India would stare at the Respondents in similar treatment to be meted out to a person like the Petitioner who was identically placed. A different treatment being meted to the Petitioner would result in breach of the basic rights of the Petitioner of non-discrimination guaranteed to the Petitioner under Article 14 of the Constitution. The subsidy scheme in question is a welfare scheme and which was fully implemented and acted upon in the case of Indapur. Thus, no technical argument would prevent this Court from recognizing such Constitutional rights as conferred on the Petitioner as also recognized by the Scheme. So far as the judgements of the Supreme Court in the case of M/S. VISHAL PROPERTIES PVT. LTD. VERSUS STATE OF U.P. ORS [ 2007 (10) TMI 647 - SUPREME COURT] relied upon by the Respondents in the context of negative equality are concerned, they lay down the proposition that Article 14 is not meant to perpetuate an illegality. They further lay down that Article 14 provides for positive equality and not negative equality and the Courts are not bound to direct any authority to repeat any wrong action done by it earlier. There can be no dispute about the proposition of law laid down in these judgements. However, these two judgements are squarely distinguishable on facts in the present case. In the present case, on identical facts, this Court has directed release of payment of Export Subsidy to Indapur. This Court has done so on the basis that Indapur was legally entitled to the same and that there was no illegality involved in making payment of the said Export Subsidy to Indapur. Therefore, the question, of any illegality or negative equality, does not arise in the present case. Thus, this Court has directed release of payment of export subsidy to Indapur on the basis that Indapur was legally entitled to the same. The Respondents are directed to release in favour of the Petitioner the export subsidy amount of Rs.8,08,50,000/- within a period of six weeks from the date of this order - petition allowed.

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• 2024 (8) TMI 1321
  Seizure of huge quantity of fake Indian currency notes of Rs. 500/- denomination and the nature of the currency notes - ingredients under Section 489B of the Indian Penal Code present or not - HELD THAT:- In the case of HODA SK. VERSUS STATE OF WEST BENGAL [ 2020 (1) TMI 1695 - CALCUTTA HIGH COURT] , the Hon ble Division Bench of this court on an interpretation of the facts of the case in the background of the word possessing as used in the charge framed under Section 489B by the learned trial Court was displeased with the language as used in the charge and, as such, decided to acquit the appellant under Section 489B of the IPC. Although, it upheld the conviction under Section 489C of the IPC. In the case of DOLON SK. AND ORS. VERSUS STATE OF WEST BENGAL [ 2022 (2) TMI 1461 - CALCUTTA HIGH COURT] , the Hon ble Division Bench took into account the words traffic and otherwise trafficking in and compared the same with the charges which were framed therein, thereby, acquitting the appellant under Section 489B of the IPC and sentenced him to suffer imprisonment for the offence under Section 489C of the IPC. Here, it would be apposite to rely upon the findings of the Hon ble Division Bench in the judgment of JUBEDA CHITRAKAR VERSUS STATE OF WEST BENGAL [ 2019 (11) TMI 1836 - CALCUTTA HIGH COURT] , wherein while interpreting Section 489B of the IPC relying upon the judgment of Gujrat High Court as well as the Madhya Pradesh High Court, it was held that when an accused person is carrying sizeable quantity of fake currency notes on a public road or otherwise in a concealed manner, it would amount to active transportation of such currency notes at the time when the accused person is apprehended. As such, while no explanation is offered by the accused, when questioned, under Section 313 of the Code of Criminal Procedure. regarding the possession of the fake currency note, the burden of proof of facts within the knowledge of the person which is to be discharged in terms of Section 106 of the Evidence Act calls for an explanation. It is found from the factual circumstances that the appellant was at a public place being Dhuliyan Ferry Ghat, where he was found to be in possession of 71 pieces of FICN of Rs. 500/- denomination which were recovered from his waist. The burden of proof at this stage is upon the appellant to divulge regarding his personal knowledge or information relating to the manner he at least received the FICN. The concept of trafficking is not the only concept under Section 489B IPC. There are other terms which are also embedded in the said Section being sells to, or buys or receives from, any other person - As such the appellant had ample scope to explain as to how he obtained the FICN. The learned trial court in the charge has used the term you brought and for circulating . The said two phrases is enough to cover the meaning and interpretation as also the spirit incorporated under Section 489B IPC as there is no hard and fast rule that in the contents of charge, the specific words of the Section is to be used. Having considered that the incident is of the year 2013 and the appellant has already suffered almost 12 months in custody during the stage of investigation, trial and during the pendency of the appeal, the sentence of seven years so imposed in respect of the offence charged under Section 489B of the Indian Penal Code be reduced to five years of rigorous imprisonment and fine of Rs.10,000/-. The sentence in respect of Section 489C of the Indian Penal Code is also modified to a period of three years with fine of Rs.5000/-. The appellant is on bail. As such his bail bonds are cancelled. The appellant is directed to surrender before the learned trial court immediately - Appeal allowed in part by modifying the sentence without interfering with the order of conviction.

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