Issues: (i) Whether the declared transaction value was liable to rejection under Rule 12 of the Customs Valuation Rules, 2007; (ii) Whether re-determination of assessable value under the Valuation Rules is legally sustainable; (iii) Whether demand of differential duty and interest is maintainable; (iv) Whether invocation of the extended period of limitation under Section 28(4) is justified; (v) Whether the imported goods were liable to confiscation under Sections 111(d) and 111(m); (vi) Whether penalties under Sections 114A and 114AA are sustainable.

Issue (i): Whether the declared transaction value was liable to rejection under Rule 12 of the Customs Valuation Rules, 2007.

Analysis: Evidence recovered from the importer's custody included parallel proforma invoices showing higher prices, electronic correspondence detailing price manipulation, blank signed letterheads facilitating fabrication, private diary entries of negotiated prices, and voluntary admissions recorded under Section 108 admitting dual invoicing and payment of differential consideration through non-banking channels. Electronic records are treated as admissible where corroborated by surrounding circumstances and admissions. The materials form an interlocking chain corroborating suppression of material facts and extra commercial consideration affecting declared value.

Conclusion: The declared transaction value was rightly rejected under Rule 12 read with Rule 3(2) and Section 14 of the Customs Act, 1962.

Issue (ii): Whether re-determination of assessable value under the Customs Valuation Rules, 2007 is legally sustainable.

Analysis: Sequential valuation methods permit recourse to the residual method where ordinary comparables or resale data are unreliable. Contemporaneous import data was tainted and therefore unsuitable as comparables. Parallel invoices and private records recovered from the importer and corroborated by admissions provided a reliable basis under Rule 9 for re-determination of value consistent with Section 14 principles.

Conclusion: The re-determination of assessable value using the residual method under Rule 9 is sustainable.

Issue (iii): Whether demand of differential duty and interest is maintainable.

Analysis: A valid re-determination of assessable value gives rise to differential duty; interest under Sections 28AA/28AB is compensatory and follows from short levy of duty without separate mens rea requirement.

Conclusion: The demand of differential duty and applicable interest is maintainable.

Issue (iv): Whether invocation of the extended period of limitation under Section 28(4) is justified.

Analysis: Extended limitation applies where there is suppression, fraud or wilful misstatement of material facts irrespective of openness of import clearance. Evidence of undisclosed extra commercial payments, fabricated documents and admissions establishes suppression not discernible at original assessments.

Conclusion: Invocation of the extended period under Section 28(4) is justified.

Issue (v): Whether the imported goods were liable to confiscation under Sections 111(d) and 111(m).

Analysis: Deliberate and systematic mis declaration of value renders goods liable to confiscation. Where goods seized and available, confiscation and the statutory option of redemption with a redemption fine are appropriate; where goods are no longer physically available, liability to confiscation subsists to the extent permissible in law.

Conclusion: Confiscation under Section 111(m) is sustainable and confiscation of seized goods and redemption option under Section 125 is upheld.

Issue (vi): Whether penalties under Sections 114A and 114AA are sustainable.

Analysis: Penalty under Section 114A is mandatory where fraud, wilful misstatement or suppression is found within the meaning of Section 28(4). Personal penalties under Section 114AA are sustainable where evidence, including admissible statements and corroborative documents, establishes knowledge and active involvement in use of false documents.

Conclusion: Penalties under Sections 114A and 114AA are sustainable.

Final Conclusion: The impugned order confirming rejection of declared value, re-determination of assessable value, demand of differential duty with interest, invocation of extended limitation, confiscation of liable goods, and imposition of penalties is upheld and the appeals are dismissed.

Ratio Decidendi: Where parallel invoices and corroborative documentary and electronic records are recovered from an importer's custody and are supported by voluntary admissions of dual invoicing and undisclosed extra commercial consideration, the declared transaction value may be rejected, the assessable value re determined by residual methods, extended limitation invoked for fraud or suppression, and consequential duty, confiscation and penalties lawfully imposed.

Outcome: The Special Leave Petition was dismissed and the interlocutory application(s), if any, stood disposed of.

Issues: (i) Whether the auction fee collected by the Tobacco Board constituted consideration for taxable service. (ii) Whether storage of unmanufactured tobacco attracted service tax under the category of storage and warehousing service. (iii) Whether demurrage charges collected for delayed lifting of tobacco were liable to service tax. (iv) Whether the extended period of limitation was invokable.

Issue (i): Whether the auction fee collected by the Tobacco Board constituted consideration for taxable service.

Analysis: The auction fee was levied under the statutory framework governing the Tobacco Board and was collected for services rendered in relation to regulated auction activity. Fee collected by a statutory authority in discharge of a mandatory function is not, by itself, consideration for a taxable service unless there is a clear element of commercial service. The Board's activity was regulatory and statutory in character, and the levy was a compulsory exaction connected with that function.

Conclusion: The auction fee did not constitute consideration for taxable service and the demand on that count failed in favour of the assessee.

Issue (ii): Whether storage of unmanufactured tobacco attracted service tax under the category of storage and warehousing service.

Analysis: The statutory definition of storage and warehousing excludes storage of agricultural produce. Unmanufactured tobacco was treated as agricultural produce within the relevant exemption/clarificatory framework. As the storage related to such excluded goods, the activity did not fall within the taxable service category.

Conclusion: Storage of unmanufactured tobacco was outside the taxable net and the issue was decided in favour of the assessee.

Issue (iii): Whether demurrage charges collected for delayed lifting of tobacco were liable to service tax.

Analysis: Demurrage was treated as a penal charge for delayed removal of goods, not as consideration for any service. Penal charges of this nature do not amount to taxable consideration, and the charges were not shown to represent a taxable service under the Finance Act, 1994.

Conclusion: Demurrage charges were not liable to service tax and the finding was in favour of the assessee.

Issue (iv): Whether the extended period of limitation was invokable.

Analysis: Since the demands on merits were held unsustainable, invocation of the extended period did not survive. In any event, the controversy was one of legal interpretation concerning statutory activities of a public authority, and the record reflected bona fide belief rather than wilful suppression or intent to evade tax.

Conclusion: The extended period of limitation was not invokable and the issue was decided in favour of the assessee.

Final Conclusion: The statutory levies and connected receipts in dispute were held not chargeable to service tax, and the consequential demand, interest, and penalties were not sustained.

Ratio Decidendi: Amounts compulsorily levied or collected by a statutory authority for discharge of statutory functions are not consideration for taxable service unless the Revenue establishes a distinct commercial service element; penal charges and receipts relating to excluded agricultural produce also fall outside the taxable net.

Issues: Whether exercising the option for reversal of Cenvat credit by intimating the Jurisdictional Range Superintendent as required under Rule 6(3A) of the Cenvat Credit Rules, 2004 is a substantive mandatory condition or a procedural requirement.

Analysis: Rule 6(3A) prescribes a procedure for calculation, provisional payment, final determination and intimation to the Superintendent in respect of Cenvat credit attributable to exempted goods and exempted services, and contains specific clauses dealing with particulars to be intimated, monthly provisional payment, annual finalisation, payment of interest and post-payment intimation. W.e.f. 01.04.2016 the Rule was amended by Notification No. 23/2016-CE(NT) to prescribe detailed formulae and interest rates. The requirement to furnish name, address, registration number, date of exercise of option and descriptions of inputs/goods/services are generally data already available to the department through statutory returns. Precedents recognising that reversal of credit effected before removal or prior to taking credit can amount to non-taking of credit were considered. Having regard to the nature of the particulars and the statutory scheme under Rule 6(3A), the intimation requirement is procedural in character and is not equivalent to the strict substantive conditions attached to exemption notifications issued under Section 5A of the Central Excise Act, 1944. However, correctness of the amount reversed and interest payable under the rule involves application of the formulae and rates in Rule 6(3A) (including the amended interest provisions) and requires verification of details submitted by the manufacturer to determine any balance payable.

Conclusion: The requirement to intimate the Jurisdictional Range Superintendent under Rule 6(3A) of the Cenvat Credit Rules, 2004 is a procedural requirement; the belated proportionate reversal already made by the respondent cannot be rejected solely for failure to file prior intimation. The matter is remitted to the Adjudicating Authority to verify correctness of the proportionate reversal and interest in accordance with Rule 6(3A) and to pass a remand order within eight weeks from submission of requisite details by the respondent.

Issues: Whether CENVAT credit was admissible on MS channels, MS angles, TMT bars, HRC plates, MS plates and electrodes used for fabrication and erection of capital goods in the factory, and whether the amendment to the input exclusion in Rule 2(k) of the Cenvat Credit Rules, 2004 by Notification No. 16/2009-CE(NT) dated 07.07.2009 could be applied retrospectively.

Analysis: The disputed goods were used for erection of structures and equipment supporting the assessee's manufacturing plant. The settled position applied by the Court is that steel items used as structural support for capital goods, where they are essential to the functioning of plant and machinery, fall within the eligibility for credit. The amendment introduced by Notification No. 16/2009-CE(NT) was held to operate prospectively, and therefore it could not govern the period from May 2007 to June 2009. Since the credit was examined on merits in favour of the assessee, the limitation issue was left unexamined.

Conclusion: CENVAT credit on the disputed MS structurals and allied items was admissible, and the retrospective denial based on the amended explanation was unsustainable.

Final Conclusion: The order denying credit was set aside and the assessee's appeal succeeded with consequential relief.

Ratio Decidendi: Structural steel and allied items used to fabricate and support capital goods essential to the manufacturing process are eligible for CENVAT credit, and an amendment excluding such items cannot be given retrospective effect unless the statute clearly so provides.

Issues: Whether an application under Section 11 of the Arbitration and Conciliation Act, 1996 was maintainable for appointment of an arbitrator when the dispute arose under the Special Economic Zones Act, 2005 and the statute itself provided the mechanism for reference to arbitration and appointment of the arbitrator.

Analysis: The special scheme under the Special Economic Zones Act, 2005 contemplates designated courts under Section 23 for civil disputes arising in a Special Economic Zone. In the absence of such designation, Section 42 provides for reference of disputes to arbitration, but the arbitrator is to be appointed by the Central Government under Section 42(2). Section 42(3) only makes the Arbitration and Conciliation Act, 1996 applicable to arbitrations conducted under the SEZ Act, subject to the Act itself and after the statutory mode of appointment is followed. The preconditions for invoking Section 11 of the Arbitration and Conciliation Act, 1996 were not satisfied, and the statutory power of appointment under the SEZ Act could not be displaced by resort to Section 11.

Conclusion: The application under Section 11 of the Arbitration and Conciliation Act, 1996 was not maintainable and was rejected.

Issues: (i) Whether show cause notices were issued prior to passing the impugned order under Section 73(9) of the Act; (ii) Whether the determination of tax and the documents attached to the summaries in FORM GST DRC-01 and GST DRC-07 can be treated as valid show cause notice and order respectively; (iii) Whether the impugned orders under Section 73(9) conform to Section 75(4) and principles of natural justice.

Issue (i): Whether show cause notices were issued prior to passing the impugned order under Section 73(9) of the Act?

Analysis: Section 73 confers power to issue a show cause notice in specified circumstances and contemplates a separate SCN and statement of determination. Rule 142 requires that a summary in FORM GST DRC-01 accompany notices issued under Section 73, but does not dispense with the requirement of issuing the primary SCN and the statement under Section 73(3). The record shows only summaries and attached determinations; no independently issued and duly authenticated SCN appears on the record.

Conclusion: No. A proper show cause notice under Section 73(1) was not issued prior to passing the impugned order.

Issue (ii): Whether the determination of tax and the documents attached to the summaries in FORM GST DRC-01 and GST DRC-07 can be treated as valid show cause notice and order respectively?

Analysis: A statement under Section 73(3) and an attached tax determination cannot substitute for a SCN under Section 73(1). Rule 26(3) requires electronic issuance with digital or e-signature for notices, certificates and orders; the attachments lack proper authentication by the Proper Officer. Precedents confirm that unsigned or unauthenticated documents lose legal efficacy and cannot be treated as valid SCNs or orders. Where a regulatory gap exists in demand and recovery chapters, Rule 26(3) authentication requirements apply by default to preserve validity.

Conclusion: The attached determinations and summaries do not constitute a valid show cause notice or lawful order; the attachments are not legally effective as SCNs or orders.

Issue (iii): Whether the impugned orders under Section 73(9) conform to Section 75(4) and principles of natural justice?

Analysis: Section 75(4) mandates an opportunity of hearing when a written request is made or when an adverse decision is contemplated. The summaries left the personal hearing fields blank and no personal hearing was afforded before passing the adverse order. Passing an adverse order without granting hearing where an adverse decision is contemplated defeats the statutory safeguard and violates natural justice.

Conclusion: The impugned orders do not conform to Section 75(4) and infringe principles of natural justice.

Final Conclusion: The impugned order is set aside for lack of a proper show cause notice, absence of required authentication, and failure to grant opportunity of hearing; respondents are permitted to initiate fresh proceedings in conformity with statutory requirements and subject to exclusion of the specified period from limitation computation.

Ratio Decidendi: A summary in FORM GST DRC-01 or an attached determination cannot replace a statutorily mandated show cause notice; notices, statements and orders under Section 73 must be issued by the Proper Officer and duly authenticated by digital or e-signature as required by Rule 26(3), and an opportunity of hearing must be afforded when an adverse decision is contemplated as required by Section 75(4).

Issues: (i) Whether show cause notices were issued prior to passing the impugned order under Section 74(9) of the Act? (ii) Whether the determination of tax and the order attached to the summary in Form GST DRC-01/DRC-07 can be treated as the Show Cause Notice and Order respectively? (iii) Whether the impugned orders under Section 74(9) comply with Section 75(4) and the principles of natural justice?

Issue (i): Whether show cause notices were issued prior to passing the impugned order under Section 74(9) of the Act?

Analysis: Section 74 prescribes circumstances and procedural requirements for issuance of a show cause notice and distinguishes between a show cause notice under subsection (1) and a statement under subsection (3). Rule 142(1)(a) requires that a summary in Form GST DRC-01 be served along with the notice issued under Section 74. A summary by itself does not discharge the statutory requirement of issuing a proper and separate show cause notice under Section 74(1).

Conclusion: No valid show cause notice under Section 74(1) preceded the impugned order; the summary alone did not satisfy the statutory requirement.

Issue (ii): Whether the determination of tax and the order attached to the summary in Form GST DRC-01/DRC-07 can be treated as the Show Cause Notice and Order respectively?

Analysis: The statute and rules differentiate between a statement of determination and a show cause notice; prior decisions of High Courts support that a summary or attached tax determination cannot substitute for a proper SCN. The attachment described as a tax determination lacks the formal attributes of an SCN required by Section 74(1) and therefore cannot qualify as the statutory show cause notice.

Conclusion: The attached determination of tax and the summary in DRC-01/DRC-07 do not amount to a valid show cause notice or a lawful substitute therefor.

Issue (iii): Whether the impugned orders under Section 74(9) comply with Section 75(4) and the principles of natural justice?

Analysis: Section 75(4) mandates an opportunity of hearing either on a written request by the person chargeable or when an adverse decision is contemplated. Form GST DRC-01 provides fields for personal hearing details; marking those as "NA" while contemplating adverse orders renders the second limb of Section 75(4) ineffective. A hearing is a statutory safeguard and a requirement of natural justice when an adverse decision is contemplated, and passing an adverse order without granting such an opportunity contravenes the statutory mandate and principles of natural justice.

Conclusion: The impugned orders failed to comply with Section 75(4) and violated principles of natural justice.

Final Conclusion: The impugned order dated 26.11.2025 is set aside for lack of a proper show cause notice and for denial of the mandated opportunity of hearing; respondents are permitted to initiate fresh proceedings under Section 74 subject to the limitation adjustments directed.

Ratio Decidendi: A summary in Form GST DRC-01 or an attached statement of tax determination cannot substitute for a formal show cause notice required under Section 74(1); additionally, Section 75(4) requires that a hearing be granted whenever an adverse decision is contemplated, and failure to provide such hearing vitiates the resulting order.

Issues: (i) Whether Show Cause Notices were issued prior to passing the impugned order under Section 73 of the Act; (ii) Whether the determination of tax and the order attached to the summaries in FORM GST DRC-01 and GST DRC-07 can be treated as the Show Cause Notice and Order respectively; (iii) Whether the impugned orders under Section 73(9) conform to Section 75(4) and the principles of natural justice.

Issue (i): Whether Show Cause Notices were issued prior to passing the impugned order under Section 73 of the Act.

Analysis: Section 73 prescribes circumstances and the manner in which a show cause notice and related statement must be issued; subsections require issuance of a SCN distinct from a statement of determination. Rule 142(1)(a) requires a summary in FORM GST DRC-01 in addition to the SCN and the statement. The statutory scheme thereby distinguishes between a primary SCN and a supplementary summary.

Conclusion: No valid Show Cause Notice, as required under Section 73, was issued prior to passing the impugned order.

Issue (ii): Whether the determination of tax and the order attached to the summaries in FORM GST DRC-01 and GST DRC-07 can be treated as the Show Cause Notice and Order respectively.

Analysis: The statement of determination and attachments to the summary do not satisfy the statutory requirements for a SCN under Section 73(1). Rule 26(3) prescribes electronic authentication by the proper officer for notices and orders; lacking the mandated authentication, the attachments lack legal efficacy. Rule 142(1)(a) shows the summary is supplementary and not a substitute for primary documents. Authorities applying these requirements have held unsigned or unauthenticated attachments invalid.

Conclusion: The determination of tax and the attached documents in the summaries cannot be treated as a valid Show Cause Notice or Order.

Issue (iii): Whether the impugned orders under Section 73(9) conform to Section 75(4) and the principles of natural justice.

Analysis: Section 75(4) mandates an opportunity of hearing where an adverse decision is contemplated regardless of whether a written request is made. The summaries filed left hearing details blank and no personal hearing was granted before passing adverse orders. Passing adverse orders without granting the mandated hearing undermines the statutory safeguard and principles of natural justice.

Conclusion: The impugned orders are not in conformity with Section 75(4) and violate principles of natural justice.

Final Conclusion: The impugned order is set aside for want of a valid show cause notice, for lack of required authentication, and for contravention of the hearing mandate under Section 75(4); respondents are permitted to initiate fresh proceedings under Section 73, subject to exclusion of the period specified for limitation computation.

Ratio Decidendi: A summary in FORM GST DRC-01/DRC-07 is supplementary and cannot substitute a properly issued and duly authenticated show cause notice under Section 73; notices, statements and orders under Section 73 must be issued by the proper officer and authenticated in accordance with Rule 26(3) to be valid, and an opportunity of hearing must be afforded when an adverse decision is contemplated under Section 75(4).

Outcome: The application for condonation of delay was rejected and the special leave petition was dismissed as time barred.

Issues: Whether the penalty of Rs. 40,000/- imposed under Section 272A(1)(d) of the Income-tax Act, 1961 survives where the underlying quantum addition and consequential penalty (under Section 271AAC(1) of the Income-tax Act, 1961) have been deleted by the appellate authority.

Analysis: The Tribunal examined the sequence of orders: the quantum addition treated as unexplained money and the consequential penalty under Section 271AAC(1) were deleted by the appellate authority. The Tribunal considered whether a penalty levied under Section 272A(1)(d) can subsist when the foundational addition and the related penalty have been set aside, taking into account the legal connection between a primary assessment determination and consequential penalties. The Tribunal noted that the deletion of the quantum and the deletion of the consequential penalty undermine the basis for the separate penalty under Section 272A(1)(d), making the latter unsustainable in the facts of the case.

Conclusion: The penalty of Rs. 40,000/- imposed under Section 272A(1)(d) of the Income-tax Act, 1961 is deleted; the appeal is allowed in favour of the assessee.

Issues: (i) Whether the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961 for claiming and carrying forward losses not allowable under the Act can be sustained where the assessee claimed such losses allegedly due to technical/system reasons and asserted absence of mala fide intention.

Analysis: The issue involves application of Section 271(1)(c) of the Income-tax Act, 1961 for furnishing inaccurate particulars of income by claiming carried forward losses that the Assessing Officer held were not allowable under the statutory provisions governing carry forward and set off (including Sections 72, 73, 73A and Section 80IA; the timing of return filing under Section 139(4) and assessment under Section 143(3) and revision under Section 263 are relevant factual and legal context). The appellate authority examined whether the claim of loss was made with bona fide belief or was false/mala fide, having regard to the department's processing/system mechanics relied upon by the assessee and the jurisprudence that mens rea is not a statutory requirement but bona fide belief and disclosure may negativate penalty in appropriate cases. The Tribunal reviewed the Assessing Officer's finding that the claimed brought forward losses were not allowable under the Act and thus amounted to furnishing inaccurate particulars, and concluded that the misclaim was not bona fide or otherwise defensible on the facts before it.

Conclusion: The penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961 for furnishing inaccurate particulars of income in respect of wrongly claimed brought forward losses is sustained; the appellate order deleting the penalty is set aside and the Assessing Officer's penalty order is restored in favour of the Revenue.

Ratio Decidendi: Where an assessee claims brought forward losses that are not allowable under the Income-tax Act and such claim constitutes furnishing of inaccurate particulars of income, penalty under Section 271(1)(c) is sustainable notwithstanding assertions of technical/systemic error, unless a bona fide belief or disclosure is established that negates the inaccuracy or mala fide character of the claim.

Issues: (i) Whether relief under Section 89(1) of the Income-tax Act, 1961 claimed by the assessee can be denied on the technical ground of non-filing of Form 10E before filing the return; (ii) Whether the addition of Rs.1,12,080/- on account of discrepancy between Form 26AS and the salary disclosed by the assessee is sustainable.

Issue (i): Whether relief under Section 89(1) of the Income-tax Act, 1961 can be denied for technical non-filing of Form 10E.

Analysis: The tribunal examined the assessment record and the calculation of relief extracted in the assessment and appellate orders. The tribunal considered that the relief computation was available and that the denial was based solely on the technical omission of filing Form 10E within the stipulated timeframe. The tribunal found that the substantive entitlement to relief was established on the materials before the assessing officer and commissioner (appeals).

Conclusion: Relief under Section 89(1) of the Income-tax Act, 1961 is allowed in favour of the assessee; the technical non-filing of Form 10E does not preclude grant of the relief.

Issue (ii): Whether the addition of Rs.1,12,080/- for discrepancy between Form 26AS and the salary disclosed by the assessee is justified.

Analysis: The tribunal found that the matter requires verification of evidence, including Form 26AS and documents filed by the assessee, and that the assessing officer should examine those materials after affording the assessee a reasonable opportunity of hearing.

Conclusion: The issue is restored to the assessing officer for fresh adjudication after taking into account the evidence and Form 26AS and after providing the assessee an opportunity of hearing; decision on this issue is not in favour of either party at this stage.

Final Conclusion: The appeal is partly allowed: relief under Section 89(1) is granted to the assessee and the addition relating to discrepancy with Form 26AS is remitted to the assessing officer for reconsideration with opportunity of hearing.

Ratio Decidendi: Procedural non-compliance in filing Form 10E does not automatically bar substantive relief under Section 89(1) of the Income-tax Act, 1961 where the entitlement and computation of relief are otherwise established; discrepancies between Form 26AS and return must be examined by the assessing officer after allowing the assessee a reasonable opportunity of hearing.

Issues: Whether the appeal should be restored to the file of the learned CIT(A) for fresh adjudication and an opportunity of hearing in view of the ex parte appellate order and alleged non-consideration of the Departmental Valuation Officer report.

Analysis: The assessee challenged the ex parte order of the learned CIT(A) and contended that the DVO valuation dated 27.09.2024 and the contention that the stamp duty value falls within the tolerance limit were not considered by the authorities. The ITAT noted that the appellate order was passed ex parte after the assessee failed to appear and that no documentary evidence was placed before the Bench during hearing. Balancing the absence of representation with the requirement of fair hearing, the Tribunal observed that the non-consideration of material valuation evidence and the ex parte disposal warrant another opportunity to the assessee to place material before the CIT(A). The Tribunal therefore found it appropriate in the interest of natural justice to direct fresh adjudication by the learned CIT(A) and to afford a reasonable opportunity of hearing, while restoring the matter to the file of the CIT(A) for a speaking and reasoned order.

Conclusion: The appeal is restored to the file of the learned CIT(A) for fresh consideration and the assessee shall be afforded a reasonable opportunity of hearing; the ITAT allowed the appeal for statistical purposes.

Issues: Whether the addition of Rs. 39,31,428 made under Section 56(2)(x)(b) of the Income-tax Act, 1961 is sustainable where the sale deed of an immovable property was subsequently registeredly cancelled and the consideration returned.

Analysis: The Tribunal noted the undisputed facts that the purchase transaction evidenced by a sale deed dated 27.11.2019 was subsequently registeredly cancelled by a registered cancellation deed dated 26.09.2022 and that the assessee's share of the sale consideration was repaid as recorded in the cancellation deed. The Tribunal observed that the Commissioner of Income Tax (Appeals) in co-owner cases had examined the registered cancellation deed and deleted additions under Section 56(2)(x) where the purchase transactions had been cancelled and consideration returned. Considering the registered cancellation of the sale deed and restitution of consideration, the circumstances for treating the differential between stamp valuation and declared consideration as taxable deemed income under Section 56(2)(x)(b) did not subsist.

Conclusion: The addition of Rs. 39,31,428 under Section 56(2)(x)(b) of the Income-tax Act, 1961 is not sustainable in view of the registered cancellation of the sale deed and repayment of consideration; the appeal is allowed in favour of the assessee.

Issues: (i) Whether the benefit of Notification No. 45/2005-Customs dated 16.05.2005 (exemption from whole of Special Additional Duty) is available for goods cleared from FTWZ/SEZ to DTA by way of stock transfer; (ii) Whether the adjudged demand invoking the extended period of limitation is sustainable where there is no proven suppression of facts.

Analysis: The Tribunal examined prior coordinated decisions addressing the scope of Notification No. 45/2005-Customs and found that the Notification exempts goods ''cleared from a SEZ'' without qualifying the mode of clearance; the proviso applies only where the goods, when sold in the DTA, are exempted by the State Government from sales tax/VAT. The Tribunal noted consistent precedents holding that stock transfers to DTA units, where VAT liability is not extinguished by state exemption, fall within the scope of the Notification. The Tribunal further examined communications and administrative practice, including directions and minutes indicating that specified officers and FTWZ/SEZ authorities accepted the stock transfer mechanism and related certifications. On limitation, the Tribunal analysed the timing of show cause notices vis-a -vis the statutory limitation period in force for the relevant import period and the absence of any established wilful suppression or collusion by the appellants that would justify invocation of the extended period under Section 28(4) of the Customs Act, 1962. The Tribunal relied on authorities holding that when imports are assessed by SEZ/FTWZ customs officers and the issue is interpretative of a notification, extended limitation cannot be invoked in absence of suppression of facts.

Conclusion: The Tribunal concluded that the demand raised by invoking the extended period of limitation is time-barred in the absence of proven suppression of facts and, applying consistent Tribunal and Supreme Court rulings on identical facts, set aside the adjudication order confirming duties, confiscation and penalties; the appeals are allowed in favour of the appellants.

Ratio Decidendi: Where clearances from SEZ/FTWZ to DTA are by way of stock transfer and the goods are not exempted from sales tax/VAT by the State, Notification No. 45/2005-Customs covers such clearances and an extended period for demand cannot be invoked absent proven suppression or wilful misstatement.