Issues: Whether SAD refund could be adjusted against a duty drawback demand that had not attained finality, and whether the adjusted refund was consequently payable with applicable interest.

Analysis: Section 142(a) of the Customs Act, 1962 permits adjustment towards recoverable dues, but a demand still capable of challenge does not constitute a final recoverable arrear. The drawback demand against which the SAD refund was appropriated was subsequently dropped in fresh adjudication. The settled principle applied was that refund cannot be adjusted against a demand that has not attained finality; following the dropping of the demand, the retained refund amount was required to be released.

Conclusion: Adjustment of the SAD refund against the non-final drawback demand was impermissible. The refund amount, with applicable interest in accordance with law, is payable to the assessee.

Issues: (i) Whether enhancement of assessable value and consequential duty demand were legally sustainable under the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007; (ii) Whether confiscation, redemption fine and penalty were sustainable for the alleged misdeclaration and non-compliance with BIS and packaged-commodity labelling requirements.

Issue (i): Whether enhancement of assessable value and consequential duty demand were legally sustainable under the Customs Act, 1962 and the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.

Analysis: Rejection of the declared transaction value under Rule 12 and redetermination under Rules 7 and 9 required material establishing that the importer had made an untrue declaration. The supplier accepted that men's undergarments had been loaded by mistake instead of the children's garments ordered by the importer. The import documents reflected the supplier's invoice, and no independent material established misdeclaration, suppression, wilful misstatement, or intent to evade duty by the importer. The excess goods could be cleared on payment of appropriate duty.

Conclusion: The value enhancement and the confirmed consequential duty demand were unsustainable and were set aside in favour of the assessee.

Issue (ii): Whether confiscation, redemption fine and penalty were sustainable for the alleged misdeclaration and non-compliance with BIS and packaged-commodity labelling requirements.

Analysis: In the absence of importer-side misdeclaration or intent to evade duty, confiscation under Sections 111(d), 111(l) and 111(m) and penalty under Section 112(a) could not rest on the supplier's bona fide wrong shipment. Mandatory declarations under the packaged-commodity regime could be affixed with permission before clearance for home consumption. The BIS non-compliance of the 4000-watt amplifiers nevertheless required their re-export, as the foreign supplier lacked compulsory BIS registration. The re-export request had been accepted by Customs.

Conclusion: The redemption fine imposed on releasable goods and the penalty were unsustainable and were set aside in favour of the assessee; the BIS-related re-export requirement and redemption fine concerning the amplifiers remained unaffected.

Final Conclusion: The enhanced demand and penal consequences arising from the bona fide supplier mix-up and curable labelling deficiency could not be sustained, while the separate regulatory treatment of the BIS-non-compliant amplifiers continued.

Issues: Whether, for quarterly refund claims of CENVAT credit relating to export of services, the limitation period runs from the end of the quarter in which the FIRC is received notwithstanding Notification No. 14/2016-C.E. (N.T.) dated 01.03.2016.

Analysis: Rule 5 of the CENVAT Credit Rules, 2004 permits refund calculated for the relevant period, while Clause 2 of Notification No. 27/2012-C.E. (N.T.) permits only one refund application for each quarter. Reckoning limitation separately from each FIRC receipt date would shorten the available period where FIRCs are received near the close of a quarter. The Larger Bench principle that the relevant date is the end of the quarter in which the FIRC is received for quarterly claims remains applicable after the amendment made by Notification No. 14/2016-C.E. (N.T.) dated 01.03.2016.

Conclusion: The refund claim was within limitation when reckoned from the end of the relevant quarters; rejection of the refund claim was unsustainable.

Issues: (i) Whether additional charges recovered for delayed payment of electricity bills are taxable as consideration for agreeing to tolerate an act or situation; (ii) Whether meter-testing charges constitute an independent taxable service or form part of distribution of electricity; (iii) Whether the extended period of limitation is invocable.

Issue (i): Whether additional charges recovered for delayed payment of electricity bills are taxable as consideration for agreeing to tolerate an act or situation.

Analysis: Section 66E(e) of the Finance Act, 1994 requires an express or implied agreement under which a party undertakes, for consideration, to tolerate an act or situation. A charge arising from breach of the consumer's obligation to pay the electricity bill by the due date, imposed to discourage default and compensate for delay, does not establish such reciprocal arrangement. The surcharge was also intrinsically connected with the billing and recovery mechanism for electricity distribution.

Conclusion: Delayed-payment additional charges or surcharge are not consideration for a declared service under Section 66E(e) of the Finance Act, 1994, in favour of the assessee.

Issue (ii): Whether meter-testing charges constitute an independent taxable service or form part of distribution of electricity.

Analysis: Meter testing is inseparable from measuring consumption, accurate billing, and the statutory distribution function. Under Section 66F(3) of the Finance Act, 1994, an activity naturally bundled with a principal service takes the tax treatment of the service giving the bundle its essential character. Separate recovery of a prescribed charge does not convert an ancillary meter-related activity into an independent taxable service. As distribution of electricity by a distribution utility falls within Section 66D(k), meter testing receives the same treatment.

Conclusion: Meter-testing charges are ancillary and naturally bundled with the non-taxable service of distribution of electricity under Section 66D(k) of the Finance Act, 1994, in favour of the assessee.

Issue (iii): Whether the extended period of limitation is invocable.

Analysis: The proviso to Section 73(1) of the Finance Act, 1994 requires fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax. The charges were collected under publicly available tariff orders and regulations and recorded in the accounts. The dispute involved statutory interpretation, and an earlier investigation and notice had already made the Department aware of the same activities for an overlapping period. No positive evidence of deliberate suppression or intent to evade tax was established.

Conclusion: The extended period under the proviso to Section 73(1) of the Finance Act, 1994 is not invocable, in favour of the assessee.

Final Conclusion: The disputed receipts are outside service-tax liability; consequently, no interest or penalty is recoverable.

Ratio Decidendi: A charge incidental to electricity distribution is not independently taxable where it is naturally bundled with that principal non-taxable service, and a default-related charge is not consideration for tolerating an act without a reciprocal agreement to tolerate it.

Issues: Whether the Joint Commissioner (Executive) could exercise revisional power under Section 56(1) without authorisation or delegation by the Commissioner.

Analysis: A jurisdictional objection goes to the root of the matter and may be raised at any stage, including in revision. The record did not disclose any notification, circular, statutory delegation, or authorisation by the Commissioner empowering the Joint Commissioner (Executive) to initiate revisional proceedings under Section 56(1).

Conclusion: The revisional proceedings initiated by the Joint Commissioner (Executive) lacked jurisdiction and were void ab initio; the issue was decided in favour of the assessee.

Issues: Whether the Revenue established sufficient cause for condonation of the delay in filing its income-tax appeal.

Analysis: Section 260A(2)(a) prescribes a 120-day period for filing an appeal, while Section 260A(2A) permits delayed admission only upon sufficient cause. Even after excluding the pandemic-related limitation period, an unexplained delay of 1116 days remained. The asserted administrative workload, difficulty in tracing records, and departmental pressure were unsupported and did not explain the further delay after the appeal papers had been finalised. The Revenue's conduct disclosed absence of due diligence and bona fides; a liberal approach to limitation does not extend to a lethargic, tardy, or unsubstantiated explanation for inordinate delay.

Conclusion: The delay was not condoned, as sufficient cause was not established.

Issues: Whether the one-year limitation for a refund of duty paid under provisional assessment begins from the date of the finalisation order or from the date on which that order is communicated to the person entitled to refund.

Analysis: Section 27(1B)(c) of the Customs Act, 1962 must be applied consistently with the principle that limitation for a remedy available to an affected person cannot commence before actual or constructive knowledge of the order giving rise to that remedy. Communication of the final assessment order is therefore necessary for computing limitation. Section 153 requires service through the prescribed modes, and mere despatch without proof of delivery does not establish communication. The burden to prove valid service lies on Revenue. The unrebutted postal evidence established receipt of the finalisation order on 10.06.2014, while Revenue produced no evidence of an earlier despatch or delivery.

Conclusion: The limitation under Section 27(1B)(c) commenced on communication of the finalisation order on 10.06.2014, and the refund claim filed within one year thereof was not barred by limitation.

Issues: Whether conversion of compulsorily convertible debentures into compulsorily convertible preference shares through a book entry, without receipt of funds in the relevant previous year, permits an addition of share premium under Section 68 of the Income-tax Act, 1961.

Analysis: Section 68 applies to an unexplained sum credited in an assessee's books for a previous year. The conversion of the debentures into preference shares during the relevant year was only a book entry. No funds were received by the assessee in that year, and the share premium entry did not represent a sum received during that previous year.

Conclusion: Addition of the share premium under Section 68 for the relevant assessment year was impermissible. The issue was decided in favour of the assessee and did not give rise to a substantial question of law.

Issues: Whether the appeal could continue after the appellant-company was taken up for liquidation.

Analysis: Rule 22 of the CESTAT Procedure Rules, 1982 provides for abatement where a company is being wound up unless a successor, liquidator, or other legal representative seeks continuance within the prescribed period, subject to extension for sufficient cause. The liquidation proceedings and appointment of an insolvency resolution professional attracted this rule.

Conclusion: Continuance of the appellate proceeding was unavailable in the absence of an application under Rule 22.

Issues: (i) Whether reassessment could be initiated to revisit the existence of a permanent establishment after a scrutiny assessment and the binding advance ruling; (ii) Whether the reassessment notice was barred by limitation in the absence of the assessee's failure to make full and true disclosure.

Issue (i): Whether reassessment could be initiated to revisit the existence of a permanent establishment after a scrutiny assessment and the binding advance ruling.

Analysis: The advance ruling classified the subscription receipts as business income rather than royalty and directed an inquiry into the existence of a permanent establishment. In the original scrutiny assessment, permanent-establishment-specific queries were raised, detailed replies were furnished, and the assessment was completed at the returned income. The absence of a detailed express finding in the assessment order could not justify reassessment to remedy the Assessing Officer's omission after undertaking that inquiry. Reopening on the same material amounted to an impermissible change of opinion and impaired finality of assessment.

Conclusion: Reassessment to revisit the permanent-establishment issue after the completed scrutiny inquiry was invalid.

Issue (ii): Whether the reassessment notice was barred by limitation in the absence of the assessee's failure to make full and true disclosure.

Analysis: After an assessment under Section 143(3), the first proviso to Section 147 permits action beyond four years only where income escaped assessment because of the assessee's failure to make full and true disclosure. The nature of the subscriptions and the role of the Indian agent were already disclosed and addressed during scrutiny; therefore, the requisite jurisdictional fact was absent. Further, the six-year period under Section 149(1)(b) expired on 31.03.2023, whereas the notice was issued on 28.04.2023.

Conclusion: The extended reassessment period was unavailable and the reassessment notice was time-barred.

Final Conclusion: The completed assessment could not be disturbed through the impugned reassessment proceedings.

Ratio Decidendi: Reassessment beyond four years after a scrutiny assessment is impermissible where material facts were fully disclosed and the proposed issue had already been inquired into, even if no express finding was recorded.

Issues: Whether the reassessment order under Section 148A(d) and notice under Section 148 were vitiated by curtailment of time to reply and non-consideration of the reply.

Analysis: Section 148A(b) of the Income-tax Act, 1961 afforded the assessee 30 days to furnish a response. The time was curtailed in practice to 15 days despite a timely request for further time, although the Assessing Officer had sufficient time remaining to consider the response. The reply was uploaded before the order under Section 148A(d) was made but was not considered, causing prejudice and violating principles of natural justice.

Conclusion: The order under Section 148A(d) and consequential notice under Section 148 were set aside, with a fresh decision to be made after considering the reply in accordance with law.

Issues: Whether uncorroborated loose sheets containing scribbled figures could validly form the sole basis for an addition towards undisclosed consideration for purchase of property.

Analysis: In an assessment pursuant to search, loose sheets containing scribbled figures, which do not constitute books of account, cannot by themselves establish undisclosed consideration. The figures were unsupported by material showing payment of cash or availability and deployment of funds beyond the consideration recorded in the registered sale deed. The settled requirement of corroborative incriminating material was not met.

Conclusion: The addition based solely on the uncorroborated loose sheets was unsustainable.

Issues: (i) Whether the 325-day delay in filing the appeal should be condoned; and (ii) Whether the four contested companies could be retained as comparables for determining the arm's length price.

Issue (i): Whether the 325-day delay in filing the appeal should be condoned.

Analysis: The COVID-19 outbreak and the location of key decision-makers outside India satisfactorily explained the delay. The explanation did not indicate mala fides.

Conclusion: The 325-day delay is condoned.

Issue (ii): Whether the four contested companies could be retained as comparables for determining the arm's length price.

Analysis: Transfer Pricing Comparability requires Data Reliability and Functional Comparability based on the relevant financial and functional information. One contested company lacked a relevant-year annual report and verifiable public functional disclosures; another performed broad, highly technical infrastructure-project services with Brand Intangibles; a further company undertook government-driven and diversified activities; and the remaining company failed the applied Employee Cost Filter.

Conclusion: None of the four contested companies can be included in the comparable set. Their inclusion is set aside, and the challenge to the transfer-pricing adjustment succeeds in favour of the assessee.

Final Conclusion: The arm's length price determination must exclude the four impugned comparables.

Ratio Decidendi: A transfer-pricing comparable lacking reliable contemporaneous financial and functional data, failing an applied quantitative filter, or being materially functionally dissimilar cannot be used to determine the arm's length price.

Issues: Whether reassessment initiated through a notice issued more than three years after the end of the relevant assessment year was valid when the approval was granted by the Principal Commissioner rather than the authority specified under section 151(ii).

Analysis: The consequential notice under section 148 was issued in July 2022, after expiry of three years from the end of assessment year 2016-17. Section 151, as amended, distinguishes cases based on whether more than three years have elapsed and mandates approval from the specifically designated higher authority under section 151(ii) in the latter category. Approval by the Principal Commissioner did not meet that mandatory jurisdictional safeguard. The conversion of an earlier notice under the old reassessment regime into deemed proceedings under section 148A(b) did not dispense with compliance with the statutory conditions, including competent sanction, for the consequential notice issued after the order under section 148A(d).

Conclusion: The notice under section 148 was invalid for want of approval from the competent authority under section 151(ii); consequently, the reassessment and assessment framed under sections 147 and 144B, including the addition under section 68, were set aside.

Issues: Whether penalty for concealment was sustainable where the assessee claimed knowingly inadmissible deductions in a revised return and filed the correct return only after detection.

Analysis: Section 271(1)(c) of the Income-tax Act, 1961 permits penalty where income is concealed. The revised return claimed excess deductions under Chapter VI-A despite the assessee's awareness that they were not allowable, resulting in an improper refund claim. The correct income was disclosed only after detection during survey proceedings and issuance of reassessment notice. The explanation that the tax consultant had misled the assessee did not displace the finding of conscious concealment.

Conclusion: The penalty for concealment under Section 271(1)(c) was validly imposed and sustained.

Issues: (i) Whether notice and an opportunity of hearing were duly afforded to the mortgagee bank in the benami adjudication; (ii) Whether the benami property mortgaged as collateral was liable to be released on the bank's claim of priority under SARFAESI.

Issue (i): Whether notice and an opportunity of hearing were duly afforded to the mortgagee bank in the benami adjudication.

Analysis: The bank's own recovery measures and its representation to the authorities established its knowledge of the pending adjudication. The statutory framework permits a person claiming an interest in the property to approach the Adjudicating Authority, including through addition as a party, and treats service on one of several persons holding property as valid in the circumstances specified by the Act. No prejudice resulted from the bank's non-participation, particularly as service of the notice and reference was recorded.

Conclusion: The plea of absence of notice and denial of hearing is rejected, against the appellant bank.

Issue (ii): Whether the benami property mortgaged as collateral was liable to be released on the bank's claim of priority under SARFAESI.

Analysis: Attachment under the benami regime is directed towards confiscation of property found to be benami, rather than recovery of a debt. Rights created to defeat the purposes of that regime are void. Accepting priority of a secured creditor over a benami property would enable evasion of confiscation through a subsequent mortgage. The bank possessed other mortgaged securities furnished by the borrower and guarantors and was required to pursue those securities first; if any dues remained unrecovered, it could invoke the statutory claim mechanism.

Conclusion: Release of the mortgaged benami property is declined, against the appellant bank.

Final Conclusion: The mortgage claim does not displace the confirmed benami attachment, and any unrecovered claim may be pursued through the available statutory mechanism.

Issues: Whether an appeal electronically filed beyond the outer condonable period under Section 61(2) of the Insolvency and Bankruptcy Code, 2016, solely because of a technical failure in the tribunal's e-filing system, could be treated as having been presented within time.

Analysis: Section 61(2) prescribes a mandatory thirty-day limitation period with a further condonable period of fifteen days, and does not empower the appellate tribunal to condone delay beyond that limit. However, limitation runs only when the forum is capable of receiving a bona fide filing. The registry report established that timely e-filing attempts were frustrated by OTP-delivery and backend failures in the e-filing system, without any negligence, laches, ignorance of law, or fault attributable to the appellant. The principle of actus curiae neminem gravabit, together with the principle reflected in Order VII Rule 6 of the Code of Civil Procedure, 1908, permits exclusion of the period during which the tribunal's system was non-functional and treatment of the first bona fide e-filing attempt as the date of presentation.

Conclusion: The statutory outer limit did not prevent exclusion of the period lost solely because of the tribunal's system failure; the appeal was required to be reconsidered by treating the bona fide initial filing attempt as the relevant date of presentation.

Issues: (i) Whether Section 6(3)(b) of FEMA applied to the 2006-2008 contraventions despite its later omission; (ii) Whether the foreign remittances and delayed or mismatched share allotments contravened the applicable FEMA Regulations and attracted civil penalties without proof of mens rea; (iii) Whether confiscation of the Barakhamba Road property under Section 13(2) of FEMA was warranted; (iv) Whether the individual directors were liable and whether the penalties imposed on the appellants required modification.

Issue (i): Whether Section 6(3)(b) of FEMA applied to the 2006-2008 contraventions despite its later omission.

Analysis: Section 6(3) was omitted through the Finance Act, 2015 only with effect from 15.10.2019. As the relevant foreign remittances and alleged breaches occurred between 2006 and 2008, the provision was operative when the contraventions arose.

Conclusion: Section 6(3)(b) of FEMA governed the relevant contraventions notwithstanding its subsequent omission, against the appellants.

Issue (ii): Whether the foreign remittances and delayed or mismatched share allotments contravened the applicable FEMA Regulations and attracted civil penalties without proof of mens rea.

Analysis: The foreign remittances were investment funds, yet the prescribed reports of receipt and share allotment were not furnished within the stipulated periods. Shares were also allotted to an entity other than the remitter, and the funds were deployed for acquisition of immovable property in a restricted real-estate sector. These acts breached Paragraphs 2, 8, 9(1)(A), and 9(1)(B) of Schedule I to Regulation 5(1) and the RBI Master Circular. Penalty under Section 13(1) is civil regulatory liability; its text does not require willful conduct, intention, or mens rea. Administrative difficulty, eventual regularisation, and absence of loss did not displace the established contraventions.

Conclusion: The corporate appellant committed the established FEMA contraventions and incurred civil penalty without any requirement to prove mens rea, against the corporate appellant.

Issue (iii): Whether confiscation of the Barakhamba Road property under Section 13(2) of FEMA was warranted.

Analysis: Section 13(2) authorises discretionary confiscation in addition to monetary penalty and requires that discretion to be exercised judiciously on the facts. A substantial part of the foreign remittances was used to acquire the property, while the remittance-and-share transaction and investment in the restricted sector were themselves non-compliant.

Conclusion: Discretionary confiscation of the property was justified, against the corporate appellant.

Issue (iv): Whether the individual directors were liable and whether the penalties imposed on the appellants required modification.

Analysis: No evidence established that the non-managing director was in charge of, or responsible for, the company's business when the contraventions occurred. Conversely, the managing director admitted a managerial role, disclosed the initial incorrect declarations concerning remittances, and did not establish that the contraventions occurred without his knowledge or despite due diligence. The monetary sanctions required reduction in the circumstances.

Conclusion: The penalty imposed on the non-managing director was set aside in her favour. The managing director remained personally liable, but his penalty was reduced to Rs. 5,00,000; the corporate appellant's penalty was reduced to Rs. 50,00,000.

Final Conclusion: Civil FEMA liability of the corporate appellant and the managing director remains, with reduced monetary sanctions and confiscation of the property, whereas the director not shown to be responsible for the company's affairs bears no personal penal liability.

Ratio Decidendi: A breach of a civil statutory obligation under Section 13(1) of FEMA attracts penalty once the contravention is established, without proof of mens rea unless the statute expressly makes guilty intention an ingredient.