Issues: Whether the extended period of limitation could be invoked for recovery of service tax from a subcontractor where conflicting decisions had created uncertainty about the subcontractor's tax liability after payment of tax by the main contractor.

Analysis: The substantive tax liability of a subcontractor stood settled by the Larger Bench decision. However, prior conflicting Tribunal decisions had generated genuine uncertainty on whether a subcontractor was independently liable where the main contractor had paid service tax. This acknowledged confusion supported the appellant's bona fide belief and precluded invocation of the extended limitation period under Section 73(1) of the Finance Act, 1994. The normal limitation period remained unaffected.

Conclusion: The extended-period demand and the penalty under Section 78 of the Finance Act, 1994, were set aside; the demand for the normal period and the penalty under Section 72 of the Finance Act, 1994, were sustained. The issue was decided partly in favour of the assessee.

Issues: (i) Whether the relevant date for limitation of refund of accumulated CENVAT credit attributable to export of services is the date of the export invoice or the last day of the quarter in which foreign exchange is received; and (ii) Whether refund of CENVAT credit can be denied solely because the invoices relate to unregistered premises.

Issue (i): Whether the relevant date for limitation of refund of accumulated CENVAT credit attributable to export of services is the date of the export invoice or the last day of the quarter in which foreign exchange is received.

Analysis: Rule 5 of the CENVAT Credit Rules, 2004, read with Notification No. 27/2012-C.E. (N.T.) dated 18.06.2012, governed the refund. Although Section 11B of the Central Excise Act, 1944 applied to such refund claims, it did not prescribe a specific relevant date for export of services. The applicable principle fixed the relevant date as the last day of the quarter in which the export proceeds were received in foreign exchange. The date of the export invoice could not invariably be adopted, and the prospective character of the subsequent notification did not displace that principle.

Conclusion: The one-year limitation is to be reckoned from the last day of the quarter in which foreign exchange is received, and not from the date of the export invoice. The issue is decided in favour of the assessee.

Issue (ii): Whether refund of CENVAT credit can be denied solely because the invoices relate to unregistered premises.

Analysis: Rule 5 of the CENVAT Credit Rules, 2004, did not make registration of the premises a prerequisite for refund of unutilised CENVAT credit attributable to exported services. The requirement concerning the jurisdictional authority for filing the refund application could not operate as a prohibition on refund merely because the premises from which services were exported were unregistered. The jurisdictional High Court ruling on this point was binding.

Conclusion: Refund cannot be denied merely because the invoices pertain to unregistered premises. The issue is decided in favour of the assessee.

Final Conclusion: The limitation objection based on the export-invoice date and the objection based solely on non-registration of premises cannot defeat the refund claim.

Issues: (i) Whether service tax on construction of the residential complex was sustainable under Construction of Residential Complex Service; (ii) Whether receipts accounted for as sub-contract and petty job receipts were liable to service tax under the same category; and (iii) Whether the demand under Renting of Immovable Property Service was sustainable.

Issue (i): Whether service tax on construction of the residential complex was sustainable under Construction of Residential Complex Service.

Analysis: The statutory definition of a residential complex required proof that the prescribed conditions, including the number of dwelling units, were satisfied. The material did not establish that the additional units were constructed by, or attributable to, the appellant. Further, the Explanation inserted in Section 65(105)(zzzh) with effect from 01.07.2010 could not be retrospectively applied to construction undertaken before that date. The contracts were composite contracts involving goods and services; such contracts could not be taxed under the construction-service categories, which applied to services simpliciter.

Conclusion: The construction-service demand was unsustainable, in favour of the assessee.

Issue (ii): Whether receipts accounted for as sub-contract and petty job receipts were liable to service tax under the same category.

Analysis: The receipts were treated as consideration for construction services without establishing their precise nature or that they represented independently taxable services simpliciter. The absence of documents from the appellant did not displace the Department's obligation to prove the taxable service and its legal basis. The reasoning applicable to composite works contracts also precluded their taxation under the construction-service category.

Conclusion: The demand on sub-contract and petty job receipts was unsustainable, in favour of the assessee.

Issue (iii): Whether the demand under Renting of Immovable Property Service was sustainable.

Analysis: Commercial letting alone did not establish the amount of tax payable. The eligibility for small service provider exemption, year-wise rental receipts, and the asserted tax payment on later receipts required verification. The allegations were not supported by sufficient evidence or cogent rebuttal of these matters; consequently, the evidentiary benefit enured to the appellant.

Conclusion: The demand under Renting of Immovable Property Service was unsustainable, in favour of the assessee.

Final Conclusion: The construction-related and rental demands lacked a sustainable legal and evidentiary basis, and the associated penalties could not survive.

Issues: (i) Whether sewage and drainage pumps were eligible for the concessional duty rate under Entry No. 235 of Notification No. 12/2012-C.E. dated 17.03.2012; (ii) Whether the earlier audit objection or the principle of res judicata precluded Revenue from denying the concessional rate; (iii) Whether the penalty imposed for availing the concessional rate was sustainable.

Issue (i): Whether sewage and drainage pumps were eligible for the concessional duty rate under Entry No. 235 of Notification No. 12/2012-C.E. dated 17.03.2012.

Analysis: Entry No. 235 grants the concessional rate only to power-driven pumps primarily designed for handling water. As the expression "water" is undefined, it was construed in its common and commercial sense as clean water, and not as sewage or drainage water. A claimant for a concessional notification must establish clear compliance with its conditions. The material showed that sewage and drainage pumps had a different design and manufacturing process from pumps for handling water; the engineer's certificate only stated that the pumps could also handle clean water and did not establish design similarity.

Conclusion: Sewage and drainage pumps were not eligible for the concessional rate under Entry No. 235; the differential duty and applicable interest were rightly sustained, against the assessee.

Issue (ii): Whether the earlier audit objection or the principle of res judicata precluded Revenue from denying the concessional rate.

Analysis: The audit objection was neither implemented through adjudication nor accepted by the assessee, which continued to pay duty at the full rate until March 2016. It therefore did not constitute a concluded determination capable of binding Revenue. Further, res judicata does not apply to distinct tax periods in the manner asserted, and a different position may be adopted where the prior view is not a binding final decision.

Conclusion: The earlier audit objection did not bar Revenue from denying the concessional rate, against the assessee.

Issue (iii): Whether the penalty imposed for availing the concessional rate was sustainable.

Analysis: The assessee had initially paid duty at the full rate and began claiming the concession after the audit objection. Revenue subsequently reversed its position and demanded differential duty. These circumstances did not disclose evidence warranting the penalty retained by the appellate authority.

Conclusion: The penalty was unsustainable and was set aside, in favour of the assessee.

Final Conclusion: The differential duty together with interest remains enforceable, while no penalty is exigible.

Ratio Decidendi: A claimant for a concessional excise notification must establish strict satisfaction of its conditions, and an undefined product expression is to be understood in its common-parlance meaning.

Issues: (i) Whether the claimed transitional input tax credit attributable to input services, exceeding the closing balance reflected in the ER-1 and ST-3 returns, required verification. (ii) Whether the notice under section 74(1) could be sustained on the alleged wilful misstatement or suppression of facts.

Issue (i): Whether the claimed transitional input tax credit attributable to input services, exceeding the closing balance reflected in the ER-1 and ST-3 returns, required verification.

Analysis: Section 140(1) permits carry-forward of eligible credit under the existing law. The difference between the credit declared in TRAN-1 and the balance reported in the pre-GST returns required verification against the relevant records before entitlement could be determined.

Conclusion: The transitional credit claim is to be verified by the Proper Officer/Adjudicating Authority through a reasoned order.

Issue (ii): Whether the notice under section 74(1) could be sustained on the alleged wilful misstatement or suppression of facts.

Analysis: Invocation of section 74(1) requires material establishing fraud, wilful misstatement, or suppression of facts with a deliberate intent to evade tax. Mere incorrect information or an ordinary non-declaration does not by itself establish those elements. No investigation or evidence establishing such deliberate intent was on record.

Conclusion: The notice issued under section 74(1) was not sustainable, in favour of the assessee.

Final Conclusion: The transitional-credit claim remains subject to factual verification, but the fraud-based notice cannot be maintained.

Ratio Decidendi: An incorrect declaration, without material evidence of a deliberate intent to evade tax, does not establish wilful misstatement or suppression of facts for invoking section 74(1).

Issues: Whether the extended period of limitation could be invoked on an allegation of suppression of facts.

Analysis: The differential demand arose from an audit-based verification of the assessee's books of account and invoices, with a prior departmental communication quantifying the liability. The record disclosed no material establishing deliberate suppression of facts or an intent to evade tax. Mere delayed payment and detection upon scrutiny of accounts were insufficient to invoke the extended period of limitation. A show-cause notice issued beyond the normal limitation period raises a jurisdictional challenge and cannot sustain the demand.

Conclusion: The extended period of limitation was not invocable; the show-cause notice and consequential demand were time-barred, in favour of the assessee.

Issues: Whether the 89-day delay in filing the statutory appeal against the assessment order should be condoned and the appellate rejection set aside.

Analysis: The appeal was rejected because it was filed beyond the condonable period. The explanation that the petitioner's accountant was seriously ill and therefore failed to access the portal and communicate the assessment order was accepted as genuine. The admitted recovery of 24.36% of the disputed tax was also taken into account while prescribing the deposit required for restoration of the appellate remedy.

Conclusion: The delay of 89 days was condoned and the appellate rejection was set aside, subject to payment of the balance required to make up 25% of the disputed tax after adjusting the amount already recovered. The appellate authority must take the appeal on record and decide it on merits after affording personal hearing.

Outcome: The appeal was allowed, the impugned order was set aside, and the writ petition was restored for consideration.

Issues: (i) Whether provision of a corporate guarantee to an associated enterprise was an international transaction and the applicable arm's-length guarantee fee; (ii) Whether sales commission paid to the US associated enterprise was subject to withholding tax and consequential disallowance; and (iii) Whether the Section 10AA deduction required fresh adjudication based on Form 56F and unit-wise profit computation.

Issue (i): Whether provision of a corporate guarantee to an associated enterprise was an international transaction and the applicable arm's-length guarantee fee.

Analysis: The Explanation to Section 92B, inserted by the Finance Act, 2012, expressly covers a guarantee issued for an associated enterprise as an international transaction. A corporate guarantee entails inherent risk and enhances the associated enterprise's creditworthiness, requiring arm's-length benchmarking. Precedents fixing the guarantee commission at 0.50% were followed.

Conclusion: The corporate guarantee is an international transaction, and the guarantee commission shall be computed at 0.50% instead of 1%, in favour of the assessee.

Issue (ii): Whether sales commission paid to the US associated enterprise was subject to withholding tax and consequential disallowance.

Analysis: Under Sections 195 and 40(a)(i), withholding is required only where the payment is chargeable to tax in India. The sales and marketing commission did not constitute Fees for Included Services under Article 12(4)(b) of the India-USA Double Taxation Avoidance Agreement. The prior decision on identical facts in the assessee's case was followed, no change in law or facts having been shown.

Conclusion: The sales commission was not chargeable to tax in India; no withholding obligation arose, and the disallowance is deleted, in favour of the assessee.

Issue (iii): Whether the Section 10AA deduction required fresh adjudication based on Form 56F and unit-wise profit computation.

Analysis: The deduction was reduced by reallocating common expenditure on turnover basis despite the certified Form 56F, bifurcated profit and loss account, and detailed computation of unit-wise eligible profits. The identical issue for earlier years had been remitted for consideration of those materials, and a similar fresh examination was warranted.

Conclusion: The Section 10AA deduction claim is remitted to the Assessing Officer for fresh adjudication after considering Form 56F, the bifurcated profit and loss statement, and the detailed computation of eligible profits.

Final Conclusion: The transfer-pricing adjustment is reduced and the sales-commission disallowance is removed, while the Section 10AA claim requires a fresh determination on the certified and supporting records.

Issues: Whether a show-cause notice issued after omission of Rule 89(4B) of the Central Goods and Services Tax Rules, 2017, without a saving clause, had statutory validity.

Analysis: Rule 89(4B) had been omitted by notification dated 08.10.2024 without any saving clause. Omission of a rule without a provision preserving pending or subsequent proceedings renders the omitted rule unavailable as a statutory basis for action. The impugned notice, issued on 02.12.2025 after the omission, was therefore unsupported by any extant statutory authority.

Conclusion: The show-cause notice was non est in law and was quashed.

Issues: Whether the ITAT could reject a rectification application under Section 254(2) of the Income-tax Act, 1961 by introducing new grounds and reappreciating matters beyond a mistake apparent from the record.

Analysis: Section 254(2) confines rectification jurisdiction to correcting a mistake apparent from the record and does not permit a review on merits or reappreciation of the matter. The rejection relied on new considerations concerning distributor confirmations and patterns of cash receipts, which did not form the basis of the rectification grounds or the original appellate order.

Conclusion: The ITAT exceeded its rectification jurisdiction under Section 254(2) in rejecting the application on new grounds, in favour of the assessee.

Issues: (i) Whether the IT segment's AE and non-AE transactions could be separately benchmarked; (ii) Whether the transfer-pricing adjustment could be computed at entity level rather than confined to AE international transactions; (iii) Whether an upper turnover filter of Rs. 200 crore had to be applied in selecting IT comparables; and (iv) Whether the disallowance under section 14A read with rule 8D was correctly computed.

Issue (i): Whether the IT segment's AE and non-AE transactions could be separately benchmarked.

Analysis: Under the TNMM, rule 10B(1)(e)(i) requires comparison of the net profit margin from the international transaction with the AE, while rule 10B(2) requires consideration of functions, assets and risks. The segmental profit and loss account formed part of the transfer-pricing study and was subsequently certified. Audit of segmental accounts is not mandatory, and the absence of audit did not justify rejection of the segmentation. The AE and non-AE segments had materially different risk profiles and margins; a blended margin distorted the tested international transaction. The same segmentation had also been accepted for the ITeS segment and in other years without any identified change in facts.

Conclusion: Segmentation of the AE and non-AE IT transactions must be accepted for benchmarking purposes, in favour of the assessee.

Issue (ii): Whether the transfer-pricing adjustment could be computed at entity level rather than confined to AE international transactions.

Analysis: Arm's length price determination concerns income arising from international transactions with AEs. An entity-level margin and adjustment that include domestic and other non-AE transactions do not measure the margin of the controlled international transaction.

Conclusion: Any transfer-pricing adjustment must be confined to AE international transactions and cannot be computed at entity level, in favour of the assessee.

Issue (iii): Whether an upper turnover filter of Rs. 200 crore had to be applied in selecting IT comparables.

Analysis: Turnover materially affects assets, risks, scale and operating margins. Large enterprises with substantially higher turnover are not comparable to a smaller captive service provider merely because they operate in the same broad software-services field.

Conclusion: An upper turnover filter of Rs. 200 crore must be applied while selecting comparables and recomputing the arm's length price, in favour of the assessee.

Issue (iv): Whether the disallowance under section 14A read with rule 8D was correctly computed.

Analysis: The assessee's shareholder funds substantially exceeded its investments; therefore, interest expenditure was not liable to disallowance under rule 8D(2)(ii). For rule 8D(2)(iii), only investments capable of yielding exempt income may be included, rather than all investments indiscriminately.

Conclusion: The interest-component disallowance is not warranted, and the indirect-expense component must be recomputed using only exempt-income-yielding investments after verification, in favour of the assessee.

Final Conclusion: The arm's length price and the exempt-income expenditure disallowance require fresh computation on the stated segmental, comparability and investment bases.

Ratio Decidendi: Under the TNMM, benchmarking and any consequential transfer-pricing adjustment must be based on the AE international transaction, not on a blended entity-level margin that includes non-AE transactions having materially different functional and risk profiles.

Issues: Whether an ECIR under the Prevention of Money Laundering Act, 2002 can survive against the petitioners after quashing of the sole predicate FIR.

Analysis: The ECIR was founded solely on the FIR alleged to constitute the scheduled offence. Under Sections 2(1)(u) and 3 of the Prevention of Money Laundering Act, 2002, proceeds of crime must arise from criminal activity relating to a subsisting scheduled offence. Where the scheduled-offence case is quashed by a competent court, no money-laundering action can continue against the person in relation to property allegedly linked to that offence. Since the FIR had been quashed and no scheduled offence remained against the petitioners, the Enforcement Directorate lacked jurisdiction to continue proceedings under the ECIR against them.

Conclusion: The ECIR was quashed insofar as it concerned the petitioners, their directors, partners, employees and shareholders.

Outcome: The special leave petition was dismissed on the grounds of delay and merits.

Issues: Whether an appeal against an advance ruling may determine the classification of a materially different product on the basis of revised packaging and a post-ruling test report that were not before the original Authority.

Analysis: The scope of appellate jurisdiction under Sections 100(1) and 101(1) is confined to the advance ruling and the factual foundation on which it was rendered; it does not permit a new case at appellate stage or an original determination on a materially altered factual matrix. The subsequently produced soap differed in physical appearance, description and packaging from the product originally presented as laundry soap. The later test report did not identify the relevant batch, manufacture details or other particulars establishing that the tested sample was the original product. No contemporaneous technical or manufacturing material established identity or equivalence between the two products.

Conclusion: No. The subsequently presented product and later test report could not be substituted for the product and record underlying the advance ruling, and its classification was not determined in the appeal.

Outcome: Delay condoned and the Special Leave Petition dismissed; the question of law was kept open.

Issues: Whether reassessment may be initiated on the same transfer-pricing material after the Assessing Officer failed to pass a final assessment order within the statutory period following a draft assessment order.

Analysis: The draft assessment order had proposed a transfer-pricing adjustment after detailed scrutiny, and the assessee had communicated that it would not approach the Dispute Resolution Panel. The Assessing Officer did not pass the consequential final assessment order within the period prescribed under the statutory framework. The subsequent proceedings under sections 148A and 148 were founded on the identical transfer-pricing adjustment and material already considered in the scrutiny proceedings; no fresh material was shown to have emerged. Reassessment cannot be used to overcome or indirectly extend the limitation resulting from failure to complete the original assessment.

Conclusion: Reassessment on the same material, after the original assessment proceedings lapsed for want of a final assessment order within limitation, was impermissible.

Issues: Whether respondents to customs appeals could be excluded from participation at the admission stage and denied an opportunity to raise the appeals' maintainability despite their prior admission.

Analysis: The appeals had already been admitted before the scheduled admission hearing, while no interim relief had been granted. Procedural fairness required that the affected respondents be permitted to participate in the appellate proceedings and raise all legally permissible contentions, including the objection to maintainability. Admission of the appeals did not preclude an expeditious consideration of their maintainability.

Conclusion: The petitioners are entitled to participate in the High Court appeals and raise the issue of maintainability, which must be considered expeditiously notwithstanding admission of the appeals.