TaxTMI Updates e-Newsletter
Jan 05,2024

Input Tax Credit (ITC) - reconsideration by appellate authority - opportunity of hearing - portal mismatch of GSTR upload - judicial restraint under Article 226 in matters of factual ascertainment - requirement of a speaking order

Input Tax Credit (ITC) - portal mismatch of GSTR upload - opportunity of hearing - reconsideration by appellate authority - Appellate authority to re-examine the petitioner's claim for availing benefits including ITC after permitting production of documents and hearing. - HELD THAT: - The High Court declined to adjudicate the merits of the ITC claim, observing that the controversy involves factual ascertainment whether the Principal Supplier had uploaded bills (allegedly in GSTR Form A under B2C) which did not reflect on the State GST portal. Exercising judicial restraint under Article 226, the Court directed that the appellate authority should reconsider the appeal on merits after permitting the petitioner to file necessary documentary evidence and to explain the alleged upload so that the entitlement to ITC and related benefits can be examined. The Court required the appellate authority to hear the petitioner, re-evaluate the claim in light of any substantiating documents, and record reasons in a speaking order. Procedural directions were given for the petitioner to approach the appellate authority within two weeks and for the authority to decide expeditiously.

Petition disposed by remanding the matter to the appellate authority to reconsider and decide the ITC claim after hearing the petitioner and on production of documents, and to record a speaking order.

Final Conclusion: The petition is disposed of by directing the petitioner to approach the appellate authority within two weeks and directing the appellate authority to re-examine the claim for benefits including ITC after affording hearing, permitting production of documents regarding the alleged GSTR upload, and to pass a speaking order expeditiously.

Principles of natural justice - opportunity of personal hearing - liberty to file appeal - condonation/waiver of limitation by Appellate Authority - interim stay of recovery proceedings

Liberty to file appeal - condonation/waiver of limitation by Appellate Authority - Petitioner granted liberty to file an appeal and the Appellate Authority directed to entertain the appeal without insisting on limitation. - HELD THAT: - The Court, recognising that the petitioner did not avail earlier personal hearings and contended that additional hearings ought to have been afforded, did not decide the substantive challenge to the impugned order on merits. Instead the Court exercised supervisory jurisdiction to grant the petitioner a remedial opportunity: the petitioner is permitted to file the appeal within 30 days from receipt of this order, and the Appellate Authority is directed to admit and consider the appeal without raising limitation as a bar, and to decide the matter in accordance with law. This direction preserves the petitioner's right to appellate adjudication while leaving merits and limitation issues to be considered afresh by the Appellate Authority. [Paras 7]

Liberty granted to file appeal within 30 days; Appellate Authority to entertain appeal without insisting on limitation and decide in accordance with law.

Interim stay of recovery proceedings - Interim stay of recovery proceedings granted until the filing of the appeal; stay to lapse automatically if appeal is not filed within the stipulated period. - HELD THAT: - As an adjunct to granting the petitioner an opportunity to approach the Appellate Authority, the Court directed an interim stay of recovery proceedings pending the filing of the appeal. The stay is expressly conditional: it remains in force only until the petitioner files the appeal within the prescribed 30-day period, and will automatically stand vacated if the petitioner fails to do so. This preserves the status quo pending appellate remedy while ensuring the stay is time-bound and contingent on prosecuting the appeal. [Paras 8]

Interim stay of recovery proceedings until filing of appeal; stay will automatically vacate if appeal is not filed within 30 days.

Final Conclusion: Writ petitions disposed by granting petitioner limited liberty to file appeal within 30 days and by directing the Appellate Authority to entertain the appeal without raising limitation; interim stay of recovery proceedings is granted until filing and will lapse automatically if the appeal is not filed within the stipulated period.

Statutory appeal - limitation - service of assessment order / final notice - opportunity of personal hearing - interim stay of recovery proceedings - operation of bank accounts subject to conditions

Statutory appeal - limitation - service of assessment order / final notice - opportunity of personal hearing - Entitlement to file a statutory appeal despite expiry of ordinary limitation where the assessee was not served with the assessment order nor given personal hearing and came to know of the order only on service of the final notice. - HELD THAT: - The Court found on the record that the assessment order dated 14.06.2023 was passed without serving any notice on the petitioner and without affording an opportunity of personal hearing; the petitioner became aware of the order only when the final notice was served on 14.09.2023. Although the ordinary period for filing the statutory appeal had expired and the extended 30-day period had also lapsed by the time the petitioner learned of the order, the Court granted liberty to the petitioner to file the appeal before the appropriate Appellate Authority within 30 days from receipt of copy of this order. The Appellate Authority was directed to consider the appeal without insisting on the issue of limitation. [Paras 5, 6, 9, 10]

Liberty granted to file the statutory appeal within 30 days from receipt of copy of this order and Appellate Authority directed to consider the appeal without raising limitation.

Interim stay of recovery proceedings - operation of bank accounts subject to conditions - Grant of interim relief in the form of stay of recovery proceedings and limited permission to operate attached bank accounts pending filing of appeal. - HELD THAT: - Pending filing of the appeal within the period granted by this Court, an interim stay of recovery proceedings was directed. As to the attachment of the petitioner's bank accounts, the Court permitted operation of those accounts until the appeal is filed, subject to the petitioner furnishing details of deposits and withdrawals in the respective accounts and the utilization of withdrawn funds to the Authority concerned. The Court further made clear that the interim reliefs would automatically cease if the petitioner failed to file the appeal within the stipulated 30-day period. [Paras 11, 12]

Recovery proceedings stayed until filing of appeal; petitioner permitted to operate attached bank accounts on furnishing specified account and utilization details; interim reliefs to lapse if appeal not filed within 30 days.

Final Conclusion: Writ petitions disposed by granting petitioner liberty to file statutory appeal within 30 days from receipt of copy of this order (to be considered by the Appellate Authority without insisting on limitation), with interim stay of recovery proceedings and conditional permission to operate attached bank accounts until filing of the appeal; interim reliefs to stand vacated if appeal is not filed within the stipulated period.

Maintainability of advance ruling - scope of advance ruling under Section 95/97 of the GST Act - advance ruling limited to supplies undertaken or proposed to be undertaken by the applicant - transactions already undertaken / retrospective determination - distinction between recipient and supplier for purposes of advance ruling

Maintainability of advance ruling - scope of advance ruling under Section 95/97 of the GST Act - advance ruling limited to supplies undertaken or proposed to be undertaken by the applicant - distinction between recipient and supplier for purposes of advance ruling - Application for advance ruling is not maintainable and is rejected - HELD THAT: - The Authority held that its jurisdiction to decide advance rulings is confined to matters ''in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant'' as defined in Section 95 and elaborated by Section 95/97. The canteen services in the present facts are supplied by a third party contractor and not by the applicant; the applicant is a recipient/facilitator. Further, the transactions in question had already been undertaken and GST had been paid prior to filing the application. Advance rulings are intended to provide certainty for supplies to be undertaken or proposed transactions and, although rulings may be sought for prospective or planned activities, the Authority will not ordinarily entertain applications directed at settled past transactions where tax has already been paid. On these grounds the Authority found the case to be beyond the statutory scope of advance ruling and accordingly rejected the application without deciding the merits. [Paras 8, 9, 10, 11, 12]

Application for advance ruling is not maintainable and is rejected.

Final Conclusion: The Authority dismissed the application as outside the scope of advance ruling jurisdiction because the supplies were made by a distinct third party supplier and the transactions had been effected prior to filing; the application is rejected as not maintainable.

Corporate Social Responsibility (CSR) expenditure u/s 37 - allowable revenue expenditure or not? - as decided by HC [2022 (12) TMI 759 - DELHI HIGH COURT] Explanation 2 inserted in Section 37(1) was prospective in nature, and therefore was not applicable in the assessment years in issue - as per revenue as Tribunal had erred in law in sustaining the deduction claimed by the respondents/assessees u/s 37(1) of the Act is an argument, which cannot be accepted.

HELD THAT:- No case for interference in exercise of our jurisdiction under Article 136 of the Constitution of India is made out in the peculiar facts of the case.

The Special Leave Petition is, accordingly, dismissed.

However, the question of law is kept open.

Treatment of excess of guideline value over sale consideration as income under Section 56(2)(x) of the Income Tax Act - right to seek departmental valuation under Section 50C - interim restraint on coercive recovery pending disposal of a statutory appeal - direction for expeditious disposal of statutory appeal

Treatment of excess of guideline value over sale consideration as income under Section 56(2)(x) of the Income Tax Act - right to seek departmental valuation under Section 50C - interim restraint on coercive recovery pending disposal of a statutory appeal - Petitioner entitled to interim stay of coercive action pending disposal of the statutory appeal where the assessment proceeded on guideline value without awaiting departmental valuation despite the assessee's request for valuation. - HELD THAT: - The assessment treated the difference between the guideline value and the declared sale consideration as income, relying on the guideline value without awaiting the valuation report of the Departmental Valuation Officer although the assessee had expressly requested such valuation. That approach prejudiced the assessee because no material supported the conclusion that the guideline value represented the fair market value. In these circumstances the Court found it just to restrain coercive recovery until the statutory appeal is decided, recognising the assessee's statutory entitlement to departmental valuation and the prejudice caused by completing assessment before receiving that report. [Paras 7]

First and second respondents restrained from initiating coercive action for recovery of the disputed tax demand until disposal of the statutory appeal.

Direction for expeditious disposal of statutory appeal - Fourth respondent directed to dispose of the statutory appeal within a specified time-frame. - HELD THAT: - Having recorded that the statutory appeal was pending and that the assessment had been completed without the departmental valuation, the Court considered it necessary and just that the appeal be adjudicated expeditiously. Accordingly, the appellate authority was commanded to conclude the statutory appeal within a maximum period of three months from receipt of the order, thereby providing a time-bound remedy to resolve the dispute on merits. [Paras 8]

Fourth respondent directed to dispose of the statutory appeal within three months from receipt of a copy of the order.

Final Conclusion: Writ petition disposed by directing the appellate authority to decide the statutory appeal within three months and by granting an interim restraint on coercive recovery of the disputed tax demand until the appeal is disposed; no order as to costs.

Mistake apparent on record - rectification of returns - limitation for filing rectification - duty of assessing officer to detect and rectify clerical errors - continuation/reminder of earlier representation

Mistake apparent on record - rectification of returns - duty of assessing officer to detect and rectify clerical errors - Rectification of an apparent clerical error in the return where total income was overstated by an extra zero and reassessment of income accordingly. - HELD THAT: - The Court found that the petitioner had mistakenly recorded his total income as 26,10,560 instead of 2,61,056, and that the tax liability was in fact computed and paid on the correct figure of 2,61,056, establishing the error as an apparent one on the face of the record. The Court observed that it is the duty of the officer scrutinising the records to detect and rectify such an apparent error and that the officer had failed to apply his mind either while scrutinising the return or the rectification application. On these findings the Court directed the respondent to rectify the mistake and re-assess the petitioner's income accordingly within four weeks from receipt of the order. [Paras 10, 11, 13]

Respondent directed to rectify the apparent error in the return and re-assess the petitioner's income within four weeks.

Limitation for filing rectification - continuation/reminder of earlier representation - Whether the rectification application filed in 2022-2023 is barred by limitation or is a continuation of the representation made in 2013. - HELD THAT: - The Court accepted the petitioner's submission that a representation for rectification was made in 2013 and treated the subsequent applications filed in 2022 and 2023 as reminders or continuations of that original representation. Consequently, the Court held that the respondents should consider and dispose of the earlier representation filed in 2013, if available; if not, they shall dispose of the rectification applications dated 14.09.2022 and 30.08.2023 filed as reminders. The Court therefore refused to reject the matter on limitation grounds and directed fresh disposal of the pending representation/rectification requests. [Paras 12]

Respondent directed to dispose of the 2013 representation if available, otherwise to decide the rectification applications of 14.09.2022 and 30.08.2023 filed as reminders; limitation held not to preclude such disposal.

Final Conclusion: Writ petition disposed by directing the respondents to rectify the apparent clerical error in the return, re-assess the petitioner's income within four weeks, and to dispose of the earlier 2013 representation or, if unavailable, the rectification applications filed in 2022 and 2023; compliance to be reported on the specified date.

Stay of recovery proceedings upon payment of 20% of tax liability - Lift of bank attachment on production of proof of payment - Direction to dispose pending stay application in light of payments made - Right to prosecute statutory appeal where time-limit not expired

Stay of recovery proceedings upon payment of 20% of tax liability - Lift of bank attachment on production of proof of payment - Entitlement to release of bank attachment in view of payment exceeding 20% of assessed tax liability. - HELD THAT: - The Court accepted the parties' concession and the material produced that the petitioner had remitted approximately 30% of the total assessed liability for the two assessment years. The Court noted the statutory position that payment of 20% of the tax liability entitles an assessee to stay of recovery proceedings. Applying that principle to the proved payments, the Court held that continued bank attachment would be prejudicial to the petitioner and was not justified. Consequently the Court directed that the bank attachment issued by the respondent be lifted and that the respondent-bank permit the petitioner to operate the accounts on production of the order. [Paras 7, 9]

Bank attachment lifted and banks directed to permit operation of the accounts on production of this order.

Direction to dispose pending stay application in light of payments made - Requirement for the assessing authority to adjudicate the pending stay application taking into account the payment already made by the petitioner. - HELD THAT: - The Court observed that the petitioner had filed a stay application which remained undecided. Having found that adequate payment had been made (around 30%), the Court directed the respondent to consider and dispose of the stay application expeditiously and in light of the payment proved before the Court. This is a direction for fresh consideration rather than an adjudication of the stay application on merits by the Court itself. [Paras 7]

Respondent directed to dispose of the pending stay application after taking into account the payment made by the petitioner.

Right to prosecute statutory appeal where time-limit not expired - Permissibility of filing an appeal against the impugned order given that the statutory time limit for appeal had not expired. - HELD THAT: - The Court noted that the impugned assessment order dated 30.11.2023 falls within the period for filing an appeal and explicitly recorded that there was no impediment to the appellate authority entertaining any appeal the petitioner may prefer, particularly in view of the payments already made. The Court therefore left open the petitioner's right to prefer an appeal under the statute. [Paras 8]

No impediment to filing or entertaining an appeal; petitioner free to prosecute appeal within statutory time.

Final Conclusion: The Court lifted the bank attachments in view of proved payment exceeding 20% of the assessed liability, directed the assessing authority to dispose of the pending stay application in light of that payment, and recorded that the petitioner remains free to file an appeal as the limitation for appeal has not expired; banks were directed to permit operation of accounts on production of this order.

Fair market value for capital gains computation under section 50C - Deemed consideration under section 50C vis-a -vis stamp valuation authority value - Weight to be given to DVO and registered valuer reports in determining FMV - Application of section 50C where multiple valuations exist

Fair market value for capital gains computation under section 50C - Deemed consideration under section 50C vis-a -vis stamp valuation authority value - Weight to be given to DVO and registered valuer reports in determining FMV - Whether the value determined by the Stamp Valuation Authority should be treated as deemed sale consideration under section 50C for computing long term capital gain in respect of the property sold on 12/01/2015, in presence of competing valuations including DVO and registered valuer reports - HELD THAT: - The Tribunal examined four competing valuations for the disputed property: the sale consideration declared by the assessee, the SVA valuation relied upon by the Assessing Officer, the DVO report obtained during assessment proceedings, and a valuation by a Government registered valuer furnished by the assessee. The SVA value was substantially higher than the DVO and registered valuer figures, and the difference between the sale consideration and the DVO value was materially smaller than the gap between the SVA and DVO values. The Tribunal noted that property valuation inherently admits differences of opinion dependent on locational advantages and other factors; this was illustrated by the assessee's contemporaneous sale of another property in the same locality at a markedly different rate. The DVO had not accepted certain higher comparable sales pointed out by the Assessing Officer. On this factual matrix, the Tribunal held that the SVA figure did not reflect the fair market value for the purpose of deeming provisions under section 50C, especially when independent valuation (DVO and registered valuer) did not corroborate the SVA value and the variance was large. Applying these considerations, the Tribunal concluded that the addition made by treating the SVA value as deemed consideration could not be sustained and therefore deleted the addition upheld by the first appellate authority.

The addition made by adopting the SVA value as deemed consideration under section 50C is deleted; the appeal is allowed.

Final Conclusion: On the facts and contemporaneous valuation evidence, the Tribunal held that the SVA valuation did not represent fair market value for section 50C purposes and deleted the addition; the assessee's appeal is allowed for Assessment Year 2015-16.

Arm's length price - transfer pricing - imputed interest on extended credit - comparability of trade credit and loan - consistency of treatment between associated and non associated enterprises - precedent of the jurisdictional High Court on notional interest

Imputed interest on extended credit - consistency of treatment between associated and non associated enterprises - arm's length price - precedent of the jurisdictional High Court on notional interest - Whether an adjustment by way of notional interest is required in respect of extended credit allowed to the US associated enterprise where the assessee did not charge interest to non associated enterprises for delayed payments. - HELD THAT: - The Tribunal found as an undisputed fact that the assessee granted extended credit to non associated enterprises without charging interest and that the delay in realization was comparable. Applying the jurisdictional High Court decisions in CIT v. Indo American Jewellery Ltd. and CIT v. M/s Livingstone Ltd., the Tribunal held that where there is uniformity in not charging interest to both associated and non associated debtors and the delay is similar, imputing notional interest on receipts from the associated enterprise is not warranted. The Tribunal rejected the TPO's equation of trade credit with a loan for the purpose of imposing a notional 10% interest, noting the commercial distinctions between trade credit and loan and the relevance of the assessee's consistent practice. Having regard to the comparable facts in the co ordinate bench's earlier decision for the assessee and the binding precedents, the Tribunal concluded that no arm's length adjustment by way of notional interest should be made in the assessment year under consideration. [Paras 9, 11]

No adjustment by way of notional interest is required in respect of the extended credit allowed to the US associated enterprise; appeal allowed in favour of the assessee.

Final Conclusion: The Tribunal allowed the appeal for A.Y. 2004-05, holding that where the assessee uniformly did not charge interest to non associated enterprises for delayed payments and the facts are comparable, imputing notional interest on receipts from the associated enterprise is not called for; the adjustment made by the TPO/AO is therefore set aside.

Immunity under Section 270AA - Penalty under Section 270A for under-reporting and misreporting - Deemed under-reporting by claim of surcharge or cess (Section 155(18)) - Failure to specify limb of Section 270A(9) - Requirement to decide applications under Section 270AA(4) within time and to afford hearing before rejection - Maintainability of writ where controversy is purely legal despite availability of statutory appeal

Maintainability of writ where controversy is purely legal despite availability of statutory appeal - Writ petition under Article 226 is maintainable despite alternative remedy of appeal because the controversy is purely a question of law not requiring investigation of disputed facts. - HELD THAT: - The Court applied the principle that where the controversy raised is pristinely legal and does not involve disputed questions of fact, the High Court may entertain a writ petition notwithstanding the existence of a statutory appellate remedy. Reliance was placed on the Supreme Court authority reproduced in the judgment to hold that dismissal on the ground of alternative remedy is inappropriate where the dispute requires determination of law alone. In the facts, the question whether the petitioner was entitled to immunity under Section 270AA involved interpretation and application of statutory provisions and did not require factual investigation. [Paras 17, 18]

Petition is maintainable and the preliminary objection based on availability of alternative remedy is rejected.

Deemed under-reporting by claim of surcharge or cess (Section 155(18)) - Immunity under Section 270AA - Whether the petitioner, having withdrawn its claim for deduction of education cess prior to the amendment coming into force and having made the statutory application, was entitled to immunity under Section 270AA rather than being treated as having misreported income under Section 270A. - HELD THAT: - The Court examined the scheme introduced by insertion of sub-section (18) in Section 155 and the immunity mechanism in Section 270AA. It noted that sub-section (18) deems certain claims of surcharge/cess to be under-reported income unless the assessee makes the prescribed application and pays the tax difference within the specified time. The petitioner had, before the amendment took effect, suo motu withdrawn the claim for deduction of education cess and filed the application under Section 270AA and paid tax as required. The Court held that where an assessee withdraws the claim before the amendment came into force and complies with the conditions for immunity, the purpose of Section 270AA-to incentivise settlement and recovery of tax-must be given effect. Consequently, the petitioner was entitled to immunity rather than being treated as misreporting. [Paras 20, 21, 22, 28]

Petitioner is entitled to immunity under Section 270AA and cannot be denied immunity on the facts of this case.

Failure to specify limb of Section 270A(9) - Whether initiation of penalty proceedings was valid where the Assessing Officer failed to specify which limb of Section 270A(9) (the categories of misreporting) was attracted. - HELD THAT: - The Court observed that neither the assessment order nor the subsequent show-cause notices nor the impugned penalty order specified which particular limb of Section 270A(9) applied. Reliance was placed on precedents holding that denial of immunity or initiation of penalty without specifying the basis (under-reporting versus misreporting and the specific limb of misreporting) is arbitrary. The Court concluded that initiation of proceedings without specifying the relevant limb rendered the initiation defective (nonest) and could not sustain denial of immunity. [Paras 21, 24, 27, 28]

Initiation of penalty proceedings without specifying the applicable limb of Section 270A(9) is invalid and cannot be relied upon to deny immunity.

Requirement to decide applications under Section 270AA(4) within time and to afford hearing before rejection - Whether the Assessing Officer's failure to decide the petitioner's application under Section 270AA within the statutory time and to afford opportunity of hearing rendered the penalty order unsustainable. - HELD THAT: - Section 270AA(4) requires the Assessing Officer to pass an order accepting or rejecting the immunity application within one month from the end of the month in which the application is received, and the proviso mandates an opportunity of hearing before rejection. The Court found that the petitioner's application under Section 270AA was not decided within the prescribed period and that the impugned penalty order was passed without complying with the statutory procedural safeguards. In line with authority emphasising that delay or non-action by Revenue cannot prejudice the assessee, the Court held that the failure to decide and to afford hearing vitiated the penalty. [Paras 23, 26, 29]

Assessing Officer's failure to decide the Section 270AA application within time and to follow the hearing requirement renders the penalty order liable to be set aside.

Final Conclusion: Writ petition allowed. The penalty order dated 31.03.2023 under Section 270A and the consequential demand under Section 156 are set aside. The Assessing Officer is directed to grant immunity under Section 270AA to the petitioner in accordance with law. No order as to costs.

Condonation of delay - Section 263 of the Income Tax Act - order must be both erroneous and prejudicial to the interests of revenue - Binding effect of statement made by counsel on behalf of the assessee

Condonation of delay - Application for condonation of delay in re filing the appeal - HELD THAT: - The application filed by the Revenue sought condonation of a delay of 130 days in re filing the appeal. Learned counsel for the respondent/assessee stated he had no objection to condonation. The Court recorded the statement and granted condonation, disposing of the application accordingly. [Paras 1, 2, 3, 4]

Delay in re filing the appeal is condoned and the condonation application is disposed of.

Section 263 of the Income Tax Act - order must be both erroneous and prejudicial to the interests of revenue - Binding effect of statement made by counsel on behalf of the assessee - Validity of invoking Section 263 to set aside the AO's assessment in light of the assessee's statement that the capital loss will not be carried forward - HELD THAT: - The appeal challenges the Tribunal's order which set aside the CIT(A)'s order under Section 263 that had, in turn, set aside the AO's assessment dated 09.12.2019. The CIT(A) considered the loss claimed on transfer of shares of Indian entities to be erroneous and prejudicial to the revenue. The record showed the assessee had not carried forward the cumulative loss of Rs. 62,85,40,289 and, before the Court, counsel for the assessee expressly stated that the loss would not be carried forward. Since invocation of Section 263 requires the impugned order to be both erroneous and prejudicial to the revenue, the Court held that, given the assessee's binding statement that the loss will not be carried forward, the prejudicial condition is not satisfied. The Court disposed of the appeal based on this statement, which shall bind the assessee. [Paras 9, 11, 12, 14, 15]

Because the assessee (through counsel) disclaimed carrying forward the loss, the condition of prejudice to revenue under Section 263 is not fulfilled; appeal disposed of on that basis and the statement binds the assessee.

Final Conclusion: Condonation of delay in re filing the appeal allowed; on merits the appeal is disposed of because the assessee's binding statement that the loss will not be carried forward negates the requisite 'prejudicial to revenue' condition for invoking Section 263.

Addition under Section 69A of the Income Tax Act (unexplained money) - reliance on statements recorded during survey under Section 133A - applicability of search/survey material to sustain additions - concluded assessment

Addition under Section 69A of the Income Tax Act (unexplained money) - applicability of search/survey material to sustain additions - reliance on statements recorded during survey under Section 133A - concluded assessment - Sustainability of the addition under Section 69A in AY 2015-16 based on survey statements and material recovered during search/survey operations. - HELD THAT: - The AO's addition under Section 69A was founded entirely on the statement of the Director of Raj Laxmi recorded on 29.12.2015 during a survey under Section 133A. However, the search and survey conducted in respect of the respondent/assessee and Sharp Group on 07.04.2017 yielded no incriminating material relating to the assessee for the AY in issue. The Tribunal concluded, and this Court concurs, that in the absence of any incriminating material found during the search of the assessee, Section 69A could not be applied to sustain the addition for the concluded assessment year. The Court relied on the principle that additions under Section 69A require supporting incriminating material attributable to the assessee and that mere statements or material recovered from third parties, without corresponding incriminating material on search of the assessee, do not suffice to sustain the addition. Reference made in the impugned order to earlier authorities [CIT vs. Kabul Chawla] and [Principal Commissioner of Income Tax vs. Abhisar Buildwell] was noted in support of this view, and the Court found the Tribunal's conclusion on this determinative aspect to be correct. [Paras 13, 14, 15, 16, 17]

The addition made by the AO under Section 69A for AY 2015-16 cannot be sustained; the Tribunal's order is upheld.

Final Conclusion: The appeal is dismissed: the Tribunal's conclusion that the addition under Section 69A was not sustainable for AY 2015-16 is affirmed; no other substantial question of law requires adjudication and the application for condonation of delay is rendered infructuous.

Quashing of criminal prosecution - wilful evasion of tax - penalty deletion as affecting criminal prosecution - subsequent developments as ground for re entertaining a second petition under Section 482 Cr.P.C. - treatment of Tax Deducted at Source and non resident status in assessing mens rea

Subsequent developments as ground for re entertaining a second petition under Section 482 Cr.P.C. - abuse of process - Whether the High Court may entertain a second criminal original petition under its inherent jurisdiction in view of subsequent developments after an earlier quash petition was dismissed. - HELD THAT: - The Court noted that an earlier quash petition filed by the petitioner had been dismissed. However, subsequent appellate developments - specifically the order of the Commissioner of Income Tax (Appeals) which deleted penalty and found no evidence of wilful evasion - constituted material change in circumstances. In these facts the Court held that the petitioner's renewed petition was not an impermissible abuse of process; where decisive subsequent developments materially affect the sustainment of prosecution, the High Court may re examine and entertain a fresh petition under its inherent jurisdiction despite an earlier dismissal. The Court therefore accepted the petitioner's renewed plea for relief in view of the new appellate findings and the interests of justice. [Paras 6, 9]

Court entertained the second quash petition in view of subsequent appellate developments and rejected the contention that filing a successive petition was necessarily abusive in the present circumstances.

Wilful evasion of tax - penalty deletion as affecting criminal prosecution - treatment of Tax Deducted at Source and non resident status in assessing mens rea - Whether prosecution under the penal provision for concealment of income could be sustained after appellate deletion of penalty and a finding that intention to conceal was not established. - HELD THAT: - The Court examined the appellate conclusion that the petitioner, an NRI, had bonafide belief arising from his residential status and the TDS effected by the bank, and that there was no evidence of wilful evasion of tax. The Commissioner (Appeals) deleted the penalty imposed by the assessing officer and held that the intention to conceal particulars of income by furnishing inaccurate particulars was not established. The High Court held that where the statutory penalty based on concealment is deleted on the basis that wilful evasion is not proved, continuation of penal prosecution for the same alleged concealment cannot be sustained. Applying that reasoning to the facts of the present case, the Court concluded that continuation of the prosecution under the penal provision was not tenable and warranted quashing. [Paras 8, 9, 10]

Proceedings in EOCC.No.401 of 2018 were quashed insofar as they prosecuted the petitioner for the alleged concealment and attempted evasion of tax.

Final Conclusion: In view of the Commissioner of Income Tax (Appeals) finding of no wilful evasion and deletion of penalty, and considering the appellate development as a material change of circumstances, the High Court entertained the subsequent quash petition and quashed the criminal proceedings in EOCC.No.401 of 2018.

Issuance of notice under Section 148 - time-bar under Section 149 - deemed issuance by dispatch/digital signature - electronic service and authentication under Rule 127A - applicability of substituted Section 148A (Finance Act, 2021) - Ashish Agarwal

Issuance of notice under Section 148 - time-bar under Section 149 - deemed issuance by dispatch/digital signature - electronic service and authentication under Rule 127A - Validity of the notice dated 31.03.2021 for Assessment Year 2014-2015 and whether it was time-barred - HELD THAT: - The Court found that the determinative question is issuance (not actual receipt) for the purpose of Section 149. The impugned notice was digitally signed and delivered for despatch on 31.03.2021, that being the last date under the pre-amendment Section 149, and therefore was issued within time. The Court relied on principles of communication (analogy to Sections 3 and 4, Indian Contract Act) and statutory provisions permitting electronic transmission (Section 282 and Rule 127A of the Income-tax Rules) to hold that a notice sent from the designated authority by e-mail or put in a course of despatch is deemed issued on the date of dispatch/digital signing even if actual delivery/receipt occurs later. The Court therefore rejected the contention that late electronic delivery or subsequent physical dispatch made the notice time-barred, and held that issuance on 31.03.2021 validly preserved the Revenue's power to proceed under the pre-1.4.2021 regime. [Paras 51, 52, 53, 54, 55]

The notice dated 31.03.2021 was not time-barred; issuance was complete on 31.03.2021 by digital signing/despatch and proceedings under the pre-amendment law are maintainable.

Applicability of substituted Section 148A (Finance Act, 2021) - Ashish Agarwal - Whether the Supreme Court's decision in Union of India v. Ashish Agarwal required treating this notice as one issued under substituted Section 148A and proceeding under the amended regime - HELD THAT: - The Court examined Ashish Agarwal and the notifications under the TLA Act, 2020 and distinguished the present facts. In Ashish Agarwal the issue arose where notices had been issued on or after 01.04.2021 and related to timelines extended by notifications; the Supreme Court directed that notices issued under the unamended Section 148 on or after 1-4-2021 be treated as deemed issued under Section 148A and permitted the Revenue to comply with the new procedural safeguards. Here the impugned notice was digitally signed and dispatched on 31.03.2021, i.e., prior to the substitution with effect from 01.04.2021, and the Court held that the Ashish Agarwal scheme was inapplicable to a notice validly issued on 31.03.2021 under the pre-amendment law. Consequently the substituted provisions could not be invoked to nullify or convert a validly issued pre-amendment notice. [Paras 37, 40, 41, 42, 43]

Ashish Agarwal does not apply to a notice validly issued on 31.03.2021; the notice need not be treated as one issued under substituted Section 148A for the purpose of this case.

Final Conclusion: Writ petition dismissed; the notice dated 31.03.2021 for Assessment Year 2014-2015 was held to be validly issued within time by digital signing/despatch and the Supreme Court's Ashish Agarwal ruling was distinguished as inapplicable to a notice issued on 31.03.2021.

Characterisation of software receipts as royalty - Fees for technical services / FTS - Supply / sale of a copyrighted article - Shrink-wrapped software - Application of the Supreme Court decision in Engineering Analysis Centre of Excellence Pvt. Ltd. - Interpretation of contractual licence terms for software distribution - Taxability under India-Singapore DTAA (Article 12(3))

Characterisation of software receipts as royalty - Supply / sale of a copyrighted article - Shrink-wrapped software - Application of the Supreme Court decision in Engineering Analysis Centre of Excellence Pvt. Ltd. - Taxability under India-Singapore DTAA (Article 12(3)) - Whether the receipts from sale/distribution of software to Indian entities are to be treated as 'royalty' / FTS taxable in India or are covered by the Supreme Court's decision in Engineering Analysis as sale/transfer of a copyrighted article (not taxable as royalty). - HELD THAT: - The Tribunal examined the agreements between the assessee (a Singapore resident distributor) and its Indian distributors/end users and the submissions before the DRP. The Assessing Officer had construed various clauses as conferring development, reproduction or source code rights to the Indian AE and treated receipts as royalty/FTS under section 9(1)(vi)/Article 12(3). The assessee contended that only a non exclusive, non transferable right to use the software and transfer of the copyrighted article were involved and that no copyright or source code was parted with, relying on the Supreme Court ruling in Engineering Analysis. The Tribunal found that the AO misread and selectively interpreted contractual provisions and that, on a proper construction in context, the facts fall squarely within the scope of the Supreme Court's decision. Consequently, the receipts cannot be characterised as royalty/FTS under the DTAA/Act and are covered by the Engineering Analysis precedent. [Paras 13, 14]

The receipts from sale/distribution of the software are covered by the Supreme Court decision in Engineering Analysis and are not to be treated as 'royalty' / FTS; the assessee's appeal is allowed.

Final Conclusion: The Tribunal held that the Assessing Officer misinterpreted the contractual terms and that the facts are squarely covered by the Supreme Court's judgment in Engineering Analysis Centre of Excellence, accordingly allowing the assessee's appeal for A.Y. 2020-21.

Disallowance under Section 40(a)(i) for failure to deduct TDS under Section 195 - fee for technical services under Section 9(1)(vii) - onus of proof lies on the person who alleges - doctrine of consistency - disallowance under Section 14A and Rule 8D - allowability of ESOP expenses as business expenditure - bogus purchases and additions under Section 69C - transfer pricing adjustment for guarantee/SBLC and arm's length compensation

Disallowance under Section 40(a)(i) for failure to deduct TDS under Section 195 - fee for technical services under Section 9(1)(vii) - onus of proof lies on the person who alleges - doctrine of consistency - Whether commission/brokerage/discountexpenses paid to foreign agents are disallowable for non-deduction of TDS as fee for technical services - HELD THAT: - The Tribunal held that the Assessing Officer's disallowance under Section 40(a)(i) was not sustainable. The AO characterized the commission as 'fee for technical services' under Section 9(1)(vii) based on alleged statements in a video conference and thereby invoked Section 195; but no documentary evidence or contractual clause supported any obligation on agents to perform technical 'quality checks'. The DRP had observed that agreements did not signify such quality-check obligations and directed the AO to record reasons; the AO nonetheless relied on uncorroborated assertions. The Tribunal applied the settled principle that the onus lies on the party making the allegation and the Revenue cannot cast an impossible burden on the assessee to disprove a non-existent contractual obligation. Finding that the services were rendered and utilized outside India for procuring export orders, that similar payments had been accepted in earlier years and by transfer pricing, and that the AO produced no contrary material, the payments were held not taxable in India and no obligation to deduct under Section 195 arose. Consequently the disallowance was directed to be reversed. [Paras 8, 9, 10]

Addition under Section 40(a)(i) disallowing commission expenses reversed; ground allowed.

Disallowance under Section 14A and Rule 8D - Whether further disallowance under Section 14A was warranted over the assessee's suo motu adjustment - HELD THAT: - The Tribunal recorded that the assessee declared nominal exempt income for the year and had made a suo motu disallowance which exceeded that exempt income. Applying the ratio in relevant precedents, the Tribunal held that disallowance under Section 14A/Rule 8D can only be made in respect of investments which yielded tax-free income in the year. In view of the assessee's offered disallowance and the case law relied upon, no additional disallowance was called for and the AO was directed to delete the excess disallowance. [Paras 11]

Disallowance under Section 14A deleted; ground allowed.

Allowability of ESOP expenses as business expenditure - Whether ESOP compensation expense is allowable as revenue expenditure under Section 37(1) - HELD THAT: - The Tribunal observed that the issue is covered in favour of the assessee by jurisdictional authority and subsequent decisions treating ESOP cost as allowable revenue expenditure. The DRP and AO reliance on an admitted SLP before the Supreme Court was held insufficient to overturn settled view; earlier years' allowance and absence of contrary reason for a different stance were noted. On this basis the Tribunal directed reversal of the disallowance of ESOP expense. [Paras 12]

Disallowance of ESOP expense reversed; ground allowed.

Bogus purchases and additions under Section 69C - Whether purchases from a supplier could be disallowed as bogus when corresponding sales were accepted - HELD THAT: - The Tribunal noted that the assessee carried out trading transactions where purchased goods were sold without modification and profit was shown. The DRP had held that sales cannot occur without corresponding purchases and cited precedents to that effect. The AO accepted sales but rejected purchases without bringing fresh contrary material. The Tribunal found that excluding purchases while accepting sales in trading activity violates basic accounting principles and leads to double taxation; in absence of independent adverse evidence regarding the purchases, the AO's additions were contrary to DRP directions and settled law and were ordered to be reversed. [Paras 13]

Additions treating purchases as bogus reversed and purchases restored; ground allowed.

Transfer pricing adjustment for guarantee/SBLC and arm's length compensation - Whether adjustment for commission on standby letter of credit (SBLC) was warranted where bank charges were recovered from Associate Enterprises - HELD THAT: - The TPO made an arm's length adjustment on the basis that the assessee should have been compensated by AEs for risk exposure on SBLC. The assessee demonstrated that actual bank commission charged at market rates was recovered from AEs and that no cost was borne by the assessee. The DRP affirmed the TPO without reasoned explanation. The Tribunal accepted the assessee's undisputed factual position that there was no outgo and no unrecovered cost, and therefore found no justification for the transfer pricing adjustment; the Tribunal did not address alternative contentions on the quantum since the primary fact negated any adjustment. [Paras 14]

Transfer pricing adjustment for SBLC disallowed; ground allowed.

Final Conclusion: The appeal is partly allowed: additions/disallowances in respect of commission to foreign agents (Section 40(a)(i)), Section 14A disallowance, ESOP expense, bogus purchases, and the SBLC transfer pricing adjustment were set aside/directed to be reversed in favour of the assessee; appeal otherwise disposed accordingly.

Mandatory requirement of Document Identification Number (DIN) - Effect of non-compliance with CBDT Circular No.19/2019: communication deemed never issued - Conduct of assessment through E proceedings as directed by CBDT Circular No.27/2019 - Binding character of CBDT circulars issued under Section 119 of the Income tax Act - Applicability of Section 292B to defects in departmental communications

Mandatory requirement of Document Identification Number (DIN) - Effect of non-compliance with CBDT Circular No.19/2019: communication deemed never issued - Conduct of assessment through E proceedings as directed by CBDT Circular No.27/2019 - Validity of the reassessment order dated 17/12/2019 in view of non compliance with CBDT Circulars requiring DIN and e proceedings - HELD THAT: - The Tribunal found that CBDT Circular No.19/2019 requires every departmental communication on or after 01.10.2019 to carry a computer generated DIN in the body of the communication, and Circular No.27/2019 directs conduct of assessments through e proceedings subject to limited exceptions. The reassessment order dated 17/12/2019 did not quote a DIN in the body of the assessment order and did not state any exceptional circumstance or prior written approval as required for issuance of a manual communication without DIN. Although the demand notice carried a DIN, the assessment order and the demand are distinct communications and cannot be conflated to cure omission of DIN on the assessment order itself. As the AO did not comply with the procedures laid down in the Circulars, paragraph 4 of Circular No.19/2019 applies and the communication (the reassessment order) is invalid and deemed never to have been issued. The Tribunal relied on the binding character of these CBDT instructions on departmental authorities and on consistent coordinate decisions upholding the consequence prescribed by the Circulars. [Paras 17, 21, 24, 25, 51]

The reassessment order passed u/s 143(3) r/w 147 dated 17/12/2019 is set aside as non est for failure to comply with CBDT Circular Nos.19/2019 and 27/2019.

Binding character of CBDT circulars issued under Section 119 of the Income tax Act - Applicability of Section 292B to defects in departmental communications - Whether omission of DIN on the assessment order is a curable defect under Section 292B - HELD THAT: - The Tribunal considered authorities including the Delhi High Court decision in Brandix and other High Court/Tribunal decisions and held that the CBDT Circular expressly provides that communications not in conformity with its mandates shall be treated as invalid and deemed never issued. Given that paragraph 4 of Circular No.19/2019 prescribes this consequence, the Tribunal held that recourse to Section 292B to cure the omission is not available to validate an order lacking DIN in its body. The Circulars, issued under Section 119, are binding on departmental authorities to the extent they are within statutory power, and their procedural mandate cannot be disregarded by treating the omission as a mere curable defect. [Paras 30, 31]

Section 292B cannot be invoked to cure the omission of DIN; the omission renders the communication invalid under the CBDT Circular.

Conduct of assessment through E proceedings as directed by CBDT Circular No.27/2019 - Assessing officer compliance and consequences - Consequences for the remaining grounds of appeal after setting aside the reassessment order - HELD THAT: - Having set aside the reassessment order for procedural invalidity under the CBDT Circulars, the Tribunal observed that other contentions on merits (including genuineness of payments and initiation of proceedings) have become academic. The Tribunal therefore declined to adjudicate those merits at this stage, leaving them open for decision if and when valid proceedings are lawfully initiated thereafter. [Paras 52]

Other grounds on merits are left open / dismissed as infructuous for the present.

Final Conclusion: The reassessment order dated 17/12/2019 (passed u/s 143(3) r/w 147) is set aside as non est for failure to comply with CBDT Circular Nos.19/2019 and 27/2019 (no DIN quoted and no lawful exception recorded); Section 292B cannot cure that omission; the appeal is partly allowed and remaining substantive grounds are left open as infructuous.

Taxability of remittances to NRE accounts of non-residents - Addition as unexplained investment under section 69 of the Income-tax Act - Unexplained cash credit under section 68 of the Income-tax Act - Receipt and accrual principles for non-residents under section 5 of the Income-tax Act

Addition as unexplained investment under section 69 of the Income-tax Act - Taxability of remittances to NRE accounts of non-residents - Receipt and accrual principles for non-residents under section 5 of the Income-tax Act - Addition under section 69 confirmed by lower authorities held to be unsustainable where investments were made from NRE account funded by wire transfers from another non-resident's NRE account - HELD THAT: - The Tribunal found on the facts that the assessee and his son were non-residents and the impugned amounts were received by the assessee in his NRE bank account by wire transfers from his son's NRE account and all transactions were through banking channels. Applying the principles of sections 4 and 5, the Tribunal held that for a non-resident taxability arises only in respect of income received or deemed to be received in India or income accruing or arising in India. Where the first receipt of funds as income occurred outside India, subsequent remittance into India through proper banking channels does not convert such funds into taxable income in India. The Tribunal relied upon and followed the reasoning in the decisions cited in the order (for example Tarun Kumar Sarkar , Vijaykumar Vasantbhai Patel , Iqbal Ismail Virani , Madhusudan Rao , Smt. Susila Ramasamy ) and the CBDT guidance extracted therein, to conclude that once the origin of funds is shown to be remittances from abroad into NRE accounts, the onus under sections 68/69 stands discharged and no addition under section 69 can be sustained. The Tribunal therefore concluded that the CIT(A) erred in confirming the addition where the assessee had produced evidence of inward remittances into his NRE account and where the departmental objections did not negate that the amounts represented remittances from abroad. [Paras 9, 11, 15]

Addition under section 69 is deleted and Ground No.1 is allowed.

Unexplained cash credit under section 68 of the Income-tax Act - Taxability of remittances to NRE accounts of non-residents - Receipt and accrual principles for non-residents under section 5 of the Income-tax Act - Addition under section 68 (unexplained cash credit) confirmed by lower authorities held to be unsustainable for the same reason as the section 69 addition - HELD THAT: - The Tribunal observed that the section 68 addition mirrored the section 69 reasoning and that where the funds invested originated from remittances into the assessee's NRE account from his son's NRE account abroad, and both parties were non-residents, the remittance did not constitute income received or accrued in India. The Tribunal therefore applied the same legal principle - that inward remittances through banking channels, when satisfactorily demonstrated to be remittances from abroad, are not taxable in India in the hands of a non-resident - and allowed the ground relating to section 68. The Tribunal noted precedent and CBDT guidance discussed in the order to support the conclusion that the departmental rejection of source, without sufficient contrary material showing Indian-source income, could not sustain the addition. [Paras 17]

Addition under section 68 is deleted and Ground No.3 is allowed.

Final Conclusion: For Assessment Year 2006-07 the Tribunal allowed the appeals: additions made under sections 69 and 68, being investments and credits traceable to remittances into the assessee's NRE account from his son's NRE account abroad, were held not taxable in India and therefore deleted; the appeals are allowed.

Classification under Customs Tariff Heading - of a kind solely or principally used - common parlance test - functional utility and predominant use - residuary entry versus specific entry - entitlement to exemption notification

Classification under Customs Tariff Heading - of a kind solely or principally used - functional utility and predominant use - entitlement to exemption notification - Data projectors imported as 'Data Projector Model X1220h DLP XGA' are classifiable under CTH 85286100 and entitled to exemption under Notification No. 24/2005-Cus. - HELD THAT: - The Tribunal applied the tests laid down by the Apex Court, recognising that classification requires consideration of how the article is understood in common parlance or trade, together with its functional utility and predominant or primary usage. While the commercial-usage test is important for consumer goods, technological capabilities cannot be ignored where the tariff description uses the phrase 'solely or principally used'. The imported projector's technical features (native resolution, aspect ratio, contrast) indicate that it is principally used for data projection with ADP machines and are not dispositive against classification merely because of video compatibility or presence of auxiliary ports. A specific sub-heading (8528.61) covering projectors 'solely or principally used' for ADP systems prevails over any residuary entry. The Tribunal followed the reasoning of a Coordinate Bench in the appellant's earlier identical case and subsequent appellate authority decisions, holding that the product's principal function and specifications justify classification under 85286100 and consequent exemption under Notification No.24/2005. [Paras 4, 5]

Impugned order set aside; projectors classifiable under CTH 85286100 and eligible for exemption under Notification No. 24/2005-Cus; appeal allowed with consequential relief.

Final Conclusion: The appeal is allowed: the imported data projectors are held to fall under CTH 85286100 and to be entitled to exemption under Notification No. 24/2005-Cus; the impugned appellate order is set aside and consequential relief follows as per law.

Extended period of limitation - willful suppression and dishonest intent - 100% Export Oriented Unit removals and Rule 17(1) of Central Excise Rules, 2002 - ER-2 returns and departmental scrutiny - show cause notice timing under Section 28(3)(d) of the Customs Act, 1962 - penalty for contravention of exemption notifications

Extended period of limitation - willful suppression and dishonest intent - ER-2 returns and departmental scrutiny - 100% Export Oriented Unit removals and Rule 17(1) of Central Excise Rules, 2002 - Whether the show cause notice issued beyond the normal limitation period could be sustained by invoking the extended period and penalty where the assessee had sought permission, filed ER-2 returns and there was a bona fide interpretational dispute on applicable procedure. - HELD THAT: - The Tribunal found that the appellant had obtained prior permission from the Assistant Commissioner and had recorded the removals in ER-2 returns which were subsequently scrutinized by departmental officers; the dispute as to the correct mode of discharge of duty involved interpretation of Rule 17(1) of the Central Excise Rules, 2002 and competing tribunal decisions, indicating a bona fide difference of opinion. There was no finding of dishonest conduct or deliberate suppression of material facts with intent to evade duty. In these circumstances the invocation of the extended period of limitation and imposition of penalty could not be sustained. The Tribunal therefore confined itself to the question of time bar, did not decide the substantive merits on liability, and concluded that issuance of the show cause notice beyond the normal time limit was not permissible where there was no willful concealment and the matter involved an arguable interpretation and prior disclosures to the department. [Paras 4, 5]

Show cause notice issued beyond the normal time limit; extended period and penalty cannot be invoked; appeal allowed on limitation ground.

Final Conclusion: The impugned order is set aside as time barred and the appeal is allowed with consequential relief as per law.

Forfeiture of security deposit - penalty imposed on customs broker - liability of customs broker founded on importer's mis-declaration - effect of appellate quashing of importer's liability on consequential action against agent

Forfeiture of security deposit - penalty imposed on customs broker - effect of appellate quashing of importer's liability on consequential action against agent - Whether the forfeiture of the customs broker's security deposit and the penalty imposed on the broker could be sustained when the foundational finding of mis classification against the importer was quashed by this Tribunal. - HELD THAT: - The Tribunal noted that the impugned forfeiture and penalty were imposed solely because the appellant was alleged to have been involved in the offence said to be committed by the importer M/s. Ridava Petrochemicals Pvt. Ltd. This Tribunal had earlier allowed the importer's appeal, setting aside the findings of mis-declaration, confiscation and consequential penalties in that case. Since the present action against the customs broker rested entirely on the now quashed finding against the importer, the foundation for imposing forfeiture of the security deposit and penalty on the broker collapsed. In those circumstances the Tribunal concluded that no consequential punishment could be sustained against the appellant and accordingly set aside the impugned order.

Impugned order of forfeiture of the security deposit and imposition of penalty on the customs broker set aside; appeal allowed.

Final Conclusion: The appeal is allowed and the order forfeiting the security deposit and imposing penalty on the customs broker is set aside because the foundational finding against the importer on which the action against the broker was based has been quashed by this Tribunal.

Classification of quicklime under heading 2522 (quicklime) versus heading 2825 (calcium oxide/hydroxide) - purity threshold of calcium oxide (98%) as determinative for tariff heading - effect of calcination alone on classification (not altering natural quicklime into processed/purified calcium oxide) - HSN explanatory notes / Chapter Note 11 excluding calcium oxide with purity less than 98% from chapter 28 - precedential application of tribunal decisions on identical facts

Classification of quicklime under heading 2522 (quicklime) versus heading 2825 (calcium oxide/hydroxide) - purity threshold of calcium oxide (98%) as determinative for tariff heading - effect of calcination alone on classification (not altering natural quicklime into processed/purified calcium oxide) - HSN explanatory notes / Chapter Note 11 excluding calcium oxide with purity less than 98% from chapter 28 - precedential application of tribunal decisions on identical facts - Imported quicklime with CaO content between 92-97% obtained only by calcination is classifiable under CTH 2522 1000 and not under CTH 2825 9090. - HELD THAT: - The Tribunal found the material facts undisputed: the imported product is quicklime produced by calcination and its CaO content is below 98% (92-97%). Reliance was placed on HSN explanatory material, in particular Chapter Note 11, which confines heading 28.25 to calcium oxide/hydroxide in the pure state (approximately 98% CaO) and excludes quicklime and slaked lime to heading 25.22. The court, following earlier Tribunal decisions rendered in practically identical circumstances (including the decision cited in Bhadradri Minerals and the Tribunal order reproduced from Jindal Stainless (Hisar) Ltd.), held that mere calcination does not convert natural quicklime into a purified calcium oxide covered by chapter 28 when purity is below the 98% threshold. Decisions relied upon by the Revenue in different factual or pre-HSN alignment contexts were treated as inapplicable. Applying this ratio to the present undisputed facts, the product falls within subheading 2522.10 (quicklime) and not under chapter 28.25 as claimed by the Revenue. [Paras 4, 5]

Impugned classification set aside; product held classifiable under CTH 2522 1000.

Final Conclusion: Appeal allowed; imported quicklime (CaO 92-97%, obtained by calcination alone) is classifiable under CTH 2522 1000 and the impugned order is set aside.

Transitional Arrangements - Paragraph 1.05(b) of FTP 2015-20 - irrevocable commercial letter of credit - restriction on import - import in transit / shipment made prior to imposition of restriction - confiscation under Section 111(d) of the Customs Act, 1962 - penalty under Section 112(a)(i) and Section 117 of the Customs Act, 1962

Transitional Arrangements - Paragraph 1.05(b) of FTP 2015-20 - irrevocable commercial letter of credit - restriction on import - confiscation under Section 111(d) of the Customs Act, 1962 - penalty under Section 112(a)(i) and Section 117 of the Customs Act, 1962 - Application of para 1.05(b) of FTP 2015-20 to imports where shipment/payment/LC pre-dated imposition of restriction and validity of consequential confiscation and penalties. - HELD THAT: - The Tribunal found that para 1.05(b) of the Transitional Arrangements provides that an export or import freely permitted under the FTP which is subsequently subjected to restriction will ordinarily be permitted notwithstanding such restriction, subject to the condition that shipment of the import is made within the original validity period of an irrevocable commercial letter of credit established before the date of imposition of the restriction. The appellant produced a proforma invoice and sale contract dated 18.01.2021 and evidence of 100% remittance on 25.01.2021, all preceding DGFT Notification No. 3/2015-20 dated 26.04.2021 which restricted watermelon seeds. Although the bill of lading was issued on 09.05.2021 due to carrier delay, the material documentary evidence showed that the transaction and payment obligations were established prior to imposition of the restriction. The lower authorities failed to appreciate that the appellant satisfied the Transitional Arrangement conditions and therefore the subsequent restriction could not be applied to deny import; accordingly, the confiscation and penalties founded on that restriction were unsustainable.

Impugned order upholding confiscation and penalties set aside; appeal allowed with consequential relief.

Final Conclusion: Appeal allowed. The Tribunal held that para 1.05(b) of FTP 2015-20 applied because the transaction and payment/LC were established prior to the imposition of the restriction; therefore confiscation and penalties imposed on the appellant were set aside and the appeal was allowed with consequential relief.

Binding effect of a resolution plan between the Committee of Creditors and the successful resolution applicant - power of the Adjudicating Authority to remit a resolution plan to the Committee of Creditors - limited judicial review to ensure compliance with Section 30(2) - primacy of the commercial wisdom of the Committee of Creditors - remand permissible where subsequent ineligibility or breach of conditions arises

Binding effect of a resolution plan between the Committee of Creditors and the successful resolution applicant - primacy of the commercial wisdom of the Committee of Creditors - limited judicial review to ensure compliance with Section 30(2) - Whether the Adjudicating Authority could remit an approved resolution plan back to the CoC absent a finding of non-compliance with Section 30(2) of the Code. - HELD THAT: - The Tribunal held that a resolution plan approved by the CoC is binding inter se the CoC and the successful resolution applicant and the commercial wisdom of the CoC is entitled to primacy. The Adjudicating Authority's power to remit a plan to the CoC is limited: it may do so only where the plan does not accord with the requirements of Section 30(2), warranting judicial scrutiny of those statutory parameters. Absent such a violation, the Adjudicating Authority cannot permit the CoC to revisit and reverse its earlier approval, as that would undermine finality and statutory timelines. The Court therefore concluded that remand is impermissible merely to enable the CoC to re open its commercial decision. [Paras 12, 13]

Adjudicating Authority erred in remitting the approved resolution plan to the CoC where no Section 30(2) non-compliance was shown.

Remand permissible where subsequent ineligibility or breach of conditions arises - power of the Adjudicating Authority to remit a resolution plan to the Committee of Creditors - Whether the grounds relied on by the CoC - alleged failure to implement prior resolution plans, a freezing order against the parent company, and downgrade of credit rating - justified remitting the resolution plan for reconsideration. - HELD THAT: - The Tribunal examined the specific grounds relied upon by the CoC and found that each was either already known to and considered by the CoC before approval or did not, by itself, amount to a disqualification or a breach of the approved plan that would attract the limited exception permitting remand. Delay or past difficulties in implementing other plans, a parent company's freezing order and a downgrade in credit rating were not shown to produce ineligibility under the statutory scheme or to render the plan violative of Section 30(2). The Court observed that remand may be appropriate where a Resolution Applicant subsequently acquires ineligibility or where there is breach of a condition of the plan, but such circumstances were not made out on the record before the Adjudicating Authority. [Paras 14, 21, 22, 23]

The factual grounds advanced did not justify sending the resolution plan back to the CoC for reconsideration.

Power of the Adjudicating Authority to remit a resolution plan to the Committee of Creditors - Relief directed on successful challenge to the Adjudicating Authority's orders. - HELD THAT: - Having found no jurisdictional or statutory basis for the Adjudicating Authority's remand, the Tribunal set aside the impugned orders that had sent the plan back to the CoC and allowed the appeals. The Tribunal directed the Adjudicating Authority to consider the pending application for approval of the resolution plan afresh and requested that, given the delay caused by the ill-founded remand application, the Adjudicating Authority decide IA No.159 of 2020 within three months from production of the copy of the Tribunal's order. [Paras 28]

Impugned remand orders set aside; Adjudicating Authority directed to decide IA No.159 of 2020 afresh within three months.

Final Conclusion: The appeals were allowed: the Tribunal held that the Adjudicating Authority had no basis to remit an approved resolution plan to the CoC where no violation of Section 30(2) or subsequent disqualifying event or breach of the plan was established; the impugned remand orders were set aside and the Adjudicating Authority was directed to decide the application for approval afresh within three months.

Summary order. Special Leave Petition dismissed; impugned High Court judgment and order are not interfered with. Pending applications, if any, disposed of.

Partner as service provider - distinct legal personality of firm and partner - service tax exigibility on intra-entity transactions - application of precedent - remand for reconsideration in light of precedent

Partner as service provider - distinct legal personality of firm and partner - service tax exigibility on intra-entity transactions - application of precedent - remand for reconsideration in light of precedent - Whether a partner can be treated as a service provider to the partnership firm and whether the transactions between a partner and the firm are exigible to Service Tax, and whether the impugned orders require reconsideration in the light of the Cadila Healthcare judgments. - HELD THAT: - The Tribunal observed that the core controversy in the present appeals-whether partners (individually) and the partnership firm (collectively) are distinct persons for the purpose of levying Service Tax-prima facie corresponds to the issue decided in the Cadila Healthcare judgments relied upon by the appellant. However, the Tribunal accepted the Revenue's submission that applicability of that precedent depends upon factual parity between the cases. Since the adjudicating authorities had not considered the Cadila Healthcare decisions, the Tribunal concluded that the impugned orders cannot be finally upheld without fresh adjudication. In the interest of justice, the Tribunal set aside the impugned orders and remanded the matters to the adjudicating authority for reconsideration and fresh decision in light of the Cadila Healthcare judgments, leaving open the question of applicability of that ratio to the facts of these cases.

Impugned orders set aside; appeals allowed by way of remand to the adjudicating authority to reconsider and pass fresh orders in light of the cited precedent.

Final Conclusion: The Tribunal remanded the matters to the adjudicating authority for fresh consideration and decision on whether partners constitute service providers to the firm for Service Tax purposes, in light of the Cadila Healthcare judgments, and set aside the impugned orders.

Refund of service tax - unjust enrichment - contractual clause 'rates inclusive of all taxes' - cum-duty price - evidence of non-recovery from service recipient - tax paid over and above billed value - consequential relief

Refund of service tax - unjust enrichment - contractual clause 'rates inclusive of all taxes' - evidence of non-recovery from service recipient - tax paid over and above billed value - Whether the refund of service tax claimed by the appellant is barred by unjust enrichment on the ground that contract rates were stated to be inclusive of taxes and the tax incidence was passed on to service recipients - HELD THAT: - The Tribunal found no dispute that the appellant was not liable to pay service tax for the service in question and that the tax paid by the appellant is in principle refundable. The Commissioner (Appeals) rejected the refund relying on the contract clause that rates were "inclusive of all taxes" and on a presumption that the service tax had been passed on to the service recipients. On examination of records the Tribunal observed that the appellant had in fact paid service tax over and above the billed value, produced invoices showing no separate collection of service tax, filed a Chartered Accountant's certificate and reflected the refundable amount as "service tax receivable" in the trial balance for FY 2013-14. These documents supported the finding that the service tax was borne by the appellant and not recovered from service recipients. The Tribunal therefore applied the settled principle that a bare contractual clause stating rates are inclusive of taxes does not, without supporting evidence, justify a presumption that tax incidence was passed on; where evidence shows non-recovery, unjust enrichment does not arise. Having accepted the Adjudicating Authority's conclusion on non-recovery, the Tribunal held that the Commissioner (Appeals)'s denial of refund was unsustainable and set aside that order, upholding the refund sanctioned by the Adjudicating Authority (subject to the time-bar exclusion noted by lower authority). [Paras 4, 5]

The refund claim is not barred by unjust enrichment; the Adjudicating Authority's order granting the refund is upheld and the Commissioner (Appeals) order is set aside, with consequential relief as per law.

Final Conclusion: Appeal allowed. The Tribunal upholds the Adjudicating Authority's grant of refund (subject to the time-bar exclusion noted below), sets aside the Commissioner (Appeals) order which denied refund on the ground of unjust enrichment, and grants consequential relief in accordance with law.

Construction service - Commercial or Industrial Construction Service - Construction of residential complex - Government building exclusion - Sub-contractor liability for service tax - Extended period / limitation for service tax demands

Construction service - Commercial or Industrial Construction Service - Construction of residential complex - Government building exclusion - The construction services provided for the Income Tax building and staff quarters for the Central Administrative Tribunal are not taxable as Commercial or Industrial Construction Service or as construction of a residential complex. - HELD THAT: - The Tribunal noted as an undisputed fact that the buildings constructed belonged to the Income Tax Department and the Central Administrative Tribunal and were government buildings. Applying the legal principle that construction of government buildings does not fall within the ambit of Commercial or Industrial Construction Service nor within construction of a residential complex, the Tribunal accepted the appellant's reliance on precedents cited and held that the demand of service tax in respect of these works is not sustainable. The court followed the judgments relied upon by the appellant as directly supporting this conclusion and set aside the impugned demand on this ground. [Paras 4]

Demand under construction service for the specified works does not fall within the taxable categories and is not sustainable.

Sub-contractor liability for service tax - Extended period / limitation for service tax demands - The demand raised for the extended period is not sustainable because the appellant rendered services as a sub-contractor and there was no malafide suppression in view of binding precedent resolving sub-contractor liability. - HELD THAT: - The Tribunal observed that the appellant acted as a sub-contractor. It noted the earlier litigation on whether sub-contractors are liable to pay service tax and recorded that the larger bench decision in M/s. Melange Developers Pvt Ltd resolved that controversy. In light of that authoritative decision, the Tribunal found that there could be no inference of malafide intention or suppression by the appellant to evade service tax and consequently the invocation of the extended period could not be sustained. For these reasons the demand was held to be time-barred or otherwise unsustainable on limitation grounds. [Paras 4]

Demand for the extended period is not sustainable against the appellant who was a sub-contractor.

Final Conclusion: The impugned order sustaining the demand was set aside and the appeal was allowed: the construction works for the Income Tax Department and Central Administrative Tribunal are not taxable as commercial/industrial construction or residential complex construction, and the extended-period demand against the sub-contractor is unsustainable.

Supply of tangible goods for use (service) - Transfer of the right to use goods as a deemed sale - Right of possession and effective control - Deemed sale under Article 366(29A)(d) of the Constitution - VAT liability precluding service tax on same transaction - Contract-construction to determine nature of transaction

Transfer of the right to use goods as a deemed sale - Right of possession and effective control - Supply of tangible goods for use (service) - VAT liability precluding service tax on same transaction - Contract-construction to determine nature of transaction - Leasing of Gas Genset to M/s. Gujarat Agrochem Ltd. amounted to transfer of the right to use (with transfer of possession and effective control) and therefore constituted a deemed sale liable to State VAT and not a taxable service of 'supply of tangible goods for use'. - HELD THAT: - The Tribunal examined the lease agreement dated 07.09.2005 and reproduced its material clauses. Reading the contract as a whole, the terms vested beneficial possession and exclusive use with the lessee during the lease term; the lessee bore responsibilities for custody, operation and upkeep, and the arrangement evidenced transfer of effective control. The appellant had discharged State VAT treating the transaction as a deemed sale under Article 366(29A)(d) of the Constitution. Applying settled principles-(i) the nature of the contract must be ascertained from its terms read as a whole; (ii) transfer of the right to use goods (deemed sale) arises where possession and effective control are transferred; and (iii) where a transaction falls within the domain of State tax as a deemed sale and VAT is payable/paid, it does not attract service tax as 'supply of tangible goods for use'-the Tribunal found the transaction to be a deemed sale. The decision relied on consistent precedents (including G.S. Lamba, AIMS Pharma, GIMMCO and related authorities) applying the tests of possession, control, exclusivity and contractual allocation of rights and obligations to distinguish deemed sale from service. Having applied these principles to the agreement before it, the Tribunal concluded the impugned demand of service tax was not sustainable.

Impugned order confirming service-tax demand set aside; appeal allowed.

Final Conclusion: On construction of the lease agreement and in view of payment of VAT treating the transaction as a deemed sale, the Tribunal held the leasing of the Gas Genset transferred possession and effective control to the lessee and therefore was not liable to service tax under 'supply of tangible goods for use'; the impugned order is set aside and the appeal is allowed.

Exemption under Notification No. 67/95-CE - captively manufactured goods and captive consumption - clandestine removal - valuation for captive consumption under Rule 8 and CAS-4 - time-bar and limitation in duty demands - remand for fresh adjudication

Exemption under Notification No. 67/95-CE - captively manufactured goods and captive consumption - Whether the crane manufactured and used captively by the appellant is eligible for exemption under Notification No. 67/95-CE - HELD THAT: - The Tribunal observed that goods manufactured and used within the factory are prima facie eligible for exemption under Notification No. 67/95-CE but the notification contains specific conditions whose compliance must be verified. The adjudicating authority's order did not explicitly refer to Notification No. 67/95-CE nor examine its conditions. Because the authority did not undertake the required verification of the notification's conditions, the issue of exemption was not finally adjudicated and requires fresh consideration by the Adjudicating Authority.

Remanded to the Adjudicating Authority for fresh adjudication on eligibility under Notification No. 67/95-CE and verification of its conditions.

Clandestine removal - captively manufactured goods and captive consumption - Whether charge of clandestine removal is established against the appellant where the crane remained within the factory and was not removed - HELD THAT: - The Tribunal recorded the appellant's contention that the crane was not removed from the factory and therefore clandestine removal was not made out. The impugned order did not resolve this factual and legal controversy in a manner that addresses the appellant's submissions. Given the absence of detailed findings on whether removal occurred and whether clandestine removal can be said to have taken place, the question must be re-examined by the Adjudicating Authority.

Remanded for fresh consideration of the charge of clandestine removal with appropriate findings on the factual position.

Valuation for captive consumption under Rule 8 and CAS-4 - Whether the valuation adopted by the Adjudicating Authority for determining excise liability on the crane for captive consumption conforms to Rule 8 and Cost Accounting Standard (CAS-4) - HELD THAT: - The Tribunal found that the adjudicating authority did not follow the Cost Accounting Standard CAS-4 in arriving at the value for discharging excise duty under Rule 8 for captive consumption. As the valuation methodology employed was not in accordance with the applicable cost accounting standard and rule, the correctness of the value and resulting demand was not finally determined and requires re-evaluation consistent with CAS-4 and Rule 8.

Remanded to the Adjudicating Authority to re-assess valuation applying Rule 8 and CAS-4 and pass fresh findings.

Time-bar and limitation in duty demands - Whether the demand is time-barred having regard to the appellant's explanation and absence of intent to evade duty - HELD THAT: - The Tribunal noted the appellant's plea that there was no suppression of facts and that the goods remained in the factory, and that the matter arose from scrutiny of records without intent to evade duty. The adjudicating authority did not conclusively resolve the contention that the demand was barred by limitation. In view of these unresolved contentions and the need to examine the factual matrix and legal position on limitation, the matter must be reconsidered.

Remanded for fresh consideration of limitation/time-bar defence by the Adjudicating Authority.

Final Conclusion: The impugned order is set aside and the appeals are allowed by way of remand; all issues have been kept open and the matters are remitted to the Adjudicating Authority for fresh adjudication in accordance with the observations made by the Tribunal.

Eligibility of cenvat credit for supporting structures of capital goods - retrospective operation of the Explanation to Rule 2(k) of the Cenvat Credit Rules, 2004 - user test - integral part doctrine

Retrospective operation of the Explanation to Rule 2(k) of the Cenvat Credit Rules, 2004 - Whether the Explanation introduced to Rule 2(k) by Notification No.16/2009-CE (NT) dated 07.07.2009 operates retrospectively so as to deny credit availed prior to 07.07.2009. - HELD THAT: - The Tribunal examined the adjudicating authority's reliance on the Larger Bench decision in Vandana Global Ltd. to hold that the Explanation had retrospective effect. The Tribunal noted that the Larger Bench decision has been set aside by the Hon'ble Chhattisgarh High Court and that the Hon'ble Jurisdictional High Court in Thiru Arooran Sugars held that the Explanation does not have retrospective application. Applying those precedents, the Tribunal concluded that the Explanation introduced on 07.07.2009 does not operate retrospectively and therefore cannot be applied to disallow credit that was validly availed on invoices dated prior to 07.07.2009. [Paras 6, 7]

The Explanation to Rule 2(k) does not have retrospective application; credit availed on invoices dated prior to 07.07.2009 cannot be denied on that ground.

Eligibility of cenvat credit for supporting structures of capital goods - user test - integral part doctrine - Whether MS angles, channels and beams used to erect supporting structures for plant and machinery qualify for cenvat credit under the user test or as integral parts of capital goods. - HELD THAT: - The Tribunal applied the user test and the principle that structurals and foundations which support plant and machinery, and thereby hold the plant and machinery in position, are integral to such capital goods. Reliance was placed on the decision of the Jurisdictional High Court in Thiru Arooran Sugars which found that MS structurals supporting plant and machinery used in manufacturing are within the scope of inputs and eligible for cenvat credit. On the facts, the Tribunal accepted that the goods in question were used to support capital goods and thus qualified for credit for invoices falling before 07.07.2009. Only invoices dated after 07.07.2009 were treated as outside that temporal scope. [Paras 7, 8, 9]

MS angles, channels and beams used to support plant and machinery qualify for cenvat credit under the user test / as integral parts of capital goods; credit allowed for invoices prior to 07.07.2009 and disallowed for invoices dated after that date.

Final Conclusion: Appeal partly allowed: credit granted in respect of all invoices dated prior to 07.07.2009; credit disallowed only for the three invoices dated after 07.07.2009; impugned order modified accordingly with consequential reliefs, if any.

Deemed manufacture under Section 2(f)(iii) - parts, components and assemblies falling under Sl. No. 100 of the Third Schedule - classification as Special Purpose Vehicles - unit container and labelling in relation to marketability - extended period of limitation - duty, interest and penalty

Classification as Special Purpose Vehicles - parts, components and assemblies falling under Sl. No. 100 of the Third Schedule - Concrete mixers and pumps sold by the appellant are not necessarily Special Purpose Vehicles and their spares are not automatically parts of vehicles under Sl. No. 100. - HELD THAT: - The Tribunal found on the materials and invoices that the concrete mixers and pumps were cleared and capable of being used as such (including on static platforms) without being mounted on a chassis; only a small proportion were mounted on customer supplied chassis and no consideration for chassis was collected. The department's factual allegation that the goods must necessarily be mounted on chassis was held incorrect. Since the impugned products can be used independently, their spares cannot be treated, as a matter of law, as parts of vehicles for the purposes of Sl. No. 100 merely because they may subsequently be mounted. The Board circular relied upon applies to items commonly known and sold in the market as automobile parts; the Tribunal held that the spares in question are marketed and known as parts of the concrete equipment and not as automobile parts, so the circular is not determinative here. [Paras 19, 20]

Allegation that mixers/pumps are necessarily SPVs and that their spares fall under Sl. No. 100 is rejected; findings in favour of the appellant.

Deemed manufacture under Section 2(f)(iii) - unit container and labelling in relation to marketability - Repacking from bulk into variable small packets and affixing labels in the facts of this case does not constitute manufacture under Section 2(f)(iii). - HELD THAT: - The Tribunal applied precedents and factual findings to conclude that the spares were marketable in their original bulk form and the appellant repacked and labelled items post sale for identification and transport to meet customer requirements. The polythene bags/containers used were not unit containers designed to hold a predetermined quantity; packing was done after sale and varied with orders. Reliance on authorities (Lakme, Lupin, Taxchem and related discussions on 'unit container' and 'marketability') supported the view that such repacking/labeling, which does not render an otherwise non marketable item marketable to consumers generally, is not 'manufacture' under Section 2(f)(iii). Hence the activity did not attract excise levy as deemed manufacture. [Paras 20, 21]

Repacking and labelling carried out by the appellant do not amount to deemed manufacture; demand on this ground is unsustainable.

Extended period of limitation - duty, interest and penalty - Extended period of limitation, and consequential demand of duty, interest and penalties, cannot be invoked in the circumstances of this case. - HELD THAT: - The Tribunal observed the principal question to be interpretational and noted absence of any positive act of suppression or intent to evade duty by the appellant; ER 1 returns described goods and invoices supported the factual position that products were cleared as such. Given the interpretational nature of the dispute and lack of suppression, invocation of extended period was unfounded. On the same basis the Tribunal held that interest and penalties imposed in consequence of the demand could not be sustained. [Paras 22, 23, 24]

Extended period, and the demand of duty, interest and penalties, are set aside.

Final Conclusion: The Tribunal allowed the appeals, holding that (i) the concrete mixers and pumps could be sold and used without being mounted on chassis and therefore are not necessarily SPVs nor do their spares automatically fall under Sl. No. 100; (ii) the appellant's repacking and labelling activity did not amount to deemed manufacture under Section 2(f)(iii); and (iii) there was no justification to invoke the extended period or to sustain the demands of duty, interest and penalties; the impugned orders are set aside with consequential reliefs.

Includability of sales tax concession in assessable value - extended period of limitation - penalty under Section 11AC of the CEA, 1944 - absence of suppression - Board Circular No. 1063/2/2018-CX - extended period not invocable - remand for computation of duty for normal period

Includability of sales tax concession in assessable value - Super Synotex (India) Ltd. - binding precedents - Sales tax concession retained by the assessee is required to be added to the assessable value for levy of Central Excise duty. - HELD THAT: - The Tribunal held that the question of includability is no longer open in view of the decision of the Hon'ble Supreme Court in Super Synotex (India) Ltd. The Bench applied that precedent and concluded that the sales tax concession retained by the appellant must be included in the assessable value for central excise duty purposes. [Paras 6]

Sales tax concession retained by the appellant is to be added to the assessable value for levy of Central Excise duty.

Extended period of limitation - absence of suppression - Board Circular No. 1063/2/2018-CX - extended period not invocable - Demand confirmed by invoking the extended period of limitation is not sustainable where there is no suppression and the Board has clarified extended period is not invocable in such cases. - HELD THAT: - The Tribunal found no evidence of suppression by the appellant: details of VAT collected and retained were disclosed in audited accounts and, at the relevant time, inconsistent tribunal decisions existed, so the appellant could not be faulted. The Bench further relied on Board Circular No. 1063/2/2018-CX which, after considering relevant precedents, clarified that the extended period is not invocable in such cases. In view of absence of suppression and the Board's clarification, the demand raised by invoking the extended period was set aside. [Paras 7, 10]

Demand confirmed by invoking the extended period of limitation is set aside; appellant liable to pay duty only for the normal period of limitation.

Penalty under Section 11AC of the CEA, 1944 - absence of suppression - Penalty imposed under Section 11AC is untenable where there is no suppression and the adjudicating authority has not recorded proper findings to justify penalty. - HELD THAT: - The Tribunal observed that the adjudicating authority failed to make any proper finding of suppression or positive wrongful act by the appellant. Given that divergent tribunal decisions existed and the appellant had disclosed the VAT details in audited financials, the appellant could not be faulted for not including the concession. Consequently, and noting the adjudicating authority did not give proper reasons for imposing penalty, the penalty under Section 11AC was held not tenable and set aside. [Paras 8, 10]

Penalty imposed under Section 11AC of the CEA, 1944 is set aside.

Remand for computation of duty for normal period - Matter remanded for calculating the duty payable for the normal period of limitation with consequential relief, if any. - HELD THAT: - Having held that the extended period is not invocable and that the appellant is liable only for duty within the normal period of limitation, the Tribunal remanded the matter for computation of duty payable for that period and for giving consequential relief as per law. [Paras 11]

Appeal disposed by remanding for calculation of duty payable for the normal period of limitation and consequential relief.

Final Conclusion: Appeal partially allowed: sales tax concession must be included in assessable value (per Supreme Court), demand raised by invoking extended period set aside (appellant to pay duty for normal period only), penalty under Section 11AC set aside, and the matter remanded for computation of duty for the normal period with consequential relief.

Grant of bail - Object of bail - Personal liberty under Article 21 - Pre-conviction detention - Likelihood of tampering with prosecution evidence - Judicial discretion under Section 439 Cr.P.C.

Grant of bail - Object of bail - Personal liberty under Article 21 - Judicial discretion under Section 439 Cr.P.C. - Likelihood of tampering with prosecution evidence - Petition for regular bail by the petitioner accused in FIR No. 553 dated 30.07.2016 was allowed. - HELD THAT: - The Court applied well established principles that the object of bail is to secure attendance at trial and that pre conviction detention must not be used as punishment but only when necessary to ensure fair trial or prevent tampering with evidence. The Court noted the petitioner is a senior citizen, has no prior complaints during service, and the challan has been presented. While acknowledging the State's contention regarding possible collusion and influence on witnesses, the Court observed that denial of bail is justified only upon material suggesting a likelihood of tampering or flight. Relying on the guiding dicta that grant of bail is the rule and refusal the exception and that judicial discretion under Section 439 Cr.P.C. must be exercised judiciously, the Court, without expressing any view on merits, concluded that continued custody was not required to secure the trial and ordered release on bail subject to furnishing bonds/sureties to the satisfaction of the trial court or competent magistrate. [Paras 7, 8, 9, 10, 11]

Petitioner released on bail on furnishing bail bonds/surety bonds to the satisfaction of the trial Court/Duty Magistrate/Chief Judicial Magistrate.

Final Conclusion: Bail petition allowed; petitioner, a senior citizen in custody since 22.08.2023, is directed to be released on furnishing bail/surety bonds to the satisfaction of the trial court or appropriate magistrate, without prejudice to the merits of the prosecution.

Penalty under Section 27(3) of the TNVAT Act - wilful non-disclosure of assessable turnover - penalty must form part of the assessment order - no jurisdiction to impose penalty by separate proceedings after assessment

Penalty under Section 27(3) of the TNVAT Act - penalty must form part of the assessment order - wilful non-disclosure of assessable turnover - no jurisdiction to impose penalty by separate proceedings after assessment - Whether the assessing authority could initiate separate penalty proceedings under Section 27(3) of the TNVAT Act after passing assessment orders without imposing penalty. - HELD THAT: - The Court held that Section 27(3) permits imposition of penalty only in the course of making an assessment under clause (a) of sub section (1) and requires a definite finding of wilful non disclosure of assessable turnover before penalty can be levied. The Division Bench decision in The Deputy Commissioner (C.T.), Coimbatore Vs. V.S.R.Ramaswami Chettiar and Bros was relied upon for the proposition that separate penalty orders are not permissible where the statutory scheme contemplates penalty as part of the assessment. Given the similarity between Section 27(3) of the TNVAT Act and Section 16(2) of the TNGST Act, the Court concluded that once an assessment order is passed without imposing penalty, the assessing authority has no jurisdiction to initiate fresh, independent penalty proceedings at a later date. Applying these principles to the facts, the impugned separate penalty orders dated 15.03.2023 were unsustainable. [Paras 6, 7, 8]

Separate penalty proceedings under Section 27(3) of the TNVAT Act initiated after assessment orders are impermissible; the impugned penalty orders dated 15.03.2023 are quashed.

Final Conclusion: The writ petitions are allowed; the orders dated 15.03.2023 imposing penalty under Section 27(3) of the TNVAT Act for the assessment years 2010-2011 to 2014-2015 are quashed and the connected miscellaneous petitions are closed.