TaxTMI Updates e-Newsletter
Jan 22,2026

Validity of SCN and orders - contravention to the statutory mandate provided u/s 6(2)(b) of CGST/DGST Act - petitioner is willing to appear before the authority who has passed the impugned order provided the authority must consider the reply and the material that the petitioner has placed on record in response to the show-cause notice and after granting opportunity of hearing may pass an appropriate order - HELD THAT:- It is deemed appropriate to allow the present petition partly thereby quashing and setting aside the impugned order dated 6th February 2025.

The petitioner is directed to appear before the authority who has issued the show-cause notice along with the written submissions and the documents he intends to place on record on 16th February 2026.

Petition allowed in part.

Refund of unutilized input tax credit in terms of Section 54(3) of the Central Goods and Services Tax Act, 2017 - rejection on the ground that the petitioner did not satisfy the conditions of ‘export of services’ under the Integrated Goods and Services Tax Act, 2017 - petitioner was acting as an agent/intermediary of its parent company - HELD THAT:- Although the appellate authority has taken into consideration certain clauses of the agreement, in the light of what has been held by this Court in Sundyne Pumps and Compressors India Pvt. Ltd. [2025 (6) TMI 1259 - BOMBAY HIGH COURT] and qua the applicability of the said circular(s)s to the service agreement in question, the matter would require an appropriate examination by the appellate authority on all the points urged on behalf of the petitioner and the specific findings recorded.

It would be in the interest of justice to remand the proceedings to the appellate authority for de novo consideration of the department’s appeal, as allowed by the impugned order dated 22 February 2022.

The impugned order is quashed and set aside - proceedings are remanded to the appellate authority (Joint Commissioner, CGST & CX, Appeals-I, Mumbai) for de novo consideration and for a fresh order to be passed in accordance with law - Petition allowed by way of remand.

Availment of ITC - Entitlement for concessional rate of tax in terms of S.No.9 (II) to N/N. 11/2017- Central Tax (Rate) dated 28.06.2017 - demand proposed in Show Cause Notice in DRC -01 dated 26.03.2024 has been confirmed to which the petitioner filed a reply in Form GST DRC-06 on 04.03.2025 - HELD THAT:- In the reply in Form GST DRC-06 dated 04.03.2025, the petitioner has not given the particulars to substantiate that the petitioner was indeed entitled for the benefit of S.No.9 to the aforesaid notification. Instead, attempt is made now by drawing attention to the invoices of the petitioner on the strength of which the Input Tax Credit was availed.

There are several disputed questions of fact which cannot be considered by this Court under Article 226 of Constitution of India. The Appellate Authority has been prescribed under the Act to examine the same. However, the petitioner has slept over the rights by not filing the statutory appeal against the impugned assessment order dated 27.05.2025 within the prescribed time.

At best, liberty can be granted to the petitioner to file a statutory appeal before the Appellate Authority within a period of thirty days from the date of receipt of a copy of this order, subject to the petitioner depositing 25% of the disputed tax within such time - Petition disposed off.

Rejection of Petitioner's appeal against the Assessment order on the ground of time limitation - Petitioner had already pre-deposited 10% of the disputed tax that was confirmed vide impugned order - HELD THAT:- The Petitioner had not opted for a personal hearing in response to the Show Cause Notice in DRC-01 dated 26.11.2024 at the time of filing reply on 14.12.2024. The reply prima-facie appears to be inadequate reply and perhaps on account of the same, the assessment order has been passed rejecting the defence of the Petitioner.

In any event, it was incumbent on the part of the Respondents to have given a proper finding and if desired, the Petitioner may have been called for a personal hearing if the reply was unintelligible or insufficient. Equally, it was incumbent on the part of the Petitioner to have opted for personal hearing particularly when the substantial demand was made at the notice that preceded the notice in DRC-01 dated 26.11.2024 - to balance the interest of the Petitioner and the Respondents, the case is remitted back to the 1st Respondent to redo the exercise afresh, subject to Petitioner depositing another 15% of the disputed tax in cash from the Petitioner's Electronic Cash Register within a period of thirty days from the date of receipt of a copy of this order, over and above the 10% already deposited at the time of filing of the appeal on 30.09.2025.

Petition disposed off by way of remand.

Violation of principles of natural justice - ex-parte impugned order - Petitioner failed to respond to the SCN in DRC – 01 and appear for the personal hearing - belated availing of Input Tax Credit - HELD THAT:- If the Petitioner has satisfied the other requirements of Section 16 of the respective GST Enactments, the Petitioner will be entitled to avail the Input Tax Credit even if the Petitioner had not filed the rectification application as is contemplated under Section 16(6) of the respective GST Enactments, as it has been held to be directly and not mandatory.

Considering the same, the impugned order is quashed and the case is remitted back to the Respondent to pass fresh orders on merits. However, the Petitioner shall deposit the entire amount confirmed towards penalty for belated filing of the Annual Return in GSTR 9 and GSTR 9C and amount confirmed towards belated filing of the monthly returns and towards non-submission of the documents as ordered in the impugned order within a period of 30 days from the date of receipt of a copy of this order.

Petition disposed off by way of remand.

Refund on export of goods - Rejection of Petitioner’s application for rectification of the order - although the Petitioner had failed to respond to the Show Cause Notice, the Petitioner had attempted to have the same rectified by filing an application for rectification u/s 161 of the respective GST Enactments - HELD THAT:- It is inconceivable as to how the amount could have been refunded to the Petitioner on the tax that was payable for the export of goods and services without payment of tax. Only if tax was paid at the time of export, a refund in the form of rebate could have been availed by the Petitioner on such taxes - At best, the Petitioner could have been entitled to avail refund of Input Tax Credit on such exports. Thus, the refund orders which have been kept along with the Typed Set of documents appears to be prima-facie irregular and the amount which have been refunded back to the Petitioner ought to have been recovered.

Considering the fact that the Petitioner have also not responded to the Show Cause Notice in DRC-01 that preceded the impugned order, the impugned order is quashed and the case is remitted back to the Respondent to pass a fresh order on merits, subject to the Petitioner depositing the entire amount of disputed tax covered by the impugned order and also the refund remitted vide two refund orders for the exports made during the month of December 2017- 2018 and January 2018-2019 in cash from the Petitioner's Electronic Cash Register within a period of thirty days from the date of receipt of a copy of this order.

Petition disposed off by way of remand.

Wrongful availment of Input Tax Credit contrary to Section 16 of respective GST Enactments - entitlement to invoke Amnesty under Section 128A read with aforesaid N/N. 21/24-Central Tax dated 08.10.2024 as proceedings were initiated under Section 74 of the respective GST Enactments - HELD THAT:- Since the Petitioner has already deposited the entire tax amount on 03.05.2024 before filing the application on 01.03.2025 under Section 128A of the respective GST Enactments, read with aforesaid N/N. 21/24- Central Tax dated 08.10.2024, liberty is given to the Petitioner to challenge the assessment order before the Appellate Authority within a period of 30 days from the date of receipt of a copy of this order.

In case, the Petitioner files such an appeal within the time stipulated above, the Appellate Authority shall consider and dispose of the same on merits and in accordance with law as expeditiously as possible without further reference to limitation - In view thereof, all recovery proceedings shall be kept in abeyance for a period of six months from the date of receipt of a copy of this order.

Petition disposed off.

Violation of principles of natural justice - ex-parte impugned order - petitioner failed to file reply to impugned order - Demand confirmed on account of mis-match in details of the auto populated Input Tax Credit and GSTR 3B filed by the petitioner during the period in dispute - HELD THAT:- Since the impugned order dated 26.02.2024 is an exparte order, the impugned order is quashed and the case is remitted back to the 1st Respondent to re-do the exercise and pass a fresh order on merits subject to petitioner depositing 50% of the disputed tax within a period of 30 days from the date of receipt of a copy of this order - Within such time, the Petitioner shall also file a reply to the Show Cause Notice in Form DRC-01 dated 01.09.2023 together with requisite documents to substantiate the case by treating the impugned Order dated 26.02.2024 as an addendum to the Show Cause Notice dated 01.09.2023.

In case there is any overlap between the demand confirmed vide order dated 15.05.2023 and the impugned assessment order dated 26.02.2024, the petitioner may explain the same in the reply and make such a pre-deposit within a period of 30 days from the date of receipt of a copy of this order - In case the Petitioner complies with the above stipulations, the 1st Respondent shall proceed to pass a final order on merits after considering the petitioner’s reply and in accordance with law as expeditiously as possible, preferably, within a period of three months of such reply/pre-deposit. Subject to the Petitioner complying with the above stipulations, the attachment of the bank account of the Petitioner shall also stand automatically vacated.

Petition disposed off.

Violation of principles of natural justice - Petitioner’s reply sent by RPAD has not been considered - no scope for clubbing demand relating to multiple tax periods - HELD THAT:- Considering the fact that the Order-in-Original has been passed without considering the reply of the Petitioner dated 30.08.2022, the case is liable to be remitted back to the concerned Respondent to pass a fresh order on merits.

The Petitioner has approached this Court, almost 7 months after the impugned Order dated 06.01.2025 - The limitation for filing the appeal against the orders both dated 21.01.2025 impugned in W.P.Nos.33529 and 33533 of 2025 have also expired.

Therefore, to balance the interest of the Petitioners and the Respondent, the cases are remitted back to the concerned Respondent to re-do the exercise, after taking note of the Petitioner’s reply dated 30.08.2022 and any other reply that may have been filed by the Petitioners, subject to Petitioners depositing the disputed tax as tabulated below within the period of 30 days from the date of receipt of a copy of this order.

Petition disposed off by way of remand.

Blocking of the Input Tax Credit - reversal of inadmissible input tax credit with interest and penalty - application of mind by the Respondent while passing the impugned order or not - principles of natural justice - HELD THAT:- The reasons given in the impugned order indicates that there is an application of mind by the Respondent while passing the impugned order. The Petitioner has merely produced the invoices and e-way bill, however, the Petitioner has not produced any other documents to substantiate that indeed there was movement of goods.

There are no merits in this Writ Petition. However, liberty is granted to the Petitioner to file a statutory appeal before the Appellate Commissioner within a period of thirty days from the date of receipt of a copy of this order. It is open for the Petitioner to substantiate the reply with the documents and canvass the issues before the Appellate Commissioner.

Petition disposed off.

Profiteering - construction services - failure to pass on the benefit of input tax credit through commensurate reduction in price - contravention of Section 171 of the CGST Act, 2017 - HELD THAT:- This Tribunal finds that while profiteering to the quantified extent of Rs. 1,37,672/- (comprising base amount Rs. 1,22,921/- plus GST Rs. 14,751/-) did initially arise from the Respondent's pricing structure but the Respondent has voluntarily and fully discharged its obligation under Section 171 of the CGST Act, 2017 by passing on Rs. 1,40,732/- to the Applicant, which is more than the commensurate benefit accrued of the Respondent.

Accordingly, the investigation report dated 17.12.2024 submitted by the Director General of Anti-Profiteering is hereby accepted in its entirety. The proceedings relating to the complaint of Shri Pratik Poojary (Applicant) against Ms Arkade Developers Limited (formerly Arkade Developers Pvt. Ltd.) (Respondent) are hereby closed, with a finding that the Respondent has satisfied and discharged the statutory mandate of Section 171 of the Central Goods and Services Tax Act, 2017 in respect of the sale of the residential unit in the “Arkade Earth – Bluebell” project, Mumbai, and that no further action or remedial measure is warranted as no contravention of Section 171 of the CGST Act has been established.

Application disposed off.

Profiteering - Construction Services - benefit of ITC passed on by the Respondent to its buyers or not - HELD THAT:- The dispute relating to passing of the ITC benefit to flat buyers has been arrived at by the parties.

In that view of the matter, the report of the DGAP is accepted and matter is closed.

Profiteering - calculation of the profiteered amount - correctness of methodology adopted by DGAP for investigation - HELD THAT:- Keeping in view the spirit of principal laid down by Hon’ble High Court of Delhi in the case of Reckitt Benckiser India Pvt. Ltd. Vs. Union of [2024 (1) TMI 1248 - DELHI HIGH COURT], submissions made by the respondent regarding comparison of the GST availed on the actual Goods and Services purchased in the Post GST period with the ITC available on such goods and services by applying the applicable rates on such goods and services in the pre- GST period carries weight. The contentions contained in the written submission as well made by learned counsel during the course of personal hearing have merits.

Since, the respondent have claimed that they have submitted the data and documents of actual goods and services purchased in the post-GST period and the respective applicable rates on goods and services in Pre- GST period, DGAP needs to verify this data.

The reinvestigation is required by the DGAP. The matter is sent back to the DGAP for the re-investigation in accordance with the provision contain in the Rule 133(4) of the Goods and Services Tax Act, 2017.

Matter disposed off.

Input Tax Credit - plant and machinery - works contract services - construction of an immovable property - used or intended to be used in the course or furtherance of business - immovable property - movability, object of annexation, intendment and marketability tests - blocked under Section 17(5)(c) and 17(5)(d)

Input Tax Credit - plant and machinery - works contract services - construction of an immovable property - movability, object of annexation, intendment and marketability tests - blocked under Section 17(5)(c) and 17(5)(d) - Eligibility of input tax credit on GST paid for supply and installation of firefighting system and public health engineering for expansion of factory - HELD THAT: - The Appellate Authority examined the contract and the nature of the installations and held that the contract is a composite works contract for supply and installation of firefighting and public health systems which, on installation, become assimilated into the building and form part of the immovable property. Applying the definition of "plant and machinery" (apparatus, equipment and machinery fixed to earth by foundation or structural support and used for making outward supply) the Authority found that these installations do not satisfy the requirement of being "used for making outward supply of goods or services" and, in any event, their assimilation into the building, the contractual clause delivering "permanent work to the owner", and the results of the movability/object of annexation/intendment/functionality/permanency/marketability tests demonstrate they form part of the immovable property. Consequently, GST paid on the works contract service and on goods/services used for construction is not eligible as ITC because it is barred by clauses (c) and (d) of Section 17(5). The Authority also observed that mandatory nature of such installations under factory laws does not, by itself, confer entitlement to ITC if the statutory restrictions in Section 17(5) apply. As the main query was answered against the appellant, the alternate question on the timeline for availing ITC on the "advance component" of the contract did not arise and was not decided. [Paras 5]

ITC on GST paid for the firefighting system and public health engineering is not available to the appellant as it is blocked by Section 17(5)(c) and 17(5)(d); the AAR ruling is upheld.

Final Conclusion: The Appellate Authority upheld Advance Ruling No.31/ARA/2025 dated 18.08.2025 and dismissed the appeal: ITC on the firefighting system and public health engineering for the new factory is ineligible under Section 17(5)(c) and (d); the secondary query on timing of ITC for the advance component did not arise.

Input Tax Credit eligibility - Blocked credit under Section 17(5)(c) and 17(5)(d) of the CGST/TNGST Acts - Definition of "plant and machinery" under the Explanation to Section 17 - Movability and immovable property tests (nature of annexation, object of annexation, intendment of parties, functionality, permanency, marketability) - Distinction between articles used for making outward supply and supportive infrastructure - Binding effect of advance ruling on the applicant

Input Tax Credit eligibility - Blocked credit under Section 17(5)(c) and 17(5)(d) of the CGST/TNGST Acts - Definition of "plant and machinery" under the Explanation to Section 17 - Movability and immovable property tests (nature of annexation, object of annexation, intendment of parties, functionality, permanency, marketability) - Whether ITC is eligible on electrical installation works carried out for expansion of factory for manufacturing activity - HELD THAT: - The Authority examined whether the electrical works (LT panels, busducts, LT electrical works, lightning protection, light fixtures and associated civil works) fall within the Explanation to Section 17 as "plant and machinery" or otherwise escape the bar in clauses (c) and (d) of Section 17(5). The explanation requires apparatus, equipment or machinery to be fixed to earth by foundation or structural support and used for making outward supply. The Authority held that the expression "plant and machinery" must be read in toto and the electrical installation cannot be characterised as equipment or machinery; at best the appellant sought to treat it as an "apparatus" by relying on dictionary meanings, but the installations are generic in function (power distribution, lighting, protection, enabling cranes and other machinery) rather than a specific apparatus or self-contained equipment. Applying established tests of movability/immovability (nature and object of annexation, intendment of parties, functionality, permanency and marketability), and having regard to contractual terms providing for delivery of "permanent work to the owner", the Authority concluded that these installations cease to have an independent existence once installed and form part of immovable property for permanent beneficial enjoyment of the land. Distinguishing the factual matrix and purposive features of precedents and CBIC circulars relied upon by the appellant (which concern OFC networks, direct transmission equipment or different factual constructs), the Authority found those not to be applicable. Consequently the supplies are caught by clauses (c) and (d) of Section 17(5) and ITC is blocked. [Paras 5]

ITC on the electrical installation works for the new factory is not eligible and is blocked under Sections 17(5)(c) and 17(5)(d) of the CGST/TNGST Acts; the AAR ruling is upheld on this point.

Input Tax Credit eligibility - Binding effect of advance ruling on the applicant - Whether timeline to avail ITC on invoices billing an "advance component" requires a separate ruling in the present appeal - HELD THAT: - The second query on the timeline to avail ITC in respect of the advance component was dependent on the primary question of whether ITC is available on the contract at all. Having answered the main question in the negative (ITC blocked), the Authority held that the subsidiary question on timeline does not arise for determination in this appeal. [Paras 5]

The question on the timeline to avail ITC on the advance component does not arise and is not decided.

Final Conclusion: The Appellate Authority upholds Advance Ruling No. 32/ARA/2025 dated 18.08.2025 and dismisses the appeal; ITC on the electrical installation for the new factory is held to be ineligible under Sections 17(5)(c) and 17(5)(d), and the ancillary question on timeline is not examined.

Broken period interest paid on purchase of securities - entitlement to claim deduction of interest paid on purchase of securities constituting stock for the broken period till the date of acquisition in terms of Section 37 - delay of 959 days in filing the Special Leave Petition

As decided by HC [2023 (1) TMI 1438 - TELANGANA HIGH COURT] Tribunal has correctly held that the respondent had purchased securities to hold them as stock-in-trade. Therefore, interest paid on such securities would be an allowable deduction.

HELD THAT:-There is a gross delay of 959 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner. Even otherwise, we see no reason to interfere with the impugned order passed by the High Court.

Validity of reopening of assessment - period of limitation - time limits specified under the provisions of sec 149(1)(b) of the old regime - Scope of new regime - time limit prescribed u/s 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before? - As decided by HC [2024 (11) TMI 1578 - DELHI HIGH COURT] in the present case, the period of six years from the end of the relevant assessment year 2016-17 expired on 31.03.2023. The impugned notice has been issued thereafter, and the same is thus, barred by limitation.

HELD THAT:- We do not find any case is made out for condoning delay of 309 days in filing the present petition.

Even on merits we do not find any case is made out for interference. The application for condonation of delay as well as the Special Leave Petition are dismissed.

Reopening of assessment - Deemed dividend u/s 2(22)(e) - interest free loan received by the petitioner from RRPR during the assessment year under consideration - petitioner being 50% shareholder and Director of RRPR was advanced a loan, subject of course to statutory restriction - HELD THAT:- A simple look at the above quoted part of the reasons recorded shows that the Assessing Officer was of the view that while giving her explanation in relation to the earlier proceedings under Section 147, it was incumbent upon the petitioner to have said that there is purported/deemed income resulting from interest – free loan received by the petitioner under Section 2(24)(iv) of the Act when she got an opportunity to explain why the amount of interest-free loan should not be treated to be a dividend.

It is not in dispute that the audited books of accounts, balance sheet, so also the petitioner’s account in RRPR were produced by the petitioner during the earlier proceedings. As such, the primary fact of having received an interest-free loan from RRPR was disclosed by the petitioner, in response to the notice dated 06.03.2013 issued during the first reassessment proceedings under Section 147/148 of the Act of 1961. Even a glance over the balance sheet, more particularly notes to accounts in Schedule-B appended with the balance sheet shows that the auditor had clearly made a note that during the year (AY 2009-10), RRPR had given interest-free loan to Dr. Prannoy Roy and the petitioner respectively, being directors of the company.

Therefore, it cannot be said that the petitioner had failed to disclose true and material facts before the Assessing Officer. Invocation of the extended period of limitation on the ground that the petitioner failed to disclose material facts is thus absolutely baseless. Consequently, issuance of the notice is clearly contrary to Section 149 of the Act of 1961 and thus fundamentally and inherently without jurisdiction.

Apart from the jurisdictional aspect on the ground of limitation, we are of the view that initiation of the reassessment proceedings on the allegation that the petitioner has failed to disclose truly and fully all necessary facts itself is bad in the eye of law. It is settled position of law that an assessee is required to disclose the primary fact about the transaction. Secondary fact or inference, which can be drawn from such fact is not his obligation.

The facts of the present case themselves speak volumes, as to how the proceedings are arbitrary and contrary to the statutory provisions besides being against the fundamental principles of adjudicatory process. In the facts of the case though, no judicial precedents or pronouncements are required to quash the impugned proceedings.

On the position regarding reopening of assessment, Hon’ble the Supreme Court in the cases of New Delhi Television Ltd.[2020 (4) TMI 133 - SUPREME COURT] and TechSpan India Pvt. Ltd. and Ors [2018 (4) TMI 1376 - SUPREME COURT] has affirmed the view that re-assessment is not permissible merely on the change of opinion of the AO.

In the instant case, subjecting the petitioner to reassessment proceedings second time for the self-same transaction and practically for the same issue is arbitrary and without jurisdiction. They fall foul to petitioner’s fundamental and constitutional rights guaranteed under Article 14, Article 19(1)(g) and Article 300A of the Constitution of India.

Writ petitions are allowed

Sanction given by a subordinate authority - Charges under the Prevention of Corruption Act, 1988 against Income Tax Officer - mandatory sanction for prosecution was accorded by the Commissioner of Income Tax (CIT) - opposite party argues that the sanction violates the constitutional mandate of Article 311(1) and Section 19(1)(c) of the PC Act, as a subordinate authority granted it.

After the trial had partially commenced, the opposite party moved an application for discharge, asserting that the CIT, being subordinate to the appointing authority (CCIT), was incompetent to grant sanction. The Special Court concurred, holding the sanction to be invalid, and discharged the accused.

HELD THAT:- The requirement of a valid sanction is not a mere procedural formality; it is a jurisdictional prerequisite. Section 19(1)(c) of the PC Act stipulates that sanction must be granted by the authority "competent to remove" the public servant. This statutory mandate is anchored in the constitutional safeguard of Article 311(1), which prohibits removal by an authority subordinate to the appointing authority. Applying this principle, the CCIT is the appointing authority.

Applying this principle, the CIT is undeniably subordinate to the CCIT. It is settled law, as held in Mahesh Prasad vs. State of U.P. [1954 (10) TMI 59 - SUPREME COURT] that a sanction granted by a subordinate authority suffers from a fundamental jurisdictional defect. Departmental circulars or notifications cannot override or dilute this constitutional mandate. Thus, the initial sanction was void ab initio.

Denial of liberty to obtain a fresh sanction - While the curative principle in Nanjappa [2015 (7) TMI 1339 - SUPREME COURT] is generally available, it is constrained here by a superior legal impediment: the withdrawal of general consent by the State of West Bengal under Section 6 of the DSPE Act.

This Court finds no infirmity in the order of the Learned Special Judge. The discharge is a logical and legally necessary consequence of the failure of the prosecution to meet its jurisdictional prerequisites.

Order:-The order passed by the Learned Special Judge, discharging the opposite party, Shri Chandra Nath Kayal, is upheld and confirmed. The criminal proceedings in Special Case stand terminated definitively.

Fees received for live transmission/live feed of cricket matches - Royalty receipts - service from which income was generated would clearly fall within the ambit of Explanation 2 as placed in Section 9(1)(vi) - distinction between a copyright and broadcast right - scope and ambit of the expression “the transfer of all or any rights (including the granting of a license), in respect of any copyright, literary, artistic or scientific work including films or video tube tapes” - whether broadcast/live telecast is not a work within the definition of 2(y) of the Copyright Act ? - test of ‘minimum requirement of creativity’ for claiming a right under the Copyright Act, as absent in a ‘live telecast of an event’.

HELD THAT:- Issue involved in the present case is squarely covered by the judgment of this Court in the case of Fox Network Group Singapore Pte. Ltd. [2024 (1) TMI 1008 - DELHI HIGH COURT] in which the earlier judgment of this Court rendered in the case of CIT v. Delhi Race Club [2014 (12) TMI 265 - DELHI HIGH COURT] involving an identical fact-situation has been dealt with and held that ITAT did not commit any error in passing the impugned orders and that it was completely justified in arriving at the finding that the fees received by the respondents towards live transmission could not be classified as royalty income under Section 9(1)(vi) of the Act.

Appellant has not been able to point out any fact which shows that the rights of exhibition given by the respondent Sri Lanka Cricket exceeded beyond the ‘live feed’.

Since the right to show cricket matches was confined to live telecast and the payment made was only for the match(es) held in the series (within 12 months) and not subsequent matches, such amount paid to the respondent cannot be considered as a royalty. ‘Because, royalty presupposes enduring benefits’. In case the licensee has a right to record or preserve the feed and he continues to derive benefit of that recording and has right to re-telecast or show those matches in future, beyond the period or event(s) other than such event, then only, the payment made to the licensee in appropriate case, can be treated as royalty. However, it is not the case in the present agreement or transaction, hence the amount in question cannot be considered as royalty. Decided against revenue.

Validity of assessment order u/s 143(3) r/w Section 144B - Addition u/s 69 - difference between the invoice value of imports as per the data received from the Central Board of Excise and Customs (“CBEC”) and the purchase value of imports disclosed by the Petitioner in it’s return of income - Petitioner has challenged the said assessment order primarily on the ground that it had requested full details of the import-export data allegedly received by/available to Respondent No. 1 from the CBEC, which was in the exclusive knowledge and possession of Respondent No. 1, and which formed the sole basis for the addition but was never provided the same

HELD THAT:- It is impossible for the Petitioner to reconcile and/or explain the alleged difference between the figures of imports as per the ITR/accounts of the Petitioner, and the data of the CBEC, in the absence of complete details of the break up of the CBEC data being furnished to the Petitioner. A plain reading of the impugned order clearly indicates that Respondent No. 1 has proceeded to make an addition without providing or even referring to the breakup or details of the difference in the alleged purchase value of imports of the assessee/Petitioner.

It is also relevant to consider the fact that in transfer pricing proceedings these very purchases were scrutinised and held to be at arm’s length price.

There has been a breach of principles of natural justice, and on this count alone, the entire addition made and the assessment proceedings are vitiated.

We also say this because Respondent No. 1 simply relied upon the information provided by the CBEC on the assumption that the figure mentioned by the CBEC was the actual figure of imports required to shown by the Petitioner in it’s ITR, notwithstanding that it had not disclosed the details of any import bills and that no breakup value of the import purchases was given, and further by not even providing the information as was received from the CBEC to the Petitioner, before passing the assessment order under Section 143(3) read with Section 144B of the Act.

Thus, merit in the contention of the Petitioner that the Impugned Order and the Impugned Demand Notice is unsustainable and has been passed in violation of the principles of natural justice. It is obvious that Respondent No. 1 must disclose complete details of any material it is relying upon, to hold that additional purchases have been made over and above the disclosed purchases, and the legal basis to make such an addition.

In the present case, the only basis for the addition is the aggregate purchase figures communicated by the CBEC, which do not disclose any particulars of import bills or details of additional purchases made. Such general information, without details, without a proper opportunity to set out a reconciliation, and without any supporting evidence, cannot constitute valid material for the purpose of making an addition under the Act. We now remand the matter back to the file of Respondent No. 1.

Intimation under Section 143(1) as notice of demand - mandatory service of notice of demand under Section 156 - limitation for issuing intimation under Section 143(1) - foreign tax credit / relief under Section 90/91 - rectification under Section 154 - timebound disposal of pending rectification

Intimation under Section 143(1) as notice of demand - mandatory service of notice of demand under Section 156 - limitation for issuing intimation under Section 143(1) - Validity and enforceability of the demand for A.Y. 2010-11 in the absence of production/service of an intimation under Section 143(1) or any other notice of demand. - HELD THAT: - The Court found that the department contended an intimation under Section 143(1) had been issued and that the date of service of the notice of demand reflected 25.06.2011, but failed to produce the intimation or any proof of service. Under the proviso to Section 156(1) an intimation under Section 143(1) is deemed to be a notice of demand and, therefore, service is mandatory. The second proviso to Section 143(1) (as applicable to the year in question) imposes a oneyear limit for sending the intimation. The respondents' reliance on portal extracts and inability to retrieve physical acknowledgement from legacy records did not substitute for production of the intimation or proof of service. In the absence of an intimation or independent notice of demand, recovery cannot be lawfully enforced against the petitioner. [Paras 18, 19, 20, 21, 22]

The demand for A.Y. 2010-11 cannot be enforced in the absence of the intimation under Section 143(1) or service of a notice of demand; the impugned demand does not survive.

Foreign tax credit / relief under Section 90/91 - benefit of bona fide claim based on Form-16 - Whether the petitioner is entitled to the foreign tax credit shown in the employer's Form16 despite not separately disclosing it in the specific ITR column. - HELD THAT: - It was not disputed that the Form16 issued by the employer expressly recorded taxes withheld abroad and that the total TDS claimed in the return matched the Form16 amount. The petitioner did not separately populate the dedicated ITR field for foreign tax credit because Form16 aggregated the taxes. The Court regarded this as a difference in approach to disclosure rather than suppression or misrepresentation. Given the petitioner's status as an individual without professional assistance, the Court held he should not be deprived of a legitimate foreign tax credit claim simply because it was not reported in the separate ITR lineitem. [Paras 13, 14, 15, 16]

The petitioner shall be afforded the benefit of the foreign tax credit as shown in the Form16 and the demand raised on account of the mismatch shall be deleted.

Rectification under Section 154 - timebound disposal of pending rectification - Disposal of the petitioner's rectification application and consequent refund adjustment (if any). - HELD THAT: - The petitioner's rectification application dated 11.04.2018 remained pending and the petitioner had sought a copy of any order/intimation raising the demand. The Court noted Respondent No.1's admission that the rectification application was not disposed of and that departmental records did not establish service of the alleged intimation. In exercise of writ jurisdiction the Court directed completion of the exercise of giving credit for foreign tax and any consequential refund within a fixed period. [Paras 15, 16, 23]

The Assessing Officer is directed to complete the exercise of giving credit for tax paid/deducted abroad and to process any refund (including refund reversed/adjusted earlier) within twelve weeks from the date of uploading of the order.

Final Conclusion: The petition is allowed: the petitioner shall be given the benefit of the foreign tax credit shown in Form16 and the demand for A.Y. 201011 is deleted; any refund of A.Y. 201718 adjusted against that demand shall be restored; the Assessing Officer shall complete the credit/refund exercise within twelve weeks; no order as to costs.

Validity of reopening of assessment u/s 147 - no approval / sanction of the Competent Authority as contemplated u/s 151 - as alleged no sanction has been given by the wrong authority - scope of provisions of the TOLA - Notice issued within a period of four years

HELD THAT:- Assessment Year in question is A. Y. 2015-16. The notice u/s 148 of the Act has been issued on 28th March, 2021. Once these are the facts, the same would squarely fall within the ratio laid down by the Hon’ble Supreme Court in Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)]

The notice issued u/s 148 of the Act in the present case should have the sanction of the Joint Commissioner. Instead, the sanction obtained is that of the CIT (Exemption), Pune, who is admittedly not the authority who could have granted the sanction in the present case. On this ground alone, the above notice issued under Section 148 of the Act has to be quashed.

Scope of necessary satisfaction - As per revenue there is a satisfaction of the Joint Commissioner for issuance of the impugned notice, and the notice therefore is valid - We find this argument to be completely without merit. The impugned notice categorically states that the impugned notice is being issued after obtaining the necessary satisfaction of the CIT (Exemption), Pune. Therefore, having expressly stated that the “necessary satisfaction” has been obtained from the CIT (Exemption), Pune, the Revenue now cannot resile from this position and argue to the contrary that the “necessary satisfaction” of the Joint Commissioner has been taken. Once the Act contemplates the satisfaction of a particular authority, it is that authority alone that would have to give its sanction, and not any other authority. This is squarely covered by the decision of this Court in the case of Ghanshyam K. Khabrani [2012 (3) TMI 266 - BOMBAY HIGH COURT]

Rectification u/s 154 - denial of exemption u/s 11 - assessee has claimed exemption under section 10(23C)(iiiad) in part B - TI, however the assessee has not selected the drop-down of 10(23C)(iiiad) under "section under which exemption claimed" under filing status in schedule personal information. Hence exemption claimed in serial No. 9C in schedule part B -TI is not allowed.

HELD THAT:- Filing of schedule IE4 is mandatory. Exemption under section 10 May not exceed the total receipts as per schedule IE4 . As per rule 2BC exemption is allowed only if the aggregate annual receipts including any voluntary contributions during the relevant previous year does not exceed rupees one crore." On complete reading of the above reason it is apparent that it is not the inconsistency in the return of income but the relevant to drop-down menu is not selected. The assessee has also explained the reason why it could not be done.

Assessee explained that even the annexure stated to be in the intimation was not filed however the claim of the assessee does not exceed rupees one crore. In view of the above facts we allow the claim of the assessee direct the learned assessing officer to allow the claim of the assessee of deduction/exemption under the respective section after verifying the facts.

CIT – A has also directed the assessee to claim deduction under section 11 of the act. The AO may also examine and if he finds that in one of the sections the deduction is available to the assessee where it is entitled according to the provisions of the law, he is directed to grant the same. Appeal of the assessee is allowed for statistical purposes.

Unexplained cash deposit - Addition u/s 69A - as per AO assessee had failed to explain credit transaction including cash deposit - HELD THAT:- It is not in dispute that the supporting documents produced by the assessee during assessment proceedings included bank statements, bank pass books, ledger account of all the above said 3 firms, namely, M/s Pansari Gems International, M/s Pansari Gems Corporation and M/s Vinayak Gems Inc., besides his cash book.

There is nothing in the assessment order to suggest that the AO disbelieved creditworthiness of the any of the three firms named above. AO also nowhere observed in the assessment order that the funds transferred from the above said 3 firms to the account of the assessee were not explained.

Since the assessee had submitted complete books of accounts, during the assessment proceedings, CIT(A) was justified in recording finding that the books of accounts clearly identified the source of funds. In this situation, we find that learned CIT(A) was justified in arriving at the conclusion that when the source of funds were established, movement of the said funds through the above said saving bank account of the assessee did not render the amounts as unexplained money, so as to attract provisions of section 69A of the Act.

AO did not refer to any material to suggest that the funds referred to above actually belonged to the assessee personally or that their source remained unexplained. In this situation, Learned CIT(A) was further justified in observing that provisions of Section 69A of the Act were not at all attracted. Decided in favour of assessee.

Penalty u/s 271(1)(c) - short disclosure of sale proceeds being the difference between the jantri value and the sale deed amount - difference was treated as deemed income u/s.50C - proportionate amount was added in the hands of the assessee.

HELD THAT:- The stamp duty value of the property being adopted as sale consideration u/s.50C of the Act by itself does not amount to furnishing of inaccurate particulars of income by the assessee so as to levy penalty u/s.271(1)(c) of the Act. It is not the case that the stamp duty value of the property was not disclosed or was under reported by the assessee.

As decided in Kantibhai Mohanbhai Kheni [2017 (3) TMI 1872 - ITAT AHMEDABAD] in terms of deeming provisions of section 50C, higher sales consideration of property determined by the DVO did not by itself amount to furnishing inaccurate particulars of income so as to levy penalty under section 271(1)(c) of the act The revenue has also not shown as to how the assessee could be held to have actually received this amount which is in excess of the amount of mentioned in the sale deed, It has also not been shown as to whether any corresponding addition has been made in the hands of the buyer. We further notice that the addition was made totally by invoking the provision contained in section 50C of the act, therefore, penalty cannot be imposed on the income determined on the basis of deeming provision of section 50C as this solitary does not lead to concealment of income or furnishing of inaccurate particulars of income.

Thus, we direct the AO to delete the penalty levied u/s.271(1)(c) - Assessee appeal allowed.

Revision u/s 263 -information received from Dy. Director (Investigation) regarding huge amount of unaccounted funds received in bank account of assessee - case of the assessee was reopened based on the information received from Investigation Wing that assessee has received commission income of Rs. 54.93 lakhs from BPTP and TDS was accordingly deducted thereon. However, assessee had accounted for an income of Rs. 35.31 lakhs and declared lesser receipts of Rs. 19.61 lakhs - as per CIT AO should have brought to tax the undisclosed commission income instead of restricting the undisclosed income to the extent of TDS benefit.

HELD THAT:- AO has made apparent mistake on record and it is not the case that AO has not verified but AO has passed the order without verification of the reasons for which assessment was reopened that is based on the information that assessee has not disclosed total commission income received from BPTP and not appreciated the fact properly.

Assessee is a company and as per the provisions of the Companies Act, assessee has to maintain books of account on the basis of mercantile system. Accordingly, they should have recorded the commission fully and it is not relevant in mercantile system of accounting that commission should have been received. It is not the case of the assessee that assessee is following books of account on receipt basis. Therefore, the AO has made a mistake which is apparent on record, hence, in our considered view, proceedings initiated by the ld. PCIT is justified. Therefore, we are inclined to dismiss the appeal filed by the assessee.

Revision u/s 263 - cash deposits which were the immediate source of unsecured loans and capital - "lack of enquiry” OR "inadequate enquiry” - lack of enquiry into the source of cash deposits by AO

HELD THAT:- On perusal of the enquiries made by the AO it is seen that the said enquiries only brought on record the factum of the unsecured loan taken by the assessee and the capital introduced in its account.

Immediate source of the above unsecured loans given by the said creditors and the capital introduced by the partner was an equivalent amount of cash deposits in the respective bank accounts as discussed above. As the primary source of the above unsecured loans / capital was cash deposit, in the given facts of the case the primary enquiry, that was required to be done by the AO was to examine about the precise source of the said cash which was not done by the AO in this case. Even in the case of Shree Balaji Filling Station, the explanation regarding the cash deposits in its bank account on 31.12.2014 was out of debit opening cash balance on 31.12.2014 was without the cash flow statement explaining the basis of the said cash balance.

Therefore, it is not a case of inadequate enquiry as contended by the assessee because in the given facts of the case it cannot be said that an improper enquiry as conducted by the AO in this case should be construed as “an inadequate enquiry” rather it is a case of “lack of enquiry” because as discussed above, the immediate source of the unsecured loan and capital received by the firm is the cash deposit of equivalent of Rs. 32,90,000/- in the respective bank of accounts of the person as discussed above and detailed in the tabular chart in para no. 6 of this order was not at all enquired by the Assessing Officer in this case. In such a situation of “ lack of enquiry” the Ld. PCIT was justified to pass an order u/s 263 of the case setting aside the assessment order on the ground that it was erroneous in so far as it was prejudicial to the interest of the revenue as observed in the case of DIT vs. Jyoti Foundation [2013 (7) TMI 483 - DELHI HIGH COURT] as held that in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under Section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is Inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in Law.

Objection of the assessee that the proceedings, u/s 263 of the Act cannot be initiated on the basis of audit objection has been carefully considered but not found to be acceptable.

As decided in Sohana Woolen Mills [2006 (9) TMI 157 - PUNJAB AND HARYANA HIGH COURT] that it will depend on the facts of the case and the audit objection to decide as to whether the said audit objection can be a ground to initiate proceeding u/s 263 of the Act. Therefore, in view of the above discussion, it cannot be said that audit objection cannot be a basis for initiating proceedings u/s 263 of the Act and the submission of the assessee is hereby rejected.

Thus, we hold that it is a case of lack of enquiry by the Assessing Officer while passing the impugned assessment order regarding the source of the cash deposits which was the immediate source of unsecured loans received by the assessee and capital introduced in the books of the assessee rather than a case of inadequate enquiry as contended by the assessee.

Order of the Ld. PCIT passed u/s 263(1) of the Act was justified - Appeal of the assessee is dismissed.

Revision u/s 263 - as per CIT AO has not done enquiry properly regarding source of cash deposits - HELD THAT:- On going through the sale deed dated 08.01.2015 it is noticed that property was sold for Rs. 1,60,0000/- and assessee’s share is only Rs. 18 lakhs but for other cash received as claimed by the assessee only on the basis of affidavit without supporting documents filed by the assessee and accordingly he has not examined to the extent of the examination of source of cash deposits and no further questions were asked and merely accepted the documents filed by the assessee. Here the cash on hand the cash deposits are more than the sales consideration of the land and assessee’s share is only Rs. 18,00,000/- He could have asked for source of rest amount of cash deposits Accordingly Order passed by the AO is erroneous and prejudicial to the interest of Revenue. We uphold the Order of the learned Pr.CIT passed under section 263 of the Act.

Validity of reopening of assessment on non-searched person - Third-party / non-searched case - mandation of application of mind - HELD THAT:- Undisputedly and admittedly present case is of non-searched case (third party case) so when reopening u/s 148 of the Act is made directly on non-searched person same has different nature and has scope is to be strictly. As evident from cursory look to notice u/s 148 it is totally without application of mind as it is stated assessee is searched and non searched person both.

As the impugned assessment order passed u/s 147/144 of the Act is considered we find that the assessment is conclude refering to some search action u/s 132 on Deepak Aggarwal and Mukesh Kumar dated 17.12.2021, and there is no mentionas to how this search is related to search dated 17/09/2021 referred in the impugned notice. This thus leaves no doubt in the mind of this bench that impugned notice is outcome of utter casualness and not just non-application of mind. Corresponding ground deserves to be sustained.

Benami transaction -huge deposits - Vicarious liability of officers of the firm/company if the offence is committed by the firm/company - prima facie case to proceed - discharge at the stage of framing of charge - requisite averments in the complaint to invoke the provisions of Section 62 of the PBPT Act -Criminal Revision in High Court - HELD THAT:-As stated, it is the case of the respondent that a sum, credited to the account of the first accused firm post-demonetisation. It is seen from the counter and the other records that the income of the first accused firm was less in the previous Academic Years. That apart the respondent has alleged that the petitioners have filed bogus bills and sales bills to falsely claim the sale of the products that they were dealing with.

Thus, this Court is of the view that the petitioner's defence that they had enough income and the deposits made by them were genuine cannot be adjudicated at this stage. In fact, under Section 2(9)(D) of the PBPT Act, 'Benami Transactions' include the transaction in respect of the property where the person providing the consideration is not traceable or is fictitious. Therefore, the fact that the beneficial owner has not been identified would not be a ground for discharge.

In this case, the first accused is the partnership firm and the second accused is its Managing Partner without whose consent the said cash deposits would not have been made. Even according to the third accused, the second accused was taking care of the affairs of the firm. He had also signed the Balance Sheet and other relevant documents, which indicates his knowledge and consent prima facie. Therefore, this Court is of the view that the order of the learned Magistrate in refusing to discharge the second accused also cannot be faulted.

As regards the third accused, who happens to be the wife of the second accused, it is the case of the respondent that she was a partner and hence, liable. The petitioner/third accused though not issued a separate show cause notice had replied stating that she was only a dormant partner and that the affairs of the partnership firm were taken care of by her husband/second accused. In the Sanction Order relied upon by the respondent dated 21.10.2019, a reference is made to the reply sent by the petitioner. However, there is no reference to the exact role played by the petitioner and as to how she was in-charge and responsible to the firm for the conduct of its business.

In the impugned complaint, the respondent have not made the requisite averments to hold her vicariously liable for the offences committed by the firm. The petitioner cannot be equated with her husband, who was the Managing Partner. Therefore, the respondent should have specifically averred that the petitioner was in-charge and responsible to the firm for the conduct of its business.

Thus, it would be clear that although a firm is not a juristic person, a partner could not be liable unless one of the twin requirements to make him/her vicariously liable is satisfied. In the PBPT Act, the twin requirements are stipulated in Section 62.

Thus, in the light of the specific stand taken by the petitioner/third accused in the reply to the show cause notice and in the absence of any material to establish the role played by the petitioner/third accused, this Court is of the view that the petitioner/third accused cannot be made vicariously liable, especially since even the necessary averment to invoke vicarious liability is absent in the complaint. Therefore, this Court is inclined to set aside the impugned order insofar as the petitioner/third accused is concerned.

However, it is made clear that if the respondent is able to adduce any evidence to prove the role played by the petitioner/third accused to make her vicariously liable, then the respondent is at liberty to invoke Section 319 of the Cr.P.C., corresponding to 358 BNSS.

Involvement of substantial questions of law or not - Requirement to consider test report of CRCL specifying Fe content of subject goods based on DMT, in deference to the report of SKM which specified the “Fe content” of the Iron Ore Fines exported contained less than 58% on the WMT basis.

Involvement of Substantial questions of law or not - HELD THAT:- On analysis of evidence on record, the view of the Appellate Authority found favour with the CESTAT, being fortified by consistent view expressed by it in very many cases. The percentage of Fe content of the Iron Ore Fines exported was as per report of SKM, which examined the sample on WMT basis. For addressing the aforesaid issue(s) relevant cases decided have been followed by the CESTAT. It observed that prior to the amendment of the Customs Tariff Act, 1975, by virtue of the Finance Act, 2022 with effect from 01.05.2022, the goods exported were to be assessed on the basis of WMT. Such an opinion is supported by the principles laid down in the case of Union of India Vrs. Gangadhar Narsingdas Agrawal [1986 (4) TMI 71 - HIGH COURT OF BOMBAY], where it was held that 'Merely because in respect of moist iron ore the iron content cannot be determined directly by physical analysis this cannot lead to the result that the iron ore content cannot be determined at all or that the petitioners should be deprived of their just claim on that footing which is totally unwarranted by law.'

Thus, determination of iron content of the goods exported as reflected in the Shipping Bills is to be governed by the legal position as emanating from Gangadhar Narsingdas Agrawal whereby it can be deduced that whenever any samples are tested, it has to be in the condition to which the goods are exported, i.e., in gross weight which included the moisture and other impurities.

The learned Tribunal having drawn conclusion on the basis of consistent approach maintained by different Benches of the CESTAT supported by the view expressed by the High Court and the Supreme Court, there is hardly any scope for any substantial question of law to arise out of the Order of the CESTAT.

Whether the learned CESTAT was justified in affirming the adaptation of the principle of calculation of Fe content in the Iron Ore Fines exported on WMT basis? - HELD THAT:- The learned Tribunal has returned the finding of fact that the Fe content of the goods described in Shipping Bill No. 9152539, dated 06.03.2021 was below 58%. Such determination was made on the basis of WMT, which attracted export duty at “NIL” rate in view of Notification No.58/2022-Cus, dated 18.11.2022 “with the classification of Iron Ore Fines under Customs Tariff Heading: 26011141”. The sample sent for testing in CRCL, Kolkata was done after a lapse of considerable number of days from collection of samples, and the moisture is subject to evaporation by efflux of time. Time elapsed between date of drawing samples and date of testing. It is further observed on analysis of Shipping Bill No.9089712, dated 03.03.2021 that there was a substantial delay of 39 days in testing the samples from the date of collection of the samples. The Fe content as per the CRCL test report was calculated after removing moisture and other impurities, i.e., on the basis of DMT. The learned Tribunal observed that the Fe content calculated on WMT basis in respect of goods described in aforesaid Shipping Bill dated 03.03.2021 was 51.97%. Therefore, it accepted the certificate issued by SKM.

This Court is persuaded to believe that the question of law posed in this appeal by the Revenue for adjudication is essentially based on finding of fact and supported by well established principles as was in vogue at the relevant point of time, i.e., position prior to the Finance Act, 2022 came into force. Therefore, there arises no substantial question of law from the order of the CESTAT on the facts and in the circumstances of the case - an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal qua the determination of any question having a relation to the rate of duty of customs or to the value of goods for the purposes of assessment, if the Court is satisfied that “the case involves a substantial question of law”.

This Court does not perceive the questions of law posed by the Revenue fall within the connotation of expression “the case involves a substantial question of law”.

The questions of law which are posed by the Revenue are basically based on the factual details. The determination of customs duty liability in respect of export of Iron Ore Fines, percentage of Fe content of which was calculated based on WMT as certified by SKM, does not call for determination of the question as “substantial” on the facts and in the circumstances of the case. The finding of the fact returned by the Appellate Authority is affirmed by the learned CESTAT and such finding of fact is based on appreciation of evidence on record and adaptation of consistent approach of the learned CESTAT rendered earlier in different cases. Hence, this Court desists from re-appreciating the evidence, which in its considered opinion is impermissible - This Court does not find any perversity in the concurrent finding of fact rendered by the learned CESTAT affirming the view expressed by the Appellate Authority.

This Court finds no question of law much less any substantial question of law that arises for consideration. Ergo, the appeal preferred by the Revenue under Section 130 of the Customs Act, 1962, being devoid of merit, is liable to be dismissed - Appeal dismissed.

Right to livelihood - Writ of mandamus - Administrative cancellation of licence entry in CBLMS - Customs Broker Licence Management System (CBLMS) - HELD THAT:- It is the petitioner’s case that the petitioner was an employee of the respondent no. 3. The petitioner is holding F card issued by the Commissioner of Customs, Kolkata. On or about May 2, 2025, the petitioner resigned from the services of the said custom broker firm, i.e., the respondent no. 3.

In view of the letter dated December 10, 2025 addressed to the respondent no. 3 by the Assistant Commissioner of Customs and the letter dated December 31, 2025 addressed to the Principal Commissioner/Commissioner of Customs, CBLMS, Mumbai by the Kolkata Customs Authorities, there does not appear to be any good reason for allowing the petitioner’s name to continue in the CBLMS profile of the respondent no. 3. The petitioner has already tendered his resignation from the respondent no. 3 firm and the Customs Authorities evidently do not have any objection to the deletion of the petitioner’s name from the CBLMS profile of the respondent no. 3. The respondent no. 3 has chosen not to present its case before this Court and as such, it can be safely presumed that the respondent no. 3 also has no objection to the deletion of the petitioner’s name.

In such view of the matter, the respondent Customs Authorities are requested to release the petitioner from the CBLMS profile of the respondent no. 3 as also to delete the petitioner’s name from the CBLMS profile of the respondent no. 3 as expeditiously as possible, preferably within a period of two weeks from the date of communication of this order.

Classification of goods- finality of assessment - imported broken/ salvaged shaft pieces are classifiable under CTH 7326 9090 (parts of ship) or under CTH 8483 1092 (shafts/crankshafts) -extended period of limitation / suppression and mis-declaration - imposition of penalty - SAFTA Certificate - Whether the impugned show cause notice seeking re-classification and recovery of differential duty was sustainable in view of the earlier assessment, classification of the goods as parts of ship and the applicability of extended limitation - HELD THAT:- The commercial invoice as well as the SAFTA Certificate categorically mention the classification of goods under heading 73269090.The Revenue, post clearance of the imported goods have not given out a single sustainable reason for the proposed change of classification. Parts of ships, excluding those specified under heading 7326 9080, are clearly classifiable under CTH 7326 9090, in view of the specific description of goods stated therein. Moreover upon salvaging and breaking up of the ship the parts thereof loose their original identity and attain a different nomenclature and an independent identity. The goods assume a different character as an article of iron & steel, therefore, meriting classification under CTH 7326 and being a part of ship the sub-heading 7326 9080 squarely meets the description of goods; further by virtue of exclusion under CTH 7326 9080 would automatically fall under CTH 7326 9090.

There is apparently no concealment of facts or misrepresentation thereof by the appellant in the matter and as such we are not in agreement with the Revenue’s contention on this aspect, justifying and sustaining invocation of larger limitation period. We are of the unequivocal view that extended period of limitation was inapplicable in the given context and the show cause notice is clearly time barred. It is also a fact that even otherwise the present matter would be one of revenue neutrality.

Under the circumstances we also find no merit in the appellant attempting the alleged concealment of facts, as they were eligible to avail credit of the duty paid. Therefore, apart from what is stated above in foregoing paras, concerning the merits of the matter, it is categorical that the present case being one of revenue neutrality there obviously was no incentive to deliberately mis-declare the imported goods The import documents as supplied by the exporter including the country of origin certificate, state the classification as CTH as 7326 9090. Moreover, in view of what is stated herein the said goods would clearly be classifiable under 7326 9090.

Thus, we find the order of the lower authority as not in accordance with law and therefore the same would be required to be set aside. We therefore set aside the impugned order in its entirety and allow the appeal filed by the appellant with consequential relief, if any, as per law.

Penalty under Section 112(b) for improper importation - Penalty under Section 114AA for use of false or incorrect material - Definition of "importer" as including owner, beneficial owner or person holding himself out to be the importer - Settled confiscation and redemption by Settlement Commission - No exclusion of IECholder from importer liability where goods are imported at behest of another

Penalty under Section 112(b) for improper importation - Definition of "importer" as including owner, beneficial owner or person holding himself out to be the importer - No exclusion of IECholder from importer liability where goods are imported at behest of another - Settled confiscation and redemption by Settlement Commission - Penalty imposed under section 112(b) on the appellant was sustainable. - HELD THAT: - The appellant, though having imported goods at the behest of another, held the IEC and imported the consignment and therefore falls within the inclusive definition of "importer" which also covers owner, beneficial owner or any person holding himself out to be the importer. The undisputed factual position was that 8,309 tyres which were prohibited (old/used and without mandatory BIS mark) were smuggled concealed behind declared tyres. The Settlement Commission had dealt with confiscation and redemption of specified tyres; the value of the remaining prohibited goods was identified and the penalty under section 112 in respect of such prohibited goods could extend up to the value of the goods. The penalty imposed on the appellant is approximately 11% of the value of those prohibited goods; having regard to the statutory scope of section 112 and the appellant's role and knowledge/reason to believe that the goods were liable to confiscation, there is no reason to interfere with the penalty imposed under section 112(b). [Paras 12, 15, 17, 18, 19]

Penalty under section 112 imposed on the appellant is sustained.

Penalty under Section 114AA for use of false or incorrect material - Penalty imposed under section 114AA on the appellant was sustainable. - HELD THAT: - Section 114AA penalises knowingly or intentionally making, signing or using any declaration, statement or document which is false or incorrect in any material particular in the transaction of business for purposes of the Act. The appellant admittedly made false declarations by projecting himself as the importer while goods were effectively imported on behalf of another and misdeclared the nature and quantity of the goods in the Bills of Entry. The provision applies to false declarations in import transactions (Bills of Entry) as well as exports; the penalty imposed (approximately 11% of the value of the goods) is well within the statutory ceiling (up to five times the value of the goods) and is just and fair on the facts of the case. [Paras 14, 20, 21, 22]

Penalty under section 114AA imposed on the appellant is sustained.

Final Conclusion: The impugned order upholding the penalties under sections 112(b) and 114AA is affirmed and the appeal is dismissed.

Interpretation of scope of exempted description 'apparatus for artificial respiration or other therapeutic respiration' (ventilators) - Eligibility of 'oxygen concentrator' for exemption under notification - Appellate duty to obtain/supplement speaking order and compliance with assessing officer's obligations - Doctrine of merger of appellate order with speaking order - Holistic reading of notification and cross-column interpretation - HELD THAT:- ‘Oxygen concentrator’ is an apparatus that, in a manner of speaking, pedestrianized ‘respirators’ by substituting the compressed and bottled ‘oxygen’ with perennial source of ‘clean oxygen’; the convenience of the former for public health institutions in administrative aspects, such as accountal, storage and patient billing, is no cause for linking source of oxygen with delivery system as prophylactic, palliative or therapeutic. Both from physiological perspective and from the descriptions in the First Schedule to Customs Tariff Act, 1975 can it hardly be averred that source of supply of oxygen determines ‘apparatus for artificial respiration or therapeutic respiration’ to affirm that constricted view in the impugned order. Had it been the intent of government to isolate ‘respiratory apparatus’ – for artificial respiration or for therapeutic respiration –to ‘ventilators’, the common parlance usage did not merit parenthetical exposition as posited by representative and delegate of Revenue in support of their stand. Every person concerned would not be unaware that ‘ventilator’ is apparatus for assisted breathing and parenthetical emphasis nothing but superfluous. There was no call for the policy formulators to dally with a generic description when the specific was the answer to the intent canvassed by the lower authorities.

Not only does technology evolve but the history of human resourcefulness also chronicles invention as the offspring of necessity. Not only the shortage of ‘ventilator’ as specific apparatus much in need at public health care facilities– existing as well as proposed – but also, confronted with ‘end of times’, policy formulators may have been influenced and inspired to adopt description covering technologies of past, present and potential in one phrase and deployment of ‘ventilator’, for ensuring that no confusion, from lack of particularity in specially crafted concatenation of words, remained about the then presently known apparatus, is not to be inferred, particularly from subordination of parenthetical framing, as legislative intent to restrict. We find no reason to interpret the broad framework of description in the notification as restricted to only the parenthetical emplacement. No evidence has been put forth in support of the only ground for denial of exemption, viz., not being apparatus for therapeutic respiration, that is touted as essence of eligibility.

Thus, the impugned order has erred in restricting the benefit of notification only to ‘ventilator’ and, owing to which, we have no hesitation in setting aside the impugned order to allow the appeal.

Transaction value -importation by enhancing the CIF value - classification of the item imported viz. ‘Motor Controller’ from CTH 8503 0090 to CTH 8708 9900 - assessment under protest and Section 17(5) of the Customs Act, 1962 - powers to doubt declared value under Rule 12(2)(iii) of the Customs Valuation Rules, 2007 - determination under Rule 3(1) and fallback under Rule 3(4) proceeding through Rules 4 to 9 - reliance on evidentiary requirements of Rule 11(3) of the Customs Valuation Rules, 2007 - due procedure under Section 14 and Valuation Rules - HELD THAT:- With regard to valuation as well as classification, the Tribunal in the appellant’s own case, has considered the matter and passed Final Order [2024 (9) TMI 1428 - CESTAT KOLKATA], held that- " As per the terminology of CTH 8708, the goods covered should be the parts and accessories of motor vehicles under CTH 8701 to 8705 and as per the point 3 of the Notes to Chapter XVII, the said goods having the description in two or more of the headings of those chapters is to be classified under that heading which corresponds to the principle use of that part of accessory. As per the reading of point 3 of Notes to Section XVII and the explanatory notes covering both CTH i.e. 8503 & 8708, the said goods are imported under the description of 'controller' and there is no declaration by the respondent that the said goods are the spare parts of e-rickshaw.

We also find that the controllers are not covered under the CTH 8708 as per the explanatory notes to Section XVII. It is also pertinent to note that the Notes to CTH 8503 covers the parts to be used with motor and as such merits the classification of the goods under CTH 8503. Thus, we hold that the goods imported by the Respondent are rightly classifiable under Chapter heading 8503 0090 as claimed by them in the respective Bills of Entry.

Hence, we find that the correct classification of the goods in question is CTH 8503 0090. Therefore, hold that the Ld. Commissioner (Appeals) has rightly held the classification of the impugned goods under CTH 8503 0090. "

We find the above decision squarely covers the issue at hand and hence following the ratio of the law laid down in the cited decision, we reject the revenue’s contention in the matter.

The case law in the case of YC Electric [2025 (2) TMI 1119 - CESTAT NEW DELHI] by the Ld. A R pertains to the parts of e-rickshaw, brought in under various headings, wherein the issue was whether these parts could be classified by way of their individual headings, or as parts of Electric Rickshaw; whereas the present case is concerned with the import of Motor Controller as a stand alone product. Hence, the cited case law is clearly distinguishable and has no application in the present case.

Appeal filed by the Revenue cannot survive. The order of the lower authority is maintained and the appeal filed by the Revenue stands dismissed.

Classification under Customs Tariff Chapter 8 versus Chapter 21 - imported goods declared as "supari"/preparations of betel nut are classifiable as preparations under CTH 21069030 or retain the essential character of betel/areca nuts and are classifiable under CTH 080280 - preparations of betel nut - binding effect of Advance Ruling - change of law under Section 28J(2) - mis-declaration and consequences confiscation and penalty - Notification No.24/2015-Cus. - Notification No.96/2008-Cus. - DGFT Minimum Import Price - HELD THAT:- We find that it is not disputed by the Revenue that the Betel Nuts have undergone processes, such as, boiling in water for four hours, removing the husk, drying by hot air, sterilizing, sorting, polishing, removal of large and small impurities, 3-stage cutting, roasting in fire etc.. Therefore, the betel buts has lost its character as betel nuts after preparation. In that circumstances, the betel nuts has lost its character to the classified under Chapter 080280. The ld. Adjudicating Authority has rightly relied on the Advance Ruling holding that CTH 0802 covers only fresh and dried areca nuts/betel nuts, the items (i) API Supari, (ii) Chikni Supari, (iii) Unflavoured Supari, (iv) Flavoured Supari & (v) Boiled Supari termed as preparations of betel nuts.

Admittedly, in this case, when the betel nuts is boiled, then, it has lost its character, therefore, the betel nuts have been rightly classified under CTH 21069030.

In view of this, we do not find any infirmity in the impugned order and the same is upheld.

Classification of Flavoured Supari under Heading 2106 (CTH 21069030) - Classification of Areca/Betel nuts under Heading 0802 (CTH 080280) - General Rules for Interpretation (GIR) Rule 3(a) - preference for the most specific description - Supplementary Note 2 to Chapter 21 defining "betel nut product known as Supari" - CBIC Circular No. 163/19/2021-GST read with Section 3(7) of the Customs Tariff Act - Eligibility for exemption under Sr. No. 39, Table 1 of Notification No. 68/2012-Cus.

Classification of Flavoured Supari under Heading 2106 (CTH 21069030) - Classification of Areca/Betel nuts under Heading 0802 (CTH 080280) - General Rules for Interpretation (GIR) Rule 3(a) - preference for the most specific description - Supplementary Note 2 to Chapter 21 defining "betel nut product known as Supari" - CBIC Circular No. 163/19/2021-GST read with Section 3(7) of the Customs Tariff Act - Flavoured Supari is classifiable under Tariff Item 21069030 (betel nut product known as "Supari"). - HELD THAT: - The Authority examined competing classifications under CTH 0802 (areca/betel nuts) and CTH 2106 (food preparations). Applying the General Rules for Interpretation, in particular GIR 3(a), a specific description is preferred over a general one. Supplementary Note 2 to Chapter 21 expressly defines a "betel nut product known as Supari" as any preparation containing betel nuts not containing lime, katha or tobacco and may contain ingredients such as menthol. The imported product is shown to be a prepared/processed betelnut (cleaning, cutting, roasting, addition of flavours such as menthol) that meets the Supplementary Note's description. The Authority considered CBIC Circular No. 163/19/2021GST and the interaction with Section 3(7) of the Customs Tariff Act, finding that the circular's classification of scented/sweet supari under 2106 90 30 supports application of the same tariff item for customs purposes so as to avoid differing CTHs for basic customs duty and IGST. Prior advance rulings favouring Chapter 8 were considered but the Authority held that (i) a stay of a ruling in another, specific case does not preclude deciding this applicant's request on merits; and (ii) a binding judgment of the jurisdictional High Court (Madras) upholding classification under 21069030 must be followed. On that basis the Authority concluded that the product does not merit classification under CTH 0802 and is classifiable under CTH 21069030. [Paras 5]

Flavoured Supari merits classification under CTI 21069030.

Eligibility for exemption under Sr. No. 39, Table 1 of Notification No. 68/2012-Cus. - Classification of Flavoured Supari under Tariff Item 21069030 - Flavoured Supari, being classifiable under Chapter 21 (CTH 21069030), is eligible for the concession of basic customs duty under Sr. No. 39 of Table 1 of Notification No. 68/2012Customs dated 31.12.2012. - HELD THAT: - Serial No. 39 of Table 1 to Notification No. 68/2012 extends BCD concession to "All goods" classified under Chapter 21 except certain alcoholic preparations of 2106 90. Having held that the subject goods fall within CTI 21069030, the Authority determined they fall within the ambit of Sr. No. 39 and are therefore eligible for the stated concession. The conclusion follows directly from the classification finding and the explicit scope of the notification. [Paras 5, 6]

Flavoured Supari is eligible for the concession under Sr. No. 39, Table 1, Notification No. 68/2012Customs.

Final Conclusion: The Customs Authority for Advance Rulings allows the application: flavoured supari is classifiable under CTI 21069030 and, accordingly, is eligible for the basic customs duty concession under Sr. No. 39 of Table 1 to Notification No. 68/2012Customs.

Seeking to quash Look Out Notice - from the said Look-Out Circular, it does not reveal that whether any cognizable offence is made out against the petitioner or not - proceeding initiated against the petitioner is still at the stage of investigation and till date no cognizable offence is made out against the petitioner - HELD THAT:- Under Section 212(14), the Central Government has been empowered to direct the SFIO to initiate prosecution against the Company or its officers, if the Central Government considers it necessary after examination of only “investigation report” issued under Section 212(12) i.e. after completion of the investigation - In the case in hand, it is admitted by the respondents in their report stating that “since the matter primarily appears to be a fraud which is charged under Section 447 of the Companies Act, 2013”. It is also admitted that investigation is going on. No interim report is submitted. Thus, this Court failed to appreciate under what basis the LOC is issued against the petitioner.

The judgment relied by the respondent in the case of Hemanta Kumar Banka [2023 (8) TMI 1695 - CALCUTTA HIGH COURT] is distinguishable from the facts of the present case. Against the appellant in the said case, criminal case was initiated at Signapore under Section 400 of the Singapore Act, 2018 and the Hon’ble Division Bench was of the view that if the appellant is permitted to travel to Singapore, he will be detained in Singapore and cannot leave the said country - In the case of Chaitya Shah [2021 (11) TMI 662 - BOMBAY HIGH COURT] the Hon’ble Division Bench of the Bombay High Court finds that the petitioner had dual citizenship and in case he decides not to return to India it would become very difficult to bring him back.

In the present case the respondents have not brought anything on record to show that if the petitioner is allowed to travel outside India, there is no chance of the petitioner to return back to India - This Court did not find any justification to the assertion made by the respondents that the ongoing investigation will be adversely impacted and will cause severe determent to public interest.

The Look-Out Circular issued as per the direction of Ministry of Corporate Affairs, dated 19th July, 2022, against the petitioner, is set aside and quashed - Petition allowed.

Service tax demand on the basis of the unverified data received from the Income Tax department - SCN issued without following the mandatory pre-Show Cause Notice consultation - violation of principles of natural justice - levy of interest and penalty as well - HELD THAT:- It is found that the Revenue has not conducted any independent verification of the nature of the services rendered by the appellant and its Service Tax liability. Evidences available on record indicate that an e-mail dated 16.04.2021 was sent to the appellant seeking some documents. Subsequently, another later dated 21.04.2021 was also sent seeking documents. However, without waiting for the appellant to submit any document, the impugned Show Cause Notice was issued on 28.04.2021, i.e., within a week from the letter dated 21.04.2021, solely on the basis of the data available in Form 26AS received from the Income Tax department. It is found that the Revenue has not conducted any independent enquiry to ascertain the nature of services rendered, prior to issue of the Notice.

A perusal of the said Show Cause Notice clearly reveals that the demand has been raised solely on the basis of the CBDT data, without any independent verification being conducted - the CESTAT is agreed with the submission made by the appellant that the Show Cause Notice has been issued merely on the basis of the data received from the Income Tax Department, without conducting any independent enquiry, for levy of Service Tax, which is legally not sustainable.

The demand confirmed in the impugned order, solely on the basis of the CBDT data, without conducting any independent verification to ascertain the nature of the services rendered, is not sustainable - the demand of Service Tax confirmed in the impugned order is liable to be set aside on this ground itself.

From the impugned order, it is found that the Ld. adjudicating authority has given the finding that the works rendered by the appellant are related to construction of civil structures and other original works in relation to road and irrigation related work, to government bodies / local authorities / governmental authorities, which were exempted from payment of service tax as provided under N/N. 25/2012-S.T. dated 20.06.2012 as amended by N/N. 09/2016S.T. dated 01.03.2016. In view of the above findings, there are no merit in the contention of the Revenue that the appellant has rendered taxable services which are not eligible for the benefit of exemption as provided under Notification No. 25/2012-S.T. dated 20.06.2012 as amended by Notification No. 09/2016-S.T. dated 01.03.2016. As the Revenue has failed to substantiate the allegation of the appellant rendering any taxable services which were not exempted and not discharging Service Tax thereon with corroborative evidence, we hold that the demand of Service Tax confirmed in the impugned order is not sustainable on merits also - Thus, in the absence of any corroborative evidence to substantiate the said allegation of non-payment of Service Tax, the demand of Service Tax confirmed in the impugned order is not legally sustainable and hence, the same is set aside.

Further, as per the Board’s Instruction vide Board’s instruction under F. No. 1080/09/DLA/MIS/15 dated 21.12.2015 and subsequent clarificatory Circular issued vide F No. 1053/02/2017-CX dated 10.03.2017, a Pre-Show Cause Notice consultation with the Principal Commissioner / Commissioner was mandatory prior to the issue of Show Cause Notices in cases where the demand of duty was above Rs. 50 lakhs. In the present case, it is found that even though the demand is clearly more than Rs.50 lakhs, no such pre-Show Cause Notice consultation was conducted by the Revenue. In fact, a letter was issued to the appellant on 21.04.2021 and the Show Cause Notice was issued on 28.04.2021 without even waiting for the reply from the appellant. Thus, the authorities have not followed the mandatory instruction laid down in the Board’s Circular dated 21.12.2015 before issue of the instant Show Cause Notice. The Show Cause Notice issued without following the above said Circular is thus legally not sustainable.

The Show Cause Notice issued without following the requirement of pre-Show Cause Notice consultation as mandated in the above Circular, is legally not sustainable - the demand of Service Tax, as confirmed vide the impugned order, is not sustainable and hence, the same is set aside - As the demand of Service Tax itself does not survive, the question of demanding interest or imposing penalty under Section 78 of the Finance Act, 1994 does not arise - Further, as there is no liability to Service Tax on the part of the appellant in this case, there was no need to take registration or file returns. Therefore, there are no justification in the imposition of penalty under Section 77(1)(c) of the Finance Act 1994 or the levy of late fee under Rule 7(C) of the Service Tax Rules, 1994 and accordingly, the said penalties are also set aside.

The impugned order is set aside - Appeal allowed.

Demand of Service Tax - Classification of taxable service - service as Business Support Services - Supply of tangible goods service - Customs House Agent Service, Storage and Warehousing Service, Transport of Goods by Road and Renting of Immovable Property Service - Temporal applicability of newly introduced taxable entry - HELD THAT:- As it appeared that the said service is classifiable under Business Support Services, proceedings were initiated by issue of Show Cause Notice dated 12.10.2010 for demand of Service Tax for the period April 2009 to March 2010.

We find that an identical issue for the previous period i.e. May 2006 to March 2009 has been decided by a Coordinate Bench of this Tribunal [2025 (10) TMI 455 - CESTAT CHENNAI] in the appellants favour, held that " it is clear that the supply of cranes, forklifts which were used to shift big machineries/materials from one place to another as well as from one point to another within the same premises, would also not be classifiable under the category of "Business Support Services". Accordingly, the demand in this regard is also set-aside.

Judicial discipline requires us to follow the judgment of a Coordinate Bench for an earlier period, especially when the issues therein has not been distinguished on facts by Revenue.

Thus, we set aside the impugned order and allow the appeal.

Scope of Intermediary - appellant is covered under the definition of ‘intermediary’ under Rule 2(f) of Place of Provision of Service Rules, 2012 or not - Department was of the view that the appellant acts as a link between AWSI and its customers located in India by temporarily holding and routing the data through the edge servers installed in India - marketing services - Invocation of extended period of limitation.

Scope of Intermediary - appellant is covered under the definition of ‘intermediary’ under Rule 2(f) of Place of Provision of Service Rules, 2012 or not - Department was of the view that the appellant acts as a link between AWSI and its customers located in India by temporarily holding and routing the data through the edge servers installed in India - HELD THAT:- The issue, whether an assessee can be categorised as intermediary and whether the services rendered falls under the export of services have been the subject matter of concern in various decisions with reference to providing support services in India to foreign universities and institutions where the assessee arranges and facilities provisional student recruitment services. In these cases, the agreement for the search services was between the appellant and the foreign universities and there was no agreement with the Indian students. Further, the amount as commission or consideration was received from the foreign universities in convertible foreign exchange and not from Indian students and in such circumstances, the High Court in Commissioner of Central Tax, CGST, Delhi East versus T.C. Global India Pvt Ltd [2025 (12) TMI 102 - DELHI HIGH COURT] has held that the Indian students are not service recipients of the impugned services rendered by the appellant. While noticing that the very issue has been considered by the Bench in Commissioner of DGST Delhi versus Global Opportunities Pvt. Ltd [2025 (10) TMI 371 - DELHI HIGH COURT] with reference to the provisions of the IGST Act and the present case relates to the service tax regime, it was observed that the definition of ‘intermediary’ under rule 2(f) of the POPS Rules is in parimateria to the definition of ‘intermediary’ under section 2(13) of the IGST Act.

The law is settled that an intermediary merely arranges or facilitates supply of goods or services or both between two or more persons and a person, who supplies the goods or services is not an intermediary.

Whether in the present case the appellant satisfies the conditions for being an intermediary in terms of the definition under Rule 2(f) and also as per the agreement entered between the appellant as the provider and AWSI, as the recipient of the service? - HELD THAT:- To satisfy the first condition, the service provider must be appointed as a broker or an agent of the service recipient, who is the principal. Clause 5.1 of DSA titled as “Relationship Between Parties” in clear terms says that any services performed by a party pursuant to this agreement are performed by such party as an independent contractor on a non-exclusive basis and nothing in this agreement creates a partnership, joint venture, franchise or agency relationship between the parties. The necessary implication is that the appellant is not an agent by any means. It is a settled principle of law that the terms of the agreement has to be read as they are and there cannot be innovation in the terms of the agreement contrary to the intention of the parties.

The next condition is whether the appellant is arranging or facilitating any service between two or more persons - As per the agreement, the appellant is rendering only one service, i.e. data hosting services to AWSI. The cloud computing services provided by AWSI to its customers is by virtue of a separate agreement between them, to which appellant is not a party. The role of the appellant is altogether for an independent activity in the nature of data hosting services, which is one of the inputs for provision of cloud computing services by AWSI. There is no scope for arranging or facilitating any provision of service by the appellant - The allegation made by the revenue that Indian customers access cloud computing services from AWSI via appellant’s data server facility and, therefore, the appellant facilitates the provision of cloud services for its customers from AWSI is not the scope of services. The data hosting service is one of the inputs for the provision of cloud computing services by AWSI.

Lastly, examining the condition of the definition of ‘intermediary’ that it does not include a person, who provides the main service or supplies on his own account, we find that the appellant is providing the data hosting service on his own account. The various clauses provided in Exhibit ‘B’ to DSA indicates that the provider will be solely responsible for all activities relating to the operations and maintenance of the facility and supply of furnishing, fixtures, etc. The entire responsibility for rendering the main service of data hosting services under the agreement was on the appellant on his own account and is not connected in any manner for rendering the cloud computing services which is in the exclusive domain of AWSI. Therefore, the appellant is outside the purview of intermediary services - the appellant is not rendering any intermediary services, the scope of applicability of Rule 9 is ruled out, and consequently, under the General Rule 3, the place of provision shall be the location of the recipient of service. There is no dispute that the service recipient ASWI is located outside India and therefore, the services provided by the appellant would be taxable outside the taxable territory and as a result there is no scope for levy of service tax.

Invocation of extended period of limitation - HELD THAT:- This is not a case which falls under any of the exceptions provided for invocation of the extended period. The appellant bonafide believed that the services rendered by them were covered under export of services as per Rule 6A of the Service Tax Rules, 1994 and since they were not falling under the category of ‘intermediary’ the incidence of service tax would not fall on them. In view thereof, the appellant cannot be said to have suppressed or mis-declared so as to justify the extended period of limitation.

Marketing services - HELD THAT:- The provisions of Section 73(3) has to be read with the Explanation-I, which provides that interest under Section 75 shall be payable on the amount paid by person under this sub-section. Though, the appellant in their submissions referring to the letter dated February 25, 2016 has stated that the amount of service tax along with applicable interest was paid on the marketing services for the period from April 2014 to January 2016, however, the adjudicating authority has observed that the appellant has not paid the interest on such amount as reflected in the relevant ST–3 returns - In view of the contrary stand taken by the appellant and the Adjudicating Authority, we consider it appropriate to remand the matter to examine as to whether the appellant has paid the interest amount before the issuance of SCN and if so, no penalty is leviable.

The impugned order in so far as the liability of service tax on the appellant in respect of data hosting services is concerned, the same is set aside and consequently, neither any interest nor penalty is leviable - The challenge to the levy of penalty in respect of the service tax amount paid before the issuance of show cause notice is concerned, the issue is remanded to the limited extent as to whether the interest amount has also been paid by the appellant.

The appeal is partly allowed and remanded to the Adjudicating Authority.

Demand of Service Tax - Cenvat Credit of Service Tax on professional indemnity insurance - Nexus between input and output service -Entitlement to credit for service providers - HELD THAT:- We find that this issue is no more res integra and has been settled by the Tribunal in favour of the assessees in various decisions, whereby the Tribunal has held that the assessees are entitled to Cenvat Credit of Service Tax paid on professional indemnity insurance.

In the case of KPMG India Ltd. [2017 (9) TMI 1261 - CESTAT CHANDIGARH], has also held that the asseessee who is the service provider and the services have been received by the assessee in the course of their business of providing output service, the assessee is entitled to avail the Cenvat Credit on the services used for their business of providing output service.

We also find that the professional indemnity insurance taken by the Appellant is related to the business carried on by the Appellant and there is a direct and visible nexus between input services and output services rendered by the Appellant, therefore, Cenvat Credit of the Service Tax paid on professional indemnity insurance would be allowed to the Appellant.

Thus, we are of the considered opinion that the impugned order is not sustainable in law, therefore, we set aside the same and allow the appeal of the Appellant.

Presumption of service by post - Limitation and scope for condonation of delay in appeal - Doctrine against taking advantage of one's own mistake (Commodum ex injuria sua nemo habere debet) -Burden of proof on assessee to show non-receipt of documents - HELD THAT:- It is evident from the documents that the Appellant never ever got his registered address changed from the earlier address to new address in their service tax registration certificate or the GST registration certificate. The principle place of business as indicated in the GST registration certificate continued to the same at which all the communications were made.

It is clear from the Instruction No. 01/2023-GST and updated Instruction No. 02/2024-GST, Government had launched special drive to identify the fake registrants under the GST Act during the period 16.05.2023 to 15.07.2023 and 16.08.2024 to 15.10.2024. Even during these drives also it is not coming out that the Appellant was not conducting the business from the said premises as the principal place of business in their GST registration certificate continues to be at ‘29/2-A, Kacchi Sarai, Near PNB Bank, Fatehabad Road, Tajganj, Agra, Uttar Pradesh 282001’. This only lead to one conclusion either the Appellant had been filing misleading affidavits or the department was not available to detect his fake business premises at the time of these extensive drives. In any case this is a matter of investigation and the department should definitely investigate whether the Appellant registration under GST at the said premises is fake or not in view of these affidavits.

It is a settled position in law no one should take advantage of his own mistake (Commodum ex injuria sua nemo habere debet).

Legal presumption if not rebutted by valid evidences, the same needs to be accepted. The proof of delivery as per Section 27 of the General Clauses Act, 1897 is evident.

No merits in this appeal. From the above evidences it is evident that Appellant’s registered address with Service tax / GST is the address at which the Order-In-Original was sent on 29.09.2021.

Appeal is dismissed.

Condonation of delay - Determination of the Retail Price - HELD THAT:- We do not find satisfactory explanation for the delay. Accordingly, the delay condonation application is rejected.

Appeal is dismissed as barred by time.

Determination of assessable value/Transaction value - Principal-to-principal sale - Assessable value - Related person / mutuality of business interest - Valuation under reasonable means / Rule 11 - recovery of differential duty -Rule 9 valuation (sole buyer / related persons) - Rule 10A (job work valuation) - Penalty under Rule 26, Central Excise Rules, 2002 - Extended period of limitation - it was held by CESTAT that 'The transaction value entered between MFCPL and IFFL be accepted for assessment of FCPs cleared to IFFL and not the value computed under Rule 11 read with Rule 9 of CEVR, 2000, as held in the impugned Order; consequently, the demand of duty confirmed as short paid calculated on the differential value at which appellant MFCPL sold products to IFFL and the price at which IFFL sold the products to customers, during the period in question, cannot be sustained.'

HELD THAT:- There are no perversity in the findings returned by Customs, Excise & Service Tax Appellate Tribunal (CESTAT) that the relationship between the parties was that of principal to principal and not of a job worker to principal. This being a finding of fact, which suffers from no perversity, the Apex Court is declined to entertain these appeals.

Appeal dismissed.

Availability of CENVAT credit after omission of Rule 12B - Job work in textiles and textile articles - Fraudulent availment (bogus invoices) -Transitional relief and protection of accrued rights - Remand for de novo consideration by High Court - Limitation on issuance of addendum to Show Cause Notice - Requirement of separate adjudication under Section 11A - Penalty and interest provisions under Section 11AB and Section 11AC - Procedural provisions for CENVAT credit under Rule 4(5)(a) and rebate under Rule 18 - Whether the appellant is eligible to avail CENVAT Credit during the disputed period from 09.07.2024 to 30.06.2005, when Rule 12B Rules of 2002 was omitted from the statute book by notification No.11/2004-C.E. (N.T.) dated 09.07.2004? - HELD THAT:- On plain reading of the procedure prescribed under Rule 12B ibid, it transpires that the government had prescribed a detailed procedure for enabling the textile processors who had to depend upon job workers for undertaking various activities before the final products are manufactured by them, which could be cleared for home consumption on payment of duty or exported under claim for rebate. It also provided for availing CENVAT credit facility by complying with various requirements of law such as, issuance of invoice, documentation of movement of goods, maintenance and accounting of goods including generation of waste/scrap, accountability of the entire process of sending goods for job work and their return to the factory, furnishing of information to the jurisdictional Central Excise authorities etc., The said facility was withdrawn by issue of Notification No.11/2004-C.E. (N.T.) dated 09.07.2004, which came into effect immediately on the date of its issue i.e., on 09.07.2004.

Thus, we are of the considered view that the appellants are eligible to CENVAT Credit during the disputed period from 09.07.2024 to 30.06.2005.

It is not in dispute that the SCN for recovery of CENVAT credit was issued on 09.08.2005. Further, the addendum was issued after a lapse of more than two years i.e., on 17.09.2007. Since, the addendum had considered entirely a new ground, which was not canvassed in the original SCN dated 09.08.2005, such fresh grounds urged cannot be addressed to by the judicial forum inasmuch as the said addendum is not in continuance with the original SCN containing the same allegations. Therefore, we are of the considered view that the grounds under addendum dated 17.09.2007 is required to be issued separately under the legal provisions of Section 11A of the Central Excise Act, 1994. Thus, the demand of CENVAT Credit on account of additional ground, even though such amount is already covered under the SCN issued earlier, is required to be issued separately within the normal time limit provided under Section 11A ibid.

Since, the original SCN dated 09.08.2005 was issued by invoking the extended period of limitation, the addendum thereto cannot be further issued beyond the period of two years thereto. Therefore, both on account of limitation of time as well as on merits, the addendum issued on 17.09.2007 is not legally sustainable.

Thus, we do not find any merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellant M/s Venus International. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant. As discussed, since the other appeals as per the preamble have already been disposed of, the same become infructuous.

Eligibility of input service credit for outward transportation (GTA service) - clearance of cement -Distribution of CENVAT credit by input service distributor -Recovery of CENVAT credit under Rule 14 of CENVAT Credit Rules, 2004- Place of removal - Suppression of facts - Duplication of demand - HELD THAT:- The case of the appellant, however, is that these are services utilized for the manufacture and clearance of ‘cement’ produced in these units and that, in accordance with the terms of supply placing of risk and liability upon the cement manufacturing units, utilization of ‘goods transport agency (GTA) service’ would be in connection with manufacture of cement. More so, as the appellant has not distinguished between the end uses of ‘cement’ for discharge of duty liability. This aspect has not been dealt with in the impugned order. The appellant has also contended that there has been duplication of the elements of demands fastened on the cement manufacturing units. This submission of the appellant has not been taken into consideration in the impugned order.

The question of suppression of facts with intent to evade payment of duty by utilization of ineligible credit needs to be ascertained in the context of 17 factories not being cognizant about the source of credit. It is also not seen from the impugned order that the adjudicating authority had taken into consideration availability of credit exceeding the disputed amount for facilitating clearances which would allegedly be effected by utilization of CENVAT credit. In view of the deficiencies and gaps in the findings, it would be appropriate to set aside the impugned order and remand the matter back to the original authority for fresh decision on any recovery to be made from the 17 factories of the appellant.

Appeal is allowed by way of remand.

Validity of arbitration agreement where contract is alleged to be procured by fraud - Jurisdictional objection under Section 16 of the Arbitration and Conciliation Act, 1996 - Application to amend pleadings in arbitration and discretion of the arbitral tribunal - Failure to permit leading of oral evidence and consequences for award - Perversity, absence of referable reasons and nonconsideration of documentary evidence in an arbitral award - Public policy and adjudication of fraud/misrepresentation in contractual disputes - Setting aside an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996

Validity of arbitration agreement where contract is alleged to be procured by fraud - Jurisdictional objection under Section 16 of the Arbitration and Conciliation Act, 1996 - Whether the arbitral tribunal rightly rejected the Petitioner's jurisdictional objection premised on alleged suppression of initiation of CIRP against a lead JV member and thereby prevented the Petitioner from raising the defence that the contract (and the arbitration agreement) was void for fraud. - HELD THAT: - The Court found that the Tribunal treated an email seeking deferment as if it were a formal Section 16 application and then rejected the jurisdictional challenge for reasons which were legally unsound and perverse. The Tribunal's reasoning - that the JV was an independent legal entity, that it was the Employer's responsibility to verify bidder credentials, that the Petitioner could not take advantage of its own default, and other like grounds - was contrary to fundamental legal principles and ignored that the lead consortium member (a company) had been under CIRP prior to bidding and had given express declarations. The Division Bench's dismissal of the writ challenging the Tribunal's order did not preclude examination of that order in the Section 34 petition. Because the question whether the contract/arbitration clause was vitiated by suppression of CIRP was central and ought to have been permitted to be raised and adjudicated, the Tribunal's refusal to allow proper pleading on that issue was a jurisdictional and procedural error. The Court concluded that the Tribunal ought to have permitted the Petitioner to raise and have adjudicated the validity of the contract/arbitration agreement rather than foreclosing the defence. [Paras 55, 56, 57, 58, 59]

Findings on jurisdiction in the arbitral order were perverse and the Tribunal erred in refusing to permit the Petitioner to raise and have adjudicated the contention that the contract/arbitration agreement was procured by suppression of CIRP; this defect vitiates the Award and requires setting aside and fresh adjudication.

Failure to permit leading of oral evidence and consequences for award - Perversity, absence of referable reasons and nonconsideration of documentary evidence in an arbitral award - Whether the Arbitral Tribunal could lawfully grant the respondent's claims (including damages and sizeable materialsupply claims) where the respondent did not lead any oral evidence and the Tribunal's findings do not refer to or analyse documentary evidence. - HELD THAT: - The Court held that the Tribunal adopted an irregular procedure by directing parties to file evidence before issues were framed, then treating nonfiling of witness lists as obviating the need for oral evidence, framing issues, and proceeding to decide the dispute on arguments and unproved documents. Many of the Tribunal's factfindings (delay, nonissuance of drawings, holds, nonpayment, quantity of structural steel, entitlement to loss of profits/damages) were recorded without discussion of specific documents or the testimony necessary to prove such claims. Established authorities require credible evidence (usually oral testimony supported by documents) for damages and similar claims; absent such proof the awards of those heads were unsustainable. The Award therefore suffers from patent perversity and lack of referable reasons; the Court declined to attempt to salvage the Award by mining the record to supply missing reasoning. [Paras 90, 91, 99, 100, 101]

The Tribunal's grant of the respondent's claims in absence of oral evidence and without discussing documentary proof is perverse; those findings cannot be sustained and constitute a further ground for setting aside the Award.

Application to amend pleadings in arbitration and discretion of the arbitral tribunal - Procedural irregularities in conduct of arbitration (treatment of emails as applications; framing issues before evidence) - Whether the arbitral tribunal lawfully refused the Petitioner's requests to amend the Statement of Defence and to lead evidence, and whether the procedural course adopted vitiated the arbitral proceedings. - HELD THAT: - The Court found the Tribunal's refusal to permit amendment (requests made promptly after discovery of the alleged suppression) was procedurally unjustified because the Tribunal predecided the point by treating preliminary communications as already decided and by relying on timelines without considering the Petitioner's contention that knowledge of suppression arose only at a later date. The Tribunal also adopted unconventional procedure - ordering affidavits of evidence before issues were framed, then treating absence of witness lists as dispensatory of oral evidence - which deprived the Petitioner of a fair opportunity to present its defence going to the root of the dispute. Those procedural failures amounted to lack of judicious approach and contributed to the conclusion that the Award could not be sustained. [Paras 92, 98, 99, 102, 103]

The Tribunal acted on procedures unknown to law by foreclosing amendment and by directing evidence and issues in an improper sequence; those procedural irregularities vitiate the arbitral proceedings and require setting aside the Award and rehearing.

Final Conclusion: The arbitral Award dated 18 June 2024 is set aside. The Court concluded that the arbitral proceedings suffered from substantive and procedural infirmities - including refusal to permit adjudication of the central fraud/validity defence, denial of opportunity to lead evidence, and multiple perverse findings unsupported by referable reasons - rendering the Award unsustainable. The parties are at liberty to initiate fresh arbitration where all issues (including validity of the contract and entitlement to claims) may be fully and fairly adjudicated; no order as to costs.