TaxTMI Updates e-Newsletter
Jan 28,2026

Entitlement to refund of unutilised ITC where transferor partially transferred ITC on amalgamation and refund was claimed subsequently - Refund of unutilised input tax credit - transfer of input tax credit on amalgamation - registration consequent to amalgamation - cancellation of registration - liability in case of amalgamation or merger of companies - Doctrine of Pari Delicto - Form GST ITC-02 compliance - HELD THAT:- Section 87 of the CGST Act, 2017 prescribes the liability in case of amalgamation or merger of companies. For the purpose of registration of effect of amalgamation on the registration of the ARTIPL, the provision of sub-section (2) to section 87 of the CGST Act, 2017 bears relevance. Sub-section (2) to section 87 of the CGST Act, 2017 begins with non-obstante clause and also has an added expression “for the purpose of this Act”. Non-obstante clause has been inserted with reference to the “said order” which is in context with sub-section (1), which again is in context with the order passed by the Court or Tribunal sanctioning amalgamation or merger. Sub-section(2) directs that two or more companies are to be treated as “distinct companies” for the period up to the date of the said order and the registration certificates of the said companies shall be cancelled with effect from “the date of the said order”. Thus, the statutory provision of sub-section (2) to Section 87 of the CGST Act, 2017 overrides the intention of treating two or more companies as distinct companies for the purpose of the Act, and the registration certificate of such companies is required to be cancelled from the “date of the order” passed by the Court or Tribunal sanctioning amalgamation or merger of the companies.

Though, there is no time limit prescribed for filing FORM GST-02, however, keeping in mind the above statutory time limits, it is mandatory that the same are observed and followed. As held by us there is violation and disregard to the statutory provisions. All the formalities of transfer of unutilized ITC are required to be completed within the time specified in order to avoid further complications on amalgamations of the entities. In the instant case, the action of registration and cancellation of registration is at odds on with the settled legal precedent that the amalgamating entity ceases to exist upon the approved scheme of amalgamation.

Pertinently, FORM ITC-02 requires to mention the GSTIN of both the transferor-company and transferee-company. In other words, the Transferor Company should have a valid registration on the date of transfer of unutilized Input Tax Credit. The petitioner-ATIL has obtained Registration No. 24AAJCA1167G1ZX (for Gujarat) on 21.12.2025 w.e.f. 25.05.2023. The registration of ARTIPL was cancelled on 29.11.2024. FORM GST ITC-2 was transferred on 20.10.2023 by the ARTIPL for unutilized credit. All pending liabilities, interests etc., were required to be addressed and settled by the transferor-ARTIPL during the transition period.

The rights and liabilities of ITC of ARTIPL got crystallized on the zero rated export of goods resulting into the ITC in its electronic ledger. Indubitably, on amalgamation and formation of ATIL, the only and exclusive manner to transfer the unutilized ITC from its electronic ledger was through FORM GST ITC-02, which it resorted to, but only in substantial part, i.e, almost 80%. The petitioner ATIL was entitled to claim the entire unutilized ITC of ARTIPL and also encash it, if it was transferred by following the statute, since ATIL could not have claimed it any manner since, it never exported the goods. Hence, we do not find that respondent No. 1, while passing the Order-in-Appeal dated 08.01.2025, has committed any patent illegality in exercising his power under section 107 of the CGST Act, 2017.

As noticed by us, hereinabove, the action of both the entities and the Jurisdictional Officer is pernicious to the statutory provisions, and this Court cannot turn a blind eye to the illegality/irregularity committed by them, which ultimately abetted the amalgamated entities. In view of the Doctrine of Pari Delicto (in equal fault), the law aids neither party. Thus, erstwhile ARTIPL cannot seek any benefit of refund from the fault of the Jurisdictional Officer when it is equally at fault. Correspondingly, at this stage, ATIL cannot be allowed to claim refund of unutilized credit which was lying in the electronic ledger of ARTIPL since the statute does not permit the course suggested by petitioner-ATIL.

As we have already noticed the flawed approach by the Jurisdictional Officer/s in dealing the cancellation of registration of the transferee - ARTIPL and the registration of the transferor ATIL; we direct the Revenue to issue appropriate directions / instructions for scrupulously following the mandate of statutory provisions while dealing with the registrations of both the entities in case of amalgamation in order to avoid future complication. Appropriate instructions are also required to be issued for taking prompt steps within the time frame as soon as the Jurisdictional Officer comes to know about the fact of amalgamation of the entities.

On an overall analysis of the facts, statutory provisions and the case laws, the writ petitions fail legal scrutiny, hence we restrain ourselves from interfering with the impugned orders. The writ petitions stand dismissed.

Custodial detention and bail in economic offences - Non-existent firms involved in fake invoicing of cement and steel and fraudulent availment of Input Tax Credit (ITC) without actual supply of goods - Gravity of offence - Input Tax Credit fraud - right to personal liberty under Article 21 - prevention of tampering with evidence and influencing witnesses - cautious approach in large-scale economic and financial fraud - intelligence developed through GSTN data analytics, BIFA portal and e-way bill systems revealed a network of newly registered - HELD THAT:- It is well settled that in cases involving large-scale economic and financial fraud, the Court is required to adopt a cautious, careful and guarded approach while considering an application for bail. Economic offences, particularly those involving systematic tax evasion, creation of bogus entities, fabrication of documents and fraudulent availment of Input Tax Credit, are not confined to individual wrongdoing but have serious ramifications on public revenue and the economic health of the State.

The allegations disclose a prima facie involvement of the petitioner in a structured and pre-meditated economic offence involving the creation and operation of multiple non-existent entities, issuance of fake invoices and fraudulent availment of Input Tax Credit to the tune of approximately ₹15 crores. The material collected by the investigating agency, including GSTN data analytics, e-way bill records, banking and KYC documents, electronic devices and digital communications, indicates that the offence was not an isolated or technical infraction but a well-planned scheme causing substantial loss to public revenue. The manner of commission, the scale of the alleged fraud and the organised nature of the transactions bring the case squarely within the category of grave economic offences which, as held by the Supreme Court, stand on a distinct footing for the purpose of bail.

Further, the petitioner is alleged to have exercised effective control over the business entity and its operations, and the prosecution has asserted recovery of incriminating electronic material and corroborative statements linking him to the fraudulent transactions. The apprehension expressed by the State that release on bail may enable the petitioner to influence witnesses or tamper with digital and documentary evidence cannot be said to be unfounded, particularly in cases involving financial trails, electronic records and interconnected actors.

Balancing the right to personal liberty with the larger public interest and the serious impact of the alleged offence on the economy, this Court is of the considered view that the present case does not warrant interference with the impugned order rejecting bail, at this stage.

BLAPL is, accordingly, dismissed.

Refund Claim - Levy of GST on transfer of immovable property - Assignment and transfer of leasehold rights not amounting to supply-Deficiency Memo in Form RFD-03 - refund of tax u/s 54 - scope of supply u/s 7(1)(a) - entry in Schedule - entitlement to refund of the tax paid on leasehold transfer - HELD THAT:- It is the case of the petitioner that M/s. Dayaram Pharma Chem obtained the Final Transfer Order to sale the said plot from GIDC and the same was sold to the petitioner under an agreement dated 19.07.2024. The petitioner paid the total amount in two installments. It is further the case of the petitioner that this Court in case of Gujarat Chamber of Commerce v. Union of India [2025 (1) TMI 516 - GUJARAT HIGH COURT] has held that the assignment by sale and transfer of leasehold rights of the plot allotted by GIDC to the lessee in favour of the third party assignee for a consideration shall be an assignment/sale/transfer of benefits arising out of “immovable property” by the lessee-assignor in favour of the third party-assignee which would become the lessee of GIDC in place of the original allottee-lessee. Thus, in such circumstances, the provisions of Section 7(1)(a) of the Central Goods and Services Tax Act, 2017 (“GST Act”) providing for scope of supply read with Section 5(b) of Schedule II and clause 5 of Schedule III would not be applicable to such transaction of assignment of leasehold rights of land and building and the same would not be subject to levy of GST as provided u/s 9 of the GST Act.

Thereafter, the petitioner applied for refund of the tax paid on the said leasehold transfer under Section 54 of the GST Act. However, respondent no. 3 issued Deficiency Memo in Form RFD-03 on the ground that the supporting documents are not legible and in addition it was stated that there is no notification or circular published by the GST Council regarding refund of GST paid on lease transaction.

Respondents has tendered communication dated 22.1.2026 received from the office of Deputy Commissioner of State Tax, Range-14 Bharuch, and the same is taken on record. At the outset, learned Assistant Government Pleader, submitted that as and when the application is filed by the petitioner for refund of the tax amount paid by the petitioner, the same will be considered and refund will be paid to the petitioner.

Thus, the petitioner shall make an application seeking refund of the amount and in case such application is made by the petitioner, the amount of refund shall be paid to the petitioner within a period of two weeks from the date of receipt of such application.

Omission of Rule 96(10) of the CGST Rules - Nullification of pending proceedings in absence of a saving clause - Saving clause doctrine -Effect of repeal or omission on pending proceedings - HELD THAT:- The proceedings initiated under a provision of law, can be continued, even if such a provision of law is deleted from the statute book. However, such continuation would be permissible only when the omission of the provision is accompanied by a saving clause. In the present case, there is no such saving clause and as such, the pending proceedings would also stand lapsed. This observation is subject to the provisions of the General Clauses Act, 1897 and more specifically Section 6 of the General Clauses Act, 1897.

Writ Petitions are allowed setting aside the impugned assessment orders.

Clarificatory amendment - retrospective operation - imports edible oil and supplies the same in the domestic market after refining and packing the said oil. - refund of accumulated input tax credit on account of inverted duty structure - application of modified formula under Rule 89(5) - role of the GST Council and Law Committee recommendations - HELD THAT:- It is clear that the amendment to the formula in Rule 89(5) has to be treated to be clarificatory in nature and consequently would be retrospective. In the present case, though the orders of rejection as well as the appellate order were passed prior to the amendment, the fact remains that the petitioner had continued to agitate his claims in regard to the refund sought by the petitioner.

Writ Petitions are allowed setting aside the orders of rejection dated 09.06.2021, 13.01.2021 and 24.03.2021 passed by the primary authority as well as the appellate orders, dated 25.02.2022 and the applications of the petitioner, for refund, shall be considered by the primary authority afresh and by applying the modified formula in Rule 89(5) of the GST Rules.

Cancellation of registration - Failure to consider explanation / breach of principle of natural justice - Show-cause notice in Form GST REG-17 - HELDTHAT:- Petitioner submitted that the impugned order is required to be quashed and set-aside, since the reply of the petitioner dated 13.08.2025, which was filed with supporting documents under GST Portal, clarifying that it has not availed any input credit dehors the provisions of law has not been considered at all while passing the impugned order dated 12.09.2025.

The aforesaid submissions and the averments made in this regard in this petition stand uncontroverted and from the impugned order also we find that the same is passed without recording any findings to the explanation tendered by the petitioner in its reply dated 13.08.2025, as the same is hereby quashed and set-aside. The matter is remanded to Superintendent, Range III, Ahmedabad, who has passed the impugned order dated 12.09.2025 for passing a fresh order after giving the petitioner opportunity of hearing.

Condonation of delay in filing GSTR-3B returns - Entitlement for benefit u/s 62 of GST Act - failure to file GSTR-3B returns for the period January, 2023 to July, 2023 - appeals were filed beyond the period of limitation prescribed under Section 107 (1) of the GST Act - HELD THAT:- This Court followed the judgment rendered by Hon’ble High Court of Madras in M/s. Brothers Engineering and Errectors Limited Vs. State of Andhra Pradesh [2025 (8) TMI 1763 - ANDHRA PRADESH HIGH COURT]. In such circumstances, the benefit under Section 62(2) of the Act has to be extended to the petitioner as well.

The assessment orders dated 11.05.2023, 31.08.2023, 05.09.2023 and 15.09.2023 passed by the 1st respondent for the tax period January, 2023 to July, 2023 are deemed to have been withdrawn and consequently the impugned endorsement 11.09.2024 issued by the 2nd respondent is set aside. Further, any action initiated in pursuance of the said orders including issuance of Garnishee notices and attachment of the bank account of the petitioner shall also stand revoked.

Petition allowed.

Validity Of refund sanction order - Refund of amounts recovered during investigation - natural justice / personal hearing - reasoned and speaking order - quashing of administrative order - writ under Article 226 Constitution of India - judicial review of administrative action - HELD THAT:- We are of the view that the impugned order has not taken into consideration the submissions made on behalf of Petitioner and has not passed a well-reasoned and speaking order to reject/short sanction the refund as claimed by the Petitioner. The impugned order does not contain the discussion/reasoning on the issue that the refund as claimed by the Petitioner, was incorrect or against the provisions of law. The impugned order has merely rejected the claim of refund of the Petitioner on the ground that Respondent no. 3 was unable to differentiate whether the challans produced by the Petitioner were towards self-assessed tax liability or towards the liability detected during investigation. The impugned order has not held or no contrary material has been brought on record by the Department to show that the Petitioner did not deposit a sum during investigation. Thus, it is on consideration of such facts and contentions as urged by the Petitioner, that the impugned order has rejected/short sanctioned the refund, as claimed by the Petitioner. This, in our view, was not an appropriate approach of the Respondents.

Therefore, considering the aforesaid facts and submissions, we deem it appropriate to pass following order to meet the ends of justice.

Legality of demand arising from debonding of capital goods and admissibility of input tax credit - alleged double demand by State authorities after discharge of customs liability - challenge to a non-speaking Order-in-Original - High Court jurisdiction under Article 226 of the Constitution - appeal to Joint Commissioner (Appeals) u/s 107 - assessment and audit proceedings under Section 65 - recovery/demand u/s 73 - interest u/s 50 - ineligibility of input tax credit u/s 17(5) - definition/meaning of input tax and input tax credit under Sections 2(62) and 2(63) - availability of input tax credit u/s 16 - Notification No. 52/2003-Customs - HELD THAT:- Senior Advocate, submitted that the IGST payable on debonding of indigenous goods was confirmed by Respondent No. 4 and Respondent No. 4 is the competent authority to confirm the assessment of duty for debonding and issue NOC. The NOC issued by the customs authorities stated the amount of customs duty, SWS and IGST that was required to be discharged by the Petitioner for debonding the indigenous and imported capital goods while exiting the STP unit. The said payment included the IGST of Rs. 5,18,496/- on indigenous goods. It was therefore submitted that by the impugned order dated 22nd April 2024 the same is sought to be demanded once again by Respondent No. 3.

In view of the affidavit filed by the Commissioner of Customs dated 13th August 2025, Petitioner submitted that in respect of the tax liability which has been confirmed by order dated 22nd April 2024, he does not wish to agitate in respect of the amount of Rs. 19,53,894/- which pertains to tax interest and penalty in respect of IGST payable on de-bonding of indigenous capital assets. However, in respect of the other demands made amounting to Rs. 11,38,876/- which include tax, interest and penalty in respect of excess ITC alleged to have been availed by the Petitioner for de-bonding of indigenous capital asset an amount of Rs. 8,25,017/- (which also included tax, interest and penalty) in respect of alleged ineligible ITC u/s 17(5) of the MGST and CGST Act 2017, he would prefer an appropriate appeal to the Joint Commissioner (Appeals)-I under section 107(5) of the GST Act 2017.

The petitioner was directed to prefer an appeal before the Joint Commissioner (Appeals)-I under Section 107 within the stipulated period; the Court disposed of the writ after granting the petitioner the benefit of the period during which the writ was pending for the purpose of condonation of delay.

Writ Petition stands disposed of on the terms and conditions.

Profiteering and obligation to pass on benefit of input tax credit - statutory mandate of Section 171 - Methodology for computation in real estate area-based computation - Rejection of ITC-to-turnover ratio - Investigation and re-investigation under Rule 129 of the CGST Rules - Interest on profiteered amount under Rule 133(3)(b) -HELD THAT:- It is evident from the record that the Respondent has profiteered an amount of Rs. 35,800/- plus GST @ 12% i.e. Rs. 4,296/- totaling to Rs. 40,096/-. Which needs to be refunded and distributed in proportion to the area of each eligible buyer among the 1,865 units sold before the Occupancy Certificate. The flat Homebuyer and unit no. wise break-up of this amount was given in Annex-14 in the report.

The Tribunal had carefully considered the investigation report submitted by the DGAP dated 10.01.2025, the Respondent's unqualified acceptance thereof, the documentary evidence on record, the verified Statutory Auditor-certified financial statements, and the mathematical computations which remain uncontested by the Respondent and Applicant.

In view of the Tribunal findings, the investigation report dated 10.01.2025 submitted by the Director General of Anti-Profiteering is hereby accepted. The proceedings relating to the complaint of Shri Umesh Kumar Shukla (Applicant) against Ms. Pan Realtors Private Limited (Respondent) are hereby closed, with a finding that the Respondent has agreed to discharge the statutory mandate of Section 171 of the Central Goods and Services Tax Act, 2017 in respect of the sale of residential units in the PAN Oasis project, Sector 70, Noida, by accepting DGAP's Report. Further, the Respondent has agreed to comply with DGAP’s report by refunding the profiteered amount to the respective homebuyers.

The Respondent shall file a compliance report to the DGAP and to the jurisdictional GST Commissioner(S) within the said period, evidencing the completion of such distribution to all eligible buyers. The case is accordingly disposed of.

Under-reported turnover - cash Deposits - Additions resulting into disturbing the trading results of the appellant - difference between turnover alleged to be available in CBEC data with turnover in books of account as under reported revenue - addition made relying on the CBEC data - mandation to confront with info relied upon - HELD THAT:- AO without making any enquiry straightaway rejected the claim of the Assessee. It is well settled law that, when an information is confronted to the Assessee and the Assessee disputes and provides contrary evidence, A.O. should conduct necessary enquiry to verify the correctness of the information relied by him.

The said ratio has been reiterated in the case of DM Estates (P) Ltd. [2020 (2) TMI 135 - ITAT BANGALORE] wherein tribunal held that the assessee has no control over the data base of the Income-tax Department as is reflected in Form No. 26AS and at best the assessee could do is to offer bona fide explanations for these differential which the assessee did in this case during the appellate/remand proceedings. Income-tax Department has all the information and data base in its possession and control the learned Commissioner of Income-tax (Appeals)/Assessing Officer ought to have conducted necessary enquiries to unravel the truth but asking the assessee to do impossible is not warranted. The tribunal finally concluded that no additions to the income are warranted in the hands of the assessee owing to differential in income based on Form No. 26AS and the income as is reflected in the books of account maintained by the assessee.

In the present case, the advances received from customers was treated as taxable services under the Service Tax Act, but the revenue from these activities is required to be booked as and when the sale is actually executed through conveyance deed. There was sale of the plot booked for Rs.3,48,00,000/- as revenue in P&L account on the ground that on the above sale of plot which is outside the ambit of service tax Act having no impact on service tax liability computation.

So far as the payments of Rs.3,60,000/- and Rs. 10,03,621/-, it was claimed that these are the expenses booked but those expenses are covered since under reverse charge under service tax Act, the same are required to be shown as chargeable services as per service tax returns on the ground that service tax liability on such services availed needs to be discharged by the recipient of such services, therefore, contended that those payments are not part of turnover.

A detailed reconciliation chart of the services shown as per service tax returns and the income booked in P&L account has been placed which was also filed both with the lower authorities. Decided in favour of assessee.

Addition u/s 68 r.w. Section 115BBE - unexplained cash deposits - Assessee submitted that the source of the cash deposited during the demonetization are out of earlier withdrawals - Assessee deposited total cash of Rs. 1,25,32,000/- and made the cash withdrawal was Rs. 1,48,56,500/- even in the preceding assessment year the amount of cash withdrawals was Rs. 57,50,000/- and deposit of cash was Rs. 55,80,000/-. Assessee has also contended that the cash deposited from April to 08/11/2016 was Rs. 59,80,000/- which is Rs. 8,00,000/- per month and the reason for increasing cash deposit during the demonization was due to exceptional circumstances because of the demonization period that the Assessee had to make deposit of entire cash represented by demonetized currency. Therefore, contended that the cash deposited during the demonization and other than demonization period cannot be compared. Further from the cash book it is found that as on the date of pronouncement of demonization, the Assessee had cash in hand of Rs. 74,93,435/- out of which Rs. 56,65,000/- was deposited during the demonization period being the cash represented by demonetized currency. The said cash book is being a part of books account of the Assessee which has not been rejected by the A.O.

Unexplained cash credit u/s 68 r/w section 115BBE - onus of proving unsecured loan - CIT(A) deleted addition - HELD THAT:- It is not in controversy that the assessee has duly filed relevant documents referred to above before both the parties below, however, may be inadvertently or oversight, the same remains to be examined by the AO. Commissioner independently examining the aforesaid documents, ultimately held that the assessee has discharged its onus of proving unsecured loan as genuine.

DR also acknowledged this fact of filing relevant documents to discharge its onus u/s 68 of the Act by the assessee but submitted that these documents alone do not conclusively establish the legitimacy of the transactions, as Ld. Commissioner erred in accepting this evidence, at face value without scrutinizing the underlying financial capacity and intent of the creditors. However, the loan amounts provided by the creditors were significantly disproportionate to their declared incomes.

It is settled that showing having and declaring a meagre income is not only a criterion to weigh the creditworthiness of the creditors but in fact capital, reserve, surplus and financials in total, are requires to be seen, which the Ld. Commissioner has examined independently.

DR also relied on various judgments referred to above, which are not applicable to this case as in the instant case the assessee by producing relevant evidence/documents has prima facie discharged its onus cast under section 68 - Decided in favour of assessee.

Addition u/s 37(1) in the original assessment order and u/s 69C in the subsequent assessment order in pursuance of order u/s 263 - We observe that the Ld. Commissioner again thoroughly examined the relevant documents referred to above of the assessee, as well as of the parties’/loan creditors and by independent finings, ultimately came to the conclusion that the assessee has discharged its onus of proving unsecured loan, as genuine and interest paid on unsecured loan is accepted. The findings of the Ld. Commissioner are based on the peculiar facts and circumstances in totality, as well as relevant documents referred to above.

In our considered view as well, assessee has duly discharged its prima facie onus cast to prove the genuineness of the interest transactions. And thus, the addition under consideration is also unsustainable and has righty been deleted by the Ld. Commissioner.

Making of addition u/s 69C by the subsequent AO in pursuance to the Order u/s 263 of the Act, we observe that the Ld. Commissioner in the last part of the impugned order specifically considered such aspect and observed that the Ld. Assessing Officer in the assessment order has not mentioned anything and as he has held already deleted the addition and therefore the order passed under section 143(3) read with section 263 of the Act became redundant.

As the Ld. Commissioner deleted the aforesaid addition not only on the basis of relevant evidence/documents and peculiar facts and circumstances of the case but also on the legal aspects as involved and therefore there is no infirmity in the order passed by Ld. Commissioner in deleting the addition under consideration as well.

TDS u/s 194H - commission paid to travel agents by airlines - Supplementary Commission - whether agents of respondent-airline company have/must have deposited the amount of tax ? - HELD THAT:- As decided in Singapore Airlines [2022 (11) TMI 783 - SUPREME COURT] held that in light of the consensus between the parties that the travel agents have already paid income tax on the supplementary commission. there can be no further recovery of the shortfall in TDS owed by the assessees. Interest may be levied u/s 201(1-A) of the IT Act. As an epilogue to this aspect of the matter, the assessing officer is directed to compute the interest payable by the assessees for the period from the date of default by them in terms of failure to deduct TDS, till the date of payment of income tax by the travel agents.

It will be open to the assessing officer to look into any details that are necessary for completion of this exercise, including verification of whether tax was actually paid at all by the agents on the amounts from which TDS was supposed to be subtracted. Given that no documentary evidence was placed before us, we are conscious that there may be certain anomalies which the assessing officer is best positioned to iron out.

In the eventuality that any of the agents have not yet paid taxes on the supplementary commission, the Revenue will be at liberty to proceed in accordance with law under the IT Act for recovery of shortfall in TDS from the airlines. However, we limit the ability to levy penalties against the assessees in light of Section 273-B of the IT Act.

AO shall issue demand notice in relation to applicable interest, on the applicable TDS amount, which the respondent-assessee shall have to deposit within a period of two months of the receipt of the demand notice. The AO shall not enquire into as to whether the amount of tax has been paid/deposited by the agent of the assessee inasmuch as it is ultimately upon the respective jurisdictional assessing officers of the agents to ensure assessment and collection of the tax (if any) on their income.

Reopening of assessment - Validity of reasons to believe - live link between seized material and assessee concerned -Reliance on statements and seized documents- as alleged huge amount was paid in cash “on money” for the sale consideration from the sale deed - statement of the searched person i.e. the broker and a register found from him which only mentions the survey no. 465 situated at Village Shela and the rate of “Rs. 17,000/-” mentioned therein

HELD THAT:- AO in the present case has on the information derived by him from the other sources has arrived at a conclusion that the unit price of the immovable property under consideration which was sold in the year 2021, it was at a substantial difference and it is assumed that there was huge amount which was paid as on money. Further the aforesaid documents neither named co-owner Gangdasbhai nor the petitioner. Though the Assessing Officer has correctly calculated share of the petitioner as 30% of the land, however, the intention of selling the entire plot of land in the year 2017, as per the seized document does not reconcile with the subsequent fact of the co-owner of the land Shri Gangadasbhai who gifts his share to his son Atulkumar after a period of four years.

Hence in absence of any independent corroborative material linking the present petitioner with the alleged - on money transaction, we are inclined to quash and set aside the impugned notice - Decided in favour of assessee.

Right to file return electronically - by interim order Petitioner was permitted to file a paper return - Revenue submitted that the Revenue is not permitted to process/assess any paper return and the same has to be filed electronically.

HELD THAT:- We dispose of the above Writ Petition by passing the following order:-

(a) The Revenue shall ensure that the Income Tax Portal shall be opened by the Income Tax Department within a period of six weeks from today to enable the Petitioner to file their return electronically. Once the Income Tax Portal is opened for filing the return electronically, intimation of the same shall be given to the Petitioner.

(b) Once the Income Tax Portal is opened (and intimation thereof is given to the Petitioner), the Petitioner shall file its return of income electronically within a period of 4 weeks thereafter.

(c) The return shall be processed/assessed by the Revenue within a period of 12 months from the date of uploading of the return of income by the Petitioner electronically.

(d) It is needless to state that the return that will be filed electronically shall be deemed to have been filed within time as per the interim order passed by this Court.

Review of the Judgement [2025 (3) TMI 1584 - DELHI HIGH COURT] - Error apparent on the face of the record - scope of review - Not processing its income tax returns - as argued Review Petitioners were not given an opportunity to file its counter affidavit or obtain instructions before passing the Judgement and Judgement was passed without deciding whether the returns were validly filed.

HELD THAT:- Review Petitioners was represented through Counsel as evident from the appearance mentioned in the Judgement and an opportunity of hearing was granted to the Review Petitioner. The Judgement was passed after fully hearing the Counsel for the Review Petitioners. Accordingly, the reliance placed in the decision of The National Sewing Thread Company [2025 (3) TMI 1583 - DELHI HIGH COURT] is misplaced as none had appeared for the Respondents at the time of passing the judgement in that case. Hence, no ground is made for reviewing the Judgement on this count.

This Court ought to have decided whether the returns were actually validly filed in the facts and circumstances of these cases, the Judgement clearly observes that the Review Petitioners shall process the returns in accordance with law.

Accordingly, there was no error apparent on the face of the record by not deciding whether the returns were duly and validly filed before passing the Judgement as the direction given to the Review Petitioners provides that the returns shall be processed in accordance with law. The Judgement also records that if the time period for processing the return has expired, the return must be accepted at its face value.

It is settled law that the scope and ambit of review is very limited. The review can only be filed if there is an error apparent on the face of the record without requiring any long-drawn process of reasoning or there is a discovery of new and important facts or evidence, which was not available earlier despite exercise of due diligence. The Review Petitioners are not allowed to reagitate or reargue the Writ Petitions in guise of this Review Petitions as the same are not appeals in disguise. The power to review is extremely narrow, which only allows correction of the errors apparent on the record, but not to substitute a view taken in the Judgement once it is signed and pronounced.

No case made out for reviewing the Judgement.

Assessment passed on a non-existent entity/amalgamating company - validity of assessment against amalgamating company which had ceased to exist pursuant to an NCLT-approved scheme of amalgamation - HELD THAT:- As the Assessing Officer despite informing the fact of merger, passed the Final Assessment order in the name of erstwhile amalgamating company which was ceased to exist as a result of order of the NCLT, the impugned final Assessment Order passed in the name of the non-est entity cannot be sustained. Accordingly impugned assessment order is hereby quashed and the Ground No. 1 of the Assessee is allowed.

Denial of TDS credit - TDS mismatch in Form 26AS with the assessee - AR submitted that both the Karta of HUF and Rajni Agarwal (member of HUF) had not claimed the TDS credit each in their income tax returns and they had also specifically mentioned this fact in the Schedule of TDS filed along with the return of income - HELD THAT:- The evidence in this regard that both the Karta of HUF and member of HUF had not claimed the TDS credit each in their income tax returns is enclosed. This fact has not been appreciated by the lower authorities. Hence, in the interest of justice and fairplay, we deem it fit and appropriate to restore this appeal to file of ld AO for de novo adjudication in accordance with law. AO is directed to examine the fact as to whether the Karta of HUF and Rajni Agarwal (member of HUF) had not claimed the TDS credit each in their respective returns.appeal of the assessee is allowed for statistical purposes.

Depreciation on goodwill - assessee had acquired a going concern manufacturing unit by way of slump sale - AO held that the goodwill was created as a consequence of the Business Transfer Agreement and did not pre-exist in the books of either the transferor or the assessee and Business Transfer Agreement did not specify any separate consideration for goodwill.

HELD THAT:- Whether goodwill constitutes an intangible asset eligible for depreciation is no longer res integra. The Hon’ble Supreme Court in CIT v. Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] has categorically held that goodwill falls within the ambit of “any other business or commercial rights of similar nature” under Explanation 3(b) to section 32(1).

In the present case, however, the acquisition is not by way of amalgamation, demerger or succession covered under section 170, but is a slump sale between unrelated parties. The fifth proviso to section 32(1) is therefore not attracted. Consequently, the very foundation on which United Breweries Ltd. was decided does not exist in the present case.

Even in United Breweries Ltd [2016 (9) TMI 1527 - ITAT BANGALORE]Tribunal unequivocally accepted the principle that goodwill is eligible for depreciation under section 32(1)(ii), subject only to statutory restriction under the proviso.

In view of the settled legal position laid down by the Hon’ble Supreme Court in Smifs Securities Ltd., as reaffirmed by the Hon’ble jurisdictional High Court in Grindwell Norton Ltd [2023 (6) TMI 1522 - BOMBAY HIGH COURT] and having regard to the fact that the present case involves acquisition of a going concern by slump sale, we hold that the goodwill arising on such acquisition constitutes an intangible asset eligible for depreciation under section 32(1)(ii). Assessee appeal allowed.

Non-deduction of tax at source - Assessee in default under section 201(1) - Interest on default under section 201(1A) - Fee for delayed TDS statement under section 234E - Admission of additional evidence under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 - HELD THAT:- In view of the explanation furnished by the assessee and considering the fact that the additional evidence goes to the root of the matter, and further noting that the learned Departmental Representative has raised no objection, we admit the additional evidence filed by the assessee under Rule 29 of the ITAT Rules, 1963, in the interest of justice.

It is an admitted position that Form 26A certificates in respect of payments made to Shri Niraj Pamwani and Smt. Maithili Pamwani have now been filed and the same have already been verified by the Department. In such circumstances, the assessee cannot be treated as an assessee in default under section 201(1) of the Act in respect of the said payments. Consequently, the demand raised u/s 201(1) and interest levied u/s 201(1A) corresponding to these two payees is directed to be deleted.

Payments made to Shri Mustafa Ahmed and Shri Ravi Dogra, it is noted that the assessee has already disallowed 30 percent of the expenditure in the computation of income, as submitted by the learned Authorised Representative. To this extent, the action of the Assessing Officer is confirmed, and the Assessing Officer is directed to recalculate the amount payable, if any, in accordance with law after giving effect to this order.

Assessee has contended that the TDS return was filed within the prescribed time and, therefore, levy of fee under section 234E is not applicable. In the interest of justice, we direct the Assessing Officer to verify the factual position regarding filing of the TDS return and, if it is found that the return was filed within time, the fee levied under section 234E shall be deleted.

Validity of order passed u/s 153A without any incriminating material - abatement of pending assessments on initiation of search under section 132 - HELD THAT:- It is a settled position of law that in the order passed u/s 153A of the Act, additions could have been made based on the incriminating material. In the instant case, thought the proceedings u/s 143(3) were in progress when the search was carried out however, there is no document found as a result of search indicating any unexplained, unaccounted payment made at the time of acquisition of property for which the provisions of u/s 56(2)(x) of the Act could be invoked. This view is supported by the judgement of Abhisar Buildwell [2023 (4) TMI 1056 - SUPREME COURT] - Decided in favour of assessee.

Validity of jurisdiction assumed u/s 147 - ad hoc basis by disallowing 10% of certain expenses claimed by the assessee - whether CIT-A was justified in confirming the disallowance of expenditure on ad hoc basis?- HELD THAT:- CIT(A) had laid more emphasis on provisions of Explanation 3 to Section 147 which permits the AO to make addition on issues that are not subject matter of reasons recorded for reopening. In our considered opinion, the said addition could be made only if the addition that was subject matter of reasons recorded is also made by the AO.

If for any reason, the addition which was subject matter of reopening was not sought to be made by the AO, then he has no other choice, but to drop the said reopening proceedings and issue another notice u/s 148 by duly recording reasons for escapement of income of any other issue. This view of mine has been further fortified by the aforesaid decisions of the No hesitation to quash the reassessment proceedings by declaring it as void ab initio.

Addition has been made only on ad hoc basis by disallowing 10% of certain expenses claimed by the assessee - AO had given due cognizance to the audited books of account submitted by the assessee in respect of issue of gross receipts on sale of land disclosed thereon (which was subject matter of reasons recorded) but had sought to ignore the books of account only for the limited purpose of disallowance of expenses. The books of the assessee have not been rejected by applying the provisions of Section 145(3) of the Act and hence there is no basis for the ld AO to make ad hoc disallowances of expenses. Hence, even on merits, the disallowance is liable to be deleted.

Appeal of the assessee is allowed.

Addition on account of Unexplained deposits in the bank account- CIT(A) deleted addition as same has been offered in the return of income filed by the assessee - HELD THAT:- Though the Revenue has taken lengthy and argumentative grounds on this issue, but the Ld. DR could not rebut the factual finding given by the CIT(A) that the aforesaid amount was already offered for tax and there was no question for double addition of the same amount. Decided against revenue.

Unaccounted investment made in construction of the Flats - AO based on the DVO’s report, added the differential value as compared to the cost of construction claimed by the assessee as unexplained/unaccounted investment in construction of flats - CIT(A) deleted the additions so made by the AO observing that the DVO had not determined the cost of investment, but the market value of the property - HELD THAT:- CIT(A) has given elaborate findings, in this respect, holding that the DVO was supposed to calculate per square feet rates of construction as per the CPWD guidelines or State PWED guidelines. He should have bifurcated the cost of material item-wise and also the cost of labour to arrive at the cost of construction. Even the DVO was supposed to take the cost of material from time-to-time during the period of construction of flats. However, no such exercise was made by the DVO. It is obvious that after the completion of the construction, the market value of the flats would rise up and, therefore, the market value of the flats cannot be considered as cost of construction. Moreover, in the year under consideration, no such investment has been made by the assessee on the development/construction of flats, therefore, no addition can be made on this account - Decided against revenue.

Validity of the reopening of the assessment u/s. 147 r.w.s.148 - Change of opinion - Accommodation entries / bogus sales - Variance in initial information received and reasons recorded - HELD THAT:- Though, in this case, the initial information received by the AO was relating to the procurement of bogus purchase bills by the assessee however, in the reasons recorded, in the subsequent lines, it is mentioned that the assessee had given bogus purchase bills for commission @ 0.05% to Chaniyara Agro Industries Pvt.Ltd.

On the basis of aforesaid information, the AO show-caused the assessee as to why the assessment be not reopened.

After considering the reply of the assessee, the AO has passed an order u/s. 148A(d) of the Act, wherein, he has specifically held that the sales shown by the assessee to Chaniyara Agro Industries Pvt.Ltd. were not genuine and that the bogus transaction was done with the sole motive to, infuse of his own unaccounted income, in the guise of sale. A perusal of the order passed u/s. 148A(d) of the Act, shows that the assessment has been reopened by the AO, in this case, after due application of mind and after considering the facts on the file. We, therefore, do not find any infirmity in the order of the Ld. CIT(A) upholding the reopening of the assessment. Decided against assessee.

Unexplained cash credit on account of accommodation entry received - In this case, the assessee has duly disclosed all the sales made to Chaniyara Agro Industries Pvt.Ltd. in his books of accounts and all the sale consideration has been received through banking channel. The profit element has already been offered for taxation.

AO has not rejected the books of accounts. There is no evidence on the file that the assessee had routed his unaccounted income through aforesaid sales transactions. It is not the case of the AO that the net profit rate offered by the assessee is less as compared to the market transactions of the same goods. The sale transactions have been duly disclosed by the assessee in the GST returns. Since the assessee has already offered the profit element on such sales for taxation, hence, in our view, no addition is warranted in this case. The addition made by the AO is, therefore, ordered to be deleted. Decided in favour of assessee.

Reopening of assessment u/s 147 - reasons to believe - AO Power to assess or reassess independently any other income, which does not form the subject-matter of the notice - HELD THAT:- We agree with the submission of the assessee that in view of case of ATS Infrastructure Ltd. [2024 (7) TMI 1441 - DELHI HIGH COURT] assessment proceedings initiated vide notice u/s 148 of the Act in this case was not sustainable in the eyes of law when the AO had accepted the explanation regarding the source of investment in property for which the assessment was reopened in the case of the assessee for the present AYs as per the reasons recorded in para no. 2 of this order.

Thus, we hold that when the AO had accepted the explanation regarding the source of investment in property for which the assessment was reopened in the case of the assessee for the present assessment year, the AO could not have made the addition as made in the assessment order. Accordingly, we delete the addition - Decided in favour of assessee.

Suspension of licence where immediate action is necessary - Continuation of suspension after hearing - Revocation procedure and offence report - Due diligence and duties of Customs Broker - Supervision and vicarious liability for employees - Mis-declaration and failure to verify client details - Customs Broker Licensing Regulations, 2018 - word “immediate action” and “immediately” appearing in Regulation 16(1) - HELD THAT:- In the instant case, an enquiry was contemplated against the Customs Broker under Regulation 17 of CBLR as evident from the fact that in the impugned Order No. 11/2025 dated 01.07.2025 wherein the suspension of Customs Broker License of Appellant was ordered to be continued, it was ordered that inquiry proceedings under Regulation 17 of CBLR, 2018 shall follow. Further, the order of suspension of license of Appellant is dated 12.06.2025, which is well before initiation of enquiry against the Appellant under Regulation 17 of CBLR as ordered in impugned Order No. 11/2025 dated 01.07.2025. Thus, the two conditions prescribed under CBLR for suspension of license of Appellant, viz. contemplation of an enquiry against the Appellant and the date of suspension of Customs Broker License of Appellant being either within the period of pendency of enquiry against Appellant under Regulation 17 of CBLR or before initiation of such an enquiry, are satisfied. Therefore, Order No. 23/2025 dated 12.06.2025 suspending Customs Broker license of the Appellant is in accordance with the provisions of Regulation 16(1) of CBLR.

The dispute in the present appeal is not in respect of a notice, if any, issued under Regulation 17(1) of CBLR and therefore, Appellant’s contention based on time limit prescribed under regulation 17 [1] of CBLR is not relevant for deciding the present appeal against impugned order issued under regulation 16(2) of CBLR.

Instruction No. 20/2024-Customs dated 03.09.2024 stipulates that “as regard the suspension of licenses of Customs Brokers, Instruction No. 24/2023 dated 18/07/2023 shall continue to be followed” and Instruction No. 24/2023 dated 18/07/2023 stipulates that “Commissioner should also take the care also of recording his/her reasons as to why it is considered an appropriate case where immediate action of suspension is necessary”, which has been scrupulously followed by the Respondent by recording the reasons for immediate suspension of the Customs Brokers license of the Appellant in both the orders, viz. order of suspension dated 12.06.2025 and the impugned order dated 01.07.2025 passed for its continuation. Therefore, there is no merit in the claim of Appellant that they have not committed any irregularity.

Role of Appellant in the first case and second case has been narrated in the order of suspension dated 12.06.2025 and Appellant’s contraventions of CBLR in the said first and second cases have been narrated by the Respondent in paras 16, 16.1, 17 and 17.1 thereof. Thereafter, impugned Order No. 11/2025 dated 01.07.2025 has been passed after duly hearing the Appellant, as prescribed in Regulation 16(2) of CBLR. Therefore, the contention of Appellant that the Respondent pre-concluded their guilt is contrary to facts.

Both the issues in this appeal are decided in favour of Revenue and against the Appellant. The appeal is rejected and the impugned order is upheld. As such, the stay petition is also rejected.

Undervaluation and transaction value - Admissibility and corroboration of third-party documents and statements - Burden of proof on Revenue to establish under-valuation using contemporaneous imports - Rejection of transaction value and sequential application of Customs Valuation Rules - Confiscation and redemption fine - Penalty for mis-declaration and benefit u/s 114A - HELD THAT:- In the case of present appellants, the officers searched the office premises as well as residential premises of the partner which did not result in recovery of any incriminating documents. The partner, after seeing the statements and emails of Sri Avinash Jindal accepted undervaluation of goods and also paid the differential duty, interest and the reduced penalty amount on appellant-1 under Section 114A. Therefore, there is absolutely no difference in the facts, evidences and investigation in all the cases.

From the decision of this Tribunal in the case of Beena Sales Corporation [2019 (3) TMI 982 - CESTAT AHMEDABAD], it can be seen that all the documents and evidences are common which have been relied upon in the present cases also. This decision has also been upheld by the Hon’ble Supreme Court which vide order [2019 (12) TMI 1681 - SC ORDER] after condoning delay held as under:-

“We find no reason to interfere with the impugned order dated 26 February 2019 of the Customs, Excise and Service Tax Appellant Tribunal, West Zonal Bench at Ahmedabad.

The appeal is Accordingly dismissed.”

Therefore, the above decision is squarely applicable in the present case also.

Thus, we set aside the impugned order and allow both the appeals with consequential benefits, if any.

Rejection of declared transaction value and vitiation of transaction value - Redetermination of assessable value by residual method / addition of undeclared consideration - Invocation of extended period of limitation for suppression / wilful mis-statement - Imposition of mandatory penalty for collusion, wilful mis-statement or suppression - Liability to confiscation for mis-declaration resulting in short-levy of duty - Admissibility and corroborative use of Enforcement Directorate / FEMA material and statements recorded u/s 108 - Mandatory inclusion of interest in quantification of penalty -

Whether the rejection of the declared transaction value is legally sustainable? - HELD THAT:- Section 14 of the Customs Act mandates adoption of the price actually paid or payable. The transaction value concept is premised on the assumption that the entire consideration for the goods is reflected in the invoice.

Once it is established that part of the consideration flowed outside banking channels, the declared invoice price cannot, by any stretch, be treated as the transaction value. In such circumstances, rejection of declared value under Rule 12 of the Customs Valuation Rules becomes inevitable. We therefore hold that the rejection of the declared transaction value is legally sound and unassailable.

Whether the re-determination of assessable value under the residual method is proper and in accordance with law? - In the present case, re-determination of assessable value is not based on conjecture or market assumptions but on the appellant’s own voluntary and repeated admissions recorded under Section 108 of the Customs Act, 1962, admitting systematic undervaluation to the extent of about 25% and remittance of the differential consideration through unauthorized channels. These admissions are independently corroborated by documentary evidence and findings of the Enforcement Directorate under FEMA, which establish unauthorized foreign exchange remittances linked to the very same imports. Once it is shown that a substantial portion of the actual consideration was deliberately concealed and paid outside the banking system, the declared transaction value stands vitiated ab initio, and adoption of the residual method by adding the admitted undervaluation component represents the most reasonable, accurate, and legally sustainable mode of valuation.

Invocation of Extended Period under Section 28(4) - In the present case, it is undisputed that a substantial portion of the consideration was paid outside the banking channels and was never disclosed to the Customs authorities. The declared invoice value therefore did not represent the true transaction value within the meaning of Section 14 of the Customs Act, constituting deliberate suppression of material facts.

As held by the Hon’ble Supreme Court in Jaiprakash Industries Ltd [2002 (11) TMI 92 - SUPREME COURT] and Cosmic Dye Chemical [1994 (9) TMI 86 - SUPREME COURT], deliberate withholding of information which the assessee is legally bound to disclose squarely attracts the ingredients of suppression, warranting invocation of the extended period even in valuation disputes.

We therefore hold that the non-disclosure of actual consideration amounts to willful misstatement and suppression of material facts, and accordingly, invocation of the extended period of limitation under Section 28(4) of the Customs Act, 1962 is legally justified and sustainable.

Demand of Duty and Interest - Once it is established that the declared value constituted only a partial disclosure of the actual consideration and that the remaining amount formed an integral part of the price paid for the imported goods, inclusion of such amounts for the purpose of re-determining assessable value becomes legally unavoidable. Consequently, the confirmation of differential customs duty is fully justified. Interest on the differential duty is a statutory consequence of duty short-levied or not levied and follows automatically. Accordingly, we hold that the demand of differential customs duty along with applicable interest, reinforced by the corroborative findings of the Enforcement Directorate proceedings, is legally sustainable and calls for no interference.

Imposition of Penalty under Section 114A and Confiscation - We find that in the present case, the appellant’s admissions regarding under-invoicing and unauthorised remittances, read with ED findings, leave no manner of doubt as to the deliberate nature of the offence. The plea of bona fide belief or absence of mens rea is therefore untenable. Bona fide belief presupposes full and truthful disclosure of all primary facts to the Department. As held by the Hon’ble Supreme Court in Cosmic Dye Chemical [1994 (9) TMI 86 - SUPREME COURT] and Padmini Products [1989 (8) TMI 80 - SUPREME COURT], suppression of material facts negates any claim of bona fide belief and justifies imposition of mandatory penalty. As such, we find that penalty under Section 114A has been rightly imposed. The Appellate Authority has directed the Adjudicating Authority to include interest also while quantifying the penalty, which is also in accordance with the provisions of Section 114A of the Customs Act, 1962.

As regards confiscation for mis-declaration of value in the Bills of Entry, resulting in short-levy of duty, renders the imported goods liable to confiscation u/s 111(m) of the Customs Act. As the goods are no longer available for physical confiscation, no redemption fine is imposable.

Tribunal dismissed the importers appeal and upheld the Commissioner (Appeals)s order.

Relevancy of statements u/s 138B - mis-declaration and under-valuation of the goods - Admissibility of micro films, computer printouts and electronic records u/s 138C - Adjudicating authority's duty to examine witness and form opinion before admitting statements in evidence - Standard for reliance on statements recorded u/s 108 - Valuation - Penalties and mens rea - evidentiary principles - Applicability of section 138B and section 138C -HELD THAT:- Section 108 of the Customs Act deals with power to summon persons to give evidence and produce documents. It provides that any Gazetted Officer of customs shall have the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Customs Act.

In view of the provisions of subsection (2) of section 138B of the Customs Act, the provisions of subsection (1) of the Customs Act shall apply to any proceedings under the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice.

Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.

The statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same.

Admissibility of micro films, computer printouts and electronic records under section 138C - Compliance with certificate and procedural safeguards in section 138C(2) and (4) - HELD THAT:- The finding regarding under-valuation of furniture and furniture parts is based on the printouts of invoices recovered from the e-mail and various statements made under section 108 of the Customs Act. A perusal of the order passed by the Principal Commissioner shows that no finding has been recorded that the conditions set out in section 138C(2) and (4) had been complied. In the absence of any certificate having been issued under section 138C of the Customs Act, no reliance can be placed on the printouts of emails. The statements made under section 108 of the Customs Act were retracted by the appellants.

There is nothing on the record to show that Panchnama was drawn regarding the printouts of the email. The statements made under section 108 of the Customs Act were also retracted by the appellants. Thus, the compliance of section 138C of the Customs Act had not been satisfied.

Thus, it is not possible to sustain the order dated March 10, 2023 passed by the Principal Commissioner that rejects the declared value of the goods under rule 12 of the 2007 Valuation Rules and re-determines it under rule 3. Nor is it possible to sustain the imposition of penalties under section 114AA upon the appellants.

For the reasons given on admissibility and relevancy of the impugned materials, the Principal Commissioners order rejecting declared value and re-determining value under Rule 3 and imposing penalties under section 114AA cannot be sustained; the four appeals by the importers are allowed, the impugned order set aside insofar as they are concerned, and the three departmental appeals against non-imposition of penalty under section 112(a)(ii) are dismissed.

Relevancy and admissibility of statements recorded u/s 108 - applicability of section 138B and section 138C - Violation of the mandatory provisions of section 9D - Mandatory procedure for admitting recorded statements in adjudication (examination by adjudicating authority and formation of opinion; right of cross-examination) - Admissibility of electronic records and computer printouts subject to prescribed formalities - Doctrine of exclusion where mandatory statutory procedure is not followed - HELD THAT:- Section 108 of the Customs Act deals with power to summon persons to give evidence and produce documents. It provides that any Gazetted Officer of customs shall have the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under the Customs Act.

In view of the provisions of subsection (2) of section 138B of the Customs Act, the provisions of subsection (1) of the Customs Act shall apply to any proceedings under the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice.

Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.

Thus, it has to be held that the statements of persons recorded under section 108 of the Customs Act could not have been relied upon by the Principal Commissioner for rejecting the transaction value and re-determining the same.

A specific ground had been taken before the Commissioner (Appeals) by the appellants that since the provisions of section 138C of the Customs Act had not been complied with, the printouts of the e-mail could not be considered. It was also contended that the statements made under section 108 of the Customs Act had been retracted.

Admissibility of electronic records and computer printouts subject to prescribed formalities - Requirement of compliance with section 138C for email printouts and related certification - There is nothing on the record to show that Panchnama was drawn regarding the printouts of the email. The statements made under section 108 of the Customs Act were also retracted by the appellants. Thus, compliance of section 138C of the Customs Act had not been satisfied.

The finding of under-valuation has been recorded on the bases of statements made under section 108 of the Customs Act, wherein the printouts are said to have been acknowledged by Gautam Gupta while tendering his statement on December 27, 2016. It has also been held that both Rajiv Shewaramani and Hemendra Rai categorically stated in their statements tendered under section 108 of the Customs Act that they had two arrangements with the invoices. There is no finding recorded by the Commissioner (Appeals) on the submission made by the appellants that since the procedure contemplated under section 138C of the Customs Act had not been followed, no reliance could be placed on the printout of the e-mail.

It is not possible to sustain the order dated December 14, 2022 passed by the Commissioner (Appeals) that upholds the order dated March 18, 2019 passed by the Additional Commissioner rejecting the declared value of the goods under rule 12 of the 2007 Valuation Rules and re-determining it under rule 3. Nor is it possible to sustain the imposition of penalties upon the appellants.

For want of compliance with the mandatory statutory procedures for admitting recorded statements (section 138B) and computer printouts (section 138C), the re-determination of transaction value under the Valuation Rules and the penalties based thereon could not be sustained; the impugned order is set aside and the appeals are allowed.

Valuation of imported goods - Valuation u/s 4A of the Central Excise Act, 1944 -imported induction cookers fall -MRP based valuation / Notification No. 49/2008-C.E. (N.T.), - differential duty on the revised MRP - Classification under Customs Tariff Heading 8516 (including 8516 60 00) - Remand for re-determination of duty and interest by adjudicating authority - Confiscation and penalty proposals - HELD THAT:- No dispute that 8516 6000 where the appellant would like to classify their products is also part of the chapter heading 8516. Therefore, the question of induction cookers falling under chapter heading 8516 6000 also forms part of Sl.No. 86 of the above notification. Hence, the Commissioner’s observation that ‘a plain reading of the notification along with the relevant CETH would indicate that the provisions of said notification are applicable to all goods falling under the said tariff head except ‘electric heating resistors’ cannot be ignored. It is also an admitted fact that the induction cookers do not fall under the excluded category i.e. ‘electric heating resistors’.

Whether the impugned products fall under the Sl.No. 86 of the Notification No.49/2008 CE(NT) - The impugned order is upheld to the extent that the impugned products are to be valued based on the MRP value in terms of the above notification. Other additional submissions of the appellant on valuation cannot be considered at this stage since in the second round of litigation the Commissioner was limited only to the extent of examine the applicability of the said notification and therefore the challenge before us is also only to the extent of the remand proceedings. Accordingly, the additional submissions filed by the appellant are rejected on the ground that it is beyond the scope of the remand proceedings of this Tribunals Final Order.

We find that the Tribunal vide Final Order No.21268/2015, had categorically held that if induction cookers are taken out, then the duty required to be paid in respect of balance would be to the extent of Rs.6,00,000/- only. It also noted that the learned advocate admitted confirmation of demand of duty in respect of other items imported by them. Since the Order-in-Original No. 68/12-13 dated 31.01.2014 was set aside and in view of the above, the Commissioner in the de novo proceedings taking into consideration the above facts should have re-determined the duty on induction cookers along with interest.

Since the Department is also in appeal on the ground of non-determination of duty fine and penalty, we have no other choice but to remand the matter to the Commissioner for redetermination of duty in terms of Notification No. 49/2008 CE(NT) dated 24.12.2008 along with the interest. Since the assessee has already paid a differential duty of Rs.20,00,000/- as mentioned by the Tribunal in the first round of litigation, it is necessary to re-determine the duty and depending upon the liability, the question of imposition of penalty arises.

Appeal filed by the Revenue against Order-in-Original, stands disposed of by this Tribunal vide Final Order. hence, this appeal becomes infructuous.

Classification of goods by tariff sub-heading - imported HP Latex printers - classifiable under tariff item 8443 3250 as "inkjet printer" (capable of connecting to an automatic data processing machine or to a network) Or under tariff item 8443 3910 as "inkjet printing machine" - Interpretation of the phrase "capable of connecting to an automatic data processing machine or to a network" - Distinction between "printer" and "printing machine" - Burden of proof in classification - Confiscation and redemption fine - Penalty for wilful mis-statement or suppression of facts - HELD THAT:- The use of automatic data processing network for preparation of graphics and materials with storage thereto is akin to ‘type setting’ or ‘photogravure’ in the traditional printing systems but does not make it a printer of itself. The sole test is the capacity to print and not by being output for a data processing machine which was its reason for existence elsewhere in the tariff prior to amendment of Harmonized System of Nomenclature (HSN).

The printers are intended for commercial use in the printing industry which is evident from the substrate prescribed and the size; width is about seven feet, depth about three feet and height about six feet and the space as well as safety precautions do not set out the product as an attachment to automatic data printing machines. The installation manual calls for site preparation and for certain aspects of installation requiring upto four persons.

Most importantly, the printer is connectible to the internet through a router which, presumably, permits customer designed graphics through ‘internet-wide’ available software to be printed without any inputs from the automatic data processing machine or network to which the printer may be connected. That sets apart the descriptions in the two rival descriptions before us. Our factual evaluation of the product, in the light of descriptions in the tariff lines, reference to relevant Explanatory Notes in the Harmonized System of Nomenclature and the cited decisions, leads to the conclusion that adjudicating authority has fitted the impugned goods appropriately.

The impugned printers are correctly classified under the sub-heading determined by the adjudicating authority and not as printers "capable of connecting to an ADP machine or to a network" that are incapable of independent printing.

Confiscation and redemption fine - HELD THAT:- While liability to confiscation may lie on finding that goods have been imported in any of the situations enumerated in section 111 of Customs Act, 1962, the scope of notice empowered under section 124 of Customs Act, 1962 is limited to proposal to confiscate. Accordingly, an adjudicating authority will have to have access to goods to order confiscation and cannot luxuriate in consequence of confiscation by holding goods liable to be so. Fine is computed compensation to the Central Government for letting go of errant goods that vest in it on confiscation. Accordingly, we set aside the confiscation.

Having thus held against the appellant as far as eligibility to exemption from duty is concerned, we are, at the same time, concerned, and especially in the light of cited decisions as well as the subtle distinction between the tariff lines, that the demand of ₹ 12,11,70,379 on imports effected between 1st January 2016 and 15th September 2019, as also like penalty under section 114A of Customs Act, 1962 on the entirety of demand of ₹ 14,91,36,350, attaching to finding on the ingredients enumerated in section 28(4) of Customs Act, 1962. The perfunctory finding of ‘misdeclaration’ as sufficing to be compliant with ‘wilful mis-statement’ or ‘suppression of fact’ in the impugned order is not tenable.

We, however, in the absence of detailed submission on facts arising from findings supra, and, obviously, not within the know of representation of both sides, are constrained in rendering adjudgement on such proposal in the show cause notice. To that extent, the matter is restored for fresh determination by the adjudicating authority after setting aside that portion of the order. For finding on the ingredients permitting resort to section 28(4) and section 114A of Customs Act, 1962, we order remand to the adjudicating authority.

Appeal is disposed off on the terms.

Classification of imported goods as electronic cigarette versus tobacco product - Confiscation and penalty - Prohibition of import- failure to comply with prescription of certification and pictorial warning pre-requisites - Classification under Customs Tariff Act, 1975: tariff item 2404 1100 - Warehousing, duty free operator regime and special warehouses - Licensing and control of special warehouses u/s 58A - Powers of proper officer u/s 47 and initiation of proceedings u/s 124 - Entry for home consumption and related procedurece - HELD THAT:- In the light of facts set out in the show cause being insufficient to conclude that the impugned goods are ‘e-cigarettes’ and the evident inability to narrow down coverage of the impugned goods to ‘tobacco product’ or ‘refill for e-cigarette’, there is no justification for confiscation under section 111 of Customs Act, 1962, by way of being either, to survive let alone absolute confiscation. To set aside the impugned order is also tantamount to condonation of proceedings which, though under appropriate empowerment, may well be questioned for impropriety; the existence of power to initiate proceedings under section 124 of Customs Act, 1962 does not, in the absence of threshold cause, warrant deployment and, therefore, rendering resort thereto as inconsistent with responsible exercise of adjudicatory process.

The appellant has not entered the goods for home consumption. The appellant, as ‘duty free’ operator is required to comply with the conditions, pertaining to goods, attached to warehousing licence. Neither does the show cause notice allege nor do the orders of the lower authorities conclude that any such condition or restriction has been breached for the full measure of section 111 of Customs Act, 1962 to be brought to bear on the impugned goods. Nor is there any examination of the manner in which policy prescriptions apply to warehoused goods that, for ‘duty free’ operations, change hands and assume different classification relegating identity of goods to an omnibus description.

Clearly, the obligations, as perceived by the lower authorities, have been fastened on an importer intending storage of the impugned goods to ‘special warehouse’ and not intended by law to respond to charges preferred in the show cause notice. Clearly, too, the lower authorities have failed to establish that the impugned goods conform to description in the prohibiting legislation – whether domestic or in the course of international trade – or that any other stipulated mandate intended to be administered on clearance for home consumption was not adhered to. Clearly, the entire proceedings are a study in misplaced enthusiasm and jurisdictional overreach. For these reasons, the impugned order lacks authority of law and is set aside to allow the appeal.

Service tax liability on remuneration payment by the company to whole time Director -employer-employee relationship of whole-time director / key managerial personnel - judicial discipline of Tribunal precedents- definition of "service" in Section 65B(44) of the Finance Act, 1994 - HELD THAT:- We find that the issue of service tax liability on remuneration paid by the company M/s. JSL Industries Ltd to whole time Director Smt. T. R. Amin was decided by this `Tribunal vide Final Order [2024 (9) TMI 1416 - CESTAT AHMEDABAD], an held that remuneration paid to her is not liable to service tax. Hence, the service tax related to the remuneration paid to Mrs. T R Amin is set aside.

The matter is no more res-integra as the issue has already been decided by this Tribunal. We have no reason to differ with the above findings. Accordingly, we allow the appeal filed by the appellant and set aside the impugned order

Refund claims in respect of accumulated Cenvat credit - export of service - Classification of service - Online Information and Database Access or Retrieval (OIDAR) services - Information Technology Software Service - Place of provision of services - HELD THAT:-The department has rejected refund claims of the appellant solely on the ground that the appellant had obtained registration under OIDAR services which according to Rule 9 of the POPS Rules, 2012, do not amount to export of service. In respect of OIDAR service, place of provision of service is the location of the service provider. The lower authorities have also termed the appellant’s action to rectify their registration certificate as an afterthought. In the entire order, no efforts seem to have been made to analyze the agreement between the appellant and his client for deciding classification of service rendered by the appellant.

We accordingly set aside the impugned orders of the learned Commissioner (Appeal) and remand the matter to the Adjudicating authority to re-examine these refund claims in the light of order dated 28.04.2017 passed by the Assistant Commissioner, Service Tax Division -3 on the issue of classification of service and pass fresh orders within a period of four months from the date of receipt of this order

Appeal is partially allowed by way of remand.

Classification as an intermediary - Export of services - Place of Provision of Services Rules, 2012 - Service Tax Rules, 1994 - Advance Ruling binding effect - Principal-to-principal supply - Principal-agent relationship - Whether the appellants were correctly held to be an intermediary and thereby disentitled to treatment of the services as export of services - HELD THAT:- We find that it is worthwhile to go through the Agreement in order to understand the nature of the services and the status of the service provider.

This Bench has taken similar view in respect of M/s Airbnb Payments India Pvt Ltd. vide Final Order [2024 (9) TMI 1172 - CESTAT CHANDIGARH] We find that in the instant case too, the appellants cannot be called intermediary as per the criteria laid down by the Hon’ble Punjab & Haryana High Court in the case of Genpact India Pvt Ltd [2022 (11) TMI 743 - PUNJAB AND HARYANA HIGH COURT] On going through the terms of the Agreement in the impugned case, we find that the Agreement is between two principals. There is nothing in the agreements even to remotely indicate that the appellants are intermediary agents of M/s Li and Fung (Trading) Ltd Hongkong. The appellants are not privy to the contracts that M/s Li and Fung (Trading) Ltd Hongkong had with their buyers. The Revenue also did not come up with any evidence in the form of tripartite agreements between the appellants, their principal’s M/s Li and Fung (Trading) Ltd Hongkong and their vendors. In view of the same and in view of the cases discussed above, it is difficult to accept that the appellants are intermediaries for Li and Fung (Trading) Ltd Hongkong. We find that Revenue has also not made any case for invocation of POPS Rules.

Therefore, we find that the impugned order incorrectly holds the appellants as intermediary and denies the benefit of export. Therefore, we find that the impugned order, holding that the appellants are an intermediary, cannot be sustained. When the impugned order does not survive on this issue, we find that it is a futile exercise to go into the elaborate submissions on other issues raised by rival Counsels.

Refund claim - Nexus between input services and output service - Scope of show cause notice - CENVAT credit eligibility - power of remand by appellate authority - remand for quantification versus decision on merits - circular No. 120/01/2010-ST dated 19.01.2010 - HELD THAT:- On going through the impugned order passed by the Commissioner, we find that the Learned Commissioner discussed only the legal provisions, contents of the circular No. 120/01/2010-ST dated 19.01.2010; there after Learned Commissioner sets the proposition correctly that that the nexus should be seen in respect of each of the services in question before coming to a conclusion. We find that the issue of nexus cannot have a universal pattern. What is an essential input service for one service provider may not be so for a different service provider. The nature of the services provided by the appellants need to be kept in mind. We find that learned Authority gives an impression, that all other services than Event Management services and Mandap Keeper services have no nexus with the output service, without going in to the elaborate submissions given by the appellants.

Remand can be an option when the lower authority has not at all discussed the issue, did not consider the submissions of the appellants and did not analyze the case law relied upon by the appellants. Learned Commissioner has not given his findings on any of the above. We find that the appellate authority is required to decide the issue on merits and legal grounds after considering the submissions of the appellant and then if required, remand the case for quantification. In the impugned case, it is not the case that the lower authority has not given his findings on the issues. Under the circumstances, we find that the impugned order remanding the case back to original authority is not justified.

Thus, this Bench is not in a position to evaluate the impugned order as no findings have been given by the authority on each of the service and the nexus between disputed input services to the output services. - case must travel back to the Commissioner (Appeals) to decide the issue afresh.

The impugned order is set aside and appeal is thus, allowed as remand.

Refund of unutilised CENVAT credit on input services - claim for interest on refund - failure of appellate authority to deal with a raised issue - Appellate Tribunal powers to adjudicate issues arising from appellate orders - denovo adjudication and remand for fresh adjudication - appeals rendered infructuous - Notification No. 5/2006-CE (N.T) dated 14.03.2000 - HELD THAT:- Appeals were filed before the Tribunal to pass orders for grant of interest on the refund claims filed by the appellant. The adjudicating authority thereafter rejected the refund claims on remand and subsequent denovo proceedings continued, culminating in a later denovo Order-in-Original dated 27.01.2025 rejecting the refund claims.

Therefore the appellant was informed to submit the details of the denova adjudication proceedings. The appellant vide letter submitted the copy of the denova adjudication Order-in-Original No. 23/2024-25/AC(R) dated 27.01.2025 passed by the Assistant Commissioner, wherein the Adjudicating Authority has rejected all the 5(five) impugned refund claims.

Tribunal dismissed the five appeals as infructuous because intervening denovo adjudication and consequent appellate proceedings rendered the appeals unsuitable for adjudication; no substantive determination was made on the entitlement to interest in view of those subsequent proceedings.

Exclusion from Commercial Training and Coaching service - recognised by law - exemption under educational institution notification- Coordinate Bench precedent on DGCA-recognised courses - Notification No.12/2017-Central Tax (Rate) -Whether the appellants were required to pay any service tax or were otherwise excluded from the purview of CTCS for the period prior to 01.07.2012 - HELD THAT:- We find that the entire issue under similar factual matrix came up before the Coordinate Bench at Chennai in the case of Orient Flight School [2023 (11) TMI 312 - CESTAT CHENNAI], where, after a detailed discussion and various statutory provisions as well as judgments, including the judgment in the case of Indian Institute of Aircraft Engineering Vs UOI [2013 (5) TMI 592 - DELHI HIGH COURT] and judgment of Delhi Bench of the Tribunal in the case of Star Aviation Academy Vs CST, Delhi [2016 (1) TMI 1376 - CESTAT NEW DELHI] and Hindustan Institute of Aeronautics Vs CCE, Bhopal [2015 (2) TMI 140 - CESTAT NEW DELHI]

The Board has clarified in the context of GST that no GST would be leviable in respect of flying training courses conducted by Flying Training Organizations approved by DGCA, vide Circular No.234/28/2024-GST dt.11.10.2024. Though this clarification is in the context of GST, however, the department’s view, as expressed, will have equal reliance in deciding when the matter pertains to service tax.

Therefore, relying on the judgment in the case of Orient Flight School (supra), as also various clarifications issued, we find that the appellant would not be required to discharge service tax during the relevant period and in view of the same, the impugned order is liable to be set aside and is accordingly set aside.

Appeal allowed.

CENVAT credit admissibility on the basis of supplementary invoice - Rule 9(1)(b) of the CENVAT Credit Rules, 2004 - requirement to record reasoned and speaking orders - non-speaking or cryptic appellate order - duty to deal with and rebut findings of the adjudicating authority - remand for fresh adjudication - extended period of limitation and mens rea / intent to evade duty

Non-speaking or cryptic appellate order - requirement to record reasoned and speaking orders - duty to deal with and rebut findings of the adjudicating authority - Whether the Customs, Excise and Service Tax Appellate Tribunal's order was legally sustainable where it set aside a reasoned Order-in-Original without dealing with or rebutting the specific findings recorded by the adjudicating authority - HELD THAT: - The High Court found that the Tribunal allowed the appeal by relying on earlier decisions without undertaking an independent examination of the facts or addressing the detailed findings recorded by the Commissioner. The Court applied the established principle that quasijudicial bodies must record cogent reasons and must specifically meet and rebut the reasoning of the original authority when setting aside a reasoned order. Reliance on precedents, without analysing whether the Commissioner's factual and legal findings were addressed or distinguished, was held to be inadequate. In view of authorities emphasising that reasons are indispensable to judicial and quasijudicial decisionmaking, the Tribunal's summary treatment was held to be contrary to law and liable to be set aside. [Paras 19, 20, 21, 22, 23]

The Tribunal's order was set aside insofar as it did not deal with or rebut the adjudicating authority's reasoned findings and was held to be legally unsustainable.

Remand for fresh adjudication - CENVAT credit admissibility on the basis of supplementary invoice - Rule 9(1)(b) of the CENVAT Credit Rules, 2004 - extended period of limitation and mens rea / intent to evade duty - Extent and nature of relief: whether the matter should be remitted to the Tribunal for fresh decision on merits - HELD THAT: - Having concluded that the Tribunal failed to give a reasoned decision addressing the Commissioner's findings on the admissibility of CENVAT credit under Rule 9(1)(b), the High Court remitted the appeal to the CESTAT for fresh adjudication. The Court directed that the Tribunal must adjudicate each aspect dealt with by the Commissioner, pass a reasoned and speaking order, and may afford parties an opportunity of rehearing. The High Court expressly declined to express any opinion on the merits, including the applicability of Rule 9(1)(b) or the existence of mens rea, leaving those issues to be decided afresh by the Tribunal in accordance with law. [Paras 23, 24, 25, 26, 27]

The impugned Tribunal order is set aside and the matter is remanded to the CESTAT for fresh adjudication on merits with directions to consider and rebut the Commissioner's findings and to pass a reasoned, speaking order; the High Court refrained from expressing any view on merits.

Final Conclusion: The CESTAT's Final Order dated 07.01.2019 is set aside and the matter is remitted to the Tribunal for fresh adjudication on merits; the Tribunal is directed to examine and deal with each aspect considered by the Commissioner, pass a reasoned and speaking order (affording rehearing if necessary), and the High Court has not expressed any opinion on the substantive merits of admissibility of CENVAT credit.

Calculation of Excise duty - valuation of barreled Bitumen which the appellant was initially determining on the basis of transaction value at the depot but later on, started deducting cost of barrels from the sale value, for payment of duty - Invocation of extended period of limitation - levy of penalty - CENVAT Credit on purchase of barrels for packing of Bitumen in their depot before clearance.

Calculation of Excise duty - valuation of barreled Bitumen which the appellant was initially determining on the basis of transaction value at the depot but later on, started deducting cost of barrels from the sale value, for payment of duty - HELD THAT:- For goods cleared from depot, time of removal shall be deemed to be the time at which “such goods” are cleared from the factory. At refinery, some quantity of bulk bitumen is sold to independent buyers whereas the rest quantity is transferred to depots located in Jamnagar for packing in barrels for further sale from there as well as distribution to other depots for sale. Since, barreled Bitumen is not sold from the refinery, value of such goods (barreled Bitumen) cannot be determined at the refinery under Section 4(1)(a) of the above Act, and it becomes necessary to take recourse to Section 4(1)(b) read with Central Excise (Determination of Value) Rules, 2000. Going sequentially, Rule 4 which deals with situations where delivery of goods takes place at time other than the time of removal of goods under assessment, is not applicable.

The Tribunal in the case of Century Laminating Co. Ltd. Vs. Commissioner of C. Ex., Meerut-II [2013 (10) TMI 260 - CESTAT NEW DELHI] while dealing with issue of deduction of packing and forwarding charges incurred on packing of goods sold from the depot, held in para 9 of the said decision that such charges have to be examined with reference to whether goods manufactured by the appellant are normally sold without packing or are normally sold in wholesale trade in packed condition.

Thus, cost of packing is includible if packing is necessary for putting excisable goods in condition in which same are generally sold in wholesale at factory gate. In this case, it is found that some of their buyers, namely M/s. KMC Constructions, M/s. Agarwal Petrochem Pvt Ltd, DSC Ltd. etc. purchase bulk Bitumen from the refinery. To meet the requirement of small buyers, appellant stock transfers bulk bitumen from refinery to their two depots located in Jamnagar who buy duty paid barrels and pack the bitumen. These two depots not only sell barrelled Bitumen to their customers but also stock transfer to other depots located elsewhere in the country, for further sale. Up to May, 2010, appellant was assessing such goods (i.e. packed Bitumen) at the sale value at the depots but from June, 2010, they started deducting cost of barrels from the sale price of packed Bitumen on monthly basis, based on CA certificate - the lower authority has correctly relied on the decision of CESTAT Mumbai in the case of Clariant (I) Ltd. Vs. CCE, Thane-I [2006 (2) TMI 309 - CESTAT, MUMBAI], where it has been held that where goods are not sold when removed from the factory but are merely transferred to the depot, the depot becomes a place of removal under the Law and smaller packages are sold from there only and not from the factory and therefore, cost of packing included in the transaction of the such packages.

Invocation of extended period of limitation - levy of penalty - HELD THAT:- It cannot be said that the appellant had suppressed nonpayment of excise duty on cost of barrel, from the department - the department’s argument for invocation of extended period is not convincing and therefore, the extended period in this case is not invocable. For the same reasons, the penalty under Section 11AC of the Central Excise Act, 1944 is set aside with liberty to the department to consider whether or not to impose penalty under Rule 25 of the Central Excise Rules, 2002.

CENVAT Credit on purchase of barrels for packing of Bitumen in their depot before clearance - HELD THAT:- Warehouse where these boxes were delivered is a depot of the appellant from where sugar was cleared after being repacked in these corrugated boxes. While arriving at this decision, the Tribunal has considered the decision of Mumbai Tribunal in the case of Hawkins Cookers Ltd Vs. CCE, Mumbai-III reported at 2014 (299) ELT 101 and also the decision of Hon’ble Supreme Court in case of Vikram Cement [2006 (1) TMI 130 - SUPREME COURT]. Therefore, agreeing with the contention of the appellant, the appellant is eligible to Cenvat Credit of excise duty paid on purchase of barrels for packing of Bitumen in their depots before clearance.

Matter remanded to the Adjudicating Authority for the limited purpose to redetermine duty liability on the appellant for the normal period along with interest and penalty, if any. The appellant will also be allowed the Cenvat Credit of duty paid on packing materials as per Cenvat Credit Rules, 2004.

Appeals are partially allowed by way of remand.

Classification of printed forms under competing headings 4820 and 4901 - Printing as manufacture or mere job-work - Essential character of goods -Classification of documents of title and security-printed forms - Rule 3(c) and Rule 4 General Rules for interpretation of the Schedule - Circular No.1052/1/2017-CX dated 23-02-2017 - Marketability requirement for excise levy - Whether the activity of printing on Government of Karnataka Watermarked Paper used for issuance of RTC attracts duty under Tariff entry 4820 40 00 of the Central Excise Tariff Act, 1985 or fall under Chapter sub-heading 4901 99 00 attracting ‘nil’ rate of duty. - HELD THAT:- The appellant receive the watermarked printed papers with the logo of Government of Karnataka from M/s. Wipro Infotech Ltd. and undertake the activity of printing on the said watermarked papers on job-work basis and cleared the same without payment of duty during the period 17.09.2008 to 30.06.2010, which are used by Government of Karnataka for issuance of RTC.

The Circular bearing No.1052/1/2017-CX dated 23.02.2017 is issued to address the dispute on classification of various printed forms between the competing entries of Chapter 48 and 49 of CETA, 1985.

We find that the Tribunal in the case of Nagpur Business Forms Pvt. Ltd. Vs. CCE, Nagpur [2020 (2) TMI 283 - CESTAT MUMBAI], referring to the said circular held that classification of the rail tickets, cheques etc. should be in accordance with the circular issued by the Board. Applying the said circular to the facts of the present case where the appellant is required to print on the supplied paper with water mark logo of Government of Karnataka, which are used for the purpose of issuance of RTC, in our opinion, would attract classification under Chapter heading 4901 of the CETA, 1985, chargeable to ‘NIL’ rate of duty during the relevant period.

Thus, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law.

Classification of Ready Mix Concrete (RMC) versus concrete mix - manufacture for excise liability - excisability of Ready Mix Concrete - exemption under Notification No. 04/1997-CE and substitution in Notification No. 12/2012-CE by Notification No. 12/2016-CE - Circular No. 368/1/98-CX - Retrospective application of substitution in notification - Site manufacture vs factory manufacture - Applicability of IS standards - HELD THAT:- We find that inspite of giving clear clarification vide Circular No.368/1/98-CX dated 06.01.1998, no attempt was made to verify the process of preparing 'concrete mix' to allege that the impugned goods are 'Ready Mix Concrete (RMC)' and the Commissioner (Appeals) has completely ignored the submissions made by the appellant and has proceeded on a completely unrelated discussion and consequent findings.

Whether the goods manufactured by the sub-contractor of the appellant is 'concrete mix' or 'ready mix concrete (RMC)' - HELD THAT:- We find that vide Notification No. 12/2016-CE dated 01.03.2016, Sl. No. 144 of Notification No. 12/2012-CE dated 17.03.2012 has been substituted to extend the benefit of exemption to 'Ready mix concrete' as well. Further no attempt was made by the respondent to verify the contracts entered by Appellant with National Highway Authority of India (NHAI) in September 2008 to execute the 2(two) projects and the sub-contract agreement dated 21.07.2009 and 17.04.2010 by Appellant with sub-contractor M/s. Deepika Infratech Pvt Ltd (DIPL) to confirm that the contracts are for manufacture of 'Ready Mix Concrete (RMC)' as per ISI standard, IS 4926:2003 or 'Concrete Mix' as per ISI standard, IS 456-1978 for the projects.

Thus, in the absence of any admissible evidence, duty cannot be confirmed by presuming that the Appellant had manufactured 'Ready mix concrete (RMC)' and not 'concrete mix'. Therefore, in the absence of any evidence to the effect that the sub-contractor has manufactured 'Ready Mix Concrete (RMC) as per the detailed features, requirements, compliances discussed, the impugned order confirming that the impugned product / goods as 'Ready mix concrete (RMC) cannot be sustained.

Jurisdiction u/s 482 of the Cr.PC - maintainability of a complaint -Quashing of criminal proceedings - execution of three registered settlement deeds concerning valuable immovable properties - abuse of process / misuse of criminal process - civil proceedings not a bar to criminal prosecution - cognizable offence - Special Court for Exclusive Trial of Land Grabbing Cases- Whether the High Court erred in quashing the criminal proceedings against respondent arising out of FIR. - HELD THAT:- Adjudication of forgery, cheating or use of forged documents in relation to a settlement deed will always carry a civil element. Therefore, there cannot be any general proposition that whenever dispute involves a civil element, a criminal proceeding cannot go on. Criminal liability must be examined independently. Respondent Nos. 1 to 3 were entitled to acquittal only upon failure of proof in the trial and not at the threshold jurisdiction under Section 482 of the Cr.PC. To permit quashing on the sole ground of a civil suit would encourage unscrupulous litigants to defeat criminal prosecution by instituting civil proceedings.

We are not impressed with the above findings reached by the High Court. In Neeharika Infrastructure Private Limited [2021 (4) TMI 1244 - SUPREME COURT], this Court had made it clear that while exercising the powers under Section 482 of the Cr.PC, the High Court cannot undertake a roving inquiry into the disputed questions of fact or record findings on the merits of the allegations. On perusal of the above observations of the High Court, we find that the High Court has erred in law by embarking upon an inquiry with regard to the conduct of the appellant and credibility or otherwise of the allegations in the complaint and the FIR. Delay in filing a complaint, by itself, is never a ground for quashing criminal proceedings at the threshold. Whether the delay stands satisfactorily explained or whether it impacts the credibility of the prosecution, is a matter of appreciation of evidence before the Trial Court and not for summary determination by the High Court under Section 482 of the Cr.PC.

It is a settled proposition that when a factual foundation for prosecution exists, criminal law cannot be short-circuited by invoking inherent jurisdiction under Section 482 of the Cr.PC. Where allegations require adjudication on evidence, the proper course is to permit the trial to proceed in accordance with law. In the present case, the issues relating to the state of mind of the executants at the time of execution of the settlement deeds, the role of respondent Nos. 1 to 3 in the execution and the use of the settlement deeds, the existence of fraudulent intent, and the manner in which proprietary advantage was obtained by them, all require a full-fledged trial on evidence.

Appeal is allowed.