TaxTMI Updates e-Newsletter
Feb 06,2026

Statutory pre-deposit - maintenance of appeal pending decision of a higher court - classification dispute relating to levy of GST on Fish Meal - exemption from the payment of tax - HELD THAT:- Normally, an appeal has to be preferred after payment of 10% of statutory pre-deposit in terms of the provisions of GST Law. Further, it was submitted by the petitioner that the issue, with regard to the levy tax on the supply of Fish Meal, has not attained its finality since a similar set of matters is still pending before the Hon'ble Apex Court. When such being the case, the payment of statutory pre-deposit cannot be dispensed with.

In view of the above, this Court directs the petitioner to make payment of 10% of statutory pre-deposit as mandated in the GST Act and thereafter, re-present the appeal before the 2nd respondent by way of uploading it in the portal. If there is any difficulties in uploading the appeal, the same shall be filed physically after the payment of 10% of statutory pre-deposit. Upon filing of such appeal, the respondent shall take the said appeal on record and keep it pending until the verdict of the Hon'ble Supreme Court in the aforesaid SLPs, which were filed for similar relief.

Writ petition is disposed of.

Availability of efficacious alternative remedy - maintainability of writ petition - preferability of statutory appellate forum over writ jurisdiction - constitution of GST Appellate Tribunal and statutory appeal mechanism - dismissal on ground of alternative remedy - HELD THAT:- The Central Government, in exercise of powers conferred u/s 111 of the GST Act, issued notification dated 24.04.2025 making rules for regulating the procedure and functioning of the GST Appellate Tribunal and therefore, against the impugned order, the petitioner has equally, efficacious alternative remedy of preferring an appeal before the GST Appellate Tribunal.

In view of the above as well as the judgements of the Apex Court in United Bank of India Vs. Satyawati Tondon & Others [2010 (7) TMI 829 - SUPREME COURT], Radha Krishan Industries Vs. State of Himachal Pradesh & Others [2021 (4) TMI 837 - SUPREME COURT] and Varimadugu Obi Reddy Vs. B. Sreenivasulu & Others [2022 (11) TMI 921 - SUPREME COURT], the writ petition is dismissed on the ground of alternative remedy.

Late fee - General Penalty - Imposition of general penalty only in absence of any other penalty - arbitrariness and equal treatment - Doctrine against double punishment - HELD THAT:- The fact that two Assessment Orders have been passed on 13.05.2025 and 15.04.2025 for the same tax period, this Writ Petition is disposed of by dropping the General Penalty of Rs.50,000/- imposed on the petitioner under Section 125 of respective GST Enactments. The petitioner shall pay a Late Fee of Rs.1,67,200/- confirmed by the impugned order within a period of 30 days from the date of receipt of a copy of this order.

In case the Petitioner complies with the above stipulations, the impugned order dated 15.04.2025 passed by the Respondent shall stand quashed and also recovery proceedings shall also be dropped.

In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the late fee in accordance with law as if this Writ Petition was dismissed in limine today.

Writ Petition stands disposed of.

Violation of principles of natural justice - GST DRC-01 on account of mismatch -Efficacy of alternative statutory remedy - Maintainability of writ under Article 226 - Minimal judicial interference where statutory appeal is available - Appeal u/s 107 of HGST Act - HELD THAT:- It is a settled position that interference in such like matters has to be minimal and actuated only in exceptional and extraordinary circumstances. Gainful reference in this regard can be made to judgments of Hon’ble the Supreme Court in Union Bank of India v. Satyawati Tandon and others [2010 (7) TMI 829 - SUPREME COURT] and Kakinada and ors. Vs. M/s Glaxo Smith Kline Consumer Health Care [2020 (5) TMI 149 - SUPREME COURT]

Though learned counsel for petitioner was at pains to submit that there has been a violation of principal of natural justice, thus, justifying intervention by this Court, we do not find this argument to be substantiated from the file and facts on record. In the given facts and circumstances and timelines as have been detailed in foregoing paras, we do not find existence of any such exceptional and extraordinary circumstance, which calls for interference by this Court in present proceedings at this stage.

Writ petition is dismissed with liberty to petitioner to avail statutory remedy available to it in accordance with law.

Quash and remit for fresh adjudication on merits - pre-deposit as condition for de novo proceedings - bank attachment to be vacated subject to compliance - set-off of amounts already recovered towards pre-deposit - exercise of discretionary relief despite expiry of appeal limitation u/s 107 - HELD THAT:- It is noticed that the limitation for filing an appeal under Section 107 of the respective GST enactments, 2017 against the impugned Order has already expired. The present Writ Petition has been filed only on 12.12.2025.

It is made clear that bank attachment of the petitioner shall be lifted subject to the petitioner depositing 25% of the disputed tax as ordered above and the Petitioner not being in arrears of any other amount barring the amount demanded under the impugned Order.

In case the Petitioner fails to comply with any of the stipulations, the Respondents is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.

Needless to state, any tax amount already recovered / paid by the petitioner against the tax liability confirmed by the impugned order shall be set off and adjusted towards the pre-deposit of 25% as ordered above subject to verification. If the said amount is over and above the 25% of disputed tax, no further amount is required to be paid by the petitioner as condition for de novo proceedings.

Writ Petition stands disposed of with the above observations.

Limitation for issuance and passing of order u/s 73 - extension of limitation by notification under Section 168A - effect of notification extending time limit for recovery of tax - exparte order and right to be heard - remand for fresh adjudication subject to predeposit - predeposit as condition for proceeding and vacating bank attachment - HELD THAT:- Considering the fact that the impugned order is an ex-parte order, as the petitioner has failed to file a reply to the Show Cause Notice in DRC-01 dated 22.05.2024, and following the consistent view taken by this Court under similar circumstances, the case is remitted back to the respondent to pass fresh orders on merits subject to the petitioner deposits 50% of the disputed tax amount in cash or from the Petitioner’s Electronic Cash Ledger, within a period of 30 days from the date of receipt of a copy of this order.

It is made clear that bank attachment shall be lifted subject to the deposit of 50% of the disputed tax as ordered above and the Petitioner not being in arrears of any other amount demanded for any other tax period barring the amount demanded under the impugned Order.

In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.

Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner.

Writ Petition stands disposed of.

Remand for fresh consideration - pre-deposit for reopening proceedings - adjustment of recovered amounts against pre-deposit - filing of reply to show cause notice as condition for re-adjudication - lifting of bank attachment subject to compliance - power to proceed if stipulations not complied with - final order on merits -HELD THAT:- The case is remitted back to the 2nd respondent to pass a fresh order on merits, subject to the Petitioner depositing 50% of the disputed tax in cash from the Petitioner's Electronic Cash Register within a period of 30 days from the date of receipt of a copy of this order. After due verification, any amount already recovered from the petitioner’s bank account shall be adjusted towards the said 50% of disputed tax. In case the amount already recovered, as stated above, exceeds or satisfies the 50% pre-deposit requirement, no further amount shall be required to be deposited for the purpose of redoing the proceedings.

In case the Petitioner complies with the above stipulations, the 2nd Respondent shall proceed to pass a final order on merits and in accordance with law as expeditiously as possible, preferably, within a period of three (3) months of such reply/pre-deposit. Subject to the Petitioner complying with the above stipulations, the attachment of the bank account of the Petitioner shall also stand automatically raised/vacated.

It is made clear that bank attachment shall be lifted subject to the deposit of 50% of the disputed tax as ordered above and the Petitioner is not in arrears of any amount barring the amount demanded under the impugned Order.

In case the Petitioner fails to comply with any of the stipulations, the 2nd Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today.

Writ Petition stands disposed of.

Passing on benefit of tax reduction -rebuttable presumption of profiteering - determination of profiteering by invoice-wise base price comparison - imposition of interest on profiteered amount and non-retroactivity of fiscal liability - penalty u/s 171(3A) and temporal operation of penal provision - deposit of profiteered amount in Consumer Welfare Fund - HELD THAT:-It is undisputed that the GST rate on instant noodles falling under HSN 1902 was reduced from 18% to 12% with effect from 15.11.2017 vide Notification No. 41/2017-Central Tax (Rate) dated 14.11.2017. The Respondent revised its prices with effect from 16.11.2017. However, the DGAP’s invoice-wise analysis reveals that the Respondent increased the base prices of several affected SKUs in the post-rate-reduction period as compared to the pre-rate-reduction period of 01.11.2017 to 14.11.2017.

As per Rule 133 (3) (c) of the CGST Rules, the provision for imposition of interest at the rate of 18% on the profiteered amount became operative only upon the coming into force of the CGST (Amendment) (Fourth) Rules, 2019, i.e., with effect from 28.06.2019. In the present case, the alleged profiteering occurred much prior to the said date. In view of the settled legal position laid down by the Constitution Bench of the Hon’ble Supreme Court in M/s. Vatika Township Pvt. Ltd. [2014 (9) TMI 576 - SUPREME COURT (LB)] which categorically holds that fiscal provisions imposing additional liability cannot be applied retrospectively unless expressly provided, we are of the considered opinion that this is not a fit case for directing the Respondent to pay any interest on the profiteered amount.

It is evident from the facts that Respondent has denied the benefit of tax reduction to the customers in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and he has thus committed an offence under Section 171 (3A) of the above Act and therefore, he is liable for imposition of penalty under the provisions of the above Section. However, since the provisions of Section 171 (3A) have come into force w.e.f. 01.01.2020 whereas the period during which violation has occurred is w.e.f. 15.11.2017 to 31.12.2018, hence the penalty prescribed under the above Section cannot be imposed on Respondent retrospectively.

Thus, the Report submitted by the DGAP is accepted to the extent that respondent has profiteered an amount of Rs. 90,90,310/- only for the period of 15.11.2017 to 31.12.2018. However, I am refraining from imposing any interest or penalty on this amount as explained above in Para 17 & 18. Further, the Respondent is directed to deposit the profiteered amount as aforesaid in Consumer Welfare fund created by Centre and States equally as per the table ‘B’ supra. Accordingly, the case is Disposed of.

A report in compliance of this order shall be submitted to DGAP and the concerned CGST/SGST Commissioner/s within a period of 4 months from the date of receipt of this order.

Validity of reopening of assessment u/s 147 - improper sanction accorded u/s 151 - scope of notices issued u/s 148 of the new regime - Application of TOLA to the Income Tax Act

HELD THAT:- These Special Leave Petitions are squarely covered by the Judgment of this Court in “Union of India & Ors. vs. Rajeev Bansal” [2024 (10) TMI 264 - SUPREME COURT (LB)]

Petitions filed by the Revenue are disposed of. The assessee will be governed by reasons discussed in the said Judgment.

AO will dispose of the objections in terms of the law laid down by this Court. Thereafter, the assessee who are aggrieved will be at liberty to pursue all the rights and remedies in accordance with law, save and except for the issues which have been concluded in the Judgment.

Addition u/s 68 - additions relating to share application moneys - as alleged appellant failed to satisfactorily explain the nature and source of the unexplained unsecured loans and also failed to justify the proportionate interest disallowance - ITAT’s blanket reversal of the Commissioner of Income-Tax (Appeals)

HELD THAT:- CIT (Appeals), in its appellate order, had specifically adverted to the fact that the appellant could not adequately explain the genuineness of unexplained unsecured loans and had rightly sustained the proportionate interest disallowance on such unexplained credits.

ITAT's decision to uphold the entire addition, while reversing the deletions made by the Commissioner of Income-Tax (Appeals) is founded on sound legal principles and is supported by the material on record. The appellant's contention that the Commissioner of Income-Tax (Appeals) had conducted independent inquiries and obtained confirmations from creditors and banks, while factually correct to some extent, does not alter the fundamental reality that these inquiries and the resultant findings were never properly documented, analyzed or discussed in the appellate order itself, rendering the deletions legally untenable and unsustainable.

This Bench finds that the approach of the ITAT in dismissing the appellant's appeal is consistent with the well-established principles of appellate adjudication and the proper application of Section 68 of the Act.

ITAT's observation that the deletions made by the Commissioner of Income-Tax (Appeals) appeared to be a “made to believe arrangement” may seem harsh at first blush, but when examined in the context of the complete absence of reasoning in the appellate order and the Commissioner of Income-Tax (Appeals) own findings regarding unexplained unsecured loans and interest disallowance on a portion of credits, this observation cannot be characterized as perverse or unreasonable. The responsibility of an appellate authority is not merely to conduct inquiries or obtain documents, but to analyze the evidence, weigh the probabilities, address the concerns raised by the assessing authority, and arrive at reasoned conclusions that are reflected in the appellate order itself.

CIT (Appeals) failure to discharge this fundamental responsibility, coupled with the appellant's inability to satisfactorily establish the genuineness, creditworthiness and capacity aspects required under Section 68 of the Act is fully justified.

Interest income on NPA - underlying loan had qualified as an NPA due to interest remaining outstanding for more than six months - statutory remedy of appeal u/s 260A - NPA classification - accrual of income - petitioner sought to write-off interest amounts that had been accrued in earlier assessment years and had been duly offered to tax on the grounds that these amounts had remained outstanding and unpaid for a period exceeding six months, thereby rendering them uncollectible and justifying their treatment as written-off amounts in accordance with the established norms for recognition of income from NPAs.

ITAT distinguishing the loans advanced to two parties as fresh advances were made to these borrowers - petitioner contended that this distinction has no basis in the RBI circular or Accounting Standard-9 issued by the ICAI both of which do not recognize subsequent advances as a disqualifying factor for NPA classification.

Maintainability of Writ Petition under Article 226 of the Constitution - Bench is of considered opinion that the petitioner has admitted that an alternative remedy of appeal u/s 260A of the Act was available, which provided for an appeal to the High Court against the order of the Income Tax Appellate Tribunal on any substantial question of law within a period of 120 days from the date of receipt of the order.

Petitioner failed to avail this statutory remedy within the prescribed time limit and has now sought to invoke writ jurisdiction as a substitute for the appellate remedy that has been allowed to lapse. The explanation offered by the petitioner that important legal documents were misplaced during office relocation and could not be traced for nearly a year until the preparation of returns for assessment year 2009-2010, is wholly unsatisfactory and reflects serious administrative lapses and also lack of due diligence on the part of a petitioner engaged in financial services. To permit such an approach would undermine the carefully structured appellate framework under the Income Tax Act and encourage litigants to ignore statutory timelines. In the absence of exceptional circumstances such as lack of jurisdiction, violation of principles of natural justice or manifest arbitrariness, this Court is not inclined to entertain the present Writ Petition merely because the petitioner has allowed the statutory limitation period to expire due to its own negligence.

Thus, as relying on Glaxo Smith Kline Consumer Health Care Private Limited [2020 (5) TMI 149 - SUPREME COURT] the first question of law stands decided in favour of the Revenue and against the petitioner.

Interest income on NPA -NPA classification - ITAT has not committed any error of law in distinguishing between different categories of loans based on the actual conduct of the petitioner. The petitioner's primary contention is that all loans where interest remained overdue for six months or more must be classified as Non-Performing Assets under the RBI's Prudential Norms and that the RBI guidelines do not recognize subsequent advances as a disqualifying factor. However, this Court is of the view that while the RBI guidelines prescribe objective criteria for NPA classification, the determination of taxable income under the Income Tax Act must necessarily take into account the commercial reality and the actual conduct of the parties.

ITAT has rightly observed that no prudent businessman would advance fresh loans to a borrower if there were genuine concerns about the recovery of principal or interest from earlier advances. The material on record clearly establishes that the petitioner made substantial fresh advances during the financial year 2002-2003.

The petitioner's conduct in extending significant additional credit to these very same borrowers during the same financial year in which it claimed that earlier loans had become non-performing clearly demonstrates that the petitioner itself had confidence in the creditworthiness and financial soundness of these borrowers. The ITAT's approach of examining the totality of facts and the substance of the transaction, rather than merely applying the RBI guidelines in a mechanical manner is legally sound and ensures that the determination of taxable income is based on economic reality rather than accounting formalism. Accordingly, the second and third questions of law also stands decided in favour of the Revenue and against the petitioner.

Principle of taxing real income - Petitioner has strongly relied upon the principle that income tax can only be levied on real income and not on notional income and has contended that interest income accruing on Non-Performing Assets is merely a book entry that does not represent real income unless actually realized. While this Bench acknowledges that the principle of taxing real income is indeed a fundamental tenet of income tax law, the application of this principle must be contextual and fact-specific.

In the present case, the conduct of the petitioner in making fresh advances to the very same borrowers whom it claims were unable to service their existing debt completely undermines the assertion that the interest income was merely notional and wholly unrealizable. If the petitioner genuinely believed that these borrowers were in financial distress and unable to pay interest on existing loans, thereby rendering the accrued interest notional and uncollectible then the petitioner would not have exposed itself to further credit risk by extending substantial additional loans to the same borrowers. The fact that the petitioner chose to make fresh advances and in the case of M/s. Prathima Estates Limited, even received interest payment within five days clearly establishes that the petitioner expected to recover not only the fresh advances but also the earlier dues including the accrued interest.

Proceedings in the name of a non-existent entity - procedural error - Whether curable defect u/s 292B? - order as issued against the amalgamating company

HELD THAT:- We are not inclined to hold that issuing notices and passing of the Assessment Order in the name of a non-existent entity is a procedural error which can be cured by taking recourse to the provisions of Section 292B. This is a case where Respondent No. 1 has conducted assessment for the period (i.e. Assessment Year 2020-21) which falls post the date of amalgamation. In such a case it is certainly expected from Respondent No. 1 to be mindful as to which entity is he assessing. Issuing notice and passing of the Assessment Order in the name of Concept, for an Assessment year which falls subsequent to its cessation, certainly cannot be pardoned as a curable defect.

The argument of the revenue that issuance of notice/order in the name of a non-existent entity is a curable defect pursuant to the provision of Section 292B, has already been negated in the case of Maruti Suzuki India Ltd [2019 (7) TMI 1449 - SUPREME COURT]

In this case, the notice u/s 143(2) under which jurisdiction was assumed by the assessing officer was issued to a non-existent company. The assessment order was issued against the amalgamating company. This is a substantive illegality and not a procedural violation of the nature adverted to in Section 292B. Decided in favour of assessee.

Validity of assessment order passed u/s 153A r/w Section 144 -. Seizure of amount from the vehicle of petitioner - petitioner vehemently argues that no notice u/s 142 (1) was ever served upon petitioner before passing of assessment order - notice was never received and in an absolutely illegal and arbitrary manner on the very next day i.e., on 30.09.2021, ex parte order under Section 153 A read with Section 144 of Act 1961 was passed - non adherence to letter of the law and principles of natural justice,

HELD THAT:- Respondents was unable to point out anything on record which would indicate that notice dated 29.09.2021, under Section 142(1) of Act 1961, had ever been served upon the petitioner. Admittedly, assessment order was passed on the very next day i.e., 30.09.2021. Despite opportunity and pointed question, respondents was unable to bring on record anything to substantiate that this notice was ever served upon petitioner or that assessment order was also ever served upon petitioner.

It is opposed to all probability and commonsense that once petitioner had produced the relevant ‘J’ Form before the Committee, he did/would not produce this form before the Income Tax Authorities, if called upon and given an opportunity. It is to be reiterated that the Committee had duly accepted the said ‘J’ form.

Assessment order u/s 153A r/w Section 144 of Act 1961 is unsustainable, hence set aside. Matter is remanded to the Assessing Authority to consider the same afresh and decide the same in accordance with law.

Reopening of assessment u/s 147 - “reason to believe” OR “reason to suspect” - only reason on the basis of which the impugned notice has been issued is that the claim for deduction of interest was allowed without a certificate [as contemplated in Section 24(b) of the IT Act] being on record.

HELD THAT:- The only material which is not adverted to in the reasons, but is referred to in the Affidavit in Reply, is that there was an audit objection raised subsequent to the completion of the original assessment proceedings.

We are of the view that it is now well settled by several judgments of this Court that the validity of the reopening has to be tested on the basis of the reasons recorded.

We may refer only to the judgment in Hindustan Lever Limited [2004 (2) TMI 41 - BOMBAY HIGH COURT] that the validity of the reasons has to be adjudicated on the basis of what is stated therein and not by relying on something stated in the affidavit.

As held by the Supreme Court in the case of Indian and Eastern Express Newspaper Limited [1979 (8) TMI 1 - SUPREME COURT (LB)] the factual material that was pointed out by the audit department viz., the absence of a certificate, cannot give Respondent No. 1 a valid basis to exercise the re-assessment proceedings.

The judgment in Honda Siel Power Products Limited [2011 (2) TMI 1184 - DELHI HIGH COURT] relied upon by the Revenue is wholly in apposite.

In the present case the sole allegation is the failure on the part of the Petitioner to furnish a certificate as mandated by the third proviso to Section 24(b). As we have stated hereinbefore, there is no statutory requirement to file any such certificate as the Petitioner’s case did not fall within the second proviso. The Delhi High Court was concerned with a case where admittedly the expenditure incurred to earn tax free income had to be disallowed. Merely because the provisions were introduced after the return of income was filed does not mean that there was no failure on the part of the Assessee to make a full and true disclosure in the course of the assessment proceedings, and hence, this judgment would not come to the assistance of the Revenue to validate the assumption of jurisdiction to make a re-assessment. Assessee appeal allowed.

Faceless assessment - Assumption of jurisdiction by AO to issue notice u/s 148 - such notice was issued by Jurisdictional Assessing Officer and not by Faceless Assessing Officer - scope of provisions of Section 151A of TOLA, 2020’with effect from 01.11.2020 and E-Assessment of Income Escaping Assessment Scheme, 2022 - automated allocation in accordance with the risk management strategy formulated by the Board as referred to in Section 148 - scope of the words “and in faceless manner” as appears in the Scheme, 2022 - two views on the subject

Whether the Jurisdictional Assessing Officer has jurisdiction to issue notice under Section 148 of the Act in view of the Scheme, 2022 or not? - HELD THAT:- It appears that if the procedure prescribed under Section 144B of the Act for assessment is to be applied also for the notice to be issued under Section 148 of the Act, then it would also lead that the provisions of Section 148A of the Act which provide for inquiry by the AO and passing of order by the Assessing Officer to come to a prima-facie conclusion that whether it is a fit case to reopen is not available in the Scheme, 2022.

If we read the Scheme literally as canvassed before us by learned advocates for both the sides, as it is unambiguous and plain in language, no further interpretation is required to be made by reading the provisions of Section 148A of Act in the Scheme, 2022. If the Scheme is also applied to the procedure prescribed u/s 148A of the Act, the same shall be altered by adding the procedure of discarding which is not intended by the legislature. Therefore, we are of the opinion that the decision of Kairos Properties (P.) Ltd. [2024 (10) TMI 1282 - GUJARAT HIGH COURT] wherein, the Scheme, 2022 is also extended to the procedure prescribed in Section 148A of the Act, would amount to alter the Scheme, 2022 itself.

Hon’ble Bombay High Court while considering the provisions of Section 148A of the Act has held that the scope of scheme as defined in paragraph No. 3 by excluding the applicability of Section 148A of Act from the scope of the scheme would lead to an absolute absurdity and would amount to alter the Scheme. In such circumstances, we are with due respect not in agreement with the Bombay High Court to insert the provisions of Section 148A of the Act to be read in the scope of the scheme.

Therefore, the logical conclusion which comes that if Section 148A of the Act is not part of the Scheme, 2022, then issuance of notice under Section 148 of the Act by the Faceless Assessing Officer would be an empty formality because issuance of notice under Section 148 of Act is consequence of the order which is passed under Section 148A(d) of the Act.

As held by the this Court in case of Talati and Talati LLP [2024 (10) TMI 1282 - GUJARAT HIGH COURT] the notice issued under Section 148 of the Act by the Jurisdictional Assessing Officer in search cases is held to be a valid notice and would also justify our view that the notice under Section 148 of the Act has to be issued by the Assessing Officer who has passed the order under Section 148A(d) of the Act. If the notice is issued by the Faceless Assessing Officer under Section 148 of the Act on the basis of the order which has been passed by the Jurisdictional Assessing Officer under Section 148A(d) of the Act, the same would result into absurdity.

Therefore, the logical conclusion which can be deduced from reading of the provisions of the Act together with the intention of the legislature and the Scheme, 2022, we are of the opinion that so far as issuance of notice under Section 148 of the Act is concerned, the contention raised on behalf of the Revenue based upon the Office Memorandum of the Central Board of Direct Taxes dated 20th February, 2023 which is even considered by the Hon’ble Bombay High Court would be in line of the legislative intent so as to operate the two aspects separately, one by issuance of notice under Section 148 of the Act by automated allocation and other by conducting assessment or reassessment proceedings under Section 147 of the Act in a faceless manner to the extent as provided under Section 144B of the Act.

In view of the foregoing reasons, so far as the issue, with regard to the challenge to the assumption of jurisdiction to issue the notice under Section 148 of the Act by the Jurisdictional Assessing Officer, fails and the notices issued by the Jurisdictional Assessing Officer under Section 148 of the Act after 01.04.2022 are held to be valid and legal.

Levy of penalty u/s. 271(1)(c) - assessment in this case was completed u/s. 147 r.w.s. 144 - Addition u/s. 69A for the reason that the assessee has failed to explain the source of money deposited into its bank account - HELD THAT:- It is a settled legal proposition that the quantum and penalty proceedings are separate and independent proceedings and even though the assessee has not filed any appeal against the addition in the quantum proceedings, the assessee can still come forward with the necessary explanation in support of its claim for non-levy of penalty which can be examined during the course of penalty proceedings.

In the instant case, we find that the assessee has been consistent in its explanation that the cash deposits are from its members and necessary documentation in support thereof has been placed on record.

Neither the AO nor the CIT(A) have recorded any specific finding in this regard. We, therefore, deem it appropriate to set aside the matter to the file of the AO to examine the explanation so furnished by the assessee along with the supporting documentation and decide the matter relating to levy of penalty u/s 271(1)(c) afresh as per law. Appeal of assessee allowed.

Cash deposits in bank account - business receipts v/s unexplained income - claim of the assessee that the deposits represent business receipts from petty electrical contracting work rather than unexplained income from undisclosed sources - application of presumptive taxation provisions of section 44AD - claim of the assessee that the deposits represent business receipts from petty electrical contracting work rather than unexplained income from undisclosed sources - HELD THAT:- It is a settled principle that where deposits in a bank account are found to be linked with business activity, the entire deposits cannot be treated as income of the assessee. In such circumstances, only the income element embedded in the gross receipts can be brought to tax. Therefore, the approach adopted by the AO in taxing the entire deposits is not sustainable.

The submission of the Ld. AR to apply presumptive taxation provisions of section 44AD is reasonable and justified. At the same time, the suggestion of the DR for application of a slightly higher net profit rate also deserves consideration to balance the equities. Therefore, in the facts and circumstances and after due consideration of the pleadings made by both sides, we deem it fit and proper to estimate the income of the assessee by applying a net profit rate of 12% on the gross receipts - Appeal of assessee is allowed partly.

Deemed dividend u/s. 2(22)(e) - transaction being repayment of deposit - HELD THAT:- In this case, the assessee who is the Managing Director of M/s Crystal Quinone Pvt. Ltd., holds 57% shareholding in the said company. During the relevant assessment year, the assessee was maintaining a deposit account with the company.

As on 19.03.2015, the assessee had a credit balance of Rs. 4,04,73,030/- in his deposit account. On the instructions of the assessee, the company made payments by debiting the assessee’s deposit account, which facts are not in dispute. Even after such payments, the assessee continued to have a substantial credit balance with the company and there was no point of time during the year when the account showed a debit balance.

Since the company has not given any money in any form to the assessee, the provision of Section 2(22)(e) of the Act are not attracted. Appeal of the assessee is allowed.

Protective additions u/s 68 and 69C made in the hands of the assessee as an accommodation entry provider - substantive and protective addition - initial onus to prove - as per DR accommodation entry provider cannot escape assessment merely on the ground that substantive additions have been made in the hands of the beneficiaries - reasoning adopted by the CIT(A) in deleting addition as protective additions cannot survive merely because substantive additions have been confirmed in the hands of beneficiaries

HELD THAT:- It is a settled position of law that the burden under section 68 rests upon the assessee in whose books the credit appears, to satisfactorily explain the nature and source thereof.

As decided in PCIT v. NRA Iron & Steel Pvt. Ltd. [2019 (3) TMI 323 - SUPREME COURT] has unequivocally held that the assessee must establish (i) identity of the creditor, (ii) creditworthiness of the creditor, and (iii) genuineness of the transaction.

In the present case, the assessee has been found, on the basis of search material and sworn statements, to be a conduit entity used for routing accommodation entries. Mere reflection of transactions in the books does not, by itself, discharge the statutory onus under section 68.

The reasoning adopted by the CIT(A), that protective additions cannot survive merely because substantive additions have been confirmed in the hands of beneficiaries, does not accord in view of the decision of Sumit Global Pvt. Ltd. [2024 (7) TMI 226 - CHHATTISGARH HIGH COURT] The liability under section 68 is independent and attaches to the assessee in whose books the unexplained credits are found.

Additions made by the AO u/s 68 of the Act are restored and sustained. Consequentially, the addition under section 69C is also upheld. Decided in favour of revenue,.

Reopening of assessment u/s 147 - reasons to believe - condition precedent as stipulated u/s.147 - "belief based on reason” - AO should record the ‘reason to believe escapement of income’ - “tangible material” to come to the conclusion that there is escapement of income from assessment

HELD THAT:- From the reasons already set out above, it emerges that, the AO had taken note of receipt of funds of Rs. 7.15 crores by the assessee from M/s Orange Mist Productions Pvt Ltd during the year. According to AO, M/s Orange Mist Productions Pvt Ltd was not involved in genuine business activities and that it had made suspicious transactions with various parties including the assessee. After purported analysis of the return of income, 3CD etc. of the assessee and taking note of the admitted turnover of Rs. 4.01 crores, the AO formed his belief that income had escaped assessment and, hence required to be reopened u/s.147 of the Act and consequently issued the impugned notice u/s 148 of the Act.

We find that the aforesaid reasons do not satisfy the requirements of Section 147 of the Act. The reasons and the information referred to is extremely scanty and vague. There is no reference to any document or statement, or any tangible material or evidence that prima facie shows or establishes nexus or link which discloses escapement of income. Rather, it appears that the reasons were recorded by the AO on his own subjective notions and opinion.

AO has not adduced any material basis which he suspected that M/s Orange Mist Productions Pvt Ltd was involved in nongenuine business transactions or that its transactions with M/s Orange Mist Productions Pvt Ltd was suspicious.

AO has mechanically averred that the assessee had received funds from M/s Orange Mist Productions Pvt Ltd which he suspected to be involved in non-genuine activities and thus straightaway concluded that income chargeable to tax had escaped assessment. There is no reason or basis whatsoever stated for arriving at such a belief. The AO has also not examined the nature of receipt of funds from M/s Orange Mist Productions Pvt Ltd by the assessee and only because there was a receipt from M/s Orange Mist Productions Pvt Ltd he suspected that it may represent income escaping assessment, an action we are unable to countenance.

It has to be kept in mind that in Ganga Saran & Sons P. Ltd. [1981 (4) TMI 5 - SUPREME COURT] held that the expression "reason to believe" occurring in sec. 147 "is stronger" than the expression "if satisfied" and such requirement has to be met by the AO in the reasons recorded before usurping the jurisdiction u/s. 147 of the Act. It must be kept in mind that information adverse against the assessee may trigger "reason to suspect" then the AO is duty bound to make reasonable enquiry to collect material which would make him belief that there is in fact an escapement of income which requirement of law has not been fulfilled in this case by the AO.

How the AO formed his opinion that M/s Orange Mist Productions Pvt Ltd was involved in suspicious transactions with the assessee. Apparently there appears to be no basis for this conclusion arrived at by the AO in the reasons recorded.

AO, based on the reasons recorded as set out above, had initiated a roving enquiry to examine the veracity of his own subjective notions, in as much as, there was no tangible material or evidence in possession demonstrated through his recorded reasons which could have validly led him to believe that income of the assessee had escaped assessment. The reasons recorded were scant and vague. Decided in favour of assessee.

Limitation of Benefits clause - treaty shopping - place of effective management - substance over form - tax residency certificate - shell or conduit company - source rule

Limitation of Benefits clause - treaty shopping - place of effective management - substance over form - tax residency certificate - shell or conduit company - source rule - Entitlement to India-Singapore DTAA benefits for capital gains on sale of shares/CCDs held by the assessee and consequent taxability in India - HELD THAT: - The Tribunal examined whether the assessee, a Singapore-incorporated wholly-owned subsidiary of a Hong Kong company (ultimately owned by a Chinese parent), was entitled to Article 13(4A)/(5) benefits of the India-Singapore DTAA for capital gains arising on sale of Indian shares/CCDs. The Tribunal found that the assessee was interposed as an investment vehicle with no independent sources of funds, minimal tangible assets and operating expenditure, no employees, no dedicated office and bank-signatories/decision-makers resident outside Singapore. The TRC issued by Singapore was held not conclusive; surrounding facts had to be examined and, on the material, showed lack of effective management and commercial substance in Singapore. The arrangement was held to have been adopted principally to obtain treaty benefit (treaty shopping) and thus fell within Article 24A (LOB): the assessee was a shell/conduit company lacking real and continuous business activities and did not meet the substance/expenditure tests. Applying the doctrine of substance over form and the source rule, the Tribunal held that the capital gains were taxable in India and treaty protection under Article 13 was denied. The Tribunal rejected reliance on a contrary Mumbai ITAT decision as factually distinguishable and noted that prior grant of treaty benefit for interest on CCDs would not estop the Revenue from denying treaty benefits for capital gains where eligibility criteria were not satisfied. [Paras 9]

The assessee is not entitled to DTAA benefits for the capital gains; Article 24A (LOB) is attracted, the assessee lacks substance and effective management in Singapore, and the capital gains are taxable in India under the source rule.

Final Conclusion: Appeal dismissed; assessment upheld for AY 2020-21 as the Tribunal found the assessee to be an interposed shell/conduit entity lacking requisite substance and effective management in Singapore, thereby attracting the LOB clause and rendering the capital gains taxable in India.

Addition made by rejecting the income offered under percentage completion method as per AS 9 by your appellant - assessee is engaged in the business of construction/development of residential complex and sale of flat on completion of construction - AO disallowed the expenditure in respect of penalty paid to Silvasa Municipal Corporation for deviation in plan.

HELD THAT:- It is pertinent to note that since the assessment year 2014-15, the assessee was following the project completion method which is since inception of the firm.

Revenue has accepted this accounting method which is recognized by the Institute of Chartered Accountant and is in accordance of Accounting Standard AS-9. This fact was not disputed by the Assessing Officer as well as by the CIT(A).

In assessee’s case, the ownership of the flat was transferred only after execution of the sale deed on realization of full consideration but in fact the advance receipt from the buyers were shown as liability in the balance sheet of assessment year 2014-15 which was offered to tax in the later years as and when the sale deeds were executed.

Appeal of the assessee is allowed.

Addition u/s 69B -unexplained loans and advances - AO has calculated the notional figure of loans and advance based on the interest income declared in the audited financial statements and duly offered to tax - Only because there were no loans and advances appearing in the balance sheet, AO has applied 10% interest rate and assumed that the assessee had given loans and advances - CIT(A) deleted addition

HELD THAT:- CIT(A)/NFAC has examined the said transaction and has observed AO has disregarded the agency and also not taken note that the sales and debtors are reflected in the principal’s books and along with the commission income the assessee also earns the interest income on delayed payments of debtors. DR failed to controvert the contention of Ld. counsel of the assessee. We therefore find no inconsistency in the finding of CIT(A) deleting the impugned addition u/s 69B - Decided against revenue.

Customs valuation and transaction value - Minimum import price (MIP) and import permissibility - seeking clearance of goods declared as Engineered Marble imported from China and classified under CTH 6802 9990 - Use of DGFT notifications for regulating importability, not for fixing assessable value - Confiscation and redemption in consequence of breach of import policy - Setting aside confiscation, fine and penalty where enhanced value accepted - HELD THAT:- While the Tribunal is presumed to know the law, it is not presumed to know the facts. Complete disclosure is therefore indispensable, especially since the Tribunal ordinarily accepts the submissions and averments of parties at face value, assuming they are made candidly, in good faith and with clean hands.

We find that the contravention of DGFT Notification No. 18(RE)/2008 is not contested by the appellant. It was however submitted by them that the adjudicating authority wrongly imposed fine and penalty instead of merely assessing duty on the DGFT-fixed value and further that Section 17 of the FTDR Act bars confiscation of goods intended for personal use.

The valuation rules under the Customs Act and the value-based restrictions prescribed in the DGFT notification operate in distinct domains. Under the Customs Act and the Rules framed thereunder, the assessable value is determined on the basis of the declared transaction value for the purpose of applying the ad valorem duty.

In contrast, the value mentioned in the DGFT notification is meant to regulate the permissibility of importing the goods in question. Accordingly, it was incumbent upon the Proper Officer to first evaluate the declared transaction value strictly in terms of the Customs Act and the Valuation Rules. If the transaction value was correctly declared and happened to be lower than the minimum value permitted for free import as per the DGFT notification, the officer, after accepting the declared value, could have imposed penalties and taken action for violation of the DGFT notification, as provided by law.

However, in the present case, the Adjudicating Authority without taking recourse to the Customs Valuation Rules has by ‘ORDER’ enhanced the declared value not on the basis of any findings on any misdeclaration of value or irregularity under the Customs Act, but solely to align the goods with the “policy conditions” under the Customs Tariff Act, 1975.

We hence find force in the Ld. Counsel’s submission. In the circumstances, once the value is enhanced and aligned to USD 60 for import purposes, the goods are purged of the taint and are to be treated as compliant with DGFT Notification No. 18(RE)/2008, irrespective of the fact that such enhancement of value stems from departmental action. Hence if the importer does not contest the enhanced value, as in this case, the goods become freely importable and are no longer liable to penal consequences. This being so all other issues raised by the appellant looses relevance.

Maintainability of appeal before the Customs, Excise and Service Tax Appellate Tribunal - Appeals to the Appellate Tribunal under Section 129A of the Customs Act - Appeal against orders of Assistant Commissioner/Deputy Commissioner lies to Commissioner (Appeals) - Regulations cannot override statutory provisions - Condonation of delay application contingent on maintainability of the appeal - HELD THAT:- Perusal of the statutory provision as prescribed under Section 129A of the Customs Act 1962 clearly shows that if the order is passed by the Assistant Commissioner/Deputy Commissioner, appeal against the same would lie to the Commissioner (Appeals) and not to this Tribunal.

Further, we find that though the Regulation 14 provides that any person aggrieved by the regulation will file appeal before this Tribunal but these regulations cannot over-ride the statutory provision as prescribed under the Customs Act, 1962 which bars the entertaining of the appeal against the order passed by the Assistant Commissioner/Deputy Commissioner.

In view of this statutory bar, as prescribed under Section 129A of the Customs Act, 1962, we are of the considered opinion that the present appeal is not maintainable before this Tribunal and the same is rejected on the ground of maintainability at this stage.

Water-soluble fertilizer - imported ‘Calcium Nitrate with Boron’- duty exemption under Notification No.12/2012-Cus - Fertilizer Control Order specifications - classification as fortified fertilizer - strict interpretation of exemption notification - HELD THAT:- As seen from the above Notification, the water-soluble fertilizers included in schedule-1 Part-A of the FCO are eligible for the benefit of 5% Basic Customs Duty. Admittedly, the item imported is boronated calcium nitrate, the only question that arises is this a water-soluble fertilizer and even if a negligible percentage of boron is added to it, whether it still remains to be calcium nitrate to enjoy the benefit of the Notification.

We find that the Fertilizer Control Order, 1985 under the category of Fortified Fertilizers at Sl.No.9 Calcium Nitrate with Boron is mentioned wherein under the specifications column water soluble calcium is 17.1% and Boron by weight is 0.250. In the instant case, the Boron content in the product imported by the appellant is to the extent of 0.3% and as claimed by the Revenue it appears that the product is rightly classifiable under the category of Fortified Fertilizers. We also find that I(h) under the FCO under the category of 100% water-soluble complex fertilizers calcium nitrate is included under which water insoluble is 1.5%. Since, calcium nitrate with boron under Sl.No.9 under the category of Fortified Fertilizers matches to the specifications given by the appellant for the product imported by them, the benefit of the Notification meant for water-soluble fertilizers cannot be extended. Accordingly, we find justification of the Revenue in denying the benefit of the Notification. It is also on record that ‘Yaraliva Nitrabor’ imported by the appellant with the addition of boron to calcium nitrate increases elasticity of tissues to prevent cracking of tissues which clearly acknowledges the fact that calcium nitrate is different from boronated calcium nitrate. The Notification is for calcium nitrate and not for boronated calcium nitrate, therefore, as observed by the Hon’ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai vs. Dilip Kumar & Company [2018 (7) TMI 1826 - SUPREME COURT (LB)] words cannot be included into the Notification since an exemption Notification has to be strictly interpreted.

Therefore, the benefit of the Notification cannot be extended wherein the Notification clearly mentions only the calcium nitrate and even in the FCO, 1985 only calcium nitrate is mentioned under the category of water-soluble fertilizers, the fact that it is water-soluble as claimed by the appellant will not change the fact that calcium nitrate is different from boronated calcium nitrate. In view of the above, we are in the agreement with the Revenue that the benefit of the Notification No.12/2012-Cus. dated 17.03.2012 cannot be extended.

Thus, the impugned order is upheld and appeals are dismissed.

Classification of goods - computer monitors - integrated tax rate - distinction between monitors for ADP machines and TV/video monitors - CBIC circular guidance for classification - residuary entry in IGST rate notification - self-assessment and scope of revision - discharge under protest and assessment u/s 17(5) of Customs Act, 1962 - jurisdiction to determine IGST rate - HELD THAT:- According to the appellant, the impugned goods are ‘computers’ of the appropriate size and was not amenable to the assigned description in schedule IV of the notification. It was further contended that, while designed for use with computers and capable of being connected to computers, that these were not solely or principally so precluded taking of the ambit of serial no. in the rate notification, as declared.

In any case, had the appellant discharged the liability at 18% for integrated tax, it was not open to customs authorities to revise it to 28% as set out in re Ortho Clinical Diagnostics India Pvt Ltd. [2022 (9) TMI 1109 - CESTAT MUMBAI]

Consequently, we set aside the orders rejecting the applications for amending the respective bills of entry and restore the assessments to the ‘proper officer’ in section 17(5) of Customs Act, 1962 to determine the consequential duty liability. In view of this direction, the impugned orders sustaining the assessment at 28% for integrated tax are set aside.

Classification under Heading 3921 as plates, sheets, film, foil and strip of plastics - Builders' ware under Heading 3925 - Chapter Note 10 to Chapter 39 (scope of plates, sheets and exclusion for "further worked" articles) - Chapter Note 11(b) and 11(h) to Chapter 39 (builders' ware; structural elements and ornamental architectural features) - General Rules for Interpretation - Rule 1 and Rule 3(a) - Essential character test for tariff classification

Classification under Heading 3921 as plates, sheets, film, foil and strip of plastics - Chapter Note 10 to Chapter 39 (scope of plates, sheets and exclusion for "further worked" articles) - Essential character test for tariff classification - PS mouldings, PS wall panels, 3D PVC panels, PVC panels/sheets/accessories, PU wall panels/panels/corners/mouldings and WPC panels are classifiable as plates/sheets of plastics under Heading 3921, subject to verification of composition and structural characteristics. - HELD THAT: - Applying Rule 1 of the General Rules for Interpretation and the Chapter and explanatory notes to Chapter 39, the Authority found that a substantial portion of the goods retain the essential character of plates/sheets of plastics within the meaning of Chapter Note 10. The Authority accepted the applicant's evidence that many varieties are presented in rectangular form, exhibit cellular structure or are reinforced/laminated, and that surface features (printing, embossing, UV coating) and edge profiles are formed in-line during extrusion rather than by post-formation "further working." On the material on record the panels therefore fall within the specific description of heading 3921 (including subheadings for polymers of styrene, vinyl chloride and polyurethanes), and the specific heading must be preferred to the residual builders' ware heading in accordance with GRI 3(a) and the essential-character principle. The Authority examined and rejected the revenue's contention that interlocking profiles, installation, incidental utility (moisture resistance, insulation) or commercial marketing as wall/ceiling panels necessarily change the essential character from a sheet to a constructional article, noting that removability, preservation of rectangular geometry and the nature of manufacture support classification as sheets. [Paras 5, 6]

Goods claimed in the application are classifiable under Heading 3921 (with appropriate subheadings for polymers of styrene, vinyl chloride, polyurethanes and other plastics), subject to field verification of composition and structure.

Builders' ware under Heading 3925 - Chapter Note 11(b) and 11(h) to Chapter 39 (structural elements and ornamental architectural features) - General Rules for Interpretation - Rule 1 and Rule 3(a) - Whether certain profiled/interlocking panels properly qualify as builders' ware under Heading 3925 was considered and rejected on the material before the Authority, but aspects relating to actual composition/structure were left for verification. - HELD THAT: - The Authority considered the Commissioner's submissions that profiled panels with interlocking edges, permanence of installation and incidental functional attributes bring the products within Note 11(b)/(h) and heading 3925. It held that the descriptive lists in Note 11 are exhaustive and that mere use on walls or presence of decorative/functional incidental properties does not automatically render a sheet a "structural element" or an "ornamental architectural feature" of the kind listed. On the record, the panels examined were lightweight, retained rectangular form, were removable, and had edge profiles formed during extrusion; accordingly, the departmental contention for classification under 3925 was not accepted in respect of the products before the Authority. However, because classification between 3921 and 3925 depends in part on actual composition and whether a particular item is cellular/reinforced or has been "further worked," the Authority directed that field formation verify the composition and structural characteristics where necessary. [Paras 5, 6]

Revenue's contention for classification under Heading 3925 is not sustained on the material before the Authority; limited verification by field formation is required where composition/structure must be ascertained.

Final Conclusion: The Customs Authority for Advance Rulings allows the application and rules that the goods specified are classifiable under Heading 3921 (with the indicated subheadings for polymers of styrene, vinyl chloride, polyurethanes and other plastics), while directing field verification of actual composition/structure where necessary before final implementation.

Interim relief- injunction - forum shopping - contradictory interim orders - entertainment of company petition - challenge to EGM decision under Section 242(4) - oppression and mismanagement - maintainability of relief while parallel civil proceedings are pending - HELD THAT:- It is seen that contradictory statements have been made during the proceedings of this Company Appeal by the Appellant. First, he states that, the Suit has been withdrawn, the suit has been withdrawn, which has been strongly refuted by the Respondent contending thereof that, in fact, the suit has not been withdrawn and it is still pending consideration and his application under Order VII Rule 11 of C.P.C. is pending consideration.

It come to our notice that, the Appellant was removed from the Directorship of the Company by the EGM, held on 03.10.2025, but, the decision of EGM itself has not been made as a subject matter of challenge in the principal Company Petition, as it was filed much prior to it on 18.09.2025. However, the said relief has been attempted to be introduced by the Appellant. Later on, filing a Company Application CA No. 186 / 2025 under Section 242(4) of the Companies Act in CP No. 125 / BB / 2025, wherein he has made the prayer to hold the EGM dated 03.10.2025 to be null and void.

We make it clear at this juncture itself that until and unless the decision of the said EGM dated 03.10.2025, removing him from the Directorship of the Respondent No. 1 Company to challenge in the principal Company Petition, there cannot any injunction granted in favour of the Appellant for his continuance as a Director.

Since, the Company Petition itself is pending consideration, there cannot be a contradictory Interim Stay Order, as it was solicited by the Applicant in his Company Petition in the relief sought therein, in context of his removal from the Directorship of the Company.

In that eventuality, considering the reason, which has been assigned in the impugned order and also considering the surrounding facts and circumstances, which we have already dealt with herein above, we do not think that, it is a fit case to interfere with the impugned order. Accordingly, the Company Appeal, lacks merit and the same is accordingly dismissed.

Limitation and extension by acknowledgement - acknowledgement u/s 18 of the Limitation Act - invocation of corporate guarantee as triggering fresh cause of action - admission of Section 7 application under the IBC - debt and default for initiation of CIRP - consideration of amounts realized in liquidation/CIRP to ascertain outstanding debt.

Limitation and extension by acknowledgement - HELD THAT:- Admittedly, the guarantee was invoked on 12.02.2020, hence, three years’ period shall commence from the said date. The Adjudicating Authority has returned a finding that in Balance Sheet of the year 2021-22 and 2023- 24, there is acknowledgment, which is acknowledgment within the meaning of Section 18 of the Limitation Act, therefore, limitation period stood extended and Application filed on 14.04.2025 is well within time. The Hon’ble Supreme Court in the matter of “Asset Reconstruction Co. (India) Ltd. Vs. Bishal Jaiswal [2021 (4) TMI 753 - SUPREME COURT]”, held that acknowledgment in the balance sheet is acknowledgement within the meaning of Section 18 of the Limitation Act. We, thus, are of the view that the Adjudicating Authority has rightly come to the conclusion that application filed on 14.04.2025 is not barred by time and by virtue of Section 18 the limitation shall extend and the application is well within time.

Debt and default for initiation of CIRP - HELD THAT:- The Form-1 which is filed by the Financial Creditor is part of the record and has been filed by the Appellant as annexure to the appeal. In Part IV of the Form-1 the details of debt and date of default has been pleaded. Appellant has taken exception to the amounts which have been recorded with regard to liquidation of the Principal Borrower and resolution process of the another Corporate Guarantor. In so far as filing of Form-1, the necessary ingredients for proving debt and default are mentioned in Form-1. When the Form-1 and application was found complete, the Adjudicating Authority could have proceeded to admit the application.

As far as amount of liquidation and CIRP of the Corporate Guarantor is concerned, those are resolution made by the Adjudicating Authority itself and matter of public knowledge, hence, there cannot be said to be any suppression on the part of the Applicant.

We, thus, are of the view that there is no an error on which this Tribunal may interfere with the order admitting Section 7 application. We, thus, are of the view that there are no good grounds to entertain this appeal. Appeal is dismissed.

Threshold for initiation u/s 7(1) for allottees under a real estate project - application of admitted claims in a separate CIRP to the eligibility threshold - maintainability of Section 7 proceedings against landowner and developer forming part of same real estate project - exparte proceeding against nonappearing corporate debtor - Whether the Appellant as a class of creditors (Homebuyers) were eligible to initiate Section 7 application against the Corporate Debtor before the Adjudicating Authority based on the threshold. - HELD THAT:- From the development agreement dated 09.09.2010, it becomes very clear that there was a clear understanding between the Corporate Debtor and the EIL, who were declared as first party and second party, respectively. The first party was authorised to develop construct, market and sale/ sub-lease of project. We further note that second party i.e., EIL approached first party/ Corporate Debtor and signed MoU dated 22.07.2010. We also note that the rights and obligations including financial arrangements between the Corporate Debtor and EIL were elaborated in development agreement. There was a clear agreement for sharing consideration between both the parties i.e., Corporate Debtor getting 18% and EIL getting 82% of consideration based on developed super area of the said project.

We find that taking into consideration the above development agreement, if total unit of project “Earth Towne” which is stated to be 3400 as per the Appellants, the 18% share of the Corporate Debtor works out to 612 units/ apartments. The Adjudicating Authority has recorded that number of allottees are 1800 and taking 18% share of Corporate Debtor, this work out 324 units/apartments.

It has been brought out that the Corporate Debtor sold 220 units to the allotees including the Appellants herein and if 220 units are taken into consideration, the 10 % of the same shall be only 22 allotees in terms of Section 7(1) of the Code, as noted earlier. Even if the Corporate Debtor’s entitlement based on 18% shares of total 3400 units is considered, the threshold is 62 being wherein the present appeal has been filed by 115 Appellants, which is clearly above the required threshold in terms of Section 7 the Code.

Thus, the threshold criteria is applicable at the time of filing Section 7 application and not subsequently. We find clear error in the Impugned Order on this ground.

Exparte proceeding against nonappearing corporate debtor - The non-appearance of the Corporate Debtor before this Appellate Tribunal as well before the Tribunal (and at both courts the Corporate Debtor was proceeded ex-parte) would also indicate that the Corporate Debtor had scant respect for the judicial process. We also find that the Appellants have clear case in their favour to initiate Section 7 application before the Adjudicating Authority.

At this stage, we will like to record that we are not expressing anything on the merit of the case and we have restricted only on issue of the threshold, based on which the Adjudicating Authority dismissed Section 7 petition filed by the Appellants.

Thus, looking from any angle, the present appeal has been found meritorious and the decision of the Adjudicating Authority to be erroneous, hence the present appeal is hereby allowed and the Impugned order is set aside and remanded back to the Adjudicating Authority. Both the parties are directed to appear before the Adjudicating Authority on 26.09.2025.

Exemption for construction of roads for use by general public - extended period of limitation - onus on claimant to prove entitlement to exemption - remand to Adjudicating Authority for fresh decision on applicability of exemption - clarification that roads not meant for general public use are taxable - HELD THAT:- We find it appropriate to remand the matter to the Adjudicating Authority to decide the issue of applicability of the exemption notification. However, at the same time, we would like to refer to the decision of this Bench in the case of Warsi Buildcon Versus Principal Commissioner, Customs, Central Excise & Service Tax, Indore [2024 (3) TMI 286 - CESTAT NEW DELHI], where the work orders were awarded to the appellant by various developers or builders of the township and the issue whether construction of roads for the period July 2012 to 2013–14 was eligible for exemption under Notification No.25/2012 was considered.

In the circumstances, the Bench had also upheld the invocation of the extended period of limitation. With reference to the above decision, the learned Counsel tried to distinguish the facts of the present case as in the case of Warsi Buildcon the Work Orders were awarded by private builders or colonisers, whereas in the present case, the Work Order has been issued by Jaipur Development Authority, which is a Government Authority. Since the exemption has been sought under Entry No.13(a) and 29(h), the relevant issue to be decided is whether the construction of road is for use by general public. We therefore, remand the matter to the Adjudicating Authority to consider the documents so as to ascertain the nature of the Work Order and the eligibility to the exemption notification.

Consequently, the impugned order is set aside and the matter is remanded to the Original Authority to decide the issue afresh in all respects. The appeal is, accordingly allowed by way of remand.

CENVAT credit on inputs, input services and capital goods used in construction of immovable property - services in the categories of “Transportation of Goods by Road”, “Advertisement Services” and “Renting of Immovable Property” -definition of input service (means clause and includes clause) - availability of credit for output service by provider of taxable service - amendment excluding construction services from input service w.e.f. 01.04.2011 - administrative circulars cannot override statutory provisions - limitation and extended period - requirement of suppression or collusion - HELD THAT:- Rule 3 of CCR, 2004 deals with CENVAT credit and the relevant portion for the purpose of the appeal provides that a provider of taxable service shall be allowed to take credit to be called CENVAT credit on any input service by the provider of output service. Sub Rule (4) of Rule 3 provides that the CENVAT credit may be utilized for payment of service tax of any input service.

We hold that the appellant is eligible to take credit of the service tax paid on input services received by the appellant. We also find that in the case of Regency Park Property Management Services Pvt. Ltd [2020 (4) TMI 275 - CESTAT NEW DELHI] wherein in Para 20, the Tribunal, relying on various decisions of High Courts, held that there is no manner of doubt that CENVAT credit availed by the appellant on inputs, input services and capital goods service used for construction of the Mall, which was ultimately let out could not have been denied to the appellant. The findings to the contrary recorded by the Commissioner cannot be sustained and are, accordingly, set aside.

We find that construction services used for construction of building are specifically excluded from the definition of ‘Input Service’ only w.e.f 01.04.2011 and that prior to this date, the said services were very much covered in the definition of ‘Input Service’ and for that the appellant is entitled to avail CENVAT credit of service tax paid on such input services as the period involved in the present case is prior to 01.04.2011. Further, we find that the Department vide Circular No.943/04/2011-CE dated 29.04.2011 in Sl. No.12 clarified that CENVAT credit of services excluded in the definition of input service w.e.f. 01.04.2011 will be available if such services were received prior to 01.04.2011. We also find that the Circular No. 98/1/08-ST dated 04.01.2008, which has been relied upon by the learned Commissioner to deny the benefit of CENVAT credit is contrary to the statutory provision as well as contrary to the various decisions decided by the Tribunals and the High Courts cited supra. It is a settled law that a circular issued by the Department cannot override the provision of the law as held in the case of Kerala Finance Corporation Vs Commissioner of Income Tax [1994 (5) TMI 2 - SUPREME COURT]

As regards the invocation of extended period, we find that the appellant has been filing ST-3 Returns and the books of accounts have been regularly audited by the Department and the Department has not been able to bring any evidence on record to show that the appellant has suppressed the material facts from the Department with intention to evade payment of service tax. In this regard, we may refer to the judgment of Uniworth Textiles Ltd. Vs CCE, Raipur [2013 (1) TMI 616 - SUPREME COURT] wherein it has been held that mere nonpayment of duties is not equivalent to collusion or willful misstatement or suppression of facts, otherwise there would be no situation for which ordinary limitation period would apply. Therefore, we find that substantial demand is also barred by limitation.

Thus, we are of the considered view that the impugned order is not sustainable in law and the same is liable to be set aside and we do so by allowing the appeal of the appellant with consequential relief, if any, as per law.

Liablility to pay service tax under intermediary service - foreign universities and getting the commission from the foreign universities -export of services - Place of Provision of Services Rules, 2012 - definition of intermediary under Rule 2(f) - export of service under Rule 3 - extended period of limitation u/s 73(1) of the Finance Act, 1994 - HELD THAT:- Since the issue involved in the present case is stand settled by various decisions, wherein it has been held that the services provided by the appellant is in fact not intermediary service but it amounts to export of service and demand has been set aside in all the cases.

Following the ratio of the said decision, we are of the considered view that the impugned order is not sustainable in law and therefore, the same is set aside by allowing the appeals of the appellant. Since, the demand is set aside on merits, we are not inclined to give the findings on other issues. Accordingly, both the appeals are allowed with consequential relief, if any, as per law.

Support services of business or commerce - taxable as "Business Support Service" under Sections 65(104c) and 65(105)(zzzq) of the Finance Act, 1994 - contract based levy - concession agreement / Build Operate and Transfer - extended period of limitation - renting of immovable property services - Renting of immovable property services (exemption) - HELD THAT:- Appellant had entered into an agreement with PIDB vide which the Appellant was allowed to raise construction of bus-terminal at Amritsar and charge adda-fees as mentioned in Schedule-II.

We find that it is an admitted fact that the Appellant had a contract with State of Punjab and liability to service tax has to be determined based on the contract with State of Punjab; there exists no contract with the bus operators for providing any services; further, at the time of entering into contract with State of Punjab, the Appellant could not have agreed to provide support services to unknown bus operators; further, the entire bus-terminal constructed by the Appellant could not have been constructed to support the business of the bus operators, in fact, bus-terminals are created as a public utility service and not as support services for bus operators and hence, the service tax is not leviable under the business support services.

It is pertinent to note that Schedule-X to agreement is “project site lease deed” by which the Appellant is being granted leasehold rights in the project site i.e. land, on which bus-terminal is required to be developed and in consideration, the Appellant is required to pay lease rental of Rs.50,000/- per month to PIDB for the concession period. The agreement between the Appellant and PIDB proves that the services provided, if at all, are to be PIDB and not to be users of the bus-terminal.

In the present case, instead of paying the costs of construction of new bus-terminal, the Appellant was allowed to collect adda-fees mentioned in Schedule-II and other charges mentioned in Schedule-III; the concession agreement was governed by PIDR Act and adda-fee was fixed by the State Government; and the Appellant had no choice but to collect adda-fee as the prescribed rate. Therefore, in view of completely different contractual terms in the present case and in the case of Prem Kumar Maini [2024 (10) TMI 11 - CESTAT CHANDIGARH], the decision of the Tribunal in the said case is distinguishable on the facts and is not applicable in the facts of the present case.

As regards the invocation of extended period of limitation, we find that in the present case, the Appellant, for the first time, had submitted all the relevant information to the department on 06.04.2009 and had obeyed all the directions of the department i.e. appeared before the department, submitted the information as required, therefore, the limitation of one year would start from 06.04.2009 and the department should have issued the SCN on or before 05.04.2010 whereas the SCN was issued on 11.04.2012, which is beyond the period of one year as prescribed by law. Further, we also find that the department has not been able to bring any evidence regarding the suppression, fraud, mis-statement etc on the part of the Appellant with intent to evade payment of tax, therefore, substantial demand in the first appeal (ST/55340/2013) is barred by limitation.

Thus, we hold that the demand of service tax on adda-fees in the present case under the category of ‘business support services’ is not sustainable in law and is liable to be set aside. In result, impugned orders are set aside and all the appeals of the Appellant are allowed with consequential relief, if any, as per law.

Specified services - retrospective amendment of notification - nexus with export - time-bar - one year from date of export - no quarter-wise restriction under Notification No.41/2012-ST - remand for limited verification of invoices - principles of natural justice

Specified services - retrospective amendment of notification - nexus with export - Whether services used at the head office/corporate office qualify as "specified services" refundable under Notification No.41/2012-ST as amended by Notification No.1/2016-ST. - HELD THAT: - Notification No.1/2016-ST substituted the definition of "specified services" to mean taxable services used beyond the factory or place of manufacture and was given retrospective effect from 01.07.2012. This clarificatory amendment applies to the period in dispute. The Tribunal adopts the ratio of the Principal Bench in Bharat Mines & Minerals, which rejects a pre-/post-export segregation and applies the test of use beyond the place of manufacture for export. Applying that principle, services used at the Head Office/corporate office (such as renting of premises, telephony, security, professional/IT, repair & maintenance, C&F services) qualify as "specified services" for refund, subject to documentary demonstration of authenticity and nexus with exports. The legal eligibility is therefore established, but individual invoice authenticity and nexus require verification on remand. [Paras 12, 14, 15, 18, 21]

Services used at head office/corporate office for export qualify as "specified services" under Notification No.41/2012-ST as amended by Notification No.1/2016-ST; eligibility subject to invoice-level verification of nexus with exports.

Time-bar - one year from date of export - no quarter-wise restriction under Notification No.41/2012-ST - remand for limited verification of invoices - Whether portions of the refund claim could be rejected as time-barred or because invoiced amounts belonged to quarters other than the quarter for which refund was sought. - HELD THAT: - Notification No.41/2012-ST requires only that refund claims be filed within one year from the date of export and does not impose the quarter-wise filing restrictions that apply under Notification No.27/2012-CE. The Lower Adjudicating Authority impermissibly imported the procedural framework of Notification No.27/2012-CE and rejected heads on quarter/mismatch grounds. Absent specific invoice/shipping-bill-wise reasons and given the one-year rule, quarter mismatch by itself is not a ground for rejection; however, the LAA must verify that each invoice was claimed within one year of the relevant export and that nexus with export is established. As invoice-level verification was not carried out, those determinations are remanded for limited verification. [Paras 15, 16, 17, 18, 20]

Rejections based on quarter-wise mismatch or time-bar are legally unsustainable without invoice-level verification; remand directed to verify filing within one year of export and nexus before sanctioning or rejecting refund heads.

Final Conclusion: Impugned appellate orders insofar as they rejected refunds by applying the pre-2016 interpretation of Notification No.41/2012-ST or by relying on quarter-wise/time-bar grounds are set aside. The matters are remanded to the LAA/RSA for limited invoice-level verification of authenticity, nexus with export and filing within one year; on satisfaction refunds shall be sanctioned under Notification No.41/2012-ST as amended, with interest, after observing natural justice.

CENVAT credit on capital goods - eligibility date for CENVAT credit -- date of commissioning/start of use versus date of receipt - application of Rule 3 of the CENVAT Credit Rules, 2004 regarding availment of credit - distinguishing precedents that determine eligibility at date of receipt (Surya Roshni and similar decisions) - HELD THAT:- It is on record that the appellant has supplied these tangible goods, for use, after the same were fully commissioned by the appropriate authority. Therefore, the CENVAT Credit on capital goods was availed by the appellant only after ‘supply of tangible goods for use’ came into existence as a taxable service. In view of the above, we do not find any infirmity in the availment of the above credit on capital goods by the appellant after 16.05.2008, when ‘supply of tangible goods for use’ became a taxable service.

In the present case, the chassis and concrete transit mixers, purchased separately, had no independent or standalone utility for the appellant. By their very nature, the chassis and the mixers are incapable of being used for any service unless the mixers are duly mounted on the chassis, balanced, calibrated, and certified by the vendor. Until such mounting and certification, the capital goods remained incomplete, non-functional, and commercially unusable. Thereafter, engineers carried out mounting of the mixers on the chassis, followed by balancing, alignment, calibration, and installation of ancillary components such as hoppers, ladders, and safety fixtures. The assembled equipment was checked by the engineers, where they conducted final commissioning and issued commissioning / commencement reports. Unless and until such commissioning reports were issued, the machines had no operational value and could not be deployed for providing any service. The machines were admittedly commissioned and became operational only after 16.05.2008. Accordingly, in the present case, the appellant has availed the CENVAT Credit only after the taxable service of ‘supply of tangible goods for use’ came into effect from 16.05.2008. Thus, we observe that the case-law cited by the Ld. Authorized Representative of the Revenue are distinguishable on facts.

Thus, we hold that the appellant has rightly availed the CENVAT Credit on capital goods in the month of June, 2008 and therefore, the impugned order denying the CENVAT Credit on capital goods as availed by the appellant is legally unsustainable.

Since the demand for recovery of credit raised against the appellant does not survive, the question of demanding interest or imposing penalty thereon does not arise. Accordingly, the said demands are also set aside.

In the result, we set aside the impugned order and allow the appeal, with consequential relief, if any, as per law.

Excess availment of Cenvat credit - Compliance with remand directions - Scope of show cause notice - Extended period of limitation - Penalty for suppression or mis-declaration -Non-payment of service tax on the value of material supplied free of cost by the service recipient - HELD THAT:- It is observed that the allegation was solely based upon the noticed difference of Rs.30,05,484/- between the closing balance and credit for the month of September 2009 and the opening balance of credit for the month of October 2009 in the appellant’s ST-3 returns. It is observed that since beginning i.e. from the stage of reply to the audit memo dated 13.09.2023 and even in the reply dated 13.09.2023, the appellant had pleaded the inadvertent error while recording the correct figures of Cenvat credit availed and utilized during the period from April 2009 to September 2009 in the ST-3 returns due to which the closing balance of credit for the month of September 2009 stood at Rs.64,97,643/- whereas the opening balance of credit for October 2009 was correctly recorded as Rs.95,03,124/-. It is the amount which is also appearing in the Cenvat credit register.

The plea of the inadvertent error while recording the closing balance of September 2009 has not been discussed properly despite availability of all the relevant documents. The Commissioner is rather observed to have gone to additional findings based on new allegation of availment of 100% credit on capital goods which was not the allegation in the show cause notice. The findings are therefore held to be beyond the scope of show cause notice and are thus liable to be set aside. I draw my support from the decision of Hon’ble Supreme Court in the case of Ballarpur Industries Ltd. [2007 (8) TMI 10 - SUPREME COURT] and the decision of this Tribunal in the case of Delhi Duty Free Services Pvt. Ltd. [2019 (8) TMI 1489 - CESTAT NEW DELHI]

Invokability of extended period of limitation. - It is observed that there is no iota of evidence produced by the department about any positive act of alleged suppression or mis-declaration of fact on part of the appellant. The show cause notice was issued based on appellant’s own records. There is no evidence that the pleaded inadvertent error had any mala fide intent. It is accordingly held that the extended period has wrongly been invoked. Penalty is also has wrongly been imposed.

The decisions relied upon by the appellant are referred. I draw my support from the decision of Hon’ble Supreme Court in the case of Collector of Central Excise Vs. Chemphar Drugs and Liniments [1989 (2) TMI 116 - SUPREME COURT], wherein it is held that extended period is applicable only when something positive other than mere in action or failure on the part of the manufacture is proved. Conscious and deliberate withholding of the information by manufacturer is necessary for invoking the extended period. If the department had full knowledge or the manufacturer had reasonable belief that he is not required to give a particular information, only normal period of limitation i.e. one year is applicable.

Thus, the order under challenge is set aside and the appeal is allowed.

Principles of natural justice - right to cross-examination - admissibility of statements u/s 9D(1) of the Central Excise Act - reliance on statements recorded during investigation - clubbing of clearances - remand for fresh consideration - Mutuality of interest - HELD THAT:- As regards the clubbing of the sale among the units, the learned Counsel submits that each of the unit is independent with separate premises, manpower, registration numbers with department of Industries & Commerce Punjab, VAT/Sales Tax and Income Tax PAN numbers; also, each of the three units has separate brand names, bank accounts, balance sheets, ledger accounts of purchase/sale, electricity meters and bill payment records; also, their returns are assessed to taxes independently. He further submits that there are no financial flow backs, no loans or advances and there was no mutuality of interest; in fact, there was a competition among these units; but the Adjudicating Authority has misinterpreted and overlooked all the aspects with intent to confirm the demand and impose penalty.

We find that the entire case is built on the basis of search made by the Preventive Officers of the department on 14.12.2012 at the premises of the Appellants, as well as on the statements of Sh. Avtar Singh, Sh. Gurjeet Singh, Sh. Jatinder Singh and other employees of the firms. On the basis of the statements made by the above persons, the show cause notice was issued. We also find that the Appellants filed their replies to the show cause notice and strongly contested the allegations made against them.

Since, in this case, the Appellants right to cross-examination has been seriously affected by not granting them the cross-examination, therefore, we are of the considered view that the impugned order is liable to be set aside.

We are of the considered opinion that the impugned order is liable to be set aside only on violation of principle of natural justice for non-grating the examination/cross-examination; accordingly, without going into the other issues, we set aside the impugned order and remand the matter back to the learned Adjudicating Authority with the direction to provide the opportunity of cross-examination of the relevant witnesses and officials whose statements have been relied upon to make a case against the Appellants, and then decide the matter within a period of three months from the date of receipt of certified copy of this order.

In result, the appeals are disposed of by way of remand.

Entitlement to credit on the eligible inputs utilized in the generation of electricity - used in or in relation to manufacture of final products within the factory of production - Res judicata in tax matters -reversal of CENVAT credit for electricity wheeled out/cleared to the grid - sale/supply/barter as transfer of possession for valuable consideration - extended period of limitation and penalty for suppression/fraud -HELD THAT:- A reading of the provisions of the Electricity Act and the correspondence entered in to by the appellants with the HSEB/DHBVNL, gives to understand that the appellants were forbidden to sell the electricity to others. It does not in any way conclude that the supply to grid does not amount to sale under any other Act. We are of the considered opinion that the term ‘sale’ is to be understood in the context of the Central Excise Act or Sale Tax Act, GST Act etc. as applicable to goods. It is not denied that Electricity is goods. As per our discussion as above, transfer of goods for a consideration constitutes a sale.

Having found that the supply of the entire electricity generated by the appellant to the grid of HSEB/DHBVNL constitutes a sale, we now turn our attention to the admissibility of Cenvat Credit. We find that the legal position as far as the definition of inputs is concerned, the same was as follows over the years.

We find that though the appellants contend that the appellant that the credit has been availed on the goods “used as fuel” “within the factory of production”, there is no denying that the same are not “used in the manufacture of final products”.

It is a settled proposition of the scheme of Modvat/Cenvat that the credit is always associated with the goods which suffered duty. Having concluded that the appellants have sold the entire electricity produced by them to the grid and that the electricity produced/ generated by them using inputs on which credit was availed was not utilised by them in the factory for production of excisable goods, we conclude that the appellants are not entitled to the Cenvat credit on the fuel used in the generation of such electricity which was entirely exported/ supplied/ fed to the grid of State Electricity Board, notwithstanding the averment that similar or more quantity of stable power was obtained from the Grid of HSEB/DHBVNL.

We are of the considered opinion that the underlying principle enunciated by the Hon’ble Apex Court, in the case of Maruti Suzuki & ors [2009 (8) TMI 14 - SUPREME COURT], is that the inputs should be used in the factory of production. We find that otherwise, Hon’ble Supreme Court could not have held that the appellants therein, are not eligible to avail CENVAT credit, on the inputs contained in the amount of electricity that was transferred/sold to other units, colony or to the grid. Therefore, the only logical conclusion that one can arrive, in view of the judgments mentioned above, is that credit on inputs is available only to the extent the electricity produced and utilized in the factory of production and not on the portion of electricity transferred/sold to the grid.

Limitation - HELD THAT:- We find that the appellants submit that the demand in respect of the Show Cause Notice dated 30.12.2003 is time-barred as all the relevant facts were known to the department, and the assessee acted under a bona fide interpretation of the law, the extended limitation cannot be invoked.

We are of the considered opinion that there were reasons for the appellants to entertain a bona fide belief. Moreover, we find that no reliable evidence of suppression of facts, willful misstatement, fraud, or collusion with an intent to evade duty, is present in the case. We find that in similar set of circumstances, Hon’ble apex Court, deciding the case of Gujarat Narmada Fertilizers [2009 (8) TMI 15 - SUPREME COURT] remanded the case back to the tribunal holding that litigation on interpretation of CENVAT Credit Rules has arisen on account of various conflicting decisions given by the various Benches of CESTAT, the reason being that the Rules have not been properly drafted. In the circumstances, we are of the view that in this batch of cases no penalty is leviable. Therefore, we conclude that in the present case, the invocation of the extended period of limitation period is not sustainable.

Thus, demand raised by Show Cause Notice is set aside; all penalties are also set aside; Rest of the order is upheld. Thus, the appeal is partly allowed.

Interest on refund - Refund of amounts deposited during investigation - Interest u/s 11BB - Pre-deposit u/s 35F - Unlawful retention of revenue deposits - Compensation by way of interest at 12% per annum - Article 300A - protection of property - Whether interest is liable to be paid on the sanctioned amount of refund in accordance with provisions of Section 11BB of the Central Excise Act, 1944 or otherwise - HELD THAT:- In the present case, it is beyond doubt that amount was deposited without any self-assessment or without any order of the proper officer. The amount deposited during investigation is of course not a deposit towards any duty but only an amount deposited by the assessee to avoid harassment by the investigating officers. When amount deposited by the Appellant is not duty, there is no legitimacy to apply provisions of Section 11BB for payment of interest. So, the deposit made by the Appellant is to be treated as an amount illegally retained by the Department.

Already held that amount deposited was neither duty nor any pre-deposit for filing of appeal. The amount was deposited during the investigation and its refund became due when SCNs issued for demand were quashed by the Hon’ble Court. So, the issue regarding payment of interest would not be covered under Section 11BB of the Central Excise Act, 1944 as held by the Commissioner (Appeals).

In the case of M/s Jai Bhawani Concast Pvt. Ltd. [2022 (9) TMI 1281 - CESTAT NEW DELHI] the Tribunal in its decision while holding that the refund of amount deposited during investigation and payment of interest thereon, the Appellant is entitled to interest on the full amount of deposit from the date of deposit till the date of refund @12%. In view of the ratio of above judgments, interest is required to be paid on the amount of refund sanctioned with effect from date of deposit of the amount till date of sanction @12%.

Thus, modify the impugned Order-in-Appeal and the Adjudicating Authority is directed to pay interest @12% on the sanctioned amount for the period as provided under Section 11BB of the Central Excise Act.

Appeal filed by the Appellant is allowed with consequential relief.

Place of removal - input service - Cenvat credit on GTA service for outward transportation - FOR destination basis - transfer of ownership and risk during transit - admissibility of Cenvat credit where freight is included in assessable value - Whether the appellant is entitled to avail Cenvat credit of service tax paid on GTA service used for outward transportation of finished goods from the factory gate up to the customer’s premises when the sale is on FOR destination basis. - HELD THAT:- It is not disputed by Revenue that the sales were on FOR destination basis. As per the invoices produced it is clear that the freight element was included in the sale value and the excise duty was discharged on the value inclusive of freight. The freight charges borne by the appellant has also not been disputed.

Recently the same issue was examined by this Tribunal in the matter of U.B. Stainless Ltd. vs. Commr. CGST & CE; [2025 (1) TMI 1319 - CESTAT MUMBAI] wherein after analyzing the law laid down by the Hon’ble Supreme Court in Ultratech Cement Ltd. [2018 (2) TMI 117 - SUPREME COURT] and the circulars issued by CBEC from time to time upto 2018, it was held where the sale is on FOR destination basis and ownership and risk remain with the seller till delivery, the buyer’s premises constitutes the ‘place of removal’ and not the factory gate. Consequently, the credit of service tax paid on GTA service for outward transportation upto such place of removal was held to be admissible.

It is also pertinent to note that none of the aforesaid decisions (supra) have been stayed or set aside by any higher judicial forum.

Thus, the customer’s premises constitutes the ‘place of removal’. Accordingly, the GTA service availed for outward transportation of finished goods up to the customer’s premises qualifies as ‘input service’ under Rule 2(l) ibid. The appellant has therefore rightly availed Cenvat credit of service tax paid on GTA services.

Accordingly the impugned orders are set aside by allowing the appeals with consequential relief if any, in accordance with law.

Unjust enrichment - show cause notice u/s 11A - finality of tribunal order - chartered accountant's certificate as evidence - refund of duty on discounts and credit notes -Whether the bar of unjust enrichment is satisfied in the present cases or not. -HELD THAT:- It is not in dispute that the appellant had reduced the price by credit note or cash discount to its dealers.

A perusal of the decision rendered by the Tribunal on 04.06.2015 [2018 (10) TMI 388 - CESTAT NEW DELHI], in the matter of the appellant shows that the period of dispute involved was from October 2011 to June 2012. The Commissioner (Appeals) had allowed cash discount to the appellant but had rejected the discount towards quantity. Both the appellant and the department filed appeals before the Tribunal. The appeal filed by the appellant was allowed while the appeal filed by the department was rejected. In view of the said decision of the Tribunal, the appellant would be entitled to refund of the cash discount. It is seen that though the Commissioner (Appeals), by order dated 17.07.2014, had allowed the appeal filed by the appellant for refund of cash discount but still the show cause notice was issued under section 11A of the Central Excise Act, 1944 [the Central Excise Act] for recovery of the amount. It is also seen that ultimately, the Tribunal by its decision dated 04.06.2015 dismissed the appeal filed by the department.

The issue, therefore, that would arise for consideration is whether a show cause notice could be issued under section 11A treating the amount paid to the appellant as erroneously refunded.

This issue was examined by this Tribunal in Excise Appeal Bridgestone India Pvt Ltd vs. CGST & CE, Ujjain [2019 (3) TMI 849 - CESTAT NEW DELHI] and Excise Appeal M/s. Bridgestone India Private Limited vs. Commissioner, CGST & Central Excise, Ujjain [2022 (9) TMI 675 - CESTAT NEW DELHI].

In the present case also, the order passed by the Commissioner (Appeals) granting refund to the appellant on the cash discount attained finality upon dismissal of the appeal by the Tribunal. It is pointed out by learned authorized representative appearing for the department that the department has filed appeals before the High Court of Madhya Pradesh against the aforesaid two orders passed by the Tribunal but stay has not been granted by the High Court.

In any view of the matter, the decision date 04.06.2015 passed by the Tribunal has attained finality and, therefore, the appellant would clearly be entitled to refund of the cash discount and the quantity discount.

The issue involved in Excise Appeal filed by the appellant would also have to be decided in favour of the appellant as the appellant would clearly be entitled to refund of the amount in terms of the decisions dated 04.06.2015 and 30.07.2018 of the Tribunal.

As noticed above, has already been decided by the Tribunal in the aforesaid two decisions dated 04.06.2015 and 30.07.2018. Though these two decisions were placed before the Commissioner (Appeals) in the Written Submissions filed by the appellant but they have not been examined by the Commissioner (Appeals). The Commissioner (Appeals) has also rejected the Certificates of the Chartered Accountant filed by the appellant to show that the incidence of duty had not been passed on to the customers and also affidavits of the dealers to show that the incidence of duty had not been passed on to the customers but these two documents have been rejected by the Commissioner (Appeals).

The Commissioner (Appeals), therefore, committed an error in rejecting the Certificates issued by the Chartered Accountant to show that the incidence of duty had not been passed on to the customers as no evidence to the contrary was produced by the department.

The appellant would, therefore, clearly be entitled to refund in these six appeals.

Adjustment of excess duty against short payment - valuation under Rule 8 based on CAS-4 - annual CAS-4 costing as basis for interunit transfer valuation - provisional assessment and subsequent reconciliation - quantification of differential duty on overall annual basis - HELD THAT:- While paying duty on the basis of actual CAS-4 certificate, they adjusted the excess paid duty towards short paid amount and then, paid the balance duty amount. We find that the issue of adjustment of excess paid duty in certain months with short payment of excise duty in some other months in the case of appellant has already been decided by this Tribunal vide Final Order [2025 (12) TMI 363 - CESTAT AHMEDABAD]. Therefore, the issue is no more res Integra.

Thus, we allow the appeal filed by the appellant and set aside the impugned order with consequential relief, if any.

Appeal allowed.

Statutory pre-deposit requirement u/s 33(5) of the Haryana Value Added Tax Act, 2003 - no inherent discretion in the appellate authority to waive pre-deposit - bank guarantee or adequate security as alternative to cash pre-deposit - financial hardship as ground for waiver of pre-deposit - reliance on precedent subject to facts and circumstances of each case - HELD THAT:- It is pertinent to note that in terms of Section 33(5) of Act 2003, it is open to the assessee to submit even a bank guarantee or adequate security to the satisfaction of assessing Authority in the manner prescribed for the amount in dispute. Petitioner had earlier deposited security before First Appellate Authority but the same could not be verified.

In the given factual matrix, it is not possible to conclusively hold in present proceedings that financial status of the petitioner is not sound to the extent that it is even unable to furnish requisite security in terms of Section 33(5) of Act 2003. Reliance by petitioner on judgments of Hon’ble the Supreme Court in Indu Nissan Oxo Chemicals Ind. Ltd. [2007 (12) TMI 220 - SUPREME COURT] is of no avail as it is specifically held therein that there has to be due consideration of facts and circumstances of each individual case.

It is recorded in order dated 01.11.2020, that petitioner was then ready to deposit 10% of total demand in terms of order of appellate Authority. Accordingly, writ petition was disposed of while giving liberty to petitioner to file an appeal within a period of two weeks with deposit of 10% of total demand. In the present case, as has been noted in the foregoing paras, we are unable to record a satisfaction in respect to undue financial hardship being faced by petitioner in the given factual matrix. We also do not find any merit in the argument raised by learned counsel for petitioner that merits of the matters should be considered which indicate that pre-deposit in this matter is uncalled for.

No other argument has been addressed.

Liquidated damages for delay - public utility exception to Section 74 of the Indian Contract Act, 1872 - burden on breaching party to prove absence of loss where public interest project is involved - limited power of modification under Section 34 of the Arbitration and Conciliation Act, 1996 - scope of appellate interference under Section 37 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- The modification of the award so as to enhance the amount of reasonable compensation by the Section 34 Court was a permissible exercise when viewed in the context of the law laid down in Gayatri Balasamy [2025 (5) TMI 566 - SUPREME COURT (LB)] The modification is in exercise of jurisdiction under Section 34 of the Act of 1996 without undertaking any examination of the merits of the dispute. To put it plainly, the modification is only with a view to apply Clause 4.6.2 of the PPA to the facts of the case which exercise has also been approved by the Section 37 Court. We, therefore, do not find that on this count, the judgment of the Section 34 Court suffers from any jurisdictional error.

Having agreed to incorporate Clause 4.6 in the PPA, it is clear that the rights of the parties ought to be determined bearing in mind the terms agreed and SEL would not be justified in contending that NVVNL had failed to indicate the exact loss suffered by it due to the delay in commissioning of the project. The learned Single Judge as well as the Division Bench have in our view rightly approached this aspect of the matter and have held that NVVNL in terms of Clause 4.6 of the PPA is entitled to reasonable compensation. We, therefore, do not find any reason whatsoever to take a different view of the matter in this regard.

Determination of the amount of reasonable compensation - In our view, the Division Bench exceeded its jurisdiction under Section 37 of the Act of 1996 when it proceeded to re-work and re-calculate the amount of reasonable compensation to which NVVNL was entitled. The learned Single Judge having determined the amount of reasonable compensation by relying upon Clause 4.6 of the PPA and thereafter awarding 50% of the amount so determined, in the absence of this determination being shown to be beyond the terms of Clause 4.6 of the PPA or arbitrary or perverse, no interference with such determination was called for in exercise of jurisdiction under Section 37 of the Act of 1996.

In fact, the Division Bench has not recorded any finding that such determination of reasonable compensation by the learned Single Judge suffered from arbitrariness or that it travelled beyond what was provided by Clause 4.6 of the PPA. Having held in paragraph 28 of the impugned judgment that it was in agreement with the view of the learned Single Judge of the need to balance equities and compute a fair and reasonable amount of compensation coupled with the fact that the majority award granting a paltry amount of ₹1.2 crores was held to be contrary to the fundamental policy of Indian law thus requiring interference, the further exercise undertaken by it in modifying the amount of reasonable compensation was not justified in the facts of the case.

The modification in the amount of reasonable compensation by the Division Bench is merely a substitution of its view in place of the plausible view taken by the learned Single Judge. Such course of taking a different view of the same matter from the one taken under Section 34 of the Act of 1996 would be beyond the scope of Section 37 of the Act of 1996. As held in AC Chokshi Share Broker Private Limited vs. Jatin Pratap Desai and another [2025 (2) TMI 414 - SUPREME COURT] to which one of us (P.S. Narasimha J) was a party, the Court under Section 37 must only determine whether the Section 34 Court had exercised its jurisdiction properly and rightly, without exceeding its scope. To that extent, we find that the Division Bench of the High Court erred in interfering with the judgment of the learned Single Judge.

Thus, we are of the view that the determination of the amount of reasonable compensation by the learned Single Judge having been undertaken in terms of Clause 4.6 of the PPA and further discretion having been exercised by awarding 50% of such amount as liquidated damages, the Division Bench was not justified in modifying the said decision. Accordingly, the judgment of the Division Bench to that extent stands set aside. The judgment of the learned Single Judge in OMP stands restored. Civil Appeal preferred by NVVNL, thus, stands allowed and Civil Appeal preferred by SEL stands dismissed.