TaxTMI Updates e-Newsletter
Mar 20,2026

Condonation of delay - Availability of alternative remedy before tribunal - limitation bar - forum availability. - HELD THAT:- Though, we do not find any error in the view taken High Court [2026 (2) TMI 103 - MADHYA PRADES HIGH COURT] that the writ petition is liable to be dismissed on ground of availability of alternative remedy of an appeal before the GST Tribunal, we deem it appropriate to direct that if the appeal is presented before the Appellate Authority (GST Tribunal) by 1st April, 2026, the same shall not be dismissed on ground of limitation.

Subject to above, the special leave petition is disposed of.

Pending application(s), if any, shall stand disposed of.

Final Conclusion: The writ petition is dismissed due to the availability of an alternative remedy before the GST Tribunal; however, the Court directed that an appeal presented to the Tribunal within the period fixed by the Court shall not be dismissed on limitation grounds.

Validity of exercise discretionary writ jurisdiction under Article 226 despite delay and availability of alternate remedy - cancellation of GST registration - sufficient cause - delay in instituting statutory appeal - violation of principles of natural justice in adjudication.

Exercise of extraordinary writ jurisdiction where alternate statutory remedy exists - HELD THAT:- The Hon’ble Supreme Court, in the case of Rikhab Chand Jain [2025 (11) TMI 1377 - SUPREME COURT], by referring to the majority view in a previous Constitution Bench in the case of A.V. Venkateswaran, Collector of Customs, Bombay Vs. Ramchand Sobhraj Wadhwani [1961 (4) TMI 83 - SUPREME COURT], has held that if a petitioner has disabled himself from availing himself of the statutory remedy by his own fault in not doing so within the prescribed time, he cannot certainly be permitted to urge that as a ground for the court dealing with his petition under Article 226 to exercise its discretion in his favour. In essence, the Court believed that once a petitioner has, due to his own fault, disabled himself from availing a statutory remedy, the discretionary remedy under Article 226 may not be available.

The Court held that the petitioner did not show sufficient cause for not availing the statutory appeal remedy within the prescribed limitation. The adjudication order was dated 07.04.2022 and the petitioner's registration was cancelled on 29.05.2022 (w.e.f. 31.03.2022), but nothing prevented the petitioner from instituting an appeal between 07.04.2022 and 29.05.2022. The petitioner failed to establish that it was unaware of the impugned order or that cancellation of registration would have precluded prosecution of an appeal. Although writ jurisdiction under Article 226 has no fixed limitation, the Court must be invoked with utmost expedition and ordinarily will not be used to bypass an efficacious statutory remedy; where the petitioner by its own fault disabled itself from availing the statutory remedy, discretionary relief is generally unavailable. Applying these principles and the authorities cited, the Court declined to exercise writ jurisdiction to assist the petitioner in overcoming the statutory limitation. [Paras 10, 11, 15, 16, 17]

Petitioner failed to demonstrate sufficient cause for delay; High Court refused to exercise extraordinary writ jurisdiction to bypass the statutory appeal remedy.

Violation of principles of natural justice in adjudication - HELD THAT: - The Court found that the petitioner did not establish that the adjudication was ex parte for lack of service or hearing. Show cause notices had been issued and opportunities were granted, but the petitioner did not avail them or put forward any merits or probable defence. The bare assertion of non-service was contradicted by the record and, in any event, where a party does not respond to show cause proceedings and opportunities afforded, the resulting order cannot be successfully impugned as ex parte. [Paras 4, 5, 12]

Claim of breach of natural justice rejected; adjudication order was not set aside on that ground.

Final Conclusion: The petition was dismissed: the petitioner failed to show sufficient cause to bypass the alternate statutory appeal remedy and failed to establish a breach of natural justice in the adjudication, so the High Court declined to exercise its discretionary writ jurisdiction.

Validity of ex-parte demand order and related show cause proceedings - non-compliance with the requirements of effective communication - denial of opportunity of personal hearing - violation of principles of natural justice.

Failure to provide effective notice and opportunity of hearing violates principles of natural justice - HELD THAT:- Having regards to the facts and circumstances of the case, the impugned ex-parte Demand Order bearing Reference No. ZD100424037900X dated 29.04.2024 along with the summary order in form GST DRC-07 dated 29.04.2024 (Annexure P/1 series) issued by the Deputy Commissioner of State Tax, Katihar Circle, Katihar are quashed. The respondents are hereby directed to undertake fresh steps strictly in accordance with the provisions contained under the Bihar Goods and Services Tax Act, 2017 and after providing an adequate opportunity of hearing to the petitioner, the final order shall be passed. Such exercise shall be completed within a period of six months from the date of receipt/production of a copy of this order.

It is needless to state that in case the petitioner does not co-operate with the concerned officials, the respondents shall be free to proceed ex-parte.

Final Conclusion: The writ petition is allowed: the ex-parte demand order for April 2018 - March 2019 is quashed and the matter is remitted for fresh adjudication in accordance with the BGST Act with an adequate opportunity of hearing to be provided, to be completed within six months; non-cooperation by the petitioner permits respondents to proceed ex parte.

Entitlement to relief by filing an undertaking and making the pre-deposit in terms of Circular No. 224/18/2024-GST - Availability of procedural remedy - staying recovery of the remaining confirmed demand under sub-section (9) of Section 112.

Alternative mechanism for pre-deposit and stay pending constitution of Appellate Tribunal - HELD THAT:- The Court noted the Central Board of Indirect Taxes and Customs circular laying down a procedure by which a taxpayer may (i) pay an amount equivalent to the statutory pre-deposit through the electronic liability register and (ii) file an undertaking with the jurisdictional proper officer to file an appeal before the Appellate Tribunal when it comes into operation, whereupon recovery of the remaining confirmed demand would stand stayed under the statutory scheme. Having found those guidelines applicable and there being explicit instructions for recovery in such cases, the Court concluded that no substantive adjudication remained necessary and granted the petitioner liberty to comply with the circular and statutory pre-deposit requirement. The Court made compliance time-bound and conditioned the stay of recovery upon filing the undertaking and payment of the equivalent pre-deposit within the period specified in the order, failing which the order would cease to have effect. [Paras 5, 6, 10, 11, 12]

Liberty granted to the petitioner to file the prescribed undertaking and make the pre-deposit by following the circular procedure within the time directed; on such compliance recovery shall be stayed as provided under the statute and the circular, and failure to deposit within the stipulated period will render the order ineffective.

Final Conclusion: The writ petition is disposed of by granting the petitioner liberty to invoke the circular procedure: file the required undertaking with the proper officer and make the equivalent pre-deposit within the period directed, whereupon recovery of the remaining demand shall be stayed as provided; the order will lapse if the conditions are not complied with within the specified time.

Series of representations have been submitted to the authorities but of no consequence - Prayer to direct the respondent No.2 to deal with the representation taking note of the documents - release of admitted contractual dues - Interest on delayed payments - statutory exemption from provident fund.

HELD THAT:- The High Court directed the Chief Engineer, Public Works Department, Rewa Zone, to deal with the petitioner's representation (Annexure P/34) by taking into account the documents relied upon by the petitioner (Annexures P/22, P/24 and P/30) and to pass a self-contained speaking order within 90 days from receipt of the certified copy of the order. The Court provided that, if on such consideration the petitioner is found entitled to any amount, payment shall be made together with interest at 6% per annum from the date of entitlement until actual payment, applying the principle in Union of India v. Willowood Chemicals (P) Ltd. The Court expressly refrained from expressing any opinion on the merits of the claims. [Paras 8, 9]

Final Conclusion: The petition is disposed of by directing respondent No.2 to decide the pending representation by a speaking order within 90 days, and if the petitioner is held entitled, to release the amount with interest at 6% per annum; the Court did not adjudicate the merits.

Entitlement to refund of IGST - repeal without saving clause - constitutional validity of Rule 96(10) of the CGST Rules by filing the writ petition - Notification No.20/2024 dated 08.10.2024 of Rule 96(10) and Rule 89(4B) - prospective omission applicable to pending proceedings - lapse of pending proceedings - absence of alternate appellate remedy.

Omission of a statutory rule without a saving clause applies to pending proceedings - Effect of Notification No.20/2024 omitting Rule 96(10) of the CGST Rules on pending proceedings and on the petitioners' entitlement to IGST refund claims - HELD THAT:- The Court applied the earlier decisions considering Notification No.20/2024 which omitted Rule 96(10) without any saving clause and held that such omission operates prospectively and also applies to pending proceedings which have not attained finality. Consequently, proceedings founded on the omitted rule, including undisposed show-cause notices and orders not constituting "transactions past and closed", stand lapsed; petitioners whose proceedings were pending are therefore entitled to maintain refund claims for IGST paid on export of goods. The Court also recorded that where the appellate tribunal is not constituted and no alternative remedy exists, orders not finally adjudicated cannot be treated as final. The Court directed processing or restoration and further processing of refund applications within the timeframe prescribed in the impugned precedents. [Paras 7, 9]

Notification No.20/2024 omitting Rule 96(10) applies to pending non-final proceedings and results in lapse of proceedings based on the omitted rule; the impugned orders are quashed and the petitioners are entitled to have their refund claims processed (with restoration and processing directed where necessary).

Final Conclusion: The writ petitions are allowed: the impugned orders are quashed in view of the omission of Rule 96(10) which applies to pending non-final proceedings, and petitioners are entitled to have their IGST refund claims processed (with the consequent directions for restoration and processing).

Taxability of vouchers - time of supply - Statutory definition of "voucher" u/s 2(118) - definition of "money" u/s 2(75) - Board's Circular No. 243/37/2024-GST - Demand of being confirmed against the petitioner under the provisions of Section 73 of CGST Act, 2017 read with the corresponding section of MGST Act, 2017.

Taxability of vouchers - HELD THAT:- The Court noted the Central Board's clarification that a voucher, whether or not a prepaid instrument recognised by the RBI, is an instrument creating an obligation on the supplier to accept it as consideration or part consideration, and that transactions in vouchers themselves cannot be considered as supply of goods or services; only the supply of the underlying goods or services for which vouchers are used as consideration may be taxable. The impugned order's finding that sale and purchase of vouchers fall within the scope of supply was held not to be in consonance with that clarification and the legal position discussed in the judgment. The Court treated the Board's circular and the legal position on vouchers as material for re-examination of the confirmed demand. [Paras 7, 8, 9, 10]

The Court held that the impugned order's treatment of voucher transactions as taxable supplies required fresh consideration in light of the Board's clarification and the legal position, and therefore the matter must be reexamined by respondent no. 2.

Time of supply of vouchers - HELD THAT:- Relying on the circular's explanation that distributors/sub-distributors/agents acting on a principal-agency basis do not own vouchers and are liable to GST on the commission/fee (or similar amount) charged to the voucher issuer, the Court observed that, prima facie, the petitioner's liability, insofar as commission is concerned, would be to pay GST only on commission/fee and not on the entire turnover claimed in the demand. The Court directed that this aspect be examined afresh by respondent no. 2. [Paras 7, 10]

The Court directed respondent no. 2 to re-examine whether only the commission/fee is taxable in the petitioner's case and not the entire turnover, and to decide afresh after hearing the petitioner.

The Court noted the deletion of sub-section (4) of Section 12 by the Finance Act, 2025 (which earlier provided that time of supply of vouchers would be the date of issue if supply was identifiable, or date of redemption otherwise). This legislative change was recorded as a material aspect affecting the legal position on time of supply for vouchers and factored into the Court's decision to remit the matter for fresh consideration. [Paras 11, 12]

The Court recorded the amendment and treated it as a relevant factor, directing reconsideration of the demand in light of the changed statutory position.

Remand for de novo consideration after granting opportunity of hearing - HELD THAT:- The Court found that the impugned order confirming the specified demand was not consonant with the legal clarifications and statutory change noted, and therefore quashed that portion of the order. The matter was remitted to respondent no. 2 for de novo consideration and an appropriate order in accordance with law after granting the petitioner an opportunity to file an additional reply and to be heard. Timelines were prescribed for filing the additional reply and for respondent no. 2 to fix a hearing date and endeavour to pass a fresh order. [Paras 12, 13, 14]

The Court quashed and set aside the portion of the impugned order confirming the demand in question and remanded the proceedings to respondent no. 2 for fresh consideration after hearing the petitioner.

Final Conclusion: The writ petition was disposed by quashing and setting aside the portion of the impugned order confirming the specified demand; the matter is remanded to respondent no. 2 for de novo consideration in accordance with law after granting the petitioner an opportunity of hearing, with directions permitting the petitioner to file an additional reply and prescribing timelines for hearing and decision.

Maintainability of writ petition filed during ongoing statutory proceedings arising from search and seizure - seeking a declaration that search and seizure proceedings carried out on 18.10.2024 and 19.102024 be declared illegal, null and void and also quash all the consequential proceedings.

Maintainability of writ petition filed during ongoing statutory proceedings arising from search and seizure - HELD THAT:- The petitions were held premature because the Department had completed the investigative process and issued show-cause notices under the CGST Act; petitioners are required to participate in the statutory proceedings and may challenge any final order thereafter. The Court applied the principle of judicial restraint, observing that courts should not substitute their view for the administrative process where an alternative statutory remedy exists. [Paras 13, 18]

Writ petitions dismissed as premature; petitioners must pursue the statutory remedy and may challenge the Order-in-Original if aggrieved.

Justiciability of reasons to believe subject to Wednesbury reasonableness - HELD THAT:- The Court held that while the recorded belief is justiciable, its sufficiency cannot be examined as a matter of rehearing of administrative judgment; review is confined by the Wednesbury principle of reasonableness and judicial restraint, and courts will not act as appellate authorities to re-appreciate the administrative decision-making. [Paras 18]

Court will not probe the adequacy of reasons to believe beyond assessing Wednesbury unreasonableness; no interference at this stage.

Provisional release of seized goods subject to production of valid documents - HELD THAT:- Respondents indicated readiness to release seized goods upon production of valid bills, challans or receipts; petitioners were referred to the statutory remedy of provisional release under Section 67(6) of the CGST Act read with Rule 140(1) of the CGST Rules and liberty to furnish a bond. The petitioners had not produced the requisite documents to obtain release. [Paras 13, 16, 18]

Goods may be released on production of valid documents or by following the provisional release procedure; no relief granted in writ petition for immediate release.

Final Conclusion: The writ petitions are dismissed as premature; the petitioners must participate in the statutory proceedings, may seek provisional release of seized goods through the prescribed mechanism, and challenge any final adjudication under the CGST Act if aggrieved.

Cancellation of registration-Non-application of mind - failure to record reasons and findings - Denial of opportunity and breach of appellate procedure - Remand for fresh decision after affording opportunity to be heard.

Non-application of mind in administrative - Cancellation of registration - HELD THAT:- The Court found that the show cause notice and the cancellation order merely quoted the statutory provision and did not record any findings or supporting material on the basis of which cancellation was effected. The State conceded that the impugned documents did not reflect reasons and offered remand. The absence of articulated reasons and findings amounted to non-application of mind, rendering the proceedings unsustainable in law and requiring fresh consideration. [Paras 6, 7, 8]

The impugned show cause notice and the order of cancellation are set aside and the matter is remanded to the proper officer to pass a fresh order after affording opportunity to submit a reply and a personal hearing.

Denial of opportunity and breach of appellate procedure - HELD THAT:- The appellate authority sought para-wise remarks from the assessing officer and proceeded without giving the petitioner notice of those remarks or an opportunity to rebut them. The Court recorded that the petitioner had appeared before the officer but was not furnished the remarks to controvert, constituting a procedural defect in the appellate process and denial of an effective hearing. [Paras 7, 8]

The appellate order confirming cancellation is set aside and the appeal is remitted for fresh disposal after providing the petitioner the para-wise remarks and an opportunity to controvert them.

Final Conclusion: The show cause notice, the cancellation order and the appellate order are set aside and the matters are remitted for fresh consideration; the proper officer and the appellate authority shall decide afresh in accordance with law within the time directed by the Court after affording the petitioner an opportunity to file a reply and a personal hearing.

Seizure ofdocuments covering multiple tax periods, some original files of which are stated to be missing from departmental custody while scanned copies have been provided - right to fair opportunity of hearing in tax adjudication.

Whether the revenue may rely upon seized documents whose originals are missing in adjudication proceedings and the consequences for the assessee's opportunity to reply and be heard - HELD THAT:- The Court accepted the statement on instructions by the learned Special Government Pleader that the department will not rely upon those seized documents whose originals are not available. On that basis the grievance that adjudication for the listed tax periods would proceed by reliance on missing originals was held to be addressed. The Court directed that adjudication may proceed on the basis of other available materials with the department, while ensuring the petitioner is afforded an opportunity to file replies and be heard in accordance with the relevant provisions of the Telangana Goods and Services Tax Act, 2017. The determination rests on the departmental undertaking and the requirement that the assessee be given a fair opportunity of hearing; there is no adjudication on the merits of the seized material itself. [Paras 5, 6]

The departmental undertaking that missing originals will not be relied upon is accepted; adjudication for the specified years may proceed on other available materials subject to the petitioner being given opportunity to reply and be heard under the TGST Act.

Final Conclusion: The writ petition is disposed of on the basis that the department will not rely on seized documents the originals of which are missing; adjudication for 2019-20 to 2023-24 may proceed using other available materials, with the petitioner afforded the statutory opportunity to reply and be heard.

Validity of impugned order passed without the reply to the Show Cause Notice in Form GST DRC-01 - pre-deposit - demand related to disputed input tax credit - Benefit of Circular No.193/15/2023.

Absence of reply in Show Cause Notice - HELD THAT:- Considering the above facts and circumstances and following the consistent view taken by this Court under similar circumstances, the impugned order is quashed and the case is remitted back to the first respondent to pass a fresh order on merits subject to the Petitioner depositing 50% of the disputed tax in cash or from the Petitioner's Electronic Cash Register within a period of thirty (30) days from the date of receipt of a copy of this order, less the amount which is covered by the order of the Appellate Authority dated 16.12.2025 wherein the demand confirmed on account of identical defect by the Assessment order dated amount on 19.12.2024 has been dropped.

Within such time, the Petitioner shall also file a reply to the Show Cause Notice in GST DRC-01 dated 20.05.2024 together with requisite documents to substantiate the case by treating the impugned Order dated 23.08.2024 as an addendum to the Show Cause Notice dated 20.05.2024.

In case the Petitioner complies with the above stipulations, the first 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 if any, shall also stand automatically vacated.

Final Conclusion: The impugned assessment order for Assessment year 2019-2020 is quashed and the matter is remitted for de novo adjudication on merits subject to the petitioner depositing 50% of the disputed tax (adjusted by the amount dropped by the Appellate Authority), filing a reply and documents, with bank attachment to be vacated upon compliance and respondent to give notice before any recovery if petitioner fails to comply.

Application filed under Section 151 of the Code of Civil Procedure, 1908 - seeking compliance of the Order - HELD THAT:- In the opinion of this Court, the Order dated 28.03.2025 does not require any clarification, since the Writ Petition was disposed of in light of the Judgment passed by a Co-ordinate Bench in M/s Jian International versus Commissioner of Delhi Goods and Services Tax [2020 (7) TMI 611 - DELHI HIGH COURT]

Needless to state, it is open for the Applicant to take necessary steps in accordance with law for compliance of the Order dated 28.03.2025.

With the above observations, the Application is disposed of.

Duplication of proceedings and double taxation - discrepancy between Form GSTR-2A and GSTR-3B - failure to afford personal hearing - condition precedent payment.

Duplication of proceedings and double taxation - Earlier assessment order in respect of an issue already adjudicated in a subsequent order is not sustainable and liable to be quashed - HELD THAT:- The Court found that two separate impugned orders were passed for the same issue concerning the difference between Form GSTR-2A and GSTR-3B, resulting in duplication of proceedings and double taxation. Having recorded that the issue was already covered by the earlier order, the Court held the earlier order to be unsustainable in law and liable to be quashed. [Paras 9, 10]

The impugned order dated 28.11.2025 was quashed on the ground of duplication of proceedings leading to double taxation.

Failure to afford personal hearing - remand for fresh consideration conditional on payment - HELD THAT: - The Court recorded that the show cause notice was uploaded on the GST portal and the petitioner stated that they were unaware of the notice and that the original notice was not furnished. The assessment was therefore held to have been confirmed without affording the petitioner a personal hearing. In view of this procedural defect, the Court set aside the subsequent order and directed remand for fresh consideration, subject to the condition of payment of a portion of the disputed tax as a precondition to invoking the remand. [Paras 11, 12]

The impugned order dated 08.12.2025 was set aside and the matter remanded to the assessing authority for fresh consideration after affording personal hearing, on condition that the petitioner pays 25% of the disputed tax amount.

Final Conclusion: The Court quashed the earlier order for duplication and set aside the subsequent order for lack of personal hearing; the matter is remanded for fresh consideration after the petitioner makes the specified conditional payment and is afforded an opportunity to file objections and be heard.

Cancellation of the petitioner's GST registration - restoration - belated filing of returns - non-filing of returns for six months to severe mental stress and physical illness.

Revocation of GST registration cancellation for bona fide incapacity - HELD THAT:- In this case, the GST registration of the petitioner was cancelled by the respondent vide the impugned order dated 08.04.2025. According to the petitioner, due to severe mental stress and physical illness, he was unable to file GST returns for a period of 6 months. Under these circumstances, the GST Registration was cancelled by the petitioner vide impugned order dated 08.04.2025. In such case, the reason assigned by the petitioner, in the considered opinion of this Court, appears to be genuine.

This Court is inclined to revoke the impugned order dated 08.04.2025 passed by the respondent canceling the GST registration of the petitioner. The cancellation of registration is hereby revoked, subject to the fulfillment of the conditions.

Final Conclusion: The High Court revoked the cancellation of the petitioner's GST registration on grounds of genuine incapacity but restored it only subject to directions to enable portal access, to file outstanding returns and pay tax, interest and fees within four weeks, and to prohibit utilisation of ITC until departmental scrutiny and approval; non-compliance will automatically terminate the restoration.

Effective service of notices under the GST framework - obligation to explore alternative modes of service under Section 169(1) of the GST Act - right to personal hearing before confirmatory assessment.

Whether the impugned assessment order could stand where notices were uploaded on the GST portal, the petitioner was unaware of those notices and no personal hearing was afforded before confirmation of the proposals. - HELD THAT:- The Court found that although uploading a show cause notice on the GST portal constitutes a mode of service, in the present case the petitioner was not aware of the uploaded show cause notice and the original was not furnished to him. The order was passed confirming the proposals contained in the show cause notice without affording any opportunity of personal hearing. The absence of personal hearing and effective communication rendered the assessment order unsustainable and warranted setting aside and remittance for fresh consideration so that the petitioner may file reply/objection and be heard before a fresh decision is taken (paras 8, 11).

Impugned assessment order set aside and remanded for fresh consideration after affording the petitioner an opportunity to file reply and to be personally heard.

Obligation to explore alternative modes of service under Section 169(1) of the GST Act - HELD THAT:- The Court held that where there is no response from the taxpayer to notices sent via a particular mode (here, portal upload), the officer should apply mind and explore other modes of service prescribed in Section 169(1), preferably by RPAD, to effectuate meaningful service. Mere repeated reminders by portal alone, without attempting alternative valid modes, may amount to empty formality and will not achieve effective service as intended by the GST Act (paras 9-10). [Paras 9, 10]

Officer directed to explore alternative prescribed modes of service when portal service elicits no response; matter remanded for fresh consideration consistent with this obligation.

Right to personal hearing before confirmatory assessment - HELD THAT: - Having set aside the impugned order, the Court found that the attachment of the petitioner's bank account could not continue. The respondent was directed to lift the attachment and instruct the bank to de-freeze the account immediately upon production of a copy of the order, given that the underlying order has been set aside (para 11). [Paras 11]

Attachment on the petitioner's bank account to be released and account de-frozen upon production of this order.

Final Conclusion: The impugned order is set aside and the matter remitted for fresh consideration; the petitioner is permitted to file reply/objection and be afforded a personal hearing, the respondent must explore other modes of service where portal notices elicit no response, and the bank attachment is directed to be released forthwith upon production of this order.

Limitation on initiation of proceedings u/s 201 against non-residents - application of a reasonable time limit where Parliament prescribed no statutory time bar - Delay filling SLP -

HC held substantial questions of law raised regarding limitation in initiating proceedings u/s 201 against non-residents were answered in Bharti Airtel Ltd. which applied a reasonable time limit where Parliament had not prescribed a statutory time bar

HELD THAT:- This special leave petition is reported to be beyond time by 600 days.

We do not find a satisfactory explanation to condone the delay.

The special leave petition is dismissed on ground of delay.

Challenge to warrant of authorization u/s 132A - Abstention from parallel proceedings where identical issue is pending - HELD THAT:- The Court recorded that the petitioner had raised the identical contention before the Tribunal as an additional ground and that the Tribunal admitted that ground - matter is the subject of further appeal pending before the High Court of Gujarat.

Because the issue relating to the validity of the requisition/authorization dated 13/3/2014 is already under adjudication in the pending appeal, the High Court declined to entertain a fresh writ petition on the same controversy and dismissed the petition, while granting liberty to seek framing of an additional substantial question of law in the pending appeal. [Paras 5, 6, 7, 8, 9]

Writ petition dismissed as the issue is pending in appeal before another High Court - liberty granted to apply for framing an additional substantial question of law in that appeal.

Final Conclusion: The petition challenging the warrant of authorization dated 13/3/2014 was dismissed on the ground that the same issue is already pending in appeal before another High Court the petitioner was permitted to seek framing of an additional substantial question of law in that appeal.

Condonation of delay under Section 119(2)(b) - genuine hardship as basis for condonation - delay of 31 days in filing Form No.10B for AY 2020-2021 - eligible reasons of delay - HELD THAT: - The Court accepted the petitioner's explanation of a bona-fide 31-day delay, noting that AY 2020-21 was the first year the audit-report due date was preponed by one month and that the filing was affected by disruptions during the COVID-19 lockdown.

The bench observed that substantial justice and genuine hardship are relevant considerations u/s 119(2)(b) and relied on precedents recognising a liberal, justice-oriented approach to condonation of delay in similar tax-audit filing contexts.

Having found the delay short, explained and bona-fide, and that denial would cause genuine hardship by leading to loss of exemption, the Court exercised its discretion to condone the delay and directed that the returns be reprocessed on the basis that Form 10B was filed within time. [Paras 13, 14, 15, 16, 17]

Delay of 31 days in filing Form No.10B for AY 2020-2021 condoned; impugned order under Section 119(2)(b) quashed and returns to be reprocessed treating Form 10B as filed within time.

Final Conclusion: The writ petition is allowed insofar as the delay in filing Form No.10B for AY 2020-2021 is condoned; the impugned order is quashed and the respondent is directed to reprocess the petitioner's returns treating Form 10B as filed within time.

Assessment u/s 153A - Abatement of assessment proceedings on search - effect of block assessment under Section 153A - merger of prior completed assessment in subsequent sec 153A order - notice and return for each of the six assessment years following a search or requisition

Whether an earlier completed assessment order abates on initiation of a search/requisition? - HELD THAT: - The Court held that only assessment or reassessment proceedings which are pending on the date of initiation of the search/requisition shall abate; where an assessment has already been completed and the assessment order subsists at the time of search, there is no abatement of those completed proceedings.

The Court applied the reasoning in Anil Kumar Bhatia [2012 (8) TMI 368 - DELHI HIGH COURT] and Abhisar Buildwell Private Limited [2023 (4) TMI 1056 - SUPREME COURT] to conclude that abatement is confined to pending proceedings and does not extend to completed/unabated assessments. [Paras 15, 17]

Abatement does not occur in respect of completed assessment orders which subsist at the time of search; the finding that the earlier assessment had not abated is sustained insofar as abatement is concerned.

Effect of block assessment u/s 153A - merger of prior completed assessment in subsequent sec. 153A order - HELD THAT: - The Court held that when a fresh assessment is made u/s 153A for a particular assessment year within the block period, the prior assessment order for that year becomes infructuous or unenforceable and is to be treated as re-opened and merged into the subsequent sec 153A assessment. The Court reasoned that the scheme of Section 153A contemplates a single determination of total income for the block period, and therefore the subsequent block assessment supersedes the earlier order. [Paras 16, 17, 20, 21]

Final Conclusion: The appeal is allowed - Tribunal's order is set aside. The Court held that completed assessments do not abate on initiation of search, but a subsequent assessment under Section 153A for the block period re-opens and merges the earlier assessment order for the same year, rendering the earlier order inoperative and leaving the subsequent s.153A assessment operative (thus the position in the subsequent assessment in relation to the short-term capital loss prevails).

Offences u/s 51(1) read with Section 54 Black Money Act -Scope of Section 311 Cr.P.C. to receive documentary evidence - permissibility of placing on record documents referred to in the complaint - distinction between amendment of complaint and production of omitted documents - After about eight months of filing the Complaint, an Application under Section 311 Cr.P.C was filed on the ground that inadvertently certain documents could not be filed along with the Complaint

Power of the trial court u/s 311 Cr.P.C to permit production and reception of documentary evidence not earlier filed - HELD THAT: - The Court held that Section 311 confers wide discretionary power to summon, examine or recall persons and to receive evidence, including documentary evidence, if such evidence appears essential for the just decision of the case. Reliance on precedent established that the provision is not confined to oral testimony, may be exercised at any stage, and permits rectification of inadvertent omissions where necessary to unearth the truth and do justice. Applying those principles, the impugned application under Section 311 to place on record the documents in question was properly entertainable and was correctly allowed by the courts below. [Paras 51, 52, 53, 59, 60]

Section 311 Cr.P.C. validly empowered the courts to receive the omitted documents and the application was rightly allowed.

Distinction between amendment of complaint and production of omitted documents - permissibility of placing on record documents referred to in the complaint - Whether permitting the Department to place on record documents that were mentioned in the complaint but not annexed earlier amounts to an impermissible amendment of the complaint - HELD THAT: - The Court concluded there was no amendment to the complaint: the documents sought to be produced were expressly referred to in the complaint (as Annexure F/Annexure 7) and merely could not be filed earlier due to inadvertence or non-availability. Authorities were examined to show that amendment of a complaint may be permitted only for curable infirmities and not where prejudice would follow, but that placing on record documents already referenced in the complaint does not change the nature of the complaint. Given that the documents were mentioned in the complaint and considered during grant of sanction, allowing them to be produced did not amount to an impermissible amendment. [Paras 54, 55, 56, 57, 58]

Permitting production of documents that were referred to in the complaint but not earlier annexed did not amount to amendment of the complaint and was permissible.

Final Conclusion: The High Court dismissed the petitions, holding that the trial court correctly exercised its wide discretion under Section 311 Cr.P.C. to receive documentary evidence that had been referred to in the complaint but not earlier annexed, and that permitting those documents did not constitute an impermissible amendment of the complaint.

Multiple Complaints against the Petitioner alleging offences under Sections 276C(1) and 277 of the Income Tax Act, 1961, and Section 191 of the Indian Penal Code, 1860 - Right to disclosure of prosecution material - admissibility of foreign public documents to be determined at trial - inspection of judicial record by the accused

Allegations originate from information purportedly obtained from the website “ICIJ.org,” claiming the Petitioner was a Director/Shareholder of a British Virgin Islands (BVI) entity had undisclosed foreign assets

Right to disclosure of prosecution material - Application for production of original/authenticated documents relied upon by the prosecution - HELD THAT: - The petitioner's grievance that only unauthenticated photocopies were supplied became infructuous because the Trial Court has subsequently allowed the prosecution to place the original/authenticated documents on the record. The Court recorded that the substratum of the petitioner's challenge to the impugned order dismissing his production application is therefore extinguished, and that the accused may raise objections to authenticity or admissibility at the appropriate stage of trial. [Paras 17, 18, 19, 24]

The challenge to the impugned order refusing production no longer survives because the originals/authenticated documents have been placed on the record; the petitioner may challenge authenticity at trial.

Admissibility of foreign public documents to be determined at trial - Whether admissibility and evidentiary value of foreign public documents should be decided at the threshold - HELD THAT: - The Court affirmed that questions regarding the method of proof, authentication under the Evidence Act and the Diplomatic and Consular Officers (Oaths and Fees) Act, and the evidentiary value of documents obtained under exchange of information treaties are matters for determination at the stage of evidence. Such issues do not, by themselves, warrant dismissal of the complaint or discharge of the accused at the threshold; the accused retains the right to contest these issues during recording of evidence and cross-examination. [Paras 14, 21, 22]

Admissibility and authentication of foreign documents to be adjudicated during trial; they are not grounds for threshold discharge.

Inspection of judicial record by the accused - Entitlement of the accused to inspect originals/authenticated documents once placed on the judicial file - HELD THAT: - Once the original or authenticated documents are placed on the judicial record they form part of the court file. Applying general principles of criminal procedure, the accused is entitled to inspect the judicial file to prepare his defence, and the petitioner is granted liberty to inspect the newly filed documents in accordance with applicable rules. [Paras 23, 24]

The accused is entitled to inspect the originals/authenticated documents on the judicial record; liberty granted to inspect them in accordance with rules.

Final Conclusion: The petitions are disposed of as the Trial Court has placed the original/authenticated documents on record; questions of authentication and admissibility of those foreign documents are to be determined during trial, and the accused is entitled to inspect the documents to prepare his defence.

Offences u/s 276C(1) and 277 of the Income Tax Act, 1961, and Section 191 IPC - allegations pertain to undisclosed foreign assets - relevancy and admissibility of a public document -Proof of foreign public documents under Section 78(6) of the Indian Evidence Act - right to inspection of originals for effective cross-examination - denial of an opportunity to inspect the original foreign documents, which she claims are inadmissible for want of diplomatic Certification, at the stage of cross-examination of CW-1 - Procedural delay objection to defeat statutory proof requirements

As argued Trial Court has failed to appreciate the mandatory provisions of Section 78(6) of the Indian Evidence Act, 1872, which mandates that public documents of any other class in a foreign country, must be proved by the original or a certified copy which bears a Certificate under the seal of a Notary Public or an Indian diplomatic Agent/officer.

HELD THAT: - The Court held that public documents of a foreign country must be proved in accordance with Section 78(6) IEA and that transmission via official government-to-government channels, though carrying a strong presumption of genuineness, does not itself dispense with the statutory mode of proof.

Where the prosecution has produced foreign documents (marked OSR at exhibition) and the defence raises a challenge to their authenticity for want of diplomatic/notarial certification, the accused is entitled to inspect the originals during the cross-examination of the witness to verify the presence or absence of the required certification. Production for inspection would not prejudice the prosecution and is necessary to secure the accused's right to effective cross-examination; the inspection must take place in the presence of the magistrate and cross-examination proceed immediately thereafter without allowing an adjournment on that ground. [Paras 20, 21, 22, 26, 27]

Respondent No.2 directed to produce originals corresponding to Ex. CW-1/6 and Ex. CW-1/10 (and other foreign documents relied upon) for inspection during CW-1's cross-examination; inspection to be in presence of magistrate and cross-examination to proceed forthwith.

Procedural delay objection to defeat statutory proof requirements - Whether the trial court could refuse production on the sole ground that the application was a delay tactic and impose costs - HELD THAT: - The Court held that while courts must guard against dilatory applications, procedural rights relating to proof of evidence cannot be denied merely by labelling an application as intended to delay. The Trial Court's dismissal on that primary ground was unsustainable where the request sought production of documents already relied upon by the prosecution and in its possession. Consequently, the cost imposed by the trial court on that basis was set aside, subject to the accused cooperating with expeditious conclusion of the trial. [Paras 24, 28]

The impugned order dismissing the application as a delay tactic is modified; the cost of Rs. 5,000/- is set aside.

Final Conclusion: The petitions are allowed: the Income Tax Department must produce the original foreign documents relied upon for inspection during the cross-examination of CW-1, inspection to be in presence of the magistrate and cross-examination to proceed immediately; the cost imposed by the trial court is set aside and the petitioner directed to cooperate in the expeditious conclusion of the trial.

Assessment against non-existent amalgamating entity - demand and penalty notices issued in the name of an amalgamating/transferor company that had ceased to exist on the date of issuance

HELD THAT: - The Court held that once a scheme of amalgamation is sanctioned the amalgamating/transferor company ceases to exist and therefore proceedings conducted in its name lack jurisdiction. The petitioner had informed the Revenue of the amalgamation and repeatedly objected to continuation of proceedings in the name of the erstwhile company, yet Respondent No.1 continued to issue notices under Section 142(1), the show cause notice and ultimately framed the assessment and issued demand and penalty notices in the name of the non-existent entity.

Relying on authoritative decisions including the principle in PCIT v. Maruti Suzuki India Ltd. [2019 (7) TMI 1449 - SUPREME COURT] and earlier authorities, and distinguishing Mahagun Realtors [2022 (4) TMI 347 - SUPREME COURT] on its facts, the Court found a jurisdictional error in proceeding against the dissolved/amalgamating company and concluded that the impugned notices and order were void. The Court clarified that the Revenue remains free to initiate fresh proceedings against the amalgamated company if so entitled in law. [Paras 13, 17, 18, 19, 20]

Final Conclusion: Writ petition allowed solely on the ground that the assessment, demand and penalty notices were issued in the name of an amalgamating company which had ceased to exist; the impugned orders are quashed, subject to the Revenue's right to initiate fresh proceedings against the amalgamated company if legally entitled.

Revision u/s 263 - Order prejudice to revenue requirement for exercise of revisional power - assessment of genuineness of cash credits u/s 68 - difference of opinion

HELD THAT: - The Court held that exercise of revisional power under section 263 is limited to orders which are not merely erroneous but are prejudicial to the interest of the revenue. Mere difference of opinion between the AO and the Commissioner does not warrant setting aside, modifying or remanding an assessment; the Commissioner must record reasons specifying the extent and manner in which the assessment is prejudicial to revenue. Absent such reasoned specification, interference is not justified. [Paras 10]

CIT could not validly set aside the assessment on the basis of difference of opinion; reasons quantifying prejudice to revenue were required.

Addition of cash credits u/s 68 - Whether AO had examined the genuineness of cash credits and whether that satisfaction could be interfered with? - HELD THAT: - The Court found that the AO had examined the accounts of partners and investigated the sources of credited amounts, including examination of a partner engaged in the same trade; therefore the AO had recorded satisfaction regarding genuineness and the Tribunal was not justified in interfering with that conclusion under the guise of revisional jurisdiction. The factual satisfaction reached by the AO on genuineness of credits was not shown to be prejudicial to revenue. [Paras 11]

The AO's exercise in examining cash credits u/s 68 was not open to interference by the CIT/Tribunal on the record before the Court.

Final Conclusion: The appeal is dismissed - Court held that section 263 cannot be invoked merely for a difference of opinion and that the Assessing Officer had examined the genuineness of the cash credits, so interference was not warranted.

Denial of setoff of carry forward losses -Limitation on carry forward of capital losses u/s 74(2) - deductibility u/s 57(iv) of interest on delayed compensation

Limitation on carry forward of capital losses u/s 74(2) - Denial of setoff of carry forward capital loss pertaining to A.Y.2007-08 - HELD THAT: - The Tribunal found that the assessee failed to controvert the revenue's contention or produce material to show that the carry forward loss could be set off beyond the eight assessment years immediately succeeding the year in which the loss was first computed. Applying the statutory limitation, the Tribunal held there was no merit in the assessee's challenge to the disallowance of the setoff and dismissed this ground of appeal. [Paras 6]

The denial of setoff of the carry forward loss for A.Y.2007-08 is upheld and the ground of appeal is dismissed.

Deductibility u/s 57(iv) - interest income earned on receipt of enhanced compensation - HELD THAT: - The Tribunal considered that the interest income on the enhanced compensation was disclosed under "Income from other sources" and, relying on the applicable legal position, treated such interest as eligible for deduction under section 57(iv). Noting that the CIT(A) had admitted the claim at the appellate stage but erred in rejecting its character as interest on delayed payment, the Tribunal set aside the appellate finding and directed the AO to allow the deduction in accordance with section 57(iv). [Paras 7]

The ground of appeal is allowed: the order is set aside on this point and the AO is directed to allow the deduction under section 57(iv).

Final Conclusion: The appeal is partly allowed - Tribunal upheld the denial of setoff of the carry forward loss relating to A.Y.2007-08 and allowed the assessee's claim for deduction under section 57(iv) in respect of interest on enhanced/delayed compensation, directing the Assessing Officer to grant that deduction.

Addition made u/s 56(2) - treating the entire difference between stamp duty valuation and declared consideration as the assessee's income - specific mention was made by assessee of purchase being made as a jointly owned property having equal share with her son - non reference to ld. DVO for appropriate valuation

HELD THAT: - The Tribunal found on the record that the assessee had filed submissions and additional evidence at both the assessment and first appellate stages, including a valuation report and requests for reference to the District Valuation Officer, which were not given appropriate consideration by the authorities below.

Tribunal noted that the addition treated the entire difference as the assessee's income despite the assessee's repeated assertion of joint ownership and despite a corresponding addition being made in the co-owner's assessment for his 50% share.

Tribunal held that the matter should be remitted to the AO for fresh consideration on merits, directing the AO to take into account the additional evidence placed on record, to make the contemplated reference to the DVO under the relevant provision, and to afford the assessee a reasonable opportunity of hearing. [Paras 4, 5, 6]

Final Conclusion: The Tribunal allowed the appeal for statistical purposes and remitted the assessment to the Assessing Officer for fresh adjudication on merits, directing consideration of the additional evidence, referral to the DVO for valuation, and affording the assessee a reasonable opportunity of hearing.

Exemption u/s 10(10B) - retrenchment compensation paid under a government approved VRS

Whether the retrenchment compensation received by the assessee under the BSNL Voluntary Retirement Scheme 2019, approved and funded by the Central Government, is exempt from income tax under section 10(10B)? - HELD THAT: - The Tribunal accepted that the assessee received retrenchment compensation under the BSNL VRS 2019 which was approved and budgeted by the Central Government. Following a coordinate Bench decision on identical facts, the Tribunal held that the amount falls within the protection envisaged by the second proviso to section 10(10B) and therefore does not form part of the assessee's taxable income; consequently no tax was required to be deducted from the severance package and the appeals were allowed on merits. [Paras 3, 6, 7]

The compensation under the government approved BSNL VRS 2019 is exempt under section 10(10B) and the appeals are allowed.

Final Conclusion: The Tribunal allowed the appeals for Assessment Years 2020 21 and 2021 22, holding that the retrenchment compensation received under the government approved BSNL VRS 2019 is exempt from tax u/s 10(10B).

TCS on scrap sale -Liability for tax collectible under section 206C(6A) read with section 206C(7) - Whether the assessee was in default in collecting and depositing TCS u/s 206C(6A) read with section 206C(7) for AY 2012-13?

HELD THAT: - The Tribunal found on the material on record that the assessee had filed Form 27EQ returns for all four quarters, furnished acknowledgements and a reconciliation statement matching scrap sales in the TCS returns with the audited profit and loss account.

The assessee produced a detailed quarterly summary showing TCS collected and the adjustments (including roll-scrap disclosed as asset sale and duties and taxes) which demonstrated that TCS had been collected and deposited. On these findings the AO's charging of additional liability under the cited provisions and the appellate confirmation were unsustainable because the determinative facts establish collection and payment of TCS, so the addition/charge could not be sustained. [Paras 7, 8]

Final Conclusion: The appeal is allowed on the ground that the assessee had collected and deposited the TCS for AY 2012-13 and the order levying additional TCS under the cited provisions was incorrect.

Unexplained cash deposits as unexplained u/s 69A -unexplained cash deposits during the demonetisation period -evidentiary value of books of account and farm records - HELD THAT: - The tribunal examined the material on record and accepted that the assessee had declared agricultural income and produced supporting documents including sales bills, 7/12 extracts, bank statements, farm income ledger and cash book.

The tribunal noted continuity of cash deposits in earlier years and that details of cash in hand prior to demonetisation and subsequent deposits were demonstrated to the AO and CIT(A). On this basis the tribunal found the addition by the AO unsustainable and observed that the assessee's books and records provided categorical support for the claimed agricultural income and deposits; therefore the addition u/s 69A did not survive scrutiny. [Paras 7, 8]

Final Conclusion: The tribunal allowed the appeal, holding that the assessee's books and supporting farm records adequately explained the cash deposits and the addition u/s 69A does not sustain.

Estimation of Gross profit on unaccounted purchase - seized documents and statement recorded during search/post-search proceedings relied upon - rejection of books of account under section 145(3) - HELD THAT: - The Tribunal held that the impugned addition rested solely on loose sheets (pages 156-159) found in possession of an employee and that those pages did not contain vital particulars such as seller/buyer names, description, quantities, rates, delivery or payment details. The seized papers were not recovered from the assessee's premises and no independent corroborative evidence (transport documents, delivery challans, confirmations, unrecorded cash receipts, or stock discrepancies) was produced to establish unrecorded sales.

The employee who possessed the papers subsequently stated and affirmed by affidavit that the entries related to his personal transactions, and the corresponding purchaser appeals deleting additions based on the same seized pages were upheld by the Tribunal. In these factual circumstances the AO was not justified in rejecting the audited books u/s 145(3) solely on the basis of the loose sheets, nor in estimating undisclosed profit by applying a gross profit percentage to the figures from those sheets; the addition therefore lacked legal and factual foundation. [Paras 8, 9, 10, 11, 12]

The deletion of the addition based on the seized loose sheets is upheld and the Revenue's ground is dismissed.

Final Conclusion: The Tribunal dismissed the Revenue's appeals for AY 2020-21, 2021-22 and 2022-23, upholding the CIT(A)'s deletion of additions made by estimating gross profit on alleged unaccounted sales, because the seized loose sheets were not reliable or corroborated evidence and the books could not be rejected solely on that basis.

Validity of seizure memo seeking interim release of the imported goods - multifunctional devices - imported consignment of the multifunctional devices (126 units) - Demurrage waiver applications -quantification and payment of enhanced duty for release - requirement of bank guarantee for provisional release.

Provisional release of seized imported goods - HELD THAT:- The High Court directed the respondent authorities to pass an order for provisional release of the seized goods on the petitioner's application, subject to Customs quantifying the enhanced duty within one week of receipt of this order and the petitioner paying/depositing the quantified enhanced duty; upon receipt of the payment in entirety the goods shall be released within four weeks. The order preserves the Customs Department's right to continue adjudicatory proceedings while permitting provisional release on the specified procedural conditions. [Paras 9, 10]

Provisional release permitted subject to quantification within one week and payment of enhanced duty, with release within four weeks after payment.

Requirement of bank guarantee for provisional release - HELD THAT: - The Court required the petitioner to provide a bank guarantee worth ten percent of the total price of the imported goods as a condition for provisional release and imposed record-keeping obligations if the petitioner sells the goods after provisional release, to be made available to authorities. [Paras 11]

Petitioner to furnish a bank guarantee of 10% of the total price and maintain transaction details if goods are sold after provisional release.

Adjudicating authority's independence from interim release order - HELD THAT: - The Court expressly clarified that the order for provisional release will not impede the Customs Department from proceeding with adjudication in accordance with law; the adjudicating authority must decide the matter on its merits, considering objections and contentions raised by the parties, uninfluenced by the conditional release. [Paras 10, 12]

Adjudicating authority to proceed independently and decide the proceedings on merits, unaffected by the provisional release order.

The Court directed that if the petitioner files an application seeking waiver of demurrage charges incurred to date, the respondents shall consider and decide such application objectively, without the interim release order precluding such consideration. [Paras 10]

Demurrage waiver applications, if filed, to be considered and decided objectively by the authorities.

Final Conclusion: The writ petition was allowed at the admission stage by directing provisional release of the seized imported consignment on specified conditions (quantification and payment of enhanced duty within prescribed time, furnishing of a 10% bank guarantee, and objective consideration of any demurrage waiver application), while preserving the adjudicating authority's power to decide the matter on merits.

Eligibility for concessional duty under Notification No. 12/2012-Cus (Sl. No. 399A) - import of agricultural machinery described as “Paddy Reaper Model VS-4 PR” - essential function of reaping paddy crops - confiscation and penalty - Whether the imported goods described as Paddy Reaper without binder are eligible for exemption under Notification No.12/2012-Cus (Sl.No.399A) applicable to Reaper-cum-Binder machines?

Strict interpretation of exemption notifications - Imported paddy reapers without binder attachment are not eligible for the benefit of Notification No. 12/2012-Cus., Sl. No. 399A described as "Reaper-cum-Binder". - HELD THAT:- The Tribunal in Commissioner of Customs (Port), Kolkata vs Chirag Corporation – [2020 (2) TMI 1432 - CESTAT KOLKATA], while interpreting the very same Notification No. 12/2012-Cus., Sl. No. 399(A), examined whether the exemption available to “Rotary Tiller/Weeder” could be extended to Power Tillers. The Tribunal, after analysing the scheme of the notification and the distinction between the two types of agricultural machinery, held that the eligibility for exemption must be determined strictly on the basis of the description contained in the notification.

The Tribunal examined the wording of the exemption entry and upheld that the expression "Reaper-cum-Binder" denotes a single integrated machine performing both reaping and binding functions. The court applied the principle that where the wording of an exemption notification is clear and unambiguous the benefit cannot be extended beyond its express language, noting that accepting the appellant's contention would render the words "cum-binder" otiose. Reliance was placed upon precedent interpreting the same notification and the settled rule that the claimant bears the burden of proving entitlement to exemption; consequently, paddy reapers lacking the binder attachment do not satisfy the description in the notification. [Paras 8]

The imported paddy reapers without binder attachment do not satisfy the description "Reaper-cum-Binder" and are not entitled to the concessional duty under Notification No. 12/2012-Cus., Sl. No. 399A.

Confiscation and penalty require misdeclaration or deliberate evasion - HELD THAT: - Section 111(m) applies where the goods do not correspond with the entry in the Bill of Entry; the Tribunal found no discrepancy between the declared goods (paddy reapers) and the goods imported. Citing authority that confiscation and penalty cannot be sustained merely because an exemption claim is later disallowed, the court held that in the absence of deliberate misdescription or intent to evade duty, confiscation and penalty are not warranted. The appellant's claim was treated as a bona fide but mistaken interpretation of the notification made under the self-assessment regime, so the essential ingredient for invoking Section 111(m) and imposing penalty under Section 112(a) is absent. [Paras 9]

Confiscation under Section 111(m) and the consequential redemption fine and penalty under Section 112(a) are set aside.

Final Conclusion: The appeal is partly allowed: the denial of concessional duty was upheld because the imported machines are not "Reaper-cum-Binder", but the confiscation, redemption fine and penalty are set aside for lack of misdeclaration or deliberate evasion; the goods are liable to assessment at the applicable tariff rate and the differential duty demand stands.

Undervaluation - Penalties on individuals for aiding and abetting - Enhancement of assessable value and differential duty - Admissibility of retracted statements without cross-examination - non-contemporaneous and non-identical imports - imposition of penalties - Whether the goods imported by the appellant viz. rubber belts and PVC conveyors which are used for textile, granite, printing and other industrial applications had been undervalued?

Reliability and admissibility of statements recorded under Section 108 when retracted and not subjected to cross-examination - HELD THAT:- The Tribunal held that the adjudicating authority relied predominantly on statements which were initially retracted and later restored without subjecting those statements to cross-examination or demonstrating adequate corroboration. The appellate authority merely upheld the adjudicating authority's conclusion without analysing admissibility or furnishing independent reasons. In these circumstances reliance solely on such statements to enhance assessable value was held to be unsustainable. [Paras 7]

Statements retracted and not subjected to cross-examination could not sustain the enhancement of assessable value.

Validity of enhancing declared value by reference to annexed imports which were neither contemporaneous nor shown to be identical or comparable - HELD THAT:- The Tribunal found no detailed analysis demonstrating that the imports relied upon in the annexure were contemporaneous, from the same country of origin, or of identical/comparable description. The authorities simply enhanced declared value uniformly by 25% without identifying comparable goods or explaining the basis for the percentage increase, contrary to valuation requirements. Absent such contemporaneous/comparative valuation analysis, the residual enhancement was arbitrary and unsustainable. [Paras 7]

Enhancement of declared value by 25% based on non-contemporaneous and non-comparable imports was not justified.

Consistency in imposition of penalties where co-accused's penalty is dropped - HELD THAT:- The Tribunal observed that the Commissioner(Appeals) had dropped penalty on one intermediary (Shri Sanjeev Yadav) while upholding penalty on another intermediary (Shri Ratan Das) although the allegations against both were predicated on the same series of transactions. The order dropping penalty on one person was not challenged and attained finality; in those circumstances confirming penalty on the other without distinguishing the respective roles was inconsistent and could not be sustained. [Paras 8]

Penalty confirmed against one intermediary could not be sustained where penalty against another intermediary for the same transaction had been dropped and attained finality.

Final Conclusion: The Tribunal set aside the enhancement of assessable value and the differential duty demand, and quashed the penalties imposed on the individuals; the appeals are allowed with consequential relief as per law.

Validity of reassessment/enhancement of assessable value based solely on an empanelled Chartered Engineer's certificate (without following the sequential application of the Customs Valuation Rules, 2007 and without adequate market evidence) - Appropriate quantum of redemption fine and penalty in the circumstances.

Revision of assessable value under Customs Valuation Rules - HELD THAT: - The Appellant has imported MFDs which were declared as the parts of copier, and were examined by the Chartered Engineer who found that these goods were old and used parts of MFDs and determined the value which is higher than declared value. We also find that the enhanced value was determined without following the rules as prescribed in CVR, 2007. Further, we find that the Adjudicating Authority confiscated the goods and allowed the clearance on payment of fine & penalty. We further note that on appeal, the learned Commissioner (Appeals) rejected the declared value and upheld the enhancement of value and confiscation of goods, but reduced the redemption fine and penalty.

Enhancement of value set aside and declared value accepted.

Redeemability of restricted imports under Section 125 - Whether goods imported without required authorisation (restricted MFDs) were liable for absolute confiscation or eligible for redemption - HELD THAT: - Tribunal's earlier decision in the appellant's own case titled as BE Office Automation Products Pvt Ltd [2019 (11) TMI 1091 - CESTAT CHANDIGARH], by relying upon the judgment of Hon’ble Apex Court in the case of Atul Automation Pvt Ltd [2019 (1) TMI 1324 - SUPREME COURT], has set aside the enhancement of the value based on Chartered Engineer Certificate and also reduced the redemption fine and penalty.

It is seen from the said decision that there was no absolute confiscation and approximately 10% of the value of the goods was imposed as redemption fine in the similar facts and circumstances. Penalty of 5% of assessable value was imposed in the similar facts and circumstances.

Redemption fine fixed at 10% and penalty fixed at 5% of the assessable value.

Final Conclusion: Following earlier Tribunal and Apex Court rulings, the enhancement of value was set aside, the declared value accepted, absolute confiscation dismissed, and the redemption fine and penalty reduced to 10% and 5% respectively; both appeals were partially allowed.

Liability to pay differential customs duty with interest - Wrong claim of exemption - Mis-declaration for evasion of customs duty -Redemption fine and penalty - Whether the Appellant who had imported the goods by availing ineligible benefit of Notification is liable to pay differential duty with interest.

Mis-declaration - Whether the importer's declarations amounted to a mis-declaration - HELD THAT:- The Tribunal found that the Bills of Entry correctly described the goods and specifically declared them as imported for 'Bus' manufacturing. In the absence of any change in the description or tariff, the adjudicatory finding of mis-declaration could not be sustained; the Tribunal treated the classification/description in the Bill of Entry as true for this purpose and rejected the allegation of mis-declaration. [Paras 9]

No mis-declaration is established and the allegation of mis-declaration is rejected.

Differential duty with interest - Whether the demand for differential duty with interest on account of availing an ineligible notification is sustainable - HELD THAT: - The Tribunal recorded that the appellant had wrongly availed the benefit of the notification and did not dispute the levy of differential duty with interest; accordingly the demand for differential duty was held to be sustainable and was confirmed with applicable interest. [Paras 9]

Demand for differential duty is confirmed with interest.

Redemption fine and penalty - provisional release - HELD THAT:- The Tribunal noted that the goods had been released provisionally and, having regard to that fact, held that proceedings under the relevant provision imposing redemption fine and penalty were unsustainable. The adjudicating authority's order imposing redemption fine and penalty was therefore set aside. [Paras 9]

Imposition of redemption fine and penalty is set aside; confiscation/penalty not sustained.

Final Conclusion: The appeal is partially allowed: the allegation of mis-declaration is rejected, the demand for differential duty with interest is confirmed, and the impugned order imposing redemption fine and penalty is set aside.

Classification of Goods - technical grade chemicals Cyantraniliprole and Clothianidin - classifiable under Chapter 29 (CTH 2933 and CTH 2934 respectively) or under Chapter 38 as insecticidal preparations (CTH 3808, more specifically Tariff Item 3808 91 42) - Application of General Rules of Interpretation (GRI) including Rule 1, Rule 3(a) and Rule 6 Section VI notes and relevant Chapter Notes to Chapters 29 and 38 - HSN explanatory notes - Supplementary Note 2 to Chapter 38 prescribing composition threshold for tariff item 3808 91 42.

Classification of Cyantraniliprole (Technical) and Clothianidin (Technical) - HELD THAT:- The Authority found that although the subject chemicals are separately defined organic compounds, they are technical grade insecticidal substances that possess insecticidal properties and are produced through multi step synthesis resulting in technical/formulated material. Applying the Chapter notes and HSN Explanatory Notes, such products fall within the scope of Heading 3808 when they have the character of preparations or intermediate preparations possessing insecticidal properties. The Supreme Court's ratio in Union of India v. Pesticides Manufacturers & Formulators Association of India endorses that technical grade pesticides [2002 (10) TMI 95 - SUPREME COURT] are classifiable under Heading 3808. The Finance Act, 2025 introduced complementary entries in Chapters 29 and 38 and Supplementary Note 2 to Chapter 38 prescribes a mass content threshold; the subject goods satisfy the >90% active ingredient criterion. On the application of GRI 3(a) the specific description for insecticidal preparations in Heading 3808 prevails over the more general chemical headings in Chapter 29. For these reasons the Authority held that the appropriate classification is under Heading 3808 and, more specifically, Tariff Item 3808 91 42. [Paras 20, 21, 23, 25, 30]

To sum up:

i) The subject chemicals, namely Cyantraniliprole and Clothianidin, are Technical Grade Chemicals.

ii) As per the technical write-up (Cyantraniliprole DPX-HGW86 and Clothianidin Ref: CGA 322704), both substances are specifically described and recognized as insecticides.

iii) The subject goods possess insecticidal properties and are known, marketed and traded in the commercial market as insecticides.

iv) The CIB registration certificate also identifies the subject goods as technical/formulated insecticidal material.

v) Further, the amendments introduced through the Finance Act, 2025 simultaneously created specific tariff items and supplementary notes in both Chapter 29 and Chapter 38. As clarified in the Memorandum explaining the provisions of the Finance Bill, the amendments in Chapter 29 relate to identification of certain dual-use chemicals for non-pesticidal purposes, whereas the amendments in Chapter 38 specifically relate to identification of certain technical-grade pesticides. This clearly indicates the legislative intent to classify technical-grade insecticidal substances under Chapter 38.

vi) Additionally, as per the commercial production process details of the subject goods, it is evident that the goods are produced through multi-step chemical synthesis involving various reactions and purification stages. These processes ultimately result in the final technical grade active insecticidal substance. Therefore, it can safely and conclusively be held that the subject goods constitute preparations, as they are formulated chemical compounds produced through a multi-step synthesis process. Hon'ble Supreme Court in the matter of Union of India v. Pesticides Manufacturers & Formulators Association of India has discussed the issue comprehensively and ratio is clearly applicable to this case.

vii) In view of the manufacturing process and technical literature on record, the goods are clearly preparations within the meaning of the tariff.

viii) Being insecticidal preparations, they are appropriately covered under Heading 3808.

ix) Further, Supplementary Note 2 to Chapter 38 specifically identifies certain technical-grade pesticides including Cyantraniliprole and Clothianidin under Tariff Item 3808 91 42 where the content by mass exceeds 90%. The subject goods satisfy the prescribed purity criterion and therefore squarely fall within the scope of the said tariff entry.

x) Further, the import policy applicable to goods falling under Chapter 38 requires mandatory registration under Section 9 of the Insecticides Act, 1968 for chemicals intended to be used as insecticides. The subject goods, being technical-grade insecticides, are required to be registered with the Central Insecticides Board and Registration Committee prior to import, which further reinforces their regulatory and commercial identity as insecticides.

xi) Further, in terms of Note 1(a)(2) of Chapter 38, the General HSN Explanatory Note to Note 29 (Note (D)(2)(h)) of Chapter 29, as well as the General HSN Explanatory Note (2) of Chapter 38, insecticides put up as described in Heading 38.08 are excluded from Chapter 29 and are classifiable under Chapter 38.

xii) Applying Rule 3(a) of the General Rules for Interpretation, the heading providing the most specific description-namely Heading 3808 for insecticides-prevails over any more general chemical heading under Chapter 29.

xiii) Without prejudice, even if it is assumed that the goods are prima facie classifiable under more than one heading, Rule 3(b) of the General Rules for Interpretation would apply, inasmuch as the essential character of the subject goods is derived from their insecticidal properties. The dominant function, commercial identity, and intended use of the goods are as insecticides, and therefore classification under Heading 3808 is warranted.

Final Conclusion: The Authority ruled that the technical grade chemicals Cyantraniliprole and Clothianidin are insecticidal preparations/intermediate preparations and are classifiable under CTH 3808, more specifically under tariff item 3808 91 42, applying the Chapter notes, HSN explanatory notes, the Supreme Court precedent and the percentage criterion in Supplementary Note 2.

Oppression and mismanagement under Sections 241 & 242 - increase of authorised share capital - Share transfer restrictions - articles of association compliance - Power of the company to increase share capital and allot rights shares - prematurity of reliefs based on apprehension or anticipated future acts.

Whether the rights issues of 2015 and 2017, the consequent allotments and share transfers impugned by the appellants constituted acts of oppression or mismanagement under Sections 241 and 242 of the Companies Act, 2013 - HELD THAT:- The Tribunal held that the Board and the company acted within the powers conferred by the Articles of Association and the Companies Act in increasing the authorised capital and in making rights allotments; the statutory and contractual conditions for the rights issues and letters of offer were fulfilled and the Board resolutions approving the allotments were in accordance with law. Consequently, the impugned actions could not be characterised as oppressive or amounts of mismanagement under Sections 241 & 242 merely because they reduced the appellants to a minority when the appellants had been offered rights shares in proportion to their holding and no legal prohibition in the Articles or Act was contravened. [Paras 12, 13, 14, 16, 18]

The challenge to the rights issues, allotments and related transfers did not establish oppression or mismanagement and the Company Petition on those grounds was rightly dismissed

Prematurity of reliefs based on apprehension or anticipated future acts - - interim relief sought to restrain removal of the appellant from promoter status based on apprehension of a future act was maintainable - HELD THAT: - The Tribunal found the interim prayer to be anticipatory and premised on mere apprehension without material to show an actual removal from the register; accordingly it treated the petition as premature. The Tribunal expressly left open the appellants' right to approach it at an appropriate time if any act of oppression or mismanagement occurs in future. [Paras 4, 15, 16, 20]

The interim relief based on apprehension was not granted and the petition was dismissed as premature while reserving the appellants' right to seek appropriate relief if a concrete act occurs

Final Conclusion: The appeal is dismissed. The Tribunal's finding that the rights issues, allotments and transfers were within the company's powers and did not amount to oppression or mismanagement stands, and the interim/anticipatory relief sought was correctly held premature while leaving the appellants free to seek relief if a concrete oppressive act occurs.

Rejection of the Operational Creditor's Section 9 application by the NCLT - pre-existing dispute raised prior to issuance of the Section 8 demand notice - genuine dispute test - claims arising from sale of batteries -

Existence of a pre-existing dispute raised prior to issue of notice under Section 8 of the IBC, 2016 and its effect on admission of an application under Section 9 - HELD THAT: - The Tribunal found that the Corporate Debtor had, by email dated before the Section 8 demand notice, disputed liability and alleged economic coercion in issuance of the credit note; therefore a dispute existed prior to the demand notice. Applying the settled test that the adjudicating authority need only determine whether a plausible, non-spurious dispute is discernible from the reply (without resolving merits or assessing likelihood of success), the Tribunal concluded that the defence was not illusory or mere bluster. The Tribunal noted that the Adjudicating Authority is not to enter final adjudication but must separate grain from chaff; because the Corporate Debtor's plea raised a real controversy antecedent to the notice, the Section 9 petition was properly rejected for being founded on a disputed operational debt. [Paras 6, 8, 10]

The NCLT's rejection of the Section 9 application on the ground of a genuine pre-existing dispute raised prior to the Section 8 notice was correct.

Final Conclusion: The appeal is dismissed; the NCLT's order refusing admission of the Section 9 petition on account of a genuine pre-existing dispute raised before issuance of the Section 8 notice is affirmed.

Invocation of Section 65 for fraudulent or malicious initiation of CIRP - malicious intent - termination of corporate insolvency resolution process - adjudicating authority's power to examine abuse of CIRP at any stage - imposition of penalty under section 65 - failed to record reasons to justify imposition of such heavy penalty without disclosing the basis for quantifying the penal amount - non-filing of claims - non-cooperation of suspended management - Whether the Adjudicating Authority was correct in holding that the Appellant should bear the fees of the RP and the CIRP expenses.

Whether Section 65 of the IBC could be invoked and adjudicated upon after admission of CIRP and at a stage when the CIRP had stagnated - HELD THAT: - The Tribunal held that Section 65 embodies a legislative mandate prohibiting invocation of the insolvency resolution process fraudulently or with malicious intent and that the Adjudicating Authority may examine and interdict such abuse at any stage. There is no temporal bar or requirement of a separate formal application for the exercise of Section 65 jurisdiction; the authority may take suo-moto cognizance or entertain an application whenever the surrounding facts and circumstances satisfy it that fraud or malicious intent exists. Accordingly, the pendency or prior admission of CIRP does not preclude later adjudication under Section 65 when evidence of abuse emerges. [Paras 10, 11, 12]

Section 65 could be invoked and adjudicated upon despite prior admission of CIRP and after stagnation of proceedings.

Invocation of Section 65 for fraudulent or malicious initiation of CIRP - HELD THAT:- The Tribunal affirmed the Adjudicating Authority's conclusion that the Appellant's conduct evidenced malicious intent. The determinative factors were the Appellant's failure to file claims after initiating the Section 9 petition despite public announcement, the coincidence of CIRP admission with pending tax recovery by statutory authorities (yielding only tax authorities as claimants), the Appellant's close familial and past directorial links with the corporate debtor, and the absence of a credible explanation for non-pursuit of claims. These surrounding facts, taken together, supported the finding that the Section 9 petition was used to secure moratorium protection to thwart tax recovery rather than to pursue bona fide insolvency resolution. [Paras 15, 16, 17, 18, 19]

The Adjudicating Authority rightly found that the CIRP had been fraudulently/maliciously initiated by the Appellant.

Liability for CIRP costs and resolution professional fees in cases of abuse - HELD THAT: - The Tribunal accepted the Adjudicating Authority's exercise of residuary equitable jurisdiction to fasten costs on the Appellant in the exceptional factual matrix of this case. Although CIRP costs are ordinarily met from corporate assets or through the CoC, the CoC here comprised only tax authorities who had not initiated CIRP, the CoC had become non-functional, there were no available assets, and prima facie abuse of process by the Appellant had been established. In that context, it was not impermissible to fix the RP's fees and CIRP expenses on the party found to have abused the insolvency process. [Paras 20]

Given the factual matrix, the Adjudicating Authority was justified in directing the Appellant to bear the RP's fees and CIRP expenses.

Final Conclusion: The Tribunal found no merit in the appeal and upheld the Adjudicating Authority's findings that the CIRP had been fraudulently and maliciously initiated, and that penal costs and RP/CIRP expenses could be imposed on the Appellant; the appeal is dismissed.

Disciplinary proceeding against IRP - misrepresentation - concealment, reconstitution of the committee of creditors without approval - Duties of interim resolution professional - Principle of audi alteram partem and opportunity to be heard - suppression of facts - voting share of creditors.

Principle of audi alteram partem and opportunity to be heard - Whether the observations recorded in paragraph 26 required expunction for want of opportunity to the IRP - HELD THAT:- The Tribunal had given the IRP specific directions to explain discrepancies and permitted the other side to file responses; the IRP did not avail the opportunity to explain either in writing or orally when the matters were listed. The Appellate Tribunal examined the sequence of filings, listing orders and the orders dated 11.12.2024 and 18.12.2024 and concluded that the IRP was afforded opportunity but failed to utilise it; therefore the complaint of denial of hearing in respect of paragraph 26 was held to be without merit. [Paras 30, 32]

The contention that paragraph 26 should be expunged for breach of natural justice is rejected.

Duty of interim resolution professional as an officer of the Tribunal - HELD THAT: - The Appellate Tribunal reviewed the record showing two applications filed by the IRP evidencing different CoC constitutions, delay in curing registry objections, omission to disclose the earlier filed IA in the later IA, and the backdating of a letter; having considered those facts and the Tribunal's findings on them, the Appellate Tribunal held that the impugned observations were supported by the record and that there was sufficient basis for the Tribunal to describe the IRP's conduct as prejudicial to the CIRP process and to suggest disciplinary inquiry. [Paras 22, 23, 30, 31, 33]

The observations in paragraph 26 stand as justified on the material and were not required to be expunged.

Final Conclusion: Both appeals were dismissed; the Appellate Tribunal found that the IRP had been afforded opportunity to explain and that the Tribunal's adverse observations about the IRP's conduct were supported by the record and therefore not to be expunged.

Validity of time barred show cause notices - Failure to initiate proceedings within a reasonable period - preservation obligations under the Banking Companies (Period of Preservation of Records) Rules, 1985.

Failure to initiate proceedings within a reasonable period - preservation obligations under the Banking Companies (Period of Preservation of Records) Rules, 1985 - Validity of Show Cause Notices issued after long delay for alleged FERA contraventions - HELD THAT:- The Court applied the principle that where no statutory limitation is prescribed authorities must initiate proceedings within a reasonable period and accepted the Supreme Court's decision in Citi Bank [2022 (8) TMI 1107 - SUPREME COURT] that reliance on the Banking Companies (Period of Preservation of Records) Rules, 1985 (preservation for five/ eight years unless longer preservation is directed) is relevant to determine reasonableness of delay. The impugned show cause notices issued in 2002 relating to transactions occurring predominantly in the early 1990s were held to be covered by that precedent. The Court further observed that the respondent did not demonstrate any instruction or order directing preservation of records for a period longer than that prescribed, and that there was an additional unexplained delay between the initiation of inquiry and issuance of the notices. [Paras 7, 8, 9]

Show Cause Notices and proceedings founded on them were quashed for delay; consequential interim security (bank guarantees) provided by the appellants was ordered to be discharged and released.

Final Conclusion: The appeals were allowed by quashing the impugned Show Cause Notices and related proceedings on the ground of unreasonable delay, and the bank guarantees furnished pursuant to interim orders were directed to be released to the appellants.

Foreign exchange - purchase of Gold from Dubai illegally through several persons and made payments in Cash - contravention of foreign exchange regulations - payments for or on behalf of persons resident outside india - contemporaneous entries in a seized spiral pad, WhatsApp chats, and voluntary statements recorded under Section 37 - Evidentiary value of admissions corroborated by contemporaneous records - requirement of authorised banking channels for permitted INR payments for imports - judicial restraint and proportionality in quantification of penalty under FEMA.

Admissibility and sufficiency of spiral-pad entries, WhatsApp chats and voluntary statements to establish contravention of FEMA - HELD THAT: - The Tribunal held that the spiral-pad entries are not uncorroborated loose sheets because they are substantially corroborated by the voluntary statements of the director recorded under Section 37 of FEMA and by WhatsApp chats; therefore, these materials together suffice on the preponderance of probabilities in adjudicatory proceedings under FEMA to establish that the payments recorded were connected with persons resident outside India. [Paras 17, 18]

The entries, statements and WhatsApp chats together establish the contraventions; the evidentiary material is sufficient to support the finding of contravention.

Prohibition on payments to persons resident outside India otherwise than through an authorised person - wide ambit of "in any manner" in payments to persons outside India - HELD THAT: - The Tribunal construed Section 3(b) as covering payments made in India to agents acting on behalf of persons resident outside India because the phrase "in any manner" includes such transfers; the appellant's contention that payments in INR to local persons cannot amount to dealing in foreign exchange was rejected since the material showed payments were made for and on behalf of persons resident outside India and involved conversion into USD equivalents. [Paras 19]

Payments made in India to agents on instructions of foreign dealers fell within the mischief of Section 3(b) and supported findings of contravention under Sections 3(a) and 3(b).

Applicability of Regulation 6(2)(ii) of the FEM (Manner of Receipt and Payment) Regulations, 2016 to payments made in the case -HELD THAT: - The Tribunal held that Regulation 6(2)(ii) permits payment in INR for imports only in accordance with prescribed banking channels and regulatory compliance; since the admitted mode of payment was cash handed to agents outside authorised channels, the regulation did not apply to absolve the appellants' conduct. [Paras 20]

Regulation 6(2)(ii) does not validate the cash payments made outside authorised channels and cannot be relied upon to negate contraventions.

Liability of persons in charge for contraventions by the company - HELD THAT: - The Tribunal found that the director was a promoter, major shareholder and person in charge of day-to-day affairs and that the contraventions were committed with his knowledge and active involvement as reflected in his statements; on that basis invocation of Section 42(1) was held to be justified. [Paras 21]

The director is liable under Section 42(1) for the contraventions committed by the company.

Appropriateness of the quantum of penalty imposed by the Adjudicating Authority -HELD THAT: - While affirming that contraventions were established, the Tribunal observed that the Adjudicating Authority had not explained the basis for quantifying maximum penalties and that discretion under Section 13 must be exercised judiciously considering amount involved, nature of contravention and proportionality; applying that principle the Tribunal reduced the company's penalty to an amount equivalent to the established contravention and reduced the director's penalty on the same grounds. [Paras 22]

Penalty on the company reduced to amount equivalent to the contravention and penalty on the director reduced correspondingly.

Final Conclusion: The Tribunal upheld the finding of contravention by the company and its director based on corroborated contemporaneous records and admissions, rejected the appellants' statutory defenses, but reduced the penalties for lack of satisfactory quantification by the Adjudicating Authority; the appeals were disposed with the penalties reduced as indicated.

Failure to make independent inquiry - determination of tax liability was initiated based on data received from the Central Board of Direct Taxes - violation of principles of natural justice - exemption under Notification No. 25/2012-ST - territorial nexus - double taxation.

Failure to make independent inquiry - violation of principles of natural justice - remand for fresh adjudication - HELD THAT:- The Court held that the Adjudicating Authority proceeded to quantify service-tax liability on the basis of information received from the Income Tax Department without independently enquiring whether the amounts related to works executed within the State of Odisha; that factual finding was perverse. The Court also found that the petitioner was not afforded adequate opportunity of hearing (one show-cause notice was unserved and requested documents were not considered), thereby infringing principles of natural justice. Applying the principle that an assessment/order must be made after giving a reasonable opportunity to set out the case (as reflected in Tin Box Co.[2001 (2) TMI 13 - SUPREME COURT]), the Court set aside the impugned Order-in-Original and the order rejecting rectification and remitted the matter to the Adjudicating Authority to afford the petitioner one opportunity to place evidence, including material filed in this Court, and to decide the matter afresh within the directed time-frame. [Paras 7, 8, 10]

The Order-in-Original dated 04.07.2024 and the rectification order dated 23.06.2025 are set aside and the matter is remitted for fresh adjudication after affording the petitioner an opportunity to place evidence; the Adjudicating Authority is directed to complete the exercise within the time specified by the Court.

Final Conclusion: The writ petition is allowed to the extent that the impugned adjudication order and the rectification rejection are set aside and remitted for fresh adjudication; the petitioner is granted one opportunity to place evidence and the Adjudicating Authority is directed to decide afresh within the period prescribed by the Court.

Export of service - service tax demand,solely based on income tax returns- Registration and name-change attribution of tax liability - non-filing of returns -willful suppression - cancellation of the second registration - exemption for export of services under special economic zone arrangements. - Whether the impugned order confirming service tax, interest and penalty could stand where departmental records and proceedings attributed liability to a second registration despite the petitioner showing change of name and asserting that exports under the first registration attracted exemption.

Registration and name-change attribution of tax liability - HELD THAT: - The Court found that the adjudicating authority had levied service tax under the second registration when the petitioner had produced material indicating that the transactions related to exports under the first registration and that the second registration caused inconsistency and potential double liability. The impugned order was set aside because the liability could not be sustained without giving the petitioner an opportunity to place relevant materials and to rectify registration anomalies; the matter was remitted for fresh consideration by the same authority. [Paras 8, 9]

Impugned order set aside and matter remitted to the adjudicating authority for fresh adjudication after consideration of materials placed by the petitioner.

The Court directed that on remand the petitioner be permitted to file additional material, including certified evidence of change of name and documents proving the claim of export exemption, and observed that if the transactions relate to the first registration the liability under the second registration would not stand. The Court also required the petitioner to take steps to cancel the second registration within a prescribed time-frame to enable effective adjudication and avoid parallel liabilities, and directed the adjudicating authority to conclude proceedings within a reasonable period thereafter. [Paras 8, 9]

Final Conclusion: The High Court set aside the impugned order and remitted the matter for fresh adjudication, permitting the petitioner to place relevant materials and directing cancellation of the duplicate registration within a fixed time so that the adjudicating authority may decide the claim on its merits within a specified period.

Taxability of services - commission received from foreign universities/ institutions for arranging/ facilitating enrolment of students from India - export of services - intermediary services - demand of service tax and proposing to impose penalties by invoking the extended period.

Services to foreign educational institutions - HELD THAT:- The issue, is no more res integra as this Tribunal in several decisions has held that the appellant was exporting its services, and does not act as an intermediary on behalf of any FEI. We draw support from the Delhi High Court in Commissioner of Central Tax, CGST Delhi East, Versus M/S T C Global India Pvt Ltd [2025 (10) TMI 371 - DELHI HIGH COURT],The High Court has held that the appellant’s services when rendered to foreign universities and the earnings being in foreign exchange would not constitute intermediary services.

The taxability of the services provided within India is not in dispute. However, it has been submitted by the Ld Counsel that the appellant had deposited an amount of Rs. 4,18,02,719/- during the investigations. We note that this amount has been appropriated by the adjudicating authority in the impugned order. Ld Counsel has submitted that they have paid the service tax, interest and 15% penalty and has sought relief under section 78 of the Act.

It is abundantly clear that if the service tax dues, interest thereon along with 15% as penalty has been paid within 30 days of the issuance of the show cause notice, then the proceedings are deemed to be concluded. As submitted by the Ld Counsel, this aspect has also been clarified by the Board in its Circular No. 137/46/2015-ST dated 18.8.2015.

In the instant case, we note that the appellant had deposited certain amount towards service tax dues, interest thereon and 15% as penalty before the issuance of the said notice. Hence, in the light of the above statutory position, the proceedings are deemed to have concluded.

Final Conclusion: The appeal was allowed in part: demands and penalties based on the finding of intermediary services for supplies to foreign educational institutions were set aside, and the adjudication was held concluded to the extent that service tax, interest and 15% penalty had been paid before issuance of the show cause notice; the remainder of the impugned order stands affirmed subject to verification of interest.

Determination of valuation adopted for the purpose of payment of service tax classifying the activity as “Works Contract Service” - benefit under under Notification No. 24/2012 - ascertainability of labour charges - determined under Rule 2A(i) - overlap of sales tax and service tax - composition scheme.

Appropriate sub clause of Rule 2A of the Service Tax (Determination of Value) Rules, 2006 - HELD THAT:- As in the case of Service Tax, VAT may be discharged either by deducting actual labour charges where ascertainable or, where they are not, by adopting a deemed percentage of the contract value.

In the present case, it is undisputed that the Appellant adopted the percentage method and paid VAT on 70% of the contract value, as actual labour charges were not ascertainable. Since VAT and service tax are mutually exclusive, it would be impermissible to levy service tax again on the same 70% under Rule 2A(ii)(B)(i) of the Valuation Rules, 2006.

The Service Tax Department cannot take a contrary stand and adopt an inconsistent approach while dealing with the same set of facts as well as legal background, as consistently held by the Hon’ble Supreme Court. [See: Birla Corporation Ltd. Vs CCE - [2005 (7) TMI 104 - SUPREME COURT]; Indian Oil Corporation Ltd. Vs Collector of C. Ex., Baroda [2006 (8) TMI 8 - SUPREME COURT]; Boving Fouress Ltd. Vs Commissioner of Central Excise, Chennai -[2006 (8) TMI 189 - SUPREME COURT]]. A harmonious construction of the constitutional and statutory deeming provisions is therefore required. Full effect must be given to the statutory fiction, and it should be carried to its logical conclusion, as stated in S. APPUKUTAN [1988 (1) TMI 352 - SUPREME COURT].

Applying the statutory fiction and principles recognised by the Supreme Court, the Tribunal held that VAT and service tax are mutually exclusive in respect of the same value element. Where VAT has been discharged on 70% of the contract value under the TNVAT Rules by adoption of the percentage method, it would be impermissible to levy service tax again on that same 70%. Accordingly, service tax can only be levied on the remaining portion of the contract value (i.e., 30%) and a contrary, inconsistent approach by the Service Tax Department is not permissible. [Paras 11, 15]

Final Conclusion: The appeal is allowed; the impugned order confirming the differential demand is set aside on the ground that VAT was paid on 70% of the contract value and service tax can therefore be levied only on the remaining 30%, and the appellant is entitled to consequential relief as per law.

Denial of Cenvat Credit availed with respect to capital goods and inputs pertaining to towers & shelters - Denial of Cenvat Credit availed with respect to input services pertaining to towers & shelters - setting up passive infrastructure facility - integral use for output services - binding precedent - larger bench precedent.

Entitlement to Cenvat credit on capital goods and inputs used for towers and prefabricated shelters - HELD THAT:- The Tribunal held that the question whether towers and prefabricated shelters constitute goods eligible for Cenvat credit is no longer res integra. The decision follows the Hon'ble Supreme Court in M/s Bharti Airtel Ltd v. CCE, Pune [2024 (11) TMI 1042 - SUPREME COURT] which ruled that such towers and shelters are not immovable property, can be dismantled and relocated, and are indispensable for functioning of antennas; accordingly they qualify as goods used in providing the output service and attract Cenvat credit. The Tribunal also relied on the Jurisdictional High Court decision in Commr of CGST, Gurugram v. Bharti Infratel Ltd and its own earlier precedents in the assessee's cases holding similar principles, and applied those ratios to set aside the impugned orders denying credit. [Paras 6, 7, 9]

Assessees are entitled to Cenvat credit on the capital goods and inputs relating to towers and shelters; impugned denials on this ground set aside.

Entitlement to Cenvat credit on input services used for setting up and operating telecom towers and shelters - HELD THAT: - The Tribunal held that the admissibility of credit on input services for towers and shelters is also settled. It followed the Larger Bench decision in Idea Cellular Ltd v. CST, Mumbai-IV [2024 (4) TMI 1314 - CESTAT MUMBAI (LB)] which construed the expression "input service" broadly and held that input services used in setting up and operating telecom towers qualify for credit when used in the course of providing taxable output services. The Tribunal noted subsequent pronouncements of various benches following that Larger Bench and applied that settled ratio to allow credit. [Paras 6, 8, 9]

Assessees are entitled to Cenvat credit on input services relating to towers and shelters; impugned denials on this ground set aside.

Final Conclusion: Following binding and subsequent judicial precedents, the Tribunal allowed the assessee appeals holding entitlement to Cenvat credit on inputs, capital goods and input services used for telecom towers and shelters for the periods in dispute, and dismissed the Revenue's cross appeals challenging the OIOs which had dropped demands.

Eligibility of CENVAT credit on telecom towers, prefabricated shelters and related capital goods - definition of ‘input services’ as provided under Rule 2(l) - input services used for erection and operation of telecom towers - Legality of transfer of unutilized CENVAT credit upon shifting centralized registration/centralized accounting - tests of movability and functionality.

Eligibility of CENVAT credit on telecom towers, prefabricated shelters and related capital goods - HELD THAT:- The Tribunal held that the issue is no longer res integra in view of the Hon'ble Supreme Court decision in M/s Bharti Airtel Ltd [2024 (11) TMI 1042 - SUPREME COURT] and subsequent Tribunal/High Court decisions following it. Applying the tests of movability and functionality, towers and prefabricated shelters qualify as 'goods' and as components/accessories of capital goods for provision of telecommunication services; consequently they fall within the definition of capital goods and inputs under the Cenvat Credit Rules. The Tribunal further followed decisions that extend this reasoning to input services used for erection and related activities, and therefore set aside the impugned orders denying such credit and allowed the assessee's appeals. [Paras 6, 7, 8]

Impugned orders denying CENVAT credit on the specified goods and input services set aside; appeals allowed.

Transfer of unutilized CENVAT credit on shifting of centralized accounting/registration from Jaipur to Gurgaon was sustainable and demand in respect of such transfer was rightly dropped - HELD THAT:- The Tribunal upheld the Adjudicating Authority's finding that Rule 10 applies to shifting or transfer of business (change of ownership, sale, merger, amalgamation, lease or transfer to joint venture) and not to mere relocation of centralized accounting/registration. The Commissioner had examined Rule 10 and concluded there is no statutory bar on shifting centralized accounting and billing; centralized registration is administrative and does not alter tax liability or credit rights. Precedent of this Tribunal and benches (Central Bank of India [2018 (4) TMI 1241 - CESTAT NEW DELHI], Mafatlal [2020 (6) TMI 61 - CESTAT AHMEDABAD], B.S.N.L. [2024 (1) TMI 583 - CESTAT CHANDIGARH]) supporting transfer where original credit is undisputed was applied. Consequently, the demand for transfer of unutilized credit was correctly dropped and the Revenue's appeal on this point was dismissed. [Paras 53, 54, 55, 56, 57]

Impugned order dropping the demand relating to transfer of unutilized CENVAT credit upheld; Revenue's appeal dismissed.

Final Conclusion: The Tribunal allowed the assessee appeals and set aside orders denying CENVAT credit on towers, shelters, related capital goods and input services, and dismissed the Revenue's appeal upholding the dropping of the demand arising from transfer of unutilized CENVAT credit upon change of centralized registration.

Availment of ineligible input services - Invocation of extended period - suppression or wilful misstatement - demands barred by limitation as well as on merits - activities related to business - liability to service tax as a commission agent under “Business Auxiliary Services” - burden of proof - intent to evade tax - failure to intimate applicable statutory provisions - difference in the taxable income shown in ST-3 returns and the income shown in the Balance Sheet.

Invocation of extended period requires evidence of suppression or wilful misstatement - HELD THAT:- The Tribunal held that the Revenue bore the burden of proving that the appellant had willfully suppressed facts or made misstatements with intent to evade tax, and that mere invocation of the extended period in the show cause notice was insufficient. No evidence was produced of any positive act of suppression or wilful misstatement; consequently the conditions for invoking the proviso to Section 73(1) were not satisfied and the demands under show cause notices invoking extended limitation were unsustainable (see paras 10, 17). [Paras 10, 17]

Extended period could not be invoked; demands for the periods charged are barred by limitation

Demand on mere comparison of return figures with balance-sheet figures without independent evidence - HELD THAT: - The Tribunal emphasised that services are intangible and the exact nature of services is best known to the parties; therefore the Revenue must produce agreements or other documents to show that the excess income in the balance sheet reflected consideration for taxable services. The show cause notices and orders relied only on the difference in figures and failed to bring any such evidence, rendering the demand unsupportable (see para 10). [Paras 10]

Demands based on comparison of ST-3 returns with balance-sheet figures, without corroborative evidence, are unsustainable

Allegations in the show cause notice - HELD THAT: - The Tribunal found that the Appellate Authority held the appellant to be a 'commission agent' on assumptions not contained in the show cause notice and that this finding traversed beyond the allegations made in the SCN and contradicted the Adjudicating Authority's findings. Such departure without evidence or proper notice rendered the impugned appellate orders unsustainable (see paras 15, 16). [Paras 15, 16]

Impugned orders are vitiated to the extent they traverse beyond the SCN or contradict the scope of allegations therein

The Tribunal held that not informing the appellant of the relevant statutory provisions applicable for the period charged is materially different from citing an incorrect provision; it results in want of notice and makes the demand untenable. The SCN for the period after 01-07-2012 did not specify the provisions applicable post that date and therefore the resultant demand could not be sustained (see para 16). [Paras 16]

SCN's failure to specify the provisions applicable to the post-01-07-2012 period vitiates the demand for that period

Interest and penalties - HELD THAT: - Having held the substantive demands to be barred by limitation and unsustainable for lack of evidence and defective notice, the Tribunal also concluded that consequential interest and penalties could not stand. The Tribunal distinguished authorities and circulars relied on by Revenue as factually different and inapplicable where fraud or established positive acts had not been shown (see para 18). [Paras 18]

Consequential interest and penalties are held untenable where the underlying demands are unsustainable

Final Conclusion: The Tribunal set aside the impugned appellate orders and allowed the appeals, holding the departmental demands (and consequential interest and penalties) unsustainable principally because extended limitation was wrongly invoked without evidence of suppression, demands were based on unsupported comparison of returns with balance-sheet figures, appellate findings traversed beyond show cause notices, and an SCN failed to specify applicable provisions for the post-01-07-2012 period.

Valuation of taxable services - ocean freight charges - reimbursable expenses - activity of the Appellant includes coordinating with importers/exporters from the time of picking containers till delivery at the destination port and till consignees take delivery of cargo - pure agent doctrine - principal-to-principal purchase - onus on department to prove reclassification of service - Whether the demand of service tax on the appellant on the allegation that the ocean freight collected from its customers is includible in the taxable value for the services rendered by the appellant, is tenable.

Whether ocean freight collected and reimbursed to third parties is includible in the taxable value of the appellant's services for the period 01-04-2013 to 31-03-2015 - HELD THAT:- The Tribunal applied the ratio of the Supreme Court in Intercontinental Consultants [2018 (3) TMI 357 - SUPREME COURT], holding that prior to the amendment of Section 67 effective 14-05-2015 reimbursable expenses (including air and sea freight) are not components of the value of the taxable service and Rule 5(1) could not validly enlarge valuation beyond the consideration for the service itself. The appeals concern the period 01-04-2013 to 31-03-2015, hence the law precluding inclusion of reimbursable expenditure in taxable value applies. The Show Cause Notice's inconsistent allegations (admitting reimbursement yet treating the amount as consideration for taxable service) and the department's failure to demonstrate that Section 67 as then in force authorised inclusion of such expenses led to the conclusion that the demands were unsustainable on this ground (paras 17-18, 16). [Paras 16, 17, 18]

Reimbursable ocean freight collected by the appellant is not includible in the taxable value for the period 01-04-2013 to 31-03-2015 and the demand on this ground is set aside.

Principal-to-principal purchase and sale of container space not a taxable service - onus on department to prove reclassification of service - HELD THAT: - The transaction between the appellant and their clients who were all exporters were again on principal-to-principal basis. In anticipation of receipt of orders, the appellant pre-books space in containers from the liners. It may result in profit to the appellant or loss if sufficient bookings cannot be obtained leading to wastage of space booked. The activity of the appellant was one of trading in Cargo space in containers. In other words, it was only a purchase and sale of space in the Containers for export of goods and that too on principal-to-principal basis. The Department has not shown that the appellant is an agent either of the Shipping liners or the exporters. As we had observed, there is no evidence let in in the Show Cause Notice that would warrant a change in classification as was proposed in the Show Cause Notice.

This Tribunal has already analysed the nature of such transaction of collection of Ocean Freight with markup by the assessee/appellant therein who was a multimodal transporter, as is the case of the Appellant herein, in the case of M/s. Geodis Overseas Private Limited v Commissioner of Service Tax, [2022 (6) TMI 1085 - CESTAT CHENNAI], relied upon by the Appellant.

When the appellant has obtained Registration under “Business Auxiliary Service” and “Goods Transport Agency Service” and when it is uncontroverted that the appellant had dealt with the shipping liners and the exporters on ‘principal to principal” basis the activity of trading in cargo space certainly is not in the nature of rendering a taxable service as has been held in the decision in Geodis Overseas noted supra. In any event, whether the Appellant’s service falls under “BAS” or “BSS” is rendered inconsequential in as much as that would not alter the legal position that the ocean freight so collected would not be includible in the taxable value so as to be exigible to service tax during the relevant period.

Undisputedly in the appellant’s own case for the earlier period this Tribunal [2021 (9) TMI 407 - CESTAT CHENNAI] has held in the Appellant’s favour. Revenue has not shown that the said decision has been appealed against or stayed by the Jurisdictional High Court or the Apex Court. Therefore, when the lis regarding the nature of the particular transaction and its exigibility to service tax inter se the parties has attained finality and all the more when there is no allegation or evidence that the present transactions are of a different nature, that forms yet another compelling reason to decide the present dispute in the Appellant’s favour. Given our aforesaid findings in the Appellant’s favour, addressing the alternate contentions advanced by the Appellant become superfluous.

The appellant's procurement and resale of container space on principal-to-principal basis does not amount to a taxable service for the relevant period; the impugned classification and attendant demand are unsustainable.

Final Conclusion: The appeals are allowed and the impugned demands for service tax (and consequential interest and penalties) in respect of ocean freight for the period 01-04-2013 to 31-03-2015 are set aside, the Tribunal relying on the Supreme Court's pre-amendment valuation principle, the appellant's principal-to-principal transactions, and the department's failure to justify reclassification.

Levy of service tax - incentives/discounts received by an authorised motor vehicle dealer from the manufacturer for achieving sales targets - category of Business Auxiliary Service - definition of taxable consideration and the negative list regime under Section 66D - principal-to-principal transaction - denial/reversal/demand of ineligible cenvat credit.

Leviability of service tax on target-based incentives -HELD THAT:- The Tribunal held that incentives received by the dealer from the manufacturer arise from a principal-to-principal sale relationship and constitute trade discounts forming part of the sale price of vehicles, not payment for any separate service. Applying precedent in the case of Sai Service Private Ltd. Vs. CCE,C&ST [2026 (2) TMI 1275 - CESTAT BANGALORE] and examining the dealership agreement, the incentives were held to relate to overall sales performance and not to any transaction-specific supply of service; consequently they do not fall within the ambit of taxable Business Auxiliary Service or the negative-list exclusion is triggered by the transfer of property in goods. The impugned demands of service tax on such incentives were therefore unsustainable. [Paras 6, 7, 13, 14]

Demands of service tax confirmed on incentives under the category of Business Auxiliary Service are set aside.

Admissibility of cenvat credit claimed on various input services - HELD THAT: - The Tribunal noted that the appellant furnished input invoices and supporting documents with the appeal papers which were not considered by the Commissioner. Since admissibility of the claimed cenvat credit requires factual verification of those documents by the field formation, the Tribunal remanded the issue for verification and fresh decision rather than deciding admissibility on the record before it. [Paras 8, 9]

Confirmation of demands relating to ineligible cenvat credit and service tax charged on utilisation of such credit is set aside and remitted for verification and decision on admissibility by the adjudicating authority.

Final Conclusion: The Tribunal set aside the demands of service tax on manufacturer-paid incentives to the dealer for the stated periods and remanded the question of admissibility of claimed cenvat credit to the adjudicating authority for verification of documents and fresh decision.

Liability to service tax - Clearing and Forwarding Agency Services includes consignment agent - classification of service as consignment agency for levy of service tax - invocation of extended period of limitation for suppression/non-disclosure - effect of pre-show-cause payment on imposition and quantification of penalty.

Clearing and Forwarding Agency Services - classification of service as consignment agency for levy of service tax - HELD THAT:- The Court examined the Consignment Agent Agreement which expressly designated the appellant as 'Consignment Agent' and recorded duties, receipt and banking of sale proceeds, monthly statements and turnover-based commission. Since the statutory definition of 'Clearing and Forwarding Agent' expressly includes a consignment agent and the activities recorded in the agreement correspond to consignment agency, the demand of service tax under the category of Clearing and Forwarding Agency Services was held to be justified. [Paras 5]

Appellant is a consignment agent and services rendered are taxable as Clearing and Forwarding Agency Services; the demand confirmed by the Commissioner is upheld.

Invocation of extended period of limitation for suppression/non-disclosure - HELD THAT: - The Court found that during investigation documents and sample transaction records showed that the appellant, though registered under Clearing and Forwarding Agent Services, had filed nil ST-3 returns and failed to disclose commission receipts. On that basis the Tribunal sustained the Commissioner's invocation of the extended limitation period for assessment. [Paras 5]

Invocation of the extended period of limitation is justified due to non-disclosure of commission receipts and filing of nil returns.

Effect of pre-show-cause payment on imposition and quantification of penalty - HELD THAT: - Although the demand was upheld, the Court noted that service tax with interest was paid before issue of the show-cause notice and that the appellant had paid 25% of the total penalty under Section 78. In view of these payments the Tribunal directed that no further penalty amount is payable and, while upholding the penalty under Section 77 for non-filing of returns, reduced it from the amount imposed to a lesser quantified penalty. [Paras 5]

No further penalty is payable beyond amounts already paid; penalty under Section 77 is upheld but reduced to Rs.5,000.

Final Conclusion: The Tribunal upheld the demand of service tax treating the appellant as a consignment agent within Clearing and Forwarding Agency Services for October 2007 to September 2012 and sustained invocation of the extended limitation period; however, in view of pre-show-cause payments the Tribunal directed that no further penalty is payable and reduced the penalty for non-filing of returns to Rs.5,000.

Tax liability with respect to ongoing projects - Denial of benefit of the composition scheme - treatment of composite contracts and the scope of the Works Contract - Taxability of composite works contracts prior to 01.06.2007.

Works contract composition scheme eligibility - Whether the appellant was eligible to opt for and avail the composition scheme for works contract on an ongoing residential construction project which commenced prior to 01.06.2007 - HELD THAT: - As per the decision of the Tribunal in the matter of NCC Ltd. Vs. Commissioner of Central Tax, Hyderabad [2023 (10) TMI 590 - CESTAT HYDERABAD], the issue was considered and it is held that:- " as the scheme of composition was introduced for the first time for ease of business, and to avoid harassment to the assessees, the window to pay tax under the composite scheme was provided. The benefit of the scheme to the appellant was denied as it could not opt for composition scheme in due time. Thus, we hold that benefit of composition scheme is available to the assessee, and accordingly the denial of benefit of composition scheme is set aside. "

Final Conclusion: The Tribunal allowed the appeal, set aside the order-in-original, and held that the appellant was entitled to the works contract composition scheme for the ongoing residential project in view of the Supreme Court's ruling that composite works contracts were not liable to service tax under pre-01.06.2007 heads; consequential relief, if any, to follow in accordance with law.

Interpretation of "Franchise" agreement - granted "Franchise" for the manufacture of goods of specifications, design and quality described to some other small manufacturing units, under the Notarised Agreements - representational right to sell or manufacture - Franchise Agreement, as defined under Section 65(48) of the Finance Act, 1994 - franchise service along with interest - imposition of penalty - HELD THAT: - 'Franchise' is an agreement, by which the franchisee is granted a representational right to sell or manufacture goods of a trademark, service mark, trade name or logo. The franchisee is an individual or a Company that buys the right to operate a business using the branding product and proven business model of an established company that is the franchisor. The franchisee pays upfront initial franchise fees and royalties, usually a percentage of gross sales of the franchisor, subject to following the specific rules on how to run a business with the exact ingredients, quality, specifications etc.

In the present case, the respondent did not give any right to manufacture its brand to the small unit and sell it directly to the customer. The franchisees were given only specifications, quantity of firebricks, or were directly supplied to the assessee or to the customer at a given rate mentioned in the purchase order. Therefore, there is no Authority to manufacture bricks under the brand name of the assessee and the liberty to sell in the open market. Thus, it has been wrongly treated as a "Franchise Agreement".

The Tribunal has rightly examined the issue involved in this case, and it found that the agreement entered into by the respondent with the manufacturer was not in the nature of a "Franchise Agreement" and the appellant did not provide franchise services to the manufacturer.

All the conditions of the franchise agreements are not being fulfilled in this case. We are in full agreement with the view taken by the learned Tribunal and do not find any ground to interfere with the impugned order. Hence, the question of law is answered negatively against the appellant.

Final Conclusion: The High Court affirmed the Tribunal's finding that the arrangements were not franchise agreements within the statutory definition and dismissed the appeal.

Export - goods removed under ARE-I - Entitlement to duty exemption contingent on proven export. - HELD THAT:- We do not find a good ground to interfere with the impugned order/judgment [2025 (11) TMI 1965 - RAJASTHAN HIGH COURT] in exercise of our jurisdiction under Article 136 of the Constitution of India. Accordingly, the special leave petition stands dismissed.

Pending application(s), if any, shall stand disposed of.

Validity of show cause notice issued without issuing a pre-show cause consultation notice (as mandated by Board circulars) -binding effect of Board instructions issued under Section 37B - applicability of Section 37B and Section 37C.

Mandatory pre-show cause consultation - HELD THAT: - The Court held that the Master Circular dated 10 March 2017 and the subsequent Circular dated 19 November 2020, issued by the CBEC under the powers conferred by Section 37B, impose a mandatory requirement of a pre-show cause consultation in cases of demand above the specified monetary threshold. The impugned show cause notice was issued without any prior notice for pre-show cause consultation and therefore breached the mandatory procedure prescribed by the Board. The Department's reliance on having issued a summons and on the petitioner's alleged non-cooperation did not satisfy or dispense with the statutory and circular requirement of issuing a pre-consultation notice prior to issuing the show cause notice. [Paras 14, 15, 16]

The impugned show cause notice is vitiated for having been issued in breach of the mandatory pre-show cause consultation requirement and is quashed.

Insufficiency of summons as substitute for pre-consultation notice - HELD THAT:- Having quashed the impugned show cause notice for non-compliance with the mandatory pre-consultation process, the Court directed the Department to undertake the pre-consultation process by issuing a pre-consultation notice within the specified timeline and to complete the consultation in accordance with law. The Court also directed that the period from institution of the petition shall be excluded for purposes of limitation if a fresh show cause notice is subsequently issued, and clarified that this exclusion is without prejudice to any other exclusion or extension available to the Revenue under law. [Paras 15, 16]

Department to issue pre-consultation notice within three weeks and complete pre-consultation within six weeks of receipt; limitation excluded from the date of institution of the petition as directed.

Final Conclusion: The Court quashed the impugned show cause notice for failure to comply with the mandatory pre-show cause consultation mandated by CBEC instructions issued under Section 37B, directed the Department to carry out the prescribed pre-consultation within stipulated timelines before issuing any fresh show cause notice, and excluded the period of the petition from limitation while preserving other legal extensions available to the Revenue.

Extended period of limitation under the Finance Act, 1994 - short payment - failed to produce contemporaneous records - Validity of show-cause notice issued beyond the period prescribed under Clause (b) of sub-section (1) of Section 73 - concurrent findings of fact - service tax on recharge coupons determined at time of receipt.

Applicability of the extended period of limitation for issuance of show-cause notice under the Finance Act, 1994 - HELD THAT:- The Court upheld the authorities' finding that the extended period of limitation applied. The appellate authority and the Tribunal relied on the Department's audit findings and the appellant's failure to produce records relating to sales and bill collections; those factual findings supported application of the extended limitation period. [Paras 9, 10]

Extended period of limitation applies and supports the confirmed demand.

Service tax on recharge coupons determined at time of receipt - HELD THAT: - The Court accepted the authorities' finding that sale of recharge coupons involves realisation of value immediately at the time of recharge, negating the appellant's contention that tax crystallised only on later receipt; for bill collection services the appellant failed to produce records to show timing of service and payment, and the factual findings were sustained. [Paras 9, 10]

The contention of payment-on-receipt for recharge coupons is without basis; the authorities' findings on timing of tax liability are sustained.

The Court observed that the demand was modest and that there were concurrent findings by the Assistant Commissioner, Commissioner (Appeals) and the Tribunal. In the absence of a substantial question of law, interference with concurrent factual findings was not justified. [Paras 7, 11]

No substantial question of law is made out; the appeal is not maintainable and is dismissed.

Final Conclusion: The High Court dismissed the appeal, holding that the extended period of limitation applied, the authorities' factual findings on timing of tax liability (notably in relation to recharge coupons) were sustainable, and no substantial question of law existed to justify interference with concurrent findings.

CENVAT credit -treatment of electricity generated in the co-generation plant and cleared outside the factory - expression "exempted goods" under Rule 2(d) - Reversal under Rule 6(3A) satisfies Rule 6 - Denial of the benefit of proportionate reversal on the ground that the option under Rule 6(3A) was not exercised within the prescribed time - demands barred by limitation under Section 11A - extended period not invoked.

Electricity cleared outside factory - liability under Rule 6 dependent on use of common inputs or input services - Electricity generated in the co-generation plant and wheeled out to the grid falls within the expression "exempted goods" but Rule 6 liability arises only where common inputs or input services have been used in the manufacture of both dutiable goods and such exempted electricity. - HELD THAT: - The Tribunal held that electricity is classifiable under Chapter 27 and is exempt from duty and therefore falls within "exempted goods" under Rule 2(d); however, mere classification does not automatically trigger liability under Rule 6(3). Liability under Rule 6 arises only to the extent CENVAT credit has been availed on common inputs or input services used for both dutiable products and the exempted electricity, and incidental or inevitable by products arising from the manufacturing process are not to be treated as independent products for denying credit benefits. [Paras 8]

Electricity cleared outside the factory is exempted goods, but Rule 6 liability arises only if common inputs/input services were used for both dutiable goods and that electricity.

Reversal under Rule 6(3A) satisfies Rule 6 - alternative statutory options under Rule 6 - HELD THAT: - In JPP Mills Pvt. Ltd. vs Commissioner of GST & Central Excise, Salem [2019 (1) TMI 54 - CESTAT CHENNAI], the Tribunal held that once the assessee reverses proportionate credit attributable to exempted goods, the requirement of Rule 6 stands satisfied and the department cannot compel the assessee to adopt the option of paying a fixed percentage of the value of exempted goods.

Relying on precedents and statutory scheme, the Tribunal held that Rule 6 offers alternative routes and that proportionate reversal in accordance with Rule 6(3A) achieves the object of Rule 6. Once proportionate credit attributable to exempted goods is reversed, a second recovery by demanding 5%/6% of value of exempted goods would produce an excessive recovery and defeat the CENVAT scheme; therefore, such demand is unsustainable on merits. [Paras 9]

Proportionate reversal under Rule 6(3A) satisfies the requirements of Rule 6 and precludes a demand under Rule 6(3)(i) for payment of a fixed percentage.

Denial of the benefit of proportionate reversal on the ground that the option under Rule 6(3A) was not exercised within the prescribed time. - HELD THAT: - The Tribunal observed that the intimation under Rule 6(3A) facilitates departmental verification but the rule does not make non intimation a ground for automatic denial of the substantive benefit. The records showed that proportionate reversal and intimation (by letters) had been made and the department did not dispute the correctness of the reversal; hence the procedural lapse could not be used to deny the benefit. [Paras 10]

Non-intimation within the prescribed time is a procedural defect and does not bar the benefit where proportionate reversal under Rule 6(3A) has been made and is not disputed.

Whether the demand raised in the show cause notices is barred by limitation and whether penalties are sustainable - HELD THAT: - The Tribunal applied the law that the normal limitation during the disputed period was one year and that the Finance Act, 2016 extension to two years is not retrospective to revive barred demands. As the extended period was not invoked and there were no allegations of fraud, suppression or wilful misstatement, the demands issued after expiry of the one year limitation are time barred; consequentially, penalties based on those demands cannot be sustained. [Paras 11]

The demands are time barred under Section 11A and the penalties imposed are also unsustainable in the absence of fraud or suppression.

Final Conclusion: The Tribunal set aside the impugned orders, holding that the appellant's proportionate reversal under Rule 6(3A) complied with Rule 6 and precluded a demand under Rule 6(3)(i), that procedural non intimation did not forfeit the benefit where reversal was effected, and that the show cause notices for March 2015 to March 2016 were time barred under Section 11A, rendering the demands and penalties unsustainable.

Transporting reject/waste materials from captive limestone mines to dumping yards - input services under Rule 2(l) - eligibility for cenvat credit - connection/nexus between service and manufacturing/mining activity - whether the transporting reject/waste materials from the mines to the dumping yards is an ‘input service’ and the Appellant is eligible for availing cenvat credit on the above service?

Input service - eligibility for cenvat credit - HELD THAT:- It is claimed that the transportation of reject/waste is connected directly or indirectly to the activity of mining and therefore such activity would definitely fall within the ambit of Rule 2(l) (ii) of CCR.

It is found that removal and transportation of such rejects is a technical and essential requirement for unearthing limestone and is directly or indirectly connected to the mining/manufacturing activity. The Tribunal treated the activity as covered by the classification upheld in Thriveni Earthmovers (P) Ltd. [2009 (4) TMI 9 - CESTAT CHENNAI], observed that the Commissioner's reliance on an unrelated decision was misplaced, and held that the service-tax classification supporting treatment as mining-related services applies for the purpose of Central Excise credit as well. [Paras 4, 5, 6, 7]

The transporting of rejects/waste from the mines to dumping yards is an input service within Rule 2(l) and the impugned denial of cenvat credit is set aside; the appeals are allowed with consequential benefits as per law.

Final Conclusion: The Tribunal allowed the appeals, holding that removal, loading and transportation of mining rejects to dumping yards constitute an input service connected to mining/manufacturing under Rule 2(l) CCR 2004 and that the denial of cenvat credit in the impugned order was unsustainable.

Entitlement to exemption under Notification No. 74/93-C.E., for manufacture of PSC poles - department of the State Government - twin-conditions for statutory exemption.

Whether the appellant, a State Government Undertaking, was entitled to duty exemption under Notification No. 74/93-C.E. - HELD THAT:- The Tribunal held that the exemption under the notification is subject to twin conditions: the goods must be manufactured by a factory belonging to the State Government and the goods must be intended for use by a department of that Government. The appellant, being a State Government Undertaking and not a department of the Government, does not satisfy the first condition; ownership by the State does not equate the undertaking with a State Government department. The Tribunal applied the principle that both conditions must be fulfilled and, relying on earlier Tribunal precedent in the case of Maharashtra State Electricity Distribution Co. Ltd. vs. Commissioner of Central Excise, Aurangabad [2019 (4) TMI 722 - CESTAT MUMBAI], concluded that manufacture by a non-departmental body and use by the body itself do not meet the notification's requirements. [Paras 3, 4]

Exemption under Notification No. 74/93-C.E. denied; appeal dismissed for want of merit.

Final Conclusion: The Tribunal dismissed the appeal on merits, concluding that the appellant, being a State Government Undertaking and not a department of the State Government, did not satisfy the twin conditions of Notification No. 74/93-C.E. and therefore was not entitled to the claimed exemption.

Decline to initiate civil contempt for absence of civil contempt - availability of alternative remedy - exercise of discretionary jurisdiction -

Decline to initiate civil contempt for absence of civil contempt - The High Court's refusal to initiate contempt proceedings on the ground that there was no element of civil contempt was upheld. - HELD THAT:- It is settled law that once the high court, upon application of mind, declines to entertain a writ petition in the exercise of its discretionary jurisdiction on the ground that an efficacious alternative remedy for grant of relief is available but such remedy has not been pursued by the petitioner, the proceedings do not survive and must draw to an end then and there; however, in such a circumstance when no final relief can effectively be granted on the petition, it is impermissible to pass an order in the nature of an interim relief [either by granting stay of operation of the order under challenge or by directing status quo to be maintained] till such time the aggrieved petitioner approaches the alternative forum. Such an order, as and when passed, would be in the teeth of a Constitution Bench decision of this Court in State of Orissa v. Madan Gopal Rungta [1951 (10) TMI 19 - SUPREME COURT].

Four other Constitution Benches in Amarsarjit Singh v. State of Punjab [1962 (2) TMI 91 - SUPREME COURT], State of Orissa v. Ram Chandra Dev [1963 (11) TMI 82 - SUPREME COURT], Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. [1983 (9) TMI 218 - SUPREME COURT] and Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc.[2012 (9) TMI 912 - SUPREME COURT] have followed the dictum in Madan Gopal Rungta (supra) spelling out the contours within which interim relief can be granted.

Final Conclusion: The special leave petition was dismissed, upholding the High Court's finding of no civil contempt; the Court reiterated the binding principle that a High Court which declines to decide rights because an efficacious alternative remedy exists must not grant interim relief as a final order and directed lower courts to follow the established precedents.

Negotiable Instruments Act, 1881 - Dishonour of cheques - legally enforceable debt or liability - Presumption under Sections 118 and 139 - onus to rebut statutory presumption and adducing independent evidence - failure to reply to statutory demand notice as evidential inference - defence - lost cheque book and the complainant by preparing a forged cheque.

Whether the cheque being proved to bear the accused's signature attracts the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act - HELD THAT:- The Court held that the cheque Ex.P/1 was established to be signed by the accused and, therefore, the statutory presumptions under Sections 118 and 139 arose in favour of the complainant. The Court rejected the lower appellate Court's reasoning that presentation of the cheque on the same day as its issuance or the accused's alleged bank balance/behavior negated those presumptions, observing that such reasoning was not the plea taken by the accused and was factually flimsy. The accused did not produce evidence to rebut the presumptions. [Paras 13, 18, 22]

The statutory presumptions under Sections 118 and 139 are attracted and were not rebutted.

Onus to rebut statutory presumption and adducing independent evidence - failure to reply to statutory demand notice as evidential inference - HELD THAT: - In the case of Sanjabij Tari [2025 (9) TMI 1634 - SUPREME COURT], the Hon'ble Apex Court in para 29, 30 & 31 has held that when the accused has failed to reply to the statutory notice under Section 138 of the NI Act that leads to an inference that there is merit in the complainant’s version, the accused has the initial burden to set up the defence in his reply to the demand notice that the complainant did not have the financial capacity to advance the loan. When a statutory notice is not replied, it has to be presumed that the cheque was issued towards the discharge of liability.

The Court found that the accused did not lead any independent evidence or examine witnesses to demonstrate that the cheque was not issued in discharge of a debt or that the complainant lacked wherewithal to advance the amount. Service of the demand notice was established and no reply was given by the accused; the Court relied on the principle that failure to reply to the statutory notice permits an inference favouring the complainant and that the initial burden to set up a defence lies on the accused, who may rebut by producing independent materials. [Paras 16, 17, 21, 23]

The accused failed to rebut the statutory presumptions and did not discharge the onus of adducing independent evidence.

Assessment of appellate factual inferences - HELD THAT: - The High Court held that the appellate Court's inference (that issuance and presentation on the same day and the accused's bank behaviour negatived the complainant's case) was unsustainable. The High Court observed that presentation on the same day is not unnatural, the appellate reasoning went beyond the accused's pleaded case, and such inferences could not displace the statutory presumptions in the absence of rebuttal evidence. [Paras 10, 13]

The appellate Court's factual inferences were rejected as baseless and incapable of displacing the statutory presumptions.

Final Conclusion: The appeal is allowed; the High Court set aside the acquittal and restored the trial Court's conviction and sentence as the cheque was proved to bear the accused's signature, statutory presumptions under Sections 118 and 139 applied and were unrebutted, and the accused failed to reply to the demand notice or to adduce independent evidence to discharge the onus.