TaxTMI Updates e-Newsletter
Mar 27,2026

Anti-profiteering - Commensurate reduction in prices - State-regulated ceiling price and GST benefit pass-through - Inclusion in transaction value - Rebuttable presumption - Burden of proof - Consumer Welfare Fund - Prospective operation of penalty provision.

Anti-profiteering - Commensurate reduction in prices - State-regulated ceiling price and GST benefit pass-through - HELD THAT:- The Tribunal held that Section 171 casts a clear statutory obligation that any reduction in tax must result in a corresponding reduction in the price payable by the consumer. On the facts, the Respondent did not reduce ticket prices after the GST rate reduction with effect from 01.01.2019 and had instead increased the base price, thereby retaining the tax benefit. The Telangana cinema regulatory framework was held to prescribe only the maximum permissible ticket price and not to curtail the theatre owner's discretion to reduce prices so as to pass on GST benefits. The High Court order relied upon by the Respondent was found not to advance its case, as the Tribunal treated the writ proceedings referred to therein as pertaining to the pre-GST regime. The plea that higher prices had been sought through letters to the Joint Collector was also rejected since no permission letter or order authorising such increase for the relevant period was produced. The Tribunal further held that any attempt to justify non-reduction of prices after a tax cut required cogent proof of genuine cost escalation, which the Respondent had failed to furnish. It therefore upheld the DGAP's methodology and quantified profiteering. [Paras 15]

The Respondent was held to have contravened Section 171 by not passing on the benefit of the GST rate reduction, and the profiteered amount was held payable for deposit in the Consumer Welfare Funds.

Inclusion in transaction value - Tax-free maintenance charge - HELD THAT: - The Tribunal held that there is no provision in the CGST Act permitting exclusion of the maintenance charge collected along with the cinema ticket from the taxable value. Any amount collected as part of the cinema ticket was treated as forming part of the total ticket value and, therefore, had to be considered both for discharge of GST and for determination of the commensurate price after rate reduction. The Respondent's contention that the amount was tax-free under the State regime was accordingly rejected. [Paras 15]

The maintenance charge formed part of the ticket value and was rightly included in the anti-profiteering computation.

Prospective operation of penalty provision - Penalty under Section 171(3A) - HELD THAT: - The Tribunal held that the penalty provision came into force only with effect from 01.01.2020, whereas the contravention under consideration related to the earlier period. Since the alleged violation fell before the commencement of the penalty provision, no penalty could be imposed. [Paras 16]

No penalty was held imposable under Section 171(3A) for the relevant period.

Final Conclusion: The Tribunal held that the Respondent had profiteered by not reducing cinema ticket prices despite reduction in GST rates and directed deposit of the profiteered amount in the Consumer Welfare Funds with interest. The plea based on State-regulated ticket ceilings and the exclusion of maintenance charges was rejected, while penalty was declined as the penal provision was not in force during the relevant period.

Entitlement to grant Regular bail - wrongly avail fake ITC by showing wrong bills - Parity in bail.

Regular bail - Completion of investigation - Parity in bail - HELD THAT: - The Court noted that the petitioner had remained in judicial custody from 29.01.2026, that accused No. 3 had already been granted bail, and that the investigation was already completed. On that basis, and having regard to the continued incarceration of the petitioner, the Court considered it fit to enlarge him on regular bail subject to conditions. [Paras 6]

Regular bail was granted to the petitioner subject to the conditions imposed by the Court.

Final Conclusion: The criminal petition was allowed and the petitioner was released on regular bail on the grounds of completed investigation, continued judicial custody, and parity with the co-accused already enlarged on bail.

Validity of service through the common GST portal after cancellation of registration - effective service u/s 169 of the CGST Act - right to personal hearing u/s 75(4) of the CGST Act - audi alteram partem - Opportunity of personal hearing - Principles of natural justice.

Portal-based service of notice - Ex parte assessment - Personal hearing - HELD THAT:- The Court held that the controversy stood covered by the Allahabad High Court decision by its own earlier decision in M/s Jaipal Singh vs. Commissioner, State Goods and Services Tax Commissionerate, Dehradun, Uttarakhand & another [2026 (2) TMI 995 - UTTARAKHAND HIGH COURT] Proceeding on the admitted facts, it accepted that the assessment had been made ex parte after portal-based notice and without granting the hearing contemplated under Section 75(4). On that basis, the impugned assessment order and consequential recovery were quashed, while preserving liberty to the department to continue the proceedings afresh in accordance with law after obtaining the petitioner's reply and granting personal hearing. [Paras 7, 8, 9]

The impugned assessment order and recovery citation were quashed, and the matter was left open for fresh adjudication after reply to the show-cause notice and due opportunity of personal hearing.

Final Conclusion: The writ petition was disposed of by quashing the ex parte assessment order and the consequential recovery proceedings. The petitioner was permitted to respond to the show-cause notice, and the department was left free to pass a fresh order in accordance with law after granting personal hearing.

Seeking to enlargement of bail - Offence punishable under Sections 132(1)(b)(c), (f) and (I) read with Section 132(1)(i) of the Central Goods and Service Tax Act, 2017. - Parity with co-accused.

Regular bail - Completion of investigation - Parity with co-accused - HELD THAT: - The Court noted that the petitioner had remained in judicial custody from 29.01.2026, that accused No. 3 had already been granted bail, and that investigation was already completed. On that basis, it held that continued incarceration of the petitioner was not warranted and directed release on regular bail subject to conditions regarding bond, appearance before the respondent authorities, and compliance with the applicable statutory conditions. [Paras 6]

The petitioner was ordered to be released on regular bail subject to conditions.

Final Conclusion: The criminal petition was allowed and the petitioner was granted regular bail, the Court having considered the period of custody, completion of investigation, and parity with the co-accused already enlarged on bail.

Entitlement to regular bail -GST offence - wrongful availment and passing of input tax credit under the GST enactments - Pre-trial Liberty.

Regular bail - Post-charge-sheet custody - Absence of antecedents - HELD THAT: - This Court has taken into consideration the law laid down by the Hon’ble Apex Court in the case of Sanjay Chandra v. Central Bureau of Investigation[2011 (11) TMI 537 - SUPREME COURT].

The Court considered that the complaint had already been filed, the applicant had been in custody since arrest, no criminal antecedents were shown, and the maximum punishment indicated was five years. It also noted that, having regard to the nature of the allegations, the apprehensions of the prosecution could be addressed by imposing suitable conditions, and that the department was otherwise empowered to adopt appropriate recovery and penalty proceedings. On that assessment, and without entering into detailed examination of the evidence, the Court held it to be a fit case for exercise of bail discretion. [Paras 6, 7]

Regular bail was granted subject to conditions.

Final Conclusion: The application for regular bail was allowed. The Court directed release of the applicant on conditions, holding that continued custody was not warranted in the circumstances of the case.

Maintainability of Writ jurisdiction against GST adjudication orders - remedy of filing appeal available under Section 107 - Alternative statutory remedy - requirement of pre-deposit justified bypassing that remedy - classification of spare parts and raised differential tax demand .

Alternative statutory remedy - Pre-deposit requirement - Writ jurisdiction - The writ petition against the adjudication order was not entertained where a statutory appeal was available, and the requirement of pre-deposit was held insufficient to invoke writ jurisdiction. - HELD THAT: - The Court found that the impugned order contained a specific determination on the classification of the petitioner's spare parts and the consequential rate of tax. Since an appeal under Section 107 was admittedly available, the Court declined to examine the merits in writ jurisdiction. It held that the statutory requirement of making a pre-deposit for maintaining the appeal could not, by itself, justify bypassing the prescribed appellate remedy. The petitioner's plea regarding a favourable order passed in similar facts by an authority in another State was left open to be urged before the appellate authority. [Paras 6, 8, 9, 10]

The petitioner was relegated to the statutory appellate remedy, with liberty to raise all pleas before the appellate authority, which was directed to consider them on merits uninfluenced by any observation in the order.

Final Conclusion: The writ petition was disposed of without examining the merits of the adjudication order. The petitioner was left free to pursue the statutory appeal, and all contentions were kept open for decision on merits by the appellate authority.

Seeking Rectification of errors in GSTR-1 - wrong mention of Credit Note in the GSTR-1 - Mismatch between GSTR-1 and GSTR-3B - statutory scheme - Denial of input tax credit​​​​​​​ - time limit under Section 16(4) - Opportunity to explain under Rule 88C - Retrospective entitlement to input tax credit - Can this mistake which crept in the GSTR-1 be allowed to be corrected subsequently.

Mismatch between GSTR-1 and GSTR-3B - Rectification of bona fide errors - Opportunity to explain - HELD THAT:- The Court held that the mismatch arose from the petitioner's asserted human error in reporting the tax rate in four invoices in GSTR-1 and in wrongly mentioning the credit note, while the corresponding particulars were correctly reflected in GSTR-3B and GSTR-9F. Referring to the principle recognised in Central Board of Indirect Taxes and Customs Vs. M/s. Aberdare Technologies Private Limited and Others [2025 (4) TMI 101 - SC ORDER], the Court held that bona fide errors in GSTR-1 are capable of correction. It further noted that Rule 88C contemplates intimation and an opportunity to explain such mismatch, but the authority proceeded straightaway on the basis of the Explanation to section 75(12) and imposed liability without calling for the petitioner's explanation. In that view, the petitioner had to be given an opportunity to explain the mismatch and produce material to show that the applicable tax on the four invoices was 12% and not 18%. [Paras 26, 27, 28]

The impugned order was set aside on this aspect and the petitioner was granted time to explain the mismatch before the proper officer, who was directed to decide the acceptability of the explanation and proceed in accordance with the Act and the Rules.

Input tax credit beyond section 16(4) - Retrospective operation of section 16(5) - HELD THAT: - The Court held that the basis on which the authority had denied input tax credit stood displaced by the insertion of section 16(5), which operates notwithstanding sub-section (4) and applies to invoices or debit notes pertaining to Financial Years 2017-18, 2018-19, 2019-20 and 2020-21. Since the petitioner's GSTR-3B for March, 2019 was filed on 13.03.2021, it fell within the extended statutory window up to 30.11.2021. Consequently, the rejection of the petitioner's claim for input tax credit for that period was unsustainable in law. [Paras 29, 30, 31]

The denial of input tax credit was held unsustainable, and the petitioner was declared entitled to claim input tax credit for the returns filed for Financial Year 2018-19 in terms of section 16(5) of the CGST Act.

Final Conclusion: The Court set aside the impugned order under section 73. It held that the petitioner must be given an opportunity to explain the GSTR-1 and GSTR-3B mismatch, and that the denial of input tax credit for Financial Year 2018-19 was unsustainable in view of section 16(5).

Validity of the notice calling upon the petitioner to make good the pre-deposit for filing an appeal before the GST Appellate Tribunal - statutory remedy of appeal -- short payment towards consequential interest - HELD THAT:- Having heard learned counsel for the parties and having perused the record, we are of the opinion that it would be in the fitness of things that the Deputy Commissioner of State Tax Kothrud_501, NODAL-2, Pune, passes an appropriate order on the notice dated 05 March 2025 (supra) on which a hearing has already been concluded.

The petitioner intends to file a stay application before the GST Tribunal as in pursuance of an order passed by this Court in The Hongkong and Shanghai Banking Corporation Ltd. v/s. State of Maharashtra [2026 (2) TMI 1389 - BOMBAY HIGH COURT] to enable filing of interim applications, a portal is now available. We are accordingly inclined to dispose of this petition.

The petition was disposed of as premature, with a direction to the Deputy Commissioner to pass an order on the impugned notice within one week; the petitioner was permitted to move an interim stay application before the Tribunal, any contemplated recovery was directed to be preceded by 10 days' prior notice, and all contentions were kept open.

Seeking Release of goods and conveyance pending revisional proceedings - satisfaction of the liability - Indemnity bond as condition for provisional release.

Release of goods and conveyance pending revisional proceedings - Indemnity bond as condition for release - HELD THAT: - The Court proceeded on the basis that the first appellate authority had modified the original confiscation order and imposed liability under Section 129(1)(a), and that such liability had already been satisfied by the petitioner. As the revisional proceedings were still pending and had not culminated in a final determination reviving the order under Section 130, the Court held that release of the goods and conveyance could be granted, but only on terms protecting the revenue. That protection was secured by requiring the petitioner to furnish an indemnity bond and remain bound by the undertaking filed, with liberty to the revenue to enforce the final revisional outcome. [Paras 5, 6, 10, 11, 12]

The revenue was directed to release the goods and conveyance on the petitioner furnishing an indemnity bond, and all contentions on the merits of the revisional proceedings were left open to be urged before the revisional authority.

Final Conclusion: Both writ petitions were disposed of by directing release of the goods and conveyance subject to an indemnity bond and adherence to the undertaking filed by the petitioner. The merits of the revisional proceedings were not adjudicated and were expressly kept open for consideration by the revisional authority.

Alternate Remedy - application filed by the petitioner in Form GST SPL-02 - HELD THAT:- With the consent of the learned counsel for the petitioner and learned Special Government Pleader for the respondents, this writ petition is being disposed of at the time of admission.

The petitioner was granted liberty to file an appeal against the impugned order partially rejecting the application for settlement under Section 128A of the Act, and the appellate authority was directed to entertain it if filed within the stipulated time and dispose of it on merits in accordance with law.

Challenged the GST demand order - Statutory limitation for appeal - Alternative appellate remedy under GST.

Statutory limitation for appeal - Alternative appellate remedy under GST - HELD THAT: - The Court held that the petitioner ought to have pursued the statutory appeal under Section 107 within the prescribed time and that the writ petition had been filed long after expiry of that limitation. Applying the principle stated in Asstt. Commr.(CT), LTU, Kakinada V. Glaxo Smith Kline Consumer Health Care Ltd.[2020 (5) TMI 149 - SUPREME COURT], the Court accepted that the limitation for filing appeal under the Act could not be extended. At the same time, considering that the petitioner may have a case on merits, the Court granted liberty to file an appeal before the appellate authority, subject to deposit of 25% of the disputed tax within the time fixed, with adjustment of any amount already recovered towards that requirement, and directed that if such appeal was filed within that time it should be decided on merits without reference to limitation. [Paras 4, 5, 7, 8, 9]

The writ petition was disposed of by declining interference on the limitation issue, while granting conditional liberty to file an appeal before the appellate authority.

Final Conclusion: The Court held that the statutory time limit for filing appeal could not be bypassed by invoking writ jurisdiction after limitation had expired. Nevertheless, it granted the petitioner conditional liberty to file an appeal, to be considered on merits if filed within the time granted and upon the stipulated deposit.

Validity of rejection of the petitioner's waiver application under Section 128A(1) - Statutory eligibility - Opportunity of hearing - Recovery proceedings -underlying adjudication order had been passed under Section 74.

Eligibility for waiver application - HELD THAT:- The Court found that the impugned order rejected the application by treating it as arising from an order under Section 74 and therefore as ineligible under Section 128A. On examining the assessment order for the relevant tax period, the Court noted that it had actually been passed under Section 73, and this was also confirmed on behalf of the respondent. Since the rejection proceeded on an incorrect statutory premise, the order could not be sustained. As there was also some doubt regarding the actual payments made by the petitioner, the Court did not adjudicate that aspect on merits and directed fresh consideration after hearing the petitioner. [Paras 11, 12, 13, 14]

The impugned order was quashed and the matter was remitted for fresh consideration after affording hearing to the petitioner; the question of sufficiency of payment was left open for reconsideration.

Final Conclusion: The writ petition was disposed of by quashing the rejection of the waiver application, since it rested on an incorrect assumption regarding the statutory basis of the assessment order. The matter was remitted to the authority for fresh orders after hearing the petitioner, with liberty to proceed in accordance with law if the tax amount had not in fact been fully paid.

Condonation of delay - rejection of application seeking rectification -delay in filing the statutory appeal under Section 107 of the CGST/KGST Act, 2017 - Bona Fide Prosecution.

Condonation of delay - Bona fide pursuit of remedy before wrong forum - Appeal limitation - HELD THAT:- The Court noticed that, though the order-in-original was appealable under Section 107 and the statutory outer limit was four months from that order, the assessee had in the meantime pursued a rectification application, which was later rejected. Accepting the explanation that rectification had been pursued under a bona fide wrong advice and that the substantive remedy was appeal, the Court held that the time spent in pursuing rectification could be taken into account as time spent under a bona fide belief before a wrong forum. Since the appeal had been filed within four months from the rejection of the rectification application, the ends of justice required that the delay be condoned and the appeal be heard on merits. [Paras 7, 8, 9]

The appellate order rejecting the appeal on limitation was set aside, the delay was condoned, and the appeal was directed to be taken on record and re-adjudicated on merits with all contentions kept open.

Final Conclusion: The writ petition was disposed of by setting aside the appellate order passed on limitation and directing rehearing of the statutory appeal on merits. The Court condoned the delay in view of the assessee's bona fide pursuit of rectification proceedings.

Maintainability of writ against show cause notice- Delhi Jal Board for carrying out certain works - Status of local authority - Whether the works assigned by the Delhi Jal Board to private contractors would attract GST at the rate of 12% or 18%.

Maintainability of writ against show cause notice - Pure question of law - HELD THAT:- The Court treated the dispute regarding the status of Delhi Jal Board as a legal issue requiring determination in order to avoid protracted proceedings. On that basis, it held that the matter deserved consideration in the writ petitions notwithstanding that the impugned proceedings were at the show cause notice stage. [Paras 14]

The writ petitions were entertained for consideration on the legal issue arising from the show cause notice.

Since the Court found that the controversy as to whether Delhi Jal Board is a local authority required adjudication as a legal issue in writ proceedings, it considered it appropriate to protect the petitioners from continuation of the impugned proceedings in the meantime. [Paras 14]

Proceedings in the impugned show cause notice were stayed pending further consideration.

Final Conclusion: The Court did not decide the GST rate issue on merits. It held that the question whether Delhi Jal Board is a local authority raises a legal issue fit for consideration in writ jurisdiction and, pending such consideration, stayed the proceedings under the impugned show cause notice.

Anti-profiteering - benefit of input tax credit to homebuyers by commensurate reduction in the price of flats - liability to pay the profiteered amount together with GST on the additional realisation - substantive framework under Section 171 - Interest on profiteered amount.

Anti-profiteering - Input tax credit benefit in real estate - Project-wise area based methodology - HELD THAT: - Applying the principle stated in Reckitt Benckiser India Pvt. Ltd. [2024 (1) TMI 1248 - DELHI HIGH COURT], the Tribunal held that in a real estate project the total savings arising from GST had to be determined for the project and then apportioned on total area to arrive at the per square foot benefit. On the record, the pre-GST ratio of credit to purchase value was nil, whereas in the post-GST period the Respondent availed GST credit resulting in a 17.99% ratio, showing actual savings on introduction of GST. The Tribunal also treated the Respondent's verified statements before the erstwhile authority and the High Court as judicial admissions that profiteering had occurred, leaving only the quantum in dispute. The plea that only credit on goods could be considered, or that unavailed pre-GST CENVAT credit on input services should be notionally adjusted because it had not been claimed due to error, was rejected. The Tribunal held that the computation had correctly taken the total additional ITC benefit actually availed in the post-GST regime and that the Respondent's failure to avail pre-GST credit could not dilute its statutory obligation to pass on the benefit to buyers. On that basis, the profiteered amount of Rs. 2,07,08,131/- was upheld. [Paras 20, 21, 22, 23, 24]

The DGAP's computation of profiteering at Rs. 2,07,08,131/- was accepted, and the Respondent's objections on methodology and exclusion of service-related credit were rejected.

Inclusion of GST in profiteered amount - GST collected on the excess realization formed part of the amount required to be returned to the homebuyers. - HELD THAT: - Relying on the principle noticed from Reckitt Benckiser India Pvt. Ltd. v. Union of India, the Tribunal held that where the supplier realizes a higher amount from buyers by not passing on the intended tax benefit, the GST collected on such additional realization is also liable to be included in the profiteered amount. The reasoning adopted was that the tax concession was intended to benefit consumers, and collection of GST on the inflated price defeats that object. [Paras 24]

The profiteered amount was held payable together with GST at 12%, taking the total returnable amount to Rs. 2,31,93,107/-.

Interest on profiteered amount - HELD THAT: - Having upheld the anti-profiteering liability and the inclusion of GST collected on the additional realization, the Tribunal held that interest was also payable under the applicable rule from the date of payment of the last instalment by each buyer. The interest direction was made consequential to the finding that the Respondent had retained amounts that ought to have been passed on or returned. [Paras 24]

Interest at 18% was directed to be paid to each homebuyer from the date of payment of the last instalment on the amount determined for that buyer.

Final Conclusion: The Tribunal upheld the DGAP's reinvestigation and held that the Respondent had profiteered by not passing on the post-GST ITC benefit to the homebuyers. It directed return of the profiteered amount together with GST and 18% interest to the affected buyers in the manner specified.

Notice to a dead person - Validity of consequential assessment proceedings - mandate of Section 159(1) - Proceedings against legal representatives

HELD THAT: - The Court held that it was undisputed that the impugned proceedings had been drawn against a person who had already died.

Relying on Meet Lalwani v. Income-tax Officer and another [2023 (11) TMI 1196 - MADHYA PRADESH HIGH COURT] Court accepted the principle that a notice issued to a dead person and all consequential proceedings arising therefrom are null and void.

As further held that proceedings against legal representatives could be continued only where proceedings had already been initiated while the assessee was alive; such provisions could not validate initiation itself after death. Since, in the present case, the proceedings were admittedly initiated after the demise of the assessee, the defect went to the root of jurisdiction. [Paras 6, 7, 8]

Final Conclusion: The Court held that the department could not initiate reassessment-related proceedings against a deceased person, and that the machinery relating to legal representatives did not cure such initiation after death. The impugned proceedings were accordingly set aside in entirety.

Reassessment of assessment - review v/s reopening - change of opinion - Audit objection as basis for reopening - Reopening on same material - permission to re-look or re-examine the documents that were filed and considered by him in the original assessment proceedings - deduction u/s 80G in respect of expenses incurred on Corporate Social Responsibility (CSR) is allowable.

HELD THAT: - The Court found that, during the original assessment, the claim for deduction under Section 80G had been specifically scrutinised; queries were raised, replies and supporting documents were furnished, and the claim was thereafter substantially allowed with only a minor disallowance. The return itself disclosed that the CSR expenditure disallowed in computation had been claimed as donation under Section 80G, and those materials were already before the assessing authority.

It is settled law that the proceedings under Section 148 of the IT Act cannot be initiated to review the earlier stand adopted by the assessing officer. The assessing officer cannot initiate reassessment proceedings to have a re-look or re-examine the documents that were filed and considered by him in the original assessment proceedings.

In these circumstances, the subsequent reopening founded on the audit memo did not rest on any new tangible material, but merely sought to revisit the earlier view taken on the same record. The Court held that reassessment cannot be used as a power of review, and reopening on such basis amounts to a mere change of opinion, which is impermissible under the scheme of Section 147. [Paras 20, 23, 24, 25, 28]

The impugned notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 were quashed on the sole ground that the reassessment proceedings were based on a mere change of opinion; all other grounds were left open.

Final Conclusion: The Court allowed the writ petition and quashed the impugned reassessment proceedings for Assessment Year 2018-19, holding that the reopening was founded only on a change of opinion on material already examined in the original assessment. All other grounds raised in challenge to the reassessment were expressly kept open.

Reopening of concluded assessment - Failure to disclose fully and truly all material facts or not - non-deduction of TDS in respect of payments made to horse owners as stake money - HELD THAT: - The Court found that the assessment for the AY 2012-13 had already been completed u/s 143(3) after scrutiny and that the AO had examined the question of non-deduction of tax on payments connected with the horse owners' accounts.

The later attempt to reopen proceeded on the premise that payments made to horse trainers should be treated as the assessee's income and disallowed for non-deduction of tax. The Court held that, on the assessee's case, those amounts were maintained in the horse owners' accounts, were not recognised as the assessee's income, and no expenditure was claimed by the assessee in respect of such payments; therefore, disallowance on that basis was not attracted.

More importantly, once a scrutiny assessment stands concluded, the AO bears a heavy burden to show that escapement of income occurred because of the assessee's failure to make a full and true disclosure. Since the reasons recorded for reopening did not satisfy that statutory requirement, the concluded assessment could not be reopened. [Paras 7]

The reopening notice for the assessment year 2012-13 was rightly quashed and no interference with the order under appeal was warranted.

Final Conclusion: The writ appeal was rejected. The Court affirmed that the reassessment for the assessment year 2012-13 could not be sustained, as the Revenue failed to establish escapement of income attributable to any failure by the assessee to make a full and true disclosure in the original scrutiny assessment.

Rejecting the application filed u/s 264 - huge delay of 1460 days in filing the Revision Application - excuse put forth for the delay, namely that there were disputes between the partners of the Firm which precluded the Firm from filing its Revision Application on time

HELD THAT: - The Court held that the explanation put forward for the long delay was vague and did not establish any sufficient cause. It found that, during the very period in which disputes among partners were relied upon as the cause of delay, the assessee-firm had continued to comply with statutory requirements, including timely audits and filing of returns, which showed that nothing prevented it from filing the revision application within time.

On that basis, the Commissioner's view that the delay was not properly explained was a plausible and possible view, and therefore did not warrant interference in writ jurisdiction. The Court, however, observed that once the authority rejects the application on the ground of delay, it ought not to comment on the merits. [Paras 5, 6, 7]

The writ petition was dismissed, and the rejection of the revision application on the ground of unexplained delay was sustained; the findings on merits in the impugned order were directed to be ignored and not treated as a precedent.

Final Conclusion: The Court declined to interfere with the order refusing condonation of delay in the revision proceedings for Assessment Year 2013-14. While dismissing the writ petition, it clarified that the authority's observations on the merits of the revision claim must be ignored and should not operate as a precedent.

Transfer Pricing Officer jurisdiction to pass penalty orders - alternate remedy - As argued only the National Penalty Centre/ Faceless Assessment Centre that could have issued a Show Cause Notice and imposed penalty on the Petitioner under Section 271G of the I T Act.

HELD THAT:- Petitioner, on taking instructions, stated that he would like to withdraw the above Writ Petition with liberty to avail of the alternate remedy.

Since the issue whether the Transfer Pricing Officer would have jurisdiction to issue the penalty order is alive, and will be decided by the CIT(A) (in the Appeal proposed to be filed by the Petitioner), we direct that till the aforesaid Appeal is heard and disposed of, and for a period of four weeks thereafter, the impugned penalty order dated 31st July, 2025 shall remain stayed.

Final conclusion: Writ Petition is dismissed as withdrawn with liberty to avail of the alternate remedy on matter of Transfer Pricing Officer jurisdiction to pass penalty orders.

Unexplained cash credit u/s 68 - Primary onus for unsecured loans - source of source - assessee was treated as shell entity - allowance of business loss - Unexplained investment

Branding the assessee as a shell company - Addition u/s 68 - HELD THAT: - The Tribunal held that the assessee was a regularly assessed corporate entity and the record itself showed past and intended business activity, including acquisition and sale of land and payment of earnest money for acquisition of property with deduction of tax at source.

The statement of the director did not amount to an admission that the assessee was a mere paper entity; at the highest, it indicated absence of substantial recent activity. Mere non-commencement or low volume of business could not justify branding the assessee as a shell company. Once that premise failed, the rejection of the returned business loss on that basis could not survive. [Paras 7]

The finding that the assessee was a shell entity was affirmed as unsustainable, and the business loss was directed to be allowed for carry forward.

Unexplained cash credit u/s 68 - Primary onus for unsecured loans - Source of source - HELD THAT: - The Tribunal found that the assessee had furnished lender-wise material, including confirmations, bank statements, ledger accounts, affidavits, returns and, where available, assessment records, thereby discharging the initial burden regarding identity, creditworthiness and genuineness. The Assessing Officer, both in assessment and remand, did not undertake any independent enquiry to dislodge those documents and proceeded mainly on the erroneous assumption that the assessee itself was a shell concern. The reasons adopted by the Commissioner (Appeals), such as absence of interest, perceived improbability, or the lenders' connection with other doubtful transactions, were held to be irrelevant once the statutory ingredients of section 68 stood satisfied on the material produced. The Tribunal further stated that for AY 2018-19, in the case of unsecured loans and advances, there was no obligation on the assessee to prove the source of source, that requirement having been introduced only from AY 2022-23. In the absence of cogent rebuttal evidence from the Revenue, no addition could be sustained merely on presumption, conjecture or surmise. [Paras 8, 9, 10, 11, 12]

The entire addition under section 68, including the portion confirmed by the Commissioner (Appeals), was deleted, and the Revenue's challenge to the relief granted on other credits was rejected.

Unexplained investment - Double addition - HELD THAT: - The Tribunal held that, after accepting the genuineness of all bank credits and deleting the addition under section 68, the separate addition made on account of investment sourced from those very credits had no independent basis. Sustaining it would amount to taxing the same flow of funds twice. [Paras 12]

The separate addition for unexplained investment was deleted as a case of double addition.

Final Conclusion: The assessee's appeal was partly allowed and the Revenue's appeal was dismissed. The Tribunal held that the assessee was not a shell entity, allowed carry forward of the business loss, deleted the entire addition under section 68, and consequently deleted the separate addition for unexplained investment.

Rejection of registration application u/s 12A(1)(ac)(iii) - Violation of section 13 - Life insurance premium on behalf of trustees, treated as a benefit to a person covered by section 13(3) - transaction was in contradiction to conditions of Sec.13 since Secretary was one of the specified persons as listed u/s 13(3)

HELD THAT: - The Tribunal held that the sole reason for rejection was the view that payment of life insurance premium on behalf of the trustees amounted to violation of section 13. Such violation, even if assumed, would only affect the availability of exemption under sections 11 or 12 to the income so applied, and could be examined by the AO in assessment proceedings. It could not, by itself, lead to denial of registration where the trust was otherwise genuine. Since the assessee had furnished sufficient material to establish commencement and genuineness of its activities and no other defect or violation was pointed out, refusal of registration was held to be unjustified. [Paras 3]

The rejection of registration was set aside and the registering authority was directed to grant registration to the assessee.

Final Conclusion: The Tribunal allowed the appeal and held that the alleged section 13 violation could not be the sole basis to refuse registration. As the assessee had established the genuineness and commencement of its activities and no other defect was found, registration was directed to be granted.

Unexplained bank deposits - Bank credits during the demonetization period - Addition without rejection of books of account - only reason to reject the claim of the assessee by Ld. AO is that cash deposits in corresponding period of earlier year was much less than the cash deposit during demonetization period

HELD THAT: - The Tribunal found that the assessee, a commission agent in fruits and vegetables operating in a regulated cash-driven market, had produced bank certification of cash deposits, cash book, sales and purchase ledgers, and supporting registers, along with certification from the marketing committee and audited financial statements.

These records showed substantial consignment sales during the relevant year, the commission earned therefrom formed part of the regular audited books, and the closing cash-in-hand before demonetisation was sufficient to cover the deposits.

Since no defect was found in the books and the books were not rejected, the AO could not doubt the source of the deposits merely because cash deposits in the corresponding period of the earlier year were lower. The comparison with the earlier year, without accounting for the substantial increase in sales during the year under appeal, was held to be fallacious. [Paras 4]

Final Conclusion: The Tribunal held that the cash deposits stood explained by the assessee's recorded business transactions and available cash balance, and that the addition could not be sustained merely on comparison with the earlier year. The appeal was partly allowed with deletion of the quantum addition.

Exemption u/s 10(23C)(iiiab) - assessee had received a government grant-in-aid -requirement of “substantial financing” - Quantitative threshold under Rule 2BBB - AO held grant received by the assessee was below the prescribed threshold, the exemption was denied, and the surplus was brought to tax.

Whether the assessee satisfies the condition of being “substantially financed by the Government” within the meaning of section 10(23C)(iiiab) read with Rule 2BBB? - HELD THAT: - The Tribunal held that Rule 2BBB prescribes a clear statutory test for treating an institution as substantially financed by the Government, namely that the Government grant must exceed 50% of its total receipts during the relevant previous year. Since the grant received by the assessee was below that benchmark, the mandatory condition for exemption was not satisfied. The Tribunal further held that once the legislature has laid down a quantitative standard, it cannot be replaced or relaxed by reference to governmental ownership, control, or any other consideration. [Paras 8, 9, 10, 11]

The denial of exemption under section 10(23C)(iiiab) was upheld.

Final Conclusion: The Tribunal upheld the orders of the lower authorities and dismissed the appeal. It held that the assessee having failed to satisfy the statutory requirement of substantial Government financing was not entitled to exemption under section 10(23C)(iiiab).

Retrenchment compensation - Exemption u/s 10(10B) or 10(10C) -Ex-gratia compensation received by the assessee(s) employed with BSNL on account of forced retirement scheme under the Bharat Sanchar Nigam Limited Voluntary Retirement Scheme, 2019 - whether Capital receipt not liable to be taxed?

HELD THAT:- Alleged sum is in the nature of Retrenchment Compensation received by the assessee(s) in appeal, under the forced retirement scheme as per the standing orders dated 29.10.2019 issued by the Union Cabinet for the revival plan of BSNL/MTNL and such compensation falls under the provisions of section 10(10B) and not u/s 10(10C) and therefore the alleged sum is in the nature of Capital receipt exempt from tax.

In order to get relief as has been directed in this order, assessee(s) are directed to place revised computation of income before the respective Jurisdictional Assessing Officers claiming the exemption u/s. 10(10B) and thereafter the Revenue authorities shall grant the refund (if any) entitled to the assessee(s) after due verification of such revised computation of income [Paras 16, 17]

The compensation was held exempt u/s 10(10B), the contrary findings of the CIT(A) were set aside, and the assessees were directed to file revised computations before the jurisdictional Assessing Officers for consequential relief and refund after verification.

Final Conclusion: The Tribunal allowed all the appeals, holding that the assessees could validly raise the exemption claim in appeal and that the compensation received from BSNL under the 2019 forced retirement scheme was retrenchment compensation exempt u/s 10(10B), not merely eligible for the limited relief under section 10(10C). Consequential relief and refund, if any, were directed to be granted after verification of revised computations by the jurisdictional Assessing Officers.

Levy of interest on late payment of TDS u/s 201(1A) - determining the 'date of payment' - delayed deposit of TDS where the assessee tendered the cheque within the due date but the amount was realised by the bank on the next working day - assessee had tendered the cheque to the authorised bank within the prescribed due date and the cheque was subsequently realised without dishonour

HELD THAT: - The Tribunal found, on the basis of the bank acknowledgment, draft challans and the bank's letter, that the assessee had deposited and tendered the cheque on 29.04.2022, i.e. before the due date, and that the amount was cleared on the next working day because 01.05.2022 was a holiday.

Applying the settled principle that, where a negotiable instrument is honoured on presentation, payment relates back to the date of its tender to the banker, the Tribunal held that the relevant date of payment was the date of presentation of the cheque and not the date of its realisation. Since the cheque was tendered within time and was not dishonoured, there was no default in deposit of TDS and consequently no liability to interest. [Paras 8, 9]

The interest levied u/s 201(1A) was deleted and the assessee's appeal was allowed.

Final Conclusion: Tribunal held that tender of the cheque to the authorised bank within the due date constituted timely payment once the cheque was realised without dishonour. Accordingly, the levy of interest u/s 201(1A) was set aside for A.Y. 2022-23, and the same finding was applied to the connected appeal.

Disallowance of interest claimed while computing short-term capital gains -Interest on borrowed funds - Rate of tax on short-term capital gains- claim for deduction under section 80E

Disallowance of interest claimed while computing short-term capital gains - additional evidences now relied upon by the assessee -HELD THAT: - The Tribunal found that the evidences now relied upon by the assessee for establishing that the loan was utilised for investment in shares had not been furnished before the Assessing Officer, and no finding from the appellate order showed that such materials had been examined. Since the admissibility of the claim depended upon verification of the nature and utilisation of the loan, the matter could not be decided finally on the existing record and required remand for limited factual verification in accordance with law. [Paras 5]

The issue was restored to the AO for limited verification of the loan utilisation and for fresh decision after giving the assessee an opportunity of being heard.

Rate of tax on short-term capital gains - listed securities - computed the tax on such short-term capital gains at 30% instead of 15% - HELD THAT: - The Tribunal recorded the consensus of both sides that this issue was directly dependent upon the outcome of the remanded issue concerning computation of short-term capital gains. As the tax-rate question was intrinsically connected with that primary issue, it was considered appropriate to restore this ground also for fresh adjudication in accordance with law. [Paras 6]

This ground was remitted to the Assessing Officer for fresh adjudication in accordance with law.

Denial of deduction u/s 80E - claim was not made in the return of income and that no fresh claim could be entertained during the assessment proceedings - HELD THAT: - The Tribunal noted that the assessee sought to support the section 80E claim with documents relating to the education loan which had not been furnished before the authorities below. It held that the claim had to be examined with reference to the newly produced materials and the statutory requirements governing section 80E, and therefore restored the matter for proper verification and adjudication. [Paras 8]

The issue was remanded to the Assessing Officer to examine the evidence and decide the claim afresh after granting reasonable opportunity of hearing.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes. The issues relating to the interest claim against short-term capital gains, the applicable tax rate on short-term capital gains from listed securities, and the deduction under section 80E were all remanded to the Assessing Officer for fresh verification and adjudication in accordance with law.

Condonation of delay - delay of about 2000 days in filing the appeal before FAA - Sufficient cause - Independence of appellate and rectification remedies - only explanation offered by the assessee is that a rectification application was filed and that it was awaiting its disposal, coupled with an alleged lack of action on the part of its tax advisor.

HELD THAT: - The Tribunal held that the explanation based on filing a rectification application and awaiting its disposal, coupled with alleged inaction of the tax adviser, did not amount to sufficient cause for condoning an extraordinary delay. It applied the principle that the remedy of appeal is independent of the remedy of rectification, and pendency of rectification proceedings neither extends nor suspends the limitation prescribed for appeal.

The assessee, being a corporate entity, was required to act with due diligence and could not avoid its statutory obligation on the plea of the adviser's lapse, particularly in the absence of supporting evidence. Since the delay of more than five years remained substantially unexplained and lacked bona fides, the dismissal of the appeal as time-barred was found justified. [Paras 9, 10, 11, 12]

The delay was not condoned, and the dismissal of the appeal as barred by limitation was sustained.

Final Conclusion: The Tribunal dismissed the assessee's appeal and affirmed the order declining condonation of the inordinate delay. It held that pendency of rectification proceedings and alleged adviser negligence did not furnish sufficient cause to overcome the bar of limitation.

Deduction u/s 80P(2)(a)(i) - Business income versus income from other sources - Interest on bank deposits - interest income earned from the bank which was claimed by the assessee as income attributable to the business of the assessee but treated by AO and confirmed by the CIT – A as income from other sources

HELD THAT: - The Tribunal found that the assessee was carrying on the business of providing credit facilities to its members and had claimed the interest from deposits with other banks as business income attributable to that activity.

Applying Tumkur Merchants Souharda Credit Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] it held that where surplus funds not immediately required for lending are deposited for a short term, the resulting interest retains the character of income attributable to the business and qualifies for deduction.

Tribunal further held that the decisions in Principal Commissioner of Income-tax, Hubli vs. Totagars Co-operative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] and Principal Commissioner of Income-tax, Hubballi vs. Totagars Co-operative Sale Society [2010 (2) TMI 3 - SUPREME COURT] did not govern the present case, as those decisions dealt with deduction under section 80P(2)(d), whereas the present claim was u/s 80P(2)(a)(i) - additionally, there was no finding in the assessment order that the impugned interest was taxable under the head income from other sources. On that reasoning, the denial of deduction by the lower authorities was held to be erroneous. [Paras 8, 9, 10, 11, 12]

The assessee's claim for deduction u/s 80P(2)(a)(i) was allowed and the AO was directed to grant the deduction as claimed.

Final Conclusion: The Tribunal held that the interest earned by the assessee on short-term deposits of surplus funds was attributable to its business of providing credit facilities to members and qualified for deduction under section 80P(2)(a)(i). The orders of the lower authorities were reversed and the appeal was allowed.

Validity of reopening of assessment - condition precedent for reassessment - cash deposits in the bank account -accommodation entry transactions - information received from the Investigation Wing indicating that the assessee had deposited substantial cash in his bank account maintained with Co-operative Credit Society -

Validity of Reassessment proceedings - reason to believe - HELD THAT:- AO had sufficient reason to reopen the assessment since tangible material in the form of information relating to cash deposits in the bank account of the assessee was available on record suggesting escapement of income. As decided in Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT] that reassessment proceedings can be initiated where the Assessing Officer has tangible material indicating escapement of income.

Hon’ble Gujarat High Court in Geetaben Dineshchandra Gupta [2021 (8) TMI 1016 - GUJARAT HIGH COURT] has held that where information received from the Investigation Wing reveals that the assessee was involved in providing accommodation entries and commission income arising therefrom had not been disclosed, the formation of belief by the Assessing Officer regarding escapement of income is justified.

In the present case also, the information regarding cash deposits in the bank account of the assessee provided sufficient basis for the Assessing Officer to form a prima facie belief that income chargeable to tax had escaped assessment. Accordingly, we find no merit in the grounds raised by the assessee challenging the reopening of the assessment and the same are hereby dismissed.

Addition u/s 69 -cash deposits in the bank account - HELD THAT:- The assessee has not demonstrated that he was misled by the officials of the society or that he was compelled to open the bank account under any such circumstances. Assessee has failed to produce any material identifying the persons who allegedly deposited the cash or the beneficiaries to whom the funds were transferred. Therefore, the factual matrix of the present case is clearly distinguishable from the decision rendered in Kaushik Pravinchandra Gohel [2024 (4) TMI 1133 - ITAT AHMEDABAD] and the same cannot be applied mechanically to the facts of the present case.

Considering the pattern of deposits and withdrawals in the bank account and taking into account the possibility that the assessee might have been involved in routing unaccounted funds on behalf of other persons, it would be reasonable to conclude that the assessee had participated in accommodation entry transactions and would have earned commission income therefrom.

Taxing the entire deposits under section 69 of the Act would be excessive. At the same time, the assessee cannot escape taxation altogether in view of the failure to explain the nature and source of the deposits. Accordingly, the Assessing Officer is directed to work out the peak balance of the bank account and thereby tax the same accordingly, in the hands of the assessee, as per law.

Final conclusion: Tribunal held that Information regarding cash deposits in the bank account of the assessee provided sufficient basis for the Assessing Officer to form a prima facie belief that income chargeable to tax had escaped assessment and for addition on bank deposits AO is directed to work out the peak balance of the bank account and thereby tax the same accordingly, in the hands of the assessee,

Rejection of the declared value under Rule 12 of the Customs Valuation - Redetermination of the imported goods - reasonable doubt about the truth and accuracy of the transaction value. - HELD THAT:- The civil appeal was dismissed as the duty involved was a small amount, and the question of law was kept open for consideration in an appropriate case.

Rejection of the petitioner's request by the Policy Relaxation Committee, without reasons - Non-speaking of policy relaxation - benefit of deemed exports and terminal excise duty relief under the Foreign Trade Policy.

Reasoned orders - Policy relaxation - HELD THAT:- The Court held that the decision of the Policy Relaxation Committee merely stated that no merit or hardship was found in the petitioner's case, but disclosed no reasons for such conclusion. Since the order was bereft of reasons, it could not be sustained, and the matter was required to be sent back to the Committee for fresh consideration in accordance with law. [Paras 6, 7]

The impugned decisions were set aside, and the petitioner's application was directed to be reconsidered afresh by the Policy Relaxation Committee within the stipulated period.

Final Conclusion: The writ petition was disposed of by setting aside the unreasoned rejection of the petitioner's request for policy relaxation and by directing fresh consideration in accordance with law.

Valuation of second-hand imported machinery - Transaction value - Load Port Chartered Engineer's certificate - Redetermination of Value - Whether the declared value of the imported second hand machines was rightly enhanced based solely on the Chartered Engineer’s Certificate ?.

Valuation of second-hand imported machinery - Transaction value - HELD THAT:- The Tribunal found that the importer had in fact produced a Load Port Chartered Engineer's certificate and that the authorities had rejected it only because it did not mention the year of manufacture. On comparison of the Load Port and local certificates, there was no dispute as to the identity of the goods, their used condition, or the fact that they were not reconditioned. The Board circular contemplated acceptance of a local Chartered Engineer's certificate only in the absence of a proper Load Port certificate; therefore, the authorities were required to first show that the Load Port certificate was improper in a material sense. Since the certificate contained the material particulars of the imported machinery, including its original value and its nature as used machinery, omission of one detail which did not dislodge the nature of the goods could not justify rejection of the declared value. The Tribunal accordingly held that redetermination based solely on the local Chartered Engineer's certificate was untenable. [Paras 6, 7]

The redetermined value was rejected and the impugned order was set aside.

Final Conclusion: The Tribunal held that the declared value of the imported used machinery could not be enhanced merely on the basis of the local Chartered Engineer's certificate when the Load Port certificate substantially satisfied the requirement as to the nature and particulars of the goods. The order upholding the enhanced valuation was therefore set aside and the appeal was allowed.

Differential duty demanded on the two past Bills of Entry - Enhancement of value - Customs valuation - Undervaluation of imported goods - Reopening of finally assessed Bills of Entry - goods covered by the earlier Bills of Entry had already been cleared on payment of duty and were not examined at the time of clearance.

Reopening of finally assessed Bills of Entry - HELD THAT:- The Tribunal held that once the earlier consignments had been cleared and the goods were no longer available for examination, their value could not be reopened merely on the basis of email documents recovered later. In the absence of examination of the quantity and quality of the goods, and with no substantial evidence beyond email copies and statements, the material on record was insufficient to support enhancement of value for the past imports. [Paras 4]

The demand of differential duty on the two past Bills of Entry was set aside.

Rejection of the declared value and redetermination of value for the live Bill of Entry was justified, though the quantum of redemption fine and penalty called for reduction. - HELD THAT:- The Tribunal found sufficient evidence of undervaluation in respect of the live Bill of Entry from the examination report, bank documents and the retrieved email correspondence, which showed mismatch in value, description, invoice numbers and dates, and supported the conclusion that the declared invoice reflected only a part of the actual value. Although the Commissioner had applied the ratio of misdeclaration found for 132 items to 10 other items without specific evidence, the Tribunal nevertheless upheld the differential duty on the live Bill of Entry, noting that the appellant had not produced details of the imported items and had accepted the duty liability at the time of provisional release. Having regard to the enhanced value and the fact that duty with interest had already been paid, the Tribunal reduced the redemption fine and the penalty. [Paras 5]

The differential duty on the live Bill of Entry was upheld, while the redemption fine and penalty under Section 112(a) were reduced.

Final Conclusion: The appeal was partly allowed. Differential duty on the two past Bills of Entry was set aside, while the valuation and duty demand on the live Bill of Entry were sustained, with reduction in redemption fine and penalty.

Classification of ceramic products fired after shaping - Evidentiary value of Chemical Examiner's report - Extended period of limitation - Whether the impugned products ‘Expanded Space Fire Clay Grog’ classifiable under CTH 6902 9010 as claimed by the appellant Or to be classified under 6806 2000 as claimed by the Revenue.

Tariff classification - Ceramic products fired after shaping - Chemical Examiner's report -HELD THAT:- The Tribunal found that the manufacturer's technical literature described the product as a ceramic material shaped into spherical pellets and thereafter sintered at high temperature, thereby satisfying the Chapter Note requirement that products of Chapter 69 must be fired after shaping. The letter of the British Ceramic Confederation also supported that the final product was wholly ceramic and that shaping preceded firing. The Chemical Examiner's reports further showed the material to be ceramic, one report specifically recording it as fired after shaping, while the later report did not negate that position and even suggested further examination by IBM Bangalore, which was not pursued. Against this material, the Revenue relied only on one supplier invoice mentioning a different tariff heading and produced no substantive evidence to establish classification under CTH 6806. Applying the principle that departmental chemical test reports cannot be lightly brushed aside unless shown to be erroneous, the Tribunal held that the Commissioner was not justified in rejecting those reports and accepted classification under CTH 6902 9010. [Paras 7, 9, 10, 11, 12]

Classification of the impugned goods under CTH 6902 9010 was upheld.

Extended period of limitation - Suppression of facts - HELD THAT: - The Hon’ble Supreme Court in the case ofUniworth Textiles Ltd. vs. Commissioner of Central Excise, Raipur [2013 (1) TMI 616 - SUPREME COURT] has categorically held that when there is no suppression with intention to evade payment of duty, then invoking of extended period of limitation cannot be sustained. Therefore, we find that extended period of limitation cannot be invoked.

The Tribunal found that the Bills of Entry themselves described the goods as refractory products fired after shaping and declared classification under CTH 6902 9010. In view of this express disclosure, there was no basis to allege misrepresentation or suppression of facts. Since suppression with intent to evade duty was not established, the extended period could not be invoked. [Paras 13, 14]

The demand based on invocation of the extended period of limitation was held unsustainable.

Final Conclusion: The Tribunal held that the imported goods were correctly classifiable under CTH 6902 9010 as ceramic products fired after shaping and that the Commissioner was not justified in disregarding the Chemical Examiner's reports. It further held that, in the absence of suppression or misrepresentation, the extended period of limitation was not available, and the appeal was accordingly allowed with consequential relief.

Eligibility of benefit of concessional rate of Basic Customs Duty (BCD) in terms of Sr. No.20 of Notification No. 57/2017-Cus. - Import of Cisco Catalyst 3850 Series Ethernet Switches - Maintainability of appeal before the Tribunal - Challenge to assessed Bills of Entry - Whether 41 numbers of appeals filed by the appellants against disposal of 3 appeals by the Commissioner (Appeals) are maintainable before the Tribunal, in terms of sub-section (1) of Section 129 A of the Customs Act, 1962.

Concessional rate of basic customs duty - Binding precedent on identical goods - HELD THAT:- The Tribunal found that the impugned appellate order had denied the concession by relying on an earlier order which had already been set aside in Cisco Commerce India Pvt. Ltd. Vs. Commissioner of Customs (Air Cargo Import), Mumbai,[2024 (9) TMI 1838 - CESTAT MUMBAI]. That Tribunal decision, granting the concession on identical goods, had also been upheld by the Bombay High Court. As the very foundation of the impugned order had ceased to exist, and the issue was no longer open to debate in view of the earlier decisions, denial of the concessional rate could not be sustained. [Paras 4]

The impugned order was set aside insofar as it rejected the three appeals concerning the assessed Bills of Entry actually disposed of by the Commissioner (Appeals), and those appeals were allowed.

Maintainability of appeal before the Tribunal - Appealable order under Section 128A - Payment of duty under protest - HELD THAT:- The Tribunal held that under Section 129A(1), an appeal lies to the Tribunal only against an order passed by the Commissioner (Appeals) under Section 128A. The impugned order dealt only with three individually assessed Bills of Entry, and the appellants failed to produce any material to show that appeals had in fact been filed before the Commissioner (Appeals) in respect of the other thirty-eight assessed Bills of Entry. The Tribunal further held that mere payment of duty under protest could not be treated as a decision or order appealable under Section 128, particularly when no appeal had been filed before the first appellate authority against those assessments. [Paras 5]

Since no appealable order of the Commissioner (Appeals) existed in relation to those thirty-eight assessed Bills of Entry, the corresponding appeals before the Tribunal were dismissed as not maintainable.

Final Conclusion: The Tribunal allowed the three appeals arising from the Bills of Entry actually covered by the impugned order and extended the concessional rate of duty to the imported goods. The other thirty-eight appeals were dismissed as not maintainable for want of any appellate order of the Commissioner (Appeals) concerning those assessments.

Misdeclaration of Imported goods - breach of restrictions on import without BIS [Bureau of Indian Standards] certification - customs valuation under transaction value regime - appellate remedy despite assumption of proper officer functions by superior authority - self-assessment - confiscation under section 111(d) - presumption of non-satisfaction through rule 12 thereof.

Appellate remedy - assumption of proper officer functions - The appeals before the Tribunal were maintainable notwithstanding that the Commissioner had assumed functions otherwise entrusted to the proper officer. - HELD THAT: - The Tribunal held that appropriation of statutory functions by a superior officer does not attach those functions to the superior office so as to distort or extinguish the normal appellate remedy. Accepting such a proposition would permit progressive exclusion of appellate recourse merely because a higher authority chose to act at the substantive level. The appellants could not, therefore, be denied appellate recourse merely because of the form in which the impugned order was issued. [Paras 2]

The appeals were entertained as competent before the Tribunal.

Applicability of BIS certification to the impugned goods - prohibition on import - HELD THAT: - On examining the Steel and Steel Products (Quality Control) Order, 2020, the Tribunal found that the tariff item covering the impugned goods was not shown in the appended tables, nor was the description enumerated as an input for pipes and tubes in Table 2. In the absence of a finding that the goods fell within the entries requiring such compliance, the charge of non-compliance with BIS certification could not be sustained. The circular requiring online waiver determination in the absence of BIS certification was also held inapplicable to the impugned goods. Consequently, confiscation on the footing of import in breach of prohibition under section 111(d) lacked legal sanction. [Paras 12]

The goods were held not to have been imported contrary to any BIS-based prohibition.

Misdeclaration of imported goods - defective goods - confiscation and penalty - The declaration of the goods as end cut rejects was not established to be a misdescription attracting confiscation or penalty. - HELD THAT: - The Tribunal held that the declared description did not affect classification, since the goods remained classifiable under the same tariff item either way. The test report showed uneven surface and variation in thickness, which brought the goods within the distinction of defective goods referred to by the Ministry of Steel. In that factual setting, the finding of misdeclaration was not borne out by the record. The conclusion in the impugned order was further weakened by reliance on the opinion of a chartered engineer lacking relevant domain competence to assess the physical and chemical characteristics of the goods. There was, therefore, no basis to hold misdescription with intent to evade duty or to sustain confiscation and penalty on that footing. [Paras 13]

The charge of misdescription failed, and confiscation and penalties on that basis were unsustainable.

Customs valuation under transaction value regime - rule 12 rejection of declared value - sequential valuation rules - HELD THAT: - The Tribunal held that a chartered engineer has no assigned role under the scheme of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 for rejecting and redetermining value in the manner adopted in the impugned order. The circulars relied upon did not support such use in the present case, as they related to a different context and, at best, contemplated depreciated value for comparison in respect of used capital goods. Here, the opinion relied upon merely asserted that the goods were not defective and was not a lawful basis either to reject the declared value or to redetermine it. In the absence of a legally benchmarked rejection under rule 12 followed by the sequential application mandated by rule 3(4), the revised value could not be sustained, and the declared value was not shown to be other than the transaction value. [Paras 14, 15, 16]

The revaluation was set aside, and the declared transaction value remained operative for assessment.

Final Conclusion: The impugned order was set aside in its entirety. The Tribunal held that the goods were neither prohibited for want of BIS certification nor misdeclared, that the enhanced valuation was unsustainable in law, and that the bills of entry as self-assessed were entitled to be processed for clearance under section 47.

Classification of goods - imported Side Key FPCB - Classifiable under CTI 8517.79.10 as a populated, loaded Or stuffed printed circuit board, Or under heading 8534 as a printed circuit board - Populated printed circuit boards - Explanatory Notes to the Harmonized System -General Rules for the Interpretation of the First Schedule to the Customs Tariff Act, 1975, together with Note 2(b) to Section XVI.

Classification - HELD THAT:- It is a well-settled principle of law that the classification of goods under the Customs Tariff Act, 1975 is governed by the General Rules for the Interpretation of the Import Tariff (GRI). Rule 1 of the WCO's General Rules of Interpretation states that customs classification is based on the terms of headings and relevant Section or Chapter Notes, not on titles, which serve only as reference and have no legal standing.

The Authority held that classification had to be determined under GRI 1 with reference to the tariff headings and the relevant Section Notes. It found that the product was specifically designed solely for use in smartphones and had no independent use, and therefore fell to be treated as an 'other part' of smartphones under Section Note 2(b) to Section XVI rather than under Section Note 2(a). The Authority further found that the imported article was not a bare printed circuit but a functional sub-assembly consisting of an FPCB populated with electrical and non-electrical components, including surface-mounted devices and mechanical elements. Since heading 8534 covers printed circuits but excludes circuits combined with elements other than those obtained during the printing process, the subject product was held to be outside heading 8534 and to answer the description of populated, loaded or stuffed printed circuit boards under heading 8517. [Paras 4]

Side Key FPCB was ruled to be appropriately classifiable under CTH 8517 79 10.

Final Conclusion: The application was allowed and the Authority ruled that 'Side Key FPCB', being a populated functional sub-assembly meant solely for use in smartphones, is classifiable under CTH 8517 79 10.

Maintainability of complaint by Deputy Registrar - Limitation for prosecution under Section 448 read with Section 447 - complaint barred by limitation - Contraventions under Sections 129 and 448 of the Companies Act, 2013 - False statement and mens rea - definition of "Registrar" in Section 2(75) - Specific allegations against statutory auditor.

Maintainability of complaint by Deputy Registrar - Meaning of Registrar - The complaint filed by the Deputy Registrar of Companies was maintainable under Section 439(2) of the Companies Act, 2013. - HELD THAT:- The Court held that though the complaint was filed by the Deputy Registrar and not by the Registrar in name, Section 2(75) defines "Registrar" to include a deputy registrar. On that statutory definition, a Deputy Registrar is competent to institute the complaint in writing for the purpose of cognizance under Section 439(2). [Paras 45]

The objection to the competence of the Deputy Registrar to lodge the complaint was rejected.

Limitation for prosecution under Section 448 read with Section 447 - Applicability of Section 468 Cr.P.C. - The prosecution was not barred by limitation. - HELD THAT: - The Court held that the alleged offence under Section 448 attracts liability under Section 447 of the Companies Act, 2013, which provides for imprisonment extending up to ten years. In view of the nature of punishment prescribed, the Court found that the institution of the complaint in November, 2019 was not barred under Section 468 of the Cr.P.C. [Paras 46]

The plea of limitation was negatived.

False statement and mens rea - Specific allegations against statutory auditor - Abuse of process - HELD THAT: - The Court found that the complaints were largely directed against the company and its directors and did not attribute any specific overt act to the petitioner bringing his conduct within Section 448. Since Section 448 requires a knowingly false statement or omission of a material fact with knowledge of its materiality, the complaint had to disclose deliberate falsity and mens rea. The allegations against the petitioner were held to be vague and general; at the highest, they indicated non-disclosure in the balance sheet format and not fabrication or falsification. The Court also noted that the petitioner, being a statutory auditor, examined statements prepared on the basis of records and information furnished by management, and the complaint disclosed no material showing that he knowingly made any false statement. In these circumstances, continuation of the criminal proceeding was held to be an abuse of process, especially when proceedings against the directors in connected matters had already been quashed. [Paras 48, 49, 51, 52, 53]

Proceedings under Section 448 were quashed insofar as the petitioner was concerned.

Final Conclusion: The Court upheld the competence of the Deputy Registrar to file the complaint and rejected the plea of limitation. It nevertheless quashed the proceedings against the petitioner-auditor, holding that the complaints did not disclose the essential ingredients of Section 448 or any specific allegation showing a knowingly false statement or deliberate concealment.

Seeking time to file its response to the show-cause notice - Objections in reply to show cause notice - Question of law - Confidentiality of complainants - HELD THAT:- The civil appeal challenging the order of the Securities Appellate Tribunal was dismissed, while granting the appellant four weeks' time to file its response to the show-cause notice and keeping all other merits contentions open, except those already decided by the Tribunal or not pressed before it.

Demand notice issued under Section 13(2) of the SARFAESI Act to the borrower and guarantors, in the language used in the notice - invocation of the personal guarantee and fixed the starting point of limitation for proceedings against the personal guarantor - Extension of Limitation -Acknowledgment of debt in principal borrower's books - Concurrent remedies under SARFAESI and IBC - Whether mere issuance of notice under Section 13(2) can be considered as an invocation of guarantee and limitation to be calculated from that date of invocation for proceedings under IBC.

Limitation for insolvency proceedings against personal guarantor - Acknowledgment of debt in principal borrower's books - Extension of limitation - HELD THAT:- The Appellate Tribunal held that, even proceeding on the basis that default under the guarantee arose after expiry of 60 days from the notice dated 12.04.2018, the Adjudicating Authority erred in ignoring the acknowledgment of debt contained in the Independent Auditor's Report filed with Form AOC-4 for Financial Year 2019-20. Relying on the principle that acknowledgment in the balance sheet extends limitation, and further holding that acknowledgment by the principal borrower is as good as acknowledgment by the guarantor, the Tribunal concluded that a fresh period of limitation commenced from 31.12.2020. After applying the exclusion granted during the COVID-19 period, the fresh limitation ran from 01.03.2022 and had not expired when the petitions were filed on 13.10.2023. [Paras 67, 68, 69, 70, 71]

The petitions were not barred by limitation, and the dismissal on that ground was unsustainable.

Concurrent remedies under SARFAESI and IBC - Overriding effect of the IBC - Personal guarantor proceedings - HELD THAT: - The Appellate Tribunal held that proceedings under SARFAESI and under the Code are independent and may continue concurrently. It further observed that, in view of the overriding effect of the Code, the creditor's resort to Rule 7(1) of the Personal Guarantor Rules could not be defeated by the Respondents' contention that the guarantee had already been invoked or that other recovery proceedings had been initiated. The pendency of arbitration proceedings or proceedings before the DRT, therefore, did not preclude initiation of insolvency proceedings against the personal guarantors. [Paras 52, 57, 64, 72]

The objections founded on prior SARFAESI, arbitration, and DRT proceedings were rejected.

Final Conclusion: The Appellate Tribunal held that the Section 95 petitions against both personal guarantors were within limitation because the Corporate Debtor's acknowledgment of debt in its auditor's report extended limitation for the guarantors as well. The impugned dismissal was therefore reversed and both petitions were allowed.

Maintainability of seeking substantially the same relief after rejection of an earlier similar application and finality of the admission order - Successive applications under Section 65 as abuse of process - malicious initiation of insolvency proceedings - concealment of material facts - clean hands doctrine.

Successive applications as abuse of process - finality of prior adjudication - malicious initiation of insolvency proceedings - HELD THAT: - The Appellate Tribunal held that the later application under Section 65 was founded on the same core allegation that the insolvency proceedings had been initiated fraudulently and with malicious intent, which had already been raised earlier and rejected. Once the earlier order rejecting that challenge and admitting the Section 7 petition had attained finality, the same controversy could not be reopened through a recurring application seeking similar relief. The Tribunal accepted the view that allegations of fraud or malicious initiation, if existing, had to relate to the inception of the Section 7 proceedings and stood concluded when the earlier challenge failed. Mere repetition of allegations, without any substantiating material and after the findings on debt and default had become final, could not sustain a fresh proceeding. [Paras 28, 30, 31, 32, 33]

The later application under Section 65 was held to be barred as a repetitive attempt to reopen concluded issues, and its rejection was affirmed.

Concealment of material facts - clean hands doctrine - abuse of process - The appellant, having concealed the earlier appeal and its dismissal while pleading that no appeal had been filed, was not entitled to indulgence from the Appellate Tribunal. - HELD THAT: - The Appellate Tribunal found that the appellant had made a categorical but false pleading that no appeal had been filed against the earlier order, despite having himself pursued such appeal and suffered dismissal. It further held that the later attempt to place that order on record through an unauthorised additional type set, without proper pleading or prior leave, could not cure the concealment. Applying the principle that a litigant who approaches the court without clean hands and suppresses material facts is not entitled to relief, the Tribunal held that such conduct disentitled the appellant from being heard on equitable terms and warranted adverse consequences. [Paras 20, 21, 29, 32, 35]

The appeal was held liable to fail also on account of deliberate concealment of material facts, and costs were imposed on the appellant.

Final Conclusion: The Appellate Tribunal dismissed the appeal, holding that the appellant could not reopen, through a successive application under Section 65, allegations already rejected after the admission of the Section 7 petition had attained finality. The appeal was also rejected for concealment of the earlier appellate proceedings, and costs were imposed on the appellant.

Effect of the Committee of Creditors for rejecting the resolution plans and annullying the resolution process without completing the challenge mechanism contemplated in the bid framework and the CIRP Regulations - Scope of interference with the commercial wisdom of the CoC - Value Maximisation -challenge mechanism under CIRP Regulations - judicial review of rejection of resolution plan - Whether the decision of the CoC to reject the plans of the PRAs including the Appellant and annulment of the resolution process was impermissible and violative of the RFRP stipulations and the relevant CIRP Regulations.

Commercial wisdom of the Committee of Creditors - HELD THAT: - the CoC had undertaken voting on the resolution plans without following the route of challenge mechanism or negotiations and that their plans were rejected by the CoC without assigning any reason as the minutes of the relevant 17th CoC meeting was not shared with them. This was refuted by the RP by submitting that the 17th CoC meeting had deliberated on the issue before rejecting the plans. The RP however admitted that he had not placed on record the said minutes before this Tribunal and hence was allowed liberty by this Tribunal to quote the minutes of all relevant CoC meetings while submitting their short notes of submission. Alongwith relevant CoC minutes, the 17th CoC meeting minutes have been placed on record by the Respondent No.2 alongwith their short notes of submission wherein the reasons for rejecting the plans have been deliberated upon and duly reflected in the proceedings.

The Tribunal held that, although the RFRP contemplated negotiations and a challenge mechanism, the RFRP also expressly reserved to the RP/CoC a general right to accept, reject or annul the bid process at any stage and without assigning reasons. Read conjointly, the RFRP did not create any mandatory embargo preventing the CoC from terminating the process before the challenge mechanism. The record further showed that the appellant had participated in the process, attended meetings through its representatives, and repeatedly revised its plan at the instance of the RP and CoC; hence, the complaint of denial of participation or opportunity was not made out. The minutes also showed that the plans were put to vote and that the CoC later recorded that all four plans were rejected as financially non-viable since they were below liquidation value. On that basis, the rejection of the plans and closure of the process constituted a business decision of the CoC.

No cogent ground for the Appellant who is an unsuccessful resolution applicant to interfere with this decision of the CoC to annul the resolution process. Insofar as the process of approval or rejection of resolution plan is concerned, it is now beyond the pale of doubt that this lies within the purview of the commercial wisdom of CoC and the scope of judicial review remains circumscribed within the four corners of Section 30(2) of the IBC for the Adjudicating Authority. The scope of interference with the commercial wisdom of the CoC in approving or rejecting a resolution plan by the adjudicatory or appellate authority has been made minimal by law as laid down by the Supreme Court in a catena of judgments which have already been noted above. In such circumstances, the Adjudicating Authority with the limited powers of judicial review available to it has not committed any infirmity in interfering with the commercial wisdom of the CoC to reject the plan of the Appellant and annul the resolution process. We are of the considered view that the Adjudicating Authority has not committed any error in rejecting IA filed by the Appellant.

Final Conclusion: The Appellate Tribunal held that the CoC acted within the framework of the RFRP and its commercial wisdom in rejecting all plans and annulling the process. Finding no procedural or statutory infirmity warranting appellate interference, it dismissed the appeal.

Monetary limit for departmental appeals - prescribed by the circular - Substantial question of law.

Monetary limit for departmental appeals - Substantial question of law - HELD THAT:- The Court, on perusal of the adjudication order and the Tribunal's order, found that the amount involved was below the monetary threshold prescribed in the circular dated 06.08.2024 for filing departmental appeals. The Court further held that, even on merits, the Tribunal's order did not give rise to any substantial question of law. On that basis, the appeal was not entertained.

The appeal and the connected application were dismissed.

Final Conclusion: The High Court dismissed the Revenue's appeal, holding that the amount involved was below the prescribed monetary limit and that no substantial question of law arose from the Tribunal's order.

Condonation of delay - sufficient cause - HELD THAT:- The application for condonation of 114 day's delay was rejected as the cause shown was held insufficient, and the special leave petition was dismissed as time-barred.

Provisional attachment of mortgaged properties - Reason to believe - Value of proceeds of crime - Conspiracy to cheat the lenders by making fraudulent transactions such as huge non-trade transactions and diverted the funds for their own use and the use of their connected entities - default in repayment of loans and credit limits availed from a consortium of banks.

Attachment of mortgaged property - Reason to believe - Value of proceeds of crime - HELD THAT: - The Tribunal found that, despite an argument advanced at the stage of final hearing that some of the attached properties were themselves acquired out of proceeds of crime, the record did not support that stand. The Original Complaint and the impugned order treated those properties as value thereof and not as property directly or indirectly derived from the scheduled offence; the later contention was therefore a new case dehors the record and was rejected. On the statutory scheme of Section 5, the Tribunal held that attachment requires recorded reasons to believe, based on material, that the property involved in money-laundering is likely to be concealed, transferred or otherwise dealt with so as to frustrate proceedings, and in the absence of such satisfaction attachment cannot be made. Since the properties already stood mortgaged to the appellant banks, possession had been taken by the banks and some properties had already been auctioned, there was no material showing likelihood of alienation in the manner contemplated, particularly in the absence of any allegation of collusion or complicity of the banks. [Paras 13, 14, 17, 18, 19]

Following the earlier Tribunal view in Bank of Baroda, the appeals were allowed and the impugned confirmation of attachment, insofar as it concerned the appellant banks, was set aside.

Final Conclusion: The Tribunal held that the impugned attachment of the mortgaged properties was contrary to the statutory requirement governing provisional attachment under the PMLA. The appeals filed by the banks were accordingly allowed and the impugned order was set aside qua the appellants.

Entitlement to Bail under the Prevention of Money Laundering Act - medical grounds - Right to personal liberty of the accused under Article 21 - Twin conditions for bail - Co-accused / directors induced homebuyers to invest in various real estate projects but later failed to deliver flats / apartments.

Bail under the Prevention of Money Laundering Act -HELD THAT:- The Court took note that the prosecution complaint had already been filed, the appellant had remained in custody for over eight months, and before arrest had physically appeared before the Enforcement Directorate on five occasions. On that basis, it found no present necessity for continued custody. The Court further held that the restrictions on bail cannot be construed to justify indefinite detention and that the twin conditions cannot override constitutional protection of personal liberty under Article 21. Applying that principle to the facts, the Court held that the appellant was entitled to be released on bail, while leaving undisturbed the part of the impugned order upholding the arrest. [Paras 7, 8, 9, 10]

Bail was granted subject to conditions to be fixed by the trial court, without disturbing the validity of the arrest and without expressing any view on the merits.

Final Conclusion: The Court allowed the appeal to the limited extent of granting bail. It held that continued custody was unwarranted in the circumstances of the case and directed release on bail subject to conditions, while clarifying that no finding on merits had been rendered.

Provisional attachment - irregularities in coal block allocation involving Grace Industries Ltd. and associated entities - company derived wrongful financial gains - “proceeds of crime” under section 2(1)(u) - Priority of secured creditors vis-a-vis attachment of proceeds of crime - Overriding effect of the Prevention of Money Laundering Act - Jurisdiction of Special Court to consider restoration or release claims - Whether the secured creditors would have priority of interest over the assets attached under the provisions of PMLA by virtue of provisions of the SARFAESI Act and RDB Act?

Conflict between special statutes - Attachment of proceeds of crime - Secured creditor priority - HELD THAT: - The Hon’ble Apex Court in National Spot Exchange Ltd.[2025 (5) TMI 1373 - SUPREME COURT] also confirmed that no priority of interest can be claimed by the secured creditors against the properties attached under the PMLA by virtue of the provisions of SARFAESI Act and RDB Act.

The Court held that the object of the PMLA is distinct from the objects of the SARFAESI Act and the RDB Act. Attachment under the PMLA is not a claim for government dues or recovery of debt, but a statutory measure directed against proceeds of crime and property involved in money-laundering. On that footing, the statutory priority granted to secured creditors for realization of secured debts cannot by itself override attachment under the PMLA. The conflict was resolved by holding that the PMLA, by reason of its overriding clause and distinct confiscatory purpose, is not rendered subordinate to the recovery statutes. At the same time, prior charge or encumbrance of a secured creditor is not treated as automatically illegal merely because attachment is made under the PMLA; the competing claims must be reconciled, subject to the bona fides of the third-party claimant. [Paras 21, 22, 23]

The Tribunal's view that the SARFAESI Act and the RDB Act had overriding effect over the PMLA was held unsustainable, and the release of the attached properties on that sole basis was set aside.

Restoration of property under section 8(8) - Special Court's jurisdiction - Bona fide third-party claim - After confirmation of attachment and commencement of the criminal process, the respondent-Bank's claim for release of the attached property was required to be pursued before the Special Court under the PMLA rather than being finally granted by the Tribunal on the premise of statutory priority. - HELD THAT: - The Court held that the PMLA itself provides a mechanism for protecting a claimant with a legitimate interest in the property. Where attachment has been confirmed, or confiscation has been ordered, or trial for the offence under the PMLA has commenced, the claim of a party asserting legitimate interest is to be inquired into and adjudicated upon by the Special Court. Since a charge-sheet had already been filed, the respondent-Bank had a statutory remedy under section 8(8) to seek release or restoration. The Court therefore declined to examine the factual question whether the attached property was connected with proceeds of crime or whether repayment of the loan involved such proceeds, leaving that aspect open for consideration by the Special Court. [Paras 23, 24]

The respondent-Bank was left at liberty to move the Special Court under section 8(8) of the PMLA for release of attachment, and the matter was not remanded to the Tribunal.

Final Conclusion: The appeals were allowed. The orders of the Appellate Tribunal were quashed, the Court holding that secured-creditor priority under the SARFAESI Act and the RDB Act does not, by itself, defeat attachment under the PMLA, while preserving liberty to the respondent-Bank to seek release or restoration before the Special Court under section 8(8) of the PMLA.

Valuation of Taxable Services - Taxability of ocean freight margin - difference between the freight collected from customers and the freight paid to shipping lines, in the course of booking and selling cargo space for export and import shipments - Principal-to-principal trading in cargo space - Business Support Service - Extended Period of Limitation - Suppression of Facts.

Ocean freight markup - Trading in cargo space - Principal-to-principal transaction - HELD THAT: - The Tribunal followed its earlier decisions on identical transactions and noted that the controversy stood concluded against the Revenue, including by the Supreme Court in Commissioner of CGST and CE Belapur vs M/s. EMU Line Pvt. Ltd.[2023 (2) TMI 1155 - SC ORDER]. It accepted that the appellant, acting as a multimodal transporter, procured cargo space from shipping lines and dealt with its customers on aprincipal-to-principal basis, so that the difference between the amount paid to the shipping line and the amount recovered from customers represented business margin from trading in cargo space and not consideration for any separate support service. In the absence of material establishing agency or intermediary status, or any sustainable basis for reclassifying the activity as Business Support Service, the demand for both the pre-01.07.2012 and post-01.07.2012 periods was held to be unsustainable. [Paras 10, 11, 12, 13]

The service tax demand, interest and penalties were set aside as the impugned receipts were not taxable consideration for any service.

Final Conclusion: The Tribunal held that the appellant's receipts from ocean freight and the related margin arose from principal-to-principal trading in cargo space and were not taxable as Business Support Service or any other service for the disputed period. The impugned demand with interest and penalties was therefore set aside and the appeal was allowed.

Refund claims seeking refund of service tax paid on the specified services used for authorized operations in the Special Economic Zone (SEZ) - Benefit of Notification No. 12/2013-ST - rejected on the ground that the Group Medical Insurance and Personal Accident Insurance of employees and their family dependents are not included in the list of input services approved by Unit approval Committee (UAC) of the Development Commissioner

Specified services - Authorised operations - General insurance services - HELD THAT: - The Tribunal held that under Notification No. 12/2013-ST, the relevant test for refund is whether the service is a specified service approved for the SEZ unit and used for authorised operations, with service tax having been discharged thereon. It found no dispute that General Insurance Services were specified by the Development Commissioner and were used in authorised operations. On that basis, rejection of refund on the ground that group medical insurance and personal accident insurance did not separately qualify within the approved description was held to be irrelevant, particularly when the insurance pertained to the employees of the appellant. The Tribunal further held that reference to the Cenvat Credit Rules for testing admissibility of such refund was misplaced, since the notification grants refund on specified services used for authorised operations and is not conditioned by the input service test under those rules. [Paras 4, 5, 6]

The impugned rejection of the refund claims was held unsustainable and the refund was allowed with consequential relief.

Final Conclusion: The Tribunal held that the refund claims of the SEZ unit could not be rejected merely because the insurance services were described as group medical insurance and personal accident insurance, once general insurance services were approved, tax was paid, and the services were used for authorised operations. The impugned order was set aside and the appeals were allowed with consequential relief.

Works contract - Original work - Reverse charge mechanism - Non-speaking appellate order - Consistency in adjudication under Section 73(1A) - Exemption under Notification No. 25/2012-ST- difference in the receipts as indicated in the ST-3 records and financial records of the appellant.

Non-speaking order - Reasoned appellate decision - Consistency in adjudication - HELD THAT: - The Tribunal found, on a plain reading of the appellate order, that it merely concluded that the contracts were not covered by the exemption and did not record reasons for upsetting the detailed findings of the original authority. The original authority had examined the contracts, classified the works, considered exempt and taxable components, applied the valuation and reverse charge provisions, and also noted the earlier orders relating to similar services under the same or similar contracts. Since the present statement of demand had itself been issued in continuation of the earlier proceedings under Section 73(1A), the appellate authority was required to consider the earlier orders and maintain consistency unless some new material or change in law was shown. In the absence of any such distinguishing feature, the appellate view was held unsustainable. [Paras 4]

The impugned appellate order was held to be unsustainable for want of reasons and for ignoring the requirement of consistency arising from the earlier proceedings.

Exemption under Notification No. 25/2012-ST - Works contract classification - Discharge of service tax liability - HELD THAT: - The Tribunal noted that the nature of the appellant's services had already been examined in earlier proceedings and exemption under Notification No. 25/2012 had been held admissible for the same category of services. The original authority had also found, after contract-wise examination, that the appellant had correctly availed the available exemptions and had duly discharged the service tax liability for the taxable services. The appellate order did not record any finding displacing these conclusions. On that basis, the Tribunal accepted the original authority's conclusion that no short payment survived. [Paras 4]

The finding that no further service tax, interest or penalty was payable for the disputed periods was restored by setting aside the appellate order.

Final Conclusion: The Tribunal set aside the order of the Commissioner (Appeals) and allowed the appeal. It held that the appellate order was non-speaking, ignored the earlier proceedings and findings on the same nature of services, and that no further service tax liability survived for the periods in dispute.

Taxability of services connected with transmission or distribution of electricity under the Negative List of the Finance Act 1994 and CGST Act - expression “transmission or distribution of electricity” - demand relating to rent-a-cab service - Entity-specific exemption under reverse charge - non-registration and non-payment of service tax - Whether the Works Contract, Manpower Recruitment, and Rent-a-Cab services received by the appellant were used for transmission or distribution of electricity and are therefore non-taxable, or whether, in terms of Section 66F(1) of the Finance Act, 1994, they remain taxable as services used to provide the main service.

Transmission or distribution of electricity - Reverse charge exemption - Direct and proximate nexus - HELD THAT: - The Tribunal held that the expression transmission or distribution of electricity in section 66D(k) is of wide amplitude and includes direct and ancillary services integrally connected with that activity. Relying on the High Court decisions in Torrent Power Ltd [2019 (1) TMI 1092 - GUJARAT HIGH COURT] and Jodhpur Vidyut Vitran Nigam Ltd [2021 (2) TMI 557 - RAJASTHAN HIGH COURT] it held that services having a direct, proximate and integral nexus with transmission or distribution cannot be separated merely because tax is demanded from the recipient under partial reverse charge. In the case of an entity-specific exemption available to an electricity transmission utility, the same benefit extends to services received for carrying out that exempt activity. Applying this test, works contract services for erection, commissioning, installation and allied works relating to towers, lines and substations, and manpower services for movement of men and materials and safeguarding operational assets, were found indispensable and integrally connected with transmission and distribution of electricity. [Paras 5, 8, 9, 10, 12]

The demand on works contract service and manpower supply service was not sustainable on merits.

Rent-a-cab service - Direct and proximate nexus - Extended limitation - HELD THAT: - The Tribunal distinguished rent-a-cab service from the other disputed services and held that hiring of motor vehicles for official use did not have a direct and proximate nexus with transmission or distribution of electricity, and therefore did not qualify for the exemption. Even so, the notice invoking the extended period was held unsustainable. The Tribunal found that the dispute involved complex legal issues and disclosed no deliberate attempt to evade tax. Applying the principle stated in Easland Combines, Coimbatore Vs Collector of Central Excise, Coimbatore [2003 (1) TMI 107 - SUPREME COURT] and reaffirmed in Uniworth Textiles Ltd. Vs Commissioner of Central Excise, Raipur [2013 (1) TMI 616 - SUPREME COURT] it held that mere non-payment or failure to obtain registration, without fraud, suppression or wilful misstatement, is insufficient to justify the extended period. [Paras 12]

Though rent-a-cab service was held not exempt, the demand thereon was time-barred.

Final Conclusion: The Tribunal held that works contract service and manpower supply service received for transmission and distribution operations were not taxable under reverse charge, while rent-a-cab service was not exempt but the demand on that service was barred by limitation. The impugned order was therefore set aside and consequential relief was granted.

Entitlement to avail Cenvat credit on the disputed invoice despite discrepancy in the consignee name and variance in the revised invoice records - Documentary proof of receipt and utilisation of inputs.

CENVAT credit on duty-paid inputs - HELD THAT:- The Tribunal held that denial of credit could not rest merely on discrepancies arising when the supplier issued a second invoice to correct the consignee and buyer details. It found that the contemporaneous records, including the inward register, purchase order referred to in both invoices, ledger and purchase records, transporter-related documents, the supplier's stock account and ER-1 return, established actual purchase, despatch, receipt and subsequent utilisation or disposal of the inputs in accordance with the Cenvat Credit Rules, 2004. Since the Revenue produced no rebuttal to this documentary evidence, the defect in the invoice particulars was treated as a technical irregularity and not a ground to deny substantive credit. [Paras 5]

The assessee was held entitled to the CENVAT credit, and the denial of credit with consequential penalties was set aside.

Final Conclusion: The Tribunal allowed the appeals, holding that the disputed credit was admissible because the receipt and use of the duty-paid inputs stood proved by sufficient documentary evidence, notwithstanding defects in the corrected invoice.

Interest on refund of investigation deposit - pre-deposit - Voluntary duty payment Or a deposit made under a mistaken notion - applicability of section 11 -refund with interest.

Interest on refund of investigation deposit - Payment y duty payment - HELD THAT:- From a perusal of the records, it can be seen that such payment was made at the instance of the Department, pursuant to the search operations conducted by the Officers of the Directorate General of Central Excise Intelligence (DGCEI) at the appellant’s factory premises and other premises on 18.07.2008, which fact has also been recorded at paragraph 2.0 of the impugned order dated 28.08.2025. Hence, such payment made by the appellant cannot be construed as a voluntary payment of central excise duty on the part of the appellant.

The Tribunal found from the record, including the finding noted in the impugned appellate order, that the amount was deposited during search proceedings on departmental insistence and while the appellant was contesting the very duty liability. Such payment, therefore, could not be treated as a voluntary discharge of central excise duty, but as an amount paid under a mistaken notion of liability. On that basis, the amount did not assume the character of duty so as to attract Section 11B for denying the claim of interest. Following its earlier decision in M/s. Harrisons Industries [2025 (7) TMI 220 - CESTAT KOLKATA] which had been carried in appeal and against which the High Court found no substantial question of law, the Tribunal held that interest at 12% was payable from the date of deposit till refund. The decision in M/s. Goldy Engineering Works [2025 (4) TMI 1186 - SC ORDER] was distinguished because, in that case, the payment had been treated as duty and the question of payment under a mistaken notion at the instance of the Department had not arisen in the same manner. [Paras 7, 8, 9, 10]

The appellant was held entitled to interest at 12% per annum on the refunded amount from the date of deposit during investigation till the date of refund.

Final Conclusion: The Tribunal allowed the claim for interest and held that the refunded amount, having been deposited during investigation under departmental insistence and under a mistaken notion of liability, could not be treated as voluntary duty payment. Interest at 12% per annum was directed to be paid from the date of deposit till the date of refund.

Levy and collection of duty of excise on all excisable goods - Marketability of intermediate product - phrase ‘excisable goods’ -Excisability of sugar syrup used captively - Trade parlance identity - Manufacture of dairy based Sweetmeats (known as ‘misthans’ or ‘mithai’ etc.) - Exemption from payment of Central Excise duty under the erstwhile Notification No. 3/2006-C.E. dated 01.03.2006 and the subsequent Notification No. 12/2012-C.E. dated 17.03.2012.

Marketability of intermediate product - Excisability of sugar syrup used captively - Trade parlance identity - HELD THAT:- The Tribunal held that, for levy of duty, the product must answer the description of excisable goods, and marketability in the condition in which it emerges is an essential requirement. Though sugar syrup was used in the manufacture of sweetmeats, the goods sold in the market were commercially known only as sweetmeats and not as sugar syrup. Since, in the appellant's case, sugar syrup was not capable of being bought and sold as a distinct and separate product and had no separate trade identity for buyers, it ceased to qualify as excisable goods. The Tribunal followed the principle noticed in Rishi Bakers that marketability cannot be presumed and must exist in the form in which the product emerges. [Paras 5, 6, 7]

The finding that sugar syrup was excisable was held unsustainable, and the demand, interest, penalty and consequential levy founded on that basis were set aside.

Final Conclusion: The Tribunal held that sugar syrup used captively as a preservative in the appellant's sweetmeats was not marketable as an independent product and therefore was not excisable. The impugned order was set aside and the appeal was allowed.

Assessable value - Place of removal - freight charges incurred for delivery of gas cylinders to the buyer's premises - exclusion of freight from the assessable value despite delivery having been effected at the premises of the buyer - Post-Removal Expenditure.

Freight exclusion - Transaction value - Place of removal - HELD THAT: - The Tribunal held that the dispute stood concluded by the decision of the Supreme Court in Commissioner of Customs & Central Excise, Nagpur v. Ispat Industries Ltd. [2015 (10) TMI 613 - SUPREME COURT] It noted that the decisions in Roofit Industries Ltd. [2015 (4) TMI 857 - SUPREME COURT] and Ispat Industries Ltd. [2015 (10) TMI 613 - SUPREME COURT] dealt with post-removal expenditure, but applicability depended on the material facts. Proceeding on that basis, the Tribunal accepted that the present case was governed by the principle applied in Ispat Industries Ltd and not by Roofit Industries Ltd. The finding against exclusion of freight from the assessable value was therefore unsustainable. [Paras 5, 6]

The impugned order was set aside and the appeal was allowed.

Final Conclusion: Applying the Supreme Court decision in Ispat Industries Ltd and distinguishing Roofit Industries Ltd on facts, the Tribunal held that freight was not includible in the assessable value in the present case. The demand sustained in the impugned order was therefore set aside and the appeal was allowed.

Eligibility of CENVAT credit on direct dispatch to job-worker premises - Non-compliance with remand directions - expression ‘job-worker’ - Scope of Rule 4(1) of the CENVAT Credit Rules, 2004 -

Non-compliance with remand directions -HELD THAT:- The Tribunal held that the impugned order did not undertake the factual scrutiny necessary to determine non-entitlement to credit, namely, whether the credit taken conformed with the duty suffered on the inputs and the situs of the inputs at the time of availment. Rule 4(1) was construed as prescribing the point of time at which credit may be taken, and not as a provision mandating denial of credit solely by reference to the address of delivery. The Tribunal further held that the definition of job work in rule 2 could not control rule 4(1), since for the relevant period the expression 'job-work' or 'job-worker' did not form part of that rule. It also noted that the later incorporation enabling credit on receipt at job-worker premises had not been examined from the standpoint of whether it was clarificatory or only prospective. Since the earlier remand had required consideration of the broader excise scheme permitting clearance from premises other than that of the principal manufacturer, and that direction had not been followed, the impugned order was found to be unsustainable. [Paras 5, 6, 7, 8]

The impugned order was set aside for failure to comply with the earlier remand and for erroneous application of rule 4(1), and the matter was remanded for fresh adjudication after considering the appellant's submissions and the facts in the light of the CENVAT credit scheme.

Final Conclusion: The Tribunal found that the adjudicating authority had not complied with the earlier remand directions and had denied credit on an inadequate reading of rule 4(1) without the necessary factual and legal examination. The order was accordingly set aside and the matter remanded for fresh adjudication.

Validity of assessment orders passed after notices issued on the mismatch turnover issue - assessment made without a proper and effective opportunity - Violation of principles of natural justice - Conditional Pre-deposit - tax liability on the turn-overs mismatched with the sellers.

Principles of natural justice - Fresh assessment on remand - HELD THAT: - The Court noted that, though the petitioner had not responded to the notices and had approached the writ court without availing the statutory appellate remedy, the impugned orders themselves showed that only part of the demand had been dropped on the basis of the departmental circular and that the remaining issues had been decided without a proper reply from the petitioner. On that factual basis, the Court held that there was an element of violation of principles of natural justice. It therefore directed a fresh consideration on merits by treating the impugned orders as an addendum to the notices already issued, requiring the petitioner to file proper replies, and requiring the assessing authority to consider the applicable circular while redoing the assessments. The remand was made conditional upon payment of 25% of the disputed tax in cash within the time granted. [Paras 10, 11, 12, 13, 14]

The matter was remitted to the respondent for fresh orders on merits, subject to the petitioner's deposit of 25% of the disputed tax and submission of replies to the notices.

Final Conclusion: The writ petitions were disposed of by setting aside the impugned assessments for fresh consideration on the ground of procedural unfairness. The assessing authority was directed to redo the assessments on merits after receiving the petitioner's replies and considering the departmental circular, subject to the condition of deposit imposed by the Court.

Pre- Conception and Pre-Natal Diagnostic Techniques (PCPNDT) - Validity of the search and raid under the PCPNDT Act for want of a collective decision of the District Appropriate Authority under Section 30 - running a racket of illegal sex-determination - Illegal search and admissibility of seized material - Relevancy and admissibility of evidence - Statutory complaint - Cognizance on complaint by Appropriate Authority - Mandatory maintenance of Form F and statutory records.

Collective decision of Appropriate Authority - Illegal search - Admissibility of relevant evidence - The search conducted on the direction of the Civil Surgeon alone was vitiated, but that illegality did not by itself require quashing of the complaint or exclusion of the materials seized during the search. - HELD THAT: - The Court held that, in view of the statutory scheme and the ratio of Ravindra Kumar [2024 (9) TMI 1900 - SUPREME COURT], authorization of search under Section 30(1) of the PCPNDT Act had to be the collective decision of the District Appropriate Authority and not the act of its Chairperson acting alone. Since the order directing the raid did not disclose any collective decision of the Authority, the search stood vitiated. Even so, the Court held that illegality of search does not automatically render the seized material unusable; relevant material gathered in such search can still be acted upon, subject to the rules of relevancy and admissibility. As the complaint was not liable to fail solely on the ground of the invalid search, quashing was refused, leaving all objections as to reliability and admissibility open for trial. [Paras 45, 50, 57]

Though the search was illegal for want of a collective decision of the Appropriate Authority, the complaint was not quashed because the seized material was not liable to be discarded outright.

Statutory complaint under the PCPNDT Act - Effect of discharge in police case - Mandatory record-keeping contravention - HELD THAT:- The Court held that cognizance of offences under the PCPNDT Act can be taken only on a complaint by the Appropriate Authority or an authorised officer, and not on the basis of the police case. The police itself had recorded that, though sex determination was not found against the appellant, discrepancies in maintenance of records attracted the separate complaint mechanism under the Act. The proviso to Section 4(3), read with Rules 9 and 10, makes complete maintenance of prescribed records by the person conducting ultrasonography mandatory, and deficiency or inaccuracy therein constitutes contravention unless the contrary is proved. Therefore, discharge in the police proceedings was of no consequence to the independent statutory complaint. [Paras 54]

The complaint by the Appropriate Authority remained maintainable notwithstanding the appellant's discharge in the related police case.

Rule 18A(2)(ii) - Investigating machinery - Advisory Committee composition - HELD THAT: - The Court rejected the contention that the proceedings stood vitiated because Dr. Saryu Sharma was part of the raiding exercise and also associated with the Advisory Committee. It held that Rule 18A(2)(ii) applies only to a person who is part of the investigating machinery in cases under the PCPNDT Act, and Dr. Saryu Sharma was not shown to be such a person. The Court further observed that Rule 18A forms part of a general code of conduct and, at the highest, its breach may render a proceeding irregular and not illegal; in the present case, however, no violation was made out at all. [Paras 55]

No contravention of Rule 18A(2)(ii) was established, and the challenge founded on the alleged dual role failed.

Final Conclusion: The appeal was dismissed. While the Court held that the raid was vitiated because it was not authorised by the District Appropriate Authority collectively, it declined to quash the complaint, holding that the seized material could still be considered subject to relevancy and admissibility, and that all merits were left open for trial.

Entitlement to grant bail - non-compliance with the mandatory customs procedure - Illegal custody - Production before Magistrate where contraband is secreted inside body - Speedy trial - Commission of offences under Section 8/21/23/28 of Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) -Personal liberty vis-a -vis statutory embargo on bail.

Illegal custody - Production before Magistrate - Section 103 Customs Act - HELD THAT: - The Court held that once the authorities had reason to believe that goods liable to confiscation were secreted inside the applicant's body, Section 103 of the Customs Act required production before the nearest Magistrate without unnecessary delay, unless there was a clear admission and voluntary submission within the meaning of the statutory exception. On the material noticed by the Court, the notice said to have been explained in French did not disclose any specific response amounting to such admission or willingness. More importantly, 19 capsules had already been recovered at the airport itself, and with that seizure the offence stood revealed. In that situation, the applicant ought to have been arrested forthwith and produced before the Court, and any further medical procedure could have proceeded under judicial authorisation, including at the hospital if necessary. The Court therefore found that the applicant had remained in unauthorised and illegal custody from the date of interception till formal arrest. [Paras 16, 17, 18, 19, 21]

The Court treated the applicant's custody prior to formal arrest as illegal and held that this infraction weighed in favour of grant of bail notwithstanding the rigour of the NDPS Act.

Speedy trial - Prolonged incarceration - Personal liberty vis-a -vis statutory embargo on bail - HELD THAT: - The Court noted that only a small number of witnesses had been examined, despite earlier directions for expeditious trial, and that there was no likelihood of early conclusion of the proceedings. It reiterated that there is no fixed formula for determining when incarceration becomes prolonged, and that the matter must be assessed on the facts of each case. In the present case, the long custody undergone by the applicant coupled with the lack of meaningful trial progress attracted the protection of Article 21, which the Court held must prevail over the statutory restrictions on bail in an appropriate case. [Paras 22, 23, 24, 26]

The Court held that the delay in trial and prolonged custody independently justified release on bail, subject to conditions.

Final Conclusion: The Court granted bail, holding that the applicant had been kept in illegal custody after interception and part-recovery without timely production before the Court, and that the prolonged incarceration with no near prospect of trial completion further justified release. Bail was directed subject to conditions.