TaxTMI Updates e-Newsletter
Apr 07,2026

Condonation of delay - Alternate remedy - No opinion on merits - HELD THAT:- The Special Leave Petition was disposed of without interference with the High Court's order [2026 (3) TMI 1140 - DELHI HIGH COURT], with a clarification that if the petitioner avails the statutory appellate remedy, the appeal may be filed without reference to the delay in approaching the Tribunal, and no opinion was expressed on the merits.

Limitation Period - Interpretation of Section 107 of Central Goods and Services Tax Act, 2017 - revoking the cancellation of GST registration - HELD THAT:- The Special Leave Petition was dismissed as infructuous in view of the subsequent appellate order revoking the cancellation of GST registration. The question of law on the interpretation of Section 107 of the Central Goods and Services Tax Act, 2017 concerning limitation was kept open, and the impugned High Court judgment [2024 (8) TMI 507 - JHARKHAND HIGH COURT] was directed not to be treated as a precedent.

Application for refund under Section 54 - Opportunity of hearing - Statutory time to reply - Principles of Natural Justice - Seeking an extension of time to file the reply to the show-cause notice.

Rule 92(3) compliance - Personal hearing - Adjournment refusal - HELD THAT: - The Court held that under Rule 92(3) the applicant was entitled to fifteen days to furnish a reply to the refund show-cause notice. In the present case, the authority required a reply within seven days and thereafter rejected the refund claim in the absence of the petitioner without any further notice. Though adjournment is not claimable as of right, the authority could not, consistently with fairness and the requirement of personal hearing, refuse the petitioner's single adjournment request and proceed to reject the claim before expiry of the statutory period available for reply. [Paras 7, 8, 9, 10, 11]

The refund rejection order was set aside, and the authority was directed to permit the petitioner to file its reply within fifteen days and to grant a fresh hearing after advance communication of the hearing date.

Final Conclusion: The writ petition was disposed of by setting aside the refund rejection order on the ground that the petitioner was denied the statutory fifteen-day period to reply and an effective opportunity of hearing. The refund authority was directed to receive the reply afresh and conclude the hearing in accordance with law.

Condonation of delay - Alternative statutory remedy - Exclusion of time spent in bona fide proceedings - lack of clarity some suppliers had issued invoices and filed returns using GSTIN 32ZA resulting in mismatch between the GSTR-3B and GSTR-2A/2B - Violation of principles of natural justice and the procedure prescribed under the Central Goods and Services Tax Act, 2017 (“the CGST Act”) - HELD THAT:- The Court noted that the petitioner intended to assail the findings of the proper officer on merits and held that such challenge should be taken before the statutory appellate authority. While doing so, it accepted that the pendency of the rectification application for a considerable period and the time spent in pursuing the writ remedy were relevant circumstances for the purpose of delay condonation. The appellate authority was therefore directed to consider the question of delay in that light and, if satisfied with the explanation and upon compliance with the statutory pre-deposit, to decide the appeal on merits in accordance with law. The Court expressly refrained from expressing any opinion on the merits of the dispute. [Paras 6]

The writ petition was disposed of by relegating the petitioner to the statutory appeal, with a direction that the appellate authority consider delay after taking into account the period spent in rectification proceedings and before the High Court.

Final Conclusion: The Court declined to examine the merits in writ jurisdiction and left the petitioner to avail the appellate remedy. It directed that, while considering delay, the appellate authority should take into account the time spent in the rectification proceedings and in pursuing the writ petition.

Maintainability of the writ petition - Territorial Jurisdiction - Jurisdiction to levy and assess IGST on imported goods - Cross-empowerment under GST enactments - denial of the benefit of exemption given by the Central Government under an exemption Notification issued under Section 6(1) of the IGST Act - Show cause notice covering multiple years - Effect of a High Court striking down a circular.

IGST on imported goods - Customs assessment - Exclusive jurisdiction of customs authorities - HELD THAT: - The Court held that the proviso to Section 5(1) of the IGST Act expressly requires integrated tax on imported goods to be levied and collected in accordance with the Customs Tariff Act at the point when customs duties are levied under the Customs Act. Reading this with the definition of assessment in Section 2(2) of the Customs Act and the recovery mechanism under Section 28, the determination of tariff classification, value, exemption or concession, and the amount of tax payable on imported goods falls within the customs framework. The Court, following Union of India and Another vs. Mohit Minerals Private Limited [2022 (5) TMI 968 - SUPREME COURT] and Ajwa Dry Fruit Impex vs Union of India [2023 (11) TMI 773 - KERALA HIGH COURT], held that GST officers do not have jurisdiction to assess or recover IGST in relation to imported goods. The subsequent proceedings already initiated by the customs authorities reinforced the conclusion that the State tax officer could not continue on that subject. [Paras 16, 17, 18, 19, 20]

The impugned notice, insofar as it dealt with exemption and tax liability on imported goods, was without jurisdiction and was set aside.

Cross-empowerment - Administrative allotment of taxpayer - State tax officer's jurisdiction - HELD THAT: - The Court referred to Section 6 of the CGST Act and Section 4 of the IGST Act and followed its earlier decision in W.P. No. 541 of 2026 and batch. It held that cross-empowerment does not operate generally against all taxpayers, but only where the taxpayer has been administratively allotted to the State and the concerned officer is the proper officer for that taxpayer. Since the petitioner had been allotted to the Central jurisdiction, the first respondent could not assume jurisdiction under the IGST Act on the strength of cross-empowerment. [Paras 21, 22, 23]

The State tax officer lacked jurisdiction to proceed against the petitioner under the IGST framework.

Effect of striking down a circular - Countrywide inoperability - No separate declaration against Circular No. 80/54/2018-GST was required once it had already been struck down by a High Court. - HELD THAT: - The Court noted that the Madras High Court had already struck down the circular. Relying on Kusum Ingots and Alloys Ltd., vs Union of India (UOI) and Ors [2004 (4) TMI 342 - SUPREME COURT (LB)] it held that once such a circular or subordinate legislation is struck down by a High Court, it becomes inoperative across the country, and there was no necessity to strike it down again in the present proceedings. [Paras 24]

The challenge to the circular was not separately adjudicated, as it was already inoperative.

Apart from the jurisdictional defect relating to imported goods, the Court held that the rest of the notice also had to fail because it sought to cover multiple years in one show cause notice. The Court applied its earlier ruling in S.J Constructions vs. The Assistant Commissioner and Ors [2025 (9) TMI 1215 - ANDHRA PRADESH HIGH COURT] and accepted that such a notice was impermissible. [Paras 24]

The impugned notice was set aside in respect of the remaining turnovers and issues as well.

Final Conclusion: The writ petition was allowed. The Court held that the State tax officer had no jurisdiction to proceed in relation to IGST on imported goods and, in any event, could not invoke cross-empowerment against a taxpayer allotted to the Central jurisdiction; the balance of the notice was also set aside as a single show cause notice covering multiple years was impermissible.

Anti-profiteering - failing to pass on the benefit of Input Tax Credit - Commensurate Reduction - Locus Standi - Applicability of the post-GST construction and pricing structure.

Whether the benefit of ITC has not been passed on to their home buyers by way of commensurate reduction in prices - HELD THAT:- The expression “the flat is constructed in the post-Goods and Service Tax period” by no means implies that the flat was already constructed or it was yet to be constructed. Similarly, the term “after making upfront payment of the full price” cannot be interpreted to mean that the entire payment should have been made in one go (in a single lumpsum). Ordinarily, when a new project is launched by a builder, the proposed buyer opts for “construction–linked plan” to facilitate ease of payment and to maintain their financial equilibrium. In ordinary course financing facilities are availed from the different banks or other financial institutions providing housing loan to the buyers. As the construction of the flat progresses, in accordance with the plan and BBA, the builder raises demands for subsequent installment. Such installments are paid by the buyer from the loan amount sanctioned by the said financial institution. The buyer continues to repay the housing loan amount by way of monthly installments.

The Tribunal interpreted paragraph 128(d) of Reckitt Benckiser India Pvt. Ltd. v. Union of India [2024 (1) TMI 1248 - DELHI HIGH COURT] to mean that the relevant test is whether the entire transaction, from inception to completion, occurred in the post-GST period. It held that the expressions concerning construction in the post-GST period and upfront payment of full price do not require that the unit must already be fully constructed on the date of agreement, nor that payment must be made in a single lump sum. Since the undisputed facts showed that the unit was booked, allotted, contracted for, constructed and paid for entirely during the GST regime, the price was taken to have been fixed after factoring the post-GST ITC position, and no separate ITC benefit was claimable by the complainants. [Paras 25, 26, 27, 28, 30]

The complainants were held to have no legal right to challenge the DGAP report on the footing of unpassed ITC benefit in respect of a wholly post-GST transaction.

Input tax credit benefit - Profiteering determination - Commensurate reduction in price - HELD THAT: - The Tribunal accepted the DGAP's computation comparing the ratio of credit availed to purchase value in the pre-GST and post-GST periods. On that analysis, the ratio declined from 12.26% to 11.02%, showing a negative differential rather than any additional benefit accruing after GST. In the absence of any increase in available ITC, the question of commensurate reduction in price did not arise, and contravention of Section 171 read with Rule 129(6) was not established. [Paras 31]

The DGAP report was accepted and the respondent was held not to have contravened Section 171 of the CGST Act.

Final Conclusion: The Tribunal accepted the respondent's preliminary objections and upheld the DGAP report. It held that, as the entire transaction and construction activity were post-GST and no incremental ITC benefit had accrued, no profiteering under Section 171 was made out.

Anti-profiteering - construction services - benefit of additional input tax credit to the home-buyers - Commensurate Reduction in Prices - Acceptance of DGAP Report.

Whether the benefit of the ITC had been passed on to the consumers by way of commensurate reduction in prices, and if so, to suo-moto determine the quantum thereof. - HELD THAT: - The Tribunal accepted the DGAP report which, after redetermination, found that although additional input tax credit had accrued in the post-GST period, the Respondent had already passed on benefit in excess to the eligible buyers. As regards the two complainants, the differential amounts along with interest were stated to have been paid and the same was accepted by them through individual acknowledgments. Since no other home-buyer objected to the DGAP report, there remained no surviving basis to hold profiteering against the Respondent. [Paras 21, 22, 23, 24, 25]

The DGAP report was accepted and the proceedings were finally disposed of on the footing that no contravention of section 171 was made out.

Final Conclusion: The Tribunal accepted the DGAP report holding that the benefit of additional input tax credit had been passed on, including the balance amounts with interest to the two complainants, and therefore no anti-profiteering violation survived against the Respondent. The matter was accordingly disposed of.

Anti-profiteering - benefit of additional input tax credit after the introduction of GST - homebuyers in terms of Section 171 - Commensurate reduction in price - Interest on profiteered amount - Penalty under Section 171(3A) - Whether interest is payable on the profiteered amount and, if so, from which date.

Whether the Respondent derived the benefit of additional input tax credit after the introduction of GST and if so, whether such benefit was passed on to the homebuyers in terms of Section 171 of the CGST Act or not? - HELD THAT: - The Tribunal accepted the DGAP findings that the ratio of input tax credit to purchase value increased by 1.31% in the post-GST period. The respondent also accepted the DGAP computation and stated its willingness to refund the amount so determined. On that basis, the Tribunal held that the benefit of additional input tax credit had accrued to the respondent and, not having been passed on to the homebuyers by way of commensurate reduction in price, there was contravention of Section 171. [Paras 9, 10]

The respondent was held to have profiteered and was liable to pass on the quantified benefit to the homebuyers.

Whether interest is payable on the profiteered amount and, if so, from which date. -HELD THAT: - The Tribunal held that the obligation to pass on the benefit of tax reduction or additional input tax credit arises at the time of supply itself. It interpreted Rule 133(3)(b) of the CGST Rules as mandating return of the amount not passed on together with interest at 18% from the date of collection of the higher amount till its return. Applying that statutory mandate, the Tribunal directed refund of the profiteered amount with interest to the eligible homebuyers from the date of collection of the last instalment from the buyers. [Paras 11, 13]

The respondent was directed to refund the profiteered amount with interest at 18% per annum to the eligible homebuyers.

Penalty under Section 171(3A) - Prospective applicability - HELD THAT: - The Tribunal noted that Section 171(3A) came into force on 01.01.2020, whereas the period of contravention in the present case ran from 01.07.2017 to 31.05.2025. Since the contravention continued during the period when Section 171(3A) was in force, the Tribunal held penalty to be leviable in terms of that provision, subject to its proviso regarding non-levy where the profiteered amount is deposited within thirty days of the order. [Paras 14]

Penalty was held to be leviable under Section 171(3A), subject to the statutory proviso.

Final Conclusion: The Tribunal held that the respondent had profiteered by not passing on the benefit of additional input tax credit to the homebuyers during the period 01.07.2017 to 31.05.2025. It directed refund of the quantified profiteered amount with 18% interest and further held that penalty under Section 171(3A) was leviable subject to the statutory proviso.

Special valuation for second-hand goods - determined on margin basis under Rule 32(5) of the CGST Rules, 2017 read with Notification No. 8/2018-Central Tax (Rate) - Classification of used motor vehicles - HSN Code and Rate of Tax and Assessable Value - Scope of advance ruling jurisdiction.

Whether the applicant, who proposes to purchase and sell second-hand cars, is eligible to discharge GST on the value determined on a margin basis, and the consequential classification, rate of tax and valuation. -HELD THAT:- The Authority held that motor vehicles, including second-hand cars, are goods and that a person engaged in their purchase and sale is a dealer in second-hand goods. Rule 32(5) permits valuation on the margin, being the difference between the selling price and the purchase price, where no input tax credit has been availed on purchase and the goods are supplied as such or after minor processing which does not change their nature; any negative margin is to be ignored. Although the applicant referred to a "Margin Scheme", the Authority noted that no such expression is defined in the Act, and the governing legal position arises from Rule 32(5) read with Notification No. 8/2018-Central Tax (Rate). Since the applicant failed to furnish material particulars and documents regarding the nature of repairs, transfer of ownership and accounting treatment, the Authority declined to certify factual compliance, while clarifying that the benefit would be available only on strict fulfilment of the prescribed conditions. [Paras 15, 16, 17, 18, 21]

The applicant's transactions in second-hand cars are governed by Rule 32(5) read with Notification No. 8/2018-Central Tax (Rate), and margin-based valuation is available only if the conditions therein are strictly satisfied.

Heading 8703 classification - Rate determination - Assessable value - HELD THAT:- The Authority held that motor cars and other motor vehicles principally designed for the transport of persons fall under Heading 8703 of the GST Tariff. It further held that the taxable value, for purposes of the applicable notification, is the difference between the selling price and the purchase price, with negative value to be ignored. However, since the applicant did not furnish particulars such as engine capacity, vehicle length and fuel type, the exact rate of tax could not be ruled upon. [Paras 19, 20, 21]

Classification was determined under Heading 8703 and assessable value was stated on the margin basis, but the precise rate of tax was left undetermined for want of necessary factual particulars.

Advance ruling jurisdiction - Advisory opinion impermissible - HELD THAT: - The Authority held that its power is confined to the questions specified under Section 97(2) of the Act. It therefore declined to answer the applicant's request for 'any other suggestion', treating it as a request for an advisory opinion beyond the statutory scope of advance ruling jurisdiction. [Paras 21]

No ruling could be given on the request for suggestions, as the Authority does not render advisory opinions outside the matters specified by statute.

Final Conclusion: The Authority held that dealings in second-hand cars are subject to the special valuation mechanism under Rule 32(5) read with Notification No. 8/2018-Central Tax (Rate), subject to strict compliance with the prescribed conditions. It classified the vehicles under Heading 8703, stated the margin-based assessable value, declined to determine the exact tax rate for want of factual particulars, and refused to render any general advisory opinion.

Determination of classification of blended products comprising Biodiesel and High-Speed Diesel (HSD) in varying proportions, namely B20, B30, B40, B50, B50, B60 and B70 - Harmonised System of Nomenclature Explanatory Notes - .

Classification - Diesel fuel blend - Petroleum oils containing biodiesel - HELD THAT:- It is a settled legal position that the tariff item, sub-heading, heading and Chapter specified in GST Rate Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017 shall have the same meaning as assigned to them in the First Schedule to the Customs Tariff Act, 1975. Paragraphs 3 and 4 of the Explanation to the said notification expressly provide that the rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975, including the relevant Section Notes, Chapter Notes and the General Explanatory Notes, shall, so far as may be, apply to the interpretation of the said notification.

The Authority held that GST classification must follow the Customs Tariff and the interpretative rules and HSN Explanatory Notes applicable thereto. Under Heading 2710, products containing by weight 70% or more of petroleum oils and also containing biodiesel are covered by sub-heading 271020. The HSN Explanatory Notes specifically place blends of biodiesel containing 70% or more of petroleum oils within Heading 2710, while blends containing less than that threshold fall under Heading 3826. On that basis, B20 and B30, having petroleum oil content of 80% and 70% respectively, were held classifiable under sub-heading 271020. Since tariff item 27102020 specifically covers diesel fuel blend B6 to B20 conforming to IS 16531, B20 was placed thereunder; B30, for which no specific tariff item exists under sub-heading 271020, was placed under the residual entry 27102090. [Paras 11, 13, 14, 15]

B20 is classifiable under tariff item 27102020, and B30 is classifiable under tariff item 27102090.

Classification - Biodiesel and mixtures thereof - Less than 70% petroleum oils - Biodiesel blends containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals are classifiable under tariff item 38260000. - HELD THAT: - It is pertinent to note that under the GST regime, specified petroleum products, including High-Speed Diesel, have been consciously kept outside the levy of GST. This exclusion, however, is product-specific and does not automatically extend to all blends or mixtures containing petroleum oils. The Customs Tariff, which is adopted for GST classification purposes, draws a clear statutory distinction between petroleum-dominant fuels falling under Chapter 27 and biodiesel and its mixtures falling under Chapter 38.

The HSN Explanatory Notes to Heading 2710 exclude biodiesel and its blends containing less than 70% by weight of petroleum oils, and the Explanatory Notes to Heading 3826 correspondingly include biodiesel and mixtures thereof not containing or containing less than 70% of such oils. Applying that test, blends B40, B50, B60 and B70, in which petroleum oil content is below 70%, were held to fall outside Heading 2710 and to be specifically classifiable under tariff item 38260000. [Paras 13, 14, 15]

B40, B50, B60 and B70 are classifiable under tariff item 38260000.

Final Conclusion: Biodiesel blends containing Biodiesel 20% and HSD 80% (B20), conforming to IS 16531, are classifiable under Sub-heading 271020, specifically under tariff item 27102020, namely “Diesel fuel blend (B6 to B20) conforming to standards IS 16531”.

Biodiesel blends containing Biodiesel 30% and HSD 70% (B30) are classifiable under Sub-heading 271020. In the absence of a specific tariff item covering biodiesel blends beyond B20 under Heading 2710, the said product is classifiable under the residual tariff item 2710 20 90, namely “Other petroleum oil preparations”.

Biodiesel blends B40, B50, B60 and B70, containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals, are classifiable under Chapter Heading 3826, and specifically under tariff item 38260000, namely “Biodiesel and mixtures thereof, not containing or containing less than 70% by weight of petroleum oils or oils obtained from bituminous minerals”.

Taxability on supply of pure labour service to various single standalone residential dwelling units - Eligibility for exemption from GST under Entry No. 11 of Notification No. 12/2017-Central Tax (Rate) - Supply of pure labour services for construction-related original works in respect of stand-alone single residential dwelling units, without supply of goods or materials.

Whether the services supplied by the Applicant qualify for exemption under Entry No. 11 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. - HELD THAT: - The phrase “service by way of pure labour contracts of construction, erection, commissioning, or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex” covers services where the supplier undertakes only labour-oriented activities, without any supply of goods or materials, in relation to original works of a single residential dwelling unit.

The words “Original works”, “residential complex” and Single residential Unit are defined under Paragraph 2(zs), 2 (zzb) and 2 (zze) respectively of the Notification No. 12/2017-CT(R) dated 28.06.2017. as amended.

On a conjoint reading of Entry No. 11 of Notification No. 12/2017-Central Tax (Rate) along with the relevant definitions, it is evident that services by way of pure labour contracts, i.e., contracts where there is no transfer of property in goods and no material is supplied by the service provider, involving construction, erection, commissioning, or installation of original works (which include new construction or first-time installation), pertaining to a single residential dwelling unit, otherwise than as a part of a residential complex, are exempt from GST.

On the facts recorded, the applicant supplied only labour, without transfer of property in goods or supply of materials, and rendered such services only to individual owners of stand-alone residential houses, not to apartments, housing projects or residential complexes. Since the services satisfied the stated conditions of the notification, the exemption was available. [Paras 12, 13, 14]

The services were held exempt from GST, subject to the activity being original works and the unit being a single stand-alone residential dwelling unit not forming part of a residential complex.

Final Conclusion: The Authority ruled that pure labour services supplied for construction, erection, commissioning or installation of original works relating to a single stand-alone residential dwelling unit are exempt from GST under Entry No. 11 of Notification No. 12/2017-Central Tax (Rate), provided the unit is not part of a residential complex and no goods or materials are supplied.

Contractual arrangement and Construction Services - Scope of term “supply” - Supply of construction service despite outsourcing - Composite supply of land and villa construction - Classification of residential villa construction by promoter - Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, or under Heading 9954(xii) -determination of the value of supply, if such service classifiable under Heading 9954 (i)(a).

Whether the agreement entered into by the applicant with the customers for construction of villa results in a supply of goods or services considering the fact that the entire construction is proposed to be outsourced to a contractor? - HELD THAT:- It is an admitted fact that the Applicant enters into direct contractual arrangements with the buyers for the construction of villas and receives consideration therefor. The Applicant assumes full contractual responsibility for execution, completion, and delivery of the constructed villas to the buyers. The outsourcing of the actual construction activity to a third-party contractor is merely a mode of performance of the Applicant’s contractual obligations and does not alter, substitute, or extinguish the Applicant’s independent supply to the buyers. Each transaction in the supply chain constitutes a distinct and taxable supply in the hands of the respective supplier.

Under the GST regime, the scope of “supply” has been consciously widened under Section 7 of the CGST Act, 2017. Further, works contracts relating to immovable property have been expressly classified as a supply of services under paragraph 6(a) of Schedule II to the CGST Act. The existence of a subcontractor or the outsourcing of construction activity does not dilute or negate the Applicant’s independent supply to the customers, as each supply is liable to tax in the hands of the respective supplier.

Accordingly, it is held that the agreement entered into by the Applicant with the buyers for construction of villas constitutes a taxable supply of construction service under GST, and the Applicant cannot avoid tax liability on the ground that the construction activity has been entirely outsourced to a contractor.

The construction agreement with the buyers constitutes a taxable supply of construction service by the applicant.

Composite supply - Specific classification prevailing over general entry - Residential apartment construction by promoter - HELD THAT: - In terms of Section 8 of the CGST Act, 2017, a composite supply is to be treated as a supply of the principal supply. Accordingly, the entire consideration attributable to the construction of the villa is liable to tax in the manner applicable to construction services under the GST law, subject to the valuation mechanism prescribed for real estate transactions.

On examining the contractual arrangement, the Authority found that the agreement for sale of land and the construction agreement are co-terminus, inextricably linked, and structured to achieve a single economic objective of supplying a completed residential villa to the buyer. The buyer is not free to engage any other person for construction, and consideration is received before completion. The transaction therefore answers the description of a naturally bundled composite supply, with construction service as the principal supply. Since the activity is construction of residential units intended for sale by a promoter in a real estate project, the specific entry under Heading 9954(ia) applies and prevails over the residuary or general works contract entry under Heading 9954(xii). [Paras 12]

The supply is classifiable under Heading 9954(ia) and taxable at the rate prescribed for that entry.

Valuation of construction service - Deemed deduction towards land - Total amount charged - HELD THAT: - It is pertinent to note that paragraph 2 of Notification No. 11/2017-Central Tax (Rate), as amended,( as mentioned in paragraph 13.2 supra) specifically provides that the value of supply of construction services involving transfer of land or undivided share in land shall be deemed to be the total amount charged for such supply less the value of land, which shall be deemed as one-third of the total amount charged. This deeming provision is a statutory valuation mechanism notified in exercise of powers under Section 15 of the CGST Act, 2017 and is required to be uniformly applied to all supplies falling within its scope.

The Authority held that paragraph 2 of the rate notification provides a binding statutory valuation mechanism for construction services involving transfer of land or undivided share of land, under which one-third of the total amount charged is deemed to represent land value. As the land agreement and construction agreement together form one bundled transaction culminating in supply of a constructed unit, the consideration under both agreements forms part of the total amount charged. The existence of a separately ascertainable land price does not alter this position, and the applicant cannot substitute actual land value for the notified deeming deduction. [Paras 12]

The taxable value has to be determined only after deducting one-third of the total amount charged towards deemed land value.

Final Conclusion: The Authority ruled that the applicant's contractual arrangement with buyers for construction of villas amounts to a taxable supply of construction service notwithstanding complete outsourcing of execution. It further held that the transaction is classifiable under Heading 9954(ia), and valuation must follow the notified one-third deemed deduction towards land on the total amount charged.

Taxability of Fees Received for Renewal of Certificates (c-ECLS / ENLS / BCLS Courses) - Charitable activities Or Not - Benefit of exemption under Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) - Public awareness of preventive health - BCLS course offered to students other than medical students - Eligibility of exemption under Entry No. 1 or Entry No. 66 of Notification No. 12/2017-Central Tax (Rate) - services consist of imparting specialised emergency care and life support skills to identified participants for consideration - Whether the applicant is liable to pay GST on the fees collected/share of fees received from colleges in respect of renewal of certificate for c-ECLS/ENLS/BCLS course?

Charitable activities - Public awareness of preventive health - Professional training - HELD THAT: - The Authority held that though the applicant was registered under section 12AA/12AB, exemption under Entry 1 of Notification No. 12/2017 was confined to the specific and restrictive definition of charitable activities. The expression public awareness of preventive health was construed to cover population-focused awareness activities directed to the general public, such as campaigns, outreach and similar preventive health initiatives. The applicant's courses were found to be structured, specialised and mandatory training modules delivered to an identifiable class of students and healthcare personnel under institutional arrangements for consideration, involving training, evaluation, certification and quality control. Such services were therefore professional training and educational support services, and any public benefit arising from the future conduct of trained participants was only indirect and insufficient to satisfy the notification. Since the applicant's role at the stage of renewal remained the same as at the initial stage, the same conclusion applied to renewal fees as well. [Paras 12, 14]

Entry 1 exemption was denied for the applicant's share of fees in respect of c-ECLS, ENLS and BCLS courses, including renewal of certificates, and GST was held payable.

Educational institution - Charitable activities - Skill-development training - HELD THAT: - The Authority found that the BCLS course imparted structured skill-based training resulting in acquisition of measurable competencies, and its essential character remained that of educational or skill-development training rather than dissemination of public awareness to society at large. It therefore did not fall within charitable activities under paragraph 2(r). The Authority further held that the applicant did not satisfy the definition of educational institution in paragraph 2(y), since it neither provided pre-school or higher secondary education, nor education as part of a curriculum for obtaining a qualification recognised by law, nor an approved vocational education course. The certificate issued by the applicant was treated only as a training or skill-development certification and not as a recognised educational qualification. [Paras 13]

The BCLS course offered to persons other than medical students was held taxable, with no exemption available under Entry 1 or Entry 66 of Notification No. 12/2017.

Commercial training and coaching services - Classification of services - GST rate - The services provided by the applicant were classified under SAC 999293 as commercial training and coaching services and held taxable at 18 per cent. - HELD THAT: - Having found that the services were not covered by the claimed exemptions, the Authority examined their classification and held that the applicant was imparting training in emergency care, life support techniques and related skill-based modules intended to prepare individuals to respond effectively to emergencies. These activities were found to answer the description of commercial training and coaching services, since they involved imparting specific skills and knowledge with or without issuance of certificates and were not covered by any exempt category. The same classification was applied to certificate renewal activities because the nature of the applicant's role and services remained unchanged. [Paras 13, 14]

All services provided by the applicant were held classifiable under SAC 999293 and liable to GST at 18%.

Final Conclusion: The Authority held that the applicant's emergency care and life support courses, including renewal activities, were not charitable activities and did not qualify for exemption under Notification No. 12/2017. The applicant was also held not to be an educational institution for Entry 66 purposes, and its services were classified as commercial training and coaching services taxable at 18%.

Educational Institution - Benefit of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 - definition of educational institution in paragraph 2(y) - Services relating to conduct of examination - Exemption covered by Entry No. 66(b)(iv).

Whether the printing of exam papers provided to universities is exempt from tax in terms of sl.no.66 (b) (IV) of the Notification No. 12/2017-Central (Tax) Rate dated 28.06.2017, as amended. - HELD THAT: - On a reading of the definition of “educational institution,” it is observed that sub-paragraphs (i) and (iii) thereof are not applicable to universities, as they pertain respectively to pre-school education and education up to higher secondary school or equivalent, and to education as a part of an approved vocational education course. Accordingly, the possibility of a university qualifying as an educational institution arises only under sub-paragraph (ii), namely, education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force. This is an area where doubts have persisted as to what would be the meaning of “education as part of curriculum for obtaining a qualification recognized by law”.

The Authority held that universities answer the description of an educational institution under paragraph 2(y)(ii), since they impart curriculum-based education leading to qualifications recognised by law and are statutorily empowered to prescribe curriculum, conduct examinations and award degrees. It further held that the expression services relating to in Serial No. 66(b)(iv) is of wide import and extends to ancillary and incidental services having a direct and proximate nexus with the conduct of examination. Printing of question papers being indispensable and integrally connected with the examination process, such supply to universities is covered by the exemption. The Authority also noted the clarification in Circular No. 151/07/2021-GST and the decision in Rajiv Gandhi University of Health Sciences [2024 (8) TMI 209 - KARNATAKA HIGH COURT], affirmed in Rajiv Gandhi University of Health Sciences (SC) [2025 (1) TMI 1550 - SC ORDER], in support of that position. [Paras 12, 13]

The service of printing examination question papers supplied to universities is exempt from GST under Serial No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate).

Final Conclusion: The Authority ruled that universities are educational institutions for the purpose of the exemption notification, and printing of examination question papers for them is a service relating to the conduct of examination. The applicant's supply was therefore held exempt from GST under Serial No. 66(b)(iv) of Notification No. 12/2017-Central Tax (Rate).

Eligibility of exemption under Entry 99 of Notification No. 2/2017-Central Tax (Rate) - supply of unprocessed water by the applicant to its members - Exemption for water as goods - Water charges collected from members form part of the Home Owners' Association service - Inclusion of water charges in exemption threshold under Notification No. 12/2017-Central Tax (Rate) - Pure agent exclusion - Composite Supply - Distinct Persons​​​​​​​.

Composite supply of Home Owners' Association services - Exemption for water as goods - HELD THAT: - The Authority held that the association is a distinct legal person and its activities towards members constitute a supply. On the facts, the recovery towards water was found to be integrally linked to the overall service of managing and maintaining the residential complex. The supply rendered by the applicant was treated as Home Owners' Association service classifiable as membership organisation service, and not as a separate sale of water as goods. Since the water component was intrinsically connected with maintenance and upkeep of the residential complex, Entry 99 applicable to supply of goods could not be invoked. [Paras 17, 18]

The claimed exemption under Entry 99 was rejected and the water component was held to form part of the association's service to members.

Inclusion of water charges in exemption threshold - Pure agent exclusion - HELD THAT: - The Authority held that once the water component forms part of the association's principal service, separate invoicing or billing on actual consumption does not alter its character. It further held that the applicant did not satisfy the mandatory conditions ofpure agent under Rule 33, and therefore the recovery could not be excluded from taxable value under Section 15(3) read with Rule 33. As a result, water charges were required to be aggregated with maintenance charges for applying the threshold exemption available to residential welfare associations. [Paras 17, 18]

Water charges were held to form part of the value of supply and had to be included for computing the Rs. 7,500 per member per month threshold.

Classification of Home Owners' Association services - Rate of tax on membership organisation services - HELD THAT: - Having held that the applicant was supplying a single service as a homeowners' association, the Authority classified the activity under SAC 999598 as membership organisation services, including services of resident welfare or homeowners' associations. The tax rate followed from that classification and became applicable where the exemption threshold was crossed. [Paras 17, 18]

The service was classified under SAC 999598 and held taxable at 18%.

Final Conclusion: The Authority held that the applicant's recovery of water charges from members is not an exempt independent supply of water, but part of Home Owners' Association services. Consequently, such charges must be aggregated with maintenance charges for the exemption threshold, and the service is taxable under SAC 999598 at 18% where the threshold is exceeded.

Reopening of assessment based on information from investigation wing - accommodation entries / bogus purchases - onus on assessee to prove genuineness of purchases - addition limited to a percentage of disputed purchases to reflect the income component - gross delay of 750 days in filing the Special Leave Petition

HC order [2023 (10) TMI 211 - GUJARAT HIGH COURT] concluded reopening based on Investigation Wing information was valid and that the Tribunal's factual findings on bogus purchases and the limited percentage addition to reflect the income component were conclusions of fact which did not raise any substantial question of law.

HELD THAT:- There is a gross delay of 750 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner.

Even otherwise, we find no good reason to interfere with the impugned order passed by the High Court - Special Leave Petition is, therefore, dismissed on the ground of delay as well as merits.

Issuance of a notice u/s 153C - Mandation of recording of the satisfaction note - Immediacy requirement for recording satisfaction note - delay of 22 months in recording the satisfaction - HC [2025 (11) TMI 1318 - GUJARAT HIGH COURT] set aside impugned notices u/s 153C for failure to record the requisite satisfaction note within the immediate period mandated

HELD THAT:- Having heard the learned counsel appearing for the petitioner and having gone through the materials available on record, we do not find any good ground to interfere with the impugned order passed by the High Court.

3. The Special Leave Petition is, accordingly, dismissed.

Treatment/conversion of old Section 148 notices as notices under newly inserted Section 148A(b) - time-barred reassessment notices under the pre 2021 and post 2021 regimes - Validity of notices issued on or after 1 April 2021 (converted/taken as issued under Section 148A(b)) in respect of assessment years 2013-14 and 2014-15 - Section 3(1) of TOLA - executive extension of limitation - repeal and substitution of reassessment provisions by the Finance Act, 2021 - delay in filing the Special Leave Petitions

HELD THAT:- There is an inordinate delay in filing the Special Leave Petitions which has not been satisfactorily explained by the petitioners.

Even otherwise, we see no good ground to interfere with the impugned order(s) passed by the High Court [2024 (2) TMI 704 - CALCUTTA HIGH COURT] as held all impugned notices issued on or after 1 April 2021 in respect of assessment years 2013 14 and 2014 15 that rely on extensions under TOLA and Notifications No. 20/2021 and No. 38/2021 are quashed as time barred.

The Special Leave Petitions are, accordingly, dismissed on the ground of delay as well as on merits.

Unexplained cash credits - credits in question treated under the head “income from other sources”- nexus to the business and the income -advantage of deduction under Section 80-IA(4)

Unexplained cash credits - trade credits found in the assessee's books, for which the source, identity and creditworthiness of the creditors were not satisfactorily proved - sundry credits in question treated under the head “income from other sources” as no evidence had been let in to prove that the same had arisen in the assessee’s ordinary course of business - HELD THAT: - The Court held that the decisive question was whether the source of the sundry credits had been properly explained. Since the assessee failed to establish the source, identity of the creditors and mode of payment to the satisfaction of the Assessing Officer, and the balance amount remained unexplained even after remand, such receipt could not retain the character of trade credit arising from business. The Court further noted that the assessee had not disclosed the impugned credit under any head of income as business receipt. In these circumstances, the unexplained credits fell within Section 68 and were taxable under the residuary head, and not as profits and gains of business. [Paras 14, 15, 19, 20, 21]

The addition of the unexplained balance credit was rightly treated under Section 68 as income from other sources and not as business income.

Advantage of Deduction u/s 80-IA/80-IB on the unexplained credits - HELD THAT: - The Court held that to claim deduction under Sections 80-IA/80-IB, the assessee had first to show that the receipt was income derived from the eligible industrial undertaking and explain its nature and source. Where the assessee neither disclosed the credit as business income nor satisfactorily proved its source, the receipt could not be linked to the eligible business. Consequently, an unexplained income brought to tax under Section 68 could not be exempted by treating it as eligible business profit. [Paras 18, 19, 20, 21]

The claim for deduction under Sections 80-IA/80-IB on the unexplained credits was not sustainable.

Assessee has not declared, the cash credit under any of the 5 heads of income. That apart, the source and identity of the creditors are also not placed before the assessing officer to his satisfaction. The appellant authority without any material evidence to satisfy the source and identity of the creditor, has accepted the explanation given by the assessee as satisfactory explanation. Such explanation which has come belatedly without disclosing the said sundry receipts as income, cannot be countenanced, in view of the judgment in Fakir Mohmed Haji Hasan [2000 (8) TMI 44 - GUJARAT HIGH COURT]

Final Conclusion: The Court held that the unexplained trade credits, not having been proved as business receipts, were taxable under Section 68 as income from other sources and were not eligible for deduction under Sections 80-IA/80-IB. The appeal was accordingly dismissed in favour of the revenue.

Assessment based on seized material - Denial of cross-examination of the maker of a statement - denial of principle of natural justice - HELD THAT: - The Court held that the principle in Andaman Timber Industries Vs. Commissioner of Central Excise, Kolkata - II [2015 (10) TMI 442 - SUPREME COURT] was inapplicable because the notice under section 153C and the assessment order were not issued on the basis of the statement of K. Srinivasulu. The proceedings were initiated on the strength of the slip recovered during the search at the premises of the searched person, and the Department had consistently stated that the statement was only corroborative and was not proposed to be used against the petitioner.

The Court also noted that even in proceedings relating to the searched person, the Department had not relied on the said statement after the maker had turned hostile. Since the impugned proceedings rested on seized material and not on the statement sought to be tested by cross-examination, refusal of such cross-examination did not amount to procedural irregularity, perversity, or violation of natural justice. [Paras 24, 28, 29, 31, 32]

The challenge to the assessment order and the consequential penalty order on the ground of denial of cross-examination was rejected.

Final Conclusion: The Court held that the assessment u/s 153C and the consequential penalty were not founded on the statement of the person whose cross-examination was sought, but on seized loose sheets recovered during the search. On that basis, no breach of natural justice was made out, and the writ petitions were dismissed with liberty to the petitioner to pursue the appellate remedy.

Scope of Limited scrutinyassessment - Conversion to complete scrutiny - Approval of Principal Commissioner - Exemption u/s 54F - Purchase of residential house

Limited scrutiny expanded into Complete scrutiny - CBDT Instruction No. 7/2014 - mandation to get written approval required from the competent authority - HELD THAT: - The Tribunal found from the notice under section 143(2), the annexure to notice under section 142(1), and the assessment order itself, that the case had originally been selected under CASS for limited scrutiny confined to capital gains deduction claimed. It further found that the Assessing Officer thereafter proceeded on the footing that complete scrutiny was underway and expanded the enquiry beyond the limited scrutiny issue, but there was no written approval of the PCIT as mandated by CBDT Instruction No. 7/2014 for such conversion. In the absence of that approval, the expansion of the scope of scrutiny was held to be contrary to the binding instruction and the assessment was rendered unsustainable. [Paras 13, 14, 15, 16, 18]

The conversion of limited scrutiny into complete scrutiny without written approval was held invalid, and the assessment was quashed on that ground.

Section 69A - Deeming fiction - Time-barred assessment years - The assessee's contention that the Assessing Officer could not examine the share acquisition transactions of earlier years because those years had become time-barred - HELD THAT: - The Tribunal held that section 69A creates a deeming fiction and, on that basis, did not accept the assessee's objection founded on the alleged finality of the earlier assessment years. It therefore declined to hold that the enquiry into the earlier share acquisition transactions was barred merely because those years were time-barred for regular scrutiny. [Paras 21]

This objection of the assessee was rejected.

Exemption under section 54F - Purchase of residential house - Registration of sale deed - Exemption denied solely on the ground that the sale deed of the residential property had not been executed or registered - HELD THAT: - The Tribunal held that, for the purposes of section 54F, the relevant test is whether the assessee purchased the residential property and invested the long-term capital gain within the statutory period, and not whether legal title had been perfected by a registered conveyance. Since the AO denied the claim only for want of registration, without applying the settled legal position that registration is not imperative for claiming the exemption, the denial of the deduction was held to be unsustainable. [Paras 28]

The disallowance of the deduction u/s 54F on the sole ground of non-registration of the sale deed was held contrary to law.

Final Conclusion: Tribunal allowed the appeal. It quashed the assessment on the ground that the Assessing Officer had converted a limited scrutiny into complete scrutiny without the mandatory approval, and also held that deduction under section 54F could not be denied merely for want of a registered sale deed.

Addition u/s 68 in respect of sale of shares - unexplained cash credit -Estimation of profit on sale of investments

Addition u/s 68 - sale of shares held as investments - genuineness of sale proceeds - some purchasing entities were doubted - HELD THAT: - The Tribunal found that the shares had been purchased in earlier financial years, had continued to appear in the assessee's balance sheets, and such purchases were never doubted by the Department. During the year, only the receipts from 12 purchasers were questioned, though the assessee had furnished the relevant details and the material on record showed that those entities were in existence on the dates of sale. When the underlying investments were accepted in earlier years and the assessee had produced evidences regarding the purchasers and the transactions, the sale proceeds could not be brought to tax u/s 68 merely on doubts about the purchasers' existence. [Paras 7]

The deletion of the addition u/s 68 in respect of the impugned sale proceeds was upheld and the Revenue's appeal was dismissed.

Profit element estimation - sale of investments at cost - direction of the CIT (A) to the AO to assess the profit element embedded in the total sale consideration at the rate of 5% - HELD THAT: - The Tribunal held that the appellate authority had assigned no factual or legal basis for estimating profit at 5 per cent of the total sale consideration. The direction rested only on presumptions and surmises, without any material showing that the assessee had in fact earned profit on sale of the investments. In the absence of any substantive basis for such estimation, the addition could not be sustained. [Paras 8, 9]

The direction to make addition at 5 per cent of the sale consideration was set aside and the assessee's cross-objection was allowed.

Final Conclusion: The Tribunal upheld the deletion of the addition made under section 68 in respect of the impugned sale proceeds of shares. It, however, set aside the further direction to tax 5 per cent of the total sale consideration as profit, resulting in dismissal of the Revenue's appeal and allowance of the assessee's cross-objection.

DTAA rate on dividend distribution tax - Transfer pricing adjustment on management fees - applicability of Dividend Distribution Tax (DDT) tax rate @10% under the India-Netherlands tax treaty read with protocol treaty and the excess DDT paid should be refunded along with the interest

HELD THAT: - The Tribunal noted that the Bombay High Court in Colorcon Asia (P.). Ltd. [2025 (12) TMI 677 - BOMBAY HIGH COURT] after considering the Special Bench decision in DCIT Vs Total Oil India Private Ltd [2023 (4) TMI 988 - ITAT MUMBAI (SB)] held that tax on dividends distributed to a non-resident shareholder could be restricted to the rate provided under the applicable DTAA.

Since the assessee's additional ground required verification of the applicability of the relevant treaty and comparison of the rate under section 115-O with the treaty rate on dividends, the matter was restored to the AO for fresh adjudication in the light of that decision after due examination and opportunity of hearing. [Paras 5]

The additional ground on treaty restriction of dividend distribution tax was allowed for statistical purposes by remitting the issue to the Assessing Officer for limited fresh consideration.

Transfer pricing on management fees - benchmarking approach - fresh consideration of evidence - HELD THAT: - The Tribunal found that the core dispute concerned non-consideration of the assessee's material on cost-benefit analysis and the correctness of the benchmarking approach adopted for management fees paid to the associated enterprise. It also noted that, on a similar dispute in the assessee's own case for the earlier year, the matter had already been restored and was pending. To maintain consistency and in the interest of justice, the Tribunal restored the issue to the Dispute Resolution Panel for fresh adjudication on similar lines, including the aggregation approach for benchmarking, after granting adequate opportunity to the assessee. [Paras 9]

The transfer pricing adjustment relating to management fees was set aside to the Dispute Resolution Panel for fresh adjudication, and the corresponding grounds were allowed for statistical purposes.

Final Conclusion: The appeal was partly allowed for statistical purposes. The treaty-rate claim in respect of dividend distribution tax was remitted to the Assessing Officer for limited fresh examination in the light of the Bombay High Court decision, and the transfer pricing adjustment on management fees was restored to the Dispute Resolution Panel for fresh adjudication.

Deemed notional income from house property from unsold inventory held as stock-in-trade - Municipal rateable value for determination of annual letting value - Retrospective tolerance band under section 43CA - Ad hoc disallowance for want of supporting evidence

Notional annual letting value on unsold stock-in-trade - Income from house property - Municipal rateable value - Vacant unsold flats and shops held by the assessee as stock-in-trade - HELD THAT: - The Tribunal held that the controversy concerned notional rental income on completed unsold units lying vacant with the assessee, and not the head of income applicable where such units were actually let out. It accepted the distinction drawn in M/s. Inorbit Malls Pvt. Ltd. [2022 (10) TMI 1150 - ITAT MUMBAI] between cases of actual rental receipts and cases of vacant unsold stock, and held that Neha Builders Pvt. Ltd [2006 (8) TMI 105 - GUJARAT HIGH COURT] and M/s. Classique Associates Ltd. [2019 (4) TMI 1312 - BOMBAY HIGH COURT] were rendered in a different factual setting involving leased properties.

Following Ansal Housing Finance and Leasing Company Ltd [2012 (11) TMI 323 - DELHI HIGH COURT] it held that annual letting value of such vacant unsold stock had to be brought to tax under the head income from house property. On computation, the Assessing Officer was directed to determine the annual letting value in accordance with Tip Top Typography, and not on an ad hoc percentage of investment. [Paras 22, 23, 40]

The addition on account of notional rent was upheld in principle for both assessment years, but the computation was directed to be redone on the basis of the applicable municipal rateable value principles.

Ad hoc disallowance of business promotion expenses for want of supporting evidence - assessee failed to substantiate the claim with bills, vouchers or other documentary evidence - HELD THAT: - The Tribunal found that the assessee did not produce the necessary supporting material either before the lower authorities or in appeal to substantiate the claimed business promotion expenditure. In the absence of documentary evidence, it found no infirmity in the disallowance sustained by the lower authorities. [Paras 27, 41]

The disallowance of business promotion expenses was upheld for both assessment years.

Disallowance made u/s 43CA - difference between the consideration received by the assessee and the value of the property adopted by the Stamp Valuation Authority - scope of tolerance band in section 43CA -HELD THAT: - The Tribunal noted that the proviso introducing a tolerance band in section 43CA was intended to mitigate hardship arising from minor bona fide variations between stated consideration and stamp valuation. Following Maria Fernandes Cheryl [2021 (1) TMI 620 - ITAT MUMBAI] on the analogous interpretation of section 50C, and Karb Associates (P.) Ltd [2021 (8) TMI 1184 - ITAT KOLKATA] extending the same reasoning to section 43CA, it held that the proviso and the subsequent enhancement of the tolerance limit were curative in nature and related back to the date on which section 43CA became effective. Since the variation in the assessee's case was below 5 per cent, section 43CA was held inapplicable. [Paras 34, 35, 36, 37]

The addition made under section 43CA for assessment year 2017-18 was deleted.

Final Conclusion: Both appeals were partly allowed. The Tribunal upheld taxability of notional annual letting value on vacant unsold stock-in-trade under the head income from house property, subject to recomputation on the proper annual letting value basis, sustained the disallowance of unsupported business promotion expenses, and for assessment year 2017-18 deleted the addition made under section 43CA.

TDS u/s 195 - Tax deduction at source on commission to non-resident agents - Chargeability of non-resident income in India - Ocean freight paid to non-resident shipping lines or their agents

Commission to non-resident agents - Section 195 applicability - Section 40(a)(i) disallowance - HELD THAT: - The Tribunal upheld the appellate finding that the payment made to SAFCO, a non-resident stated to have no Permanent Establishment in India, did not give rise to income accruing or arising in India.

Following the coordinate Bench decision in M/s. Sonpal Exports Pvt. Ltd [2025 (8) TMI 1791 - ITAT RAJKOT] the Tribunal accepted that where commission is paid to a non-resident agent for services rendered outside India and the sum is not chargeable to tax in India, section 195 is not attracted. Once tax was not deductible, the disallowance made on that footing under section 40(a)(i) could not survive. The Revenue having placed no material to dislodge the findings recorded by the CIT(A), no interference was warranted. [Paras 11, 12]

Deletion of the disallowance of foreign commission was affirmed.

Ocean freight to non-resident shipping lines - CBDT Circular No. 723 - Section 172 vis-a-vis tax deduction at source - HELD THAT: - The CIT(A) had held that tax had already been deducted on the payments made to residents and that the balance ocean freight paid to non-resident shipping lines or their agents was not liable for deduction of tax at source in view of CBDT Circular No. 723 of 1995. The Tribunal found no material from the Revenue to rebut these factual and legal findings and therefore declined to interfere with the appellate order. [Paras 12]

Deletion of the disallowance relating to ocean freight was sustained.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and affirmed the order of the CIT(A). It held that no interference was called for with the deletion of the disallowances relating to foreign commission and ocean freight.

Penalty u/s 270A for misreporting of income - under-reporting of income in consequence of misreporting" -assessee had initially claimed deduction for a donation later, foundon investigation, to be part of a bogus donation arrangement thus later withdrawn -effect of offering the income in response to return filed u/s 148 - argument of “peace of mind" for offering the income - AO rejected the Assessee's plea of "voluntary disclosure," holding that the withdrawal of the claim was a result of inevitable detection rather than bona fide claim

HELD THAT: - The Tribunal held that section 270A operates under a statutory framework distinct from the earlier penalty regime under section 271(1)(c). The Assessing Officer had specifically invoked section 270A(9)(a) dealing with misrepresentation or suppression of facts, and the assessee had responded to the allegation concerning the bogus donation claim. In those circumstances, the assessee was fully aware of the precise charge, and the notice could not be characterised as vague or mechanical. The decision relied upon by the assessee on an unspecified notice was distinguished because, in the present case, the statutory limb had been clearly stated. [Paras 4]

The challenge to the validity of the penalty notice was rejected.

Penalty for misreporting of income - Withdrawal of claim after detection - Misrepresentation of facts - deduction on account of a bogus political donation, later withdrawn only after departmental detection - HELD THAT: - The Tribunal found that the deduction claim was founded on a non-genuine transaction revealed through investigation into the political party. It further noted that the assessee had initially defended the claim even during the proceedings under section 148A and withdrew it only after the Department had already obtained material exposing the falsity of the transaction. Such withdrawal in the return filed under section 148 was therefore not voluntary, but a post-detection attempt to lessen the consequences.

The act of claiming a deduction for an accommodation entry is a classic case of misrepresentation of facts. The subsequent "voluntary" offer in response to a Section 148 notice—issued only after the Department had obtained incontrovertible evidence from a third-party search—is merely an attempt to mitigate the consequences of detection. It does not wash away the initial misreporting.

Claiming deduction on an accommodation entry was held to be a clear case of misrepresentation of facts, and the later offer of income did not efface the initial misreporting. The authorities below were therefore justified in treating the case as under-reporting in consequence of misreporting and in sustaining penalty at the prescribed enhanced rate. [Paras 4]

The penalty under section 270A for misreporting was upheld and the assessee's appeal was dismissed.

Final Conclusion: The Tribunal upheld the penalty under section 270A on the footing that the assessee had made a non-genuine deduction claim and withdrew it only after detection by the Department. The objection to the penalty notice as vague was also rejected, and the appeal was dismissed.

Reassessment initiated under sections 147 and 148 after the search -Search assessment jurisdiction - Scope of assessment under section 153A - Third-party search material - Real income theory - bogus long-term capital gain on sale of shares

Reassessment proceedings after the search - Validity ofSearch assessment jurisdiction - Special provision prevailing over general provision - Abatement of reassessment - assessment framework of section 153A - HELD THAT: - The Tribunal found that the impugned reassessment for AY 2011-12 was founded on information stated to have surfaced during the search conducted on the assessee. Once that factual position stood admitted, the search assessment code under section 153A became operative and the Assessing Officer could not resort to the general reassessment provisions of section 147. Following the earlier coordinate bench decision in the assessee's own case on the same assessment year and the same search, the Tribunal held that the assumption of jurisdiction under section 147 was invalid in law. [Paras 10, 38]

The reassessment order for AY 2011-12 was held void ab initio and quashed.

Incriminating material - Third-party search material - Section 153A and section 153C - HELD THAT: - The Tribunal held that the statutory scope of section 153A in relation to completed or unabated assessments is confined to incriminating material found during the search on the assessee. Material seized in a third-party search does not become material found in the assessee's search merely because it is later confronted to him. Acceptance of such a course would efface the legislative distinction between sections 153A and 153C. Since the assessment orders themselves showed that the additions for alleged bogus long-term capital gain, commission, and alleged cash loans were founded on materials and statements sourced from independent searches, the proper statutory route, if at all, was section 153C and not section 153A. Respectfully following the consistent coordinate bench decisions arising from the same search matrix, the Tribunal deleted the additions.

Additions made by the Assessing Officer do not emanate from any incriminating material discovered during the search conducted in the premises of the assessee. Rather, the assessment orders themselves reveal that the foundation of the additions rests primarily upon materials and statements obtained during searches conducted in the premises of other persons and subsequently confronted to the assessee during the recording of his statement under section 132(4). Such confrontation, however, does not alter the intrinsic character or the origin of the material. A document seized in the search of a third party does not become a document discovered in the search of the assessee merely because it is shown to him for explanation. [Paras 29, 31, 32, 33, 37, 38]

The additions made under section 153A for AY 2012-13 and AYs 2014-15 to 2018-19 were held unsustainable and deleted.

Additions made u/s 69 on account of alleged cash loans - taxation of hypothetical or imaginary income - Notional interest - Derivative addition - Real income theory - HELD THAT: - The Tribunal held that the interest addition was purely derivative, since it presupposed the existence of the principal cash-loan transactions. Once the substantive additions under section 69 were found unsustainable, the consequential structure built upon them necessarily failed. Apart from that, the Act taxes real income and not hypothetical income. In the absence of evidence showing any agreement for interest, or actual accrual or receipt thereof, the Assessing Officer's exercise of estimating interest by extrapolation was legally untenable. [Paras 24, 25, 26, 27]

The additions towards notional interest were held devoid of legal and factual basis and were deleted.

Final Conclusion: The appeals were allowed. The reassessment for AY 2011-12 was quashed for lack of jurisdiction, and the additions for AY 2012-13 and AYs 2014-15 to 2018-19 were deleted as they were founded on third-party search material and not on incriminating material found in the assessee's own search.

Penalty u/s 271D - Penalty for acceptance of cash loan - Proof of contravention u/s 269SS - establishment of cash loan transaction - reliance on seized loose paper

HELD THAT: - The Tribunal held that the foundation for penalty was the allegation that the assessee had accepted a cash loan in the relevant year. That foundational fact had remained inconclusive. The assessment made on the basis of the seized loose paper and the statement of the alleged lender had already been quashed by the Tribunal on a legal ground, with the result that there was no final determination that the assessee had in fact availed the alleged loan.

The assessee had denied the transaction from the outset, and the material on record did not establish the loan transaction beyond reasonable doubt.

Tribunal also noted that even according to the statement recorded u/s 132(4), the transaction was stated to have taken place through a broker, whose identity was not established and with whom no enquiry was conducted. In these circumstances, when the loan transaction itself remained doubtful, the alleged contravention of section 269SS was not proved, and penalty could not be levied. [Paras 8, 9]

The penalty imposed u/s 271D was held to be unsustainable and was directed to be deleted.

Final Conclusion: The appeal was allowed. The Tribunal held that, since the alleged acceptance of cash loan itself was not conclusively established, the penalty under section 271D could not survive.

Penalty levied as late fee u/s. 234E - passing an order u/s. 200A of the Act dated 03.11.2015 - belated filing of quarterly returns relating to the period prior 01.06.2015 - HELD THAT:- The Tribunal held that the controversy stood covered by the decisions of the jurisdictional High Court and the co-ordinate bench. It accepted the principle that, though section 234E provided for levy of fee for delayed filing, the authority to compute and levy such fee while processing TDS statements u/s 200A arose only after the enabling provision was introduced with effect from 01.06.2015.

Since the late fee in the present case related to quarterly TDS returns pertaining to F.Y.2014-15, i.e. a period prior to 01.06.2015, the levy made in the intimation under section 200A was held to be without authority and invalid. See M/S. GOPURAM ENTERPRISES PRIVATE LIMITED [2024 (7) TMI 33 - ITAT CHENNAI] following the earlier decisions of M/S. TRUE BLUE VOICE INDIA PRIVATE LIMITED, [2023 (10) TMI 1141 - MADRAS HIGH COURT][Paras 9]

The late fee charged under section 234E in the intimation issued under section 200A was directed to be deleted.

Final Conclusion: The Tribunal allowed the appeal and held that fee under section 234E could not be levied through processing under section 200A for quarterly TDS returns pertaining to F.Y.2014-15. The impugned levy was therefore deleted.

Bogus purchases - Reliance on survey statement recorded u/s 133A - no submission of the VAT return - AO concluded that there was no physical delivery of the goods and it was remained unproved and further the assessee was unable to provide any corroborative evidence which can substantiate that the purchases were not bogus and purchase and physical delivery of goods was made

HED THAT:- Assessee had recorded the entire transactions in his books of accounts and payments were made through banking channels. Undoubtedly, when the purchase are made the stock gets entry in the books of accounts, stock gets increase and the assessee has recorded the purchase in books of accounts and accordingly the stock got increased.

AO has never doubted on the books maintained by the assessee and he has accepted the financial statement prepared by the assessee on the basis of books of accounts.

In this case, the AO has made addition u/s 68 of the Act if the addition made u/s 68 of the Act. It is presumed that the transactions had been happened there should not be any doubt that there was no transaction is carried out and payments have also been made by the assessee which has not been denied by the AO.

As relying on GANESH STEEL AND ALLOYS LIMITED [2025 (7) TMI 1510 - CALCUTTA HIGH COURT] wherein held it is the provision of Section 69C will not be attracted as the assessee has duly disclosed the total purchases in their books of accounts and the payments made to M/s. Chakradhari Industries were also from and out of the books of accounts with explained sources and, therefore, the source of expenditure was also found. That apart, the source of expenditure was also fully explained and, therefore, the addition made by the Assessing Officer under section 69C of the Act cannot be sustained.

Final conclusion: - Tribunal held that assessee had recorded ethe entire transactions in his books of accounts and payments were made through banking channels. AO presumed that the transactions had been happened there should not be any doubt that there was no transaction is carried out and payments have also been made by the assessee which has not been denied by the AO.

Condonation of delay - HELD THAT:- Delay was condoned, and the civil appeal was dismissed after the Court observed that the Tribunal [2025 (9) TMI 880 - CESTAT BANGALORE] had not committed any error in law or fact.

Condonation of delay - HELD THAT:- Delay was condoned and the civil appeals were dismissed, the Court observing that the Tribunal [2025 (10) TMI 1139 - CESTAT BANGALORE] [2025 (10) TMI 1139 - CESTAT BANGALORE] had not committed any error in law or fact.

Imposition of penalty u/s 112(a)(i) for import of tea consignment containing viable seeds - violation of the Plant Quarantine (Regulation of Import into India) Order, 2003 - Bona fide import without misdeclaration - fit for human consumption - Absence of mens rea.

Penalty under Section 112(a)(i) - HELD THAT: - The Tribunal found that the appellant had imported the tea for processing and re-export under a bona fide belief that the goods were importable, supported by the health and phytosanitary certificates issued by the exporting country. The presence of viable seeds was noticed only upon testing by the Plant Quarantine authorities, and there was no finding of misdeclaration in quantity or description of the goods. In these circumstances, the Tribunal held that the appellant could not be faulted for the violation so detected after testing, and in the absence of any intent or mens rea for wilful importation of such goods, penalty under Section 112(a)(i) could not be sustained. [Paras 7]

The penalty imposed under Section 112(a)(i) was set aside.

Final Conclusion: The Tribunal held that, in the absence of misdeclaration and any wilful intent on the part of the importer, penalty under Section 112(a)(i) was not exigible where the offending seeds were detected only on testing by the Plant Quarantine authorities. The appeal was accordingly allowed and the penalty was deleted.

Imposition of Penalty for breach of EPCG licence conditions when duty and interest had been paid - Redemption fine.

EPCG licence violation - Penalty on voluntary payment of duty and interest - HELD THAT: - The Tribunal accepted the appellant's reliance on Sun Knitwear Pvt. Ltd Vs. Commissioner of Customs, Bangalore, [2006 (9) TMI 374 - CESTAT, BANGALORE], and held that in a case where the importer had voluntarily paid the duty and interest arising from the EPCG licence violation, imposition of penalty was not warranted. [Paras 4]

The penalty imposed was set aside.

Redemption fine - Basis for quantification - Redemption fine could not be sustained at the imposed level when the basis for its quantification was not indicated. - HELD THAT: - The Tribunal found that the redemption fine had been imposed without disclosing the basis for its quantification. On that ground, it held that the fine required reduction. [Paras 4]

The redemption fine was reduced.

Final Conclusion: The Tribunal partly allowed the appeal. It set aside the penalty imposed for EPCG licence violation and reduced the redemption fine on the ground that no basis for its quantification had been indicated.

Imposition of penalty under Section 112(a) and Section 114AA - Burden of proof - Admissibility of electronic evidence.

Penalty under the Customs Act - HELD THAT: - The Tribunal followed its earlier final orders rendered in the appellant's own case and in identical matters [2025 (11) TMI 135 - CESTAT CHENNAI], and accepted that the principal allegation of procuring fake certificates of origin had not been investigated or established through the Malaysian authorities. It further accepted that the electronic documents relied upon against the appellant were not admissible in evidence. Since the revenue had not discharged the burden of proving the alleged collusion or evasion scheme, the basis for penalty failed and no further question of penal liability survived. [Paras 6, 7]

The penalties imposed in the impugned order were set aside and the appeal was allowed.

Final Conclusion: Following its earlier orders on the same and identical facts, the Tribunal held that the allegations had not been proved and that the electronic material relied upon was inadmissible. The penalty imposed on the appellant was therefore set aside.

Rejection of refund claim - barred by limitation - limitation prescribed under Section 27(1B)(b) - scope and purview of Section 26 - Consequential refund on appellate order - non-availability of the chemical test report and the final invoice.

Refund limitation - HELD THAT: - The Tribunal held that the appellant's case did not fall within the scope of return of exported goods or re-importation of exported goods so as to attract Section 26. It further observed that even if Section 26 were assumed to apply, that provision itself contains a time requirement for making the refund claim, which had not been complied with. For refund becoming due as a consequence of an appellate order, Section 27(1B)(b) mandates computation of the one-year period from the date of that order. Since the Commissioner (Appeals) had allowed the appellant's appeal with consequential relief, the refund application had to be filed within one year from that order, and the application made much later was therefore time-barred. The pendency of the Revenue's appeal before the Tribunal did not alter the statutory starting point for limitation adopted by the provision. [Paras 5]

The rejection of the refund application as barred by limitation was upheld.

Final Conclusion: The Tribunal held that the appellant's refund claim was barred by limitation under Section 27(1B)(b) and that Section 26 had no application to the case. The appeal was accordingly dismissed.

Imposition of Penalty on the customs broker representative under Section 112(b)(ii) - involvement in improper importation and duty evasion - Presumption versus proof - Knowledge and involvement in improper importation.

Penalty under section 112(b) - Presumption versus proof - Knowledge and involvement in improper importation - HELD THAT:- The Tribunal held that the Commissioner's conclusion against the appellant rested essentially on the circumstance that he had charged a higher amount in earlier clearances than the amount charged by another customs broker for the disputed consignment. That circumstance, by itself, was only a presumption and could not establish knowledge of, or participation in, the subsequent illegal diversion of the imported vehicle into the local market. The order itself recorded that the documents received from the Embassy were genuine, and the appellant's role was confined to forwarding the email/documents to the customs broker who handled the clearance. In the absence of any material showing conscious involvement in evasion of customs duty or in improper importation of goods liable to confiscation, penalty under section 112(b)(ii) could not be sustained. [Paras 4]

The penalty imposed on the appellant under section 112(b)(ii) was held to be without authority of law and was set aside.

Final Conclusion: The Tribunal allowed the appeal and set aside the penalty imposed on the appellant. It held that the finding of involvement in duty evasion was based on mere presumption and not on proof of conscious participation in improper importation.

Rejection of application filled u/s 7, seeking initiation of CIRP against the Corporate Debtor, which has been rejected by the impugned order - definition of financial debt as contained in Section 5 sub-section 8 - Disbursement against consideration for time value of money - Commercial effect of borrowing.

Financial debt - Time value of money - Commercial effect of borrowing - Section 7 maintainability - HELD THAT: - The Appellate Tribunal held that the statutory requirement of disbursement against consideration for the time value of money was not established. The Board resolution itself showed that the loan was taken by the appellant in her own name by mortgaging her flat. No transaction between the appellant and the corporate debtor was shown on record by which any amount stood disbursed by the appellant to the corporate debtor as a debt having the commercial effect of borrowing. The decision in Shailesh Sangani v. Joel Cardoso and Anr [2019 (3) TMI 1192 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] was found inapplicable because that principle concerns funds advanced by a promoter, director or shareholder to the corporate debtor as stakeholder support, whereas in the present case the appellant had herself borrowed from the bank and repaid that mortgage loan. The decision in Amrit Lal Goverdhan Lalan vs State Bank of Travancore & Ors [1968 (4) TMI 91 - SUPREME COURT] was also held to have no application since this was not a case of a guarantor or surety seeking recourse against a principal borrower. In the absence of the essential attributes of a financial debt under Section 5(8), rejection of the Section 7 application was justified. [Paras 5, 6, 7, 8]

The claim was held not to be a financial debt of the corporate debtor, and the rejection of the Section 7 application was upheld.

Final Conclusion: The Appellate Tribunal upheld dismissal of the Section 7 application, holding that the appellant had not established any financial debt owed by the corporate debtor. It clarified that such dismissal would not preclude the appellant from pursuing any other remedy available in law.

Condonation of delay - delay beyond the statutorily condonable period in filing the appeals - Statutory outer limit of limitation - Exclusion of time for certified copy.

Condonation of delay - Outer limit for filing appeal - Judicial custody - Certified copy exclusion - HELD THAT: - The Appellate Tribunal held that the period for filing an appeal commences from delivery of the order, and the appellant's judicial custody does not suspend or extend the statutory limitation period. Judicial custody may at best explain delay, but cannot justify condonation once the delay exceeds the Tribunal's limited statutory power to condone. It further held that exclusion of time taken for preparation of certified copy was not available in the second appeal because the certified copy was applied for beyond 30 days from the impugned order. Since the delay in one appeal was 74 days and in the other, on correct computation, 21 days, both exceeded the maximum condonable period of 15 days. [Paras 9, 10, 11]

Both delay condonation applications were rejected as the delay in each appeal was beyond the statutorily condonable period, and the appeals were consequently rejected.

Final Conclusion: The Appellate Tribunal held that it had no jurisdiction to condone delay beyond the limited statutory period. The appellant's judicial custody did not extend limitation, and both appeals were rejected as time-barred.

Maintainability of restoration after withdrawal on settlement - Default under settlement vis-a-vis operational debt default - Scope of liberty reserved to approach competent forum - non- fulfilment of the conditions of withdrawal of Section 9 Application.

Withdrawal on compromise - Restoration jurisdiction - Settlement default - Competent forum - HELD THAT: - Since, the settlement takes the shape of a final order, it will be executable as per the provisions contained Order 22 Rule 11 of C.P.C. and further law of restoration will not apply, because, the lis has been given a quietus owing to the termination of cause of action by withdrawal of the Company Petition which, was sought for by the Appellant himself by filing of an Application before the Tribunal on the basis of the settlement of 11.01.2021.

The Appellate Tribunal held that the original insolvency proceeding had attained finality when it was dismissed as withdrawn on the basis of the settlement, and no liberty had been reserved in that order to seek restoration of the company petition. The provisions relating to restoration of proceedings dismissed for default could not be equated with withdrawal on compromise, since a consensual withdrawal brings the lis itself to an end. The liberty preserved under the settlement and in the withdrawal order was only to adopt appropriate proceedings before the competent forum or any other remedy in law, and not to revive the concluded Section 9 proceeding. The Tribunal further held that breach of the settlement terms did not amount to a fresh default of operational debt so as to justify restoration of the insolvency petition; at best, it gave rise to a right to pursue recovery or enforcement of the balance amount in accordance with law. The expression referring to a competent authority or appropriate forum was therefore not construed as permitting a restoration application before the Adjudicating Authority under the Code. [Paras 37, 38, 39, 40, 41]

The restoration application was not maintainable, and the rejection of the appeal against its dismissal was upheld.

Final Conclusion: The Appellate Tribunal held that after withdrawal of the Section 9 petition on settlement, no restoration lay in the absence of an express reservation of such liberty. Default in payment under the settlement had to be pursued through appropriate recovery or other legal proceedings, and not by reviving the concluded insolvency proceeding.

Condonation of 15 days of delay - Maintainability of appeal against appointment of Resolution Professional- statutory scheme under Sections 95 to 100 - Facilitative nature of pre-admission insolvency process - Prematurity of challenge by personal guarantor - Entitlement for enlargement of right to appeal or convert the preliminary process into a final adjudication.

Maintainability of appeal against appointment of Resolution Professional - HELD THAT: - The Appellate Tribunal held that the impugned order was confined to the stage where the Resolution Professional had only been appointed and directed to submit a report. Relying on Dilip B Jiwrajka Vs Union of India & Ors.[2024 (1) TMI 33 - SUPREME COURT], it held that no judicial adjudication of rights takes place during the process up to submission of the report, since the Resolution Professional performs only a facilitative and recommendatory role. As no determination on merits or of the parties' rights arises until the adjudicating authority acts on the application, a challenge at this intermediate stage is premature. The plea founded on alleged earlier proceedings under Section 95 was also left to be urged at the appropriate later stage after submission of the report, and the existence of interim moratorium was held not to create any independent right to maintain the present appeals. [Paras 6, 7, 8, 9, 10]

The appeals were dismissed as premature and not maintainable against the order passed at the stage of appointment of the Resolution Professional and calling for a report.

Final Conclusion: The delay in filing the appeals was condoned, but the appeals themselves were dismissed. The Appellate Tribunal held that no appeal lay at the stage where the Resolution Professional had merely been appointed and the report under the statutory process was yet to be considered.

Validity of the bankruptcy application and consequent bankruptcy order, when the order under Section 114(1) of the Insolvency and Bankruptcy Code, 2016 had attained finality and was not challenged -Default in repayment of its financial obligations flowing from a channel of Finance Agreement - separate show-cause notice and hearing - pre-conditions for filing of a proceedings of Bankruptcy under Section 121 - consequences contemplated under Section 115(2) - Finality of unchallenged adjudicatory order - Waiver of fresh hearing objection - Audi Alteram Partem - Principles of Natural Justice.

Consequential bankruptcy on failure of repayment plan - Finality of adjudication under Chapter III - HELD THAT: - If the prescribed format of NCLT 5 is taken into consideration, it’s a format of issuance of notice in the regular proceedings, which are being carried before the Ld. Tribunal in its normal day-to-day course of business and not for the purposes like that of the proceedings of Bankruptcy, which already stands initiated only after exhaustion of all the processes when the Personal Guarantor has failed to submit the repayment plan and where the Tribunal had previously applied its mind while resorting to the procedure for consideration to initiate Bankruptcy proceedings, and had no other option except to, pass an order on 28.08.2025. Hence, specific Show Cause Notice as contemplated under Form NCLT 5 as provided under Rule 37 of the NCLT Rules, 2016, was not mandatory, even it would be an abuse as it would be rejunation of proceedings for the Appellant which they have otherwise accepted by acceptance of the order dated 28.08.2025, which is not the intention of law at any stage after the stage of Section 115(2) to be read with Section 121(1)(b) of the Code.The Appellate Tribunal held that the statutory process under Chapter III had already been exhausted, including consideration of the repayment-plan stage. Since no viable repayment plan had been submitted by the personal guarantors, the Adjudicating Authority was left to proceed in terms of the consequences flowing from the order passed under Section 114(1), which in turn enabled recourse to bankruptcy under Section 115(2) and Section 121. The earlier order under Section 114(1) was treated as an adjudicatory order with authoritative effect, and once it had attained finality without challenge, the subsequent bankruptcy proceedings were only its logical and legal corollary. [Paras 43, 45, 46, 47, 48]

The bankruptcy order was upheld as a consequential step flowing from the unchallenged order under Section 114(1) and the statutory consequence under Section 115(2).

Waiver of fresh hearing objection - Natural justice at bankruptcy application stage - Rule 37 of the NCLT Rules - HELD THAT: - The Appellate Tribunal rejected the contention founded on Rule 37 of the NCLT Rules, Section 420(1) of the Companies Act and Article 14. It held that, after the proceedings had progressed from Section 95 up to the order under Section 114(1), and that order had remained unchallenged, the bankruptcy application was only a consequential continuation of the already completed statutory process. Section 123 did not contemplate an additional hearing requirement up to the stage of the bankruptcy order, and Rule 37 governing regular notice in ordinary proceedings was held inapplicable to reopen or rejuvenate a process already accepted by the appellants through their failure to challenge the earlier order. The appellants were therefore bound by waiver and by the consequences of their own conduct. [Paras 42, 43, 44, 45, 46]

The objection based on absence of fresh notice or hearing at the Section 121 stage was rejected.

Final Conclusion: The Appellate Tribunal held that the bankruptcy proceedings against the personal guarantors were a lawful consequence of the earlier unchallenged order under Section 114(1) and that no fresh notice or hearing was required at the Section 121 stage in the circumstances. All the company appeals were accordingly dismissed.

Rejection of the section 9 insolvency application - pre-existing dispute, without adequate reasons or analysis of the pleadings - Non-application of mind - Failure to record reasons - The primary contention of the Appellant is that the finding regarding pre-existing dispute was not founded upon consideration of the Appellant’s pleadings and written submissions before the Ld. Adjudicating Authority. It was argued that the impugned order is perverse, having been passed without due consideration of the material placed on record, which justified initiation of Section 9 proceedings based on apparent default by the Corporate Debtor.

Pre-existing dispute - HELD THAT: - The Appellate Tribunal held that, despite material having been placed by the operational creditor to demonstrate absence of a pre-existing dispute at the stage of initiation of proceedings, the applications were rejected without proper analysis or reasoning. It held that judicial propriety requires rejection of such proceedings to be supported by logical reasoning and due application of mind. Since the impugned order merely recorded the existence of a dispute without disclosing the basis for that conclusion, the finding on pre-existing dispute was vitiated by non-application of mind and could not be sustained. [Paras 17, 18, 19]

The impugned order was quashed and the company petitions were remitted to the Adjudicating Authority for fresh decision on merits on the existing pleadings, uninfluenced by the appellate observations.

Final Conclusion: The Appellate Tribunal set aside the common order rejecting the Section 9 applications, holding that the conclusion on pre-existing dispute was unsupported by reasons and suffered from non-application of mind. The matters were remitted for fresh adjudication on merits on the pleadings already on record.

Validity of the impugned orders directing release of charge over the entire 8.87 acres and directing implementation of the resolution plan, passed without giving hearing to the affected party, without recording reasons - Invoking the Tribunal's jurisdiction under the Insolvency and Bankruptcy Code, 2016 and the NCLT Rules, 2016 in relation to approval and implementation of the resolution plan - Judicial propriety - Binding effect of appellate interim orders - Principles of natural justice - Non-application of mind - Audi Alteram Partem.

Binding effect of appellate interim orders - HELD THAT: - The Appellate Tribunal held that the application before the Adjudicating Authority itself disclosed the existence of the earlier interim order and, therefore, the Adjudicating Authority was expected to take its effect into account before issuing directions affecting the entire land. By directing release of charge over the whole extent, the order operated in derogation of the subsisting status quo order and effectively nullified it. The Tribunal further found that the impugned order had been passed at the first hearing, without calling for objections from affected parties, without fair hearing, and without recording reasons or showing any application of mind to the pleadings referring to the appellate order. Such an order was held to be contrary to judicial propriety and vitiated by breach of natural justice. [Paras 14, 15, 16]

The impugned order was quashed, and the Adjudicating Authority was left to pass fresh orders, if required, after taking into account the effect of the interim order already passed by the Appellate Tribunal.

Implementation of resolution plan - HELD THAT: - The Appellate Tribunal found that the application seeking directions regarding implementation of the plan had specifically referred to the interim order passed in the pending appeal. Even so, the Adjudicating Authority proceeded cursorily to direct payment under the plan without considering the prayer in the application in the light of that interim order. The order did not indicate that the respondent had been heard, nor did it reflect consideration of the full facts on record. It was therefore held to suffer from procedural infirmity, breach of audi alteram partem, and non-application of mind, besides overriding the effect of the interim order of the Appellate Tribunal. [Paras 19, 20]

The impugned order was quashed to the extent it directed implementation of the approved resolution plan without accounting for the earlier interim order, and the appeal was allowed.

Final Conclusion: The Appellate Tribunal allowed all three appeals. The orders challenged were quashed because they had been passed in disregard of the subsisting interim order of the Appellate Tribunal and in violation of basic requirements of fair hearing and reasoned adjudication.

Condonation of Delay - HELD THAT:- Delay was condoned and the Special Leave Petition was dismissed, the Court finding no error in the view taken by the High Court and noting that a Special Leave Petition arising from the Rajasthan High Court decision relied upon in the impugned order [2023 (3) TMI 1276 - DELHI HIGH COURT] had already been dismissed by this Court.

Valuation of Taxable Services - Reimbursable expenses in taxable value of clearing and forwarding service - transportation charges incurred for delivery of goods to third parties using the agent's own transport.

Reimbursable expenses - Gross value of clearing and forwarding service - Actual transportation reimbursement - HELD THAT: - The Tribunal held that the test for reimbursement is whether the liability to pay the third party was legally or contractually that of the service recipient and the service provider merely paid it on the recipient's behalf. Applying the Larger Bench ruling in Sri Bhagvathy Traders [2011 (8) TMI 430 - CESTAT, BANGALORE-LB], expenses incurred by the appellant for performing its own contractual obligations as clearing and forwarding agent, such as operational and input-related expenses, formed part of the gross value of taxable service and could not be treated as reimbursements. However, the agreement specifically provided that where the appellant used its own transport for delivery of goods to third parties, such transportation would be at the company's cost on submission of the transport bill. That component alone bore the character of actual reimbursement. The Tribunal further held that, in view of Intercontinental Consultants & Technocrats Pvt Ltd [2012 (12) TMI 150 - DELHI HIGH COURT] such reimbursable amount could not be added to the gross value for the period prior to the 2015 amendment to section 67. Since no substantive material had been shown to establish that the transportation charges were reimbursed strictly on actual basis, verification by the adjudicating authority was necessary. [Paras 9, 10]

The impugned order was set aside and the matter was remanded for verification of the transportation reimbursement claim and recomputation of demand; all other expenses relating to discharge of the appellant's own obligations remained includible in the taxable value.

Final Conclusion: The Tribunal held that, except for transportation charges shown to have been reimbursed on actual basis under the agreement, the amounts recovered by the appellant were part of the taxable value of clearing and forwarding service. The matter was remanded to verify the transportation claim and to recompute the demand accordingly.

Extended period of limitation - Departmental knowledge of material facts - Successive show cause notices on the same issue - suppression of facts - demand for the period from October, 2015 to June, 2017.

Extended period of limitation - Suppression of facts - Successive show cause notices - HELD THAT:- The Tribunal found that, for the earlier period, the Department had already initiated proceedings by issuing a show cause notice invoking the extended period, and the appellant had responded to that notice. In these circumstances, the material facts concerning the appellant's activities stood disclosed and were within the knowledge of the Department before issuance of the present show cause notice. Applying the principle laid down in Nizam Sugar Factory Versus Collector of Central Excise, AP [2006 (4) TMI 127 - SUPREME COURT], the Tribunal held that once a demand on the same issue had already been raised and the facts were known to the authorities, a subsequent notice for a later period could not again invoke suppression of facts so as to attract the extended period. [Paras 10, 11]

The entire demand, with interest and penalties, was held barred by limitation and was set aside.

Final Conclusion: The Tribunal allowed the appeal on the sole ground of limitation. It held that the extended period was wrongly invoked in the second round when the Department was already aware of the relevant facts from the earlier proceedings, and therefore the impugned demand with interest and penalties could not survive.

Demand of Service Tax on the basis of a mismatch between Income Tax Returns or Form 26AS and ST-3 Returns without independent verification of the nature of receipts.​​​​​​​ - Extended period of limitation - absence of evidence of suppression or wilful misstatement - Corroborative Evidence - Cash Basis - Accrual Basis.

Service tax demand based on Income Tax return/Form 26AS mismatch - HELD THAT:- In the case of M/s. Nanu Shome & Co. v Commissioner of C.G.S.T & C.Ex., Siliguri [2026 (1) TMI 1015 - CESTAT KOLKATA], wherein it has been categorically held that the difference between the Income Tax Returns and ST-3 Returns cannot be the sole basis for raising the demand; there must be an independent verification conducted to ascertain the nature of service rendered during the concerned period.

The Tribunal found that, in the business of tour operation, advances are commonly received in earlier periods and service tax is payable when such advances are received. The appellant's case was that the amounts carried forward in the books for 2015-16 were advances received in the previous year and already subjected to service tax, and the reconciliation statement placed on record showed no tax discrepancy. The authorities below nevertheless treated the carried forward advances as receipts of the relevant year without recording any finding on the appellant's explanation and without any independent verification of the nature of services rendered or of the consideration actually received during that year. The Tribunal held that mere difference between Income Tax data and ST-3 returns, without corroborative enquiry, cannot by itself form the basis of service tax demand. [Paras 7, 8, 9, 10]

The demand on merits was held to be legally unsustainable and liable to be set aside.

Extended period of limitation - Suppression or wilful misstatement - HELD THAT: - The Tribunal noted that the demand was founded on the appellant's own ITR/Form 26AS and ST-3 returns available with the department. No material was brought on record to show suppression or wilful misstatement with intent to evade service tax. In the absence of substantive evidence establishing the conditions required for invoking the proviso to Section 73(1), the allegation of suppression was found to be assumed rather than proved. [Paras 11, 12]

The demand was also barred by limitation and was liable to be set aside on that ground.

Final Conclusion: The Tribunal set aside the impugned service tax demand with interest and penalty. It held that the demand, raised solely on the basis of mismatch between Income Tax data and ST-3 returns without independent verification, was unsustainable on merits and, in any event, could not be sustained by invoking the extended period of limitation.

Validity of the Service Tax demand, penalties and late fee based solely on Form 26AS and income tax return data without corroborative evidence - Goods Transport Agency and consignment note - Transportation of goods undertaken using own vehicles - ​​​​Exemption under Negative List exemption.

Demand based solely on Form 26AS and Income Tax Returns - HELD THAT: - n In the case of M/s. Nanu Shome& Co. v Commissioner of C.G.S.T &C.Ex., Siliguri [2026 (1) TMI 1015 - CESTAT KOLKATA], wherein it has been categorically held that the difference between the Income Tax Returns and ST-3 Returns cannot be the sole basis for raising the demand.

The Tribunal found that the show cause notice and consequent demand were founded on third-party information from Income Tax Returns/Form 26AS alone. It held that, in the absence of tangible and corroborative material establishing the taxable nature of the service allegedly rendered, the difference between such income-tax data and ST-3 returns could not by itself sustain the demand. Since the Revenue had not adduced documentary evidence to substantiate the allegation of taxable service, the confirmed demand could not be upheld. [Paras 7]

The demand failed for want of corroborative evidence beyond Form 26AS and Income Tax Return data.

Goods Transport Agency and consignment note - HELD THAT: - The Tribunal held that transportation of goods by road attracts service tax only when rendered by a Goods Transport Agency. On the record, the appellant was an individual owning vehicles and undertaking transportation through those vehicles, and there was no evidence that he issued consignment notes so as to answer the description of a GTA. The absence of a consignment note was treated as decisive, and the service was held to fall within Entry No. (p) of the Negative List under Section 66D. Applying the ratio of Commissioner of Cus., C.Ex. & Service Tax, Raigad v. JWC Logistics Pvt. Ltd. [2018 (5) TMI 1131 - CESTAT MUMBAI], the Tribunal concluded that the transportation service in question was exempt and no service tax liability arose. [Paras 8, 9]

The transportation service was exempt; consequently, the tax demand, interest, penalties and late fee were set aside.

Final Conclusion: The Tribunal held that the impugned demand was unsustainable both because it was founded only on Form 26AS/Income Tax data without corroborative evidence and because the appellant's activity of transporting goods through his own vehicles was not taxable as GTA service in the absence of consignment notes. The impugned order was therefore set aside and the appeal was allowed with consequential relief.

Services received for loading and unloading of materials - Classification of service as manpower recruitment Or supply agency service - Penalty in absence of wilful suppression - Reverse Charge Mechanism - Quantum of Job Performed.

Manpower recruitment or supply agency service - Job-based billing - Reverse charge mechanism - HELD THAT:- The Tribunal held that liability under the category of manpower recruitment or supply agency service arises where manpower is supplied to another person, and the billing must correspond to supply of manpower. On examination of the bills produced, it found that the service providers had raised bills for the work executed, namely loading and unloading of materials, and not for the number of labourers or workmen supplied. Since the consideration was linked to the job performed and not to manpower supplied, the service received by the appellant did not fall within the statutory definition relied upon by the Department. [Paras 10, 11]

The demand under the category of manpower recruitment or supply agency service was set aside, and the associated interest and penalty were also set aside.

Goods transport agency service - Penalty under Section 78 - Absence of suppression - HELD THAT: - The Tribunal noted that the appellant was registered with the Department, had been filing ST-3 returns regularly, and the demand itself had been computed from those returns. It further found no corroborative material showing deliberate suppression of facts with intent to evade tax. In those circumstances, while the tax and interest liability on goods transport agency service remained payable, the foundation for penal action was absent. [Paras 12]

The demand under goods transport agency service was upheld with applicable interest, but the penalty imposed in respect of that demand was set aside.

Final Conclusion: The appeal was partly allowed. The demand under manpower recruitment or supply agency service, with interest and penalty, was set aside, while the demand under goods transport agency service was sustained with interest but without penalty.

Sub-contractor exemption in works contract service - Construction services to Government under exemption notification - Entitlement to exemption under Notification No. 25/2012-S.T. - demand barred by limitation - Extended period of limitation - Evidentiary value of Form 26AS data - absence of independent corroborative evidence of suppression or wilful misstatement.

Sub-contractor exemption in works contract service - HELD THAT: - The Tribunal found from the work order that the appellant rendered construction services to the main contractor in relation to dwelling units for JCOs and ORs under the Ministry of Defence. Since the main contractor had received the contract from the Ministry of Defence, the principal service was covered by the exemption available to construction services provided to Government under Notification No. 25/2012-S.T. The Tribunal further held that, once such exemption was available to the main contractor, the appellant as a sub-contractor providing works contract service for the same exempt work was also entitled to exemption under Sl. No. 29(h) of the notification. On that basis, the service tax demand was held to be unsustainable. [Paras 8, 9]

The appellant was entitled to exemption under Notification No. 25/2012-S.T., and the service tax demand on the impugned activity was liable to be set aside.

Extended period of limitation - HELD THAT: - The Tribunal held that the demand for the period 2014-15 was issued only on the basis of data received from the Income Tax authorities and Form 26AS, without any independent enquiry to ascertain the actual nature of the service rendered. It observed that such data, in the absence of corroborative evidence, did not by itself justify invocation of the extended period. As no material had been brought on record to establish suppression or wilful mis-statement with intent to evade service tax, the allegation supporting extended limitation was held to rest on assumptions and presumptions. The demand was therefore also barred by limitation. [Paras 10]

The invocation of the extended period was invalid, and the demand was liable to be set aside as barred by limitation.

Interest and penalty consequential to unsustainable demand - HELD THAT: - The Tribunal held that, since the principal demand did not survive, there was no basis for recovery of interest or for imposition of penalty. [Paras 11]

The demands of interest and penalty were also set aside.

Final Conclusion: The Tribunal held that the appellant's subcontracted construction service for the Ministry of Defence was exempt under Notification No. 25/2012-S.T. and that, in any event, the demand was barred by limitation. The impugned order was set aside and the appeal was allowed with consequential relief.

Extended period of limitation - Suppression of facts - Show Cause Notice issued more than 02 years after the search - barred by limitation -Failure to decide limitation - Non-consideration of binding remand directions - absence of specific findings despite the earlier direction to examine limitation.

Limitation - HELD THAT: - The Tribunal found that the High Court had specifically required the adjudicating authority to consider the plea of limitation under Section 73 and to give reasons if the notice was within time. Despite that direction, the original authority dealt only with the validity of proceedings after repeal and did not return a specific finding on limitation, and the appellate authority also failed to address that issue. Since the core challenge to the demand was not examined in the manner directed by the High Court, the orders could not be upheld and the matter required reconsideration on that issue alone. [Paras 4, 5]

The matter was remanded to the original authority for fresh decision confined to the issue of limitation in the light of the High Court's observations.

Final Conclusion: The appeal was allowed by way of remand. The Tribunal set aside the impugned orders to the extent they failed to decide limitation and directed the original authority to pass a fresh order on that issue.

Classification of goods - stevedoring and cargo movement services - liability to tax as Port Service - Export cargo handling exemption - seeking clarification on the nature of service and service taxability on the same - second show cause notice was barred by limitation -Extended period of limitation after prior departmental knowledge.

Port service - Cargo handling service - Export cargo exemption - HELD THAT: - The Tribunal found that the appellant was not rendering any service on behalf of the port, but was providing the service directly to its clients. Mere authorisation by the port to operate within the port area did not convert the activity into port service. The activity remained one of handling export cargo and therefore fell within cargo handling service. Since cargo handling in relation to export cargo stood specifically exempted during the material period, the tax demand, interest and penalties founded on its treatment as port service were held to be unsustainable. [Paras 5]

The impugned demand on the footing of port service was set aside, the activity being cargo handling of export cargo exempt from service tax.

Extended limitation - Prior departmental knowledge - HELD THAT: - The Tribunal recorded that departmental audit had been conducted earlier, audit memos had been issued, and the appellant had already disclosed the nature of its activities and their taxability in reply. The department had thereafter issued the first show cause notice on the same issue. In these circumstances, issuance of a subsequent notice for the later period again invoking the extended period was held to be legally impermissible, the department being already aware of the relevant facts. [Paras 5]

The demand raised and confirmed in the second notice for 2006-07 to 2009-10 was held barred by limitation.

Final Conclusion: The Tribunal allowed the appeal and set aside the service tax demand with interest and penalties. It held that the appellant's activity was cargo handling of export cargo, not port service, and that the later notice was also barred by limitation.

Cenvat credit reversal -availed CENVAT Credit on common Input Services used against manufacture and clearance of exempted goods as well as for provision of taxable service without following the provisions of Rule 6 of erstwhile CENVAT Credit Rules, 2004 - non-payment of an amount payable under the provision of Rule 6(3)(i) of the erstwhile CENVAT Credit Rules, 2004 - Non-taxable portion not amounting to exempted goods or exempted service.taxable services, viz. "restaurant service" and "business auxiliary service", as defined under Section 65B(44) and Section 66E(i) of the erstwhile Chapter-V of the Finance Act, 1994.

Applicability of Rule 6 of the CENVAT Credit Rules, 2004 - Non-taxable portion not amounting to exempted goods or exempted service - HELD THAT:- The Tribunal held that the departmental view treating the remaining 60% of the total amount charged in restaurant service as sale of food attracting nil rate and therefore as exempted goods was flawed. Where the statute itself fixes the value of the service portion at 40% under Rule 2C, the balance portion cannot be treated as exempted goods or as an exempted part of service so as to attract Rule 6(3). The Tribunal also relied on the Board Circular clarifying that a restaurant service provider paying tax under Rule 2C is not required to make any further reversal of credit under Rule 6(3), and followed Gateway Hotels Vs Commissioner of Customs, C. Ex & S.T., Cochin [2019 (10) TMI 1149 - CESTAT BANGALORE] taking the same view. [Paras 6]

The demand raised under Rule 6(3)(i)/6(3)(b)(i) of the CENVAT Credit Rules, 2004, with interest and penalty, was held legally unsustainable.

Final Conclusion: The Tribunal allowed the appeal and set aside the impugned order. It held that no liability under Rule 6(3) arose in respect of restaurant service valued under Rule 2C, and consequently the demand, interest and penalty could not be sustained.

Works contract service classification - Reverse Charge Mechanism - Consulting Engineering Service demand- composite turnkey contracts for design, engineering, supply of plant and equipment, erection, testing and commissioning - inclusion of material value in the taxable base - demand of Service Tax alongwith interest and equivalent amount of penalty.

Works contract service - Composite contract - Consulting Engineering ServiceHELD THAT: - The Tribunal found that the contracts in question were composite in nature, covering not merely design and engineering but also supply of plant and equipment, refractories, erection, testing and commissioning, and were executed along with material. On that admitted factual position, the services received by the appellant were appropriately classifiable as works contract service. Since the demand had been raised under Consulting Engineering Service, such demand could not be sustained. The Tribunal applied the law declared by the Supreme Court in Commissioner of C.Ex. & Customs, Kerela versus Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] and held that no service tax demand was maintainable under the category adopted in the notice and order. [Paras 7, 8]

The entire demand, interest and penalty founded on classification under Consulting Engineering Service were set aside.

Final Conclusion: The Tribunal held that the impugned contracts were composite works contracts involving both goods and services and, therefore, could not be taxed under Consulting Engineering Service. On that basis, the entire demand was set aside and the appeal was allowed with consequential relief.

Taxability of construction of complex service prior to 01.07.2010 - applicability of Circular No. 108/02/2009-ST dated 29.01.2009 - Exemption under Board Circulars.

Whether the services under dispute classified as "construction of complex service" as per Section 65(30a) read with section 65 (105) (zzzh) of the Finance Act, 1994 are exempt from service tax during the relevant period. - HELD THAT: - The Tribunal held that liability under the category of construction of complex could not be sustained for the period up to 01.07.2010. In reaching that conclusion, it relied on Circular Nos. 108/02/2009-ST and 151/2/2012-ST, and also on the amendment to section 65(105)(zzzh) by insertion of the Explanation with effect from 01.07.2010. Since both disputed periods were admittedly prior to 01.07.2010, the service tax demands confirmed under that category, together with the consequential interest and penalties, were unsustainable. [Paras 12, 13]

The demands, interest and penalties under 'construction of complex' service for both periods were set aside.

Final Conclusion: The Tribunal held that the appellant's construction of complex activity for both disputed periods, being prior to 01.07.2010, was not liable to service tax under that category. The impugned orders confirming tax, interest and penalties were therefore set aside and the appeals were allowed with consequential relief.

Levy of central excise duty - Manufacture - Removal of extraneous material - segregation of Off-grade High Carbon Ferro Chrome from Ferro-Chrome Slag through manual washing - Character Or Use - Commercial Commodity.

Whether the activity of segregation of Off-grade High Carbon Ferro Chrome (HCFC) from Ferro-Chrome Slag through manual washing amounts to ‘manufacture’ for the purpose of levy of central excise duty, or not.​​​​​​​ - HELD THAT: - The Tribunal held that the process undertaken by the appellant merely separates denser HCFC particles from slag by washing, thereby removing unwanted or extraneous material. Such activity does not bring into existence a new product having a distinct name, character or use. Applying the ratio of Commissioner of C.Ex., Jamshedpur & Bhubaneswar-II v. Steel Authority of India Ltd.[2002 (12) TMI 142 - CEGAT, KOLKATA] on similar processes involving removal of foreign matter from ore or manual segregation, the Tribunal found that the goods do not undergo transformation into a different commercial commodity and, therefore, no excise duty is leviable. [Paras 8, 9]

The duty demand was set aside, and consequently the interest and penalty were also set aside.

Final Conclusion: The Tribunal held that manual washing of Ferro-Chrome Slag to segregate Off-grade High Carbon Ferro Chrome is only a process of removal of unwanted material and does not result in manufacture. The impugned order was set aside and the appeal was allowed with consequential relief.

Duty Liability - Excise duty demand on alleged diversion of goods - Inconsistent departmental case - availment and utilization of irregular CENVAT Credit by showing procurement of their raw materials​​​​​​​ -Burden of Proof.

Excise duty demand on alleged diversion of goods - Duty already paid on clearances - Inconsistent departmental case - HELD THAT: - The Tribunal found that the Revenue's sole case was that, though invoices were issued to the dealer, the goods were not sent to that dealer. It was, however, undisputed that the respondent had paid duty on the goods in question. The Tribunal held that the departmental stand was internally inconsistent: if no goods had moved at all, duty was not payable in the first instance; if the goods had been diverted to some other destination, even then duty stood admittedly paid on such clearances. In the absence of a coherent basis to demand duty again on the same goods, the appeal lacked merit. [Paras 9, 10, 11, 12]

The Revenue's appeal was dismissed and the dropping of the duty demand, with consequential interest and penalty, was upheld.

Final Conclusion: The Tribunal held that no further duty demand could be sustained on the allegation of non-supply to the named dealer or diversion of the goods, since duty on the goods had admittedly already been paid and the Revenue's case was mutually inconsistent. The appeal was therefore dismissed.

Entitlement to interest on the refunded pre-deposit under Section 35FF of the Central Excise Act, 1944 - Benefit of exemption notification applicable to 'Ores.' -HELD THAT:- The Tribunal held that once the pre-deposit made by the appellant became refundable, interest was payable in terms of Section 35FF of the Central Excise Act, 1944 read with the applicable notification prescribing the rate of 6% per annum. The determinative principle applied was that the appellant's right to interest runs from the date of making the pre-deposit till its realisation. On that basis, the denial of interest by the lower authorities was found unsustainable. [Paras 12, 13]

Interest was directed to be sanctioned at 6% per annum from the date of deposit till realisation.

Final Conclusion: The Tribunal set aside the denial of interest and held that the appellant was entitled to interest on the refunded pre-deposit at 6% per annum from the date of deposit till realisation.

Eligibility for exemption under Notification No. 62/95-C.E. - goods manufactured in Mints belonging to Government of India - Corporatisation of wholly owned Government company - expression "substituted" -Clarificatory substitution of exemption entry - Claim forrefund of central excise duty, interest and penalty.

Eligibility for exemption after corporatisation - Mints belonging to Government of India - Distinguishing precedent - HELD THAT:- It is on record that on corporatization of the Appellant company, all the assets and liabilities, existing contracts, agreements and MOUs entered into by the nine units of the Department of Economic Affairs were transferred to SPMCIL w.e.f. 10.02.2006. We find that the Department took the view that after 10.02.2006, SPMCIL ceased to be a part of the Government of India as it had been incorporated under the Companies Act.

The Tribunal held that, notwithstanding incorporation of SPMCIL under the Companies Act, the Mint still remained an institution belonging to the Government of India. In reaching that conclusion, it relied on the Memorandum of Association, the continued performance of the same sovereign functions relating to production of circulation coins and related instruments, the fact that 100% shareholding remained with the Government of India through the President of India, and the continued administrative and financial control of the Government. The decision cited by the Revenue in Collector of Central Excise, Guntur v. Hindustan Shipyard Ltd. [1984 (1) TMI 304 - CEGAT NEW DELHI], Visakhapatnam was distinguished on facts, since the present case involved a wholly owned Government company carrying out core sovereign functions under Government authority and supervision. The later substitution made by Notification No. 3/2010-C.E. was treated as clarificatory and as reinforcing the continued applicability of the exemption to the appellant during the disputed period. [Paras 11, 12, 13, 14, 15]

The confirmed demand of duty, interest and penalty was held unsustainable and set aside, and the appellant was held entitled to refund of the duty, interest and penalty paid pursuant to the impugned order.

Final Conclusion: The appeal was allowed. The Tribunal held that the appellant-Mint continued to belong to the Government of India for purposes of the exemption notwithstanding corporatisation, and consequently set aside the duty, interest and penalty while holding the appellant entitled to refund of the amounts paid.

Entitlement to CENVAT credit on input services used for setting up a plant and factory - Main clause of input service definition after 01.04.2011 - definition of input service under Rule 2(l) - demand of interest, and penalty.

Whether the appellant is entitled to avail Cenvat Credit on input services used to setting up a plant and factory after 01.04.2011 or not. - HELD THAT:- The Tribunal held that the controversy stood concluded by its earlier decisions, particularly Brahmani River Pellets Limited [2023 (10) TMI 287 - CESTAT KOLKATA], which had followed Aditya Aluminium [2023 (9) TMI 55 - CESTAT KOLKATA] and Jindal Steel and Power Ltd.[2023 (7) TMI 712 - CESTAT KOLKATA]. The determinative reasoning accepted by the Tribunal was that, even after the omission of the words relating to setting up of a factory from the inclusive part of the definition, services used for setting up a plant or factory continued to fall within the main part of the definition of input service, being services used directly or indirectly in or in relation to manufacture. Since such services were not specifically excluded, denial of credit merely on the ground of the post-01.04.2011 amendment was unsustainable. [Paras 6, 7]

The demand, interest and penalty founded on denial of such credit could not survive, and the appellant's entitlement to the credit was upheld.

Final Conclusion: The Tribunal held that Cenvat credit remained admissible on input services used for setting up a plant and factory even after 01.04.2011. Accordingly, the impugned order was set aside and the appeal was allowed with consequential relief.

Classification of goods - manufacture various Health/ nutritional supplements namely Protein Powder, Weight loss powder, Energy drink “Vinergy”, etc. - classifiable as food mixes under CTH 21069099 of the Central Excise Tariff Act, 1985 - benefit of Notification No. 01/2011-CE - Clandestine Clearance -Concessional rate subject to non-availment of Cenvat credit - Extended period for non-registration and non-filing of returns - demand duty for the larger period and imposition of mandatory penalty.

Classification of food mixes - HELD THAT:- The Tribunal examined the composition of the products, the tariff structure under Heading 2106, and the rival classifications. It found that the products were not covered by the specifically enumerated sub-categories under the heading and therefore fell under the residual entry 21069099. On the basis of their ingredients and use, they were treated as food mixes falling within miscellaneous edible preparations. The Tribunal further held that once so classified, the goods were covered by the relevant entry in Notification No. 49/2008-CE (NT) for RSP-based assessment, with 35% abatement from the retail sale price for determination of assessable value. [Paras 6]

The classification under CTH 21069099 and assessment on retail sale price basis with 35% abatement were upheld.

Concessional rate subject to non-availment of Cenvat credit - Food mixes including instant food mixes - Strict compliance with exemption conditions - HELD THAT:- The appellants were purchasing raw materials mainly Glucose, Sugar, Maltose, Dextrose, Whey, Milk Protein, Soya Isolate, Cocoa Powder, pine apple flavour, orange flavour, Mango flavour, American Ice-Cream flavour, Variyali Javour, Lemon, Vanilla, Strawberry, Elaichi, OX (Anti-Oxidant Preservative), Vitmin mix (Drum), Calcium Carbonate, Chocolate Flavour, Feric Fumerate, Blend (Mix Vitamin), Citric Acid, Zinc Sulphate, Potassium Chloride, Mallic Acid, Leucin, Vitamin-C, L-isolucin, PV PK-30 AND Sodium Benzoate. Further, as per their Director Shri Bipinbhai Laljibhai Kaswala, each product was manufactured on the basis of specific composition, details of which were placed in individual BMR sheet. That they were manufacturing products like “Vinergy” and “Alpabhara” under the brand name of M/s Vintech Healthcare Pvt Ltd. As they did not have facility to manufacture tablets, there were got manufactured from the job workers. On the basis of ingredients, Revenue held that the products manufactured by the appellant are classifiable as Miscellaneous edible Preparations under residual entry 21069099 attracting Central Excise duty @ 12.5%.

Learned Counsel on behalf of the appellant has relied on various decisions dealing with classification of similar products. In the case of Sankalp Food Products Vs. Commissioner of Central Excise, Mumbai [2003 (4) TMI 302 - CEGAT, MUMBAI] Tribunal has held classification of such products under Miscellaneous Edible Preparations. It held that description under Srl. No. 7 is very wide and includes preparations in the nature of instant food mixes and also extends coverage to food mixes for consumption after processing such as cooking, boiling or dissolving in water or milk, etc. In Abbott Healthcare Pvt Ltd case, Mumbai [2015 (2) TMI 512 - CESTAT MUMBAI] Tribunal observed that the product like “Pediasure" and "Ensure" are food mixes consisting of starch, sugar, oil, etc. with minor quantity of minerals and vitamins for consumption of children and elderly people respectively who need essential nutrition diet. These are classifiable under the category of food mixes. Again, in the case of Raptakos Brett & Co. Ltd. [2014 (12) TMI 33 - CESTAT MUMBAI], Tribunal held that the products are consumed as such by people who are recuperating from illness and therefore, it is ready to eat package product. Similar findings were given by Delhi Tribunal in the case of Dry Tech Processors (I) Pvt Ltd [2015 (4) TMI 418 - CESTAT NEW DELHI] wherein the product “Fresubin” made from, or mixture of the basic food ingredients namely, corn starch, sucrose, milk protein and vegetable oil were treated as instant food mixes.

The Tribunal found the adjudicating authority's view erroneous that the appellant's goods, though classifiable under 21069099, were not covered as 'all kinds of food mixes'. Relying on the treatment of similar products in the decisions concerning nutritional preparations containing only minor quantities of vitamins and minerals, it held that the appellant's goods were primarily food mixes for human consumption, either directly or after processing. At the same time, the Tribunal accepted the principle that exemption conditions must be strictly complied with and held that the benefit of the notification could be granted only if the condition of non-availment of Cenvat credit on inputs or input services was satisfied. Since verification of that condition was necessary, the matter was remanded for that limited purpose and for re-quantification of duty, interest, and consequential penalty. [Paras 6]

Eligibility to the concessional rate was accepted subject to verification of non-availment of Cenvat credit, and the matter was remanded for that verification and fresh quantification.

Extended period for non-registration and non-filing of returns - Suppression with intent to evade duty - Penalty under Section 11AC - HELD THAT:- The Tribunal held that the appellant had neither obtained central excise registration nor filed excise returns, and the department came to know of the manufacturing activity only upon search based on intelligence. Payment of VAT and filing of returns before the commercial tax authorities were held irrelevant to compliance under the central excise law. Applying the principle stated in Dharmpal Satyapal [2005 (4) TMI 66 - SUPREME COURT], the Tribunal treated such total non-compliance as evidence of suppression and intent to evade duty. On that basis, invocation of the extended period was upheld and the penalty on the company under Section 11AC was also sustained, though its quantum was left to be re-determined in the remand proceedings. The quantum of penalty on the directors was also left for fresh determination. [Paras 6]

Invocation of the extended period and liability to penalty were upheld, with only the quantum of penalty left for fresh determination in remand.

Final Conclusion: The Tribunal held that the appellant's products were classifiable under CTH 21069099 and assessable on retail sale price basis with the applicable abatement. It accepted eligibility in principle to the concessional notification subject to verification of non-availment of Cenvat credit, upheld invocation of the extended period and penalty liability, and remanded the matter for fresh quantification and re-determination of penalty quantum.

Excisability of captively consumed intermediate goods - intermediate product “Lacquered Metallic Polyester Film” under Notification No. 67/95-CE dated 16.03.1995 - Marketability - Extended period of limitation - Penalty for non-registration and non-payment of duty - Cenvat credit on inputs - Suppression of Facts - Wilful Misstatement - Deeming Fiction - duty demand and seizure - mandatory penalty under Section 11AC.

Excisability of captively consumed intermediate goods - Marketability - Captive consumption exemption -HELD THAT:- The Tribunal held that, after the amendment to Chapter Note 16 of Chapter 39, the process of lacquering amounts to manufacture in relation to goods falling under headings 3920 and 3921. Since the final products were exempt from duty, the captive consumption exemption under Notification No. 67/95 was unavailable. On marketability, the Tribunal rejected the plea that the intermediate product was not marketable, relying on evidence of actual sale of lacquered metalized polyester film and on the Chartered Engineer's own opinion that, after removal of unlacquered and defective portions, the product becomes marketable. The intermediate product therefore answered the description of excisable goods and was dutiable at the intermediate stage. [Paras 4]

The duty demands against the manufacturers were upheld on merits, and the Commissioner's order dropping the duty demand against Telstar Industries was held to be erroneous.

Extended period of limitation - Suppression of facts - HELD THAT: - The Tribunal found that, despite the statutory amendment bringing the product into the excise net, the manufacturers neither obtained registration nor filed returns, nor paid duty on the intermediate goods. The plea of ignorance or bona fide belief was rejected. These omissions were treated as suppression and wilful non-compliance with intent to evade duty, particularly when the liability arose from a clear legislative amendment and the assessees did not approach the department for clarification. [Paras 4]

The invocation of the extended period was upheld for the assessees, and the same finding was applied in the Revenue appeals against Telstar Industries.

Penalty for non-registration and non-payment of duty - Rule 26 penalty - HELD THAT:- The Tribunal held that the matter did not involve any real interpretational ambiguity, as the amended Chapter Note clearly treated lacquering as manufacture. The assessees had failed to obtain registration, assess duty, issue proper invoices, maintain statutory records, and file prescribed returns. Those contraventions attracted penalty under Rule 25 and mandatory penalty under Section 11AC. In the Revenue appeals, the Tribunal further held that, on the role attributed in the notice and statements, the present and former directors of Telstar Industries were also liable to penalty under Rule 26. [Paras 4]

The penalties imposed on the firms and their officers in the assessees' appeals were upheld, and liability to penalty on Telstar Industries and its directors was affirmed.

Confiscation and seizure - Remand for fresh adjudication - HELD THAT: - The Tribunal held that the adjudicating authority had vacated seizure only because it had concluded that duty was not payable. Once that conclusion was reversed and the goods were held excisable, the seizure of stock found at the respondent's premises and at the other premises was held to be justified. However, in view of the lapse of time and uncertainty regarding the present condition or release status of the seized goods, the confiscation notice was remanded for fresh decision. [Paras 4]

The matter relating to the seizure and confiscation notice was remanded to the Commissioner for fresh adjudication.

Cenvat credit on inputs - The alternate claim for Cenvat credit on inputs used in the dutiable intermediate product required examination by the adjudicating authority. - HELD THAT: - The Tribunal noted that the assessees had not availed Cenvat credit earlier because their final products were exempt. Since the intermediate product was now held dutiable, the claim for credit on duty-paid inputs required factual verification on the basis of duty-paying documents and invoices. [Paras 4]

The assessees were permitted to place supporting documents before the adjudicating authority, who was directed to examine and allow admissible Cenvat credit.

Final Conclusion: The assessee's appeals were dismissed, as the captively consumed lacquered metalized polyester film was held excisable, the extended period was sustained, and the penalties were upheld. The Revenue's appeals in the Telstar Industries matter were allowed on the duty and penalty issues, while the confiscation proceedings and the claim for Cenvat credit were left for fresh consideration by the adjudicating authority.