TMI Tax Updates e-Newsletter
Apr 13,2026

Dismissal of the writ petition on the ground of availability of an alternative remedy - Prejudicial observations on delay - delay not been satisfactorily explained - Statutory Remedy - Interim Protection.

Alternative statutory remedy - Prejudicial observations on delay - HELD THAT: - The Court held that once the writ petition was being declined on the ground of availability of an alternative statutory remedy, there was no occasion for the High Court to make an observation on the sufficiency of the explanation for delay, since that question fell for consideration by the competent appellate forum and such observation could substantially affect the petitioner's right. On that basis, while not interfering with the dismissal of the writ petition on the ground of alternative remedy, the Court clarified that if the petitioner availed the statutory remedy within the time granted, the same should not be rejected solely because of the High Court's observation on delay. [Paras 2, 3]

The petitioner was granted liberty to pursue the statutory remedy, with a direction that the adverse observation on delay should not by itself defeat that remedy if availed within the period granted.

Final Conclusion: The special leave petition was disposed of without disturbing the High Court's refusal to entertain the writ petition in view of the statutory remedy, but with a clarification protecting the petitioner against prejudice from the High Court's observation on delay. A short interim stay on recovery was also granted to enable recourse to the appellate forum.

Cancellation of GST registration - ineligible credit - Suspension pending fresh adjudication - Non-consideration of reply to show cause notice - Principles of natural justice. - HELD THAT: - The Court noted that the petitioner had placed in the typed set a copy of the reply dated 09.03.2026, stated to have been sent by post on 16.03.2026, prior to the order cancelling registration. In that view, the determinative defect found wasnon-consideration of the reply before cancellation. Since further proceedings were also stated to be under contemplation by the department, the Court directed that the impugned cancellation be treated as suspension of registration pending denovo adjudication, with consideration of the petitioner's reply on merits and with opportunity of hearing, while leaving it open to the department to proceed in accordance with law for tax recovery or penalty. [Paras 8, 9, 10]

The impugned cancellation was not sustained as such; it was directed to operate as suspension pending fresh adjudication after considering the petitioner's reply and granting hearing.

Final Conclusion: The writ petition was disposed of by directing that the order cancelling registration be treated as one of suspension and by requiring fresh consideration of the petitioner's reply on merits after affording hearing. The department was left free to continue investigation and take action in accordance with law.

Validity of an Order-in-Original passed under Section 129 (3) - failure to consider the petitioner's objections and for denial of an opportunity of hearing - Non-consideration of objections - Principles of Natural Justice - Audi Alteram Partem - ​​​​​HELD THAT: - The Court found that the petitioner had filed objections before the impugned order was passed, but those objections were not considered at all. The order proceeded only on the basis that the owner of the goods had come forward and paid the tax and penalty, without recording any finding on the reasons for levy of penalty or dealing with the objections already submitted. The Court held that before passing an adverse order, the authority was required to hear the affected party and consider its objections. Since these requirements of natural justice were not observed, the impugned order was vitiated and the matter had to be reconsidered after granting adequate hearing and by passing a fresh reasoned order. [Paras 8, 9]

The impugned order was quashed and the matter was remanded for fresh consideration after affording adequate opportunity of hearing and passing a reasoned order in accordance with law.

Final Conclusion: The petition was partly allowed on the ground of breach of natural justice. The impugned order was set aside and the matter was remanded to the authority for fresh adjudication after considering the petitioner's objections and granting adequate hearing.

Adjudication in breach of interim order - effect of the subsequently passed adjudication order on the show cause notice - Opportunity of Hearing - Withdrawal of Order.

Adjudication in breach of interim order - HELD THAT: - The Court recorded the statement made on behalf of the State that the order on the show cause notice had been passed immediately after the ad-interim order and that the concerned officer was not aware of the interim order. In view of the fair statement that the adjudication order could be withdrawn, the Court permitted its withdrawal and treated it as withdrawn. The consequence was that the adjudication already made could not survive, and the show cause notice was required to be adjudicated afresh in accordance with law after granting the petitioner an opportunity of hearing. [Paras 3, 5]

The adjudication order was quashed and set aside as withdrawn, and the show cause notice was remitted for fresh adjudication within the time fixed by the Court after granting an opportunity of hearing.

Having regard to the orders passed in Lajwab Fabrics vs. Union of India & Ors, the Court considered it appropriate not to examine the validity challenge in the present petition. The Court therefore expressly kept that issue open, along with all other contentions of the parties, while directing fresh adjudication of the show cause notice. [Paras 4, 6]

No adjudication was made on the constitutional validity challenge, which was expressly kept open.

Final Conclusion: The petition was disposed of by setting aside the adjudication order as withdrawn and directing fresh adjudication of the show cause notice after hearing the petitioner. The challenge to the validity of section 16(2)(c) of the CGST Act and MGST Act, as well as all other contentions, was expressly kept open.

Limitation for statutory appeal- Rejection of the petitioner's appeal as barred by limitation - Mandatory electronic upload of summary of order - Safeguarding appellate rights under GST.

Limitation for statutory appeal - Mandatory electronic upload of summary of order - Appellate rights - HELD THAT:- The Court followed its earlier view and the principle stated by the Supreme Court in ASP Traders Vs. State of Uttar Pradesh [2025 (7) TMI 1525 - SUPREME COURT] that compliance with the requirement of electronically uploading the summary of the order is mandatory, since it is intended to preserve and facilitate the taxpayer's statutory right of appeal. In the present case, although the adjudication order had been treated by the appellate authority as having been transmitted earlier through email, the summary of the order was issued to the petitioner only later. In these circumstances, the appellate authority was not justified in rejecting the appeal on limitation, and the matter required reconsideration on merits without reference to limitation. [Paras 11]

The impugned appellate order was quashed and the matter was remitted to the appellate authority for fresh disposal on merits, without further reference to limitation.

Final Conclusion: The High Court set aside the appellate order rejecting the appeal on limitation and remitted the matter to the appellate authority for decision on merits in accordance with law, without treating the appeal as time-barred.

Withdrawal of pending Appeals below the monetary limits prescribed - HELD THAT:- Petition had been filed against a wrong order [2025 (2) TMI 453 - BOMBAY HIGH COURT] with liberty to the Revenue to appeal against the appropriate order.

The application for condonation of delay and the special leave petition are, accordingly, dismissed on that short ground, leaving it open to the Revenue to file an appeal against the appropriate order.

Maintainability of appeal on low tax effect - Prospective operation of CBDT circular exceptions - HELD THAT:- Delay condoned. Issue notice and tag with Premier Industrial Corporation Ltd [2025 (12) TMI 1814 - SC ORDER]

Validity of Reassessment proceedings - Tangible material - Live link with escapement of income - Third-party material relied upon - reassessment was founded on an undated complaint and material recovered from unrelated persons and entities

HELD THAT: - The Court held that the Revenue's case rested entirely on an undated complaint allegedly written by a third party and recovered from a PDF file found in the mobile phone of an employee of another entity during post-survey proceedings. The complaint had not been investigated further, and even its author had not been summoned by the AO.

The Court also found that the petitioner was not connected with the surveyed concern, the other entity, the employee, or the author of the complaint. The statements recorded after reopening and the image of the cash receipt also did not reveal any cash transaction by or receipt of cash by the petitioner.

On these findings, the Court concluded that the reopening was based on conjectures and surmises and lacked any direct nexus between the material relied upon and the petitioner. [Paras 8, 9]

Final Conclusion: The Court allowed the writ petition and set aside the reassessment notices and the order, holding that the reopening was unsupported by any material having a direct link with the petitioner and was based merely on conjectural third-party material.

Validity of Revised return - change of Depreciation method - Substitution of original return - Directory procedural requirement- AO rejected the revised return by holding that the same was not valid as there was no omission or wrong statement found in the original return - HELD THAT: - The Court held that the revised return was not confined to a mere change in the mode of depreciation, but was founded on three claims, including reduction of unconfirmed power sale receipts and an omitted expenditure claim, which had been concurrently accepted by the appellate authorities as arising from bona fide omissions. Section 139(5) permits revision on discovery of an omission or wrong statement, provided the revision is not deliberate or mala fide. On the facts found, there was no oblique motive in filing the revised return. Once validly filed and accepted, the revised return supplants the original return and there cannot be two parallel returns governing different parts of the same assessment. [Paras 6]

The Tribunal was right in treating the revised return as valid, and that return replaced the original return for the purposes of the assessment.

Acceptability of change in SLM to WDV method in Revised return - Depreciation method - revised return filed under Section 139(5) of the Act supersedes the original return under Section 139(1) - whether it is permissible for the assessee to adopt a new methodology other than the one which was adopted in the original return or not? - HELD THAT: - The Court held that, if the original return under section 139(1) of the Act gets substituted by the revised return under section 139(5) of the Act, the relevant method of computation filed in the original return seeking depreciation becomes redundant, and cannot be used for any purpose.

If the case of the revenue is accepted, then the return of income of the assessee would fall under two provisions, i.e under section 139(1) of the Act and revised return under Section 139(5) of the Act. As far as the claim of depreciation is concerned, it is contended before us that the same has to be considered under the provision of Section 139(1) of the Act. Thus, as suggested by the revenue, the part of the return would be under Section 139(1) of the Act so far as claim of depreciation is concerned, whereas for other two claims the same would fall under revised return under Section 139(5) of the Act. This can never be the intention of the statute as, the Act does not permit the existence of two returns i.e. one under Section 139(1) of the Act and the other under Section 139(5) of the Act for varied claims.

Determination of Due date - The due date for option as per Section 139(1) was 31.10.2002. In our considered opinion, if the validity of the revised return filed on 31.03.2003 is upheld, then it replaces the original return under Section 139(1) of the Act, however, the “due date” of option as envisaged under Section 139(1) of the Act though cannot be extended further for the purpose of claiming the depreciation by WDV method on the filing of the revised return, however, the computation on WDV method in claiming the depreciation is always permissible, only in the circumstance, if the original option of filing the depreciation by adopting SLM is within the due date of the original return, since, the proviso to Rule 5(1A) permitting option for altering the computation to WDV method can be said to be directory in nature.

An option which is exercised by an assessee for a particular assessment year, cannot be altered subsequently in another assessment years, and travel to extended dates on filing of raised return. Hence, once the revised return falls within the assessment year of the original return, the due date cannot be extended to another assessment year as it is impermissible to opt for other option to that which was already exercised while filing the original return under Section 139(1) of the Act.

In this regard, we have noticed, and not denied by the revenue is that the Assessing Officer from AY 2009-2010 onwards has granted depreciation as per WDV method, and the assessment orders have become final, hence any change of computation for AY 2002-2003 to AY 2008-09 will lead to incongruous consequences.

Thus, revised return filed by the assessee is valid. Having held the same as valid return, the same gets replaced with that of the original return filed under Section 139(1) of the Act for all purposes of the Act. The claim of depreciation in the original return and the revised return is maintained by the assessee. The depreciation has been claimed by SLM before the due date and in these circumstances, the assessee cannot be restrained from availing the benefit of WDV methodology which is in its favour and the constructions of Rule 5(1A) of the Rules, which is a machinery provision and gives choice to a tax payer, has to be interpreted in a manner which is favourable to the assessee.

Final Conclusion: The High Court upheld the validity of the revised return for A.Y 2002-2003 and held that, assessee could change the depreciation computation from SLM to WDV in that revised return. Decided against revenue.

TDS u/s 194G - Commission on sale of lottery tickets - Tax deduction at source on discounted lottery sales - Principal-to-principal sale - Commission versus trade discount - difference between the face value of lottery tickets and the reduced price at which the assessee sold them to its dealers

HELD THAT: - The Court held that Section 194G applies only where the assessee is responsible for paying income by way of commission, remuneration or prize, and such income is either credited to the account of the payee or paid by cash, cheque, draft or any other mode. In the present case, the assessee purchased lottery tickets at a reduced price and sold them onward to its immediate dealers on an outright basis. No amount was paid or credited by the assessee to the dealers as commission.

The mere margin between the face value and the sale price represented a discounted sale and not commission. The transaction was therefore treated as one on a principal-to-principal basis, and the amount retained by the dealer could not be regarded as income paid by the assessee. In the absence of payment or credit of commission, Section 194G was held inapplicable. [Paras 12, 23, 24, 25, 26]

The assessee was not liable to deduct tax at source under Section 194G, and proceedings u/s 201(1) and 201(1A) were consequently unsustainable.

Final Conclusion: The appeal filed by the Revenue was dismissed. The Court affirmed that the discounted sale of lottery tickets to dealers did not involve payment or credit of commission, and therefore Section 194G was not attracted.

Reassessment based on third-party material - Live link with escapement of income - Reopening on conjectures and surmises- validity of the notice issued u/s 148A and 148 on the basis of an undated complaint and digital material recovered from persons and entities unconnected with the petitioner - HELD THAT: - The Court held that the entire reopening rested on an undated complaint allegedly written by a third party, which had never been further investigated. The complaint was found in a PDF file in the mobile phone of an employee of another entity, and it was undisputed that the petitioner had no connection with those entities or persons.

The author of the complaint was not summoned by the AO, and the subsequent statements of the petitioner and the purchaser did not disclose any cash transaction as alleged. The image of the cash receipt also did not indicate receipt of money by the petitioner or his brother. In these circumstances, the material relied upon lacked any direct nexus or live link with the petitioner, and the reopening was found to be founded on conjectures and surmises. [Paras 8, 9]

The impugned order u/s 148A(3) and the consequential notices were quashed.

Final Conclusion: The High Court allowed the writ petition and set aside the reassessment proceedings for Assessment Year 2019-20. It held that the reopening was unsupported by any directly incriminating material linking the petitioner with the alleged escaped income.

Reassessment on conjectures and surmises - Unverified third-party material - Absence of direct nexus with assessee - reopening was founded on an undated complaint

HELD THAT: - The Court held that the entire reopening rested on an undated complaint allegedly written by a third person and recovered as a PDF file from the mobile phone of an employee of another entity, while the petitioner was not shown to be connected with those entities or persons.

The author of the complaint was not summoned, the complaint was never further investigated, and even the statements subsequently recorded, as well as the image of the cash receipt relied upon, did not indicate any cash transaction by or with the petitioner.

The determinative principle applied was that reassessment cannot be sustained when it is founded on conjectures and surmises and on material having no direct nexus with the assessee. [Paras 8, 9, 10]

The reopening proceedings were held unsustainable, and the impugned notices and order were quashed.

Final Conclusion: The writ petition was allowed. The Court quashed the notices issued for reassessment and the order passed under section 148A(3), holding that the reopening was founded on unverified material and lacked any direct link with the petitioner.

Validity of Assessment Order u/s 143(3) r/w Section 144B - breach of natural justice on account of inadequate opportunity of hearing - gross violation of the principles of natural justice without providing an opportunity of video conferencing - rejection of assessee requesting a hearing after a stated date

HELD THAT: - The Court found it undisputed that, despite the assessee's request for adjournment and for video conferencing after a specified date, the authority issued intimation for video conference only a few hours before the scheduled time. Such truncated notice, coupled with non-consideration of the request for reasonable time to file a reply, did not constitute a fair opportunity of hearing. On these admitted facts, the conduct of the respondent was held to be not tenable and the assessment order was found to be vitiated by breach of natural justice. [Paras 8, 9]

Final Conclusion: The Court set aside the assessment for Assessment Year 2024-25 on the ground that the assessee was not given an effective opportunity of hearing, including a meaningful opportunity of video conferencing. The matter was remanded to the respondent authority for a fresh order after complying with the requirements of fair hearing.

Penalty u/s 271(1)(c) - concealment of income - evading payment of tax on the capital gains enured by selling her shares to a foreign Company

HELD THAT: - The Court held that the determinative test for penalty was whether the non-disclosure of taxable income was a bona fide omission or was intended to avoid tax.

Tribunal had rightly distinguished the ruling in Anurag Jain In Re [2005 (3) TMI 23 - AUTHORITY FOR ADVANCE RULINGS] since that case turned on the existence of an employment agreement and was therefore factually different from the assessee's case. The assessee's claim could not be treated as resting on a plausible or bona fide view, because the shares were of a non-listed company, the transaction was not shown to qualify for the exemption claimed, and the assessee not only omitted to disclose the amount as taxable income in the return but also claimed refund on that basis. The Court found that the income came to light only on scrutiny and, on these facts, the conduct of the assessee disclosed an intention to evade tax and amounted to furnishing inaccurate particulars. [Paras 12, 13, 14, 15]

Penalty was rightly sustained and the substantial questions of law were answered against the assessee.

Final Conclusion: The Court affirmed the concurrent orders sustaining penalty under Section 271(1)(c), holding that the assessee's exemption claim was not based on any bona fide legal foundation and that the return reflected furnishing of inaccurate particulars with intent to evade tax. The appeal was dismissed.

Deduction of interest on bank deposits u/s 80P(2)(a)(i) - Profits attributable to providing credit facilities to members - Interest on surplus bank deposits - Distinction between co-operative credit society and finance business

HELD THAT: - The Court found it undisputed that the appellant is a registered co-operative credit society engaged in providing credit facilities to its members and that the funds deposited in bank represented its own business funds.

Relying on the earlier Division Bench decision in Vavveru Co-operative Rural Bank Limited [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] and Andhra Pradesh State Co-operative Bank Limited [2011 (6) TMI 215 - ANDHRA PRADESH HIGH COURT] the Court held that a society falling within the class of co-operative societies providing credit facilities to members is covered by clause (a)(i), and not by clause (c). It further held that if the profit or gain is attributable to such activity, the deduction is available, and the interest earned on amounts kept in bank for safe custody did not cease to bear that business character.

The Court distinguished The Citizens Co-operative Society Limited [2017 (8) TMI 536 - SUPREME COURT] on the ground that that case concerned a society dealing with non-members and functioning as a finance business, with the principle of mutuality absent, whereas no such finding existed here. [Paras 22, 24, 26, 27, 28]

Final Conclusion: The appeal was allowed. The Court held that the appellant, being a co-operative credit society providing credit facilities to its members, was entitled to deduction under Section 80P(2)(a)(i) in respect of the interest earned on its bank deposits, set aside the contrary orders, and directed reconsideration accordingly.

Reference to Valuation Officer - seeking valuation of the properties without rejection of books of account - Scope of assessment or reassessment

Whether in the absence of rejection of books of accounts, the Assessing Officer was justified in referring the properties of the assessee to the DVO for ascertaining the valuation of the properties under Section 142A ? - HELD THAT: - A careful reading of Section 142A indicates that the power to refer a matter to the Valuation Officer can be exercised only for the purpose of making assessment or re-assessment and therefore, such reference must be made during the course of assessment proceedings when the AO finds it necessary, based on available material, to determine the correct value of an investment, which would categorically mean that the process of assessment is initiated and the word ‘making’ should be presumed to be associated with the assessment or reassessment for reference under Section 142A of the Act.

Hence, invoking powers under Section 142A is after initiation of assessment proceedings and reference to DVO under Section 142A can be made only when a requirement is felt by the Assessing Officer for making such reference, when there is some material with the Assessing Officer to show that whatever the estimate the assessee has shown is not at all correct and not reliable.

The provision under Section 142 does not empower the Assessing Officer to refer the matter to the DVO for gathering information for reopening of assessment. In the present case, the valuation report was not called for assessment or reassessment proceeding, but was done in the process of reopening of assessment. Thus, the action of the Assessing Officer in referring the matter to the DVO and relying upon the valuation report of current assets in one assessment year and disturbing the concluded assessments of other assessment years is untenable and perverse.

Also where the books of accounts are neither rejected nor found to be defective, the Assessing Officer cannot solely rely on the DVO’s report to make additions by invoking Section 142A of the Act to its benefit and the said principle has been clearly laid down in Sargam Cinema’s case [2009 (10) TMI 569 - SC ORDER] and Aar Pee Apartments P. Ltd.’s[2009 (8) TMI 256 - DELHI HIGH COURT] [Paras 24, 25, 26, 27, 29]

Final Conclusion: The appeal was dismissed and the Tribunal's order was affirmed. The Court held that, in the absence of rejection of the books of account and since the valuation exercise was undertaken in connection with reopening rather than in the course of making an assessment or reassessment, the reference to the DVO and the resulting addition could not be sustained.

Denial of benefit of Section 11 and 12 -Condonation of delay in filing Form 10B - Procedural irregularity and charitable exemption

HELD THAT: - The Court held that, consistent with the view taken in similar matters, the benefit u/s 11 and 12 cannot be denied to a trust or institution otherwise eligible for such relief merely on account of a procedural lapse in filing Form 10B within the prescribed time.

In the present case, the delay was found to be marginal and had occurred in the first year of the petitioner's registration. Though the condonation application was made long after the intimation u/s 143(1), the Court considered the circumstances sufficient to warrant condonation, subject to payment of costs, and directed issuance of a fresh intimation. [Paras 8, 9, 10]

The rejection of condonation was quashed, and the delay in filing Form 10B was directed to be condoned subject to compliance with the condition imposed by the Court.

Final Conclusion: The writ petition was disposed of by setting aside the order rejecting condonation of delay in filing Form 10B for Assessment Year 2020-2021. The Court directed consequential fresh intimation under section 143(1), subject to the petitioner complying with the condition regarding payment imposed by the Court.

TP Adjustment - Working capital adjustment - Giving-effect order - Authenticated evidentiary compliance

HELD THAT: - The Court found that, although the Tribunal had directed reconsideration of the claim for working capital adjustment, the petitioner had not complied with the subsequent requisition calling for working capital details for the relevant year and their impact on profit. The material earlier furnished consisted only of an excel-sheet calculation of the profit level indicator adjusted margin and did not satisfy the respondent's reasonable requirement for supporting particulars. The Court held that mere filing of calculations was insufficient; the claim had to be properly authenticated and substantiated with supporting documents duly certified by a Chartered Accountant. In that situation, since the impugned giving-effect order would affect the ultimate assessment, the matter required fresh consideration on merits after enabling the petitioner to upload the required details and after affording a hearing. [Paras 10, 11, 12, 13, 16]

The matter was remitted to the first respondent for a fresh order on merits, subject to the petitioner furnishing and uploading the required authenticated particulars, whereafter the respondent was to decide the issue after hearing the petitioner.

Final Conclusion: The writ petition was disposed of by remitting the issue of working capital adjustment to the first respondent for fresh consideration. The Court required the petitioner to furnish duly authenticated supporting particulars, and directed that a fresh order be passed after hearing the petitioner.

Bogus long-term capital gains - Penny stock transactions - Unexplained cash credit - Human probabilities test - unexplained income - HELD THAT: - The Tribunal held that the transaction could not be accepted as genuine merely because contract notes, demat entries, bank records and stock exchange sale documents were produced. It found that the scrip showed abnormal and unrealistic price movement wholly disproportionate to the financial position and business activity of the company, that the original purchase was through an off-market route in an unlisted company, and that the assessee was not shown to be a regular or informed investor.

Applying the test of human probabilities and considering the surrounding circumstances, the Tribunal concluded that the entire chain of events formed part of a pre-arranged accommodation entry mechanism for converting unaccounted income into exempt capital gains. The burden u/s 68 was therefore not discharged, and the sale proceeds were liable to be assessed as unexplained income rather than exempt capital gain. [Paras 9, 10, 11]

The addition under section 68 was upheld and the claim of exemption under section 10(38) was rejected.

Final Conclusion: The Tribunal upheld the finding that the assessee's claim of exempt long-term capital gain from the impugned penny stock transaction was not genuine and that the amount was assessable as unexplained income u/s 68. The assessee's appeal was accordingly dismissed.

Mismatch in turnover and purchases - Verification of reconciliation evidence - Failure to examine corrected VAT Audit Report - Reconciliation of statutory records - Additions made on the basis of mismatch between VAT returns and the books could

HELD THAT: - The Tribunal found that the additions were founded mainly on the discrepancy between the VAT returns and the figures disclosed in the books and return of income. It noted that the assessee had placed on record a corrected VAT Audit Report in Form 217, claimed to have rectified the earlier error and reconciled the figures with the audited financial statements, return of income and Form 26AS. Since this material evidence, going to the root of the controversy, had not been properly examined by either the AO or the appellate authority, the matter required fresh verification. The Tribunal held that an addition cannot be sustained merely on the basis of a mismatch without proper verification and reconciliation, particularly where the assessee attributes the discrepancy to a bona fide rectifiable error. [Paras 9, 10, 11, 12]

The impugned order was set aside and the matter was restored to the Assessing Officer for de novo adjudication after examining the corrected VAT Audit Report, verifying the reconciliation with the return of income, audited financial statements, tax audit report and Form 26AS, and granting adequate opportunity of hearing.

Final Conclusion: The Tribunal held that the dispute had not been properly examined because the corrected VAT Audit Report and reconciliation evidence were not considered. The matter was therefore remanded to the Assessing Officer for fresh adjudication in accordance with law.

Unexplained cash deposits - Burden of proof - assessee has explained that the deposits were made out of cash withdrawals from the same bank account, family savings including agricultural income, and gifts received at the time of marriage in the preceding year.

HELD THAT: - The Tribunal found from the bank statement and cash-flow material that part of the deposits stood explained by earlier withdrawals from the same bank account, and the availability of cash coupled with the proximity between withdrawal and redeposit rendered that explanation acceptable. It further accepted a limited explanation based on marriage gifts received in the immediately preceding year, having regard to prevailing social customs and the reasonable amount involved. However, the claim that the remaining deposits came from agricultural income and family savings was unsupported by cogent evidence such as proof of agricultural holdings, produce, sale bills, or material showing actual generation of such income. In the absence of supporting evidence, mere general assertions were held insufficient to discharge the burden resting on the assessee. [Paras 8, 9, 10, 11]

The addition was deleted to the extent explained by prior withdrawals and marriage gifts, and the balance addition was sustained.

Final Conclusion: The Tribunal partly allowed the appeal, holding that the cash-deposit addition could not be sustained to the extent it was satisfactorily explained by earlier withdrawals from the same bank account and by marriage gifts. The balance amount, not supported by evidence of agricultural income or family savings, was upheld.

Maintainability of recall applications seeking setting aside of the ex parte and consequential orders - Error Apparent on the Face of the Record - Sufficient cause for non-appearance - Distinction between recall and review - Application for taking certain additional documents on record.

Recall of ex parte orders - HELD THAT: - The Tribunal held that, though it has power under the statute to recall an ex parte order and to review its orders, the two operate on different legal bases: recall requires proof that the affected party was prevented by sufficient cause from appearing, whereas review is confined to an error apparent on the face of the record. On the record, repeated opportunities had been granted, including a last opportunity after the applicant had already been proceeded ex parte, yet the applicant remained absent. The explanation founded on the illness and death of one partner's father and on lapse of previous counsel was found insufficient, particularly when the firm had other partners and no explanation was furnished for their failure to participate. The Tribunal also found that the attempt to place on record the Supreme Court judgment in J. Sekar @ Sekar Reddy v. Directorate of Enforcement [2022 (5) TMI 309 - SUPREME COURT] came only after disposal of the appeal, despite sufficient earlier opportunity, and that the application for additional documents could not be considered unless the recall applications first succeeded. The absence of sufficient cause therefore defeated the prayer for recall. [Paras 12, 13, 14, 15]

The recall applications were dismissed, and the application seeking to bring additional material on record did not survive for consideration in the absence of recall.

Final Conclusion: The Tribunal declined to recall its earlier orders, holding that the applicant had failed to show sufficient cause for persistent non-appearance despite repeated opportunities. The recall applications were accordingly dismissed.

Validity of imposition of penalty under sections 112 and 114AA - Principles of natural justice - Want of a speaking order - non-consideration of defence submissions.

Principles of natural justice - speaking order - HELD THAT: - It is settled legal precedent that a quasi-judicial authority is required to consider the defence submission put forward by a person, who is subjected to inquiry and the same is to be dealt with in the findings by a speaking order. Though, the impugned order in original can be said to be a detailed order, but while passing the same, the adjudicating authority has missed a quintessential feature of dealing with the defence submission(s), which makes the order vulnerable. Each and every contention, in the defence submission/reply, are required to be elaborately dealt with and failure to record the findings will amount to violation of principles of natural justice and hence, only on this short ground, we entertain these writ petitions.

The Court found that the adjudicating authority had substantially reproduced the contents of the show-cause notice and had not recorded findings on the detailed written defence submitted by the petitioners. A mere recital that the authority had gone through the show-cause notice, records, and written submissions did not satisfy the requirement of a speaking order. The Court held that a quasi-judicial authority must consider and deal with the defence put forward by the noticee, and failure to record findings on such defence amounts to violation of principles of natural justice. On that short ground alone, without examining the merits of the penalty proceedings, the impugned orders were held vulnerable. [Paras 5, 6, 7, 8]

The impugned Orders-in-Original were quashed and the matters were remanded to the adjudicating authority for fresh decision after considering the petitioners' defence submissions and granting personal hearing, with all merits contentions kept open.

Final Conclusion: The writ petitions were partly allowed. The penalty orders were quashed solely on the ground of non-consideration of the petitioners' defence submissions and the matters were remanded for fresh adjudication without any decision on merits.

Refusal to waive the pre-deposit condition - non-application of mind or perversity - Appellate discretion - Financial hardship -advance licence to import raw materials for the fulfilment of its export obligation.

Waiver of pre-deposit - Financial hardship - Appellate discretion - HELD THAT: - In the case, it is found that the reference to BIFR is only subsequent to the expiry of the export obligation period. Therefore, the post-event has not rightly been taken into consideration by the Appellate Authority as a hardship. In sofar as the second limb of the argument is concerned, telescoping of the Customs Act, 1962 to the Foreign Trade (Development and Regulation) Act, 1992 is not permissible, since the exemption and concession to the importer on a specific condition have to be tested under the respective Act. The collection of differential duty provided under Section 28 of the Customs Act, 1962 will not foreclose the right of the Department to claim penalty for non-fulfilment of the export obligation promised under Foreign Trade (Development and Regulation) Act, 1992.

The Court held that the discretion exercised by the appellate authority did not suffer from non-application of mind or perversity. The authority had considered the plea based on the company's reference to BIFR and found that the proceedings related to a period prior to such reference; hence that circumstance was not accepted as constituting hardship warranting waiver. On that basis, the refusal to dispense with the deposit condition was upheld. The contention on the substantive liability for non-fulfilment of export obligation was not adjudicated on merits, since liberty was given to pursue the appeal after deposit. [Paras 8]

The refusal to waive pre-deposit was sustained, but the petitioner was granted liberty to deposit the amount within the time fixed and seek restoration of the appeal for decision on merits, including on any additional grounds.

Final Conclusion: The writ petition was disposed of by upholding the appellate authority's refusal to waive pre-deposit. At the same time, the petitioner was permitted to deposit the penalty amount within the stipulated time and have the statutory appeal restored for adjudication on merits.

Validity of the CESTAT's order granting provisional release - Non-speaking order - Without obtaining BIS certificates for the subject goods.

Non-speaking order - Provisional release of goods - HELD THAT: - The Court accepted the challenge to the impugned order on the ground that the order granting provisional release was non-speaking. Since the objections raised by the Customs Department regarding release of the goods had not been considered, the order could not be sustained. On that finding, the Court quashed the miscellaneous order and directed the Tribunal to dispose of the pending customs appeal expeditiously on merits, while recording the Department's undertaking not to destroy or alienate the goods till disposal of the appeal. [Paras 6]

The impugned order was quashed as a non-speaking order, and the pending appeal was directed to be decided expeditiously with the goods not to be destroyed or alienated in the meantime.

Final Conclusion: The writ petition was disposed of by setting aside the Tribunal's order for want of reasons and by directing expeditious disposal of the main customs appeal. The Department's undertaking not to destroy or alienate the goods till such disposal was also recorded.

Refund of provisional anti-dumping duty - importation of Copper Clad Laminates - Automatic refund on withdrawal of provisional levy - Unjust enrichment - burden of proof - Evidentiary value of accounting treatment and Chartered Accountant's certificate.

Refund of provisional anti-dumping duty - Automatic refund on withdrawal of provisional levy - HELD THAT: - It can be said that going by Rule-21 of the ADD Rules, 1995 there is no requirement of filing refund application for refund since the Respondent was obligated under the Rule to refund the same as it says such collection, if any, between imposition and withdrawal shall be refunded but appellant was compelled to file the same within one year of such withdrawal notification since refund was not suo-muto granted to it and the only ground of rejection on both the rounds of litigation was that it was shown as expenditure, which is unsupported by any Standard Accounting Principles published by Institute of Chartered Accountant, a Statutory Public Authority. In this connection, thread bore analysis of such non-reflection of the said amount as ‘receivable’ in the Books of Account and its unrelated link to the ‘Principle of Unjust Enrichment’ has been discussed. It would be, worthwhile, to reproduce para-4 to para-7 of the order passed by the Me as Member (Judicial) of this Tribunal in the case of M/s. EMA Lubes Pvt. Ltd. versus Commissioner of Central Excise and Service Tax2023 (12) TMI 674 - CESTAT MUMBAI], that covers the issue as well precedent decision on it would provide the answer also to the present litigation.

Apart from the above observation that would nullify the entire reasoning given in the order by the Refund Sanctioning Authority and Commissioner (Appeals) concerning linking of the “ amount not shown as receivable” as unjust enrichment, it is also required to be placed on record that such refund viza-viz doctrine of unjust enrichment principle are related to refund sought under Section 11B of the Central Excise Rules which should not be established by the Department and in the instant case when Rule-21 Sub-Rule-3 of Anti Dumping Rule clearly says that such collection of ‘ADD shall be refunded’ by the Department, there was no scope available also before the Refund Sanctioning Authority to go beyond the Statute so as to scrutinise the test of unjust enrichment for which the entire order passed by the Commissioner (Appeals) can never be said to have been passed in conformity to the facts and law governing such crediting of ADD back to the Account of the Importer.

The finding of unjust enrichment based solely on the profit and loss account treatment was set aside.

Final Conclusion: The Tribunal held that the provisional anti-dumping duty, having been withdrawn without confirmation, was refundable under the Anti-Dumping Rules themselves and could not be withheld by applying unjust enrichment. The impugned appellate order was set aside and refund with applicable interest was directed.

Classification of goods - imported goods described as “wheel chair for use by physically disabled/handicapped persons (for toileting) with spare parts” - essential character - classifiable under CTH 87139090 as wheelchairs or under CTH 9402 as commode chairs - Eligibility for exemption under Notification No. 12/2012-Cus - Common Parlance - Multifunctional Goods - General Rules for the Interpretation​​​​​​​.

Whether the impugned goods are classifiable under CTH 87139090 as wheelchairs or under CTH 9402 as commode chairs? - HELD THAT: - The Tribunal held that classification of multifunctional goods must be determined by their essential characterand principal function. On the description, design, presence of wheels and intended use, the goods were primarily mobility aids for disabled persons, and the toileting feature was only an ancillary convenience. Heading 9402 was found inapplicable since the goods did not possess the characteristics of specialized medical furniture and did not perform any medical or surgical function. Internet descriptions relied on in adjudication could not override the intrinsic characteristics and functional attributes of the goods. Applying the principles of essential character and common parlance, the product remained a wheelchair notwithstanding the additional toileting facility. [Paras 8]

The goods were correctly held classifiable under CTH 87139090 as wheelchairs.

Interpretation of exemption notification - Eligibility to exemption - HELD THAT: - The Tribunal held that the notification covered wheelchairs and other carriages for disabled persons without prescribing any exclusion for products having additional features. Once the goods were found to fall within Heading 8713 as wheelchairs for disabled persons, the exemption followed. The benefit could not be denied by reading into the notification a limitation based on the added toileting facility, since conditions not expressed in the notification cannot be imported to restrict eligibility. [Paras 9]

The exemption under Notification No. 12/2012-Cus. was rightly allowed.

Final Conclusion: The Tribunal upheld the appellate order and dismissed the Revenue's appeal. It held that the imported product retained the essential character of a wheelchair for disabled persons and was therefore classifiable under CTH 87139090 and entitled to exemption under Notification No. 12/2012-Cus.

Refund of duty on export goods - barred by the doctrine of unjust enrichment - exporter realised export proceeds higher than the FOB value declared in the shipping bill - Presumption of pass-through.

Whether the refund sanction to the appellant is hit by the doctrine of unjust enrichment, in view of excise realisation over the declared FOB value. - HELD THAT:- Hon’ble Supreme Court in the case of M/s Addison and Company Ltd. [2016 (8) TMI 1071 - SUPREME COURT], held that the assessee is not entitled to refund as it would result in unjust enrichment.

The Tribunal held that the statutory bar of unjust enrichment governed the refund claim and required the claimant to prove that the duty burden had not been passed on. On the record, the export proceeds realised under the Bank Realisation Certificate exceeded the FOB value declared in the shipping bill, and no cogent explanation or financial correlation was furnished to show that the excess realisation did not include the duty element claimed as refund. The Chartered Accountant's certificate did not address this crucial aspect, and the original refund sanction had been granted without proper verification of the financial records. In these circumstances, the Tribunal accepted that excess realisation over the declared transaction value gave rise to a presumption that the duty incidence stood passed on, and the refund sanction was therefore legally unsustainable. [Paras 10, 11, 12, 14, 15]

The rejection of refund on the ground of unjust enrichment was upheld and the appeal was dismissed.

Final Conclusion: The Tribunal upheld the appellate order denying the refund on the ground of unjust enrichment. Since the appellant had realised export proceeds above the declared FOB value and failed to disprove passing on of the duty incidence, the appeal was dismissed.

Validity of the conditions for provisional release of the goods - requirement of furnishing bank guarantee as a condition - arbitrary, onerous and unreasonable - Onerous bank guarantee conditions -Reliance on visual inspection for classification.

Provisional release - Bank guarantee - Visual inspection - FSSAI laboratory testing - HELD THAT: - The Tribunal held that the CRCL reports could not be safely relied upon for insisting on a bank guarantee, since the Chemical Examiner was not a food analyst, the conclusion on classification was drawn only from visual inspection, and the testing was not shown to have been conducted in accordance with the procedure prescribed under the Food Safety & Standards Regulations. In contrast, the National Food Laboratory, Ghaziabad, had tested the samples in accordance with the FSSAI framework and reported the goods to be fit for human consumption. The Tribunal further noted that the impugned order had principally relied on CBIC Circular No. 35/2017-Cus, which had been struck down by the Delhi High Court in Additional Director General vs. Its May Name Pvt Ltd [2020 (6) TMI 72 - DELHI HIGH COURT]. Since the allegation of misdeclaration rested on an ambiguous CRCL report and the merits of classification were yet to be finally adjudicated, insistence on a bank guarantee for provisional release was held unsustainable. [Paras 8, 9, 10, 11, 13]

The goods were directed to be released on the conditions in the provisional release order except the condition requiring furnishing of bank guarantee, without affecting the merits of the pending adjudication.

Final Conclusion: The Tribunal held that, in the circumstances, insistence on a bank guarantee for provisional release was unjustified. The seized goods were ordered to be released subject to the remaining conditions of the provisional release order, with the merits of classification and other issues left open for final adjudication.

Misdeclaration of imported goods - Rejection of Transaction value - contemporary import data of similar goods - Contemporary import data -Unretracted statement under Section 108 - Confiscation and penalty for misdeclaration - discrepancies in quantity, description and valuation.

Transaction value rejection - HELD THAT: - It is an undisputed position that the quantity, description and valuation of the goods imported were misdeclared. However, the reason given by the appellant is that the mistake has occurred during the loading of the items from the suppliers side and this fact of mis-declaration came to notice only during the examination of the container. Similarly, for non-declaration of MRP/RSP, as per the provisions of Standard of Weights and Measure (Packaged Commodities) Rules, 1977, he stated that the mistake is on the part of the supplier, who has missed to fix the tag/logo of MRP/RSP on the items. It is also evident from his statement that he had admitted the mistake and the liability of making good the deficient duty being the importer of the goods.

The Tribunal held that misdeclaration of quantity, description and valuation stood admitted by the importer. The proprietor's statement under Section 108, accepting responsibility for the misdeclaration, agreeing to reassessment and waiving show cause notice, was treated as valid evidence, there being no retraction. Applying the principle stated in Commissioner of C.EX., Madras versus M/s Systems and Components Private Ltd [2004 (2) TMI 65 - SUPREME COURT], the Tribunal held that what was admitted did not require further proof. It further noted that identical goods data was unavailable and, therefore, the adjudicating authority correctly proceeded to re-determine value under Rule 5 on the basis of contemporary import data of similar goods rather than under Rule 4. [Paras 7, 8, 9]

The reassessment and differential duty liability were sustained.

Misdeclaration of imported goods- Importer's declaration responsibility - Confiscation and penalty for misdeclaration - HELD THAT:- The Tribunal held that, in the regime of self-assessment, the importer bears the primary responsibility to correctly declare the quantity, quality, description and assessable value of the goods. The plea that the errors were attributable to the supplier did not absolve the importer of statutory liability. Since the misdeclaration stood established, there was no reason to interfere with confiscation under Section 111(l) and (m). The redemption fine was found to be just and fair, and the penalty under Section 114A was also upheld, subject to the reduction already granted in the order on timely payment. [Paras 10, 11]

The confiscation, redemption fine and penalty were affirmed.

Final Conclusion: The Tribunal dismissed the appeal and upheld the reassessment, confiscation, redemption fine and penalty. It held that the admitted and unretracted misdeclaration disentitled the importer from challenging rejection of declared value or the consequential action taken under the Act.

Eligibility of concessional rate of duty under Notification No. 50/2017-Cus, as amended - Compliance with the procedure prescribed under IGCR Rules - imported quantities in excess of the declaration made under Rule 5 of the Customs - Burden to establish breach of import procedure - Extended period of limitation - Demand of duty - Penalty.

Concessional rate of duty under IGCR Rules - HELD THAT: - The Tribunal held that, under the scheme of the IGCR Rules, the benefit of concessional duty is allowed at the port of import only on the strength of the declaration transmitted by the jurisdictional officer, while the jurisdictional officer separately oversees the end use of the goods. Since it was undisputed that the imported goods were used for the declared purpose, recovery under the Rules on the footing of misuse did not arise. On the department's own case, the alleged irregularity could have occurred only if either the jurisdictional officer transmitted quantities beyond what was declared, or the officer at the port permitted clearance beyond the quantities so transmitted. As the show cause notice and the record did not identify which officer committed such irregularity, nor did they contain material showing that goods were cleared beyond the quantities duly processed through the statutory mechanism, the allegation of excess import by the appellant was not established. In the absence of such foundational proof, the duty demand and consequential penalty could not be confirmed against the appellant. [Paras 14, 15, 16, 17, 18]

The impugned order was set aside and the appeal was allowed, as the demand and penalty lacked a sustainable basis.

Final Conclusion: The Tribunal held that the department failed to establish any actionable breach by the appellant of the IGCR procedure so as to deny the concessional duty benefit. As the goods were admittedly used for the intended purpose and the alleged excess clearances were unsupported by the record, the demand and penalty were set aside.

Classification of goods - imported poultry feed premix products, containing vitamins, pro-vitamins, amino acids, stabilisers and carriers - classifiable under heading 2309 as preparations of a kind used in animal feeding Or under heading 2936 as provitamins and vitamins - General Rules for Interpretation - Harmonised System Explanatory Notes - Essential character - Trade parlance - Predominant use.

Classification of goods -HELD THAT: - Applying GIR 1, the Authority examined the competing scope of Headings 2309 and 2936 with the Chapter Notes and HSN Explanatory Notes. On the disclosed composition, manufacturing process and end use, the goods were found to be compound preparations containing vitamins or pro-vitamins, amino acids, antioxidants, stabilisers and edible carriers or diluents, customised for specific categories and growth stages of poultry and intended for mixing with bulk feed. The Authority held that Heading 2936 covers vitamins of general use, including those with additions made only for preservation or transport, whereas premixes containing active substances with carriers to facilitate homogeneous dispersion in animal feed fall under Heading 2309. Since the carriers and other additives in the present products were not merely stabilising agents but rendered the goods particularly suitable for poultry feeding, the products acquired the character of animal feed premixes and stood excluded from Heading 2936. The Board circulars and the decisions in Tetragon Chemie [2001 (7) TMI 127 - SUPREME COURT] and Wockhardt Life Sciences [2012 (3) TMI 40 - SUPREME COURT] were treated as supporting this classification approach based on specific use and functional character. [Paras 29, 30]

The products namely LAYVIT PROMAX, BROVIT PROMAX, Poultry Feed Premix-PBS, Poultry Feed Premix-BS and Poultry Feed Premix-BF were ruled classifiable as preparations of a kind used in animal feeding under CTI 2309 90 90.

Final Conclusion: The advance ruling held that the subject poultry feed premixes are not vitamins of general use under Heading 2936 but preparations specifically designed for animal feeding. They were accordingly classified under CTI 2309 90 90.

Same line of business - Investment of funds by multi-State co-operative society - Bye-laws as determinant of business objects - Meaning and scope of the expression “any other institution in the same line of business” - contravention to Section 30(2)(e) of the IBC.

Same line of business - HELD THAT: - The Court held that Section 30(2)(e) of the IBC obliges the resolution professional to ensure that a resolution plan does not contravene any law in force, and in the present context that inquiry attracts Section 64(d) of the 2002 Act. The phrase "same line of business" is not defined in the statute, but the legislative history, particularly the parliamentary deliberations noticed by the Court, showed that the amendment was introduced as a restrictive standard to prevent misuse of members' funds through open-ended and dubious investments. The Court therefore construed the expression narrowly, holding that the inquiry must be anchored in the objects and functions contained in the bye-laws of the multi-State co-operative society, since the bye-laws define the business domain chosen by the society. Reference to analogous regulatory guidance could be illustrative, but the decisive test remains whether the target institution bears a predominant or substantial sameness with the business activities permitted by the society's bye-laws. [Paras 34, 35, 36, 37, 50]

Section 64(d) permits investment only in a subsidiary institution or in another institution whose business, judged with reference to the investor society's bye-laws, is substantially or predominantly the same or closely related.

Reading the bye-laws as a whole, the Court found that the appellant's predominant line of business was that of a financial and member-oriented co-operative engaged in deposits, loans and allied welfare activities, with only limited agro-based processing activity under Clause 5(s). That clause was confined to agro-products and related processing support, and did not authorise a general industrial manufacturing business. The corporate debtor, on the other hand, was engaged in man-made fibre or viscose-based textile manufacturing, which the Court treated as distinct from agro-product processing. Mere broad placement of both entities within the textile sector was held insufficient, since the statutory test requires substantive sameness in core business activities. The Court also clarified that profit or loss figures are irrelevant to this determination, which must be made through the bye-laws alone. As to the amendment of Clause 52, the Court held that the certificate of registration was never produced before the forums below and could not be brought in later as additional evidence; in any event, the amendment merely reproduced the language of Section 64(d) concerning investment and did not amend the object clause in Clause 5, which alone defined the appellant's business line. [Paras 45, 46, 47, 48, 49]

The appellant and the corporate debtor were not in the same line of business on the touchstone of the appellant's bye-laws, and the amendment to Clause 52 did not enlarge the appellant's objects or cure that deficiency.

Final Conclusion: While permitting withdrawal of the appeal and dismissing it as withdrawn, the Court clarified the legal position that the restrictive phrase "same line of business" in Section 64(d) must be applied with reference to the objects and functions in the bye-laws of the multi-State co-operative society. On that standard, the appellant's business profile did not match that of the corporate debtor.

Rejection of the operational creditor's claim in the corporate insolvency resolution process - Belated operational creditor claim - information not supplied before the close of the window for admission of claims - sufficient proof and verification of claim - Time-bound insolvency process - Determination of the claim of the Appellant as raised by virtue of invocation of provisions contained under Section 60 of the I & B Code to be read with Rule 11 of the NCLT Rules, 2016.

Belated claim - Verification of claim - Operational creditor - Resolution plan stage - HELD THAT:- The grounds taken by the Appellant qua the implications contained under Regulation 12(1) and Regulation 13(1-B), in fact, according to the datas, which are available on record, the Appellant has to shoulder the responsibility upon himself for not responding and furnishing the details of the claim in order to enable the Resolution Professional to verify the same in accordance with the provisions contained under Regulation 13 of Regulations of 2016, as to enable to verify the same and more particularly, when the claim raised by the Appellant in his Form B, as submitted on 09.12.2023, the same could not be collated with the books of account of the Corporate Debtor, which could have substantiated the entitlement of the Appellant in the capacity of him being the Operational Creditor entitling him to receive the claim as raised by him in Form B.

The Appellate Tribunal held that the appellant had not controverted the Resolution Professional's reasons for rejection, namely that the claim filed in Form B could not be verified from the corporate debtor's records and that the appellant failed to respond to repeated communications seeking breakup of the claim and supporting material, including the basis for interest. The Tribunal found that the claim was pursued beyond the permissible stage contemplated by the Regulations, and once the claim remained unverified and the resolution process had advanced to the stage where the resolution plan stood approved by the Committee of Creditors and filed before the Adjudicating Authority, no such deficient claim could be entertained. The decision turned on the mandatory and time-bound nature of the CIRP framework and the appellant's own failure to comply with the requirements for proof and verification of claim. [Paras 15, 16, 17, 18, 19]

The appellant's challenge to rejection of its claim failed, and the rejection of the application was upheld.

Final Conclusion: The Appellate Tribunal found no legal error in the rejection of the appellant's operational debt claim and held that the appellant's own failure to timely substantiate and verify the claim was fatal. The appeal was accordingly dismissed.

Seeking condonation of delay in filing the Appeal - Limitation for appeals under the I&B Code - Availability of an alternative statutory remedy - Exclusion of time spent in writ proceedings - Scope of interference by the High Court under Article 226 or under Article 227 of the Constitution of India - Whether the period spent by the petitioners in prosecuting the respective writ petitions can be excluded while computing the limitation period.

Limitation for appeals under the I&B Code - HELD THAT:- The Appellate Tribunal held that the appellate limitation under the Code is a strict and time-bound regime, and a party cannot extend it by first pursuing writ proceedings instead of availing the statutory appeal. Since the writ petitions were themselves filed after expiry of the original 30-day period, the appellants had already allowed limitation to run out before approaching the High Court. Once the High Court declined to entertain the writ petitions on the ground of availability of an effective alternative remedy, it could not, while holding the proceedings before it to be not maintainable, issue a positive direction affecting limitation before the Appellate Tribunal.

The Hon'ble Apex Court in the matters of Gujarat State Civil Supplies Corporation Ltd Vs. Mahakali Food and Pvt Ltd. [2022 (11) TMI 91 - SUPREME COURT] along with other connected Appeals was dealing with the issue of the principles to be followed in a scenario, where the legislature has consciously framed a special statute to govern the proceedings before the special Tribunals / Courts, constituted under the act, it has, in Para 17 and 18 of the said judgment, held in very specific terms, that a special statute will override the provisions of the general statute, and in that eventuality, the invocation of a writ jurisdiction, to get an order / direction to condone the delay may not override the provision under special statute which has got in its inbuilt mechanism for condonation of delay.

Applying the principle that a special statute overrides the general law in matters of limitation and appellate remedy, the Tribunal treated the direction for exclusion of time as beyond jurisdiction and held that the appeals, filed far beyond the maximum permissible period, were barred by limitation. [Paras 11, 12, 13, 14, 15]

The applications for condonation of delay were rejected and the appeals were dismissed as barred by limitation.

Final Conclusion: The Appellate Tribunal held that the statutory limitation under the Code could not be enlarged by excluding the period spent in writ proceedings after the High Court had declined to entertain them on the ground of alternate remedy. The appeals, having been filed beyond the outer limit permissible under Section 61, were dismissed as time-barred.

Application under Section 95 of the Insolvency and Bankruptcy Code against the personal guarantor - barred by limitation - loan recall notice - issued prior to the initiation of proceedings under Section 95 of the I & B Code​​​​​​​ - Invocation of personal guarantee - period prescribed under Article 137 of the Limitation Act.

Limitation for insolvency proceedings against personal guarantor - HELD THAT: - The Appellate Tribunal held that the communications dated 29.01.2016 and 30.11.2018 did not amount to recall of the loan or invocation of the personal guarantee. The first communication was addressed to the corporate debtor and merely stated that the creditor was entitled to recall the outstanding amount; it only conveyed default and the creditor's right or intention to act. The second communication also only intimated that legal action would follow in case of non-payment and was neither a loan recall notice nor a notice answering the requirement preceding action under Section 95. The effective and clear invocation of the guarantee occurred only through the communication dated 03.08.2020, in which the creditor expressly stated that it thereby invoked the guarantee and called upon the guarantor to pay. Therefore, limitation under Article 137 had to run from 03.08.2020, and the Section 95 proceedings instituted thereafter were within time. [Paras 10, 12, 13]

Limitation was reckoned from the actual invocation of the personal guarantee on 03.08.2020, and the Section 95 proceedings were held to be within limitation.

Final Conclusion: The appeal was dismissed. The Appellate Tribunal upheld the admission of the Section 95 proceedings, holding that the earlier communications did not trigger limitation and that the proceedings were instituted within time from the date of actual invocation of the personal guarantee.

Condonation of delay - Limitation for insolvency appeals - delay in filing the appeal - Exclusion of court vacation period - Sufficient cause - Due to summer vacations NCLT was closed, which caused delay in obtaining the certified copy of the impugned order.

Limitation for insolvency appeals - HELD THAT: - The Appellate Tribunal held that limitation ran from the date of pronouncement of the impugned order and not from the date of alleged knowledge, particularly when the appellant was a party to and had participated in the proceedings. It further held that exclusion of the vacation period under Section 4 of the Limitation Act and Rule 3 of the NCLAT Rules is available only where the limitation period expires during the period of closure; since the Tribunal was functioning before expiry of limitation, no such exclusion was permissible. The Tribunal also found that no sufficient explanation had been given for the delay and that the appellant had not acted with due diligence in applying for the certified copy within time. Relying on V. Nagarajan v. SKS Ispat & Power [2021 (10) TMI 941 - SUPREME COURT (LB)], it concluded that the delay was in fact 32 days and, in any event, beyond the Appellate Tribunal's statutory power to condone. [Paras 7, 8, 9]

The application for condonation of delay was rejected and the appeal was dismissed as barred by limitation.

Final Conclusion: The Appellate Tribunal refused to condone the delay, holding that neither the plea of later knowledge nor the claim for exclusion of the vacation period was legally sustainable. Consequently, the appeal was dismissed as time-barred.

Imposition of Penalty for contravention of the NRNR account scheme - Effect of omission of subordinate legislation on prior contraventions - confiscation of the amounts standing to the credit of the NRNR accounts - Reasoned order - Non-speaking order.

NRNR account contravention - Account holder liability - HELD THAT: - The Court held that Regulation 5(1)(iv) read with Schedule 4 did not cast an obligation exclusively on the authorised dealer. While the authorised dealer is permitted to accept deposits under the scheme, the account itself can be opened only by a person resident outside India and only from funds remitted from outside India. The regulatory requirement therefore operates both upon the bank and upon the person owning the account. Since Section 13(1) of FEMA applies where any person contravenes the Act, rules or regulations, the account holders were also liable to penalty for opening subsequent NRNR accounts out of loan funds raised within India. [Paras 19, 20]

The challenge to the penalty on the ground that only the authorised dealer could be proceeded against was rejected.

Omission as repeal - Saving of prior liability - HELD THAT:- Relying on the principles explained in Fibre Boards Private Limited, Bangalore v. Commissioner of Income Tax, Bangalore [2015 (8) TMI 482 - SUPREME COURT] and Shree Bhagwati Steel Rolling Mills v. Commissioner of Central Excise & Anr. [2015 (11) TMI 1172 - SUPREME COURT] the Court held that repeal includes repeal by express omission and that such omission does not obliterate liabilities already incurred, unless a contrary intention appears. The amendment deleting Regulation 5(1)(iv) merely stopped fresh acceptance or renewal of NRNR deposits and provided for continuance of existing deposits till maturity with credit of maturity proceeds to NRE accounts thereafter. It did not wipe out prior violations or the consequences flowing from them. Rayala Corporation (P) Ltd. & Anr. v. Director of Enforcement, New Delhi [1969 (7) TMI 109 - SUPREME COURT] was held inapplicable to the facts. [Paras 23, 24, 25, 26]

The contention that the show cause notices were not maintainable because the regulation had been omitted was rejected.

Confiscation under FEMA - Requirement of reasons - HELD THAT:- The Court held that the power under Section 13(2) of FEMA is discretionary, as confiscation may be directed only if the adjudicating authority thinks fit. Since the authority acts in a quasi-judicial capacity, it must record reasons for deciding that, in addition to penalty, confiscation is warranted. Neither the adjudicating authority nor the appellate tribunal gave any reasons for ordering confiscation. The record also showed that the loan transactions stood repaid through the maturity amounts of the NRNR accounts, and the relevant circumstances were not considered. In view of the non-speaking nature of the confiscation direction and the lapse of time, the Court declined remand and held that there was no warrant for confiscation on the facts. [Paras 28, 29, 30, 31]

The confiscation orders were set aside, while the penalty orders were left undisturbed.

Final Conclusion: The appeals were partly allowed. The Court upheld the penalty imposed for contravention of the FEMA deposit regulations, rejected the challenge based on omission of the relevant regulation, but set aside the confiscation of the amounts lying in the appellants' NRNR accounts for want of reasons and for absence of justification on the facts.

Territorial jurisdiction under the PMLA- Committal of scheduled offence to the Special Court under the PMLA - Trial of predicate and money-laundering cases by a common competent Special Court - offence punishable under Section 4 of the PMLA.

Whether the same position would apply to a situation, where the predicate offence is an offence under a special enactment and is being tried by a special court constituted under the special enactment, viz., the PC Act and the Special Court under the PMLA is not a designated Special Court under the PC Act. - HELD THAT: - Relying on Rana Ayyub v. Directorate of Enforcement [2023 (2) TMI 236 - SUPREME COURT], the Court held that Section 44(1)(a) and (c) of the PMLA make the Special Court under the Act the forum for trying the offence of money-laundering and the connected scheduled offence. Where cognizance of the scheduled offence has been taken by a different court, that court has no discretion in the matter and must commit the scheduled offence case to the Special Court under the PMLA. The trial court's reasons that the predicate case had reached an advanced stage and that transfer would delay the trial were held to be contrary to the statutory scheme and the law declared by the Supreme Court. [Paras 13, 14, 15, 16]

The rejection of the application for transfer of the scheduled offence on the ground of delay or progress of trial was unsustainable.

The Court noted that the larger question whether a Special Court under the PMLA, not designated under the Prevention of Corruption Act, would nevertheless acquire jurisdiction to try the predicate offence under that special enactment was left open. It found, however, that the CBI Court trying the predicate offence was also a designated Special Court under the PMLA and was therefore competent to try both matters. Following Assistant Director, Directorate of Enforcement v. Inspector of Police and another [2022 (9) TMI 1704 - SC ORDER], and expressly keeping the wider legal issue open, the Court directed transfer of the PMLA complaint to that common competent court. [Paras 18, 19, 20, 21]

The PMLA complaint was ordered to be transferred to the XIII Additional Special Court for CBI Cases, Chennai, where the predicate offence case was pending.

Final Conclusion: The Court held that Section 44(1)(c) of the PMLA leaves no discretion to the court trying the scheduled offence once a proper application for committal is made. On the special facts that the CBI Court trying the predicate offence was also a designated Special Court under the PMLA and was competent to try both matters, the impugned order was set aside and the PMLA case was directed to be transferred to that court, while the larger jurisdictional issue was left open.

Provisional attachment - freezing and retention of the appellant company's bank accounts - Proceeds of crime - funds received as foreign direct investment - Money trail - Foundational facts and reverse burden - Foreign direct investment through banking channels - layering or concealment of proceeds of crime - Amount received by showing false temptations of high returns to deaf and dumb persons of various states of the country, some of the amount was invested through online trading application while remaining amount was used to give double returns to some of the investors and also used some amount for their own personal benefit.

Proceeds of crime - Money trail - HELD THAT: - The Tribunal held that the appellant was not shown to be involved in the predicate offence and that the respondent had failed to place material establishing that the funds received in the appellant's accounts were traceable to the alleged crime. The appellant, on the other hand, disclosed that the investment came as FDI through banking channels after approval of the RBI and after compliance with the applicable regulatory requirements. Mere suspicion arising from the foreign entities being based in Dubai, or from the alleged association of those entities with another person, could not by itself convert a disclosed and regulated investment into proceeds of crime. The Tribunal further held that the reverse burden under Section 24 of the 2002 Act would arise only after the respondent laid the foundational facts, which had not been done. It also found that, if the case of the respondent was that the foreign entities had used tainted funds to acquire shares, the proper subject matter of attachment would be the shares acquired, not the appellant's bank accounts. On that reasoning, the freezing and retention of the bank accounts were held to be illegal. [Paras 10, 11, 12, 13]

The impugned order permitting retention of the frozen bank accounts was set aside and the appeal was allowed.

Final Conclusion: The Tribunal held that, in the absence of material establishing a money trail or foundational facts linking the appellant's receipts to the alleged proceeds of crime, the retention of the frozen bank accounts was unsustainable. The appeal was accordingly allowed and the impugned order was set aside.

Limitation for appeal - Condonation of delay - Sufficient Cause - barred by limitation - Statutory bar on extension beyond prescribed period.

Limitation for appeal - Condonation of delay - Statutory bar on extension beyond prescribed period - HELD THAT:- This issue is squarely covered by the decision of Hon’ble Supreme Court in the case of M/s Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT], wherein it has been held that Commissioner (Appeals) could not condone the delay beyond the 30 days in filing the appeal before him.

The Tribunal found that, on the appellant's own statement, the order was communicated on 14.03.2023 and the appeal before the Commissioner (Appeals) was filed only on 06.07.2023. Under Section 85(3A), the appeal had to be filed within two months from receipt of the order, with only a further period of one month available for condonation on sufficient cause being shown. Since the appeal was presented after expiry of even that extended period, the Commissioner (Appeals), being a statutory authority, lacked power to condone such delay. The Tribunal applied the principle that where the statute prescribes the outer limit for condonation, the appellate authority cannot travel beyond that limit, and the merits of the dispute do not survive for consideration once the appeal itself is time-barred beyond the condonable period. [Paras 3]

The dismissal of the appeal as barred by limitation was upheld.

Final Conclusion: The Tribunal held that the appeal before the Commissioner (Appeals) had been filed beyond the maximum period statutorily permissible under Section 85(3A) of the Finance Act, 1994, and therefore no condonation was legally possible. The appeal was accordingly dismissed.

Liability to pay service tax under reverse charge mechanism - commission paid to foreign agents for arranging port formalities abroad and related services - classifiable as Business Auxiliary Services Or Steamer Agent Services and taxable under Section 66A of the Finance Act, 1994 - foreign-based services - Place of provision of services.

Services were performed outside India through foreign agents - HELD THAT: - The Tribunal found no reasoning in the show-cause notice or the impugned order for classifying the foreign agents' activities as Business Auxiliary Services, particularly when the appellant was promoting its own business. Relying on Bhuvaneshwari Agencies Pvt. Ltd. [2007 (7) TMI 665 - CESTAT BANGALORE], it held that such activities were more specifically covered by Steamer Agent Services and not by Business Auxiliary Services. It further held that Section 66A fastens liability only where taxable services are received from a foreign service provider by a recipient situated in India; since the services in question were rendered abroad and not received in India, service tax liability under Section 66A did not arise. [Paras 5, 6, 7]

Service tax demand under reverse charge for the period from 18.04.2006 to 30.06.2012 was unsustainable.

The Tribunal held that for the period from 01.07.2012 to 31.03.2014, taxability had to be tested under the Place of Provision of Services Rules, 2012. On the admitted position that the services were rendered abroad and received abroad, it concluded that the place of provision was outside the taxable territory and, therefore, no liability could be fastened under the Reverse Charge Mechanism. [Paras 8]

The demand for the period from 01.07.2012 to 31.03.2014 was also not sustainable.

Final Conclusion: The Tribunal held that the impugned demand was unsustainable for both periods. The services performed by foreign agents abroad were not taxable as Business Auxiliary Services under Section 66A, and for the later period they were also outside taxability under the Place of Provision of Services Rules, 2012; accordingly, the impugned order was set aside and the appeal was allowed.

Taxability of construction of residential flats for BPL families - Refund of service tax - Works Contract Services.

Whether the activity of construction of residential flats for BPL families for Haryana Housing Board is a taxable service prior to 01.07.2012. - HELD THAT: - The Tribunal held that the sole controversy was whether the appellant's activity was taxable before 01.07.2012. It accepted the classification of the activity as Construction of Residential Complex Service for the relevant period and found that service tax was payable under the then prevailing statutory provisions. The refund claim was founded only on the subsequent exemption under Entry No. 12 of Notification No. 25/2012-ST and on Bharat Bhushan Gupta & Company vs. State of Haryana [2016 (8) TMI 722 - PUNJAB AND HARYANA HIGH COURT] but that decision was held inapplicable since it declared non-leviability only with effect from 01.07.2012, whereas the present claim related to an earlier period. [Paras 7, 8]

The refund was rightly rejected and the order upholding taxability for the period 2009-10 to June 2012 was sustained.

Final Conclusion: The Tribunal held that construction of residential flats for BPL families for Haryana Housing Board was taxable during the period in dispute prior to 01.07.2012. As the refund claim rested only on a later exemption and a decision confined to the post-01.07.2012 regime, the appeal was dismissed.

Liability to service tax under the category of Telecommunication Service - interconnection usage charges arising from services rendered between different divisions of the same legal entity - Internal Financial Adjustment - No Client-Service Provider Relationship.

Whether interconnection usage charges for the services provided at different locations of the appellant is chargeable to service tax under the category of ‘Telecommunication Service’ during the relevant period. - HELD THAT: - The Tribunal held that the controversy stood covered by General Manager, BSNL Cellular Mobile Services [2019 (3) TMI 1503 - CESTAT CHENNAI] Applying that precedent, it accepted that levy of service tax on interconnection usage charges presupposes a transaction between distinct service provider and service recipient. Where the alleged provider and recipient are only different circles or offices of the same assessee, the arrangement is merely an internal adjustment within one legal entity and amounts to service to self, which is not taxable. [Paras 5, 6]

The impugned orders were found unsustainable and were set aside.

Final Conclusion: The Tribunal held that the amounts sought to be taxed as interconnection usage charges represented only internal arrangements between different circles of the same assessee and therefore did not constitute taxable telecommunication service. The demands confirmed in the impugned orders were consequently set aside and the appeals were allowed.

Liability for service tax - cash discount availed by the manufacturer from its vendors for prompt payment - consideration for a taxable service under Banking and Other Financial Services - Trade Discount -Service provider-service recipient relationship - Double taxation.

Cash discount - HELD THAT:- In the case of My Car (Pune) Pvt. Ltd. Vs. Pr. Commissioner of Customs, Central Excise & Service Tax, Pune-I [2023 (6) TMI 995 - CESTAT MUMBAI], has held that the incentives and commission is solely related to trade discount for sale of cars in accordance with the regular practice as well as the agreement/schemes that were in vogue in the industry, the same cannot be considered as compensation received for provision of any taxable service.

The Tribunal found that the agreements with the vendors specifically entitled the assessee to cash discount on prompt payment and that such arrangement was an accepted trade and industry practice. Mere deduction of discount from the invoice amount and payment of the net value did not mean that the assessee had rendered any service to the vendors. In the absence of any relationship of service provider and service recipient between the parties, service tax could not be levied on the assessee. The Tribunal also noted that the assessee was a manufacturer and had not engaged in providing any banking or financial service; treating the same transaction, on which central excise duty had already been discharged on the net value, as a taxable service would amount to impermissible double taxation. [Paras 4, 5, 6]

The part of the impugned order sustaining the demand was set aside and the appeal was allowed.

Final Conclusion: The Tribunal held that prompt-payment cash discount received from vendors was only a trade discount and not consideration for any taxable service. Accordingly, the order sustaining service tax demand under Banking and other Financial Services was set aside and the appeal was allowed.

Statutory limitation for appeal - barred by limitation - Condonation of delay - appeal filed beyond the period of limitation prescribed under Section 35.

Statutory limitation for appeal - Condonation of delay beyond prescribed period - HELD THAT: - The Court held that Section 35 prescribes a filing period of sixty days with only a further condonable period of thirty days. Since the appeal was filed beyond even that outer limit, the appellate authority had no statutory power to condone the delay. The Court found no illegality or perversity in the view taken by the appellate authority and accepted by the revisional authority, both having acted within the confines of the statute. [Paras 3, 5, 6]

The rejection of the appeal as time-barred and the dismissal of the revision were upheld.

Final Conclusion: The writ petition was rejected, the Court holding that no condonation was permissible once the appeal had been filed beyond the maximum period allowed by statute. The petitioner's contention regarding any independent or continuing right to claim interest was left open for consideration before the appropriate authority in accordance with law.

Rejection of Transaction value adopted for clearances to related party sales - Price influence by relationship - valuation determined under Rule 9 - Sequential application of valuation rules - demand of differential duty, interest and penalty.

Whether the transaction value adopted by the appellant in respect of clearances to related persons is liable to be rejected and valuation is required to be determined under Rule 9 of the Central Excise Valuation Rules, 2000. - HELD THAT: - There is no examination of the applicability of Rules 4 to 7 in a sequential manner, nor are any reasons recorded for discarding these rules or for holding them to be inapplicable. Instead, the adjudicating authority has proceeded directly to invoke Rule 9 solely on the basis of relationship. Such an approach is contrary to the sequential scheme of the Valuation Rules and also amounts to disobedience to and non-compliance with the remand directions of this Tribunal.

In the case of Denso India Ltd. [2024 (8) TMI 1526 - CESTAT ALLAHABAD]] has held that where comparable sales to independent buyers are available, the same ought to be considered in preference to resorting to Rule 9. The said view has been affirmed by the Hon’ble Supreme Court [2025 (2) TMI 589 - SC ORDER]. The consistent judicial view, including that of the jurisdictional High Court and the Tribunal, is that valuation should, as far as possible, be based on actual transaction values, and recourse to Rule 9 can be taken only upon proper examination of such comparable data and satisfaction of the conditions prescribed therein. In the present case, no such exercise has been undertaken by the adjudicating authority.

The Tribunal held that Section 4 gives primacy to transaction value, and even in related party transactions such value can be discarded only on proof that the relationship influenced the price. In the present case, the notice and the de novo order proceeded essentially on the existence of relationship and price comparison, without material showing flow back, extra-commercial consideration, or any arrangement affecting pricing. The appellant had contemporaneous sales to independent buyers, and the Department failed to examine Rules 4 to 7 in sequence or record reasons for bypassing them. The de novo authority also failed to comply with the earlier remand direction requiring valuation to be considered under Rules 4 to 7 before resorting to Rule 9. The Tribunal further found defects in the Department's quantification method, including lack of clarity in computation and failure to segregate sales to related and unrelated buyers. On these findings, the statutory preconditions for invoking Rule 9 were held not satisfied. [Paras 9, 11]

The valuation adopted under Rule 9 was held unsustainable, and the transaction value declared by the appellant was directed to be accepted.

Consequential duty demand - Interest and penalty - HELD THAT: - The Tribunal held that the entire demand was founded on the re-determination of assessable value under Rule 9. Once that valuation basis failed, the duty demand necessarily collapsed. It further observed that the dispute was interpretational and that the appellant had disclosed the relevant facts and maintained proper records, with no evidence of suppression or intent to evade duty. On that basis, the consequential liabilities of interest and penalty were also held to be unsustainable. [Paras 10, 11]

The differential duty demand, together with interest and penalty, was set aside.

Final Conclusion: The Tribunal held that mere relationship between the seller and buyers was insufficient to reject the declared transaction value in the absence of evidence that the relationship influenced the price, especially when comparable independent sales existed and Rules 4 to 7 had not been examined. The impugned order was therefore set aside and the demand of duty, interest and penalty failed in entirety.

Liability to excise duty - Manufacture - activities undertaken in relation to the imported tablets and allied components - Tariff classification of handheld computer devices - Automatic Data Processing Machine - Essential character - classified under Heading 85437099 or were classifiable under Heading 8471 of the Central Excise Tariff Act, 1985.

Manufacture - Job work - Excise duty liability - HELD THAT: - The Tribunal found that the appellant had imported tablets and accessories and supplied them to M/s. Vinyas for the relevant activity, and that service tax had been paid on that activity treating it as a service. It held that, once the very same activity had been treated and taxed as service, a finding could not simultaneously be rendered that it amounted to manufacture at the appellant's end; and even if it were to be regarded as manufacture, the liability would fall on the job worker carrying out the activity. [Paras 8]

The demand could not be sustained against the appellant on the footing that the appellant had manufactured the goods.

Tariff classification - Automatic data processing machines - Residual entry - The impugned handheld computer devices with integrated scanner and software were classifiable under Central Excise Tariff Heading 8471 or under the residual Heading 85437099. - HELD THAT: - The Tribunal noted that the goods had been imported and described as tablet devices under HSN Code 84713090, and that even the impugned order recorded their functions as data capturing, computing, memory, time tracking, security and payroll management. Applying the decisions in CC Vs. Bhor Industries [1988 (4) TMI 50 - SUPREME COURT], SPA Computers Ltd Vs. CCE [1997 (9) TMI 319 - CEGAT, MADRAS], Gestener (India) Ltd Vs. Commissioner [2005 (6) TMI 472 - CESTAT, MUMBAI], Essae Teyaoka Ltd Vs. Commissioner [1999 (11) TMI 502 - CEGAT, BANGALORE] and Xerox India Ltd Vs. Commissioner [2010 (11) TMI 20 - SUPREME COURT], it held that such devices, being computer units or adjuncts to a computer system, fall under Heading 8471. The ratio applied was that goods answering the description of computer units or input units are to be classified under the specific heading for automatic data processing machines, and not under the residual entry for electrical machines and apparatus having individual functions. [Paras 8, 9]

The classification adopted for demanding duty under Heading 85437099 was impermissible, and the demand on that basis was unsustainable.

Final Conclusion: The Tribunal held that the excise demand against the appellant was unsustainable both on the ground that manufacture at the appellant's end was not established and on the ground that the goods were wrongly classified. The impugned order was set aside and the appeal was allowed with consequential relief.

Eligibility of CENVAT credit on commission agent services used for sale of goods - inclusive part of the definition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004 - Benefit of Circular No. 943/4/2011-CX dated 29.04.2011 issued by the Central Board of Excise & Customs (CBEC).

CENVAT credit on sales commission - HELD THAT:- The Tribunal held that the inclusive part of Rule 2(l) specifically covers sales promotion. On that construction, and in the light of the CBEC Circular clarifying admissibility of credit on commission-based sale of dutiable goods, commission agent service used for effecting sales fell within the scope of input service. The Tribunal also noted that in the appellant's own case [2018 (2) TMI 897 - CESTAT MUMBAI] for the subsequent period, the benefit had been allowed and the Revenue's appeal against that order had been dismissed by the Tribunal. [Paras 4, 5, 6]

Denial of CENVAT credit on the service tax paid on commission agent service was unsustainable, and the impugned order was set aside.

Final Conclusion: The Tribunal held that commission agent service used for sale of the appellant's goods was covered by the expression sales promotion in the definition of input service, and the related service tax credit was admissible. The impugned order disallowing the credit, with consequential interest and penalty, was therefore set aside.

Levy of central excise duty - Assessable value - retention of sales tax incentives under the Goa Sales Tax Deferment-cum-Net Present Value Compulsory Payment Scheme, 2005 - manufactured goods as additional consideration - benefit of CENVAT credit in respect of central excise duty paid on inputs/capital goods and service tax paid on the input services, in terms of Rule 3 of CENVAT Credit Rules, 2004.

Whether retention of sales tax incentives should be considered as additional consideration for the purpose of levy of Central Excise duty. - HELD THAT:- The Tribunal held that the controversy was no longer res integra, in view of the judgements relied upon [2023 (7) TMI 659 - CESTAT AHMEDABAD], [2023 (11) TMI 363 - CESTAT MUMBAI], since the decisions noticed by it had consistently taken the view that VAT/sales tax incentive or subsidy retained or refunded under an NPV scheme does not form part of the assessable value for central excise purposes. Applying that settled position, it found that the amount retained by the assessee under the State incentive scheme could not be treated as additional consideration for the sale of the goods and, therefore, there was no infirmity in the appellate order setting aside the duty demand. [Paras 4]

The Revenue's challenge to exclusion of the retained sales tax incentive from assessable value was rejected.

Final Conclusion: Following the settled view that retention or refund of sales tax/VAT incentive under an NPV scheme is not additional consideration for excisable goods, the Tribunal upheld the appellate order. The Revenue's appeal was dismissed.