TMI Tax Updates e-Newsletter
Apr 28,2026

GST incidence on works contract - Contractual reimbursement of taxes - Writ maintainability in contractual matters - Proof of payment -entitlement to reimbursement of the GST paid - Interest on delayed contractual reimbursement.

GST incidence on works contract - Post-appointed day contract - Taxes included in the bid - HELD THAT: - The Court held that the work order and the agreement were both issued after 01.07.2017, and therefore the tax incidence on the contract was governed by the CGST and TSGST enactments. Clause 42 of the agreement deemed the quoted rate to be inclusive of Central and State levies payable for performance of the contract. Section 142(10), which deals with supplies made after the appointed day under contracts entered into prior to that day, could not assist the petitioner; on the contrary, where the contract itself was entered into after the appointed day, the applicable tax was necessarily under the GST regime. The prior correspondence relied on by the petitioner could not override the executed agreement, especially when the claimed stipulation limiting tax liability to the earlier rate was not incorporated in the final agreement. [Paras 45, 46, 47, 48, 49]

The plea that the petitioner was liable to pay tax only at the pre-GST rate was rejected.

Contractual reimbursement of taxes - Absence of Schedule A - Proof of tax payment - Interest on delayed contractual reimbursement - HELD THAT: - The Court construed Clause 42.1 as conferring a right to reimbursement of Central or State taxes levied and paid by the contractor on completed items of work upon proof of payment. It held that the reference in the clause to Part-II of Schedule A could not be used by the respondents to defeat that right when no such part had been incorporated in the agreement drafted by the department. The clause was held to cover CGST and TSGST within the expression of Central and State taxes. On the evidentiary aspect, the Court found that the materials produced by the petitioner, including the GST returns and portal statements, showed payment of the claimed tax amount and that this was not disputed by the respondents. The refusal to reimburse despite the contractual stipulation was held to be arbitrary, illegal and violative of Article 14. Since Clause 89 enabled recovery of interest at 12% from the contractor where money was due to the department, the Court applied the same logic to hold the respondents liable to pay interest at 12% on the reimbursable amount from the respective dates of payment. [Paras 56, 60, 61, 62, 63]

The respondents were directed to reimburse the tax paid by the petitioner, after adjusting any amount already reimbursed, together with interest at 12% per annum from the respective dates of payment.

Writ maintainability in contractual matters - Arbitrariness in State action - HELD THAT: - The Court held that the objection to maintainability under Article 226 could not be accepted because the controversy did not involve disputed questions of fact and turned only on interpretation of Clauses 42 and 42.1 of the agreement. It reiterated that where the State acts arbitrarily even in contractual dealings, the High Court's jurisdiction under Article 226 is not ousted and relief can be granted on the facts of the case. [Paras 57, 58, 59]

The writ petition was held to be maintainable.

Final Conclusion: The Court held that the contract, having been entered into after the GST regime came into force, was governed by GST and not the earlier VAT rate. At the same time, under Clause 42.1, the petitioner was entitled to reimbursement of the CGST and SGST actually paid by him on proof of payment, with interest at 12% per annum from the respective dates of payment, after adjustment of any amount already reimbursed.

Benefit of the Notification No. 14/2022-Central Tax dated 05.07.2022, amending Rule 89(5) of the CGST Rules, 2017 - computation of refund under inverted duty structure - Inverted duty structure refund - Retrospective operation of curative amendment - Entitlement to refund of accumulated input tax credit arising from inverted tax structure under Section 54(3) - Composite Reading of Statute and Rules.

Inverted duty structure refund - HELD THAT: - The Court held that the legal position stood governed by the view taken in Ascent Meditech Ltd. v. Union of India [2024 (12) TMI 511 - GUJARAT HIGH COURT], which had attained finality, and accepted that the amendment brought by Notification No. 14/2022 to Rule 89(5) was required to be applied even to refund applications made prior to 5-7-2022. It found that the appellate authority failed to apply its mind to the effect of the notification and the clarification relied on by the petitioner, despite the prevailing legal position. On that basis, the reasons recorded in the appellate order for rejecting the refund claims were held unsustainable, and the petitioner was held entitled to refund under Section 54(3) on account of accumulation arising from the inverted rate structure. [Paras 16, 17]

The rejection orders were set aside and the petitioner was held entitled to refund of accumulated credit under the amended formula.

Final Conclusion: The petition was allowed. The Court quashed the original and appellate orders rejecting the refund claims and held that the petitioner was entitled to refund under Section 54(3) of the CGST Act on account of the inverted rate structure.

Show cause notice in FORM GST DRC-01 - Specification of proposed penalty - Procedural defect in adjudication- Principles of natural justice - HELD THAT: - The Court held that Rule 142 requires service of a summary notice in the prescribed statutory form, and the form itself contemplates disclosure of the amounts proposed towards tax, interest, penalty and other dues. Since FORM GST DRC-01 is the prescribed statutory form, the revenue could not be permitted to sustain a penalty demand only on the basis of recitals contained in an annexed detailed notice for which no statutory form is prescribed. The Court further held that clear specification in DRC-01 was necessary because, under Section 74(8), the noticee has a statutory right to conclude the proceedings by making payment of the stated tax, interest and the stipulated percentage of penalty within the prescribed time. Any ambiguity in the statutory form as to the proposed penalty therefore constituted a procedural defect that vitiated confirmation of penalty in the adjudication order. [Paras 13, 14, 15, 16, 17]

The adjudication order was set aside on account of the procedural defect, and the authority was permitted to issue a rectified notice specifying the exact demand of tax, penalty and interest and proceed afresh after granting opportunity to the petitioner.

Final Conclusion: The Court held that the proposed penalty had to be clearly specified in the statutory FORM GST DRC-01 and could not be supported solely by recitals in the annexed detailed notice. On that procedural ground, the impugned adjudication order was set aside and the authority was allowed to issue a rectified notice and complete the proceedings afresh.

Maintainability of second refund application - Technical rejection of refund claim - Inadvertent omission in refund claim - HELD THAT: - The Court held that Section 54(1) of the CGST Act does not create any bar against filing more than one refund application, particularly where a claim relating to a specific invoice or period was left out due to inadvertence. Once it was undisputed that the petitioner's application was filed within the prescribed period of two years, the refund claim was required to be treated as maintainable. In the absence of any specific statutory prohibition, the authority could not defeat the claim on a technical ground that the relevant month stood covered by an earlier application for a larger period. The Court further held that no principle analogous to res judicata could be imported into such refund proceedings so as to create an illusory bar, and that the proper officer ought to have considered the Gujarat High Court decision in Shree Renuka Sugars Limited Vs. State of Gujarat [2023 (7) TMI 938 - GUJARAT HIGH COURT] in its correct perspective. The rejection was therefore held to be flawed, and the application was directed to be restored for a fresh decision on merits in accordance with law. [Paras 11, 12, 13]

The impugned rejection was set aside and the refund application was restored to the authority for fresh adjudication on merits after hearing the petitioner.

Final Conclusion: The Court held that the refund claim could not be rejected as non-maintainable merely because an earlier claim had been made for a larger overlapping period, when the subsequent claim was within limitation and there was no statutory bar to a second application. The impugned order was quashed and the refund application was remitted for decision on merits, with all other contentions kept open.

Condonation of delay in statutory appeal - Sufficient cause- principles of natural justice - Delay of 25 days beyond the initial period for filing appeal - HELD THAT: - Section 107 (4) of the Act confers discretion to the Appellate Authority, to allow additional one month in case he/she is satisfied that the appellant was prevented by "sufficient cause" from presenting the appeal The statute, thus provides additional one month to file the appeal, and all the reasons satisfying the expression "sufficient cause” can be raised by the appellant, and the appellant authority is required to apply its mind on the reasons assigned for belatedly filing the appeal i.e beyond the period of 90 days.

The Court held that Section 107(4) confers discretion on the Appellate Authority to admit an appeal within the additional period of one month if the appellant was prevented by sufficient cause from presenting it within time. Since the appeal had been filed within that additional condonable period, the Appellate Authority was required to apply its mind to the explanation offered for the delay. The explanation based on overlapping statutory changes, procedural uncertainty and portal-related constraints was accepted as properly explaining the 25-day delay. The rejection of the appeal on limitation, without appropriately considering that explanation within the available discretionary period, was therefore unsustainable. [Paras 9, 10]

The order rejecting the appeal as time-barred was quashed, and the matter was remanded to the Appellate Authority for fresh consideration of the appeal on merits.

Final Conclusion: The writ petition was allowed. The Court held that the delay in filing the statutory appeal was supported by sufficient cause within the condonable period and directed the Appellate Authority to decide the appeal afresh on merits.

Applicable GST rate on works contract services supplied to U.P. Jal Nigam -Binding effect of appellate advance ruling - Perverse administrative order. - HELD THAT: - The Court held that the dispute was substantially legal, there being no factual dispute regarding execution of the work. It found that the Appellate Authority for Advance Ruling had already held that U.P. Jal Nigam was not a local authority entitled to the concessional rate and that the applicable GST rate was 18%; that determination had attained finality and, in view of Section 103, carried binding effect qua the Jal Nigam. The subsequent order rejecting the claim on the new footing that GST stood included in the contract, despite earlier release of GST at 12%, was found to be contradictory, arbitrary and based on fallacious reasoning. The plea regarding non-supply of documents was also rejected as the relevant material was already available with the authority. On that basis, the Court concluded that only 12% had been paid though 18% was payable, and the balance 6% had to be released. [Paras 11, 13, 14, 16, 17]

The order rejecting the claim was quashed, and U.P. Jal Nigam was directed to pay the balance 6% GST to the petitioner within four weeks.

Final Conclusion: The Court held that GST on the petitioner's work contract services was payable at 18% and that the contrary order of U.P. Jal Nigam was unsustainable. The impugned order was quashed and the respondent was directed to pay the differential 6% GST within four weeks.

Mandatory opportunity of hearing - Audi Alteram Partem - non-compliance with the mandatory requirement of granting personal hearing under Section 75(4) - Principles of natural justice. -HELD THAT: - The Court held that the petitioner's indication declining personal hearing in Form GST DRC-06 could not override the statutory mandate under Section 75(4). Once an adverse order was proposed, it was incumbent on the authority to grant the opportunity of further hearing before final adjudication. Since no such hearing was afforded, the order was passed in breach of the principles of natural justice and was therefore liable to be interfered with, without entering into the merits of the demand. [Paras 3, 4, 5]

The impugned order was quashed and the matter was remanded for fresh decision after giving opportunity of hearing within the time stipulated by the Court.

Final Conclusion: The writ petition was allowed on the ground that the adjudicating authority failed to comply with the mandatory requirement of granting personal hearing before passing the adverse order. The order was set aside and the matter was remanded for fresh adjudication after affording such hearing.

Exclusion of limitation period - cancellation of GST registration - Condonable delay in statutory appeal - Erroneous rejection of appeal as time-barred​​​​​​​ - HELD THAT: - The Court held that, in view of the Supreme Court's direction excluding the period from 15.03.2020 to 28.02.2022 for purposes of limitation in judicial and quasi-judicial proceedings, limitation for filing the appeal had to commence from 01.03.2022 and not from 01.01.2022, the date of the cancellation order. On that basis, the outer period of 120 days expired on 30.06.2022, whereas the appeal had been filed on 06.06.2022. The appeal thus fell beyond 90 days but within the additional condonable period under Section 107(4), and the appellate authority erred in proceeding on the footing that it had no discretion to consider condonation. Since the rejection rested on an incorrect computation of limitation, the matter required remand for consideration of the petitioner's reasons for delay within the condonable period, without any opinion on merits of the appeal or on sufficiency of cause. [Paras 8, 9, 10, 11]

The impugned appellate order was quashed, and the matter was remanded to the appellate authority to consider whether the delay beyond 90 days but within 120 days should be condoned and, if so satisfied, to hear the appeal on merits.

Final Conclusion: The Court held that the appeal had not crossed the maximum condonable period once the Supreme Court's exclusion of limitation was applied. The appellate order rejecting the appeal as time-barred was therefore set aside and the matter was remitted for consideration of condonation and further disposal in accordance with law.

Alternate Remedy - Delay Condonation - Statutory Appeal - Pre-deposit - HELD THAT:- The writ petition was disposed of by granting liberty to the petitioner to file a statutory appeal against the impugned order for the tax period 2020-21 within two weeks with the prescribed pre-deposit and an application for condonation of delay, and directing the appellate authority to consider the same in accordance with law, keeping in view that the petitioner had been pursuing the writ remedy.

Levy of GST on affiliation fees - Statutory regulatory function - Supply in the course or furtherance of business - Consideration and quid pro quo - grant of affiliation by a university constitutes a supply of service under the CGST Act, 2017 - exemption under Entry 66 of Notification No. 12/2017-Central Tax (Rate) - Purposive interpretation of exemption notification.

Whether or not the affiliation fee charged by a University, for grant of affiliation to its constituent college, is subject to levy of service Tax under CGST Act. - HELD THAT: - The Court held that affiliation is the indispensable statutory mechanism through which colleges are enabled to admit students, impart university education, present students for examinations and secure conferment of degrees. Such activity is an integral part of education and not an activity in the course or furtherance of business. The fee collected for affiliation is a compulsory statutory levy attached to discharge of regulatory functions and lacks the element of bargain or quid pro quo required for consideration. Construing section 7(1)(a) and section 7(1)(aa) harmoniously, the Court held that the business element is implicit even for clause (aa), and therefore affiliation does not become taxable merely because a fee is charged by the university to affiliated colleges. [Paras 24, 25, 26, 27, 42]

Affiliation was held to be a statutory and regulatory function, not a supply of service, and affiliation fees were held not to be consideration for any taxable activity.

Educational institution exemption - Services relating to admission or conduct of examination - Purposive interpretation - HELD THAT: - The Court construed Entry 66 purposively as a beneficial exemption intended to keep core educational functions outside the GST net. It held that affiliation is inseparably connected with admission of students, conduct of examinations, maintenance of academic standards and conferment of degrees, and therefore falls within services provided by an educational institution and within services relating to admission to, or conduct of examination by, such institution. The expression "relating to" was treated as of wide import. The Court further distinguished affiliation from accreditation, holding that affiliation is a mandatory statutory condition for lawful operation of colleges within the university system, whereas accreditation is a quality assessment process; consequently, the Delhi High Court decision in NBEMS was found inapplicable on facts and principle. [Paras 35, 38, 39, 42, 46]

The Court held that affiliation services are exempt under Entry 66 and rejected the contention that the exemption is confined only to services expressly named in a narrow sense.

Authority of law for levy - Executive clarification vis-a-vis statutory exemption - Locus standi - HELD THAT: - In Goa University vs. Joint Commissioner [2025 (4) TMI 1056 - BOMBAY HIGH COURT], a Division Bench of the Bombay High Court noted that, without the affiliation from the petitioner University, the constituent colleges are not permitted to admit students for the courses. Further, the examination is conducted by the Goa University, which in turn leads to award of degree to the students. It was held that, hence, the fee which are collected from the colleges are clearly covered by the Entry No. 66 of the exemption notification No. 12/2017-CT(R), dated 28.06.2017, and the activity of the Goa University in collecting the affiliation fee is exempt from GST and hence the fees collected by the Goa University is not liable to tax. The situation in the present case is analogous. We are in respectful agreement with the aforesaid view taken by the learned Division Bench of the Bombay High Court. Accordingly, we hold that the activity of the petitioner University in collecting the affiliation fee is exempt from GST and hence the affiliation fees collected by the petitioner University is not liable to tax.

Having held that affiliation is not a taxable supply and is in any event exempt, the Court concluded that executive circulars or clarifications treating affiliation as taxable could not override the statute or the exemption notification. The reliance placed by the revenue on the CBIC circular and on contrary authorities was therefore rejected. The Court also held that the university had locus to maintain the writ petition, since the demand had been raised against it and partial payment under protest did not deprive it of the right to challenge the legality of the levy. [Paras 39, 40, 42, 43, 47]

The levy and demand of GST on affiliation fees were held illegal and unsustainable; the show cause notice was quashed, and refund was directed subject to verification that the burden had not been passed on to students.

Final Conclusion: The Court held that affiliation granted by a university to its colleges is a statutory educational function, not a taxable supply, and that the affiliation fee is not consideration for any commercial service. In any event, such activity was held exempt under Entry 66 of Notification No. 12/2017-CT (Rate); accordingly, the proposed levy and demand were quashed, with refund directed subject to verification of non-passing on of the tax burden to students.

Requirement of arrangement in Section 10B (7) read with section 80IA (10) -comparing and adopting net profit margin of sister concern - non-market purchases or related-party transactions - determining reasonable/ordinary profits using comparables.

ITAT agreed that the assessee and its sister concern were in the same line of business under common management, and that the assessee had disclosed higher profits, therefore upheld the approach of the CIT(A) in using the sister concern as a benchmark and sustained the restriction of profits to about 19%, holding the adjustment to be reasonable and justified.

HELD THAT: - The Court held that Section 80-IA(10) requires findings of close connection, an arrangement between the parties, and that such arrangement resulted in more than ordinary profits. The Tribunal had not recorded any categorical finding as to any such arrangement and had restricted the deduction merely because the assessee, a 100% export oriented unit operating in the export market, showed a higher net profit than its sister concern operating in the domestic market.

Relying on Commissioner of Income Tax-7 vs. Schmetz India (P.) Ltd. [2012 (9) TMI 407 - BOMBAY HIGH COURT] the Court held that extraordinary profits alone cannot establish such an arrangement. It further held that amalgamation with the sister concern becoming effective only from the end of the relevant year did not by itself establish an arrangement within the meaning of Section 80-IA(10). The comparison adopted by the appellate authorities was legally untenable, since it ignored the material differences in statutory benefits and cost structures between an export oriented unit and a domestic concern, and no proper determination of ordinary or reasonable profit was made. [Paras 20, 21, 23, 24, 25]

The substantial question of law was answered in favour of the assessee, and the Tribunal's order restricting the Section 10B deduction on the basis of the sister concern's profit margin was quashed.

Final Conclusion: The appeal was allowed. The Court held that, in the absence of a proved arrangement producing more than ordinary profits and in the absence of a legally sustainable comparable, the assessee's deduction under Section 10B could not be curtailed by adopting the sister concern's profit margin.

Benefits of Section 115BAA concessional tax regime - delay in filing Form 10-IC u/s 119(2)(b) - Form 10-IC filing requirement - Scope of section 119(2)(b) -

HELD THAT:- The Court held that section 115BAA requires the declaration in Form 10-IC to be filed within the prescribed time, but does not make timely filing of the return u/s 139(1) a condition precedent for availing the concessional regime. The condition in the circular requiring the return to have been filed within section 139(1) could not justify rejection of the application for condonation. The Court further accepted that, even apart from the circular, the authority retained power to condone delay u/s 119(2)(b). In reaching this conclusion, the Court relied on Gem Nuts & Produce Exports Co. (P.) Ltd. [2025 (9) TMI 375 - BOMBAY HIGH COURT] [Paras 13]

The first ground stated in the impugned order for refusing condonation was rejected.

Genuine hardship - Bona fide delay - Liberal approach in first year of compliance - delay of 23 days in filing Form 10-IC - HELD THAT: - The Court found no reason to disbelieve the explanation that the delay occurred due to the COVID-19 pandemic and termination of employees in the Finance and Accounts Department. It also considered the subsequent filing of the return on the basis of draft accounts and draft tax computation as supporting the genuineness of the hardship. Having regard to the short duration of delay and the fact that A.Y. 2020-21 was the first year in which Form 10-IC was required for opting into section 115BAA, the Court held that a lenient and liberal view was warranted. This conclusion was supported by Rama Industries Ltd. [2026 (1) TMI 624 - BOMBAY HIGH COURT] [Paras 14, 15]

The delay of 23 days in filing Form 10-IC was condoned and the return was directed to be modified by applying section 115BAA.

Final Conclusion: The writ petition was allowed. The impugned order rejecting condonation was quashed, the delay in filing Form 10-IC for A.Y. 2020-21 was condoned, and the petitioner's return was directed to be modified so as to apply taxation under section 115BAA.

Penalty u/s 271D - violation of principles of natural justice, without granting opportunity of personal hearing through Video-Conferencing - HELD THAT:- The Court held that the earlier order had remanded the matter only to enable fresh hearing and required the respondent to complete the exercise of passing an order u/s 271D within 12 weeks from receipt of that order.

It was undisputed that the prescribed period had expired and no final order had been passed. Department had also not sought any extension of time from the Court. Mere issuance of show-cause notices within or after that period did not satisfy compliance with the remand direction, particularly when the petitioner had repeatedly sought hearing and no effective response was given.

On that sole ground of non-compliance with the Court's binding time direction, the reinitiated proceedings could not be sustained. [Paras 6]

The show-cause notices issued in continuation of the remand were quashed and set aside, and the writ petition was allowed.

Final Conclusion: The Court held that the respondents failed to comply with the earlier remand direction requiring completion of the exercise within 12 weeks and had not obtained any extension of time. The impugned show-cause notices issued in the reinitiated penalty proceedings were therefore quashed and the petition was allowed.

Validity of reassessment after approval of resolution plan - Extinguishment of tax dues under approved resolution plan - Binding effect of resolution plan on statutory claims

HELD THAT: - The Court examined the approved resolution plan and found that it expressly contemplated waiver and extinguishment of all tax liabilities, including assessed and unassessed liabilities, of the corporate debtor for the period prior to approval.

Applying the law declared in Committee of Creditors of Essar Steel India Ltd. Through Authorised Signatory Vs. Satishkumar Gupta and Others [2019 (11) TMI 731 - SUPREME COURT] and Ghanshyam Mishra and Sons Pvt. Ltd. Through Authorised Signatory Vs. Edelweiss Asset Reconstruction Company Ltd., through the Directors & Ors. [2021 (4) TMI 613 - SUPREME COURT] the Court held that once a resolution plan is approved under Section 31 of the IBC, claims not forming part of the plan stand extinguished and proceedings in respect of such prior claims cannot be continued. On that legal position, the reassessment order and notice issued after approval of the resolution plan were without occasion in law, and the merits of the reassessment became academic. [Paras 7, 10, 11]

The impugned order u/s 148A(d) and notice u/s 148 were quashed.

Final Conclusion: The Court held that, upon approval of the resolution plan, all prior tax liabilities not surviving under the plan stood extinguished and could not be pursued through reassessment. The reassessment order and notice issued for Assessment Year 2018-19 were therefore set aside.

Reassessment on third-party seized material - seized material Live nexus with assessee or not? - Information suggesting escapement of income - seized material must “pertain to” or “relate to” the assessee - notice issued for reopening on the basis of an entry in a broker's seized inquiry register

HELD THAT: - The Court found that the sole material relied upon was an inquiry register entry dated 10.03.2019, whereas the petitioner's purchase was made nearly twenty-three months later. In the light of the broker's own statement that the register contained details of lands available for sale, the entry could at best reflect an asking rate in the market and not an actual transaction executed by the petitioner.

The Court further held that the entry related to multiple survey numbers and a much larger area than the land actually purchased by the petitioner, and that the name appearing in the register was of another person with whom no inquiry was made. In these circumstances, the survey number by itself did not furnish the required live nexus between the seized document and the petitioner, and the presumption sought to be drawn from the register could not sustain reopening under Section 148. [Paras 9, 10, 11, 12, 13]

The reopening proceedings were held to be based on conjectures and surmises, and the notice u/s 148 was quashed.

Final Conclusion: The Court held that the seized inquiry register entry had no direct or indirect connection with the petitioner and could not constitute valid information for reopening. The writ petition was allowed and the notice issued under Section 148 for assessment year 2021-22 was quashed.

Unaccounted production of Unit Vapi - substantial question of law - seized material and the comparison of production and sales records - HELD THAT: - The Court upheld the concurrent findings of the CIT(A) and the Tribunal that the addition had been founded on an erroneous comparison of unlike units, namely tablets/capsules shown in the production charts and strips reflected in the sales records.

It accepted that the difference alleged by the AO arose from treating the number of tablets/capsules as if they were strips, which rendered the computation unsustainable. The Court also noted the absence of supporting material showing excess raw material purchases, unaccounted manufacturing expenditure, or receipt of unaccounted sale proceeds even after search, and held that the Revenue's grievance was purely factual. [Paras 15, 16]

No infirmity was found in the concurrent factual findings, and the appeal was dismissed as raising no substantial question of law.

Final Conclusion: The High Court held that the Tribunal's affirmation of deletion of the addition for alleged unaccounted production rested on concurrent factual findings and absence of corroborative material. The tax appeal was therefore dismissed for want of any substantial question of law.

Validity of reopening of assessment as barred by limitation -Limitation for reassessment pursuant to search - Computation of ten-year block under search assessment provisions - Inclusion of search assessment year

Whether, while computing the ten-year block, the assessment year relevant to the previous year in which search is conducted (“the search assessment year”) is to be included in the reckoning, unlike the computation of six assessment years which expressly excludes it? - HELD THAT: - The Court held that Section 153A prescribes two distinct computational regimes. The six-year block is governed by the expression "immediately preceding" the assessment year relevant to the previous year of search, which excludes the search assessment year. The extended ten-year block in Explanation 1, however, is to be computed "from the end of the assessment year" relevant to the previous year in which the search is conducted, and this formulation necessarily includes the search assessment year as the first year in the reckoning. The Court rejected the Revenue's attempt to apply the six-year exclusion model to the ten-year computation, holding that such an approach would render the statutory language otiose and collapse two consciously distinct legislative formulations into one.

Applying that interpretation, where the search fell in Financial Year 2024-25, Assessment Year 2025-26 became the first year and Assessment Year 2016-17 the tenth year; consequently, Assessment Year 2015-16 fell beyond the permissible ten-year period and the impugned notice was without jurisdiction. [Paras 13, 14]

The impugned notice u/s 148 for Assessment Year 2015-16 was quashed as time-barred.

Final Conclusion: The Court held that for the extended ten-year period under the search assessment framework, the assessment year relevant to the previous year of search is to be included in the computation. On that basis, the notice issued under Section 148 for Assessment Year 2015-16 was beyond limitation and was quashed.

Appellate adjudication on merits - Consideration of irrelevant factors - Tribunal justification in dismissing the assessee's appeal without deciding the grounds on merits - HELD THAT: - The Court found that the Tribunal had not entered into the merits of the controversy arising from the order of the CIT(A), though that order had dealt with the grounds raised by the assessee. Instead, the Tribunal allowed itself to be influenced by the length of time taken by the CIT(A) to dispose of the appeal. The Court held that this approach overlooked the surrounding circumstances, including the disruption and backlog caused during the Covid-19 period, and therefore the delay by itself could not furnish a valid basis to dispose of the appeal without adjudicating the substantive grounds. Since the Tribunal decided the matter on a basis not constituting the merits of the appeal, its order could not be sustained. [Paras 4, 5, 6, 7]

The Tribunal's order was set aside and the matter was remanded for fresh decision on merits after due consideration of all grounds raised by the assessee.

Final Conclusion: The appeal was allowed. The order of the Tribunal was set aside and the matter was remanded to the Tribunal for fresh disposal on merits in accordance with law.

Rejection of books of account - gross profit estimation - Survey surrender of excess stock - Closing stock valuation - Related party purchases - Quantitative stock details

HELD THAT: - Adhoc adoption of GP rate for determining the income of the Assessee. The GP rate obviously cannot remain the same for post survey and pre-survey period as the prices of the products fluctuate periodically based on market conditions and there cannot be any uniform pricing mechanism or uniform gross profit rate that could be maintained throughout the year. No doubt, the survey conducted by the revenue did fetch additional income from the side of the Assessee to the exchequer which had been duly disclosed at the time of survey and considered in the return filed after the survey.

Obviously the Assessee would have to bring the additional stock found in the survey in its books and the said stock would get included in the closing stock, if not sold, at the lower of cost or market price in accordance with Accounting Standard -2 (AS-2) issued by the Institute of Chartered Accountants of India (ICAI) which is in accordance with generally accepted accounting principles. Hence there is no question of making any estimate of gross profit on an adhoc basis by the revenue.

Final Conclusion: The Tribunal allowed the appeal, holding that the books of account could not be rejected on the reasons stated by the Revenue and that the consequent addition based on ad hoc gross profit estimation in relation to surrendered excess stock was not sustainable.

Rejecting books of account u/s 145(3) - Gross profit estimation - Best judgment assessment- HELD THAT:- Appellant is indeed very fair in not challenging the rejection of his books of account u/s 145(3) in both the lower proceedings. So far as AO’s re-estimation of GP is concerned, he adopted M/s. Gardenia Infra LLP as a comparable entity to adopt GP @ 17.5% in the assessee’s case. This comparable admittedly has been partly interfered with in the CIT(A)’s detailed discussion.

We are of the considered view in this factual backdrop that the assessee’s GP estimation @ 8% regarding M/s. Pandit Homes as against that declared @ 5.75% would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.

Assessee’s GP estimation regarding its receipt from M/s. Bankey Builders and Developers is concerned, he has declared GP @ 11.92% which followed its re-estimation @ 17.5% in assessment order finally culminating in its reduction to that @ 7.5% in the CIT(A)’s lower appellate discussion. Meaning thereby that the same admittedly is already less than that declared which hardly calls for any interference on our part.

Final Conclusion: The appeal was partly allowed. Tribunal restricted the gross profit estimation for receipts from M/s. Pandit Homes to 8% and declined to interfere with the position relating to Sri Bankey Bihari Builders and Developers.

Penalty u/s 271(1)(b) - non-appearance before AO - Penalty for failure to comply with statutory notice - Reasonable cause for non-compliance with notice u/s 273B

HELD THAT: - The Tribunal held that the assessee's explanation disclosed a reasonable cause within the meaning of section 273B. It accepted that the assessee was not a regular taxpayer, was unaware of the income-tax proceedings and portal-related compliance, and came to know of the ex parte assessment only after the demand was raised.

Tribunal also noticed that, in the quantum appeal, the matter had already been restored to the AO - On these facts, it concluded that the defaults in responding to the three notices were sufficiently explained and that penalty under section 271(1)(b) could not be sustained. [Paras 7, 8]

The penalty was directed to be deleted.

Final Conclusion: The Tribunal allowed the appeal and held that the assessee had shown reasonable cause for the non-compliance with the notices. Consequently, the penalty imposed under section 271(1)(b) was deleted.

Bogus purchases - Profit estimation without rejection of books - Unexplained expenditure - Cessation of liability

Bogus purchases - Profit estimation without rejection of books - Quantitative stock records - Unexplained expenditure - additions made by applying 8% on the alleged bogus and unsubstantiated purchases - HELD THAT: - The Tribunal held that the additions were founded only on suspicion. The purchases had corresponding GST information, and mere subsequent cancellation of sellers' GST registration, non-response to notices, or denial by sellers did not by itself dislodge the genuineness of transactions undertaken earlier. The assessee had produced quantitative records of opening stock, purchases, sales and closing stock, along with movement and payment evidence, and none of these were found defective. In such circumstances, and particularly when the assessment had been completed under section 143(3) without rejection of books or any finding that the disclosed gross profit was unreasonable, estimation of profit at 8% was impermissible. The Tribunal also distinguished the authorities cited by the Revenue on the ground that, in the present case, the assessee had furnished material dispelling the suspicion and the quantitative and book results had been accepted. [Paras 8, 9, 10, 11, 12]

The estimated additions on both sets of purchases were deleted, the assessee's grounds on this aspect were allowed, and the Revenue's grounds were rejected.

Cessation of liability - Ledger reconciliation - Documentary evidence - The addition made on account of alleged excess liability shown in the ledger balance of M/s Jain Sons India - HELD THAT: - The Tribunal found that the assessee had supported the ledger balance with invoices and bank payments, and once such material was produced the tax authorities were obliged to examine it. The ledger account and bank entries were on record, but no factual finding contrary to that documentary evidence had been recorded. In the absence of such examination and adverse finding, the allegation that the difference remained unreconciled could not sustain the addition. [Paras 12]

The addition on account of the alleged difference in ledger balance was deleted.

Final Conclusion: The Tribunal deleted all the impugned additions. The Revenue's appeal was dismissed and the assessee's appeal was allowed.

Disallowance of commission expenses - Addition u/s 37(1) -basis for disallowance of commission treating it to be excessive

HELD THAT:- The Tribunal held that the assessee had established the need for services, the actual rendition of services, and the payment of commission through documentary material. The recipient had confirmed on oath the services rendered and the receipt of commission through banking channels after deduction of tax at source, and the amount had also been offered to tax by the recipient. The Tribunal further noted that similar underwriting commission paid to the same party in the immediately preceding assessment years had been accepted in scrutiny assessments. In these circumstances, there was no basis to treat part of the commission as excessive and disallow it. [Paras 5].

Final Conclusion: The Tribunal held that the commission payment was duly supported by evidence of services rendered and actual payment, and that the partial disallowance as excessive was unjustified. The appeal was accordingly allowed.

Reopening of assessment - Reason to believe - Tangible material - allegation that the assessee earned fictitious profits from currency derivative transaction -Third-party material and cross-examination - Addition u/s 69A

Reopening of assessment - Reason to believe - Tangible material - recorded reasons alleging fictitious profits from currency derivative transactions - A.Y. 2014-15 - HELD THAT: - The Tribunal found that the allegation of fictitious profits from currency derivative transactions formed the sole foundation of the reopening. The assessee had specifically stated during reassessment that no such currency derivative transactions were carried out in the relevant year and had also placed supporting documents on record. Against this, the AO brought no independent or verifiable material to establish that the assessee had in fact entered into such transactions. Even the enquiries made from the stock exchanges yielded no adverse material. The recorded reasons were therefore held to be based on general information and assumptions, without the requisite live nexus between tangible material and the belief of escapement of income. [Paras 13, 14, 15, 16, 17]

The assumption of jurisdiction u/s 147 for A.Y. 2014-15 was quashed, and the consequential reassessment order was set aside; the grounds on merits were left academic.

Reopening of assessment - Reason to believe - Application of mind - A.Y. 2015-16 - allegation of accommodation entry receipts - HELD THAT: - The Tribunal held that the reasons recorded merely reproduced the alleged modus operandi of the entry operator group and contained a general allegation that the assessee was a beneficiary, without specific and independent material demonstrating the exact transaction and its linkage with the assessee. The assessee had categorically denied any transaction with the persons or entities named in the reasons and relied on audited financial statements, tax audit report and loan details, which did not reflect such dealings. This denial was not rebutted by any cogent material. The Assessing Officer was found to have proceeded only on investigation findings, without independent enquiry or verification. On that basis, the Tribunal held that the recorded reasons suffered from vagueness, lack of application of mind and absence of tangible material. [Paras 28, 29, 30, 35]

The assumption of jurisdiction under section 147 for A.Y. 2015-16 was held to be vitiated in law.

Unexplained money u/s 69A - Burden of proof - Addition sustained on third-party statements and seized digital material but without cross-examination - HELD THAT: - The Tribunal held that the addition was fundamentally based on statements of third parties, affidavits of alleged dummy directors and digital data seized from another person, but no opportunity of cross-examination had been afforded to the assessee. The assessee, on the other hand, had produced documentary evidence showing that the transactions were through banking channels, recorded in the books and supported by invoices and exchange-based records, and no defect was pointed out in those materials. The Tribunal further held that section 69A was wrongly invoked because the provision requires establishment that the assessee was the owner of unexplained money not recorded in the books, whereas the transactions in question were routed through disclosed bank accounts and reflected in the books. In that situation, reliance on human probabilities and circumstantial evidence was held insufficient in the absence of primary evidence proving accommodation entries. [Paras 32, 33, 34, 35, 36]

The addition made under section 69A for A.Y. 2015-16 was deleted.

Final Conclusion: Both appeals were allowed. The reassessment for A.Y. 2014-15 was annulled for want of valid jurisdiction, and for A.Y. 2015-16 the Tribunal held the reopening invalid and also deleted the addition under section 69A on merits.

Diversion of income by overriding title - Application of income - Deduction of expenditure against income from other sources - Deduction under section 80P(2)(d) on belated return

Diversion of income by overriding title - interest of Fixed Deposit and interest income - Application of income - Income from other sources - HELD THAT: - The Tribunal held that the doctrine of diversion of income by overriding title applies only where a superior legal right in a third party diverts the income before it accrues to the assessee. Here, the maintenance deposits were received and controlled by the assessee, the interest accrued in its name, and no enforceable third-party claim existed at the stage of accrual. The clauses in the sale deed and co-developer agreement merely indicated the purpose for which the funds were to be used and did not create any overriding legal charge. The use of the interest for maintenance was therefore only an application of income after accrual. On that footing, the interest was rightly assessed under the head income from other sources. [Paras 7]

The addition of the interest income under section 56 was upheld and grounds 2 and 3 were dismissed.

Deduction of expenditure against income from other sources - Direct nexus test - Maintenance and administrative expenditure claimed by the assessee allowability as deduction against the interest income assessed under the head income from other sources - HELD THAT: - The Tribunal held that deduction was admissible only if the expenditure was laid out wholly and exclusively for earning the interest income. The interest arose from investment of funds in fixed deposits and advances, whereas the claimed expenditure related to maintenance of property, common amenities and administrative functioning of the society. Since there was no direct and exclusive nexus between that expenditure and the earning of the interest income, the statutory condition for deduction was not satisfied. [Paras 8]

The disallowance of the expenditure claimed against the interest income was sustained and ground 4 was dismissed.

Deduction u/s 80P(2)(d) on belated return - Claim in return filed under section 139(4) - deduction denied solely because the return was filed under section 139(4) and not within the due date u/s 139(1) - HELD THAT: - Following the coordinate Bench decision in Lunidhar Seva Sahkari Mandali Ltd. [2023 (2) TMI 1012 - ITAT RAJKOT] the Tribunal held that the claim under section 80P could not be rejected only on the ground of delayed filing of the return under section 139(1), where the return had been filed within the permissible time under section 139(4). On that basis, the Tribunal directed the jurisdictional Assessing Officer to grant the deduction under section 80P(2)(d) after affording one more opportunity of hearing to the assessee. [Paras 9]

Ground 5 was partly allowed and the Assessing Officer was directed to grant deduction under section 80P(2)(d) after giving the assessee an opportunity of hearing.

Final Conclusion: The Tribunal upheld the assessment of the interest receipts as income from other sources and confirmed the disallowance of the claimed expenditure against such income. It, however, directed grant of deduction under section 80P(2)(d) after giving the assessee an opportunity of hearing, and the appeal was partly allowed.

Publication of delegated legislation - Benefit of the Notification No.02/2026-27 - goods already landed at Ahmedabad Airport before the notification was digitally signed and promulgated - Electronic Gazette notification - Prospective operation of import restriction notification - HELD THAT:- The Court held that under Sections 3(2) and 5 of the Foreign Trade (Development and Regulation) Act, 1992, a notification regulating imports acquires enforceability only upon publication in the Official Gazette in the manner prescribed by law. Publication is not a formality but the event by which delegated legislation comes into force. In the case of an electronically published notification, the effective time is the time of its digital signing and publication in the e-Gazette. Since the notification was digitally signed and published at 22:46:52 hours on 02.04.2026, whereas the goods had arrived at Ahmedabad Airport at 00:15 hours on the same date, the notification could not operate retrospectively so as to affect goods which had already landed prior to its promulgation. The clause in the notification excluding transitional arrangements and making the restriction immediately applicable could operate only from the time the notification came into legal existence, and not earlier. [Paras 10, 11, 13, 15]

The respondents were not justified in insisting on import authorisation for the petitioners' consignment, and were directed to assess, clear and grant out-of-charge to the goods subject to other formalities.

Final Conclusion: The writ petition was partly allowed. The Court held that the impugned import restriction could operate only from the time of its valid electronic publication and, therefore, could not be applied to the consignment that had already arrived before such publication.

Anti-dumping duty - imports of Titanium Dioxide from China - Quashing of parent notification - Refund of duty - HELD THAT: - The Court recorded that issuance of the departmental instruction was undisputed and that it had been issued in view of the decision in India Paint Association vs. Union of India & Ors. [2025 (9) TMI 1477 - CALCUTTA HIGH COURT], by which Notification No. 12/2025-Customs (ADD) dated 10.05.2025 levying anti-dumping duty on imports of Titanium Dioxide from China had been quashed. Since the petitioner's liability arose under that very notification, the order-in-original founded on it was held liable to be quashed, and the duty already collected was directed to be returned. [Paras 4, 5]

The impugned order-in-original was quashed and the respondents were directed to refund the duty collected within twelve weeks.

Final Conclusion: The writ petition was allowed. In view of the quashing of the anti-dumping duty notification and the subsequent departmental instruction, the order imposing such duty on the petitioner was set aside and refund of the collected amount was directed.

In-situ promotion and adjudicatory capacity - Statutory appellate forum - Appellate remedy under Section 129A - Whether in the facts and circumstances of the case, the Hon’ble CESTAT is right in holding that the Order-in-Original passed by Commissioner (in-situ) was passed in the capacity of Commissioner, when another officer was already working as Commissioner and head of Customs Commissionerate, Kandla on the date of passing of Order-in-Original by the Commissioner (in-situ) who was adjudicating the case in the capacity of the Additional Commissioner. - HELD THAT: - By the Office Order No. 103 of 2023 dated 06.07.2023, the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, promoted Shri Ram Het Meena to the post of Commissioner of Customs and Indirect Taxes.

The regular posting of Shri Ram Het Meena was to be made in due course with the approval of the Competent Authority and till then, it was directed that he shall assume the charge of the promotional post insitu (as is where is) basis. Thus, Shri Meena who has passed the Order-in-Original dated 25.07.2023 was given the charge of promotional post of Commissioner of Customs till regular posting. The respondent department never raised any objection during the adjudicating proceedings, and also when he passed the order dated 25.07.2023, but gained wisdom after the order was passed by the CESTAT, and filed a rectification application.

The Court found that, by the office order of promotion, the officer had already been promoted to the post of Commissioner and was directed to assume charge of the promotional post on in-situ basis until regular posting. On that basis, the Order-in-Original passed thereafter was held to have been made by him as Commissioner. The Court further held that, once the order was one passed by the Commissioner as adjudicating authority, the statutory remedy was under Section 129A before the CESTAT. A contrary indication in the caption of the Order-in-Original referring to appeal before the Commissioner (Appeals) could not override the statute or alter the true character of the order. [Paras 7, 8, 10]

The substantial question of law was answered in favour of the respondent, and the CESTAT was held to have rightly entertained the appeal.

Final Conclusion: The High Court held that the officer, having been promoted as Commissioner and directed to hold the promotional post on in-situ basis, validly passed the Order-in-Original as Commissioner. Consequently, the appeal was maintainable before the CESTAT under Section 129A, and the tax appeal of the department was dismissed.

Scope of power to debar a G-Card holder - Restoration of licence - Self-incriminatory statement​​​​​​​ - Penalty ceiling for G-Card holder under CBLR - Nexus with Customs Broker in disciplinary proceedings.

Scope of power to debar a G-Card holder - HELD THAT: - The Tribunal held that the obligations invoked under the CBLR were those cast upon a Customs Broker, whereas the export documents did not mention the Customs Broker firm and the department failed to establish any connection between the Customs Broker and the impugned exports. Though the record showed that the appellant, acting in his individual capacity, had aided the fraudulent exports, Regulation 18 was silent on revocation of a G-Card, and Regulation 17 permitted only debarment by the Deputy Commissioner or Assistant Commissioner for six months. Since the appellant had already remained debarred beyond the period contemplated by law, restoration of the G-Card was warranted. [Paras 4, 5, 6]

The direction revoking the G-Card was modified, and the appellant's G-Card was directed to be restored.

Penalty ceiling for G-Card holder under CBLR - HELD THAT: - The Tribunal read Regulation 18 as drawing a distinction between penalty on a Customs Broker or F-card holder and penalty on a G-card holder. Under sub-regulation (2), the maximum penalty imposable on a G-card holder is ten thousand rupees. Since the appellant was a G-Card holder, the higher penalty imposed by the Commissioner could not be maintained and had to be confined to the statutory cap. [Paras 3, 4, 6]

The penalty was modified and restricted to Rs.10,000/-.

Final Conclusion: The Tribunal modified the impugned order by restoring the appellant's G-Card and reducing the penalty to the amount statutorily permissible for a G-Card holder. The appeal was accordingly disposed of.

Revocation of Customs Broker licence - imposition of penalty - Proof of Customs Broker's involvement in impugned shipments - Substantive evidence for penal consequences - violation of Regulation 10 of the CBLR, 2018 - Denial of cross-examination.

Revocation of Customs Broker licence - HELD THAT: - The Tribunal held that the allegation against the appellant rested essentially on the statement of a G-Card holder, whereas the export documents themselves showed the shipments as having been filed by the exporters themselves. Since the Shipping Bills constituted the primary documentary evidence on the identity of the Customs Broker handling the consignments, and there was no authoritative material connecting those shipments with the appellant, the findings of breach of Regulation 10(d), (e), (i), (n) and (q) were held to be unfounded. In the absence of substantive evidence associating the appellant with the shipments or showing knowledge of the fraudulent exports, revocation, forfeiture and penalty could not be sustained. [Paras 8, 10, 12, 14]

The revocation of licence, forfeiture of security deposit and penalty imposed on the appellant were set aside.

Mandatory timelines in CBLR inquiry - Regulation 17 compliance - HELD THAT: - Though the appellant contended that the inquiry report was beyond the prescribed period, the Tribunal found from the record that the inquiry officer had in fact prepared and submitted the report within the statutory prescription, and that the adjudicating authority proceeded after giving the appellant the prescribed opportunity to respond. On that basis, the process was held not to be in violation of the legal requirements of Regulation 17. [Paras 12]

The challenge founded on non-adherence to the prescribed timelines was rejected.

Cross-examination - Natural justice - HELD THAT: - The Tribunal recorded that the appellant's request for cross-examination did not fructify because the appellant failed to indicate the person sought to be cross-examined. In that situation, the plea of denial of natural justice was held to be unavailable to the appellant. [Paras 13]

The objection based on denial of cross-examination was not accepted.

Final Conclusion: The appeal was allowed on the ground that there was no substantive evidence linking the appellant Customs Broker with the impugned export shipments or establishing knowledge of the alleged fraud. The procedural objections relating to timelines and cross-examination were rejected, but the impugned order could not survive on merits.

Procedural lapse in import compliance - delayed submission of SIMS and LMPC certificates - Redemption fine and penalty proportionality - Penalty for false declaration - absence of evidence of knowing or intentional use of false or incorrect documents or statements.

Procedural lapse in import compliance - HELD THAT: - The Tribunal found that the Bill of Entry had been filed without the prescribed SIMS and LMPC certificates and that there was thus non-compliance with the applicable import conditions. However, as both certificates were subsequently produced, the lapse was treated as procedural and not as one affecting the substantive character of the import. The Tribunal further held that the delayed submission showed absence of mala fide intent or intent to evade, and therefore the redemption fine and penalty required moderation having regard to the nature of the breach. [Paras 6, 7, 9, 10]

Redemption fine was reduced to Rs. 1,00,000/- and penalty under section 112(a)(i) was reduced to Rs. 50,000/-.

Penalty for false declaration - Knowledge and intent requirement - HELD THAT: - The Tribunal held that section 114AA is attracted only where false or incorrect documents or statements are knowingly or intentionally used in customs transactions. On the record, no evidence had been led by the Revenue to establish any such knowing or intentional false declaration. Since the case itself was treated as involving only a technical lapse, the statutory requirement for penalty under section 114AA was not satisfied. [Paras 8, 9, 10]

Penalty imposed under section 114AA was set aside.

Final Conclusion: The Tribunal held that the delayed filing of the SIMS and LMPC certificates amounted to a procedural lapse without mala fide intent. On that basis, it reduced the redemption fine and the penalty under section 112(a)(i), and set aside the penalty under section 114AA.

Extended period of limitation-Suppression of facts - Duty demand under invalidated DFIA imports - Show cause notice issued more than two years after the imports. - HELD THAT: - The Tribunal found that the imports were effected on 17.05.2011, while the show cause notice was issued only on 26.11.2014, beyond the normal period prescribed under Section 28 of the Customs Act, 1962. It further found that the notice contained no allegation of suppression of facts and that the impugned appellate order also contained no discussion on limitation. Since no material was placed on record to establish suppression of facts, much less suppression with intent to evade duty, the extended period could not be invoked. On that basis, the demand was held to be unsustainable. [Paras 7, 8]

The demand having been confirmed without any basis for invoking the extended period of limitation, the impugned order was held unsustainable and the appeal was allowed on limitation.

Final Conclusion: The Tribunal allowed the appeal solely on limitation, holding that the extended period could not be invoked in the absence of any allegation or proof of suppression of facts with intent to evade duty. The duty demand and the impugned order were therefore set aside.

Classification of goods - Extraneal Peritoneal Dialysis Solution with 7.5% Icodestrin - correctly classifiable under CTH 9018 Or not - Binding precedent in assessee's own case.

Classification. - HELD THAT:- The Tribunal found that the very same product and identical classification dispute had already been considered in the appellant's own case by the Bench, which had followed the decision of the Supreme Court and held the classification under CTH 9018. It further held that the attempt in the impugned order to distinguish the earlier appellate order was untenable, since that earlier order had already examined the relevant facts and recorded a clear finding supporting classification under CTH 9018. Noting also that Delhi and Kolkata Benches had taken the same view, the Tribunal held that the controversy was no more res integra. [Paras 4, 5, 6]

The contrary classification adopted in the impugned order was rejected and the appeal was allowed.

Final Conclusion: The Tribunal held that the imported peritoneal dialysis solution was correctly classifiable under CTH 9018, following the settled position in the appellant's own case. The impugned appellate order was set aside and the appeal was allowed with consequential benefits according to law.

Demand of Special Additional Duty of Customs on the imported silk fabrics - Withdrawal of exemption on date of import - Short-levy - Provisional assessment and demand under Section 28. - HELD THAT: - The Tribunal found that, on the date of import, the change in law effective from 08.04.2011 had already removed the exemption earlier claimed under Notification No.20/2006-Cus., and therefore the importer was liable to pay 4% SAD. It held that the scheme governing refund of SAD required prior payment of the duty and a later refund claim, so a plea based on exemption from VAT in one State could not justify non-payment of SAD at the time of import, particularly when the imported goods could be sold anywhere in India. The Tribunal further held that the provisional assessment dispute related only to CVD and had no bearing on the levy of SAD, and hence the objection to a demand under Section 28 lacked merit. [Paras 7, 8, 9]

The demand of 4% SAD was upheld and the appeal was dismissed.

Final Conclusion: The Tribunal held that the exemption from 4% SAD had already stood withdrawn on the date of import, that refund of SAD could arise only after payment, and that the plea of provisional assessment in relation to CVD did not affect the SAD demand. The impugned order was therefore sustained and the appeal dismissed.

Ore versus concentrate - Benefit of exemption from CVD under Notification No. 04/2006-CE - Deeming fiction of manufacture- deeming provision - strict construction of exemption - burden of proof - Imported manganese ore subjected to washing, removal of waste and sizing remained eligible for exemption as ore or stood excluded as concentrate. - HELD THAT: - The Tribunal followed its earlier decision in M/s Sarda Energy & Minerals Ltd & Ors Vs CC, Visakhapatnam [2026 (1) TMI 532 - CESTAT HYDERABAD] on similar facts and held that, in the light of Chapter Note 4 to Chapter 26 and the HSN explanation, processes undertaken on ROM ore resulting in removal of foreign matter and improvement of usability or quality lead to emergence of concentrate as a distinct excisable product. Since the imported goods had admittedly undergone washing, removal of waste and sizing before shipment, they could not be treated as mere ore for the purpose of Notification No. 04/2006-C.E. The exemption being confined to ores, the benefit was therefore unavailable. [Paras 10, 12]

The imported goods were held to be manganese concentrates and not manganese ore, and the claim for exemption from CVD was rightly denied.

Final Conclusion: Following its earlier decision on the same legal issue, the Tribunal held that manganese ore subjected to the stated processes had become concentrate and was outside the scope of the exemption meant for ores. The appeal was therefore dismissed.

Rejection of the resolution plan and direction to re-run the CIRP - non-disclosure and handling of avoidance or PUFE transactions, non-compliance with CIRP Regulations, and inadequacy in the conduct of the process - Transparency and fairness in CIRP process - Performance security compliance - Commercial Wisdom of the CoC - Maximisation of Value of Assets - Performance Security - Material Non-Compliance - Limited Appellate Interference -HELD THAT: - The Appellate Tribunal held that the challenge founded on the commercial wisdom of the Committee of Creditors could not succeed because the rejection of the plan rested on material non-compliances affecting the integrity of the CIRP itself. The record showed that although a transaction auditor had identified substantial transactions requiring action, the contents and quantification of that report were not properly placed before the Committee of Creditors, and the plan nevertheless proceeded on the footing that the successful resolution applicant would pursue the avoidance proceedings and share recoveries with creditors. The Tribunal accepted the Adjudicating Authority's view that the process had not been conducted in a transparent and fair manner, that the pendency and implications of avoidance proceedings had not been properly dealt with, and that other prospective applicants were thereby deprived of material information which could have affected the plans submitted. On that basis, no infirmity was found in the conclusion that the plan, though approved by the Committee of Creditors, was not fit for approval. [Paras 7, 8, 9, 10, 14]

The rejection of the resolution plan was upheld and the successful resolution applicant's appeal was dismissed.

Performance security compliance - HELD THAT: - The Appellate Tribunal noted that the Adjudicating Authority had given a self-speaking order on the lapses in the conduct of the CIRP, including failure to timely and properly deal with avoidance applications and non-compliance relating to the full performance security. The explanation of the erstwhile resolution professional that he was working within strict timelines and had acted diligently was found unsatisfactory in light of the several non-compliances already recorded. Since the Tribunal concurred that the CIRP had not been carried out in a transparent and fair manner and in accordance with the Code and the Regulations, the challenge to the adverse remarks and consequential action against the resolution professional failed. [Paras 12, 13, 14]

The erstwhile resolution professional's appeal was dismissed, and the direction for investigation into his conduct was maintained.

Final Conclusion: The Appellate Tribunal found no ground to interfere with the impugned order, holding that the CIRP had not been conducted in a transparent and fair manner and that the process suffered from material non-compliances under the Code and the Regulations. Both appeals were dismissed, and the direction to investigate the conduct of the resolution professional was continued.

Admissibility of claims in liquidation - Claims under Section 7A, 7Q and 14B, arising from orders passed after the liquidation commencement date - Provident fund dues arising subsequent to liquidation commencement - HELD THAT: - The Appellate Tribunal held that, under the statutory scheme governing liquidation, only those claims which exist as on the liquidation commencement date can be entertained by the liquidator. Even if assessment or determination may proceed in liquidation, a claim that comes into existence only because of orders passed after the liquidation commencement date cannot be admitted in the liquidation process. Applying that principle, the Tribunal found no error in rejection of the EPFO claims since the liabilities claimed arose from orders made after commencement of liquidation. The connected appeal was held to be fully covered by the same reasoning. [Paras 4, 5]

The rejection of the claims was upheld and both appeals were dismissed, while leaving it open to the appellants to pursue such remedy in law as may be permissible after completion of the liquidation proceedings.

Final Conclusion: The Appellate Tribunal held that in liquidation only claims in existence on the liquidation commencement date are admissible, and that EPFO claims arising from subsequent orders under Sections 7A, 7Q and 14B cannot be entertained in that process. On that basis, both appeals were dismissed.

Entitlement to practice as a professional advocate - Suspension of Licence - Disclosure of conflict of interest - Professional disqualification to represent liquidator - Suspension of right to practice - HELD THAT: - The Appellate Tribunal held that the counsel engaged by the liquidator had failed to discharge the mandatory obligation of disclosure of pecuniary and personal relationship contemplated by Regulation 7(3), despite having a conflicting interest. It further held that, once his licence to practise had been suspended, he could not represent the appellant as counsel. The Tribunal also took note of his conviction in criminal proceedings and, reading that circumstance with the disqualification principle reflected in Section 24A of the Advocates Act, concluded that his continuance as a professional representative was impermissible in law. On that reasoning, the impugned order restraining him from representing the appellant was found justified. [Paras 10, 11, 12, 13]

The challenge failed, and the order preventing the said counsel from representing the appellant was upheld.

Final Conclusion: The Appellate Tribunal dismissed the appeal and upheld the impugned order. It held that, in view of the non-disclosure of conflict under Regulation 7(3) and the subsequent suspension of the counsel's right to practise, his continuation as counsel for the liquidator was legally impermissible.

Asset Disposal Committee - expenses incurred for the forensic audit and the fees of the Chartered Accountant firm engaged by SFIO - sale transactions of movable/immovable assets attached by the Enforcement Directorate, and related financial records - Investor restitution mechanism - Transfer of digital records for restitution process - Restitution of Depositors - Attachment and Seizure - Reimbursement Mechanism.

Incidental expenses of forensic audit - Asset Disposal Committee - HELD THAT: - The Court accepted that the forensic audit was being undertaken in aid of the Asset Disposal Committee's discharge of its functions concerning disposal of attached assets and related financial affairs. Since the Committee manages the disposal process and bears ancillary and incidental expenses connected with that process, the fees of the Chartered Accountant firm engaged to facilitate the audit were treated as expenses incidental to that functioning. At the same time, the Court required the Union of India to evolve a mechanism for reimbursement if it is ultimately found that the realizations from sale of properties fall short of the amounts raised through the scheme. [Paras 7, 8, 9]

The Asset Disposal Committee was directed to bear the forensic audit expenses and incidental charges, with a further direction to the Union of India to formulate a reimbursement mechanism in the contingency indicated by the Court.

Investor restitution mechanism - Transfer of digital records for restitution process - HELD THAT: - After considering the affidavit and hearing the parties, the Court allowed the request made on behalf of the Union of India for appointment of SDMS so that the restitution process for investors could proceed expeditiously and without interruption. In furtherance of that objective, it directed transfer of all data, website credentials, and the latest application materials from WEBEL to SDMS. The Court also issued consequential directions to the Enforcement Directorate to proceed against assets not yet attached or not in its physical possession and to report back. [Paras 16, 17, 18, 19]

The application was allowed; SDMS was permitted to upgrade the website, WEBEL was directed to transfer the requisite digital infrastructure and records, and consequential directions were issued to the Enforcement Directorate regarding attachment and possession of assets.

Final Conclusion: The Court directed that the expenses of the forensic audit be borne by the Asset Disposal Committee, subject to a reimbursement mechanism to be formulated by the Union of India in the event indicated by the Court. It also allowed the measures sought for strengthening the investor restitution process, including engagement of SDMS, transfer of digital control from WEBEL, and further action by the Enforcement Directorate in respect of Rose Valley assets.

Assets Disposal Committee - HELD THAT:- The Court heard the Chairman of the Assets Disposal Committee appearing in person, directed that the report filed by the CBI be kept on record and circulated among all parties, and directed listing of the matter on the next date.

Appeal maintainability - Determination of taxability or excisability - rate of duty or the value of goods for assessment - Jurisdiction under Sections 35G and 35L - sale of goods or taxable service - Whether the nature of transaction carried out by the respondent would amount to a sale of goods or a service rendered under the Finance Act, 1994 under the aforesaid section -HELD THAT: - The Court held that, on a plain reading of Section 35G with Section 35L(2), matters relating to determination of taxability or excisability are treated as questions having relation to the rate of duty for purposes of assessment and therefore stand excluded from the High Court's appellate jurisdiction. Since the controversy raised by the Department was whether the impugned transaction fell within taxable service or constituted sale of goods, the dispute was one of taxability. Such a question, being covered by Section 35L(2), could be carried only to the Supreme Court and not by way of an appeal under Section 35G. The Court found support for this construction from the decisions in Commissioner of State Tax, Bangalore vs. Scott Wilson Kirkpatrick (I) Pvt. Ltd.[2011 (4) TMI 500 - KARNATAKA HIGH COURT] and Commissioner of CGST and Central Excise, Thane vs. Ajit India Pvt. Ltd. [2022 (12) TMI 1190 - BOMBAY HIGH COURT], which treated classification and taxability disputes as falling outside the High Court's jurisdiction under Section 35G. [Paras 4, 5, 9, 10]

The appeal was rejected as not maintainable, with liberty reserved to the appellant to avail the remedy before the Supreme Court under Section 35L, if so advised.

Final Conclusion: The High Court declined to entertain the appeal on the ground that the controversy raised pertained to taxability and therefore fell within Section 35L, not Section 35G. The appeal was accordingly rejected on maintainability, leaving it open to the appellant to pursue the statutory remedy before the Supreme Court.

Demand of service tax - Service classification - Excavation, overburden removal, drilling, mineral extraction, and loading activities - classifiable under site formation and clearance, excavation and earthmoving and demolition services, or under mining services - Essential Character Test - Vivisection of contract.

Service classification - Mining services - HELD THAT: - The Tribunal held that the essential and predominant character of the contract was extraction of mineral, with remuneration linked to lignite produced and loaded, and the ancillary operations formed part of that mining activity. Since mining services were specifically brought into the tax net only with effect from 01.06.2007, the same activity could not be taxed for the earlier period by placing its incidental elements under site formation service. Relying on its earlier view in M. Ramakrishna Reddy [2008 (10) TMI 115 - CESTAT, BANGALORE], and on the principle that a new taxable entry indicates an area not covered by the earlier entry, the Tribunal held that a comprehensive mining contract could not be vivisected to levy tax on isolated components. The CBEC instruction and circular noticed by the Tribunal also supported the position that mineral extraction and lifting to pit head were integral to mining operations and not independently taxable before the specific entry for mining services came into force. The Department having accepted the classification under mining services from 01.06.2007 could not classify the very same activity differently for the prior period merely because mining was then not taxable. [Paras 7, 8, 9, 10, 11]

The demand for the period prior to 01.06.2007 was rightly dropped, the impugned order was affirmed, and the Revenue's appeal was dismissed.

Final Conclusion: The Tribunal upheld the adjudicating authority's view that the respondent's activities under the comprehensive lignite extraction contract were mining services, taxable only from 01.06.2007. Consequently, the Revenue's attempt to tax the same activities under site formation service for the earlier period failed and the appeal was dismissed.

Taxability of multi-level marketing commission - Definition of “Business Auxiliary Service” under section 65(105)(zzb) read with section 65(19) - essential ingredients - invocation of the extended period of limitation - Bona Fide Belief - Suppression with Intent to Evade - Remand for Recalculation.

Multi-level marketing commission - HELD THAT:- The Tribunal found that the appellants were not merely selling products, but were engaged in expanding the company's network by recruiting and sponsoring associates, and that the consideration received from the company was linked to such activity and to sales generated through the network. On that basis, the amounts received were consideration for services rendered to the company and were taxable under the post-negative list definition of service. At the same time, since the matter stood covered by the earlier Tribunal ruling in Charanjeet Singh Khanuja [2015 (6) TMI 585 - CESTAT NEW DELHI], the case was remanded only for recomputation of duty liability in accordance with that decision. [Paras 5, 6, 10]

The taxability issue was decided in favour of the Revenue, but the matter was remanded for limited recalculation of the sustainable demand.

Extended period of limitation - Suppression with intent to evade - Bona fide belief - HELD THAT: - The Tribunal held that the show cause notice merely alleging non-filing of returns and non-cooperation during investigation was insufficient to establish suppression with intent to evade tax. It also noted that taxability of commission in multi-level marketing cases had itself been the subject of considerable dispute, indicating scope for a bona fide belief. Applying the principle noticed in Continental Foundation Joint Venture versus CCE, Chandigarh [2007 (8) TMI 11 - SUPREME COURT] and the Tribunal's earlier decisions, it concluded that the ingredients necessary for invoking the longer limitation period were absent and, consequently, penalty also could not be sustained on that basis. [Paras 8, 9, 10]

The extended period was held unavailable and the service tax demand was confined to the normal limitation period.

Final Conclusion: The Tribunal held that the commission-related receipts arising from the appellants' network-building activity in the multi-level marketing structure were taxable as service. However, the extended period of limitation was held inapplicable, the demand was confined to the normal period, and the matter was remanded only for recalculation of liability in terms of the earlier Tribunal ruling.

Applicability of Rule 6(3) to job work services - Job work under exemption where principal manufacturer pays duty - CENVAT credit on common input services - Whether the demand of 5% / 6% on the job charges under Rule 6 (3) of CCR is justified ? - HELD THAT: - The Tribunal held that the controversy stood covered by the decisions cited by the appellant on an almost identical issue. It accepted that where the job work is undertaken on goods received from the principal manufacturer and duty is ultimately paid on the final products, such job work clearances cannot be treated as exempted goods or services so as to attract payment under Rule 6. Since the Revenue was unable to distinguish the cited decisions either on facts or in law, the Tribunal followed the ratio that Rule 6 has only limited application in such a situation and that availment of CENVAT credit on input services by the job worker is not barred. [Paras 6, 7]

The demand confirmed under Rule 6(3), along with the connected impugned order, was set aside and the appeal was allowed with consequential benefits.

Final Conclusion: The Tribunal held that Rule 6(3) could not be invoked against the appellant's job work activity when the principal manufacturers paid duty on the final products. The impugned order sustaining the demand was therefore set aside and the appeal was allowed with consequential benefits.

Liability to service tax under reverse charge mechanism - Secondment of employees received from the overseas parent company - Manpower Recruitment or Supply Agency Service - Employer-employee relationship - Extended period of limitation - 100% Export Oriented Unit (EOU) registered with Software Technology Parks of India (STPI) for exporting Information Technology Services (ITS).

Secondment of employees - HELD THAT: - The Tribunal examined the secondment agreement and the employee letters and found that the employees were sourced from the parent company, continued to receive home-country salary in foreign currency under the international assignment policy, and were sent on secondment for a specified tenure after which they would return to the parent company. Mere control and supervision of the employees by the appellant during the secondment period was held not to alter the true nature of the arrangement. Applying the ratio of CC, CE & ST, Bangalore (Adjudication) vs. Northern Operating System Pvt. Ltd. [2022 (5) TMI 967 - SUPREME COURT], the Tribunal held that such secondment amounted to supply of manpower by the overseas parent company to the appellant. [Paras 9, 10]

The service tax demand on merits was upheld under the category of Manpower Recruitment or Supply Agency Service.

Extended period of limitation ​​​​​​​- HELD THAT: - The Tribunal held that no mala fide intention could be attributed to the appellant because any service tax paid would have been available as cenvat credit. On that basis, the extended period was held inapplicable and the demand was restricted to the normal period. For the same reason, the penalties were set aside. [Paras 10, 11]

The demand was confined to the normal period and all penalties were deleted.

Final Conclusion: The Tribunal held that the secondment arrangement involved taxable manpower supply by the overseas parent company and upheld the service tax liability on merits. However, the demand was restricted to the normal period and the penalties were set aside, resulting in partial allowance of the appeal.

Service tax - Rent-a-Cab Service - arrangement for providing buses along with drivers and maintenance to RSRTC - Bona fide belief - invocation of the extended period of limitation - demand barred by limitation.

Rent-a-Cab Service - Hiring of buses - HELD THAT: - The Tribunal examined the terms of the contract and found that the appellant was required to provide the buses with drivers and to maintain them, while ownership and possession remained with the appellant. Applying the Larger Bench view in Shree Gayatri Tourist Bus Service [2012 (5) TMI 126 - CESTAT, AHMEDABAD [LB]], the Tribunal held that such arrangement did not fall within Rent-a-Cab Service for the purpose of the demand raised in the present case. [Paras 8]

The service tax demand was held unsustainable on merits.

Extended period of limitation - Bona fide belief - Penalty - HELD THAT: - The Tribunal held that, notwithstanding the departmental clarificatory circular, a Tribunal decision in favour of assessees during the relevant period sustained a bona fide belief regarding non-taxability. In that background, intent to evade tax could not be attributed. Since the entire demand period was beyond the normal period, the show cause notice was time-barred. On the same footing, penalties under Sections 76, 77 and 78 were also held unsustainable. [Paras 9, 10, 11]

The demand was also barred by limitation and the penalties were liable to be set aside.

Final Conclusion: The Tribunal set aside the impugned order and allowed the appeal. It held that the activity in question was not taxable as Rent-a-Cab Service and, in any event, the demand was barred by limitation, with consequential invalidation of penalties.

Cenvat credit demand and penalty - Input Service Distributor - Recovery of inadmissible Cenvat credit - Exempted service - Trading in securities - Double Taxation.

Input Service Distributor - Recovery of inadmissible Cenvat credit - HELD THAT:- The Tribunal held that the issue stood settled by precedent that an InputService Distributor is neither the manufacturer nor the provider of output service against whom recovery proceedings for wrong availment or utilisation of credit could be maintained under Rule 14 read with Section 73. Since the appellant's role was only to distribute credit to its manufacturing or service units, it could not be called upon to repay such credit as inadmissible. [Paras 5]

The impugned demands were unsustainable in law insofar as they were raised against the appellant as an Input Service Distributor.

Exempted service - Trading in securities - Show cause notice - HELD THAT: - The Tribunal noted that the entire basis of the demands was the assumption that the appellant was engaged in trading of securities as an exempted service. However, both in the earlier appellate round and in de novo adjudication, there was an express finding that the appellant was not involved in trading of securities in any manner. In that situation, the show cause notices and consequential orders, being silent as to any other exempted output service allegedly provided by the appellant, lacked the necessary factual basis for invoking Rule 6 consequences and confirming the demand. [Paras 5]

As no identifiable exempted service was established against the appellant, the confirmed demands, interest and penalties could not be sustained.

Final Conclusion: The Tribunal allowed all three appeals and set aside the orders of the Commissioner (Appeals). It held that recovery of allegedly inadmissible credit was not maintainable against the appellant as an Input Service Distributor and, in any event, the demands failed because no specific exempted service was established after the finding that the appellant was not engaged in trading of securities.

Refund of unutilised CENVAT credit-Nexus between input services and exported output services- refund claims based on absence of documents, non-production of FIRC, incorrect notification particulars - Failure to record specific findings.

Refund of unutilised CENVAT credit - HELD THAT: - The Tribunal held that once CENVAT credit had been taken and its availment was not questioned by the department through proceedings for wrongful availment or utilization, the nexus aspect could not be raised for the first time while considering a refund claim under Rule 5. For refund under that provision, the relevant requirement was compliance with the prescribed formula, and it was not the Revenue's case that such formula had not been followed. The Tribunal also noted the TRU circular clarifying that the refund scheme did not require the earlier kind of correlation between exports and input services used in such exports. [Paras 6, 7]

The refund denial on the ground of non-establishment of nexus was set aside and the appeal was allowed to that extent.

Failure to record specific findings - Verification of documentary evidence - De novo adjudication - HELD THAT: - The Tribunal found that the Commissioner (Appeals) had not recorded specific reasons for denying refund on the grounds relating to absence of documentary evidence, non-production of FIRC, incorrect notification, and items on which no findings were given. As those matters required factual verification of the records maintained by the appellant, the Tribunal did not decide them on merits and held that fresh examination by the original authority was necessary. [Paras 7]

On those grounds, the matter was remanded to the original authority for limited verification of records and fresh adjudication after the appellant produces the required documents.

Final Conclusion: The Tribunal held that refund under Rule 5 could not be denied, for the first time at the refund stage, on the ground of lack of nexus between input services and exported output services where availment of credit had not been challenged earlier. The remaining refund rejections were remanded for fresh adjudication because the appellate order contained no specific findings on those factual and documentary issues.

Mandatory restriction on utilisation of CENVAT credit during default - forfeiture order under Rule 8(3A), payment of duty through CENVAT credit instead of cash or PLA - Condition precedent - Double taxation - Unjust enrichment - Mens rea - Willful defiance - Mandatory statutory command - disclosure in ER-1 returns and absence of clandestine intent - Penalty for contravention of statutory embargo.

Rule 8(3A) forfeiture - Mandatory mode of payment - HELD THAT: - The Court held that, after the 2005/2006 amendment, the statutory scheme treats the prescribed mode of payment for a defaulting assessee as a substantive condition and not a mere matter of procedure. Once the forfeiture order had directed consignment-wise payment only through cash or PLA and prohibited use of credit, any subsequent debit in the CENVAT account could not be accepted as valid duty payment. The unchallenged forfeiture order remained binding, and deviation from the prescribed mode rendered the clearances unauthorized in terms of the statutory fiction. [Paras 13, 17]

The restriction under Rule 8(3A) was held mandatory, and the utilization of CENVAT credit during the forfeiture period was treated as legally ineffective.

Deemed non-payment of duty - Legal fiction - Restoration of wrongly utilized CENVAT credit - Article 265 - HELD THAT: - The Court accepted that the legal fiction in Rule 8(3A) had to be given full effect, with the result that goods cleared by using credit during the default period were to be treated as cleared without payment of duty, entitling the Revenue to recover duty in the prescribed mode under Section 11A. At the same time, the Court distinguished a case of extinction of accrued credit from a case of temporary regulation of its use, and held that the statutory demand must be reconciled with constitutional protection against unauthorized double recovery. The Tribunal's course of directing cash payment first and restoration of the equivalent credit thereafter was therefore upheld as the legally sound balance between statutory rigor and substantive equity. [Paras 14, 16, 17, 18, 19]

The demand of duty and interest in cash was sustained, but only with a corresponding direction for re-credit or restoration of the amount earlier debited from the CENVAT account.

Penalty under Rule 25 - Willful defiance - Absence of clandestine removal - HELD THAT: - The Court noted that the transactions had been disclosed and did not involve clandestine removal, which ruled out a harsher penal approach founded on evasion. However, transparent disclosure did not erase the fact that the assessee had acted in willful defiance of a specific and binding forfeiture order. The Court therefore held that the breach was penalizable, but only to the limited extent already moderated by the Tribunal. [Paras 15, 16, 18]

The reduced penalty was upheld as a justified deterrent for contravention of the mandatory embargo.

Final Conclusion: The Court upheld the Revenue's demand of duty and interest in cash on the ground that use of CENVAT credit during the Rule 8(3A) forfeiture period was a nullity in law. At the same time, it preserved the assessee from double recovery by directing restoration of the equivalent credit after such cash payment, and it sustained only the reduced penalty.

Benefit of exemption under Notification No. 12/2012-CE - Exemption for concrete mix manufactured at site of construction - liable to duty as Ready-Mix Concrete - Distinction between concrete mix and ready-mix concrete - Extended limitation and suppression of facts.

Concrete mix vis-a-vis ready-mix concrete - HELD THAT: - The Tribunal held that the distinction between concrete mix and ready-mix concrete turns principally on the machinery used, the manufacturing process adopted, and the use of retarders and plasticizers which extend the setting time of ready-mix concrete. Applying the principles noticed from Larsen and Toubro Ltd. [2015 (10) TMI 612 - SUPREME COURT], it found that the plant installed for the project did not answer the description of a ready-mix concrete manufacturing set-up and there was no evidence that retarders and plasticizers had been used. The material on record instead showed manufacture of concrete mix dedicated to the project and transported over a short distance to the work site. The Tribunal also noted that, in similar circumstances, M/s. Ambit Concrete (P) Ltd. vs. CCT [2021 (12) TMI 177 - CESTAT ALLAHABAD] had treated the resultant product as concrete mix. On that basis, the appellant's product was held to be concrete mix entitled to the notification benefit. [Paras 8, 9]

The demand failed on merits because the appellant was entitled to the exemption as the goods were concrete mix and not ready-mix concrete.

Extended limitation - Suppression of facts - HELD THAT: - The Tribunal found that the appellant had furnished the details of the manufacturing process when queried by the department and had also supplied further particulars, including details relevant to valuation, through subsequent correspondence. Since the department already had the material information in 2015, the later show-cause notice alleging suppression of facts for invoking the extended period could not be sustained in law. [Paras 10]

The demand was also barred insofar as it rested on the extended period, and the appellant succeeded on limitation as well.

Final Conclusion: The Tribunal held that the appellant had manufactured concrete mix at the construction site for project use and was entitled to the exemption. It further held that the extended period could not be invoked on the allegation of suppression, and accordingly set aside the impugned order and allowed the appeal with consequential relief.

Interest on refund of investigation deposit - Compensatory interest from date of deposit - Interest on interest - HELD THAT: - The Tribunal held that the controversy stood covered by its earlier decisions in KLJ Plasticizers Ltd. [2025 (11) TMI 1459 - CESTAT AHMEDABAD] and Patel Labour Contractors Pvt. Limited. [2026 (1) TMI 654 - CESTAT AHMEDABAD], which were treated as laying down the governing principle for refund of amounts deposited during investigation. Following that line of reasoning, it held that the assessee was entitled to compensation by way of interest on the full deposited amount, and not merely on the portion treated by the lower authority as statutory pre-deposit under Section 35F. The Tribunal therefore directed that interest be computed at 12% per annum from the date of deposit till the date of actual refund, after giving credit for the interest already paid. [Paras 5]

Interest was held payable on the entire deposited amount at 12% per annum from the date of deposit till refund, subject to reduction of the amount already paid.

While granting substantive relief on the principal deposited amount, the Tribunal accepted the department's contention that a separate claim for interest on interest could not be allowed. The relief was confined to interest on the refunded deposit itself, and no additional amount by way of compound or secondary interest was directed. [Paras 5]

The claim for interest on interest was rejected.

Final Conclusion: The Tribunal held that the assessee was entitled to interest at 12% per annum on the entire amount deposited during investigation from the date of deposit till the date of refund, after adjusting the interest already granted. The claim for interest on interest was declined.

Redemption fine - Refund of amount paid under illegal precondition - departmental insistence for processing the declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 -Pre-deposit and unjust enrichment - clandestinely Batteries without obtaining Central Excise Registration, without issuing bills / invoices and without payment of Central Excise Duty -HELD THAT: - The Tribunal held that, in view of the Gujarat High Court decision in M/s. Synpol Products Pvt Ltd [2020 (9) TMI 257 - GUJARAT HIGH COURT], the departmental view that payment of redemption fine was a prerequisite for consideration of a declaration under SVLDRS was legally untenable. The amount paid by the appellant as redemption fine was therefore not a payment made under the scheme itself, but one made only because of the department's illegal insistence. For that reason, the authorities were wrong in rejecting the refund on the ground that no refund was permissible of amounts paid under SVLDRS or that the amount formed part of duty payable under the declaration. The Tribunal further held that the appellant could not be prejudiced for having complied with departmental communications which were without legal basis, and, applying the principle stated in Commissioner of Customs vs Ghaziabad Ship Breakers Ltd. [2010 (10) TMI 151 - GUJARAT HIGH COURT] and Commissioner of Central Excise and Customs vs. J. M. Baxi & Co. [2010 (12) TMI 995 - GUJARAT HIGH COURT], such payment was liable to be treated as in the nature of a pre-deposit, refundable without the bar of unjust enrichment once the claim was found justified. [Paras 4]

The rejection of the refund claim was held unsustainable, and the appellant was held entitled to refund of the redemption fine amount with consequential reliefs.

Final Conclusion: The Tribunal held that the redemption fine had been paid only because of an unlawful departmental insistence and not as a payment under SVLDRS. The impugned appellate order and the original order rejecting refund were set aside, and the appeal was allowed with consequential reliefs.

Cenvat credit on Bills of Entry- verification of the cenvat credit - additional duty of customs reflected in the Bills of Entry. -HELD THAT: - The Tribunal found that the Range Superintendent had already submitted a detailed verification report to the Assistant Commissioner. That report specifically recorded that, in respect of the manual Bills of Entry, manual processing had been permitted due to technical problems, and in respect of the other Bills of Entry, the particulars had been verified with the originals and found correct. The report also showed that the CVD portion tallied with the credit taken by the appellant. Since there was nothing to indicate that this verification report had been doubted by the competent departmental authority, the Tribunal held that a remand for denovo adjudication and fresh verification served no purpose. [Paras 6]

The order of remand was set aside and the appeal was allowed.

Final Conclusion: The Tribunal held that, in view of the existing departmental verification confirming the Bills of Entry particulars and the CVD credit, the remand ordered by the Commissioner (Appeals) was unnecessary. The appeal was accordingly allowed with consequential relief as per law.

Arbitration agreement - Consensus ad idem - Jurisdiction to appoint arbitrator - Estoppel against jurisdictional objection - Lack of Jurisdiction - Coram Non Judice - Waiver and Acquiescence - powers conferred under Section 143-A of the 1965 Act, the Municipal Council issued a tender for the collection of octroi for a period of one year.

Arbitration agreement - Consensus ad idem - Departmental dispute resolution - HELD THAT: - The Court held that, on a plain reading, clause 22 merely provided for reference of disputes to the Collector, with further appeal within the governmental hierarchy, and not for adjudication through arbitration. The clause did not disclose any agreement to submit disputes to an arbitral forum, nor any mutuality or consensus ad idem to arbitrate. Clause 20 also did not operate as an arbitration clause, as it only dealt with the position to be maintained pending resolution of disputes. [Paras 22, 25, 26]

There was no valid arbitration agreement in the contract.

Jurisdiction to appoint arbitrator - Statutory power - Unilateral appointment - HELD THAT:- The Court interpreted Section 143-A(3) as conferring power on the State Government only to issue policy directions regarding the manner and procedure of octroi collection. That provision could not be extended to authorise the Government to superimpose arbitration upon parties governed by a concluded contract. Since the contract contained no arbitration agreement and there was no concurrence of the Municipal Council, the Government's appointment of the arbitrator was without jurisdiction. [Paras 19, 20, 24, 26]

The Government Resolution appointing the arbitrator was beyond statutory authority and could not sustain the arbitral proceedings.

Inherent lack of jurisdiction - Nullity of award - Estoppel against jurisdictional objection - HELD THAT:- The Court accepted the High Court's view that the Municipal Council's participation occurred in circumstances where arbitration had been unilaterally imposed and the Council was functioning through an Administrator subordinate to the Governmental set-up involved in the appointment. As the foundational requirement of a valid arbitration agreement was absent, the arbitrator lacked inherent jurisdiction, rendering the proceedings coram non judice and the award non-est. Such a jurisdictional defect could not be cured by participation, waiver or estoppel, particularly when the objection had been raised before the Civil Court and the High Court. [Paras 23, 25, 26]

The jurisdictional challenge was maintainable, and the award was a nullity notwithstanding the Municipal Council's participation.

Final Conclusion: The High Court has arrived at the right conclusion on the basis of law and fact. While reiterating the decision of the High Court, we are of the opinion that there is no merit in the special leave petition for the following reasons:

a) Absence of a Valid Arbitration Agreement: There is no written agreement between the parties to submit differences to arbitration as required by Section 2(a) of the Arbitration Act, 1940. Specifically, Clause 20 relates to the position that the parties are to maintain pending the disposal of a dispute resolution. In other words, clause 20 prescribes a measure that the parties would maintain pending resolution. However, that by itself cannot be an arbitration clause. On the other hand, Clause 22 is certainly not an arbitration agreement.

b) Lack of Jurisdiction for Appointment: State Government has no authority under Section 143-A(3) of the Maharashtra Municipal Councils, Nagar Panchayats and Industrial Townships Act, 1965 to appoint an arbitrator for the agent and the Municipal Council. The exercise of such power by the government cannot be equated to Section 4 of the Arbitration Act, 1940, for there is no such agreement.

c) Absence of Mutuality: The requirement of consensus ad idem for creation of an arbitration agreement as contemplated under Section 2(a) of the Arbitration Act, 1940, was absent.

d) Void Proceedings and Nullity of Award: Since the Arbitrator lacked inherent jurisdiction due to the absence of an arbitration agreement, the entire proceedings were a nullity (coram non judice) and the resulting award was non-est.

e) Participation does not confer Jurisdiction: There is no estoppel against the Municipal Council for the reason that it had initially participated in the arbitral proceedings. This is for the reason that they were forced into arbitration without consent and contract. At the same time, they challenged the award on jurisdictional grounds before the Civil Court as well as the High Court.

f) Propriety of Arbitral Proceedings: We are in agreement with the conclusions of the High Court that the arbitral proceedings were perfunctory and started and concluded in a short period. Suffice to say that the circumstances relating to the making of the award indicated in the judgment of the High Court do not warrant interference. In any event, once the award is set aside on the ground of jurisdiction, this issue is not relevant.

The Court upheld the High Court's decision and dismissed the special leave petition, holding that there was neither a valid arbitration agreement nor any statutory authority for the State Government to appoint an arbitrator. The award was therefore without jurisdiction and unenforceable.

Pre-trade authorisation - absence of timely objection and written or recorded instructions - trading losses and brokerage charges - Blatantly unauthorised trades - fraudulent and unauthorized acts of its Alliance Partner and his employees, including on the basis of vicarious liability - failed to adhere to regulatory guidelines and did not exercise due diligence in safeguarding his trading account - Patent Illegality - Perversity - Acquiescence - Scope of Agency - Civil Fraud - trading and clearing member of recognized stock exchanges such as the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), Multi Commodity Exchange of India (MCX) and National Commodity and Derivatives Exchange Limited (NCDEX).

Pre-trade authorisation - Unauthorised trades - HELD THAT: - The Court held that the law, as explained in Ulhas Dandekar and Erach Khavar, is that non-availability of pre-trade authorisation is not conclusive of unauthorised trading and may at the highest attract regulatory consequences; where the client does not object within a reasonable time, he cannot ordinarily disown the trades. At the same time, the Court found that the present matter stood on a different footing because the Arbitrator had, on the evidence, recorded findings that the trades were manipulated to generate abnormal brokerage, that the client was induced by promises of high returns and pressured into continued trading, and that the case involved blatantly unauthorised and prejudicial trading. Those findings were based on material on record, including WhatsApp messages, audio recordings and transaction data, and did not disclose patent illegality or perversity warranting interference under Section 37. [Paras 35, 37, 38, 39]

The client could not have escaped liability merely on the ground of absence of pre-trade authorisation, but the award was rightly sustained because the arbitrator had found a case of manipulated and blatantly unauthorised trades falling within the recognised exception.

Vicarious liability of principal - HELD THAT: - The Court held that the client had opened the trading account with the broker and was therefore entitled to proceed directly against the broker. Referring to Harshad J. Shah and another Vs. L.I.C. of India and others [1997 (4) TMI 501 - SUPREME COURT] the Court found that the said decision turned on the absence of material showing that the principal had held out the agent as authorised in the relevant manner, and on express statutory restrictions. In contrast, applying the principles noticed from State Bank of India (Successor To The Imperial Bank of India) Vs. Shyama Devi [1978 (5) TMI 124 - SUPREME COURT] and Messrs. Vurdhman Bros. Vs. Messrs. Radhakishan Jai Kishan [1923 (12) TMI 5 - NAGPUR JUDICIAL COMMISSIONERS COURT] the Court held that fraud or misrepresentation committed by an agent in the course of the principal's business binds the principal. Since the Alliance Partner acted under the broker's umbrella, the trades were effected in the course of that agency, and the broker was also a beneficiary of the brokerage generated, the broker could not avoid responsibility for the resulting loss. [Paras 41, 42, 43, 44]

The broker was vicariously liable for the fraudulent and prejudicial trading carried out by the Alliance Partner and his employees, and no interference with the award on that ground was warranted.

Final Conclusion: The Court dismissed the appeal and declined to interfere with the arbitral award or the order under Section 34. It held that, although absence of pre-trade authorisation is not by itself decisive, the arbitrator's finding of manipulated and blatantly unauthorised trading for the broker's benefit was based on evidence, and the broker was liable for the acts of its Alliance Partner and his employees.