TMI Tax Updates e-Newsletter
May 01,2026

Limitation for GST appeal - Effect of rectification application on appellate limitation - Rejection of appeal as barred by limitation - applicable time limit for filing appeal -filing and disposal of the rectification application against the order - appellate authority power for condoning the delay - rectification of assessment u/s 161 of the GST Act - computation of limitation period for appeal from date of rectification order or original order

HELD THAT:- The court noted that it is true that the appellate authority does have any power for condoning the delay if the appeal is filed beyond the statutory period of 120 days.

In the present case, the limitation would start running from 20.03.2025 on the rejection of the rectification application filed by the petitioner since it is rejected on 19.03.2025. The petitioner within a period of one week i.e. on 25.03.2025 has filed an appeal challenging the order dated 12.08.2024. Thus, the appellate authority was required to examine the details filled in by the petitioner in Form GST APL-01 before rejecting the appeal on the ground of delay.

The filing and disposal of the rectification application against the order dated 12.08.2024 was a vital aspect which would directly impact on the calculation of the limitation period provided u/s 107 of the Act. [Para 7 and 8]

Final Conclusion: The writ petition was allowed. The order rejecting the appeal on the ground of delay was set aside and the matter was remanded to the appellate authority for fresh consideration, since the effect of the rectification proceedings on limitation had not been examined.

Alternative statutory remedy - Jurisdiction under sections 73(1), 74(1) and sections 73(9) and 74(9) - Challenge to vires -search and seizure operations conducted by the GST officials -HELD THAT: - By a Notification bearing no.14/2017 dated 1 July, 2017, the Central Board of Excise and Customs, Ministry of Finance, has enumerated powers to be exercised by the Central Tax Officers. The said Notification has also been relied on in the impugned order. The stalling of the proceedings and bypassing the statutory mandate causes serious loss, prejudice and damage to the extent that it emasculates the object of the Act. Then again, there is an added reason to avoid payment of the mandatory statutory deposit when preferring an appeal which such litigants intend to avoid.

The Court held that the petitioners had an efficacious statutory remedy of appeal under section 107 and had failed to establish any exceptional circumstance warranting interference in writ jurisdiction. The objection that officers of the DGGI were not competent or that the show-cause notice could not be adjudicated by the officer concerned was found to be without even prima facie merit, in view of the authorities noticed by the Court and the notification assigning powers to Central Tax Officers. The impugned order had also been passed after issuance of show-cause notice, reply and personal hearing, and the petitioners had not advanced any substantive challenge on merits before the Court. In these circumstances, the attempt to bypass the appellate remedy was declined. [Paras 9, 11, 12, 15]

The Court refused to entertain the writ petition and left the petitioners to pursue the statutory appeal.

Challenge to vires - Prima facie case - HELD THAT:- The Court held that a challenge to vires must be raised at the earliest and can be entertained only where a prima facie strong ground is made out. On the pleadings and submissions before it, no such prima facie case was shown against the impugned circulars. The Court therefore found that the vires challenge could not be used as a basis to invoke writ jurisdiction in the teeth of the available statutory remedy. [Paras 13, 14]

The Court found no prima facie case on vires and declined to entertain the writ petition on that basis.

Final Conclusion: The writ petition was dismissed on the ground that the petitioners had an effective statutory remedy of appeal and had shown no exceptional circumstance for invoking writ jurisdiction. The Court clarified that it had not finally adjudicated the merits and left it open to the petitioners to avail the appellate remedy in accordance with law.

Rejection of refund application - failure to submit shipping bills, bank statements, bank realization certificates, reconciliation of GSTR-1, GSTR-2B and GSTR-3B, etc -Alternative statutory remedy - Violation of principles of natural justice - Jurisdictional error and erroneous exercise of jurisdiction - Efficacious appellate remedy - Audi Alteram Partem.

Alternative statutory remedy - HELD THAT: - The Court held that a distinction has to be maintained between lack of jurisdiction and an erroneous exercise of jurisdiction. Interference under Article 226 would be warranted where there is inherent absence of jurisdiction or other exceptional circumstances, but not where the grievance essentially concerns the correctness of findings recorded by the statutory authorities. On facts, the petitioner had been issued show cause notices, had filed replies with documents, and had also been afforded opportunity of personal hearing at the original stage. At the appellate stage also, multiple hearings were granted and attended through the authorised representative. The Court therefore found that the grievance was not one of absence of opportunity, but of non-acceptance of the petitioner's case. In those circumstances, the alleged defect did not amount to a jurisdictional infirmity attracting writ interference. [Paras 23, 24, 25, 26, 29]

The plea of violation of natural justice was rejected, and the writ court declined to examine the correctness of the factual findings in exercise of supervisory jurisdiction.

Efficacious appellate remedy - Statutory appeal - HELD THAT: - The Court rejected the contention that the statutory appeal was inefficacious on account of non-functionality of the GSTAT. Referring to its earlier orderin Rajesh Khanna v. Office of the Commissioner of Central Tax Appeals–I, Delhi & Ors.[2026 (2) TMI 1325 - DELHI HIGH COURT], the Court noted that the necessary IT infrastructure for virtual hearings was in place and that the Tribunal had commenced scrutiny of appeals. The further contention that the matter concerned refund already deposited and therefore warranted writ intervention was also not accepted, the Court holding that refund entitlement and adequacy of supporting material fall within the domain of statutory adjudication and can be urged before the appellate forum. [Paras 27, 28, 29]

The petitioner was relegated to the statutory appeal before the GSTAT, with all merits left open.

Final Conclusion: The writ petition was disposed of with liberty to the petitioner to pursue the statutory appeal under Section 112 of the CGST Act before the GSTAT. The Court held that no exceptional circumstance or jurisdictional defect was made out for interference under Article 226, and left all merits open.

Discharge of tax liability through electronic cash ledger - Reverse charge mechanism - Interest for Delayed Payment - Composite assessment for separate tax periods - Appropriation to Government Exchequer - Wrongful Availment of Input Tax Credit - Suppression of Facts - Willful Misstatement.

Electronic cash ledger - Appropriation to Government account - Interest on delayed payment - HELD THAT: - The Court held that under Section 49(1) read with Rule 87(6) and (7), mere deposit of cash into the taxpayer's electronic ledger is not by itself payment of tax; payment is completed only upon appropriation to the Government exchequer. Since the petitioner had later made the necessary debit entries, the tax liability stood cleared, but not within the stipulated time. Consequently, the liability to pay interest for the period of delay remained. [Paras 16]

The tax was not discharged on mere deposit into the electronic ledger, and interest was payable for the delayed appropriation.

Input tax credit - Reverse charge mechanism - Recovery of wrongly availed credit - HELD THAT: - The Court accepted that credit arising from reverse charge payment could not be availed before the corresponding tax stood appropriated to the Government. However, it held that though credit wrongly availed without underlying payment could ordinarily be recovered, such recovery was not justified in the present case after the petitioner had subsequently made the debit entries and the amount had been appropriated. The respondent could not seek recovery of the input tax credit in addition to such appropriation. [Paras 17]

The finding that the input tax credit was liable to be independently recovered was held to be incorrect to that extent.

Whether the omission of the petitioner to debit the amounts paid into his electronic credit ledger, in favour of the Government was an act of inadvertent omission or a case of suppression of fact with the intention of evading of tax - HELD THAT: - The Court held that the issue whether the petitioner's omission was a mere inadvertent lapse or suppression with intent to evade tax was essentially a question of fact requiring consideration by the primary authority in the light of the petitioner's objections. It found that such exercise had not been properly undertaken. The impugned order also suffered from the defect of being a composite order for two different tax periods, which was impermissible. On that basis, the order was set aside and the matter was remitted for separate orders for each period after considering the objections. [Paras 18, 19]

The impugned order was set aside and the matter remanded for separate consideration of the two tax periods, with the issue of suppression left open.

Final Conclusion: The Court held that mere deposit of cash in the electronic ledger did not amount to payment of GST unless appropriated to the Government, and that interest for the delayed appropriation was payable. It further held that separate recovery of the input tax credit was not justified after subsequent appropriation, and set aside the composite order for the two tax periods with a remand for fresh separate orders after reconsideration of the petitioner's explanation.

Taxability of statutory functions- Scope of supply under GST - supply of services - taxable supply - governmental authority - local authority - course or furtherance of business - University of affiliation fees and no-objection certificate fees collected by State universities.

Statutory functions - Supply of services - HELD THAT:- The Court held that Section 7 brings within the ambit of supply those services rendered in the course or furtherance of business. While the statute separately treats activities of the Central Government, State Government and local authorities, the petitioner universities are distinct statutory entities created under State enactments and are not the State Government or a local authority. Their function of considering and granting or refusing affiliation and NOC is a mandatory statutory duty and not a voluntary commercial activity. Since such statutory functions do not answer the description of business under Section 2(17), the impugned receipts do not constitute taxable supply of services. [Paras 14, 15, 17, 18, 20]

The assessment orders levying GST on affiliation fees and NOC fees were set aside and the writ petitions were allowed.

Final Conclusion: The Court held that the petitioner universities, while collecting affiliation fees and NOC fees in discharge of statutory obligations, were not carrying on taxable supply of services under the GST Act. On that finding, the impugned assessment orders were set aside, and the question of exemption under the notifications was not examined.

Rejection of the refund claim - non-speaking order - lacking in application of mind - Failure to consider material submissions - Refund of unutilized input tax credit.

Reasoned and speaking order - HELD THAT: - The Court found that, before rejecting the refund claim, no specific finding had been recorded on the petitioner's case and the order did not deal with the submissions raised in reply. The determinative reasoning was that rejection of a refund claim must rest on a reasoned and speaking order. As the impugned order suffered from the vice of being non-speaking vis-a-vis the refund rejection, the order and the corrigendum were set aside and the matter was remanded for fresh adjudication after issuance of a fresh show cause notice and grant of personal hearing. [Paras 11, 12]

The impugned refund rejection order and corrigendum were quashed, and the refund claim was remanded for de novo consideration after fresh notice and hearing.

Failure to consider material submissions - Opportunity of hearing - HELD THAT: - The Court accepted the petitioner's grievance that the subsequent show cause notices for the earlier financial years had been issued erroneously without considering its submissions. On that procedural defect, the Court directed that a fresh hearing be given to the petitioner in de novo proceedings and that the notices be decided afresh in accordance with law. The merits of the underlying tax dispute were expressly left open. [Paras 11, 12]

Fresh hearing and de novo determination were directed in respect of the show cause notices for the financial years 2018-19 and 2019-20.

Final Conclusion: The Court held that the refund rejection order was non-speaking and that the subsequent notices for earlier years had been issued without considering the petitioner's submissions. The impugned order and corrigendum were set aside, and both the refund claim and the subsequent notices were remanded for fresh adjudication after hearing, with all contentions kept open.

Consideration of representations - hearing before recovery of interest - HELD THAT: - The Court did not enter upon the merits of the demand for interest. In view of the statement made on behalf of the respondent that the petitioner's representations would be considered on merits in the light of the order in M/s. Eicher Motors Limited, Rep. By its Group Manager, Finance vs. The Superintendent of GST and Central Excise, Range II, Tiruvottiyur Division, The Assistant Commissioner of Central Tax & Central Excise [2024 (1) TMI 1111 - MADRAS HIGH COURT], the Court disposed of the writ petition by directing the respondent to consider the representations already submitted, also keeping in view M/s. Tamil Nadu State Transport Corporation (Villupuram) Limited vs. The Additional Commissioner of Central Tax Officer of the Commissioner of GST & Central Excise Chennai-Outer [2025 (6) TMI 419 - MADRAS HIGH COURT], and to pass orders on merits after hearing the petitioner. [Paras 6, 7]

The respondent was directed to consider the petitioner's representations on merits, with reference to the decisions indicated by the Court, and after granting an opportunity of hearing.

Final Conclusion: The writ petition was disposed of without deciding the merits of the interest demand. The respondent was directed to consider the petitioner's pending representations for the tax periods in question, take note of the decisions referred to by the Court, and pass a reasoned order after granting a hearing.

Condonation of delay in statutory appeal - Limitation under Section 107 of the GST Acts - HELD THAT: - Following the Supreme Court decision in the case of M/s Tecnimont Pvt. Ltd vs. State of Punjab and Ors. [2019 (9) TMI 788 - SUPREME COURT]. The Court recorded that the question of dismissal of the assessee's appeal on limitation under Section 107 had already been examined in earlier decisions of the Court and that the parties agreed that the present matter be disposed of in the same terms. Proceeding on that basis, and following the course accepted in relation to delayed GST appeals, the Court condoned the delay and directed that a fresh appeal, if filed within the time granted by the Court, be entertained and decided on merits without reopening the question of limitation. It was further directed that all grounds available to the petitioner be considered and a speaking order be passed. [Paras 4, 5]

The petitioner was allowed to file a fresh appeal within 15 days, and the Appellate Authority was directed to consider it on merits without rejecting it on limitation.

Final Conclusion: The writ petition was disposed of by condoning the delay in filing the GST appeal and permitting the petitioner to file a fresh appeal within the stipulated period. On such filing, the Appellate Authority was directed to hear the matter on merits and pass a speaking order without examining limitation.

Anti-profiteering - Additional input tax credit benefit - Commensurate reduction in prices - GST component in profiteered amount - Interest on profiteered amount - Penalty under anti-profiteering provisions.

Additional input tax credit benefit - Commensurate reduction in prices - Anti-profiteering - HELD THAT: - The Tribunal accepted the DGAP determination that the ratio of input tax credit to purchase value increased from 8.25% in the pre-GST period to 14.00% in the post-GST period, yielding an additional benefit of 5.75%. It held that, once such additional ITC became available on a wider base of inputs and input services, the resulting reduction in tax incidence formed a benefit required to be passed on under Section 171. The respondent's plea that unutilised ITC under an inverted duty structure did not amount to a real benefit was rejected on the ground that the statutory test is the availability of input tax credit, not its actual utilisation. The further plea that prices were fixed under a development agreement was also held incapable of overriding the mandate of Section 171. [Paras 14, 15, 16, 18]

The respondent was held to have profiteered by not passing on the additional ITC benefit to the homebuyers.

GST component in profiteered amount - Profiteered consideration - HELD THAT: - The Tribunal held that the DGAP had computed profiteering on values exclusive of GST, whereas the respondent had collected total consideration from buyers inclusive of GST. Since the excess realisation from buyers inherently carried the GST component, return of the profiteered amount had to include the corresponding GST collected on such excess amount. The Tribunal followed Reckitt Benckiser India Pvt. Ltd. v. Union of India [2019 (7) TMI 1135 - DELHI HIGH COURT] and upheld inclusion of GST in the profiteered sum. [Paras 19, 20]

The GST component was rightly added to the profiteered amount and was directed to be refunded along with the base profiteered sum.

Interest on profiteered amount - Statutory restitution - HELD THAT: - Relying on Section 171 and Rule 133(3)(b), the Tribunal held that the obligation to return the amount not passed on together with interest is mandatory. It observed that the statutory scheme requires the supplier to pass on the benefit at the time of supply, and where that is not done, interest must follow from the date of collection of the higher amount until its actual return. The Tribunal also referred to Reckitt Benckiser India Pvt. Ltd. v. Union of India [2019 (7) TMI 1135 - DELHI HIGH COURT] while affirming that levy of interest is within the scope of the anti-profiteering framework. [Paras 21, 22, 24]

The respondent was directed to refund the amount with interest at 18% per annum from the respective dates of collection till actual refund.

Penalty under anti-profiteering provisions - Prospective operation of penalty - HELD THAT: - The Tribunal noted that Section 171(3A) came into force with effect from 01.01.2020, while the period of contravention extended up to 30.09.2024. On that basis, it held that the penal provision was attracted in the facts of the case. The Tribunal also noticed the statutory proviso that no penalty is leviable if the profiteered amount is deposited within thirty days of the order. [Paras 23]

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

Final Conclusion: The Tribunal held that the respondent had profiteered by retaining the additional ITC benefit arising after introduction of GST and by not passing it on through commensurate price reduction. It directed refund of the profiteered amount together with the GST component and interest at 18% per annum, and further held that penalty under Section 171(3A) was attracted.

Validity of Reassessment - Reason to believe or reason to suspect - Change of opinion - Full and true disclosure - As decided by HC information regarding the assessee's share transactions, on which the assessing officer sought to reopen the assessment, was already on record when the assessment had originally been completed u/s 143(3) thus, recorded reasons amounted only to a reason to suspect and could not sustain reopening

HELD THAT:- Revenue fairly states that arising from the same impugned order [2025 (8) TMI 1803 - CALCUTTA HIGH COURT], another Special Leave Petition has been dismissed vide order [2026 (4) TMI 1796 - SC ORDER].

In such view of the matter, this Special Leave Petition is dismissed.

Validity of reopening of assessment - period of limitation - Notice, beyond the prescribed three (03) years - Time limit for notice under section 148 - Application of substituted section 149(1)(a) and 149(1)(b) - Escaped income threshold of fifty lakh rupees - Validity of reassessment notices issued between 01.04.2021 and 30.06.2021 - Effect of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 - Gross delay of 701 days in filing the Special Leave Petition

HELD THAT:- There is a gross delay of 701 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioner. Even otherwise, we find no good ground to interfere with the impugned order passed by the High Court.[2023 (12) TMI 1501 - DELHI HIGH COURT]

Special Leave Petition is, therefore, dismissed on the ground of delay as well as merits.

Condonation of delay - Sufficient cause- delay of 430 days in filing the appeal - victim of circumstances beyond control death of the professional created a communication vacuum, leading to the delay

HELD THAT: - The Court held that a liberal approach must govern condonation where refusal would defeat substantial justice. In the facts, the death of the authorised representative, who was handling the assessee's tax matters in the faceless regime, constituted sufficient cause for the delay. The Court further held that where the assessee raises a plea that the reassessment itself may be void for want of approval by the authority specified in law, such a jurisdictional objection cannot be shut out by adopting a rigid and hyper-technical view on limitation. The Tribunal, by refusing condonation solely for want of documentary support and by not addressing the effect of the pleaded jurisdictional defect, failed to exercise its discretion properly. [Paras 7, 8, 9, 10]

The delay was condoned, the Tribunal's order was set aside, and the matter was remanded for fresh adjudication on merits, with a direction to decide the jurisdictional validity of the assessment under Section 151 as a preliminary issue.

Final Conclusion: The appeal was allowed by way of remand. The High Court condoned the delay, set aside the Tribunal's order dismissing the appeal on limitation, and directed the Tribunal to decide the assessee's appeal afresh, including the jurisdictional objection under Section 151 as a preliminary issue.

Penalty u/s 274(2) - Prior approval from proper authority - Statutory definition of Joint Commissioner - Harmonious construction - requirement u/s 274(2) - HELD THAT: - The Court held that section 2(28C) expressly defines Joint Commissioner to include the Additional Commissioner, and that definition must govern wherever the term is used unless the context clearly requires otherwise. Sections 151 and 158BFA, though expressly mentioning both Joint Commissioner and Additional Commissioner, were treated as provisions drafted for added clarity and not as indicating any exclusion of the statutory definition in other provisions. On a harmonious reading of the Act, there was nothing in section 274(2) to show that the expression Joint Commissioner was intended to exclude the Additional Commissioner; accepting the petitioner's construction would render the inclusive definition otiose. [Paras 9, 10, 11, 12]

The challenge to the penalty proceedings on the ground of want of proper approval failed, since approval by the Additional Commissioner was held to be valid compliance with section 274(2).

Final Conclusion: The writ petitions were dismissed. The Court held that prior approval of the Additional Commissioner was legally sufficient for the impugned penalty proceedings, while leaving it open to the petitioner to pursue statutory remedies on the merits.

Condonation of delay - Classification of transfer of goods - movement of goods from the Indapur factory of the appellant at Pune in the State of Maharashtra to Haridwar in the State of Uttarakhand was to fulfill the purchase orders of Patanjali - HELD THAT:- Delay was condoned and the special leave petition was dismissed on the ground that no case for interference with the impugned order was made out under Article 136 of the Constitution of India.

Condonation of delay - barred by 276 days delay - HELD THAT:- The application for condonation of 276 days' delay was rejected on the ground that the cause shown was absolutely insufficient, and consequently the civil appeal was dismissed as time barred.

Imported Platinum-Rhodium alloy powder/sponge (containing approximately 80% platinum) - Exemption from payment of additional duty of customs (CVD) under Serial No. 25 of the Notification- Platinum Powder imported by the appellant would also be entitled for exemption from payment of CVD under the two Notifications - HELD THAT:- The civil appeal was dismissed as the Court found no error in law or fact in the order of the Customs, Excise and Service Tax Appellate Tribunal.

Determination of Fe content of exported iron ore fines - Wet Metric Tonne basis or Dry Metric Tonne basis -Prospective operation of taxing amendment - Binding effect of departmental circulars - Failure to deal with replies and material submissions

Determination of Fe content - HELD THAT: - Section 12 of the Customs Act declares that duties of customs shall be levied. In this context it means not merely chargeability but also quantification of the duty, that is the valuation of goods for the purpose of levy of duty, the rate at which the duty should be levied and also recovery of such duty. The expression “duties of customs shall be levied … on goods … exported from, India” occurring in Section 12 must be interpreted keeping in view when the goods became chargeable to duty and in terms of Section 16 the duty is chargeable on the taxable event that occurs on the dates with reference to which the goods are to be valued and the event with reference to which the rate at which the duty is to be levied and quantified. Goods referred to in Section 14 are goods on which duty of customs is chargeable by reference to their value. It would be clear that Section 14 by itself does not lay down when or what goods are chargeable to customs duty. It only deals with valuation of the goods exported which are chargeable to customs duty. If they are chargeable to duty and are chargeable by reference to their value, then the value has to be determined as laid down in Section 14. Whether the goods exported are chargeable to duty and if so, the point at which they become chargeable must be determined with reference to the provisions envisaged under Section 12 of the Customs Act.

It is trite that under all taxing statutes to consider levy of tax/duty it is to be determined when exactly did the taxable event occur? It is with reference to that point of time, that the chargeability or leviability of the tax or duty, as the case may be, has to be determined. That is the crucial date. See, Apar Private Ltd. Vrs. Union of India, [1985 (10) TMI 273 - BOMBAY HIGH COURT]. In Associated Forest Products (P) Ltd. Vrs. Assistant Collector of Customs [1988 (12) TMI 124 - HIGH COURT AT CALCUTTA] it has been succinctly said that what is postponed is quantification and collection and not chargeability. While the taxable event is the crossing of territorial waters, the rate of duty applicable is determined based on Section 16. The provisions of Section 16 read with Sections 50 and 51 make it abundantly clear that the proper officer is required to make an order permitting clearance and loading of the goods for exportation upon being satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty assessed thereon. Since on the date of export, there is no dispute that, the goods being found to be less than 58% Fe content were allowed to be exported on the WMT basis, the Commissioner of Customs could not have applied the amended provision by assessing the goods exported to be more than 58% Fe content on DMT.

The Court held that the taxable event for export duty is the export of goods and the applicable method of assessment must be determined with reference to the law in force on that date. Since the shipping bills in question related to exports prior to the amendment changing the computation regime, the Commissioner could not assess Fe content on DMT basis by relying on the later position. Circular No. 04/2012-Cus., issued to ensure uniformity in assessment of iron ore exports, required determination of Fe content on WMT basis, and the Department was bound to follow it so long as it remained in force. The Court found that the adjudicating authority had proceeded on an erroneous premise that DMT-based pricing or allegations of fraud rendered the circular inapplicable, and had also failed to deal with the petitioner's replies in the proper perspective. As the wrong method of assessment had been adopted, the Order-in-Original could not be sustained. [Paras 7, 8, 9, 10]

The Order-in-Original was set aside, and the matter was remitted to the Commissioner of Customs (Preventive), Bhubaneswar for fresh adjudication by classifying and computing Fe content on WMT basis, after affording reasonable opportunity of hearing and confronting the petitioner with the material proposed to be used.

Final Conclusion: The Court held that the impugned adjudication wrongly proceeded on DMT basis for exports effected prior to the 2022 amendment, whereas the assessment had to be made on WMT basis in accordance with the law and circular governing the taxable event. The Order-in-Original was therefore set aside and the matter remitted for fresh adjudication after due hearing and confrontation of the material relied upon.

Classification of Bluetooth wireless earphones, headphones, earbuds and neckbands - Classifiable under CTI 8518 30 00 Or under CTI 8517 62 90 - Benefit of Notification No. 57/2017 dated 30.06.2017, Or under Customs Tariff Item 8518 30 00 -Extended period of limitation - Essential Character - Classification Based on Objective Characteristics - Trade Parlance - Penalty under section 114A.

Tariff classification of Bluetooth wireless earphones - HELD THAT: - The Tribunal held that the imported goods are, in their objective character and commercial identity, headphones or earphones, whether or not combined with a microphone, and are therefore directly covered by the specific tariff description in Heading 8518. Their principal function is audio playback or sound reproduction from Bluetooth-connected devices; features relating to calling or voice transmission operate only as additional or secondary features when paired with a mobile phone. The presence of Bluetooth connectivity was treated only as the means by which audio reaches the device and not as changing the essential nature of the goods into machines for transmission or reception of data. Applying the principle that classification must first be determined by the terms of the heading, the Tribunal held that Heading 8518, being an eo nomine and specific entry, prevails, and there was no occasion to classify the goods under the broader residual entry in Heading 8517. For the same reason, the concessional notification linked to CTI 8517 62 90 was unavailable, the Board Circular was inapplicable because the goods were not designed principally for mobile telephony, and the decisions relied upon by the appellant were distinguishable on the nature and functions of the products involved. [Paras 31, 33, 36, 38, 39]

The goods were held classifiable under CTI 8518 30 00, with the result that the claim to concessional duty under the notification based on CTI 8517 62 90 was rejected and the duty demand was sustainable on merits.

Extended period of limitation - Intent to evade duty - Penalty under section 114A - HELD THAT: - The Tribunal held that the dispute was one of classification and that mere adoption of a particular tariff entry on the basis of the appellant's understanding could not, by itself, justify invocation of the extended period. Suppression of facts for section 28(4) must be accompanied by intent to evade duty, and such intent was not established merely because the department accepted a different classification. Since the foundation for invoking the extended period failed, the demand for that period was liable to be set aside. The Tribunal further held that the basis for penalty under section 114A was the same as that for invoking the extended period; consequently, the penalty also could not survive. As part of the same finding, the matter was remitted only for determination of the portion of demand falling within the normal period under section 28(1) and the consequential interest payable under section 28AA. [Paras 41, 42, 43, 44, 45]

The demand for the extended period was set aside, penalty under section 114A was deleted, and the matter was remitted to determine the demand and interest confined to the normal period of limitation.

Final Conclusion: The appeal was allowed in part. While the imported goods were held classifiable under CTI 8518 30 00 and not eligible for the claimed concessional notification, the demand was confined to the normal period of limitation, the demand for the extended period and the penalty under section 114A were set aside, and the matter was remitted for determination of the surviving demand and interest.

Classification of imported goods - imported Sodium Tri-Poly Phosphate - Anti-dumping duty applicability - applicability of the Notification No.58/2011-Customs -Burden of proof on Revenue - Inconclusive laboratory evidence - Food grade vis-a-vis technical grade - Inconclusive test reports - Confiscation and penalty - HELD THAT: - The Tribunal held that, after the corrigendum to the anti-dumping notification, levy attached only to STPP other than food grade, and therefore the Department had to establish on cogent evidence that the imported goods were not food grade. Of the four laboratories approached, two declined testing for want of facility. Among the two reports obtained, the FSSAI-authorised laboratory report was supported by the Authorised Officer, FSSAI, who certified that the goods conformed to the FSS Act and rules and issued NOC, also clarifying that the analysis had been carried out from the food safety angle for a proprietary food additive. The Chemotest report, on which the Department relied, was found insufficient because its own expert admitted in cross-examination that food grade and industrial grade parameters overlap, that no conclusive test had been carried out to exclude food grade, and that additional tests such as toxic metal and microbiological tests would be required for such determination. In these circumstances, the opinion classifying the goods as industrial grade could not prevail over the FSSAI-backed certification. Applying the principle that chargeability-related classification must be proved by the Revenue, and that action with confiscatory and penal consequences cannot rest on inconclusive evidence, the Tribunal found that the Department failed to prove misdeclaration or liability to anti-dumping duty. [Paras 9, 10, 11]

The goods were to be treated as food grade STPP; the demand of anti-dumping duty, confiscation of goods, and penalties imposed on the appellants were unsustainable.

Final Conclusion: The Tribunal held that the Department failed to prove that the imported STPP was other than food grade. The impugned order was set aside and the appeals were allowed, with the consequential demand of anti-dumping duty, confiscation, and penalties not surviving.

Mutuality of interest for customs valuation purposes - Related persons​​​​​​​ - Related party valuation - Acceptance of transaction value - Influence of relationship on price.

SVB proceedings - STPI unit - Valuation for assessment - HELD THAT: - The Tribunal held that the dispute before the authorities concerned determination of the value of imported goods under section 14 and the applicable valuation rules. There was no special provision excluding an STPI unit from such valuation exercise. The fact that no customs duty was payable because of the appellant's STPI status only meant that no demand of duty would arise; it did not render the valuation proceedings without jurisdiction or liable to be dropped. [Paras 10, 12]

The challenge to the continuance of the SVB proceedings on the ground of the appellant being an STPI unit was rejected.

Related persons - Mutuality of interest - Control - HELD THAT: - The Tribunal found it undisputed that the appellant was a wholly owned subsidiary of its parent company. On that basis, it held that the parent company necessarily had an interest in the subsidiary's business, and the subsidiary also had an interest in the parent's business as it operated for the parent's benefit. For the period after 2007, rule 2(2) expressly treated persons as related where one directly or indirectly controlled the other, and that requirement stood satisfied. The contention that mere shareholding did not establish mutuality of interest was therefore not accepted. [Paras 14, 18, 20]

The relationship between the appellant and Cadence USA was held to be one of related persons throughout the period in dispute.

Transaction value - Loading of value - Arm's length price -HELD THAT:- As regards the Palladium system imported in 2006, the Tribunal examined the cost certificates and found that the sale price covered total costs together with representative or reasonable profit, and there was no contrary material on record. It therefore accepted that the relationship had not influenced the price and held that addition to the invoice value was unwarranted. In contrast, for the other goods imported after 2007, the appellant's own material showed that the commercial invoices were issued only for customs purposes and did not include any profit margin. Since an unrelated sale would necessarily have carried profit, the Assistant Commissioner was justified in adding the average profit margin derived from the supplier's own profitability data to determine the assessable value. [Paras 30, 31, 32, 33, 34]

The addition to the invoice value was set aside for the Palladium system imported in 2006, but the loading of profit margin for the other goods was upheld.

Final Conclusion: The Tribunal partly allowed the appeal. It held that the parties were related and that the valuation proceedings were maintainable notwithstanding the appellant's STPI status, but set aside the loading of value for the Palladium system imported in 2006 while sustaining the addition of profit margin in respect of the other goods.

Seeking incorporation of additional grounds - Misdeclaration of imported goods - Penalty for short-paid duty - confiscation of the goods for misdeclaration - suppression of facts. -HELD THAT:- The Tribunal held that once confiscation of the goods under sections 111(l) and 111(m) had been upheld, the finding that there was no wilful misdeclaration or suppression was inconsistent with that very conclusion. The importer had not produced any cogent material to support the plea that the misdeclaration was due to the supplier's mistake, and had in fact accepted the redetermined value and paid the differential duty. Since the duty originally paid at the time of filing the Bill of Entry was lower than the duty payable on the redetermined assessable value, the duty was rightly treated as short paid. In the absence of any evidence showing a bona fide explanation for the misdeclaration, penalty under section 114A was attracted, and the reduction of redemption fine by the Commissioner (Appeals) was also found erroneous. [Paras 7, 8, 9, 10]

Penalty under section 114A and the redemption fine as ordered by the original adjudicating authority were restored, and the appellate order to the contrary was set aside.

Final Conclusion: The Tribunal held that the misdeclaration leading to short payment of customs duty was not shown to be bona fide, and that the Commissioner (Appeals) erred in waiving penalty and reducing redemption fine while sustaining confiscation. The departmental appeal was accordingly allowed and the impugned order was set aside.

Customs valuation of imported goods - Classification of goods -lip seal - classifiable under heading 4016 as an article of vulcanised rubber or under heading 8708 as a motor vehicle part - Extended period of limitation - valuation demand required remand for examination of freight certificates - Wilful misstatement - penalty consequential to limitation - preferential rate of duty - general rules for interpretation - Penalty for suppression.

Customs valuation of imported goods - HELD THAT: - The Tribunal recorded that there was no dispute on the legal position that freight up to the place of importation had to be included in the assessable value. Since the appellant claimed to have now obtained the freight certificates which were not produced at the time of adjudication, the matter required reconsideration by the Commissioner for verification of those documents and fresh decision on valuation. [Paras 7]

The valuation issue was remanded to the Commissioner for verification of the freight certificates and fresh determination.

Tariff classification - Recording of concession - HELD THAT: - The Commissioner proceeded on the basis that the appellant had accepted classification of the heater as part of the automotive air-conditioner under the tariff heading adopted in the show cause notice. Before the Tribunal, the appellant asserted that no such acceptance had been made and claimed a different classification. As there was a dispute regarding the factual basis on which the Commissioner proceeded, the classification of this good was directed to be reconsidered by the Commissioner. [Paras 11]

The question of classification of heater was remanded to the Commissioner for fresh decision.

Tariff classification - Opportunity to explain use of goods - HELD THAT: - The Tribunal found that the Commissioner's conclusion on classification rested on the appellant's failure to explain the usage of CAM in manufacture of car air-conditioners. Since the proper classification depended upon the role of the item and the appellant sought to explain it, the matter required remand so that such explanation could be considered and classification determined afresh. [Paras 13]

The classification dispute concerning CAM was remanded to the Commissioner for fresh consideration after allowing the appellant to explain its role.

Tariff classification - Section Note exclusion from Chapter 87 - General Rules for Interpretation - Lip seal - classifiable under CTI 4016 93 30 Or under CTI 8708 99 00. - HELD THAT: - The Tribunal held that the competing tariff entries had to be examined in the light of the General Rules for Interpretation and the relevant Section Note. It found that there was no dispute that lip seal was predominantly made of rubber. Section Note 2(a) to Section XVII expressly excludes joints, washers and the like, and other articles of vulcanised rubber, even if identifiable as parts of goods of that Section, from classification under Chapter 87. Applying that statutory exclusion, the Tribunal held that lip seals could not be classified as parts and accessories of motor vehicles under Chapter 87 and had to be classified according to their constituent material under heading 4016. [Paras 19, 20, 21]

The classification adopted in the impugned order under CTI 8708 99 00 was set aside and the appellant's classification under CTI 4016 93 30 was upheld.

Extended period of limitation - Suppression of facts - Penalty for suppression - - HELD THAT: - The Tribunal held that invocation of the extended period under section 28(4) required collusion, wilful misstatement or suppression of facts leading to non-payment or short payment of duty. Since classification formed part of assessment and a difference of view, even if incorrect, on classification did not by itself establish collusion, wilful misstatement or suppression with intent to evade duty, the necessary ingredients for extended limitation were absent. As the ingredients for penalty under section 114A were the same, the penalty also could not survive. [Paras 22, 23]

The demands for the extended period were set aside and the penalty imposed under section 114A was also set aside.

Final Conclusion: The appeal was partly allowed. Classification of lip seal was decided in favour of the appellant, the demands for the extended period and the penalty were set aside, and the matters relating to valuation, heater and CAM were remanded to the Commissioner for fresh decision after giving the appellant opportunity to present its case and evidence.

Certificate of origin under preferential trade agreement - Preferential duty exemption - Sample testing and extrapolation of test results - Extended period of limitation - Self-assessment and recovery of duty - Customs Duty exemption benefit granted by way of these SAFTA Certificates of Origin.

Certificate of origin under preferential trade agreement - HELD THAT: - The Tribunal found that the certificates of origin furnished at the time of import were later referred to the Bangladesh authorities, who, after verification of the supporting documents, confirmed their correctness and stated that the rapeseed was locally procured and of Bangladesh origin. In these circumstances, the revenue could not unilaterally disregard the certificates on the assumption that Bangladesh could not produce rapeseed yielding oil with less than 2% erucic acid. The Tribunal also held that Section 28DA, which imposes a higher obligation on the importer to possess and verify origin-related information, came into force only on 21st September 2020; since all the imports in dispute were prior thereto, that additional statutory burden could not be placed on the appellants. [Paras 33, 43, 44, 45, 60]

Denial of the preferential exemption on the basis of alleged invalidity of the certificates of origin was held unsustainable.

Sample testing and extrapolation of test results - HELD THAT: - The Tribunal compared the laboratory reports obtained at the time of import with the later reports relied upon in the show cause proceedings and found serious inconsistency, including uniform reporting of nil erucic acid in the later tests despite differing values in the original CRCL reports. It further noted that several consignments whose original CRCL reports showed erucic acid above 2% were not sampled at all in the later exercise. On these facts, the Tribunal held that selective second testing of a few consignments, without giving the appellants any further opportunity for retesting, and then extending those results to all consignments, was legally untenable. [Paras 47, 49, 51, 60]

The demand founded on selective retesting and extrapolation of results to all consignments was set aside.

Extended period of limitation - Suppression of facts - Recovery of duty - HELD THAT: - The Tribunal found that all documents supporting the claim for exemption, including the certificates of origin, had been produced at the time of import; the goods were tested then and cleared in the normal course; and the later investigation was undertaken only after more than two years on the basis of material already available with the department. It also found no evidence linking the appellants to any fraud or manipulation in the issuance of the certificates of origin. In the absence of any material establishing collusion, wilful misstatement or suppression, the larger period could not be invoked. [Paras 52, 53, 60]

The entire proceedings were held to be time-barred.

Self-assessment and recovery of duty - Re-assessment and demand proceedings - Appeal against self-assessed bill of entry - HELD THAT: - The Tribunal held that Sections 17 and 28 operate in different fields, with Section 17(4) itself permitting reassessment without prejudice to other action under the Act. It observed that where information regarding a contravention is later received, resort to Section 28 for recovery of duty is not by itself impermissible, and the noticee may still contest the allegation of suppression. Accordingly, the Tribunal did not accept the appellants' contention that the absence of a departmental appeal against the self-assessed bills of entry rendered the proceedings invalid, though it separately held on facts that suppression was not made out and the extended period therefore failed. [Paras 58, 59]

The objection that recovery proceedings were incompetent for want of a departmental appeal against the self-assessed bills of entry was rejected.

Final Conclusion: The Tribunal allowed all the appeals and set aside the demands of duty, interest and penalties. It held that the revenue could neither disregard the affirmed certificates of origin nor sustain the case on selective retesting of a few consignments, and in any event the extended period of limitation was not invocable on the facts found.

Jurisdiction of Customs authorities in raising demands pertaining to IGST on exports -Interpretation of IGST Schedule on imported goods - Reference to Larger Bench

Appellate jurisdiction - Interpretation of IGST Schedule on imported goods - Reference to Larger Bench - HELD THAT: - The Tribunal examined the scheme of the Customs Act, the Customs Tariff Act, the IGST Act and the appellate provisions under the GST enactments. It noted that though the appeal arose from an order passed by the Commissioner of Customs and Section 129A of the Customs Act confers appellate jurisdiction against such orders, the substantive controversy involved interpretation of the IGST rate schedules, which form part of the IGST framework. The Tribunal further observed that GST enactments separately provide an appellate structure for matters arising under those laws, and that conflicting decisions had been cited on whether customs authorities and CESTAT can determine the applicable IGST rate on imports. In view of this unresolved jurisdictional conflict, the Bench held that the preliminary issue should be authoritatively decided first and therefore referred the formulated questions to the President for constitution of a Larger Bench, without entering upon the merits of the classification or rate dispute. [Paras 6, 7]

The matter was referred for decision by a Larger Bench on the jurisdictional issue, and the merits were left open.

Final Conclusion: The Tribunal did not decide the dispute on merits. Holding that the threshold question of CESTAT's jurisdiction over customs appeals involving interpretation of IGST rate schedules required authoritative resolution, it referred the matter to the President for constitution of a Larger Bench.

Duty liability on re-useable metal containers which are owned by overseas entity imported along with the raw material imported - Appropriation of rental value of packing material - Customs duty on returnable containers - Assessable value of imported goods - HELD THAT:- The Tribunal held that, notwithstanding their reusable nature, the metal containers used for packing the imported goods could not be regarded as independent goods for levy of customs duty under the Customs Act, 1962. Applying the principle stated in Chairman, Board of Trustees, Cochin Port Trust Vs. Arebee Star Maritime Agencies Private Limited and Others [2020 (8) TMI 300 - SUPREME COURT], the Tribunal found that the Department's attempt to demand duty on the containers as separately imported goods was unsustainable. [Paras 22]

The demand of differential customs duty on the imported metal containers was set aside.

Assessable value of imported goods -Cost of packing - HELD THAT: - The Tribunal held that under section 14 of the Customs Act, 1962 read with Rule 10(1) of the Customs Valuation Rules, 2007, only the cost of packing to the extent incurred or payable by the appellant could be included. On the record, the appropriate rental value of the packing material already stood included in the CIF value of the imported synthetic rubber. Consequently, the allegation of misdeclaration of value based on separate addition of the container value was not legally sustainable. [Paras 22]

The reassessment of value by adding the metal container value, and the consequential interest and penalties, were set aside.

Final Conclusion: The Tribunal held that the reusable metal containers accompanying the imported raw material were not separately dutiable goods and that their value could not be added again to the assessable value of the imported synthetic rubber. The impugned orders confirming duty, interest and penalties were therefore set aside and the appeals were allowed with consequential relief.

Import of new car - Benefit of Notification No. 21/2002-Cus. -Confiscation and redemption fine under Section 125 - Technical registration for export - Redemption fine - Registration of the imported vehicle in the exporting country shortly before import -HELD THAT:- The Tribunal found it undisputed that the car was manufactured in April 2008, registered with the United Kingdom authorities in May 2008, and imported on 30.05.2008. Applying CBEC Circular No. 1/2005-Customs, it held that where registration in the exporting country is only a technical requirement for transportation of the vehicle from the showroom to the port, the vehicle cannot be treated as an old car. Following Rahul Bhandare vs. Commissioner of Customs (Imports), Mumbai [2013 (2) TMI 316 - CESTAT, MUMBAI], the Tribunal held that the car remained a new car and the concessional notification benefit had been rightly extended. Once the import was validly treated as that of a new car, no proceedings against the car after importation survived and no redemption fine could be imposed. [Paras 6, 8]

The car was held to be a new car; the proceedings against the car were set aside and the redemption fine imposed under section 125 was deleted.

Final Conclusion: The Tribunal held that the vehicle was a new car and that its prior registration in the United Kingdom was only for export-related movement. On that basis, the confiscation-related proceedings against the car were held unsustainable and the redemption fine was set aside.

Vicarious criminal liability of former director - Absence of specific allegations in complaint - Clean Chit - offences under Sections 447 and 448 of the Companies Act, 2013 on the basis of a bare and generalized complaint - Quashment of Proceedings -Look out circular - HELD THAT: - The Court found that the petitioner had resigned from the directorship well before the company commenced its business operations, while the complaint itself attributed the impugned activities to the period commencing from 2013-14 onwards. In the complaint, the petitioner was arrayed only as a former director, without any definite averment as to his role in the alleged fraudulent acts or false statements. The Court also noticed that, on the same factual background, the petitioner had been examined by two investigating agencies and was not charge-sheeted by either of them. Mere earlier association with the company, without clear and specific allegations showing involvement in the alleged offence, was held insufficient to sustain criminal prosecution. [Paras 10, 11]

The proceedings against the petitioner in the special case were quashed.

Look out circular - HELD THAT: - The Court held that the look out circular had been obtained on the basis of the proceedings initiated against the company, but in the charge-sheet filed by the Economic Offences Wing the petitioner was not shown as an accused. In view of the finding that the prosecution launched against him was liable to be obliterated for want of any actionable allegation, the continuation of the look out circular against him lacked basis. [Paras 12]

The look out circular issued against the petitioner was quashed.

Final Conclusion: The Court allowed both petitions, holding that the petitioner, a former director who had resigned before commencement of the company's business, could not be prosecuted in the absence of specific allegations linking him to the alleged fraud. Consequently, the criminal proceedings and the look out circular against him were both quashed.

Corporate Insolvency Resolution Process - Period of limitation for filing the petition under Section 7 - Date of default - Exclusion of moratorium period - Admission of debt by the Interim Resolution Professional - Acknowledgment under Section 18 of the Limitation Act.

Limitation for Section 7 application - Date of default - Exclusion of moratorium period - HELD THAT: - The Court held that an application under Section 7 is governed by Article 137 of the Limitation Act and the right to apply accrues on the date of default. Since the accounts were declared NPA on 06.12.2016, limitation commenced from that date and not from expiry of proceedings under the SARFAESI Act. After excluding the period during which moratorium operated under Section 60(6) of the Code, together with the period excluded under this Court's Covid-related orders, only three days of limitation remained from 29.07.2024, expiring on 01.08.2024. As the Section 7 application was filed only on 23.09.2024, it was beyond time. [Paras 13, 14, 15]

The plea that limitation should run from 06.12.2017 was rejected, and the Section 7 application was held to be time-barred.

Acknowledgment under Section 18 of the Limitation Act - Role of IRP/RP - HELD THAT: - The Court held that a valid acknowledgment under Section 18 must emanate from the party against whom the right is claimed, or a duly authorised person, and must disclose a conscious admission of a subsisting jural relationship and existing liability before expiry of limitation. The IRP/RP has no adjudicatory role and merely performs the statutory function of collating and admitting claims. Such admission is only an administrative or clerical act and is no more than an entry or recital of debt; it does not amount to an acknowledgment of liability. The Court further held that, in any event, an acknowledgment can extend limitation only if made within the subsisting period of limitation, which was not so in the present case. [Paras 16, 17]

The NCLAT's view that admission of the claim by the IRP/RP constituted acknowledgment was rejected.

Final Conclusion: The Court held that limitation for the Section 7 application commenced on the date of NPA, and even after giving the benefit of statutory and Covid-related exclusions, the application was filed beyond time. It further held that admission of a claim by the IRP/RP is not an acknowledgment under Section 18 of the Limitation Act; consequently, the orders of the NCLAT and NCLT were set aside and the appeals were allowed.

Commencement of CIRP - Moratorium on assessment proceedings - Provident fund claim based on Area Enforcement Report - Crystallisation of the demand under Section 7A. -HELD THAT: - The Tribunal found that CIRP had commenced before the Area Enforcement Report on which the appellant founded its claim, and that the claim under Section 7A had never been crystallised prior to its lodgement. It accepted the view that assessment proceedings before the EPFO could not continue after initiation of CIRP during the moratorium, and that a delayed claim resting only on such post-CIRP Area Enforcement Report could not furnish a valid basis for admission. The Tribunal followed its earlier decisions taking the same view and held that no ground for interference with the rejection of the application was made out. [Paras 6, 7, 8, 9]

The rejection of the appellant's delayed claim was upheld and the appeal was dismissed.

Final Conclusion: The Tribunal held that the appellant's claim, founded on an Area Enforcement Report generated after commencement of CIRP and without prior crystallisation of liability, could not be entertained during moratorium. Finding no error in the impugned order, it dismissed the appeal.

Entitlement to a refund or set-off on account of tariff revision reflected in revised bills after approval of the resolution plan - Extinguishment of pre-CIRP claims and counter-claims - Tariff revision adjustment. - HELD THAT: - The Tribunal held that the revised bills generated after the tariff orders merely reflected the respondent's internal accounting exercise for determining the reduced extent of its pre-CIRP claim and bad debt, and did not amount to any enforceable demand against the appellant beyond the amount provided in the approved plan. Where there were outstanding electricity arrears for the relevant earlier period, any later reduction in tariff could only operate to reduce those arrears; it did not create an independent right in favour of the appellant to seek refund. Once the resolution plan was approved, the pre-CIRP liabilities and corresponding claims stood settled and frozen inter se the parties, and since no additional pre-CIRP demand was being fastened on the appellant, the reliefs sought for adjustment and refund were not maintainable. The prayer relating to reconnection did not survive separately, as appropriate direction had already been issued. [Paras 16, 17, 19, 20]

The application was rightly dismissed, as no refund, adjustment, or further relief could be claimed by the appellant on the basis of the post-approval tariff revision.

Final Conclusion: The Appellate Tribunal upheld the dismissal of the appellant's application and held that the appellant could not claim any refund or adjustment arising out of subsequent tariff revision for the pre-CIRP period beyond the framework of the approved resolution plan. The appeal was accordingly dismissed.

Maintainability - Pre-existing dispute - Operational debt crystallisation - Record of dispute in information utility. - HELD THAT: - The Appellate Tribunal found that the payment terms required mutual agreement and reconciliation of the running account bills, and there was nothing to show that the amounts claimed had been finally accepted by both parties. The reply to the demand notice specifically disputed the quality of services, performance under the work order, excess billing, absence of proper supporting documents, adjustments and set-offs, besides statutory compliance defaults and retention-related deductions. The NeSL material also showed that the default amount had been disputed by the corporate debtor. Applying the principle in Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd.[2017 (9) TMI 1270 - SUPREME COURT], the Tribunal held that once there is a plausible dispute requiring investigation, and it is not spurious or illusory, the Adjudicating Authority must reject the Section 9 application without entering into the merits of that dispute. [Paras 7, 9, 11, 12]

The finding of pre-existing dispute was upheld, and rejection of the Section 9 application was affirmed.

Final Conclusion: The Appellate Tribunal upheld the dismissal of the Section 9 application, holding that the materials on record disclosed a real and genuine pre-existing dispute, including a disputed record before the information utility. The appeal was accordingly dismissed, with liberty to the appellant to pursue other civil remedies in accordance with law.

Surplus cash flow generated during the corporate insolvency resolution process - Waterfall Mechanism - Extinguishment of Claims - Binding effect of approved resolution plan - Insolvency estate - absence of an express clause in the resolution plan dealing with such surplus - Distribution under Section 53 - Going Concern - Commercial Wisdom - Value Maximisation.

CIRP-generated surplus - Insolvency estate - HELD THAT:- The Appellate Tribunal held that only those assets and values which were identified, contemplated and provided for in the resolution plan could be said to vest in the successful resolution applicant. On examining clauses 3.9.5, 3.9.8 and 4.1(ii), it found that the plan did not provide for vesting of surplus cash flow generated during CIRP in the appellant. The reference to margin money and fixed deposits in clause 3.9.5 did not cover such surplus, and clause 3.9.8 merely permitted the Resolution Professional to utilise surplus cash flow for foreclosure of outstanding dues without creating any proprietary right in favour of the appellant. Since the surplus arose during CIRP while the corporate debtor was under the control of the Resolution Professional and the oversight of the CoC, and the appellant had no role in generating it, the surplus could not be treated as an accretion passing to the appellant merely because it was later kept in fixed deposits. In the absence of any contractual provision in the plan governing its treatment, the surplus retained its character as part of the insolvency estate and was liable to be distributed in accordance with Section 53. The Tribunal further held that such direction did not modify the approved plan, but only addressed a situation not contemplated by it. The authorities relied on by the appellant, namely Ebix Singapore Pvt. Ltd. vs. CoC of Educomp Solutions Ltd. [2021 (9) TMI 672 - SUPREME COURT] Committee of Creditors of Essar Steel India Pvt. Ltd. vs. Satish Kumar Gupta & Ors. [2019 (11) TMI 731 - SUPREME COURT] Ghanshyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Co. Ltd. [2021 (4) TMI 613 - SUPREME COURT], and SPS Steels Rolling Mills Ltd. vs. Central Bank of India [2026 (3) TMI 1322 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI], were found distinguishable. [Paras 50, 51, 52, 53, 54]

The appellant was held not entitled to the CIRP-generated surplus, and the direction for its distribution in accordance with Section 53 was upheld.

Final Conclusion: The Appellate Tribunal dismissed the appeal and affirmed that the surplus generated during CIRP, not having been contemplated or allocated under the approved resolution plan, formed part of the insolvency estate and was rightly directed to be distributed under Section 53. The impugned order was held not to amount to any modification of the approved plan.

Applications under Section 95 of the Insolvency and Bankruptcy Code, 2016 against the personal guarantors - barred by limitation - Article 137 of the Limitation Act, 1963 - right to initiate insolvency proceedings accrues when default occurs - Invocation of personal guarantee - Failure to consider material acknowledgment - non-payment/ fresh default provided fresh cause of action - Acknowledgment of debt.

Article 137 limitation - Fresh cause of action on decree - HELD THAT: - The Appellate Tribunal held that the Adjudicating Authority erred in treating the Form B demand notice as the date of invocation of guarantee, when the guarantee had admittedly already been invoked on 11.08.2016. Relying on SBI vs. Deepak Kumar Singhania [2025 (4) TMI 455 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] it held that notice under Rule 7(1) in Form B is not itself invocation of the guarantee, and default of the personal guarantor must already exist before such notice is issued. The Tribunal further held that the decree passed by the Joint Registrar on 15.09.2017, having been obtained within the original limitation period, furnished a fresh cause of action for three years, but the Adjudicating Authority committed patent illegality in calculating the benefit of the Supreme Court's Covid limitation orders by excluding 531 days without basis. The Tribunal also observed that the letters dated 17.03.2022 and 12.07.2022 might amount to acknowledgment in writing extending limitation, and that the admission of the creditor's claim in the CIRP of the corporate debtor was also relied on by the respondents as extending limitation. Since the impugned orders contained no discussion on these material aspects, the limitation issue had not been properly adjudicated. The matter therefore required fresh consideration on limitation by a reasoned order. [Paras 57, 61, 62, 63, 64]

The impugned orders were set aside and the Section 95 proceedings were remanded to the Adjudicating Authority for fresh decision on limitation after considering the relevant materials and passing a reasoned order.

Final Conclusion: The Appellate Tribunal held that the impugned orders on admission of the Section 95 applications were vitiated by errors in identifying the date of invocation of guarantee, in computing limitation, and by failure to consider the alleged acknowledgments and other material relevant to limitation. The appeals were allowed and the matters were remanded for fresh decision by a reasoned order.

Condonation of delay - Delay in filing the claim - CIRP after approval of the resolution plan - Encumbrances under SARFAESI sale certificate - consideration for time value of money - Commercial effect of borrowing - allotment of flats in lieu of legal fees, without any disbursement by the claimant.

Delayed claims in CIRP - Condonation of delay - Commercial entity - Refusal to condone the delay in filing the appellant's claim after approval of the resolution plan by the Committee of Creditors was upheld. - HELD THAT: - The Tribunal held that the reasons recorded for declining condonation could not be termed arbitrary, particularly when the appellant was a commercial entity and its claim was lodged only after the resolution plan had already been approved by the CoC and was pending consideration before the Adjudicating Authority. The principle applied was that CIRP is a time-bound process and belated claims cannot be permitted to reopen the process merely because approval of the plan by the Adjudicating Authority was still pending. The Tribunal further held that the decision in Puneet Kaur Vs. K.V. Developers Private Limited & Ors [2022 (6) TMI 108 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] did not assist the appellant, since that principle operated where the corporate debtor's records reflected the homebuyers' payments, whereas the appellant's claim was not found reflected in the corporate debtor's records. [Paras 8, 9, 10, 11]

No error was found in refusing condonation of delay and the delayed claim was rightly not entertained.

SARFAESI auction sale - Sale certificate encumbrances - Allottee claims - HELD THAT: - The Tribunal found that, irrespective of the appellant's challenge to the District Magistrate's order, the sale certificate issued in favour of the corporate debtor expressly recorded that the property was sold free from encumbrances except flats allotted to respective allottees as per Annexure 1. The record showed that Annexure 1 contained the list of the allottees whose encumbrances stood preserved, and the appellant's name did not appear therein. On that basis, the Tribunal rejected the contention that purchase on an as is where is basis imposed liability upon the corporate debtor towards every alleged allottee. The liability taken over by the corporate debtor was confined to the encumbrances expressly preserved in the sale certificate. [Paras 12, 13, 14, 15, 16]

The appellant's claim was not enforceable against the corporate debtor on the basis of the SARFAESI sale and was rightly rejected on merits.

Financial debt - Disbursement for time value of money - Allotment in lieu of professional fees - HELD THAT: - The Tribunal held that the essential requirement for a debt to qualify as financial debt is disbursement against consideration for the time value of money. Although amounts raised from allottees in a real estate project may be deemed to have the commercial effect of borrowing, that deeming fiction applies where money is raised from the allottee. In the present case, the appellant's own case was that the allotment was made towards adjustment of legal fees and not against any payment or disbursement made by it to the corporate debtor. Applying the principle stated in Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited Vs. Axis Bank Ltd. & Ors.[2020 (2) TMI 1259 - SUPREME COURT], and the reasoning in M/s. Propertree Real Estate Solutions Pvt. Ltd. Vs. A. Viswanadha Sarma, Resolution Professional Sunibera Developers Pvt. Ltd. [2025 (8) TMI 723 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI], the Tribunal held that the claim was outside the ambit of financial debt. [Paras 17, 18, 19, 20]

The appellant was not a financial creditor and its claim was not admissible as a financial debt.

Final Conclusion: The appeal was dismissed. The Tribunal upheld rejection of the appellant's belated claim, held that the SARFAESI sale certificate did not preserve any liability towards the appellant, and further held that allotment of units in lieu of legal fees did not give rise to a financial debt.

Condonation of delay - Levy of service tax - amount reimbursement of expenses of Advocate - reverse charge mechanism - Liability of service recipient to pay service tax - Service Provider has charged and collected the Service Tax from the appellant - applicability of reverse charge mechanism - Levy of service tax - HELD THAT:- Delay was condoned, and the Civil Appeals were disposed of on the ground that the stakes were revenue neutral; the question of law arising from issue nos. 1 and 4 was kept open to be considered in an appropriate case.

Valuation of taxable service - commission or incentive received on booking and sale of cargo space - Custom House Agent services - Extended period of limitation - Judicial discipline - Principal-to-Principal Transaction - Ultra Vires - Retrospective Amendment.

Whether the appellant is liable to pay service tax on the reimbursement of expenses recovered during rendering CHA activities?​​​​​​​ - HELD THAT: - The Tribunal held that the demand had been sustained solely by invoking Rule 5(1) and 5(2) of the Service Tax (Determination of Value) Rules, 2006 read with Section 67 of the Finance Act, 1994, even though the show cause notice itself accepted that service tax had been discharged on the agency fees. Following the appellant's own earlier case [2025 (9) TMI 754 - CESTAT CHENNAI] and the law declared by the Supreme Court in UOI v. Intercontinental Consultants & Technocrats (P) Ltd. [2018 (3) TMI 357 - SUPREME COURT], it held that prior to 14.05.2015, reimbursable expenditure or costs incurred in the course of providing service could not be added to the value of taxable service, since Rule 5 travelled beyond Section 67. Once the statutory basis for such inclusion failed, the demand on clearing and forwarding charges, due agent charges and similar reimbursements became unsustainable. [Paras 11]

The demand of service tax on reimbursed expenses under CHA service was held wholly untenable and liable to be set aside.

Whether the Appellant is liable to pay service tax on the incentive/commission received for sale of cargo space? -HELD THAT: - Relying on the appellant's own earlier order and the decisions in International Clearing and Shipping Agency v. CGST & CE and AVR Cargo Agency Pvt Ltd. [2023 (11) TMI 104 - CESTAT CHENNAI], the Tribunal held that the appellant was rendering service to the exporter and not to the airline or shipping line. The incentive or commission was linked to the appellant's own trading in cargo space and not to promotion or marketing of the service of a client. In the absence of the required service provider-service recipient relationship with the airline or shipping line, the receipts could not be treated as consideration for Business Auxiliary Service. [Paras 12, 13]

The demand on booking of cargo space and on incentives received from steamer agents or shipping lines was held wholly untenable.

Extended period of limitation - Suppression of facts - HELD THAT: - The Tribunal found that the show cause notice itself recorded that an earlier investigation had already been conducted and an earlier notice had been issued covering the period up to 31.03.2005. Since the Department was already aware of the appellant's activities, invocation of the extended period for the subsequent notice was untenable. It further held that there was no evidence of any positive act of suppression or wilful misstatement with intent to evade tax, and the burden resting on the Revenue to establish those ingredients had not been discharged. [Paras 14, 15]

The invocation of the extended period was held unsustainable.

Final Conclusion: The Tribunal set aside the impugned appellate order and allowed the appeal. It held that neither the inclusion of reimbursed expenses in taxable value nor the levy under Business Auxiliary Service on cargo-space incentives was sustainable, and in any case the extended period of limitation was not available to the Revenue.

Liability to service tax - Hiring of dredgers, vessels and allied equipment from foreign owners under bareboat charter arrangements - supply of tangible goods service or declared service - Reverse charge mechanism​​​​​​​ - Transfer of right of possession and effective control - non-resident owners having no permanent establishment in India - Binding effect of final order in assessee's own case.

Bareboat charter - Transfer of right of possession and effective control - Supply of tangible goods service - Declared service - HELD THAT: - The Tribunal held that the impugned order proceeded on the premise that the transfer of goods to the appellant was without transfer of right to use. That premise was contrary to the binding finding already rendered in the appellant's own case [2018 (3) TMI 633 - CESTAT CHENNAI], where identical bareboat charter arrangements were held to involve transfer of right of possession and effective control of the vessels and dredgers. Once that position was accepted, the transaction fell outside the taxable category of supply of tangible goods service. For the period after 01-07-2012 also, the adjudicating authority's conclusion under the declared service provisions failed, since it rested on the very same erroneous assumption that there was no transfer of right to use goods. The authorities cited by the appellant were also found apposite to this view. [Paras 8, 10, 11]

The service tax demand, with interest and penalties, was unsustainable on merits and was liable to be set aside.

Finality of earlier decision - Consistency in assessee's own case - HELD THAT: - The Tribunal found that the earlier final order in the appellant's own case, deciding the nature and taxability of the very transaction, had not been shown to have been challenged further and had therefore attained finality. In the absence of any allegation or evidence that the present transactions were different in nature, that final determination between the parties furnished an independent and compelling reason to decide the dispute in the appellant's favour. The Tribunal referred to the principle recognised in CCE, Mumbai v Bigen Industries Ltd. [2006 (4) TMI 124 - SUPREME COURT] and Jayswals Neco Ltd v. CCE, Nagpur [2006 (1) TMI 133 - SUPREME COURT] in this regard. [Paras 9]

The earlier concluded determination bound the parties for the present period as well, reinforcing the setting aside of the impugned demand.

Final Conclusion: The Tribunal held that the bareboat charter arrangements involved transfer of possession and effective control and were therefore outside the ambit of taxable service. The impugned order was set aside, and the appeal was allowed with consequential relief.

Demand under Rule 6(3) - Exclusion for services provided to SEZ - Input service credit on rent-a-cab and insurance services - cenvat credit on common input services used for providing taxable output service as well as services provided to SEZ - Penalty in Cenvat credit disputes.

Whether as a consequence of having rendered services to SEZ, the appellant was required to pay an amount equal to the specified percentage of value of exempted service in terms of sub-rule 3 of Rule 6 of the Cenvat Credit Rules 2004 for the period from March 2011 to September 2011, which according to the Department fell outside the purview of Rule 6 (6A) as it was applicable for the period from 1002-2006 to 28-02-2011 only - HELD THAT: - The Tribunal held that Section 144 of the Finance Act, 2012 gave retrospective effect to sub-rule (6A) for the period from 10.02.2006 to 28.02.2011, but that did not curtail the independent operation of sub-rule (6A) as inserted by Notification No. 3/2011-CE (NT). Since the amendment rules themselves provided for insertion of sub-rule (6A) with effect from 01.03.2011 and the rules otherwise came into force from 01.04.2011, the exclusion of Rule 6(1) to (4) in relation to services provided to SEZ continued thereafter as notified. On that construction, the Department's case that the benefit ended on 28.02.2011 was held to be misconceived. [Paras 8, 9]

The appellate authority's view that no amount was payable under Rule 6(3) for services provided to SEZ was upheld, and the Department's appeal on this issue was rejected.

Input service credit on rent-a-cab services - Input service credit on insurance services - HELD THAT: - For the disputed period, the Tribunal accepted the appellant's explanation that rent-a-cab service was used for pick-up and drop of employees because the factories were in remote areas, and that insurance service was required under client contracts for manpower deployed under the Employees State Insurance Scheme. Taking note of the decisions cited in support and applying judicial discipline, the Tribunal found the credit allowable. It also found that the show cause notices contained no allegation, much less evidence, that the services were used primarily for personal use or consumption of employees, or formed part of the employees' CTC. [Paras 11]

The denial of Cenvat credit on rent-a-cab and insurance services could not be sustained.

Penalty in Cenvat credit disputes - HELD THAT: - The Tribunal found no error in the appellate authority's deletion of penalties after noticing the decision in Maruti Suzuki Ltd. vs CCE [2009 (8) TMI 14 - SUPREME COURT]. It further held that, once the appellant succeeded on the merits of the credit dispute, no question of penalty survived. [Paras 12]

The penalties were rightly set aside.

Final Conclusion: The assessee's appeals were allowed and the impugned order, insofar as it upheld denial of credit, was set aside. The Department's appeal was dismissed, the Rule 6(3) demand relating to services provided to SEZ was held unsustainable, and the penalties remained deleted.

Entitlement to exemption and the service tax demand on merits - Governmental authority - Exemption for services in relation to functions entrusted to Municipality or Panchayat - Extended period of limitation - Penalty for bona fide interpretational dispute

Governmental authority - Exemption notification - Statutory functions - Municipal functions - HELD THAT: - The Tribunal held that though the appellants were registered societies, they were established and wholly controlled by the Government of Haryana and functioned under direct governmental supervision to deliver citizen-centric statutory services such as issuance of licences and certificates through e-governance platforms. The functions performed were governmental and civic in nature, could not be performed by private authorities, and the amounts collected were statutory fees rather than commercial consideration. On that basis, the Tribunal held that the appellants satisfied the amended definition of governmental authority in Notification No. 25/2012-ST, as entities established by Government with complete control to carry out functions relatable to Article 243W. Entries 39 and 60 of the notification were construed as extending exemption to governmental authorities executing constitutional local body functions, and not merely to municipalities or panchayats acting directly. The denial of exemption was therefore found legally unsustainable. [Paras 12, 13, 14, 15, 16]

The services rendered by the appellants were held exempt under Notification No. 25/2012-ST and the demand on merits was set aside.

Extended period of limitation - Suppression of facts - Bona fide belief - Penalty - HELD THAT: - The Tribunal found that the department had failed to establish the ingredients necessary for invoking the proviso to Section 73(1), particularly suppression or intent to evade tax. The appellants were government-controlled entities whose accounts and receipts were subject to audit and governmental scrutiny, and their activities were already in the public domain. The dispute regarding taxability and exemption was treated as an interpretational one, and the appellants were found to have acted under a bona fide belief that, being governmental authorities performing municipal functions, their services were exempt and registration was unnecessary. In the absence of any deliberate concealment or wilful misstatement, the extended period could not be applied; for the same reason, penalties under Sections 77 and 78 were also held not sustainable. [Paras 17, 18]

The demand beyond the normal period and the penalties imposed were set aside.

Final Conclusion: The Tribunal held that the appellants, though registered as societies, were governmental authorities established and controlled by the State to perform statutory public functions, and their services were exempt under Notification No. 25/2012-ST. The demand was also held barred by the extended period, with consequential penalties unsustainable; the impugned order was accordingly set aside and all appeals were allowed.

Sale of space for advertisement - Negative List of services - Bundled services - Extended period of limitation - Extended period of limitation - Bona fide belief -Activity of providing hoarding space for display of advertisements, with no involvement in conceptualisation, visualisation or designing of the advertisement - HELD THAT: - The Tribunal found the case to be squarely covered by Shah Publicity. On examination of the purchase orders and invoices, it held that the appellant charged a consolidated amount at a fixed rate for a fixed period towards advertisement space, and there were no separate charges for making or preparing the advertisement. Since the service rendered was confined to display of advertisement in the space provided, and not to creation of the advertisement itself, the activity answered the description of sale of space for advertisement under section 66D(g) and was not exigible to service tax. [Paras 9]

The demand could not be sustained on the footing that the appellant was rendering taxable advertising agency service.

Bundled services - Essential character - Ancillary services - HELD THAT: - Applying section 66F(3)(a), the Tribunal held that a bundled service has to be classified according to the service that imparts its essential character. From the agreements, invoices and purchase orders, it was evident that the principal element of the transaction was the provision of space for display of advertisements, while installation, repair and maintenance were only ancillary activities necessary for effective use of that space. On that basis, the bundle retained the character of sale of space for advertisement and continued to fall within the Negative List. [Paras 10]

The ancillary activities did not alter the non-taxable character of the principal service of sale of space for advertisement.

Extended period of limitation - Interpretational dispute - Bona fide belief - HELD THAT: - The Tribunal accepted the appellant's contention that the show cause notice and the orders below did not substantiate fraud, misdeclaration or suppression with intent to evade tax. It further noted that the controversy turned on the interpretation of whether the service fell within sale of space for advertisement in the Negative List, and that the appellant had acted under a bona fide belief that no service tax was payable for the period in question. In such circumstances, invocation of the extended period of limitation was impermissible. [Paras 12]

The demand was barred by limitation.

Final Conclusion: The Tribunal held that the appellant's composite activity was essentially sale of space for advertisement falling within the Negative List, with installation and maintenance being merely ancillary. The impugned demand was also held barred by limitation, and the appeal was allowed.

Demand under Rule 6 - Cenvat credit on capital goods used for taxable and exempt services - health care services were made taxable w.e.f. 01.07.2010 under Section 65(105)(zzzzo) - Proportionate reversal of common input service credit - Extended Period of limitation and suppression of Facts.

Rule 6(4) capital goods credit - Proportionate credit reversal - Common input services - HELD THAT: - The Tribunal held that the Revenue had overlooked the express scheme of Rule 6. Under Rule 6(4), credit on capital goods is barred only when such capital goods are used exclusively for exempted goods or exempted services; therefore, where capital goods are commonly used for taxable and exempt services, the credit remains available. As regards the balance common credit, the appellant had availed only proportionate credit, which was permissible under Rule 6(3)(ii), and the procedural requirements under Rule 6(3A) could not be read to impose an automatic liability to pay 5%/6% of exempted turnover merely because separate accounts were not maintained. The Tribunal followed the decisions in IDEA Cellular Ltd. vs. CCE [2009 (2) TMI 91 - CESTAT NEW DELHI], Cranes & Structural Engineers vs. CCE [2016 (8) TMI 387 - CESTAT BANGALORE], and its own decision in Park Hospitals Vs Commissioner of Service Tax, Kolkata [2025 (2) TMI 419 - CESTAT KOLKATA], and held that the demand based on percentage of exempted turnover was legally unsustainable. [Paras 14, 15, 16, 17, 18]

The demand was set aside on merits and the appeal was allowed on the substantive issue of Cenvat credit eligibility.

Extended period of limitation - Suppression of facts - ST-3 returns - HELD THAT: - The Tribunal found that the appellant was registered, had been filing ST-3 returns, and had recorded availment of credit and proportionate reversal in its accounts. The exempted turnover was also ascertainable from the appellant's profit and loss account and balance sheet. In these circumstances, delayed departmental scrutiny could not be converted into a case of suppression, particularly when the dispute itself arose from the Revenue's erroneous understanding of the law relating to capital goods credit and proportionate reversal. Applying its earlier decision in Park Hospitals Vs Commissioner of Service Tax, Kolkata [2025 (2) TMI 419 - CESTAT KOLKATA], the Tribunal held that the ingredients necessary for invoking the extended period were absent. [Paras 19, 20, 21]

The confirmed demand for the extended period was also set aside as time-barred.

Final Conclusion: The Tribunal allowed the appeal both on merits and on limitation. It held that credit on common-use capital goods was admissible, proportionate reversal of common credit was permissible, and the extended period could not be invoked in the absence of suppression.

Taxable cargo handling service under Section 65(23) of the Finance Act, 1994 - removal, loading, transportation and dumping of fly ash and similar waste material from the factory premises to dumping yards - Meaning of cargo - Whether the removal of fly ash by tippers / trucks/ dumpers from the boiler head to dumping yard is taxable under the category of ‘Cargo Handling Service’.

Cargo Handling Service - Mere transportation of goods - HELD THAT:- The Tribunal held that, on a plain reading of the definition, cargo handling service covers loading, unloading, packing or unpacking of cargo and services incidental to freight, but excludes mere transportation of goods. In the facts found, the appellant's principal activity was removal of fly ash from the boilers so that manufacture could continue uninterruptedly. Though the contract mentioned removal, loading, unloading, handling, dumping and transportation, the fly ash was collected directly into the tippers kept below the boilers and then transported for dumping, without any separate labour-intensive loading or unloading operation. The Tribunal further held that fly ash and economizer ash, being waste generated during manufacture and transported only for disposal, could not be regarded as cargo within the scope of the expression. Following Tripathi Transport Co. [2017 (10) TMI 1186 - CESTAT NEW DELHI], the service was treated as essentially one of transportation and not cargo handling. [Paras 7, 8, 9]

The demand of service tax under the category of cargo handling service for the disputed period was held unsustainable.

Final Conclusion: The Tribunal set aside the impugned orders and allowed the appeals, holding that the activity of removing and transporting fly ash for dumping was essentially transportation of waste and not taxable under cargo handling service.

Denial Of Cross-examination of material witnesses - Section 9D compliance - Principles of natural justice - Cross-examination of material witnesses - Section 9D compliance - Admissibility of statements - Principles of natural justice -HELD THAT: - The Tribunal held that where the Revenue relies upon statements of material witnesses to establish fraudulent availment of CENVAT credit, the assessee is entitled to cross-examine such witnesses, subject to the procedure mandated under Section 9D of the Central Excise Act. In the present case, a specific request for cross-examination had been made before both authorities, but it was rejected without sufficient grounds. Following Jindal Drugs Pvt. Ltd. [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] and the Tribunal decisions cited by the appellants, the Tribunal found that the authorities could not straightaway rely on such statements without observing the statutory procedure and affording cross-examination. The authorities relied upon by the Revenue were held inapplicable on the facts, as even those decisions turned on the facts of each case. Since the impugned orders were founded on statements without due compliance with Section 9D and without granting cross-examination, the matter required fresh adjudication after following the prescribed procedure and passing a reasoned order. [Paras 9, 10, 11]

The impugned orders were set aside and the matter was remanded to the adjudicating authority to afford cross-examination of material witnesses, comply with Section 9D, and decide the case afresh by a reasoned order.

Final Conclusion: The Tribunal held that the impugned orders could not be sustained because the appellants had been denied cross-examination of material witnesses whose statements were relied upon, without due compliance with Section 9D. The appeals were therefore allowed by way of remand for fresh adjudication after granting such opportunity and passing a reasoned order.

Denial of cross-examination of material witnesses - availment of CENVAT credit on forged invoices - Admissibility of statements under Section 9D - Principles of natural justice - compliance with Section 9D of the Central Excise Act, 1944 -HELD THAT:- The Tribunal held that where the Revenue seeks to rely on statements of material witnesses, the adjudicating authority must follow the procedure prescribed under Section 9D and cannot rely upon such statements without affording the assessee an opportunity of cross-examination, unless legally sustainable reasons exist. In the present case, a specific request for cross-examination had been made before both authorities and was rejected without sufficient grounds. Following the law laid down in Jindal Drugs Pvt. Ltd.[2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] and the consistent view taken in similar matters, the Tribunal found that the impugned orders were unsustainable for breach of the mandatory procedure and principles of natural justice. [Paras 9, 10, 11]

The impugned orders were set aside and the matters were remanded to the adjudicating authority for fresh decision after granting cross-examination of the material witnesses, complying with Section 9D, and passing a reasoned order in accordance with law.

Final Conclusion: All the appeals were allowed by way of remand. The Tribunal held that the adjudication could not be sustained without complying with Section 9D and granting cross-examination of the material witnesses relied upon by the Revenue, and directed fresh decision by the adjudicating authority through a reasoned order.

Excisability of waste by-products - Waste mud spent earth - bleaching of crude palm oil - Definition of excisable goods under section 2 - Binding effect of assessee's own case. - HELD THAT: - The Tribunal treated the controversy as covered by its earlier decision in the appellant's own case [2026 (1) TMI 509 - CESTAT HYDERABAD] on the same issue and for the same period. Following that decision, it held that waste mud or spent earth emerges unavoidably during the bleaching process and the demand in the impugned order, which had proceeded on the basis of the withdrawn Board circular, could not be sustained. [Paras 6, 7]

The demand on waste mud as an excisable good was rejected and the impugned order was set aside.

Final Conclusion: Following its earlier order in the appellant's own case, the Tribunal held that the impugned demand on waste mud was unsustainable. The appeal was accordingly allowed.

Cenvat credit on input services - housekeeping/gardening, vehicle repair, tour and travel, outward courier, interior decoration, construction, surface colouring/coating, fabrication and insurance - Pre-amendment applicability -definition of input service - barred by limitation - Extended period of limitation.

Cenvat credit on input services - HELD THAT: - The Tribunal held that, for the relevant period, the definition of input service had to be construed broadly, particularly before the exclusion clause introduced with effect from 01.04.2011. On the facts found, each of the disputed services had nexus with manufacture, clearance of final products, or business activities integrally connected with the manufacturing operation. Gardening and housekeeping in factory premises were treated as covered services, vehicle repair was connected with use of vehicles for business purposes, tour and travel credit could not be denied on the basis of the post-01.04.2011 amendment when no such credit had been taken thereafter, outward courier was used for business correspondence and dispatch of documents and small packs, interior decoration related to functional modernization of factory premises, construction pertained to factory shed used for manufacture and had been undertaken prior to 01.04.2011, surface colouring and fabrication were part of repair and maintenance of machinery and structures, and employee mediclaim insurance was treated as mandatory and business-related. The denial of credit for want of nexus was therefore unsustainable. [Paras 8, 9, 12]

All the disputed input services were held eligible for Cenvat credit and the denial thereof was set aside.

Extended period of limitation - Suppression of facts - HELD THAT: - The Tribunal found that the issue emerged from departmental audit, while the appellant had been regularly filing returns and availing the credit openly. Since the department had not brought anything on record to establish the ingredients necessary for invoking the extended period, the substantial part of the demand was barred by limitation. Once the demand itself was held not maintainable, the levy of interest and penalty could not stand. [Paras 10, 11]

Invocation of the extended period was rejected; the substantial demand was held time-barred, and interest and penalty were held unsustainable.

Final Conclusion: The Tribunal held that all the disputed services qualified as input services for the relevant period and that the denial of Cenvat credit was unsustainable. It further held that the extended period had not been validly invoked, with the result that the substantial demand, and the consequential interest and penalty, could not survive.

Assessable value of goods cleared to own depots - depot sale price - absence of provisional assessment - demand barred by limitation - Extended period of limitation.

Depot valuation - Provisional assessment - HELD THAT: - The Tribunal held that, where goods were cleared to the assessee's own depots and thereafter sold to ultimate customers at a higher value, the assessee could not insist that duty paid at the factory gate was final and correct in the absence of recourse to provisional assessment under Rule 7 of the Valuation Rules, 2000. Since the admitted position was that higher value was realised at the depot stage and the prescribed procedure of provisional assessment followed by finalisation was not adopted, the challenge to the demand on merits was not accepted. [Paras 9]

The plea against the demand on merits was rejected.

Extended period of limitation - ER-1 returns - Balance sheet disclosure - HELD THAT: - The Tribunal found that the show cause notice itself proceeded on the basis of the balance sheet figures and the figures disclosed in the monthly ER-1 returns. As the balance sheet had been submitted to the Department well before issuance of the notice, and the material relied upon was already on record, the Department failed to justify invocation of the extended period. In the absence of any explanation for the delay in issuing the notice, the demand was held to be barred by limitation. [Paras 10]

The impugned order was set aside on limitation, and the appeal was allowed.

Final Conclusion: Though the Tribunal did not accept the assessee's case on valuation merits, it held that the show cause notice was barred by limitation because the demand was based on materials already available with the Department. The impugned order was therefore set aside and the appeal was allowed.

CENVAT credit of countervailing duty - Imported coal - Concessional rate under customs notification - contravention of the provisions of Rule 3(1)(vii) of the CENVAT Credit Rules, 2004 read with Central Excise Tariff Notification No. 12/2012-C.E. - Applicability of excise-notification restriction.

CENVAT credit on CVD - Imported coal - HELD THAT: - The Tribunal found that the controversy stood covered by its earlier decision in Shyam Steel Industries Ltd. v. C.C.E. [2021 (12) TMI 956 - CESTAT KOLKATA], which had held that the restriction on availment of credit contained in relation to coal cleared under the central excise notification could not be imported into cases of imported coal cleared on payment of CVD under the customs notification. Since the present case involved the same legal issue and that view had also been affirmed by the Calcutta High Court, the Tribunal held that the Commissioner (Appeals) had rightly allowed the credit. [Paras 13, 14]

The respondent was entitled to CENVAT credit of the CVD paid on imported coal at the concessional rate, and the Revenue's challenge was rejected.

Final Conclusion: The Tribunal dismissed the Revenue's appeal and sustained the order allowing CENVAT credit to the respondent on CVD paid at the concessional rate on imported coal. The cross-objection was disposed of in the same terms.

Imposition of Penalty under Rule 26(2) - Corroborative Evidence - Abetment in fraudulent CENVAT credit - CENVAT credit availment and diversion of goods - Effect of settlement under SVLDRS on co-noticee penalty.

Penalty under Rule 26(2) - HELD THAT: - The Tribunal found that the appellants had supplied goods to an entity holding Central Excise registration and had cleared the goods on payment of duty, both facts being undisputed. It further held that no corroborative or concrete evidence had been brought on record to establish the appellants' involvement in the alleged offence. In these circumstances, diversion of goods by the buyer, without bringing them to its factory, could not be attributed to the appellants. The Tribunal also noted that while credit had been denied to the buyer on the allegation of fake invoices, there was no case against the present appellants for denial of CENVAT credit. On that basis, penalty under Rule 26(2) was held to be unwarranted. [Paras 6]

The penalties were held to be unsustainable for want of evidence linking the appellants to the alleged fraudulent availment or transfer of credit.

SVLDRS settlement - Co-noticee penalty - HELD THAT: - The Tribunal recorded that the proceedings against the main noticee, M/s. Sprint Communication Pvt. Ltd. [2025 (4) TMI 1805 - CESTAT KOLKATA], stood resolved under SVLDRS, as noted in the earlier order of the Tribunal. On that footing, it found no reason to sustain the penalty imposed on the present appellants. [Paras 7]

The Tribunal treated the settlement of the main noticee's case under SVLDRS as an additional ground for setting aside the penalties on the appellants.

Final Conclusion: The Tribunal set aside the penalties imposed on the appellant-company and its Director under Rule 26(2). It held that there was no concrete evidence of their involvement in the alleged fraudulent passing of credit and also noted that the main noticee's case had already been resolved under SVLDRS.

Belated assessment - assessment orders passed nearly 10 years after issuance of the Form-H - breach of the mandate of Rule 25 - Reasonable time for completion of assessment - Unreasonableness in adjudication. - HELD THAT: - The Court held that the controversy stood concluded by the coordinate Bench decision in Siemens Limited v/s. The State of Maharashtra & Ors. [2023 (5) TMI 181 - BOMBAY HIGH COURT], which had already ruled that, even if Rule 25 does not prescribe a fixed outer limit for completion of assessment after initiation, the assessment must nevertheless be completed within a reasonable period. An assessment kept pending for more than ten years from the initial Form-H notice was held to be unreasonable and unjustifiable. Applying that binding principle, the Court found that the impugned assessment in the present case, passed ten years after the Form-H notice, could not be sustained; and the same position governed the companion petitions where the assessment orders had likewise been made after more than ten years. [Paras 4, 12, 13, 14]

The assessment orders impugned in all three writ petitions were quashed, and the petitions were allowed.

Final Conclusion: Following the binding decision in Siemens Limited, the Court held that the respondent could not sustain assessments made more than ten years after issuance of the initial Form-H notices. The impugned assessment orders in all three writ petitions were therefore set aside and the petitions were allowed.

Seeking recusal by a litigant - Reasonable apprehension of bias - Prima facie observations in interim orders - Forum shopping - Judicial impartiality - conflict of interest arising from relatives' professional engagements, and other related circumstances - What is being urged, is a genuine, reasonable and legally sustainable apprehension of bias in the mind of a litigant, or merely an unfounded perception.

Recusal - Reasonable apprehension of bias - Judicial impartiality - Forum shopping - HELD THAT: - The Court held that recusal cannot be sought merely because an interim order on the first date contained prima facie observations, because such observations are a routine part of judicial functioning and remain tentative until final hearing. Service of the petition upon the counsel who had represented the accused before the Trial Court was not shown to have caused prejudice, particularly when the discharge order itself was never stayed. The stay of remarks against the Investigating Officer was treated as a protective interim measure concerning consequential action and not as any circumstance affecting the fairness of adjudication against the accused. The allegation of undue haste was rejected since the matter fell in the MP/MLA category and was required to be taken up expeditiously under binding directions. Earlier detailed judgments rendered by the Court in connected proceedings under the PMLA did not amount to prejudgment of the present revision, because those orders were passed on different statutory parameters and were expressly prima facie. Reliance on earlier observations, alleged contrary findings of the Trial Court, appellate interference by the Supreme Court, an alleged public statement by a political functionary, participation of the Judge in legal events organised by a body of advocates, and the independent professional engagements of relatives were all held insufficient, either because they lacked any proximate nexus with the present lis or because they rested only on conjecture, perception, or selective presentation. The governing standard was that of a fair-minded and informed observer, not the subjective unease of a litigant. Accepting such grounds would enable litigants to intimidate courts, manufacture a test of bias, and engage in bench hunting or forum shopping. The Court therefore held that judicial duty could not be surrendered in the face of unfounded allegations and that no legal basis for recusal had been made out. [Paras 260, 261, 262, 264, 265]

The applications seeking recusal were rejected, and the Court held that it would hear the main petition on merits uninfluenced by the recusal pleas.

Final Conclusion: The Court held that the recusal pleas were founded on conjecture, subjective unease, and legally untenable inferences rather than any real or reasonable apprehension of bias. All recusal applications were dismissed, and the Court directed that the main petition would be heard on merits uninfluenced by the allegations raised.