TMI Tax Updates e-Newsletter
May 21,2026

Seeking modification or withdrawn of Bail conditions - requiring the applicant to furnish a security bond equal to the amount claimed - security bond - review - Onerous and vague security requirement. - HELD THAT: - The Court held that a bail condition requiring security equivalent to the tax and penalty claimed by the complainant was onerous and vague, since the tax and penalty amount had not yet been determined. In the facts of the case, after taking on record the affidavit disclosing the family assets, the Court directed that security of the assets so disclosed could be furnished in substitution of the impugned condition. [Paras 6, 7]

The impugned bail condition was not to be enforced, and release on bail was directed upon furnishing security of the assets disclosed in the affidavit instead.

Final Conclusion: The Special Leave Petitions were disposed of by modifying the bail condition. The petitioner was directed to be released on bail on furnishing security of the disclosed assets, without insisting on the condition requiring a security bond equal to the claimed tax and penalty.

Entitlement to seek restoration of the cancelled GST registration - non-filing of returns - Restoration of registration on compliance with pending return and tax obligations. - HELD THAT: - The Court noted that the impugned cancellation was on the ground of failure to file returns and that the petitioner had already filed the returns and deposited the penalty amount. Taking the view adopted in similar matters earlier decided by the Court in the case of Dug Rade [2026 (3) TMI 1308 - GAUHATI HIGH COURT], and in light of the parties' common stand that the petitioner's case was covered by those orders, the Court held that the proper course was to permit the petitioner to approach the concerned authority for restoration. The authority was directed to verify the application and consider restoration in accordance with law. [Paras 9, 10, 11, 12]

The petitioner was directed to file an application for restoration within the time granted, and the respondent authorities were directed to verify and consider it in accordance with law and thereafter restore the GST registration.

Final Conclusion: Following its earlier orders in similar matters, the Court disposed of the writ petition by permitting the petitioner to apply for restoration of the cancelled GST registration and directing the authorities to verify and consider the application in accordance with law within the stipulated time.

Entitlement to release detained goods in transit - Ownership of consignment - Perishable goods - Statutory pre-deposit - Compliance with the amount payable under section 129(1)(a) of the applicable goods and services tax law. - HELD THAT: - The Court found that the goods were perishable and that the demand order did not disclose any concrete or unimpeachable evidence suggesting, even prima facie, that the petitioner was not the owner of the consignment. On that basis, the Court held that release of the goods had to be granted upon the petitioner's compliance with the requirement applicable to the owner under Section 129(1)(a) of the 2017 Act. The Court further clarified that release of the consignment in favour of the petitioner would follow upon such payment, irrespective of payment on account of the conveyance by its owner, while leaving the revenue free to proceed in accordance with law if the petitioner failed to pursue the statutory appeal and the demand attained finality. [Paras 10, 11, 12, 13]

The consignment was ordered to be released in favour of the petitioner within the stipulated time upon payment in terms of Section 129(1)(a) of the 2017 Act.

Final Conclusion: The writ petition was disposed of by directing release of the detained consignment to the petitioner on compliance with Section 129(1)(a) of the 2017 Act. In the absence of prima facie material denying the petitioner's ownership, the revenue could not withhold release on that footing.

Maintainability of Writ Petition - Alternate appellate remedy - statutory timeline for filing appeal - Non-functional appellate tribunal - Mandatory pre-deposit prescribed under section 112(8). -HELD THAT: - The Court held that recourse to writ jurisdiction is permissible where the statutory appellate forum is not constituted or functional, since an aggrieved person cannot be left remediless. At the same time, the absence of a functional tribunal does not dispense with the statutory condition attached to the filing of such appeal. Once the appellate forum had become functional and the time for filing appeals before the Tribunal had been notified, it was not proper for the writ court to keep the writ petition pending, because the dispute could be adjudicated by the statutory forum itself. The petitioner was, therefore, required to file the appeal before the GSTAT within the notified timeline after making the deposit mandated by Section 112(8), and the Court expressly declined to examine the merits of the first appellate order. [Paras 4, 5, 6]

The writ petition was disposed of by directing the petitioner to comply with Section 112(8) and file the appeal before the GSTAT within the notified timeline, without any adjudication on the merits of the impugned appellate order.

Final Conclusion: The Court declined to entertain the challenge on merits after noting that the GSTAT had become functional and the appeal-filing timeline had been notified. The petitioner was relegated to the statutory appellate remedy, subject to compliance with the mandatory pre-deposit requirement.

Limitation for adjudication under Section 74 - Lack of jurisdiction on expiry of statutory period - Mandatory statutory time limit - HELD THAT: - The Court held that Section 74(10) requires the proper officer to pass the order within five years from the due date for furnishing the annual return for the relevant financial year. Since the due date for Financial Year 2017-2018 stood extended to 05.02.2020, the outer limit for passing the order expired on 05.02.2025. The impugned order having been passed on 30.12.2025 was therefore beyond the statutory period. The Court further held that the limitation prescribed is mandatory and cannot be relaxed, and once that period expired the authority lacked jurisdiction to pass the order. [Paras 9, 10]

The impugned Order-in-Original along with Form GST DRC-07 was quashed and set aside.

Final Conclusion: The writ petition was allowed on the sole ground that the order under Section 74 had been passed beyond the mandatory five-year limitation period. The adjudication order and consequential demand were accordingly set aside as being without jurisdiction.

Validity of show cause notice retrospectively cancelling the GST registration - Effect of show cause notice - Requirement of reasons in quasi-judicial orders - Reasonable opportunity of hearing. - HELD THAT: - The Court found that the show cause notice did not contain the facts on the basis of which action for cancellation with retrospective effect had been initiated. It further found that the cancellation order was equally bereft of reasons. Relying on the principle already laid down by the Division Benchof this Court in M/s Bansal Casting [2026 (3) TMI 573 - PUNJAB AND HARYANA HIGH COURT] that though retrospective cancellation is permissible under Section 29, such action can be taken only on the existence of specific contingencies and the notice as well as the order must disclose the basis and reasons for that action, the Court held that the impugned proceedings were unsustainable. As the respondents could not distinguish the applicability of that principle, the notice, the retrospective cancellation order, and the order rejecting revocation were set aside, while leaving liberty to the authorities to proceed afresh in accordance with law. [Paras 4, 5, 6, 7]

The impugned notice, cancellation order and rejection of the revocation application were quashed, with liberty to the respondents to initiate fresh proceedings in accordance with law.

Final Conclusion: The writ petition was allowed. The Court set aside the show cause notice, the order retrospectively cancelling GST registration, and the order rejecting revocation, while granting liberty to the respondents to proceed afresh in accordance with law.

Seeking modification or withdrawn of Bail conditions - requiring the applicant to furnish a security bond equal to the amount claimed - security bond - review - HELD THAT: - The Court held that the impugned condition merely required the applicant to furnish a security bond and did not oblige him to deposit money in advance or furnish a bank guarantee. On that basis, the decisions cited by the applicant were found inapplicable, since the nature of the condition in the present case was materially different. The Court further held that, as the same condition had already been challenged before the Supreme Court, it would be inappropriate for the High Court to re-examine that issue. It also held that withdrawal of the condition would amount to review of the earlier bail order, which was not permissible. [Paras 9, 10, 11, 12]

No ground for modification of the bail order was made out, and the application was dismissed.

Final Conclusion: The High Court declined to modify the bail condition requiring furnishing of a security bond, holding that the condition did not amount to pre-deposit or bank guarantee, that the authorities cited were inapplicable, and that interference would be inappropriate once the matter had already been taken to the Supreme Court and would in effect amount to review of the earlier order.

Maintainability of advance ruling application - Supply of goods or services undertaken or proposed to be undertaken - scope of Section 95(a) and Section 97(2) - statutory requirements for admission under the provisions of Section 97. -HELD THAT: - The Authority held that the advance ruling mechanism is confined to matters specified in law arising in relation to a supply undertaken or proposed to be undertaken by the applicant himself. On the applicant's own showing, the questions were framed on hypothetical situations, were not linked to any concrete transaction, contractual arrangement or factual matrix of the applicant, and were raised to obtain clarity on issues that may arise for clients. In that view, the application sought a general advisory opinion on the interpretation of GST provisions rather than a ruling on the applicant's own supplies. Such academic queries were held to be outside the statutory scope of advance ruling, and therefore the Authority declined to examine the merits of the reverse charge questions. [Paras 6]

The application was rejected at the threshold as not maintainable under Section 97, without any ruling on the merits of the reverse charge issues.

Final Conclusion: The Authority rejected the advance ruling application as not maintainable, holding that it raised only hypothetical and general queries not connected with any supply undertaken or proposed to be undertaken by the applicant. The merits of the reverse charge questions were left unexamined.

Eligibility of composite supply of healthcare services - medicines, consumables, room rent up to the prescribed limit, nursing care and other ancillary supplies provided to inpatients - Benefit of exemption under Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate) - Inpatient and outpatient distinction - Taxability of room rent exceeding Rs. 5,000 per day per patient.

Whether the healthcare services provided by the applicant, including the supply of medicines and other ancillary services in the course of treatment, qualify for exemption under Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. - HELD THAT: - The Authority held that, in the case of inpatients, medicines, consumables, room accommodation and other ancillary elements are supplied in conjunction with medical treatment under the supervision of the clinical establishment and are not ordinarily supplied independently. Such elements are therefore naturally bundled with the principal supply of healthcare service and assume the character of a composite supply. Since the principal supply is healthcare service rendered by a clinical establishment in a recognised system of medicine, the bundled inpatient supply falls within Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) and is exempt, subject to the specific statutory exclusion relating to room rent. [Paras 7]

Inpatient supplies forming part of the course of treatment were held to be an exempt composite supply of healthcare service under Entry No. 74.

Inpatient and outpatient distinction - Independent taxable supply - Taxability of hospital room rent - Medicines or other goods supplied to outpatients do not qualify for exemption as healthcare services, and room rent beyond the notified threshold is separately taxable. - HELD THAT: - The Authority held that outpatient transactions do not possess the attributes of a naturally bundled supply because the patient is not admitted for a continuous course of treatment under the hospital's control and remains free to procure prescribed medicines from any source. Medicines or allied goods supplied in such circumstances therefore do not form part of an exempt healthcare composite supply and are taxable at the applicable rates. The Authority further held that, by virtue of the amendment made through Notification No. 04/2022-Central Tax (Rate), the exemption under Entry No. 74 does not extend to room rent, other than ICU, CCU, ICCU and NICU rooms, where the room charges exceed Rs. 5,000 per day per patient, and such room rent is chargeable to GST as specified. [Paras 7]

Outpatient supply of medicines or goods was held taxable as an independent supply, and non-ICU room rent exceeding the prescribed threshold was held outside the exemption.

Final Conclusion: The Authority ruled that healthcare services provided by the applicant to inpatients, together with medicines, consumables and other naturally bundled ancillary services, are exempt under Entry No. 74 as a composite supply of healthcare service. Supplies of medicines or other goods to outpatients are taxable, and the exemption does not cover non-ICU room rent exceeding the prescribed threshold.

Maintainability of Advance ruling application - Scope of questions under section 97(2) - Bar of prior adjudication - transactions involving facilitators as suppliers to the applicant and the same issue had already been decided in earlier proceedings - Doctrine of mutuality - Scope of clauses (a) and (b) of Section 97(2) of the CGST Act, 2017. - HELD THAT: - The Authority held that an advance ruling under section 97(2) can be rendered only in respect of a supply of goods or services undertaken by the applicant. On the applicant's own showing, the amounts shared with facilitators were in consideration of facilitation services rendered by those facilitators to the applicant; accordingly, the questions on taxability of such sharing and allied transactions did not concern outward supplies by the applicant and fell outside the statutory scope of advance ruling. The Authority further found that the broader issue of taxability of transactions between the society and its members had already been examined in adjudication proceedings against the applicant and decided by the adjudicating authority. That prior decision attracted the bar under section 98(2). Since the primary questions were inadmissible on these grounds, the consequential questions on classification and exemption could not be entertained. The Authority therefore declined to examine the merits, including mutuality and the claimed exemption. [Paras 7]

The application was rejected at the threshold as not admissible, and no ruling was issued on any of the questions raised.

Final Conclusion: The Authority rejected the application as not admissible under sections 97(2) and 98(2) of the CGST Act. No ruling was issued, and the merits of mutuality, taxability, classification, or exemption were left unexamined.

Reopening of assessment -Reasons to believe - Survey under Section 133A - Permanent Establishment - Dependent Agent Permanent Establishment - Fixed Place Permanent Establishment - tangible material to form belief - chargeability of business income attributable to PE - reliance on precedent

HELD THAT:- Having heard the learned counsel appearing for the petitioners and having gone through the materials on record, we find no good ground to interfere with the impugned order passed by the High Court [2025 (5) TMI 2058 - DELHI HIGH COURT]

Special Leave Petitions are, accordingly, dismissed.

Reassessment u/s 147 or 153C - Search-based reassessment - Delay in filling SLP - HELD THAT:- There is a gross delay of 454 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 of Judicature at Jaipur [2024 (5) TMI 1700 - RAJASTHAN HIGH COURT] wherein notices for reopening and the consequential reassessment orders were set aside, with liberty to the department to proceed in accordance with law u/s 153C and other applicable provisions.

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

Validity of reassessment proceedings - period of limitation - jurisdictional pre-condition to reopen an assessment beyond 3 years and up to 10 years u/s 149(1)(b) - reasons to believe - escapement of income reflected in the form of an “asset” i.e., receivable and the conditions set out in section 149(1)(b) read with the 4th proviso to section 153A -Year-specific reasons for reassessment

HELD THAT:- As no good ground to interfere with the impugned judgment and order passed by the High Court [2026 (4) TMI 56 - DELHI HIGH COURT]. Hence, Special Leave Petition stands dismissed. All contentions of both parties are kept open to be urged in the re-assessment proceedings.

Low tax effect appeals - Organised tax evasion exception - treating the scrips to be penny stock - Interpretation of inclusive exception clause - whether Tribunal was justified in dismissing the Revenue's appeal solely on the ground of low tax effect without examining whether the case fell within the exception for organised tax evasion under clause (h) of para 3.1 of CBDT Circular No. 5/2024?

HELD THAT: - The Court held that the Tribunal's own order showed that it had dismissed the appeal without going into the merits and only on the footing that the tax effect was below the prescribed limit. On the assessment order, the allegation was that the assessee had created false or fictitious share transactions with the assistance of named brokers, which, if correct, amounted to organised tax evasion. Clause (h) of para 3.1 was construed broadly: the expression "including" made the subsequent references to bogus capital gain or loss through penny stocks and accommodation entries merely illustrative, and not restrictive of the main category of cases involving organised tax evasion. Since the matter prima facie fell within that exception, the low tax effect circular did not warrant dismissal of the appeal at the threshold, and the Tribunal was required to hear the appeal on merits. [Paras 8, 9, 10, 11, 12]

The impugned order was set aside to that extent, and the matter was restored to the Tribunal for decision on merits in accordance with law, without any expression of opinion on the merits of the underlying additions.

Final Conclusion: The appeal was allowed. The Court held that the case was covered by the exception relating to organised tax evasion in CBDT Circular No. 5/2024, and therefore the Tribunal could not dismiss the Revenue's appeal solely on the ground of low tax effect.

Enforceability of tax demand - Absence of assessment order - Adjustment of refund against non-existent demand - Service of demand notice -

Whether, in the absence of an available and served assessment order and demand notice, the reflected tax demand and the consequential adjustment of refund could be sustained? - HELD THAT: - The Court recorded that it was an admitted position that the Assessing Officer was not in possession of any copy of the assessment order, whether physical or electronic. In that situation, service of such order on the assessee was itself impossible. The Court held that in the absence of an assessment order, and without service of the assessment order and demand notice, no legally enforceable demand could exist or subsist merely on the basis of an entry reflected on the portal. [Paras 12, 13, 14, 16, 17]

The intimations issued under section 245 and the portal entry of outstanding demand for AY 2017-18 were quashed, with liberty to the respondents to serve the assessment order in accordance with law if it is found or traced.

Adjustment of refund against non-existent demand - Refund with interest - HELD THAT: - Since the Court held that no legally enforceable demand existed in the absence of the assessment order and demand notice, the recovery made by adjustment of the petitioner's refunds could not be sustained. The Court consequently directed return of the amount recovered from the refunds together with applicable interest from the date of recovery until payment. [Paras 12, 15]

The respondents were directed to refund the adjusted amount with applicable interest.

Final Conclusion: The writ petition was allowed. The Court held that, in the absence of the assessment order and its service, the demand for AY 2017-18 was not legally enforceable, quashed the adjustment intimations and demand entry, and directed refund of the amount recovered with interest, while leaving it open to the Revenue to serve the assessment order in accordance with law if it is traced.

Income-tax demand raised against company insolvent - Binding effect of approved resolution plan - Extinguishment of statutory claims not forming part of resolution plan - Writ maintainability despite alternate appellate remedy

Approved resolution plan - Extinguishment of tax demand - Claims not forming part of resolution plan - Income-tax demand raised against the corporate debto after approval of the resolution plan - HELD THAT: - The Court held that, once a resolution plan is approved under Section 31(1) of the IBC, only those claims which form part of the plan survive and all other claims stand frozen and extinguished. Applying the principle stated in Ghanashyam Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Company Ltd. [2021 (4) TMI 613 - SUPREME COURT] Court found that the revenue had in fact lodged its claim before the Resolution Professional, that claim was rejected, and the rejection as well as the order approving the resolution plan were never challenged. Since the impugned tax demand was not included in the approved resolution plan, it could not thereafter be enforced against the petitioner. [Paras 12, 13, 14]

The impugned assessment-based demand and connected notices were held unenforceable against the petitioner.

Alternate remedy - Exercise of writ jurisdiction - HELD THAT: - The Court rejected the revenue's objection on maintainability because the material facts were admitted and the governing legal position on the effect of an approved resolution plan squarely covered the case. In those circumstances, the existence of a further statutory appeal did not bar exercise of writ jurisdiction. [Paras 14]

The writ petitions were entertained and the objection based on alternate remedy was overruled.

Final Conclusion: The Court allowed all the writ petitions and held that the income-tax demand, having not formed part of the approved resolution plan, stood incapable of enforcement against the petitioner. The connected notices and the appellate order were accordingly set aside.

Addition u/s 68 - trade advances from customers - project completion method - consistency in tax treatment - double taxation - rejection of books of account - whether Advances received from customers and flat purchasers in the ordinary course of the assessee's real-estate business, which were adjusted against sales in the same or subsequent years, could not be treated as unexplained cash credits?

HELD THAT: - The Tribunal found that the assessee had consistently followed the project completion method and had regularly received customer advances as part of its business of developing residential and commercial projects. The material on record showed that such advances were being adjusted against registered sales in the same year or in subsequent years, and only the unadjusted balance was carried forward as customer advances.

On these facts, the Assessing Officer's action in treating the closing balance of such advances as unexplained cash credit u/s 68 was held to be unsustainable. The Tribunal further held that the same accounting treatment had been accepted in earlier years and, in the absence of any change in facts, a contrary view could not be taken, following the principle in Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] and CIT Vs Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT (LB)] It also held that sustaining the addition would result in taxing the same income twice, once when sales were recognised and again by separately taxing the advances. The Tribunal additionally noted that the sales recorded in the profit and loss account had been accepted and the books had not been rejected, so a selective rejection of the advances figure was arbitrary and impermissible. [Paras 13, 15, 17, 19, 20]

The addition made under section 68 in respect of customer advances was deleted and the order sustaining it was set aside.

Final Conclusion: The Tribunal allowed the appeal and held that the advances received from customers in the ordinary course of the assessee's real-estate business, being regularly adjusted against sales under the consistently followed project completion method, could not be assessed as unexplained cash credits. The addition was therefore directed to be deleted.

Arm's length price of corporate guarantee - Commercial expediency - Deduction of interest on borrowed capital

Arm's length price of corporate guarantee - Corporate guarantee commission - guarantee was jointly furnished by the assessee and its subsidiary - HELD THAT: - The Tribunal found it undisputed that the corporate guarantee in favour of the foreign associated enterprise's lenders had been extended jointly by the assessee and its subsidiary. Since both entities assumed the underlying guarantee risk, the arm's length guarantee fee determined by the Transfer Pricing Officer at 0.5% could not be attributed wholly to the assessee. The Commissioner (Appeals) was therefore justified in holding that the arm's length fee had to be shared equally and that only 50% thereof, namely 0.25%, was attributable to the assessee. [Paras 6]

The restriction of the corporate guarantee fee to 0.25% was upheld and the Revenue's challenge on this issue was rejected.

Proportionate disallowance of interest paid on loans - non-interest bearing loans & advances given to subsidiaries / associates - Whether business purposes and the waiver of interest was commercially expedient? - HELD THAT: - The Tribunal followed the coordinate Bench decision in the assessee's own case for the earlier year and held that the loans to AAIPL were advanced in the course of the assessee's real estate business for funding overseas project activities through the subsidiary structure. It accepted that, owing to shareholder disputes, loss of control over the foreign subsidiaries, financial distress in the project entities, and the adverse business conditions including the COVID period, the decision not to charge interest was taken to protect the assessee's business interest and principal exposure. Applying the settled principle that under section 36(1)(iii) the test is commercial expediency, and that deductibility does not depend upon the borrowing yielding corresponding income in the year, the Tribunal held that interest on the borrowings remained allowable. [Paras 11, 12, 13]

The disallowance relating to advances to AAIPL was held unsustainable and the order deleting it was affirmed.

Commercial expediency - Deduction of interest on borrowed capital - Interest-free advances to group concern - disallowance of interest relatable to non-interest-bearing advances to SCA LLP - whether the advances were for business purposes after the assessee became the majority partner in the LLP? - HELD THAT: - The Tribunal noted that the assessee and SCA LLP were engaged in the same line of real estate business and that, after the supplementary LLP arrangement, the assessee acquired majority stake and management control in the LLP, substantially increasing its share in project revenues and profits. In that changed commercial setting, the assessee's decision to stop charging interest on the earlier advances, so as not to burden the delayed project with fixed financial cost, was held to be commercially driven. The Tribunal also accepted that the assessee's business interest in the LLP's financial health and project viability furnished sufficient nexus with business purpose, and therefore the corresponding interest on borrowed capital could not be disallowed merely because no interest was charged from the LLP. [Paras 19, 20, 21, 22]

The deletion of the disallowance relating to advances to SCA LLP was upheld, and the same view was applied mutatis mutandis for AY 2022-23.

Final Conclusion: The Tribunal dismissed the Revenue's appeals for AY 2021-22 and AY 2022-23. It upheld the attribution of only 0.25% corporate guarantee fee to the assessee and sustained deletion of the interest disallowances relating to advances to AAIPL and SCA LLP on the ground of commercial expediency.

Revision u/s 263 - jewellery purchase expenditure as a taxable perquisite u/s 17(2) - Employer-employee relationship - as per CIT expenses made for purchase of jewellery was not sustainable in the hands of the assessee as perquisite u/s 17(2) of the Act as the expense was made by the company M/s. Ajayvision Education Pvt. Ltd and that there is no employer-employee relationship

HELD THAT: - The Tribunal found it undisputed that only the jewellery bills were recovered from the assessee's premises and that the expenditure for purchase of jewellery had been incurred by M/s Ajayvision Education Pvt. Ltd. out of unaccounted cash. It further held that the PCIT had not established any employer-employee relationship between the assessee and that company. In that factual setting, invocation of section 17(2) to assess the jewellery expenditure as a perquisite in the assessee's hands was unjustified. Since the very basis adopted by the PCIT failed, the reassessment order could not be regarded as erroneous and prejudicial to the interests of the Revenue so as to warrant revision under section 263. [Paras 10]

The revisionary order under section 263 was unsustainable and the assessee's appeal was allowed.

Final Conclusion: The Tribunal held that, in the absence of any established employer-employee relationship and when the jewellery expenditure was incurred by the company, section 17(2) had been wrongly invoked against the assessee. Consequently, the reassessment order was not erroneous and prejudicial to the interests of the Revenue, and the order under section 263 was set aside.

Depreciation u/s 32(1)(ii) on non-compete fees - Intangible asset u/s 32(1)(ii) - Reference to coordinate bench decision in assessee's own case

HELD THAT: - The Tribunal found that the disallowance had been made only because a similar claim had been disallowed in an earlier year. It noted that in the assessee's own case [2023 (2) TMI 304 - ITAT CHENNAI], the coordinate Bench had already allowed depreciation on the same non-compete fees for earlier assessment years arising from the same transaction, and that the claim had also been accepted in A.Y. 2017-18 by the Commissioner (Appeals) following that order. In that factual background, and following the earlier order in the assessee's own case, the Tribunal held that the non-compete fees qualified for depreciation under section 32(1)(ii). [Paras 7]

Depreciation on non-compete fees was held allowable and the disallowance was deleted for both years.

Final Conclusion: The Tribunal allowed both appeals and held that the assessee was entitled to depreciation on the capitalised non-compete fees for A.Ys. 2020-21 and 2021-22, following the earlier decision in the assessee's own case.

Reassessment u/s 147/148 v/s 153C -Reassessment based on third-party search material - Interplay between special search assessment and general reassessment provisions - Borrowed satisfaction - Special code under search assessment - Third-party search material

Jurisdiction under section 153C vis-a-vis sections 147/148 - Third-party search material - HELD THAT: - The Tribunal held that where the sole foundation for reopening was incriminating material seized during search on another person, the special statutory mechanism u/s 153C governed the matter and could not be bypassed by resort to the general reassessment provisions.

Following the earlier co-ordinate Bench order in the assessee's own cases, which in turn applied the Gujarat High Court ruling in Paras Chandreshbhai Koticha [2026 (1) TMI 417 - GUJARAT HIGH COURT] the Tribunal accepted that, in absence of the statutorily required satisfaction note of the searched person's Assessing Officer and in absence of any independent post-search material, assumption of jurisdiction under sections 147/148 was fatally defective. The conflict between the two sets of provisions was resolved on the principle that the special search provisions, containing a non-obstante clause, override the general reassessment provisions when the basis is exclusively third-party search material. [Paras 5, 23]

The reassessment orders for both years were held bad in law and quashed.

Borrowed satisfaction - independent Application of mind in reassessment - HELD THAT: - On this objection, the Tribunal followed the co-ordinate Bench decision in the assessee's own cases and held that the Assessing Officer had not acted mechanically on the investigation report alone. It noted that under the amended reassessment regime, information available with the Assessing Officer could lawfully trigger action; and, after furnishing transaction details to the assessee, seeking explanation under section 148A(b), and passing an order under section 148A(d) after considering the reply, the Assessing Officer could not be said to have proceeded without independent application of mind. The legal challenge based on borrowed satisfaction was therefore rejected. [Paras 13, 14]

This ground was decided against the assessee.

Final Conclusion: For both assessment years, the Tribunal quashed the reassessment orders on the ground that reopening based solely on material seized in search on a third party could not be undertaken under sections 147/148 when the matter, if at all, had to proceed under section 153C. The separate objection based on borrowed satisfaction was rejected, while the remaining legal and merits issues were left open as academic.

Reassessment based on reason to believe - Borrowed satisfaction from Investigation Wing - Mandatory notice u/s 143(2) - Fishing and roving enquiry - Borrowed satisfaction - non independent belief of escapement of income

Reason to believe - Fishing and roving enquiry - Borrowed satisfaction - HELD THAT: - The Tribunal found that the recorded reasons themselves stated that there were high chances of escapement of income and that the case required scrutiny, which showed only a reason to suspect and not the statutory requirement of reason to believe. It further held that the reopening was founded merely on information received from the Investigation Wing, without any independent enquiry by the Assessing Officer to establish a live link between the material and the alleged escapement. Such information, by itself, was held insufficient tangible material, and the reasons reflected only borrowed satisfaction rather than independent application of mind. [Paras 7, 11, 14, 15]

The reassessment proceedings were held bad in law and Ground No. 1 was allowed.

Non issue of Notice u/s 143(2) - Invalid scrutiny notice - HELD THAT: - The Tribunal recorded that the only notice u/s 143(2) mentioned AY 2010-11, whereas the impugned assessment related to Assessment Year 2011-12. It held that issuance of notice u/s 143(2) for the relevant year is mandatory, and an assessment framed without such notice cannot be sustained. The Revenue's contention that the wrong assessment year in the notice was merely a typographical error was not accepted in view of the settled legal position applied by the Tribunal. [Paras 18, 19, 20]

The assessment order was held liable to be quashed on this independent ground and Ground No. 2 was allowed.

Final Conclusion: The Tribunal quashed the assessment for Assessment Year 2011-12, holding both that the reopening was based only on suspicion and borrowed satisfaction and that no valid notice under section 143(2) had been issued for the relevant year. The assessee's appeal was accordingly allowed, and the remaining grounds were left unadjudicated.

Penalty u/s 271(1)(c) - Tax sought to be evaded - Inaccurate particulars of income - HELD THAT: - The Tribunal held that penalty under section 271(1)(c) is attracted for concealment of income or furnishing inaccurate particulars only where there exists an element of tax sought to be evaded. On the facts recorded, that component was wholly absent. Once the tax sought to be evaded was missing, the statutory basis for levy of penalty itself failed, and the penalty could not be sustained. [Paras 5]

The penalty levied under section 271(1)(c) was deleted.

Final Conclusion: The Tribunal allowed the appeal and deleted the penalty under section 271(1)(c), holding that in the absence of any tax sought to be evaded, the levy itself was not maintainable.

Penalty u/s 271(1)(c) - quantum addition on account of u/s 80IA deduction has been deleted -HELD THAT: - The Tribunal held that penalty for concealment is not leviable where there is no subsisting addition resulting in any tax sought to be evaded. On examining the earlier order in the assessee's own case [2023 (10) TMI 693 - ITAT DELHI] it found that the quantum disallowance relating to deduction under section 80IA had already been deleted. Since the very foundation of the penalty no longer existed, no case for levy of concealment penalty remained. [Paras 8, 9]

The orders sustaining penalty were set aside and the penalty imposed under section 271(1)(c) for both assessment years was deleted.

Final Conclusion: The Tribunal allowed both appeals and deleted the penalties for Assessment Years 2011-12 and 2012-13, holding that after deletion of the underlying quantum additions, no concealment penalty could be sustained.

Penalty u/s 270A - Specification of applicable limb of under-reporting - Validity of penalty notice and penalty order - mandation to specify exact clause of section 270A(2)

HELD THAT: - The Tribunal held that levy of penalty for under-reporting or misreporting requires specification of the exact statutory limb invoked. Since the Assessing Officer had not specified the applicable clause of section 270A(2) either in the notice initiating penalty or in the penalty order, the very foundation of the penalty proceedings was defective. Following the jurisdictional High Court decision in Schneider Electric South East Asia (HQ) Pte Ltd. [2022 (3) TMI 1295 - DELHI HIGH COURT] Tribunal held the penalty proceedings to be bad in law. [Paras 5]

The notice and penalty order were quashed and the penalty levied under section 270A was deleted.

Final Conclusion: The Tribunal allowed the appeal and held that the penalty proceedings under section 270A were invalid because the applicable clause governing under-reporting had not been specified in the notice or the penalty order.

Application for release of the seized consignment under Section 110A - Pending certification proceedings - Reasoned disposal of statutory application - Reasons to Believe - Due Process of Law. - HELD THAT: - Recording the submission of the Customs authority that proceedings had already been initiated before the jurisdictional Magistrate under Section 110(1B) and were still pending, the Court directed that such proceedings be concluded first. It then directed the jurisdictional Customs authority to consider and dispose of the pending application under Section 110A by a reasoned order after the Magistrate's certification or final order. The Court expressly kept all merits, including the petitioner's jurisdictional objection to the seizure, open for consideration in appropriate proceedings and did not adjudicate upon them. [Paras 4, 5, 7, 8]

The Magistrate was directed to conclude the pending certification proceedings within the stipulated time, whereafter the Customs authority was directed to decide the release application by a reasoned order, with all merits and jurisdictional objections left open.

Final Conclusion: The writ petition was disposed of with directions for early completion of the pending certification proceedings and for reasoned disposal of the petitioner's application for release of the seized consignment. The Court did not decide the legality of the seizure and left all contentions open.

Admissibility of statements under section 108- Compliance with the procedure under section 138B - Penalty under section 112(b)- Third-party records and independent corroboration.

Admissibility of statements under section 108 - HELD THAT: - The Tribunal found that there was nothing on record to show that the statutory procedure under section 138B had been followed. In such circumstances, the statement recorded under section 108 was not legally available for reliance against the appellant. The Tribunal also noted that this view had been taken in M/s Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur [2025 (4) TMI 441 - CESTAT NEW DELHI]. [Paras 16, 17]

The appellant's statement was held to be not reliabe for sustaining the penalty.

Penalty under section 112(b) - Third-party records and independent corroboration - Knowledge of liability to confiscation. - HELD THAT: - The Tribunal held that the ledger entries and computer print-outs relied upon by the Department were records of a third party and neither belonged to nor were maintained by the appellant. In the absence of independent corroboration, such material could not form the basis for penalty under section 112(b). The Tribunal further held that the provision requires both involvement in acquiring possession of, or being concerned in dealing with, goods liable to confiscation, and knowledge or belief that such goods were so liable. On the record, neither requirement was satisfied, and the impugned order itself disclosed no basis to attribute to the appellant any knowledge that the goods were liable to confiscation under section 111. [Paras 18, 19, 20, 21]

The conditions for imposition of penalty under section 112(b) were held not to be satisfied, and the penalty on the appellant was therefore unsustainable.

Final Conclusion: The Tribunal set aside the impugned order insofar as it imposed penalty on the appellant. It held that the section 108 statement was not admissible for want of compliance with section 138B, and that uncorroborated third-party records did not establish the statutory conditions required for penalty under section 112(b).

Admissibility of statements recorded under section 108 - Non- compliance with section 138B - Third-party documents and corroboration - imposition of penalty under section 112(b) - Clandestinely removal of large quantities of M.S. Ingots, from its SEZ unit without obtaining permission or giving intimation to the jurisdictional Customs authorities and without payment of customs duty.

Admissibility of statements under section 108 - HELD THAT: - The Tribunal held that the impugned order had relied upon statements recorded under section 108, but there was nothing on record to show that the statutory procedure under section 138B had been followed. In the absence of such compliance, those statements were not legally admissible for sustaining the penalty. [Paras 13]

Reliance on the statements recorded under section 108 was held to be impermissible.

Third-party documents and corroboration - Penalty under section 112(b) - Knowledge of liability to confiscation. - HELD THAT: - The Tribunal found that the ledger entries and computer printouts relied upon were third-party records which neither belonged to nor were maintained by the appellant, and, without independent corroboration, they could not form the basis for penalty. It further held that section 112(b) requires proof of the person's possession of, or concern with, goods liable to confiscation, along with knowledge or belief that such goods were liable to confiscation. Those foundational requirements were not established, and the impugned order itself disclosed no basis to attribute such knowledge to the appellant. [Paras 14, 15, 16, 17]

The essential ingredients for imposition of penalty under section 112(b) were held not to be satisfied.

Final Conclusion: The penalty imposed on the appellant under section 112(b) of the Customs Act was set aside. The Tribunal held that the statements relied upon were not admissible for want of compliance with section 138B, and that the remaining third-party material did not establish the appellant's dealing with confiscable goods or the requisite knowledge.

Admissibility of statements made under section 108 - Non- procedure contemplated under section 138B - Evasion of duty -Third-party records - Statutory conditions for imposition of penalty under section 112(b) - Knowledge or belief.

Admissibility of statements. - HELD THAT: - The Tribunal held that statements recorded under section 108 could not be relied upon when the procedure required by section 138B had not been followed. It further held that the ledger entries and computer print-outs of NTAL were third-party records, neither belonging to nor maintained by the appellant, and in the absence of independent corroboration such material could not constitute the basis for imposition of penalty. [Paras 6, 7]

The evidentiary foundation adopted for imposing penalty on the appellant was held to be legally insufficient.

Statutory conditions for imposition of penalty under section 112(b) - Knowledge or belief - Goods liable to confiscation. - HELD THAT: - The Tribunal held that penalty under section 112(b) requires proof of two conditions: the person must have acquired possession of, or been concerned in dealing with, goods liable to confiscation, and must also have knowledge or reason to believe that such goods were liable to confiscation. On the findings recorded, neither requirement was satisfied, as there was nothing to show that the appellant had dealt with such goods or had knowledge or belief that they were liable to confiscation under section 111. [Paras 8, 9, 10]

Penalty under section 112(b) was held not imposable on the appellant.

Final Conclusion: The Tribunal set aside the impugned order insofar as it imposed penalty on the appellant. It held that the material relied upon was legally insufficient and that the essential ingredients of penalty under section 112(b) were not proved.

Admissibility of statements recorded under section 108 - Statutory requirements for compliance of section 138B - Penalty for dealing with goods liable to confiscation.

Statements under section 108 - Compliance with section 138B - The statement of the appellant recorded under section 108 could not be treated as relevant for sustaining the penalty in the absence of compliance with the procedure contemplated under section 138B of the Customs Act. - HELD THAT: - The Tribunal found that the impugned order had relied upon the appellant's statement recorded under section 108. It held that such statement could not be considered relevant because the mandatory procedure under section 138B had not been followed. The evidentiary reliance placed upon that statement by the adjudicating authority was, therefore, unsustainable. This is what was also held by the Tribunal in M/s Surya Wires Pvt. Ltd. vs. Principal Commissioner [2025 (4) TMI 441 - CESTAT NEW DELHI].[Paras 12]

The statement recorded under section 108 was held to be inadmissible for the purpose of sustaining the penalty.

Penalty under section 112(b) - Knowledge that goods are liable to confiscation - Dealing with confiscable goods - Penalty under section 112(b) could not be imposed on the appellant because the essential conditions of dealing with goods liable to confiscation and knowledge or belief of such liability were not established. - HELD THAT: - The Tribunal held that imposition of penalty under section 112(b) required proof of two conditions: the person must have acquired possession of, or been concerned in dealing with, goods liable to confiscation, and must also have had knowledge or reason to believe that the goods were so liable. On the facts found, neither condition stood satisfied. The computer printouts relied upon had been taken from the factory premises of NTAL and not from any computer in the possession of the appellant. There was also nothing in the impugned order to show that the appellant had dealt with the goods or had knowledge or belief that the goods were liable to confiscation under section 111. In the absence of proof of these statutory ingredients, the penalty was held to be untenable. [Paras 13, 14, 15, 16]

The penalty imposed on the appellant under section 112(b) was set aside as the statutory ingredients for its invocation were not proved.

Final Conclusion: The Tribunal held that the appellant's statement could not be relied upon without compliance with section 138B and that the ingredients necessary for penalty under section 112(b) were not established. The penalty imposed upon the appellant was, therefore, set aside and the appeal was allowed.

Levy of customs duty on supply of M.S. scrap to a unit located in a Special Economic Zone - Interest and the penalty under section 114 -Penalty under section 114AA without show cause notice.

Supplies to SEZ - Charge of customs duty - Interest and consequential penalty - HELD THAT: - Following the earlier decision by a Division Bench of this Tribunal in Cummins Turbo Technology vs. Commissioner of Customs, [2023 (11) TMI 1077 - CESTAT NEW DELHI] on the effect of the SEZ Act and the SEZ Rules, the Tribunal held that in respect of supplies covered by the statutory scheme governing SEZs, the legal authority to levy such duty did not survive. On that basis, the demand raised against the appellant on sale of M.S. scrap to the SEZ unit was unsustainable. Once the duty demand failed, the interest demand also could not survive, and penalty under section 114, being consequential to the alleged duty liability, was also not imposable. [Paras 17, 18, 19]

The duty demand, the interest thereon, and the penalty under section 114 were set aside.

Show cause notice - Penalty under section 114AA - Penalty under section 114AA could not be imposed when the show cause notice did not call upon the appellant to show cause against such penalty. - HELD THAT: - The Tribunal found that the show cause notice did not contain any proposal requiring the appellant to answer a charge for penalty under section 114AA. In the absence of such notice, imposition of that penalty was not sustainable. [Paras 20]

The penalty imposed under section 114AA was set aside.

Final Conclusion: The Tribunal set aside the impugned order insofar as it concerned the appellant. The demand of duty on supply of M.S. scrap to the SEZ unit, the corresponding interest, and the penalties under sections 114 and 114AA were all held to be unsustainable.

Refund claim - delay in sanctioning refund of the Extra Duty Deposit paid on the 42 Bills of Entry - time-limit for filing refund claim - Interest payable on the delayed refund under Section 27A - Provisional assessment - fulfilment ofUnjust enrichment - finalisation of provisional assessment - Whether or not the assessment has been made are finalised, as long as duty or interest has been paid, to which the respondents-importer is seeking refund of duty.

Extra Duty Deposit - Provisional assessment - Refund of deposit - Extra Duty Deposit collected in SVB-related provisional assessments is not customs duty, but a deposit taken for a specific purpose, and once the related-party valuation issue stood concluded in favour of the importer, the EDD became refundable without awaiting finalisation of the Bills of Entry on other unrelated aspects. - HELD THAT: - The Tribunal held that the Customs Act defines only duty and does not treat EDD as duty. EDD was collected under Board circulars as an additional deposit to secure timely submission of information in related-party valuation investigations and was distinct from duty and from the security taken under provisional assessment regulations. Since the SVB order had already accepted the declared transaction value and there was no case that the EDD was required to meet any deficiency in finally assessed duty, its retention could not be justified on the ground that provisional assessments on other issues such as test reports, demurrage or quantity variations had not yet been finalised. The statutory scheme of Section 18 governing provisional assessment and consequential adjustment/refund was held applicable mutatis mutandis to such EDD, and the departmental view that refund could be withheld till all Bills of Entry were finally assessed was rejected. [Paras 9, 10, 12]

EDD was refundable on conclusion of the SVB valuation proceedings and its refund was not dependent on later finalisation of the Bills of Entry on other grounds.

Delayed refund interest - Refund application completeness - Statutory interest - Interest was payable on the delayed refund of EDD, as the refund claim filed on 23.03.2016 and received on 30.03.2016 was complete in all material respects, and the Department could not defeat the claim by treating it as disposed of or by relying on its own failure to finalise assessments promptly. - HELD THAT: - the issue regarding payment of interest on refund have been examined in detail by the Hon’ble Supreme Court in the case of Ranbaxy Laboratories Limited Vs. Union of India and Others i[2011 (10) TMI 16 - SUPREME COURT], dealing with similar matter of refund under Central Excise statue which is pari materia to the similar provisions under the Customs statute. In the judgement of the Hon’ble Apex Court, it was held that liability of payment of interest for Revenue commences from the date of expiry of three months from the date of receipt of the application for refund under Section 11B(1) of the Central Excise Act, 1944.

The Tribunal found that the refund application had been filed in the prescribed form with the supporting documents, and that the Department's letter purporting to dispose of the claim as incomplete was legally unsustainable. The refund regulations permit return of an incomplete claim pointing out deficiencies, but not summary disposal of a claim which was materially complete, particularly when the remaining step, if any, was departmental finalisation of assessment. Relying on the departmental public notice requiring the refund section to accept such claims and obtain re-assessment or finalisation from the assessing group on priority, the Tribunal held that the Department could not take shelter behind non-finalisation caused by its own inaction. It further held that there was delay in sanctioning the refund, and that interest at the rate prescribed under Section 27A was payable. While discussing the statutory scheme, the Tribunal observed that, in principle, interest on refund arising from provisional assessment would stand governed by Section 18(4); however, on the facts, it upheld the appellate order granting interest from the expiry of three months after receipt of the refund claim, namely from 30.06.2016, until the actual refund on 27.07.2017. [Paras 9, 11, 12, 13, 14]

The importer was entitled to interest on the EDD refund for the period from 30.06.2016 till 27.07.2017, and the appellate order granting such interest was upheld.

Final Conclusion: The Tribunal held that EDD in an SVB matter is a refundable deposit and not customs duty, and that its refund could not be withheld on the ground that the Bills of Entry were pending finalisation on other issues. The Revenue's appeal was dismissed and the order granting interest on delayed refund for the period from 30.06.2016 to 27.07.2017 was sustained.

Enhancement of value and change in classification of the imported goods - confiscation of the non-offending brand goods - counterfeit / IPR-infringing goods - Intellectual property rights infringement - Transaction Value - Proportionality of Penalty.

Confiscation under misdeclaration - Reclassification without duty impact - Reasoned confiscation order - Confiscation of the declared non-offending shoes was not sustainable where the order gave no reasons for confiscating those goods and the change in classification had no impact on the duty liability. - HELD THAT: - The Tribunal found that the adjudicating order was completely silent as to why the declared goods bearing the local and other non-infringing brands were confiscated. It held that, in the absence of reasons, such confiscation was arbitrary and could not be sustained. The Tribunal further held that a mere change in classification, when it did not alter the rate or quantum of duty, could not by itself justify confiscation under Section 111(m). It also noted that the offending and non-offending goods were separately packed and there was no basis to treat the non-offending goods as used for concealment or camouflage of the infringing goods. [Paras 8, 9, 12]

Confiscation of 9,360 pairs of All Sky brand gents shoes, 240 pairs of D&B brand gents shoes and 300 pairs of Eleprint brand gents shoes was set aside, and the redemption fine relatable thereto could not survive.

Intellectual property rights infringement - Counterfeit goods - Natural justice - Absolute confiscation of the undeclared counterfeit branded shoes for infringement of intellectual property rights was maintainable, though the right holders' reports ought to have been shared with the importer. - HELD THAT: - The Tribunal observed that, once the goods were found counterfeit on the basis of the right holders' reports, Rule 6 of the Rules read with Section 11 rendered them prohibited and not releasable to the importer. It did note that the authorities should have shared those reports with the appellant in keeping with natural justice. However, the Tribunal also recorded that the appellant had not disputed the fact of IPR violation and that the supplier's explanation of mistaken loading itself established the infringement. On that basis, while declining to attribute mala fides to the importer, the Tribunal upheld absolute confiscation of the infringing goods. [Paras 9, 10, 13]

Absolute confiscation of the undeclared PUMA brand ladies shoes and Converse brand gents sports shoes was maintained.

Penalty under customs law - Absence of mala fides - Departmental lapses - The penalty imposed on the importer required substantial reduction in view of absence of mala fides and the delays attributable to the Department. - HELD THAT: - The Tribunal held that the circumstances did not justify attributing mala fides to the importer in relation to the infringing goods. It also took note of procedural lapses and delays on the part of the Revenue authorities in the handling of the consignment and adjudication process, which had caused prejudice to the appellant. In that background, it found that the original penalty was excessive and that a nominal penalty alone would meet the ends of justice. [Paras 10, 11, 14]

The penalty was reduced from the amount imposed by the lower authority to Rs. 5,000.

Final Conclusion: The appeal was partly allowed. Confiscation of the non-infringing declared goods and the related redemption fine were set aside, absolute confiscation of the counterfeit undeclared branded goods was sustained, and the penalty on the importer was reduced substantially.

Classification of mixed iron ore consignments - classified for export duty as iron ore fines alone or separated for different duty rates - Ad valorem duty -determine the percentage of moisture and Fe content - Final self-assessment and redetermination of export parameters - Assessable value for export duty - Extended period and penalty for misdeclaration.

Classification of mixed iron ore consignments - Applicable rate of export duty - HELD THAT: - The Tribunal held that, even though the department could rely on subsequent material for re-assessment of self-assessed shipping bills, the settled principle governing classification of a mixed consignment had to be applied. Where the export consisted predominantly of iron ore fines with some quantity of lumps, the consignment could not be split for applying different rates; it had to be treated as iron ore fines as a whole and duty was to be levied accordingly. [Paras 9, 14]

The higher rate applicable to iron ore lumps could not be applied by segregating part of the mixed consignment.

Final self-assessment - Moisture content - Fe content - Ad valorem export duty - In the case of finally self-assessed shipping bills, the declared moisture content and Fe content were to govern the assessment, and variation in quantity due to moisture had no significance where duty was ad valorem. - HELD THAT: - The Tribunal noted that the exports had proceeded on finally assessed self-assessed shipping bills and not under provisional assessment. In that situation, the demand had to be tested on merits in the context of final assessment. It ultimately held that, for moisture content, the declared figure was to be taken, and any variation in quantity on account of moisture was immaterial because the levy was on ad valorem basis. As regards Fe content, the figure declared at the time of export was to be adopted since the assessment was final. [Paras 12, 14]

The department could not redetermine duty by substituting the declared moisture and Fe content in the manner adopted in the impugned order.

Assessable value for export duty - Bank Realization Certificate - Declared assessable value - In the facts of the case, the value for export duty could not be redetermined on the basis of BRCs or subsequent realization, and the declared assessable value at the time of export had to be taken. - HELD THAT: - The Tribunal observed that, although the exporter had relied on the amounts reflected in BRCs, the exports were not provisionally assessed and the entire case had to be examined as one of final self-assessment. It further distinguished the decisions cited for acceptance of BRC value on the ground that those cases involved contractual arrangements permitting provisional declaration and later finalization based on discharge-port parameters. Since such foundation did not govern the present finally assessed shipping bills, BRC value by itself could not replace the declared assessable value. [Paras 11, 12, 13, 14]

The declared assessable value, and not the BRC value or subsequent realization figure, was to be adopted for working out duty.

Invocation of the extended period - Imposition of Penalty for misdeclaration - Misdeclaration in self-assessed shipping bills - HELD THAT: - The Tribunal accepted the Commissioner's reasoning that the incorrectness of the declarations came to light only when final invoices and discharge-port reports were later produced. It held that the declarations made at the time of export were not correct, and there had been deliberate withholding of the fact that the invoices were provisional or subject to contractual variation. On that basis, the extended period was rightly invoked and the penalty was not infirm. [Paras 14]

The finding on extended limitation and equivalent penalty was upheld.

Final Conclusion: The Tribunal partly upheld the basis of the demand by sustaining the findings on classification of mixed consignments as iron ore fines and on invocation of the extended period with penalty, but rejected redetermination founded on the department's approach to moisture, Fe content and value. The matter was remanded to the adjudicating authority only for redetermination of the differential duty, if any, in accordance with those findings.

Rejection of the appeals on the basis of written acceptance of enhanced value - Transaction value - Speaking order - Contemporaneous Imports -Non- compliance with the statutory requirement - Waiver of Statutory Right -Proper officer to communicate in writing the reasons for doubting the truth or accuracy of the declared transaction value - HELD THAT:- The Tribunal found that the Commissioner (Appeals) proceeded only on the basis of the letters said to evidence acceptance of enhanced value and failed to consider the importer's letters seeking provisional or final clearance on payment of duty on the enhanced value under protest, which showed that the case was not one of unconditional acceptance. Following Century Metal Recycling Pvt. Ltd. vs. UOI [2019 (5) TMI 1152 - SUPREME COURT] and the Delhi High Court decision in Niraj Silk Mills and Hanuman Prasad & Sons Vs. Commissioner of Customs (ICD) Patparganj [2024 (11) TMI 1361 - DELHI HIGH COURT], the Tribunal held that the statutory scheme requires the proper officer to communicate in writing the reasons for doubting the truth or accuracy of the declared transaction value, and such requirement cannot be ignored or waived. A written acceptance, at the highest, dispenses only with a speaking order in a limited sense and does not deprive the importer of the statutory right to question the reassessment; nor can reassessment be sustained merely on asserted contemporaneous data or NIDB-based enhancement without disclosure of such material. Since the bills of entry were post 17.05.2019 and no details of the alleged contemporaneous imports were furnished, the impugned orders were held to be not sustainable in law. [Paras 12, 13, 14, 15, 16]

The impugned Orders-in-Appeal were set aside and all six appeals were allowed with consequential relief according to law.

Final Conclusion: The Tribunal held that the enhancement of value could not be sustained merely on the basis of consent letters, particularly when the importer had sought clearance on enhanced value under protest and the statutory requirements governing rejection of declared value had not been complied with. Following the Delhi High Court, the impugned appellate orders were set aside and all six appeals were allowed.

Customs Broker obligations - Due diligence in verification of GST registration - Verification of Client Credentials - Reliance on Authentic Documents - Violation of the provisions of regulations 10(d), 10(e) and 10(n) of the 2018 Regulations.

Advice to client - Regulation 10(d) - The Customs Broker could not be held to have violated the obligation to advise the client to comply with the law merely because the authorization letter did not set out the scope or contents of such advice. - HELD THAT: - The Tribunal held that regulation 10(d) only requires the Customs Broker to advise the client to comply with the provisions of the Act and allied laws. Since the authorization letter itself stated that such advice had been given, the absence of further particulars regarding the nature or content of the advice did not establish any breach of the regulation. [Paras 5]

The finding of violation of regulation 10(d) was unsustainable.

Due diligence - GST registration verification - Regulation 10(e) - The Customs Broker was not in breach of the duty of due diligence where the exporter held a valid GST registration on the date of export, notwithstanding an earlier cancellation and fresh registration. - HELD THAT: - The Tribunal noted that the Commissioner did not dispute that the exporter had obtained GST registration before the export was made. In that situation, the earlier cancellation of the GST registration was held to be immaterial for examining compliance on the relevant date, and the alleged omission to notice the earlier cancellation could not amount to a violation of regulation 10(e). [Paras 8]

The finding of violation of regulation 10(e) could not be sustained.

Verification of exporter particulars - Functioning at declared address - Regulation 10(n) - The Customs Broker could not be said to have failed in verification under regulation 10(n) once the exporter possessed GST registration on the relevant date. - HELD THAT: - The Tribunal held that the existence of a valid GST registration on the relevant date defeated the Commissioner's conclusion that the Customs Broker should have acted upon the fact of an earlier cancellation followed by fresh registration. The Tribunal also noted that, in the proceedings under the Customs Act, the Joint Commissioner had categorically found that the appellant had not violated regulation 10(n). [Paras 11]

The finding of violation of regulation 10(n) was set aside.

Final Conclusion: The revocation of the Customs Broker licence and forfeiture of security were set aside. The appeal was allowed and the licence was directed to be restored forthwith.

Dismissal of application seeking Interim relief in oppression and mismanagement proceedings - disposal of assets called for interference - Reasoned consideration of amendment and stay applications

Interim relief in oppression and mismanagement proceedings - Status quo on sale of assets - The dismissal of the application seeking stay of the EOGM and restraint against disposal of the company's assets was upheld, while protection against sale of assets was continued pending decision of the main company petition. - HELD THAT: - The Appellate Tribunal found no illegality in the impugned order dismissing IA No.21/2023 and adhered to the view taken by the Adjudicating Authority. At the same time, since the main company petition challenges the increase in share capital as malafide, the Tribunal considered it appropriate to continue the earlier status quo direction concerning sale of the company's assets until the company petition is decided. [Paras 3, 4]

The appeal against dismissal of IA No.21/2023 was dismissed, but the status quo on sale of the company's assets was directed to continue till disposal of the company petition.

Reasoned consideration of amendment and stay applications - Fresh hearing on merits - The dismissal of the other interlocutory applications on the ground that they were covered by IA No.21/2023 was not sustained, as those applications concerned earlier and distinct incidents requiring separate consideration. - HELD THAT: - The Appellate Tribunal held that the issues raised in IA Nos.25/2021, 8/2021 and 22/2023 related to incidents prior to those involved in IA No.21/2023. For that reason, they ought to have been dealt with separately by reasoned orders and could not be disposed of merely by treating them as covered by the order in IA No.21/2023. The matters were therefore directed to be heard afresh and decided on merits after hearing both sides. [Paras 9, 10]

The connected appeals were disposed of by directing fresh hearing and merit-based disposal of IA Nos.25/2021, 8/2021 and 22/2023.

Final Conclusion: The Appellate Tribunal upheld the dismissal of IA No.21/2023, while continuing the protection against sale of the company's assets pending the main petition. The connected matters concerning amendment and interim relief in IA Nos.25/2021, 8/2021 and 22/2023 were directed to be heard afresh and decided on merits.

Maintainability of appeal after commencement of CIRP - Amendment of cause title beyond limitation - Incompetent appeal and non-curable defect - Appeals filed in the name of the corporate debtor after commencement of CIRP could not be converted, after expiry of the statutory period under Section 61, into appeals by the suspended directors through amendment of the memo of parties. - HELD THAT: - The Tribunal held that once CIRP had commenced, an appeal against the admission order could not be maintained in the name of the corporate debtor. Relying on Nitendra Kumar Tomer, Suspended Director, Ambro Asia Private Limited vs. Unox S.P.A and Another [2026 (4) TMI 877 - SUPREME COURT], it held that such an appeal is wholly incompetent and not a merely defective appeal carrying a curable defect. The controlling principle applied was that a suspended director could have preferred the appeal only within the limitation prescribed under Section 61, and after expiry of the outer limit of 45 days, amendment of the cause title to substitute the suspended director was impermissible. The distinction sought to be drawn on the ground that leave to amend had been sought on the first listing of the appeals was rejected, the Tribunal holding that what bound it was the ratio of the Supreme Court decision and not factual variations which did not alter that principle. Since in both appeals the amendment applications were admittedly filed beyond 45 days from the impugned orders, the requested substitution could not be allowed. [Paras 11, 15, 16, 17, 22]

The amendment applications were dismissed and the appeals, having been filed in the name of the corporate debtors and remaining incapable of valid conversion after limitation, were dismissed as incompetent.

Final Conclusion: Following the law declared by the Supreme Court, the Tribunal held that the appeals instituted in the name of the corporate debtors after commencement of CIRP were incompetent and could not be cured by later substitution of the suspended directors after expiry of the statutory outer limit. The amendment applications and both appeals were accordingly dismissed.

Entitlement to claim tax exemption after disposal of MA - Rehabilitation by giving financial assistance -Finality of unchallenged BIFR order - sanctioned scheme SS-08 - Deemed consent under rehabilitation scheme - Effect of direction to grant exemption from payment of Entry Tax till 2014 under the sanctioned scheme -Maintainability of proceedings founded on invalid notification.

Whether the appellant was entitled to claim tax exemption even after disposal of MA No.442/2011 on 16.08.2011?. - HELD THAT: - The Tribunal held that in MA No. 442/2011 the appellant had sought not only de-registration from the purview of SICA but also a direction to the State Government to implement the unimplemented provisions of the sanctioned scheme. The BIFR, however, only discharged the company from the purview of SICA and disposed of the application without granting the prayer for implementation of the scheme against the State. Since that order was not appealed within limitation, it attained finality, and the appellant could not thereafter reopen the same claim through subsequent proceedings. The Tribunal also noted that the sanctioned scheme itself was for the period 2007-14, which had in any event come to an end. [Paras 11, 12]

The appellant was not entitled to claim tax exemption after disposal of MA No. 442/2011.

Whether Sanctioned Scheme SS-08 sanctioned by BIFR on 02.09.2009 shall be deemed to be consented by the State of Orissa within meaning of Section 19(2) of the SICA? - HELD THAT: - The Tribunal held that the deeming fiction in Section 19(2) applies only where no consent is communicated within the prescribed period. In the present case, at the hearing on objections to the draft rehabilitation scheme, the representative of the State expressly stated that the Government had no policy to provide relief to sick companies. That statement amounted to a clear denial of consent to the proposed tax concessions, including entry tax exemption. Consequently, the sanctioned scheme was not binding on the State under Section 19(3). The decisions in Damodar Valley Corporation [2009 (7) TMI 781 - HIGH COURT OF DELHI] and Union of India v. Cimco Ltd. & Ors. [2014 (2) TMI 1318 - DELHI HIGH COURT] were distinguished because in those cases no objection or refusal had been communicated within time. [Paras 19, 20, 22, 24]

There was no deemed consent by the State of Orissa, and Clause 20 of the sanctioned scheme was not binding on it.

Maintainability of proceedings founded on invalid notification- Whether the appellant has made out a case before the NCLT for issuing any direction for granting the exemption from payment of Entry Tax till the year 2014 as per sanctioned scheme dated 02.09.2008?. - HELD THAT: - The Tribunal held that the order of the High Court merely directed the NCLT to decide the pending application in accordance with law and did not conclude any issue of maintainability in the appellant's favour. It further held that reliance on the Central Government notification dated 24.05.2017 was misconceived, since the validity of that notification had already been negatived, and proceedings founded on treating a sanctioned scheme as a deemed approved resolution plan under that notification could not be maintained. Independently of that, once the State had not consented to the concession clause, no direction could be issued for grant of entry tax exemption under the scheme. [Paras 27, 28, 29, 30, 31]

The company petition before the NCLT did not furnish any basis for directing exemption from payment of entry tax, and the claim was rightly rejected.

Final Conclusion: The Appellate Tribunal upheld the rejection of the appellant's company petition and dismissed the appeal. It held that the earlier BIFR order had attained finality, the State of Orissa had not given deemed consent to the tax concession clause, and no enforceable claim for entry tax exemption could be sustained before the NCLT.

Default under the Insolvency and Bankruptcy Code - Financial debt - Adjustment of dues from cash collateral - erase the earlier default or alter the date of default - Maintainability of Section 7 application. - HELD THAT: - The notice dated 17.04.2025 was part of Section 7 application which mention that default has been committed of payment of Rs. 18,68,342/-which was required to be paid on 05.03.2025. The default being committed notice dated 17.04.2025 was issued but no repayment was made. In pursuance of the notice, hence, the amount was recouped from the cash collateral as per the agreement between the parties. Subsequently, on 02.05.2025, loan recall notice was issued by the Financial Creditor giving details of facility agreement and defaults committed by the Financial Creditor. Total outstanding was mentioned in the loan recall notice including principal and interest accrued. After the loan recall notice when amount was not paid, Section 7 application was filed. In Part-IV of Section 7 application, the Appellant has given brief facts of the case, details of the facility agreement and the details with regard to default committed.

The Appellate Tribunal held that the pleadings in Part IV of the Section 7 application clearly disclosed the facility documents, the initial non-payment on 05.03.2025, the subsequent adjustment from the cash collateral, the recall notice, and the continuing outstanding liability. Under the contractual clauses governing consequences of default, the lender was entitled to utilise the security towards outstanding dues; however, such recoupment from security did not mean that no default had occurred on the due date. The determinative principle applied was that once non-payment occurs when the debt has become due and payable, the historical fact of default is not erased by later adjustment or payment, which is relevant only to the computation of the outstanding amount. On that basis, the finding of the Adjudicating Authority that the application was inherently defective and incomplete for want of a correct date of default or updated computation was held unsustainable. [Paras 8, 10, 11]

The rejection of the Section 7 application was set aside, and the application was revived before the Adjudicating Authority for fresh consideration in accordance with law.

Final Conclusion: The Appellate Tribunal held that utilisation of cash collateral after the borrower failed to pay on the due date did not obliterate the default. The order rejecting the Section 7 application as defective was set aside, and the application was restored for a fresh order in accordance with law.

Maintainability of recall application filed against an order passed on merits after participation of the appellant in the proceedings- Plea of non-impleadment, want of notice and denial of hearing - Limitation for appeal under the IBC - Exclusion of time under Section 14 of the Limitation Act - breach of audi alteram partem -Doctrine of alternate remedy -Natural justice and deemed notice through participation - seeking condonation of 12 days of delay in filing the appeal.

Recall of order passed on merits - Natural justice and deemed notice through participation - HELD THAT: - The Appellate Tribunal held that the grounds taken for recall, namely non-impleadment, absence of notice and denial of hearing, were contradicted by the order sought to be recalled, which expressly recorded submissions on behalf of the SRA and its participation in the proceedings. Once the appellant was represented by counsel, argued the matter on merits and the order itself directed communication to the SRA, the plea of breach of audi alteram partem was unsustainable. The Tribunal further held that recall is permissible only where there is an apparent procedural flaw attributable to the Tribunal; it is not available to reopen an order passed on merits after hearing the party. [Paras 12, 16, 19]

The appeal against rejection of the recall application was held to be without merit, and the rejection of recall was affirmed.

Limitation for appeal under the IBC - Exclusion of time under Section 14 of the Limitation Act - The appeal against the original order allowing the EPFO claim was barred by limitation, and the appellant was not entitled to exclusion of time on the basis of the belated recall proceedings and subsequent writ proceedings. - HELD THAT: - The Appellate Tribunal held that the appellant ought to have filed an appeal against the order under Section 61 within the prescribed period, but instead filed a recall application after expiry of the appeal period. Even assuming Section 14 of the Limitation Act could apply to proceedings pursued before a wrong forum, that principle could not assist the appellant because the recall itself had been instituted beyond the statutory period for appeal and could not be used to circumvent the time discipline underlying the IBC. The Tribunal therefore rejected the plea for condonation and declined to treat the recall and writ proceedings as a basis to save limitation for the substantive appeal. [Paras 15, 17, 20]

The application for condonation of delay was rejected and the appeal against the original order was dismissed as time-barred.

Final Conclusion: The Appellate Tribunal upheld the rejection of the recall application, holding that the appellant had participated in the earlier proceedings and that no procedural defect existed to justify recall of an order passed on merits. The separate appeal against the original order was dismissed as barred by limitation, and the plea for exclusion of time under Section 14 of the Limitation Act was not accepted.

Applicability of borrowing and lending regulations - Foreign direct investment and downstream investment - Scope of adjudication vis-a-vis show cause notice - FDI in trusts - Downstream Investment - Vicarious liability under FEMA - Principles of Natural Justice.

Applicability of borrowing and lending regulations - Receipt of FDI towards equity and preferential capital could not be treated as borrowing in rupees so as to attract Section 6(3)(b) read with Regulations 4 and 6 of the Foreign Exchange Management (Borrowing and Lending in Rupees) Regulations, 2000. - HELD THAT: - The Tribunal held that the show cause notices themselves proceeded on the basis that the appellant company had received inward remittances as FDI towards equity and preferential capital from non-resident investors. Regulations 4 and 6 of the Borrowing and Lending in Rupees Regulations apply to borrowing in rupees and to use of borrowed funds, whereas the transaction in question was not borrowing by the appellant company from a non-resident. Mere subsequent use of FDI funds for advancing monies under the management arrangement could not convert the original FDI transaction into a borrowing transaction. Consequently, the penalty founded on Section 6(3)(b) read with Regulations 4 and 6 was held to be based on provisions inapplicable to the facts. [Paras 40, 41, 49]

The finding of contravention under Section 6(3)(b) read with Regulations 4 and 6 of the Borrowing and Lending in Rupees Regulations, 2000 was unsustainable.

Scope of adjudication vis-a-vis show cause notice - Downstream investment - TISPRO Regulations - The adjudicating authority could not sustain adverse findings on Regulations 5 and 14 of the TISPRO Regulations and on alleged impermissible downstream investment when those provisions and the necessary foundational allegations were not set out in the show cause notices. - HELD THAT: - While the Tribunal accepted the general proposition that mere non-reference to a provision does not by itself divest jurisdiction if the material facts disclosing that contravention are stated, it found that the show cause notices in the present case were framed on the footing of misuse of FDI under the borrowing regulations and did not disclose the factual basis later adopted for applying Regulations 5 and 14 of the TISPRO Regulations. The finding that the appellants were operating in infrastructure and service sector so as to render the FDI impermissible was not founded on the show cause notices. Further, Regulation 14 defining downstream investment was introduced by amendment in 2013, and in any event its definition covers indirect foreign investment by one Indian company into another Indian company by subscription or acquisition. Here, the allegation itself was of loans advanced to Lahore Hospital Society, which was found to be a society registered under the Societies Registration Act, 1860 and not another Indian company. The respondent could not show how indirect foreign investment or downstream investment was made out on those facts. [Paras 44, 45, 46, 47, 48]

The findings based on Regulations 5 and 14 of the TISPRO Regulations and on the theory of downstream investment were held not maintainable on the pleadings and facts of the case.

FDI in trusts - FDI policy - Show cause notice - The reliance on the FDI policy restriction on FDI in trusts was untenable since the case was not one of bringing FDI into a trust and Lahore Hospital Society was shown on record to be a society, not a trust. - HELD THAT: - The Tribunal held that paragraph 3.3.3 of the circular restricting FDI in trusts other than venture capital funds did not apply on the facts found. Even according to the case against the appellants, the FDI had been received by the Indian company and not by Lahore Hospital Society. Further, the record showed that Lahore Hospital Society was registered under the Societies Registration Act, 1860, and no material was produced to establish that it was a trust registered under the Indian Trust Act, 1882. The penalty with reference to contravention of the FDI policy was also found to be unsupported because such contravention had not been specifically alleged in the show cause notices. [Paras 51]

No contravention of the FDI policy on the footing of FDI in a trust was made out.

Section 6(3)(e) - Borrowing or lending in rupees - Issue of securities - Section 6(3)(e) had no application because the case concerned investment in securities and not borrowing or lending in rupees between a resident and a non-resident. - HELD THAT: - The Tribunal observed that Section 6(3)(e) deals with borrowing or lending in rupees in whatever form between a person resident in India and a person resident outside India. The present matter, however, related to non-resident investment in the appellant company by way of equity and preferential capital, a field separately governed by the regulations dealing with transfer or issue of security. The adjudicating authority had intermingled the regime governing borrowing and lending with the separate regime governing issue of securities. Even assuming the authority could look beyond the precise provision cited in the notice, the facts disclosed did not attract Section 6(3)(e). [Paras 50]

Section 6(3)(e) was held inapplicable to the transactions in question.

Vicarious liability under FEMA - Section 42 - The penalty on the Managing Director under Section 42 could not survive once the principal contravention against the company itself failed. - HELD THAT: - Having held that no contravention was made out against the appellant company under Section 6(3)(b), the borrowing regulations, or the FDI policy, the Tribunal held that the vicarious penalty imposed on the Managing Director under Section 42 could not be sustained. The individual liability was consequential to the alleged company contravention and therefore necessarily fell with it. [Paras 54]

The penalty imposed on the Managing Director under Section 42 was also set aside.

Final Conclusion: The Tribunal held that the impugned penalties were founded on statutory provisions and regulatory concepts inapplicable to the transactions in question and, in part, on grounds travelling beyond the show cause notices. The impugned orders were therefore set aside and all the appeals were allowed.

Entitlement to regular bail - Money-Laundering - mandatory twin conditions in Section 45(1) read with Section 45(2) - proceeds of crime - On a prima facie view of the investigation material (search recoveries, CDR links, bank deposits and documentary evidence) and having regard to the statutory presumption under Section 24 and the mandatory twin conditions of Section 45 of PMLA, the High Court found no ground to grant regular bail and dismissed the bail application; observations are confined to bail stage and do not prejudice trial on merits. - HELD THAT:- Delay was condoned, the Special Leave Petition was dismissed for want of grounds to interfere with the impugned order [2025 (9) TMI 874 - JHARKHAND HIGH COURT], and the Trial Court was directed to expedite the trial.

Entitlement toRegular bail - failure to discharge tax liability - Custody in tax offence complaint. -HELD THAT: - The Court found that the petitioners had already undergone substantial custody in the predicate offences as well as in the present proceedings, that part payment of the alleged liability had been made, and that cash and immovable assets of the company and family members stood attached. In those attending circumstances, and without expressing any opinion on the merits of the complaint, the Court held that no useful purpose would be served by keeping the petitioners in custody in the present case. [Paras 3, 5]

The petitioners were directed to be released on bail on furnishing bonds to the satisfaction of the competent court, while the existing attachment over movable and immovable assets, including bank accounts, was directed to continue subject to the conditions stated by the Court.

Final Conclusion: The petition was disposed of by granting regular bail to the petitioners. Continued attachment of the relevant assets and bank accounts was maintained, subject to the limitations imposed by the Court.

Exclusion under "management, maintenance or repair" - works contract service - excisable goods -Explanation to Section 2(d) of Central Excise Act - marketability - Tribunal held that retreading of tyres is excluded from Service Tax under the definition of "management, maintenance or repair" w.e.f. 01.05.2006, that on merit the activity has characteristics of a works contract with a dominant material component, and ultimately that retreaded tyres are "excisable goods" under the Tariff (Chapter/Heading 4012 introduced w.e.f. 20.08.2005/28.02.2005), concluding that the activity is not a service and no Service Tax is payable. - HELD THAT:- Delay was condoned, and the civil appeals were dismissed as the Court was not inclined to interfere with the impugned order[2025 (8) TMI 495 - CESTAT KOLKATA].

Service tax on un-invoiced allocations made by the foreign parent company to the Indian subsidiary- Cost sharing and reimbursement - Associated enterprises - Point of taxation. -HELD THAT: - The Tribunal held that the taxable event was absent because the un-invoiced allocations represented expenses whose benefit accrued to the parent company itself and were neither linked to any service rendered to the respondent nor relatable to any agreed consideration. The respondent had already discharged service tax on invoiced allocations representing services actually charged to it, while the balance un-invoiced allocations remained only in the parent company's internal records and were not entered in the respondent's books or paid by it. The Tribunal applied the principle that mere sharing of cost or reimbursement, in the absence of a contractual service provider-recipient relationship and consideration, cannot be subjected to service tax. It further held that Explanation (c) to Section 67 and the second proviso to Rule 7 of the Point of Taxation Rules did not assist the Revenue, since the relevant debit must be in the books of account of the person receiving the service; entries in the parent's HFM system could not be treated as debit entries in the respondent's books. On that basis, the demand and consequential penalties were unsustainable. [Paras 15, 17, 18, 19, 20]

The Revenue's challenge failed, and the order dropping the service tax demand and penalties was affirmed.

Final Conclusion: The Tribunal held that un-invoiced allocations reflected only in the parent company's internal records, without any service rendered to the respondent, consideration, or debit in the respondent's books, could not be taxed under reverse charge. The Revenue's appeals were dismissed and the order dropping the demand and penalties was affirmed.

Demand on foreign currency payments relating to import of goods and unidentified transactions - Reverse charge mechanism - Place of Provision of Service - Expenses incurred for events, exhibition, accommodation, sponsorship and reimbursement outside India - reimbursement of expenses and expenses incurred on behalf of the head office - Revenue neutrality - Extended period of limitation.

Reverse charge on import of services - Foreign currency remittances and taxable service - Chartered Accountant certificate - HELD THAT: - The Tribunal held that liability under Section 66A and the later reverse charge provisions arises only on import of service and not on payments made towards import of goods. Revenue had already accepted documentary support for a substantial part of the transactions, and for the balance the assessee had produced Chartered Accountant certificates along with supporting documents such as bills of entry, invoices or bank letters. In the absence of evidence showing receipt of taxable services, the Department could not presume that foreign remittances represented consideration for services. The Tribunal also accepted that a Chartered Accountant's certificate could not be ignored without contrary evidence. [Paras 8]

The demand relating to amounts found to pertain to import of goods was set aside.

Tax already paid under reverse charge - Accrual entries - Point of taxation - HELD THAT: - The Tribunal found that challans evidencing prior payment of service tax under reverse charge were available for most of the amount claimed, and demand to that extent had to be dropped. As regards the year-end provisions, the Revenue itself did not dispute that these were provisional accrual entries later reversed when actual invoices were received. Applying Rule 7 of the Point of Taxation Rules, the Tribunal held that in reverse charge cases tax becomes payable on payment, or within the prescribed period from invoice, whichever is earlier. Since neither payment in foreign currency nor the corresponding invoice had arisen at the stage of mere provisioning, no service tax could be demanded on such accrual entries. [Paras 8]

The demand was deleted to the extent tax had already been discharged and was also set aside in respect of reversed accrual entries; only the small portion admitted to relate to import of service without supporting challans was held maintainable, subject to the separate findings on revenue neutrality and limitation.

Place of provision of services outside India - Services consumed outside India - Reimbursement of expenses - HELD THAT: - The Tribunal noted that the Revenue did not dispute the character of the transactions as expenses relating to events, exhibitions, accommodation and allied activities outside India. Reading Sections 64, 65B and 66B with Rules 5 and 6 of the Place of Provision of Services Rules, it held that service tax is leviable only where the services are provided in the taxable territory, and in the case of accommodation and event-related services the place of provision is where the immovable property is located or where the event is actually held. Since these services were availed and consumed outside India, they were not received or imported into India. On the same reasoning, reimbursements of expenses incurred outside India were also held not to constitute taxable import of business auxiliary service. [Paras 8]

The demands relating to expenses on events and accommodation outside India, sponsorship of sports events outside India, and reimbursement of expenses incurred outside India were set aside.

Reimbursement of expenses - Taxability of reimbursed expenditure - HELD THAT: - The Tribunal treated the transaction as one of reimbursement and not as payment for receipt of any service by the assessee. It recorded that the verification report itself accepted that the amount was not paid towards any service but represented reimbursement of expenditure relating to goods or services consumed outside India. Relying on UOI Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT], the Tribunal held that, for the period prior to 14-05-2015, service tax was not leviable on reimbursement of expenses. [Paras 8]

The demand on expenses incurred on behalf of the head office was set aside.

Burden to identify taxable service - Currency fluctuation - Presumption of taxability - HELD THAT: - The Tribunal held that all foreign currency remittances cannot automatically be treated as consideration for taxable services. In the disputed residual amount, the Revenue had not identified the nature of the alleged service, and in the case of currency fluctuation there was no basis to treat such variation as consideration for a service. In the absence of a demonstrated taxable service, the demand rested only on presumption and was therefore unsustainable. [Paras 8]

The residual demand founded on unidentified transactions and currency fluctuation was set aside.

Revenue neutrality - Cenvat credit availability - Extended period of limitation - HELD THAT: - The Tribunal recorded that the Revenue did not dispute that any service tax payable on the alleged import of services would have been available to the assessee as Cenvat credit. Following Coca-Cola India Pvt. Ltd. [2007 (4) TMI 17 - SUPREME COURT], Jet Airways India Ltd.[2016 (8) TMI 989 - CESTAT MUMBAI] and Indus Valley Partners (India) Ltd. [2024 (1) TMI 886 - CESTAT ALLAHABAD], it held that where tax paid under reverse charge is fully available as credit, the situation is revenue neutral and the demand is liable to fail on that ground as well. It further held that the dispute concerned interpretation of the provisions relating to import of services, reverse charge and place of provision, and therefore the extended period of limitation could not have been invoked. [Paras 14, 15, 16]

The entire demand, and consequently the interest and penalties, were set aside.

Final Conclusion: The Tribunal held that the impugned service tax demands on foreign currency remittances were unsustainable, as the transactions were either not import of services, related to services consumed outside India, constituted mere reimbursements or accrual entries, or were otherwise revenue neutral. The entire demand, along with interest and penalties, was set aside and both appeals were allowed.

Service tax demand on transportation charges - Erroneous computation of taxable transportation charges - Export-related GTA exemption - Procedural lapse vis-a-vis substantive exemption - Denial of exemption under the relevant service tax notifications merely because Forms EXP-1 and EXP-2 filed belatedly or other procedural requirements not met - Penalty under Sections 78 and 77(2).

Erroneous computation - Inclusive value of service tax - ST-3 returns - The service tax demand could not be sustained where the Revenue computed transportation charges on an incorrect gross figure and ignored the tax already reflected in the assessee's records. - HELD THAT: - For Financial Year 2008-09, the Tribunal found that the figure adopted by the Revenue from the Profit and Loss Account was a gross amount which already included the service tax and interest previously paid by the appellant. The appellant had disclosed the relevant service tax payment in its statutory ST-3 returns and had also furnished those returns, but they were not considered. On that basis, the Tribunal held that the residual demand arose only from erroneous computation. For Financial Years 2011-12 and 2012-13 also, the Tribunal accepted the Chartered Accountant's certificate and audited accounts showing that the actual transportation charges were lower than the figures assumed in the show cause notice, and held that the Revenue's higher computation had no supporting basis. [Paras 10, 13, 14]

The demand for Financial Year 2008-09 was set aside in full, and for Financial Years 2011-12 and 2012-13 the taxable base was directed to be taken only at the transportation charges established from the appellant's records.

Export exemption - Procedural delay - Substantive compliance - VCES payment - Delay in filing EXP-1 and EXP-2 forms did not justify denial of exemption for export-related transportation where the substantive conditions stood satisfied, and payments already made under VCES had to be given effect to. - HELD THAT: - The Tribunal held that there was no dispute regarding receipt of transportation services in relation to export of goods for the amounts covered by the forms. It found that the appellant had fulfilled the substantive requirements for exemption and that the denial rested only on delayed filing or unexplained refusal despite acknowledgement of the forms. Applying the principle that procedural requirements should not defeat substantive entitlement, as stated in Formica India Division v. Collector of Central Excise [1995 (3) TMI 98 - SUPREME COURT], the Tribunal allowed the exemption for the export-related transportation charges in Financial Years 2009-10 and 2010-11, and for the respective portions of Financial Years 2011-12 and 2012-13 where the forms had been filed and acknowledged. It also accepted the VCES payments already made for the balance taxable portions where such payment was evidenced, holding that those parts of the demand stood settled and had to be appropriated. [Paras 11, 12, 13, 14]

The export-related demands denied merely on procedural grounds were set aside, and the amounts already paid under VCES were directed to be adjusted against the corresponding liability.

Burden of proof - Exemption on evidence - Tax allegedly paid by service provider - Abatement - Claims for exclusion or exemption failed where the appellant did not produce supporting evidence, though statutory abatement remained available on the transportation service component so upheld. - HELD THAT: - The Tribunal rejected the appellant's contention, for part of Financial Year 2011-12 and part of Financial Year 2012-13, that no liability survived because service tax had already been paid by the transporters, since no evidence was produced to substantiate that assertion. It similarly declined exemption for transportation of goods allegedly procured for export but exported later, and for transportation claimed to relate to food grains, because the documents on record did not establish those claims and the invoices did not specify transportation of food grains. However, for the amounts so sustained, the Tribunal held that the appellant would be entitled to abatement of 75% from the taxable value while computing service tax liability. [Paras 13, 14]

The disputed portions unsupported by evidence were upheld, but the liability on those portions was directed to be recomputed after allowing 75% abatement.

Uncontested interest demand - HELD THAT: - The Tribunal recorded that the demand of interest for late payment of service tax for October, 2007 to March, 2008 and Financial Year 2008-09 had not been challenged by the appellant. In the absence of any contest, it declined to interfere with that part of the impugned order. [Paras 15]

The interest demand of Rs.53,082/- was upheld.

Penalty under Section 78 - Absence of suppression - Penalty under Section 77(2) - HELD THAT: - The Tribunal found that the entire demand had been raised on the basis of the records and documents furnished by the appellant itself. It further found no corroborative material showing mala fide intention to evade service tax, suppression of facts or wilful misstatement. On that reasoning, penalty under Section 78 was held to be unsustainable even in relation to the portions of demand upheld by the Tribunal. Having regard to the facts and the bona fides of the appellant, the penalty under Section 77(2) was also waived. [Paras 16]

The penalties under Sections 78 and 77(2) were set aside in toto.

Final Conclusion: The appeal was partly allowed. The Tribunal set aside the major part of the service tax demand by accepting the corrected computation, allowing export-related exemption despite procedural delay, and giving effect to VCES payments; it sustained only the limited portions not supported by evidence, subject to 75% abatement, upheld the uncontested interest demand, and deleted all penalties.

Limitation for refund of unutilised Cenvat credit on export of services - Relevant date for filing refund claim -Proof of receipt of export proceeds - Correlation of foreign exchange remittance with export invoices.

Whether date of one year has to be taken from the date of receipt of remittance or from the last date of the quarter for which refund is filed.-HELD THAT: - The Tribunal held that, after the amendment made with effect from 01.03.2016, the notification specifically prescribes for a service provider that the refund claim must be filed before expiry of one year from the date of receipt of payment in convertible foreign exchange, or from the date of invoice where payment was received in advance. In view of this specific prescription for service providers, the quarter-end basis adopted in earlier decisions could not override the amended provision. The authorities cited by the appellant were distinguished because they did not deal with refund claims of service providers for the period after 01.03.2016 under the amended scheme. [Paras 8, 9, 11]

The limitation issue was decided against the appellant, and the relevant date was held to be the date of receipt of remittance.

Whether refund can be granted based on FIRC also or otherwise and whether there is any need to corroborate the remittances with the actual export or otherwise.​​​​​​​ - Refund cannot be denied merely because the evidence of receipt of foreign exchange is in the form of FIRC instead of BRC, provided the remittances are duly corroborated with the invoices relating to export of services. - HELD THAT: - The Tribunal found that the real requirement is proof that foreign exchange was received against the export of services for which refund is claimed. For that purpose, the evidentiary document may be FIRC or BRC or both; the decisive requirement is that the document must clearly establish correlation between the remittance and the invoices covering the exported services. Since this factual correlation required verification on the basis of documents to be produced by the appellant, the matter was directed to be examined afresh by the Refund Sanctioning Authority. [Paras 10, 11, 12]

The evidentiary issue was decided in favour of permitting either FIRC or BRC, but the claim was remanded for verification of correlation between remittances and export invoices.

Final Conclusion: The Tribunal held that, for the period in dispute, limitation for refund of unutilised Cenvat credit on export of services had to be computed from the date of receipt of foreign exchange remittance. It further held that proof of such receipt could be by FIRC or BRC, subject to correlation with the relevant export invoices, and remanded the matter to the Refund Sanctioning Authority for fresh examination on that limited aspect.

Delayed payment charges collected in relation to stock broking services - Declared service under section 66E(e) of the Finance Act, 1994 Or fell within the negative list under section 66D(n) - Delayed payment charges collected in relation to DEMAT account services - Extended period and penalty under section 78.

Delayed payment charges recovered in relation to stock broking transactions - HELD THAT: - The Tribunal held that the demand, though proposed in the show cause notice on the footing of declared service under section 66E(e), was confirmed on a different basis by treating the amount as an integral component of stock broking and DEMAT services, which travelled beyond the notice. On merits also, where the broker used its own funds to make payment to the stock exchange on behalf of the client, the delayed payment charges represented compensation for the time value of money so deployed and were relatable to interest on an advance made for the client's purchase of shares. Such amount, therefore, fell within the negative list relating to interest on loans or advances and could not be treated as consideration for tolerating an act. [Paras 10, 11, 12, 15]

The demand of service tax on delayed payment charges pertaining to stock broking service was set aside.

Delayed payment charges collected for default in payment of DEMAT account maintenance and related charges. - HELD THAT: - The Tribunal distinguished delayed payment charges connected with DEMAT account services from those arising out of payments made by the broker for purchase of shares. It found no basis to treat such charges as interest or to bring them within the negative list, since they related to non-payment of consideration for DEMAT services themselves and not to any margin funding or advance. The charges were therefore held to be amounts collected for tolerating the customer's default in payment and were taxable as declared service. [Paras 13, 15]

The demand of service tax on delayed payment charges relating to DEMAT account services, with equal penalty, was upheld.

Invocation of the extended period and imposition of penalty - HELD THAT: - The Tribunal held that, after the change in law with effect from 01.07.2012, the appellant could not legitimately continue to rely on the earlier circular as covering the altered statutory position. Since service tax had earlier been paid and was later stopped on the appellant's own understanding, the case was not treated as one of mere bona fide belief or pure interpretational doubt. The extended period and penalty under section 78 were accordingly sustained, but only to the extent of the part of the demand ultimately upheld. [Paras 14, 15]

Extended limitation and penalty were upheld only in relation to the DEMAT account service demand that was sustained.

Final Conclusion: The appeal was partly allowed. Service tax on delayed payment charges connected with stock broking transactions was set aside as falling within the negative list and also because the adjudication had travelled beyond the show cause notice, while the demand on delayed payment charges relating to DEMAT account services was sustained as declared service, together with consequential extended period and penalty to that extent.

Payments made to Rosoboronexport, Moscow, under an inter-governmental agreement for transfer of technology and technical support - Scientific and technical consultancy service - Reverse charge liability - Technology transfer under inter-governmental agreement - Penalty waiver on reasonable cause.

Scientific and technical consultancy service - Reverse charge liability - Technology transfer under inter-governmental agreement - HELD THAT: - The Tribunal held that the definition of scientific or technical consultancy requires the advice, consultancy or technical assistance to be rendered by a scientist, technocrat, or a science or technology institution or organisation. Following the co-ordinate Bench decisions in the assessee's own cases in Hindustan Aeronautics Ltd. [2015 (5) TMI 668 - CESTAT MUMBAI], on similar agreements with Rosoboronexport, it found that Rosoboronexport was a governmental intermediary organisation and not a scientist, technocrat, or science or technology institution or organisation. The agreement, being under an inter-governmental arrangement for transfer of technology and related support for aircraft manufacture, did not establish receipt of taxable consultancy from any individual scientist or technocrat, and no contrary evidence had been brought on record. The earlier Mumbai Bench decision on the same issue had also attained finality after the Department's appeal was disposed of by the Supreme Court as not pressed. [Paras 8, 9, 10, 11, 12]

The demand of service tax under scientific and technical consultancy service and the penalty connected with that demand were set aside.

Penalty waiver on reasonable cause - Management maintenance and repair service - The Department's challenge to waiver of penalty in relation to management, maintenance and repair service did not survive. - HELD THAT: - The Tribunal recorded that the assessee had not contested the management, maintenance and repair service issue, and the demand on that count was therefore left undisturbed. As regards the Department's appeal confined to waiver of penalty, the challenge insofar as it related to the scientific and technical consultancy demand became infructuous once that demand itself was set aside on merits. For the remaining management, maintenance and repair service component, the Tribunal held that invocation of Section 80 for waiver of penalty had been rightly allowed. [Paras 7, 12, 13]

The Department's appeal was dismissed, while the confirmation of service tax on management, maintenance and repair service remained undisturbed.

Final Conclusion: The Tribunal held that the payments made to Rosoboronexport under the inter-governmental arrangement for transfer of technology and related assistance were not taxable as scientific or technical consultancy service under reverse charge, and the connected demand and penalty were set aside. The management, maintenance and repair service demand, not having been contested, remained undisturbed, and the Department's appeal against waiver of penalty was dismissed.

Liability to pay service tax - Sub-contractor for services provided to a main contractor - Limitation under section 73 - demand was barred by limitation - Cum-tax benefit.

Sub-contractor service tax liability - Double taxation - CENVAT credit mechanism - A sub-contractor providing taxable service to the main contractor is liable to pay service tax notwithstanding that the main contractor has discharged service tax on the contract. - HELD THAT: - The Tribunal held that the controversy stood concluded by the Larger Bench decision in Melange Developers Pvt. Ltd. [2019 (6) TMI 518 - CESTAT NEW DELHI-LB] which declared that, in the absence of a specific exemption, a sub-contractor remains an independent taxable service provider. The plea of double taxation was rejected on the ground that the statutory scheme itself addresses such concern through the CENVAT credit mechanism available to the main contractor. Since the appellant admittedly acted as a sub-contractor providing taxable service, liability to service tax could not be avoided merely because the principal contractor had paid tax on the gross contract value. [Paras 5]

The issue was decided against the appellant and in favour of the Revenue.

Normal period of limitation - Relevant date - The demand was not barred by limitation because the show cause notice was issued within the normal period prescribed under section 73(1). - HELD THAT: - The Tribunal found that for the disputed period the normal limitation under section 73(1) stood extended to thirty months. Applying the statutory concept of relevant date, it held that the notice issued on 30.08.2018 for the period from February,2016 to December,2016 fell within the normal period itself. Consequently, even though the notice invoked the extended period, the demand did not depend on that invocation and was not time-barred. [Paras 5]

The plea of limitation was rejected.

Cum-tax benefit - Recomputation of taxable value - The appellant was entitled to cum-tax benefit under section 67(2), requiring recomputation of taxable value and consequential liability. - HELD THAT: - The Tribunal accepted that where the gross amount charged is inclusive of service tax, the assessable value has to be worked back in terms of section 67(2). On that basis, it held that the appellant must be given cum-tax benefit and the demand recomputed accordingly. The matter was therefore remanded to the adjudicating authority for fresh computation of service tax, with consequential determination of interest and penalty, subject to production of documentary evidence showing that service tax had not been separately collected. [Paras 5]

Cum-tax benefit was allowed and the matter was remanded for recomputation on that basis.

Final Conclusion: The Tribunal held that the appellant, as a sub-contractor, was liable to pay service tax and that the demand was within the normal period of limitation. However, cum-tax benefit under section 67(2) was found admissible, and the matter was remanded for recomputation of service tax and consequential interest and penalty.

Taxability of liquidated damages - Declared service - Tolerating an act - Amounts recovered as liquidated damages from suppliers or service providers for delay in performance - consideration for tolerating an act under section 66E(e). -HELD THAT: - The Tribunal found that the demand was founded entirely on amounts recovered as liquidated damages under contractual clauses invoked when suppliers or service providers failed to deliver goods or perform services within the stipulated time. Following the consistent view taken in earlier decisions in the case of Bharat Dynamics Ltd Vs CCT, Hyderabad [2025 (6) TMI 1269 - CESTAT HYDERABAD], the Tribunal held that such liquidated damages or penalty amounts are not receipts for any service and cannot be treated as consideration for a declared service of tolerating an act. Since the ratio of those decisions squarely covered the present facts, the impugned orders confirming tax and equal penalty were held to be unsustainable. [Paras 7, 8]

The service tax demand and equal penalty on liquidated damages were set aside, and the appeals were allowed.

Final Conclusion: The Tribunal held that liquidated damages recovered for delay by suppliers or service providers do not constitute consideration for any declared service of tolerating an act. The impugned appellate orders confirming service tax and equal penalty for both periods were therefore set aside and the appeals allowed.

Double demand of duty - Transfer of manufacturing unit - M.S. Ingots manufactured in the transferred unit and captively consumed by the purchaser for manufacture of dutiable final products - Going Concern - Captive consumption - Central excise registration contravention. -HELD THAT: - The Tribunal accepted the factual finding that the factory of respondent No. 1 had in fact been transferred to respondent No. 2 and that the Revenue proceeded on an erroneous assumption in treating the claimed sale as false. The documentary material, including the deed of sale and the subsequent registration, established that respondent No. 2 had taken over the unit and manufactured the goods which were captively consumed in manufacture of its final products cleared on payment of duty. In these circumstances, levy of duty again on the ingots would amount to an unjustified double demand on duly accounted goods already entering the stream of dutiable final products. At the same time, commencement of production before amendment of registration could at best constitute a procedural contravention attracting penalty, and did not justify confirmation of the duty demand. [Paras 6, 9, 10]

The Revenue's challenge to setting aside the duty demands failed, and only the unchallenged penalties for procedural contravention remained undisturbed.

Final Conclusion: The Tribunal upheld the appellate order setting aside the duty demands against both respondents. It held that the transfer of the unit was genuine and that, since the ingots were captively consumed in manufacture of dutiable final products, a second duty demand was not legally justified; the appeals of the Revenue were therefore dismissed.

Demand of duty and equal penalty, based on Rule 8(3A) -Default in payment of the cash component of duty - Cenvat credit utilisation during default period - General penalty for delayed ER-1 returns - Personal penalty for misdeclaration in return - authorised signatory for misdeclaration of duty payment particulars.

Rule 8(3A) ultra vires - Cenvat credit utilisation during default period - Interest on delayed payment - HELD THAT: - The Tribunal held that the controversy was concluded by the Gujarat High Court decision in Indsur Global Ltd.[2014 (12) TMI 585 - GUJARAT HIGH COURT], which had declared Rule 8(3A) of the Central Excise Rules, 2002 ultra vires, and that view stood affirmed when the appeal filed by the Union of India was dismissed by the Supreme Court [2018 (7) TMI 2323 - SC ORDER]. Once the very provision forming the basis of the demand was invalid, the duty demand raised for utilisation of Cenvat credit during the default period, and the consequential equal penalty on the company, could not survive. The Tribunal, however, maintained the liability to interest on the delayed payment of duty, if otherwise payable. [Paras 5]

The demand of duty based on Rule 8(3A) and the equal penalty under Section 11AC were set aside, while interest liability on delayed payment was sustained.

General penalty for delayed ER-1 returns - Delayed filing of statutory returns - HELD THAT: - The Tribunal noted the finding in the impugned order that the ER-1 returns for March and April 2009 were filed beyond their respective due dates. Since Rule 27 provides for a general penalty for breach of the rules where no other specific penalty is provided, the delay in filing those returns attracted that provision. On that basis, the penalty imposed on the company under Rule 27 was upheld. [Paras 5]

The penalty imposed on the company under Rule 27 for delayed filing of the two ER-1 returns was upheld.

Personal penalty for misdeclaration in return - Authorised signatory - Suppression and mis-statement -HELD THAT: - The Tribunal accepted the adjudicating authority's finding that the authorised signatory had shown the unpaid amount as if it had been discharged through the challan mentioned in the ER-1 return for February-2009, despite being fully aware that the amount had not then been paid. The Tribunal also relied on his statement admitting that the incorrect disclosure was made to mislead the department and to continue utilisation of Cenvat credit during the period of default. In view of this conscious misdeclaration and admitted suppression, penalty under Rule 26 was held to be rightly imposed. [Paras 5]

The personal penalty imposed on the authorised signatory under Rule 26 was upheld.

Final Conclusion: The Tribunal set aside the duty demand founded on Rule 8(3A) and the consequential equal penalty on the company, since that provision had already been declared ultra vires. It nevertheless sustained interest on delayed payment, upheld the penalty for delayed filing of ER-1 returns, and also upheld the personal penalty on the authorised signatory for conscious misdeclaration in the return.

Ready Mix Concrete and concrete mix - Excisability of site-manufactured concrete - Exemption for concrete mix manufactured at construction site -HELD THAT: - The Tribunal held that the controversy stood covered by earlier Tribunal decisions, including the appellant's own case. Referring to the distinction noticed by the Supreme Court in L&T vs. CCE, Hyderabad [2015 (10) TMI 612 - SUPREME COURT] and the Board circulars, the Tribunal noted the features ordinarily associated with Ready Mix Concrete. It then relied on the earlier order in the appellant's own case, which had found absence of evidence that the batching plant at site was capable of producing RMC conforming to the relevant standard, and absence of sample-drawing or authorised inspection. On that basis, the Tribunal treated the goods as concrete mix produced and used at the construction site, for which exemption was available under the notifications referred to in the earlier order. Since the facts of the present appeals were found to be squarely covered by those decisions, the duty demand, interest and penalty could not be sustained. [Paras 10, 11, 12, 13]

The impugned orders were set aside and the appeals were allowed with consequential relief.

Final Conclusion: Following the earlier Tribunal decisions and the distinction between RMC and concrete mix noticed by the Supreme Court, the Tribunal held that the appellant's site-manufactured product was entitled to exemption as concrete mix used at the construction site. The duty demand and connected liabilities were therefore set aside.

Entitlement to release on bail -Bail pending trial - Prolonged incarceration - Filing of charge-sheet - Continued incarceration of the appellant pending trial was not required after more than one year of custody and filing of the charge-sheet and supplementary charge-sheet. - HELD THAT: - The Court took note that the appellant had remained incarcerated for more than one year and that both the charge-sheet and supplementary charge-sheet had already been filed. In those circumstances, the Court held that further custody pending trial was unnecessary and directed release on bail on appropriate terms to be fixed by the trial court, while clarifying that no opinion was being expressed on the merits. [Paras 5, 6, 7]

The appellant was directed to be released on bail on appropriate terms and conditions to be fixed by the trial court.

Final Conclusion: The appeal was allowed to the extent of granting bail. Having regard to the period of custody and completion of investigation through filing of the charge-sheet and supplementary charge-sheet, the Court held that continued detention pending trial was unwarranted, without expressing any view on the merits.