TMI Tax Updates e-Newsletter
May 29,2026

Disposal of the amount deposited by the petitioners after dismissal of the special leave petitions - HELD THAT:- On closure of the miscellaneous applications after dismissal of the Special Leave Petitions [2025 (12) TMI 816 - SC ORDER] the Court directed the Registry to transfer the amount earlier deposited by the petitioners, with accrued interest, to the specified office of the CGST and Central Excise authorities, and further directed that, upon such transfer, the concerned officer should verify the petitioners and disburse the amount to them within the time stipulated.

Recovery of IGST refund - Effect of omission of Rule 96(10) - absence of any saving clause - Wrongfully taken refund of, by availing the benefit of automatic refund of GST- Pending proceedings after omission of rule - Validity of continuing proceedings based on an alleged contravention of Rule 96(10) - HELD THAT: - The petitioner has despite raising the question of constitutional validity of Rule 96 did not insist for the same, since the GST council during the 54th meeting had recommended omission of Rule 96(10) of the said Rules prospectively along with other rules and accordingly the Notification dated 8th October, 2024 was issued omitting Rule 96(10), no proceedings could have been continued on the basis of contravention of such Rule. Even if, any proceeding had been continued before the omission of such rule, on the omission of the rule, all such proceedings came to an end and stood closed.

The Court held that the entire demand and adjudication rested exclusively on alleged contravention of Rule 96(10). Once that rule stood omitted by the notification dated 8th October, 2024, and no saving provision preserved pending actions, proceedings based on such omission could not continue. Relying on Rayala Corporation (P) Ltd. and M.R. Pratap [1969 (7) TMI 109 - SUPREME COURT] and Kolhapur Canesugar Works Ltd. v. Union of India [2000 (2) TMI 823 - SUPREME COURT], the Court held that Section 6 of the General Clauses Act applies to repeal of a Central Act or Regulation and not to omission of a rule; therefore, pending proceedings founded on the omitted rule were not preserved. The Court also noticed the similar view taken by other High Courts that all proceedings not past and closed stand lapsed after omission of Rule 96(10). [Paras 27, 28, 29, 30, 31]

The order in original and consequential demands, having been passed on the basis of omitted Rule 96(10), were held unsustainable and were quashed.

Final Conclusion: Since the impugned adjudication was founded entirely on Rule 96(10) of the CGST Rules, and that rule had already been omitted without any saving clause preserving pending matters, the order in original and consequential demands could not survive. The writ petition was accordingly allowed and the impugned order was quashed.

Criminal liability of advocates for acts done in professional capacity - Conspiracy allegation against counsel for filing statutory appeal - Quashing of criminal proceedings for abuse of process

Professional acts of an advocate - Conspiracy allegation - Abuse of criminal process - Criminal proceedings could not be sustained against an advocate merely for filing a statutory appeal and tendering the pre-deposit in the course of professional engagement for his client. - HELD THAT: - The Court held that the allegations against the petitioner arose entirely from acts done by him as counsel while representing his client in statutory appellate proceedings. Even if the tax officer considered the mode of pre-deposit adopted in the appeal to be legally unacceptable, the advocate's decision to file the appeal on that basis remained a professional act founded on his understanding of the law, and did not by itself connect him with his client's business or establish conspiracy. To treat an advocate as a conspirator with the client for such professional conduct would undermine the independence of the Bar, impair the right of legal assistance, and offend the constitutional values underlying Articles 14 and 21. [Paras 17, 18, 19]

The FIR, the police report and the cognizance order were quashed in so far as they related to the petitioner.

Final Conclusion: The writ petition was allowed and the criminal proceedings arising out of the impugned FIR, charge-sheet and cognizance order were quashed against the petitioner, the Court holding that an advocate cannot be prosecuted for conspiracy merely for acts done in discharge of professional duty while representing a client.

Unsigned assessment order - Validity of service of unsigned order under the GST regime - Validity of assessment order issued in FORM GST DRC-07 without either digital or physical signature of the AO - HELD THAT: - The Court held that the absence of the AO's signature on the impugned assessment order went to the validity of the order itself.

Following earlier Division Bench decisions of this Court [2025 (3) TMI 1388 - MADRAS HIGH COURT], it held that signature on an assessment order cannot be dispensed with and that an unsigned order cannot be sustained. The Court further held that, in view of Rule 26(3) of the CGST Rules, 2017, an order served without signature does not amount to valid service; consequently, the delay in approaching the Court could not be treated as a relevant bar. On that basis, the assessment order was set aside and the matter was remanded for fresh assessment after due notice, with exclusion of the intervening period for limitation. Since the penalty notice was founded on the set-aside assessment order, no further purpose would be served by its continuance. [Paras 8, 9, 11, 13]

The impugned assessment order was set aside as unsigned, the matter was remanded for fresh assessment, the intervening period was directed to be excluded for limitation, and the penalty notice based on that order was rendered ineffective.

Final Conclusion: The writ petition was allowed. The unsigned assessment order for the relevant period was set aside and the matter was remanded to the assessing authority for fresh orders after due notice, with the delay objection rejected on the ground that an unsigned order had not been validly served.

Order lacking a Document Identification Number - Delayed challenge to GST assessment order - Portal service of order

Document Identification Number - Validity of assessment order - Validity of assessment order under the GST regime lacking a Document Identification Number - HELD THAT: - The Court followed its earlier view that M/s. Cluster Enterprises [2024 (7) TMI 1512 - ANDHRA PRADESH HIGH COURT] and Sai Manikanta Electrical Contractors [2024 (6) TMI 1158 - ANDHRA PRADESH HIGH COURT] and had held that, the absence of a DIN number would be sufficient to invalidate the said order. As the impugned assessment order did not contain a DIN, the order was held vitiated and could not be sustained. [Paras 3, 12]

The impugned assessment order was set aside for absence of a DIN and the matter was remanded to the AO for fresh orders after giving due opportunity of hearing.

Delayed challenge to GST assessment order - Portal service of order - Conditional entertainment of writ petition - delayed writ challenge to a GST assessment order suffering from a patent irregularity could be entertained subject to deposit of part of the disputed tax, notwithstanding the controversy on service through the portal - HELD THAT: - The Court noticed the contention that the petitioner had approached belatedly and the rival stands on whether uploading on the portal amounted to sufficient service. Without finally resolving that controversy, the Court held that, in view of the practical difficulties faced by registered persons under the online GST mechanism, delayed writ petitions against assessment orders suffering from patent irregularities could be considered on terms. To balance such hardship with the State's interest in tax administration, the Court required deposit of 20% of the disputed tax as a condition for setting aside the order and remanding the matter. [Paras 9, 10, 11, 12, 13]

The writ petition was entertained despite delay, subject to deposit of 20% of the disputed tax, with exclusion of the period of pendency of the writ petition for limitation and liberty to raise all issues before the AO.

Final Conclusion: The High Court set aside the assessment order on the ground that it did not bear a DIN and remanded the matter for fresh assessment after hearing the petitioner. The relief was made conditional upon deposit of 20% of the disputed tax, with corresponding protection on limitation and liberty to raise all contentions before the Assessing Officer.

Maintainability of writ petition - Alternative statutory remedy - requisite pre-deposit - Challenged to search, seizure, suspension of registration, bank attachment and related proceedings -HELD THAT: - The Court held that, in view of the earlier order passed in the petitioners' own writ petition [2026 (1) TMI 1610 - GAUHATI HIGH COURT] the controversy had already shifted to the final orders passed under the statute. Once those final orders were made, the grievances arising out of the antecedent procedure were liable to be agitated before the appellate forum, where all grounds now sought to be raised would remain available. The Court also noted that no appeal could be treated as pending, as the appeal stated to have been filed was without the statutory pre-deposit. In that situation, there was no reason to entertain a fresh writ petition on the same subject matter. [Paras 6]

The writ petition was dismissed, leaving it open to the petitioners to pursue the statutory appellate remedy against the final orders.

Final Conclusion: The Court declined to entertain the writ petition on the ground that final adjudication orders had already been passed and the petitioners' remedy lay in appeal under the AGST Act. The petition was accordingly dismissed.

Validity of Single Judge's order quashing the show cause notice and order-in-original u/s 74 of the CGST Act - Respondent relegated to the statutory appellate remedy

HELD THAT:- This Court by order M/s. Chimney Hills Education Society, M/s. Veremax Technologie Services Limited And Others [2026 (5) TMI 125 - KARNATAKA HIGH COURT] and Connected Appeals, allowed the Writ Appeals and restored the show cause notice and Orders in Original. The decision rendered therein would aptly apply to the present appeal also.

Since the Order-in- Original is passed in pursuance to the show cause notice under Section 74 of the Act, we deem it appropriate to provide liberty to the respondent herein to file statutory appeal within the time to be prescribed by this Court. Having regard to the limited power vested in the appellate authority to condone the delay, coupled with the fact that the respondent had been diligently pursuing the remedy by way of writ petition, we deem it appropriate, while relegating the respondent to the statutory remedy of appeal, to grant six weeks' time to file such appeal.

Cancellation of GST registration - Failure to to furnish the returns as provided under Section 39 of the CGST Act - recourse to the alternate remedy - HELD THAT:- We deem it appropriate to dispose of the present petition with following order:-

a. The petitioner is permitted to file appeal within a period of two weeks from today and the issue of limitation shall not be cropped up.

b. The appeal be decided on its own merits expeditiously and in any case, within a period of 12 weeks from the date of its lodging.

We make it clear that the appeal must accompany part of the cost i.e. out of total cost to the tune of Rs.30,000/- which is imposed on the petitioner Rs.15,000/- shall be deposited with the respondent and remaining Rs.15,000/- shall be deposited with the Delhi High Court Bar Association.

Exemption for puja samagri - rose water supplied as "Pooja Panneer"Classification of rose water for ritual use - Meaning of exhaustive enumeration by the word namely

Tariff classification under GST HSN of ‘Pooja Panneer’ (Rose water) supplied exclusively for puja/ritual use, marketed as “Pooja Rose Water / Panneer”, in small retail packs - HELD THAT: - The Authority examined the exemption entry for puja samagri and the GST Council minutes referred to in the ruling. It held that the use of the word namely in the notification confines the exemption to the specific goods expressly listed there, making the enumeration exhaustive and not merely illustrative. Since rose water does not appear in that list, and even goods predominantly used for worship such as agarbatti and lobhan were kept outside the exempted list and taxed according to tariff classification, the applicant's product could not be brought within the exemption merely on the basis of ritual use, label description or market positioning. [Paras 6]

The product was held to be a taxable supply and not exempt as puja samagri.

Classification of rose water for ritual use - Aqueous solutions of essential oils - Exclusion from perfumes and toilet waters - The applicant's "Pooja Panneer" was classified under tariff item 3301 9079 OR rose water entry in heading 3303 OR as an aqueous distillate under 3301 9060 - HELD THAT: - The Authority applied the tariff explanation and Chapter 33 notes adopted for GST classification. It found that heading 3303 covers perfumes and toilet waters suitable for use as fragrance primarily to the human body, whereas the applicant's product was stated to contain RO water mixed with synthetic rose perfume and no alcohol or cosmetic actives; it therefore did not answer the description of rose water under heading 3303. The Authority further held that the product was not an aqueous distillate, because it was not obtained as the aqueous portion arising from steam distillation of essential oils, but was prepared by mixing perfume in water. On the material produced, including the lab report and purchase invoices showing procurement of synthetic perfumery compound, the product was more specifically classifiable as an aqueous solution of essential oils under tariff item 3301 9079. Under the rate notification, goods of heading 3301 including aqueous solutions of essential oils attract 18% GST. [Paras 6]

The appropriate classification was held to be tariff item 3301 9079, chargeable to GST at 18%.

Final Conclusion: The Authority rejected the claim that "Pooja Panneer" was exempt as puja samagri and held that the exemption entry is confined to the goods specifically enumerated therein. The product was classified as an aqueous solution of essential oils under tariff item 3301 9079 and held taxable at 18% GST.

Maintainability of advance ruling application by recipient of supply - Taxability of licence to collect human hair from temple premises - Exemption for human hair as goods vis-a-vis licensing service - Scope of questions entertainable in advance ruling

Maintainability of advance ruling application by recipient of supply - Applicant under the GST Act - HELD THAT: - The Authority examined the definition of advance ruling and the contention that the questions must relate to supplies undertaken or proposed to be undertaken by the applicant. It nevertheless admitted the application in light of the Calcutta High Court decision in M/s. Anmol Industries Limited vs The West Bengal Authority for Advance Ruling, Goods and Services Tax & Others [2023 (5) TMI 288 - CALCUTTA HIGH COURT] which was relied on in the order, holding that a registered person fell within the definition of applicant and that the application could be decided on merits. [Paras 8]

The application was admitted for decision on merits.

Taxability of licence to collect human hair from temple premises - Supply of service by licence - Commercial activity of religious institution - Taxability of amount collected by the temple for granting licence to collect human hair from temple premises - HELD THAT: - The Authority distinguished the devotees' religious act of tonsuring and offering hair from the subsequent arrangement under which the successful bidder is permitted to collect the offered hair from the temple premises. On the tender terms, the applicant was only entitled to collect the hair and to use allotted space subject to conditions, showing that the engagement was a separate licensed activity. The ruling held that not every activity of a temple is outside GST and that commercial activities undertaken by a religious institution can be taxable. Applying section 7, the grant of licence for consideration in the course or furtherance of business was treated as supply of service, the temple authority transferring a right for consideration, and the activity was held taxable as service. [Paras 8]

The licence fee or auction amount charged by the temple for collection of human hair was held to be a taxable supply of service falling within section 7.

Scope of questions entertainable in advance ruling - Jurisdiction of advance ruling authority - question whether the temple was business premises as within the scope of matters on which advance ruling or not? - HELD THAT: - The Authority compared the query with the categories exhaustively enumerated in section 97(2) and found that the question did not fall within any of the clauses relating to classification, notification applicability, time or value of supply, input tax credit, liability to pay tax, registration, or whether any act of the applicant amounted to supply. Since the statute confined the Authority's jurisdiction to those specified questions, no ruling could be rendered on that query. [Paras 8]

No ruling was given on the question whether the temple was business premises, it being beyond the Authority's jurisdiction.

Exemption for human hair as goods vis-a-vis licensing service - Exemption notification confined to supply of goods - HELD THAT: - The Authority held that the notification relied upon exempted only intrastate supplies of goods, namely human hair. The present transaction, however, was not a sale of human hair by the temple to the applicant but the grant of licence to collect human hair from the temple premises, which had already been held to be a supply of service. Since the exemption was confined to goods and did not cover the licensing activity, the licence amount was not exempt. [Paras 8]

The exemption applicable to human hair as goods was denied to the licence fee, and the licensing activity was held taxable.

Final Conclusion: The Authority admitted the application and held that the temple's grant of licence to collect human hair from temple premises was a taxable supply of service, not covered by the exemption applicable to human hair as goods. The separate query whether the temple was business premises was declined as being outside the permissible scope of advance ruling.

Reopening of assessment u/s 147 - Reasons to believe - change of opinion - Ingenuine business transaction through a colourable device, made the purchases - HELD THAT:- We are not inclined to interfere with the impugned order [2025 (12) TMI 300 - GUJARAT HIGH COURT] in exercise of our jurisdiction under Article 136 of the Constitution of India wherein held reopening of the assessment is nothing but a change of opinion by the AO and hence, the petitioner cannot be subjected to further scrutiny of reassessment.

Special Leave Petition is, accordingly, dismissed and the accompanying interlocutory application(s), if any, stands disposed of.

Income deemed to accrue or arise in India - Addition on account of sale of logistic services treating the same as FTS under the Act as well as India-USA DTAA - HELD THAT:- We are not inclined to interfere with the impugned order [2025 (11) TMI 2001 - DELHI HIGH COURT] in exercise of our jurisdiction under Article 136 of the Constitution of India.

The Special Leave Petition is, accordingly, dismissed and the accompanying interlocutory application(s), if any, stands disposed of.

Penalty u/s 271D and 271E - mandation of recording satisfaction to be recorded in the reassessment proceedings by the concerned AO - Delay filling SLP

High Court [2025 (2) TMI 238 - RAJASTHAN HIGH COURT] quashed the notices and penalty proceedings u/s 271E (and analogous petitions u/s 271D) for AY 2012-2013, holding that in absence of satisfaction recorded by the Assessing Officer in the reassessment order the penalty proceedings cannot be sustained, in line with Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT]

HELD THAT:- The special leave petition was dismissed on the ground of delay, the Court finding no satisfactory explanation to condone the delay.

Prosecution u/s 276B - willful failure to remit tax deducted at source - Service of notice as condition precedent - Inherent jurisdiction to quash criminal proceedings

HELD THAT: - The Court held that service of notice of demand is a condition precedent for fastening liability arising out of an order under the Act, and on the facts of the case such notice had been duly served on the applicants. The show cause notice calling upon them to explain the default and the subsequent order under Section 201(1A) were treated as sufficient foundation for setting the criminal law in motion.

Once due service was established, the applicants could not avoid prosecution by pleading ignorance, and their continued non-compliance despite notice furnished a prima facie basis to infer willful default under Section 276-B. The Court further held that the objection regarding non-service of notice was, in any event, a disputed factual matter triable in the complaint case and therefore not a ground for quashing in exercise of inherent jurisdiction. The fact that the offence was compoundable did not justify quashing where there was no settlement between the parties. [Paras 13, 14, 15, 17, 18]

The prayer for quashing was rejected and the prosecution was permitted to continue.

Final Conclusion: The Court dismissed the applications for quashing, holding that notice had been duly served and that the applicants' continued failure to comply disclosed a prima facie case of wilful default under Section 276-B. The objections raised were held to involve triable issues and not grounds for termination of the prosecution at this stage.

Validity of Reassessment - Change of opinion - Reopening of concluded matter - Lack of jurisdiction

HELD THAT: - The Court accepted that the controversy was squarely covered by the earlier decision in Ashok Kumar Manish Kumar Huf [2026 (5) TMI 616 - RAJASTHAN HIGH COURT] and recorded the respondents' fair submission that the same applied to the present case. Proceeding on that basis, it held that where the matter had already been examined and concluded on the existing material, reopening u/s 148 on the same facts amounted to a prohibited change of opinion and was without jurisdiction. [Paras 3]

The notice u/s 148, the sanction note, and consequential proceedings were set aside.

Final Conclusion: The writ petition was allowed on the footing that the impugned reopening was covered by the earlier decision holding such action to be a mere change of opinion on the same material. The reassessment notice, sanction note, and all consequential proceedings were accordingly set aside.

Scope of amendment by way of insertion of Section 147A into the Income Tax Act - Effect of subsequent Supreme Court remand order - Liberty to challenge retrospective reassessment amendment

HELD THAT: - The Court recorded that the Supreme Court [2026 (5) TMI 54 - SC ORDER (LB)], in an identical factual situation, had set aside High Court judgments which had quashed reassessment notices on the ground of lack of competence and had remitted the matters for fresh consideration, while leaving all questions on merits open.

In view of that binding development, and since both sides sought disposal on the same terms, the Court held it inappropriate to examine the merits of the controversy and instead set aside the Single Judge's order and remitted the matter for reconsideration, with all contentions kept open, including the observations referred to from the later Supreme Court order dealing with AY 2015-16 cases. [Paras 6]

The Single Judge's order was set aside and the matter was remitted for fresh consideration without any adjudication on the merits.

Challenge to section 147A - Retrospective amendment - assessee entitlement to liberty to amend the challenge so as to assail section 147A and connected or consequential provisions - HELD THAT: - The Court noted that the Supreme Court had expressly granted assessees liberty to challenge the newly inserted section 147A and related provisions before the jurisdictional High Courts. Following that course, the Court granted corresponding liberty to the assessee in the present matter and permitted the Revenue to file additional affidavit or submissions thereafter. [Paras 6, 7]

Liberty was granted to the assessee to challenge section 147A and any connected or consequential provision, with corresponding time granted to the Revenue to respond.

Final Conclusion: Following the subsequent Supreme Court orders in identical matters, the Court declined to examine the merits, set aside the order of the learned Single Judge, and remitted the case for fresh consideration. The assessee was granted liberty to challenge section 147A and related provisions, and all contentions were kept open.

Unexplained cash credit in share capital - Genuineness of share application money and share premium - Test of human probabilities- bogus Share premium addition u/s 68 - Source of source in investor's hands - HELD THAT: - The Court accepted the finding recorded by the appellate authority and affirmed by the Tribunal that the assessee was a genuine incorporated company and not a shell entity, and that the issuance of shares by it was genuine. It held that, once the assessee had merely received investment in its share capital from a third-party investor, any doubt as to the source of funds available with that investor could lead to action in the investor's hands or under some other provision of law, but not to an addition in the assessee's hands unless there was evidence that the money invested had in fact been passed on by the assessee itself. Since that was not the Revenue's case, the Tribunal's reasoning could not be faulted, and the plea founded on the test of human probabilities did not displace the concurrent finding of genuineness. [Paras 8, 9, 10, 11, 12]

The deletion of the addition was upheld and the Revenue's appeal was dismissed.

Final Conclusion: The Court held that no substantial error arose in the Tribunal's order affirming deletion of the section 68 addition. In the absence of perversity or material to show that the assessee had itself routed the invested funds, the appeal of the Revenue was dismissed.

Unexplained cash depositsu/s 68 - Business receipts as source of cash deposits - Partial sustenance of addition for want of supporting evidence

HELD THAT: - The Tribunal noted that the assessee had originally explained the cash deposits as arising from past savings, gifts and repayment of loans, but no corroborative material was furnished either before the AO or before the appellate authority. Before the Tribunal, the assessee advanced a different explanation that the deposits represented cash generated from gold ornament labour charges received during the year, but again failed to produce supporting details or evidence despite a specific query.

The decisions cited by the assessee like Anantpur Kalpana [2021 (12) TMI 599 - ITAT BANGALORE] and M/s Karnataka Ginger Trading Company [2026 (3) TMI 1705 - ITAT BANGALORE] were found to concern cases where cash deposits arose from business receipts duly recorded in the regular books of account; those decisions did not assist the assessee in the absence of proof of such receipts in the present case. Even so, on a fair consideration of the facts, the Tribunal considered it reasonable to presume that the assessee could have had a cash balance of Rs. 2,00,000 and directed corresponding relief to that extent. [Paras 9, 10]

The addition under section 68 was reduced by Rs. 2,00,000 and the balance addition of Rs. 2,60,000 was confirmed.

Final Conclusion: The Tribunal partly allowed the appeal by holding that the assessee had failed to substantiate the source of the cash deposits with supporting evidence, but granted partial relief on the footing that a reasonable cash balance of Rs. 2,00,000 could be presumed. The addition was accordingly sustained only to the remaining extent.

Deduction u/s. 43B being the GST payable outstanding as at the end of the year -Deduction of statutory dues paid before due date of return- adjustment made in processing the return

HELD THAT: - The Tribunal found that the tax audit report reflected the GST amount as outstanding as on the date of signing of the report, but the assessee's case was that the amount, except the small balance already offered, had been paid before the due date of filing the return. It held that under the applicable provision, payment made after the date of the tax audit report but before the due date of filing the return would still qualify for deduction. Accordingly, the adjustment could not be sustained solely on the basis of the Form 3CD disclosure, and the matter required verification of the actual date of payment on production of supporting evidence by the assessee. [Paras 7, 8]

AO was directed to verify the date of payment of GST and, if the amount was paid before the due date of filing the return, the corresponding addition was to be deleted.

Final Conclusion: The appeal was allowed subject to verification. The Tribunal held that deduction under section 43B could not be denied merely because the tax audit report showed the liability as outstanding, if the payment was actually made before the due date of filing the return.

Reassessment limitation - Surviving period for issuance of notice under section 148 - TOLA effect

HELD THAT: - The Tribunal found that the assessee's stated sequence of events and computation of the surviving period were not controverted by the Revenue with evidence. Following Ram Balram Buildhome Pvt. Ltd. v. ITO [2025 (2) TMI 55 - DELHI HIGH COURT] and Union of India v. Ashish Aggarwal [2022 (5) TMI 240 - SUPREME COURT] it held that the notice issued under section 148 after expiry of the surviving period was time-barred. Since the reassessment rested on an invalid notice, the assessment framed pursuant to it was void ab initio. [Paras 5]

The reassessment was quashed as barred by limitation, and the grounds on merits were left open as academic.

Final Conclusion: The Tribunal held that the notice issued under section 148 was time-barred and, therefore, the reassessment founded on it was void ab initio. The reassessment was quashed and the grounds on merits were left open.

Write-off of obsolete software licences - Deduction u/s 80G - Ad hoc disallowance of trade payables - Bank guarantee charges - Transfer pricing jurisdiction over international transactions - Provision for warranty

Write-off of obsolete software licences - Business deduction - Write-off of software licences that had become obsolete and were no longer required for business - HELD THAT: - The Tribunal held that where software licences purchased by the assessee had become obsolete or no longer relevant for business operations, there was no justification to continue carrying them in the balance sheet. The authorities below had proceeded only on the footing that acquisition of software was capital expenditure and, therefore, only depreciation could be claimed. The determinative consideration, however, was that the software licences had ceased to have business relevance and were rightly written off; the fact whether they had been put to use was not treated as decisive.

The assessee's challenge to the disallowance of the software write-off was allowed.

Deduction u/s 80G - Technical defects in donation receipts - Deduction u/s 80G denied on mere technical defects in the donation receipts - HELD THAT: - The Tribunal found no error in the appellate authority's view that the donations were made through account-payee cheque or RTGS and were duly acknowledged by proper receipts. Since the AO had not doubted either the fact of donation or the entitlement of the donee institutions, denial of deduction merely because certain particulars were absent from the receipts was unjustified. In the absence of any independent inquiry discrediting the claim, the deduction was rightly allowed.

The Revenue's objection to allowance of deduction under section 80G failed.

Ad hoc disallowance of trade payables - Genuineness of creditors - HELD THAT: - The Tribunal upheld the finding that the assessee had furnished complete details of sundry creditors, including addresses and ledger accounts of major creditors, along with evidence of payments. AO had not pointed out any specific defect or brought any adverse material on record, but had made a percentage disallowance on an arbitrary basis. Such disallowance, being unsupported by evidence and founded only on conjecture, was rightly deleted.

Deletion of the ad hoc addition in respect of trade payables was affirmed.

Bank guarantee charges - allowable revenue expenditure -HELD THAT: - The Tribunal accepted the appellate finding that the guarantee charges were paid to banks for furnishing guarantees to customers in India, principally Indian Railways, and that the claim was supported by material on record and had been consistently allowed in earlier years. Such charges did not result in acquisition of a capital asset and were incurred in the course of business. On that basis, the disallowance made by the Assessing Officer was found to warrant no interference with the appellate deletion.

The Revenue's challenge to deletion of the disallowance of guarantee charges was rejected.

Transfer pricing jurisdiction over international transactions - Royalty and technical service fees - HELD THAT: - The Tribunal upheld the appellate authority's conclusion that the assessee had furnished the relevant details and that similar payments had been examined in earlier years by the Transfer Pricing Officer and accepted at arm's length. It accepted the view that, insofar as payments to the associate enterprise constituted international transactions, the Assessing Officer could not himself determine or disallow them on transfer pricing considerations without recourse to the Transfer Pricing Officer. The appellate deletion, therefore, called for no interference.

Deletion of the disallowance of royalty and technical service fees was sustained.

Provision for warranty - Scientific basis of estimation - HELD THAT: - The Tribunal noted that the appellate authority had relied on the decision of the Delhi High Court in the assessee's own case and on Rotork Controls India (P) Ltd [2009 (5) TMI 16 - SUPREME COURT] to hold that a warranty provision created in terms of contractual commitments is deductible when based on a reliable method of estimation. As no adverse finding had been recorded by the AO against the basis consistently followed by the assessee, the allowance of the provision was rightly upheld.

The Revenue's ground against allowance of warranty provision was dismissed.

Final Conclusion: The Tribunal allowed the assessee's appeal on the software write-off and rejected the Revenue's appeal on all issues pressed before it. The appellate relief granted in respect of section 80G deduction, trade payables, guarantee charges, royalty and technical service fees, and warranty provision was accordingly sustained.

Unaccounted sales - Profit embedded in suppressed turnover - Double addition - Unexplained expenditure u/s 69C - Extrapolation

Unaccounted sales - Profit embedded in suppressed turnover - Extrapolation - Additions based on seized material showing unaccounted sales - addition was to be worked out on the actual sales figure found or by extrapolation - HELD THAT: - The Tribunal upheld the appellate finding that, where seized material reflected unaccounted sales, the whole sale proceeds could not be assessed as income and only the profit embedded therein could be brought to tax by applying the gross profit rate. In relation to the addition sustained on the basis of actual seized data, it also accepted the view that the addition had to rest on the actual sales figure found from the material and not on extrapolation. Finding no infirmity in that approach, the Tribunal rejected both the assessee's challenge to the sustained additions and the Revenue's challenge to the relief granted. [Paras 6, 8, 10, 12]

The additions on account of unaccounted sales were rightly restricted to the gross profit component, and the partial relief granted by the appellate authority was affirmed.

Double addition - Unexplained expenditure u/s 69C - Business expenditure - Separate addition of business expenditure under section 69C once gross profit addition had already been made on the unaccounted sales from which such expenditure was sourced - HELD THAT: - The Tribunal held that the expenditure in question was business expenditure and its source was the unaccounted sales. It accepted the principle that, once an addition is made by bringing to tax the profit element from such unaccounted sales, a further separate addition of the related business expenditure would amount to double addition, first as expenditure and again through estimated profits from sales. On that basis, it deleted the balance addition sustained by the appellate authority. [Paras 16]

The addition sustained under section 69C was deleted as impermissible double addition, and the Revenue's challenge on that aspect was rejected.

Scrap sales - Factual finding -HELD THAT: - The Tribunal treated the appellate authority's finding that all scrap sales stood recorded in the books as a factual finding based on verification of the record. Since the Revenue could not place any material to dislodge that finding, no interference with the deletion of the addition was warranted. [Paras 20]

The deletion of the addition on account of alleged unaccounted scrap sales was upheld.

Misconceived ground of appeal - Absence of addition in assessment order - HELD THAT: - The Tribunal noted that, although the assessment order contained an observation regarding unaccounted salary expenditure, the Assessing Officer had not actually made any addition on that account. In the absence of any addition in the assessment order itself, the Revenue's grievance against its deletion was held to be misconceived. [Paras 23]

The Revenue's grounds relating to alleged unaccounted salary expenditure were dismissed as misconceived.

Final Conclusion: The assessee's appeal was partly allowed only to the extent of deletion of the addition sustained under section 69C, while the Revenue's appeal was dismissed in full. The Tribunal otherwise affirmed the appellate authority's approach of taxing only the profit element in the unaccounted sales and upheld the factual deletion relating to scrap sales.

Unexplained cash credit - Share application money and share premium - addition u/s 68 - onus to prove - Non-compliance with summons under section 131

HELD THAT: - The Tribunal found that the assessee had placed on record the names, addresses, PANs, income-tax returns, audited balance sheets, confirmations and bank statements of the subscribers. These materials were sufficient to discharge the assessee's initial burden regarding identity, creditworthiness and genuineness.

AO made the addition only on the basis of non-compliance with summons issued u/s 131, without carrying out any further enquiry on the documents produced and without pointing out any defect or deficiency in them. In such circumstances, non-appearance pursuant to summons was held not to be a valid basis to treat the share capital and share premium as unexplained cash credit. [Paras 5]

The deletion of the addition was upheld and the Revenue's challenge failed.

Final Conclusion: The Tribunal upheld the order deleting the addition made under section 68 in respect of share capital and share premium for AY 2012-13. It held that, once the assessee had furnished the relevant documentary evidence and no defect therein was found, the addition could not rest merely on non-compliance with summons under section 131.

Maintainability of appeal against rectification order - Limitation for correction of TDS statements - Levy of fee u/s 234E for period prior to 01.06.2015

Maintainability of appeal against rectification order - dismissal of the appeals as time-barred - Limitation for correction of TDS statements - HELD THAT: - The Tribunal held that, prior to 01.04.2025, the provisions governing correction of TDS statements did not prescribe any specific time limit for filing such corrections. Since the assessee had filed the corrected TDS statements on 26.03.2025, the action was within the legal framework then in force. The subsequent amendment introduced by the Finance (No. 2) Act, 2024 could not be applied retrospectively to treat those correction statements as barred. The Tribunal further held that an appeal lay against the rectification order itself and was not confined only to the original intimation under section 200A; hence the first appellate authority was not justified in dismissing the appeals on limitation. [Paras 7]

The dismissal of the appeals as time-barred was held to be legally unsustainable and the orders of the first appellate authority were set aside on that aspect.

Levy of fee u/s 234E for period prior to 01.06.2015 - scope of provision under section 200A - HELD THAT: - Following the earlier Chennai Bench decision in Derby Clothing Pvt. Ltd. [2026 (3) TMI 1704 - ITAT CHENNAI] which in turn followed decision in True Blue Voice India Pvt. Ltd. [2023 (10) TMI 1141 - MADRAS HIGH COURT] Tribunal held that although section 234E created the levy, the machinery for computation of such fee while processing TDS statements under section 200A was introduced only with effect from 01.06.2015. In the absence of that enabling machinery for the earlier period, levy of late fee through intimations relating to pre-01.06.2015 periods was bad in law. [Paras 7, 8, 9]

The fee levied u/s 234E was directed to be deleted.

Final Conclusion: The Tribunal held that the first appellate authority was wrong in rejecting the appeals as barred by limitation, since the correction statements were filed within the then prevailing legal framework and an appeal was maintainable against the rectification orders. On merits also, the levy of fee under section 234E for periods prior to 01.06.2015 was held unsustainable and was directed to be deleted.

Non-genuine purchases - Estimation of profit element - corresponding sales and entry of purchases in the stock register were accepted - HELD THAT: - The Tribunal noted that the AO himself accepted that the assessee had shown corresponding sales against the purchases and that the purchases were reflected in the stock register.

AO's case was only that the assessee had not conclusively established the source of purchase and had regularised such purchases through accommodation bills from the stated supplier. On that premise, the proper course was to tax only the embedded profit element and not the entire purchase value. The Tribunal held that taking the profit margin at 100% of the transaction value was irrational and illegal, particularly in a trading business.

Following the approach adopted in Shri Dinesh J Lalwani [2019 (7) TMI 2084 - ITAT MUMBAI] in an identical dispute involving the same selling party, and considering the gross profit shown by the assessee, the addition was directed to be restricted to 2% of the alleged non-genuine purchases. [Paras 7, 8]

The addition was reduced to 2% of the alleged non-genuine purchases and the ground was partly allowed.

Final Conclusion: The Tribunal held that once corresponding sales and stock entries were accepted, the entire purchase value could not be added merely because the source of purchases was not conclusively proved. The impugned addition was restricted to 2% of the alleged non-genuine purchases and the appeal was partly allowed.

Classification of imported test kits - Procleix Ultrio Plus Assay Kits - Procleix Ultrio Elite Assay Kits - classifiable under Customs Tariff Item [CTI] 3822 00 90 of the Customs Tariff Act, 1975 or not - eligibility for benefit of N/N. 50/2017-Cus dated 30.06.2017 and N/N. 01/2017-Integrated Tax (Rate) dated 28.06.2017 - Delay filling SLP

HELD THAT:- There is an enormous delay of 187 days in filing the Civil Appeal(s). The application for condonation of delay in filing the Civil Appeal does not give sufficient cause.

Even otherwise, having heard learned counsel appearing for the appellant(s) and having considered the facts and circumstances of the case(s), we are of the opinion that the Customs, Excise & Service Tax Appellate Tribunal [2025 (10) TMI 820 - CESTAT NEW DELHI] has not committed any error in law or fact.

Civil Appeal is accordingly dismissed on the ground of delay as well as on merits.

Misdeclaration - Classification of imported goods - consignments of ‘draping tubes (window curtain parts/accessories) - classified as welded stainless steel pipes under Chapter 73 Or as draping tubes/window curtain parts and accessories under Chapter 83 - determination of characteristic of the impugned goods and its value - Tariff classification of parts of general use - Specific use-based classification prevailing over generic description

The Tribunal [2026 (3) TMI 1462 - CESTAT MUMBAI] set aside the impugned order in entirety. It held that the declared classification and transaction value were liable to be accepted, that the goods were not imported in breach of any BIS-based prohibition, and that the penalties could not survive.

HELD THAT:- We do not find any good ground to entertain this appeal. The civil appeal is, accordingly, dismissed.

Challenged the order of Acquittal recorded by the trial court in the customs prosecution - tampering of the chassis number, misdeclaration of the vehicle particulars, and evasion of customs duty - HC in [2020 (2) TMI 1761 - MADRAS HIGH COURT], held that acquittal of the first respondent was set aside, and the Magistrate was directed to hold a fresh joint trial of the complaint and the split-up case against the second respondent and dispose of both on merits. - HELD THAT:- Review petition dismissed on the ground that no error apparent on the face of the record was made out - We do not find any such error apparent on the face of record which may warrant a review of our order [2025 (4) TMI 1813 - SC ORDER]

EPCG export obligation default- diversion or misuse of the imported goods - Confiscation of capital goods after payment of duty and interest - Penalty for non-fulfilment of export obligation without diversion

Confiscation of capital goods and penalty for failure to fulfil export obligation under the EPCG scheme sustainability - HELD THAT: - The Tribunal held that, though the appellant had not fulfilled the export obligation within the stipulated period, the admitted position was that the entire differential duty and applicable interest stood paid. In such a situation, the importer exits the EPCG scheme and the goods cannot thereafter be treated as liable to confiscation under Section 111(o). The Tribunal further held that mere non-fulfilment of export obligation, without any allegation of diversion, misuse, wilful evasion or deliberate breach, does not by itself justify penal consequences. Applying the principle stated in Hindustan Steel Ltd Vs State Of Orissa [1969 (8) TMI 31 - SUPREME COURT] the Tribunal treated the default as not warranting confiscation, fine or penalty. [Paras 5, 6, 7, 8]

The confiscation of the goods, redemption fine and penalty were set aside, and since the duty demand had already been discharged with interest and this was not disputed by Revenue, no further action survived.

Final Conclusion: The Tribunal partly set aside the impugned order by deleting confiscation, fine and penalty. Since the differential duty and interest had already been paid and this was not disputed, no further action survived.

Classification of mono potassium phosphate fertiliser grade - Fertilisers vis-a-vis separate chemically defined compounds - Applicability of Board circular on Chapter 28 and Chapter 31 classification

Whether Mono potassium phosphate imported as fertiliser grade was classifiable under CTH 31056000 or under CTH 28352400? - HELD THAT: - The Tribunal found that the Revenue had based the proposed reclassification only on Board Circular No. 44/2001. Relying on Commissioner of Customs (Import), Nhava Sheva vs. Solufeed Plant Product & Services Pvt. Ltd. [2018 (4) TMI 1346 - CESTAT MUMBAI] which in turn considered Vardhaman Fertilisers and Seeds Private Limited [2016 (11) TMI 2 - CESTAT MUMBAI], it held that the circular dealt with a separate chemically defined product as a single product and was not applicable to mixtures or compounds answering the description of fertilisers under Chapter 31. Since Chapter 31 specifically covers fertilisers and the imported goods were mono potassium phosphate of fertiliser grade, and the Revenue could not distinguish the co-ordinate Bench decision either on facts or on law, the declared classification under Chapter 31 had to be accepted. [Paras 5, 6, 7]

The attempted reclassification under CTH 28352400 was rejected and the declared classification under CTH 31056000 was upheld.

Final Conclusion: The Tribunal held that mono potassium phosphate imported as fertiliser grade was rightly classifiable under CTH 31056000. The impugned order sustaining reclassification under CTH 28352400 was set aside and the appeal was allowed with consequential reliefs.

Classification of Bluetooth wireless headsets - Essential character and principal function - Binding nature of Board circulars - Transmission or reception apparatus in wireless networks - Imported JABRA brand Bluetooth wireless headphones, earphones, earbuds and neckbands were classifiable under CTH 85176290 OR under CTH 85183000

HELD THAT: - The Tribunal held that the imported devices, on the basis of their technical features and catalogues, were Bluetooth-enabled apparatus capable of receiving, converting and transmitting voice and data in a wireless network, and were therefore not mere headphones or earphones carrying only audio signals. Applying the principle that classification of composite goods must be determined by their essential character and principal function, the Tribunal found that Bluetooth technology and network communication functionality were the distinguishing features of the goods.

Reliance was placed on the Board Circular No. 36/2013-Cus., which clarifies that Bluetooth wireless headsets for mobile phones, being active parts of a wireless network and simultaneously transmitting and receiving voice and data, fall under sub-heading 8517.62, whereas headphones combined with a microphone under heading 8518 carry only audio signals and are not active parts of a network.

The Tribunal also followed the reasoning in M/s. Minda D-Ten Pvt. Ltd. v. Commissioner of Cus. (Import), New Delhi [2021 (8) TMI 120 - CESTAT NEW DELHI] holding that Bluetooth-enabled devices functioning as transceivers fall under CTH 85176290. It therefore found that the original authority had overlooked both the technical material and the binding clarification issued by the Board. [Paras 20, 21, 22, 24, 25]

The reclassification under CTH 85183000 was set aside, and the goods were held classifiable under CTH 85176290; consequently, the duty demand founded on the contrary classification could not survive.

Final Conclusion: The Tribunal allowed the appeal and held that the imported Bluetooth wireless headsets, earphones, earbuds and neckbands were classifiable under CTH 85176290. The impugned order confirming reclassification and consequential duty demand was set aside with consequential relief.

Condition of sale in customs valuation - Royalty and franchise fee related to imported goods - Advertisement and marketing expenditure on buyer's own account - Extended limitation in customs undervaluation proceedings

Franchise fee includibility - Royalty and licence fee as condition of sale - Post-import distribution rights - Franchise fee paid for Tommy Hilfiger and French Connection brand rights was not includible in the assessable value of the goods imported from Hong Kong - HELD THAT:- The Tribunal held that addition under Rule 10(1)(c) is permissible only where the royalty or licence fee is related to the imported goods and its payment is a condition of sale of those goods. On the terms of the arrangements, the appellant imported the goods from overseas suppliers on principal-to-principal basis and paid the franchise fee to the franchisors for the right to sell, distribute and promote the branded goods in India.

The fee was thus linked to post-import domestic distribution rights and not to procurement of the imported goods. Non-payment of the fee would affect the right to sell the goods under the brand in India, but not the import transaction itself. As the payment was not a condition of sale of the imported goods, it could not be added to the transaction value. [Paras 8, 9, 12, 13]

The demand based on inclusion of franchise fee in the assessable value was unsustainable.

Advertisement and promotional expenditure - Corporate marketing fee - Payments on buyer's own account - Advertisement, marketing and promotion expenses and corporate marketing fee inclusion in the assessable value of the imported goods - HELD THAT: - The Tribunal held that Rule 10(1)(e) applies only where payment is made as a condition of sale of the imported goods, either to the seller or to a third party to satisfy an obligation of the seller. The appellant incurred advertisement and promotional expenditure on its own account for promoting its own sales in India, and such expenditure was post-import in character. Those payments were neither made to the overseas suppliers nor to any third party at their direction, and were not shown to discharge any obligation of the sellers. The corporate marketing fee also lacked such nexus, since it was not paid to the suppliers or on their behalf. Tribunal further noted that the earlier SVB view on the appellant's brand-related marketing spend was to the same effect and, in the absence of challenge to that view, the Department could not adopt a contrary position. [Paras 15, 18, 19, 20, 21]

AMP expenditure and corporate marketing fee were held not addable to the transaction value.

Extended period of limitation - Knowledge of the department - Confiscation and consequential penalty - HELD THAT: - The Tribunal found that the imports and valuation aspects were already within the knowledge of the Revenue, as the goods had earlier been provisionally assessed on execution of bonds and deposit of duty, and those assessments were later finalized by accepting the declared value and refunding the deposit. In those circumstances, suppression could not be alleged and the extended period was not available. Once undervaluation itself failed, the goods were not liable to confiscation; consequently, redemption fine and penalty were also not imposable. [Paras 22, 23, 24]

The demand was also barred from invocation of the extended period, and the consequential confiscation, fine and penalty were set aside.

Final Conclusion: The Tribunal held that franchise fee, AMP expenditure and corporate marketing fee were not includible in the assessable value of the imported goods, since they were not payments made as a condition of sale of the imports. The extended period was also held inapplicable; accordingly, the impugned order was set aside and the appeal was allowed with consequential relief.

Customs tariff classification - Worked mica - Application of test reports to past consignments - Extended limitation in classification disputes - Confiscation for misdeclaration - Penalty for interpretational dispute

Customs tariff classification - Worked mica - CRCL test report - goods covered by the two live consignments classified under tariff item 68149090 OR under tariff item 25251090 - HELD THAT: - The Tribunal held that heading 2525 covers crude mica and mica merely rifted into sheets or splittings, whereas heading 6814 covers natural mica further worked than merely rifted and trimmed. In relation to the two live consignments, the CRCL reports showed the samples to be processed mica, and in one case mixed with polymer/additives. The adjudicating authority had also relied on physical examination and the nature of the goods as regular-shaped sheets with plain edges. On that material, the Tribunal found no infirmity in the conclusion that the goods had moved beyond the stage of crude mica or mere rifting and were classifiable as worked mica under heading 6814. [Paras 8]

The reclassification of the goods in the two live consignments under tariff item 68149090 and the differential duty thereon were upheld.

Application of test reports to past consignments - Separate assessment of each Bill of Entry - Extrapolation without evidence - HELD THAT: - The Tribunal held that no samples had been drawn from the past consignments and no test reports were available for them. Since classification depends on the physical characteristics of each consignment, test results from one consignment cannot be extrapolated to other consignments already cleared. The contention that the past imports were the same goods from the same supplier was rejected for want of evidence, particularly when even the two test reports relied on by the Department were not identical. The demand for past consignments was therefore found unsustainable as it rested on assumption rather than proof. [Paras 9]

The differential duty demand in respect of the past 72 consignments, including the two provisionally assessed consignments, was set aside.

Extended limitation in classification disputes - Suppression of facts - Willful misstatement - extended period under Section 28(4) invocable for the past imports - HELD THAT: - The Tribunal found that the dispute was a pure classification dispute. The appellant had declared the goods in the same manner as described in the supplier's documents and had disclosed the relevant particulars in the Bills of Entry, including value, quantity and specifications. A mere difference of opinion on the proper tariff heading could not be treated as misdeclaration. As the Department failed to establish collusion, willful misstatement or suppression of facts with intent to evade duty, the statutory conditions for invoking the extended period were held absent. [Paras 10]

The demand raised by invoking the extended period of limitation was held unsustainable and was set aside.

Confiscation for misdeclaration - Penalty for interpretational dispute - False documents - Confiscation under Section 111(m), redemption fine, and penalties under Sections 112, 114A and 114AA - HELD THAT: - The Tribunal held that confiscation under Section 111(m) requires material misdeclaration, which was absent because the description in the Bills of Entry matched the supplier's documents and the dispute was only as to classification. For penalty under Section 112, the Tribunal found no conscious or deliberate act rendering the goods liable to confiscation, the matter being one of interpretation of tariff entries. Penalty under Section 114A also failed because the ingredients necessary for invoking the extended period were not established. Penalty under Section 114AA was held inapplicable since the invoices and packing lists were genuine and no false or fabricated document had been used. [Paras 11, 12]

The confiscation, redemption fine, and all penalties imposed under Sections 112, 114A and 114AA were set aside.

Final Conclusion: The appeal was partly allowed. Classification of the goods in the two live consignments under tariff item 68149090 and the differential duty thereon were upheld, but the demand for past consignments based on those test reports, the invocation of extended limitation, the confiscation, redemption fine and all penalties were set aside.

Tariff classification of liquid crystal devices - LCD panels imported for use in automotive instrument clusters -Specific heading versus parts heading - Exclusion of Chapter 90 goods from Section XVII - Extended limitation for alleged misdeclaration

Tariff classification of liquid crystal devices - Specific heading versus parts heading - Exclusion of Chapter 90 goods from Section XVII - imported LCD panels were classifiable under CTH 9013 OR under CTH 8708/8714 as parts of motor vehicles - HELD THAT: - The Tribunal held that classification had to be determined on the basis of the goods as imported, namely LCD panels, and not by treating them as Automotive Instrument Clusters or as motor vehicle parts after their subsequent use in manufacture. Note 2(g) to Section XVII specifically excludes articles of Chapter 90 from the scope of that Section, and Note 3 cannot be applied so as to override that exclusion merely because the goods are suitable for sole or principal use with motor vehicles. CTH 9013 specifically names liquid crystal devices, whereas headings for parts and accessories of motor vehicles are generic; therefore, the specific heading prevailed.

The earlier decision concerning classification of AICs in Premier Instruments & Controls Ltd. [2000 (1) TMI 314 - CEGAT, NEW DELHI] was held inapplicable since the present dispute concerned LCDs at the point of import. Relying on Videocon Industries Ltd.[2023 (3) TMI 1338 - Supreme Court], Secure Meters Ltd. [2015 (5) TMI 241 - Supreme Court] and Samsung India Electronics Pvt Ltd. [2023 (10) TMI 737 - SC Order] the Tribunal held that a heading referring generally to parts cannot be treated as more specific than a heading which expressly covers LCDs by name. [Paras 16, 17, 18, 19, 20]

The classification adopted by the importer under CTH 9013 was upheld and the contrary classification under CTH 8708/8714 was held unsustainable.

Extended limitation for alleged misdeclaration - Suppression of facts - Self-assessment and disclosure in bill of entry - HELD THAT: - The Tribunal found no statutory requirement in Section 46 compelling declaration of end-use in the manner assumed by the Commissioner. The importer had described the goods in the Bills of Entry as LCD/Liquid Crystal Device/Liquid Crystal Display in line with the supplier invoices, had filed the supporting documents, and in most cases the goods were physically examined before clearance. The finding that the assessing officers were misled by the description was therefore rejected. The Tribunal also held that reliance on what other importers had declared could not create an obligation absent statutory prescription, and that relied-upon documents concerning the allegation of suppression had not been furnished despite request. Since the dispute was essentially interpretational and the declaration of the imported goods was correct, the allegation of suppression failed. [Paras 21, 22, 23]

The demand was held barred by limitation and the extended period under Section 28(4) was ruled out.

Final Conclusion: The Tribunal allowed the appeal, holding that the imported LCD panels were rightly classifiable under CTH 9013 and not as motor vehicle parts under CTH 8708/8714. It further held that there was no misdeclaration or suppression, and consequently the extended period of limitation was not available.

Non-speaking adjudication order - Failure to consider material contentions - Principles of natural justice - imports of sanitary napkins, sanitary towels and panty liners under the quality control regime and BIS requirements

HELD THAT: - The Tribunal held that the impugned order was not a speaking order. It found that, although the Commissioner referred to the Quality Control Orders and BIS requirements, the order had been passed mechanically without properly analysing the guidance documents and without following the requirement that clarifications be obtained from the concerned line ministry where necessary.

Tribunal further found that the appellant's specific plea that it was an MSME entitled to the benefit of the extended timeline had not been verified at all. Since these material contentions were left unexamined, the order suffered from impropriety and could not be sustained.

Tribunal therefore directed a de novo adjudication after considering all contentions, including the appellant's plea regarding the reckoning of the date of import with reference to the applicable FTP and supporting documents, while strictly observing natural justice. [Paras 13, 14, 15]

The impugned order was set aside and the matter was remanded to the Commissioner for fresh adjudication by a speaking order after considering all the appellant's contentions.

Final Conclusion: The Tribunal did not decide the merits of confiscation, redemption fine or penalty. It held that the impugned order was vitiated for non-consideration of material contentions and absence of proper reasoning, and therefore remanded the matter for de novo adjudication with all contentions kept open.

Penalty for use of forged duty credit scrips - Obligation of Customs Broker - Customs broker's duty of due diligence - Knowledge inferred from failure to verify authenticity of import documents -HELD THAT: - The Tribunal held that the appellant did not dispute that genuine DGFT scrips, already registered and exhausted at another port, had later been duplicated and re-registered in the EDI system at ICD Tughlakabad and that such re-registered scrips were used for duty debit in respect of the appellant's importer. It further found, on the appellant's own statement and that of the importer, that only registration particulars were supplied and no physical copies of the scrips were obtained. In terms of the customs broker's statutory obligations and the condition in Notification No. 95/2009 requiring the scrip to be produced before the proper officer at the time of clearance for debit of duty, the appellant was bound to insist on the physical copies or at least verify the particulars from the DGFT database. Had that minimum diligence been exercised, the forged and non-existent status of the scrips would have been detected before use. The repeated use of such scrips, coupled with complete failure to verify their authenticity, was treated not as a mere lapse but as conscious facilitation sufficient to attract section 114AA. The Tribunal distinguished the decision in M/s A.J Mill Store Agency Pvt Ltd [2025 (12) TMI 1842 - CESTAT NEW DELHI] on the ground that, unlike that case, the question of intent and knowledge had been specifically dealt with in the present matter. [Paras 12, 13, 14, 15, 16]

The appellant was rightly held liable under section 114AA, and the penalty was upheld.

Final Conclusion: The Tribunal upheld the order sustaining penalty against the appellant customs broker under section 114AA. The appeal was dismissed, the Tribunal holding that the appellant's failure to verify the authenticity of the scrips and its repeated use of forged re-registered scrips justified the penalty.

Contempt jurisdiction - Show-cause notice in contempt - Identification of contemnors - Natural justice in quasi-criminal proceedings

Contempt jurisdiction - Show-cause notice in contempt - Prima facie satisfaction - Natural justice in quasi-criminal proceedings - Adjudicating Authority had not first recorded prima facie satisfaction of contempt - HELD THAT: - The Tribunal held that contempt jurisdiction, particularly where imprisonment is ordered, is quasi-criminal in character and cannot be exercised without strict adherence to procedure. The Adjudicating Authority was required first to record its prima facie satisfaction that there was clear and willful disobedience of the earlier orders, and thereafter to issue a proper show-cause notice setting out the precise allegations so that the alleged contemnors could defend themselves. Mere routine notice calling for replies was held insufficient. As the Adjudicating Authority directly proceeded to impose punishment without this procedural foundation, the exercise of contempt power was vitiated. [Paras 38, 44, 45, 47]

The finding of contempt and the consequential punishment were set aside for non-compliance with the mandatory procedural requirements governing contempt proceedings.

Identification of contemnors - Personal liability for contempt - Civil imprisonment - HELD THAT: - The Tribunal held that punishment for contempt, especially civil imprisonment, has to be directed against identified individuals found to have deliberately disobeyed the court's orders. In the present case, neither the contempt applications nor the impugned order identified by name the specific officers responsible for the alleged breach. The Adjudicating Authority also did not examine the sanction letters bank-wise to determine how each appellant or its concerned officer had committed contempt. A composite contempt order against corporate entities, coupled with imprisonment without naming the contemnors and affording them an opportunity of defence in their personal capacity, was held to be legally impermissible. [Paras 46, 47]

The imprisonment direction against the appellant banks was held untenable, and liberty was reserved to the respondents to revive the contempt applications after identifying the specific officers concerned and making fresh pleadings.

Final Conclusion: The appeal was allowed and the contempt order, including the direction for civil imprisonment, was set aside. The respondents were given liberty to seek release of the NFB limits from each bank separately and, if still aggrieved, to revive the contempt proceedings after identifying the specific officers concerned, for consideration in accordance with law.

Pre-existing dispute - Notice of dispute u/s 8 - Record of dispute in information utility - Fresh second demand notice

Pre-existing dispute - Notice of dispute u/s 8 - Record of dispute in information utility - Admission of the operational creditor's Section 9 application where the corporate debtor had, before and in reply to the demand notice, raised a genuine dispute and the information utility record also reflected the debt as disputed - HELD THAT: - Following Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd. [2017 (9) TMI 1270 - SUPREME COURT] the Appellate Tribunal held that a Section 9 application must be rejected if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility, provided the dispute is not spurious, hypothetical or illusory. On the facts, the corporate debtor had communicated the existence of disputes even prior to issuance of the demand notice, thereafter sent a detailed reply within the statutory period disputing liability and asserting claims arising from breach of supply obligations and quality failures, and had also marked the information utility record as disputed. Adjudicating Authority, despite noticing the disputed status in the NeSL record, erred in treating the dispute as moonshine, since the dispute disclosed a plausible contention requiring further investigation and was supported by material particulars. [Paras 10, 11, 12, 13, 14]

The statutory bar u/s 9(5)(ii)(d) stood attracted, and the Section 9 application ought to have been rejected.

Fresh second demand notice - Pre-existing dispute - second demand notice is issued after the first demand notice, the existence of a suit filed before the second notice can be considered for determining pre-existing dispute - HELD THAT: - Relying on Innovators Cleantech Private Limited vs. Pasari Multi Projects Private Limited [2024 (8) TMI 211 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI] Appellate Tribunal accepted that the second demand notice had to be treated as a fresh demand notice. Consequently, the commercial suit instituted by the corporate debtor before issuance of that second notice was capable of constituting a pre-existing dispute. The later demand notice therefore did not assist the operational creditor in overcoming the earlier and continuing dispute between the parties. [Paras 9, 13, 14]

The commercial suit filed prior to the second demand notice reinforced the existence of a pre-existing dispute.

Final Conclusion: The Appellate Tribunal held that the operational debt claim was hit by a pre-existing dispute, both through the corporate debtor's notice of dispute and the disputed status recorded in the information utility. The admission order was therefore set aside and the Section 9 application was rejected.

Resolution professional's right to seek cooperation - Development rights and ownership in immovable property - Continuing mortgage charge over project assets - Continuation of project construction during CIRP

Resolution professional's application under Sections 19(2) - Custody and control of corporate debtor's assets - Maintainability of application by resolution professional - application filed by the Resolution Professional against Halwasiya for cooperation, disclosure of project records and access to the project - HELD THAT: - The Tribunal held that, once CIRP commenced, the Resolution Professional was statutorily obliged to preserve and protect the assets of the corporate debtor and to take custody and control of them. Halwasiya was operating only under agreements entered into with the corporate debtor in relation to the project and therefore fell within the expression any other person required to assist or cooperate u/s 19(2).

The Adjudicating Authority was, therefore, wrong in treating the matter as a mere contractual dispute outside the ambit of CIRP. At the same time, the prayer to stop construction was declined since continuation of construction was found to be in the interest of stakeholders, especially homebuyers. The Resolution Professional was, however, held entitled to full access, supervision, and to obtain all details, documents and information concerning the project for conduct of CIRP. [Paras 23, 48, 51, 52, 53]

I.A. was held maintainable and allowed to the extent of directing Halwasiya to provide project details, documents and information and to give access to the Resolution Professional, but not to stop construction.

Development rights - Ownership in immovable property - Unregistered development agreement - Unregistered power of attorney - claim ownership rights in Ananta Residencies or in the allotted and unsold units on the basis of the Development Agreement, Power of Attorney and Consortium Agreement - HELD THAT: - The Tribunal accepted that a development agreement may confer valuable development rights and that such rights can amount to property or an asset in an appropriate case. But the present CIRP was against the corporate debtor, which undisputedly remained owner of the land and project. The Development Management Agreement and the Power of Attorney were unregistered documents and could not create title or ownership in immovable property. The registered Consortium Agreement also did not create any title in favour of Halwasiya. Halwasiya itself did not claim ownership of the allotted units and confined its claim to development rights and unsold units. The Adjudicating Authority's view that the project became an asset of Halwasiya within section 3(27) was, therefore, unsustainable. The project continued to belong to the corporate debtor, though Halwasiya's contractual development rights subsisted. [Paras 46, 49, 50, 51, 53]

Halwasiya was held to have no ownership rights in the project or the units; Ananta Residencies continued to be owned by the corporate debtor.

Mortgage charge - Priority of secured creditor's charge - Absence of lender's NOC - mortgage created in favour of the lender over the project land, unsold units and receivables continued notwithstanding the subsequent development arrangements - HELD THAT: - The Tribunal found that the mortgage deed covered the entire land, construction, receivables and unsold units, and also restricted the corporate debtor from creating further rights or encumbrances during subsistence of the security. The Development Agreement itself acknowledged the mortgage and expressly contemplated obtaining a no-objection from the lender for release of charge over the unsold area. Since no such NOC was ever obtained, the development arrangements could not displace the pre-existing charge. The governing principle applied was that the later contractual development arrangement did not override the earlier registered mortgage, particularly when the agreement itself recognized the lender's charge and made lender consent a condition precedent. Halwasiya, therefore, could not claim exclusive rights to sell the unsold units free of that charge. [Paras 46, 54, 55, 63]

The lender's mortgage charge was held to continue over Ananta Residencies, and Halwasiya was held disentitled to assert exclusive rights over sale of unsold units.

Going concern during CIRP - Completion of real estate project - Protection of homebuyers - HELD THAT: - The Tribunal held that the Development Agreement and Consortium Agreement were subsisting when CIRP commenced and that continuation of construction was necessary to preserve value and protect stakeholders, particularly homebuyers. Since the project was substantially complete, stopping construction would be detrimental to all concerned. The Adjudicating Authority's direction restraining the Resolution Professional from creating hindrance in completion of construction was therefore upheld, but clarified so that it would not restrict the Resolution Professional from demanding records, details and information or from exercising oversight required for CIRP. [Paras 48, 52, 58, 59, 63]

Halwasiya was permitted to complete the project, while remaining bound to provide access, records and information to the Resolution Professional.

Final Conclusion: The appeals were partly allowed. The Tribunal set aside the rejection of the Resolution Professional's application, held that Ananta Residencies continued to belong to the corporate debtor and remained subject to the lender's mortgage charge, directed Halwasiya to furnish full project information and give access to the Resolution Professional, and affirmed Halwasiya's entitlement to complete construction subject to those directions; the dismissal of I.A.was upheld.

Commercial wisdom of the Committee of Creditors - Judicial review of approved resolution plan - Statutory dues as secured operational debt - Withdrawal under Section 12A after approval of resolution plan

Commercial wisdom of the Committee of Creditors - Judicial review of approved resolution plan - Information memorandum - Valuation - Adjudicating Authority rejected the resolution plan approved by the Committee of Creditors - HELD THAT: - The Tribunal held that the impugned order proceeded on subjective observations, assumptions and some factually incorrect premises, without pointing out any specific breach of Section 30(2). Matters such as negotiation with resolution applicants, analysis of NPV, valuation methodology, treatment of equity as part of distribution, adequacy of voting majority, admission or classification of claims, and acceptance of valuation reports fall within the commercial wisdom of the Committee of Creditors and are not open to judicial reappraisal.

Inclusion of disputed properties in the information memorandum was held to be proper because Section 29 requires disclosure of all relevant information, including disputes affecting the corporate debtor; the plan being on an "as is where is" and "no-recourse" basis, the successful resolution applicant would only step into the corporate debtor's existing rights.

Tribunal further held that full CIRP costs and full workmen and employee dues were in fact provided for under the plan, that non-filing of the information memorandum along with the approval application was not a ground to reject the plan once it was produced before the Adjudicating Authority, and that the earlier directions of this Tribunal forbidding a fresh return of the plan to the CoC were binding and had to be respected. [Paras 11]

The rejection of the plan on grounds relating to process, valuation, disputed assets, voting pattern, claim treatment and similar matters was unsustainable, and the plan could not be refused approval on such grounds.

Statutory dues as secured operational debt - Implementation of resolution plan - Binding precedent - whether Non-compliance with Rainbow Papers [2022 (9) TMI 317 - SUPREME COURT] in a plan approved before that judgment did not justify rejection of the plan where the statutory dues covered by that judgment were identified and the successful resolution applicant undertook to pay the requisite additional amount? - HELD THAT: - The Tribunal noted that the resolution plan had been approved by the CoC before the decision in State Tax Officer v. Rainbow Papers Limited . The Resolution Professional subsequently identified the admitted secured statutory dues covered by that judgment and worked out the proportionate amount payable, and the successful resolution applicant undertook to bear that amount over and above the plan value. Relying on its decision in The Cosmos Co. Op. Bank Ltd. v. Mr. Kailash T. Shah [2025 (11) TMI 961 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI] the Tribunal held that giving effect to a later binding declaration of law in a pending plan approval matter is not an impermissible modification of the commercial terms of the plan but an aspect of its implementation in accordance with law. Since the additional payment did not reduce the entitlement of the financial creditors under the approved plan, the objection based on Rainbow Papers did not survive; the grievance of the municipal authority also stood answered because its dues were included in the statutory dues identified for such payment. [Paras 11]

The plan was treated as compliant on this aspect subject to the additional payment undertaken by the successful resolution applicant towards the secured statutory dues identified in terms of Rainbow Papers.

Withdrawal under Section 12A after approval of resolution plan - Locus of promoters - HELD THAT: - The Tribunal held that the promoters' settlement proposals had already been considered and rejected by the Committee of Creditors, and that such rejection was itself part of the CoC's commercial wisdom. It further held that Section 12A permits withdrawal only on an application by the original applicant under Sections 7, 9 or 10 with the requisite voting approval of the CoC, and therefore the ex-promoters had no locus to maintain a withdrawal application. The Tribunal also relied on its earlier decisions holding that once a settlement proposal is rejected and the resolution plan has been approved by the CoC, revised or fresh offers from the suspended management cannot be permitted. [Paras 11]

The objections founded on repeated settlement proposals of the suspended management were rejected and could not stand in the way of approval of the resolution plan.

Final Conclusion: The appeal was allowed. The impugned order rejecting the resolution plan was set aside, and the resolution plan approved by the Committee of Creditors was approved, with the successful resolution applicant undertaking to pay the identified additional statutory dues covered by Rainbow Papers over and above the plan value.

Limitation for filing the appeal under Section 61 - Commencement of limitation - Date of pronouncement of the impugned order Or from the date of upload Or knowledge of the order - Sufficient cause - Outer limit for condonation of delay - Technical glitches and statutory bar.

Whether in the facts of the present case, the limitation for the purposes of filing the Appeal under Section 61 of the IBC deserves to be computed from the date of the impugned order i.e. 15.12.2025 or from the date on which the impugned order came to be uploaded on the portal and/or when knowledge thereof was allegedly acquired by the Applicant ? - HELD THAT: - The Tribunal held that, for purposes of Section 61(2), the starting point of limitation is the date on which the order is pronounced. Since the impugned order was pronounced on 15.12.2025 and that fact stood corroborated by the cause list, the running of limitation commenced from that date. The later upload of the order on the portal and the appellant's plea that knowledge was acquired subsequently were held to be immaterial, as the statutory scheme under the IBC does not postpone commencement of limitation to the date of availability or knowledge. [Paras 11, 12, 13]

The Tribunal rejected the plea that limitation should run from the date of upload or date of knowledge and held that the appeal period commenced on 15.12.2025.

Whether the technical glitches in the NCLAT e-portal which prevented the Applicant from filing their appeal on 29.01.2026 which happened to be the 45th day from the date of impugned order is sufficient ground to allow the condonation of delay ? - HELD THAT: - The Tribunal accepted, on the basis of reports from the Registry and NIC, that technical problems in OTP delivery and portal registration had obstructed e-filing on the 45th day and that the explanation was bona fide. However, it held that such circumstances could not enlarge the jurisdiction conferred by Section 61(2). The proviso permits condonation only within a further period not exceeding fifteen days after the initial thirty days; once that aggregate period expires, the Appellate Tribunal, being a creature of statute, has no power to entertain the appeal on equitable, technical, or hardship-based considerations. The Madras High Court in M/s. Shivpad Engineers Pvt. Ltd. Vs. The Deputy Commissioner (ST) & Anr. [2024 (9) TMI 1928 - MADRAS HIGH COURT] decision relied on by the appellant was distinguished as having been rendered in writ jurisdiction and on different facts. Since the appeal was e-filed on 30.01.2026, i.e. the 46th day from pronouncement, it was held to be beyond the non-extendable statutory limit. [Paras 15, 17, 18, 19, 20]

The Tribunal held that the one-day delay beyond the condonable period was statutorily incapable of condonation and rejected the application as well as the appeal.

Final Conclusion: The Tribunal held that limitation under Section 61(2) of the IBC began from the date of pronouncement of the impugned order and that the appeal, having been e-filed on the 46th day, was beyond the statutory outer limit of thirty days plus fifteen days. Though the technical glitch explanation was accepted as genuine, delay beyond that limit was held to be incapable of condonation, resulting in rejection of the condonation application and the appeal.

Seizure u/s 37A(1) of FEMA - Foreign Exchange held outside India - Retrospective operation of seizure power over assets held outside India - Seizure of equivalent asset in India for foreign immovable property held abroad - Setting aside seizure on disclosure and repatriation of equivalent foreign exchange

Retrospective operation of seizure power - Holding of immovable property outside India - Reason to believe u/s 37A - Section 37A(1) invoked in respect of an immovable property outside India acquired before the provision came into force, if the property continued to be held by a resident in India on the date of seizure - HELD THAT: - The Tribunal held that the material expression in Section 37A(1) is that the foreign immovable property is suspected to have been held in contravention of Section 4. Hence, the relevant consideration is not the date of acquisition of the foreign property but whether, on the date of seizure, it was being held by a person resident in India. Since the Dubai property stood in the names of the appellant and his family members on the date of seizure, and no permission of the Reserve Bank was shown for its acquisition and holding, the plea that Section 37A had been retrospectively applied merely because the property was purchased before insertion of that provision was rejected. The title deeds and the appellant's own statements furnished a prima facie basis for the authorised officer to entertain the requisite belief and to invoke Section 37A(1). [Paras 13, 14, 15]

The challenge to the seizure on the ground of retrospective application of Section 37A(1) failed, and the initial invocation of seizure power was held to be valid on a prima facie basis.

Disclosure and repatriation under proviso to Section 37A(4) - Equivalent foreign exchange brought back into India - Continuation of seizureof the equivalent asset in India -HELD THAT: - The Tribunal found that the foreign property had been transferred and no longer stood in the names of the appellant and his family members, a fact supported by the title deed and not disputed as to genuineness. It further found that inward remittance equivalent to the value taken for seizure had been received in India, and that the explanation offered for such remittance, though not accepted by the Directorate, could not be ruled out as implausible in the absence of any contrary material. The proviso to Section 37A(4) permits an appropriate order, including setting aside the seizure, where the aggrieved person discloses the foreign asset and brings it back into India. As the object of Section 37A is to secure the equivalent value in India of assets held abroad in contravention of Section 4, that object stood satisfied once the foreign property was no longer held abroad by the appellant and the equivalent foreign exchange had been repatriated. The seizure was therefore liable to be set aside, while leaving open the Directorate's right to continue proceedings for the alleged contravention during the period when the property was held abroad. [Paras 16, 17, 18]

The seizure of the property in India was set aside under the proviso to Section 37A(4), with liberty to the Directorate to pursue adjudication for the alleged FEMA contraventions for the earlier period.

Final Conclusion: The Tribunal held that Section 37A(1) was validly invoked because the foreign immovable property was being held by the appellant on the date of seizure, notwithstanding that it had been acquired earlier. However, as the foreign property had ceased to be held by the appellant and the equivalent foreign exchange had been brought back into India, the seizure of the equivalent asset in India was set aside, without affecting the Directorate's right to pursue adjudication for the alleged contravention.

Burden of proof under PMLA - Proceeds of crime - Equivalent value attachment - Attachment of property acquired prior to crime period

Burden of proof under PMLA - Proceeds of crime - Banking trail - amounts received from the tainted person - HELD THAT: - The Tribunal held that, though the appellant asserted that she was an investor, she produced no Memorandum of Understanding, agreement or comparable document to substantiate any investment arrangement, unlike the other investors. The material gathered in investigation showed that her account was reflected in the records of M/s Ritz Consultancy Services as "income" or "expenses" and not as investment, and statements of former employees supported that position.

Tribunal further held that u/s 24 the burden lay on the appellant, and mere reference to bank statements did not prove investment, particularly when the source of the alleged cash component remained unexplained. Since the appellant received substantial sums, returned only part of them, and failed to prove either the investment itself or the lawful source of the alleged funds invested, the balance amount in her hands was rightly treated as proceeds of crime, justifying attachment of properties purchased from such funds or of equivalent value. [Paras 14, 15, 18, 19, 20]

The appellant was not accepted as an innocent investor, and the attachment based on the amount retained by her was upheld.

Equivalent value attachment - Attachment of property acquired prior to crime period - Proceeds of crime - HELD THAT: - Relying on Dilbag Singh @ Dilbag Sandhu Vs. Union of India & Ors. [2024 (11) TMI 833 - PUNJAB AND HARYANA HIGH COURT] and the interpretation of the expression "proceeds of crime" in Vijay Madanlal Choudhary Vs. Union of India [2022 (7) TMI 1316 - SUPREME COURT (LB)] the Tribunal held that the definition is wide enough to include not only property directly derived or obtained from criminal activity but also property of equivalent value. It held that where the actual proceeds or property acquired therefrom are not available or traceable in the hands of a person, attachment of property of equivalent value is permissible. On that construction, the objection that certain attached properties had been acquired before the crime period was rejected. [Paras 16, 17]

The challenge to attachment of pre-crime properties failed, and attachment of equivalent value properties was held permissible.

Final Conclusion: Both appeals were dismissed. The Tribunal upheld the confirmation of the provisional attachment orders, while clarifying that the impugned orders would remain subject to the final outcome of the criminal trial.

Retention of seized movable properties under PMLA -Proceeds of crime - Burden of proof regarding lawful source - Money trail and layering of funds - retention and freezing of the appellants' bank accounts, mutual funds, DEMAT accounts and other movable properties justification - HELD THAT: - The Tribunal held that the investigation material, including the forensic audit and the traced fund movements, disclosed a prima facie money trail showing diversion of company funds through fictitious procurement transactions, routing of those funds to vendors, and their subsequent transfer to the appellants, their family members and associated entities. The explanation that the receipts represented consultancy charges, salary, rental income or other legitimate sources was not accepted, since no cogent supporting material was produced to substantiate any actual consultancy engagement, salary entitlement, rent arrangement or other lawful source.

The Tribunal further held that, in view of the statutory burden resting on the appellants, mere assertion of legitimate income without proof was insufficient. On that basis, the movable properties were treated as having been acquired out of proceeds of crime, and their seizure or freezing was found to be proper. [Paras 22, 23, 24, 25]

No interference was warranted with the order retaining the seized and frozen movable properties; the appeals were dismissed, subject to the final outcome of the trial.

Final Conclusion: The Tribunal upheld the order retaining and freezing the appellants' movable properties, holding that the money trail connected them with proceeds of crime and that the appellants had not proved any legitimate source for the assets. The appeals were dismissed, with the clarification that the seizure or freezing would remain subject to the final outcome of the trial.

Proceeds of crime - Property of equivalent value - Attachment of property acquired prior to commission of crime - Attachment of pre-existing property - Whether Property acquired prior to the commission of the scheduled offence can be provisionally attached under the PMLA when the actual proceeds of crime are not traceable and the attachment is of equivalent value?

HELD THAT: - The Tribunal held that the definition of proceeds of crime in Section 2(1)(u) is not confined to property directly derived from the scheduled offence, but extends also to property representing the value of any such property. Proceeding on that interpretation, it held that where the tainted funds have been dissipated, vanished or are otherwise not available in the hands of the accused, the authorities are entitled to attach other property of equivalent value, even if such property had been acquired prior to the commission of the crime.

The appellants having raised only this legal ground, and the Tribunal finding that the actual proceeds were not available, the challenge to attachment on the sole ground of prior acquisition of the properties was rejected. [Paras 26, 27, 28, 29]

The plea that pre-offence properties could not be attached was rejected, and the provisional attachment of properties as equivalent value of the proceeds of crime was upheld.

Final Conclusion: The Tribunal rejected the only ground urged by the appellants and held that, where the actual proceeds of crime are not traceable, properties of equivalent value may be attached even if acquired prior to the commission of the offence. The appeals were accordingly dismissed and the confirmation of the provisional attachment was sustained.

Proceeds of crime - money laundering - Attachment of equivalent value property

Receipt of proceeds of crime - Layering of funds - Equivalent value attachment - Receipt of funds from the main accused treated as proceeds of crime in the appellant's hands - HELD THAT: - The Tribunal held that the appellant admitted receipt of the amount from the main accused and also failed to show any loan document or any repayment. Mere entry in the bank statement did not establish a legitimate loan transaction. In the absence of proof of a genuine loan and with admitted non-repayment, the amount was treated as proceeds of crime received and laundered by the appellant; since the actual proceeds were not available, attachment of property of equivalent value was held permissible. [Paras 11, 12, 13]

The attachment was sustained on the finding that the appellant had received and retained proceeds of crime and that equivalent value property could therefore be proceeded against.

Property acquired prior to scheduled offence - Value of any such property - Definition of proceeds of crime - Property acquired prior to the commission of the scheduled offence attached under the Act - HELD THAT: - The Tribunal rejected the contention that only property purchased after the criminal activity could be attached. It accepted the interpretation that the definition of proceeds of crime includes not only property directly or indirectly derived from criminal activity, but also the value of such property, enabling attachment of other property of equivalent value where the tainted property is unavailable. On that reasoning, prior-acquired property is not immune if it is proceeded against as equivalent value property, since any narrower construction would render the statutory expression relating to value of such property redundant and defeat the object of the Act. [Paras 14, 15, 16, 17, 18]

The legal challenge to attachment of prior-acquired property failed, and the Tribunal upheld the attachment on the basis of equivalent value under the definition of proceeds of crime.

Final Conclusion: The Tribunal dismissed the appeal and upheld confirmation of the provisional attachment. It held that the amount received by the appellant was proceeds of crime and that, where such proceeds are unavailable, property of equivalent value, including property acquired prior to the scheduled offence, can be attached under the Act.

Proceeds of crime - Provisional attachment - Nexus between property and criminal activity - Crime period

Crime period - FIR not an encyclopedia - crime period could validly be taken as extending from 2010 to 2020 when FIR initially referred to the period 2015 to 2020. - HELD THAT: - The Tribunal held that the FIR is only the first information regarding commission of the scheduled offence and is not exhaustive of the entire period of criminal activity. On deeper investigation into the affairs of the appellant, material was found showing misappropriation from 2010 onwards. The respondents were therefore entitled to proceed on the basis of the wider crime period revealed in investigation, and the objection founded on the narrower period mentioned in the FIR was rejected. [Paras 17, 18]

The objection to treating 2010 to 2020 as the crime period was rejected.

Proceeds of crime - Provisional attachment - Nexus between property and criminal activity - HELD THAT: - The Tribunal relied on the statements of Ravi Kumar and Smt. Bharti Devi, in which it was admitted that substantial amounts were given by the mother to the son for purchase of land and construction of flats. No source for those funds was disclosed. The plea that the land had been purchased independently and prior to the crime period was not accepted, since the crime period itself extended from 2010 and no documentary proof of an independent source was produced. The Tribunal also noticed unexplained cash deposits in Ravi Kumar's account, the explanation of receipt of rent and student-related amounts having remained unsubstantiated. On this material, the Tribunal found the property to be directly connected with the proceeds of crime. [Paras 15, 16, 19, 20]

The provisional attachment and its confirmation were upheld.

Final Conclusion: The Tribunal found no illegality in the confirmation of the provisional attachment. Both appeals were dismissed on the ground that the properties were connected with the proceeds of crime and the challenge based on the crime period and source of acquisition failed.

Proceeds of crime - Layering through group companies - Equivalent value attachment - provisional attachment of the properties - Burden of proof under the Prevention of Money Laundering Act

Proceeds of crime - Layering through group companies - Burden of proof under the Prevention of Money Laundering Act - Attachment of the property held by M/s Gold Croft Property Pvt. Ltd. - HELD THAT: - The Tribunal held that the money trail showed transfer of funds from ABG Shipyard Ltd. to One Ocean Shipping Pvt. Ltd., then to ABG International Pvt. Ltd., and thereafter to the appellant on the same date. The appellant's plea that the transfer came from surplus funds and stood neutralised by the deed of assignment was rejected, as no material was produced to prove such independent source, while the burden to disprove taint lay on the appellant. The Tribunal further held that the restructuring arrangement and deed of assignment did not cleanse the transaction, since the forensic audit, statements recorded under Section 50 and the surrounding circumstances indicated circular routing and layering among group entities having no real business activity. On that basis, the attached property was treated as acquired from proceeds of crime, subject to the final outcome of trial. [Paras 38, 39]

No interference was warranted with the confirmation of attachment of the appellant's property.

Equivalent value attachment - Security deposit as layered funds - Proceeds of crime - Attachment of property of M/s Tirupati Landmark Pvt. Ltd. - HELD THAT: - The Tribunal accepted the respondent's case that funds had been diverted to the appellant in the name of security deposit even though the appellant had assets of substantially lesser value and failed to explain the purpose of receipt or its refund. Since the diverted amount was not found available, attachment of property of equivalent value was held permissible. The Tribunal treated the transaction as part of the laundering structure adopted by ABG Shipyard Ltd. through group companies lacking genuine business activity, and therefore found no reason to disturb the provisional attachment, subject to the final outcome of trial. [Paras 41, 42]

The equivalent value attachment of the appellant's property was upheld.

Money trail - Layering through group companies - Corporate debt restructuring not exculpatory - Attachment of properties of M/s Aries Management Services Pvt. Ltd. - HELD THAT: - The Tribunal held that the appellant's case that the funds came from cash surplus and not from bank credit was contradicted by the money trail showing transfer from ABG Shipyard Ltd.'s cash credit accounts through group entities to the appellant. The appellant had no disclosed business to justify receipt of such funds, while the amounts were used to acquire flats and transfer some of them to connected persons. The Tribunal further held that reliance on the restructuring agreement and CDR mechanism was misplaced because the investigation, forensic audit and subsequent events showed serious violation of the restructuring arrangement and revealed laundering through paper entities. In these circumstances, the transfers were treated as part of a layered routing of proceeds of crime and the attachment was sustained, subject to the final outcome of trial. [Paras 45, 46, 47, 48, 49]

The confirmation of attachment against the appellant was maintained.

Property acquired from layered funds - Value of attached property - Burden of proof under the Prevention of Money Laundering Act - Attachment of the flats standing in the name of Anupama Agarwal - HELD THAT: - The Tribunal accepted the money trail showing transfer of funds from ABG Shipyard Ltd. through ABG Energy Himachal Pradesh Ltd. and Onaway Industries Ltd. to the appellant. The plea that the flats were purchased from home loans and that the amount received from group entities was an unconnected security deposit was rejected because the record did not substantiate independent funding, and the appellant's own stand showed receipt and later return of the amount. The Tribunal also held that objection based on current value was untenable, observing that the relevant value was the value at the time of acquisition. As the appellant failed to establish that the amount came from the independent resources of the intermediary entity, and the surrounding facts showed circular transactions connected with the acquisition of the Siddhi Apartment building by Aries Management Services Pvt. Ltd., the attachment was sustained. [Paras 53, 54, 55, 56]

The appellant's challenge to the attachment failed.

Equivalent value attachment - Diversion of funds for personal benefit - Layering through paper companies - Attachment of the properties of Savita Dhanajay Datar and Dhanajay Datar - HELD THAT: - The Tribunal held that the appellants' attempt to explain the source of funds independently of the credit facilities ignored the money trail traced by the respondent. The findings recorded that funds moved through multiple paper companies having no real business activity and ultimately reached the appellants' personal accounts and the account of a company controlled by them, and were used for acquisition of a flat as well as for personal requirements. The Tribunal further accepted that, since the original diverted funds had already been expended, attachment of other immovable properties of equivalent value was permissible. On that basis, the attached assets were treated as proceeds of crime within the meaning of the Act. [Paras 63, 64, 65, 66, 67]

The attachment of equivalent value properties of these appellants was upheld.

Final Conclusion: The Tribunal found no merit in any of the appeals and upheld the confirmation of the provisional attachment order in respect of all the appellants. The attachments were sustained on the footing that the properties represented proceeds of crime or equivalent value thereof, subject to the final outcome of trial.

Eligibility of CENVAT credit on business-related input services - Real and sufficient nexus test - Personal use exclusion - Input service nexus - CENVAT credit on business-related services - Burden of proof in denial of CENVAT credit

HELD THAT: - The Tribunal held that under Rule 2(l) of the CENVAT Credit Rules, 2004, even after the amendment with effect from 01.04.2011, credit remained available where the service satisfied the means part of the definition by bearing a real and sufficient nexus with the assessee's output activity, though services primarily for personal use or consumption stood excluded.

A one-to-one correlation was not required. Applying that principle, the Tribunal found that the appellant had discharged the onus by explaining the business use of the disputed services and by reversing credit wherever the services did not meet the eligibility criteria. Since the department failed to establish, in accordance with law, that the impugned services lacked the requisite nexus or fell within the exclusion for personal use, the denial of credit could not be sustained. [Paras 6, 7, 8]

The disallowance of CENVAT credit on the impugned services was set aside and the appellant was held entitled to consequential relief.

Final Conclusion: The Tribunal set aside the impugned order disallowing CENVAT credit for the disputed period, holding that the appellant had established the business nexus of the services and that the department had failed to prove ineligibility or personal-use exclusion. Consequential relief was directed to follow in accordance with law.

Valuation of advertising agency service - Pure agent exclusion - Exclusion of value of goods sold during provision of service - value of printed flex material supplied through a related concern - Extended period of limitation - Penalty in interpretational dispute

Assessable value for the purposes of payment of Service Tax - inclusion of Wall rent in assessable value - Pure agent under valuation rules - Reimbursable expenditure - Rent paid to wall owners for using walls on which advertisements were painted - HELD THAT: - The Tribunal held that the wall rent was an intrinsic and inseparable component of the advertising service, since the service itself could not be rendered without securing the walls on which the advertisements were displayed. The appellant raised debit notes on clients for such rent and failed to establish any contractual arrangement showing that the clients had directly engaged the wall owners or had appointed the appellant merely as an intermediary. The documents described as "Agreement Form Cum Receipt" bore only the signatures of wall owners and did not evidence any binding arrangement between the clients and wall owners, nor did they relate the payments to a pure agent relationship.

On that basis, the amount satisfied Section 67 as part of the gross amount charged for the taxable service, and the exclusion claimed on the strength of reimbursement and pure agent principles was rejected.

Tribunal also distinguished Intercontinental Consultants [2018 (3) TMI 357 - SUPREME COURT] on the ground that the expenditure there was independent of the service rendered, whereas here the wall rent was organically connected with the service itself.

We find that tribunal in the case of Sercon India Pvt Ltd [2017 (11) TMI 547 - CESTAT NEW DELHI] held that the concept of “pure agent” under Rule 5(2) is a narrowly carved exception and strict compliance with all prescribed conditions is mandatory. In the present case, the appellant has failed to establish existence of any direct contractual arrangement between the clients and wall owners and authorization by clients appointing the appellant merely as an intermediary. The so-called “Agreement Form Cum Receipt” being signed only by wall owners do not suffice for agreement between the clients and wall owners. We find that the exclusion applicable for a “pure agent” is not available to the appellant. We take support from the decision in Broadcast Engineering Consultants India Ltd. [2017 (11) TMI 545 - CESTAT NEW DELHI] [Paras 13, 14, 15, 16]

Demands, in all the appeals, were upheld to the extent they related to wall rent used in providing the taxable advertising service.

Printed flex material - Goods sold during provision of service - Separate legal identity - HELD THAT: - The Tribunal found that mere commonality of management between the appellant and M/s Sonia Plastics did not justify clubbing or disregard of their separate identity. The record showed separate registrations, separate books of account and separate invoices, while the department failed to prove that M/s Sonia Plastics was a dummy concern. The printed flex material was treated as identifiable movable goods separately invoiced and subjected to VAT/sales tax. Applying Notification No. 12/2003-ST, the Tribunal held that once the transaction was one of sale of goods, with the value separately ascertainable and tax paid thereon, such value could not be treated as consideration for the advertising service merely because the goods were used in execution of that service. [Paras 17]

The demand based on inclusion of the value of printed flex material in the taxable value was set aside.

Extended limitation for suppression - Audit-based show cause notice - Penalty in bona fide interpretational dispute - HELD THAT: - The Tribunal held that suppression and willful misstatement require deliberate intent and cannot be inferred merely from non-declaration or a possible misunderstanding of law. Since the appellant was registered, was filing returns, and the notice dated 18.09.2008 was issued pursuant to audit, the department failed to establish the necessary mens rea for invoking the extended period. The Tribunal relied on the settled principle that where the department had access to the relevant material, or could have obtained it through scrutiny and audit, suppression cannot be alleged by default. On the same reasoning, and considering the interpretational nature of the dispute, the Tribunal accepted the plea for relief from penalty and held that penalties under Sections 76 and 77 were unwarranted in all the appeals. [Paras 18, 19, 20]

The entire demand covered by the show cause notice dated 18.09.2008 in Appeal was set aside as time-barred, and all penalties imposed in all the appeals were set aside.

Final Conclusion: The appeals were partly allowed. Wall rent used for displaying advertisements was held includible in the taxable value of advertising agency service, but the value of printed flex material supplied through the separate concern was held not includible; the demand under the show cause notice dated 18.09.2008 was set aside as time-barred, and all penalties in all the appeals were deleted.

Demand of Service Tax on Intellectual Property Services received from foreign entities - Taxability of imported technical know-how as intellectual property service - Consulting engineering service in composite engineering development arrangements

Intellectual property service - Reverse charge on imported services - Recognition of intellectual property under Indian law - Technical know-how, designs and related material received from a foreign entity under the technology transfer agreement taxability as intellectual property service on reverse charge where the alleged intellectual property was not shown to be recognised under Indian law - HELD THAT: - The Tribunal held that the question was covered by earlier Tribunal decisions like CHAMBAL FERTILIZERS AND CHEMICALS LTD. [2016 (8) TMI 150 - CESTAT NEW DELHI] and M/S. HINDUSTAN AERONAUTICS LIMITED [2024 (4) TMI 726 - CESTAT KOLKATA]which had construed the definition of intellectual property right to require a right recognised under a law in force in India. Revenue did not dispute the appellant's contention that the technical know-how received from the foreign entity was not registered as an intellectual property right under Indian law. In the absence of such recognition, the Department failed to establish exigibility under the taxable head of intellectual property service, and the reverse charge demand on that basis was unsustainable. [Paras 6]

The demand under the head of intellectual property service was held not sustainable and was liable to be dropped.

Consulting engineering service - Composite engineering development contract - Advice, consultancy or technical assistance simpliciter - Services received from the foreign engineering company under the engineering consultancy agreement taxability as consulting engineering service, the agreement being a composite performance-oriented arrangement for collaborative development and prototype-related work rather than a mere advisory or consultative engagement - HELD THAT: - The Tribunal examined the substance of the agreement and held that classification could not rest on the nomenclature used in the accounts. Windrad was required to depute engineers to work jointly with the appellant's own team for concept development, design, detailing, prototype-related work and production start-up support, with materials and data generated under the arrangement vesting in the appellant. Construing the statutory definition as exhaustive because it uses the word means, the Tribunal held that consulting engineering service is confined to advice, consultancy or technical assistance of an advisory character and does not extend to active participation in execution under a composite development agreement.

The expressions "in relation to" and "in any manner" could not be read so broadly as to absorb execution-oriented obligations into the taxable entry. On that basis, and following the approach adopted in Jyoti Ltd. [2022 (8) TMI 994 - SUPREME COURT], the contract could not be vivisected and taxed as a standalone consulting engineering service. The decision in M.N. Dastur & Co. Ltd. [2001 (10) TMI 2 - CALCUTTA HIGH COURT] was distinguished as dealing with the status of the service provider and not with the present issue of classification of a composite arrangement. [Paras 7, 8]

The demand under consulting engineering service was set aside as Revenue failed to prove that the services received were advice, consultancy or technical assistance simpliciter falling within the taxable entry.

Final Conclusion: The Tribunal held that the reverse charge demands under both intellectual property service and consulting engineering service were unsustainable. The impugned order was set aside and, in consequence, the questions of limitation, revenue neutrality, interest and penalty were held not to survive.

Cum-tax benefit - Exemption for renting precincts of religious place - penalty for suppression and intent to evade - limitation in service tax demand

Exemption for renting precincts of religious place - appellant's claim to exemption under Notification No. 25/2012-ST on the footing that the shops were within the precincts of a religious place - HELD THAT: - The Member (Technical) held that the plea as to non-exigibility of the service and exemption as a religious institution had not been raised before the authorities below and, consistently with the hierarchy of adjudication, should be examined by the Original Authority. He therefore directed fresh consideration of the exemption claim, along with due regard to the Board circular referred to in the order. The Member (Judicial) expressed reservation that the earlier discussion on the scope of the appeal was not strictly necessary, but concurred with the final outcome and directions. [Paras 15, 20]

The exemption claim was remanded to the Original Authority for adjudication in accordance with law.

Cum-tax valuation - inclusive gross amount - gross consideration received for renting liable to be treated as inclusive of service tax in the absence of proof that tax had been separately collected - HELD THAT: - The Tribunal held that, where the Revenue does not establish that service tax was separately recovered from the recipient, and there is nothing on record to show that the consideration was not cum-tax, the amount received for the service must be treated as inclusive of service tax. Applying Section 67(2), the taxable value had therefore to be recomputed by extending cum-tax benefit. [Paras 12]

Cum-tax benefit was held admissible and directed to be given while recomputing the tax liability.

Penalty for suppression and intent to evade - extended period of limitation - Penalty under Section 78 and the demand beyond the normal period - HELD THAT: - The Member (Technical) held that Section 78 is attracted only where non-payment is attributable to fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade tax, and that mere non-payment or subsequent detection is insufficient. As the record did not disclose such allegations in the requisite sense, the penalty under Section 78 was unsustainable. Since the same ingredients are necessary to sustain the extended period, the demand could survive only for the normal period. The Member (Judicial) expressly agreed with the reasoning and findings on these aspects and concurred in the result. [Paras 14, 20]

The penalty under Section 78 was set aside and the demand from both show cause notices was confined to the normal period of limitation.

Final Conclusion: By majority in result, the appeal was disposed of by remanding the matter to the Original Authority to examine the exemption claim afresh. The Tribunal held that cum-tax benefit must be extended and that, in the absence of material showing suppression or intent to evade, penalty under Section 78 could not survive and the demand from both show cause notices could be sustained only for the normal period.

Extended period of limitation - Suppression of facts - Interest on reversed CENVAT credit

Extended period of limitation - Suppression of facts - Disclosure in ST-3 returns - Audit knowledge of material facts - demands for denial of CENVAT credit and service tax on late fees made by invoking the extended period where the records had remained under audit for years and the relevant particulars were disclosed in ST-3 returns - HELD THAT: - The Tribunal found that the department had been auditing the appellant's books for a prolonged period and had access to the details regarding availment of CENVAT credit and payment of service tax. It also recorded that the appellant had disclosed such particulars in its ST-3 returns. In these circumstances, and in the absence of any material showing intention to avail irregular credit or evade tax, the element of suppression with intent was not established. The extended period was therefore held to be not invokable, rendering the impugned demands unsustainable. [Paras 6, 8]

The demands confirmed by invoking the extended period were set aside as time-barred.

Interest on reversed CENVAT credit - Penalty in absence of suppression - Interest and penalty levied merely because the appellant had reversed the credit, when no liability to reverse and no suppression with intent had been established. - HELD THAT: - The Tribunal held that mere reversal of credit by the appellant did not by itself lead to the conclusion that interest was payable. It expressly found that the appellant was not liable to reverse the credit, and therefore no interest could be demanded on that basis. For the same reason, and since suppression with intention to avail irregular credit was not established, penalty was also held to be not imposable. [Paras 7, 8]

The demand of interest and the penalty imposed were set aside.

Final Conclusion: The Tribunal allowed the appeal and set aside the impugned order. It held that the extended period of limitation was not available to the department, and consequently the demands, interest and penalty were not sustainable.

Condonation of delay in appeal - Sufficient cause for delayed appeal - Natural justice in dismissal of time-barred appeal

HELD THAT: - The Tribunal held that under the statutory scheme, an appeal before the Commissioner (Appeals) must be filed within two months from receipt of the order, with a further condonable period of one month available only on sufficient cause being shown. Since the appeal was filed within the condonable period but without any application seeking condonation, the burden was on the appellant to seek such relief and disclose the cause of delay; the Commissioner (Appeals) was under no obligation to call upon the appellant to file such an application.

On the material later produced, the plea of ill health was rejected as the medical certificate was found vague and not credibly supporting the delay. The Tribunal, while noticing N. Balakrishnan Vs. M. Krishnamurthy [1998 (9) TMI 602 - SUPREME COURT] held that acceptability of the explanation is decisive, and relying on Singh Enterprises Vs. Commissioner of Central Excise, Jamshedpur, [2007 (12) TMI 11 - SUPREME COURT] reiterated that condonation operates only within the statutorily permitted period and on sufficient cause being shown. In these circumstances, rejection of the appeal on limitation did not involve any violation of natural justice. [Paras 6, 7, 8, 9]

The order rejecting the appeal as barred by limitation was upheld and the challenge based on absence of opportunity to explain the delay was rejected.

Final Conclusion: The Tribunal upheld the impugned order and dismissed the appeal. It held that, in the absence of a condonation application and any acceptable sufficient cause for the delay, the Commissioner (Appeals) had rightly treated the appeal as time-barred.

Taxable value on receipt basis - suppression of taxable value - Goods Transport Agency under reverse charge - Abatement and CENVAT credit - Classification by substance over nomenclature - Extended period in successive show cause notices - Section 78 penalty

Taxable value on receipt basis - Goods Transport Agency under reverse charge - Abatement and CENVAT credit - Natural justice - Service tax demands founded on mismatch between ST-3 returns and book figures, on accrual-based treatment of sundry debtors, and on GTA services - HELD THAT: - The Tribunal held that for the relevant period prior to application of the Point of Taxation regime, service tax liability arose on actual receipt of consideration and not merely because turnover or sundry debtors stood reflected in the books on accrual basis. It further held that the appellant had mainly provided transportation services to specified category recipients after issuing consignment notes and, therefore, liability on GTA service rested on the service recipient under the reverse charge mechanism. The adjudicating authority had also failed to extend the available abatement and had not examined the reconciliation statements, ledger extracts, bank records and Chartered Accountant's certificate produced by the appellant. On that reasoning, the demands based on book turnover, sundry debtors and GTA liability were held inflated and unsustainable. [Paras 18, 21, 28]

The demands on this count in both notices were set aside.

Classification by substance over nomenclature - Export cargo handling - Pure reimbursement - demand raised by treating export cargo handling activities as Clearing and Forwarding Agent service - HELD THAT: - The Tribunal found that the appellant's activities consisted of handling export consignments, including packing, loading, unloading, transportation, booking at ports and completion of export formalities. Such activities were held to be connected with export cargo handling and not classifiable as Clearing and Forwarding Agent service merely because the agreement carried that description. The amount adopted for levy was also found to be reimbursement of actual expenses incurred on behalf of the client as a pure agent, without profit element. Since classification had to turn on the real nature of the activity and not the title of the agreement, and reimbursements could not be included in taxable value, the demand failed. [Paras 20]

The demand under this head was set aside.

Consideration for taxable service - Reverse charge on advances - Penal charges - Amounts received as unsecured loan or as advances relatable to GTA service, and detention charges collected as penal charges - HELD THAT: - The Tribunal held that the amount received from the named concern was an unsecured loan transaction and not consideration for any taxable service, there being no material showing provision of taxable service against that amount. It further held that the advances pertaining to GTA service fell within reverse charge and, therefore, no service tax liability could be fastened on the appellant. As regards detention charges, the Tribunal treated them as penal charges and not consideration for any taxable service. [Paras 21, 22]

The demands on advances and detention charges were set aside.

Substantive CENVAT credit - Centralized registration - Procedural defects in invoices - CENVAT credit denied merely because invoices stood in the names of the appellant's divisions, or because photocopies were relied upon, or because invoices were said not to have been produced, when receipt and use of input services stood established- HELD THAT: - The Tribunal found that the disputed invoices were issued in the names of the appellant's operating divisions, later covered by centralized registration, and that the services covered by those invoices were received for the appellant's business and accounted for in its books. It held that substantive CENVAT benefit could not be denied on mere procedural or clerical discrepancies in invoice names when receipt of services, payment of tax by the provider and use for output services were not disputed. On the same principle, denial of credit solely because photocopies were initially relied upon or because invoices were alleged to be unproduced was held unsustainable, especially when the originals were stated to be available and certified by the Chartered Accountant. [Paras 23, 24, 25]

All the CENVAT credit disallowances under these heads were set aside.

Extended period in successive show cause notices - Departmental knowledge of facts - Maintainability of second show cause notice invoking the extended period on the same facts already known to the department - HELD THAT: - The Tribunal found that the issues forming the basis of the second notice had already been raised in the earlier notice and that the department was fully aware of the relevant facts from prior proceedings, records, returns and disclosures. In the absence of fresh tangible material showing fraud, collusion, wilful misstatement or suppression with intent to evade tax, a subsequent notice on the same allegations could not again invoke the extended period. Applying the principle in Nizam sugar Factory [2006 (4) TMI 127 - SUPREME COURT] the Tribunal held the entire demand under the second notice to be barred on limitation. [Paras 27]

The demands confirmed under the second show cause notice were set aside on limitation as well.

Section 78 penalty - Willful suppression or evasion -HELD THAT: - The Tribunal held that penalty under Section 78 is attracted only where wilful violation or intention to evade tax is established. Since the impugned order did not bring any material on record to show wilful evasion by the appellant, the allegations of suppression and wilful violation were held not proved. [Paras 29]

The penalty imposed under Section 78 was set aside.

Final Conclusion: The Tribunal set aside the entire impugned order. All service tax, interest and penalty demands were held unsustainable, and the appeal was allowed with consequential relief according to law.

Inclusion of value of bought out items in assessable value - excisability and movability versus emergence as immovable property - jurisdiction to adjudicate excise on goods manufactured/assembled at buyer's site - treatment of erection and commissioning charges in assessable value - application of extended period, interest and penalty for suppression/undervaluation - CENVAT credit entitlement where duty is demanded on bought out items

Tribunal [2022 (12) TMI 1047 - CESTAT MUMBAI] held that Pune I Commissionerate lacked competence to determine excisability/valuation of goods said to arise only on assembly at customers' sites; that where the assembled installation at site is effectively immovable the department cannot sustain demands by adding direct to site bought out items to the manufacturers' assessable value; and that erection/commissioning charges are not includible in assessable value. Consequential interest and penalty demands founded on the impugned valuation and excisability findings were therefore set aside.

HELD THAT:- We are not inclined to interfere with the impugned order in exercise of our jurisdiction under Article 136 of the Constitution of India.

Civil Appeal is, accordingly, dismissed and the accompanying interlocutory application(s), if any, stands disposed of.

Cenvat credit disallowance for inputs used in manufacture of exempted goods - Applicability of Tribunal's findings on CENVAT credit - Precedential effect of dismissal of a related departmental appeal - HC [2011 (1) TMI 285 - PUNJAB AND HARYANA HIGH COURT] dismissed revenue appeal - HELD THAT:- Civil Appeal is dismissed in view of the low tax effect.

Exclusion of purchase turnover from taxable turnover under section 27 - taxable turnover - inter State sale exclusion from State taxable turnover - declared goods and stage of taxation - HC [2010 (7) TMI 909 - PUNJAB AND HARYANA HIGH COURT] allowed appeal as purchase turnover in question is to be excluded from taxable turnover under section 27, and the impugned orders are set aside - HELD THAT:- We reiterate that on account of low tax effect, the Special Leave Petition is dismissed.

Reversal of Cenvat credit - Applicability of Rule 6(1) to exempted final products - Exempted final products - As decided by HC [2012 (4) TMI 369 - HIMACHAL PRADESH HIGH COURT] revenue authorities erred in directing reversal of credit in respect of inputs in stock or in process on the date of exemption. Consequently the impugned findings confirming demand and penalty were held to be perverse and contrary to settled law - HELD THAT:- The Court held that the issue was no longer res integra and followed its earlier order [2016 (3) TMI 1391 - SC ORDER] - It accepted the position that the assessee was rightly entitled to reversal of Cenvat credit in respect of the inputs with effect from 01.08.2004, being the date from which exemption from payment of excise duty on the final products was granted. Since, on the date when reversal of Cenvat credit was effected, the final product was not exempted, Rule 6(1) of the Cenvat Credit Rules, 2002/2004 had no application. [Paras 2, 3]

Final Conclusion: The Civil Appeal and one Special Leave Petition were dismissed on the ground of low tax effect. The remaining Special Leave Petition was also dismissed, the Court holding that the controversy stood covered by its earlier decision and that Rule 6(1) did not apply where Cenvat credit had been reversed from the date on which exemption on the final products took effect.

Modvat credit on spares and accessories of capital goods - capital goods - Scope of Rule 57Q of the Central Excise Rules, 1944 after the amendments by Notification No. 14/96-C.E. and Notification No. 25/96-C.E. (N.T.) - As decided by HC [2024 (8) TMI 1732 - MADRAS HIGH COURT] relying upon Division Bench case [2017 (6) TMI 1104 - MADRAS HIGH COURT], allowed the appeals, holding that Modvat credit was available on components, spares and accessories of the specified capital goods for the period 23.07.1996 to 31.08.1996, set aside the Tribunal's contrary order as inconsistent with the Division Bench precedent and the explanatory circular, and disposed of the appeals - HELD THAT:- Delay was condoned and the Special Leave Petition was dismissed, the Court stating that it found no reason to interfere with the impugned judgment of the Madras High Court.

Related person for the purpose of valuation under the Central Excise law - Transaction value - Applicability of Rule 9 of the Central Excise Valuation Rules - manufacturer selling submersible pumps through the marketing company treated as having sold to a related person so as to displace transaction value and attract valuation under Rule 9 - HELD THAT: - The Tribunal held that the controversy was already concluded in the appellants' own earlier cases and followed the same view like in Hindustan Pumps & Electrical Engineering Pvt. Ltd. & Malkoh Marketing Pvt. Ltd. [2024 (12) TMI 1192 - CESTAT CHANDIGARH] and [2023 (11) TMI 1328 - CESTAT CHANDIGARH]

It accepted that the appellants were not related persons within the meaning of section 4(3)(b)(ii) and that Rule 9 of the Central Excise Valuation Rules, 2000 was inapplicable. The determinative reasoning adopted from the earlier orders was that the alleged relationship did not fall within the statutory concept of related person and, in any event, Rule 9 could not apply where the manufacturer's entire production was not sold only through the alleged related buyer. On that basis, the allegation of undervaluation was held unsustainable. [Paras 5, 6, 7]

The duty demand, interest and penalties founded on alleged related-person valuation were set aside and the appeals were allowed.

Final Conclusion: Following the earlier decisions in the appellants' own cases, the Tribunal held that the related-person valuation adopted by the department was unsustainable. The impugned order was set aside and both appeals were allowed.

Demand of illegal gratification - Recovery of tainted money - Criminal conspiracy - Withholding of best evidence - Appeal against acquittal

Demand of illegal gratification - Recovery of tainted money - Presumption under Section 20 - Conviction under the Prevention of Corruption Act could not be sustained in the absence of reliable proof of demand and acceptance of illegal gratification by the respondents. - HELD THAT: - The Court held that proof of demand is the gravamen of the offences under Sections 7 and 13 of the Prevention of Corruption Act, and mere recovery of tainted money, divorced from reliable evidence of demand and voluntary acceptance, is insufficient. On the evidence as reappreciated by the High Court, the prosecution failed to establish even the foundational facts of demand and acceptance, material witnesses did not support the prosecution version in material particulars, and the evidence was found doubtful and unreliable. In such circumstances, the statutory presumption could not be invoked against the respondents. [Paras 11, 13, 16, 17, 18]

The finding of acquittal on the bribery charges was upheld, as the essential ingredients of demand and acceptance were not proved beyond reasonable doubt.

Criminal conspiracy - Meeting of minds - Benefit of doubt - The charge of criminal conspiracy against the respondents failed for want of cogent evidence showing any prior agreement or meeting of minds with the principal accused. - HELD THAT: - The Court reiterated that conspiracy cannot be inferred from mere suspicion, presence, or association, and requires satisfactory evidence showing a meeting of minds to commit an illegal act or a legal act by illegal means. In the present case, apart from alleging the respondents' presence at certain places, the prosecution produced no substantive material showing prior concert or shared criminal intent. The principal allegation of demand was against the principal accused alone, and no independent material showed active participation by the respondents in that demand or any agreement to further it. [Paras 19, 21, 22, 23]

The High Court was right in holding that the conspiracy charge under Section 120-B IPC was not established.

Withholding of best evidence - Adverse inference - Material electronic evidence - The prosecution's failure to produce the alleged tape-recorded conversation justified an adverse inference against it. - HELD THAT: - The Court accepted the significance of the High Court's finding that the prosecution withheld the best available evidence. The complainant's own case was that a tape recorder had been used to record the conversation relating to demand, yet that material was neither seized nor produced, and no explanation was offered for its non-production. Since that evidence could have conclusively shown the participants in the conversation and its content, its withholding assumed substantial importance and warranted an adverse inference against the prosecution. [Paras 24, 25, 27]

Non-production of the alleged recorded conversation further weakened the prosecution case and supported the acquittal.

Appeal against acquittal - Possible view - Presumption of innocence - No interference was warranted with the High Court's acquittal, as its view was a plausible one based on the evidence and was neither perverse nor manifestly illegal. - HELD THAT: - The Court applied the settled principle that interference with an acquittal is limited, particularly where the acquittal is founded on a plausible appreciation of the evidence. The presumption of innocence stands reinforced by an order of acquittal, and unless the findings are perverse, wholly unreasonable, or productive of miscarriage of justice, interference under Article 136 is unwarranted. Here, the High Court had meticulously reappreciated the evidence, assigned cogent reasons, and extended benefit of doubt on a view that was reasonably possible on the record. [Paras 33, 34, 35, 36, 37]

The acquittal recorded by the High Court did not call for interference.

Final Conclusion: The Supreme Court declined to interfere with the High Court's acquittal. It held that the prosecution had failed to prove beyond reasonable doubt the essential ingredients of demand, acceptance and conspiracy, and that the High Court's view was a plausible one supported by the record.

Further investigation under Section 173(8) CrPC- further investigation into the same set of allegations after closure report had been filed twice -Leave of Magistrate for supplementary investigation - Civil dispute giving rise to criminal proceedings - Abuse of process

Further investigation u/s173(8) CrPC - Leave of Magistrate - Supplementary chargesheet - HELD THAT: - The Court held that although Section 173(8) CrPC does not expressly state that prior permission is required, the law as developed by precedent has read such requirement into the provision as a necessary implication. The record showed that, though an application for further investigation was filed on the third occasion, no order granting permission of the Magistrate was available and it was not even the respondents' case that such permission had been granted. In that situation, the contention that no leave was necessary was rejected, and the third round of investigation as well as the ensuing chargesheet were held unsustainable. [Paras 9, 10, 15]

The third further investigation and the chargesheet founded on it were held invalid for want of the Magistrate's approval.

Civil dispute and criminal prosecution - Business relationship dispute - Abuse of process - whether the dispute inter se parties is civil in nature and, therefore, the recourse to criminal law would be unjustified? - HELD THAT: - The Court found that the real controversy concerned the nature of the business arrangement between the parties, namely whether a joint venture existed and how profits were to be shared, which was plainly a civil dispute. As to the allegation of forgery, the Court noted the incongruity that such allegation was not raised before the foreign court where the documents were allegedly used, despite the complainant claiming to possess expert material in support. Without examining the intrinsic worth of the handwriting expert's report, the Court held that the sequence of events rendered the criminal allegations suspect. In the cumulative circumstances, continuation of the prosecution was held contrary to law and an abuse of process. [Paras 12, 13, 15]

The FIR and subsequent criminal proceedings were quashed as the dispute was essentially civil and the criminal process had been improperly invoked.

Final Conclusion: The appeal was allowed. The Court held that the third round of further investigation and the chargesheet were vitiated for want of the Magistrate's approval, and that the controversy between the parties was essentially civil in nature; consequently, the FIR and all subsequent proceedings were quashed.

Vicarious liability u/s 141 of the Negotiable Instruments Act - Foundational averments in complaint - Quashing of complaint at threshold

Vicarious liability of office bearers - Specific role in underlying transaction - Foundational factual basis in complaint - Whether complaint u/s 138 and 141 of the Negotiable Instruments Act disclosed sufficient factual foundation to continue prosecution against some of the office bearers, but not against the office bearer against whom only a general allegation based on status was made?

HELD THAT: - The Court held that liability under Section 141 is person-specific and cannot be fastened merely because an accused holds an office in a society. The complaint must be read as a whole, and while it need not mechanically reproduce the statutory language, it must disclose a factual basis showing how the person sought to be prosecuted was in-charge of and responsible for the conduct of the entity's affairs.

Applying that test, the Court found prima facie material against respondent Nos. 1, 2 and 4 because the complaint and accompanying documents linked them to the underlying financial transaction through their participation in antecedent borrowings and execution of financial documents, including the MoU, cheque and promissory notes. Such documentary participation furnished sufficient foundational material to justify continuation of prosecution at the quashing stage. In contrast, as regards respondent No. 3, the complaint contained only a general assertion founded on his designation as an Executive Member, without any specific averment or material connecting him with the transaction giving rise to the dishonoured cheque. Since designation alone does not attract vicarious liability, quashing was rightly upheld only in his case. [Paras 39, 40, 41, 42, 43]

Proceedings were restored against respondent Nos. 1, 2 and 4, but the quashing in favour of respondent No. 3 was sustained.

Final Conclusion: The appeal was partly allowed. The quashing order was set aside as against respondent Nos. 1, 2 and 4, since the complaint and accompanying material disclosed sufficient foundational facts to proceed against them under Section 141 of the Negotiable Instruments Act, while the quashing in favour of respondent No. 3 was maintained for want of any specific factual nexus with the transaction.

Extinguishment of claims upon approval of a resolution plan - binding effect of an approved resolution plan on corporate debtor and stakeholders - doctrine of 'clean slate' for successful resolution applicant - overriding effect of the Insolvency and Bankruptcy Code over inconsistent enactments - immunity from prosecution and extinguishment of liabilities under Section 32A of the IBC

HELD THAT:- We find no grounds to interfere with the impugned judgment and order of the High Court [2026 (1) TMI 708 - BOMBAY HIGH COURT]. Hence, the Special Leave Petitions are dismissed.