TaxTMI Updates e-Newsletter
Jun 08,2024

Input Tax Credit - eligibility and conditions for taking input tax credit - restriction on entitlement to input tax credit pending payment to Government - time limit for claiming input tax credit - self-assessment and electronic credit ledger - matching of supplies via GSTR-2A/2B and invoice communication - destination-based consumption tax and inter-state ITC transfer mechanism - non-obstante clause as a restricting provision

Taxing statute constitutional validity - doctrine of classification and Article 14 - Grounds on which a taxing statute can be held unconstitutional - HELD THAT: - The Court held that a taxing statute is valid if enacted by a competent legislature, is for a public purpose and does not contravene fundamental rights. Fiscal measures permit wide legislative discretion in classification so long as there is an intelligible differentia with a rational nexus to the legislative object. The power to tax is an inherent sovereign function subject to constitutional limits; manifest arbitrariness, want of competence or infringement of Part III rights are the established grounds to strike down a taxing provision. The Court relied on precedents summarising these principles and applied them to conclude that GST enactments fall within constitutional competence and are presumptively valid. [Paras 64, 65, 66, 68, 69]

Taxing statutes are sustainabe unless shown to be incompetent, arbitrary or violative of fundamental rights; the GST enactments are within legislative competence and not unconstitutional on the general grounds urged.

Input Tax Credit - entitlement subject to statutory conditions - concession versus absolute right - Nature of the claim to Input Tax Credit under the GST scheme - HELD THAT: - The Court determined that ITC is a statutory benefit/concession which may be described as an entitlement but is not an absolute right; it is subject to the conditions, restrictions, time-limits and manner prescribed in the Act and Rules (notably Sections 16(2)-(4), Section 41, Section 49 and applicable rules). Reliance on precedents established that concessions must be strictly availed in accordance with statutory prescriptions and that the legislature may abridge or curtail concessions by rule-making. Consequently, Section 16(1) does not create an unfettered right to ITC independent of the statutory limitations. [Paras 73, 74, 75, 76, 77]

Claim to ITC is a statutory entitlement subject to the Act's conditions, restrictions and timelines; it is not an absolute property right immune from prescribed limitations.

Restriction on entitlement to input tax credit pending payment to Government - time limit for claiming input tax credit - self-assessment and electronic credit ledger - matching of supplies via GSTR-2A/2B and remedial circulars - Constitutionality and sustainability of Section 16(2)(c) and Section 16(4) (time-bar) under the GST law - HELD THAT: - The Court rejected the challenge to Section 16(2)(c) and Section 16(4). It reasoned that these provisions form part of the statutory scheme balancing three imperatives: (a) removal of cascading by granting ITC, (b) tax collection by self-assessment in each financial year, and (c) compliance of inter-state ITC transfer to destination States. Section 16(2)(c)'s requirement that tax charged be actually paid to Government prevents an originating State from being compelled to transfer unreceived amounts to destination States and is therefore a permissible restriction rather than unconstitutional discrimination. Section 16(4)'s time-limit for claiming ITC is a valid, non-arbitrary legislative cutoff necessary for budgetary certainty and administrative practicability; time-limits are comparable to those in earlier credit regimes and have been upheld by other courts. The Court also noted administrative remedial measures (introduction of matching provisions, GSTR 2B/auto-statements and Circulars No.183/15/2022 and No.193/05/2023) addressing bona fide difficulties during the initial rollout and granted procedural relief where applicable. The Court emphasized that ITC is self-assessed into the electronic credit ledger and subject to verification, reversal and re availment mechanisms provided by statute. [Paras 88, 90, 99, 100, 101]

Section 16(2)(c) and Section 16(4) are constitutionally sustainable and not violative of Articles 14 or 19; bona fide claims falling under specified circulars may be processed and certain procedural relief is afforded for the initial implementation period.

Final Conclusion: Writ petitions challenging Section 16(2)(c) and Section 16(4) of the CGST/SGST Act are dismissed on merits; ITC is a statutory entitlement subject to prescribed conditions and time-limits, and the petitioners are granted limited procedural relief to approach authorities within thirty days where Circulars No.183/15/2022 and No.193/05/2023 apply and to treat the September return due date as 30th November from 01.07.2017 for processing eligible claims.

Provisional attachment to protect revenue - Search and seizure under Chapter XIV - Requirement of notice under Section 74 before continuing attachment - Locking of Electronic Credit Ledger - Attachment as a last resort

Provisional attachment to protect revenue - Requirement of notice under Section 74 before continuing attachment - Search and seizure under Chapter XIV - Validity of provisional attachment and locking of Electronic Credit Ledger in absence of notice under Section 74 of the Central GST Act, 2017 - HELD THAT: - The Court noted that search and seizure proceedings under Chapter XIV were initiated and provisional attachment and locking of the Electronic Credit Ledger were ordered on 15.03.2024 and 18.03.2024 respectively. From the respondents' reply it emerged that no notice under Section 74 of the Act of 2017 had been issued to the petitioner. The Court observed that provisional attachment has grave consequences for an assessee's business and should be employed as a last resort to protect Government revenue. Where search and seizure proceedings are initiated, the Revenue must proceed further and, if material indicating fraud or concealment is found, issue the statutory notice under Section 74 before continuing to rely on attachment measures. In the absence of such notice here, continuation of the attachment and ledger lock was held inappropriate. [Paras 3, 4, 5, 6]

Attachment order dated 15.03.2024 and the order locking the Electronic Credit Ledger dated 18.03.2024 are revoked and the ledger and account shall be released forthwith.

Protection of Government Revenue - Attachment as a last resort - Effect of revocation on continuation of statutory proceedings - HELD THAT: - The Court clarified that revocation of the provisional attachment and unlocking of the ledger is without prejudice to the respondents' statutory powers. The respondents remain free to continue and conclude the search and seizure proceedings under the Act of 2017 and to take such steps as are permissible in law, including issuing any requisite notices and pursuing appropriate action if the material so warrants. The order does not absolve the petitioner of any consequences that may follow from such future proceedings. [Paras 7]

Respondents are free to proceed with and conclude their statutory proceedings under the Act of 2017; the revocation does not preclude future action in accordance with law.

Final Conclusion: Writ petition allowed; provisional attachment dated 15.03.2024 and order locking the Electronic Credit Ledger dated 18.03.2024 revoked and released forthwith, without prejudice to the respondents' right to continue and conclude proceedings under the Central GST Act, 2017.

Mechanical adoption of Special Audit report - failure to apply mind to taxpayer's reply - requirement of a speaking order - opportunity of personal hearing - remand for re-adjudication - demand under Section 73 of the Central Goods and Services Tax Act, 2017

Mechanical adoption of Special Audit report - failure to apply mind to taxpayer's reply - requirement of a speaking order - Impugned order dated 30.04.2024 creating demand under Section 73 was unsustainable for being cryptic and not taking into account the detailed reply furnished by the petitioner. - HELD THAT: - The Show Cause Notice annexed the Special Audit Report and the order records that the taxpayer's detailed reply dated 21.03.2024 was 'not satisfactory' without engaging with the specifics of the reply. The Special Audit findings were simply enclosed and the Proper Officer's conclusion that the reply was unsatisfactory is ex facie indicative of no application of mind. Where the officer requires further details, those should be specifically sought; no such specific request or opportunity to clarify is reflected in the record. A merely conclusory statement that a reply is not satisfactory does not satisfy the requirement of a reasoned adjudication and falls short of the obligation to pass a speaking order after considering the taxpayer's submissions. [Paras 5, 6, 7, 8]

Impugned order set aside for lack of application of mind and absence of a speaking order addressing the petitioner's detailed reply.

Opportunity of personal hearing - remand for re-adjudication - demand under Section 73 of the Central Goods and Services Tax Act, 2017 - Show Cause Notice remitted to Proper Officer for fresh adjudication with directions to permit filing of further reply, grant personal hearing and pass a fresh speaking order within the statutory period. - HELD THAT: - The Court directed that the petitioner may file a further reply within 30 days and that the Proper Officer shall re-adjudicate the Show Cause Notice after affording personal hearing and shall pass a fresh speaking order in accordance with law within the period prescribed under Section 75(3) of the Act. The remand is for re-adjudication on the record after hearing and a reasoned order; the Court expressly refrained from commenting on the merits of the tax demand. [Paras 9, 10, 11]

Show Cause Notice remitted; petitioner to file further reply within 30 days; Proper Officer to re-adjudicate after personal hearing and pass a fresh speaking order within the statutory time.

Final Conclusion: Impugned order dated 30.04.2024 creating a demand for Financial Year 2018-19 under Section 73 is quashed for want of a reasoned adjudication; the Show Cause Notice is remitted for re-adjudication after allowing the petitioner to file a further reply and after affording personal hearing, with a fresh speaking order to be passed within the statutory period. The Court has not adjudicated the merits and reserves parties' rights; challenge to Notifications Nos. 9 of 2023 and 56 of 2023 is left open.

Invocation of extended period of limitation under the Act - suppression and wilful misstatement/fraudulent availment of input tax credit - appealability of assessment order under the Act - challenge by extraordinary writ to final GST assessment

Invocation of extended period of limitation under the Act - suppression and wilful misstatement/fraudulent availment of input tax credit - Validity of the show cause notice invoking the extended period of limitation - HELD THAT: - The Court examined the show cause notice and the final order and found that the authorities had identified the foundation for invoking the extended period in paragraph 2.14 of the show cause notice and had articulated reasons in paragraph 4 of the show cause notice and in paragraph 4.12 of the final order. The existence of allegations of suppression, wilful misstatement or fraudulent availment of input tax credit was recorded by the authority and formed the basis for invoking the extended period. The correctness, sufficiency or proof of those allegations was held to be a matter for adjudication in the statutory process and not for determination in writ jurisdiction. [Paras 5, 6, 7]

The show cause notice was held to have sufficiently stated grounds for invoking the extended period and that those findings could not be impeached in the writ petition.

Appealability of assessment order under the Act - challenge by extraordinary writ to final GST assessment - Whether the legality of the final order under Section 74 (assessed as an appealable order) could be challenged by extraordinary writ - HELD THAT: - The Court noted that the order dated 31st January, 2024 was an order within the statutory remedial scheme (appealable under the Act) and that the petitioners had participated in the proceedings and raised jurisdictional objections before the authority. The Court accordingly held that the proper course to test the correctness of the authority's determination on invocation of the extended period and related findings was through the statutory appellate/rectification remedies and not by circumventing that scheme through extraordinary writ jurisdiction. The Court observed precedents discussed by the parties but declined to re-open the factual sufficiency of the authority's findings in writ proceedings. [Paras 6, 7, 8]

The challenge to the final order was not maintainable in writ jurisdiction; the petition was dismissed and the petitioners were left free to pursue statutory remedies.

Final Conclusion: Writ petition dismissed; Court held that the authority had articulated reasons for invoking the extended period and that those findings, and the legality of the final assessment order, must be contested through the statutory appellate remedies rather than by extraordinary writ; dismissal without prejudice to pursuing statutory remedies.

Principles of natural justice - obligation under Section 75(4) to afford opportunity of hearing - ex-parte order - quash and set aside order for non-compliance - remand for fresh hearing

Principles of natural justice - obligation under Section 75(4) to afford opportunity of hearing - ex-parte order - Validity of the order dated 7th February 2024 under Section 73 of the WBGST Act, 2017 in view of alleged denial of opportunity of hearing - HELD THAT: - The Court found that where an adverse decision is contemplated, the authorized officer was obliged under Section 75(4) to afford the petitioner an opportunity of hearing. The material on record, including the common portal screenshot and the order itself, did not establish that any personal hearing was offered; the recording in the impugned order that the petitioner was requested to appear on 2nd February 2024 was contradicted by the portal and by the State's inconsistent instruction that appearance was on 5th February 2024. In these circumstances the order dated 7th February 2024 was rendered ex parte without compliance with the mandated opportunity of hearing and thus could not be sustained. [Paras 7, 8]

Order dated 7th February 2024 set aside and quashed for non compliance with the obligation to afford an opportunity of hearing.

Remand for fresh hearing - quash and set aside order for non-compliance - Directions regarding further conduct of the proceedings under Section 73 after quashing the impugned order - HELD THAT: - Having quashed the impugned order for non compliance with the hearing requirement, the Court directed the proper officer to complete the proceedings afresh under Section 73 by giving the petitioner an opportunity of hearing. The Court confined its intervention to procedural rectification and explicitly refrained from adjudicating the merits of the show cause notice, leaving the questions of liability to be decided after the statutory opportunity is afforded. [Paras 9, 10]

Proceedings remitted to the proper officer to be completed after affording opportunity of hearing to the petitioner within six weeks; merits not decided by the Court.

Final Conclusion: The writ petition succeeds insofar as the order dated 7th February 2024 is quashed for failure to afford the petitioner the opportunity of hearing as required; the matter is remitted to the proper officer to complete the Section 73 proceedings after giving hearing within six weeks, with the Court not expressing any view on the merits of the show cause notice.

Reimbursement of GST paid - application of G.O.Ms.No.296 - paragraph 10(a) and paragraph 12 - contract value exclusive of GST - supplier's obligation to collect and remit GST and to issue tax invoice under GST enactments - precedent effect of Subaya Constructions Company Ltd.

Reimbursement of GST paid - contract value exclusive of GST - The petitioner-suppliers of works contract services are entitled to reimbursement of GST paid for works performed post 01.07.2017 where the contract and Government orders treat contract value as exclusive of GST. - HELD THAT: - The Court accepted that with effect from 01.07.2017 GST subsumed erstwhile indirect taxes and suppliers are statutorily obliged to raise tax invoices and collect GST at notified rates. The tenders and contracts were governed by Rule 14(7) of the Tamilnadu Transparency in Tenders Rules, 2000 and by GO.Ms.No.296 (Finance) dated 09.10.2017, which make contract value exclusive of GST and require collection and remittance of GST separately. The respondent's order rejecting the petitioner's claim on the ground that tender rates were inclusive of sales tax was inconsistent with the post-GST regulatory framework and the Government Order. Applying these principles the Court quashed the impugned rejection and directed reimbursement of GST paid by the petitioner for the works contract services.

Impugned order rejecting claim for reimbursement quashed; petitioner entitled to reimbursement of GST paid and respondent directed to reimburse within eight weeks.

Application of G.O.Ms.No.296 - paragraph 10(a) and paragraph 12 - precedent effect of Subaya Constructions Company Ltd. - Paragraph 10(a) and paragraph 12 of G.O.Ms.No.296 govern the adjustment and quantification of subsumed tax and the fixation of revised agreement value, and the Court applied the ratio of Subaya Constructions Company Ltd. to direct implementation. - HELD THAT: - Relying on the decision in Subaya Constructions Company Ltd. , the Court held that paragraph 10(a) is applicable up to 30.06.2017 and paragraph 12 applies on and from 01.07.2017. Paragraph 10(a) provides the method for estimating the value of subsumed tax from bid break-ups and proportionate adjustment after negotiation. Paragraph 12 mandates negotiation of existing agreements, execution of supplemental agreements fixing revised agreement value as original value minus subsumed tax plus applicable GST, and payment of final bills accordingly. The Court directed that the parties be governed by these paragraphs and, insofar as quantification and implementation are concerned, ordered reimbursement and directed respondents to pass appropriate orders for other petitioners within eight weeks, permitting petitioners to furnish any documents required for consideration.

Paragraphs 10(a) and 12 of GO.Ms.No.296 shall govern the adjustment/quantification; respondents directed to implement those paragraphs and reimburse GST within eight weeks, with petitioners to supply necessary documents if required.

Final Conclusion: The writ petition in WP.No.14937 of 2021 is allowed by quashing the impugned rejection and directing reimbursement of GST paid; respondents in the other writ petitions are directed to pass appropriate orders to reimburse GST paid to respective petitioners within eight weeks, subject to production of any documents required for consideration.

E-way bill - change of vehicle due to breakdown - amendment window for e-way bill - intention to evade tax - imposition of tax and penalty under CGST Act - delay in filing writ - communication of speaking order

Delay in filing writ - communication of speaking order - Whether the delay in filing the writ petition disbarred judicial consideration - HELD THAT: - The appellant explained that the speaking order of the original authority was never communicated or uploaded, necessitating multiple representations; the statutory appeal had been preferred on the basis of the gist of the order; the original counsel entrusted with the papers died, causing genuine difficulty in obtaining records; a fresh advocate then sought the speaking order and further representation was made on 03.01.2024 which was not considered. The Court found these reasons to be bona fide and sufficient to entertain the writ petition despite the lapse of time. The Court therefore treated the delay as not being a bar to adjudication on merits. [Paras 2, 3]

Delay excused; writ petition entertainable and to be considered on merits.

E-way bill - change of vehicle due to breakdown - amendment window for e-way bill - intention to evade tax - imposition of tax and penalty under CGST Act - Whether imposition of tax and penalty for transporting goods without a valid e-way bill was justified on the facts - HELD THAT: - The factual position accepted by the Court was that goods were originally loaded in one vehicle which broke down on the night of 19.11.2021 and, due to urgency, were transferred to another vehicle which delivered them at the destination at about 06:20 a.m. on 20.11.2021. The transporter was unable to amend the e-way bill during the midnight interregnum. The detention order recorded no discrepancy other than the absence of a valid e-way bill for the vehicle then carrying the goods. The appellant did not dispute these facts on appeal nor was anything placed on record to show mala fides. The department provides an eight-hour window for amendment of the e-way bill; had the goods remained in the original vehicle amendment would have sufficed, but contingencies compelled the change. On these peculiar facts the Court found absence of any intention to evade tax and held that invoking penal provisions under the CGST Act and confirming tax and penalty was not justified. [Paras 4, 5, 6]

Tax and penalty imposed for transportation without a valid e-way bill quashed.

Final Conclusion: Appeal allowed; the impugned orders are quashed and the tax and penalty collected from the petitioner shall be refunded by the respondent authorities within twelve weeks from receipt of the certified copy of this order.

Natural justice - Opportunity of personal hearing - Quashing and remand - Garnishee order / attachment of bank account - Securing of revenue interest - Service of show cause notice uploaded on portal and notice to GST practitioner

Natural justice - Opportunity of personal hearing - Quashing and remand - Service of show cause notice uploaded on portal and notice to GST practitioner - Impugned assessment order dated 15.09.2023 quashed and matter remanded for fresh consideration because the petitioner was not heard before the order and the tax demand had been appropriated. - HELD THAT: - The Court found that the assessment order was issued without affording the petitioner a hearing, and that the entire tax demand had been realized by appropriation from the petitioner's bank account. Given that revenue interest is fully secured by such appropriation, it is just and necessary to afford the petitioner an opportunity to contest the show cause notice. The petitioner is permitted to file a reply to the show cause notice within two weeks from receipt of this order; thereafter the respondent must provide a reasonable opportunity, including personal hearing, and pass a fresh order within two months from receipt of the reply. All contentions of the petitioner are left open for determination in the remanded proceedings.

Impugned order dated 15.09.2023 quashed; matter remanded for reconsideration with directions to permit filing of reply, grant personal hearing, and pass fresh order within two months.

Garnishee order / attachment of bank account - Securing of revenue interest - Garnishee order dated 06.02.2024 has worked itself out and stands raised in view of the quashing of the assessment order and the appropriation of the tax demand. - HELD THAT: - The Court observed that the tax demand had already been appropriated from the petitioner's bank account, thereby securing the revenue interest. In consequence of quashing the assessment order, the garnishee/attachment is rendered ineffective and is accordingly treated as raised. No adjudication on merits of the tax demand is made at this stage; the petitioner may advance all contentions in the remanded proceedings.

Garnishee order stands raised; attachment of bank account treated as worked out.

Final Conclusion: The writ petition is disposed by quashing the assessment order dated 15.09.2023 and remanding the matter for fresh consideration after permitting the petitioner to file a reply and be heard; the garnishee order is treated as having worked itself out and is raised; liberty to agitate all contentions is preserved.

Notice in Form ASMT 10 - scrutiny of returns - opportunity of personal hearing - disparity between GSTR-3B and GSTR-9 - quashing of assessment order for procedural infirmity - remand on terms

Notice in Form ASMT 10 - scrutiny of returns - quashing of assessment order for procedural infirmity - Failure to issue notice in Form ASMT 10 when proceedings arise from scrutiny of returns rendered the assessment order procedurally infirm. - HELD THAT: - The Court accepted the petitioner's contention that the impugned proceedings were initiated pursuant to scrutiny of the returns for the assessment period and that when proceedings follow scrutiny, a notice in Form ASMT 10 is required to afford the taxpayer an opportunity to explain disparities. The Court found that this procedure was not followed in the present case. While recognising that the petitioner had been issued other communications, the absence of the statutory notice in Form ASMT 10 constituted a procedural lapse warranting interference with the assessment order. [Paras 5]

The assessment order was quashed on the ground that notice in Form ASMT 10 was not issued when proceedings emanated from scrutiny of returns.

Opportunity of personal hearing - disparity between GSTR-3B and GSTR-9 - Whether the petitioner was denied a reasonable opportunity, including personal hearing, to contest the tax demand arising from alleged disparity between monthly and annual returns. - HELD THAT: - The Court observed that although the respondents contend that opportunities and a personal hearing were offered, the tax demand relating to the alleged disparity between GSTR-3B and GSTR-9 was ultimately confirmed without hearing the petitioner. Taking the factual matrix cumulatively, the Court held that the petitioner should be afforded a reasonable opportunity, including a personal hearing, to contest the demand on remand. [Paras 6]

Petitioner to be given a reasonable opportunity including a personal hearing to contest the tax demand on remand.

Remand on terms - quashing of assessment order for procedural infirmity - Remedial course to be adopted in view of procedural lapse and offers by parties. - HELD THAT: - Balancing the procedural infirmity and the fact that the petitioner had been given prior opportunities, the Court exercised its remedial discretion to quash the impugned order but on terms. The petitioner was permitted to file a reply to the show cause notice and was directed to remit 5% of the disputed tax demand within three weeks. Upon receipt of the reply and verification of the remitted amount, the respondents were directed to provide a reasonable opportunity including personal hearing and to pass a fresh order within two months from receipt of the reply. [Paras 7]

Impugned assessment order quashed and matter remanded to respondents for fresh consideration on condition that petitioner remits 5% of disputed demand and files a reply; fresh order to be passed within two months after compliance.

Final Conclusion: The writ petition is allowed by quashing the impugned assessment order for assessment period 2017-18 on procedural grounds; the matter is remanded to the respondents for fresh adjudication after the petitioner remits 5% of the disputed tax demand and files a reply, and after affording a reasonable opportunity including a personal hearing, with a fresh order to be passed within two months of compliance.

Interim relief under Article 226 - exemption from IGST on import of lifesaving medicines - power of the GST Council to recommend exemptions under Article 279A(4) - ad hoc exemption by the Union Finance Minister pursuant to GST Council minutes and Customs Circular - bill of supply under Section 31(3)(c) of the Central Goods and Services Tax Act/State Goods and Services Tax Act

Interim relief under Article 226 - exemption from IGST on import of lifesaving medicines - Petitioner entitled to interim permission to purchase the imported medicine Risdiplam (Evrysdi) without payment of GST pending consideration of the exemption application - HELD THAT: - The Court accepted that the petitioner's three year old child suffers from a life threatening disease and that the only available medicine is an imported product for which an application for ad hoc exemption dated 17 10 2023 is pending before the Union Finance Minister. Having regard to the scheme reflected in the GST Council minutes and the Customs Circular permitting consideration of exemptions for import of medicines for treatment of individuals with life threatening diseases, and in exercise of its constitutional jurisdiction under Article 226, the Court considered it appropriate to grant interim relief. The relief is provisional and confined to permitting the petitioner to procure the drug without payment of GST until the competent authority completes consideration of the pending application or until further orders of the Court. [Paras 3, 4]

Petitioner permitted to purchase Risdiplam (Evrysdi) from the additional 6th respondent without payment of GST on an interim basis

Ad hoc exemption by the Union Finance Minister pursuant to GST Council minutes and Customs Circular - bill of supply under Section 31(3)(c) of the Central Goods and Services Tax Act/State Goods and Services Tax Act - Court directed that the additional 6th respondent may issue a bill of supply as contemplated by law and may seek further directions if difficulties arise in implementing the supply without GST - HELD THAT: - Noting the competence of the Union Finance Minister to grant ad hoc IGST exemption in light of the GST Council minutes and the Customs Circular, the Court authorised the supplier to issue a bill of supply in terms of Section 31(3)(c) of the CGST/SGST Acts to effect the supply without charging GST. The Court made this arrangement provisional and expressly permitted the additional 6th respondent to apply to the Court for modification or further directions should it face practical or legal difficulties in complying with the order. [Paras 4]

Additional 6th respondent permitted to issue a bill of supply and may apply to the Court for further directions if any difficulty is faced in supplying the drug without GST

Final Conclusion: Interim relief granted under Article 226 permitting the petitioner to procure the imported lifesaving medicine Risdiplam (Evrysdi) without payment of GST; supplier authorised to issue a bill of supply under the statutory provision, subject to the pending consideration of the petitioner's exemption application and to further judicial directions if required.

Condonation of delay under the proviso to Section 100(2) of the CGST Act, 2017 - Sufficient cause - Power of the Appellate Authority to condone delay under Section 101(1)

Condonation of delay under the proviso to Section 100(2) of the CGST Act, 2017 - Sufficient cause - Power of the Appellate Authority to condone delay under Section 101(1) - Whether the delay of 27 days in filing the appeal against AAR Order No. 125/AAR/2023 dated 20.12.2023 is condonable - HELD THAT: - The Appellate Authority examined the date of receipt of the AAR order (16.02.2024) and the statutory period of thirty days for filing an appeal under Section 100(2) of the CGST Act, 2017. The proviso to Section 100(2) permits the Appellate Authority to allow a further period not exceeding thirty days if satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the original thirty days. The appeal was filed on 12.04.2024 after a delay of 27 days beyond the normal thirty-day period but within the condonable thirty-day extension. The appellant produced a medical certificate showing that the authorised representative was under treatment from 05.03.2024 to 15.03.2024 and exhibited a letter dated 14.03.2024 seeking extension of time to the Commissioner of Commercial Taxes. Having regard to these records, the Authority found that the authorised representative's illness constituted sufficient cause preventing timely filing. The Authority also noted that it is empowered under Section 101(1) to pass orders deemed fit in such matters. On these findings, the Authority concluded that the delay is condonable under the proviso to Section 100(2). [Paras 5]

Delay of 27 days in filing the appeal is condoned and the appeal is admitted for consideration on merits.

Final Conclusion: The Appellate Authority condoned the delay in filing the appeal under the proviso to Section 100(2) of the CGST/TNGST Acts, 2017, finding sufficient cause in the authorised representative's illness, and directed that the appeal be taken up for consideration on merits.

Initiation of reassessment under Section 148 of the Income Tax Act, 1961 - subjective satisfaction to initiate reassessment - permanent establishment - royalty versus business income - Double Taxation Avoidance Agreement - Section 148A(b) and Section 148A(d) procedure

Initiation of reassessment under Section 148 of the Income Tax Act, 1961 - subjective satisfaction to initiate reassessment - royalty versus business income - permanent establishment - Double Taxation Avoidance Agreement - Validity of the reassessment initiation in view of the assessing officer's failure to address the petitioner's objections regarding taxability (royalty/business income) and existence of a permanent establishment. - HELD THAT: - The Court held that at the stage of initiating reassessment under Section 148 the assessing officer must be subjectively satisfied that income which is chargeable to tax has escaped assessment. The petitioner had, by its reply to the Section 148A(b) notice, specifically raised that the receipts from sale/resale of shrink wrapped software are not taxable as royalty (relying on Supreme Court authority) and that no permanent establishment existed in India, invoking the India Japan DTAA. The order under Section 148A(d) merely recorded that these matters "need to be verified" and declined to deal with them on the merits. Such perfunctory treatment failed to confront or repudiate the objections which went to the root of the jurisdictional satisfaction required before issuing a reassessment notice. Because the prerequisite subjective satisfaction was not demonstrated, initiation of reassessment could not be sustained. [Paras 7, 8, 9, 10]

Reassessment initiation quashed for failure of the authority to record requisite subjective satisfaction and for not addressing objections on royalty, business income and permanent establishment.

Section 148A(d) procedure - remand for fresh consideration - Procedure following quashment - whether matter should be remitted for fresh consideration. - HELD THAT: - The Court ordered that the impugned order under Section 148A(d) and the notice under Section 148 dated 28 March 2024 be quashed, and directed that the matter be revived at the desk of the assessing officer for fresh consideration from the stage of the petitioner's reply. The Court kept all rights and contentions of the parties open, thereby confining the relief to setting aside the defective initiation and permitting the revenue to reconsider the matter de novo in accordance with law. [Paras 10, 11]

Matter remitted to the assessing officer to be considered afresh from the stage of the petitioner's reply; parties' rights and contentions kept open.

Final Conclusion: Writ petition allowed; order under Section 148A(d) and notice under Section 148 dated 28 March 2024 quashed; matter remitted to the assessing officer for fresh consideration from the stage of the petitioner's reply, with parties' rights preserved.

Deduction under Section 80P(1) read with Section 80P(2)(a)(i) - Exclusion from benefit by Section 80P(4) - co-operative bank - Definition of "co-operative bank" under the Banking Regulation Act, 1949 read with NABARD Act, 1981 - Gross total income for purpose of Section 80P computed as per Section 80B(5) - Disallowance under sections 36(1)(iv)/(v) for unapproved staff retirement benefit fund - Interest on income-tax refund taxable as income from other sources under Section 56

Deduction under Section 80P(1) read with Section 80P(2)(a)(i) - Exclusion from benefit by Section 80P(4) - co-operative bank - Definition of "co-operative bank" under the Banking Regulation Act, 1949 read with NABARD Act, 1981 - Entitlement of the assessee to deduction under Section 80P(1) read with Section 80P(2)(a)(i) for AYs. 2010-11 and 2011-12 - HELD THAT: - The Tribunal applied the authoritative conclusion of the Hon'ble Supreme Court that the assessee is not a "co-operative bank" within the meaning of the Banking Regulation Act, 1949 read with the NABARD Act, 1981, and therefore the exclusion in Section 80P(4) does not operate. The Court's reasoning-that only a co-operative society conducting banking business as defined in the BR Act becomes a co-operative bank and requires a licence under Section 22 of the BR Act-governs the present years. There is no material on record to show any change in the assessee's bye-laws or activities since the year decided by the Apex Court (post 31/3/2007) which would alter that characterisation. Consequently, subject to fulfillment of the conditions in Section 80P(2)(a)(i), the assessee is eligible for the deduction claimed under Section 80P(1). [Paras 4]

Deduction under Section 80P(1) read with Section 80P(2)(a)(i) allowed for AYs. 2010-11 and 2011-12 as the assessee is not a co-operative bank.

Disallowance under sections 36(1)(iv)/(v) for unapproved staff retirement benefit fund - Gross total income for purpose of Section 80P computed as per Section 80B(5) - Validity and effect of disallowance of payments to staff retirement benefit fund under sections 36(1)(iv)/(v) - HELD THAT: - The Tribunal upheld the disallowance because the staff retirement benefit fund is not an approved fund within the meaning of the relevant provisions, validating the disallowance under sections 36(1)(iv)/(v). However, the Tribunal also held that the deduction under Section 80P(1) is to be computed with reference to gross total income as defined in Section 80B(5). Accordingly, the effect of the disallowance is subsumed in the computation of gross total income on which the Section 80P deduction is allowed; the disallowances themselves remain sustained for assessment computation. [Paras 4]

Disallowances under sections 36(1)(iv)/(v) upheld but their effect is reflected in computation of gross total income for granting the Section 80P deduction.

Interest on income-tax refund taxable as income from other sources under Section 56 - Deduction under Section 80P(1) read with Section 80P(2)(a)(i) - Treatment of interest on income-tax refund for AY 2011-12 - HELD THAT: - The Tribunal found no merit in the assessee's contention seeking to exclude interest on income-tax refund from taxable income. Such interest is income in nature and falls to be assessed as income from other sources under Section 56. Further, income assessed under Section 56 would not be eligible for deduction under Section 80P, which applies to profits and gains of specified co-operative societies subject to its conditions. [Paras 4]

Addition of interest on income-tax refund for AY 2011-12 upheld and to be assessed under Section 56; not eligible for Section 80P deduction.

Final Conclusion: Appeals of the assessee for AYs. 2010-11 and 2011-12 allowed and partly allowed respectively by permitting deduction under Section 80P(1) read with Section 80P(2)(a)(i) in view of the Supreme Court's finding that the assessee is not a co operative bank; disallowances for unapproved staff retirement fund sustained but reflected in gross total income for computing the Section 80P deduction; addition for interest on income tax refund for AY 2011 12 upheld as income from other sources. Revenue's appeals dismissed.

Revision under section 263 for orders erroneous and prejudicial to the interest of revenue - complete lack of enquiry / absence of application of mind by Assessing Officer - allowability of provisions debited to profit and loss account - capital expenditure versus revenue expenditure - suo-moto disallowance - remand for verification and re examination

Revision under section 263 for orders erroneous and prejudicial to the interest of revenue - complete lack of enquiry / absence of application of mind by Assessing Officer - allowability of provisions debited to profit and loss account - Validity of the Principal CIT's exercise of revision under section 263 in setting aside the assessment for re-examination of provisions debited to profit and loss account - HELD THAT: - The Tribunal found that the assessment order is silent and does not exhibit any application of mind by the Assessing Officer on the allowability of the various provisions (eight identified heads) debited to profit and loss account. Although a notice under section 142(1) requesting details about provisions/43B payments was issued, the assessment order contains no record of consideration of the assessee's purported reply and no findings on these claims. The record before the Tribunal was inconclusive because the assessment file could not be traced and there was no acknowledgement establishing that the reply relied upon by the assessee was before the AO. Given the absence of any recorded enquiry or reasoning by the AO on the allowability of the provisions, the AO's order was held to be erroneous and prejudicial to the revenue; the Principal CIT was therefore justified in setting aside the assessment for fresh examination of these claims. The Tribunal expressly did not decide the merits of the allowability but upheld the revision on the ground of lack of enquiry. [Paras 8]

Impugned order of the Principal CIT under section 263 is upheld insofar as it directs re-examination of the allowability of the provisions debited to profit and loss account due to the AO's complete lack of enquiry.

Capital expenditure versus revenue expenditure - suo-moto disallowance - remand for verification and re examination - Whether the Principal CIT was justified in setting aside the assessment on account of LAN networking and electrical expenses and the direction to verify whether the assessee had made suo-moto disallowance - HELD THAT: - The Tribunal noted that the assessee's computation apparently showed a disallowance in respect of LAN networking and electrical expenses, but this fact was not brought to the Principal CIT's notice in the assessee's reply to the section 263 show cause notice, nor was the alleged earlier reply referenced. Because the assessment record is silent and the AO's order does not show any consideration of this issue, the Tribunal directed the AO to verify from the record whether the assessee had in fact made a suo moto disallowance of the LAN/networking and electrical expenditure, and to examine the nature of the expenditure (capital or revenue) accordingly. The Tribunal did not express any final view on the substantive allowability; it remanded the matter for verification and re-examination by the AO. [Paras 8]

The Principal CIT's direction to re-examine the LAN networking and electrical expenses is sustained; the AO is directed to verify whether a suo moto disallowance was made and to re-adjudicate the nature and allowability of the expenditure.

Final Conclusion: The appeal is dismissed. The Tribunal upholds the Principal CIT's order under section 263 to the extent it sets aside the assessment for lack of enquiry into the allowability of the provisions debited to profit and loss account and directs verification and re-examination by the Assessing Officer, including confirming whether a suo-moto disallowance was made for LAN/networking and electrical expenses.

Production of additional evidence under Rule 29 of the Appellate Tribunal Rules, 1963 - Allowance of additional documentary evidence in appellate proceedings - Remand for consideration of additional evidence - Restoration to Assessing Officer for fresh adjudication - Genuineness of transactions, identity and creditworthiness of creditors - Addition under section 68 (unexplained cash credit) - Disallowance of interest for failure to prove genuineness

Production of additional evidence under Rule 29 of the Appellate Tribunal Rules, 1963 - Allowance of additional documentary evidence in appellate proceedings - Prabhavati S. Shah principle on admissibility of additional evidence - Application for permission to produce additional documentary evidence was allowed. - HELD THAT: - The Tribunal examined the application under Rule 29 and the factual explanation offered for non-production before the lower authorities. The assessee stated that certain public-domain documents and further material were not gathered earlier because it relied on orders in the earlier assessment year and on documents already on record; there was no contrary material from the revenue. The Tribunal noted precedents discussing the circumstances in which additional evidence may be allowed and observed that the assessee had a bona fide reason for not producing the material earlier. Having recorded reasons, and applying the discretion under Rule 29, the Tribunal found it appropriate in the interests of justice to permit the additional evidence to be filed so that the identity, creditworthiness and genuineness of the loans could be independently established for the relevant assessment year. [Paras 23, 24]

Additional documentary evidence permitted to be filed before the Assessing Officer.

Remand for consideration of additional evidence - Restoration to Assessing Officer for fresh adjudication - Genuineness of transactions, identity and creditworthiness of creditors - Addition under section 68 (unexplained cash credit) - Disallowance of interest for failure to prove genuineness - The matter was restored to the Assessing Officer to consider the additional evidence and to decide afresh on the issues of genuineness of transactions, identity and creditworthiness of creditors and the additions/disallowance made. - HELD THAT: - Invoking Rule 30, the Tribunal directed that the additional documents may be produced before the Assessing Officer and ordered restoration of the case to the file of the AO for reconsideration. The Tribunal specified a timeline for filing the evidence and required the AO to adjudicate the claims afresh in light of the additional material; this includes reconsideration of the disallowance of interest and the addition under section 68 which had been made by the AO in the assessment order. The restoration was ordered so that the factual controversies regarding existence, creditworthiness and genuine receipt and repayment of loans are examined at first instance by the AO. [Paras 25, 26]

Case restored to the Assessing Officer to consider the additional evidence filed by the assessee within 60 days and to decide the issues afresh.

Final Conclusion: The Tribunal allowed the assessee's application to place additional evidence on record and restored the case to the Assessing Officer for fresh consideration of the genuineness, identity and creditworthiness of the lenders and the related additions/disallowance, directing that the additional evidence be filed and considered within the timeframe specified.

Admission of appeal under section 249(4)(b) - advance tax liability payable by the assessee - calculation of advance tax for interest under section 234B - treatment of tax collected at source (TCS) as discharge of tax liability - remand for admission and adjudication on merits

Admission of appeal under section 249(4)(b) - remand for admission and adjudication on merits - Whether the Commissioner (Appeals) was justified in dismissing the appeal in limine for non-payment of an amount equal to advance tax as required by section 249(4)(b). - HELD THAT: - The Tribunal found that the appellant did not reply to the specific query from the Commissioner (Appeals) nor sought exemption under the proviso to section 249(4)(b), which justified the Commissioner (Appeals) in raising the question. However, the Tribunal held that the Commissioner (Appeals) erred in dismissing the appeal in limine without examining whether the statutory condition was in fact satisfied. The assessee had filed a belated return declaring undisputed income and demonstrated that tax on that admitted income had been discharged by way of TCS. On the material on record the Tribunal concluded there remained no unpaid advance tax in respect of the undisputed income, so dismissal without admission and adjudication on merits was incorrect. The Tribunal therefore set aside the in limine dismissal and remanded the matter to the Commissioner (Appeals) to admit the appeal and decide it on merits after giving the assessee a reasonable opportunity of being heard, with directions to the assessee to respond to the notice and to furnish requisite details without seeking adjournment. [Paras 8, 9]

LD CIT(A)/NFAC's order dismissing the appeal in limine was set aside and the matter remanded with directions to admit the appeal and adjudicate on merits after affording opportunity of hearing.

Advance tax liability payable by the assessee - calculation of advance tax for interest under section 234B - treatment of tax collected at source (TCS) as discharge of tax liability - Whether the phrase 'advance tax which was payable by him' in section 249(4)(b) refers to advance tax computed on assessed income (as under section 234B) or to advance tax payable according to the taxpayer's own computation (after accounting for TDS/TCS) on undisputed income. - HELD THAT: - The Tribunal compared the wording of section 249(4)(b) with section 234B(1) and observed that Parliament used different language in the two provisions; section 234B refers to advance tax calculated on assessed tax, whereas section 249(4)(b) requires payment of 'advance tax which was payable by him'. The Tribunal accepted the assessee's contention that, for the purpose of admission of appeal under section 249(4)(b), the advance tax payable is that which is payable by the assessee on his admitted/undisputed income as computed by him, taking into account amounts collected or deducted at source. Applying that principle, the Tribunal found the assessee's tax on admitted income had been discharged by TCS and thus no further advance tax remained payable for the purpose of section 249(4)(b). The Commissioner (Appeals) was therefore not justified in treating the advance tax liability as determined on assessed income for the limited purpose of admission of appeal. [Paras 8, 9]

The phrase in section 249(4)(b) refers to advance tax payable by the assessee on his own computation (including adjustment for TCS/TDS) and not necessarily to advance tax computed on assessed income under section 234B; the assessee's TCS discharge satisfied the requirement.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, set aside the CIT(A)'s in limine dismissal under section 249(4)(b), held that the statutory precondition relates to advance tax payable by the assessee on his admitted income (allowing TCS as discharge), and remanded the matter to the CIT(A)/NFAC to admit and decide the appeal on merits after affording the assessee a reasonable opportunity of hearing.

New Tax Regime - Form No.10IE - directory requirement - processing of return under section 143(1)(a) - amendment of intimation

New Tax Regime - Form No.10IE - directory requirement - processing of return under section 143(1)(a) - amendment of intimation - Whether the CPC was justified in denying the benefit of the New Tax Regime on account of the assessee filing Form No.10IE after the due date for filing the return of income - HELD THAT: - The Tribunal found as a fact that the assessee filed Form No.10IE on 10.01.2024, after the due date for the return but on the same date when the CPC processed the return under section 143(1)(a) and denied the New Tax Regime benefit. The Tribunal held that filing of Form No.10IE is directory and not a mandatory pre-condition which would automatically disentitle the assessee to the New Tax Regime. Because the Form No.10IE was available with the CPC at the time of processing, the CPC ought to have taken it into consideration when issuing the intimation. In these circumstances the appropriate remedy is to direct the CPC to amend the intimation and allow the benefit of the New Tax Regime after taking the available Form No.10IE into account. The Tribunal therefore set aside the denial to the extent indicated and directed amendment of the intimation. [Paras 6, 7, 8]

Appeal partly allowed; CPC directed to amend the intimation by taking into consideration the Form No.10IE and allow the benefit of the New Tax Regime.

Final Conclusion: The Tribunal allowed the appeal partly for A.Y.2023-24, holding that Form No.10IE is directory and directing the CPC to amend the intimation to grant the New Tax Regime benefit since the form was available with the CPC when the return was processed.

Percentage of completion method (POCM) and recognition of revenue on completed project - Tax deduction at source and disallowance under section 40(a)(ia) read with applicability of section 194C - Expenditure hit by payment-year provisions of section 43B - Disallowance under section 14A in absence of exempt income

Percentage of completion method (POCM) and recognition of revenue on completed project - Tax deduction at source and disallowance under section 40(a)(ia) read with applicability of section 194C - Expenditure hit by payment-year provisions of section 43B - Whether provisions relating to deduction of tax at source and corresponding disallowances can be applied to amounts provided in books as estimates for unfinished work where revenue has been recognised under the POCM method, and whether certain provided amounts are hit by the payment-year provision. - HELD THAT: - The Tribunal noted that the CIT(A) accepted that elements of assumption are inherent in the POCM accounting adopted by the assessee and accordingly set aside the AO's blanket disallowance of the provisions made for unfinished work. However, the CIT(A) examined the break-up of the provisions and found certain categories of expenses (including specified tax and labour-cess related items) to be not allowable as current-year expenditure under the payment-year rule, and further held that parts of the provided amounts were liable to tax-deduction-at-source consequences under the provisions governing TDS (including those attracted by supply/contract payments as reflected by section 194C). The Tribunal found no error in the CIT(A)'s approach to identify categories liable to disallowance under section 40(a)(ia) and payment-year provisions, but observed that the assessee had filed subsequent details showing actual payments and TDS deducted and deposited after the close of the relevant year which were not considered by the CIT(A). For that reason, although the Tribunal sustained the legal character of the disallowances in principle, it restored the matter to the CIT(A) for fresh consideration limited to verification of the subsequent payment/TDS particulars and to allow amounts in the appropriate year(s) where TDS was in fact deducted and deposited as per law. [Paras 9]

Sustained in principle the CIT(A)'s findings that specified portions of the provisions were liable to disallowance under the TDS and payment-year rules, but remitted the matter to the CIT(A) for verification of subsequent payments and TDS deposits and for consequential relief in the appropriate year(s).

Disallowance under section 14A in absence of exempt income - Whether the disallowance under section 14A is sustainable where there was no exempt income in the year under consideration. - HELD THAT: - The Tribunal recorded that the AO made a disallowance under section 14A without taking into account the admitted position that there was no exempt income in the relevant year. Applying the settled legal proposition that where no exempt income arises in a year there can be no disallowance under section 14A, the Tribunal held that the disallowance was not sustainable. [Paras 10]

Disallowance under section 14A set aside and the ground allowed.

Final Conclusion: The appeal is partly allowed: the Tribunal upheld in principle the CIT(A)'s identification of amounts subject to TDS and payment-year disallowance but remitted that issue to the CIT(A) for verification of subsequent payments and TDS deposits and for consequential relief; the disallowance under section 14A is set aside. Overall, the matter is partly allowed and partly restored for limited further consideration.

Estimation of profit on work in progress (WIP) vis a vis percentage completion method - Entitlement to WPI as developer and recognition of development fees on completion - Precedential effect of tribunal's earlier decision in assessee's own case - Disallowance under Section 14A read with Rule 8D and its restriction to exempt income

Estimation of profit on work in progress (WIP) vis a vis percentage completion method - Entitlement to WPI as developer and recognition of development fees on completion - Precedential effect of tribunal's earlier decision in assessee's own case - Deletion of addition made by assessing officer by estimating profit @8% of WIP - HELD THAT: - The Assessing Officer treated the WPI as belonging to the assessee and estimated profit at 8% by not following the assessee's consistent practice of recognizing development fees on completion. The Tribunal noted that a Coordinate Bench had earlier examined the question in the assessee's own cases and concluded that the assessee, as developer, was not entitled to the WPI and that receipts were correctly recognized on completion. The CIT(A) followed the ITAT's earlier finding and reproduced that reasoning. Having considered the same order of the Tribunal and the factual finding that the assessee consistently followed the mercantile system and did not treat WPI as its income, the Tribunal found no reason to deviate from the appellate authority and confirmed deletion of the addition. [Paras 5]

Addition of Rs. 5,08,94,301/- on account of estimation of profit @8% of WIP deleted; ground rejected.

Disallowance under Section 14A read with Rule 8D and its restriction to exempt income - Validity of restricting the disallowance under Section 14A r.w. Rule 8D to the extent of exempt income earned - HELD THAT: - The Assessing Officer disallowed expenses under Section 14A r.w. Rule 8D on the basis that the assessee's funds were a mix of interest bearing and interest free funds, arriving at a larger disallowance. The CIT(A) restricted the disallowance to the extent of exempt income earned, applying the law as laid down by the Supreme Court and the Jurisdictional High Court. The Tribunal agreed that earlier years showed the assessee had sufficient interest free funds in excess of investments yielding exempt income and that the law requires restriction of disallowance to the exempt income earned, and therefore found no infirmity in the CIT(A)'s order. [Paras 7]

Disallowance reduced to Rs. 5,12,548/- (i.e., restricted to exempt income earned); Revenue's ground dismissed.

Final Conclusion: Both grounds raised by the Revenue were dismissed: the Tribunal upheld deletion of the WIP based profit addition relying on the assessee's consistent accounting treatment and earlier tribunal precedent, and confirmed that the Section 14A r.w. Rule 8D disallowance was correctly restricted to the extent of exempt income.

Time limit for reassessment under section 153(2) - effect of section 144C(13) on time limits for eligible assessee - reopening of assessment under section 147 - assessment proceedings under section 144C for eligible assessee - non-resident assessee - reassessment barred by limitation

Time limit for reassessment under section 153(2) - assessment proceedings under section 144C for eligible assessee - non-resident assessee - reassessment barred by limitation - Final assessment order dated 12.01.2023 is time-barred and the reassessment is liable to be quashed. - HELD THAT: - The assessee is a non-resident and an "eligible assessee" under the section governing reference to the Dispute Resolution Panel (DRP). Section 144C prescribes a self-contained procedure where a draft assessment is served, the assessee may object to the DRP and the DRP must issue directions within a fixed period, and the Assessing Officer must then complete the assessment within the specified time after receipt of directions. However, section 153(2) fixes the outer time limit for making an order under section 147 as nine/twelve months (as applicable) from the end of the financial year in which the notice under section 148 was served. Section 153(4) extends time by a further twelve months only where a reference to the Transfer Pricing Officer is made; no such reference was made here. Therefore, except where a TPO reference applies, the extended twelve-month period is not available even for non-resident or 144C cases. Applying these provisions to the present facts, notice under section 148 was served on 30.03.2021, so the outer time-limit for completion of reassessment under section 153(2) expired on 31.03.2022. The final assessment order incorporating DRP directions was passed on 12.01.2023-after the expiry of the statutory period-hence the reassessment was barred by limitation. The Tribunal followed the precedent of the Hyderabad Bench in Farooq Ali (ITA No.104/Hyd/2023) which applies the same statutory scheme and reached the same conclusion, and accordingly quashed the reassessment order. [Paras 8, 9, 11]

Reassessment order passed on 12.01.2023 is barred by limitation and is quashed.

Final Conclusion: Appeal allowed; the reassessment framed by the Assessing Officer under section 147 and finalised under section 144 r.w.s. 144C(13) dated 12.01.2023 is quashed as time-barred under the time limits prescribed by section 153(2).

Foreign tax credit entitlement despite delayed filing of Form 67 - Procedural requirement held directory not mandatory - Rule 128(9) - filing Form 67 before due date is directory and does not mandate disallowance - Rectification under section 154 - challenge to refusal to grant relief - Primacy of DTAA/section 90/91 in allowing credit over procedural non-compliance

Foreign tax credit entitlement despite delayed filing of Form 67 - Rule 128(9) - filing Form 67 before due date is directory and does not mandate disallowance - Procedural requirement held directory not mandatory - Primacy of DTAA/section 90/91 in allowing credit over procedural non-compliance - Whether delay in filing Form 67 (filed after the due date for return but before completion of assessment) bars allowance of foreign tax credit claimed under section 90/91. - HELD THAT: - The Tribunal examined the statutory scheme, Rule 128(9) and coordinate-bench precedents which hold that filing Form 67 is a procedural/directory requirement and the rule does not prescribe denial of foreign tax credit for delay. Applying those decisions to the facts that Form 67 was filed on 25.01.2022 and before completion of assessment, the Tribunal held that non-compliance with the timing in Rule 128(9) does not extinguish the substantive right to claim foreign tax credit under section 90/91 or the applicable DTAA. The Tribunal therefore concluded that the claim for foreign tax credit could not be denied merely on the ground of delayed submission of Form 67 and allowed the ground accordingly. [Paras 9]

Delay in filing Form 67 did not preclude allowance of foreign tax credit; Form 67's timing requirement is directory and FTC must be allowed subject to verification.

Rectification under section 154 - challenge to refusal to grant relief - Procedural requirement held directory not mandatory - Whether the Commissioner (Appeals) erred in upholding the Assessing Officer's refusal to rectify the assessment under section 154 by denying the foreign tax credit on the ground of delayed Form 67. - HELD THAT: - The Tribunal considered the assessee's contention that the CIT(A) improperly rejected the section 154 rectification and reviewed the material and binding coordinate-bench precedents applying the directory/mandatory distinction to Rule 128(9). Finding that the CIT(A)'s confirmation of the AO's section 154 order rested solely on the delayed filing of Form 67, and that such delay was not a ground for denial of the substantive relief, the Tribunal held that the CIT(A) was in error. The Tribunal therefore allowed the grounds challenging the refusal of rectification and set aside the confirmation of the section 154 order to the extent it denied the foreign tax credit. [Paras 9, 10]

CIT(A) erred in upholding refusal of rectification under section 154; the section 154 order is not sustainable insofar as it denied foreign tax credit for delayed filing of Form 67.

Final Conclusion: Appeal allowed: the Tribunal held that filing Form 67 after the due date (but before completion of assessment) is a directory procedural requirement under Rule 128(9) and does not justify denial of foreign tax credit under section 90/91; the CIT(A)'s confirmation of the section 154 order refusing relief was set aside and the assessee's claim for foreign tax credit was allowed subject to verification.

Filing of Form 67 is a procedural/directory requirement - Substantive right to claim foreign tax credit - DTAA overrides conflicting domestic rules and procedural requirements - Foreign tax credit (FTC)

Filing of Form 67 is a procedural/directory requirement - Substantive right to claim foreign tax credit - Foreign tax credit (FTC) - Whether non-filing of Form 67 within the prescribed time extinguishes the assessee's right to claim foreign tax credit - HELD THAT: - The Tribunal held that filing of Form 67 is a procedural/directory requirement and not a mandatory condition which extinguishes the substantive right to claim foreign tax credit. Relying on coordinate Bench decisions, the Tribunal observed that mere delay in filing Form 67 cannot defeat the vested right under the tax treaty or the substantive entitlement to FTC. The Tribunal noted that disallowance of FTC solely on the ground of belated filing of Form 67 was not justified and that the authorities below erred in negating the claim without adjudicating the merits of the FTC claim. [Paras 9]

Non-compliance with the procedural requirement of filing Form 67 within the due date does not, by itself, justify disallowance of the foreign tax credit; the substantive claim survives.

DTAA overrides conflicting domestic rules and procedural requirements - Foreign tax credit (FTC) - Whether the matter should be remitted to the Assessing Officer for verification and decision after accepting Form 67 - HELD THAT: - The Tribunal applied the principle that where the DTAA confers the right to FTC, the DTAA and its beneficial provisions prevail over domestic procedural rules to the extent of any conflict. In view of the finding that Form 67 is directory, the Tribunal set aside the orders of the authorities below and directed that Form 67 be admitted/accepted. The matter was restored to the file of the Assessing Officer with directions to verify and decide the assessee's claim for foreign tax credit in accordance with law after admitting the Form 67. [Paras 10]

Matter remitted to the Assessing Officer to verify and decide the FTC claim after admitting/accepting Form 67, in accordance with law.

Final Conclusion: The Tribunal allowed the appeal for statistical purposes, holding that belated filing of Form 67 does not extinguish the substantive right to foreign tax credit and directing the Assessing Officer to admit the Form 67 and decide the FTC claim afresh in accordance with law.

Reopening of assessment - prima facie belief of escapement of income - accommodation entries / bogus accommodation entries - unexplained cash credits - computation of commission as percentage of bogus losses - preponderance of probabilities - opportunity for cross-examination and its effect

Reopening of assessment - prima facie belief of escapement of income - Validity of reassessment proceedings initiated under Section 147 for the assessment years under consideration - HELD THAT: - The Tribunal examined the reasons recorded for reopening for A.Y. 2010-11 and A.Y. 2011-12 and found that the Assessing Officer acted on investigation reports from the Investigation Wing (Calcutta and Raipur), survey proceedings and admissions recorded during survey which indicated that the assessee provided accommodation entries and received unaccounted commission and layered credits. The AO noted detailed modus operandi, identified parties, and observed that material relied upon was not available at original assessment despite due diligence. The Tribunal applied the settled principle that only a prima facie belief is required at the stage of recording reasons for reopening and that sufficiency or correctness of material is not to be gone into at that stage, relying on judicial precedents cited in the orders. On the totality of the material forming AO's belief, the Tribunal held that the AO had sufficient material to form a belief of escapement of income and therefore the initiation of proceedings under Section 147 was justified. [Paras 6, 7, 8, 12]

Reopening under Section 147 for the relevant years sustained and the assessee's challenge to reopening dismissed.

Accommodation entries / bogus accommodation entries - computation of commission as percentage of bogus losses - preponderance of probabilities - Taxability and quantum of unaccounted brokerage income arising from bogus accommodation loss entries - HELD THAT: - On merits the Tribunal accepted that the assessee systematically provided bogus loss accommodation on NMCE and earned unaccounted brokerage not reflected in books, having regard to survey statements, admissions of the director, findings of NMCE/FMC and investigation reports. While upholding the department's approach to tax such unaccounted brokerage, the Tribunal considered precedents and coordinate decisions that, in the absence of precise substantiation by the assessee, a reasonable percentage of the contrived losses may be taken as taxable commission. Applying those principles and in the interest of justice the Tribunal held that the unaccounted brokerage should be restricted to 0.25% of the bogus losses/credits, thereby reducing the AO/CIT(A)'s addition accordingly. [Paras 20, 21, 22, 23, 33]

Unaccounted brokerage income held taxable but limited to 0.25% of the bogus losses; grounds relating thereto partly allowed.

Unexplained cash credits - preponderance of probabilities - Sustenance of additions made as unexplained cash credits in respect of amounts received through layered banking transactions - HELD THAT: - The AO and CIT(A) treated amounts routed through multiple bank accounts and ultimately credited to the assessee as unexplained cash credits. The assessee's claim that such receipts were immediately paid to NMCE and hence not its income was not substantiated by any documentary proof. Given the assessee's established involvement in non genuine trades and absence of credible explanation or evidence that these receipts were not for the assessee, the Tribunal accepted the view reached by the AO/CIT(A) on the preponderance of probabilities and the circumstantial material, and found no infirmity warranting interference. [Paras 13, 35, 37, 38]

Additions treating the layered receipts as unexplained cash credits are upheld; related grounds dismissed.

Opportunity for cross-examination and its effect - preponderance of probabilities - Whether non availability of opportunity to cross examine third parties (including statement of the director) vitiates the proceedings or additions - HELD THAT: - The assessee argued that lack of cross examination of persons whose statements formed part of investigation vitiated the assessment. The Tribunal observed that the key statement relied upon (that of Shri Ram Awatar Dhoot) was of the assessee's principal director and not a third party and that he had not retracted his statement. Further, where surrounding circumstances, investigations, regulatory findings and multiple admissions point to systematic misuse of the exchange, the technical plea of non cross examination cannot nullify the probative force of the material. The Tribunal followed authorities holding that investigation reports and circumstantial evidence can be relied upon and that conclusions may be drawn on preponderance of probabilities. [Paras 24, 25, 26, 32]

Absence of cross examination did not vitiate the proceedings; the plea is rejected.

Final Conclusion: Reassessment proceedings under Section 147 for A.Y. 2010-11, 2011-12 and 2012-13 are sustained. Additions for unaccounted brokerage upheld but the taxable commission on bogus accommodation losses is restricted to 0.25% of such losses; additions on account of unexplained layered bank credits are confirmed. The assessee's contention regarding non cross examination is rejected. Overall, appeal is partly allowed.

Mandatory prior approval under Section 153D - validity of assessments under Section 153A read with Section 143(3) - mechanical approval - presumption from non-production of approval

Mandatory prior approval under Section 153D - mechanical approval - presumption from non-production of approval - Effect of non-production of the competent authority's approval under Section 153D on assessments completed under Section 153A read with Section 143(3). - HELD THAT: - The Tribunal held that prior approval of the competent authority under Section 153D is mandatory and must withstand scrutiny to show it was granted after due consideration of the assessment record and was not mechanical. The AO, despite repeated opportunities, failed to produce any copy or evidence of the approval; that failure gives rise to a presumption that no such approval was granted. In consequence, the assessments concluded under Section 153A read with Section 143(3) without the requisite Section 153D approval are void. The Tribunal allowed the assessee's additional ground (ground no. 5) on this legal question but permitted the Department to apply for recall of the order if it can produce evidence of the approval so as to permit fresh adjudication on merits. [Paras 7, 8, 9]

Additional ground allowing quashing of assessments for lack of Section 153D approval is sustained; assessee's appeals allowed and revenue's appeals dismissed, subject to recall if the Department proves existence and content of the approval.

Final Conclusion: The Tribunal concluded that assessments for the stated years, completed under Section 153A read with Section 143(3) without demonstrable prior approval under Section 153D, are void; appeals of the assessee are allowed and those of the revenue dismissed, while permitting the Department to seek recall upon producing evidence of the approval.

Allowability of provision for customer loyalty programmes as revenue deduction - application of Accounting Standard 29 and scientific basis for provisions - disallowance under section 14A read with Rule 8D-requirement of recorded satisfaction and nexus to exempt income - obligation to deduct tax at source and section 40(a)(i) consequences for payments to non residents for services rendered abroad - allowability of marked to market losses on foreign exchange derivatives as business expenditure - apportionment of common/corporate overheads and depreciation for computation of deduction under section 80IC - classification of UPS as integral part of computer for higher rate of depreciation - remand for factual verification of specific expenditure items

Allowability of provision for customer loyalty programmes as revenue deduction - application of Accounting Standard 29 and scientific basis for provisions - Provision made for customer loyalty programme is allowable as a deduction where created on a scientific basis - HELD THAT: - The Tribunal found that the assessee created the provision after analysing historical redemption trends and maintained systematic data showing opening provision, additions, utilization and closing balances; the method adopted-estimating redemption percentage from preceding quarters-amounted to a scientific method. The coordinate reasoning in Rotork Controls (as extracted by the Tribunal) supports deduction where systematic historical data establishes a present obligation and a reliable estimate can be made. The Tribunal also noted that excess provision, when reversed in subsequent years, is offered to tax, making the treatment revenue neutral. On these bases the provision disallowed by the AO and sustained by the CIT(A) was held allowable for the assessment years under appeal.

Provision for customer loyalty programme allowed for AYs 2009-10 to 2012-13.

Disallowance under section 14A read with Rule 8D-requirement of recorded satisfaction and nexus to exempt income - Disallowance under section 14A r.w. Rule 8D set aside for lack of recorded satisfaction and absence of enquiry into nexus/quantum - HELD THAT: - The Tribunal observed that the Assessing Officer had applied the mechanical formula under Rule 8D without recording any satisfaction or examining the nature of investments, the expenditure incurred or the quantum of exempt income; in such circumstances the Supreme Court decision in Maxopp Investments governs and precludes sustaining the disallowance. The CIT(A)'s confirmation was set aside and the matter was allowed in favour of the assessee for the years involved.

Disallowance under section 14A r.w. Rule 8D deleted for AYs 2009-10 to 2012-13.

Obligation to deduct tax at source and section 40(a)(i) consequences for payments to non residents for services rendered abroad - For AY 2009-10 no disallowance under section 40(a)(i) as it was impossible to deduct TDS given the services and payments related to operations outside India; for AYs 2011-12 and 2012-13 the matter is remitted for fresh consideration in light of statutory amendment - HELD THAT: - The Tribunal accepted that the payments in question for FY 2008-09 pertained to services rendered and utilised outside India (US/UK) and that at the relevant time the legal position did not impose an obligation on the assessee to deduct tax at source; making the assessee liable would be impossible and therefore no disallowance was sustainable for AY 2009-10. As to AYs 2011-12 and 2012-13, the Tribunal observed that statutory amendments (Explanation to s.9(2) as subsequently substituted) altered the legal position and facts require re examination; accordingly those years were set aside to the file of the AO for factual and legal scrutiny.

No disallowance for AY 2009-10; issue remanded to AO for AYs 2011-12 and 2012-13.

Remand for factual verification - Loss on closure of US boutique-slow moving inventory and winding up costs remitted to AO for factual verification - HELD THAT: - While the Tribunal acknowledged the assessee's contention that slow moving/non moving inventory and other winding up costs are in the nature of revenue expenditure, it noted that these factual aspects were not demonstrably established before the authorities. The Tribunal held that the principal character of such expenses may be revenue, but directed remand to the AO for verification of documentary and factual evidence before allowing the claimed amounts.

Issue remitted to AO for verification of slow moving inventory and winding up costs (statistical allowance pending factual verification) for AY 2009-10.

Apportionment of common/corporate overheads and depreciation for computation of deduction under section 80IC - Apportionment of corporate overheads on the basis of turnover for computing deduction under section 80IC sustained - HELD THAT: - The Tribunal followed its earlier decision in the assessee's own case: where facts are pari materia the method adopted by Revenue-allocation on the basis of turnover-was held to be reasonable and scientific; the Tribunal accordingly confirmed the reassessment of the deduction and dismissed the assessee's ground on apportionment of corporate overheads for AYs 2009-10 to 2012-13.

Allocation on turnover basis sustained and claim of deduction under section 80IC disallowed to the extent computed by Revenue for AYs 2009-10 to 2012-13.

Apportionment of common/corporate overheads and depreciation for computation of deduction under section 80IC - Allocation of depreciation on trademarks to units claiming section 80IC remitted to AO for re adjudication - HELD THAT: - The Tribunal noted that in an earlier, closely related assessment year it had remitted the trademark depreciation issue to the AO for fresh consideration on production of additional material; following that consistent view, the Tribunal set aside the assessment/CIT(A) order and remitted the matter back to the AO to re adjudicate apportionment of trademark depreciation in light of the material indicated by the assessee.

Depreciation on trademarks issue remitted to AO for AYs 2009-10 to 2012-13 for re adjudication (statistical allowance pending).

Allowability of marked to market losses on foreign exchange derivatives as business expenditure - Marked to market losses on forex derivatives and hedges allowed as business expenditure for AY 2012-13 - HELD THAT: - The Tribunal accepted that the assessee hedged foreign currency and interest exposures and that MTM losses arise from restatement as on the balance sheet date; relying on the principle in Woodward Governor (and subsequent Tribunal decisions applying it), the Tribunal held such MTM losses to be real for accounting/mercantile purposes and allowable under section 37, noting that gains/losses are accounted consistently and reversals/gains in other years are correspondingly dealt with.

Marked to market losses allowed for AY 2012-13.

Classification of UPS as integral part of computer for higher rate of depreciation - UPS treated as integral part of computer and eligible for depreciation at 60% - HELD THAT: - Following the binding decision of the jurisdictional High Court (CIT v. Cactus Imaging) and consistent treatment in the assessee's own case and by authorities, the Tribunal directed the AO to allow depreciation on UPS at the rate of 60% as part of the computer block, reversing the AO/CIT(A) classification as plant and machinery at a lower rate.

Depreciation on UPS allowed at 60% for AY 2012-13.

Final Conclusion: The Tribunal partly allowed the appeals. Deductions allowed include the provision for customer loyalty programmes (AYs 2009-10 to 2012-13), deletion of the section 14A/Rule 8D disallowance (AYs 2009-10 to 2012-13), allowance of MTM losses and UPS depreciation (AY 2012-13). No disallowance was sustained under section 40(a)(i) for AY 2009-10 while the TDS issue for AYs 2011-12 and 2012-13 and certain factual matters (closure loss items, and apportionment of trademark depreciation) were remitted to the Assessing Officer for fresh verification/re adjudication; apportionment of overheads for section 80IC was sustained against the assessee.

Effect of quashing an order under section 263 of the Income tax Act - infructuousness of consequential assessment proceedings - finality of Tribunal's order quashing revisional action

Effect of quashing an order under section 263 of the Income tax Act - infructuousness of consequential assessment proceedings - Whether the assessment order passed under section 143(3) read with section 263 becomes infructuous once the order passed under section 263 is quashed by the Tribunal. - HELD THAT: - The Tribunal noted that the assessment order impugned was rendered pursuant to and in consequence of the revisional order passed under section 263. The ld. PCIT's revisional order under section 263, which was the basis for reopening/revisional assessment, was quashed and set aside by the Tribunal. Once the foundational order under section 263 is quashed, any assessment order made in pursuance of that revisional order loses its operative basis and therefore becomes infructuous. The ld. CIT(A) correctly held that the impugned assessment order under section 143(3) read with section 263 had become infructuous in view of the Tribunal having allowed the assessee's appeal and quashed the section 263 order. On that legal basis, the Revenue's appeal challenging the CIT(A)'s conclusion was dismissed. [Paras 3, 4]

Revenue's appeal dismissed; assessment passed pursuant to a quashed section 263 order is infructuous.

Final Conclusion: The Tribunal's quashing of the revisional order under section 263 removed the basis of the consequential assessment; the appellate authority correctly held the assessment order to be infructuous and the Revenue's appeal is dismissed.

Summary order. Special Leave Petition dismissed; delay condoned and pending applications, if any, disposed of.

Relevancy and admissibility of statements recorded during investigation before a Gazetted Officer - Right of the person affected to cross-examine makers of statements in adjudication proceedings - Admissibility of electronic records (WhatsApp messages) and computer printouts under the procedural safeguards of Section 138C - Requirement of a certificate for electronic evidence pari materia to Section 65B of the Evidence Act - Imposition of personal penalty under Section 114(iii) of the Customs Act

Relevancy and admissibility of statements recorded during investigation before a Gazetted Officer - Right of the person affected to cross-examine makers of statements in adjudication proceedings - Statements recorded during investigation could not be treated as evidence in adjudication without first being examined-in-chief before the adjudicating authority and, if so admitted, being offered for cross-examination; absence of that procedure renders such statements inadmissible against the appellant. - HELD THAT: - The Tribunal held that Section 138B contemplates limited circumstances in which statements recorded before a Gazetted Officer may be treated as relevant and that, ordinarily, if the Revenue intends to rely on such statements in adjudication it must summon the makers, examine them-in-chief before the adjudicating authority and record reasons for admitting the statements in evidence. Only after examination-in-chief and admission in evidence does the right to cross-examine arise. The Tribunal relied on authorities emphasising that refusal to allow cross-examination where the impugned order is based on such statements is a breach of principles of natural justice and renders the order vitiated. Applying these principles to the case, because the adjudicating authority did not examine the crucial witnesses in chief nor afford an opportunity for cross-examination, their statements could not be relied upon as evidence against the appellant. [Paras 4]

Statements recorded during investigation were not admissible against the appellant in adjudication as the procedure under Section 138B was not followed.

Admissibility of electronic records (WhatsApp messages) and computer printouts under the procedural safeguards of Section 138C - Requirement of a certificate for electronic evidence pari materia to Section 65B of the Evidence Act - WhatsApp chats and other electronic material retrieved were not admissible as evidence because the procedural requirements of Section 138C were not complied with and no certificate establishing authenticity and chain of custody was produced. - HELD THAT: - The Tribunal treated Section 138C as pari materia to Section 65B of the Evidence Act and held that electronic records and computer printouts can be admitted only upon satisfaction of the conditions set out in the statute, including production of a certificate by a responsible person describing how the electronic record was produced and certifying the matters in subsection (2). The retrieval and use of chat messages without compliance with these conditions (including absence of the required certificate) deprived the electronic material of evidentiary value. The Tribunal applied earlier decisions to conclude that oral reliance on electronic records without statutory certification is impermissible and that the WhatsApp messages could not furnish admissible proof of the appellant's involvement. [Paras 4]

Electronic records (WhatsApp messages) were inadmissible for want of compliance with Section 138C and the attendant certification requirements.

Imposition of personal penalty under Section 114(iii) of the Customs Act - Reliance on inadmissible evidence for levy of penalty - The penalty of Rs. 25 Lakh imposed under Section 114(iii) could not be sustained because it was founded on statements and electronic messages that were inadmissible for lack of statutory procedure. - HELD THAT: - Having concluded that the principal evidentiary bases relied upon by the adjudicating authority - the statements recorded during investigation and the WhatsApp/electronic material - were inadmissible, the Tribunal found that the impugned order imposing personal penalty on the appellant suffered from incurable error. The appellant was not shown to have been involved in assessment or clearance duties that could directly implicate him, and the unreliability and procedural infirmities in the evidence precluded upholding the penalty. [Paras 4, 5]

The personal penalty under Section 114(iii) is legally unsustainable and is set aside.

Final Conclusion: The appeal is allowed: the adjudicating authority improperly relied on statements recorded during investigation and on electronic records without compliance with statutory procedural safeguards; those materials are inadmissible and the personal penalty under Section 114(iii) is set aside.

Eligibility for notification-based exemption - Condition of imports being free of cost - Recovery of duty on imported goods after re-export - Confiscation of goods not available for seizure - Penalty under Section 112(a) of the Customs Act, 1962 - Mis-declaration of goods

Eligibility for notification-based exemption - Recovery of duty on imported goods after re-export - Whether the Commissioner (Appeals) was justified in remanding for recovery of duty in respect of the two imports when the imported goods were subsequently subjected to job work and exported - HELD THAT: - The Tribunal found on the record, including shipping bills produced before it and admissions by the appellant, that the rough granite imported were subjected to job work and thereafter exported, and that the exports could be correlated with the relevant bills of entry. The appellant conceded that it was not eligible for Notification No.32/97 because the imported material was not free of cost. Notwithstanding ineligibility for the notification, the Tribunal held that once the imported goods have been exported after job work and the exports correlate with the imports, a demand for duty on those imports cannot be sustained. Accordingly, the remand direction by the Commissioner (Appeals) to the adjudicating authority to recover duty on the two bills of entry was set aside. [Paras 10, 12]

Remand for recovery of duty set aside; duty demand in respect of the exported goods cannot be upheld.

Confiscation of goods not available for seizure - Penalty under Section 112(a) of the Customs Act, 1962 - Mis-declaration of goods - Whether the Commissioner (Appeals) could direct confiscation and imposition of penalties when the imported goods have been exported, and whether the penalty earlier imposed by the original authority must be disturbed - HELD THAT: - The Tribunal applied the principle affirmed by the Supreme Court in UOI v. Sankar Pandi that goods which have been re-exported and are not available before the officer cannot be confiscated, and hence the Commissioner (Appeals)'s order directing confiscation and associated redemption fine or penalties could not be sustained. The Tribunal, however, noted that the original authority had earlier imposed a penalty under Section 112(a) for the import dated 08.04.2011 on the ground of absence of DGFT license, and that the appellant had not challenged that penalty; the adjudicating authority's order in respect of that penalty had therefore attained finality. For that reason the Tribunal upheld the earlier penalty imposed by the original authority while setting aside the confiscation direction. [Paras 11, 12]

Order directing confiscation set aside as goods are not available; earlier penalty under Section 112(a) upheld as final.

Final Conclusion: Impugned order of the Commissioner (Appeals) set aside; the original authority's order dated 01.02.2013 is restored - directions to recover duty and to confiscate the exported goods are quashed, while the penalty previously imposed under Section 112(a) is sustained.

Refund of Special Additional Duty (SAD) payable under section 3(5) of the Customs Tariff Act - applicability of a one year limitation prescribed by subordinate notification for refund claims - right to claim refund accrues on subsequent sale - limitation cannot commence before accrual of right - 'so far as may be' doctrine limiting applicability of Customs Act provisions to SAD - inapplicability of section 27 limitation to SAD refunds as interpreted by the jurisdictional High Court - read down doctrine - subordinate legislation cannot impose substantive limitation not enacted by Parliament

Refund of Special Additional Duty (SAD) payable under section 3(5) of the Customs Tariff Act - applicability of a one year limitation prescribed by subordinate notification for refund claims - right to claim refund accrues on subsequent sale - limitation cannot commence before accrual of right - inapplicability of section 27 limitation to SAD refunds as interpreted by the jurisdictional High Court - Whether the one year time limit introduced by the amending notification dated 01.08.2008 for filing refund claims of additional duty (SAD) is applicable to importers - HELD THAT: - The Tribunal held that refund of SAD levied under section 3(5) of the Customs Tariff Act is conditional upon a subsequent sale and the production of documents evidencing such sale and payment of sales tax/VAT; consequently the right to claim refund accrues only upon completion of that subsequent sale. The phrase "so far as may be" in section 3(8) means the Customs Act provisions apply only to the extent possible, and where the nature of SAD refunds makes a limitation calculable from date of payment impracticable, section 27's one year bar cannot be mechanically applied. The amending notification of 01.08.2008 which sought to impose a one year limitation from the date of payment is subordinate legislation attempting to prescribe a substantive period of limitation that effectively commences before the right to refund arises; such an imposition must be read down. The Tribunal accepted and followed the reasoning of the jurisdictional High Court in Sony India and subsequent Delhi High Court authorities which concluded that neither section 27 nor the amending notification can validly impose the one year limitation for SAD refunds, and that limitation, if to be imposed, must be introduced by primary legislation. The contrary view in CMS Infosystem (Bombay High Court) and certain CESTAT decisions was considered and rejected insofar as it conflicts with the Delhi High Court precedent and the Tribunal's obligation to follow the jurisdictional High Court's interpretation. [Paras 16, 17, 32, 44, 45]

The one year time limit in the amending notification dated 01.08.2008 is not applicable to claims for refund of SAD paid on import, and the amending notification must be read down to that extent.

Final Conclusion: The reference is answered in favour of importers: the one year limitation introduced by notification dated 01.08.2008 does not apply to refund claims of Special Additional Duty paid on import, and the Tribunal will proceed to decide the pending appeals in light of this conclusion.

Mis-declaration - customs valuation - re-assessment of transaction value - valuation under Rule 7 of Customs Valuation Rules, 2007 - payment of differential customs duty - payment under protest - admissions as evidence - provisional release - non-prosecution

Mis-declaration - customs valuation - re-assessment of transaction value - Validity of the reassessed value and differential duty demanded after discovery that goods imported were freezers though declared as display cabinets. - HELD THAT: - The Tribunal accepted the factual finding that the consignment declared as display cabinets in Bill of Entry No. 6606748 dated 01.09.2014 in fact contained freezers. The adjudicating authorities reassessed value of the goods and computed differential duty; the department applied the Customs Valuation Rules, 2007 and, in absence of contemporaneous imports of identical goods, proceeded under Rule 7. The appellant produced no evidence to show that the reassessed value or the method of valuation violated statutory provisions or was not the market value. The adjudicators therefore rightly rejected the declared value and upheld the reassessed valuation and differential duty. [Paras 5, 7, 8]

Reassessed value and differential customs duty upheld for lack of evidence challenging valuation; no infirmity found in the valuation process.

Payment of differential customs duty - payment under protest - admissions as evidence - Whether the differential duty paid by the appellant was a payment under protest, entitling the appellant to challenge the liability. - HELD THAT: - The appellant had deposited the differential duty shortly after examination. A subsequent letter asserted payment was made under pressure for early release, but did not deny that freezers (not declared display cabinets) were found, nor retract the earlier admission of mis-declaration. The Tribunal observed that the appellant had admitted mis-declaration in recorded statement and correspondence, and that admissions are best evidence under Section 52, Indian Evidence Act. In view of these admissions and absence of retraction or evidence to the contrary, the payment could not be treated as payment under protest so as to negate liability or permit a successful challenge to the valuation. [Paras 1, 6]

Payment is not a payment under protest; appellant's admissions preclude treating the deposit as negating liability or permitting challenge.

Non-prosecution - provisional release - Whether the appeal should be dismissed for non-prosecution and absence of the appellant despite adjournments. - HELD THAT: - The appellant failed to appear for final arguments despite several adjournments and a last opportunity warning, and did not comply with directions for provisional release proceedings. The departmental representative's submissions were heard and no material was produced by the appellant to rebut the findings. Given persistent absence and failure to pursue the appeal, the Tribunal exercised its authority to dismiss the appeal both on merits and for want of prosecution. [Paras 2, 3, 8, 9]

Appeal dismissed on merits and for want of prosecution due to appellant's non-appearance and failure to contest the valuation.

Final Conclusion: The Tribunal affirmed the reassessed valuation and differential duty calculated under the Customs Valuation Rules, 2007 (Rule 7) in view of admitted mis-declaration and absence of rebuttal evidence; held the payment not to be under protest; and dismissed the appeal on merits and for non-prosecution.

Maintainability of appeal under proviso to Section 129A(2) of the Customs Act - requirement to refer difference of opinion between Committee members to the Chief Commissioner - administrative decision-making by a Committee of Commissioners versus statutory mandate - scope of Tribunal's limited inquiry into authorization to institute an appeal

Maintainability of appeal under proviso to Section 129A(2) of the Customs Act - requirement to refer difference of opinion between Committee members to the Chief Commissioner - Whether the appeal was maintainable in the absence of a reference to the Chief Commissioner as required by the proviso to Section 129A(2). - HELD THAT: - The Tribunal examined the internal note sheets, the notarized affidavit of the Commissioner (Port) and the sequence of deliberations. The record showed that the Commissioner (Port) had on 09.02.2010 recorded acceptance of the Order-in-Appeal (stating the O-in-A "may be accepted") and thereafter, following exchanges and a change of office-holder, a decision to file the appeal was taken. The majority held that where one member of the Committee has recorded acceptance and the other member thereafter registers dissent, the proviso to Section 129A(2) required referral to the Principal Chief Commissioner/Chief Commissioner for decision. The majority treated the initial acceptance as having operative effect and found the subsequent backtracking and ultimate filing of the appeal without making the prescribed reference contrary to the statutory mandate. Consequently the appeal was held not maintainable for failure to comply with the proviso to Section 129A(2).

Appeal not maintainable for failure to refer the difference of opinion to the Chief Commissioner as required by the proviso to Section 129A(2); appeal dismissed.

Administrative decision-making by a Committee of Commissioners versus statutory mandate - scope of Tribunal's limited inquiry into authorization to institute an appeal - Extent to which the Tribunal may examine internal consultation and administrative notings of the Commissionerate when maintainability under Section 129A(2) is contested. - HELD THAT: - The Tribunal considered divergent views: one view (Member Technical, following precedents) emphasised that the Committee's decision is administrative and the Tribunal's role is limited to satisficing whether a decision to institute an appeal exists, not to probe internal deliberations; another view (Member Judicial and the majority) held that where the proviso to Section 129A(2) is engaged (a difference of opinion between Committee members), the statutory procedure is mandatory and the Tribunal may examine record evidence (including internal notings and the Commissioner's affidavit) to determine compliance. The majority concluded that, given the High Court's direction and the material placed on record, the Tribunal could look into the notings to ascertain whether the prescribed referral was made, and on that scrutiny found non-compliance.

Tribunal may examine the administrative notings and affidavit to determine compliance with the statutory proviso; where statutory procedure is not followed, the appeal's authorization can be invalidated.

Final Conclusion: On the majority view the Committee of Commissioners did not comply with the proviso to Section 129A(2) by failing to refer the difference of opinion to the Chief Commissioner; the appeal was therefore held not maintainable and dismissed.

Amendment of shipping bill - conversion of a free shipping bill into an incentive/benefit bearing shipping bill - power under Section 149 of the Customs Act, 1962 - documentary evidence existing at the time of export as basis for amendment - role of DGFT in regularisation/issuance of export incentive licences - Board circular fixing three months for amendment of shipping bill - procedural requirements and amendments construed to further substantive justice

Amendment of shipping bill - conversion of a free shipping bill into an incentive/benefit bearing shipping bill - documentary evidence existing at the time of export as basis for amendment - power under Section 149 of the Customs Act, 1962 - Request to amend the shipping bill code from '00' (no export incentive) to reflect entitlement to DFIA and VKGUY schemes was permissible and the rejection of such request was unsustainable. - HELD THAT: - The Tribunal found that the appellant had, at the time of export, claimed the DFIA and VKGUY schemes in the export documents and invoices and had furnished the DFIA file number; the incorrect code '00' was the result of an inadvertent mistake by the clearing agent. DGFT later regularised the licence and issued the DFIA/VKGUY certifications. Where documentary evidence in existence at the time of export supports the entitlement, amendment of the shipping bill is a procedural formality intended to give effect to substantive rights and may be allowed under the adjudicatory power conferred by Section 149. The adjudicating authority's refusal, which did not test or address the documentary material and subsequent DGFT regularisation, was therefore not sustainable. The Tribunal applied settled principles that procedures exist to further justice and that amendment is permissible when based on contemporaneous documentary evidence and confirmed by the licensing authority.

Amendment allowed; impugned order denying amendment set aside and appeal allowed.

Board circular fixing three months for amendment of shipping bill - procedural requirements and amendments construed to further substantive justice - The departmental Board circular prescribing a three month time limit for seeking amendment of shipping bills cannot be applied as a bar to deny conversion/amendment in cases where statutory power and documentary evidence justify amendment. - HELD THAT: - The Tribunal followed precedent holding that a departmental circular cannot supplant or curtail the statutory power to entertain amendments under Section 149 or operate as a fetter on the statutory scheme. Authorities including the jurisdictional High Court had held that the three month limit in the circular is not a permissible ground to refuse an amendment where documentary evidence and the licensing authority's actions demonstrate entitlement. Accordingly, the circular could not be used to reject the appellant's request in the present facts.

Circular time limit not applicable to deny the amendment; refusal on that basis is unjustified.

Final Conclusion: On rehearing the Tribunal allowed the appeal, holding that amendment of the shipping bill was permissible because the claim to DFIA and VKGUY incentives was evidenced in the export documents and later regularised by DGFT, and that the departmental circular prescribing a three month limit could not be invoked to deny the amendment; the impugned order refusing amendment was set aside.

Winding up under Section 433(c) and (f) of the Companies Act, 1956 - Just and equitable ground - Suspension of business - Misappropriation and fraud allegations - Compliance with statutory procedures for disposal of company property - Remand for fresh consideration and verification of material

Winding up under Section 433(c) and (f) of the Companies Act, 1956 - Suspension of business - Whether Section 433(c) of the Companies Act, 1956 is attracted - HELD THAT: - The Court examined the contention that the company had not commenced business within a year or had suspended business for a whole year. The company was incorporated in 1976 and business disruption and sales of assets occurred around 2008. Having regard to the chronology and the circumstances in which assets were sold to meet liabilities, the Court concluded that Section 433(c) is not attracted in the present case. [Paras 12]

Section 433(c) of the Companies Act, 1956 is not attracted.

Just and equitable ground - Misappropriation and fraud allegations - Compliance with statutory procedures for disposal of company property - Remand for fresh consideration and verification of material - Whether the petition discloses a just and equitable case for winding up under Section 433(f) and related factual contentions require adjudication - HELD THAT: - The Court observed that the appellant had pleaded specific allegations: closure of the cinema business, sale of immovable and movable properties at alleged throwaway prices, absence of shareholder meetings and non-compliance with statutory formalities (including alleged breaches of provisions concerning preparation/approval and filing of balance sheets and conduct of extraordinary general meetings), and possible misappropriation of sale proceeds. The respondents asserted that sales were authorised by an extraordinary general meeting to meet statutory liabilities, that sale proceeds have been applied to discharge dues and are reflected in bank deposits, and that the company intends to diversify under its memorandum. The learned Company Judge did not examine or verify material documents and explanations on these contentious factual matters. Given the existence of serious allegations bearing on fraud, mismanagement and compliance with statutory safeguards, the Court held that these matters require fresh consideration and factual verification before a final view on Section 433(f) can be taken. [Paras 15, 18, 19, 20, 21]

The impugned order is set aside and Company Petition No. 2 of 2013 is restored for fresh adjudication; issues concerning just and equitable winding up, alleged misappropriation, and statutory compliance are remanded for determination with directions to the parties to furnish relevant material and for the Company Judge to decide the petition within six months.

Final Conclusion: The High Court held that Section 433(c) is not attracted, but set aside the Company Judge's dismissal and restored Company Petition No. 2 of 2013 for fresh consideration on the just and equitable (Section 433(f)) ground and related factual and statutory compliance issues; the Company Judge is directed to decide the petition afresh within six months after parties furnish the required material.

Provisional attachment - proceeds of crime - onus of proof to explain legitimate source - presumption under the PMLA against the person - reason to believe and interconnected transactions

Provisional attachment - onus of proof to explain legitimate source - presumption under the PMLA against the person - Validity of attachment of three immovable properties standing in the name of Mrs. Mamta Jain - HELD THAT: - The Tribunal examined the appellant's claim of independent legitimate income and the ITRs placed on record. The assets were acquired between 2008-2011 whereas ITRs produced relate to 2013-2018; returns for the acquisition period were not filed. The declared incomes in the filed returns were ad hoc/rounded and not supported by regular books or scrutiny; therefore they were insufficient to discharge the burden cast on the appellant to show that the attached properties were not proceeds of crime. Given the web of interconnected transactions and the appellant's relation to the main accused, the Tribunal held that the statutory presumptions applied and the appellant failed to rebut them. [Paras 13, 14, 15]

Appeal dismissed; attachment of the three properties confirmed.

Provisional attachment - proceeds of crime - Validity of attachment of small bank balance in the account of Mrs. Bimla Wadhwa - HELD THAT: - The attached amount was meagre and the Directorate's case rested on a presumption that as a housewife residing with her son, the balance likely derived from her son's illicit earnings. The Tribunal found no material justifying attachment of such a small amount and that the attachment was based on conjecture rather than evidence; the appellant's circumstances and the minimal size of the balance rendered the attachment unjustified. [Paras 19, 20]

Appeal allowed; attachment of the bank amount set aside.

Provisional attachment - onus of proof to explain legitimate source - Validity of attachment of bank balances in the accounts of Mrs. Bhawna Wadhwa (director of Kamakhya Forex Pvt. Ltd.) - HELD THAT: - The appellant, a director of an entity implicated in the alleged scheme, failed to place specific evidence explaining the origin of the bank balances. General assertions and ITRs for later years did not explain transactions or balances relevant to the periods of suspected illicit remittances. The appellant did not discharge the statutory onus under the PMLA to show legitimacy of the funds. [Paras 23, 26, 27]

Appeal dismissed; attachments upheld.

Provisional attachment - interconnected transactions/ layering - onus of proof to explain legitimate source - Validity of attachment of bank balances in the accounts of Shri Sanjeev Wadhwa - HELD THAT: - Material on record showed that the appellant had founded/controlled entities central to the alleged remittance operation and witness statements implicated him in delivering cash and directing remittances. The appellant did not produce bank statements or cogent evidence explaining the balances. On this basis the Tribunal concluded the appellant failed to rebut the statutory presumption and to discharge the onus to show legitimate source. [Paras 33, 34, 35]

Appeal dismissed; attachments upheld.

Provisional attachment - onus of proof to explain legitimate source - Validity of attachment of HUF bank balances in the name of Gurdeep Kumar Gujral & Sons - HELD THAT: - The Karta of the HUF was one of the accused and statements linked him to the operations during the relevant periods (2006-2010 and 2012-2014). The HUF relied on ITRs for later years which did not illuminate the transactions in the attached accounts. The Tribunal found the appellant failed to present specific evidence to show legitimate sources for the bank balances and thus did not discharge the burden under the Act. [Paras 37, 39, 40]

Appeal dismissed; attachments upheld.

Provisional attachment - onus of proof to explain legitimate source - Validity of attachment of FDRs and bank balances in the name of Mrs. Sushila Gujral - HELD THAT: - Although the appellant produced ITRs for 2014-2018, the initial investments in the FDRs dated 2008 were substantial and were not explained by the appellant. The returns for later years did not account for the source of the initial sums invested. Consequently the appellant failed to satisfy the onus to explain the origins of the invested amounts. [Paras 44, 45, 46]

Appeal dismissed; attachments upheld.

Provisional attachment - presumption under the PMLA against the person - onus of proof to explain legitimate source - Validity of attachment of bank balances in the name of Mrs. Seema Gujral - HELD THAT: - The appellant produced ITRs showing substantial declared income for recent years and presented evidence sufficient to rebut a mere presumption that her balances derived from her husband. The Directorate's response did not advance convincing material tying her funds to the alleged proceeds. On this basis the Tribunal held that the appellant had discharged the burden to rebut the presumption under the Act. [Paras 50]

Appeal allowed; attachment of the two bank balances set aside.

Provisional attachment - onus of proof to explain legitimate source - Validity of attachment of four bank amounts in the name of Mrs. Kajal Arora - HELD THAT: - Although sale consideration of a property was reflected in the ITR, the appellant claimed to have reinvested nearly the entire sale proceeds in acquiring another property and claimed exemption from capital gains; only a small residual amount remained for investment in FDRs. The Tribunal found that the available capital gains were insufficient to account for the FDRs and that the appellant had not adequately explained the sources of the attached amounts. [Paras 54, 55, 56]

Appeal dismissed; attachments upheld.

Provisional attachment - presumptive taxation and evidentiary weight of ITRs - onus of proof to explain legitimate source - Validity of attachment of FD and bank balance in the name of Parvesh Kumar Gujral & Sons (HUF) - HELD THAT: - The HUF's ITR under Section 44AD disclosed presumptive income but did not provide convincing evidence explaining the bank balances or FD. Given interconnected transactions in the group and the appellant HUF's connection to accused directors, the Tribunal concluded that the appellants failed to produce cogent evidence to discharge the statutory burden to explain the sources. [Paras 57, 60]

Appeal dismissed; attachments upheld.

Provisional attachment - small-value attachment - Validity of attachment of a small FD in the name of Ms. Soumya Jain (minor) - HELD THAT: - The appellant, a minor, explained the FD as a small deposit by her mother from savings and gifts; the Directorate did not dispute the source. The amount was minor and the Tribunal found no justification for attachment in the absence of any specific challenge to the explanation. [Paras 62, 63]

Appeal allowed; attachment of the FD set aside.

Provisional attachment - small-value attachment - evidence of reinvestment and gifts - Validity of attachment of multiple small FDRs and balances in the name of Mrs. Swaran Lata Jain - HELD THAT: - The appellant, an elderly person, produced explanations that the amounts represented savings, gifts and reinvested matured FDRs over many years and had been an income-tax assessee for decades. The Directorate did not specifically contest two FDRs identified by the appellant as hers. Considering the relatively small aggregate amount and absence of targeted rebuttal by the Directorate, the Tribunal held there was no justification for attachment. [Paras 66, 68]

Appeal allowed; attachment set aside.

Provisional attachment - interconnected transactions/ premises used by accused - Validity of attachment of bank balance and FDR in the name of Swaran Overseas Pvt. Ltd. - HELD THAT: - Although the company asserted regular business activity and that the FDR was pledged as security for issuance of travel cards, the impugned order and material indicated that principal accused persons ran the company and used its premises for illegal activities. Given the company's operational nexus with accused persons and the material on record, the Tribunal found sufficient justification for attachment. [Paras 69, 71, 72]

Appeal dismissed; attachments upheld.

Provisional attachment - small-value attachment - Validity of attachment of small bank balances in the name of Mrs. Vinita Jain - HELD THAT: - The appellant explained the balances as small savings and reinvested FDRs arising from gifts and household savings since marriage; the Directorate relied on a broad association with her husband but put forward no specific material showing the funds were proceeds of crime. Given the minor amounts and lack of targeted rebuttal, the Tribunal found attachment unjustified. [Paras 74, 76]

Appeal allowed; attachments set aside.

Final Conclusion: The Tribunal disposed of thirteen appeals: in several matters involving small balances or where claimants produced unrebutted explanations (Mrs. Bimla Wadhwa, Mrs. Seema Gujral, Ms. Soumya Jain, Mrs. Swaran Lata Jain, Mrs. Vinita Jain) the attachments were set aside; in other matters where appellants failed to discharge the statutory onus to explain sources of funds or were shown to be connected with entities and persons central to the alleged remittance scheme, the provisional attachments were confirmed. No costs were ordered.

Jurisdiction to issue show cause notice - power of Directorate General of GST Intelligence officers as Central Excise Officers - scope of Section 73 of the Finance Act 1994 (show cause notice for service tax) - extended period of limitation requires jurisdictional facts of fraud/collusion/wilful misstatement/suppression - maintainability of writ petition against a show cause notice - best judgment assessment under Section 72 of the Finance Act 1994

Jurisdiction to issue show cause notice - power of Directorate General of GST Intelligence officers as Central Excise Officers - scope of Section 73 of the Finance Act 1994 (show cause notice for service tax) - Validity of the show cause notices issued by the Additional Director General, DGGI (now DGGI/DG-GSTI) under Chapter V of the Finance Act 1994. - HELD THAT: - The Court examined the statutory scheme and the notifications/circulars relied upon by the Revenue which appoint officers of the Directorate General of Central Excise Intelligence (now DGGI/DG-GSTI) as Central Excise Officers and vest them with powers under Chapter V of the Finance Act 1994. The Court found that Notification No. 22/2014-ST and the succeeding CBIC notifications and Circulars (including Notification No. 30/2005-ST as amended and Circulars Nos. 994/01/2015 and 1000/7/2015) demonstrate that officers of the Directorate are authorised to issue show cause notices and that final adjudication is to be effected by the jurisdictional Central GST and Central Excise Commissioner in accordance with the assigned limits and guidelines. The Court distinguished the Canon India (Customs) reasoning as not pari materia to the Finance Act scheme and therefore not decisive here. On a conjoint reading of the notifications and circulars, the issuance of the impugned show cause notices by the Additional Director General of DGGI was held not to suffer from jurisdictional infirmity. [Paras 28]

The show cause notices issued by the Additional Director General, DGGI/DG-GSTI are not wholly without jurisdiction; the notices are validly issued under the Finance Act 1994 read with the relevant notifications and circulars.

Extended period of limitation requires jurisdictional facts of fraud/collusion/wilful misstatement/suppression - best judgment assessment under Section 72 of the Finance Act 1994 - Whether the extended period of limitation can be invoked and whether the extended period is attracted in the present case. - HELD THAT: - The Court observed that invocation of the extended period is a mixed question of fact and law dependent on the existence of jurisdictional facts (such as fraud, collusion, wilful misstatement or suppression) and that such questions require consideration of the petitioner's response and evidence. The High Court refrained from making a final determination on the availability of the extended period or on the correctness of the proposed best-judgment assessment under Section 72, noting that these matters are to be decided after adjudication of the show cause notices on the basis of factual inquiry and submissions. [Paras 29]

Invocation of the extended period of limitation is not decided; the question is left to be adjudicated in the course of proceedings on the show cause notices.

Maintainability of writ petition against a show cause notice - Whether the writ petitions challenging the show cause notices should be entertained at this threshold stage. - HELD THAT: - Applying established principles governing interference with show cause notices, the Court recalled that writ jurisdiction under Article 226 ordinarily should not be exercised to quash or stay a show cause notice unless it is wholly without jurisdiction, violative of law, grounds of natural justice, or involves a vires challenge. The Court found no such exceptional circumstance on the record: jurisdictional objections to issuance by DGGI were rejected and factual disputes (including limitation and valuation issues) remained to be examined during adjudication. Accordingly, the Court held that it should not interdict the departmental proceedings at the preliminary stage and that the petitioner should pursue replies and the statutory adjudicatory remedies before challenging any final order. [Paras 30, 31]

The writ petitions are not maintainable to pre-empt the adjudication; the Court declined to interfere with the ongoing show cause proceedings.

Final Conclusion: Both writ petitions are dismissed. The High Court declined to quash or stay the impugned show cause notices, leaving questions of extended limitation, valuation and any best-judgment assessment to be decided in the statutory adjudication; the petitioner is directed to file/reply to the show cause notices within four weeks and pursue remedies available under Chapter V of the Finance Act 1994.

Renting of Immovable Property Service - Service Tax liability on rent of vacant land prior to 01.07.2010 - Exclusion of renting of residential buildings from taxable services under Section 65(105)(zzzz) of the Finance Act, 1994 - Recalculation and adjustment of service tax paid - De novo adjudication and remand for reconsideration of evidence and computations

Service Tax liability on rent of vacant land prior to 01.07.2010 - Exclusion of renting of residential buildings from taxable services under Section 65(105)(zzzz) of the Finance Act, 1994 - Recalculation and adjustment of service tax paid - Impugned demand set aside and matter remitted to the Adjudicating Authority for fresh adjudication on all points including verification of the appellant's computations and supporting documents relating to rental receipts. - HELD THAT: - Tribunal found that the Principal Commissioner did not consider the detailed calculations and documentary support furnished by the appellant showing (a) amounts claimed as rent from lease of vacant land which, for periods prior to 01.07.2010, were asserted to be non-taxable, and (b) amounts relating to renting of buildings for residential purposes which the appellant contended were excluded from the ambit of Renting of Immovable Property Service. The adjudicating authority confirmed a demand without addressing these material submissions and without reconciling the service tax payments actually made by the appellant against the demand. The Revenue did not oppose remand. In these circumstances the Tribunal concluded that the matter requires de novo consideration: the Adjudicating Authority is to reconsider the claim, recalculate tax liability and adjustments in the light of the appellant's audited accounts and supporting documents, and pass a fresh reasoned order on all points. [Paras 5]

Impugned order set aside; matter remanded to the Adjudicating Authority for fresh adjudication and recalculation of service tax liability and adjustments.

Final Conclusion: The Tribunal set aside the impugned Order in Original and remitted the matter to the Adjudicating Authority for de novo consideration of the appellant's computations, supporting documents and adjustment of service tax payments for the period F.Y. -2007-08 to F.Y. -2011-12.

Business auxiliary service - reverse charge mechanism - sale of space for advertisement - print media exclusion - trade catalogue - vocational training exemption

Business auxiliary service - reverse charge mechanism - Incentives received from Asset Management Companies for promotion and marketing of mutual funds are services in relation to distribution of mutual fund and the service recipient (AMC) is liable to pay service tax under the reverse charge mechanism; the appellant is not liable. - HELD THAT: - The Tribunal construed Rule 2(1)(d)(vi) of the Service Tax Rules to mean that where a business auxiliary service is provided in relation to distribution of mutual funds by a distributor or agent, the mutual fund or asset management company receiving such service is the person liable to pay service tax. The distinction urged by revenue between normal commission and additional incentives for promotion/marketing was rejected: the Rule makes no such differentiation and covers any business auxiliary service in relation to distribution of mutual funds. Applying Section 68(2) of the Finance Act read with Rule 2(1)(d)(vi), the additional incentives claimed to have been received by the appellant fall within the same statutory rubric and therefore attract liability on the recipient (AMC) under reverse charge, not on the appellant as service provider. [Paras 4]

Demand of service tax on incentives for promotion and marketing of mutual funds is unsustainable against the appellant; liability is on the AMCs under reverse charge.

Sale of space for advertisement - print media exclusion - trade catalogue - Advertisement revenues from sale of space in the appellant's in house magazine 'FUNDS WATCH' are excluded from service tax as sale of space in print media and the publication is not a trade catalogue. - HELD THAT: - The Tribunal examined clause (zzzm) of the definition of 'taxable service' and its Explanation 2 excluding sale of space for advertisement in print media from levy. It considered the content of 'FUNDS WATCH' and found it to be a privately circulated magazine containing news and details of various mutual funds, not a trade catalogue designed to present a line of products to facilitate ordering. Relying on the statutory exclusion for print media (as defined), the Tribunal held that sale of advertising space in the magazine falls outside the taxable ambit under the 'sale of space or time for advertisement' category and the demand is unsustainable. [Paras 4]

Demand of service tax on sale of advertisement space in the appellant's magazine is not sustainable as the publication is excluded as print media and is not a trade catalogue.

Vocational training exemption - Training provided by the appellant to enrolled sub distributors is vocational training and therefore exempt from service tax under Notification No. 24/2004 ST. - HELD THAT: - The Tribunal found that the training programmes were designed to enable sub distributors to carry out the profession/job of selling mutual funds and thus constitute vocational training. Applying Notification No. 24/2004 ST, which exempts vocational training, the Tribunal held that service tax cannot be demanded under the head of commercial training or coaching service. The Tribunal noted supporting precedents but decided the issue on the exemption's applicability to the facts. [Paras 4]

Demand of service tax on training of sub distributors is unsustainable as the training qualifies as vocational training and is exempt.

Final Conclusion: All demands confirmed in the adjudication order-on incentives for promotion/marketing, on sale of advertising space in the in house magazine, and on training of sub distributors-are set aside and the appeal is allowed.

Classification of composite contracts as Works Contract Service - Commercial or Industrial Construction Service vs Works Contract Service - Composite contract indivisibility - Material component evidenced by payment of sales tax - Reliance on binding precedents for classification

Classification of composite contracts as Works Contract Service - Commercial or Industrial Construction Service vs Works Contract Service - Composite contract indivisibility - Material component evidenced by payment of sales tax - Whether the services rendered in execution of the Cuisine Centre-cum-Job Training Institute contract fall within 'Commercial or Industrial Construction Service' or are composite works contract services taxable as 'Works Contract Service', and whether the demand under the former head is sustainable. - HELD THAT: - The Tribunal found on the record that the appellant's contract was composite in nature involving both provision of services and supply of materials, a fact supported by the PWD work register and the payment of sales tax on materials used. The appellant supplied materials such as bricks, cement, plaster, windows, pipes and paint as part of the execution. Applying settled legal principles and the precedents relied upon by the appellant, the Tribunal held that indivisible composite construction contracts are classifiable under the taxable category of 'Works Contract Service' and cannot be exigible to service tax under 'Commercial or Industrial Construction Service'. The Tribunal also followed the reasoning in similar decisions, including the Prime Developers decision and the applicable ratio regarding the post-1.6.2007 classification, to conclude that demands framed under the head of Commercial or Industrial Construction Service for composite contracts are not sustainable where the contract is indivisible and the material component is evidenced by payment of sales tax. [Paras 6, 7, 8, 10]

Demand of service tax and penalty confirmed under 'Commercial or Industrial Construction Service' is not sustainable for the composite works contract in question; the impugned order is set aside and the appeal is allowed with consequential relief as per law.

Final Conclusion: The Tribunal allowed the appeal, holding that the impugned demand and penalty framed under 'Commercial or Industrial Construction Service' could not be sustained for the indivisible composite works contract which is classifiable as 'Works Contract Service', and accordingly set aside the Commissioner (Appeals) order with consequential relief.

Appeal would lie to the Customs, Excise and Service Tax Appellate Tribunal against an order passed under section 142(9)(b) of the CGST Act, 2017 - application of existing law for disposal of refund claims under section 142 - continuation of appellate provisions under transitional provisions

Appeal would lie to the Customs, Excise and Service Tax Appellate Tribunal against an order passed under section 142(9)(b) of the CGST Act, 2017 - application of existing law for disposal of refund claims under section 142 - Tribunal's jurisdiction to entertain an appeal against an order passed under section 142(9)(b) of the CGST Act, 2017. - HELD THAT: - The Tribunal applied the reasoning of its Larger Bench decision in Bosch Electrical to conclude that sub-section (9)(b) of section 142 requires disposal of claims in accordance with the existing law and, therefore, the appellate regime under the existing law continues to operate. Both section 142(3) and section 142(9)(b) direct application of the existing law (Chapter V of the Finance Act and the Central Excise Act) for refund of CENVAT credit, so the continuity of appellate provisions and proceedings preserved by the transitional provisions means an appeal lies to the Tribunal against orders passed under section 142(9)(b). The Tribunal accordingly answered the reference in identical terms to Bosch Electrical and directed placement of the papers before the appropriate Bench to decide the appeal on merits. [Paras 11, 12]

An appeal lies to the Customs, Excise and Service Tax Appellate Tribunal against an order passed under section 142(9)(b) of the CGST Act, 2017.

Final Conclusion: The reference is answered following the Larger Bench in Bosch Electrical: orders under section 142(9)(b) are appealable to the Customs, Excise & Service Tax Appellate Tribunal; the appeal is to be placed before the appropriate Bench for adjudication on merits.

Remand for reconsideration - limited remand - final decision on merits - decision vitiated by non-compliance with remand - fresh adjudication by appellate forum

Remand for reconsideration - limited remand - Nature and scope of the Tribunal's order dated 09.07.2007 bringing the matter back for reconsideration. - HELD THAT: - The Tribunal's order dated 09.07.2007 expressly remitted the matter to the adjudicating authority for reconsideration and contained no restrictive conditions or 'strings' confining the scope of that remand. The High Court finds the remand language to be unambiguous and therefore treats the remand as a full remand for reconsideration rather than a limited or purpose-specific remand. The fact that the Tribunal later proceeded to address issues on merits does not convert the original remand into a limited remand or validate conclusions reached where the remand conditions were not complied with. [Paras 8, 9]

The 09.07.2007 order operated as an unrestricted remand for reconsideration and not as a limited remand.

Final decision on merits - decision vitiated by non-compliance with remand - fresh adjudication by appellate forum - Validity of the impugned order of the Tribunal dated 20.09.2017 and the appropriate remedy. - HELD THAT: - The Court concluded that the impugned order could not stand because the Tribunal's conclusions were influenced by the fact that the remand directions had not been complied with. Consequently, the Court set aside the impugned order and remitted the matter to the Tribunal to decide the appeal afresh. The Tribunal is directed not to be influenced by observations in the impugned order and to proceed de novo in accordance with law, with an exhortation to dispose of the matter expeditiously given the age of the inspection. [Paras 9, 10, 11, 12]

Impugned order set aside; matter remitted to the Tribunal for fresh decision uninfluenced by prior observations.

Final Conclusion: The appeal is allowed; the impugned order is set aside and the matter is remitted to the Tribunal to decide the appeal afresh uninfluenced by earlier observations, with a request to dispose of the appeal expeditiously.

Cash refund of CVD and SAD under Section 142(3) of the CGST Act, 2017 - transitional refund of CENVAT credit where credit is no longer available under GST - application of Section 142(6)(a) and Section 142(8)(b) for disposal of transitional refund claims - availability of CENVAT credit under the Cenvat Credit Rules, 2004 for CVD/SAD on imported capital goods - Doctrine of Necessity in resolving transitional anomalies

Cash refund of CVD and SAD under Section 142(3) of the CGST Act, 2017 - transitional refund of CENVAT credit where credit is no longer available under GST - availability of CENVAT credit under the Cenvat Credit Rules, 2004 for CVD/SAD on imported capital goods - Doctrine of Necessity in resolving transitional anomalies - Entitlement to cash refund of CVD and SAD paid on duty free imports regularised for non fulfilment of EPCG export obligation where CENVAT credit could not be availed under the GST regime - HELD THAT: - The Tribunal held that where duties (CVD and SAD) in respect of imports made prior to 30.06.2017 were subsequently paid (in regularisation for non fulfilment of EPCG obligations) but CENVAT credit cannot be availed under the GST law, the claim falls within the transitional scheme of Section 142 of the CGST Act and is refundable in cash. The authorities below erred in rejecting the refund by treating Rule 5 of the Cenvat Credit Rules, 2004 or filing of ER 1/TRAN 1 as the only available remedies; those routes were inapplicable where payment and eligibility for credit arose only after the prescribed cut off and credit is not utilisable under GST. The Tribunal relied on the legislative mandate in Section 142(3) that refund claims of CENVAT credit, duty or tax paid under the existing law shall be disposed of in accordance with existing law and any amount accruing shall be paid in cash, read with Section 142(6)(a) and (8)(b) where applicable. The decision was further supported by precedents of judicial and quasi judicial authorities and the invocation of the Doctrine of Necessity to address transitional anomalies, concluding that cash refund is the appropriate remedy when credit cannot be availed under the new regime. [Paras 16, 20, 21]

The appellant is entitled to cash refund of the CVD and SAD paid and the impugned orders rejecting the refund are set aside; the appeal is allowed with consequential reliefs as per law.

Final Conclusion: The Tribunal allowed the appeal, holding that cash refund of CVD and SAD paid in regularisation of EPCG imports (made prior to 30.06.2017) is payable under the transitional provisions of Section 142 of the CGST Act where CENVAT credit cannot be availed under GST; the orders below rejecting the refund were set aside.

Limitation / time bar - suppression of facts with intent to evade payment of duty - classification of goods - re quantification of duty - penalty

Limitation / time bar - suppression of facts with intent to evade payment of duty - Validity of extended period demand raised for July 2013 to July 2016 on limitation grounds - HELD THAT: - The Tribunal examined the correspondence filed by the appellant notifying the department of classification under Chapter 56.03 (letter dated 12.08.2009) and of intention to avail exemption with effect from 01.07.2013 (letter dated 28.06.2013), and noted that these facts were available on record during EA 3 audit (audit report dated 10.11.2014). There was no finding of concealment or suppression with intent to evade duty given prior audits and repeated disclosures to the department. Reliance placed on judicial authority in the judgment (including decisions of the High Courts and the Supreme Court referred to in the record) supports the proposition that when material facts are disclosed to the department and the department is aware of them, a demand for an extended period cannot be sustained on the ground of suppression. Applying these principles to the facts, the Tribunal held that the demand for the extended period is time barred. [Paras 6, 7]

Demand for the extended period July 2013 to July 2016 is set aside as barred by limitation for want of suppression of facts with intent to evade duty.

Penalty - re quantification of duty - Consequences as to penalty and adjustment/refund following setting aside of extended period demand - HELD THAT: - The Tribunal held that, for the same reason that the extended period demand was unsustainable, the corresponding penalty for the normal period is also required to be set aside. The department is permitted to re quantify the demand for the normal period; any amount already paid by the appellant is to be adjusted against the re quantified demand and any balance refundable on filing appropriate refund application, in accordance with law. [Paras 7]

Penalty corresponding to the duty for the normal period is set aside; department may re quantify the demand for the normal period and adjust or refund amounts as applicable.

Classification of goods - Classification of "KARA" wet wipes (whether under Chapter 5603.9200 or Chapter 3307) left open for adjudication - HELD THAT: - Counsel for the appellant conceded that the appeal may be decided on limitation alone, keeping the classification issue open. The Tribunal, having disposed of the appeal on limitation grounds, expressly left the question of classification undecided and open for consideration in appropriate proceedings. [Paras 6, 8]

Issue of classification is left open; impugned order modified only to the extent indicated on limitation and penalty, appeal partly allowed.

Final Conclusion: The Tribunal set aside the demand for the extended period July 2013 to July 2016 as time barred for want of suppression, directed that the corresponding penalty for the normal period be set aside, permitted re quantification and adjustment/refund for the normal period, and left the question of classification of the wet wipes undecided.

Refund of unutilised Cenvat Credit under Section 11B of the Central Excise Act, 1944 - relevant date for refund - Explanation B (clause (f)) to Section 11B: date of payment / date of debiting credit account - limitation for refund - one year from the relevant date - electronic filing of revised excise return under Section 142(9)(b) of the CGST Act, 2017 read with Rule 12(5) of the Central Excise Rules, 2002 - whether mandatory - entitlement to refund where revised return filed manually due to technical glitches

Refund of unutilised Cenvat Credit under Section 11B of the Central Excise Act, 1944 - relevant date for refund - Explanation B (clause (f)) to Section 11B: date of payment / date of debiting credit account - limitation for refund - one year from the relevant date - electronic filing of revised excise return under Section 142(9)(b) of the CGST Act, 2017 read with Rule 12(5) of the Central Excise Rules, 2002 - whether mandatory - entitlement to refund where revised return filed manually due to technical glitches - Appellant entitled to refund of the claimed unutilised Cenvat Credit under Section 11B of the Central Excise Act, 1944 read with relevant provisions of the CGST Act, 2017. - HELD THAT: - The Tribunal found that the refund claim arose only after the appellant debited the electronic credit ledger (debit entry dated 22.10.2018) and, therefore, the relevant date for limitation is the date of debiting the account as contemplated by Explanation B (clause (f)) to Section 11B; the refund claim was filed within one year of that relevant date and hence not time barred. Although the adjudicating authority accepted entitlement to Cenvat Credit, it denied refund solely on the ground that the revised excise return was not filed electronically. The Tribunal held that Section 142(9)(b) read with Rule 12(5) does not make electronic filing of the revised return an absolute, jurisdictional precondition for grant of refund where the substantive conditions for refund are otherwise satisfied. The Tribunal noted the prevalence of technical glitches during the relevant period and found no basis to conclude that the appellant intentionally avoided electronic filing; the manual filing acknowledged by the department and the subsequent debit of the credit ledger satisfied the necessary preconditions for refund. In consequence, the Commissioner (Appeals)'s finding on limitation was set aside and the denial of refund for non electronic filing was rejected, the impugned order being unsustainable in law. [Paras 8, 9, 10, 11]

Appeal allowed; impugned order set aside and appellant entitled to consequential relief including grant of the refund as per law.

Final Conclusion: The Tribunal allowed the appellant's appeal, set aside the impugned order, and directed that the refund claim be considered allowable: the relevant date for limitation was the date of debiting the credit ledger, the refund claim was within time, and non filing of the revised excise return electronically did not bar refund where the substantive conditions were met and manual filing had been acknowledged.

Assessable value - transaction value - additional consideration - Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - Section 4(1)(a) of the Central Excise Act, 1944 - principal-to-principal sale - trade discount - factory gate valuation

Additional consideration - Rule 6 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - transaction value - Whether the money value of space and manpower provided by bulk buyers (license fee/other benefits) constitutes additional consideration flowing from the buyer and is includible in the assessable value under Rule 6 - HELD THAT: - The Tribunal examined the agreements and commercial structure of supplies to bulk buyers and applied Section 4(1)(a) and Rule 6. It accepted that where a sale is on principal-to-principal basis and the price is the sole consideration at the time and place of removal, the transaction value fixed by the parties governs assessable value. The adjudicating authority had not established any money value of the purported free space/manpower supplied by the bulk buyers; instead it treated the difference between retail and bulk prices as an imputable money value. Following earlier decisions of this Tribunal and the Supreme Court, the Bench held that absent evidence of additional consideration flowing from the buyer (directly or indirectly), Rule 6 cannot be invoked to add notional values. Trade discounts or commercially negotiated lower transaction prices to bulk purchasers are permissible deductions where the parties transact at arm's length, and the department failed to demonstrate that an additional consideration flowed from the buyers to the appellant.

The money value of space and manpower provided by bulk buyers was not held to be additional consideration for inclusion under Rule 6; the assessable value as determined by the transaction value was upheld and the demand on this ground is unsustainable.

Factory gate valuation - principal-to-principal sale - assessable value - Whether expenses incurred by the bulk buyer at its retail outlets (petrol pumps) can be included in the assessable value computed at the point of removal (factory gate) - HELD THAT: - The Tribunal held that the sale to bulk buyers was completed at the point of clearance (factory gate). Expenses incurred subsequently by the bulk buyers for retailing from their outlets cannot be treated as part of the assessable value determined at the factory gate. The petrol pumps of BPCL/HPCL were not to be treated as depots or sale points of the appellant for the purpose of adding the buyers' downstream expenses into the appellant's assessable value. The reasoning emphasised the time and place of removal and the commercial terms of sale between independent parties; therefore post-removal costs borne by the buyer cannot be appended to the factory gate valuation.

Expenses incurred by bulk buyers at their retail outlets are not includible in the assessable value determined at the factory gate; the addition on this basis is set aside.

Final Conclusion: The appeal is allowed. The impugned demand and penalty founded on inclusion of purported money value of space/manpower and expenses of bulk buyers in the assessable value are set aside, and consequential relief shall follow in accordance with law.

Valuation under Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - rule 8 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - rule 4 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - stock transfer / captive consumption - remand for fresh adjudication

Valuation under Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - rule 8 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - rule 4 of Central Excise (Determination of Price of Excisable Goods) Rules, 2000 - stock transfer / captive consumption - Whether the invoice value of clearances to the related unit conformed to the Valuation Rules and whether rule 8 (read with rule 9 proviso) or rule 4 applied to the transactions characterised as stock transfers/captive consumption - HELD THAT: - The Tribunal recorded that clearances were effected to the assessee's own related unit and therefore the correctness of the invoice value had to be tested against the applicable provisions of the Valuation Rules. The appellant's contention that rule 4 (value based on sales to unrelated persons) applied because transaction value from unrelated sales existed was placed before the lower authorities. The authorities, however, treated the movements as stock transfers/clearances for further manufacture and proceeded to invoke rule 8 valuation, and did not accept the appellant's submissions. The Tribunal noted that some relevant judicial precedents relied on by the appellant were not considered by the first appellate authority and that the authority had drawn inferences lacking legal sustenance. Given these lacunae in adjudication and absence of judicial consideration by the lower authority of the competing decisions and submissions on which the assessee relied, the Tribunal declined to finally resolve the valuation question itself and concluded that the matter merits fresh adjudication by the first appellate authority after considering the applicable Valuation Rules, the characterization of the transactions (stock transfer/captive consumption), and the precedents cited by the parties. [Paras 6, 7, 8]

Impugned order set aside and the matter remanded to Commissioner of Central Excise (Appeals) for fresh adjudication on conformity of invoice value to the Valuation Rules and consideration of the authorities and submissions placed before the lower forums.

Final Conclusion: Appeal allowed in part by setting aside the impugned order and remanding the matter to the first appellate authority for fresh decision on valuation issues (application of rule 8 vis-a -vis rule 4 and treatment as stock transfer/captive consumption) after considering the judicial precedents and the parties' contentions.

Transaction value - exclusion of sales tax actually paid or actually payable - time and place of removal - net present value (NPV) prepayment under sales tax deferment scheme - post sale change in tax law and reassessment of assessable value - distinguishment of precedent

Transaction value - exclusion of sales tax actually paid or actually payable - net present value (NPV) prepayment under sales tax deferment scheme - Whether amounts retained or pre paid as Net Present Value under the Goa sales tax deferment scheme constitute additional consideration to be included in the assessable value for central excise - HELD THAT: - The Tribunal examined the scheme which permitted deferment of sales tax with an option of premature discharge by payment of NPV and held that at the time and place of removal the sales tax liability under the law qualified for exclusion from the transaction value. The modified scheme merely afforded an option to prepay the deferred liability; it did not alter the character of the amount as sales tax or convert it into consideration for the goods. The NPV prepayment was treated as a mechanism of discharge of a tax liability (a post sale facility) and thus amounted to a post sale exemption which did not affect the deduction permissible under the definition of transaction value. Consequently, the retained amounts or the NPV prepayment could not be treated as additional consideration to be included in assessable value. [Paras 5]

Amounts retained or pre paid as NPV under the deferment scheme are not additional consideration and are excludible from transaction value

Time and place of removal - post sale change in tax law and reassessment of assessable value - Whether a subsequent change in sales tax law (introducing NPV payment option) can re determine the assessable value of goods cleared earlier - HELD THAT: - Relying on established authorities and prior Tribunal reasoning, the Court applied the principle that assessable value is fixed at the time and place of removal. Deductions permissible (including sales tax) are to be determined as per the liability existing at that moment. A later legislative change which only provided an option to discharge deferred tax by NPV does not alter the tax liability that existed at removal, and therefore cannot serve as a ground to re determine assessable value or treat the earlier deduction as inapplicable. The Tribunal emphasized certainty in taxation and held that retroactive alteration of assessable value based on subsequent law changes is impermissible. [Paras 5, 7]

Subsequent changes in sales tax law (including introduction of NPV option) do not justify re determination of assessable value determined at time of removal

Distinguishment of precedent - transaction value - Whether the Supreme Court decisions in Super Synotex and Maruti Suzuki govern the present appeals or are distinguishable - HELD THAT: - The Tribunal considered the Supreme Court rulings relied upon by Revenue and found them factually distinguishable. Those decisions did not address schemes in which deferred sales tax could be discharged by payment of NPV at the option of the dealer. The Tribunal followed prior tribunal decisions (including Uttam Galva, Rational Engineers and Kinetic Engineering) which had distinguished Super Synotex and Maruti on similar factual matrices and applied their reasoning to hold that the revenue's reliance on those Supreme Court decisions was misplaced. Consequently, the adverse orders based on those authorities were set aside. [Paras 6, 7]

Super Synotex and Maruti Suzuki are distinguishable on the facts and do not apply; the Tribunal's precedents favour the appellants

Final Conclusion: The impugned orders holding the retained/NPV amounts as additional consideration are set aside and all appeals are allowed.

Refund of education cess and higher education cess - requirement of specific exemption notification - area based exemption by way of refund/PLA mechanism - power to authorise exemption under Rule 8 / source of power - binding precedent and per incuriam doctrine - administrative circulars not having force of law

Refund of education cess and higher education cess - requirement of specific exemption notification - area based exemption by way of refund/PLA mechanism - Refund of education cess and higher education cess under Notification No.56/2002-CE is not admissible in the absence of a specific exemption notification covering such cesses. - HELD THAT: - The Tribunal applied the ratio of the Hon'ble Supreme Court in M/s Unicorn Industries (reported as 2019 (370) ELT 3 (SC)). That decision held that exemption must be conferred by a notification issued under the appropriate source of power and, where a later-imposed cesses such as education cess and higher education cess are not expressly covered by the exemption notification, they cannot be held to be exempted. The Tribunal observed that Notification No.56/2002-CE is pari materia to the notification considered in Unicorn Industries and, therefore, the same principle applies. The Circulars relied upon lack the force of law and cannot substitute for a statutory notification. In view of the binding precedent and the requirement that a notification must specifically cover the additional duties in the nature of cesses, the Tribunal found no infirmity in the rejection of the refund claim for education cess and higher education cess and upheld the adjudicating authority's and Commissioner (Appeals)'s orders.

Appeal dismissed; impugned order rejecting refund of education cess and higher education cess upheld.

Final Conclusion: Following the Supreme Court's decision in M/s Unicorn Industries, the Tribunal upholds the denial of refund of education cess and higher education cess in the absence of a specific exemption notification and dismisses the appeal.