TaxTMI Updates e-Newsletter
Jun 10,2019

Pre-deposit for stay of enforcement - release of seized goods and vehicle on furnishing immovable security - satisfaction of Assistant Commissioner as condition precedent to release

Release of seized goods and vehicle on furnishing immovable security - satisfaction of Assistant Commissioner as condition precedent to release - Release of the truck and goods on furnishing adequate immovable security to the satisfaction of the Assistant Commissioner of State Tax (Mobile Wing), Chandigarh-II, against the total demand in the order of assessment dated 15.10.2018, less the amount already deposited. - HELD THAT: - The Court recorded that an appeal with the pre-deposit of 10% of the tax demand has been filed against the assessment order dated 15.10.2018. Pending further consideration, the Court directed that upon the petitioners furnishing adequate immovable security to the satisfaction of the Assistant Commissioner of State Tax (Mobile Wing), Chandigarh-II, and such security being accepted against the total demand in the assessment order less amounts already deposited, the truck and the goods shall be released. The release is conditional upon the Assistant Commissioner being satisfied with the immovable security and must occur within two days of such satisfaction.

Truck and goods to be released within two days of acceptance of adequate immovable security by the Assistant Commissioner, subject to adjustment against the assessed demand less amounts already deposited.

Final Conclusion: Petition adjourned for further consideration on 15.07.2019; meanwhile, contingent release of the truck and goods was ordered upon furnishing of adequate immovable security acceptable to the Assistant Commissioner, with release to follow within two days of such acceptance.

Jurisdiction of the Settlement Commission - undisclosed foreign income and assets - Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - segregation of income earned and assets acquired outside India - exclusion of undisclosed foreign income from total income under the Income Tax Act - power under Section 245D(4) of the Income Tax Act - interim non-construction of an order as conferring jurisdiction

Jurisdiction of the Settlement Commission - undisclosed foreign income and assets - Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 - segregation of income earned and assets acquired outside India - exclusion of undisclosed foreign income from total income under the Income Tax Act - interim non-construction of an order as conferring jurisdiction - Whether the order dated 30.1.2019 of the Income Tax Settlement Commission shall be construed as conferring jurisdiction on the Settlement Commission to decide matters relating to undisclosed foreign income and assets under the Black Money Act. - HELD THAT: - The court recorded the petitioner's contention that the Black Money Act was enacted to deal with undisclosed foreign income and assets and that sub-section (3) of Section 4 of that Act treats such income as not forming part of "total income" under the Income Tax Act, thereby precluding the Settlement Commission's jurisdiction to deal with undisclosed foreign income and assets. The court noted the challenge to the Settlement Commission's order passed under Section 245D(4) of the Income Tax Act and, without deciding the substantive question of jurisdiction, directed an interim protective measure. By that direction the court prevented the impugned order from being construed, at least for the time being, as conferring jurisdiction under the Black Money Act on the Settlement Commission to adjudicate issues relating to undisclosed foreign income and assets, reserving the question for further hearing.

Notice issued returnable on 17.6.2019; meanwhile the order dated 30.1.2019 shall not be construed as conferring jurisdiction on the Settlement Commission under the Black Money Act to deal with undisclosed foreign income and assets.

Final Conclusion: Writ petition admitted; interim direction that the Settlement Commission's order dated 30.1.2019 shall not be treated as conferring jurisdiction under the Black Money Act to decide issues of undisclosed foreign income and assets, with liberty to list for final disposal on the returnable date.

Non speaking order and failure to record reasons - Violation of principles of natural justice (audi alteram partem) - Non application of mind by Assessing Officer - Validity of assessment under Section 143(3) of the Income tax Act - Consideration of revised return and claims for deduction/exemption - Remand for fresh consideration with opportunity of hearing

Non speaking order and failure to record reasons - Non application of mind by Assessing Officer - Validity of assessment under Section 143(3) of the Income tax Act - Impugned assessment order dated 24.12.2018 is vitiated for want of reasons and non application of mind and cannot be sustained. - HELD THAT: - The Court found that the assessing officer's order merely recorded that returns were defective without addressing the revised return or the claims made under Sections 48 and 54F and without assigning reasons for rejecting those claims. Recording of reasons is an essential feature of quasi judicial orders; absence of reasons and failure to consider the assessee's claims demonstrates non application of mind. Where the principles of audi alteram partem are not observed and reasons are not furnished to show application of mind, the assessment cannot be approved. The Court therefore held the assessment under Section 143(3) to be prima facie arbitrary and liable to be quashed for the stated defects, without expressing any opinion on the merits of the claims themselves. [Paras 7, 9, 10]

Assessment order dated 24.12.2018 quashed for want of reasons and non application of mind; related demand and recovery notices set aside.

Consideration of revised return and claims for deduction/exemption - Violation of principles of natural justice (audi alteram partem) - Remand for fresh consideration with opportunity of hearing - Proceedings restored to the Assessing Officer for re consideration after providing opportunity of hearing and recording valid reasons. - HELD THAT: - The Court directed that the matter be placed back before the assessing officer so that the revised return and the claims under Sections 48 and 54F may be considered and adjudicated upon after affording the assessee an opportunity of hearing. Even if a revised return is time barred or otherwise not admissible on legal grounds, the assessing officer must analyze and record reasons for rejecting the claims; a perfunctory order that fails to do so is impermissible. The Court therefore remanded the proceedings to enable the Assessing Officer to reach a reasoned conclusion in accordance with law and the principles of natural justice, leaving all substantive contentions open. [Paras 11, 12]

Proceedings restored to the Assessing Officer to re consider the matter, afford hearing to the petitioner and record valid reasons; petitioner to appear on specified date and assessment to be concluded expeditiously.

Final Conclusion: Writ petition allowed: impugned assessment order, demand notice and recovery notice quashed; matter remitted to the Assessing Officer for fresh consideration after affording opportunity of hearing and recording reasons, with liberty to the parties to pursue statutory remedies thereafter.

Deposit as condition for interim stay of tax demand - stay of recovery subject to compliance - notice under Section 221(1) of the Income Tax Act, 1961 - extension of time for compliance with deposit condition - direction to appellate authority to decide appeal expeditiously

Deposit as condition for interim stay of tax demand - stay of recovery subject to compliance - Whether the High Court's order reducing the deposit condition to 20% and staying recovery subject to staged payment should be interfered with on appeal - HELD THAT: - The Division Bench considered the statutory appeal history and the writ court's direction which reduced the deposit condition to 20% of the assessed tax and stayed recovery subject to two instalments of 10% each, payment timelines, and a direction for expeditious disposal of the appeal. The Court was not persuaded to disturb the judgment impugned. While noting that the bank is prima facie liable for the demand, the Court upheld the substantive relief granted by the High Court and declined to set aside the condition of deposit as the balance between the fiscal interest and litigative convenience had been properly struck by the writ court. [Paras 3, 4]

Appeal not entertained against the High Court's reduction of the deposit condition to 20% and the stay of recovery subject to compliance; impugned judgment otherwise maintained.

Extension of time for compliance with deposit condition - direction to appellate authority to decide appeal expeditiously - Whether the time for depositing the first instalment could be extended - HELD THAT: - On the appellant's request for additional time to comply with the deposit condition, the Court, while observing the appellant's status as a Co-operative Bank and prima facie liability, exercised its discretion to grant indulgence. The Court accordingly modified the temporal direction of the impugned order to permit deposit of the aggregate 20% within a fresh six-week period from the date of the order, thereby facilitating compliance. The prior direction to the appellate authority to dispose of the appeal expeditiously remained intact by implication. [Paras 4, 5]

Limited modification granted: the 20% deposit to be made within six weeks from the date of this order; other terms of the writ court's order continue.

Final Conclusion: The writ appeal is disposed of by declining to interfere with the High Court's order reducing the deposit condition to 20% and staying recovery subject to compliance, while granting a limited modification to extend the time for deposit so that the 20% disputed amount is to be deposited within six weeks from today.

Limitation under proviso to Section 143(2) - assessment under Section 143(3) time-barred - voidness of proceedings initiated after prescribed limitation - waiver does not validate void proceedings

Limitation under proviso to Section 143(2) - assessment under Section 143(3) time-barred - voidness of proceedings initiated after prescribed limitation - waiver does not validate void proceedings - Validity of notice issued under Section 143(2) and consequential assessment under Section 143(3) in view of the proviso prescribing a six-month limit from the end of the financial year in which the return was filed - HELD THAT: - The Court found that the return for Assessment Year 2004-05 was filed on 30.09.2004 in the financial year 2004-05 (ending 31.03.2005), and that the proviso to Section 143(2) bars issuance of a notice after the expiry of six months from the end of that financial year (i.e., after 30.09.2005). The Assessing Authority issued the notice under Section 143(2) on 08.08.2006, which is beyond the statutory six-month period. The Court held that initiation of proceedings in contravention of this statutory limitation is prohibited by law and renders the subsequent assessment under Section 143(3) void. Further, the Court rejected the contention that the assessee's failure to raise the limitation objection during earlier stages or its participation in proceedings could validate actions which are statutorily barred, holding that waiver or participation cannot cure proceedings that are void for want of jurisdiction/limitation.

The assessment proceedings including the assessment order for Assessment Year 2004-05 and the appellate order are quashed as time-barred and void.

Final Conclusion: Writ petition allowed; the assessment order for Assessment Year 2004-05 and the appellate order impugned were quashed as proceedings initiated beyond the six-month limitation under the proviso to Section 143(2) and therefore void, and the assessee's prior participation did not validate those proceedings.

Compulsory e-filing of appeals before Commissioner (Appeals) - continuance of substantive right of appeal despite procedural infirmity - extension of time for e-appeals by administrative circular - electronic verification functionality (EVC) operational delay - direction to cure procedural defect and adjudicate on merits

Compulsory e-filing of appeals before Commissioner (Appeals) - extension of time for e-appeals by administrative circular - continuance of substantive right of appeal despite procedural infirmity - Validity of a manually filed Form No.35 appeal filed in time prior to practical operationalisation of e-filing and whether such procedural non-compliance warrants treating the appeal as invalid. - HELD THAT: - The amendment mandating e-filing took effect from 01.03.2016 but administrative circular recognised practical difficulties and extended the period for e-appeals, recording that EVC functionality for individuals became operational only from 12.05.2016 and allowing e-appeals due by 15.05.2016 to be filed up to 15.06.2016. The petitioner filed the appeal manually within time and the appellate file shows the matter was heard on merits with written submissions on record. In these circumstances the Court held that the statutory, substantive right of appeal should not be defeated by an acknowledged procedural infirmity arising from transitional difficulties in implementing compulsory e-filing. Accordingly the order treating the appeal as invalid was set aside and the petitioner was permitted to cure the defect by complying with Rule 45 within a limited time, without re-payment of the earlier filed appeal fee.

Impugned order dismissing the manually filed appeal as invalid is set aside; the petitioner permitted to comply with Rule 45 within three weeks and appeal to be treated valid for adjudication on merits without paying the fee again.

Direction to cure procedural defect and adjudicate on merits - continuance of substantive right of appeal despite procedural infirmity - Procedure to be followed after curing the procedural defect and the extent of further adjudication by the appellate authority. - HELD THAT: - The Court directed the petitioner to e-file the appeal in accordance with Rule 45 within three weeks. Upon satisfaction of compliance, the Commissioner (Appeals) is to take up the e-appeal for adjudication on merits and to pass appropriate orders after hearing the petitioner. The Court specifically relieved the petitioner from re-paying the appeal fee already paid for the manually filed appeal. The matter is thus returned to the appellate authority for fresh adjudication on merits after the procedural defect is cured.

Petitioner to e-file within three weeks; CIT(A) to adjudicate the e-appeal on merits after hearing; no requirement to re-pay the appeal fee.

Final Conclusion: Writ petition allowed; order treating the manually filed appeal as invalid set aside; petitioner granted time to comply with Rule 45 and the appellate authority directed to adjudicate the appeal on merits after such compliance, without requiring re-payment of the appeal fee.

Deduction under section 54F - unexplained cash credit - onus of proof under section 68 - third party book entries as insufficient basis for addition - admissibility of evidence under Rule 46A - requirement of independent investigation and opportunity for cross examination

Deduction under section 54F - construction expenditure evidence - admissibility of evidence under Rule 46A - Claim of deduction under section 54F was allowed. - HELD THAT: - The Tribunal upheld the first appellate authority's finding that the assessee furnished contemporaneous documents and contractor's certificate and other supporting papers (construction bills, mode of payment statement, correspondence with local authority, NOC from other legal heirs, 7/12 extract, property tax receipt) showing expenditure on construction of a residential house. These documents were placed on record during remand proceedings before the assessing officer and thus their admission did not violate Rule 46A. On the basis of the documentary evidence, the conditions for claim of deduction under section 54F were satisfied and the claim was rightly allowed by the CIT(A). [Paras 3, 5]

Deduction under section 54F allowed; impugned order on this point upheld.

Unexplained cash credit - onus of proof under section 68 - third party book entries as insufficient basis for addition - requirement of independent investigation and opportunity for cross examination - Addition of unexplained cash credit was deleted. - HELD THAT: - The Tribunal agreed with the CIT(A) that, apart from entries in third party books indicating payment to the assessee, there was no independent corroborative material to show that the assessee actually received unaccounted cash. The assessee denied receipt and, in absence of any further inquiry, on the spot verification, recording of statements on oath or opportunity to cross examine payors, the assessing officer failed to discharge the burden of disproving the assessee's denial. Consequently the addition under the test of unexplained cash credit could not be sustained and was deleted. [Paras 3, 5]

Addition under section 68 deleted; impugned order on this point upheld.

Final Conclusion: The appeal is dismissed; the CIT(A)'s order is affirmed in allowing the deduction under section 54F and in deleting the addition of unexplained cash credit for AY 2009-10.

Disallowance under section 14A read with Rule 8D - Requirement of satisfaction under section 14A(2) before invoking Rule 8D - Computation of disallowance for administrative expenses under Rule 8D(2)(iii) - Treatment of disallowance while computing book profits under section 115JB - Applicability of Maxopp Investment Ltd. principles - Remand for fresh adjudication

Requirement of satisfaction under section 14A(2) before invoking Rule 8D - Disallowance under section 14A read with Rule 8D - Ld. AO was required to form satisfaction under section 14A(2) before applying Rule 8D and computing disallowance. - HELD THAT: - The Tribunal held that the jurisdiction to apply Rule 8D does not arise mechanically; the AO must first record a satisfaction in terms of Section 14A(2) explaining why the assessee's accounts or explanation as to non-incurrence of expenditure in earning exempt income is not satisfactory. The requirement to form such an opinion is a sine qua non for invoking Rule 8D. The Tribunal noted the subsequent Supreme Court decision in Maxopp Investment Ltd. and directed that its propositions be borne in mind while reconsidering the matter. Given that the assessment orders pre-dated Maxopp and the AO did not demonstrate the required satisfaction, the Tribunal set aside the findings and remitted the issue for fresh consideration by the AO. [Paras 5]

Finding of first appellate authority confirmed disallowance set aside and matter remanded to AO to form satisfaction under Section 14A(2) and reconsider invocation of Rule 8D in light of Maxopp.

Computation of disallowance for administrative expenses under Rule 8D(2)(iii) - Treatment of disallowance while computing book profits under section 115JB - Remand for fresh adjudication - Quantum and allocation of the Rule 8D(2)(iii) expense disallowance and its treatment for computation of book profits under section 115JB were not finally decided and were remanded to the AO. - HELD THAT: - The Tribunal observed that factual aspects material to the quantification-whether the expenditures were predominantly construction-related, whether investments were old and unchanged, and the consequent appropriateness of the 0.5% administrative disallowance-remained to be examined by the AO. The Tribunal also directed that the question of how any disallowance is to be treated for book profit computation under Section 115JB be revisited by the AO keeping in view statutory provisions and the Delhi Tribunal (Special Bench) decision in ACIT v. Vireet Investment (P.) Ltd. and other binding precedents. Adequate opportunity of hearing was ordered to be afforded to the assessee for substantiation of its contentions. The Tribunal therefore did not adjudicate the quantum or the exact accounting treatment but restored the matter to the AO for fresh adjudication on these aspects. [Paras 5, 6]

Quantum of expense disallowance under Rule 8D(2)(iii) and its impact on book profits under section 115JB remitted to AO for fresh consideration and computation after recording necessary satisfaction and granting opportunity to the assessee.

Final Conclusion: Both appeals were allowed for statistical purposes; the Tribunal set aside the appellate finding on Section 14A/Rule 8D disallowance and restored the matters to the file of the AO for fresh adjudication-requiring the AO to record the requisite satisfaction under Section 14A(2), to apply the principles of Maxopp Investment Ltd., to reassess the quantum and accounting treatment of any disallowance (including effect on Section 115JB), and to grant the assessee an opportunity of hearing.

Unexplained cash credit u/s. 68 - corpus donation and exemption under section 11(d) - onus to prove genuineness of donation - verification in compliance with directions of the Tribunal - non-cooperation of third party and evidentiary consequence

Unexplained cash credit u/s. 68 - corpus donation and exemption under section 11(d) - Addition of Rs. 95,00,000 treated as unexplained cash credit under section 68 and denial of exemption for corpus donation. - HELD THAT: - The Tribunal upheld the CIT(A)'s affirmation of the AO's addition under section 68. The authorities found that the alleged corpus donation, though claimed to have been received by account payee instruments, raised doubts because of the manner of transactions (cash deposits immediately prior to issuance of demand drafts) and inconsistent or uncorroborated statements from LEARN. No new material emerged on verification which could establish the genuineness of the donation. On this basis the Tribunal concluded that the addition as unexplained cash credit was justified. [Paras 5]

Addition of Rs. 95,00,000 upheld and claim of exemption rejected.

Verification in compliance with directions of the Tribunal - non-cooperation of third party and evidentiary consequence - Whether the AO complied with the ITAT's directions and whether lack of fresh evidence warranted deletion of the addition. - HELD THAT: - The Tribunal found that the AO acted in compliance with the ITAT's directions by making enquiries from all relevant angles, including attempts to verify LEARN's balance sheet and bank details, but LEARN did not cooperate and failed to furnish information. The fact that no new evidence was obtained was attributable to non-cooperation by LEARN and the enquiries already conducted did not dispel doubts about the transaction. Consequently, absence of fresh material did not entitle the assessee to deletion of the addition. [Paras 5]

AO's enquiries held adequate in spirit of the ITAT directions; absence of fresh evidence due to third-party non-cooperation did not vitiate the addition.

Onus to prove genuineness of donation - source of source of donation - Whether the assessee discharged the onus to prove the nature and genuineness of the corpus donation and whether it was required to prove source of source. - HELD THAT: - Although the assessee contended that it was not obliged to prove the source of source of the donation, the Tribunal emphasised that the assessee nonetheless carried the onus to establish the genuineness and nature of the receipt claimed as donation. In the facts, the Tribunal found that the assessee failed to discharge that onus because corroborative evidence was lacking and material facts (mode and timing of deposits, inconsistent communications from LEARN) gave rise to doubt; hence the benefit could not be allowed. [Paras 5]

Assessee failed to discharge onus to prove genuineness; contention regarding source of source rejected for want of evidence.

Final Conclusion: The appeal is dismissed; the Tribunal upholds the addition of Rs. 95,00,000 as unexplained cash credit under section 68 and rejects the claim of exemption for the corpus donation.

Remand for de novo consideration after failure to afford opportunity of hearing - condonation of delay in filing appeal - ex parte assessment under section 144 - re-adjudication of penalties consequent to remand of assessment

Ex parte assessment under section 144 - remand for de novo consideration after failure to afford opportunity of hearing - condonation of delay in filing appeal - Whether the assessment framed ex parte under section 144 and the appellate order dismissing the appeal as not maintainable on account of delay should be set aside and the matter remitted for fresh adjudication after considering the assessee's evidence and reasoned application for condonation of delay. - HELD THAT: - The Tribunal found that the Assessing Officer passed an ex parte assessment without giving the assessee proper opportunity to substantiate its case and that the Commissioner (Appeals) dismissed the appeal as not maintainable on account of delay without adequately considering the assessee's explanations and the documents filed. The assessee had filed a paper book containing material documents and explanations which were not considered by the authorities below. In the interest of justice, and having regard to the lack of opportunity and non-consideration of sufficient reasons for condonation of delay, the Tribunal held that the delay deserved to be condoned and the disputed issues required fresh adjudication. The matter was therefore remitted to the Assessing Officer for de novo consideration of the issues after giving the assessee adequate opportunity to be heard and directing the AO to consider all documents/evidence and to pass a speaking order; the assessee was permitted to file further evidence but was directed to cooperate and avoid unnecessary adjournments. [Paras 8]

Assessment set aside and remitted to the Assessing Officer for de novo consideration; delay in filing appeal condoned and assessee to be given opportunity to produce evidence; quantum appeal allowed for statistical purposes.

Re-adjudication of penalties consequent to remand of assessment - Whether the penalty orders connected with the assessment should be set aside and remitted to the Assessing Officer for reconsideration in light of the remand of the assessment proceedings. - HELD THAT: - Since the Tribunal remitted the assessment to the Assessing Officer for de novo adjudication and directed fresh consideration of the evidence and opportunity to the assessee, it followed that the penalty proceedings which are consequential to the outcome of assessment must also be set aside. The Tribunal therefore directed that the penalty matters be sent back to the Assessing Officer with similar directions for fresh adjudication after giving the assessee adequate opportunity and considering the evidence filed. [Paras 9]

Penalty orders set aside and remitted to the Assessing Officer for fresh adjudication in accordance with the directions given in the remand of the assessment; penalty appeals allowed for statistical purposes.

Final Conclusion: The Tribunal set aside the assessment framed ex parte under section 144 and the related penalty orders, condoned the delay in appealing, and remitted the quantum and penalty matters to the Assessing Officer for de novo consideration after giving the assessee adequate opportunity to be heard and to file evidence; all three appeals are allowed for statistical purposes.

Penalty under section 271(1)(c) of the Income tax Act, 1961 - validity of show cause notice - furnishing inaccurate particulars of income - concealment of particulars of income - assumption of jurisdiction and vitiation of proceedings

Penalty under section 271(1)(c) of the Income tax Act, 1961 - validity of show cause notice - furnishing inaccurate particulars of income - concealment of particulars of income - Whether the show cause notice and consequent penalty proceedings under section 271(1)(c) are valid where the assessing officer did not specify whether proceedings were initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. - HELD THAT: - The Tribunal held that the show cause notice dated 28.12.2016 and the assessment order failed to specify which limb of section 271(1)(c) - concealment of particulars of income or furnishing inaccurate particulars of income - was the basis for initiating penalty proceedings. Relying on the decision of the Karnataka High Court in CIT v. M/s. SSAs Emerald Meadows, which was affirmed by the Supreme Court by dismissal of the Department's SLP, the Tribunal found that a notice which does not specify the relevant limb is invalid. The validity of the notice is fundamental to the assumption of jurisdiction to levy penalty; where the notice is legally defective the resultant penalty proceedings are vitiated. Applying that principle to the facts, the Tribunal concluded that the defective notice rendered the penalty unsustainable and ordered its cancellation.

Show cause notice held invalid for failure to specify the limb of section 271(1)(c); penalty proceedings vitiated and penalty cancelled.

Final Conclusion: The appeal is allowed; the penalty under section 271(1)(c) for A.Y. 2014-2015 is cancelled because the show cause notice did not specify whether proceedings were for concealment or for furnishing inaccurate particulars of income, rendering the notice and consequent penalty proceedings invalid.

Penalty under section 271D - Section 269SS - prohibition on acceptance of cash loans/deposits - Reasonable cause under section 273B - Transactions between near relatives/family members - Benefit of interpretation favourable to taxpayer in penalty provisions

Penalty under section 271D - Section 269SS - prohibition on acceptance of cash loans/deposits - Transactions between near relatives/family members - Reasonable cause under section 273B - Sustainability of penalty under section 271D for acceptance of cash loans from near relatives in assessment year 2007-08 - HELD THAT: - The Tribunal accepted that the assessee had taken cash advances from his father and paternal aunt and that the Assessing Officer had recorded the source and genuineness of the loans. Applying precedent of coordinate benches and High Courts, the Tribunal held that cash transactions between near relatives or family members do not fall within the mischief of section 269SS and that such family transactions ordinarily attract protection where they are not commercial in nature. Further, on the facts the acceptance of cash constituted a transaction covered by reasonable cause under section 273B, and the penal provision must be construed favourably to the taxpayer. In view of these authorities and the circumstances that the amounts were from family members for specific purpose and genuine in source, imposition of penalty under section 271D was not sustainable and was liable to be deleted. [Paras 6, 7]

Penalty under section 271D levied for cash loans accepted from near relatives is deleted and the appeal is allowed.

Final Conclusion: The penalty of Rs. 2.20 lakhs imposed under section 271D for cash loans taken in AY 2007-08 from the assessee's father and paternal aunt is set aside; the appeal is allowed.

Penalty under section 271(1)(c) for concealment of income and furnishing inaccurate particulars - distinction between concealment of income and furnishing inaccurate particulars - requirement of specific and categorical satisfaction before initiating and levying penalty - invalidity of penalty proceedings where the charge under clause (c) is ambiguously or indistinctly invoked

Penalty under section 271(1)(c) for concealment of income and furnishing inaccurate particulars - requirement of specific and categorical satisfaction before initiating and levying penalty - invalidity of penalty proceedings where the charge under clause (c) is ambiguously or indistinctly invoked - Levy of penalty under section 271(1)(c) was set aside because the Assessing Officer invoked both limbs of clause (c) without specifying which limb was relied upon, producing ambiguity and non-application of mind. - HELD THAT: - The Tribunal found that the Assessing Officer, both while initiating penalty proceedings and while passing the penalty order, mentioned and relied upon both limbs of section 271(1)(c) - "concealment of income" and "furnishing inaccurate particulars" - without specifically identifying which limb applied. The court reiterated the settled distinction between the two limbs, referring to T. Ashok Pai , which explains that 'concealment of income' denotes a deliberate act of suppression while 'furnishing inaccurate particulars' denotes furnishing incorrect particulars notwithstanding disclosure. The Tribunal also relied on the principle in Commissioner of Income Tax Vs. Manjunatha Cotton and Ginning Factory that the Assessing Officer must form a clear conclusion as to which limb is attracted and the notice and order must reflect such specific satisfaction; use of a standard form or invoking both limbs leads to an inference of non-application of mind. Because the satisfaction recorded and the penalty order were vague and indistinct as to the charge under clause (c), the statutory requirement of a specific and categorical satisfaction was not met and the penalty proceedings failed to satisfy legal requirements. [Paras 4, 5, 6, 7, 8]

Penalty levied under section 271(1)(c) set aside and the assessee's appeal allowed.

Final Conclusion: The penalty order under section 271(1)(c) for assessment year 2008-09 was quashed because the Assessing Officer ambiguously invoked both limbs of clause (c) without forming or recording a specific satisfaction as to which limb applied; appeal allowed.

Bogus purchases - onus of proof for genuineness of purchases - addition limited to percentage of disputed purchases in cases of suspicious suppliers - penalty under section 271(1)(c): furnishing inaccurate particulars of income vis-a -vis concealment of income - requirement that penalty be imposed only on the charge for which proceedings were initiated

Bogus purchases - onus of proof for genuineness of purchases - addition limited to percentage of disputed purchases in cases of suspicious suppliers - Whether the addition made by the Assessing Officer in respect of alleged bogus purchases should be sustained in full or restricted. - HELD THAT: - Revenue challenged the CIT(A)'s restriction of the AO's addition to 10% of the alleged bogus purchases. The Tribunal noted that the assessee's books were not rejected and total turnover accepted; however the primary onus to prove genuineness of purchases lay on the assessee, who failed to produce corroborative evidence or vendor confirmations. The Tribunal also observed the AO did not exercise powers to summon vendors under section 133(6), and that there was limited effort from both sides to verify transactions. Having regard to the facts and the coordinate bench precedent where, in cases of purchases from suspicious dealers, an addition of 10% of the disputed purchases over and above declared gross profit was applied, the Tribunal held that the entire purchases could not be treated as wholly bogus but the assessee could not be entirely absolved for non-production of evidence. Accordingly the CIT(A)'s approach of restricting the addition to 10% of the alleged bogus purchases (over and above GP declared) was held to be appropriate and was adopted with modification as the determinative outcome. [Paras 6, 7, 8]

Revenue's appeal partly allowed by restricting the addition to 10% of the alleged bogus purchases over and above the gross profit declared by the assessee.

Penalty under section 271(1)(c): furnishing inaccurate particulars of income vis-a -vis concealment of income - requirement that penalty be imposed only on the charge for which proceedings were initiated - Whether the penalty levied under section 271(1)(c) can be sustained where penalty proceedings were initiated for one limb of the provision but the penalty order invokes the other limb. - HELD THAT: - The record shows penalty proceedings were initiated for 'furnishing of inaccurate particulars of income' but the penalty order framed findings in terms of 'concealment of income', indicating ambiguity in the charge. The Tribunal applied the principle that concealment and furnishing inaccurate particulars are distinct limbs under section 271(1)(c) and an assessee must have notice of the specific charge on which penalty is sought to be imposed. Reliance on the jurisdictional High Court's reasoning was noted to the effect that penalty can be imposed only on the ground for which proceedings were initiated. Given the Assessing Officer invoked a different limb while levying penalty than the one cited at initiation, the Tribunal found the penalty order untenable and upheld deletion by the CIT(A). [Paras 12, 13, 14]

Revenue's appeal dismissed and deletion of penalty under section 271(1)(c) upheld.

Final Conclusion: For Assessment Year 2010-11, the Tribunal partly allowed the Revenue's appeal by restricting the addition for alleged bogus purchases to 10% of the disputed purchases over and above declared gross profit, and dismissed the Revenue's appeal against deletion of penalty under section 271(1)(c) on the ground that the penalty was imposed under a different limb than that on which proceedings were initiated.

Application of CBDT Circular No. 3 of 2018 (Para 10(e)) - exception for information from law enforcement agencies - monetary limits for filing appeals by the Revenue

Application of CBDT Circular No. 3 of 2018 (Para 10(e)) - exception for information from law enforcement agencies - monetary limits for filing appeals by the Revenue - Whether the exception in Para 10(e) of CBDT Circular No.3 of 2018, as amended, which exempts departmental appeals from the monetary limits where additions are based on information received from law enforcement agencies, covers information received from the Maharashtra State Sales Tax Department and accordingly whether the monetary limit applies in the present case. - HELD THAT: - Para 10(e) of CBDT Circular No.3 of 2018 (as amended) exempts adverse judgments from the monetary-limit curtailment where additions are based on information received from external sources in the nature of law enforcement agencies such as CBI, ED, DRI, SFIO and Directorate General of GST Intelligence (DGGI). The Tribunal construed the phrase and observed that the listed enforcement agencies are central law-enforcement authorities; the Circular does not mention State Government enforcement agencies such as the Sales Tax Department. In the present case, reassessment was initiated on the basis of information received from the Maharashtra State Sales Tax Department. Consequently, the exception in Para 10(e) is not attracted and the departmental monetary limits for filing appeals prescribed by the CBDT continue to apply. The Revenue's contention that the exception extends to the State Sales Tax Department was found unsupported by the language of the Circular. [Paras 4, 5]

The exception in Para 10(e) does not cover information received from the State Sales Tax Department; therefore the CBDT monetary limits for filing appeals apply and the Revenue's miscellaneous application to recall the Tribunal's order is dismissed.

Final Conclusion: Miscellaneous Application filed by the Revenue to recall the Tribunal's order is dismissed as the Para 10(e) exception to CBDT Circular No.3 of 2018 does not extend to information received from the State Sales Tax Department; the monetary limits for departmental appeals accordingly apply.

Assessment passed in the name of non-existent entity - jurisdictional defect - inapplicability of Section 292B to cure jurisdictional defects - effect of merger/amalgamation on corporate existence - substitution of successor company after merger

Assessment passed in the name of non-existent entity - effect of merger/amalgamation on corporate existence - substitution of successor company after merger - jurisdictional defect - inapplicability of Section 292B to cure jurisdictional defects - Assessment framed and finalised in the name of an entity which had ceased to exist on the date of assessment is invalid and without jurisdiction; consequent proceedings are vitiated. - HELD THAT: - The transferee company (Amdocs Development Centre India Private Limited) proved on record that the transferor (Amdocs Business Services Private Limited) ceased to exist pursuant to the High Court sanction of the scheme of amalgamation w.e.f. 1st April, 2012 and that the Assessing Officer had been expressly informed of the merger. Despite such intimation, notices and the assessment order were issued and completed in the name of the erstwhile, dissolved company. Binding decisions establish that on amalgamation the amalgamating company loses its legal entity and that framing an assessment against a dissolved or non-existent company is not a procedural irregularity but a jurisdictional defect which Section 292B cannot cure. Applying these authorities and the material facts, the Tribunal concluded that the AO proceeded without jurisdiction by assessing a 'dead person', rendering the assessment order and consequent proceedings invalid. [Paras 9, 12, 14]

Ground No.1 of the assessee's appeal is allowed; the assessment order dated 27.03.2015 in the name of the erstwhile company is invalid and subsequent proceedings are vitiated.

Final Conclusion: The assessee's appeal is allowed insofar as the assessment was framed in the name of a non-existent entity; the Revenue's appeal is dismissed as it arises from the invalid assessment. Remaining grounds are academic and not adjudicated.

Benefit of Notification No. 72/2005-Cus on the strength of certificate of country of origin - reassessment under Section 149 on the basis of documentary evidence in existence at the time of clearance - extended period of limitation - exemption under Notification No. 20/2006-Cus and amendment by Finance Act, 2011 - availment of Cenvat credit - waiver of penalty

Benefit of Notification No. 72/2005-Cus on the strength of certificate of country of origin - reassessment under Section 149 on the basis of documentary evidence in existence at the time of clearance - Admissibility of Notification No. 72/2005-Cus in reassessment proceedings on the basis of country of origin certificates produced after clearance - HELD THAT: - The Tribunal examined whether reassessment under Section 149 could be predicated on country of origin certificates that were not produced before the original adjudicating authority. The Tribunal noted that in an earlier, separate set of cases the appellant had produced such certificates at the time of assessment, but in the present set of bills the certificates were not before the assessing officer and the dates on the certificates now produced are illegible. Section 149 permits reassessment only on the strength of documentary evidence that existed at the time the goods were cleared, deposited or exported. Because it is not established that the country of origin certificates existed and were available at the material time of clearance/assessment in these entries, the appellant cannot succeed in obtaining reassessment relief on that basis. [Paras 5]

Reassessment cannot be allowed on the basis of country of origin certificates not shown to have existed at the time of clearance; benefit of Notification No. 72/2005-Cus not admissible on that ground.

Extended period of limitation - exemption under Notification No. 20/2006-Cus and amendment by Finance Act, 2011 - availment of Cenvat credit - waiver of penalty - Whether extended period of limitation could be invoked and whether penalty should be imposed where there was no suppression or misdeclaration and SAD was paid and credited - HELD THAT: - The Tribunal found that the appellant had correctly described the product and had claimed the notification in the bills of entry, and that the complete facts were before the assessing officer. There was no suppression of facts or misdeclaration; moreover the appellant had paid the relevant duty (SAD) and availed Cenvat credit, although interest remained unpaid. In these circumstances the Tribunal held that the extended period of limitation could not be invoked. Applying these conclusions, the Tribunal confirmed the demand of duty and interest insofar as it was within the period of limitation, but set aside the penalty sought to be imposed and allowed the appeal partly on that basis. [Paras 6, 7]

Extended period cannot be invoked; duty and interest within limitation confirmed; penalty set aside and appeal partly allowed.

Final Conclusion: Appeal partly allowed: demand of duty and interest confirmed insofar as within limitation; penalty imposed by revenue set aside; reassessment relief based on country of origin certificates not shown to exist at time of clearance rejected.

Revocation of suspension of custom broker licence - imposition of penalty without specifying statutory authority - liability of a custom broker for mis-classification where bills of entry are based on importer's documents - failure to exercise due diligence under Regulation 11(d) and 11(e) of CBLR, 2013 - application of precedent that penalty is not warranted where revocation of licence is ordered

Imposition of penalty without specifying statutory authority - application of precedent that penalty is not warranted where revocation of licence is ordered - Validity of the penalty of Rs. 50,000/- imposed on the appellant when the Commissioner revoked the suspension of the broker's licence and did not find abetment or benefit to the broker. - HELD THAT: - The Tribunal recorded that the Inquiry Officer and the Commissioner found that the appellant had neither abetted the mis-declaration nor benefited from the acts under inquiry, and therefore the suspension of the custom broker licence was revoked. Notwithstanding that finding, the Commissioner imposed a penalty but did not specify any provision of the Customs Act, 1962 or the CBLR, 2013 under which the penalty was imposed. The Tribunal observed that where there is no finding of offence under the Customs Act or contravention of the CBLR Regulations, imposition of penalty is not warranted. The Tribunal further noted and applied precedents holding that when revocation of a broker's licence is ordered (i.e., revocation of suspension on a finding of no culpability), imposition of penalty cannot stand. Applying those principles to the present facts, the Tribunal concluded that the penalty, being without stated legal basis and inconsistent with the finding of no abetment, must be set aside. [Paras 6]

The penalty of Rs. 50,000/- imposed on the appellant is set aside and the appeal is allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the penalty imposed by the Commissioner (which was not sustained by any specified statutory provision and was inconsistent with the finding of no abetment), and confirmed revocation of the suspension of the custom broker licence.

Enlargement of time - inherent powers - interest of justice - peremptory order - restoration of company name - failure to file statutory returns

Enlargement of time - Rule 153 of the National Company Law Tribunal Rules, 2016 - inherent powers - interest of justice - NCLT had power to enlarge time for compliance and erred in rejecting the application for extension. - HELD THAT: - The Tribunal held that Rule 153 expressly empowers the NCLT to enlarge any period fixed by or under the Rules in the interest of justice and for reasons to be recorded, even after expiry of the period. Inherent powers under Rule 11 further support the Tribunal's ability to pass orders to meet the ends of justice. Given the ongoing litigation, involvement of an Investigating Auditor and the fact that books and records were (according to the NCLT) required to be handed over to the appellants, the peremptory nature of the earlier order did not oust the Tribunal's discretion to enlarge time. On these grounds the impugned refusal to entertain the extension application was held to be incorrect and set aside. [Paras 10, 11]

Extension power under Rule 153 (and Rule 11) existed and NCLT should have exercised discretion in the interest of justice; refusal to extend was quashed.

Restoration of company name - failure to file statutory returns - peremptory order - The ROC's striking off of the company's name was inappropriate in the circumstances and the appellants were permitted to comply with the NCLT's restoration order within a fresh timeline. - HELD THAT: - The Tribunal noted that the NCLT had earlier directed restoration of the company's name subject to filing statutory returns and handing over of books and records by the respondents. In view of the admitted deposit of the directed cost by the appellants and the factual matrix-including pending CP, Investigating Auditor's involvement and the NCLT's own finding that records were to be made available-the Tribunal found it wrong for the ROC to have struck off the company's name in the particular facts. The appeal was allowed, the NCLT's impugned order refusing extension was set aside, and the appellants were directed to complete the statutory compliances within 30 days from service of the present order; further liberty was granted to seek additional time from the NCLT under Rule 153 if required. [Paras 5, 6, 10, 11]

Impugned order set aside; appellants directed to file statutory returns as ordered by NCLT within 30 days from service of this Tribunal's order, with liberty to seek further extension under Rule 153.

Final Conclusion: Appeal allowed; Order dated 10th September, 2018 is set aside. Appellants to comply with the NCLT directions for filing statutory returns within 30 days from service of this order; appellants may seek further extension from NCLT under Rule 153 in the interest of justice. No order as to costs.

Voting share - committee of creditors - class voting - mandatory threshold percentages - abstention and present and voting - authorised representative - Section 21(2) constitution of the committee of creditors - approval of resolution plan and other critical decisions

Committee of creditors - Section 21(2) constitution of the committee of creditors - The Committee of Creditors (COC) comprises all financial creditors and cannot be segmented class wise for the purpose of computing voting share. - HELD THAT: - The Tribunal held that Section 21(2) requires the COC to comprise all financial creditors as a single body; the statute does not envisage segmentation of the COC into separate classes for computation of voting strength or for class wise decision making. The statutory scheme permits formation of classes only for purposes of representation through an authorised representative and for logistical facilitation, but does not confer a separate decision making or voting entitlement that would supplant individual voting shares ascribed to each financial creditor under the Code. The Tribunal therefore declined the home buyers' submission that class wise voting should be treated as determinative of the COC's decisions. [Paras 6, 18, 23]

COC shall be construed as one body comprising all financial creditors and cannot be segmented class wise for computation of voting share.

Voting share - mandatory threshold percentages - approval of resolution plan and other critical decisions - The voting thresholds prescribed under the Code for various decisions are mandatory and not merely directory. - HELD THAT: - Relying on the legislative language and the Supreme Court's pronouncements, the Tribunal concluded that when the statute requires a decision to be passed by 'not less than' a specified percentage, attainment of that prescribed percentage is a condition precedent and mandatory. The Tribunal observed that the Amendment Acts reduced certain thresholds but did not alter their mandatory character; treating such thresholds as directory would run contrary to legislative intent and binding judicial authority interpreting similar provisions. [Paras 12, 14, 19, 23]

Threshold percentages prescribed by the IBC for specified decisions must be attained and are mandatory in nature.

Class voting - authorised representative - voting share - The majority vote of a class (for example home buyers) cannot be extrapolated to constitute the vote of the entire class by counting abstentions as assent. - HELD THAT: - The Tribunal rejected the proposal to treat a class majority as the class's binding vote by imputing the voting share of abstaining members to the majority. The Code and regulations allow for representation of a class by an authorised representative but require that each financial creditor's individual voting share be exercised according to that creditor's instruction; the authorised representative must abstain for creditors who do not give prior instructions. The Tribunal emphasised that allowing class majority extrapolation would contravene the statutory scheme and enable imputation of affirmative votes where creditors consciously abstained or chose otherwise. [Paras 9, 21, 23]

Majority voting within a class cannot be treated as the vote of the entire class by including the voting share of those who abstained.

Abstention and present and voting - authorised representative - voting share - Abstention by a financial creditor does not amount to assent; the principle of 'present and voting' cannot be used to treat non voters as having given their consent. - HELD THAT: - The Tribunal noted the statutory provision that an authorised representative must abstain on behalf of any creditor who does not give prior instructions, reflecting the legislature's recognition of the right to remain neutral. The Tribunal held that non participation cannot be presumed to be affirmative consent; creditors may abstain deliberately and for various reasons, and imputing assent would distort the formal nature of voting recognised by law. While acknowledging regulatory provisions facilitating voting (including electronic means), the Tribunal found no basis to treat abstentions as votes in favour under the Code. [Paras 8, 20, 21, 23]

A creditor's abstention cannot be construed as assent and non voters cannot be treated as 'present and voting' for purposes of computing the required voting thresholds.

Final Conclusion: The reference is answered: the COC is a single body comprising all financial creditors; prescribed voting thresholds under the Code are mandatory; class wise majority voting cannot be extrapolated to bind the entire class by imputing abstentions as assent; and abstention does not equate to consent. The matter is returned to the Hon'ble President, NCLT for transmission to the Division Bench, Allahabad for pronouncement in open court.

Dissolution of corporate debtor - liquidation under Section 54 of the Insolvency and Bankruptcy Code, 2016 - liquidator's remuneration and liquidation costs - liquidation estate and secured creditor's mortgage - appointment and relief of liquidator - stakeholders list and claims under Regulation 31 of IBBI (Liquidation Process) Regulations, 2016

Dissolution of corporate debtor - liquidation under Section 54 of the Insolvency and Bankruptcy Code, 2016 - Order for dissolution of the Corporate Debtor and relief of the Liquidator - HELD THAT: - The Tribunal, exercising powers under sub-section (2) of Section 54 of the I&B Code, having considered the Liquidator's Preliminary and Final Reports and the material on record including the absence of business operations, non-availability of company records, failure to attract a resolution plan and lack of realizable assets in the liquidation estate, ordered dissolution of the Corporate Debtor. The Liquidator's inability to proceed further due to absence of documents and untraceable directors was noted and, consequent to dissolution, the Liquidator stands relieved of his duties. [Paras 13]

The Corporate Debtor is dissolved with effect from the date of the order and the Liquidator is relieved.

Liquidator's remuneration and liquidation costs - liquidation estate and secured creditor's mortgage - Entitlement of the Liquidator to liquidation costs and direction for payment by the sole secured creditor - HELD THAT: - The Liquidator claimed liquidation costs and remuneration after carrying out limited liquidation acts and incurring expenses including representation in appeal. The Tribunal accepted the claim for liquidation costs and held the Liquidator entitled to the stated amount. Noting that there were no assets available in the corporate debtor's estate to meet such costs and that a mortgageed asset of a personal guarantor/promoter fell outside the liquidation estate as claimed by the secured creditor, the Tribunal directed the sole secured creditor (State Bank of India) to pay the liquidation costs to the Liquidator. [Paras 11, 15]

The Liquidator is entitled to liquidation costs including remuneration and the sole secured creditor is directed to pay the same.

Stakeholders list and claims under Regulation 31 of IBBI (Liquidation Process) Regulations, 2016 - appointment and relief of liquidator - Filing of reports and procedural direction to intimate Registrar of Companies - HELD THAT: - The Liquidator filed the Preliminary Report and Final Report in accordance with applicable regulations, and the Tribunal recorded these filings in the exercise of its powers. As a procedural consequence of dissolution, the Liquidator and Registry were directed to send a copy of the order to the Registrar of Companies within seven days from pronouncement. [Paras 8, 14]

The Liquidator's reports are taken on record and a copy of the dissolution order is to be sent to the Registrar of Companies within seven days.

Final Conclusion: The Tribunal ordered dissolution of M/s. Tech Megacorp International Private Limited, relieved the Liquidator, directed the sole secured creditor to pay the Liquidation costs and remuneration claimed by the Liquidator, and directed transmission of the order to the Registrar of Companies.

Admission of Section 7 petition - default and evidence of default - banker's books evidence and presumption of correctness - proposal and eligibility of Interim Resolution Professional in Form 2 - appointment of Interim Resolution Professional - moratorium under Section 14 - vested management powers of Interim Resolution Professional

Admission of Section 7 petition - default and evidence of default - banker's books evidence and presumption of correctness - Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is admissible on the basis of proved default by the corporate debtor. - HELD THAT: - The Tribunal found that the corporate debtor did not dispute execution of loan documents, sanction letters, creation of mortgage and guarantee deeds, or classification of the account as NPA. The financial creditor filed the application in Form 1 and produced evidence of default including balance confirmation letters, CIBIL record and bank account statements certified under the Banker's Book Evidence Act, 1891, which attract a presumption of correctness. Any minor discrepancies in calculation were held to be matters for the Interim/Resolution Professional to examine after initiation of the insolvency process. On the material placed before it, the Tribunal held that the requirements of Sections 7(1)-(3) (including provision of record/evidence of default) were satisfied and the petition could be admitted. [Paras 19, 20, 22, 23, 24]

The petition under Section 7 is admitted as the financial creditor proved default by the corporate debtor.

Proposal and eligibility of Interim Resolution Professional in Form 2 - appointment of Interim Resolution Professional - moratorium under Section 14 - vested management powers of Interim Resolution Professional - Appointment of the proposed Interim Resolution Professional and declaration of moratorium with attendant directions. - HELD THAT: - The Tribunal examined Part III of Form 1 and the written communication in Form 2 from the proposed professional, finding the proposal in order and that the proposed professional was registered and not subject to disciplinary proceedings. Consequent to admission, the Tribunal declared the moratorium in terms of Section 14 and directed that suits, proceedings, transfer or enforcement of security, and recovery of property in possession of the corporate debtor stand stayed for the duration of the insolvency resolution process. The Tribunal appointed the proposed registered insolvency professional as Interim Resolution Professional, suspended the board's powers under Section 17, vested management with the Interim Resolution Professional, and issued standard directions concerning public announcement, cooperation by the corporate debtor, constitution of the committee of creditors and reporting to the Tribunal. [Paras 26, 27, 28, 29, 30]

Mr. Rajender Kumar Jain is appointed as Interim Resolution Professional; moratorium is declared and detailed directions for management, public announcement, constitution of the committee of creditors and reporting are issued.

Final Conclusion: The Section 7 petition filed by the financial creditor was admitted on proof of default; moratorium under Section 14 was declared; Mr. Rajender Kumar Jain was appointed Interim Resolution Professional with directions to manage the corporate debtor, call for claims, constitute the committee of creditors and report to the Tribunal.

Renting of immovable property - Declared Service - Service Tax under Section 66B - ultra vires - legislative competence - precedent and stare decisis

Renting of immovable property - Declared Service - Service Tax under Section 66B - ultra vires - Declaration that the statutory provision classifying 'Renting of immovable property' as a 'Declared Service' and chargeable to service tax is unconstitutional and void. - HELD THAT: - The writ petition seeking a declaration that the provision classifying "Renting of immovable property" as a declared service and subjecting it to service tax is illegal and ultra vires was not entertained. The Court relied on the earlier Division Bench decision in G. V. Matheswaran Vs. Union of India, wherein the same relief was dismissed and the provision was upheld. The petitioner's request to keep the matter pending until a larger Bench of the Supreme Court decides a related matter was rejected because only leave had been granted by the Supreme Court and the earlier Madras High Court order had not been stayed. In view of the existing binding judicial position, the law as it stands permits respondents to act under the provision; consequently the petition could not succeed.

Writ petition dismissed; declaration sought refused and respondents permitted to act as per the existing provision.

Final Conclusion: The challenge to the provision classifying renting of immovable property as a declared service and its chargeability to service tax is dismissed by the High Court in view of the earlier Division Bench ruling; the petition is refused and respondents may continue to act under the provision.

Interest on delayed refunds - applicability of Section 11BB of the Central Excise Act to service tax under Section 83 of the Finance Act, 1994 - commencement of liability for interest from expiry of three months from date of receipt of refund application - statutory duty on Revenue to compute and pay interest on allowed refund

Interest on delayed refunds - applicability of Section 11BB of the Central Excise Act to service tax under Section 83 of the Finance Act, 1994 - commencement of liability for interest from expiry of three months from date of receipt of refund application - Entitlement of the appellant to interest on the refunds of service tax allowed, under Section 11BB as made applicable to service tax by Section 83 of the Finance Act, 1994. - HELD THAT: - Section 83 of the Finance Act makes specified provisions of the Central Excise Act applicable to service tax, including Section 11BB which mandates payment of interest where a refund is not made within three months from receipt of the refund application. The Court relied on binding Supreme Court rulings interpreting Section 11BB to the effect that the Revenue's liability to pay interest commences from the expiry of three months from the date of receipt of the application. The Tribunal's omission to deal with the appellant's claim for interest was remedied by this Court, which held that the appellant's claim is justified and must be given effect to. The Assessing Authority/empowered GST Officer is directed to compute the interest under the said provisions in respect of the refunds allowed and ensure payment to the appellant.

The appellant is entitled to interest on the allowed refunds under Section 11BB (as applied to service tax by Section 83 of the Finance Act, 1994); the Authority is directed to compute such interest from the statutory commencement date and remit the amounts to the appellant.

Final Conclusion: The appeal is allowed; the authority is directed to compute interest under Section 11BB (as applicable to service tax by Section 83, Finance Act, 1994) for the refunds allowed and remit the amounts to the appellant within three months.

Valuation based on Form 26AS/TDS statement not conclusive for service tax assessment - cum-tax basis computation under Section 67 - remand for re-computation of demand and verification of payments - adjustment of excess tax paid against short payment for same disputed period - waiver of penalty under Section 80 for reasonable cause including financial inability - service recipient "any person" includes government bodies for taxable service

Valuation based on Form 26AS/TDS statement not conclusive for service tax assessment - remand for re-computation of demand and verification of payments - cum-tax basis computation under Section 67 - whether the demand based on figures in Form 26AS could be sustained and whether the matter required remand for correct computation of service tax and interest - HELD THAT: - The Tribunal held that value of taxable services cannot be determined solely on the basis of TDS statements (Form 26AS) filed by clients, because those statements may reflect booked expenditures even where payments were not made and thus do not necessarily represent the correct taxable value. In view of the discrepancies and the appellant's bank statements and invoices, the matter is remitted to the original adjudicating authority for recomputation of service tax and interest. The adjudicating authority is to verify payments allegedly made during investigation/adjudication, examine invoices tallied with financial statements, and, where tax amount was not actually received by the appellant, compute liability on a cum-tax basis as required by Section 67. The appellant is directed to cooperate and furnish a Chartered Accountant's certificate in support of its contentions. [Paras 6]

Matter remanded to the adjudicating authority for limited purpose of re-computation of demand, verification of payments and, where applicable, cum-tax computation under Section 67

Service recipient "any person" includes government bodies for taxable service - whether services rendered to National University of Study and Research in Law (a government body) were not taxable prior to 1 July 2012 - HELD THAT: - The Tribunal rejected the appellant's contention that the recipient being a government body excluded the service from taxation for the period prior to 1 July 2012. The phrase "any person" in the definition of taxable service includes government bodies, and no specific exemption notification for the earlier period was produced by the appellant. Accordingly, the appellant's claim of exemption for that supply was not accepted. [Paras 7]

Claim of exemption for services to the university is rejected and no relief granted on this count

Adjustment of excess tax paid against short payment for same disputed period - whether excess service tax paid for the period 2013-14 could be adjusted against the total arrear for October 2010 to March 2015 - HELD THAT: - The Tribunal found no reason to deny adjustment where both excess payment and short payment arise within the same disputed period. Following earlier Tribunal authorities, the excess tax paid must be allowed to be adjusted so that the demand reflects the net shortfall for the period under adjudication. [Paras 8]

Adjustment of the excess amount paid for 2013-14 is to be allowed against the total demand for the disputed period

Waiver of penalty under Section 80 for reasonable cause including financial inability - whether penalties imposed should be sustained or waived in view of the appellant's financial inability and delay in receipt of payments from clients - HELD THAT: - The Tribunal accepted the appellant's consistent explanation that non-payment of service tax resulted from non-receipt of payments from clients and poor financial position, and that tax and corresponding receipts were accounted for in the books. It is not a case of misappropriation of tax collected. Relying on precedent recognizing financial difficulty as a reasonable cause, the Tribunal held that penalty under Section 80 should be waived even where extended limitation is invoked, while interest remains payable as per law. [Paras 9]

Penalties imposed are set aside and waived under Section 80; interest on admitted liability to be paid as per law

Final Conclusion: The appeal is disposed by remanding the matter to the original adjudicating authority for limited recomputation and verification (including cum-tax computation where tax was not received), allowing adjustment of excess tax paid for 2013-14 against the disputed demand, rejecting the exemption claim for services to the university, and setting aside the penalties under Section 80 while preserving interest liability; proceedings to be carried out in accordance with the Tribunal's directions.

Service tax on distributor commission - Business Auxiliary Service - limitation and extended period - exemption under Notification No.6/2005-ST - suppression or deliberate evasion

Limitation and extended period - suppression or deliberate evasion - Whether demand for periods prior to 2007-08 (October 2003 to 2007-08) could be sustained by invoking the extended period - HELD THAT: - The Tribunal followed its earlier view that invocation of the extended/longer limitation period is not permissible where there was scope for doubt on the question of liability and where the Department itself had taken an alternative view. Relying on precedent, the Court held that mere non-registration or non-filing of returns by the assessee cannot, by itself, be treated as deliberate suppression or an intention to evade payment of service tax so as to attract the extended period. In these circumstances the proviso to the extended limitation provision could not be invoked and the demand for the extended period is time-barred. [Paras 4, 5]

Demand for the extended period (October 2003 to 2007-08) is not sustainable as time-barred.

Service tax on distributor commission - Business Auxiliary Service - exemption under Notification No.6/2005-ST - Whether the commission received for the period within limitation (2007-08) is taxable or exempt under the notification - HELD THAT: - For the period within limitation (2007-08) the Tribunal examined the quantum of commission actually received and applied the exemption provided by Notification No.6/2005-ST. The total commission for the relevant period fell well within the aggregate exemption threshold specified in the notification, and therefore the demand could not be sustained on the ground of taxability under Business Auxiliary Service for that year. [Paras 5]

Demand for 2007-08 is not sustainable as the commission received is covered by the exemption under Notification No.6/2005-ST.

Final Conclusion: The appeal is allowed: demands raised by the lower authority are set aside-claims for extended period (October 2003 to 2007-08) are time-barred and the demand for 2007-08 is exempted under Notification No.6/2005-ST.

Works Contract Service - classification of service - supply of material - discharge of Sales Tax/WCT - limitation - extended period - bona fide belief

Works Contract Service - classification of service - supply of material - discharge of Sales Tax/WCT - Classification of the appellant's pipe-laying services - whether they fall within Works Contract Service - remanded for fresh adjudication. - HELD THAT: - The question whether the laying of pipes for gas is taxable as Works Contract Service was first raised before this Tribunal and was not considered by the Original Adjudicating Authority. The Tribunal found that various factual aspects require verification before classification can be determined, including whether the service was provided together with supply of material and whether the appellant discharged Sales Tax/WCT. Consequently the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for reconsideration and decision on classification after appropriate factual enquiry.

Impugned order set aside; appeal allowed to the extent of remanding the classification issue to the adjudicating authority for fresh decision following factual verification.

Limitation - extended period - bona fide belief - Question of limitation and invocation of the extended period left open for the adjudicating authority to decide. - HELD THAT: - The appellant contended that a bona fide belief that laying of gas pipes was not covered by Erection, Commissioning and Installation Services precluded malafide and militated against invocation of the extended period. The Tribunal did not decide the limitation issue on merits and expressly kept it open, directing the adjudicating authority to consider it in the course of fresh adjudication.

Limitation not decided by the Tribunal and is left open for determination by the adjudicating authority on remand.

Final Conclusion: The impugned order is set aside and the appeal is allowed by remanding the matter to the adjudicating authority for fresh adjudication on classification of the services (including verification of supply of material and discharge of Sales Tax/WCT); the question of limitation/extended period is left open for decision on remand.

Limitation of appeal - date of receipt of order - proof of service and dispatch - condonation of delay beyond prescribed period - binding precedent

Limitation of appeal - date of receipt of order - proof of service and dispatch - Whether the appeal was filed within the period of limitation having regard to the date the impugned order was received or the date it was retrieved from an employee's drawer - HELD THAT: - The Tribunal accepted the factual finding that the impugned order was dispatched on 25.09.2012 and that the appellants themselves admitted retrieving the copy from the deceased employee's drawer on 26.02.2016. The retrieval date cannot be equated with the date of receipt; in absence of evidence that the dispatched order was returned undelivered to the Revenue, the inference is that the assessee had received the order earlier and merely located it later. Consequently, an appeal filed on 30.03.2016 against an order of 30.09.2013 is hopelessly barred by limitation. [Paras 5]

Appeal is time barred; the retrieval date does not qualify as date of receipt and does not cure delay.

Condonation of delay beyond prescribed period - binding precedent - limitation of appeal - Whether the Commissioner (Appeals) ought to have condoned the delay notwithstanding the appellants' position - HELD THAT: - The Tribunal noted that the settled legal position, as reflected in the cited precedent, precludes condonation of delay beyond the statutory period in the circumstances relied upon by the assessee. Having found the appeal barred by limitation on facts, and with the legal position against the assessee on condonation, there was no reason to interfere with the Commissioner (Appeals)'s rejection of the appeal. [Paras 6]

Condonation was not tenable; the Commissioner (Appeals)'s refusal to condone delay is upheld.

Final Conclusion: The appeal is dismissed; the order of the Commissioner (Appeals) rejecting the appeal as barred by limitation and refusing condonation is upheld.

Restoration of appeal - non-prosecution dismissal - condonation of delay - application for restoration of appeal under Section 35(C)(2) of the Central Excise Act, 1944 as applied under Section 86(7) of the Finance Act, 1944 - listing for final hearing

Restoration of appeal - non-prosecution dismissal - listing for final hearing - Appeal dismissed for non-prosecution restored and listed for final hearing. - HELD THAT: - The Tribunal examined the applicant's miscellaneous application seeking restoration of an appeal dismissed on 21.03.2018 for non-prosecution. Having considered the applicant's averments explaining the non-appearance on the scheduled date, the Tribunal concluded that restoration in the interest of justice was warranted. The appeal was restored to its original number and the Registry was directed to list the appeal for final hearing on 26.03.2019. [Paras 2]

Miscellaneous application for restoration allowed; appeal restored and listed for final hearing.

Condonation of delay - application for restoration of appeal under Section 35(C)(2) of the Central Excise Act, 1944 as applied under Section 86(7) of the Finance Act, 1944 - Application for condonation of delay held infructuous as the ROA was filed within the statutory six-month period. - HELD THAT: - On scrutiny of the record the Tribunal found that the application for restoration of appeal had been filed within six months from the date of the Tribunal's order, thereby meeting the time-limit prescribed by Section 35(C)(2) of the Central Excise Act, 1944 as made applicable to service tax appeals under Section 86(7) of the Finance Act, 1944. In view of timely filing of the ROA, the separate miscellaneous application seeking condonation of delay was dismissed as infructuous. [Paras 3]

Miscellaneous application for condonation of delay dismissed as infructuous; ROA found timely under the statutory provision.

Final Conclusion: The Tribunal restored the appeal dismissed for non-prosecution, directed it to be listed for final hearing, and held the separate condonation application unnecessary because the restoration application was filed within the six-month period prescribed by the applicable statutory provision.

Settlement under Section 35-E - true and full disclosure - maintainability of settlement application - power to reject settlement application for non-disclosure - effect of prior adjudication on settlement proceedings under Section 32-F(1) - voluntary compliance

True and full disclosure - maintainability of settlement application - power to reject settlement application for non-disclosure - effect of prior adjudication on settlement proceedings under Section 32-F(1) - Whether the Settlement Commission was justified in rejecting the settlement application as not maintainable on the ground that the applicant failed to make a true and full disclosure and concealed the adjudication order. - HELD THAT: - The Court held that full and true disclosure to the satisfaction of the Settlement Commission is a sine qua non for the Commission to consider a settlement application from initiation till conclusion. Although the petitioner's application was filed and initially allowed to be proceeded with, the Commission on receipt of the jurisdictional commissioner's report discovered that the show cause notice had been adjudicated by the Additional Commissioner by an order dated 28.03.2016. The petitioner did not bring that adjudication to the Commission's notice in its reply to the first notice. The Commission therefore found that the petitioner failed to make true and full disclosure and gave a false declaration about the pendency of the case, and exercised its statutory power to reject the application. The Court noted that the Commission may reject an application at any stage on such non-disclosure and that the Commission rightly placed reliance on the precedents cited. In these circumstances the Commission's conclusion rejecting the settlement application was sustainable. [Paras 7]

The Settlement Commission's rejection of the application for non-disclosure was upheld; no fault found with the impugned order.

Final Conclusion: Writ petition dismissed. The petitioner may pursue other appropriate proceedings if permissible under law.

Cenvat Credit on Goods Transport Agency services - definition of input service under Rule 2(l) of CCR, 2004 - place of removal - FOR (free on road/door delivery) sale basis and its effect on place of removal - binding precedent of the Supreme Court

Cenvat Credit on Goods Transport Agency services - place of removal - FOR (free on road/door delivery) sale basis and its effect on place of removal - definition of input service under Rule 2(l) of CCR, 2004 - binding precedent of the Supreme Court - entitlement to Cenvat Credit on Goods Transport Agency services for transport from factory to buyer's premises after amendment to Rule 2(l) of CCR, 2004 w.e.f. 01.03.2008 where sales were on FOR basis - HELD THAT: - The Tribunal examined whether the amended Rule 2(l) (restricting credit to services used in relation to outward transportation upto the place of removal) permits Cenvat Credit for GTA services transporting goods from the factory gate to the buyer's premises where sales are on FOR basis. The appellant relied on the contention that under Section 4 (and Roofit Industries) the place of removal shifts to the buyer's premises when the sale completes on delivery there, and thus credit should be admissible. The Tribunal found the facts of the present case identical to those considered by the Supreme Court in CCE & ST v. Ultratech Cement, where the Apex Court held that Cenvat Credit on GTA services for transport from place of removal to buyer's premises was not admissible. The Tribunal noted that the Supreme Court had considered (and rejected) the argument that FOR sales shift the place of removal to the buyer's premises, and that a review petition against that judgment was dismissed after re-examination of the matter. Given the identical factual and legal matrix, the Tribunal was obliged to follow the binding ratio of the Supreme Court and therefore rejected the appellant's contention that amendment to Rule 2(l) permits the claimed credit in these circumstances. [Paras 13, 14]

Appeal rejected; no Cenvat Credit admissible on GTA services for transport from factory gate to buyer's premises in the facts before the Tribunal.

Final Conclusion: The Tribunal, bound by the Supreme Court's decision in Ultratech Cement (and the dismissal of the review), held that Cenvat Credit is not admissible on Goods Transport Agency services for transport from place of removal to the buyer's premises even where sales are alleged to be on FOR basis; the appeal is rejected.

Cenvat Credit on Goods Transport Agency services - place of removal - amendment to Rule 2(l) of CCR, 2004 restricting input service to outward transportation upto the place of removal - sale on FOR basis / delivery at buyer's premises - binding precedent of the Supreme Court in Ultratech Cement

Cenvat Credit on Goods Transport Agency services - place of removal - sale on FOR basis / delivery at buyer's premises - amendment to Rule 2(l) of CCR, 2004 restricting input service to outward transportation upto the place of removal - binding precedent of the Supreme Court in Ultratech Cement - Entitlement to Cenvat Credit on Goods Transport Agency services for transport of cement from factory to buyer's premises after the amendment to Rule 2(l) of CCR, 2004 where sales are on FOR basis. - HELD THAT: - The amended definition of "input service" in Rule 2(l) of CCR, 2004 (w.e.f. 01.03.2008) confines admissible credit in respect of outward transportation to services used "upto the place of removal." The appellant's contention that, because sales were on FOR basis and delivery occurred at the buyer's premises, the "place of removal" should be the buyer's premises was considered in light of the Supreme Court's decision in Ultratech Cement. The Supreme Court examined and rejected the identical contention there, holding that Cenvat Credit on goods transport agency services for transportation from the place of removal to the buyer's premises is not admissible. The review of that decision was dismissed by the Supreme Court, reaffirming the ratio. Given the factual parity with Ultratech Cement and the binding character of the Supreme Court's decision, the Tribunal is obliged to follow that precedent and deny the claimed credit despite the appellant's reliance on the FOR-basis submission and earlier fora that had allowed credit. [Paras 8, 9, 11, 13]

Appeals are rejected; no Cenvat Credit admissible for GTA services for transport from factory to buyer's premises under the amended Rule 2(l) of CCR, 2004.

Final Conclusion: The Tribunal, being bound by the Supreme Court's decision in Ultratech Cement which disallows Cenvat Credit on goods transport agency services for transport from the place of removal to the buyer's premises, dismisses the appeals and refuses the claimed credit under the amended Rule 2(l) of CCR, 2004.

Penalty under Section 11AC - confiscation and redemption fine - clandestine removal - admission of shortage and payment of duty - preventive stock taking - penalties on individuals under Rule 26

Penalty under Section 11AC - clandestine removal - admission of shortage and payment of duty - Penalty under Section 11AC cannot be sustained where shortages discovered on preventive stock taking are admitted and duty is paid in the absence of evidence of clandestine removal. - HELD THAT: - The Tribunal found that the only material was a shortage discovered during preventive officers' stock taking and an admission of shortage by the assessee, followed by payment of duty. There was no investigation or specific charge establishing clandestine removal. In these circumstances the imposition of penalty under Section 11AC, which presupposes clandestine clearance or culpability beyond mere shortage, was held to be unsustainable. The Tribunal relied on the reasoning in Pentagon Steel Pvt. Ltd. as directly analogous and declined to uphold the Section 11AC penalty. Consequently, where duty for the shortage has been paid and no clandestine removal is shown, Section 11AC penalty is to be set aside.

Section 11AC penalty set aside.

Confiscation and redemption fine - preventive stock taking - Confiscation and attendant redemption fine cannot be imposed where the goods are not available for confiscation. - HELD THAT: - The adjudicating authority ordered confiscation of raw materials and imposed a redemption fine in lieu. The Tribunal observed it was an admitted fact that the goods were not available for confiscation. Following the Larger Bench decision in Shiv Kripa Ispat, goods that are not available cannot be confiscated and no redemption fine can be levied in their stead. Accordingly, the order for confiscation and the consequential redemption fine were set aside.

Confiscation order and redemption fine set aside.

Penalties on individuals under Rule 26 - penalty under Section 11AC - admission of shortage and payment of duty - Personal penalties on authorized signatories imposed as consequential to Section 11AC cannot be sustained when the principal Section 11AC penalty is not attracted for lack of clandestine removal and there is no invocation of extended period. - HELD THAT: - Penalties of Rs. 1,00,000 each on individuals were reduced by the Commissioner(Appeals) and further contested. The Tribunal noted that because the substantive Section 11AC penalty was not maintainable in the absence of any evidence of clandestine removal and the demand pertained to the normal period (no extended period invoked), the consequential personal penalties imposed on the authorized signatories could not stand. Applying the same rationale that negates the principal penalty where only admitted shortages exist and duty has been paid, the Tribunal set aside the personal penalties.

Personal penalties on the individuals set aside.

Final Conclusion: All appeals allowed: the Section 11AC penalty, the order of confiscation and redemption fine, and the consequential personal penalties were set aside in view of admitted shortages with duty paid and absence of any evidence of clandestine removal.

Summary order. Delay condoned; leave granted; matter tagged with SLP (C) No. 6083/2014.

Clandestine manufacture and clearance - requirement of corroborative evidence for clandestine clearances - cum-duty valuation benefit - remand for computation of duty - penalty equivalent to duty payable

Clandestine manufacture and clearance - requirement of corroborative evidence for clandestine clearances - Whether the duty demand based on entries in the pocket diary (Annexure D1) is sustainable. - HELD THAT: - The Tribunal had earlier observed that entries in the pocket diary (Annexure D1) lacked corroboration by transport documents, purchase invoices, raw material consumption records and other tangible evidence. The adjudicating authority again relied primarily on statements without addressing the specific corroborative deficiencies identified by the Tribunal. Applying established criteria for proving clandestine manufacture and clearance (tangible evidence of manufacture/clearance, discovery/transport/sales/receipt of proceeds, excess raw material consumption, electricity usage, buyer statements and linkages between recovered documents and factory activities), the Bench found that none of these corroborative elements were put forward or discussed in the Order in Original. Consequently the demand rooted in Annexure D1 could not be sustained and was set aside. [Paras 5]

Demand as per Annexure D1 is set aside for want of corroborative evidence.

Cum-duty valuation benefit - remand for computation of duty - How the admitted liabilities under Annexures D2 and D3 are to be dealt with. - HELD THAT: - The appellants accepted liability in respect of Annexures D2 and D3 subject to claim of SSI exemption and seeking cum duty valuation. The Tribunal accepted that the admitted liability can be sustained but directed that computation of duty be carried out by the original authority after allowing the cum duty benefit. Thus the matter was remanded for fresh computation and quantification consistent with the remand direction. [Paras 5, 6]

Annexures D2 and D3 remanded to the original authority to compute duty after allowing cum duty benefit.

Clandestine manufacture and clearance - Whether the demand relating to Annexure D4 (goods alleged) is sustainable. - HELD THAT: - The appellants contended that the goods in Annexure D4 were lying in the factory on the date of visit and there was no case of removal without payment of duty. The Bench accepted that the Department did not establish removals without payment of duty in respect of Annexure D4 and accordingly set aside the demand related to Annexure D4. [Paras 5, 6]

Demand as per Annexure D4 is set aside.

Penalty equivalent to duty payable - Extent of penalty payable by M/s. Suraj Machine Tools in view of the adjudicated demands. - HELD THAT: - Since duty was confined only to the liabilities arising from Annexures D2 and D3 after remand and computation with cum duty benefit, the Tribunal held that the penalty payable by the main appellant should be equivalent to the duty ultimately payable as computed in those annexures. The Tribunal therefore directed that M/s. Suraj Machine Tools shall pay penalty equal to the duty determined pursuant to the remand. [Paras 5, 6]

Penalty on M/s. Suraj Machine Tools to be equivalent to the duty payable as computed for Annexures D2 and D3.

Final Conclusion: The appeal is allowed in part: demand based on Annexure D1 and Annexure D4 set aside; liability under Annexures D2 and D3 is remanded for computation after allowing cum duty benefit; penalty on the main appellant is directed to be equivalent to the duty as so computed.

Reversal of proportionate CENVAT credit - eligibility of CENVAT credit on input services for exempted goods exported - Rule 6(6)(v) exception for goods cleared for export under bond - exemption under Notification No. 30/2004 - inputs contained in waste eligible for CENVAT credit - procedural requirement of bond not affecting substantive credit entitlement

Eligibility of CENVAT credit on input services for exempted goods exported - Rule 6(6)(v) exception for goods cleared for export under bond - procedural requirement of bond not affecting substantive credit entitlement - exemption under Notification No. 30/2004 - Credit of service tax paid on input services used in manufacture of goods exempted under Notification No. 30/2004 and exported is eligible and need not be reversed. - HELD THAT: - The Tribunal examined Rule 6(6)(v) of the CENVAT Credit Rules, 2004 which excepts from the Rule 6(1) bar cases where exempted excisable goods are cleared for export under bond. Earlier decisions of High Courts and Tribunals (including Drish Shoes Ltd., Repro India Ltd., Jolly Board Ltd., Lavino Kapur Cottons and GPI Textiles) establish that where final products are exported, credit of inputs and input services used in their manufacture is admissible and that the formal requirement of executing a bond/LUT is procedural and does not defeat the substantive entitlement to credit or refund. Applying those precedents and Rule 6(6)(v), the Tribunal held that the Department's demand to reverse credit on input services merely because no bond was executed is contrary to law, and therefore the impugned finding on this point is set aside in favour of the appellant. [Paras 6]

Found for the appellant; credit on input services used in manufacture of exempted goods exported is eligible and need not be reversed.

Inputs contained in waste eligible for CENVAT credit - reversal of proportionate CENVAT credit - CENVAT credit attributable to inputs contained in yarn waste (waste, refuse or by-product) is admissible and not liable to be reversed. - HELD THAT: - The Tribunal referred to Rule 57D of the erstwhile MODVAT scheme and paragraph 3.7 of the Department's Supplementary Instructions, which state that credit is admissible in respect of inputs contained in waste, refuse or by-product. Tribunal decisions (including Eveready Industries) support that such credit is not required to be reversed. The appellants were not found to be deliberately manufacturing waste; the credit relating to inputs in waste is therefore allowable and the demand in respect of yarn waste was unsustainable. [Paras 7]

Found for the appellant; credit on inputs contained in yarn waste is admissible and demand on this ground is set aside.

Clearances manufactured on job work basis - reversal of proportionate CENVAT credit - Whether clearances of yarn manufactured on job work basis must be included in the value of exempted clearances was not finally adjudicated and is remanded for verification. - HELD THAT: - The Commissioner (Appeals) had remanded the question concerning clearances of goods manufactured on job work basis to the Original Authority for verification. The Tribunal did not disturb that direction and confined its adjudication to the issues relating to exported exempted goods and yarn waste. Consequently, the job-work related issue requires fresh consideration and verification by the Original Authority as directed earlier. [Paras 8]

Remanded to the Original Authority for verification; not finally decided by the Tribunal.

Final Conclusion: The Tribunal allowed the appeal insofar as the Department demanded reversal of CENVAT credit on input services used in manufacture of goods exempted under Notification No. 30/2004 and exported, and insofar as it sought reversal of credit attributable to inputs contained in yarn waste; the direction remanding the job-work clearance issue to the Original Authority remains undisturbed. Appeal allowed with consequential reliefs.

Denial of Cenvat Credit - Input Service Distributor (ISD) registration - Invoice particulars for ISD - Rule 4A of the Service Tax Rules, 1994 - Procedural irregularity versus substantive disentitlement - Scope of Show Cause Notice and competence of adjudicating authority - Eligibility of input services as input for Cenvat credit

Denial of Cenvat Credit - Input Service Distributor (ISD) registration - Procedural irregularity versus substantive disentitlement - Whether Cenvat credit can be denied solely because the ISD issued distribution invoices prior to obtaining ISD registration. - HELD THAT: - The Tribunal examined whether non-registration of the ISD at the time of issuance of ISD distribution invoices disentitles the recipients to Cenvat credit. On the facts the invoices (with attachments) established correlation with underlying input service invoices and there was no finding that service tax was unpaid or that the recipient did not use the services. Relying on precedent in Doshion Ltd. and the affirming view of the Hon'ble Gujarat High Court, the Tribunal treated non-registration as a procedural irregularity which, where records are available and no revenue loss is shown, cannot be a ground to deny credit. The decisions relied upon by Revenue which did not consider the Gujarat High Court's view were distinguished. [Paras 11, 12, 13]

Credit cannot be denied solely because the ISD issued invoices before obtaining ISD registration; such non-registration is a curable procedural irregularity and does not disentitle the appellant to Cenvat credit.

Invoice particulars for ISD - Rule 4A of the Service Tax Rules, 1994 - Whether the ISD invoices were deficient under Rule 4A and whether deficit particulars required of a service-provider invoice under Rule 4A(1) are also required in ISD invoices under Rule 4A(2). - HELD THAT: - The Tribunal read Rule 4A and held that sub-rule (2) prescribes the particulars an ISD invoice must contain (including the name, registration number and serial number of the service-provider invoice, name/address of ISD, recipient and amount of credit distributed). On perusal, the ISD invoices together with attachments contained the information required by Rule 4A(2). The adjudicating authority had gone beyond sub-rule (2) by insisting on particulars mandated for supplier invoices under Rule 4A(1); expecting Rule 4A(1) particulars in ISD invoices was without legal basis. Consequently the alleged deficiencies did not justify denial of credit. [Paras 14, 15]

ISD invoices (with attachments) complied with the particulars required under Rule 4A(2); denial of credit for not including Rule 4A(1) particulars in ISD invoices was without authority.

Scope of Show Cause Notice and competence of adjudicating authority - Eligibility of input services as input for Cenvat credit - Whether the adjudicating authority could decide on the substantive admissibility of the input services (eligibility) when such a contention was not raised in the SCN. - HELD THAT: - The Tribunal noted that the SCN did not challenge the eligibility of the input services on merits; the adjudicating authority proceeded to disallow credit on grounds not contained in the SCN. An order travelling beyond the scope of the SCN is not sustainable. The Tribunal therefore declined to adjudicate admissibility of input services which was not put in issue by the SCN. [Paras 16]

Adjudicating authority exceeded the scope of the SCN by deciding on eligibility of input services not raised therein; such denial is unsustainable.

Final Conclusion: The appellant was entitled to the Cenvat credit claimed on ISD invoices for the period September 2005 to March 2007: non-registration of the ISD at time of issuance was a curable procedural irregularity, the ISD invoices (with attachments) complied with Rule 4A(2), and the adjudicating authority could not deny credit on eligibility grounds not raised in the SCN. Accordingly the assessee's appeals are allowed and the Revenue's appeal against penalty is dismissed as consequential.

Applicability of Central Excise Rules to 100% EOU - confiscation under Rule 209 - redemption fine in lieu of confiscation - penalty under Rule 209A - confiscation of plant and machinery under Rule 173Q(2) - remand for fresh adjudication

Applicability of Central Excise Rules to 100% EOU - confiscation under Rule 209 - penalty under Rule 209A - redemption fine in lieu of confiscation - confiscation of plant and machinery under Rule 173Q(2) - Whether the adjudicating authority had considered and decided the applicability of the cited Central Excise Rules to a 100% EOU and whether the impugned order could stand without such examination. - HELD THAT: - The Tribunal found that the adjudicating authority did not examine the core legal question raised by the appellant-whether Rules and provisions invoked in the adjudication (including confiscation under Rule 209, imposition of redemption fine in lieu of confiscation, penalties under Rule 209A, and confiscation of plant and machinery under Rule 173Q(2)) are applicable to a 100% EOU. Given the centrality of that legal issue, the Tribunal held that the impugned order could not be sustained without a fresh determination by the adjudicating authority. In consequence, the Tribunal set aside the impugned adjudication and remanded the matter for passing a fresh order on all issues, explicitly including the question of applicability of the various Rules to the 100% EOU.

Impugned order set aside and matter remanded to the adjudicating authority for fresh adjudication on all issues including applicability of the cited Rules to a 100% EOU.

Remand for fresh adjudication - Disposition of the Revenue's consequential appeal pending against the same adjudication. - HELD THAT: - The Tribunal recorded that the Revenue's appeal was consequential upon the adjudication appealed by the assessee. Since the impugned order was set aside and remanded for fresh consideration, the Tribunal disposed of the Revenue's appeal by remanding it to the adjudicating authority as well, so that all disputes arising from the original adjudication may be revisited together.

Revenue's appeal disposed of by remand to the adjudicating authority.

Final Conclusion: The Tribunal set aside the adjudicating order and remitted the matter to the adjudicating authority for fresh adjudication on all issues, specifically directing reconsideration of the applicability of the invoked Central Excise Rules to a 100% EOU; the Revenue's consequential appeal was also remanded.

Ownership of brand name - SSI exemption - reliance on drug authority approvals and labelling - label/marking as evidence of trademark ownership

Ownership of brand name - SSI exemption - reliance on drug authority approvals and labelling - Whether the appellant was the owner of the brand name of the medicaments and thereby entitled to SSI exemption - HELD THAT: - The Tribunal examined the record of remands and the third adjudication where the Adjudicating Authority accepted evidence from the drug authority that names of the medicines were approved in the appellant's name. The Commissioner (Appeals), however, disagreed on the ground that the product labelling bore inscriptions such as "Registered trade mark of Mercury Antibiotics Pvt. Limited, Baroda" and "Marketed by Mercury Laboratories Pvt. Limited, Baroda". The court observed that for medicines the material description, including ownership of brand name and markings, is submitted to and approved by the drug authority under the statutory regime governing drugs and food. Such statutory labelling and approvals cannot be disregarded in determining ownership of the brand name. In the absence of any contradictory evidence to the labelling and approvals recorded by the drug authority, the Tribunal accepted the Commissioner (Appeals)'s conclusion that the brand name belongs to Mercury Antibiotics Pvt. Limited, Baroda, and not to the appellant. Consequently, the appellant could not claim SSI exemption based on ownership of the brand name. [Paras 5, 6]

The appellant is not the owner of the brand name of the medicaments; the product labelling and drug authority approvals establish ownership by Mercury Antibiotics Pvt. Limited, Baroda, and the appellant is therefore not eligible for SSI exemption.

Final Conclusion: The impugned order of the Commissioner (Appeals) holding that the brand name belongs to Mercury Antibiotics Pvt. Limited, Baroda, is upheld; the appeal is dismissed and the appellant is not entitled to SSI exemption.

Comprehensive Karasamadhana Scheme, 2019 - waiver of penalty and interest - undertaking to pay tax dues - ex parte assessment - condonation of delay - jurisdiction of appellate tribunal to condone delay

Comprehensive Karasamadhana Scheme, 2019 - waiver of penalty and interest - undertaking to pay tax dues - Affidavit undertaking by the respondent to pay remaining tax dues under the Comprehensive Karasamadhana Scheme, 2019 accepted and revision petitions disposed of in terms thereof. - HELD THAT: - The respondent filed an affidavit undertaking to pay the remaining tax amount on or before the date fixed under the Government's Comprehensive Karasamadhana Scheme, 2019. The Government Order establishing the scheme, which provides for waiver of 100% of arrears of penalty and interest, was placed on record. The learned AGA conceded that the respondent, being a dealer, was entitled to avail benefits under the scheme. In view of the respondent's undertaking and the scheme's availability, the Court treated the dispute over assessment as rendered academic and took the affidavit on record, disposing the Sales Tax Revision Petitions in terms of that affidavit. [Paras 5, 6, 12, 13]

Affidavit accepted; revision petitions disposed of in terms of the undertaking to pay remaining dues under the scheme.

Ex parte assessment - condonation of delay - jurisdiction of appellate tribunal to condone delay - Competence of the Appellate Tribunal to condone delay beyond the statutory period was not finally adjudicated and is left open. - HELD THAT: - The revenue contested the Sale Tax Appellate Tribunal's condonation of delay in entertaining the respondent's appeal against an earlier ex parte order, contending that the Tribunal lacked jurisdiction to condone delay beyond the period stipulated under the relevant statute. The Court observed that, although the contention merited consideration, it would be academic in the present proceedings because of the respondent's undertaking under the Karasamadhana Scheme. Consequently, the Court expressly refrained from deciding the jurisdictional question and left the matter open to be agitated and adjudicated in an appropriate proceeding. [Paras 11, 12, 13]

Jurisdictional question concerning condonation of delay left open for determination in appropriate proceedings.

Final Conclusion: The Sales Tax Revision Petitions are disposed of by recording the respondent's affidavit undertaking to pay the remaining tax dues under the Comprehensive Karasamadhana Scheme, 2019; the question whether the Appellate Tribunal could lawfully condone the delay beyond the statutory period is left open for adjudication in a proper forum.

Maintainability of writ petition in presence of alternative statutory remedy - principles of natural justice - duty to furnish incriminating documents - inadmissibility of writ adjudication of disputed factual questions - condonation of delay - appellate authority to consider appeal without objection to limitation

Maintainability of writ petition in presence of alternative statutory remedy - inadmissibility of writ adjudication of disputed factual questions - Writ petition seeking to challenge assessment and appellate orders is not maintainable when statutory appellate remedy is available and disputed facts require adjudication by the statutory forum. - HELD THAT: - The Court held that the petitioner, having availed the statutory appeal route under the KVAT Act and having suffered an adverse order from the appellate authority, cannot circumvent the statutory machinery by invoking writ jurisdiction solely on the ground that certain documents were not furnished. Disputed factual questions arising from assessment proceedings are not amenable to adjudication in writ proceedings and must be ventilated before the designated appellate forum. Consequently, the petition is required to be dismissed for want of maintainability while preserving the petitioner's right to pursue the statutory remedy. [Paras 5, 7, 8]

Writ petition dismissed as not maintainable; disputed factual issues to be decided by the statutory appellate forum.

Principles of natural justice - duty to furnish incriminating documents - Challenge that assessments were vitiated for failure to furnish incriminating documents was negatived on the recorded basis that the particular documents relied upon were placed on record and furnished. - HELD THAT: - The Court recorded that the petitioner alleged non-furnishing of incriminating material relied upon by the Assessing Officer. However, the revenue filed statement of objections disclosing the documents at Annexures-R1 and R2 and contended that no other documents were relied upon. On this basis the Court found the ground of non-furnishing to be liable to be rejected and held that the complaint of violation of natural justice, insofar as it depended on undisclosed reliance material, did not sustain the writ challenge. [Paras 4, 8]

Ground of non-furnishing of incriminating documents rejected on the record; no basis shown for setting aside the orders on that ground in writ proceedings.

Condonation of delay - appellate authority to consider appeal without objection to limitation - Court granted liberty to the petitioner to file the statutory appeal within a limited time and directed the appellate authority to consider it on merits without raising objection to limitation. - HELD THAT: - Although the writ petition was dismissed, the Court exercised its discretion to permit the petitioner to invoke the statutory appellate remedy by filing an appeal within four weeks. The Appellate Tribunal was directed to consider the appeal on merits and not to object on the ground of limitation, thereby preserving the petitioner's substantive remedy before the statutory forum. [Paras 8]

Liberty granted to file appeal within four weeks; appellate authority to consider the appeal on merits and not object to limitation.

Final Conclusion: Writ petition dismissed as not maintainable because the statutory appellate remedy is available and disputed factual issues cannot be adjudicated in writ jurisdiction; the petitioner is granted liberty to file the statutory appeal within four weeks, which the Appellate Tribunal shall consider on merits without raising limitation objections.

Delay in delivery of possession - justification for delay arising from orders of the National Green Tribunal - developer's obligation to deliver possession within contractual timeline - compensation for delayed possession by way of interest - inapplicability of forfeiture clause where delay is due to developer's default - jurisdiction of consumer forum notwithstanding RERA

Delay in delivery of possession - justification for delay arising from orders of the National Green Tribunal - Whether the delay in offering possession was justified by orders of the National Green Tribunal or other external events - HELD THAT: - The Commission held that the opposite party failed to establish that orders of the National Green Tribunal or writ petitions before the Allahabad High Court legitimately delayed construction at the project site. Prior decisions of the Commission were considered which interpret the NGT orders as applying only to projects commenced without requisite environmental clearance or in contravention of such clearance; where clearance existed, the NGT did not stay construction but only withheld completion certificates till NBWL clearance. There was no evidence that construction at this site was stayed by the High Court or that farmer agitation halted work at the site. Consequently the Commission found no justification for the delay attributable to NGT orders or other external causes as pleaded by the opposite party.

Delay in offering possession is not justified by the NGT orders or the other external events relied upon by the opposite party.

Inapplicability of forfeiture clause where delay is due to developer's default - developer's obligation to deliver possession within contractual timeline - Whether clause 37 (forfeiture on cancellation by allottee) entitles the developer to forfeit 15% where the allottee seeks refund because the developer failed to deliver possession within the contractual period - HELD THAT: - Clause 37 was construed as applying to cancellations initiated by the allottee for his own reasons. The Commission distinguished that clause from situations where the allottee is compelled to seek cancellation because the developer failed to deliver possession within the agreed timeline. Since the complainant sought relief after the expiry of the possession period (including the contractual grace period), the forfeiture clause did not apply to bar refund for the developer's failure to deliver possession.

Clause 37 does not entitle the opposite party to forfeit 15% where the allottee seeks cancellation and refund on account of the developer's failure to deliver possession within the contractual period.

Compensation for delayed possession by way of interest - consumer forum jurisdiction notwithstanding RERA - Relief to be granted to the complainant and maintainability of the complaint before the Commission - HELD THAT: - Relying on the Commission's earlier view that its jurisdiction to entertain consumer complaints remains despite RERA, and on authorities recognising entitlement to refund where possession is not delivered within the committed period, the Commission accepted the complainant's claim for refund of the principal amount paid together with compensation by way of simple interest. The complainant limited his relief to refund of the principal along with simple interest at 10% per annum from the date of each payment until refund and sought costs. The Commission found it inappropriate to require the complainant to wait further for completion where there was no certainty as to completion and the complainant had lost trust in the developer's ability to deliver possession within a reasonable time.

Complaint is maintainable before the Commission; the complainant is entitled to refund of the principal amount with simple interest at 10% per annum and to litigation costs.

Final Conclusion: The Commission allowed the complaint and directed refund of the principal amount paid to the opposite party with simple interest at 10% per annum from the date of each payment until refund, awarded litigation costs to the complainant, and directed payment within three months.