TaxTMI Updates e-Newsletter
Jul 04,2020

Advance ruling - maintainability under Section 95 of the CGST Act - recipient of services - reverse charge mechanism - renting of immovable property services - Special Economic Zone (SEZ) and zero-rated supply

Advance ruling - maintainability under Section 95 of the CGST Act - recipient of services - Whether the application for advance ruling is maintainable where the applicant is only a recipient of rented immovable property services and has not undertaken or proposed to undertake the supply of goods or services. - HELD THAT: - The Authority examined its jurisdiction under Chapter XVII of the CGST Act and the scope of an advance ruling as conferred by Section 95, which permits a ruling only in relation to supplies of goods or services or both being undertaken or proposed to be undertaken by the applicant. The facts and the sub-lease agreement show that the applicant is the recipient of domestic renting of immovable property services from the SEEPZ SEZ Authority and has not initiated or proposed any supply in respect of the transaction. As the impugned transactions do not pertain to any supply undertaken or proposed by the applicant, the statutory precondition for admission under Section 95 is not satisfied. Consequently the application could not be admitted and the Authority declined to decide the merits of the questions framed regarding applicability of reverse charge or the tax head. [Paras 5]

Application for advance ruling rejected as non-maintainable because the applicant is a recipient of the services and not a supplier or proposer of supply within the meaning of Section 95.

Final Conclusion: The Authority rejected the advance ruling application as not maintainable under the CGST Act since the applicant sought a ruling as a service recipient rather than in relation to a supply undertaken or proposed to be undertaken by it; the merits of reverse charge applicability were not adjudicated.

Input tax credit - construction of immovable property on his own account - renting of immovable property - blocked credit under Section 17(5)(d) - eligibility under Section 16(1)

Input tax credit - construction of immovable property on his own account - blocked credit under Section 17(5)(d) - renting of immovable property - Applicant is not eligible to claim input tax credit on goods and services used for construction of immovable property on his own account, even though the property is subsequently let out on rent. - HELD THAT: - The Authority examined Sections 16 and 17 of the CGST Act and found Section 17(5)(d) to be determinative. Section 17(5)(d) expressly bars input tax credit in respect of goods or services received by a taxable person for construction of an immovable property (other than plant or machinery) on his own account, including where such goods or services are used in the course or furtherance of business. In the present case the applicant constructed the property on his own account and the property is not plant or machinery; consequently Section 17(5)(d) applies squarely and precludes entitlement to input tax credit. The Authority declined to follow the contrary decision of the Hon'ble Orissa High Court in Safari Retreats Pvt. Ltd. because that judgment is under appeal to the higher court and has not attained finality; reliance was instead placed upon similar advance rulings which disallow credit where construction is on the taxpayer's own account. For these reasons the claim for ITC was rejected. [Paras 5, 6]

Claim for input tax credit in respect of goods and services used for construction of the applicant's immovable property is denied.

Final Conclusion: The Authority answers the question in the negative: the applicant cannot claim input tax credit on inputs and input services used for construction of the commercial immovable property built on his own account, notwithstanding that the property is subsequently rented.

Advance ruling - maintainability under Section 97(2) in relation to supply undertaken by the applicant - recipient versus supplier distinction for scope of advance ruling - issuance of tax invoice and entitlement to input tax credit - transfer of input tax credit

Maintainability under Section 97(2) in relation to supply undertaken by the applicant - recipient versus supplier distinction for scope of advance ruling - issuance of tax invoice and entitlement to input tax credit - Whether the applicant could seek an advance ruling on the requirement of the co-operative society to issue separate invoices to co-owners for common area maintenance charges so that each co-owner could claim proportionate input tax credit. - HELD THAT: - The Authority examined its jurisdiction under Chapter XVII and found that Section 95/97 permits advance rulings only on matters in relation to supplies of goods or services undertaken or proposed to be undertaken by the applicant. The maintenance charges at issue were collected and the services rendered by the co-operative society; the applicant is only a recipient. The question raised concerns the procedure the society must follow in issuing invoices to its recipients. Since the supply is undertaken by the society and not by the applicant, the question does not fall within the matters on which this Authority can rule under Section 97(2). Consequently the application on this point is not maintainable and the merits were not considered. [Paras 5]

Application is not maintainable and cannot be admitted insofar as it seeks a ruling on whether the society must issue separate invoices to each co-owner for entitlement to input tax credit.

Advance ruling - maintainability under Section 97(2) in relation to supply undertaken by the applicant - transfer of input tax credit - Whether there exists any provision under the CGST Act permitting transfer of input tax credit when lump-sum tax is charged to only one co-owner so that other co-owners may avail credit. - HELD THAT: - Having held that the application is not maintainable because the applicant is a recipient and the supply is by the society, the Authority further noted that the question on transferability of credit raised does not fall within the matters enumerated under Section 97(2). The Authority therefore declined to adjudicate on the substantive question of whether credit charged to one co-owner can be transferred to others, as the application seeking such a ruling is outside its jurisdiction. [Paras 5]

Application is not maintainable and is rejected insofar as it seeks a ruling on the transferability of input tax credit charged to a single co-owner.

Final Conclusion: The Authority rejected the applicant's advance ruling application under sub-section (2) of Section 98 of the CGST Act, 2017, concluding that the questions framed relate to supplies undertaken by the co-operative society (not by the applicant) and therefore fall outside the scope of matters on which this Authority may pronounce an advance ruling.

Advance ruling - maintainability of application - requirement that applicant undertake or propose supply - recipient of services - reverse charge mechanism

Advance ruling - maintainability of application - requirement that applicant undertake or propose supply - recipient of services - Application for advance ruling held not maintainable as the applicant is a recipient of services and has not undertaken or proposed to undertake the supply of goods or services. - HELD THAT: - The Authority examined its jurisdiction under the advance ruling provisions which permit a ruling only where the questions arise in relation to a supply of goods or services being undertaken or proposed to be undertaken by the applicant. The facts show that the applicant sought a ruling as a recipient of intermediary services provided by a person located abroad and did not contend that it was undertaking or proposing the relevant supply. Since the matters raised do not relate to any supply by the applicant, the application falls outside the scope of the advance ruling jurisdiction and is not admissible. Consequently, the Authority declined to consider the merits of whether the impugned services attract tax under the reverse charge mechanism or whether input tax credit would be available. [Paras 5]

Application rejected as not maintainable; substantive questions not answered.

Final Conclusion: The Authority dismissed the application for lack of maintainability because the applicant was a recipient of services and not undertaking or proposing the supply; the substantive questions on applicability of reverse charge and entitlement to input tax credit were not answered.

Services by an employee to the employer in the course of or in relation to his employment - Project Office as an extension/branch of the foreign Head Office - accounting entry recording salary cost not constituting a supply - application of Schedule III exclusion to employment services - regulatory character of Project Offices under FEMA Regulations

Project Office as an extension/branch of the foreign Head Office - services by an employee to the employer in the course of or in relation to his employment - accounting entry recording salary cost not constituting a supply - application of Schedule III exclusion to employment services - Whether the accounting entry in the Project Office books for salary cost of expatriate employees (paid by the Head Office) is a taxable supply attracting GST. - HELD THAT: - The Authority examined the legal character of a Project Office under the FEMA Regulations and the Companies Act and found that a Project Office is set up to represent and execute a specific project of the foreign company in India and operates as an extension of the Head Office. The facts show that expatriate staff working in the Project Office are employees of the Head Office, the Project Office maintains accounts to reflect true and fair view for Indian statutory compliances, and PAN/TAN and employer obligations (including TDS/Form 16) are discharged in India. Because the relationship between the expatriates and the employer is that of employee-employer and the Project Office functions as an extension of the Head Office, the relevant entry in the Project Office books merely records salary cost and does not reflect a separate supply of service by any identifiable supplier to any recipient for consideration. In these circumstances the exclusion in Schedule III of the CGST Act - that services by an employee to the employer in the course of or in relation to his employment are not supplies - applies. Consequently, the accounting entry for salary cost, made for compliance with Indian accounting requirements and without any obligation to remit consideration by the Project Office to the Head Office, does not amount to a supply liable to GST. [Paras 5]

The accounting entry of salary cost of expatriate employees in the Project Office books is not a taxable supply and GST is not applicable.

Final Conclusion: The Authority answered the reference in the negative: the accounting entry made in the Project Office books for salary cost of expatriate employees (though paid by the Head Office) does not constitute a supply and is not subject to GST.

Goods Transport Agency (GTA) - consignment note - classification under SAC 996511 - eligibility for input tax credit (ITC) - forward charge mechanism - reverse charge mechanism - condition of non-availment of input tax credit for concessional GTA rate

Goods Transport Agency (GTA) - classification under SAC 996511 - consignment note - Classification of the applicant's services where the applicant issues the consignment note but actual transportation is performed by a third-party transporter - HELD THAT: - The Authority found on the facts that the applicant provides services in relation to transportation of goods by road to POSCO group companies and issues consignment notes which are stamped by the receiver on delivery. Applying the explanatory notes to the scheme of classification and the definition of 'GTA' in the relevant notification, the Authority concluded that issuance of consignment notes together with provision of road-transport related services brings the activity within the concept of a Goods Transport Agency. Consequently the services fall under the Goods Transport Services heading and, more particularly, within SAC/Heading 996511 (road transport services of goods). The Authority relied on the nature of services actually rendered and the issuance/acknowledgement of consignment notes to reach this classification.

Services supplied by the applicant are covered under Heading 996511.

Forward charge mechanism - condition of non-availment of input tax credit for concessional GTA rate - classification under SAC 996511 - Applicable GST rate on the applicant's services classified under SAC 996511 - HELD THAT: - Having held that the services fall under SAC 996511, the Authority applied the entries in the relevant rate notification dealing with Goods Transport Agency services. The Authority explained the two alternatives available under the notification for GTA supplies: a concessional effective rate (subject to non availment/ reversal of input tax credit as prescribed in the notification) or payment of tax under the forward charge option enabling availment of ITC subject to Chapter V of the CGST Act. Accordingly, the Authority concluded that Entry 9(iii) of the rate notification applies: an effective lower rate (5% as provided in the notification) is available provided the condition of non availment/reversal of input tax credit is satisfied; alternatively, the GTA may opt to discharge tax at the specified rate under forward charge (12% as framed in the order) and thereafter be eligible to claim ITC subject to statutory conditions.

GST for the applicant's services is governed by Entry 9(iii) of the rate notification: a concessional rate subject to non availment/reversal of ITC, or otherwise the forward charge rate with entitlement to ITC subject to Chapter V conditions.

Eligibility for input tax credit (ITC) - third-party transporter - forward charge mechanism - Whether the applicant is entitled to claim ITC of GST charged by third-party transporters - HELD THAT: - The Authority noted that entitlement to ITC depends on tax having been paid by the supplier and compliance with Chapter V conditions. On the material before it, the Authority observed that third party transporters supplying services to the applicant were, prima facie, classifying their supplies under the notification entry for hiring of vehicles and were not charging GST to the applicant (i.e., no tax was paid). Because no GST was paid by those third party transporters on the supplies to the applicant, the applicant cannot claim ITC in respect of those supplies. The Authority's conclusion is therefore fact sensitive and rests on the recorded position that no GST was charged by the third parties.

Applicant cannot avail ITC in respect of services of third party transporters where those transporters have not charged and paid GST.

Forward charge mechanism - Goods Transport Agency (GTA) - Whether a transporter may charge GST @12% under forward charge to the applicant when the applicant as main contractor is already charging GST @12% (question on another supplier's chargeability) - HELD THAT: - The Authority declined to answer this query because it did not pertain to supplies undertaken by the applicant and therefore fell outside the scope of matters on which an advance ruling may be given under the governing statute. No adjudication on the substantive question was therefore made by this Authority.

Question not answered by the Authority.

Goods Transport Agency (GTA) - consignment note - procedural correctness - Procedural correctness of having two GTA service providers and two consignment notes for the same movement of goods (one by the applicant and one by the sub contracted transporter) - HELD THAT: - The Authority observed that the question is procedural in nature and does not fall within the scope of matters enumerated for advance rulings under the statute. Consequently, the Authority refrained from answering this procedural question and made no determination on whether simultaneous issuance of two consignment notes or dual GTA status for the same movement is correct.

Question not answered by the Authority.

Final Conclusion: The Authority ruled that the applicant's services are taxable as Goods Transport Services under SAC/Heading 996511 and that Entry 9(iii) of the rate notification applies (concessional treatment if the prescribed non availment/reversal of ITC condition is satisfied, otherwise tax under forward charge with ITC subject to Chapter V). The applicant cannot claim ITC for supplies by third party transporters where those transporters have not charged GST. Two questions concerning another supplier's charging of tax and procedural correctness of dual consignment notes were not answered by the Authority.

Summary order. Exemption applications allowed; notice issued; respondents directed to file counter-affidavits within four weeks and petitioner may file rejoinder within four weeks thereafter; matter listed on 16th September 2020 to await the Supreme Court judgment in Union of India v. Brand Equity Treaties Ltd.; order to be uploaded and forwarded to counsel.

Provisional manual filing of GST Tran-I Form - effect of stay by the Supreme Court on operation of a High Court decision - relief contingent on outcome of Special Leave Petition

Provisional manual filing of GST Tran-I Form - effect of stay by the Supreme Court on operation of a High Court decision - Petition for direction to permit provisional manual filing of the GST Tran-I Form despite the Supreme Court stay of the High Court decision. - HELD THAT: - The Court declined to grant the specific relief of mandating respondents to open the GST portal or to permit provisional manual filing of the GST Tran-I Form while the decision in Brand Equity Treaties Limited is subject to a stay by the Supreme Court. The court noted that the Supreme Court's stay on the earlier High Court decision limits the relief that can be given at this stage and therefore refused to issue the provisional filing direction sought by the petitioner. The Court observed that the petitioner had filed the writ petition before the 30.06.2020 cut-off and listed the matter, but that this procedural position did not justify overriding the effect of the Supreme Court stay.

Direction for provisional manual filing of the GST Tran-I Form was refused.

Relief contingent on outcome of Special Leave Petition - remedial power of High Court if Special Leave Petition is rejected - Whether the High Court retains power to direct acceptance of the GST Tran-I Form at a later date if the Supreme Court rejects the Special Leave Petition and upholds the High Court decision. - HELD THAT: - The Court held that if the Special Leave Petition preferred by the respondents is rejected by the Supreme Court and the High Court's earlier decision in Brand Equity Treaties Limited is thus upheld, the High Court would not be powerless; it would be able to direct respondents to accept the GST Tran-I Form of petitioners who had filed writ petitions before the 30.06.2020 deadline. This is a contingent remedial finding tied to the outcome of the SLP and does not grant immediate relief but preserves the possibility of later directions in favour of petitioners depending on the Supreme Court's final view.

If the SLP is rejected and the High Court decision is upheld, the High Court may direct respondents to accept the GST Tran-I Form at a later stage.

Entitlement to relief to be considered on merits - Substantive entitlement of the petitioner to the relief claimed under the High Court decision. - HELD THAT: - Respondents contended that even if the Brand Equity Treaties decision is upheld, the petitioner might not be entitled to the relief sought. The Court refrained from adjudicating this aspect at the interim stage and recorded that the question of the petitioner's entitlement would be considered when the writ petition is taken up for hearing on merits. This matter therefore remains for fresh consideration by the Court during the hearing of the writ petition.

The question of the petitioner's substantive entitlement to relief is reserved for determination at the time of hearing and thus remanded for fresh consideration.

Final Conclusion: The application for provisional/manual acceptance of the GST Tran-I Form was refused in view of the Supreme Court's stay; however, the High Court preserved the possibility of directing acceptance later if the Special Leave Petition is rejected and the High Court's earlier decision is upheld, while leaving the petitioner's substantive entitlement to relief to be decided on hearing.

Summary order. Exemptions allowed in the pending applications; court fees to be paid within a week in one application; notice issued in W.P.(C) 3793/2020 and the matter adjourned to 16.09.2020.

Provisional release of seized goods/vehicle under Rule 140 of the Central Goods and Service Tax Rules, 2017 - Bank guarantee as security for provisional release - Liability of transporter vis-a -vis owner of the goods - Auction of confiscated goods

Provisional release of seized goods/vehicle under Rule 140 of the Central Goods and Service Tax Rules, 2017 - Bank guarantee as security for provisional release - Provisional release of the confiscated vehicle on submission of bank guarantee in terms of Rule 140 CGST Rules, 2017. - HELD THAT: - The court applied Rule 140 of the Central Goods and Service Tax Rules, 2017 which permits provisional release of seized goods upon execution of a bond and furnishing of a security in the form of a bank guarantee equivalent to the applicable amount. The revenue informed the court that it would release the vehicle if the petitioner complied with Rule 140 by submitting the bank guarantee. The petitioner's contention that he need not furnish security because he is only the transporter and not owner of the goods was considered, but the court permitted release of the vehicle specifically on the condition that a bank guarantee equivalent to the valuation of the vehicle be furnished. The court therefore directed release of the vehicle upon satisfactory compliance with Rule 140 by the petitioner, leaving the revenue to verify the adequacy of the security before release.

Vehicle to be released to the petitioner upon submission of a bank guarantee in terms of Rule 140, subject to revenue's satisfaction.

Liability of transporter vis-a -vis owner of the goods - Auction of confiscated goods - Responsibility for the confiscated goods and permission to auction the goods in the absence of their owners. - HELD THAT: - The petitioner disclaimed ownership of the goods and produced the names of several owners, who were not present before the court. The court observed that since the petitioner claims only to be the owner of the vehicle and has disclaimed the goods, the revenue is entitled to proceed against the goods in accordance with the rules. No order was made in favour of the owners of the goods because they were not parties before the court. The court thus left to the revenue the power to auction the goods in terms of the statutory scheme.

Revenue free to auction the confiscated goods; no relief granted on behalf of the owners of the goods.

Final Conclusion: Writ petition disposed of: vehicle ordered released to the petitioner upon furnishing a bank guarantee in terms of Rule 140 CGST Rules, 2017; revenue permitted to deal with and auction the goods as per law since goods' owners were not before the court.

Withholding of refund - set-off/adjustment of refund against outstanding demands - scope and finality of orders under Section 154 read with Section 245 - inapplicability of Section 241A to assessment years prior to 2017-18 - prior approval requirement to withhold refund

Set-off/adjustment of refund against outstanding demands - scope and finality of orders under Section 154 read with Section 245 - Whether respondents could withhold the net refundable amount determined by the Assessing Officer under the order dated 28th May, 2020 (Section 154 read with Section 245) in light of pending or possible future demands. - HELD THAT: - The Court noted that the respondent No.1 had passed a common order under Section 154 read with Section 245 determining a gross refundable amount and making specific adjustments to arrive at a net refundable sum. That process under Section 245 had concluded with the order dated 28th May, 2020 and, insofar as respondents are concerned, the order has attained finality. The Court held that once the Assessing Officer has himself exercised the power under Section 245 and determined the net refundable amount, the Revenue cannot thereafter withhold that admitted refundable amount on the basis of hypothetical or as-yet-unadjudicated future demands. There is no statutory power to keep back an admitted refund on the ground that a tax liability may arise in future which is not yet adjudicated. The respondents' contention that they may have a future demand did not permit withholding of the admitted net refund determined by their own order. [Paras 21, 22, 23]

Respondents cannot withhold the admitted net refundable amount determined by the order dated 28th May, 2020; the petitioner is entitled to refund of that admitted amount.

Inapplicability of Section 241A to assessment years prior to 2017-18 - prior approval requirement to withhold refund - withholding of refund - Whether Section 241A could be invoked to withhold the refund for assessment year 2014-15 and whether it could be first raised in the affidavit-in-reply. - HELD THAT: - The Court examined Section 241A and observed that its operation is expressly limited to assessment years commencing on or after 1st April, 2017 and applies where refund becomes due under subsection (1) of Section 143. The provision further conditions the withholding power on prior approval of the Principal Commissioner or Commissioner. The assessment year in dispute is 2014-15, prior to the statutory cut-off; accordingly Section 241A is not attracted. The Court also recorded that respondents sought to invoke Section 241A for the first time in their affidavit-in-reply and that such invocation was impermissible on the facts. Moreover, there was no prior approval recorded from the Principal Commissioner/Commissioner to withhold any refund. [Paras 24, 25, 26, 27]

Section 241A is not applicable to the refund for assessment year 2014-15 and cannot be invoked to withhold the refund in this case; respondents have not satisfied the prior-approval requirement.

Set-off/adjustment of refund against outstanding demands - Whether the specific adjustment of certain demands against the gross refundable amount (i.e., the correctness of the adjustment of the sum determined as payable against the refund) is finally adjudicated. - HELD THAT: - The Court observed that the assessment of whether particular demands could properly be adjusted against the refund (the correctness of the specific deduction made by respondent No.1) is a contentious issue raised in the writ petition. That question was noted as requiring adjudication at the stage of final hearing and was not finally decided at the interim stage. The Court therefore left that issue for determination on merits at the final hearing of the petition. [Paras 22]

The legality of the specific adjustment made by respondent No.1 is reserved for final adjudication at the hearing of the writ petition.

Final Conclusion: The Court directed respondents to refund the admitted net refundable amount of Rs. 833,04,88,000/- to the petitioner within two weeks of uploading the order; the respondents cannot withhold that admitted refund for AY 2014-15 by invoking Section 241A or by relying on hypothetical future demands, while the correctness of particular set-offs made in the impugned order is reserved for final determination.

Disallowance under section 40(a)(ia) - tax deduction at source (TDS) - assessee in default under section 201 - second proviso to section 40(a)(ia) introduced by Finance Act, 2012 and its retrospective operation - remand to the Assessing Officer for fresh decision

Disallowance under section 40(a)(ia) - second proviso to section 40(a)(ia) introduced by Finance Act, 2012 and its retrospective operation - assessee in default under section 201 - tax deduction at source (TDS) - remand to the Assessing Officer for fresh decision - Whether the disallowance made under section 40(a)(ia) should be upheld where the assessee relied on the amendment to section 201 by Finance Act, 2012 and contended that recipients had filed returns and paid tax. - HELD THAT: - The Tribunal found that the written submissions filed before the CIT(A) (and available on record) raised the contention that, by virtue of the Finance Act, 2012 amendment to section 201, the payer would not be an assessee in default under section 201 if the resident payee had furnished a return, taken the sum into account and paid tax, and that consequent disallowance under section 40(a)(ia) would thus not be invokable. The CIT(A)'s order recorded consideration of pleadings but did not deal with or decide these specific arguments and supporting documents. Reliance was placed on earlier tribunal authority holding that the amendment operates retrospectively. In view of the absence of any decision on these contentions by the CIT(A) and the AO, the Tribunal held it appropriate to set aside the CIT(A) orders and remand the matters to the AO for fresh adjudication. The AO is directed to examine whether the payees have complied with the conditions of the amended provision (filing return, including the sums and paying tax), after giving the assessee a reasonable opportunity of being heard. The Tribunal expressly declined to express any opinion on the merits of the claim and remanded for fresh decision and verification by the AO. [Paras 6, 7]

Orders of CIT(A) set aside and matters remanded to the Assessing Officer for fresh decision on whether the recipients satisfied the conditions of the amended provision, after affording the assessee a reasonable opportunity of being heard.

Final Conclusion: The Tribunal set aside the CIT(A) orders and remanded both matters to the Assessing Officer for fresh adjudication in the light of the Finance Act, 2012 amendment and the assessee's submissions; no comment was made on the merits and the appeals are disposed of as allowed for statistical purposes.

Taxation of share premium under section 56(2)(viib) - fair market value of unquoted shares - choice of valuation method (DCF v. NAV) - Discounted Cash Flow (DCF) method - assessing officer's power to scrutinize valuation report - onus on assessee to substantiate valuation - valuation date relevance - allotment of shares in consideration for asset (IPR)

Taxation of share premium under section 56(2)(viib) - allotment of shares in consideration for asset (IPR) - Applicability of section 56(2)(viib) to share premium received on allotment of shares in consideration for acquisition of IPR and whether payment need be in cash. - HELD THAT: - The Tribunal agreed with the CIT(A) that the term 'consideration' in section 56(2)(viib) is not restricted to cash receipts; allotment of shares in lieu of consideration for acquisition of an asset (IPR) falls within the ambit of the provision. However, the value of the IPR must be taken into account when determining the fair market value of shares; the AO erred in ignoring the value of the acquired asset while adopting NAV method. Accordingly, the allotment in lieu of purchase consideration is not outside the scope of section 56(2)(viib), but valuation must reflect the asset consideration. [Paras 16]

Allotment of shares in lieu of consideration for IPR is within the scope of section 56(2)(viib); payment need not be in cash, and the value of the IPR must be reckoned for valuation.

Taxation of share premium under section 56(2)(viib) - non-resident subscribers - Treatment of share premium received from non-resident subscribers. - HELD THAT: - The CIT(A) deleted the addition insofar as premium related to shares allotted to non-residents, relying on the position of law that section 56(2)(viib) does not apply to premium received from non-residents. The Tribunal recorded this deletion without interference. [Paras 4]

Addition in respect of premium received from non-resident allottees deleted by CIT(A); that conclusion stands.

Choice of valuation method (DCF v. NAV) - Discounted Cash Flow (DCF) method - assessing officer's power to scrutinize valuation report - valuation date relevance - onus on assessee to substantiate valuation - Validity of AO's rejection of the assessee's DCF-based valuation and adoption of NAV method; procedure to be followed when AO is not satisfied with a DCF valuation report. - HELD THAT: - Following persuasive authority, the Tribunal held that where the assessee opts for DCF under Rule 11UA(2)(b), the AO may scrutinize the valuation report and, if not satisfied, may determine a fresh valuation himself or obtain an independent valuer's report to confront the assessee, but the AO cannot change the valuation method chosen by the assessee to NAV. Scrutiny must be confined to facts and data available on the valuation date; subsequent actuals cannot be used to discredit projections. The primary onus to substantiate projections, discounting factor and terminal value lies on the assessee, who must support the DCF inputs by empirical data, industry norms or other scientific/empirical basis. In view of deficiencies in the impugned valuation exercise, the Tribunal set aside the CIT(A) order and remitted the matter to the AO to decide afresh in accordance with these principles, after affording the assessee an opportunity of hearing. [Paras 21, 22]

Matter remanded to AO to re-determine FMV using DCF basis (assessees' chosen method); AO may scrutinize and obtain independent valuation but cannot substitute NAV for DCF; only data as of valuation date to be considered and assessee bears primary onus to substantiate DCF inputs.

Final Conclusion: The Tribunal upheld deletion of addition relating to non-resident allottees, held that allotment of shares in consideration for IPR falls within section 56(2)(viib) (the value of the IPR must be reckoned), and set aside the CIT(A) order on valuation to remit the matter to the AO with directions to re-evaluate fair market value on the DCF basis (the assessee's chosen method), restricting scrutiny to facts as of the valuation date and requiring the assessee to substantiate DCF inputs; appeal allowed for statistical purposes.

Voluntary disclosure under section 132(4) - unexplained cash and foreign currency as income u/s 69A - unexplained expenditure in foreign tours u/s 69C - unexplained investment u/s 69B - treatment of advances versus capital gains under section 45(1) - evidentiary value of seized loose papers and presumption under section 132(4A) - requirement of corroborative evidence to connect seized loose papers to assessee - valuation by Departmental Valuation Officer for construction works

Unexplained expenditure in foreign tours u/s 69C - evidentiary value of seized loose papers and presumption under section 132(4A) - Whether addition on account of unexplained foreign-tour expenditure for Assessment Year 2011-12 should be sustained - HELD THAT: - The Tribunal noted that the assessee had earlier accepted unaccounted foreign-tour expenditures and the AO had estimated amounts using package rates as of 21.02.2014. The Tribunal applied its earlier reasoning in closely related appeals: relief was appropriate where the AO uniformly applied 2014 package rates to prior years but where no such adjustment was sought by the assessee (AY 2011-12) and the assessee had not claimed a lower contemporaneous package rate, there was no merit in the ground. The Tribunal therefore found no basis to disturb the addition for AY 2011-12.

Ground dismissed and addition for unexplained foreign-tour expenditure for AY 2011-12 upheld.

Unexplained investment u/s 69B - requirement of corroborative evidence to connect seized loose papers to assessee - Whether addition on account of alleged undisclosed cash investment based on blank signed cheques seized (AY 2011-12) was justified - HELD THAT: - Two unsigned blank signed cheques found on search were explained by the assessee as security taken in relation to family property transactions; the assessee produced registered sale deeds and an explanation linking the cheques to the vendor rather than to cash loans. Revenue failed to demonstrate a live connection between the assessee and Universal Agro Farm showing a cash loan, and did not confront the purported vendor. In absence of corroborative material and given documentary support for the assessee's version, the Tribunal held the AO's addition rested on suspicion and surmise.

Addition of unexplained cash investment of Rs. 4,50,000/- deleted for AY 2011-12.

Unexplained cash and foreign currency as income u/s 69A - honouring surrender made under section 132(4) - Whether cash and foreign currency seized and added u/s 69A for Assessment Year 2012-13 were unexplained - HELD THAT: - The assessee produced the statement of a friend who admitted ownership of the seized foreign currency and a bank certificate corroborating withdrawals abroad; the Tribunal accepted that evidence and deleted the addition for the foreign-currency component. As to the cash seized, the assessee demonstrated receipt of substantial cash advances from the buyer under the MOU and produced a cash-flow reconciliation showing the seized cash was part of that advance; Revenue did not satisfactorily contest the cash-flow statement. On these facts the Tribunal concluded the cash and foreign-currency amounts were satisfactorily explained.

Addition under section 69A for seized cash and foreign currency (AY 2012-13) deleted.

Voluntary disclosure under section 132(4) - honouring surrender made under section 132(4) - treatment of advances versus capital gains under section 45(1) - Whether amounts received as advances under the MOU for sale of shares should be taxed in AY 2011-12/2012-13 or in the year of transfer (AY 2013-14) - HELD THAT: - The seized MOU recorded a proposed sale and payment schedule; dispute with a third party prevented final transfer until after arbitration, and the actual transfer and receipt of the balance consideration occurred in Financial Year 2012-13 with capital gains assessed in AY 2013-14. The Tribunal reasoned that where a transfer of capital asset occurs only upon completion of the sale (section 45(1)), advance receipts during an incomplete and contingent transaction that was later completed by arbitration/registration cannot be taxed as income in earlier years when the transfer did not occur. The Tribunal also observed that the sale proceeds were brought to tax in AY 2013-14 by the shareholders and that the buyer-group had admitted and offered the surrendered cash to tax; in these circumstances additions for advances in AYs 2011-12 and 2012-13 were not justified.

Additions made by AO/CIT(A) in respect of advances under the MOU for AY 2011-12 and AY 2012-13 set aside; amounts taxed in AY 2013-14 as capital gains.

Voluntary disclosure under section 132(4) - Whether difference between amount admitted under oath in search and amount later offered in returns must be treated as income (AY 2012-13) - HELD THAT: - The assessee had surrendered a lump sum amount under oath in search proceedings and subsequently offered a lower aggregate across years in returns. The Tribunal noted that a statement under section 132(4) is a documentary admission with a clear nexus to the income offered; where an assessee retracts or offers a lesser amount after a surrender, the burden lies on the retracting party to explain the shortfall. The Tribunal found that the assessee had admitted undisclosed income and that the shortfall was not satisfactorily explained.

Addition corresponding to the shortfall (as contested before authorities) confirmed and ground dismissed.

Unexplained expenditure in foreign tours u/s 69C - Whether the loose-paper entries relating to historic foreign-tour expenditures (prior years) could be assessed in AY 2006-07-2011-12 series where dates and year-specific package rates mattered - HELD THAT: - The Tribunal applied its earlier approach that the AO should use contemporaneous package/rates for the relevant year rather than uniformly applying 2014 package rates to prior years; where the assessee sought recalculation for prior years, relief was given. For AY 2011-12 specifically, the assessee sought no downward adjustment and the AO's estimate stood.

Prior-year recalculation relief granted where sought; for AY 2011-12 the AO's addition sustained as there was no claim for rate adjustment.

Short-term capital gain computation and allowable costs - Whether certain purchase-related expenses not considered by CIT(A) should be allowed against short-term capital gain (AY 2012-13) - HELD THAT: - The Tribunal examined documentary proof of transfer charges, bank draft charges and legal fees incurred at time of purchase which were not disputed on genuineness. It treated these as part of cost and allowed them against the sale consideration. The Tribunal adjusted the short-term capital gain accordingly, allowing a deduction of the verified purchase-related expenses and confirming the remaining addition.

Deduction of verified purchase-related expenses allowed (Rs. 1,42,103 per decision); residual addition confirmed as shown by CIT(A).

Unexplained investment u/s 69B - valuation by Departmental Valuation Officer for construction works - Whether DVO estimate of renovation valuation warranted addition for unexplained investment (AY 2012-13) - HELD THAT: - The assessee contended that only minor renovation (tiles and false ceiling) of an existing clinic portion took place in the relevant year and that most construction dated to 2003-04. The DVO valued the whole portion; Tribunal found the DVO's approach overbroad but noted lack of full documentary support from the assessee. Applying a pragmatic adjustment in view of limited evidence, the Tribunal allowed substantial relief by reducing the addition and confirming a modest notional addition to reflect unexplained investment.

Addition reduced; Tribunal confirmed a smaller addition (nominal figure) and deleted the balance (partial allowance).

Requirement of corroborative evidence to connect seized loose papers to assessee - Whether additions based on various seized loose papers (proposals, project projections, shop proposals, dumb papers) could be sustained absent evidence of actual transactions - HELD THAT: - Across several seized pages the Tribunal distinguished between rough/projected jottings and records of completed transactions. Where the seized paper merely contained estimates or proposed schemes with no evidence of payment or completed contract, the AO/CIT(A) could not base additions on hypothesis; where papers indicated actual payment schedules or cash outflows tied to the assessee and no explanation was offered, additions were sustained. The Tribunal therefore deleted additions that rested on mere projections or unsigned/uncorroborated jottings, and confirmed additions where the papers, context and lack of explanation pointed to real unaccounted receipts or payments.

Additions founded on mere projections/rough estimates were deleted; additions founded on seized papers showing payment schedules or unexplained cash and unsupported by explanation were sustained.

Final Conclusion: The Tribunal disposed the cluster of appeals partly in favour of the assessees. It upheld certain additions where the assessee failed to satisfactorily explain seized cash/entries or retracts of voluntary surrenders, but granted substantial relief by deleting or reducing multiple additions: (i) deletions granted for several additions based on seized loose papers regarded as projections or not satisfactorily connected to the assessee (including various advances under the MOU which were treated as taxable on actual transfer in AY 2013-14), (ii) seized foreign currency and cash in the assessee's case were held to be satisfactorily explained and deleted, (iii) certain investment/valuation additions were reduced after reassessment of evidentiary weight, and (iv) a shortfall between surrendered amount and returns was confirmed where the surrender was not adequately explained. Overall the appeals were partly allowed.

Reasonableness of explanation - nexus between brought in foreign currency and bank deposit - explanation for cash deposits and applicability of section 69 - onus on assessee to explain source of cash - taxability of deposits from exempt foreign salary and NRE funds

Reasonableness of explanation - nexus between brought in foreign currency and bank deposit - explanation for cash deposits and applicability of section 69 - taxability of deposits from exempt foreign salary and NRE funds - onus on assessee to explain source of cash - Whether the assessee furnished a reasonable explanation linking the cash deposit in his NRO account to foreign currency brought into India and whether the AO was justified in invoking the provisions of section 69 to treat the deposit as unexplained income. - HELD THAT: - The assessee produced a customs declaration showing he brought USD 21,500 into India on 22.05.2015 and contended that those dollars were exchanged through an authorized money changer and that Rs. 8,00,000 was deposited into his NRO account on 27.05.2015. The AO and CIT(A) noted absence of a receipt from the money changer for the exchange and therefore treated the deposit as unexplained under section 69. The Tribunal accepted that the currency brought in (USD 21,500) was undisputed and that, applying the contemporaneous exchange rate, it comfortably covered the cash deposit in question in terms of source and quantum. The Tribunal further observed that the underlying source of the foreign currency-salary from the United Nations and funds in the assessee's NRE account-was accepted as exempt by the Revenue and that the assessee's return disclosed other Indian income items without any adverse finding of undisclosed income. In those circumstances the Tribunal held the assessee's explanation to be plausible and reasonable despite the missing exchange receipt. The Tribunal rejected the Department's reliance on a hypothetical risk of misuse of non resident bank accounts and held that mere presumption or conjecture, without adverse material, was insufficient to displace a reasonable explanation. Consequently, the facts did not justify invocation of section 69 to tax the deposit. [Paras 7, 8, 9]

Assessee's explanation accepted as reasonable; addition under section 69 deleted and appeal allowed.

Final Conclusion: The Tribunal found the assessee's explanation linking the NRO cash deposit to brought in exempt foreign salary/NRE funds to be plausible and, in absence of adverse material, held that the invocation of section 69 was not justified; the addition confirmed by the lower authorities was deleted and the appeal was allowed.

Tax deduction at source on rent payable to exempt Agricultural Produce Marketing Committee - treatment as assessee in default under section 201 for non-deduction of TDS - effect of CBDT circulars on requirement to deduct TDS from entities unconditionally exempt and not required to file return - applicability of provisions governing deduction of TDS on rent (Section 194I) - treatment of payments to co-owners under a joint partnership agreement for TDS purposes - first proviso certificate under section 201(1) and its evidentiary value

Tax deduction at source on rent payable to exempt Agricultural Produce Marketing Committee - treatment as assessee in default under section 201 for non-deduction of TDS - effect of CBDT circulars on requirement to deduct TDS from entities unconditionally exempt and not required to file return - first proviso certificate under section 201(1) and its evidentiary value - Whether the assessee was rightly treated as an assessee in default for non-deduction of TDS on rent paid to Krishi Upaj Mandi Samiti. - HELD THAT: - The Tribunal examined the payee's status as a State Government undertaking whose income is exempt under the provision referred to in the record and considered CBDT Circular No.4 of 2002 as modified by Circular No.18/2017 which exempts deduction of TDS in respect of Boards/bodies whose income is unconditionally exempt under section 10 and who are not statutorily required to file returns. The assessee produced a Chartered Accountant's certificate under the first proviso to section 201(1) certifying that the rental income received by the payee had been accounted for and that the taxable income of the payee was nil. The Tribunal found these materials persuasive and noted coordinate-bench precedents relied on in which TDS was held not to be required where the deductee was unconditionally exempt and not liable to tax. Applying those principles, the Tribunal held that there was no obligation to deduct TDS from the payments to Krishi Upaj Mandi Samiti and that treating the assessee as an assessee in default on that score was not justified. [Paras 12, 13, 14, 15, 16]

Assessee was not an assessee in default for non-deduction of TDS on rent paid to Krishi Upaj Mandi Samiti; ground allowed and the demand deleted in respect of that payment.

Applicability of provisions governing deduction of TDS on rent (Section 194I) - treatment of payments to co-owners under a joint partnership agreement for TDS purposes - Whether there was short deduction of TDS on rent paid under the 'Joint partnership agreement scheme' to M/s Sadhana Enterprises (co-owners) and whether section 194I was applicable. - HELD THAT: - The Tribunal analysed the contractual arrangement and payment records. The agreement was described as a joint partnership arrangement under a common name but the actual payments were made separately to individual co-owners in accordance with their ownership shares. The record (tabulated in the order) showed that tax was deducted and deposited where the individual share exceeded the threshold; in two cases where the share was below the threshold no tax was deductible. Revenue did not produce contrary material to establish that the total rent had been paid to a single entity named M/s Sadhana Enterprises. On these facts the Tribunal concluded that the deductor had calculated and deducted TDS on each co-owner's share in compliance with the statutory test for TDS on rent under the relevant provisions, and therefore the assessee could not be treated as an assessee in default for short deduction. [Paras 17, 18, 19]

Assessee was not an assessee in default for short deduction of TDS in respect of payments made to the co-owners under the joint partnership arrangement; ground allowed and the finding of default set aside.

Final Conclusion: The Tribunal allowed the appeal for Assessment Year 2011-12: the assessee was not an assessee in default for non-deduction of TDS on rent paid to Krishi Upaj Mandi Samiti (in view of the payee's exempt status and supporting CA certificate and CBDT circulars) and was not in default for alleged short deduction in respect of payments under the joint partnership arrangement to co-owners; the demands under section 201(1)/201(1A) were deleted in the respects decided.

Anonymous donation - record of identity indicating the name and address of the person making such contribution - taxation under section 115BBC - verification and valuation of donated assets - burden of proof regarding existence of assets and donors

Verification and valuation of donated assets - burden of proof regarding existence of assets and donors - Addition of Rs. 2278062 shown as introduction of capital fund by way of contribution of land, building and plant and machinery set aside for fresh verification and decision by the assessing officer. - HELD THAT: - The trust's books recorded fixed assets and an introduction of capital fund representing contributions by identified trustees who averred by affidavit that they had donated land, building and plant and machinery to the trust. The Tribunal observed that the existence of the assets and identity of the donors is not disputed and that the assessing officer did not verify land title documents, physical existence or use of the assets by the trust, nor undertake valuation. Because the addition rested on lack of documentary verification rather than any finding that the donors or assets did not exist, the Tribunal directed that the matter be remitted to the assessing officer for the assessee to produce evidence of ownership/transfer and use of the assets and for the AO to carry out necessary verification and valuation and decide the issue afresh. [Paras 5]

Ground relating to the addition of Rs. 2278062 is set aside and remitted to the assessing officer for verification of existence, transfer and valuation of the donated assets and fresh adjudication.

Anonymous donation - record of identity indicating the name and address of the person making such contribution - taxation under section 115BBC - Addition of Rs. 15 lakhs treated as anonymous donation deleted. - HELD THAT: - Section 115BBC(3) treats voluntary contributions as anonymous donations where the recipient does not maintain a record of identity showing name and address and other prescribed particulars. In the present case the trust had furnished names and addresses and produced the donors before the assessing officer who recorded their statements on oath and confirmed their identities. The AO and CIT(A) imposed additional conditions (such as service of summons directly on donors or receipt of confirmations only by the AO) not mandated by the statute. Genuineness of donations is a separate inquiry and is not the determinative criterion for whether a donation is 'anonymous' under the provision. Because the statutory requirement - maintenance/production of identity showing name and address - was satisfied, the addition as an anonymous donation was unwarranted and was deleted. [Paras 6]

Addition of Rs. 15 lakhs as anonymous donation is deleted.

Final Conclusion: Appeal allowed: the issue of the addition of Rs. 2278062 is remitted to the assessing officer for verification and fresh decision; the addition of Rs. 15 lakhs as anonymous donation is deleted.

Deduction of interest on borrowed capital for house property under section 24(b) - Family settlement as transfer/partition creating ownership rights - Co-borrower status vis-a -vis legal ownership for claiming deduction - Colorable device doctrine in relation to family arrangements

Deduction of interest on borrowed capital for house property under section 24(b) - Family settlement as transfer/partition creating ownership rights - Co-borrower status vis-a -vis legal ownership for claiming deduction - Assessee entitled to deduction under section 24(b) of interest paid on housing loan in respect of 1/6 share of the property following family settlement dated 8/4/2014. - HELD THAT: - The Tribunal examined the memorandum of family settlement executed on 8 April 2014 and found that the deed effected a division of the property among the parents and their four sons, including the assessee, by vesting a 1/6 share in the assessee. The fact that municipal records were not mutated in the assessee's name was not determinative; the deed expressly contemplated mutation but failure to effect municipal entries did not negate the ownership created by the family settlement. The assessee, being one of the borrowers for the renovation financed by borrowed capital and having assumed liability to repay his share of the loan, is an owner of the specified share for the purposes of section 24(b). The CIT(A)'s conclusion that the memorandum was a colourable device was not supported by the terms of the settlement, which merely recorded partitional division and mutual obligations to pay the loan; no ulterior motive or fraudulent scheme was established. Applying these findings, interest attributable to the assessee's share of the loan is allowable as deduction under section 24(b). [Paras 8, 9]

Family settlement held to have vested 1/6 share in the assessee with effect from 8 April 2014; deduction of the interest paid on the housing loan allowed under section 24(b) and the additions confirmed by lower authorities set aside.

Final Conclusion: The appeal is allowed; the assessee is held to be owner of a 1/6 share of the house property under the family settlement and is entitled to deduction of the interest paid on the housing loan under section 24(b) for Assessment Year 2015-16.

Validity of reassessment proceedings - reopening of assessment - reasons to believe - application of mind - AIR information - quashing reopening - addition under section 69A - presumption of escaped income

Validity of reassessment proceedings - reopening of assessment - reasons to believe - application of mind - AIR information - quashing reopening - presumption of escaped income - Reopening of assessment under section 147 was invalid and was quashed for failure to record correct reasons and for lack of application of mind. - HELD THAT: - The Tribunal examined the reasons recorded by the Assessing Officer for reopening the assessment which relied on alleged cash deposits as per AIR data. The recorded facts were incorrect as the actual aggregate deposits differed from the figure quoted in the reasons. The AO did not apply independent mind to the information received, issued an enquiry when no proceedings were pending, and proceeded to treat non-response as confirmation that income had escaped assessment. The Tribunal treated the AO's reliance on incorrect AIR figures and consequent presumption as insufficient tangible material to form a valid belief under the statutory test for reopening. In view of these defects the Tribunal followed precedent holding that such reopening is invalid and therefore set aside and quashed the reassessment proceedings.

Reopening quashed and reassessment held invalid.

Addition under section 69A - quashing reopening - Addition made in the reassessment order under section 69A was deleted as a consequence of quashing the reopening; the addition was not adjudicated on merits. - HELD THAT: - The Tribunal observed that because the reassessment itself was quashed for invalid reopening, the consequential addition pertaining to alleged unexplained cash deposits could not stand. The addition was therefore set aside without entering into the merits of whether the deposits constituted unexplained income.

Addition under section 69A deleted; no adjudication on merits required.

Final Conclusion: The appeal is allowed: the reassessment for AY 2011-12 is quashed for defective reasons and lack of application of mind, and the consequential addition under section 69A is deleted.

Additions under section 68 - assessment under section 153A - completed assessments and requirement of incriminating material - abated versus completed assessments - nexus with seized material

Additions under section 68 - assessment under section 153A - completed assessments and requirement of incriminating material - nexus with seized material - Whether an addition made under section 68 in a reassessment framed under section 153A can be sustained in respect of a previously completed assessment year in the absence of any incriminating material seized or discovered during the search - HELD THAT: - Section 153A obliges the Assessing Officer to recompute total income for the six years preceding the year of search, treating pending assessments as abated and permitting reassessment of completed assessments only if incriminating material is unearthed during the search or related requisitions. The Tribunal applied this principle to the present facts and concluded that the assessment under challenge was a completed assessment as on the date of search and that the addition made by the AO under section 68 was not founded on any incriminating material recovered in the course of the searches. In the absence of such nexus between the addition and seized material, the statutory scheme does not permit fresh additions in respect of completed assessments merely because the assessment is being reopened under section 153A. The Tribunal accordingly relied on the controlling judicial position cited and held that where no incriminating material exists, the total income determined in the original completed assessment must be adopted in the proceedings under section 153A and any ad hoc addition not grounded in seized material must be deleted. [Paras 9, 10, 11, 12, 13]

The addition made under section 68 in the reassessment under section 153A, not being based on any incriminating material found during the search, is unsustainable and is deleted.

Final Conclusion: The appeal is allowed; the addition made under section 68 in the assessment framed under section 153A is deleted because it was not based on any incriminating material discovered during the search.

Rectification under section 254(2) - mistake apparent on the face of the record - Permanent Establishment - Article-5(2)(k)(i) of the India-U.K. Tax Treaty - factual verification of stay of employees - interpretation of "any 12 month period" as previous year

Rectification under section 254(2) - mistake apparent on the face of the record - Application for rectification of the Tribunal's order under section 254(2) seeking reversal of the direction to the Assessing Officer. - HELD THAT: - The Tribunal considered whether its earlier order contained a mistake apparent on the face of the record warranting rectification. The Tribunal had directed factual verification by the Assessing Officer because neither the Assessing Officer nor the DRP recorded any factual finding on the assessee's claim that employees stayed in India for an aggregate of 42 days. A conscious judicial decision to remit an issue for factual verification does not amount to a mistake apparent on the face of the record. Section 254(2) is confined to correcting patent errors and cannot be invoked as a vehicle for re hearing or seeking a decision in a preferred manner. The assessee's request amounted to seeking review of the Tribunal's discretionary direction rather than pointing to any obvious clerical or patent error in the order. [Paras 4]

Application for rectification dismissed; no mistake apparent on the face of the record.

Permanent Establishment - Article-5(2)(k)(i) of the India-U.K. Tax Treaty - factual verification of stay of employees - interpretation of "any 12 month period" as previous year - Whether the question of existence of a Permanent Establishment in India should be finally decided by the Tribunal or remitted to the Assessing Officer for factual verification of the assessee's claim on days of stay. - HELD THAT: - The Tribunal accepted in principle that the phrase "any 12 month period" in Article-5(2)(k)(i) is to be read as the previous year or financial year under section 3 of the Act. However, the assessee's assertion that its personnel were present in India for an aggregate of 42 days during the relevant previous year had not been accepted by the Assessing Officer nor independently found by the DRP. Given the absence of any factual finding by the authorities on this specific claim, the Tribunal properly directed the Assessing Officer to verify the factual claim regarding the duration of stay of employees in India. If factual verification confirms the claimed period of stay, the consequence would be that no PE arose in India for the year under consideration. The Tribunal's direction to the Assessing Officer was therefore a permissible remand for factual enquiry and not a legal error. [Paras 4]

Issue remitted to the Assessing Officer for factual verification of the assessee's claim about the employees' aggregate period of stay in India; no error in remand direction.

Final Conclusion: The miscellaneous application for rectification is dismissed. The Tribunal correctly declined to treat its earlier direction to the Assessing Officer as a mistake apparent on the face of the record and rightly remitted the question of factual verification of the employees' duration of stay (which will determine existence of PE) to the Assessing Officer.

Desealing of premises - placement of goods in bonded warehouse - binding undertaking by respondents - no direction for payment of rent for seized premises

Desealing of premises - placement of goods in bonded warehouse - binding undertaking by respondents - Direction issued to respondents to deseal the petitioner's rented warehouse and place the goods in a bonded warehouse in accordance with law. - HELD THAT: - The Court recorded the respondents' undertaking (taken on record) that the petitioner may approach them immediately and that necessary orders would be passed for placing the goods in a bonded warehouse and for de-sealing the petitioner's warehouse. Relying on that statement, the Court disposed of the petition by directing the respondents to ensure desealing of the warehouse and placement of the goods in a bonded warehouse in accordance with law. The undertaking given by respondents was treated as binding and formed the basis of the Court's direction. [Paras 9, 11]

Petition disposed with a direction to respondents to deseal the warehouse and place the goods in a bonded warehouse as per law, the respondents' statement being taken on record and binding.

No direction for payment of rent for seized premises - Claim for a direction compelling respondents to pay rent for the period the warehouse remained sealed was declined. - HELD THAT: - The Court declined to grant a direction for payment of rent in these proceedings because doing so would require determination of disputed questions of fact. The petitioner was left free to pursue remedies regarding rent before the appropriate forum or Court; the question of rent was not adjudicated on the merits and was not decided in these proceedings. [Paras 10]

Prayer for direction to respondents to pay rent is refused; petitioner may pursue other remedies before an appropriate forum.

Final Conclusion: The petition is disposed of: respondents' undertaking to deseal the warehouse and place goods in a bonded warehouse is recorded and binding; no order made on payment of rent, which remains open for adjudication before an appropriate forum.

Limitation - condonation of delay - statutory bar on entertaining appeal beyond extended period under Section 35 of the Central Excise Act, 1944 - sufficient cause - appeal dismissed on ground of limitation

Limitation - condonation of delay - statutory bar on entertaining appeal beyond extended period under Section 35 of the Central Excise Act, 1944 - sufficient cause - Whether the Commissioner (Appeals) and the Tribunal were correct in refusing to condone the delay and in dismissing the appeal as time barred. - HELD THAT: - The Tribunal held that the impugned Order in Original dated 4.12.2012 was received by the appellant on the date of the order itself and the appeal before the Commissioner (Appeals) was filed after more than 90 days, without adequate explanation. The only explanation offered - change of lawyer - was unsupported by documentary evidence or affidavit and did not demonstrate why the appellant could not have engaged or coordinated with counsel within time. The Commissioner (Appeals) was bound by the statutory limitation scheme under Section 35 of the Central Excise Act, 1944, which precludes entertaining an appeal beyond the prescribed period unless sufficient cause is shown. The Tribunal applied the established principle that "sufficient cause" must be adequately demonstrated and found the appellant's plea inadequate, relying on the reasoning in Singh Enterprises (as cited in the judgment) that unexplained or unsupported delays cannot be condoned. The Tribunal also noted that the same inadequate explanation was relied upon before it and that the appeal to the Tribunal itself was filed after a prolonged delay; accordingly, condonation before the Tribunal was also refused. [Paras 5, 6, 7, 8]

Condonation of delay application dismissed; appeal dismissed as time barred and the order of the Commissioner (Appeals) upheld.

Final Conclusion: The Tribunal affirmed the dismissal of the appeal on the sole ground of limitation, finding the explanation for delay insufficient and upholding the statutory bar on entertaining the belated appeal; consequently, the condonation application and the appeal were dismissed.

Collective Investment Scheme - registration requirement for collective investment schemes - applicability of SEBI Act and CIS Regulations to trusts - statutory scheme requiring collective investment schemes to be operated through a Collective Investment Management Company - refund and interest remedy for investors in unregistered collective investment schemes

Collective Investment Scheme - The schemes operated by Yatra Art Fund Trust (Fund I) and Yatra Art Fund II (Fund II) constitute collective investment schemes and the concurrent findings of SEBI and the Appellate Tribunal that the schemes are collective investment schemes are not interfered with. - HELD THAT: - The Court noted the factual and legal material before SEBI and the Appellate Tribunal and observed that, on the record, it could not be said that the schemes were not collective investment schemes. Having considered submissions, including those based on Section 11AA, the Supreme Court found no reason to disturb the concurrent conclusions reached by SEBI and the Tribunal that the funds fell within the definition and regulatory ambit of a collective investment scheme.

Concurrent findings that the schemes are collective investment schemes sustained and not interfered with.

Applicability of SEBI Act and CIS Regulations to trusts - statutory scheme requiring collective investment schemes to be operated through a Collective Investment Management Company - The appellants' contention that Section 11AA applies only to a 'company' and therefore a trust cannot fall within the SEBI regulatory scheme was rejected; a collective investment scheme cannot be lawfully carried on in a form other than as mandated by the statutory and regulatory scheme. - HELD THAT: - The Court examined the interaction between Section 12(1B), Section 11AA and the CIS Regulations, noting that the regulatory structure contemplates registration and operation of collective investment schemes through a Collective Investment Management Company. Regulation 3 prohibits any person other than a duly registered Collective Investment Management Company from launching or carrying on a collective investment scheme. Accordingly, carrying on such schemes in the form of an unregistered private trust was held to be contrary to the statute and regulations.

Argument that a trust-form scheme escapes SEBI regulation rejected; the trust-based schemes were illegal under the SEBI Act read with the CIS Regulations.

Refund and interest remedy for investors in unregistered collective investment schemes - Instead of remanding the refund issue to SEBI, the Court directed a specific refund and interest remedy: repayment of outstanding principal within six months and payment of interest at 10% per annum on outstanding principal up to the respective fund end-dates, to be paid within nine months, with compliance reporting to SEBI. - HELD THAT: - Having regard to the long pendency of litigation and the concurrent findings that the schemes were unlawful collective investment schemes, the Court exercised its equitable powers to give final directions for repayment. The Court recorded amounts already repaid (as information) and ordered that the balance principal outstanding be repaid to investors of Fund I and Fund II within six months. Interest at 10% per annum was ordered on outstanding principal from the date it became due until the respective fund termination dates (15-9-2011 for Fund I and 31-1-2012 for Fund II), payable within nine months. A compliance report was directed to be filed with SEBI after payment.

Direct refund and interest directions issued: outstanding principal to be repaid within six months and interest at 10% to be paid within nine months; compliance report to be filed with SEBI.

Final Conclusion: The Supreme Court declined to disturb SEBI's and the Tribunal's conclusions that the Yatra Art Fund schemes were collective investment schemes; it rejected the contention that the trust form placed the schemes outside SEBI's regulatory regime, and, in light of prolonged litigation, directed final repayment of outstanding principal within six months and payment of interest at 10% for specified periods within nine months, with compliance reporting to SEBI.

Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - Article 137 of the Limitation Act, 1963 - acknowledgment in writing under Section 18 of the Limitation Act, 1963 - effect of payment under Section 19 of the Limitation Act, 1963 - declaration of financial debt as NPA as triggering event for limitation

Acknowledgment in writing under Section 18 of the Limitation Act, 1963 - effect of payment under Section 19 of the Limitation Act, 1963 - declaration of financial debt as NPA as triggering event for limitation - Whether the Section 7 application was barred by limitation or saved/extended by acknowledgments and part payments made by the corporate debtor. - HELD THAT: - The Tribunal accepted that the financial debt was declared NPA on 30 September 2012 and that Article 137 prescribes a three year limitation period for instituting proceedings under Section 7, commencing from the NPA date. It applied the principles of Sections 18 and 19 of the Limitation Act: an acknowledgment in writing signed by the debtor before the expiry of the prescribed period restarts limitation, and a payment on account made within the prescribed period similarly gives a fresh period from the date of such payment. The record contains a chain of written acknowledgments and a sequence of settlement communications beginning with an OTS proposal dated 26 March 2014, followed by an offer/acknowledgment on 13 November 2015, formal Settlement Terms on 2 December 2015, part payment of Rs. 47.50 lakhs on 5 December 2015, further payment by cheque on 31 March 2016, and additional payment/acknowledgment on 9 February 2017, with a further acknowledgment dated 19 March 2018. Those documents and payments, not disputed by the corporate debtor, constituted written acknowledgments and payments made within the relevant limitation periods and therefore operated to compute fresh limitation periods from the dates of such acknowledgments/payments. Applying those principles to the documentary chain, the application filed on 16 August 2018 was within three years of the last acknowledged/payment date (9 February 2017) and hence not time barred. [Paras 7, 8, 10, 11, 12]

The Section 7 application was not barred by limitation; the written acknowledgments and part payments extended the limitation period and the application filed on 16 August 2018 was within time.

Final Conclusion: The appeal is dismissed; the adjudicating authority's admission of the Section 7 application is sustained on the ground that written acknowledgments and part payments by the corporate debtor extended the limitation and the application was filed within the renewed limitation period.

Existence of financial debt under section 5(8) of the IBC - time value of money as requirement for financial debt - proof of default for initiation under section 7 - distinction between loans and equity subscription - summary nature of section 7 proceedings (no detailed probe) - limitation and time barred claims - unsuitability of IBC as a recovery forum / solvency of corporate debtor

Existence of financial debt under section 5(8) of the IBC - time value of money as requirement for financial debt - The alleged sums claimed by the applicants do not qualify as a "financial debt" under section 5(8) of the Code. - HELD THAT: - The Tribunal examined whether the amounts advanced were disbursements made for consideration for the time value of money and whether there was any agreement, board resolution or terms evidencing a binding obligation enforceable as a claim. Applying settled authorities on the meaning of "financial debt" and "time value of money", the Bench found that none of the alleged loans were supported by written contracts, board resolutions or clear terms and many entries, where present, were unilateral or post factum records. Transactions routed through an intermediary company (Vanijya) and entries in ledgers that did not reflect the corporate debtor in public filings did not establish a financial debt. In this factual matrix, and particularly in the background of allegations of misappropriation against the principal claimant who managed the company during the relevant period, the amounts could not be categorised as financial debt within the meaning of section 5(8). [Paras 13, 14, 15, 17, 18]

No financial debt was established as required by the Code; the claimed advances do not meet the statutory test in section 5(8).

Proof of default for initiation under section 7 - summary nature of section 7 proceedings (no detailed probe) - Even if any sums were payable, the petitioners failed to demonstrate a clear, record based default that would justify admission under section 7. - HELD THAT: - The Tribunal emphasised that section 7 proceedings are summary and require that debt and default be apparent from the records produced without resorting to detailed investigation. The material on record did not disclose contractual terms, conditions for default or documentary proof of enforceable obligations; unilateral statements and after the fact e mails could not substitute for evidentiary proof of default. Consequently, the element of default necessary to trigger CIRP under section 7 was not established from the documents produced. [Paras 6, 16, 24]

Default was not shown on the record in the manner required for admission under section 7; the petition cannot be admitted on that basis.

Distinction between loans and equity subscription - Amounts said to have been paid by certain claimants for share allotment were amounts for equity subscription and not financial debt. - HELD THAT: - The Tribunal reviewed the correspondence and documents relating to payments by Petitioner Nos. 3 (HN Naik and Sapna Naik) and found the records, including emails and request letters, indicated payments for allotment of shares rather than advances for the time value of money. There was no board resolution, agreement or contemporaneous documentation treating those transfers as loans; therefore, such payments cannot be recharacterised as financial debt under section 5(8). [Paras 19, 20]

Payments in respect of share allotment do not constitute financial debt and hence cannot form the basis of a section 7 petition.

Unsuitability of IBC as a recovery forum / solvency of corporate debtor - limitation and time barred claims - The petition was being used as a recovery measure; parts of the claimed dues were time barred and, on the material, the corporate debtor is a solvent going concern making CIRP inappropriate. - HELD THAT: - The Tribunal noted that IBC is not a substitute for ordinary recovery remedies and must not be used to push a solvent company into insolvency. The corporate debtor's financial statements, continuing work orders and renewal/extension of banking arrangements demonstrated going concern viability. The Bench also observed that many alleged defaults related to periods predating the demand notice and were barred by limitation; the Code cannot revive time barred claims. Taking these factors together, the Tribunal concluded that the petition was effectively a recovery attempt and that CIRP was not warranted. [Paras 23, 24]

The petition is inappropriate: parts of the claim are time barred and the corporate debtor is solvent; initiation of CIRP is not justified.

Summary nature of section 7 proceedings (no detailed probe) - Proceedings under section 7 are independent of other civil, criminal or winding up proceedings and are to be decided on the limited record before the Tribunal. - HELD THAT: - The Tribunal clarified that it would not enter into detailed adjudication of internal corporate disputes, criminal accusations or parallel winding up petitions except insofar as those matters bear on the existence of debt and default under the Code. The petition was considered strictly on IBC parameters and the material furnished; other forums' proceedings did not preclude the Tribunal from examining section 7 maintainability, but the limited scope of summary inquiry was maintained. [Paras 6, 21]

Parallel litigation does not per se bar adjudication under section 7, but the section 7 inquiry remains summary and confined to record based proof of debt and default.

Final Conclusion: The Tribunal dismissed C.P. (IB) No. 99/BB/2017: the applicants failed to prove the existence of a financial debt and a record based default as required under the Code; amounts claimed as equity do not qualify as financial debt; parts of the claims are time barred and the corporate debtor appears solvent, hence initiation of CIRP was not justified.

Admission under section 7 of the Insolvency & Bankruptcy Code - existence of debt and default - jurisdiction of the Adjudicating Authority - moratorium under section 14 of the Insolvency & Bankruptcy Code - appointment of Interim Resolution Professional and vesting of management in IRP - public announcement and inviting of claims

Jurisdiction of the Adjudicating Authority - This Bench has jurisdiction to entertain and decide the petition. - HELD THAT: - The Corporate Debtor is a company incorporated with the Registrar of Companies, Maharashtra, Mumbai and its registered office falls within the territorial jurisdiction of this Bench. On that basis the Adjudicating Authority found that it has competence to deal with the petition filed under the IBC. [Paras 2]

Jurisdiction of this Bench is established and the petition is entertained by this Adjudicating Authority.

Existence of debt and default - admission under section 7 of the Insolvency & Bankruptcy Code - The Financial Creditor demonstrated a debt due and payable and an event of default, and the petition under section 7 is admitted. - HELD THAT: - The claim of the Financial Creditor arose from a decree based on consent terms between the parties and records show violation of those consent terms. The petition was complete in all respects and demonstrated that the Corporate Debtor was in default of a sum exceeding the statutory minimum under the IBC. Having found that the default was established, there was no reason to refuse admission of the section 7 petition, and initiation of CIRP was warranted. [Paras 7, 8, 9]

Default established; petition under section 7 is admitted and CIRP is ordered to be initiated against the Corporate Debtor.

Appointment of Interim Resolution Professional and vesting of management in IRP - moratorium under section 14 of the Insolvency & Bankruptcy Code - public announcement and inviting of claims - Interim measures and administrative steps were ordered: IRP appointed, moratorium imposed, public announcement required, and deposit for CIRP expenses directed. - HELD THAT: - The Financial Creditor nominated an individual who filed the requisite Form 2 communication and was appointed as the Interim Resolution Professional to perform functions under the IBC. A moratorium as prescribed under section 14 was declared, covering institution or continuation of suits, transfer or disposal of assets, enforcement of security interests and recovery of property occupied by the Corporate Debtor. The IRP was directed to make the public announcement and invite claims in accordance with the IBC and regulations, to carry out duties under specified sections, and to submit periodical reports. The Financial Creditor was directed to deposit a specified sum to meet initial CIRP expenses, subject to CoC approval. Registry and RoC compliances were also ordered. [Paras 10, 11]

Mr. Milind Kasodekar appointed as IRP; moratorium imposed with immediate effect; public announcement and claims process to be initiated; initial deposit by Financial Creditor ordered; management vests in IRP for duration of CIRP.

Final Conclusion: The Adjudicating Authority admitted the section 7 petition, initiated the CIRP against the Corporate Debtor, imposed the statutory moratorium, appointed an Interim Resolution Professional to carry out CIRP functions including public announcement and claims invitation, directed a deposit to meet initial CIRP expenses and ordered administrative compliances including informing the Registrar of Companies.

Liquidation - appointment of liquidator - removal of liquidator - role of committee of creditors post-liquidation

Liquidation - role of committee of creditors post-liquidation - removal of liquidator - appointment of liquidator - Whether the Committee of Creditors can seek removal of the Liquidator after initiation of liquidation and whether the appellate court should interfere with the appointment of the Liquidator. - HELD THAT: - The Tribunal held that once the Corporate Debtor is in liquidation the Committee of Creditors ceases to have a managerial or supervisory role and functions only as a claimant whose claims are to be adjudicated by the Liquidator. In that state the Committee has no statutory provision enabling it to apply for removal of the Liquidator. In consequence, there was no ground shown to interfere with the Adjudicating Authority's order appointing the Liquidator and directing the Resolution Professional to continue as Liquidator. [Paras 3]

Appeal dismissed; no interference with the impugned order appointing the Liquidator and no power recognised for the Committee of Creditors to move for removal of the Liquidator in the absence of statutory provision.

Final Conclusion: The appeal is dismissed for lack of merit; the Adjudicating Authority's order appointing the Liquidator is upheld and the Committee of Creditors has no separate statutory right to seek the Liquidator's removal after liquidation.

Maintainability of applications under section 60(5)(c) after approval of a resolution plan - finality of an approved resolution plan and discharge of the resolution professional and committee of creditors - entitlement of operational creditors to claim statutory interest under the MSME Act during CIRP - obligation to raise objections/claims prior to approval of the resolution plan

Maintainability of applications under section 60(5)(c) after approval of a resolution plan - finality of an approved resolution plan and discharge of the resolution professional and committee of creditors - obligation to raise objections/claims prior to approval of the resolution plan - IA Nos. 321 of 2019 to 327 of 2019 filed after approval of the resolution plan are not maintainable and are liable to be dismissed as infructuous. - HELD THAT: - The applicants, being operational creditors, submitted claims during CIRP and were informed of the amounts admitted by the IRP/RP (without interest). The Tribunal observed that any grievance about admission of claims ought to have been raised before this Adjudicating Authority at the time the resolution plan was under consideration. The resolution plan was approved on 8-3-2019 and, upon its approval, the resolution professional and the committee of creditors stood discharged. The instant applications were filed on 10-6-2019, after the resolution plan had been approved and after the RP/CoC ceased to exist. In view of the finality of the approved resolution plan and the discharge of the RP/CoC, the applications filed post-approval are not maintainable and were disposed of as infructuous. [Paras 3, 4]

Applications filed after approval of the resolution plan are not maintainable and are disposed of as infructuous.

Entitlement of operational creditors to claim statutory interest under the MSME Act during CIRP - obligation to raise objections/claims prior to approval of the resolution plan - Claims for statutory interest under the MSME Act were not treated as admitted by the RP and such statutory interest does not confer a separate protection in the resolution plan or liquidation process. - HELD THAT: - The Tribunal recorded that the applicants contended that interest under the MSME Act is statutory and does not require an agreement; however, the RP rejected interest claims on the ground that no explicit agreement or PO terms supported the interest claimed. The Tribunal noted that under the CIRP/liquidation framework operational creditors (including MSME suppliers) are categorised as operational creditors but there is no statutory guarantee that MSME interest will be protected or separately enforced through the resolution plan or liquidation. The Tribunal thus treated the dispute over MSME interest as not entitling the applicants to relief after the resolution plan's approval, particularly when no timely challenge was raised before approval. [Paras 3]

The RP's non-admission of interest claimed under the MSME Act stood unreversed; statutory interest under the MSME Act does not, by itself, guarantee a right to payment through the approved resolution plan or liquidation process absent timely challenge.

Final Conclusion: The applications (IA Nos. 321 of 2019 to 327 of 2019) filed by operational creditors after approval of the resolution plan are not maintainable and are disposed of as infructuous; disputes over claimed MSME interest, where not timely contested prior to approval, do not revive post-approval relief against the discharged RP or CoC.

Cenvat credit admissibility - specified documents under Rule 9 of Cenvat Credit Rules, 2004 - Transfer Advice/Advice of Transfer as supporting document - photocopies of invoices and audited Trial Balance as valid documents - use of capital goods in providing taxable services - Cenvat credit on customs duty not admissible

Cenvat credit admissibility - specified documents under Rule 9 of Cenvat Credit Rules, 2004 - Transfer Advice/Advice of Transfer as supporting document - photocopies of invoices and audited Trial Balance as valid documents - use of capital goods in providing taxable services - Photocopies of invoices, audited Trial Balance and Advice/Transfer Advice furnished by the procuring office suffice as supporting documents for taking Cenvat credit and a procedural lapse in procurement/registration does not invalidate admissible credit where duty paid, genuineness of invoices and use of goods are not disputed. - HELD THAT: - The adjudicating authority examined certified copies and originals produced by the assessee and found the claim substantiated by documentary evidence (paras 4.1-4.3). The Tribunal noted that the existence and genuineness of original invoices was not disputed, duty thereon was paid and the capital goods were used in providing taxable services. Given these facts and the commercial practice of centralised procurement to ensure efficiency, the procedural failure (such as non-registration of the procuring office) could not be a ground to deny legitimately paid credit. The adjudicator's acceptance of figures corroborated by the audited Trial Balance as final records for the financial year was upheld, and no fresh contrary evidence was produced by Revenue before the Tribunal. Applying these conclusions, the Tribunal sustained the adjudicating authority's findings and declined to interfere with the dropping of the demand insofar as credit was supported by the invoices and trial balance (paras 4.1-4.3, 7). [Paras 4, 7]

Adjudicating authority's finding that Cenvat credit taken on the basis of photocopies of invoices, audited Trial Balance and Transfer Advice is valid is sustained; demand relating to such credits is not maintainable.

Cenvat credit on customs duty not admissible - photocopies of invoices and audited Trial Balance as valid documents - Cenvat credit wrongly availed on customs duty is not admissible and the specific amount admitted by the assessee is liable to be denied and recovered. - HELD THAT: - The adjudicating authority found, and the assessee admitted, that Cenvat credit had been wrongly availed on customs duty for imported capital goods (para 4.4). The authority examined the records and accepted the assessee's own reconciliation reflected in the audited Trial Balance that reduced the quantum claimed in the show cause notice to the admitted amount. The Tribunal observed that credit on customs duty is not permissible under the Cenvat Credit Rules and, in the absence of any material to challenge the adjudicator's basis for quantification, accepted the adjudicator's conclusion that the admitted amount is to be denied and recovered with interest (para 4.4). [Paras 4, 7]

Cenvat credit availed on customs duty is not allowable; the amount admitted by the assessee is to be denied and recovered as held by the adjudicating authority.

Final Conclusion: The Tribunal upheld the adjudicating authority's findings: Cenvat credit properly supported by invoices, audited Trial Balance and Transfer Advice cannot be denied for mere procedural procurement arrangements, while credit wrongly availed on customs duty is not admissible and is recoverable; the department's appeal is dismissed.

Clandestine removal - admissibility of weighbridge slips located within factory premises - requirement of corroborative investigation to prove stock shortages - burden of proof when relying on documents seized from third parties - status of a recorded statement as an admission - effect of deposit/adjustment made under protest

Clandestine removal - admissibility of weighbridge slips located within factory premises - Whether weighbridge slips and stock records seized from the factory premises suffice to prove clandestine removal of goods. - HELD THAT: - The Tribunal found that the weighbridge was located within the factory premises and, therefore, entries or weighments recorded on that weighbridge cannot by themselves establish clearance of goods from the factory. The adjudicating authorities relied heavily on weighbridge slips and outgoing register entries without further evidence of actual removal. The appellant explained that weighed goods were often returned to godowns and that weighed entries were sometimes cancelled; this factual position was ignored by the lower authorities. Consequently, weighbridge slips standing alone do not constitute proof of clandestine removal. [Paras 7]

Weighbridge slips and internal weighments do not, by themselves, prove clandestine removal; reliance on them to sustain the demand is not justified.

Requirement of corroborative investigation to prove stock shortages - burden of proof when relying on documents seized from third parties - Whether stock shortages estimated by the Department can sustain a demand for clandestine removal in the absence of further corroborative investigation. - HELD THAT: - The Tribunal emphasised established authorities requiring the Department to undertake further lines of inquiry to prove clandestine sale or removal - such as verifying excess production details, purchases of excess raw material, dispatch particulars from transporters, receipt details from buyers, flow of funds, or excess power consumption. The record disclosed no such investigations. The Tribunal also noted precedent that when allegations rely on documents or entries seized from third parties, the Revenue must prove their genuineness and connect them to the dealer. In the absence of corroborative evidence and requisite investigations, estimation-based shortages are not adequate to sustain a charge of clandestine removal. [Paras 8, 10, 13]

Estimated shortages without corroborative investigation are insufficient to uphold a demand for clandestine removal.

Status of a recorded statement as an admission - Whether the recorded statement of the appellant's OSD amounted to an admission justifying confirmation of demand. - HELD THAT: - On perusal of the OSD's statement, the Tribunal concluded it contained only a declaration to comply with law and did not constitute a direct admission of clandestine removal. The Tribunal relied on precedent holding that absence of a direct admission and reliance on presumptive inferences from shortages cannot sustain the charge. Therefore the statement could not be treated as corroborative evidence of clandestine removal. [Paras 11]

The recorded statement does not amount to an admission of clandestine removal and cannot support the demand.

Effect of deposit/adjustment made under protest - Whether earlier deposit of duty (adjusted against the confirmed demand) without further corroboration precludes setting aside the demand. - HELD THAT: - The Tribunal observed that the appellant had deposited a sum which was appropriated by the adjudicating authority, but that deposit was made under protest. Reliance on such payment, without corroborative evidence of clandestine removal, is insufficient to sustain the demand. The Tribunal followed precedent holding that mere payment or adjustment under protest does not constitute conclusive proof of guilt or of the correctness of the demand. [Paras 14]

Deposit/adjustment made under protest is not conclusive proof and does not validate the demand in absence of corroborative evidence.

Final Conclusion: The adjudicating authority and Commissioner (Appeals) confirmed the demand on assumptions and surmises without requisite corroborative investigation; the confirmation is unsustainable. The impugned order is set aside and the appeal is allowed.

Manufacture of excisable goods - Refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 - Procedural and conditional role of Notification No. 41/2007 ST - Service Tax registration and entitlement to credit

Manufacture of excisable goods - Service Tax registration and entitlement to credit - The respondent is a manufacturer of excisable goods and is registered under the Central Excise and Service Tax laws; therefore the contention that it did not manufacture excisable goods is without merit. - HELD THAT: - The Tribunal examined the orders of the original authority, the impugned appellate order and documents placed on record, and found that the respondent was registered by the department for manufacture of goods falling under specified Central Excise Tariff headings, filed ER 1 returns, cleared goods to the Domestic Tariff Area on payment of duty and exported goods under ARE 1. The department had also granted service tax registration for the respondent's taxable services. These factual findings establish that the respondent carried on manufacture of excisable goods and rendered taxable services, and the Revenue produced no evidence to the contrary. The Revenue's general plea that the unit only performed testing/analysis without manufacture was therefore rejected as contrary to the documentary record and registration by the department. [Paras 7, 8, 10]

The claim that the respondent did not manufacture excisable goods or render taxable services is rejected and the respondent is held to be a manufacturer duly registered under the relevant laws.

Refund of unutilised Cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004 - Procedural and conditional role of Notification No. 41/2007 ST - Refund of unutilised cenvat credit was claimable under Rule 5 of the Cenvat Credit Rules, 2004, and Notification No. 41/2007 ST prescribes procedures, conditions and safeguards for such refund rather than denying its substantive availability. - HELD THAT: - The Tribunal noted that the refund applications were filed under Rule 5 of the Cenvat Credit Rules, 2004, which provides for refund of unutilised cenvat credit in cases of export of goods or services. Notification No. 41/2007 ST was held to prescribe the procedural conditions and safeguards for processing such refunds and is not a standalone rebate provision that nullifies the refund entitlement under Rule 5. The Revenue did not challenge or controvert applicability of Rule 5 in its pleadings before the Tribunal, nor did it show that the respondent failed to meet the prescribed conditions; hence there was no basis to deny the refund on the ground advanced by the Revenue. [Paras 9, 11]

The refund claims filed under Rule 5 of the Cenvat Credit Rules, 2004 are maintainable and Notification No. 41/2007 ST only prescribes procedural safeguards for such refunds; the Revenue's contention to the contrary is rejected.

Final Conclusion: The Revenue's appeal was dismissed; the Tribunal found the respondent to be a registered manufacturer and service provider and upheld the grant of refund of unutilised cenvat credit under Rule 5, observing that Notification No. 41/2007 ST prescribes procedural conditions but does not negate refund entitlement.

Interim bail under Section 439 of the Criminal Procedure Code - custodial conditions and jail overcrowding/COVID-19 risk - commercial quantity of contraband

Interim bail under Section 439 of the Criminal Procedure Code - custodial conditions and jail overcrowding/COVID-19 risk - commercial quantity of contraband - Whether interim bail should be granted to the petitioners in FIR No.10/2019 in light of the charge-sheet volume, alleged jail overcrowding and COVID-19 risk, and the commercial quantity of contraband alleged. - HELD THAT: - The petitioners sought interim bail under Section 439 Cr.P.C., relying on the voluminous charge-sheet and asserted adverse custodial conditions including overcrowding and risk from COVID-19. The Union opposed bail, emphasising that the case involves commercial quantity of contraband. The jail authorities reported that the prison strength (1173) and actual occupancy (1160) did not amount to overcrowding and that prisoners previously found COVID-19 positive have since tested negative. The court considered the submissions and the jail report and concluded that the factual circumstances and the nature of the offence did not furnish sufficient ground to grant interim bail. The petitioners' inability to fully argue the main bail due to the size of the record was noted but not treated as a determinative ground for interim release in view of the other considerations. [Paras 8, 9]

Interim bail applications dismissed.

Final Conclusion: The High Court dismissed the interim bail applications under Section 439 Cr.P.C., finding no ground for release after considering the nature of the offence and the jail authorities' report on occupancy and COVID-19 status.