TaxTMI Updates e-Newsletter
Aug 19,2021

Classification under Harmonized System of Nomenclature (HSN) - General Rules for the Interpretation of the Customs Tariff - Chapter heading 11.06 - flour, meal and powder of dried leguminous vegetables - residual classification under heading 2106 - food preparations not elsewhere specified or included - Explanatory Notes to HSN - CBIC Circular on Chhatua/Sattu - binding nature of Advance Ruling under Section 103 - maintainability under Section 98(2) of the CGST Act

Maintainability under Section 98(2) of the CGST Act - Whether the Authority must refuse admission because Revenue initiated an enquiry after the applicant filed the advance ruling application. - HELD THAT: - The Authority held that the first proviso to Section 98(2) bars admission only where the question is already pending or decided in proceedings in the applicant's case at the time of filing. Revenue did not show that any enquiry had been initiated prior to the filing date. Initiation of enquiry after the filing does not vitiate or preclude the Authority from considering the application and issuing a ruling. Consequently, the application could not be dismissed on the ground that Revenue initiated an enquiry post-filing. [Paras 25]

Application admissible notwithstanding Revenue's initiation of enquiry after filing; Authority proceeded to decide the classification question.

Chapter heading 11.06 - flour, meal and powder of dried leguminous vegetables - Explanatory Notes to HSN - CBIC Circular on Chhatua/Sattu - Whether the applicant's instant mix flours fall under HSN 1106. - HELD THAT: - Chapter heading 11.06 covers flours/meal of dried leguminous vegetables and similar products where any additives are of very small amounts. Examination of the packaging and the ingredient/percentage breakdown showed that the products contain spices and other ingredients in proportions ranging from 5% to 27%, ingredients and proportions not contemplated within Chapter 11.06 or its Explanatory Notes. The Authority distinguished the CBIC Circular on Chhatua/Sattu because that circular applies where additives are "very small"; the composition of the applicant's products did not meet that test. On this basis the Authority found that the products are not classifiable under HSN 1106. [Paras 28, 29]

Products are not classifiable under HSN 1106.

Residual classification under heading 2106 - food preparations not elsewhere specified or included - General Rules for the Interpretation of the Customs Tariff - Whether the applicant's instant mix flours are classifiable under HSN 2106 and the consequent GST rate. - HELD THAT: - Applying Rule 1 of the General Rules for Interpretation and the Explanatory Notes to HSN, the Authority concluded that the instant mix products are preparations for use after processing (cooking) and are not covered by any specific heading. The packaging described them as "Instant Mix" and gave cooking instructions; the products therefore fall within the residual entry of Chapter 2106. Having classified the goods under subheading 2106 90 (other), the Authority referred to the applicable entries in Notification No.01/2017-Central Tax (Rate) and held that such goods attract GST as per Schedule-III (Sl. No. 23), i.e., the rate prescribed for 'Food preparations not elsewhere specified or included'. [Paras 30, 33, 35]

Products classifiable under HSN 2106 90 (other) and attract GST at the rate specified for that heading.

Final Conclusion: The Authority ruled that the applicant's instant mix flours are not classifiable under HSN 1106 but fall under HSN 2106 90 (residual entry for food preparations) and accordingly attract GST as provided for that heading; the application was admissible despite Revenue having initiated an enquiry after filing.

Input tax credit admissibility - blocked input tax credit under Section 17(5)(c) of the CGST Act, 2017 - works contract service classification - movable versus immovable property - test of permanency for attachment - SITC (supply, installation, testing and commissioning) - CBEC Order No.58/1/2002-CX regarding refrigeration/air-conditioning plants

Input tax credit admissibility - blocked input tax credit under Section 17(5)(c) of the CGST Act, 2017 - works contract service classification - test of permanency for attachment - SITC (supply, installation, testing and commissioning) - CBEC Order No.58/1/2002-CX regarding refrigeration/air-conditioning plants - Input tax credit on the Air conditioning and Cooling System is not admissible as it is blocked under Section 17(5)(c) of the CGST Act, 2017. - HELD THAT: - The Authority examined the contract (SITC) and invoices and found that the centralised air conditioning/cooling installation is a system assembled on site from multiple components which, after installation, lose their separate identity and cannot be taken to market or shifted except after dismantling. Applying the Supreme Court's "test of permanency" and the reasoning in the cited precedents, and having regard to CBEC Order No.58/1/2002 CX which treats refrigeration/air conditioning plants as systems that become immovable when erected, the installation qualifies as supply of an immovable (works contract) and not as supply of goods. Section 17(5) is a non obstante provision and clause (c) covers works contract services for construction of immovable property (other than plant and machinery); the Authority held the centralised AC system to fall within the blocked category. The invoices for goods and labour and the terms of the work order (including transfer of system to owner on commissioning and comprehensive maintenance) support this classification and the conclusion that ITC is blocked. [Paras 11, 12, 14]

ITC on the Air conditioning and Cooling System is not admissible as it is blocked under Section 17(5)(c) CGST Act.

Input tax credit admissibility - blocked input tax credit under Section 17(5)(c) of the CGST Act, 2017 - works contract service classification - movable versus immovable property - test of permanency for attachment - CBEC Order No.58/1/2002-CX regarding refrigeration/air-conditioning plants - Input tax credit on the Ventilation System is not admissible as it is blocked under Section 17(5)(c) of the CGST Act, 2017. - HELD THAT: - The ventilation installation comprises fans, ducting, supports, panels and allied components supplied and assembled on site under the same HVAC work order. After installation these parts lose individual identity and form an integrated ventilation system which cannot be marketed or shifted without dismantling, thereby satisfying the permanency test. The Authority treated such on site assembled ventilation works as erection resulting in immovable property and therefore as works contract supply. Reliance on the CBEC clarification and relevant Supreme Court authorities led to the conclusion that the supply is covered by Section 17(5)(c) and that input tax credit is accordingly blocked. [Paras 11, 12, 14]

ITC on the Ventilation System is not admissible as it is blocked under Section 17(5)(c) CGST Act.

Final Conclusion: The Authority rules that input tax credit is not admissible on the Air conditioning and Cooling System and the Ventilation System supplied, installed and commissioned under the HVAC work order, as these supplies are works contract/immovable installations and constitute blocked credit under Section 17(5)(c) of the CGST Act, 2017.

Taxable value - government subsidy - subsidy excluded from value under Section 15(2)(e) CGST Act - rates inclusive of GST in tender - obligation to remit tax collected under Section 76(1) CGST Act - impact of Section 17(2) on input tax credit

Taxable value - government subsidy - subsidy excluded from value under Section 15(2)(e) CGST Act - rates inclusive of GST in tender - obligation to remit tax collected under Section 76(1) CGST Act - Whether the subsidy should be deducted from the system cost to arrive at the taxable value for charging GST and related consequences where the tender rates and subsidy calculation are inclusive of GST. - HELD THAT: - The Authority found on evidence from the nodal agency that the subsidy disbursed through the DISCOMs is borne by the State/Central Government and that DISCOMs act only as facilitators. Section 15(2)(e) CGST Act excludes government subsidies directly linked to the price from the value of supply; accordingly the subsidy portion shall be deducted from the system cost to determine the taxable value on the tax invoice and GST liability shall be computed on that taxable value. However, the tender/EOI and the subsidy computation were based on rates expressed inclusive of GST; consequently the subsidy amount as calculated necessarily included an element of GST. Where the applicant has collected from any person any amount representing tax (including any amount collected in relation to the subsidy element), Section 76(1) requires that such collected amount representing tax must be paid to the Government forthwith. The Authority therefore clarified both: (a) for invoicing to the customer the taxable value is the system cost less the government subsidy; and (b) if tax has nevertheless been collected (or the subsidy payment to supplier contains the GST component collected), the supplier remains bound to remit such collected tax to the Government in terms of Section 76(1). [Paras 12, 13, 15, 16, 18]

Taxable value shall be determined after deducting the government subsidy from the system cost and GST is chargeable on that taxable value; notwithstanding this, any amount collected as tax in relation to the subsidy must be remitted to the Government under Section 76(1).

Impact of Section 17(2) on input tax credit - taxable supply - Whether Section 17(2) CGST Act has any implication for reversal of input tax credit if the taxable value is determined after subtracting the subsidy from the system price. - HELD THAT: - The Authority observed that the applicant's supply is a taxable supply and that arriving at the taxable value by deducting the subsidy does not convert the nature of the supply into an exempt supply. Section 17(2), which deals with reversal of input tax credit in respect of exempt supplies, is therefore not attracted merely because the taxable value is computed after deduction of the government subsidy. The Authority held that no special implication of Section 17(2) arises in the facts presented. [Paras 17, 18]

Section 17(2) CGST Act has no implication in the present case where the supply remains taxable despite the subsidy being deducted to arrive at the taxable value.

Final Conclusion: The Authority ruled that the government subsidy shall be deducted from the system cost to arrive at the taxable value and GST shall be charged on that net taxable value; Section 17(2) has no bearing as the supply remains taxable; however, any amount actually collected as tax (including any GST element included in the subsidy payment) must be remitted to the Government in accordance with law.

Consideration under the CGST Act - subsidy exclusion from consideration - scope of supply under Section 7(1)(a) versus exclusion under Section 7(2) - valuation exclusion under Section 15(2)(e) - Schedule III exclusion (actionable claim)

Consideration under the CGST Act - subsidy exclusion from consideration - Subject one time incentive received from the State Government is consideration liable to GST. - HELD THAT: - The Authority examined the scheme and held that the one time incentive is paid to motivate and encourage the bank to undertake and perform under the State's Sahay Yojna and is linked to the applicant's commercial performance (amount of loans disbursed). As the payment is quid pro quo for the applicant's activity and is not passed on to customers or tied to reducing their interest burden, it constitutes consideration in the hands of the applicant. The Authority rejected the contention that the payment is a government subsidy excluded from 'consideration', observing that subsidy in the statutory sense implies public welfare relief that lessens public cost impact; the subject incentive does not have that character and therefore cannot be equated to a subsidy excluded from consideration under Section 2(31). [Paras 18, 19, 21]

The incentive is consideration and is liable to GST; it is not a subsidy excluded from consideration.

Scope of supply under Section 7(1)(a) versus exclusion under Section 7(2) - The incentive is a supply covered by Section 7(1)(a) and is not an activity excluded under Section 7(2). - HELD THAT: - Having found the payment to be a quid pro quo for services performed by the bank under the scheme, the Authority held that the transaction falls within the definition of supply under Section 7(1)(a). The submission that the payment could be treated as an activity excluded under Section 7(2) (including items in Schedule III) was rejected because the incentive is neither a public authority activity nor one of the specific transactions in Schedule III; it is a performance linked commercial payment to the applicant. [Paras 18, 21, 23]

The subject incentive is a supply under Section 7(1)(a) and is not covered by Section 7(2).

Valuation exclusion under Section 15(2)(e) - The incentive does not qualify for exclusion from the value of taxable supply under Section 15(2)(e). - HELD THAT: - The Authority considered whether the payment could be excluded from valuation as a government subsidy under Section 15(2)(e) and concluded that, since the incentive is not a government subsidy aimed at public welfare nor a payment that reduces the recipient customer price, it cannot be excluded from the taxable value. The incentive being consideration for the applicant's performance must be included in valuation. [Paras 21, 23]

The incentive is not excluded from valuation under Section 15(2)(e) and must be included for GST purposes.

Schedule III exclusion (actionable claim) - The incentive is not an actionable claim or an item covered by Schedule III such that it would be neither a supply of goods nor services. - HELD THAT: - The Authority rejected the applicant's submission that the incentive constitutes an actionable claim covered by Schedule III. There was no supply of an actionable claim by either party; the incentive is a one time commercial payment to the applicant for achieving loan disbursement targets and does not assume the character of an actionable claim under the Transfer of Property Act or the Schedule III exclusions. [Paras 21]

The incentive is not an actionable claim or otherwise covered by Schedule III; it remains a taxable supply.

Final Conclusion: The Authority rules that the one time incentive paid by the State Government under the Atma Nirbhar Gujarat Sahay Yojna is consideration for a supply of services by the bank, is not a subsidy excluded from GST, is not covered by Schedule III or Section 7(2), and is not eligible for exclusion from valuation under Section 15(2)(e); accordingly the incentive is liable to GST.

Intermediary - export of services - place of supply - zero rated supply - support services - market research services

Intermediary - export of services - place of supply - zero rated supply - market research services - support services - Whether the services supplied by the applicant are intermediary services or, alternatively, export of services/zero rated supplies and the consequent place of supply determination - HELD THAT: - The Authority examined the applicant's claim that it provides market research/marketing support services on its own account to a foreign service recipient and therefore is not an intermediary, and that the supply qualifies as export of services (zero rated) as the supplier is located in India, recipient is located outside India, place of supply is outside India, payment is received in convertible foreign exchange and the parties are not establishments of a distinct person. However, the Authority found that the determinative evidence to ascertain the true scope of supply-namely the Agreement/contract or other documentary authorization delineating the relationship and scope between the applicant and the foreign recipient-is absent. The applicant admitted there is no contract and supplied only sample reports and a certificate; the Authority also noted activities (identifying and contacting potential buyers, supplying lists and reports) which prima facie involve facilitation. Given the lack of an agreement or sufficient material to test the submissions against the statutory definition of "intermediary" and the place of supply rules, the Authority declined to pronounce a substantive ruling on classification, place of supply or zero-rating. The Authority emphasised that assessment of taxability on the merits is a revenue function and refused to proceed on best judgement in the absence of necessary contractual evidence, indicating that a ruling would be possible upon production of the relevant Agreement/contract or sufficient material to establish the nature of the supply. [Paras 19, 21, 22, 23]

The Authority refrained from pronouncing an advance ruling on whether the services are intermediary services or export (zero rated) for want of an Agreement/Contract and adequate material; no substantive classification is declared and a ruling cannot be given on the limited record.

Final Conclusion: The Authority declined to pronounce an advance ruling on the tax character (intermediary versus export/zero rated) or place of supply of the applicant's services due to absence of the Agreement/Contract and insufficient material; the applicant may furnish the requisite contract/documentary evidence for fresh consideration.

Input Tax Credit - Blocked credit under Section 17(5)(c) - Blocked credit under Section 17(5)(d) - Works contract - Plant and machinery - Test of permanency - Composite supply

Input Tax Credit - Blocked credit under Section 17(5)(c) - Works contract - Test of permanency - Input tax credit on supply, installation and commissioning of Central Air Conditioning Plant - HELD THAT: - The Authority found the central air conditioning plant to be a system composed of various components which, once assembled and installed, lose their identity as separate machines and become part of the building. Applying the test of permanency as laid down by the Supreme Court and relevant administrative guidance, the installed centralized air conditioning system was held to be immovable and its supply (including erection/installation) characterised as a works contract. Consequently the supply falls within the exclusion of input tax credit under Section 17(5)(c) of the CGST Act. [Paras 18]

ITC is blocked under Section 17(5)(c) for the Central Air Conditioning Plant.

Input Tax Credit - Blocked credit under Section 17(5)(c) - Works contract - Test of permanency - Input tax credit on supply and installation of Lift - HELD THAT: - The Authority held that a lift comprises multiple components that are assembled and installed to function as an integral part of the building; it comes into existence only after erection and installation and cannot be shifted intact without dismantling. Applying the permanency test and precedents treating such installations as immovable, the supply was classified as a works contract service and not as plant and machinery. [Paras 19]

ITC is blocked under Section 17(5)(c) for the Lift.

Input Tax Credit - Blocked credit under Section 17(5)(c) - Works contract - Input tax credit on Electrical fittings (cables, switches, NCB and electrical consumables) provided in the course of building construction - HELD THAT: - Electrical fittings and wiring were held to be integrated into the building's electrical network, usually concealed and fitted as part of construction; they cannot be shifted intact without dismantling and therefore satisfy the permanency test. The installation of such fittings was characterised as part of works contract for construction of immovable property, attracting the exclusion of ITC under Section 17(5)(c). [Paras 20]

ITC is blocked under Section 17(5)(c) for Electrical fittings used in the construction of the building.

Input Tax Credit - Blocked credit under Section 17(5)(c) - Plant and machinery - Composite supply - Test of permanency - Input tax credit on Roof Solar Plant installed on the building - HELD THAT: - The Roof Solar Plant was found to be supplied under a comprehensive SITC contract and specifically designed/fitted to the applicant's roof on concrete bases. Applying the permanency test and relevant Supreme Court authority, the installed solar plant was treated as immovable once erected (sale/shift would require prior dismantling). The Authority further treated the transaction as a composite works contract supply; therefore the supply falls within the prohibition of ITC under Section 17(5)(c). [Paras 21]

ITC is blocked under Section 17(5)(c) for the Roof Solar Plant.

Input Tax Credit - Blocked credit under Section 17(5)(c) - Works contract - Test of permanency - Input tax credit on supply and installation of Fire Safety Extinguishers - HELD THAT: - The installed fire safety system was held to consist of multiple components assembled on metal framing and concrete foundations, integrated into the building and not shiftable intact. Applying the permanency test and analysing the nature of installation, the supply was characterised as a works contract forming part of the immovable property, bringing it within the prohibition of ITC under Section 17(5)(c). [Paras 22]

ITC is blocked under Section 17(5)(c) for Fire Safety Extinguishers.

Input Tax Credit - Plant and machinery - Input tax credit on Generator installed at the premises - HELD THAT: - The Authority found the generator to be a movable item with independent existence which, although capitalised, is not part of the immovable structure of the building. On this basis the supply was held to be capital goods/plant and machinery eligible for input tax credit. [Paras 23]

ITC is admissible for the Generator.

Input Tax Credit - Plant and machinery - Input tax credit on New Locker Cabinet - HELD THAT: - The locker cabinet was determined to be movable goods (furniture & fixtures) with independent existence and not part of the immovable building. Consequently the supply does not fall within the blocked categories of Section 17(5) and ITC is admissible. [Paras 24]

ITC is admissible for the New Locker Cabinet.

Input Tax Credit - Blocked credit under Section 17(5)(d) - Input tax credit on Architect and Interior Designing service fees for new construction - HELD THAT: - The Authority held that architect and interior designer services supplied for the new administrative building are supplies received for construction of immovable property on the applicant's own account. Whether charged to revenue or capital in the applicant's books did not alter their character. Such services are therefore covered by Section 17(5)(d), which bars ITC on goods or services received for construction of immovable property (other than plant and machinery). [Paras 25]

ITC is blocked under Section 17(5)(d) for Architect and Interior Designing fees.

Final Conclusion: The Authority ruled that ITC is admissible for the Generator and New Locker Cabinet. ITC is denied under Section 17(5)(c) for Central Air Conditioning Plant, Lift, Electrical Fittings, Fire Safety Extinguishers and Roof Solar Plant, and denied under Section 17(5)(d) for Architect and Interior Designing fees.

Blocked input tax credit on food and beverages under Section 17(5)(b)(i) - availability of input tax credit where obligatory for employer under proviso to Section 17(5)(b)(iii) - interpretation of provisos and punctuation (semicolon) to determine applicability of provisos - supply by employer to employee as part of contractual employment (salary/CTC) not subject to GST - recovery of nominal amount from employees as activity without consideration

Blocked input tax credit on food and beverages under Section 17(5)(b)(i) - interpretation of provisos and punctuation (semicolon) to determine applicability of provisos - Input tax credit on GST paid for canteen facility provided to employees. - HELD THAT: - The Authority examined Section 17(5)(b) and held that the sub-clause dealing with food and beverages (item (i)) is an independent provision separate from the proviso to sub-clause (iii). The punctuation (colon and semicolon) in the statutory text indicates that the proviso to clause (iii) does not apply to clause (i). Relying on this reading and authorities explaining the effect of semicolons in separating expressions, the Authority concluded that the proviso which permits ITC where an employer is obliged by law to provide a benefit to employees cannot be read into clause (i). Consequently, GST paid on canteen services falls within the category of supplies enumerated in clause (i) for which input tax credit is blocked, and therefore ITC is not admissible to the applicant. [Paras 8]

ITC on GST paid on canteen facility is blocked under Section 17(5)(b)(i) of the CGST Act and is inadmissible to the applicant.

Recovery of nominal amount from employees as activity without consideration - supply by employer to employee as part of contractual employment (salary/CTC) not subject to GST - Whether GST is leviable on the nominal amount recovered by the applicant from employees for use of the canteen facility. - HELD THAT: - The Authority found as a fact that the applicant collects only the employees' portion of canteen charges and remits that amount to the canteen contractor without retaining any profit margin; the remainder is borne by the employer as part of the cost to company. The collection of employees' contribution is carried out for authorized use by employees and, on these facts, is treated as an activity without consideration. Further, supply by an employer to an employee in terms of contractual employment (as part of salary/CTC) is not subject to GST. On these bases the Authority held that the amount representing the employees' portion, collected and passed on by the applicant, does not attract GST liability at the hands of the applicant. [Paras 7, 8]

GST is not leviable on the amount representing the employees' portion of canteen charges collected by the applicant and paid to the canteen service provider.

Final Conclusion: The Authority ruled that input tax credit on GST paid for canteen services is blocked and inadmissible under Section 17(5)(b)(i), while the nominal amount collected from employees and remitted to the canteen contractor is not subject to GST when collected and passed on by the employer without profit.

Advance ruling - classification of goods - special purpose motor vehicles - motor vehicles for the transport of goods - proposed supply - custom-made goods - admissibility of application

Admissibility of application - proposed supply - custom-made goods - Application for advance ruling on classification of Garbage Compactor and Hook Loader/Tipper was rejected and not admitted for decision on merits. - HELD THAT: - The Authority examined whether the applicant had established that the supply in respect of which an advance ruling was sought was being undertaken or was proposed to be undertaken with sufficient specificity. The applicant asserted proposed future supplies and reliance on past supplies by other units, but did not produce purchase orders, tenders, or concrete documentary evidence showing that the Chennai unit proposed to manufacture or supply the custom-made vehicles. The Authority noted that the products are custom-built and that classification under competing tariff headings (CTH 8704 v. CTH 8705) depends on the specific nature, features and specifications of the vehicle. The explanatory notes to HSN 8705 indicate that special purpose vehicles are specially constructed or adapted and that purchase specifications are necessary to determine classification. In the absence of purchase orders, tenders, or specific product details for the proposed supplies from the applicant's unit, the Authority held that it could not determine classification on merits and therefore could not admit the application for consideration. [Paras 8, 9]

Application rejected for lack of documentary evidence demonstrating a concrete proposed/custom specification of supply; classification not decided on merits.

Final Conclusion: The Authority declined to admit the application for advance ruling and rejected it because the applicant failed to furnish orders, tenders or specific product details for the proposed custom-made Garbage Compactor and Hook Loader/Tipper, and accordingly classification under CTH 8704 or 8705 was not decided on merits.

Supply - Sale-in-Transit - Composite supply - Works contract - Advance Ruling admissibility under Section 95/97 - Levy of GST on inter-state supplies

Advance Ruling admissibility under Section 95/97 - Supply - Whether the question on liability to GST where ownership transfers during movement (Sale in Transit) involving more than one supply is admissible for advance ruling. - HELD THAT: - The Authority examined the reframed Question No.1 which sought a general ruling on exemption for supplies effected by transfer of title while goods are in movement. The Authority held that the question relates to liability involving two distinct supplies (vendor to applicant and applicant to TANGEDCO). Under the statutory scheme, an advance ruling can be sought by a supplier only in respect of supplies made or proposed to be made by that applicant (Section 95 read with Section 103). Since Question No.1 pertained to more than one supply and sought a general determination of liability across supplies, it was not admitted for consideration on merits. [Paras 6]

Question No.1 not admitted for consideration under the Advance Ruling provisions.

Supply - Sale-in-Transit - Composite supply - Works contract - Levy of GST on inter-state supplies - Whether the Components supplied by the applicant to TANGEDCO (title transferred while in transit under the contract) constitute a supply liable to GST. - HELD THAT: - The Authority reviewed the contract terms, tender clauses and documentary evidence showing that the applicant procured components from vendors and transferred title to TANGEDCO as part of the RMU contract. The contract treats the entire RMU work as a composite supply of works contract (a supply of services under Schedule II and Section 2(119)), while the scope expressly includes supply of spares/commissioning and O&M spares whose cost is included in the contract price and whose delivery and handover are conditions for commissioning and take over. Under the GST regime each limb of supply between distinct persons is taxable and the supply of components/spares by the applicant to TANGEDCO amounts to supply for consideration in the course of furtherance of business. Consequently, such supplies do not enjoy the prior CST regime exemption and are liable to GST under Section 7. [Paras 6, 8, 9]

The Components supplied by AHPL to TANGEDCO in the facts of this case are 'supply' under Section 7 and attract Goods and Services Tax.

Final Conclusion: The Authority declined to admit the general question on sale in transit involving multiple supplies for advance ruling; on the admitted question it ruled that the components supplied by the applicant to TANGEDCO pursuant to the RMU contract constitute a supply under the GST law and are taxable.

Supply of service versus supply of goods - job work - treatment or process applied to another person's goods - Schedule II clause 3 of the CGST Act, 2017 - manufacturing services on physical inputs (goods) owned by others - classification under SAC 998881 - applicable rate CGST 9% and SGST 9%

Supply of service versus supply of goods - job work - treatment or process applied to another person's goods - Schedule II clause 3 of the CGST Act, 2017 - Activity of bus body building on chassis supplied by the customer is a supply of service. - HELD THAT: - The Authority examined the contractual practice and work trail showing that customers supply and retain ownership of the chassis while the applicant undertakes fabrication and mounting of the body using its materials for a lump sum job work charge. The definitions and provisions relating to job work, and para 3 of Schedule II which treats any treatment or process applied to another person's goods as a supply of services, were applied. The factual finding that ownership of the chassis remains with the customer and that consideration is only for fabrication services leads to classification of the activity as job work and therefore a supply of service. [Paras 7, 9]

Bus body building on chassis supplied by the customer is to be treated as a supply of service (job work) under Schedule II of the CGST Act, 2017.

Manufacturing services on physical inputs (goods) owned by others - classification under SAC 998881 - Service is classifiable under SAC 998881 (Motor vehicle and trailer manufacturing services). - HELD THAT: - Having held the activity to be a service/job work on customer owned inputs, the Authority applied the descriptive scheme and relied on the Central Board clarification which distinguishes situations where body builders work on customer supplied chassis. The activity fits within 'manufacturing services on physical inputs (goods) owned by others' and corresponds to SAC 998881 as the appropriate classification for motor vehicle and trailer manufacturing services provided on inputs owned by another. [Paras 7, 9]

The bus body building service is classified under SAC 998881.

Applicable rate CGST 9% and SGST 9% - manufacturing services on physical inputs (goods) owned by others - Applicable GST rate is CGST 9% and SGST 9% (total 18%) under entry No.26 for manufacturing services on physical inputs owned by others. - HELD THAT: - The Authority determined the rate after classifying the activity under the relevant entry for manufacturing services on physical inputs owned by others. It relied on the notification entry and the Board's Circular clarifying that where the body builder provides fabrication on chassis supplied by the principal, the supply is a service attracting the job work rate. Accordingly, the entry for such manufacturing services prescribes CGST 9% and SGST 9%. [Paras 8, 9]

The service will attract CGST @9% and SGST @9% as per the entry for manufacturing services on physical inputs owned by others.

Final Conclusion: The Authority ruled that bus body building performed by the applicant on chassis supplied and owned by customers is a job work service (supply of service) classified under SAC 998881 and taxable at CGST 9% and SGST 9% (total 18%).

'Supply' as defined under Section 7 of the CGST/TNGST Act, 2017 - consideration' as constituting taxable value for supply - agreeing to do an act' as a taxable activity - business' as inclusive definition under GST - approval of a third party does not negate existence of a supplier-recipient contract - classification as 'Other Miscellaneous Services' (SAC 9997)

'Supply' as defined under Section 7 of the CGST/TNGST Act, 2017 - approval of a third party does not negate existence of a supplier-recipient contract - business' as inclusive definition under GST - The transaction of agreeing to part with leasehold interests in favour of INOX is a 'supply' under GST. - HELD THAT: - The Authority examined the lease deed terms and the Memorandum of Understanding between the applicant and INOX. Although SIPCOT retained the right to grant or refuse approval and to impose conditions, the MOU records a clear agreement between IPL and INOX in which IPL undertakes to part with its leasehold interests and INOX undertakes corresponding obligations; the conditions of the transaction are set out by the parties and the possibility of SIPCOT approval was contemplated in the MOU. The inclusive definition of 'supply' under Section 7 requires an activity made or agreed to be made for a consideration in the course or furtherance of business. The applicant's undertaking to part with its leasehold interests for consideration, in furtherance of business, thus meets the statutory elements of 'supply'. The involvement of a third party approver (SIPCOT) does not extinguish the supplier recipient relationship or preclude the transaction from being a supply where the parties have entered into an agreement conditioned upon such approval. Consequently, the activity is characterised as an agreement to do an act, falling within the scope of supply under the Act. [Paras 7]

The activity of agreeing to part with the leasehold interests is a 'supply' under Section 7 and constitutes a transaction in the course or furtherance of business.

Consideration' as constituting taxable value for supply - 'agreeing to do an act' as a taxable activity - classification as 'Other Miscellaneous Services' (SAC 9997) - GST is payable on the consideration received by the applicant for agreeing to part with leasehold interests, and the activity is taxable as a service under 'Other Miscellaneous Services' (SAC 9997). - HELD THAT: - The consideration paid by INOX for IPL's agreement to part with leasehold interests is payment for the agreed activity and therefore falls within the definition of 'consideration' for a taxable supply. The Authority concluded that the transaction is not a direct transfer of SIPCOT's lease (since IPL lacked unilateral power to sub let) but is an agreement by IPL to part with its leasehold interests for the remaining lease period in favour of INOX. Such agreeing to do an act is a taxable activity and, on classification, fits within 'Other Miscellaneous Services' (SAC 9997). Hence GST is leviable on the consideration received by IPL. [Paras 7, 8]

GST is liable on the consideration received by the applicant; the activity is taxable as a service under 'Other Miscellaneous Services' (SAC 9997).

Final Conclusion: The Authority ruled that the applicant's agreement to part with leasehold interests in favour of M/s. INOX Air Products Private Limited constitutes a 'supply' under Section 7 of the CGST/TNGST Act, 2017; the consideration received is taxable and GST is payable, the activity being classifiable as 'Other Miscellaneous Services' (SAC 9997).

Eligibility to avail input tax credit for supplies used in the course or furtherance of business - restriction on input tax credit for goods or services received for construction of immovable property (Section 17(5)(d)) - exclusion of land and building from the definition of "plant and machinery" - non-obstante effect of Section 17(5) over Section 16(1)

Eligibility to avail input tax credit for supplies used in the course or furtherance of business - restriction on input tax credit for goods or services received for construction of immovable property (Section 17(5)(d)) - exclusion of land and building from the definition of "plant and machinery" - non-obstante effect of Section 17(5) over Section 16(1) - Entitlement of the applicant to avail and utilize input tax credit of GST charged by IPL on consideration paid for transfer of leasehold rights, if that transaction is considered a supply. - HELD THAT: - The amount paid to IPL was consideration for acquiring leasehold rights in land to set up an Air Separation Unit (ASU). Section 16(1) permits credit of input tax on supplies used in the course or furtherance of business, but Section 17(5)(d) specifically denies ITC in respect of goods or services received for construction of an immovable property on own account except where such immovable property qualifies as "plant and machinery." The Explanation excludes land, building or other civil structures from the definition of "plant and machinery." Even assuming the ASU may qualify as plant and machinery, the leased land itself remains excluded. The supply from IPL was in relation to acquisition of leasehold of land; therefore the tax attributable to that supply falls within the restriction in Section 17(5)(d). The non-obstante opening of Section 17(5) makes that restriction prevail over the general entitlement under Section 16(1). Accordingly, GST charged by IPL on the transaction for transfer of leasehold rights is not available as ITC to the applicant. [Paras 7, 8]

The applicant is not entitled to avail and utilize input tax credit of GST charged by IPL on the transfer of leasehold rights, as such credit is restricted under Section 17(5)(d) if the transaction is a supply.

Final Conclusion: The Advance Ruling holds that GST paid to IPL on the transaction for transfer of leasehold rights (if treated as a supply) is not eligible as input tax credit to INOX due to the express restriction in Section 17(5)(d) and the exclusion of land from the definition of "plant and machinery."

Refund of unutilized input tax credit - binding effect of an Appellate Authority for Advance Ruling across jurisdictions - time limit for availing input tax credit under Section 16(4) of the CGST Act - relevant date and entitlement under Section 54 of the CGST Act - scope of refund provisions under Section 54 (zero-rated supplies and inverted duty structure)

Binding effect of an Appellate Authority for Advance Ruling across jurisdictions - refund of unutilized input tax credit - Whether the AAAR, Maharashtra ruling in favour of the appellant could be relied upon to claim refund of unutilized ITC in Rajasthan. - HELD THAT: - The AAAR, Maharashtra order relied upon by the appellant is binding only on the applicant who sought the ruling and the concerned/jurisdictional officer in respect of that applicant. The appellate authority observed that the AAAR Maharashtra ruling therefore is not binding on the Rajasthan jurisdictional authority and cannot form the basis for allowing the refund claim filed in Rajasthan. The appellate authority also noted that the MAHARAAAR order did not itself direct any refund of ITC. On these grounds the appellant's reliance on the out-of-jurisdiction AAAR order was held to be unsustainable. [Paras 6, 7]

AAAR, Maharashtra ruling is not binding on the Rajasthan jurisdictional authority and cannot sustain the refund claim filed in Rajasthan.

Relevant date and entitlement under Section 54 of the CGST Act - scope of refund provisions under Section 54 (zero-rated supplies and inverted duty structure) - Whether Section 54 of the CGST Act permits refund of the unutilized ITC claimed by the appellant for the period 2018-2019. - HELD THAT: - On examining Section 54, the appellate authority found that refund provisions are available in specific scenarios (for example, zero-rated supplies without payment of tax and accumulation due to inverted duty structure) and that there is no general provision in Section 54 allowing refund of unutilized ITC of the kind claimed by the appellant. The authority held that the present claim does not fall within the enumerated categories for refund under Section 54 and therefore cannot be allowed under that provision. [Paras 8, 9]

The claimed refund of unutilized ITC is not covered by the refund categories in Section 54 and is not permissible under that provision.

Time limit for availing input tax credit under Section 16(4) of the CGST Act - refund of unutilized input tax credit - Whether ITC that could not be availed within the time prescribed by Section 16(4) becomes refundable under Section 54. - HELD THAT: - The appellate authority noted that Section 16(4) prescribes the time and manner for availing eligible input tax credit. The appellant admitted that the time limit for taking credit had expired and contended this was due to pendency before the AAR/AAAR. The authority held that an ITC which has lapsed due to limitation under Section 16(4) becomes 'dead' and there is no provision to convert such lapsed/unavailed ITC into a refund under Section 54. Consequently, the argument that refund should be granted because AAAR subsequently allowed eligibility was rejected. [Paras 10]

ITC not availed within the time prescribed by Section 16(4) is not refundable under Section 54; the appellant's contention to the contrary is rejected.

Final Conclusion: The appeal is dismissed and the refund claim for unutilized input tax credit related to cash carry vans for the period 2018-2019 is rejected: the out-of-jurisdiction AAAR order cannot be relied upon in Rajasthan, the claim does not fall within the refund categories under Section 54, and ITC lapsed under Section 16(4) is not refundable.

Deduction under Section 36(1)(viia) for provision for bad and doubtful debts - entitlement to deduction on making provision in books irrespective of nomenclature - CBDT circulars having force of law for uniform administration of Income tax provisions - application of RBI income recognition and asset classification norms in banking accounts - precedential effect of coordinate bench decisions on identical facts

Deduction under Section 36(1)(viia) for provision for bad and doubtful debts - entitlement to deduction on making provision in books irrespective of nomenclature - application of RBI income recognition and asset classification norms in banking accounts - precedential effect of coordinate bench decisions on identical facts - CBDT circulars having force of law for uniform administration of Income tax provisions - Allowability of the assessee's claim of Rs. 24,01,00,000 as deduction under Section 36(1)(viia) for provision for bad and doubtful debts for Assessment Year 2014-15 - HELD THAT: - The Tribunal accepted the view in the coordinate bench decisions in the assessee's own cases for earlier assessment years and the judicial authorities relied upon, holding that Section 36(1)(viia) grants a distinct and independent deduction for provisions made in respect of rural advances and that such deduction is available where the bank is legally entitled and has made provision in the books. The assessee had admitted its entitlement to the statutory calculation of deduction and had made provisions in its accounts consistent with RBI prudential norms. The Tribunal noted that the nomenclature used in the books (for example, 'Reserve for NPA' or 'Provision for NPA') does not defeat the claim if in substance the provision is for bad and doubtful debts, and that CBDT circulars and the precedents construe and guide uniform application of the statutory scheme. As no distinguishing facts were shown for AY 2014-15 and both parties agreed the issue was covered by the coordinate bench orders, the Tribunal declined to depart from those decisions and affirmed the CIT(A)'s direction to allow the claimed deduction.

The claimed deduction of Rs. 24,01,00,000 under Section 36(1)(viia) is allowable; the AO is directed to allow the full deduction and the appeal of the Revenue is dismissed.

Final Conclusion: The Tribunal, following coordinate bench decisions and relevant precedents and noting the assessee's admitted entitlement and provisions in the books (in line with RBI norms), dismissed the Revenue's appeal and upheld the CIT(A)'s order directing allowance of the full deduction under Section 36(1)(viia) for AY 2014-15.

Deeming fiction in Section 45(3) - amount recorded in books treated as full value of consideration - deemed sale consideration under Section 50C - stamp duty/ready reckoner value - capital contribution by a partner - chargeability of capital gains on contribution of capital asset - generalia specialibus non derogant (special provision prevails over general provision)

Deeming fiction in Section 45(3) - amount recorded in books treated as full value of consideration - deemed sale consideration under Section 50C - stamp duty/ready reckoner value - capital contribution by a partner - Applicability of Section 50C to transfers of land made by a partner as capital contribution where Section 45(3) deems the amount recorded in the books of the firm to be the full value of consideration. - HELD THAT: - The Tribunal held that Section 45(3) specifically comprises both a charging limb and a deeming fiction which for the purpose of section 48 treats the amount recorded in the books of the firm as the full value of consideration for a partner's contribution of a capital asset. Allowing Section 50C to be transposed into Section 45(3) would render the statutory deeming in Section 45(3) otiose and would jeopardise the chargeability and quantification mechanism created by Section 45(3). The insertion of Section 45(3) was intended to tax transactions that earlier went untaxed by deeming a notional book value as consideration, and that legislative purpose would be frustrated if the general deeming under Section 50C (adopting stamp duty/ready reckoner value) were to supplant the specific deeming under Section 45(3). The Tribunal applied the rule that a special provision prevails over a general provision and followed coordinate-bench decisions to the same effect. On that basis the Tribunal agreed with and upheld the CIT(A)'s view that Section 50C does not apply to the transfers governed by Section 45(3), and that the assessing officer was not justified in substituting ready-reckoner value for the amount recorded in the books. [Paras 3]

Tribunal dismissed Revenue's challenge and upheld the CIT(A)'s vacating of the Section 50C-based addition; Section 50C is not applicable to transfers covered by Section 45(3).

Final Conclusion: Appeal dismissed - the Tribunal upheld the CIT(A)'s order vacating the addition computed under Section 50C for the partner's capital contribution, holding that the specific deeming under Section 45(3) governs the computation of full value of consideration and Section 50C cannot be transposed to override it.

Exemption under section 11 - application of income by donor trust by payments to other charitable/NGO bodies registered u/s 12A - disallowance under section 13 for excessive remuneration - nexus between expenditure and objects of the trust - requirement of basis and evidentiary foundation for disallowance

Exemption under section 11 - nexus between expenditure and objects of the trust - requirement of basis and evidentiary foundation for disallowance - Whether the Assessing Officer was justified in denying exemption under section 11 by treating the assessee's project expenditures as not in accordance with its objects and by making an addition of the surplus. - HELD THAT: - The Tribunal upheld the learned CIT(A)'s finding that the assessee, a society registered for rural development, had received grants from reputed national and international organisations and had produced project-wise details, reports, photographs and other evidence showing activities and community benefit. The CIT(A) examined the specifics of two projects relied upon by the AO, noted the project descriptions and documentary evidence produced before the AO, and held that the AO's sweeping conclusion that the expenses did not reflect charitable work and therefore denial of exemption was not sustainable. The Tribunal agreed that once a nexus between expenditure and the objects is established and documentary material is furnished, the AO cannot substitute its own view of commercial necessity or reasonableness by mere general observations; a disallowance requires an articulated basis. Applying these principles to the facts, the Tribunal confirmed deletion of the addition and restoration of exemption under section 11.

The addition of the surplus and denial of exemption under section 11 was deleted and ground No.1 of the Revenue's appeal is dismissed.

Disallowance under section 13 for excessive remuneration - requirement of basis and evidentiary foundation for disallowance - Whether the Assessing Officer was justified in disallowing portions of salaries/payments as excessive under section 13. - HELD THAT: - The CIT(A) found, and the Tribunal concurred, that the AO had made only general assertions of excessiveness without stating any comparative market basis or specific findings that services rendered were not commensurate with remuneration. Detailed job descriptions, remuneration history and terms of service were placed on record showing roles, experience and commercially fixated scales; payments to consultants were for specific tasks and supported by terms. The Tribunal reiterated that excessiveness must be shown with reference to market value or commercial considerations and cannot rest on general comments. In absence of such basis the AO's disallowance was unsustainable.

The additions on account of alleged excessive salary/payments were deleted and ground No.2 of the Revenue's appeal is dismissed.

Application of income by donor trust by payments to other charitable/NGO bodies registered u/s 12A - exemption under section 11 - Whether amounts paid to partner NGOs (registered u/s 12A) out of grants by the assessee constitute application of income for charitable purposes in the hands of the assessee. - HELD THAT: - The CIT(A) relied on settled judicial precedent and administrative instruction holding that where a donor trust disburses funds to another entity carrying out similar objects and registered for exemption, such disbursement is an application of income for purposes of sections 11 and 12. The assessee had shown that partner NGOs were registered and that payments were for project implementation; the AO's contrary approach was therefore contrary to the law. The Tribunal affirmed the CIT(A)'s reliance on precedents and instruction and held that the disallowance of the amounts paid to partner NGOs was unsustainable.

The addition made on account of payments to partner NGOs was deleted and ground No.3 of the Revenue's appeal is dismissed.

Final Conclusion: All grounds in the Revenue's appeal against the CIT(A) order for assessment year 2014- 2015 were dismissed; the Tribunal confirmed deletion of the additions and retention of exemption/applications of income as held by the CIT(A).

Applicability of the first proviso to section 12A(2) - Retrospective operation of registration granted under section 12AA - Entitlement to exemption under sections 11 and 12 for assessment years pending on the date of registration - Prohibition on initiating proceedings under section 147 for earlier years solely for non-registration - Treatment of proceedings pending before the appellate authority as proceedings pending before the Assessing Officer

Applicability of the first proviso to section 12A(2) - Retrospective operation of registration granted under section 12AA - Entitlement to exemption under sections 11 and 12 for assessment years pending on the date of registration - Treatment of proceedings pending before the appellate authority as proceedings pending before the Assessing Officer - Whether registration granted under section 12AA during the pendency of appeal attracts the first proviso to section 12A(2) so as to make sections 11 and 12 applicable to earlier assessment years for which assessment proceedings were pending, thereby entitling the assessee to exemption for A.Y. 2008-09 and A.Y. 2011-12. - HELD THAT: - The Tribunal held that the first proviso to section 12A(2), introduced by Finance (No.2) Act, 2014, is to be given retrospective effect to avoid causing hardship to genuine charitable trusts which otherwise fulfil substantive conditions of sections 11 to 13. The explanatory note attached to the amendment confirms the legislative intent to extend the benefit to earlier years for which proceedings are pending. Applying a purposive interpretation, the Tribunal reasoned that assessment proceedings pending before the appellate authority are a continuation of original proceedings and should be treated as 'assessment proceedings pending before the Assessing Officer' within the meaning of the proviso. Consequently, registration under section 12AA granted while the appeal was pending attracts the proviso, making sections 11 and 12 applicable to the earlier assessment years for which proceedings were pending, unless registration had been refused or cancelled. On these grounds the Tribunal concluded that the assessing officer and the CIT(A) erred in treating the corpus donation as taxable income for the years in issue and directed that the benefit of sections 11 and 12 be granted for A.Y. 2008-09 and, by similar reasoning, for A.Y. 2011-12. [Paras 9, 10, 11, 12, 13]

Registration under section 12AA granted while appeal was pending attracts the first proviso to section 12A(2) with retrospective effect; the assessee is entitled to exemption under sections 11 and 12 for the assessment years in question and the corpus donation is not taxable for those years.

Final Conclusion: Both appeals are allowed: the Tribunal set aside the assessing officer's and CIT(A)'s view, directed grant of benefit of sections 11 and 12 for A.Y. 2008-09 and A.Y. 2011-12 in view of registration under section 12AA granted during the pendency of appeal, and held that the corpus donation shall not be assessed as income for those years.

Taxability of income in hands of the owner of funds - joint account holder versus nominee - assessability of interest - income must be assessed in the hands of the right person - reopening of assessment and limitation period - prospective effect of statutory amendment

Taxability of income in hands of the owner of funds - joint account holder versus nominee - assessability of interest - income must be assessed in the hands of the right person - Whether 50% of the interest income arising on the foreign bank account could be assessed in the hands of the assessee who was a joint account holder while the deposits were owned by her mother. - HELD THAT: - The Tribunal held that where the deposits in the foreign bank account are owned by the assessee's mother, the interest arising thereon must, as a corollary, be assessed in the hands of the owner of those funds. The decision emphasises the established principle that income must be assessed in the hands of the right person alone and cannot be divorced from the source/ownership of the income-producing asset. Although the assessee exercised operational rights as a joint account holder (including possession of a travel cash card and withdrawals), that factual position did not justify taxing any part of the interest income in the hands of a person other than the owner of the deposits. The Tribunal referred to the legislative scheme (including provisions addressing clubbing and revocable transfers) to underscore that diversion of income without transfer of the asset is addressed by specific provisions and cannot be achieved by assessing a non-owner where the owner is otherwise identified. On this basis the Tribunal vacated the addition of 50% of the interest income in the assessee's hands for the years in issue and allowed the appeals on merits. [Paras 9, 11, 12, 14]

Addition of 50% of the interest income assessed in the assessee's hands is vacated; appeals allowed on merits for A.Y. 2005-06 to 2013-14 on this issue.

Reopening of assessment and limitation period - prospective effect of statutory amendment - Validity of reopening the assessments (under sections dealing with reassessment/limitation) insofar as it was advanced as a ground of appeal. - HELD THAT: - The Tribunal expressly declined to decide the contentions raised by the assessee challenging the validity and limitation for reopening the assessments (including arguments based on the amendment extending limitation) after allowing the appeal on merits. The Tribunal left those grounds open and refrained from adjudicating them, noting that having allowed the appeal on the substantive issue it was unnecessary to decide the reopening point. [Paras 10]

Contentions regarding the validity of reopening the assessments and related limitation issues are left open for adjudication and have not been decided.

Final Conclusion: The Tribunal allowed the appeals for A.Y. 2005-06 to 2013-14 by vacating the addition of 50% of the interest income assessed in the assessee's hands, holding that interest arising on deposits owned by the assessee's mother must be taxed in the hands of the owner; challenges to the validity and limitation of the reopening of assessment were left open.

Mistake apparent on record - rectification under sub-section (2) of Section 254 - disallowance under section 36(1)(iii) - verification of source of capital advances by the assessing officer - chart of internal funds versus borrowed funds as extract of submissions - review versus rectification

Mistake apparent on record - rectification under sub-section (2) of Section 254 - review versus rectification - The application under sub-section (2) of Section 254 seeking rectification of the Tribunal's order on the ground of a mistake apparent from record. - HELD THAT: - The Tribunal had set aside the issue relating to disallowance of interest under section 36(1)(iii) to the file of the Assessing Officer for verification whether the assessee had sufficient interest free (self owned) funds at the relevant time. The assessee relied upon a 'Chart' reproduced in the DRP's order as establishing availability of such funds. The Tribunal, however, treated that Chart as an extract of the assessee's submission rather than a fact recorded by the DRP and concluded that the factual claims required verification in context of the relevant point of time. The present application, in substance, sought review of the Tribunal's exercise of discretion to remit for verification and to re adjudicate the claim instead of remanding. The Tribunal's conclusion that the requisite facts could not be gathered from the record and required factual verification was a tenable finding of fact and not a patent clerical mistake amenable to rectification under Section 254(2). Accordingly the application was a disguised review and beyond the scope of a rectification petition and was therefore liable to be dismissed. [Paras 5, 6]

Application under Section 254(2) dismissed - no mistake apparent from record warranting rectification.

Disallowance under section 36(1)(iii) - verification of source of capital advances by the assessing officer - chart of internal funds versus borrowed funds as extract of submissions - Whether the Tribunal was justified in setting aside the issue to the Assessing Officer to verify availability of interest free funds as source for capital advances/investments. - HELD THAT: - After considering the lower authorities' records and the DRP's order, the Tribunal concluded that the question whether capital advances/investments were sourced from self owned funds could not be resolved on the materials before it without further factual verification. The Chart reproduced in the DRP order was an extract of the assessee's submissions and not an independent finding of fact by the DRP; the assertions in that Chart therefore required verification with regard to timing and sufficiency of funds. Given the factual nature of the inquiry, the Tribunal's decision to remit the matter to the Assessing Officer with directions to verify availability of interest free funds was appropriate and within its remit. [Paras 5]

Tribunal's order to remit the issue to the Assessing Officer for verification upheld as proper.

Final Conclusion: The application for rectification under Section 254(2) is dismissed; the Tribunal's decision to set aside the issue to the Assessing Officer for verification of availability of interest free funds (in relation to the disallowance under section 36(1)(iii)) is upheld and the matter remains to be verified by the Assessing Officer as directed.

Reason to believe - income escaping assessment - initiation of reassessment under Section 147/148 - reopening of assessment - change of opinion - audit objection as information - four-year limitation under proviso to Section 147

Reason to believe - income escaping assessment - reopening of assessment - audit objection as information - change of opinion - Validity of the notice issued under Section 148 and the order disposing objections - whether the Assessing Officer had 'reason to believe' that income chargeable to tax had escaped assessment and whether the reopening amounted to impermissible change of opinion or mere verbatim reliance on audit objections. - HELD THAT: - The Court examined the reasons recorded (quoted at length in the order) and the disposal of objections. The reopening was initiated within four years so the proviso to Section 147 did not apply and the statutory test is whether the Assessing Officer had a 'reason to believe' that income had escaped assessment. The reasons recorded identify (a) information from records about treatment of SEZ units under Section 115JB(6) and Section 10AA, (b) an independent finding that expenses and revenue of nine SEZ units were not given similar treatment, and (c) the consequence that adding back those items would increase income chargeable to tax. The Court found these three components present in the reasons furnished and held that the Assessing Officer formed an independent opinion based on information (including audit observations treated as information) rather than merely reviewing or revising the earlier assessment. The Court reviewed the authorities on change of opinion and on audit objections being a source of information, and concluded that where the assessing authority records factual information and forms a reasoned view that income has escaped assessment, reopening is permissible. The High Court emphasised that sufficiency of reasons and merits of the claim are to be tested by the assessing authority in reassessment proceedings and not by a writ court except where a jurisdictional error is shown. The petitioner's assertions that the reasons were verbatim audit objections or amounted to mere change of opinion were held to be unsubstantiated on the material placed before the Court, and the objections were found to have been considered and rejected in the order disposing of objections. [Paras 25, 26, 31, 32, 33]

The notice under Section 148 and the order disposing of objections are valid; the Assessing Officer had 'reason to believe' that income had escaped assessment and the reopening may continue.

Final Conclusion: Writ petition dismissed; reopening under Section 147/148 for AY 2011-12 held valid on the recorded reasons and reassessment proceedings are permitted to continue, with merits to be adjudicated by the assessing authority.

Deemed dividend under section 2(22)(e) - shareholder and beneficial ownership requirement - substantial interest/common shareholder - inter-corporate loan versus deemed dividend - precedential effect of High Court and Tribunal decisions

Deemed dividend under section 2(22)(e) - shareholder and beneficial ownership requirement - substantial interest/common shareholder - inter-corporate loan versus deemed dividend - Whether unsecured loans advanced by Cygnet Infotech Pvt. Ltd. to Cygnet Enterprises Pvt. Ltd. constitute deemed dividend under section 2(22)(e) where the recipient company is not a registered shareholder of the lender but there are common shareholders holding substantial interest. - HELD THAT: - The Tribunal upheld the CIT(A)'s deletion of the addition under section 2(22)(e) on the ground that the provision is intended to tax dividends in the hands of a shareholder of the lending company, and the deeming fiction extending to loans to a concern applies when the recipient concern itself is a company in which the lending company's shareholder is a member or partner or when the recipient is a shareholder of the payer. Where the recipient company is not a registered shareholder of the lender, mere existence of common shareholders with substantial interest does not, by itself, render an inter-corporate loan a deemed dividend. The Tribunal relied upon the line of authority treating Ankitec/Ankitech Pvt. Ltd. and the jurisdictional High Court decisions (including Daisy Packers and the decision in Mahavir Inducto ) as covering the present facts, concluding that the claims fall within inter-corporate deposits/loans not taxable as deemed dividend in the hands of a non shareholder recipient. Having found the facts squarely covered by these precedents and Coordinate Bench decisions, the Tribunal found no error in the CIT(A)'s conclusion and dismissed the revenue's appeal. [Paras 6, 7]

Addition of the unsecured loan treated as deemed dividend under section 2(22)(e) was deleted; revenue's appeal dismissed.

Final Conclusion: The Tribunal dismissed the revenue's appeal for A.Y. 2014-15, affirming the deletion of the addition under section 2(22)(e) on the ground that the recipient company was not a shareholder of the lending company and therefore the loan could not be taxed as deemed dividend.

Allowability of employee contributions to PF/ESI if deposited before due date of filing return - disallowance under Section 36(1)(va) read with Section 43B - processing of return under Section 143(1) - binding precedent of the jurisdictional High Court

Allowability of employee contributions to PF/ESI if deposited before due date of filing return - disallowance under Section 36(1)(va) read with Section 43B - binding precedent of the jurisdictional High Court - Whether amounts collected from employees as contribution to PF/ESI, deposited after the statutory due date but before the due date of filing the return under section 139(1), can be disallowed under Section 36(1)(va) read with Section 43B. - HELD THAT: - The Tribunal examined the audit report and found that the employees' contributions were deposited before the due date of filing the return u/s 139(1). In light of a series of decisions of the Hon'ble Rajasthan High Court, starting from CIT v. State Bank of Bikaner & Jaipur and followed by subsequent Rajasthan High Court decisions, it was held that contributions paid after the statutory due date but before filing the return cannot be disallowed under Section 43B read with Section 36(1)(va). The Tribunal noted diverging views of other High Courts relied upon by the CIT(A) but emphasised that the jurisdictional High Court's rulings are binding on the assessing authority and appellate bodies dealing with assessments within that territorial jurisdiction. Applying the binding Rajasthan High Court precedent to the facts (undisputed deposits before the return filing due date), the Tribunal concluded that the adjustment made by CPC in the processing of the return was not sustainable and directed deletion of the addition. [Paras 12, 13, 14, 15, 16]

Addition of Rs. 1,61,099/- by way of adjustment in processing the return is deleted; the contributions are allowable as deduction since deposited before the due date of filing the return.

Final Conclusion: The appeal is allowed and the disallowance made in processing the return is deleted in view of the binding decisions of the jurisdictional Rajasthan High Court; consequential relief follows.

Allowability of employees' contributions under section 36(1)(va) where deposited after statutory due date but before filing return - Interpretation of section 43B vis a vis section 36(1)(va) - Validity of adjustments made while processing returns under section 143(1)(a) - Condonation of delay under section 253(5) - Binding effect of decisions of the jurisdictional High Court on appellate authorities

Condonation of delay under section 253(5) - Condonation of delay of 24 days in filing the appeal - HELD THAT: - The Tribunal considered the assessee's averment of inability to file the appeal within time due to Covid-19 lockdown, the undisputed affidavit placed on record and the absence of specific objection from the Department. Exercising the power under section 253(5), the Tribunal found sufficient cause for delay and condoned the 24 day delay, admitting the appeal for adjudication on merits. [Paras 2, 3]

Delay of 24 days condoned and appeal admitted for adjudication.

Allowability of employees' contributions under section 36(1)(va) where deposited after statutory due date but before filing return - Interpretation of section 43B vis a vis section 36(1)(va) - Validity of adjustments made while processing returns under section 143(1)(a) - Binding effect of decisions of the jurisdictional High Court on appellate authorities - Whether contributions collected from employees towards PF/ESI, deposited after statutory due date but before filing return u/s 139(1), can be disallowed under section 43B read with section 36(1)(va) when the jurisdictional High Court has taken a contrary view - HELD THAT: - On the facts, the assessee's audit report and records showed that employee contributions were deposited prior to the due date for filing the return under section 139(1). The Tribunal examined the consistent line of decisions of the Hon'ble Rajasthan High Court (beginning with CIT v. State Bank of Bikaner & Jaipur and followed by subsequent Rajasthan High Court decisions) holding that such amounts paid after the statutory due date but before filing the return cannot be disallowed under section 43B read with section 36(1)(va). Noting divergent authority of the Gujarat High Court relied upon by the CIT(A), the Tribunal held that the jurisdictional High Court's view is binding on assessing and appellate authorities within its territorial jurisdiction. Applying those binding decisions to the present facts, the Tribunal concluded that the additions made during processing could not stand and directed deletion of the adjustments for both assessment years. The Tribunal further observed that having decided the matter on merits, the separate contention regarding the permissibility of adjustment while processing u/s 143(1)(a) became academic. [Paras 18, 19, 20, 21, 22]

Additions made by way of adjustment in respect of delayed deposit of employees' contributions (though paid before the due date for filing return u/s 139(1)) are deleted; appeals allowed on merits.

Final Conclusion: The Tribunal condoned the delay in filing the appeal and, following binding decisions of the jurisdictional Hon'ble Rajasthan High Court, held that employee contributions to PF/ESI paid after the statutory due date but before filing the return under section 139(1) are not disallowable under section 43B read with section 36(1)(va); the additions for A.Y. 2018 19 and 2019 20 were deleted and both appeals allowed.

Unexplained cash deposits - bank account withdrawals available for redeposit - explanation by agricultural income and sale of livestock - burden on revenue to show cash withdrawn was spent elsewhere - cash flow statement as evidence to explain bank deposits

Unexplained cash deposits - bank account withdrawals available for redeposit - burden on revenue to show cash withdrawn was spent elsewhere - cash flow statement as evidence to explain bank deposits - explanation by agricultural income and sale of livestock - Deletion of addition of Rs. 16,28,004 made as unexplained deposits in the assessee's bank account - HELD THAT: - The Tribunal found that a substantial portion of the cash deposits had been accepted by the CIT(A) as explained (sale of land, sale of livestock, opening cash, part agricultural income and one deposit arising from a prior withdrawal). The assessee produced a date wise cash flow showing withdrawals from the same bank account during the year, including a cash withdrawal of Rs. 15,50,000 on 22.05.2008 which preceded a deposit on 13.06.2008. The Revenue failed to produce evidence that the cash so withdrawn had been spent elsewhere. In these circumstances the benefit of the withdrawn cash being available for redeposit had to be allowed. Further, the Tribunal held that the remaining portion of agricultural income (Rs. 2,50,000) claimed by the assessee could not be treated as unexplained in the absence of corroborative evidence that it was bogus or inflated, given the assessee's ownership of agricultural land and livestock. Applying these conclusions, the Tribunal treated the residual balance as personal savings out of agricultural income and sale proceeds and held that the entire impugned addition of Rs. 16,28,004 stood explained and was not sustainable. [Paras 8, 9, 10, 11]

The addition of Rs. 16,28,004 as unexplained deposits is deleted.

Final Conclusion: The appeal is allowed and the addition of Rs. 16,28,004 confirmed by the CIT(A) for A.Y. 2009-10 is deleted.

Applicability of Section 194IA on a transferee-wise basis - Threshold exemption under Section 194IA where consideration per transferee is less than Rs.50,00,000 - Assessee in default under Section 201 for non-deduction of TDS

Applicability of Section 194IA on a transferee-wise basis - Threshold exemption under Section 194IA where consideration per transferee is less than Rs.50,00,000 - Whether the obligation to deduct TDS under Section 194IA arises with reference to the total consideration in the sale deed or with reference to the consideration payable by each transferee where the property is acquired jointly. - HELD THAT: - The Tribunal held that Section 194IA is to be read transferee-wise: the threshold exception in sub section (2) applies with reference to the amount payable by each transferee and not with reference to the aggregate value stated in the sale deed. The reasoning follows a harmonious reading of sub sections (1) and (2) and earlier coordinate Bench decisions, including Smt. Sandhya Gugalia and Vinod Soni , which treated each purchaser as a separate income tax entity and applied the Rs.50,00,000 threshold to the consideration attributable to each transferee. Where the assessee's actual share paid was Rs.31,50,000 (i.e., below Rs.50,00,000), Section 194IA did not require deduction of TDS from that transferee's payment. [Paras 6, 7]

Section 194IA does not apply where the consideration payable by the individual transferee is less than Rs.50,00,000; the provision is to be applied transferee-wise.

Assessee in default under Section 201 for non-deduction of TDS - Consequential deletion of demand under Section 201(1)/201(IA) - Whether the assessee can be held an assessee in default and made liable to demand under Section 201(1)/201(IA) for non-deduction of TDS where the assessee's share in the purchase consideration was below the statutory threshold. - HELD THAT: - Applying the conclusion that Section 194IA was not attracted transferee-wise, the Tribunal found no basis to treat the assessee as an assessee in default for non deduction of TDS on the amount actually paid by the assessee. The Assessing Officer's demand for tax and consequential additions under Section 201(1)/201(IA) in respect of the assessee's share were therefore unsustainable and were set aside. The decision in the lead appeal was applied identically to the co ordinate appeal with identical facts. [Paras 9, 11]

Demand under Sections 201(1) and 201(IA) arising from alleged non deduction of TDS on the assessee's share is deleted where the assessee's consideration per transferee is below Rs.50,00,000.

Final Conclusion: Both appeals are allowed: Section 194IA is not attracted where the consideration payable by an individual transferee is less than Rs.50,00,000 and, consequently, the demands raised under Sections 201(1) and 201(IA) in respect of the assessees' respective shares are set aside.

Agricultural income versus income from other sources - burden of proof for claim of exemption - adverse inference for non-production of best evidence - estoppel and application of prior year tribunal finding - estimation of income on preponderance of probabilities

Agricultural income versus income from other sources - burden of proof for claim of exemption - adverse inference for non-production of best evidence - Undertaking of agricultural activity during the year and whether agricultural income was proved - HELD THAT: - The Tribunal examined whether the assessee had proved agricultural activity for the year under consideration. While the assessee relied on the Tribunal's earlier favourable findings for the immediately preceding year and asserted continuity of facts and books, he failed to produce the khasra nakal for the year in question, books of account and expense vouchers for agricultural activity. The Bench found that production of sale bills was of limited relevance where buyer particulars were not given, but non-production of the khasra nakal and books of account entitled the Tribunal to draw an adverse inference. The Tribunal accepted that prior-year findings are relevant only if the facts and circumstances remain the same; here material differences were identified (absence of khasra nakal for the year, no purchase of Musli in the year, and discrepancies in profit/price ratios). On balance, the undertaking of agricultural activity could not be fully established on the evidence produced, but the sale of agricultural produce attributable to opening/standing crops was inferable on the preponderance of probabilities, aided by confirmed prior-year records and the P&L accounts. [Paras 3, 4]

Agricultural activity for the year was not fully proved by production of contemporaneous primary records; an adverse inference arose from non-production, but sale realizations attributable to opening standing crops were inferable.

Estimation of income on preponderance of probabilities - agricultural income versus income from other sources - Extent of agricultural income/exemption to be allowed for the year - HELD THAT: - Having accepted that sale of agricultural produce could be inferred from opening stock and the P&L accounts, the Tribunal estimated the extent of agricultural income on the basis of disclosed profit ratios and account figures. Using the opening stock and reported sale for the principal crop (Safed Musli) and applying the disclosed profit rate, the Tribunal computed agricultural sale realizations and imputed reasonable agricultural expenditure (including an inferred expenditure on standing crops). On this basis the Tribunal concluded that agricultural income to the extent of the computed amount was properly exempt under the statute, while the balance of the amount returned as agricultural income, not supported by evidence, remained taxable as income from other sources. The Tribunal applied the principle that estimation on preponderance of probabilities is permissible where direct evidence is lacking, but cautioned that book figures cannot be accepted beyond the material on record. [Paras 3, 4]

Exemption under the agricultural income head allowed to the extent of the estimated agricultural income; the remaining amount returned as agricultural income is assessable as income from other sources.

Final Conclusion: The appeal is partly allowed. The Tribunal accepted agricultural income to the extent computed on the basis of opening stock, reported sales and disclosed profit ratio, and allowed exemption accordingly; the balance of the amount claimed as agricultural income is to be assessed as income from other sources.

Registration under section 12AA - scope of inquiry at registration stage limited to objects and genuineness - principles of natural justice and validity of ex parte orders - genuineness of trust activities as distinct from application of income - requirement for registration as pre requisite for claiming exemption

Principles of natural justice and validity of ex parte orders - registration under section 12AA - Whether the CIT(E) lawfully rejected the appellant's application for registration by passing a non speaking ex parte order during the COVID 19 period and related disruptions. - HELD THAT: - The Tribunal found that the CIT(E) rejected the application by an ex parte, non speaking order without adequately appreciating the genuine difficulties and circumstances beyond the assessee's control (closure in Kashmir from August 2019 and COVID 19 lockdown) which prevented appearance and physical submission. In view of principles of natural justice and the factual impediments to participation in the proceedings, the ex parte rejection was arbitrary and unsustainable. Because the matter was before the Tribunal for a second round, the Tribunal treated the case on merits rather than upholding the procedural ex parte order. [Paras 8, 10]

The ex parte rejection by the CIT(E) was unsustainable for want of natural justice and proper consideration of the assessee's inability to appear.

Scope of inquiry at registration stage limited to objects and genuineness - genuineness of trust activities as distinct from application of income - What is the permissible scope of the Commissioner's enquiry when deciding an application for registration under section 12AA? - HELD THAT: - The Tribunal reiterated settled precedents that at the registration stage the Commissioner's inquiry is limited to whether the application and annexed documents comply with the procedural requirements and whether the objects of the trust are charitable and the activities genuine (not a camouflage). It is inappropriate at this preliminary stage to undertake deep investigation into application of income or to adjudicate taxability under sections 11, 12 or the operation of section 13; such matters are open to later scrutiny by the Assessing Officer. Thus the Commissioner should confine himself to verifying genuineness of objects and documents submitted and need not probe into detailed application of income at the registration stage. [Paras 11, 12, 14, 16]

The Commissioner's enquiry under section 12AA is confined to testing the genuineness of objects and activities; deeper scrutiny of application of income or taxability is not permissible at the registration stage.

Registration under section 12AA - requirement for registration as pre requisite for claiming exemption - Whether, on the material submitted and in view of the limited scope of enquiry, the appellant trust should be registered under section 12AA. - HELD THAT: - The Tribunal recorded that the trust deed and the documents on record transparently showed that the trust was created to impart education and that the appellant had furnished the papers and replies called for. Given that the CIT(E) erred in rejecting the application ex parte and that the preliminary requirements and genuineness of objects were satisfied on the material produced, the Tribunal held the impugned order to be unsustainable. The Tribunal therefore directed the CIT(E) to grant registration forthwith, observing that registration under section 12AA is a prerequisite to claim exemption under section 11 but does not itself decide entitlement to exemption which remains subject to subsequent scrutiny. [Paras 9, 11, 17]

Registration under section 12AA was to be granted to the appellant; the CIT(E)'s order was set aside and registration was directed to be issued promptly.

Final Conclusion: The Tribunal set aside the CIT(E)'s ex parte, non speaking rejection of the application for registration under section 12AA, held that the Commissioner's enquiry at the registration stage is limited to the genuineness of objects and activities (not application of income), and directed immediate grant of registration to the appellant trust.

Section 68 of the Income Tax Act - identity, genuineness and creditworthiness - share application money - burden of proof on the assessee - notices under section 133(6) and summons under section 131 - adverse inference for non-appearance to summons - reliance on statement recorded under section 132(4)

Section 68 of the Income Tax Act - identity, genuineness and creditworthiness - share application money - burden of proof on the assessee - Deletion of addition made under section 68 of the Act in respect of share application money of Rs. 4 crores. - HELD THAT: - The Tribunal accepted that the assessee discharged the initial onus under section 68 by producing documents establishing the identity of the investor companies, the genuineness of the transactions (share application forms, board resolutions, bank statements, confirmations) and the creditworthiness of the investors (audited balance sheets and returns). The AO had issued notices under section 133(6) and summons under section 131 to the investor companies, and those companies responded to the AO by filing the required information and documents. The AO nevertheless treated the receipts as unexplained relying on a statement recorded under section 132(4) during search proceedings and on the non-appearance in person of the investor companies' directors before the AO. The Tribunal held that mere non-appearance of the investors in person does not automatically permit drawing an adverse inference against the assessee where documentary proof has been furnished and the AO did not take statutory steps against the non-appearing parties; further, reliance on a departmental witness's statement without affording opportunity for cross-examination was improper. On these facts the Tribunal found no material to displace the documentary evidence and sustained the deletion of the addition made under section 68. [Paras 3]

The deletion of the addition under section 68 was affirmed; the assessee had discharged the onus and the AO's reliance on the statement under section 132(4) and on non-appearance did not justify the addition.

Final Conclusion: The revenue appeal is dismissed and the order of the CIT(A) deleting the addition under section 68 in respect of the share application money for A.Y.2012-13 is confirmed.

Classification of betel nut products as areca/betel nuts under Chapter 8 (heading 0802) - betel nut products known as supari under Chapter 21 and supplementary note 2 to Chapter 21 - HSN/Explanatory Notes on treatment and processing of fruits and nuts - principle that mere processing which does not alter the original character is not manufacture (Crane Betel Nut principle) - proviso (b) to sub section 2 of section 28 I (bar on advance ruling where matter already decided by Tribunal or Court)

Proviso (b) to sub section 2 of section 28 I (bar on advance ruling where matter already decided by Tribunal or Court) - classification of boiled supari - No advance ruling issued in respect of boiled supari because the question of its classification has already been decided by the Appellate Tribunal/Court. - HELD THAT: - The Chennai Bench of the CESTAT has held boiled supari classifiable under sub heading 08028010. Clause proviso (b) to sub section 2 of section 28 I prohibits entertaining an advance ruling on a matter already decided by the Appellate Tribunal or any Court. Applying that statutory bar, the Authority refrained from issuing any ruling on boiled supari despite its consideration of the products, and therefore did not decide classification on merits for boiled supari in these applications. [Paras 6, 8]

Advance ruling is not given for boiled supari as the matter stands decided by the Appellate Tribunal/Court.

Classification of betel nut products as areca/betel nuts under Chapter 8 (heading 0802) - betel nut products known as supari under Chapter 21 and supplementary note 2 to Chapter 21 - HSN/Explanatory Notes on treatment and processing of fruits and nuts - principle that mere processing which does not alter the original character is not manufacture (Crane Betel Nut principle) - API supari, chikni supari, unflavoured supari and flavoured supari are classifiable under heading 0802 (Chapter 8) and not under sub heading 21069030 of Chapter 21. - HELD THAT: - Examination of the processes (cleaning, destoning, cutting/slicing, drying, roasting/boiling, polishing, sterilisation, flavouring with small quantities of spices/perfumes, mixing of food starch) shows they are cleaning, grading or modest processing operations that do not change the essential character of the areca/betel nut. The HSN/explanatory notes permit that fruits and nuts may be sliced, chopped, roasted or boiled and that small additions (sugar, oil, glucose syrup) do not alter classification within Chapter 8. The Supreme Court's ratio in Crane Betel Nut - that mere reduction in size or addition of flavouring/sweetening which leaves the betel nut retaining its original character does not amount to manufacture of a new commodity - applies and was followed. In light of these chapter notes, HSN guidance and binding precedents, the Authority concluded that the subject products remain areca/betel nuts classifiable under heading 0802 rather than preparations under Chapter 21. [Paras 7, 8]

API supari, chikni supari, unflavoured supari and flavoured supari are correctly classifiable under heading 0802 of the First Schedule to the Customs Tariff Act, 1975; they are not classifiable under sub heading 21069030.

Final Conclusion: The Authority refrained from ruling on boiled supari because the issue is already decided by the Appellate Tribunal/Court; for API supari, chikni supari, unflavoured supari and flavoured supari the correct classification is under heading 0802 (Chapter 8) and not under sub heading 21069030 (Chapter 21).

Preventive detention - subjective satisfaction of the detaining authority - predetermination / identity of intellectual apparatus (bias) - non-supply of relevant documents affecting effective representation under Article 22(5) - inordinate and unexplained delay breaking the live-link - non-application of mind - reliance on retracted statements and failure to place retractions - delay by the Central Government in deciding representation

Predetermination / identity of intellectual apparatus (bias) - subjective satisfaction of the detaining authority - Detaining Authority acted with bias by having been actively involved in the investigation prior to passing the detention order, vitiating its subjective satisfaction. - HELD THAT: - The Court found that the officer who passed the detention order had earlier authored communications and coordinated the investigation (notably a letter dated 02.09.2019), demonstrating prior involvement. Applying the 'identity of intellectual apparatus' test, the same person having dealt with the matter earlier in another capacity meant the detaining function was not independent; such pre-determination defeats the purpose of a 'specially empowered' officer under Section 3(1) and vitiates subjective satisfaction. [Paras 36, 41, 42, 43, 44]

Detaining Authority's subjective satisfaction is vitiated for bias; detention order cannot stand on this ground.

Non-supply of relevant documents affecting effective representation under Article 22(5) - preventive detention - Failure to supply legible and relevant documents requested by the detenu deprived him of the right to make an effective representation and vitiated the detention order. - HELD THAT: - The Court reiterated that a detenu must be supplied copies of all relevant documents considered in forming subjective satisfaction. The detenu had requested legible copies (passport, identity cards of co-detenus, WhatsApp chats, bill of entry, invoice, statement of Rohit Sharma, etc.) which were refused, thereby denying the constitutional entitlement to effective representation. Precedents were applied to hold non-supply fatal to the detention. [Paras 46, 47, 48, 49, 50]

Non-supply of legible and material documents vitiates the detention order.

Inordinate and unexplained delay breaking the live-link - preventive detention - There was substantial, unexplained delay in passing the detention order which snapped the requisite proximate link between alleged prejudicial activities and the need for detention. - HELD THAT: - The Court examined the chronology, noting lengthy intervals between the incident/arrest and the detention proposal. The respondents' post-execution claim of overseas evidence received in November 2019 was not reflected in the detention order or relied upon before the detaining authority. In absence of a satisfactory contemporaneous explanation, the delay was held to be inordinate, severing causal nexus and justifying quashing. [Paras 56, 58, 60, 61, 62]

Detention order set aside for inordinate and unexplained delay that broke the live-link.

Non-application of mind - reliance on retracted statements and failure to place retractions - Detaining Authority failed to apply mind by not considering vital material, including retractions of statements relied upon, thus vitiating its subjective satisfaction. - HELD THAT: - The grounds heavily relied on statements under the Customs Act which had been retracted by the detenu and co-accused. The sponsoring authority did not place those retractions before the detaining authority, nor did the detainer examine admissibility and the impact of retractions. Jurisprudence requires that if inculpatory statements of others are placed, their retractions must also be placed; omission prejudices formation of genuine subjective satisfaction. [Paras 80, 81, 82, 83, 84]

Detention order vitiated for non-application of mind in failing to consider vital material and retractions.

Subjective satisfaction of the detaining authority - preventive detention - Detaining Authority did not properly assess the detenu's propensity to continue indulging in prejudicial activities; relevant facts showing lack of propensity were not considered. - HELD THAT: - The Court noted omission of material facts: release of the detenu's passport and his choice not to travel abroad after bail (indicative of bona fides), placement of IMNPL on Denied Entity List (eliminating ability to misuse scheme), suspension of a crucial appraiser, and CESTAT order for provisional release of goods. These unplaced/ignored facts were germane to propensity assessment and their omission undermined the detaining authority's conclusion. [Paras 86, 87, 88, 89, 90]

Detention order unsustainable for failure to consider material facts negating propensity to re-offend.

Delay by the Central Government in deciding representation - effective representation under Article 22(5) - Central Government unduly delayed in deciding the detenu's statutory representation, which was fatal to continued detention. - HELD THAT: - The detenu filed representation on 27.10.2020; the matter was referred to the Advisory Board on 10.11.2020 and decision communicated only in late December 2020. The Court applied settled principles that representations must be considered with expedition and classified categories for reference to Advisory Board; an unexplained 57-day delay by the appropriate Government in this context was held inordinate and prejudicial. [Paras 92, 93, 94, 95, 96]

Central Government's delay in deciding the representation vitiates the detention.

Non-application of mind - preventive detention - Grounds of detention were materially identical to those used in an entirely different case, demonstrating a mechanical 'copy-paste' exercise and non-application of mind. - HELD THAT: - A side-by-side comparison with another detention order passed by the same detaining authority revealed that the grounds, save for names and incidental references, were effectively identical. The Court treated this as conclusive evidence of mechanical drafting and lack of independent consideration, which is a further instance of non-application of mind undermining subjective satisfaction. [Paras 97, 98, 99]

Detention order invalidated for being mechanically lifted from a distinct case, reflecting non-application of mind.

Final Conclusion: For multiple independent reasons - bias/predetermination of the detaining authority, non-supply of vital documents denying effective representation, inordinate unexplained delay breaking the live-link, non-application of mind (including reliance on retracted statements and grounds copied from another order), failure to assess propensity, and delay by the Central Government in deciding representation - the detention order dated 21.01.2020 is set aside; the detenu is directed to be released forthwith unless required in connection with any other case.

Confiscation under Section 111(d) of the Customs Act, 1962 - mandatory BIS compliance under the BIS Kitchen Appliances (Quality Control) Order, 2018 - distinction between handheld blender and handheld mixer for applicability of mandatory standard - inadmissibility of belated factual/technical opinion not placed on record before adjudication - release of goods on payment of appropriate customs duty where mandatory standard not attracted

Mandatory BIS compliance under the BIS Kitchen Appliances (Quality Control) Order, 2018 - distinction between handheld blender and handheld mixer for applicability of mandatory standard - Imported goods declared as Hand Mixer are not liable to mandatory BIS compliance under the BIS Kitchen Appliances (Quality Control) Order, 2018, because they are distinct from Handheld Blenders. - HELD THAT: - The Tribunal examined the specifications and operative provisions of IS 302 Part 2 Section 14 as reflected in the BIS Quality Control Order and the materials on record, and found that Handheld Blenders and Handheld Mixers are separate products with different specifications, mechanisms, performance parameters and intended tasks. The departmental order did not record any finding that the imported goods were, in fact, Handheld Blenders rather than Hand Mixers as declared. In the absence of an express finding that the goods fall within the description subject to mandatory BIS certification, the conclusion that the BIS Kitchen Appliances (Quality Control) Order applied to the imported goods was unsustainable. Applying this determinative legal reasoning, the Tribunal set aside the confiscation order and directed release of the goods on payment of the appropriate customs duty already paid by the appellant. [Paras 6, 7]

Confiscation set aside; goods held not liable to mandatory BIS compliance and to be released on payment of appropriate customs duty.

Inadmissibility of belated factual/technical opinion not placed on record before adjudication - confiscation under Section 111(d) of the Customs Act, 1962 - Departmental reliance on an alleged examination/opinion by an authorised BIS officer first raised at hearing cannot sustain the adjudication where that reference and opinion were not part of the original adjudicatory record or supplied to the appellant. - HELD THAT: - The Tribunal noted that the Department asserted during argument that the product had been referred to an authorised BIS officer and that the officer had classified the apparatus as a Handheld Blender. However, no such reference or the officer's opinion was mentioned in the original order-in-original, nor was it supplied to the appellant or placed on the record before the Tribunal. A factual/technical opinion relied upon for upholding confiscation must be part of the record and disclosed to the affected party; a new ground raised for the first time at hearing cannot be used to sustain the impugned order. Consequently, the Department's belated contention was rejected. [Paras 4, 7]

Belated reliance on an unproduced BIS officer's opinion rejected; such material cannot be used to uphold confiscation.

Final Conclusion: The appeal is allowed: the confiscation order under Section 111(d) read with the BIS Quality Control Order is set aside as the imported goods are not liable to mandatory BIS compliance and a belated, unproduced BIS opinion cannot sustain the order; the Customs authorities are directed to release the goods on payment of the appropriate customs duty already paid by the appellant.

Date for determination of rate of duty under Section 15 - presentation of bill of entry (electronic) - deemed filing and self-assessment under Regulation 4(2) of the 2018 Regulations - electronic integrated declaration - supporting documents - ICEGATE technical malfunction / system glitch - time-stamping and electronic receipt of records

Date for determination of rate of duty under Section 15 - presentation of bill of entry (electronic) - deemed filing and self-assessment under Regulation 4(2) of the 2018 Regulations - ICEGATE technical malfunction / system glitch - Whether the rate of Basic Customs Duty applicable to three consignments is the rate prevailing on 05.07.2019 when the electronic integrated declarations and supporting documents were submitted on ICEGATE (but bill of entry numbers were not generated due to ICEGATE/budget activity), or the rate prevailing on 19/20.07.2019 when bill of entry numbers were subsequently generated on re-filing. - HELD THAT: - The Tribunal found on the record (as conceded by both parties and as noted by the Commissioner (Appeals)) that the importer presented the four electronic integrated declarations along with supporting documents on ICEGATE on 05.07.2019 and job codes were created, but bill of entry numbers for three consignments were not generated on that date due to a technical fault in the ICEGATE system and files not being processed after 5.00 PM because of budget activity. Regulation 2 defines a 'bill of entry' as an electronic integrated declaration accepted and assigned a unique number; Regulation 4(2) creates the deeming fiction that a bill of entry is filed and self-assessment completed when the declaration is entered on the customs automated system and a bill of entry number is generated. Section 15 fixes the rate of duty as that in force on the date a bill of entry is presented for home consumption. Applying these provisions to the proved facts, the Tribunal accepted the Commissioner (Appeals)'s finding that the non-generation of numbers was attributable to the ICEGATE malfunction and not to any omission by the importer in submitting documents. The Tribunal distinguished Chatha Rice Mills (which concerned precise timing of upload of a notification and the generation of bill of entry numbers) because the present dispute turned on non-generation caused by the customs portal's fault. Having found presentation of the complete electronic declarations on 05.07.2019, the Tribunal held that the rate of duty applicable on that date governs assessment of the three consignments and directed reassessment accordingly. [Paras 18, 19, 24, 29, 30]

The three consignments are to be assessed at the Basic Customs Duty rate applicable on 05.07.2019, and the Commissioner (Appeals) order directing reassessment on that basis is upheld.

Final Conclusion: The departmental appeal is dismissed; the order of the Commissioner (Appeals) setting aside the assessments and directing reassessment of the three Bills of Entry at the Basic Customs Duty rate prevailing on 05.07.2019 is affirmed.

Maintainability of appeal - effect of earlier appellate dismissal on subsequent remedy - limitation and computation of period for filing appeal - opportunity to explain delay - parallel remedies - remand for fresh adjudication

Maintainability of appeal - effect of earlier appellate dismissal on subsequent remedy - parallel remedies - Whether the Commissioner (Appeals) order dated 04.03.2010 which dismissed an earlier appeal as not maintainable operates to preclude the appellant from prosecuting the present appeal against the assessment. - HELD THAT: - The Tribunal examined the Commissioner (Appeals) order of 04.03.2010 and noted that the order expressly dismissed the earlier appeal as not maintainable without going into the merits of the impugned assessment. Because the earlier order did not decide the merits of valuation, no substantive issue on valuation was finally adjudicated. The appellate remedy therefore remained available to the appellant and the Commissioner's observation in the earlier order cannot be treated as a bar to the present proceedings, especially where no appeal against the 04.03.2010 order has been prosecuted to the Tribunal. The Tribunal accordingly held that the finding in the impugned order that a parallel remedy was being pursued is baseless in the factual matrix before it and will not influence the present proceeding. [Paras 4]

The Tribunal held that the earlier Commissioner (Appeals) order dated 04.03.2010 did not finally decide the merits and does not preclude the appellant from prosecuting the present appeal.

Limitation and computation of period for filing appeal - opportunity to explain delay - remand for fresh adjudication - Whether the impugned order dismissing the appeal for delay should be sustained, and whether the Commissioner (Appeals) should re-adjudicate valuation and delay after affording opportunity. - HELD THAT: - The Tribunal found that the Commissioner (Appeals) did not afford the appellant a proper opportunity to explain the delay in filing the appeal; the appellant asserted non-receipt of the Order-In-Original and that service to the CHA could not be equated with service to the appellant for computation of limitation. Given these deficiencies, the Tribunal concluded that the question of delay and the substantive valuation of the imported goods were not properly adjudicated. In consequence, the Tribunal set aside the impugned order and directed that the Commissioner (Appeals) decide both the issue of valuation and the question of delay afresh after giving the appellant a proper opportunity to be heard. [Paras 5]

The impugned order is set aside and the matter is remanded to the Commissioner (Appeals) to decide valuation and the question of delay afresh after affording the appellant an opportunity of hearing.

Final Conclusion: The appeal is allowed by way of remand: the Tribunal held that the earlier dismissal as not maintainable does not bar the present appeal and directed the Commissioner (Appeals) to re-examine valuation and delay after giving the appellant a proper opportunity to explain the delay and to be heard on merits.

Import as Baggage and its legal consequences - exclusion of Jewellery from the scope of personal effects under the New Baggage Rules, 2016 - tribunal's lack of jurisdiction over appeals relating to goods imported as Baggage under Section 129(A) of the Customs Act

Exclusion of Jewellery from the scope of personal effects under the New Baggage Rules, 2016 - classification of imported gold as Baggage rather than personal effects - The gold bars recovered from the appellants' handbags constitute goods imported as Baggage and do not fall within the definition of 'personal effects' under the New Baggage Rules, 2016. - HELD THAT: - The Tribunal applied Rule 2(iv)/(vi) of the New Baggage Rules, 2016 which defines 'personal effects' as things required for satisfying daily necessities and expressly excludes Jewellery. The gold recovered, though not formed into wearable jewellery, was not an item required for daily necessities and its predominant commercial use in jewellery-taking it outside the definition of 'personal effects'. The Tribunal relied on earlier decisions where similar imports were treated as baggage and on the statutory scheme requiring declaration of baggage contents under the Customs Act. Having found that the appellants brought the metal into India in their hand bags without the requisite declaration, the Tribunal concluded the act amounted to import as baggage and the goods were properly characterised as baggage for customs purposes. Reference was made to earlier authorities including Shri Prakash Chandra Shantilal vs. CCE, Ahmadabad , M. Ambalal & Co. and the decision of the Madras High Court in Payangadi Moidu Mohammed Ali which support the legal conclusion on classification in similar circumstances.

The gold bars are goods imported as Baggage and do not qualify as 'personal effects' under the New Baggage Rules, 2016.

Tribunal's lack of jurisdiction over appeals relating to goods imported as Baggage under Section 129(A) of the Customs Act - maintainability of appeals to the Tribunal in matters concerning Baggage - An appeal before the Tribunal is not maintainable in respect of an order that relates to goods imported as Baggage due to absence of jurisdiction under Section 129(A) of the Customs Act. - HELD THAT: - Relying on the statutory bar in Section 129(A) of the Customs Act, 1962, the Tribunal held that it has no jurisdiction to entertain appeals concerning goods imported or exported as baggage. Having determined that the imported gold constituted baggage, the Tribunal treated the Department's preliminary objection on maintainability as purely legal and dispositive. The Tribunal followed prior decisions of this and other Benches and the view taken by the Madras High Court in Payangadi Moidu Mohammed Ali , concluding that appeals in respect of baggage-related orders must be pursued before the authority competent under the statute and not before the Tribunal. Consequently, the appeal could not be adjudicated on merits by the Tribunal.

The appeal is not maintainable before the Tribunal for lack of jurisdiction under Section 129(A) in respect of goods imported as Baggage; the appeal is disposed of on that ground.

Final Conclusion: The Tribunal held that the gold recovered from the appellants' hand bags constituted goods imported as Baggage (not 'personal effects') and, as a result, dismissed the appeal on the preliminary legal objection that the Tribunal lacks jurisdiction under Section 129(A) of the Customs Act; the Registry was directed to return the appeal papers to the appellants and they were left free to approach the competent authority for appropriate remedy.

Subjective satisfaction of the Detaining Authority - predetermination / bias by identity of intellectual apparatus - inordinate delay and snapping of live-link between prejudicial activity and detention - non-placement of vital documents and non-application of mind - reliance on retracted statements and obligation to place retractions - delay in disposal of representations under Article 22(5) / statutory requirement of expedition - preventive detention vitiated by mechanical or copy-paste grounds

Predetermination / bias by identity of intellectual apparatus - subjective satisfaction of the Detaining Authority - Detaining Authority acted with pre-determination and bias by having previously participated in and monitored the investigation, vitiating its subjective satisfaction. - HELD THAT: - The Court found that the Detaining Authority (Mr. R.P. Singh) had, by his letter dated 02.09.2019, actively participated in and coordinated the investigation months prior to passing the detention orders. The test applied was whether the same person, with the same intellectual apparatus, had dealt with the matter earlier in another capacity; the Court held that such prior involvement defeats the purpose of an independently satisfied 'specially empowered' officer under Section 3(1) of COFEPOSA. Consequently, the Detaining Authority's subjective satisfaction was vitiated by pre-determination and bias. [Paras 63, 65, 66, 68, 69]

Detention orders are vitiated on the ground of bias / predetermination affecting the Detaining Authority's subjective satisfaction.

Inordinate delay and snapping of live-link between prejudicial activity and detention - There was inordinate and unexplained delay in issuing the detention orders which snapped the live and proximate link between the alleged prejudicial activity and the need for preventive detention. - HELD THAT: - The Court examined the chronology and observed that material including the Show Cause Notice dated 26.09.2019 and other evidence existed well before the detention proposal, yet the detention orders were passed only on 21.01.2020. The respondents' asserted reliance on overseas evidence allegedly received in November 2019 was not reflected in the detention orders or relied-upon documents before the Detaining Authority; therefore the claimed explanation for delay could not be accepted. Applying settled precedents, the Court held the delay unexplained and sufficient to break causal nexus required for preventive detention. [Paras 76, 77, 78, 80, 82]

Detention orders are vitiated on the ground of inordinate and unexplained delay.

Non-placement of vital documents and non-application of mind - reliance on retracted statements and obligation to place retractions - The Detaining Authority failed to consider vital documents and retractions, demonstrating non-application of mind and vitiating its subjective satisfaction. - HELD THAT: - The Court noted extensive reliance in the grounds of detention on statements recorded under Section 108 of the Customs Act, many of which had been retracted by detenus and co-accused well before the detention orders. Retractions of co-accused (e.g., Vikram Bhasin, Mahesh Jain) were not placed before the Detaining Authority, despite other inculpatory statements being relied upon; the DRI's rebuttals were belated and issued days before the detention orders. Authorities compel placement of relevant documents and retractions where a sponsoring authority places confessional statements of others; failure to do so affects the Detaining Authority's subjective satisfaction. Additionally, other material facts (placement of company on Denied Entity List, suspension of implicated Customs appraiser, passport seizure, CESTAT order) were not considered. [Paras 101, 104, 105, 106, 109]

Detention orders are vitiated for non-application of mind owing to non-placement/consideration of vital material and retractions.

Delay in disposal of representations under Article 22(5) / statutory requirement of expedition - Central Government delayed unreasonably in deciding the detenus' statutory representations, contrary to the requirement of expedition, thereby vitiating continued detention. - HELD THAT: - The detenus filed representations shortly after their detention; instead of deciding them expeditiously, the Central Government referred the matter to the Advisory Board and took 65-69 days to reject the representations. Applying settled principles (including the four-category framework for representation in Ankit Ashok Jalan), the Court held that unreasonable delay in disposing of representations under Article 22(5) is fatal to continued detention and noted the delay in the present cases was inordinate and unexplained. [Paras 113, 114, 115, 116, 118]

Detention confirmation process was vitiated by inordinate delay in disposal of statutory representations by the Central Government.

Preventive detention vitiated by mechanical or copy-paste grounds - The grounds of detention were mechanically copied from an unrelated detention order, demonstrating a blatant non-application of mind and vitiating the orders. - HELD THAT: - A comparative examination showed that the grounds in the impugned detention orders were, mutatis mutandis, essentially identical to grounds used in a different detention order dated 17.05.2019. Such 'copy-paste' grounds indicate the Detaining Authority did not apply its mind to the specific facts of the present detenus and the orders were therefore unsustainable. [Paras 120, 121]

Detention orders are vitiated because the grounds were mechanically lifted from an unrelated order, evidencing non-application of mind.

Final Conclusion: The writ petitions are allowed. The Court set aside and quashed the detention orders dated 21.01.2020 against the detenus and directed their immediate release unless otherwise lawfully required in connection with any other case, on the grounds of predetermination/bias, inordinate delay, non-application of mind (including failure to place retractions and vital documents) and delay in disposal of statutory representations.

Time-bound corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code - separation of functions between adjudicating authority and superior court - forum competence and propriety of seeking directions from a High Court - non-application of mind by a judicial tribunal - requirement that parties not be left to the vagaries of proceedings to which they are not parties

Forum competence and propriety of seeking directions from a High Court - separation of functions between adjudicating authority and superior court - non-application of mind by a judicial tribunal - Whether the National Company Law Tribunal, Chennai was justified in asking the High Court to direct whether it could proceed with the CIRP and in directing parties to place the matter before the High Court. - HELD THAT: - The High Court held that the NCLT exceeded the bounds of propriety by inviting the Court to advise whether the NCLT could proceed, and by asking parties before the NCLT to approach the High Court for directions. The order of the NCLT, in effect, sought to delegate to the High Court a decision which the adjudicating authority itself was competent to make, and displayed lack of application of mind in leaving parties - some of whom were not parties to the pending High Court proceedings - dependent on the outcome of separate litigation. While recognising that the CIRP under the IBC is time-bound, the Court observed that this did not empower the NCLT to abdicate its responsibility by requesting guidance from the High Court; instead the NCLT must determine whether the existence of other proceedings or any injunction impedes its jurisdiction and proceed in accordance with law. The Court emphasised that superior courts are not obliged to hand-hold tribunals and that the NCLT should confine itself to its specialised domain and decide the matter on its merits without awaiting directions from the High Court. [Paras 6, 7]

The NCLT was not justified in seeking directions from the High Court or directing parties to approach the High Court; the NCLT must decide the matter in accordance with law and the writ petition is disposed of with the observations recorded.

Final Conclusion: Writ petition disposed of; the High Court directed that the NCLT should itself decide whether and how to proceed with the CIRP without seeking or awaiting directions from the High Court; no order as to costs.

Official Liquidator's power to make payments from company (in liquidation) fund - Publication of notice in Form No.63 under Rule 148(1) of the Companies (Court) Rules, 1959 - Compliance with law when effecting payments in liquidation - Appointment and remuneration of contractual staff from liquidation fund - Allowance of professional fees payable from liquidation fund - Payment of claimed/settled dues after condonation of delay - Payment of dividend to contributories in accordance with bank report and legal entitlement - Filing of income-tax returns by Official Liquidator to claim TDS refund - Payment of audit fees and fees for tax-filing from liquidation fund - Interest payable to unsecured creditors under Rule 179 of the Companies (Court) Rules, 1959

Official Liquidator's power to make payments from company (in liquidation) fund - Publication of notice in Form No.63 under Rule 148(1) of the Companies (Court) Rules, 1959 - Compliance with law when effecting payments in liquidation - Direction to permit the Official Liquidator to make payment of dividend to remaining contributories and to publish an additional advertisement and Form No.63 notice, with payment to the advertisement agency from the company (in liquidation) fund. - HELD THAT: - The Official Liquidator sought extension/time to make dividend payments delayed by COVID and permission to publish another advertisement and Form No.63 notice through an agency and to meet the agency's charges from the company's liquidation fund. The Court granted the prayer subject to the condition that all acts be carried out strictly in accordance with law, directed the Official Liquidator to make the payments within sixty days, and authorised the publication of the specified advertisements and Form No.63 notice with payment to the agency from the company (in liquidation) fund.

Application allowed; Official Liquidator permitted to publish notices and to pay the contributories and advertisement agency from the company (in liquidation) fund, strictly in accordance with law, and payments to be completed within sixty days.

Appointment and remuneration of contractual staff from liquidation fund - Official Liquidator's power to make payments from company (in liquidation) fund - Permission to appoint a typist-cum-clerk on contract and to pay a fixed monthly salary from the company (in liquidation) fund for a limited period. - HELD THAT: - The Official Liquidator applied to engage a typist-cum-clerk on a contractual basis for a specified period and to meet the salary from the liquidation fund. The Court allowed the application and directed the Official Liquidator to implement the appointment and payments strictly in accordance with law.

Application allowed; Official Liquidator authorised to appoint the contractual typist-cum-clerk and to pay salary from the liquidation fund in accordance with law.

Allowance of professional fees payable from liquidation fund - Official Liquidator's power to make payments from company (in liquidation) fund - Increase of professional fee for counsel and payment thereof from the company (in liquidation) fund, payable from the date of application. - HELD THAT: - The Official Liquidator sought enhancement of the professional fee payable to counsel. The Court allowed the increase to the proposed monthly amount and directed that the enhanced fee be payable from the date of the application, to be discharged from the liquidation fund, subject to compliance with law.

Application allowed; proposed increase in professional fee permitted and to be paid from the liquidation fund from the date of application.

Payment of claimed/settled dues after condonation of delay - Official Liquidator's power to make payments from company (in liquidation) fund - Permission to release claimed/settled amounts to specific claimants (where delay was condoned) by opening dividend accounts, to be effected from the company (in liquidation) fund. - HELD THAT: - Applications for release of claimed amounts by particular claimants were presented with the representation that delay had been condoned. The Court accepted the submissions and allowed the Official Liquidator to take necessary steps to release the claimed/settled amounts by opening dividend accounts, subject to strict compliance with law.

Applications allowed; Official Liquidator authorised to release the claimed/settled amounts to the claimants by opening dividend accounts and to take necessary steps strictly in accordance with law.

Official Liquidator's power to make payments from company (in liquidation) fund - Direction to the Official Liquidator to make a specified payment plus applicable interest (at the stated rate) from the liquidation fund as prayed. - HELD THAT: - The Official Liquidator applied for release of a particular amount including interest at the bank's fixed deposit rate previously paid to other workmen. The Court, for reasons stated, allowed the application and directed the Official Liquidator to make the necessary payment from the liquidation fund, strictly in accordance with law.

Application allowed; Official Liquidator directed to make the specified payment with applicable interest from the liquidation fund in accordance with law.

Payment of dividend to contributories in accordance with bank report and legal entitlement - Official Liquidator's power to make payments from company (in liquidation) fund - Permission to pay the second dividend to contributories in accordance with the bank's report, if payable in law. - HELD THAT: - The Official Liquidator sought sanction to pay a second dividend to contributories by opening a dividend account with a named bank for an amount reflected in the bank's report. The Court allowed the application but qualified the direction by stating that payment shall be made strictly in accordance with the bank's report and only if the payment is payable in law.

Application allowed; Official Liquidator authorised to pay the second dividend in accordance with the bank's report and subject to legal entitlement.

Filing of income-tax returns by Official Liquidator to claim TDS refund - Payment of audit fees and fees for tax-filing from liquidation fund - Official Liquidator's power to make payments from company (in liquidation) fund - Permission granted to the Official Liquidator to file income-tax returns to claim TDS refunds and to engage and pay a chartered accountant for audit and tax-filing work from the liquidation fund within stated monetary limits. - HELD THAT: - The Official Liquidator sought leave to file income-tax returns to claim TDS refunds and to pay audit and tax-filing fees to a named chartered accountant, including specified amounts and yearly caps. The Court allowed these prayers and directed the Official Liquidator to carry out the filings and payments strictly in accordance with law.

Application allowed; Official Liquidator permitted to file income-tax returns for TDS refunds and to pay audit and tax-filing fees from the liquidation fund within the limits stated, subject to compliance with law.

Interest payable to unsecured creditors under Rule 179 of the Companies (Court) Rules, 1959 - Official Liquidator's power to make payments from company (in liquidation) fund - Unsecured creditors are entitled to interest at the rate of 4% per annum under Rule 179 from the date of winding up until the date of declaration of dividend; Official Liquidator directed to pay accordingly. - HELD THAT: - Two unsecured creditors applied for interest on belated payments. The Official Liquidator acknowledged Rule 179's applicability and that unsecured creditors are entitled to interest at 4% per annum. The Court agreed and directed the Official Liquidator to pay interest at 4% per annum from the date of winding up to the date of declaration of dividend, and to make necessary payments in accordance with law.

Applications disposed of; Official Liquidator directed to pay unsecured creditors interest at 4% per annum from the date of winding up until declaration of dividend, and to effect payments in accordance with law.

Final Conclusion: Multiple applications by the Official Liquidator were allowed: directions were given to effect dividend and other payments, to publish requisite notices, to engage and remunerate staff and professionals, to file income-tax returns and pay related audit/tax-filing fees, and to pay interest to unsecured creditors under Rule 179 - all subject to strict compliance with law and the conditions indicated by the Court.

Inspection of books of account under Section 128(3) of the Companies Act, 2013 - Oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013 - Nominee director status and shareholder standing for maintainability of reliefs

Inspection of books of account under Section 128(3) of the Companies Act, 2013 - Whether the petitioner was entitled to inspection of the company's books and related reliefs as sought in the petition and amendment application - HELD THAT: - The Tribunal examined the petition and the amendment application and found that both sets of prayers were confined to reliefs available under Section 128(3) of the Companies Act, 2013 and did not properly invoke or plead substantive allegations under Sections 241 and 242. The Tribunal noted the petitioner had earlier asserted nominee-director status of a third party which was held in a separate order to not be a shareholder of the respondent company, and that in the present petition there were no specific allegations of oppression or mismanagement which would justify reliefs beyond inspection rights. In the absence of pleaded grounds of oppression or mismanagement and having regard to the limited scope of the prayers, the Tribunal found no merit in granting the reliefs sought and proceeded to dispose of the petition on that basis. [Paras 5, 7, 8]

The petition and the amendment application seeking inspection and attendant directions were dismissed for want of merit.

Oppression and mismanagement under Sections 241 and 242 of the Companies Act, 2013 - Nominee director status and shareholder standing for maintainability of reliefs - Whether the petition could be sustained under Sections 241 and 242 in the absence of specific allegations and where the purported principal was not a shareholder - HELD THAT: - The Tribunal recorded that the petitioner had earlier relied on the nominee-director status of M/s. Buddy (Mumbai) Duty Free Services Pvt. Ltd., but in a separate contemporaneous order it was held that that entity was not a shareholder of the respondent company. The instant petition contained no specific or particularised allegations of oppression or mismanagement. Given lack of pleaded facts to invoke the remedial jurisdiction under Sections 241 and 242 and the absence of shareholder standing of the alleged principal, the Tribunal concluded that the petition could not be sustained on grounds of oppression and mismanagement. [Paras 7, 8]

Claims under Sections 241 and 242 were not maintainable on the facts pleaded; the petition was dismissed.

Final Conclusion: The Tribunal dismissed CP No. 163/Chd/Hry/2018 and CA No. 549/2018, holding the prayers were confined to inspection under Section 128(3) and that no specific allegations of oppression or mismanagement or requisite shareholder standing were made to sustain reliefs under Sections 241-242.

Scheme of Amalgamation - Sanction under Sections 230 to 232 of the Companies Act, 2013 - Appointed Date - Dissolution of transferor company without winding up - Acceptance of Regional Director's report subject to undertakings - Accounting treatment: capital reserve arising out of amalgamation - Filing and publication obligations following sanction

Scheme of Amalgamation - Sanction under Sections 230 to 232 of the Companies Act, 2013 - Sanction of the Scheme of Amalgamation between ANJ Buildcon Private Limited and ANJ Turnkey Projects Private Limited - HELD THAT: - The Tribunal examined the Scheme filed under Sections 230 to 232 of the Companies Act, 2013, the affidavits of compliance, the report of the Regional Director and the report of the Official Liquidator, and found no objections on record. The petitioners' undertakings in rejoinder addressed the observations in the Regional Director's report. On the material before it the Tribunal concluded that the Scheme is fair and reasonable, does not violate any provision of law, and is not contrary to public policy. The petition was therefore made absolute and the Scheme sanctioned in terms of the prayer of the petition. [Paras 9, 10, 11, 12, 13]

Company Petition No. 1068 of 2020 is made absolute and the Scheme of Amalgamation is sanctioned.

Appointed Date - Fixation and effect of the Appointed Date for the Scheme - HELD THAT: - The Scheme fixed the Appointed Date as the opening of business hours on 1st April 2019. The petitioners confirmed compliance with Section 232(6) of the Companies Act, 2013 and relevant MCA circulars, and the Tribunal accepted that the Scheme shall be deemed effective from the Appointed Date as provided in the Scheme. [Paras 8, 9, 14]

The Appointed Date of the Scheme is 1st April 2019 and the Scheme shall be effective from that date.

Dissolution of transferor company without winding up - Consequences of sanction on the status of the Transferor Company - HELD THAT: - Upon sanction of the Scheme by the Tribunal, the Transferor Companies are declared to stand dissolved without the process of winding up. This consequence follows from the operation of the sanctioned Scheme as approved by the Tribunal. [Paras 14]

The Transferor Companies shall stand dissolved without winding up upon the Scheme becoming effective.

Acceptance of Regional Director's report subject to undertakings - Accounting treatment: capital reserve arising out of amalgamation - Disposition of observations in the Regional Director's report and acceptance of petitioners' undertakings - HELD THAT: - The Regional Director raised multiple observations relating to accounting entries, appointed date, meeting approvals, scheme identity, stamp duty/fees, reduction of share capital, treatment of excess of assets over liabilities and compliance with income tax provisions and RERA. The petitioners filed an affidavit in rejoinder addressing each observation, undertaking compliance (including accounting standards, confirmation of the Appointed Date, service of notices, fee and stamp duty compliance, that reduction clause did not apply, treatment of capital reserve, and Income Tax Act compliance). The Tribunal accepted these explanations and recorded that the Regional Director expressed no objection to sanctioning the Scheme. [Paras 8, 9, 10]

The Tribunal accepted the petitioners' rejoinder and undertakings in response to the Regional Director's report and recorded no objection to sanction.

Filing and publication obligations following sanction - Post-sanction directions regarding publication, stamping and filing with Registrar of Companies - HELD THAT: - The Tribunal directed immediate publication of the approval in the same newspapers used previously and hosting a copy of the order on the petitioners' websites for dissemination. The petitioners were directed to lodge a certified copy of the order and the Scheme with the Superintendent of Stamps within 60 days for adjudication of stamp duty, if any, and to file a certified copy of the order and Scheme with the Registrar of Companies electronically in e form INC 28 within 30 days from issue of the order. The Tribunal also directed that all concerned regulatory authorities may act on a certified copy of the Order and Scheme and kept liberty for interested persons to apply for further directions. [Paras 15, 16, 17, 18, 19]

Petitioners must publish the sanction, lodge certified copies with stamp authorities and the Registrar of Companies within the specified periods and comply with consequential filing and dissemination obligations.

Final Conclusion: The Scheme of Amalgamation between ANJ Buildcon Private Limited and ANJ Turnkey Projects Private Limited is sanctioned under Sections 230-232 of the Companies Act, 2013, effective from the Appointed Date 1st April 2019; the transferor companies shall stand dissolved without winding up; the Tribunal accepted the petitioners' undertakings in response to the Regional Director's report and directed specified publication and filing steps including stamping and ROC filing.

Sanction of scheme of amalgamation under Sections 230-232 of the Companies Act, 2013 - Compliance with statutory notice and meeting requirements under Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 - Approval binding on transferor and transferee companies, their shareholders and creditors - Treatment of assets, liabilities and share cancellation upon amalgamation - Accounting treatment for amalgamation among entities under common control (pooling of interests under Ind AS 103) - Single window clearance and amendment of Memorandum of Association consequent to scheme - Filing of certified copy of sanction order and compliance with Rule 17(2) / Form INC-28 - Quantification of fees payable to Regional Director and Official Liquidator

Sanction of scheme of amalgamation under Sections 230-232 of the Companies Act, 2013 - Approval binding on transferor and transferee companies, their shareholders and creditors - The Scheme of Amalgamation of Bhadra Textiles and Trading Private Limited and Villa Trading Company Private Limited with Gujarat Sidhee Cement Limited is sanctioned and declared binding on the companies, their shareholders and creditors. - HELD THAT: - On consideration of the Scheme and the documents on record the Tribunal found that the requirements of Sections 230 and 232 of the Companies Act, 2013 were satisfied, and that the Scheme was genuine, bonafide and in the interest of shareholders and creditors. The joint petition was allowed and the Scheme annexed to the petition was sanctioned. The sanction includes the declaration that the Scheme shall be binding on the petitioner companies, their shareholders and all concerned. [Paras 10, 11]

Petition allowed; Scheme sanctioned and declared binding.

Compliance with statutory notice and meeting requirements under Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 - Convening and dispensation of meetings; voting and approvals - Statutory notices and meetings were duly served/held or dispensed with as directed and the required shareholder/creditor approvals were obtained. - HELD THAT: - The Tribunal's earlier order dispensing with certain meetings and directing convening of others was complied with. Notices in Form CAA.3 were served on the Regional Director, ROC, Income-tax authorities and Official Liquidator; notices were issued to members and unsecured creditors (record dates as fixed) and published in prescribed newspapers. The meeting of equity shareholders and unsecured creditors of the transferee company were duly convened and the chairman's affidavit and scrutinizer's report recorded approval by 99.02% of equity shareholders and 100% of unsecured creditors present and voting. [Paras 3, 4, 7]

Statutory notice and meeting requirements complied with; requisite approvals obtained.

Consideration of representations of Regional Director and Official Liquidator - Undertakings by companies to comply with FEMA, RBI, SEBI and other regulatory requirements - Representations filed by the Regional Director and Official Liquidator were considered and the petitioner companies furnished responses and undertakings which were recorded. - HELD THAT: - The petitioners filed detailed responses to the RD and OL representations, addressing comments and giving specific undertakings - including compliance with Section 232(3)(i) in relation to fees on enhanced authorised capital, adherence to FEMA/RBI obligations and regulatory compliances with SEBI, preservation of books and records, payment of office expenses of the OL as may be directed, and filing certified copies of the sanction order with the ROC. These responses and undertakings were placed before the Tribunal and taken into account in the sanction process. [Paras 8]

RD and OL representations addressed; undertakings recorded and accepted for purposes of sanction.

Filing requirements post-sanction and ministerial directions - Quantification of fees payable to Regional Director and Official Liquidator - Directions given for post-sanction compliance including filing of order in Form INC-28 and quantification of fees to RD and OL. - HELD THAT: - The Tribunal directed compliance with Rule 17(2) of the Companies (CAA) Rules, 2016 requiring filing of the sanction order, if any, in Form INC-28 with the Registrar of Companies, Gujarat. The fees of the Regional Director were quantified at Rs. 20,000 in respect of each petitioner company and fees of the Official Liquidator were quantified at Rs. 15,000 in respect of the petitioner transferor companies. The Tribunal dispensed with filing and issuance of drawn up orders and authorised concerned authorities to act on a certified copy of the order and Scheme. [Paras 14, 15, 16]

Post-sanction filing directed; RD and OL fees quantified; certified copy to be issued and acted upon.

Final Conclusion: The NCLT sanctioned the Scheme of Amalgamation, holding statutory requirements under Sections 230-232 satisfied, recorded compliance with notice and meeting formalities and responses to regulatory representations, directed post-sanction filings and quantified fees to RD and OL; the Scheme is binding on the companies, their shareholders and creditors and the certified copy of the order with the Scheme is to be filed with the ROC and acted upon by concerned authorities.

Admission under Section 9 of IBC - operational debt - pre-existence of dispute - Mobilox principle regarding rejection for pre-existing dispute - time-bound resolution object of the Code - jurisdiction to admit under Section 9

Admission under Section 9 of IBC - operational debt - pre-existence of dispute - Mobilox principle regarding rejection for pre-existing dispute - time-bound resolution object of the Code - Whether the appellant's Section 9 application deserved admission for initiation of CIRP in view of admitted debt and absence of any pre-existing dispute. - HELD THAT: - The Tribunal examined the impugned order which declined admission on the basis that parties were negotiating payments and that the corporate debtor had made substantial payments and sought time because of the economic slowdown and lockdown (paras 8-9). The Tribunal held that the Adjudicating Authority erred in treating ongoing negotiations or a request for rescheduling as a ground to refuse admission where the statutory criteria under Section 9 are otherwise satisfied. Applying the principle in Mobilox, the Tribunal reiterated that an application under Section 9 must be rejected only if there is a pre-existing dispute prior to the demand notice; in the present case no such pre-existing dispute was established and the respondent had repeatedly admitted liability and default (paras 12-16). The Tribunal further emphasised the object of the Code to secure resolution in a time-bound manner and that the NCLT is not a court of equity to delay admission on commercial considerations; therefore the Adjudicating Authority should have confined itself to the Section 9 criteria and not declined admission on the ground of ongoing negotiations or perceived solvency (paras 15-16). On the materials - minutes of meeting, letters proposing revised payment schedule, acknowledgment of debt and absence of denial before the demand notice - the Tribunal concluded the debt fell within the definition of operational debt and the Section 9 thresholds were met (paras 16-18). [Paras 12, 15, 16, 18, 19]

Application under Section 9 satisfied the statutory criteria and the Adjudicating Authority's order is set aside; the NCLT is directed to admit the Section 9 application after affording opportunity to the parties.

Final Conclusion: The appeal is allowed; the order dated 18th December 2020 is set aside and the Adjudicating Authority is directed to admit the Section 9 application in accordance with law after giving opportunity to the parties. No orders as to costs.

Transfer of title on confirmation of sale under SARFAESI - sale certificate as evidence not requiring registration - effect of SARFAESI sale completed prior to commencement of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - jurisdiction of the Adjudicating Authority under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 to interfere with a completed SARFAESI sale

Transfer of title on confirmation of sale under SARFAESI - effect of SARFAESI sale completed prior to commencement of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 - Title to the property sold in public auction under the SARFAESI Act vested in the auction purchaser on confirmation of sale and the SARFAESI sale completed prior to the commencement of the CIRP moratorium. - HELD THAT: - The Tribunal accepted the principle, as stated in the cited Supreme Court decision, that when a property is sold by public auction and the bid is accepted and confirmed, the sale becomes absolute and title vests in the purchaser; the sale certificate is evidence of that title. Applying the admitted facts - possession taken by the bank on 27.08.2019, e-auction and confirmation on 24.10.2019, balance payment on 27.12.2019 and issuance of sale certificate on 30.12.2019, whereas the Insolvency Commencement Date was 24.01.2020 - the sale under SARFAESI stood completed before the commencement of moratorium under Section 14 IBC and therefore the property did not remain an asset of the corporate debtor at the relevant time. [Paras 24, 25, 28, 29, 30]

The sale under the SARFAESI Act became absolute on confirmation and vested title in the auction purchaser prior to the CIRP commencement date; the property ceased to be the corporate debtor's asset.

Sale certificate as evidence not requiring registration - A sale certificate issued pursuant to a SARFAESI auction evidencing an absolute sale does not require registration under the Registration Act. - HELD THAT: - Relying on the Supreme Court precedent reproduced in the judgment, the Tribunal held that a sale certificate issued on confirmation of a public auction is merely evidence of title and no further deed of transfer is contemplated or required; Section 17(2)(xii) of the Registration Act exempts a certificate of sale granted to a purchaser of property sold by public auction from the class of non-testamentary documents mandatorily requiring registration. Consequently, non-registration of the sale certificate does not render the sale void or susceptible to being set aside on that ground. [Paras 25]

The sale certificate is evidence of title for a SARFAESI auction sale and its non-registration does not invalidate the completed sale.

Jurisdiction of the Adjudicating Authority under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 to interfere with a completed SARFAESI sale - The Adjudicating Authority did not err in dismissing the interlocutory application seeking to set aside the SARFAESI sale, given that the sale had been completed prior to the CIRP commencement date. - HELD THAT: - The Tribunal reviewed the factual chronology and the legal position that a completed SARFAESI sale vests title in the purchaser before the CIRP moratorium. In that factual and legal matrix, the Adjudicating Authority's dismissal of the application under Section 60(5)(a) & (c) IBC challenging the SARFAESI sale was held to be without illegality. The Tribunal found no merit in the appellant's contention that the NCLT could set aside the completed SARFAESI sale on the grounds advanced. [Paras 31]

The Impugned Order of the Adjudicating Authority dismissing the application was affirmed; there was no jurisdictional or legal error in refusing to set aside the completed SARFAESI sale.

Final Conclusion: The appeal is dismissed: the Tribunal affirmed that the SARFAESI auction sale became absolute on confirmation and vested title in the auction purchaser before the CIRP commencement date, that the sale certificate is evidentiary and need not be registered, and that the Adjudicating Authority rightly dismissed the application challenging the sale.

Liquidation under Section 33(2) of IBC - Committee of Creditors' commercial wisdom - Appointment of Liquidator - Moratorium under Section 14 and fresh moratorium under Section 33(5) - Investigation of financial affairs under Section 35(1) - Public announcement under Section 15 - Resolution Professional's consent in Form AA

Liquidation under Section 33(2) of IBC - Committee of Creditors' commercial wisdom - Public announcement under Section 15 - Application under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 for liquidation of the corporate debtor was allowable on the basis of the CoC resolution. - HELD THAT: - The Tribunal recorded that the Interim Resolution Professional had issued the public announcement under Section 15 and claims were received leading to constitution and reconstitution of the CoC. The CoC, after holding meetings and noting absence of any viable resolution applicants and lack of cooperation from promoters, unanimously resolved to liquidate the corporate debtor as an exercise of its commercial wisdom. There was no opposition from promoters and the Resolution Professional had given written consent in Form AA to act as liquidator. Guided by the CoC resolution and the precedent relied upon, the Tribunal held that initiation of liquidation under Section 33(2) was justified and accordingly allowed the application.

Application under Section 33(2) allowed and liquidation of the corporate debtor ordered on the basis of the CoC resolution.

Appointment of Liquidator - Moratorium under Section 14 and fresh moratorium under Section 33(5) - Investigation of financial affairs under Section 35(1) - Appointment of the Resolution Professional as Liquidator and directions governing the liquidation process were approved. - HELD THAT: - The Tribunal appointed the incumbent Resolution Professional as Liquidator, noting his consent and requisite authorisation, and issued directions for the liquidation process. The directions required the liquidator to act in accordance with the IBC, make the public announcement that the company is in liquidation (with discharge notice to employees under Section 33(7)), investigate the corporate debtor's financial affairs including preferential and undervalued transactions under Section 35(1), intimate relevant statutory authorities including the Registrar of Companies and tax authorities, and comply with the Insolvency and Bankruptcy (Liquidation Process) Regulations, 2017. The order further recorded that the earlier moratorium under Section 14 would cease and a fresh moratorium under Section 33(5) would commence, and mandated submission of a preliminary report within the specified regulatory period.

Incumbent Resolution Professional appointed as Liquidator with specified statutory and regulatory directions to conduct the liquidation.

Final Conclusion: The application for liquidation under Section 33(2) of the IBC, 2016 was allowed on the basis of the CoC's unanimous commercial decision; the incumbent Resolution Professional was appointed as Liquidator and directed to carry out the liquidation process in accordance with the Code and applicable regulations, including requisite investigations, announcements, statutory intimations and reporting.

Refund of CENVAT credit for export of services - limitation and relevant date under Section 11B(2) - interest on delayed refund under Section 11BB - finality of Tribunal order and bar to re-adjudication - prohibition on requiring fresh refund application after appellate victory - non-application of GST Circular to erstwhile Service Tax/CENVAT regime

Refund of CENVAT credit for export of services - limitation and relevant date under Section 11B(2) - prohibition on requiring fresh refund application after appellate victory - finality of Tribunal order and bar to re-adjudication - non-application of GST Circular to erstwhile Service Tax/CENVAT regime - Refund claim under Rule 5 of CENVAT Credit Rules, 2004 for 2006-2007 was admissible despite the department's insistence on filing a fresh refund application after favourable orders in appeal/tribunal. - HELD THAT: - The Tribunal held that the appellant had originally filed a refund application (17.7.2007) which was adjudicated and, after appellate and Tribunal decisions in appellant's favour, the department could not compel filing of a fresh application nor re-adjudicate the settled claim. The relevant date concept in Section 11B(2) applies to the initial application and does not mandate a second application following favourable appellate or Tribunal orders. The order of the CESTAT dated 16.7.2014 (communicated 25.11.2016) attained finality and thus the lower authority had no jurisdiction to reopen or demand a fresh claim; reliance on GST Circulars to require a new application was incorrect as those circulars cannot override the statutory scheme of the erstwhile Service Tax/CENVAT regime. The Tribunal's reasoning in BASF India Ltd. and SPIC Ltd., as discussed, supports that once an initial statutory refund claim is on record and adjudicated in favour of the claimant on appeal, the department must refund as per the appellate/Tribunal order without insisting on a subsequent application.

Impugned order rejecting the refund on limitation grounds and for want of a fresh application set aside; refund claim allowed.

Interest on delayed refund under Section 11BB - limitation and relevant date under Section 11B(2) - Entitlement to interest on delayed refund and the date from which interest is payable under Section 11BB. - HELD THAT: - Following the Supreme Court decision in Ranbaxy Laboratories Ltd., interest under Section 11BB is payable where the refunded amount is not paid within three months from the date of receipt of the application under Section 11B(1). The Explanation to Section 11BB treating an appellate order as an order under Section 11B(2) does not postpone the date from which interest runs. Therefore, interest on delayed refund is payable from the expiry of three months from the date of receipt of the (initial) refund application, not from the date of the appellate/Tribunal order.

Appellant entitled to interest on delayed refund as per Ranbaxy; interest to be computed from three months after receipt of the refund application in accordance with Section 11BB.

Final Conclusion: The impugned order is set aside; the refund claims for 2006-2007 are allowed and the appellant is entitled to interest on the delayed refund in accordance with the established interpretation of Section 11BB.

Allowability of CENVAT credit on repair, renovation and maintenance (Works Contract Service) used for providing output service - Exclusion of works contract service relating to construction of building or civil structure - Interpretation of Rule 2(l) of the CENVAT Credit Rules, 2004 - Admissibility of CENVAT credit for recreational activities (conducting quiz competition) - Relevance of Circular No.943/4/2011-CX dated 29.04.2011 on CENVAT credit for repair/renovation

Allowability of CENVAT credit on repair, renovation and maintenance (Works Contract Service) used for providing output service - Interpretation of Rule 2(l) of the CENVAT Credit Rules, 2004 - Exclusion of works contract service relating to construction of building or civil structure - Relevance of Circular No.943/4/2011-CX dated 29.04.2011 on CENVAT credit for repair/renovation - CENVAT credit on Works Contract Service for repair, renovation and maintenance of the appellant's office premises is allowable. - HELD THAT: - The Tribunal found that the services availed by the appellant related only to repair, renovation and maintenance of its leased office premises undertaken to modernize the working environment and to enable provision of output services. Such services are not specifically excluded by Rule 2(l) because the exclusions apply to construction or execution of works contract of a building or civil structure, or laying of foundation or making of structures for support of capital goods. The Tribunal relied on consistent precedents holding that repair and maintenance of office premises fall within the inclusive part of the definition of input service, and on Circular No.943/4/2011-CX which clarifies that input services used for repair or renovation of a factory or office are admissible. Applying these principles to the facts, denial of CENVAT credit on the works contract service was held unsustainable and the credit was allowed. [Paras 6, 7]

Allowed CENVAT credit on Works Contract Service for repair, renovation and maintenance of the office premises.

Admissibility of CENVAT credit for recreational activities (conducting quiz competition) - CENVAT credit of service tax paid on conducting quiz competition is not allowable. - HELD THAT: - The Tribunal considered the appellant's submission that quiz competitions and similar recreational activities conducted for employees are part of team-building and morale-boosting measures. On the facts and in law the Tribunal was not inclined to treat such recreational activities as admissible input services and therefore refused the claim of CENVAT credit in respect of service tax paid on conducting quiz competitions. [Paras 6, 7]

Denied CENVAT credit on service tax paid for conducting quiz competition.

Final Conclusion: The appeal is partly allowed: CENVAT credit on Works Contract Service for repair, renovation and maintenance of the office premises is permitted, while CENVAT credit on service tax paid for conducting quiz competition is rejected.

Taxability of mark-up in freight forwarding - Support Services of Business or Commerce - negative list regime / post-negative list taxability - trading in space not a taxable service

Taxability of mark-up in freight forwarding - Support Services of Business or Commerce - trading in space not a taxable service - negative list regime / post-negative list taxability - Whether the mark-up charged by the appellant for booking cargo space (difference between amount paid to Shipping Lines/Airlines and amount recovered from customers) constitutes a taxable service and is liable to service tax under the category of Support Services of Business or Commerce for the periods 2013-14 and 2014-15. - HELD THAT: - The appellant's business consisted of procuring cargo/container/air space from Shipping Lines/Airlines and reselling that space to importers/exporters, the margin being described as a "mark-up". The Department treated the mark-up as consideration for services falling under Support Services of Business or Commerce and issued show cause notices for the periods in dispute. The Tribunal, applying its earlier decision in the appellant's related appeals and following precedents such as Greenwich Meridian Logistics (India) Pvt Ltd. and Karam Freight Movers, accepted that the appellant was engaged in trading of space and not in providing a taxable service. The Tribunal also considered the applicability of the negative list regime effective from 01.07.2012 and concluded that the mark-up did not attract service tax. On that basis the Tribunal found the orders confirming demand with interest and penalty to be unsustainable and set them aside. [Paras 6, 8, 10]

The demands of service tax, interest and penalty confirmed by the Commissioner for the periods 2013-14 and 2014-15 are set aside and the two appeals are allowed.

Final Conclusion: Following earlier Tribunal decisions that the appellant's activity amounted to trading in space and not provision of a taxable service, the confirmed demands for service tax, interest and penalty for 2013-14 and 2014-15 have been set aside and the appeals allowed.

Option to fix special rate representing actual value addition - time limit for filing application (30th September of the financial year) - effect of interim order on exercise of statutory option - constructive res judicata - direction to authority to decide application on merits

Option to fix special rate representing actual value addition - effect of interim order on exercise of statutory option - Manufacturers are entitled to the statutory option to apply for fixation of a special rate representing actual value addition under the notifications. - HELD THAT: - The Court held that the amended notification confers a legal right on the manufacturer to forgo the tabled rates and apply to the Commissioner for fixation of a special rate representing actual value addition. The Court observed that while the stay and interim orders affected the practical operation of any determination made earlier, that did not negate the underlying statutory right to seek fixation of a special rate. Consequently, the petitioner's entitlement to seek such fixation survives and is cognizable despite the intervening appellate proceedings and interim orders; the determinative reasoning is that the notifications create a substantive option which the assessee may exercise when the occasion for doing so arises (see paragraphs 9, 10, 15-18). [Paras 9, 10, 15, 16, 18]

The petitioner has a legal right to apply for fixation of a special rate representing actual value addition and that right is to be recognised and considered.

Time limit for filing application (30th September of the financial year) - constructive res judicata - direction to authority to decide application on merits - The application filed on 18.05.2020 for fixation of a special rate is not to be summarily rejected on the ground of non submission before 30th September and is to be decided on merits by the Principal Commissioner. - HELD THAT: - The Court noted that the 30th September provision was incorporated for procedural streamlining but refrained from conclusively ruling it mandatory or directory. Given the peculiar facts - namely that the occasion to claim a special rate arose only after final adjudication by the Supreme Court and that earlier interim orders made such a claim impracticable - the Court held that the petitioner should not be precluded from seeking relief solely for not having filed within the prescribed date. The Court further observed that the respondent authority had earlier agreed to consider the petitioner's claim in WP(C) No.1644/2021 and that, on the principle of constructive res judicata, raising the 30th September objection now would be inappropriate. Accordingly, the Principal Commissioner was directed to consider and decide the petitioner's application dated 18.05.2020 on its merits (see paragraphs 16-21). [Paras 17, 18, 19, 20, 21]

The Principal Commissioner, GST, Guwahati is directed to decide the petitioner's application dated 18.05.2020 for fixation of a special rate on merits and not to reject it solely for non submission before 30th September.

Final Conclusion: Writ petition allowed: the petitioner's statutory right to apply for fixation of a special rate representing actual value addition is recognised and the Principal Commissioner, GST, Guwahati is directed to consider and decide the petitioner's application dated 18.05.2020 on merits, with the petitioner not to be summarily precluded on the ground of non submission before 30th September of the relevant year.

Refund under Rule 5 of the Cenvat Credit Rules - treatment of deemed export clearances as physical exports for refund - precedent effect of prior adjudication between the same parties - entitlement to interest on delayed refund under Section 11BB - commencement of interest after three months from receipt of refund application

Refund under Rule 5 of the Cenvat Credit Rules - treatment of deemed export clearances as physical exports for refund - precedent effect of prior adjudication between the same parties - Appellant entitled to refund of unutilised Cenvat credit for goods cleared under ICB for the period January-2015 to March-2015 under Rule 5 read with notification dated 17.03.2012 and Section 11B of the Central Excise Act, 1944. - HELD THAT: - The Tribunal had earlier held (in respect of the appellant for January-2014 to December-2014) that clearances under ICB are to be treated as exports for the purpose of refund claims, applying the ratio in Shilpa Copper Wire Industries. That adjudication was upheld by this Court and attained finality. The identical legal question and factual matrix arose in the present claim for January-2015 to March-2015; the Tribunal in the present proceedings declined to follow the earlier final adjudication for the appellant and distinguished it on untenable grounds. Given the prior, binding adjudication between the same parties and the consistent application of the principle that ICB clearances qualify as exports/physical exports for refund under Rule 5, the claim for refund as presented was legally tenable and its rejection was contrary to law. Accordingly the appellant's entitlement to refund for the verified amount is upheld. [Paras 5]

Refund claim under Rule 5 read with the notification dated 17.03.2012 and Section 11B allowed; Tribunal order set aside and refund directed.

Interest on delayed refund under Section 11BB - commencement of interest after three months from receipt of refund application - authority to calculate interest - Amount of refund shall carry interest under Section 11BB from the expiry of three months from 17.04.2015 (date of receipt of the refund application) until actual payment, with the Authority to compute and pay the interest. - HELD THAT: - The Supreme Court's decision in Ranbaxy establishes that the revenue's liability to pay interest under Section 11BB commences from the date of expiry of three months from receipt of the refund application and continues until payment. Applying that settled position, interest accrues from three months after 17.04.2015 (the date the respondent received the appellant's refund application) until actual payment. The Court followed the established practice of directing the adjudicating authority to compute and make the payment of interest; therefore the Authority which issued the show cause notice is directed to calculate and pay the interest in accordance with law within the timeframe ordered. [Paras 8, 9]

Refund amount shall be paid with interest under Section 11BB from the expiry of three months from 17.04.2015 until actual payment; the issuing Authority to calculate and pay the interest.

Final Conclusion: Appeal allowed: Tribunal order dated 11.02.2021 set aside; appellant entitled to the verified refund for January-2015 to March-2015 and to interest under Section 11BB from three months after 17.04.2015 until payment; interest to be computed and paid by the Authority within the period directed.

Revision under Section 35EE of the Central Excise Act - impropriety of revisional authority being same officer who passed the order-in-appeal - quashing of order on account of institutional bias - remand under Section 129 DD of the Act - affording opportunity of hearing and passing reasoned orders on merits

Impropriety of revisional authority being same officer who passed the order-in-appeal - quashing of order on account of institutional bias - Impugned revisional order passed by the Joint Secretary (Revision Application), who had held the same rank as and previously passed the Order-in-Appeal, was impermissible and liable to be set aside. - HELD THAT: - The Court found that the revisional authority who rejected the revision application occupied the same rank and had earlier passed the Order-in-Appeal which was the subject matter of the revision; such a configuration gives rise to an impermissible situation warranting interference. Reliance was placed on the Court's earlier treatment of similarly situated matters where orders were set aside for the same reason. On this ground the impugned order was quashed.

Impugned revisional order quashed for being impermissible as rendered by an authority which had previously dealt with the matter in appeal.

Remand under Section 129 DD of the Act - affording opportunity of hearing and passing reasoned orders on merits - Matter remitted to the Revisional Authority for fresh consideration with directions to afford hearing and to decide the revision on merits by a reconstituted authority uninfluenced by the set-aside order. - HELD THAT: - Having set aside the impugned order, the Court directed remand to the Revisional Authority under the statutory provision cited, instructing that the authority, after reconstitution where necessary, must afford the petitioner full opportunity of hearing, consider each contention raised, and pass reasoned orders on merits in accordance with law. The Court noted that corrective measures in reconstitution had, on instructions, already been taken, but nevertheless required fresh consideration uninhibited by the quashed order and directed communication of the decision to the petitioner.

Matter remitted for fresh consideration by a duly constituted Revisional Authority which shall hear the petitioner and pass reasoned orders on merits in accordance with law.

Final Conclusion: Impugned revisional order set aside on account of the revisional authority's impermissible prior involvement; the matter is remitted for fresh consideration by a properly constituted Revisional Authority which shall hear the petitioner and pass reasoned orders on merits under the statutory provision invoked.

Conversion ratio of preforms to PET bottles - manufacturing wastage / process loss - clandestine removal and burden of proof - reliance on comparative documentary figures (ER 6 v. Form 3CD) - invocation of extended period of limitation

Conversion ratio of preforms to PET bottles - manufacturing wastage / process loss - reliance on comparative documentary figures (ER 6 v. Form 3CD) - Whether demand of excise duty based on department's assumption of 100% conversion of preforms into PET bottles, derived from comparison of ER 6 and Form 3CD figures, is sustainable without accounting for manufacturing wastage. - HELD THAT: - The Tribunal found that the adjudicating authority confirmed the demand solely by treating the ER 6 and Form 3CD discrepancy as proof of manufacture and clearance of excess PET bottles by applying a 100% conversion assumption (para 6). The appellant produced reconciliations and flowcharts demonstrating process losses (wastage) in preforms and PET bottles, showing wastage in the range of 0.40% to 1.60%, within the industry average submitted (para 7). The lower authority failed to consider these reconciliations or to provide any cogent basis for assuming 100% conversion. In the absence of such basis, and in view of precedents recognising process loss as an explanation for shortages, the Tribunal held that the demand founded on the department's pure arithmetic assumption is unsustainable (paras 7, 9). [Paras 6, 7, 9]

Demand based on 100% conversion without accounting for established manufacturing wastage is unsupported and set aside.

Clandestine removal and burden of proof - reliance on comparative documentary figures (ER 6 v. Form 3CD) - Whether the department discharged the onus to establish clandestine manufacture and removal merely by pointing to differences in documentary figures. - HELD THAT: - The Tribunal observed that the allegation of clandestine removal was founded only on departmental calculations comparing ER 6 and Form 3CD, without independent or corroborative evidence (para 6). The adjudicating authority did not investigate or produce evidence such as proof of extra production, unaccounted sales, buyer/ transporter statements, or other corroboration. Consistent Tribunal precedent was relied upon to emphasise that clandestine clearance is a serious charge and the burden to prove it lies on the Revenue; absent corroborative evidence, such a charge cannot be sustained (paras 10-11). Applying this principle, the Tribunal held that mere differences in figures, unexplained by the department and explained by appellant as process loss, do not satisfy the burden required to sustain a clandestine removal finding. [Paras 6, 10, 11]

Allegation of clandestine removal was not proved by the Revenue; demand based on that allegation cannot be sustained.

Invocation of extended period of limitation - Whether issuance of the show cause notice in July 2018 invoking extended limitation for alleged shortages (spot memo dated August 2014) was justified. - HELD THAT: - The record shows the spot memo was issued in August 2014 while the show cause notice was issued in July 2018. The department did not furnish any explanation for the delay in proceedings or for invoking the extended period of limitation (para 12). In absence of such justification, the Tribunal concluded that invocation of the extended period was not justified and the demand could not be sustained on that ground. [Paras 12]

Invocation of extended period of limitation was unjustified; demand is time-barred insofar as dependent on such invocation.

Final Conclusion: The appeal is allowed: the excise duty demand founded on a 100% conversion assumption and on unexplained differences between ER 6 and Form 3CD is set aside for lack of cogent evidence and failure to consider manufacturing wastage; the allegation of clandestine removal was not proved by the Revenue; invocation of extended limitation is not justified; consequential interest and penalty are also quashed.

Admissibility and evidentiary value of third party records - Requirement of corroborative or clinching evidence to establish clandestine manufacture and removal - Burden on the revenue to produce tangible evidence of clandestine removals - Insufficiency of mere appearance in seized documents to fasten liability

Admissibility and evidentiary value of third party records - Insufficiency of mere appearance in seized documents to fasten liability - Whether findings of clandestine manufacture/removal and consequent demand could be sustained against the appellant based solely on third party documents seized from another party (M/s. PIL) in absence of independent corroborative evidence. - HELD THAT: - The Tribunal examined whether documents recovered from M/s. PIL could, by themselves, support a finding of clandestine manufacture and removal against the appellant. Reliance was placed on earlier decisions holding that third party records are not sufficient to uphold such serious allegations unless supported by clinching or corroborative evidence. The judgment notes absence of any search, seizure or stock verification at the appellant's premises, no evidence of transportation of alleged consignments by the appellant, and no material showing usage of raw materials, excess production, dispatch particulars, receipt of finished goods by buyers, power consumption anomalies or realisation of sale proceeds. In those factual circumstances the documents seized from M/s. PIL could not be held to establish the appellant's liability. The Tribunal thus followed the established principle that the burden lies on the revenue to produce tangible corroboration before confirming a demand for clandestine removals. [Paras 6, 7, 8]

Findings of clandestine manufacture/removal and the recovery confirmed against the appellant cannot be sustained where the case rests solely on third party records without corroborative evidence; consequently the order confirming the recovery is set aside.

Final Conclusion: The appeal is allowed; the impugned order confirming recovery based on third party documents is set aside for want of corroborative evidence and the appellant is entitled to consequential relief.

Refund of cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 - refund of unutilised AED (T&TA) - no requirement of one to one correlation between inputs and final products for refund - proportionate reduction of refund on basis of export turnover - finality of Tribunal order and scope of remand limited to arithmetic computation - verifiability and quantification of eligible refund claim - CBEC circulars and instructions clarifying refund entitlement

Refund of cenvat credit under Rule 5 of Cenvat Credit Rules, 2004 - refund of unutilised AED (T&TA) - CBEC circulars and instructions clarifying refund entitlement - Entitlement to refund of the claimed unutilised AED (T&TA) under Rule 5 of the Cenvat Credit Rules, 2004. - HELD THAT: - The Tribunal's earlier Final Order held the appellant was in principle eligible for refund under Rule 5 and remanded the matter to determine the eligible amount. Rule 5 permits refund where adjustment is not possible; Board instructions and circulars recognised refund of unutilised AED (T&TA). There is no statutory restriction in Rule 5 or in the cited Board clarifications limiting refund by reference to a proportionate export turnover calculation or forbidding refund merely because some finished goods cleared for home consumption were manufactured from inputs on which AED had earlier been paid. The adjudicatory reduction of the refund by applying a proportionate calculation (thereby disallowing part of the claimed unutilised credit) was contrary to the legal position under Rule 5 and the Board clarifications relied upon by the appellant. [Paras 10]

The appellant's claim for refund under Rule 5 could not be curtailed by the proportionate reduction applied by the Revenue; the order reducing the refund is set aside and the order in original granting the claimed refund is restored.

Finality of Tribunal order and scope of remand limited to arithmetic computation - verifiability and quantification of eligible refund claim - Whether the Revenue was entitled to re open or re decide the matter beyond the limited scope of remand made by the Tribunal and to thereby file a further appeal leading to proportionate disallowance. - HELD THAT: - The Tribunal's Final Order determined eligibility in principle and remitted the matter to the adjudicating authority only for computation of the eligible amount. No appeal was filed by the Revenue against that Final Order. The Revenue's subsequent step before the Commissioner (Appeals) seeking to reduce the refund on a proportionate basis exceeded the scope permitted by the Tribunal's remand. The impugned appellate order therefore transgressed the finality of the Tribunal's direction, because the matter on legal entitlement had attained finality and the remand was confined to arithmetic verification/quantification. [Paras 4, 10]

The impugned order of the Commissioner (Appeals) is invalid for not respecting the Final Order's finality and limited remand; the adjudicating authority's original sanction is restored and the appellant is entitled to consequential benefits.

Final Conclusion: Appeal allowed. The order of the Commissioner (Appeals) reducing the refund by a proportionate computation is set aside; the order in original sanctioning the refund (as earlier determined within the Tribunal's remand) is restored. Consequential benefits allowed in accordance with law.

Legitimacy of cenvat credit of Additional Excise Duty (AED) - utilisation of AED credit for payment of other excise duties - effect of amendment to Cenvat Credit Rules (2003) on AED credit - restoration of AED credit where duty liability was discharged using AED credit - distinction between restoration of credit and refund of excess duty

Legitimacy of cenvat credit of Additional Excise Duty (AED) - utilisation of AED credit for payment of other excise duties - effect of amendment to Cenvat Credit Rules (2003) on AED credit - restoration of AED credit where duty liability was discharged using AED credit - distinction between restoration of credit and refund of excess duty - Whether the cenvat credit of AED wrongly treated as inadmissible should be restored where the credit was legitimately earned and the duty liability on final products was discharged using AED credit following statutory changes - HELD THAT: - The Tribunal found the issue squarely covered by the decision of the Hon'ble Bombay High Court in the appellants' own case, which upheld the CESTAT's view that the impugned AED credit had been legitimately earned on procurement of inputs on payment of duty and was used for payment of duty following the amendment of the Cenvat Credit Rules in 2003. The High Court observed that the debits earlier treated as payment of duty were of no consequence where the assessee had discharged the duty liability using AED credit, and accordingly the credit needed restoration. The Tribunal noted the CESTAT's distinction of the Larger Bench decision in BDH Industries as relating to refund of excess duty and procedural aspects of refund, which did not apply to restoration of AED credits taken prior to 1-4-2000. In view of the High Court's ruling and the reasoning that the credit was validly taken under duty-paying documents and was restored by earlier orders, the impugned order disallowing and recovering the AED credit was without merit and was set aside. [Paras 4, 5]

Impugned order set aside; appeal allowed.

Final Conclusion: The Tribunal allowed the appeal, set aside the Commissioner's order disallowing, recovering and levying penalty on the AED cenvat credit, and restored the position in view of the decision of the Hon'ble Bombay High Court that the AED credit legitimately earned and used to discharge duty following the 2003 amendment deserved restoration.

Manufacturer in own right - exemption under Notification no. 30/2004 - CE dated 09-07-2004 - finality of order - department cannot take a contrary stand once an order attains finality

Manufacturer in own right - exemption under Notification no. 30/2004 - CE dated 09-07-2004 - The Nylon Fishnet Twine produced by third party job workers is manufacture undertaken by those job workers in their own right and not manufacture by the appellant for the purpose of imposing Central Excise duty. - HELD THAT: - The Tribunal accepted the factual and legal position that the job workers carried out the twisting/ conversion operations at their premises, did not manufacture the input Yarn, did not avail CENVAT credit and cleared the twine availing the exemption in Serial No. 6 of Notification dated 09.07.2004. On these facts the job workers are the real manufacturers of the Twine and the liability to pay duty cannot be fastened on the appellant on the premise that the activity should be treated as appellant's manufacture. The Assistant Commissioner's contemporaneous conclusion for a subsequent period, recorded after examining the same issue in the appellant's own case, supports this finding and demonstrates that the job workers were rightly held to be manufacturers entitled to the exemption. [Paras 8, 22, 27]

Demand cannot be sustained against the appellant on the ground that the job workers' activity amounts to manufacture by the appellant.

Finality of order - department cannot take a contrary stand once an order attains finality - The Department is precluded from taking a contrary stand in the present appeal where, in the appellant's own case for a subsequent period, an Assistant Commissioner's order holding the appellant not to be the manufacturer has attained finality. - HELD THAT: - The Tribunal held that both the Commissioner and the Assistant Commissioner adjudicated on the same issue. Where the Department allowed the Assistant Commissioner's order (relating to subsequent periods) to attain finality by not preferring an appeal, it cannot be permitted to adopt a contrary position in other pending proceedings. The Tribunal relied on binding principle and earlier decisions that acceptance by the revenue of an earlier conclusion in the assessee's own case operates as a bar to inconsistent contention later. Given the Assistant Commissioner's order dated 31.05.2018 attained finality, the Commissioner's earlier confirmation of demand cannot be sustained. [Paras 13, 14, 15, 16, 17]

The Commissioner's order confirming demand is set aside because the revenue cannot take a contrary view after an order in the assessee's own case has attained finality.

Final Conclusion: The appeal is allowed: the demand confirmed by the Commissioner dated 18.05.2016 is set aside because the job workers were correctly held to be manufacturers entitled to exemption and the Department, having allowed a contrary order in the appellant's own case to attain finality, cannot adopt an inconsistent position.

Refund of duty deposited under protest - deposit versus appropriation - requirement of assessment or show cause notice for appropriation - quasi judicial recovery under Section 11A - self assessment and consequent refund process

Refund of duty deposited under protest - deposit versus appropriation - requirement of assessment or show cause notice for appropriation - quasi judicial recovery under Section 11A - Whether amounts reversed/paid by the assessee during audit under protest can be appropriated by Revenue without an assessment or show cause notice under Section 11A, and whether the refund claim is maintainable. - HELD THAT: - The Tribunal found as an admitted fact that although the audit raised objections and the assessee reversed the amounts and submitted a protest letter, no show cause notice under Section 11A was issued seeking appropriation of the amounts. In that factual matrix the reversed amounts can only be treated as a deposit; appropriation requires an assessment/demand or issuance of a show cause notice under Section 11A. Decisions of the Supreme Court cited by the Revenue concerning refunds flowing from an assessment (including self assessment) and the restriction on sanctioning refunds contrary to an assessment were held not to be applicable because here there was no assessment or adjudication demanding the differential duty. The Tribunal noted that recovery of short paid duty must follow the quasi judicial procedure under Section 11A and that payment made in consequence of audit or preventive checks, without subsequent show cause and appropriation, remains a deposit entitling the depositor to claim refund. The Tribunal relied on the principle, as earlier applied by the High Court and upheld by the Supreme Court in similar facts, that absent assessment and demand there is no justification to retain amounts deposited simply on the Revenue's claim of voluntary payment. Applying these principles to the admitted facts, the Tribunal concluded the respondent was entitled to the refund of amounts reversed during the audit. [Paras 6, 7, 8, 9]

Amounts reversed by the respondent during audit, made under protest and without any show cause notice or assessment under Section 11A, are deposits and are refundable; the impugned order allowing the refund is upheld.

Final Conclusion: The appeal is dismissed; the Tribunal affirms the Commissioner (Appeals) order allowing the refund of amounts reversed by the assessee during audit (for the period October 2008 to April 2012) as those amounts were deposits not appropriated by any assessment or show cause under Section 11A.

Limitation for refund under Section 11B of the Central Excise Act - Relevant date for filing refund where Department/Revenue files an appeal - Payment under protest - Coercive recovery by adjustment of sanctioned refund - Proviso to Section 11B excluding time bar for payments made under protest - Entitlement to refund where adjudicated demand is set aside by Tribunal

Limitation for refund under Section 11B of the Central Excise Act - Relevant date for filing refund where Department/Revenue files an appeal - Entitlement to refund where adjudicated demand is set aside by Tribunal - Refund claim filed on 24.11.2017 is not barred by time under Section 11B because the relevant date is the date of the High Court's dismissal of Revenue's appeal and not the earlier Tribunal order in favour of the appellant. - HELD THAT: - The Tribunal held that Section 11B prescribes a one-year period from the relevant date for filing refund applications and that sub-clause (5)(B) defines the relevant date. Although the CESTAT set aside the demand on 10.05.2016, the Revenue filed an appeal before the High Court; therefore the relevant date for the assessee to claim refund was the date on which the High Court dismissed the Revenue's appeal (06.09.2017). The refund application filed on 24.11.2017 was thus within one year from the High Court decision and not time-barred. The authority below erred in treating the CESTAT order as the relevant date where the Department had instituted further appeal to the High Court. [Paras 9]

Refund claim held not barred by time; relevant date is High Court's decision dismissing Revenue's appeal (06.09.2017).

Payment under protest - Coercive recovery by adjustment of sanctioned refund - Proviso to Section 11B excluding time bar for payments made under protest - Amount adjusted by the Department towards the confirmed demand while the appellant's appeal was pending is to be treated as payment under protest; proviso to Section 11B therefore renders the one-year limitation inapplicable to that payment. - HELD THAT: - The Tribunal found that the Department ordered adjustment of the sanctioned refund towards the confirmed demand during the pendency of the appellant's appeal before CESTAT. Such adjustment, made pursuant to departmental direction while the appeal was pending and later decided in favour of the appellant, amounted to coercive recovery and cannot be characterised as a voluntary payment. Reliance was placed on precedent recognising payments made under coercion as payments under protest. The proviso to Section 11B excludes application of the one-year limitation where duty (or interest) has been paid under protest; accordingly the invoking of time-bar by the authorities below was unjustified. [Paras 10]

The adjusted payment is held to be payment under protest and the one-year limitation under Section 11B does not apply to bar the refund claim.

Final Conclusion: The impugned order is set aside; the appeal is allowed. The refund claim succeeds both because the relevant date for limitation was the High Court's dismissal of Revenue's appeal and because the departmental adjustment constituted a payment under protest exempting the claim from the one year bar under Section 11B.

Excisability of electrical energy generated from bagasse - applicability of Rule 6(3)(i) of the Cenvat Credit Rules, 2004 where electricity is generated from by products without use of cenvatable inputs - requirement of reversal/payment under Cenvat rules where exempted and dutiable final products are manufactured from common inputs - penalty and interest under the Cenvat Credit Rules and Central Excise Act for non payment of amounts held payable under Rule 6

Excisability of electrical energy generated from bagasse - applicability of Rule 6(3)(i) of the Cenvat Credit Rules, 2004 where electricity is generated from by products without use of cenvatable inputs - requirement of reversal/payment under Cenvat rules where exempted and dutiable final products are manufactured from common inputs - Whether the appellant was liable to pay an amount equivalent to 6% of the value of electricity sold under Rule 6(3)(i) of the Cenvat Credit Rules, 2004, in respect of electricity generated from bagasse during January to March 2016 - HELD THAT: - The Tribunal applied earlier reasoning in the appellant's own case and authoritative High Court and Supreme Court precedents which establish that bagasse is a waste/by product emerging in the process of sugar manufacture and that electrical energy generated from bagasse (where no cenvatable inputs or input services are used in generation) does not qualify as excisable or as exempted excisable goods for the purposes of the Cenvat regime. Rule 6 (and its pari materia predecessor) applies only where a manufacturer uses common inputs in the manufacture of both dutiable final products and excisable exempted final products and has availed Cenvat credit on such inputs; that condition is absent where electricity arises solely from bagasse without use of cenvatable inputs. On these determinative grounds the condition precedent for invoking Rule 6(3)(i) is not satisfied and Rule 6 does not come into play. [Paras 4, 5]

The demand under Rule 6(3)(i) for the period January to March 2016 was not sustainable and was set aside.

Penalty and interest under the Cenvat Credit Rules and Central Excise Act for non payment of amounts held payable under Rule 6 - Whether interest and penalties confirmed by the lower authorities consequential to the Rule 6 demand should be sustained - HELD THAT: - As the Tribunal held the underlying demand under Rule 6(3)(i) to be without application, the consequential demands of interest and the imposition of penalties under the Cenvat Credit Rules and Central Excise Act could not be sustained. No separate infirmity was shown in the record to uphold interest or penalty once the principal demand was set aside; the Tribunal therefore followed its prior order and allowed the appeal. [Paras 4, 5]

Confirmed interest and penalties consequential to the Rule 6 demand were quashed in tandem with setting aside the principal demand.

Final Conclusion: Following earlier tribunal reasoning and applicable precedents, the appeal is allowed: the demand for payment under Rule 6(3)(i) in respect of electricity generated from bagasse for January to March 2016, and the consequential interest and penalties, are set aside.

Compounding of offences - inherent powers under Section 482 Cr.P.C. - overriding effect of Section 147 of the Negotiable Instruments Act - compensatory object of Section 138 of the Negotiable Instruments Act - judicial guidelines for delayed compounding (Damodar S. Prabhu) - acquittal on compounding

Inherent powers under Section 482 Cr.P.C. - compounding of offences - acquittal on compounding - High Court's power to set aside its earlier confirmation of conviction by invoking inherent jurisdiction under Section 482 Cr.P.C. in view of a subsequent compromise between the parties. - HELD THAT: - The Court held that inherent powers under Section 482 Cr.P.C. may be exercised even after dismissal of a revision petition where substantial justice, prevention of miscarriage or abuse of process requires it. Though ordinarily such powers are to be exercised sparingly and alternative statutory remedies weigh against invocation, special circumstances - including a genuine out of court compromise in a matter where the statute expressly makes the offence compoundable - can justify interference. The Court noted the twin objectives guiding exercise of Section 482 (prevent abuse of process and secure ends of justice) and accepted that, in the peculiar facts before it, relegating parties to further appellate remedies would not serve the ends of justice. Therefore the conviction and sentence confirmed earlier were quashed and the petitioner treated as acquitted on account of compounding in terms of the settlement, with a modest costs order to the State. [Paras 17, 18, 20, 36, 40]

Petition under Section 482 Cr.P.C. allowed; earlier conviction and sentence under Section 138 N.I. Act quashed and petitioner acquitted on account of compounding in terms of the compromise, subject to payment of costs.

Overriding effect of Section 147 of the Negotiable Instruments Act - compensatory object of Section 138 of the Negotiable Instruments Act - judicial guidelines for delayed compounding (Damodar S. Prabhu) - Whether offences under Section 138 N.I. Act can be compounded at any stage and the role of Section 147 N.I. Act in relation to Section 320 Cr.P.C., including application of compensatory emphasis and guidelines for compounding. - HELD THAT: - The Court observed that Section 147 of the Negotiable Instruments Act, beginning with a non obstante clause, makes offences under the Act compoundable and thereby permits compromise irrespective of conflicting procedural provisions in the Cr.P.C. The object of Section 138 is primarily compensatory; compounding is consistent with that object and may be allowed at any stage, even after dismissal of revision, where the compromise is genuine and justice so requires. The Court accepted that the procedural scheme of Section 320 Cr.P.C. cannot be slavishly applied to Section 147, but endorsed the utility of the guidelines in Damodar S. Prabhu for framing conditions (including costs) when compounding is permitted belatedly. Applying these principles, and having regard to the recorded compromise, the Court permitted compounding and applied an appropriate costs direction. [Paras 31, 32, 34, 35, 39]

Offence under Section 138 N.I. Act is compoundable at any stage in view of Section 147; courts may permit compounding consistent with the compensatory object of the provision and having regard to established guidelines for late compounding.

Final Conclusion: The High Court, exercising its inherent jurisdiction under Section 482 Cr.P.C., allowed the petition and quashed the conviction and sentence under Section 138 N.I. Act on account of a genuine compromise between the parties; the Court held that Section 147 N.I. Act permits compounding at any stage and that courts may, applying established judicial guidelines, accept belated compromises subject to appropriate conditions and costs.

Quashing of criminal proceedings under Section 482 Cr.P.C. - Maintainability of successive applications under Section 482 Cr.P.C. - Non-bailable warrants and process under Sections 82 and 83 Cr.P.C. - Compoundability of offence under Section 138 N.I. Act - Settlement pursuant to Damodar S. Prabhu principle

Maintainability of successive applications under Section 482 Cr.P.C. - Quashing of criminal proceedings under Section 482 Cr.P.C. - Whether the present (third) application under Section 482 Cr.P.C. challenging proceedings in Complaint Case No.2261 of 2017 is maintainable and liable to be entertained. - HELD THAT: - The Court recorded that the applicants had earlier filed two criminal miscellaneous applications under Section 482 Cr.P.C.; the first (Cr. M.A. No.24041 of 2019) challenging the summoning order and the entire proceedings was dismissed on 01.07.2019 on merits, and the second (Cr. M.A. No.7786 of 2020) was dismissed on 25.02.2020 as not maintainable. There being no change in circumstances and no challenge having been made to subsequent orders of issuance of non-bailable warrants or to the later process under Sections 82 and 83 Cr.P.C., the Court found no ground to entertain a further 482 petition. The reasoning notes that prima facie offences were made out earlier and that no infirmity in the impugned order of 08/11.01.2021 was demonstrated by the applicants. In those circumstances the present application was held to lack merit.

Application under Section 482 Cr.P.C. dismissed as not maintainable and devoid of merit.

Compoundability of offence under Section 138 N.I. Act - Settlement pursuant to Damodar S. Prabhu principle - Whether the applicants may still settle the dispute or make payment despite dismissal of the present 482 application. - HELD THAT: - The Court observed that proceedings under Section 138 N.I. Act are compoundable at any stage and noted counsel's statement that the applicants were ready to settle. The Court referred to the law governing settlement (Damodar S. Prabhu) and recorded that the applicants remain free to settle the matter and deposit the amount payable before the court below at any stage; this observation formed part of the Court's disposal while refusing to exercise extraordinary jurisdiction to quash the proceedings.

Applicants are at liberty to settle the dispute and deposit the amount before the trial court; dismissal of the 482 petition does not preclude a lawful settlement or payment.

Final Conclusion: The application under Section 482 Cr.P.C. is dismissed as successive and lacking merit; no infirmity was shown in the impugned order issuing non-bailable warrants and process, and the applicants remain free to settle the Section 138 N.I. Act dispute or deposit the amount before the trial court in accordance with law.