TaxTMI Updates e-Newsletter
Aug 24,2017

Deduction under the Income Tax Act - mercantile system of accounting - statutory versus contractual liability - year of assessment for claiming deduction - remand to the Tribunal for fresh adjudication

Statutory versus contractual liability - deduction under the Income Tax Act - year of assessment for claiming deduction - mercantile system of accounting - Whether the fixation of lease rent was statutory or contractual in nature and, depending thereon, in which assessment year the assessee could legitimately claim deduction of the accumulated lease rent - HELD THAT: - The Supreme Court held that the question whether fixation of rent and its payment, recovery etc. is statutory or contractual is a mixed question of law and fact which was not decided by the authorities below and could not be properly determined by this Court in the first instance for want of necessary factual material. The nature of the liability bears on the timing of the deduction under the Income Tax Act, particularly in the context of an assessee following the mercantile system of accounting, and therefore requires fresh adjudication. Because the contention that fixation under the Kerala Land Assignment Act and the Rules makes the liability statutory was first pressed before this Court and was not met by the respondent below, the Court found it appropriate to remit the matter to the Tribunal so that documentary evidence and factual material may be placed and the issue decided on merits. The Court refrained from expressing any opinion on the merits and left the applicability and relevancy of the statutory provisions and the accounting treatment to the Tribunal for determination in accordance with law. [Paras 13, 14, 15, 16]

Remanded to the Income Tax Appellate Tribunal for fresh adjudication on the nature of fixation of rent and, accordingly, the proper assessment year for claiming the deduction; parties permitted to file relevant documents.

Final Conclusion: The appeal succeeds: the impugned High Court and Tribunal orders are set aside and the matter is remanded to the Income Tax Appellate Tribunal, Cochin Bench, for fresh adjudication on the nature of the lease-rent fixation and its effect on the year in which the deduction may be claimed, with liberty to the parties to place relevant documents; the Tribunal to decide the appeal within six months.

Deeming of unexplained expenditure - Discretionary power under Section 69C - Deemed income not mandatory despite absence of explanation - Judicial exercise of discretion in tax assessments - Effect of death of proprietor on evidentiary burden

Discretionary power under Section 69C - Deeming of unexplained expenditure - Deemed income not mandatory despite absence of explanation - Whether the Assessing Officer was justified in adding the unexplained purchases as income under Section 69C where no explanation was filed - HELD THAT: - Section 69C contemplates two situations: no explanation offered, or explanation offered is unsatisfactory; however the provision uses the word "may", conferring a discretion on the Assessing Officer whether to treat unexplained expenditure as income. The Court relied on the settled principle that pari materia provisions are discretionary where "may" is used, and that the Assessing Officer must exercise this discretion judicially. In the present case the assessee did not furnish an explanation because he died after service of the notice and before the return date; the legal heirs stated they had no knowledge of the deceased's business and could not explain the purchases. Given these facts, the circumstances justified a favourable exercise of discretion. The Tribunal and the CIT(A) confined the addition to a nominal percentage based on past profit records; the High Court held that such exercise of discretion was permissible and not vitiated by law.

The Assessing Officer's power under Section 69C is discretionary and, on the facts of the assessee's death and the heirs' inability to explain, the discretion was properly exercised in not making the full addition.

Death of proprietor and evidentiary incapacity of heirs - Judicial exercise of discretion in tax assessments - Whether the Tribunal erred in affirming the reduction of the addition to 5% in view of absence of explanation - HELD THAT: - The factual matrix - death of the assessee before the date fixed for explanation and the heirs' lack of knowledge of the business - deprived the assessee of opportunity to explain. The legislative discretion under Section 69C exists precisely to accommodate such contingencies. The Court found no illegality in the Tribunal's and CIT(A)'s approach of confining the addition to a limited percentage based on past profit margins, holding that the discretion was exercised on sound judicial principles and therefore required no interference.

The Tribunal did not commit an error of law in affirming the limited addition; the reduction to 5% was a permissible exercise of discretion in the circumstances.

Final Conclusion: The appeal is dismissed. The Court holds that Section 69C confers a discretionary power to treat unexplained expenditure as income; applying that discretion to the facts (assessee's death and heirs' inability to explain) the Tribunal and CIT(A) acted lawfully in limiting the addition, and their orders are affirmed.

Disallowance under Explanation to Section 37(1) - reopening of assessment under section 148 - onus and proof required to establish illicit payments/kickbacks

Disallowance under Explanation to Section 37(1) - onus and proof required to establish illicit payments/kickbacks - Whether the commission payments made to M/s Galala & Company attracted the Explanation to Section 37(1) as expenditure incurred for an offence or prohibited by law and were therefore not deductible. - HELD THAT: - The Tribunal found on the material before it that the assessee had engaged M/s Galala pursuant to an agency agreement, payments were made through the Reserve Bank of India after obtaining required approvals, and the assessee was not shown to have participated in or effected any kickbacks or illicit payments as described in the Volcker Committee Report. The Tribunal held that, even if the Report's general findings about illicit levies were accepted, there was no material connecting the assessee to payments to the Iraq Government or to any unlawful scheme; accordingly the essential ingredients of the Explanation to Section 37(1) - that the expenditure was incurred for an offence or was prohibited by law - were not satisfied. The High Court, on review of the record, found no error of law apparent on the face of the record in this factual conclusion and declined to interfere with the Tribunal's reversal of the Assessing Officer and the first appellate authority. [Paras 11, 12, 13, 14, 15]

The commission payments were not disallowable under the Explanation to Section 37(1) on the facts; the Tribunal's finding to that effect is sustained.

Reopening of assessment under section 148 - Whether reassessment proceedings initiated by issuing notice under Section 148, predicated on the Volcker Committee Report, were impermissible or vitiated such that the reassessment must be set aside. - HELD THAT: - The record shows the original assessment was completed and a notice under Section 148 was issued after the Volcker Committee Report came to the department's notice. The Assessing Officer proceeded on the premise that the Report constituted a ground for reopening and relied upon the principle that a mistake of fact or law not previously examined with due application of mind may fall within Section 147. The Tribunal considered the reopening in context of the merits and concluded that, on the available material, the assessee was not shown to have committed the illicit acts alleged; the High Court confined itself to examining whether there was any error apparent on the face of the record in the Tribunal's factual conclusion and found none. The appeals did not raise any substantial question of law warranting interference with the Tribunal's disposal of the reassessment. [Paras 5, 10, 15]

The reassessment initiated under Section 148, insofar as it led to the impugned disallowance, does not sustain the Revenue's challenge; the Tribunal's disposal stands.

Final Conclusion: The Revenue's appeals are dismissed; the Tribunal's factual findings that the assessee's commission payments did not attract the Explanation to Section 37(1) are upheld and no substantial question of law is made out.

Summary order. The appeal is admitted and stands admitted on the substantial questions of law as listed; the Tribunal record is to be summoned and a complete paper book prepared; matter to be heard along with Income Tax Appeal No. 1659 of 2014 and connected appeals on the Board of 9th August 2017.

Reopening of assessment - reasons recorded - change of opinion - failure to disclose fully and truly all material facts - Double Tax Avoidance Agreement benefit - Tax Residency Certificate - Section 148 of the Income-tax Act, 1961

Reopening of assessment - reasons recorded - change of opinion - failure to disclose fully and truly all material facts - Double Tax Avoidance Agreement benefit - Tax Residency Certificate - Validity of notices under Section 148 and the reopening of assessment for Assessment Year 2005-06 - HELD THAT: - The court examined the reasons recorded for reopening the assessment and found that the only rationale set out by the Assessing Officer was non-production of a Tax Residency Certificate or other residency particulars after the original assessment. The petitioner had, in his original return and during scrutiny, expressly claimed entitlement to the DTAA benefit with UAE and had produced passport evidence and responses to queries which led to the completion of assessment under section 143(3) without any addition. The requirement to produce a Tax Residency Certificate and the amended six-month residency criterion post-dated the relevant assessment year and could not form the basis for reopening. Established principle requires that the validity of a notice under section 148 must be tested solely on the reasons recorded; reasons which merely amount to a change of opinion, without specifying any material fact that was not fully and truly disclosed at the time of the original assessment, do not satisfy section 147/148. Applying these principles to the record, the court concluded that the recorded reasons did not identify any omission of material fact warranting reassessment and that the reassessment proceeded on a mere change of opinion. [Paras 12, 13, 14]

The reopening was invalid because the reasons recorded did not disclose nondisclosure of any material fact and amounted to a change of opinion; hence the notices and consequential order could not be sustained.

Final Conclusion: The notices dated 28th March, 2012 and 29th March, 2012 and the order dated 27th September, 2013 are quashed and set aside; rule made absolute; no costs.

Condonation of delay - re-filing of appeal - inordinate delay - dismissal of appeal for delay - exemption application - impact of court fees amendment on filing - practice directions for filing soft copies - departmental duty to monitor filing of appeals

Exemption application - Application for exemption (CM APPL 22151/2017) allowed subject to all just exceptions. - HELD THAT: - The Court allowed the exemption application without detailed qualification in the order, recording allowance subject to all just exceptions. No substantive legal controversy on the scope or basis of the exemption was considered in the reasons given; the allowance was recorded as the operative order.

Exemption application allowed subject to all just exceptions.

Condonation of delay - re-filing of appeal - inordinate delay - impact of court fees amendment on filing - practice directions for filing soft copies - departmental duty to monitor filing of appeals - dismissal of appeal for delay - Application for condonation of delay of 887 days in re-filing the appeal (CM APPL 22152/2017) dismissed; appeal dismissed for failure to re-file within a reasonable time. - HELD THAT: - The Court found the delay of 887 days to be inordinate and unacceptable. It rejected the three standard excuses advanced by the Department: (a) alleged budgetary constraints caused by the Court Fees Delhi Amendment Act, 2012 - found unconvincing because the amendment predates the initial filing; (b) reliance on practice directions regarding filing of soft copies - held insufficient as advance notice was given and the Registry provided scanning facilities to minimise inconvenience; and (c) change in the panel of standing counsel - not a justification for a delay of over two years. The Court emphasised that the Department maintains a High Court cell under a Deputy CIT responsible for tracking appeals and ensuring timely re-filing, and that in the circumstances it was not plausible that no one followed up for such an extended period. For these reasons the condonation application failed and the appeal could not be entertained.

Application for condonation of delay dismissed; appeal dismissed for non-re-filing within a reasonable time.

Final Conclusion: The exemption application was allowed subject to all just exceptions; the application for condonation of an 887-day delay in re-filing the appeal was dismissed after rejecting the Department's three-fold excuses, and consequently the appeal itself was dismissed.

Condonation of delay - re-filing of appeal - duty of departmental oversight of litigation and filing - e-filing practice directions and transitional difficulties

Exemption from filing fees / procedural exemption - Application for exemption was allowed - HELD THAT: - The Court allowed the exemption application (CM 21285/2017) subject to all just exceptions. No further substantive conditions or legal controversy concerning the entitlement to exemption was recorded; the order simply grants the exemption as prayed. [Paras 1]

Exemption application allowed subject to all just exceptions.

Condonation of delay - re-filing of appeal - duty of departmental oversight of litigation and filing - e-filing practice directions and transitional difficulties - Application for condonation of delay in re-filing the appeal was dismissed - HELD THAT: - The Court found an inordinate delay of 1145 days in re-filing the appeal and rejected the departmental explanations. The first explanation-change of Standing Counsel and failure of earlier counsel to inform the Department-was rejected because the Department has a dedicated cell in the High Court under a Deputy CIT responsible for tracking filings and timely follow-up. The second explanation-difficulties arising from the Court's practice directions for e-filing-was rejected because those directions were issued after consultation with the bar, with sufficient time for adaptation and with scanning facilities provided at the filing counter. Given these findings, the Court held the proffered grounds insufficient to justify condonation of the extraordinary delay and was not persuaded to extend relief. [Paras 2, 3, 4, 5]

Condonation of delay refused and the re-filed appeal dismissed for inordinate delay.

Final Conclusion: Exemption application allowed subject to just exceptions; application for condonation of delay in re-filing the appeal (delay of 1145 days) dismissed and the appeal therefore dismissed.

Revenue expenditure versus capital expenditure in relation to issue of foreign currency convertible bonds (FCCB) - Tax deduction at source obligation under section 195 read with disallowance under section 40(a)(i) - Application of India-UK and India-US Double Taxation Avoidance Agreements to cross-border service/commission payments - Clause (f) of Explanation 1 to section 115JB vis-a -vis section 14A and Rule 8D - computation of additions for book profit

Revenue expenditure versus capital expenditure in relation to issue of foreign currency convertible bonds (FCCB) - Allowability as revenue expenditure of expenses incurred in connection with issue of FCCB - HELD THAT: - The Tribunal followed coordinate-bench decisions for earlier years and the decision in Prime Focus Ltd., holding that FCCB are akin to borrowings (debt instruments) and, where conversion did not occur in the year so as to confer equity/voting rights, expenses incurred for issue of FCCB are revenue in nature. The Tribunal therefore agreed with the CIT(A) that the Assessing Officer was not justified in treating the FCCB-issue expenses as capital expenditure and disallowing them, and allowed the claim. [Paras 4, 5, 7]

Expenditure incurred in connection with issue of FCCB held to be revenue expenditure and allowable.

Tax deduction at source obligation under section 195 read with disallowance under section 40(a)(i) - Application of India-UK and India-US Double Taxation Avoidance Agreements to cross-border service/commission payments - Disallowance under section 40(a)(i) for failure to deduct TDS on various overseas payments - HELD THAT: - The Tribunal examined payments to (a) UK entities for agency/commission/fronting/trustee fees, (b) US entities for professional/managerial/legal services, and (c) T.T. Forex (reimbursement). For payments to UK companies the Tribunal followed earlier coordinate-bench decisions (including Raymond Ltd.) holding such payments did not constitute income taxable in India under the India UK DTAA and therefore did not attract withholding under section 195; the CIT(A)'s deletion of disallowance was upheld. For payments to US companies the CIT(A)'s finding that the amounts were not taxable in India and hence no withholding was required was upheld, noting AO's mechanical disallowance and absence of contrary material. The CIT(A)'s deletion of disallowance in respect of reimbursement to T.T. Forex was also upheld (following Bombay High Court authority). However, the CIT(A) had confirmed smaller disallowances in some items (paras 13), which remained unaffected by the Tribunal's decision on the deletions upheld. [Paras 15, 16, 17, 18, 19]

Disallowance under section 40(a)(i) deleted in respect of payments to UK and US companies and reimbursement to T.T. Forex; corresponding relief granted to the assessee as recorded.

Clause (f) of Explanation 1 to section 115JB vis-a -vis section 14A and Rule 8D - computation of additions for book profit - Whether amounts disallowed under section 14A read with Rule 8D can be imported into clause (f) of Explanation 1 to section 115JB for computing book profit - HELD THAT: - Relying on the Special Bench decision in Vireet Investment (P) Ltd., the Tribunal held that computation under clause (f) of Explanation 1 to section 115JB must be made without resorting to the computation under section 14A read with Rule 8D; the AO was thus not justified in importing the section 14A figure into clause (f). The CIT(A)'s approach of estimating reasonable expenditure relatable to exempt dividend income at 10% of dividend receipts (arriving at a lower addition) was considered reasonable on the facts and upheld. [Paras 21, 22, 23, 24, 25]

Addition under clause (f) to compute book profit not to be mechanically imported from section 14A/Rule 8D computation; CIT(A)'s estimate (10% of dividend income) upheld.

Tax deduction at source obligation under section 195 read with disallowance under section 40(a)(i) - Treating disallowance in respect of payment to M/s P T Kilpady & Consultants (Indonesian company) - remand to Assessing Officer for fresh examination - HELD THAT: - The Tribunal noted that identical additions for this payee in earlier assessment years had been restored to the file of the AO for fresh examination by coordinate benches. In view of the earlier course and the identical nature of the issue, the Tribunal set aside the CIT(A)'s order on this payment and restored the matter to the AO with directions to examine afresh. [Paras 26]

Matter remitted to the Assessing Officer for fresh examination and determination.

Allowability of professional fees for listing of GDR - characterization - Disallowance of professional fees paid for listing of GDR confirmed - HELD THAT: - The assessee conceded that coordinate benches had decided this issue against it in earlier assessment years. Consistent with those earlier decisions, the Tribunal upheld the CIT(A)'s confirmation of disallowance of the professional fees paid for listing of GDR. [Paras 27]

Disallowance relating to GDR listing professional fees upheld.

Final Conclusion: For A.Y. 2009-10, the Tribunal allowed the assessee's claim that FCCB-issue expenses are revenue in nature; deleted disallowances under section 40(a)(i) in respect of payments to certain UK and US payees and a reimbursement to T.T. Forex; upheld the CIT(A)'s limited confirmations; held that clause (f) to section 115JB must be computed independently of section 14A/Rule 8D and upheld the CIT(A)'s 10% estimate of expenses relatable to exempt dividend income; remitted the specific disallowance relating to payment to M/s P T Kilpady & Consultants to the Assessing Officer for fresh consideration; and upheld disallowance for GDR-listing professional fees.

Mark-to-Market loss on forward foreign exchange contracts - Allowability as business loss under mercantile system and AS-11 - Hedging of foreign exchange risk integral to business - Notional or contingent loss versus accrued legal liability - Consistency of accounting treatment and parity in recognition of gains and losses - Remand for verification of adjustment/set-off in subsequent assessment year

Mark-to-Market loss on forward foreign exchange contracts - Allowability as business loss under mercantile system and AS-11 - Notional or contingent loss versus accrued legal liability - Consistency of accounting treatment and parity in recognition of gains and losses - Whether mark-to-market losses on outstanding forward foreign exchange contracts, revalued at year-end, are allowable as business loss for AY 2009-10. - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that the assessee's year-end revaluation of foreign currency denominated assets and liabilities, including outstanding forward contracts, performed under the mercantile system and in accordance with AS-11, gives rise to business income or loss. The forward contracts were entered in the ordinary course to hedge exchange risk intrinsic to the export/import business and were supported by underlying receivables; a binding legal obligation accrues on entering such contracts and is not rendered notional merely because crystallization (settlement) occurs after the accounting year. The Tribunal relied on consistency of accounting treatment (acceptance of gains on similar revaluation in earlier years), precedents recognizing that liabilities crystallize when determinable with reasonable certainty, and Supreme Court and Special Bench authorities applying these principles. On these foundations the mark-to-market loss was held to be an allowable business loss. [Paras 7, 8, 9]

Mark-to-market loss on outstanding forward foreign exchange contracts, revalued at year-end and accounted for consistently under the mercantile system/AS-11, is allowable as business loss for AY 2009-10.

Remand for verification of adjustment/set-off in subsequent assessment year - Whether the claim for the mark-to-market loss requires verification against actual resultant loss/gain in the subsequent assessment year to prevent double deduction. - HELD THAT: - Although the Tribunal upheld the allowability of the year-end revaluation loss in principle, it observed that the forward contracts expired and the actual loss was ascertained in the next assessment year. To prevent double deduction or failure to tax any resultant gain, the matter was remanded to the Assessing Officer for the limited purpose of verifying that the actual loss on settlement in the subsequent year has first been adjusted against the loss claimed for AY 2009-10 and that any resultant gain has been offered to tax. The assessee was directed to furnish supporting documents; failing which the AO may decide on available material. [Paras 10]

Remanded to the Assessing Officer for limited verification that the actual loss on settlement in the subsequent year has been properly adjusted and there is no double deduction; assessee to furnish requisite documents.

Final Conclusion: The CIT(A)'s allowance of the year end mark to market loss on forward foreign exchange contracts for AY 2009 10 is upheld as an allowable business loss under the mercantile system/AS 11, but the matter is remanded to the Assessing Officer for limited verification that the actual resultant loss in the subsequent year has been adjusted and any resultant gain has been offered to tax; revenue's appeal is disposed of as allowed for statistical purposes in terms of this order.

Failure to consider written submissions and documentary evidence by the appellate authority - remand for fresh consideration to the Assessing Officer - assessment completed under section 144/147 of the Income Tax Act - right to opportunity of being heard and appreciation of documents - setting aside of appellate order for want of adjudication

Failure to consider written submissions and documentary evidence by the appellate authority - remand for fresh consideration to the Assessing Officer - right to opportunity of being heard and appreciation of documents - assessment completed under section 144/147 of the Income Tax Act - Impugned appeals set aside to the file of the Assessing Officer for fresh adjudication after consideration of written submissions and documentary evidence. - HELD THAT: - The Tribunal found that the Commissioner of Income Tax (Appeals) did not fully adjudicate the grounds of appeal and failed to consider the written submissions and accompanying documents filed by the assessee. The Assessing Officer had completed the assessment proceedings under section 144/147 of the Act. In the interest of justice, the Tribunal held that the documents placed before the CIT(A) require examination at the level of the Assessing Officer and therefore the issue is to be remanded for fresh consideration. The Assessing Officer is directed to decide the matter afresh in accordance with law, after giving adequate opportunity of being heard to the assessee and after appreciating the documents contained in the paper book; the assessee is directed to cooperate and not seek unnecessary adjournments. [Paras 6, 7]

Appeals are set aside to the Assessing Officer for de novo consideration after giving the assessee adequate opportunity and appreciating the documentary evidence.

Final Conclusion: All three appeals are allowed for statistical purposes by setting aside the disputed issue to the file of the Assessing Officer for fresh adjudication in accordance with the directions given by the Tribunal.

Exemption under Section 10(26B) for bodies wholly financed by Government established to promote Scheduled Tribes - primary-object test for eligibility under Section 10(26B) - liberal/severable construction of objects for Section 10(26B)

Exemption under Section 10(26B) for bodies wholly financed by Government established to promote Scheduled Tribes - primary-object test for eligibility under Section 10(26B) - liberal/severable construction of objects for Section 10(26B) - Assessee entitled to exemption under Section 10(26B) for assessment years 2011-12 and 2012-13 - HELD THAT: - The Tribunal found that the assessee-company is wholly financed by Government and was established with the prime objective of development and upliftment of the Scheduled Tribe community of the Union Territory of Lakshadweep, as reflected in its Memorandum of Association and in its activities. The Tribunal applied the primary-object test under Section 10(26B) and held that the statute covers both statutory corporations and other bodies wholly financed by Government; the decisive criterion is whether the entity was established for promoting the interests of Scheduled Castes/Tribes. Reliance was placed on authorities endorsing a liberal and severable construction of Clause (26B), and the Tribunal concluded that the assessee's activities - employment of islanders, operation of essential transport, marketing of local produce and acting as nodal agency for scheduled-tribe welfare schemes - directly or indirectly promote the interests of the Scheduled Tribes, making the assessee eligible for the exemption. [Paras 7]

Appeals partly allowed: assessee held entitled to benefit of Section 10(26B) for AYs 2011-12 and 2012-13.

Consequential treatment of additions/disallowances where exemption upheld - Additions/disallowances made by Assessing Officer left unadjudicated as infructuous after grant of exemption - HELD THAT: - Having held that the assessee is entitled to exemption under Section 10(26B), the Tribunal observed that other grounds concerning additions and disallowances raised by the Assessing Officer (delay in bonus/ex-gratia, under-reported interest, depreciation on vehicles, etc.) became infructuous. The Tribunal therefore dismissed those grounds as not adjudicated, without addressing their merits. [Paras 7]

Other additions/disallowances rendered infructuous and dismissed as not adjudicated.

Final Conclusion: The Tribunal allowed the appeals in part by holding that the assessee, a Government financed company established for the development of Lakshadweep Scheduled Tribes, is entitled to exemption under Section 10(26B) for AY 2011 12 and 2012 13; consequential additions and disallowances were left unadjudicated as infructuous and the assessee's stay petitions dismissed.

Admission of additional evidence under Rule 46A - Distinction between manufacturing and assembling for deduction under section 80IB and 80IC - Liability to deduct tax at source under section 194C and disallowance under section 40(a)(ia) - Treatment of excise duty refund as profits for purposes of deduction under section 80IB - Allocation of common/establishment expenses between head office and exempt units

Admission of additional evidence under Rule 46A - Validity of CIT(A)'s admission and reliance on additional evidence filed before it under Rule 46A - HELD THAT: - The Tribunal examined whether the CIT(A) acted contrary to Rule 46A in admitting evidence which was not placed before the Assessing Officer. The CIT(A) directed verification by the AO, allowed time for report, and after scrutinising assessment records observed that many documents were part of the books of account and governmental records and either had been examined or the AO had not negatived them. The CIT(A) found that the AO had conducted extraneous enquiries beyond the scope of Rule 46A and had not effectively rebutted or properly commented on the materials; several statutory registrations and third party certificates supported the assessee's case. On this basis the CIT(A) concluded the additional documents were genuine, relevant and proved manufacturing activity, and therefore properly admitted and relied upon. The Tribunal held that the CIT(A) had exercised appellate powers judiciously and that there was no procedural violation warranting remand. [Paras 9, 19, 20]

CIT(A)'s admission and reliance on the additional evidence under Rule 46A upheld; no remand required.

Distinction between manufacturing and assembling for deduction under section 80IB and 80IC - Whether the Jammu and Kashipur units were engaged in manufacturing (entitling them to deduction under sections 80IB/80IC) or merely assembling/trading - HELD THAT: - The CIT(A) analysed process flow charts, plant and machinery details, stock registers maintained under excise rules, statutory registrations (SSI, excise, sales tax, DIC certificates), third party OEM certificates and documentary evidence of raw material inflow and finished goods dispatch. The CIT(A) found the operations involved multiple manufacturing stages (canopy manufacture, DG set manufacture, AMF panel works, drilling, cutting, acoustic treatment, electrical fitting, testing), that machines served varied manufacturing purposes (not merely lifting/shifting), and that statutory records and excise registration indicated a manufacturing unit. The Tribunal accepted the CIT(A)'s view that there was a transformation of raw materials into a new product with distinct character and function and held that the units were manufacturing units; accordingly deductions under sections 80IB and 80IC were allowable. [Paras 15, 19, 20]

Findings of CIT(A) that the units were engaged in manufacturing and thus entitled to deductions under sections 80IB/80IC are upheld.

Liability to deduct tax at source under section 194C and disallowance under section 40(a)(ia) - Correctness of addition under section 40(a)(ia) for non deduction of TDS where the AO treated payments as subject to section 194C - HELD THAT: - The CIT(A) considered applicability of amended section 194C (effective from 1/6/2007) to the proprietor assessee and the nature of the payments. For the relevant assessment year the CIT(A) held that no liability to deduct tax under section 194C(1) was attracted and therefore the disallowance under section 40(a)(ia) was unwarranted. The Tribunal found no reason to interfere with this conclusion. [Paras 16]

Disallowance under section 40(a)(ia) deleted; CIT(A)'s deletion upheld.

Treatment of excise duty refund as profits for purposes of deduction under section 80IB - Whether excise duty refund received by the units constitutes profits 'derived from the industrial undertaking' for claiming deduction under section 80IB - HELD THAT: - The CIT(A) relied on the reasoning of the Supreme Court in Liberty India to recognise the nexus between manufacturing activity and central excise duty (and its refund), observing that excise duty and its refund arise only in the context of industrial activity. On that basis the CIT(A) directed that excise duty refunds be allowed for purpose of computing profits eligible for deduction under section 80IB. The Tribunal found the CIT(A)'s approach correct and declined to interfere. [Paras 17]

Excise duty refund held to be connected to manufacturing and allowable for deduction computation under section 80IB; CIT(A)'s direction upheld.

Allocation of common/establishment expenses between head office and exempt units - Validity of allocation of certain common/establishment expenses between the head office and the Jammu/Kashipur units - HELD THAT: - The AO had allocated certain establishment and common expenses to reduce profits of exempt units; the CIT(A) examined the records and concluded that the establishment expenses could not be said to belong solely to the head office because the proprietor coordinated, controlled and executed business affairs of all units and there was no material showing the expenses were not used for the Jammu and Kashipur units. The CIT(A)'s finding on allocation was upheld as based on material on record and therefore not interfered with by the Tribunal. [Paras 19]

CIT(A)'s conclusion on allocation of common/establishment expenses upheld; no interference.

Final Conclusion: The appellate authority's (CIT(A)) orders on admission of additional evidence, eligibility for deductions under sections 80IB/80IC (manufacturing status), deletion of the section 40(a)(ia) disallowance, treatment of excise duty refunds for section 80IB, and allocation of common expenses are upheld; Revenue's appeals and the assessee's cross objection are dismissed.

Addition under section 69C - bogus purchases - estimation of net profit on bogus purchases - onus of proof on the assessee - reliance on third party investigation reports and Sales tax list - application of co ordinate bench precedent

Addition under section 69C - bogus purchases - estimation of net profit on bogus purchases - onus of proof on the assessee - reliance on third party investigation reports and Sales tax list - application of co ordinate bench precedent - Validity and quantum of addition made by the AO on account of alleged bogus purchases - HELD THAT: - The AO disallowed purchases on the basis of information from the Investigation Wing and a Sales tax Department list identifying certain suppliers as hawala operators, and made additions under section 69C. The assessee (represented by the legal heir) produced purchase bills, delivery documents, payment records and stock statements and contended that purchases were genuine; it also complained of denial of opportunity to cross examine third parties. The Tribunal noted that while the existence of suppliers could not be satisfactorily proved and the findings of the Sales tax authority and investigation weighed against acceptance of the purchases as fully genuine, the AO had not impugned the correctness of the assessee's books or doubted declared sales. Following a co ordinate bench decision in similar circumstances, the Tribunal held that only the profit element embedded in such purchases should be brought to tax rather than the entire purchase amount. Having regard to the facts of the case and the co ordinate bench precedent, the Tribunal directed the AO to estimate net profit at 12.5% on the alleged bogus purchases and reduce the addition accordingly. [Paras 6, 7]

Addition on account of alleged bogus purchases sustained in principle but restricted to estimation of net profit at 12.5% of such purchases; appeal of the assessee partly allowed and revenue appeal dismissed.

Final Conclusion: The Tribunal upheld the AO's approach to treat the disputed purchases as not fully proved but, following co ordinate bench precedent, directed that only the profit element be taxed and quantified that profit at 12.5% on the alleged bogus purchases for Assessment Year 2009 10.

Fee for technical services - royalty (right for use/right to use computer software) - deduction of tax at source u/s. 194J - deduction of tax at source u/s. 194C - deduction of tax at source u/s. 194H - deduction of tax at source u/s. 194I - assessee in default u/s. 201(1) - interest u/s. 201(1A) - CBDT Circular No. 715 - treatment of hoarding/advertising contracts - Hindustan Coca Cola ratio on payee having paid tax

Fee for technical services - deduction of tax at source u/s. 194J - Whether payments for web hosting/web posting constitute 'fees for technical services' attracting deduction under Section 194J - HELD THAT: - The Tribunal examined the scope of 'fees for technical services' as defined in Explanation 2 to Section 9(1)(vii) and followed the reasoning in Skycell Communication Ltd. that mere collection of a fee for use of a standard facility provided to all users, even if facilitated by technical equipment, does not convert the fee into a 'technical service'. Web hosting was held to be a facility for hosting websites (cloud/server space) provided to customers generally and not a technical/consultancy service to the assessee. Applying that principle and judicial precedents of coordinate benches, the Tribunal concluded that web hosting/web posting charges do not fall within 'fees for technical services' and therefore do not attract TDS under Section 194J. [Paras 11]

Web hosting/web posting charges are not 'fees for technical services'; no obligation to deduct TDS under Section 194J and consequent demands under Sections 201(1)/201(1A) in respect thereof are set aside.

Royalty (right for use/right to use computer software) - deduction of tax at source u/s. 194J - Whether payment for renewal of SAP licence is 'royalty' or 'fees for technical services' attracting Section 194J deduction - HELD THAT: - The Tribunal considered Explanation 4 to Section 9(1)(vi) (clarificatory insertion by Finance Act, 2012) and held that the renewal fee granted only a limited right to use the software (a copy) without transfer of copyright or right to use the copyright; all intellectual property rights remained with the owner. Relying on Infrasoft and on precedents and the temporal scope of the clarification, the Tribunal held that at the time of payment the legal position did not clearly compel treating such licence renewal as 'royalty' attracting 194J. Consequently, the assessee could not be held in default for failing to deduct TDS under Section 194J for those payments. [Paras 13, 14]

Renewal of SAP licence (as paid) is not 'royalty' or 'fees for technical services' for the years in question; no liability to deduct under Section 194J and demands under Sections 201(1)/201(1A) on that score are set aside.

Deduction of tax at source u/s. 194C - CBDT Circular No. 715 - treatment of hoarding/advertising contracts - Whether payments for hoarding/billboard advertising are subject to TDS under Section 194C (advertising/work contract) or Section 194I (rent) - HELD THAT: - The Tribunal accepted the CIT(A)'s reliance on CBDT Circular No. 715 which treats contracts for putting up hoardings as advertising contracts covered by Section 194C; only where the right to the space is taken on rent and thereafter sub let would Section 194I apply. The assessee had not sub let hoarding rights; payments were for display/advertising services. The Tribunal emphasised that CBDT circulars are binding on the department and upheld the CIT(A)'s setting aside of the AO's demand. [Paras 5, 23, 24]

Hoarding/billboard payments are liable to TDS under Section 194C; demands under Sections 201(1)/201(1A) in respect thereof are set aside.

Deduction of tax at source u/s. 194H - commission or brokerage - Whether amounts retained by banks/credit card acquirers for providing credit card sales facility constitute 'commission' attracting TDS under Section 194H - HELD THAT: - The Tribunal agreed with coordinate bench decisions that the amounts retained by banks/credit card companies for facilitating electronic payment are comparable to normal bank charges for providing a facility and do not represent commission/brokerage for acting on behalf of the merchant. There is no principal agent relationship between the merchant and the bank in this service; the bank merely facilitates payment for which it charges fees. On that basis the CIT(A)'s deletion of demands under Section 194H was affirmed. [Paras 3, 19]

Amounts retained by banks/credit card companies for facilitating card sales do not attract TDS under Section 194H; demands under Sections 201(1)/201(1A) on that count are set aside.

Deduction of tax at source u/s. 194C - deduction of tax at source u/s. 194J - Classification of various Annual Maintenance Contracts (AMC) - computer AMC, pest control AMC, AC AMC - for TDS purpose (194C v. 194J) and threshold applicability - HELD THAT: - The Tribunal upheld the CIT(A)'s factual findings: (i) computer AMCs paid by retail dealers were below the Rs.20,000 threshold so no TDS obligation arose; (ii) pest control AMCs are contractual work and not professional/technical services and thus 194C applies; (iii) AC AMCs were covered by composite contracts for supply of spare parts and services and therefore 194C applies. The Tribunal found no successful departmental challenge to these findings and sustained the CIT(A)'s deletions/decisions accordingly. [Paras 4, 21, 22]

Computer, pest control and AC AMC payments (as examined) are subject to Section 194C (or below threshold) and not Section 194J; corresponding demands under Sections 201(1)/201(1A) are set aside.

Professional services - deduction of tax at source u/s. 194J - Hindustan Coca Cola ratio on payee having paid tax - interest u/s. 201(1A) - Whether retainership fees/amounts paid to M/s Makani Creative Pvt. Ltd. are professional fees attracting TDS under Section 194J and consequences where the payee has paid tax - HELD THAT: - On the facts the Tribunal found that Makani provided multiple professional services (shoot production, advertising campaign, media releases) and billed retainership fees; these fall within the definition of 'professional services' under Explanation (A) to Section 194J. Accordingly the assessee was liable to deduct under Section 194J. However, following the CIT(A)'s finding (in line with Hindustan Coca Cola) that the payee had paid tax on amounts received, the assessee was not treated as being principally liable to pay the tax under Section 201(1); nevertheless the assessee remained liable for interest under Section 201(1A) from the date tax was deductible until the date the payee deposited tax. [Paras 6, 7, 53]

Payments to M/s Makani Creative Pvt. Ltd. are professional fees liable to TDS under Section 194J; because the payee paid tax, the assessee is not treated as being in default for the tax amount but remains liable for interest under Section 201(1A) for the period tax was deductible until payment by the payee.

Assessee in default u/s. 201(1) - interest u/s. 201(1A) - Whether interest under Section 201(1A) is to be deleted where the assessing officer's tax demand is deleted by the appellate authority - HELD THAT: - The Tribunal explained that CIT(A) separately directed deletion of interest to ensure that relief is given in full and to avoid office level omission; deletion of interest was not merely consequential but an express direction so that if tax demand is later revived the interest would also revive. The Tribunal found no error in CIT(A)'s specific direction regarding interest. [Paras 25]

CIT(A)'s deletion/direction regarding interest under Section 201(1A) is valid and properly recorded; deletion was not impermissible.

Deduction of tax at source u/s. 194J - deduction of tax at source u/s. 194C - (Remand) Whether certain computer AMC payments for A.Y. 2012 13 are contractual (194C) or technical (194J) and whether corresponding payees have paid tax (Hindustan Coca Cola consequence) - HELD THAT: - The Tribunal found that the CIT(A)'s order on these computer AMC payments was non speaking and could not be conclusively adjudicated on the available record. Relying on CBDT Circular No. 715 distinguishing routine maintenance (including spares) under 194C from technical services under 194J, the Tribunal directed restoration to the AO for fresh adjudication: AO to examine the terms of the AMC (composite supply v. technical services), verify whether payees have included amounts in returns and paid tax (applying Hindustan Coca Cola), and recompute interest under Section 201(1A) if applicable, affording opportunity to assessee to produce evidence. [Paras 49, 50, 51]

Matter remanded to the AO for fresh adjudication on whether the computer AMCs are covered by Section 194C or 194J and for verification of whether payees have paid tax; AO to re compute tax/interest as required and afford hearing.

Interest u/s. 201(1A) - (Remand) Verification of period and computation of interest in respect of payments to M/s Makani Creative Pvt. Ltd. for A.Y. 2012 13 - HELD THAT: - The Tribunal held that the question of correct period and quantum of interest under Section 201(1A) in respect of payments to Makani requires record level verification not before the Tribunal. It therefore restored the matter to the AO to verify facts, compute interest correctly and give the assessee opportunity to be heard; adjustment to be made if the assessee's claim is established. [Paras 54]

Issue of interest computation in respect of Makani payments remanded to AO for verification, recalculation and opportunity to the assessee.

Final Conclusion: Across A.Y. 2009 10 to A.Y. 2011 12 the Tribunal set aside demands where web hosting and SAP licence renewal payments were held not to attract TDS under Section 194J, upheld CIT(A)'s conclusions that credit card charges (bank/acquirer fees) did not attract Section 194H, and that hoarding/advertising and certain AMCs (pest control, composite AC contracts, small value computer AMCs) attract Section 194C. Payments to M/s Makani Creative were held to be professional fees liable to 194J but, insofar as the payee had paid tax, the assessee was not primarily saddled with the tax though interest under Section 201(1A) remains payable until deposit by the payee. For A.Y. 2012 13 issues concerning computer AMC classification and verification of payees' tax payment and interest computations were remanded to the AO for fresh consideration and factual verification.

Disallowance under section 14A read with Rule 8D - Requirement of AO's satisfaction before invoking Rule 8D - Nexus between expenditure and exempt income - Onus on assessee to prove expenditures attributable to taxable income

Disallowance under section 14A read with Rule 8D - Requirement of AO's satisfaction before invoking Rule 8D - Nexus between expenditure and exempt income - Validity of disallowance of expenditure under section 14A read with Rule 8D where the assessee claimed no expenditure was incurred to earn exempt income - HELD THAT: - The Tribunal held that section 14A and the corresponding Rule 8D require the Assessing Officer to test the correctness of an assessee's claim that no expenditure was incurred in relation to exempt income. Where the assessee asserts that expenditures debited to profit and loss account are wholly attributable to professional (taxable) income and maintains separate books of account, the AO must establish a nexus between the claimed expenditures and the exempt income before making a disallowance under Rule 8D. On the facts, the assessee maintained separate books, claimed administrative expenses directly attributable to her profession and did not claim indirect expenditure in relation to exempt income. Except for demat charges which were directly connected to earning the exempt income, there was no material to show a direct nexus between the other expenses and exempt income. Consequently the AO could not invoke section 14A r.w.r. 8D(2) to make adhoc disallowances without establishing such nexus or satisfying himself about the incorrectness of the assessee's claim.

Disallowances made under section 14A r.w.r. Rule 8D deleted except for demat charges of Rs. 574 which were held to be directly in relation to earning exempt income.

Final Conclusion: Both appeals are partly allowed: disallowances under section 14A read with Rule 8D are deleted in the assessment years in question except for demat charges of Rs. 574 which are sustained as directly incurred for earning exempt income.

Jurisdiction of DRI to issue show-cause notice - designation of 'proper officer' under Section 28 - prospective and retrospective conferral of powers on DRI officers - conflicting High Court decisions and stay by the Supreme Court - remand for fresh adjudication on jurisdiction and merits - maintenance of status quo pending final adjudication

Jurisdiction of DRI to issue show-cause notice - designation of 'proper officer' under Section 28 - prospective and retrospective conferral of powers on DRI officers - conflicting High Court decisions and stay by the Supreme Court - Jurisdictional validity of show-cause notices issued by DRI officers and the effect of statutory amendments and notifications conferring 'proper officer' functions. - HELD THAT: - The Tribunal examined the submissions that DRI officers were not proper officers under section 2(34)/28 of the Customs Act as held by the Supreme Court in Sayed Ali, and noted subsequent legislative amendments and notifications (w.e.f. 06.07.2011 and by insertion of sub section (11)) which sought to confer proper officer functions on specified DRI officers. The order records conflicting High Court decisions on whether those amendments/notifications cure the jurisdictional defect for periods prior to 08.04.2011 and that the question became sub judice before the Supreme Court, which stayed the Delhi High Court judgment in Mangli Impex. In view of the conflicting authorities and the pendency of appeals before the Supreme Court, the Tribunal refrained from adjudicating the jurisdictional question on merits and directed that the original adjudicating authority decide the issue of jurisdiction afresh after the Supreme Court delivers its decision, giving the assessee an opportunity of being heard. [Paras 7, 8, 9, 10, 11]

Jurisdictional question not decided on merits; matter remanded to the original adjudicating authority to first decide the issue of DRI's jurisdiction in light of the Supreme Court outcome and thereafter proceed on merits.

Remand for fresh adjudication on jurisdiction and merits - maintenance of status quo pending final adjudication - Reliefs to be granted pending final adjudication and consequential disposal of the appeals. - HELD THAT: - Applying the principle of judicial restraint in the face of conflicting High Court precedents and an existing stay by the Supreme Court, the Tribunal set aside the impugned orders, remitted the matters to the original adjudicating authority for fresh consideration first on jurisdiction and then on merits, and required that the assessee be heard. The Tribunal directed that status quo be maintained until the adjudicating authority completes its proceedings in accordance with the Supreme Court's eventual ruling. [Paras 12, 13, 14]

All appeals allowed by way of remand; impugned orders set aside and matters remitted for fresh adjudication with interim status quo directed.

Final Conclusion: The Tribunal set aside the impugned orders and allowed the appeals by remanding the matters to the original adjudicating authority to first determine the jurisdictional question concerning show-cause notices issued by DRI in light of the Supreme Court's pending decision, thereafter decide the merits after affording the assessee a hearing; interim status quo to be maintained until final adjudication.

Jurisdiction of DRI officers to issue show cause notices - proper officer for purposes of Section 28 of the Customs Act - assignment of proper officer functions by notification and by amendment - remand for determination of jurisdiction pending Supreme Court decision - status quo pending adjudication

Jurisdiction of DRI officers to issue show cause notices - proper officer for purposes of Section 28 of the Customs Act - remand for determination of jurisdiction pending Supreme Court decision - Impugned orders set aside and matter remanded to the original adjudicating authority to decide the question of jurisdiction of DRI officers first, and thereafter to decide the merits after the Supreme Court settles the issue; interim status quo to be maintained. - HELD THAT: - The Tribunal followed the approach adopted by coordinate benches in similar matters which observed conflicting High Court decisions on whether DRI officers were 'proper officers' empowered to issue show cause notices for the period prior to amendment/notification. The Tribunal noted that the issue is sub judice before the Hon'ble Supreme Court and, having regard to the conflicting High Court precedents and the pendency of the Supreme Court appeals, concluded that the appropriate course is to set aside the impugned orders and remit the matters to the original authorities to first determine jurisdiction in the light of the ultimate decision of the Supreme Court and thereafter adjudicate on merits, ensuring opportunity of hearing to the appellants. Interim status quo was directed to preserve rights until final adjudication on jurisdiction and merits.

Impugned orders set aside; matters remanded to original authorities to decide jurisdiction first (after Supreme Court decision) and then merits; status quo to be maintained in the interim.

Final Conclusion: All impugned orders were set aside and the matters remitted to the original adjudicating authorities for determination of jurisdiction in the light of the pending Supreme Court decision, followed by adjudication on merits; interim status quo ordered.

Academic or moot controversy - disposal of Special Leave Petitions on grounds of academicity - finality of administrative duty notification and periodical review under the Anti Dumping Rules - interpretation of 'domestic industry' in Rule 2(b) of the Anti Dumping Rules

Academic or moot controversy - disposal of Special Leave Petitions on grounds of academicity - Whether the Special Leave Petitions should be adjudicated when the subject matter has become academic by subsequent administrative action. - HELD THAT: - The Court held that the matters raised in the Special Leave Petitions had become academic because the final duty notification(s) under Rule 18 of the Anti Dumping Rules had been published in 2012 and periodical review(s) had since taken place, including challenges decided by the Gujarat High Court as recently as 23 February 2017. In light of these subsequent administrative developments, the Court found it unnecessary to examine the substantive issues raised in the petitions and accordingly disposed of the petitions and all pending applications as academic. The Court recorded that it would not decide the substantive questions since the notifications and subsequent reviews rendered the petitions moot for present purposes.

All Special Leave Petitions and pending applications were disposed of on the ground that the controversy had become academic.

Interpretation of 'domestic industry' in Rule 2(b) of the Anti Dumping Rules - Whether the Court determined the meaning of 'domestic industry' in Rule 2(b) of the Anti Dumping Rules. - HELD THAT: - The Court expressly declined to decide the precise meaning of the term 'domestic industry' in Rule 2(b), leaving that question open for adjudication in an appropriate case. It clarified that because it did not decide the issue on merits, aggrieved parties remain free to raise the question afresh and to urge all points available in law; any such future adjudication will not be foreclosed by reference to the orders under challenge in these petitions.

The question of the meaning of 'domestic industry' was left open for future adjudication and was not decided.

Final Conclusion: The petitions were disposed of as academic in view of the final duty notification(s) and subsequent periodical review(s); the substantive question concerning the meaning of 'domestic industry' in Rule 2(b) of the Anti Dumping Rules was not decided and remains open for determination in an appropriate case.

Summary order. Civil appeal dismissed as withdrawn.

Liability of proprietor for duties and penalties of proprietorship concern - personal penalty under Section 112 of the Customs Act - redemption fine and confiscation under Customs law - payment of part liability not discharging remaining obligations - abuse of process for seeking discharge without disclosure of payments

Personal penalty under Section 112 of the Customs Act - liability of proprietor for duties and penalties of proprietorship concern - payment of part liability not discharging remaining obligations - Effect of payment of personal penalty on other statutory liabilities of the proprietor and the proprietorship concern - HELD THAT: - The Court found that payment by the petitioner of the personal penalty (Rs. 8 lakhs) cannot be treated as discharging the remaining liabilities of the proprietorship concern. The adjudication had imposed duties, penalty under Section 114A, redemption fine and confiscation on Ashoka Metal Industries and personal penalties on the proprietor and others. The petitioner failed to disclose particulars as to when or whether other sums were paid, and there is no legal basis to construe payment of the personal penalty as extinguishing the balance statutory obligations of the proprietorship or the separate demand for duty, penalty and redemption fine.

Payment of the personal penalty did not absolve the petitioner from remaining duties and penalties; the demands as framed could not be said to be fallacious on that ground.

Abuse of process for seeking discharge without disclosure of payments - redemption fine and confiscation under Customs law - Maintainability of the writ petition and imposition of costs for abuse of process - HELD THAT: - The Court held that the petition, which sought discharge from liabilities without disclosing details of payment of the assessed amounts, constituted an abuse of the process of the Court. Having concluded that there was no merit in the contention that the demands were fallacious, the Court dismissed the writ petition and directed payment of costs to the concerned Customs Officer. The order records that the petitioner must deposit the quantified costs within four weeks and file an affidavit of compliance.

Writ petition dismissed as an abuse of process and costs of the proceeding quantified and directed to be paid within a specified period.

Final Conclusion: The High Court dismissed the writ petition: payment of the personal penalty did not discharge other statutory liabilities of the proprietorship or the proprietor, the challenge to the demands failed, and the petitioner was directed to pay costs of the proceeding and file an affidavit of payment within four weeks.

Sunset Review - Anti-Dumping Duty - mandatory initiation of review under Section 9A(5) read with Rule 23 - discretion under Rules 23(1A) and 23(1B) - requirement of substantiation in review applications - prima facie satisfaction for grant of interim relief

Sunset Review - mandatory initiation of review under Section 9A(5) read with Rule 23 - discretion under Rules 23(1A) and 23(1B) - requirement of substantiation in review applications - Direction to the Designated Authority to initiate the Sunset Review proceedings in respect of the petitioners' applications before the expiry of the anti-dumping duty. - HELD THAT: - The Court examined the petitioners' contention that the Designated Authority had declined or refused to initiate Sunset Review (SSR). While the Revenue relied on the post-Indian Metal amendments (Rules 23(1A) and 23(1B)) to contend that initiation is discretionary and that applicants must "substantiate" the need for duty, the Court found on a prima facie view of the material that the petitioners had demonstrated circumstances warranting initiation. The material showed substantial unmet domestic demand (a production shortfall exceeding one-third of demand) and an effective anti-dumping duty level that could lead to a spurt in imports; the records did not disclose that the Designated Authority had applied its mind to the data furnished. Given that the Anti-Dumping Duty was due to expire imminently and that expiry would render initiation impossible, the Court held that interim relief was necessary and directed initiation of the Sunset Review during the day. The direction is grounded on the Court's prima facie satisfaction and the prevention of irretrievable injustice pending final adjudication. [Paras 7, 8]

Designated Authority directed to initiate the Sunset Review in the petitioners' cases forthwith (during the day) to prevent irretrievable prejudice from the imminent expiry of the anti-dumping duty.

Sunset Review - Anti-Dumping Duty - prima facie satisfaction for grant of interim relief - Interim conditioning of the review proceedings and notifications on the final outcome of the writ petitions and adherence to law in any imposition of anti-dumping duty. - HELD THAT: - The Court imposed an express stipulation that the initiated Sunset Review, any notification and any consequent orders shall be subject to the final outcome of the writ proceedings. Further, the Court emphasised that any question of imposition of Anti-Dumping Duty in the SSR must be decided in accordance with law. This preserves the parties' rights and confines the interim direction to initiation of the process without predetermining the substantive adjudication on merits. [Paras 8, 9]

Sunset Review proceedings and any notifications/orders arising therefrom directed to carry a stipulation that they remain subject to the final outcome of the writ proceedings; imposition of Anti-Dumping Duty to be in accordance with law.

Final Conclusion: The Court granted interim relief by directing the Designated Authority to initiate the Sunset Review proceedings during the day in the petitioners' matters, subjecting those proceedings and any notifications or orders to the final determination of the writ petitions, and emphasised that any imposition of anti-dumping duty must conform to law.

Manner and time of claiming drawback - claim to be filed in prescribed Form (Annexure II) - supporting documents and deficiency memo procedure - power to relax Rules by Central Government on representation - effect of provisional assessment on limitation for drawback claim - scope of judicial review in writ petition against revisional order

Manner and time of claiming drawback - claim to be filed in prescribed Form (Annexure II) - supporting documents and deficiency memo procedure - The shipping bill filed by the petitioner does not constitute a valid claim for duty drawback under Rule 5 of the Re export of Imported Goods (Drawback of Customs Duties) Rules, 1995. - HELD THAT: - Rule 5 requires a claim to be filed in the prescribed form (Annexure II) within the stipulated period and accompanied by the documents listed in sub rule (2); incomplete claims must be returned with a deficiency memo under sub rule (4). The bill of shipping in the present case did not quantify the rupee equivalent, was not in Annexure II form and was not accompanied by the documents specified by Rule 5(2). No deficiency procedure under Rule 5(4) was invoked on the basis that the shipping bill itself could be treated as a claim. Consequently the shipping bill cannot be construed to be an application for drawback within the meaning of Rule 5(1). [Paras 9]

The claim in the shipping bill is not a valid Rule 5 claim and was rightly rejected.

Power to relax Rules by Central Government on representation - effect of provisional assessment on limitation for drawback claim - No application was made to the Central Government under Rule 7A for relaxation, and the petitioner has not shown that provisional assessment prevented filing under Rule 5. - HELD THAT: - Rule 7A permits the Central Government to relax provisions on receipt of a representation and for reasons to be recorded. The petitioner did not produce any material to show that a representation under Rule 7A was made and rejected. The Government order relied upon by the petitioner (Funskool India Ltd.) turned on specific facts where provisional assessment prevented timely filing; in the present case there is no material that non finality of provisional assessment prevented compliance with Rule 5. It was open to the petitioner to file a claim under Rule 5 within the time frame; absence of such filing or of a Rule 7A representation precludes relief on this ground. [Paras 11]

No entitlement to relief under Rule 7A; provisional assessment did not excuse non compliance with Rule 5 on the facts before the Court.

Scope of judicial review in writ petition against revisional order - Writ court will not reappraise evidence or interfere in the absence of perversity, breach of natural justice, bias or mala fide in the revisional authority's order. - HELD THAT: - The petitioner has not alleged breach of principles of natural justice nor demonstrated perversity, bias or mala fide in the revisional order impugned. A writ court's function is not to rehear or reappraise the entire material placed before the revisional authority; absent such jurisdictional defects or demonstrable perversity, interference is not warranted. [Paras 12]

No ground for interference by writ jurisdiction; the impugned revisional order stands.

Final Conclusion: Writ petition dismissed; the shipping bill did not constitute a valid time barred Rule 5 claim, no representation under Rule 7A was shown, and there was no jurisdictional defect or perversity warranting interference with the revisional order.

Maintainability of writ petition by a foreign juristic person under Article 226 - availability of fundamental rights under Article 19(1)(g) and Article 14 to foreign companies - treaty-based contractual undertaking and liability under the protocol to the Treaty of Transit (Article 9A) - validity of demand made in terms of a treaty-linked undertaking - claim for state compensation for alleged loss in transit

Maintainability of writ petition by a foreign juristic person under Article 226 - availability of fundamental rights under Article 19(1)(g) and Article 14 to foreign companies - Whether the petitioner, a Nepal-incorporated company, could maintain a writ under Article 226 founded on alleged violations of Article 19(1)(g) and/or Article 14 - HELD THAT: - The Court observed that Article 226 is not confined to Indian citizens and that juristic persons have been permitted to invoke it in appropriate circumstances, including protection of human rights. However, where the asserted right is essentially founded on Article 19(1)(g) (the right to carry on business), that right is available to Indian citizens and juristic persons constituted under Indian law; a foreign company cannot invoke Article 226 predicated on a violation of Article 19(1)(g). Earlier precedents distinguishing the availability of Article 14 and Article 19(1)(g) to non-citizens were noted: a foreign company cannot claim Article 14 in isolation when the claim is in substance one under Article 19(1)(g). Applying these principles, the petitioner's grievance about transport rights was treated as emanating from Article 19(1)(g) and not cognisable by a foreign company under Article 226 on that basis. [Paras 6, 7]

The writ petition cannot be maintained by the foreign petitioner to enforce rights founded on Article 19(1)(g); maintainability is rejected.

Treaty-based contractual undertaking and liability under the protocol to the Treaty of Transit (Article 9A) - validity of demand made in terms of a treaty-linked undertaking - Whether the demand dated March 26, 2002, made by the customs authorities pursuant to the undertaking furnished under Article 9A of the protocol to the Treaty of Transit, was arbitrary, unreasonable or violative of Article 14 - HELD THAT: - The protocol's Article 9A required the importer to furnish to the satisfaction of the Commissioner of Customs a legally binding undertaking to pay the difference between the market value in India and the CIF value if goods did not reach Nepal. The petitioner had given such an undertaking and the goods admittedly did not reach Nepal. There was no demonstration that the demand exceeded the entitlement under the undertaking or treaty. The authorities acted in terms of the treaty-provided mechanism and the demand was not shown to be arbitrary or violative of Article 14. [Paras 8, 9]

The demand in terms of the undertaking under Article 9A is valid and not constitutionally infirm.

Claim for state compensation for alleged loss in transit - Whether the petitioner was entitled to compensation from the Government of India for the alleged theft of goods while in transit through India - HELD THAT: - The Court noted that the treaty does not stipulate State liability to compensate for theft occurring in transit and that the prosecution record (FIR) did not establish recovery or conclusively establish theft. No material established a right to compensation from the Indian Government for the alleged loss. Absent proof of theft and a treaty obligation on the State to make good such loss, the claim for compensation could not be entertained. [Paras 10]

The claim for compensation from the Indian Government for alleged theft in transit is not maintainable on the record and does not arise.

Final Conclusion: The writ petition is dismissed for want of merit: the foreign petitioner cannot invoke Article 226 to enforce rights founded on Article 19(1)(g), the customs demand made under the undertaking pursuant to Article 9A of the Treaty protocol is valid, and the claim for state compensation for alleged theft in transit is not established; the prayer for stay is also refused.

Power to review - rectification of orders - mistake apparent on the face of the record - inherent powers to meet ends of justice - rectification for clerical or arithmetical mistakes - general power to amend pleadings - limitation for filing appeal and condonation of delay - finality of Tribunal orders under Section 421

Power to review - rectification of orders - mistake apparent on the face of the record - rectification for clerical or arithmetical mistakes - inherent powers to meet ends of justice - general power to amend pleadings - Whether the National Company Law Tribunal had jurisdiction to review its own orders passed in petitions for compounding under Section 441 of the Companies Act, 2013. - HELD THAT: - The Companies Act, 2013 does not confer a general power of review on the Tribunal akin to Order 47 Rule 11 CPC. The Tribunal's corrective powers are confined to: (a) rectification/amendment under Section 420(2) to correct a mistake apparent on the record within two years; (b) exercise of inherent powers under Rule 11 only to meet ends of justice or prevent abuse of process, which cannot be employed after disposal as a substitute for review; (c) rectification under Rule 154 for clerical or arithmetical mistakes or errors arising from accidental slip or omission; and (d) amendment within the period specified by Rule 155 to cure defects for determining the real question. The appellant's pleadings did not establish any mistake apparent on the record, nor a clerical/arithmetical error or accidental slip warranting rectification. Non reference to a particular judgment relied upon by a party does not, by itself, constitute an omission amenable to rectification under Rule 154; a court is not obliged to refer to every cited authority. Consequently, the Tribunal had no jurisdiction to review its orders in the absence of the narrowly defined corrective grounds recognized by the statute and rules, and the Tribunal's dismissal of the review applications was upheld. [Paras 9, 10, 11, 12, 13]

Tribunal lacked a general power to review its own orders; rectification/innate/amendment powers are limited and did not apply, therefore the review applications were rightly dismissed.

Limitation for filing appeal and condonation of delay - finality of Tribunal orders under Section 421 - Whether the original orders dated 26th September, 2016 could be adjudicated on merits in view of the limitation and condonation powers under Section 421 of the Companies Act, 2013. - HELD THAT: - Section 421(3) prescribes that an appeal to the Appellate Tribunal must be filed within forty five days of availability of the Tribunal's order, with a discretionary further extension not exceeding forty five days (total 90 days) for sufficient cause. Orders that are not appealed within the statutory period attain finality under Section 421. The appellant did not supply dates of communication but conceded that more than nine and a half months had elapsed since the orders; that delay exceeds the maximum 90 day period for condonation. Therefore the Appellate Tribunal lacks power to entertain or condone the delay now, and the original orders must stand without being reopened on merits. [Paras 14, 15, 16]

Original orders attained finality as the statutory limitation for appeal and maximum condonation period under Section 421 had elapsed; the Court declined to decide the merits and dismissed the appeals.

Final Conclusion: The appeals are dismissed. The National Company Law Tribunal has no general power to review its own orders; only limited corrective powers under Section 420(2), Rules 154 and 155 and inherent powers exist and were not attracted. The original orders attained finality in view of the limitation prescribed by Section 421, and the Appellate Tribunal cannot condone the delay beyond the statutory maximum; no costs were ordered.

Mandatory compliance with clause (c) of sub-section (3) of Section 9 - certificate from the financial institution maintaining accounts of the operational creditor - demand notice in Form-3/Form-4 - person authorised to act on behalf of the operational creditor - validity of notice under Section 8

Mandatory compliance with clause (c) of sub-section (3) of Section 9 - certificate from the financial institution maintaining accounts of the operational creditor - Whether the certificate from Macquarie Bank, Australia satisfies clause (c) of sub section (3) of Section 9 and whether that clause is mandatory or directory. - HELD THAT: - The Tribunal held that clause (c) of sub section (3) of Section 9 is mandatory and must be complied with. Form 5 (and its Part V) cannot supplant the substantive statutory requirement of producing a certificate from a financial institution maintaining the operational creditor's account confirming non payment. Macquarie Bank, Australia was found not to fall within the statutory definition of a financial institution for the purposes of the Code (not being a scheduled bank, not within Section 45 I RBI Act definition, nor a public financial institution nor notified by the Central Government). Consequently any certificate from that bank cannot be relied upon to satisfy clause (c) and cannot establish the absence of repayment by the corporate debtor. [Paras 9, 10]

Certificate from Macquarie Bank, Australia does not satisfy clause (c) of sub section (3) of Section 9; the requirement is mandatory and non compliance renders the Section 9 application unsustainable on that ground.

Demand notice in Form-3/Form-4 - person authorised to act on behalf of the operational creditor - validity of notice under Section 8 - Whether the notice under Section 8 issued through an overseas advocate (lawyer) without evidence of authority or position with the operational creditor constituted a valid demand notice in the form and manner prescribed. - HELD THAT: - Section 8 requires delivery of the demand notice or copy of invoice in the form and manner prescribed. Rule 5 and Forms 3 and 4 prescribe who may sign/issue the notice: the signature must be of a person authorised to act in relation to the operational creditor and in the position stated in the form. The Tribunal held that a lawyer/advocate (or other professional) who is not shown to be authorised and does not hold any position with or in relation to the operational creditor cannot validly issue the statutory demand; such communication is akin to an advocate's/pleader's notice and is not the statutory notice contemplated by Section 8. In the present case the demand was issued by a lawyer in Singapore with no record of authority or of holding a position with the appellant, and therefore the notice was defective and the consequent Section 9 petition was not maintainable on this ground as well. [Paras 11, 15, 16, 17, 19]

Notice under Section 8 issued by an overseas advocate without authority or positional relationship to the operational creditor is not a valid statutory notice in Form 3/Form 4; the Section 9 petition based on such notice was not maintainable.

Final Conclusion: The appeal is dismissed. The Section 9 application was not maintainable as (a) the certificate relied on did not meet the mandatory requirement of clause (c) of sub section (3) of Section 9, and (b) the demand notice under Section 8 was defectively issued by an advocate without requisite authority; no order as to costs.

Provisional attachment under PMLA - taking possession in terms of Section 8(4) of PMLA - custodia legis / property in custody of court - requirement of court's leave before taking possession - Possession Rules, 2013 - Rule 7 application to court - interim stay of possession pending appeal - amendment of memo of appeal and condonation of delay

Amendment of memo of appeal and condonation of delay - Applications for amendment of memo of appeal and condonation of delay - HELD THAT: - The Tribunal treated the applications for amendment of the memo of appeal and for condonation of delay as consequential to the initial joint filing and subsequent separate filings. Having examined the circumstances that one appeal was initially filed jointly and later treated as a separate appeal by one party, the applications for amendment and for condonation of delay were allowed. [Paras 4]

Applications for amendment of the memo of appeal and for condonation of delay are allowed.

Taking possession in terms of Section 8(4) of PMLA - custodia legis / property in custody of court - requirement of court's leave before taking possession - Possession Rules, 2013 - Rule 7 application to court - Whether the Enforcement Directorate can take over physical possession of properties in the custody of a court under Section 8(4) of the PMLA without obtaining leave of that court or making the application contemplated by Rule 7 of the Possession Rules, 2013 - HELD THAT: - The Tribunal examined authorities and the statutory scheme and distinguished precedents relied on by the respondent. It held that the question of taking over possession of property in custodia legis is governed by established principles that proceedings affecting property in the custody of a court ordinarily require the leave of that court, to avoid conflict of jurisdiction and protect the custody of the property. Rule 7 of the Prevention of Money laundering (Taking Possession of Attached or Frozen Properties Confirmed by the Adjudicating Authority) Rules, 2013 requires that where confirmed attached property is in the custody of any court, the authorized officer must make an application to that court seeking release of the property in favour of the Directorate. In view of Rule 7 and the principle that property in custodia legis is ordinarily exempt from judicial process except with leave, the respondent's submission that possession can be taken without leave was rejected insofar as it sought immediate takeover of custody under Section 8(4). [Paras 22, 23, 24]

Possession of properties that are in the custody of a court cannot be taken over by the Directorate under Section 8(4) without complying with the requirement to seek the court's leave/application as envisaged by Rule 7 of the Possession Rules; the respondent's contention to the contrary is rejected.

Interim stay of possession pending appeal - provisional attachment under PMLA - Interim relief - stay of action to take over possession of the attached flats pending disposal of appeals - HELD THAT: - Having considered the facts, including that the properties were in custody of the Special Court and were previously delivered to the appellants on bond, and noting that appellants had made out an arguable case (including challenge to the reliance on stale material for the PAO), the Tribunal concluded that prima facie the appellants were entitled to interim protection from being dispossessed in execution of the impugned orders. Accordingly, the applications for stay of action to take over possession of the three flats were allowed unconditionally until the appeals are finally decided. The Tribunal clarified that this interim relief did not disturb the order of attachment itself. [Paras 20, 21, 25]

Action to take over possession of the specified flats in pursuance of the impugned order and any notices under Section 8(4) shall remain stayed until final disposal of the appeals; the provisional attachment continues.

Provisional attachment under PMLA - restrictions on alienation pending appeal - Interim restrictions on dealing with attached properties during pendency of appeal - HELD THAT: - While staying action for taking over physical possession, the Tribunal made clear that the attachment order as such continues. To protect the integrity of the attachment it directed that, until disposal of the appeal, the appellants shall not dispose of or create any third party right or interest in the attached properties. [Paras 29, 30]

Order of attachment shall continue and appellants are restrained from disposing of or creating any third party rights or interests in the attached properties pending disposal of the appeals.

Final Conclusion: Applications for amendment of the memo of appeal and condonation of delay allowed; interlocutory applications for stay of action to take over possession of the three specified flats allowed unconditionally until final disposal of the appeals; the provisional attachment of the flats remains in force and appellants are restrained from creating any third party rights in the attached properties; main appeals to be heard on merits on the listed date.

Proceeds of crime - provisional attachment - confirmation of provisional attachment - effect of civil/arbitral award on PMLA proceedings - presumption in interconnected transactions - burden of proof in PMLA adjudication - release of attached property on furnishing security

Effect of civil/arbitral award on PMLA proceedings - proceeds of crime - Finality of the arbitration award between the appellant and respondent no.2 does not preclude or conclusively determine the question whether the transactions were involved in money laundering for the purposes of PMLA proceedings. - HELD THAT: - The Tribunal held that the arbitral award is a final civil remedy between the parties but did not consider or decide the question whether the transactions were involved in offences under the PMLA; civil findings therefore are not conclusive in PMLA adjudication. Reliance on Sections 40-43 of the Evidence Act and the decision in K.G. Premshanker establishes that a prior civil award does not bar parallel criminal/quasi criminal proceedings and is relevant only to the extent it bears on facts in issue. Consequently, the Award's declaration that the appellant need not return the consideration does not determine whether monies paid were "proceeds of crime" invested in the subject property. [Paras 48, 49]

The arbitral award, though final inter partes, does not preclude PMLA proceedings and is not conclusive proof that the amounts/property are not proceeds of crime.

Provisional attachment - confirmation of provisional attachment - presumption in interconnected transactions - burden of proof in PMLA adjudication - Whether an immovable property in possession of a person not charged with a scheduled offence can be provisionally attached/confirmed under PMLA where proceeds of crime are shown to be invested in it. - HELD THAT: - The Tribunal affirmed that PMLA permits attachment of property involved in money laundering even if the possessor has not been charged with the scheduled offence. The adjudicating authority is entitled to form a reasoned belief and provisionally attach property where the investigation demonstrates that proceeds of crime were invested. Section 23's presumption regarding interconnected transactions and the statutory burden on claimants to prove non involvement were noted. The Tribunal found serious allegations and investigative findings that part of the funds fraudulently obtained by respondent no.2 were paid to the appellant as part consideration and invested in the property, justifying provisional attachment and its confirmation. [Paras 36, 55, 56]

Attachment and confirmation of the property under PMLA is permissible even though the appellant is not charged with the scheduled offence, where proceeds of crime are prima facie shown to be invested in the property.

Proceeds of crime - presumption in interconnected transactions - Quantum of the proceeds of crime invested in the subject property for purposes of the attachment. - HELD THAT: - There was a dispute as to the amount received by the appellant from respondent no.2. Having considered the arbitration record, endorsements and the appellant's own written submissions, the Tribunal accepted that the amount paid by respondent no.2 to the appellant in terms of the agreement should be taken as Rs. 4.67 crores. Consequently, the Tribunal treated the proceeds of crime invested in the property, for the purpose of securing the property, at that figure rather than the department's higher quantification. [Paras 59, 61]

The proceeds of crime invested in the attached property are taken to be Rs. 4.67 crores for the limited purpose of securing the attachment.

Release of attached property on furnishing security - confirmation of provisional attachment - Whether the attached immovable property can be released and on what conditions. - HELD THAT: - Balancing that confiscation is the domain of the Special Court but recognising the Tribunal's power under the Act to modify orders on appeal, the Tribunal directed release of the attached immovable property including the mill subject to the appellant furnishing an FDR of Rs. 4.67 crores in favour of the Enforcement Directorate within two months as security. The FDR was to be without prejudice; if the Special Court ultimately holds the amount not to be proceeds of crime, the appellant would recover principal and interest; otherwise the Department would be entitled to the amount. The order was framed as an interim, conditional measure pending final adjudication. [Paras 63, 64, 65]

The attachment is modified: release of the property is ordered subject to the appellant furnishing an FDR of Rs. 4.67 crores to the Enforcement Directorate within two months; upon satisfaction, the property shall be released; final confiscation remains for the Special Court.

Final Conclusion: The Tribunal modified the Adjudicating Authority's confirmation of provisional attachment by directing release of the attached immovable property on the appellant furnishing an FDR of Rs. 4.67 crores as security within two months; the FDR is to be returned if the Special Court finds the amount not to be proceeds of crime, otherwise it will be applied to satisfy confiscation. The arbitral award does not bar the PMLA proceedings and attachment was held permissible on the present prima facie material.

Provisional attachment - proceeds of crime - reason to believe - show cause notice under Section 5(1) of the PMLA - fund flow / money trail - presumption under Section 23 of the PMLA - burden under Section 24 of the PMLA

Provisional attachment - show cause notice under Section 5(1) of the PMLA - reason to believe - Validity of the provisional attachment of Vishal House and sufficiency of the material forming the 'reason to believe' recorded in the show cause notice. - HELD THAT: - The Tribunal examined whether the Deputy Director/ED had subjective and objective material to form the 'reason to believe' required for issuance of the show cause notice and provisional attachment. The show cause notice set out material including the CBI charge sheet, accompanying documents and materials gathered by the Joint Director during investigation, together with statements of directors of various companies. The Tribunal held that the show cause notice did in fact disclose the material basis for the ED's belief and that cognizance of the charge sheet by the designated court lent further support to the formation of that belief. On this basis the Tribunal found no illegality or absence of reasons in the issuance of the provisional attachment order in respect of Vishal House. [Paras 19]

The provisional attachment and the show cause notice were valid; the ED had sufficient material to form the 'reason to believe'.

Proceeds of crime - fund flow / money trail - Whether Vishal House was acquired out of proceeds of crime and whether there was a nexus between VEOL and JMD Media Pvt. Ltd. such that the property could be treated as tainted. - HELD THAT: - The Tribunal analysed statements and documentary material showing transfers from the de-facto owners and group firms to M/s VikalpRasayan and onward to JMD Media Pvt. Ltd., including admissions by directors and related persons. The material indicated transfers amounting to sums which were then paid by JMD Media to SBI for purchase of Vishal House. The Tribunal accepted the ED's finding that the investigation revealed misuse of credit facilities by VEOL and that interlinked transactions among group companies resulted in the flow of funds used by JMD Media to acquire the property. The Tribunal rejected the appellant's contention that the property could not be proceeds of crime because the original units were purchased in 1991 or because JMD's acquisition at auction in 2009 was independent; the factual fund-flow findings established a prima facie nexus. [Paras 20, 21, 22]

On the material before it, the Tribunal upheld the finding that Vishal House was tainted by proceeds of crime through the established fund flow and nexus with VEOL.

Scheduled offences and temporal scope of the Schedule - Whether amendment of the Schedule to the PMLA (effective 01.06.2009) precluded attachment because the alleged offences dated earlier than the amendment. - HELD THAT: - The appellant contended that offences alleged (2005-2008) were not scheduled offences prior to the 2009 amendment and therefore could not support attachment. The Tribunal observed that the units in question were sold in 2011 and that the appellant's argument regarding the timing of the schedule amendment had no force in the present facts. The Tribunal treated the timing argument as unavailing in face of the material establishing taint and fund transfers. [Paras 25]

The challenge based on non-retrospectivity of the 2009 Schedule amendment was rejected; it did not vitiate the attachment on the facts before the Tribunal.

Presumption under Section 23 of the PMLA - burden under Section 24 of the PMLA - Applicability of statutory presumptions and burden-shifting provisions (Sections 23 and 24) to the appellant and whether the appellant discharged the requisite burden. - HELD THAT: - The Adjudicating Authority had applied the statutory presumptions and held that the appellant did not discharge the onus. The Tribunal examined the evidentiary record including statements and documentary fund-flow evidence and concluded that the appellant had not satisfactorily rebutted the material establishing linkage of funds to the group firms and de-facto owners. On this basis the Tribunal found no error in applying the presumptions and in holding that the appellant had not discharged the burden. [Paras 21, 24]

Sections 23 and 24 were properly applied; the appellant failed to discharge the burden to rebut the statutory presumptions on the material before the authorities.

Effect of pre-attachment communication to Sub-Registrar - Legality and effect of the Enforcement Directorate's letter to the Sub-Registrar dated 21.07.2011 restraining registration prior to issuance of a provisional attachment order. - HELD THAT: - The appellant challenged the ED's pre-attachment communication as without statutory power and void ab initio, contending it led to refusal to register the sale deed and prejudiced their rights. The Tribunal reviewed the sequence of events and the overall findings of taint and fund flow, and concluded that the substantive impugned order confirming attachment contained no infirmity. The Tribunal did not accept the contention as sufficient to set aside the confirmation of provisional attachment in view of the material supporting the ED's actions. [Paras 14, 25]

The pre-attachment communication did not render the confirmed attachment invalid on the facts before the Tribunal; the objection to that communication did not vitiate the impugned order.

Interim possession and deposit pending final disposal - Whether possession of the attached property should be permitted to remain with the appellant pending final adjudication and on what terms. - HELD THAT: - While upholding the confirmation of attachment, the Tribunal recognised that the appellant had already paid the auction consideration and was in possession. In the exercise of discretion and in fairness, the Tribunal permitted the appellant to continue in possession subject to monthly deposits to the ED from the date of order until final disposal of PMLA proceedings; the deposit to be refunded if the appellant is held to be an innocent purchaser, or credited to the ED if otherwise. [Paras 43]

Possession allowed to continue with the appellant on condition of depositing stipulated monthly sums pending final adjudication; appeal allowed to that limited extent but otherwise dismissed.

Final Conclusion: The Tribunal upheld the Adjudicating Authority's confirmation of the provisional attachment of Vishal House, finding sufficient material (CBI charge sheet, investigative material and admissions) to form the requisite 'reason to believe' and to establish a prima facie fund flow linking the property to proceeds of crime. The appellant's challenges, including timing of the Schedule amendment and the ED's pre-attachment communication to the Sub-Registrar, were rejected. The appellant was permitted to retain possession on condition of periodic deposits pending final disposal; otherwise the appeal is dismissed.

Maintainability of writ under Article 226 - alternative remedy - mixed question of fact and law - composite works contract - artificial vivisection - assessment and valuation

Alternative remedy - maintainability of writ under Article 226 - mixed question of fact and law - Writ petition challenging assessment order is not maintainable and petitioner must avail the statutory appellate remedy - HELD THAT: - The Court held that the challenge to the Order-in-Original involves factual controversies - including whether the contracts constitute a single composite works contract or separate contracts and the valuation applied by the Adjudicating Authority - which are mixed questions of fact and law. The petitioner had previously obtained a remand on the narrow ground that the Adjudicating Authority had referred to an earlier Supreme Court decision subsequently overruled, and accepted that the core controversy as to compositeness is a mixed question. Given that the Tribunal/Appellate forum is the appropriate forum for re-appreciation of contractual scope, valuation and related factual findings, the availability of the alternate statutory remedy precludes adjudication of these matters in a writ under Article 226. The Court therefore declined to entertain merits-based arguments and directed the petitioner to pursue the appellate remedy under the Act. [Paras 11, 12, 13]

Writ petition dismissed as not maintainable; liberty granted to avail the appellate remedy

Final Conclusion: The High Court dismissed the writ petition as not maintainable because the dispute raises mixed questions of fact and law and an alternate statutory appeal is available; the petitioner is at liberty to pursue the appellate remedy.

Taxable service by a broadcasting agency or organisation - Reverse charge liability for services of a foreign broadcasting agency - Service recipient liability where transmission/downlinking is not received by the alleged agent - Transmission/downlinking of signals as determinative of receipt of broadcasting service - Distribution of broadcasting rights versus actual broadcasting/telecast activity

Taxable service by a broadcasting agency or organisation - Service recipient liability where transmission/downlinking is not received by the alleged agent - Distribution of broadcasting rights versus actual broadcasting/telecast activity - Whether the appellant is liable to service tax as a service recipient under the broadcasting agency/organisation taxable service when the foreign broadcaster uplinks signals directly to MSOs/COs and the appellant neither uplinks nor downlinks the broadcast signals but only held/distributed distribution rights. - HELD THAT: - The statutory definition of the taxable broadcasting service is wide. However, liability as a service recipient requires that the appellant, as an agent or representative, be engaged in activities amounting to receipt of broadcasting service such as transmission or downlinking of signals. On the facts the appellant only held and transferred distribution/marketing rights to Star India Pvt. Ltd. and did not uplink or downlink broadcast signals; transmissions were uplinked by the foreign broadcaster and downlinked directly to MSOs/COs. The Tribunal's decision in ESPN Software India (P) Ltd. (referred to in the order) addressed identical factual and legal contours and held that where the foreign broadcaster uplinks and MSOs/COs receive signals directly, the intermediary distributor who does not technically receive the broadcast cannot be treated as the service recipient liable to tax. That ratio is applicable here; the department's pending appeal to the Apex Court did not attract a stay of the Tribunal's decision, and no distinguishing factual feature was shown to warrant a different conclusion. Applying that determinative reasoning, the demand confirmed against the appellant cannot be sustained. [Paras 5]

Demand of service tax and interest confirmed by the adjudicating authority is set aside and the appeal is allowed.

Final Conclusion: Appeal allowed; demands confirmed in adjudication relating to the broadcasting service (for the period stated) set aside on the ground that the appellant did not receive or transmit the broadcast signals and therefore cannot be treated as the taxable service recipient under the broadcasting agency/organisation service.

Business Auxiliary Service - production of goods on behalf of the client - processing of goods - taxability by amendment with effect from specific date - penalties under sections 76, 77 and 78 of the Finance Act, 1994

Business Auxiliary Service - production of goods on behalf of the client - processing of goods - Liability to service tax for rubber lining and re-rubber lining carried out prior to 16.6.2005 - HELD THAT: - The Tribunal examined the amendment history of the definition of Business Auxiliary Service and found that the departmental demand commencing 10.9.2004 treated the appellant's activities as production of goods on behalf of the client. On the facts the appellants performed job work amounting to processing of goods (rubber lining and re-rubber lining) for the client rather than producing goods on the client's behalf. Reliance was placed on the decision in Auto Coats (reproduced in the order), which supports the view that, during the period prior to 16.6.2005, such processing for a customer did not attract BAS. Applying that reasoning, the Tribunal held that demands for the period before 16.6.2005 are unsustainable. [Paras 6, 7]

Demand for service tax raised for the period prior to 16.6.2005 is set aside.

Taxability by amendment with effect from specific date - Business Auxiliary Service - penalties under sections 76, 77 and 78 of the Finance Act, 1994 - Liability for service tax for activities falling on or after 16.6.2005 and imposition of penalties - HELD THAT: - The Tribunal noted a later amendment effective 16.6.2005 which brought within Business Auxiliary Service the production or processing of goods for, or on behalf of, the client. On records only one invoice (dated 28.6.2005) falls beyond 16.6.2005; the Tribunal sustained the service tax levy insofar as it relates to that invoice. However, taking the same reasoning that the earlier period did not attract BAS, the Tribunal found no ground to sustain the penalties imposed under the Finance Act and set aside all penalties. [Paras 7, 8]

Service tax sustained only for the invoice dated 28.6.2005 (post 16.6.2005); all penalties set aside.

Final Conclusion: The appeal is partly allowed: demands for the period prior to 16.6.2005 are set aside; service tax sustained only in respect of the invoice dated 28.6.2005 (post 16.6.2005); all penalties imposed are set aside.

Option to pay service tax on basic fare under Rule 6(7) of the Service Tax Rules, 1994 - exercise of option evidenced by ST 3 returns - no statutory requirement of intimation to department for exercising the option - remand for re quantification of service tax on basic fare method - penalties under Sections 76 and 78 set aside for denial of lawful option / reasonable cause - allegation of suppression not sustainable where earlier show cause covered same facts

Option to pay service tax on basic fare under Rule 6(7) of the Service Tax Rules, 1994 - exercise of option evidenced by ST 3 returns - no statutory requirement of intimation to department for exercising the option - Validity of exercising the option under Rule 6(7) by filing ST 3 returns calculating tax on basic fare and whether intimation to the department was required - HELD THAT: - The rule grants an option to the air travel agent to discharge service tax by paying a specified percentage of the basic fare and states the option, once exercised, applies uniformly during the financial year. The provision does not prescribe any procedure or formal intimation to the department for exercising the option. The appellant had filed ST 3 returns for the relevant period working out liability on the basic fare method. In the absence of any statutory requirement of separate intimation, such conduct (filing returns reflecting the basic fare method) constitutes a valid exercise of the option. Therefore the department could not compel payment on commission where the option had been validly exercised and evidenced by returns. [Paras 8]

Option under Rule 6(7) was validly exercised as evidenced by ST 3 returns; appellant liable to discharge service tax on the basic fare portion and not on commission unless re quantified otherwise.

Allegation of suppression not sustainable where earlier show cause covered same facts - penalties under Sections 76 and 78 set aside for denial of lawful option / reasonable cause - Sustainability of invocation of extended period / allegation of suppression and imposition of penalties - HELD THAT: - An earlier show cause notice for the period 10/2002 to 9/2003 had been issued and adjudicated, putting the department on notice of the relevant facts. Where the same set of facts were already within the knowledge of authorities, an allegation of suppression for the subsequent period is not sustainable in the circumstances of this case. Further, there was confusion and dispute between the parties on whether discharge of tax on the basic fare method was permissible, and the department had not accepted the returns or allowed the appellant to exercise the option. Given this denial of the assessee's right to exercise the statutory option and the surrounding confusion, the imposition of penalties was unwarranted. The Tribunal accordingly set aside the penalties. [Paras 9]

Extended period allegation not sustainable on these facts and penalties imposed under the Act are set aside.

Remand for re quantification of service tax on basic fare method - Whether the demand quantified on the basis of commission must be reworked on basic fare basis - HELD THAT: - Having held that the appellant validly exercised the basic fare option and that the department could not require payment on commission when the option applied, the Tribunal directed that the adjudicating authority re ascertain and requantify the service tax payable for the disputed period on the basic fare method. This is a remand for fresh computation consistent with the Tribunal's legal conclusions rather than a final adjudication of the precise quantum. [Paras 8, 10]

Matter remanded to adjudicating authority to compute service tax payable for the disputed period on the basic fare method.

Final Conclusion: Appeal partly allowed: Tribunal held that the appellant validly exercised the Rule 6(7) basic fare option as evidenced by ST 3 returns and that the department could not treat liability on commission; directed re quantification of tax for the disputed period on basic fare basis and set aside all penalties.

Time of provision of service - rate of service tax - cenvat credit - debit notes as valid document for cenvat - eligibility of credit for repair and maintenance services - services relating to investment activity - requirement of service provider registration number on invoice - penalty commensurate with confirmed demand

Time of provision of service - rate of service tax - Applicability of higher rate of service tax based on date of receipt of service charges as against rate applicable on date of provision of service. - HELD THAT: - The Tribunal held that the rate of service tax is to be determined as on the date of provision of the service and not by the date of receipt of payment. Where the service was provided prior to the change in rate, the lower earlier rate applies even if payment was received later; the Revenue's reliance on date of receipt to levy the higher rate was rejected as incorrect and without legal support, consistent with the Tribunal's earlier decision in Art Leasing Ltd.

Demand based on application of higher rate by reference to date of receipt is set aside; rate applicable is that on date of provision of service.

Cenvat credit - debit notes as valid document for cenvat - Whether cenvat credit can be denied when the supporting document is a debit note rather than an invoice or challan prescribed under the Rules. - HELD THAT: - The Tribunal accepted that although the rules prescribe invoice and challan as primary documents, where a debit note contains all information required under the Rules (notably Rule 4A of Service Tax Rules as applied in cited authorities), it must be treated as a valid document for availing cenvat credit. Reliance on precedents where debit notes bearing requisite particulars were held sufficient justified allowing the credit on the debit notes in the present case.

Denial of cenvat credit on account of debit notes is set aside and credit allowed.

Cenvat credit - eligibility of credit for repair and maintenance services - Admissibility of cenvat credit on repair and maintenance services for windmills installed outside the appellant's premises. - HELD THAT: - The Tribunal found that the appellant's core business is financing and that the windmills did not serve any activity of providing service or manufacturing by the appellant; electricity produced was partly sold to a board and partly supplied to a group company. Consequently the repair and maintenance services for those windmills were not in relation to the appellant's output services or business activity and therefore the statutory requirement for availing cenvat credit was not satisfied. The credit claimed was held inadmissible and the demand upheld; distinctions from cited authority Endurance Technologies were noted on facts.

Credit on repair and maintenance of windmills is inadmissible; demand upheld.

Cenvat credit - services relating to investment activity - Admissibility of cenvat credit for Chartered Accountant's service related to sale of the appellant's equity investment. - HELD THAT: - The Tribunal held that services procured in relation to the appellant's investment activities (sale of equity) are not related to the appellant's output services. The CA's service was availed in connection with disposal of an investment made out of business income and therefore does not qualify as input service for the appellant's taxable output activity; accordingly the statutory requirement linking input services to output services was not fulfilled and credit cannot be allowed.

Credit on CA's service for sale of equity investment denied; demand upheld.

Cenvat credit - requirement of service provider registration number on invoice - Whether cenvat credit can be denied solely because invoices do not bear the service provider's registration number. - HELD THAT: - The Tribunal observed that where there is no dispute about the service having been rendered and service tax having been charged and paid, mere omission of the service provider's registration number on the invoice is a minor defect which does not justify denial of cenvat credit. In the absence of any charge or allegation of non-payment of service tax by the provider or non-payment by the recipient, the credit was held admissible and the demand based on this ground set aside.

Denial of credit for invoices lacking provider's registration number is set aside; credit allowed.

Cenvat credit - penalty commensurate with confirmed demand - Treatment of admitted and conceded cenvat credit claims and effect on penalty. - HELD THAT: - The Tribunal recorded that certain small credits were conceded by the appellant as not under contest and those demands were upheld. It directed that any penalty imposed by the lower authority should be proportionate to and commensurate with the demand ultimately upheld by the Tribunal, reflecting the reduced liability after allowing other counts.

Conceded credits are not allowed; demands upheld in those amounts and penalty to be commensurate with the demand confirmed by the Tribunal.

Final Conclusion: The appeal is partly allowed: demands based on application of higher rate by reference to date of receipt, denial of credit on debit notes, and denial for invoices missing provider registration number are set aside; demands in respect of repair and maintenance of windmills, CA service for sale of investment, and certain conceded small credits are upheld; penalties to be adjusted to the demands sustained.

Reverse charge liability for services received from outside India - payment on self-ascertainment and immunity from penalty under Section 73(3) of the Finance Act, 1994 - bona fide belief / absence of mala fide in non-payment - waiver of penalty under Sections 76 and 78 where Section 73(3) conditions are satisfied

Payment on self-ascertainment and immunity from penalty under Section 73(3) of the Finance Act, 1994 - bona fide belief / absence of mala fide in non-payment - waiver of penalty under Sections 76 and 78 where Section 73(3) conditions are satisfied - Whether penalties under Sections 76 and 78 could be imposed where the assessee paid service tax and interest before issuance of show cause notice in circumstances of genuine dispute about reverse charge liability. - HELD THAT: - The Tribunal found the taxability of services related to External Commercial Borrowings on reverse charge basis was a contested question of law, finally resolved only after the relevant period. The appellant paid the service tax along with interest before issuance of any show cause notice and notified the department. On a plain reading of Section 73(3), where a person pays service tax on his own ascertainment (or after ascertainment by a Central Excise Officer) and informs the officer in writing, no notice under sub section (1) is required to be issued in respect of the amount so paid and, as clarified by Explanation 2, no penalty under the Act shall be imposed in respect of such payment. The Tribunal recorded absence of mala fide or suppression by the appellant, and accepted that the non payment in time arose from a bona fide, debatable interpretation of law. Applying Section 73(3) to these facts, the proceedings proposing penalty under Sections 76 and 78 were held to be impermissible and therefore set aside.

Penalties under Sections 76 and 78 set aside as the appellant paid service tax with interest before issue of notice and the case falls within the immunity provided by Section 73(3).

Final Conclusion: Appeal allowed to the extent of setting aside penalties; appellant entitled to immunity from penalty under Section 73(3) on account of payment of service tax and interest prior to issuance of show cause notice in circumstances of bona fide dispute over reverse charge liability.

Availability of Cenvat Credit only for taxable output service - trading not covered as exempted service prior to 01/04/2011 - reversal of Cenvat credit under Rule 6(3) of CCR, 2004 - explanation to Rule 2(e) (insertion in 2011) - proportionate reversal of credit attributable to trading - no penalty where dispute is one of legal interpretation

Trading not covered as exempted service prior to 01/04/2011 - explanation to Rule 2(e) (insertion in 2011) - Legal characterisation of trading for the period prior to 01/04/2011 and its effect on entitlement to Cenvat credit. - HELD THAT: - The Tribunal held that trading was not regarded as an "exempted service" (and was not a service at all) prior to the insertion of the explanation in Rule 2(e) with effect from 01/04/2011. Because the Cenvat Credit Scheme applies only where there is a taxable output (manufacturing of dutiable goods or provision of taxable output service), no credit was available for input services attributable to trading during the material time. The 2011 explanation cannot be given retrospective effect to make trading an exempted service for earlier periods. [Paras 6]

Trading before 01/04/2011 was not an exempted service and input service credit attributable to trading was not available.

Availability of Cenvat Credit only for taxable output service - reversal of Cenvat credit under Rule 6(3) of CCR, 2004 - proportionate reversal of credit attributable to trading - Whether the respondent must reverse Cenvat credit attributable to trading activities for the normal period. - HELD THAT: - The Tribunal applied the principle that Cenvat credit can be availed only to the extent input services are attributable to taxable output services. Where a dealer undertakes both trading and taxable services and uses common input services without maintaining separate accounts, the portion of credit attributable to trading must be denied and recovered by reversal. The adjudicating authority's finding that the demand for reversal lacked legal support was held unsustainable in view of this principle and the Tribunal's and High Court's earlier rulings recognising the need for proportionate reversal. [Paras 6, 9]

The respondent is liable to reverse Cenvat credit attributable to trading activities for the normal period, with applicable interest; the Revenue's appeal is allowed to that extent.

No penalty where dispute is one of legal interpretation - Whether penalty should be imposed in respect of the demand for reversal. - HELD THAT: - The Tribunal noted that the controversy is essentially one of legal interpretation and that there are conflicting decisions on the point. In such circumstances the demand was confined to the normal period and the imposition of penalty was held not appropriate. [Paras 9, 10]

No penalty is imposable on the respondent in respect of the reversal demand.

Final Conclusion: The appeal is allowed in part: the respondent must reverse Cenvat credit attributable to trading for the normal period prior to 01/04/2011 with interest, while no penalty is to be imposed.

Reliance on uncorroborated statements - retracted statements and cross-examination - burden of corroborative evidence for clandestine removal - penalty based on unsustainable demand

Reliance on uncorroborated statements - retracted statements and cross-examination - burden of corroborative evidence for clandestine removal - penalty based on unsustainable demand - Sustainability of the differential duty demand for 1998-99 and the consequential penalties where the assessment depends predominantly on statements subsequently retracted on cross-examination. - HELD THAT: - The adjudicating authority's confirmation of differential duty for 1998-99 and the attendant penalties rested predominantly on statements and documents derived from those statements. The Tribunal's earlier order (22.09.2004) remanded the matter for fresh consideration after directing cross-examination of witnesses because no independent corroborative evidence of clandestine removal (excess stock, fake invoices, documentary proof of suppressed production or physical movement without invoices) had been found. Cross-examination was conducted and the witnesses disavowed their earlier statements. The adjudicating authority nevertheless rejected the retractions as belated and relied on the original statements without adequately testing or reconciling the changed testimony, thereby exhibiting a preconceived view. Where incriminatory admissions are not supported by sufficient documentary or independent evidence, subsequent retractions obtained in cross-examination cannot be disregarded without reasoned assessment. Because the demand and penalties were founded predominantly on such uncorroborated and subsequently retracted statements, they are unsustainable. [Paras 5, 6]

Impugned order confirming the differential duty for 1998-99 and imposing penalties is set aside in toto; appeal allowed.

Final Conclusion: The appeal is allowed; the order confirming the differential duty for 1998-99 and the consequential penalties is set aside in its entirety, and consequential relief, if any, shall follow as per law.

Reversal of cenvat credit on removal of capital goods - used capital goods - interpretation of "as such" - proviso to Rule 3(5) of the Cenvat Credit Rules regarding payment on removal of used capital goods - binding precedent of the jurisdictional High Court

Reversal of cenvat credit on removal of capital goods - used capital goods - proviso to Rule 3(5) of the Cenvat Credit Rules regarding payment on removal of used capital goods - interpretation of "as such" - binding precedent of the jurisdictional High Court - Liability to reverse cenvat credit or pay duty when capital goods, on which cenvat credit was taken, are removed after having been used prior to the amendment dated 13.11.2007. - HELD THAT: - The Tribunal determined that prior to insertion of the proviso by Notification No.39/2007 dated 13.11.2007 there was no obligation to reverse cenvat credit or pay duty when capital goods, on which credit had been availed, were subsequently removed after having been put to use. The word "as such" in Rule 3(5) has been judicially construed to mean removal without use; goods sold after use cannot be treated as cleared "as such". The Tribunal relied on precedents of various High Courts and the Appellate Tribunal, and being bound by the decision of the jurisdictional High Court in Solectron Centum Electronics Ltd., held that the legal position before the amendment did not compel reversal of credit. Applying that principle to the facts - cenvat credit taken in 2006-2007 and the capital goods cleared on 10.05.2007 after being used - the demand for reversal of credit and duty was unsustainable and the impugned order was set aside. [Paras 5, 6]

The demand for reversal of cenvat credit/duty on removal of the used capital goods (cleared before 13.11.2007) is unsustainable; the impugned order is set aside and the appeal is allowed.

Final Conclusion: Appeal allowed; demand for reversal of cenvat credit/duty on the used capital goods cleared on 10.05.2007 (prior to the 13.11.2007 amendment) set aside with consequential relief, if any.

Abatement of appeal on winding up - continuance of proceedings by successor in interest/official liquidator - finality of unchallenged tribunal orders - pre-deposit requirement under Section 35F of the Central Excise Act

Abatement of appeal on winding up - continuance of proceedings by successor in interest/official liquidator - Whether the writ petition challenging the Tribunal's stay order remained maintainable after the Tribunal declared the company's appeals abated on winding up where no application for continuance was filed by the official liquidator. - HELD THAT: - The Court found that the Customs, Excise and Service Tax Appellate Tribunal had held that the appellant company was being wound up and that, in the absence of any application for continuance by the official liquidator in terms of Rule 22 of the CESTAT Procedure Rules, the appeals, stay applications and miscellaneous applications filed by the company shall be treated as abated. That Tribunal order was not challenged before this Court and has therefore attained finality. In view of the Tribunal's conclusive finding of abatement and the absence of any application by the official liquidator to continue the proceedings, the present writ petition seeking to quash the Tribunal's earlier direction and to restrain recovery was rendered infructuous. [Paras 2, 3, 4, 5]

Writ petition dismissed as infructuous because the appeals were held to have abated on winding up and the Tribunal's unchallenged order has attained finality.

Finality of unchallenged tribunal orders - pre-deposit requirement under Section 35F of the Central Excise Act - Whether any further relief could be granted in respect of the Tribunal's direction for deposit of duty under Section 35F after the appeals were treated as abated and the Tribunal's abatement order remained unchallenged. - HELD THAT: - The petition sought, inter alia, quashing of the Tribunal's direction to deposit 50% of the duty and mandamus against recovery. However, having regard to the Tribunal's later order treating the appeals as abated due to winding up and the lack of any continuance application by the official liquidator, the subject appeals and stay applications no longer subsist. As the abatement order stands unchallenged and final, the Court held that it cannot grant the substantive reliefs sought against the earlier direction concerning pre-deposit under Section 35F. [Paras 3, 4, 5]

No relief could be granted against the Tribunal's earlier direction regarding pre-deposit since the appeals were abated and the Tribunal's subsequent unchallenged order is final; petition rendered infructuous.

Final Conclusion: The writ petition is dismissed as infructuous because the CESTAT has held the company's appeals and related applications to have abated on winding up in the absence of any continuance application by the official liquidator, and that unchallenged Tribunal order has attained finality.

Modvat credit - capital goods - Rule 57Q of the Central Excise Rules - manner of use - inputs under Rule 57A - remand for factual determination

Modvat credit - capital goods - Rule 57Q of the Central Excise Rules - manner of use - Whether welding electrodes are entitled to modvat credit as capital goods under Rule 57Q of the Central Excise Rules in the appellant's factory - HELD THAT: - The Tribunal's rejection of the claim was based on reliance upon a Supreme Court decision concerned with inputs under Rule 57A; that reliance was incorrect because Jaypee Rewa Cement dealt with inputs under Rule 57A and not capital goods under Rule 57Q (paragraph 7). Although earlier decisions (the Tribunal's Larger Bench in Jawahar Mills and subsequent Supreme Court authorities) have addressed welding electrodes and other items, entitlement under Rule 57Q is not determined solely by the identity of the goods. Where an item is not plainly classifiable under the specific tariff Chapters listed in Rule 57Q sub-clause (d), eligibility as a 'capital good' depends on the actual manner in which the item is used in the manufacture of the final product in the assessee's factory (paragraphs 8-10). The record in this case does not disclose the exact manner in which welding electrodes are used in the appellant's factory; that factual aspect is essential to determine whether the definition of capital goods in Rule 57Q is satisfied (paragraph 9-10). Accordingly, the Tribunal's conclusion cannot be sustained without fresh consideration of the manner of use in the factory. [Paras 7, 8, 9, 10, 11]

Tribunal's order disallowing modvat credit on welding electrodes set aside and the matter remitted to the Commissioner for fresh decision on entitlement under Rule 57Q after examining the actual manner of use in the appellant's factory.

Used in or in relation to the manufacture - Whether the admitted substantial question framed as seeking interpretation of the words "used in or in relation to the manufacture" arises for decision - HELD THAT: - The words relied upon by the appellant do not form part of Rule 57Q during the relevant period (May to December,1995). Consequently, the framed question seeking their interpretation does not give rise to a substantial question of law in respect of Rule 57Q for that period and was accordingly dismissed (paragraph 6). [Paras 6]

Question seeking interpretation of the phrase "used in or in relation to the manufacture" dismissed as not arising under Rule 57Q for the relevant period.

Final Conclusion: The appeal is allowed in part: the Tribunal's disallowance of modvat credit on welding electrodes under Rule 57Q is set aside and the matter is remitted to the Commissioner for fresh consideration of entitlement after factual examination of the manner in which the electrodes are used; the separate question regarding interpretation of the phrase "used in or in relation to the manufacture" is dismissed as not arising for the relevant period.

Classification of goods - benefit under Heading 4823.90 - Chapter Heading 39 - binding precedent of the Supreme Court - finality of assessment and orders - reopening of finalised assessments - effect of subsequent contrary decision on prior final orders

Classification of goods - benefit under Heading 4823.90 - finality of assessment and orders - Entitlement of the petitioner to the benefit under Heading 4823.90 for the period covered by earlier decisions of the Collector/Commissioner (Appeals) and this Court. - HELD THAT: - The Court recorded that earlier orders - including the Collector's reclassification in favour of the assessee, the Appellate Authority's order dated 09.11.1994 in the assessee's case, and this Court's disposal dated 22.03.1996 - had held the product to be classifiable under Heading 4823.90 and thereby granted the assessee the benefit for the relevant years. Those orders attained finality and governed the classification for the period up to the date of the Court's order. Consequently, the Commissioner/assessing authority could not disturb or reopen assessments which had become final pursuant to those orders. [Paras 6, 7]

The petitioner is entitled to the benefit under Heading 4823.90 for the period covered by the earlier final orders; the impugned orders reopening those assessments are unsustainable and set aside.

Binding precedent of the Supreme Court - Chapter Heading 39 - effect of subsequent contrary decision on prior final orders - reopening of finalised assessments - Whether a subsequent Supreme Court decision classifying the product under Chapter Heading 39 empowered the Commissioner to reopen and set aside earlier final orders that had granted benefit under Heading 4823.90. - HELD THAT: - The Court acknowledged that a later decision of the Supreme Court (Backlite Highlamp Ltd) held the product classifiable under Chapter Heading 39 and observed that such decision binds courts and tribunals going forward. However, that subsequent ruling does not authorize reopening or rescinding assessments or orders which had already attained finality by reason of orders of the Collector/Commissioner (Appeals) and this Court. The Commissioner therefore had no power to reopen assessments already finalised pursuant to those earlier orders merely because of the later contrary decision. [Paras 6, 7]

A later Supreme Court classification in favour of Chapter Heading 39 cannot be used to reopen or disturb earlier final orders; the impugned action based on the subsequent decision is set aside.

Final Conclusion: Writ petition allowed; impugned orders setting aside earlier final classification under Heading 4823.90 are quashed and the petitioner retains the benefit granted by the earlier final orders; no costs.

Credit once validly taken - input tax credit reversal - exempted final products - Rule 6(1) of Cenvat Credit Rules, 2002 and reversal obligation - binding precedent

Credit once validly taken - input tax credit reversal - exempted final products - Rule 6(1) of Cenvat Credit Rules, 2002 and reversal obligation - Whether credit once validly taken must be reversed when the final products become exempt subsequently under Rule 6(1) of the Cenvat Credit Rules, 2002. - HELD THAT: - The Court held that the question is governed by the Division Bench decision in Tractor and Farm Equipment Ltd. v. Commissioner of Central Excise, Madurai-II, which was relied upon by the parties and against which a Special Leave Petition was dismissed by the Supreme Court. Applying that precedent, the Court accepted the Tribunal's conclusion that credit once validly taken need not be reversed merely because the final products subsequently became exempt. The appeal by the Revenue was therefore dismissed and the question of law answered in favour of the assessee and against the Revenue.

The Tribunal was correct in holding that reversal of credit was not required in the circumstances; appeal dismissed.

Final Conclusion: Appeal dismissed; question of law answered in favour of the assessee and against the Revenue, applying the Division Bench precedent whose SLP was dismissed by the Supreme Court.

Condonation of delay under Section 5 of the Limitation Act - sufficient explanation for delay - bonafide prosecution of rectification application - absence of negligence or deliberate delay by Revenue - delay condoned

Condonation of delay under Section 5 of the Limitation Act - bonafide prosecution of rectification application - absence of negligence or deliberate delay by Revenue - Application to condone delay of 502 days in preferring the Tax Appeal was allowed. - HELD THAT: - The Court found that after the CESTAT order dated 4-12-2014 the Revenue bona fide pursued a rectification application which was rejected on 10-9-2015, and the rejection was challenged before this Court by way of Tax Appeal No. 226/2016 which was dismissed on 28-4-2016. Thereafter, having obtained appropriate approval, the Department decided to prefer the present appeal and filed the condonation application along with the appeal. In these circumstances the delay was held to be sufficiently and properly explained; there was no deliberate delay or negligence on the part of the Revenue in not preferring the appeal within the limitation period. Applying the principles governing condonation under Section 5, the Court concluded that the delay deserved to be condoned. [Paras 4, 5]

Delay of 502 days in preferring the appeal is condoned and the application succeeds.

Final Conclusion: The condonation application under Section 5 of the Limitation Act is allowed; the 502-day delay in filing the Tax Appeal is condoned and the rule is made absolute, with no order as to costs.

Limitation for issuance of show-cause notice under Central Excise Act: one year and five-year exception for fraud, collusion, willful misstatement or suppression - absence of wilful misstatement or suppression and effect on limitation - mere divergence of judicial opinion not constituting fraud or dishonest concealment - CESTAT's factual finding on limitation as a pure question of fact

Limitation for issuance of show-cause notice under Central Excise Act: one year and five-year exception for fraud, collusion, willful misstatement or suppression - absence of wilful misstatement or suppression and effect on limitation - mere divergence of judicial opinion not constituting fraud or dishonest concealment - CESTAT's factual finding on limitation as a pure question of fact - Notice issued on 7-7-2008 was beyond the extended five-year limitation and whether the five-year exception under Section 11A(4) applied, or the one-year limitation under Section 11A(3) alone governed. - HELD THAT: - The Tribunal found that the conditions attracting the extended five-year limitation - fraud, collusion, willful misstatement or suppression of facts with intent to evade duty - were not made out. That finding was treated as a pure finding of fact by the High Court and held not to raise any substantial question of law. The Court agreed with the Tribunal's conclusion that the assessee had not withheld, misstated or suppressed facts; at most the assessee had claimed Cenvat credit on structural items in an area where there was a continuing divergence of judicial/viewpoints. Such divergence, and the absence of dishonesty or concealment, precludes treating the claim as fraudulent or as invoking the longer limitation period. Consequently the one-year limitation governed issuance of the notice and the notice was held to be beyond time. [Paras 5, 6, 7]

Tribunal's conclusion that the five-year exception did not apply is upheld; notice was barred by the one-year limitation and is quashed.

Final Conclusion: Appeal dismissed; CESTAT's finding that extended limitation under the statute was not attracted is affirmed and the notice is quashed as barred by the one-year limitation.

Effect of appellate setting-aside of adjudicatory order on continuance of criminal prosecution - Determination of assessable value in central excise valuation disputes - Impact of setting aside penalty by appellate forum on criminal liability - Limitation as a bar to revenue demand and its relevance to prosecution

Effect of appellate setting-aside of adjudicatory order on continuance of criminal prosecution - Impact of setting aside penalty by appellate forum on criminal liability - Whether prosecution under Section 9 of the Central Excise Act, 1944 could be sustained after the Customs, Excise and Service Tax Appellate Tribunal set aside the order of the Commissioner confirming demand and imposing penalty. - HELD THAT: - The Tribunal allowed the appellants' appeal and set aside the Commissioner's order which had confirmed the demand and imposed penalty, holding there was no legal basis for the valuation approach adopted by the Commissioner, recording that the department was aware of price variations and that the demand was liable to be barred by limitation. The High Court, relying on the Tribunal's order and precedents where appellate setting aside of adjudicatory findings defeated criminal prosecution, held that once the adjudicatory order imposing liability and penalty is set aside by the appellate authority, the foundation for criminal proceedings alleging evasion of duty and imposition of penalty collapses. Applying those authorities and the factual finding of the Tribunal that the impugned demand and penalty could not be sustained, the Court concluded that the criminal prosecution cannot be maintained. [Paras 9, 12]

Prosecution not sustainable after appellate order setting aside the adjudicatory demand and penalty; criminal case quashed.

Final Conclusion: The petition under Section 482 Cr.P.C. is allowed and Criminal Case No. 554 of 2003 under Section 9 of the Central Excise Act, 1944 pending before the Special Chief Judicial Magistrate (Economic Offences), Lucknow is quashed, the court concluding that prosecution cannot be sustained after the appellate forum set aside the Commissioner's order confirming demand and penalty.

Utilisation of credit of Additional Duties of Excise towards Basic Excise Duty - proviso to Rule 57F(12) extinguishing restrictions under Rule 57A and related notifications - availability of input credit even if inputs not used in manufacture of the final product - applicability of proviso for inputs received and used in factory on or after 1-3-1997

Utilisation of credit of Additional Duties of Excise towards Basic Excise Duty - proviso to Rule 57F(12) extinguishing restrictions under Rule 57A and related notifications - Credit of Additional Duties of Excise (AED) can be utilised towards payment of Basic Excise Duty notwithstanding Notification No. 5/94-C.E. (N.T.) which restricted utilisation to duties under the Additional Duties of Excise (Goods of Special Importance) Act, 1957. - HELD THAT: - The Court accepted the reasoning that insertion of the proviso to Rule 57F(12) operates to override the requirement of Rule 57A and the notifications issued thereunder. The proviso permits utilisation of specified duty credit in respect of any inputs towards payment of duty on any other final product, even if those inputs were not actually used in the manufacture of that other final product, subject to the condition that the inputs were received and used in the factory of production on or after 1-3-1997. The High Court relied on the view taken by the Karnataka High Court and its endorsement in Commissioner of Central Excise, Bangalore v. Beaver Automotive Pvt. Ltd., and held that for the period after insertion of the proviso the restriction in Notification No. 5/94-C.E. (N.T.) no longer precludes utilisation of AED credit towards basic excise duty. [Paras 3, 5, 6, 7]

Answered in favour of the assessee and against the department: AED credit may be utilised towards Basic Excise Duty in view of the proviso to Rule 57F(12).

Final Conclusion: Reference answered in favour of the assessee and against the department; benefit of the proviso to Rule 57F(12) extended to the assessee for the period after its insertion; no costs.

Summary order. Appeal dismissed for lack of merit.

Summary order. Civil appeal dismissed for want of merit.

Summary order. Civil appeal dismissed for non-prosecution as counsel for the appellant informed the Court that they were instructed not to appear and no other representative appeared.

Dismissal on ground of limitation - question of law kept open - special leave petition

Dismissal on ground of limitation - special leave petition - The special leave petition was dismissed on the ground of limitation. - HELD THAT: - The Court recorded that the special leave petition could not be entertained because it was barred by limitation. The dismissal was confined to the procedural ground of delay; no decision was rendered on the substantive legal questions raised in the petition. The order is therefore a final disposal of the petition only insofar as limitation operates as a bar to the relief sought.

Special leave petition dismissed on the ground of limitation.

Question of law kept open - The substantive question(s) of law raised in the petition were not decided and remain open for adjudication. - HELD THAT: - Although the petition was dismissed for being time-barred, the Court expressly refrained from deciding the substantive legal issues presented. Those legal questions were left open, indicating they were neither adjudicated on merits nor finally determined by this order and may be considered in appropriate proceedings unaffected by this dismissal on limitation.

Substantive question(s) of law not decided and kept open.

Final Conclusion: The special leave petition is dismissed solely on the ground of limitation; the substantive question(s) of law were not adjudicated and remain open for future consideration.

Order of assessment - appealable order - quasi judicial order - levy of duty and penalty - compelled deposit - revisional jurisdiction - restoration for decision on merits

Quasi judicial order - order of assessment - The communication dated 04.12.2010 is not an order of assessment and cannot be treated as a quasi judicial appealable order. - HELD THAT: - The Court examined the communication of 04.12.2010 and found that it merely recorded detention of the vehicle, payment made by the petitioner under compulsion and release of the goods pursuant to telephonic instructions from a superior officer. The communication did not reflect any adjudicative consideration or determination of the grounds for levying duty or the justification for imposing penalty at a particular rate. It therefore lacked the essential characteristics of a quasi judicial order of assessment and could not finalize demand of duty or penalty. [Paras 8]

04.12.2010 communication is not an order of assessment.

Appealable order - levy of duty and penalty - compelled deposit - The communication dated 26.11.2010 is to be treated as an appealable order assessing the duty and penalty liability which the department could not lawfully retain if it considered 26.11.2010 non appealable. - HELD THAT: - The Court held that if the 04.12.2010 communication is not an assessment order, the only communication capable of being an appealable order is the 26.11.2010 communication which recorded the demand of duty and penalty. The respondents therefore had no authority to treat the deposited sum as a finalized liability absent a proper assessment order. The assessment character of 26.11.2010 must be recognized for purposes of appeal and adjudication. [Paras 9, 11]

26.11.2010 shall be treated as an appealable order assessing duty and penalty.

Revisional jurisdiction - restoration for decision on merits - The revisional order (22.04.2015) and the Tribunal's order (20.10.2016) confirming it were set aside and the matter restored to the revisional authority for decision on merits. - HELD THAT: - The revisional authority had initially raised two grounds in notice-maintainability and merits-but set aside the appellate order solely on the ground that the appeal was not maintainable, without addressing merits. The Court found this approach erroneous because the appeal was maintainable. Consequently, both the revisional order and the Tribunal's confirmatory order were set aside and the proceedings were restored to the revisional authority to adjudicate the merits of leviability of duty and penalty. All contentions on leviability are kept open and the revisional authority was directed to decide the matter by a stipulated date. [Paras 10, 11]

Revisional order and Tribunal order set aside; proceedings restored to revisional authority for merits.

Final Conclusion: Writ petition allowed in part: orders dated 22.04.2015 and 20.10.2016 are set aside; 26.11.2010 to be treated as an appealable assessment order; proceedings remitted to the revisional authority to decide the merits afresh (with all contentions kept open) by the date directed by the Court.

Statutory appeal - condonation of delay in filing statutory appeal - setting aside of High Court order for non-exhaustion of statutory remedy - restoration of appeal to tribunal - consolidation of appeals - entertaining an appeal as having been filed in time

Statutory appeal - condonation of delay in filing statutory appeal - entertaining an appeal as having been filed in time - Appellant granted time to file a statutory appeal before the Sales Tax Tribunal and that appeal to be treated as filed in time. - HELD THAT: - The Court observed that the appellant had not availed the statutory remedy before the Sales Tax Tribunal and, without deciding the merits, exercised its discretion to permit the appellant to challenge the orders by filing a statutory appeal. A period of 30 days was granted to file the appeal and the Tribunal was directed to entertain such appeal as having been filed in time. The Supreme Court expressly refrained from any adjudication on merits and left open the right of both parties to raise all contentions before the Tribunal. [Paras 3, 4, 5]

High Court judgment set aside; appellant given 30 days to file statutory appeal before the Tribunal which shall be entertained as timely; merits not considered.

Restoration of appeal to tribunal - setting aside of tribunal order - consolidation of appeals - Order of the Sales Tax Tribunal set aside; the appeal restored to the Tribunal and directed to be heard consolidated with the appeal permitted in the other Civil Appeal. - HELD THAT: - In light of the disposition in the companion appeal, the Court set aside the Sales Tax Tribunal's order that was under challenge, restored the appeal to the Tribunal's file and ordered that it be heard by consolidating it with the appeal which the Court permitted to be filed under the other order. This direction implements consolidation and restoration so that the Tribunal can hear the matters together; no merits were decided by the Supreme Court. [Paras 2, 3]

Sales Tax Tribunal's order set aside; appeal restored and to be heard consolidated with the appeal permitted by the other order.

Final Conclusion: The High Court order is set aside and the appellant is granted 30 days to file a statutory appeal which the Tribunal shall treat as timely; the Tribunal's order is set aside, the related appeal is restored and directed to be consolidated and heard with the newly permitted appeal; no adjudication on merits was undertaken by this Court.

Sewing thread retains its identity as yarn despite dyeing - characterisation of goods for sales-tax liability - revisional assessment - binding effect of earlier High Court decision

Sewing thread retains its identity as yarn despite dyeing - characterisation of goods for sales-tax liability - binding effect of earlier High Court decision - Validity of the revisionary assessment orders passed for the years 1998-1999, 1999-2000 and 2000-2001 in light of the earlier decision in Popular Thread Factory - HELD THAT: - The Assessing Officer proposed and subsequently passed revisionary assessments relying on the Tribunal's decision in Tvl. Popular Thread Factory. The petitioner objected, noting that the correctness of that decision had been challenged before this Court. The Division Bench in Popular Thread Factory held that the activity of dyeing and putting yarn into spools does not change its character as cotton yarn and that sewing thread retains its identity as yarn; consequently the Tribunal's contrary conclusion was set aside. Applying that binding precedent, the Court found that the basis for revising the petitioner's assessments was unsustainable. In view of the decision in Popular Thread Factory, the impugned revisionary assessment orders could not be sustained and were set aside. [Paras 5, 6, 7]

Writ petitions allowed; impugned assessment orders for the stated years set aside.

Final Conclusion: The writ petitions were allowed and the revisionary assessment orders for 1998-1999, 1999-2000 and 2000-2001 were quashed as unsustainable in light of the Division Bench decision in Popular Thread Factory; no costs and connected petitions closed.

Section 8(2A) of the Central Sales Tax Act, 1956 - exemption "generally" under State sales tax law - conditional exemption / exemption operative only in specified circumstances - taxability of goods purchased at concessional rate when diverted from specified end use - distinction between levy of tax and imposition of penalty

Section 8(2A) of the Central Sales Tax Act, 1956 - exemption "generally" under State sales tax law - conditional exemption / exemption operative only in specified circumstances - Sale to UNICEF certified as required for its use is not covered by Section 8(2A) as a general exemption under the State law. - HELD THAT: - The Court held that Section 8(2A) applies only where the sale or purchase of goods is exempt from State sales tax 'generally' and not where the exemption is confined to specified circumstances or subject to conditions. The notification of 22nd December, 1976 exempting sales to UNICEF applies only to such goods as are certified by UNICEF to be required for its use and is therefore conditional. The Court relied on the interpretation in Commissioner of Sales Tax, J & K v. Pin Chemicals Ltd. where the Supreme Court explained that an exemption tied to particular circumstances or periods is not an exemption 'generally' for the purposes of Section 8(2A). Applying that principle, the exemption under the Bihar notification does not satisfy the 'generally' requirement of Section 8(2A), and consequently the sales to UNICEF are not entitled to nil or lower Central sales tax under Section 8(2A). [Paras 3, 4, 5, 6, 7]

Claim of exemption under Section 8(2A) in respect of sales to UNICEF is rejected; such sales are not covered as a general State exemption.

Taxability of goods purchased at concessional rate when diverted from specified end use - distinction between levy of tax and imposition of penalty - Store materials purchased at concessional rate for a specified end use, when sold/diverted for other purposes, are liable to Central sales tax at the normal rate (10%) and not the concessional rate (4%). - HELD THAT: - The Court found that goods bought at a concessional rate under Section 8(1) (or corresponding State provisions) are subject to usage conditions limiting them to a particular end use. Where such goods are diverted and sold to a registered dealer for other purposes, they cease to qualify for the concessional rate. The Court rejected the petitioner's contention that deviation should be addressed only by penalty provisions (Sections 10A / 10(d)), observing that imposition of a penalty is a separate concept and does not preclude taxing the diverted goods at the normal Central sales tax rate. Consequently, the assessing and appellate authorities were correct in levying tax at 10% on the sales of such store materials. [Paras 8, 9, 10]

Sales of store materials purchased at concessional rate but diverted from the specified end use are taxable at the normal Central sales tax rate; penalty provisions do not alter the taxability.

Final Conclusion: Writ petition dismissed; the authorities rightly disallowed the Section 8(2A) exemption for sales to UNICEF and correctly taxed diverted concessional rate store materials at the normal Central sales tax rate.

Prohibition on grant of liquor licence within 500 meters of national or state highway - Definition of "Highway" as notified by the competent authority - Effect of Schedule substitution under Section 2(2) of the National Highways Act, 1956 - Denotification under Section 2(3) of the National Highways Act, 1956 - Competent authority's certificate on highway status

Effect of Schedule substitution under Section 2(2) of the National Highways Act, 1956 - Denotification under Section 2(3) of the National Highways Act, 1956 - Definition of "Highway" as notified by the competent authority - Whether the stretch through Visakhapatnam continues to be part of National Highway No.16 after Gazette Notification S.O.1150(E) dated 01.05.2015 - HELD THAT: - The Court examined the substitution to the Schedule effected by the Central Government notification dated 01.05.2015 (S.O.1150(E)) and the subsequent clarification of the Ministry of Road Transport & Highways dated 24.05.2017 given in response to RTI queries. The substituted Schedule no longer lists 'Visakhapatnam' within the description of NH-16. The Ministry's clarification answered in the negative that a separate denotification under subsection (3) of Section 2 was required and confirmed that the realigned/omitted stretch is not to be treated as part of the National Highway for purposes of the Schedule. In these circumstances the Court concluded that the stretch through Visakhapatnam cannot be treated as forming part of NH-16 after the substitution effected by S.O.1150(E). [Paras 9, 11]

Visakhapatnam is not part of National Highway No.16 as per the substituted Schedule by Notification S.O.1150(E) dated 01.05.2015; the omitted stretch cannot be treated as NH-16.

Competent authority's certificate on highway status - Prohibition on grant of liquor licence within 500 meters of national or state highway - Whether the licensing authority correctly rejected the petitioners' applications relying on the Project Director, NHAI's letter certifying that NH-16 passes through Visakhapatnam - HELD THAT: - The Court found that the Project Director, NHAI issued a certificate asserting NH-16 passed through Visakhapatnam without properly accounting for the 01.05.2015 substitution to the Schedule. The licensing authority accepted that certificate and rejected applications on the ground that the premises fell within 500 meters of a national highway, but no notice was given to petitioners before rejection. Given the substituted Schedule and the Ministry's RTI clarification, reliance on the NHAI letter was erroneous. The Court further observed that Rule 25(1)(b) (and corresponding Rule 11(iv) of the 2017 Rules) prohibit grant of licences within 500 meters of national or state highways, but the present rejections were premised solely on national highway status which the Court found absent for Visakhapatnam. [Paras 10, 12]

Rejection of the applications based on the NHAI letter was erroneous and made without proper application of mind and without issuing notice to the petitioners.

Prohibition on grant of liquor licence within 500 meters of national or state highway - Definition of "Highway" as notified by the competent authority - Relief to be granted and the manner in which the licensing authority should proceed on reconsideration - HELD THAT: - In view of the findings that Visakhapatnam is not part of NH-16 under the amended Schedule and that the earlier rejections were erroneous, the Court directed that the impugned orders be set aside and that the respondents consider the petitioners' applications afresh. The licensing authority is to take into account the Schedule as substituted by Notification S.O.1150(E) dated 01.05.2015 and the Rules in force; the Court expressly left open consideration of restrictions arising from State Highways for the authority to examine if applicable. [Paras 13]

Impugned orders set aside; respondents directed to reconsider the applications in accordance with the substituted Schedule (S.O.1150(E) dated 01.05.2015) and applicable Rules.

Final Conclusion: Writ petitions allowed; orders rejecting applications for A4 shop/2-B bar licences on the ground that the premises fell within 500 meters of NH-16 are set aside. Respondents to reconsider the applications afresh in accordance with the Schedule substituted by Notification S.O.1150(E) dated 01.05.2015 and the relevant Excise Rules, leaving open any separate enquiry regarding State Highways. No order as to costs.