TaxTMI Updates e-Newsletter
Sep 03,2026

Alternative statutory remedy against GST adjudication - Consolidated show cause notice for multiple financial years - Natural justice and merits of adjudication

Maintainability of the writ petition against the GST adjudication order where the challenge concerned invocation of the extended-demand provision, audit proceedings, consideration of the assessee's defence and factual findings on the individual demand heads - HELD THAT: - The assessee had raised the objections before the adjudicating authority, participated in the proceedings and was afforded an opportunity to submit its defence.

The grievances concerning sufficiency of material for invoking the extended-demand provision, consideration of replies and documents, audit objections, tax payments or reversals, input tax credit, reverse-charge liability and export transactions required examination of the record and reappreciation of evidence.

A distinction had to be maintained between denial of hearing and a dispute regarding the manner in which the defence was evaluated; the latter was a merits challenge for the statutory appellate remedy. No patent lack of jurisdiction or manifest breach of natural justice was established. [Paras 39, 40, 42, 43, 44]

The writ jurisdiction was not attracted, and the assessee was required to pursue the efficacious statutory appeal.

Consolidated show cause notice for multiple financial years - HELD THAT: - The statutory language permits issuance of a notice for a period or periods, while the limitation for making the order is computed with reference to the financial year. The financial-year-based limitation does not require a separate notice for every financial year. Transactions across financial years may require joint examination, particularly where fraudulent availment or utilisation of input tax credit is alleged. Whether a demand for any particular financial year is time-barred remains an issue for the statutory appeal. [Paras 31, 32]

A consolidated notice covering multiple financial years did not constitute a patent lack of jurisdiction warranting writ interference.

Final Conclusion: The writ petition was dismissed as the challenges raised were amenable to the statutory appellate remedy. The assessee was left at liberty to file an appeal and seek exclusion of the period spent in the writ proceedings in accordance with law.

Ex parte tax determination proceedings - Failure to afford the petitioners an opportunity to respond to the show-cause notice and to have their objections considered before tax determination

HELD THAT: - As the respondents did not dispute the material facts stated in the petition and had not filed their affidavit-in-opposition, the Court directed fresh adjudication after affording the petitioners an opportunity of hearing and considering all objections raised in writing or physically. The merits of the controversy were expressly left open. [Paras 9]

The tax determination order was not sustained; the respondents were directed to hear the petitioners afresh and pass a reasoned order within the stipulated period, without any adjudication on merits.

Final Conclusion: The writ petition was disposed of with directions for fresh hearing and reasoned adjudication of the show-cause notice, while leaving the merits open to the respondents.

GST audit findings - Form GST ADT-02 - Communication of audit findings in Form GST ADT-02 following an audit under the Central Goods and Services Tax Act, 2017 - HELD THAT: - A notice issued under Rule 101(5) merely communicates the audit findings to the registered person in accordance with section 65(6). It is an administrative action and does not itself authorise recovery; any further action must be taken by the GST Department in accordance with the Act. [Paras 4, 5]

The apprehension that recovery would be effected solely on the basis of the audit-findings communication was held misconceived, and the petition was disposed of.

Final Conclusion: The audit-findings communication was treated as an administrative notice under Rule 101(5), with any consequential action required to be taken in accordance with the Central Goods and Services Tax Act, 2017.

Rejection of Kara Samadhana Scheme application - Reasoned order - Opportunity of hearing before adverse decision

Validity of rejection of the application seeking waiver of penalty and interest under the Kara Samadhana Scheme without disclosing the reasons for rejection - HELD THAT: - The impugned notice did not furnish the material particulars or reasons for rejecting the application under section 128A of the CGST/KGST Act, 2017. Its rejection without such particulars was held illegal and arbitrary. [Paras 4]

The notice was quashed and the respondents were directed to consider the representation afresh after affording sufficient and reasonable opportunity of hearing; coercive steps were restrained until such decision.

Final Conclusion: The writ petition was allowed, the unreasoned rejection notice was quashed, and fresh consideration of the representation after hearing was directed.

Denial of Personal hearing and principles of natural justice - Validity of the adjudication order where the petitioner had specifically sought a personal hearing but was not informed of its date and time

HELD THAT: - Consideration of the written reply alone did not satisfy the requirements of natural justice where the petitioner had expressly requested a personal hearing and the respondents had undertaken to communicate the hearing schedule. In the absence of material showing that the date and time of hearing were notified, the order was passed in breach of natural justice. [Paras 4, 5, 6]

The impugned order was quashed and the matter remanded for a fresh hearing and order in accordance with law, without any adjudication on merits.

Final Conclusion: The writ petition was allowed and the adjudication was remitted for fresh decision after affording the petitioner a personal hearing.

Statutory appellate remedy under Section 107 of the GST Act before the appropriate authority - HELD THAT:- Writ petition disposed of as withdrawn with liberty to pursue the statutory appellate remedy, subject to making the stipulated statutory deposit within the time granted.

Provisional attachment of bank accounts under customs law - Statutory limit on continuation of attachment - Continuation of debit freeze on the petitioners' bank accounts after completion of the investigation and expiry of the statutory period for provisional attachment - HELD THAT: - Section 110(5) permits provisional attachment of a bank account for a maximum period of six months, extendable once for a further period not exceeding six months upon recorded reasons. As more than one year had elapsed from the debit freeze, and the investigation had culminated in adjudication, no material or legal provision justified its continuance. Further, after filing of the appeal against the adjudication order with the mandatory pre-deposit, continued debit freeze was coercive and without sanction of law. [Paras 12, 13]

The continued debit freeze was held impermissible, and the bank accounts were directed to be defreezed.

Final Conclusion: The writ petitions were allowed and the respondents were directed to defreeze the petitioners' bank accounts.

Tax demand order and the appellate order rejecting the appeal as time-barred - Opportunity to reply to show-cause notice

HELD THAT: - Accepting the petitioner's assertion that the failure to file a reply and contest the proceedings was for bona fide reasons and due to unavoidable circumstances, the Court adopted a justice-oriented approach and granted one further opportunity to participate in the proceedings. [Paras 6]

The adjudication order confirming tax, interest and penalty, and the appellate order dismissing the appeal on limitation, were set aside and the matter was remitted for fresh consideration from the stage of filing a reply, subject to costs and compliance with the stipulated conditions.

Final Conclusion: The petition was allowed conditionally, with the GST proceedings restored for fresh adjudication after affording the petitioner a reasonable opportunity of hearing.

GST registration cancellation for non-reply to show-cause notice - whether non-response was attributed to bona fide and unavoidable circumstances? - HELD THAT: - Accepting the assertion that the petitioner could not respond for bona fide reasons and sufficient cause, the Court adopted a justice-oriented approach and considered it appropriate to afford one further opportunity. [Paras 5, 8]

The cancellation order was quashed and the registration was directed to be restored, subject to filing pending returns and payment of up-to-date tax, interest and penalty within the stipulated period.

Final Conclusion: The writ petition was allowed and the GST registration was directed to be restored subject to compliance with the stipulated conditions. The order was confined to the peculiar facts and circumstances of the case and was declared non-precedential.

Penalty proceedings under GST law - Denial of cross-examination of persons whose statements were relied upon for imposition of penalty under the GST law - HELD THAT: - The petitioner had specifically sought cross-examination of the persons whose statements formed the basis of the penalty proceedings. Passing the adjudication order without acceding to that request constituted a gross violation of the principles of natural justice. The merits of the allegations were not examined. [Paras 9, 10, 11, 12]

The penalty order and consequential notices were set aside, and the matter was remanded for fresh consideration after supply of relevant documents, personal hearing, cross-examination of the relied-upon persons, and opportunity to file a fresh reply.

Final Conclusion: The writ petition was disposed of by setting aside the impugned penalty proceedings for breach of natural justice and remanding the matter for an independent fresh decision on merits.

Rectification application rejected - non-consideration of contentions - Principles of natural justice

Rejection of the GST rectification application without considering the contentions raised therein or affording sufficient and reasonable opportunity - HELD THAT: - The rectification application contained various contentions, but the impugned rejection did not consider them. The application was summarily dismissed without sufficient or reasonable opportunity, resulting in violation of the principles of natural justice. [Paras 5]

The rejection of the rectification application was set aside and the matter was remitted for fresh consideration in accordance with law.

Final Conclusion: The petition was allowed, the order rejecting rectification was set aside, and the rectification application was remitted for fresh consideration in accordance with law.

Opportunity to contest show-cause notice proceedings - Restoration of goods and services tax demand proceedings where the assessee had not replied to the show-cause notice owing to asserted bona fide and unavoidable circumstances

HELD THAT: - Accepting the asserted sufficient cause for the failure to reply and contest the proceedings, the Court adopted a justice-oriented approach. It held that the assessee should receive one further opportunity to file a reply, produce documents and be heard before fresh consideration of the demand. [Paras 6]

The adjudication and appellate orders were set aside and the matter was remitted for fresh consideration from the stage of filing a reply to the show-cause notice, subject to the conditions imposed by the Court.

Final Conclusion: The petition was allowed conditionally, restoring the proceedings for fresh adjudication after affording the assessee a reasonable opportunity to contest the show-cause notice.

Opportunity of hearing in tax adjudication - Assessment orders and consequential GST demands passed without the petitioner having contested the proceedings before the assigned officer

HELD THAT: - Without deciding whether a fresh notice was required after assignment of the proceedings, the Court held that the petitioner should be afforded an opportunity to contest the show-cause notice and raise the factual assertions directed against the assessment orders. The merits of the rival contentions were left open for fresh consideration after objections and an adequate hearing. [Paras 4, 7]

The impugned assessment orders, consequential demands and subsequent notice were quashed; the petitioner was permitted to file objections, and the officer was directed to proceed afresh in accordance with law after granting an adequate opportunity of hearing.

Final Conclusion: The writ petition was partly allowed by quashing the impugned orders, demands and notice, with directions for return of seized documents upon application and fresh adjudication after receipt of objections. All merits were kept open.

Detention of goods accompanied by tax invoice - proceedings against owner of goods - penalty imposed against the petitioner u/s 129 (1) (a) OR u/s 129 (1) (b) - Restoration of GST registration

Whether detention penalty was required to be imposed under Section 129(1)(a), rather than Section 129(1)(b), where the goods were accompanied by a tax invoice and the petitioner's suspended registration was subsequently restored? - HELD THAT: - As the goods in transit were accompanied by a tax invoice, the petitioner could be regarded as their owner. The subsequent restoration of registration precluded treating the consignor or consignee as bogus; consequently, proceedings could not be maintained under section 129(1)(b) on the premise that the petitioner was unregistered. Following the earlier decision of this Court, the penalty proceedings were required to be treated as proceedings under section 129(1)(a). See case Shri Raju Ujir /M/s R.R. Enterprises [2025 (8) TMI 632 - ALLAHABAD HIGH COURT] [Paras 9, 11, 12]

The impugned orders were modified to the extent that the penalty was enforceable under section 129(1)(a), and not section 129(1)(b), of the Act.

Final Conclusion: The writ petition was partly allowed, with the impugned orders modified to treat the penalty proceedings as having been taken under section 129(1)(a) of the Act.

Condonation of delay in GST appeal - sufficient cause of delay in filing the appeal

Delay in filing the statutory appeal - HELD THAT: - Though the Appellate Authority was bound by the statutory limitation under the GST enactments, the reasons preventing timely filing of the appeal were beyond the petitioner's control. Non-adjudication on merits would cause grave injury and prejudice following the cited Division Bench decisions like M/S. M.R. TRADERS [2026 (2) TMI 99 - RAJASTHAN HIGH COURT], M/S MOLANA CONSTRUCTION COMPANY [2024 (8) TMI 384 - RAJASTHAN HIGH COURT], MAN SINGH TANWAR [2024 (9) TMI 1232 - RAJASTHAN HIGH COURT] and RPC PSIPL JV [2025 (7) TMI 1998 - RAJASTHAN HIGH COURT],the delay was condoned. [Paras 6, 7, 8]

The delay of 95 days beyond the period of relaxation under the statutory appeal provision was condoned, with liberty to file a fresh appeal within four weeks for adjudication on merits in accordance with law.

Refund of duplicate GST recovery - Claim for refund of the alleged duplicate recovery of the GST demand - HELD THAT: - The Court did not determine whether the demand had in fact been recovered twice, but considered it appropriate to require verification of the petitioner's averment. [Paras 9]

The respondents were directed to verify the claim and, if duplicate recovery is found, refund the excess amount with applicable interest.

Final Conclusion: The writ petition was disposed of by condoning the delay and permitting a fresh statutory appeal to be decided on merits. The respondents were also directed to verify the alleged duplicate recovery and refund any excess amount with applicable interest.

Penalty u/s 271D and 271E - mandation of recording satisfaction to be recorded in the reassessment proceedings by the concerned AO - HELD THAT:- The special leave petition is dismissed on the ground of delay as well as on the merits. HC order confirmed [2025 (2) TMI 238 - RAJASTHAN HIGH COURT].

Advertisement and market promotion (AMP) expenditure as an international transaction - Bright line Test in transfer pricing - application of TNMM and segmentation for benchmarking - comparability analysis for selection of comparables - protective adjustment to preserve revenue interest

Gross delay of 609 days and 457 days respectively in filing the Special Leave Petitions which has not been satisfactorily explained by the Revenue.

The Special Leave Petitions are, accordingly, dismissed on the ground of delay. Question of law is kept on.

Payment for royalty under DTAA - copyright in computer software - non-exclusive, non-transferable licence - distinction between right to reproduce and right to use - off-the-shelf / shrink-wrapped software -

HELD THAT:- The Special Leave Petition was dismissed in view of dismissal of similar Special Leave Petitions.

Validity of reassessment initiation against deceased assessee- Jurisdictional defect in reassessment proceedings - Proceedings against legal representative of deceased assessee -

HELD THAT: - Service of a show cause notice upon the assessee is a condition precedent to an order under Section 148A(3) and a notice under Section 148. A notice issued to a person who was dead on its issuance does not meet that requirement and constitutes a foundational jurisdictional defect, incapable of cure by subsequent proceedings against the legal representative.

Section 159 requires proceedings for reassessment of a deceased person's income to be taken against the legal representative; it does not validate proceedings initiated against a dead person, particularly where the Department had prior knowledge of the death. The legal representative's participation after expressly raising the jurisdictional objection could not confer jurisdiction. [Paras 10, 11, 12, 13, 14]

The show cause notice was held invalid and non-est; the consequential order, reassessment notice and proceedings were quashed, without precluding fresh proceedings against the legal representative in accordance with law.

Final Conclusion: The writ petition was allowed and the reassessment proceedings initiated against the deceased assessee were quashed. Fresh proceedings against the legal representative, if otherwise permissible in law and within limitation, were left open.

Immunity from penalty u/s 270AA for under-reporting consequent upon misreporting of income - Opportunity of hearing on rejection of immunity application - HELD THAT: - Section 270AA does not extend immunity to proceedings initiated in the circumstances specified in Section 270A(9). The show-cause notice described the case as one of under-reporting in consequence of misreporting, and the omission to specify the particular subcategory of Section 270A(9) did not render it arbitrary or contrary to natural justice, particularly when the assessment order had put the petitioner on notice of the basis for treating the income as so misreported. Since the application was outside the statutory immunity framework, the Department was not obliged to decide it within the prescribed period. [Paras 9, 10, 13, 14]

The rejection of immunity from penalty was upheld and the challenge based on the notice, denial of hearing and delay in deciding the application was rejected.

Final Conclusion: The writ petition was dismissed, the Court holding that immunity under Section 270AA was unavailable where the penalty proceedings concerned under-reporting in consequence of misreporting of income.

Condonation of delay in furnishing Form No. 10B - Genuine hardship under discretionary condonation power

Whether a two-day delay in filing Form No. 10B for claiming exemption should be condoned under Section 119(2)(b) of the Income-tax Act, 1961? - HELD THAT: - The power to condone delay is to be exercised to advance substantive justice, with genuine hardship to the assessee being a relevant consideration. The Court found reasonable cause for the short delay and held that refusal to condone it would cause genuine hardship by depriving the trust of its claimed exemption. See SITALDAS K. MOTWANI [2009 (12) TMI 36 - BOMBAY HIGH COURT] and MIRAE ASSET FOUNDATION [2025 (7) TMI 682 - BOMBAY HIGH COURT] [Paras 13, 14, 17, 18]

The rejection of the condonation application was quashed, the two-day delay was condoned, and the return was directed to be processed in accordance with law by treating Form No. 10B as having been filed within time.

Final Conclusion: The writ petition was allowed by condoning the delay in filing Form No. 10B and directing reprocessing of the return on that basis.

Assessment of co-operative bank deposits as unsecured loans -

HELD THAT: - The balance sheet relied upon by the petitioner showed that the amount treated in the assessment as unsecured loans represented its deposits. Having regard to this apparent error in the assessment, the Court held that the assessment order warranted interference, while leaving all merits open for fresh proceedings. [Paras 5]

The assessment order was quashed, with liberty to issue notice and undertake fresh proceedings in accordance with law; all contentions on the merits were left open.

Final Conclusion: The writ petition was allowed and the assessment order was quashed, subject to liberty to the revenue authorities to conduct fresh proceedings in accordance with law.

Refund of tax deducted at source from land-acquisition compensation - Compensation payable to land losers under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 - petitioners had not filed an application under Section 119(2)(b) of the I.T. Act nor had they filed returns for the Assessment Year 2015-16

HELD THAT: - Compensation payable to land losers under the Act of 2013 is not amenable to income-tax deduction or payment. The TDS deducted from the compensation was therefore refundable. The rejection founded on non-filing of returns and absence of an application for condonation was quashed, while requiring filing of the prescribed condonation application and return for processing of the refund. [Paras 7, 8, 9]

The petition was allowed; upon filing of the application for condonation and the return, the delay was directed to be condoned and the return processed for grant of the TDS refund.

Final Conclusion: The impugned rejection was quashed and the petitioners were enabled to seek condonation and file the return, following which the TDS deducted from the land acquisition compensation was directed to be refunded.

Retention of seized cash after completion of searched person's assessment - Adjustment of seized cash against tax liability of non-searched assessee -

Whether seized cash could continue to be retained u/s 132B after completion of the searched person's assessment and be withheld against subsequently initiated reassessment proceedings concerning a non-searched assessee? - HELD THAT: - The statutory charge over the seized cash under Section 132B stood extinguished upon completion of the searched person's assessment. The Department could not thereafter withhold the cash by initiating subsequent reassessment proceedings against the assessee, who was not searched and against whom no warrant of authorisation had been issued. Although the Assessing Officer could have been justified in declining to treat the cash as self-assessment tax when the return was filed, the completion of the searched person's assessment without any demand on that cash, coupled with acceptance that it belonged to the assessee, established the assessee's entitlement to its release after adjustment of its tax liability. [Paras 14, 15, 16, 17]

The stay application was rejected; the Assessing Officer was directed to release the seized cash after adjustment of the tax liability, while the calculated interest was directed to be kept in an interest-bearing deposit pending the Larger Bench decision on entitlement to interest.

Final Conclusion: The appeal was admitted on the stated questions of law. Pending its disposal, the Department was not permitted to retain the seized cash after adjustment of the assessee's tax liability.

Concurrent findings of fact in income-tax appeal - Reassessment - addition of bogus construction expenses - addition already considered in original assessment - absence of new material

Reassessment - double addition - Concurrent findings of fact - addition relating to construction expenses allegedly forming part of the original assessment - HELD THAT: - The appellate authorities concurrently found that the amount had already been assessed to tax or considered in the original assessment while examining capital gains. This was a finding of fact, and no question of law arose for interference in an appeal under section 260A. [Paras 6, 7]

The deletion of the addition was upheld.

Reassessment - absence of new material - Fictitious long-term capital loss on sale of shares - HELD THAT: - The appellate authorities found that no new information or material had come to the Assessing Officer's notice and that the matter had already been considered in the original assessment. The Court found no error in that conclusion. [Paras 8]

The deletion of the addition was upheld.

Final Conclusion: No substantial question of law arose from the concurrent findings of the appellate authorities. The income-tax appeal was dismissed.

Writ petition by the Revenue questioning order passed by the Advance Ruling Authority [2010 (8) TMI 8 - AUTHORITY FOR ADVANCE RULINGS] - Writ petition challenging the advance ruling when no assessment proceedings were pending

HELD THAT:- The writ petition was disposed of as no assessment proceedings were pending, with liberty to the Revenue to seek reopening if any such proceedings are found pending.

Exemption u/s 10(10AA) (ii) towards the leave encashment received by the Petitioner at the time of superannuation - exemption of leave encashment under the enhanced limit notified from 01.04.2023 - petitioners are retired employees who have attained the age of superannuation prior to coming into force of the said notification dated 24.05.2023 and petitioners seek to avail the benefit of the said notification for the purpose of claiming exemption of encashment made towards earned leave.

HELD THAT:- Considering contention of petitioners that the present petitions having been filed prior to the expiry of the time limit for having filed a revised return under Section 139(5) of the Act, the petitioners are entitled to file a revised return and liberty is reserved to the petitioners to avail the remedies as available under the provisions of the Act, present writ petitions are disposed of accordingly.

All rights and contentions of parties in that regard are kept open to be considered in the said proceedings.

Provision for contractual major repairs - Accrued liability as distinguished from contingent liability - Allowability of provision for major road repairs required under a BOT concession agreement, though the repairs were to be undertaken in a future period - HELD THAT: - Where a contractual obligation to undertake major maintenance had arisen under the concession agreement, the resulting liability was one in praesenti, though its discharge was deferred. A provision based on realistic and scientifically determined estimates of the maintenance expenditure was therefore not a contingent liability merely because the actual repairs were to be carried out subsequently. [Paras 11, 12]

The provision for major repairs was deductible, and no substantial question of law arose from the concurrent findings allowing the claim.

Final Conclusion: The Revenue's appeal was rejected, the deduction for the scientifically estimated provision for contractual major repairs having been upheld.

Validity of Reassessment proceedings - non-application of mind in recording reasons and grant of approval

HELD THAT: - For 2016-17, the recorded reasons incorrectly described the assessee as a non-filer and ambiguously referred to transactions as being through bank or cash. For 2019-20, the information did not disclose transaction-wise or party-wise particulars and the initial allegation was inconsistent with the subsequently identified transaction. The discrepancy in the alleged escaped income, read with the erroneous factual premises, established non-application of mind by the Assessing Officer in recording reasons and by the approving authority in granting approval. Such defects vitiated the very foundation of the reassessment proceedings. See NARENDRA KUMAR SHAH [2023 (11) TMI 345 - BOMBAY HIGH COURT] wherein held such discrepancy shown non application of mind by all those persons who had endorsed their approval for issuance of notice u/s 148 of the Act, benefit the case of assessee. [Paras 10, 11, 12, 13, 14]

The reassessment notices and all consequential orders were quashed, and both appeals were allowed.

Final Conclusion: The reassessment proceedings for both assessment years were held invalid for non-application of mind in the recorded reasons and approval, and the impugned notices and consequential orders were quashed.

TDS u/s 194C - External Development Charges paid to HSVP/Haryana Shehri Vikas Pradhikaran - Assessee in default for non-deduction of tax at source

HELD THAT: - Following the jurisdictional High Court's decision [2024 (2) TMI 756 - DELHI HIGH COURT], the Tribunal held that HSVP does not fall within the exclusions applicable to payments to the Government. Its constitution under a statutory enactment, or the governmental character of its functions, does not render it the Government for this purpose. Consequently, External Development Charges paid to HSVP attract tax deduction at source under section 194C. [Paras 5, 6]

The assessee was rightly treated as an assessee in default under section 201(1) for failure to deduct tax at source.

Final Conclusion: The impugned order treating the assessee as an assessee in default for non-deduction of tax at source on External Development Charges paid to HSVP was upheld, and the appeal was dismissed.

FSSAI clearance and customs reclassification of imported food - Release of imported roasted arecanut splits after issuance of a no-objection certificate by FSSAI, despite subsequent customs testing and seizure

Whether imported food goods cleared by the food-safety authority as conforming could be seized and subjected to a bank-guarantee condition for provisional release on the basis of a proposed customs reclassification? - HELD THAT: - Following NBG International Private Limited v/s The Union of India and Ors. [2026 (3) TMI 1212 - BOMBAY HIGH COURT] the Court held that the FSSAI no-objection certificate follows the prescribed laboratory analysis and embodies a conclusive finding on conformity of the imported food product. Customs could not adopt a contrary position by reopening the classification of goods already cleared by FSSAI for human consumption. [Paras 9, 10]

The seizure memo and the condition requiring bank guarantee for provisional release were quashed, and release of the goods without bank guarantee was directed, subject to obtaining a fresh FSSAI fitness certificate before their sale in the open market.

Final Conclusion: The petition was allowed. The seizure and bank-guarantee condition were quashed, and release of the imported goods was directed without bank guarantee, subject to fresh FSSAI fitness certification before sale.

Denial of personal hearing while deciding Revision Applications, leading to violation of the principles of natural justice

HELD THAT: - The petitioners were afforded four opportunities of personal hearing, including a final virtual hearing after accommodation of their requests concerning the mode and timing of hearing. Their assertion that counsel attended the final hearing was unsubstantiated and was contradicted by the personal-hearing sheet recording appearance only by the Department. Their failure to seek a further hearing before pronouncement of the order further negatived the plea of denial of hearing. The erroneous recording of the hearing time in the impugned order was a clerical discrepancy, clarified by the personal-hearing sheet, and did not establish a breach of procedural fairness. [Paras 13, 14, 15, 16, 17]

The principles of natural justice were complied with; the plea that the revisional order was void for denial of personal hearing was rejected.

Final Conclusion: The writ petition was dismissed as the petitioners had been afforded adequate opportunities of hearing and had failed to avail themselves of them.

Customs Broker revocation inquiry - right of cross-examination - Remand to cure procedural infirmity

Customs Broker licence-revocation proceedings - Reliance on witnesses' investigation statements in proceedings for revocation of a Customs Broker licence without affording cross-examination - HELD THAT: - Section 108 empowers the Customs officer to summon persons in an inquiry, while Section 138B concerns relevancy of statements in the circumstances specified therein and principally relates to offences and prosecutions; the revocation proceedings were not a prosecution.

Where oral evidence is relied upon in an inquiry under the Customs Brokers Licensing Regulations, Regulation 17(3) requires relevant oral evidence to be taken and Regulation 17(4) entitles the Customs Broker to cross-examine persons examined in support of the charges. This statutory right could not be disregarded by relying upon investigation statements without examining the witnesses. [Paras 18, 19]

The direction to afford the Customs Broker an opportunity to cross-examine the witnesses whose statements were relied upon was upheld.

Validity of remand for fresh adjudication to rectify denial of cross-examination in Customs Broker licence revocation proceedings - HELD THAT: - The remand was founded on a procedural infirmity in the inquiry and did not permit the Department to fill a lacuna. No prohibition against remand in proceedings under the Customs Brokers Licensing Regulations was shown. A procedural error capable of rectification by granting the Customs Broker the requisite opportunity does not necessarily require the revocation proceedings to be set aside altogether. [Paras 20, 21]

The remand for fresh adjudication after affording cross-examination was sustained.

Final Conclusion: The appeal was dismissed, and the remand for fresh adjudication in accordance with the right of cross-examination under the Customs Brokers Licensing Regulations was maintained.

National Litigation Policy - exceptions to monetary limits -classification exception - Maintainability of the Revenue's appeal concerning classification of imported gold jewellery despite the monetary-limit policy exception for classification issues of legal or recurring nature - HELD THAT: - The exception clauses under the applicable litigation-policy instructions confer an option upon the Department to pursue an appeal in specified cases; they do not operate automatically. The Tribunal had specifically sought the Revenue's stand on applicability of the policy, and the Departmental Representative did not contest its application. The Revenue's subsequent restoration application, founded on the exclusions, was dismissed and that order attained finality. [Paras 11, 12, 13]

The exception could not be invoked to reopen the appeal, and the substantial question of law was answered against the Revenue.

Final Conclusion: The Revenue's appeal was dismissed, there being no merit in its challenge to the Tribunal's dismissal of its appeal under the National Litigation Policy.

Entitlement to interest on the amount voluntarily deposited during investigation and subsequently refunded - HELD THAT: - Following the coordinate Bench decisions Patel Labour Contractors Pvt. Ltd.[2026 (1) TMI 654 - CESTAT AHMEDABAD] AND KLJ Plasticizers Ltd. [2025 (11) TMI 1459 - CESTAT AHMEDABAD] holding that retention of an investigation deposit warrants interest from the date of deposit until refund, the Tribunal held that the appellant was entitled to interest notwithstanding that the refund claim had been sanctioned within three months of its filing. [Paras 2]

The appeal was allowed and interest at 12% per annum was directed to be paid from the date of actual payment until the date of refund.

Final Conclusion: The rejection of interest was overturned. The refunded investigation deposit carries interest at 12% per annum from its payment until refund.

Denial of Preferential tariff treatment based on AIFTA Certificates of Origin - Extended limitation for alleged fraudulent Certificates of Origin

Denial of preferential tariff treatment for Polyester Knitted Fabrics on the allegation that the Malaysian Certificates of Origin were fabricated - HELD THAT: - Rules 7(c) and 7(d) of the Origin Rules are incorporated domestic provisions governing non-acceptance of an AIFTA Certificate of Origin; Rule 23 does not dispense with those procedural obligations merely because fraud is suspected. The verification was delayed, confined to only 15 of the 29 certificates, and unsupported by test reports establishing Chinese origin, expert evidence concerning the disputed signatures, or authenticated underlying material. The foreign report, stating only that the certificates were non-authentic and issued to another company, could at best warrant investigation and did not establish fraud. [Paras 5]

The alleged fraudulent origin declaration was not established, and the preferential exemption could not be denied on the basis of the delayed and deficient verification.

Extended period of limitation under section 28(4) - Importer's conscious involvement in false Certificates of Origin - HELD THAT: - Malafide conduct of the appellant has to be on record to prove that the ingredient of Section 28(4) were required to be invoked. Similarly in Kapadia Enterprise vs UOI [2013 (4) TMI 301 - GUJARAT HIGH COURT] it has been clearly held that if a person is not involved to a fraud or collusion or wilful misstatement, he cannot be subjected to extended period.

For invoking section 28(4), the Department must specifically allege and establish a positive act of collusion, wilful misstatement or suppression by the importer, including conscious knowledge of, or involvement in, the falsification of the Certificates of Origin. The statements relied upon were not culpatory, and the material on record did not establish the importer's knowledge or participation in any fraud. Delay in the statutory verification process and the absence of tangible evidence of fraud further precluded recourse to the extended period. [Paras 5]

The extended period under section 28(4) was not invocable; consequently, the duty demand, interest and penalties were unsustainable.

Final Conclusion: The appeals were allowed with consequential benefits. The duty demand, interest and penalties founded on the extended period were held unsustainable.

Refund of additional duty of customs - Procedural deficiencies in refund claims - Limitation for curing deficiencies in refund claims - Unjust enrichment

Rejection of refund of additional duty of customs on the ground of deficiencies in the chartered accountant's certificate and supporting documents - HELD THAT: - The original refund claim was accompanied by a chartered accountant's certificate, self-declaration and documents identifying the retail invoice, and the certificate affirmed that the duty incidence had not been passed on. The subsequently sought certificate and abstract merely furnished the requested particulars and again certified non-passing of the duty burden.

The Department's insistence on further documents was not shown to be mandated by the governing notification, public notice or circular. The relevant date for determining timeliness was the date of original submission of the refund claim; curing perceived deficiencies thereafter did not render the claim time-barred. The lower authorities failed to examine the documents so furnished and raised untenable objections inconsistent with the prescribed approach to such refunds. [Paras 9, 10, 11]

The rejection of the refund claim was set aside, and the refund sanctioning authority was directed to process and sanction the claim after considering the documents furnished in response to the Department's request.

Final Conclusion: The appeal was allowed with consequential relief, the impugned order was set aside, and the refund claim was directed to be processed and sanctioned after considering the documents submitted by the appellant.

Redetermination of customs value - disclosure of basis - Redemption fine on re-export of prohibited imported goods

Redetermination of customs value - disclosure of basis - Redetermination of the value of imported miscellaneous goods without disclosing the method adopted - HELD THAT: - The order did not disclose the method by which the revised value had been arrived at. Since value constituted the basis for determination of duty, interest, fine and penalty, the absence of a stated valuation basis required fresh examination. [Paras 5, 7]

The valuation and consequential determination of duty, interest, fine and penalty were remanded to the Original Authority for fresh decision after affording reasonable opportunity and issuing a speaking order.

Redemption fine on re-export of prohibited imported goods - Imposition of redemption fine where prohibited imported goods are permitted to be re-exported - HELD THAT: - Issue received the attention of the Larger Bench of this Tribunal in the case of Hemant Bhai R. Patel [2003 (2) TMI 87 - CEGAT, NEW DELHI (LB)] wherein after examining the Tribunals order in K & K Gems [1998 (2) TMI 189 - CEGAT, MUMBAI] was of the opinion that it is open to the adjudicating authority to impose redemption fine as well as penalty even when permission is granted for re-exporting the goods. The Order also examined and distinguished the judgment of Siemens Ltd. [1999 (8) TMI 84 - SUPREME COURT] which was based on the peculiar facts of the case. Imposition of redemption fine on the re-export of prohibited goods cannot be faulted.

Goods imported in breach of a statutory prohibition are liable to confiscation under section 111(d) of the Customs Act. Confiscation precedes redemption under section 125, whereas permission to re-export operates separately after the importer regains title on redemption; consequently, re-export permission does not preclude redemption fine. [Paras 6]

The legal validity of imposing redemption fine on re-export of prohibited goods was upheld.

Final Conclusion: The appeal was disposed of by remanding the valuation and consequential liabilities for fresh adjudication. The legal permissibility of redemption fine upon re-export of prohibited goods was affirmed.

Limitation for Official Liquidator's claims after winding up - Exclusion of time in winding up proceedings

HELD THAT: - A Division Bench of this Court in Antony v. Chandni Chits Pvt. Ltd. [2015 (12) TMI 1670 - KERALA HIGH COURT] considered an identical situation like the one in the case at hand noticed that since the order of winding up was passed on 04.04.1990, the claim could be filed on or before 04.04.1994. However, since in that case the claims were filed beyond the said date, the Division Bench allowed the appeals, setting aside the judgment and decree of the Company Court.

The Official Liquidator's right to lodge a claim under the Companies Act arises upon the making of the winding-up order, provided the claim was legally enforceable when the winding-up proceedings commenced. Article 137 then affords three years from the winding-up order, while Section 458A excludes the period of winding-up proceedings and grants a further year following that order. The claim was consequently within the aggregate four-year period. [Paras 7, 8, 9, 10]

The objection that the Company Claim was barred by limitation was rejected.

Final Conclusion: The Company Claim was held to have been instituted within limitation, and the preliminary objection was rejected.

Exemption from strict enforcement with respect to competing offer to acquire a non-banking financial corporation (NBFC) - Competing open offers - 15-working-day period from detailed public statement - Exemption from open-offer obligation - non-relaxation of competing-offer timelines

Acquisition of non banking company - Competing open offers - 15-working-day period from detailed public statement - Whether statutory timeline for making a competing open offer could not be reckoned from the dispatch or advertisement of the first acquirer's letter of offer? - HELD THAT: - Regulation 20(1) is unambiguous: a competing acquirer must make a public announcement within fifteen working days of the detailed public statement issued by the first acquirer. A letter of offer, or its subsequent advertisement, cannot be treated as the detailed public statement. Such construction would disrupt the identical timelines mandated for competing offers, cause uncertainty, and unfairly prejudice the first offeror that had complied with the prescribed process. [Paras 36, 38, 39, 40, 41]

The proposed competing offer was beyond the prescribed timeline and could not be entertained.

Exemption from open-offer obligation - non-relaxation of competing-offer timelines - HELD THAT: - The exemption power under Regulation 11 is confined to dispensing with an acquirer's obligation to make an open offer; it is not a general power to waive compliance with procedural requirements or timelines applicable to an ongoing open offer. As the competing offer had not been made within the statutory period and the first open offer had concluded, the exemption application was outside the scope of Regulation 11 and the subsequent proceedings were infructuous. [Paras 44, 45, 47]

The exemption application was devoid of merit and was rejected.

Final Conclusion: The appeal was dismissed and the exemption application was held untenable. The appellant remained at liberty to initiate a fresh takeover bid in accordance with the SAST Regulations.

IBC moratorium and cheque-dishonour prosecution of directors

IBC moratorium and personal liability under the Negotiable Instruments Act - Quashing of cheque-dishonour proceedings against authorised signatory - Effect of a moratorium against a corporate debtor on prosecution of its Director and authorised signatory for dishonour of cheques issued before commencement of the corporate insolvency resolution process

HELD THAT: - A moratorium under Section 14 of the IBC protects the corporate debtor but does not suspend or extinguish the personal statutory liability of natural persons covered by Section 141 of the NI Act. The expiry of the statutory payment period after declaration of the moratorium is a relevant circumstance but is not conclusive. Where the complaints contain specific averments as to the signatory's responsibility and issuance of the cheques, and the signatory admits the signatures, suspension of the Board's powers does not retrospectively erase pre-moratorium acts.

Defences concerning knowledge, due diligence, or the effect of appointment of the IRP require determination on trial evidence and cannot be conclusively adjudicated in quashing proceedings. [Paras 24, 25, 26, 27, 28]

The moratorium afforded no ground to quash the complaints or summoning orders against the petitioner; the petitions were dismissed and the defences were left for trial.

Final Conclusion: The petitions seeking quashing of the cheque-dishonour complaints and summoning orders were dismissed. The moratorium against the corporate debtor did not bar prosecution of the petitioner as an alleged Director and authorised signatory.

Extinguishment of statutory dues under an approved resolution plan - Continuation of electricity-duty and mining-related demands after approval of a resolution plan when the authorities had not lodged their claims in the corporate insolvency resolution process - HELD THAT: - Hon’ble Supreme Court [2021 (4) TMI 613 - SUPREME COURT] held that once a resolution plan is duly approved by the Adjudicating Authority under sub section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and binding upon the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. It is further held that dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the Adjudicating Authority grants its approval under Section 31 could be continued.

The respondent authorities, despite public notice and pendency of the writ petitions, did not submit their claims in the corporate insolvency resolution process or challenge approval of the resolution plan. An approved resolution plan binds governmental authorities, and statutory dues not forming part of it stand extinguished; proceedings for recovery of such pre-approval dues cannot continue. [Paras 11, 12, 13]

The respondent authorities' claims stood extinguished, and all the impugned demand notices were quashed.

Final Conclusion: The writ petitions were allowed and the disputed demand notices were quashed, as the claims not included in the approved resolution plan stood extinguished.

Anticipatory bail after proclamation proceedings - pre-arrest protection - Money-laundering prosecution of person not arraigned in scheduled offence - Twin conditions for bail under the Prevention of Money-laundering Act

HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court [2026 (4) TMI 1911 - JHARKHAND HIGH COURT]

The Special Leave Petition is, accordingly, dismissed

Substitution of PMLA - attached immovable properties by fixed deposit - Alternative statutory remedy and writ jurisdiction

Substitution of attached immovable properties by fixed deposit - Rule 5(5) of the 2013 Rules - Entitlement to substitute specified immovable properties attached under the PMLA with an equivalent fixed deposit pending appeals against confirmation of attachment - HELD THAT: - Rule 5(5) applies specifically to jointly owned immovable property and permits acceptance of a fixed deposit only to the extent of the concerned person's share, as estimated by the authorised officer. The expression "may accept" does not confer a mandatory entitlement, and the statutory scheme creates no general right to obtain release of attached immovable property merely by offering equivalent security. The wider writ jurisdiction under Article 226 does not create a substantive or enforceable right where none exists under the statutory framework; nor can financial hardship or adequacy of the offered security justify mandamus for substitution. [Paras 12, 14, 15, 18, 19]

The petitioners had no enforceable right to require substitution of the attached properties by a fixed deposit, and the refusal of substitution disclosed no jurisdictional error, perversity or manifest illegality.

Alternative statutory remedy under the PMLA - Exercise of writ jurisdiction against interlocutory orders - Exercise of writ jurisdiction against the interlocutory order declining substitution when a statutory appeal to the High Court was available and substantive appeals concerning attachment were pending - HELD THAT: - Although availability of an alternative remedy is not an absolute bar to writ jurisdiction, the statutory appellate mechanism under the PMLA ought not to be bypassed in the absence of exceptional circumstances. No violation of natural justice, jurisdictional error or manifest illegality was established in the interlocutory order, while the validity and nature of the attachment remained for consideration in the pending substantive appeals. A special enactment providing an efficacious redressal mechanism ordinarily excludes recourse to extraordinary writ jurisdiction. [Paras 22, 23, 24, 25, 26]

No exceptional ground warranted interference under Article 226, and the petitioners were left to the statutory remedies available under the PMLA.

Final Conclusion: The writ petition was dismissed. The refusal to permit substitution was upheld, without examining the merits or validity of the attachment, which remained pending before the statutory appellate forum.

Attachment exceeding proceeds of crime - Attachment of property of equivalent value - Attachment of property acquired before scheduled offence - Reasons to believe for attachment - Effect of discharge in predicate offence proceedings - Attachment of proceeds of crime held by non-accused

Attachment exceeding proceeds of crime - Subsequently traced proceeds of crime - Attachment of the foreign insurance policy on the ground that earlier attachments had already covered the identified proceeds of crime - HELD THAT: - As the excess consideration from villa transactions was collected in cash and not accounted for, the actual proceeds of crime could not be accurately identified or verified. Attachment is not confined to proceeds initially identified in the scheduled offence and may extend to further proceeds traced during investigation. The appellant admitted that premiums for the policy were paid by his brother, and the Tribunal found that the proceeds of crime had been intermingled with offshore business transactions and utilised for such premiums. [Paras 6]

The attachment did not exceed the proceeds of crime and was upheld.

Attachment of property of equivalent value - Value of proceeds of crime - Attachment of property of equivalent value where property directly derived or obtained from criminal activity is unavailable - HELD THAT: - The definition of proceeds of crime encompasses not only property derived or obtained directly or indirectly from criminal activity relating to a scheduled offence, but also the value of such property. The statutory power to proceed against property of equivalent value advances the object of recovering proceeds of crime, and the attachment in question was found to be less than the proceeds of crime. [Paras 7]

Property of equivalent value was liable to attachment; the appellant's challenge was rejected.

Attachment of property acquired before scheduled offence - Continuing money-laundering offence - Attachment of an insurance policy acquired before the alleged criminal activity where its premiums were allegedly paid from proceeds of crime - HELD THAT: - Although the policy was acquired before the alleged scheduled offence, the Tribunal found that its premiums continued to be paid by the appellant's brother from funds in which proceeds of crime had been layered. Further, where directly derived proceeds have been siphoned off or are unavailable, property of equivalent value, including property acquired before commission of the crime, may be attached. [Paras 8]

The prior acquisition of the insurance policy did not render its attachment illegal.

Reasons to believe for attachment - Inadvertent error in attachment proceedings - Validity of the attachment proceedings despite reference to an unrelated company in the discussion concerning the reasons to believe - HELD THAT: - The reference to an unrelated company was held to be an inadvertent error which did not affect the attachment, as ample material established the generation, existence and utilisation of proceeds of crime. The appellant's statement disclosing the source of payment of the insurance premiums constituted newly discovered material, and the transferable nature of the movable property also justified its attachment. [Paras 9]

The inadvertent error did not vitiate the attachment proceedings.

Effect of discharge in predicate offence proceedings - Relevance of judgments in separate proceedings - Effect of the discharge of the appellant's brother in predicate offence proceedings on the attachment proceedings against the appellant - HELD THAT: - The relief granted to the appellant's brother rested on the absence of his knowledge concerning the alleged proceeds of crime and did not determine the involvement of the appellant or of the person alleged to have generated the proceeds. The appellant had not obtained discharge, and the judgment concerning another accused was not relevant to determine the appellant's role or the source of the attached property. [Paras 10]

The discharge of the appellant's brother did not require termination of the attachment proceedings against the appellant.

Attachment of proceeds of crime held by non-accused - Possession of proceeds of crime - HELD THAT: - The attachment power is not confined to an accused named in the scheduled offence and extends to any person involved in a process or activity connected with proceeds of crime. The statutory objective is to reach and confiscate proceeds of crime in whosoever's name they are held. [Paras 11]

The appellant's property was liable to attachment notwithstanding that he was not an accused in the predicate offence.

Final Conclusion: The appeal was dismissed and the confirmation of attachment of the foreign insurance policy was upheld.

Provisional attachment of proceeds of crime - as alleged appellants had actively participated in the scheduled offence and acquired or dealt with proceeds of crime.

Sustainability of provisional attachment of properties held by company officials who claimed that the properties were acquired from salary and incentives - HELD THAT: - The Tribunal found that the appellants, while serving as Vice-President and Assistant Vice-President, actively assisted the company's directors in inducing the public to invest in unlawful preference-share schemes. Their roles in mobilising investments, diverting the proceeds of the scheduled offence and acquiring properties in their names were borne out by the recorded statements and charge-sheet material. The plea that the attached properties were acquired from salary withdrawals was not accepted, since the attachment was substantially below the amounts found to have been received by them from the company. [Paras 13, 14, 15, 16, 17]

The provisional attachment was upheld, subject to the final outcome of the criminal proceedings.

Final Conclusion: The appeals were dismissed and the confirmation of provisional attachment was sustained, subject to the final outcome of the criminal proceedings.

Classification of integrated mining operations as cargo handling service - Invoking extended period of limitation

Classification of integrated mining operations as cargo handling service - Composite service classification - Adjudication confined to show cause notice - whether Excavation, loading, transportation and unloading of limestone within the mining area, undertaken as an integrated mining operation, could not be classified as Cargo Handling Service? - HELD THAT: - Cargo Handling Service contemplates handling of cargo as cargo; incidental loading, unloading or movement undertaken in the course of another principal service does not by itself determine the classification of the composite activity. The dominant character of the contract was mining, and the handling and movement of limestone within the mining area were integral to extraction. The unchanged activities having been accepted as Mining Service after the introduction of that specific taxable entry, they could not be artificially vivisected and classified as Cargo Handling Service for the earlier period. Further, as the show cause notice proposed classification only under Cargo Handling Service, the demand could not be sustained under any different taxable category.

Hon’ble Bombay High Court [2009 (3) TMI 29 - BOMBAY HIGH COURT] recognised the principle that where a distinct service is specifically brought to tax from a specific date, the same cannot ordinarily be subjected to tax under any-other general entry for the earlier period in the absence of clear legislative mandate. We, therefore, find that the demand under “CHS” for the mining activities undertaken by the appellant cannot be sustained.[Paras 12, 13, 14, 15, 19]

The service-tax demand under Cargo Handling Service was unsustainable; consequently, the associated interest and penalties could not survive.

Extended limitation for service tax demand - absence of suppression - HELD THAT: - The appellant had obtained registration and discharged service tax under Mining Service after its introduction, while the departmental statement had been recorded substantially before issuance of the show cause notice. The classification dispute admitted of more than one interpretation, and there was no positive act establishing deliberate suppression or intent to evade tax. The principle laid down in the case of Padmini Products Vs Collector of Central Excise[1989 (8) TMI 80 - SUPREME COURT] supports the appellant in this regard. [Paras 16, 17]

Invocation of the extended period on the ground of suppression was not sustainable.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief. The demand under Cargo Handling Service, with consequential interest and penalties, was held unsustainable.

Adjustment of excess service tax in succeeding months or quarters - Rule 6(4A) of the Service Tax Rules -

Whether excess service tax paid in earlier periods could be adjusted against service-tax liabilities arising in subsequent months or quarters under Rule 6(4A)? - HELD THAT: - Rule 6(4A) permits adjustment of excess service tax against liability for a succeeding month or quarter; the provision does not employ the expression "immediate" and cannot be construed as restricting adjustment only to the immediately succeeding month or quarter. The Tribunal followed its earlier Division Bench view on the identical question in the case of South India Aluminium Company [2023 (10) TMI 1616 - CESTAT CHENNAI] [Paras 10, 11]

The adjustments were held permissible; the impugned orders were set aside and the appeals allowed with consequential benefits in accordance with law.

Final Conclusion: The appeals were allowed, as adjustment of excess service tax against liability in subsequent months or quarters was not confined to the immediately succeeding month or quarter.

CENVAT credit - procedural lapse and delayed utilisation - Extended limitation - absence of suppression

CENVAT credit denied because it was not reflected in ST-3 returns and was utilised after the prescribed time limit - HELD THAT: - Substantive eligibility to CENVAT credit cannot be denied for a mere procedural lapse. As receipt of the services, payment of service tax thereon, and possession of documents evidencing such availment were undisputed, the credit could not be denied merely because it was utilised belatedly. [Paras 14]

The denial of CENVAT credit was held unsustainable.

Extended limitation based on third-party information - Suppression with intent to evade service tax - Invocation of the extended period for a service-tax demand founded on information received from the Income Tax Department - HELD THAT: - Where the demand was raised on third-party information, and there was no ingredient of suppression, misstatement, fraud or collusion with intent to evade service tax, the extended period of limitation could not be invoked.

Tribunal in the case of Kush Constructions [2019 (5) TMI 1248 - CESTAT ALLAHABAD] has held that where the demand is raised on the basis of the data obtained from the Income Tax Department, it cannot be alleged that there was any suppression etc. to justify invocation of extended period of limitation. [Paras 15]

The extended-period demand was unsustainable.

Final Conclusion: The impugned appellate order was set aside, and the Order-in-Original was upheld.

Exemption for construction services supplied to statutory authorities as services provided to governmental authorities - Conditional exemption for works contracts

Construction services rendered to the identified statutory bodies eligibility for exemption as services provided to Governmental Authorities under Entry 12 of the exemption notification - HELD THAT: - All service recipients identified in the work-order details were authorities created under statute and were consequently held to be governmental authorities. Having accepted exemption for construction services rendered to certain Governmental authorities, the impugned order supplied no reasons for denying the same status to other such authorities. [Paras 11]

The finding denying governmental-authority status to certain service recipients was set aside.

Conditional exemption for works contracts - Eligibility of construction works contracts for exemption subject to execution of the contract and payment of stamp duty before 01.03.2015 - HELD THAT: - The exemption applicable from 01.03.2016 required that the relevant contract had been entered into before 01.03.2015 and that appropriate stamp duty, where applicable, had been paid before that date. As the appellant produced subsequently procured documents said to establish compliance with these conditions, and those documents had not been before the adjudicating authority, their verification required fresh consideration. [Paras 13, 14, 15]

The matter was remanded to the original adjudicating authority to verify the documents and undertake de novo adjudication of the work contracts for which demand had been confirmed for want of evidence, after granting reasonable opportunity to the appellant.

Final Conclusion: The appeal was allowed by way of remand. The denial of exemption based on the recipients not being governmental authorities was set aside, while eligibility under the contractual and stamp-duty conditions was remitted for verification and fresh adjudication.

Taxable TV or Radio Programme Producer Service or a sale of goods liable to VAT - programme produced for self - Permanent assignment of copyright - sale of goods outside service tax

TV or Radio Programme Production Service - programme produced for self - Taxability of consideration for assignment of a self-produced television programme under TV or Radio Programme Production Service - HELD THAT: - The serial was produced by the appellant itself, and there was no material to show that it had been scripted or produced on behalf of the broadcasters. A service necessarily contemplates a provider and a recipient; an activity undertaken by a person for itself cannot constitute a service rendered to another. The statutory levy upon a programme producer therefore did not extend to subsequent assignment of a programme independently produced by the appellant.

There is nothing to show that the Tamil serial ‘Kolangal’ was scripted by or in any way produced on behalf of the Broadcasters, to which the copyright was later assigned. In such a situation as stated in Magus Construction Pvt. Ltd. v. Union of India [2008 (5) TMI 18 - HIGH COURT OF GAUHATI] “Since the very concept of rendering of “service” implies two entities, one, who renders the “service”, and the other, who is recipient thereof, it becomes transparent that an activity carried on by a person for himself or for his own benefit, cannot be termed as “service” rendered.” Hence such an activity would not attract Service Tax.[Paras 6, 8]

The consideration received for assigning the self-produced programme was not liable to service tax under TV or Radio Programme Production Service.

Permanent assignment of copyright - sale of goods outside service tax - Character of the perpetual exclusive assignment of copyright in the dubbed television serials as a sale of goods or a taxable service - HELD THAT: - Copyright, though intangible, possesses intrinsic value and may be goods where it is capable of being bought, sold, transferred, delivered, stored and possessed. The appellant had assigned exclusive rights in the dubbed serials to the broadcasters in perpetuity and retained no right therein. Since the assignment amounted to a sale and VAT had been paid on such transfers, service tax and VAT being mutually exclusive, the transaction fell outside the scope of service tax. [Paras 6, 7]

The copyright assignments were sales of goods and the service-tax demand, interest and penalty could not survive.

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief in accordance with law.

Statutory appellate remedy against order-in-original - Limitation for appeal following pendency of writ proceedings

Availability of a statutory appeal against an order-in-original passed during the pendency of the writ proceedings - HELD THAT: - The constitutional challenges stood covered by the earlier orders[2026 (9) TMI 79 - KARNATAKA HIGH COURT] that had attained finality. Since the order-in-original was passed while the writ proceedings remained pending, the petitioner was entitled, in the peculiar facts, to pursue the statutory appellate remedy and raise all grounds available in law. [Paras 6, 7, 8]

The petitioner was permitted to file a statutory appeal within four weeks, without objection on limitation; all merits contentions were kept open.

Final Conclusion: The writ appeal was disposed of without interference, reserving the petitioner's statutory appellate remedy against the order-in-original and protecting the appeal from limitation objection if filed within the stipulated period.

Cenvat credit - actual receipt of inputs - Admissibility of uncorroborated statements under section 9D

Denial of Cenvat credit on the allegation that inputs copper ingots were not physically received by the manufacturer - HELD THAT: - The documentary material produced by the appellant, including the goods receipt and invoice, corroborated transport and receipt of the inputs and was not disproved by the department. No enquiry was made from the transporter, while the allegation rested only on oral statements recorded during investigation. In the absence of corroborative documentary evidence and compliance with section 9D for reliance on such statements, the departmental case lacked cogent proof. The burden resting on the department was not discharged, particularly when no enquiry, statement or search concerning the appellant established non-receipt of inputs. See R.N. Metals [2025 (6) TMI 438 - CESTAT NEW DELHI] [Paras 7, 8]

The denial of Cenvat credit based on third-party data and uncorroborated oral statements was held unsustainable; the impugned order was set aside and the appeal allowed.

Final Conclusion: The impugned order disallowing Cenvat credit, interest and penalty was set aside, and the appeal was allowed.

Excisability of captively consumed sugar syrup - Marketability of sugar syrup based on sugar concentration - Extended limitation for non-disclosure of captive consumption

Excisability of captively consumed sugar syrup - Marketability of sugar syrup based on sugar concentration - Levy of excise duty on sugar syrup manufactured captively for use in exempt biscuits - HELD THAT: - Actual sale is not necessary to establish marketability; capability of being bought and sold is the decisive test. The appellant's admitted manufacturing process showed that the syrup contained 80% sugar by weight. Sugar syrup containing more than 65% sugar by weight was held to be stable, marketable and excisable. The decisions relied upon by the appellant were distinguishable because they concerned syrup in which the fructose content had not been established or was below the relevant level. [Paras 5]

The sugar syrup was held marketable and excisable, and liable to duty notwithstanding its captive use in manufacture of exempt biscuits.

Extended limitation for non-disclosure of captive consumption - Penalty for non-payment of duty on captively consumed sugar syrup - Invocation of the extended period and imposition of penalty for non-payment of duty on captively consumed sugar syrup - HELD THAT: - The letter relied upon by the appellant did not disclose that it had stopped paying duty on sugar syrup. Its statutory returns disclosed only duty-free clearance of biscuits and did not disclose production and captive consumption of sugar syrup. The Department was therefore unable to verify whether the syrup was manufactured and captively consumed without payment of duty. [Paras 5]

The extended period, demand, interest and penalty were upheld.

Verification of Cenvat credit on duty-paid sugar - Cenvat credit on sugar consumed in manufacture of dutiable sugar syrup - HELD THAT: - The claim for credit depended upon verification of duty-paying documents and the quantity of sugar used in manufacture of sugar syrup. The entitlement was therefore remitted for factual verification. [Paras 5]

The matter was remanded solely for verification and grant of admissible Cenvat credit on sugar, if the duty-paying documents are found proper.

Final Conclusion: The demand of duty on sugar syrup, with interest and penalty, was sustained. The appeal was partially allowed only to the extent of remand for verification and grant of admissible Cenvat credit on sugar.

Assessment of excisable goods at the time of removal - Exemption for superior kerosene oil intended for sale through the Public Distribution System - Extended limitation for excise duty demand - Penalty for alleged duty evasion on interface superior kerosene oil

Assessment of excisable goods at the time of removal - Exemption for superior kerosene oil intended for sale through the Public Distribution System - Post-clearance intermixing of petroleum products - Liability to duty on superior kerosene oil cleared under exemption for sale through the Public Distribution System, where a portion subsequently formed interface with motor spirit or high speed diesel during pipeline transportation - HELD THAT: - Excisable goods are assessable in the form in which they are cleared from the factory and not with reference to their subsequent use, unless the exemption entry requires otherwise. The appellants had cleared superior kerosene oil for sale through the Public Distribution System and fulfilled the notification conditions at removal. Its subsequent intermixing with motor spirit or high speed diesel beyond the refinery could not alter its assessability or justify a demand at the rate applicable to those products. The circular seeking such assessment lacked statutory support and could not impose a liability contrary to the governing provisions. See IOCL Vs CCE & ST, Vadodara [2018 (9) TMI 24 - CESTAT AHMEDABAD] [Paras 5, 6, 7]

The differential duty demand on the interface quantity of superior kerosene oil was held unsustainable on merits.

Extended limitation for excise duty demand - Suppression of facts with intent to evade duty - Invocation of the extended period for the demand relating to interface superior kerosene oil - HELD THAT: - The show-cause notice was founded on a departmental circular issued long earlier, and the Department could have undertaken appropriate enquiries. No evidence of suppression or wilful misstatement with intent to evade duty was placed on record. The existence of decisions on identical facts also supported the appellants' bona fide belief regarding non-payment of further duty. [Paras 8, 9]

The extended period was held unavailable in respect of Appeal No. E/20679/2015.

Penalty for alleged duty evasion on interface superior kerosene oil - Penalty on company and employee - Penalties imposed for the alleged non-payment of duty on superior kerosene oil used as pipeline interface - HELD THAT: - In the absence of material establishing suppression or intent to evade duty, the requisite knowledge and belief could not be attributed to the corporate appellants, particularly a public sector undertaking, for the purpose of penalty. Further, no evidence established that the employee was responsible for clearance of goods without payment of duty. [Paras 9]

Penalties imposed on the manufacturer, the oil marketing company and the employee were held not imposable.

Final Conclusion: All five appeals were allowed with consequential relief. The demand on the interface quantity of superior kerosene oil and the penalties imposed were held unsustainable.

Export refund of accumulated CENVAT credit - curable procedural deficiencies - Refund limitation - date of original filing - Adjudication beyond show cause notice and scope of remand

Export refund of accumulated CENVAT credit-curable procedural deficiencies - Admissibility of refund of accumulated CENVAT credit attributable to admitted exports where supporting documents were furnished during verification - HELD THAT: - Refund under Rule 5 is intended to neutralise the tax burden on exports. Since the exports, accumulation of credit and nexus of inputs and input services with exported goods were undisputed, the supporting documents sought by the Department were evidentiary for verification and quantification, not conditions creating eligibility. Procedural deficiencies cured during verification could not defeat the substantive refund entitlement. [Paras 8, 9, 17]

The refund claim was held admissible on merits, subject only to computation of the eligible amount.

Refund limitation-date of original filing - Limitation for an export refund claim where additional supporting documents were supplied after the original application - HELD THAT: - The date of the original refund application is the relevant date for limitation under Section 11B. Furnishing documents in response to departmental queries neither effaces the original filing nor postpones the limitation period. Administrative instructions requiring a complete claim could not override the statutory right or re-date the claim, particularly when the Department treated it as filed by issuing a show cause notice. [Paras 10, 11, 12, 17]

The claim was held to have been filed within limitation, and could not be treated as filed only when the requested documents were subsequently furnished.

Adjudication beyond show cause notice - Scope of remand - Validity of rejection of the refund claim on limitation when limitation was not proposed in the show cause notice and the remand was confined to verification of documents - HELD THAT: - A show cause notice is the foundation of adjudication and the adjudicating authority cannot introduce a new ground not put to the assessee. Further, where the unchallenged remand order confined the inquiry to verification of documents, the adjudicating authority was bound by that scope and could not reopen limitation. [Paras 13, 14, 15, 17]

The rejection on limitation was held legally unsustainable as being beyond both the show cause notice and the limited scope of remand.

Final Conclusion: The appeal was allowed and the denial of refund was set aside. The matter was remanded solely for arithmetical verification and computation of the eligible refund, without reopening eligibility, limitation, admissibility or procedural compliance.

Delayed deposit and non-payment of Foreign Travel Tax into the Government treasury - Discretion in statutory penalty proceedings - distinction between ‘failure to pay the tax’ and ‘delay in the payment of the tax’

Penalty for delayed deposit of Foreign Travel Tax collected by a carrier u/s 38(3) of the Finance Act, 1979 - HELD THAT: - Failure to pay Foreign Travel Tax under Section 38(3) means non-payment and cannot be equated with delayed payment. Delayed deposit is governed by Section 38(4), read with Rules 4 and 9, under which the prescribed timeline is capable of being extended or delay condoned on sufficient cause. Further, the show-cause and hearing process under Rule 12 makes imposition of penalty discretionary; the use of the word "shall" does not render penalty automatic. The authorities failed to consider the explanation for delay, the power to condone it, and the discretion whether penalty was warranted. [Paras 37, 40, 46, 48, 49]

The penalty imposed for the delayed deposits of Foreign Travel Tax was unsustainable and was set aside.

Reformatio in peius - Enhancement of penalty following the appellant's appeal and remand for de novo adjudication - HELD THAT: - The principle of reformatio in peius, as part of fair procedure, precludes placing an appellant in a worse position merely for availing the statutory remedy of appeal. The appellate, revisional and High Court orders erred in rejecting the challenge to the substantial enhancement of penalty after remand. [Paras 52, 54]

The enhancement of penalty on de novo adjudication could not be sustained.

Final Conclusion: The appeal was allowed and the penalty for delayed deposit of Foreign Travel Tax was quashed. Amounts paid towards that penalty were directed to be refunded with interest, and the bank guarantee stood discharged.

Unauthorised occupation of public premises - auction purchaser entering possession pursuant to a secured creditor's statutory sale - Summary eviction of SARFAESI auction purchaser

Whether an auction purchaser placed in possession pursuant to a secured creditor's statutory auction could be treated as an unauthorised occupant of industrial land for summary eviction merely because leasehold rights had not been transferred and disputes remained concerning prior dues? - HELD THAT: - Occupation founded on a public auction by the secured creditor and a sale certificate could not be equated with that of a trespasser or clandestine occupant. Disputes over transfer of leasehold rights and financial liabilities arising from the auction, including arrears attributable to the previous lessee, did not by themselves bring the auction purchaser within the definition of unauthorised occupation or justify recourse to summary eviction proceedings. Recovery of legally enforceable outstanding dues had to be pursued against the person or authority legally liable.

The appellate order setting aside the eviction order disclosed no perversity, jurisdictional error or patent illegality; the writ petition was dismissed, without prejudice to remedies for recovery of dues from the person legally liable.

Final Conclusion: The writ petition was dismissed, as the auction purchaser's possession could not be subjected to summary eviction on account of unresolved lease-transfer and prior-dues disputes.