TaxTMI Updates e-Newsletter
Nov 22,2024

Time-barred appeal and condonation of delay - limitations for filing appeal under Section 107 and discretionary extension - application of Section 5 of the Act of 1963 to extend limitation - right to statutory appeal and obstruction by non-formation of Appellate Tribunal - principles of natural justice - personal hearing requirement - unreasonable rigid interpretation of statutory time limits

Time-barred appeal and condonation of delay - limitations for filing appeal under Section 107 and discretionary extension - application of Section 5 of the Act of 1963 to extend limitation - Validity of dismissal of the appeal as time-barred and the entitlement to condonation of delay - HELD THAT: - The Court found that the Appellate Authority's summary rejection of the appeal as time-barred was unduly rigid and failed to account for genuine extenuating circumstances. The petitioner produced evidence of her husband's critical illness and supporting medical documentation which, on the material before the Court, constituted unavoidable personal circumstances causing the delay. Relying on reasoning reflected in S.K. Chakraborty & Sons (as cited in the judgment) that limitation periods applicable to the Appellate Authority may be extended in appropriate cases and that provisions of the earlier Act may remain available to afford discretionary relief, the Court held that the Appellate Authority ought to have considered the condonation application on its merits rather than mechanically dismissing the appeal on timing grounds. The Court therefore allowed the writ petition insofar as the dismissal for delay was concerned and directed reconsideration of the condonation application. [Paras 13, 15]

Impugned dismissal for delay set aside; Appellate Authority directed to consider the condonation application on merits and, if satisfied, condone the delay and decide the appeal on merits.

Principles of natural justice - personal hearing requirement - unreasonable rigid interpretation of statutory time limits - Alleged breach of principles of natural justice by denial of personal hearing and procedural irregularity in adjudication - HELD THAT: - The petitioner contended that no personal hearing was afforded before the adjudicating authority and that returns were not properly verified, reflecting arbitrary adjudication. The Court recorded these procedural infirmities and treated them as part of the broader assessment of procedural irregularity and arbitrariness in the proceedings. Having regard to the absence of personal hearing and the manner in which the order was passed, the Court concluded that there were sufficient procedural irregularities to warrant interference and quashed the impugned order to permit reconsideration in accordance with law. [Paras 6, 15]

Impugned adjudication quashed for procedural irregularity including denial of personal hearing; matter remitted for fresh consideration in accordance with law.

Right to statutory appeal and obstruction by non-formation of Appellate Tribunal - Effect of non-formation of the GST Appellate Tribunal on the petitioner's right to further appeal - HELD THAT: - The Court observed that the petitioner's statutory right to further appeal was effectively obstructed by the non-formation of the Appellate Tribunal, which resulted in denial of an available appellate remedy. This consideration formed part of the Court's assessment of the fairness of the overall adjudicatory process and informed the relief granted. In consequence, the Court restored the petitioner's rights under the WBGST Act and directed that no adverse consequences shall follow from the quashing of the impugned order. [Paras 13, 15]

Court found that non-formation of the Appellate Tribunal had obstructed the petitioner's appellate remedy; rights under the WBGST Act restored and consequences of the annulled orders neutralised.

Final Conclusion: Writ petition allowed: impugned orders quashed for procedural irregularity and undue refusal to condone delay; Appellate Authority directed to consider the condonation application on merits and, if accepted, to admit and decide the appeal on merits; petitioner's statutory rights restored and no costs awarded.

Validity of scope of supply including supplies "agreed to be made" - Time of supply - deeming of supply on receipt of payment - Eligibility for input tax credit under Section 16(2)(b) - Receipt voucher as taxpaying document and basis for input tax credit - Refund of unutilised input tax credit under Section 54(3) - Harmonious construction of interplay between time of supply and input tax credit provisions

Validity of scope of supply including supplies "agreed to be made" - Time of supply - deeming of supply on receipt of payment - Harmonious construction of interplay between time of supply and input tax credit provisions - Challenge to the constitutional validity of Sections 7, 12 and 13 of the CGST/MGST Acts insofar as they apply to supplies "agreed to be made" - HELD THAT: - The court held that Section 7's inclusion of supplies "made or agreed to be made for a consideration" must be read in the context of the qualifying words "in the course or furtherance of business" and the statutory scheme as a whole. The legislative purpose, the definition of consideration, the treatment of works contracts in Schedule II, and subsequent amendments (including subsections treating composite or interconstituent transactions) demonstrate Parliament's intent to include advance/mobilisation payments within the scope of supply where they are integrally connected with the contract. Sections 12 and 13 (time of supply rules and the Explanation deeming supply to the extent covered by payment/invoice) operate cohesively with Section 7 and Section 9 (charging provision) to render the receipt of such advance payments taxable at the time of receipt. The court emphasised established principles of constitutional review of fiscal statutes - presumption of constitutionality, judicial restraint in economic legislation, and preference for constructions that uphold legislative competence - and found no constitutional infirmity in the challenged provisions as applied to the facts. [Paras 104, 106, 109]

Petitioner's challenge to the vires of Sections 7, 12 and 13 is rejected; those provisions are not unconstitutional as contended.

Eligibility for input tax credit under Section 16(2)(b) - Harmonious construction of interplay between time of supply and input tax credit provisions - Entitlement to input tax credit (ITC) under Section 16 in the petitioner's factual circumstances despite absence of a conventional invoice at the time of advance receipt - HELD THAT: - Although Section 16(2)(b) requires receipt of goods or services to claim ITC, Section 16(1) confers entitlement where inputs are "used or intended to be used" in the course or furtherance of business. Read purposively and harmoniously with Section 13(2) (which deems supply to the extent covered by payment), a literal denial of ITC in the petitioner's factual matrix would produce an anomalous result - tax collected on receipt but credit denied where the advance is contractually integrally linked to supplies to follow. The court found that, in the peculiar facts of the contract (mobilisation advances expressly to be adjusted against interim payments, backtoback arrangements with constituents, and the parties having acted on that basis), denial of ITC because a formal invoice was not issued at that point would be unreasonable. The court directed that revenue authorities must examine the nature of such transactions and not mechanically apply Section 16(2)(b) to deny credit where the statutory and contractual framework shows the inputs were intended to be used. [Paras 116, 119, 124, 125]

On the facts of this case the petitioner was entitled to avail input tax credit under Section 16; it was arbitrary and illegal to deny ITC in the circumstances.

Receipt voucher as taxpaying document and basis for input tax credit - Documentary requirements for claiming ITC - Whether the "Receipt Voucher" issued in relation to the mobilisation advance qualifies as a taxpaying document permitting ITC - HELD THAT: - Section 31(3)(d) explicitly contemplates issuance of a receipt voucher on receipt of advance payment and the subsection operates notwithstanding earlier subsections; Rule 36 lists documents for claiming ITC but cannot override the statutory provision. The GST Council's concession that the Receipt Voucher is a taxpaying document reinforced that the vouchers issued in the contractual context satisfied Section 31(3)(d). Given that tax was deposited with the Government and the documentary requirements under Section 31 were met in substance, the petitioner could not be denied ITC merely because Rule 36 did not specifically treat the receipt voucher as an invoice in the narrow sense. [Paras 123, 124]

The Receipt Voucher issued by L&T in favour of the petitioner qualifies as a taxpaying document for the purpose of claiming ITC in the present facts; denial of ITC on that ground was unlawful.

Refund of unutilised input tax credit under Section 54(3) - Availability of refund of tax or unutilised ITC under Section 54(3) in respect of the advances and related tax payments - HELD THAT: - The court declined to decide the petitioner's refund claims in this writ petition because the matter is the subject of a pending statutory appeal. The court expressly kept open all contentions relating to utilisation of ITC and the validity/application of Section 54(3), noting that those issues are better addressed in the pending appellate proceedings where contractual interpretation and statutory appeal remedies will be considered. [Paras 125]

Claims for refund and challenges to the proviso to Section 54(3) are left open and not adjudicated in this writ; parties may pursue the pending statutory appeal.

Final Conclusion: Writ petition dismissed insofar as it sought declarations striking down Sections 7, 12, 13 and Section 16(2)(b) of the CGST/MGST Acts; however, on the peculiar facts (mobilisation advances contractually integrally linked to supplies, tax deposited and receipt vouchers issued), the petitioner was held entitled to avail input tax credit on the basis of the receipt voucher. Contentions as to utilisation of ITC and the petitioner's refund claims (including challenge to Section 54(3)) remain open and are to be decided in the pending statutory appeal. Parties to bear their own costs.

Levy of GST on interest as consideration - Relationship between chit foreman and subscriber as creditor-debtor - Applicability of Notification No.12/2017 - nil rate for interest on extending deposits, loans or advances - Value of taxable supply under Section 15(2)(d) - interest included only when charged on delayed payment of consideration for supply - Maintainability of writ challenging a show cause notice where the notice is without jurisdiction

Maintainability of writ challenging a show cause notice where the notice is without jurisdiction - Petition under Article 226 challenging Ext.P1 show cause notice is maintainable where the notice is, on admitted facts, without jurisdiction. - HELD THAT: - The Court held that ordinarily a writ against a show cause notice may be resisted, but where the show cause notice is shown on admitted facts to be without jurisdiction the availability of alternative statutory remedies does not preclude exercise of writ jurisdiction. Reliance was placed on authority that the High Court may prevent an executive authority from acting without jurisdiction and that existence of alternate remedies is not a bar where the challenge raises a pure question of law and no disputed facts exist. The court found no disputed questions of fact and that the legal issue could be decided in writ jurisdiction. [Paras 6, 7]

Writ petition maintainable and entertainable; challenge to Ext.P1 permitted to be adjudicated.

Relationship between chit foreman and subscriber as creditor-debtor - Levy of GST on interest as consideration - Applicability of Notification No.12/2017 - nil rate for interest on extending deposits, loans or advances - Value of taxable supply under Section 15(2)(d) - interest included only when charged on delayed payment of consideration for supply - Ext.P1 show cause notice alleging levy of GST on interest collected from defaulting chit subscribers is without jurisdiction and liable to be quashed. - HELD THAT: - The Court accepted the petitioner's submission that the Supreme Court ruling in Oriental Kuries Limited defines the foreman-subscriber relationship as creating a debt on subscription and, on default, entitling the foreman to recover future instalments as a consolidated amount; this characterisation brings the amounts claimed as interest within the ambit of transactions akin to loans/deposits. Consequently, the transactions fall within Sl. No.27 of Notification No.12/2017 (Heading 9971) which prescribes nil rate for services by way of extending deposits, loans or advances insofar as the consideration is represented by interest. Independently, Section 15(2)(d) was construed to mean that interest forms part of the value of a taxable supply only when it is interest charged on delayed payment of a consideration that is itself for supply; where the principal subscription payment is not consideration for supply of services by the foreman, interest on delayed subscription does not become consideration for supply. Applying these principles and Supreme Court precedents cited (including Pratibha Processors and related authority), the Court concluded that the show cause notice confined to interest on defaulting subscriptions could not validly characterize such interest as consideration for taxable services. [Paras 8, 9, 10]

Ext.P1 show cause notice quashed as issued without jurisdiction; amounts of interest received from defaulting subscribers are not chargeable to GST under the circumstances before the Court.

Final Conclusion: Writ petition allowed; Ext.P1 show cause notice quashed as without jurisdiction. Challenges to Exts. P5-P8 dismissed as not pressed; challenge to Ext.P9 left open for adjudication in an appropriate case.

Principles of natural justice - opportunity of personal hearing - remand for fresh adjudication on merits - conditional relief by deposit/part payment - reconciliation of GSTR-3B with auto-populated GSTR-2A and Income-tax return - setting aside of impugned order

Principles of natural justice - setting aside of impugned order - Impugned order dated 9-8-2023 set aside on grounds of breach of principles of natural justice. - HELD THAT: - The Court examined the impugned order and found that the tax proposal was confirmed because the petitioner did not reply to the show cause notice, and that notices had been placed on the GST portal's "view additional notices and orders" tab. Despite the respondent's assertion that notices were also sent by e-mail and multiple hearing notices were issued, the Court concluded that the petitioner was effectively deprived of an opportunity to contest the demand. In these circumstances the order was vitiated for want of an opportunity to be heard and therefore was set aside so that the matter can be adjudicated on merits. [Paras 4, 5]

Order dated 9-8-2023 set aside and the petitioner put on terms to enable fresh consideration.

Opportunity of personal hearing - remand for fresh adjudication on merits - conditional relief by deposit/part payment - reconciliation of GSTR-3B with auto-populated GSTR-2A and Income-tax return - Matter remanded to respondent for fresh adjudication subject to conditions and directions for hearing and submission. - HELD THAT: - The Court directed that the petitioner be permitted to submit a reply to the show cause notice and be afforded a reasonable opportunity, including a personal hearing, to contest the tax demand on merits arising from discrepancies between GSTR-3B, auto-populated GSTR-2A and the Income-tax return. As a condition of remand the petitioner was ordered to remit 10% of the disputed tax demand within two weeks from receipt of the order and to file his reply within the same period. Upon receipt of the remittance and the reply, the respondent is to verify receipt, provide the promised opportunity to be heard and thereafter pass a fresh order within two months from receipt of the petitioner's reply. [Paras 2, 5]

Proceedings remitted for fresh adjudication on the stated conditions; petitioner to remit 10% of disputed demand and submit reply, after which respondent to grant hearing and pass fresh order within two months.

Final Conclusion: Writ petition disposed by setting aside the impugned order dated 9-8-2023 and remitting the matter for fresh adjudication on merits subject to the petitioner depositing 10% of the disputed tax demand, filing a reply, and being afforded a personal hearing; fresh order to be passed within two months thereafter.

Additional Surcharge as part of tariff for supply and distribution of electricity - Consideration for tolerating an act (Schedule II / Section 7 concept) - Exemption from GST for supply of electricity / distribution of electricity - Value of taxable supply - transaction value and inclusions - Statutory levy under Section 42(4) of the Electricity Act and regulatory determination of surcharge

Additional Surcharge as part of tariff for supply and distribution of electricity - Statutory levy under Section 42(4) of the Electricity Act and regulatory determination of surcharge - Exemption from GST for supply of electricity / distribution of electricity - Whether the Additional Surcharge collected from Open Access consumers is taxable under the GST Acts or forms part of the consideration for supply/distribution of electricity and is therefore exempt - HELD THAT: - The Appellate Authority examined the nature and statutory basis of the Additional Surcharge which is levied under Section 42(4) of the Electricity Act and specified/determined by the State Commission under Tariff Orders and the KERC regulations. The Authority found that the surcharge is levied to compensate stranded fixed costs that the distribution licensee continues to incur under power purchase commitments when consumers procure power through open access. The levy is not for an independent activity of 'tolerating an act' nor is there any separate express or implied arrangement by the licensee to do or abstain from doing something in return for the payment; instead the payment is an incidental component of the tariff fixed by the regulator. Reliance was placed on the statutory scheme (Section 42(4), Tariff Policy and KERC regulations), the KERC Tariff Orders which compute and authorise the Additional Surcharge, and the CBIC guidance explaining that mere flow of money does not establish consideration for tolerating an act. Applying Section 15 (value of taxable supply) the Authority concluded that the Additional Surcharge constitutes part of the consideration charged for the supply/distribution of electricity. Since supply of electricity (as goods) and distribution of electricity (as service) are covered by specific exemption entries, the surcharge being part of tariff for that supply is likewise exempt from GST. The Authority therefore set aside the earlier AAR holding that the surcharge was consideration for tolerating an act and taxable, and held the surcharge to be part of taxable value for supply/distribution which is exempted. [Paras 11, 13, 16]

Set aside the AAR ruling to the extent it held the Additional Surcharge taxable; hold that the Additional Surcharge forms part of the consideration for supply/distribution of electricity and is exempt from GST.

Final Conclusion: The Appellate Authority set aside the Advance Ruling insofar as it treated the Additional Surcharge as taxable consideration for tolerating an act, and held that the Additional Surcharge is part of the tariff for supply/distribution of electricity (as authorised by statute and regulatory orders) and is exempt from GST.

Services provided by a goods transport agency to an unregistered person - Exemption under Notification No.32/2017-Central Tax (Rate) (entry 21A) and IGST Notification No.33/2017-IGST (Rate) (entry 22A) - Definition of goods transport agency and requirement of issuance of consignment note - Composite or bundled services versus pure GTA service

Services provided by a goods transport agency to an unregistered person - Definition of goods transport agency and requirement of issuance of consignment note - Composite or bundled services versus pure GTA service - Exemption under Notification No.32/2017-Central Tax (Rate) (entry 21A) and IGST Notification No.33/2017-IGST (Rate) (entry 22A) - Applicability of the exemption under entry 21A/22A to the services supplied by the applicant - HELD THAT: - The exemption at S. No. 21A (and identically at 22A for IGST) applies exclusively to services provided by a goods transport agency to an unregistered person, subject to specified exclusions. The notification defines a "goods transport agency" as a person providing service in relation to transport of goods by road and issuing a consignment note. The applicant did not claim issuance of any consignment note and, on the material placed (including invoices), supplies a bundle of services - customs clearance (CHA), loading and unloading, port handling, liner fees and destination services - many of which are invoiced separately. Having regard to the statutory definition and the nature of services actually rendered and invoiced, the applicant's supplies do not fall within the prescribed description of GTA services eligible for the exemption. Consequently the notification exemption cannot be applied to the applicant's services. [Paras 13, 14]

The exemption under entry 21A/22A is not applicable to the services provided by the applicant.

Final Conclusion: Advance ruling: The services supplied by the applicant do not qualify as GTA services within the meaning of the notification and therefore are not eligible for exemption under entry number 21A of the Central Tax notification (and the corresponding entry 22A of the IGST notification); accordingly the exemption is denied.

Revision u/s 263 by CIT - Capital gains versus business income - stock-in-trade characterization - requirement of inquiry or verification under Explanation 2(a) to Section 263 - exercise of revisional power where two plausible views exist

HELD THAT:- We find no reason to interfere with the view taken by the High Court [2022 (10) TMI 1120 - KARNATAKA HIGH COURT]

Special Leave Petition is accordingly dismissed.

Capital receipt versus revenue receipt - restrictive / negative covenant - surrender of rights in capital asset - impairment of trading structure / profit making apparatus - intention of the parties gathered from contract language - perversity standard for interference with findings of fact under Section 260A

Capital receipt versus revenue receipt - restrictive / negative covenant - surrender of rights in capital asset - impairment of trading structure / profit making apparatus - intention of the parties gathered from contract language - Whether the sum of Rs.6 crores received under the co marketing agreement is a capital receipt or a revenue receipt - HELD THAT: - The Court examined the co marketing agreement as a whole and construed the parties' intention from the language of the contract. The agreement conferred on PFIZER exclusive co marketing rights, options in respect of future Hepatitis B and related products, rights of first refusal, obligations on the assessee to share technical information and to negotiate exclusively with PFIZER for new products, and contained other restrictive covenants. On that basis the assessee relinquished rights in respect of patents, trademarks and technical know how and accepted enduring restrictive obligations which impaired its profit making apparatus and deprived it of commercial freedom in respect of future products. The payments under Clause 7 were thus consideration for surrendering capital rights and for negative covenants, not payments for sale of stock in trade or routine commercial receipts. Applying the established test that compensation received for a covenant which impairs trading structure or results in loss of source of income is capital in nature, the Court concurred with the Tribunal's finding that the amount is a capital receipt. The Tribunal's conclusion was based on meticulous appreciation of evidence and was not shown to be perverse, and therefore interference under Section 260A was not warranted. [Paras 16, 17, 18, 19]

The receipt of Rs.6 crores under the agreement is a capital receipt.

Final Conclusion: The substantial question of law is answered in the negative in favour of the assessee; the Revenue's appeal is dismissed.

Deduction under section 80P(2)(d) - Applicability of section 80P(4) - Co-operative bank as a co-operative society - Interpretation of "banking" under the Banking Regulation Act - Revisional power under section 263 - Principle of mutuality

Deduction under section 80P(2)(d) - Co-operative bank as a co-operative society - Deductibility of interest earned by a cooperative society on investments made with a cooperative bank under section 80P(2)(d). - HELD THAT: - The Court held that deduction under section 80P(2)(d) is available where interest is earned by one cooperative society from investments made with another cooperative society. Relying on precedent of this Court and the Supreme Court's analysis in Kerala State Co-operative Agricultural & Rural Development Bank Ltd., the Court construed section 80P(4) as a proviso excluding only those co-operative banks that, by virtue of the Banking Regulation Act, are engaged in banking business requiring an RBI licence. Absent an amendment explicitly widening section 80P(4) to exclude all cooperative banks from section 80P(2)(d), investments by a cooperative society in a cooperative bank that qualifies as a cooperative society attract the deduction. The Tribunal's conclusion allowing deduction was therefore upheld. [Paras 28, 31, 32, 33]

Allowed deduction under section 80P(2)(d) for interest earned from the cooperative bank.

Applicability of section 80P(4) - Interpretation of "banking" under the Banking Regulation Act - Whether section 80P(4) operates to deny the benefit of section 80P(2)(d) to the assessee in the facts of these cases. - HELD THAT: - The Court examined section 80P(4) alongside definitions and provisions of the Banking Regulation Act and concluded that sub-section (4) excludes only cooperative banks that function as banks in the statutory sense (i.e., engage in banking requiring an RBI licence). The Court rejected the Revenue's contention that amendments to other provisions (e.g., section 194A(3)(v)) or legislative changes have the effect of excluding cooperative banks generally from the scope of section 80P. Consequently, section 80P(4) did not disentitle the assessee from claiming deduction where the recipient entity is a cooperative society within the meaning accepted by the Court and precedents. [Paras 30, 31, 32, 33]

Section 80P(4) does not preclude deduction in the present facts; its operation is confined to cooperative societies that are statutory 'banks' under the BR Act.

Revisional power under section 263 - Principle of mutuality - Validity of PCIT's exercise of revisional jurisdiction under section 263 to cancel the Assessing Officer's allowance of deduction. - HELD THAT: - The Court found that the twin conditions for invoking section 263-assessment being erroneous and prejudicial to the interests of revenue-were not satisfied. The Tribunal had correctly held that the assessment was not per se erroneous in disallowing the deduction claim in the circumstances and that established decisions support allowance of deduction under section 80P(2)(d) where applicable. The Revenue's arguments invoking rupture of mutuality and commercial character of the investments were considered but did not warrant interference given the legal position adopted by this Court and relevant precedents. Accordingly, the PCIT's revision was quashed. [Paras 33, 34]

PCIT's exercise of revisional power under section 263 was unjustified and was set aside.

Final Conclusion: The appeals are dismissed; deduction under section 80P(2)(d) in respect of interest earned from the cooperative bank (treated as a cooperative society for these purposes) is available and the PCIT's revision under section 263 was not justified.

Validity of notice under section 143(2) - limited scrutiny (CASS) - conversion of limited scrutiny to complete scrutiny - scope of enquiry in limited scrutiny - compliance with CBDT instructions - jurisdictional excess in assessment

Validity of notice under section 143(2) - limited scrutiny (CASS) - Acceptance of additional ground contesting validity of the notice under section 143(2) issued in revised format and entertaining that ground for adjudication - HELD THAT: - The Tribunal held that the additional ground raised by the assessee-challenging the validity of the notice under section 143(2) for non-compliance with the CBDT circular prescribing revised formats-did not involve discovery of new facts and was purely a legal question. Relying on the principle that a jurisdictional issue affecting taxability may be raised for the first time, the Tribunal admitted and entertained the additional ground for adjudication. [Paras 3]

Additional ground challenging the validity of the 143(2) notice was admitted and entertained.

Conversion of limited scrutiny to complete scrutiny - scope of enquiry in limited scrutiny - compliance with CBDT instructions - jurisdictional excess in assessment - Whether the assessment framed after a 143(2) notice selecting the return for limited scrutiny was sustainable where the Assessing Officer made additions beyond the limited issue without complying with CBDT instructions for conversion to complete scrutiny - HELD THAT: - The Tribunal examined the CBDT proforma for limited scrutiny and the Board's Instruction No.5/2016 setting out the procedure and safeguards for converting a case from limited to complete scrutiny, including requirement of forming a reasonable view, credible material, nexus, and administrative approval where applicable. The Tribunal found that although the heading of the notice referred to scrutiny under CASS and identified the issue of cash deposits during demonetisation, the Assessing Officer did not follow the prescribed procedure for expanding scope of enquiry before making wider additions; the conversion safeguards were not observed. Reliance was placed on authoritative decisions holding that expansion of a limited-scrutiny scope without following CBDT directions results in excess of jurisdiction. In consequence, the Tribunal concluded that the assessment was passed by exceeding the limited powers conferred by the notice and was therefore unsustainable. [Paras 11, 12, 13, 14]

Assessment order quashed for having been made beyond the scope of limited scrutiny without complying with CBDT instructions for conversion to complete scrutiny.

Final Conclusion: The Tribunal admitted the assessee's additional jurisdictional ground and, finding that the Assessing Officer exceeded the scope of a limited-scrutiny selection without following the CBDT-prescribed procedure for conversion to complete scrutiny, quashed the assessment for Assessment Year 2017-18 and allowed the appeal.

Rectification under section 154 - processing under section 143(1) - claim under section 89(1) relief - Form 10E requirement for section 89 claim - intimation and opportunity to respond under the first proviso to section 143(1)(a) - remand to the Assessing Officer for fresh consideration

Processing under section 143(1) - intimation and opportunity to respond under the first proviso to section 143(1)(a) - claim under section 89(1) relief - Whether the claim for relief under section 89(1) was correctly rejected by CPC in the intimation under section 143(1) without giving the statutory intimation and opportunity to respond and without considering Form 10E - HELD THAT: - The assessee filed return on 23.12.2021 claiming relief under section 89(1). CPC issued intimation under section 143(1) on 13.10.2022 rejecting the relief. The assessee filed application for rectification under section 154 on 05.11.2022 and e-filed Form 10E and supporting documents on 04.11.2022. The Tribunal noted that the first proviso to section 143(1)(a) requires that no adjustment be made unless an intimation is given to the assessee and any response received is considered before making adjustments. From the material before the Tribunal it was not prima facie apparent that the statutory intimation and an opportunity to respond had been afforded to the assessee or that the Form 10E and related material were considered prior to rejection. In fairness and to enable verification of these factual and legal aspects, the Tribunal concluded that the matter should be restored to the file of the Assessing Officer for examination and verification of whether the statutory intimation and opportunity were given and whether the Form 10E and other documents were available and considered before passing the impugned orders. [Paras 5, 6, 7]

Matter set aside and remanded to the Assessing Officer to examine and verify whether the intimation under the first proviso to section 143(1)(a) was issued and any response considered, and to adjudicate the section 89(1) claim afresh after affording the assessee a reasonable opportunity of hearing.

Final Conclusion: Appeal partly allowed for statistical purposes; the rectification/order rejecting section 89(1) relief is set aside and the matter is remitted to the Assessing Officer for fresh adjudication after verifying issuance of the statutory intimation, consideration of the e filed Form 10E and other documents, and after affording the assessee a reasonable opportunity to be heard.

Rectification under Section 143(1)/154 - processing of return under section 143(1) - nullification of demand - finality of rectification order - quashing of appellate order

Rectification under Section 143(1)/154 - nullification of demand - quashing of appellate order - Effect of rectification order under Section 143(1)/154 on demands confirmed by the Commissioner of Income-tax (Appeals). - HELD THAT: - The Tribunal found that the Assessing Officer had issued a rectification order under Section 143(1)/154 which wiped out the demands originally raised on processing of the return. Having nullified the demand by the rectification, no demand remained outstanding for the impugned assessment year. The appellate order which confirmed those demands could not be sustained in view of the rectification. The Revenue representative accepted this position. Consequently the grounds raised by the assessee were allowed and the impugned appellate order was quashed. [Paras 2]

The rectification under Section 143(1)/154 nullified the demands and the appellate order confirming those demands is quashed.

Final Conclusion: Appeal allowed; impugned appellate order quashed as the AO's rectification under Section 143(1)/154 wiped out the demands for Assessment Year 2019-20.

Ad-hoc disallowance - Verification of books of account and vouchers - Requirement to point out specific discrepancies - Deletion of unsupported additions

Ad-hoc disallowance - Requirement to point out specific discrepancies - Deletion of unsupported additions - Whether ad-hoc disallowances made by the Assessing Officer and upheld by the Commissioner (Appeals) without pointing out specific instances or findings are sustainable - HELD THAT: - The Tribunal found that all contested disallowances were made on an ad-hoc basis by the Assessing Officer without identifying any specific discrepancy in the assessee's books or vouchers. The assessee had offered explanations and produced supporting material for the expenditures, and the appellate authorities did not give due weight to those explanations but proceeded to make and sustain blanket percentage disallowances to guard against possible revenue leakage. The Tribunal held that ad-hoc disallowances, imposed without specific findings or instances of discrepancy and merely to cover potential leakage, are legally unsustainable. Consequently, where no particularized infirmity in the accounts is demonstrated, such additions must be deleted. [Paras 9, 10]

All the ad-hoc disallowances sustained by the lower authorities are set aside and the Assessing Officer is directed to delete the disallowances.

Final Conclusion: The appeal is allowed: the Tribunal set aside the order of the Commissioner (Appeals)/NFAC and directed deletion of the ad-hoc disallowances for Assessment Year 2013-14.

Bogus accommodation entries / bogus LTCG - reopening of assessment and reassessment under the Incometax Act - requirement that the alleged transaction must pertain to the relevant previous year - onus on the assessee to establish genuineness of share price movements - verification of credit of tax deducted at source by the Assessing Officer

Bogus accommodation entries / bogus LTCG - requirement that the alleged transaction must pertain to the relevant previous year - onus on the assessee to establish genuineness of share price movements - Whether the addition of the alleged benefit of Rs. 1,77,391 as a bogus transaction in respect of trading in a pennystock could be sustained for AY 2011-12. - HELD THAT: - The Tribunal examined the factual material including contract notes and the Demat holding statement which showed purchase of 10,000 shares on 2829.03.2011 and that the assessee continued to hold those shares as on 31.03.2011. The Tribunal accepted the assessee's submission (and that not controverted by the Department) that no sale occurred in the previous year relevant to AY 201112; consequently the addition treating the amount as a bogus sale/benefit in AY 201112 was unsustainable. In view of the absence of a sale in the year under consideration the Tribunal followed the authority relied upon by the assessee and held that the alleged transaction could not be treated as a bogus transaction for AY 201112, allowing the ground of appeal on merits. [Paras 4, 8]

Addition of Rs. 1,77,391 treated as bogus transaction is deleted and ground no. 2 of the appeal is allowed for AY 2011-12.

Verification of credit of tax deducted at source by the Assessing Officer - reopening of assessment and reassessment under the Incometax Act - Whether the credit for TDS claimed by the assessee requires verification and adjudication by the Assessing Officer. - HELD THAT: - The Tribunal observed that the issue of incorrect credit of TDS was not adjudicated by the ld. CIT(A). The matter was therefore left open for verification: the assessee was directed to furnish necessary evidence and the Assessing Officer was directed to verify and allow the credit in accordance with law after examination of the documents. [Paras 6]

TDS credit issue is remitted to the Assessing Officer for verification and appropriate action on production of evidence by the assessee.

Final Conclusion: The appeal is allowed: the addition of Rs. 1,77,391 as a bogus transaction for AY 201112 is deleted; the claim of TDS credit is remitted to the Assessing Officer for verification and appropriate adjustment in accordance with law.

Credit of tax deducted at source (TDS) and matching of income - Restriction of TDS credit under Rule 37BA in proportion to income returned to tax - Application of Section 199 and Rule 37BA - allocation of TDS to the assessment year for which income is assessable - Rectification of TDS statements by deductor and declaration by deductee for re allocation of credit

Credit of tax deducted at source (TDS) and matching of income - Restriction of TDS credit under Rule 37BA in proportion to income returned to tax - Application of Section 199 and Rule 37BA - allocation of TDS to the assessment year for which income is assessable - Whether the TDS credit claimed in the intimation for AY 2023-2024 was correctly restricted by CPC and confirmed by the CIT(A) under Section 199 read with Rule 37BA. - HELD THAT: - The Tribunal upheld the view that credit for TDS is to be allowed only to the extent the corresponding income is returned to tax in the assessment year for which credit is claimed. The Tribunal agreed with the CIT(A)'s application of Section 199 and Rule 37BA, noting that the TDS of Rs. 5,24,600 reflected in Form 26AS for AY 2023-24 related to gross receipts of Rs. 5,24,60,000 which, as admitted, had been declared across AYs 2021-22, 2022-23 and 2023-24. As no declaration/correction was effected with the deductor to re allocate the TDS to the earlier years and the mismatch persisted at the time of processing, CPC correctly restricted the TDS credit in the intimation under section 143(1) in accordance with Rule 37BA and Section 199. The assessee's contentions that there was no mismatch or that the return was defective were rejected for the reasons recorded by the CIT(A). [Paras 4]

The restriction of TDS credit in the intimation for AY 2023-2024 to the amount corresponding to income returned in that year was sustained; the appeal on this point is dismissed.

Rectification of TDS statements by deductor and declaration by deductee for re allocation of credit - Application of Section 199 and Rule 37BA - allocation of TDS to the assessment year for which income is assessable - Whether and how the TDS credited (but not allowed in AY 2023-24) should be given effect for the assessment years in which the income was actually returned to tax. - HELD THAT: - Although the Tribunal found no infirmity in the CPC's adjustment for AY 2023-24, it recognised the assessee's consistent plea that the gross receipts on which TDS was deducted related partly to AYs 2021-22 and 2022-23. The Tribunal directed that the Assessing Officer should give necessary credit of TDS to the income returned to tax in those earlier years, permitting the assessee to seek appropriate rectification/correction through the deductor and for the AO to make adjustments as required, consistent with Section 199 and Rule 37BA. This direction preserves the legal entitlement to credit in the years where the income is assessable while upholding the correctness of the intimation for AY 2023-24. [Paras 4]

The AO is directed to grant the TDS credit in respect of receipts already returned to tax in AYs 2021-22 and 2022-23; otherwise the appeal is dismissed.

Final Conclusion: The Tribunal dismissed the assessee's appeal against the restriction of TDS credit in the intimation for AY 2023-2024, upholding the application of Section 199 and Rule 37BA; however, the AO was directed to grant the appropriate TDS credit in the earlier assessment years (2021-22 and 2022-23) to which the receipts pertained.

Unexplained cash credits under section 69A - rectification under section 154 for correction of assessment - burden of proof for source of cash deposits - reliability of cash book as evidence - appellate authority's duty to take note of rectification

Rectification under section 154 for correction of assessment - appellate authority's duty to take note of rectification - Whether the Commissioner (Appeals) was justified in confirming addition of Rs.32,00,000 despite AO having rectified the assessment to reduce the addition by Rs.13,50,000 under section 154. - HELD THAT: - The Tribunal found that the AO had, by a rectification order under section 154, admitted and corrected an apparent factual error in the quantum of cash deposits recorded for one bank account, thereby reducing the addition by Rs.13,50,000 (from Rs.32,00,000 to Rs.18,50,000). That factual correction was brought to the notice of the Commissioner (Appeals) during appellate proceedings, but the Commissioner (Appeals) confirmed the original addition of Rs.32,00,000 without recording any reason for ignoring the AO's rectification. The Tribunal held that the Commissioner (Appeals) erred in confirming the larger addition when the assessment, as rectified by the AO, should have formed the basis of appellate decision; accordingly the confirmed addition was restricted to the rectified quantification of Rs.18,50,000.

The confirmation of addition was reduced to reflect the AO's rectification; the addition is confined to Rs.18,50,000.

Unexplained cash credits under section 69A - burden of proof for source of cash deposits - reliability of cash book as evidence - Whether the assessee satisfactorily explained the source of cash deposits in bank accounts so as to avoid addition under section 69A to the extent of Rs.18,50,000. - HELD THAT: - On the merits, the Tribunal agreed with the Commissioner (Appeals) that the assessee's explanation rested solely on a self-prepared cash book/cash flow statement whose entries were unsubstantiated by corroborative documents. The cash allegedly represented withdrawals made in prior years (as far back as 2014) and no plausible explanation was offered for retaining such large amounts in liquid cash for prolonged periods before redepositing. The Tribunal accepted the appellate authority's finding that mere statements without supporting evidence are insufficient to discharge the burden of proof to explain unexplained cash credits; it was held improbable that a prudent person would hold such large idle cash when banking facilities were available. Consequently, the Tribunal upheld the addition to the extent of Rs.18,50,000 as unexplained cash credits under section 69A.

The addition on account of unexplained cash deposits is upheld to the extent of Rs.18,50,000; the assessee's explanation is rejected as unsubstantiated.

Final Conclusion: The appeal is partly allowed: the addition confirmed by the authorities is reduced from Rs.32,00,000 to Rs.18,50,000 to give effect to the AO's rectification under section 154, while the reduced addition of Rs.18,50,000 is upheld on merits as unexplained cash credits under section 69A.

Deemed dividend under section 2(22)(e) - accumulated profits determined as on the date of payment/advancement - Explanation 2 to section 2(22)(e) - scope of "accumulated profits" - exclusion of current year business profit (accrual at year-end) from accumulated profits

Deemed dividend under section 2(22)(e) - accumulated profits determined as on the date of payment/advancement - Explanation 2 to section 2(22)(e) - scope of "accumulated profits" - exclusion of current year business profit (accrual at year-end) from accumulated profits - Whether the addition made under section 2(22)(e) by including pro rata/current year business profit up to the date of advances was justified or whether accumulated profits must exclude current year's business profit and be determined on the earlier closing date - HELD THAT: - The Tribunal, following the Coordinate Bench and the Gujarat High Court precedent in CIT v. M. B. Stockholding (P) Ltd., held that for the purpose of section 2(22)(e) the company's "accumulated profits" are to be determined with reference to the date of advancement but that current year business profits - which accrue only on closure of the accounting year - are not to be included as part of accumulated profits. Explanation 2 to section 2(22)(e) was considered and interpreted in light of Supreme Court authority that profits of a business accrue on the closing of the year; Explanation 2 does not mandate inclusion of unrealized or business profits which have not accrued at yearend. Reliance on decisions where midyear realizable items (e.g., capital gains, dividend, interest, subsidies) that are determinable on receipt may be taken into account was noted, but the Tribunal found that the Assessing Officer's pro rata inclusion of current year's business profit was not warranted on the facts. Applying these principles to the case, the Tribunal restricted the deemed dividend to the accumulated profits actually available as at the earlier relevant date and deleted the balance addition made by the Assessing Officer and affirmed by the CIT(A). [Paras 9, 10]

Addition under section 2(22)(e) confirmed only to the extent of accumulated profits existing excluding pro rata/current year business profit; the balance addition deleted and appeal partly allowed.

Final Conclusion: The Tribunal allowed the appeal in part: following precedents holding that current year business profit (which accrues at yearend) is not to be included in accumulated profits for section 2(22)(e), the deemed dividend addition was restricted to the accumulated profits actually available as at the relevant earlier date and the excess addition was deleted.

Scope of limited scrutiny selection - jurisdiction of Assessing Officer to make additions beyond limited scrutiny - conversion of limited scrutiny into complete scrutiny - CASS (Computer Aided Scrutiny Selection) - assessment under section 144 and scope limitation - CBDT Circular No. 3/2019 on limited scrutiny

Admission of additional ground based on records - National Thermal Power Co. Ltd. precedent on admission - Additional ground challenging the Assessing Officer's jurisdiction in limited scrutiny was admitted for adjudication. - HELD THAT: - The Tribunal considered the assessee's request to admit an additional ground which challenged the competence of the Assessing Officer to make additions beyond the issue selected under limited scrutiny. The assessee contended the ground was a pure legal issue arising from assessment records and required no further fact-finding. The Revenue urged dismissal for non-raising of the ground earlier. Relying on precedent cited and on the record, the Tribunal found the additional ground to be a legal question emergent from the assessment folder and fit for admission without further verification, and therefore admitted it for adjudication. [Paras 5]

Additional ground admitted.

Scope of limited scrutiny selection - jurisdiction of Assessing Officer to make additions beyond limited scrutiny - conversion of limited scrutiny into complete scrutiny - CBDT Circular No. 3/2019 on limited scrutiny - Additions made by the Assessing Officer that were not within the issue selected for limited scrutiny are without jurisdiction and are to be deleted. - HELD THAT: - The Tribunal examined the assessment notice which expressly stated selection for limited scrutiny to examine large cash deposits. During assessment, the Assessing Officer made additions relating to peak credits in bank accounts and under-reported income noted from Form 26AS, neither of which formed the subject matter of the limited scrutiny selection. The Assessing Officer did not convert the case into a complete scrutiny in accordance with the CBDT instruction before making those additions. Pursuant to the reasoning in relevant precedents and the CBDT Circular, the Tribunal held that expanding inquiries beyond the limited scrutiny selection without following mandated conversion procedures renders such additions ultravires the Assessing Officer's jurisdiction. Applying that principle to the facts, the Tribunal set aside the CIT(A) order and directed deletion of the contested additions, leaving other grounds on merits open. [Paras 7, 9, 11]

Additions deleted as beyond the scope of limited scrutiny; appeal allowed on this ground.

Final Conclusion: The additional ground challenging jurisdiction was admitted and, on its merits, the Tribunal held that the additions made beyond the scope of the limited scrutiny selection (without conversion to complete scrutiny as per CBDT instruction) were without jurisdiction and directed deletion; the appeal is allowed and other merits are left open.

Taxation of anonymous donations under section 115BBC - onus on the assessee to prove genuineness of donations - requirement to maintain donor identity and address - procedure and opportunity to produce donors for verification / cross examination - tied grants received for specific purposes are not income - requirement to file Form No.9A and condonation of delay - treatment of advance grants as refundable liability

Taxation of anonymous donations under section 115BBC - onus on the assessee to prove genuineness of donations - requirement to maintain donor identity and address - procedure and opportunity to produce donors for verification / cross examination - Addition treating certain donations as anonymous under section 115BBC was deleted. - HELD THAT: - The Tribunal found that the assessee had produced records of identity and addresses of donors and other particulars, and that the Assessing Officer doubted the donations without following appropriate procedure or giving the assessee opportunity to produce the donors or to cross examine adverse statements. The Bench, following a co-ordinate Bench decision which examined the enquiries made by the Assessing Officer (including attendance, confirmations, unserved summons and denials), concluded that mere suspicion by the Assessing Officer-without bringing evidence on record that donations were not genuine and without affording the assessee proper opportunity-was insufficient to invoke the provisions of section 115BBC. Consequently, the onus on the assessee to establish genuineness having been discharged by production of donor details, the addition under section 115BBC could not be sustained. [Paras 6, 7]

Addition under section 115BBC deleted and ground allowed in favour of the assessee.

Tied grants received for specific purposes are not income - requirement to file Form No.9A and condonation of delay - treatment of advance grants as refundable liability - Addition of unspent tied grant shown in the balance sheet (and not brought to income) was deleted. - HELD THAT: - The Tribunal accepted that the sum in question was an advance grant received from a government agency for specific projects and subject to conditions that unutilised amounts were refundable; such tied grants are not voluntary contributions and cannot be treated as income. The obligation to file Form No.9A arises in the specific context indicated by the rules and does not convert a tied grant into taxable income; acquiescence or delay in procedural filing cannot override the statutory character of the grant. The Assessing Officer therefore proceeded on a wrong premise in treating the tied grant as the assessee's income, and the deletion by the CIT(A) was upheld. [Paras 4, 14]

Addition in respect of tied/advance grant deleted and grounds raised by the Revenue in this regard dismissed.

Final Conclusion: The assessee's appeal is allowed and the Revenue's appeal is dismissed; the additions challenged under section 115BBC and in respect of the tied advance grant were deleted.

Re-opening of assessment - no reassessment merely for verification - reason to believe versus reason to suspect - quashing of reassessment

Re-opening of assessment - no reassessment merely for verification - reason to believe versus reason to suspect - quashing of reassessment - Validity of the re-opening of assessment under section 147 read with section 148 for A.Y. 2015-16 - HELD THAT: - The Assessing Officer re-opened the assessment solely to verify the source of funds for purchase of immovable property, the reasons recorded expressly stating verification as the primary purpose. Judicial authorities and accepted principles require a 'reason to believe' that income chargeable to tax has escaped assessment and prohibit reopening based merely on suspicion, discrepancy or for making a fishing or verification enquiry. The Tribunal examined the material relied upon by the AO and the recorded reasons and found them to amount only to a basis for verification and suspicion rather than a tangible nexus or live link establishing escapement of income. Applying the settled distinction between reason to believe and reason to suspect and the precedents cited, the re-opening was held to be without lawful basis. Consequentially the reassessment completed pursuant to the invalid re-opening could not survive. [Paras 15, 16]

Re-opening of assessment quashed and the consequential assessment order set aside; other grounds left unadjudicated as academic.

Final Conclusion: The Tribunal allowed the appeal in part by quashing the re-opening of assessment for A.Y. 2015-16 and setting aside the consequent reassessment; other contentions were not decided as they became academic.

Penalty under section 271(1)(c) - Unexplained cash credits - Parallel nature of assessment and penalty proceedings - Nexus between quantum additions and penalty imposition

Penalty under section 271(1)(c) - Unexplained cash credits - Parallel nature of assessment and penalty proceedings - Deletion of the penalty imposed under section 271(1)(c) in respect of additions on account of unexplained cash credits. - HELD THAT: - The Tribunal found that the assessee had filed relevant details and supporting evidence in respect of the cash credits which the Assessing Officer did not accept in the assessment order. The Tribunal applied the principle that assessment (quantum) proceedings and penalty proceedings are parallel and distinct, so that every addition in assessment does not automatically attract penalty. Reliance was placed on the ratio that absence of concurrence in the assessment does not ipso facto sustain a penalty where the assessee has produced evidence. On that basis the Tribunal concluded there was no reason to sustain the impugned penalty. [Paras 4, 5]

The penalty under section 271(1)(c) relating to the unexplained cash credits was deleted and the appeal allowed.

Final Conclusion: Penalty under section 271(1)(c) imposed on account of unexplained cash credits set aside, appeal allowed.

Summary order. Appeal admitted; interim stay granted in I.A. No. 107988 of 2024 pending disposal of the Civil Appeal; I.A. No. 107988/2024 disposed of.

Deduction of duty on ship stores consumed during coastal voyage - inclusion of freight in assessable value of an imported vessel - valuation of vessels as conveyances vis-a -vis statutory transformation into goods - transaction value and declared price as the gold standard in customs valuation

Deduction of duty on ship stores consumed during coastal voyage - Finalisation of assessment after deduction of duty on ship stores consumed during the coastal trial run was correct - HELD THAT: - The assessing authority, when finalising the bill of entry after the coastal voyage from Pipavav to Mumbai and back, deducted duty attributable to ship stores consumed during that voyage. The Tribunal found no infirmity in that adjustment and accepted that the deputy commissioner correctly reduced the duty liability to reflect consumption of stores during the coastal run. The appellate contention that combining import of the vessel and conversion/consumption of stores in a single bill of entry caused revenue loss was not sustained on the record and no error was found in the final assessment carried out by the adjudicating authority.

Assessment finalised by the original authority upholding deduction for ship stores consumed is correct and sustained.

Inclusion of freight in assessable value of an imported vessel - valuation of vessels as conveyances vis-a -vis statutory transformation into goods - transaction value and declared price as the gold standard in customs valuation - Freight is not includible in the assessable value of a vessel imported under its own propulsion and declared value must be respected unless valid grounds under valuation rules justify departure - HELD THAT: - Relying on the Tribunal's reasoning in Sachin Kshirsagar, the Tribunal explained that vessels, as 'conveyances', occupy a special position and are often only momentarily treated as 'goods' for statutory compliance; the cost of self-propulsion or any additional insurance/freight for movement to a place of registration does not add to the value of the vessel for customs assessment. The declared transaction value is the normative 'gold standard' under the valuation scheme and additions such as freight may be included only in circumstances envisaged by the valuation rules (notably Rule 10) and where they satisfy the statutory tests. Applying that principle, the Commissioner (Appeals) was found to be incorrect in directing inclusion of freight; the original order excluding freight was held to be legally correct.

Direction to include freight in the assessable value is unsustainable; the original assessment excluding freight is upheld.

Final Conclusion: The appeal is allowed; the order-in-original is upheld and the impugned order of the Commissioner (Appeals) is set aside, with consequential relief to the appellant.

Classification under CTH 3002 - essential character doctrine - agglutinating sera as the active component - diagnostic test kits specified in List 4 - exemption under Serial No. 148 of Notification No. 12/2012-Cus and Serial No. 167 of Notification No. 50/2017-Cus - reliance on Inter Care (Tribunal precedent)

Classification under CTH 3002 - essential character doctrine - agglutinating sera as the active component - diagnostic test kits specified in List 4 - exemption under Serial No. 148 of Notification No. 12/2012-Cus and Serial No. 167 of Notification No. 50/2017-Cus - reliance on Inter Care (Tribunal precedent) - Whether the imported hCG Pregnancy Rapid Test Strip and Cassette are classifiable under CTH 3002 and eligible for exemption under the cited Notifications on the basis that their essential character is derived from agglutinating sera - HELD THAT: - The Tribunal accepted the Commissioner's finding that there is no dispute as to the description of the imported goods and their classification under CTH 3002. The determinative legal reasoning rests on the essential character doctrine: agglutinating sera is the only active component on which the test reaction is based, while other components (membrane sheet, plastic cassette and absorbent) are passive and serve to provide stability and shelf life. This conclusion was supported by laboratory test reports and by precedent in Inter Care, where pregnancy test kits based on agglutinating sera were held to fall within the notification entry covering diagnostic test kits. Applying that principle, the goods being diagnostic test kits whose essential character is defined by agglutinating sera fall within the description in List 4 and thereby satisfy the condition in column (2) of Serial Nos. 148 and 167 of the Exemption Notifications, entitling them to nil basic customs duty. The Tribunal found no infirmity in the Commissioner's conclusion and affirmed the dropping of the proposed demands. [Paras 4, 28, 40]

The disputed hCG Pregnancy Rapid Test Strip and Cassette are classifiable under CTH 3002 and, having their essential character defined by agglutinating sera, are eligible for exemption under the cited Notifications; the demands in the show cause notices were rightly dropped.

Final Conclusion: The department's appeals are dismissed; the Commissioner's order dropping the proceedings and allowing exemption for the imported pregnancy test kits is upheld.

Horizontal/vertical agreements and anti-competitive agreements under Section 3(1) read with Section 3(3) of the Competition Act, 2002 - abuse of dominant position and dominance assessment under Section 4 of the Competition Act, 2002 - relevant market definition and dominance enquiry - closure of information under Section 26(2) of the Competition Act, 2002 - interim relief under Section 33 of the Competition Act, 2002 - competence of the Commission to adjudicate disputes more appropriately triable before other fora

Horizontal/vertical agreements and anti-competitive agreements under Section 3(1) read with Section 3(3) of the Competition Act, 2002 - Applicability of Section 3(1) read with Section 3(3) of the Act to the alleged conduct of the Opposite Parties. - HELD THAT: - The Commission examined the factual matrix and the relationship among the Opposite Parties. Section 3(3) requires the existence of two or more enterprises engaged in identical or similar trade or to be presumed part of an agreement by participation in furthering it. On the material on record and the roles of broadcasters versus MSOs/LCOs, the Commission found that the preconditions for applicability of Section 3(3) are not satisfied. Consequently, Section 3(1) read with Section 3(3) has no manner of application in the present case. [Paras 14]

No case of contravention under Section 3(1) read with Section 3(3) is made out; Section 3 is not applicable on the facts.

Abuse of dominant position and dominance assessment under Section 4 of the Competition Act, 2002 - relevant market definition and dominance enquiry - Whether a contravention of Section 4 of the Act is established against the Opposite Parties. - HELD THAT: - For a Section 4 enquiry the Commission would ordinarily define the relevant market and assess dominance. Having considered the alleged abuses, the Commission concluded that it need not define a precise relevant market in this matter. The Commission also noted that the Act does not provide for inquiry into joint/collective dominance as framed by the Informants. On the record and in law, the Commission found that no case of contravention under Section 4 has been established against the Opposite Parties. [Paras 15]

No contravention of Section 4 is established; no further dominance inquiry is warranted in this proceeding.

Closure of information under Section 26(2) of the Competition Act, 2002 - interim relief under Section 33 of the Competition Act, 2002 - competence of the Commission to adjudicate disputes more appropriately triable before other fora - Whether the Information should be proceeded with or closed and whether interim relief as prayed under Section 33 should be granted. - HELD THAT: - The Commission observed that, notwithstanding the grievances, the matters alleged give rise to disputes which are not appropriately resolved by the Commission on the present material. In light of the findings that Sections 3 and 4 are not attracted and that the Commission is not the right forum for adjudication of the core grievances, the Commission found prima facie no contravention. Consequently, further enquiry was not warranted and the Information was liable to be closed under the statutory provision permitting closure of information. [Paras 16, 17]

Information closed forthwith under Section 26(2); prayer for interim relief under Section 33 rejected.

Final Conclusion: The Commission, after considering the material, concluded that neither Section 3 nor Section 4 of the Competition Act is attracted on the facts, the Commission is not the appropriate forum to adjudicate the core disputes raised, the Information is closed under Section 26(2) and the request for interim relief under Section 33 is rejected.

Abuse of dominant position - Investigation threshold under Section 26(2) of the Competition Act, 2002 - Prima-facie case for investigation - Scope of the Competition Act in relation to statements on social media/misinformation - No prima-facie contravention of Section 4

Abuse of dominant position - Scope of the Competition Act in relation to statements on social media/misinformation - Prima-facie case for investigation - Allegations that the Opposite Party published misleading statements on its YouTube channel do not, on the material before the Commission, constitute a prima-facie case of abuse of dominant position under the Act warranting investigation. - HELD THAT: - The Commission examined the Information alleging that the Opposite Party, via a YouTube video, made inaccurate and misleading statements about the cost and quality of infertility treatments which, it was alleged, would discourage competitors from offering affordable services and thereby amount to abuse of dominance under Section 4. The Commission found that the nature of the alleged statements and the material placed on record do not fall within the ambit of the Competition Act for establishing a prima-facie contravention of Section 4. Having considered the factual matrix and the legal standard for initiating an investigation under Section 26(2), the Commission concluded there is no prima-facie case that would justify further inquiry or investigation into the alleged conduct. [Paras 11, 12, 13, 14]

Information closed under Section 26(2) for lack of prima-facie case; no investigation directed.

Final Conclusion: The Commission dismissed the Information and ordered its closure under Section 26(2) of the Competition Act, 2002, holding that the allegations of misleading social media statements did not disclose a prima-facie contravention of Section 4 and therefore no investigation or relief under Section 33 was warranted.

Jurisdiction of Competition Commission vis-a -vis sectoral regulator - abuse of dominant position - predatory pricing - relevant market delineation - internet exchange services - dominance assessment - market share, traffic and connected networks - closure under Section 26(2) of the Competition Act, 2002

Jurisdiction of Competition Commission vis-a -vis sectoral regulator - The Commission's jurisdiction to examine allegations of abuse of dominant position by an entity operating in the telecom/IXP sector is not ousted by the existence of a sectoral regulator (TRAI/DoT). - HELD THAT: - The preliminary objection that TRAI/DoT is the appropriate forum and that the Commission must await the sectoral regulator's determination was considered and rejected. The Commission held that compliance with sectoral regulations is independent of the Competition Act and that the Commission retains its distinct mandate to eliminate anti competitive practices. The Bharti Airtel precedent was examined and confined to its facts; it does not establish a rule that the Commission must always defer to a sectoral regulator. Invocation of Section 21A (reference to sectoral regulator) remains a discretionary power of the Commission to be exercised where appropriate, but is not a jurisdictional precondition to inquiry under the Act. [Paras 48, 49, 50, 51, 52]

Preliminary objection on lack of jurisdiction overruled; Commission may proceed to examine the allegations under the Competition Act.

Relevant market delineation - internet exchange services - The relevant market is delineated as the provision of internet exchange services in India. - HELD THAT: - Parties proffered competing product and geographic market definitions. Having considered the homogeneous nature of the services nationwide and the parties' submissions at the preliminary conference, the Commission deemed it appropriate to adopt a pan India market definition for internet exchange services. This delineation framed subsequent assessment of dominance and alleged abuse. [Paras 54]

Relevant market defined as provision of internet exchange services in India.

Dominance assessment - market share, traffic and connected networks - abuse of dominant position - predatory pricing - On the materials available, dominance of NIXI (OP) in the delineated market is not established; consequently, predatory pricing and denial of market access allegations do not give rise to a competition concern warranting investigation. - HELD THAT: - The Commission required pan India and city wise data on traffic, IX points and connected networks but noted incomplete compliance by parties. It relied on submitted figures showing the Informant leading in traffic, IX points and connected networks in the six cities where it operates, and other market participants (AMS IX, DE CIX) exist, indicating contestability and absence of entry barriers. The Commission observed that the Informant has greater presence in several metrics (traffic and connected networks) for the relevant period and that OP's conduct (temporary concessional pricing to develop market presence) was plausibly aligned with its social/developmental mandate and not shown to satisfy the classical predation requirements (dominance, pricing below cost with intent and recoupment). On the record, the OP did not appear to possess the economic position to affect the market as alleged. [Paras 56, 57, 58, 60, 61]

Dominance not established; no prima facie case of abuse (predatory pricing/denial of market access) made out.

Closure under Section 26(2) of the Competition Act, 2002 - The Information is closed under Section 26(2) of the Competition Act, 2002 for lack of competition concern. - HELD THAT: - Having resolved jurisdictional objections, delineated the relevant market and examined available market data and submissions, the Commission concluded that the OP does not appear dominant and that the allegations do not raise a competition issue requiring investigation. Confidentiality claims over certain documents filed by the Informant were granted for three years subject to Section 57. [Paras 61, 62]

Matter closed forthwith under Section 26(2) of the Act; confidentiality over specified documents granted for three years subject to law.

Final Conclusion: The Commission overruled the preliminary objection of lack of jurisdiction, defined the relevant market as internet exchange services in India, found that the OP (NIXI) is not established to be dominant on the available record and that no prima facie abuse (predatory pricing/denial of market access) is made out; the Information is closed under Section 26(2) of the Competition Act, 2002, with limited confidentiality granted over certain documents.

Prima facie case - cartelisation - cartel prohibition under Section 3(3) of the Act - closure of information under Section 26(2) - rejection of reliefs under Section 33

Prima facie case - cartelisation - cartel prohibition under Section 3(3) of the Act - closure of information under Section 26(2) - Whether the information discloses a prima facie case of cartelisation in procurement of medicines by ESIC warranting investigation under Section 3(3) of the Act - HELD THAT: - The Commission examined the material on record and noted the Informant's allegations of a cartel involving certain individuals, ESIC officials and pharmaceutical companies in e-tender procurements. The Informant, however, failed to array several alleged parties in the prescribed format and did not furnish requisite particulars of specific tenders, medicines or counterparties despite two opportunities to do so. The only document placed on record was an unspecified comparison of prices for a single dressing product (POP Bandage), which, on scrutiny against publicly available rates, did not establish the claimed overpricing or collusion. Given the absence of cogent evidence identifying the alleged anti-competitive conduct, the Commission found that the material did not permit formation of a prima facie view of contravention of the cartel prohibition under Section 3(3). Accordingly, there was no basis to proceed to an investigation under Section 26(1) and the information could be closed under Section 26(2). [Paras 16, 17]

Information closed under Section 26(2) for lack of prima facie case of cartelisation; no investigation directed.

Rejection of reliefs under Section 33 - closure of information under Section 26(2) - Whether any interim or other reliefs sought by the Informant under Section 33 arise on the material - HELD THAT: - The Commission recorded that since no prima facie case under Section 3(3) was made out and the information was ordered to be closed under Section 26(2), there was consequently no foundation to grant any of the interim or other reliefs sought by the Informant under Section 33. The prayers for enquiry, cancellation of tenders, extraction of communications and constitution of committees therefore did not survive in the absence of a directed investigation. [Paras 17]

Prayers for relief under Section 33 rejected as not maintainable in view of closure of the information.

Final Conclusion: The Commission, after giving the Informant opportunities to supply particulars and on consideration of the material available on record, found no prima facie contravention of the cartel prohibition and closed the information under Section 26(2); consequentially, the requests for investigation and other reliefs were rejected, and the Secretary was directed to communicate the order to the Informant.

Abuse of dominant position - No prima-facie case for investigation - Contractual/inter se dispute not a competition concern - Scope and jurisdiction of the Competition Act

Abuse of dominant position - No prima-facie case for investigation - Allegations of abuse of dominant position by the Opposite Parties do not prima facie warrant investigation under the Competition Act, 2002. - HELD THAT: - The Commission examined the Informant's claims that the Opposite Parties threatened disconnection of power, enforced a lock in clause, refused adjustment of rental arrears against security deposit and restricted access to remove stored goods. Having considered the nature of these allegations and the material on record, the Commission concluded that the conduct as pleaded does not raise competition concerns warranting a probe under Section 26 of the Act. The Commission observed that the asserted acts appear as inter se contractual disputes and do not, on the face of the Information, establish the elements of abuse of dominance required to initiate an investigation. In the circumstances and on the material placed before it, no prima facie case of contravention of Section 4 was made out. [Paras 22, 23, 24]

No prima-facie case of abuse of dominant position; information closed under Section 26(2).

Contractual/inter se dispute not a competition concern - Scope and jurisdiction of the Competition Act - The allegation that the lease was camouflaged as a Leave and License Agreement to avoid stamp duty and registration is not a matter within the Competition Act and does not give rise to competition law considerations. - HELD THAT: - The Commission noted the Informant's plea that the arrangement was structured to evade stamp duty and registration. It held that such an allegation pertains to statutory compliance under other laws and does not fall within the four corners of the Competition Act. Accordingly, the conduct complained of in that regard was not treated as a competition law contravention and does not support initiation of an investigation under the Act. [Paras 22]

Allegation of camouflaged lease to evade stamp duty is not a competition issue; not a basis for investigation.

No prima-facie case for investigation - The interim reliefs claimed under Section 33 do not arise once the Information is closed for lack of a prima-facie case. - HELD THAT: - Having determined that the Information does not disclose a prima-facie contravention of the Competition Act and that the grievances are essentially contractual/inter se in nature, the Commission found that there was no occasion to grant the interim reliefs sought under Section 33. The closure of the Information under Section 26(2) renders the claimed interim directions unnecessary. [Paras 24]

No case for interim relief under Section 33; reliefs not granted.

Final Conclusion: The Commission found no prima-facie contravention of the Competition Act in the facts as presented, held that the stamp duty/registration complaint falls outside competition law and that the matters alleged are essentially contractual disputes; the Information is closed under Section 26(2) and no interim relief is directed.

Abuse of dominance - anti-competitive agreement - exclusive dealing - no prima facie case - individual/contractual disputes not falling within competition law - closure of matter under Section 26(2) of the Competition Act, 2002

Abuse of dominance - anti-competitive agreement - exclusive dealing - individual/contractual disputes not falling within competition law - no prima facie case - Whether the allegations against the opposite parties disclose a prima facie contravention of the Competition Act, 2002 (Sections 3 and 4) or are individual/contractual disputes outside the ambit of the Act. - HELD THAT: - The Commission examined the information and materials on record and noted that the alleged conducts-imposition of a postpaid loan facility, recovery calls, delay in disconnection and billing, and failure to stop payments-are disparate and appear to be individual contractual/service grievances. The Informant did not furnish material indicating a broader competition concern or a contravention of the provisions of the Act. In view of this, the Commission concluded that the disputes concern alleged mis representation, mis selling or deficiency of service which are amenable to redressal before appropriate fora under relevant laws, and do not, on the material placed, establish anti competitive agreement or abuse of dominance for the purposes of Sections 3 or 4. Consequently, no prima facie case under the Act is made out against any of the opposite parties and the matter is to be closed under the statutory provision permitting such closure. [Paras 12, 13, 14]

The Commission found no prima facie contravention of the Act and closed the matter forthwith under Section 26(2) of the Competition Act, 2002.

Final Conclusion: The Commission concluded that the grievances are individual/contractual in nature and do not disclose competition law violations; no prima facie case under Sections 3 or 4 is made out and the matter is closed under Section 26(2) of the Competition Act, 2002.

Abuse of dominant position - appreciable adverse effect on competition - resale price maintenance - prima facie case - inter se dispute - closure of inquiry under Section 26(2) of the Competition Act, 2002

Abuse of dominant position - appreciable adverse effect on competition - inter se dispute - prima facie case - Allegations of abuse of dominant position and AAEC arising from waiting periods, pick-and-choose delivery and accessory pricing - HELD THAT: - The Commission examined the Informant's complaints about change in delivery timelines, alleged arbitrary prioritisation of customers and alleged imposition of higher prices for accessories. It found that these complaints bore the character of an inter se dispute between the parties and did not, on the material before it, demonstrate market-wide anti-competitive effects. Long waiting periods were held to be explicable by factors such as supply constraints (for example, semiconductor shortages) and therefore not ordinarily a matter for antitrust intervention absent material showing of unfair or discriminatory pricing or market-wide harm. The Informant did not adduce evidence to establish that the pricing complained of had the requisite unfairness or discriminatory quality under the Act. On these bases the Commission concluded that no prima facie case of abuse of dominance or AAEC was made out against the Opposite Parties. [Paras 18, 20]

No prima facie case of abuse of dominant position or AAEC; matter closed under Section 26(2) of the Act on this ground.

Resale price maintenance - appreciable adverse effect on competition - prima facie case - Allegation of resale price maintenance (Section 3(4)) by OPs - HELD THAT: - The Commission noted that to establish an offence under the resale price maintenance prohibition there must be an agreement amongst enterprises or persons at different levels of the production or distribution chain which causes or is likely to cause AAEC in India. The Informant, however, did not produce any evidence showing existence of such an agreement between enterprises or actors in the supply chain. In absence of material demonstrating the required agreement or likely AAEC, the RPM allegation could not be prima facie sustained. [Paras 19, 20]

RPM allegation not substantiated; no prima facie case made out under Section 3(4).

Prima facie case - closure of inquiry under Section 26(2) of the Competition Act, 2002 - Invocation of investigatory and interim remedies sought by the Informant - HELD THAT: - The Informant sought a direction for investigation by the Director General and interim relief under Section 33 for production of booking and delivery data. Having found no prima facie material to suggest contravention of Sections 3 or 4, the Commission held there was no basis to order an investigation or to grant interim relief. Consequently, the request for investigatory and interim measures was rejected and the information was ordered to be closed. [Paras 20]

No case for investigation or interim relief; the matter is closed under Section 26(2).

Final Conclusion: The Commission found no prima facie case of contravention of Sections 3 or 4 of the Competition Act on the material before it, held that the complaints amounted to an inter se dispute without market-wide anti-competitive ramifications and that the RPM allegation was unsubstantiated; accordingly the Commission closed the matter under Section 26(2) and declined to direct investigation or grant interim relief.

Abuse of dominance - Relevant market: app store for Android smart mobile OS in India - Dominance of Google in the Android app store market - Preferential treatment / discriminatory conduct - Access to Android APIs - Unauthorised disclosure of non-public contacts - Section 4(2)(b) of the Competition Act, 2002 - Section 26(2) closure of information - Interim relief under Section 33

Relevant market: app store for Android smart mobile OS in India - Dominance of Google in the Android app store market - Prima facie delineation of the relevant market and assessment of Google's dominance - HELD THAT: - The Commission, relying on its prior examination in earlier Google matters, is of the prima facie view that the relevant market for the present Information is the market for app stores for Android smart mobile OS in India and that Google is dominant in that market. No material on record warranted departing from the approach adopted in the cited earlier orders, and therefore the same market-definition and prima facie finding of dominance were applied for the present matter. [Paras 13]

For the purposes of prima facie assessment, the relevant market is the Android app store market in India and Google is prima facie dominant therein.

Preferential treatment / discriminatory conduct - Unauthorised disclosure of non-public contacts - Access to Android APIs - Whether the Informant prima facie established that Google accorded preferential access to Truecaller or engaged in discriminatory practices by allowing Truecaller to publish non public contacts or by granting exclusive API access - HELD THAT: - The Commission examined the Informant's allegations and rival submissions. The Informant relied in part on a version of Truecaller not available on the Play Store and did not substantiate that the Play Store app violated Google policies. Google demonstrated that Android APIs are open source and available to all developers and that Play Store policies apply uniformly. The presence of other caller ID and spam protection apps on the Play Store performing similar functions undermines the claim of exclusive allowance to Truecaller. The Informant's experiment indicated that users voluntarily provided contact data to Truecaller, and no material was produced to show privileged API access or that Google permitted unauthorised publishing by Truecaller in contravention of its Play Store policies. In the absence of evidence, the allegation of preferential treatment or discriminatory denial of access to competing apps was unsubstantiated. [Paras 14, 15, 19, 20]

The Informant failed to prima facie establish that Google accorded preferential access to Truecaller, engaged in discriminatory conduct, or permitted unauthorised disclosure of non-public contacts by granting exclusive API access.

Commercial relationship and exclusivity - Preferential treatment / discriminatory conduct - Whether commercial arrangements between Google and Truecaller amount to evidence of preferential treatment or exclusivity - HELD THAT: - Google stated that its commercial arrangements with Truecaller for cloud and ad services contain no exclusivity or contingencies concerning sharing of non public contacts. The Commission noted that, absent evidence to the contrary, a mere commercial relationship does not ipso facto establish favourable or preferential treatment outside the scope of those arrangements. [Paras 16]

No prima facie case that commercial relationships between Google and Truecaller amount to preferential treatment or exclusivity was established.

Policy changes and historical access - Preferential treatment / discriminatory conduct - Whether any past policy change regarding harvesting of data conferred a competitive advantage on Truecaller - HELD THAT: - The Informant alleged that a policy change enabled Truecaller to harvest data before a ban. Google explained the May 2021 policy change introduced enhanced disclosure requirements but did not constitute a ban on authorized collection of user phone book data. The Informant did not place material showing that the policy change conferred a competitive advantage on Truecaller over rivals. [Paras 17]

No prima facie finding that the policy change granted Truecaller a competitive advantage was established.

Section 26(2) closure of information - Interim relief under Section 33 - Whether a prima facie case under Section 4 was made out and whether interim relief should be granted - HELD THAT: - Having considered the Information, the Informant's rejoinder, Google's responses and the material on record, the Commission concluded that the Informant did not prima facie establish contravention of Section 4. In view of the closure of the Information under Section 26(2), there was no basis for grant of interim relief under Section 33. The Commission therefore ordered closure of the Information and rejected the request for interim suspension of Truecaller's Play Store operations. [Paras 21]

The Information is closed under Section 26(2) for want of a prima facie case under Section 4; the request for interim relief under Section 33 is rejected.

Final Conclusion: The Commission, after considering the pleadings and materials, proceeded on the prima facie view that the relevant market is the Android app store market in India and that Google is dominant, but found the Informant's allegations of preferential treatment, exclusive API access, unauthorised disclosure, and competitive advantage to be unsubstantiated on the record; accordingly the Information is closed under Section 26(2) and the application for interim relief under Section 33 is rejected.

Cartelisation under Section 3 of the Competition Act, 2002 - abuse of dominant position under Section 4 of the Competition Act, 2002 - joint or collective dominance - prima facie case - closure under Section 26(2) of the Competition Act, 2002 - interim relief under Section 33 of the Competition Act, 2002

Abuse of dominant position under Section 4 of the Competition Act, 2002 - joint or collective dominance - Allegation of abuse of dominant position by the Opposite Parties as a collective entity is unsustainable because the Act does not provide for inquiry into joint/collective dominance. - HELD THAT: - The Commission observed that the Informant attacked the collective conduct of five Opposite Parties on the premise that they would together acquire and abuse a dominant position. The Commission noted the settled position that the Act does not contemplate an inquiry into joint or collective dominance, and therefore the material did not make out a case under the law relating to abuse of dominance. Having regard to that legal principle and the material on record, the Commission concluded that no contravention under the provisions concerning abuse of dominance is made out against the Opposite Parties collectively. [Paras 12]

No case of contravention under the provisions relating to abuse of dominant position is made out; allegations of joint/collective dominance rejected.

Cartelisation under Section 3 of the Competition Act, 2002 - prima facie case - interim relief under Section 33 of the Competition Act, 2002 - Allegation of cartelisation by dissemination of false price information does not disclose a prima facie case under the provisions prohibiting anti-competitive agreements. - HELD THAT: - The Commission examined the evidence relied upon by the Informant, including the FIR and newspaper articles, and found that the material did not prima facie establish cartelisation by the Opposite Parties. The Commission recorded that the market comprises multiple buyers and sellers and that prices are determined through day-to-day negotiation, and therefore the mere dissemination of alleged rumours or rate-cards did not demonstrate an agreement or concerted practice amounting to cartelisation. On that basis the Commission held there was no prima facie case to proceed under the provisions proscribing anti-competitive agreements, and consequently no basis for the interim remedy sought under the statute. [Paras 13]

No prima facie case of cartelisation under the provisions prohibiting anti-competitive agreements; interim relief sought under Section 33 rejected.

Closure under Section 26(2) of the Competition Act, 2002 - Disposition of the Information by closure under the statutory provision for lack of a prima facie case. - HELD THAT: - Having concluded that neither an abuse of dominance (collectively) nor cartelisation was prima facie made out on the material, the Commission exercised its power to close the Information under the statutory provision for termination of proceedings where no case exists. The Commission therefore directed closure of the Information and rejected the prayer for interim relief. [Paras 14]

Information closed under the statutory provision for lack of a prima facie case; prayer for interim relief rejected.

Final Conclusion: The Commission found no prima facie infringement of the provisions relating to anti-competitive agreements or abuse of dominance on the material before it, declined to grant interim relief, and closed the Information under the relevant statutory provision.

Prima facie case - closure under Section 26(2) of the Competition Act, 2002 - competition issue - allegation of collusion - relief under Section 33 of the Act

Competition issue - allegation of collusion - prima facie case - The Information does not disclose a competition issue and no prima facie case under the Competition Act is made out against the opposite parties. - HELD THAT: - The Informant's grievance arises from alleged fraudulent transfer and mortgage of his property, recovery proceedings by a bank and attendant civil/ SARFAESI proceedings; he has not invoked any specific provision of the Competition Act nor made the third party alleged to have colluded a party to these proceedings. The matter concerns private disputes over property, repayment of loans and related remedies pursued (or capable of being pursued) before civil courts, the Debt Recovery Tribunal and under SARFAESI, which do not prima facie engage the statutory concerns of competition law. In view of these facts and the absence of material demonstrating an anticompetitive arrangement or conduct within the scope of the Act, the Commission finds that the Information does not disclose contravention of the Act and no further inquiry is warranted. [Paras 18, 19, 20]

Information closed under Section 26(2) of the Competition Act, 2002 for want of a prima facie case; request for relief under Section 33 rejected.

Final Conclusion: The Commission found that the allegations relate to private disputes over property and bank recovery proceedings and do not constitute a competition law contravention; the Information is closed under Section 26(2) and the prayer for relief under Section 33 is rejected.

Alleged abuse of dominant position under Section 4 of the Competition Act, 2002 - Relevant market delineation: Content Management Software (CMS) and WordPress-specific Plugin Directories in India - Assessment of dominance in the relevant markets - Denial of market access and discriminatory application of platform guidelines - Self-preferencing and deletion of user reviews - Interim reliefs under Section 33 of the Competition Act, 2002 - Confidentiality of filings under Section 57 read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009

Relevant market delineation: Content Management Software (CMS) and WordPress-specific Plugin Directories in India - The relevant product and geographic markets for adjudicating the alleged abuse were delineated as the market for provision of Content Management Software (CMS) in India and the WordPress-Specific Plugin Directories Market in India. - HELD THAT: - The Commission identified the primary product market as provision of Content Management Software (CMS), noting that alternatives such as traditional web development agencies or in-house teams are not interchangeable with the CMS market for purposes of the Informant's grievance (para 13). The Commission further identified a separate relevant market for plugin listing services-termed the WordPress-Specific Plugin Directories Market-because plugins are generally tailored to specific CMS architectures and are not readily interoperable across platforms; centralized directories also provide distinct features (categorization, search, reviews) not available when downloading directly from developers (paras 15-16). India was held to be the relevant geographic market for both delineations (paras 13, 16). [Paras 13, 15, 16]

The markets for adjudication were defined as the CMS market in India and the WordPress-specific plugin directories market in India.

Assessment of dominance in the relevant markets - Whether the Opposite Party (WordPress.org) is dominant in the identified relevant markets. - HELD THAT: - On the CMS market, the Commission observed that multiple competing platforms exist (Wix, Squarespace, Shopify, Joomla, Drupal) but recorded that WordPress holds the largest market share (62.5%) and may be inferred to be dominant (para 14). With respect to the WordPress-specific plugin directories market, the Commission noted that WordPress Plugin Directory hosts a substantially larger number of plugins (around 60,000) compared to other directories, indicating WordPress is a dominant player in that market as well (para 17). [Paras 14, 17]

WordPress.org was held to be dominant in the CMS market in India and dominant in the WordPress-specific plugin directories market in India.

Denial of market access and discriminatory application of platform guidelines - Self-preferencing and deletion of user reviews - Alleged abuse of dominant position under Section 4 of the Competition Act, 2002 - Interim reliefs under Section 33 of the Competition Act, 2002 - Whether the delisting/banning of the Informant's plugins and related conduct by WordPress.org constituted a prima facie abuse of dominance under Section 4, including denial of market access, discriminatory treatment, or self-preferencing; and whether interim relief was warranted. - HELD THAT: - The Commission examined WordPress.org's Detailed Plugin Guidelines and related disciplinary process, noting that violations (including repeated misconduct by the Informant despite warnings) justified removal of plugins and banning of the developer; these facts, as presented by the OP and not contested by the Informant, indicate enforcement of platform standards rather than discriminatory treatment (para 18-19). The Commission observed that the guidelines do not appear unfair or unreasonable, have been applied to multiple developers (about 35) for repeated violations, and were not applied in a discriminatory manner (para 19). Allegations that the OP's Jetpack plugin caused deletion of 5star reviews or that delisting was undertaken to benefit Jetpack were rejected because Jetpack and the Informant's plugin serve materially different functions and no legitimate basis for a finding of selfpreferencing was established (para 20). In light of these findings, the Commission concluded that no prima facie case of contravention of Section 4 was made out and therefore there was no basis to grant interim relief under Section 33 (para 21). [Paras 18, 19, 20, 21]

No prima facie case of abuse of dominant position was established; the Information is closed under Section 26(2) and the request for interim relief under Section 33 is rejected.

Confidentiality of filings under Section 57 read with Regulation 35 of the Competition Commission of India (General) Regulations, 2009 - Whether certain documents filed by the Opposite Party should be granted confidential treatment and the duration of such confidentiality. - HELD THAT: - The Opposite Party filed parts of its submissions in confidential and non-confidential versions and applied for confidentiality under Section 57 read with Regulation 35. Having considered the grounds for confidentiality, the Commission granted confidentiality to the specified documents/data/information in terms of Regulation 35, subject to Section 57 of the Act, for a period of three years from the date of this order, while clarifying that material used in the order is not thereby rendered confidential (para 22). [Paras 22]

Confidential treatment granted to specified filings for three years, subject to Section 57; materials used in the order are not deemed confidential.

Final Conclusion: The Commission delineated the CMS market and the WordPress-specific plugin directories market in India, held WordPress.org to be dominant in both markets, found no prima facie abuse of dominance by WordPress.org (delisting and related conduct were attributable to guideline violations and not discriminatory self-preferencing), closed the Information under Section 26(2) of the Act, rejected the request for interim relief under Section 33, and granted limited confidentiality to certain OP filings for three years subject to statutory conditions.

Contravention of Section 3(4) read with Section 3(1) of the Competition Act, 2002 - existence of an agreement between vertically related players - appreciable adverse effect on competition - anti-competitive conduct - commercial considerations governing purchase and sale

Contravention of Section 3(4) read with Section 3(1) of the Competition Act, 2002 - existence of an agreement between vertically related players - appreciable adverse effect on competition - anti-competitive conduct - commercial considerations governing purchase and sale - Whether the Information discloses an agreement or anti-competitive conduct attracting liability under Section 3(4) read with Section 3(1) of the Act - HELD THAT: - The Commission examined the material filed by the Informant, including emails sent to various entities, and found that the communications were solicitations for business and did not disclose any agreement or arrangement of the kind envisaged by Section 3(4). Section 3(4) requires the existence of an agreement between vertically related players that has caused or is likely to cause an appreciable adverse effect on competition. In the absence of any material demonstrating such an agreement or other discernible anti-competitive conduct, the Commission observed that decisions by market players to purchase or sell a product are driven by commercial considerations. The Commission therefore concluded that intervention is not warranted where anti-competitive behaviour is not discernible from the material on record, and no contravention of Section 3(4) read with Section 3(1) has been shown. [Paras 8, 9, 10]

No agreement or anti-competitive conduct established; matter closed under Section 26(2) of the Act and no relief under Section 33 arises.

Final Conclusion: The Commission closed the Information under Section 26(2) of the Competition Act, 2002, holding that the material does not demonstrate an agreement between vertically related parties or other anti-competitive conduct attracting liability under Section 3(4) read with Section 3(1); consequential reliefs sought were not granted.

Abuse of dominant position - anti-competitive agreement - impartiality and non-discrimination in accreditation - accreditation condition as a non abusive eligibility requirement - closure of information under Section 26(2) on prima facie view

Abuse of dominant position - accreditation condition as a non abusive eligibility requirement - impartiality and non-discrimination in accreditation - Whether the circular issued by NABL directing sole proprietor CABs to change their legal form is abusive of a dominant position under the Act - HELD THAT: - The Commission examined the impugned circular in light of the ISO/IEC 17025:2017 requirements and its earlier findings in Prem Prakash (Case No. 12 of 2023). It observed that the circular prescribes the corporate form that a CAB must adopt if it wishes to obtain accreditation and that ISO 17025:2017 (as adopted by BIS) contains requirements regarding the structure of a CAB. The Commission noted that accreditation involves an underlying trust element and that NABL's guidance linking enterprise form to operational reliability and liability separation (e.g., OPC, LLP, company, society/trust) is aimed at reinforcing confidence and compliance. The Commission further recorded that the fact the circular may impose additional expenses or formalities on CABs does not, by itself, make the requirement abusive. Having considered the prior reasoning upholding the circular and the material on record, the Commission found no reason to re examine the circular from a competition perspective and concluded that, prima facie, there was no case of abusive dominance made out against NABL. [Paras 14, 15, 17]

No prima facie case of abuse of dominant position; matter closed under Section 26(2).

Anti-competitive agreement - Whether there exists an anti competitive agreement attributable to NABL in respect of the impugned directions - HELD THAT: - The Informant did not point to any particular agreement or produce documents suggesting the existence of an anti competitive agreement. In the absence of any material indicating concerted action or an agreement restricting competition, the Commission found no basis to proceed under the prohibition on anti competitive agreements. [Paras 16, 17]

No prima facie case of an anti competitive agreement; information closed under Section 26(2).

Final Conclusion: The Information filed by AOIL is closed under Section 26(2) of the Act as no prima facie case is made out against NABL under either the prohibition on anti competitive agreements or the prohibition on abuse of dominance; no interim relief is warranted.

Abuse of dominant position - relevant market delineation - relevant geographic market - tie-in arrangement - section 3(4) applicability - enterprise - prima facie closure under Section 26(2)

Enterprise - Opposite Parties fall within the definition of 'enterprise'. - HELD THAT: - The Commission held that Opposite Parties, being engaged in commercial activities such as development, sale and provision of services for the project, squarely fall within the ambit of 'enterprise' under the Act. This determination is a preliminary threshold for any analysis under Section 4 and related provisions. [Paras 15]

Opposite Parties are enterprises for the purposes of the Act.

Relevant market delineation - relevant geographic market - The relevant market is the market for provision of services for development and sale of apartments to cater to senior citizens in the Bangalore Metropolitan Region. - HELD THAT: - The Commission observed that apartments designed for senior citizens possess distinct characteristics (medical emergency facility, food/community kitchen, geriatric gym, nurse/paramedic availability, 24*7 housekeeping, senior-friendly infrastructure etc.) that make them generally non-substitutable with regular apartments, supporting treatment as a separate relevant product. Considering the project's location and distinct conditions of competition, the appropriate geographic market is the Bangalore Metropolitan Region. On this basis, the Commission formed a prima facie view on the relevant market for adjudication. [Paras 16, 17, 18]

Relevant product market and geographic market as stated were delineated for the matter.

Abuse of dominant position - OP-3 does not hold a dominant position in the delineated relevant market and therefore further examination of alleged abuse by OP-3 is not required. - HELD THAT: - Having identified the relevant market as development and sale of apartments for senior citizens in Bangalore Metropolitan Region, the Commission noted the presence of multiple other developers offering similar services in that region. These competitors (identified from public domain) impose competitive constraints on OP-3. Consequently, OP-3 lacks the requisite strength to operate independently of competitive forces, and there is no need to proceed to examine alleged abusive conduct by OP-3 under Section 4. [Paras 19]

No prima facie dominance of OP-3; no further inquiry into OP-3's alleged abuse of dominance.

Tie-in arrangement - section 3(4) applicability - The alleged tie-in arrangement is not covered by Section 3(4) because the impugned agreement is between an enterprise and an end consumer. - HELD THAT: - For Section 3(4) to apply, the parties must operate at different levels of the production chain in different markets. The impugned agreement, however, is between the developer (enterprise) and the allottee (end consumer). The Commission applied the established ratio that agreements between enterprises and end consumers do not fall within Section 3(4)'s ambit, following earlier precedent. Accordingly, the factual claim of a tie-in between the developer and the service provider, insofar as it rests on the sale/service agreement with the allottee, does not constitute a contravention under Section 3(4). [Paras 20]

Section 3(4) is not attracted to the impugned agreement; no prima facie case under Section 3(4).

Prima facie closure under Section 26(2) - There is no prima facie case; the Information is closed under Section 26(2) and interim relief sought is rejected. - HELD THAT: - Weighing the determinations-Opposite Parties being enterprises, the delineated relevant market, absence of dominance of OP-3, and the inapplicability of Section 3(4) to an agreement with an end consumer-the Commission concluded that the Information does not disclose a prima facie contravention warranting further investigation. Consequently, the request for interim relief (formation of a residents' committee and related measures) is unnecessary and rejected. [Paras 21]

Information closed forthwith under Section 26(2); no reliefs or interim measures granted.

Final Conclusion: The Commission found Opposite Parties to be enterprises, delineated the relevant market as development and sale of apartments for senior citizens in the Bangalore Metropolitan Region, concluded OP-3 is not dominant, held Section 3(4) inapplicable to the agreement with an end consumer, and accordingly found no prima facie case; the Information is closed under Section 26(2) and the sought interim relief is rejected.

Disciplinary proceedings - competition concern under the Competition Act, 2002 - no prima facie case for investigation - closure under Section 26(2) of the Act - no interim relief under Section 33 of the Act

Disciplinary proceedings - competition concern under the Competition Act, 2002 - no prima facie case for investigation - Disciplinary suspension by a sports association does not, on the material before the Commission, constitute a competition law concern warranting investigation. - HELD THAT: - The Commission found that the core grievance arose from disciplinary action taken by the district and state chess associations against the informant for organising an allegedly unauthorized inter-taluk match. The matter was prima facie of the character of internal disciplinary proceedings under the associations' regulations. Having considered the Information and the correspondence relied upon by the informant, the Commission concluded that the facts as presented do not raise issues cognisable under the Competition Act, 2002 and therefore do not justify initiating an investigation under the Act. The Commission treated the allegations as lacking the requisite nexus to competition law and did not find material prima facie evidence of contravention of the Act. [Paras 15]

No case of contravention warranting investigation was made out; the disciplinary matter does not amount to a competition concern.

Closure under Section 26(2) of the Act - no interim relief under Section 33 of the Act - Appropriate procedural disposition of the Information before the Commission. - HELD THAT: - In light of the conclusion that no competition law contravention was prima facie established, the Commission exercised its power under Section 26(2) to close the matter forthwith. Consequentially, the Commission held that there was no basis for granting any interim relief under Section 33, since no investigation would be directed to proceed. [Paras 16]

Information closed under Section 26(2); no interim relief granted under Section 33.

Final Conclusion: The Commission concluded that the informant's complaint relates to internal disciplinary action by chess associations and does not raise a competition law issue; the matter is closed under Section 26(2) of the Competition Act, 2002 and no interim relief under Section 33 is warranted.

Condonation of delay - Entertainability of appeal pending proceedings before a tribunal - Substantial question of law - Dismissal of appeal for lack of a substantial question of law

Entertainability of appeal pending proceedings before a tribunal - Substantial question of law - Dismissal of appeal for lack of a substantial question of law - Whether the appeal should be entertained notwithstanding that proceedings on the same subject-matter are pending before the NCLAT and in the absence of a substantial question of law. - HELD THAT: - The Court noted that the NCLAT proceedings in relation to acceptance of additional documents and a rejoinder affidavit are pending. In the absence of any substantial question of law arising for determination at this stage, the Court declined to exercise its jurisdiction to entertain the appeal while the matter remains pending before the appellate tribunal. The limited reasoning records that, particularly because the proceedings are pending before the NCLAT and no substantial question of law has been demonstrated, interference by this Court is not warranted at this stage. Consequently, the appeal was dismissed without being admitted for further consideration. [Paras 3, 4]

Appeal dismissed as not entertainable while proceedings are pending before the NCLAT and no substantial question of law is shown.

Final Conclusion: Delay in refiling was condoned, but the appeal was dismissed because the matter remains pending before the NCLAT and no substantial question of law warranted this Court's intervention; pending applications disposed of.

Direction to conduct fact-finding inspection - power to refer inspection/enquiry to the Insolvency and Bankruptcy Board of India - appellate jurisdiction under Section 61 of the Insolvency and Bankruptcy Code - opportunity to file reply to show cause notice and supply of final inspection report - no interference by appellate forum where only an in house enquiry/fact finding exercise is pending

Direction to conduct fact-finding inspection - power to refer inspection/enquiry to the Insolvency and Bankruptcy Board of India - no interference by appellate forum where only an in house enquiry/fact finding exercise is pending - Validity of the Adjudicating Authority's direction to refer the liquidator's conduct to the IBBI for inspection/enquiry and the maintainability of the appeal against that direction. - HELD THAT: - The NCLT's observations in paragraph 30 recorded perceived anomalies in the conduct of two e auctions, including apparent reduction in bid value, absence of fresh notice, non involvement of the financial creditor and allowance of participation by a bidder whose EMD had been forfeited. In view of those findings the Adjudicating Authority was competent to direct the matter to the IBBI for a fact finding inspection/enquiry into the liquidator's conduct. An appellate challenge under Section 61 of the Code is not appropriate at this stage to preempt an in house enquiry by the registering body; where only an enquiry or investigation is directed and no final adverse decision has been taken against the liquidator, there is no sufficient cause of action for invoking appellate jurisdiction. Further, the Hon'ble High Court of Delhi remanded related writ petitions to the Board with directions to supply the Final Inspection Report and permit filing of a reply to the show cause notice before the Board decides the matter, leaving the substantive issue open to the IBBI. Given that the inspection/enquiry is pending and procedural safeguards (supply of report and opportunity to reply) have been ordered, the appellate court declined to interfere with the direction for inspection/enquiry.

Appeal dismissed; direction to IBBI for inspection/enquiry upheld and appellate interference declined while the in house process remains pending.

Final Conclusion: The appeal challenging the Adjudicating Authority's direction to the IBBI to inspect/enquire into the liquidator's conduct is dismissed as premature and not amenable to interference under Section 61 while a fact finding enquiry remains pending; the High Court's remand to the Board to supply the Final Inspection Report and permit a reply reinforces that the matter is to be decided by the IBBI before any appellate intervention.

Conduct the ongoing Corporate Insolvency Resolution Process - compliance with the directions in State Tax Officer v. Rainbow Papers Ltd. - role and decision-making power of the Committee of Creditors in CIRP - power of the Resolution Professional to place agenda before the CoC

Conduct the ongoing Corporate Insolvency Resolution Process - power of the Resolution Professional to place agenda before the CoC - role and decision-making power of the Committee of Creditors in CIRP - compliance with the directions in State Tax Officer v. Rainbow Papers Ltd. - Impugned order allowing the Resolution Professional to 'conduct the ongoing Corporate Insolvency Resolution Process' and the scope of actions to be taken in light of the Supreme Court's directions in Civil Appeal Nos.7514-7515/2022. - HELD THAT: - The Tribunal noted that the Supreme Court's order of 22.01.2024 referred to and required compliance with the directions in State Tax Officer v. Rainbow Papers Ltd., and granted 90 days to the substituted Resolution Professional to complete the process. The Adjudicating Authority allowed the RP's application including prayer (c) directing the RP to 'conduct the ongoing CIRP' but did not specify the precise steps to be taken. The Tribunal held that, in view of the Supreme Court's directions and settled law that the plan must be presented to and finally approved by the CoC, the appropriate course is to permit the RP to place an agenda before the CoC seeking directions on the necessary steps to be taken in the CIRP. The Tribunal emphasised that the CoC is in overall control of the CIRP and is the authority to take decisions on further steps, including presentation, modification or reconsideration of resolution plans in compliance with the Supreme Court's judgment. Consequently, the appeal was disposed of by granting liberty to the RP to place the appropriate agenda before the CoC so that the CoC may take and implement decisions to complete the CIRP within the framework of the Supreme Court's directions. [Paras 12, 13, 16, 17]

Appeal disposed of by permitting the Resolution Professional to place an agenda before the Committee of Creditors for taking decisions necessary to comply with the Supreme Court's directions and to complete the CIRP.

Final Conclusion: The appeal is disposed of by granting liberty to the Resolution Professional to place appropriate agenda before the Committee of Creditors, leaving it to the CoC to decide and complete the CIRP in conformity with the Supreme Court's directions in Civil Appeal Nos.7514-7515/2022.

Regular bail under the Code of Criminal Procedure, 1973 - bail in PMLA cases and the twin conditions under Section 45 of the PMLA - statements recorded under Section 50 of the PMLA as material in investigation - beneficiary of proceeds of crime - seriousness of economic offence and denial of bail - parity with co-accused and relevance of higher court precedent

Regular bail under the Code of Criminal Procedure, 1973 - bail in PMLA cases and the twin conditions under Section 45 of the PMLA - statements recorded under Section 50 of the PMLA as material in investigation - beneficiary of proceeds of crime - seriousness of economic offence and denial of bail - Application for regular bail under Cr.P.C. dismissed - HELD THAT: - The Court examined the material placed on record, including the forensic audit, accounting data and statements recorded under Section 50 of the PMLA, and concluded there is prima facie material indicating inflated stocks, diversion of loan funds and that the petitioner was knowingly involved and a beneficiary of proceeds of crime. The court noted the forensic-audit-linked data reflecting relationship between stock, turnover and borrowings and the declaration of large stock as obsolete/damaged as indicative of mala fide intention. Having regard to the nature of the offence, the documentary and testimonial material relied upon by the Enforcement Directorate and the fact that the co-accused's bail had been rejected by the Apex Court, the court found that the mandatory twin conditions in Section 45 PMLA were not satisfied and that there were reasonable grounds for believing that the petitioner is guilty. The Court observed that delay in trial or period of incarceration alone could not outweigh the statutory twin conditions and the seriousness of the economic offence alleged. [Paras 12, 13]

Bail application dismissed; petitioner not entitled to bail.

Final Conclusion: The bail petition under Section 439 Cr.P.C. is dismissed; pending applications, if any, are disposed of. Nothing stated is an expression of opinion on the merits of the case.

Valuation of services - inclusion of free accommodation in taxable value - reverse charge mechanism - consideration received by the service provider for assessment of service tax under Section 67 - reimbursable expenses not includible in assessable value - penalty and interest not maintainable where demand is unsustainable

Inclusion of free accommodation in taxable value - valuation of services - reverse charge mechanism - Intrinsic value of rent for accommodation provided by the appellant to CISF personnel is not includible in the gross value of security service for levy of service tax on reverse charge basis. - HELD THAT: - The Tribunal held that the question of including the notional value of rent-free accommodation in the taxable value of security services is no longer res integra and is resolved by earlier Tribunal and higher court decisions relied upon in the order. Applying the principle that only consideration which flows to or is received by the service provider is taxable under Section 67, the Tribunal followed precedents which held that reimbursable or notional items such as free accommodation, telephone, vehicles and similar facilities provided by the service recipient to CISF personnel are not includible in the assessable value. The Tribunal noted factual distinctions relied upon by Revenue in other decisions (such as absence of reimbursement on actual basis or lack of prearrangement) are not present here, and there is an MOU and reimbursement on actual basis, therefore the demand for inclusion of intrinsic rent value is unsustainable.

Demand for adding intrinsic value of accommodation to the gross value of security service is set aside and the appeal in respect of valuation is allowed.

Reimbursable expenses not includible in assessable value - consideration received by the service provider for assessment of service tax under Section 67 - Expenses reimbursed to or facilities provided in favour of CISF personnel (such as accommodation, vehicles, telephone, medical) are not includible in the assessable value for service tax where they do not constitute consideration received by the service provider. - HELD THAT: - Relying on Tribunal and High Court/Supreme Court authorities reproduced in the order, the Tribunal reiterated the legal proposition that Rule-based valuation which would include reimbursable or notional items cannot override Section 67's requirement that taxable consideration must be received by the service provider. The earlier decisions specifically held that expenses incurred or facilities provided by the service recipient for CISF personnel do not form part of the taxable value when they do not amount to consideration received by the service provider.

Such reimbursable expenses and notional benefits are not includible in the assessable value; the departmental demand on this basis is unsustainable.

Penalty and interest not maintainable where demand is unsustainable - Penalty under Section 76 and interest on the differential service tax demand are not maintainable once the substantive demand itself is held unsustainable. - HELD THAT: - The Tribunal observed that since the substantive demand for additional service tax on account of notional accommodation and similar items is not supportable in law, consequential imposition of penalty under Section 76 and interest on the differential amount cannot be sustained. The order, following the reasoning of earlier decisions, therefore rejects the revenue's claim for penalty and interest tied to the impugned demand.

Demand for penalty and interest consequential to the disallowed addition is set aside.

Final Conclusion: The impugned order is set aside; the appeals are allowed insofar as the demand for including intrinsic value of accommodation and similar notional/reimbursable items in the taxable value is concerned, and consequent penalty and interest are not sustainable.

Export of Services - Business Auxiliary Services / Business Support Services - Rule 3(1)(iii) of the Export of Services Rules, 2005 (export where recipient located outside India) - benefit accruing outside India - payment in convertible foreign exchange - threshold exemption for Service Tax (turnover-based exemption) - time-bar / extended period for recovery (suppression requirement)

Export of Services - Rule 3(1)(iii) of the Export of Services Rules, 2005 (export where recipient located outside India) - payment in convertible foreign exchange - benefit accruing outside India - Whether foreign-currency commission earned by the appellant for services rendered to a foreign principal qualifies as export of services and is not liable to Service Tax. - HELD THAT: - The Tribunal accepted that the services in question fall within the ambit of Business Auxiliary/Business Support Services and, therefore, within Category III under Rule 3(1)(iii) of the Export of Services Rules, 2005. For Category III services the relevant criterion is that the services be provided to a recipient located outside India and that the benefit of the service accrue outside India. The Board's Circular No.111/5/2009 clarifies that even when activities are performed in India, such services are exportable if the benefit accrues abroad and consideration is received in convertible foreign exchange. In the present case both facts-service provided to an overseas entity and receipt of consideration in foreign currency-are not disputed. Applying the statutory test and the Board's clarification, the confirmed demand in respect of the foreign-currency commission (Table A) was set aside as not exigible to Service Tax. [Paras 12]

Confirmed demand relating to foreign-currency commission (Table A) set aside as export of services and not chargeable to Service Tax.

Threshold exemption for Service Tax (turnover-based exemption) - Erection, Commissioning and Installation services - Whether the appellant was liable to pay Service Tax on Erection, Commissioning and Installation services for the audit period given the turnover threshold, and whether amounts paid satisfied any liability. - HELD THAT: - The Tribunal examined the turnovers shown in Table B and found that for the years 2008-09, 2010-11 and 2011-12 the appellant's turnover in respect of the relevant services was below the notified threshold (Rs.10,00,000), rendering no Service Tax payable for those years. For 2012-13 the turnover exceeded the threshold, attracting Service Tax only on the excess. Records show the appellant had already discharged Service Tax and interest by payment made on 26.08.2013, which exceeded the Service Tax liability when allowance is made for the threshold exemption. On that basis the Tribunal held that the appellant's tax liability, where it existed, had been met and set aside the confirmed demand in respect of these services (Table B). [Paras 13]

Confirmed demand in respect of Erection, Commissioning and Installation services (Table B) set aside on merits as either below threshold or already discharged by payment.

Time-bar / extended period for recovery (suppression requirement) - Whether the Department was entitled to invoke the extended period of limitation on the ground of suppression. - HELD THAT: - The Tribunal noted that the appellant declared foreign exchange earnings in its balance sheet, maintained Service Tax registration and filed ST-3 returns. The Department did not establish any specific case of suppression by the appellant. In absence of evidence of suppression, invocation of the extended period was not justified. Consequently, the confirmed demand for the extended period was set aside on the ground of time bar. [Paras 14]

Confirmed demand for the extended period set aside as time-barred due to absence of suppression.

Final Conclusion: The appeal is allowed: the Service Tax demands confirmed by the adjudicating authority (both the foreign-currency commission component and the erection/installation component) are set aside on merits and the extended-period demand is set aside as time-barred; the appellant is entitled to consequential relief as per law.

Treatment of gross amount as inclusive of service tax under Section 67(2) of the Finance Act, 1994 - cum-tax valuation of taxable services - threshold exemption under Notification No.33/2012 - adjournment limits under proviso to Section 35C(1) - recomputation of demand / remand for quantification

Adjournment limits under proviso to Section 35C(1) - Whether further adjournment should be granted to the appellant - HELD THAT: - The Bench recorded that the matter had been adjourned several times and that the appellant's stated reason-awaiting documents from the service recipient-was not a proper justification given the dispute relates to the period 2012-13 to 2015-16. The proviso to Section 35C(1) sets a limit on adjournments and the record showed previous adjournments on 17.09.2024, 04.10.2024 and 29.10.2024; no proper request was made on earlier dates and the appellant did not appear on two subsequent hearing dates. Considering the limited monetary amount in dispute, the Bench declined to grant another adjournment. [Paras 2]

Request for further adjournment refused and no further adjournment entertained.

Treatment of gross amount as inclusive of service tax under Section 67(2) of the Finance Act, 1994 - cum-tax valuation of taxable services - recomputation of demand / remand for quantification - Whether the gross amount received by the appellant should be treated as inclusive of service tax (cum-tax) for valuation under Section 67(2) - HELD THAT: - The Tribunal examined sub-sections (2) and (3) of Section 67 and held that the language-particularly the word 'payable'-gives rise to a presumption in favour of treating gross receipts as inclusive of service tax where tax has not been shown to have been separately collected. The impugned finding rejecting cum-tax treatment was found to be without merit: prior authorities and decisions were considered, and distinctions (such as agreements showing prices exclusive of tax) were noted where applicable. In the present case no agreement showing exclusivity of tax was relied upon by the Department and third party information formed the basis of demand. Consequently, the Tribunal directed that the taxable value be recomputed by treating amounts received as cum-tax price in terms of Section 67(2) and remitted the matter to the original authority for recomputation. [Paras 4]

Demand to be recomputed treating gross amounts as inclusive of service tax under Section 67(2); matter remitted to original authority for recomputation.

Threshold exemption under Notification No.33/2012 - Whether the appellant was entitled to threshold exemption of Rs.10 lakh for FY 2012-13 under Notification No.33/2012 - HELD THAT: - The Tribunal found no material on record to show that the appellant's aggregate value of taxable services in the preceding financial year (2011-12) was below the threshold required to claim the exemption. The Commissioner (Appeals) had recorded that no supporting evidence was produced and the Tribunal saw no reason to interfere with that finding. [Paras 4]

Finding denying threshold exemption under Notification No.33/2012 upheld.

Final Conclusion: Appeal partly allowed: adjournment request refused; appeal allowed to the extent that taxable value must be recomputed treating amounts received as cum-tax under Section 67(2) and remitted to the original authority for recomputation; denial of threshold exemption under Notification No.33/2012 upheld.

Limitation period as fixed by the Supreme Court in exceptional circumstances - absence of power to condone delay beyond the period so fixed - binding effect of Supreme Court decisions under Article 141 - power to condone delay under statutory proviso limited to prescribed period - non-admission of appeals where no substantial question of law and amount in dispute is below threshold

Limitation period as fixed by the Supreme Court in exceptional circumstances - absence of power to condone delay beyond the period so fixed - binding effect of Supreme Court decisions under Article 141 - Appeal filed before Commissioner (Appeals) beyond the ninety days period fixed from 01.03.2022 and therefore time barred; first appellate authority had no power to condone such delay. - HELD THAT: - The Tribunal accepted the earlier Supreme Court direction that appeals whose limitation expired during the pandemic period were to be filed within ninety days from 01.03.2022, and that this exceptional determination fixed an absolute outer limit without leaving any power with subordinate authorities to further condone delay. The Tribunal observed that the appeal in question was filed after the prescribed ninety days period and, applying the binding effect of the Supreme Court's order, held that the Commissioner (Appeals) therefore had no jurisdiction to admit or condone the belated appeal. Reliance was placed on the principle that subordinate fora must follow binding directions of the Supreme Court and on prior discussion of the limited scope of condonation powers where the statute or higher authority has fixed an absolute outer limit. [Paras 4]

Appeal is time barred and could not be condoned by the first appellate authority.

Non-admission of appeals where no substantial question of law and amount in dispute is below threshold - power to condone delay under statutory proviso limited to prescribed period - Since the disputed service tax demand confirmed is below the specified monetary threshold, the appeal need not be admitted as it does not raise a substantial question of law relating to rate of duty etc. - HELD THAT: - The Tribunal noted that the confirmed demand in the order in original falls below the monetary ceiling specified for admission of appeals on substantial questions of law. Applying the proviso which requires a threshold amount for admission, the Tribunal concluded that the appeal did not involve any substantial question of law warranting admission and consideration on merits. This conclusion was recorded notwithstanding the appellant's request for decision on available records. [Paras 4]

Appeal not admitted for consideration as no substantial question of law is involved and amount in dispute is below the threshold.

Final Conclusion: Miscellaneous application allowed for early hearing; appeal dismissed as time barred and, on the merits threshold, not admitted for consideration.

Intermediary service - place of provision of services - export of services - principal-to-principal relationship - Place of Provision of Services Rules, 2012

Intermediary service - place of provision of services - export of services - principal-to-principal relationship - Place of Provision of Services Rules, 2012 - Whether the services rendered by the respondent to its parent company in USA are intermediary services or constitute export of services. - HELD THAT: - The Tribunal applied the definition of intermediary under Rule 2(f) of the Place of Provision of Services Rules, 2012 and the clarificatory Circular No.159/15/2021-GST, holding that to qualify as an intermediary there must be arrangement or facilitation of a main supply between two or more persons and the intermediary must not itself provide the main service. The respondent performed R&D, marketing & sales assistance, demonstrations and customer support on its own account for the parent company and charged on that basis; such activities amount to provision of the main service rather than mere facilitation. The agreements and invoices show a principal-to-principal relationship rather than an agent-principal one. The Tribunal relied on the Illustration in the Board Circular and on precedents which interpret intermediary narrowly and distinguish persons who provide the main service on their own account. Consequently, the place of provision cannot be fixed under the intermediary rule (Rule 9) but must be determined under the general rule (including Rule 3) - resulting in the services qualifying as export of services where the recipient is located outside India and consideration is received in convertible foreign exchange. The Tribunal therefore found no merit in the Revenue's contention that the services were intermediary services attracting service tax. [Paras 6, 7, 11, 13]

Services rendered by the respondent are not intermediary services but are services provided on its own account; they qualify as export of services and the Revenue's appeal is rejected.

Final Conclusion: The impugned order dropping the demand is upheld; the Revenue's appeal is dismissed as devoid of merit.

Business auxiliary service - principal-to-principal sale - trade discount / incentive not taxable as service - service tax liability on discounts/commission - penalty under Section 77 and Section 78 of the Finance Act, 1994

Trade discount / incentive not taxable as service - business auxiliary service - service tax liability on discounts/commission - The 1.5% discount/incentive received by the appellant from SAIL is not liable to service tax as a business auxiliary service. - HELD THAT: - The Tribunal examined the contractual relationship and commercial reality between the appellant and SAIL and found that goods were purchased by the appellant from SAIL on its own account and sold by the appellant as owner. The discount of 1.5% was an incentive tied to achieving specified lifting quantities and formed part of a principal-to-principal commercial transaction rather than consideration for a service rendered. Applying the elements required to classify an activity as a taxable service (existence of service provider and receiver, provision of a service to the client, and relation to business auxiliary services), the Tribunal concluded that the discounts/incentives arising under manufacturer-dealer schemes cannot be stretched into service consideration merely because they promote sales; the element of sales promotion as a taxable activity arises only where the dealer provides services to the manufacturer or end customer beyond ordinary purchase and resale. The Tribunal further relied on consistent precedents of the Tribunal and higher fora rejecting service tax on similar manufacturer-to-dealer discounts/incentives and followed that ratio in setting aside the demand. [Paras 8, 9, 10, 11]

Demand of service tax on the incentive/discount was set aside and the appeal allowed.

Principal-to-principal sale - business auxiliary service - The appellant is not a commission agent rendering business auxiliary service but an authorised dealer dealing on principal-to-principal basis. - HELD THAT: - On construction of the appointment letter and the terms of trade, the Tribunal found that the appellant purchased goods from SAIL by paying on its own account and thereafter raised its own invoices on resale, and was registered under VAT/Sales Tax and paid applicable sales tax. These facts demonstrate ownership and trading activity rather than agency; consequently, the nature of the relationship is principal-to-principal. The Tribunal applied the established test that mere receipt of discounts or incentives under a manufacturer's scheme does not convert a dealer into a service provider to the manufacturer and does not attract business auxiliary service classification. [Paras 5, 8]

The finding that the appellant acted as a commission agent was rejected.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order confirming service tax demand and penalties, and granted consequential relief in accordance with law.

Benefit of job-work exemption - classification of semi-finished goods for levy of excise duty - confiscation and redemption fine - penalty for procedural non-compliance under Notification No. 214/86-CE

Classification of semi-finished goods for levy of excise duty - benefit of job-work exemption - confiscation and redemption fine - Whether the consignment of 297 bags of unbranded biris dispatched by the job-worker was semi-finished job-work goods and therefore not liable to excise duty at the job-worker's end, and whether seizure, confiscation and redemption fine imposed on that consignment were justified. - HELD THAT: - The Tribunal accepted documentary evidence - Transit Notes showing movement to Samar Biri Factory and the verification/report from the Siliguri Anti-Evasion unit confirming receipt, accountal in statutory records, and subsequent completion (toasting, leveling, packing) followed by clearance on payment of Central Excise duty by the principal. Those materials establish that the goods in transit were semi-finished/unmarketable in loose condition and underwent further processes at the principal's factory before becoming finished goods. On that basis the Tribunal held that the consignment could not be treated as finished goods for demanding excise duty from the job-worker and that seizure, confiscation and the imposition of Redemption Fine on the 297 bags were unwarranted. [Paras 9, 10, 11, 12]

Seizure, confiscation and Redemption Fine in respect of the 297 bags set aside; the consignment held to be semi-finished job-work goods not liable to excise duty at the job-worker's end.

Benefit of job-work exemption - penalty for procedural non-compliance under Notification No. 214/86-CE - Whether non-compliance with the procedural requirements of Notification No. 214/86-CE (absence of prescribed undertaking/intimation) by the job-worker or principal disentitles them to the job-work exemption, and the consequence of such procedural lapse. - HELD THAT: - Applying the reasoning in G.G. Automotive Gears Ltd. as followed by the Tribunal, the mere absence of the undertaking or failure to follow the procedural formalities under Notification No. 214/86-CE cannot, by itself, be a ground to deny the substantive benefit where there is proper accountal and the principal has paid excise duty on removal of finished goods. The Tribunal observed that although procedural requirements were not fully complied with in this case, the documentary verification demonstrates proper accountal and payment by the principal. Nonetheless, the Tribunal found that the procedural lapse warranted imposition of penalty for non-compliance and, on consideration of facts, moderated the penalties imposed on the parties. [Paras 13, 14]

Non-compliance with Notification No. 214/86-CE does not automatically disentitle the parties to the job-work exemption where accountal and duty payment by the principal are established; penalty imposed for procedural lapse was moderated by the Tribunal.

Final Conclusion: On the material placed on record (Transit Notes and verification by Siliguri Anti-Evasion unit) the goods transported by the job-worker were held to be semi-finished job-work goods and not finished goods liable to excise duty at the job-worker's end; seizure, confiscation and Redemption Fine were set aside. The Tribunal held that mere non-observance of Notification No. 214/86-CE formalities does not, by itself, justify denial of the exemption where proper accountal and duty payment by the principal are established, but reduced penalties were imposed for the procedural lapses.

Admissibility of cenvat credit on GTA services - place of removal - FOR destination sale - ownership and risk in transit - input service credit admissible up to place of removal - CBEC circular dated 08.06.2018

Admissibility of cenvat credit on GTA services - place of removal - FOR destination sale - ownership and risk in transit - input service credit admissible up to place of removal - CBEC circular dated 08.06.2018 - Cenvat credit of service tax paid on GTA services used to transport manufactured goods to the buyer's premises under a FOR destination contract is admissible. - HELD THAT: - The Tribunal noted as an undisputed fact that the appellant contracted to deliver goods on FOR destination and that ownership of the goods remained with the manufacturer until delivery at the buyer's premises. It applied the settled principle that input service credit is admissible up to the place of removal. Reliance was placed on the Supreme Court's reasoning in Roofit Industries (as followed in Emco) that value additions for excise are to be taken up to the stage of transfer of ownership, and on the CBEC circular dated 08.06.2018 which states that where sale is FOR destination and ownership and risk remain with the manufacturer until acceptance by the buyer, the place of removal is the buyer's premises. Applying these authorities and the factual finding that ownership remained with the appellant until delivery at the customer's premises, the Tribunal concluded that the place of removal is the buyer's premises and therefore the cenvat credit on GTA services used for such transportation is admissible. [Paras 4, 5]

Cenvat credit of service tax on GTA services for removal to the buyer's premises in a FOR destination sale is admissible.

Final Conclusion: The impugned order denying cenvat credit is set aside and the appeal is allowed, holding that the appellant is eligible for cenvat credit of the service tax paid on GTA services for transportation up to the buyer's premises where ownership remained with the manufacturer.

Service of demand notice on a company as service on its directors - commencement of limitation for filing complaint under Section 142(b) of the Negotiable Instruments Act - inapplicability of the Limitation Act for exclusion of time in proceedings under the Negotiable Instruments Act - quashing of criminal complaint on ground of being timebarred

Service of demand notice on a company as service on its directors - Service of the demand notice on the drawer company by email on 11.03.2022 was effective as service on its director (petitioner No.2) as well as on petitioner No.3. - HELD THAT: - The Court held that Section 141 does not require separate individual notices to directors where the notice is given to the drawer (the company). A company, being a juristic entity, is represented by persons who guide its actions; service on the company is adequate for proceeding against those in charge of its affairs. The Court relied on Krishna Texport and related coordinate-bench decisions to conclude that email service on the company on 11.03.2022 operated as effective service on the directors, and there was no dispute regarding delivery to petitioner No.3. [Paras 9, 10, 11]

Service by email on the company on 11.03.2022 is treated as effective service on the directors.

Inapplicability of the Limitation Act for exclusion of time in proceedings under the Negotiable Instruments Act - The time spent in pursuing the earlier complaint filed in Gurugram cannot be excluded by applying the Limitation Act; the Limitation Act does not apply to proceedings under the Negotiable Instruments Act. - HELD THAT: - Relying on the Supreme Court decision in Subodh S. Salaskar v. Jayprakash M. Shah, the Court held that the Limitation Act is not applicable to proceedings under the NI Act; consequently, the complainant cannot seek exclusion of the period spent prosecuting the Gurugram complaint when computing limitation for the present complaint. [Paras 11]

Time spent in the Gurugram proceedings is not excluded; the Limitation Act cannot be invoked to extend the limitation for NI Act complaints.

Commencement of limitation for filing complaint under Section 142(b) of the Negotiable Instruments Act - quashing of criminal complaint on ground of being timebarred - The period of one month under Section 142(b) commenced after excluding the day on which the cause of action arose; the complaint filed on 28.04.2022 was beyond the onemonth period and therefore timebarred, warranting quashing of the complaint and setting aside cognizance. - HELD THAT: - Applying the rule in Saketh India Ltd. (adopted by the Supreme Court in Econ Antri Ltd.), the Court excluded the first day after expiry of the 15day period and computed the 30day limitation accordingly. The 15day cure period ended on 26.03.2022, the cause of action arose on 27.03.2022, and excluding that day the onemonth limitation expired on 27.04.2022. The complaint was filed on 28.04.2022 as per trialcourt metadata, i.e., one day beyond the limitation. The complainant had not sought condonation of delay or offered any explanation; reliance on prior filing in Gurugram could not rescue limitation. In view of settled precedents and analogous coordinate-bench decisions, the complaint was held barred by time. [Paras 15, 16, 17, 18, 19]

Complaint filed on 28.04.2022 was timebarred and is quashed; the order taking cognizance is set aside.

Final Conclusion: The petition is allowed: the criminal complaint under Section 138 NI Act is quashed as timebarred and the order taking cognizance is set aside.