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    Seeking grant of Bail - wrongful availment of Input Tax Credit and fake invoices.
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    Case LawsGST
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    Wrongful availment of Input Tax Credit: bail denied due to gravity of economic offence and nascent investigation.
    Allegations assert coordinated issuance of fake invoices among about 56 firms to wrongfully claim Input Tax Credit, allegedly evading taxes amounting to Rs. 5.65 crore. Considering the scale, conspiratorial nature, and nascent stage of investigation, and recognising economic offences as particularly serious for public finances, the court refused bail to the applicant Saurabh Srivastava and dismissed the bail application.
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    The petition alleged majority conduct that altered the petitioner's intended equity stake and diverted company funds, constituting unfair treatment of a minority shareholder. The tribunal preserved the petitioner's original shareholding at incorporation and directed a share valuation to enable a fair exit, with the company bearing the valuation fee and interim protection against further alteration of shareholding.
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    Bail presumption in money laundering cases requires reasonable grounds to believe accused is not guilty before release.
    Money laundering bail applications balance the presumption that bail is the rule against offence gravity and statutory constraints. Courts consider nature and seriousness, evidence quality, accused's circumstances, risk of non appearance and witness tampering, and public interest. The twin condition requires prosecutorial opposition and that, if opposed, there be reasonable grounds to believe the accused is not guilty and will not reoffend; investigative stage, missing materials and absconding principal suspects materially affect this assessment.
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    Regulatory authority of RBI: directions in public interest can bar civil claims and restrain NBFC asset transfers.
    RBI directions in public interest can prohibit an NBFC's asset alienation and bind civil claims even if the enabling provision is not cited; failure to challenge such directions constitutes waiver/acquiescence, preventing civil relief that conflicts with the direction. Constructive res judicata bars subsequent suits where the cause of action accrued earlier and was not raised, and winding-up petition commencement creates a suspect period during which transfers may be impeached as potentially fraudulent.
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    Arbitration appointment governs share-conversion dispute, shaping insolvency jurisdiction and conversion mechanics in related contracts.
    Disputes over the conversion formula for optionally convertible redeemable preference shares following a qualified initial public offering were submitted to arbitration under agreements designating Mumbai and a three-arbitrator tribunal with a Chairperson. Parties disputed entitlement percentages and refund implications; compliance with SEBI Regulations required conversion prior to the QIPO. A related claim that unpaid redemption sums triggered corporate insolvency proceedings was assessed, and the factual record did not establish a contractual default sufficient to invoke the insolvency resolution process. Multiple arbitration agreements between the same parties permit separately constituted proceedings for international and domestic arbitration while retaining the same tribunal members.
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    Jurisdiction in customs seizure: police interceptions outside customs station amount to town seizure and invalidate statutory seizure.
    Jurisdiction under the Customs Act depends on action by competent customs officers at the designated customs station; interceptions and initial custody by police constitute a town seizure, failing the statutory prerequisites for a valid customs seizure. The revenue bears the onus to prove goods are smuggled and that territorial and procedural jurisdictional requirements were satisfied before a seizure can be validly treated as a customs action.
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    Compounding under Section 147 of the Negotiable Instruments Act may be invoked at trial, appeal or revision where parties settle by payment and consent; courts treat the dishonour under Section 138 as a civil wrong with criminal penalties and may allow compounding, direct deposit of amounts and release from imprisonment to give effect to the compensatory mechanism.
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    Classification of gear components as machinery parts under tariff 8483 rather than as motor vehicle parts, based on nature and function.
    Dispute on whether imported gear reduction blanks and related transmission components should be classified under tariff item 8483 as machinery parts or under tariff item 8708 as motor vehicle parts; prior rulings and interpretation of chapter notes direct classification to 8483 where the components are standalone gear or transmission parts rather than integral vehicle assemblies.
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    Right to be heard: foreclosure of the right to reply violates natural justice, requiring fresh adjudication with hearing.
    Foreclosure of the noticee's opportunity to respond to a notice breaches the right to be heard and principles of natural justice. Where the adjudicating authority has foreclosed the reply, the matter should be returned to the original authority for fresh adjudication after the noticee is given opportunity to reply and to present factual and legal submissions, and after the authority issues notice of intent and completes adjudication with procedural fairness.
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    Duomatic principle upheld: unanimous member acquiescence prevents oppression or mismanagement findings in family company governance dispute.
    The Duomatic Principle was applied to validate informal corporate acts where members gave unanimous or tacit assent: a director's withdrawal of resignation, the appointment of a managing director, and share transfers were held bona fide and not fraudulent. The appellant's prior knowledge and acquiescence estopped subsequent challenges, and she lacked locus to sue on behalf of trusts. Fraud remains an exception to Duomatic application; absent fraud and public prejudice, the facts did not constitute oppression or mismanagement.
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    Duomatic principle: unanimous member assent can validate informal corporate acts and bar oppression claims without fraud.
    The Duomatic Principle validates informal corporate acts effected with unanimous or tacit member assent, permitting departure from strict statutory formalities where transactions are bona fide and free from fraud. Prior knowledge, acquiescence and estoppel by a complainant can negate claims of oppression or mismanagement arising from appointments, withdrawal of resignations, share transmissions, and conduct of meetings, preserving corporate finality and internal decision-making.
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    Dishonor of cheques enforcement: special courts, pre-summons mediation and a summons portal to reduce case pendency.
    Dishonor of cheques under the Negotiable Instruments Act is being approached through pre-summons mediation, a National Portal for summons, and establishment of special courts in high-caseload districts; proposals include using retired judicial officers and court staff, with coordination among the Union, High Courts and State Governments to reduce pendency in proceedings arising from cheque dishonour.
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    Dishonor of cheques procedure: streamline service of summons and preserve magistrate discretion on trial conversion.
    Dishonour of cheques proceedings require prompt service of summons and retention of summary-trial procedures; reforms include shortening dishonour-slip practices, mandatory contact disclosure, creating a nodal agency for electronic service and issuing unique dishonour identifiers. Magistrates must record reasons when converting summary trials into summons trials; summary-trial procedure applies as far as may be. Inquiry mechanisms under the Code permit affidavits and document examination to test sufficiency of grounds. High Courts should direct that service in one complaint arising from the same transaction be treated as deemed service for related complaints and encourage use of inherent powers and mediation to reduce pendency.
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    International commercial arbitration: sole proprietorships qualify when a party has a foreign nexus, triggering arbitration rules.
    A sole proprietorship is equated with its proprietor and, when a party has a foreign nexus-foreign national status, habitual residence abroad, foreign incorporation, or foreign government involvement-the dispute qualifies as international commercial arbitration, even if that party operates through a local office; statutory procedures govern appointment of arbitrators and extraordinary discretionary relief cannot bypass those appointment mechanisms.
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    Issuance of summons under section 108 should ordinarily be made to a Board authorised company representative; summonses to top management, including the managing director, are to be used sparingly only where representatives are non cooperative or there is demonstrable necessity. Administrative Circular guidance requires this sequence and places responsibility on departmental officers, including Collectors, to enforce these procedural limits.
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    The legal classification of copyright infringement offences depends on the imprisonment bracket in the Code's schedule: offences meeting the statutory threshold qualify as cognisable, while lesser-punishment offences are non-cognisable. Applied to the relevant copyright provisions, the correct legal consequence is to treat the infringing conduct as a cognisable and non-bailable offence, allowing FIR registration and investigation to proceed under the Code's procedures.
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    Writ jurisdiction protects rights against arbitrary administrative action, permitting High Court supervisory challenges to commission orders.
    Writ jurisdiction under Articles 32 and 226 allows enforcement of fundamental rights via writs such as Habeas Corpus, Mandamus, Certiorari, Quo Warranto and Prohibition, particularly where no statutory appeal exists; challenges to National Consumer Disputes Redressal Commission orders may be pursued before the High Court under its supervisory jurisdiction, with any interim relief subject to the rigours and constitutional limits of Article 227.
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    Abuse of revenue authority: improper recoveries and refund adjustments contrary to statutory stay and intimation safeguards.
    The note addresses revenue practice of effectuating recoveries and adjusting taxpayer refunds without complying with statutory safeguards, characterising such conduct as an abuse of authority and a breach of constitutional taxation limits under Article 265. It emphasises that filing an appeal precludes an assessee from being treated as an 'assessee in default' for recovery purposes under the statutory stay framework, and that automatic adjustment of refunds against demands without prior intimation and opportunity of hearing conflicts with the statutory process for refund adjustment and recovery.
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    Suspension of limitation: moratorium under the insolvency code halts limitation, prioritising resolution before limitation resumes post-resolution.
    Section 60(6) of the Insolvency and Bankruptcy Code suspends the running of limitation for as long as a company is under the moratorium imposed by Section 14, and this suspension should be read in harmony with the Resolution Professional's duty under Section 25(2)(b). Insolvency shifts control from the company's management to the Resolution Professional and the Committee of Creditors, who focus on resolution rather than litigation, and limitation resumes when the company emerges from insolvency.
    Case LawsGST
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    Reverse charge on ocean freight invalidated as conflicting with composite supply and double taxation principles.
    Notifications 08/2017 and 10/2017 that impose tax on ocean freight in CIF contracts by treating the importer as the recipient under a Reverse Charge Mechanism were challenged as ultra vires, producing double taxation because freight is included in customs value, lacking territorial nexus, and mischaracterising the exporter/importer relationship; the Supreme Court refused to treat GST Council recommendations as binding and held that separate taxation of the freight service contravenes the statutory composite supply framework.

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      Review of Customs duty Exemptions - Review of conditional exemption rates of BCD

      24 July, 2024

      Contents
      Notifications
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      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      (i) The BCD exemption for the goods covered under following serial numbers of the notification are being extended upto 31st March, 2026 unless specified otherwise.

      S. No.

      S N of 50/17-Cus

      Brief Description

      1.

      17

      Specified Planting materials, namely, oilseeds, seeds of vegetables, tubers, etc.

      2.

      80A

      Algal oil for manufacturing of aquatic feed

      3.

      90

      Lactose for use in manufacture of homeopathic medicines

      4.

      104

      Specified goods used in processing of sea-food

      5.

      133

      Gold ores and concentrates

      6.

      139

      Bunker Fuels namely: (i). IFO 180 CST; (ii). IFO 380 CST; (iii). VLSFO (CTH 27)

      7.

      150

      Naphtha for manufacture of Fertilisers (scope of exemption is being reduced only to Naphtha)

      8.

      155

      Liquefied petroleum gases (LPG) received from unit in SEZ and returned by the DTA unit to the SEZ unit

      9.

      164

      Electrical energy supplied from SEZ unit to DTA

      10.

      165

      Electrical energy supplied from SEZ to DTA

      11.

      172

      Specified goods used in manufacture of silicon wafers or solar wafers, for manufacture of solar cell or module

      12.

      183

      Medical use fission Molybdenum-99 (Mo-99) for use in manufacture of radio pharmaceuticals

      13.

      184

      Pharmaceutical Reference Standard

      14.

      188

      Goods for manufacture of ELISA Kits

      15.

      191

      Maltol for manufacture of deferiprone

      16.

      204

      Anthraquinone or 2-Ethyl Anthraquinone for use in manufacture of Hydrogen peroxide

      17.

      237

      Specified material for manufacture of EVA (Ethylene Vinyl Acetate) sheets or backsheet, which are used in the manufacture of solar photovoltaic cells or modules (Scope of materials which can be imported is being increased)

      18.

      253

      Specified Goods for manufacture of Brushless Direct Current (BLDC) motors

      19.

      257

      Tags, labels, stickers, belts, buttons, hangers or printed bags, imported by bonafide exporters

      20.

      257A

      Specified goods used in manufacture of handicraft items for export when imported by bonafide exporter

      21.

      257B

      Specified goods used in manufacture of textile or leather garments for export when imported by bonafide exporter

      22.

      257C

      Specified goods used in manufacture of leather or synthetic footwear or other leather products for export when imported by bonafide exporter

      23.

      258

      Security fibre, threads, Paper based Taggant, M-feature for use in manufacture of security paper by Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt Ltd, Mysore.

      24.

      259

      Raw materials for manufacture of security fibre and security thread for supply to Security Paper Mill, Hoshangabad and Bank Note Paper Mill India Pvt. Ltd, Mysore for use in manufacture of security paper

      25.

      260

      Goods for the manufacture of specified orthopedic implants (902110)

      26.

      261

      Raw material for manufacture of Copper-T Contraceptive

      (i) Alatheon

      (ii) Copper Wire

      27.

      265

      Capacitor grades polypropylene granules for manufacture of Capacitor grade plastic

      28.

      269

      Super absorbent polymer for manufacture of adult diapers and specified goods

      29.

      271

      Polytetrametylene ether glycol, (PT MEG) for use in manufacture of spandex yarn

      30.

      276

      Ethylene- propylene- non-conjugated diene rubber (EPDM) for manufacture of insulated wire and cables

      31.

      279

      New or retreated Pneumatic tyres of rubber for use in servicing, repair of maintenance of aircrafts used for operating scheduled air transport service or scheduled air cargo service etc

      32.

      280

      New or retreated Pneumatic tyres of rubber for use in servicing, repair or maintenance of aircraft imported or procured by Aero Club of India/ for flying training purpose/ operating non-scheduled (passenger or charter) services/ AAI for flight calibration purpose

      33.

      290

      Wood pulp for manufacture of newsprint, paper or paperboard

      34.

      292

      Goods imported for manufacture of paper, paper boards, newsprint

      35.

      293A

      Newsprint and uncoated paper imported for printing of newsprint

      36.

      296A

      Lightweight coated paper imported by actual users for printing of magazines

      37.

      326

      Hydrophilic /Hydrophobic Non- Woven, imported for use in the manufacture of Adult Diapers

      38.

      329

      Pile fabrics for the manufacture of toys

      39.

      333

      Moulds, tools and dies, for the manufacture of parts of electronic components or electronic equipment

      40.

      334

      (i) Graphite Felt or Graphite pack for growing silicon ingots (ii) Thin Steel wire used in wire saw for slicing of silicon wafers

      41.

      345A

      Simply Sawn Diamonds

      42.

      364A

      Spent catalyst or ash containing precious metals

      43.

      368

      Ferrous Scrap

      44.

      374

      Magnesium Oxide (MgO) coated cold rolled steel coils for use in manufacture of cold rolled grain oriented (CRGO) steel

      45.

      375

      Specified items for manufacture of cold rolled grain-oriented steel (CRGO) steel

      46.

      378

      Metal parts for manufacture of electrical insulators falling under heading 8546

      47.

      379

      Pipes and tubes for use in manufacture of boilers

      48.

      380

      Forged steel rings for manufacture of special bearings for use in wind operated electricity generators

      49.

      381

      Flat copper wire for use in the manufacture of photo voltaic ribbon for manufacture of solar photovoltaic cell or modules

      50.

      392

      Dies for drawing metal, where imported after repairs from abroad

      51.

      403

      Parts and raw materials for offshore oil exploration

      52.

      404

      Specified items including capital goods and raw materials for off shore oil exploration

      53.

      415

      Parts for manufacture of catalytic convertors

      54.

      415A

      Platinum or Palladium for manufacture of Noble Metal Compounds & Noble Metal Solutions

      55.

      416

      Ceria zirconia compounds for use in the manufacture of washcoat for catalytic converters

      56.

      417

      Cerium compounds for use in the manufacture of washcoat for catalytic converters

      57.

      418

      Zeolite for use in the manufacture of washcoat for catalytic converters

      58.

      422

      Machinery, electrical equipment for use in semiconductor wafer and LCD

      59.

      423

      Machinery, electrical equipment for use in marking and packaging of semiconductor chips

      60.

      426

      Specified goods for the manufacture of semiconductor devices, memory card, IC, solar cell

      61.

      435

      Capital goods for printing industry

      62.

      442

      Bushings made of Platinum and Rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India

      63.

      446

      Parts and components for manufacture of tunnel boring machines

      64.

      451

      Evacuated tubes with three layers of solar selective coating for use in manufacture of solar water heater

      65.

      462

      Ball screws for use in the manufacture of CNC Lathes

      66.

      463

      Linear Motion Guides for use in the manufacture of CNC Lathes

      67.

      464

      CNC Systems for use in the manufacture of CNC Lathes

      68.

      464A

      Goods for manufacture of plastic processing machineries

      69.

      467

      Parts and components of cash dispenser or automatic bank note dispenser

      70.

      468

      Parts for manufacture of Micro ATM, Fingerprint reader/scanner, Iris scanner, Miniaturised POS (Scope of exemption is being limited to import of raw materials only)

      71.

      471

      All parts for use in the manufacture of LED lights

      72.

      472

      All inputs for use in the manufacture of LED driver or MCPCB for LED lights

      73.

      476

      Television equipment, cameras etc for taking films, imported by a foreign film unit or television team

      74.

      477

      Filming equipment of foreign origin if imported into India after having been exported therefrom.

      75.

      480

      Goods imported for being tested in specified test centers

      76.

      489B

      Goods for manufacturing of Microphones

      77.

      504

      Parts and Components of Digital Still Image Video Cameras

      78.

      509

      Parts, components and accessories for manufacture of Digital Video Recorder

      79.

      510

       Parts, components and accessories for use in manufacture of reception apparatus for television

      80.

      511

      Parts, components and accessories for manufacture of CCTV Camera

      81.

      512

      Specified Parts, components and for use in manufacture of Lithium-ion battery and battery pack

      82.

      512A

      Inputs, parts or sub-parts for use in the manufacturing of Printed Circuit Board Assembly

      83.

      515A

      Open Cell for manufacture of TV Panel

      84.

      516

      The following goods for use in the manufacture of Liquid Crystal Display (LCD) /LED TV Panel

      85.

      517

      Magnetrons for manufacture of domestic microwave ovens

      86.

      519

      Raw materials or parts for use in manufacture of e-Readers

      87.

      523A

      Parts, sub-parts, inputs or raw material for use in manufacture of Lithium-ion cells

      88.

      527

      Lithium-ion cell use in manufacture of battery or battery pack

      89.

      527A

      Lithium-Ion Cell for use in manufacture of battery or battery pack of cellular mobile

      90.

      527B

      Lithium-Ion Cell manufacture of battery or battery pack of EV

      91.

      534

      Parts of gliders or simulators of aircrafts (excluding rubber tyres and tubes of gliders)

      92.

      535

      Raw materials for manufacture of aircraft and parts of aircraft

      93.

      535A

      Parts of aircraft for manufacture of aircraft or for manufacture of parts of aircraft by PSU under Min of Defence

      94.

      536

      Parts, testing equipment, tools and tool-kits for maintenance, repair, and overhauling of aircraft, components or parts of aircrafts

      95.

      537

      All goods of Heading 8802 (except 88026000-spacecraft)

      96.

      538

      Components or parts, including engines, of aircraft of heading 8802

      97.

      539

      (a) Satellites and payloads; (b) Ground equipment brought for testing of (a)

      98.

      539A

      Scientific and technical instruments etc for launch vehicles and satellites

      99.

      540

      Specified goods imported by scheduled air transporter

      100.

      542

      Specified goods imported by Aero Club, Flying Training Institutes

      101.

      543

      Specified goods imported by non-scheduled air transporter

      102.

      544

      Parts (other than rubber tubes), of aircraft of heading 8802

      103.

      546

      Parts (other than rubber tubes), of aircraft of heading 8802

      104.

      548

      Barges or pontoons imported along with ships

      105.

      551

      Cruise ships, Excursion ships

      106.

      553

      Fishing vessels, Tugs and Pusher crafts, light vessels excluding vessels and floating structure imported for break up

      107.

      555

      Vessels like warships, lifeboats excluding vessels and floating structure imported for break up

      108.

      567

      Stainless steel tube and wire, for manufacture of Coronary stents /artificial valve

      109.

      569

      Parts required for manufacture of Ostomy products

      110.

      570

      Medical and surgical instruments, apparatus and appliances including spare parts and accessories thereof

      111.

      575

      Specified Hospital Equipment for use in specified hospitals

      112.

      578A

      Raw materials, for the manufacture of Cochlear Implants

      113.

      580

      X-Ray Baggage Inspection Systems and parts thereof

      114.

      581

      Portable X-ray machine / system

      115.

      583

      Parts and cases of braille watches, for the manufacture of Braille watches

      116.

      591

      Parts of electronic toys

      117.

      593

      Parts of video games for the manufacture of video games

      Note: Description of entries is indicative. Notification may be referred to for complete description.

      (ii) The BCD exemption for the goods covered under following serial numbers of the notification no 50/2017-Customs is being extended upto 31st March 2029.

      S. No.

      S. No. of 50/2017Cus

      Brief Description

      1.

      212A

      Medicines/drugs/vaccines supplied free by United  Nations International Children's Emergency Fund (UNICEF), Red Cross etc

      2.

      213

      Drugs and materials

      3.

      428

      Specified goods imported by accredited press cameraman

      4.

      429

      Specified goods, imported by accredited journalist

      5.

      549

      Capital goods, raw materials and spares for repairs of ocean-going vessels

      6.

      550

      Spare parts and consumables for repairs of ocean going vessels registered in India.

      7.

      577

      Lifesaving medical equipment for personal use

      8.

      607

      Life Saving drugs like Keytruda etc

      9.

      607A

      Lifesaving drugs/medicines for personal use

      10.

      611

      Archaeological artefacts for exhibition in a museum

      11.

      612

      Specified raw material for sports goods

      Note: Description of entries is indicative. Notification may be referred to for complete description.


      Full Text:

      Union Budget 2024-25 (Full) + FINANCE (No.2) Bill, 2024

      Topics

      ActsIncome Tax