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Whether the vessels or ships that are afloat are not goods and immovable property? - CESTAT says Yes...
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Classification of floating vessels as immovable property may exclude their sale from GST law taxation.
The tribunal held that ships and vessels afloat are not 'goods' but are akin to immovable property because they cannot be severed from the waters; ships are goods only before launch, during breaking up, or when specifically the subject of a sale. As immovable property lies outside the GST domain under the constitutional allocation, this classification raises the question whether GST would apply to sale or supply of floating vessels-a point pending higher judicial scrutiny.
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Inspection of prosecution work: ensure compliance with prosecution guidelines and address pendency and non-compliance in tax enforcement.
Inspection of prosecution work requires the Director General, Directorate of Performance Management and Chief Commissioners to inspect Commissionerates to verify scrupulous compliance with the Circular's guidelines for launching prosecution. Inspections must examine reasons for pendency and non-compliance in prosecution cases and ensure recording of statistical data during field visits to support oversight of prosecution performance.
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Compounding of offences: administrative authorities may permit settlement by payment and written offer when prosecution is initiated.
Compounding of offences for evasion under central excise and service tax allows the Principal Chief/Chief Commissioner to compound offences on payment of the compounding amount; Section 9A(2) of the Central Excise Act as applied to service tax via section 83 of the Finance Act authorises this, and circulars require that persons against whom prosecution is initiated or contemplated be informed in writing of the offer to compound.
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Prosecution guidelines: sanctions granted after the circular govern cases regardless of offence date, with sanctioned cases reviewed.
Prosecution guidelines apply to all cases where sanction for prosecution is accorded after the circular's issue date, and such cases must be prosecuted according to the circular regardless of the offence date. Sanctioning authorities must review cases in which prosecution has been sanctioned but no complaint filed, reassessing them against the circular's provisions before any complaint is presented.
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What is the term of publication of name of person convicted as per this Circular No. 1009/16/2015-CX...
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Publication of convicted persons' names may be sought by the department through courts under central excise and service tax law.
Power exists under the Central Excise statutory framework, as applied to service tax by the Finance Act, to publish the name and place of business of persons convicted under the relevant enactments; courts have exercised this power sparingly, and the department is directed to request courts to invoke this publication power in deserving cases for all convicted persons.
Circulars Central Excise
Who will be responsible to monitor cases of prosecution as per this reasons include and how? FOR EVA...
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Prosecution monitoring: Principal Commissioners must track and review cases monthly to ensure satisfactory progress.
The Principal Commissioner/Commissioner must monitor prosecution files monthly, take corrective action where necessary, and inspect the prosecution register in the Prosecution Cell at least once every quarter. Designated supervisors in zonal investigative units must oversee prosecution work. Prosecution registers in prescribed formats are to be maintained, regularly updated and kept in the Commissionerate Prosecution Cell and in zonal units to enable systematic tracking of prosecution cases.
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what is the procedure of prosecution? FOR EVASION OF SERVICE TAX OR CENTRAL EXCISE :
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Prosecution Sanction: mens rea and evidentiary sufficiency determine whether tax evasion prosecution proceeds.
Prosecution proposals for service tax or excise evasion must be examined and forwarded by the adjudicating authority to the sanctioning Principal Chief/Chief Commissioner or Principal/Director General; prosecution requires evidence of mens rea and should not be launched in purely technical or interpretation disputes. Criminal standards (beyond reasonable doubt) must be weighed separately from adjudication findings; prosecution may be initiated before adjudication in serious cases. Investigation reports must be prepared within one month and sanction obtained prior to filing; authorised officers must secure exhibits and coordinate with public prosecutors, with reporting obligations for delays and monthly updates to the sanctioning authority.
Circulars Central Excise
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Sanction for prosecution: designated senior authorities must authorize and formalize prosecution before filing criminal complaints.
Sanction for prosecution is required before initiating criminal complaints in service tax and central excise matters. The Principal Chief/Chief Commissioner must sanction routine cases, while the Principal Director General/Director General, CEI must sanction cases investigated by the Directorate General of Central Excise Intelligence. The sanctioning authority issues a written order and forwards it to the Commissionerate for expeditious filing of the complaint.
Circulars Central Excise
What is the meaning of term “Habitual Evaders” in terms of prosecution? FOR EVASION OF SERVICE T...
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Habitual evasion: prosecution permitted where repeated confirmed demands and substantial cumulative tax evasion or credit misuse.
Prosecution may be initiated against a company or assessee classified as a habitual evader where multiple confirmed demands (at first appellate level or above) for Central Excise duty or Service Tax, or findings of Cenvat credit misuse arising from fraud or suppression, occur within a prior period and the cumulative duty or tax evaded or credit misused meets a substantial monetary threshold; the Offence Register (335J) may be used to identify such assessees.

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IBC

A Judicial Perspective on Locus Standi in Insolvency and Bankruptcy Code Cases

21 January, 2024

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Deciphering Legal Judgments: A Comprehensive Analysis of Case Law

Reported as:

2024 (1) TMI 733 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCH

Introduction

A landmark case before the National Company Law Appellate Tribunal (NCLAT), Chennai Bench, offers a profound examination of locus standi in the context of the Insolvency and Bankruptcy Code 2016 (IBC). This case, involving a financial creditor and a corporate debtor, provides an essential commentary on the procedural and substantive aspects of insolvency law in India, particularly focusing on the standing of parties to initiate and participate in proceedings.

Background of the Case

Originating from a petition filed under the IBC, this case has traversed various legal terrains, including the National Company Law Tribunal (NCLT) and the Supreme Court. The complexity of the case lies not only in the financial dynamics but also in the legal principles it addresses, including the critical issue of locus standi in insolvency proceedings​​.

Key Legal Proceedings and Decisions

  1. Resolution Plan Approval: The NCLT-appointed Resolution Professional (RP) navigated the approval of a resolution plan, which was subsequently endorsed by the Committee of Creditors (CoC)​​.

  2. Challenges to the Plan: A crucial challenge arose when an application for an extension to implement the plan and a request to safeguard a bank guarantee were dismissed, leading to legal ramifications under Section 74(3) of the IBC​​.

  3. Involvement of the Supreme Court: The case escalated to the Supreme Court, where a financial creditor's appeal against a specific order was dismissed​​.

  4. Further NCLT Proceedings: The RP sought an extension of the Corporate Insolvency Resolution Process (CIRP) and permission for fresh bids, highlighting the unsuccessful bidder's failure to honor the resolution plan​​.

  5. NCLAT Appeal: An appeal against the order in I.A. No. 283 of 2022 was brought before the NCLAT, which upheld the previous decisions​​.

Analysis of Locus Standi

Understanding Locus Standi in Insolvency Proceedings

Locus standi, or the right to bring an action or to be heard in a given forum, is a fundamental aspect of legal proceedings. In the context of the IBC, it determines who is entitled to initiate insolvency proceedings, challenge decisions, and participate in the resolution process. This case provides a nuanced understanding of these entitlements, especially in the realm of financial creditors and corporate debtors.

The Role and Standing of Financial Creditors

The initiation of the case by a financial creditor under the IBC highlights their recognized standing in insolvency proceedings. The IBC accords specific rights and responsibilities to financial creditors, including the ability to initiate insolvency proceedings and play a crucial role in the decision-making processes of the CoC.

Challenges to Resolution Plans and the Question of Standing

The challenges to the resolution plan, including applications for extensions and protection of financial interests, bring to the forefront the issue of who has the standing to make such claims. The dismissal of these challenges underscores the rigorous assessment of locus standi in insolvency proceedings.

The Judicial Perspective on Locus Standi

The judiciary’s approach, as seen in this case, reflects a stringent adherence to the principles governing locus standi under the IBC. The courts have consistently upheld the view that only those with a legitimate and direct interest in the insolvency proceedings have the standing to initiate actions or challenge decisions within the framework of the IBC.

Conclusion

This case serves as a critical legal precedent in understanding the nuances of locus standi within the ambit of the IBC. It underscores the importance of recognized legal standing in insolvency proceedings, reinforcing the structured approach towards resolution and liquidation processes.

 

Full Text:

2024 (1) TMI 733 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCH

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