ISSUES:

Whether the imported goods "Unit Assy - BCM" and "Unit Assy - I.B.U." are classifiable under CTH 9032 8910 as "Automatic Regulating or Controlling Instruments and Apparatus" or under CTH 8537 1000 as "Programmable Controllers."Whether the impugned goods qualify as "Programmable Logic Controllers" or "Programmable Process Controllers" for classification purposes.Whether the impugned goods are eligible for exemption under Notification No. 152/2009, Sl. No. 953, attracting 0% Basic Customs Duty (BCD).

RULINGS / HOLDINGS:

The impugned goods are classifiable under CTH 9032 8910 as "Automatic Regulating or Controlling Instruments and Apparatus" and not under CTH 8537 1000 as "Programmable Controllers."The goods qualify as "Programmable Process Controllers" rather than "Programmable Logic Controllers," as they perform continuous monitoring and regulatory functions by comparing input signals with desired values and automatically controlling various automotive body electronics without human interface.The exemption under Notification No. 152/2009, Sl. No. 953 applies, and the demand for differential duty is rightly dropped.

RATIONALE:

The Court applied the legal framework established by the Board's Circular No. 49/3/97-CX dated 09.05.1997, which differentiates between "Programmable Logic Controllers" (PLCs) and "Programmable Process Controllers" (PPCs), emphasizing that PPCs continuously monitor and regulate variables such as flow, pressure, temperature, or electrical quantities to maintain desired values.The impugned goods' functions, including automatic control of vehicle body electronics (e.g., automatic wiper control, cabin climate control, automatic headlights) without human intervention, align with the definition of "Automatic Regulating or Controlling Instruments and Apparatus" under Chapter 90, heading 9032.The Court relied on the detailed functional description in the impugned order, which highlighted that the goods perform regulatory functions by continuously comparing inputs with desired levels and generating output signals, consistent with PPC characteristics rather than PLCs.The Court noted that the impugned goods are "multi-faceted electronic components" that act as a "power distribution centre" and communicate with other electronic control units, further supporting classification under CTH 9032.The decision follows binding precedent affirming the applicability of the Board's Circular and the distinction between PLCs and PPCs, rejecting the argument that the goods are merely "Programmable Controllers" under CTH 8537.No dissent or doctrinal shift was noted; the Court affirmed the impugned order's reasoning and classification approach.

The Appellate Tribunal (ITAT Patna), in an appeal against the CIT(A) order for AY 2019-20, addressed the issue of variation in stock amounting to Rs.18,15,887/- discovered during a survey. The Assessing Officer had applied a Gross Profit (GP) rate of 35.13%, based on the assessee's GP rate for AY 2018-19, which the CIT(A) upheld. The Tribunal noted the assessee's non-cooperation and reviewed GP rates for the preceding four years (AY 2015-16 to 2018-19), averaging approximately 26%, with the assessee declaring 28.34% for the impugned year. Emphasizing "in the interest of justice," the Tribunal held that the GP rate for stock shortage should be fixed at 30%, directing the Assessing Officer to recompute the addition accordingly. The appeal was thus "partly allowed."

ISSUES:

Whether interest earned from investments in co-operative banks is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961.Whether the order passed by the Assessing Officer allowing deduction under section 80P(2)(d) is erroneous and prejudicial to the interests of the revenue, justifying revision under section 263 of the Income-tax Act.

RULINGS / HOLDINGS:

The interest earned from investment in co-operative banks qualifies for deduction under section 80P(2)(d) of the Income-tax Act, consistent with judicial precedents including the High Court of Gujarat and the Hon'ble Supreme Court decisions.A difference of opinion between the Assessing Officer and the Principal Commissioner of Income-tax does not render the assessment order "erroneous and prejudicial to the interests of the revenue" unless the view taken by the Assessing Officer is unsustainable in law; hence, revision under section 263 is not justified in this case.

RATIONALE:

The Court applied the statutory framework of section 80P of the Income-tax Act, 1961, which provides deductions to co-operative societies on income earned from specified sources, including interest from investments in co-operative banks under section 80P(2)(d).Precedents relied upon include the Hon'ble Supreme Court judgments in Kerala State Co-operative Agricultural and Rural Development Bank Ltd. v. Assessing Officer and PCIT v. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited, which clarify the scope of deduction under section 80P and the definition of co-operative banks.The Court referenced the principle from Malabar Industrial Co. Ltd. v. CIT that "every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue," emphasizing that revision under section 263 requires the assessment order to be both erroneous and unsustainable in law.This judgment reflects a doctrinal adherence to the limits on the scope of revisionary powers under section 263, underscoring that mere differences in opinion do not suffice to invalidate an assessment order.

ISSUES:

Whether the order passed under section 263 of the Income Tax Act is valid when the Assessing Officer has not been provided an opportunity of being heard on the issue for which the assessment is set aside.Whether the Principal Commissioner of Income Tax (PCIT) has jurisdiction under the Faceless Assessment Scheme to revise an assessment completed under section 143(3) read with section 144B of the Act.Whether disallowance of deduction under section 80G of the Act on donations made as part of Corporate Social Responsibility (CSR) expenditure is justified.Whether CSR expenditure, being a statutory obligation under section 135 of the Companies Act, 2013, qualifies as a "donation" under section 80G of the Income Tax Act.Whether the restriction on claiming deductions under Chapter VI-A applies to section 80G deductions for an assessee opting for taxation under section 115BAA for the relevant assessment year.Whether the assessment order passed under section 143(3) read with section 144B of the Act is erroneous and prejudicial to the interest of revenue when the Assessing Officer accepted the claim of deduction under section 80G after due inquiry.

RULINGS / HOLDINGS:

The order passed under section 263 without providing an opportunity of being heard on the issue is erroneous and without jurisdiction.The PCIT does not have jurisdiction under the Faceless Assessment Scheme to revise an assessment completed under section 143(3) read with section 144B of the Act by the Faceless Assessing Officer unless the PCIT has jurisdiction under the Faceless regime.Disallowance of deduction under section 80G on donations made as part of CSR expenditure is not justified where the donations fulfill all prescribed conditions under section 80G of the Act.CSR expenditure, despite being a statutory obligation under section 135 of the Companies Act, 2013, does not ipso facto disentitle the assessee from claiming deduction under section 80G of the Act if all other statutory requirements are met.For AY 2020-21, the restriction on claiming deductions under Chapter VI-A for an assessee opting for taxation under section 115BAA did not apply to section 80G deductions, as the relevant amendment was effective only from AY 2021-22.The assessment order passed under section 143(3) read with section 144B of the Act is neither erroneous nor prejudicial to the interest of revenue when the Assessing Officer has examined the return and submissions and passed the order after due notice and reply.

RATIONALE:

The Court applied the statutory provisions of sections 263, 143(3), 144B, 115BAA, and 80G of the Income Tax Act, along with the Companies Act, 2013 (section 135), and relevant amendments effective from AY 2021-22.The Court relied on judicial precedents from various Benches of the Income Tax Appellate Tribunal which held that statutory CSR contributions do not lose their character as donations under section 80G if all conditions are met, and that Explanation 2 to section 37(1) barring CSR expenditure as a business deduction does not affect section 80G deductions.The Court noted that the Assessing Officer had applied mind and conducted due inquiry under sections 143(2) and 142(1) before allowing the deduction, and mere difference of opinion by the PCIT does not render the assessment order erroneous.The Court emphasized that the restriction on deductions under Chapter VI-A for companies opting for concessional tax rates under section 115BAA was not applicable for the relevant assessment year, as the amendment barring such deductions was effective only from AY 2021-22 onwards.The Court held that the assumption of jurisdiction under section 263 requires the assessment order to be "erroneous and prejudicial to the interest of the revenue" and that the AO's order allowing the deduction was a plausible view supported by judicial precedents, hence not warranting revision.

ISSUES:

Whether the approval granted by the Joint Commissioner of Income Tax (JCIT) under section 153D of the Income Tax Act was accorded mechanically without application of mind, thereby vitiating the assessment order.Whether additions to income can be made in assessments under section 153A of the Act in the absence of incriminating material found during search and seizure operations.Whether estimation or extrapolation of income is permissible in search assessments under section 153A of the Act.Whether additions based on statements of third parties are valid in assessments under section 153A when incriminating material is found.Whether expenditure incurred can be allowed as deduction against additions made under section 69C of the Act for unexplained expenditure.

RULINGS / HOLDINGS:

On the issue of mechanical approval under section 153D, the Court held that the approval should not be given "mechanically, without application of mind," and where such mechanical approval is found, it "would vitiate the assessment order itself." However, in the present case, no evidence was produced to show mechanical approval, and a mere covering letter forwarding approval was insufficient to establish non-application of mind. Therefore, the approval was presumed to be lawful and bona fide.Regarding additions in absence of incriminating material, the Court clarified that under section 153A, additions can only be made based on incriminating material found during search and seizure operations. However, once some incriminating evidence is found, the Assessing Officer is empowered to make all other additions irrespective of whether the additions are directly based on the seized incriminating material or not, as per the Supreme Court ruling in PCIT vs. Abhisar Buildwell P. Ltd.The Court upheld the permissibility of estimation or extrapolation of income in search assessments, relying on the judgment in CIT vs. Hotel Meriya, which recognizes that "the assessing officer is authorised and empowered to make block assessment in a judicious manner on the basis of the materials disclosed during search." The Court emphasized that uniform concealment of income during the block period can be presumed based on consistent practices revealed during search.The Court rejected the contention that additions based solely on statements of third parties are invalid where incriminating material is found, affirming the principle that once jurisdiction under section 153A is assumed and incriminating material is found, the AO may assess total income taking into account all material available.Regarding expenditure deduction against additions under section 69C, the Court held that the proviso to section 69C "expressly prohibits the allowance of expenditure as a deduction in case of addition made on account of unexplained expenditure," and therefore no expenditure deduction is allowable in such cases.

RATIONALE:

The Court applied statutory provisions of the Income Tax Act, particularly sections 132, 153A, 153D, and 69C, alongside binding precedents including Supreme Court decisions in Rajesh Kumar vs. DCIT, Sahara India (Firm) vs. CIT, and PCIT vs. Abhisar Buildwell P. Ltd.The Court distinguished the facts of the present case from other decisions where mechanical approval was found, noting the absence of material to prove non-application of mind and reliance on the decision of the Hon'ble Bombay High Court in Chhagan Chandrakant Bhujbal vs. ITO, which emphasized that mechanical approval cannot be presumed merely on timing or location differences.The Court reaffirmed the principle that in block assessments under section 153A, additions must be grounded on incriminating material found during search, but once such material exists, the AO's jurisdiction extends to assess total income including other undisclosed income.The Court recognized the legislative intent behind allowing estimation in block assessments, acknowledging practical difficulties in obtaining documentary evidence for every concealment, as elucidated in CIT vs. Hotel Meriya.The Court noted the statutory prohibition on allowance of expenditure against additions under section 69C to prevent unjustified deductions for unexplained expenditure.No dissenting or concurring opinions were recorded in this judgment.

ISSUES:

Validity and jurisdiction of order passed by CPC under section 143(1) of the Income Tax Act.Eligibility of deduction under section 80P(2)(d) of the Income Tax Act on interest income earned by a cooperative society from fixed deposits with cooperative banks.Justification of charging interest under sections 234B and 234C of the Income Tax Act.Effect of non-compliance by the assessee during appellate proceedings on the merits of the appeal.

RULINGS / HOLDINGS:

The order passed by CPC and confirmed by JCIT(A) is not invalid or bad in law merely because the assessee failed to produce supporting evidence or respond to notices; "Mere claiming that the CPC erred in making the adjustments does not give an edge to the appellant."The assessee is not eligible to claim deduction under section 80P of the Act on interest income earned from fixed deposits with a non-cooperative bank (Bank of Baroda), but is eligible to claim deduction on interest income earned from fixed deposits with a cooperative bank (Ahmedabad District Cooperative Bank), as per settled judicial precedents.The charging of interest under sections 234B and 234C was not specifically upheld or overturned in the judgment, but the appeal was partly allowed on the deduction issue.Non-compliance by the assessee during appellate proceedings, despite multiple notices and opportunities, justifies dismissal of grounds raised without supporting evidence; "Opportunity of being heard is central to any adjudication process but that does not absolve the appellant from non-submission of evidences."

RATIONALE:

The legal framework applied includes section 143(1) (processing of return), section 80P(2)(d) (deduction available to cooperative societies on income from cooperative banks), and appellate provisions under the Income Tax Act.The court relied heavily on recent authoritative judicial precedents from the jurisdictional High Court affirming that interest income earned by a cooperative society from fixed deposits with a cooperative bank is eligible for deduction under section 80P(2)(d) of the Act.The court emphasized procedural compliance and the principle that appellate proceedings require active participation and submission of evidence by the appellant to challenge the validity of the order passed by CPC.The judgment reflects no doctrinal shift but reinforces settled principles regarding the scope of deduction under section 80P(2)(d) and the necessity of procedural adherence in appellate proceedings.

ISSUES:

Whether the adjustment made under Section 143(1) of the Income Tax Act, disallowing exemption claimed under Section 10(23AAA), was lawful and proper.Whether the appellate authority erred in confirming the adjustment without considering alternate exemption claims under Sections 10(25) or 10(38) read with Section 2(38) of the Act.Whether the appellate authority was empowered to adjudicate on alternate legal pleas raised for exemption not claimed in the original return of income.Whether the income was chargeable as "Gross Income" instead of "Net Income" under Section 143(1) of the Act.Whether deduction under Section 57 of the Income Tax Act was rightly disallowed.

RULINGS / HOLDINGS:

The adjustment made under Section 143(1) disallowing exemption under Section 10(23AAA) was procedurally in accordance with law, as the Centralized Processing Centre issued intimation under Section 143(1)(a) proposing the adjustment.The appellate authority erred in not examining the alternate exemption claims under Sections 10(25) or 10(38) read with Section 2(38) of the Act, despite being empowered to do so and the assessee raising such claims at the appellate stage.Appellate authorities are vested with the power to adjudicate on alternative legal pleas raised by the assessee even if such claims were not made in the return of income.The question of charging "Gross Income" instead of "Net Income" and disallowance of deduction under Section 57 were not specifically addressed in the appellate order and thus remain open for consideration.

RATIONALE:

The legal framework applied includes Section 143(1) of the Income Tax Act governing processing and adjustment of returns, and Sections 10(23AAA), 10(25), 10(38), and 2(38) relating to exemptions available to trusts and other entities.Precedent and established legal principle recognize that appellate authorities have jurisdiction to consider alternate claims for exemption raised at the appellate stage, even if omitted in the original return, ensuring substantive justice.The appellate authority's refusal to consider alternate exemptions was a procedural error, as the limited scope of adjustment under Section 143(1) does not restrict the appellate authority's broader adjudicatory powers.The matter was remanded to the Jurisdictional Assessing Officer for fresh examination of alternate exemption claims after providing an opportunity to the assessee to present evidence, without expressing any opinion on the merits.

ISSUES:

Validity of reopening assessment under section 147 read with section 148 of the Income Tax Act, 1961 based on seized ledger recovered during search under section 132.Admissibility and evidentiary value of seized electronic ledger entries (Tally data) reflecting cash and cheque payments for land purchase.Whether unexplained cash payments recorded in seized material constitute unexplained investment under section 69 of the Income Tax Act.Whether denial of opportunity to cross-examine the person in possession of seized material violates principles of natural justice and affects validity of assessment.Whether addition under section 69 can be deleted on account of prior declaration and taxation of the undisclosed income under the Income Declaration Scheme (IDS), 2016.

RULINGS / HOLDINGS:

Reopening of assessment under section 147 read with section 148 was valid as the Assessing Officer had "reasonable belief" supported by tangible, verifiable and corroborated material recovered during search, justifying the reopening.The seized electronic ledger (Tally data) containing detailed narration of cheque and cash payments bearing the assessee's name and matching bank statements and registered sale deed was held to have substantial evidentiary value and was not a casual or generic document nor prepared for educational purposes.The unexplained cash payments of Rs.5.30 crore recorded in the seized ledger but not reflected in the assessee's books constituted unexplained investment under section 69 and were correctly added to income by the Assessing Officer.Denial of opportunity to cross-examine the CFO or author of the ledger did not violate principles of natural justice as the assessee was supplied with the seized material, given opportunity to rebut the entries, and failed to demonstrate any specific prejudice caused by such denial.The addition under section 69 was deleted by the Commissioner of Income Tax (Appeals) on the ground that the assessee had already declared and paid tax on the undisclosed income under IDS, 2016, and taxing the same amount again would result in double taxation, contrary to binding CBDT Circular No. 27/2016 dated 14.07.2016.

RATIONALE:

The Court applied the statutory framework under sections 132 (search and seizure), 143(3), 147, 148, and 151 of the Income Tax Act, 1961, and section 69 relating to unexplained investments.The reopening was upheld based on the Assessing Officer's recorded reasons and sanction, supported by tangible evidence recovered from a party connected to the transaction, consistent with settled law on reasonable belief for reopening assessments.The evidentiary weight of electronic data retrieved during search was affirmed, rejecting the assessee's claim that the ledger was for educational purposes, following principles that contemporaneous electronic records bearing direct links to the assessee's transactions are admissible and reliable.The Court relied on precedent and authoritative rulings, including the principle that denial of cross-examination does not automatically vitiate proceedings absent demonstrated prejudice, as elaborated in the Calcutta High Court decision on natural justice and audi alteram partem principles.The deletion of addition was grounded on the binding CBDT Circular No. 27/2016, which prohibits reopening or reassessment of income declared and taxed under IDS to avoid double taxation, reflecting a doctrinal adherence to the principle against double jeopardy in tax assessments.The appellate authority's power to admit official records such as IDS declaration forms, even if not produced before the Assessing Officer, was recognized as co-terminous with the AO's powers, and such documents do not require further investigation to be relied upon.

ISSUES:

Whether a Bank Guarantee described as a "continuing guarantee" that was not revoked during its currency can be enforced after its stated expiry date without a written claim lodged within the validity period.Whether the failure to lodge a written claim within the validity period of the Bank Guarantee precludes enforcement of the guarantee thereafter.Whether a personal guarantee by a Bank survives the completion of a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.Whether a writ petition under Article 226 of the Constitution is maintainable to enforce a Bank Guarantee against a Bank considered a "State" under Article 12 of the Constitution.

RULINGS / HOLDINGS:

The Bank Guarantee, although described as a "continuing guarantee," includes a clause that limits the Bank's liability to claims lodged in writing on or before the expiry date, and since no such claim was lodged within the validity period, the guarantee cannot be enforced thereafter.The absence of a written claim within the validity period of the Bank Guarantee "precludes the enforcement of the guarantee" and the Bank is "released and discharged from all liabilities" under the guarantee.The argument that a personal guarantee survives the CIRP does not apply because the guarantee had expired prior to the CIRP, and no timely claim was made during its currency.Although ordinarily writ petitions are not entertained for enforcement of contracts such as Bank Guarantees, even if the Bank is considered a "State" under Article 12, no relief can be granted where the contractual conditions for enforcement are not met.

RATIONALE:

The Court applied the contractual interpretation of the Bank Guarantee document, emphasizing the non obstante clause which restricts the Bank's liability to claims made in writing within the guarantee's validity period.The Court relied on the principle that a Bank Guarantee is a contract and must be enforced according to its terms, including limitation periods for claims.The Court noted that the claim was rejected during the CIRP due to limitation and was not challenged, reinforcing that limitation bars belated claims.The Court rejected the submission that personal guarantees survive CIRP where the guarantee itself had expired prior to CIRP initiation.The Court acknowledged the unusual nature of entertaining a writ petition for enforcement of a Bank Guarantee but found no basis to grant relief given the contractual and limitation bar.

ISSUES:

Whether the declared retail sale price of imported goods is liable to be rejected and re-determined under Rule 6 of the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008 read with Section 4A of the Central Excise Act, 1944.Whether the duty exemption claimed under Notification No. 98/2009-Cus dated 11.09.2009 for goods imported against Duty Free Import Authorisation (DFIA) scrips is admissible.Whether the demand of differential duty under Section 28 of the Customs Act, 1962 along with interest is sustainable.Whether the imported goods are liable to confiscation under Sections 111(d), 111(m), and/or 111(o) of the Customs Act, 1962.Whether penalties under Sections 112(a), 112(b), 114A, and 114AA of the Customs Act, 1962 are imposable on the appellant and the Director.Whether statements recorded under Section 108 of the Customs Act are admissible as evidence without compliance with Section 138B of the Customs Act.Whether the imported lacquers were mis-utilized by importing goods meant for wood application instead of leather industry inputs under DFIA scrips.

RULINGS / HOLDINGS:

The declared retail sale price could not be rejected or re-determined as there was no statutory machinery prescribed under the Customs Tariff Act to determine retail sale price for imported goods, and the department failed to demonstrate that the declared price was incorrect; thus, rejection under Rule 6 was not justified.The duty exemption under Notification No. 98/2009-Cus is admissible as the imported lacquers were "capable of being used in the leather industry as well as in the wood industry," and the appellant was entitled to benefit under the DFIA scheme despite the original exporters being leather exporters.The demand of differential duty and interest under Section 28 of the Customs Act is unsustainable due to the incorrect rejection of declared retail sale price and the admissibility of duty exemption under DFIA.The goods are not liable to confiscation under Sections 111(d), 111(m), and/or 111(o) of the Customs Act, as the confiscation was based on statements recorded under Section 108 which were inadmissible without compliance with Section 138B.Penalties imposed under Sections 112(a), 112(b), 114A, and 114AA of the Customs Act are not sustainable as there was no mis-declaration of retail sale price or mis-utilization of DFIA scrips proven against the appellant or the Director.Statements recorded under Section 108 of the Customs Act cannot be relied upon as evidence unless the person making the statement is examined as a witness before the adjudicating authority and the authority forms an opinion to admit such statements in the interests of justice, as mandated by Section 138B; failure to follow this procedure renders such statements inadmissible.The allegation of mis-utilisation of DFIA scrips by importing lacquers meant for wood application instead of leather inputs is rejected based on expert test reports and policy circulars clarifying that alternative inputs capable of being used in export products are permissible under the DFIA scheme.

RATIONALE:

The Court applied the statutory framework under the Central Excise Act, 1944 (Section 4A), Customs Act, 1962 (Sections 12, 14, 28, 111, 112, 114A, 114AA, 138B), and the Central Excise (Determination of Retail Sale Price of Excisable Goods) Rules, 2008, along with the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.The Court relied on precedents establishing that retail sale price determination machinery under the Central Excise Rules does not automatically apply to customs valuation for CVD, and that differential duty demands cannot be raised without prescribed statutory procedure.The Court considered expert chemical test reports and DGFT policy circulars clarifying the flexibility in use of alternative inputs under the DFIA scheme, rejecting narrow interpretations limiting usage only to leather industry.The Court emphasized the mandatory procedural safeguards under Section 138B of the Customs Act for admissibility of statements recorded during inquiry, requiring examination of the witness before the adjudicating authority and an opportunity for cross-examination, to prevent reliance on potentially coerced statements.The Court noted a doctrinal consistency with prior Tribunal decisions affirming that duty exemption under DFIA must be allowed if imported inputs are capable of being used in export products, even if originally issued to exporters of different but related products.The Court rejected the Principal Commissioner's findings where they conflicted with statutory provisions and established case law, setting aside the order imposing duty demands, confiscation, and penalties.

ISSUES:

Whether the observations made by the Tribunal regarding non-cooperation of the suspended directors with the Insolvency Resolution Professional (IRP)/Resolution Professional (RP) and Liquidator are justified.Whether the suspended directors were duly served with notices, summons, and warrants issued by the Adjudicating Authority during the Corporate Insolvency Resolution Process (CIRP) and liquidation proceedings.Whether the appellants were denied the opportunity of being heard, thereby violating the principles of natural justice.Whether the appellants can be considered "aggrieved persons" under Section 61 of the Insolvency and Bankruptcy Code (IBC) to maintain the appeal.Whether the observations recorded by the Tribunal in the impugned order can be interfered with or set aside.

RULINGS / HOLDINGS:

The Tribunal's observation that the suspended directors "have not been cooperating with the IRP/RP and with the Liquidator to provide any statutory books and accounts" and that despite issuance of private notice, summons, and warrants "no one appeared and provided any details" is supported by the record and is justified.The appellants were duly served with notices and communications on their email and postal addresses as per the Ministry of Corporate Affairs (MCA) database, and failure to update their addresses does not absolve them of service; hence, service was effective.The appellants were not denied the opportunity of being heard, and the issuance of coercive process against them demonstrates that the principles of natural justice were not violated.The appellants' claim to be aggrieved persons under Section 61 of the IBC is not sustained, as the appeal appears to be filed primarily to defend criminal prosecution initiated against them rather than genuine grievance against the Tribunal's observations.The observations recorded in paragraph 7(ii) of the impugned order are factual narrations based on material on record and cannot be interfered with or set aside.

RATIONALE:

The Court applied the provisions of the Insolvency and Bankruptcy Code, 2016, including Section 9 (initiation of CIRP), Section 19 (powers of the Adjudicating Authority to summon persons), Section 60(5) (time limit for completion of CIRP and liquidation), Section 61 (appeal to the Appellate Tribunal), and Section 70 (prosecution of officers for non-cooperation).The Court relied on the MCA records to determine the correctness of service of notices and communications to the appellants and emphasized the legal obligation of directors to update their addresses under Rule 12 of the Companies (Appointment and Qualification of Directors) Rules, 2014.The Court noted that the appellants failed to appear despite multiple notices, summons, and coercive processes, and that the Resolution Professional had filed complaints under Section 70 of the IBC leading to criminal prosecution, which is pending adjudication.The Court distinguished the reliance on the Supreme Court decision in Uma Nath Pandey and Ors. v. State of U.P. and Anr., holding that no violation of natural justice occurred as the appellants were given adequate opportunity and process.The Court affirmed that the observations in the impugned order are "narration of facts" necessary for deciding whether to continue liquidation proceedings or order dissolution, and thus are not subject to interference absent any error or illegality.

ISSUES:

Whether the construction work of a Technician Studio provided to a government department qualifies for exemption from Service Tax under Notification No. 25/2012-ST dated 20/06/2012, specifically under Sl. Nos. 12(a) and 12(c)(iii).Whether the construction work of the Science City Exploration Hall qualifies for exemption from Service Tax under Notification No. 25/2012-ST dated 20/06/2012, specifically under Sl. Nos. 12(a) and 12(c)(i).Whether the invocation of the extended period of limitation for demanding Service Tax is justified where the demand is based on discrepancies between 26AS statements, financial statements, and returns filed by the assessee.Whether interest and penalty can be imposed where the demand of Service Tax is not sustainable or where no suppression of information is found.

RULINGS / HOLDINGS:

On the Technician Studio construction, the Court held that the work is exempted from Service Tax as per Sl. Nos. 12(a) and 12(c)(iii) of Notification No. 25/2012-ST dated 20/06/2012, since the structure is predominantly used for purposes other than commerce and promotes art and culture, and occasional commercial use does not disentitle the exemption.On the Science City Exploration Hall construction, the Court upheld the exemption under Sl. Nos. 12(a) and 12(c)(i) of Notification No. 25/2012-ST dated 20/06/2012, recognizing the institution as an educational and non-profit governmental authority despite charging entry fees, rejecting the Revenue's contention that such charges imply commercial use.The Court held that the extended period of limitation cannot be invoked as the demand arose from discrepancies in information voluntarily furnished by the assessee, with no suppression of facts.Interest and penalty confirmed in the impugned order were set aside on the grounds that the Service Tax demand itself was not sustainable and no suppression of information was established.

RATIONALE:

The Court applied the exemption provisions under Notification No. 25/2012-ST dated 20/06/2012, specifically Sl. Nos. 12(a) and 12(c), which exempt services provided to governmental authorities by way of construction of civil structures meant predominantly for non-commercial use or for promotion of art and culture.The interpretation emphasized that "predominantly for use other than for commerce" does not require exclusive non-commercial use; occasional commercial use does not negate exemption.The Court relied on the definition of "governmental authority" under Section 65(26A) of the Finance Act, 1994, and considered the institutional control and objectives of the entities involved to determine the applicability of exemption.Regarding limitation, the Court referenced precedents holding that extended limitation cannot be invoked without suppression of facts, especially when the demand arises from discrepancies in voluntarily filed returns and statements.The Court distinguished commercial motive from mere collection of fees or charges by governmental or educational institutions, referencing Circular No. 80/10/2004-ST and relevant case law to support exemption despite such collections.

ISSUES:

Whether fish procured from fishermen and exported without rearing or breeding qualifies as "agricultural produce" exempt from service tax under relevant notifications.Whether transportation of such fish by Goods Transport Agency (GTA) service is exempt from service tax under Notification No. 25/2012 and related amendments.Whether sales commission paid to overseas commission agents qualifies for exemption from service tax under Notification No. 18/2009 and related notifications, and the applicability of Reverse Charge Mechanism.Whether the appellant's claim that processing of fish to make it marketable does not alter its essential characteristics and thus qualifies for exemption under Section 66D(iii) of the Finance Act.Whether failure to comply with procedural conditions for exemption or refund under relevant notifications constitutes mere procedural lapse or substantive violation attracting extended period and penalty under the Act.Whether the definition and place of provision of "intermediary services" under the Place of Provision of Services Rules, 2012 affects liability to pay service tax on overseas commission agents' services prior to and after 1st October 2014.

RULINGS / HOLDINGS:

Fish procured from fishermen from the sea, without any rearing or breeding by the appellant, does not qualify as "agricultural produce" within the meaning of the relevant notifications; thus, exemption under Sr. No. 21(a) of Notification No. 25/2012 is not applicable.Transportation of such fish by GTA service is not exempt from service tax as it is not agricultural produce, and service tax liability arises subject to the provisions of relevant notifications.Sales commission paid to overseas commission agents attracts service tax under Reverse Charge Mechanism; exemption under Notification No. 18/2009 is conditional and requires compliance with prescribed conditions, which were not fulfilled.Processing of fish by the appellant to make it marketable does not amount to "agriculture" or "agricultural produce" as the appellant is not engaged in pisciculture; hence, exemption under Section 66D(iii) does not apply.Failure to comply with procedural conditions for exemption or refund under Notifications No. 18/2009, 31/2012, and 42/2012 is not a mere procedural lapse but a substantive violation justifying invocation of extended period and imposition of penalty under Sections 78 and 70 of the Act read with Rule 7C of the Rules.Prior to 1st October 2014, commission agent services dealing in goods were governed by Rule 3 of the Place of Provision of Services Rules, 2012, and not Rule 9; thus, the appellant was liable to pay service tax on commission paid to overseas agents for the years 2012-13 and 2013-14.

RATIONALE:

The Court applied the definitions of "agriculture" and "agricultural produce" as per Notification No. 25/2012 and its amendments, interpreting that fish caught from the sea without rearing or breeding does not fall within these terms.The Court relied on the statutory framework under the Finance Act and the relevant Notifications (No. 18/2009, 25/2012, 31/2012, 42/2012), which provide conditional exemptions subject to compliance with procedural requirements such as production of consignment notes and filing of returns.The interpretation of "intermediary" under the Place of Provision of Services Rules, 2012 was examined, noting the amendment effective 1st October 2014 which expanded the definition to include supply of goods; prior to this, commission agent services were taxable under a different rule.The Court distinguished between procedural lapses and substantive non-compliance, holding that failure to follow prescribed conditions for exemption or refund constitutes substantive violation warranting extended period and penalty under the Act.The Court rejected the appellant's reliance on precedents that allowed benefit despite procedural lapses, emphasizing that the present case involves non-payment of service tax and failure to comply with mandatory conditions, not mere procedural irregularity.The Court upheld the Commissioner's factual findings regarding the appellant's non-filing of ST-3 returns and suppression of material facts, supporting the invocation of extended period and penalty provisions under Sections 78 and 70 of the Finance Act read with Rule 7C of the Rules.

ISSUES:

Whether the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 is invokable in the absence of fraud, collusion, wilful mis-statement, or suppression of facts.Whether a bona fide belief in exemption from service tax under Notification No.25/2012-ST can preclude the applicability of extended limitation period.Whether service tax demand can be confirmed when the service recipient is a Government entity and the appellant did not collect or reimburse service tax.Whether recovery of service tax collected from a service recipient can be made without invoking Section 73A of the Finance Act, 1994.Whether penalties under Sections 77 and 78 of the Finance Act, 1994 are sustainable in the facts of the case.

RULINGS / HOLDINGS:

The invocation of the extended period under the proviso to Section 73(1) of the Finance Act, 1994 is unsustainable where there is a "bona fide belief" and "genuine doubt" regarding taxability, and no evidence of fraud, collusion, wilful mis-statement, or suppression of facts exists.The appellant's reliance on the exemption under Notification No.25/2012-ST, supported by the contractual clause and advice from Chartered Accountant, establishes a bona fide belief that precludes extended limitation.Recovery of service tax from the appellant is not sustainable when the service recipient is a Government entity, and there is no provision authorizing Revenue to collect service tax from other Government Agencies.Since the SCN does not invoke Section 73A of the Finance Act, 1994, recovery of service tax purportedly collected from the service recipient cannot be sustained under the present proceedings.The penalties imposed under Sections 77(1)(b), 77(1)(c), and 78 of the Finance Act, 1994 are not upheld due to the absence of suppression or evasion of tax and the unsustainable demand itself.

RATIONALE:

The Court applied the legal framework under the Finance Act, 1994, particularly Sections 73, 73A, 75, 77, and 78, and relied on binding precedents including the Hon'ble Supreme Court's judgment in Padmini Products vs. CCE, which held that the extended period of limitation applies only in cases involving "fraud, collusion or wilful mis-statement or suppression of facts."The Court emphasized that a "genuine doubt" regarding taxability arising from contractual terms and official representations can constitute a bona fide belief, negating intent to evade tax and thus excluding extended limitation.The absence of invocation of Section 73A, which governs recovery of service tax collected from service recipients, was a critical factor in rejecting the demand based on alleged collection of service tax.The Court noted the principle that Revenue cannot arbitrarily collect service tax from one Government entity on account of services provided to another Government entity without statutory authority.No dissenting or concurring opinions were recorded; the decision follows established doctrine with reaffirmation of the limits on extended limitation and recovery powers under the Finance Act.

ISSUES:

Whether service tax is leviable on activities of excavation and removal of overburden and barytes ore amounting to production of ore under the negative list provisions.Whether irregular availment of Cenvat credit is established when input service provider did not pay service tax but invoices were issued and credit was taken and utilized by the appellant.Whether extended period of limitation can be invoked for recovery of service tax and denial of credit in absence of evidence of fraud or willful misstatement.Whether penalty under relevant provisions is sustainable when demand is not upheld on merit and limitation grounds.

RULINGS / HOLDINGS:

Service tax is not leviable on the mining activity of excavation and removal of barytes ore as it amounts to "production of ore" and falls under the negative list under section 66D(f) of the Finance Act, 1994; therefore, the demand for service tax on such activity is unsustainable.Irregular availment of Cenvat credit cannot be sustained merely because the input service provider did not pay service tax; the appellant took credit on bona fide invoices and utilized the same for payment of service tax on output services, making the transaction revenue neutral and lawful.Extended period of limitation is not invokable absent any positive and cogent evidence of fraud, willful misstatement, or suppression with intent to evade tax; mere non-payment of service tax by the supplier does not justify extended period invocation.Penalty under section 78 is not sustainable when the demand itself is not sustainable on merit and limitation grounds.

RATIONALE:

The Court applied the negative list provisions under section 66D(f) of the Finance Act, 1994, which excludes from service tax any service by way of carrying out any process amounting to manufacture or production of goods, relying on authoritative precedents including the Supreme Court decision in CIT Vs Sesa Goa Ltd and coordinate bench rulings.The Court distinguished prior rulings where mining was treated as service rather than manufacture/production, emphasizing the specific facts and nature of the contract leading to the conclusion that mining barytes ore constitutes production of goods.Regarding Cenvat credit, the Court considered statutory provisions including Rule 4(7) of Cenvat Credit Rules, 2004 (effective from 01.03.2015) and earlier case law (Prachi Poly Products Ltd, Spic Pharmaceuticals Division, Bhuwalka Steel Industries Ltd) holding that credit cannot be denied to the recipient due to supplier's default in payment of duty, especially in absence of collusion or fraud.The Court found no credible evidence that invoices were fabricated; doubts raised by investigating agencies were due to lack of corroborative records rather than proof of forgery, and the appellant's books of account and ST-3 returns consistently reflected the transactions.The Court held that the appellant's payment of service tax on output services exceeded the input credit taken, resulting in a revenue neutral position, and thus no recovery or reversal of credit was warranted.Extended period of limitation under section 73 was rejected due to absence of evidence of fraudulent intent or suppression, consistent with Supreme Court authority restricting extended period invocation to cases involving such elements.Penalty under section 78 was set aside as it is consequential on the demand which failed on merit and limitation grounds.

ISSUES:

Whether the extended period of limitation can be invoked for demanding service tax short paid during the period April 2005 to December 2009.Whether penalties under Sections 76, 77, and 78 of the Finance Act, 1994 can be imposed in the absence of "suppression with an intent to evade payment of tax."Whether the demand of service tax prior to the introduction dates of relevant services (Erection/Installation Service from 16.06.2005 and Works Contract Service from 01.06.2007) is tenable.Whether the appellant is entitled to abatement of 67% on the gross value of contracts involving supply and service under Works Contract Service.

RULINGS / HOLDINGS:

The extended period of limitation was invoked to demand service tax for the period April 2005 to December 2009; however, the Revenue failed to establish "suppression with an intent to evade payment of tax," and thus the invocation does not stand the test.Penalty under Section 78 cannot be sustained in absence of "fraud or collusion or wilful mis-statement or suppression of facts or contravention… with the intent to evade payment of service tax," and therefore the penalty under Section 78 was deleted.Service tax demand prior to 16.06.2005 for installation/erection services and prior to 01.06.2007 for Works Contract Service is "ab initio void and liable to be set aside."The appellant's claim for 67% abatement on the gross value of contracts involving supply and service was not considered by the adjudicating authority despite submission of sample work orders and invoices, indicating that the abatement cannot be denied without evidence to the contrary.

RATIONALE:

The Court applied the provisions of the Finance Act, 1994, specifically Sections 73, 76, 77, and 78, which govern service tax demands, penalties, and limitation periods.Section 78 penalty applies only when service tax has been short paid "by reason of fraud or collusion or wilful mis-statement or suppression of facts… with the intent to evade payment of service tax," which was not established here.The Court emphasized that invocation of the extended period of limitation under the proviso to Section 73(1) requires a valid basis of "suppression with intent to evade," which was absent.The Court recognized the statutory dates for introduction of service tax on specific services (installation/erection from 16.06.2005 and Works Contract Service from 01.06.2007) and held demands prior to these dates as invalid.The Court noted the failure of the adjudicating authority to consider the appellant's evidence regarding the nature of contracts and entitlement to abatement, implying a need for proper evaluation of such evidence in tax assessments.

ISSUES:

Whether clandestine removal of excisable goods without payment of duty is established on the basis of recovered documents and statements.Whether the demand of duty and interest under the Central Excise Act, 1944 and imposition of penalty under Section 11AC and Rule 29 of the Central Excise Rules, 2017 is sustainable.Whether documents and records maintained by third parties (transporters) can be relied upon to prove clandestine removal.Whether the supply of relied upon documents (RUDs) and statements to the noticee was adequate and compliant with principles of natural justice.Whether penalty under Rule 29 of the Central Excise Rules, 2017 can be imposed on managerial personnel and transporters without proof of physical dealing with excisable goods and mens rea.Whether the Department discharged the burden of proving clandestine manufacture and removal by investigating procurement of raw materials, use of electricity, manpower, and packaging materials.

RULINGS / HOLDINGS:

The allegation of clandestine removal is not established as it is based on "assumption and presumption only" and not supported by "clinching evidence" such as cash flow or interception by tax authorities.The demand of duty and NCCD based on "dispatch slips," "loading register," and "stock register" is not sustainable due to inconsistencies, mismatches, and lack of authenticity of these documents.Records maintained by third parties (transporters) cannot be relied upon solely to establish clandestine removal; such evidence requires corroboration and independent verification.Non-supply of copies of all relied upon documents (RUDs), including statements and registers, renders the adjudication order invalid and illegal as per the principles laid down in Supreme Court judgments.Penalty under Rule 29 cannot be imposed on persons who did not physically deal with excisable goods or have knowledge or belief that goods were liable to confiscation; managerial personnel and transporters without mens rea are not liable.The Department failed to investigate critical aspects such as procurement of raw materials, electricity consumption, manpower deployment, and packing material supply, which are essential to prove clandestine manufacture and removal.

RATIONALE:

The Court applied statutory provisions under the Central Excise Act, 1944 (Sections 11A(4), 11AA, 11AC) and Central Excise Rules, 2017 (Rule 29) along with established judicial precedents emphasizing the need for tangible and corroborative evidence to prove clandestine removal.Reliance was placed on Supreme Court decisions mandating supply of relied upon documents for fair adjudication and on Tribunal and High Court rulings holding that third-party records alone are insufficient to establish clandestine removal.The Court recognized the principle that penalty provisions require proof of physical dealing with excisable goods and mens rea; general supervisory roles without direct involvement do not attract penalty under Rule 29.Judicial precedents were cited to underscore that findings based on assumption, presumption, or uncorroborated statements violate principles of natural justice and are liable to be set aside.The Court noted the absence of investigation into raw material procurement, electricity usage, manpower, and packing material supply as a doctrinal requirement for proving clandestine manufacture and removal, following the criteria laid down in earlier decisions.No dissenting or concurring opinions were recorded.

ISSUES:

Whether the insertion of the seventh proviso to Section 2(b) of the Maharashtra Entertainments Duty Act (MED Act) 2014, taxing convenience fees charged for online ticket booking as part of "payment of admission," is intra vires the State Legislature under Entry 62, List II of the Seventh Schedule of the Constitution of India.Whether the convenience fee charged for online ticket booking constitutes a separate business activity distinct from entertainment and thus outside the scope of entertainment duty under the MED Act.Whether the impugned proviso violates constitutional provisions including Articles 14, 19, and 246(3) of the Constitution of India.Whether the proviso improperly amends the measure of tax without corresponding amendment to the charging section, thereby exceeding legislative competence or constituting a colourable exercise of power.Whether the convenience fee charged for online ticket booking is a "payment of admission" connected with entertainment and a condition for attending entertainment under Section 2(b)(iv) of the MED Act.Whether there exists adequate procedural machinery under the MED Act to assess, levy, and recover entertainment duty on convenience fees.Whether the impugned proviso and related Circulars dated 31 January 2015 and 27 February 2015 are liable to be quashed.Whether the levy of entertainment duty on convenience fees conflicts with the Union's taxation of services under the Finance Act, 1994, and whether there is impermissible overlap or encroachment on Union List entries.

RULINGS / HOLDINGS:

The impugned proviso inserted by Maharashtra Act XLII of 2014 amending Section 2(b) of the MED Act is intra vires the State Legislature under Entry 62, List II of the Seventh Schedule and does not transgress into the Union List; it validly amends the measure of tax without constituting a new levy or taxing a separate activity.The convenience fee charged for online ticket booking is not a separate business activity distinct from entertainment but forms part of the composite payment for admission to entertainment and is therefore taxable under the MED Act.The convenience fee satisfies the ingredients of Section 2(b)(iv) of the MED Act as a payment "connected with an entertainment" and is a "condition of attending" the entertainment, thus constituting "payment of admission."The proviso excludes convenience fees up to Rs. 10/- per ticket from the definition of payment of admission, while amounts exceeding Rs. 10/- are included, which aligns with the legislative objective to curb exorbitant charges and is not a colourable exercise of power.The procedural machinery under the MED Act, including assessment, collection, and recovery provisions, suffices for entertainment duty on convenience fees; no separate machinery is required.The impugned Circulars merely implement the proviso by calling for data and are not liable to be quashed.The petitioners' challenge based on alleged violation of Articles 14 and 19 and on the ground of lack of uniformity or arbitrariness is rejected as the proviso is reasonable and has a rational nexus with the subject matter of taxation.The levy of entertainment duty on convenience fees does not conflict with the Union's service tax under the Finance Act, 1994, as the two taxes are on distinct aspects-service tax on rendering of service and entertainment duty on admission to entertainment-and can coexist without overlap.The petitioners' reliance on decisions concerning new forms of entertainment or different statutory schemes (e.g., Tata Sky Ltd., PVR Ltd.) is distinguishable and does not apply to the facts of this case.The proviso is not a deeming fiction enlarging the charging section but an exception carved out within the definition of payment of admission.

RATIONALE:

The Court applied the doctrine of pith and substance to determine that the true nature of the levy is on entertainment under Entry 62, List II of the Seventh Schedule, which empowers the State Legislature to tax luxuries including entertainments.The MED Act's scheme defines "entertainment," "payment of admission," and "proprietor," with Section 3 as the charging section and Section 2(b)(iv) providing a wide definition of payment of admission including any payment connected with entertainment as a condition of attending.The proviso to Section 2(b) excludes convenience fees up to Rs. 10/- per ticket from payment of admission, while including amounts above that, reflecting legislative policy to curb excessive convenience charges without taxing a new form of entertainment.The Court relied on precedents holding that the measure of tax does not determine the nature of the tax and that legislative competence includes the power to amend the measure of tax without amending the charging section.The Court distinguished cases relied upon by petitioners where new forms of entertainment were sought to be taxed without corresponding amendments or where the statutory definitions differed materially.The Court emphasized the principle that two taxes on different aspects of the same transaction-service tax by the Union and entertainment duty by the State-are permissible and do not constitute unconstitutional overlap.The Court rejected the argument of colourable legislation, noting that the Statement of Objects and Reasons cannot restrict the plain language of the statute and that legislative motive is irrelevant if the legislature is competent.The Court observed that the convenience fee is integrally connected to the ticket purchase and admission to entertainment, satisfying the statutory definition and legislative intent.The Court upheld the validity of the proviso and related Circulars, finding no procedural or constitutional infirmity.The Court noted that challenges based on lack of uniformity or arbitrariness failed as the classification of persons paying convenience fees online constitutes a reasonable legislative classification.

ISSUES:

Whether the Customs authorities have jurisdiction to question or deny benefit of exemption under the EPCG Scheme after issuance and non-cancellation of Export Obligation Discharge Certificate (EODC) by the Directorate General of Foreign Trade (DGFT).Whether the imported vehicles were used for the intended purpose under the EPCG Scheme as required by the Notification and Foreign Trade Policy.Whether statements recorded under section 108 of the Customs Act can be relied upon without following the procedure prescribed under section 138B of the Customs Act.Whether penalties under section 112(a) of the Customs Act can be imposed in the absence of valid evidence and proper procedure.Whether the demand of customs duty and penalties is sustainable when the export obligation has been certified as fulfilled by the DGFT.

RULINGS / HOLDINGS:

The Customs department does not have jurisdiction to sit in judgment over the EODC issued by the DGFT; once the DGFT has issued and not cancelled the EODC, the Customs authorities cannot deny exemption or demand duty on the ground of alleged non-fulfillment of export obligation. The Court held that "it would be wholly impermissible for the customs authorities to either doubt the validity of an instrument issued under the FTDR Act or go behind benefits availed pursuant thereto absent any adjudication having been undertaken by the DGFT."The finding that the vehicles were not used for the intended purpose, based solely on statements recorded under section 108 of the Customs Act without following section 138B procedure, is not sustainable. The Court held that "the statements made under section 108 of the Customs Act cannot be relied upon if the procedure followed under section 138B of the Customs Act is not followed."Statements recorded under section 108 of the Customs Act are relevant only if the person making the statement is examined as a witness before the adjudicating authority and the authority forms an opinion that the statement should be admitted in evidence, with opportunity for cross-examination. The Court emphasized that "the provisions of section 9D of the Central Excise Act and section 138B(1)(b) of the Customs Act have been held to be mandatory and failure to comply with the procedure would mean that no reliance can be placed on the statements."Penalty under section 112(a) of the Customs Act cannot be imposed when the foundational evidence is inadmissible and the export obligation has been fulfilled as certified by DGFT.The demand of customs duty and penalties is set aside in view of the valid EODC issued by DGFT and absence of any cancellation or adverse adjudication by DGFT. The Court held that "once the EODC was received, the duty demand is not sustainable."

RATIONALE:

The Court applied the statutory framework under the Customs Act, 1962, the Foreign Trade (Development & Regulation) Act (FTDR Act), and the Foreign Trade Policy (FTP), particularly the EPCG Scheme and related Notifications. It relied on the principle that the DGFT is the competent authority to administer and adjudicate export obligations and related certificates under the FTDR Act, and Customs authorities cannot override or question such instruments absent DGFT adjudication.The Court followed binding precedents including the Supreme Court's decision in Titan Medical Systems and the Delhi High Court's decision in Design Company, which establish that Customs authorities cannot refuse exemption or question the validity of DGFT-issued certificates without DGFT's prior cancellation or adjudication.The Court emphasized the mandatory procedural safeguards under sections 108 and 138B of the Customs Act (and corresponding provisions under the Central Excise Act) regarding admissibility of statements recorded during inquiry. It recognized that statements recorded during investigation may be coerced and thus require examination and opportunity for cross-examination before being admitted as evidence.The Court rejected the Customs authority's reliance on statements made under section 108 without compliance with section 138B, holding that such reliance violates mandatory procedural requirements and renders the evidence inadmissible.The Court underscored that the EPCG Scheme's export obligation is to earn foreign exchange through use of imported capital goods, and fulfillment of such obligation is certified by DGFT through issuance of EODC. Absent cancellation or adverse finding by DGFT, Customs cannot impose duty or penalties on the importer.

ISSUES:

Whether the suit is barred for non-compliance of Section 80 of the Code of Civil Procedure (CPC) requiring prior notice before instituting a suit against a Public Officer.Whether the suit is barred under Section 34 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) due to the jurisdiction of the Debts Recovery Tribunal (DRT) over the subject matter.Whether the pendency of winding up proceedings under the Companies Act, 1956 (1956 Act) operates as a bar to the suit before the Civil Court.Whether the suit is maintainable at the instance of the alleged authorised representative who affirmed the verification and affidavit of the plaint during the pendency of winding up proceedings.Whether the pendency of the Corporate Insolvency Resolution Process (CIRP) and the submission of a Resolution Plan affect the maintainability of the suit before the Civil Court.

RULINGS / HOLDINGS:

The suit was barred under Section 80 of the CPC for non-compliance of the mandatory two months' prior notice requirement to the Official Liquidator (O/L), who qualifies as a "Public Officer" within the meaning of Section 2(17), clauses (g) and (h) of the CPC. However, this bar is a "formal defect" permitting withdrawal of the suit with liberty to sue afresh.The suit was not barred under Section 34 of the SARFAESI Act as the plaint did not disclose any measures taken under Section 13(4) of the Act, which is a precondition for the DRT's jurisdiction and the bar under Section 34. The principal relief for damages/compensation for negligence in preserving company property lies outside the limited jurisdiction of the Tribunal under the SARFAESI Act.The pendency of winding up proceedings under the 1956 Act does not oust the jurisdiction of the Civil Court to entertain the suit, as the 1956 Act lacks a provision equivalent to Section 430 of the Companies Act, 2013, which bars Civil Court jurisdiction. Sections 448(6)(c), 460(6), and 543 of the 1956 Act do not confer exclusive jurisdiction on the Company Court to the exclusion of the Civil Court.The suit cannot be rejected for being instituted by the alleged authorised representative during winding up proceedings since partial rejection of plaint is impermissible. The representative could represent the guarantors, who have an independent cause of action, even if not authorised to represent the company in liquidation.The pendency of CIRP and the submission of a non-approved Resolution Plan do not bar the suit filed by guarantors seeking damages/compensation against third parties. The suit operates independently and does not conflict with the interests of the corporate debtor or the CIRP under the Insolvency and Bankruptcy Code, 2016 (IBC).

RATIONALE:

The Court applied the definition of "Public Officer" under Section 2(17) of the CPC and the statutory scheme of the 1956 Act, which vests control over the O/L in the Central Government, to conclude that the O/L is a Public Officer for purposes of Section 80 of the CPC. Non-compliance of the mandatory prior notice under Section 80 is a formal defect, allowing withdrawal and re-filing.The Court confined its consideration under Order VII Rule 11 CPC to the pleadings in the plaint and rejected reliance on extraneous affidavits or applications. The Court interpreted Section 34 of the SARFAESI Act as a bar only when measures under Section 13(4) have been taken and challenged before the DRT under Section 17, which was not pleaded. The principal relief for damages is outside the Tribunal's limited jurisdiction, which relates only to enforcement measures under SARFAESI.The Court undertook a comparative statutory interpretation between the 1956 Act and the 2013 Act, noting the absence of a provision equivalent to Section 430 of the 2013 Act in the 1956 Act. It held that the Company Court's jurisdiction under the 1956 Act is concurrent and not exclusive, and the Civil Court retains jurisdiction unless expressly barred. The ejusdem generis principle was applied to interpret the scope of Section 460(6) of the 1956 Act as limited to acts related to administration and distribution of assets, not to claims for damages.The Court recognized the settled principle that a plaint cannot be partially rejected and that the representative's lack of authority to represent the company does not affect the maintainability of the suit insofar as the guarantors are concerned, who have a separate cause of action and valid representation.The Court examined the provisions of the IBC, particularly Sections 14, 17, 31, and 180, holding that the moratorium under Section 14 does not bar suits by guarantors for damages against third parties. The Resolution Plan's lack of approval by the Adjudicating Authority means it has no binding effect. The Court also emphasized the limited scope of appellate review against rejection of plaint under Order VII Rule 11 CPC and declined to entertain new grounds not raised before the Trial Court.