|
Advanced Search Options
Case Laws
Showing 461 to 480 of 1658 Records
-
2024 (10) TMI 1198
Disallowance u/s 80P(2)(a)(i) - interest received from Bank of Baroda (on FDR) - Assessee submitted that the assessee was carrying on business of providing credit facilities to its members and, therefore, it was eligible for deduction - also surplus funds were invested in FDRs with Bank of Baroda and, therefore, the interest received on such FDRs was part of business activity of the society and should have been allowed as deduction - HELD THAT:- The provision of Section 80P(2)(a)(i) of the Act stipulates that the income derived by a cooperative society engaged in carrying business of banking or providing credit facilities to its members shall be allowed as deduction. The assessee is not engaged in banking business. Further, the interest earned by the assessee on the FDRs made with Bank of Baroda cannot be held as income derived from providing credit facilities to its members. Therefore, the AO had rightly treated this interest income as ineligible for deduction u/s. 80P(2)(a)(i) of the Act.
As in the case of State Bank of India [2016 (7) TMI 516 - GUJARAT HIGH COURT] had categorically held that investing the surplus funds with State Bank of India was no part of business of providing credit to its members and that the character of the interest derived on FDRs with Banks was different from the income attributable to the business of the society of providing credit facilities to its members. No merit in the ground as taken by the assessee and interest derived by the assessee on FDR with Bank of Baroda was rightly disallowed u/s. 80P(2)(a)(i).
Alternate claim of the assessee to allow pro-rata expenses on earning this interest - In the present case, the AO had already examined this contention of the assessee and given a categorical finding in the assessment order that the assessee was not eligible for proportionate interest expenditure as the assessee had not made any expenditure towards earning of this interest income from the above bank/institutions. In order to be eligible for any deduction in respect of earning of interest on FDRs, the assessee has to first establish that it had incurred certain expenditure for earning this income. No such evidence has been brought on record. Further, the assessee has also not controverted the findings as given by the AO. Under the circumstances, we do not find any merit in the claim of the assessee to allow proportionate expense.
Disallowance u/s. 80P(2)(d) - AO held that the interest earned on the deposit with Cooperative Bank was not allowable as deduction - whether the investment made by the assessee, which is a cooperative society, with a cooperative bank, shall be considered as investment with other cooperative society in order to avail the deduction u/s 80P(2)(d) ? - HELD THAT:- It is clear from the amended order of Katlary Kariyana Merchant Sahkari Sarafi Mandali Ltd. [2022 (1) TMI 1309 - GUJARAT HIGH COURT] that the interest derived on FDRs with other cooperative banks will now be eligible for deduction u/s. 80P(2)(d) of the Act. In view of the amended order of the Jurisdictional High Court and also the fact that the cooperative banks are registered as cooperative societies, the disallowance of interest derived by the assessee from The Mehsana District Central Co-operative Bank Ltd. cannot be sustained. Therefore, the disallowance u/s. 80P(2)(d) of the Act is deleted. The ground taken by the assessee is allowed.
-
2024 (10) TMI 1197
Penalty u/s 234E - late filing of TDS Form 26QB - HELD THAT:-CIT(A) has given a finding that through the purchase consideration paid by the assessee was less than Rs. 50 Lakhs, the stamp duty valuation of the property was Rs. 1,41,46,475/-, which was more than 50 Lakhs and, therefore, the assessee could not have claimed exemption u/s.194IA(2).
This observation of the CIT(A) is not found to be correct. The deduction of TDS u/s.194IA of the Act at the relevant point of time, when the transaction was made by the assessee, was required to be made on the amount of payment as made by the assessee.
The provision for TDS u/s.194IA of the Act on the stamp duty value of the property was introduced w.e.f. 01.04.2022 i.e. after transaction was already completed by the assessee.
It is found that the assessee was not liable to deduct any TDS u/s.194IA of the Act. And when the assessee was not liable to deduct the TDS under the provision of the Act, no penalty u/s.271E of the Act can be imposed for late filing of TDS return. Therefore, the penalty of as imposed u/s.234E of the Act is cancelled. Appeal of the assessee is allowed.
-
2024 (10) TMI 1196
Condonation of delay in filing appeal - Ex-parte dismissal of appeal by the first appellate authority - HELD THAT:- Assessee explaining the reasons of delay occurred in instituting the present appeal and reasons behind his non-compliance before first appellate authority capable of suggesting that such non-compliance was accidental & undeliberate. After vouching the reasons behind such accidental & undeliberate non-compliance, in the larger interest of justice we are of the view that the assessee for sufficient reasons prevented from representing himself before Ld. NFAC.
Relying on judgement in ‘St. Paul’s Anglo Indian Education Society’ [2003 (2) TMI 41 - PATNA HIGH COURT] we are mindful to hold that the appellant assessee was deprived of reasonable opportunity and time to produce all relevant documents to substantiate his claims therefore any adjudication without such evidential documents would be violative of principle of natural justice and rendered itself irregular, thus deserving to be set-aside. In the event and in view of the aforestated discussion we deem it proper to accord one more opportunity to the assessee to place evidential material before the Ld. NFAC. Appeal allowed for statistical purposes.
-
2024 (10) TMI 1195
Ex-parte dismissal of appeal by Ld. NFAC - unexplained SBN deposited into bank account - assessee decided to settled the tax dispute through Vivad Se Vishwas Scheme - rejection of books and determination of income - as submitted due to confusion created by erstwhile tax consultant who advised to opt for VSVS in place of prosecuting pending appeal, the appellant could neither pressed evidential documents filed by her in support of grounds raised nor could communicate her choice to continue VSVS - HELD THAT:- The burden of proof that the SBN deposited into bank account do not represent the income was on the claimant assessee and failure to discharge such burden with convincing & entrenched evidence may in view of decision in ‘Shashi Garg Vs PCIT’ [2019 (7) TMI 410 - SC ORDER] entitles the Revenue to assess the same as unexplained income.
However, we note that owning to bonafied confusion the appellant could cause no appearance & on other hand disregarding the appellant’s written submissions Ld. NFAC dismissed the appeal ex-parte. Having considered the facts of the case holistically, in the larger interest of justice, we deem it to grant one more opportunity to the assessee by remitting the file to the Ld. NFAC for de-novo adjudication & decide the issue afresh.
-
2024 (10) TMI 1194
Denial of exemption u/s 11 - excessive payments on account of salary and rent to the persons specified u/s 13(3) - disallow the payments made to specified persons - HELD THAT:- As seen from the first chart that the rent paid by an unrelated party in the same area is Rs.7.83/- per sq. ft. whereas the same was Rs. 7.02/- per sq. ft., till 31/03/2016 and Rs. 2.75/- per sq. ft. as on 31/03/2017 by the assessee. Similarly, rent paid to Tara Meera Education Trust by unrelated party come to Rs. 176.47/- per sq. ft. per month and the rent paid by the assessee for the same premises is Rs.147.06/- per sq. ft. per month.
While completing the assessment for AY 2018-19, the AO has referred to an agreement but the same was for a different premise in the same locality and not the premise for which the assessee has paid rent. Therefore, the AO proceeded on appreciation of wrong facts.
Thus, we do not find the impugned payments to be excessive or unreasonable - Decided in favour of assessee.
-
2024 (10) TMI 1193
Rejection of Regular bail - offences punishable under Section 8 (c) read with Sections 21 (c), 23 (c), 28 and 29 of the N.D.P.S. Act read with Section 135A of the Customs Act - HELD THAT:- On going through the orders of the pending trial thereby it reveals that the case is pending consideration of the application of discharge filed by accused No. 2. Looking to the period of incarceration of the petitioner, which is more than 5 years and the trial may take time to conclude, this petition is allowed and the petitioner is directed to be released on bail on furnishing the suitable bail bonds and sureties and on such other terms and conditions as may be deemed fit by the trial court.
Petitioner to abide all the conditions as imposed and shall regularly attend the trial until exempted by the court. Violation, if any, may give a cause to take recourse as permissible and the trial court is at liberty to do the needful.
The Special Leave Petition stands allowed.
-
2024 (10) TMI 1192
Challenge to the public notice dated 24 June 2024 including Clause 3 (ii) of the said notice - entitlement to clear the goods for home consumption after availing the benefit of Notification No. 46/2011 Customs dated 01.06.2011 in regard to the goods imported by the Petitioners - HELD THAT:- It is apparent that Clause 3 (ii) only requires the importer to furnish or include an explanation for the identical FOB values mentioned in the two documents, viz. FTA-COO and the third country invoice at the time of submission of the self-assessed bill of entry. This clause will apply only in case of identical FOB values and not in all other cases. Nothing in this clause militates against the 2009 Rules as was sought to be suggested. This explanation is called for only to enable the proper officer to assess and verify compliance with the 2009 Rules or other relevant rules applicable to the transaction in question.
The requirement in Clause 3 (ii) does not infringe upon any rights of the Petitioner. Suppose the Petitioner fulfils the requirements of the 2009 Rules or other rules as may be applicable. In that case, there is no reason why the Petitioner will be denied the benefits under the preferential trade agreements - there are no illegality in Clause 3 (ii) of the public notice. No provision has been shown which would as an interdict or render ultra vires the explanations sought in terms of Clause 3 (ii) of the public notice dated 24 June 2024. The requirement in this clause does not affect the Petitioner's statutory entitlement.
By challenging the public notice, the Petitioner cannot seek a direction to assess the bills of entries at Exhibits ‘F’, ‘G’ and ‘H’ by directly granting the Petitioner the benefit of the Customs notification dated 1 June 2011. The explanation that the Petitioner furnishes will indeed be considered - by filing a Petition to challenge the public notice itself, no omnibus relief as applied can be granted. Each transaction must be considered on its own merits given the facts disclosed, and the compliance reported.
This petition cannot be entertained - the issue of the Petitioner's entitlement or otherwise to the benefits of the preferential trade agreements will have to be considered in accordance with the law, the relevant notifications, and the rules - petition dismissed.
-
2024 (10) TMI 1191
Seeking declaration that the Petitioner is not required to obtain NOC from the Narcotics Commissioner (Respondent No. 2) for exporting its product, namely ADCOTE 545S containing Methyl Ethyl Ketone (MEK) - Whether ADCOTE 545S, which contains Methyl Ethyl Ketone (MEK), is covered under Schedule-B of the 2013 Order. - confiscation - penalty.
HELD THAT:- The Customs authorities issued the Show-cause notice. The Assistant Narcotics Commissioner’s communication only conveys the Commissioner's opinion to the Deputy Commissioner of Customs. When adjudicating the show cause notice, the Petitioner will have full opportunity to comment upon such opinion or its correctness. However, insisting that this Court carry out this exercise while examining the validity of a show cause notice would not be appropriate.
The circumstance that this Petition was instituted before the issue of show cause notice is entirely irrelevant. Based on the pleadings, it is doubtful whether the relief of declaration that no NOC from the Narcotics Commissioner was required, to be granted. In all probabilities, we would have relegated the Petitioner to respond to the eventual show cause notice that would have to be issued to the Petitioner. Now that a show cause notice has been issued, there is no case made out to deviate from the usual rule of exhaustion of alternate remedies.
In Special Director and Another Vs. Mohd. Ghulam Ghouse and another [2004 (1) TMI 378 - SUPREME COURT] the Hon’ble Supreme Court has held that unless the High Court is satisfied that the show-cause notice was totally non-est in the eye of the law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine. The writ petitioner should invariably be directed to respond to the show cause notice and take all the grounds that may now be highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which the recipient of the notice can even urge, and such issues also can be initially adjudicated by the authority issuing the very notice, before the aggrieved party approaches the Court.
In Mahanagar Telephone Nigam Ltd. Vs. Chairman Central Board, Direct Taxes and another [2004 (5) TMI 7 - SUPREME COURT], the Hon’ble Supreme Court held that it was settled law that the litigation against show cause notices should not be encouraged. The Court approved the decision of the High Powered Committee, which was eminently fair and aimed at preventing frivolous litigation. The Court held that the appellant’s right was not affected. It was clarified that the appellant could move a court of law against an appealable order. By not maintaining discipline and abiding by the decision, the appellant had wasted the public money and time of the courts.
This Petition is dismissed with the liberty to reply to the show cause notice and face the adjudication proceedings.
-
2024 (10) TMI 1190
Levy of penalties u/s 114 and 114AA of Customs Act, 1962 - failure to follow procedure u/s 138B of the Act - wrong interpretation of Section 138B of the Customs Act,1962 - denial of exporter’s request to permit the cross examination of the Chemical Examiner - setting aside the order without any remand and opportunity to the Department to allow cross examination - no cogent and convincing reason mentioned by the Adjudicating Authority for denial of cross examination of CRCL officer.
HELD THAT:- It is clear from the plain reading of the impugned order that the CESTAT had allowed the appeals on the sole ground that the statements, which formed the foundation of the order-in-original dated 23.11.2011 could not be used as relevant for proving the allegations against the respondents, in view of Section 138B of the Act. The exporter was given no opportunity to cross-examine any of the person whose statement was sought to be relied upon. The said persons were not examined by the Court and the Court had not expressed any opinion that the statements ought to be admitted, as contemplated under Section 138B (1) (b) of the Act.
The question whether a person against whom a statement is relied upon ought to be given an opportunity to cross-examine the person who has made the statement was the subject matter for consideration by the Coordinate Bench of this Court in BASUDEV GARG, ARUN GUPTA, ANIL GOEL VERSUS COMMISSIONER OF CUSTOMS [2013 (5) TMI 350 - DELHI HIGH COURT] where it was held that 'The circumstances referred to in section 9D, as also in section 138B, included circumstances where the person who had given a statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay and expense which, under the circumstances of the case, the court considers unreasonable. It is clear that unless such circumstances exist, the noticee would have a right to cross-examine the persons whose statements are being relied upon even in quasi-judicial proceedings.'
Undisputedly, there are circumstances where statements can be relied upon notwithstanding that the persons against whom the said statements are relied upon have not been afforded any opportunity to cross-examine the persons, who have made the statements. However, undisputedly, the record does not indicate that any of such circumstances existed in the facts of the present case. It is also material to note that the report of the Chemical Examiner was merely a conclusion and did not contain any analysis on the basis of which the conclusion was drawn. Clearly, in such circumstances, the exporter ought to have been provided an opportunity to cross-examine the Chemical Examiner.
Thus, no substantial question of law arises in the present appeals - appeal dismissed.
-
2024 (10) TMI 1189
Classification of imported goods - Poly Crystalline Silicon (C-Si), Solar Photovoltaic Modules (Solar Modules) - to be classified under CTH 85414011 or under CTH 8501 of the Customs Tariff Act? - burden to prove - HELD THAT:- The fact that the Solar Modules imported by the Appellant did contain bypass diodes has not been disputed by the Adjudicating Authority or before us during the hearing.
It is settled law that burden to prove classification is on the revenue and the department has tried to discharge the same burden by placing reliance on the test report provided by IIT Kanpur Test Report. As per the said report it is certified that the sample of solar panel is equipped with simple elements (for example, diodes to control direction of the current) which can supply electric power directly to an external DC load. Further the said report clarifies that the supporting field test reports of the panel was to illustrate the typical V-I characteristics of the solar panel and the panel is not equipped with any type of convertor/regulator for trolling the generated power. In addition, there is no storage device integrated with the solar panel.
This clearly shows that the test report is not conclusive and cannot be relied upon for determining classification in the present case in as much as the expert agency has admitted that the required test to find out if the solar modules had passing diodes is not possible at the laboratory. Further despite approaching Department of Electrical Engineering, IIT Kanpur the department was informed that the test could not be carried out due to non availability of samples. It can therefore be stated that the imported goods were not tested on vital parameters as clarified in circular issued by the board and accordingly the contention of the Appellant that the test report of IIT Kanpur cannot be taken as a conclusive document to determine whether the solar modules were capable of transferring power to external load merits acceptance.
While the Department has failed to substantiate its stand of classifying imported solar modules under CTH 8501, the Appellant has submitted evidence in favour of classification under CTH 8541.
In the present case having accepted the classification of similar goods, the department cannot be permitted to take a contra stand more so in absence of any evidence in support of the purported different stand. The said stand further appears to be contrary to the clarification issued by CBIC which was binding on the department.
The demand under Section 28 cannot be confirmed in absence of finalisation of assessment, and are of the view that the same is settled in their favour in view of various decisions placed in compilation filed during the hearing.
The Solar Panel imported by the Appellants merit classification under CTH 8541 and as a result the impugned orders in the captioned Appeals are set aside - appeal allowed.
-
2024 (10) TMI 1188
Confiscation - penalty - Interception of certain consignments in the Air Cargo Complex, Hyderabad which were being carried by the Courier companies - burden to prove - deatils not considered properly before passing impuned order - violation of principles of natural justice - HELD THAT:- The entire case is decided by the Adjudicating Authority in a very cryptic manner without going into detail as far as the defence taken by the appellant is concerned. One of the major point which appellants have been claiming is that the gold in question was procured from legitimate source as also supply of the gold was being made as a legitimate business transaction. This aspect has not been dealt with at all by the Adjudicating Authority and very cryptic remark has been made to dismiss the defence. The claim that it’s a remelted gold and that duty paid invoice has been given to Courier company has also not been examined. When in a statement recorded under Section 108 of Customs Act 1962, someone gives evidences, it has to be carefully evaluated and it’s authenticity or otherwise has to be examined.
The Adjudicating Authority should have examined all the documents and submissions and then taking up the issue of authenticity with regard to the claim that the gold were procured from legitimate source following prescribed procedure before coming to the conclusion that the said gold was of foreign origin.
It is also on record that when the assayer has made a disclaimer that he is not in a position to say whether gold is of foreign origin or otherwise, how Commissioner (Appeals) can say that he has certified the gold to be of foreign origin. A cryptic common and general order passed for all the persons, without appreciating factual matrix and evidence adduced by each of the appellants, would not be correct and may tantamount to nonapplication of mind.
In the present case, the impugned order is clearly not a speaking order nor it appears to have followed the principles of nature justice in true spirit of the doctrine.
The matter is required to be remanded back to the Original Adjudicating Authority - Appeal allowed by way of remand.
-
2024 (10) TMI 1187
Applicability of Customs Duty exemption under Notification No. 12/2012-Cus for imports made prior to and after the amendment by Notification No. 06/2017-Cus. - applicability of depreciation provisions under Clause (e) of Condition 40A post-amendment - HELD THAT:- Notification 12/2012 as it stood prior to 02 February, 2017 did not contain the Clause (e) in the Condition No. 40A. The law as it stood prior to 02 February, 2017 has been interpreted in various decisions - In the case of CLOUGH ENGINEERING LTD. VERSUS COMMISSIONER OF CUS. (IMPORT) , MUMBAI [2005 (10) TMI 173 - CESTAT, MUMBAI] it was held that 'he appellants are eligible to the benefit of Notification No. 21/2002 and hence confiscation duty demand and penalty are not sustainable, and accordingly set aside the same.'
The said decision was approved by the Hon’ble Apex Court in the case of COMMISSIONER VERSUS CLOUGH ENGINEERING LTD. [2006 (8) TMI 597 - SC ORDER]. The aforementioned decisions were made in respect of Notification No. 21/2002-Cus which provided similar exemption as in case of 12/2012- Cus. The aforementioned decision is equally applicable to the facts of the case in respect of Notification No. 12/12- Customs as it stood prior to 02 February, 2017. In view of the above, the demand in respect of imports made vide Bill of Entry dated 24 January, 2017 is set aside.
The facts in the instant case are that the appellant had imported certain goods, as certified by DGSC and had put most of the goods in use for the stated purpose. A part of the goods were leftovers. It is found that the facts in the instant case are significantly different from the facts in the case of M/S JAGSON INTERNATIONAL LTD., OIL & NATURAL GAS CORPORATION LTD. VERSUS C.C. -JAMNAGAR (PREV.) [2018 (9) TMI 196 - CESTAT AHMEDABAD] where the importer had failed to fulfil the necessary conditions of place by ONGC. In view of the above, the reliance on the decision of Tribunal in the case of Jagson International ltd, in the impugned order is not correct.
After introduction of Clause (e) in Condition 40A by Notification No. 06/2017 dated 02 February 2017, the duty became payable on the leftover goods imported for the petroleum operations or for coal bed methane operations. However, the said notification also prescribed the rate of depreciation at which the goods will be valued.
It is seen that in the instant case does not involves any violation of Section 111 of the Customs Act and the notification itself foresees the possibility of leftovers and disposal thereof. In these circumstances, we do not find any reason for confiscation of goods or imposition of penalties on anyone.
The impugned order is set aside and the matter is remanded to the original adjudicating authority for fresh decision - Appeal allowed by way of remand.
-
2024 (10) TMI 1186
Refund claim - principles of unjust enrichment - documentary evidence with the application did not suffice to overcome the presumption, under section 28D of Customs Act, 1962, of ‘having passed on the incidence’ of the excess duty collected in the sale of goods manufactured by them - non-application of mind - HELD THAT:- There are three inherent flaws in the impugned order. While the refund sanctioning authority was satisfied that the certificate of chartered accountant sufficed for the purpose of determining that incidence of duty had not been passed on, the first appellate authority found the same certificate to be deficient for want of such treatment from the year of provisional assessment and has placed on record absence of any other evidence having been submitted for discharge of onus. Consequently, without affording opportunity to the assessee to make good the then revealed gaps, the impugned order has gone on to hold that the assessee had been unjustly enriched.
Moreover, in directing recovery for credit in the Fund, the impugned order has not indicated the means to be adopted – while section 28 of Customs Act, 1962 is the explicitly available facility for recovery of erroneously granted refund, it is moot if an appellate authority can step into the shoes of the ‘proper officer’ contemplated therein or supplant the application of mind inherent in such jurisdiction. It is also moot if action under section 142 of Customs Act, 1962 initiated by anyone other than ‘proper officer’ or authority designated therein is valid in law.
The present dispute may, in effect, be restated to posit that the case of customs authorities is that imported goods have been used in the year of procurement for manufacture and conversion into sale value in the selfsame year. The impugned order has not disputed the provisioning as ‘receivables’ in 2019-20 and has accepted the certificate of chartered accountant to that effect. The appeal of Commissioner of Customs did not dispute it either.
The backbone for discard of the claim is the purported inadequacy of certificate for not attesting to concurrence of provisioning with the period of dispute and that, in the absence of scrutiny of sale invoice, kicks in the presumption of section 28D of Customs Act, 1962 on the back of the decision of the Hon’ble Supreme Court in COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY & ORS. [2018 (7) TMI 1826 - SUPREME COURT]. On the finding that sale invoice considered by the first appellate authority is not liable to be brought into existence at that stage of proceedings and the presumption in law intended for different context, that the decision on strict interpretation of exemption notification has been misconstrued in the impugned order and that certificate has merely to attest transfer to ‘receivables’ as sufficing to cross the bar of ‘unjust enrichment’, the impugned order lacks validity.
The order of the original authority stands restored along with setting aside the order of the first appellate authority.
-
2024 (10) TMI 1185
Locus of the appellant before the Court - inherent powers under Rule 11 of the NCLAT Rules 2016 - adequate addressing of objections raised by the appellant or not - discretionary power under Rule 11 of the NCLAT Rules 2016.
Whether the appellant, who is not a party to the settlement between the second respondent and the Corporate Debtor, has locus in the proceedings before this Court? - HELD THAT:- Section 62 of the IBC stipulates that “any person” who is aggrieved by the order of the NCLAT may file an appeal before the Supreme Court within the prescribed limitation period. Similar language is used in Section 61 of the IBC, which provides for appeals to NCLAT from orders of the NCLT.50 The use of the phrase “any person aggrieved” indicates that there is no rigid locus requirement to institute an appeal challenging an order of the NCLT, before the NCLAT or an order of the NCLAT, before this Court. Any person who is aggrieved by the order may institute an appeal, and nothing in the provision restricts the phrase to only the applicant creditor and the corporate debtor - The appellant who claims to be a Financial Creditor, has expressed reasonable apprehensions about the prejudice it would face if there were roundtripping of the funds, and the prioritization of the debts of the second respondent, an operational creditor.
The appellant had moved an application before the NCLAT seeking impleadment as a respondent and the objections of the appellant were specifically recorded and addressed in the Impugned Judgement. Therefore, there is no doubt that the appellant falls within the ambit of the phrase “any person aggrieved” and has the locus standi to institute the present Civil Appeal before this Court.
Whether the NCLAT erred in invoking its inherent powers under Rule 11 of the NCLAT Rules 2016 in the presence of a prescribed procedure for withdrawal of CIRP and settlement of claims between parties? - HELD THAT:- The ‘inherent powers’ cannot be used to subvert legal provisions, which exhaustively provide for a procedure. To permit the NCLAT to circumvent this detailed procedure by invoking its inherent powers under Rule 11 would run contrary to the carefully crafted procedure for withdrawal. In the Impugned Judgement, the NCLAT does not provide any reasons for deviating from this procedure or the urgency to approve the settlement without following the procedure. The correct course of action by the NCLAT would have been to stay the constitution of the CoC and direct the parties to follow the course of action in Section 12A read with Regulation 30A of the CIRP Regulations 2016. This legal framework for such withdrawal was formulated after giving due consideration to the appropriate procedure for withdrawal and balancing it with the objectives of the IBC.
Even if the procedural infirmity is kept aside, once the CIRP was admitted, the proceedings became collective, and all creditors of the Corporate Debtor became stakeholders.
Without prejudice to the above, whether the NCLAT adequately addressed the objections raised by the appellant, while exercising its discretionary power under Rule 11 of the NCLAT Rules 2016? - HELD THAT:- The ongoing investigation by the Enforcement Directorate against the first respondent and the Corporate Debtor; and other attempts by the Corporate Debtor to dissipate assets, were not adequately addressed by the NCLAT.
The impugned judgment of the NCLAT dated 2 August 2024 is set aside - appeal allowed.
-
2024 (10) TMI 1184
Initiation of CIRP proceedings - existence of debt - main objection to the initiation of CIRP proceedings on the ground of limitation was rejected by the Adjudicating Authority on the ground that there is an acknowledgement of debt in the financial statements as well as auditor’s report of the Corporate Debtor for the year ending on 31.03.2017 - HELD THAT:- The Adjudicating Authority as well as the NCLAT have concurrently held that the entries in the balance sheets amount to clear acknowledgment of debt. The findings are agreed upon. Further, Note 3.4 appended to said balance sheet entry dated 31.03.2017 mentions that “company has made certain defaults in the repayment of term loans and interest.” It further mentions of a continuing default. The entry also mentions long-term borrowings. The conclusions of NCLT and NCLAT that there is acknowledgment of debt are unimpeachable.
Adjudicating Authority and NCLAT have also considered the Corporate Debtor’s proposal of One Time Settlement (OTS) to UCO Bank. The proposal made by letter dated 07.06.2016 acknowledges that there were prior debts owed to UCO Bank. To substantiate the argument that such OTS constituted acknowledgment of debt since it relates to present and subsisting liability and indicates existence of a jural relationship between the parties, UCO Bank relied on judgment of this Court in Lakshmirattan Cotton Mills Co. Ltd. and Messrs Behari Lal Ram Charan v. Aluminium Corporation of India Limited [1970 (10) TMI 81 - SUPREME COURT].
The findings arrived at by the Adjudicating Authority and NCLAT are correct in law and fact - there are no merit in the appeal - appeal dismissed.
-
2024 (10) TMI 1183
Extinguishment of claims upon approval of the Resolution Plan - amount arising out of termination of the Agreement due to non-renewal of the PBG - 'clean state' principles - whether the respondent was liable for the alleged dues, thereby ascertaining its eligibility to participate in the coal mine auctions? - HELD THAT:- Once the claim was returned to the appellant to be re-filed, it did not take any action in pursuance thereto. Thus, there did not exist any claim to be processed by the Resolution Professional to be placed before the Committee of Creditors and thereafter, before the NCLT for approval of the Resolution Plan. Notwithstanding that, undeniably, the Resolution Plan was approved by the NCLT on 20th March, 2023 and the second claim of the appellant in respect of Rs. 9.21 crores was calculated and disbursed to it by the successful Resolution Applicant. Despite having notice of all the above events and facts, the appellant neither objected nor challenged the Resolution Plan at any time till date.
Besides, it is trite that once the Resolution Plan is formally approved by the NCLT, any other remaining claims etc. would be deemed to have extinguished. This has been succinctly but authoritatively laid down by the Supreme Court in Ghanashyam Mishra [2021 (4) TMI 613 - SUPREME COURT].
The appellant appears to have let the claim get extinguished without a protest or demur. Merely because the waiver was not allowed by the NCLT while approving the Resolution Plan would not, ipso facto, resurrect the right of claim. In the opinion of this Court, the right of the appellant to the claim is clearly extinguished post approval of Resolution Plan. To that extent, the reliance on Greater Noida Industrial Development Authority [2024 (2) TMI 681 - SUPREME COURT (LB)] would not enure to the benefit of the appellant. In that case, the aggrieved person had infact challenged the Resolution Plan itself whereas, in the present case, the appellant let the claim get extinguished by its own apathy.
In the case of Greater Noida Industrial Development Authority, the Supreme Court was considering a dispute similar to the one in the present case, except, in that case, the aggrieved person therein challenged the Resolution Plan itself and the Supreme Court held that the form in which the claim was submitted with the Resolution Professional is inconsequential so long as a proper claim is laid. It further held that what needed to be considered respecting such claim is, whether it deserved to form part of the Resolution Plan. In the present case, though the appellant did submit the claim at hand, yet did not re-submit the same after it was returned.
There are no reason, much less any cogent reason to interfere with the impugned order passed by the learned Single Judge.
Resultantly, the present appeal is dismissed without any order as to costs.
-
2024 (10) TMI 1182
Direction to withdraw the withdrawal letter of mine opening permission - direction to Appellant to keep aside the Annual Mine Closure Cost besides directing the Appellant personally liable for disposal of the mined coal in accordance with the terms of the Mine Agreement - HELD THAT:- On looking at the terms of the Escrow Agreement, it is clear that Clause 3 provides that the AMCC was to be placed in the Escrow Account to perform the mine closure obligations. Undisputedly, the same clause also provides that CCO is to be the exclusive beneficiary and that AMCC is to be verified by the CCO. It is equally significant to note that in the very succeeding clause i.e. Clause 4, the Escrow Agreement clearly provides that 80% of the amount deposited by the Corporate Debtor as AMCC would be returned to the Corporate Debtor every 5 years and the balance would be returned after completion of the final mine closure. Thus, when the Escrow Agreement itself provides that the entire amount is to be returned to the Corporate Debtor after completing mine closure activities, it cannot be persuaded by the argument canvassed by the Respondent No. 1 & 2 that AMCC was money held in trust and are more inclined to agree with the Appellant that this sum clearly belonged to the Corporate Debtor for discharge of mine closure obligations.
The Corporate Debtor stood admitted into the rigours of CIRP on 12.08.2022 under the provisions of the IBC. Pursuant to the admission of the Corporate Debtor into CIRP, moratorium in terms of Section 14 of the IBC stood imposed against the Corporate Debtor. IBC places moratorium on all past dues of the Corporate Debtor. Once moratorium is declared in respect of any company, the institution of suits or continuation of pending suits or proceedings against such company including execution of any judgement, decree or any other order in any court of law, tribunal, arbitration panel or other authority is statutorily barred. Under the scheme of the IBC, each creditor is required to file its claim with the interim resolution professional/resolution professional as on the insolvency commencement date. So, for all pre-CIRP claims, there is a provision contemplated under IBC to file claims. These claims are then to be dealt in the resolution plan or during liquidation as the case may be.
The recovery of unpaid AMCC as pre-CIRP dues independently of the other stakeholders of the Corporate Debtor is a step in direct contravention of the IBC as it is barred under Section 14 and therefore deserves to be set aside. In terms of the provisions of IBC as contained in Section5(13) of IBC it would therefore also be accurate and appropriate to categorise AMCC as CIRP cost in running the Corporate Debtor as a going concern.
The Adjudicating Authority grossly erred in holding that the AMCC is not part of the estate of the Corporate Debtor and that the same needs to be kept aside - the reasoning offered by Adjudicating Authority to allow AMCC to be kept out of the CIRP process to enable its recovery dehors the scheme of IBC, cannot be agreed upon. If the AMCC is allowed to be kept outside the CIRP of the Corporate Debtor, it would tantamount to giving the Respondents a special status that is not recognised by law. Respondents cannot be paid in preference to other creditors as that would defeat the purpose of CIRP and would prejudice other secured financial creditors who are members of the CoC.
The impugned order is modified by setting aside the directions of the Adjudicating Authority to consider the Annual Mine Closure Costs as money not belonging to the Corporate Debtor and to keep the same aside - appeal allowed.
-
2024 (10) TMI 1181
Rejection of application for time extension to implement resolution plan - Appellant is ready to deposit the balance amount of the Resolution Plan - HELD THAT:- The entire amount has been deposited in the account of the Corporate Debtor, Liquidator shall distribute the amount to the Creditors as per the Resolution Plan. Appellant shall make payment of Rs.10.5 Lakhs to the Liquidator towards the liquidation cost within two weeks from today by a Bank Draft or by RTGS.
Liberty granted to the Liquidator to file an Application before the Adjudicating Authority with regard to entitlement of fee, if any, which may be decided in accordance with law.
In view of the fact that Financial Creditors have expressed their willingness to accept the amount of the Resolution Plan, the time as prayed was required to be extended by the Adjudicating Authority - the Order of the Adjudicating Authority set aside - appeal allowed.
-
2024 (10) TMI 1180
Refund of service tax - export of service in terms of Rule 6A of Service Tax Rules, 2012 r/w Rule 3 of Place of Provision of Service Rules, 2012 - services claimed to be advertising agency services, provided by the appellant from India through electronic media to their group companies/clients of its overseas group companies located outside India - principles of unjust enrichment - it is submitted that for the earlier years i.e. April, 2011 upto June, 2012 the department kept on sanctioning refunds to the appellant on the same set of documents by considering the service as ‘Advertising Agency service’ without raising any doubt - HELD THAT:- After looking at the earlier orders of granting refund, it is deemed proper to firstly take up the issue about the inconsistency in the orders of Adjudicating Authority that too for the very same assessee. In our view, the issues have been dealt with by the lower authorities in a most casual way.
Time and again it has been repeated through various judicial precedents that the revenue cannot be permitted to adopt an inconsistent stand in a subsequent assessment where the facts are identical unless there is change in law. None of the authorities below have considered it proper to even address the submission on behalf of the appellant regarding the earlier orders of the Adjudicating Authority granting refund for the same service. That becomes relevant when no appeals have been preferred by the revenue against the said order.
The revenue cannot be permitted to adopt an inconsistent stand in subsequent proceedings when the facts are identical unless they show that the law has changed but nothing of that sort has been attempted.
The authorities below have failed to base their decision of rejecting the refund claim on any change in law or circumstance, rather they ignored the said submission on behalf of the appellant - also, w.e.f. 1.7.2012 substantial changes by way of amendment have been affected in the Finance Act as well as in the Service Tax Rules and also various new Rules such as Place of Provision of Service Rules, 2012 etc. were brought into effect.
It s deemed proper to remand the matter back to the Adjudicating Authority for denovo adjudication after taking into consideration their earlier orders of granting refunds to the appellant and also after taking into consideration all the submissions of the appellant and the laws applicable at the relevant time. The said authority must provide a proper opportunity of hearing to the appellant.
Appeals filed by the appellant are allowed by way of remand to the Adjudicating Authority.
-
2024 (10) TMI 1179
Recovery of credit of tax paid availed on receipt of services under CENVAT Credit Rules, 2004, on the ground that either registration number was missing in the tax paying documents or that the number itself was incorrect - rule 9 of CENVAT Credit Rules, 2004 - HELD THAT:- As the inadequacy in the documents is deemed to a technical error and that there is no allegation record that the services had not been rendered or that tax had not been discharged, there is no reason to uphold the impugned order.
The appeal is allowed.
............
|
9911796707
