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Showing 281 to 300 of 7386 Records
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2025 (5) TMI 1239
Validity of proceedings u/s 147 - information regarding the cash payment had indeed emanated from the seized material during search operations - HELD THAT:- Replies to RTI applications have to be appreciated in response to the specific query under RTI to the concerned officer. The source of information has to be established with the help of panchanama along with annexure, etc. Certain details have to be also ascertained from the concerned Investigation Directorate of the Income Tax Dept and the Jurisdictional AO.
We are of the considered opinion that the complete and correct facts are required to arrive the conclusion that whether the said information emanated from seized material u/s 132 of the Act or otherwise.
We deem it fit to set aside the impugned order and remit the matter back to the file of the Ld. CIT(A) to decide the limited issue that whether the said information emanated from seized material u/s 132 of the Act or otherwise.
CIT(A) is free to call relevant information from both Revenue and assessee as the case may be and decide this issue afresh. In case, the Ld. CIT(A) finds that the said information has emanated from the incriminating material found & seized during the course of search operations; then the relevant assessment completed under section 147 rws 144 of the Act is not sustainable in the eyes of the law. Appeal of assessee is allowed for statistical purposes
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2025 (5) TMI 1238
Bogus job work charges - Addition on substantive basiswas deleted by the Co-ordinate Bench of the ITAT wherein held the expenses made incurred by Orient Craft Ltd is genuine - HELD THAT:- As following order of M/s Orient Crafts [2021 (10) TMI 154 - ITAT DELHI] and Trendy Attire (P) Ltd. [2022 (6) TMI 1452 - ITAT DELHI] the Co-ordinate Bench under identical circumstances deleted the additions made on protective basis in the case of other job worker Shri Mohinder Kumar Garg.
As there is no change in the facts of the present case as also confirmed by the Ld. Sr. DR, we find no error in the order of the ld. CIT (A) deleting the additions made int eh hands of the assessee.
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2025 (5) TMI 1237
Disallowance of expenditure for scientific research u/s 35(2AB) - totality of the expenditure incurred by the assessee on scientific research - HELD THAT:- Assessee as relying on case of Sandan Vikas India Ltd. [2011 (2) TMI 66 - DELHI HIGH COURT] submitted that the section 35(2AB)(1) of the Act, though prospective, would also apply to the pending case as held where such expenditure on scientific research (not being expenditure in the nature of cost of any land or building) on in-house research and development facility is incurred in a previous year relevant to the assessment year beginning on or after the 1 day of April, 2021, the deduction under this clause shall be equal to the expenditure so incurred.
Thus without offering any comment on merit of the case and keeping in view the facts in entirety in the interest of justice, we deem it fit to remit the matter back to the file of the AO for deciding the appeal on merit afresh after affording reasonable opportunity of being heard to the appellant assessee. Ordered accordingly.
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2025 (5) TMI 1236
Unexplained cash deposits in the Bank accounts - appellant had duly explained the fact that Bank accounts were in the joint names and the source of depositing the cash was earlier withdrawals from the same Bank accounts - as claimed that the cash was deposited out of earlier cash withdrawals made from the same bank account - HELD THAT:- As per the cash flow statement there were sufficient cash in hand with the Assessee to deposit in her bank account. The Department has not brought anything on record to show that the cash so withdrawn from the bank accounts have been utilized by the Assessee for any other purpose. Apart from the same, during the Remand proceedings, the said Sh. Ashok Kumar admitted that there was a land deal agreement entered into and the money toRs. 40,00,000/- has been received and return to the Assessee in cash.
As stated that the money was remained with Sh. Jeetu for approximately two to three months which is contradicts the claim of the Assessee that the money was with Jeetu/sellers for nineteen to twenty months.
From the above, it is found that the said Sh. Ashok Kumar has not denied the claim of the Assessee regarding land deal and payment made and received in cash. Considering the fact that as per the cash flow statement there was sufficient cash in hand with the Assessee to re-deposit in her bank account and also finding merit in the claim of the Assessee regarding the unsuccessful land deal and returning of money and re-depositing in the bank account, we are of the opinion that the Ld. A.O. and the CIT(A) have committed error in making/confirming the impugned addition. Accordingly, finding merit in the grounds of Appeal of the Assessee, the Appeal of the Assessee is allowed and the impugned addition is hereby deleted. Appeal of the Assessee is allowed.
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2025 (5) TMI 1235
Denial of benefit of Section 11/12 - Accumulation of Income - Assessee engaged in charitable activities or commercial activities - HELD THAT:- In the present case, assessee is running an Eye Hospital providing medical relief, clearly covered under first four definitions of Section 2(15) of the Act. It is not carrying any activity in the nature of trade or commerce or business for a cess or fees. Once it is registered as a charitable institution under Section 12AA, then it is to be seen whether income derived from the property of the society or activities of the society are being applied to the extent of 85% on its objectivity or not. The AO is totally silent on that part.
Sole defect pointed out by him is surplus over the gross receipts is a little bit higher in terms of percentage. But this isolated one factor would not shake the very status of the Society being run in a charitable manner. This objection has nowhere been provided under the scheme of Income Tax Act.
It has not been provided that if charitable institution is generating higher percentage of surplus, then it would be disqualified as a charitable institution. The requirement of the law is that 85% of the gross receipts are required to be applied for charitable activities, which has been fulfilled by the assessee. Assessee appeal allowed.
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2025 (5) TMI 1234
Rejection of registration u/s. 12AB as well as recognition u/s. 80G - assessee received donation from a private limited company out of CSR fund and immediately within 2 days, the assessee purchased 15 computers and school uniform from a vendor who was not available at the address given by the assessee and on verification of the bill, CIT(E) found that GST number of that particular vendor is also cancelled.
HELD THAT:- The founder of the trust has submitted a detailed note which shows various photographs of distribution of computers, school uniforms as well as relief to poverty. In the paper book the assessee has also submitted the receipt of 15 computers by various bar associations.
The utilization certificate was also produced in the paperbook wherein it is submitted that the assessee trust has utilized the donation for the purpose of which it is granted. However, on a plain reading of the order of the ld. CIT(E), we find that assessee has not at all been confronted with the enquiries conducted. Therefore, the finding of the CIT(E) is based on enquiries conducted by him result of which is not confronted to the assessee.
Before us, the assessee has produced overwhelming evidence. However, it needs verification. Therefore, in the interest of justice, we restore the whole issue back to the file of the ld. CIT(E) with a direction to the assessee to substantiate the transaction with the vendor, expenditure incurred with evidence and certificate before the ld. CIT(E).
Thus, the appeal is allowed for statistical purposes.
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2025 (5) TMI 1233
Unexplained cash deposits in the bank account - Receipts from his brothers on the occasion of his daughter’s marriage - HELD THAT:- As observed that both the brothers have filed affidavit for the above gifts made by them. They have filed affidavits along with their respective PAN. As observed that tax authorities have rejected the affidavits for the reason that the brothers do not have any creditworthiness.
As these deposits have made by the assessee during the marriage of his daughter, it is normal in the families to gather funds for the marriage and the brothers have filed affidavit confirming giving of gifts for the purpose of marriage. Therefore, in my considered view, tax authorities have rejected the abovesaid affidavits on gross basis. Thus, cash deposit to the extent of Rs. 9,00,000/- may be accepted.
Further deposit of cash deposit as observed that assessee has submitted a combined statement as per which assessee has withdrawn the cash from his own bank account and re-deposited the same within the gap of three months.observation of the AO is also contrary to the bank statement submitted by the assessee. For the sake of justice, we are inclined to remit this issue for verification of cash withdrawal and redeposit to the file of AO.
We direct the AO to verify the cash withdrawal and redeposit of Rs. 17,00,000/- during various dates as per the statements submitted by the assessee after giving proper opportunity of being heard to the assessee.
Accordingly, the grounds taken by the assessee are partly allowed.
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2025 (5) TMI 1232
TP Downward adjustment in respect of the transfer value of power by the captive power plant at Haldia, West Bengal - HELD THAT:- We note that the facts of the assessee are identical to the facts considered in the case of Dhunseri [2022 (8) TMI 1342 - ITAT KOLKATA] and, therefore, the issue is squarely covered in favour of the assessee as held B2C market comprises the sale of power by SEB and other distribution companies to different categories of consumers. Thus the power sold by other CPPs/IPPs to unrelated parties was in altogether different market conditions which is business to business commonly known as B2B model and the said rate represented the rate at which the distribution companies purchased power from generation companies. No consumer can buy the power in the open market at a rate generation companies sell power to distribution companies. Thus we do not find any force in the contentions of the ld DR that rate at which the power was sold to unrelated parties by the CPP is the ALP. Also see Jindal Steel & Power Ltd. [2023 (12) TMI 417 - SUPREME COURT]
Initiation of penalty proceedings u/s. 270A - claim of deduction for education cess despite the fact that the assessee had suo motto disallowed the same by way of filing of form 69 - HELD THAT:- We note that the assessee has correctly filed Form No. 69 before the AO on 29.11.2022 furnishing the revised computation and requested the AO to recompute the income. AO has mentioned that Form No.70 has not been uploaded, however, the assessee has already disallowed the same suo moto by filing Form No. 69 which has also not been denied by the department. Moreover, it the /ao who issues the form 70 and not the assessee. We are of the view that the penalty proceedings initiated by the AO is invalid and the AO is directed to drop the same. Thus, ground NO. 2 is allowed.
Levy of interest u/s. 234A - HELD THAT:- We find that the assessee has filed return of income with the extended time but despite that the AO had charged interest u/s. 234A of the Act. We note that the due date of filing of return originally was 30.09.2020 which was extended to 15.02.2021 and the assessee has filed return of income on 13.02.2021, which is within the extended due date. Accordingly, the action of the AO in charging interest u/s. 234A of the Act is wrong and thus, the AO is directed to delete the same. Ground No. 3 is allowed.
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2025 (5) TMI 1231
Rectification of mistake - denial of Exemption u/s 80P(2)(d) - interest income earned from Saraswat Co-operative Bank Ltd. - HELD THAT:- Though the finding of the Ld. Commissioner to the effect that the debatable issue cannot be entertained u/s 154 of the Act, therefore the same cannot be stated to be “mistake apparent on record” is plausible however, considering the peculiar facts and circumstances in totality, as the issue involved in this case is now settled by various courts including by co-ordinate Bench in the case of Pathare Prabhu Cooperative Housing Society Ltd [2023 (7) TMI 1272 - ITAT MUMBAI] wherein the claim of deduction u/s 80P(2){d} of the Act has been allowed. Appeal of the Assessee is allowed.
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2025 (5) TMI 1230
Valuation of imported goods - Motor Controller and Electric Tricycle Spare Parts - enhancement of CIF value - rejection of declared value - chang of classification of the item imported Motor Controller from CTH 8503 0090 to CTH 8708 9900 - HELD THAT:- Both sides agree that the same issue in respect of the same appellant came up to be decided by this Bench in COMMISSIONER OF CUSTOMS (PORT) VERSUS M/S. AAHANA COMMERCE PRIVATE LIMITED [2024 (9) TMI 543 - CESTAT KOLKATA]. The Bench has held that 'the correct classification of the goods in question is CTH 8503 0090. Therefore, hold that the Ld. Commissioner (Appeals) has rightly held the classification of the impugned goods under CTH 8503 0090.'
Conclusion - The declared transaction value must be accepted for customs assessment, and the classification under CTH 8503 0090 is correct.
Appeal of Revenue dismissed.
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2025 (5) TMI 1229
Levy of penalties u/s 112(a)(i), 112(b), and 114AA of the Customs Act, 1962 for improper importation of goods - appellant represented Lotus Impex (India) and Ambey Telecom in their alleged importation of the goods - using/signing false declaration - Reliability of statements ade against appellant - HELD THAT:- The appellant has not filed the Bills of Entry for the importation of the goods. The appellant had no role in the importation, filing of Bills of Entry, documentation, examination of the goods or any work whatsoever related to the import and clearance of any of the consignments of Lotus Impex (India) and Ambey Telecom. Thus, the Ld. Principal Commissioner has wrongfully observed in the impugned order that the appellant represented the said firms which is factually not correct.
The allegation against the appellant is that he has introduced the alleged Custom Broker Nasir Uddin to number of importers. The allegation in the Notice reveals that DC Shri. Navneet Kumar connived with various brokers to mis-declare and import the said goods. It is observed that there is no evidence brought on record to substantiate the allegation that the appellant has introduced the customs brokers to the DC Shri. Navneet Kumar. Even if it is accepted that the appellant has introduced some customs brokers to the DC, it cannot automatically lead to the allegation that the appellant has connived to mis declare the goods imported. Thus, the findings in the impugned order by the Ld. adjudicating authority is only on the basis of assumptions and presumptions without any evidence to support it.
The appellant has been implicated in the matter by selective reading of the alleged statements purportedly made by a few named persons under Section 108 of the Act. However, none of the observations in the said statements made against the appellant are corroborated by any other independent materials on record. The said persons have also not been allowed to be cross-examined in spite of specific request made by the appellant. As held by the Hon’ble Courts and this Tribunal, such statements are relevant and admissible only when examined by the adjudicating authority under Section 138B of the Customs Act, which has not been done in the instant case. Hence, such statements cannot be relied upon against the appellant - the said statements cannot be relied upon against the appellant, as there is no corroborative evidence to substantiate the allegations.
Penalty u/s 112(b) of the Act - HELD THAT:- There is no material evidence available on record to establish that the appellant is concerned with any of the acts mentioned in the said section, which make the imported goods liable to confiscation under Section 111 of the Act. The penalty under this section cannot be imposed on the basis of assumptions and presumptions. Accordingly, the appellant has not fulfilled any of the conditions required for imposition of penalty under Section 112(b) of the Customs Act. 1962 and hence, penalty imposed on the appellant under section 112(b) is not sustainable and hence the same is set aside.
Penalty u/s 114AA of the Act - HELD THAT:- The appellant had no role in the importation, filing of Bills of Entry, documentation, examination of the goods or any work whatsoever related to the import and clearance of any of the consignments of Lotus Impex (India) and Ambey Telecom. It is observed that there is no material evidence available on record to establish that the appellant is concerned with any of the acts mentioned in the said section. It is observed that the penalty under this section cannot be imposed on the basis of assumptions and presumptions. Accordingly, the appellant has not fulfilled any of the conditions required for imposition of penalty under Section 114AA of the Customs Act. 1962 and hence, penalty imposed on the appellant under section 114AA is not sustainable and hence the same is set aside.
Conclusion - The appellant had no direct or indirect role in the importation or clearance of the goods, was not involved in handling or dealing with confiscable goods, and did not make or use false declarations or documents. Therefore, the penalties imposed under the respective sections were quashed.
Appeal allowed.
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2025 (5) TMI 1228
Maintainability of second SCN - Issuance of second SCN invoking extended period of limitation - a prior show cause notice had already been issued for an overlapping period under extended limitation - HELD THAT:- The present show cause notice dated 24.08.2015 issued to the appellant again invokes extended period of limitation for demanding service tax for the period 2010-11 to 2013-14 which is not sustainable.
The show cause notice dated 23.04.2012 issued after investigation covered the period up to 10th August 2010. They issued the summons on 18.07.2014 for getting the figures for the balance period of 2010-11 to 2013-14. The officers have shown lethargic attitude even in seeking the figures for the subsequent period for raising the demand as they took almost 2 years from the date of first show cause notice to issue summons. They cannot be allowed to hide lethargic attitude under the guise of extended period of limitation. It is agreed with the contention of the appellant that once show cause notice has been issued invoking extended period of limitation, subsequent show cause notice cannot be issued by invoking larger period. Therefore, demand for the larger period does not survive.
On merits, it is seen that the appellant have given services to either Government or Governmental authorities and therefore, they are entitled to the benefit of relevant notification subject to fulfilment of specified conditions. The contention of the appellant regarding extending the benefit of threshold exemption and cum duty benefit also agreed upon. It is deemed fit to remit the matter to the adjudicating authority for re-determination of demand keeping the above directions in view, if any, for the normal period.
Conclusion - The demand based on the second show cause notice invoking extended limitation is quashed. The appellant's services to government authorities are recognized as exempt from Service Tax under the relevant provisions and judicial precedents.
Appeal disposed off by way of remand.
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2025 (5) TMI 1227
Levy of of service tax - affiliation fees charged by the appellant from the educational institutions /colleges - benefit of SSI exemption on renting of immovable property service as the aggregate value of such rental services does not exceed ₹10 lakhs in a particular financial year - HELD THAT:- Both the issues have been decided in favour of the appellant by the Tribunal in the case of M/s Jiwaji Vishwavidhyalaya versus Commissioner, CGST & CE, Bhopal [2025 (5) TMI 153 - CESTAT NEW DELHI] . On the first issue of affiliation fees, the Tribunal has relied on the decision of the Karnataka High Court in Rajiv Gandhi University of Health Sciences, Karnataka [2022 (8) TMI 707 - KARNATAKA HIGH COURT] where it has been held that the act of University in granting affiliation to a private college has to be considered as a service in furtherance of providing education and the decision of the respondents to consider otherwise is erroneous. The view taken by the High Court is concurred upon and the same is squarely applicable to the controversy in the present case.
Activity of Renting of Immovable Property Service - HELD THAT:- It is found that both the, Hon’ble High Court of Karnataka in the case of Rajeev Gandhi University of Health Sciences [2022 (8) TMI 707 - KARNATAKA HIGH COURT] followed by the Tribunal in the case of M/s. Jiwaji Vishwavidhyalaya [2025 (5) TMI 153 - CESTAT NEW DELHI] has held that Notification No. 33/2012-ST dated 20.06.2012 prescribes exemption from payment of tax if the amount received in the previous Financial Year is less than the threshold limit of Rs. 10 lakhs. On this principle, the Commissioner (Appeals) have categorically recorded the finding that the aggregate value of such rental services does not exceed Rs. 10 lakhs in a particular one financial year and therefore, the appellant is entitled to the benefit of SSI exemption. Consequently, they are not liable to pay any service tax on such service.
Conclusion - The demand for service tax on affiliation fees is unsustainable and that the appellant qualifies for exemption on renting of immovable property services under the SSI threshold.
Appeal dismissed.
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2025 (5) TMI 1226
Seeking rectification of mistake in the order - interpretation of Section 35F of the Central Excise Act, 1944 - calculation of the pre-deposit amount required to be made by the appellant before filing an appeal - HELD THAT:- The total demand for both the show cause notices during the respective period in dispute was calculated at Rs. 8,29,53,025/- (as mentioned in above table) instead of Rs. 13,66,31,566/- as has been insisted by the applicant. The appellant had paid the service tax of Rs. 5,36,78,541/- during the disputed period after availing benefits of certain notifications. Since the eligibility of appellant qua those notifications was objected by the department, the amount in dispute was the amount as was not paid by the appellant towards the total amount of consideration received during the disputed period. The order-in-original dated 05.01.2024 while adjudicating both the show cause notices, had confirmed the proposed demand of Rs. 8,29,53,025/-. This observation has been appreciated in para 7 of this order, that the show cause notices had proposed the amount of tax as was short paid during the relevant period.
In the show cause notice dated 7.3.2008 the amount in dispute/the amount of short paid service tax which was proposed to be recovered for the period from 2005 to March 2007 is Rs. 4,28,08,029/-. Similarly for the second show cause notice dated 28.11.2008 the amount in dispute/proposed for the period April 2007 to March 2008 was Rs. 4,01,44,996/-. The amount which was paid as service tax at the time of self assessment is not the amount of legal disagreement. It is the amount which was found short paid i.e. Rs. 8,29,53,025/- (of both the SCNs) which is the amount in dispute. This perusal makes it clear that the amount in dispute 10% whereof (pre-deposit) is to be deposited while filing an appeal before this Tribunal is Rs. 8,29,53,025/- Rs. 45 lakhs have been paid by the appellant after being pointed out towards the alleged short payment of service tax, hence it is this amount only can be adjusted in the amount of pre-deposit.
Conclusion - It is clearly apparent from the above calculation that Rs. 45 lakhs, the amount considered towards pre-deposit is still short of 10% of Rs. 8,29,53,025/-. In view of these observations, and holding that para 7 and 8 are in very much conformity with the entire above discussion arrived at for the better clarification, it becomes clear that there is no error at all in the impugned order dated 27.9.2024.
The application seeking rectification of mistake in the order dated 27.09.2024 passed in Defect Diary No. 50810 of 2024 dismissed. Resultantly, the appeal remains defective.
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2025 (5) TMI 1225
Input stage refund of various services provided for export of goods under Notification No. 41/2012-ST dated 29th June, 2012 - rejection of refund on the ground that the services had not been used beyond factory, vide Order-In-Original dated 23rd October, 2017. Against the Order-in-Original, the appellant preferred an appeal to the Commissioner - HELD THAT:- The Learned Commissioner has erred in passing the impugned order and the impugned order is not sustainable.
The Learned Counsel for the appellant is agreed upon that in the Order-In-Original, it has not been mentioned by the Adjudicating Authority that the applicant / appellant has not produced the copy of the invoice. If at all, the appellant has not produced the copy of the invoice before the Adjudicating Authority; then this fact must have been mentioned in the Order-In-Original. Further, it is also agreed with the Learned Counsel for the appellant that no refund application can be processed, if copy of the invoice has not been submitted, and a refund application without a copy of the invoice will be returned to the applicant outrightly. Here, it has not happened. The learned commissioner could have called for the copy of the invoice from the learned Adjudicating Authority or the appellant himself, but it was not done. Therefore, the impugned order passed by the Learned Commissioner is not sustainable and is liable to be set aside.
Conclusion - In the facts of the case, it appears proper, if the matter is remanded back to the Commissioner with the direction to give opportunity to the appellant to submit a copy of the said invoice and thereafter pass a suitable order on the refund application due to non appraisal of required facts.
Appeal allowed by way of remand.
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2025 (5) TMI 1224
100% EOU - Appellant has achieved negative NFE and had not fulfilled the obligations and conditions as provided in Para 4(b) of Notification No. 22/2003-CE and Para 3(d) of Notification No. 52/2003-Cus dated 31.03.2003 - contravention of provisions of Section 5A of Central Excise Act, 1944, and violating Rule 20 of the Central Excise Rules, 2002 as well as contravened Section 25(1) of the Customs Act, 1962 - Extended period of limitation - HELD THAT:- There is no controversy regarding the fact that appellants failed to achieve positive NFE and could not export the goods to achieve positive NFE earning for the period 2010-15 having procured goods without payment of duty.
The main argument of the appellant is that they have duly complied with the condition stipulated in para 4(b) and 3(d) of exemption Notifications No. 22/2003-CE and 52/3003-Cus dated 31.03.2003 respectively by furnishing bond and hence the impugned order to recover the duty in the absence of any breach of conditions, cannot be sustained. The argument of the learned Counsel for the appellant not agreed upon. From the plain reading of the provisions as contained in 4(b) and 3(d) of the exemption notifications as mentioned above, it is clear that conditions stipulate the payment of duty alongwith interest in case of failure of achieving positive NFE earning and the adjudicating authority can demand duty alongwith interest in case of failure to achieve positive NFE.
Learned Counsel for the appellant has also argued that encashment of bond as stipulated in para No. 4(b) and para No. 3(d) of the exemption notifications 22/2003-CE and 52/2003-Cus dated 31.03.2003 respectively is permissible only when there is permanent failure to achieve net foreign exchange earning and LOP is cancelled leading to the debonding of the EOU. In the present facts, the LOP has been extended upto 12.05.2020 whereas the impugned order dated 31.03.2016 demands the excise duty and Customs duty for the period 2010-15. He contends that when the LOP is in force and not cancelled, appellant are entitled to all the privileges and benefits attached to the LOP including the benefit of the exemption notification and the Revenue has no authority to recover the duty. The arguments of the learned Counsel for the appellant not agreed uponand the contention of the appellant cannot be accepted.
Extended period of limitation - HELD THAT:- The arguments of the learned counsel for the appellant cannot be accepted that they have regularly submitted the returns etc. disclosing the net foreign exchange earning achieved and extended period of limitation cannot be invoked. The department has rightly invoked extended period of limitation and the ingredients mentioned in provision of Section 11A of Central Excise Act, 1944 and Section 28 of the Customs Act, 1962 are present in the instant case.
The appellant also argued that subsequent to the impugned order-in-original, appellant have achieved the stipulated positive NFE earnings as required by DC KASEZ while granting an extension of the LOP period. Annual progress reports for FY 2016-17, 17-18 and 18-19 submitted to SC-KASEZ establish the fact of positive NFE achieved which is enclosed by the appellant. The argument of the learned Counsel cannot be accepted because the show cause notice was issued to the appellant for violation of exemption notifications for the Financial Year 2010 to 2015 and not for the Financial Year 2016 to 2019.
Conclusion - The appellant has violated the conditions of Notification No. 22/2003-CE dated 31.03.2003 and 52/3003-Cus dated 31.03.2003, having failed to achieve positive Net Foreign Exchange earnings during the period 2010-11 to 2014-15 and the appellant have contravened Section 5A of the Central Excise Act, 1944 and violated Rule 20 of Central Excise Rules, 2002. They have also contravened the provisions of Section 25 of the Customs Act, 1962. Therefore, demand of Central Excise duty of Rs. 6,93,932/- as per provisions of Section 4(b) of the Notification No. 22/2003-CE dated 31.03.2003 with interest and penalty and Customs duty of Rs. 42,576/- demanded as per para 3(d) of the Notification No. 52/2003-Cus with applicable interest and penalty is liable to be upheld. Therefore, the impugned order passed by Commissioner (Appeals) is liable to be confirmed whereas the appeal filed by appellant is liable to be dismissed.
Appeal dismissed.
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2025 (5) TMI 1223
Activities amounting to manufacture - activities of packing, repacking, labelling, relabelling, etc., on spare parts traded - HELD THAT:- The adjudicating authority has held that 'The fact that the noticee had claimed in the NIT that they are manufacturer and the fact that the noticee are responsible for the warranty of the spares in case these gets rejected by the buyers cannot be a reason to conclude that the notice would be covered by the definition of manufacturer under the Central Excise Act, 1944 in view of the fact that the original manufacturer of these spares clears these goods on payment of the Central Excise duty In this regard reference may be drawn to the observation of Hon'ble CESTAT in the case of ASKA EQUIPMENT PVT. LTD. vs. CCE [2006 (6) TMI 27 - CESTAT, MUMBAI] where it was held that - Fact that appellant/trader had claimed before Government companies, who are buyers of lower that they manufacture the same or that they give warranty, cannot be a reason to hold them manufacturer under section 2(f) of the Central Excise Act, 1944-Placing a sticker on tower showing brand name of appellants will not render appellants as a manufacturer of tower.'
The respondent is not affixing any price or undertaking packing/repacking of the said goods. These goods are coming in their original packing and labelling. The respondent is putting all these parts in a big box, for proper transportation of the same and no testing has been done by the respondent. Thus, it is clear that these goods have been sold in their original packing.
With regard to MRP, the respondent, in view of tenders raised by buyers, put their quotations and on those quoted values, the respondent is clearing the goods, without changing the MRP affixed by the manufacturers - The fact is also noted that most of the items are duty-paid items and no CENVAT Credit has been availed by the respondent.
Conclusion - It cannot be held that the activity carried out by the respondent with regard to the bought-out items amounts to manufacture in terms of Section 2(f)(iii) of the Central Excise Act, 1944.
There are no infirmity in the impugned order - the appeal filed by the Revenue is dismissed.
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2025 (5) TMI 1222
Taxable Turnover - Works contract - Construction of Road - Build-Operate-Transfer scheme - no actual sale or no transfer of property or goods during the relevant assessment years, and that there was no taxable turnover or business activity until the commencement of toll collection, which only started from 07.06.2001 - HELD THAT:- There is no such transfer of ownership or deemed ownership in favour of the contractor during the construction of the road and during the concessional period under the BOT scheme. The Government always remains the owner of the land both in works contracts or in BOT, and only possession is given to the contractor to construct the road and recover the cost of construction from the public or passengers by way of toll.
As held by the Division Bench of this Court in the case of Ashoka Infraways Private Limited [2024 (10) TMI 559 - MADHYA PRADESH HIGH COURT], apart from the Government, no one has the authority to collect the toll or service charges from any person. If that authority has been given to the contractor in the BOT scheme, instead of making direct payment for the construction of the road, there would be no escape from the tax liability on the contractor.
As per the BOT scheme, the payment to the petitioner for the work done was deferred by way of toll after completion of the concessional period, which doesn't mean that there was no sale during the Assessment Year 2000 – 01. As per the scheme of the commercial tax and entry tax, the tax is liable to be paid every year. Only the mode of payment was deferred, which has not been explained in the definition of 'sale' in Section 2 (t) (i) & 2 (t) (ii) of the Act of 1994. Section 2 (t) (vi) also clarifies that sale, with its grammatical variations and cognate expressions, means that a transfer of right to use any goods for any purpose (for a certain period) for cash, deferred payment, or other valuable consideration will also be treated as a sale.
In the case of Bharat Aluminium v/s The Commissioner of Sales Tax [1996 (4) TMI 451 - MADHYA PRADESH HIGH COURT], this Court held that for exchange of one item for another item is a sale. As per Rule 33 of the M.P. Commercial Tax Rules, 1995 (in short 'the Rules of 1995') also, the dealer shall specify in the return its turnover, the details of the sale/purchase for other than money consideration. The Assessing Officer shall fix the value of consideration in money for the purpose of determining the taxable turnover.
Admittedly, the petitioner is a dealer then certainly liable to pay taxes by filing a return on the goods purchased and brought into the State in execution of the works contract. The words 'project' and 'project cost' are defined in Clauses W3 and W4 of the agreement. According to the project, it shall mean survey, investigation, studies, design, construction, reconstruction, improvement, strengthening and repair. All the work related to the maintenance of the road, renewal of surface, bridge, tunnel, culvert, etc. and the cost offered to invest by the entrepreneur for completion of the aforesaid project shall be a project cost - the period of collection of the toll upon construction of the Dewas By-pass road was fixed for a fixed concession period, i.e. 3941 days for the Katni project and 3351 days for the Mhow – Ghatabillod project, by taking into consideration all the costs and expenses incurred in the construction work. The petitioner was required to make all arrangements for the money for construction of the bypass road, the petitioner was given the right to collect the toll after completion of the construction of the road for which period as above was fixed after considering the total cost of construction of the project and its recovery by way of collection of tolls. After the expiry of the said period, the petitioner shall not have any claim on the road as well as on a toll.
Conclusion - The petitioner is misconstruing the terms of the agreement and the construction of Dewas bypass road on BOT basis that it does not amount to execution of works contract, the petitioner executed the works contract on the land belonging to the State Government and recovered the construction and maintenance cost by way of toll with due permission from the State Government, it is nothing but a deferred payment by a mode of recovery of toll. The land on which roads were constructed by the petitioner remained in the ownership of the State. Hence, there are no substance in these writ petitions.
Petition dismissed.
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2025 (5) TMI 1221
Process of designation of Senior Advocates - guidelines laid down in the earlier decisions regarding the designation of Senior Advocates under Section 16(2) of the Advocates Act, 1961, particularly those in Indira Jaising-1 and Indira Jaising-2, require reconsideration or modification in light of practical experience and concerns raised about their efficacy and fairness or not - HELD THAT:- In the statement of objects and reasons of the Advocates Act, it was mentioned that the main feature of the Act was the integration of the Bar into a single class of legal practitioners known as Advocates. Perhaps, the need was felt to do so by the Legislature as prior to the commencement of the Advocates Act, there were different classes of legal practitioners such as Supreme Court Advocates, High Court Advocates/Pleaders, Advocates of High Court (OS), District Court Pleaders, Vakils, Mukhtars, Revenue Agents etc. Though the object was to make integration of the Bar into a single class, Subsection (1) of Section 16 created two classes of Advocates, namely, Senior Advocates and other Advocates. The power to designate an Advocate as Senior Advocate is vested with this Court and the High Courts.
There are restrictions imposed by this Court as well as the High Courts on the designated Senior Advocates. For example, clause (b) of Rule 2 of Order (IV) of the Supreme Court Rules, 2013 imposes restrictions on Senior Advocates. One such restriction is that a Senior Advocate shall not file a vakalatnama or act in any Court or Tribunal in India. Another restriction is that he shall not appear without an Advocate-on-Record (for short ‘AOR’) in the Court or without a junior in any other Court or Tribunal in India. Another important restriction is that a Senior Advocate cannot accept directly from a client any brief or instructions to appear in any Court or Tribunal in India. Similar restrictions have been imposed on the Senior Advocates by various High Courts. Under Subsection (3) of Section 16, the Bar Council of India has the power to impose restrictions on the Senior Advocates in the matter of their practice in the interest of the legal profession - there is nothing placed on record to show that the Bar Council of India has framed any Rules in terms of Subsection (3) of Section 16.
It is obvious that an endeavour was made by this Court to bring about uniformity in the norms/guidelines followed by this Court and High Courts in the designation of Advocates as Senior Advocates. This exercise was undertaken, obviously, invoking the jurisdiction of this Court under Article 142 of the Constitution of India as a measure to ensure transparency in the process. This step was also necessitated due to absence of Statutory Rules framed under the Advocates Act. It was an experiment made by this Court to bring about uniformity in approach. An effort was made to make the process more objective. However, this Court was not oblivious of the fact that the guidelines may require changes from time to time.
This Court has given enough indication that what was done under Indira Jaising-1 was not final. The decision itself noted that the need to reconsider the decision may arise in future.
This Court in Indira Jaising-1 embarked upon the exercise of laying down uniform standard/practice/ procedure/criteria for designation of Advocates as Senior Advocates by this Court and High Courts. In essence, it was an experiment made by this Court, perhaps, only with one object. It was to ensure that every deserving Advocate who satisfies the criteria of Sub-section (2) of Section 16 of the Act gets due consideration resulting in designation as Senior Advocate. Considering the object of the exercise undertaken by this Court, the directions issued in exercise of power under Article 142 were never intended to be final or understood as substitute to Statutory Rules under the Advocates Act. Paragraph 74 of Indira Jaising-1 and paragraph 51 of Indira Jaising-2 clearly contemplate that. This Court will have to make a course correction as expressed in paragraph 74 of Indira Jaising-1 again in exercise of its jurisdiction under Article 142 of the Constitution. The submissions made by the learned Solicitor General of India, appearing for the Secretary General of this Court as well as in his personal capacity, High Courts of Delhi, Karnataka, Madhya Pradesh and Punjab and Haryana, suggest that perhaps the directions issued in Indira Jaising-1 have not worked effectively to achieve the desired objectives.
The experience of the last seven and a half years shows that it may not be rationally or objectively possible to assess calibre, standing at the Bar, and the experience in law of the Advocates who apply for designation on the basis of a pointbased format. That has not achieved the desired objective. There is another important aspect which is relevant. No specific points have been assigned for the character, honesty and integrity. The point-based assessment, as can be seen from the earlier discussion, can hardly be objective, and it tends to be highly subjective.
Looking to the very nature of the process of designation, it is very difficult to arrive at a perfect system. Learing is achieved from experience and the mistakes committed in the past. Therefore, the endeavour of all stakeholders should be to keep on improving the system, so that it can be ensured that not a single deserving Advocate is left out of the process of designation and not a single undeserving person is designated.
Conclusions - It will be appropriate if all the High Courts frame Rules in terms of what is held in this decision within a period of 4 months from today by amending or substituting the existing Rules. The Rules shall be made keeping in view the following guidelines: a. The decision to confer designation shall be of the Full Court of the High Courts or this Court; b. The applications of all candidates found to be eligible by the Permanent Secretariat along with relevant documents submitted by the applicants shall be placed before the Full House. An endeavour can always be made to arrive at consensus. However, if a consensus on designation of Advocates is not arrived at, the decision-making must be by a democratic method of voting. Whether in a given case there should be a secret ballot, is a decision which can be best left to the High Courts to take a call considering facts and circumstances of the given case; c. Minimum qualification of 10 years of practice fixed by Indira Jaising-1 needs no reconsideration; d. The practice of Advocates making applications for grant of designation can continue as the act of making application can be treated as consent of the Advocates concerned for designation. Additionally, the Full Court may consider and confer designation dehors an application in a deserving case; e. In the scheme of Section 16(2), there is no scope for individual Judges of this Court or High Courts to recommend candidate for designation; and f. At least one exercise of designation should be undertaken every calendar year.
ii) The processes already initiated on the basis of decisions of this Court in the case of Indira Jaising-1 and Indira Jaising-2 shall continue to be governed by the said decisions. However, new process shall not be initiated and new applications shall not be considered unless there is a proper regime of Rules framed by the High Courts.
iii) It is obvious that even this Court will have to undertake the exercise of amending the Rules/Guidelines.
iv) Every endeavour shall be made to improve the regime/system of designation by periodically reviewing the same by this Court and the respective High Courts.
Application allowed.
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2025 (5) TMI 1220
Approval of Resolution Plan without prior approval from the Competition Commission of India (CCI) - assignment of debt by an Asset Reconstruction Company (ARC) to a non-ARC entity under the Resolution Plan - contravention of the SARFAESI Act, 2002 and the Reserve Bank of India (RBI) Master Directions (Asset Reconstruction Companies) 2024 - Debt owed to Respondent No.4- ‘International Finance Corporation’ can be assigned to an entity in India without specific approval by the RBI or not - SRA has dealt with Noida Project Land which is not the asset of the Corporate Debtor -
Approval of Resolution Plan without prior approval from the Competition Commission of India (CCI) - HELD THAT:- As per Section 30(4), the CoC is to approve the Resolution Plan by vote not less than 66% voting share of the Financial Creditors after considering its feasibility and viability and the manner of distribution proposed. The Resolution Plan in the present case has been approved with 73.38% vote share. Resolution Plan approved by the Adjudicating Authority is binding on all including the Dissenting Financial Creditor.
The 1st ground on which order approving the Resolution Plan by the Appellant is challenged on the strength of Section 5 of the Competition Act, 2002. Counsel for the Appellant relied on judgment of the Hon’ble Supreme Court in Independent Sugar Corporation Ltd. [2025 (2) TMI 19 - SUPREME COURT] decided on 29.01.2025. The Hon’ble Supreme Court in the said judgment has laid down that approval of the CCI as contemplated under Section 31(4) proviso of the IBC has to be mandatorily obtained before approval of the plan by the CoC.
Section 6 of the Competition Act, 2002 deals with ‘regulation of combinations’ which contemplated approval by the CCI for such merger and amalgamation amounting to combination. Counsel for the Appellant contended that the assets of the SRA as well as the Corporate Debtor after merger are more than prescribed threshold which are more than Rs.2500 Crore assets in India, hence, meets the threshold of combination under Section 5 of the Competition Act. Thus, mandatory approval from the CCI was required prior approval of the plan by the CoC - The Notification dated 07.03.2024 provided that Section 5 of the Competition Act is not applicable for two years where the value of the assets being acquired, taken control of, merged or amalgamated is not more than Rs.450 Crore in India or turnover of not more than Rs.1250 Crores in India.
In the Consolidated Reply filed by the Resolution Professional, balance sheets of the Corporate Debtor as on 31.03.2023 and 31.03.2024 have been referred to and brought on record. As per the balance sheets of the Corporate Debtor who is being acquired under the Resolution Plan, the value of the Corporate Debtor is Rs.70.76 Crore and the turnover is Rs.13.72 Crores. The value of the Corporate Debtor as above is clearly covered by exemption provided in Notification dated 07.03.2024 - Section 5 of the Competition Act, 2002 is not applicable in the facts of the present case and there was no requirement of any prior approval from CCI. Hence, the submission advanced by the Appellant cannot be accepted.
Assignment of debt by ARC - permissible to non-ARC or not - HELD THAT:- On looking into Section 9(1)(e) of the SARFAESI Act, 2002, settlement of dues payable by the borrower is also one of the measures contemplated for purposes of asset reconstruction. We are of the view that the settlement of dues is a phrase of wide import which can take measure for settlement of dues payable by the borrower. In the present case, Resolution Plan submitted by the Respondent No.2 which is approved by requisite vote share of the CoC provides for the payment of dues of the Financial Creditor. The debt has been categorised in sustainable and unsustainable debt and sustainable debt discharge is the payment proposed by the Resolution Applicant to the secured Financial Creditors whereas unsustainable debt is the balance amount claim of secured creditors which is noticed in paragraph 7.2 of the impugned order. The plan proposes the secured financial creditors Rs.99.05 Crores within 30 days of the approval of the Resolution Plan.
Sustainable debt is being discharged by payment to the financial creditors and unsustainable debt being assigned to the Resolution Applicants, it is the commercial wisdom of the CoC to approve or not approve the mode and manner of settlement of dues and in the present case, when settlement of dues have been approved by the CoC by 73.38% vote share, it is not persuaded to accept the submission that the assignment of the unsustainable debt to the Resolution Applicants violates any provision of the IBC or CIRP Regulations or any provisions of the SARFAESI Act, 2002 - there are no substance in the submission of the Appellant.
Debt owed to Respondent No.4- ‘International Finance Corporation’ can be assigned to an entity in India without specific approval by the RBI or not - HELD THAT:- The CoC as well as the SRA had submitted that approval of the RBI, if required for assignment of debt of Respondent No.4 is to be obtained within one year from approval of the Resolution Plan. As per provision of Section 31(4) of the IBC, the SRA can obtain approval from RBI after approval of the Resolution Plan once the assignment has been approved. There are no error in the above part of the Resolution Plan which proposes assignment of debt of Respondent No.4 to the Resolution Applicant. Approval, if any, can be obtained within one year from the RBI as per Section 31(4), hence, on the said ground approval of Resolution Plan cannot be faulted.
SRA has dealt with Noida Project Land which is not the asset of the Corporate Debtor - HELD THAT:- The Noida Project Land along with building structure was obtained by sub-lease deed dated 18.01.2008 and lease deed dated 23.06.2008 from Moser Baer India Ltd. (MBIL). MBIL went into liquidation under the Code and liquidator of MBIL vide letter of termination dated 30.03.2019 addressed to the Corporate Debtor has cancelled the said sub- lease and the Noida Project Land along with the pending litigation has been assigned to Palika Towns LLP by the Liquidator of MBIL. The submission of SRA in the above regard is that lease was terminated prior to initiation of CIRP. With regard to which the litigation is pending before the NCLT, SRA has acknowledged the pending litigation and offered to pay the lessor Rs.7,20,00,000/- as a solution to ending the dispute regarding the project. The money offered to the lessor is in addition to the payments to be made to the financial creditors under the Resolution Plan of the SRA
Appellant cannot raise any grievance nor above clause in the Resolution Plan dealing with the manner proposing a solution for Noida Project Land and continue the litigation by SRA with regard to Noida Project Land does not violate any provisions of the IBC or CIRP Regulations. The Resolution Plan cannot be said to have violated any provisions of the law in the above regard. There are no substance in the above submission.
Conclusion - i) The Competition Act's provisions on combination and CCI approval do not apply, and the Resolution Plan's approval without CCI consent is valid. ii) No violation of SARFAESI Act or RBI directions was found; the assignment of debt to a non-ARC entity under the Resolution Plan is valid. iii) The assignment of debt from the ECB lender to the Resolution Applicant is permissible, subject to subsequent RBI approval. iv) The plan's provisions regarding the Noida Project Land comply with the IBC and CIRP Regulations and do not violate any legal provisions. v) The CoC's commercial wisdom in approving the Resolution Plan and rejecting the revised offer is binding and not subject to interference.
There are no substance in any of the submissions of the Counsel for the Appellant. There is no merit in the Appeal. The Appeal is dismissed.
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