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Case Laws
Showing 321 to 340 of 1557 Records
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2025 (1) TMI 1238
Assessment order u/s 143(3) passed on a non-existent entity - entity assessed has been merged consequent to merger proceedings - HELD THAT:- Where the assessee-company was amalgamated with another company and thereby lost its existence, the assessment order passed in the name of the said non-existing entity would be without jurisdiction and was liable to be set aside. See Maruti Suzuki India Limited [2019 (7) TMI 1449 - SUPREME COURT]
Maintainability of appeal before High Court - Section 260A (4) provides that the appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question. However, the proviso to this sub-section states that nothing in this sub-section shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question.
Usually, for a case to “involve” such a question, the same should have been raised before the original authority or at least the appellate authorities. When a question was never raised before the original authority or the appellate authorities, then, typically, it would not be easy to hold that such a question was involved and, therefore, should be framed by exercising the powers under the proviso to sub-section (4) of Section 260A. However, to the above general proposition, there are exceptions. Suppose a question of law goes to the root of the jurisdiction, and there is no necessity to investigate new facts or if there is no serious dispute on facts. In that case, such a question can be framed even though the same may not have been raised in the earlier proceedings before the original or appellate authority. Consent, per se, cannot confer jurisdiction upon an authority where such jurisdiction is inherently lacking.
In Ashish Estates & Properties (P.) Ltd. [2018 (8) TMI 1726 - BOMBAY HIGH COURT] the Co-ordinate Bench of this Court held that a question which was not raised before Tribunal should not ordinarily be allowed to be raised in an appeal under Section 260A unless it was a question on the issue of jurisdiction or question, which went to the root of the jurisdiction.
We are satisfied that the question proposed by Mr. Mistri is involved in these appeals, and therefore, we frame the above question in all these appeals. If answered in favour of the assesses, the question would go to the root of jurisdiction.
After framing this question, we defer the hearing to 27 January 2025 so that the counsel for the parties would have sufficient time to address, inter alia, the additional question that we have now framed in these appeals. List the matters on 27 January 2025
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2025 (1) TMI 1237
Validity of penalty order passed u/s 271D as barred limitation - violation of Sec. 269SS - HELD THAT:- ITO vide letter dated 16.11.2016 had admittedly made the reference. Additional Commissioner of Income Tax issued the Show Cause Notice only on 10.11.2017 (nearly a year later) proposing the levy of penalty u/s 271D.
Penalty Order was made on 22.02.2018. If the reckoning point is 16.11.2016, it is clear that the proceedings were completed beyond the period of limitation, as rightly contended by the learned counsel appearing for the Assessee.
Even otherwise , the concept of delay & latches would crop in; no explanation whatsoever has been offered by the Revenue for the laxity shown in belatedly issuing the show cause notice / proposition notice which they claim, amounted to initiation of penalty proceedings. This view has animated the reasoning of the impugned order of the Tribunal, may be a bit inarticulately .
Reliance of Revenue on TAM TAM PEDDA GURUVA REDDY [2006 (7) TMI 141 - KARNATAKA HIGH COURT] does not come to his aid since the same has been rendered largely fact-specific. Thus the questions of law framed to be answered in favour of assessee.
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2025 (1) TMI 1236
Reopening of assessment u/s 148 as barred by limitation as prescribed un/s 149 - notices issued u/s 148 under the old regime, but after 01.04.2021, be construed as notices under Section 148A (b) - Notice issued without the necessary mandatory approvals - HELD THAT:- Notice issued u/s 148 of the Act in the earlier round was set aside on the ground that the AO had not followed the mandatory requirement of seeking an approval from the competent authority.
Clearly, the fact that the petitioner had succeeded in its challenge to the said notice cannot be a ground for exclusion of the period spent by the assessee in pursuing the said litigation. The time spent by the petitioner in pursuing the challenge can neither be excluded nor can be claimed as resulting in extension of the period of limitation.
Revenue is required to take all necessary steps for initiation of the assessment proceedings within the period of limitation. This would obviously mean proper steps in accordance with law. The fact that the Revenue had not taken the steps in accordance with law cannot possibly be construed as a factor in favour of the Revenue for extending the limitation as stipulated under Section 149 of the Act. Plainly, there was no court order impeding the Revenue from issuing a notice under Section 148 of the Act, in accordance with law.
We reject the contention that the period of limitation as stipulated u/s 49 (1) of the Act stood extended by virtue of the proceedings initiated by the orders passed in TWYLIGHT INFRASTRUCTURE PVT LTD, ARUN GARG, R.P. BASIA & CO, SUSHMA GOEL, ADA NEWS IN SHORTS PVT LTD, ABHINAV JINDAL, MANGLA [2024 (1) TMI 759 - DELHI HIGH COURT]
Thus, the present petition is allowed and reassessment order and notices quashed - Decided in favour of assessee.
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2025 (1) TMI 1235
Nature of receipts - treatment to excise duty refund received - revenue receipt or capital receipt - HELD THAT:- Tribunal in 2005-06 and 2006-07 [2024 (10) TMI 242 - ITAT DELHI] after taking note of the Notification No.39/2001 Central Excise dated 31.07.2001 issued by Central Government in the wake of devastation caused by earthquake in the Kutch District of Gujarat and the salient features of the said Incentive Scheme and the applicability of the same to the assessee decided identical issue holding that the Excise Duty refund received by the assessee is in the nature of capital receipt not exigible to tax.
Thus, we hold that the excise duty refund received by the assessee is in the nature of capital receipt not chargeable to tax. Appeal of the assessee is allowed.
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2025 (1) TMI 1234
Taxability of investment u/s 69 - claimed to be sourced as a loan from the assessee's mother - HELD THAT:- We find force in the argument of Revenue was required to assess the unexplained investments made directly or indirectly in the said property in the hands of the respective co-owners if their creditworthiness was doubtful. We are of the considered view that the ACIT, Circle 2(1)(1), Ghaziabad, by accepting the version of assessee's mother/Smt. Sudha Goyal in reopened assessment proceedings has held that she has the creditworthiness for making investments/advances in the relevant year. Thus, the creditworthiness of Smt. Sudha Goyal does not remain questionable thereafter. Hence, we reversed the finding of the CIT(A) in this regard and delete the addition
Disallowance of interest u/s 24 - Appellant/ assessee is required to make investment to the extent of his share. Thus, we hereby direct the AO to verify from the record that whether the investment made by the assessee to the extent of his share from the borrowed fund on interest.
The initial investment has to be treated as assessee’s share. In case, the bank account of the assessee after taking borrowed fund is found utilized for the acquiring the property to the extent of initial investment (as any prudent man will invest to the extent of his share only and thereafter the surplus investment), then the interest on that fund should be allowed after proper investigation. The subsequent investment; i.e. after even sourced from borrowed fund will not be eligible for the interest deduction u/s 24 of the Act.
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2025 (1) TMI 1233
Revision order u/s 263 passed in the name of a non-existing entity - effect of amalgamation scheme approved - HELD THAT:- Once the relevant order had been passed in the name of a non-existent entity and the fact of amalgamation has been duly intimated to the concerned Tax Authorities, then the order passed is void-ab-initio. In view of the above settled position of law, we are of the considered view that the order passed under Section 263 of the Act is void and hence, liable to be set-aside.
In the case of PCIT v. Maruti Suzuki India Ltd [2019 (7) TMI 1449 - SUPREME COURT] held that where assessee company was amalgamated with another company and thereby lost its existence, assessment order passed subsequently in name of said non-existing entity, would be without jurisdiction and was to be set aside. Decided in favour of assessee.
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2025 (1) TMI 1232
Penalty u/s 271D - acceptance of a cash loan in contravention of Section 269SS - HELD THAT:- Addition made in the assessment order passed u/s 153C was quashed by the CIT (A) on the basis of absence of valid satisfaction note and no incriminating material seized during the search.
Accordingly, it was concluded that notice u/s 153C issued by the Assessing Officer for assessment year under consideration need to be treated as ab initio invalid and legally not sustainable and quashed.
Since the penalty levied u/s 271D is against such additions made in the assessment order passed u/s 153C and the same was quashed, accordingly the penalty levied u/s 271D also does not survive. The similar issue was considered in the case of Ravi Nirman Nigam Ltd. [2024 (7) TMI 87 - ITAT MUMBAI] - we are inclined to delete the penalty levied u/s 271D - Appeal filed by the assessee is allowed.
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2025 (1) TMI 1231
Revision u/s 263 - disallowance u/s 14A - HELD THAT:- As specific queries were raised by the AO, reply was duly filed by the assessee along with details as asked for which has been duly considered by the Ld. AO in its proper perspective and the return filed by the assessee was then accepted, taking into consideration of the judgment passed in the case of Indian Farmers & Fertilizers Cooperative Ltd. [2017 (8) TMI 422 - DELHI HIGH COURT] and further that the Explanation 2 of Section 263 of the Act which has been amended by the Finance Act, 2022 giving effect on and from 01.04.2022 and further that the judgment passed in the case of Malabar Industrial Company Ltd. [2000 (2) TMI 10 - SUPREME COURT] we don’t find any reason to deviate from the stand taken by the Coordinate Bench in the identical situation. Assessee’s appeal is allowed.
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2025 (1) TMI 1230
Unexplained investment - on-money payments for property purchase was justified - HELD THAT:- It is a common practice in real estate transaction that consideration for purchase of property, whether it is cash or cheque has been fully paid either before the registration of the property or at the time of registration of the property. Therefore, going by the said logic, in our considered view, cash payment as alleged by the AO made for purchase of property should be considered in light of sale deed registered for purchase of property.
If we go by the said dates, the alleged cash payment towards purchase of property assessed by the AO as unexplained investment does not fall under the A.Y.2020-21.This fact has been confirmed by subsequent affidavit filed by Shri MSN Reddy, who has thoroughly explained the transaction on the basis of evidence and admitted additional income in the name of appellant company for the A.Y.2019-20. Therefore, we are of the considered view that the cash payment if any made for purchase of property cannot be assessed for the A.Y.2020-21. Thus, we direct the AO to delete the addition as unexplained investment for the A.Y.2020-21.
Valid satisfaction note recorded by the AO for assessment or jurisdiction u/s 153C - Although, both the parties have argued the issue extensively, in light of certain judicial precedents, but the issue become merely academic in nature, because the additions made by the AO towards unexplained investment for purchase of the property has been deleted on substantial ground and therefore, legal ground taken by the appellant, challenging the jurisdiction of the AO becomes infructuous. Thus, the ground of appeal taken by the appellant challenging the jurisdiction of the AO in light of judicial precedents, including the decision of Sinhgad Technical Education Society [2017 (8) TMI 1298 - SUPREME COURT] has been dismissed as infructuous.
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2025 (1) TMI 1229
Admission of additional ground - Exemption u/s 10(15)(iv)(h) - interest income from investments in redeemable non-convertible bonds/debentures issued by public sector companies - HELD THAT:- The Supreme Court in in NTPC [1996 (12) TMI 7 - SUPREME COURT] permits the ITAT to entertain additional grounds u/s 254 of the IT Act for the first time with the only caveat that the relevant facts are on record in respect of that item.
In the instant case the relevant facts of investment in PSU Bonds/debentures etc are available in the audited balance sheet and was before the assessing officer. We find from the recent decision in the case of Siva Equipment (P.) Ltd. [2020 (2) TMI 371 - BOMBAY HIGH COURT] which held that a taxpayer is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before the appellate authorities. In view of the above, we admit the additional ground raised.
As investments in PSU Bonds and debentures are available in the audited accounts, the assessing officer needs to examine the same with regard to the eligibility of assessee’s claim considering the eligibility criteria laid down in section 10(15)(iv)(h). For this purpose, we find it fit to set aside this issue to the file of the assessing officer for examining the claim of the assessee. Where the claim made is as per the law, the same should be allowed. The additional ground is allowed for statistical purpose
Non-allowance of deduction u/s 80G - HELD THAT:- CIT(A), has not adjudicated the issue of allowance/disallowance u/s 80G although the assessee had taken this ground before the CIT(A). The assessee has claimed that the issue of 80G was set aside to the file of AO for verification in the assessee’s own case by the ITAT in AY 2006-07 Following the earlier ITAT decision, we are of the considered view that the issue of 80G be set aside to the file of Assessing officer to decide on the issue.
Computation of income as per Rule-2 of First Schedule of Section 44 - Determination of income for a life insurance company - HELD THAT:- As per rule 2 of the First Schedule to the Act, profits and gains of life insurance business has to be taken to be the annual average of the surplus arrived at by adjusting the surplus or deficit disclosed by the actuarial valuation made in accordance with the Insurance Act, 1938, in respect of the last inter valuation period ending before the commencement of the assessment year, so as to exclude any surplus or deficit included therein, which was made in any earlier inter valuation period.
According this rule as is applicable from A.Y.1977-78, the surplus or deficit between two inter valuation periods disclosed by the actuarial valuation made in accordance with Insurance Act, 1938, can only be taken as income or loss of the period. The old Rule 2 which was in existence prior to amendment made by Finance Act, 1976 contains two methods of determining profits and gains of the 10 which has been allowed by the ITAT As no distinguishing decision has been brought to our notice, we, therefore, respectfully following the decision of the co-ordinate bench, dismiss all the grounds raised by the Revenue.
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2025 (1) TMI 1228
Validity of assessment order u/s 153C as barred by limitation - As argued assessing officer has not passed the order u/s 153C in case of all these assessees, within the time limit, prescribed u/s 153B - HELD THAT:- The assessment should be completed within 9 months or 21 months, whichever is later.
Therefore, taking the lead case for AY 2016-27 we note that assessment order was passed by the assessing officer, under section 153C read with section 143(3) of the Act, on 21.04.2021. The assessment order ought have been passed on 31.12.2020. Therefore, number of days of delay in passing the assessment order comes at 111 days.
Assessment order ought to have been passed on (A) or (B), whichever is later, that is, on 31.12.2020. However, actual date of passing the assessment order in the assessee’s, case, is on 21.04.2021, hence, assessment order passed by the assessing officer, under section 153C read with section 143(3), dated 21.04.2021, is barred by limitation, by 111 days, therefore, the assessment order, should be quashed, on this fact only.
Law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim 'Expressio unius est exclusion alteris', meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible.
Thus, as the assessment order was not framed within the time limit prescribed u/s 153B therefore, assessment order passed by the assessment officer u/s 153C r/w section 143(3) of the Act, is here by quashed, and consequently, we allow the appeal of the assessee.
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2025 (1) TMI 1227
Cash seized during a search operation adjustment against the advance tax liability of the assessee - HELD THAT:- The section 132B of the Act prescribes as how the cash seized should be adjusted against the tax liability including ‘existing tax liability’ and ‘liability’ determined on completion of the search assessments orders / penalty order etc i.e. regular tax demand. Given that the search action in this case occurred in the financial year 2014—subsequent to the insertion of Explanation 2—its provisions are applicable to the facts of this case. Thus, the prayer of the assessee for adjustment of the seized case against advanced tax liability is not permissible and accordingly relevant prayer of the assessee is rejected.
Adjusting the seized case against the self-assessment tax liability - It is evident that self assessment tax liability could be treated as part of the ‘existing liability’ , but in the instant case, the assessee has apparently not included the said amount of the cash seized as part of his total income and computed the self-assessment tax liability corresponding to said income.
Assessee communicated to the AO for offering of cash seized as income and requested for adjusting the tax due from the cash seized as the assessee did not have liquidity to discharge the tax liability. In the instant case before us, the learned counsel could not readily substantiate evidences in support of existence of identical circumstances, therefore, we feel it appropriate to set-aside the finding of the CIT(A) on issue in dispute and restore the matter back to the file of the AO for determining the issue of adjustment of self-assessment tax liability after verification of application filed by the assessee seeking such adjustment & other documentary evidences to support that circumstances identical to the case of Arun Banal [2023 (6) TMI 39 - ITAT DELHI] existed in the case and then decide the issue in accordance with law.
Interest charged u/s 220 in respect of regular tax demand consequent to assessment order - The assessee cannot be held as assessee in default for non-payment of the tax on time and no interest under section 220 can be charged from the assessee in such circumstances. Accordingly, we direct the AO to adjust the seized cash against the tax liability raised in notice for demand dated 30/12/2016 as said cash was already available with the Department for adjustment within the period of 30 days provided under said notice. We may clarify that this issue of adjustment against regular demand is to be considered by the AO if the assessee does not get relief on the issue of adjustment of cash seized against self assessment tax while verification of the issue self-assessment tax liability adjudicated by us in preceding paragraphs.
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2025 (1) TMI 1226
Seeking grant of bail - smuggling of cigarettes - challenge to summons issued under Section 108 of the Customs Act, 1962 - it was held by High Court that 'After approaching this Court by filing a Writ Petition challenging the notice issued under Section 108 of the Customs Act, which is not entertained by this Court, it is not proper on the part of the petitioners to approach this Court with a bail application.'
HELD THAT:- The Special Leave Petition is dismissed as infructuous reserving liberty to the petitioner herein to seek regular bail, if so advised.
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2025 (1) TMI 1225
Valuation of export goods - Printed Circuit Boards -Rejection of declared value - redetermination of value - absolute confiscation - imposition of a significantly higher penalty in the subsequent Order-in-Original - HELD THAT:- This is not in dispute that there exists a statutory alternative remedy to the petitioner. This is also not in dispute that based on the same fact situation in the Order-in-Original dated 31.12.2020, penalty imposed was Rs.1,00,000/-, whereas in the second Order-in-Original it is enhanced to Rs.1,00,00,000/-. The Delhi High Court in ASHISH BANSAL VERSUS PRINCIPAL COMMISSIONER OF CUSTOMS (PREVENTIVE) [2023 (5) TMI 230 - DELHI HIGH COURT] opined that 'Considering that the petitioner has a remedy of appeal before the Customs Excise and Service Tax Appellate Tribunal (hereafter 'Tribunal'), we do not consider it apposite to examine the petitioner's challenge to the impugned order in this petition. However, given the manner in which the penalty has been computed and the financial condition of the petitioner, we consider it apposite to direct the Tribunal to consider the petitioner's appeal without any pre-deposit.'
The petitioner may prefer an appeal against the impugned Order-in-Original dated 31.10.2022 within three weeks from today. If the appeal is preferred within the aforesaid time, the appellate authority shall consider and decide it on merits and shall not dismiss it on the ground of delay - Considering the fact that the petitioner suffered a penalty of Rs.1,00,000/- in the previous round, which is enhanced to Rs.1,00,00,000/-, in the peculiar factual backdrop of this matter, it is deemed proper to permit the petitioner to pre-deposit on the basis of the penalty of Rs.1,00,000/- before the appellate authority. However, this will not have any effect on merits of the matter and the appellate authority will be free to decide the appeal on its own merits.
Conclusion - The petitioner is allowed to pre-deposit based on the initial penalty of Rs.1,00,000/-, rather than the enhanced amount, ensuring this does not affect the merits of the appeal.
Petition disposed off.
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2025 (1) TMI 1224
Seeking change of name of the Company - tax exemption under the Special Economic Zones Act, 2005 - HELD THAT:- The stand of the petitioner regarding change of name of Company is not accepted mainly on the ground that original certificate issued by Registrar of Companies was not produced by the petitioner.
A plain reading of impugned order shows that the petitioner submitted copy of relevant certificate issued by the competent authority showing the change of name of the company. The said certificate is disbelieved by holding that certified copy of the same was not filed. No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar. No reasons are assigned as to why true/photocopy of certificate is to be disbelieved. Similarly, there is no iota of discussion whether the petitioner deserves any exemption for functioning in SEZ. These relevant aspects are required to be looked into.
Conclusion - i) No attempts were made to get the genuineness of the certificate verified from issuing authority i.e. the office of the Registrar. No reasons are assigned as to why true/photocopy of certificate is to be disbelieved. ii) The matter remanded back to the same authority for reconsideration.
Petition disposed off by way of remand.
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2025 (1) TMI 1223
Seeking of release 2091 bags /104000 KGs of Sodium Carbonate (Sajji Khar) under Bill of Entry No.7757409 on a provisional assessment basis at the declared value - alleged mis-declaration of 'Sodium Carbonate' as 'Arecanuts' - HELD THAT:- It is open to the petitioner to submit an additional representation for issuance of "Detention and Demurrage Free Certificate". If any, such representation is made, the same would be considered by the respondents and orders shall be passed on merits and in accordance with law with regard to "Detention and Demurrage Free Certificate", within a period of two weeks from the date of receipt of a copy of this order, after affording the petitioner, a reasonable opportunity of hearing.
It is open to the petitioner to make a request for grant of access to the Assistant Drug Controller to inspect the consignment/goods for issuance of aforesaid certificate. If such request is made, the appropriate authority would provide access to the Assistant Drug Controller to inspect the consignment/goods within 48 hours of such request. On such examination being made by the Assistant Drug Controller and if "No Objection Certificate" is issued by the Assistant Drug Controller.
Petition disposed off.
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2025 (1) TMI 1222
Levy of penalties u/s 112(a)(i) and Section 114AA of the Customs Act, 1962 - smuggling of cigarettes concealed as 'ladies garments' without statutory health warnings - violation of the Cigarettes and Other Tobacco Products Act, 2003 - HELD THAT:- The money transaction details available in the Bank Statements are due to their normal business on account of trading of cigarettes and other tobacco products. They have no relation with the smuggled cigarettes. There is no evidence brought on record by the Revenue to substantiate the allegation that the transaction between M/s. Blue Water Agencies, the company of the appellant and the companies owned by Mr. Vivek Agarwal were related to illegal smuggling of cigarettes. In the absence of any corroborative evidence, the money transaction through bank between the companies of Mr. Vivek Agarwal and Appellant's company, M/s. Blue Water Agencies cannot be the ground to conclude the involvement of the appellant in the alleged smuggling of foreign cigarettes.
From the documents available on record, it is observed that there is no evidence brought on record to indicate that the appellant had prior knowledge about the concealment of cigarettes in the consignments declared as 'ladies garments'. Thus, this evidence cannot be the basis for imposing penalties on the appellant.
The impugned order has confirmed the demand mainly on the basis of the statement dated 27.06.2022 of Mr. Vivek Agarwal - HELD THAT:- There is no other evidence brought on record regarding the conspiracy hatched by the appellant in relation to smuggling of the foreign brand cigarettes into the country. Since the main evidence relied upon by the adjudicating authority against the appellant is the statement of Shri. Vivek Agarwal, an opportunity to cross-examine the person who made that statement ought to have been given as provided under Section 138B of the Customs Act, 1962. However, the ld. adjudicating authority has not granted the opportunity for cross-examination of Mr. Vivek Agarwal. Accordingly, the provisions of Section 138B of the Customs Act, 1962 have been violated in this case. When any statement is used against an assessee, an opportunity for cross-examining the person who made such statement ought to be given to the assessee. Since the opportunity of cross examination has not been given to the appellant, the statement of Shri. Vivek Agarwal cannot be relied upon to implicate the appellant in the alleged smuggling of foreign brand cigarettes.
Violation of principles of natural justice - HELD THAT:- In the case of ANDAMAN TIMBER INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA-II [2015 (10) TMI 442 - SUPREME COURT], the Hon’ble Apex Court has held that denial of cross-examination would be a serious flaw - the statement of Mr. Vivek Agarwal cannot be relied upon to implicate the appellant in the alleged offence as the provisions of Section 138B of the Customs Act, 1962 have not been followed.
Penalty - HELD THAT:- Penalty under Section 114AA can be imposed when the evidence available on record indicates that the appellant has made, signed or used, any declaration, statement or document which is false or incorrect. In this case, there is no evidence available on record indicate the involvement of the appellant in the alleged offence of smuggling of foreign brand cigarettes.
There is no evidence available on record to implicate the appellant in the offence. The only evidence relied upon by the adjudicating authority to implicate the appellant, i.e., the statement dated 27.07.2022, cannot be relied upon, as the opportunity to cross examine the person who has given the statement was not granted to the appellant. This said statement has been given by another accused in this case, who could have implicated the appellant with a view to extricate himself from the alleged smuggling of cigarettes. Thus, the appellant cannot be penalised only on the basis of the statement given by another accused in this case.
Conclusion - The evidence available on record does not indicate that the appellant had prior knowledge about the concealment of cigarettes in the consignments imported as 'ladies garments'. Thus, the ingredients required for imposing penalty under Section 112(a) of the Act have not been established in this case. It is also observe that there is no evidence available on record indicating that the appellant has made, signed or used, any declaration, statement or document which is false or incorrect. Thus, the ingredients required for imposing penalty under Section 114AA of the Act have not been established in this case. Therefore, the penalties imposed on the appellant under both the above provisions/Sections are not sustainable in law.
Penalties set aside - appeal allowed.
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2025 (1) TMI 1221
Revocation of the Customs Broker License - forfeiture of security deposit - imposition of a penalty on the appellant - violations of the Customs Brokers Licensing Regulation (CBLR) 2018 - appellant had connived with importers to misdeclare the origin of imported goods or not.
Whether the appellant as Customs Broker have violated Regulations 10(a), 10(d) 10(e) of Customs Broker License Regulations, 2018 (CBLR)? - HELD THAT:- Appellant as CB is bound by the documents given to him by the importers. Further, till date department has not been able to produce any evidence that any of the documents submitted at the time of clearance of the imported Areca Nuts are forged or false. No report from the Country of Origin i.e Sri Lanka or from the alleged countries i.e. Indonesia and Veitnam have been obtained - The task of verification of documents is of the departmental officers. Law also does not empower the CB to undertake any investigations. Hence this part of the allegation is without any basis and wrongful presumption that CB should have investigated the documents provided by the importers. Further, when law of the land states that COO certificates can not be challenged even by the Customs Authorities except by following a prescribed procedure, how can a CB challenge those documents and in particular when the certificates were supported by Bill of lading,Commercial invoice etc. None of these documents have been objected nor have been denied by the importers to have been provided to the appellant.
Law does not require a custom broker to physically deal with the goods before the same are received in custom area. The Custom Broker operates on the basis of document supplied to him and in that context it can hardly be held that the documents/ details filed by the Custom Broker on the strength of documents supplied by the importers are wrong - there are no merit in confirmation of charge under Regulation 10(d) and 10(e)of the CBLR 2018. The same is therefore liable to be dropped.
Violation of provisions of Regulation 11(n) of CBLR, 2018 - HELD THAT:- Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by the Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine - the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n).
Thus, none of the provisions of CBLR, 2018 have been violated by the appellants. The findings to that extent are liable to be set aside.
Whether the appellant/Customs Broker has connived with the importer and abetted the alleged act of misdeclaring the goods to be of Sri Lankan Origin? - HELD THAT:- The statement of appellant cannot be considered for want of any cogent corroboration for it as got retracted at the initial stage of seeking bail. There is no such evidence on record which may prove that COO from Sri Lanka, is a fake document that it was not issued by Sri Lankan Government. Thus the very basis of the allegations vanishes. In absence thereof, allegation of abetting the alleged imports by appellant being mastermind cannot at all sustain. The findings about retracted statement are wrong in light of the discussed case law while adjudicating Question No.1. Hence, appellant is wrongly alleged to be abetter/mastermind for such act/omission which department has failed to prove. There is also no evidence on record to prove that Arica nuts were being imported from Indonesia and black pepeers were being imported from Vietnam. In absence of any such documentary evidence the document issued by Sri Lankan Government (Certificate of Origin) is wrongly been doubted by the department. The sole statement of appellant himself alleging it to be his confession has wrongly been used against him while penalizing him. The adjudicating authority, while doing so, has acted in gross violation of Article 21 of the Constitution of India.
Conclusion - The appellant did not violate any provisions of the CBLR, 2018, and there was no evidence of connivance or abetment in the alleged misdeclaration of goods' origin.
The impugned order is set aside - appeal allowed.
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2025 (1) TMI 1220
Classification of import goods - whether the Appellant could have imported internal combustion engines meant for use in medium and heavy commercial vehicles covered under SION category C1059 by utilizing this transferrable DFIA license? - HELD THAT:- The exemption from Customs duty in respect of imports against DFIA licences are governed by N/N. 98/2009--Cus dated 11.09.2009. To the extent relevant, this notification stipulates that the exemption shall be granted provided that the description, value and quantity of materials imported are covered by the authorization, and the authorization is produced before the proper officer at the time of clearance. Certain additional restrictions are in place in respect of products specified in paragraph 4.32.3 of the Handbook of Procedures (Vol. I) of the Foreign Trade Policy (FTP).
The SION category does not find any mention in the authorization at all. It is true that the export item name which is set out in a separate table titled “item(s) details” is identical to the description of the SION Category C969. However, the category code itself finds no mention in the authorization. Further, if anything, the category restriction is relevant only to the goods exported. There appears to be nothing on the authorization restricting the category of goods imported. It might be true, as the Revenue contends, that in the application for the authorization, the importer sets out the categories of goods to be exported and imported. However, the language or particulars of the application cannot be read into the authorization so as to restrict the scope of the authorization to a field narrower than that which the words of the authorization themselves contemplate.
Circular No. 46/2007 dated 20.12.2007 of the CBEC indicates that it is only in respect of product specified in paragraph 4.55.3 of the Handbook that a correlation of technical characteristics, quality and specification of the inputs with the export products is required to be established. The circular goes so far, as to say that such correlation is not required to be established in other cases unless the SION prescribe the same.
Conclusion - The Appellant cannot be expected to correlate its imports with the exports of the person to whom the license was originally issued. It is further found that there is nothing in the license which restricts the import of internal combustion engines only to such internal combustion engines as would have been used in the goods which are permitted to be exported by the authorization. No such restriction can be read in where the words of the authorization do not themselves create such a restriction.
The impugned order therefore deserves to be set aside - appeal allowed.
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2025 (1) TMI 1219
Refund of export duty paid by Vedanta Ltd. (formerly Sesa Goa Ltd.) on iron ore exports - export duty assessment was provisional or final - rejection of claim for interest on the ground that the refund was granted within 8 weeks from the date of the Calcutta High Court’s order - rectification under Section 154 of the Customs Act - relevant date of interest - relevant rate of interest.
Whether the assessment is Provisional, as is being claimed by the appellant or is Final, as is being claimed by the Revenue? - HELD THAT:- The Adjudicating authority after considering the Tribunal’s no uncertain order, recorded the entire chronological event and took the stand that the appellant has filed the refund claim on 05.08.2022. In a carefully drafted order, he holds that the appellant has not opted for Provisional Assessment because of which no sample was drawn nor was any test conducted. Therefore, as per him, it is a case of Final Assessment. Thus, for all purposes, it is a mere case of rectification in view of the decision of the Tribunal and also to follow the procedure of Gangdhar Supreme Court ruling and the CBIC’s circular 04/2012 Cus dated 17.2.2012.
Whether this is a case of Section 154 – Rectification of the Finally assessed order as is being claimed by the Revenue or is a case of finalization of assessment as is being claimed by the appellant? - HELD THAT:- Since lot of discussion has taken place and Tribunal and High Court have held that it is a case of "omission" and the rectification is required to be carried out, we take the view that it is a case of Section 154. Since the rectification was required to be carried out for the period 2007-2008 and all the documents were available with the Revenue by May 2009 itself, the Rectification should have been carried out based on the request made on 01.10.2009. No attempt was made to take up this request. Even after this matter reached the Commissioner (Appeals) and it was held by him that the issue will call for rectification under Section 154, his order was not followed - the Adjudicating authority has also gone on to decide the issue in terms of Section 154 and has cited the provisions of Section 27 while granting the refund.
Whether any interest is payable to the appellant? - HELD THAT:- Admittedly, due to this inordinate delay, the appellant would have been compelled to borrow from banks on payment of interest - the Ranbaxy judgement [2011 (10) TMI 16 - SUPREME COURT] of the Hon’ble Supreme Court would be squarely applicable to the facts of the present case. This is a case where the erroneously excess Export Duty was collected from the appellant during the period 2007-2008. After following up from 2009 onwards for proper rectification of the assessment order and litigation at various forum, finally the refund was granted on 5.9.2024. In terms of Ranbaxy judgement, the appellant would be eligible interest on the refund amount granted to them.
In the present case, the delay in taking up the issue for re-assessment by the Revenue was to the tune of more than 14 years. Hence, the decision of the Hon’ble Supreme Cour in the cited case of Sandvik Asia [2006 (1) TMI 55 - SUPREME COURT] is squarely applicable, where it was held that 'There cannot be any doubt that the award of interest on the refunded amount is as per the statute provisions of law as it then stood and on the peculiar facts and circumstances of each case. When a specific provision has been made under the statute, such provision has to govern the field. Therefore, the Court has to take all relevant factors into consideration while awarding the rate of interest on the compensation.'
If they are found to be eligible to interest, what would be the relevant date of interest? - HELD THAT:- It is seen that the appellant has filed their first letter seeking the finalization of assessment on 26.05.2009 for the Export Duty paid during 2007-2008. They have subsequently requested for ‘rectification’ in terms of Section 154 on 01.10.2009. The refund has been given to the appellant only after the rectification under Section 154 has been carried out, as can be observed from the OIO dated 5.9.2023 - The High Court in all their Orders and Tribunal in their order have taken cognizance of this OIA and have made specific reference that no further appeal was preferred by the Revenue against this OIA and in fact after about 5 years from this OIA, an OIO was passed. The subsequent events resulting in the High Court Orders and Tribunal orders holding that ‘rectification’ under Section 154 also emanate basically from this OIA dated 11.10.2010 - 11.10.2010 should be taken as the date on which the ‘consequential refund’ would accrue. Since the supporting documents were already available with the Revenue on 26.05.2009 [when the first letter was filed] and on 01.10.2009 [when the rectification request letter was filed], the Revenue could have completed the rectification/re-assessment within 3 months from 11.10.2010 [OIA order date]. After allowing the 3 months from 11.10.2010, the interest would be payable from 11.01.2011. The Revenue is directed to pay the interest from 11.01.2011 till 05/06.09.2023, the date on which the refund was paid.
If the interest is payable what would be the rate of interest to be paid? - HELD THAT:- In the present case, the Export Duty was paid at the time of Exports and the excess Export Duty paid remained with the Revenue till it was refunded. In the OIO , it has been held that the appellant was not required to pay the Export Duty @ Rs.300 PMT and was required to pay the same @ Rs.50 PMT only. Thus the amount retained by the Revenue would be akin to the appellant making the payment during the course of investigation - the appellant is eligible to get the interest @ 12% per annum from 11.01.2011 to 5/6.09.2023.
Conclusion - i) Though the appellant has claimed this to be a case of Provisional Assessment, duly finalized on 5.9.2023, the view cannot be accepted, since there is nothing to indicate that they have opted for Provisional Assessment. After filing their letter on 18.05.2009 [26.05.2009] seeking Finalization of Provisional Assessment, they themselves have requested for ‘rectification’ in terms of Section 154. This request has been considered and endorsed by the High Court and Tribunal. ii) This is the case of rectification being carried out by the Revenue, in terms of Section 154 of Customs Act 1962, as directed by the Hon’ble High Court, resulting in re-assessment Order being passed by the Adjudicating authority on 05.09.2023. iii) The case falls under the category (b) and the provisions of Section 27A are attracted and accordingly, interest is required to be paid. iv)The date of filing of the refund claim is being taken as 11.10.2010, when the OIA has been passed directing the Adjudicating authority to carry out the necessary ‘rectification’. After giving three months’ time from this date, the interest is payable from 11.01.2011 till 5/6.09.2023 when the refund amount was finally paid. v) The interest is payable @ 12 p.a.
Appeal allowed.
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