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Showing 341 to 360 of 1557 Records
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2025 (1) TMI 1218
Winding up of Company - Section 466 of the Companies Act, 1956 - applicability of principles of res judicata apply to the second application under Section 466 of the Companies Act, given the dismissal of a similar earlier application - HELD THAT:- The Courts in NILKANTA KOLAY VERSUS THE OFFICIAL LIQUIDATOR [1995 (8) TMI 327 - CALCUTTA HIGH COURT] have held that bona fide must be established before a stay on winding up proceedings can be granted. Mere consent of the creditors or an offer of full payment to them is insufficient. The Court must consider the interests of commercial morality, not merely the wishes of the creditors or contributories. The jurisdiction to stay can be used to revive the company or its business and not merely for the benefit of its creditors. This jurisdiction certainly cannot be used to acquire immovable properties or assets of the company at some throwaway price or at a price that bears no proportion to the price that the liquidator could have obtained at a free, fair, transparent public auction.
The scope and import of Section 466 of the Companies Act and the principles on which the Company Court would exercise its powers to stay the proceedings in winding up either altogether or for a limited time on such terms and conditions as it thinks fit. The Appeal Court has held that Section 466(1) confers a discretion on the Court and not a mandate. The discretion must be exercised on the satisfaction that a stay of the proceedings in relation to winding up ought to be granted. The legislature has carefully used the expressions “on proof to the satisfaction” and “ought to be stayed”. Before the Court grants a stay, the statutory requirement is that there must be proof brought before the Court based on which it is satisfied that the proceedings ought to be stayed.
There is no question of this Court for the first time considering the materials on record and deciding whether the discretion should be exercised for grant of stay under Section 466 of the Companies Act. Perhaps, on the ground that there was no substantial change of circumstances or that no material was placed on record to displace the strong findings recorded regarding the motives of the first and third Respondents, we would have declined to exercise our discretion and stayed the proceedings under Section 466 of the Companies Act. But that is, to some extent, besides the point. The impugned orders deserve to be set aside for failure to consider vital material.
Conclusion - i) The principles governing the exercise of discretion under Section 466 of the Companies Act were not noticed and applied at either stage. ii) Mere settlement of the creditors or workers does not entitle any party to a stay of the winding up proceedings under Section 466 of the Companies Act.
The stay on the winding-up proceedings of the said company is dissolved - the impugned orders set aside - appeal allowed.
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2025 (1) TMI 1217
Validity of amendment to the Trust Deed by Respondent No.3, which replaced the Appellant as Principal Trustee - legality of actions taken by Respondent No.3 in convening a Board Meeting and revoking the Appellant's managerial powers - HELD THAT:- There exist extreme hostilities between entire family members and the Ld. Tribunal has also noted about the disputes inter se and went on to say its earlier orders of dated 19th December, 2024 and dated 27.12.2024 have not been complied with by either of the parties and both groups are trying to protect their own interest by changing management at their own will.
The impugned interim order rather serves to maintain critical corporate stability. It preserves the legally constituted board, including independent directors, ensures uninterrupted banking relationships, and protects Respondent No.1 company’s record and assets. Most notably, it maintains the Appellant’s own position as a director of Respondent No.1. The interim order thus not only prevents an illegal takeover but also protects the interests of 2500 employees, banking relationships, and Respondent No.1 company’s operational stability.
The impugned order has been passed by the Ld. NCLT in exercise of its powers under Section 242(4) of the Act, whereby it is empowered to make any interim order it thinks fit for regulating the conduct of the company pending the final hearing of a petition filed under Section 241-242 of the Act.
Conclusion - The interim orders upheld, maintaining the status quo ante regarding the company's management and shareholding structure.
It is not required to interfere in the interim order of Ld. NCLT - The appeal is accordingly dismissed.
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2025 (1) TMI 1216
Admissibility of application under Section 9 of the Insolvency and Bankruptcy Code (IBC) - barred by the limitation period or not - pre-existing dispute or not - service of demand notice.
Maintainability on the grounds of limitation - multiples dates of default have been mentioned - HELD THAT:- On the question whether the Petition was filed within the limitation period, it is pertinent to note that the last part payment made by the CD on 17.02.2017 is undisputed. Accordingly, the limitation period was extended for 3 years from 18.02.2017, expiring on 17.02.2020. The Petition was admitted and filed on 17.02.2020, making it well within the limitation period.
Even assuming, without prejudice, that the limitation period is reckoned from 17.02.2017 (the date of the last payment), the 3-year period would expire on 16.02.2020, which was a Sunday and a non-working day for the Tribunal and its registry. As per Section 4 of the Limitation Act, read with Rule 3 of the NCLT Rules, the Petition could be validly filed on the next working day, i.e., 17.02.2020, which is when it was indeed filed. Hence, the Petition is still within the limitation period - Appellant’s grounds on limitation cannot be therefore accepted and the application is very much maintainable on this ground.
Whether the Demand Notice in Form-3 dated 15.01.2020 was properly served or not? - HELD THAT:- CD claims that the OC falsely asserted in its affidavit that it did not receive a Reply to the Demand Notice. The CD claims that it duly responded to the Demand Notice, with supporting postal receipts provided as evidence. The tracking reports were unavailable due to the operational challenges during the COVID-19 pandemic. It is claimed that CD replied to the Demand Notice within the statutory period and raised a legitimate dispute regarding the claimed amount. Consequently, the Order violates Section 9(5) of the Insolvency and Bankruptcy Code (IBC), as the application is incomplete and OC has not received the reply to the demand notice and for that reason should be set aside by this Tribunal - there are no infirmity in the conclusion of the Adjudicating Authority on this hyper-technical ground raised by the Appellant.
Pre-existing dispute or not - HELD THAT:- There is no material placed on record to show that the dispute existed between the parties much before the issuance of the Demand Notice. There is no correspondence between the parties to that effect. Further only after the service of Demand Notice and filing of Petition by OC, CD disputed it. Further, on the one hand, the Appellant contends pre-existing dispute, while on other hand, assumes an entirely contradictory position that the entire debt amount was paid by way of cash in instalments during the period of 03.05.2018 to 27.02.2019. Further, the CD claims to have passed entries of cash payments in its ledger annexed at Page No. 158 to 160 of APB while acknowledging debt payable by the CD for principal debt amount of Rs 11,69,948/- as on 01.04.2018. These are self-serving accounts of OC. Except for CD’s ledger account, with large number of small value cash entries, without producing any evidence, including any cash receipts – nothing else has been placed on record. The assertions of the Appellant cannot be, therefore, relied upon basis such material record. Hence, it can be safely concluded that there is no pre-existing dispute regarding the claim in hand.
Conclusion - i) The application was filed within the limitation period, as the last payment extended the limitation period, and the application was filed timely. ii) The Demand Notice was properly served and that no pre-existing dispute was established. iii) The application was maintainable despite the OC being an unregistered partnership firm, as the bar under Section 69(2) of the Indian Partnership Act does not apply to insolvency applications.
The Appeal is, therefore, dismissed and Section 9 proceedings against the CD must go on.
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2025 (1) TMI 1215
Liquidation of the Corporate Debtor - CoC had not taken full initiatives to resolve the Corporate Debtor which is against the spirit of the Code - Section 7 application was admitted on forged documents - Request to Appellate Tribunal not to consider such additional document filed by the Respondent No. 1.
The CoC had not taken full initiative to resolve the Corporate Debtor against the spirit of the Code - HELD THAT:- Section 33(2) of the Code leaves hardly any choice to the Adjudicating Authority, once the CoC decide with the 66% voting rights to liquidate the Corporate Debtor. In the present case, the resolution to liquidate was passed by 100% votes in CoC. Hence, there are no error in the Impugned Order.
Section 7 application was admitted on forged documents filed by the Respondent No. 1 - HELD THAT:- The Section 7 application was admitted on forged documents filed by the Respondent No. 1 and the conduct of the Resolution Professional is not good as it accepted the claims of the Financial Creditor without verification.
Additional documents of ledger accounts of SVC Bank were introduced to harm the Corporate Debtor - HELD THAT:- These documents were part of the judicial record and necessary for determining the validity of the Section 7 application. There are no merit in the Appellant's objections to the introduction of these documents.
Alleged manipulation of record by Financial Creditor - HELD THAT:- No concrete evidenced has been reproduced by the Appellant to establish the said allegations. It is already noted that the documents produced by the SVC Bank clearly stipulate responsibilities of the Corporate Debtor as co-borrower and Corporate Guarantor. There are no merit in the submissions made on this account by the Appellant.
Conclusion - i) The CoC's decision to liquidate, supported by 100% voting, was in compliance with Section 33(2) of the Code, which mandates liquidation if the CoC resolves to do so with the requisite majority. ii) There are no error in the Adjudicating Authority's order to liquidate, given the absence of assets and the lack of viable resolution options.
There are no error in the CoC decision to the Liquidator of the Corporate Debtor which was accepted by the Adjudicating Authority in the Impugned Order - appeal dismissed.
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2025 (1) TMI 1214
Exclusion of period from 12.04.2023 until 01.07.2024 from the period of implementation of the Resolution Plan approved by NCLT - effect of interim order, which restrained the Successful Resolution Applicant (SRA) from transferring any units, in the Resolution plan - HELD THAT:- The present is not a case where after approval of the Resolution Plan, the Applicant has not taken any steps towards the implementation of the Resolution Plan and has not infused any funds. It is the case of the Appellants that although an amount of Rs.10 crores was to be infused by the SRA. The fact that SRA has infused Rs.7 crores, is not even disputed and it is an admitted fact. In the Application, which was filed before the Adjudicating Authority, the SRA has given the details of various steps taken by it towards implementation of the Plan and amount spent by the SRA towards the implementation of the Plan - Huge amount has been spent by the SRA for obtaining the renewal. As noted above the SRA has also submitted an application to the State Environment Impact Assessment Authority for securing the grant of environment clearance and amount has been deposited where on 28.05.2024, the State Environment Impact Assessment Authority has recommended for grant of environmental clearance. Electricity connection has been restored by Dakshin Haryana Vidyut Nigam, Faridabad.
The present is a case where approval of Resolution Plan was challenged before this Tribunal in four Appeal(s), in which Appeal(s), interim order was also passed on 12.04.2023 and Appeal(s) could be ultimately decided on 01.07.2024, rejecting the challenge to the approval of Resolution Plan by elaborate consideration. The period, which was sought to be excluded by the SRA is period from which interim order was started operating against the SRA. When the approval of Resolution Plan is challenged in the Appeal(s), and the issues remained sub-judice and pending consideration and an interim order was also passed by this tribunal, there are no error in the order of the Adjudicating Authority, excluding the period from implementation of the Resolution Plan, during which an interim order was operating against the SRA. As noted above, the SRA has moved an Application in the Appeal(s) for vacation of the interim order, which Application could not be decided and remained pending till the dismissal of the Appeal till 01.07.2024.
The substantial steps were taken by the SRA to implement the Resolution Plan and various steps were taken by the SRA to implement the Plan as has been pleaded in the Application filed by the SRA as well as in the affidavit in the present Appeal. It is also noticed above that SRA is none-else than the Association of allottees, which is representing about 250 allottees. One of the Association of the allottees had also challenged the Resolution Plan, which Appeal was also dismissed.
Conclusion - i) The interim order passed by this Tribunal clearly prohibited the SRA to realize the aforesaid amount of Rs.50 crores. ii) The interim orders affecting the financial execution of a Resolution Plan justify the exclusion of time from the implementation timeline. iii) There are no error in the order passed by the Adjudicating Authority dated 28.08.2024 excluding the period from 12.04.2023 to 01.07.2024, during which the interim order passed by this Tribunal in the Appeal(s) challenging the approval of Resolution Plan was in operation.
Appeal dismissed.
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2025 (1) TMI 1213
Classification of services - Works Contract Service or not - service of construction, installation & maintenance of petrol bunks owned by M/s. HPCL and M/s BPCL - recovery of tax not paid/levied u/s 73 (1) of the Finance Act, 1994 - levy of penalty under Sections 76, 77 and 78 of the Finance Act, 1994.
HELD THAT:- A perusal at the order is indicative of an unequivocal fact that after issuance of the SCN, the petitioner has paid the entire amount of Service Tax including the penalty, long before the issuance of SCN in the year 2009 itself. The SCN comes to be issued in the year 2013. The proceedings are instituted after the receipt of the entire amount of arrears and default Service Tax and penalty on the score that the entire penalty or interest is not paid by the petitioner. The order quoted captures the fact that the amount of Rs.3,19,129/- is also appropriated by the authority during the investigation towards the demand. Therefore, there is nothing today to be paid by the petitioner as long before the SCN, an amount of Rs.20,64,849/- had been paid which is recorded by the authority. The order also records that it was the payment of service tax and interest that was paid by the petitioner and later on account of the proceedings, an amount of Rs.3,19,129/- is also appropriated.
The proceedings have gone on only to the satisfaction of the respondents – Department as there was nothing to be paid or recovered from the hands of the petitioner. The proceedings itself were redundant insofar as the principal amount was concerned and the interest is also paid by the petitioner or appropriated by the department from the petitioner. Reference being made to the judgment rendered by the Division Bench of this Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT], in the circumstance becomes opposite and the Division Bench interpreting Sections 73 and 76 of the Finance Act, 1994 has held that 'The assessee has paid both the service tax and interest for delayed payments before issue of show cause notice under the Act. Sub-sec. (3) of Section 73 of the Finance Act, 1994 categorically states, after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-sec. (1) in respect of the amount so paid. Therefore, authorities have no authority to initiate proceedings for recovery of penalty under Sec. 76 of the Act.'
Conclusion - i) The classification of the petitioner's services under 'Works Contract Service' confirmed. ii) The impugned orders and notices quashed, acknowledging that the petitioner had settled all dues prior to the show cause notice, rendering further proceedings redundant.
Petition allowed.
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2025 (1) TMI 1212
Eligibility for a rebate on the provision of investment advisory services classified under banking and other financial services as per Section 65(105)(zm) of the Finance Act, 1994 - rebate under N/N. 11/2005-ST dated 19.04.2005 - HELD THAT:- It is noted that sub-rule (2) of Rule 3 of Export of Services Rules has laid down a condition that unless a payment is received in convertible foreign exchange, the service is not treated as export. Further, there is one more condition of provision of export of service and that is specified for various services in various clauses of sub-rule (1) of Rule 3 ibid. For the service provided by the appellant which is classifiable under Section 65(105)(zm), clause (c) of clause (iii) of sub-rule (1) of Rule 3 of Export of Services Rules, 2005 is applicable and according to the said provision, the export of taxable service is on provision of such service to a recipient located outside India. In the present case the invoice is raised on 29.06.2012 which is the date prior to the date on which Notification No. 11/2005-ST was rescinded.
The order passed by the original authority allowing refund was in accordance with law - Appeal allowed.
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2025 (1) TMI 1211
CENVAT Credit - input services used for providing assistance in trading of the goods - applicability of provisions of sub-rule (7) of Rule 4 of Cenvat Credit Rules, 2004 - SCN issued without allocation of mind - extended period of limitation - penalties.
Extended period of limitation - HELD THAT:- The original authority nor the show cause notice indicates as to which information was required by Revenue in accordance with which provision of law that was not filed or submitted by the appellant and how there was wilful misstatement or suppression of fact to invoke extended period of limitation. In the absence of any such finding by the original authority, the present proceedings are hit by limitation and that ground alone is enough for setting aside the impugned order.
Disallowance of CENVAT Credit on the ground that cenvat credit was not admissible since the appellant was engaged in trading of the goods - HELD THAT:- There is no finding that the appellant has not received the input services on the basis of which the appellant has taken the cenvat credit nor there is any finding that the said input services did not suffer service tax. Therefore the appellant had received input services from various input service providers. The provisions of Cenvat Credit Rules do not have any provision wherein the cenvat credit availed lapses. There is no examination as to how the said input services were not eligible for providing output services such as colocation services, hosting services etc. Therefore, the finding of the original authority that cenvat credit of Rs.634.05 crores were not admissible to the appellant has no basis and, therefore, the said finding is set aside.
The appellant had received input services from various input service providers. The provisions of Cenvat Credit Rules do not have any provision wherein the cenvat credit availed lapses. There is no examination as to how the said input services were not eligible for providing output services such as colocation services, hosting services etc. Therefore, the finding of the original authority that cenvat credit of Rs.634.05 crores were not admissible to the appellant has no basis and, therefore, the said finding is set aside.
Demand on the advances received from customers - HELD THAT:- It is noted that by the time the show cause notice was issued, on 04.04.2017 the said amount was paid back. Therefore, it was not available with the appellant as advances from customers as on the date of issue of show cause notice. Therefore, the demand on account of the same amounting to Rs.78.08 crores confirmed by the original authority does not sustain.
Demand of service tax of Rs.583.26 crores under proviso to sub-section (1) of Section 73 of Finance Act, 1994 - HELD THAT:- The issue of valuation and taxability both are involved in the present issue. As can be seen from the record, the current liability which stood as on 31.03.2018 was Rs.3888.40 crores. The operation of Chapter V of Finance Act, 1994 which included charging section for charging of service tax and Section 67 for determination of value for assessment of service tax ceased to exist prospectively with effect from 01.07.2017. Therefore, both the provisions, viz. charging section i.e. Section 66B and Section 67 on valuation of taxable services for charging service tax were not operational for levy and collection of service tax as on 31.03.2018 and, therefore, confirmation of demand of Rs.583.26 is not sustainable.
Recovery of interest on payment of service tax - HELD THAT:- On the basis of Rule 3 of Point of Taxation Rules which provides that point of taxation shall be the date of invoice or the date of payment whichever is earlier, the original authority has ordered for recovery of interest on payment of service tax of Rs.52.45 crores which was paid during the year 2016-17. An adjustment was made in balance of unsecured loans amount availed from M/s. Reliance Infocom Engineering Pvt. Ltd. for receipt of payment in respect of the invoices raised for provision of servie and the said loan was received by the appellant in 2014 and, therefore, learned original authority ordered for recovery of interest from the earlier period - the provisions of Rule 3 of Point of Taxation Rules are not applicable in the present case. Therefore, the order by the original authority for recovery of interest on payment of service tax of Rs.52.45 crores does not sustain.
Interest and penalties - HELD THAT:- Since no part of the order-in-original either disallowing cenvat credit or confirming the demand of service tax sustains the order for recovery of interest on the same and imposition of penalties does not sustain.
Conclusion - CENVAT credit cannot be denied without substantial evidence of misuse or non-compliance with the Cenvat Credit Rules. The advances incorrectly classified due to accounting errors, and subsequently rectified, do not attract service tax Demand of interest and penalties do not sustain. The present proceedings are hit by limitation and that ground alone is enough for setting aside the impugned order.
Appeal allowed.
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2025 (1) TMI 1210
CENVAT Credit - input services - gardening services - excess availment of Cenvat credit on capital goods, in violation of the Cenvat Credit Rules - discrepancies between the credit register and ST-3 returns - availment of credit without any supporting document in violation of Rule 9(5) of the CCR - short-paid Education Cess and Secondary & Higher Education Cess by cross-utilizing available credit - interest on late payment of service tax for September 2011 - Short payment of Service tax during the period from April 2012 to June 2012 - Non-payment of amount under Rule 6(3) of the Credit Rules related to exempted village panchayat telephones - Non-payment of amount under Rule 3(5A)(b) of the Credit Rules on sale of capital goods as scrap - Non-payment of interest due to date of tax liability as per the POT Rules - extended period of limitation.
CENVAT Credit on the basis of the difference noticed in the ST-3 returns and the Cenvat Credit Register - HELD THAT:- The difference between the amount of Cenvat credit availed as reflected in the Cenvat Credit Register than the one recorded in the ST-3 returns is an admitted fact, however, the contention of appellant is that the Cenvat Credit Register shows that 100% credit was taken by the appellant during the period in dispute in their credit register but only 50% thereof as has been utilized is reflected in their ST-3 returns. The difference is due to the balance 50% of the amount which was not utilized and therefore was not shown in the ST-3 returns - The perusal makes it clear abundantly that it was the statutory mandate on the appellant-assessee to utilize only 50% of the Cenvat credit availed on the capital goods. The department has not produced any evidence to falsify the same.
In the case of J.K. TYRE & INDUSTRIES LTD. VERSUS ASST. COMMR. OF C. EX., MYSORE [2016 (11) TMI 911 - CESTAT BANGALORE - LB], Tribunal Large Bench has come to the conclusion that interest liability would not arise when the assessee had merely availed credit and had reversed the same before utilizing the availed credit for remittance of duty.
The noticed difference was statutorily permissible and has been denied to be ground for raising the demand of reversal. The unutilized credit has clearly been held as good as the non availed Cenvat credit. In the light of this discussion, there are no justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside.
CENVAT credit - Input services including the security services are not the eligible input services - availment of Cenvat credit on the input services has been denied for the reason that there is no mention of supply of any security services on the invoices based whereupon the Cenvat credit has been availed and no evidence about supply of skilled manpower - HELD THAT:- The difference of supply of unskilled and skilled labour has wrongly been created by the adjudicating authority below as the same is not relevant to decided as to whether the service provided shall qualify for input service or not. It appears to be an admitted fact that manpower was supplied by the service provider to M/s. BSNL for being deployed at various offices of BSNL/appellant. The work power irrespective skilled or unskilled was meant to facilitate M/s. BSNL to render their output telephonic services. The service provided is eligible input service. Hence, denial of availment of Cenvat credit on the eligible input services is wrong. The findings in the order under challenge are liable to be set aside to this extent as well. The demand of Cenvat credit amounting to Rs.59,94,339/- is therefore set aside.
Cenvat credit availed on capital goods was required to be reversed in terms of Rule 3(5A) of Cevat Credit Rules, 2004 - HELD THAT:- The Rule 3(5A) cannot apply in a situation where Cenvat credit has not been availed on capital goods. In the present case, the appellant’s plea is that the scrap material in question pertains to those capital goods on which the appellant had not availed the Cenvat credit, as majority of those capital goods were purchased prior to 2004 i.e. prior the enactment of Cenvat Credit Rules. The details of those capital goods were duly been provided by the appellants. The onus was of the department to prove that the appellant has availed the Cenvat credit on the capital goods which later got cleared as scrap but there is no such evidence produce. Hence, there is no rebuttal to the said contention of the appellant - The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable.
Extended period of limitation - HELD THAT:- The appellant had been regularly filing its ST-3 returns and its records were being regularly audited by the department. Thus, the entire material was already to the notice of the department. In such circumstances, the appellant cannot be held accountable for not disclosing the activity of making provision made by it, specifically, when the same was not required in the law. It is held that suppression of facts has wrongly been alleged against the appellant - This Tribunal in the case of INDIAN OIL CORPORATION LTD. VERSUS COMMISSIONER OF C. EX., AHMEDABAD [2013 (9) TMI 310 - CESTAT AHMEDABAD] held that PSU cannot have mala fide intentions for non-disharge of duty and there cannot be an allegations of intention to evade duty. Hon’ble High Court of Punjab & Haryana in the case of COMMISSIONER VERSUS MARKFED REFINED OIL & ALLIED INDUS [2009 (7) TMI 1204 - PUNJAB AND HARYANA HIGH COURT] held that once the assessee is government organization, it is not easy to infer any evasion of duty much less its intention to do so - The suppression of facts was wrongly alleged, and the extended period for issuing the show cause notice was unjustified.
Conclusion - i) There are no justification when the demand is confirmed based on the noticed difference in ST-3 returns than to the credit register. The demand of excess Cenvat credit of Rs.1,79,11,286/- is therefore set aside. ii) The work power irrespective skilled or unskilled was meant to facilitate M/s. BSNL to render their output telephonic services. The service provided is eligible input service. Hence, denial of availment of Cenvat credit on the eligible input services is wrong. The findings in the order under challenge are liable to be set aside to this extent as well. iii) The sale of capital goods as waste in the impugned show cause notice is with respect to those capital goods on which the appellant had not availed the Cenvat credit. The confirmation of demand is therefore not sustainable. iv) The suppression of facts was wrongly alleged, and the extended period for issuing the show cause notice was unjustified.
Appeal allowed.
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2025 (1) TMI 1209
Recovery of wrongly taken/availed Cenvat credit of Input Services - typographical error in the AG Audit report/SCN vis-à-vis. the challan numbers - HELD THAT:- It is a settled law that the Cenvat credit scheme is a beneficial scheme for the taxpayers and the benefit of this scheme cannot be blocked or taken away from the taxpayers on technical and procedural grounds. The appellate authority failed to appreciate that both Service Tax Payable Registers and Service Tax Credit Registers were signed by authorized representative at the end of each month where summary of the transactions of the month was prepared and tabulated at the month end. It appears that the appellate authority has overlooked the signatures in both the registers in discarding these registers as merely a piece of paper. The objection of the appellate authority that the registers were maintained manually is without any basis. He failed to appreciate that the Government has not mandated that records of Service Tax Payable Register and Service Tax Credit Register should be maintained by the taxpayer or on other electronic device. These records are being maintained by the appellant since beginning and no objection was raised by the Department or by the Audit Team. Hence the objection of the appellate authority to the effect that the registers are maintained manually by the appellant is without any valid basis and the same is not sustainable in the eyes of law.
Disallowance of credit for want of the correct challan - HELD THAT:- The challan number in show cause notice (28067) is nothing but a typographical error. Substantial benefit which is otherwise available to the appellant cannot be denied merely on the basis of the typographical error that too, committed at the end of the department. Similar error has been committed with respect to challan filed with Entry No. 1669 dated 06.07.2017. Only one challan admittedly pertains to the said entry. Appellant has claimed it to be the Challan bearing No. 29935 dated 06.07.2017. For the same reason as above mentioning of 29936 as challan number is held to be nothing but a typographical error.
Conclusion - The procedural or technical errors, such as typographical mistakes, should not hinder the entitlement to Cenvat credit, especially when the appellant provides substantial evidence to support their claim - credit remains allowed.
Appeal allowed.
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2025 (1) TMI 1208
Applicability of Service Tax on the markup charged by the appellant, M/s Balaji Integrated Shipping India Pvt Ltd., on ocean freight services provided to their clients - HELD THAT:- Reliance placed on BIZSOLINDIA SERVICES PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE - III [2016 (5) TMI 134 - CESTAT MUMBAI], wherein the Tribunal considered that since the appellant has been charging more than the expenditure incurred by him as pure agent, while billing the client, he was liable to Service Tax. This reliance by the Commissioner (Appeals) in the impugned order is misplaced, inasmuch as the issue here is that the appellants were trading in space, whereby, they were buying in bulk and then selling to different clients in due course as per their requirement. While selling, they were charging more than what they have paid to the shipping lines, etc. The appellant never said that they are acting as pure agent for this charge. In so far as the markups are concerned, admittedly there is no separate Service Tax liability on the ocean freight, which has been considered as not chargeable to Service Tax. The markup in respect of the activity, which is not chargeable to Service Tax cannot be fastened to some other activities without having clear evidence that there was some service provided by them in integrated manner.
Therefore, the profit earned on account of trading in space cannot be added to the gross value of other services without bringing sufficient evidence to support that this was a ploy adopted by the appellant to charge towards the CFS charges by suppressing the actual value of CFS. No such specific charges have been made out in the SCN.
Conclusion - The markup on ocean freight constitutes a trading profit, not a service charge, and thus is not subject to Service Tax.
Appeal allowed.
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2025 (1) TMI 1207
Liability of appellant, a property developer, to pay service tax on the amounts received as consideration from Customers towards rendering the said service - Construction of Residential Complex Service - period from April 2009 to June 2010 - levy of penalty.
Whether the Appellant is liable to pay service tax under the construction of residential complex service? - HELD THAT:- The issue is no more res integra as this Tribunal had in respect of the same issue involving the Appellant, for earlier period from 16.06.2005 to 31.03.2009 [2019 (3) TMI 1389 - CESTAT CHENNAI] set aside the demand of service tax on construction of residential complex service.
It is also found that the actual service with regard to construction of flats was rendered by M/s. Golden Homes Pvt. Ltd., a contractor employed by the Appellant for rendering the service on a turnkey basis in terms of the Turnkey Project Contract, in terms of agreement dated 14.04.2004 entered by the Appellant with the said contractor. Therefore, any demand of service tax from the Appellant who is the promoter is not legally proper and sustainable in the eyes of law.
Levy of penalty - HELD THAT:- The penalty imposed is unjustified.
Conclusion - The appellant was not liable for service tax under the "Construction of Residential Complex Service" and that the penalty imposed was unjustified.
Appeal allowed.
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2025 (1) TMI 1206
Benefit of reduced service tax liability in terms of N/N. 30/2012-ST dated 20.03.2012 - appellant is a cooperative society - service tax on amounts received as reimbursements, such as salaries to guards, PF, and ESI - Invocation of Extended period of limitation.
The demand of service tax denying appellant the benefit of N/N. 30/2012 date 20.03.2012 - HELD THAT:- The table given in the notification, Para B thereof, the Entry No. 8 exempts the services provided by way of supply of manpower for any person to the extent of 75% which has to be paid by the service recipient. The appellant admittedly is a co-operative society registered under Rajasthan Co-operative Society Act, 2001. The copy of certificate of registration is also produced by the appellant. There is no evidence to the contrary by the department. In the light of above observations with respect to N/N. 30/2012, the appellant being a co-operative society was very much eligible for the abatement/exemption of 75% of the tax liability. The Order-in-Original has denied the said exemption holding the appellant is not the ‘Association of Person’. The said comparison is not required for the purpose of the impugned notification. It is an admitted fact that 25% of tax liability has been discharged by the appellant. In light of this discussion the confirmation of remaining 75% of the gross value as service tax from appellant is not sustainable.
The demand of service tax on the amount claimed to have been received as pure agent and reimbursable - HELD THAT:- The issue stands already decided by Hon’ble Supreme Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT]. In light of the said decision the demand on the amount received as pure agents or on the amount of reimbursement is also not sustainable. Order to that extent is also liable to be set aside.
Invocation of Extended period of limitation - HELD THAT:- The appellant was not liable to the tax as has been proposed by the impugned show cause notice and has been confirmed by the impugned order. Hence, the question of evasion of tax becomes redundant. Also no question arises with the appellant to have an intent to evade the same. Accordingly, the extended period has wrongly been invoked.
Conclusion - The cooperative societies are entitled to specific tax abatements under N/N. 30/2012-ST and that reimbursements do not constitute taxable service value. The extended period has wrongly been invoked.
Appeal allowed.
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2025 (1) TMI 1205
Classification of services - intermediary services or not - applicability of Rule 9 of Place of Provision of Service Rules, 2012 - denial of benefit of export of service - HELD THAT:- The arrangement between the Respondent and their overseas clients and Indian buyers of the goods are not in dispute. All the facts as stated clearly points out that there is only a by-party agreement with regards to the identification and introduction of prospective buyers for their foreign clients. There are no tripartite agreement.
Mumbai Bench has in case of IDEX INDIA PVT. LTD. VERSUS COMMISSIONER OF CGST, MUMBAI EAST [2023 (2) TMI 482 - CESTAT MUMBAI] has held that 'The supplier of main service may decide to outsource the supply of main service, either fully or partly, to one or more sub-contractors. Such sub-contractor provides the main supply, either fully or a part thereof and does not merely arrange or facilitate the main supply between the principal supplier and his customers and therefore clearly not an intermediary. Who is an 'intermediary' and what is ‘intermediary service’ has been clarified by Central Board of Indirect Taxes and Customs (C.B.I. & C.) vide Guidance Note dated 20-6-2012 and under GST regime also a clarification has been issued by C.B.I. & C. on 20-9-2021 both of which are in line with the discussions made hereinabove about ‘intermediary’. In view of the facts involved herein the appellant cannot be termed as an ‘intermediary.’'
In case of M/S. CUBE HIGHWAYS AND TRANSPORTATION ASSETS ADVISOR PRIVATE LIMITED VERSUS ASSISTANT COMMISSIONER CGST DIVISION & ORS. [2023 (8) TMI 980 - DELHI HIGH COURT], Hon’ble Delhi High Court observed that 'implicit in the concept of an ‘Intermediary’ that there are three parties, namely, the supplier of principal service; the recipient of the principal service and an intermediary facilitating or arranging the said supply. Where a party renders advisory or consultancy services on its own account and does not merely arrange it from another supplier or facilitate such supply, there are only two entities, namely, service provider and the service recipient. In such a case, rendering of consultancy services cannot be considered as ‘Intermediary Services’ or services as an ‘Intermediary’.'
Conclusion - An intermediary requires a tripartite arrangement, which was absent in this case. The Respondents provided services directly to their overseas clients, not facilitating a supply between two parties. The services provided on one's own account do not constitute intermediary services.
In absence of any such tripartite agreement there are no merits in the appeal filed by the Revenue - appeal dismissed.
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2025 (1) TMI 1204
Levy of service tax - discount/commission/incentives received from M/s. Vodafone Digilink by way of marketing, selling and distribution of Vodafone products - HELD THAT:- In Chote Lal Radhey Shyam [2015 (11) TMI 979 - CESTAT ALLAHABAD], a Division Bench of this Tribunal while examining this issue, held that 'in this case, BSNL had already paid service tax on the sim cards and recharge coupons sold to the franchisee and again demanding service tax from the franchisee would amount to double taxation which is not permissible in law. Secondly, we find that the appellant is only engaged in purchase and sale of sim cards and recharge coupons and his relationship with BSNL is of principal-to-principal basis. The appellant cannot be termed as an agent of BSNL.'
Conclusion - The appellant was not liable for service tax on the commissions or incentives received from Vodafone.
Appeal allowed.
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2025 (1) TMI 1203
Condonation of delay of 205 days in filing a revision application under Section 28(2) of the Uttar Pradesh VAT Act - sufficient cause for delay present or not - HELD THAT:- The record shows that the limitation for filing the revision was up to 23.09.2023, but the matter was presented, for seeking permission for filing the revision, before the legal committee on 18.10.2023 to which no proper explanation has been submitted and even after the receipt of the permission for filing of the revision on 20.11.2023, , the revision has not been filed immediately without any further delay. In the application, various dates have been mentioned but the copy of the letters have been annexed surprisingly for the first time in the rejoinder affidavit trying to justify the delay. However, the emphasis has been made that the officers were busy in finalizing the proceedings of Assessment Years 2017-18, 2018-19 & 2019-20, but no proper explanation for day to day delay was submitted after getting the permission from the legal committee for filing the revision in October, 2023.
This Court in the case of STATE OF U.P. AND 3 OTHERS VERSUS ARPITA SHUKLA AND 2 OTHERS [2025 (1) TMI 1091 - ALLAHABAD HIGH COURT].] has not condoned the delay of 179 days. It was held in the case that 'The affidavit, which has been filed, does not give sufficient cause for the delay of 179 days in filing the appeal inasmuch as there are large gaps in affidavit wherein the period spent between 22.5.2024 till 13.9.2024 has nowhere been explained/adverted to despite, as noticed hereinbefore, the fact that the Court had granted only three months for the compliance. The manner in which the direction including time line, as indicated by the Court, has been taken and thereafter also the proceedings of the matter at snail pace cannot be countenanced in a case, wherein the direction by the Court only pertains to reconsideration of the matter by the appellants.'
Conclusion - The reasons provided by the revisionist were insufficient to justify the delay. As a result, the delay condonation application was dismissed, leading to the dismissal of the revision application itself.
The instant revision fails as no proper explanation has been submitted for condoning the delay in filing the instant revision, hence the delay condonation application is rejected.
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2025 (1) TMI 1202
Disallowance for depreciation claim on machinery - AO completed the assessment u/s 144 - HELD THAT:- When the Director of the appellant had given a statement admitting to complete the assessment by disallowing the depreciation claim, the appellant cannot be an aggrieved person to file an appeal as against the assessment. Might be only to overcome the same, the appellant would have made a futile submission before the Tribunal that the statement was obtained by coercion.
Counsel by placing reliance on the decision of Avasarala Technologies Ltd.[2015 (8) TMI 521 - SC ORDER] submitted that once the purchase of machinery itself was found to be false and the transaction was sham, the claim of depreciation cannot be sustained. In the instant case also, from the fact that the seller was only dealing with textiles and was not in manufacture of any machinery, the sworn statement recorded to the effect that the invoice was prepared without actual supply of the machinery for the purpose of availing finance, the machineries were not available on the date of visit by the AO and no records were submitted to substantiate the supply of machineries and the appellant taking contrary stands at different points of time, it is clear that no actual supply of machinery was made through the invoice. Further inspite of sufficient opportunities, the assessee failed to submit any records in respect of the usage of the machinery and therefore the Tribunal had rightly allowed the appeal and deleted the disallowance made by the appellate authority.
Substantial questions of law are answered as against the appellant and in favour of the Revenue.
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2025 (1) TMI 1201
TDS u/s 195 - disallowance u/s 40(a)(i) - applicability of the DTAA between India and the USA - Whether services rendered satisfies the definition of "Fees for Included Services"? - HELD THAT:- Services emanating from the Agreement dated 28.11.2016 was not placed in legible from before the AO, therefore, AO could not look at correct nature of services.
The issue that identical matter has been examined in AY 2017-18 were emanating from the same Agreement or not was also not known to the AO nor the ld. CIT(A). The No PE certificate submitted by the assessee now was also not available with lower authorities. It is contended that except agreement, nothing else was asked for by the ld. AO. Now it has been submitted before us, legible agreement, no PE certificate of Tevlon LLC USA, therefore, we restore the whole issue back to the file of ld. AO with a direction to the assessee to show that the income of Tevlon LLC USA is business income as per Article 5 & 7 of the DTAA as business income applies to it. Alternatively, the Assessee may also prove that provisions of Article 12(4) of that including ‘make Available test’ applies to the facts of the case - Appeal filed by the assessee is allowed for statistical purposes.
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2025 (1) TMI 1200
Unexplained cash deposits - treating the deposits with the bank unexplained - HELD THAT:- During the course of appeal proceedings, the assessee had filed details of land records before the ld. CIT(A) as well as bank statements. It was claimed by the assessee before the ld. CIT(A) that cash deposit to the tune of Rs. 10 lakhs was arising either out of cash withdrawals from the bank accounts and/or withdrawal from KCC(Kisan Credit Card)and/or from the sale of crops. Assessee had also enclosed bank statements and land records.
Assessee claimed that his only son Mrityunjay was looking after the record keeping, who was suffering from prolonged illness (who ultimately died), and the assessee was not aware of the assessment proceedings. The assessee being an aged person and illiterate farmer was not having smart phone and the assessee was not aware of the proceedings before the AO.
Assessee also claimed that the assessee’s only source of income is from agriculture, which is exempt from tax. Despite all the information as well evidences furnished by the assessee, CIT(Appeals) did not consider the aforesaid evidences in proper perspective, which were in the nature of additional evidences filed for the first time before ld. CIT(A) as the CIT(A) did not made any verification and/or enquiry wrt additional evidences filed by the assessee, nor does the CIT(A) called for any remand report from the AO, and dismissed the appeal of the assessee.
CIT(Appeals) of his own even did not deem it necessary to conduct any enquiry/verification as is required u/s. 250(4) of the Act, despite that land records as well bank statements were filed by the assessee before ld. CIT(A) as additional evidences, nor it was considered fit by ld. CIT(A) to direct AO to make necessary verifications /enquiries as to the claims, contentions and additional evidences filed by the assessee.
contentions and additional evidences filed by the assessee ought to have been admitted by the ld. CIT(A) and proper verification/enquiry ought to have been done by the CIT(A) as is required u/s 250(4), or the CIT(A) ought to have directed the Assessing Officer to make proper enquiry with respect to additional evidence filed by the assessee such as records of land holding, details of sale of crops, bank statements etc. and furnish remand report to the ld. CIT(A)(Rule 46A) - Appeal of the assessee is allowed for statistical purposes.
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2025 (1) TMI 1199
Recovery of outstanding dues - Challenge to impugned appellate order dated 24th October, 2024 passed by the respondent no.3 - reliance placed upon Circular No.224/18/2024-GST dated 11th July, 2024 issued by the Ministry of Finance - non-constitution of Tribunal - HELD THAT:- Having heard the learned advocates appearing for the respective parties and having considered the materials on record as also taking note of the fact that the Appellate Tribunal is yet to be constituted, the petition should be heard.
Since, the petitioner has been able to make out a prima facie case, there shall be an unconditional stay of the demand of the Appellate order dated 24th October, 2024, for a period of two weeks from date - In the event, the petitioner makes payment of 10% of the balance amount of tax in dispute, in addition to the amount already deposited in terms of Section 107(6) of the said Act, within two weeks from date, the interim order passed herein, shall continue till the disposal of the writ petition or until further order, whichever is earlier.
Let affidavit-in-opposition to the present writ petition be filed within a period of six weeks from date, reply, if any, be filed within one week thereafter.
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