|
Advanced Search Options
Case Laws
Showing 361 to 380 of 1182 Records
-
2025 (2) TMI 822
Reopening of assessment - non issuing and serving the notice u/s 143(2) - on the basis of AIR information, case of the assessee was reopened by AO u/s 147 -HELD THAT:- Keeping in view the legal position as emerging from the several judicial precedents which have taken the consistent stand that issue of notice u/s 143(2) is mandatory even in reassessment proceedings, hence the reassessment order framed by the AO u/s 147 of the Act is not sustainable in the eye of law and is liable to be quashed. Decided in favour of assessee.
-
2025 (2) TMI 821
Late fee levied u/s. 234E - TDS statements filled belatedly - as contented in the absence of enabling provisions u/s. 200A or the Act late fee cannot be levied placing reliance on the decision of Shri Fatheraj Singhvi vs. Union of India [2016 (9) TMI 964 - KARNATAKA HIGH COURT] - HELD THAT:- Admittedly, the quarterly statement of TDS was filed belatedly. No doubt, the late fee was levied for the period prior to the amendment to section 200A of the Act, which came into effect on 01.06.2015 enabling levy of late fee by the CPC. No doubt, it is true that the in the case of Shri Fatheraj Singhvi (supra) took a view that in the absence of charging provision, late fee u/s. 234E of the Act cannot be levied for the period prior to 01.06.2015.
However in the case Sree Narayana Guru Smaraka Sangam Upper Primary School [2017 (1) TMI 1105 - KERALA HIGH COURT] and subsequent decision in the case of Alampally Pressure Testing C. (P) Ltd. [2023 (12) TMI 551 - KERALA HIGH COURT] took a view that late fee as envisaged u/s. 234E of the Act can be levied even for the period prior to 2015 by holding that the law on the date when the impugned notices were issued provided for levy of late fee u/s. 234E, which had been inserted by Finance Act, 2012 w.e.f. 01.07.2012.
We confirm the levy of late u/s. 234E of the Act - Decided in favour of revenue.
-
2025 (2) TMI 820
Revision u/s 263 - AO allowed excess deduction u/s 54F - HELD THAT:- The main fact that the assessee has invested upto Rs.89,10,000/- in the properties which is threshold under Section 54F of the Act and there is no doubt created by the PCIT in the said transfer.
Once the AO has looked into all the aspects when the assessee is claiming deduction u/s 54 which was rightly disallowed by the Assessing Officer and the deduction claimed u/s 54 which was looked into after checking/verifying all the conditions of Section 54F of the Act and thereafter granting the same is not at all erroneous or prejudicial to the interest of the Revenue. Invoking Section 263 of the Act by the PCIT thus is that of review of the Assessment Order which is beyond the scope of Section 263 - Appeal of the assessee is allowed.
-
2025 (2) TMI 819
Addition u/s 68 - bogus LTCG - AO concluded that penny stock frauds concluded by assessee - HELD THAT:- The assessee has provided all necessary documentary evidence to substantiate the purchase and sale of shares, including purchase agreements, Demat account statements, broker confirmations, bank transaction records, and STT payment proof. The broker, Shaswat Stockbrokers Pvt. Ltd., confirmed the transactions in response to a notice under Section 133(6) of the Act. The shares were purchased off-market but subsequently dematerialized and sold through BSE, demonstrating the transparency of the transaction.
AO’s addition under Section 68 is not based on any direct evidence showing that the transactions were accommodation entries. The AO has relied only on general observations regarding penny stock manipulation, without establishing any link between the assessee and such activities. Mere stock price fluctuations, without direct evidence of price rigging or collusion, cannot justify an addition under Section 68 of the Act.
Hon’ble Gujarat High Court, in the case(s) of Pr. CIT v. Himani M. Vakil [2012 (9) TMI 1099 - GUJARAT HIGH COURT] and Maheshchandra G. Vakil [2012 (9) TMI 1098 - GUJARAT HIGH COURT] has held that mere reliance on the Investigation Wing’s report and abnormal price fluctuations cannot justify an addition under Section 68 unless there is specific material to prove that the transaction is a sham.
We find that the assessee has fully discharged the burden of proof by providing all necessary evidence, whereas the Revenue has failed to rebut it with substantive material. AO has neither examined the counterparty nor produced any evidence of collusion or price manipulation. Decided in favour of assessee.
-
2025 (2) TMI 818
Addition u/s 68 - booking accommodation entry of bogus LTCG/STCG in the garb of sale proceeds on sale of shares - assessee failed to discharge the burden cast upon him to prove the LTCG claim and taking note that the SEBI had suspended the sale of this scrip - CIT HELD THAT:- As in assessee’s own case in the previous assessment year, hon’ble Bench has affirmed the decision of the CIT(A) taking into account the contents of the assessment order, the investigation report, the findings of the appellate order and a catena of judicial decisions involving the same penny stock wherein similar additions made by resorting to section 68 of the Act, have been deleted on the ground that the assessee’s discharged the primary onus.
No reason for drawing any divergent view of the matter and in the light of the doctrine of judicial discipline requiring that benches of judicial and quasi-judicial bodies operate on principles of consistency, continuity, and certainty, hold that the addition was rightly deleted by the ld.CIT(A).
Addition u/s 69C - unexplained commission expenditure - AO alleged that the assessee might have incurred unaccounted expenditure on account of payment of commission to the entry operators and accommodation entry providers alleging them to have assisted him to claim bogus Short Term Capital Gain - HELD THAT:- As this ground of appeal is consequential to the main ground of the appeal regarding addition u/s 68 of the Act in respect of exempt LTCG claim. Since ground relating to the addition made u/s 68 of the Act has already been decided in favour of the assessee, this ground is also dismissed.
-
2025 (2) TMI 817
Reopening of assessment u/s 147 - addition of entire credits on account of undisclosed and unexplained income - appellant failed to satisfactorily explain the nature and source of the cash deposit, due to which the assessment order was upheld by the CIT(A) - HELD THAT:- It is an undisputed fact that the date of hearing in respect of the last notice was on 14.08.2024 and on the same day the order u/s 250 of the Act was passed at 15.17 IST. Therefore, the CIT(A) has passed the order without waiting for the reply on the date hearing on 14.08.2024. Be that as it may, the ld. AR has also not filed any evidence to show that the assessee had in fact filed reply on or before 14.08.2024. Considering all these facts, we are of the view that though the assessee was negligent and non-cooperative before the lower authorities, the CIT(A) should have waited for the reply of the assessee till 14.08.2024. The ld. AR requested that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit.
Principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, we hold that the interests of justice would be met in case the AO re-examines the entire issue afresh subject to payment of cost of Rs. 10,000/- (Rupees ten thousand only) by the assessee to the credit of the ‘District Legal Services Authority, Surat’ within three weeks from receipt of this order. Grounds of appeal raised by the assessee are allowed for statistical purposes.
Levy of penalty u/s 271(1)(c) and u/s 271F - Since the matter has been restored to the AO for fresh adjudication, there is no basis at all for levy of penalty u/s 271(1)(c) of the Act. As the penalty order does not survive, the resultant order of CIT(A) is quashed. AO may initiate proceedings u/s 271(1)(c) of the Act during the fresh assessment proceedings, if required conditions are fulfilled. Accordingly, the ground is allowed for statistical purpose.
Levy of penalty u/s 271(1)(b) as assessee did not comply with the notices issued u/s 148, 142(1), 129 - CIT(A) observed that the AO has taken a lenient view by levying penalty for one default, though there were multiple non-compliances by the assessee. The appellant has not proved that there was reasonable cause for the said failures within the meaning of section 273B of the Act. We also find that the AO has been very fair and reasonable in levying penalty of Rs. 10,000/- for one default only in spite of failure of assessee on four occasions to comply with the notices issued by him. It may be mentioned that section 271(1)(b) requires penalty of Rs. 10,000/- for each such failure. Therefore, instead of Rs. 40,0000/-, the AO has levied penalty of Rs. 10,000/-. Hence, we find no reason to differ from the findings of the lower authorities. Accordingly, grounds are dismissed.
-
2025 (2) TMI 816
Revision u/s 263 - CIT on examination of records noted that during the assessment proceedings the Assessee had not proved Genuineness of Loans and Creditworthiness of the Lenders - HELD THAT:- When we apply the provisions of the Section 263 to the Assessment Order it is observed that admittedly the AO during assessment proceedings had not carried out necessary inquiries to prove Creditworthiness of the Lenders, Genuineness of the transaction.
Also admittedly, during the Assessment Proceedings the assessee had not filed any Loan confirmation from Lenders, admittedly one of the Lender had not filed any Return of Income for A.Y.2018-19, and another Lender had shown meager Income in the Return.
Admittedly, the Lenders had no sufficient resources to lend such huge amounts to the assessee without any Interest. During the hearing before this Tribunal, we asked the Ld.AR has the Loan been Repaid? The Ld.AR submitted that the Loan has not yet been repaid. Thus admittedly even after so many years the so called Loan is outstanding and the Lender has not received any Interest. This itself is outside the human probability and explains that the entire transaction is non-genuine.
Thus, we are of the opinion that the Assessment Order was erroneous and prejudicial to the interest of revenue hence we uphold the Order u/s 263.
CIT was right in holding that the assessment order is erroneous and prejudicial as at the time of Assessment AO had not carried out inquiries to prove Genuineness of loan and creditworthiness of lender. Also, we have perused the so called details filed by the Assessee after the Assessment Proceedings, we are of the opinion that even after the Assessment Proceedings, during 263 proceedings, the Assessee has failed to prove the genuineness of the transaction. - Decided against assessee.
-
2025 (2) TMI 815
Addition on account of cash found during the course of search as unexplained cash - whether the CIT(A) is justified in not allowing set off of cash considered unexplained by him against the cash withdrawal ? - HELD THAT:- We note that no document is found in search to come to a conclusion that the amount withdrawn by the assessee from M/s Vijay Industries has been utilized elsewhere. There is no law which prohibits an assessee to keep cash in hand and therefore only because assessee has not given explanation as to why the cash was withdrawn, when he has withdrawn the cash earlier also cannot be a ground to reject the explanation of assessee.
In various cases referred above, it has been held that where no evidence is brought on record that cash withdrawal has been utilized elsewhere, such cash should be considered as available with the assessee. Considering all these facts, we direct the AO to delete the addition made by him.
Unexplained gold and silver jewellery - Once the jewellery and silver articles are considered as belonging to the family as a whole, there does not remain any unexplained gold jewellery.
When the jewellery was found from the bedroom and locker of Nidhi Data, the addition made by Ld. CIT(A) in the hands of assessee is otherwise unjustified. We also found that in respect of the jewellery found from the room & locker of Nidhi Data, assessee has furnished the evidences as to the source of same but without controverting the evidences and the affidavits filed it was not correct to consider any part of gold jewellery found from the bedroom and locker of Nidhi Data as unexplained. Hence the addition of Rs. 27,15,544/- (9,81,744 + 17,33,800) confirmed by the Ld. CIT(A) is deleted.
Silver utensils/ ornaments - We note that from the bedroom and the common room, 12,322.80 gms (3188.800 + 9134) of silver article was found from Nidhi Data. It comprises of 8000 gms owned by Nidhi Data, 1170 gms owned by assessee and 3152.80 gms belonging to the children. Out of it, 8000 gms is considered as explained by AO leaving the remaining silver items at 4322.800 gms but addition has been made for 29,960.05 gms. Thus the addition made is prima facie incorrect. Otherwise also, when the silver article was found in the possession of Nidhi Data, addition made in the hands of assessee is unjustified. We also note that in search no evidence of purchase of silver item was found in search. Therefore, considering the status of family and other material evidences, we direct deletion on account of unexplained silver articles in the hands of assessee.
Aappeal of the assessee is allowed.
-
2025 (2) TMI 814
Rejecting the application for registration u/s. 12AB - no compliance from the assessee on notice issued by CIT(E) - self-certified copies of annual accounts and note on activities of the applicant had not been furnished by the assessee, thus CIT(E) could not verify the objects as well as activities of the assessee-trust
HELD THAT:- AR has contended before us that the assessee is ready to submit all details and evidences needed by the CIT(E) and one more opportunity may be given to the assessee. We find that assessee could not pursue his case before the CIT(E) by filing necessary evidences and documents. Hence, we are of the view that one more opportunity should be given to the assessee to file relevant documents/evidences and to plead his case before the CIT(E). It is settled law that principles of natural justice requires that the affected party is granted sufficient opportunity of being heard to contest his case. Thus we restore the matter back to the file of CIT(E) for de novo adjudication and to pass a speaking order - Grounds of appeal are allowed for statistical purposes.
Rejecting the application u/s 80G(5) due to late filing - As decided in FI FOUNDATION [2024 (9) TMI 424 - ITAT CHANDIGARH] application of the assessee deserves to be examined on merits and cannot be dismissed as barred by limitation. There is no reason as to why the above decision would not be applicable to the facts of the instant appeal, which are similar. Hence, following the above decision, the matter is remitted to the file of CIT(E) to admit the application of the assessee-trust as filed within the stipulated period and examine the same on merits as per law after granting reasonable opportunity of being heard to the assessee
-
2025 (2) TMI 813
Non-fulfilment of export obligation under the EPCG Scheme as per the EXIM policy 1992-97 - entitlement to concessional duty based on the export obligation achieved - HELD THAT:- When the DGFT had particularly sought for the details of export earnings upto the period 22.12.1999 along with the bank certificates and Appendix 10C attested by the Chartered Accountant and the same has also been furnished by the appellant with all particulars, there had been no further development and when these details were also filed before the Commission, the same had not been considered by the Commission only on the ground that the request for extension made by the appellant had been rejected. Before this Court, the appellant had filed a consolidated statement of exports and the receipts in foreign currency for the period from 01.04.1993 to 20.12.1999.
On perusal it could be seen that it is only a self serving document prepared by the appellant and we are not inclined to rely on this self serving document to appreciate the contentions made by the appellant. However, copies of 3 Bank certificates all dated 25.09.2000 issued by Federal Bank Limited, Indian Overseas Bank and State Bank of Travancore, pertaining to the remittances received for the period upto 22.12.1999 has been filed. The certificate issued by the State Bank of Travancore precisely states that the remittances had been received from various NRE accounts into the account of the appellant. But the certificate of Indian Overseas Bank states that they have collected and credited Rs. 1,63,84,165/- from various NRE customers for the period from 03.06.1999 to 20.12.1999 which is equivalent to US$ 3,56,170. The certificate issued by Federal Bank also certifies that for the period upto 20.12.1999 they have credited an amount of Rs. 4,21,550/- which is approximately equivalent to US$ 10,036.90.
When admittedly the EPCG licence has been extended for the period upto 20.12.1999 and also the appellant had received remittances from the NRE customers for cable subscriptions and when the export achieved upto 1998 had alone been taken into account, necessarily the remittances received by the appellant towards export obligation which according to the appellant has been achieved 30% has to be considered, as their obligation towards the payment of duty will proportionately reduce.
As both the Commission as well as the writ court had not considered this aspect and had simply concluded the issue holding that there has not been any extension after 1998 which is factually incorrect, the portion of the order insofar as fixing the export obligation to have been achieved at 14% alone is set aside and the matter is remanded back to the file of the first respondent Settlement Commission only for the limited purpose of ascertaining the actual export obligation achieved by the appellant by the remittances received by them from the NRE accounts towards cable subscription charges in the 3 banks.
Based on the ultimate decision to be arrived at by the Commission, fixing the export obligation achieved, the proportionate duty for the unfulfilled export obligation shall be paid by the appellant as directed by the Commission, failing which the DGFT will be entitled to realise the bank guarantee. The bank guarantee shall be kept alive till the proceedings are concluded before the first respondent Settlement Commission and ultimately acted upon. In view of the pendency of the issues for a considerable length of time, the entire exercise shall be completed within a period of 3 months from the date of receipt of copy of this order.
Conclusion - The court remanded the matter to the Settlement Commission to verify the actual export obligation achieved through NRE account remittances.
The Writ Appeal stands partly allowed.
-
2025 (2) TMI 812
Service of SCN - SCN not “given” within the stipulated time - Section 124(a) read with Section 110 (1) and (2) of the Customs Act, 1962 - interpretation of the word “given” in relation to the issuance and service of the show cause notice within the statutory timeframe - simple argument made by learned counsel for the respondent is that since show cause notice was not served on the respondent within six months, he was entitled to return of the goods - HELD THAT:- The respondent became entitled to return of the seized goods on 4th October, 2023. The appellant authorities did not release the goods. Now, if as a subsequent event a confiscation order was passed that order would operate on the goods wherever they were situated. This subsequent confiscation order has got nothing to do with the cause of action involved in the writ petition and appeal. It is an independent right acquired by the appellant authorities to be exercised independently.
The appellants are obliged to immediately return the goods to the respondent subject to the confiscation order. In other words, even if it is assumed that by virtue of confiscation, the ownership of the goods has been transferred to the appellants, still its possession status quo ante which was to be with the respondent has to be restored until the confiscation order is enforced.
Conclusion - The failure to serve a notice within the stipulated time requires the return of seized goods to the owner.
The appellants are directed to return the seized gold to the respondent within four weeks of communication of this order - appeal disposed off.
-
2025 (2) TMI 811
Order against a dead person - HELD THAT:- Since the impugned order in original dated 20.12.2023 and the consequential order dated 12.12.2024 have been passed against a dead person, the impugned orders have to be necessarily quashed by this Court and this writ petition will have to be allowed. Accordingly, the impugned order in original passed by the first respondent dated 20.12.2023 and the consequential order dated 12.12.2024 passed by the second respondent are hereby quashed and this writ petition is allowed. However, liberty is granted to the respondents to initiate legal action against the appropriate persons in accordance with law.
-
2025 (2) TMI 810
Levy of penalties u/s 114 and 114AA of the Customs Act, 1962 - Cheating Customs Department in respect of duty drawback evasion - deliberate suppression of transaction and misdeclaration by the appellants to avail duty drawback fraudulently - HELD THAT:- The appellate Tribunal, having found gravity of the offence, granted leave to prefer appeal on condition to make a pre-deposit as stated above and there is no infirmity or excessive jurisdiction in the order impugned. The Commissioner of Customs, having found that there was an evasion of duty drawback, has imposed penalty as stated above. If at all there is any ground to challenge the said Order-in-Original, statue provides right of appeal on condition to make a pre-deposit of drawback and penalty deemed fit by the Tribunal. The decision of the Tribunal is now put to challenge in these appeals. Though there is a change in law as alleged by the learned counsel for the appellants, this Court is very conscious of the fact that the taxation regime as prevailing in the year 2019 to be applied in the case in hand. Any change of law shall not give retrospective application, when the issue relates to the revenue of the State.
It is to be noted that the appellants had at privileged by keeping these appeals pending for more than 8 years without pursing the appeals and without paying pre-deposit fixed by the Tribunal. The said concession itself is more than what the law provides for a tax evader. Hence, these Civil Miscellaneous Appeals are dismissed as devoid of merits. The amount of pre-deposit mentioned in the impugned order to be deposited within a period of six weeks from the date of receipt of a copy of this order, if the appellants are really interested in pursing the appeals. Failing which, the Department is at liberty to proceed against them in accordance with law.
Conclusion - i) The penalties imposed on the appellants were upheld. ii) The joint and several liability was deemed valid. iii) The pre-deposit requirement for appealing was found reasonable.
Petition disposed off.
-
2025 (2) TMI 809
Sanction of the drawback claim of the petitioner set aside - rejection on the ground that the drawback claim was filed afer a delay of five and half years - no explanation for not submitting the original triplicate copy of the shipping bill available with the petitioner - Rule 13 of the Customs, Central Excise Duties, and Service Tax Drawback Rules, 1995 - HELD THAT:- On perusal of Rule 13 of the Rules, 1995, it appears that the same provides for the manner and time for claiming drawback on goods exported other than by post and that the triplicate copy of the shipping bill for export of goods is deemed to be a claim for the drawback filed on the date on which the proper Officer of the Customs makes an order permitting clearance and loading of goods for exportation under Section 51 of the Customs Act, 1962 and said claim of drawback is required to be retained by the proper Officer making such order - Sub-section (2) of Rule 13 of the Rules, 1995 provides that the claim for drawback should be accompanied by the copy of the export contract or letter of credit, copy of packing list, copy of ARE-I, wherever applicable, insurance certificate, wherever necessary and copy of communication regarding the rate of drawback where a drawback claim is for a rate determined under the Rule 6 or Rule 7 of the Rules, 1995 by the Commissioner of Central Excise as the case may be relating to the cases where either the amount of rate of drawback has not been determined or to be determined at a lower rate.
Therefore, essentially there has to be a claim to be made for claiming drawback for the goods exported other than by post on the basis of the triplicate copy of the shipping bill detained by the proper Officer to be accompanied by the relevant documents as specified in Sub-rule (2) of Rule 13 of the Rules, 1995.
On perusal of the facts considered by the Appellate and the Revisional Authority, it appears that at the relevant time in the year 2005-06, the goods were manually cleared for export by the appellant vide ten shipping bills and therefore the petitioner was required to be provided with the triplicate copy of the shipping bills for lodging the drawback claim. The petitioner was also provided with the triplicate copy at the relevant time which was reported to be lost in the year 2011. Therefore, there is no explanation for not submitting the original triplicate copy of the shipping bill available with the petitioner.
Both the Appellate Authority as well as the Revisional Authority have rightly come to the conclusion that when the documents were lost on or around 14.05.2011, the petitioner was having the same documents in its possession and in absence of any specific dates made available for loss of such original documents, for the specific cause that prevented the petitioner from filing the drawback claim immediately on receipt of the triplicate copy of the shipping bills from the Customs after export or some reasonable time thereafter, the only reason given by the petitioner is that the person handling the affairs of drawback claim had left the employment - such vague excuse on part of the petitioner cannot be accepted as there is clear delay and latches on the part of the petitioner to lodge the claim and the contention raised on behalf of the petitioner that the duty was cast upon the respondent-Authority to sanction the claim is also not acceptable in view of the fact that the original triplicate copy of the shipping bill was with the petitioner at the relevant time which was lost in the year 2011 and there is no plausible explanation coming forth from the petitioner to explain the delay and laches from the year 2006 to 2011.
Conclusion - The drawback claim could not be considered valid due to the significant delay and the absence of the required triplicate copy of the shipping bill.
It is not required to interfere in the concurrent findings of fact arrived at by the Commissioner of Customs (Appeals) as well as the Revisional Authority while exercising the extra-ordinary jurisdiction under Article 227 of the Constitution of India - petition dismissed.
-
2025 (2) TMI 808
Requirement of pre-deposit - appeal dismissed on the ground that pre-deposit condition was not fulfilled - importation of Peas, Yellow Peas - confiscation - redemption fine - penalty - HELD THAT:- Since the appellant has provided Security Deposit of Rs.91,30,121, this would meet the requirement of the pre-deposit when the penalty of Rs.60,00,000 crores is litigated. There are no provision to call for pre-deposit when the litigation is towards the Redemption Fine. Hence, being satisfied with the fact the pre-deposit condition has been met, we take up the case for disposal at Tribunal level itself, since on identical case the issue stands decided by this Bench.
It is found that against the DGFT Notifications, the appellants have contested the amendment of import policy by way of a Writ Petition vide WP No. 17962w/2018 before the Hon’ble High Court, Calcutta, wherein Commissioner of Customs, Kolkata was also respondent, on the ground that such an amendment in Foreign Trade policy is the sole prerogative of the Central Government as set out in section 3, 5 and 6 of the FTDR Act and the trade notice did not indicate that it was issued either with the concurrence or the approval of the Central Government.
As the goods were perishable in nature, the appellants moved a Misc. Application MAT No. 1405 of 2018 with CAN No. 8761 of 2018 before the Hon’ble Division Bench of the High Court, Calcutta. After considering the factual position of the case the Honourable High Court vide their Interim Order dated 26.11.2018 granted stay on the DGFT Notifications. Accordingly, goods were allowed clearance provisionally subject to the appellants keeping security deposit of 10% of the assessable value towards probable fine and 10% of duty towards penalty. For the Assessable Value component of Rs.6,08,67,460, they have given security deposit of Rs.60,86,747 and for the Duty component of Rs.3,04,33,731, they have given security of Rs.30,43,374.
In the present case, the appellant has challenged the Notifications before the Calcutta High Court. On going through that Final Order passed by the Kolkata Tribunal in the case of Rahul Agro Industries, it is found that the Assessable value there was to the tune of Rs.96.65 crores and Duty was to the tune of Rs.44.83 crores. For these imports the Adjudicating authority had imposed penalty of Rs.4 crores and redemption fine of 2.10 crores. On appeal by the Revenue, this Bench has considered the factual details and implication of the DGFT Notifications, the Supreme Court’s judgement and has taken a sympathetic view and reduced the same to Rs.25 lakhs of penalty and Rs.25 lakhs of redemption fine.
In the present case, the Assessable value is Rs.6.08 crores and Duty component is Rs.3.04 crores. The appellant is before the Tribunal, being aggrieved with the penalty of Rs.60,00,000 of penalty and Rs.60,00,000 of redemption fine. Since the facts are identical in the present case, following the same lines taken by the Tribunal in the case of Rahul Agro, the ends of justice would be met if the these amounts are modified to Rs.8 lakhs of penalty and Rs.8 lakhs of Redemption fine.
Conclusion - i) The pre-deposit condition was met by the appellant's security deposit, allowing the appeal to proceed. ii) The confiscation of goods under section 111(d) was justified as the imports were contrary to the DGFT notifications. iii) The penalty and redemption fine reduced to Rs. 8,00,000 each.
Appeal allowed in part.
-
2025 (2) TMI 807
Rejection of claim submitted by the Appellant before the Liquidator - waterfall mechanism - entitlement to payment of dues in accordance with Section 53(1)(a) of the IBC - acceptance of belated claim of the Appellant by including interest - interest amount was claimed by the Appellant or not - remedy embodied in Section 42 of the IBC - Tenability of the contention of the Appellant that it was being forced by the Liquidator to modify/withdraw their claim
Etitlement to payment of dues in accordance with Section 53(1)(a) of the IBC - HELD THAT:- The receipt of the supplies had been acknowledged by the RP along with an assurance that the dues would be paid once funds became available. The Liquidator cannot be allowed to go back from the mutually agreed terms and conditions for provision of services particularly when the services had been accepted without any demur or objections.
Acceptance of belated claim of the Appellant by including interest - HELD THAT:- The Appellant for the first time claimed interest component on 25.06.2019 much after the date of supply of goods. All the correspondences exchanged before this date between the Appellant and Respondent show that no demand was made with regard to interest component. The claim for interest is an afterthought. Submission was pressed that reliance on invoices for interest is nothing but a unilateral document that has no binding effect on the Respondent. Having not added interest at the time of filing belated claim which claim stood already crystallised and admitted, the Appellant cannot suddenly spring a surprise by adding an interest amount as part of claims after a lapse of more than two years from the date of supply - The Adjudicating Authority was not satisfied that the claim of interest had been adequately substantiated and validated by the Appellant before the Liquidator at the time of liquidation commencement.
Whether at the time of filing of their claims, any interest amount was claimed by the Appellant and how the Respondent had treated the claim filed by the Appellant? - HELD THAT:- In the present facts of the case, the Public Announcement seeking claims was issued by the Liquidator on 21.01.2019. The Appellant failed to file their claims on time. The Appellant then requested 14 days’ time on 22.01.2019 to file their claim. This request was not allowed by the Liquidator. Neither did the Appellant file their claims even during the extended period sought by them. Instead, the Appellant filed their belated claim on 23.03.2019 which claim was rejected by the Liquidator on 30.03.2019.
There are credence in the contention of the Respondent-Liquidator that failure to file claims during the liquidation process resulted in crystallization of the claims as per the invoice No. 11239/17, 11240/17 and 11241/17 of 07.08.2017 aggregating to USD 173,182.97. The impugned order agreed upon that the Appellant having once filed their claim amount without interest by their own volition, they cannot question the non-inclusion of interest after efflux of such a long period of time.
Whether the present application of the Appellant is an attempt to circumvent the specific remedy embodied in Section 42 of the IBC which provides that in case any claimant is aggrieved by the decision of the Liquidator in respect of admission of their claim the matter is to be brought to the notice of the Adjudicating Authority for seeking relief? - HELD THAT:- The law is well settled that when a statute provides a particular remedy or that if a thing is to be done in a particular manner, then it has to be done in that manner only. Having failed to challenge the rejection of their claims within the 14 days timeline prescribed under Section 42 of the IBC, the Appellant has indirectly sought to revive their claim by filing a petition under Section 60(5) of the IBC. There are no reasons to disagree with the Adjudicating Authority that this issue cannot be re-agitated at this stage now by invoking Section 60(5) of the IBC. The Adjudicating Authority has therefore correctly held that there is merit in the submission of the Respondent that the Appellant was trying to circumvent the specific remedy under Section 42 of the IBC having failed to avail of it at the appropriate point of time.
Tenability of the contention of the Appellant that it was being forced by the Liquidator to modify/withdraw their claim - HELD THAT:- The Liquidator has an important role to play in the timely conduct of the liquidation process and it is required of him to complete the process within one year from the date of commencement of liquidation proceedings. In the present case, we find that Liquidator has not committed any error in trying to complete the liquidation process on time which commenced way back in 2018. However, since the Appellant was unwilling to give their NOC, the progress of liquidation proceedings was facing a road-block on account of their non-responsive behaviour. Given the conspectus of facts, the Adjudicating Authority is agreed upon that seeking of NOC from the Appellant by the Liquidator in respect of the dues of suppliers of the sub-contractors was within the scope of his duties to protect the assets of the Corporate Debtor and do not find any cogent grounds which show that the Liquidator was found wanting in his conduct in expeditiously settling the ongoing liquidation of the Corporate Debtor.
Conclusion - i) The claims must be filed within the prescribed timeline, and failure to do so results in the finality of the Liquidator's decision. ii) The interest claims must be substantiated and included in the original claim filed with the Liquidator, and cannot be introduced later. iii) The Liquidator's request for an NOC to settle sub-contractors' claims was justified and within the scope of his duties.
No error has been committed by the Adjudicating Authority in rejecting the application. There are no cogent grounds to interfere with the impugned order. There is no merit in the appeal - appeal dismissed.
-
2025 (2) TMI 806
Extension of timeline for submission of Expressions of Interest (EoI) and Resolution Plans by the Committee of Creditors (CoC) - violation of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - approval of Resolution Plan - HELD THAT:- The present is a case where after issuance of Form-G on 23.10.2022, it was noticed by the CoC that after submission of EoI, some person who had not submitted EoI, whether fresh Form-G be issued or timeline be extended, which was deliberated in the 11th CoC Meeting held on 30.01.2023.
The discussion in the Meeting of the CoC clearly indicate that the proposal submitted by Appellant was discussed and considered on merits. It was noticed that a letter from Phoenix ARC is provided, which indicate that they are offering non-binding bid of Rs.23 crores for the acquisition of debt which has already expired on 15.03.2023. The CoC was also of the view that the action of Appellant was with the intention to distract the resolution in progress and raises enough doubt on his integrity and intentions of submitting a plan. Thus, the offer of the Appellant was not agreed to proceed with further. The Appellant’s submission that his Plan was not considered is not correct and against the records.
The present is a case where CIRP period came to an end and the RP has taken extension in the CIRP and the decision was already taken by the CoC to vote on the three Resolution Plans in its Meeting dated 11.07.2023. The request by the Appellant was made on 13.07.2023 and thereafter the Plan was submitted on 23.07.2023. The CoC had deliberated and discussed the Resolution Plan of the Appellant and did not accept the request to proceed any further with the Plan of the Appellant. The submission of the Appellant that Plan submitted by the Appellant was not considered by the CoC, cannot be accepted. The CoC had already decided to vote on the Plans, which Plans were voted from 19.07.2023 to 11.08.2023 and Plan of Pinax having been approved with the majority of 97% vote share, there are no good ground to interfere with the commercial wisdom of the CoC approving the Resolution Plan.
Conclusion - The Adjudicating Authority having noticed entire submissions and has found that there is no infirmity in the decision of the CoC in not accepting the Resolution Plan of the Appellant and deciding to vote on the Resolution Plans, there are no error in the order of the Adjudicating Authority rejecting IA No.1325/KB/2023. The Resolution Plan of Pinax, which was approved with 97% vote share of the CoC has been rightly approved by the Adjudicating Authority by order dated 20.12.2024, which order need no interference, since no ground has been made out within meaning of Section 61(3) of the IBC.
Appeal dismissed.
-
2025 (2) TMI 805
Rejection of application filed by the Appellant objecting to the Resolution Plan - objection against the extension of timeline or invitation to submit revised Resolution Plan - inclusion of Pinax Paper Mills Private Limited in the list of Prospective Resolution Applicants (PRAs) after the timeline extension - HELD THAT:- The voting period for the voting of the plan was allocated from 19.07.2023 to 11.08.2023 and as per e-voting result on 11.08.2023, the plan of Pinax Paper Mills Private Limited was approved with 96.05% voting share.
Present is a case where CoC in its meeting held on 09.02.2023 decided to extend the timeline for submission of EoI and Resolution Plan. It is noticed that Invitation for Expression of Interest itself contemplated extension of timeline by the CoC which is reflected in Clause 6 of the EoI. Thus, all Resolution Applicants were well aware that time for submission of the EoI and submission of the Resolution Plan can be extended by the Resolution Professional with approval of the CoC.
Whether extension of timeline which is contemplated in the EoI itself require a publication of fresh Form G? - HELD THAT:- Present is not a case that there was any modification in the Invitation for EoI rather only extension of timeline on same criteria and conditions as was initially provided have been made. Timeline as noticed above was already permitted to be extended by Clause 6 of the same Invitation for EoI dated 23.10.2022 by which process for receiving of EoI commenced. Clause 6 only provided for extension of last date for submission of EoI and when we read Clause 6, it does not indicate that for extension of last date of EoI revised fresh Form G was required to be issued. It is noticed that in Regulation 36 B of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 which is ‘request for resolution plans’ both expressions i.e. modification and extension of timeline have been used.
As per sub-regulation (5), any modification in the request for resolution plan has to be treated as fresh issue whereas extension of timeline with the approval of the committee has been separately dealt. Thus, modification of request for resolution plan and extension of timeline has been separately dealt in Regulation 36B. Applying the aforesaid analogy in Regulation 36A, it is clear that although any modification in the Invitation for Expression of Interest require publication of fresh Form G but Regulation 36A on its term does not contemplate publication of fresh Form G when timeline has been extended. In any view of the matter, the present is a case where Appellant who has aggrieved by the approval of the Resolution Plan and rejection of his IA was very much part of the CIRP process, he having expressed its interest in pursuance of the issuance of Form G and after extension of timeline, it was communicated by e-mail dated 13.02.2023 and after publication of list of Prospective Resolution Applicants on 23.02.2023, neither any objection was filed by Appellant rather it participated in the process by filing a resolution plan by deleting Nippon Ispat Pvt. Ltd. from its resolution plan with whom it has earlier submitted resolution plan which was non-compliant. Applicant, thus, participated in the process and took chance to succeed without raising any objection to the extension of timeline.
In the present case also, the ground taken by the Appellant is under Section 61(3)(ii) i.e. material irregularity in exercise of the powers by the Resolution Professional during the CIRP. Whether in the present case by non-publication of Form G after extension of timeline by the CoC in its 12th CoC meeting can be said to be material irregularity leading to scrapping of the entire CIRP process subsequent to the extension of timeline is the question to be considered.
Conclusion - i) The CoC's decision to extend the timeline for EoI and Resolution Plan submission upheld without issuing a fresh Form G, as it was in line with the original EoI and approved by the CoC. ii) The inclusion of Pinax Paper Mills in the final list of PRAs was proper, and no objections were raised by the Appellant, who participated in the process.
There is no merit in the Appeal. The Appeal is dismissed.
-
2025 (2) TMI 804
Invocation of extended period of limitation under proviso to section 73 (1) of the Finance Act - levy of mandatory penalty - suppression of facts or not - wrongful availment of Cenvat credit amount before discharging the service tax liability - eligible document to claim Cenvat credit under reverse charge mechanism as per rule 9(1) of CCR - HELD THAT:- The appellant having disclosed the availment of the Cenvat Credit for the month of October and November in the ST3 returns cannot be held liable for concealment of suppression of facts and therefore the extended period of limitation cannot be invoked. In view thereof it is wrong on the part of the revenue to say that the appellant had wilfully suppressed the material facts from the department with intent to wrongly avail Cenvat credit. As per the provisions of the Finance Act, the liability of the appellant was to file the STRs within the stipulated time disclosing the true facts and it is not the case of the revenue that they had not filed the STRs or had not disclosed the availment of Cenvat Credit. Hence, it is not a case of wilful suppression of material facts.
There is no averment in the show cause notice with reference to the factual matrix of the instant case, satisfying the presence of the ingredients of fraud, collusion, wilful misstatement, suppression of facts, or contravention of any of the provisions of this chapter or of the rules made thereunder with intent to evade payment of service tax. The burden is on the revenue which they have failed to discharge. The allegation of the revenue that the appellant had availed the Cenvat credit in contravention of the provisions of rule 4(7) is not sufficient to invoke the extended period as the violation has to be with reference to the intent to evade payment of duty.
Reliance is placed on the decision in Tamil Nadu Housing Board versus Collector of Central Excise [1994 (9) TMI 69 - SUPREME COURT], where the Apex Court held that extended period is invocable only if both the situations, suppression, fraud, collusion, etc. and intent to evade payment of duty is proved. Initial burden is on the department.
Even if it is held that there was an error on the part of the appellant in availing the credit, however the error was inadvertent as they were registered only in the month of September 2013 and therefore, the extended period invoked by the department is not justified. The principle enunciated in various decisions is that the proviso to section 73 (1) would be applicable on account of misstatement or suppression of facts only if the same was deliberate and for the purpose of evading payment of duty.
Levy of mandatory penalty - HELD THAT:- Revenue relied on the decision of the Tribunal in the case of Commissioner of C EX & ST–LTU, Delhi versus Gas Authority of India Ltd [2018 (12) TMI 91 - CESTAT NEW DELHI], to emphasise the plea that merely because the appellant is a public sector undertaking does not mean that mandatory penalty cannot be imposed once the invocation of the extended time limit has been upheld. Since it is already held that extended period of limitation cannot be invoked in the present case in the absence of the ingredients specified under section 73 of the Act, consequently, the penalty also cannot be imposed. Moreover, the facts in the said case are distinguishable from the present one, where the findings were to the effect that the appellant mis-classified the product as Naptha, on which much lesser excise duty was payable and therefore mis-declaration was held to be a strategy for tax evasion, and further the exemption claimed on the mis-declared product was held to be a positive act of misrepresentation of the facts. It was, therefore held that merely because the assessee is PSU is not sufficient to set aside the show cause notice as being barred by time.
Since the entire demand is beyond the normal period of limitation and it is held that the extended period is not invocable, the entire demand needs to be set aside on this ground alone. It is, therefore not necessary to further go into the merits of the matter. The question on merits is left open.
Conclusion - Due to the absence of deliberate intent to evade payment, the extended period and consequent penalties were deemed inapplicable.
Appeal allowed.
-
2025 (2) TMI 803
Rejection of declaration under Voluntary Compliance Encouragement Scheme (VCES), 2013 - alleged tax liability on remuneration paid to part-time directors of the company - rule 2(1)(d)(i)(EE) of Service Tax Rules, 1994 - HELD THAT:- It is evident that the adjudicating authority has neither perused the terms of employment of the said directors nor examined the scope for appointment of whole-time employees as directors in the statutory framework governing companies. It is also not the case of the adjudicating authority that the whole-time directors were being remunerated with sitting fees in addition to contractual compensation. The additional tax liability has been fastened after the ‘negative list regime’ was made operational and influenced, unduly so, by the definition of ‘person liable for paying the service tax’ in Service Tax Rules, 1994 which is nothing but a machinery provision stemming from statutory delegation under section 68 of Finance Act, 1994. Such machinery provision is of significance to the tax scheme only upon determination of tax liability. The tax liability in the present instance could not have been determined unless with, and except by, reference to the contract of employment.
In the absence of such enquiry, and further finding thereof in the impugned order, the determination that the claim under the Voluntary Compliance Encouragement Scheme (VCES), 2013 is false, and, thereby, warranting discard is not tenable. Such casual and peremptory discard of relevant aspects of compensation detracts from the validity of the findings. It falls to the adjudicating authority to consider this aspect and upon determination that the said amount should have been included in the taxable service with section 2(1)(d)(ii)(EE) of Service Tax Rules, 1994 to be invoked for fastening tax liability attendant upon discard of claim for privilege under the scheme to enable which the proceedings will have to be restored to the original authority.
Conclusion - There is a need for a thorough examination of the terms of employment and contractual arrangements to establish the tax liability accurately.
The impugned order is set aside and the matter remanded to back to the original authority.
............
|
9911796707
