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Showing 381 to 400 of 1519 Records
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2025 (5) TMI 1139
Violations of provisions of Sec. 3(a) of FEMA, 1999 - illegal unaccounted foreign currency possed without dealing through an authorized person or reporting to the Reserve Bank of India (RBI) - as contented person to whom the payment was made in India had made purchases in India itself
As contented that appellant has not made contravention of Section 3(a) of FEMA - HELD THAT:- As appellant could not give proper explanation for taking the foreign currency allegedly from the hundies of the church to the place of recovery, and thus, these facts points towards his mala fide intention and taking a false & afterthought defence. Hence, the seized foreign currency equivalent to INR 3,30,82,775.28 is unaccounted foreign exchange dealt by the appellant, other than through an Authorised Dealer, and thus, contravention of Section 3(a) of FEMA,1999, is made in the present case. Thus, the above said foreign currency equivalent to Rs3,30,82,775.28 is rightly confiscated by the Adjudicating Authority, under Section 13(2) of FEMA, along with imposition of penalty of Rs. One lakh.
Payment of Rs 13,09,000/- (equivalent to USD 22,000) to Mr Cody an NRI who had come to India for attending meetings held by the Trust was for the purpose of purchase of watches. The payment was made to him in Indian currency and utilised by him for the purchase of a watch in India itself and thus, the same was not taken outside India - Mr. Cody is a person resident outside India and the records show that the Income Tax Department had seized a receipt for payment of USD 22000 issued by M/s Television Broadcasting Legacy, USA. The execution & recovery of receipt is an admitted fact, and hence, its contents for payment in USD cannot be denied. The payment made by the appellant to Mr, Cody is without the permission of the RBI. Also, there is no authority letter issued by M/s Television Broadcasting Legacy USA, authorising Mr. Cody to receive the payment in cash. Hence, there exists clear violation of Section 3(b) in the case at hand and the penalty of Rs. 10,000/- imposed upon the appellant for violation of Section 3(b) for the amount of USD 22000 is justified.
The present appeal is dismissed hereby being devoid of any merits and thereby the order passed by the Adjudicating Authority is hereby upheld.
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2025 (5) TMI 1138
Penalty imposed by the Competition Commission of India (CCI) - Direction for release of the Fixed Deposit Receipts deposited by the Appellants - HELD THAT:- The matter is remanded to CCI to examine the issue of penalty by affording an opportunity to the Appellant.
Considering the submissions the application is allowed and the Ld. Registrar, NCLAT may release the FDR alongwith interest accrued thereon in favour of the Appellant.
Application disposed off.
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2025 (5) TMI 1137
Money Laundering - attachment of bank accounts - criminal misconduct - misuse of official position - resons to believe - requirement to conduct independent investigation for commission of the predicate offence - properties already seized by police/CBI can be attached under PMLA, 2002 or not - intent of seizure under Prevention of Corruption Act, 1988 is similar to that of attachment under PMLA, 2002 or not.
Whether ED is required/bound to conduct independent investigation for commission of the predicate offence to form „reason to believe’ for attachment? - HELD THAT:- The first contention of the appellants is that there is no independent investigation undertaken by the ED, and thus, the requirement of “reason to believe” under Section 5 of PMLA is not fulfilled and hence, the attachment is invalid. However, this view is not agreed as no separate investigation needs to be conducted by the ED and the „reason to believe’ is justly formed based on the basis of FIR, police investigation, relevant documents, statements recorded u/s 50 PMLA, and the scrutiny of various bank accounts of the appellants and only after that it has ordered attachment of the impugned bank accounts and Demat A/c for sum of Rs. 2,31,04,618.13, against the disproportionate assets of Shri Narendra Kumar Tanwar & his family members to the tune of ₹ 6,79,59,678/-. Further, the police/CBI has to conduct the investigation for the commission of the predicate/scheduled offence, but ED is not empowered to re-investigate the same. However, if there is any apparent error in CBI/police investigation in the predicate offence, it can certainly suggest to the concerned investigation agency for remedial action, without transgressing into the field of investigation for the predicate offence by doing any parallel/independent investigation, which may lead to many contradictions.
In case of commission of offence u/s 13(1)(e) of PC Act, the quantum of disproportionate assets to the known sources of income of the family of the public servant is the proceeds of crime, in absence of any explanation for acquisition of the same. As per investigation conducted by ACB of Rajasthan Police, appellants were found in possession of the disproportionate assets to the tune of ₹ 6,79,59,678/-. Thus, ED was empowered to attach the assets of the appellants to that extent. But, in the present case, police seized the bank accounts and Demat A/c for sum of Rs. 2,31,04,618.13 which were later-on attached by ED vide PAO No. 04/2014. Thus, the contention of the appellant that ED has not conducted any independent investigation is devoid of any merits, as ED is not empowered to conduct investigation for commission of the predicate offence.
Whether the properties already seized by police/CBI cannot be attached under PMLA, 2002, or whether it will amount to double attachment? - Whether the intent of seizure under Prevention of Corruption Act, 1988 is similar to that of attachment under PMLA, 2002? - HELD THAT:- The properties seized by police/CBI cannot be equated with the attachment as defined u/s 2(1)(d) of PMLA, 2002. Even otherwise, in PMLA the procedure for search and seizure is mentioned in Chapter V from Section 16 to 24 of PMLA, 2002, whereas procedure for attachment, adjudication and confiscation is mentioned in Chapter III from Section 5 to 11 of PMLA, 2002. This points to the direction that concept of search & seizure and attachment are different aspects during investigation of a case. Thus, the attachment made by ED after the seizure by the police does not amount to double attachment. The Prevention of Corruption Act is silent on the aspect and procedure of attachment. Previously, the investigation agencies used to apply for attachment and confiscation of the proceeds of crime under Criminal Law Amendment Ordinance, 1944, after the conviction of the accused under Prevention of Corruption Act, 1988 - the intent of seizure under PC Act, 1988 is not similar to that of attachment under PMLA, 2002. As per Cr.P.C. after the search police may seize the incriminating or material evidence found during the search by way of Panchnama. The concerned person has right to apply to the concerned court for release of the said seized material on Supardaginama with an undertaking to preserve the same till the conclusion of trial. However, the attachment under PMLA is effective till the conclusion of trial and in case of conviction Ld. Special Judge, PMLA Court can confiscate the same.
Whether based on the second FIR No. 196/2013 dated 10.05.2013, ED is empowered to make the attachment to the tune of Rs. 1,60,85,107/- vide PAO No. 08/2014 in Original Complaint No. 373/2014? - HELD THAT:- It is pertinent to mention here that on admission of the appellant, PAO No. 08/2014 dated 30.09.2014 and its confirmation by Adjudicating Authority was made on 27.01.2015. Thus, this particular order was passed after the passing of PAO No. 04/2014 and the present impugned order dated 30.07.2014. Appellants have not filed any appeal against the later confirmation order dated 27.01.2015. Even there is nothing on record to show that the properties for the sum of Rs. 1,60,85,107/- are overlapping with the present confirmation order dated 30.07.2014. Hence, this issue is also decided against the appellant and in favour of the Respondent ED.
Conclusion - i) The ED is not required to conduct an independent investigation into the predicate offence to form a reason to believe under Section 5 of PMLA; reliance on FIR, chargesheet, and related materials suffices. ii) Seizure under the PC Act is distinct from attachment under PMLA; attachment by ED after police seizure does not amount to double attachment. iii) The intent and legal effect of seizure under the PC Act differ from attachment under PMLA, which is a protective measure pending adjudication and possible confiscation. iv) The attachment based on the second FIR and related proceedings is valid and does not overlap with or invalidate the present attachment.
Appeal dismissed.
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2025 (5) TMI 1136
Money Laundering - attachment of bank accounts - proceeds of crime - fraudulent siphoning of funds - HELD THAT:- The contention of the Ld. Counsel for the appellant was that it has already restored the said amount of Rs. 25 Crore to the NCL on 16.11.2009 alongwith interest from 23.07.2009. The Ld. Sessions Court (Trial court) has also granted relief to the appellant bank by ordering the defreezing and transfer of the eleven bank accounts in the petition filed by the appellant bank before it, vide order dated 15.12.2014, which favours the stance of the appellant bank. Hence, in view of the order dated 15.12.2014 passed by the Ld. Sessions Court, the appeal filed by the appellant bank needs to be allowed in the interest of justice and the amount appropriated by the ED from the bank accounts of the accused persons, and kept by the way of FDR with ED, needs to be released to the appellant bank, as the appellant bank has already compensated the complainant NCL for sum of Rs. 25 crore along with interest for the intervening period.
Conclusion - The attachment of property under PMLA is primarily to prevent concealment or dissipation of proceeds of crime, but where the actual owner exists and has compensated the victim, attachment may be reconsidered.
The present appeal is hereby allowed and consequences to follow accordingly. It is made clear that nothing expressed herein will affect the right of any party in the criminal trials.
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2025 (5) TMI 1135
Time limitation of filing appeal - appeal filed beyond the prescribed period of limitation - power of Commissioner (Appeals) and the Tribunal to condone delay in filing the appeal beyond the statutory limitation period prescribed under the Finance Act, 1994 - HELD THAT:- A bare perusal of Section 85(3A) of the Finance Act, 1994 leaves no room of doubt that though an appeal should be presented within two months from the date of receipt of decision or order of the adjudicating authority, in case it is filed beyond the said period of time, the Commissioner of Central Excise (Appeals), in a given case, where he is satisfied regarding existence of sufficient cause preventing the appellant from presenting the appeal within time, may allow its presentation within a further extended period of one month. It means that though power to condone delay is very much there under the proviso itself, the same cannot go beyond the extended period of one month; that is to say that total 60+30=90 days period is available for filing appeal. Therefore, this Court does not find any error in the order of the Commissioner (Appeals) in dismissing the appeal as barred by limitation, inasmuch as, the same was filed after a period of more than two years.
The Hon’ble Supreme Court, in the case of M/s Singh Enterprises [2007 (12) TMI 11 - SUPREME COURT], has clearly laid down that statutory scheme under the Act excludes applicability of Section 5 of the Limitation Act.
Though sub-section (5) of Section 35-B of the Act, 1944 does not specify a particular period for which delay in filing appeal can be condoned, apparently, Section 35-B is applicable in respect of appeals filed before the Appellate Tribunal and not before the Commissioner. In the instant case, since the appeal filed before the Tribunal was well within time, the provision has no application. For this reason, the other argument from the appellant's counsel that Tribunals in other States are condoning delay in filing appeals, is thoroughly misconceived and irrelevant for the instant case.
Conclusion - The dismissal of the appeal before the Commissioner (Appeals) upheld, as barred by limitation and the Tribunal's order upholding the same affirmed. The appeal before the Tribunal was held to be within time, thus no question of condonation arose.
There are no error in orders passed by the Commissioner (Appeals) as well as the Tribunal. Consequently, the present appeal has no merit and is dismissed.
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2025 (5) TMI 1134
Levy of service tax - conversion charges paid by the respondent to the Rajasthan State Industrial Development and Investment Corporation Ltd. (RIICO) for change of land use from industrial to commercial - refund of service tax paid on such conversion charges under Section 104 of the Finance Act, 1994 - principles of unjust enrichment - HELD THAT:- It is found that the refund claim has been allowed as it has been held that no service tax is leviable on conversion charges paid to RIICO for change of land use from industrial to commercial and hence the same was refundable in terms of Section 104(2) of the Act.
From the reading of Section 104(1), it is apparent that it starts with a non-obstante clause, “Notwithstanding anything contained in Section 66, as it stood prior to the 1st day of July, 2012 or in Section 66B” and then provides that no service tax is leviable on one time upfront amount in nature of premium, Salaami, cost, price, development charge, or any other amount by whatever name called for part of cost of industrial plot, in respect of taxable service provided or agreed to be provided by a state government, industrial development, corporation, or undertaking or industrial units by way of grant of long-term lease of 30 years or more of industrial plots during the period commencing from 1st day of June, 2007 and ending with the 21st day of September, 2016. Further, Clause (2) provides that refund shall be made of all such service tax which has been collected but would not have been so collected if sub-section (1) had been in force at all material times. In terms of the said provisions, there is no iota of doubt that the conversion charges were towards the change in the nature of the land use for which RIICO has merely granted an approval and it cannot be linked to providing any activity resulting in performing of service. Hence, no service tax can be levied on these conversion charges and since the respondent has already paid the service tax in respect thereof they are entitled to seek refund of it.
The last date for filing the refund claim falls on 30.09.2017 whereas the respondent had already filed the refund claim on 15.05.2015 i.e. before the insertion of Section 104 and well before the cut-off date. In view of the statutory provisions of Section 104, the Commissioner (Appeals) has concluded that the respondent is eligible to claim refund both on the ground of merit as well as on limitation and there are no error in the same.
Reliance has been placed on the decision in RIICO Ltd. versus CCE, Jaipur – I [2017 (5) TMI 673 - CESTAT NEW DELHI], where the Tribunal has held that lumpsum payments received from the allottees of plots in industrial area by RIICO for grant of long-term lease of 30 years or more is not liable to service tax in view of Section 104 of the Finance Act, 1994.
Principles of unjust enrichment - HELD THAT:- The respondent has submitted the certificate dated 31.10.2017 issued by the Chartered Accountant certifying that the said amount of Rs.1,50,44,629/- paid to RIICO has not been passed on to any other person. Further, as per the books of accounts of the company, the said amount has been shown as recoverable from the Government. In the balance sheet for the financial year 2013–14 and 2016–17, the said amount has been shown as “Service Tax Refundable” in the Note No.1.09 as “Loans and Advances”. On that basis, it was concluded that the incidence of service tax has not been passed on to any other person and consequently, the refund is admissible to the respondent.
The controversy of eligibility to claim refund stands allowed in terms of the statutory provisions and the Department has not been able to justify as to why the relief is not admissible under the provisions of Section 104 of the Act.
Conclusion - i) Service tax is not leviable on one-time upfront conversion charges for change of land use from industrial to commercial paid to State Government industrial development corporations for long-term leases exceeding 30 years within the specified period. ii) Refund claims under Section 104 must be filed within six months from the Finance Bill 2017's presidential assent, but claims filed earlier are valid. iii) Refund is admissible only if the claimant has borne the incidence of service tax and has not passed it on to others.
There are no reason to interfere with the impugned order and hence the same is affirmed. The appeal filed by the Revenue is, accordingly, dismissed.
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2025 (5) TMI 1133
Liability of appellant to pay service tax for the period 2014-15 on the consideration received for providing manpower services - failure to file service tax returns and non-appearance before the adjudicating authority - ex-parte adjudication - HELD THAT:- From the impugned order, it is found that the appellant had produced the copy of the challans as evidence to support that he has already paid the service tax in discharge of his liability for the year 2014-15. The Appellate Authority taking note of the same had concluded that the service tax liability of the appellant was Rs.18,07,429/- as against Rs.37,90,922/-. However, while examining the challans, the Appellate Authority found that the two challans were the subject matter of the appeal No.177/ST/2022 for the period 2013-14 and the appellant had inadvertently shown these challans for the period 2014-15. There is no error in ignoring the two challans which were towards the service tax liability for the previous year. The Commissioner (Appeals) has correctly re-determined the service tax liability of the appellant.
Since there was delay in payment of service tax, the levy of interest is automatic and the same is therefore, recoverable from the appellant. According to the Revenue, the appellant has misrepresented the two challans which were actually used in payment of service tax for the previous period, i.e., 2013–14, and therefore, the extended period has been rightly invoked. The penalty under Section 78(1) of the Act has been rightly imposed and the Appellate Authority has consciously reduced the same to the reduced amount of service tax liability. Lastly, the penalty imposed under Section 77(1)(a)and section 77(2) on the ground that though the appellant had already obtained the service tax registration from the Department, however, did not properly assess and pay the service tax. In the circumstances, no interference is called for in the impugned order.
Conclusion - i) Service tax liability must be determined based on actual receipts and payments attributed to the correct financial year. ii) Misrepresentation or incorrect attribution of payments justifies invocation of extended limitation period and imposition of penalties. iii) Interest on delayed payment of service tax is automatic and recoverable. iv) Non-appearance and failure to respond to notices permits ex parte adjudication by the Tribunal.
Appeal dismissed.
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2025 (5) TMI 1132
Liability to pay service tax under the Finance Act, 1994 for the period from 16.06.2009 to 13.03.2012 on the services rendered as a contractor providing construction-related labour services to builders and developer - entitlement for abatement or exemption from service tax on the basis that the contract was a labour rate contract without supply of materials - HELD THAT:- The appellant did not appear for any of the personal hearings before the original adjudicating authority and the Commissioner (Appeals) either. The appellant did not appear before the Tribunal as well. Vide the daily order dated 11.10.2024, the appellant was warned that the case would be decided on merits if the appellant or his representative did not appear. Hence, when the case was called out on 02.04.2025, no one appeared for hearing.
The department had examined the agreement between the appellant and M/s Manav Builders and arrived at the conclusion that the appellant had not provided material along with the labour service. This is substantiated by the Nil VAT returns filed by the appellant. Consequently, the appellant was not eligible to any abatement from the gross amount received for the services rendered by them. Once again, we note that no evidence has been produced before us in support of the appellant’s contention.
As regards the ground taken before the Tribunal that they did not receive the relied upon documents along with the show cause notice, we find that the Commissioner (Appeals) in the impugned order has held that the copies of the statements of Sh Jitendra Panwar and Sh Magraj Panwar, which were RuDs was submitted by the appellant along with the appeal. The other RuDs were copies of the VAT returns, Service Tax deposit challan and Bank statements submitted by the appellant himself to the department. Hence, this plea cannot be accepted.
Conclusion - i) The appellant was engaged in providing taxable construction-related labour services and was liable to pay service tax on the gross amount received without any abatement as no material was supplied. ii) The demand of service tax of Rs. 31,19,937/- along with interest and penalties under Sections 73, 75, 77, and 78 of the Finance Act, 1994 is justified and sustainable.
Appeal dismissed.
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2025 (5) TMI 1131
Non-payment of service tax - amounts received by the appellant, comprising professional fees and reimbursable expenses - pure agent services - HELD THAT:- The Hon’ble Supreme Court in the case of Intercontinental Consultants & Technocrats Pvt. Ltd. vs. Union of India [2018 (3) TMI 357 - SUPREME COURT] held that “the value of taxable service has to be the gross amount charged for the service provided and cannot include reimbursement expenses unless specifically stated.” The Hon’ble Supreme Court struck down Rule 5(1) stating that it was ultra vires Section 67 of the Finance Act, 1994.
The impugned orders cannot be sustained and are accordingly set aside - Appeal allowed.
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2025 (5) TMI 1130
Eligibility for exemption under Sr. No. 21(d) of Notification No. 25/2012-ST dated 26th June, 2012, as amended - transportation of specified goods by road/GTA services - failure to produce the documents for the verification of principle of the fact whether they are covered by unjust enrichment.
Eligibility for exemption under Sr. No. 21(d) of Notification No. 25/2012-ST dated 26th June, 2012, as amended - transportation of specified goods by road/GTA services - HELD THAT:- In the impugned order dated 17th August, 2016 the Commissioner has clearly held that all edible items stated in Show Cause Notice that qualified for food stuff and transported by appellant are entitled for exemption under Sr. no. 21 of the Notification no. 25/2012 dated 20th June, 2012 as amended, for period covered under show cause notice. No appeal has been filed by the department against the above mentioned findings. Therefore, it has become final. It is pertinent to mention here that the finding of the Commissioner that exemption under Sr. No. 21 (d) of Notification No. 25/2012-ST dated 26th June, 2012 as amended must be interpreted in such a way so as to hold that edible items stated in the show cause notice qualified for foodstuff which were transported by appellant during the period covered under the show cause notice and they are entitled for exemption under Sr. No. 21 of the Notification No. 25/2012 dated 28th June, 2012 as amended. The finding of the learned Commissioner in this regard is liable to be upheld.
Failure to produce the documents for the verification of principle of the fact whether they are covered by unjust enrichment - HELD THAT:- It was the duty of the appellant to have filed supporting documents in favour of his application for refund. The excuse given by the appellant does not appear to be convincing that the record is bulky, because as per Section 11B (1), refund application made to Assistant Commissioner shall be accompanied by such documentary or other evidence as the applicant may furnish to establish that the amount of duty has been paid. However, the argument of the appellant is that they had produced the sample copies of invoice / bilties to substantiate their claim and in addition thereto the appellant had requested the adjudicating authority to direct any concerned officer to inspect the said documents because, the record with regard to the whole year would be bulky. However, the authorities below have not considered the sample copies of invoices / bilties placed by the appellant on record. This argument is devoid of any force and cannot be accepted.
It appears proper to remand the matter back to the Adjudicating Authority to consider the matter afresh after taking into consideration the so called sample copies of invoices / bilties submitted by the appellant to substantiate their claim. The appellant is directed to submit all the original documents or other evidence in support of the refund application irrespective of the fact that the record would be bulky or there may be very huge number of invoices. As this appeal is very old pertaining to year 2017, the Adjudicating Authority shall complete the exercise preferably within 3 months.
Conclusion - The appeal is allowed by remanding the matter to the Adjudicating Authority with directions to reconsider the refund claim on the basis of original documents, including sample invoices and bilties, and to complete the exercise preferably within three months.
Appeal allowed by way of remand.
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2025 (5) TMI 1129
Exempt services or not - services declared under the Voluntary Compliance Encouragement Scheme (VCES) - HELD THAT:- It is found that while holding that the VCES was proper and nothing was mis-declared, learned Commissioner has not elaborately dealt with facts and the nature of the services and whether all of them were or some of them were exempted. For want of proper discussion and the comments, the matter remanded back and same is ordered accordingly.
The Bench appreciate the services of Shri Amber Kumrawat, Advocate as amicus curie in the matter - Matter is disposed of as remanded. Cross objection too stands disposed of.
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2025 (5) TMI 1128
Reversal of Cenvat credit availed on inputs and input services - appellants were admittedly clearing certain exempted goods along with certain dutiable goods from their factory or otherwise - applicability of Rule 6 of the Cenvat Credit Rules, 2004 - HELD THAT:- On going through the SCN dt.05.03.2010, we find that the appellants are primarily engaged in manufacture of sugar but are also manufacturing certain specialized products which are cleared to ISRO in terms of Notification No.64/95-CE, being an exemption notification. The department’s view is that since they have taken certain credit in respect of certain input services including services used by appellant for transportation of gas by pipeline used for generation of electricity and not maintained separate account, Rule 6(3) is invokable.
As per the provision of Rule 6(2), the appellants who are admittedly manufacturing both dutiable and exempted excisable goods were required to maintain separate record for receipt and use of input services. Apparently, the appellants have not been able to adduce any evidence that they have maintained any record for receipt and use of input services separately though they have claimed that they have not at all used the input services for manufacture of exempted goods. As per Rule 6(2), in the event of nonmaintenance, the appellants will have the right to choose any one of the options governed by Rule 6(3)(i), (ii) and (iii). In this case, though claimed but they are not able to establish that they have maintained separate account for receipt and use of input services even though admittedly they are engaged in manufacture of both dutiable and exempted goods.
As per the provisions of Rule 6(3) of CCR post 01.04.2008, there is a provision for payment of an amount equivalent to Cenvat credit attributable to inputs and input services used in or in relation to manufacture of exempted goods subject to condition and procedure specified in Rule 6(3A). Whereas, prior to 01.04.2008, there was no such provision except for in terms of retrospective amendment in 2010, which provided for specialized procedure under Rule 6(7) for payment of amount equivalent to the credit attributable to exempted goods along with 24% interest before a specified date - In this case, they have clearly not availed of the said provision and thus, in terms of the extant rules, when there was no provision for reversal of Cenvat credit attributable for period prior to 01.04.2008, as such, then the only option left was to pay an amount at the specified rate indicated in the respective SCNs. However, for the period post 01.04.2008, the option is to be chosen by the manufacturer and it cannot be imposed on him by Department. Further, even if the procedure under Rule 6(3A) has not been followed in full, they can work out the credit attributable to said exempted goods, if any.
The appellant’s reliance on the judgment of Hon’ble High Court in the case of Principal Commissioner, CGST, Ludhiana Vs Suraj Solvents & Vanaspati Industries [2023 (3) TMI 7 - PUNJAB AND HARYANA HIGH COURT], is distinguished as in that case the assessee could not apply because of pendency of proceedings in other forum, which is not the case here. Hence it is distinguished.
For the period prior to 01.04.2008, the appellant would be required to pay an amount as indicated in the respective SCNs. However, for the period post 01.04.2008, they will be at liberty to pay an amount equivalent to the Cenvat credit attributable to the exempted goods. In case no credit is found attributable to the exempted goods, then no amount shall be liable to be payable. As far as the issue of limitation is concerned, it is found that the Adjudicating Authority has considered their submission and has held that in the facts of the case, it is rightly invokable. It is found that in this issue of reversal of credit, options under Rule 6, etc., were subject matter of differing interpretations during material time and even retrospective amendment was made to allow certain relief for period prior to 2008.
The issue is interpretative in nature and there is no other strong and cogent ground for invoking extended period, hence, extended period cannot be invoked.
Conclusion - i) The manufacturers engaged in production of both dutiable and exempted goods must maintain separate accounts for inputs and input services as per Rule 6(2). ii) Failure to maintain such records invokes Rule 6(3) requiring reversal or payment of proportionate credit. iii) For periods prior to 01.04.2008, statutory provisions did not allow reversal of credit, limiting recovery to specified amounts. iv) Post 01.04.2008, manufacturers have the option to pay proportionate credit attributable to exempted goods, which cannot be unilaterally imposed by the Department. v) Extended period for demand recovery was not justified given the interpretative nature of the issue and vi) Penalty cannot be imposed without evidence of fraudulent or willful conduct.
Appeal is partly allowed by way of remand.
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2025 (5) TMI 1127
Refund of CENVAT credit of Countervailing Duty [CVD] and Special Additional Duty [SAD] paid by the appellant - non-fulfilment of export obligation in respect of Advance Authorisation - HELD THAT:- It is clear from the decision of the Tribunal in Shakti Pumps [2024 (7) TMI 541 - CESTAT NEW DELHI] that Shakti Pumps was held entitled to claim refund of CENVAT credit in cash under the provision of section 142(3) of the CGST Act even though Shakti Pumps had paid CVD and SAD post implementation of the CGST Act and in terms of the 2004 Credit Rules, as applicable prior to 01.07.2017, Shakti Pumps was entitled to claim CENVAT credit of CVD and SAD paid on imports. The appellant would, therefore, be entitled to refund in cash CENVAT credit of the amount of CVD and SAD paid after 01.07.2017.
It would be seen that the Jharkhand High Court after acknowledging that under section 142(3) of the CGST Act a refund application can be filed with respect to any amount relating to CENVAT credit paid under the existing law and it has to be disposed of in accordance with the provisions of the existing law, the refund was not granted for the reason that the writ petitioner had not claimed transactional credit, but had claimed the amount of service tax on ‘port service’ as credit in the ST-3 returns to which it was admittedly not entitled to as it was an assessee under service tax only on reverse charge mechanism and admittedly the “port services” availed by the writ petitioner was not covered under reverse charge mechanism. Thus, it was found as a fact that the writ petitioner had not only illegally taken credit of service tax on “port services” as credit in the ST-3 returns, but had filed an application for refund of the same under section 142(3) of the CGST Act, which was not permissible in law. This decision of the Jharkhand High Court in Rungta Mines [2022 (2) TMI 934 - JHARKHAND HIGH COURT] would, therefore, not come to the aid of the department.
The decision of the Larger Bench of the Tribunal in Collector of Central Excise, Chandigarh vs. Kashmir Conductors [1997 (7) TMI 186 - CEGAT, COURT NO. II, NEW DELHI - LB] relied upon by the learned authorized representative appearing for the department is also not applicable to the facts of the present case since it deals with time limit for filing refund claim. In the instant case, the refund claim has not been rejected as being barred by time under section 11B of the Central Excise Act, 1944.
Conclusion - The appellant would be entitled to refund of CENVAT credit in cash under the provisions of section 142(3) of the CGST Act of the amount of CVD and SAD paid after the coming into force of the CGST Act on 01.07.2017.
Appeal allowed.
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2025 (5) TMI 1126
Time limitation - availment of CENVAT Credit on Customs Education Cess and Customs Secondary & Higher Education Cess paid on imported inputs and capital goods under the CENVAT Credit Rules, 2004 - HELD THAT:- The availment of irregular availment of CENVAT Credit on Customs Education Cess and Customs Secondary & Higher Education Cess was noticed by the Department only during the course of CERA audit conducted in the month of December, 2013. The appellant was subsequently asked to submit evidence regarding admissibility of the said credit availed by them vide letters dated 20.12.2013, 20.01.2014, 30.01.2014, 10.02.2014, 25.02.2014 and 11.03.2014. However, the appellant has not submitted any reply to the above said communications issued by the Departmental authorities. From the above, it is found that the appellant had not provided any evidence to the Department in support of admissibility of the said credit availed by them as asked for by way of several letters issued to them.
The Department has calculated the credit availed by the appellant on Customs Education Cess and Secondary & Higher Education Cess on the imported inputs and imported capital goods and wanted to verify the correctness of such calculation from the appellant by means of various communications. However, the appellant has not cooperated with the Department or submitted any evidence to that effect. Thus, it is clear that the delay in issuing the Notice was only on account of non-cooperation of the appellant in producing the required documents - the Revenue has arrived at the irregular credit availed by the appellant on the basis of the available documents, in the absence of any evidence being submitted by the appellant in support of their claim.
The irregular availment of CENVAT Credit on Customs Education Cess and Customs Secondary & Higher Education Cess in a combined manner and not showing it separately in the returns clearly establishes that there was suppression of facts on the part of the appellant, with an intent to avail the said irregular credit. Accordingly, the demand for recovery of irregularly availed credit from the appellant by invoking the extended period of limitation is sustainable in the present case.
Penalty - HELD THAT:- Since suppression of facts with intent to avail irregular credit stands established in this case, the appellant is required to be penalized. Consequently, the penalties imposed on the appellant are upheld.
Conclusion - Since the Appellant had intentionally not mentioned the availment of CENVAT Credit on Customs Education Cess and Customs Secondary & Higher Education Cess in the Returns filed by them, it was not possible for the Revenue to know about the irregular availment of credit. Hence, suppression of facts with intent to avail irregular CENVAT Credit on the part of the Appellant stands clearly established in this case. Accordingly, in these facts and circumstances, invocation of the extended period of limitation and imposition of penalty are justified.
There are no infirmity in the impugned order - appeal dismissed.
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2025 (5) TMI 1125
Declared Wealth of the appellant - Whether the rental income declared by the assessee from plots of land for FY 2012-13 was correctly treated as income from other sources by the income tax authorities and whether this treatment impacts the wealth tax assessment? - HELD THAT:- Here it is important to know that rental income was shown in the assessment year 2013-14 but the enquiries and verification of the land were made by the Wealth Tax Officer in the year 2016-17. The counsel of the assessee has argued that the shades were constructed in the same land from which the rental income was received. Perhaps they could not be there know in the year 2016-17 but on the basis of findings of the year 2016-17, the rental income pertaining to assessment year 2013-14 cannot be denied.
As the argument of the counsel of the assessee that on the basis of findings pertaining to assessment year 2016-17 cannot be applied on the actual acceptance of rental income in assessment year 2013-14 and therefore, we find it difficult in sustaining the order of the Commissioner of Wealth Tax (Appeals). Thus, the assessee’s appeal on this issue is allowed.
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2025 (5) TMI 1124
Seeking to set aside the directions contained in paragraph 58(b) of the award with regard to future interest - appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (‘the 1996 Act’) - Nature of interest payment provided in the award - contract work - rate of interest or award of interest for the pre-reference/past period - HELD THAT:- We have already noted about the limited nature of challenge made by the respondent during the hearing of the appeal filed under Section 37 of the 1996 Act. Learned senior counsel appearing for the respondent clarified that the challenge to the award stood restricted to the directions issued by the arbitral tribunal insofar the issue of interest was concerned. He clarified that the challenge was not with respect to either the rate at which interest was awarded or the grant of interest for the pre-reference/past period. The grievance was confined to the directions contained in paragraph 58(b)(i) of the award and the similar nature of interest in paragraph 58(b)(ii) inasmuch as the arbitral tribunal proceeded to award interest on identical terms: on the principal amount plus the amount of interest for the pre-reference/past period.
We now come to the analysis of Section 31(7), both clauses (a) and (b). For the time being we concentrate on clause (a) insofar it deals with the period for which interest may be awarded. A reading of clause (a) reveals that interest may be for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. In real terms it means the period from the date on which the cause of action arose till filing of the claim petition by the claimant and from the date of filing of the claim petition till the date of the award.
A careful and minute reading of the Section 31(7)(a) will make it clear that the arbitral tribunal has the discretion to include in the sum awarded interest at such rate as it deems reasonable on the whole or any part of the money awarded for the whole or any part of the period from the date on which the cause of action arose till the date on which the award is made. We may exclude that part of the sentence ‘on the whole or any part of the money’ from our analysis since this is not relevant to the controversy. If we exclude this portion, what then becomes discernible is that the arbitral tribunal has the discretion to include in the sum awarded : firstly, interest at such rate as it deems reasonable; and secondly, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. This would mean that the arbitral tribunal can exclude a period from the date on which the cause of action arose till the date on which the award is made for the purpose of grant of interest, as has been done in the present case. It would also mean that the arbitral tribunal can grant interest for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made. It can be a composite period or the said period can be further sub-divided, as done in the present case i.e. from the date of cause of action to filing of the claim and from the date of filing of the claim till the date of the award excluding the period when the appellant was found to be remiss. It would also mean that there can be one rate of interest for the whole period or one or more rates of interest for the sub-divided periods as has been done in the instant case. In our opinion, this would be the correct approach to interpret Section 31(7)(a), given the scheme of the 1996 Act.
That being the position, we are of the view that the Division Bench had fallen in error by holding that the arbitral tribunal had no jurisdiction to award interest for two periods i.e. pre-reference and pendente lite when the statute provides for only one period viz. from the date when the cause of action arose till the date of the award. The view expressed by the High Court is not the correct interpretation of Section 37(1)(a) of the 1996 Act as explained by us supra as well as in Pam Developments Private Limited [2024 (8) TMI 1141 - SUPREME COURT] and S.A. Builders Ltd. [2024 (12) TMI 1015 - SUPREME COURT]
This brings us to the second issue on which the High Court set aside the directions of the arbitral tribunal contained in paragraph 58(b) of the award. According to the Division Bench, the arbitral tribunal had committed an illegality in forging the principal amount with interest while computing the awarded amount on which future interest is to be paid. Interest awarded for the past period could not have been subjected to further levy of interest during the pendente lite or post award period on merger with the principal amount as this would amount to levy of compound interest.
This aspect of the matter is no longer res integra.
A three-Judge Bench of this Court in UHL Power Company Ltd. Vs. State of Himachal Pradesh [2022 (1) TMI 307 - SUPREME COURT] declared that the judgment in S.L. Arora [2010 (1) TMI 1261 - SUPREME COURT] has since been overruled by a three-Judge Bench of this Court in Hyder Consulting (UK) Ltd. [2014 (11) TMI 1240 - SUPREME COURT] The majority view in Hyder Consulting (UK) Ltd. [2014 (11) TMI 1240 - SUPREME COURT] is that post-award interest can be granted by an arbitrator on the interest amount awarded.
It has been held that the sum awarded would mean the principal amount plus the interest awarded from the date of cause of action upto the date of the award. The sum awarded in Section 31(7)(a) would mean principal amount plus the interest awarded. Thereafter, as per Section 31(7)(b) of the 1996 Act, the sum (principal amount + interest) would carry further interest at the rate of 2 per cent higher than the current rate of interest prevalent on the date of the award to the date of payment.
Therefore, in view of the clear legal position delineated as above, impugned judgment of the Division Bench dated 01.08.2023 cannot be sustained.
Thus, having regard to the discussions made above, impugned judgment and order dated 01.08.2023 passed by the Division Bench of the High Court is hereby set aside. Civil appeal is accordingly allowed. However, there shall be no order as to cost.
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2025 (5) TMI 1123
Valid arbitration agreements under the Arbitration and Conciliation Act, 1996 or not - dispute resolution clauses contained in Article 20 of the respective Concession Agreements executed between Municipal Corporations of Delhi and private contractors.
Whether the dispute resolution clauses viz. Article 20 in the subject-Concession Agreements, constitute a valid arbitration agreement between the parties?.
HELD THAT:- It is doubtless laudable how rapidly the Indian legal ecosystem has evolved to accommodate arbitration. The Indian Legislature and Judiciary have clearly worked in lockstep to ensure that the arbitral process is regulated efficiently, and suffers from minimal judicial intervention. That being said, it is constrained to observe that much and more remains to be done.
As the facts of these appeals clearly illustrate, the drafting of arbitration clauses in commercial agreements in India leaves much to be desired. Despite arbitration being introduced as a means of ensuring speedy and effective dispute resolution, it is evident and ironic that, in certain cases, the process has been misused to further complicate and prolong the resolution of disputes. The manner in which ambiguity is embedded into such agreements raises serious concerns. Whether this stems from administrative oversight or deficient legal advice is a matter best left for separate consideration.
However, it is evident that the rival parties in these appeals are neither paupers nor indigent individuals who may have been disadvantaged by inadequate legal representation, thereby prolonging the litigation. On the contrary, one party is a statutory civil body in the National Capital Region, ostensibly operating with its own legal department, while the other comprises prominent and affluent contractor-builders with ample resources to retain the finest legal counsel available in the country.
This willful and wanton wastage of judicial time is similarly a practice that is highly deplorable, to say the least. It is high time that arbitration clauses are worded with piercing precision and clarity, and that they are not couched in ambiguous phraseology. This is a responsibility and onus that every legal counsel, advisor, and practitioner must shoulder most dutifully. We would, in fact, take this opportunity to advise, if not caution and warn, the legal fraternity against engaging in such practices which result in a criminal wastage of precious judicial time. Indeed, their professional credentials will not earn any stripes if they indulge in such juggling of words.
Equally, the Courts or judicial fora of our country—as a matter of judicial best policy—must show an unwavering tendency towards rejecting shoddily drafted clauses at the very threshold. Such cases, which prima facie disclose mala fides woven into the very Agreement they seek adjudication over, must be thrown out of the Court, as they have been indulged for far too long. We would complementarily urge the Courts to invoke their suo moto powers in appropriate cases wherein legal firms or counsel are found designing ‘arbitration clauses’ which deliberately mislead and misguide. The time is not far when personal liability must be assigned for such unscrupulous acts, along with the sanctioning of the harshest punitive measures against the actors.
Conclusion - i) Article 20 of the Concession Agreements executed in all the three appeals before does not form an arbitration agreement, and thus cannot be brought under the purview of the Arbitration Act. ii) The impugned judgments of the High Court in the cases of SMS Ltd. and CCC Ltd. are hereby set aside. iii) The impugned judgment of the High Court in the case of DSC Ltd. is hereby upheld. iv) It is, however, clarified that the parties across all three appeals are at liberty to pursue their alternative remedies in accordance with law.
Appeal disposed off.
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2025 (5) TMI 1122
Employee Appointment contract - Imposition of liquidated damages in the event of pre-mature resignation - Seeking to quash clause 11(k) of the appointment letter - violation of Articles 14 and 19(1)(g) of the Constitution of India and Sections 23 and 27 of the Indian Contract Act, 1872 - opposed to public policy and restraint of trade - HELD THAT:- Generally speaking, public policy relates to matters involving public good and public interest. What is ‘just, fair and reasonable’ in the eyes of society varies with time. Civilizational advancements, growth of knowledge and evolving standards of human rights and dignity alter the contours of public good and policy.
Since the last decade of 20th century, India witnessed an era of liberalization. Golden days of monopolistic public sector behemoths were gone. Public sector undertakings like the appellant-bank needed to compete with efficient private players operating in the same field. To survive in an atmosphere of deregulated free-market, public sector undertakings were required to review and reset policies which increased efficiency and rationalized administrative overheads. Ensuring retention of an efficient and experienced staff contributing to managerial skills was one of the tools inalienable to the interest of such undertakings including the appellant-bank.
This prompted the appellant-bank to incorporate a minimum service tenure for employees, to reduce attrition and improve efficiency. Viewed from this perspective, the restrictive covenant prescribing a minimum term cannot be said to be unconscionable, unfair or unreasonable and thereby in contravention of public policy.
The stance of the appellant-bank is neither unjust nor unreasonable. The appellant-bank is a public sector undertaking and cannot resort to private or ad-hoc appointments through private contracts. An untimely resignation would require the Bank to undertake a prolix and expensive recruitment process involving open advertisement, fair competitive procedure lest the appointment falls foul of the constitutional mandate under Articles 14 and 16.
Keeping these exigencies in mind, the appellant-bank had incorporated the liquidated damage clause in the appointment contract.
The High Court failed to consider the restrictive covenant in its proper perspective in the factual matrix of the case and mechanically relied on BEML [2009 (12) TMI 1074 - KARNATAKA HIGH COURT] to set aside the covenant as barred by law.
That apart, in BEML [2009 (12) TMI 1074 - KARNATAKA HIGH COURT] the issue of financial loss suffered by the public sector undertaking owing to time consuming and expensive recruitment drives due to pre-mature resignations had not fallen for consideration. It is trite judgments cannot be read as statutes and have to be applied keeping in mind the factual matrix peculiar to each case Haryana Financial Corporation v. Jagdamba Oil Mills [2002 (1) TMI 1266 - SUPREME COURT].
Thus, we are of the view the restrictive covenant in clause 11(k) of the appointment letter does not amount to restraint of trade nor is it opposed to public policy.
Consequently, the appeal is allowed. Impugned judgment and order of the High Court is set aside.
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2025 (5) TMI 1121
Determination of jurisdiction to manage arbitral proceedings of the contract - overriding effect of Micro, Small and Medium Enterprises (Development) Act, 2006 ‘MSMED Act.’ over the Arbitration and Conciliation Act, 1996 ‘Arbitration Act.’ - HELD THAT:- In our view, the issue is no more res integra and is covered by the decision of this Court in Mahakali [2022 (11) TMI 91 - SUPREME COURT].
The issue relating to ‘seat of arbitration’ in all cases covered under the MSMED Act is settled in view of the pronouncement of this Court in Mahakali. This position is also true by virtue of the specific provision of the MSMED Act, that is, sub-Section (4) of Section 18, which vests jurisdiction for arbitration in the Facilitation Council where the supplier is located:
There is no dispute about the fact that the appellant-MSME is located in Delhi and as such the Facilitation Council, (South- West), GNCTD, Old Terminal Tax Building, Kapashera, New Delhi- 110037. In exercise of its power, the said Council entrusted the conduct of arbitration through the institutional aegis of the Delhi Arbitration Centre. The conclusions drawn by us are the logical consequence of the statutory regime as also declared by this Court in Mahakali.
Thus, we allow the present appeal and set aside the impugned order dated 22.04.2024 passed by the Karnataka High Court in Writ Petition and direct conduct and conclusion of arbitral proceedings.
The civil appeal is disposed of.
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2025 (5) TMI 1120
Absolute owner of the land - restriction on enjoyment of land - Section 10 of the Transfer of Property Act, 1882 - Alienation of land by the District Collector, Medak, Government of Andhra Pradesh - Imposition of condition pursuant to the alienation of land by the Government of Andhra Pradesh - Condition/restriction imposed by the State Government would be violative of Section 10 of the TPA.
Alienation of land by the District Collector, Medak, Government of Andhra Pradesh - sale or alienation/allotment? - HELD THAT:- The request of the Respondent-Trust was processed as per the instructions laid down in G.O.Ms. No.635 dated 02nd July, 1990 and the land in question was conditionally allotted by the District Collector, Medak, Government of Andhra Pradesh vide order dated 8th February 2001 by virtue of the power conferred under the Telangana Alienation of State Lands and Land Revenue Rules, 1975 framed under Sections 25 and 172 of the Act and G.O.Ms.No.635 dated 2nd July 1990 read with Board Standing Order 24. The said fact is apparent from the alienation letter dated 8th February 2001 issued by the District Collector, Medak, which specifically records that sanction is accorded to alienation of Government land subject to payment of market value and subject to the following three conditions. It was made clear that in case of deviation of the said three conditions, the land shall be resumed back by the Revenue authorities.
The alienation of land by the District Collector, Medak, Government of Andhra Pradesh vide order dated 8th February, 2001 was not a sale, but an allotment under a statutory Scheme.
Imposition of condition pursuant to the alienation of land by the Government of Andhra Pradesh - HELD THAT:- Though no specific purpose of allotment was mentioned, yet this Court is of the view that as the allotment was in favour of the Respondent-Trust, the allotment could be used for a charitable purpose only. Even in the Respondent- Trust’s understanding, the allotment of land was conditional. This would be apparent from the fact that not only in the contemporaneous correspondence, but even in the writ petition filed, there was an admission by the Respondent-Trust that the allotment was made for a charitable purpose, and the land was being used for the said purpose - It was also specifically averred in the writ petition filed by the Respondent- Trust that as the Appellant-State had offered the land as per G.O.Ms. No.635 dated 2nd July 1990 subject to three conditions vide proceedings No.E3/7542/98 dated 08th February 2001, the Respondent-Trust had followed the same ‘scrupulously’. Consequently, the Respondent-Trust’s argument that no specific purpose of allotment was specified is false to the Respondent-Trust’s knowledge.
Condition/restriction imposed by the State Government would be violative of Section 10 of the TPA - HELD THAT:- This Court is of the view that the Appellant-State had allotted land to public trust for public purpose. In such a situation, the State cannot be put in the normal classical inter vivos party’s position as public interest is supreme and must prevail. This Court is also of the opinion that Rules 1975 and the Board of Revenue Standing Orders operate in a completely distinct space and are not eclipsed by Section 10 of the TPA.
Conclusion - i) The alienation was an allotment under a statutory scheme, not a sale. ii) Conditions were imposed and known; the Respondent-Trust violated these conditions by unauthorized subdivision and sale. iii) Conditions imposed under the statutory scheme are valid and not rendered void by Section 10 of the TPA.
Appeal allowed.
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