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Showing 61 to 80 of 1441 Records
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2025 (5) TMI 1381
Deduction u/s. 80P(2)(d) - interest income earned from investments made in co-operative banks - whether the appellant Co-operative Housing Society is entitled to its claim of deduction as interest income derived from its investments in the said co-operative bank? - HELD THAT:- In the instant case the appellant society is registered under Maharashtra Co-operative Society Act, 1960. Assessee’s investee co-operative Banks are thus co-operative societies in the state of Maharashtra. Various co-ordinate benches of the Tribunal have been consistently taking the view in favour of assessee as stated herein above, holding that the interest derived from the co-operative banks, which are co-operative societies, is allowable as deduction u/s. 80P(2)(d) of the Act.
The assessee is thus entitled for the benefit u/s. 80P(2)(d). The aforesaid point is accordingly determined in favor of the assessee and against the revenue. The impugned order passed by CIT(A), thus cannot be sustained.
Assessee’s appeal is allowed.
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2025 (5) TMI 1380
Assessment u/s 153A - validity of approval accorded u/s 153D - HELD THAT:- approval letter has been issued in respect of 38 cases and apparently it does not even mention that ‘approval’ has been granted. Thus, it is seen that the issue raised by the assessee in the additional ground of appeal is squarely covered in favour of the assessee by the order of this Bench of the Tribunal in assessee’s own case for assessment year 2015-16 [2021 (10) TMI 1448 - ITAT LUCKNOW]
We hold that granting of mechanical approval u/s 153D of the Act vitiates the entire proceedings. Accordingly, we allow the additional ground of appeal and quash the assessment order passed by the DCIT under section 153A of the Act. Assessee appeal allowed.
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2025 (5) TMI 1379
Penalty u/s 271D - violation of the provisions of section 269SS - as argued assessee was under bonafide belief that new inserted provisions of section 269SS which becomes operative from 01.06.2015 were not applicable to the immovable property held as stock in trade - HELD THAT:- Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute.
Respectfully, following the observation in the case of R. Dhinagharan (HUF) [2024 (1) TMI 61 - ITAT CHENNAI] we are also of the opinion that when cash is being received in one lump sum, against sale of immovable property, before the Government Registration authority, the sale deed being duly registered before him under his stamp and signature, there appears to be no violation of section 269SS of the Act 61, on the part of the assessee for the year under appeal.
As a result the penalty imposed u/s 271D of the Act 61, is hereby deleted.
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2025 (5) TMI 1378
Eligibility for duty free credit entitlement scheme vide N/N. 53/2003-Cus. dated 01.04.2003 - import of crude degummed soyabean oil - Agricultural product or not - administrative circular No. 10/2004-Cus. dated 30.01.2004 could legally expand the exclusionary clause of the statutory notification No. 53/2003-Cus. dated 01.04.2003 by including all products derived from agricultural or dairy origin, thereby curtailing the benefits under the duty free credit entitlement scheme or not - HELD THAT:- Since the genesis of the present lis is the show- cause notice dated 30.08.2006 issued by the Assistant Commissioner, Kandla, it would be appropriate to initiate the analysis therefrom. The show-cause notice referred to the factum of importation of crude degummed soyabean oil falling under CTH 15071000 chargeable to appropriate tariff duty by the appellant. However, the appellant filed two Bills of Entry dated 26.07.2006 and 27.07.2006 claiming benefit of the notification bearing No.53/2003-Cus. dated 01.04.2003 i.e. exemption from payment of various customs duties on the basis of the license issued by the DGFT for duty free import of goods specified in the license - appellant was called upon to show-cause as to why the duties chargeable/leviable for imported goods should not be charged under Section 28 of the Customs Act, 1962 (‘the Customs Act’ hereinafter) on the goods imported duty free and hit by the exclusion clause of the notification bearing No.53/2003. Appellant was also called upon to show cause as to why interest at appropriate rate on the aforesaid duties should not be charged under Section 28AB of the Customs Act.
High Court did not non-suit the appellant on the ground of alternative remedy but proceeded to hear the challenge on merit. By the impugned judgment and order dated 05.08.2019, High Court held that the basic ingredient of crude degummed soyabean oil is soyabean which is admittedly an agricultural product - According to the test report, unless the crude degummed soyabean oil is refined, it cannot be used for human consumption. Therefore, the High Court rejected the contention that in view of the process undertaken soyabean acquires a distinct marketable identity is without any merit. Finding of the Assistant Commissioner that crude degummed soyabean oil is an agricultural product cannot be faulted.
A two-Judge Bench of this Court in Union of India Vs. Inter Continental [2008 (4) TMI 23 - SUPREME COURT] was considering the question as to whether the end-use verification of the products is necessary for availing the benefit of concessional rate of duty. In that case, the statutory notification bearing No.17/2001-Cus. dated 01.03.2001 provided for concessional rate of duty on crude palmolin oil. However, as per Board’s circular No.40/2001-Cus. dated 13.07.2001, end-use certificate was required to be produced for allowing such benefit. This came to be challenged by the assessee by filing a writ petition in the High Court questioning the direction to produce the end-use certificate which was stated to be a new condition to the statutory notification by way of a circular. Contention of the petitioner was that the circular sought to impose a limitation on the exemption notification or tried to whittle it down by adding a new condition beyond the notification. High Court accepted the writ petition by holding that the Board by issuing a circular subsequent to the notification could not have added a new condition thereby restricting the scope of the exemption notification. Imposing such a condition would tantamount to re-writing the notification or in other words legislating by circular, which is not permissible in law. High Court held that the circular being contrary to the notification could not be sustained as it could not override the notification. This Court agreed with the view of the High Court.
Whether crude degummed soyabean oil imported by the appellant is an agricultural product? - HELD THAT:- On an analysis of the diagram describing the manufacturing process of the appellant, High Court observed that the basic ingredient/root of the product is soyabean. It is not disputed even by the appellant that soyabean is an agricultural product. After referring to the contention of the appellant that after undergoing the process of manufacture, the crude degummed soyabean oil becomes a distinct commodity, High Court observed that though the process undertaken by the appellant may be termed as a manufacturing process but what is to be seen is that soyabean as an agricultural product is a primary product which undergoes a simple operation so as to make it more usable or saleable; it can in no way be said to acquire a distinct identity. Unlike eucalyptus oil, soyabean on extraction of oil does not lose its identity. High Court relied on the test report placed on record to hold that unless the crude degummed soyabean oil is refined, it cannot be used for human consumption. High Court, therefore, rejected the contention of the appellant that after going through the process as explained, soyabean acquires a distinct marketable identity is without any merit and upheld the finding of the assessing authority that crude degummed soyabean oil is an agricultural product.
In Union of India Vs. Delhi Cloth and General Mills Co. Ltd. [1962 (10) TMI 1 - SUPREME COURT], a Constitution Bench of this Court held that the verb ‘manufacture’ used as a word is generally understood to mean as ‘bringing into existence a new substance’, howsoever minor in consequence the change may be. ‘Manufacture’ implies a change but every change is not manufacture. Every change of an article is the result of treatment, labour and manipulation. But something more is necessary to make it ‘manufacture’. There must be transformation; a new and different article must emerge having a distinctive name, character or use.
In the facts of that case, this Court observed that appellants used to bring transformer oil and by removing impurities, it was again made useable as transformer oil. Before and after the process, the product was only transformer oil. That being so, this Court held that it could not be said that a new and distinct commodity had come into existence consequent to the process undertaken by the appellant.
It is unable to concur with the view expressed by the High Court that crude degummed soyabean oil is an agricultural product.
Conclusion - i) The circular bearing No.10/2004 dated 30.01.2004 insofar it expands the exclusionary clause in the statutory notification No.53/2003 dated 01.04.2003 would have no legal consequence. ii) Crude degummed soyabean oil is a product different and distinct in character and identity from soyabean. iii) The process carried out by the appellant using soyabean as raw material and ending in the product crude degummed soyabean oil is manufacturing. iv) Crude degummed soyabean oil is not an agricultural product. v) The appellant would be entitled to the benefits under notification No.53/2003 dated 01.04.2003.
Appeal allowed.
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2025 (5) TMI 1377
Imposition of redemption fine and penalties under sections 112(a) and 114AA of the under section 125 of the Customs Act, 1962 (the Act) - recovery of differential duty - confiscation of goods - HELD THAT:- As far as the redemption fine is concerned, this Tribunal had not altered it or passed any order regarding it in the Final Order while remanding the matter. The appellant’s appeal against the Final Order has been dismissed by the Supreme Court and thus the Final Order attained finality. The redemption fine was Rs. 10,00,000/- in the first OIO and it is the same in the impugned order. We find no reason to interfere with it.
As far as the penalty under section 112(a) is concerned, we find that the Commissioner has, in the impugned order, reduced it to Rs. 10,00,000/- considering the reduced duty. Taking a liberal view, we reduce it further to Rs. 5,00,000/-
Section 114AA was introduced effective from 13.7.2006. Evidently, if any person knowingly made or used any false material in any document after this date, it would attract this section. The Bill of Entry and all the documents with it were filed on 26.6.2003 when this section was not in the statute. There is nothing in this section which suggests that it has retrospective effect. Unless otherwise indicated, all laws will only apply prospectively. Therefore, Section 114AA would not apply to this case. Although this plea was not taken before at any stage, this being a legal ground, must be allowed.
Therefore, penalty imposed under section 114AA is set aside;
Thus, we partly allow the appeal and modify the impugned order.
Rest of the impugned order is upheld.
The appeal is allowed.
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2025 (5) TMI 1376
Seeking to re-determining the FOB value of the export goods - export 598 cartons of readymade garments - export incentives - goods overvalued in order to claim excess Drawback and rebate of State Levies (ROSL) - confiscation - redemption of fine under section 125 and imposition of penalty - Meaning of “FOB value of the goods” and the power to re-determine it - HELD THAT:- The decision of M/s JBN Apparels Pvt LTD, [2025 (3) TMI 514 - CESTAT NEW DELHI], was followed by this Tribunal in some other appeals. We have no reason to take a different view in this appeal. Accordingly, we hold that the Additional Commissioner was wrong in re-determining the FOB value invoking section 14 and the Valuation Rules. This section and the rules do not empower the Customs Officer to determine the FOB value but only empower him to determine the assessable value. Assessable value can be determined as per the transaction value or through some other method.
The two export incentives in this case- Drawback and ROSL are to be paid the percentage of FOB value should be paid so. They have no correlation with the assessable value of the goods. The Additional Commissioner had no authority to order that instead of paying the drawback on the FOB value (as notified by the Government), it should be paid on a value determined by him treating it as FOB value. Similarly, he had no authority to order that instead of the ROSL being paid on the FOB value as laid down in the Foreign Trade Policy, it should be paid on a value determined by him treating it as FOB value.
To sum up:
a. The Additional Commissioner is a stranger to the contract between the exporter and the overseas buyer and has no locus standi to change the FOB value of the goods;
b. The Additional Commissioner has no authority to order that the drawback should be paid on a value determined by him instead of on the FOB value as notified by the Government of India;
c. The Additional Commissioner also has no authority to order that the ROSL should be paid on a value determined by him instead of on the FOB value as per the Foreign Trade policy;
d. The order of confiscation of goods, imposition of redemption fine and penalties are based on the change of the FOB value by the Additional Commissioner, therefore, also cannot be sustained;
e. The impugned order of the Commissioner (Appeals) upholding the above order of the Additional Commissioner cannot be sustained and needs to be set aside;
10. Thus, the appeal is allowed and the impugned order is set aside with consequential relief to the appellant.
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2025 (5) TMI 1375
Violation by a Customs Broker under Regulation 10(d), 10(e), and 10(n) under the Customs Brokers Licensing Regulations (CBLR), 2018 - facilitated customs clearance of the overvalued export of goods - exporter of these consignments was non-functional/non-existent at the declared address - purchase invoices issued by non-existent/fake/suppliers - revocation of the CB licences along with forfeiture in terms of Regulation 10 read with Regulation 17 of CBLR, 2018 - GST Registrations were either suspended or cancelled - HELD THAT:- The proceedings originated from Show Cause Notice (SCN) No. 11/2024 dated 22.02.2024, issued by the Additional Commissioner of Customs, SIIB, ICD Tughlakabad (Export), following an alert from the NCTC regarding three shipping bills dated 15.07.2023.
We observe that the show cause notice further alleges that the CB have facilitated filing of shipping bills on behalf of the exporter M/s SS Enterprises by mis-declaring the value of the goods. Nothing in the Customs Act or the Customs Valuation Rules or the CBLR gives the Customs Broker any power to examine the goods or assess their value. The value of goods has to be self-assessed by the exporter or re-assessed by the officer. The role of Customs Broker is confined to filing the Shipping Bills correctly as per the documents provided to him. We also observe that the show cause notice is too vague to allege violation of Regulations 10(d) and 10(e). There is no evidence in the show cause notice and the suspension order, about the duties which has not been fully complied with by the appellant. The confirmation of proposal of such show cause notice cannot sustain.
We draw our support from the decision of Hon’ble Delhi High Court in the case of Kunal Travels (Cargo) [2017 (3) TMI 1494 - DELHI HIGH COURT], wherein it is held that clause 10(e) of the CB Regulation, 2018 requires exercise of due diligence by the CHA regarding such information which he may give to his client with reference to any work related to clearance of cargo. In the present show cause notice there is no mention of any such information which was to be parted with the exporter. Clause (d) requires that all documents submitted, such as bills of entry and shipping bills delivered etc. reflect the name of the importer/exporter and the name of the CHA prominently at the top of such documents. The aforesaid clauses do not obligate the CHA to look into such information which may be made available to it from the exporter/importer. The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area. That the allegations made against the Appellant / Customs Broker that the CB have facilitated the Shipping Bills on behalf of the exporter M/s SS Enterprises by mis declaring the value of the goods, did not bring the non-compliance of the provisions of the CBLR, 2018 and therefore, the same does not attract violation of Regulation 10(d) and 10(e) of CBLR, 2018.
The appellant had verified the necessary KYC documents viz. IEC of the importer, bank signed authorization and their GSTIN certificate. All the said certificates were found to be valid and existing. From the above discussion, it is clear that there is no such evidence on record which may prove prior knowledge with the appellant about the declarations in the documents provided by the exporter and that those were mis-declarations. As such from the facts on record, it is concluded that the appellant M/s United Cargo Services (PAN ACYPC7426N) has followed the provisions of Regulation 10(d) and 10(e) of CBLR, 2018 and no contravention of the provision of this regulation is established.
We have also perused the inquiry report in reference to impugned show cause notice dated 21.05.2024 that inquiry officer in the detailed report dated 16.08.2024 has meticulously considered the entire factual matrix has concluded that the CB, M/s United Cargo Services has not violated Regulations 10(d), 10(n) and 10(q) of the Customs Brokers Licensing Regulations, 2018. The adjudicating authority has not cited any plausible reason while concluding contrary to said inquiry report. We do not see any reason to differ from the findings of the enquiry officer.
Hence we hereby set aside the order under challenge. Consequent thereto, the appeal is allowed.
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2025 (5) TMI 1374
Transaction value - Polyester Knitted Fabric - Duty on the enhancement of value solely based on the DRI - denial of benefit of exemption of Notification No. 30/2004-CE - Entitlement to exemption from CVD - violation of Section 14 of the Customs Act, 1962, read with Rule 3 of Custom Valuation Rules, 2007 (“CVR, 2007”) - HELD THAT:- Regarding enhancement of transaction value on the DRI alert, is concerned, we find that this issue has been considered by various benches of the Tribunal and it has been consistently held that the declared value cannot be enhanced simply on the basis of DRI alert which was sought to be done in the present cases.
Further, we also find that in the appellants’ own case reported as M/s Sedna Impex India Pvt Ltd & Garg Impex - [2016 (10) TMI 517 - CESTAT CHANDIGARH], the Tribunal has held that declared value cannot be enhanced on the basis of DRI alert.
regarding benefit of exemption from payment of CVD in terms of Notification No. 30/2004-CE dated 09.07.2004, is concerned, we find that this issue has also been considered by the Tribunal in number of cases as relied upon by the appellants cited supra. In this connection, we may again refer to decision of the Tribunal in the case of M/s Artex Textile Private Limited [2017 (9) TMI 1011 - CESTAT CHANDIGARH].
Subsequently, the above ratio has been followed by the Tribunal in the case M/s Artex Textile Private Limited [2017 (9) TMI 1210 - CESTAT CHANDIGARH], wherein the Tribunal has again considered this issue and held in favour of the importer- assessee.
As regards the appellants’ entitlement to benefit of Notification No. 072/2005 dated 22.07.2005, we find that the appellants were allowed the benefit of said notification by the Commissioner (Appeals) vide Order-in-Appeal No. CC(A)/CUS/D-II/ICD PPG & OTHER ICDs/1517-1519/2017 dated 28.12.2017 and similarly, with regard the benefit of Notification No. 151-Cus dated 14.05.1982, we find that Commissioner (Appeals) allowed the benefit of said notification vide Order-in-Appeal No. CC(A)/CUS/D-II/ICD/325- 332/2016 dated 28.03.2016.
Thus, we are of the considered opinion that the impugned orders are not sustainable in law; accordingly, we set aside the same and allow all the appeals of the appellants.
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2025 (5) TMI 1373
Priority of interest of Secured creditors over the assets attached under the Provisions of Prevention of Money Laundering Act, 2002, (PMLA) and Maharashtra Protection of Investors and Depositors Act, 1999 (MPID Act), by virtue of the Provisions of SARFAESI Act, 2002 and RDB Act, 1993 - properties of the Judgment Debtors and Garnishees attached under the Provisions of MPID Act, 1999 would be available for the execution of the decrees against Judgment Debtors in view of the Provision of Moratorium under Section 14 of the IBC, 2016 or not.
HELD THAT:- There remains no shadow of doubt that the exercise of power under Article 142(1) of the Constitution of India being curative in nature, the Supreme Court would not ordinarily pass an order ignoring or disregarding a statutory provisions governing the subject, except to balance the equities between conflicting claims of the litigating parties by ironing out creases in a “cause or matter” before it. Therefore, even while exercising the powers under Article 142, the Supreme Court has to take note of the express provisions of any substantive statutory law and accordingly regulate the exercise of its power and discretion to do complete justice between the parties in the pending “cause or matter” arising out of such statutes. Though, the powers of this Court cannot be controlled by any statutory provisions, when the exercise of powers under Article 142 comes directly in conflict with what has been expressly provided in a statute, ordinarily, such power should not be exercised. Article 142 cannot be used to achieve something indirectly what cannot be achieved directly.
Since the money collected by NSEL from the investors fell under the definition of “deposit” as per Section 2(c) of the MPID Act, the State of Maharashtra invoking the provisions of Section 4(1)(ii) of MPID Act, had attached the properties and monies of the defaulting promoters, directors, managers and members of the NSEL by issuing various notifications. However, the total value of the attached properties was not sufficient for repayment to the depositors due to various reasons such as some of the properties were taken on rent by the members of NSEL from others, while some properties were mortgaged with the banks, against which proceedings under the SARFAESI Act were going on, and against some of the members of NSEL, insolvency proceedings were initiated.
Whether the Secured Creditors would have priority of interest over the assets attached under the provisions of PMLA and MPID Act, by virtue of the provisions of SARFAESI Act and RDB Act? - HELD THAT:- As per Article 246(1) of the Constitution, notwithstanding anything contained in Clauses (2) and (3), the Parliament has exclusive power to make laws with respect to any of the matters enumerated in the List-I in the Seventh Schedule, referred to as “the Union List”. As per Article 246(2), notwithstanding anything in Clause (3), the Parliament and subject to Clause (1), the State Legislature have power to make laws on any of the matters enumerated in List-III in the Seventh Schedule referred to as the “Concurrent List”. As per Article 246(3), subject to Clauses (1) and (2) of Article 246, the Legislature of any State has exclusive powers to make laws for such State, or any part thereof, with respect to any of the matters enumerated in List-II in the Seventh Schedule, referred to as the “State List”. Thus, a three-fold distribution of legislative power between the Union and the States made in the three Lists in the Seventh Schedule of the Constitution read with Article 246, exhibits the Principle of Federal supremacy viz. that in case of inevitable conflict between Union and State powers, the Union power as enumerated in List-I shall prevail over the State power as enumerated in Lists-II and III, and in case of overlapping between Lists II and III, the latter shall prevail.
In view of such distribution of Legislative powers, situations have arisen where two legislative fields have apparently overlapped. In such situations, this Court has held that it would be the duty of the courts to ascertain as to what degree and to what extent, the authority to deal with the matters falling within these classes of subjects exists in each of such legislatures, and to define the limits of their respective powers.
It may be noted that the constitutional validity of the MPID Act is no longer res integra in view of the decisions in case of Sonal Hemant Joshi and Ors. vs. State of Maharashtra and Ors. [2011 (5) TMI 1099 - SUPREME COURT] and in case of State of Maharashtra vs. 63 Moons Technologies Ltd. [2022 (2) TMI 1348 - SUPREME COURT]. This Court in 63 Moons Technologies Ltd. relying upon the earlier decision in case of Sonal Hemant Joshi and Ors. [2011 (5) TMI 1099 - SUPREME COURT], after discussing the various provisions of MPID Act particularly with regard to the definitions of “Deposit” and “Financial Establishment,” held that 'Having discussed the judgments of this Court on the constitutional validity of the State legislations governing financial establishments offering deposit schemes, including the MPID Act, there is no reason for us to reopen the question. This Court has held that the MPID Act is constitutionally valid on the grounds of legislative competence and when tested against the provisions of Part III of the Constitution.'
The PMLA was enacted to implement the international resolutions and declarations made by the General Assembly of United Nations, and prevent money laundering as also to provide for confiscation of properties derived therefrom or involved in money laundering. The subject matter of PMLA therefore is traceable or relatable to the Entry-13 of Union List (List-I) of Seventh Schedule.
As held by the Constitution Bench in Union of India and Another vs. Delhi High Court Bar Association and Others [2002 (3) TMI 825 - SUPREME COURT], under Entry 45 of List-I, it is Parliament alone which can enact a law with regard to the conduct of business by the Banks. Recovery of dues is an essential function of any Banking Institution. In exercise of its legislative power relating to Banking, the Parliament can provide the mechanism by which monies due to the Banks and Financial Institutions can be recovered - However, merely because the SARFAESI Act and RDB Act which are enacted in respect of the subject matter falling in List-I and having been enacted by Parliament, they could not be permitted to override the MPID Act, which is validly enacted for the subject matter falling in List-II – State List. If such an interpretation is permitted to be made, it would amount to denuding the State of its legislative power to enact and enforce legislation, which is within the exclusive domain of the State, and it would offend the very principle of Federal Structure set out in Article 246 of the Constitution of India, held to be a part of the basic structure of Constitution of India.
In the instant case, the attachment of the properties over which the Secured Creditors is said to have security interest, have been attached under Section 4 of the MPID Act. Such properties are believed to have been acquired by the Financial Establishment i.e. NSEL either in its own name or in the name of other persons from out of deposits collected by the Financial Establishment. All such properties and assets of the Financial Establishment and the persons mentioned in the said provision, vest in the Competent Authority appointed by the Government, pending further orders from the Designated Court. Such monies or deposits of depositors/ investors, who have been allegedly defrauded by the Financial Establishment, and for the recovery of which the MPID Act has been enacted, could not be said to be a “debt” contemplated in Section 26E of the SARFAESI Act, and hence also the provisions of Section 26E could not be said to have been attracted to the facts of the case.
Whether the properties of Judgment Debtors and Garnishees attached under the MPID Act would be available for the execution of decrees against the Judgment Debtors in view of the provisions of Moratorium under Section 14 of the IBC, 2016? - HELD THAT:- The MPID was enacted in the public interest to curb the unscrupulous activities of the Financial Establishments, who had defaulted to return the deposits of the public in the State of Maharashtra. The constitutional validity of the said Act has been upheld by this Court in Sonal Hemant Joshi and Ors. and in State of Maharashtra vs. 63 Moons Technologies Ltd.
In the instant case, there is also no overlap or inconsistency between the provisions contained in the IBC and MPID Act. As such, Section 14 of IBC has the connotation which is very much different from Section 4 of MPID Act. The proceedings under the IBC arise out of the Debtor-Creditor relationships of the parties. As per Section 14 of IBC, which pertains to the Moratorium, a declaration has to be made to an order by the Adjudicating Authority prohibiting the acts mentioned therein. Therefore, Section 14 of IBC is consequent upon the order passed by the Adjudicating Authority declaring Moratorium.
A conjoint reading of Section 4, 5 and 7 of the MPID Act, makes it clear that though Section 4(2) states about the attached properties being vested in the Competent Authority appointed by the Government, such vesting would be subject to the orders passed by the Designated Court. We therefore see no inconsistency between the provisions contained in the MPID Act and the IBC - In absence of any inconsistency having been brought on record, between the provisions contained in the MPID Act and in the IBC, Section 238 of IBC, which gives overriding effect to the IBC over the other Acts for the time being in force, cannot be said to have been attracted.
In that view of the matter, it is held that the properties of the Judgment Debtors and Garnishees attached under the provisions of the MPID Act, would be available for the execution of the decrees against the Judgment Debtors by the S.C. Committee, despite the provision of Moratorium under Section 14 of the IBC.
Conclusion - i) The secured creditors do not have priority over assets attached under PMLA and MPID Act by virtue of SARFAESI and RDB Acts. ii) Properties attached under MPID Act are available for execution of decrees despite moratorium under Section 14 of IBC.
Appeal disposed off.
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2025 (5) TMI 1372
Seeking grant of Bail - criminal conspiracy - cheating and fraud - fraudulent import of fertilizers and other materials for fertilizer production at inflated prices and claimed higher subsidy from Government of India causing loss of several crores of rupees - siphoning off the commission received from the suppliers through a complex web of fake commercial transactions through multiple companies - Flight risk - it was held by High Court that 'The petitioner is entitled to be released on bail on merits as well as on medical grounds'.
HELD THAT:- Prima facie, it appears that the issue is covered by the judgment in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. [2022 (7) TMI 1316 - SUPREME COURT (LB)], there are no reason to interfere with the impugned order(s) passed by the High Court.
SLP dismissed.
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2025 (5) TMI 1371
Place of Supply - Intermediary services related to goods - Design and development services - Business support services - Place of Provisions of Services Rules, 2012 ( POPS) - Export of service or not - HELD THAT:- In relation to the intermediary services in relation to goods for the period from 01.04.2014 to 30.09.2014, the definition of the term “Intermediary” under Rule 2(f) of the POPS Rules, 2012 has changed. Going through the amendments in the definition of the term “intermediary” and relying upon the judgments in the cases of Chevron Phillips Chemicals India Pvt. Ltd.[2019 (12) TMI 1066 - CESTAT MUMBAI] and Viavi Solutions India Pvt. Ltd. [2024 (6) TMI 187 - CESTAT CHANDIGARH], I hold that intermediary services in relation to goods became taxable with effect from 01.10.2014 by virtue of amendment in the definition of the term “intermediary” in Rule 2(f) of the POPS Rules, 2012 vide Notification No.14/2014-ST dated 11.11.2014 with effect from 01.10.2014.
In relation to design and development services, looking at the process of providing these services and the fact that no third party is involved, I further hold that the Appellant is not providing “Intermediary Services”“, and place of provision shall be the location of recipient of service, which is outside India. Since all the clauses of Rule 6A of the Service Tax Rules are satisfied, design services will be considered as export of service.
So far as invoking of extended period of limitation, audit of the Appellant was concluded on 30.01.2020; the Appellant already furnished the details of design and intermediary services provided during the years 2014-15 to 2016-17; the Appellant voluntary obtained service tax registration with effect from 01.10.2014 and started paying service tax on intermediary services; hence I do not find any ingredient of suppression of facts or any willful misstatement or fraud or collusion or contravention of the provisions of the Act or of the Rules made thereunder with an intent to evade payment of service tax.
Demand set aside.
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2025 (5) TMI 1370
Application seeking rectification of mistake - Scope and limits of rectification powers of the Tribunal in relation to errors apparent on record - typographical error regarding the date mentioned in the final order - Whether non-consideration of a decision can be said to be a mistake apparent on record - HELD THAT:- We observe that the issue stands decided by Hon’ble Apex Court in Assistant Commissioner of Income Tax Vs. Saurashtra Kutch Stock Exchange Ltd.- [2008 (9) TMI 11 - SUPREME COURT], wherein it has been held that the non-consideration of a decision is a mistake which can be set to be a “mistake apparent from the record” which could be rectified.
In light of above decisions and perusing that both the decisions as referred in the application were submitted by the appellant additionally on 11.12.2023. However, the final order has no mention about those decisions. Both the decisions need to be referred and discussed in the present judgment.
In the light of above discussion following is the conclusion:
(1) Two case laws have been incorporated in para 5 of the Final Order No. 56012 of 2024 dated 10.07.2024;
(2) Para 21(A) is added in the said final order incorporating the discussion about two decisions referred by the appellant however with the finding about non-applicability thereof to the fact and circumstances of the present case;
(3) Date of final order is 10.07.2024, hence the same is not an error as alleged. The date may be checked in the uploaded order and if required the needful be done by the registry in terms of this order with reference to the application of the appellant seeking correction of date.
As a result the present application is allowed partly.
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2025 (5) TMI 1369
Levy of service tax - nature of activity - service or not - incentives, discounts, or reimbursements extended by a motor vehicle manufacturer to its authorized dealer under a principal-to-principal dealership agreement - HELD THAT:- The Larger Bench of this Tribunal in the case of Kafila Hospitality and Travels Pvt. Ltd. [2021 (3) TMI 773 - CESTAT NEW DELHI (LB)] dealt with the issue whether service tax can be levied under the category of “Business Auxiliary Service” on target based incentives paid to the travel agents by the Airlines as they were promoting and marketing the business of the Airlines. The Tribunal took the view that it is not a case where the air travel agent is promoting the service of the Airlines rather by sale of airlines ticket he was ensuring the promotion of its own business even though this may lead to incidental promotion of the business of the Airlines. On the issue, whether “incentive” paid for achieving target are taxable, the Tribunal analysed the scope of the term “incentives” that they are generally given to encourage performance of the party.
On examining the dealership agreement entered between MSIL and the appellant, it is found that MSIL is engaged in manufacturing, marketing and selling of motor vehicles and the appellant purchases the vehicles from the manufacturer as their authorised dealer. The relationship between the appellant and MSIL is only of buyer and seller and sale-purchase have taken place on principal to principal basis.
The activity undertaken by the appellant is for the sale and purchase of the vehicle and the incentives are in the nature of trade discounts. The incentives, therefore form part of the sale price of the vehicles and have no correlation with the services to be rendered by the appellant. That in terms of the dealership agreement, the appellant purchases the vehicles from MSIL and sells the same to its end customers. The activity of promoting the sale is with respect to the vehicles owned by the appellant which incidentally is in interest of both the parties - the appellant is engaged in the onward sale of vehicles which involves merely transfer of property in goods which is excluded from the definition of “service”. That Section 66D of the Finance Act, 1994 contains the negative list of services under various clauses and clause (e) provides for “trading of goods”. On this ground also it is found that incentives which are part of sale activity are not exigible to service tax.
Conclusion - The amount of incentives and discounts cannot be treated as consideration for any service and therefore no Service Tax is leviable thereon.
The impugned order is, therefore, set aside and the appeals, are allowed.
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2025 (5) TMI 1368
Validity of show cause notice issued beyond the period stipulated in the proviso to section 73(1) of the Finance Act 1994 [the Finance Act] - suppression of facts with an intent to evade payment of service tax - Extension of period of limitation - service tax proposed under the three heads namely “rent-a-cab service”, “renting of immovable property” and luggage booking under “business support service” - HELD THAT:- In the present case, as noticed, all that has been stated in paragraphs 9 and 12 of the show cause notice is that the appellant received an amount for the period 2008-09 to 2011-12 for the three taxable services and since the appellant did not provide the required documents it suppressed facts from the department with intent to evade payment of service tax. Though the appellant specifically denied that any facts had been suppressed, much less with an intention to evade payment of service tax, the Joint Commissioner merely observed that the fact of providing taxable service would not have come to the notice of the department had investigation not been initiated by the department and it is for this reason that the Joint Commissioner held that the appellant had willfully suppressed material facts from the department with intent to evade payment of service tax. The Commissioner (Appeals) held that there was no infirmity with the issue of demand as the period of demand was within five years.
It cannot be alleged by the department that facts were not in the knowledge of the department since earlier also a show cause notice dated 01.10.2009 had been issued by the department to the appellant for the period from 2004-05 to March 2008 proposing demand under the same heads as in the present appeal. There is, therefore, no reason as to why the show cause notice should have been issued beyond the normal period of limitation for the period from April 2012 to March 2013, nor there is any justification for issuing the show cause notice dated 22.10.2014 for the subsequent period from April 2013 to March 2014. It is, therefore, clearly a case where the facts were in the knowledge of the department and the department cannot allege that facts had been suppressed.
In any case, even if it is assumed that facts were suppressed by the appellant then too no reason has been assigned in the orders passed by the Joint Commissioner or the Commissioner (Appeals) that such suppression was with an intent to evade payment of service tax. This apart, service tax has been demanded on the basis of profit and loss account and balance sheet, which are public documents which the department could have ascertained. The issue involved in this appeal also relates to interpretation of law. The decisions referred to above have clearly held that in such circumstances there can be no suppression of facts with an intent to evade payment of service tax.
The impugned orders dated 16.11.2016 and 17.08.2017 passed by the Commissioner (Appeals), therefore, deserve to be set aside on the sole ground that the extended period of limitation contemplated under the proviso to section 73 (1) of the Finance Act could not have been invoked in the facts and circumstances of the case.
The orders dated 16.11.2016 and 17.08.2017 passed by the Commissioner (Appeals) are, therefore, set aside and the two appeals are allowed with consequential relief(s), if any, to the appellant.
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2025 (5) TMI 1367
Condonation of delay in filing the application for restoration - duty paid on fixed facility charges - Demand for CENVAT credit including Education cess and Secondary and Higher Education cess in terms of Rule 2014 of the CENVAT Credit Rules, 2004, read with Section 11A (2) of the Central Excise Act, 1944 - levy of Penalty and interest - definition of "input" - HELD THAT:- We have perused the reasons given by the applicant for not being present on the day when the matter was called. The reasons are acceptable and are not being disputed by the assessee. Therefore, the delay in filing the application is condoned and the appeal stands restored to its original file and number of this Court to be heard and disposed of. The application, IA No: GA/3/2025, is allowed.
The learned Tribunal took note of the fact that identical issue was considered in the assessee’s own case and by final order dated March 23, 2018, the claim of the assessee with regard to CENVAT credit on the duty paid on fixed facility charges was allowed. While doing so, the order passed by the co-ordinate Bench of the Tribunal in the case of Commissioner of Excise, Hyderabad vs. Aurobindo Pharma Ltd., [2009 (3) TMI 908 - CESTAT BANGALORE] was relied on.
The revenue challenged the said order before this Court in CEXA 52/2019 and the said appeal was dismissed by the Hon’ble Division Bench by judgment dated February 24, 2020. Thus, the issue in the assessee’ s own case having been decided, the revenue cannot take a different view in the matter though the only distinction in the instant case is that the fixed facility charges is in respect of the facility which was provided for supply of liquid oxygen whereas in the other case it was liquid nitrogen.
That apart, the clarification issued by the Central Board of Excise and Customs dated November 10, 2014 also comes to the aid and assistance of the assessee wherein it was clarified that in the months back there is supply of gas, all elements of consideration, such as price of gas at designated rate per unit of gas and FFC would be added to determine the assessable value for payment of Central Excise Duty.
Further, it was clarified that where the gases so supplied are used by another assessee as ‘inputs’, admissibility of the duty paid on gases as reflected in the invoice for all situations would be decided in accordance with the provisions of the CENVAT Credit Rules, 2004. That apart, on facts it is not in dispute that the supplier had paid the duty and the value of the gas which was supplied was also included in the assessable value.
Therefore, we find that the learned Tribunal was fully right in allowing the assessee’s appeal. Accordingly, the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
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2025 (5) TMI 1366
Entitlement to the CENVAT Credit - Free on Road (FOR) sale destination basis - inclusion of freight in the transaction value - refund claimed on the duty paid on the returned goods - Availing the benefit of Notification No. 56/2002-CE - claim of excess self-credit - Demand of tax along with interest and penalty - HELD THAT:- From the perusal of documents on record, it is clear that the appellant sold the goods on FOR basis and have included the value of freight in the assessable value which has been disputed by the department. Further, we find that this issue is no more res integra as the same has been settled by the Larger Bench of the Tribunal in the case of M/s Ramco Cements Limited [2023 (12) TMI 1332 - CESTAT CHENNAI-LB] as well as by the Hon’ble High Court of Himachal Pradesh in the case of M/s Inox Air Products Pvt Ltd. [2024 (4) TMI 32 - HIMACHAL PRADESH HIGH COURT], wherein the Hon’ble High Court, after considering various judgments of Hon’ble Supreme Court as well as the decision of Larger Bench of the Tribunal in M/s Ramco Cements Limited (supra)’s case, has held that when there is FOR sale and the assessable value includes freight charge also, in that situation, the assessee is entitled to the CENVAT Credit of service tax.
Thus, by following the ratios of the decisions cited supra, we are of the considered opinion that the impugned order is not sustainable in law; accordingly, we set aside the same and allow the appeals of the appellant.
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2025 (5) TMI 1365
CENVAT credit on capital goods used for job-work - non-submission of undertaking - benefit of Notification No.214/86-CE - allegation of diversion of raw materials/inputs namely “Housings” imported duty free - demand of interest and imposition of penalties on UKB and personal penalties on its Director - quantum of penalty under Section 114A of the Customs Act, 1962 - HELD THAT:- So far as the first issue regarding demand of CENVAT credit of Rs.36,13,490/- on capital goods is concerned, we find from the records that the demand has been confirmed on the ground that the capital goods were not used for manufacture of dutiable final product by UKB but were used by UKN for job-work for the principal manufacturer in terms of Notification No.214/86-CE dated 25.03.1986 and the principal manufacturer has failed to submit undertaking as required under the said notification.
In view of the dicta of law laid down by Hon’ble High Courts in Commissioner of Central Excise, Chennai-IV vs. Kyungshin Industrial Motherson Ltd.[2015 (11) TMI 899 - MADRAS HIGH COURT], we conclude that the goods manufactured on job- work basis and cleared by availing benefit of Notification No.214/86, as amended, are not exempted goods and therefore Rule 6(4) of the CENVAT Credit Rules, 2004 restricting CENVAT credit on capital goods is not applicable.
Non-submission of undertaking in terms of Notification No.214/86 by the principal manufacturer is concerned, We find that ER-1 return of the principal manufacturer was submitted before the adjudicating authority showing payment of duty on final product and the same has not been disputed in the impugned order. The finding in the impugned order that UKB has not put forth the evidences to show taxability of goods manufactured under job-work is therefore perverse and incorrect.
Even if we assume for a moment that benefit of Notification No.214/86, as amended, can be denied to UKB, on account of non-submission of undertaking by the principal manufacturer, then also in such a case, the revenue can demand duty on job-worked goods and cannot deny the CENVAT credit on capital goods. Having not demanded duty on job-worked goods, the revenue cannot deny CENVAT credit on capital goods and therefore we find that the demand of CENVAT credit of Rs.36,13,490/- along with appropriation of the amount of credit reversed by UKB cannot be sustained.
Demand of customs duty of Rs.49,60,092/- is concerned, In this regard, we have perused the letter dated 07.09.2011 issued by the Deputy Commissioner, Pune Commissionerate intimating the facts found during enquiry and statements of Shri Pankaj Bhardwaj. However, we fail to gather as to how the said letter or its enclosures point out diversion of “Housings” from UKB to its Pune unit.
We also find that a certificate dated 27.03.2018 issued by M/s East West Automation Technologies Pvt. Ltd. clarifying that the purchase order placed by UKB was for housings and terminals only and the same goods were supplied to UKB. Despite, this certificate on record before the adjudicating authority, neither any enquiry has been made from M/s East West Automation Technologies Pvt. Ltd. nor the contents of the certificate has been disputed by the adjudicating authority. In these facts, we cannot draw any adverse inference on the two invoices in question.
We also find that apart from the two invoices issued by UKB, there is absolutely no material on record to sustain the case of diversion of imported goods. Merely because UKB failed to give details of utilisation of imported “Housings” in beginning, the same could entail imposition of penalty under appropriate provision but the same cannot form the basis for alleging diversion of goods and demand of duty. Therefore, we conclude that the demand of customs duty of Rs.49,60,092/- cannot be upheld.
Accordingly, the duty liability is worked out to Rs.3,98,149/- only, by reducing the duty involved on these machines from the total duty liability of Rs.9,04,380/-. The appropriation of amount, over and above the said amount of Rs.3,98,149/- is also therefore set-aside.
So far as demand of duty of Rs.32,761/- is concerned, we fail to understand that when UKB paid certain amounts in excess, than why the said excess amount can be adjusted towards the short-paid amount of duty. The reasoning given in the impugned order is therefore not tenable.
So far as imposition of penalties on UKB and demand of interest is concerned, since removal of machineries may be prior to 08.04.2011 but determination of duty postulated under Section 114A was made only on 10.09.2020, that too under Section 28(2)/Section 28(10) and not under Section 28(8) and therefore, we find that UKB is not the person liable for penalty under Section 114A in respect of demand of duty of Rs.3,88,149/-. In so far as demand of personal penalties on director is concerned, since we have set-aside the majority of demand of duty, hence personal penalties on the director are also set-aside.
This takes us to the appeals filed by the revenue. The revenue has challenged the impugned order to the extent it imposes penalty equivalent to the amount of duty and not the amount equivalent to duty and interest, on the basis of Circular No.61/2002-Cus dated 20.09.2022.
The ground raised in the appeals filed by the revenue is squarely covered by the decision of the Tribunal in Commissioner of Customs, Noida v. Unnati Fortune Industries Pvt. Ltd.[2024 (1) TMI 532 - CESTAT ALLAHABAD] and therefore the appeals filed by revenue cannot succeed.
Thus, we partly allow the appeal filed by UKB by setting aside the entire demand of duty, interest and penalties except demand of Customs duty, CVD & Addl. Duty (Imports) of Rs.3,98,149/-. Since we are confirming demand of duty of Rs.3,98,149/- only, hence appropriation of amounts made in the impugned order, over and above of Rs.3,98,149/- is set-aside.
The appeal filed by Director of UKB is allowed in toto and the appeals filed by revenue are rejected.
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2025 (5) TMI 1364
Invocation of extended period of limitation - suppression of facts, knowingly and willfully - evasion on payment of duty - non-submission of price list - claiming wrong valuation and wrongly availing benefit of SSI exemption under the Notification No.8/2003-CE - classification of goods - failure to take registration and file monthly Returns - demand and recovery of duty along with interest, penalties - HELD THAT:- Now once the revenue was aware of the material facts regarding classification under tariff item 2106 9011 and also the claim under the exemption notification, we find that there was no suppression on the part of the Appellant as the Appellant disclosed the correct information. Merely because the goods classifiable under tariff item 2106 9011 were assessable under Section 4A and not under Section 4 will not make out a case of suppression, as the relevant facts were already in the knowledge of the revenue. Therefore no case of suppression with intent to evade duty is made out against the Appellant, which is in consonance with the law laid down in Pushpam Pharmaceuticals Co. vs. CCE [1995 (3) TMI 100 - SUPREME COURT].
So far as non-submission of price list is concerned, we find that price list is relevant for the purposes of valuation under Section 4A of the Act and once the Appellant was paying duty under Section 4A without there being any objection of the revenue, the question of submission of price list does not arise and consequently it cannot be a ground for invoking extended period. We also cannot approve the finding in paragraph 5.4 that it is already proved that the assessee had suppressed the facts as the adjudication order, prior to paragraph 5.4, nowhere deals with the issue of suppression.
The fact that during 2016-17, the Appellant cleared goods of more than Rs.4 crores also does not lead to suppression, when the Appellant had admittedly paid duty on turnover in excess of Rs.4 crores. The fact that the Appellant did not paid duty in 2017-18 by claiming SSI exemption also cannot be a ground for alleging suppression, when the said fact was already in the knowledge of the revenue and non-payment of duty was under the bona-fide belief that the Appellant is still entitled for SSI exemption. It is important to note here that mere non-payment of duty is not sufficient to sustain the charge of suppression, since for suppression, there must be intent to evade payment of duty, which is not there in the present case.
We further find that in the impugned order, the charge of suppression has been sustained on grounds, which were not there in the adjudication order. This is clearly impermissible in law, as the case of the revenue cannot be sustained on a ground which was not there in the adjudication order and therefore the impugned order, to this extent, is not sustainable in law.
Thus, the impugned order, to the extent challenged, is set-aside and the appeal is allowed with consequential relief, as per law.
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2025 (5) TMI 1363
Condonation of inordinate delay of 405 days - Levy of penalty u/s 86 of the Delhi Value Added Tax Act, 2004 - invocation of the Proviso placed in Section 34(1) - HELD THAT:- No case is made out to condone the delay of 405 days in filing the Special Leave Petition. The Special Leave Petition is accordingly dismissed on the ground of delay.
However, the question of law, if any, is kept open.
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2025 (5) TMI 1362
Seeking final opportunity to make the statutory deposit - Non-compliance with the pre-deposit condition - original order of assessment was vitiated by a violation of the principles of natural justice or lack of jurisdiction on the part of the assessing authority - HELD THAT:- In order to give a final opportunity to the appellant herein, he is permitted to make the statutory deposit on or before 10.03.2025 before the concerned Statutory Appellate Authority or Assessing Authority, as the case may be. If such deposit is made in accordance with law, the concerned Statutory Appellate Authority shall entertain and consider his appeal in accordance with law and as expeditiously as possible.
It is needless to observe that if the appellant does not make the requisite deposit on or before 10.03.2025, the statutory appeal would not be entertained or considered on merits.
This appeal is disposed of in the aforesaid terms.
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