TMI Tax Updates - e-Newsletter
May 1, 2024

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Articles

1. APPOINTMENT OF INDEPENDENT DIRECTOR OVER 75 YEARS OF AGE

   By: DR.MARIAPPAN GOVINDARAJAN

2. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

3. Section 115BBE is prospective held by the Supreme Court

   By: DEVKUMAR KOTHARI

4. A Guide for Types Of Leaves and Law policies for Employees in India

   By: Ishita Ramani

News

1. Combined Index of Eight Core Industries (ICI) increases by 5.2 per cent (provisional) in March, 2024 as compared to March, 2023

2. RBI releases Draft Master Direction – Reserve Bank of India (Electronic Trading Platforms) Directions, 2024

Notifications

GST - States

1. 1A/2024—State Tax (Rate) - dated 23-2-2024 - Maharashtra SGST

Seeks to amend Notification No 1/2017- State Tax (Rate) dated 29th June, 2017

2. 637-F.T. - dated 23-4-2024 - West Bengal SGST

Seeks to notify, w.e.f. 22.02.2024, “Public Tech Platform for Frictionless Credit" as the system with which information may be shared by the common portal based on consent.

Circulars / Instructions / Orders

Customs

1. PUBLIC NOTICE NO. 18 / 2024 - dated 25-4-2024

Queries raised on non applicability of drawback while processing the claims, certain instructions towards reduction of physical interface - Reg.

2. PUBLIC NOTICE NO. 15 / 2024 - dated 8-4-2024

Change in name of the CFS - From M/s. Continental Warehousing Corporation (Nhava Seva) Private Limited To M/s. DP World Multimodal Logistics Private Limited - Reg.

Highlights / Catch Notes

GST

• Retrospective GST Registration Cancellation Overturned Due to Procedural Flaws; Compliance Obligations Highlighted.

  Case-Laws - HC : Cancellation of GST registration of the petitioner with retrospective effect - Highlighting deficiencies in the show cause notice and the lack of reasons for the retrospective action, the High Court deemed the cancellation arbitrary and unjustified. Consequently, the court set aside the impugned order and the show cause notice, restoring the petitioner's GST registration. However, the petitioner was reminded of their compliance obligations under the relevant rules. Additionally, the court clarified that lawful steps for recovery, including retrospective cancellation, could be pursued by the respondents in the future, provided proper procedural safeguards are followed.
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Income Tax

• Tribunal Rules Wife's Savings Justify Cash Deposits in Joint Account During Demonetization, Overturns Lower Decision.

  Case-Laws - AT : Unexplained money u/s 69A - deposits in bank account during the demonetization period - joint bank account of husband wife - family settlement - The Appellate Tribunal noted that the appellant's wife had filed a settlement deed and affidavit confirming the source of the cash deposits, which were from her own savings. It observed that the appellant's wife had provided sufficient evidence to support the source of certain cash deposits. - The addition made by the lower authorities was deemed unsustainable, and thus, the same was directed to be deleted.
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• Tribunal Corrects Penalty Rate Error: AO Imposed Higher Misreporting Penalty Instead of 50% Under-reporting Rate.

  Case-Laws - AT : Penalty proceedings u/s 270A - Applicable rate of penalty - The Appellate Tribunal noted that while the penalty notice cited under-reporting of income, the AO imposed the penalty under the provision related to misreporting of income. The Tribunal found that the AO's action of invoking the higher penalty rate for misreporting was not justified. It was established that the penalty for under-reporting and misreporting of income carried different rates under Section 270A of the Act. Therefore, the Tribunal concluded that the penalty should have been restricted to the rate applicable for under-reporting of income, which is 50%.
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• Late E-filing Doesn't Disqualify Tax Exemption if Submitted Within Section 139 Timeline, Tribunal Affirms.

  Case-Laws - AT : Exemption u/s 11 - assessee has not e-filed or not filed return within due date - The NFAC/Ld.CIT(A) ruled in favor of the Assessee, stating that the CBDT circular clarified that even belatedly filed returns could be eligible for exemption under section 11, as long as filed within the time allowed under section 139. The Appellate Tribunal concurred with this decision, emphasizing the applicability of the circular and relevant case law, affirming the Assessee's eligibility for exemption under section 11.
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• Tribunal Removes Penalty for Alleged Mis-Reported Income, Finds Disclosure in Quantum Assessment Sufficient.

  Case-Laws - AT : Penalty u/s. 270A - Under-reporting of income / Mis-reporting - Interest income from income tax refunds - After reviewing the submissions and case materials, the Tribunal found that the interest income was indeed disclosed by the taxpayer during the quantum assessment and formed part of the computation submitted. Rejecting the Revenue's request for verification, the Tribunal emphasized that all relevant details were already part of the case file. Relying on legal precedent, the Tribunal concluded that there was no justification for the imposed penalty and proceeded to delete it.
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• Tribunal Rules in Favor of Exemption Eligibility for Interest Income from Cooperative Banks, Following Karnataka HC.

  Case-Laws - AT : Eligibility of exemption u/s 80P(2)(a)(i) or u/s 80P(2)(d) - interest income earned from cooperative banks - The Appellate Tribunal reviewed conflicting judicial opinions on the matter and referenced precedents from various High Courts. Ultimately, it aligned with decisions favoring the eligibility of such interest income for exemption, notably following the Karnataka High Court's interpretation. Consequently, the Tribunal directed the Assessing Officer to allow the exemption under the relevant sections of the Act, thereby ruling in favor of the appellant.
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• Tribunal Rules AOP Status Doesn't Affect Deduction Eligibility u/s 80P(2)(a)(i) of Income Tax Act.

  Case-Laws - AT : Deduction claimed u/s. 80P(2)(a)(i) - Status showing as AOP and not mentioned as cooperative society - The Tribunal referred to the definition of "person" under section 2(31) of the Income Tax Act. It noted that there was no separate status specified for cooperative societies. Since there was no specific status for cooperative societies, mentioning the status as AOP did not disqualify the assessee from claiming the deduction under section 80P(2)(a)(i). The Tribunal also cited a precedent where a similar issue was addressed by a co-ordinate bench, which allowed the deduction for a cooperative society even though the status mentioned was AOP. - AO directed to allow the deduction as claimed under section 80P(2)(a)(i) of the Income Tax Act.
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• Tribunal Upholds 2016-17 Tax Year for LTCG, Orders Recalibration of Building's 1981 Fair Market Value, Rejects Cost Claims.

  Case-Laws - AT : LTCG - year of assessment - The Tribunal noted discrepancies in the year of taxability claims, stating that the original Joint Development Agreement (JDA) underwent substantial modification, which affected the final assessment year. Since the assessee offered the gains for tax in AY 2016-17, the Tribunal found no grounds to shift the taxability year to AY 2013-14 or AY 2015-16. - Regarding the computation of LTCG, the ITAT upheld the assessing officer’s decision to consider only the proportionate cost of land transferred and noted that the assessee could not substantiate the claimed costs of the building constructed in 1983-84. The Tribunal directed a recalibration of the fair market value of the building as of 01-04-1981, rejecting the depreciation applied by the assessing officer.
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• Tribunal Rules State Law Governs Taxation on Land Acquisition Gains, No Tax Exemption Under Federal Land Act.

  Case-Laws - AT : Taxation on gains arising out of compulsory acquisitions - Admission of Additional Grounds - the Appellate Tribunal analyzed the legislative timeline and relevant provisions, particularly focusing on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) and its applicability to state land acquisition acts. They concluded that the compensation received by the assessee fell under a state act and not under RFCTLARR Act. Therefore, the benefit of exemption from taxation could not be extended to the assessee. - The Appellate Tribunal admitted the additional grounds raised by the appellant, considering them as legal grounds not requiring appreciation of new facts. They acknowledged that these grounds were fundamental to the assessment and proceeded to address them first.
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• ITAT Upholds Tax on Excess Stock as Business Income, Dismisses Revision u/s 263 in Survey Case.

  Case-Laws - AT : Revision u/s 263 - Additions u/s 69 r.w.s. 115BBE - excess stock found during the course of survey as admitted to be the undisclosed business income of the assessee, by the main partner in the assessee firm - The ITAT found that since the department did not find other sources of income during the survey, it was reasonable to treat the excess stock as business income. Therefore, the AO's decision was not erroneous, and the invocation of revision powers under Section 263 - The Tribunal observed that the excess stock was not separately identifiable and was part of a mixed lot found during the survey. Considering precedents and the nature of the excess stock, it was deemed to be the business income of the assessee. Therefore, the AO's decision to tax it as business income was upheld.
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Customs

• Customs House Agent Penalized for Fraudulent Shipping Bills and Drawback Claims; Tribunal Imposes Strict Penalties.

  Case-Laws - AT : Imposition of penalties u/s 114 (iii) and 114A on employees / manager of CHA - benami shipping bills - The Tribunal found that the appellant knowingly filed benami shipping bills with mis-declared information, facilitating fraudulent claims of drawback. This act rendered the goods liable for confiscation. Despite the appellant's assertion of innocence, the Tribunal held that he failed to exercise due diligence expected of a CHA manager. Filing shipping bills without verifying the authenticity of the exporter's documents amounted to complicity in the fraudulent scheme.
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• License Revocation Overturned: Customs Broker Met Obligations, Faced Procedural Unfairness Due to Withheld Defense Documents.

  Case-Laws - AT : Revocation of the Customs Brokers’ licence - non-existent entities ​​​​​​​- The Tribunal examined the scope of obligations under Regulation 10(n) and concluded that the Customs Broker's responsibility is not to ensure the correctness of actions by government officers but to verify the authenticity of documents provided by clients. It was established that the appellant fulfilled the obligations of Regulation 10(n) by providing authentic documents, thus not violating the regulation. - Further, the Tribunal found that the documents crucial for the defense were not provided to the appellant, violating principles of natural justice. Consequently, the impugned order was set aside on this ground alone.
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• Appellate Tribunal Corrects Typo, Rules in Favor of Appellant on iRET Import Duty Based on Actual Specifications.

  Case-Laws - AT : Import of Internal Remote Electrical Tilt Switches (iRET) - benefit of Exemption notification - Whether the amperage of the iRETs imported by the appellant were of 5 Amps as declared in the Bills of Entry or were of less than 5 Amps as now asserted by the appellant relying on the aforesaid documents - The Appellate Tribunal found in favor of the appellant, accepting the evidence presented to establish that the imported iRETs were actually of less than 5 amperes. The Tribunal highlighted a typographical error in the documentation and emphasized that duties should be charged based on the actual specifications of the imported goods. Consequently, the impugned order was set aside.
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• Tribunal Upholds Confiscation and Penalties for Smuggling Cigarettes Hidden in HDPE Granules; Validates DRI's Authority.

  Case-Laws - AT : Smuggling - Prohibited goods - confiscation of cigarettes containers concealed in HDPE granules - Penalty u/s 112 (a) &(b) and 114AA - The Appellate Tribunal upheld the decision of the Principal Commissioner to confiscate smuggled cigarettes and impose penalties on the appellants. The Tribunal found their involvement in smuggling and false declarations established, justifying the penalties imposed under relevant sections of the Customs Act, 1962. The Tribunal also clarified the competency of DRI to issue the Show Cause Notice u/s 124.
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• Tribunal Reinstates Customs Broker License, Emphasizes Document Verification Over Physical Inspections for Compliance.

  Case-Laws - AT : Revocation of Customs Brokers’ licence - Non-existent exporters have also been filing GST returns with the department - The tribunal clarified that the Customs Broker's responsibility was to ensure the authenticity of documents like IEC and GSTIN, not to verify the correctness of actions by government officers issuing these documents. The tribunal stressed that the Customs Broker can fulfill their obligations by verifying documents, data, or information, and physical verification of clients' premises was not mandated. Consequently, the tribunal ruled in favor of the appellant, setting aside the impugned order and providing relief.
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• Tribunal Upholds Right to Convert Shipping Bills for Duty Drawback Despite CBEC Circular Restrictions.

  Case-Laws - AT : Rejection of request of the appellant for conversion of free shipping bills to drawback shipping bills - Section 149 of the Customs Act, 1962 - The Tribunal affirmed that the appellant was eligible for duty drawback under the notification for exporting petroleum products. The Tribunal reiterated its previous direction to allow conversion under Section 149, independent of CBEC Circular dated 16.01.2004. Emphasized that the proper officer's power under Section 149 cannot be curtailed by a circular. The Tribunal found the denial by the adjudicating authority legally unsustainable and allowed the appeal, granting the conversion.
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• Tribunal Overturns Seizure of Truck with Plastic Scrap, Orders Release After Evidence Confirms Legal Procurement.

  Case-Laws - AT : Seizure of plastic granules - Valuation - Confiscation of the vehicle - Interception and seizure of a truck carrying plastic scrap and granules allegedly of Nepalese origin. - The tribunal found sufficient evidence, including the Bill of Entry and confirmation by the Assistant Commissioner, to support the appellant's claim of legal procurement. The confiscation order and redemption fine imposed on the seized scrap were set aside, and the revenue was directed to release the goods to the appellant.
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Indian Laws

• Supreme Court Upholds EVMs, Rejects Return to Paper Ballots and 100% VVPAT Slip Counting Proposal.

  Case-Laws - SC : Integrity of the electoral process - suspicion of infringement of a right - The appellants argued for the reintroduction of paper ballots, provision of VVPAT slips to voters, and mandatory 100% counting of VVPAT slips to ensure transparency and voter confidence. - The Supreme Court upheld the current use of EVMs and VVPAT systems, rejecting calls for returning to paper ballots or increasing VVPAT slip verification. It emphasized the need for balance between electoral transparency and practicality, acknowledging the ECI’s efforts to maintain election integrity.
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• Legal Heirs Can Continue Injunction Suit Post-Plaintiff's Death by Establishing Legitimate Property Claim.

  Case-Laws - HC : The original appellant (now deceased) was represented by her son as her legal representative. The suit initially sought a permanent prohibitory injunction regarding a property, asserting her exclusive ownership and possession against the defendants, who are other family members. - Upon the death of the original appellant, her son sought to substitute himself as the appellant, claiming inheritance rights. - The Court noted the difference in scenarios where the plaintiff versus the defendant dies. While an injunction becomes moot if a defendant dies (since it cannot bind the heirs unless explicitly directed), the same does not apply when a plaintiff dies. - The High Court held that the cause of action for an injunction does not necessarily die with the plaintiff. If the legal heirs can establish a legitimate claim to the property, they may continue to seek injunctions to protect their possession.
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IBC

• Tribunal Upholds Resolution Plan with Nil Payment to Creditors, Affirms CoC's Commercial Wisdom Under IBC.

  Case-Laws - AT : CIRP - Validity of resolution plan - Nil Payment to Operational Creditors - waterfall mechanism - The Appellate Tribunal acknowledged the appellants' contention that fairness and equity should be ensured in the distribution of funds, including payment to operational creditors. However, it held that since the liquidation value of the corporate debtor was NIL, and the amount distributed to the corporate debtor under the resolution plan would also be NIL, the plan did not violate Section 30(2)(b) of the IBC. The Tribunal upheld the commercial wisdom of the CoC in approving the resolution plan. It cited established legal precedents that the CoC's decision is beyond judicial review, especially when it does not contravene any provisions of the law. The Tribunal found no error in the impugned order and dismissed the appeal.
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Central Excise

• Tribunal Rules: Goods for Captive Use Valued by CAS-4, Invalidates Late Show-Cause Notice, Stresses Legal Compliance.

  Case-Laws - AT : Method of valuation - Revenue neutrality - Extended period of limitation - goods transferred to another unit for captive consumption - to be valued in accordance with Rule 8 of the Valuation Rules or under Rule 4 - the tribunal upheld the appellant's argument that the valuation should be done in accordance with CAS-4, as mandated by relevant circulars and legal precedents. The tribunal also found in favor of the appellant on the issue of limitation, ruling that the show-cause notice issued beyond the normal limitation period was barred.
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• Refund of Excess Duty Hinges on Gazette Publication Date, Tribunal Rules in Favor of Appellant's Refund Claim.

  Case-Laws - AT : Refund of excess duty paid under protest - date on which notification came into effect. - The Tribunal referred to Section 5A of the Central Excise Act, which stipulates that a notification comes into force upon publication in the official gazette and offering for sale on the date of its issue. It cited precedents and held that the notifications were effective only from their publication dates, not from the issue dates. The Tribunal upheld the appellant's argument, emphasizing that the notifications were not effective on the specified dates due to non-publication.
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Case Laws:

• GST

• 2024 (4) TMI 1123
  Cancellation of GST registration of the petitioner with retrospective effect - SCN does not give any reasons for cancellation - Violation of principles of natural justice - HELD THAT:- The Show Cause Notice and the impugned order are bereft of any details. Accordingly, the same cannot be sustained. Neither the Show Cause Notice, nor the order spell out the reasons for retrospective cancellation. In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. The registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the taxpayer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent s contention in this regard is correct, it would follow that the proper officer is also required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. The impugned order and SCN cannot be sustained and are accordingly set aside - GST registration of the petitioner is restored - petition allowed.

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• Income Tax

• 2024 (4) TMI 1122
  Reopening of assessment - validity of order passed u/s 148A(d) - Second round of litigation - non independent application of AO s mind to the information furnished by the DDIT - As decided by HC [ 2023 (2) TMI 1119 - CALCUTTA HIGH COURT] only conclusion that can be arrived at is to hold that the reopening of the assessment was bad as it was based on certain alleged potential cash borrowings and certain alleged possible financial transactions - AO did not independently apply its mind to the information furnished by the DDIT which he is required to do while exercising the power to reopen an assessment - entire reopening proceedings commencing from issuance of the notice u/s 148A(b) and culminating in the order u/s 148A(d) is a clear abuse of the process of law. HELD THAT:- There is a gross delay of 399 days in filing this special leave petition. The explanation given for condonation of the delay is not satisfactory or sufficient in law to condone the same. Hence, the application seeking condonation of delay is dismissed. Special leave petition also stands dismissed.

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• 2024 (4) TMI 1121
  Legality of revision of order of Tribunal u/s 254 on ground of retrospective overruling - Penalty imposed u/s 271(1) if returned income is a loss - Revenue contended that order of Tribunal had been based entirely on the decision of the Supreme Court decision and the latter decision had been subsequently overruled by a larger Bench of the Supreme Court, thus there was a mistake apparent on the face of the record - As decided by HC [ 2012 (6) TMI 39 - DELHI HIGH COURT] decision larger Bench of the Supreme Court has to be regarded as the law as it existed when the order was passed by Tribunal, there is a clear mistake apparent from the record. Only limitation for correcting the mistake is that imposed by the provisions of Section 254(2) itself and that is only with respect to time. HELD THAT:- In continuation of the order M/S. LAKSHMI SUGAR MILLS CO. LTD. ANR. VERSUS COMMR. OF I.T. CIRCLE 4 (1) ANR. [ 2024 (4) TMI 1083 - SC ORDER] it is fairly stated by petitioners that the order DCIT, CIRCLE 4 (1) , NEW DELHI VERSUS M/S. LAKSHMI SUGAR MILLS CO. LTD. [ 2009 (4) TMI 1064 - ITAT DELHI ] passed by Tribunal has not been challenged by the petitioners as it was not in their knowledge as the same was an ex-parte order, the petitioners will join the proceedings, and that they may be permitted to raise all the contentions before the Prescribed Authority. Special Leave Petition is disposed of with liberty to the petitioners to raise all the legal and factual contentions before the Prescribed Authority to whom the matter has been remitted by the Tribunal.

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• 2024 (4) TMI 1120
  Nature of expenses - re-characterizing revenue expenses incurred by as capital expenditure by AO - correct approach in law and on the facts adopted or not? - as per AO assessee had made no effort to earn income - as per ITAT AO s approach, was that the respondent/assessee was not earning revenue, was completely misdirected - as per HC [ 2023 (10) TMI 329 - DELHI HIGH COURT] proposition put forth by the AO that since there is no income chargeable under Section 28 of the Act, therefore, no expenses could be claimed by an assessee under Sections 30 to 37 of the Act, in our view, is completely unsustainable. HELD THAT:- There is a delay of 106 days in preferring the present special leave petition. Even on merits, however, we are not inclined to interfere with the impugned judgment as it is accepted that business had commenced. Hence, the special leave petition is dismissed.

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• 2024 (4) TMI 1119
  Validity of reopening of assessment - period of limitation - date of notice or date of dispatch which is required to be looked into - As decided by HC [ 2023 (11) TMI 1255 - RAJASTHAN HIGH COURT] in the absence of there being any factual foundation, the argument on issue of the limitation, does not have any substance - HELD THAT:- We are not inclined to interfere in the matter. The special leave petition is hence, dismissed. Pending applications, if any, shall also stand disposed of.

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• 2024 (4) TMI 1118
  Credit for foreign tax paid - denial of claim as form No.67 was not filed within the due date for filing of the return of income as specified u/s 139(1) - Directory v/s mandatory provisions - appellant had salary income from USA as well as India - HELD THAT:- Admittedly, in the present case, Form No.67 was not filed within the due date for filing of the return of income under the provisions of section 139(1), but Form No.67 was filed on 26.03.2021. The CPC, Bangalore had processed the return of income on 06.08.2021 which means that Form No.67 was very much available with the CPC, Bangalore. CPC, Bangalore cannot deny the claim for credit for foreign tax paid merely because Form No.67 was not filed within the due date specified for filing the return of income under the provisions of section 139(1) of the Act, as it is merely a directory. Therefore, we direct the CPC, Bangalore to amend the Intimation u/s 143(1) of the Act for taking into consideration the Form No.67 filed by the appellant. Accordingly, the ground of appeal filed by the assessee stands partly allowed.

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• 2024 (4) TMI 1117
  Estimation of income - bogus purchases - receipt of the information that the assessee is a beneficiary of accommodation entries of bogus purchases from entities controlled by an accommodation entry provider - HELD THAT:- As we find that in assessee s own case for assessment year 2012-13 [ 2024 (3) TMI 1012 - ITAT MUMBAI ] coordinate bench has restricted the addition to the extent of 5%, therefore, unless there is an application for recall of that order, we are duty-bound to state that 5% of the bogus purchases are already determined as income of the assessee. Decided against revenue

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• 2024 (4) TMI 1116
  Unexplained money u/s 69A - deposits in bank account during the demonetization period - joint bank account of husband wife - Family settlement - assessee and his wife both are Senior Citizen, Retired Govt. Employee and pensioner and filed the cash flow statements of last five years - HELD THAT:- Assessee has filed the day wise cash withdrawals and deposits. The lower authorities have only doubted the cash flow statements but could not disproved with any contrary evidences about the withdrawal of cash and its source. The assessee has also filed a family settlement of her wife family, where she got Rs. 3,61,000/- which is also available with the assessee and the lower authorities has discarded or disbelieved without examining and without bringing any adverse evidence. The assessee has also filed the affidavit of his wife, wherein she clearly stated that the bank accounts were jointly owned and she had deposited the cash of Rs. 15,59,000/- in these bank accounts, this affidavit has also been remained uncontroverted. It is settled law that the contents of an affidavit should be read correct and full unless not controverted Considering the reconciliation and cash flow statement filed by the assessee along with family settlement deed and affidavit of assessee s wife, wherein she owned responded of having deposited of cash out of her owned source and saving., Therefore, without controverting the fact stated of affidavit by the wife of the assessee, the addition made by the lower authorities even for an amount of Rs. 12,87,100/-is also not sustainable in the hands of the assessee and therefore, the same is directed to be deleted. Ground raised by the assessee is allowed.

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• 2024 (4) TMI 1115
  Penalty proceedings u/s 270A - Applicable rate of penalty - underreporting of income or misreporting the income - substantial difference in the rate of penalty for under-reporting and misreporting of income - contention of the assessee is that the AO has throughout in the notice for imposing the penalty stated about under-reporting of income and also in the impugned order, but while imposing penalty, he invoked the provision related to the misreporting of income - HELD THAT:- The assessee was called upon to explain about under-reporting of income. But while imposing the penalty u/s 270A of the Act, the AO imposed penalty @ 200% which falls under clause (8) of section 270A of the Act. The Co-ordinate Bench of the Tribunal in the case of Alrameez Construction (P.) Ltd. [ 2023 (8) TMI 371 - ITAT MUMBAI] held that no penalty can be imposed in this case, as there is no misreporting is there by assessee for the purposes of section 270A. Even addition u/s. 43CA was not sustainable in view of Jai balaji Business Corporation (P.) Ltd. [ 2023 (2) TMI 421 - ITAT PUNE] - But as assessee before us is for penalty issue only and matter of quantum issue is not before us that are of no use to assessee in present appeal. In the result grounds of appeal raised by assessee is allowed. Therefore AO ought to have restricted the penalty to the extent of 50% which is leviable for under-reporting of the income. Since it is the case of the AO that the assessee had under reported his income and AO nowhere states that clause (8) of section 270A of the Act is applicable. Appeal of the assessee is partly allowed.

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• 2024 (4) TMI 1114
  Exemption u/s 11 - The NFAC/Ld.CIT(A) allowed the deduction - assessee has not e-filed or not filed return within due date - asssessee s return of income filed after due date u/s 139(1) BUT filed its Form 10B within due date of filing of such audit report - HELD THAT:- There is no dispute about filing of Form-10AB, which is filed with the time prescribed. The objection of Assessing Officer objected only on filing return of income after due date of filing return of income prescribed under section 139(1). We find that in Case Tulsidas Gopalji Charitable and Chaleshwar Temple Trust [ 1993 (9) TMI 75 - BOMBAY HIGH COURT] held that on a careful reading of the provisions of sub-sections (1) and (4) of Section 139 lead to an inevitable conclusion that a return made within the time specified in sub-section (4) has to be considered as having been made within the time prescribed in sub-section (1) or subsection (2) of Section 139. We further find that CBDT in its Circular No.6/2020 dated 19.02.2020 and Circular No.173/193/2019-ITA-I dated 23.04.2019 clarified that for availing benefit of Section 11, the registered under section 12A shall file its return of income within time allowed under section 139. NFAC/Ld.CIT(A) specifically held that Section 139 includes belated return under section 139(4) and CBDT has directed that demand raised on this issue are to be rectified. We find that ld CIT(A) by following the mandates of aforesaid circulars allowed relief to the assessee. on independent examination of facts of the case, we do not find any infirmity in the order of ld CIT(A), which we affirm. Appeal of the Revenue is dismissed.

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• 2024 (4) TMI 1113
  Penalty u/s. 270A - Under-reporting of income / Mis-reporting - taxpayer herein has been found not to have disclosed it s interest income/ interest on income tax refunds during the course of quantum assessment - HELD THAT:- We find from the assessee s corresponding audited books [including P L A/c] read with details of indirect incomes as well as the ledger(s) that it had duly included the foregoing interest in the indirect income head duly forming part of the computation submitted in quantum proceedings. Revenue at this stage vehemently argued that the lower authorities may be directed to verify this alleged clinching fact. No reason to accept the Revenue s remand prayer once it is found that all these assessee s details duly form part of the case file all along right from the course of assessment to the impugned penalty proceedings. Also in Reliance Petro Products [ 2010 (3) TMI 80 - SUPREME COURT ] that quantum and penalty are parallel proceedings wherein any addition made in the course of former does not ipso facto attract latter provision. We accordingly find it a fit case to delete the impugned penalty in very terms. Assessee s appeal is allowed.

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• 2024 (4) TMI 1112
  Eligibility of exemption u/s 80P(2)(a)(i) or u/s 80P(2)(d) - interest income earned from cooperative banks - cleavage of judicial opinion among several High Courts on the issue of eligibility - HELD THAT:- Referring to various contradictory judgments as following the case of Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit [ 2018 (12) TMI 1926 - ITAT PUNE] taken view in favour of the assessee following the judgment of Tumkur Merchants Souharda Credit Cooperative Ltd [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] .the interest income earned on fixed deposits with cooperative bank/scheduled bank partakes character of the business income, which is eligible for deduction u/s 80P(2)(a)(i) of the Act. Therefore, direct the Assessing Officer to allow the exemption u/s. 80P(2)(a)(i) and section 80P(2)(d) of the Act. Decided in favour of assessee.

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• 2024 (4) TMI 1111
  Deduction claimed u/s. 80P(2)(a)(i) - claim denied in the intimation u/s. 143(1) stating that the same was not correctly made in the ITR filed - HELD THAT:- Considering the object of the society being lending money to its member the deduction is correctly claimed by the assessee in his return of income filed and so the reasons advanced by the revenue on this part has no force and are purely based on surmises and conjecture. Status showing as AOP and not mentioned as cooperative society - As we have gone through the definition of person given in section 2(31) of the Act wherein there is no separate status for co-operative society to mentioned and therefore, the mentioned of the status as AOP also does not disqualify the assessee to claim the deduction. Therefore, denial of the deduction on that second reasons is also not correct. We get the support of our view from the decision of Shree Datta Prasad Sahakari Patsanstha Ltd [ 2021 (9) TMI 419 - ITAT MUMBAI] wherein the bench has dealt the similar issue and allowed the deduction even though the same was not claimed by the assessee in that return of income filed in that case. Whereas, the bench has noted that in this case the assessee has claimed the deduction and therefore, merely without specifying how the claim of the assessee is not correctly claimed and the same cannot be denied in the intimation u/s. 143(1) of the Act. In the light of these set of facts the ld. AO is directed to allow the claim of the assessee as claimed in the ITR u/s. 80P(2)(a)(i) - Appeal of the assessee is allowed.

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• 2024 (4) TMI 1110
  LTCG - year of assessment - deduction u/s 54 - assessee submitted that out of 10 flats allotted to the assessee, two flats were combined into one contiguous unit - AO faulted the working of the assessee on the ground that entire costs attributable to all the flats allotted to the assessee were considered by the assessee towards the cost of the new asset meant for deduction u/s 54 - additional evidences submitted HELD THAT:- Assessee himself has offered gains for the first time in this year only. In fact, the gains have been offered in this year only and not in any other year. Nothing has been shown to us that these gains have ever been offered either in AY 2013-14 or in AY 2015-16 or in any other year. The assessee cannot take contrary stands. At the fag-end of assessment proceedings, the assessee filed a letter stating that the gains would not be chargeable in this year but the same would be chargeable either in the year of entering into joint venture agreement and during the year when the possession of the new flats was given by the builder to the assessee. However, it is nowhere been shown to us that the assessee himself has acted on these arguments and offered capital gains in any other assessment years. The assessee is only making contrary stand. Accepting the same would mean that the revenue would never be able to tax the impugned capital gains which could not be permitted. Therefore, we are unable to accept these arguments. Secondly, it is crystal clear that the case was selected for limited scrutiny to examine the issue of deduction claimed by the assessee under the head capital gains as offered by the assessee in the return of income. The year of taxability was not within the scope of limited scrutiny and the aforesaid question could not have been even gone into by Ld. AO. All these arguments as well as additional evidences as urged by Ld. AR could not find our acceptance and hence, rejected. The Ld. CIT(A), in our considered opinion, has clinched the issue in correct perspective. Computation of cost of land - As we find that the assessee has parted with only a part of the land. Therefore, he is not correct in considering entire cost of land while computing the gains. Only proportionate cost could be allowed to the assessee. We confirm the stand of Ld.AO to that extent. FMV determination - Cost of building - AO has computed Fair Market Value (FMV) of the building as on 01-04-1981 by applying PWD rates and arrived at cost of building as Rs. 16.67 Lacs. Considering the plea of the assessee that building was made of superior construction, Ld. AO adopted cost of building as on 01-04-1981 to be Rs. 20 Lacs. Since the building was 16 years old as on 01-04-1981, taking the life of building to be 80 years and salvage value of 10%, Ld. AO depreciated the cost and revised the cost of building as on 01-04-1981 to Rs. 16.40 Lacs. We substantially concur with all these findings of Ld. AO except for the fact that when FMV of the building has been considered as on 01-04-1981, there is no further requirement to depreciate the same. Therefore, we direct Ld. AO to adopt FMV of the building as on 01-04-1981 as Rs. 20 Lacs and re-compute the gains. Deduction u/s 54 assessee has attributed cash outflow, service tax component and alteration cost of all the flats to two flats (which has been joined together) against which this deduction has been claimed.The same is not correct methodology. The working made by Ld. AO, could not be faulted with. We concur with the same. Consequently, ground Nos. I to K stand dismissed except to the extent that FMV of the building as on 01-04-1981 would be taken as Rs. 20 Lacs. The Ld. AO is directed to re-compute the gains.

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• 2024 (4) TMI 1109
  Taxation on gains arising out of compulsory acquisitions - Admission of Additional Grounds - LTCG in respect of property acquired under the land acquisition act - land was compulsorily acquired for Highways projects by The Land Acquisition Officer and District Revenue Officer, Tirupur - application of provisions of RFCTLARR Act - Effect of ACT s operation as ceased DR stated that the award has been given u/s 34/2002 of Tamil Nadu Highways Act, 2001 and not u/s 96 of RFCTLARR Act, 2013 and therefore the assessee is not entitled for exemption - HELD THAT:- Upon perusal of award document as placed it could be seen that the compensation has been awarded by competent authority to the eligible persons on 27.11.2013 u/s 34/2002 of Tamil Nadu Highways Act, 2001 and the award has been received by the assessee on 02.12.2013. RCTLARR, Act, 2013 has been notified only with effect from 01.01.2014. The provisions of Sec. 96 of this Act provide that no income tax or stamp duty shall be levied on any award or agreement made under this Act. Subsequently, the Tamilnadu Government had amended the RFCTLARR Act, 2013 by inserting Sec. 105A vide RFCTLARR (Tamilnadu Amendment Act), Act, 2015 which placed these State land acquisition acts in a newly created fifth schedule on par with the Central Enactment, which are listed in the fourth schedule and have been exempted from the purview of RFCTLARR Act, 2013 except with respect to compensation, rehabilitation and resettlement Tamilnadu State Assembly has enacted Tamilnadu Land Acquisition Law (Revival of Operation, Amendment and Validation) Act, 2019 on 15.12.2019 in order to revive the operation of the Tamil Nadu Highways Act, 2001 which had ceased with effect from 27.09.2013 to exist due to enactment of RFCTLARR Act, 2013 as they were guided by Land Acquisition Act, 1894. As per Sec. 1(2) of TNLAL (ROAV) Act, 2019, aforementioned act has been given retrospective effect from 26.09.2013. As per Sec. 10 of TNLAL (ROAV) Act, 2019, compensation needs to be determined by the RFCTLARR Act, 2013 when the land is acquired under the Tamil Nadu Highways Act, 2001. RCTLARR, Act, 2013 has been notified only with effect from 01.01.2014. The provisions of Sec. 96 of this Act provide that no income tax or stamp duty shall be levied on any award or agreement made under this Act. Subsequently, the Tamilnadu Government had amended the RFCTLARR Act, 2013 by inserting Sec. 105A vide RFCTLARR (Tamilnadu Amendment Act), Act, 2015 which placed these State land acquisition acts in a newly created fifth schedule on par with the Central Enactment, which are listed in the fourth schedule and have been exempted from the purview of RFCTLARR Act, 2013 except with respect to compensation, rehabilitation and resettlement. Only provisions relating to compensation, rehabilitation and resettlement has been made applicable to the State Act and therefore, the provisions of Sec. 10 have limited applicability. The provisions of Sec. 11 specifically exclude the application of provisions of RFCTLARR Act. Undisputedly, the compensation has been received by the assessee is under a state act and not under RFCTLARR Act. Nothing has been shown that the benefit of RFCTLARR Act has ever been extended to the State Government by any notification, directly or impliedly. As held in the case of Jagdish Arora vs. ITO [ 2021 (6) TMI 459 - ITAT AGRA] the exemption is required to be specifically granted by the statute and it cannot be inferred to be drawn. As the date of award of compensation as well as date of compensation received by the assessee fall before 01.01.2014 i.e., the date on which RFCTLARR Act came into effect. Therefore, no such benefit as averred by Ld. AR could be granted to the assessee. Accordingly, the additional grounds as urged by Ld. AR stand dismissed. Disallowance of excess indexed cost of acquisition claimed by the appellant - We concur with the stand of Ld. AO that the assessee could not adopt 50C value in place of actual cost of acquisition. Similarly, the provisions of Sec. 43CA or Sec. 56(2)(viib) do not render any aid to the case of the assessee to compute cost of acquisition. So far as the cost of improvement is concerned, we find that the same has been denied to the assessee since the assessee could not conclusively establish the same. The work order as well as work bill was deficient, though the payment was through banking channels and due TDS was deducted. Therefore, we deem it fit to restore the issue of cost of improvement to the file of Ld. AO with a direction to the assessee to substantiate its claim. The grounds, on merits, stand partly allowed.

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• 2024 (4) TMI 1108
  Revision u/s 263 - Additions u/s 69 r.w.s. 115BBE - excess stock found during the course of survey as admitted to be the undisclosed business income of the assessee, by the main partner in the assessee firm - AO considering the undisclosed excess stock treated as the business income of the assessee - HELD THAT:- It is not the case of the Department that certain cash / jewellery / other income etc. was found which could be attributed as the business income of the assessee. As per the report by the survey team, the excess stock was a mixed stock and was not separately and clearly identifiable. Therefore, in our considered view, the said undisclosed excess stock should normally presumed to be the business income of the assessee only. In the case of Veer Enterprises [ 2024 (1) TMI 1271 - ITAT CHANDIGARH] ITAT held that where during course of survey, assessee surrendered excess stock, cash and receivables and offered same to tax as business income, however, AO treated said surrendered amount as unexplained investment under Sections 69A and 69B, since it emerged that source of income of assessee was from its business operations, income surrendered by assessee during survey could not be brought to tax under deeming provisions of Sections 69A and 69B of the Act. In the case of Baljinder Kumar. [ 2023 (8) TMI 289 - ITAT CHANDIGARH] ITAT held that where there are unrecorded sales made by assessee during current financial year and receivables arising out of such unrecorded sales had been offered to tax as additional business income by assessee, such amount could not be brought to tax under Section 69 of the Act. In the case of Parmod Singla 2023 (8) TMI 525 - ITAT CHANDIGARH] ITAT held that mere fact that survey/search proceedings have been initiated at business premises of assessee does not mandate Assessing officer to automatically invoke deeming provisions of Sections 69 and 69A; said provisions can be invoked only where explanation offered by assessee is not found satisfactory; where from explanation offered by assessee it clearly emerged that source of income offered during survey was from his business operations, such income could not be taxed under Sections 69 and 69A of the Act. Accordingly, as per facts of the assessee s case, wherein clearly it has been found that excess business stock was found from the premises of the assessee, in our considered view, the order passed by the Assessing Officer considering the undisclosed excess stock as the business income of the assessee, is not erroneous and prejudicial to the interest of the Revenue. Appeal of the assessee is allowed.

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• Customs

• 2024 (4) TMI 1107
  Sustainability of supplementary Show Cause Notice, prior to insertion of second proviso to Section 124 of the Customs Act, 1962 w.e.f 29.03.2018 - effect to the second proviso to Section 124 of the Customs Act, 1962 which is effective from 29.03.2018 - retrospective or prospective effect? - High Court held that the supplementary show cause notice, although termed as the supplementary, is actually an independent show cause notice even though it relates with the case of smuggling which is also a subject matter of the first show cause notice dated 26.08.2016 - HELD THAT:- We dispose of this special leave petition reserving liberty to the petitioner to raise all contentions with regard to the show cause notice issued by the respondent-department which the High Court has termed as an independent show cause notice in accordance with law.

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• 2024 (4) TMI 1106
  Maintainability of Appeal before CESTAT - Baggage Rules - Interpretation of statute - Smuggling - seizure of foreign currency - legislative edicts manifested in first proviso to section 129A of Customs Act - misreading of the terms goods and baggage defined in the Customs Act, 1962, to arrogate the jurisdiction - proper interpretation to the expression beneficial owner defined in section 2(3A) of the Customs Act, 1962 - High Court held that Once the respondent themselves had asserted that the goods in question were liable to be confiscated in terms of Section 113(d), the objection taken to the maintainability of the appeal would not sustain - HELD THAT:- We are not inclined to interfere in the matter. The Special Leave Petition is hence dismissed. However, any question of law that may arise in this case is kept open. Pending application(s), if any, shall stand disposed of.

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• 2024 (4) TMI 1105
  Classification of imported goods - import of furnace oil from UAE - to be classified under CTH 27101950 (furnace oil) as declared by the appellant or under CTH 27109900 (waste oil) as alleged by the revenue? - Tribunal held that Since the test report of CRCL Vadodara/Delhi cannot be accepted the declaration made by the appellant in respect of nature of goods, classification and also valuation are found to be absolutely correct - HELD THAT:- We are not inclined to interfere in the matter. The civil appeal is hence dismissed.

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• 2024 (4) TMI 1104
  Review Petition - Condonation of delay of 243 days in filing this appeal - Benefit of exemption from duty - 12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others - SMPS is not a part of IFWT - Supreme Court held that the delay is condoned - HELD THAT:- Having carefully gone through the Review Petition, the order under challenge and the papers annexed therewith, we are satisfied that there is no error apparent on the face of the record or any merit in the Review Petition, warranting reconsideration of the order impugned. The Review Petition is, accordingly, dismissed.

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• 2024 (4) TMI 1103
  Imposition of penalties u/s 114 (iii) and 114A on employees / manager of CHA - benami shipping bills - mis-declaration of the description quantity and value of export consignments in order to avail ineligible drawback - HELD THAT:- The appellant s submission that he was not aware that the IEC holder was only dummy and Shri Ashok Sharma was the master mind cannot be accepted considering that all documents were received by the appellant Shri Ashok Sharma himself. The appellant s submission that it was not required to verify the existence of the IEC holder of physically verifying the premises also cannot be accepted in the factual matrix of the case. Had the case been one where the IEC holder had supplied all the documents to the appellant and the appellant filed the shipping bills in good faith, the situation would have been different. However, in this case without the knowledge of the IEC holder, the appellant filed benami shipping bills. The appellant was required verify if the exporter in whose name he was filing the shipping bills was indeed the exporter, and was issued IEC, etc. The appellant s submission that he did not abet the commission of any offence u/s 114 (iii) of the Customs Act also cannot be accepted for the reason that the appellant had filed benami shipping bills with mis-declared quantities and values at the behest of Shri Ashok Sharma. It is the discovery of this mis-declaration which rendered the goods liable for confiscation. Therefore, the appellant was liable to penalty u/s 114 (iii) of the Customs Act. The appellant s contention against the imposition of penalty u/s 114AA of the Customs Act also cannot be accepted for the reason that this section provides for penalty for willfully mis-declaring facts in any declaration before the customs authorities which the appellant did. Considering the value of the goods involved, we do not also find that the penalties imposed were excessive. We, therefore, find no reason to interfere with the order. Thus, the impugned orders are upheld and all the appeals are dismissed.

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• 2024 (4) TMI 1102
  Imposition Of Penalty - Revocation of the Customs Brokers licence - non-existent entities - violation of regulation 10 (n) of the Customs Brokers Licensing Regulations, 2013 - No opportunity to cross examine - violation of the principles of natural justice - HELD THAT:- DGARM did some analysis and came to the conclusion that several GST registrants did not exist and did not operate from their business addresses at all. It is undisputed that their registrations were issued by the very department which initiated the investigation. Thus, the irresistible conclusion is that if the DGARM is correct, then the department issued several benami (pseudonymous) GSTIN registrations to several entities which did not exist at all. Some of these non-existent entities were also filing GST returns with the department. These allegedly non-existent entities were also issued importer exporter codes (IEC) by the DGFT. Thus, if the DGARM is correct, DGFT had issued benami IECs. Neither of the documents were enclosed to the SCN or provided to the appellant, let alone giving the appellant an opportunity to cross examine those who sent them. This is clearly a violation of the principles of natural justice and on this ground alone, the impugned order deserves to be set aside. The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned. Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents as none of these departments have any interest in the relationship between the client and the Customs Broker and these documents are presumed to be authentic and reliable having been issued by the Government officers. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs broker can also, as an alternative, fulfill this obligation by obtaining data or information. In the factual matrix of this case, we are fully satisfied that the appellant has fulfilled this part of the obligation under Regulation 10(n). The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a few places while exporters or importers could be from any part of the country and they hire the services of the Customs Brokers. In fact, the entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. We, therefore, find that the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that despite obtaining and providing authentic documents issued by various Government officers, the Customs Broker has violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers. Thus, the appeal is allowed and the impugned order is set aside with consequential relief to the appellant.

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• 2024 (4) TMI 1101
  Validity Of Order in original passed by the Commissioner - Demand - Penalty - Import of Internal Remote Electrical Tilt Switches (iRET) - benefit of Exemption notification no. 50/2017-Cus - Whether the amperage of the iRETs imported by the appellant were of 5 Amps as declared in the Bills of Entry or were of less than 5 Amps as now asserted by the appellant relying on the aforesaid documents - HELD THAT:- The Commissioner has also wrongly declined to accept the test report of a government laboratory of another Ministry which certifies the amperage of the iRETs of the two models which were imported. The Commissioner has also declined to accept the clarificatory letter from the overseas supplier that due to a typographical error was not typed in all the invoices although the letter also clarifies that the actual amperage was 1.3 amperes. The logic of the Commissioner in declining to accept the letter of the supplier is that the supplier can only supply goods which are in its inventory and invoices are issued accordingly and he cannot now claim to have supplied iRETs of a different amperage. In our considered view, the Commissioner has gravely erred in not accepting the clarification from the supplier when it is consistent with the technical specifications in the product brochure and also consistent with a test report from a Government laboratory. If the supplier contended that a typographical error was committed in preparing the invoices and this assertion is supported by the product brochures, it was incorrect for the Commissioner to have rejected the clarification. As the product brochures, the test reports and the letter from the supplier all confirm that the iRETs which were imported were of less than 5 amperes, it is not necessary for us to examine the other evidence adduced by the appellant. Clearly, there was a typographical error in the Bills of Entry and the invoices which has resulted in the audit objection, the SCN and the impugned order. There is a discrepancy between what is stated to have been imported in the documents and the Bill of Entry and what is actually imported, duty can be charged on what is actually imported and not on what is said to have been imported. For instance, if 80 MT of goods are said to have been imported in the Bill of Entry and actually 100 MT of goods are imported, duty has to be charged on 100 MT and not on 80 MT. Similarly, if silver is declared to have been imported and actually gold is imported, duty has to be charged on gold and not on silver. In this case, if the Bill of Entry, invoice, packing list, etc. mention 5 amperes but there is no dispute that the goods were of particular models and the product literature as well as the test reports show that they are of less than 5 amperes, it is not open to the department to charge duty treating the goods as of 5 amperes merely because the Bill of Entry and other documents say so due to a typographical error. Thus, the appeal is allowed and the impugned order is set aside with consequential relief to the appellant.

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• 2024 (4) TMI 1100
  Smuggling - Prohibited goods - confiscation of cigarettes containers concealed in HDPE granules - Penalty u/s 112 (a) (b) and 114AA - seeking return of the goods or return of the market value of the goods - Validity of SCN issued by DRI - demand duty - HELD THAT:- The cigarettes were not mentioned in the Bill of Entry or Bill of Lading and therefore, were also not in the Import General Manifest (IGM) filed by the Shipping Line. The Shipping Line files the IGM based on the Bills of Lading and the goods which the containers are said to contain because the Shipping Line has no way of knowing what is actually in the containers. What was declared by the appellants was HDPE granules and the cigarettes were not declared. Therefore, the cigarettes were squarely covered by section 111(f) and are liable to confiscation under that clause. They have also not been indicated in the Bill of Entry and therefore, they are also liable to confiscation u/s 111(l). They do not correspond to the declaration made in the Bill of Entry and therefore, they are also liable to confiscation u/s 111(m). Therefore, the confiscation of the cigarettes under sections 111(f), (l) and (m) need to be upheld. Since the cigarettes are prohibited goods and are certainly harmful to the society being not as per the statutory requirement of health warnings in India, the Commissioner was correct in absolutely confiscating them and not giving an option of redemption. HDPE granules imported and declared were used to conceal the cigarettes smuggled in the containers. Therefore, they are liable to confiscation u/s 119. However, as they are not prohibited goods, the Commissioner gave an option of redemption u/s 125. We find this part of the order to be fair and balanced requiring no interference. The cigarettes were liable to confiscation and therefore all persons whose acts or omissions rendered them liable to confiscation are liable to penalty u/s 112. Ajay, Parshottam and Gagan are admittedly, and even according to the appeals filed before us, are the importers of the goods (both the cigarettes and the HDPE granules). Therefore, penalties on them u/s 112 need to be upheld. The quantum of penalty imposed is also proportionate to their offence. Section 112 provides for a penalty not exceeding the value of the prohibited goods. The value of the cigarettes was Rs. 1,22, 03,500/- and the penalty imposed on Ajay, Parshottam and Gagan was Rs. 15,00,000/- each which is only about 12% of the value of the prohibited goods. Considering the gravity of the offence of smuggling such large quantity of cigarettes which would cause great damage to the health of the people, we find that the quantum of penalty was very balanced and certainly not excessive. As far as the CHA, M/s. Guha Sarkar and Co. and its employee Shri Sunil Dixit are concerned, they filed the benami Bill of Entry at the behest of Ajay, Parshottam and Gagan in the name of R S Imports and Exports thereby facilitating the smuggling of the cigarettes. Therefore, they are squarely covered by section 112. A perusal of the appeal of these two appellants before us shows that they played an active part and it is not that the Bills of Entry were filed carelessly. Both Guha Sarkar and Co and Sunil Dixit have prayed for the goods to be released and return of the goods- essentially the same as the prayer of Ajay, Parshottam and Gagan. It is not their case that they had nothing to do with the imports and their failing was merely carelessly filing the Bill of Entry. The penalty of Rs. 5,00,000/- each imposed on Guha Sarkar and Co. and on Sunil Dixit in the impugned order u/s 112 is quite mild considering their role and the gravity of the offence. This does not call for any interference or reduction. Penalty u/s 114AA can be imposed if any person knowingly and willingly makes a wrong declaration. Ajay, Parshottam and Gagan as the admittedly de-facto importers and S Guha Sarkar Co. and Sunil as the CHA and its employee have deliberately filed the Bill of Entry in the name of R S Import Export when the actual importers were Ajay, Parshottam and Gagan. They have also not declared the true nature of the goods imported and smuggled in cigarettes. We have no hesitation in holding that all the five appellants are squarely covered by section 114AA. The maximum penalty imposable under this section is five times the value of the goods. The value of the smuggled cigarettes was Rs.1,22,03,500/- and the penalties imposed on Ajay, Parshottam and Gagan under this section is Rs. 20,00,000/- each and the penalty imposed on Guha Sarkar and Co. and Sunil Dixit is Rs. 5,00,000/-. We find these penalties to be balanced considering the gravity of the offence. These also call for no interference. Thus, we uphold the impugned order insofar as these five appellants are concerned and dismiss all five appeals.

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• 2024 (4) TMI 1099
  Revocation of Customs Brokers licence - forfeiture of security deposit and penalty - violation of regulation 10 (n) of the Customs Brokers Licensing Regulations, 2013? - non-existent entities have also been filing GST returns with the department - HELD THAT:- We have considered the submissions on both sides. DGARM did some analysis and came to the conclusion that several GST registrants did not exist and did not operate from their business addresses at all. It is undisputed that their registrations were issued by the very department which initiated the investigation. Thus, the irresistible conclusion is that if the DGARM is correct, then the department issued several benami (pseudonymous) GSTIN registrations to several entities which did not exist at all. Some of these non-existent entities have also been filing GST returns with the department. These allegedly non-existent entities were also issued IEC by the DGFT. Thus, if the DGARM is correct, DGFT had issued benami IECs. Even taking the reports at their face value, they do not show that the exporters never existed or had not existed at the time exports had taken place. There was no basis to draw such a conclusion, let alone, extrapolate it to conclude that the appellant had not fulfilled its obligations under Regulation 10(n). Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents as none of these departments have any interest in the relationship between the client and the Customs Broker and these documents are presumed to be authentic and reliable having been issued by the Government officers. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs broker can also, as an alternative, fulfill this obligation by obtaining data or information. In the factual matrix of this case, we are fully satisfied that the appellant has fulfilled this part of the obligation under Regulation 10(n). The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a few places while exporters or importers could be from any part of the country and they hire the services of the Customs Brokers. Besides the fact that no such obligation is in Regulation 10(n), it will be extremely difficult, if not, totally impossible, for the Customs Broker to physically visit the premises of each of its clients for verification. In the factual matrix of this case, we find that the GSTIN issued by the officers of CBIC itself shows the address of the client and the authenticity of the GSTIN is not in doubt. In fact, the entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent. The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker. We, therefore, find that the Customs Broker did not fail in discharging its responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers. Thus, the appeal is allowed and the impugned order dated 16.06.2021 passed by the Commissioner is set aside with consequential relief to the appellant.

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• 2024 (4) TMI 1098
  Rejection of request of the appellant for conversion of free shipping bills to drawback shipping bills - Section 149 of the Customs Act, 1962 - HELD THAT:- N/N. 39/2003-C.E.(N.T.) allows drawback on petroleum products. The appellant has exported petroleum products to M/s. Nepal Oil Corporation and hence, they are eligible for the benefit of duty drawback as provided in the aforesaid Notification. The appellant could not claim the drawback benefit because they had not filed the drawback shipping bill at the time of export. The appellant has filed applications dated 12.08.2004 and 24.04.2007 requesting for conversion of their free shipping bills to drawback shipping bills. When their request was not considered, they approached the Tribunal and this Tribunal vide Final Order No. FO/75188/2016 dated 17.02.2016 [ 2016 (3) TMI 889 - CESTAT KOLKATA] has categorically directed the adjudicating authority to allow the conversion of free shipping bill into drawback shipping bill subject to the satisfaction of the conditions stipulation in Section 149 of the Customs Act, 1962. The Tribunal in the Final Order dated 17.02.2016 [ 2016 (3) TMI 889 - CESTAT KOLKATA] has categorically directed the proper officer to allow conversion of the free shipping bills to drawback shipping bills in terms of Section 149 of the Customs Act independent of the C.B.E.C. Circular dated 16.01.2004. It is observed that the ld. adjudicating authority in the impugned order has rejected their applications for conversion on the grounds which are not there in Section 149. Since the appellant has all the documents necessary for considering the amendment, under Section 149 of the Act, the impugned order denying the request for conversion of free shipping bills to drawback shipping bills is legally not sustainable. In view of the above, the impugned order is set aside and the conversion of the free shipping bills to drawback shipping bills is allowed. The impugned order is set aside - appeal allowed.

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• 2024 (4) TMI 1097
  Seizure of plastic granules - Valuation - Confiscation of the vehicle - payment of redemption fine - Penalty - Interception and seizure of a truck carrying plastic scrap and granules allegedly of Nepalese origin. - HELD THAT:- In respect of the plastic scrap seized valued at Rs.2,16,180/-, I find that the documentary evidence clarifies that the Appellant had imported the 11,000 kgs. on 15.06.2016 vide Bill of Entry No.5638434, which is also affirmed by the Asstt. Commissioner and the invoice raised by them is for 10,000 kgs., whereas, the goods in question were weighted at 9388 kgs.. Reading together all these documents, I find that enough evidence has been provided by the Appellant to the effect that these are not procured illegally from Nepal, but are legally procured goods. Therefore, I set aside the confiscation order and the redemption fine of Rs.50,000/- imposed on the scrap valued at Rs.2,16,180/-. The Revenue is directed to release the plastic scrap to the Appellant forthwith. So far as the penalty of Rs.14,854/- imposed on Shri Bindeshwari Poddar is concerned, I find that in respect of plastic scrap, there is no case made out against the Appellant. However, in case of plastic granules, the Appellant though initially has not claimed the ownership, but has come forward to redeem the same on payment of redemption fine and the relevant payment of the relevant Customs duty. Based on these facts, the penalty of Rs.14,854/- is reduced to Rs.5,000/- (Rupees Five Thousand only). The Appellant has made a Security Deposit of Rs.64,854/-. This amount should be utilized to appropriate the redemption fine of Rs.20,000/- in respect of granules and the penalty imposed on Shri Bindeshwari Poddar and against the balance Customs duty and interest to be paid by the Appellant. The Appeal is disposed of thus.

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• Insolvency & Bankruptcy

• 2024 (4) TMI 1096
  Correctness of Resolution plan - fair and equitable distribution or not - resolution plan failed to make any provision for the operational creditors - Nil Payment to Operational Creditors - waterfall mechanism - HELD THAT:- The resolution plan has been approved by 100% voting by the CoC. It is well settled that the commercial wisdom of the CoC is unjusticiable. Moreover, the liquidation value of the operational creditors is NIL and the amount which has been distributed to the CD in accordance with Section 53(1) shall have to be Nil as well, therefore, the resolution plan is not in violation of Section 30(2)(b) of the Code. Moreover, admitted claim regarding the financial creditors is to the tune of Rs. 12067,57,69,383 and amount provided under the plan is Rs. 2500 Cr. which is to the tune of 20.098%, therefore, all the other creditors including unsecured financial creditors and operational creditors have been provided NIL. There are no error in the impugned order having been passed in respect of the applications filed by the Appellants, therefore, the appeal is found to be without any merit and the same is hereby dismissed.

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• Service Tax

• 2024 (4) TMI 1095
  Rejection of review petition - Exemption from Service tax - governmental authority - educational institutions - Indian Institute of Technology, Patna (IIT Patna) - National Institute of Technology, Rourkela (NIT Rourkela) - covered by Mega Service Tax Exemption Notification No. 25/2012, G.S.R 467(E) dated 20th June, 2012 or not - it was held by SC that in the present case, the word or between sub-clauses (i) and (ii) indicates the independent and disjunctive nature of sub-clause (i), meaning thereby that or used after sub-clause (i) cannot be interpreted as and so as to tie it with the condition enumerated in the long line of clause 2(s) which is applicable only to sub-clause (ii). HELD THAT:- No case for review of the judgment dated 13.10.2023 is made out - The review petition is accordingly dismissed.

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• 2024 (4) TMI 1094
  Extended period of limitation - suppression of facts or not - Recovery of service tax - wrongful claiming of value of reimbursement (pure agent) - HELD THAT:- The Order-in-Original is observed to be silent about these allegations/observations in the show cause notice though the extended period is held to be invocable. These allegations also have factual basis which need appreciation of the returns and other related documents. Hence it is not deemed appropriate to decide the plea of limitation without appreciation of the documentary evidence which has been produced by the appellant at this stage before the Tribunal. The said documents need to be appreciated by the original adjudicating authority itself. Both the parties otherwise have acknowledged consents for remanding back the matter. It is deemed proper that the original adjudicating authority shall decide the show cause notice afresh after giving the appropriate findings with respect to the allegations of suppression and misrepresentation and thus about the invocation of extended period of limitation. Appeal allowed by way of remand.

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• Central Excise

• 2024 (4) TMI 1093
  Maintainability of SLP - petitioners do not press this special leave petition and they intend to file a Review Petition before the High Court - not given scope to participate in the hearing - violation of principles of natural justice - it was held by High Court that if the authority did not follow the direction of the CESTAT, there is gross laches on the part of the authority in passing the order. Had the petitioners brought the fact to the notice of the CESTAT with regard to laches of the authority, in that event the CESTAT could have considered the same. Without doing so, the petitioners having approached this Court, the writ petition is not maintainable. HELD THAT:- The special leave petition is dismissed as not pressed with the aforesaid liberty - In the alternative, liberty is also reserved to the petitioners herein to file an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) within a period of one month from today.

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• 2024 (4) TMI 1092
  Maintainability of review petition - time limitation - Process amounting to manufacture - purchase of duty paid chassis and undertaking body building activity - motor vehicles described in sub-headings 8702.10 and 8702.90 of Heading 87.02 - the SC held that given the structure of the statute which clearly comprehends Entry 87.02 [by specifically referring to Headings 8702.10 and 8702.90); that the activity carried on by the appellant results in a finished product i.e. useable buses, the appellant s contention that fabrication does not amount to manufacture, does not merit consideration. HELD THAT:- There is an inordinate delay of 389, 390 and 389 days, respectively, in filing the present review petitions - there are no good ground and reason to review the order dated 11.01.2023. The review petitions are dismissed on the ground of delay, as well as, on merits.

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• 2024 (4) TMI 1091
  Recovery of differential Central Excise Duty - Clearance of subsidized SSP under concessional rate of duty - Violations of the conditions of the Exemption Notification - entire production was meant for agriculture use only and it was explicitly mentioned so on every pack - case of the revenue is that after the SSP was removed and sold to IPL, IPL further sold it to Mahadhan who, further sold it to Hindustan who misused the SSP for agriculture use to manufacture other products in their industry - HELD THAT:- The diversion of SSP meant for and clearly marked as meant for agriculture use to non-agricultural use was done by Hindustan alone. It is undisputed that all bags of SSP were clearly meant for agriculture use only . Such being the case, there was absolutely no reason for Hindustan to have put the subsidized SSP cleared under concessional rate of excise duty and intended for agricultural use to industrial use. The submission of Hindustan in its appeal that the SSP, which it purchased, was of sub-standard quality holds no water. As rightly pointed out by the lower authorities the Fertilizer Control Order 1994 clearly requires marking of fertilizer meant for agriculture use and non-agriculture use. There is nothing in the records to substantiate the appellant s claim that the SSP sold by Manglam to IPL and IPL to Mahadhan and further by Mahadhan to Hindustan was of sub-standard quality unfit for agricultural use. Clearly, by diverting the fertilizer meant for agriculture use to other use, Hindustan was responsible for evasion of excise duty. In fact, Manglam and IPL could not have foreseen this diversion by Hindustan. There are no justification to set aside the confiscation of the seized 33 MT of SSP or to set aside the imposition of 50,000/- redemption fine in lieu of confiscation. There are no justification to modify penalty of Rs. 20,000/- under rule 26 imposed on Hindustan by the Commissioner (Appeals). Appeal allowed.

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• 2024 (4) TMI 1090
  Short payment of Excise Duty - clearance of rough marble slabs - less quantity has been shown by the appellant by way of adopting the incorrect formula for converting the quantity of square feet (Sq. Ft.) of rough marble slabs into Square Meter (Sq. Mtr.) - suppression of facts - invocation of Extended period of Limitation - HELD THAT:- The appellant is admittedly a manufacturer of marble slabs out of the marble blocks. Thus it is clear that appellant is converting irregularly shaped rough marbles into the marble slabs of specific length, breadth and width. The area of slabs with specific dimensions can readily be calculated into Square Feet/ Sqr. Meters. However for the rough block/irregular shaped marble it is only the volume in cubic meters which can be ascertained to some extent of precision. It is appellant s case that the production quantity of marble slabs has been calculated by adopting the aforesaid option given - it cannot be denied by the reasonable prudence that once a particular volume of marble block will be converted into slabs of different thicknesses, the area in Sq. Ft./Sq. Mtr. For the slab having more thickness will be less. From the given standards it can be judicially noticed that the area for a slab of 16 mm thickness shall be 175 Sq Ft. per ton of the marble whereas for 18 mm Thick slab it will be 165 Sq, Ft. per ton and for 20 mm thickness slab it will be 150 Sq. Ft. per Ton. There are no basis of the formula as has been impressed upon by ld. D.R. On the contrary the formula admittedly applied by the appellant is the formula as mentioned in the Central Excise Tariff. No evidence is produced by the department to even demonstrate as to how the formula has wrongly been applied. In the absence of the evidence, the said calculation cannot be held to be a wrong calculation. Extended period of Limitation - the only ground taken for the same is that the right quantity was not mentioned in the ER-1 Returns and had no audit would be conducted the short-payment by the appellant would not have come to the notice of the department - HELD THAT:- It is a matter of fact that all details were available in the records of appellant whatever was mentioned by the appellant in the ER-1 Returns was as per their records maintained by applying the formula given in the Tariff Act. It is opined that the above all mere oral allegations. There is no evidence to prove that the intent of the appellant was to evade duty. Admittedly the appellant as per selfassessment has discharged his duty liability. The returns have also been furnished. It was now for the Department to scrutinize the returns and to ascertain if the service tax had been paid correctly or not. Mere omission is not sufficient to be called as suppression of facts to invoke the extended period. Department has to prove that the act was deliberate to not to pay or to short pay the duty - there is no evidence for the same - thus, even extended period has wrongly been invoked. Resultantly, the Show Cause Notice itself is barred by time. The demand under challenge does not sustain on its merits. It also stands hit by the bar of limitation. Hence the demand is held to have wrongly been confirmed. The order under challenge is therefore set aside - Appeal allowed.

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• 2024 (4) TMI 1089
  100% EOU - Clandestine removal - penalty u/r 26(1) of Central Excise Rules, 2002 - entire charge based on the statement of the appellant - retraction of statements - violation of principles of natural justice - HELD THAT:- The adjudicating authority has not whispered anything with regard to the affidavit filed by the appellant. Moreover, in the event of giving affidavit by the appellant, the adjudicating authority should have conducted examination-in-chief in terms of Section 9D of Central Excise Act and thereafter only the statement could have been relied upon as an evidence but the adjudicating authority has neither made any comment on the affidavit filed by appellant nor conducted any examination-in-chief. Therefore, there is a gross violation of principles of natural justice in this case. Accordingly, the matter needs to be reconsidered, limited to the imposition of penalty under Rule 26 on the present appellant. The matter is remanded to the Adjudicating authority for passing a fresh order, after compliance of principles of natural justice.

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• 2024 (4) TMI 1088
  Method of valuation - goods transferred to another unit for captive consumption - to be valued in accordance with Rule 8 of the Valuation Rules or under Rule 4 - revenue neutrality - Extended period of limitation - maintainability of SCN in the absence of challenge of final assessment order. Whether the appellant has paid the duty correctly in accordance with Rule 8 of the Valuation Rules or the appellant is liable to pay duty in terms of Rule 4 of the Valuation Rules? - HELD THAT:- The Circular No.692/8/2003-CX dated 13.02.2003 clarified the position that the cost of production of captively consumed goods will be done strictly in accordance with CAS-4. Admittedly, in this case also, the appellant has adopted the above said Circular and was paying duty as per CAS-4 in terms of Rule 8 of the Valuation Rules - the fact is further noted that the Circular dated 13.02.2003 on the basis of which the appellant paid the duty is binding on the Revenue as held by the Hon ble Apex Court in the case of Ratan Melting and Wire Industries [ 2008 (10) TMI 5 - SUPREME COURT] - thus, the appellant has correctly paid the duty on the goods in question, which has been captively consumed by the sister unit for manufacturing of excisable goods in terms of CBEC Circular No.692/8/2003-CX dated 13.02.2003. On merit, the appellant has rightly paid the duty as per CAS-4 in terms of Rule 8 of the Valuation Rules - thus, Rule 4 of the Valuation Rules, is not applicable in the facts and circumstances of the case. Whether the extended period of limitation is invokable or not? - HELD THAT:- For the period from April, 2009 to November, 2013, a show-cause notice was issued on 22nd December, 2015 is barred by limitation as the appellant has not suppressed any facts from the Department while paying duty and on finalization of provisional assessment, Therefore, this issue is answered in favour of the appellant. Whether it is a case of revenue neutrality or not? - HELD THAT:- The appellant is clearing the goods in question to their sister unit, who is entitled to take the cenvat credit itself. In that circumstances , we hold that it is a revenue neutral situation as held by this Tribunal in the case of M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-II [ 2023 (5) TMI 720 - CESTAT KOLKATA ], wherein this Tribunal has observed as the entire exercise would be revenue neutral, there is no loss of revenue to the exchequer - thus, it is a revenue neutral situation. On this count also, the appellant is not liable to pay differential duty as adjudicated by the adjudicating authority. Whether in the absence of challenge of final assessment order, a show-cause notice issued to the appellant is maintainable or not? - HELD THAT:- Admittedly, in this case, during the impugned period, the appellant cleared the goods provisionally paying duty and all the provisional assessments have made final and the said final assessments have been accepted by the Revenue. In that circumstances, without challenging the said final assessment, the Revenue cannot proceed to issue of showcause notice to the appellant - the show-cause notice was not required to be issued without challenging the order of final assessment of the provisional assessments. The demand of duty is not sustainable against the appellant. Consequently, no penalty is imposable on the appellant. The impugned order is set aside - appeal allowed.

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• 2024 (4) TMI 1087
  Irregular availment CENVAT Credit - ineligible documents - supplementary invoice/debit notes issued by M/s. Tata Steel Ltd. (TSL) - violation of provisions of Rule 3 and Rule 9 of the CENVAT Credit Rules, 2004 during the impugned periods - HELD THAT:- Although the appellant has produced all the documents, it is the finding of the authorities below that they could not correlate the documents for availment of CENVAT Credit on the strength of debit notes issued by M/s. Tata Steel Limited. In these circumstances, it would be in the interests of justice to remand the matter back to the adjudicating authority with a direction to the adjudicating authority to sit with the representative of the appellant for correlation of the debit notes along with invoices with the certificate issued by M/s. Tata Steel Limited showing that debit notes have been issued to the appellant, on the strength of which the appellant is entitled to take CENVAT Credit. Matter remanded back to the adjudicating authority for verification of the documents only. The appellant is also directed to approach the adjudicating authority within a period of 15 days from the date of receipt of this Order, who shall sit with the representative of the appellant for correlation. The appeals are disposed of by way of remand.

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• 2024 (4) TMI 1086
  Refund of excess duty paid under protest - date on which notification came into effect. Enhancement of duty by N/N. 22/ 2014 dated 12.11.2014 and N/N. 24/2014 dated 02.12.2014 - clearances already effected on the date of the Notifications i.e. 12.11.2014 and 02.12.2014, the invoices issued to the customers on the existing lower rate of duty - Duty paid in the subsequent month at enhanced rate. HELD THAT:- An identical issue in the appellant s own case was considered by the Ahmedabad Bench of the CESTAT [ 2021 (11) TMI 112 - CESTAT AHMEDABAD] . After considering the various decisions of the High Court and the Supreme Court the issue was decided in favour of the appellant by holding From the above provision it is absolutely clear that any notification issued under Sub-section (1) or Sub-section (2A) come into force on a date when it is published and offered for sale on the date of its issue. The impugned order is not sustainable in law, therefore, the same is set aside by allowing the appeal of the appellant - Appeal allowed.

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• Indian Laws

• 2024 (4) TMI 1085
  Integrity of the electoral process - suspicion of infringement of a right - Seeking direction to return to the paper ballot system - in alternative it is sought that printed slip from the Voter Verifiable Paper Audit Trail machine be given to the voter to verify, and put in the ballot box, for counting - in alternative it is sought that there should be 100% counting of the VVPAT slips in addition to electronic counting by the control unit. As held by SANJIV KHANNA, J. HELD THAT:- In-detail review of the administrative and technical safeguards of the EVM mechanism conducted - The discussion aims to address the uncertainties and provide assurance regarding the integrity of the electoral process. A voting mechanism must uphold and adhere to the principles of security, accountability, and accuracy. An overcomplex voting system may engender doubt and uncertainty, thereby easing the chances of manipulation. In the considered opinion, the EVMs are simple, secure and user-friendly. The voters, candidates and their representatives, and the officials of the ECI are aware of the nitty-gritty of the EVM system. They also check and ensure righteousness and integrity. Moreover, the incorporation of the VVPAT system fortifies the principle of vote verifiability, thereby enhancing the overall accountability of the electoral process. Thera are no doubt, but to only further strengthen the integrity of the election process, following directions are given:- (a) On completion of the symbol loading process in the VVPATs undertaken on or after 01.05.2024, the symbol loading units shall be sealed and secured in a container. The candidates or their representatives shall sign the seal. The sealed containers, containing the symbol loading units, shall be kept in the strong room along with the EVMs at least for a period of 45 days post the declaration of results. They shall be opened, examined and dealt with as in the case of EVMs. (b) The burnt memory/microcontroller in 5% of the EVMs, that is, the control unit, ballot unit and the VVPAT, per assembly constituency/assembly segment of a parliamentary constituency shall be checked and verified by the team of engineers from the manufacturers of the EVMs, post the announcement of the results, for any tampering or modification, on a written request made by candidates who are at SI. No. 2 or Sl. No. 3, behind the highest polled candidate. Such candidates or their representatives shall identify the EVMs by the polling station or serial number. All the candidates and their representatives shall have an option to remain present at the time of verification. Such a request should be made within a period of 7 days from the date of declaration of the result. The District Election Officer, in consultation with the team of engineers, shall certify the authenticity/intactness of the burnt memory/ microcontroller after the verification process is conducted. The actual cost or expenses for the said verification will be notified by the ECI, and the candidate making the said request will pay for such expenses. The expenses will be refunded, in case the EVM is found to be tampered. As per Dipankar Datta, J. HELD THAT:- A citizen s right to freedom of speech and expression Under Article 19(1) is not absolute; the State by virtue of Article 19(2) can place reasonable restrictions on these rights. There can be no doubt that the electorate has a right to be informed if the votes, as cast, are accurately recorded. The dispute, in the present writ proceedings, centres around the modality of delivering the information. The Petitioners have characterised the present procedure, wherein the voter after pressing the blue button and casting his/her vote can see his VVPAT slip for 7 seconds through an illuminated glass window, as inadequate for the voter to verify if his/her vote, as cast, is recorded. To buttress their submission, the Petitioners have relied on the proviso to Rule 49M(3) of the Conduct of Election Rules, 1961. The Petitioners urge that the ECI is not following the statutory mandate provided in the Election Rules - as long as there is no allegation of statutory breach, there can be no substitution of the Court s view for the view of the ECI that the light in the VVPAT would be on for 7 (seven) seconds and not more. Upon the conclusion of polling, there exists yet another remedy Under Rule 56-D, for a candidate to apply for a count of the VVPAT slips, should any discrepancy be suspected. Thus, it is manifest that there is in place a stringent system of checks and balances, to prevent any possibility of a miscount of votes, and for the voter to know that his/her vote has been counted. There can be no doubt that such a system, which is distinctly more satisfactory compared to the system of the yester-years, suitably satisfies the voter s right Under Article 19(1)(a) to know that his/her vote has been counted as recorded. The Republic has prided itself in conducting free and fair elections for the past 70 years, the credit wherefor can largely be attributed to the ECI and the trust reposed in it by the public. While rational scepticism of the status quo is desirable in a healthy democracy, this Court cannot allow the entire process of the underway General Elections to be called into question and upended on mere apprehension and speculation of the Petitioners. The Petitioners have neither been able to demonstrate how the use of EVMs in elections violates the principle of free and fair elections; nor have they been able to establish a fundamental right to 100% VVPAT slips tallying with the votes cast. The Petitioners apprehensions are misplaced. Reverting to the paper ballot system, rejecting inevitable march of technological advancement, and burdening the ECI with the onerous task of 100% VVPAT slips tallying would be a folly when the challenges faced in conducting the elections are of such gargantuan scale. The mere suspicion that there may be a mismatch in votes cast through EVMs, thereby giving rise to a demand for a 100% VVPAT slips verification, is not a sufficient ground for the present set of writ petitions to be considered maintainable. To maintain these writ petitions, it ought to have been shown that there exists a tangible threat of infringement; however, that has also not been substantiated. Thus, without any evidence of malice, arbitrariness, breach of law, or a genuine threat to invasion of rights, the writ petitions could have been dismissed as not maintainable. But, considering the seriousness of the concerns that the Court suo motu had expressed to which responses were received from the official of the ECI as well as its senior counsel, the necessity was felt to issue the twin directions in the greater public interest and to sub-serve the demands of justice. While maintaining a balanced perspective is crucial in evaluating systems or institutions, blindly distrusting any aspect of the system can breed unwarranted scepticism and impede progress. Instead, a critical yet constructive approach, guided by evidence and reason, should be followed to make room for meaningful improvements and to ensure the system s credibility and effectiveness. Be it the citizens, the judiciary, the elected representatives, or even the electoral machinery, democracy is all about striving to build harmony and trust between all its pillars through open dialogue, transparency in processes, and continuous improvement of the system by active participation in democratic practices. Our approach should be guided by evidence and reason to allow space for meaningful improvements. By nurturing a culture of trust and collaboration, we can strengthen the foundations of our democracy and ensure that the voices and choices of all citizens are valued and respected. With each pillar fortified, our democracy stands robust and resilient.

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• 2024 (4) TMI 1084
  Abatement of suit claiming injunction - effect on suit when the plaintiff seeking injunction, dies - disheritance by deceased-plaintiff - whether cause of action in an injunction suit will survive to the legal heirs of deceased plaintiff and whether upon death of the plaintiff, the relief of injunction would be rendered nugatory? HELD THAT:- There is a distinction between the death of the plaintiff and the death of the defendant. The injunction is operative against the defendants. Upon death of the defendant, the question of binding his legal representatives by injunction would not arise. But in a case where the plaintiff, who is seeking injunction dies, the same position will not hold good. The right of injunction does not die with the death of plaintiff. In the instant case, the plaintiff i.e. deceased-Usha Tiwari had sought injunction that the petitioners herein should not interfere in her possession over the property in dispute. A suit claiming injunction of this nature does not abate on death of the plaintiff. The cause of action would survive to his/her legal representatives, who come in possession of the said property - One thing is clear that if the respondent and his son succeed in proving before the trial court that petitioner No. 1 has been disinherited from the suit property and that original plaintiff had executed a Will in favour of Yujure Tiwari, her grandson, they have a right to obtain an injunction against the petitioners. Therefore, it cannot be stated that right to suit does not survive in their favour. The learned civil judge has not discussed the matter in detail and has simply noted that as per the plaintiff, cause of action does not survive and that no application has been moved for impleadment of legal representatives though period of 90 days is over. On this ground, the learned civil judge has concluded that the suit stands abated. The order passed by the civil court does not deal with the merits of the issue relating to abatement of the suit. The said observation of the learned civil judge could not have precluded the learned appellate court from considering the issue on its merits and for taking a different view. Thus, it cannot be stated that the learned appellate court has, while passing the impugned order, either committed any illegality or it has acted with material irregularity - The revision petition is without merit and is dismissed as such.

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