Tribunals and Commissions judgments

CESTAT rules that a customs broker cannot be penalized under Section 117 of the Customs Act for exporting controlled substances like Ergotamine without a No Objection Certificate (NOC), as CBLR 2018 requires a specific penalty provision. The decision underscores that general penalty clauses cannot override regulatory compliance mandates under NDPS regulations.

CAT Allahabad upholds Railway Recruitment Board's selection process, ruling that candidates who do not opt for higher-preference posts lose claim to appointment despite meeting merit criteria. The decision clarifies that post preferences under CEN No. 03/2015 prevail over raw scores, impacting thousands of government job aspirants.

Central Administrative Tribunal Ernakulam rules that transfers issued as disciplinary action-without formal proceedings-violate service law principles. The judgment reinforces that administrative grounds cannot mask punitive intent, protecting employees from arbitrary relocations under the guise of routine transfers.

CAT Allahabad holds that contractual termination carrying stigmatic implications violates principles of natural justice, even if the contract permits termination without cause. The ruling mandates an opportunity for the employee to respond before adverse action, reinforcing procedural fairness in employment disputes under service law.

CESTAT Kolkata holds that 67% service tax abatement under Notification No. 1/2006-ST cannot be denied merely due to procedural lapses like non-claim in ST-3 returns. The ruling reinforces that substantive benefits under tax laws prevail over technical non-compliance, impacting construction and works contract service providers.

CESTAT ruled that reversing CENVAT credit proportionately on inputs used for exempted electricity sales does not amount to non-availment under Rule 6 of the CENVAT Credit Rules. The Tribunal set aside demands totaling ₹7.13 crore, clarifying that separate record-keeping is not mandatory if credit reversal is already effected, offering relief to manufacturers with captive power plants.

CCI holds that higher pricing of medical services and products, without evidence of anti-competitive conduct or market power abuse, does not violate Section 4 of the Competition Act. The ruling clarifies that excessive pricing complaints require proof of dominance and exploitative practices, not just price disparity.

CESTAT Kolkata quashes excise demands against small-scale manufacturers for alleged SSI exemption misuse, ruling that mere eye estimation and uncorroborated records cannot substantiate alleged clandestine removal. The decision reinforces that brand name usage alone does not disqualify SSI benefits and mandates physical verification as a non-negotiable condition for any duty demand, protecting genuine small units from arbitrary assessments.

CESTAT Kolkata rules that manufacturers can claim Cenvat credit for service tax paid on outward freight even after April 1, 2008, if ownership of goods transfers at the buyer’s premises, as per the pre-amendment definition of 'place of removal'. This clarifies a critical ambiguity for manufacturers shipping to distant customers under contract terms requiring them to bear delivery costs and risk.

CAT Cuttack rules that recovery of excess pay from Group-C employees-even due to departmental error-is impermissible under Jogeswar Sahoo v. Dist. Judge, as it violates principles of natural justice and Articles 14 & 16 of the Constitution. The ruling protects low-ranking employees from arbitrary deductions without prior notice or opportunity to be heard.

NCLAT reinforces the finality of liquidation auctions under 'as is where is' terms, holding that bidders cannot challenge confirmed sales through post-bid enhancements unless fraud or procedural violations are proven. The ruling protects auction integrity and prevents last-minute bid manipulations, ensuring certainty for liquidators and successful resolution applicants under the Insolvency and Bankruptcy Code.

CAT Ernakulam rules that Gramin Dak Sevaks (GDS) transferred on medical grounds are entitled to pay protection under TRCA guidelines, regardless of delay or prior undertakings. The ruling affirms that administrative guidelines create enforceable statutory rights, impacting thousands of postal department employees facing similar disputes.

NCLAT rules that an Interim Resolution Professional (IRP) is entitled only to proportional fees for duties performed during a stay on Committee of Creditors (CoC) constitution, rejecting claims for full statutory remuneration. The ruling clarifies that fee entitlement under IBC is contingent on actual functions discharged, not mere appointment duration.

CAT Ernakulam rules that employees provisionally appointed and later invalidated must be restored to their original GDS position with all benefits, including pension and service continuity, up to the age of 65. The judgment reinforces that service rendered under provisional appointments cannot be retrospectively nullified, ensuring statutory protection for retired employees.

CESTAT Allahabad ruled that service tax liability under the Reverse Charge Mechanism requires unambiguous identification of imported services. The tribunal held that revenue neutrality precludes tax demands where Cenvat credit offsets liability, setting aside a ₹77 crore demand against Samsung for advertisement and sales promotion charges paid to foreign entities.

NCLAT rules that interest-free loans from directors may qualify as financial debt under Section 5(8) of the Insolvency and Bankruptcy Code if they reflect a commercial borrowing effect, even without formal agreements. This expands the scope of financial creditors and impacts corporate governance and insolvency proceedings.

CESTAT rules that Cenvat credit cannot be denied based solely on third-party statements or fake invoices unless the Revenue proves the assessee's knowledge of fraud or provides corroborative evidence. The ruling reinforces natural justice principles, requiring direct evidence linking the assessee to fraudulent transactions to disallow credit claims.

CESTAT rules that sales of MS scrap to SEZ units are exempt from customs duty under Section 26(1)(e) of the SEZ Act, 2005. The tribunal set aside the demand, interest, and penalties, holding that the department violated principles of natural justice by not providing a fair hearing to the appellant.

CESTAT quashed a ₹10 lakh penalty under Section 112(b) of the Customs Act, ruling that vague third-party statements and absence of proof of knowledge or physical possession of confiscable goods cannot sustain penalty imposition. The decision reinforces that strict compliance with mens rea and possession requirements is mandatory for penal action under the Customs Act.

The NCLAT has clarified that operational creditors, even with admitted claims under the IBC, cannot invoke RERA’s statutory trust provisions to extract funds from the project’s 70% escrow account during corporate insolvency. This upholds the hierarchy of the IBC framework, ensuring resolution plans - not piecemeal claims - govern asset distribution, protecting homebuyers and the integrity of the insolvency process.

NGT Central Zone holds Alwar Nagar Nigam and District Magistrate liable for failing to operationalize the waste treatment plant for over four years, violating SWM Rules 2016. The tribunal mandates environmental compensation, completion of a mechanized transfer station, and issuance of a Consent to Operate (CTO) within deadlines, reinforcing the 'Polluter Pays Principle' for municipal bodies.

CESTAT rules that penalties under Section 112(b) of the Customs Act cannot be imposed without concrete evidence of the appellant's knowledge or physical possession of illicit goods. The tribunal underscores that mere association with a supplier or failure to prove mens rea invalidates penalty imposition, reinforcing natural justice principles in customs enforcement.

NCLAT rules that a mortgage executed seven years after loan disbursement but within the one-year look-back period under Section 43 IBC constitutes a preferential transaction, regardless of prior contractual intent. The ruling clarifies that timing of security perfection-not just loan origination-determines vulnerability to avoidance, impacting lenders and resolution professionals in CIRP.

CESTAT Allahabad rules that the department cannot invoke extended limitation under service tax law if it was already aware of the facts at the time of the first show cause notice. The tribunal sets aside a Rs.13.36 lakh demand, reinforcing that suppression of facts cannot be alleged where no new information emerges.