Tribunals and Commissions judgments

ITAT Kolkata rules that late fees under Section 234E of the Income Tax Act cannot be levied for TDS statements filed before June 1, 2015, aligning with Madras, Karnataka, and Kerala High Court judgments. This decision shields taxpayers from retrospective penalties for pre-2015 filings.

CESTAT ruled that manufacturers who do not avail CENVAT credit on inputs used for non-excisable goods are not liable to pay 5-6% of their value under Rule 6(3) of the CENVAT Credit Rules. The decision clarifies that non-excisable goods do not qualify as 'exempted goods' unless explicitly defined, offering relief to manufacturers dealing with by-products.

CESTAT Bangalore rules that outbound tour services provided by Indian operators to Indian tourists were taxable under the Service Tax regime prior to the Negative List introduction, rejecting the 'export of services' claim. The ruling clarifies territorial applicability of taxable services, impacting tour operators' compliance obligations for pre-2012 periods.

CESTAT Hyderabad holds that merger and acquisition advisory services do not qualify as 'Management Consultancy Service' for service tax purposes. The tribunal also rules that shareholders are not liable under the reverse charge mechanism, reinforcing the separate legal entity principle between a company and its shareholders.

The Central Administrative Tribunal ruled that outstanding Annual Performance Appraisal Reports (APARs) and subsequent promotions negate earlier adverse entries, invalidating premature retirement under FR 56(j). The officer must be reinstated with full back wages and benefits, setting a precedent for fair assessment of service records in compulsory retirement cases.

CESTAT Mumbai ruled that GOQii activity trackers, despite their fitness tracking function, qualify as 'communication apparatus' under Customs Tariff Item 8517 6290 due to their essential Bluetooth data transmission capability. The decision overturns the classification as pedometers, imposing a higher 20% basic customs duty and setting precedent for similar wearable tech imports.

NCLAT clarifies that the 30-day limitation period for filing appeals under Section 61 of the Insolvency and Bankruptcy Code starts from the date of oral pronouncement in open court, not from the upload of the order or receipt of a certified copy. This ruling impacts homebuyers and financial creditors challenging resolution plans, ensuring timely appeals are calculated from the correct date.

CESTAT Chandigarh rules that payment of excise duty on the final product automatically reverses inadmissible CENVAT credit, regardless of whether the process constitutes 'manufacture' under the Central Excise Act. This precedent shifts the compliance burden onto assessees to verify credit eligibility before claiming input benefits, impacting manufacturers engaged in marginal processing activities.

CESTAT Chandigarh rules that Section 110A of the Customs Act imposes a mandatory obligation on authorities to provisionally release seized goods, regardless of alleged prohibition, until adjudication is complete. The tribunal set aside the denial of release, emphasizing that compliance with BIS or DGFT requirements cannot override the statutory right to provisional release.

The NCLAT has ruled that profit-sharing payments under an Operation & Management agreement are not operational debt under the IBC, as they arise from commercial collaboration, not goods or services supplied. This clarifies the boundary between revenue-sharing arrangements and true creditor-debtor relationships, impacting how operators and owners structure agreements to avoid insolvency triggers.

CESTAT Hyderabad holds that input services essential to business operations-such as manpower, insurance, and repairs-remain eligible for Cenvat credit after 01.04.2011, provided they are not directly tied to new construction or civil works. This clarifies the scope of Rule 2(l) of CCR, 2004 and protects businesses from overbroad disallowances of legitimate input credits.

CESTAT Hyderabad rules that minor invoice irregularities - including incorrect billing address and failure to register as an Input Service Distributor - do not invalidate Cenvat credit if the services were actually received and service tax duly paid. This reinforces the principle that substantive compliance trumps technical non-compliance in tax credit claims, benefiting multi-unit businesses relying on centralized invoicing.

CESTAT Chennai rules that adding toileting functionality to a wheelchair does not reclassify it as a commode chair under HSN 9402, as long as mobility remains its essential purpose. This clarifies that assistive devices combining multiple health functions retain exemption eligibility under Notification 12/2012-Cus. if their primary design serves mobility for persons with disabilities.

CESTAT Chennai clarifies that mere related-party status does not invalidate transaction value under Rule 9; the revenue must prove actual influence on price through concrete evidence. This ruling empowers manufacturers dealing with group companies to rely on arm’s-length pricing unless proven otherwise, reducing arbitrary reassessments in excise audits.

CESTAT Chandigarh has ruled that customs authorities cannot impose arbitrary bank guarantees for the provisional release of perishable goods when FSSAI-certified lab reports establish accurate classification, invalidating reliance on non-expert visual assessments. This sets a critical precedent for importers of agri-commodities, ensuring that scientific evidence trumps subjective customs judgments and prevents financial coercion.

CESTAT Mumbai holds that Rule 21(3) of the Anti-Dumping Duty Rules, 1995 creates a non-discretionary obligation to refund provisional duties when not confirmed, rendering unjust enrichment defenses under Section 11B of the Central Excise Act inapplicable. This protects importers from prolonged financial uncertainty and clarifies that statutory refund mechanisms override equitable doctrines in customs law.

The NCLAT has ruled that the Corporate Insolvency Resolution Process under the IBC cannot be invoked against a real estate developer’s entire portfolio - it must be confined strictly to the project where default occurred. This protects other solvent projects and their homebuyers from being dragged into insolvency, establishing a critical precedent for sector-specific relief and equitable treatment of consumer-creditors in real estate insolvencies.

CESTAT Chennai rules that minor deviations in invoice formatting cannot override the core conditions for Special Additional Duty refunds under Notification 102/2007-Cus, provided payment of duty and non-passing of incidence are proven. This empowers importers by decoupling refund eligibility from rigid procedural formalities, reinforcing that substance trumps form in customs compliance.

ITAT Delhi rules that under the India-UAE DTAA, capital gains from debt mutual funds are exempt in India if the assessee is a UAE tax resident, even if UAE does not levy personal income tax. The ruling clarifies that 'liable to tax' under the treaty refers to residence-based jurisdiction, not actual tax payment, impacting cross-border investors and tax planners.

ITAT Bangalore condones a 92-day delay in filing an appeal after the assessee failed to receive the CIT(A) order due to service on incorrect email IDs. The Tribunal emphasized that substantial justice prevails over procedural technicalities, directing authorities to ensure proper service of orders to avoid prejudice to taxpayers.

ITAT Ahmedabad rules that the Central Processing Centre (CPC) cannot unilaterally reclassify an assessee's status from an Association of Persons (AOP) to a cooperative society under Section 143(1) of the Income Tax Act without documentary evidence. The ruling reinforces that status reclassification requires proof, protecting assessees from arbitrary tax demands.

NCLAT Chennai reaffirms that the 30+15 day limitation period under Section 61 of the Insolvency and Bankruptcy Code (IBC) is absolute. Filing writ petitions after expiry does not extend the deadline, and High Courts lack jurisdiction to condone delays in statutory appeals. This ruling reinforces strict adherence to statutory timelines, impacting personal guarantors and creditors in insolvency proceedings.

NCLAT rules that the clock for initiating insolvency proceedings under Section 95 IBC against a personal guarantor starts only upon formal invocation of the guarantee, not prior demand letters. This clarifies the limitation period for creditors and protects guarantors from premature insolvency actions.

ITAT Delhi allows assessees to set off 50% of unexplained cash deposits against unaccounted on-money receipts from prior years, limiting additions under Section 68. The ruling provides relief to real estate developers facing tax scrutiny for cash transactions, clarifying the scope of telescoping benefits in search assessments.