Tribunals and Commissions judgments

Railway employees appointed on compassionate grounds after 2004 can now claim benefits under the Old Pension Scheme, reversing earlier directives that denied them. This expands pension entitlements for senior staff hired under humanitarian considerations.

CESTAT ruled that royalties for pre-installing Microsoft operating systems are not ‘IPR services’, rendering the service-tax demand invalid and time-barred because tax cannot be levied before 16 May 2008 or after the limitation period. The decision shields hardware manufacturers that bundle OS software.

CESTAT ruled that a bill containing the essential particulars prescribed under service tax law is sufficient to serve as a consignment note for Goods Transport Agency services. Consequently, the service tax demand and penalty imposed under the Finance Act, 1994 were set aside, relieving logistics providers of the tax liability.

CESTAT ruled that an appeal lodged with an incorrect customs office does not lapse under the Limitation Act, allowing the appellant to pursue the refund of duty paid under protest. This clarifies that procedural misdirection does not defeat a taxpayer’s right to challenge duty assessments.

The Chennai Customs Tribunal ruled that body control modules, integrated body units and tyre-pressure-monitor systems are to be classified under heading 9032 as automatic regulating apparatus, not under heading 8708 as vehicle parts. Consequently, importers can claim the lower concessional duty rates prescribed for 9032. The holding benefits manufacturers and importers of automotive ECUs.

CESTAT set aside the suspension of Capricorn Logistics’ customs broker licence, holding that the authority erred by not granting the statutorily required 15-day hearing under Regulation 16(2) of the 2018 Customs Broker Licensing Regulation. The ruling reinforces procedural safeguards for all customs brokers facing licence suspension.

CESTAT set aside the open-ended suspension of International Cargo Terminal Pvt Ltd as a Customs Cargo Service Provider, holding that Regulation 11(2) of the HCCAR is a purely preventive tool and cannot be imposed without a fixed time limit. Customs authorities must now specify a clear duration for any suspension, impacting all CCSPs.

The ITAT ruled that money spent on rebuilding an uninhabitable house can be treated as part of the purchase cost of a new residential property under Section 54F. This expands the pool of deductible expenses, allowing sellers of capital assets to claim a larger exemption on capital gains. Home-buyers and investors reinvesting sale proceeds in residential housing benefit.

CESTAT quashed a Rs 22.84 crore service tax demand against HCL Infosystems, holding that the services do not fall within the negative-list taxable categories and are not deemed sales or advertising agency services. The ruling narrows the tax base under the negative-list regime, benefitting IT service providers offering consulting, maintenance and related services.

An assessment order issued under Section 148 after the assessee’s death is deemed void from the outset, rendering the notice ineffective. This ruling bars revenue authorities from reopening assessments of deceased taxpayers without proper procedural basis, protecting legal heirs from unwarranted tax demands.

The ITAT Delhi ruled that foreign shares held as a nominee are not taxable in the assessee’s hands, and any Section 10(1) notice must expressly state the relevant financial year. This clarifies that undisclosed foreign nominee assets escape tax liability unless properly disclosed, guiding tax practitioners and assessees with such holdings.

The NCLAT held that, under Section 60(5) of the IBC, the adjudicating authority can issue personal directions to suspended directors of a debtor to locate and recover leased electric vehicles. This expands the tools available to resolution professionals during a CIRP.

ITAT Delhi held that a community pre-school, despite lacking formal affiliation, meets the s.2(15) definition of charitable education under the Income Tax Act. Hence trusts operating such schools can secure registration under sections 12AB and 80G for tax exemptions. The decision expands eligibility for early-childhood NGOs.

CESTAT ruled that the imported glow-plug control unit is a component of the glow plug and must be classified under heading 8511 9000 of the Customs Tariff, not under 9032 8990. The order upholds the normal-period demand and sets aside the Section 114A penalty. Importers of automotive ignition parts will now attract the 7.5% basic customs duty and IGST.

The ITAT ruled that a reassessment order issued after a court-ordered stay is lifted falls outside the two-year limitation of Section 153(2), rendering the addition of Rs 18.16 crore invalid. This protects taxpayers from belated reassessments once a stay is removed.

The ITAT Delhi held that commission income from accommodation entries must be taxed at a reasonable rate of 0.15% of total credits, rejecting the arbitrary 3% estimate. It also ruled that a reassessment notice under Section 148 is invalid without prior approval from the specified authority under Section 151(ii), protecting assessees from procedural lapses.

The ITAT Jodhpur set aside the CIT(E)’s refusal to register a charitable trust under Section 12AB, ruling that the absence of a dissolution clause and alleged Section 13(1)(b) violations do not prevent registration. This clarifies that such procedural deficiencies are not fatal at the grant stage, benefitting existing and prospective charitable trusts seeking tax-exempt status.

The tribunal ruled that imported spares and accessories used for modernising coke-oven plants fall within the definition of capital goods under Notification 104/2009, entitling the importer to SHIS duty credit. This interpretation overturns the earlier duty demand of Rs 1.30 million and benefits exporters-turn-importers seeking capital-goods exemptions.

ITAT Kolkata ruled the Section 148 reassessment notice for AY 2015-16 was barred by Section 149(1)(b) and set aside the ₹20.04 crore share-capital addition treated as unexplained cash credit. The decision protects taxpayers from reassessment notices served outside the statutory limitation period.

The tribunal quashed a Rs 89.13 lakh service tax demand, holding that royalty payable under a mining lease granted before 1 April 2016 falls outside the service tax net. It also ruled that the extended limitation period cannot be invoked, benefiting entities with pre-2016 mining assignments.

The Jaipur ITAT approved condonation of a 1038-day filing delay and granted a complete exemption of Rs 9,95,670 leave encashment under Sec 10(10AA). Taxpayers with delayed appeals can thus retain full leave-encashment benefits when the tribunal condones the delay.

The ITAT held that Arcadis N.V.’s headquarters support fees and IT recharge amounts fail the ‘make-available’ test in Article 12 of the India-Netherlands DTAA, so they are not taxable as royalty. The ruling narrows the treaty’s royalty provision to genuine technical knowledge transfers, affecting multinationals receiving similar support fees from Indian subsidiaries.

NCLAT ruled that a contribution order under Section 14 of the IBC can be imposed without a prior Section 66 finding, and that a Section 74 direction is only a reference now rendered moot by amendment. This means directors and resolution professionals may be liable for contributions during the moratorium even absent a default finding.

CESTAT ruled that manufacturers can claim CENVAT credit on duty-paid inputs sourced from units exempt under Notification 01/2010-CE, even for periods before the Rule 12 amendment. The tribunal also rejected the revenue's attempt to invoke an extended limitation period, safeguarding businesses from retroactive credit denial.