Tribunals and Commissions judgments

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.

The Jaipur ITAT ruled that the word ‘and’ in Section 147 operates conjunctively, so an Assessing Officer can only reopen assessment for income already identified as escaped, not for any other income. This narrows reassessment powers and shields taxpayers from unexpected additions. The ruling applies to all cases invoking Section 147 nationwide.

ITAT Panaji quashed the 29 July 2022 Section 148 notice as time-barred under Section 149(1)(a), setting aside assessments for AY 2016-17 and 2017-18. The tribunal held that reassessment cannot proceed when the three-year limitation expires and the monetary threshold is below Rs 50 lakh, applying the Ganesh Dass Khanna test. Taxpayers gain protection from stale reassessment notices.

The Eastern Zonal Bench of CESTAT set aside Rs 1 lakh penalties on a customs broker and its G-Card holder, holding that liability under Sec 112(a)(ii) requires proof of prior knowledge of the mis-declaration. The decision limits customs authorities from penalising intermediaries absent such knowledge, affecting all licensed brokers and G-Card holders.

The National Green Tribunal ordered the state to eliminate the remaining 72 illegal structures on the Bhoj wetland, officially demarcate its protected area and stop untreated discharges. This compels all government agencies to enforce the wetland rules, safeguarding the ecosystem and ensuring compliance by local residents and developers.

The tribunal set aside the Commissioner’s order revoking PBN Logistics’ customs-broker licence and forfeiting its security deposit because no offence report under Regulation 17 of the Customs Brokers Licensing Regulations 2018 was produced. The ruling mandates that any licence cancellation must be supported by a duly recorded offence report, safeguarding brokers from arbitrary action.

The Delhi ITAT partially upheld WSP Consultants’ appeal, directing the assessing officer to incorporate functional comparables and adjust working-capital for AY 2021-22, while striking out firms lacking comparable functions. This refines peer-selection under Rule 10B(2) for similar transfer-pricing cases.

CESTAT confirmed nicotine sulphate is correctly placed in tariff heading CTH 2939 and held that the revenue’s extended-period demand for differential duty, interest and penalty is barred by the limitation period. Consequently, the appellant’s duty liability and related-party undervaluation claim were dismissed, benefiting manufacturers and exporters of the chemical.

The Delhi ITAT ruled that a charitable trust’s failure to register its deed does not invalidate its claim to Section 12A tax exemption. This clarifies that registration is not a statutory prerequisite, benefiting existing and prospective charitable trusts seeking exemption.

CESTAT ruled that the freight concession granted to UltraTech under the LWIS does not constitute consideration for a taxable service, overturning service tax, interest and penalty demands. Consequently, entities receiving similar concessions are exempt from service tax liability.

CESTAT ruled that fees for coaching classes preparing students for CA-CPT, ICWA-Foundation and 10+2 examinations fall within the exemption granted by Notification 33/2011-ST, overturning a Rs 35.4 lakh service-tax demand. The decision benefits all commercial training centres offering recognised qualification coaching.

ITAT Delhi upholds deduction for warranty provisions as accrued liability under Section 37(1) and full R&D expenditure under Section 35(2AB), citing Rotork Controls precedent. Ruling benefits corporates claiming contingent liabilities and innovation expenses.

NCLAT upheld NCLT’s ruling that a 100% share transfer and property transfer were illegal for non-compliance with mandatory deed requirements under Section 56(1) Companies Act. The decision underscores the strict procedural compliance needed for share transfers to be legally valid.

CESTAT Chandigarh sets aside service tax demand invoking extended limitation period, ruling that third-party data alone is insufficient to prove suppression or willful default. The decision clarifies that fraud or intentional suppression must be established with concrete evidence to justify the extended period under service tax laws.

The National Green Tribunal invoked suo motu jurisdiction to order an inquiry into the illegal felling of thousands of trees in the Ratapani Tiger Reserve, including teak and saag. State agencies, including the Revenue Department and Forest authorities, have been directed to submit replies within six weeks, with impleadment of key officials mandated.

National Green Tribunal’s Central Zone Bench directs Indore Municipal Corporation to enforce a 29-point action plan under CPHEEO guidelines to address municipal water contamination in Indore, mandating pipeline replacement, GIS mapping, and third-party audits. The order follows a cholera outbreak linked to contaminated domestic water supply, emphasizing systemic infrastructure compliance and public health safeguards.

CESTAT Chandigarh sets aside a service tax demand of Rs. 9,22,761 after finding the extended limitation period was invoked without proving fraud or suppression of facts. The ruling clarifies that mere discrepancies in income tax and service tax returns do not suffice to justify extended period demands under Section 73(1) of the Finance Act.

ITAT Amritsar upheld the rejection of books of accounts in the liquor trade but set aside arbitrary profit additions, modifying the net profit estimation to 0.55% on net sales. The ruling emphasizes the need for stronger grounds to reject audited accounts in regulated sectors like liquor distribution.

CESTAT Hyderabad rules that Service Tax paid under reverse charge must be governed by Rule 9(1)(e) of Cenvat Credit Rules, not Rule 9(1)(bb). Sets aside denial of Rs. 2.42 crore refund, directing recomputation of refund claims for exporters. Impacts businesses claiming Cenvat credit on reverse charge payments prior to 2011.

ITAT Pune quashes reassessment notice u/s 148 for AY 2015-16 after harmonious construction of Section 149(1) provisos. The ruling underscores strict compliance with limitation periods in reassessment proceedings, impacting taxpayers facing similar notices.

ITAT Delhi quashes reassessment for AY 2012-13 after finding the prescribed authority’s Section 151 approval lacked independent application of mind. Ruling reaffirms that mechanical approvals violate judicial discipline and render reopening proceedings invalid under CIT vs. S. Goyanka Lime and Chemical Pvt. Ltd. (2015).

National Green Tribunal, Western Zone Bench, Pune upheld joint CRZ and environmental clearance for Jawaharlal Nehru Port Trust's container berth widening project. The ruling emphasizes strict compliance with mitigation measures and safeguards for marine ecology, setting a precedent for port expansion under CRZ norms.

Ahmedabad ITAT permits deduction of interest on borrowings acquired via slump sale under Section 36(1)(iii), rejecting Revenue's colourable device and res judicata challenges. Ruling clarifies allowability where assets are put to use, benefiting corporate taxpayers in asset acquisitions.

ITAT Jaipur rules that penalties in search cases must be levied under Section 271AAB of the Income Tax Act, 1961, not Section 271(1)(c). The ruling clarifies the correct penalty framework for undisclosed income detected during search assessments, impacting taxpayers facing similar proceedings.