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Tag: #TaxLitigations

  • Exempted from SWS on Imports Where Basic Customs Duty is Discharged via MEIS/SEIS Scrips

    Exempted from SWS on Imports Where Basic Customs Duty is Discharged via MEIS/SEIS Scrips

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 21.08.2026

    Exempted from SWS on Imports Where Basic Customs Duty is Discharged via MEIS/SEIS Scrips

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Hyderabad recently delivered a significant judgment in a series of appeals filed by Emami Agrotech Ltd against the Customs Department. The case revolved around the levy of Social Welfare Surcharge (SWS) on imports where the Basic Customs Duty (BCD) was exempted under specific government notifications and paid using duty-credit scrips under the MEIS/SEIS schemes.

    Background of the Case

    Emami Agrotech Ltd, a major player in the edible oil industry, imports crude edible oil for refining at its Krishnapatnam port facility. Between July and September 2019, the company imported 13 consignments and claimed exemption from BCD under Notification Nos. 24/2015-CUS and 25/2015-CUS. These notifications allow importers to discharge BCD liability by debiting MEIS/SEIS duty-credit scrips instead of paying in cash.

    However, while processing the imports, customs authorities also levied SWS at 10% of the BCD amount, even though the BCD itself was not paid in cash but debited from the scrips. Emami Agrotech challenged this, arguing that since BCD was exempted and not actually collected, SWS should not be applicable.

    Legal Arguments

    Appellant’s Stand (Emami Agrotech Ltd)

    1. No Actual Collection of BCD: The company argued that SWS, as per Section 110 of the Finance Act, 2018, is calculated as a percentage of customs duties actually levied and collected. Since BCD was exempted and not collected in cash, the base for SWS was nil.
    2. Support from Judicial Precedents: Emami cited several favorable judgments, including its own previous cases and Supreme Court rulings, emphasizing that ‘collection’ means actual realization of duty by the exchequer.
    3. CBIC Circular Support: The company relied on CBIC Circular No. 03/2022-CUS, which clarified that SWS is nil when the underlying customs duty is zero, even if SWS is not separately exempted.
    4. Retrospective Application of Beneficial Circulars: Emami argued that beneficial circulars should apply retrospectively, supporting their claim for refund or re-credit of SWS.

    Respondent’s Stand (Customs Department)

    1. Duty Discharged via Scrips: The department maintained that debiting BCD in MEIS/SEIS scrips is an alternative method of payment and constitutes actual discharge of duty, forming a valid base for SWS.
    2. Strict Interpretation of Exemptions: The department argued that since the exemption notifications did not specifically mention SWS, it should still be levied.
    3. Reliance on Other Judicial Decisions: The department cited cases where payment through scrips was treated as duty discharge and where exemptions were interpreted strictly in favor of the revenue.

    Tribunal’s Analysis and Decision

    The CESTAT Hyderabad bench examined the statutory provisions, relevant notifications, and judicial precedents. Key findings include:

    1. Nature of SWS: SWS is not an independent duty but a surcharge calculated as a percentage of customs duties actually levied and collected. If the base (BCD) is nil due to exemption, SWS is also nil.
    2. Debit in Scrips vs. Actual Collection: Debiting BCD in duty-credit scrips under an exemption scheme does not amount to actual collection by the government. The exemption notifications clearly grant full exemption from BCD, and the mechanism of debit is just a procedural aspect.
    3. CBIC Circular is Clarificatory: The tribunal accepted that the CBIC circular, being clarificatory and beneficial, applies to past transactions and supports the appellant’s case.
    4. Judicial Precedents: The tribunal followed its own previous decisions and those of higher courts, which consistently held that SWS is not payable when BCD is exempted under MEIS/SEIS schemes.
    5. Distinguishing Revenue’s Cited Cases: The tribunal found that the cases cited by the department were factually and legally distinguishable and did not apply to the present issue.

    Final Outcome

    The CESTAT set aside the order of the Commissioner (Appeals), allowed all 13 appeals filed by Emami Agrotech Ltd, and directed consequential relief, including refund or re-credit of SWS with applicable interest.

    Implications of the Ruling

    • For Importers: This judgment provides clarity and relief to importers using MEIS/SEIS scrips for BCD payment, confirming that SWS is not payable when BCD is exempted.
    • For Customs Administration: The ruling reinforces the need for strict adherence to the statutory base for SWS and the application of beneficial circulars retrospectively.
    • For Future Disputes: The decision sets a strong precedent for similar cases, ensuring uniformity in the treatment of SWS on exempted imports.

    Conclusion

    The CESTAT Hyderabad’s decision in favor of Emami Agrotech Ltd marks a significant development in customs law, particularly regarding the computation of SWS on imports exempted from BCD under MEIS/SEIS schemes. Importers can now confidently claim exemption from SWS in such scenarios, backed by clear legal and judicial support.

    Connected Matter

    Supreme Court on Vend Fee and Excise Duty on Industrial Alcohol in Uttar Pradesh

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    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Hyderabad

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  • Bombay High Court on Interim Relief in Transport Contract Termination

    Bombay High Court on Interim Relief in Transport Contract Termination

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 21.08.2026

    Bombay High Court on Interim Relief in Transport Contract Termination

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    A recent judgment by the Bombay High Court has brought clarity to the legal landscape surrounding the termination of transport contracts by public sector undertakings, specifically in the context of LPG transportation tenders. The case involved multiple arbitration petitions filed by transport contractors against Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL), challenging the termination of their contracts and the forfeiture of caution money.

    Background of the Dispute

    The dispute arose from a tender issued by BPCL for the transportation of bulk LPG in Tamil Nadu. The tender allowed participation by contractors who had trucks under an Agreement to Sell (ATS), with a requirement to transfer ownership and the PESO (Petroleum and Explosives Safety Organisation) licence within 120 days of the Letter of Intent (LOI). Failure to comply could result in penal actions, including termination and forfeiture of caution money.

    Several contractors, including P. Perumal Transports, faced termination after minor delays in transferring the PESO licence, despite having completed the transfer of the Registration Certificate within the stipulated period. The contractors argued that the delay was minimal and that BPCL’s actions were disproportionate, especially since the company continued to allot loads even after the deadline.

    Key Legal Issues

    1. Nature of the Contract: Was the contract determinable, allowing BPCL to terminate at will, or did it require strict adherence to procedural fairness and proportionality?
    2. Compliance with Deadlines: Did a short delay in transferring the PESO licence justify termination and forfeiture of caution money?
    3. Grant of Interim Relief: Should the court grant interim relief to restore the contract and prevent forfeiture of caution money pending arbitration?

    Arguments Presented

    Petitioners (Transport Contractors)

    • The contractors argued that the termination was disproportionate to the minor procedural lapse.
    • They emphasized that the essential requirements (ownership and licence transfer) were substantially complied with.
    • The continued allotment of loads after the deadline indicated that BPCL did not treat the time limits as strictly mandatory.
    • Loss of business, reputation, and the limited operational life of specialized LPG trucks constituted irreparable harm.

    Respondents (BPCL/IOCL)

    • BPCL maintained that the contract was determinable and that the right to terminate was clearly reserved in the agreement.
    • The Corrigendum and General Conditions of Contract formed an integral part of the agreement, and the timeline for compliance was non-negotiable.
    • The contractors were aware of the consequences of non-compliance, having executed affidavits to that effect.

    Court’s Analysis and Findings

    • The Court recognized that the Corrigendum provided a four-month period for compliance, with penal actions for non-compliance, but did not mandate automatic termination.
    • The delay in transferring the PESO licence was only four days, and the licence was transferred seven days after the deadline.
    • The Court noted that while the delay was short, the contract expressly required compliance within the stipulated period, and the contractors had accepted these terms.
    • The contract contained a clause allowing BPCL to terminate with 30 days’ notice without assigning any reason, making it determinable by nature.
    • The Court held that granting interim relief to restore the contract would, in effect, amount to specific performance of a determinable contract, which is not permissible under Section 14(d) of the Specific Relief Act.
    • However, the Court directed BPCL to maintain the caution money in a separate account and not to appropriate it until the arbitral tribunal decides the dispute.

    Implications of the Judgment

    1. Strict Enforcement of Contractual Deadlines: Contractors must strictly adhere to timelines for compliance with tender conditions, especially when dealing with public sector undertakings.
    2. Determinable Contracts: Contracts that allow termination without cause are considered determinable, limiting the scope for courts to grant interim relief restoring such contracts.
    3. Proportionality and Discretion: While minor procedural lapses may not always justify termination, the existence of a determinable contract clause gives significant discretion to the principal (BPCL/IOCL).
    4. Preservation of Disputed Sums: Courts may protect caution money or similar sums pending arbitration, ensuring that parties are not prejudiced before the final resolution.

    Conclusion

    This judgment underscores the importance of compliance with contractual terms and the limited scope for judicial intervention in determinable contracts. While the Court showed sensitivity to the contractors’ predicament, it ultimately upheld the contractual right of BPCL to terminate, subject to the preservation of caution money until arbitration.

    The decision serves as a crucial precedent for contractors and public sector undertakings alike, emphasizing the need for clarity, fairness, and adherence to agreed timelines in commercial contracts.

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    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Bombay High Court

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  • Independence, Impartiality, and Equality in Indian Arbitration

    Independence, Impartiality, and Equality in Indian Arbitration

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 20.08.2026

    Independence, Impartiality, and Equality in Indian Arbitration

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Supreme Court of India’s recent Constitution Bench judgment in the case involving the Central Organisation for Railway Electrification (CORE) and M/s ECI SPIC SMO MCML (JV) has fundamentally clarified the principles governing the appointment of arbitrators under Indian law. This article provides a comprehensive overview of the judgment, its legal context, and its implications for arbitration in India, especially in public-private contracts.

    Background: The Core Issues

    The judgment addresses three pivotal questions:

    1. Is it lawful for a party with an interest in a dispute to unilaterally appoint a sole arbitrator or curate a panel from which the other party must select?
    2. Does the principle of equal treatment apply at the stage of appointing arbitrators?
    3. Are such appointment processes in public-private contracts violative of Article 14 of the Constitution (equality before law)?

    Legal Framework: Party Autonomy vs. Mandatory Safeguards

    • Party Autonomy: The Arbitration and Conciliation Act, 1996 (the Arbitration Act) gives parties significant freedom to design their arbitration process, including the appointment of arbitrators.
    • Mandatory Provisions: However, this autonomy is subject to non-derogable principles such as equality of parties (Section 18), independence and impartiality of arbitrators (Section 12), and fairness in procedure.
    • 2015 Amendment: Section 12(5) was introduced, making anyone with certain relationships to the parties ineligible to be appointed as arbitrator, unless both parties expressly waive this after a dispute arises.

    Key Principles Established by the Judgment

    1. Equality at All Stages

    • The principle of equal treatment (Section 18) applies not just during the arbitration proceedings but also at the stage of appointing arbitrators.
    • Any process that gives one party a dominant or exclusive role in appointing arbitrators is inherently unequal and raises doubts about impartiality.

    2. Unilateral Appointments and Curated Panels

    • Clauses allowing one party to unilaterally appoint a sole arbitrator or require the other party to select from a panel curated by the first party are generally invalid.
    • Such arrangements violate both the equality principle and the requirement for independence and impartiality.
    • In public-private contracts, these clauses are also violative of Article 14 of the Constitution.

    3. Public Policy and Unconscionability

    • Arbitration agreements must not be unconscionable or contrary to public policy.
    • The court reaffirmed that contracts induced by undue influence or that restrict access to justice are void.

    4. Judicial Intervention: Minimal but Decisive

    • Courts should intervene only when necessary, such as when the agreed procedure fails or is manifestly unfair.
    • The court’s role is to ensure the appointment of an independent and impartial tribunal, not to routinely override party autonomy.

    5. Prospective Application

    • The new law applies prospectively to arbitrator appointments made after the date of the judgment, especially for three-member tribunals.

    Practical Implications

    • For Government and PSUs: While maintaining panels of arbitrators is permitted, mandating the other party to select only from such panels is not.
    • For Private Parties: Both parties must have an equal say in the appointment process. Any clause that restricts this can be challenged.
    • For Ongoing Arbitrations: The law applies prospectively, so existing tribunals are not automatically invalidated.

    Comparative and International Perspective

    • The judgment aligns Indian law with international best practices, where party autonomy is respected but not at the cost of fairness and impartiality.
    • Many foreign jurisdictions also prohibit unilateral appointments or provide for court intervention when the process is unfair.

    Conclusion

    This Supreme Court judgment marks a significant step in strengthening the integrity of arbitration in India. By reinforcing the principles of equality, independence, and impartiality, it ensures that arbitration remains a credible and effective alternative to traditional litigation, especially in contracts involving the government or public sector undertakings.

    Connected Matter

    Supreme Court’s Examination of Pre-Deposit Clauses in Government Arbitration Contracts

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    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Supreme Court

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  • Kerala High Court on Enforcement of RERA Recovery and Property Attachment

    Kerala High Court on Enforcement of RERA Recovery and Property Attachment

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 20.08.2026

    Kerala High Court on Enforcement of RERA Recovery and Property Attachment

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    A recent judgment by the High Court of Kerala has brought clarity to the process of property attachment and recovery proceedings in real estate disputes. The case involved P.A. Jihas, Managing Director of Jewel Homes Pvt. Ltd., and several respondents, including the Kerala Real Estate Regulatory Authority and private individuals. This article provides a detailed overview of the case, the legal journey, and the implications of the court’s decision.

    Background of the Case

    The dispute originated from a complaint filed under the Real Estate (Regulation & Development) Act, 2016 (RERA) by a private respondent against Jewel Homes Pvt. Ltd. The Adjudicating Authority, after considering the complaint, ordered the company to refund β‚Ή25,00,000 with interest at 14.05% per annum. This order set off a series of appeals and legal proceedings:

    1. Initial Order (2021): The Adjudicating Authority directed Jewel Homes Pvt. Ltd. to refund the amount with interest.
    2. First Appeal (2022): The Kerala Real Estate Appellate Tribunal remanded the matter for recalculation of compensation and interest.
    3. Revised Order (2024): The Adjudicating Authority reaffirmed the payment of β‚Ή25,00,000 in instalments with interest.
    4. Second Appeal (2025): Jewel Homes appealed again, but the Tribunal dismissed the appeal due to delay.
    5. High Court Proceedings (2026): The matter reached the High Court, which issued the final judgment.

    Key Issues Addressed

    • Adjustment of Amounts Paid: The appellants claimed that β‚Ή12.8 lakhs had already been received by the complainants, which was not considered in the recovery proceedings.
    • Calculation of Interest: The appellants sought reworking of interest for amounts already deposited.
    • Execution of Recovery: The court clarified the process for calculating the final amount due and the role of the Recovery Officer.

    Highlights of the High Court Judgment

    1. Opportunity to Adjust Payments: The court allowed the appellants to raise the issue of prior payments before the Adjudicating Authority during execution.
    2. Stay on Attachment: An unconditional stay of the order of attachment was granted for one week, provided β‚Ή12.20 lakhs was deposited within that period.
    3. Final Calculation by Recovery Officer: The Recovery Officer was directed to determine the actual amount due, after hearing both parties, within eight weeks.
    4. Restriction on Property Dealings: The first appellant was barred from dealing with or encumbering the property until the full adjudicated amount was paid.
    5. Enforcement of Attachment: If the required deposit was not made within the stipulated time, the order of attachment would be enforced.

    Legal and Practical Implications

    • Due Process in Recovery: The judgment reinforces the importance of due process and fair hearing in recovery proceedings under RERA.
    • Protection for Homebuyers: The decision upholds the rights of homebuyers to receive refunds and interest as adjudicated by regulatory authorities.
    • Obligations for Builders: Builders must comply with orders promptly or risk attachment and restrictions on their properties.

    Conclusion

    This Kerala High Court judgment serves as a significant precedent for real estate disputes, emphasizing transparency, procedural fairness, and the enforcement of regulatory orders. Stakeholders in the real estate sector should take note of the legal obligations and remedies highlighted in this case.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Kerala High Court

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  • Interest for Delayed Refund of Pre-Deposit in Customs

    Interest for Delayed Refund of Pre-Deposit in Customs

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 20.08.2026

    Interest for Delayed Refund of Pre-Deposit in Customs

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    A recent judgment by the Calcutta High Court in the case of Rajendra Kumar Jain vs. Commissioner of Customs (Port) Kolkata & Anr. has clarified the legal position regarding the rate of interest payable on delayed refunds of pre-deposits in customs matters. This article provides a detailed overview of the case, the legal arguments, and the implications for taxpayers and authorities.

    Background of the Case

    • Seizure and Pre-Deposit: On August 20, 1998, authorities seized Rs. 9,93,200 from Rajendra Kumar Jain, alleging it was the sale proceeds of goods liable for confiscation. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) later directed that this amount be treated as a pre-deposit under Section 129E of the Customs Act, 1962.
    • Appeal and Refund: After a successful appeal, the confiscation and penalty were set aside, making the pre-deposit refundable. However, the refund was delayed, prompting the appellant to seek judicial intervention.
    • Interest Dispute: The refund was eventually sanctioned with interest at 6% per annum. Dissatisfied, the appellant sought a higher rate, referencing Supreme Court and High Court precedents where 12% interest was awarded in similar circumstances.

    Legal Issues and Arguments

    Substantial Question of Law

    The core legal question was:

    “Whether the Learned Tribunal is justified in law in not allowing the interest at the rate of 12 per cent per annum on the refund amount of pre-deposit?”

    Appellant’s Arguments

    1. No Statutory Rate Pre-2008: At the time of the events, there was no statutory provision specifying the rate of interest for delayed refunds of pre-deposits.
    2. Supreme Court Precedent: In Commissioner of Central Excise, Hyderabad v. ITC Limited (2005), the Supreme Court awarded 12% interest on delayed refunds.
    3. High Court Consistency: The Calcutta High Court in Madura Coats Private Limited v. Commissioner of Central Excise, Kolkata – IV (2012) also granted 12% interest in a similar context.
    4. Amendment Not Retrospective: The amendment to Section 35FF of the Central Excise Act (effective May 10, 2008) and subsequent notifications fixing interest at 6% per annum do not apply retrospectively.

    Respondents’ Arguments

    • The respondents contended that the seized amount was not originally a pre-deposit and that the applicable rate should be 6% as per later notifications.
    • They acknowledged the absence of a statutory rate during the relevant period but argued for the lower rate based on subsequent government notifications.

    Court’s Analysis and Findings

    • Undisputed Facts: The Court noted that the amount was treated as a pre-deposit by CESTAT and that there was no statutory rate of interest for delayed refunds at the relevant time.
    • Precedent Application: The Court relied on the Supreme Court’s decision in ITC Limited and its own earlier decision in Madura Coats, both of which awarded 12% interest in the absence of a statutory rate.
    • Notification Not Retrospective: The notification fixing 6% interest (dated August 12, 2014) was held not to apply to periods before its issuance.

    Final Judgment

    The Calcutta High Court set aside the lower tribunal’s order and held that:

    • The appellant is entitled to interest at 12% per annum on the delayed refund of the pre-deposit.
    • The interest must be paid within one month from the date of production of the certified copy of the order.

    Implications of the Judgment

    1. Clarity for Taxpayers: Taxpayers whose refunds of pre-deposits were delayed before the statutory rate was notified can claim interest at 12% per annum, based on judicial precedent.
    2. Guidance for Authorities: Customs authorities must follow judicial directions and precedents in similar cases, especially for periods before statutory rates were notified.
    3. Legal Certainty: The judgment reinforces the principle that, in the absence of a statutory provision, courts may rely on precedent to ensure fairness and parity.

    Conclusion

    This ruling by the Calcutta High Court is a significant development in customs jurisprudence, ensuring that taxpayers are fairly compensated for delayed refunds of pre-deposits. It underscores the importance of judicial precedent in filling legislative gaps and provides clear guidance for both taxpayers and authorities in similar disputes.

    Connected Matter

    CESTAT Kolkata Orders 12% Interest on Delayed Customs Refund

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    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Calcutta High Court

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  • CESTAT Mumbai Overturns Customs Penalty: Brass Scrap Classification and Valuation

    CESTAT Mumbai Overturns Customs Penalty: Brass Scrap Classification and Valuation

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 20.08.2026

    CESTAT Mumbai Overturns Customs Penalty: Brass Scrap Classification and Valuation

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Mumbai recently delivered a significant order in the case of A.P. Trading Company versus the Commissioner of Customs (Import), Nhava Sheva. This case revolved around the classification, valuation, and confiscation of imported brass scrap, raising important questions about customs procedures, the interpretation of tariff entries, and the evidentiary standards for mis-declaration.

    Background of the Case

    A.P. Trading Company, based in Bhiwandi, Maharashtra, is engaged in the import and sale of brass scrap. In May 2013, the company imported a consignment described as ‘Brass Scrap Pallu as per ISRI’ from a UAE supplier. The goods were declared under Customs Tariff Item (CTI) 7404 0022, with a declared value of Rs. 62,27,262. However, upon examination, customs officers found that only 25% of the consignment was brass scrap, while 75% consisted of secondary defective brass pipes, which they considered serviceable and not scrap.

    Customs Department’s Actions

    The customs authorities alleged mis-declaration, rejected the transaction value, and re-determined the value based on contemporary prices and London Metal Exchange (LME) rates. They imposed a differential duty of Rs. 5,25,460, confiscated the goods (allowing release on payment of a Rs. 1,50,000 redemption fine), and levied a penalty of Rs. 75,000 on the importer. The company appealed, but the Commissioner (Appeals) upheld the original order, prompting a further appeal to the CESTAT.

    Key Legal Issues

    The Tribunal identified two main issues:

    1. Whether the re-determination/enhancement of the assessable value and duty demand was sustainable.
    2. Whether the imposition of redemption fine and penalty was legally justified.

    Arguments by the Appellant

    • The importer argued that the entire consignment was ordered as per ISRI specifications for brass scrap, and the contract, invoice, and packing list supported this.
    • A Chartered Engineer’s report stated the goods were rejected/discarded heat exchanger/boiler tubes, not serviceable, and thus qualified as scrap.
    • The customs officers’ contrary assessment was based on visual inspection, not expert analysis.
    • The department failed to provide evidence of contemporaneous prices or identical goods to justify value enhancement under Rule 5 of the Customs Valuation Rules, 2007.

    Tribunal’s Analysis and Findings

    1. Classification and Valuation

    • The Tribunal noted that ISRI specifications and customs tariff entries cover a wide range of brass scrap types, including ‘pallu’, ‘ebony’, and ‘melon’.
    • The contract and documentation clearly indicated the goods were ordered as brass scrap.
    • There was a contradiction between the customs officers’ assessment and the Chartered Engineer’s expert report regarding the serviceability and nature of the goods.
    • The customs tariff and ISRI guidelines do not prescribe strict size or length limits for brass scrap unless mutually agreed by buyer and seller.

    2. Mis-declaration and Penalty

    • The Tribunal found no concrete evidence of mis-declaration. The department relied solely on visual inspection, without expert corroboration or documentary proof of serviceability.
    • Precedents (e.g., Prateek Traders v. Commissioner of Customs, Ahmedabad) establish that visual inspection alone is insufficient to classify goods as serviceable when expert opinion suggests otherwise.
    • The request for mutilation by the importer, if accepted, would have further supported the claim that the goods were indeed scrap.

    3. Procedural Lapses

    • The authorities did not adequately discuss the grounds for reclassification or provide details of contemporaneous values for identical goods.
    • There was no evidence of additional consideration or flow-back to justify value enhancement.

    Final Order and Implications

    The CESTAT set aside the impugned order, ruling in favor of A.P. Trading Company. The Tribunal held that the duty demand, fine, and penalty were unsustainable due to lack of evidence and improper procedure. This decision underscores the importance of:

    • Relying on expert reports over mere visual inspection for classification disputes.
    • Providing concrete evidence when alleging mis-declaration or enhancing value.
    • Adhering to procedural fairness and transparency in customs adjudication.

    Conclusion

    The A.P. Trading Company case serves as a crucial precedent for importers and customs authorities alike. It highlights the need for objective, evidence-based assessments and reinforces the legal protections available to importers against arbitrary or unsupported customs actions. Importers should ensure thorough documentation and, when necessary, seek expert opinions to support their case in classification and valuation disputes.

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    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Mumbai

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  • Madras High Court Clarifies RERA Registration Exemption and Jurisdiction Over Unregistered Projects

    Madras High Court Clarifies RERA Registration Exemption and Jurisdiction Over Unregistered Projects

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.08.2026

    Madras High Court Clarifies RERA Registration Exemption and Jurisdiction Over Unregistered Projects

    This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .  

    A recent judgment by the Madras High Court in the case of Devinarayan Housing and Property Developments Private Limited vs. Manu Karan & Others has clarified crucial aspects of the Real Estate (Regulation and Development) Act, 2016 (RERA) regarding project registration and the rights of home buyers in unregistered projects. This article provides a detailed analysis of the case, its background, legal questions, and the implications for developers and home buyers.

    Case Background

    • Parties Involved:
      • Appellants: Devinarayan Housing and Property Developments Pvt. Ltd. (developers)
      • Respondents: Manu Karan and Archana Karan (home buyers)
    • Project Details:
      • Sale and construction agreement dated 20.07.2017 for an apartment in ‘Devi Narayan’s Saisagar’, Chennai.
      • Apartment cost: Rs. 3.3 crore; buyers paid Rs. 3.06 crore.
      • Dispute arose due to non-handover of possession and refund issues.

    Legal Proceedings Timeline

    1. Home Buyers’ Complaints:
      • Filed for compensation and execution of sale deed before RERA authorities.
    2. Developers’ Defense:
      • Claimed project was completed before RERA came into force and thus exempt from registration.
    3. Adjudicating Officer’s Order:
      • Directed developers to pay compensation to buyers.
    4. Appeals:
      • Developers appealed to the Tamil Nadu Real Estate Appellate Tribunal (TNREAT), which upheld the compensation order.
      • Buyers appealed against the dismissal of their complaint for sale deed registration; TNREAT ruled in their favor.
    5. High Court Appeal:
      • Developers challenged TNREAT’s decisions in the Madras High Court.

    Key Legal Questions Addressed

    1. Does RERA Registration Apply?

    • Section 3(2)(a) of RERA: Exempts projects from registration if either:
      • The land area does not exceed 500 sq. meters, or
      • The number of apartments does not exceed eight (inclusive of all phases).
    • Court’s Interpretation:
      • The word “or” is to be read disjunctively, not conjunctively.
      • If a project meets either condition, it is exempt from registration.
      • In this case, although the land exceeded 500 sq. meters, only eight apartments were constructed, qualifying for exemption.

    2. Can Home Buyers of Unregistered Projects Seek Relief Under RERA?

    • Section 31 of RERA: Allows aggrieved persons to file complaints for violations of the Act.
    • Court’s Ruling:
      • RERA authorities have jurisdiction only over registered projects.
      • Home buyers of unregistered projects cannot seek remedies under RERA.
      • Their recourse lies with civil courts or consumer forums.

    Implications of the Judgment

    For Developers

    1. Clarity on Registration Exemptions:
      • Projects with eight or fewer apartments, regardless of land size, are exempt from RERA registration.
    2. Reduced Compliance Burden:
      • Developers of small projects are not subject to RERA’s regulatory requirements.

    For Home Buyers

    1. Limited RERA Protection:
      • Buyers in unregistered projects cannot approach RERA authorities for grievances.
    2. Alternative Remedies:
      • Must seek redress through civil courts or consumer forums.

    Conclusion

    The Madras High Court’s decision provides much-needed clarity on the scope of RERA’s applicability, especially for small-scale real estate projects. While it offers relief to developers of such projects, home buyers must be aware of their limited protection under RERA and consider alternative legal avenues for dispute resolution. This ruling sets a significant precedent for future disputes involving RERA registration and the rights of allottees in unregistered projects.

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    Source: Madras High Court

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  • Supreme Court’s Examination of Pre-Deposit Clauses in Government Arbitration Contracts

    Supreme Court’s Examination of Pre-Deposit Clauses in Government Arbitration Contracts

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.08.2026

    Supreme Court’s Examination of Pre-Deposit Clauses in Government Arbitration Contracts

    This Short Article has been prepared & written by Arbitrator Shobhit Mallik. The views expressed are based on his interpretation of the law. He can be reached at his email id shobhit.Ica23@gmail.com .

    The Supreme Court of India’s recent judgment in the case of M/S Santosh Associate Private Limited vs. Haryana State Industrial and Infrastructure Development Corporation Ltd. has brought renewed attention to the constitutionality and fairness of pre-deposit clauses in government contracts. This article provides a detailed analysis of the dispute, the legal arguments, and the broader implications for arbitration and contract law in India.

    Background of the Dispute

    In 2017, Santosh Associate Pvt. Ltd. was awarded a government contract for storm water drainage works in Gurugram, Haryana. The contract included an arbitration clause (Clause 25-A(vii)) requiring contractors to deposit 10% of any claim exceeding β‚Ή1,00,000 as a security before initiating arbitration. When disputes arose over final payments after a reduction in project scope, the contractor sought arbitration without making the required deposit. The respondent objected, and both the Sole Arbitrator and the Commercial Court dismissed the contractor’s claim for non-compliance with the pre-deposit requirement.

    Key Legal Issues

    The central legal question is whether a contractual clause mandating only the contractor (and not the government entity) to make a substantial pre-deposit before arbitration is constitutional and consistent with Indian contract and arbitration law.

    Arguments by the Appellant (Contractor)

    1. Violation of Article 14 (Equality Before Law): The clause discriminates against contractors by imposing a financial burden not required of the government, violating the principle of equal treatment.
    2. No Rational Nexus: The 10% deposit does not logically serve the purpose of deterring frivolous claims, as such claims can be addressed by awarding costs at the end of arbitration.
    3. Disproportionate Burden: The required deposit is significantly higher than court fees for similar claims, making arbitration less accessible.
    4. Precedent Support: Relied on Supreme Court judgments (e.g., ICOMM Tele Ltd., Lombardi Engineering Ltd., and CORE) that struck down similar clauses as arbitrary and contrary to the objectives of arbitration.

    Arguments by the Respondent (Government Entity)

    1. Binding Precedent: Cited S.K. Jain vs. State of Haryana, where a similar refundable pre-deposit clause was upheld as reasonable and non-arbitrary.
    2. Legitimate Purpose: Argued that refundable deposits deter frivolous claims without being punitive, and are thus valid.
    3. Material Differences in Clauses: Emphasized that only clauses with punitive forfeiture or those foreclosing access to arbitration have been struck down, not refundable deposit clauses.

    Supreme Court’s Reasoning

    The Court reviewed the evolution of judicial thinking on pre-deposit clauses:

    • S.K. Jain (2009): Upheld refundable pre-deposit clauses as reasonable deterrents against frivolous claims.
    • ICOMM Tele Ltd. (2019): Struck down a clause with forfeiture provisions as arbitrary and contrary to Article 14.
    • Lombardi Engineering Ltd. (2024) & CORE (2025): Affirmed that party autonomy in contracts cannot override constitutional rights, and that excessive or one-sided pre-deposit clauses may be invalid.

    The Court noted that while it found merit in the reasoning of ICOMM Tele Ltd., it was bound by the larger bench decision in S.K. Jain unless a larger bench overruled it. The Court also highlighted the importance of ensuring that arbitration remains accessible and does not become more onerous than litigation.

    Reference to Larger Bench

    Given the conflicting precedents and the constitutional questions involved, the Supreme Court referred the following issues to a larger bench:

    1. Whether requiring only the contractor to make a pre-deposit violates the principle of equal treatment in arbitration.
    2. Whether such pre-deposit conditions discourage alternative dispute resolution and undermine its objectives.
    3. Whether these clauses are arbitrary and violate the right to sue under Article 14 and Section 28 of the Indian Contract Act.
    4. Whether refundable pre-deposit clauses are valid.
    5. Whether S.K. Jain remains a binding precedent.

    Implications for Contractors and Government Bodies

    • For Contractors: The outcome will determine whether they can be compelled to make substantial deposits before seeking arbitration, impacting access to justice and the cost-effectiveness of arbitration.
    • For Government Bodies: The decision will clarify the extent to which they can use pre-deposit clauses to deter frivolous claims without violating constitutional principles.
    • For Arbitration Law: The case will shape the balance between party autonomy in contracts and the need for fairness and equality in dispute resolution.

    Conclusion

    The Supreme Court’s referral of these issues to a larger bench underscores the significance of ensuring that arbitration remains a fair, accessible, and constitutionally compliant mechanism for resolving disputes. The final decision will have far-reaching consequences for government contracting and the future of arbitration in India.

    Connected Matter

    Independence, Impartiality, and Equality in Indian Arbitration

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    Source: Supreme Court

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  • Constitutional Limits on Bail Conditions for Foreign Nationals under the NDPS Act

    Constitutional Limits on Bail Conditions for Foreign Nationals under the NDPS Act

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.08.2026

    Constitutional Limits on Bail Conditions for Foreign Nationals under the NDPS Act

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Supreme Court of India delivered a significant order in the case of Frank Vitus v. Narcotics Control Bureau, addressing the legality and practicality of certain bail conditions imposed on foreign nationals under the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act). The judgment not only impacts the appellant, a Nigerian national, but also sets important precedents for bail jurisprudence in India, especially concerning the rights of accused foreign nationals.

    Background of the Case

    Frank Vitus, a Nigerian national, was arrested in May 2014 and prosecuted under Sections 8, 22, 23, and 29 of the NDPS Act. After several years in custody, he was granted bail in May 2022, subject to stringent conditions, including:

    1. Furnishing a certificate of assurance from the Nigerian Embassy/High Commission that he would not leave India and would appear before the trial court as required.
    2. Dropping a PIN on Google Maps to make his location available to the investigating officer.

    Vitus challenged these conditions, arguing that they were either impossible to comply with or infringed upon his fundamental rights.

    Legal Issues Considered

    The Supreme Court examined two primary issues:

    1. Whether the requirement for a certificate of assurance from the Embassy/High Commission is feasible or necessary in every case involving a foreign national.
    2. Whether the condition to drop a PIN on Google Maps violates the right to privacy under Article 21 of the Constitution.

    Analysis by the Court

    1. Certificate of Assurance from Embassy/High Commission

    • The Court noted that the precedent for this condition came from the 1994 Supreme Court Legal Aid Committee case, which was intended as a one-time direction for undertrials facing prolonged detention due to delayed trials.
    • The Court clarified that such a certificate should not be a mandatory condition in every case involving a foreign national. If the Embassy/High Commission refuses or fails to issue the certificate within a reasonable time, the court must have the power to dispense with this requirement.
    • The Court emphasized that an accused cannot be denied bail for failing to comply with a condition that is impossible to fulfill, especially when the grant of such a certificate is beyond the accused’s control.

    2. Dropping a PIN on Google Maps

    • The Court examined technical details provided by Google LLC, which clarified that dropping a PIN does not enable real-time tracking and is under the user’s control.
    • However, the Court held that any bail condition enabling the police to track every movement of an accused via technology would violate the right to privacy under Article 21.
    • The Court found the Google Maps PIN condition redundant and unnecessary, as it neither serves the purpose of bail conditions nor respects the privacy of the accused.

    3. Principles for Imposing Bail Conditions

    • The Court reiterated that bail conditions must not be arbitrary, fanciful, or so onerous as to frustrate the grant of bail itself.
    • The object of bail conditions is to ensure the accused does not interfere with the investigation, remains available for trial, and does not tamper with evidence.
    • The accused’s constitutional rights, including the presumption of innocence and the right to privacy, must be curtailed only to the minimum extent necessary.

    Final Decision

    The Supreme Court ordered the deletion of the following bail conditions imposed on Frank Vitus:

    • The requirement to obtain a certificate of assurance from the Nigerian Embassy/High Commission.
    • The requirement to drop a PIN on Google Maps to share his location.

    The Court directed that the case be listed on July 15, 2024, for further orders regarding compliance with other bail conditions. The appellant remains on bail, and the judgment sets a clear precedent that bail conditions must be reasonable, practical, and respectful of fundamental rights.

    Implications of the Judgment

    • For Foreign Nationals: Courts must consider the practicality of bail conditions and cannot impose requirements that are impossible for the accused to fulfill, such as obtaining certificates from foreign embassies.
    • For All Accused: Bail conditions must not infringe upon fundamental rights, especially the right to privacy. Technological monitoring as a bail condition is generally impermissible.
    • For the Legal System: The judgment reinforces the principle that bail conditions should serve the interests of justice without being arbitrary or excessively restrictive.

    Conclusion

    The Supreme Court’s order in Frank Vitus v. Narcotics Control Bureau is a landmark in protecting the rights of accused persons, particularly foreign nationals, and ensuring that bail conditions remain just, reasonable, and constitutionally compliant. This decision will guide lower courts in framing bail conditions that are both effective and respectful of individual liberties.

    Connected Matter

    Supreme Court on Bail, Sureties, and Drug Trafficking

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    Source: Supreme Court

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  • CESTAT Kolkata Orders 12% Interest on Delayed Customs Refund

    CESTAT Kolkata Orders 12% Interest on Delayed Customs Refund

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 19.08.2026

    CESTAT Kolkata Orders 12% Interest on Delayed Customs Refund

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, recently delivered a significant judgment in the case involving M/s Atcorp Global Pvt. Ltd. and the Commissioner of Customs (Port), Kolkata. The dispute centered on the rate and period of interest payable on a substantial customs duty refund, highlighting key legal principles and procedural delays in customs administration.

    Background of the Case

    • Parties Involved:
      • Appellant: M/s Atcorp Global Pvt. Ltd.
      • Respondent: Commissioner of Customs (Port), Kolkata
    • Nature of Dispute:
      • Atcorp Global imported Yellow/Green peas between December 2017 and February 2018, initially paying 50% Basic Customs Duty (BCD).
      • Later, they discovered eligibility for NIL BCD under Notification No. 93/2017-Cus dated 21.12.2017 and sought re-assessment and refund of excess duty paid.
      • The refund process was marred by significant delays and multiple rounds of litigation.

    Chronology of Events

    1. Import and Duty Payment:
      • Goods imported under five Bills of Entry (Dec 2017–Feb 2018).
      • Excess duty paid due to initial misclassification.
    2. Re-assessment Request:
      • Application for re-assessment filed on 18.09.2018 under Section 149 of the Customs Act, 1962.
      • No timely response from Customs authorities.
    3. Refund Claim:
      • Refund application filed on 19.11.2018.
      • Initial rejection due to pending re-assessment.
    4. Litigation and Delays:
      • Multiple appeals and reminders from 2019 to 2025.
      • Final re-assessment order passed only on 17.09.2025.
      • Refund of Rs. 2,89,56,399 sanctioned on 01.12.2025, credited on 20.01.2026.
    5. Interest Dispute:
      • Commissioner (Appeals) granted interest at 6% from 20.02.2019.
      • Atcorp Global appealed for 12% interest, citing consistent High Court and Tribunal precedents.
      • Revenue appealed, arguing interest should accrue only from the date of re-assessment.

    Legal Issues and Arguments

    1. Date from Which Interest is Payable

    • Importer’s Stand: Interest should accrue from three months after the initial refund application (i.e., from 20.02.2019), as per Supreme Court rulings (Ranbaxy Laboratories Ltd. vs. Union of India).
    • Revenue’s Stand: Interest should start only after re-assessment (17.09.2025).

    2. Applicable Rate of Interest

    • Importer’s Stand: Sought 12% interest, referencing multiple High Court and Tribunal decisions (e.g., Riba Textiles Ltd., Green Valley Industries Pvt. Ltd., Parle Agro Pvt. Ltd.).
    • Revenue’s Stand: Argued for 6% interest, citing statutory provisions and notifications.

    Tribunal’s Analysis and Findings

    • Delay Attributed to Revenue: The Tribunal noted that the delay in re-assessment and refund was due to inaction by Customs authorities, not the importer.
    • Interest Period: Following Supreme Court precedents, the Tribunal held that interest is payable from three months after the refund application date (20.02.2019), not from the date of re-assessment.
    • Interest Rate: The Tribunal relied on recent High Court and Tribunal rulings, especially the Calcutta High Court’s decision in Rajendra Kumar Jain vs. Commissioner of Customs (Port), Kolkata, which established 12% as the appropriate rate in the absence of a statutory provision for pre-deposit refunds.

    Key Judgments Cited

    • Ranbaxy Laboratories Ltd. vs. Union of India (2012): Interest on delayed refunds accrues from three months after the refund application.
    • Sandvik Asia Ltd. vs. CIT, Pune: Compensation for inordinate delay in refund, supporting higher interest rates.
    • Recent High Court/Tribunal Decisions: Consistently awarded 12% interest in similar cases (Riba Textiles Ltd., Green Valley Industries Pvt. Ltd., Parle Agro Pvt. Ltd., Berger Paints India Ltd.).

    Final Order and Impact

    • Revenue’s Appeal Dismissed: Tribunal upheld that interest is payable from 20.02.2019.
    • Importer’s Appeal Allowed: Tribunal enhanced the interest rate from 6% to 12% for the period from 20.02.2019 until the date of refund.
    • Direction: Revenue to pay the balance 6% interest within eight weeks of the order.

    Significance of the Ruling

    1. Clarifies Interest Computation: Reinforces that interest on delayed customs refunds accrues from three months after the refund application, not from the date of re-assessment.
    2. Sets Precedent for Higher Interest: Affirms 12% as the appropriate rate in cases of administrative delay, especially where no statutory rate is prescribed.
    3. Accountability for Delays: Highlights the need for timely action by customs authorities and provides compensation for importers facing undue delays.

    Conclusion

    The CESTAT Kolkata’s decision in the Atcorp Global case is a landmark for importers seeking timely refunds and fair compensation for administrative delays. It underscores the judiciary’s commitment to upholding statutory rights and ensuring accountability in customs administration.

    Connected Matter

    Interest for Delayed Refund of Pre-Deposit in Customs

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    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: CESTAT Kolkata

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