Riyaz Rafiq Padela’s ₹50 lakh central excise appeal remains pending

Riyaz Rafiq Padela’s ₹50 lakh central excise penalty remains under challenge before the High Court of Bombay. The pending appeal followed the Customs, Excise and Service Tax Appellate Tribunal’s January 24, 2023 dismissal of his Rule 26 challenge arising from a June 9, 2008 notice alleging fraudulent rebate claims.

Why is Padela’s ₹50 lakh central excise appeal pending?

Padela’s appeal is pending because he challenged the appellate tribunal’s January 24, 2023 final order before the High Court of Bombay under Section 35G of the Central Excise Act, 1944. The prospectus identifies the High Court matter by CNR No. HCBM02-016442-2023 and states that it is pending for hearing. The appeal concerns a ₹50 lakh penalty imposed under Rule 26 of the Central Excise Rules, 2002.

The matter began with a June 9, 2008 show-cause notice from the Directorate General of Central Excise Intelligence, Mumbai Zonal Unit. The notice named Padela and several others and alleged fraudulent availing of rebate claims from the Maritime Commissioner, Raigad Commissionerate, Khandeshwar. A show-cause notice is a regulatory notice requiring a response before adjudication; the disclosed adjudicated outcome was a ₹50 lakh penalty.

Padela’s stated defence was that he had not physically handled goods and was not a claimant of the rebates described in the June 2008 notice. In Excise Appeal No. 2054 of 2010, he also argued that March 2007 amendments to Rule 26 could not be applied retrospectively. The prospectus does not disclose the underlying transaction dates, the value of the alleged rebate claims or a scheduled date for the High Court hearing.

What did the tribunal decide and what is before the High Court of Bombay?

The Customs, Excise and Service Tax Appellate Tribunal dismissed Padela’s appeal against the ₹50 lakh penalty in final order No. A/85045-85046/2023 dated January 24, 2023. The disclosure says that order was certified on January 30, 2023, after which Padela filed the tax appeal before the High Court of Bombay. The High Court proceeding therefore follows the tribunal stage.

The disclosed sequence separates the original penalty from the present court challenge. The Rule 26 penalty was imposed after adjudication of the June 2008 notice, while the tribunal considered Excise Appeal No. 2054 of 2010 and dismissed it in 2023. The pending Section 35G tax appeal concerns Padela’s challenge to that tribunal order, according to the prospectus.

The prospectus does not state that the High Court of Bombay has stayed, reduced, set aside or affirmed the ₹50 lakh penalty. It states only that the case is pending for hearing. The status can therefore change only through a later High Court hearing and order, neither of which is disclosed in the prospectus.

How does the income-tax case compare with the central excise dispute?

Padela has one separate direct-tax appeal involving ₹51.32 lakh, compared with the ₹50 lakh central excise penalty under challenge before the High Court of Bombay. The prospectus classifies the income-tax matter as direct tax and lists central excise separately among tax claims involving its promoter and director. The two disclosed amounts total ₹101.32 lakh.

The income-tax matter arose from a January 30, 2020 notice issued by the Income Tax Officer, Ward 3(2)(8), Surat, concerning an outstanding demand of ₹51.32 lakh. Padela sought a stay on February 6, 2020 on the basis that an appeal was pending, but the prospectus says the stay application was rejected. It further says he filed Appeal No. ITA/881/SRT/2025 before the Commissioner of Income Tax (Appeals), Surat-3, on August 21, 2025, where it remains pending.

The two proceedings differ in forum and procedural history. The central excise matter passed through adjudication and a tribunal appeal before reaching the High Court of Bombay in 2023, whereas the income-tax disclosure identifies a pending first-level appeal before the Commissioner of Income Tax (Appeals) dated August 21, 2025. The prospectus provides no outcome, payment status, stay order or hearing date for either appeal.

What does Ajwa Projects disclose about Padela’s legal exposure?

Ajwa Projects Limited discloses the two matters in its consolidated table of direct and indirect tax claims involving its promoter and director. Ajwa Projects adopted a ₹19.42 lakh material-litigation threshold on June 30, 2025. Both the ₹50 lakh central excise amount and the ₹51.32 lakh income-tax amount exceed that threshold.

The ₹19.42 lakh threshold is the lowest of three measures based on Ajwa Projects’ latest annual restated standalone financial statements: 2% of turnover, or ₹96.85 lakh; 2% of net worth, or ₹35.42 lakh; and 5% of the average absolute profit or loss after tax for the preceding three annual periods, or ₹19.42 lakh. Ajwa Projects also says litigation may be material if its outcome could affect the company’s business, operations, prospects or reputation.

Ajwa Projects separately states that there are no outstanding criminal proceedings against its promoters and directors. It also reports no outstanding actions by the Securities and Exchange Board of India or stock exchanges against promoters, and no such penalties in the past five financial years. Those disclosures do not alter the stated pending status of Padela’s two tax proceedings.

The company’s own direct-tax claim is smaller than either matter involving Padela. Ajwa Projects reports one tax-deducted-at-source, or TDS, default case of ₹4.90 lakh for financial year 2023-24 and prior years, with no goods and services tax cases listed. Its contingent liabilities relating to direct and indirect tax proceedings were ₹4.90 lakh at June 30, 2026, compared with ₹7.02 lakh at March 31, 2025.

Conclusion

The disclosures show that Padela’s ₹50 lakh central excise penalty has not reached a final disclosed court outcome. The tribunal dismissed his appeal on January 24, 2023, and the subsequent High Court of Bombay tax appeal remains pending for hearing. His separate ₹51.32 lakh income-tax appeal is pending before the Commissioner of Income Tax (Appeals), leaving two tax matters at different procedural stages.

The next disclosed developments to watch are a hearing or order in the High Court of Bombay case and the outcome of Appeal No. ITA/881/SRT/2025 before the Commissioner of Income Tax (Appeals), Surat-3. Ajwa Projects provides no hearing dates, settlement proposal, stay order or expected resolution timeline for either matter, so any status change would require a later court, tax-authority or company disclosure.