TMI Tax Updates - e-Newsletter
April 22, 2024
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
Indian Laws
Highlights / Catch Notes
-
GST:
Eligibility for concessional rate of GST - Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heaters are “Waste to Energy” plant or not - The High Court observed that the petitioner failed to provide sufficient evidence to support their claim that the products exclusively used non-conventional fuel. The technical specifications and documentation provided did not conclusively demonstrate this. - Additionally, the Court recognized the limited jurisdiction to interfere with these decisions and found no flaws in their process.
-
Income Tax:
Allowable expenditure of "Education Cess” - The Supreme Court set aside the impugned judgment and allowed the appeal of the Revenue, affirming that "Education Cess" cannot be treated as an expenditure.
-
Income Tax:
Waiver of interest u/s 234A, 234B and 234C - marginal delay in filing the returns - The petitioner sought relief based on the timing of filing returns after receiving audit reports and financial challenges faced by the cooperative society. - The High Court, after careful consideration of submissions and legal principles, granted partial relief by waiving interest under Section 234A for certain assessment years. However, it refused to grant waivers under Sections 234B and 234C, emphasizing the importance of adhering to statutory timelines for tax payments.
-
Income Tax:
Validity of assessment order - as argued without giving the petitioner an opportunity to reply by granting adjournment, the second respondent has now passed the assessment order by adding a further sum towards addition u/s 68 - The High Court, after careful consideration, agreed with the petitioner's contentions. It found that the order lacked procedural fairness and that the additions to the taxable income were not justified. As a result, the impugned order was quashed, and the case was remitted back to the first respondent for fresh assessment within 90 days.
-
Income Tax:
Estimation of income - bogus purchases - quantification of profit - The Tribunal noted that during investigations, the alleged suppliers were identified as bogus entities involved in issuing fake invoices without actual delivery of goods. Despite the taxpayer’s claims of making payments through banking channels, the assessing officer found no credible evidence to support the genuineness of the transactions. Consequently, the Tribunal agreed with the lower authorities in treating these purchases as bogus but redirected the case to assess the exact profit element attributable to these transactions, aligning with the principle that only the profit margin on such bogus transactions should be added to taxable income.
-
Income Tax:
Reopening of assessment - The Appellate Tribunal cited the CBDT's instruction clarifying the judgment of the Hon’ble Supreme Court, stating that notices cannot be issued for certain assessment years where the income escaping assessment is less than fifty lakh rupees. Since the escaped income in the present case was Rs. 29 Lacs falling below the threshold, the Tribunal quashed the notice issued u/s 148 of the Act.
-
Income Tax:
Levying penalty u/s. 271(1)(c) - The appellant, a partner in a partnership firm, had disclosed all particulars of income, including remuneration and interest on capitals received from the firm, in the original return filed. Despite the incorrect claim made under section 44AD of the Act, the Tribunal found no evidence of concealment or furnishing inaccurate particulars. Relying on legal precedents and considering the disclosure made by the appellant, the Tribunal concluded that the penalty was unwarranted.
-
Income Tax:
Jurisdiction of AO - Validity of notice issued u/s 143(2) - No objection were filed within one month u/s 124 - The Appellate Tribunal found that the notices were indeed issued by a non-jurisdictional AO, and there was no dispute regarding this fact from the Revenue's side. However, the Revenue relied on Section 292BB, arguing that the absence of objection within the stipulated time period validated their actions. In response, the Tribunal referred to the case of ITO vs. Almak Finance P. Ltd., where it was held that actions taken by authorities lacking jurisdiction are void ab initio. Thus, failure to dispute jurisdiction under Section 124(3) did not preclude the appellant from challenging it later. Consequently, the Tribunal concluded that the AO lacked jurisdiction, leading to the quashing of the assessment order.
-
Income Tax:
Addition u/s 40A(3) - Cash expenditure - assessee has made payments to the land owners exceeding INR 20,000/- - The Tribunal agreed with the appellant's argument to some extent, acknowledging that the disallowance should have been restricted to 20% of the total expenditure exceeding the prescribed limit. While the appellant failed to provide substantial evidence of business expediency, the Tribunal recognized that the disallowance should adhere to the provisions of section 40A(3), limiting it to 20%.
-
Income Tax:
Income taxable in India or not - Salary income - Australia assignment period - incomes deemed to accrue or arise in India as assessee is a non-resident - Despite non-submission of TRC, the Assessee provided alternate evidence supporting his tax residency in Australia. The Tribunal considered this evidence, along with the submissions made during assessment proceedings and objections raised before the DRP. Ultimately, the Tribunal ruled in favor of the Assessee, allowing the exemption claim on the grounds of his residency status and the nature of employment exercised in Australia.
-
Income Tax:
Taxability of income in India - Addition of receipt emanating from offshore supplies of escalators and elevators - The Appellate Tribunal observed that the consortium, comprising the appellant and another entity, had distinct and separate responsibilities delineated in the Memorandum of Understanding (MOU). The Tribunal emphasized that the income accrued to the appellant from offshore supplies, and as per relevant legal precedents, such income was not taxable in India. Therefore, the Tribunal directed the assessing officer to delete the addition made to the appellant's income.
-
Income Tax:
Eligibility of Deduction u/s 80P - bank interest earned from cooperative banks - The Appellate Tribunal found that even if the interest income is not considered as business income, the deduction cannot be denied under Section 80P(2)(d) of the Act. The Tribunal referred to the decision of the Supreme Court in the case of Kerala State Co-Operative Agricultural & Rural Development Bank Ltd., where deduction was allowed to a cooperative engaged in providing credit facilities to its members. The Tribunal held that the appellant, being a cooperative society of employees of a corporation, is entitled to the deduction under Section 80P(2)(d) of the Act.
-
Customs:
Adjudication of SCN after 17 years - The High Court ruled that the belated adjudication of the show cause notice rendered it arbitrary and illegal. Citing the principle established in the case of Coventry Estates Pvt. Ltd. vs. The Joint Commissioner, CGST and Central Excise and Anr. 2023, the Court held that such a prolonged delay in adjudication violates legal principles.
-
Customs:
Finalization of the provisional assessment - The High Court emphasized the need for expeditious conclusion of internal processes, particularly when all required documents were submitted by the petitioners. The failure to issue specific communications to the petitioners regarding any further requirements or compliances, coupled with the decision not to finalize the bills of entries, amounted to arbitrariness and abdication of duties by the concerned officers. In light of the above, the High Court directed the respondent to finalize the bills of entries within four weeks from the date of the judgment.
-
Customs:
Remission of duty - Application of Section 23 - duty free goods brought into SEZ and the same were destroyed in fire or otherwise - The Appellate Tribunal noted that there have been previous cases where goods destroyed in SEZs were found eligible for remission of duty under the Customs Act. Citing a specific case (ONGC Petro Additions Ltd. Vs. CC), the Tribunal highlighted that the responsibility for ensuring the safety of goods lies with the appellant, but negligence was not proven in this instance. Additionally, it was noted that the absence of customs inspection or analysis further supported the appellant's claim of lack of negligence. - The Tribunal upheld the appellant's right to remission of duty.
-
Customs:
Levy of imposed u/s 114A - Classification of imported goods - import of Shell Flavex Oil 595 B/H - item being Plasticizer - The Appellate Tribunal recognized the bona fide belief of the appellant in classifying the imported goods under CTH 38122090 as plasticizer, given that the tariff entry included the compound "Plasticizer." Furthermore, it noted that this classification was consistent across all Indian ports and was also accepted by the department. The appellant had not contested the duty liability and had paid the entire amount along with interest before the issuance of the show cause notice. - The Tribunal concluded that the appellant's actions did not meet the criteria for penalty imposition under this section. There was no evidence of suppression of fact, collusion, or willful misstatement on the part of the appellant.
-
Indian Laws:
Dishonour of Cheque - Scope of interim compensation - Liability of the Director the Company - The High Court found that Section 143A does not mandate the imposition of interim compensation but vests a discretionary power in the court. This discretion should consider the specific circumstances of each case, including existing securities and the financial status of the parties. - The Court highlighted that Section 143A explicitly targets the "drawer of the cheque" for interim compensation. Applying this to other associated persons without explicit legislative directive is incorrect. The judgment differentiated the role of a company's directors or signatories from the company itself, the latter being the actual drawer of the cheques. - The High Court set aside the Metropolitan Magistrate’s orders mandating the payment of interim compensation.
-
Indian Laws:
Dishonour of Cheque - amicable settlement of disputes - The Court observed that since the financial disputes underlying the criminal complaints had been resolved amicably, continuing the prosecution would not serve any purpose. Noting that the respondent (complainant) confirmed full receipt of the disputed amount and had no objection to quashing the proceedings, the Court decided to quash the impugned judgments and criminal proceedings under Section 138 of the Negotiable Instruments Act.
-
Service Tax:
Invocation of Extended period of Limitation - Evasion of service tax - The court found that invoking the extended period was inappropriate since the respondent had already settled the tax liabilities before the notice was issued. The absence of fraudulent or willful misconduct to evade tax payment played a crucial role in this determination. The Tribunal's decision to apply sub-section (3) of Section 73 was deemed correct, emphasizing that when taxes are paid voluntarily before any notice, the authorities should not issue a notice for the same period.
-
Service Tax:
Recovery of erroneous refund - amount paid by the appellant’s Chennai Unit towards the pre-deposit in connection with an appeal filed arising out of order in Tuticorin Central Excise Division with a different Registration Number - The Appellate Tribunal finds that the payment made by the appellant towards pre-deposit for filing the appeal should indeed be considered a pre-deposit and not an excess payment of duty. This conclusion is supported by legal precedents and the purpose for which the payment was made. The Tribunal agrees with the appellant's argument that since the payment was made as a pre-deposit under Section 35F, the provisions of Section 11B regarding limitation should not apply. As a result, the Tribunal allowed the appeal and granted the company the refund of the pre-deposit amount.
-
Service Tax:
Validity of demand of service tax - The case involved appeals against an order regarding service tax demands and penalties. The Appellate Tribunal addressed multiple issues raised by the parties. Firstly, it ruled that a demand already paid prior to the show cause notice should not have been included, as it fell under section 73(3) and was not excluded by section 73(4). Secondly, it set aside the demand and penalty for non-payment of service tax reflected in ST-3 returns, as the extended period of limitation was not properly invoked. Additionally, it upheld the Commissioner's finding regarding the reversal of a demand under rule 6(3) of the Credit Rules.
-
Service Tax:
Levy of service tax - business support service - making facility to the customers to book online tickets of movies and other shows - The Appellate Tribunal found that the appellant did not receive any consideration from the card companies for providing business support services. Since no invoices were raised by the appellant against the services rendered to the card companies, the Tribunal concluded that no consideration was received. This aligned with the principle that consideration must be present for a service to be taxed. The Tribunal observed that the appellant had not retained any amount received from the card companies. Instead, these amounts were intended to be paid to cinema houses. Therefore, the Tribunal set aside the impugned order and allowed the appeal.
Articles
Notifications
Circulars / Instructions / Orders
Case Laws:
-
GST
-
2024 (4) TMI 811
Cancellation of registration of petitioner - time limitation - order for cancellation of registration has been passed without any application of mind - violation of principles of natural justice - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh's case [ 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT] , wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh's case took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The orders impugned herein are liable to be set aside. Accordingly, the order in original dated April 27, 2023 and the appellate order dated March 12, 2024 are quashed and set aside - the writ petition is allowed.
-
2024 (4) TMI 810
Cancellation of registration of petitioner - order passed without any application of mind - violation of principles of natural justice - HELD THAT:- In the present case, the facts are similar to one in Surendra Bahadur Singh's case [ 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT] , wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh's case took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The orders impugned herein are liable to be set aside. Accordingly, the order in original dated March 18, 2021 and the appellate order dated May 24, 2023 are quashed and set aside - Petition allowed.
-
2024 (4) TMI 809
Eligibility for concessional rate of GST in terms of Sr. No. 201A of Notification No. 01/2017-CGST (Rate) - Biomass Fired (Steam) Boilers and Agro Waste Thermic Fluid Heaters are Waste to Energy plant or not - HELD THAT:- To get the benefit of lower rate of GST, it was the Biomass / Agro Boilers as well as the Agro Waste Fluid Thermic Heaters produced by the petitioner does not fall under any category from (a) to (h). The claim of the petitioner is that it falls in the category of Waste to Energy Plant / devices is also not considered by the Appellate Authority on the ground of Waste to Energy Plant, can be considered only the product, which produces either by Biogas / Bio-CNG / enriched Biogas or Power from urban, industrial and agricultural waste. The power used by the Government of India, Ministry of Environment, Forest and Climate Change Notification dated 8th April 2016, in the objectives of the scheme for Solid Wastes Management Rules, the petitioner has tried to suggest that the power includes the steam, as held by this Court in the decision in the case of Jay Chemical Industries Ltd [ 2020 (3) TMI 231 - GUJARAT HIGH COURT] , in which, this Court has held that the steam can be considered as power to grant the benefit of deduction under Section 80IA(4) of Income Tax Act. Reference was also made by the Appellate Authority on the Gujarat Waste to Energy Policy 2016 dated 28th March 2016, which refers to the generation of the power in form of electricity power. Therefore, while analyzing the Entry at Serial No. 234/201A, the renewable energy devices and parts for the manufactured would refer to the Biogas, Solar Power generating system, Wind mills or Wind Mills Operating Electricity Generator and Waste to Energy Plant relating thereto only. Therefore, in the facts of the case, the petitioner is stated to have been manufacturing the Boilers / thermal heaters by using the non-conventional fuel would not be qualified for Waste to Energy Plants and devices, as rightly held by the appellate authority. This petition, being devoid of any merits, is, accordingly, dismissed.
-
Income Tax
-
2024 (4) TMI 808
Assessment barred by limitation - delay of 340 days in filing the present special leave petition - HC [ 2023 (1) TMI 1368 - CALCUTTA HIGH COURT] held provisions of Section 153(3)(ii) of the Act are not attracted in the facts and circumstances of the case on hand - HELD THAT:- We are not satisfied with the reasons given for the delay. Accordingly, the application for condonation of delay, as well as, the special leave petition are dismissed.
-
2024 (4) TMI 807
Condonation of delay - gross delay of 597 days in filing the special leave petition - Exemption u/s 11 allowed on activity of the assessee of letting out gallery frequently for a price as merely because a small percentage of the income of the Assessee is from letting out of its premises and sale of paintings, the essential activity of the Assessee would not cease to be charitable for the purposes of Sections 11 and 12 HELD THAT:- The explanation offered is not to our satisfaction as no sufficient cause to condone the delay has been made out. Hence, the application seeking condonation of delay is dismissed. Consequently, the Special Leave Petition is dismissed on the ground of delay keeping open the question of law, if any, which arises in this matter. Pending application(s) shall stand disposed of.
-
2024 (4) TMI 806
Allowable expenditure of Education Cess - HELD THAT:- As respondent very fairly states that in view of the subsequent amendments in the Income Tax Act, 1961, Education Cess cannot be allowed as an expenditure. In view of the statement made, the impugned judgment is set aside and the appeal is allowed, holding that the Education Cess cannot be allowed as an expenditure. However, the assessing officer while implementing and giving effect to this order, will examine the question of the quantum/amount of Education Cess , if any, claimed by the respondent SESA Goa Ltd., as an expenditure in the returns or in the proceedings.
-
2024 (4) TMI 805
Waiver of interest u/s 234A, 234B and 234C - marginal delay in filing the returns - HELD THAT:- The stand of the petitioner that the petitioner was entitled for waiver of interest u/s 234A for the AY 2008-2009 and 2009-2010 on similar for the AY 2005-2006 and 2007-2008 deserves to be accepted, as there is only marginal delay in filing the returns after the Audit Report was received by the petitioner from the Office of Joint Director of Cooperative Audit on 22.03.2011 for the AY 2008-2009 and on 31.01.2012 for the AY 2009-2010. The returns for these years were filed by the petitioner on 31.05.2011 and 02.04.2012, respectively. Therefore, to the extent of rejection of waiver of interest u/s 234A is concerned, the impugned order warrants interference, by granting waiver to the petitioner. Therefore, the interest u/s 234A deserves to be waived and therefore, this Writ Petition deserves to be allowed to that extent. Interest u/s 234B and 234C - They pertain to belated payment of advance tax under Section 210 within the stipulated period under Section 211 of the Income Tax Act, 1961. No case is made out by the petitioner for waiver of interest notwithstanding the reason stated by the petitioner in the affidavit. CBCT Circular No.400/129/2002-IT(B), dated 26.06.2006, does not specifically deal with waiver of interest u/s 234B and 234C of the Income Tax Act, 1961. There were no impediments operating against the petitioner from paying the advance tax within the time line under Section 211 of Income Tax Act, 1961. The decision of this Court in Tvl.Sanmac Motor Finance Ltd. case [ 2020 (2) TMI 1182 - MADRAS HIGH COURT] which was relied by the learned counsel for the petitioner as also by the learned Senior Standing Counsel for the respondents, has not given a complete waiver of interest under any of the provisions although partial waiver was allowed. That apart, the payment of interest on the tax that was payable on the date specified in Section 211 is axiomatic in the sense it has to be paid by the due date prescribed under the Statute and therefore, there cannot be any waiver either on the ground of equity or on a reading of the above Circular dated 26.06.2006, bearing reference No.400/129/2002-IT(B) or on a reading of the decision of this Court in Tvl.Sanmac Motor Finance Ltd. case [cited supra] or on a reading of the decision of the Hon'ble Supreme Court in Commissioner of Income Tax, Mumbai vs. Anjum M.H. Ghaswala and others [ 2001 (10) TMI 4 - SUPREME COURT] Writ Petition is partly allowed.
-
2024 (4) TMI 804
Validity of assessment order - as argued without giving the petitioner an opportunity to reply by granting adjournment, the second respondent has now passed the assessment order by adding a further sum towards addition u/s 68 - petitioner requested for adjournment in response to the earlier show cause notice which was denied - HELD THAT:- Without giving the petitioner an opportunity to reply by granting adjournment, the second respondent has now passed the assessment order by adding a further sum towards addition u/s 68 of the Income Tax Act, 1961. Thus, the impugned order has been passed in violation of principles of natural justice. Therefore, it is liable to be interfered with under Article 226 of the Constitution of India. Accordingly, the impugned order passed by the first respondent is quashed and the case is remitted back to the first respondent to pass fresh orders within a period of 90 days from the date of receipt of a copy of this order. It is made clear that the impugned order and the show cause notice shall be read compendiously and a reply to the same shall also be filed by the petitioner within a period of 30 days from the date of receipt of a copy of this order
-
2024 (4) TMI 803
Estimation of income - bogus purchases - quantification of profit - Rejection of books of accounts - HELD THAT:- Admittedly the addition in the hands of the assessee is liable to be restricted only to the extent of the profit which he would have made by procuring the goods at a discounted value from the open/grey market as against the inflated value at which he had recorded the same on the basis of bogus bills in his books of account. In so far the issue of quantification of profit which the assessee would have made by procuring the goods in question from the open/grey market is concerned, we find that the Hon ble High Court of Bombay in the case of Pr. Commissioner of Income Tax-17 Vs. M/s. Mohhomad Haji Adam Company [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] had observed, that the addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate of other genuine purchases As identical facts the issue to the extent of quantification of the profit element in case of bogus/unverified purchases had come up in the case of M/s. Gopal Rice Industries [ 2023 (1) TMI 363 - ITAT RAIPUR] wherein restrict the addition in the hands of the assessee qua the impugned bogus/unverified purchased by bringing the GP rate of such bogus purchases at the same rate as that of the other genuine purchases. Thus we restore the matter to the file of the A.O, with a direction to him to restrict the addition in the hands of the assessee qua the impugned bogus/unverified purchases by bringing the GP rate of such bogus purchases at the same rate as that of the other genuine purchases. Appeal of the assessee company is allowed for statistical purposes
-
2024 (4) TMI 802
Reopening of assessment - scope of new regime of reopening of assessment after introduction of provisions of section 148/148A - notices issued for assessment years 2013-14 to 2015-16 - Limitation provided in section 149 - where the escaped income is less than Rs. 50 lakhs - HELD THAT:- We noted that admittedly the notice issued u/s. 148 of the Act either on 19.03.2021 or 13.04.2021, whether these are issued on 19.03.2021 i.e., extended, that falls in extended period or fresh notice issued on 13.04.2021 is of no relevance for adjudication on this issue. In either of the notice, the assessment was framed and Revenue s contention is that the notices u/s. 148 of the Act is valid under the new regime of reopening of assessment after introduction of provisions of section 148/148A of the Act. We have gone through the assessee s paper-book and examined the facts and noted that admittedly escaped income is Rs. 29,20,000/- only. Now this issue has been clarified by CBDT explaining the judgment of Hon ble Supreme Court in the case of Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] implementation of by lower authorities and accepted the position that notices cannot be issued for assessment years 2013-14 to 2015-16, wherever income escaping assessment in that year, amounts to or is likely to amount to less than fifty lakh rupees. In the present case before us, the amount is Rs. 29,20,000/-. This issue is squarely covered by the decision of Hon ble Supreme Court in Ashish Agarwal, supra, in favour of assessee and subsequently, issued instruction by CBDT and hence, we quash the notice issued u/s. 148 of the Act dated 13.04.2021 or 19.03.2021 as without jurisdiction.
-
2024 (4) TMI 801
Levying penalty u/s. 271(1)(c) - as assessee has concealed the income by declaring the remuneration and interest on capital as gross receipts and declared the same u/s. 44AD and claimed to have been earned profit @ 8% - AO noted that the assessee ought to have declared the same as business income instead declared u/s. 44AD of the Act, which he did only to evade tax on interest and remuneration from the firm - AO noted that this issue was detected during assessment proceedings and he has not declared the income on his own but after detection it was declared and paid taxes HELD THAT:- Admittedly, the assessee has filed information in the return of income in regard to remuneration and interest on capitals received from the partnership firm - This fact is disclosed by assessee in its original return of income and original return of income was processed u/s. 143(1) of the Act but assessee claimed these two items i.e., remuneration received as a partnership firm and interest on capital receipt from partnership firm on presumptive basis u/s. 44AD of the Act and declared net profit @ 8%. We agree with the argument of ld. Senior DR that the assessee cannot make such claim and this is not allowable and this position has been clarified in the case of Anandkumar [ 2020 (12) TMI 994 - MADRAS HIGH COURT] . But, we noted that all the facts relating to these two claims made by assessee are available before the AO and even the AO processed the original return and accepted the claim, which may be wrong. We have gone through the decision of Reliance Petroproducts Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] wherein the Hon ble Supreme Court has propounded the meaning of the term particulars used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars . In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars . Mere fact that the claim of the assessee has been negated by the AO, it does not amount to concealment of income or furnishing of inaccurate particulars of income by the assessee. In the present case before us also, the assessee has disclosed complete particulars of income relating to remuneration received from firm and interest on capital invested with the firm. Once this is a fact, it means that there is no issue as regards to concealment of particulars of income. Thus in the present case, the particulars are declared by assessee in his return of income and the assessee has only claimed those items as business receipts instead of declaring it as profit on gross basis. Thus this is not a fit case levy of penalty u/s. 271(1)(c) of the Act. There is no concealment of particulars of income or new evidences found by the AO for making any kind of addition. Appeal filed by the assessee is allowed.
-
2024 (4) TMI 800
Validity of notice issued u/s 143(2) by the Non-Jurisdictional AO - No objection were filed within one month u/s 124 - Unexplained credits addition u/s 68 r.w.s. 115BBE as amount received on sale of shares unexplained - HELD THAT:- It is nowhere disputed by the Revenue that the notices issued in this regard were from non-jurisdiction AO. Only defence made out by the Revenue is that there was no objection within one month as per section 124 made by the assessee during assessment proceedings, thus section 292BB supports the case of the Revenue. We are in agreement with the submissions of assessee wherein by placing reliance upon the case of ITO vs. Almak Finance P. Ltd. [ 2020 (10) TMI 795 - ITAT DELHI] it was held that when authorities have no jurisdiction over the assessee, the act done by such authority is bad in law and void ab initio. Thus, it is the claim of the assessee that by not disputing jurisdiction u/s 124 (3) of the Act, right to challenge the jurisdiction will not be lost forever, thus the defect is not curable u/s 292B 292BB. Thus we hold that AO did not have jurisdiction and accordingly, the assessment order is liable to be quashed as such. Therefore, by holding that notices were issued from non-jurisdictional AO, the assessment order is hereby quashed. Appeal of the assessee is allowed.
-
2024 (4) TMI 799
Addition u/s 40A(3) - Cash expenditure - assessee has made payments to the land owners exceeding INR 20,000/- - HELD THAT:- Only 20% of the expenditure would be disallowed in the event of any payment of such expenditure made in cash which exceeded INR 20,000/-. The contention of the assessee is that the payments were made out of business expediency, is not supported by any evidences. Therefore, the case laws relied by assessee, do not help him under the facts of the present case. However, we are in agreement with assessee that the expenditure should have been restricted to the extent of 20% in terms of extant provision of section 40A(3) of the Act. We therefore, direct the AO to restrict the disallowance to the extent of 20% of the total expenditure which was incurred in cash and exceeded the prescribed monetary limit i.e. INR 20,000/- of the same. Grounds raised by the assessee are accordingly, partly allowed.
-
2024 (4) TMI 798
Income taxable in India or not - Salary income - incomes deemed to accrue or arise in India as assessee is a non-resident - income earned under head Salaries for services rendered in Australia employment - HELD THAT:- In the instant case the assessee neither had any rest period nor leave period which is preceded and succeeded by the services rendered outside India. Since, the assessee has rendered services outside India, the salary cannot be taxable in India. As per the definition the salary paid or the advances received are to be included in the total income of the person when the salary becomes due. From the concurrent reading of Section 5 dealing with scope of total income, Section 15 dealing with computation of total income under the head salary and chargeability thereof and Section 9 dealing with income arising or accruing in India with reference to the salaries and the services rendered in India, we hold that no taxability arises on the salary/allowances received by the assessee since the assessee is a non-resident and has rendered services outside India. Thus, the Assessee is eligible for exemption on his salary for services rendered in Australia employment exercised in Australia during his Australia assignment period. In the result, the appeal of the assessee is allowed.
-
2024 (4) TMI 797
Unexplained cash receipt u/s 69A - Unexplained income found in search - during the course of search, a digital evidence under ID marked was seized which is the mobile data backup of one of the employees of the assessee concern - HELD THAT:- It remains admitted facts that the ld. AO did not make any independent third party enquiry. It prima facie seems to be a transaction for which the assessee may have received advances but finally transaction did not materialize and the accounts may have been settled. There is no evidence to show that the alleged sum is in the nature of unexplained income or unexplained sales of the assessee. Therefore, the finding of the ld. CIT(A) that the impugned addition has been based on conjectures and surmises and not having any reference to tangible/credible material, needs no interference at our end. Accordingly, the sole grievance raised by the revenue is dismissed. Assessment u/s 153A - incriminating material found as a result of search or not? - HELD THAT:- Assessee has challenged the assumption of jurisdiction u/s 153A of the Act on the ground that it is not based on any incriminating material found as a result of search on the assessee. We fail to find any merit in the grounds of appeal raised in the cross-objection since there was a material, incriminating in nature in the form of digital evidence under ID marked MB/HD/01, which gave jurisdiction to the AO to carry out the assessment proceedings. Thus, all the grounds raised in the cross-objections are dismissed. Unexplained expenditure u/s. 69C - assesses has failed to explain the transactions mentioned in the incriminating material (MB/HD/01) seized from the assessee's premises during the course of search - HELD THAT:- As per the audited books of accounts for FY 2017-18, the closing balance of M/s. Sati Oil Udyog Limited as on 31/03/2018 cannot be doubted. These audited financial statements were part of the income tax return filed by the assessee much prior to the date of search. Therefore, genuineness of the closing balance of M/s. Sati Oil Udyog Limited is established. The remaining amount, two fold contentions have been made by the ld. A/R. Firstly, that there is a payment during financial year 2018-19 but it has been wrongly considered by the accountant preparing ledger appearing in the seized documents MB/HD/01 in FY 2017-18, then the alleged balance will be reconciled. Second fold of contentions is that the assessee had already offered additional income and against this additional income, the assessee has urged for telescoping benefit - We find merit in the second fold of contention and agree with the finding of the ld. CIT(A) that the assessee deserves telescoping benefit against the additional income offered to tax. Accordingly, Ground No. 1 raised by the revenue is hereby dismissed. Set off of unexplained expenditure against the additional income offered in the Income tax return - HELD THAT:- We fail to find any inconsistency in the finding of the ld. CIT(A) in holding that since the additional income offered was not specific and it was open for the assessee to claim telescoping benefit for unexplained expenditure and, therefore, CIT(A) has rightly given the set off against the additional income disclosed in the additional income. Accordingly, Ground No. 2 raised by the revenue is dismissed. Unexplained expenditure u/s 69C - seized material there were certain entries found in the form of summary of payments - HELD THAT:- We observe that no specific date is appearing in the incriminating material for the alleged transactions. There is no reference of any date which could remotely link the impugned payment to impugned Assessment Year. The presumption of the AO that the alleged sum is adjusted against the sale consideration itself shows that it is part of the sale consideration duly accounted for in the books. Thus, CIT(A) rightly referring to these facts has come to the conclusion that the ld. Assessing Officer erred in making this impugned addition which has been made without any basis and without considering the facts that the alleged sum has been paid through banking channel duly accounted for in the regular books of accounts. Ground No. 1 raised by the revenue is dismissed. Unexplained cash received back - HELD THAT:- We on perusal of the finding of the ld. CIT(A) and submissions of the assessee take note of the fact that the alleged sum received from M/s. Krishna Udyog were found entered in the regular books of accounts in Tally software. It was just a matter of reconciliation of statements between M/s. Krishna Udyog and ld. CIT(A) for which the ld. CIT(A) had already directed the Assessing Officer to carry out the necessary verification. Thus, no interference is called for in the finding of the ld. CIT(A). Accordingly, Ground No. 2 raised by the revenue is dismissed. Addition under the head undisclosed profit - AO on examining the seized data MB/HD/04 which consists of tally data of the group and on analyzing the tally accounts for FY 2019-20 came to the conclusion that assessee has suppressed two digits while making the accounting - HELD THAT:- On going through the above finding and also observing that the assessee had offered income more than the income as per the seized tally data, there was no room available to estimate higher profit without placing any evidence of suppressed sales or inflated expenditure. We thus, fail to find any infirmity the finding of the ld. CIT(A) and accordingly dismiss Ground No. 3. Estimation of income - Bogus purchases - CIT(A) on considering the fact that sales of the assessee are not in dispute, work contracts have been executed and even if the purchases are bogus billings, there is actual purchase during the year for effectively completing contract work and only disallowed 5% of the total purchases - HELD THAT:- There is no evidence on record to prove that the assessee has shown bogus sales bills or bogus works contracts as the transactions are carried out through proper banking channels and registered vendors. Turnover declared by the assessee has been accepted by the ld. Assessing Officer. Once it is admitted that the figure of turnover is correct and the works contract/sales have been achieved by supplying material or completing the construction work it has to be accepted that for achieving the sales contract/work contract, expenditure has to be incurred. Thus, the ld. CIT(A) has taken a fair approach and after considering the past profit trend and the books of accounts being regularly maintained and duly audited, has rightly disallowed the purchases @5% sustaining the disallowance and giving part relief to the assessee. Unexplained money - AO based on the seized document MB-06 having reference Commission Jorhat to Guwahati , inferred that there is a cash transfer against fixed commission - As per the assessee, this can be entry of discount/commission of Rs. 500/- per tonne of iron and steel from some person or firm - HELD THAT:- Neither any staff has confirmed the analogy drawn by the ld. Assessing Officer nor any document was seized or any reference has been made through regular books. In absence of any plausible explanation given by the Assessing Officer for decoding the entries appearing in page 13 of MB-06, we fail to find any infirmity in the finding of the ld. CIT(A) deleting the addition observing that in absence of any finding of suppression of double-digit in respect of any amount, the impugned amounts have to be taken on the face value. Accordingly, Ground No. 1 raised by the revenue is dismissed. Addition unexplained cash back received - CIT(A) deleted addition - HELD THAT:- Since the assessee deserves telescoping benefit of the alleged sum against the additional undisclosed income offered in the return of income, we find no infirmity in the finding of the ld. CIT(A). Estimation of income - bogus purchases - HELD THAT:- After taking into consideration the consistent carrying on of the same business of works contract, turnover not disputed by the revenue authorities, better net profit percentage and the fact that for achieving turnover, purchases are required to be made, we confirm the view taken by the ld. CIT(A) sustaining the disallowance @ 5% of the total bogus purchases.
-
2024 (4) TMI 796
Taxability of income in India - Addition of receipt emanating from offshore supplies of escalators and elevators - assessee has claimed that the aforesaid receipt was not taxable in India on the ground that they pertained to off-shore supplies of equipment to DMRCL and MMRCL - AO was of the view that the contract with DMRCL and MMRCL was composite and indivisible and could not be split up into supply and commissioning parts as stated by the assessee and that the said consortium was liable to be assessed as an Associate of Person (AOP) and the income from the transaction was chargeable to tax in India, as no benefit of India-China DTAA could be granted to the association - HELD THAT:- As decided in own case [ 2023 (3) TMI 319 - ITAT MUMBAI] assessee did not carry out any operations in India in respect of its scope of work, therefore, we are of the considered opinion that the income earned by the assessee from the offshore supply of escalators and elevators to DMRCL and MMRCL is not taxable in India. Accordingly, we direct the Assessing Officer to delete the addition made in the hands of the assessee. As a result, ground No. 1 raised in assessee s appeal is allowed. Refund - Non receipt of funds granted by the AO - During the course of appellate proceedings before us the ld. Counsel submitted assessee has not issued refund as determined in the intimation issued u/s 143(1) of the Act - HELD THAT:- After hearing both the sides we direct the AO to determine the refund after verification of the relevant supporting material as claimed by the assessee. Therefore, this ground of appeal of the assessee is allowed for statistical purpose.
-
2024 (4) TMI 795
Eligibility of Deduction u/s 80P - bank interest earned from cooperative banks - Assessee is a co-operative society primarily engaged into arranging for prompt payment to beneficiaries of diseased employees - HELD THAT:- The income earned by a co-operative society by way of interest derived by from its investment with any other cooperative society, then the whole of such income is deductible. Further the amount of interest received by the assessee from the different cooperative banks; it is not the claim that those banks are also not cooperative societies. It is agreed that those are also the cooperative bank in terms of The Banking Regulation Act, 1949. Therefore even if it is accepted that bank interest on from cooperative banks by the assessee is not the income from the business of the assessee and therefore the claim of the assessee fails under section 80P(2)(a) of the act, but the claim is still allowable and therefore cannot be denied u/s 80P(2)(d) of the act. This issue is also covered in favour of the assessee by the decision of Kerala State Co-Operative Agricultural Rural Development Bank Ltd. [ 2023 (9) TMI 761 - SUPREME COURT ] where the deduction was allowable to the state level agricultural and rural development bank, was engaged in providing credit facility to its members . The case of the assessee is on far better footings that these are society of only the employees of Indian oil Corporation. In view of the above facts, we direct the learned lower authorities to allow the deduction to the assessee on interest income earned from various cooperative banks under section 80P(2)(d) of the act. - Appeals of the assessee are allowed.
-
Customs
-
2024 (4) TMI 794
Adjudication of SCN after 17 years - Validity of categorizing the petitioner as an importer of barge that drifted due to bad weather - The same was being taken by a tug owned by one MLC Marine Pvt. Ltd. from Singapore to Baharin sometime in the year 2006 - HELD THAT:- We are of the prima facie opinion that for more than one reason the impugned show cause notice ought not to proceed; firstly prima facie there appears to be grave doubt as to whether the respondents would have jurisdiction to issue the show cause notice in question by categorizing the petitioner to be an importer. Secondly and more significantly, we find that the show cause notice itself is dated 08 June, 2007. The record indicates that there was no stay on the adjudication of the show cause notice for seventeen years. It may be true that the owner of the tug-MLC Marine Pvt. Ltd. had approached this Court in MLC MARINE PTE LTD. VERSUS COMMISSIONER OF CUSTOMS [ 2007 (3) TMI 278 - HIGH COURT OF JUDICATURE AT BOMBAY] in which the show cause notice issued to the owners of the tug MLC Marine Pvt. Ltd. which was challenged. A coordinate Bench of this Court by an order dated 27 October 2020 in the present proceedings observed that the adjudication of the show cause notice in question was subject to the result of the decision which would be rendered on such writ petition. It, however, appears that the said writ petition was dismissed for want of prosecution some time in December 2022, and it is on such backdrop, the show cause notice as issued to the petitioner, who is the owner of the barge, has now been taken up for adjudication, when admittedly there was no stay on the adjudication of the show cause notice from 08 June, 2007 till date i.e. for a period of 17 years as already noted by us. We thus find that such action on the part of the respondents to adjudicate the show cause notice after 17 years would also be hit by the settled principles of law that a belated adjudication of the show cause notice would render sch adjudication arbitrary and illegal. Thus, we are of the opinion that the petition would require admission. Pending the hearing and final disposal of this petition, the impugned show cause notice shall remain stayed.
-
2024 (4) TMI 793
Finalization of the provisional assessment - return the Bank Guarantees furnished at the time of provisional assessment - Import of alkalized cocoa powder from Indonesia - HELD THAT:- We may observe that although stand has been taken by the respondents in the reply affidavit, however, a deficit memo of any nature was furnished to the petitioners. The internal processes which have been undertaken by respondent no. 3 cannot take indefinite time. They are required to be concluded as expeditiously as possible and more particularly when the petitioner has complied all the conditions in regard to the provisional release of the goods. Thus, in the facts and circumstances of the case once all the documents as called upon by the designated officer were submitted by the petitioners including the submission of the certificates of the country of origin (in some of the cases), and if any further compliances were required to be fulfilled by the petitioner, in that case, respondent no. 3 ought to have issued a specific communication calling upon the petitioner to submit such documents/compliances. In absence of any such action being taken coupled by a decision not being taken to finalize the bills of entries, would fall into the realm of arbitrariness, as also abdication of duties by the concerned officers of the department. Thus, we are of the opinion that the petition needs to be disposed of keeping open all contentions of the parties, by directing respondent no. 3 to finalize the bills of entries in each of the petitions, which shall be completed within four weeks from today. If any further documents are required to be submitted by the petitioner, the same be called upon to be submitted within a period of one week from today. Disposed of in the above terms.
-
2024 (4) TMI 792
Remission of duty - Application of Section 23 - Whether the appellant are eligible for remission of duties in respect of duty free goods brought into SEZ and the same were destroyed in fire or otherwise - HELD THAT:- We find that subsequent to the passing of impugned order by the Adjudicating authority, in number of cases, it has been held that if the goods are destroyed in SEZ the duty involved on such destroyed goods can be remitted under the Customs Act. In the case of ONGC Petro Additions Ltd. Vs. CC- [ 2023 (12) TMI 530 - CESTAT AHMEDABAD] , this Tribunal on the same legal issue that whether the goods destroyed in SEZ is eligible for remission of duty or otherwise. In view of the above decision, thee Tribunal has held that the goods destroyed in the SEZ is eligible for remission of duty in terms of Customs Act. However, the Adjudicating authority had no occasion to come across the aforesaid decision. Therefore, the matter needs to be remanded to decide a fresh. Thus, the impugned order is set aside. Appeal is allowed by way of remand to the adjudicating authority.
-
2024 (4) TMI 791
Levy of penalty u/s 114A - Classification of imported goods - duty demand - suppression of facts - import of Shell Flavex Oil 595 B/H - item being Plasticizer - classified by all Custom Houses under CTH 38122090 but DRI, Gandhidham classified under CTH 27079900 - HELD THAT:- We find that the case relates to classification of the imported goods, the appellant have classified the goods under CTH 38122090 on a bona fide belief that the imported goods were Plasticizer and the same were used as Plasticizer in the manufacture of the tyre. The compound Plasticizer is clearly mentioned in the tariff entry against CTH 38122090. Therefore, the bona fide belief of the appellant that the product being a plasticizer classifiable under CTH 38122090 cannot be doubted with. We further find that the appellant without contesting the duty liability paid the entire amount along with interest and seek relief only for waiver of penalty. We also observed that in all over India at all the Ports said goods was being classified and accepted under CTH 38122090 considering the same as plasticizer. Therefore, it is not only belief of the appellant but also the view of the department that the goods is classifiable under CTH 38122090. However, it could only be ascertained that the good is classified under CTH 27079900 after detailed analysis of the product. Therefore, penalty u/s 114A cannot be imposed. Thus, in our mind it is absolutely clear that non payment of duty on the part of the appellant is not by reason of suppression of fact, collusion or any willful misstatement. Therefore, the ingredients for imposing penalty u/s 114A are absent. Therefore, the penalty u/s 114A cannot be imposed. As per the discussion the duty demand along with interest and payment thereof are upheld and maintained. The penalty imposed u/s 114A is set aside. Accordingly, the appeal is allowed in above terms.
-
Service Tax
-
2024 (4) TMI 790
Invocation of Extended period of Limitation - Evasion of service tax - taxability - construction of complex service - failure to file proper ST-3 returns - suppression of material facts - Section 78 of the Finance Act, 1994 - HELD THAT:- Applying provisions of Section 73, to the facts of the present case, it is clear that there was no intention on the part of the Respondent to evade payment of service tax. By evasion, it would be meant that the assessee was eluding and avoiding to pay tax by trickery. The intention of the Respondent in the present case was not to escape or to have an intention to default in payment of taxes so as to defeat the rigorous of the taxing provisions. The basic premise in regard to the applicability of the different ingredients namely fraud, collusion, wilful mis-statement, suppression of facts or contravention of any of the provisions of the said Chapter or of the rules made thereunder, with intent to evade payment of service tax. It would be appropriate to note the jurisprudential understanding of the concept of evasion. In Tamilnadu Housing Board v/s. Collector of Central Excise, Madras and Another [ 1994 (9) TMI 69 - SUPREME COURT] the Supreme Court has held that the word evade in the context of the Central Excise law would mean defeating the provisions of law of paying duty. Thus, evasion is one of the basic requirements for applicability of the extended period under the proviso to sub-section (1) and also in regard to applicability of sub-section (4) of Section 73 of the Finance Act, 1994. It is not in doubt that Respondent, much prior to the issuance of the show cause notice, paid the service tax as also the interest thereon. If this be the case, certainly, the designated officer was not correct in issuing a show cause notice to pass the Order-in-Original. It has been rightly interfered by the Tribunal observing that the department was not justified in invoking the extended period in the present case, and, more particularly, when the entire service tax as also the interest was paid prior to the issuance of the show cause notice, clearly indicating that there was no intention of the Respondent to evade payment of service tax. There are no merit in the Appeal - appeal dismissed.
-
2024 (4) TMI 789
Recovery of erroneous refund - amount paid by the appellant s Chennai Unit towards the pre-deposit in connection with an appeal filed arising out of order in Tuticorin Central Excise Division with a different Registration Number - whether the amount paid by the appellant from their Head Office Registration can be treated as a pre-deposit or not? - time limitation - HELD THAT:- The appellant was made to file a refund-claim before the Assistant Commissioner of GST and Central Excise, Egmore Division, Chennai who has treated the pre-deposit amount as excess payment of tax and rejected the refund-claim as being hit by limitation in terms of provisions of Section 11B of the Central Excise Act, 1944. The appellant s contention that the Commissioner (Appeals), Madurai has accepted the above pre-deposit for the purpose of hearing the appeal filed by the appellant has fallen on deaf ears. The Commissioner (Appeals) has accepted the payment of pre-deposit and decided the appeal on merits. As such, the Department cannot turn back and dispute the nature of payment of pre-deposit while sanctioning the refund-claim. An amount of Rs.4,80,000/- was paid by the appellants in order to avail the remedy of appeal. The nature of payment as a pre-deposit would not undergo any change to become excess payment of tax as contended by the lower Adjudicating Authorities. This contention is totally unjustified and has to be termed as patently illegal. There cannot be any doubt as to the payment made being a pre-deposit may be vide their Head Quarter s Service Tax Registration at Chennai. In the case of SUVIDHE LTD. VERSUS UNION OF INDIA [ 1996 (2) TMI 136 - BOMBAY HIGH COURT] the Hon ble High Court of Bombay has held that in respect of pre-deposit made under Section 35F of Central Excise Act, 1944, the provisions of Section 11B of Act ibid can never be applicable. The amount paid by the appellant towards pre-deposit cannot be treated as an excess payment of duty and the provisions of Section 11B of the Central Excise Act, 1944 cannot be made applicable in the facts and circumstances of this case - the appellant is eligible for refund of pre-deposit of Rs.4,80,000/- paid for filing of an appeal under Section 35F of Central Excise Act, 1944. Appeal allowed.
-
2024 (4) TMI 788
Short payment of service tax - assessee s only contention is that as per section 73 (3) no show cause notice should have been issued with respect to these demands - invocation of Extended period of Limitation - HELD THAT:- The scheme of the service tax requires the assessee to self-assess service tax and file returns as per section 70 of the Finance Act. If the assessee either fails to furnish the service tax return or, having filed the return, fails to assess the tax in accordance with the provisions of the act or rules, section 72 empowers the central excise officer to require the assessee to produce such accounts, documents or other evidences, as he may deem necessary and after taking into account all the relevant materials make the best judgment assessment - The central excise officer may seek any details, which he feel necessary to scrutinize them. The appellant cannot be faulted for not providing any information which it was not required to provide in the ST-3 returns. The central excise officer is given sufficient time to scrutinize the returns and issue a demand under section 73 within the normal period of limitation. If he fails to do so, and if some short payment is not detected and the demand gets time barred, the responsibility for that rests squarely on the officer who is mandated to scrutinize the returns and not on the assessee. In order to invoke extended period of limitation one of the five elements indicated above need to be established and they cannot be presumed. Similarly, to invoke section 73(4), one of the five elements needs to be established and their presence cannot be presumed. The Commissioner has erred in issuing a show cause notice covering the amount of Rs. 5,25,39,217/- which was already paid with interest prior to the issue of show cause notice. This payment is squarely covered by section 73(3)of the Finance Act and it is not excluded by virtue of section 73(4). The demand to this extent needs to be set aside. Service tax payable as reflected in the ST-3 returns but which was not paid during the period 2012-13 and 2013-14 - HELD THAT:- The show cause notice was issued on 10.03.2016. If the service tax was payable as per the return and was not paid even a preliminary scrutiny of the service tax return could have disclosed this fact. As it is already held that the elements for invoking the extended period of limitation were not established in this case the demand of Rs. 6,37,58,915/- on this ground also needs to be set aside. Penalty u/s 78 - HELD THAT:- The imposition of penalty under section 78 on the assessee also needs to be set aside. Dropping of demand of Rs. 2,18,35,039/-for the period 2012-13 and 2013-14 under rule 6(3) of CCR - HELD THAT:- The Commissioner examined the returns and the CA certificates and came to the conclusion that the amount under rule 6(3) was correctly reversed. If Revenue wants to contest this finding, it should put forth reasons as to why this finding is wrong. All that is in the Revenue s appeal and the review order passed by the Committee of Commissioners is that the committee has doubts and, therefore, the Commissioner has committed a grave error. No mistake in the finding of the Commissioner has been pointed out with any evidence whatsoever. Therefore, Revenue s appeal is without any merit and it deserves to be dismissed. The assessee s appeal is allowed and the Revenue s appeal is dismissed with consequential relief to the assessee.
-
2024 (4) TMI 787
Levy of service tax - business support service - making facility to the customers to book online tickets of movies and other shows - HELD THAT:- As per the agreement, card companies were required to reimburse the appellant all the amounts that were being offered by the card companies to their customers through the ticket booking platform. Appellant had entered into agreements with cinema houses for payment of tickets booked through their platform. For booking of tickets through their platform, appellant collected convenience fee and paid service tax on the same. As per the record, appellant has not retained any amount to itself which was received from card companies and which was intended to be paid to cinema houses. The allegation in the proceedings are that the appellant had provided business support service to card companies. It was admitted in the show cause notice that the appellant was not raising any invoice to the card companies. It is very simple in the accounting standards that unless invoice is raised consideration is not collected. Therefore, it is very clear from the record that the appellant was not receiving any consideration from card companies. By relying on the ruling by Hon ble Supreme Court in the case of COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S EDELWEISS FINANCIAL SERVICES LTD. [ 2023 (4) TMI 170 - SC ORDER] , it is held that the appellant was not providing any service to card companies and, therefore, the impugned order set aside. The appeal is allowed.
-
2024 (4) TMI 786
Classification of service - supply of tangible goods for use service or not - providing the cylinder skid vehicle to the service recipient on charge based on per trip - HELD THAT:- On the identical issue in the appellant own case this Tribunal in UNIVERSAL DISTRIBUTORS VERSUS C.C.E. S.T. -VADODARA-I [ 2023 (10) TMI 1382 - CESTAT AHMEDABAD] remanded the matter to the adjudicating authority for passing a fresh order, therefore following judicial discipline no different view can be taken in the present appeal. Form the above order in the appellant s own case matter was remanded to the adjudicating authority. Following the same the present matter also deserves remand so that a common view can be taken in all the appeals. The impugned order is set aside - appeal allowed by way of remand.
-
Central Excise
-
2024 (4) TMI 785
CENVAT Credit - inputs - denial on the ground that the use of such goods for repair and maintenance of plant and machinery by the respondent assessee cannot be considered to have been used in or in relation to the manufacture of final products , as they are not used coextensively in the process of manufacturing of the petroleum products by the respondent assessee - HELD THAT:- Considering the fact that the Tribunal has relied upon the decision in the respondent assessee s own case, as well as in view of the fact that now the issue is no more res-integra in view of the decision of the Hon ble Supreme Court in case of Kisan Co-operative Sugar Factory Ltd. [ 2023 (12) TMI 1303 - SUPREME COURT] wherein the Hon ble Apex Court has held that the interpretation of the expression used in or in relation to manufacture is of a very wide import and takes within its scope and ambit all items used in the process of manufacture whether directly or indirectly and whether contained in the final product or not. The items used for maintenance of plant and machinery are also items used in the manufacture of finished goods. Hence, credit on the items used for maintenance, repair, upkeep or fabrication of plant and machinery are admissible to the assessees. Entitlement on the Cenvat credit on the M/s. Gratings/G.I. Coated Gratings - HELD THAT:- In view of the observation made by the Tribunal in [ 2020 (2) TMI 749 - CESTAT AHMEDABAD] it is observed that the M.S. Gratings were used as accessory for supporting and holding for approaching how to plant and processing units of refinery and platforms for approaching or reaching out the plant is part and parcel of the entire plant and machinery particularly in large scale manufacturing unit, without which the operation of the plant is not possible. It was therefore held by the Tribunal that, therefore the M.S. Gratings used as accessory in such structure is used in relation to the manufacture of final product - the Tribunal has not committed any error in following a Coordinate Bench s decision in the case of the respondent assessee itself. There is no error committed by the Tribunal giving rise to any question of law, much less any substantial question of law arising from the impugned order - Appeal dismissed.
-
2024 (4) TMI 784
CENVAT Credit - inputs and input services - disallowance of entire cenvat credit availed by the appellant on the inputs and input services utilized in the manufacture of goods on which central excise duty was paid and ER-1 returns were filed - HELD THAT:- Revenue has unilaterally come to a conclusion without assigning any justification through the said show cause notice as to how the appellant was required to clear the goods under full exemption under serial No. 47A of N/N. 04/2006-CE dated 01.03.2006. As per the provisions of law, Revenue should have issued the appellant with a show cause notice calling upon them to show cause as to why they should not clear the goods at nil rate of duty applying the provisions at serial No. 47A ibid. Such proceedings would have given complete opportunity to the appellant to explain as to why the said serial number of the said notification was not applicable to the appellant. Without giving any opportunity to the appellant to present their defence on the contention of Revenue that the appellant should have cleared the goods availing full exemption, Revenue has unilaterally decided that the said serial number of the said notification was applicable to the appellant. These present proceedings are not sustainable - the impugned order is set aside - appeal allowed.
-
Indian Laws
-
2024 (4) TMI 783
Dishonour of Cheque - Scope of interim compensation - Liability of the Director the Company - Provisions of Section 143A of the NI Act is mandatory in nature or not - HELD THAT:- In the present case, the Impugned Order dated 24.07.2021 reflects that the learned Trial Court was of the opinion that Section 143A of the NI Act, is mandatory in nature and interim compensation has to be granted to the complainant in terms of the same as a rule and not as an exception. This view of the learned Trial Court cannot be upheld in view of the judgment of the Supreme Court in RAKESH RANJAN SHRIVASTAVA VERSUS THE STATE OF JHARKHAND ANR. [ 2024 (4) TMI 719 - SUPREME COURT] . The Impugned Orders do not reflect any consideration of the learned Trial Court to the plea of the petitioners that the respondent no. 2 also holds security in form of the flats and in form of a statement made in the course of the proceedings before the High Court of Judicature at Bombay that the said company will not be disposing of the flats or creating any third-party rights in the plot of land which is the subject property. This was an important consideration which should have been taken into account by the learned Trial Court while deciding on the application filed by the respondent no. 2 under Section 143A of the NI Act. What is also relevant is that Section 143A of the NI Act empowers the Court to pass a direction for payment of interim compensation only against the drawer of the cheque . In the present case, admittedly, the drawer of the cheques is the company and not the petitioners. The petitioners have been arrayed as accused invoking Section 141 of the NI Act. The Impugned Order dated 11.03.2022, however, relies upon Section 141 of the NI Act to hold that a direction to pay the interim compensation under Section 143A of the NI Act can be made even against persons who, though are not the drawer of the cheque , are still deemed to have committed the offence under Section 138 of the NI Act. This view of the learned Trial Court cannot be sustained. The Impugned Orders, having been premised on incorrect appreciation of law and having ignored vital and relevant considerations for passing an order under Section 143A of the Act, cannot be sustained - petition allowed.
-
2024 (4) TMI 782
Dishonour of Cheque - compounding of offences - amicable settlement of disputes - Sections 138 and 147 of the Negotiable Instruments Act - HELD THAT:- In the facts of the instant case and the statutory provisions and the mandate of the Hon ble Supreme Court, in cases of Kanchan Mehta [ 2017 (10) TMI 218 - SUPREME COURT] and P. Mohanraj [ 2021 (3) TMI 94 - SUPREME COURT] , once the proceedings under Section 138 have been held to be proceedings in the form of a civil sheep in a criminal wolf s clothing, therefore, once the petitioner-accused has amicably decided to settle/liquidate/discharge his liability, though, the transaction-proceedings have a tinge of criminal liability, then, on settling the entire liability in view of Section 147 of the Negotiable Instruments Act, the compounding of offences, on discharge of liability, appears to be genuine, which is certainly is a step towards securing the ends of justice. It is relevant to observe that once the Respondent-Complainant who had initiated the proceedings under Section 138 of the Negotiable Instruments Act, 1881, has received his cake then, no useful purpose will be achieved in continuing the criminal proceedings, against the accused-petitioner who has discharged/liquidated his liability. Notably, the object of Section 147 of the Negotiable Instruments Act, 1881, is that in case the accused under the aforesaid enactment remits/discharges or liquidates his liability then such a person can be absolved of the criminal action-prosecution by permitting compounding of offence in proceedings under Section 138 of the Act. Moreover, once the petitioner-accused has discharged/liquidated his liability towards Respondent- Complainant, therefore, the continuance of criminal proceedings will not serve any purpose. The compounding of an offence would enable both the parties to lead life of respect and dignity in the society. Once, no dispute remains between the parties to the lis, then obviously the law cannot be so harsh so as to stand as a wall between the parties notwithstanding the amicable settlement inter se the parties - The power to do complete justice is the very essence of every judicial justice dispensation system. It cannot be diluted by distorted perceptions and is not a slave to anything, except to the caution and circumspection, the standards of which the Court sets before it, in exercise of such plenary and unfettered power inherently vested in it while donning the cloak of compassion to achieve the ends of justice. This Court on the basis of the material placed on record is satisfied that the petitioner-accused [Sunil Kumar] and Respondent No.1-Complainant have settled the dispute and Respondent No.1-Complainant has no grudges against the petitioner accused, who has liquidated/discharged/remitted his liability in favour of the complainant. In these circumstances, allowing the judicial prosecution to continue will result in disturbing the peace and harmony but will also create or give rebirth to bitterness and enmity amongst them. Moreover, the ends of justice would be satisfied in case, the parties herein are allowed to compromise. Since, the petitioner-accused [Sunil Kumar] is suffering custody in Sub Jail, Nurpur, District Kangra, [H.P.]; therefore, the Respondents-State Authorities are directed to release the petitioner-accused [Sunil Kumar], if not required in any other case. Release warrants be prepared and consequential action be taken expeditiously in accordance with law - Petition disposed off.
|
