TMI Tax Updates - e-Newsletter
June 16, 2018

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy FEMA Service Tax Central Excise

Highlights / Catch Notes

GST

• GST - e-way bill - Where goods move from a DTA unit to a SEZ unit or vice versa located in the same State, there is no requirement to generate an e-way bill, if the same has been exempted under rule 138(14)(d) of the CGST Rules.
  Visit to Get Source

  ---

• GST - e-way bill - movement of goods with state (intra-state) - but transportation through another state while moving - if the goods transit through a second State while moving from one place in a State to another place in the same State, an e-way bill is required to be generated.
  Visit to Get Source

  ---

• GST - e-way bill - transportation of goods by railways - the railways shall not deliver the goods unless the e-way bill is produced at the time of delivery.
  Visit to Get Source

  ---

• GST - registration - For the purpose of auction of tea, coffee, rubber, etc, the principal and the auctioneer may declare the warehouses, where such goods are stored, as their additional place of business. The buyer is also required to disclose such warehouse as his additional place of business if he wants to store the goods purchased through auction in such warehouses.
  Visit to Get Source

  ---

• GST Valuation - servicing of car - Where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately.
  Visit to Get Source

  ---

• GST - Valuation - job work - amortization of cost of moulds and dies etc. - if the contract between OEM and component manufacturer was for supply of components made by using the moulds/dies belonging to the component manufacturer, but the same have been supplied by the OEM to the component manufacturer on FOC basis, the amortised cost of such moulds/dies shall be added to the value of the components.
  Visit to Get Source

  ---

• GST - Valuation - job work - amortization of cost of moulds and dies etc. - while calculating the value of the supply made by the component manufacturer, the value of moulds and dies provided by the OEM to the component manufacturer on FOC basis shall not be added to the value of such supply
  Visit to Get Source

  ---

• GST - fabric processors shall be eligible for refund of unutilized ITC on account of inverted duty structure under section 54(3) of the CGST Act even if the goods (fabrics) supplied to them are covered under notification No. 5/2017-Central Tax (Rate) dated 28.06.2017.
  Visit to Get Source

  ---

• GST - subject to the provisions of section 17(5) of the CGST Act, if event management services, hotel, accommodation services, consumables etc. are received by a SEZ developer or a SEZ unit for authorised operations, as endorsed by the specified officer of the Zone, the benefit of zero rated supply shall be available in such cases to the supplier.
  Visit to Get Source

  ---

• GST – services of short term accommodation, conferencing, banqueting etc., provided to a SEZ developer or a SEZ unit shall be treated as an inter-State supply.
  Visit to Get Source

  ---

• GST – CONCEPT & STATUS (Updated as on 01st June 2018)
  Visit to Get Source

  ---

• Classification of goods - implants for joint replacements - rate of tax - The implants for joint replacements falling under HSN Code 90213100 are covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 5%.
  Visit to Get Source

  ---

• Classification of goods - Lightning Arrester - Earthing Pipe - Solid Rod Earthing - Back Fill Compound - service of installation of Earthing System - to be classified under the different headings as per the decision.
  Visit to Get Source

  ---

• Supply of goods - inter-state trade - The applicant are not exempted from tax under GST on their outward supplies made to ocean going merchant vessels on foreign run, Indian Naval Ships and Indian Coast Guard Ships.
  Visit to Get Source

  ---

• Anti-Profiteering - in respect of the two invoices dated 27-07-2017 as the installation of the second lift had been completed after coming in to force of the CGST Act, 2017, he was liable to be charged GST at the rate which was prevalent on 27-07-2017 - There is no substance in the claim made by the Applicant.
  Visit to Get Source

  ---

Income Tax

• TDS u/s 194I - payment of land rent to Airport Authority of India Ltd. - amounts alleged to have been paid to AAI does not constitute rent, therefore the application of provisions under section 194I does not arise at all.
  Visit to Get Source

  ---

• Initiation of proceedings u/s 147 - reopening u/s 147 of the Act by issuing the notice u/s 148 of the Act on the basis of mechanical approval by the Pr. CIT without recording satisfaction on the objective material is quashed
  Visit to Get Source

  ---

• Disallowance u/s. 40(a)(ia) - tax has to be deducted u/s 194J or 194C for ‘Channel Placement Fees’ - TDS is to be deducted u/s 194C and not u/s 194J
  Visit to Get Source

  ---

• TDS u/s 194C - Disallowance u/s 40(a)(ia) - non submission of forms/ declarations in the office of Chief Commissioner/ Commissioner as prescribed U/s 191A(2) - non production of Form 15G/15H - non production of Form 15G/15H would not lead to disallowance U/s 40(a)(ia).
  Visit to Get Source

  ---

• Excise duty refund claim - capital gain or busniss income - Where there is a refund of excise duty it would go to reduce the project cost/capital work in progress since it is relatable only to the capital assets - duty drawback reduce the project cost and therefore cannot be treated as business income
  Visit to Get Source

  ---

Customs

• Revocation of CHA License - failure to discharge obligations under Regulation 11(n) of the Customs Brokers Licensing Regulations, 2013 - The show-cause notice being within limitation, the authority acted within jurisdiction in issuing it and adjudicating thereon. The impugned order does not suffer for lack of jurisdiction.
  Visit to Get Source

  ---

• Valuation - The royalty and lump sum fees paid in relation to manufacture of goods in India cannot be padded on to the declared import value of the impugned goods.
  Visit to Get Source

  ---

• Job-Work - High-Seas Sale - While the department has raised the allegation that the high sea Sale agreement is “fake” there has been no evidence brought forth to substantiate the same. - these consignments too have been re-exported after being job worked upon - demand cannot sustain.
  Visit to Get Source

  ---

• Refund of SAD - the imported gloves have been sold by the assessee as gloves and it is only by deeming fiction of law that the activities of labeling, relabeling, packing, repacking etc., has been made as amounting to manufacture, we find that there is no justification to hold that the gloves have undergone any change.
  Visit to Get Source

  ---

• Claim of compensation / damage - Theft of seized goods - The Customs Act, 1962 does not provide for any right or remedy by way of compensation/damages. - The Tribunal being a creature of the statute is empowered to pass orders only on appeals as provided in section 129A of the Customs Act.
  Visit to Get Source

  ---

FEMA

• Investment by Foreign Portfolio Investors (FPI) in Debt - to provide some operational flexibility as well as transition path for FPIs and custodians to adapt to amended regulations.
  Visit to Get Source

  ---

Corporate Law

• As per Article-38: the quorum for a meeting of the Board of Directors shall be 1 /3rd of its total strength (any fraction contained in that 1/3rd being rounded off as one) or two Directors whichever is higher.
  Visit to Get Source

  ---

IBC

• Since the respondent Corporate Debtor has admitted the term of employment of applicant, and there being default in payment of salary of that period, the application deserves to be admitted on that score alone for triggering Corporate Insolvency Resolution Process against the respondent corporate debtor.
  Visit to Get Source

  ---

Service Tax

• BAS - appellant are engaged in providing certain services of customer assessment and documentation on behalf of ICICI in respect of sanction of commercial loans to vehicles - activities undertaken by the respondents fall under ‘Business Auxiliary Service’.
  Visit to Get Source

  ---

• Construction of complex services - where the appellants do not receive any bookings or advances, the appellants complete the construction and offer the flats for sale. No service element exists. Services rendered by the appellants in the course of construction is a service but to themselves.
  Visit to Get Source

  ---

• Classification of services - whether rerubberisation undertaken by the appellants on behalf of their customers was classifiable under the category of ‘Management, Maintenance or Repair’ Services or under the category of ‘Business Auxiliary Services’? - to be classified under the category of BAS.
  Visit to Get Source

  ---

• Valuation - Commercial Coaching or Training Service - Students make 100% payment to M/s Aptech Ltd. - Assessee gets only 80% of such fees and discharge service tax on 80% - demand of service tax cannot sustain on 100% payment.
  Visit to Get Source

  ---

• Business Auxiliary Service - the appellant, as a contractor, has engaged in collecting statutory levies on behalf of the Government department (CTD)/ statutory authority (NHAI) neither of whom are engaged in business - the levy of Service Tax cannot be sustained on the Commission retained by the appellant.
  Visit to Get Source

  ---

• The appellant has not provided goods but has performed specific jobs - since the appellant has not supplied any machinery equipments or appliance for use, therefore the services are not taxable under the category of Supply of Tangible Goods Service.
  Visit to Get Source

  ---

• SEZ unit - Refund of service tax paid - Renting of Immovable Property Service - The requisite for obtaining approval is only a procedure to be complied, for the substantive benefit of exemption from payment of service tax. When the services have been approved, the benefit of exemption cannot be denied.
  Visit to Get Source

  ---

• Club or association service - The accrued interest received from the bank on an amount deposited cannot be treated as “subscription” - demand do not sustain
  Visit to Get Source

  ---

• Classification of services - commission agent for distribution of products of Bunge in designated territory. - appellant cannot be brought within the fold of clearing and forwarding agents service. They are correctly classifiable only as a commission agent for BAS under Section 65 (19) of the Act.
  Visit to Get Source

  ---

• Demand of service tax on supply of DSC (Digital Signature Certificate) - The appellant issues DSC as per license issued to them by Controller of Certifying Authorities, Appellants have to follow the procedures prescribed under the Information Technology Act, 2000. - merely because SSLC is issued under voluntary requirement of the customer the same cannot be classified under Information Technology Services.
  Visit to Get Source

  ---

Central Excise

• MRP Based Valuation - it was alleged that the assessee removed the MRP sticker - There is no further allegation that any new MRP sticker were affixed to the goods in question - In the absence of any allegation of fixation or alteration of MRP, no demand can sustain.
  Visit to Get Source

  ---

• Valuation - whether the value of the TEJNES software loaded into / supplied along with multiplexers is required to be added to the value of multiplexers manufactured and cleared by the appellants? - Held Yes
  Visit to Get Source

  ---

• Refund of unutilized CENVAT credit - closure of factory / cancellation of registration - The appellant is eligible for refund of the balance CENVAT credit when the appellant ceases to be a manufacturer due to closure of factory
  Visit to Get Source

  ---

Articles

• NAA RULING ON SUPPLY OF LIFT : NO ANTI-PROFITEERING CHARGE PROVED

Notifications

• Customs

• 53/2018 - dated 14-6-2018 - Cus (NT)
  Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver- Reg

  ---

• GST - States

• F.A-3-61-2017-1-V-(50) - dated 31-5-2018 - Madhya Pradesh SGST
  Amendment in notification No. FA-3-61-2017-l-V (101) dated 15th September, 2017, namely

  ---

• F.1-11(91)-TAX/GST/2018 - dated 13-6-2018 - Tripura SGST
  Tripura State Goods and Services Tax (Fifth Amendment) Rules, 2018.

  ---

• F.1-11(91)-TAX/GST/2018 - dated 13-6-2018 - Tripura SGST
  Goods which may be disposed off by the proper officer after its seizure under the Tripura State Goods and Services Tax Act, 2017

  ---

• 13/2018–C.T./GST - dated 6-6-2018 - West Bengal SGST
  Extension of Threshold Limit for Generation of E-WayBill in case of Intra-State movement without passing through any other State from ₹ 50,000/- to ₹ 1,00,000/-.

  ---

• 12/2018–C.T./GST - dated 31-5-2018 - West Bengal SGST
  Extension of Due Date of Filing GSTR-6 for the Months of July, 2017 to June, 2018 till 31/07/2018.

  ---

• 11/2018–C.T./GST - dated 30-5-2018 - West Bengal SGST
  Seeks to notify that intra-State e-way bill shall effective from the 3rd day of June, 2018 in place of the 1st day of June, 2018

  ---

• 24/2018 – State Tax - dated 28-5-2018 - West Bengal SGST
  Seeks to notify NACIN as the authority for conducting the examination for GST Practitioners under rule 83 (3) of the CGST Rules, 2017

  ---

Circulars / Instructions / Orders

• VAT - Delhi - 06/2018 - dated 12-6-2018
  Regarding Recovery
• VAT - Delhi - 03/2018-19 - dated 15-5-2018
  Regarding Assessment orders under the CST Act, 1956 for the year 2013-14
• GST - 48/22/2018 - dated 14-6-2018
  Clarifications of certain issues under GST– regarding
• FEMA - 31 - dated 15-6-2018
  Investment by Foreign Portfolio Investors (FPI) in Debt - Review (Updated up to February 26, 2021)
• DGFT - File No. 01/94/180/078/AM19/PC-4 and File No- 01/94/180/019/AM19/PC-4 - dated 14-6-2018
  Corrigendum to Public Notice No. 09/2015-2020 dated 14.05.2018

News

• GST – CONCEPT & STATUS (Updated as on 01st June 2018)

  ---

• INDIA’S FOREIGN TRADE: May 2018

  ---

• Commerce Minister reviews progress of sectoral export promotion strategy

  ---

• Commerce & Industry Minister visits US, meets USTR

  ---

• RBI Reference Rate for US $

  ---

• Findings of 160 cost-benefit analyses in Andhra Pradesh and Rajasthan presented to NITI Aayog

  ---

Case Laws:

• GST

• 2018 (6) TMI 705
  Classification of goods - implants for joint replacements - rate of tax - whether the products get covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 5% or Serial No. 221 of Schedule II of the Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 12%? Held that:- The implants for joint replacement is clearly and most specifically covered under Sl No. E(9) of List 3 of Entry 257 of Schedule I attracting 5%GST. Further, there is a similar entry under Sl No. 578 - List 30 Entry E(9) of Notification No. 5012017 - Customs dated 30.06.2017 where under the effective rate of Basic Customs Duty is Nil. On a plain reading of entry at Serial No. E(9) of List 3 of Entry 257 of Schedule I and entry at Serial No. 221 of Schedule II of Notification No. 01/2017 - Central Tax (Rate) dated 28.06.2017, it is evident that joint replacements are specifically covered under the entry at Serial No. E(9) of List 3 of Entry 257 of Schedule I whereas the entry at Sl. No. 221 of Schedule II is a general entry that covers artificial parts of body. Therefore, applying the principle under Rule 3 of the General Rules of Interpretation of the First Schedule to the Customs Tariff Act, 1975; that the heading which provides the most specific description shall be preferred to headings providing a more general description we hold that the joint replacements falling under HSN Code 90213100 are covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GSTat the rate of 5%. Ruling:- The implants for joint replacements falling under HSN Code 90213100 are covered under Serial No. E(9) of List 3 of Entry 257 of Schedule I of Notification No. 0112017 - Central Tax (Rate) dated 28.06.2017 attracting GST at the rate of 5%.

  ---

• 2018 (6) TMI 704
  Classification of goods - Lightning Arrester - Earthing Pipe - Solid Rod Earthing - Back Fill Compound - service of installation of Earthing System. Lightning Arrester - whether classified under Chapter Heading 8535 or otherwise? - Held that:- The Tariff Heading 8535 covers the products ‘Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, fuses, lightning arresters, voltage limiters, surge suppressors, plugs and other connectors, junction boxes), for a voltage exceeding 1,000 volts”. Thus, the product ‘Lightning Arrester’ is specifically covered under Tariff Heading 8535. Earthing Pipe - whether classified under Chapter Heading 8535 or otherwise? - Held that:- The product ‘Earthing Pipe’ is specifically processed to make usable solely and principally for lightning arrester system and it is placed below ground level and connected with the Lightning Arrester system - the ‘parts suitable for use solely or principally with the apparatus of headings 8535, 8536 or 8537’ are covered under Tariff Heading 8538. Accordingly, the product ‘Earthing Pipe’ merit classification under Tariff Heading 8538. Solid Rod Earthing - whether classified under Chapter Heading 8535 or otherwise? - Held that:- The ‘Solid Rod Earthing’ are solid iron rods of required size, which are machined at both ends for easy fitting. Tariff Heading 7215 covers ‘Other bars and rods of iron or non-alloy steel’ which covers the product ‘Solid Rod Earthing’. Had the product ‘Solid Rod Earthing’ been such as usable solely and principally for lighting arrester system, it would have been classifiable under Tariff heading 8538, however nothing is available on record to suggest so - product do not merit classification under Tariff Heading 8538. Back Fill Compound - whether classified under Chapter Heading 3824 or otherwise? - Held that:- The product ‘Back Fill Compound’ is prepared by mixing Bentonite Powder, Wood Charcoal Powder and Graphite Powder. Tariff Heading 3824 covers ‘Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included’. Accordingly, the product ‘Back Fill Compound’ merit classification under Tariff Heading 3824. Service of installation of Earthing System - Held that:- ‘Electrical installation services including Electrical wiring & fitting services, fire alarm installation services, burglar alarm system installation services’ fall under Service Accounting Code 995461. Accordingly, the Service Accounting Code 995461 covers the service of installation of ‘Earthing System’ provided by the applicant. Ruling:- The product ‘Lightning Arrester’ is classifiable under Tariff Heading 8535. The product ‘Earthing Pipe’ is classifiable under Tariff Heading 8538. The product ‘Solid Rod Earthing’ is classifiable under Tariff Heading 7215 and is correctly classifiable under Tariff Heading 7215. The product ‘Back Fill Compound’ is classifiable under Tariff Heading 3824. The service of installation of Earthing System is classifiable under Service Accounting Code 9954.

  ---

• 2018 (6) TMI 703
  Classification of goods - Lightning Arrester - Earthing Pipe - Solid Rod Earthing - Back Fill Compound - service of installation of Earthing System. Lightning Arrester - whether classified under Chapter Heading 8535 or otherwise? - Held that:- The Tariff Heading 8535 covers the products ‘Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, fuses, lightning arresters, voltage limiters, surge suppressors, plugs and other connectors, junction boxes), for a voltage exceeding 1,000 volts”. Thus, the product ‘Lightning Arrester’ is specifically covered under Tariff Heading 8535. Earthing Pipe - whether classified under Chapter Heading 8535 or otherwise? - Held that:- The product ‘Earthing Pipe’ is specifically processed to make usable solely and principally for lightning arrester system and it is placed below ground level and connected with the Lightning Arrester system - the ‘parts suitable for use solely or principally with the apparatus of headings 8535, 8536 or 8537’ are covered under Tariff Heading 8538. Accordingly, the product ‘Earthing Pipe’ merit classification under Tariff Heading 8538. Solid Rod Earthing - whether classified under Chapter Heading 8535 or otherwise? - Held that:- The ‘Solid Rod Earthing’ are solid iron rods of required size, which are machined at both ends for easy fitting. Tariff Heading 7215 covers ‘Other bars and rods of iron or non-alloy steel’ which covers the product ‘Solid Rod Earthing’. Had the product ‘Solid Rod Earthing’ been such as usable solely and principally for lighting arrester system, it would have been classifiable under Tariff heading 8538, however nothing is available on record to suggest so - product do not merit classification under Tariff Heading 8538. Back Fill Compound - whether classified under Chapter Heading 3824 or otherwise? - Held that:- The product ‘Back Fill Compound’ is prepared by mixing Bentonite Powder, Wood Charcoal Powder and Graphite Powder. Tariff Heading 3824 covers ‘Prepared binders for foundry moulds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included’. Accordingly, the product ‘Back Fill Compound’ merit classification under Tariff Heading 3824. Service of installation of Earthing System - Held that:- ‘Electrical installation services including Electrical wiring & fitting services, fire alarm installation services, burglar alarm system installation services’ fall under Service Accounting Code 995461. Accordingly, the Service Accounting Code 995461 covers the service of installation of ‘Earthing System’ provided by the applicant. Ruling:- The product ‘Lightning Arrester’ is classifiable under Tariff Heading 8535. The product ‘Earthing Pipe’ is classifiable under Tariff Heading 8538. The product ‘Solid Rod Earthing’ is classifiable under Tariff Heading 7215 and is correctly classifiable under Tariff Heading 7215. The product ‘Back Fill Compound’ is classifiable under Tariff Heading 3824. The service of installation of Earthing System is classifiable under Service Accounting Code 9954.

  ---

• 2018 (6) TMI 702
  Supply of goods - inter-state trade - Exemption from GST - outward supplies made to ocean going merchant vessels on foreign run, Indian Naval Ships and Indian Coast Guard Ships - Reverse charge - Whether appellant are exempted from tax under GST on their outward supplies made to ocean going merchant vessels on foreign run, Indian Naval Ships and Indian Coast Guard Ships or not? - If at all they are liable for GST on their outward supplies whether they can collect the GST from the recipient for the goods namely:- (a) Ocean going merchant vessels on foreign run; (b) Indian Naval Ships; and (c) Indian Coast Guard Ships or from their authorized agents. Held that:- The goods which are received by the applicant are within the Customs area as defined under Section 2 (11) of the Customs Act, 1962. Accordingly goods cleared / supplied by the applicant is to be treated as supply of goods in the course of inter-State trade. Furthermore, the goods supplied by the applicant is also not an exempt supply as per the definition under Section 2 (47) of the Central Goods and Service Tax Act, 2017 as it is neither nil rated or being exempt by any Notification - some of the supplies of applicant may fall under the definition of "exports" which is considered a zero rated supply. However, the same is not within the prerogative of present application. Ruling:- The applicant are not exempted from tax under GST on their outward supplies made to ocean going merchant vessels on foreign run, Indian Naval Ships and Indian Coast Guard Ships. The applicant can collect the applicable GST from their customers, in case it is not exports. However, in case of exports the option lies with the applicant based on manner of exports i.e. whether they intend to export under bond or on payment of tax.

  ---

• 2018 (6) TMI 687
  Anti-Profiteering - Non-discharge of GST - it has been alleged that Respondent had not charged GST on the base price of the lift ordered by him from the Respondent, after excluding the pre-GST Excise Duty on the material component and thus he had been charged tax twice on the same material - Held that:- It is clear from the perusal of the record that the Applicant had paid advance for purchase of this lift and he was charged the Service Tax which was leviable at the time of issue of the invoice on 28-06-2017, which he has not disputed and which is also correct as the Applicant was liable for payment of Service Tax under the then applicable provisions of Finance Act, 1994 - However in respect of the two invoices dated 27-07-2017 as the installation of the second lift had been completed after coming in to force of the CGST Act, 2017, he was liable to be charged GST at the rate which was prevalent on 27-07-2017. There is no substance in the claim made by the Applicant and therefore, this Authority accepts the report dated 16-04-2017 filed by the DGSG under Rule 129 (6) of the CGST Rules, 2017 and hereby orders dropping of the present proceedings as no violation of the provisions of Section 171 of the CGST Act, 2017 has been established.

  ---

• Income Tax

• 2018 (6) TMI 701
  Demand of interest u/s 234B, 234C - Tax payable u/s 115JB (MAT) - Liability of pay advance tax - Whether the assessee was liable to pay advance tax - Revenue s case is that in view of the subsequent amendment to Section 115JB the deficit on the part of the assessee on account of deferred tax liability should have been taken into account as a shortfall and consequential interest payable thereon should have been determined. Held that:- Commissioner was required to assess whether there was any shortfall in the payment of advance tax - Commissioner undertook the exercise in the appropriate perspective and ascertained whether, at the relevant point of time, there was any shortfall in payment of advance tax by the assessee - the question of interest or penalty would arise if a default is committed by an assessee in depositing the tax - thus Commissioner cannot be questioned since the Commissioner completed the totality of the picture by not only arriving at a finding that there was no default at the relevant point of time when the advance tax was deposited by the assessee but also that even if there was a default upon the retrospective operation of the amendment to Section 115JB, no claim on account of interest could be foisted on the assessee in the circumstances. Thus it does not appear that the Commissioner failed to undertake the exercise as called upon by the relevant order of March 26, 2012 as passed by the Supreme Court or that the Appellate Tribunal erred in failing to appreciate that the Commissioner had fallen into error - hence appeal is dismissed.

  ---

• 2018 (6) TMI 700
  Assessee in default u/s 220 - seeking tax clearance certificate u/s 230 - Liability of directors of private company in liquidation u/s 179 - personal liability - jointly and severally liability - petitioner was in jail when notice was ordered - non affording the petitioner an opportunity of hearing - Held that:- In the light of the various orders issued by the authorities under the Act against the petitioner in his personal capacity and in the light of Ext.P13 order, the petitioner cannot dispute his liability mentioned therein. The liability of the petitioner mentioned in Ext.P8 order is more than 400 Crores. In the circumstances, the second respondent cannot be found fault with for having insisted Tax Clearance Certificate for the petitioner to leave the country under the first proviso to subsection (1A) of Section 230 of the Act. There cannot be any dispute to the fact that an order under Section 179 of the Act cannot be passed without affording the parties concerned an opportunity of hearing. - In so far as the petitioner was in jail when notice was ordered in the proceedings initiated against him under Section 179 of the Act, the said notice should have been served on him through the Superintendent of the jail wherein he was detained. The said course admittedly has not been adopted by the respondents. - Order is liable to be set aside and the matter has to be considered afresh.

  ---

• 2018 (6) TMI 699
  TDS u/s 194I - charge of TDS and interest on account of non-deduction of TDS - payment of land rent to Airport Authority of India Ltd. - Held that:- As decided in assessee's own case for AY 2011-12 2017 (7) TMI 1144 - ITAT KOLKATA[] the assessee is not in default for non-deduction of TDS as the payment alleged to have been paid to AAI was in turn offered by AAI as income in its account and paid the tax - amounts alleged to have been paid to AAI does not constitute rent, therefore the application of provisions under section 194I does not arise at all. No default as amounts alleged to have been paid to AAI does not constitute rent, therefore the application of provisions under section 194I does not arise at all.- Decided in favour of assessee TDS u/s. 194A/194H - charge of TDS and interest on payment of bank guarantee commission and bank charge - Held that:- As decided in assessee's own case for AY 2011-12 payments made to bank guarantee and the payments of commission paid for bank guarantee are not covered by the provisions of section 194H of the Act. In the present case, ITD Cementation India Ltd. is a sister concern of the assessee. The said sister concern arranged loan from IDBI to the assessee and the impugned amount is to be paid to IDBI towards bank guarantee, commission, bank charges and interest by the sister concern and the same were reimbursed by the assessee to its sister concern. There is no element of income in such payments - Decided in favour of assessee

  ---

• 2018 (6) TMI 698
  Revision u/s 263 - no proper opportunity was given to the assessee to discharge the onus casted upon it as required in sec. 68 matters - no statutory notices were served upon - Held that:- We note that other than notices u/s. 142(1) of the Act dated 29.10.2013 and 15.01.2014, the AO has not issued any statutory notices. AO acknowledges that Ld. AR of the assessee appeared before him on 03.03.2014 however the AO says his first notice dated 29.03.2013 was un-served, then the question is how the Ld AR of assessee appeared before the AO. So when the Ld. AR of the assessee appeared, AO should have called for proper explanation and conducted the investigation in a fair manner in the light of CIT order. Without doing that AO has suddenly come to a conclusion that assessee failed to prove the genuineness of the share capital. These facts per-se reveal non-application of mind In the light of the Hon’ble Supreme Court’s decision in Tin Box Company (2001 (2) TMI 13 - SUPREME COURT) and taking into consideration the fact the order of the Ld. CIT passed u/s. 263 of the Act in similar cases being upheld up to the level of Apex Court, and taking note of Hon’ble Delhi High Court’s order in Jansampark Advertising & Marketing Pvt. Ltd. (2015 (3) TMI 410 - DELHI HIGH COURT), we set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO for de novo assessment and to decide the matter - Appeal of assessee is allowed for statistical purposes .

  ---

• 2018 (6) TMI 697
  Revision u/s 263 - no proper opportunity was given to the assessee to discharge the onus casted upon it as required in sec. 68 matters - Held that:- We note that only one notice u/s. 142(1) of the Act was issued against the assessee company on 28.08.2013 and the assessee attended the hearing and filed written submission, which fact has been acknowledged by the AO. However, thereafter no notice was issued to assessee. AO after issuing sec. 131 notices to the share applicants (date not specified) and taking note that none appeared before him, drew adverse inference against the assessee. Since the Ld. AR of the assessee appeared, he should have called him again for proper explanation and conducted the investigation in a fair manner. Without doing that AO has suddenly come to a conclusion that assessee failed to prove the genuineness of the share capital. We find force in the submission of the Ld. AR that no proper opportunity was given to assessee by AO during the reassessment proceedings and so we are, therefore, of the opinion that assessee did not get proper opportunity before the AO during reassessment proceedings. In the light of the Hon’ble Supreme Court’s decision in Tin Box Company (2001 (2) TMI 13 - SUPREME COURT) and taking into consideration the fact the order of the Ld. CIT passed u/s. 263 of the Act in similar cases being upheld up to the level of Apex Court, and taking note of Hon’ble Delhi High Court’s order in Jansampark Advertising & Marketing Pvt. Ltd. (2015 (3) TMI 410 - DELHI HIGH COURT), we set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO for de novo assessment and to decide the matter - Appeal of assessee is allowed for statistical purposes .

  ---

• 2018 (6) TMI 696
  Accrual of interest income - Exclusion of interest accrued on the funds received from the State Government towards Lift Irrigation Scheme Funds [LIS] - Held that:- The funds are clearly allocated for a specific purpose and assessee has no control over the funds, except utilizing them for the scheme for which it was granted. These funds are also kept separately and the interest was also accounted for on behalf of the Government and has kept separately from assessee’s transactions. Following case of M/s Bokaro Steel [1998 (12) TMI 4 - SUPREME COURT] the decision of Ld.CIT(A) does not require any modification. Nothing was placed on record to counter the findings of CIT(A) both on facts and on law. In the result, all the Revenue appeals are dismissed.

  ---

• 2018 (6) TMI 695
  Penalty u/s 271(1)(c) - AO has held that the act of claiming expenditure which was not allowable under the provisions of the Act was an act of furnishing of inaccurate particulars of income and concealment - Held that:- The explanation of the assessee regarding inadvertent error lacked bona fide. However, with regard to the provisions of section 271(1)(c) pertaining to penalty, the Hon’ble Apex Court has authoritatively laid down that making of a claim by the assessee which is not sustainable will not tantamount to furnishing inaccurate particulars. In CIT vs. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT) - Decided in favour of assessee.

  ---

• 2018 (6) TMI 694
  Levy of penalty u/s 271(1)(c) - addition made on account of disallowances out of expenses - Held that:- As decided in assesee's own case [2017 (12) TMI 566 - ITAT DELHI] this issue has been set aside to the file of the ld. CIT(A) to be decided afresh by providing an opportunity of being heard to the assessee. - Since, the penalty sustained u/s 271(1)(c) of the Act is directly related to the addition sustained by the ld. CIT(A) out of the expenses, the said issue has been set aside to the file of the ld. CIT(A). Therefore, the present issue relating to the levy of penalty u/s 271(1)(c) of the Act is also restored to the file of the ld. CIT(A) to be adjudicated after considering the outcome of the appeals on quantum. - Decided in favour of assessee for statistical purposes.

  ---

• 2018 (6) TMI 693
  Initiation of proceedings u/s 147 - approval/sanction given by the Pr. CIT without recording satisfaction - Held that:- Approval of Pr.CIT was sought before initiating the proceedings u/s 147 and approval of CIT was given without applied his mind while giving the approval for reopening the assessment - hence following the judicial pronouncements in case of ITO vs. N.C. Cables Ltd. [2014 (11) TMI 593 - ITAT DELHI] and by keeping in view that the approval/sanction given by the Pr. CIT without recording satisfaction, we are of the view that the reopening in the present case is not sustainable - hence reopening u/s 147 of the Act by issuing the notice u/s 148 of the Act on the basis of mechanical approval by the Pr. CIT without recording satisfaction on the objective material is quashed - Decided in favor of assessee.

  ---

• 2018 (6) TMI 692
  Disallowance u/s 14A r.w.r. 8D - non recording of satisfaction - dividend received though exempt has already suffered tax u/s 115-O - application of section 14A to income taxable u/s 115JB (MAT) - Held that:- AO had failed to comply with the statutory requirement of recording his satisfaction as to why the claim of disallowance offered by the assessee u/s 14A in its return of income for the year under consideration was not to be accepted, having regard to its accounts - order passed by the A.O in the case before us, is not in conformity with the judgment of the Hon’ble Apex Court in the case of Godrej & Boyce Manufacturing Co. Ltd. Vs. DCIT [2017 (5) TMI 403 - SUPREME COURT OF INDIA] - hence the disallowance made by the AO cannot be sustained and is liable to be vacated - Decided in favor of assessee.

  ---

• 2018 (6) TMI 691
  Addition based on report of the district valuation officer (DVO) u/s 55A(a)(ii) - valuation of property done by DVO was much less than that shown by assessee - whether assessee has adopted higher fair value as on 01.04.1981 to pay the lesser capital gain - validation of reference made by the Assessing Officer to the DVO for the valuation of the property - conflicting decisions - Held that:- As decided in the case of Sundeep Kumar Bafna v. State of Maharashtra [2015 (8) TMI 724 - SUPREME COURT] a decision or judgment can also be per incuriam if it is not possible to reconcile its ratio with that of a previously pronounced judgment of a co- equal or larger Bench and when High Courts encounter two or more mutually irreconcilable decisions of the Supreme Court cited at the Bar, the inviolable recourse is to apply the earliest view as the succeeding ones would fall in the category of per incuriam. ROYAL CALCUTTA TURF CLUB VERSUS DEPUTY COMMISSIONER OF INCOME-TAX AND VICE VERSA [2017 (11) TMI 1200 - ITAT KOLKATA] followed Valuation of land done by the assessee’s registered valuer is more than the value determined by the DVO therefore, valuation determined by DVO cannot be accepted since the assessee’s case under consideration is prior to 1st July 2012 i.e. belonging to Assessment Year 2011-12, whereas the mandated provisions come into effect from Assessment Year 2013-14, therefore, it is against the provisions of section 55A(a) of the Act and hence, the valuation determined by the DVO cannot be accepted. We note that assessee’s case under consideration is squarely falls u/s 55A(a) of the Act. As decided in CIT vs. Pooja Prints [2014 (1) TMI 764 - BOMBAY HIGH COURT] where in it was held that neither section 55(A)(b)(ii) nor the amended section 55(A)(a) can be invoked for referring case of the appellant for valuation of an asset as on 01.04.1981, as the amendment was effective from 01.07.2012 and not retrospectively. - Decided in favour of assessee.

  ---

• 2018 (6) TMI 690
  Disallowance u/s 14A read with Rule 8D with regard to the interest expenditure - Held that:- Following the judicial pronouncements in case of PRINCIPAL COMMISSIONER OF INCOME TAX-3 VERSUS NIRMA CREDIT AND CAPITAL PVT. LTD [2017 (9) TMI 485 - GUJARAT HIGH COURT] we are in agreement with the contention of learned AR that disallowance u/s 14A should be made with respect to the net interest expenditure - accordingly, AO is directed to recompute the disallowance on the net interest expenditure after giving credit for the interest earned by the assessee. Expenses towards repairs & Maintenance of building - capital or revenue in nature - Held that:- If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future - hence after considering the nature of each and every expenditure the CIT(A) reached to the finding that expenditure so incurred on repair etc., was Revenue in nature - appeal of revenue is dismissed - Decided in favor of assessee.

  ---

• 2018 (6) TMI 689
  TDS u/s 194H - Disallowance u/s 40(a)(ia) for failure to deduct TDS - discounts allowed to the distributors on the sale of starter kits/pre-paid sim cards and recharge vouchers - Held that:- Sale of starter kits/sim cards is purely a purchase/sale transaction on principal-to-principal basis and there is no relationship of agency, hence no obligation was cast upon the assessee to have deducted tax at source u/s 194H in respect of the discounts given to the distributors on the sale of the same - thus in the absence of any obligation cast upon the assessee to have deducted tax at source in respect of the discounts given to the distributors on the sale of the prepaid starter kits/sim cards, no disallowance u/s 40(a)(ia) was called for in the hands of the assessee - Decided against the revenue.

  ---

• 2018 (6) TMI 688
  Disallowance u/s. 40(a)(ia) - tax has to be deducted u/s 194J or 194C for ‘Channel Placement Fees’ - Held that:- Following the order of the Hon’ble High Court of Bombay in the case of the Commissioner of Income Tax-11, Vs. M/s NGC Networks (India) Pvt. Ltd [2016 (1) TMI 1368 - ITAT MUMBAI] and finding no reason to take a view different from that arrived at by coordinate benches of the Tribunal in the assessee’s own case for A.Ys 2009-10 and 2010-11 - the amendment by introduction of Explanation-6 to Section 9(1)(vi) of the Act took place in the year 2012 with retrospective effect from 1976. This could not be have been contemplated by the Respondent when he made the payment which was subject to tax deduction at source u/s 194C - Hence TDS is to be deducted u/s 194C and not u/s 194J - Decided in favor of assessee.

  ---

• 2018 (6) TMI 686
  Excise duty refund claim - Addition of income u/s 5 read with Section 28(iii)(b) - capital gain eligibility - Held that:- Appeal of the assessee has been allowed by placing reliance upon the order of this Tribunal in assessee’s own case for A.Y. 2009- 10 CIT VERSUS MAITHON POWER LTD. [2015 (7) TMI 784 - DELHI HIGH COURT] when the business of the assessee is not yet set up then the question on assessing income of the assessee company to the Previous Year does not arise. Even otherwise the excise duty on the question was of material used for construction/erection of the project, which is in the capital filed and the refund of the same goes to reduce the cost of the assessee. As upheld by HC [2015 (7) TMI 784 - DELHI HIGH COURT] he finding of CIT(A) that the business of assessee had yet not been set up during the A.Y. 2009-10 and that all the costs incurred by it would have to be taken as capital work in progress cannot be faulted. Where there is a refund of excise duty it would go to reduce the project cost/capital work in progress since it is relatable only to the capital assets. - Decided against revenue

  ---

• 2018 (6) TMI 685
  Exemption u/s 11 denied - Applicability of amended provisions of section 2(15) - whether activities of the assessee in land development and selling the same constituted `Business’? - Held that:- Following the judgement in case of Hon'ble Jurisdictional High Court in CIT vs. Yamuna Expressway Industrial Development Authority [2017 (4) TMI 1154 - ALLAHABAD HIGH COURT] the issue is decided in favor of assessee as held When CIT (E) was required to consider application for registration, in our view, it should have concentrated only to the requirement of Section 12A and 12AA, as the case may be, and not other provisions like Section 10(20) or 10(20A) etc. The factum that ''IDAs' would be covered or not, under Section 10(20), would make no difference for the reason, if these authorities satisfy requirement of Section 12A(1), then are entitled for registration after following procedure laid down under Section 12AA - the assessee was not indulging in trade commerce or business and hence amended provisions of section 2(15) were not applicable - decided in favor of assessee. Disallowance of office expenses - Held that:- assessee has claimed double deduction for one sum, it cannot be allowed at the outset, regardless of the fact that application of income, considering such disallowance, will be more than 85% - thus restore the addition made by the AO. Set off and carry forward of deficit of earlier years to the current/next years - Held that:- Following the judgement of Hon'ble Bombay High Court in CIT vs. Institute of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY HIGH COURT] it is held that Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the trust for charitable and religious purposes in the earlier years against the income earned by the trust in the subsequent year will have to be regarded as application of income - AO is directed to re-compute the income/loss after allowing necessary set off and carry forward - allowed for statistical purpose. Additions made by AO on account of interest - payment of interest to GDA - Held that:- AO has made disallowance of interest by observing that the same was not backed by any evidence - on the contrary, the learned CIT(A) deleted this addition by observing that no such deduction was claimed by the assessee - thus there is a contradiction in the factual position stated by both the authorities below - hence we set aside the impugned order on this score and remit the matter to the file of Assessing Officer for deciding it afresh - allowed for statistical purposes.

  ---

• 2018 (6) TMI 684
  Assessment u/s 153A - absence of any incriminating materials - Held that:- There is no any reference to seized materials whatsoever based on which the additions/disallowances were made - thus assessments made are bad in law for the reason that AO made additions without there being any seized materials pursuant to action u/s. 132 - See Narpat Mehta v. ACIT [2016 (10) TMI 1198 - ITAT MUMBAI] - additions/disallowances made in the assessments for the Assessment Years 2005-06 to 2007-08 which were unabated has no legs to stand - hence assessment order passed u/s 153A is quashed - Decided in favor of assessee.

  ---

• 2018 (6) TMI 683
  Reference to DVO on account of valuation of construction of Hotel Building u/s 142A - non rejection of books of account - Held that:- There is no finding recorded by the Assessing officer regarding rejection of books of accounts - further reference to DVO is even prior to the issuance of notice u/s 148 - thus we don’t find any infirmity in the findings of the ld CIT(A) - thus DVO report is not valid and the same was rightly deleted - Decided against the revenue.

  ---

• 2018 (6) TMI 682
  TDS u/s 194C - Disallowance u/s 40(a)(ia) - non submission of forms/ declarations in the office of Chief Commissioner/ Commissioner as prescribed U/s 191A(2) - non production of Form 15G/15H - Held that:- as per the provisions of Section 197A(1A) the only requirement is taking the declaration in writing from recipient and verification in the prescribed form and once the requirements of this section is complied with the assessee is under no obligation to deduct tax at source on such payments. Following the judgement in case of CIT vs. Sri Marikamba Transport Co. [2015 (6) TMI 181 - KARNATAKA HIGH COURT] where it is held that Once, the declaration forms are filed by the assessee, the liability of the assessee to deduct tax on the payments made to the sub-contractor would not arise - thus we have taken a consistent view that non production of Form 15G/15H would not lead to disallowance U/s 40(a)(ia) - Also see CHITTOOR DIST. CO-OPERATIVE CENTRAL BANK LTD. [2016 (7) TMI 338 - ITAT HYDERABAD] - Decided in favor of assessee.

  ---

• Customs

• 2018 (6) TMI 656
  Revocation of CHA License - failure to discharge obligations under Regulation 11(n) of the Customs Brokers Licensing Regulations, 2013 - time limitation - maintainability of petition - Is a writ petition challenging an order in original on the ground of lack of jurisdiction maintainable, despite the availability of statutory alternative remedy? - Are the time limits prescribed in Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulations of 2013 mandatory or directory? Held that:- Madras and the Delhi High Courts are of the view that, the time period stipulated in Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulations of 2013 are mandatory and not directory - Regulations of 2004 as well as the Regulations of 2013 are products of exercise of powers under Section 146 of the Customs Act, 1962. Both the Regulations regulate the affairs of a Customs House Agent, subsequently known as the Customs Agent in the Regulations of 2013. Regulation 22 of the Regulations of 2004 and Regulation 20 of the Regulation 2013 deal with the power to revoke a licence granted. Both the Regulations stipulate time limits. None of the Regulations, however, provide for the consequence of not adhering to the time limit prescribed. The consequence of non-adherence to the time limit being not provided for in either of the two Regulations, it is open to an interpretation that, the time limits prescribed are not mandatory. The fact that, the order in original dated February 25, 2015 was received by the authority concerned, invoking the provisions of the Regulations of 2004 on March 27, 2017, is not disputed on behalf of the petitioner. Nothing to the contrary is established by the petitioner. The show-cause notice under the Regulations of 2004 was issued on June 23, 2017. The impugned show-cause notice is, therefore, within the period of 90 days from the date of receipt of the order in original dated February 25, 2015, and the same can be considered as the offence report for the purposes of Regulation 22 of the Regulations of 2004, in the facts of the present case - in the facts of the present case, the show-cause notice issued on June 23, 2017 cannot be said to be barred by limitation. The show-cause notice being within limitation, the authority acted within jurisdiction in issuing it and adjudicating thereon. The impugned order does not suffer for lack of jurisdiction. Appeal dismissed - decided against petitioner.

  ---

• 2018 (6) TMI 655
  Revocation of CHA License - forfeiture of security deposit - time limitation under Regulation 19 of CBLR, 2013 not followed - Held that:- The time limit prescribed by CBLR have not been followed in so much as the offence report was recorded on 03.05.2016 and the licence was suspended on 20.05.2016 wherein further order of suspension was issued on 15.06.2016 but the impugned order was issued on 07.12.2017 - The time limit of CBLR has clearly been violated. The Hon'ble High Court of Delhi in the case of Indair Carriers Pvt. Ltd. Vs. Commissioner of Customs (General) [2016 (5) TMI 775 - DELHI HIGH COURT] has held that in the said case time limits are mandatory and not mere directory. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 654
  Valuation - Extra Duty Deposit (EDD) - import of material from related supplier - inclusion of lump sum charges and royalty fees in the assessable value of the impugned imports - Held that:- Rule 10 (c) of the Valuation Rules provides for addition to the price actually paid or payable for imported goods royalties and license fees related to the imported goods. However, the Rule 10 (c) also requires that such amounts are those that the buyer is required to pay, directly or indirectly as a condition of the sale of the goods. Thus there has to be a nexus between the goods imported with the royalties or license fees. As already found the nexus is only with respect to manufacturer of the goods. The payment of royalty and licence fees are not a condition of sale with respect to the goods imported from the parent company. The addition of royalties and license fees cannot be related to the imported goods, ergo, these amounts cannot be then made part of the assessable value of such imported goods. The royalty and lump sum fees paid in relation to manufacture of goods in India cannot be padded on to the declared import value of the impugned goods. The portion of the order of the original authority accepting the declared value in terms of rule 3 (3) (b) of the Customs Valuation Rules restored - the upholding of addition of lump sum amount and royalty fees to the assessable value of the impugned imports set aside. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 653
  Benefit of N/N. 32/1997-Cus. dated 01.04.1997 - Job-Work - High-Seas Sale - It was alleged that the imported materials were in fact supplied for execution of job work order by Swathi Enterprises and not by New Karunai Granites. The Department also alleged that conditions requiring compliance with Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules 1996) (herein after referred as Rules) were also violated - Held that:- The goods though cleared by M/s. New Karunai Granites have been nonetheless been subjected to job work as per the directions of the foreign supplier. There is also no dispute that the goods after completion of job work have been re-exported and the export proceeds thereof realized. While the department has raised the allegation that the high sea Sale agreement is fake there has been no evidence brought forth to substantiate the same. In respect of the live consignments, the Ld. Advocate even produced the export certificate which indicates that these consignments too have been re-exported after being job worked upon - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 652
  Penalty u/s 114 (i) of the CA 1962 on Shri M.B.Sathyam, AGM of Chandra CFS - Department intercepted a consignment described as “Industrial Salt” received by the appellant M/s.Chandra Container Freight Station & Terminal Operators for which no shipping bill had been filed - restricted item. Held that: - there are no imputation in the SCN that they were in any way in the know of the actual nature of the cargo brought to the CFS by the exporter. There is no evidence that these appellants had colluded or conspired with the exporter or their CHA in their attempt to export MOP under the guise of Industrial Salt - There is also no allegation that the consignment has been brought by these appellants only for the purpose of export. When the Customs authorities themselves were unsure about the nature of the cargo and had to wait till the receipt of the Analytical Report to confirm that it was MOP, it would be unfair to foist an allegation on the CFS or their AGM that they were in the know of the illicit nature of the consignment, yet had allowed it to enter the CFS. When no evidence is found against the main protagonists, we are unable to fathom how Chandra CFS who only acted as a bailee of the goods can in any way be held responsible and penalized under Section 114 of the Act especially when there is no evidence that they were, in any way, knowingly involved or part of the attempted fraud - penalties do not sustain - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 651
  Refund of SAD - N/N. 102/07-Cus., dated 14.09.2007 - denial of refund on the ground that the appellants have not sold the imported goods as such - Revenue entertained a view that inasmuch as latex gloves imported by the appellant, were subsequently put to certain processes like quality inspection visually, placing them in wallet/pouches and further in boxes/packages, which were being subject to process of sterilization, which process amounts to manufacture in terms of section 2(f)(iii) of the Central Excise Act, 1944. Whether the process undertaken by the appellant amounts to manufacture or not? - Held that:- The Hon'ble Supreme Court in the case of M/s. Servo-Med Industries Pvt. Ltd. Vs Commissioner of Central Excise, Mumbai [2015 (5) TMI 292 - SUPREME COURT] has held that the process of sterilization does not amount to manufacture. The said process does not convert the gloves to any other product than the gloves except that they are sterilized, which is not a lasting character and when the gloves are opened from the packing, the same tend to become desterlized. Apart from the fact that it is well settled principle of law that no extraneous conditions can be introduced in the notification which has to be interpreted on its own wordings, we also take note of the fact that though the earlier notification required the imported goods to be sold "as such", there is no such condition in the present Notification No. 102/07, which only used the expression "subsequently sold". Inasmuch as, the imported gloves have been sold by the assessee as gloves and it is only by deeming fiction of law that the activities of labeling, relabeling, packing, repacking etc., has been made as amounting to manufacture, we find that there is no justification to hold that the gloves have undergone any change - there is no justification for denial of the refund of SAD. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 650
  Classification of imported goods - MP3 players - entitlement of the said goods to the exemption notifications - N/N. 21/2002 dated 01.03.2002 and N/N. 6/2006 dated 01.03.2006 - Held that:- The goods imported by the appellant are of various models but all of them have the facility to play CD as well as MP3. They also have radio reception as one of the features - After perusing the sub-headings, the classification may change depending upon whether it is considered as CD player or MP3 player or it is a radio receiver. But, it is possible to decide the dispute without finally deciding the classification of the items in respect of sub-heading of the Customs Tariff. There is no dispute that the imported goods have the facility to play MP3 as well as radio reception. Hence, we are of the view that the imported goods are entitled to the benefit of concessional rate of duty under the above notifications. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 649
  100% EOU - Confiscation of seized goods - theft of seized goods - the relief claimed is based on the allegation put forward by appellant that, after confiscation the property in goods vests with Government and the department has been negligent in taking proper care of the goods confiscated - Held that:- The Customs Act, 1962 does not provide for any right or remedy by way of compensation/damages. All these issues fall within the realm of civil law. It requires to be examined whether there was a duty cast on the department and whether such duty is absolved by the letter of undertaking signed by the appellant. The definition of 'adjudicating authority' under 2(i) means "any authority competent to pass any order or decision under the Act". Thus an appeal can be preferred against the decision or order passed by an officer in the capacity as 'adjudicating authority' - In the present case, since the Act does not provide for any remedy in respect of loss caused after confiscation or for any negligence on the part of department, it cannot be said that the impugned order is an order or decision passed by the Commissioner under the Customs Act as an adjudicating authority. Appellant relied upon the decision in the case of Ratan Kumar [2000 (8) TMI 572 - CEGAT, KOLKATA], Samsudeen [1990 (10) TMI 219 - CEGAT, CALCUTTA] - All these decision analyse the situation wherein the goods which were confiscate has been auctioned or sold by the department invoking Sections 142/150 of the Act. When the goods have been removed or sold by the department during the pendency of appeal, the Courts have held that the appellant is entitled to be compensated to the extent of value of goods. In the present case, the goods were lost by theft as seen from the Police compliant. Therefore these decisions do not assist the appellant. The Tribunal being a creature of the statute is empowered to pass orders only on appeals as provided in section 129A of the Customs Act - the issues arising for consideration as presented by the facts of the case does not fall within the jurisdiction of the Tribunal - appeal dismissed being not maintainable.

  ---

• 2018 (6) TMI 648
  Refund of Customs Duty - finalization of provisional assessment - duty paid under protest - applicability of the benefit of N/N. 21/2002 (Sl. No. 313) to the products in respect of past consignments - consignments of fixed wireless telephone - refund was rejected on the ground of unjust enrichment - Held that:- The direction of the Commissioner (Appeals) remanding the matter for examining the issue of unjust enrichment does not call for any interference - In the case of Hindalco Industries [2008 (9) TMI 71 - HIGH COURT GUJARAT], the Hon'ble High Court of Gujarat held that Section 18 of the Customs Act amended from 13.7.2006 making unjust enrichment applicable to refund claims arising out of finalization of provisional assessment does not have retrospective effect - appeal dismissed - decided against appellant.

  ---

• Corporate Laws

• 2018 (6) TMI 679
  Serious fraud on the securities market - off-loading the fraudulently dematted excess shares of SCCL to innocent investors - whether SEBI has unduly favoured the violator who are found to have committed serious fraud on the securities market? - Held that:- Issuing shares in excess of authorised share capital and further dematting those unauthorized excess shares and allowing those shares to be sold on-market to innocent investors is a serious fraud on the securities market. In such a case, SEBI is unjustified in not initiating any action against the depositories. It is not in dispute that in the present case, the main architect in committing serious fraud on the securities market was Mr. Mishra, Chairman and Director of SCCL. In fact Mr. Mishra, vide letter dated 27.04.2007 had admitted that the shares in excess were intentionally sold by him in order to meet the liability of SCCL towards unsecured creditors. In such a case, merely debarring Mr. Mishra from accessing the securities market for 10 years and not even initiating penalty proceedings against Mr. Mishra who had collected crores of rupees by selling the unauthorized excess shares is wholly unjustified. When 17 entities including the appellant were found to have aided and abetted Mr. Mishra in off-loading the fraudulently dematted excess shares of SCCL to innocent investors in gross violation of PFUTP Regulations, imposing penalty ranging from ₹ 1 lac to ₹ 2 lac on most of the entities as against the imposable penalty of ₹ 25 crore under Section 15HA of SEBI Act clearly shows that SEBI has shown undue leniency by imposing nominal penalty on the violators. In any event, having imposed penalty of ₹ 1 lac in the ex-parte order passed against the appellant, without assigning any reasons SEBI is not justified in treating the appellant differently from other similarly situated violators and imposing higher penalty of ₹ 16 lac on the appellant. The appellant is justified in contending that he is being victimized for approaching this Tribunal and that there is no reason to treat the appellant differently from other similarly situated violators. In our opinion, the course adopted by SEBI in the present case is detrimental to the interests of the securities market. We set aside the impugned order passed against the appellant and restore the matter for fresh decision on merits. We sincerely hope that SEBI would take appropriate remedial measures in the matter and ensure that its credibility as an efficient market regulator is not eroded.

  ---

• 2018 (6) TMI 678
  Share Transfer and allotment legality to director - application of section 59 of Companies Act - Held that:- The petitioner as well as the 2nd respondent are admittedly present during Board Meeting in question to transact the business of the Company. Accordingly the business of the Company was conducted duly following the above articles of Association of the Company. It is also relevant to point out here that the petitioner is not disputing the appointment Mr. V Shashi Kumar (respondent No.3) but selectively opposing allotment of shares to him for the reasons best known to him. Since we hold that the impugned transfer and allotment are legal, there is no question of application of section 59 of Companies Act to the facts and circumstances of the case. So far as the issue of Board of Directors is concerned, Articles 29- 47 of Articles of Association of the Company dealt with the constitution of the Board of Directors, appointment, retirement, etc., as per Article 30 Mr. R. Shiv Kumar (Petitioner) and Dr. Subba Rao P (Respondent No.2) of the First Directors of the Company. As per the Article-29 the member of Director should not be less than two and not more than 12 including Managing Director or nominated Director and other Directors if any. As per Article 34 Board of Directors shall have power to appoint Additional Directors subject to the maximum mentioned as sated above. As per Article-38: the quorum for a meeting of the Board of Directors shall be 1 /3rd of its total strength (any fraction contained in that 1/3rd being rounded off as one) or two Directors whichever is higher. Thus the impugned transfer and allotment are legal, there is no question of application of section 59 of Companies Act to the facts and circumstances of the case.

  ---

• 2018 (6) TMI 647
  Winding up of company - according to the petitioner, the allegation made by the company that the said memorandum of settlement is vitiated by any fraud or coercion or undue influence or that the said memorandum of understanding is not binding upon the company or that the latter paid ₹ 8.5 lakhs to the petitioner independent of the said memorandum of settlement or that after payment of ₹ 8.5 lakhs the company owes no money to the petitioner are all afterthoughts and devoid of any merit - Held that:- I am unable to convince myself to hold that the company has been able to either make out any bona fide defence to the claim of the petitioner or that it has adduced any prima facie proof of facts on which it based its defence in the affidavit-inopposition to the claim of the petitioner for ₹ 15,24,295.00. Lastly, when the company has all along made payments to the petitioner in terms of the said memorandum of settlement dated September 25, 2014 its belated denial of the validity of the said terms of settlement can hardly be accepted as a defence of any substance to the claim of the petitioner in this application. The petitioning creditor is entitled to the sum of ₹ 15,24,295.00/-, together with interest at the rate of 9%, per annum from May 15, 2015 till realisation. The winding up application shall be advertised once in the English newspaper, “The Statesman” and once in the Bengali newspaper, “Bartaman” by May 10, 2018.

  ---

• Insolvency & Bankruptcy

• 2018 (6) TMI 681
  Initiation of Corporate Insolvency Resolution Process - default in payment of salary - Held that:- From the definition of “Operational creditor” and “Operational Debt”, it can be seen that the applicant being in employment in the respondent company and having provided service to the respondent company clearly comes within the definition of Operational Creditor. Similarly the claim of outstanding salary due to him comes within the definition of Operational Debt. Respondent company having admitted that the applicant was working in the respondent company. Since the respondent Corporate Debtor has admitted the term of employment of applicant, and there being default in payment of salary of that period, the application deserves to be admitted on that score alone for triggering Corporate Insolvency Resolution Process against the respondent corporate debtor. We are satisfied that the present application is complete and there has been part admission of salary dues and non-payment of the same has caused default by respondent. Therefore, on fulfilment of the requirements of section 9(5)(i)(a) to (d) of the Code, the present application is admitted.

  ---

• 2018 (6) TMI 680
  Corporate Insolvency Resolution Process - appellants had failed to file their respective claim within the prescribed period - Held that:- In spite of receipt of their claim much beyond the period prescribed under the I & B Code, the ‘Resolution Plan’ has taken care of the claim of the appellants, we are not inclined to interfere with the order passed by the Adjudicating Authority. In a particular case, what should be the percentage of claim amount payable to one or other ‘Financial Creditor’ or ‘Operational Creditor or ‘Secured Creditor’ or ‘Unsecured Creditor’ can be decided by the Committee of Creditors based on facts and circumstances of each case. In absence of any discrimination or perverse decision, it is not open to the Adjudicating Authority or this Appellate Tribunal to modify the plan. We find no merit in the appeal. They are dismissed Insofar the winding up proceedings or other litigations pending before any Court of law, we are not expressing any opinion as the Court of competent jurisdiction will decide the same

  ---

• FEMA

• 2018 (6) TMI 677
  Contravention of the RBI instructions - remittance for the one share of Mr. Leonid Beyzer had not come in as a foreign direct investment nor had it been made as a debit from his NRE/FCNR account maintained with an authorised dealer/authorised bank - Held that:- The appellants are not disputing the charge but have stated that Mr. Leonid Beyzer had transferred the above remittances from his personal account to the account of the company i.e. M/s. True Axiz Resorts Pvt. Ltd. during the period 19.03.2005 to 02.12.2005. Legal requirement of the payment being made from the NRE/FCNR account has been flouted. The NRO account is a Non Resident Ordinary Rupee account while the NRE is a Non Resident External Rupee account. Similarly the FCNR is a Foreign Currency Non Resident Account, and hence they are principally different types of account and if there is a stipulation for payment from only one type of account, not adhering to the same would tantamount to the breach of the legal requirements. Hence, the adjudicating authority’s order is correct and is upheld. Not complied with the RBI notification requiring them to file the report within the stipulated period of 30 days - Held that:- There is a foot note in the letter which states from RBI that “this acknowledgment shall not be deemed or construed in any way as approval by the Reserve Bank for investment in the company, nor does it certify the correctness or completeness of Form FC GPR from the company. This acknowledgment is only for the purpose of having received Form FC GPR from the company. Reserve Bank reserves its rights to call for any further detail from the company including any documents it may deem fit as well as to return the Form FC GPR to the company in view of any discrepancies found therein”. The appellants have not been able to produce any final decision in this regard so far. It is therefore apparent that the RBI has still not given them the clearance/permission. Accordingly, the charge against the appellants stands Mr. Leonid Beyzer had not taken prior approval of the Government of India inspite of having investment in another company in the same sector - Held that:- In the present case, it has not been alleged that Mr. Leonid Beyzer is either a collaborator or proposes to acquire the entire shareholding of M/s. True Axiz Resorts Pvt. Ltd. It is an admitted fact that he only has one share in the company the rest being entirely held Mr. Valiulin Rashid. Hence, find the appeal on this ground a valid appeal and reject the impugned order to this extent. Lands acquired were all agricultural land and hence were not eligible for investment under the automatic route of foreign direct investment - Held that:- Referring to List of activities or items for which automatic route of Reserve Bank for investment from persons resident outside India is not available what is prohibited is the activity of ‘agriculture’. It nowhere specifies any stipulation or condition relating to agricultural or non- agricultural land. That the appellants were licensed/permitted to undertake activities relating to tourism has not been disputed. It has not also been alleged that they are seeking to indulge in the activity of agriculture. Hence, stretching this stipulation to hold them liable for violation as they possess agricultural land is not within the scope of the Notification 20/2000 dated 03.05.2000. To that extent, I do not find any contravention with regard to the properties in question in so far as it relates to this particular Notification. Accordingly, I hold so. Levy of penalty confirmed - confiscation of the properties itself is too harsh and therefore set it aside

  ---

• Service Tax

• 2018 (6) TMI 676
  100% EOU - Refund of CENVAT credit - denial of refund on the ground of Non-Registration of premises Held that:- Reliance placed in the case of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX [2011 (9) TMI 450 - KARNATAKA HIGH COURT], where it was held that Registration not compulsory for refund - refund allowed - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 675
  CENVAT credit - duty paying invoices - invoices did not contain the mandatory details - demand of tax with interest and penalty - Held that:- Nothing is brought out from the records to show that the appellant has not availed the services or has not paid the impugned service tax amounts. The only allegation is that the required details are not reflecting from the invoices - The invoice having been supplied by the service provider, the appellant cannot be saddled with suppression of facts with intent to evade payment of service tax on this allegation. There is no evidence necessary to establish that the appellant has suppressed facts with intent to evade payment of service tax. Therefore, the equal penalty imposed cannot sustain - service tax demand with interest upheld - appeal allowed in part.

  ---

• 2018 (6) TMI 674
  Adjustment of service tax payable - case of Department is that the Commissioner ought not to have adjusted the service tax payable against the excise duty already paid - Held that:- Though we may agree that Central excise duty cannot be adjusted against service tax, taking into consideration, the facts in a broader perspective, we strongly feel that the allegations in the Show cause notice for raising the demand lacks legal footing, and therefore the demand cannot sustain - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 673
  Erection, commissioning and installation service - Composite Contracts - Whether the activity undertaken by the appellant can be treated as composite and indivisible contract so as to be covered by the Hon’ble Supreme Court’s decision in the case of CCE, Kerala vs. Larsen and Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]? - Held that:- On a perusal of contract dated 20.7.2005 given by Karnataka Power Transmission Ltd. to the appellants, it is found that, the contract in respect of rearrangement of Hubli Bagalkot 110KV DC Line to link proposed 220KV receiving station Bagalkot is mentioned to be on turnkey basis. Similarly contract in respect of construction of 66KV DC Line from H.N. Pura to SRS Hootagally is mentioned to be on turnkey basis but it has a portion containing supply of materials also - the contracts are though composite are not indivisible - the ratio of the Hon’ble Supreme Court in respect of Larsen and Toubro Ltd. is not squarely applicable in the instant case, as pleaded by the appellants. Applicability of exemption Notification No.45/2010-ST dated 20.7.2010 - Held that:- This exemption appears to be for all taxable services relating to transmission of electricity. Whether the activities performed by the appellant are in relation to the transmission of power? - Held that:- erection commissioning and installation comes within the ambit of the expression ‘in relation to’ - the activity undertaken by the appellants are to be held to fall in the ambit of ‘in relation to’ transmission of electricity in terms of Notification No.45/2010 dated 20.7.2010 as there is a clear nexus between the service rendered by the appellant and transmission and distribution of electricity - the exemption contained in the said Notification is squarely applicable to the appellants. Whether the appellants have correctly availed the Notification? - Held that:- The liability of duty itself is not surviving in view of the exemption Notification No.45/2010 dated 20.7.2010, these issues do not require any consideration at this juncture. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 672
  Business Auxiliary Service - appellant are engaged in providing certain services of customer assessment and documentation on behalf of ICICI in respect of sanction of commercial loans to vehicles - whether the activities undertaken by the respondents fall under ‘Business Auxiliary Service’? - Held that:- From the records it is seen that the respondents entered in to agreements with ICICI bank for providing services of franchisee for marketing and sourcing of its auto products; their main business is to locate the customers, assess their credit worthiness and prepare the documentation on behalf of ICICI Bank in the category of commercial vehicles. It is to be seen that as per Section 65(19) of Finance Act, 1994 ‘Business Auxiliary Service’ includes any incidental or auxiliary support service includes services such as billing, collection or recovery of cheques amounts and remittance, evaluation of prospective customer and public relation services - the services rendered by respondents come under the ambit of ‘Business Auxiliary Service’ during the relevant period. Regarding the fines and penalties also, the respondents have not made out any strong case in their favor. Appeal allowed - decided in favor of Revenue.

  ---

• 2018 (6) TMI 671
  Works contract service - Construction of complex services - Composite contracts - Whether the activities undertaken by the appellants were taxable during the relevant time? - Held that:- Going by the ratio of Hon’ble Supreme Court’s decision in the case of CCE vs. Larsen &Toubro [2015 (8) TMI 749 - SUPREME COURT] held that works contract services were taxable only from 1.6.2007. In cases where the appellants do not receive any bookings or advances, the appellants complete the construction and offer the flats for sale. No service element exists. Services rendered by the appellants in the course of construction is a service but to themselves. Therefore, either way no tax can be levied on such activity - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 670
  Construction of Complexes Service - Composite Contracts - The Commissioner (Appeals) found that though the appellants contended that they were not liable for service tax on services rendered prior to 15-6-2005 but amount was received later, the lower authorities have apportioned the amount correctly as per Board’s circular F.No.B1/6/2005-TRU dated 27-7-2005 - whether the activities undertaken by the appellants were taxable during the relevant time? Held that:- The appellants enter into contracts with individual buyers for sale of undivided interest in the land and apartment, such prospective buyers do not enter into individual itemized contracts with the appellants or others for the work of construction, labour or material etc.; the value of such individual items are not mentioned in the agreements. Under these circumstances, it would be fair to consider such contracts as composite work contacts. Reliance placed in the case of CCE vs. Larsen & Toubro [2015 (8) TMI 749 - SUPREME COURT] wherein it was held that works contract services were taxable only from 1.6.2007. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 669
  Franchise Service - appellant has developed and is running a course called “Diploma in Advanced Software Technology (DAST) - Revenue was of the view that for the 25% amount retained by the appellant, the appellant is liable to pay service tax under the category of Franchise Service falling under Section 65(47) of the Finance Act, 1994 - Held that:- The issue has been decided against the assessee in appellant’s own case CMC Ltd. V/s Commissioner Hyderabad [2011 (4) TMI 242 - CESTAT, BANGALORE] - the appellant is liable to make payment of Service Tax under the category of Franchise Service for the full period of demand - penalties are set aside. Management Consultancy Service - Revenue was of the view that the activities performed by the appellant in terms of the agreement with DST were liable to payment of service tax under category of Management Consultancy Service falling under Section 65(65) read with Section 65(105)(k) of the Act - Held that:- When we carefully consider the definition of Management Consultant as it existed during the different periods, it is evident that the appellant has not carried out management of any complete organization such as the DST. But what has been done is technical assistance in the operation of the computer systems of DST and management of the Centre. Such activities, definitely are liable to be covered within the terms ‘Technical Assistance in relation to….. any working system of any organization’, In the definition prevalent during w.e.f. 01/05/2006 to 01/06/2007, the activities performed by the appellant would be even more specifically covered under ‘Technical Assistance in relation to…… management of information technology resources’ - the activity performed by the appellant for DST would be covered within the definition of management consultancy services during the period of dispute. Manpower recruitment or supply agency service - the appellant carried out the activities of application data management, pre-examination and post-examination activities. Such activities were in the nature of back end activities and supported the manpower recruitment activity of the client by providing various Services - Revenue was of the view that such activities were covered within the definition of Manpower Recruitment and Supply Agency Service falling under Section 65(68) read with Section 65 (105)(k) - Held that:- The appellant does not deny the fact that the activities are in the nature of pre recruitment work but claims that it willl be covered within the definition only after the insertion of the Explanation w.e.f. 01/06/2007 - The definition covers service rendered to any person in relation to recruitment or supply of manpower. Evidently, the pre recruitment work provided by the appellant would definitely come within the category of ‘service rendered in relation to supply of manpower’. No doubt the Explanation has made this explicit but we are of the view that the activity is covered by the definition even without reading the Explanation retrospectively - demand upheld. Extended period of limitation - Held that:- While we uphold the invoking of suppression clause in the initial show cause notice dated 04/07/2008 for the reasons recorded by the Adjudicating Authority in para 20, we are of the view that the Revenue is precluded from raising the same clause again in the subsequent show cause notice dated 26/02/2010 - we set aside the portion of demand under the category of Management Consultancy Services as well as Manpower Recruitment or Supply Service vide show cause notice dated 26/02/2010, which falls outside the normal time limit in Section 73. Penalties - Held that:- the penalties set aside, by taking recourse of Section 80 since in respect of all the issues interpretation of the provisions is involved. Appeal allowed in part.

  ---

• 2018 (6) TMI 668
  Classification of services - rerubberisation of old, worn out rubberised rollers of various industries - whether rerubberisation undertaken by the appellants on behalf of their customers was classifiable under the category of ‘Management, Maintenance or Repair’ Services or under the category of ‘Business Auxiliary Services’? - Held that:- Similar issue came up before this Tribunal, in the their own case M/S ZENITH ROLLERS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [2013 (12) TMI 620 - CESTAT NEW DELHI], wherein it has been held that the activities undertaken by the respondent merits classification under Business Auxiliary Service and not Management, Maintenance or Repair service, therefore, the impugned order is to be set aside. The demand cannot be confirmed against the respondent under management, maintenance or repair service - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 667
  Refund of service tax paid - export of services - rejection on the ground that services do not qualify as input service or same falls under exclusion category and also on the ground of non submission of documents - Held that:- All the services are essential services used for providing output service therefore refund in respect of cenvat credit on aforesaid services cannot be denied on the ground of nexus - refund allowed. Non submission of documents - Held that:- The appellant have submitted invoices and challan through which service tax payment was made and the same were attached as exhibit J1 and J2. From this documents, it is clear that these documents are sufficient for processing refund claim therefore rejection of refund claim on the ground of non submission of documents is also not sustainable. Rejection in respect of some services which constituted as sale of goods - Held that:- The payment made towards sale of diesel is nothing but reimbursement towards receipt of services of operating DG set for uninterrupted supply of power for carrying out output service, therefore even though the reimbursement toward supply of diesel, it is related to supply of service to operate DG set. Vendor also paid service tax on such charges - this payment is towards preparation of various study material used for purpose of training needs of the employee which are required to provide out put service of the appellant - credit allowed. Refund claim - erection, commission and installation - rejection on the ground that service cannot be identified form the invoices - Held that:- It is clear that service is input service and clearly identifiable hence there was no reason to deny the refund - refund allowed. Rejection of refund claim on consulting charges paid for lease of premises on the ground that the said premises is not registered - Held that:- This issue is no longer res-integra as in case of M Portal India wireless solutions P Ltd vs. C.S.T [2011 (9) TMI 450 - KARNATAKA HIGH COURT] it was held that merely because premises is not registered credit cannot be denied hence refund is admissible. As regard the claim of the interest, since the said issue is not arising out of order, the same may be decided by the adjudicating authority in accordance with law at the time of sanction of refund claim. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 666
  Valuation - Commercial Coaching or Training Service - Students make 100% payment to M/s Aptech Ltd. - Assessee gets only 80% of such fees and discharge service tax on 80% - Whether appellant is required to discharge service tax liability on an amount which represents 20% as retained by M/s. Aptech Ltd - Rule 9 (1) of the CCR. Held that:- In respect of the controversy on the 20% - 80% formula between M/s. Aptech and the appellant, we find that identical issue has been addressed by the Tribunal in Kunal IT Services Pvt. Ltd. [2015 (4) TMI 1005 - CESTAT MUMBAI], where it was held that the amount received by the appellant for the provision of services under the category of ‘Commercial Coaching or Training Services' is the 80% of the amount paid by the students, as students make 100% of the payment directly in the name of M/s. Aptech Ltd. If that be so, appellant has correctly discharged the service tax liability on an amount received by him for the services rendered under the category of ‘Commercial Coaching or Training Services'. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 665
  Business Auxiliary Service - Commission agency service or not? - appellant is engaged as a contractor on behalf of the Government Departments to collect sales tax, royalty and toll tax - Revenue was of the view that in cases where the actual collection was more than the amount paid to the authorities, the difference is in the form of the commission received by the appellant. Considering the appellant to be a ‘Commission Agent’, Revenue was of the view that Service Tax is liable to be paid on such commission under the category of Business Auxiliary Service. Held that:- Service Tax under the category of ‘Business Auxiliary Service’ would become liable only if the service is rendered in relation to the business of the recipient - In the present case, the appellant, as a contractor, has engaged in collecting statutory levies on behalf of the Government department (CTD)/ statutory authority (NHAI) neither of whom are engaged in business - the levy of Service Tax cannot be sustained on the Commission retained by the appellant. Activity of toll collection - Held that:- It is also fairly well settled that no Service Tax can be levied on such an activity as held by the Tribunal in the case of Commissioner v/s Intertoll ICS [2011 (5) TMI 257 - CESTAT, NEW DELHI], where it was held that N/N. 13/2004 specifically exempts the service tax liability on such services of collection of duties and taxes levied by Government - demand set aside. Collection of commercial taxes for CTD - Held that:- The appellant will also be entitled to the benefit to exemption under N/N. 13/2004-ST dated 10/09/2004 which specifically exempts the services provided by any person to the Government of State in relation to collection of any duties or taxes levied by the Government from the whole of the Service Tax leviable thereon - demand set aside. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 664
  Demand of service tax - services of Supply of Manpower - Works Contract service - Supply of Tangible Goods service - Rent -a-Cab Service. Manpower Supply Service - Held that:- The demand to the extent it has been made on specific work undertaken by the appellant even though with the help of labour would not fall under the category of Manpower Supply Service as the Appellant had performed specific job and did not supply labour only. Supply of Tangible goods services - Held that:- The appellant has not provided goods but has performed specific jobs - since the appellant has not supplied any machinery equipments or appliance for use, therefore the services are not taxable under the category of Supply of Tangible Goods Service. In case of Works Contract Service we find that the demand has not been contested and thus we hold that the demand under Works Contract category is sustainable. The appellant would be allowed the benefit of cum-tax calculation while computing the demands - appeal allowed by way of remand.

  ---

• 2018 (6) TMI 663
  Transmission and distribution of electricity - it was alleged that appellant were not paying service tax, but were claiming ineligible abatement under N/N. 1/2006-ST dated 01.03.2006 - Supply contract which includes supply of various items such as transformers - Erection, Commissioning and Installation contract - Balance of plan contract which mostly involve civil works using cement, steel etc. - combination of three services - Held that:- It is seen that the Revenue has made no attempt to combine the three contracts into one mega turnkey project. No attempt has been made to assess such a composite contract as a single works contract. Hence the supply contract, erection contract as well as civil works contract are required to be assessed independently since the same have been executed separately by the two parties. Considering the civil works contract, the adjudicating authority has blindly gone by the classification declared in the ST-3 returns under 65 (105) (zzd). The execution of civil works no doubt involves supply of materials in the form of steel, cement etc. Consequently, such contracts merit classification under 65 (105) (zzq) under commercial or industrial construction service which also enjoys abatement in terms of Sl.No. 7 of the Notification No. 1/2006-ST. Benefit of concessional rate of duty under Works Contract (Composition Scheme) - Held that:- Since the civil construction contract definitely involves supply of materials such as cement and steel, such contracts are rightly classifiable under the works contract service. But the adjudicating authority has denied the benefit of composition scheme for the reason that the appellant has failed to exercise the option for payment of service tax under the scheme prior to the payment of service tax under the respective works contract. Even though such a stand adopted cannot be faulted, the appellant will be entitled to assessment under Works contract service for such contracts and entitled to payment of service tax only on the value of service portion. Order denying abatement under Notification No. 1/2006-ST dated 01.03.2006 is set aside and abatement allowed - Regarding assessment under Works Contract service, matter remanded to the adjudicating authority.

  ---

• 2018 (6) TMI 662
  Storage and warehousing Services - temporary storage of processed crude and offloading of the same was provided by Prosafe Production Services - Reverse charge - Held that:- The appellant is not liable to pay service tax as the recipient of service of the nature not falling within the purview of section 65(105)(zza) of the Finance Act, 1994 r/w section 65 (102) of the said Act - Though the department's appeal has been admitted by the Hon'ble Supreme Court, no stay has been granted by the said Court - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 661
  SEZ unit - Refund of service tax paid - Renting of Immovable Property Service - refund claim was rejected stating the reason that Renting of Immovable Property Services was not approved services on the date of filing of refund claim - Held that:- It is not disputed that Renting of Immovable Property Service was availed by the appellant for the disputed period. The invoices shows the payment of service tax on such services. The Approval Committee has approved such services vide their letter dt.15/9/2009. The requisite for obtaining approval is only a procedure to be complied, for the substantive benefit of exemption from payment of service tax. When the services have been approved, the benefit of exemption cannot be denied. Section 26 of the SEZ Act, lays down provisions for exemption from duties and taxes. Section 51 of the said Act provides for over riding effect. Therefore the immunity provided from paid service tax cannot be taken away by the procedural prescriptions of Notification No.9/2009 or 15/2009. Refund allowed - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 660
  Commercial or Industrial Construction Service - Works contract service - taxability - Held that:- The period prior to 1.6.2007 is covered by the decision in the case of Larsen &Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. The demand prior to 1.62007 therefore requires to be set aside. Penalties for the Demand for the period after 1.6.2007 - Held that:- Taking note of the fact that the issue was contentious, the penalty imposed is unwarranted and the same is set aside - The prayer of the appellant to permit the appellant to pay service tax for the period after 1.6.2007 under composition scheme under Service Tax Rules 2007 is only reasonable and is allowed. Appeal allowed in part.

  ---

• 2018 (6) TMI 659
  Penalty u/s 78 - Short payment of service tax - Erection, Commission and Installation services - case of appellant is that there is a delay in paying the service tax for the reason that there was unrest in the appellant's organization due to strike by employees - Held that:- Though notices were issued on the client M/s.SISCO Ltd., the value of the services rendered were not received by them. The payment of service tax was delayed due to financial hardship and later the company was amalgamated with M/s.JSW Steel Ltd. in 2007 - also, the appellant has put forward reasonable cause for failure to discharge the service tax. In view thereof, the penalty imposed u/s 78 of the Finance Act requires to be set aside - demand of duty with interest upheld - appeal allowed in part.

  ---

• 2018 (6) TMI 658
  CENVAT credit - input services - activities relating to Business - Held that:- During the relevant period, the definition of input services had a wide ambit as it included the words “activities relating to business” - In Coca Cola India Pvt. Ltd. Vs. Commissioner of Central Excise, Pune [2009 (8) TMI 50 - BOMBAY HIGH COURT], the Hon'ble High Court of Bombay has considered the eligibility of credit on various input services and held that almost all the services would come within the phrase activity relating to business - credit allowed - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 657
  Club or association service - Demand is raised on the interest received by the appellant association from the bank - Held that:- Such interest cannot be considered as a consideration received for any service rendered by it to its members. It is stated by the appellant that they are not collecting any subscription from the members of the association and the money deposited is a corpus fund in the bank earns interest out of which the association is providing maintenance activities in the farms/estates. The accrued interest received from the bank on an amount deposited cannot be treated as subscription - demand do not sustain - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 646
  Condonation of delay of 195 days in filing appeal - delay occurred only due to the wrong belief of the appellant that all the proceedings against them have been concluded when they paid the service tax, interest and the 25% penalty under proviso to Section 78 - Held that:- The application seeks to condone the delay of 195 days. This itself is incorrect statement made by the appellant since there is more than two years delay in filing the appeal when computed from the date on which the appellant acquired the knowledge about the impugned order. The delay has been occurred due to negligence as well as willful latches on the part of the appellants. There is no sufficient cause for condoning the delay in filing the appeals - application for COD dismissed.

  ---

• 2018 (6) TMI 645
  Classification of services - An arrangement was made between them and HLL to the effect that the said Oil and Vanaspati would be sold through the marketing network of HLL for a period of 3 years - whether the activities of the appellant fall within the scope of "Commission Agent" under BAS or under "Clearing and Forwarding Agent"? - Held that:- As per the agreement, the scope of services to be performed by HLL is only as a commission agent for distribution of products of Bunge in designated territory. Evidently, the responsibility of transporting the products upto the depots to HLL is that of Bunge. Bunge has also been given the responsibility of transportation from HLL depots to the redistribution stockists. To fall within the tax net of clearing and forwarding agent service, the services provided have to be in relation to clearing and forwarding operation and not either clearing or forwarding operation - clearing of goods from Bunge upto the depot of HLL is done only by the former. Even secondary transportation from HLL depots is the responsibility of Bungee. This being so, we are unable to appreciate the reasoning of the lower authority that the activities of the appellants are in the nature of "consignment agent and would therefore fall within the scope of C&F agents service". The appellant cannot be brought within the fold of clearing and forwarding agents service. They are correctly classifiable only as a commission agent for BAS under Section 65 (19) of the Act. The impugned order holding to the contrary cannot then sustain and requires to be set aside in toto, which we hereby do - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 644
  Business Support Services - Development and supply of contents - Information Technology Services - Reverse charge mechanism - appellant entered into an agreement with M/s.Verisign (Symantac) USA whereby appellant was authorized to use the software of digital signature and generate DSC (Digital Signature Certificate) and SSLC (Secured Socket Layer Certification) - Held that:- From the detailed explanation of the activity put forward by the Ld.Counsel for appellant, it is found that any of the steps/process involved in issuing DSC would fall within the definition of Information Technology Services. Further, the software is owned by M/s.Verisign, USA and appellants have obtained only right to use the software. Therefore their activity does not involve any development of software, In fact appellants make use of the software already developed by M/s.Verisign and generate digital certificates. This is nothing but use of software just like use of windows software etc. The appellant issues DSC as per license issued to them by Controller of Certifying Authorities, Appellants have to follow the procedures prescribed under the Information Technology Act, 2000. Thus the activity of issuing DSC is statutorily recognised - The department vide letter dt.28.7.2008 has clarified that if the issuance of DSC does not involve development of IT Software, adoption or adaptation service related to IT software or certification of IT Software, the activity would not fall under Information Technology Services. When the process of issue of both these certificates are akin to each other, merely because SSLC is issued under voluntary requirement of the customer the same cannot be classified under Information Technology Services. Appeal allowed - decided in favor of appellant.

  ---

• Central Excise

• 2018 (6) TMI 643
  CENVAT credit - denial for the reason that the original invoices are not produced - Service Tax Registration Nos. of the service providers are not available in the invoices - CENVAT credit availed on “Outdoor Catering Service” was ineligible - Held that:- Appellant will furnish all the original invoices to the satisfaction of the Ld. AA - the matter on this issue is required to be re-adjudicated by the adjudicating authority and hence, the appeal is remanded to the file of the adjudicating authority for verification of balance invoices, to his satisfaction - appeal allowed by way of remand. CENVAT credit - denial on the ground that some of the invoices did not contain the Service tax Registration number of the service provider - Held that:- During the course of hearing the Ld. Advocate for the appellant submitted that the assessee-appellant was not put on notice i.e., this point was never alleged in the SCN and, therefore, the impugned order has travelled beyond the scope of the SCN - the denial is thus not as per law and the Cenvat credit needs to be allowed in favour of the assessee - denial of credit set aside. Denial of CENVAT credit on the outdoor catering service - Held that:- Ld. Counsel submitted that the assessee-appellant was not put on notice i.e., this point was never alleged in the SCN and therefore, the impugned order has travelled beyond the scope of the SCN - decided in favor of assessee. CENVAT credit - civil works - rent a cab service - Held that:- It is argued that the said services pertain to general repair and maintenance carried out in a plant premises which did not involve civil works. However, this factual aspect requires verification and therefore for this limited issue of verification, this ground is remanded back to the file of the adjudicating authority to decide afresh after providing reasonable opportunity to the assessee. Liability of interest and penalty - Held that:- There is no deliberate breach of law and that it was a bonafide act because of some inadvertent mistakes - no interest and penalty could be levied. Appeal allowed in part.

  ---

• 2018 (6) TMI 642
  Clandestine removal - Pan masala, Gutkha and Mouth Fresheners - excesses of stock - receipt of excess quantity of 414473 Kg. of Kattha from their suppliers and utilized in the manufacture of finished goods - The entire demand has been raised only on the ground of reconciliations of entries and that the appellant received alleged excess quantity of 4,14,473 kg of catechu from their suppliers and utilised the same in the manufacture of suppressed production of their final products, which were cleared clandestinely without payment of duty - absence of corroborative evidences. Held that:- The learned Commissioner in the impugned order has not taken into consideration explanations given by the appellant in respect of discrepancies in the quantity of catechu presumed to have been procured and used by the appellant and various short supplies, wrong postings of figures and processing losses to arrived at actual quantity of catechu used by the appellant for manufacture of their final product. Hon‘ble High Court of Allahabad in the relied upon case of M/s Continental Cement Company [] has held that clandestine removal is a serious charge against the manufacture and the same is required to be discharged by revenue by production of sufficient and tangible evidence -It further pointed out that revenue is required to prove about the excess raw material purchased, dispatch particulars from the regular transporters, realization of sale proceeds of finished products, and to find out receipt of finished products by the buyers. In the whole proceedings, there is no evidence produced by revenue in respect of procurement of other raw materials which were required for manufacture of alleged quantity of final products in addition to one single raw material i.e. catechu discussed throughout the proceeding - there is also no evidence in respect of dispatch of finished goods, realization of sale proceeds and receipt of the alleged finished goods by the purchasers. The conclusion drawn by original authority that alleged quantity of final products were manufactured on the basis of calculation of one single raw material i.e. catechu, is not sustainable. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 641
  MRP Based Valuation - it was alleged that the assessee removed the MRP sticker - Held that:- There is no further allegation that any new MRP sticker were affixed to the goods in question. Admittedly, the provisions of Section 2(f)(iii) provides deemed manufacture definition only when the goods are labelled or relabelled or MRP is altered, which itself establishes the fact of a fixation of MRP on the goods - In the absence of any allegation of fixation or alteration of MRP, the reasoning adopted by Commissioner (Appeals) cannot be faulted upon - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 640
  Refund of Excise Duty - Excise duty paid erroneously - time limitation - Section 11B of the CEA, 1944 - Held that:- The ARE-1 is a form filled up when the exporter removes the excisable goods from the factory for export and this exempts from paying excise duty on clearance. It is for the exporter therefore to establish that the goods of the first ARE-1 was not cleared. The appellant thought it prudent to claim refund allegedly after resale, on 2.11.2015 nearly after five months from the date of first ARE-1. This was done without adhering to the procedures laid down in the statute because in any case, procedures required to be established that the goods remained with the appellant-assessee. As observed by the lower authorities even the Range Supdt. was not informed about the so called cancelled invoice in time nor did the department have any chance to physical verification of the alleged un-cleared goods. Refund claim made without following the procedures required under the statute - appeal dismissed - decided against appellant.

  ---

• 2018 (6) TMI 639
  Valuation - manufacture of telecom optical transmission equipments / optical multiplexers - inclusion of value of Tejas Network Element Software (TEJNES) in the value of these multiplexers - whether the value of the TEJNES software loaded into / supplied along with multiplexers is required to be added to the value of multiplexers manufactured and cleared by the appellants for the purpose of arriving at assessable value and discharge of Central Excise duty? Held that:- A multiplexer is a device used in telecommunications, inter alia high speed transmission of one or more input signals on single shared medium or single device. The Linux software which is an operating system manages the communication between the multiplexer hardware and the software TEJNES. However, the most essential and indispensible item aspect which would be required to make such multiplexer operational and function in the manner that it is expected to do, is the TEJNES software. The TEJNES software is the critical suite which provides control and management of the individual net work elements in a geographically dispersed net work - No doubt, the Linux software is also preloaded into the multiplexer, however that is only an operating system amongst one of the many operating systems that are available worldwide to support the technologies like the digital net work management which the multiplexer sets out to do. The TEJNES software is thus an integral and indispensible to the multiplexer, without which the hardware cannot function. TEJNES software is an integral and indispensible requirement software, without which the multiplexer will have any functionality. The Operating System, Linux also loaded into the multiplexer cannot in any case by itself cannot make the multiplexer perform the functions it is required to do. The Ld. Advocate for the respondent has been at pains to contend to the contrary, however, no technical or expert evidence has been adduced to support those arguments. Thus, TEJNES takes the colour of “embedded software” - It is not a case of charging duty of software but it is a case of charging duty on the equipment which includes the value of such basic software. The TEJNES software has to be held as an integral and vital requirement of the multiplexers and as a software without the embedding of which, the hardware cannot function. Hence value of the TEJNES software will require to be included for the purpose of arriving at the assessable value and discharging duty liability - The impugned orders dropping the proceedings initiated in the related SCNs are therefore set aside and the matter remanded back to the adjudicating authority, only for the limited purpose of quantifying the differential duty liability, interest and penalty/ies as proposed in in the related SCNs - appeal allowed by way of remand.

  ---

• 2018 (6) TMI 638
  Refund claim - time limitation - whether the observation of the Commissioner (Appeals) that the refund claim is not barred by limitation for the period November 2007 to April 2008 is correct or not? - Held that:- It is settled decision of law that the relevant date is the date of initial filing of the refund claim and not the resubmission of the same - the refund claim for the period November 2007 to April 2008 is not hit by time-bar. Interest on delayed refund - whether the assessee is entitled to interest on the refund that is already sanctioned to him? - Held that:- The refund claim having been filed on 5.12.2008 and resubmitted on 26.3.2010, the assessee would be eligible for interest on the delay of refund from three months from the date of initial submission of the refund claim. The refund was sanctioned on 11.6.2013 and the assessee would be eligible for interest on the delayed refund three months after the date of filing of the resubmitted refund claim which is 26.3.2010 - since department were not able to process the claim unless the assessee resubmitted the claim, Department cannot be burdened to pay interest from 5.12.2018 to 26.3.2010. Unjust enrichment - Held that:- The assessee has produced Chartered Accountant’s certificate along with necessary documents. The same has been verified by the refund sanctioning authority and has sanctioned the refund - appeal allowed. Appeal allowed in part.

  ---

• 2018 (6) TMI 637
  Refund of unutilized CENVAT credit - closure of factory / cancellation of registration - Held that:- Rule 10 provides for transfer of CENVAT credit in case of transfer of ownership or shift of factory etc. - In the present case, as per the business scheme change agreement entered into between the parties, there is no terms and conditions in respect of transfer of CENVAT credit to M/s. RNAIPL. The appellant has submitted that the liabilities are retained by the appellant. They have surrendered the registration and undisputedly they have become non-functional with effect from 10.4.2012. Thus they have ceased to be manufacturer of cars with effect from 10.4.2012 due to closure of unit / surrender of Central Excise registration - A similar situation was analyzed by the Hon’ble High Court of Karnataka in the case of Union of India Vs. Slovak India Trading Co. Pvt. Ltd. [2006 (7) TMI 9 - KARNATAKA HIGH COURT], where the refund claim was allowed. The appellant is eligible for refund of the balance CENVAT credit when the appellant ceases to be a manufacturer due to closure of factory - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 636
  CENVAT Credit - inputs/ input services - service tax paid on rental charges for their Mumbai office - case of Revenue is that the said services of renting of immovable property were not received within the manufacturing premises of the appellant and therefore the authorities below have rightly disallowed the credit - Held that:- The Mumbai office operates as a procurement office for the Hosur factory. Therefore, procurement of orders / products being the starting point for the manufacturing activities is performed at the Mumbai office without which there can be no manufacturing activity at its factory in Hosur. The Hon’ble High Court of Bombay in the case of Deepak Fertilizers and Petrochemicals Corpn. Ltd. [2013 (4) TMI 44 - BOMBAY HIGH COURT] had held that the assessee would be eligible for credit on the services used in relation to storage of inputs outside the factory. Denial of credit is unjustified - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 635
  CENVAT credit - various input services - Management Consultancy Services - Department was of the view that the appellants are not eligible to avail credit on the management consultancy services as these services do not have nexus with the manufacturing activity - the period involved is 2008 - Held that:- The Tribunal in the case of Tamilnadu Petroproducts [2016 (12) TMI 858 - CESTAT CHENNAI] has observed that since financing finds a mention in the list of examples given in Rule 2(l), such services definitely would fall within the definition of input services and could be eligible for credit. The appellants have availed the services of M/s. Ambit Corporate Finance Ltd. for the purposes of selling their automotive component division to raise funds. Raising funds is nothing but obtaining finance for the appellant-company. Such activity is definitely integrally connected to the manufacturing activity of the company. In any case, it would fall within the cover of activities relating to business of manufacture. Denial of credit unjustified - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 634
  Classification of goods - surgical tray, kidney tray, bed pan, lotion bowl, pressure pan (all of stainless steel), sieve chassis and tray and tubs (all of aluminium) - erstwhile rule 173B of Central Excise Rules, 1944 - According to Revenue, surgical tray, kidney tray, bed pan and lotion bowl, with classification revised to 7323 90 from 7323 00, was not entitled to exemption under N/N. 41/94-CE at sl no. Held that:- The said items are used for patient care and for goods that may also find use in hospitals are not, by that reason alone, excluded from the ambit of household articles. As the issue of classification declared by the appellant has not been touched upon in the impugned order, the eligibility for exemption cannot be denied. As far as pressure pans are concerned, the cookers/pans/parts thereof are eligible for exemption under notification 181/88-CE which has not been rescinded even if N/N. 180/88-CE has been. In any case, it is seen that the goods in question are not pressure pans but the bottom portion which, even if designed for use with pressure cooker lid, yet remains a kitchen article entitled for exemption-under N/N. 41/94-CE. In view of the lack of a clear exposition of the issue and finding, there is no reason to deny the exemption claimed - appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 633
  Clandestine manufacture and removal - raw tobacco - shortage of goods - It appeared to Revenue that there were some mismatches in the invoices issued and the GR's found from the premises of the appellants as well as the GR's found at the premises of the buyers. Whatever GR's the Revenue could tally during investigation and enquiry with the invoices were accepted and rest of the GR's appeared to be by way of clandestine removal - Held that:- Demand on account of differences of weight is bad as the appellant and its partners have given cogent explanation during investigation regarding difference of material weight in any consignment being on account of dispatch of advertisement and publicity material at times and also the gifts to be given under the "Sales Promotion Scheme" - the demand is only presumptive and is set aside. Demand of ₹ 6,00,640/- based on the Page No.40 in the diary/notebook seized from the car of Shri Chandra Prakash Agarwal - Held that: - The said investigation done by Revenue was not adequate, as no enquiry have been made regarding the said entries by the author of the said entry Shri Chandra Prakash Agarwal - Revenue have not made any further investigation and enquiry from the author of the entry Shri Chandra Prakash Agarwal - this demand to be simply presumptive in nature without any cogent evidence brought on record - demand set aside. Demand of ₹ 2,39,574/- on the basis of loose sheet recovered from the factory premises - Held that:- The said loose paper/sheet does not lead to any evidence of procuring any dutiable inputs and/or clearance of any taxable outputs, save and except presumptions of the Revenue - Department has failed to adduce any corroborative evidence in support of the charge of clandestine removal - demand set aside. Penalty u/s 11AC and Rule 52-A of the Central Excise Rules, 1944 - Held that:- penalties are not imposable and are set aside. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 632
  CENVAT credit - overvaluation of inputs - higher credit availed as compared to Cenvat credit that could have been availed on the inputs if the said inputs were not overvalued by the supplier - Held that:- There is no case of the revenue that the inputs were not duty paid nor there was any case of revenue that the inputs were not received in the factory. It was also not a case of revenue that the inputs were not used into the manufacture of Final products - it was also not the case of Revenue that the appellant has availed more Cenvat credit than that was stated in the duty paying documents of inputs. There were no need for reassessment of inputs at the end of input receiver. Therefore, the question of overvaluation of inputs does not arise. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 631
  Refund of unutilized CENVAT credit - time limitation - Concessional rate of duty - Hosiery garments - N/N. 29/2004-CE and N/N. 30/4004-CE dated 09.07.2004 - Held that:- There is no specific enabling provision of law granting refund of such accumulated credit to an assessee when he closes his factory and is not in a position to utilize the credit. As per the provision of Cenvat Credit Rules, credit is extended to the assessee only for utilization towards payment of duty of excise on their final products. If such utilization is not possible, such accumulated credit would not result in refund of the same in cash to the assessee. Hon'ble Supreme Court decision in the case of Porcelain Electrical Mfg. Co. Vs, CCF, New Delhi [1994 (11) TMI 145 - SUPREME COURT OF INDIA], held that the refund claim filed before the departmental authorities are to be governed by the time limit provided under the statute. General law of limitation is not available and the decisions where assesses have invoked extraordinary jurisdiction of High Courts and the Courts have applied the period of three years are inapplicable to the cases where the refund applications have been moved before the Revenue authorities. In as much as admittedly, the period for filing refund claims in terms of Section 11 B is only one year, the refund claim filed by the assessee after the period of three and a half years has to be held as having been filed beyond the limitation period of one year has to be rejected on the said ground - in the present case, the refund stands filed even beyond the general period of limitation of three years. Appeal dismissed - decided against appellant.

  ---

• 2018 (6) TMI 630
  Refund of Excise duty paid - Benefit of N/N. 06/2006-CE dated 01.03.2006 not availed - manufacture of PSC pipes for use in water supply scheme - benefit of notification was denied on the ground that exemption certificate from the District Collector was not produced at the time of clearance - denial of refund on the ground of time limitation and unjust enrichment - Held that:- Notification nowhere requires that such certificate should be available with the assessee at the time of clearance itself - Otherwise also there are umpteen number of decisions laying down that subsequent production of certificate, which is in the hands of the other public authority, would relate back to the clearances and as such if the condition of production of certificate is satisfied subsequent to the clearance, the benefit has to be extended. Time limitation - duty paid under protest - Held that:- The assessee had staked their claim to the benefit of the notification in the said letter and have also requested the authorities to refund the duty paid by them. Though the said letter is not in the nature of the format of the statutory refund claims to be filed by an assessee, we fully agree with the appellate authority that the same has to be considered as a protest letter, in which case, the limitation would not be applicable - demand not barred by limitation. Unjust enrichment - Held that:- It could not be said that the respondent has charged and collected separately the excise duty element from their buyer. He has also referred to the assessee's stand and the various letters written between them and the buyers to conclude that the duty element has not been included in the tender rate and the same was not collected from the State Government - Revenue has not able to produce any evidence to the contrary so as to rebut the findings arrived at by the appellate authority. Appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 629
  Valuation - Time Limitation - Whether the advance liences so procured by the appellants from their customers under which duty-free imports stand made by the appellants are required to be considered as an additional consideration received by the appellants from their buyers or not? - Held that:- The entire issue was revenue neutral. In such a scenario, no malafide can be attributed to the assessee, so as to invoke the larger period of limitation - extended period of limitation would not be available to Revenue. Only a part of the period would fall within the limitation, the authorities below are directed to quantify the demand failing within the normal period. Penalty - Held that:- on account of absence of any malafide, penalty not warranted. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 628
  CENVAT credit - services availed by the assessee at the port area - CHA services - Fumigation Services - Environ Care Services - denial on the ground that the services stand obtained beyond the place of removal, which is the factory gate and as such, have no nexus with the manufacture and clearance of the goods, which were ultimately exported - Held that:- It is seen that the Revenue in the memo of appeal have challenged the findings of Commissioner (Appeals) on merits but there is no ground challenging his order on non-applicability of extended period. As such, though on merits also this order cannot be faulted upon but in the absence of any specific challenge to the findings on limitation, we are of the view that the impugned order would sustain on the said ground itself - appeal dismissed - decided against Revenue.

  ---

• 2018 (6) TMI 627
  Reversal of CENVAT credit - inputs sent for job-work - it was alleged that the appellant had not reversed credit availed on inputs when the inputs were sent for job work and thus violated Rule 3(5) of CENVAT Credit Rules, 2004 - Held that:- There is no dispute that the inputs supplied to job worker for manufacture of wooden crates which were used for packing of finished products by the appellant. The removal of goods for job work credit of the duty paid cannot be considered as removal of inputs 'as such' as it envisaged in Rule 3(5) of CENVAT Credit Rules, 2004. The said rule requires for reversal of credit when inputs are removed as such, while Rule 4(5)(a) contemplates the situation when goods are removed and returned. Even if the appellant had reversed the credit, they would be able to take credit of the duty paid when the job worked goods / finished crates are returned by the job worker as these are cleared on payment of duty - Taking note of this fact and also the situation being a revenue neutral one, the demand cannot sustain. Appeal allowed - decided in favor of appellant.

  ---

• 2018 (6) TMI 626
  Reversal of CENVAT credit - Rule 3(5A) of CENVAT Credit Rules, 2004 - The allegation is that the appellant removed the used inputs and capital goods and did not reverse the proportionate duty upon such items - Penalty - Held that:- Though there is a vague allegation in the SCN that the appellant suppressed facts, nothing is brought out from the records to support this allegation - There being no suppression brought out from the facts with intent to evade payment of duty, the Commissioner (Appeals) has rightly set aside the penalty imposed under section 11AC of Central Excise Act. In view thereof, penalty imposed under Rule 15 of CENVAT Credit Rules, 2004 requires to be set aside - appeal allowed in part.

  ---

• 2018 (6) TMI 625
  CENVAT credit - inputs used in manufacture of defective batteries on which duty is not paid - Held that:- The issue is squarely covered by the precedent ruling of this Tribunal in appellant’s own case EVEREADY INDUSTRIES INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE & S.T., NOIDA [2016 (8) TMI 541 - CESTAT ALLAHABAD], where it was held that CBEC instructions stand in or valued during the relevant period and hence Cenvat credit is admissible in respect of the amount of inputs contained in any of the waste, refuse or bye products - SCN not sustainable - appeal allowed - decided in favor of appellant.

  ---