Advanced Search Options
Case Laws
Showing 361 to 380 of 1548 Records
-
2022 (7) TMI 1189
Seeking direction to Resolution Professional to accept the remaining claim along with interest in terms of Section 16 of M.S.M.E. Act, 2006 up to the date of actual realization - HELD THAT:- It is clear that the Resolution Professional conveyed the status of the claims of the applicant upon review of documents submitted by applicant. He was asked to submit additional information within 7 days thereafter - It is also significant to note, according to the applicant in paragraph 5, the contract was completed somewhere in August, 2015 and the claim for loss of profit damages etc. in delayed payments has been claimed for the first time before the Resolution Professional only somewhere in 2019. The alleged default, at page 6 of the application is stated to have taken place on 1st of August, 2015. It is clear that the applicant never took any steps for adjudication of his claims before any forum competent for this and notwithstanding, apparently failed to furnish the required information/documents before Resolution Professional.
This Adjudicating Authority cannot adjudicate upon the question of loss or profit interest etc. This Tribunal in its summary jurisdiction can in no way go into crystallizing the alleged claims. It is clear from the above position that the works were executed somewhere in 2015 and the claims have been raised for the first time before the Resolution Professional and that too has been observed by Resolution Professional without the required documents in support.
Application dismissed.
-
2022 (7) TMI 1188
Seeking Voluntary Dissolution of Company (M/s. R.S. Earthmovers Private Limited) - section 59 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 (IBBI Regulations) - HELD THAT:- In view of the steps taken and the satisfaction accorded by the voluntary liquidator by way of the present application, there is no legal impediment in allowing the prayer of the applicant.
The Prayer of Liquidator to dissolve the Company U/S. 59 of IBC is allowed and the said company is hereby dissolved with effect from the date of the present order. The Liquidator is directed to preserve a physical or electronic copy of the reports, registers, books of account referred to in Regulation 8 and 10 for at least eight years after the dissolution of the corporate person, either with himself or with an information utility.
Application allowed.
-
2022 (7) TMI 1187
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Mere plain reading of the provision under section 7 of IBC shows that in order to initiate CIRP under Section 7 the applicant is required to establish that there is a financial debt and that a default has been committed in respect of that financial debt. That while dealing with an application under section 7 the Adjudicating Authority is required to consider the question whether the 'debt' and 'default' is proved or not.
In the present case, the Corporate Debtor, in his reply admitted the debt and liability, further vide daily order dated 09.05.2022 the Corporate Debtor has again admitted its liability and has expressed its inability to pay the outstanding amount of Rs. 1,32,91,986/- - the Loan agreements executed between the Financial Creditor and the Corporate Debtor clearly substantiate the Financial Creditor's claim that the Corporate Debtor has defaulted on repayment which is duly admitted by Corporate Debtor.
In the interest of justice, this Tribunal has granted ample opportunities to both the parties to explore the possibilities of an amicable resolution of the matter, however, the parties have failed to arrive at settlement - upon appreciation of the documents placed on record to substantiate the claim, this Tribunal admits this petition and initiates CIRP on the Corporate Debtor with immediate effect.
Application admitted - moratorium declared.
-
2022 (7) TMI 1186
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- This Tribunal after comprehensively hearing the said matter is of the view that, the debt and default had been proven beyond reasonable doubt. Furthermore the audited financial statements of the Corporate Debtor for the year ended on 31.03.2015, 31.03.2016 and 31.03.2018 clearly proves the presence of a debt due and payable by the Corporate Debtor to the Applicant Financial Creditor.
Time Limitation - HELD THAT:- Further, the date of default is stated to be 19.03.2015 by the virtue of this Tribunal order dated 07.01.2022 in which the Applicant was 'allowed' to amend the date of default in Part-IV of the main Application IBA/706/2020. In the question of limitation, the Hon'ble Supreme Court in the case of LAKSHMI PAT SURANA VS. UNION BANK OF INDIA & ANOTHER [2021 (3) TMI 1179 - SUPREME COURT] has clearly stated that fresh period of limitation will come into play on the due acknowledgement of debt by the Corporate Debtor. The Application stands well within the period of limitation by the virtue of reflection of debt amount reflected in the Balance Sheet of the Corporate Debtor for the year ended on 01.09.2018 and the same shall be treated as acknowledgement of debt by the virtue of the Hon'ble Supreme Court judgment in ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VS. BISHAL JAESWAL &. ANR, [2021 (4) TMI 753 - SUPREME COURT], Further this Applicant has filed this present Application on 20.11.2020, thus this Application stands well within the period of limitation.
In view of the facts and also in view of the 'financial debt' which is proved by the Financial Creditor and the 'default' being committed on the part of the Corporate Debtor, this Tribunal is left with no other option than to proceed with the present case and initiate the Corporate Insolvency Resolution Process in relation to the Corporate Debtor.
Application admitted - moratorium declared.
-
2022 (7) TMI 1185
Grant of regular bail - Money laundering - illegal transportation of essential commodities of Wheat and Rice from godowns - Conspiracy - scheduled offences - proceeds of crime - dirty money - offence under Section 3 and punishable under Section 4 of the PMLA, 2002 - statements of the applicant was recorded under Section 50 of the PMLA 2002 - compliance with the twin conditions under Section 45 of the PMLA 2002 or not - HELD THAT:- The Hon’ble Supreme Court of India recently in the case of J. SEKAR @ SEKAR REDDY VERSUS DIRECTORATE OF ENFORCEMENT [2022 (5) TMI 309 - SUPREME COURT] has held that in cases of PMLA, the Court cannot proceed on the basis of preponderance of probabilities. It is further observed that on perusal of the statement of objects and reasons specified in PMLA, it is the stringent law brought by Parliament to check money-laundering. Thus, the allegations must be proved beyond reasonable doubt in the Court. Even otherwise, it is incumbent upon the Court to look into the allegations and the material collected in support thereto and to find out whether the prima-facie offence is made out. It is further held that unless the allegations are substantiated by the authorities and proved against a person in the Court of law, the person is innocent.
The findings of the Forensic Audit Report, the observations are that the aforesaid eight firms received amounts from IMAAL with some unidentified receipts and the amount received have been withdrawn in cash and further, these firms did not carry any business relations with IMAAL - In this case, the scheduled offence was registered on 19/07/2018, whereas, the Forensic Audit Report is for the period January 2018 to July 2018. The findings of the Forensic Audit Report, as referred above, only mention that all the said firms received amount from IMAAL with some unidentified receipts and they did not carry any business relations with IMAAL.
The expression “proceeds of crime” is defined under clause (u) of Section 2(1) of the PMLA which makes it clear that proceeds of crime means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property - It is the case of the prosecution in the predicate offence that the co-accused in the said case Kapil Bajrang Gupta of Shri Lambodhar Trading Company handed over to truck driver some forged documents pretending to be his own Lambodhar Trading Companies food grains. The said accused Kapil Bajrang Gupta in accomplish of the Government food grains transport contractors namely Lalit Raj Brijlal Khurana and Raju Pralhad Arshewar had supplied food grains to the company of the applicant, pretending that the food grains were his own goods.
In absence of any allegation that the applicant had any such knowledge as referred herein above, making the payment of Rs.80,10,000/- by the applicant to Kapil Bajrang Gupta, which amount is the part of proceeds of crime, creates doubt about the veracity in respect of allegations as regards transactions with the remaining seven companies and payments made to the said companies, particularly when there is nothing to prima-facie show that the applicant is related or having control over the said companies - In the present case, the prosecution has failed to bring on record the foundational facts to show that the proceeds of crime is connected with the scheduled offence.
As far as the judgment in the case of Gautam Kundu [2015 (12) TMI 1133 - SUPREME COURT] as regards twin conditions under Section 45 of the PMLA 2002, there is no dispute that the twin conditions are mandatory.
The applicant shall be released on bail - application is allowed.
-
2022 (7) TMI 1184
Classification of services - designing and constructing office interiors, customized exhibitions booths/stalls, television studios and retail fit outs - services classified as erection, commissioning and installation service and commercial or industrial construction service prior to June 01, 2007 - works contract service or pandal and shamiana services - demand of differential duty along with interest and penalty - HELD THAT:- It is undisputed that the services provided by the appellant were on turnkey basis and a composite amount is charged by the appellant for its services and for the goods used in providing them. It is undisputed that the appellant treated this as works contract services and paid VAT to the respective State Governments as appropriate. The appellant had classified these services with effect from 1.6.2007 under the head “works contract service” and had classified them under the heads of “commercial or industrial construction service” and “erection commissioning or installation service” prior to this date and paid service tax. Even while paying service tax under these heads before 1.6.2007 the appellant had claimed abatement as available under various notifications.
It has been settled by the Supreme Court in the case of Larsen & Toubro that composite works contract services involving supply of goods/deemed supply of goods and rendering services are a separate species of contract known to commerce and must be treated as works contract services only. Such services become taxable under the head of works contract service under Section 65(105)(zzzza) of the Finance Act, 1994 with effect from 1.6.2007. Prior to this there was no charge of service tax on works contract services. Therefore, there was no levy of service tax on such composite services under any other head before 1.6.2007.
Since it is undisputed that the appellant’s contract involved provisions of services as well as supply/deemed supply of goods they can only be classified under the head “works contract services” as per the law laid down in Supreme Court in Larsen & Toubro. Such services could not have been charged with service tax under any other head either before or after 1.6.2007. The show cause notices demanding service tax under the head “Pandal and Shamiana services” from the appellant, therefore, cannot be sustained.
Appeal allowed - decided in favor of appellant.
-
2022 (7) TMI 1183
Levy of Service Tax - Erection, Commissioning or Installation service or not - sub-contractor of L & T Ltd in respect of Flyover/Bridge, Railway etc - sub-contractor of Techno Fab & L & T in respect of fabrication of various steel structures - sub-contractor of Geodesic Techniques in respect of Airport - fabrication of Hulls/ Parts of body of Ships, etc for ABG Shipyard Ltd - sub-contractor of L & T, activity of construction in SEZ unit of Reliance Petroleum Ltd, Jamnagar and in SEZ unit of Reliance Oil & Gas Terminal, Kakinada - Extended period of limitation - Jurisdiction - HELD THAT:- It emerges that the appellant undertook the activity of fabrication of various structural items as sub-contractor of L & T, Techno Fab & ABG Shipyard. It also emerges that the said activity of fabrication of structural items viz. beams structs, pylons etc was carried out at various places in India in respect of Flyover, Bridges, Railway and Airport. Fabrication of structural items viz beams, structs, pylons etc which would become part of civil structure viz. Flyover/Bridge etc would therefore fall within the definition of taxable service of “Commercial or Industrial Construction Service” as given in Section 65 (25b) of the Finance Act 1994 which specifically excluded service in respect of Bridges, Railways, Airport etc from the tax net. Flyovers/Bridges cannot be equated with Plant, Machinery and Equipment. Therefore, activity undertaken by the Appellants would not fall within the definition of “Erection, Commissioning or Installation” under Section 65 (39a) as in force during 2004-05 and 2005-06 which covered Erection, commissioning or installation of Plant, Machinery or Equipment.
The impugned orders vide which it is held that work undertaken by the Appellant in relation to Bridges, Rails, Airport etc was of only fabrication of various beams, structs, pylons etc and does not amount to undertaking of work of Civil construction is not tenable as fabrication of various Beams, Struts, Pylons, etc is indeed part of Civil construction and hence fall under the definition of “Commercial or Industrial Construction Service” as given in Section 65 (25b) of the Finance Act 1994 which excludes from its purview services provided in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams and hence not taxable.
Whether the activity of undertaking fabrication of steel structures out of the raw materials of clients is taxable under “erection, commissioning and installation services”? - HELD THAT:- There is no dispute to the fact that the appellant undertook fabrication of steel structures using raw material of clients viz Techno Fab and L & T Ltd. The said activity was thus in the nature of job-work activity of production on behalf of clients; and as steel structures are excisable goods liable to duty, the same was not liable to service tax - Even if the said job work activity of production amounts to rendering of service, it would at best be Business Auxiliary Service covered under Section 65 (19) (v) of Finance Act 1994 and exempted under Notification No.8/2005-ST dated 1-3-2005. It is not in dispute that the production was done with materials of the clients at their site and therefore Notification No.8/2005-ST is satisfied. Even if the said exemption is to be held to be inadmissible there is no demand for Service tax in the Show Cause Notice under Business auxiliary service. The demand in the Show Cause Notice is under Erection, Commissioning or Installation, which is clearly not tenable.
Levy of service tax - fabrication of Hulls/ Parts of body of Ships, etc for ABG Shipyard Ltd. - HELD THAT:- It is an admitted position in the Show Cause Notice that the Annual reports of the Appellant do not show any receipt of any amount from ABG Shipyard Ltd. This clearly shows that Appellant has not undertaken any fabrication work for ABG Shipyard. The Show Cause Notice has demanded service tax from the Appellant on payments made by ABG Shipyard to a firm other than the Appellant, having the same name as the Appellant. It is available from the records that Form 16A issued by ABG Shipyard shows payment to M.K. Enterprise with PAN AACPZ5313R, which is not PAN of the Appellants’ proprietor. This aspect has not been rebutted by the Commissioner in his Order. Hence service tax demand on the fabrication of Hull/parts of body of ships, etc from ABG Shipyard Ltd cannot be sustained.
Extended period of limitation - HELD THAT:- Unless there is evidence of suppression of facts or contravention with intent to evade payment of service tax, larger period of limitation of 5 years specified in the Proviso to said Section 73 (1) is inapplicable. It appears that non-payment of service tax could be on account of the belief that no service tax was payable in respect of the activities undertaken by the Appellants; that the very fact that various decisions of Tribunal referred to herein above have also held that no service tax is payable on activities such as those undertaken by the Appellants, itself shows that the Appellants’ belief was reasonable and bona fide. It is settled law that where demand has been worked out based on the records of maintained by the assessee and where non-payment of service tax is on account of bona fide belief that no service tax was payable, the larger period of limitation cannot apply.
The Larger Bench recently by its decision in COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [2019 (6) TMI 518 - CESTAT NEW DELHI] decided the said issue, it is settled law that where the issue has not been free from doubt requiring reference to Larger Bench, the larger period of limitation cannot apply. Accordingly the demand for the extended period is not sustainable on limitation also.
Jurisdiction - HELD THAT:- It is seen that appellant have obtained registration from 2007 and hence Commissioner of Central Excise & Service Tax, Surat may have jurisdiction to demand tax for the period after the date of registration in respect of services provided outside his jurisdiction, however the tax demand is not sustainable on merits and on limitation the said issue is of only academic importance. Hence we are not giving our conclusive finding on this issue of jurisdiction.
Appeal allowed - decided in favor of appellant.
-
2022 (7) TMI 1182
Classification of services - construction services - composite supply - appellant had paid service tax on its activities under head CICS both before and after 01.06.2007 - requirement of taxability after 01.06.2007 under Works Contract services - HELD THAT:- Considering that the appellant in this case has used material for rendering service and has paid an exemption fee under the Rajasthan VAT Act in order to exemption from payment of the Act there cannot be any doubt that the contracts involved deemed sale of materials. There are no basis for the appellant’s contention that its contracts were for services simpliciter classifiable under CICS. Clearly, the contracts of the appellant were not services simpliciter but involved supply/use of materials in the course of rendering such services as well. They clearly fall under the category of WCS. Therefore, the appellant’s contention that they were not rendering WCS, has no legs to stand on.
Another interesting proposition by the learned Counsel for the appellant is that the service provider has an option to pay service tax either under CICS or under WCS. This submission is completely misplaced and is contrary to any canons of taxation. When any tax is levied, the taxable event is defined in the Act. In case of Customs, the taxable event is the import or export, in case of excise, it is the manufacture, in case of VAT, it is the sale or deemed sale of goods and in case of income tax, it is the earning of income. If no taxable event takes place, no tax can be levied. The taxable event under Finance Act, 1994 in case of services simpliciter is rendering of a taxable service and in the case of works contract it is rendering of a service along with supply or deemed supply of goods. To determine tax liability, it must first be established as to whether the service rendered falls in one of the taxable services. This classification is not a matter of choice or discretion either of the officers or of the assessee. A service cannot, at the same time be classified under more than one head - For instance a salary can only be classified as an income from salary and not as income from profession or business to claim deductions. Therefore, the submission of the learned Counsel for the appellant that it is open for the appellant to classify its services under any head it pleases is not correct.
Extended period of limitation - penalties - intent to evade or not - HELD THAT:- There are no proof of intent to evade either from the show cause notice or from the impugned order. Mere omission or merely classifying its services under an incorrect head does not amount to fraud or collusion or willful misstatement or suppression of facts. The intention has to be proved to invoke extended period of limitation - Once the returns are filed, if Revenue was of the opinion that the self-assessment of service tax and the classification was not correct, it could have scrutinized the returns and issued notices within time. The show cause notice was issued on 30 September 2015 for the period covered October 2010 to June 2012, which is clearly beyond the normal period of limitation. Therefore, although Revenue is correct on merits, the demand is time barred and, therefore, cannot sustain. For the same reason, the penalties imposed upon the appellant under Sections 77 and 78 also cannot be upheld.
Appeal allowed - decided in favor of appellant.
-
2022 (7) TMI 1181
Taxability - Rent a Cab Operator Service - Rent a Cab Operator - nature of the service is not supported by any documentary evidence - absence of any documentary evidence to justify the claim of the assesse - HELD THAT:- It is found that the appellant from the adjudication stage till this appellate stage claimed that the demand is not sustainable on the ground that vehicle which was used for “Rent a Cab Operator” is of 12 seater Therefore, the same is not covered under the “Rent a Cab Operator” service. They also submitted that in some cases they have provided their service as sub- contractor and for that reason also the Service Tax on the service of subcontractor is not taxable. It is also submission of the appellant that they have provided services to UNICEF. The claim of the appellant legally appears to be correct. However, the appellant has not submitted any documentary evidence in support of their claim either before the lower authority or before this Tribunal.
Even department also not adduced any evidence in support of the show cause notice for demand of service tax about the nature of service. In this position, without having documents on record, the claim of the appellant cannot be established regarding non taxability of the service.
In the interest of natural justice, one opportunity can be given to the appellant to present their case before the adjudicating authority and to submit all the documents whereby the claim of the appellant can be established - matter remanded to the adjudicating authority for re-consideration of the entire case a fresh - appeal allowed by way of remand.
-
2022 (7) TMI 1180
CENVAT Credit - duty paying invoices - eligibility of credit on the strength of supplementary invoices issued by the service providers - credit availed based upon such supplementary invoices which were raised by those service providers who short paid the service tax with mala fide intent - suppression of fact of availment of Cenvat Credit on the strength of supplementary invoices - levy of penalty - invocation of extended period of limitation.
Rejection of Cenvat Credit of service tax on the strength of supplementary invoices issued by the service providers - Rule 3 (1)of Cenvat Credit Rules, 2004 - HELD THAT:- The Rule clarifies that credit can be availed by manufacturer of final product for any input service received by him. In the present case apparently and admittedly, appellant is the manufacturer of medicaments. The contract labour was received for the said manufacture by two manpower recruitment supply agencies. Hence the services received from said agencies are nothing but the input service for the appellant being used in manufacture of his final product. Thus, it stands clear that appellant was entitled for availment of Cenvat credit - credit allowed.
Rejection on the ground that the Cenvat Credit is availed based upon such supplementary invoices which were raised by those service providers who short paid the service tax with mala fide intent - HELD THAT:- In the present case, there is no dispute about availment of Cenvat Credit by the appellant on the amount of initial invoices which was for service charges in respect of providing manpower services to the appellant. The dispute is only with respect to the Cenvat Credit availed on the amount of service tax which was paid for certain reimbursable amounts which were demanded by the service providers by way of supplementary invoices due to the reason that an investigation had initiated against them in February, 2012 denying them the exemption from the tax liability towards the reimbursable amounts - Since the service providers had voluntarily paid the said duty demand that they issued the supplementary invoices to the appellants claiming the amount of tax liability already discharged by them.
Non-payment of service tax on the reimbursable expenses of the salary/ wages of the contract labours received by the service providers of manpower recruitment agencies from their service recipients - HELD THAT:- Hon’ble Apex Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] has held as per Section 67 (un-amended prior to 1st May, 2006) or after its amendment w.e.f. 1st May, 2006 the only possible interpretation of the said section 67 is that for the valuation of taxable services for charging service tax, the gross amount charged for providing such taxable services only has to be taken into consideration. Any other amount which is not for providing such taxable service cannot be the part of the said value. It was clarified that the value of service tax cannot be anything more or less than consideration paid as quid pro quo for rendering such services. Accordingly, it was held that section 67 of Finance Act, 1994 do not allow inclusion of reimbursable expenses in valuation of service rules - keeping in view that the period of dispute in the present case is the period prior to May, 2015, it is held that the appellant as well as its service providers were rightly under the bonafide belief that there is no service tax liability as far as the reimbursable part of the salary/ wages is concerned.
Rejection of Cenvat credit availed on supplementary invoices - HELD THAT:- This Tribunal in the case of MADRAS CEMENTS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, TRICHY [2010 (6) TMI 397 - CESTAT, CHENNAI] has held that supplementary invoices on the strength of which disputed credit was taken cannot be an in-eligible document - Credit remains allowed.
Levy of penalty under section 76, 77 and 78 of the Finance Act, 1992 - HELD THAT:- Section 78 of the Finance Act provides for imposition of penalty due to suppression of facts or contravention of provision of law on part of the assessee with the intent to evade payment of duty etc. The service tax liability was duly discharged by the appellant and by the service provider with reference to the amount charged for providing manpower and that there is no denial about the same - the proviso to Rule-9(1)(bb) containing exclusion clause cannot be pressed into service to deny CENVAT Credit against supplementary invoices. Above all, Commissioner (Appeals) himself has set aside the penalty as was imposed under section 78 of Finance Act observing no malafide on part of the appellant. Confirmation of demand still relying upon section 9 (1) (bb) is therefore held wrong.
It is further observed that neither the SCN nor the impugned Order-in-Original dated 04.12.2017 alleges that the invoices were not genuine, the services were not received or the same were not utilized in the manufacture of dutiable final product. Mere fact that the differential amount of service tax was paid by the service provider on being pointed out by central excise officers doesn't establish that the service tax was short paid or was not paid by reason of fraud, suppression, misstatement etc. with an intent to evade the payment of service tax - penalty set aside.
Extended period of Limitation - HELD THAT:- The issuance of Show Cause Notice in the year 2017 is apparently beyond the reasonable time for issuing the same. At least it stands clear that fact of availment of Cenvat credit on disputed supplementary invoices was in the notice of the Department since the year 2012-2013. The Department is not entitled to invoke the extended period of limitation.
The entitlement of the appellant to avail Cenvat credit has been denied are hereby set aside - appeal allowed - decided in favor of appellant.
-
2022 (7) TMI 1179
Refund of service tax paid - input services utilised for export of goods made under 26 shipping bills of export - benefit of provision 3 (h) of Notification No.41/2012-ST dated 29.06.2012 - the ld.Commissioner (Appeals) observed that the exporter should be registered with the Export Promotion Council and being registered with “The Solvent Extractors’ Association” of India, which is a Trade Promotion Organisatiion (TPO), would be of no help in getting the benefit of the said Notification - HELD THAT:- The Deputy Commissioner of Service Tax has passed a detailed order incorporating shipping bill numbers, date, name of service provider, invoice numbers etc. and in short, he has gone through all the documents and has discussed the conditions of the said Notification or eligibility of refund claim and after making point-wise observation and has finally sanctioned the refund.
It can be seen that there is no dispute as to the fact that the goods were exported by the appellant-assessee. Once it is not in dispute that the services are specified for refund purpose, and since Service Tax was actually paid on specified services pertaining to export activity, in terms of the broad scheme of refund under Notification No. 41/2012-S.T. as amended with clarifications, refund must be granted to the exporter - the order passed by the Learned Commissioner (Appeals) cannot be sustained as substantive benefit should not be denied to an assessee if the conditions are fulfilled. It would not be out of place to mention that the sole intention of the Government to bring out these rebate schemes is to promote the Indian exporters to enjoy a level playing field and to compete with the exporters of other countries in the global market. Further, it is not the intention of the Government to export taxes, hence after much research these schemes have been notified and if the refund claims are rejected on such flimsy grounds, it defeats the very purpose of rebate schemes and traps the exporters under unnecessary litigations.
Appeal allowed.
-
2022 (7) TMI 1178
Condonation of losses for pig iron - What was the stock notionally determined and actually determined by the respondent – assessee and how it was adjusted in their accounts without being reflected in the Central Excise records? - accepting a reconciliation statement as submitted by the respondent – assessee without explaining the same that what was the stock notionaly determined and actually determined by the respondent – assessee and how it was adjusted in their accounts without being reflected in the Central Excise records? - applicability of Circular of CBEC being CBEC circular No.52/79-CX-6 dated 26th October, 1979 - HELD THAT:- In terms of Circular issued by the CBEC dated 26th October, 1979, the condonation of losses for pig iron have been fixed at 2% and for the iron in any crude form at 25% and with regard to tariff item 26AA and 26, it was fixed at 1%. The assessee had filed a reconciliation statement before the Tribunal which shows that the percentage of loss was well within the parameters fixed by the CBEC in the Circular stated above. That apart, the Tribunal has also taken note of the earlier decisions of the Tribunal and in particular, the decision in the case of RASHTRIYA ISPAT NIGAM LTD. VERSUS COMMR. OF CUS. & C. EX., VISAKHAPATNAM [2008 (9) TMI 663 - CESTAT, BANGALORE]. The facts of the said case are identical to that of the case on hand - it was held in the case that As far as clearance of these products is concerned, it is based on weighment. But when the products are used for capital consumption, the accounting of clearance for the capital consumption is done on the basis of standard grab weight. During the stock verification, the method followed is volumetric calculation method. Based on the volume and density the weight is calculated. Thus, we find that different criteria are adopted for estimating the pig iron for different purposes. Therefore, in the very nature of the accounting, there is bound to be difference. Unless it is shown that the appellants had cleared the goods without payment of duty in a clandestine manner, or in other words, unless there is evidence to show that there is clandestine clearance, this type of demand of duty is not sustainable.
The period covered by the show-cause notices was as on 31st March, 1989, 31st March, 1990 and 31st March, 1991. Two show-cause notices were issued on January 30, 1991 and March 31, 1992 for which the assessee had submitted replies on August 2, 1991 and January 25, 1993, after a gap of nearly 17 years from the relevant period where a notice of personal hearing was issued on 19th August, 2006 and the respondent assessee co-operated with the adjudication and also filed the written submission and the adjudication order was passed on 21st November, 2006. It is not clear as to why there was so much of delay in taking up the show-cause notice for adjudication and more particularly, when 17 years have elapsed after the relevant period the adjudication itself should be termed to be a stale adjudication.
The Learned Tribunal rightly allowed the appeal filed by the respondent assessee and the revenue has not made out any grounds to interfere with the said order - Appeal dismissed.
-
2022 (7) TMI 1177
CENVAT Credit - sale of electricity sold outside the factory - liability to pay the amount at 6% when admittedly the respondent has reversed the proportionate credit of inputs and input services attributable to sale of electricity - liability to pay as per Rule 6(3) of the Cenvat Credit Rules - electricity generated from waste gas / tail gas - classifiable under Chapter Heading 27 16 00 00 and whether the same can be said to be ‘exempted goods’ or not - waste gas or tail gas as obtained from process of manufacture as defined in Section 2 (f) of the Central Excise Act, 1944 - invocation of extended period of limitation - HELD THAT:- The decision in GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2013 (7) TMI 159 - ALLAHABAD HIGH COURT] which was affirmed by the Hon’ble Supreme Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] will also aid the case of the assessee. It was held that bagasse was a “waste” and hence, it was not manufactured of exempted goods and electricity generated from bagasse was neither excisable under Section 2(d) of the Central Excise Act, 1944, nor exempted good under rule 2(d) of the Cenvat Credit Rules 2004 and hence, Rule 6 of the said Rules is not applicable.
In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty.
The Tribunal rightly allowed the appeal filed by the assessee and set aside the order of adjudication - the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue.
-
2022 (7) TMI 1176
Demand of Central Excise duty - electricity so used in a manner other than production of the goods in their factory - captive consumption - benefit of N/N. 67/1995-CE dated 16.03.1995 - HELD THAT:- The electricity generated by the Appellant in the captive power plant is used for both production of the finished goods within the refinery and for other purposes including the electricity wheeled out. In such circumstances, it is found that Hon’ble Supreme Court and Hon’ble Punjab & Haryana High Court referred to by Ld.Authorized Representative have clearly held that in respect of electricity wheeled out, the benefit would not be available.
In the case of Maruti Suzuki Ltd. v. Commissioner [2017 (5) TMI 697 - PUNJAB AND HARYANA HIGH COURT], the Hon’ble Supreme Court has held that assessee is entitled to credit on the eligible inputs utilized in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to CENVAT credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors etc., which is sold at a price.
The matter needs to be remanded back to the original authority for re-consideration and re-quantification - appeal allowed by way of remand.
-
2022 (7) TMI 1175
Wrongful availment of Cenvat Credit by the appellant - recovery as per Cenvat Credit Rules, 2004 read with section 11A (5) of Central Excise Act, 1944 - submission of relevant documentary evidences by the appellant at any point of time - HELD THAT:- The submission made by learned Authorised Representative seems to be reasonable as the demand was confirmed by the Adjudicating Authority only on the ground that the appellant did not produce any documentary evidence in support of their submission. Therefore without going into the merits of the appeal, the matter is remanded to the Adjudicating Authority. But what is gathered from the impugned order is that the documents filed by the appellant on 05.03.2015/13.05.2015 were not available with the Adjudicating Authority, for whatever reason. Therefore, the appellant is directed to file all the relevant documentary evidence with the Adjudicating Authority within a period of two weeks from the date of this order, in support of their submission qua the demand of the amount of Rs. 15,50,625/- as the Adjudicating Authority is the proper Authority to examine the documentary evidences. The Adjudicating Authority is directed to decide the issue involved herein afresh after taking into consideration the documentary evidence to be produced by the appellant in support of their submission and after following the principle of natural justice.
The appeal is allowed by way of remand.
-
2022 (7) TMI 1174
Separate powers of the Central and the State - repugnancy owing to the application of the State laws to the vehicle permit issued under the law made by Parliament - Constitutional validity of sub-sections (7) and (8) of Section 4, Section 15 of the 1976 Act and Section 8A of the Kerala Motor Transport Workers’ Welfare Fund Act, 1985 - thrust of the challenge is on the ground that the State Legislature by way of stated amendments to the welfare legislation has effectively bootstrapped the obligation to make contribution to the workers’ welfare fund with the obligation to pay tax for operating motor vehicles - encroaching and overriding the relevant provisions of the Central legislation i.e., the Motor Vehicles Act, 1988, to paralyse the Stage and Goods Carriage Operation or to undermine the effectiveness of the transport permit provided under the 1988 Act - HELD THAT:- As regards the 1976 Act enacted by the State Legislature, the same is ascribable to Entries 56 and 57 of List II – State List. Entry 56 deals with taxes on goods and passengers carried by road or on inland waterways. Entry 57 deals with taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of Entry 35 of List III. In one sense, the law made by the State Legislature is also ascribable to Entry 35 of List III under which the Parliament has already enacted 1988 Act. However, as aforementioned, the law made by the Parliament, being 1988 Act, does not touch upon or deal with the field of manner of levy of vehicle tax and collection thereof. Whereas, the 1976 Act enacted by the State Legislature is to consolidate and amend the laws relating to the levy of tax on motor vehicles and on passengers and goods carried by such vehicles in the State of Kerala. The levy of tax is spelt out in Section 3 of this Act. Section 4 deals with payment of tax and issue of licence.
From the scheme of the 1976 Act, it is amply clear that it is specific to levy of tax on motor vehicle and passengers and goods carried by such vehicle in the State of Kerala. It is not a law regulating the issuance of a permit by the Authority under the 1988 Act as such. Indisputably, the permit issued by the Authority is hedged with conditions including the condition of regular payment of vehicle tax. Section 15 provides for the consequences for non-payment of tax consistent with Sections 10 and 11 of the 1976 Act. Thus understood, there is no occasion for conflict between the two provisions much less repugnancy.
As regards the argument regarding bootstrapping of liabilities of permit-holder under two different State legislations, it is to say the least tenuous. It is open to the Legislature to combine levies for other purposes, such as education cess, etc., for collection of tax due and payable by the same tax-payer. It is one thing to say that the person is being compelled to discharge liability under two different State enactments, although he is not liable under one of the two. That is not the argument of these writ petitioners. The petitioners are not disputing their liability under both the State Enactments. The argument, however, is that the writ petitioners may intend to invoke remedy of appeal and revision in respect of liability fastened under the 1985 Act. This argument has been rightly negatived by the High Court in paragraph 18 of the impugned judgment by observing that sufficient safeguard has been provided under the relevant enactment to file appeal/revision by remitting 50 per cent of the amount demanded - The High Court has already issued directions to extend similar benefit even in cases where review petition is filed within the prescribed time. The fact remains that no prejudice whatsoever is caused to the permit-holder who intends to pursue remedy under the 1985 Act against the demand received by him relating to the contribution of the Welfare Fund.
Reverting to the 1985 Act enacted by the State Legislature, indisputably, it is a welfare legislation constituting a fund to promote the welfare of motor transport workers in the State of Kerala. This Act is ascribable to Entries 23 and 24 of List III – Concurrent List. Entry 23 deals with social security and social insurance; employment and unemployment and Entry 24 deals with welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits. Ostensibly, it may appear that the liability arising from the obligations under the 1985 Act have nothing to do with the subject of vehicle tax. However, the 1985 Act has been enacted with the objects and reasons noted. As a vast number of employees were being engaged in Motor Transport Industry in the State in the private sector, the Government thought it necessary to provide for the constitution of a Fund to promote the welfare of such of the motor transport workers in the private sector who are not covered by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the Payment of Gratuity Act, 1972.
The activities of motor transport workers are directly linked to the use and operation of the motor transport vehicles having permit issued under the 1988 Act in that regard. Under the said Act, the permit-holder is obliged to ensure that the vehicle tax is paid regularly. The law clearly provides for action to be taken against the motor transport vehicle for failure to pay vehicle tax including to reject renewal of the permit. The stipulation in the 1985 Act is in the nature of ensuring that the vehicle owner/permit-holder discharges both the liabilities and does not commit default in contributing to the welfare fund as also pay vehicle tax on time. Non-payment of vehicle tax may entail in stopping of motor vehicle by the Officers of Police or Motor Vehicles Department in exercise of power under Section 10 of the 1976 Act including to seize and detain the same pending production of proof remittance of tax as predicated in Section 11 of the Act. Additionally, the vehicle owner may have to suffer penalty under Section 16 and face prosecution under Section 17, besides the permit being rendered ineffective if tax is not paid by virtue of Section 15.
Considering the scheme of the State legislations, it is incomprehensible to countenance the argument that the two provisions (of 1988 Act on the one hand and of 1976 Act and 1985 Act on the other) are inconsistent in any manner whatsoever. Whereas, the State enactments are complementary and can be given effect to without any disobedience to the Central legislations. The 1988 Act does not cover the field of the manner of levy of vehicle tax and collection thereof. The same is covered by the State legislations.
Concededly, the appellants have not disputed their liability to pay the vehicle tax levied under the 1976 Act as well as to pay contribution towards the workers’ welfare fund under the 1985 Act. So understood, the real grievance in these appeals by the motor transport vehicle owners/permit-holders is about compelling them to pay the welfare contribution dues as a precondition for collection of vehicle tax. We have no hesitation in taking the view that such dispensation cannot be construed as unconstitutional. Further, such a plea cannot be countenanced at the instance of someone who otherwise concedes liability to pay both the dues towards welfare fund contribution and vehicle tax. It is beyond comprehension that the vehicle owner/permit-holder can be heard to argue that he would not pay the dues under the 1985 Act and, yet, would continue with the business of motor transport as usual in the State of Kerala by exploiting the workers on the specious plea that the validity of the permit to operate transport vehicle cannot be interdicted under a State legislation - The liability of the vehicle owner/permit-holder to pay welfare fund contribution as well as to pay vehicle tax arises under the legislation enacted by the State Legislature. As such, there is nothing wrong in State Legislature making it compulsory to pay outstanding welfare fund contribution first before accepting the vehicle tax which had become due and payable. In this view of the matter, it would be unnecessary to dilate on the argument regarding validity of Section 15 of the 1976 Act because of lack of Presidential assent after coming into effect of the 1988 Act.
There are no hesitation in concluding that the provisions of the 1976 Act and the 1985 Act, enacted by the State Legislature, are only intended to ensure that the vehicle owner/permit-holder does not remain in arrears of either the welfare fund contribution or the vehicle tax both payable under the State enactments. These provisions are in no way in conflict with the law made by the Parliament (1988 Act). The State enactments do not create any new liability or obligation in relation to the permit issued under the 1988 Act (Central legislation), but it provides for dispensation to ensure timely collection of the welfare fund contribution as well as vehicle tax payable by the same vehicle owner/permit-holder.
These appeals must fail and the same are dismissed with costs.
-
2022 (7) TMI 1173
Jurisdiction - Complete waiver of pre-deposit required to be made under the Delhi Value Added Tax Act, 2004 not done by Delhi Value Added Tax, Appellate Tribunal, Delhi - whether the Objection Hearing Authority (OHA) had the power, under Section 74 of the Act, to remand the matter to the Assessing Authority? - if such a power was vested in the OHA, whether the assessment, pursuant to remand, had to be carried out within the limitation period prescribed under Section 34 of the Act? - HELD THAT:- In the matter at hand, there is an arguable defence available to the respondent/revenue. The matter needs deliberation and cogitation.
The interests of both sides would be served if the appeal is disposed of with the following directions:
(i) The appellant will deposit 5% of the disputed demand.
(ii) The appellant will deposit the aforementioned amount, within four weeks from the date of receipt of a copy of the judgement.
(iii) If the directions issued hereinabove, are complied with by the appellant, the Tribunal will hear the matter on merits.
The appeal is disposed off.
-
2022 (7) TMI 1172
Requirement of petitioner’s authorized representative to make an appearance on the date stipulated - seeking direction for a refund of Rs. 2 crores which was made over as a pre-deposit for the purposes of having its objection heard by the Special Commissioner-I, Department of Trade and Taxes, GNCTD - also seeking grant of interest on the delayed release of pre-deposit i.e., Rs.2 crores - error in classification of goods - Apple Watches/transmission devices - HELD THAT:- The error concerning classification cannot be separated from the facts obtaining in the case - it is also noted that the concern that this decision would impact revenue collections in the future, has been neutralized, as watches now attract a uniform tax rate of 12.5%.
Entry 11 obtaining in the Fourth Schedule at the relevant point in time, stands deleted w.e.f. 09.05.2016 - the revenue implications are confined to three quarters i.e., two quarters of Financial Year (F.Y.) 2015-2016 and the first quarter of F.Y. 2016-2017.
Application disposed off.
-
2022 (7) TMI 1171
Dishonor of Cheque - role of the accused/petitioners not clearly mentioned in the complaint - impleadment of petitioner in the complaint who had already resigned in 2009 and 2010 - issuance of cheque by the petitioners or not - legal notices not sent to the petitioners as well - HELD THAT:- It is settled law that in a complaint under Section 138/141/142 of the NI Act, the specific roles of the accused must be delineated in the complaint. It is generally mentioned in the complaint filed by the respondent that the accused No. 2 to 6 including the petitioners herein are jointly and severally liable for the offences. It is nowhere pleaded that the cheque that was dishonoured had been issued by any of the petitioners.
The Form-32 produced before the learned Trial Court was by the complainant/respondent himself and he did not dispute the genuineness of that Form that he had placed on the record. When the document was not disputed and it is a form that is filed as a statutory requirement entailing consequences for false information being furnished to the Registrar of Companies, on the mere say so of the complainant that the present petitioners were still active Directors, the learned Trial Court chose to reject their plea for discharge. It was of the view that without the certified copies, the undisputed documents could not be accepted. The proof that they would have led as evidence would be the certified copies of the Form-32 filed before the ROC. They have now filed the certified copies before this Court. In fact, the learned Trial Court could have called for the same.
The certified copy of Form-32 is of sterling quality and can be considered by this Court at this stage. It is clear that once the petitioners had resigned way back in 2009 and 2010 respectively, they could not have been responsible either for the issuance of the cheque dated 25th April, 2016 nor for its dishonor in April and May, 2016. They could not have been impleaded as accused in the complaint. The absence of a legal notice to these petitioners would suggest that the respondent was aware of the fact that they have resigned from the company long ago.
Petition allowed.
-
2022 (7) TMI 1170
Dishonor of Cheque - non-application of mind by magistrate before taking cognizance - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- From the entire recital of petition of complaint and also from statement recorded by Magistrate during initial deposition, not even a single word has been used anywhere which can constitute offence under section 138 of N.I. Act.
In the catena of judgments it has been reiterated that "taking cognizance of an offence" is not a mere formality. At the time of taking cognizance of the offence, the court is required to consider the averments made in the complaint. Taking of cognizance is thus a sine quo non or condition precedent for holding a valid trial. This is evident from the fact that chapter XIV (sections 190-199) of the code deals with under the heading "conditions requisite for initiation of proceeding", then comes Chapter XVI (Section 204-210) under the heading "commencement of proceeding before Magistrate" - if initiation of proceeding has been made by Magistrate under section 138 of N.I. Act under Chapter XIV of the code, Magistrate cannot issue process quoting section 323/498A/500/34 I.P.C. by dint of section 204 under aforesaid chapter XVI of the code, because it can be highly prejudicial for the accused, who has right to know the cause of summoning.
It is well-settled that when a Magistrate receives a complaint, he is not bound to take cognizance unless the fact alleged in the complaint discloses the commission of offence. This is clear from the use of the words 'may take cognizance' in section 190 of the code. The word 'may' gives a discretion to the Magistrate in the matter - when on receiving a complaint, the Magistrate applies his mind for the purpose of proceeding under Section 200 and the succeeding sections in Chapter XV of the Code, he said to have taken cognizance of the offence within the meaning of Section 190(1) (a) of Code of Criminal Procedure.
In the present case, Magistrate received a complaint which discloses an allegation that the petitioner herein has defamed her inter alia by describing her as ex-wife in open place and also by threatening her and if the Magistrate on receiving such complaint would have spent few seconds in order to go through the same and further had he spent his time to apply his judicial mind, then by no stretch of imagination, he could have observed that the case filed under section 138 of N.I. Act - Cognizance is taken at the initial stage when the Magistrate applies his judicial mind to the facts mentioned in the complaint.
Having considered the aforesaid facts and circumstances of the case and also considering the fact that this Court under section 482 Cr.P.C. not competent to pass a direction upon the Magistrate to take cognizance upon a complaint on a particular section from a particular statute, the remedy of the opposite party no. 1, who failed to question the order No. 1 passed by the Magistrate for not taking cognizance of the offence in respect of which she lodged the complaint against the petitioner, is to file a fresh complaint against the petitioner on the basis of selfsame allegation, if so advised.
Application disposed off.
............
|