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Showing 141 to 160 of 467 Records
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2025 (1) TMI 327
Revision u/s 263 - case of assessee was reopened u/s 147 - bogus purchases - HELD THAT:- We find that it is not a case “lack of enquiry or inadequate enquiry” even if there is inadequate enquiries that could not by itself, the occasion of PCIT to pass order u/s 263 merely because he has different of opinion on the matter as recorded above, AO duly examined the fact and formed opinion that no addition is necessary.
In case of Mukesh Chand Mal Pitti [2023 (10) TMI 1064 - GUJARAT HIGH COURT] held that where cash deposits made by assessee during demonetization period were specifically verified during original assessment proceedings wherein assessee produced all necessary documents as asked for by AO, it was not a case where no enquiry was made by AO during course of assessment proceedings regarding cash deposits, and therefore, impugned revision proceedings u/s 263 was to be quashed.
We further find that in Rajmal Kanwar [2016 (2) TMI 1317 - ITAT JAIPUR] also held that where AO has made sufficient enquiry, considered survey record and surrender made by assessee and after considering submissions of assessee completed assessment proceedings u/s 143(3), assessment order could not be held to be an erroneous order which was prejudicial to interest of revenue.
We also find merit in the contention of assessee that similar assessment order for assessment year 2016-17 wherein similar transaction has been accepted by AO and same is not revised on the ground of same issue.
We find that once the explanation/reply of assessee was found acceptable by AO and no addition was made he has taken a plausible view which is otherwise legally sustainable view supported with various evidence furnished by assessee, which cannot be considered as erroneous. Thus, the twin condition for exercising jurisdiction u/s 263 is not fulfilled in the present case. In our view, when the transaction of assessee with Unique Polypack was examined by the AO in accepting the impugned transaction, PCIT was not justified in invoking the provisions of section 263. Therefore, the order passed by PCIT is not legally sustainable and the same is set aside. Grounds of appeal raised by the assessee are allowed.
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2025 (1) TMI 326
Validity of reassessment proceedings - non-compliance of taking prior approval by the specified authority required u/s. 151 - Scope of “by whom” in procedural compliance for issuance of notice u/s.148 - amended provisions under the Act read with TOLA - notice u/s.148 has been issued beyond three years - HELD THAT:- In the present case, the relevant Assessment Year is 2017-18 and the time limit of three years lapsed on 31.03.2021 which falls between 20.03.2020 and 31.03.2021 during which provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) would apply. Accordingly, the amended provisions under the Act read with TOLA extended the time limit for granting of approval till 30.06.2021 by the specified authority.
Thus, in the present case, since the notice u/s. 148 and order u/s. 148A(b) have been issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income Tax-17, Mumbai. Accordingly, since a proper sanction by the specified authority had not been obtained for issue of notice u/s.148 under the applicable provisions of law, said notice is invalid and bad in law.
Referring to judicial precedent in the case of Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] and Rajiv Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] we hold that sanction by specified authority has not been obtained by the Assessing Officer in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s.148 has been issued beyond three years from the end of the relevant Assessment Year. Accordingly, the said notice issued is invalid and thus quashed. Decided in favour of assessee.
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2025 (1) TMI 325
TP Adjustment - upholding M/s. ASK Re Ltd., Hong Kong as Associated Enterprises as per Section 92A - HELD THAT:- M/s. ASK Re Ltd., Hong Kong is controlled jointly by relatives of controlling shareholder of the assessee-company and falls u/s. 92A(2)(j) of the Act.
Selection of MAM - rejecting the CUP and applying TNMM as MAM and making adjustment in respect of purchases from the AE - HELD THAT:- TPO has rejected the CUP methods giving the reason that the assessee has neither used internal CUP nor external CUP and questioned the markup of 1.09% but we are not in agreement to TPO and Ld. DRP as the price at which assessee has purchased the goods from AE is comparable to price at which third party have sold goods and if price from independent party is available, CUP is the most appropriate method to bench mark the transaction. CUP method is the MAM and the adjustment made by the TPO/Ld. DRP is uncalled for. Thus, these grounds of appeal of the assessee are allowed.
Disallowance u/s. 14A r/w Rule 8D - assessee has made investment which is capable of earning income exempt from tax - AR has argued that the assessee does not have any exempt income and the A.O has made the disallowance without recording any reason - HELD THAT:- It has been consistently held by the court disallowances u/s 14A cannot exceed the exempt income.
As decided in the case of Era Infrastructure (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT] that subsequent amendment made by Finance Act, 2022 for Section 14A of the Act by inserting non-obstante clause and explanation cannot be presumed to have a retrospective effects.
Also in the case of M/s Maxivision Eye Hospital Pvt. Ltd. [2022 (7) TMI 1450 - ITAT CHENNAI] since the assessee has not earned any exempt income, no disallowance can be resorted by invoking the provisions of section 14A of the Act read with Rule 8D(2) of the Rules. Decided in favour of assessee.
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2025 (1) TMI 324
Addition u/s 69A r.w.s.115BBE - Assessee qualifies for exemption u/s 10(23AA) - as submitted that in the case of the assessee, assessee has already incurred more than 85% of the income towards the charitable purposes, therefore, no addition is called for - HELD THAT:- Assessee is a charitable institution and had granted for 12A registration by CIT, Delhi-II, New Delhi on 26.07.1975.
No doubt, assessee was granted registration u/s 12A of the Act and it is also a fact on record that assessee has not filed its return of income even though notice u/s 148 was issued by the AO based on the financial informations available with him with regard to various deposits and renewal on time deposits. Assessee has prayed that the case of the assessee falls u/s 10(23AA) of the Act.
As per the provisions of section 139(4)(a) of the Act, it is obligation on the part of the assessee who were claiming the benefit u/s 11 of the Act has to file its return of income u/s 139 to claim the benefits. Even though the assessee who has got registration u/s 12A of the Act, in order to get the benefit it has to file its return of income. Therefore, in the given case, it is fact on record that assessee has not filed its return of income, therefore, assessee loses the benefit of claiming exemption u/s 11 of the Act.
Therefore, the case of the assessee has to be assessed on the basis of commercial terms as in AOP. We observed that the AO has assessed the income after considering gross receipts and relevant expenditure.
In our considered view, CIT (A) has given the relief without considering this aspect on record. We observed that since there was no representation on the part of the assessee before the AO and CIT (A) has granted the relief based on various documents submitted before him without giving opportunity to the AO.
Therefore, considering the nature of charitable institution which serves the widows and dependants of army soldiers, we deem it fit and proper to remit this issue back to the file of AO to consider various documents and redo the assessment as per law and consider various submissions made by the assessee before the CIT (A) with regard to term deposits and renewal of the same and also cash deposits which has generated by the assessee out of schools and other activities. We also direct the AO to redo the assessment as per above direction after giving proper opportunity of being heard to the assessee. Appeal filed by the Revenue is allowed for statistical purposes.
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2025 (1) TMI 323
Capital gain computation - Disallowance towards the cost of indexation claimed by the assessee - no documentary evidence was filed in support of the claim of expenses incurred on construction/ renovation expenses in respect of the property on which indexation was claimed - HELD THAT:- Denial of the entire expenditure incurred towards as cost of construction by the AO cannot be held to be justified even if the assessee did not submit satisfactory bills/vouchers in support of her claim towards the cost of construction.
It is also a fact that the AO in his remand report stated that an amount for the FY 2009-10 was paid for Stamp Duty, MCD Map fee and MCD Development charges and this amount was allowable as these expenditures were paid to the Government department. This further reinforces the fact that the building that was sold was constructed on which expenses were definitely incurred.
We hereby direct the AO to allow 50% of the indexation claimed. We also clarify that there will be no further allowance of indexation of Rs. 3,94,860/- as allowed by the CIT(A) as the same in our estimation is also included in the 50% of the indexation amounting to Rs. 24,42,262/- allowed by us. The balance disallowance of Rs. 24,42,262/- claimed towards indexation by the assessee by the AO is confirmed. Ground no.5 & 6 of the appeal are partly allowed.
Disallowance of deduction claimed u/s 80C towards payment of LIC premium - Above claim was stated to be allowable by the AO in his remand report, addition is deleted.
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2025 (1) TMI 322
Addition u/s 69A - cash payment towards credit card purchases unexplained - HELD THAT:- Where the assessee is found be the owner of any money, bullion, jewellery or other valuable articles and such money etc. are not recorded in the books of account, if any, maintained by him of any source of income and the assessee offers no explanation about the nature and source of acquisition of the money etc., or the explanation offered by him, is not satisfactory, in the opinion of AO, the money and the value of bullion, jewellery or other valuable articles may be deemed to be the income of the assessee for such year.
In the present case, assessee has purchased the credit cards by making cash payments. It is, therefore, clear that assessee was owner of money (cash) which was used to make credit card purchases. However, he has not explained the nature and source of acquisition of such money, being cash - AO has added the same u/s 69A of the Act due to non-compliance by assessee to the statutory notices as well as the show cause notice.
CIT(A) has rightly confirmed the addition because assessee did not attend before him or filed any written submission in support of the grounds raised before him. Before us also, the assessee has not filed any written submission in support of the grounds raised by him. Provisions of section 69A of the Act are clearly attracted to the facts of the instant appeal - Decided against assessee.
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2025 (1) TMI 321
Cash deposits during demonetization period - AO has made the addition u/s 69A r/w section 115BBE - HELD THAT:- Addition made by the AO is merely on surmises and conjunctures because the assessee has duly recorded the cash sales in its books and the alleged cash deposit is from the available cash in hand in the regular books of accounts. Assessee is regularly making cash sales from past many years.
Books of accounts are not rejected Quantitative details are maintained, because, as being an authorized dealer of TVS Motor Co. Pvt. Ltd., the purchases are duly recorded and the sales if any made in cash are also recorded in the quantitative details and VAT returns.
Therefore, in absence of any evidence of any unrecorded sales placed by the Revenue authorities and considering the fact that the assessee is a dealer of a reputed company i.e. TVS Motor Company Ltd., we fail to find any merit in the finding of both the lower authorities and are inclined to hold that the assessee has successively explained the source of cash deposits in the bank account during 9th November, 2016 to 31st December, 2016, which are from regular cash sales and therefore, impugned addition u/s 69A read with section 115BBE is uncalled for. The finding of the ld. CIT (A) is set aside and the impugned addition stands deleted. Effective ground raised by the assessee is allowed.
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2025 (1) TMI 320
Revocation of Customs Broker license - forfeiture of security deposit - levy of penalty - violation of Regulations 10 (b), 10 (d), and 10 (n) of the Customs Brokers Licensing Regulations, 2018.
Partial violation of Rule 10 (b) - allowing Sh Babu Ithape to approach the Docks officer for examination of goods - HELD THAT:- A plain reading of the said Regulation, it is apparent that the Customs Broker is required to transact the business at the Customs Station either personally or through his authorized employer. That requirement stands fulfilled as Sh Dilip Shelar, who handled the documents was an employer of the appellant. Further, it has been submitted that his responsibility ended with filing of documents which stands corroborated by the statement of Imran Sheikh. Hence, the conclusion arrived at by the adjudicating authority that the appellant has unintentionally or intentionally violated 10 (b) is not correct. Consequently, there is no violation of Regulation 10 (b).
Violation of Regulation 10 (n) - HELD THAT:- The impugned order has concluded that the appellant was not clear whether the B/E had been filed under Section 69 or Section 59 of the Customs Act. This cannot be the reason for revoking the CB license. The appellant filed the B/E as per procedure and same has been subsequently cleared by the Customs Department. It is noted that as per section 146 of the Customs Act, the role of a Customs Broker is related to the business of import or export of the goods. The obligation of the appellant was only to facilitate clearance of goods for warehousing at the Customs port. Admittedly, the appellant was not responsible for the deposition of the goods to the warehouse. It is also noted that the persons controlling the importer firm had acted on their own accord to defraud the revenue, and there is no allegation or evidence that the appellant had advised or aided their nefarious activity. In this context, support taken from the Supreme Court’s judgment in Collector of Customs, Cochin vs Trivandrum Rubber Works Ltd., [1998 (11) TMI 127 - SUPREME COURT] wherein the Hon’ble Court held that the Customs Broker is an agent for only limited purpose of arranging release of goods and once the goods are cleared, he has no further function and he is not liable for any action of the importer. Accordingly, there was no violation of Regulation 10 (n) of CBLR, 2018.
In the instant case, the KYC documents submitted by the appellant are all valid documents. There is no other requirement under Regulation 10 (n) which remains to be fulfilled by the appellant.
Conclusion - The role of a Customs Broker is limited to facilitating the clearance of goods, and they are not responsible for subsequent actions by the importer. Verification of documents through official sources fulfills the regulatory requirements. The appellant did not violate Regulations 10 (b), 10 (d), or 10 (n) of the CBLR, 2018. Consequently, the revocation of the Customs Broker's license was not justified.
The impugned order is set aside - appeal allowed.
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2025 (1) TMI 319
Rejection of request of the petitioner for amending the respective Bill of Entries under which the goods were cleared from the petitioner for clearing the goods from SEZ units - petitioner had by mistake paid 20% of the Customs duty - HELD THAT:- Not only a Bill of Entry can be modified by way of an Appeal before the Appellate Authority but also other relevant provisions of the Act. This Court has considered the same in the case of M/S. NEYVELI LIGNITE CORPORATION INDIA LIMITED VERSUS THE COMMISSIONER OF CUSTOMS, THE ASSISTANT COMMISSIONER OF CUSTOMS (IMPORT) [2022 (4) TMI 1374 - MADRAS HIGH COURT]. In para 16, the Madurai Bench of this Court has taken note of the decision of the Hon'ble Supreme Court referred to supra and has ultimately concluded 'As long as the petitioner is able to satisfy the requirements for amendment of the document namely, the subject Bill of Entry with the documents, which were in existence at the time of import, the benefit of amendments cannot be denied.'
Conclusion - There is no doubt that an importer or a person filing a bill of entry can amend the bill of entry by any of the three methods prescribed under the Customs Act, 1962 namely by way of an appeal or by filing an application under section 149 or Section 154 of the Customs Act, 1962.
These Writ Petitions are allowed by directing the respondents to re-do the exercise under Section 149 of the Customs Act, 1962, within a period of three months from the date of receipt of a copy of this order.
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2025 (1) TMI 318
Waiver of mandatory pre-deposit of 7.5% of the disputed amount for maintaining an appeal - amendment to Section 129-E of the Customs Act, 1962 - Jurisdiction of High Court to waive the mandatory pre-deposit requirement under Article 226 of the Constitution of India.
HELD THAT:- It appears that the issue was also considered in the context of the provisions of the Finance Act, 1994 by a learned Single Judge of this court in SANTHOSH KUMAR K, PROPRIETOR, M/S. SWATHI CONSTRUCTIONS VERSUS THE COMMISSIONER CENTRAL GST AND CENTRAL EXCISE, THE CHIEF COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL [2022 (4) TMI 134 - KERALA HIGH COURT], where this court held 'When the Statute does not provide for waiver of a predeposit, it is impermissible for this Court to act contrary to the legislative intention merely on the plea of financial hardships. If such pleas are entertained, and directions are issued for waiving the pre-deposit, there will be no end to such demands. Further if orders are issued, contrary to the Statute the same will destroy the very scheme of the Statute including the consequent amendment.'
The petitioner in these cases cannot be granted any relief in exercise of jurisdiction vested in this court under Article 226 of the Constitution of India - Petition dismissed.
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2025 (1) TMI 317
Evasion of Customs Duty - failure to declare MRP before the Customs and sold the goods at higher MRP - scope of its jurisdiction of Adjudicating Authority in terms of the remand order - sufficient opportunity of hearing not granted to appellant - violation of principles of natural justice.
Scope of its jurisdiction of Adjudicating Authority in terms of the remand order - HELD THAT:- There are no hesitation in saying that the Adjudicating Authority has exceeded its jurisdiction in considering the issue in respect of the live consignment and the goods lying in the godown of the appellant as they have already been decided by the Tribunal and the same were binding on the Adjudicating Authority being a subordinate authority.
Reference made to the decision of the Apex Court in UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. [1991 (9) TMI 72 - SUPREME COURT] laying down that the principles of judicial discipline require that, “the orders of the higher Appellate Authorities should be followed unreservedly by the subordinate authorities unless its operation has been suspended by competent court. The order of the Appellate Collector is binding on the Assistant Collector working within his jurisdiction and the order of the Tribunal is binding on the Assistant Collectors and the Appellate Collectors, who function under the jurisdiction of the Tribunal”.
Sale of goods on much higher MRP after changing the MRP label - HELD THAT:- The Tribunal has categorically observed that there is clear violation of the provisions of the Customs Act, which calls for demand of differential duty as well as penal action. Since the quantification of the differential duty was made in a summary manner based on certain illustrative evidences, the Tribunal had remanded the limited issue for quantification of differential duty by detailed verification.
Whether sufficient opportunity has been granted to the appellant during the remand proceedings? - HELD THAT:- Personal hearing was given for 24.09.2018 but nobody appeared, and accordingly the case was taken up for adjudication on the basis of the available records and the invoices submitted by the appellant. Hence, it cannot be said that the principles of natural justice has not been followed and sufficient opportunity has not been granted to the appellant, however, it is the appellant who failed to co- operate and deliberately avoided the hearing.
As per the Revenue, on examination it was revealed that MRP/RSP were neither affixed on individual packs nor on cardboard cartons and later, it was found that these goods were sold at much higher price than the MRP declared for assessment purposes thereby evading the payment of appropriate CVD - There are no merits in the submissions at this stage as the Revenue had not challenged these findings of the Tribunal in the earlier round of litigation.
Quantification and its consideration by the Adjudicating Authority - HELD THAT:- Even during the course of arguments, the learned counsel for the appellant had no further documents to substantiate the contention that the sale price higher than the declared MRP comprised only a small percentage and therefore there are no reason to differ from the findings of the Adjudicating Authority.
Conclusion - i) Selling goods at higher MRPs than declared constitutes a customs violation warranting differential duty and penalties. ii) The duty demand on the live consignment was set aside. The duty demand on goods in the godown was set aside. The need for quantification of differential duty on goods sold at higher MRPs was upheld. iii) The Adjudicating Authority's jurisdictional overreach was rectified by setting aside its contrary findings. iv) The quantification of differential duty was affirmed based on available evidence.
Appeal allowed in part.
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2025 (1) TMI 316
Classification of goods intended to be imported - Provisionally Preserved Areca Nut (Whole) and Provisionally Preserved Areca Nut (Split) - to be classified under Chapter Heading 0812 90 90? - HELD THAT:- The provisionally preserved betel nuts are not fit for immediate human consumption and they are more specifically covered under Chapter Heading 0812 due to following Chapter Note.
The Heading 0812 applies to fruit and nuts (whether or not blanched or scalded) which have been treated solely to ensure their provisional preservation during transport or storage prior to use (for example, by sulphur dioxide gas, in brine, in sulphur water or in other preservative solutions) provided they remain unsuitable for immediate consumption in that state. Though areca nuts are separately mentioned under 0802, nuts provisionally preserved but unsuitable in that state for immediate consumption, as the areca nuts in the present case, will get covered under Heading 0812 which occurs later in the schedule and accordingly, the nuts that are provisionally preserved and not fit for immediate consumption need to be classified more specifically under the CTH 0812 90 90.
Conclusion - The Provisionally Preserved Areca Nut (whole) and Provisionally preserved Areca nut (split) merit classification under Custom Tariff Heading 0812 specifically under sub-heading 0812 90 90 of the First Schedule of the Customs Tariff Act, 1975.
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2025 (1) TMI 315
Challenge to Impugned Order - failure to consider the changed circumstances - failure to appreciate that the OTS offer stood to benefit the stakeholders more than the approved Resolution Plan - HELD THAT:- It is to be kept in mind that the submission of the one-time settlement proposal as prayed for in the Interlocutory Application being IA (IBC) No. 1862/2024, could not be considered by the Learned Adjudicating Authority for the reason being that, on earlier three occasions, the OTS proposals had already stood rejected and also because of the fact that Resolution Plan as of now has already been approved on 07.12.2023. Therefore, with regard to the instant OTS proposal submitted on 03.09.2024, by virtue of IA No. 1862/2024, there was no scope open for the said proposal to be considered to be accepted and consequentially the Impugned Order that was passed thereon, holding that the OTS proposal as prayed for in IA (IBC) No. 1862/2024, could not be considered and is not maintainable as the Resolution Plan has already been approved, cannot be faulted.
The view expressed by the Learned Adjudicating Authority in the Impugned Order of 12.09.2024, holding OTS proposal to be not maintainable due to the fact of the Resolution Plan already having been approved cannot be faulted of in any manner whatsoever, as new chapter cannot be permitted to be opened, when the Appellant himself has failed on three earlier occasions to get his OTS proposals approved and because of the fact that the Resolution Plan as of now has already been approved. In these circumstances, the application being IA (IBC) No. 1862/2024, could not have been considered by the Learned Adjudicating Authority and the same has been rightly rejected by the Impugned Order, which does not call for any interference in the exercise of the Appellate jurisdiction by this Appellate Tribunal under Section 61 of I & B Code, 2016.
Conclusion - The view expressed by the Learned Adjudicating Authority in the Impugned Order of 12.09.2024, holding OTS proposal to be not maintainable due to the fact of the Resolution Plan already having been approved cannot be faulted. The finality of an approved Resolution Plan in insolvency proceedings is paramount, and subsequent settlement proposals cannot be entertained unless there are compelling reasons.
Appeal dismissed.
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2025 (1) TMI 314
Levy of service tax - expenses incurred by the petitioner as a "pure agent" for its customers - mandatory requirements of pre-consultation hearing / pre-notice consultation before the issuance of the Show Cause Notice complied with or not - violation of principles of natural justice - HELD THAT:- Since the reply of the petitioner is in adequate and is bereft of factual details to explicate that the petitioner had indeed incurred expenses as pure agent on behalf of the customers / clients, the decision of the 2nd respondent in the Impugned Order-in-Original 16-21/2021 vide DIN No.20211059TK0000555CB8 dated 26.10.2021 will not warrant any interference.
However, the fact remains that the petitioner is providing Clearing and Forwarding Services and that of a Goods Transport Agent (GTA) / Goods Transport Operator (GTO).
Therefore, to balance the interest of the petitioner and the respondents and considering the fact that the disputes pertains to the period starting from April 2008 ending with 2017 i.e., 30.06.2017, this Court is inclined to quash the Impugned Order and remits the case back to the respondents to pass a fresh order on merits. However, the petitioner shall deposit a sum of Rs. 50,00,000/- to secure the interest of the revenue.
Conclusion - The Impugned Order is quashed and the case remanded back, allowing the petitioner to address procedural and time-bar issues comprehensively.
Petition disposed off by way of remand.
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2025 (1) TMI 313
Invocation of extended period of limitation for recovery of service tax under proviso to Section 73(1) of Chapter V of the Finance Act, 1994 - entitlement to exemption under N/N. 25/2012-ST dated 20.06.2012 on the services provided to various Government Department - HELD THAT:- This Court has already answered the issue partly against the contractors in the writ petition that were filed before this Court. However, liberty has been granted to the assessee to participate in the proceedings, if they had not filed any reply. Since the notice was issued during the Covid – 19 pandemic and the personal hearing also held during the Covid-19 pandemic, Court is inclined to set aside the impugned order and remits the case back to the first respondent to pass a fresh order on merits. Needless to state, the petitioner shall be heard before final orders are passed. The first respondent shall pass a final orders on merits and in accordance with law preferably within a period of 6 months from the date of receipt of a coy of this order.
Conclusion - The extended period of time limit for recovery of Service tax under proviso to Section 73(1) of the Finance Act 1994 read with Section 174 of the CGST Act, 2017 is invokable.
Petition allowed.
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2025 (1) TMI 312
Quantification of service tax - whether the amount reflecting in Income Tax return for the year 2014-15 is taxable value of services or it includes non-taxable amount also? - penalty.
HELD THAT:- The learned Commissioner (Appeals) in the impugned order has placed reliance on the Statement/ 26AS to hold that services rendered by the Appellant were taxable services and service tax was chargeable on whole consideration received during impugned period 2014-15. As per Statement/ 26AS, TDS was deducted under Section 194C of the Income Tax Act. As per the learned Commissioner (Appeals), under Section 194C of the Income Tax Act, TDS is deductible when services namely Works Contract Service, Construction of Commercial Complex Service, Construction of Residential Complex Service, Repair Maintenance, Erection, Commissioning & Installation Services are provided. For charging service tax, valuation of every service specified in Section 194C requires specific method and specific abatement. Onus lies on the Department to identify the nature of service provided on which demand of service tax is being raised.
In the case of COMMR. OF C. EX., CHANDIGARH VERSUS ARPIT ADVERTISING [2011 (5) TMI 702 - CESTAT, NEW DELHI], the Tribunal has held that without identifying the nature of the Service provided by way of proper investigation, demand of service tax cannot be raised on the basis of Balance Sheet and other financial statements. Similarly, Hon’ble Madras High Court in the case of M SUGANTHI, THIRUMURTHY BUS TRANSPORT AND K MAHALINGAM VERSUS ASSTT COMMISSIONER OF CENTRAL EXCISE, POLLACHI [2011 (4) TMI 11 - HIGH COURT OF MADRAS] held that the Department exercising power under fiscal statute while passing order bringing someone under taxing net, requires specific finding as to the liability. In this case, the Department failed to discharge the onus upon it to identify nature of service before confirming demand. The impugned order is not proper and justified.
In accordance with provisions of Section 67 of the Finance Act, 1994 read with Rule 2A of the Service Tax (Determination of Value) Rules, 2006 no service tax was chargeable on the value of goods sold during execution of work contract. Ld. Commissioner (Appeals) has erred to confirm the demand of service tax on the value of goods also. Section 67 of the Finance Act, 1994 provided to charge service tax on the value of service only. Rule 2A of the Service Tax (Determination of Value) Rules, 2006 provided that value of service in works contract would be less by the value of goods supplied. Thus, no service tax was chargeable on value of goods amounting to Rs.33,00,650/-. It was observed by the Ld. Commissioner (Appeals) that no sale tax was paid on the supply of goods. Hence, the value of goods was taken as value of service.
Reference is drawn to the decision of the Hon’ble Supreme Court in the case of Bhayana Builders Pvt. Ltd. [COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] where the Apex Court has observed that a plain meaning of the expression “gross amount charged” used in Section 67 of the Finance Act, 1994 for charging service tax by the service provider would lead to obvious conclusion that value of goods even if provided free of cost would not be included for arriving at “gross amount”. It shows that value of goods even if there is no sale would not be part of value of service. It also shows that there would be no VAT/ sale tax as no sale element exists, even then no service tax would be payable on value of material. Thus, no service tax would be demanded on the value of goods sold.
Out of total consideration of Rs.57,68,440/- for 2014-15, an amount of Rs.33,00,650/- pertains to sale of goods and the remaining amount of Rs.24,67,790/- pertains to provision of services of erection, assembling and installation against the works contracts as certified by the Chartered Accountant and submitted by the Appellant. The Appellant raised Invoice No.13 dated 19.08.2014 to M/s Par Techno Heat Pvt. Ltd., for fabrication, erection and commissioning work of ESP including cost of material against contract dated 18.01.2013. The invoice is a composite invoice. The contract was Works Contract. Service Tax @12.36% was payable on the forty percent of the said value of Rs.24,67,790/- as per Rule 2A(ii) (A) of the Service Tax (Determination of Value) Rules, 2006 - In accordance with above N/N. 30/12-ST dated 20.06.2012, service tax liability on the Appellant comes to Rs.61,004/- (50% of Rs.1,22,008/-) which was already discharged vide challan No.22394 dated 30.03.2015 along with interest before issuance of the instant SCN. Thus, no demand of service tax is sustainable.
Penalty - HELD THAT:- In case no demand is sustainable, no penalty is imposable. In the SCN, penalty under Section 78 of the Finance Act, 1994 was proposed and subsequently vide the impugned order penalty under the said Section was imposed - As in the present case, there is no short payment of Service Tax, no penalty is imposable under Section 78. Penalty imposed under Section 78 is, therefore, liable to be quashed. Penalty under Section 77(2) was also imposed which is a residuary penalty but in the SCN and subsequent order, nothing was discussed for imposition of residuary penalty. Hence, no penalty is imposable under Section 77(2). As regards, demand of late fee for filing ST-3 Return for the period from Oct, 2014 to Mar, 2015 belatedly, she submitted that as there was no tax liability during that period, non-filing or late filing of return was not chargeable to any late fee in view of Board’s Circular No.97/08/07-ST dated 23.08.2007 which has clarified the requirement of filing returns when service tax liability is nil.
Conclusion - Service tax cannot be levied on amounts received for the sale of goods. Proper investigation is required to determine the taxable value of services.
Appeal allowed.
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2025 (1) TMI 311
Levy of service tax service tax based on discrepancies between ST-3 Returns and Income Tax Returns - entire demand is based on difference in ST-3 Returns and Income Tax Returns and that the demand is raised without examination of the books of accounts - time limitation - HELD THAT:- The Revenue should have established that the said transactions were in respect of provision of services. Further, the Authorities knowing well about the activities of the Appellant since 2008, Appellant filed returns for the year 2013-14 onwards and nil returns were filed from 2015-16 and 2016-17. In the circumstances, there is no reason to invoke extended period of limitation in the absence of any ingredient with an intention to evade payment of service tax. Thus, show cause notice issued under the provisions of Section 73(1) of Finance Act, 1994 is unsustainable in law. Accordingly, the notice is hit by bar of limitation.
This Tribunal and other Co-ordinate Benches, in catena of decisions continuously hold that solely on the basis of Income Tax Returns, demand cannot be sustainable. Therefore, it is essential to establish that the value on which such service tax is calculated is the value under Section 67 and the same is derived from the consideration received by the appellant out of the activity which has to satisfy definition of Service under Sub-section (44) of Section 65B of Finance Act, 1994. Such type of examination of the facts and arriving at the prima facie view that the appellant had received the consideration by providing service is missing in the show cause notice. Thus,t the said show cause notice dated 31.12.2020 is not sustainable in law.
Conclusion - Service tax demands cannot be based solely on discrepancies between tax returns without corroborating evidence. The burden of proof lies with the Revenue to establish receipt of consideration for services.
Appeal allowed.
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2025 (1) TMI 310
Levy of service tax - discrepancies identified between the values reported in the ST-3 Returns and Income Tax Returns filed by the Appellant for the year 2016-17 - demand raised without examination of the books of accounts - time limitation - HELD THAT:- The Revenue should have established that the said transactions were in respect of provision of services. Further, it is found that the Authorities knowing well about the activities of the Appellant since 2012, Appellant filed returns for the year 2012-13 onwards. In the circumstances, there is no reason to invoke extended period of limitation in the absence of any ingredient with an intention to evade payment of service tax. Thus, show cause notice issued under the provisions of Section 73(1) of Finance Act, 1994 is unsustainable in law. Accordingly, the notice is hit by bar of limitation.
Further, it is found that this Tribunal and other Co-ordinate Benches, in catena of decisions continuously hold that solely on the basis of Income Tax Returns, demand cannot be sustainable. Therefore, it is essential to establish that the value on which such service tax is calculated is the value under Section 67 and the same is derived from the consideration received by the appellant out of the activity which has to satisfy definition of service under sub-section (44) of Section 65B of Finance Act, 1994. Such type of examination of the facts and arriving at the prima facie view that the appellant had received the consideration by providing service is missing in the show cause notice. Thus the said show cause notice dated 12.10.2021 is not sustainable in law.
Conclusion - Demands based solely on discrepancies in tax returns without examining books of accounts are unsustainable; show cause notices require a factual basis.
Appeal allowed.
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2025 (1) TMI 309
Short payment of service tax - Wrongful availament of abatement of 60% as per SI.No. 10 of N/N. 26/20120ST dated 20.06.2012 as amended - HELD THAT:- The appellant have vehemently argued that the service on which the present demand was confirmed itself was not taxable, this claim was made by the appellant before the adjudicating authority, however, the adjudicating authority has not given the relief on the ground that at the time of payment of service tax they have not claimed the exemption from service tax from the service in question therefore at this stage they cannot make their claim. The adjudicating authority on this contention is disagreed as it is a settled law that any benefit available under the law can be claimed at any stage by an assessee. Therefore, if the appellant’s service is exempted or non taxable the present demand will not sustain however, it is not examined whether the exemption claimed by the appellant is admissible to them or not and the same is left open for the adjudicating authority to reconsider the matter.
Conclusion - It is a settled law that any benefit available under the law can be claimed at any stage by an assessee.
Appeal allowed by way of remand to the adjudicating authority for passing a fresh order.
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2025 (1) TMI 308
Liability to pay interest on the Cenvat Credit wrongly availed in terms of Rule 14 of Cenvat credit Rules, 2004 read with Section 75 of the Finance Act, 1994 - HELD THAT:- This appeal is involving limited issue of demand of interest amounting to Rs. 7,43,063/- on the ground that the appellant have wrongly availed the credit. It is found that since the appellant have not utilised the credit and kept in separate account and not in the Cenvat account the same will not amount to wrong availment of credit unless or until the same is transferred to the Cenvat account and utilized the same. Therefore in this fact till the appellant have utilized the amount for payment of service tax neither it is a case of availment of credit nor any interest liability arise. Accordingly, in the facts of the present case the appellant is not liable to pay any interest hence the demand of interest is set aside.
Conclusion - The appellant is not liable to pay any interest.
Appeal allowed.
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