Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 10, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Clarifications regarding GST on College Hostel Mess Fees - taxable at 5% without Input Tax Credit - It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor.
Income Tax
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Bogus purchase - it is strange that assessee wants the Revenue to produce assessee’s own vendors, whom the assessee could not produce. The purchase bills from these non-existent/bogus parties cannot be taken as cogent evidence of purchases - additions confirmed - AT
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Unexplained share application money - A.O. did not perform his duties at the assessment stage so as to make addition against the assessee-company. No cash was found deposited in the account of the Investor. - No additions - AT
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Claim of deduction made u/s 10B - Development Commissioner granted the approval of 100% EOU in favour of the assessee-Company, which came to be subsequently ratified by the Board of Approval and as observed hereinabove as such the ratification shall be from the date on which the Development Commissioner granted the approval - AT
Corporate Law
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The penalty with respect to failure to file resignation by auditor reduced to fifty thousand rupees or the remuneration of auditors whichever is less - Section 140(3) of the Companies Act, 2013
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Appointment of auditors - requirements of annual ratification by members with respect to appointment of auditors done away with - Section 139(1) of the Companies Act, 2013
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Copy of financial statement to be filed with Registrar - unaudited financial statements of foreign subsidiaries which is not required to get its accounts audited allowed to be filed - Section 137(1)(c) of the Companies Act, 2013
Service Tax
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CENVAT credit - input/input services - construction of commercial, industrial and residential premises the provisions of Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. The appellant is neither having any factory nor he is manufacturer. The appellant is a service provider of port - credit allowed - AT
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Business Auxiliary Services - non-competing agreement - the period prior 01.07.2012, the amount recovered by the appellant by way of non-compete agreements are not liable to tax under the Finance Act, 1994. - AT
Central Excise
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Refund claim - reversal of CENVAT credit under protest - whatever duty has been paid by the respondent by reversal of Cenvat credit is required to be refunded to the respondent in cash as the same was not recoverable from the respondent at all - AT
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Cenvat Credit - whether the respondent is entitled to service tax paid on the services utilized for removal of hazardous waste? - Held Yes - AT
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Classification of Waste Crude Oil - classified under Tariff Item No. 2709 00 00 or under Tariff Item No. 3814 00 10? - - also called as ‘Residual Crude Petroleum Oil’ - to be classfied under Tariff Item No. 2709 00 00. - AT
Case Laws:
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Income Tax
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2018 (1) TMI 401
Sale of land - whether the sale consideration was liable to be treated as business income of the appellant under Section 28 or being the sale of an agricultural land, the appellant was entitled to be exempted from capital gains tax under Section 45? - Held that:- It is an undisputed fact that the appellant had purchased agricultural land on 16-08-2006 while he was still a Non-resident Indian and thereafter he did not do any agricultural operations on that land. After retaining it for about two years, he sold it to St.Antony's Timber Depot, Chevoor. In the meanwhile, he had also levelled the land by expending a sum of ₹ 1,75,000/-. Admittedly, he did not obtain the permission of the RBI under Section 47 of the Foreign Exchange Management (Acquisition & Transfer of Immovable Property in India) Act, 1999, which prohibits acquisition of agricultural land by an NRI. The fact that he had levelled the land and enhanced its saleability is also an indication of his intention to resell the land even when he purchased it. He had made huge profits consequent to the sale and therefore undoubtedly the transaction amounts to “adventure in the nature of trade”. The profit which he made out of this sale would therefore be chargeable to tax under the head “income from business”.
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2018 (1) TMI 400
Disallowance of depreciation on the windmill at Village Nu despite - windmill having been installed only and not having started actual power generation - Held that:- Tribunal correctly held that the certificate of AEN, AVVNL that the wind mills was put to use in the month of March, 2010 and it has generated electricity of 5.2 Kwh. Thus it shows that the assets of thw wind mill at NU Unit was put to use by the assessee for the purpose of business. Hence, the documents produced by the assessee from the AEN, AVVL and the details of the generation of electricity that wind mill at NU Unit was had generated the power on 31.03.2010 proves that wind mill at NU unit was put to use. Thus CIT(A) is not justified in confirming the disallowance of depreciation of ₹ 1,72,00,000/- which is directed to be deleted - Decided in favour of assessee
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2018 (1) TMI 399
Refund of excess income tax paid by the petitioner - Held that:- The notice dated 12.01.2017, is premature, since there is nothing on record to state that the refund claim made by the petitioner has crystallized into an order of refund. Thus, the impugned notice has virtually prejudged the matter and could not have been issued before a decision has been taken by the first respondent on the petitioner's request for refund. Thus the notice dated 12.01.2017, issued by the second respondent is held to be unenforceable as it is premature, giving liberty to the second respondent to initiate fresh proceedings after an order is passed by the first respondent on the petitioner's representation for refund dated 20.01.2017. The first respondent is directed to consider the representation of the petitioner dated 20.01.2017, within a period of six weeks from the date of receipt of a copy of this order, after affording an opportunity of personal hearing to the petitioner's authorized representative.
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2018 (1) TMI 398
Disallowance u/s.14A - Held that:- During the year under consideration also assessee has not earned any exempt income, accordingly following the order of the Tribunal in assessee’s own case, we do not find any merit for the disallowance made u/s.14A. Disallowing foreign exchange loss on forward contracts treating the same as speculation loss - Held that:- As the facts and circumstances during the year under consideration are same, respectfully following the order of the Tribunal in assessee’s own case, we do not find any merit for the disallowance of foreign exchange loss so made by the AO treating the same as speculation loss. Disallowance of interest explained u/s.36(1)(iii) - Held that:- The assesses has incurred expenses on behalf of certain foreign subsidiaries and Indian subsidiary and shown them under the head Advances Recoverable. The assessee has not made any non business advance to the these companies, but these amount represents various debits in the nature of sale of spares, royalty receivable, service charges and the expenses incurred on their behalf such as traveling expenses, establishment expenses, financial guarantees, communications expenses, etc. The assessee does not have system of charging interest on such debits of expenses incurred on their behalf. Such advances did not attract any adjustment in Transfer Pricing order also. However, the Ld. AO considered these debit balances as advances without interest and disallowed ₹ 1,07,54,398/- out of interest u/s 36(1)(iii). We do not find any merit for the disallowance so made by the AO.
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2018 (1) TMI 397
Penalty levied u/s. 271(1)(c) - Assessing Officer did not strike off and specify the charge/limb for which he is proposing to initiate penalty proceedings - Held that:- The notice issued by the Assessing Officer u/s. 274 r.w.s. 271(1)(c) of the Act is on account of non-application of mind and therefore on this account itself the penalty imposed u/s.271(1)(c) is liable to be deleted. Thus, we direct the Assessing Officer to delete the penalty levied u/s.271(1)(c) of the Act. See Orbit Enterprises v. Income Tax Officer [2017 (11) TMI 172 - ITAT MUMBAI] - Decided in favour of assessee.
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2018 (1) TMI 396
Validity of reopening and sustaining disallowance of 2% of bogus purchase - Held that:- Tangible and cogent incriminating material were received by the AO which clearly showed that the assessee was beneficiary of bogus purchase entries from bogus entry providers which formed the reason to believe by the AO that income has escaped assessment. The information so received by the AO has live link with reason to believe that income has escaped assessment. On these incriminating tangible material information, assessment was reopened. At this stage there has to be prima facie belief based on some tangible and material information about escapement of income and the same is not required to be proved to the guilt. See CIT(A) Vs. Rajesh Jhaveri Stock Brokers P. Ltd [2007 (5) TMI 197 - SUPREME Court] Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario, it is amply clear that the assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills is bogus and nonexistent. The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. The assessing officer also issued notices to these parties at the addresses provided by the assessee. All these notices have returned unserved. Assessee has not been able to produce any of the parties. Neither the assessee has been able to produce any confirmation from these parties. In such circumstances, there is no doubt that these parties are non-existent. I find it further strange that assessee wants the Revenue to produce assessee’s own vendors, whom the assessee could not produce. The purchase bills from these non-existent/bogus parties cannot be taken as cogent evidence of purchases. In light of the overwhelming evidence, the Revenue authorities cannot put upon blinkers and accept these purchases as genuine - Decided against assessee
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2018 (1) TMI 395
Treating the loss from the transactions in mutual funds - busniss or capital loss - Held that:- After having recorded these findings on the basis of submissions made by the assessee, the Ld. CIT(A) held that the transactions in shares and mutual funds could not be split up to give different treatment for the purpose of computing the income of the assessee since both the activities were one and the same and were carried on in an organized manner to earn profit. He accordingly directed the A.O. to treat the loss incurred by the assessee in the transactions of mutual funds as business loss and set off the same against the profits of the assessese from share trading. At the time of hearing before the Tribunal, DR has not been able to raise any material contention or bring any relevant material to rebut or controvert the findings recorded by the Ld. CIT(A) while giving relief to the assessee on this issue. Therefore, find no justifiable reason to interfere with the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue. As regards the application of provisions of section 94(7), the Ld. CIT(A) has held that the said provisions are not applicable in the case of the assessee as it involved investment in dividend reinvestment plan. Moreover, as submitted by the learned counsel for the assessee at the time of hearing, the assessee had not received any dividend from the relevant mutual funds. Thus as in agreement with the Ld. CIT(A) that provisions of 94(7) are not applicable in the case of the assessee. As held by the Ld. CIT(A), the provisions of section 94(8) were relevant and since the assessee had not continued to hold all or any of the additional unit allotted on the reinvestment of the dividend, the same was also not applicable. Therefore, uphold the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue and dismiss ground no 1 and 2 of the revenue’s appeal. Addition u/s 14A - Held that:- It is observed that this issue is squarely covered in favour of the assessee by the decision of the Hon’ble Kolkata High Court in the case of CIT vs G.K.K. Capital Markets (P) Ltd. (2017 (2) TMI 628 - CALCUTTA HIGH COURT) wherein it was held that no disallowance under section 14A can be made on account of expenditure incurred in relation to the investment made by the assessee in shares held as stock in trade. - Decided against revenue
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2018 (1) TMI 394
Rejection of books of accounts - invocation of section 145 - estimation of G.P. - Held that:- G.P. rate for the year under consideration was better than immediate preceding year. Further this was a new business started wherein the expenditure on account of rent and the stitching was comparably higher to the other established sister concern units. This fact has been compared with the rent and stitching expenses debited in the P&L account of the assessee and in the P&L account of sister concern in the name of Nakora Packaging Industries. Thus, the assessee is able to establish that the books results are comparable to the sister concern for the peculiar facts of this case for the year under consideration. Considering all these facts and legal position, the Bench find no merit in sustaining this disallowance, hence, the same is hereby deleted. Lump sum disallowance on account of various expenses debited in the P&L account - Held that:- The appellant could not fully controvert the findings of the AO. However, the disallowance made by the AO appears to be on the higher side. Considering the volume and nature of business of the appellant, it would be fair and reasonable to restrict the disallowance to 50% of the amount disallowed by the AO. CIT(A) has reasonably restricted the disallowance at ₹ 28,866/-, therefore, the same is hereby upheld.
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2018 (1) TMI 393
Validity of assessment - non-issue of notice u/s. 143(2) - Held that:- From the findings of the Assessing Officer and ld. CIT(A), one thing is apparent that no notice u/s. 143(2) was issued to the assessee as the ld. CIT(A) himself has held that mere non-issuance of notice u/s. 143(2) by itself cannot be said to vitiate the assessment proceedings. In a number of judgments delivered by various Courts and Tribunals, it has been held that service of notice u/s. 143(2) is mandatory requirement. See Indus Tower Limited vs. CIT [2017 (6) TMI 24 - DELHI HIGH COURT] - Decided in favour of assessee
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2018 (1) TMI 392
Rejection of books of accounts - invocation of section 145 - estimation of G.P. - Held that:- Past history of the assessee is the best guide to accept/reject the book result of the assessee. The Assessing Officer had not brought on record any positive evidence to enhance the gross profit for making additions. The G.P. is better than earlier year. The assessee is purchasing raw material in kilograms and the output is in pieces. Thus, there is no possible way to make coordination between input and output. In such a situation, the gross profit is the proper way to arrive at comparative book results. Therefore, considering all the facts and circumstances, the Bench finds that the ld. CIT(A) was not justified in confirming the addition, therefore, the same is deleted. Assessee’s appeal is allowed. Lump sum disallowance made on account of various expenses debited in the P&L account - Held that:- After hearing both the sides on this issue, the Bench is of the view that sustaining the addition of ₹ 50,000/- is on higher side, therefore, in the interest of justice, equity and fairness, the disallowance of ₹ 25,000/- shall be reasonable. Hence addition up to 25,000/- is sustained and balance is deleted. - Decided partly in favour of assessee
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2018 (1) TMI 391
Validity of assessment u/s 153A - addition u/s 68 - Held that:- In the present case, is an admitted fact that no recovery has been made from the possession of the assessee-company. The department’s belief is that some material found during the course of search in Aryan Sainik Group of cases. The A.O. on examining the books of account of the assessee-company found that assessee has received share application money of ₹ 1.25 crores in assessment year under appeal which were already disclosed to the Revenue Department prior to the date of search. Therefore, its books of account could not be treated as incriminating material against the assessee-company. No evidence was found during the course of search that any money (cash credit) belongs to the assessee- company. No evidence was found during the course of search or otherwise to prove that assessee-company has received any accommodation entry. The A.O. has not referred to any seized document or material in the assessment order on the basis of which, addition on merit have been made. Therefore, the conditions of Section 153C are not satisfied in this case. Therefore, there were no justification for the A.O. to make addition of ₹ 1.25 crores against the assessee in proceeding under section 153C of the I.T. Act, 1961. We, accordingly, set aside the orders of the authorities below and quash the proceedings under section 153C of the I.T. Act. Since, we quash the proceedings under section 153C of the Act, therefore, there is no need to decide the addition on merit - Decided in favour of assessee
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2018 (1) TMI 390
Scope of rectification order u/s 154 - withdrawing the credit being cash seized during the course of search and claimed as self-assessment tax in ITR filed under section 153A - Held that:- The Hon’ble Kolkata High Court in the case of Hindustan Lever Limited [2006 (3) TMI 80 - CALCUTTA High Court] while considering the scope of Section 154(1) of the I.T. Act held that the mistake must be so obvious that it can be easily corrected to wit an arithmetic error, wrong quotation of section etc., but not a debatable issue. In the present case, the claim of assessee for adjustment of seized cash towards self-assessment tax was accepted by the A.O. after considering the explanation and statement of assessee. Therefore, without justification, the A.O. should not have rectified the order for withdrawing such benefit to the assessee. The Ld. CIT(A), therefore, correctly followed the order of the ITAT, Kolkata Bench in the case of Narendra N. Thacker (2015 (11) TMI 62 - ITAT KOLKATA). Since, the issue was highly debatable before the A.O, therefore, in such circumstances, A.O. should not have pass the rectification order under section 154 of the I.T. Act. No infirmity have been pointed out in the order of the Ld. CIT(A). We, therefore, confirm the same and dismiss the appeal of the Revenue.
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2018 (1) TMI 389
Unexplained share application money - sufficient documentary evidence to prove the genuineness - Held that:- Assessee-company produced sufficient documentary evidence before A.O. to prove the ingredients of Section 68 of the I.T. Act. The A.O. however, did not make any further enquiry on the documents filed by the assessee-company. The A.O. thus, failed to conduct any enquiry and scrutiny of the documents at assessment stage and merely suspected the transaction between the Investor Company and assessee-company because the Investor Company was from Kolkata. The A.O. thus, did not perform his duties at the assessment stage so as to make addition against the assessee-company. No cash was found deposited in the account of the Investor. Therefore, the totality of the facts and circumstances clearly prove that assessee-company discharged initial onus to prove identity of the Investor Company, its creditworthiness and genuineness of the transaction in the matter. The Ld. CIT(A) on proper appreciation of the evidence before him correctly deleted the addition. No interference is called for in the matter - Decided in favour of assessee
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2018 (1) TMI 388
TPA - international transaction of the assessee pertaining to the provisions of EDS does not satisfy the arm’s length principle - comparable selection criteria - Held that:- Assessee is engaged in the business of providing engineering services, generating engineering drawings and providing other IT enabled services together referred to as “engineering related service” for offshore facilities. The primary business of SHI Korea encompasses shipbuilding, offshore floaters, digital devices for ships & construction and engineering services, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2018 (1) TMI 387
Unexplained cash credit - Held that:- Just before giving the loan there is deposit of equivalent amount in the bank accounts is certainly a factor for which the revenue authorities cannot put upon blinkers. The facts of the case as noted by the authorities below clearly indicate that the creditworthiness of the lenders have not at all been established. In such circumstances, there is no infirmity in the order's of the authorities below wherein these have been added in the hands of the assessee as unexplained credits. In fact, on the facts and circumstances of the case, ratio from Hon’ble Apex Court decision in the case of Sumati Dayal vs. CIT [1995 (3) TMI 3 - SUPREME Court] and CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME Court] is applicable wherein it was held that the revenue authorities should not put upon blinkers but look into the economic realities and surrounding circumstances. The fact in the present case indicate that despite the assessee making available confirmation and other evidence, the creditworthiness of these lenders is abysmally low and hence these loans have rightly been added as unexplained credit in the hands of the assessee. - Decided against assessee.
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2018 (1) TMI 386
Claim of deduction made u/s 10B - as per AO the approval is granted by the Director, Software Technology Parks of India which is a society formed under the Software Technology Park Scheme, thus the approval for the undertaking is not granted by the Board - Held that:- There is no dispute that the assessee has been duly granted approval by STPI. We find that the said approval of the STPI was ratified by the Board vide letter dated 13.08.2007 and the same is exhibited at pages 18 to 20 of the Paper Book. Identical issue was considered by the Hon’ble jurisdictional High Court of Gujarat in the case of PCIT vs. ECI Technologies Pvt. Ltd. [2015 (5) TMI 230 - GUJARAT HIGH COURT] wherein held it is found that at the relevant time the Development Commissioner granted the approval of 100% EOU in favour of the assessee-Company, which came to be subsequently ratified by the Board of Approval and as observed hereinabove as such the ratification shall be from the date on which the Development Commissioner granted the approval, both the learned CIT(A) as well as the learned Tribunal have rightly held that the assessee was entitled to deduction under Section10B of the Act as claimed - Decided in favour of assessee.
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2018 (1) TMI 385
Nature of expenditure - expenditure incurred on non-compete fee - revenue or capital expenditure - Held that:- In this case non compete fee sounds a negative. However, so far as the seller is concerned, he is selling his business right. Business right implies right to carry on any business in the market place. This is a recognized right. We note that the amendment to section 55(2)(a) by the Finance Act, 2002 with effect from AY 2003-04 also recognized the right to carry on business as capital asset under the head capital gains. The seller in this agreement is voluntarily selling this right to the buyer. As a consequence of this agreement the seller has forfeited his right to conduct business in the territory for a period of 30 months. Therefore, the assessee in effect has acquired a right of the seller. Therefore, this particular payment as per the agreement falls within section 32(1)(ii) as a result, the assessee is entitled for depreciation on the non-compete fee paid to the seller. Hence, Ld. CIT(A) was right in directing the AO to calculate the depreciation accordingly, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT(A) on the issue in dispute and reject the grounds raised by the Revenue as well as by the Assessee in their respective Appeal and Cross Objection.
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2018 (1) TMI 384
Disallowing 10% of travelling expenses - Held that:- In this case the AO observed that a sum of ₹ 1,46,539/- was incurred by the assessee in cash on account of travelling expenses and the same was not verifiable. Hence, the AO disallowed 20% of ₹ 1,46,539/- which comes to ₹ 29,308/- and thus made an addition of ₹ 29,308/- in the hands of the assessee. In first appeal, the ld. CIT(A) has reduced the same to 10% which comes to ₹ 14,654/-. During the course of hearing, the assessee submitted the ledger account of travelling expenses incurred by the assessee vide PBP 13 to16. Taking into consideration the facts and circumstances of the case, it will be in the interest of equity and justice to reduce the travelling expenses to ₹ 4,654/-. Thus the assessee will get the partial relief of ₹ 10,000/-. Hence, the ground no. 1 of the assessee is partly allowed. Long Term Capital Gain on sale of gold after allowing the indexed cost of acquisition - Held that:- CIT(A) computed the indexed cost of acquisition at ₹ 7,58,400/- . From the records submitted by the assessee, it is observed that the assessee had purchased 300 gms. Gold in F.Y. 2006-07 and 1000 gms. Gold in F.Y. 2004-05 whereas the 800 gms is sold during the year. The ld. CIT(A) is therefore, justified in holding that 800 gms. gold sold during the year is out of the gold purchased in F.Y. 2004- 05 by following the FIFO method. In this view of the matter, the Bench concurs with the finding of the ld. CIT(A) in allowing the indexed cost of acquisition at ₹ 7,58,400/-. Thus Ground No. 2 of the assessee is dismissed.
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Customs
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2018 (1) TMI 383
Refund claim - under-valuation of goods - Inspite of the Tribunal’s decision, the department has not given any relief to the assessee - Held that: - After the Tribunal’s order, it is expected from the department to give effect of the Tribunal’s order respectfully, but the department has failed to do so. When the refund was due in August 2006, then the amendment which came into effect in May 2007, is not applicable. It is applicable only with effect from its Notification i.e. 11th May 2007 and it is not applicable retrospectively - the appellant is entitled for the refund which was due in the month of August 2006 - the proper authorities directed to make the refund at the earliest as the matter is too old - appeal allowed.
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2018 (1) TMI 382
Appellate Jurisdiction - Held that: - It may be stated that when an appeal is admitted, order or judgment of lower court is in jeopardy and judgment of Apex Court shall bring the matter to finality as has been held by Apex Court in the case of Union of India Vs. West Coast Paper Ltd. [2004 (2) TMI 344 - SUPREME COURT OF INDIA]. Therefore, as a rule of consistency, this matter may also go back to the adjudicating authority for appropriate decision on the basis of outcome of the Apex Court judgment in the case of Mangali Impex [2016 (5) TMI 225 - DELHI HIGH COURT] - appeal allowed by way of remand.
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2018 (1) TMI 381
Refund of SAD - Ld. Commissioner (Appeals) observed that in few Bills of Entry, the description of the goods was “Bitumen grade 60/70” whereas in the sales invoice, it was shown as “Bitumen VG-30” - whether the respondents are eligible to refund of 4% SAD paid at the time of import against seven Bills Entry for total quantity of 1800.032 MTs? - Held that: - there is no difference in “Bitumen grade 60/70” and “Bitumen VG-30” - both penetration grade and viscosity grade declared for the imported goods indicate same product imported by them, and that the product is internationally known by its penetration grade whereas BIS prescribes the same with viscosity grade. The condition laid down under N/N. 102/2007-Cus, dated 14.9.2007 has been complied with by the Respondent and accordingly they are eligible to refund claim of 4% of SAD paid at the time of import of Bitumen grade 60/70 and subsequently sold as such against 96 invoices and balance shown as Bitumen VG-30 against 13 invoices. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 380
Refund claim - duty paid under protest - unjust enrichment - Held that: - all the documents are produced now before me - appellant claims that they are in a position to satisfy the authorities below on the issue and both sides request to remand the matter to the adjudicating authority - appeal allowed by way of remand.
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Service Tax
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2018 (1) TMI 379
CENVAT credit - input/input services - construction of commercial, industrial and residential premises - whether the service tax paid on Works Contract Services, Project Management and Architectural Professional Services can be considered as input services for the appellant when these services are used for construction of hotel? - Held that: - the adjudicating authority was in error to rely upon the Board Circular No. 98/1/2008-ST dated 04.01.2008 in as much, the definition of input services during the relevant period does not bar availment of CENVAT credit all input services. Input services includes the services used in relation to settingup, modernization, renovation of premises of provider of output services - In the case in hand, the definition is reproduced as above categorically will apply and the clarification given by the Board in CBEC Circular dated 04.01.2008 is going beyond the definition. It is not disputed that jetty was constructed and input credit was claimed on cement and steel. The aforesaid definition of Rule 2(k) was applicable and Explanation 2 did not provide that cement and steel would not be eligible for input credit. According to learned Counsel for the appellant, the appellant is not manufacturer and, therefore, the provisions of Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. The appellant is neither having any factory nor he is manufacturer. The appellant is a service provider of port. As all the inputs/inputs service has been used by the appellant for construction of a building which has been let out by the appellant and paying service tax thereon under the category of Renting of Immovable Service therefore, the appellant is entitled to avail cenvat credit - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 378
Business Auxiliary Services - non-competing agreement - extended period of limitation - whether the activity undertaken by the appellant is taxable prior to 01.07.2012 or not? - Held that: - prior to 01.07.2012, non-compete agreements were not specifically taxable under Finance Act, 1994. It is only with effect from 01.07.2012 when Section 66E(e) of the Finance Act agreeing to the obligation to refrain from an act, or to tolerate an act or a situation or to do an act constituted a declared service on which service tax was payable with effect from 01.07.2012 - the period prior 01.07.2012, the amount recovered by the appellant by way of non-compete agreements are not liable to tax under the Finance Act, 1994. Whether the activity undertaken by the appellant falls under the category of Business Auxiliary Service or not? - Held that: - the sale promotion means that in case of sale promotion a large population of consumer is targeted - Admittedly, the appellants are not involved in such activity but they were paid for not to target the consumers. Therefore, the activity undertaken by the appellant do not qualify under Business Auxiliary Service. Whether the extended period of extension is invokable or not? - Held that: - As there were divergent view on classification of services in question, therefore, extended period of limitation is not invokable in the facts and circumstances of the case - demand barred by limitation. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 377
Penalty u/s 78 - services of foreign commission agents - reverse charge mechanism - Held that: - Tribunal in the case of Modern Woolens vs. Commissioner of Central Excise, Jaipur-II [2016 (11) TMI 1353 - CESTAT NEW DELHI], in similar circumstances, set aside the penalty imposed upon the assessee, and held that whatever Service tax was required to be paid by the appellant, was available to them as cenvat credit. As such, the entire situation is revenue neutral, in which case, no malafide can be attributable to the appellant. There is no evidence of mala fide on the part of the assessee - penalty set aside - appeal allowed.
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2018 (1) TMI 376
Club or association Service - supply of tangible goods - Held that: - the issue is no more res-integra as there are no services provider-service recipient relationship between the club and the members as held in various juridical pronouncements - there could be no liability of Service Tax on the appellant under the category of Club or Association Service. Repair and Maintenance Service - repair of aircraft engine - Held that: - the appellants received taxable service of repair and maintenance. The said service has been carried out and provided by M/s Honeywell partly in India and partly in France. M/s Honeywell used another sub-contractor on their own to render the part of repair service in India will bring the tax liability to the appellant in view of the proviso to Rule 3 (ii) of Taxation of Services Rules, 2006 - repair and maintenance service is liable to tax. Time limitation - penalties - Held that: - the ingredients for invoking extended period could not be sustained in the present demand. There could be no malafide or misrepresentation attributable in such circumstances of the case - demand should be restricted to the normal period - the penalties imposed on the appellants are also not sustainable. Appeal allowed in part.
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2018 (1) TMI 375
CENVAT credit - sale and servicing of vehicles - denial on the ground that the entire services on which credits have been availed by the appellant get exhausted for sale of vehicles only, which is outside the purview of output service - Held that: - the appellants have given detailed chart of various services, period-wise, under 3 categories as mentioned earlier in this order. It is necessary to verify each one of the tax paid documents to identify the nature of service, whether can be attributed exclusively to taxable output services or listed under Rule 5 of the CCR or common to both trading and taxable service activity - matter on remand. GTA services - Held that: - appellant are not apparently covered by any one of the 7 categories mentioned under N/N. 35/2004-ST. Further, the appellants were consignees of goods (vehicles). M/s. Maruti being a consignor have undertaken the transport using GTA and paid freight on such transport. The appellant’s assertions on these facts are relevant to decide their liability under GTA service - demand set aside. Appeal allowed in part and part matter on remand.
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2018 (1) TMI 374
Liablity of tax - construction activities - works contract service - Held that: - Admittedly, in the present case the construction activity of the appellant is with reference to student’s hostel and the public hospital. These are non-commercial buildings. Accordingly, these are excluded from tax liability under works contract service - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 373
Recovery of liability - security service provider - Rule 6(2) of the STR, 1994 - Held that: - Revenue and appellant shall draw a proper schedule in the presence of Chief Commissioner of Service Tax, who shall be a monitoring authority for execution of this order. He shall nominate representative for Revenue to undertake reconciliation of facts and figures with the representative of appellant with due verification of payment particulars - Year wise liability following rule 6(2) of Service Tax Rules, 1994 shall be ascertained - matter on remand.
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2018 (1) TMI 343
CENVAT credit - input service - restoration of appeal - Held that: - the Hon’ble High Court of Bombay has, in Coca-Cola India Pvt Ltd v. Commissioner of Central Excise, Pune-III [2009 (8) TMI 50 - BOMBAY HIGH COURT], accorded wide latitude to the expression “input service” and approves the allowing of CENVAT credit if any of the five enumerated limbs are satisfied - no case has been made out for Revenue that none of the specified limbs are applicable in the disputed services - appeal dismissed - decided against Revenue.
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Central Excise
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2018 (1) TMI 372
Principles of Natural Justice - non-speaking order - Whether in the facts and circumstances of the case, the Tribunal was right in remanding the case back to the adjudicating Authority to decide the case afresh without having dealt with the appellant's contention that the issue was covered in the appellant's own case by the earlier order of the Tribunal dated 24th August, 2015? Held that: - impugned order merely records the appellant's contention that the issue is covered by the earlier order of the Tribunal but thereafter, it is not dealt with the earlier order dated 24th August, 2015 to show in what manner the same would not apply to the two appeals, which were before the Tribunal leading to the impugned order dated 28th October, 2015 - this Court in Commissioner of Central Excise, PuneI Vs. Syntel International Pvt. Ltd., [2015 (7) TMI 887 - BOMBAY HIGH COURT] has taken a view that though the appellate Authority has power of remand, the same should not be exercised routinely and as a matter of course. Appeal disposed off.
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2018 (1) TMI 371
Clandestine removal - it was alleged that the assessee-appellant had procured 2424.875 Mt of Soya Crude Oil, but had not accounted for the same in the statutory records - demand on 15.08 MT of Crude Soya Oil alleged to have been procured from M/s Sonic Bio-chem through M/s. Sheetal Enterprises - denial of cross-examination - Held that: - no corroborative evidence except statement has been brought on record. The Appellant also requested for cross examination of Shri Vineet Agarwal, who in spite of several notices to appear for cross examination, did not appear. Thus, in absence of his cross examination, the statement furnished by him cannot be relied upon. There is no evidence of consideration received by said brokerage firm towards sale of goods to the Appellant No.1 unit. Demand on the basis of 15.080 MT of Crude oil allegedly procured by Appellant No.1 from M/s. Sonic Biochem through M/s. Sheetal Enterprise - Held that: - there is no evidence of Appellant No. 1 having received such goods. There is no evidence of transportation of goods to Appellant’s Unit or its consumption in Refined Oil nor any instance of production of Refined Soya Oil and removal of same without payment of duty or any buyer - no demand can be made in absence of any of such evidence. The demands made against the Appellant No.1 and penalties imposed upon Appellant No. 1 and 2 are not sustainable and are required to be set aside - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 370
Clandestine removal - Sponge iron - credibility of the documentary evidence on which demand was raised - Held that: - the Department could not adduce any evidence to establish the clandestine removal of goods without payment of duty. There is no dispute that the assessee admitted the clearance of the goods - the imposition of penalty under Section 11AC of the Central Excise Act on the appellant company is justified. Penalty on Director - Held that: - the Director of the assessee company had admitted the clearance of the goods and paid the duty. There is no material available on record that the Director of the assessee company was involved in such clandestine removal of the goods - penalty set aside. Appeal allowed in part.
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2018 (1) TMI 369
CENVAT credit - inputs - capital goods - Held that: - the appellant had produced the Chartered Engineer Certificate to substantiate the use of the inputs and capital goods - the Commissioner (Appeals) had disallowed the credit of ₹ 16,46,940.00 in respect of items used on engineering goods, civil construction etc. It is a case of eligibility of the Cenvat Credit under the provision of the Cenvat Credit Rules and therefore the Commissioner (Appeals) rightly set aside the penalties. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 368
Demand of duty along with interest - It has been alleged that the appellant had cleared the goods of different varieties as recorded in DSA under the head For Other Purposes without payment of duty and without issuing Invoices - Held that: - the appellant have not produced any evidence in support of their contention. The Commissioner (Appeals) observed that the appellant did not maintain or produce any Test Report towards goods being unfit for consumption before destruction. In any event, the appellant had not produced any evidence in their support of their contention and they have not followed the procedure of law - demand of duty along with interest is justified - appeal dismissed - decided against appellant.
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2018 (1) TMI 367
Seizure of of Raw / Dust Coal - seizure on the ground of nonpayment of Clean Energy Cess on the entire quantity of seized coal - Held that: - there is no dispute that Central Excise duty along with Education Cess and Clean Energy Cess is leviable on the seized Raw/Dust Coal. It is found that the appellant is receiving the said coal from the supplier from time to time. It is noted that the goods were supplied to the appellant without any Invoice on several occasions. Hence, the innocence pleaded by the Learned Counsel cannot be accepted - redemption fine justified - appeal dismissed - decided against appellant.
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2018 (1) TMI 366
Refund claim - reversal of CENVAT credit under protest - Held that: - As respondent had reversed the Cenvat credit under protest and the same could not utilised by them due to the reason that proceedings were going on against them and before the concluding of the proceedings, their factory was closed. In that circumstances, whatever duty has been paid by the respondent by reversal of Cenvat credit is required to be refunded to the respondent in cash as the same was not recoverable from the respondent at all - Appeal dismissed - decided against Revenue.
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2018 (1) TMI 365
Clandestine removal - corroborative evidences - third party evidence - Held that: - an investigation was conducted at the end of one of supplier M/s Ambika Ispat, Raipur and some documents were recovered from the possession of the peon who was located outside the factory premises. On the basis of that diary, statement of the Director of M/s Ambika Ispat were recorded who stated that sometimes, they are clearing goods clandestinely but no investigation was conducted at the end of appellants to ascertain the fact i.e. whether the appellants have received those goods or not? The whole case has been made out against the appellants on the basis of third party evidence which cannot be relied upon. As no investigation was conducted at the end of the appellants to ascertain the facts whether the appellants are indulging and no other corroborative evidence has been brought on record to allege clandestine removal of goods. The proceedings against the appellants are not sustainable. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 364
CENVAT credit - reverse charge mechanism - delivering the transformers at their premises - Held that: - in view of the provisions of Rule 2(i)(d) of Service Tax Rules, 1994, it is the obligation of the service receiver namely the Power Corporation which is liable to service tax - the appellant was not liable to pay service tax under the scheme of the Act and the Rules and particularly as clarified vide N/N. 25/2012-ST - the service tax of ₹ 13,11,933/- paid by them is an excess payment, service tax liable to be refunded to the appellant, thus, the action of appellant action of taking credit of the service tax so paid does not call for any adverse action on them - appeal allowed.
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2018 (1) TMI 363
Valuation - compounded levy scheme - adjustment of excess paid duty - Held that: - the directions in the said final order dated 11.02.2015 were for adjustment of excess paid duty under compound levy scheme during the period from July, 1999 to November, 1999 for recovery of duty for the period from January, 1999 to June, 1999. When the said appeal filed in 2005 was pending disposal, on 24.05.2011, ₹ 20 lakhs refund was granted to the appellant which was the compounded levy duty paid during the period from July, 1999 to November, 1999. This Tribunal had directed that for the period from July, 1999 to November, 1999 duty should be paid on the basis of actual clearances made by the appellant - in view of the refund of ₹ 20 lakhs there is no amount pending with exchequer paid under compounded levy scheme during the period from July, 1999 to November, 1999. Therefore, there is no infirmity in the said direction to deposit ₹ 2,95,142/-. Revenue is directed to adjust the said amount of ₹ 3,50,000/- towards partial recovery of duties confirmed and directed through impugned Order-in-Original - appeal allowed in part.
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2018 (1) TMI 362
Cenvat Credit - whether the respondent is entitled to service tax paid on the services utilized for removal of hazardous waste? - Held that: - Tribunal in the case of Tube Investment of India Ltd. v. Commissioner of Service Tax, LTU, Chennai [2017 (10) TMI 737 - CESTAT CHENNAI], wherein the said services were held to be Cenvatable - appeal dismissed - decided against Revenue.
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2018 (1) TMI 361
CENVAT credit - brokerage given to the agents for arranging residential accommodation for their employees - Held that: - issue stand covered by the precedent decision of the Tribunal in the case of Gateway Terminals (I) Pvt. Ltd. v. CCE [2015 (10) TMI 1300 - CESTAT MUMBAI] wherein it was held that brokerage service being incurred for finding residential accommodation for the assessee’s employees is essential for ensuring availability of staff to carry on its business and as such has to be held as Cenvatable input service - credit allowed. CENVAT credit - Group Medical Insurance Service - Held that: - the credit has been disallowed in toto without examining as to whether any extra premium stand paid by the appellant for covering the family members of the employees, this fact is to be examined by the lower authority for which purpose the matter stand remanded - matter on remand. Appeal allowed in part and part matter on remand.
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2018 (1) TMI 360
Entitlement of interest - relevant date - Held that: - The interest liability of Revenue would start from the expiry of three months period from the date of filing of refund claim and would get over only with the actual claim having been given to the assessee - as the said refund claim was adjusted against the confirmed demand which was already stayed by the Tribunal, admittedly the said action of the adjudicating authority was with an intention to delay the handing over the refund to the assessee. The Assistant Commissioner to pass afresh order - appeal allowed by way of remand.
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2018 (1) TMI 359
Valuation - Glass Tubes - captive consumption - N/N. 6/2002-CE dated 01.03.2002 - Held that: - there is enough evidence on record to establish that prior to the date of purchase of the compressor, the Mouth Blowing process was being used by the assessee for conversion of glass into Glass Tubes - the crux of the issue relates to the date of purchase of compressor. Admittedly, the appellant has produced a bill dated 31.03.2007 issued by Rathi Industries, showing the sale purchase of the compressor. The adjudicating authority has simpliciter dismissed the same on the ground that the same was purchased on the last date of the financial year and as such, was manipulated. However, we find that the above observations of the adjudicating authority are in the realm of assumptions and presumptions and not based upon any evidence so as to hold contrary to the appellants claim. Revenue has not bothered to investigate at the end of the seller of the compressor so as to find out the fact as to whether the compressor was actually sold on the said date or not. As regards the manufacture of the Glass Tubes with effect from 01.04.2007 with the help of the compressor learned Advocate agrees that the same would be dutiable inasmuch as the same were being used captively for the manufacture of the exempted final products - For verification of the appellants said claim, which is dependent upon the computation of the clearances in a financial year, we remand the matter to the adjudicating authority to examine these facts. Penalty set aside - part matter on remand - appeal disposed off.
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2018 (1) TMI 358
CENVAT credit - MS Angle, channel, bars etc used for maintenance of capital goods and for the structural which support the capital goods - Held that: - the appellants are not challenging the cenvat credit in respect of material used for erection and repair of structural - Insofar as the material used for the maintenance and repair and fabrication of parts accessories of the capital goods is concerned, the same cannot be denied as it squarely falls within the definition of Rule 2(K) of CCR 2004 - the demand of duty in respect of structural is upheld. Penalty - Rule 15(2) of Cenvat Credit Rules 2004 read with Section 11AC of the Act - Held that: - It is seen that the structural have been specifically kept within the definition of capital goods in the Cenvat Credit Rules. Thus in so far as cenvat credit taken in respect of structural is concerned there was no question of doubt - Penalty is consequently revised to the same level. Appeal allowed in part.
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2018 (1) TMI 357
CENVAT credit - remission of duty granted on inputs/raw materials contained in the finished goods/semi finished goods destroyed by fire - Held that: - reliance placed in the case of GRASIM INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, INDORE [2006 (8) TMI 69 - CESTAT,NEW DELHI], where on similar issue, Adjudicating authority decided that no requirement of reversal of credit - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 356
Interest on wrongly availed CENVAT credit - primary defence of the appellants is that they have not utilised the said credit and it was merely a book entry - Held that: - the entire credit available at the end of the month of May 2011 was utilised by the appellants in the month of June itself. In these circumstances, it cannot be said that the credit taken was not utilised and was merely a book entry. In these circumstances, the provisions of Rule 2014 are clearly attracted and appellant is liable to pay interest and penalty. Extended period of limitation - Held that: - The appellant had not noticed this for almost one and half years during which they would have got their annual report made and accounts audited for preparing balance sheet. It cannot be but a result of deliberate act - the invocation of extended period is justified. Appeal dismissed.
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2018 (1) TMI 355
Valuation - includibility - certain bought out items sent to the site for the purpose of erection and installation - Held that: - the issue has been decided in the case of SIRPUR PAPER MILLS LTD. Versus COLLECTOR OF CENTRAL EXCISE, HYDERABAD [1997 (12) TMI 109 - SUPREME COURT OF INDIA], where it was held that the value of bought out items cannot be added to the assessable value of Acetylene generator as such items are supplied at the site where the plant (Acetylene Plant) is erected - appeal allowed.
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2018 (1) TMI 354
CENVAT credit - duty paying invoices - it was alleged that invoices was in respect of HR Trimming issued by Jindal Iron & Steel Co. Ltd., whereas the goods covered under the said invoices transported and delivered to Viramgam, Gujarat based parties - Held that: - though the invoice in respect of HR Trimming was issue by Jindal Iron & Steel Co. Ltd. on which the appellant availed the cenvat credit but in none of the statements of transporter or boker, the name of the present appellant was indicated regarding the diversion of the goods to the Gujarat based parties - The statement of Shri Vshal Bhushan director of the appellant company is exculpatory, he has not admitted the non receipt of the goods, rather he stated that the appellant company purchased the HR Trimming from JISCO. Unless the evidence against the appellant is brought on record, the case of alleged wrong availment of cenvat credit cannot be established. Appellants are legally entitled for cenvat credit on the invoice issued by JISCO - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 353
Clandestine removal - steel ingots - excess consumption of electricity - Held that: - the adjudicating authority has not given the relied upon documents despite the specific request by the appellant vide their letter dated 16.09.2011. it is also observed that no effective hearing in the matter before the adjudicating authority was conducted. Therefore there is violation of principles of natural justice in passing original order. Matter needs to be reconsidered by the adjudicating authority - appeal allowed by way of remand.
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2018 (1) TMI 352
Extended period of limitation - suppression of facts - N/N. 6/2006-CE dated 01.03.2006 - Exempt goods - Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - Requirement of certificate from Delhi Metro regarding procurement of goods - Held that: - the pre-condition of exemption N/N. 6/2006-CE is that the assessee was required to produce a certificate from the competent authority as mentioned therein of the Delhi Metro to the effect that the goods are procured by or on behalf of the Delhi Metro for use in the Delhi Metro Project - There is no dispute that the appellant submitted the certificate for the purpose of availing the exemption notification. It is settled position of the law that mere omission to disclose would not amount to suppression of facts, unless there was deliberate attempt to evade payment of duty - there is no material on record that there is a suppression of fact, with intent to evade the adjudged amount as demanded. It is revealed from the record that the Department was aware regarding the availament of the benefit of exemption notification. The demand of the amount with interest for the normal period of limitation is upheld - penalty set aside - appeal allowed in part.
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2018 (1) TMI 351
Whether the appellant is liable for penalty under section 11AC for the offence of wrong availment of credit due to the reason that either credit was taken on value or on wrong amount in respect of 42 invoices? Held that: - The nature of the wrong credit is either it was taken in respect of value instead of duty or wrong figures of duty was shown as credit in their Cenvat account. Such mistake can occur only in respect of one or two invoices - in the instant case, mistake has occurred in 42 invoices, this clearly shows gross negligence of the appellant therefore it cannot be said that there is no malafide intention on the part of the appellant merely by making payment alongwith interest before issuance of SCN appellant cannot be absolved from penalty. The department was not in a position to know about wrong availment of credit therefore repeated mistake in taking wrong credit is amount to malafide intention to avail wrong credit - penalty upheld - appeal dismissed.
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2018 (1) TMI 350
CENVAT credit - input PVC Resin - credit availed without receipt of goods - case of appellant is that the SCN was issued on the basis of investigation of the input manufacturer M/s. KPIPL and statement of transporters - Held that: - It appears that the Central Excise officers recorded the statements of two employees and Director of the appellant company, who stated that they received the goods in their factory. At this stage, the investigating officer should have examined the records and documents including Cenvat accounts and not merely relied on the statement of the third party - denial of cenvat credit and imposition of penalty are not justified - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 349
Liability of interest - period between provisional assessment and finalization of assessment - Held that: - it is evident that it was not possible to read in the Central Excise Rules, 2002 the liability to pay interest for the period between provisional assessment and payment of differential duty till final assessment. Since the payment was made voluntarily before the final assessment which did not result in any dues and payable to the Government, so interest is not payable - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 348
CENVAT credit - duty paying invoices - service tax availed on the strength of photostat copies - credit of service tax paid on invoices having addresses at various offices - service tax paid on outward transportation service - Held that: - the learned Commissioner (Appeals) has held that in view of the fact that ER-1 and ST-3 returns were filed by the respondent regularly there was no case of any suppression and, therefore, the finding of Commissioner (Appeals) in respect of setting aside penalty imposed on the respondent under Rule 15 of Cenvat Credit Rules read with Section 11 AC of Central Excise Act, 1944 - appeal dismissed - decided against Revenue.
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2018 (1) TMI 347
CENVAT credit - inputs - inputs at clinker Unit, when used in the captive power plant situated 14 kms away from the clinker Unit - Held that: - the issue decided in the case of Sanghi Industries Ltd. Vs. Commissioner of Central Excise, Rajkot [2014 (2) TMI 278 - CESTAT AHMEDABAD], where it was held that credit availed on inputs, used in the generation of electricity which are distributed to the Grinding Unit and Jetty, has been held to be admissible - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 346
Interest on account of late remittance of central excise duty - 3rd proviso to Rule 9 of Pan Masala (Capacity Determination & Collection of Duty) Rules, 2008 - whether the Central Excise duty is to be paid on 5th of a particular month if the packing machines are reinstalled during that month after the 5th of that month or before 5th of the next month? - Held that: - The issue is no more res-integra, in view of above stated decision of this Tribunal in the case of Trimurti Fragrance Pvt. Ltd. [2016 (2) TMI 718 - CESTAT NEW DELHI], where it was held that whenever the machines were re-installed in the factory the Central Excise duty was paid on 5th of next month and therefore, there was no interest payable by them and the duty was paid properly - interest upheld - duty demand set aside - appeal allowed in part.
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2018 (1) TMI 345
Whether the appellant is required to discharge differential duty on the products “Pan Masala” which were not produced during the period 1st to 10th June 2013 on the new machine which was installed? Held that: - the demand of the duty on the products “Pan Masala” can be done so only from the date of production only, if any new machinery installation is done, which in the case is from 10th June, 2013. Since there is no dispute as to the fact that the third packing machine was installed on 10th June, 2013, any demands of the duty liability on an assumed production from the period 1st to 10th June 2013 does not arise. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 344
CENVAT credit - input services - whether the service tax paid on various input services listed out at Para two of the show cause notice dated 18.09.2014 are admissible to credit? - input services in relation to dismantling, replacement, repair or installation of existing pipes and tubes, chemical vessels, relating to chemical equipments, tanks etc. - Held that: - Except the amount of credit availed against these services rendered in their township, the credit availed on the service tax paid on all other services are admissible. Since, major portion of the demand are decided in favor of the appellant, therefore, there is no justification for imposition of penalty for the credit availed in relation to Maintenance of Gardening and Construction of Work in the township which has been accepted by the appellant to be payable, and interest is also required to be paid on the said inadmissible credit. To ascertain the amount of credit involved on the Gardening Services and Civil Construction Services rendered in the township, and the correct amount of credit involved in the input invoice claimed to be ₹ 79,192/- and not ₹ 8,48,048/-, the matter is remanded to the adjudicating authority. Appeal allowed by way of remand.
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2018 (1) TMI 342
CENVAT credit - insurance premium for capital goods - Held that: - the denial of CENVAT credit of tax paid on insurance premium for capital goods belonging to the appellant used for manufacture of their vehicles at another location does not appear to be sustainable in law - appeal allowed.
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2018 (1) TMI 341
Classification of Waste Crude Oil - classified under Tariff Item No. 2709 00 00 or under Tariff Item No. 3814 00 10? - Held that: - this Tribunal in the case of M/s Bajrang Petro Chemicals Pvt. Ltd. Versus Commissioner of Central Excise, Kanpur [2018 (1) TMI 248 - CESTAT ALLAHABAD] has decided classification in respect of Waste Crude Oil which was also called as ‘Residual Crude Petroleum Oil’ under Tariff Item No. 2709 00 00 - appeal dismissed - decided against Revenue.
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CST, VAT & Sales Tax
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2018 (1) TMI 340
Sale and purchase or manufacture of articles - taxability under UP. Trade Tax Act, 1948 - Held that: - there is no provision under the 1948 Act which raises a presumption rebuttable or conclusive against the assessee merely on the basis of a trader or dealer being found in possession of articles which may be eligible to be traded in. A presumption, conclusive or rebuttable must necessarily flow from a specifically embodied statutory provision. A careful reading of sub section (1) thereof establishes that if any facts are specially within the knowledge of the assessee, then in the course of assessment proceedings, the burden of proving those facts lies upon him. Similarly sub section (2) (b) which was also pressed into aid deals with the burden of proof in respect of existence of facts and circumstances on the basis of which the assessee claims exemption. Both under sub section (1) as well as sub section (2) (b), the burden stands placed or shifted upon the assessee in respect of special facts or circumstances upon which he claims exemption. These two provisions would clearly have no application in a case where the assessee was asserting that he was only processing the articles in question and not entering into any transaction of sale or purchase. There was not a shred of evidence, cogent or reliable to establish and prove that the revisionist was engaged in the sale or purchase of commodities - levy and imposition of tax cannot be sustained. Revision allowed.
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2018 (1) TMI 339
Taxability - transferring a right to use certain machinery items - Section 3-F of the U.P. Trade Tax 1948 - Held that: - for the purposes of a levy of tax under Section 3-F, the presence of machinery within the State is not determinative. The taxable event which stands encompassed under section 3-F must and can only be a transfer of a right to use. The situs of such a transaction can only be the place where this right is transferred and conferred - Admittedly here the transfer of a right to use was effected outside the State of U.P. consequent to the execution of the lease agreement. The essential element of the levy, therefore, occurred outside the jurisdiction of this State. There was no element of a "transfer of a right to use" which occurred within this State. The State of U.P. clearly, therefore, stood denuded of the right or authority to tax this transaction. In view thereof, the position taken by the respondent that the presence of the machinery or its consignment into the State would justify the imposition of tax is rendered unsustainable. The levy of tax on the basis of a "transfer of a right to use" cannot be sustained. Revision allowed.
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