TMI Tax Updates - e-Newsletter
January 12, 2018

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

News

• GST FAQ: TRANSPORT & LOGISTICS

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• GST regime to boost polymer downstream industry in Bengal

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• CCI issues order against Nair Coal Services Pvt. Ltd., Karam Chand Thapar & Bros (CS) Ltd. and Naresh Kumar & Co. Pvt. Ltd. for rigging bids and dividing market by forming hard core cartel in respect of tenders floated by MAHAGENCO for procuring coal liasoning services

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• The Union Minister of State for Ministry of Law, Justice and Corporate Affairs Shri P.P. Chaudhary: Independent Directors are watch persons of Corporate entities; Capacity development of Independent Directors is very essential since they play a crucial advisory role to ensure integrity and professional conduct in companies; Central Government is seriously considering to establish Database of Independent Directors

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• RBI Reference Rate for US $

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• Income Tax Department steps-up actions under Prohibition of Benami Property Transactions Act : Benami properties of more than ₹ 3,500 crore in more than 900 cases attached

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• PM attends NITI Aayog’s interaction with economists and experts on “Economic Policy – The Road Ahead”

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Notifications

Customs

• 04/2018 - dated 10-1-2018 - Cus (NT)
  Amendment to notification no. 92/2017-Customs (NT) dated 28th Sept, 2017

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• 03/2018 - dated 10-1-2018 - Cus (NT)
  Amendment to notification no. 82/2017-Customs (NT) dated 24th August, 2017

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GST - States

• CCT/26-2/2017-18/27 - dated 15-11-2017 - Goa SGST
  Amendments in the Notification No. CCT/26-2/2017-18/19 dated the 31st October, 2017.

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• CCT/26-2/2017-18/26 - dated 15-11-2017 - Goa SGST
  Extends the time limit for furnishing the return by an Input Service Distributor in FORM GSTR-6.

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• CCT/26-2/2017-18/25 - dated 15-11-2017 - Goa SGST
  Extends the time limit for furnishing the return in FORM GSTR-5A for the month of July, 2017, August, 2017, September, 2017 and October, 2017.

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• CCT/26-2/2017-18/24 - dated 15-11-2017 - Goa SGST
  Extends the time limit for furnishing the return by a non-resident taxable person, in FORM GSTR-5.

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• CCT/26-2/2017-18/23 - dated 15-11-2017 - Goa SGST
  Amendments in the Notification No. CCT/26-2/2017-18/14 dated the 13th October, 2017.

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• 38/1/2017-Fin(R&C)(47/2017-Rate) - dated 14-11-2017 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(12/2017-Rate) dated the 30th June, 2017,

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• 38/1/2017-Fin(R&C)(46/2017-Rate) - dated 14-11-2017 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017 Fin(R&C) (11/2017-Rate) dated the 30th June, 2017

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• 38/1/2017-Fin(R&C)(45/2017-Rate) - dated 14-11-2017 - Goa SGST
  Recommendations of the Council, hereby exempts the goods amount calculated at the rate of 2.5 per cent.,

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• 38/1/2017-Fin(R&C)(44/2017-Rate) - dated 14-11-2017 - Goa SGST
  Amendments in the Government notification No. 38/1/2017-Fin(R&C)(5/2017-Rate) dated the 30th June, 2017,

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• 38/1/2017-Fin(R&C)(43/2017-Rate) - dated 14-11-2017 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(4/2017-Rate), dated the 30th June, 2017,

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• 38/1/2017-Fin(R&C)(42/2017-Rate) - dated 14-11-2017 - Goa SGST
  Amendments in the Government Notification No. 38/1/2017-Fin(R&C)(2/2017-Rate) dated the 30th June, 2017

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• 38/1/2017-Fin(R&C)(41/2017-Rate) - dated 14-11-2017 - Goa SGST
  Amendments in the Government notification No. 38/1/2017-Fin(R&C)(1/2017-Rate) dated the 30th June, 2017.

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• 38/1/2017-Fin(R&C)(28)/3681 - dated 8-11-2017 - Goa SGST
  The Goa Goods and Services Tax (Eleventh Amendment) Rules, 2017.

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• 38/1/2017-Fin(R&C)(27)/3678 - dated 8-11-2017 - Goa SGST
  Waiver the late fee payable all registered persons who failed to furnish the return in FORM GSTR-3B.

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• 38/1/2017-Fin(R&C)(24)(Corri)/3679 - dated 8-11-2017 - Goa SGST
  Corrigendum - Government Notification No. 38/1/2017-Fin(R&C)(24)/3598 dated 24-10-2017,

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• 38/1/2017-Fin(R&C)(40/2017-Rate)/3942 - dated 2-11-2017 - Goa SGST
  Exempts the intra-State supply of taxable goods amount calculated at the rate of 0.05 per cent.

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• 38/1/2017-Fin(R&C)(39/2017-Rate)/3641 - dated 2-11-2017 - Goa SGST
  Recommendations of the Council, hereby notifies the state tax rate of 2.5 per cent on intra-State supplies of goods

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• 38/1/2017-Fin(R&C)(26)/3640 - dated 2-11-2017 - Goa SGST
  Supply of goods by a registered person against Advance Authorisation.

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• 38/1/2017-Fin(R&C)(25)/3639 - dated 2-11-2017 - Goa SGST
  The Goa Goods and Services Tax (Tenth Amendment) Rules, 2017.

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• 51/2017-State Tax - dated 1-11-2017 - Gujarat SGST
  The Gujarat Goods and Services Tax (Eleventh Amendment) Rules, 2017.

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Circulars / Instructions / Orders

Customs

• 01/2018 - dated 11-1-2018
  Guidelines for the sale of seized/ confiscated gold - reg.

Highlights / Catch Notes

Income Tax

• Addition on account of disallowance of claim of VAT reimbursement - VAT subsidy received by the assessee from the Government of Bihar is a capital receipt and accordingly not chargeable to tax - HC
  Visit to Get Source

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Customs

• Guidelines for the sale of seized/ confiscated gold - reg. - Circular
  Visit to Get Source

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Indian Laws

• Income Tax Department steps-up actions under Prohibition of Benami Property Transactions Act : Benami properties of more than ₹ 3,500 crore in more than 900 cases attached
  Visit to Get Source

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Service Tax

• Classification of services - when the petitioners satisfy the ingredients of the “goods transport agency” as defined under the Finance Act, there is no question of placing the petitioners under the amorphous category of “cargo handling service” which is no longer defined under that Act - HC
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• CENVAT credit - Valuation - Classification of services - business of manufacture, supply and erection at site of pre-fabricated/pre-engineered steel buildings and parts thereof at its three manufacturing units - entire demand set aside - AT
  Visit to Get Source

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Case Laws:

• Income Tax

• 2018 (1) TMI 519
  Transfer of cases - Notice under Section 158BC by assessee with Nagpur I.T.O. sufficient to apply bar under Section 124(3) in the matter - Held that:- The special leave petition is dismissed. HC order confirmed [2017 (7) TMI 695 - BOMBAY HIGH COURT] HC has held that all the proceedings taken between 6.7.1999 till the Order dated 18.1.2000 by the Deputy Commissioner of Income Tax, Nagpur become regular and he will retrospectively enjoy the status of the Assessing Officer even on 22.9.1999, when he issued the notice u/s.158 BC of the Act. Transfer of proceedings u/s.127 of the Act cannot be retrospective so as to confer jurisdiction on a person who does not have it. It is not a provision which validates without jurisdiction notice issued by an Income Tax Officer. If the submission of the Revenue on the above account is to be accepted, then an order which is without jurisdiction could be bestowed with jurisdiction by passing an order of transfer with retrospective effect. Section 127 of the Act does not validate notices/orders issued without jurisdiction, even if they are transferred to a new Officer by an Order under Section 127 of the Act. - Decided against revenue

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• 2018 (1) TMI 518
  Revision u/s 263 - disallowability of expenditure on account of sales tax - Compound Levy Scheme applicability - Held that:- The special leave petition is dismissed. HC order confirmed. [2017 (8) TMI 372 - PUNJAB AND HARYANA HIGH COURT] As held by HC once the assessee had shown that the sales appearing in the balance-sheet were inclusive of sales tax, there was no occasion to disallow the claim made by the assessee relating to payment of sales tax, on the basis of Compound Levy Scheme. The Revenue was unable to produce any material on record to substantiate that the assessee had excluded the amount of sales tax from the sales. Once that was so, it could not be said that the order sought to be revised was either erroneous or prejudicial to the interests of the Revenue. Thus, both the limbs of section 263 of the Act were not satisfied. - Decided in favour of assessee

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• 2018 (1) TMI 517
  Issue not been taken into consideration by the High Court - whether the oral arguments were advanced on substantial question No.3 raised in the Memo of Appeal filed before the High Court under Section 260A? - affidavit has been filed on behalf of the appellant in which it has been stated that the issue of powers of Commissioner (Appeals) had come in appeal under Rule 46A and were specifically raised before the High Court - Held that:- In view of the matter, in our considered opinion, if indeed such issue was raised specifically before the High Court and it has not been taken into consideration by the High Court by passing the impugned order [2006 (1) TMI 58 - DELHI High Court], the appropriate remedy for the appellant would be to file an application for review of the said order. Accordingly, we permit the appellant to file a review application before the High Court within two weeks from today. If such an application is filed, the same shall be considered in accordance with law without raising the question of limitation.

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• 2018 (1) TMI 516
  Appellant shall examine as to whether the oral arguments were advanced on substantial question No.3 raised in the Memo of Appeal filed before the High Court under Section 260A of the Income Tax Act - List on 29.08.2017.

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• 2018 (1) TMI 515
  Addition on account of disallowance of claim of VAT reimbursement - character of the subsidy in the hands of the assessee - nature of income - Revenue or capital receipt - Held that:- Any subsidy given by the Central Government or a State Government or any authority etc. for any purpose, except where it is taken into account for determination of the actual cost of the asset under Explanation 10 section 43(1), has become chargeable to tax. Even if a subsidy is given to attract industrial investment or expansion, which is a otherwise a capital receipt under the pre-amended era, shall henceforth be treated as income chargeable to tax, except where it has been taken into account for determining the actual cost of assets in terms of Explanation 10 to section 43(1). This amendment is with effect from 1-4-2016 and is prospective in its application. In the instant case, as the assessment year under consideration is 2009-10, Section 2(24)(xviii) shall have no operation. In light of above discussions and in the entirety of the facts and circumstances of the case, VAT subsidy received by the assessee from the Government of Bihar is a capital receipt and accordingly not chargeable to tax - Decided in favour of assessee.

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• 2018 (1) TMI 514
  Waiver of interest charged under Sections 234A, 234B and 234C - Held that:- The discretion conferred upon the respondent is clearly circumscribed and set out in paragraphs 2(a) to 2(d) of the Circular dated 26.06.2006. The right to claim waiver of the interest is not a statutory right given to the Assessee but based on the Circular and therefore, strict interpretation of the Circular has to be done. Facts of the case clearly reveals that the petitioner does not fall under any of the Clauses 2(a) and 2(d) of the Circular, dated 26.06.2006. Therefore, the respondent was fully justified in not exercising his discretion and waiving the interest levied. Thus, there is no error in the impugned order. Accordingly, the writ petition fails and dismissed

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• 2018 (1) TMI 513
  Maintainability of application u/s 254 - application filed after the expiry of limitation - Held that:- The Bench is of the view that the order was passed on 24/8/2016 and the Misc. application has been filed on 02/6/2017. As per the amendment in Section 254 of the Income Tax Act, 1961 w.e.f. 01/6/2016, the limitation for filing the M.A. is only six months. Thus, this M.A. is beyond the time limit provided in the Act. Hence, the miscellaneous application filed after the expiry of limitation is not maintainable and liable to be dismissed.

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• 2018 (1) TMI 512
  Disallowance made U/s 40(a)(ia) - AO has rejected the books of account of the assessee and estimated the income of the assessee by applying N.P. rate - Held that:- Once the n.p. rate is estimated, the AO cannot based this disallowance on the same books of accounts for the purpose of disallowance by invoking provisions of section 40(a)(ia) of the Act or general disallowance u/s 37 of the Act. The estimation made by the AO of net profit will take care of every addition related to business income or business receipts and no further disallowance can be made. See M/s Rakesh Construction co. Versus The ACIT, Circle-7, Jaipur [2016 (9) TMI 1404 - ITAT JAIPUR] Addition on account of service tax U/s 43B - Held that:- As the respondent assessee had not claimed any deduction on account of the service tax payable in order to determine its taxable income. In the above view, there can be no occasion to invoke Section 43B of the Act. See CIT Vs Knight Frank (India) Pvt. Ltd. [2016 (8) TMI 1096 - BOMBAY HIGH COURT]

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• 2018 (1) TMI 511
  Nature of expenditure - expenditure incurred by the assessee towards licence fee paid for using MS Office software - revenue or capital - Held that:- It is not in dispute that the assessee purchased MS Office software and used the same in its business. By purchasing MS Office software, the assessee has not become owner of the software. The ownership of MS Office software remained with Microsoft company. The assessee has to necessarily renew the licence periodically for using the same in the business. Merely because the assessee is using MS Office software as operating software in its system, it does not mean that MS Office software is the capital asset in the hands of the assessee-company. All assets / licence for use of software cannot be construed as capital asset merely because it gives an enduring benefit. By using MS Office software in the business of the assessee, the assessee gets enduring benefit in the course of earning of profit. So long as the assessee is a licensee, the ownership of MS Office software remains with Microsoft company. This Tribunal is of the considered opinion that the expenditure cannot be construed to be capital expenditure. See CIT Versus SOUTHERN ROADWAYS LTD.[2007 (6) TMI 193 - MADRAS HIGH COURT] - Assessing Officer is directed to allow the expenditure incurred by the assessee in acquiring licence of MS Office software as revenue expenditure - Decided in favour of assessee Diminution in value of investment - assessee admittedly invested in the subsidiary company, namely, M/s iLink Systems UK - Held that:- Both the authorities below rejected the claim of the assessee on the ground that income from UK subsidiary company is not taxable in India. Therefore, the loss in diminution in value cannot be allowed while computing the total income. The fact is that the control and management of subsidiary company in India was not considered by the both the authorities below. Moreover, the Double Taxation Avoidance Agreement between UK and India was also not considered. Therefore, the matter needs to be re-examined by the Assessing Officer. Accordingly, the orders of both the authorities below are set aside and the issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue afresh after considering the control and management of the UK subsidiary company and Double Taxation Avoidance Agreement between UK and India. Thereafter, the Assessing Officer shall decide the issue in accordance with law, after giving a reasonable opportunity to the assessee. Bad debts written off - Held that:- For the purpose of claiming an amount as bad debt, it should have been taken as income of the assessee in any one of the earlier years and it has to be written off in the books of account. The Assessing Officer has not verified whether the claim made by the assessee was written off in the books. Moreover, the assessee claims that the money was advanced and invested in the sister concern. Whether it is a loss during the course of business or not also needs to be examined. Since these facts are not examined by both the authorities below, this Tribunal is of the considered opinion that the matter needs to be reconsidered. Accordingly, the orders of both the authorities below are set aside and the issue of addition made on account of bad debt is remitted back to the file of the Assessing Officer who shall reconsider the issue afresh on the basis of material available on record.

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• 2018 (1) TMI 510
  Validity of reopening the assessment U/s 147/148 on the basis of DVO’s report in another case - no assessment and/or reassessment proceedings are pending - AO empowered to refer to the Valuation Officer - Held that:- There was no income tax proceedings pending on the date of reference made to the DVO. The assessment was reopened on the basis of DVO’s report in the case of Mr. Tung Kind Liu and not in the case of the assessee. We note that reopening the assessment U/s 147/148 of the Act on the basis of DVO’s report in another case was not valid. In assessee’s case under consideration, we are of the view that no valid reasons were recorded by the Assessing Officer. If the AO failed to record the valid reasons then reassessment would be bad in law. We are of the view that when the notice under section 148 has been issued and addition has been made by adopting the value estimated by the Valuation Officer and when we found that the AO is not empowered to refer any property for valuation in a case where no assessment proceedings or reassessment proceedings of the assessee is pending before him, there is no justification to make any addition in such cases. CIT(A) is correct in law as he relied the case of CIT vs. Umiya Co-op. Housing Society Ltd. (2006 (7) TMI 200 - GUJARAT HIGH COURT), wherein it was held that where no assessment and/or reassessment proceedings are pending, AO is not empowered to refer to the Valuation Officer, any matter for ascertaining cost of construction of any property of an assessee. Therefore, we are of view that reference made to the DVO by the AO was behind his jurisdiction - Decided against revenue

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• 2018 (1) TMI 509
  Disallowance u/s 14A r.w.Rule 8D - CIT-A deleted the addition - sufficiency of own funds - Held that:- As perused the relevant material on record and find that this issue stands settled in favour of assessee by the Hon’ble judicial High Court in the case of Cheminvest Ltd vs. CIT reported in (2015 (9) TMI 238 - DELHI HIGH COURT) wherein it has been held that if there is no exempt income, there can be no question of making any disallowance under section 14 A. Also see CIT vs. Holcim India Pvt. [2014 (9) TMI 434 - DELHI HIGH COURT] - Decided in favor of assessee.

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• 2018 (1) TMI 508
  Claim of exemption u/s 54F - amount invested up to the time available u/s 139(4) - Held that:- The case of Sri Ajeet Kumar Jaiswal Vs. ITO (2017 (10) TMI 1143 - ITAT HYDERABAD) this Tribunal was considering the case of an assessee who had deposited the capital gains into ‘term deposit’ account and not the capital gains account as required u/s 54(2) of the Act and since the funds were not utilized for any other purpose but for construction of a new asset, this Tribunal had held that the assessee was eligible for deduction u/s 54F of the Act in the said case even though the amount was not deposited into the capital gains account. However, in the case before us, the assessee has not deposited any amount in to any bank account, leave alone the capital gains account. Therefore, in our opinion, the assessee is eligible for deduction u/s 54F of the IT Act only on the amount which is invested up to the time available u/s 139(4) to file the return of income. In the case before us, the assessee has filed the return of income on 14-02-2013, therefore, the assessee is eligible for deduction u/s 54F of the Act for the amount invested by him till such date. In the case of Humayun Suleman Merchant Vs CCIT (2016 (9) TMI 70 - BOMBAY HIGH COURT) held that the assessee is eligible for deduction u/s 54F of the IT Act on the amounts spent for construction of a house till the date of filing of the return of income. Hence, the A.O is directed to allow the deduction u/s 54F of the Act accordingly.

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• 2018 (1) TMI 507
  Capital gains assessed in the hands of the assessee on account of assessee's assignment and relinquishment of rights in the firm's assets on the reconstitution of the firm - Held that:- The coordinate Bench of the Tribunal has already decided the identical issue in favour of the assessee in ITO vs. Paru D Dave (2006 (12) TMI 168 - ITAT BOMBAY-F) holding that revaluation of assets of partnership and the credit of revalued amount to the capital account of partners in their respective share ratio do not entail any transfer as defined under s. 2(47) of the IT Act - Decided against revenue.

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• 2018 (1) TMI 506
  Bogus purchases - purchases from grey market - profit estimation - Held that:- The assessee had not carried out any genuine purchase transactions from the aforementioned parties, but then the fact that the corresponding sales of the goods under consideration stood duly accounted for in the books of accounts of the assessee, had not been doubted by the lower authorities. We are of the considered view that now when the sales of the goods under consideration have duly been routed through the books of the accounts of the assessee, therefore, it could safely be concluded that the assessee had purchased the goods from the open/grey market. CIT(A) had rightly observed that the addition was liable to be restricted only up to the amount of profit margin involved in making of purchases of the goods from the open/grey market. We have given a thoughtful consideration to the observations of the CIT(A) and find that he had by way of a very well reasoned order restricted the addition in the hands of the assessee to the extent of the profit margin relatable to aggregate value of the purchases under consideration. We further find that no infirmity emerges on the part of the CIT(A) by adopting the profit margin at the rate of 12.5% by relying on the judgment of CIT Vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) - Decided against revenue

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• Customs

• 2018 (1) TMI 500
  Whether the Customs, Excise and Service Tax Appellate Tribunal has no more jurisdiction to entertain an Application for stay of the order impugned before it? Held that: - the Appellate Tribunal dealing with an appeal under the Customs Act has incidental or ancillary powers to grant appropriate interim relief. As appellate jurisdiction has been conferred on the Appellate Tribunal, by necessary implication, in a given case, the Appellate Tribunal has power to grant appropriate interim relief. The interim relief can be granted where, in a given case, the order impugned is very harsh and prima facie illegal. The interim relief can be granted in various circumstances including in a case where the failure to grant interim relief may render the appellate power nugatory. The Tribunal can always impose conditions for balancing the interests of the revenue and the assessee and for ensuring that that the amount of demand is secured in some form. The application bearing No.C/MA(Ors)94791/15 dated 28th August 2015 is restored to the file of the Customs, Excise and Serviced Tax Appellate Tribunal, West Zonal Bench, Mumbai - appeal allowed in part.

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• 2018 (1) TMI 499
  Penalty u/s 114 (1) and Section 117 of the CA, 1962 - smuggling - red saner logs - prohibited goods - Held that: - the appellant has violated the provisions of Section 114 (1) of the Act as they omitted to take due care for transit of the declared cargo - taking note of the fact that there is no allegation of direct involvement of the appellants in the offence, the penalty of Rs. Two lakhs imposed is on the higher side and requires to be reduced - the penalty imposed on M/s. SEC Services Ltd., reduced to ₹ 50,000/-. Penalty on M/s. Bhavani Shipping Services (I) Pvt. Ltd., and M/s. Seaport Lines - allegation is that they did not obtain KYC details of the client - Held that: - The Regulations require to obtain KYC of the client. M/s. Bhavani Shipping Services India Pvt. Ltd. is a shipping liner and they did not have any direct transaction with the exporter. Their immediate client was Ms/. Sea Port Lines (India) Pvt. Ltd. and they have produced the KYC details of M/s. Sea Port Lines (India) Pvt. Ltd. - In Scope Amra Logistics (I) Pvt. Ltd. Vs. CCE [2015 (6) TMI 652 - CESTAT MUMBAI] it was held that in view of the role of the companies, the lapse is only confined to the non compliance of KYC and not involvement in the smuggling of Red Sanders. In view of this facts, I am of the view that the quantum of penalty on the Appellant companies are very higher side and the Appellant companies deserve reduction in the penalty imposed under Section 114(i) - penalties imposed on M/s. Bhavani Shipping Services (I) Pvt. Ltd. and M/s. Seaport Lines (I) Pvt. Ltd. set aside - the confiscation of the container in the present case is unjustified and requires to be set aside. Appeal allowed in part.

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• 2018 (1) TMI 498
  Misdeclaration of export goods - prohibited goods - Brown Chick Peas - non-Basmati Rice - coriander seeds - Held that: - admittedly there was mis-declaration in respect of description as also quantity of the goods. There is no explanation by the appellant as to why the Chick Peas were not declared as brown Chick Peas by them and as to why non-Basmati rice was declared as Basmati rice - Further no explanation is coming forward from the appellant as regards the excess quantum of Coriander seeds - the confiscation of the goods in question is justified. Redemption fine - penalty - Held that: - redemption fine is to an event of 30% and there is no discussion about the margin of profit in the said goods. In the absence of the same, the quantum of redemption fine seems to be on the higher side and accordingly the same is reduced to 20% in toto of the value of the goods - the penalty imposed upon the exporting firm does not seem to be on the higher side and is accordingly maintained. Penalty on the Director - Held that: - the exporting firm has already been penalized and as such separate imposition of penalty on the Director would not be justified. Appeal allowed in part.

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• 2018 (1) TMI 497
  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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• Corporate Laws

• 2018 (1) TMI 504
  Dissolution of the company in liquidation under Section 481 of the Companies Act, 1956 - Held that:- The Court, having heard learned advocate Ms.Chandarana and considered the contents of the report, finds that as certified by the Chartered Accountant, since there is no fund available with the company and there are no assets and properties of the company, the Official Liquidator shall not be now required to take any action in furtherance of winding up proceedings. Since there are no funds available in the company’s account, it will be for the concerned authorities before which the proceedings are pending under the Employees’ Provident Fund Act against the company to proceed against the Ex-Directors if so permissible in law for the purpose of recovery of the provident fund dues. As stated in the report, since disbursement of the amount from the company’s account took place in favour of the secured creditors and the workers, before the judgment rendered by the Hon’ble Supreme Court in the case of E.P.F. Commissioner (2011 (11) TMI 639 - Supreme Court Of India), nothing could be done at this stage in connection with the provident fund dues for which proceedings are initiated by the concerned authorities under the Employees’ Provident Fund Act somewhere in the year 2013. In view of the above, the company in liquidation – M/s.Anjali Coating Private Limited is ordered to be dissolved under Section 481 of the Act and the Official Liquidator attached to this Court is discharged and relieved from his duties as a liquidator of the company in liquidation. However, the Ex-Directors are directed to file undertaking within a period of two weeks from the date of receipt of this order that if any liability in future arises in connection with the company they will be responsible for such liability.

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• 2018 (1) TMI 503
  Notice of winding up u/s 433/434 of Companies Act, 1956 as duly served upon the Respondent or not - Held that:- In the present case, apart from the fact that the notice was sent by the appellant at several addresses of the respondent, an effort was also made to send the said notice even at the new registered office address. Thus, it is obvious that the appellant left no stone unturned in sending the notices by various modes to the registered office of the respondent. Moreover, under Section 51 of the Act a document could be served on a company by sending it to the company at the registered office The observations of the Supreme Court in Parameswaran Unni (2017 (3) TMI 1340 - SUPREME COURT OF INDIA) are apt in the present case. Several attempts were made by the appellant to serve the winding up notices on the respondent and the mere fact that it was not specifically mentioned in the company petition that the winding up notice sent by speed post was not returned unserved, would not be a ground to dismiss the company petition. In view of the above discussion, the winding up notice dated 1st October, 2012 and 11th December, 2012 are held to be in compliance with the requirement under Section 434 read with Section 51 of the Act as also under Section 27 of the General Clauses Act, 1897. The company petition is restored to its original position. The petition shall be listed before the Company Judge for further proceedings. The respondent shall maintain status quo of all its assets and properties, subject to further orders that may be passed in the company petition.

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• Insolvency & Bankruptcy

• 2018 (1) TMI 505
  Dismiss an application for initiation of Corporate Insolvency Resolution Process - non-disclosure of facts beyond the statutory requirement under the I & B Code read with relevant form - Whether the penalty imposed by the Adjudicating Authority under Section 65 of the I & B Code is legal or not? - Held that:- There is nothing on record to suggest that the Corporate Applicant has suppressed any fact or has not come with the clean hands. The Adjudicating Authority has also not held that the application has been filed by the Corporate Applicant “fraudulently” or “with malicious intent” for any purpose other than for the resolution process or liquidation or that the voluntary liquidation proceedings have been initiated with the intent to defraud any person. In absence of any such reasons recorded by the Adjudicating Authority the impugned order cannot be upheld. Further, as the Adjudicating Authority before imposing penalty under Section 65 has not given nor served any notice to the Corporate Applicant recording its prima facie view and intent to punish the Corporate Applicant, the impugned order dated 8th May, 2017 cannot be upheld having been passed in violation of rules of natural justice. For the reasons aforesaid, the impugned order dated 8th May, 2017 passed in C.P.is set aside. The case is remitted back to the Adjudicating Authority for admission of the application under Section 10, if the application is otherwise complete. In case it is incomplete, the Adjudicating Authority will grant time to the appellant to remove the defects. At this stage, it is desirable to state that the Central Government in Form 1 or 5 or 6 of the ‘Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016’, has not provision for the parties to state whether any winding up proceeding has been initiated or liquidation order has been passed against the Corporate Debtor or not. No provision has been made there in for the parties to state whether any of clause of Section 11 is attracted or not. Non-disclosure of such relevant facts in the relevant Form 6, may be a ground to reject the application but a person can plead that the Form does not stipulate to disclose any ineligibility under Section 11. Therefore, we are of the view that the Central Government should make necessary amendment in the relevant Form 6 appended to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, which will enable the Adjudicating Authority to decide at the time of admission whether any fact has been suppressed or the person has come with the clean hand or not. We hope and trust that appropriate modification of the relevant Rules and Forms shall be made by the Central Government. In the meantime, the Adjudicating Authority may direct the Financial Creditors / Corporate Applicant to file an affidavit giving declaration in terms of Section 11 of the I & B Code and to state whether any winding up proceeding has been initiated or liquidation order has been passed by any High Court or Tribunal or Adjudicating Authority or not. The appeal is allowed with the aforesaid observations

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• PMLA

• 2018 (1) TMI 502
  Application of provisions of Prevention of Money Laundering Act, 2002 - pray for quashing and setting aside of Enforcement Case Information Report with different numbers registered by respondent no.2 Directorate of Enforcement against them, along with enquiry/investigation therein - Held that:- It is apparent that this court cannot make any observation and record any finding which will interfere with proceedings pending before the Appellate Tribunal. It is also apparent that this court cannot and could not have passed an order granting any interim relief to the petitioners in present matters. Though petitioners have not relied upon the judgment delivered by the Division Bench of Karnataka High Court, the respondents have pointed out, that the view reached there in favour of petitioners is stayed in Special Leave Petition by the Hon'ble Supreme Court, and the said Division Bench judgment cannot be cited as a precedent. We have already made some comments upon petitioners' contentions based upon Article 20, and we need not therefore, go into this issue at all. Thus we uphold the preliminary objection raised by learned A.S.G.I. We declare that Criminal Writ Petitions filed before this Court are not maintainable. We also clarify that the observations made by us supra, are in the light of arguments advanced and only to the extent necessary to evaluate the same. The same will not have any bearing or influence on the pending appeal before the Appellate Authority under 2002 Act, or pending prosecutions before the Special Court at New Delhi. Accordingly Writ Petitions are dismissed

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• Service Tax

• 2018 (1) TMI 501
  Classification of services - Cargo Handling Service or Goods Transport Agency Service? - Circular:B11/1/2002-TRU dated 1.8.2002 - Circular: 186/5/2015-S.T. dated 5th October, 2015 - Negative List - abatement - Held that: - From the nature of the services rendered by the petitioners as emerging from the record, in essence and substance, the contract is a contract for transport of goods from the place of the consignor to the place of the consignee or to the port in South India from where the consignee picks up the goods. The petitioners do not carry on any activity of packing and unpacking of goods - Insofar as loading and unloading of goods is concerned, the consignor loads the goods into the container and the consignee unloads the same. It is only when the container reaches the port that it has to be unloaded and loaded on the ship, which is done by the shipping company or a cargo handling agency, which renders such services to the petitioners who act on behalf of the customers - insofar as the service of loading and unloading at the port and shipping of goods from one port to the other is concerned, the petitioners are the recipients of such service from the shipping line and/or the cargo handling service on behalf of the customers. In the facts of the present case, while the petitioners provide the service of transportation, they do not provide any service of packing which is an essential ingredient of “cargo handling service” when transportation is a component thereof - in terms of the definition of “cargo handling service” as amended with effect from 16.5.2008, transportation was brought within its ambit, but only when transportation was in conjunction with packing (packing being the principal element) that it amounted to “cargo handling service”. In the facts of the present case, when the petitioners satisfy the ingredients of the “goods transport agency” as defined under the Finance Act, there is no question of placing the petitioners under the amorphous category of “cargo handling service” which is no longer defined under that Act - if a service meets with a specific description, such specific description has to be given a preference over a general description - In the present case, when the service provided by the petitioner falls within the specific description of “goods transport agency”, the same has to be given preference over the general description of cargo handling service, which is not defined under the Finance Act after the introduction of the negative list regime. Insofar as the applicability of sub-section (3) of section 66F of the Finance Act is concerned, the same is applicable where taxability of bundled service is involved. The entire SCN is based upon a fallacious premise that even if the service provided by the petitioners is mainly goods transport agency, even if any ancillary service of loading or unloading is provided, the transaction would fall within the ambit of cargo handling service. Petition allowed.

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• 2018 (1) TMI 494
  Penalties - non-payment of service tax - renting of immovable property services - Held that: - during the relevant time there was a dispute as to whether the activity of Renting of Immovable Property is subjected to levy of service tax and even today the matter has not been finally settled and the same is pending before the Apex Court - the appellant has paid the service tax along with interest in spite of the fact that he has not collected the same from his service recipient - Further there was no suppression of fact on the part of the appellant as he has shown the rent in the ST-3 returns and he had a bona fide belief that no tax was payable during the relevant period - penalty u/s 78 dropped. The appellants have not filed the returns during the material period and therefore, is liable to pay penalty u/s 77(2) which is a residuary clause and provides that any person who contravened any of the provisions of this Chapter or any Rules made thereunder for which no penalty is separately provided in this chapter, shall be liable to a penalty which may extend to ₹ 10,000/- (Rupees Ten Thousand only). Appeal allowed in part.

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• 2018 (1) TMI 493
  Classification of services - clearing and forwarding agency services - amounts received by the respondent as commission for negotiating the purchase and sale of particular items - Held that: - the issue now stands settled in their favor by the Larger Bench decision of the Tribunal in the case of Larsen & Toubro [2006 (6) TMI 3 - CESTAT NEW DELHI], where it was held that mere procuring or booking orders for the principal by an agent on payment of commission basis would not amount to providing services as "clearing and forwarding agent", within the meaning of the definition of that expression under Section 65(25) of the FA, 1994 - demand set aside - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 492
  Classification of services - Cargo Handling Services - Held that: - Tribunal in the case of Singh Transporters, M/s Sardar Roadlines, Shri Govind Constructions and Jet Construction and Carriers Versus Commissioner of Customs & Service Tax, Raipur and Commissioner of Central Excise, Bhopal [2016 (9) TMI 241 - CESTAT NEW DELHI] has decided the bunch of appeal, wherein the present appellant was also a party. The Tribunal has held that the services provided to M/s. SECL pursuant to the agreement, should not fall under the taxable category of Cargo Handling Service. Supply of tangible goods service - Held that: - the submissions of the appellant regarding payment of tax under the taxable category of Cargo Handling Service has not been discussed by the adjudicating authority - matter should go back to the original authority for a proper fact finding with regard to payment of Service Tax as claimed by the appellant. Appeal allowed in part and part matter on remand.

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• 2018 (1) TMI 491
  CENVAT credit - Valuation - Classification of services - business of manufacture, supply and erection at site of pre-fabricated/pre-engineered steel buildings and parts thereof at its three manufacturing units - classified under Works Contract Service or under Commercial or Industrial Construction Service? - the entire case of Revenue is based on the provisions under Rule 2A of Service Tax (Determination of Value) Rules, 2006 and Composition Scheme in respect of Works Contract Service. It is the contention of the Revenue that after 01.06.2007, the services of the appellant were appropriately classifiable under works contract service only in terms of Section 65 (105) (zzzza) of the Finance Act, 1994 and that the appellant had only two options for valuation of its service and that is, either Rule 2A of Valuation Rules, 2006 of under the composition Scheme. Held that: - the benefit of Cenvat credit on inputs cannot be denied to the appellants in the absence of any specific bar or prohibition in the Cenvat Credit Rules, 2004 or the Finance Act, 1994 or the rules made there under. We do not find any such restriction or prohibition nor the ld. D.R. has been able to show any such restriction to us. We find that in the present case, assessments were done by the appellant in accordance with the provisions. The issue in hand is squarely covered by the decision in the case of M/s SV Jiwani Versus CCE & ST, Vapi [2014 (3) TMI 454 - CESTAT AHMEDABAD], where it was held that it is undisputed that the appellant had provided output services which covered by works contract for setting up of plant, it has to be held that cenvat credit availed by the appellant is in consonance with the provisions of the CCR 2004. Appeal allowed.

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• Central Excise

• 2018 (1) TMI 490
  CENVAT credit - manufacture of taxable as well as exempt goods - waste - chhilka, dundli, bhushi and sprout - Rule 6(3) of the Rules - Held that: - the Tribunal relying upon the decisions of the Bombay High Court in Hindalco Industries Limited vs. Union of India, [2014 (12) TMI 657 - BOMBAY HIGH COURT] held that for the by-products i.e. chhilka, dhundli, bhushi and sprout emerging during the manufacturing of malt and malt extract, the assessee is not liable to pay 10% of the value of the said goods - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 489
  Maintainability of appeal - Section 35G of the CEA, 1944 - Held that: - In a recent decision of this Court in Principal Commissioner of Central Excise and Service Tax vs. M/s Raja Dyeing, Ludhiana, [2017 (3) TMI 1284 - PUNJAB & HARYANA HIGH COURT] it has been held that where the order of the appellate Tribunal deals with a question of rate of duty or valuation of the goods for the purpose of assessment as well as with questions relating to other aspects, an appeal is not maintainable under Section 35G of the Central Excise Act, 1944. The appeal is dismissed only on the ground that it is not maintainable under Section 35G of the Act.

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• 2018 (1) TMI 488
  Monetary limit of filing appeal - Section 35R of the Central Excise Act, 1944 - Held that: - the Government in exercise of powers under Section 35R of the Act vide instructions issued on 17.12.2015, had fixed the monetary limits for filing the appeal before the CESTAT, High Courts and the Supreme Court for reduction of Government litigation - It has been prescribed therein that below the prescribed monetary limits, no appeal shall be filed in the Tribunal, High Court and the Supreme Court. It was not disputed that the total tax effect involved in the appeal is ₹ 6,16,724/- under Section 142 of the 1962 Act and ₹ 1 lac on account of penalty imposed under Section 117 of the 1962 Act, which is below the prescribed monetary limit - appeal dismissed.

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• 2018 (1) TMI 487
  100% EOU - Non-fulfillment of export obligation - N/N. 13/81 dated 09.02.1981 - N/N. 57/94-CE dated 01.03.1994 - CBEC Circular 21/95-Cus dated 10.03.1995 - Held that: - while remanding the matter in the earlier round of litigation it was held by this Tribunal that proceedings could be initiated against the appellant only after the recommendation of the Development Commissioner and the Development Commissioner has dropped the proceedings against the appellant. Moreover, as per the CBEC Circular No. 21/95-Cus dated 10.03.1995, the demand of duty is required to be confirmed only after definite conclusion arrived at by the Development Commissioner and the CBEC Circular is binding on the authorities below. Therefore, in the absence of a definite conclusion by the Development Commissioner, no proceedings can be initiated against the appellant. Admittedly, ld. Development Commissioner has dropped the proceedings against the appellant therefore, the proceedings initiated by the adjudicating authority in the impugned order are contrary to the order of this Tribunal dated 19.09.2001 and also against the spirit of the CBEC Circular No. 21/95-Cus dated 10.03.1995. Appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 486
  Non-speaking order - case of Revenue is that the order of the Commissioner is non-speaking inasmuch as the question of imposition of penalty is not discussed - Held that: - there is no infirmity in the impugned order which is passed by the Commissioner after considering all material on record - the Commissioner has held that there was a bona fide on the part of the assessee for not paying the duty to the Government - the duty has been paid which was appropriated to the Government account by the Commissioner - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 485
  Refund claim - rejection on the grounds that it had been filed belatedly and was hit by limitation - Section 11 B of the CEA - Held that: - the competent authority is required to either sanction or reject the refund claim otherwise order for the amount claimed to be credited to the Consumer Welfare Fund. There is however no provision for the return of refund claims without making any of these decisions. There is no speaking order issued in this case - Once the relevant date is taken as 07.05.2004, the refund claim is found to be filed within the period prescribed under Section 11 B ibid. The order of the Commissioner (Appeals) upholding the rejection of refund claim by the original authority on the ground of limitation cannot sustain - appeal allowed.

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• 2018 (1) TMI 484
  CENVAT credit - case of respondent is that the credit was available to them prior to amendment in Rule 7(d) of the CCR, 2004 and therefore they cannot be asked to follow the said Rule 7(d) - Section 38A of the Central Excise Act - Held that: - the said rule permits distribution of cenvat credit. Any duty paid by the assessee does not automatically become cenvat credit. Any duty paid by the assessee which qualifies the test of Rule 3 of the CCR, 2004 can become cenvat credit when the same is availed by the assessee as cenvat credit - In any case Uni Deritend Ltd. has availed the credit of duty paid by them after the amendment and thus the law as it existed at the time when they converted the duty paid by them into cenvat credit would be the law applicable to the said credit, since at the time of availing cenvat credit, sub-rule (d) of Rule 7 and Explanation 3 of the said rule was in existence at the time of availing credit. Uni Deritend Ltd. was required to follow the same and avail the credit only in terms of Rule 7(d) read with Explanation 3 - demand of reversal of credit upheld. Penalty - Held that: - since the demand of duty under Section 11A(4) of the Central Excise Act, 1944 is upheld, the assessee is liable to mandatory penal provisions of Section 11AC of the Central Excise Act, 1944 - penalty upheld. Appeal allowed - decided in favor of Revenue.

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• 2018 (1) TMI 483
  CENVAT credit - fake invoices - receipt of invoices without receipt of goods - whether the penalties imposed on both the appellants is correct or otherwise and whether the goods were held liable for confiscation will stand scrutiny of law or otherwise? Held that: - In the case of materials on which CENVAT credit was raised without the receipt of the material there cannot be any confiscation of the goods as the goods never travelled from the supplier's premises to the appellant. Hence there cannot any goods which to be held liable for confiscation - As regards the finished goods manufactured and cleared by the appellant duty has been discharged by the appellant and the goods are cleared from main-appellant's premises on duty paying documents hence when the goods are not available for confiscation, the question of confiscation does not arise - It is settled law that when the goods are not available for confiscation, question of imposing redemption fine in lieu of confiscation does not arise. As regards demands raised, since the appellant has not contested the said demands before the lower authorities and also before this bench, the demand of an amount of ₹ 1,90,983/- stands upheld and having paid the same, the appropriation ordered by the lower authorities is also correct - the equivalent amount of penalty imposed on the main-appellant is correct and does not require any interference. Equivalent amount of penalty imposed on the individual Shri Ashok Katyal - Held that: - it is very clear that the goods never moved from M/s Synoprene Polymers Pvt. Ltd. to the main appellant and the confiscation ordered by the lower authority having been set aside by me, the penalty imposed on the individual Shri Ashok Katyal is unwarranted and needs to be set aside. Appeal allowed in part.

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• 2018 (1) TMI 482
  Penalties u/s 11AC read with Rule 15 (2) of the CCR, 2004 - Cenvat Credit availed on SAD - Held that: - at the time of clearance of goods the appellant paid excess CVD thereon. If an assessee is paying excess duty, and could not pay the duty due to the failure in their system cannot attribute that assesee was having malafide intentions not to pay duty. In that circumstances, the content of malafides are missing - penalties set aside. The appellant paid excess CVD at the time of clearance of goods, the same is required to be adjusted against the short payment of SAD made by the appellant along with interest. Therefore, for the calculation purpose the only, the matter is consigned to the adjudicating authority to find out how much amount on account of SAD was payable by the appellant and how much excess of CVD has been paid by the appellant at the time of clearance of the goods. Appeal allowed by way of remand.

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• 2018 (1) TMI 481
  CENVAT credit - input/input services - non-maintenance of separate records - whether the appellant herein had followed the provisions of Rule 6(3) and (3A) of the said Rules correctly or otherwise? - Held that: - the provisions of Rule 6(3) specifically indicate that an assessee if he is opting not to maintain separate account shall follow the options given under the said sub-rule - In the case in hand, the appellant herein had exercised their option of not maintaining separate account and following the option of payment of an amount as determined under sub-rule (3A). The said sub-rule (3A) specifically lays down the procedure that needs to be followed by the assessee and the one of the main procedures is in clause (a) wherein an option needs to be exercised by the manufacturer/assessee - In the case in hand, the appellant herein had exercised this option on 7th October 2013 itself - On careful perusal of the provisions of Rule 6(3A) of the said Rules, I do not find any requirement of filing of an intimation every year. Both the lower authorities have not disputed the calculation done by the appellant in the case in hand. Having not disputed the said calculation and there being no contest to such reversal undertaken by the appellant confirming the demand of an amount of equivalent to 6% of the value of the trading activity only on the ground that the appellant has not filed the intimation every year seems to be not in consonance with the law and needs to be set aside. Appeal allowed.

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• 2018 (1) TMI 480
  CENVAT credit - CVD paid on the goods imported and delivered to them for further activity of job working - Held that: - It is undisputed that the appellant is a job worker of Ajanta Pharma Ltd. of inputs which were imported under target plus scheme by filing different Bills of Entry were received and consumed by the appellant for manufacturing of final products which were subsequently transferred to Ajanta Pharma Ltd. who then exported the same as well as cleared the same for home consumption - denial of cenvat credit to the appellant being a manufacturer of final products seems to be incorrect. The benefit of Notification 73/2006 is for the importer who has complied with the conditions of target plus scheme. The said notification nowhere states that the inputs which are dispatched for manufacturing by the importer to their job workers, cenvat credit needs to be denied. Appeal allowed.

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• 2018 (1) TMI 479
  CENVAT credit - capital goods - Furnace oil - Petroleum Coke - Plastic bags/sheets - Cotton chedda - LPG gas cylinder - Synthetic lubricants/grease - Held that: - The LPG gas cylinder is not a capital goods as the gas cylinder is only carrying LPG gas on which central excise duty is paid by the bottlers. In my view, the said LPG gas is being a fuel, credit cannot be allowed, as the provisions of Rule 2(k) of the Cenvat Credit Rules, 2004 are very clear - credit denied. CENVAT credit - furnace oil - petroleum coke - plastic bags/sheets - cotton chedda - synthetic lubricants/grease - Held that: - these items can be considered as inputs - It is undisputed that the said items are used in factory premises of the appellant and central excise duty has been discharged on these items by the supplier/manufacturer of the said items. However, the appellant needs to reverse the cenvat credit attributable to the quantum of these inputs used for manufacturing fabrics which are cleared by them availing the benefit of exemption N/N. 30/2004-CE - matter is remitted back to the adjudicating authority to calculate the amount which needs to be reversed by the appellant out of the cenvat credit availed by them and the appellant shall discharge the said proportionate amount as determined by the lower authorities along with interest. Time limitation - Held that: - he said question need not be answered at this juncture as the availment of cenvat credit on the capital goods was being contested by the Revenue, appellant shifted stand claiming items as an input, which itself would mean that the appellant was aware that the inputs on which credit was availed would not fall under the category of capital goods - the argument regarding limitation is rejected. Penalty - Held that: - As the issue involved in this case regarding interpretation on the eligibility to avail cenvat credit as inputs or capital goods, no penalty is warranted against the appellant. Appeal allowed in part.

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• 2018 (1) TMI 478
  CENVAT credit - duty paying documents - fake and parallel invoices - scope of SCN - Held that: - The first appellate authority clearly records that the instant show cause notice dated 2.9.2013 which has been adjudicated by the lower authority and in appeal before him was in respect of disallowance of cenvat credit on the ground that the respondent No.1, Nilesh Steel & Alloys Pvt. Ltd., had not received the goods in the factory premises - the factual position as to confirmation of duty liability of Ravi Steel Industries is not controverted by the Revenue in the grounds of appeal. Appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 477
  Clandestine removal - variation with the actual sale - excess/shortage of finished goods and excess of raw material was found - Held that: - No evidence has been brought on record to ascertain the fact that how the goods have been produced by way of consumption of electricity, number of work hours, production capacity of the machines and no efforts has been made to ascertain the fact that how the goods were transported and where the goods were sold. Also, there are certain calculation errors while drafting the show cause notice, but no heed has been given by the authorities below to consider the same. In that circumstances, the impugned orders have no merit, hence, the same are set aside. Appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 476
  Refund claim of excess duty paid - unjust enrichment - Held that: - When there is price variation clause, the actual price of goods cannot be ascertained at the time of clearance and in a case where the actual price comes out to be higher than the value on which goods has been cleared then, the Revenue asked for duty on the extra value of the goods. Therefore, on the principle of equity, if any excess duty has been paid by appellant, the Revenue is required to refund to the assessee the excess duty. The reasoning given by the learned Commissioner (Appeals) are set aside as it has not been disputed by the Revenue that the excess duty has not been paid by the buyer, therefore, the appellant has passed the bar of unjust enrichment. The appellant is entitled for refund claim as they have not recovered the said price alongwith duty from the buyers of the goods - appeal allowed.

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• 2018 (1) TMI 475
  Clandestine removal - It is alleged that the same has been used in manufacturing of final goods, which has been cleared clandestinely - Held that: - The whole case has been made out against the appellants on the basis of third party evidence which cannot be relied upon as held by this Tribunal in the case of Rudra Ventures Pvt. Ltd. [2016 (3) TMI 1173 - CESTAT CHANDIGARH], where reliance was placed in the case of MUSK TOBACCO (INDIA) PVT. LTD. Versus COMMR. OF C. EX., LUCKNOW [2011 (11) TMI 570 - CESTAT NEW DELHI], where it was held that In the absence of evidence, the duty on the basis of third party statement cannot be demanded from the appellant. 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.

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• 2018 (1) TMI 474
  Rectification of mistake - jurisdiction - Held that: - as regard the issue raised regarding jurisdiction of the Adjudicating Authority, the same was neither raised before the lower Authorities nor even in grounds of appeal, therefore non-consideration of the same does not lead to error apparent on record in this Tribunal’s Order dated 06.12.2016. As regard all other issues on merit of valuation of the imported goods, this Tribunal’s order in the para 5 dealt with the issue in details on valuation, therefore raising the same issue once again in ROM application is illegal and cannot be accepted. The issue on limitation has also been considered in para 6 of Tribunal’s Order dated 06.12.2016. Therefore all the issues raised in the application have already been considered, therefore no error was found in the Tribunal’s Order. ROM application dismissed.

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• 2018 (1) TMI 473
  CENVAT credit - input services - services used for construction of their factory, by way of expansion - time limitation - Held that: - even though the audit was conducted in 2011 and November 2012 and the statement was recorded in May 2013, the department took almost four years to issue the show cause notice in January 2016 - the Commissioner (Appeals), while rejecting the assessee’s plea on the point of limitation, did not refer to and examine the various monthly returns filed by the assessee, which according to the Advocate, were placed before him - matter remanded to the original adjudicating authority for verifying the above contention of the assessee and to re-decide the issue - appeal allowed by way of remand.

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• 2018 (1) TMI 472
  CENVAT credit - input/input services - inputs used for generation of steam within the factory - captive consumption - Held that: - the electricity generated within the factory by use of steam, were not utilised/used in entirety within the factory for manufacture of the excisable final product. Since, a portion of the generated electricity is wheeled out from the factory, the appellant was not entitled to take credit or was required to reverse Cenvat credit proportionately in respect of the electricity wheeled out from the factory. Extended period of limitation - penalties - Held that: - it is an admitted fact that the issue with regard to applicability of sub-rule (3) of Rule 6 ibid was highly contentious and at the material time, there was no proper clarity with regard to dealing with manufacture of dutiable as well as final product. Therefore, mala fides cannot be attributed, justifying invocation of the extended period of limitation and for imposition of penalties. Appeal allowed in part.

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• 2018 (1) TMI 471
  Penalties - CENVAT credit - LRs used for transportation which were found fake and bogus and transportation was not done - Held that: - for the purpose of penalizing the appellant, no investigation was carried out against the appellant such as, neither any statement was recorded nor any document was recovered from the appellant’s premises. In such case, without carrying out any investigation, the person cannot be implicated for making any charge against the person. Only on the basis that the appellants were not interrogated without any investigation against them, they are not liable for penalty either under Rule 25(1)(d) or Rule 26(2) of the CER, 2002 - Appeal allowed.

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• 2018 (1) TMI 470
  CENVAT credit of CVD - case of appellant is that since the duty paid goods were received in the factory for the intended purpose, Cenvat credit cannot be denied on the sole ground that the bill of entry does not reflect the name of the appellant as the consignee - Held that: - With regard to the maintainability of the bill of entry for the purpose of taking Cenvat credit, it is found that the said bill of entry does not mention the name of the appellant as the consignee. Thus, technically the appellant was not entitled to take Cenvat credit. However, on fulfilling the other conditions to demonstrate that the subject goods were suffered payment of duty, those were received in the factory for manufacture of the excisable goods, the proviso contained in Rule 9 was required to be invoked in judicious manner by original authority. Tthe goods covered under the bill of entry were received by the appellant in its factory for use in the intended purpose. Therefore, the Cenvat benefit in respect of CVD amount should be available to the appellant. Appeal allowed.

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• 2018 (1) TMI 469
  CENVAT credit - input service - GTA Service - place of removal - Held that: - the impugned order are set aside and the matters are remanded to the adjudicating authority to decide afresh - appeal allowed by way of remand.

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• 2018 (1) TMI 468
  Penalty - CENVAT credit - removal of capital goods without payment of duty - Held that: - admittedly what was paid by Thane Unit was available as credit to their Ambernath unit, thus leading to a Revenue neutral situation. If that be so, the appellant cannot be held guilty of any malafide with the intention to evade payment of duty - initiation of penal provision against the appellant was neither warranted nor justified - appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 467
  CENVAT credit - duty paying documents - fake invoices - Section 9D of the Central Excise Act - absence of cross-examination - non-appraisal of evidence - burning loss - principles of natural justice - difference of opinion - Held that: - as there are difference of opinion on the various issues, the matter is being referred to Third Member for decision - matter referred to Third Member.

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• 2018 (1) TMI 466
  Classification of goods - Chemical Storage Tanks - CENVAT credit - Held that: - After going through the Chapter Note 73 and 84 of the Central Excise Tariff Act, 1985, we find that the tank with temperature controller is classifiable under Heading 84.19 - the classification under Heading 84.19 approved and cenvat credit on the duty paid on such tank allowed - penalty also set aside. The issue regarding mono rails and structure for various towers and acid tank is not pressed by the learned Chartered Accountant. Hence, the same is dismissed being not pressed - Appeal allowed.

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• 2018 (1) TMI 465
  Benefit of N/N. 67/95 dated 16/03/1995 - intermediate product namely sugar syrup (prepared within the factory, used in manufacture of biscuits) - Held that: - the issue has already come up before the Tribunal in the case of M/s Ganesh Bakers Pvt. Ltd. V/s CCE & ST, Raipur [2017 (11) TMI 471 - CESTAT NEW DELHI], where relying in the case of Lucky Biscuit Company vs. CCE, Patna [2017 (7) TMI 235 - CESTAT KOLKATA], where it was held that CBEC Circular dated 7.11.1994 relied upon by the lower authorities has been issued in respect of sugar syrup produced in the manufacture of aerated water and ayurvedic medicines. Hence, the same cannot be applied to the sugar syrup being produced for the biscuits without establishing that the two products are identical. When the impugned order has been set aside there is no justification for levy of the penalties. Appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 464
  100% EOU - Refund claim - it was alleged that there was difference in quantity between Bill of entry and physical receipt - Held that: - whatever goods were cleared from the bonded warehouse Kandla, same quantity was received by the respondent therefore there is no short receipt of the goods or diversion thereof - there is no dispute on the basis of documents that there is no short receipt of the quantity which physically cleared from the bonded warehouse Kandla - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 463
  CENVAT credit - input services - commission to various agents for promotion of sale - Held that: - the commission paid on the ‘Sales Promotion’ falls under the definition of ‘Input Services’ - reliance placed in the case of M/s Mangalam Cement Ltd., M/s J.K. Lakshmi Cement Ltd, M/s K.E.I. Industries Ltd Versus CCE, Udaipur [2017 (12) TMI 426 - CESTAT NEW DELHI], where it was held that the CBEC vide Circular No.943/4/2011-CX. Dated 29/04/2011 has clarified that Cenvat credit is admissible on the services of the sale of the dutiable goods on commission basis - credit allowed - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 462
  Refund of double tax paid - case of appellant is that the appellant-assessee have paid double tax on clearance of the goods (which are in the nature of capital goods), as the tax payable was already paid by the buyer of the goods under the scheme of N/N. 33/2012-CE - Held that: - The description of the goods actually cleared are the same as that mentioned in the proforma invoice duly attested by the Customs Officer, which fact is undisputed. The respondent have also produced a certificate from M/s Banshi that they procured the machineries from the appellant and that they have paid the duty of Central Excise duty of ₹ 25,94,734/- by the SHIS scrip license. M/s Banshi have also certified that they have not paid the Central Excise duty to the respondent on such clearances. Further, the Assistant Commissioner has also not brought on record that the respondent had cleared any other goods to the said buyers apart from the said clearances - On such categorical facts which are un-rebutted it was held that the substantial benefit of the said notification cannot be denied to the respondent in respect of the transaction in dispute. There is no authority to tax an assessee twice for the same transaction. Appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 461
  CENVAT credit - input services - rent a cab service - mobile telephone service - telephone service used in residence and guesthouse - pest control of factory and office - Held that: - there is no allegation in the show-cause notice, nor any findings in the orders of the court below that the services in question have been utilised for any particular employee. The exclusion clause under Rule 2(l) of CCR, 2004 introduced w.e.f. 01/04/2011 is not applicable in their case - appeal allowed.

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• 2018 (1) TMI 460
  CENVAT credit - input services - canteen services - rent a cab services/bus service - Courier services - Held that: - in the present case, the appellant have not provided the service of catering to any particular employee and as such the exclusion Clause ‘C’ in Rule 2(l) does not apply - credit allowed. Rent-a-cab service - Held that: - service is bus service received by the appellant company for transport of their employees to and from residence to the factory, the exclusion Clause ‘C’ does not apply - credit allowed. Courier expenses - Held that: - the order of the learned Commissioner (Appeals) is cryptic and nonspeaking by observing that the appellant failed to adduce evidence. There is no case made out by the leaned Commissioner (Appeals) that any particular details requisitioned from the appellant, which were not produced - courier expense is essential business expenditure in the nature of postal expenses for exchange of business documents, including samples - service is also allowable as input credit. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (1) TMI 459
  Bail Application - offences punishable under Sections 406, 420, 465, 468, 471, 474, 477(A), 120B of the Indian Penal Code and Section 85(1)(B)(C)(E)(F) and Section 85(2)(J), 85(4) of the Gujarat Value Added Tax Act, 2003 - Held that: - by two different orders similarly situated accused have been admitted to anticipatory bail/bail (Criminal Misc. Application No. 11201 of 2017 and Criminal Misc. Application No. 17152 of 2017), the case for admitting the petitioner to bail in anticipation of his arrest is made out - the applicant shall be released on bail on his furnishing a personal bond with one surety of the like amount on certain conditions - bail application allowed.

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• 2018 (1) TMI 458
  Condonation of delay in filing appeal - extended period of limitation - Section 38 of TNGST Act, 1959 - whether, this Court is empowered to condone the delay of the extendable period, wherein a specific time limit has been provided, for filing an appeal? Held that: - In Chhattisgarh State Electricity Board v. Central Electricity Regulatory Commission [2010 (4) TMI 1031 - SUPREME COURT], the Hon'ble Apex Court held that Section 5 of the Limitation Act cannot be invoked by the Court to allow an appeal to be filed, under Section 125 of the Electricity Act, 1963, after more than 120 days. In Saradha Travels v. Commissioner of Service Tax [2014 (7) TMI 884 - MADRAS HIGH COURT], an appeal was filed with a delay of one year and six months. The Tribunal dismissed the appeal. Delay cannot be condoned - petition dismissed.

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• Indian Laws

• 2018 (1) TMI 496
  Transfer of the pledged securities - repayment of loan - bounced cheques - Held that: - even if we assume that the sale of the pledged securities by defendant no.1 was illegal and that plaintiffs were entitled to redeem the pledged securities, they can do so only against payment of the entire amount outstanding to defendant No.1 as if the disputed sale did not occur and the sale proceeds were not appropriated towards plaintiffs' debt - At no point in time did plaintiffs object to such sale or contend that the sale was illegal or invalid on account of want of notice. On the contrary, plaintiffs repeatedly asserted that defendant no.1 had become the owner of the shares and was free to deal with the shares as it pleased. Having taken this contention till the filing of the suit and in the suit itself and having actively affirmed the freedom of defendant no.1 to sell the shares, plaintiffs cannot be heard to contend that they have not received notice of such sale or that the sale is invalid on that alleged account. The law is well settled that no notice under Section 176 is even necessary where the pledgor was consulted or acquiesced in the sale. Sale of any pledged share in excess of what was only required to be sold to recover the amount due, would be illegal. It is well settled that the relief sought by parties should not be refused on technical and pedantic grounds. Once the substantive prayers and the cause for justice is borne out in the pleadings, then the Court would be fully within its jurisdiction to mould the reliefs and any technicality would not obstruct the course of justice - the Court can undoubtedly take note of changed circumstances and suitably mould the relief to be granted to the party concerned in order to mete out justice in the case. Suit stands decreed accordingly.

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• 2018 (1) TMI 495
  Bounced cheques - loan agreement - whether the sentence awarded should run concurrently or not? - Held that: - If different cheques issued by the petitioner to the respondent no.2, which were subsequently dishonoured on presentation, arose out of a single loan transaction, then it could have been justified to direct for concurrent running of the sentences in relation to dishonour of cheques relevant to each such transactions - both the loan agreements executed between the parties are not arising out of the single transaction. Hence, this court is of the view that the sentence awarded by the Trial Court in the present case is not to run concurrently but consecutively - petition disposed off.

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