Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 27, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Companies Law
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F. No. 01/16/2013 CL-V (Pt-I) - dated
20-1-2018
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Co. Law
Companies (Registration Offices and Fees) Amendment Rules, 2018
GST
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05/2018 - dated
25-1-2018
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CGST Rate
Seeks to exempt Central Government’s share of Profit Petroleum from Central tax
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04/2018 - dated
25-1-2018
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CGST Rate
Seeks to provide special procedure with respect to payment of tax by registered person supplying service by way of construction against transfer of development right and vice versa
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03/2018 - dated
25-1-2018
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CGST Rate
Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to specify services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person under CGST Act, 2017 to be taxed under Reverse Charge Mechanism (RCM)
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02/2018 - dated
25-1-2018
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CGST Rate
Seek to amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.12/2017- Central Tax (Rate), dated the 28thJune, 2017.
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01/2018 - dated
25-1-2018
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CGST Rate
Seeks to amend notification No. 11/2017- Central Tax (Rate) dated the 28thJune, 2017
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06/2018 - dated
25-1-2018
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IGST Rate
Seeks to exempt royalty and license fee from Integrated tax to the extent it is paid on the consideration attributable to royalty and license fee included in transaction value under Rule 10(1)(c) of Customs Valuation (Determination of value of imported Goods) Rules, 2007.
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05/2018 - dated
25-1-2018
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IGST Rate
Seeks to exempt Central Government’s share of Profit Petroleum from Integrated tax.
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04/2018 - dated
25-1-2018
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IGST Rate
Seeks to provide special procedure with respect to payment of tax by registered person supplying service by way of construction against transfer of development right and vice versa.
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03/2018 - dated
25-1-2018
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IGST Rate
Seeks to amend notification No. 10/2017- Integrated Tax (Rate) so as to specify services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person under CGST Act, 2017 to be taxed under Reverse Charge Mechanism (RCM).
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02/2018 - dated
25-1-2018
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IGST Rate
Seeks to amend notification No. 9/2017- Integrated Tax (Rate) so as to exempt certain services as recommended by Goods and Services Tax Council in its 25th meeting held on 18.01.2018
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01/2018 - dated
25-1-2018
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IGST Rate
Seeks to amend notification No. 8/2017- Integrated Tax (Rate) so as to notify IGST rates of various services as recommended by Goods and Services Tax Council in its 25th meeting held on 18.01.2018.
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05/2018 - dated
25-1-2018
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UTGST Rate
Seeks to exempt Central Government’s share of Profit Petroleum from Central tax
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04/2018 - dated
25-1-2018
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UTGST Rate
Seeks to provide special procedure with respect to payment of tax by registered person supplying service by way of construction against transfer of development right and vice versa
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03/2018 - dated
25-1-2018
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UTGST Rate
Seeks to amend notification No. 13/2017- Central Tax (Rate) so as to specify services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person under CGST Act, 2017 to be taxed under Reverse Charge Mechanism (RCM)
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02/2018 - dated
25-1-2018
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UTGST Rate
Seeks to amend notification No. 12/2017- Central Tax (Rate) so as to exempt certain services as recommended by Goods and Services Tax Council in its 25th meeting held on 18.01.2018.
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01/2018 - dated
25-1-2018
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UTGST Rate
Seeks to amend notification No. 11/2017- Central Tax (Rate) so as to notify CGST rates of various services as recommended by Goods and Services Tax Council in its 25th meeting held on 18.01.2018.
GST - States
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G.O.Ms.No. 294 - dated
20-12-2017
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Telangana SGST
Seeks to prescribe quarterly furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of upto ₹ 1.5 crore
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G.O.Ms No.293 - dated
20-12-2017
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Telangana SGST
Telangana Goods and Services Tax (Sixth Amendment) Rules, 2017
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G.O.Ms.No. 290 - dated
18-12-2017
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Telangana SGST
Seeks to notify the evidences required to be produced by the supplier of deemed export supplies for claiming refund
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G.O.Ms.No. 289 - dated
18-12-2017
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Telangana SGST
Seeks to notify certain supplies as deemed exports under section 147 of the Telangana Goods and Services Tax Act, 2017
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G.O.Ms.No. 288 - dated
18-12-2017
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Telangana SGST
Amendment in Notification G.O.Ms No. 123, Revenue (CT-II) Department, dt. 30-06-2017
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G.O.Ms.No. 287 - dated
18-12-2017
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Telangana SGST
Telangana Goods and Services Tax (Fifth Amendment) Rules, 2017
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G.O.Ms.No. 286 - dated
18-12-2017
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Telangana SGST
Seeks to make payment of tax on issuance of invoice by registered persons having aggregate turnover less than ₹ 1.5 crores
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G.O.Ms.No. 285 - dated
18-12-2017
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Telangana SGST
Appointed proper officers for the purpose of sanction of refund of section 54 or section 55
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G.O.Ms.No. 251 - dated
22-11-2017
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Telangana SGST
Seeks to waive late fee payable for delayed filing of FORM GSTR-3B for Aug & Sep, 2017
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33/2017 - dated
17-11-2017
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Telangana SGST
Seeks to mandate the furnishing of return in FORM GSTR-3B till March, 2018
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29/2017 - dated
2-11-2017
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Telangana SGST
Amendment in Notification No. 16/2017, dt. 15-09-2017
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25/2017 - dated
2-11-2017
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Telangana SGST
Seeks to extend the due date for submission of details in FORM GST-ITC-04
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24/2017 - dated
2-11-2017
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Telangana SGST
Amendment in Notification No. 23/2017, dt. 28-10-2017
Income Tax
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05/2018 - dated
22-1-2018
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IT
U/s 35(1) (ii) of IT Act 1961 Central Government approved for organization M/s LPG Equipment Research Centre ('LERC')
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Royalty and license fee exempted from Integrated tax to the extent it is paid on the consideration attributable to royalty and license fee included in transaction value under Rule 10(1)(c) of Customs Valuation (Determination of value of imported Goods) Rules, 2007. - Notification
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Special procedure with respect to payment of tax by registered person supplying service by way of construction against transfer of development right and vice versa. - Notification
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Total Revenue Collections under GST for the month of December 2017 stand at ₹ 86,703 crore till 24th January 2018;
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Detention of goods - surgical gloves - detention on the ground that the goods were not accompanied by the document provided for under Rule 138(2) State SGST Rules - HC found the detention as illegal and unsustainable
Income Tax
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Exemption deduction u/s.54F - Merely not keeping the amount in capital gain tax and keeping the same in the bank account and utilizing the same within the statuary period will not disentitle the assessee for claim of deduction u/s.54F. - AT
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Addition on account of commission expenses - genuinity of claim - merely because in immediately preceding two years commission was not paid cannot be the ground for adverse inference - AT
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Computation of deduction u/s 10(23C) - aggregate annual receipts of two institutions - where there are more than one such institutions, which are under a particular society or trust, such as the assessee society in the present case, the aggregate annual receipts of each of the educational institutions would have to be considered separately and not together. - HC
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Condonation of delay in filing the income tax return and for making a claim for refund of the tax deducted at source - Section 119(2)(b) - matter restored before the CIT. - HC
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Imposition, legality and validity of compounding fee - obligations to pay the compounding charges - Guidelines of 2014 - Since an accused may have to suffer severe consequences for non-payment of tax, if he is held to be guilty, it is not open to him to challenge the reasonableness of the same. - HC
Customs
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Changes in the Drawback Rates of Certain Export Goods - DBK schedule as amended
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Demand of interest - scope of the order of the settlement commission - revenue failed to raise the issue if Interest before the settlement commission - revenue is alone to be blamed. It must blame itself if it has not conducted the proceedings before the Commission in the manner demanded by the statute or its report or its conduct of the proceedings was deficient in any manner - HC
FEMA
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Exim Bank's Government of India supported Line of Credit of USD 71.40 million to the Government of Côte d’Ivoire - Circular
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Exim Bank's Government of India supported Line of Credit of USD 100 million to the Government of the Republic of Kenya - Circular
Corporate Law
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Offences by companies - applicants are arraigned as accused - the company, though a legal entity, cannot act by itself, it can act only through its directors. The directors are expected to exercise their power on behalf of the company with utmost care, skill and diligence. - HC
Service Tax
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Merely sharing the staff amongst the group companies and got the reimbursement of cost from such associate company, the same should not be considered as rendering of the taxable service for the purpose of levy of service tax. - AT
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Educational institution or not - commercial coaching - Courses conducted in collaboration with Ballarat University, Australia - it cannot be accepted that courses conducted by the appellant result in issue of degree or diploma which are recognized by the law for the time being in force in India - AT
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Refund claim - Mis-match of documents - There is a provision of self certification or certification by Chartered Accountant about co-relation and nexus of input services with the exports. - AT
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Claim of exemption towards services used for export of goods - the responsibility entirely lies with the appellant to prove that the goods were in fact exported by utilising the taxable services - AT
Central Excise
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Classification of goods - Carry bags - the printing made on such carry-bags is merely incidental and accordingly they cannot be called as product of printing industry under chapter 49 - more appropriate classification will be as bags made of paper under heading 4819. - AT
Case Laws:
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GST
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2018 (1) TMI 1116
Detention of goods - surgical gloves - detention on the ground that the goods were not accompanied by the document provided for under Rule 138(2) State SGST Rules - Held that: - the power of detention contemplated under Section 129 of the SGST Act can be exercised only in respect of goods which are liable to be confiscated under Section 130 of the SGST Act; that there is no taxable supply when goods are transported on delivery chalans so long as the authenticity of the delivery chalan is not doubted and that therefore, such goods cannot be detained merely for infraction of Rule 138(2) of the State SGST Rules. Detention also on the ground that goods were intended to be supplied to an unregistered firm - Held that: - The learned Government Pleader, in the circumstances, did not attempt to support the impugned detention on the said reason. Instead, the learned Government Pleader attempted to support the impugned detention on the reason that the delivery chalan that accompanied the goods was not one prepared in accordance with the provisions contained in the State SGST Rules - The defect, if any, of the delivery chalan being not a reason mentioned in Ext.P2 notice, the same cannot be permitted to be urged to sustain the detention, for, the same is not the reason for the detention. The impugned detention is held to be illegal and the respondent is directed to release the consignment to the petitioner forthwith - petition allowed.
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Income Tax
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2018 (1) TMI 1120
Maintainability of appeal - Held that:- Tax effect involved in the present appeal is less than ₹ 20 lakhs and as per the CBDT Circular No.21 of 2015 dated 10th December, 2015, the Department has taken a policy decision not to prosecute the appeals wherein the tax effect is less than ₹ 20 lakhs. ITAT order [2015 (1) TMI 1369 - ITAT MUMBAI] confirmed saying losses of earlier years cannot be notionally brought forward to be set off against current year’s income, since the current year is the initial assessment year in which deduction u/s 80IA was claimed.
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2018 (1) TMI 1119
Assessment u/s 153A - Unexplained cash credits u/s.68 - identity and creditworthiness of the creditors not established - notice u/s.133(6) issued - Held that:- We have not been able to appreciate that how from the non-maintenance of statutory registers under the Companies Act it can be inferred that a part of share application money received by the assessee company was not genuine. The DR could not demonstrate before us the relation between the absence of statutory registers and genuineness or otherwise of the share application money received during the year. It is not in dispute that all the share applicants had responded to the notice issued by the AO to them and have affirmed the fact of their investing money as their share application with the assessee company. The above fact at least demonstrates that all the share applicants were identifiable. The entire share application money of ₹ 8,56,00,000/- in the assessment year 2010-2011 and ₹ 9,64,00,000/- in the assessment year 2011-2012 were received through banking channel and the share applicants have duly disclosed their investment in share application to the assessee in their balance sheets and transactions were also appearing in their bank statements. We find that though the AO had observed that after going through the balance sheet of the share applicants he was not satisfied with the creditworthiness of the share applicants but could not give any cogent reasons in the assessment order for his above finding. DR also could not bring any material before us to show that what was the reason to arrive at the said finding. Thus such a non-speaking order is bad in law and unsustainable. The CIT(A) has returned a finding that the identity of share applicants, genuineness of the share transactions and creditworthiness of the share applicants were established by the various documents like bank statements, balance sheets etc. furnished by the share applicants to the AO in pursuance to the notice issued to them u/s.133(6) of the Act. - Decided against revenue Additions made on account of applying net profit rate - rejection of books of accounts u/s.145 - Held that:- As during the course of the assessment proceedings, the assessee has duly produced its books of accounts along with the bills and vouchers before the AO. No defect in such books of accounts could be brought on record by the AO after examination and verification of the same. The reasons stated by the AO in the order of assessment are the reason to doubt or suspect the correctness of books of accounts which required the AO to examine the books of accounts more cautiously. The said reason does not empower the AO to reject the books of accounts. For rejecting the books of accounts the AO must point out such defect in the books of accounts which shows that the books of accounts are incomplete or incorrect or where the method of accounting provided u/s.145(1) or Accounting Standard notified u/s.145(2) have not been regularly followed by the assessee. No defect could be brought on record by the AO. In absence of the same, the AO was not justified in rejecting the books of account and brushing aside the book results and estimating the business income of the assessee. We, therefore, do not find any good reason to interfere with the order of CIT(A). Therefore, this ground of appeal of Revenue is dismissed.
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2018 (1) TMI 1115
Imposition, legality and validity of compounding fee - obligations to pay the compounding charges - Held that:- The guidelines do categorize between different types of offences and prescribe different compounding charges for different offences. The categorization or the classification in the guidelines do not appear to be arbitrary or irrational. Guidelines of 2014, under which the last application for compounding was made, and was accepted to be in the prescribed format, has enured to the benefit of the petitioner and the application has rightly been processed under these Guidelines. The petitioner has not raised a challenge either to the 2008 Guidelines or 2003 Guidelines. It is only after the charges were framed in the criminal proceedings and after filing the applications for compounding and after compounding charges have been determined as per the formula prescribed in the 2014 Guidelines, that the challenge has been raised by the petitioner. The petitioner having voluntarily agreed and undertaken to the department to pay the compounding charges and to withdraw his appeal, ought to be directed to be bound down by the same. It is a settlement process voluntarily invoked by the petitioner in order to escape criminal prosecution under the Act. Since an accused may have to suffer severe consequences for non-payment of tax, if he is held to be guilty, it is not open to him to challenge the reasonableness of the same. The petitioner had consciously undertaken to abide by the decision of the Committee constituted for compounding the offences. Accordingly, the petitioner has the option to deposit the compounding charges as determined within a period of four weeks from the date of this order, failing which, the authorities would be entitled to re-compute the compounding charges for the delayed payment and proceed in accordance with law. Petitioner is directed to pay costs of ₹ 50,000/- to the Respondent within a period of four weeks from the date of this order.
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2018 (1) TMI 1114
Reopening of assessment - deemed dividend addition u/s 2(22)(e)- Held that:- AO had during the assessment proceedings, leading to the order dated 14th February, 1996 under Section 143(3) of the Act had examined the very issue of deemed dividend in respect of loans taken from M/s. A.T.C. Clearing and Shipping (P) Ltd. On complete inquiry, the Assessing Officer in his assessment order dated 14th February, 1996 after a detailed discussion on the issue, added ₹ 8.17 lakhs as deemed dividend under Section 2(22)(e) of the Act. This on the basis of loans taken from M/s. A.T.C. Clearing and Shipping (P) Ltd. The reasons as recorded now seeks to take a different view (change of opinion) on the same material on which the original assessment order dated 14th February, 1996 was passed after due consideration to hold that income chargeable to tax has escaped assessment. Thus the impugned notice is completely without jurisdiction as it is based purely on a change of opinion - Decided in favour of assessee.
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2018 (1) TMI 1113
Condonation of delay in filing the income tax return and for making a claim for refund of the tax deducted at source - petitioners were unable to file its return of income within the prescribed time u/s 139(1) - this resulted in the petitioners not being able to claim refund of tax deducted at source on receipt of interest from banks / others - Held that:- We find that the impugned order does not deal with the various criteria which the petitioners were asked to satisfy for consideration of its application for condonation of delay as set out by order dated 24th April, 2017 issued by the office of the CIT (Exemption). The impugned order has in fact proceeded to deal with the merits of the petitioners' claim for expenses in determining its income and claim for exemption under Section 11 of the Act. In fact, the impugned order inter alia rejects the application for condonation of delay on the ground that there is huge cash expenditure on the part of the petitioners Trust. In fact, at the stage of considering delay condonation application filed by the petitioners, the merits of the claim cannot be a subject matter of examination as held by this Court in the case of Sitaldas K. Motwani (2009 (12) TMI 36 - BOMBAY HIGH COURT ). Kerala High Court in the case of Pala Marketing Cooperative Society Ltd. Vs. Union of India [2007 (11) TMI 294 - KERALA HIGH COURT] the Court held that in case where a party is deprived of a refund, then, it would be a case of genuine hardship. This of course has to be considered along with other facts of the application for condonation of delay. Thus we set aside the impugned order dated 26th July, 2017 passed by the Commissioner of Income Tax under Section 119(2)(b) of the Act rejecting the petitioners' application for condonation of delay in filing the return of income and delay in claiming refund due to it - matter restored before the CIT.
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2018 (1) TMI 1112
Chargeability of interest u/s 243B(3) - re-assessment proceedings - Held that:- The re-assessments made eventually led to a total computation of income at ₹ 23,32,002/-, which has acquired finality. The tax dues with surcharge on such computation would come to ₹ 4,59,043/-, 90% of which the assessee was bound to pay as advance tax. The assessee had advance tax and TDS credit of ₹ 5,12,984/, in excess of, even, the tax liability created. Hence, there was no cause for imposition of a liability under Section 234B(1) or under Section 234B(3). In the present case, however, the entire tax assessed on regular assessment; for which there was advance tax payment in compliance with Sections 208 and 210, was set aside and the advance tax paid was refunded to the assessee. The Department also had the benefit of advance tax from 31-03-1992 to 04-03-1996, when the refund was made. Hence, there would be no liability on the assessee under Section 234B(3), since there could not be a liability created from 01-04-1992. There could be no levy of interest under Section 234B(3), since the advance tax on the computation made on re-assessment was, in fact, paid by the assessee in the close of the previous year to the assessment year. Interest paid to the assessee in ordering refund - Held that:- As assessee had obtained a refund of the entire tax paid with interest. Subsequently, a re-assessment was made and the liability to pay advance tax arose again on 31-03-1992; which had been paid but later refunded. We, hence, direct the Department to compute the interest paid to the assessee, in ordering refund, for the amount of ₹ 4,59,043/-, on which a demand would be raised, which would be paid by the assesee. The additional question raised is answered in favour of the Revenue and against the assessee.
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2018 (1) TMI 1111
Disallowance of depreciation claimed on the Wind Turbine Generators - Held that:- To install the wind turbine generators, the assessee must have excavated some earth on the land it purchased. Such excavation, to our mind, does not amount to improving the land; rather, it amounts to a preparatory step for erecting the wind turbines. Therefore, the land evacuation, if any, must be taken as part of infrastructure development for establishing the windmills. AO and both the appellate authorities have misread and misapplied the evidence, and that has led to the perversity of findings. We reckon it to be a judicially reviewable error and accordingly set aside the Tribunal’s finding on the depreciation. As a result, the depreciation of ₹ 38,76,000 (50% for second half addition) claimed on the windmills was allowed. Nature of expenditure - disallowing interest on investment expenditure the assessee incurred on its new the line of business - Held that:- Tribunal, while concurring with the primary and appellate authorities, has observed that to claim the benefit of expenditure, it must concern business carried on by the assessee, and the profits to be computed and assessed to tax should be earned after the business is set up. It has concluded on facts that, by the time the assessee claimed the tax benefit, it had not set up the business or made it operational; so the question of interest concession under section 36 (1) (iii) of the Act does not arise. Indisputably, the assessee could not demonstrate to AO’s satisfaction that it actually invested its own funds rather than those it borrowed. Thus, we find it difficult to upset the concurrent findings. Indeed, the assessee did enter a new line of business, unconnected to its existing business, and it had not by then commenced that new business - uphold the Tribunal’s findings on the AO’s disallowing interest on investment expenditure the assessee incurred on its new the line of business.
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2018 (1) TMI 1110
Computation of deduction u/s 10(23C) - whether the aggregate annual receipts of the said two institutions are to be clubbed for the purposes of Section 10 (23C) (iiiad) or not? - Held that:- It is also not disputed that these two institutions exist solely for educational purposes and not for purposes of profit. It is, therefore, clear that there is a distinction between the expression “any person” and “educational institution”, and that the two are not the same. Had it been the intention of the legislature to have limited the scope of the provision to the interpretation which has been given by the Tribunal, it could easily have said that, if the aggregate annual receipts of any person from all institution(s) do not exceed ₹ 1.00 crore then the income derived there from would not be included in the total income of that person. But, this is not the case here. The reference here is pointedly to the “aggregate annual receipts” of the educational institution. The expression, “educational institution” and “any person” do not refer to the same entity and are distinct and different insofar as Section 10 (23C) (iiiad) of the said Act is concerned. Therefore, where there are more than one such institutions, which are under a particular society or trust, such as the assessee society in the present case, the aggregate annual receipts of each of the educational institutions would have to be considered separately and not together. As relying on M/S Children Education Society, (2013 (7) TMI 519 - KARNATAKA HIGH COURT) the aggregate annual receipts of other educational institutions means the total annual receipts of each educational institution, taken separately and not clubbed together. - Decided in favour of assessee
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2018 (1) TMI 1109
Penalty u/s. 271(1)(b) - non compliance with the statutory notices - Held that:- Failure to comply with certain notices on a particular date was due to reasonable cause as highlighted by the assessee not only during the course of the assessment proceedings but also before the Assessing Officer and Learned CIT(Appeals) in the impugned penalty proceedings and hence penalty cannot be levied in such circumstances. See M/s. Witness Builders Pvt. Ltd. vs. DCIT & Others [2017 (9) TMI 313 - ITAT DELHI] - Decided in favour of assessee
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2018 (1) TMI 1108
Addition on account of commission expenses - genuinity of claim - Held that:- Commission was paid to the said party in the assessment year 2007-08 and when in early years this party was paid the commission which appears to have been accepted, then merely because in immediately preceding two years commission was not paid cannot be the ground for adverse inference. In the case of other agents also similar nature of evidence has been appreciated by the Ld. CIT(A) and one such fact was that, in those cases payments have been made in the earlier two assessment years also. The assessee had already explained before the authorities below and before us that in the assessee’s case the payment of commission has been a regular feature since last several decades and it is through agents only the assessee has been selling its products across the country. Therefore, it cannot be held that payment of commission paid to Shri Shiv Kumar is either for non-business purpose or is not genuine. Accordingly, we hold that the payment paid to Shri Shiv Kumar as commission is to be allowed. - Decided in favour of assessee Disallowance of power and fuel expenses - Held that:- Maintaining of day to day register for the consumption of paddy husk would be a very difficult proposition to measure quantitatively daily for the reason that the paddy husk are kept in a heap outside in open which is always subject to rigours of weather and is quite prone to wastage. If the overall stock and net consumption has been shown on which no discrepancy has been pointed out, then simply because day to day register for consumption has not been maintained cannot be a ground for making any kind of disallowance on the consumption. There is no reason for the AO to draw adverse inference or take a different view in this year when the percentage of consumption is less in this year in comparison to the earlier years. Therefore, on these facts we do not find any reason to sustain any kind of adhoc disallowance and same is directed to be deleted - Decided against revenue Addition of unverified purchases - Held that:- Once it is not disputed that the purchases have been made through cheques and the cheques have been cleared in their favour, then it cannot be held that these payments have been made for some other purposes, especially when overall quantity of purchase, consumption of material for manufacturing and sales have not been disputed or any kind of discrepancy have been found in the books of accounts. If the sales and gross profit along with the manufacturing results have been accepted, then purchases cannot be disallowed. The source of the purchases are directly routed through books and it cannot be the case of purchases being made outside the books of account. Thus, we uphold the deletion of addition by the Ld. CIT (A) - Decided against revenue
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2018 (1) TMI 1107
Addition on account of difference in stock found as on the date of search and stock as per books of accounts - unaccounted income - addition of gross profit applying the rate of 26% on unaccounted stock - Held that:- Stock statements of the appellant are regularly submitted to the appellant's banker on monthly basis. The stock statements submitted during the period 1/4/2009 to 31/8/2009 were also submitted to the CIT(A) for his perusal. But both the authorities did not consider the reconciliation submitted by the appellant and authorities relied statement of the appellant u/s.142 of the Act though the appellant reflected for his statement after one month and thereafter also filed an affidavit to that effect but lower authorities failed to consider his contention. After hearing both the parties, we set aside this issue to the file of the AO to examine the reconciliation statement filed before the lower authorities and will decide the matter Addition applying gross profit @ 22.82% on difference in stock found as on the date of search - Held that:- As we can see that appellant’s profit in earlier year was less than the year under consideration meaning thereby his Gross Profit was higher than earlier years. Therefore, in such circumstances assessee’s contentions cannot be denied. In the result, this ground of appeal is allowed.
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2018 (1) TMI 1106
Exemption deduction u/s.54F - amount paid for booking of flat - Held that:- As decided in case of Shri Satosh P. Malhotra [ 2018 (1) TMI 1065 - ITAT MUMBAI] amount invested in property as well as kept in bank account even though not in the capital gain tax account should be allowed as exemption deduction u/s.54F. Merely not keeping the amount in capital gain tax and keeping the same in the bank account and utilizing the same within the statuary period will not disentitle the assessee for claim of deduction u/s.54F. In the instant case before us, as found that assessee has already paid ₹ 11.43 lakhs for booking of the flat and the remaining payment was made when the builder has got clearance from the competent authority. No reason to disallow ₹ 11.43 lakhs paid by assessee towards booking of flat. Accordingly, AO is directed to allow the same as exempt u/s.54F. - Decided in favour of assessee.
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2018 (1) TMI 1105
Accumulation of income for application to the extent of 15% of net receipts u/s. 11(1)(a) - allowance at 15% of gross receipts or net receipts i.e.; gross receipts less Revenue expenditure - Held that:- We find that the issue in question was considered and adjudicated by a co-ordinate bench of the Tribunal in the case of Mary Immaculate Society [2015 (6) TMI 1149 - ITAT BANGALORE] held that the assessee is to be allowed accumulation of income for application for charitable purposes u/s. 11(1)(a) of the Act at 15% of gross receipts following the decision of the ITAT Special Bench in the case of Bai Sonabai Hirji Agiary Trust v ITO (2004 (9) TMI 300 - ITAT BOMBAY-E). - Decided in favour of assessee
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2018 (1) TMI 1104
Computation of taxable income under head “House property” - Restricting the ALV under reference only to 1/3 of the area - fair rental value - Held that:- Considering the facts of the case in the light of the order of the Tribunal and the assessment order for AY 2011-12 & 2013-14, it is clear that the claim of the assessee has been accepted by the AO in set aside proceedings for AY 2011-12 that the assessee leased out only 1/3 of the space in property under consideration for which rental value was computed by the AO. The findings of the Ld.CIT(A) are thus supported by the stand of the AO taken in AY 2011-12 & 2013. Once the AO accepted the claim of the assessee that the assessee leased out only 1/3 of the area in property in question, there is no infirmity in the order of the Ld.CIT(A) in directing the AO to compute only letting value of 1/3 property in question. Accordingly, the appeal of the department is dismissed.
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2018 (1) TMI 1103
Claim of deduction under section 80IA(4) on additional income offered by the assessee - reopening of assessment - 153A proceedings initiated pursuant to search - Held that:- We find that the issue stands squarely covered by the order of Tribunal in assessee’s own case for the instant assessment year, wherein pursuant to search operation upon the assessee, order under section 143(3) r.w.s. 153A(b) of the Act, for the year under appeal was passed. Further, the assessment was completed under section 143(3) r.w.s. 147 of the Act, wherein further addition was made on account of additional income on account of certain purchases not being verified. Following the same parity of reasoning as laid down by the Tribunal vide order dated 09.12.2015, we hold the assessee eligible to claim the said deduction under section 80IA(4)- Decided against revenue
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2018 (1) TMI 1102
Penalty u/s 271(1)(c) - addition on the clandestine removal of goods - Held that:- As the addition made by the Assessing Officer on the clandestine removal of goods was estimated by the CIT(A). However, the said addition has been deleted by the Tribunal and the other addition made under section 69C of the Act has also been deleted by the Tribunal. Thus we uphold the order of CIT(A) in deleting the penalty levied under section 271(1)(c) of the Act. See ACIT, Jalna Circle, Jalna Vs. M/s. Rishi Steel & Alloys Pvt. Ltd. [2018 (1) TMI 1082 - ITAT PUNE] - Decided in favour of assessee
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2018 (1) TMI 1101
Long term capital gain of the assessee - determination of FMV - property purchased prior to 1981 - Held that:- CIT(A) correctly held that he was convinced with the argument of AR of the assessee that the property was purchased prior to 1981, therefore, deduction of fair market value as on 01/04/1981 and benefit of indexation should be allowed. This was not done by the AO in the Assessment Order as the Order was passed ex-parte and the assessee did not supply any information in this regard. The value of the property as on 01/04/1981 is valued by the Chartered Valuer at ₹ 3,79,000/-. The AO has not challenged the valuation in his Remand Report and has submitted to consider the case on merits. Considering the value of the property in 1981 at ₹ 3,79,000/- based on Valuer's Report, the indexed cost comes to ₹ 22,05,780/-. Accordingly he was correct to held that the assessee was entitled for deduction of ₹ 22,05,780/- u/s.48 of the Act and, therefore, reworked the long term capital gain on sale of above property at ₹ 43,67,720/- in place of 65,73,500/- and allowed relief of ₹ 22,05,780/- to the assessee. - Decided against revenue Unexplained cash deposits - Held that:- Claim of the appellant that he and his mother were having savings since past years out of known sources cannot be rejected in toto. It is seen that the documentary evidences have been filed showing sale of agricultural land at ₹ 28,57,102/-. The claim of the appellant is that entire deposit of ₹ 47,77,500/- worked-out by the AO is out of past savings, in the absence of any direct evidence filed by the appellant with regard to savings utilized by him for aforesaid deposits into bank, thus have no alternative but to estimate his savings available with him and his mother. Ends of justice would meet if the accumulated savings of the appellant and his mother is taken at ₹ 20,00,000/-which could have been available with them for deposits into the bank. DR though relied on the order of AO but could not point out any specific error in the above quoted order of CIT(A). - Decided against revenue
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2018 (1) TMI 1100
Addition u/s 69A on account of un-explained money - addition was made on the basis of statement of Shri Sunil Shrivastava - CIT-A deleted the addition - Held that:- We find that no specific error in the order of the CIT(A) could be pointed out by the DR. The DR could not controvert the finding of the CIT(A) that copy of the statement of Shri Sunil Shrivastava was not supplied to the assessee before placing reliance on the same. We find that the CIT(A) was justified in the above circumstances on holding that the said statement is inadmissible. Inability of the assessee to produce Shri Om Prakash Nema before the AO cannot be read against the assessee under law. No authority has been conferred upon the assessee by exercise of which he can compel Shri Om Prakash Nema to appear before the AO. The power has been conferred upon the AO under the law by exercise of which he could have made the necessary enquiry or investigation. It is also observed that the Revenue could not controvert the finding of the CIT(A) that even during the search no material was found to link up the assessee with the aforesaid deposit of ₹ 9.65 crores in the bank account of M/s Shree Bullion. - Decided against revenue Addition u/s.69C on account of unexplained house hold expenses - CIT-A delted the addition - Held that:- DR though supported the order of AO but could not bring any material on record to controvert the finding of the CIT(A) that the AO has estimated the household expenses on the basis that family consists of 28 members, which comprised 18 adult and 10 children. But the CIT(A) held that the family members of brother of Shri Mahendra Lal Saluja resides separately and that family consists of only 10 members and not 28 members as held by the AO.- Decided against revenue Un-explained excess stock of gold and silver - Search & Seizure action in the case of the assessee - Held that:- No positive material could be brought on record to controvert the finding of CIT(A) that gold and silver declared under the VDIS Scheme, was kept in the business premises of the assessee and stood duly reflected in the books of account, which on the last page of the ledger of Mahendra Jewellers for the AY 2007-08. Copies of which were produced before the CIT(A) and verified from the relevant books of account. Further, no material was brought on record to controvert the finding of CIT(A) that nothing incriminating was found/recovered either during extensive search operation or thereafter to prove that the aforementioned items, disclosed and stood accepted earlier, were assessable as undisclosed income. In absence of the same, we do not find any good reason to interfere with the order of CIT(A) - Decided against revenue Addition u/s 69A on the basis of loose paper found and seized during search - Held that:- DR supported the order of AO but could not point out any specific error in the order of the CIT(A). No material was brought on record to controvert the finding of CIT(A) that loose papers, in question, contained scribblings or rough notes and do not mean anything. No material was also brought on record to controvert the finding of CIT(A) that the nature of figures noted on the impugned loose papers seized and that there was no date, name of the party etc., on the said loose papers, and, hence, the same cannot be the basis for making addition but at best could a suspicion. No corroborative material was brought on record by the revenue to show that the figures mentioned in the impugned loose sheets were, in fact, the undisclosed income of the assessee.- Decided against revenue
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Customs
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2018 (1) TMI 1118
Demand of interest - scope of the order of the settlement commission - provisionally assessed Bills of Entry - power to issue clarifications u/s 127C(5) of the Customs Act, 1962 - revenue failed to raise the issue if Interest before the settlement commission - Held that: - It is clear from the provisions of the Act, and particularly Section 127H(1) of the Customs Act, 1962 that the Settlement Commission has power only to grant immunity from penalty and prosecution for any offence under the Customs Act, 1962. It has no power to grant immunity from payment of any duty or interest. Albeit, the Settlement Commission in regard to the case before it, can exercise all the powers of the Customs Officers and that is clear from the language of Section 127F(1) - From the record, it is apparent that the Settlement Commission did not agree with this stand of the Revenue for, on 19th June, 2017, it communicated that the provisions of the Customs Act, particularly in relation to the powers of the Commission, are clear and self explanatory. The Revenue was told to take appropriate action at its end. We do not see how the Revenue, when being in receipt of such communication from the Commission, could have pursued the action in terms of the impugned letter dated 10th April, 2017. The Revenue knew where it stands and in the scheme of the law. If it has not raised the contentions in the affidavitinreply or in the communication to the Settlement Commission during the proceedings or post its final order dated 2nd March, 2017, then, in the facts and circumstances of this case, it is alone to be blamed. It must blame itself if it has not conducted the proceedings before the Commission in the manner demanded by the statute or its report or its conduct of the proceedings was deficient in any manner. In the Petition challenging the impugned communication / letter dated 10th April, 2017 at the instance of the petitioner, the Revenue cannot call upon this Court to undertake an exercise which stands concluded by the final order of the Settlement Commission dated 2nd March, 2017. More so, when the said final order is not challenged by the Revenue in substantive proceedings. Demand of interest set aside - Decided in favor of assessee.
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2018 (1) TMI 1099
PSU - import of automatic machines - goods were imported for home consumption and certain compliances were not made - Held that: - this Court is not a forum to resolve these matters. There are remedies under the Customs Act, 1962. The order that is really in issue is dated 28th August, 2003 but issued on 3rd September, 2003. That order itself records that the show cause notice is dated 3rd October, 1997. There was no reply given to this notice. These are not satisfactory state of affairs even by a PSU. If its financial position is precarious, it could not have held back the dues and which were legitimate, due and payable in terms of an order. Now, we have a request for fresh adjudication into the same show cause notice. We do not deem it fit and proper to extend such facility or grant an opportunity at this belated stage unless the interests of Revenue are secured. Purely on the facts and circumstances of this case and without this order being treated as a precedent in future cases, including of a public sector undertaking, we direct that if the petitioner pays the amount of differential duty in terms of the communication dated 24th August, 2017 - petition disposed off.
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2018 (1) TMI 1098
Mis-declaration of imported goods - fire crackers - restricted item - Absolute confiscation - penalty - Held that: - The fact is not under dispute that the imported goods, in this case, were not only mis-declared but also under-valued by the importer Shri Roshan Singh, Proprietor of M/s. Roshan Singh and Company. Since the import of fire crackers is restricted in terms of the EXIM Policy, confiscation of the same by the Department under Section 111 of the Customs Act is proper and justified. However, since the goods were absolutely confiscated and were not released to the appellant Shri Roshan Singh, Proprietor of M/s. Roshan Singh and Co. for his use or sale in the market and the value of the offending goods, penalties imposed u/s 112 (a) and 114 AA can be reduced in the interest of justice - quantum of penalty reduced. Penalty on Shri Narinder Kumar - Held that: - it is a fact on record that he is not the importer of the subject goods and did not file any Bill of Entry or made any declaration or statement before the authorities, regarding the importation of such goods. Therefore, penalty u/s 114 AA of the Act cannot be levied against him - However, considering the fact that he abetted the importation of the prohibited goods, resulting in their confiscation u/s 111 of the Act, imposition of penalty u/s 112 (a) of the Act is justified - quantum of penalty reduced. Appeal allowed in part.
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2018 (1) TMI 1097
Mis-declaration of goods - PP woven fabrics - confiscation - redemption fine - penalty - Held that: - appellant has filed the wrong declaration with regard to the export of goods mentioned in the bill of export inasmuch as against 16 rolls of PP woven fabrics, only 12 rolls of PP woven fabrics and 4 rolls of FIBC were actually loaded for export. Thus, it is the case of mis-declaration of the goods and accordingly, Section 113 of the Customs Act, 1962 is attracted for confiscation of goods and for imposition of redemption fine. Penalty u/s 11AC of the CEA 1944 - Held that: - the authorities below have not specifically brought out any evidence to show the mala fides of the appellant in defrauding the government revenue. Since wrong filing of declaration is due to the lapses of the concerned person and is not attributable to any suppression, fraud, collusion etc., penalty set aside. Penalty u/s 114 of the CA, 1962 - Held that: - the order imposing penalty on the appellants u/s 114 of the CA, 1962 cannot be interfered with at this juncture, for the reason that both the appellants have admitted that the declaration was incorrectly filed in comparison with the goods actually loaded into the vehicle for export - penalty justified. Appeal allowed in part.
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2018 (1) TMI 1096
Import of vehicle - it was alleged that new vehicle imported is not meeting the requirement of Centre Motor Vehicle Rules (CMVR), 1989 - whether the impugned goods under consideration were imported in violation of policy? - Held that: - Admittedly, the goods imported are motor vehicle brought in CKD condition for the ease of import and transport. Necessarily, these items are to be used as motor vehicle in India and are governed by Motor Vehicle Rules - When the appellant intended to import ‘motor vehicle’ the requirement of Motor Vehicle Rules are to be complied. The Policy stipulations clearly make out that various conditions including Type Approval Certificate by the competent authority is a mandatory requirement for any vehicle imported into India. The imported goods are in violation of Import Policy Notes applicable during the relevant time - quantum of penalty reduced as goods have been completely confiscated by the department - appeal allowed in part.
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Corporate Laws
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2018 (1) TMI 1095
Offences by companies - applicants are arraigned as accused in Securities and Exchange Board of India (SEBI) - Held that:- The documents, record and averments in the complaint, justify the rejection of the application of discharge of applicants. In the present case, it is noted that the words “in charge of” are missing in the complaint, however, reading the existing averments in the complaint read with adjudication order, prima facie makes out a case against the applicants and they are not entitled for the discharge. It is also pertinent to note that in paragraph 13 of the complaint it is submitted that the accused are intentionally avoiding payment of penalty amount. The said allegation is attributed to all the accused including the applicants. The offence under Section 24(2) of SEBI Act stipulates that if any person fails to pay the penalty amount imposed by the adjudicating officer or fails to comply with any of the directions or orders, he shall be punishable with imprisonment. Thus, find that there is no substance in the submissions advanced by the applicants. The obligations of the directors in listed companies are particularly onerous especially when the Board of Directors makes itself accountable for the performance of the company to shareholders and also for the production of its accounts and financial statements especially when the company is a listed company. The directors of the company or the person incharge directly or indirectly use or employ in connection with the issue, purchase or sale of any securities listed in stock exchange, any manipulative or deceptive device or contrivance in contravention of SEBI Act or the Regulations made thereunder, have necessarily to be dealt with in accordance with the provisions of SEBI Act and the Regulations which is absolutely necessary for the investors' protection and to avoid market abuse. In paragraph 33 of the said decision, it is observed that the company, though a legal entity, cannot act by itself, it can act only through its directors. The directors are expected to exercise their power on behalf of the company with utmost care, skill and diligence. For the reasons stated hereinabove, find that there is no merit in the contentions of the applicants and, therefore, the applications are required to be rejected.
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Service Tax
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2018 (1) TMI 1117
Re-quantification of service tax liability - Valuation - Maintenance or repair service of transformers not manufactured - bonafide doubt - claim of deduction from the value - Held that: - Various facets of that aspect were highlighted in the grounds of appeal itself, but the tribunal understood it as only a limited request and for re-quantification. We do not see how the tribunal could have concluded that a casual perusal of the invoices produced before it indicates that the appellant assessee has charged separately for the material consumed and for the service of the repairs of transformers. The tribunal holds that the payment of service tax liability in relation to maintenance or repair service post 15th June, 2006 needs re-quantification, but if that is how it has understood the matter, re-quantification is not reconsideration of the limited prayer of the assessee regarding cost of the material that needs to be reduced from the value of tax liability due. We do not, therefore, think that a restricted remand was sought by the appellant, as is erroneously understood in the order under appeal. - Be that as it may, both aides agree before us that for this limited extent, the matter should go back to the tribunal itself and need not be sent to the adjudicating authority. The assessee would rely on those very materials, which were before the adjudicating authority and forming part of the paper book or records before the tribunal and nothing more. On these materials itself, the assessee would be able to convince the tribunal that the segregation or requantification, as prayed should be made. If this is how the matter is understood by the assessee, then, we see no justification for remanding the matter to the adjudicating authority. We set aside that part of the order, which we have reproduced above i.e. para 6.5 and the ultimate direction in para 6.7 with regard to liability of the appellant to pay service tax post 15th June, 2005 and direct that even if the said service attracts tax and which is admissible and payable, its computation be done afresh in accordance with law - Matter remanded back before the tribunal.
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2018 (1) TMI 1093
Business Auxiliary Services - certain public relation activities carried-out by them for their clients - Held that: - It is clear that the ‘media monitoring service’, though incidental, may help the client to formulate certain policies to help them improve their business apparently has no direct nexus to such sales promotion. Arranging interviews or press conference can be for various reasons like disclosing financial performance or clarifying certain issues to the public. As such, the presumption of the Revenue, that ‘media monitoring service’ and similar such activities are to be taxed under BAS, is not sustainable - appeal dismissed - decided against Revenue.
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2018 (1) TMI 1092
N/N. 18/2009-ST dated 7.7.2009 - services used for export of goods - denial on the ground that the conditions appended to the said notification have not been complied with by the appellant - Held that: - N/N. 18/2009-ST dated 7.7.2009 was issued with the objective of exempting taxable services used for export of the goods. Once the assessee satisfies the department that the goods were in fact exported and the taxable services were used/utilized for such exportation, the substantive part of the notification is considered to be satisfied and in such eventuality, the other conditions laid down in the notification should be construed as mere procedural in nature - Tribunal in the case of M/s Radiant Textiles Ltd. [2016 (10) TMI 242 - CESTAT CHANDIGARH] has held that the appellant has not produced adequate documents/records to demonstrate entitlement of the benefit of notification dated 7.7.2009. Since, the responsibility entirely lies with the appellant to prove that the goods were in fact exported by utilising the taxable services, it has to produce adequate documents, which I find were not produced at the time of adjudication of the matter - the matter needs reexamination. Appeal allowed by way of remand.
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2018 (1) TMI 1091
Refund claim - N/N. 17/2009-ST dated 07.07.2009 - exemption is to be claimed by way of filing refund claims - Jurisdiction - Held that: - when the Revenue raises objection regarding jurisdiction, it is not mentioned what will be the correct jurisdiction. The respondent-assessee were registered in Katni Range under the jurisdiction of Assistant Commissioner, Jabalpur who decided the refund claims. There is no error in jurisdiction. Refund claim - Transport service - Held that: - the respondent-assessee transported the goods directly to the port through different modes of transport as per their convenience and as such the claim for refund was found to be admissible. Mis-match of documents - Held that: - There is a provision of self certification or certification by Chartered Accountant about co-relation and nexus of input services with the exports. It is clear that in present appeals the Revenue had not brought out a specific case of any mis-match in the documents supporting the claims. Refund claim - services provided by port or person authorised by the port - Held that: - There is no dispute that services received by the respondent are falling under category of port services. The tax paid on such services has not been disputed. Hence, it is not open to the Revenue to contest that such tax paid on port services will not be eligible for exemption/ refund in terms of Notification No.17/2009-ST. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 1090
Classification of services - certain courses conducted by the appellant - whether classified under Commercial coaching and training services or not? - Held that: - no College or Institute issues independently any degree. It is university, who are recognized by UGC, who can issue degree. In the present case, the impugned order falls in error in insisting that the Institute itself should issue a degree. We find no force in such findings. Accordingly, the appellants are not liable to pay service tax on such courses. Courses conducted by the appellant in collaboration with Ballarat University, Australia - Held that: - The AIU is mandated to have recognition of equivalence degrees issued by the foreign university, as stipulated by the Ministry of Human Resources Development, Govt of India - it cannot be accepted that courses conducted by the appellant result in issue of degree or diploma which are recognized by the law for the time being in force in India and the in the absence of categorical evidence, the conclusion made by the lower authorities cannot be interfered with. Penalty - Held that: - the issue is one of interpretation of legal provision. The appellant have no malafide intention not to pay the taxes in time - penalty set aside. Appeal allowed in part.
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2018 (1) TMI 1089
CENVAT credit - exempt services - Rule 6(3)(ii) of the Cenvat Credit Rules, 2004 - dispute in the present appeal relates to the application of Rule 6 of the Rules to the effect that the assessee-Appellants should maintain separate accounts for usage of credit availed input services for taxable output services and exempted output services - Held that: - reversal of credit amount attributable to exempted services, in any case, is to be confirmed by verification of documents. The claim made by the assessee-Appellants requires verification by the original authority - appeal allowed by way of remand.
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2018 (1) TMI 1088
Classification of services - transportation of goods - whether taxable under Cargo Handling Service or Goods Transport Agency Service? - Held that: - Since the appellant, in this case, has not specifically objected to the findings of the adjudicating authority that it has not provided two categories of services, we are of the view that the services provided by the appellant should merit consideration as cargo handling service. Extended period of Limitation - Held that: - suppression, misstatement etc. cannot be levelled against the appellant, justifying invocation of the extended period of five years for issuance of the SCN - demand upheld for normal period only. Penalty - Held that: - appellant entertained the bonafide belief that the services provided by it will fall under the GTA service - the penalty imposed in the impugned order should be viewed in terms of Section 80 of the Finance Act, 1994, and set aside. Appeal allowed in part.
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2018 (1) TMI 1087
Demand of service tax - Manpower Recruitment Supply provided to Group Companies - Held that: - Since the appellant is not a professionally manpower supply agency and merely sharing the staff amongst the group companies and got the reimbursement of cost from such associate company, the same should not be considered as rendering of the taxable service for the purpose of levy of service tax. Further, there is no relationship between the appellant and its associated company as “client” and a “service provider”. Thus, in absence of providing of any service to the clients as contemplated in the definition of taxable service, the activities of the appellant will be outside the scope and purview of Service Tax under the category of manpower recruitment or supply agency service. CENVAT credit - demand for non-maintenance of separate records in terms of Rule 6 (3) ibid - Held that: - own trading of securities cannot be termed as exempted service and accordingly, the provisions of rule 6 (3) ibid will not applicable for maintenance of separate records/accounts. The present finding is only on this limited aspect of application of Rule b (3). The basic issue as to whether the Cenvat Scheme itself is applicable to such trading has not been a dispute examined in the proceedings. Penalty on Cenvat Credit of Input Services reversed during adjudication - sub-rule (3) of Rule 15 ibid - Held that: - since the dispute relates to the period 2005-06 to 2009-10, which is prior to the date of amendment of Rule 15 ibid, the rigour of said amended sub-rule will not have any application for imposition of penalty for irregular availment or utilisation of Cenvat Credit, by reason of fraud, collusion etc. - penalty cannot be sustained. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (1) TMI 1086
Classification of goods - Envelope/Outer/jacket/Sim sleeve or Pouch - Forms - Start-up Kit(SUK)/Kit - Carry bags - Pads - Score card - Hangers-Mill Board - Hangers – Plastic - Printed Sheet - Printed matter - Scrap - Held that: - as regards envelpos, It is clear that an envelope is a sub-species of a general category of containers. When there is a specific entry for paper envelopes, we find it is not tenable to classify it under the broad category of “cartons, boxes, cases, bags and other packing materials of paper, paperboard, etc.” We find that between these competing tariff entries, more appropriate will be under main heading 4817 which specifically covers envelops instead of a general heading of other packing containers - the classification, as claimed by the appellant, is more appropriate. Start-up kit contains outer envelope - CIF/CAF form - leaflet containing details of telecom service - Held that: - these are printed material. As the envelopes, they will be classified 4817 10 00 or when the leaflets and printed materials are cleared, the same will be classifiable under other printed matter under heading 4911 as products of printing industry etc. Forms - Held that: - It is clarified that forms of telecom companies, educational institutions, etc. are loose sheets cut-to-size and are not covered under heading 4820. Printing on these forms is not merely incidental. In view of explanatory note to heading 4901 and 4911, these forms are classifiable under heading 4911 - the impugned order classifying the forms under chapter 48 is not sustainable. Carry Bags - Held that: - On perusal of the tariff classifications and the sample material, we are of the considered view that the printing made on such carry-bags is merely incidental and accordingly they cannot be called as product of printing industry under chapter 49 - more appropriate classification will be as bags made of paper under heading 4819. Score Cards - Held that: - the product under consideration carries extensive printing with information and design and such printing cannot be considered as merely incidental to the primary use of the goods - the printing on the paper gives the essential character for product and accordingly is classified as a product of printing industry under chapter 49. Hangers – Mill board/plastic - Held that: - these are the printed loose sheets which are not bound in the form of books. These are mainly misc. items in the nature of advertisement or messages panels or posters under rightly classifiable under chapter 49 - there was no discussion or finding was recorded in the impugned order. Scrap of paper - denial of N/N. 2/2005 CE and 12/2012 CE on the ground that the claim that these scrap were generated in the course of printing educational text books was not supported by evidence - Held that: - The emergence of such waste and scrap from duty paid paper and paper board is not as a result of manufacturing activity and no excise duty leviable on such item - in the present case, the appellants are not engaged in the manufacture of paper or paper board. They are essentially engaged in producing various printed products. The products which they produced were variously classified as discussed above. They do not manufacture any waste and scrap paper - there are no justification to demand central excise duty on the scrap paper arising during the process of production of various items. Appeal disposed off.
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2018 (1) TMI 1085
Clandestine removal - seizure of goods - redemption fine - penalty - Rule 25 of Central Excise Rules, 2002 - Held that: - provisions of Rule 25 of Central Excise Rules, 2002 are applicable to the goods manufactured by the appellant - Admittedly, raw material and semi-finished goods cannot be confiscated as held by this Tribunal in the case of Anchal Prints Pvt. Ltd. Vs. CCE, Surat-I [2007 (10) TMI 532 - CESTAT, AHMEDABAD] - confiscation of raw material and semi finished goods recovered during the course of search from M/s Bentex Control & Switchgear Co. set aside - redemption fine also set aside. The redemption fine has been imposed on the finished goods found in the possession of M/s Bentex Control & Switchgear Co. which was not recorded in the statutory record and finished goods cleared by M/s Bentex Control & Switchgear Co. were found in the premises of co-appellants which has been cleared by M/s Bentex Control & Switchgear Co. without payment of duty - It is a fact on record that the modus-operandi is that the appellant is clearing goods without payment of duty without recording the same in records. Therefore, in the facts and circumstances of the case, the goods found unaccounted in the statutory record is liable for confiscation - confiscation upheld. Penalty u/r 25 of CER, 2002 - Held that: - the co-appellant have received the goods on which no duty has been paid at the time of clearance. Therefore, the same are rightly confiscated in terms of Rule 25 of Central Excise Rules, 2002 and redemption fine is rightly imposed on the said goods. Redemption fine on raw material and finished goods is not imposable but the redemption fine on finished goods is affirmed - Appeal allowed in part.
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2018 (1) TMI 1084
Waste - Sulphuric Acid - Held that: - In the present case, Sulphuric Acid emerging during the manufacture of detergent is a technological necessity and it is a waste product, though sold for a consideration - exemption under N/N. 89 of 95 allowed - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 1083
SSI exemption - use of Brand Name - The whole case of the Department is based on the photographs taken from the premises of the buyer (SKIT) and the statement recorded by the Department of the Director and Registrar of the Institutes, which were retracted later - Held that: - there is no material available with the Department to allege that the assessee-Appellants were using the brand name of another person. In fact, Rastogi is not a brand name of any other person and is being used by the family members. Rastogi is a surname/family name for which every family member is entitled to use. The Department has neither issued any notice nor examined the firms of family members who are also engaged in the similar line of business. Only the assessee- Appellants have been made target which is not desirable. Thus, the Department has made out a poor case. The assessee-Appellants have not used any registered brand name of the third party - the assessee-Appellants are entitled for the SSI exemption, as per law - Appeal allowed - decided in favor of appellant.
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Indian Laws
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2018 (1) TMI 1094
Maintainability of petition - Prayer for quashing of FIR - it was claimed that the FIRs do not disclose commission of any cognizable offence as the dispute between the parties is purely civil in nature - whether this Court should entertain the present petitions under Section 482 Cr.P.C. at this stage, in view of the fact that the earlier preferred petition under Section 482, i.e. W.P.(Crl.) No. 498/2005, and the other petitions mentioned in paragraph 5 above were withdrawn with liberty to agitate all issues before the Trial Court at the appropriate stage/ stage of consideration of charge? Held that: - the present petitions are completely misconceived and the petitioners are not entitled to seek quashing of the aforesaid FIR - Pertinently, the earlier quashing petition being W.P.(Crl.) No.1163/2003 filed in relation to FIR No.99/2002, already stands dismissed on 24.03.2005. The said order was upheld by the Supreme Court when the Special Leave Petition against the same was also dismissed. The dismissal of the appeal preferred by the VLS under Section 10F of the Companies Act by this Court, or the further dismissal of the SLP by the Supreme Court has absolutely no bearing on the continuation of the criminal proceedings since the said development cannot be said to be relevant or material development qua the criminal proceedings undertaken in respect of the aforesaid FIRs. The present petitions are completely misconceived and they are liable to be dismissed.
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