TMI Tax Updates - e-Newsletter
January 30, 2018

Case Laws in this Newsletter:

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

Articles

• It’s going to be an unaccustomed Budget 2018!
• SEAMLESS FLOW OF INPUT TAX CREDIT: AN ILLUSION FOR BUILDERS

News

• GST data reveals 50% increase in number of Indirect Taxpayers

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• Gross Tax Collections on Track for First Eight Months of GST Era;

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• Address by the President of India, Shri Ram Nath Kovind, to the Joint Sitting of Two Houses of Parliament

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• Text of PM’s statement to media, ahead of Budget Session of Parliament

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• Economic Survey Draws Attention to 10 New Economic Facts on Indian Economy

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• Finance Minister Present Economic Survey 2017-18 in Parliament

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• RBI Reference Rate for US $

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• Pink-Color Economic Survey 2017-18 Highlights Gender Issues Against Backdrop of Development Beti Bachao, Beti Padhao; Sukanya Samridhi Yojana and Mandatory Maternity Leave are all Steps in Right Direction, Acknowledges Survey

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• Growing Migration by Men is Causing ‘Feminisation’ of Agriculture Sector, Says Economic Survey

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• Utmost Priority to Social Infrastructure Like Education, Health and Social Protection is Given to Engineer an Inclusive and Sustainable Growth, Says Economic Survey

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• Demonitisation has Helped Share of Financial Saving Rise, Says Economic Survey

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• India Not Yet Facing “Late Converger Stall”

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• Coordinated Action Between Government and Judiciary to Boost Economic Activity- Ease of Doing Business

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• IBC Mechanism Being Used Actively to Resolve NPA Problem, Asserts Economic Survey

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• Promoting Inclusive Employment-Intensive Industry and Building Resilient Infrastructure are Vital Factors for Economic and Development, Says the Economic Survey

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• Inflation During 2017-18 Averaged to the Lowest in the Last Six Years

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• Measures to Control Inflation

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• Agricultural Mechanization Picks up Pace

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• Rs.20,339 Crore Approved for Interest Subvention in 2017-18: Economic Survey

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• Agricultural R&D Needed to Sustain Agricultural Productivity Growth Says Economic Survey

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• India’s Commitment to Climate Change Reflected in Support of Sustainable Development Goals: Economic Survey

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• Economic Survey Expresses Concern Over Air Pollution, Suggests Coordination Among Agencies & Government and Civic Engagement

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• During April-September 2017-18, Growth in Services Exports and Services Imports Robust at 16.2 Per Cent and 17.4 Per Cent Respectively

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• In 15 States And UTS, Services Sector is the Dominant Sector, Contributing More than Half of the Gross State Value Added (GSVA)

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• FDI Equity Inflows to the Services Sector Grew by 15.0 Percent During 2017-18 – Says Economic Survey

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• Sector-Wise Performance of Major Services and Some Recent Government Policies to Boost the Growth of the Sector

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• Economic Survey Takes Note of Positive Health and Economic Impact in ODF Areas

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• Economic Survey calls for Fiscal Federalism and accountability to avoid low equilibrium trap

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• Economic Survey Underlines Government’s Commitment to Achieve SDG-4 For Education

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• Tech Enabled Initiatives to Bring Transparency and Accountability for Enforcement of Labour Laws, Says Economic Survey

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• Economic Survey Reiterates India’s Commitment to Achieve the Targets Under SDG-3 and to Strengthen Health Delivery Systems

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• Economic Survey Notes Important Developments on Trade Policy Front

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• Indian Science & Technology- Outputs in the last one year

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• India’s External Sector Continues to be Strong Says the Economic Survey

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• India Needs to be a net producer of Knowledge, says the Economic Survey

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• FM: Dynamic nature of the Indian economy and availability of technology tools has impacted the functioning of all the Departments including the nature of Tax Administration;. Two major challenges before the Customs Administration include trade facilitation and sharp detection & enforcement to avoid any tax evasion; ‘Investiture Ceremony 2018’ and ‘International Customs Day 2018’ held in Vigyan Bhawan in New Delhi

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Notifications

Companies Law

• F. No. A-35011/29/2012-Ad.III - G.S.R. 95(E) - dated 23-1-2018 - Co. Law
  Ministry of Corporate Affairs, Serious Fraud Investigation Office, Additional Director (Capital Market)/Joint Director (Capital Market) and Additional Director (Financial Transactions)/Joint Director (Financial Transactions) Group 'A' Post Recruitment (Amendment) Rules, 2018

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GST - States

• 42/2017-State Tax (Rate) - dated 14-11-2017 - Manipur SGST
  Seeks to amend notification No 2/2017- State Tax (Rate) dated 28.06.2017, which exempts certain goods from GST under section 11 of the Manipur GST Act, 2017

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• 41/2017-State Tax (Rate) - dated 14-11-2017 - Manipur SGST
  Seeks to amend notification No 1/2017- State Tax (Rate) dated 28.06.2017, which prescribes GST rates under section 9 of the Manipur GST Act, 2017

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• 63/2017 - dated 15-11-2017 - Sikkim SGST
  Seeks to extend the due date for submission of details in FORM GST-ITC-04

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• 62/2017 - dated 15-11-2017 - Sikkim SGST
  Seeks to extend the time limit for furnishing the return in FORM GSTR-6 for the month of July, 2017

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• 61/2017 - dated 15-11-2017 - Sikkim SGST
  Seeks to extend the time limit for furnishing the return in FORM GSTR-5A for the months of July to October, 2017

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• 60/2017 - dated 15-11-2017 - Sikkim SGST
  Seeks to extend the time limit for furnishing the return in FORM GSTR-5, for the months of July to October, 2017

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• 59/2017 - dated 15-11-2017 - Sikkim SGST
  Seeks to extend the time limit for filing of FORM GSTR-4

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• 58/2017 - dated 15-11-2017 - Sikkim SGST
  Seeks to extend the due dates for the furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores

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• 57/2017 - dated 15-11-2017 - Sikkim 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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Highlights / Catch Notes

Customs

• Classification - 9.3 Meter Compact Cassegrain Antenna Sub-system - Model 9.3 KPK - whether the goods are 'antenna' or 'antenna sub-system’? - the imported goods are not of a type used with apparatus for 'radio-telephony' and 'radio-telegraphy' - AT
  Visit to Get Source

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Service Tax

• Refund of service tax - export of service - the Department of Post is rendering service to the appellant by executing the remittance of foreign exchange to the intended recipient in India. For this, they are receiving the considerations from the appellant. The services are availed by the appellant, who is a foreign based entity. This is to be considered as export of service - AT
  Visit to Get Source

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Central Excise

• Offence u/s 9 and 9(AA) of the Central Excise Act, 1944 - Since she did not hold the post of Managing Director at the relevant time, the complaint cannot reach a logical conclusion to hold the petitioner herein guilty on the ground that she was the Managing Director during the relevant period. - HC
  Visit to Get Source

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• Liability of interest on demand of duty - since the appellant were a sick company, the interest liability cannot be imposed on the appellant. - AT
  Visit to Get Source

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Case Laws:

• Income Tax

• 2018 (1) TMI 1189
  Revision u/s 263 - addition of commission - Held that:- Order without making enquiries on the issues in question is liable to be held as erroneous insofar as it is prejudicial to the interest of the Revenue. In the instant case, assessee has failed to produce any evidence of any enquiry carried out by the Assessing Officer on the issue of commission income or interest expenditure and, thus, in our opinion, the Ld. CIT has validly assumed jurisdiction under section 263 of the Act. As argued that on the issue of commission the Assessing Officer has examined the matter subsequently and in the assessment order passed in compliance to 263 proceedings, no addition has made and, therefore, to the extent the jurisdiction assumed by the Ld. CIT under Section 263, we are not convinced with this argument of the Ld. counsel. The validity of the assuming jurisdiction under Section 263 of the Act is decided whether the Assessing Officer carried out any enquiry on the issue in original assessment proceedings. If he did not carry out any enquiry in the original assessment order, that order is erroneous and prejudicial to the interest of the Revenue and the CIT has assumed the jurisdiction validly. The subsequent action of the Assessing Officer of making no addition after examination of the issue, cannot make the action of the Ld. CIT under Section 263 of the Act, invalid. - Decided against assessee.

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• 2018 (1) TMI 1188
  Adding the outstanding balance of creditor to the total income - Held that:- The assessee’s payment for whatever reasons got struck overseas for services rendered to Oil & Gas industry and in order to protect its interest and in consistent with MOU with its agent, it withheld the corresponding payment of commission payable to its agent as it has not realised its payments from customers whose business this agent Badar Al Safran generated as claimed by the assessee. It was incumbent on the learned AO as well learned CIT(A) to have gone into greater scrutiny and examination to disprove the contentions of the assessee and merely making bald statement is not sufficient. Assessee has also produced details of court cases at Kuwait and correspondences with its overseas buyers/agents w.r.t. its efforts for making recovery etc to justify that these payments are still due from the customers albeit the same was produced before the tribunal for the first time. Revenue has not brought on record any incriminating material to support its stand despite having sufficient opportunity to had made necessary enquiries and verification at level of AO as well learned CIT(A) whose powers are coterminous with that of the AO which unfortunately the Revenue did not do so while the assessee placed all the facts before the authorities below. We do not find any justification in sustaining/confirming additions made by the AO/CIT(A) under the factual matrix of the case which we hereby ordered to be deleted. Addition u/s 14A - Held that:- There is no evidence on record that the assessee has not received any exempt dividend income during relevant previous year as also the taxability of dividend income receivable from foreign company namely Pyramid Engineering & Consulting Limited , UK in which assessee has claimed to have invested is also required to be gone through as these aspects are not been gone through by the authorities below. It is settled principle of law that tax can only be levied by or under the authority of law which is also the mandate of the Constitution of India under Article 365. Merely acquiescence to pay tax on the income which is not subjected to tax under the provisions of law will not make that income chargeable to tax which is certainly not the mandate of law. Thus, this matter need to be set aside and restored to the file of the AO for de-novo determination of the issue on merits in accordance with the law.

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• 2018 (1) TMI 1187
  Disallowance of interest - non deduction of tds - Held that:- Section 40(a) (ia) covers not only the amount which are payable as on 31st March but also amounts payable at any time during the year. As an alternative plea, the appellant has submitted that under the provisions of section 194A, payment to a company carrying on the business of insurance is out of ambit of the provisions for deduction of tax as as perused that extract of the website as quoted by the appellant in the written submission. It is seen that as per the information given in the website Reliance Capital has interest in life and general insurance but that does not mean that it is indeed engaged in the business of insurance. As the appellant has failed to provide clear evidence to support its claim that Reliance Capital is involved in Insurance business, this argument of the appellant is not acceptable. AO has rightly invoked the provisions of section 40 (a) (ia) Disallowance of freight - Held that:- Though the AO has mentioned about the provisions of section 40(a)(i) but that is apparently a typographical error and he actually meant that the expenses are disallowable in view of provisions of section 40(a) (ia). In my opinion, inadvertent reference to wrong provisions would not make the disallowance bad in law as long as there is another provision which is actually applicable in the given facts. The appellant has not denied that tax was deductible on the payments made to the two companies u/s 194A. It has also not been denied that the tax was not deducted from such payments. When the tax was deductible and the same has not been deducted, it is obvious that in view of provisions of section 40(a)(ia), such expenses cannot be allowed. - Decided against assessee

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• Customs

• 2018 (1) TMI 1186
  Misdeclaration of imported goods - duty exemption entitlement certificate scheme (DEEC Scheme) - false and fabricated documents - Held that: - In the light of the provision of Kar Vivad Samadhan Scheme 1998 as well as the order passed by the Commissioner of Customs, the plea of the petitioner that by availing the benefit of Kar Vivad Samadhan Scheme 1998 will grant them immunity for all the prosecution under all enactment is unfound. It is to be pointed out that the trial Court had taken note of the immunity granted by the Customs Department and in view of the settlement arrived at, it pointed out that the amount levied under Kar Vivad Samadhan Scheme 1998 had been paid under protest and it has not been tendered unconditionally - the petition to discharge the accused is unsustainable - revision case disposed off.

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• 2018 (1) TMI 1185
  Suspension of CHA License - service of notice for cancellation - petitioner claims that although its License has been suspended, the respondent has not initiated further proceedings for its revocation - Time limitation - Regulation 20(1) of the CBLR - Held that: - In terms of Regulation 20(6) of the CBLR, the report of the Deputy Commissioner of Customs/Assistant Commissioner of Customs is required to be furnished to the Customs Broker requiring him to make a representation within a period of thirty days, thereafter - In terms of Regulation 20(7), the Commissioner of Customs is required to pass a final order within the period of ninety days of the receipt of the report of the Deputy Commissioner of Customs/Assistant Commissioner of Customs under Regulation 20(5) of CBLR. Thus, within a period of 270 (two hundered and seventy) days from the receipt of the offence report, the Commissioner of Customs has to pass an order either revoking the order of suspension or to revoke the License of the Customs Broker and/or impose a penalty as specified under Regulation 20(2) of the CBLR. A Custom Broker cannot carry on its business without a License and, therefore, revocation or suspension of such License has serious adverse consequences as it results in preventing the Customs Broker from carrying on its vocation. Given the serious nature of such action, strict timelines have been specified under Regulations 19 and 20 of the CBLR and the same must be adhered to. Petition allowed - decided in favor of petitioner.

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• 2018 (1) TMI 1184
  Authorization under EPCG Scheme and FTP - import of three Grab Type Ship Unloaders (GRSU) from Shanghai Zhenhua Heavy Industries Co. Ltd., China - application for exercise of power under paragraph-10 of notification No.16/2015 of Central Board of Excise and Customs dated 01.04.2015 - Held that: - The present writ petition has been came to be filed on various grounds stated in the writ petition. The customs authorities came to file counter-affidavit sworn to by Sri Jayanta Baidyamajumder, Assistant Commissioner under the Commissioner, Customs (Preventive), Bhubaneswar dated 25.10.2017 and further additional counter affidavit dated 04.12.2017 has came to be filed on behalf of customs pursuant to our direction issued on 27.11.2017 appending thereto certain communication made by the Commissioner, Customs(Preventive), Bhubaneswar with the Central Board of Excise and Customs.

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• 2018 (1) TMI 1183
  Valuation of imported goods - Poppy seeds - it was alleged that prices declared in the Public Ledger for poppy seeds during subject-period were abnormally higher than the declared price - contemporaneous imports - Held that: - The issue of reliance on subject price of the imported goods in the Country of Origin at the relevant time falls foul of the provisions of the Customs Valuation Rules, which bars determination of value on the basis of price of the goods in the domestic market of the country of export - also, the adjudication order travelled beyond the scope of show-cause notice - impugned order cannot sustain - appeal allowed.

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• 2018 (1) TMI 1182
  Classification of imported goods - 9.3 Meter Compact Cassegrain Antenna Sub-system - Model 9.3 KPK - whether the goods are 'antenna' or 'antenna sub-system’? - Held that: - Once it is established that the imported goods are not of a type used with apparatus for 'radio-telephony' and 'radio-telegraphy,' the benefit of Notification No.25/2005 will then not be applicable to such goods. The appellants' protestations on this score hence do not carry merit. Valuation of goods - Held that: - we do not find any infirmity in the adjudicating authority placing reliance on declared values in respect of identical import of the same goods, by appellant themselves, within a month of the import in the present case. Redemption fine - Penalty - Held that: - the goods have been confiscated after their clearance and when they were not physically available - confiscation set aside. Penalty u/s 112 (a) of CA - Held that: - the entire dispute relates to one of interpretation on the type of radio/broadcasting frequencies that can be handled by the imported goods - penalty cannot be sustained. Appeal disposed off.

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• Corporate Laws

• 2018 (1) TMI 1181
  Winding up petition - Held that:- Though the solvency of the company is not a standalone defense in the winding up proceedings, it is still a relevant criterion to be considered along with other factors which are in favor of the company. It is not the case that the Respondent Company has lost substratum or has become commercially insolvent. The Respondent had alleged breach of the agreement on the part of the Petitioner and raised its own claim. The Respondent had sought for restoration of the supply of power and is ready to comply with the conditions and deposited necessary amount. The Petitioner has sought to segregate the dispute and is calling upon the Court not to look into any other aspect of the matter, but only to focus only on one aspect , that is for some period there was supply for which there is no payment. The request of the Respondent for reconciliation of accounts has gone unheeded. The request of the Respondent to restart the power has not been acceded to, in spite of receiving the amount of ₹ 1 crore on 18 December 2013 and subsequently ₹ 3.25 crore in this Court. The Company Court cannot be oblivious to all these factors which go into the exercise of discretion. The Apex Court in the case of IBA Health (India) Private Limited [2010 (9) TMI 229 - SUPREME COURT OF INDIA] has held that the primary test that to be applied by the Company Court is see that the Respondent Company has "no good reason" to withhold the debt. It appears to me that the Petitioner is taking advantage of dominant position to engage in an arm-twisting tactic to try to recover a disputed amount. It cannot be said that the Respondent Company has no legitimate claim against the Petitioner. If this petition is admitted, it will have devastating effect on the Respondent Company, and will trigger various consequences and push the Respondent Company towards bankruptcy, which as of today is far from it. Considering the totality of the circumstances, Iit is of opinion that no case is made out for admission of the Company Petition.

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• 2018 (1) TMI 1180
  Winding up petition - Held that:- After going through the materials on record, this Court is convinced that no viable option is there for the revival of the Company. All efforts taken by the Company have been turned to be failure. The Managing Director of the Company, Sri. R. Hari, who was interested for the revival of the Company, is also now no more. No other effective schemes are before this Court. The matter has been pending before this Court for quite a long time. This Court is of the considered opinion that there is no other option for this Court but to order winding up of the Company. Accordingly, it is ordered that the above said Company be wound up in terms of the provisions contained in Section 20(2) of the SICA read with the enabling powers conferred on this Court in terms of the provisions contained in the Companies Act, 1956. Official Liquidator is appointed as the Liquidator for the winding up of the Company and the Official Liquidator shall take over all the assets and records of the company under liquidation, forthwith. The Canara Bank is directed to pay an amount of ₹ 20,000/- as initial expenses to the Official Liquidator within a period of three weeks from the date of receipt of a copy of this judgment. Since the Canara Bank was the monitoring agency appointed by the BIFR, it is also ordered that the Canara Bank will ensure that the winding up order is published in one issue of all Kerala editions of Kerala Kaumudi Malayalam Daily as well as in one issue of all Kerala editions and Madurai edition of the New Indian Express English Daily. The winding up order shall be drawn in Form No.52 of the Companies (Court) Rules 1959. Registry shall forward certified copies of this judgment as well as Form No.52 winding up order to the Registrar of Companies (Kerala) as well as to the Official Liquidator attached to this Court.

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• 2018 (1) TMI 1179
  Change of status of the Company from “Public Limited Company” to “Private Limited Company” - conversion by altering the Articles of Associations, as sought to be effected by a Special Resolution passed at the Extraordinary General Meeting (EOGM) - Held that:- Special Resolution for conversion was passed by the Board of Directors of the Company on 24.08.2017 and thereafter, at the EOGM held on 30.08.2017, 6 (Six) Directors and 7 (Seven) Members of the Company had attended and unanimously approved the conversion resolution. The Special Resolution passed at the EOGM held on 30.08.2017 has been filed by the Company on 22.09.2017 through e-form MGT-14. Company has not received any objection either from its members, unsecured creditors or from any persons with regard to the proposed status of the Company; and that all the seven Members of the Company attended the EOGM on 30.08.2017 and approved the Special Resolution passed at the said Meeting. Since all the requisite statutory compliances having been fulfilled, the conversion of the status of the Company from “Public Limited” to “Private Limited” as per Special Resolution passed at the EOGM on 30.08.2017 is hereby approved in the interest of the Company and such change of status of the Company shall not cause any prejudice either to the members or the creditors of the petitioner Company.

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• 2018 (1) TMI 1178
  Extension of time for repayment of deposits under Section 74 of the Companies Act, 2013 - Repayment of deposits, etc., accepted - Held that:- Having earned extension for such a long duration from the original period of maturity of fixed deposits and even getting the relief of reduced interest @ 8% per annum after the date of maturity, how can the company bring another excuse of its difficult financial position in stopping unilaterally the payments and then move application for extension of time. There should be some end to the period of extension having sought a large flexibility in making payments to the deposit holders. The losses which the company suffered in the past about five years have been given in the tabulated information in the chart filed with the registry on 23.08.2017. The loss before tax was ₹ 2385.06 lacs for year ending 30.06.2012 which has been constantly increasing from year to year and the figure of loss for the financial year ending 31.03.2017 came up to ₹ 36291.47 lacs. With this financial position, there seems to be no sincere effort at all on the part of the company in complying with the directions issued by the Company Law Board in the year 2013. With this affidavit, the audited Balance Sheets for the financial years 2015-16 and 2016-17 are also attached. For how much period, the depositors would keep suffering because of such kind of the excuses by the company without any fault of theirs. The depositors have been constantly urging on the implementation of the directions passed in the order of the year 2013 of the Company Law Board. Thus this application to be without merit and the same is dismissed. However, the company is directed to pay the arrears which remain pending till date to the depositors within a period of two months from the date of this order and keep on paying the rest of the amount strictly in terms of the order dated 30.09.2013 of the Company Law

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• Insolvency & Bankruptcy

• 2018 (1) TMI 1193
  Initiation of Corporate Insolvency Resolution Process - liberty to file a petition within 180 days after coming into force of Insolvency & Bankruptcy Code - Held that:- Since the petition filed under section 10 of IB Code is, in fact, a Reference, which was earlier pending before BIFR and when the IB Code came into force then on account of the amendment in SICA Repeal Act, 2003, petitioner was given liberty to file a petition within 180 days after coming into force of Insolvency & Bankruptcy Code. Undoubtedly IB Code 2016 came into effect w.e.f. 1st December, 2016, therefore petition under IB Code could have been filed only within 180 days. The fact of this case differs from the case of Leo Duct Engg. (2017 (6) TMI 1169 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI), and a petition has been filed beyond the statutory time limit of 180 days from the date of coming into force of Insolvency & Bankruptcy Code. Thus it is clear that the petition is not maintainable and deserves to be rejected. ORDER

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• 2018 (1) TMI 1192
  Seek extension of moratorium period of the Corporate Debtor beyond 180 days - Held that:- The object of granting moratorium period is to complete the resolution process but not to defeat the claims of the Operational Creditors and others under the guise of moratorium. Moreover, when the Code prescribes 180 days’ moratorium period, any application seeking extension of the period of 180 days must be filed by the Resolution Professional before the expiry of 180 days. But this application by the Resolution Professional was filed after the expiry of the moratorium period of 180 days. The contention of the applicant that the Committee of Creditors moved an application seeking extension of moratorium period before the expiry of 180 days is not a ground to entertain this application. The observation of this Adjudicating Authority that the Resolution Professional, after his appointment, can file application seeking extension of moratorium period will not absolve the Resolution Professional to seek extension of time before the expiry of the period of 180 days. This application seeking extension of moratorium period, having been filed beyond the period of 180 days, is not maintainable and this Adjudicating Authority is of the considered view that, even otherwise, there are no grounds to extend the period of moratorium. Hence, this application is dismissed.

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• 2018 (1) TMI 1191
  Corporate Insolvency Resolution Process - existence of debt - Held that:- It is settled law that in a Petition under Section 7 of the Code, this Adjudicating Authority has to see whether there is existence of financial debt and a default has been committed in payment of financial debt. On both the aspects, there is sufficient material on record. The finding is against the Corporate Debtor. Financial Creditor has filed copy of Power of Attorney; copies showing details of dates of disbursement and the amounts in respect of the Facilities; copies of various security documents creating/recording various security interests; copies of certificate of charges with respect to the securities created; copy of Valuation Report; copies of Financial Contracts and documents; copies of the Report of the Central Repository of Information on Large Credits and Report of TransUnion CIBIL dated August 31, 2017 and September, 2017; copies of entries in the bankers' book maintained by the Petitioner Bank as per the Bankers' Books Evidence Act, 1891; copies of Statement of Accounts; and copies of other documents proving existence of Financial Debt. The Petitioner Bank has proposed the name of an Interim Resolution Professional and filed his Written Communication. Moreover, this Petition filed by the Financial Creditor is complete in all respects. Therefore, there are no grounds to reject this petition. This Application deserves to be admitted and it is accordingly admitted under Section 7(5) of the Code.

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• 2018 (1) TMI 1190
  Corporate Insolvency Resolution Process - whether the Company petition is maintainable and it is eligible to be admitted or rejected as per section 9(5)(i) or 9(5)(ii) r/w Section 5(6) of IBC, 2016? - Held that:- Now, it is settled position of law that the Hon’ble Supreme Court especially, in Mobilox Innovations (P.) Ltd. [2017 (9) TMI 1270 - SUPREME COURT OF INDIA] has made clear the scope of dispute, default etc., as mentioned in IBC, 2016 so as to invoke jurisdiction of this Tribunal/Adjudicating Authority. The contention of the learned senior Counsel for the Operational Creditor that paying ₹ 2 Cr. amounting to settlement of the issue in question, is not at all tenable in view of reply given by the Corporate Debtor to Demand notice given by the Operational Creditor and appointment of third Arbitrator as stated supra. We have no doubt in our mind that there is a valid and legal dispute raised by the Corporate Debtor, and thus the case is liable to be rejected. In the light of above discussion of the case and law, by exercising the powers on the Adjudicating Authority, under section 9(5)(ii)(d) r/w Section 5(6) of IBC, 2016, we hereby rejected the Company Petition

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• Service Tax

• 2018 (1) TMI 1176
  100% EOU - Refund of unutilized CENVAT credit - denial on the ground that registration not done - N/N. 05/2006-CE(NT) dated 14.03.2006 - Held that: - reliance placed in the case of M/s.mPortal India Wireless Solutions Private Limited V. Commissioner of Service Tax, Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT], where it was held that Registration not compulsory for refund - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 1175
  Refund of service tax - export of service - arrangement involved in the transfer of money from a customer located abroad to an Indian recipient - Held that: - The tax liability of such services has been a subject matter of various decisions by the Tribunal. Dealing with one of the agents of the appellant engaged in transfer of money from abroad to a person in India, the Tribunal in the case of Wall Street Finance Ltd. [2014 (10) TMI 312 - CESTAT MUMBAI] has held that At the relevant time, there were no specific rules to determine the place of provision of service in service tax law. However, with effect from 20/06/2012 a specific Rule has been prescribed called Place of Provision of Service Rules, 2012. Though these Rules are only prospective in nature, the provisions of these Rules can be gainfully used to understand the concept of place of provision. In the present case, the Department of Post is rendering service to the appellant by executing the remittance of foreign exchange to the intended recipient in India. For this, they are receiving the considerations from the appellant. The services are availed by the appellant, who is a foreign based entity. This is to be considered as export of service as held by the Tribunal in various cases. Unjust Enrichment - Held that: - The Tribunal in Wienerberger Brick Industries Pvt. Ltd. [2014 (1) TMI 1151 - CESTAT BANGALORE] held that with reference to refund claims relating to export of services the principle of unjust enrichment would not be applicable as provided in Section 11 B of the Central Excise Act, 1994. - unjust enrichment will not apply. Refund allowed - appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 1174
  Classification of services - respondent had paid IPLC Charges to its parent company M/s CMG - the assessee classified under Lease Circuit Service whereas, the department was classifying the same under the Business Auxiliary Service - reverse charge mechanism - Section 66(A) of the Finance Act, 1994 - Held that: - the issue of taxability of IPLC service has been already decided by this Tribunal in the case of Infosys Ltd. [2014 (3) TMI 695 - CESTAT BANGALORE], where it was held that If the service has been rendered in USA or Canada received by the branch office of the appellant in USA or Canada and utilised by the branch office at USA or Canada and paid for out of the foreign exchange earned, unless the Revenue is able to show that the service has been received in India, or the benefit of service rendered abroad has been received in India, the tax, in our opinion, would not be payable - such services do not fall under the category of Business Auxiliary Services but falls under Telecommunication Service. Difference of Revenue between balance sheet and ST-3 - Held that: - the SCN has simply taken the difference between ST-3 Return and balance sheet and prepared a table without offering any explanation or basis as to how the demand had arisen for different periods and services. Demands appears to have been calculated the service tax in the SCN without doing any investigation or analysis of relevant documents or co-relation with the refunds taken by the respondent. Admittedly, the respondent are eligible for refund of the service tax on quarterly basis and turnover is certified by statutory auditors as has observed by the Ld. Commissioner - demand set aside. Management Consultancy Service - other expenses - includibility - Held that: - no findings have been given in respect of dropping of demand of ₹ 13,81,818/-, which was raised as part of total demand in show cause notice dated 29.03.2011. In the absence of clear findings on other expenses, the matters required to be remanded back to the adjudicating authority for passing a fresh order, after re-examining the demand of other expenses and management consultancy raised in show cause notices dated 19.10.2011 and 17.11.2011 - matter on remand. Appeal allowed in part and part matter on remand.

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• 2018 (1) TMI 1173
  Voluntary Compliance Entitlement Scheme - scope of SCN - Held that: - The discussions in the said order is only with regard to grounds on which the appellant is not eligible to be considered for the VCES scheme. The Commissioner (Appeals) has observed that since the show cause notice was issued for the period prior to the period covered under the scheme, would make the appellant ineligible to file a declaration under the scheme - rejection of VCES declaration filed by the appellant upheld - appeal dismissed.

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• 2018 (1) TMI 1172
  Classification of services - Advertising Agency Service - commission received from the publishers for the disputed period along with interest, if any - Held that: - the activities of the appellant would fall not under "Advertisement Agency Service" but only under "Business Auxiliary Service" - Impugned order to the extent that it confirms the demand of differential tax liability on services rendered on commission received for canvassing advertisements will not be sustainable since the said service will not be taxable under "Advertising Agency Service" and therefore since that has not been demanded under BAS, the entire proceedings to that extent will not sustain and therefore is set aside. Demand of interest on delayed payment upheld as the appellant is not contesting this interest liability. Appeal allowed in part.

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• 2018 (1) TMI 1171
  Labourers harvesting charges - Department took the view that these are services rendered by the assessee and are liable to service tax under the category of Man-power Recruitment or Supply Agency Services - Held that: - the amendments in the definition of the "services" as well as the taxable event in the Finance Act, 1994 relating to Man-power Recruitment Supply Agency Services and has come to the correct conclusion that service tax liability cannot be hoisted on the assessee for the impugned period - reliance placed in the case of Commissioner of Customs, Central Excise and Service Tax, Aurangabad Vs Shri Samarth Sevabhavi Trust [2015 (3) TMI 1170 - BOMBAY HIGH COURT], where it was held that the respondent's work, though provided services to the sugar factory, did not come within the mischief of the term “Manpower Recruitment or Supply Agency” - appeal dismissed - decided against Revenue.

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• Central Excise

• 2018 (1) TMI 1170
  Offence u/s 9 and 9(AA) of the Central Excise Act, 1944 - excise duty liability on asbestos cement sheets - petitioner was appointed as Managing Director of the said Company with effect from 24.06.2009 - Held that: - Under Section 9(AA) of the Act, the persons who would be deemed to be guilty of an offence by a company are such persons who at the time of commission of the offence was in-charge of and was responsible to the day-to-day affairs of the company and to the conduct of the business of the company can be proceeded with and punished - In the present case in hand, the complaint implicates the petitioner only in her capacity as a Managing Director. Since she did not hold the post of Managing Director at the relevant time, the complaint cannot reach a logical conclusion to hold the petitioner herein guilty on the ground that she was the Managing Director during the relevant period. The proceedings against the petitioner herein should not continue and she must not be made to face the rigor of a criminal trial - petition allowed.

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• 2018 (1) TMI 1169
  Principles of Unjust Enrichment - finalization of provisional assessment - Whether in the facts and circumstances of the case CESTAT is legally correct in holding that uniformity of price before and after the finalization of provisional assessment is sufficient to rebut the presumption that the incidence of duty has not passed on to the buyers especially when statutorily the onus is on the respondent/assessee to prove conclusively with evidences that bar of unjust enrichment would not act against his as envisaged in Section 11B of the Central Excise Act, 1944? Held that: - Though, Mr.A.P.Srinivas, learned counsel for the Commissioner of Central Excise, Coimbatore, once again reiterated the very same grounds, before this Court, going through the material on record, we are not inclined to accept the same, for the reason that both the Appellate Authority and the Tribunal, have analyzed the evidence and arrived at a categorical finding of the fact that, there was no passing of incident of duty to the customers and hence, the question of unjust enrichment, does not arise. Appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 1168
  CENVAT credit - dutiable product subsequently becoming exempted product - rule 6(1) of the CCR, 2002 - Held that: - the decision in the case of Principal Commissioner of Central Excise Versus M/s. TVS Electronics Ltd. [2017 (8) TMI 827 - MADRAS HIGH COURT] is squarely applicable to the facts of the case, where it was held that If credit can be taken against excise duty on a final product manufactured on the very day, it makes it abundantly clear that there need not be co-relation between the input and the goods cleared and as a result, validly taken credit need not be reversed - appeal dismissed - decided against Revenue.

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• 2018 (1) TMI 1167
  CENVAT credit - job-work - inputs on which Cenvat Credit had been availed by the Chopanki unit, which were used in the job work carried out by that unit for the Bhiwadi unit - Revenue is of the view that the Chopanki units is required to pay duty on such goods under Rule 3 (5) of the Cenvat Credit Rules - Held that: - similar issue had come up before the Tribunal in the against of DCM Engineering Products V/s CCE [2009 (8) TMI 545 - CESTAT, NEW DELHI] in which the Tribunal has held that when there is no physical removal of the cenvated inputs, there is no requirement to reverse the credit the credit under Rule 3 (5) ibid - the inputs in the Chopanki unit have been used to carry out job work for the Bhiwadi unit, and such goods have been further used by the Bhiwadi unit for manufacture of final products which have ultimately been cleared on payment of duty. Consequently, there is no justification in raising the demand against the Chopanki unit. CENVAT credit - duty paying documents - stock transfer - Revenue has raised such demand by invoking Rule 9(1) (b) of the CCR 2004, on the ground that this credit had been taken by the Bhiwadi unit on the basis of supplementary invoices issued by the Chopanki unit - Held that: - similar issue had come up before the Hon’ble Karnatka High Court in the case of Karnataka Soaps and Detergents [2010 (2) TMI 524 - KARNATAKA HIGH COURT], where it was held that the provisions of Rule 9(1)(b) are not applicable in case of stock transferred when there is no sale - demand for reversal set aside. CENVAT credit - demand for reversal against the Bhiwadi unit on the ground that this credit has been taken by that unit on the basis of certain invoices covering use of the cenvated inputs by Chopanki unit in job work for Bhiwadi unit - Revenue is seeking to reverse such credit at the Bhiwadi unit by taking the view that the Chopanki unit was not required to pay any duty - Held that: - It is settled position of law that the assessee who is taking the Cenvat credit is entitled to do so once the duty has been paid and goods received even if the duty on the product at the suppliers end is subsequently varied - there is no justification to demand reversal in this case. Appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 1166
  Benefit of N/N. 67/1995 - clearance to SEZ - deemed exports - The department was of the view that as the final products are cleared without payment of duty, the appellants are not eligible for the benefit of exemption of duty under N/N. 67/1995 for the reason that the said notification does not specify clearances made to SEZ - whether the appellants are eligible for exemption under N/N. 67/1995, when the final products are cleared to SEZ? - Held that: - The clause (1) in the above notification has been amended by N/N. 25/2016-CE dated 14.06.2016, whereby the words Free Trade Zone has been substituted by the words Special Economic Zone. The amendment has been made by way of substitution - The decision in the case of Lotus Power Gears Pvt. Ltd. [2016 (6) TMI 998 - KARNATAKA HIGH COURT] has held that the amendment brought by way substitution would take effect retrospectively. The Tribunal in the case of Ultratech Cements Ltd. [2015 (10) TMI 1058 - CESTAT CHENNAI] had occasion to consider the very same issue and observed that the benefit of notification cannot be denied for the reason that the finished goods are cleared to SEZ. Appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 1165
  Refund of CENVAT credit - inputs/packing materials - manufacture of peanut butter - N/N. 3/2006-Central Excise dated 1.3.2006 - Held that: - This Tribunal in similar circumstances in the case of M/s. Bajaj Food Ltd. Versus CCE, Ahmedabad [2013 (11) TMI 1122 - CESTAT AHMEDABAD] considered the plea of the Appellant for cash refund of the accumulated credit availed on export of finished products against claim of rebate and held that since credit on input is not admissible, accordingly cash refund is also not admissible. The Appellant-Assessee had reversed the credit of ₹ 21,15,123/- and it is not clear whether they had reversed the credit of ₹ 8,40,407/-. Therefore, to ascertain reversal of the same amount which they are required to reverse being disallowed by the ld. Commissioner (Appeals), the matter needs to be remanded to the adjudicating authority for the purpose of verification - appeal allowed by way of remand.

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• 2018 (1) TMI 1164
  Remission of duty - requirements of notice and personal hearing - Rule 21 of Central Excise Rules, 2002 - principles of natural justice - Held that: - the appellant have intimated the Department for the fire on 07.05.2012 within 6 days of the fire. The fact of the fire is not disputed by both the parties - also, necessary documents and the declaration were submitted to the Department by the appellant. The necessary documents were submitted by the appellant on 17.04.2013 and 22.04.2014. The declaration was contained in the claim filed by the appellant at Sr. No. 9. There has been clear violation of natural justice because there was no SCN, nor the appellant were given any opportunity of personal hearing at any stage by the adjudicating authority and the impugned order has been passed without reference to them - the matter requires to be remanded back to the adjudicating authority for fresh adjudication - appeal allowed by way of remand.

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• 2018 (1) TMI 1163
  Valuation - sister concern/related person - Revenue felt that the capital goods sold to sister concern/related person should be assessed on the depreciated value - Held that: - the Ld. Commissioner (Appeals) has dismissed the appeal of the appellants by one line finding that there is a direct relationship between all the three directors of the appellant s company. There is no other finding as to how relationship has affected the value or whether there is mutuality of interest in the business, which has affected the value. In the absence of any evidence showing mutuality of interest the fact that the Directors of the appellant firm are related to each other or the Director of the appellant firm is the proprietor of the other firm is not sufficient basis to conclude that the value has been affected in any way by the relationship. Appeal allowed - decided in favor of appellant.

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• 2018 (1) TMI 1162
  Valuation - job-work - place of removal - Revenue felt that since the appellant were transferring the goods to the sale depots of the principal manufacturer, the assessable value should be done in terms of Section 4(1) (b) instead of Section 4(1) (a) - Held that: - similar issue decided in the case of AUDI AUTOMOBILES Versus COMMISSIONER OF CENTRAL EXCISE, INDORE [2009 (5) TMI 426 - CESTAT, NEW DELHI], where it was held that it is apparent that the said firms had cleared the goods in relation to the body fabricating and mounting on the chassis which were supplied to the said firms free of cost by the manufacturer of chassis. Being so, the activity for the purpose of valuation would squarely fall under Rule 10A and not under Rule 6 - the valuation of the goods is required to be done under Rule 10A of the Valuation Rules 2000. Adjustment of excess duty paid or less duty paid as compared to depot price - Held that: - since the goods have not been assessed provisionally at the time of clearance from the factory of the assessee, adjustment of duty paid in excess, if any, cannot be adjusted against the duty demand recoverable from the assessee - duty demand not sustainable. Valuation - allowability - certain discounts and cum duty price vs. net assessable value - Held that: - the matter is remanded back to the adjudicating authority for verification of documentary evidence produced by the appellant and to establish the correct assessable value and to re-quantify the demand and interest, if the contention of the appellant is found correct. Appeal disposed off by way of remand.

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• 2018 (1) TMI 1161
  Valuation - processing of Cotton Fabrics and Man-Made Knitted Fabrics - annual capacity based production - inclusion or exclusion of length of gallery/closed while re-determining the Annual Capacity Production - Held that: - The contention of the appellant that the determination of actual production was done as per their statutory right under sub-section (4) of Section 3A and not in terms of option exercised by them is complete misreading of clauses of Section 3A and aforesaid notification. The said notification has been issued under sub-section (3) of Section 3A to specify the rate of duty. Accordingly, the rates of duty have been specified. The notification envisages two situations wherein the processor who wants to retain option of re-determination of duty or forgoes the re-determination of duty payable on the basis of actual production. Hence, the notification is to be read in conjunction along with Section 3A and not in competition with any sub-section of 3A. Since the appellant vide their declaration dt.3.4.2000 had retained their option for re-determination of duty payable on the basis of actual production, the adjudicating authority has correctly upheld the demand - demand of duty upheld. Liability of interest - appellant were a sick company under BIFR - Held that: - since the appellant were a sick company, the interest liability cannot be imposed on the appellant. Appeal allowed in part.

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• CST, VAT & Sales Tax

• 2018 (1) TMI 1160
  Grant of anticipatory bail - offence punishable u/s 85(2)(C) of the GVAT Act, 2003 - Held that: - the applicant has already presented himself before the Investigating Agency on 17.01.2018 and is ready and willing to do so on any subsequent date and any future dates, as directed by the said Agency. The applicant is ready to cooperate with the Investigating Agency and provide further documents, if available with him - as the applicant is already cooperating with the Investigating Agency, this Court considers it appropriate to grant the prayers made in the application - Bail application allowed.

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• Indian Laws

• 2018 (1) TMI 1177
  Boundary of States - The Surveyor General of India and his team of officers will coordinate with the Chief Secretary of Karnataka and the Chief Secretary of Andhra Pradesh in determining the boundary between the States of Karnataka and Andhra Pradesh.

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