Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 6, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
Articles
News
Notifications
Customs
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02/2018 - dated
5-1-2018
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Cus (NT)
Amendment to notification no. 12/97-Customs (NT) dated 2nd April, 1997
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01/2018 - dated
4-1-2018
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Cus (NT)
Exchange Rates Notification No.1/2018-Custom(NT) dated 4.1.2018
GST - States
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S.O. 6 - dated
2-1-2018
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Bihar SGST
The Bihar Goods and Services Tax (Twelfth Amendment) Rules, 2018.
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S.O. 308 - dated
21-12-2017
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Bihar SGST
The Bihar Goods and Services Tax (Eleventh Amendment) Rules, 2017.
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F-10-94 /2017/CT/V (173)-40/2017-State Tax (Rate) - dated
15-11-2017
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Chhattisgarh SGST
Exempts the intra-State supply of taxable goods amount calculated at the rate of 0.05 per cent.
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F-10-91/2017/CT/V (162)-47/2017-State Tax (Rate) - dated
14-11-2017
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Chhattisgarh SGST
Amendments in the Notification No. 12/2017-State Tax (Rate), No. F-10-43/2017/CT/V (80), dated the 28th June, 2017.
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F-10-91/2017/CT/V (161)-46/2017-State Tax (Rate) - dated
14-11-2017
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Chhattisgarh SGST
Amendments in the Notification No. 11/2017- State Tax (Rate), No. F-10- 43/2017/CT/V (79) dated 28th June, 2017.
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F-10-90/2017/CT/V (160)-30/2017-State Tax (Rate) - dated
8-11-2017
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Chhattisgarh SGST
Amendments in the Notification No. 12/2017-State Tax (Rate) notification No. F-10-43/2017/CT/V (80), dated the 28th June, 2017.
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F-10-89/2017/CT/V (158)-51/2017-State Tax - dated
28-10-2017
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Chhattisgarh SGST
The Chhattisgarh Goods and Services Tax (Tenth Amendment) Rules, 2017.
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F-10-86 /2017/CT/V (152)-39/2017-State Tax (Rate) - dated
18-10-2017
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Chhattisgarh SGST
Recommendations of the Council, hereby notifies the State tax rate of 2.5 per cent on Intra-State supplies of goods.
Indian Laws
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F. No.F.4(28)-B(W&M)/2017 - S.O. 44 (E) - dated
3-1-2018
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Indian Law
Government of India notifies the issue of 7.75% Savings (Taxable) Bonds, 2018 (“the Bonds”) from January 10, 2018
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F. No. 4(23)-B(W&M)/2017 - S.O. 29(E) - dated
2-1-2018
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Indian Law
Electoral Bond Scheme, 2018
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Clarifications regarding levy of GST on accommodation services, betting and gambling in casinos, horse racing, admission to cinema, homestays, printing, legal services etc. – Reg. - CGST - Circular
Income Tax
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Income-Tax Deduction from Salaries During the Financial Year 2017-18 Under Section 192 of the Income-Tax Act, 1961 - Circular
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Penalty proceedings initiated u/s 271(1)(c) is void ab initio and liable to be quashed as the AO has issued vague notice u/s 274 r.w.s. 271(1)(c) without striking off of irrelevant portion of notice which is a clear case of non application of mind by the AO before initiation of penalty proceedings. - AT
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Penalty u/s 271(1)(c) - on account of survey, if the assessee has offered additional income, it cannot be a ground to impose penalty under section 271(1)(c) unless Assessing Officer is able to strictly proved that the income offered by the assessee is either concealed or filed in accurate particulars of income - AT
Customs
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Whether amendment in the Bills of Entry can be allowed even when the Certificate of Origin was issued at a later date retrospectively and was not available at the time of clearance of the Bills of Entry in contravention of the section 149 of the Customs Act 1962? - The stipulation of Section 149 of the Act or any other provisions incorporated under the Act or the Rules for compliance of duty payment may not stand in the way of the assessee to claim exemption under Section 25 of the Act. - HC
FEMA
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Master Direction – Foreign Investment in India - Master Direction
Corporate Law
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The Companies (Amendment) Act, 2017
Service Tax
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Export of services or not - the contention that clause (3) of the Export Rules will come into operation, in our considered opinion, the language used wholly or subsidiary company having branch in India will not disentitle the assessee from benefit, therefore, he is not required to make payment of tax and he will be entitled for exemption. - HC
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Rent-a-cab services provided to corporate clients - services provided by the noticee being transportation of passenger from one point to another against specific call/request rather than to make available the vehicle for a particular time span, where possession and control of vehicle always lie with the noticee or driver, cannot be taxed under “rent-a-cab service’ by no stretch of imagination irrespective of charges per trip are fixed amount instead of per KM basis - AT
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Transfer of use of the logo - Royalty income - Intellectual Property Right Service - The logo being registered as a copyright, in case of infringement of the same, the right falls within the Copyright Act - Demand of service tax set aside - AT
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Airlines business - classification - activities of CRS Companies would fall under the category of "online information and database access or retrieval service" - SC dismissed the appeal of the assessee
Central Excise
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Classification of food preparations, namely, wheat flour, rice flour, corn crunch, rice crunch, etc. - Whether the goods in question are classifiable under chapter heading 1901.11 or under chapter heading 1901.19 or not? - Difference of opinion on merit i.e. issue of classification but concurrent decision on the issue of period of limitation while setting aside the demand. - AT
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Whether the Tribunal was correct in allowing the appeals of the assessee, solely by holding that there is no sufficient corroborative evidence to statement tendered by partner of assessee, (para 6.3), even when statement tendered by Central Excise Officer is admissible before court of law as piece of evidence? - Held Yes - HC
Case Laws:
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Income Tax
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2018 (1) TMI 246
Set off of unabsorbed depreciation pertaining to A.Y. 1997-98 against the income of A.Y. 2007-08 which is beyond eight years immediately succeeding the year for which the depreciation allowance was first computed - Held that:- Taking into consideration the amendment which came into force w.e.f. 01.04.2002, in our considered opinion w.e.f. 01.04.2002 the depreciation cannot be claimed. In that view of the matter, the contention that, 1997- 98, 7 years has not lapsed in year 2002 when it came into force. In that view of the matter, issue is required to be answered in favour of assessee against the department.
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2018 (1) TMI 245
Validity of assessment u/s 153A - Held that:- No addition can be made in the case of the assessee on the basis of documents being found from the premises of the third party where neither the name of the assessee nor the fact that the assessee has paid any cash of ₹ 7,60,00,000/-. Even otherwise also it is an undisputed fact that the said documents P23 and P26 on the basis of which the Assessing Officer has made the addition in the case of the assessee were found during the course of the search conducted at the premises of Ashray Premises Pvt. Ltd. Since these documents have been found during the course of search conducted in the case of Ashray Premises Pvt. Ltd., if the Assessing Officer wanted to make addition, the assessment should have been completed in the case of the assessee only u/s. 153C r.w.s. 143(3). No assessment has been completed u/s. 153 r.w.s. 143(3) neither any satisfaction that these documents belong to the assessee was brought on record by the Assessing Officer of Ashray Premises Pvt. Ltd. Therefore, on this basis also the addition made in the case of the assessee cannot be sustained. See Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015 (5) TMI 656 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2018 (1) TMI 244
Addition on account of commission expenses paid to Directors - Held that:- Since, the commission to the Managing Director was payable by the assessee company on the profits and the profits for the financial year 2009-10 was determined only in the year under consideration after finalizing the account. The allowability on account of commission was crystallized in the year under consideration and the Ld. CIT(A) in our opinion was fully justified in allowing the same. We do not find any infirmity in the order of Ld. CIT(A) on the issue and upholding the same. We dismiss the ground no.1 of the Revenue appeal. Disallowance u/s 40(a)(ia) - payments made to foreign shipping lines without deduction of tax at source - Held that:- As clarified by the CBDT vide its circular No. 723 dated 19.09.1995 (copy at page no. 11 of the paper book), the provisions of section 172 are applicable in the case of Foreign Shipping Companies notwithstanding anything contained in the other provisions of the Act and therefore, the provision of Section 194C and 195 relating to tax deduction at source are not applicable in such cases. As further clarified by the CBDT, where payments are made to shipping agents of non-resident shipping owners for carriage of passengers etc. shipped at a port in India, the agents step into the shoes of the principal and accordingly the provision of section 172 shall apply and not the provisions of Section 194 and 195. The issue in the present case relating to the disallowance u/s 40(a)(ia) thus is squarely covered by the CBDT Circular No. 723 dated 19.09.1995 and even the Ld. DR has not been able to dispute this position. We therefore, find no infirmity in the impugned order of the Ld. CIT(A) deleting the disallowance made by the AO u/s 40(a)(ia) by relying on the said circular issued by the CBDT and upholding the same, we dismiss the ground no. 2 of the Revenue appeal. Addition on account of bad debts written off - AO held that it was a back dated entry made by the assessee company in its books of accounts and the actual decision to write off the bad debts having been taken only in the previous relevant Assessment year 2012-13 - Held that:- The relevant bad debts were written off by the assessee company in its books of accounts of the year under consideration and his position was not disputed by the AO although the relevant entry was done by him as a back dated entry. As per the relevant provisions contended section 36(1)(vii) the condition stipulated for the allowability of deduction on account of bad debts written off is that the relevant bad debts should be written off as irrecoverable in the account of the assessee for the previous year and in our opinion, this condition having been fulfilled by the assessee company, it was entitled for deduction on account of bad debts written off as rightly held by the Ld. CIT(A). We therefore, find no infirmity in the order of Ld. CIT(A) giving relief to the assessee on this issue and upheld the same. We dismiss the ground no. 3 of the revenue appeal. Disallowance of assessee’s claim made during the assessment proceedings without filing revised return - claim u/s 41 - Held that:- the position of law as explained and clarified by the Hon'ble Supreme Court in the case of Goetz (India) Limited [2006 (3) TMI 75 - SUPREME Court] is clear that the appellate authorities such as the Ld. CIT(A) is sufficiently empowered to entertain and consider the new claim made by the assessee on merits even without there being any revised return filed by the assessee making such claim. At the time of hearing before us the Ld. DR has also not disputed on this position. He has not raised any arguments on merit on this issue. As the AO himself in the assessment order had accepted the claim of the assessee on merit and the same was disallowed by him only for want of revised return. No infirmity in the impugned order of the Ld. CIT(A) giving relief to the assessee on this issue and upholding the same. We dismiss the ground no. 4 of the revenue appeal.
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2018 (1) TMI 243
Disallowance on contribution to Staff Welfare Fund - CIT-A allowed the claim - Held that:- On identical facts this tribunal has already taken a view in assessee’s own case for A.Y.2003-04 and held that the contribution towards staff welfare fund was based on a resolution of the board of directors of the assessee held on 05.12.1979 and by virtue of that resolution an over riding title on the service charges received and consequently there was a diversion of income by over riding title at source on the service charges received by the assessee. The CIT(A) has followed the order of ITAT on identical facts - Decided against revenue CIT(A) directing the A.O. to verify the claim of the assessee in respect of a carry forward of losses as unabsorbed depreciation, Business loss and Dividend income as exempt income u/s 10(34) - plea of the revenue in ground no.2 that the CIT(A) u/s 251 of the Act does not have the power to set aside an issue to the AO and therefore his order is not in accordance with law - Held that:- The contention raised on behalf of the revenue is correct but nevertheless we are of the view that the issue requires examination by the AI and in the circumstances we direct the AO to verify the claim of the assessee and if found correct give appropriate relief. Thus ground no.2 is treated as allowed.
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2018 (1) TMI 242
Disallowance of loss - loss suffered due to brazen embezzlement during the course of share trading business by the errant officials of Religare Securities Ltd - Held that:- As perused the award dated 10.06.2008 filed by the assessee it appears that the claim of the assessee against M/s. Religare Securities Ltd was that they had incurred a loss in the matter of trading on behalf of the assessee in future and option segment and that because of the negligence in not taking proper position in future and option segment of buying and selling securities, the loss has occurred. The plea of M/s. Religare Securities Ltd was that the assessee did not give proper instructions of taking position in future and option segment and therefore he cannot disown the loss. M/s. Religare Securities Ltd had not disputed the quantum of loss as of ₹ 15,76,022/-. The arbitrator ultimately found no substance in the claim of the assessee and dismissed the claim of the assessee against M/s. Religare Securities Ltd. This evidence is sufficient to prove the claim of the assessee that he had incurred a loss of ₹ 15,76,022/-. The loss is directed to be allowed as deduction. Ground no.1 is allowed. Addition on account of interest on IL & FS for margin funding in Future and Option Trading of Share - Held that:- The assessee claims that interest need not be capitalized as cost of investment . Therefore the claim for allowing as revenue expenditure ought to have been allowed by the Revenue authorities. Therefore direct the AO to allow the claim of the assessee. However it is made clear that the assessee cannot claim this interest as cost of investment in future. The assessee has made a statement across the bar that the assessee undertakes not to make such a claim. Ground No.2 is accordingly allowed.
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2018 (1) TMI 241
Revision u/s 263 - Exemption u/s 10(2A) denial - Held that:- We are of the view that where an enquiry is conducted by the AO and he is satisfied with a reply given on a query raised, then the CIT cannot intervene through revision for coming to a conclusion that the assessment order passed by the AO was erroneous and prejudicial to the interests of the Revenue for lack of or inadequate enquiry. The CIT in the impugned order has merely pointed out that the Assessee has claimed exemption u/s.10(2A) on a sum of ₹ 4,84,89,051 as his share of profits from the firm whereas the firm has declared total income of only ₹ 3,88,780/-. This aspect is clear from the records produced by the Assessee before the AO. The AO has mentioned in the order that all issues and documents were perused and discussed with the AR. The CIT on examination of the Assessment records has invoked his powers u/s.263 of the Act. He has not spelt out in the impugned order as to what was the kind of enquiry that the AO ought to have made and which he failed to make. In the decision of the Hon’ble Bombay High Court in the case of CIT Vs. Gabriel (1993 (4) TMI 55 - BOMBAY High Court) has been laid down that the consideration of the Commissioner as to whether an order is erroneous insofar as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. The above decision is applicable to the facts of the present case. We therefore hold that orders u/s.263 of the Act cannot be sustained as the conditions for exercise of jurisdiction under the said provisions are absent in the present case. We therefore quash the impugned orders u/s.263 of the Act - Decided in favour of assessee.
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2018 (1) TMI 240
Addition on account of notional interest due to delayed recovery of trade debts from AE - Held that:- First ground of appeal in favour of the assessee , as there is ‘uniformity in the act of the assessee in not charging interest from both AE and Non-AE debtors for delayed realisation of export proceeds. Calculation u/s. 10AA - Held that:- We find that interest on electricity deposit(Rs. 18, 568/-)was on account of security deposited placed for availing electricity connection for its manufacturing unit and therefore, in our opinion, it was eligible for the purpose of calculation u/s. 10AA of the Act. The details filed by the assessee clearly prove that assaying· income(Rs. 5, 73, 575/-)was on account of verifying the characteristics of gold, that refining income(Rs. 3, 200/-)arose out of refining gold and ₹ 42, 000/-were received on sale of residual dust. We hold that income arising out the above referred three activities is directly related to manufacturing and therefore, it is eligible for the purpose of calculation u/s. 10AA of the Act. Considering the peculiar facts of the case under appeal, we are deciding ground in favour of the assessee.
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2018 (1) TMI 239
TPA - rejection of the comparables selected by the assessee in its TP study report - Held that:- As referring to investment advisory services rendered to its AE the comparables functionally dissimilar with that of assessee need to be deselected from final list.
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2018 (1) TMI 238
TPA - comparable selection criteria - Held that:- Assessee's services fall under the ambit of IT enabled services (ITes), which are rendered to its AE as an independent contractor and for which it is compensated on the cost plus markup basis of 15%, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2018 (1) TMI 237
Revision u/s 263 - assessment was completed without making proper inquiry as to the correct quantum of capital gains and correct hands in which it was chargeable - Held that:- It was stated by the appellant that property was purchased from joint family funds under an agreement dated 03.07.1980 for ₹ 64,750/- from Manjulaben D/o. Maganlal Narayandas and even possession was also taken. Therefore, the cost of acquisition of the said property should be taken at its FMV as on 01.04.1981 at ₹ 1,50,000/- and indexation should be done accordingly. The appellant had also claimed by way of cost of improvement ₹ 3,25,000/- jointly incurred by the family members towards removal of slum and hutments on this land during 01.04.1989 to 31.03.1991. On the other hand CIT has stated that the said property was purchased on 06.07.1999 as stated in the sale deed so that the title was acquired on 06.07.1999 and indexation was to be made on the basis of F.Y. 1999-2000 by taking the cost of acquisition at ₹ 50,000/-. We set aside the order of the ld. CIT and remit this matter back to the file of the AO to examine whether appellant was in possession of property on 03/07/1980 or was not. The appellant is also directed to file the relevant documents in support of his contention before the AO and thereafter, matter will be decided by the AO as per law. - Decided in favour of assessee.
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2018 (1) TMI 236
Penalty u/s 271(1)(c) - disallowance of reimbursement of selling and distribution expenses on the ground that the assessee has concealed particulars of income and also furnished inaccurate particulars of income - striking off of irrelevant portion of notice - Held that:- AO levied the penalty on both the charges, i.e. for concealing the particulars of income and furnishing inaccurate particulars of income. Right from the assessment stages to levy of penalty, the AO has initiated penalty on both charges which is not the case as per the provisions of section 271(1)(c) as the two charges, i.e. concealment of particulars of income or furnishing of inaccurate particulars of income are two different connotations. The issue of notice u/s 274 r.w.s. 271(1)(c) goes to the root of the matter of assuming jurisdiction to levy penalty u/s 271(1)(c), therefore, before issuance of notice, the AO has to arrive at a satisfaction as to whether penalty proceedings are initiated for concealment of particulars of income or furnishing of inaccurate particulars of income. The AO cannot take both the charges for levying penalty by stating that the assessee has concealed particulars of income and also furnished inaccurate particulars of income. We are of the considered view that penalty proceedings initiated u/s 271(1)(c) is void ab initio and liable to be quashed as the AO has issued vague notice u/s 274 r.w.s. 271(1)(c) without striking off of irrelevant portion of notice which is a clear case of non application of mind by the AO before initiation of penalty proceedings. We further notice that from the assessment stage to levy of penalty, the AO has initiated penalty on both charges, i.e. concealment of particulars of income and also furnishing of inaccurate particulars of income which is not so in the case of penalty u/s 271(1)(c) of the Act. Therefore, we are of the considered view that the penalty proceedings initiated by the AO is bad in law and hence, we quash the penalty proceedings and delete the penalty levied u/s 271(1)(c) of the Act. - Decided in favour of assessee
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2018 (1) TMI 235
Administrative expenses disallowance - business of the company was not set up during the year under consideration - Held that:- We find that during the impugned assessment year, assessee has not recognized any revenue as income for the year. He however claimed substantial amount of expenditure under different heads. Certain expenditures were allowed by the CIT(A) in order to keep the company alive but other administrative expenses claimed by the assessee were disallowed as no evidences were filed. Having carefully examined the order of the CIT(A), find that CIT(A) has adjudicated the issue in detail in his order. - Decided against assessee.
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2018 (1) TMI 234
Addition of bogus purchases - Held that:- The co-ordinate bench has already taken a view on identical additions made in the assessee’s own case in the other years, wherein the addition was confirmed to the extent of 12.50% of the value of purchases. Since there is no change in facts, we are inclined to follow the same. Accordingly we set aside the order passed by Ld CIT(A) and direct the AO to restrict the addition to 12.50% of the value of bogus purchases. Appeal of the assessee is partly allowed.
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2018 (1) TMI 233
Revision u/s 263 - Treating interest income under the head ‘business income’ and setting of losses of earlier years - Held that:- Tribunal considered the facts along with the treatment given in the assessment order and the observation made by the Ld. Commissioner. The Tribunal also considered the reply of the assessee with its basic objectives along with other facts and that too in the light of various judicial pronouncements including from Hon'ble Apex Court and from Hon'ble various High Courts and thereafter held that the interest income earned from fixed deposits with the bank and held that the Assessing Officer framed the assessment with application of mind. Commissioner of Income Tax (Appeal) directed the Assessing Officer to follow the order of the Tribunal in which, we find no infirmity. Thus, we find no merit in the appeal of the Revenue. Even otherwise, the subordinate authorities are expected to follow the directions of the high forum unless and until contrary facts are brought to the notice. We affirm the order of the Ld. Commissioner of Income Tax (Appeal), resulting into dismissal of appeal of the Revenue.
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2018 (1) TMI 232
Reopening of assessment - date of issue of notice u/s 148 - Held that:- Since the order sheet of the assessment record, the despatch register clearly shows that the date of issue of notice was 31.03.2013, we hold that the notice u/s 148 was issued on 31.03.2013. Since the assessment is reopened within 4 years from the end of the relevant assessment year, the assessing officer has rightly reopened the assessment with the approval of the Addl. Commissioner of Income Tax. Therefore, we set aside the order of the Ld. CIT on this issue and allow the appeal of the revenue. Revenue's appeal on this issue is allowed. Change of opinion - Held that:- On verification of the assessment order passed u/s 143(3) dated 24.10.2010, there is no whisper with regard to non submission of any of the details called for by the assessing officer. Therefore, there is no failure on the part of the assessee w.r.t. submission of the details and having submitted the details by the assessee, it is presumed that the assessing officer has verified the same and completed the assessment. There is no other fresh material available to the assessing officer. Since the assessee has furnished the details, and the assessing officer has reopened the assessment, on the basis of same information which was already examined by him and completed the assessment u/s 143(3), reexamination of the same material would amount to revision of the same issue and change of opinion. It is settled issue that to reopen the completed assessment, tangible material is required. If no new information is available to the assessing officer, assessments already completed cannot be reopened merely because of suspicion or surmises. Therefore, we agree with the Ld.CIT(A) that the assessment is reopened on mere change of opinion but not on any fresh information and there is no tangible material available to the department. Accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue on this ground. - Decided against revenue
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2018 (1) TMI 231
MAT computation - Reserve for unexpired risk created as per requirement by law not to be added in computing book profit u/s. 115JB of the Act - Held that:- We find that the issue in hand is squarely covered by the order in assessee’s own case [2016 (8) TMI 326 - ITAT KOLKATA], which has rightly pointed out by the ld.AR of the assessee, wherein the Tribunal had held that reserve created for unexpired risk need not be added back for the purpose of computation of book profit u/s. 115JB. Addition being investment written off - Held that:- CIT-A was justified in holding that a sum being investment written off is an allowable deduction. Amortization of premium paid on investment - Held that:- We find that this Tribunal in assessee’s own case supra deleted the said disallowance on the ground that the CIT-A has given relief to assessee by placing his reliance on the decisions of the Hon’ble Supreme Court in the cases of General Insurance Corporation of India Vs. CIT reported in (1999 (9) TMI 3 - SUPREME Court) and CIT Vs. Oriental Fire & General Insurance Co. Ltd reported in (2007 (5) TMI 193 - SUPREME Court), wherein it was held that the AO had no general power to make any adjustment in the accounts of a general insurance company. We further find that the revenue was not able to controvert the detailed findings of the CIT-A. - Revenue appeal dismissed.
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2018 (1) TMI 230
Penalty u/s 271(1)(c) - addition towards interest income - assessee offering additional income in survey - Held that:- In the present case, the assessee has given detailed explanation before the Assessing Officer and offered additional income and the same is accepted. It is not the case of the Assessing Officer that the explanation given by the assessee is neither false nor bonafide. Therefore, in our opinion, the assessee has discharged burden cast upon him and if at all the Assessing Officer is not agreed with the explanation given by the assessee, he has to make a positive enquiry in respect of additional income offered by the assessee and has to give a finding that the additional income offered by the assessee is a concealed income or furnished in accurate particulars of income. In the present case, in the penal proceedings, the Assessing Officer has not made any such enquiry and no such finding has been given. Thus on account of survey, if the assessee has offered additional income, it cannot be a ground to impose penalty under section 271(1)(c) unless Assessing Officer is able to strictly proved that the income offered by the assessee is either concealed or filed in accurate particulars of income, otherwise section 271(1)(c) cannot be imposed. - Decided in favour of assessee.
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Customs
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2018 (1) TMI 228
Maintainability of petition - statutory alternative remedy of appeal - Section 9-C of the Customs Tariff Act, 1975 - imposition of anti circumvention duty - interpretation of statute - Held that: - sub-section (1A) to Section 9A of the Tariff Act permits imposition of anti-circumvention duty also when imports take place into India in any other manner, whereby, the anti dumping duty so imposed is rendered ineffective - Review provided under Article 226 of the Constitution is an extraordinary remedy and the High Courts do not, as a matter of discretion, entertain Writ Petitions when an equally efficacious remedy is available. This principle applies especially when a machinery is created by the Statute to remedy and correct any wrong, when a right or liability is created by the same Statute, which also gives special remedy by way of appeal. The appellate remedy should not normally, and as a routine, be circumvented and bypassed. The aforesaid principle or rule is a self-imposed restriction and a restraint based on the principle of exhaustion of remedies. This ensures that the persons do not rush to the High Court for issue of a Writ, thereby rendering the statutory provisions almost meaningless and non-existent. The Courts have held that it is undesirable to lay down inflexible rules and, therefore, the dictum with reference to the pure theory of jurisdiction may have limitations and cannot be applied as a universal principle. Nevertheless, it is necessary to keep in mind the distinction between lack of jurisdiction and an alleged error in exercise of jurisdiction, i.e. a wrong or erroneous order. Parameters for interference in exercise of writ jurisdiction, inspite of alternative remedy in the two situations is different. In the former it is wider, while in the latter the Writ Court would be extra cautious and good reasons would be required to side step alternative remedy. In the context of the present case, and the submissions and counter to the same, it can, safely and without hesitation, be held that challenge is not to the lack of jurisdiction at the time of initiation but to purported failure to correctly apply the law and exercise jurisdiction. These issues can be appropriately and properly dealt with in the appellate proceedings. No special ground or reason is made out for the petitioner to ignore and to not adhere to and exercise the Statutory Appellate right. We are not inclined to entertain the present writ petition and leave it open to the petitioner to invoke the statutory remedy by way of appeal before the Appellate Tribunal - petition dismissed.
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2018 (1) TMI 227
Whether amendment in the Bills of Entry can be allowed even when the Certificate of Origin was issued at a later date retrospectively and was not available at the time of clearance of the Bills of Entry in contravention of the section 149 of the Customs Act 1962? Whether the certificate of origin issued retrospectively by virtue of the notification no. 187/2009-NT dated 31.12.2009 can supersede the procedure/requirement as laid down in Section 149 of Customs Act, 1962 pertaining to amendment in the bills of entry? Held that: - admittedly, there is a bilateral treaty between the Republic of India and the Republic of Korea which provides for exemption of customs duty, amongst others on the goods imported by the assessee here. Then he relies on Section 25 of the Act to submit, though the goods in question were exigible to customs duty, at the same time the Central Government was competent to grant exemption from payment of customs duty on such goods, generally, either absolutely or subject to conditions that may be fulfilled either before or after clearance of imported goods for home consumption. Further, such conditions could be specified by way of notification - It has then been stated that the Central Government had in exercise of powers vested under Section 25(1) of the Act issued general exemption notification no. 151 of 2009 dated 31.12.2009. A bare perusal of the notification demonstrates that the goods specified thereunder had been made exempt from payment of duty liability subject to the importer (i.e. the assessee in this case), proving to the satisfaction of the designated custom authority that the goods in respect of which the benefit of exemption had been claimed originated from the Republic of Korea. Section 149 of the Act does clearly provide for a scheme wherein though the 'Bill of Entry' may be amended after clearance of the goods for home consumption yet, such amendment may be made only on the basis of documentary evidence that may have been in existence at the time when the goods were so cleared and not on the basis of any document prepared thereafter. The section is thus plain and very clear in its language and does not admit of any doubt that the subject 'Bills of Entry' once cleared against payment of duty, cannot be amended to any extent except on the strength document pre-existing from before the date of clearance of that 'Bill of Entry' - Section 149 does not express the complete intent of the Act. Section 25 of the Act provides for exemption for payment of custom duty. Under that section, the Central Government is enabled to grant exemption from custom duty to any goods generally, either absolutely or subject to condition as may be specified in the notification. By very nature, Section 25, therefore, becomes an exception to Section 12 of the Act that creates levy of custom duty on goods that may be imported to or exported from India. While granting exemption the Central Government has the power to exempt generally any goods from payment of custom duty subject to such condition/s as may be notified. However, in view of clear language of Section 25 of the Act such condition/s may be fulfilled either before or after clearance of the goods. That being the provision of the Act itself, the consequential delegated legislation namely exemption notification and the Tariff Rules have to be read and understood consistent with this unambiguous legislative intent - In the instant case, the goods in question chiefly LCD panel were clearly exigible to payment of custom duty. Thus, but for a notification being issued by the Central Government under Section 25 of the Act the same could be cleared for home consumption only against duty payment. For that reason alone, at the time of the obtaining clearance of the subject 'Bills of Entry', duty payment was required to be made by the assessee. The manner of proof provided by the Tariff Rules, as discussed above, by virtue of Rule 15 read with paragraph 3(4) of Annexure-III of the Tariff Rules allows the assessee to prove this fact by obtaining the 'Certificate of Origin' not later than one year from the date of shipment of goods. Not only that, in cases where the 'Certificate of Origin' had been issued after seven days but upto one year from the date of shipment, the assessee is further burdened to explain the reason for the same-either being on account of involuntary errors or omissions or any other valid reasons and any other or further requirement that the revenue may claim under the Tariff Rules - Once the assessee establishes the aforesaid facts, it would be entitled to claim exemption. The stipulation of Section 149 of the Act or any other provisions incorporated under the Act or the Rules for compliance of duty payment may not stand in the way of the assessee to claim exemption under Section 25 of the Act. Appeal dismissed.
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2018 (1) TMI 226
Renewal of CHA License - rejection on the alleged ground of suppression of a criminal prosecution initiated against the Managing Director of the Petitioner, which is pending before the learned Additional Chief Metropolitan Magistrate, Egmore - Held that: - all the issues which are involved in the present case being factual, the Petitioner has to necessarily approach the CESTAT by filing appeal against the impugned rejection order passed by the Original Authority - by holding that the Writ Petition is not maintainable, liberty is granted to the Petitioner to file appeal before the CESTAT, challenging the impugned order - petition dismissed.
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2018 (1) TMI 225
Misdeclaration of description and value of imported goods - modems - automated teller machines - automated teller machine processors - Levy of penalty on the persons who were concerned in any manner with the handling of goods that were liable for confiscation or had, in any way, dealt with such goods. Held that: - The contractors for supply to M/s Philips India were firms/companies being controlled and operated by Shri JP Mody and Shri Suketu J Mody. M/s Philips India and S/Shri V Ramamrutham and K Basu of Philips India admitted to having discussed the procurement routes with Shri JP Mody and Shri Suketu J Mody and they placed purchase orders on entities that did not have a factory for manufacture of these goods; nor were they able to furnish any evidence of compliance with Central Excise formalities. There was no transfer of technology from M/s Diebold, USA or M/s Philips Holland/ Jarfalla to these purported manufacturers. The Export Import Policy of the time had restricted the import of these goods to actual users qualified to be issued with special import licence. Likewise, parts could be imported for manufacture under restricted conditions. Admittedly, the imports were effected without such a licence entailing liability to confiscation of goods under section 111 of Customs Act, 1962. With that, penalties under section 112 of Customs Act, 1962 would have to be visited upon those who were concerned in any manner with the handling of goods that were liable for confiscation or had, in any way, dealt with such goods. Today, ‘automated teller machines’ are commonplace and literally accessible to all at street corners but this was not so at the time of the impugned imports. ‘Processors’ and ‘modems’ were unheard of outside the tiny world of specialized engineers; today, every child is familiar with these and these are available across the counter. Not unnaturally, because the internet and worldwide web were part of techspeak and not of the lingua franca. In the context of goods under import, it is even less surprising that severe restrictions existed on manufacture and import. The Industries (Development & Regulation) Act, 1951 that controlled the command economy did not accord any priority for allocation of resources for manufacture of such luxury equipment. Imports of parts for manufacture of such luxury goods would have deprived priority areas of scarce foreign exchange; hence, these non-tariff barrier. Again, it is not surprising that ‘automated teller machines’ could be imported only by actual users against licences. That facility was for the limited few and for customers of a few banks who were permitted to operate in India under strict and circumscribed conditions, including that of branch expansion, specified licence issued by the banking regulator. There is nothing on record to demonstrate that M/s Hongkong & Shanghai Banking Corporation Ltd were eligible to procure ‘automated teller machines’; at the same time, their global policy envisaged such a facility for their customers. The sole alternative was to procure them from local manufacturers. In the narrated circumstances of the restricted import and operational regime, nothing has been adduced by them to establish that they were unaware of the source of the goods that were ultimately to be installed in their premises and, hence, have them excluded from the purview of coverage under section 112 of Customs Act, 1962. There is a specific finding in the impugned order which, for overcoming, would have to be controverted other than by protestation of innocence - Owing to lack of any credible justification, there is no reason to exclude M/s Hongkong & Shanghai Banking Corporation Ltd from the ambit of the penal provision. As far as M/s Philips India Ltd is concerned, they were the suppliers of the equipment to M/s Hongkong & Shanghai Banking Corporation purported to have been manufactured in India. They were not unaware of the exclusive source through which these products could have been vended - The subterfuge established in proceedings against the importer was conceived to overcome the imperatives of that regime and, having thus been connected to the impugned goods, M/s Philips India Ltd cannot be excluded from coverage under the penal provisions. S/shri V Ramamritham, K Basu and AA Ansari were employees of their respective organisations. There is no evidence on record that they stood to benefit from the subterfuge other than by continuance of their source of livelihood - Nevertheless, they are not beneficiaries. We feel that the ends of justice would warrant the setting aside the penalties against them. The appeals of these individuals are allowed. Appeal disposed off.
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2018 (1) TMI 224
Nn-fulfilment of export obligation - cancellation of advance license - allegation of the department is that the appellant has obligation to export the ‘Metformin HCL BP’ about 50,000 kgs but the appellant has exported only 45,000 kgs - Held that: - the registration was obtained after the export of the goods. So at the time of export the genuineness was not examined - it is clear that various condition of the Rules for import of goods at concessional rate of duty have not been fulfilled. In the remand order passed by the Tribunal, the Commissioner was directed to verify whether the appellant is eligible for the benefit of Notification which he has done but it appears that substantial compliance was not made out by the appellant as observed in his order. Hon'ble Supreme Court in the case of CCE v. Hari Chand Shri Gopal [2005 (10) TMI 89 - SUPREME COURT OF INDIA] wherein the Hon'ble Supreme Court observed that one cannot ignore above said Rules while claiming exemption under such notification. Compliance has not been made out by the appellant - appeal dismissed.
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2018 (1) TMI 223
Rectification of mistake - it is contended on behalf of the appellant that the apex Court was aware of the order passed in Fortune Marketing on the same day when present appellant Ingram Micro India Pvt Ltd withdrew its appeal - Held that: - while dismissing the appeal of Fortune Marketing on 13/01/2017 and dismissing the appeal of Ingram Micro India Pvt Ltd on 03/03/2017 specific order of dismissal was passed by the Hon'ble Court without leaving any scope for MA(ROM) before Tribunal in Fortune Marketing. The Supertron Electronics Pvt Ltd order was passed by the Tribunal on 06/01/2017 and that was appealed before the apex Court. That reached to its finality due to dismissal of Revenue's appeal on 25/10/2017 in civil appeal No.21552 of 2017. Therefore, it cannot be presumed that while dismissing the appeal of Fortune Marketing different reasoning was available to Supreme Court for a different conclusion. That does not help the appellant to come to Tribunal when it was not a party to Supertron Electronics Pvt Ltd case and its appeal was dismissed as withdrawn by the Supreme Court along with fortune Marketing - Call on 12th December 2017.
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2018 (1) TMI 222
Refund claim - duty paid under protest - Held that: - When the appeal record carrying letter dated 28.9.2006 was examined, that revealed no reason against rejection of the refund claimed by the appellant. A bald communication was sent to the appellant by the Assistant Commissioner in respect of a quasi judicial proceeding pending before him. Pendency of appeal in Tribunal has made both parties to suffer. They were under impression that such pendency of the appeal before Tribunal has barred the Authority below from the exercise of jurisdiction. Therefore they could not complete adjudication against show cause notice dated 28.9.2006 - Having appreciated the reasons of delay, it may be ordered that the appellant should file reply to show cause notice within a month of receipt of this order and bring the proceeding to an end participating for hearing on the date fixed by learned Commissioner. Learned Authority recording pleadings and evidence shall pass appropriate order within a month of last date of hearing or before 31.3.2018 whichever period is earlier. Appellate order set aside.
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Insolvency & Bankruptcy
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2018 (1) TMI 229
Corporate Insolvency Resolution Process - absence of ‘records of default’ - Held that:- In this case, we find that the application preferred by Respondent under Section 7 is not complete in absence of ‘records of default’, as required in terms of sub-section (3) (a) of Section 7 of the ‘I&B Code’. In such case, it was not open to the Adjudicating Authority to entertain the application preferred by Respondent. This apart, as we find that the application under Section 7 of the ‘I&B Code’ in Form-1 has not been filed by the Respondent- ‘Operational Creditor’, but an Advocate, Mr. Rohit Khanna, who is neither Authorised Representative nor holds any position with or in relation to the ‘Financial Creditor’, as required to be stated as Form-1 of the Adjudicating Authority Rules, 2016, we hold that application under Section 7 of the ‘I&B Code’ was not maintainable at the instance of the Respondent.
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FEMA
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2018 (1) TMI 221
Application for dispensation and directing appellant to deposit 10% of the penalty amount and to furnish a credible security for the balance 50% - Held that:- On the one hand the appellant contends its financial credibility and on the other hand undue economic hardship. The Tribunal has waived off substantial pre-deposit and has directed only 10% of the penalty amount to be deposited with a surety for the balance 50% which cannot be said to be undue hardship on the appellant. Considering its own claim of financial stability, on the facts of the case this Court finds no error in the impugned order.
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Service Tax
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2018 (1) TMI 220
Condonation of delay in filing appeal - service of appellate order - Held that: - the certified copy of the appellate order dated 08.05.2013 has not been served, either on the assessee or the authorised representative, as the case may be, in the manner as contemplated under Section 37C(1)(a) of Central Excise Act, 1944 made applicable to Service Tax, as per Section 83 of Finance Act, 1994 - Computation of time for filing an appeal starts from the date of service of certified copy of the order. In the instant case on hand, certified copy has not been served, in the manner as stated. Hence, there is no delay in filing the appeal - appeal allowed.
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2018 (1) TMI 219
Principles of natural justice - the petitioner has not produced records, whereas all records are available - alternative remedy - Held that: - the question would be as to whether there were any documents placed by the petitioner or not and if documents were available, whether they were sufficient to show that the case requires to be decided in favour of the petitioner are all factual issues which the petitioner has to necessarily agitate before the Tribunal. The Tribunal being a fact finding authority is entitled to re-examine and examine the facts which may be placed before it and then come to a conclusion. Merely because there will be a burden on the assessee to make pre-deposit cannot be a reason to byepass the appeal remedy available under the Act. Petition dismissed as not maintainable.
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2018 (1) TMI 218
Commission received in Foreign Currency for the services rendered in India - export of services or not? - Whether a service not being delivered outside India and not used outside India can be termed as export in violation of provisions of Export of Service Rules, 2005 and whose effective use and enjoyment was in India, in terms of the Board Circular No.141/10/2011-ITU dated 13.05.2011? Held that: - there is no branch of the company with which the assessee has done his work and merely because subsidiary company has a Branch in India will not amount to branch of company with which the assessee has entered into a contract. The assessee has nothing to do with the subsidiary company - the contention that clause (3) of the Export Rules will come into operation, in our considered opinion, the language used wholly or subsidiary company having branch in India will not disentitle the assessee from benefit, therefore, he is not required to make payment of tax and he will be entitled for exemption. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 217
Whether the CESTAT was correct in allowing the refund of Cenvat credit pertaining to the period prior to the registration of the respondent? - Held that: - Admittedly, in the case at hand, respondent was duly registered under the Cenvat Credit Rules at the time of making the application for refund under Rule 5 of the Rules - the CESTAT has not been committed any error of law in allowing the refund of the Cenvat credit pertaining to the period prior to the registration of the respondent with the department as registration is not a condition precedent for seeking refund except that party should be registered at the time of making application - appeal dismissed.
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2018 (1) TMI 216
Classification of services - renovation, restoration, maintenance work with reference to various buildings like hotels, hospitals etc - Revenue contended that the services rendered by the appellant are liable to be taxed under the category of construction service during the period 10/09/2004 to 15/06/2005 and repair and maintenance of immovable property service for the period 16/06/2005 to 25/07/2007 - appellants claimed that the services provided by them are essentially restoration and renovation of immovable property and accordingly they are eligible to avail abatement of 67% in the taxable value. Held that: - an illustrative list of the various work executed by the appellant was provided. A brief of some of the sample work orders/contracts were also reproduced by the Original Authority in the said para. We have perused the same alongwith the applicable statutory entry relevant to construction services w.e.f. 10/09/2004. The relevant clause of the construction services in terms of Section 65 (3a) of the Finance Act, 1994 is “repair, alteration or restoration of, or similar services in relation to building or civil structure”. Regarding change of classification w.e.f. 16/06/2005, the Original Authority recorded that in most of the contracts, the appellant used the term maintenance and even if they have sometimes used the term “restorations” it is more akin to maintenance as the services were of continuous nature for maintaining properly in the hotel premises. It was observed that whatever terms were used in the agreements or contracts, the same were examined in the overall context to understand the scope of work before classifying the same under management or maintenance. CENVAT credit - payment of 6% / 8% on the value of exempted services - Rule 6 (3) (i) of the Cenvat Credit Rules, 2004 - Held that: the appellants have deposited the whole of Cenvat credit amounting to ₹ 2,97,310/- alongwith interest for delayed payment. As such, it should be considered that they have not availed such credit to attract the rigorous of Rule 6 (3) of Cenvat Credit Rules - the demand for the said amount for violation of Rule 6 (3) is not sustainable - penalty relevant to the said dispute is also liable to be set aside. Extended period of limitation - Held that: - the appellants were engaged in providing such taxable service to various corporate entities in a large scale operation. In this connection, we have perused the findings of the impugned order justifying the demand for extended period. The appeal filed by the appellant is dismissed except for setting aside the demand under Rule 6 (3) of Cenvat Credit Rules, 2004
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2018 (1) TMI 215
Rent-a-cab service - business of running of “radio taxies” and are providing transport services to both individual and corporate customers - scope of the term 'renting' and 'hiring' - whether the service would be taxable under the head Rent-a-Cab-Scheme Operator’s Service or not? - Held that: - The admitted facts of the case are that the respondent is providing various vehicles for transport of people. In respect of such transport for individual passengers for which consideration was received on the spot by the driver of the said vehicle, no service tax liability arises. This position is not in dispute. Service to corporate clients - Held that: - services provided by the noticee being transportation of passenger from one point to another against specific call/request rather than to make available the vehicle for a particular time span, where possession and control of vehicle always lie with the noticee or driver, cannot be taxed under “rent-a-cab service’ by no stretch of imagination irrespective of charges per trip are fixed amount instead of per KM basis. - The Tribunal in APSRTC ADDAPA [2017 (11) TMI 773 - CESTAT HYDERABAD] held that when the contract is to hire a vehicle, there is no renting of cab. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 214
Liability of service tax - transfer of use of the logo - Royalty income - Intellectual Property Right Service - extended period of limitation - Held that: - it is seen that the goods do have a separate trademark such as Levokast, Apiverin-M, Prestige etc. Apart from this, the packings also contain the ttklogo. Thus, though the goods use the logo, it cannot be said that it is a trademark for these goods, as these goods have separate registered trademark. Again, the appellants have registered the logo under the Copyright Act. Any infringement of right pertaining to the logo would fall under Copyright Act and not under Trademark Act. The provisions of Copyright Act describe the situations of protection afforded to the copyright. This is different from the rights attached to a trademark. The logo being registered as a copyright, in case of infringement of the same, the right falls within the Copyright Act and would be enforceable by the appellants under the said Act only and not under the Trademark Act. The decision in the case of M/s ESPN Software India (P) Ltd. and M/s Turner International India Pvt. Ltd. Versus CST, New Delhi [2013 (10) TMI 1161 - CESTAT NEW DELHI] referred, where the Tribunal had occasion to analyse the dispute relating to cartoon characters. The assesse therein contended that these cartoon characters are artistic work and covered under copyright. Whereas, the Revenue alleged the same to be Trademark and raised the demand under IPR services - After analysing the definition of copyright and trademark, the Tribunal held that such cartoon characters fall under copyright only - The facts being similar in our view, the said decision is applicable to this case. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 213
Construction of Residential Complex Service - taxability w.e.f 01.07.2010 - penalty - Held that: - the issue of levy was matter of dispute before the Hon’ble High Court and was under challenge and in such case it cannot be said that the Appellant had intention to evade tax or they had any malafide intention. The demand amount alongwith interest stand paid before issue of SCN - there is no reason to impose penalty u/s 77 and 78 of the FA, 1994 upon the Appellant - demand of tax with interest upheld - penalty set aside - appeal allowed in part.
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2018 (1) TMI 212
Classification of services - Storage and warehousing services - Whether Facilitation & Administration charges, Auction Gr-1 charges and Shortfall charges would be taxable under the head Storage and warehousing services or otherwise? - Held that: - The very classification being in question including the taxability of the impugned service and appellant was not granted full opportunity of hearing on its pleadings both on taxability and classification, the adjudicating authority is expected to re-adjudicate the matter following due course of justice - appeal allowed by way of remand.
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2018 (1) TMI 211
Non-speaking order - Held that: - the appellant was not provided with the basis why the ingredients like transportation and other additional charges were includible in the cargo handling charges provided by the appellant - Learned adjudicating authority shall cause enquiry and expose to the appellant the basis for determination of the liability for the period 26/08/2009 to 31/03/2010. Upon such exposure appellant shall defend its case making pleadings and adducing evidence if any, for satisfaction of that authority, who shall grant the appellant proper opportunity of hearing and shall pass appropriate order - appeal allowed by way of remand.
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2018 (1) TMI 210
Airlines business - classification - online information and database access or retrieval service service received from foreign based service provider - the decision in the case of Jet Airways (I) Ltd. Versus Commissioner of Service Tax Mumbai [2016 (8) TMI 989 - CESTAT MUMBAI] contested, where it was held that the activities of CRS Companies would fall under the category of online information and database access or retrieval service - Held that: - the decision in the above case upheld - appeal dismissed.
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2018 (1) TMI 197
Refund claim - time limitation - Section 11B of Customs Act - Held that: - the appeal is of less than ₹ 20,00,000/- tax effect and covered by latest circular F.No.390/Misc./163/2010-JC/Pt Government of India - Central Board of Excise & Customs fixes the monetary limit below which appeal shall not be filed in the High Court as ₹ 20,00,000/- - appeal disposed off.
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Central Excise
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2018 (1) TMI 209
Whether the Tribunal was correct in allowing the appeals of the assessee, solely by holding that there is no sufficient corroborative evidence to statement tendered by partner of assessee, (para 6.3), even when statement tendered by Central Excise Officer is admissible before court of law as piece of evidence? Held that: - only on the basis of statement of Tara Chand who was the partner of the Company, case of the department is not sustainable - reliance placed in the case of Continental Cement Company vs. Union of India [2014 (9) TMI 243 - ALLAHABAD HIGH COURT], where it was held that unless there is clinching evidence of the nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of presumptions and assumptions. Clandestine removal is a serious charge against the manufacturer, which is required to be discharged by the Revenue by production of sufficient and tangible evidence. Appeal dismissed.
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2018 (1) TMI 208
CENVAT credit - principles of natural justice - denial of cross-examination - where while considering the matter the statement which was recorded of the Foreman whether the assessee is entitled for cross-examination or not while disallowing the CENVAT credit, proprietor of the firm which was considered on the basis of evidence available on record? Held that: - the cross-examination is a right of assessee. In this case there is ambiguity in the statement of employee - it is clear that the statement of Foreman requires cross-examination. The matter is remitted back to the Tribunal with a view to have a cross-examination of the Foreman - appeal allowed by way of remand.
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2018 (1) TMI 207
Condonation of delay in filing appeal - appeal filed beyond condonable period - date of receipt of the Order-in-Original - Held that: - Considering the fact that the petitioner is a Local Body, manned by an Executive Officer without an Elected Body and considering the administrative issues faced by the Local Body, this Court is inclined to exercise its discretion in this matter and give an opportunity to the petitioner to establish before the Appellate Authority as to the exact date of receipt of the Order-in-Original - matter remanded for frsh consideration - appeal allowed by way of remand.
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2018 (1) TMI 206
CENVAT credit - steel and cement - whether the appellants are entitled to the CENVAT credit availed on steel and cement used in the manufacture of capital goods? - Held that: - the learned Commissioner (A) in para 9 of the impugned order has wrongly observed that the appellants have not produced any certificate from the Chartered Engineer which shows the use of cement and iron and steel items received in the factory of the appellant - the appellant produced the Chartered Engineer certificate along with his reply to the show-cause notice and this fact has been recorded in the Order-in-Original. On identical issue, this Tribunal in the case of Ultratech Cement Ltd. [2017 (6) TMI 796 - CESTAT BANGALORE] has allowed the CENVAT credit on identical items used for manufacture of capital goods. Credit allowed - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 205
Clandestine removal - shortage/excess of the goods - penalties - Held that: - Shri. Deepak Jain, Director of M/s Malerkotla Steels and Alloys (P) ltd and M/s P.K. Alloys Pvt. Ltd. has been expired on 25.01.2015 and death certificate to that effect is placed on record, therefore, no penalty is imposable on Late. Shri. Deepak Jain, and the appeals filed by late Shri. Deepak jain are abated. Penalty on M/s Malerkotla Steel and Alloys pvt. Ltd - Held that: - Although, shortage/excess has been alleged against the appellant but no such details of shortage/excess has been enclosed or relied upon by the Revenue. In that circumstances, without any concrete evidence the demand on account of shortage/excess of ₹ 1,27,114/- and ₹ 15,21,377/- are not sustainable - penalty also set aside. Penalty on M/s P.K. Alloys Pvt. Ltd. - Held that: - Considering the fact that M/s P.K. Alloys Pvt. Ltd. has paid entire amount of duty along with interest within 30 days of the order of adjudication, therefore, penalty is reduced to 25% of the duty is confirmed. Penalty on M/s Balaji Alloys - Held that: - the date of clearance is not been established in the show cause notice to demand interest from the appellant, in that circumstances, the date of demand is the date of clearance goods. As the appellant has paid the duty within the one month of the order of adjudication, therefore, the demand of interest is not sustainable against the appellant - he appellant has paid 25% duty as penalty in terms of proviso of Section 11AC of the Act. Therefore, I reduce the penalty 25% of duty against M/s Balaji Alloys. Appeal allowed in part.
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2018 (1) TMI 204
Classification of goods - food preparations, namely, wheat flour, rice flour, corn crunch, rice crunch, etc. - Whether the goods in question are classifiable under chapter heading 1901.11 or under chapter heading 1901.19 or not? - Extended period of limitation - Difference of opinion on merit i.e. issue of classification but concurrent decision on the issue of period of limitation while setting aside the demand. Held that: - Per : Ashok Jindal - The intent of the legislature is not that the said goods were strictly used by the infant from the manufacturer or cannot be used by other industrial unit for further manufacture of the said goods for use of infant. The entry is quite clearly shows that the goods should be the food preparations put into unit container for infant use. Therefore the goods qualify for classification under chapter heading 1901.11 Therefore, on merits, we hold that the appellant has correctly classified the goods under chapter heading 1901.11. Per: Devender Singh - Admittedly, the products made by the appellant is an intermediate products which are not capable of being used by the infants as such nor are they marketed for infants. They are supplied to the industrial consumers to make it fit for infants. The impugned products are not fit for use of infants as such - capability of use of the products, marketability of the products and the actual supply of the products to industrial user show that the impugned products are not fit for infant use - the products in question, namely, extruded wheat/rice, flour wheat crunch, rice crunch, etc. would be correctly classifiable under tariff sub heading 1901.19. Time limitation - Held that: - the appellant has been filing regular declaration under Rule 173B of the Central Excise Act, 1944 - as the fact of declaration made by the appellant was in the knowledge of the Revenue in support of this evidence produced by the appellant which shows name of the buyer is an industrial consumer. In that circumstance, the extended period of limitation is not invokable as all the facts were in the knowledge of the department that the classification/declaration filed by the appellant is in respect of the goods under chapter heading 1901.11 - extended period not invocable. Since the entire period is beyond the normal period, I agree with the learned brother Member (J) in his conclusion that the appeal is to be allowed on limitation.
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2018 (1) TMI 203
Scope of SCN - Refund claim - the entire case has been examined with respect of provisions of Rule 5B whereas SCN only raises issue relating to Rule 5 of CCR 2004 - Held that: - As it is seen that the Order-in-Original in para 1 of the discussion and finding also holds that the issue is not to be examined with reference to Rule 5B but with reference to Rule 5. It is seen that the last sub-para of para 3 mentions that the appellants have contended that they have not sought refund under Rule 5B but under Rule 5 of Cenvat Credit Rules. If that argument of the appellants is to be accepted, the matter should have been remanded to the original adjudicating authority and due notice should have been given to the appellants on the ground of rejection - appeal allowed by way of remand.
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2018 (1) TMI 202
CENVAT credit - duty paying invoices - It was alleged that the factory records of the appellant did not show the entry of the transport vehicles mentioned on the respective invoices - Held that: - In the instant case, the issues not merely whether JPPL had paid the duty on these invoices. The issue is whether the goods received by the appellant in the vehicle numbers recorded in the GRN were the same goods on which JPPL had paid the duty. There is no evidence of that. In fact the evidence suggests that the goods received by the appellant and recorded in the GRN was not the same as those cleared by the JPPL, if any, on payment of duty. Extended period of limitation - Held that: - the difference of the vehicle number appearing in GRN of the appellants being different from invoices in all five cases is relevant. The appellants failed to match the number of truck with the number mentioned in the invoice. Thus, it is apparent that the appellants were deliberately involved in the operation and were totally negligent - extended period rightly invoked. Appeal dismissed.
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2018 (1) TMI 201
CENVAT credit - courier service used by them for despatch of documents - place of removal - input service - Held that: - In so far as the movement of goods from factory to depot is concerned, the appellants have clarified that depot is the place of removal as the goods are moved from factory only on stock transfer basis and sale takes place only from depot. In these circumstances, the credit of service of courier from factory to depot cannot be denied - credit allowed. CENVAT credit - air travel/ rail travel - tour operator service - Held that: - The appellants have clarified that the said services were used exclusively for official work and not to LTC. The appellants have agreed to produce necessary document before the original adjudicating authority to establish the said nexus - matter on remand. CENVAT credit - service in respect of Advertising Standard Council of India - Held that: - advertising is related to business permission and therefore would be included in the inclusive part of the service. The cenvat credit of service availed in respect of membership of “Advertising Standard Council of India” is allowed - credit allowed. CENVAT credit - input services - outdoor catering service availed in respect of canteen facility - Held that: - they have more than 250 employees and maintaining canteen is obligatory as per law - reliance placed in the case of Ultratech Cement Ltd. [2016 (12) TMI 381 - CESTAT HYDERABAD] - credit allowed. Appeal allowed in part - part matter on remand.
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2018 (1) TMI 200
Suo moto availment of credit - respondents by mistake deposited certain amount in the closed unit instead of active unit - refund claim - Held that: - The appellants can claim refund of the duty deposited in respect of the closed unit; however, they cannot take suo motu credit of the said amount in their operational unit - appeal allowed - decided in favor of Revenue.
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2018 (1) TMI 199
Time limitation - reversal of irregular availed CENVAT credit - demand of interest and penalty - Held that: - though the services on which credit availed were received by the appellant before 1-3-2006 however credit was taken in the month of March, 2006 when the final product become dutiable. In this regard when the credit was shown availed in the month of March when the product is dutiable no one can assume that credit was taken wrongly. The fact that the credit was pertaining to the period prior to 1-3-2006 was not declared in ER-1 return and was not known to the department therefore even though the availment of Cenvat credit was shown in the ER-1 return for the month of March but in absence of information regarding the receipt of input service prior to 1-3-2006 when product was exempted was not disclosed, therefore there is clear suppression of facts and malafide intention on the part of the appellant - Extended period was rightly invoked, hence demand cannot be made being time barred. Demand of Cenvat credit upheld by the Commissioner(Appeals) is maintained. As regard the penalty, adjudicating authority has not given the option of 25% penalty in the order-in-original as required under the proviso to Section 11AC. Penalty is reduced to 25% under Section 11AC subject to condition that the appellant pay this amount within a period of 30 days from the date of receipt of this order. Appeal allowed in part.
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2018 (1) TMI 198
SSI Exemption - classification of goods - pre-mixes of coffee and tea and dairy whitener - Held that: - Since the classification of the products manufactured by the appellant has already been decided by the highest court of the country, the said classification of the products would apply in this case - If the said product is classified under [sub-heading] 2101.10, the benefit of Notification No. 8/2003 is automatically not available to the appellants. As this Heading 2101.10/20 is excluded from the benefit of N/N. 8/2003-C.E. as amended from time to time - appeal dismissed.
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