Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 8, 2018
Case Laws in this Newsletter:
GST
Income Tax
Corporate Laws
PMLA
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Highlights / Catch Notes
Corporate Law
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Right of member to copies of audited financial statement - copies of audited financial statements and other documents can be sent at shorter notice if ninety five percent of members entitled to vote at the meeting agree for the same. - Section 136(1) of the Companies Act, 2013
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Corporate Social Responsibility - Central Government may prescribe sums which shall not be included for calculating 'net profit' of a company - Section 135 of the Companies Act, 2013
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Corporate Social Responsibility - where a company is not required to appoint an independent director under sub-section (4) of section 149, it shall have in its Corporate Social Responsibility Committee two or more directors - Section 135(1) of the Companies Act, 2013
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Who is required to Constitute a Corporate Social Responsibility Committee - the conditions of net profit of rupees five crore or more - provision relaxed - for the words "any financial year", the words "the immediately preceding financial year" substituted - Section 135(1) of the Companies Act, 2013
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Financial statement, Board's report, etc. - disclosure requirements with respect to annual return and polices in respect of remuneration and CSR modified - Section 134(3) of the Companies Act, 2013
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Financial statement, Board's report, etc. - Chief executive officer shall sign financial statements irrespective of whether he is a director or not. - Section 134(1) of the Companies Act, 2013
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Levy of penalty in case of professional or other misconduct - minimum penalty reduced from ₹ 10 lakh rupees to 5 lakh rupees - Section 132(4) of the Companies Act, 2013
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Re-opening of accounts on court's or Tribunal's orders - order for re-opening of accounts can be made upto eight years unless there is a specific direction under section 128(5) from the Central Government for longer period - Section 130(3) of the Companies Act, 2013
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Re-opening of accounts on court's or Tribunal's orders - Notice may be given to any other person concerned and consideration of representation from such concerned person - Section 130(1) of the Companies Act, 2013
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Financial statement - a company having subsidiary (ies) shall prepare Consolidated Financial Statements in the same form and manner as that of its own in accordance with applicable accounting standards - Section 129(3) of the Companies Act, 2013
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Declaration of dividend - interim dividend can be declared during the period from closure of financial year till date of Annual General Meeting and in such case in addition to profits referred above, the profit generated upto quarter prior to declaration of dividend may be used - Section 123(3) of the Companies Act, 2013
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Declaration of dividend - declaration of interim dividend for a financial year from the profits of the said year or from brought forward surplus in the profit and loss account allowed - Section 123(1) of Companies Act, 2013
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Resolutions and agreements to be filed - fine and penalty in case of default - the minimum that can be imposed for non-compliance with the provisions of the section reduced - Section 117(2) of the Companies Act, 2013
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Postal ballot - the company may transact an item, which is mandatorily required to be transacted through postal ballot, at a general meeting also where the facility of electronic voting is provided by the company - Section 110 of the Companies Act, 2013
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Notice of meeting - Annual general meeting may be held at a shorter notice if in case of an Annual General Meeting consent is given by not less than ninety-five percent. of the members entitled to vote - Section 101(1) of the Companies Act, 2013
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Calling of extraordinary general meeting - an extraordinary general meeting of the company, other than of the wholly owned subsidiary of a company incorporated outside India, shall be held at a place within India. - Section 100(1) of the Companies Act, 2013
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Annual general meeting - unlisted companies enabled to convene Annual General Meeting at any place in India with the approval of all shareholders obtained in advance - Section 96(2) of the Companies Act, 2013
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Place of keeping and inspection of registers, returns, etc. - to restrict inspection of certain personal information, which would be prescribed through Rules, in the register of members. - Section 94(3) of the Companies Act, 2013
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Place of keeping and inspection of registers, returns, etc. - to do away with filing of special resolution in advance with Registrar of Companies for keeping of the registers and returns at a place other than the registered office of the company - Section 94(1) of the Companies Act, 2013
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Omitted - requirement of the return to be filed with respect to change in promoters' and top 10 shareholders' stake - Section 93 of Companies Act, 2013 omitted.
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Annual return - Every company shall place a copy of the annual return on the website of the company, if any, and the web-link of such annual return shall be disclosed in the Board's report - Section 92(3) of the Companies Act, 2013
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Annual return - Omission of requirement of an extract of the annual return in such form as may be prescribed shall form part of the Board's report - 92(3) of Companies Act, 2013 [before substitution]
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Annual return - abridged form - Central Government may provide abridged form of annual return for "One Person Company, small company and such other class or classes of companies as may be prescribed - Section 92(1) of Companies Act, 2013
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Annual return - disclosure requirement in respect of shares held by or on behalf of the Foreign Institutional Investors - omitted: - names, addresses, countries of incorporation, registration and percentage of shareholding held by them - Section 92(1)(j) of the Companies Act, 2013
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Annual return - requirement of disclosure of its indebtedness omitted - Section 92(1)(c) of the Companies Act, 2013
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Register of significant beneficial owners in a company - a declaration is to be given to the company by every individual acting alone or together or through one or more person including a trust and persons resident outside India, who holds beneficial interest of not less than twenty-five per cent or other prescribed percentage in shares of a company or the right to exercise or the actual exercising of significant influence or control under clause (27) of section 2 of the Act (to be called as significant beneficial owner).... - Substitution of Section 90 of Companies Act, 2013
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Declaration in respect of beneficial interest in any share - new definition of "beneficial interest in a share" - Section 89(10) of the Companies Act, 2013
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Company to report satisfaction of charge - the timelines for filing of satisfaction of charge aligned with the lines of timelines provided for registration of charge under section 77 - Section 82(1) of the Companies Act, 2013
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Application for registration of charge - Period of limitation - more clarity - the person in whose favour the charge has been created can file the charge on the expiry of thirty days from creation of charge where a company fails to file so - Section 78 of the Companies Act, 2013
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Duty to register charges, etc. - this section shall not apply to such charges as may be prescribed in consultation with the Reserve Bank of India - Section 77(1) of Companies Act, 2013
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Punishment for contravention of section 73 or section 76 - every officer - may be liable for imprisonment which may extend to seven years and with fine which shall not be less than twenty-five lakh rupees but which may extend to two crore rupees - Section 76A(b) of the Companies Act, 2013
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Punishment for contravention of section 73 or section 76 - Rationalization of amount of fine - Minimum fine for failure in repayment of deposits and interest thereon shall be rupees one crore or twice the amount of deposit accepted, whichever is lower - Section 76A(a) of the Companies Act, 2013
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Repayment of deposits, etc., accepted before commencement of this Act - conditions relaxed - deposits accepted under Companies Act, 1956 shall be repaid within 3 years from the commencement of the original section 74 of the Companies Act, 2013 or on or before expiry of the period for which deposits were accepted whichever is earlier - Section 74(1)(b) of the Companies Act, 2013
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Prohibition on acceptance of deposits from public - defaulting company - allowing acceptance of deposits by companies, if the default is made good and five years have lapsed since then. - Section 73(2)(e) of the Companies Act, 2013
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Prohibition on acceptance of deposits from public - conditions and requirements of providing deposit insurance removed. - Section 73(2)(d) of the Companies Act, 2013
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Prohibition on acceptance of deposits from public - deposit repayment reserve shall not be less than twenty percent. of the amount of deposits maturing during the following financial year - Section 73(2)(c) of the Companies Act, 2013
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Further issue of share capital - wider modes of delivery with respect to despatch of notice of offer for rights issue and to provide for applicability of provisions of Chapter III in case of issue of securities - Section 62(1)(c) and 62(2) of the Companies Act, 2013
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Issue of sweat equity shares - Waiting period of one year from the date of commencement of business removed - Section 54(1) of the Companies Act, 2013
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A company may issue shares at a discount to its creditors when its debt is converted into shares in pursuance of any statutory resolution plan or debt restructuring scheme - Section 53 of the Companies Act, 2013
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Voting rights of a member / shareholder shall also be subject to section 188 (i.e. Related party transactions) - Section 47 of the Companies Act, 2013
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Issue of shares on private placement basis. - Section 42 of the Companies Act, 2013 substituted.
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Civil liability for mis-statements in prospectus - No person shall be liable if he relied bonafidely upon report or statement made by an expert or an extract a report or valuation of an expert - Section 35(2) of the Companies Act, 2013
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Matters to be stated in prospectus - omission of the long list of details required - lined with information and reports required under SEBI - Section 26(1) of the Companies Act, 2013
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Authentication of documents, proceedings and contracts - An employees of the company (in addition to an officer) duly authorized by the Board is also empowered to authenticate the document, proceedings and contract on behalf of the company - Section 21 of the Companies Act, 2013
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Registered office of company - New office in case of incorporation or in case of Change in the existing registered office - Period of limitation extended from 15 days to 30 days. - Section 12 of the Companies Act, 2013
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Incorporation of company - Instead of an affidavit, a declaration shall be required from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles - Section 7(1)(c)
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Amendment to the power of the Registrar to reserve the name from the date of approval in case of new company and existing company - Section 4(5) of the Companies Act, 2013
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If at any time the number of members of a company is reduced below the minimum required members, every person who is a member of the company during the time that it so carries on business after those six months shall be severally liable and may be severally sued - New Section 3A
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Companies Act, 2013 - Amendments in the various clauses of Definitions u/s 2 i.e. (i) associate company, (ii) Cost Accountant, (iii) debenture, (iv) financial year, (v) holding company, (vi) interested director (omitted), (vii) key managerial personnel, (viii) net worth, (ix) public company, (x) public financial institution, (xi) related party, (xii) small company, (xiii)subsidiary company and (xiv) turnover
Service Tax
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Security Agency Service - the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act - AT
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Levy of service tax - service of business promotion provided by it to the service recipient - there shall be no levy on the land development charge under the category of business and management consultancy. - AT
Central Excise
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Refund claim - unjust enrichment - burden to prove that incidence of duty passed on to the customer is discharged by the assessee when assessee's invoice during the material period showing a composite price and duty not indicated separately. - AT
Case Laws:
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GST
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2018 (1) TMI 276
IGST on sale consideration - Warehousing of imported goods - double payment of IGST - Held that: - Learned counsel for the respondents would obtain instructions on the said aspect and clarify the position in the counter affidavit - Re-list on 8th March, 2018.
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Income Tax
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2018 (1) TMI 290
Seeking review of judgment The Citizen Co-Operative Society Limited, Through Its Managing Director, Hyderabad Versus Assistant Commissioner of Income Tax [2017 (8) TMI 536 - SUPREME COURT] as held appellant cannot be treated as a co-operative society meant only for its members and providing credit facilities to its members. We are afraid such a society cannot claim the benefit of Section 80P of the Act - Held that:- As gone through the review petition and the connected papers. We do not find any merit in the review petition and the same stands dismissed.
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2018 (1) TMI 289
Working capital adjustment - assessee in the TP study selected TNMM as the most appropriate method to benchmark the international transaction - Held that:- In the present case, it appears that the assessee furnished the calculation for adjustment on account of working capital before the ld. DRP who after considering the submissions of the assessee and the guidelines provided by OECD for the computation of working capital adjustment directed the TPO to do needful. As regards to the objection of the TPO that the assessee had not demonstrated that there was a difference in the levels of working capital employed by it vis-à-vis the comparables which affected price and consequently profit, DRP categorically stated that holding of inventories, trade debtor/ creditors, trade receivable/payable has always an interest cost. Therefore there is definitely a connection in the level of working capital and the price at which one is willing to offer its services/goods. The ld. DRP held that the rejection of the assessee’s claim of working capital adjustment by the TPO was not tenable. As regards to the observation of the TPO that monthly data of comparables as well as segmental data was not available for making reasonably accurate working adjustment. The ld. DRP directed the TPO that average of opening and closing balance of the inventories and the trade receivable/payable, trade debtors/creditors for the relevant year may be adopted which may broadly give the representative level of working capital over the year. In our opinion, the ld. DRP rightly directed the TPO to compute the working capital adjustment by using the OECD methodology. We do not see any valid ground to interfere with the findings given by the ld. DRP. Accordingly, we do not see any merit in this appeal of the department. - Decided in favour of assessee
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2018 (1) TMI 288
Levy of penalty u/s.271(1)(c) - invalid notice - non striking of irrelevant words from notice - Held that:- Bare perusal of the notice issued u/s 271(1)(c) of the Act apparently goes to prove that the Assessing Officer initiated the penalty proceedings by issuing the notice u/s 274/271(1)(c) of the Act without specifying whether the assessee has concealed ''particulars of income" or assessee has furnished "inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notice in this case has been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271(1)(c) of the Act. Thus having regard to the manner in which the Assessing Officer has issued notice under section 274 r.w.s. 271(1)(c) of the Act dated 31.12.2009 without striking off the irrelevant words, the penalty proceedings show a non-application of mind by the Assessing Officer and is, thus, unsustainable. - Decided in favour of assessee.
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2018 (1) TMI 287
Disallowance on late payment of employees contribution to PF - Held that:- The issue is squarely covered against the assessee by Hon’ble jurisdictional High Court’s judgment in the case of CIT vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT), wherein it is categorically held that in the case of delayed deposit of employees contribution to PF, the same will not be deductable in computing income under section 28 of the Act.The law so laid down by the Hon’ble jurisdictional High Court is binding on us. The mere fact that an appeal against the said decision is pending before the Hon’ble Supreme Court does not dilute binding nature of this judicial precedent. - Decided against assessee.
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2018 (1) TMI 286
Reopening of assessment - assessment was framed on the non-existing company - scheme of amalgamation - Held that:- the assessment was framed by the AO on the non-existent amalgamated company, not on the amalgamating company, therefore, the assessment framed was void ab initio and the same was rightly quashed by the ld. CIT(A) - Decided against revenue
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2018 (1) TMI 285
Determination of ALV - invoking the provisions of section 23(1)(a) as against the ALV declared by the assessee u/s 23 (1) (b) - Held that:- As in the case of CIT vs. Tip Top Typography [2014 (8) TMI 1002 - BOMBAY HIGH COURT] expounded that though there cannot be a blanket rejection of the municipal valuation but the Assessing Officer can deviate from the same if he has cogent and reliable material. In the present case, find that the premises under consideration is in posh locality in Cuffe Parade, Mumbai. The Assessing Officer has made due enquiry and gathered cogent and reliable material regarding the applicable rent in such property in same building and same wing. The Assessing Officer has found that identical property is fetching monthly rent of ₹ 4,25,000/-. In such circumstances, the rateable value determined by the Assessing Officer is based upon cogent and reliable material. Hence, departure from the municipal valuation adopted by the assessee is duly justified and is in accordance with Hon'ble jurisdictional High Court guidelines as above. Accordingly, set aside the order of the ld. Commissioner of Income Tax (Appeals) and restore the order of the Assessing Officer. - Decided in favour of revenue
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2018 (1) TMI 284
Non deduction of tds - disallowance of service charges E-Mech Enterprises paid to clearing and forwarding agents M/s Shreeji International and M/s Mahavir Agencies - Held that:- As decided in The Assistant Commissioner Versus M/s. PP. Overseas [2011 (2) TMI 830 - ITAT, Mumbai] case the contract between the assessee and the C&F agent is a service contract which has not been specifically included in Explanation III below section 194C. In this view of the matter, the provisions of section 194C are not applicable to the payments to the C&F agents. If that is so, there was no obligation on the part of the assessee to deduct tax from the payment made Disallowance u/s 40(a)(ia) - disallowance of ocean freight, terminal handling charges - Held that:- As per the prescribed Form No. 26A, the deduction under amended section will be allowed only if the (i) payee has furnished his return of income under section 139; (ii) payee has taken into account such sum for computing income in such return of income; and (iii) payee has paid the tax due on the income declared by him in such return of income, and the payer furnishes a certificate to this effect from an accountant in the prescribed form. Thus we set aside the order of the Ld. CIT(A) on the above issue and restore the matter to the file of the AO to make an order in the light of theour above observation, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO. TDS u/s 194C - disallowance of amount paid to IAL Shipping Agencies, Sea Load Shipping Agencies and Three Star Forwarders Pvt. Ltd. - Held that:- The above payments being below the threshold limit of ₹ 30,000/- as per provisions of sub-section 5 of section 194C, we delete the disallowance upheld by the Ld. CIT(A) and allow the 2nd ground of appeal.
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2018 (1) TMI 283
Bogus purchases - Held that:- We are of the considered opinion that there could be no sale without purchase of material keeping in view the assessee’s nature of business. The turnover achieved by the assessee has not been disputed by the revenue and the payments were through banking channels. The assessee reconciled quantitative details also. However, at the same time, the assessee reflected purchases from seven entities, all of which were controlled by the same group and the assessee could not produce any of the party for confirmation of the transaction. Said group controlled more than 70 entities with the sole objective of providing accommodation bills to the interested person through network of agents. The entities were being managed by the employees / relatives of the said group who were merely name lender and had no knowledge about the business being carried out by these entities. All these factors cast a serious doubt on assessee’s claim. Therefore, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against alleged bogus purchases, which Ld.CIT(A) has rightly done. The assessee has placed reliance on several judicial pronouncements but we find the matter to be a factual one which requires estimation of income. Therefore, on totality of facts, we find the estimation made by Ld. CIT(A) to be on the lower side and hence, we enhance the same to 6% of alleged bogus purchases of ₹ 5,87,40,062/- which comes to ₹ 35,24,404/- - Decided in favour of revenue in part
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2018 (1) TMI 282
Entitlement to the benefit of tax exemption u/s 11 - proof charitable activities - donation given by assessee trust to a university - Held that:- We note that ld.CIT(A) took a different stand to deny the exemption which was not arising out of the assessment order passed by Assessing Officer under section 143(3)/11 of the Act. The ldCIT(A) held that in case of assessee trust under consideration, the explanation below sub-section (2) of Section 11 are applicable, as the trust made payments to a university approved under section 10(23C)(vi), therefore, there cannot be claim of deduction at both ends, that is, an application by the assessee and as income by the recipient. Neither the stand taken by Assessing Officer nor the stand taken by CIT(A) is justifiable as per the provisions of law. We are of the view that donation given by assessee trust to a university approved under section 10(23C)(vi) is for charitable purpose subject to verification of the basic information which were not available on record, as per Ld. DR, such as:(i) Property from which the rental income of the trust has derived, that is rental agreement and assessee’s Trust entitlement to receive rental income. and (ii) Agreement between Singhania Foundation Education ‘Trust’ and Singhania Foundation Education ‘Samity’ about use of services of service providers namely, International Legal Consultants Ltd. and Law Firm Management Services Ltd( LFMS). Therefore, we are of the view that this issue requires a fresh examination at the end of the Assessing Officer. Therefore, we set aside the order of the ld. CIT(A) and remand the matter back to the file of AO and direct him to examine the basic information like agreement of rental income and agreement between assessee and service provider, as discussed above, and adjudicate the issue afresh - Appeal filed by the assessee allowed for statistical purposes.
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2018 (1) TMI 281
Reopening of assessment - Addition on a/c of non-capitalization of Interest - Held that:- The assessment order says that the AO has not been able to substantiate any nexus between the funds utilized in the construction of flat and the interest debited to the profit and loss account for treating it as capital in nature. It is not the case of the Assessing Officer that the amount utilized in the construction represented interest bearing borrowed funds of the assessee. Per contra, there is no material on record to disbelieve the contention of the assessee that he had sufficient surplus funds which was utilized in the construction. Unless a nexus between the interest debited and the funds utilized is proved, the stand taken by the department regarding capitalization of interest, in our opinion, cannot be accepted. Therefore, the addition made by the authorities below in this head by way of impugned reassessment proceedings, deserves to be deleted. In respect of exhibition expenses paid to M/s. Mullar & Phipps India Ltd., there is no rebuttal of the contention of the assessee made before us that this point was raised by the Assessing Officer in the original assessment proceedings. The assessee had filed its reply, which stood accepted by the Assessing Officer with due application of mind. In these circumstances, the addition made by the authorities below on this account by reopening the assessment u/s. 147/148, in our considered opinion, is not tenable and stands deleted as also held in several decisions - Decided in favour of assessee.
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2018 (1) TMI 280
Levy of penalty u/s 271(1)(c) - income surrendered pursuant to search operation carried out on the assessee - Held that:- In all the cases referred to by the assessee, it was held that for the purpose of imposition of penalty u/s 271(1)(c) of the Act, no reference could be made to the returned income u/s 139 of the Act and it was only the income returned u/s 153A, as per the scheme of search assessment, which could be taken cognizance of since the scheme of search assessment as designed by the Legislature did not prescribe to take into account the earlier assessment proceedings whether abated or not. Further in all those cases, that the assessee could not be deemed to have concealed the particulars of his income as per Explanation-5 also since the additional income declared in the return of income filed u/s 153A did not pertain to any asset i.e money, bullion, jewellery or other valuable article or thing found in the possession of the assessee. In this context, it was held that no penalty u/s 271(1)(c) of the Act could not be imposed. In the present case, the assessee is clearly deemed to have concealed particulars of his income as per the applicable Explanation 5A to section 271(1)(c) of the Act as held above by us.Therefore the fact of having disclosed the entire income in the return filed u/s153A will be of no assistance to the assessee.Such an interpretation, in our considered opinion, would render Explanation 5A to section 271(1)(c) otiose. - Decided against assessee
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2018 (1) TMI 279
Requirement of AADHAAR number in filing return of income - petitioner seeking permission to file his income tax returns either manually or through appropriate e-filing facility without insisting the petitioner to produce his aadhaar card and/or enrollment ID as defined under Section 139AA - Constitutional validity of Section 139AA - Held that:- The prayer sought for in this writ petition is squarely covered by the earlier decision of this Court in the case of Thiagarajan Kumararaja vs. Union of India [2017 (11) TMI 584 - MADRAS HIGH COURT] On a reading of the quoted paragraphs in the decision in the case of Binoy Viswam, [2017 (6) TMI 478 - SUPREME COURT OF INDIA] it would clearly show that the Hon'ble Supreme Court has not stayed the Proviso to Sub-Section (2) of Section 139AA of the Act and the partial stay would be applicable only to facilitate the other transactions, which are mentioned in Rule 114B of the Rules, which pertains to transactions, in relation to which, PAN is to be quoted in all documents for the purpose of Clause (C) of Sub-Section (5) of Section 139A of the Act. Therefore, to state that the partial stay granted by the Hon'ble Supreme Court would enure to the benefit of the petitioner even for filing income tax returns is a plea, which is not sustainable and is liable to be rejected.
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2018 (1) TMI 278
Condonation of delay - Appellate Tribunal dismissing the Appeal as unadmitted in limine by declining to condone the delay caused in filing the Appeal - Held that:- We direct the appellant/assessee to pay 50% of the disputed tax, which, according to the assessment order, is ₹ 11,95,591/- within a period four weeks from the date of receipt of a copy of this order. If the appellant complies with the condition, i.e. by remitting 50% of the disputed tax, then, the Tribunal is directed to condone the delay, and take the Appeal on its file, and take a decision on merits and in accordance with law. However, if the assessee fails to comply with the conditional order within the stipulated time, the benefit of this order will not enure to the assessee/appellant and this Appeal would be automatically dismissed, without further reference to this Court. On the above terms, the substantial questions of law raised in this Tax Case Appeal are answered accordingly.
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2018 (1) TMI 277
Nature of land - agricultural land - Held that:- Whether the land is an agricultural land or not is essentially a question of fact and the question has to be answered in each case having regard to the fact and circumstances of the case. One among the tests laid down by the Hon'ble Supreme Court in Sarifabibi Mohmed Ibrahim (1993 (9) TMI 10 - SUPREME Court) was that the fact that the land is entered as agricultural land in the revenue records and is assessed as such under the Land Revenue Code would be a circumstance in favour of conclusion that it is an agricultural land. It was pointed out that this would raise only a prima facie presumption and the said presumption can be destroyed by other circumstances pointed to the contrary conclusion. In our considered view, the presumption that if the land is recorded as agricultural land in the revenue records, it would only enure in favour of the assessee and the onus to dislodge the said presumption is on the Revenue. In the instant case, apart from the revenue records classifying the land as agricultural land, the Assessing Officer accepted the agricultural income declared from the said property for the Assessment Year 2010-11 and completed the assessment. Merely because the property fetched an income of only ₹ 65,300/- during the relevant Assessment Year is not a ground to discredit the assessment by itself, which has determined the character of the land to be agricultural land. Thus, we find that the entire issue is purely factual and no substantial question of law arises for consideration in this appeal.
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Corporate Laws
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2018 (1) TMI 275
Oppression and mis-management - unlawful allotment of shares - shareholding and voting rights of petitioner company has been reduced - power of the board of directors to transfer / allot shares - Scope of arbitration - Held that:- It is found that the facts of the case would attract the provisions of Section 397 of the Companies Act, 1956, but winding up would unfairly prejudice the members. The instant petition is disposed of with the following directions:- (i) CA No.255 of 2015 filed by the respondents is dismissed; (ii) 14,96,000 shares now existing in the name of R-2 company be transferred back in the name of P-1 and its name be entered in the register of members of R-1 company. At the same time, the amount of ₹ 15,00,000/- shown in the account of P-1 company towards loan to AP Oil Mills shall stand written off and the name of R-2 company be omitted from the register of members of R-1 company; and (iii) R-1 company shall hold fresh meeting of the Board of Directors offering the proportionate shares out of additional allotment of 3,50,000 shares in 2011 and 4,00,000 shares in 2012 respectively at the rates at which these were transferred to some of the respondents. The transfer shall be made in favour of the petitioners proportionately as per shares held by P-2 to P-9, on these petitioners offering to subscribe to these shares at the rates allotted to some of the respondents within the time to be allotted by R-1 company in the said meeting and they shall deposit the required amount with R-1 company; and (iv) Failing the petitioners to send the offer for allotment of proportionate shares as were held by them on the date of allotment of additional shares or in making payment, the Board of Directors of R-1 company would be at liberty to decide against the said allotment of proportionate shares; and (v) Rest of the shares out of the additional allotment of 3,50,000 and 4,00,000 shares, will continue to be held by the respondents to whom the shares were allotted; and (vi) The petitioner No.1 is not to be offered any share in these additional shares on the basis of this order as P-1 company became the shareholder only on 19.05.2010. Rest of the prayers regarding mis-management on account of falsification of the accounts or siphoning of the funds and other reliefs are declined.
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PMLA
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2018 (1) TMI 273
Offence under PMLA - inadmissible evidence in passing the Impugned Order - failure to establish case on electronic evidence - Held that:- Video tapes and their transcripts are inadmissible as evidence. The Ld. Director could not have relied upon inadmissible evidence in passing the Impugned Order without such compliance. Further, it is also a matter of fact that original equipment used in the recording of the evidence were not produced in order to establish the case for the purpose of imposing the major penalties u/s. 13(2)(d) of PMLA, 2002. Not only that the journalists who has conducted the sting operation of cobra post has not been examined and the department is merely relying on certain video tape recordings of the conversations between the bank officials and the journalists of cobra post. It is also the admitted position that the transcripts and videos were not re-produced in the same condition. It was rearranged and sliced versions of the actual conversations and cannot be considered as conclusive proof of the actual conversations, certain Cobrapost reporter had with the featured employees of the Appellant Bank. The Cobrapost transcripts not only reflect selective conversation, the video and written transcripts do not match in entirety. The Report of the independent forensic investigator engaged by the one of the Appellants who has carried out a forensic audit on the allegations made vide Cobrapost sting operation, clearly establishes that the sting video footage and the transcripts available do not provide the complete conversation or complete record of events as they have possibly been rearranged and edited to provide a misleading picture (Annexure D at Page 121 of the Appeal has been filed along with the appeal by the said appellant). It was also been reiterated by the Appellant at multiple instances including its reply dated 24 January 2014 to the Show Cause Notice, during the personal hearing granted to the Appellant on 24 February 2014, additional submissions placed by the Appellant on 05 March 2014 and in Appellant’s detailed response of 6 May 2014. Copies of the same have been filed as Annexure H to K. It is evident that the Ld. Director before passing the Impugned Order even failed to investigate beyond the edited tapes and transcripts. Admittedly, the FIU, till date has not received the complete and unedited tapes. The FIU has not produced the original recorded tapes and has sought to rely upon the incomplete version as broadcasted by the Cobra Post Reporter. The transcripts of such incomplete versions of purported sting operation cannot be considered. Thus it is apparent that the respondent has failed to establish its case on electronic evidence. The transcripts uploaded online is not admissible and authorized under the law in the absence of proving its case as alleged by the respondent. Under these circumstances, for the reasons explained, impugned order passed by the respondents in all the matters are modified to the extent that the present matters are covered u/s. 13(2)(a) and not under section 13(2)(d) of the PMLA, 2002. The finding given by the respondent for major penalty is not sustainable as on merit the respondent has not proved its case of major penalty. But in future, the banks and their employees are directed to be careful and if these types of discussion are happened, it should be reported u/s. 12 of PMLA, 2002.
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Service Tax
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2018 (1) TMI 272
Refund of unutilized CENVAT credit - Goods sold by a DTA Unit to a 100% EOU unit - Rule 5 of CCR 2004 - monetary limit - Held that: - The issue is now covered by the decision of this court in the case of The Commissioner of Central Excise & Service Tax V/s M/s Gulshan Chemicals Ltd, A 595, Industrial Area, [2018 (1) TMI 197 - RAJASTHAN HIGH COURT] where it was 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/- - refund allowed - appeal dismissed - decided against Revenue.
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2018 (1) TMI 271
Security Agency Service - demand of service tax - Held that: - identical issue decided in the case of The Deputy Commissioner of Police Jodhpur, Superintendent of Police Versus Commissioner of Central Excise and Service Tax, Jaipur [2016 (12) TMI 289 - CESTAT NEW DELHI], where it was held that police department, which is an agency of the State Govt., cannot be considered to be a person engaged in the business of running security services. Consequently, the activity undertaken by the police is not covered by the definition of Security Agency under Section 64(94) of the Act - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 270
Classification of services - whether the services rendered by the appellant in respect of 52 contracts entered with various Govt. authorities need to be taxed under Maintenance & Repair Service (MMRS)/ Commercial & Industrial Construction Service (CICS)/Erection, Commissioning or Installation Services (ECIS)? - Held that: - It is on record and undisputed that the adjudicating authority has specifically held that all the 52 contracts which has been executed by the appellants are with material - Learned Counsel was correct in bringing to our notice that the said findings of the adjudicating authority that the appellant is eligible for abatement of 67% of the value of the goods is in itself the acceptance of the fact that the contracts were executed with material. It is also on record that the Revenue has not contested these findings of the adjudicating authority before the Tribunal. Demand raised in some of the SCN in other classification, which was not proposed in the SCN - Held that: - the law is fairly settled by the judicial pronouncement on this point i.e. the adjudicating authority cannot classify services if it is not proposed in the SCN. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 269
Refund claim - denial on the ground of invoices without address and missing invoices and input services on which credit taken are ineligible input service since they did not have any nexus with output services exported - Held that: - the processing of refunds after the amendment to Rule 15 w.e.f 1.4.2012 is required to be done on a more liberal basis without insisting for one to one correlation. That however will not mean that the input service can also be one which is specifically barred by Rule 2(l) of the CCR 2004 - Even after the amendment to Rule 2(l) w.e.f. 1.4.2011, it has been consistently held that so long as a particular input service is not specifically barred by Rule 2(l) or is not used for the personal consumption of an employee etc. that would very much an eligible input service - refund allowed. In the instant case, appellants have waived their right to show cause notice. However in case, sanctioning authority finds that any particular credit amounts are liable for rejection for the reason that they fall foul of the Rule 2(l), a SCN should have been issued to the appellant. This is certainly was not done. For the limited purpose of providing an opportunity to the appellant to produce necessary documents in respect of credits availed without STC code, missing invoices etc., the matter is remanded to the original authority concerned. Appeal allowed in part and part matter on remand.
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2018 (1) TMI 268
N/N. 9/2009 - ST dt. 03.03.2009 - denial on the ground that the Appellant was required to discharge the service tax liability and follow refund procedure prescribed under notification - Held that: - the Tribunal in case of Reliance Port and Terminals [2013 (10) TMI 339 - CESTAT AHMEDABAD] held that Section 51 of the SEZ Act which defines export shall have overriding effect in case of any inconsistent provisions in any other Act - no service tax can be levied on services provided to units situated in SEZ nothwithstanding anything contained in N/N. 9/2009-ST as amended by N/N. 15/2009-ST as the said exemptions were only to operationalise exemption from payment of duty on services supplied to SEZ unit and Developer - the Appellant are eligible for exemption from payment of service tax on services provided to SEZ unit - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 267
Short payment of service tax - Manpower Supply services - Held that: - We do not find any evidence in the form of contract or purchase order - the demand has been correctly made against the Appellant. Penalty - the Appellant were paying a meager amount towards service tax and in between November’ 06 to Aug’ 08 no amount was paid by them. They also did not file any ST - 3 Return and it was only detection by the department that they discharged the service tax liability - penalty upheld. The Appellant is eligible for 75% waiver of the penalty imposed under Section 78, rest of the demand and penalty confirmed against the Appellant is upheld. Appeal disposed off.
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2018 (1) TMI 266
Business Auxiliary Services - amount received towards playing for IPL and for promotional activities - Held that: - though in the SCN the Respondent was made liable to pay service tax but as rightly held by the adjudicating authority, no specific clause of Section 65 (19) defining “Business Auxiliary service” has been shown to be applicable to levy service tax. It is not appearing from the show cause notice as to what goods or services the Respondent has promoted or helped to promote - The Brand promotion fee was not taxable until ‘Negative list’ came into effect from 01.07.2010 and hence there cannot be any liability upon the Respondent till that period - the Respondent is not liable to service tax - appeal dismissed - decided against Revenue.
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2018 (1) TMI 265
Levy of service tax - service of business promotion provided by it to the service recipient - whether taxable under management or business consultancy service or otherwise? - Held that: - when the meaning of the business and management consultancy is provided by law is read, that does not cover land development charge within its fold to give rise to taxable event for the purpose of levy under Finance Act, 1994. Accordingly there shall be no levy on the land development charge under the category of business and management consultancy. Penalty - Held that: - taking into consideration co-operation of the appellant who does not dispute the liability and has discharged the tax liability with interest, there shall not be penalty on this count under any of the provisions of the Finance Act, 1994 when order of the Authority below also does not exhibit contumacious conduct of the appellant to bring it to the ambit of Section 78 of Finance Act, 1994. Appeal allowed in part.
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Central Excise
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2018 (1) TMI 264
Clandestine manufacture and removal - iron and steel products - burden of proof - Held that: - The burden to prove clandestine manufacture and removal is on the revenue. Direct evidence of clandestine removal would rarely be available and the standard of proof has to be necessarily based on preponderance of probabilities. Conjunctures and surmises cannot be the basis of proof, when clandestine removal is alleged and for establishing the said charge, there should be positive evidence - when the department alleges clandestine production and removal of goods, without due proper accounting in the records and without payment of duty, the burden of establishing the allegation lies heavily on the department. In the case on hand, the department has not discharged the burden - appeal dismissed - decided against Revenue.
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2018 (1) TMI 263
Clandestine manufacture and removal - recovery of Kaccha slips showing unaccounted sale of wrist watches and recovery of price tags of various models with MRP of above ₹ 500/- per piece - corroborative evidence on unaccounted clearances of dutiable items - Held that: - the nature of goods is such that detailed documentation on transportation may not be forthcoming. These are wrist watches which do not require lorries/vehicles to transport, considering the scale of operation undertaken by the main appellant. In fact, in the appeal filed by the appellants, no substantial ground has been taken to contest the case on merit. General observation has been made regarding lack of evidence and non- application of extended period etc. Benefit of reduced penalty - Held that: - in case duty demanded along with the interest is paid within 30 days of communication of the order, the amount of penalty to be paid shall be 25% of the penalty imposed subject to the condition that such reduced penalty is also paid within the period so specified. In the present case, the appellants did not discharge the full duty liability with interest along with 25% of the penalty within 30 days of receipt of the adjudication order. As such, there is no question of availing provision of reduced penalty in the present case. Extended period of limitation - Held that: - The case has been made based on the private records and certain price tags recovered from the unit of the appellant which were corroborated independently by the two Directors of the main appellant. As such, we note that the present case is covered by the proviso clause of Section 11A(1) for demand for extended period. Appeal dismissed.
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2018 (1) TMI 262
Valuation - brass scrap - Whether in the facts and circumstances of the case, the charge of under valuation is sustainable against the respondent or not? - Held that: - the respondent has suffered duty on the finished goods, the job charges are not disputed by the revenue and all the brass scrap sent to the job worker have been received by the respondent after conversion into the brass rods, in that circumstance, it is situation of revenue neutrality and there is no loss of revenue to the department. In that circumstance, the charge of undervaluation is not sustainable against the respondent. Extended period of limitation - Held that: - the respondents were filing their RT 12 returns regularly and maintaining statutory records - the activity of selling brass scrap at a lower price than the value shown in the balance sheet was well known to the department - extended period not invocable. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 261
Valuation - whether or not the appellants are liable to pay Special Excise Duty (SED) on BIB as a compound preparation intended for use in the automatic vending machine? - The case of the appellant is that their product is a compound preparation for making non-alcoholic beverages and this automatically does not imply soft drink concentrate. Held that: - Such compound preparation cannot become part of Heading 2106 90 19 even after applying Note 3 of 2nd Schedule. We find Notes 1 and 2 of the 2nd Schedule, extracted (supra) will make it clear that the Chapter Notes and Supplementary Notes of the 1st Schedule shall apply to the interpretation of the 2nd Schedule. As such, we find that valid and admitted classification of BIB under 2106 90 50 in terms of Supplementary Notes 4 of Chapter 21 of 1st Schedule cannot be included under Tariff item 2106 90 19 of 2nd Schedule - the respondents have correctly classified the items in question under tariff item 2106.9050 of first schedule and no SED payable by the respondents. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 260
Clandestine removal - Validity of second SCN - extended period of limitation - case of appellant is that the extended period of limitation is not invokable in subsequent proceedings when the earlier proceedings on same subject matter are decided/pending - 2 invoices on which purchase of raw material was allegedly made via the first stage dealer M/s.Shiv Shakti Steels - 24 invoices on which purchase of raw material was shown directly from M/s.HSAL. Held that: - Had the appellant informed the DGCEI about availment of credit in complete details and come fully clear on 27.8.2008 itself, the same would have become part of the first show cause notice itself. Since it was deliberate suppression and positive act of mis-declaration by the Director of the NSPL, which was discovered after his second statement dt.23.12.2009, I find that the Department had no option but to issue second show cause notice. However, a different picture emerges with respect to 2 invoices pertaining to M/s. Shiv Shakti Steels. I find that the transactions, which have been made by M/s.HSAL through the dealer M/s.Shivshakti Steels, were in the knowledge of the Department when first show cause notice was issued on 2.12.2008. This is evident from the fact that the statement of Ashok Bansal, partner in M/s. Shiv Shakti Steels was recorded on 19.11.2008 wherein he was questioned about these invoices. Hence, these two invoices could not be included in second show cause notice - demand in respect of 2 SCN set aside. The new facts relating to 24 invoices came to the notice of the Department only after second statement of Shri Dinesh Goyal - While some part of the investigation, in both proceedings are undoubtedly common, but the suppressed information relating to 24 transactions directly with M/s.HSAL between 18.2.2006 and 7.6.2006 were not included in his categorical statement given by Shri Goyal on 27.8.2008 and deliberately withheld. Hence I hold that the department is justified in invoking the extended period for the second show cause notice in respect of 24 invoices - the demand in respect of 24 invoices issued by M/s.HSAL is sustained. Penalty on M/s.NSP Forging Pvt.Ltd. - Held that: - since there was fraudulent availment of credit, suppression and mis-declaration, the penalty of equivalent amount to credit pertaining to 24 invoices referred hereinabove is thus sustained. Penalty on the Director under Rule 26(1) - Held that: - it is evident that Shri Goyal has played a vital role in receipt of only invoices from M/s.HSAL to give appearance that the transactions were genuine. Besides, he did not disclose full information as required of him under law in his earlier statement 27.8.2008 and the details of 24 invoices in the show cause notice dt.23.2.2010 came to light in his statement dt.23.12.2009 - penalty on the Director is justified - however, quantum of penalty is excessive considering the duty evaded and the same is therefore reduced to ₹ 6 lakh. Appeal disposed off.
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2018 (1) TMI 259
Clandestine removal of goods - corroborative evidences to hold against the appellant on the charge of clandestine removal - cash receipt entries pertaining to their trading activity in scrap - Held that: - the trading activity involving turnover of huge amounts and which was not an occasional business activity; hence cannot fail the memory/miss the attention of the appellants, whatever may be the circumstances they were under - the appellants also failed to prove with documentary evidence that the subject cash entries pertains to their scrap sales. No doubt, the VAT returns/some scrap purchase documents submitted by the appellants may show that the appellants were into trading activity of scrap, but these alone would not establish that the subject cash entries were related to such scrap sales and to rebut the evidence collected, without any cogent and corroborative evidence on record. Cash entries relating to M/s TUL - Held that: - there is no matching/correlation of even single entry to get convinced by the appellant s contention. Further, the documents available in record (weighment slips/register entries/etc) pertaining to clandestine clearances made to TUL, discussed in the notice, would prove beyond doubt that the appellant had the practice of clearing the ingots clandestinely, which fact not disputed by the appellant. The department had adduced evidence in the form of scrap and sponge iron (raw materials for manufacture of ingots) purchased from M/s Archana Iron Trades and M/s Sheetal Shipping respectively, as discussed at para 5.3.2 and 5.3.3. of the notice - The department cannot be expected to unearth every piece of evidence which is in the domain knowledge of the manufacturers engaged in such activity to prove the case with mathematical precision. Therefore, in cases of clandestine clearances, as the one before me, the preponderance of probabilities, in the face of evidence collected and statements recorded, the charge against the appellants held to be as proved. Shri Ramanuj Agarwal and Ambika Prasad who were the partners of the M/s Raghava Ispat had admitted the clandestine clearances and these statements were never retracted. The partners of the M/s Raghava Ispat, having admitted clandestine removals, giving details, it cannot be said these statements were given out of confusion lack of documents as they are the only persons who will be benefited by the clandestine operations. Appeal dismissed - decided against appellant.
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2018 (1) TMI 258
Refund claim - unjust enrichment - Section 11B of CEA - Held that: - the ld. Commissioner (Appeals) has examined the issue of unjust-enrichment independently holding that respondents were required to clear the goods during the impugned against Central Excise gate pass and have issued composite invoice without showing duty element - reliance placed in the case of CCE, Chandigarh vs. Metro Tyres Limited [1995 (12) TMI 217 - CEGAT, NEW DELHI] wherein it was held that burden to prove that incidence of duty passed on to the customer is discharged by the assessee when assessee's invoice during the material period showing a composite price and duty not indicated separately. Therefore the refund claim is admissible - ld. Commissioner (Appeals) has examined certain documents like certificate issued by Chartered Accountant, Finance Year wise Cost Data, Sample Invoices and thereafter has arrived at decision that refund claims were rightly sanctioned by the adjudicating authority - refund rightly allowed - appeal dismissed - decided against Revenue.
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2018 (1) TMI 257
Utilization of CENVAT credit account - vires of Rule 8 (3A) - Held that: - since utilization of Cenvat credit account, during the default period has been declared ultra vires, therefore the appellant has not violated the provisions of Rule 8 (3A) of Central Excise Rules, 2002. If the availability of Cenvat credit is taken into account, in that circumstance, no demand is sustainable against the appellant. Confiscation - redemption fine - Held that: - although during the defaulted period, the appellant has violated the provision of Rule 8 (3A) which has been declared ultra vires, in that circumstance, the credit can be utilized but under the said provisions, the goods are to be cleared on consignment wise, therefore, the goods are liable for confiscation. As the goods are not available for confiscation and not cleared under any bond, therefore, redemption fine cannot be imposed on the appellant - redemption fine set aside. Penalties u/r 25 & 26 of the CER, 2002 - Held that: - As the penalty under these rules can be imposed subject to the condition of section 11AC of the Act but the ingredients of section 11AC are missing. Therefore, the penalties under Rule 25 and 26 are not imposable on the appellant. Penalty u/r 27 - Held that: - as per Rule 8 (3A) of Central Excise Rules, 2002 as they were not paying duty on consignment wise, in that circumstance, during the defaulted period, the penalty is imposable. For such default, the provisions are invokable of Rule 27 of the Central Excise Rules, 2002 which prescribes a penalty of ₹ 5,000/- during the period in default can be imposed on the appellant - penalty on main appellant i.e. M/s.Ess Ess Kay Engg. Co.Pvt.Ltd. upheld. Appeal disposed off.
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2018 (1) TMI 256
Valuation - physician samples cleared by the respondents to brand owner - Section 4 of Central Excise Act, 1944 or not? - Held that: - these physician samples cleared by the respondent to the brand owner on some transaction value on which they have discharged the duty as per section 4 of the Act - on the similar facts, this Tribunal has examined the issue and held that the appellants have correctly valued the physician samples cleared by them on transaction value/as per CAS-4 in the case Themis Laboratories Pvt.Ltd. [2011 (2) TMI 713 - CESTAT, MUMBAI] - appeal dismissed - decided against Revenue.
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2018 (1) TMI 255
Extended period of limitation - suppression of facts - CENVAT credit - construction services - Held that: - On intimation from the Range Superintendent, the appellants have furnished the invoices regarding the said construction activity. In spite of that the department has not issued the SCN during the normal period. We find no element of evidence adduced by the department to hold that the appellant is guilty of wilful suppression of facts - the said demand cannot sustain on the ground of limitation. Penalty - disallowance of Input credit - Held that: - The appellants have already paid the said amount along with interest - penalty set aside. CENVAT redit - various input services - Held that: - the original authority has observed that the appellant has not produced the proof for having paid the value of services or the service tax to the service providers. The appellant has submitted that they would be able to furnish the documents. We therefore, are of the considered opinion that the appellants should be given a further chance to establish their case on this count - matter remanded to the adjudicating authority, who shall re-adjudicate this issue after giving a reasonable opportunity of personal hearing to the appellants. Appeal allowed in part and part matter on remand.
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2018 (1) TMI 254
CENVAT credit - manufacturing as well as trading activity - appellants availing credit on common input service which was used for manufacturing of dutiable goods as well as trading activity - Rule 6(3)(i) of CENVAT Credit Rules, 2004 - Held that: - the appellant have admittedly reversed the credit attributed to the trading activity availing the option available under rule 6(3)(ii). Therefore, Department cannot insist for some other option i.e. Rule 6(3)(i). As regards the issue that the appellant was not following the condition for availing the option of Rule 6(3)(ii), it is a procedural requirement and for want of procedural requirement, substantial benefit available to the assessee cannot be denied. The option claimed by the appellant under Rule 6(3)(ii) is legally available to the appellant. However, since the learned Commissioner on merit itself denied the option of Rule 6(3)(ii) and confirmed the demand in terms of Rule 6(3)(i), he has not verified the quantum of proportionate CENVAT Credit, which was reversed by the appellant. Therefore, the matter needs to be remanded only for the purpose of re-quantification of proportionate credit as claimed and submitted by the appellant. The demand of 5% of the value of traded goods confirmed invoking Rule 6(3)(i) is not sustainable. Appeal allowed by way of remand.
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2018 (1) TMI 253
CENVAT credit - goods used for construction of capital goods - Held that: - with effect from 07.07.2009 the definition of “input” appearing in Rule 2(k) of the Cenvat Credit Rules, 2004 has been amended and it specifically excludes cement, angles, channels, Centrally Twisted Deform bar (CTD) or Thermo Mechanically Treated bar (TMT) and other items used for construction of factory shed, building or laying of foundation or making of structures for support of capital goods from the ambit of definition of inputs - the appellants have used the steel items on which credit has been availed as supporting structure for the capital goods - credit on items used for fabrication of supporting structure cannot be allowed - appeal dismissed.
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2018 (1) TMI 252
CENVAT credit - transfer of credit - Rule 4(2)(a) of the Cenvat Credit Rules - Invocation of Rule 3(5B) of CCR - Held that: - Rule 3(5B) applies only to input/ capital goods which are either written off fully or partially or where this provision for writing off is made. In absence of any assertion by the revenue, the said rule cannot be invoked to deny cenvat credit to the appellants. In the instant case, the capital goods were cleared from the factory in the same financial year therefore the appellants could have availed the entire credit on the capital goods. Revenue cannot prevent the appellants their availing the entire credit in view of proviso to Rule 4(2)(a) - invocation of Rule 4(2)(a) of Cenvat Credit Rules has no basis. Appeal allowed.
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2018 (1) TMI 251
Valuation - electric poles - price variation clause - value of clearances exceeding ₹ 30 lakhs - Held that: - It is seen that the electric poles found in the factory of the appellants were found to be tallying with the internal records. In these circumstances, seizure and confiscation of the same cannot be justified especially because appellants had applied for registration prior to the said date - confiscation and redemption fine set aside. Penalty u/r 173Q - Held that: - penalty under Rule 173Q for the period upto 28.09.1996 is set aside - penalty equivalent to the amount evaded from 28.09.1996 onwards is upheld under Section 11AC - the option to pay 25% duty is hereby extended to the appellants, subject to the conditions of the section. Appeal allowed in part.
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2018 (1) TMI 250
CENVAT credit - various input services - Mediclaim/ Medical Insurance for employees - Grass cutting - Maintenance of Garden - PCC work - Road Work - Republic day celebration - Removal of Honey Comb - Held that: - as regards Mediclaim/ Medical Insurance for employees, if there is a requirement under factories act to provide insurance as claimed by the appellants, then in respect of the factory employees, the credit of the medical premium cannot be denied. In these circumstances, the impugned order so far as it relates to rejection of premium on medical premium is set aside and matter is remanded to the Commissioner to decide afresh - matter on remand. CENVAT credit - Grass cutting - Maintenance of Garden - Held that: - maintenance of factory premises is an activity which is directly related to the manufacturing activity. Clean atmosphere and safety are part and parcel of the manufacturing process - credit allowed. CENVAT credit - laying of PCC in pipeline - Held that: - Credit has been denied as the appellants have not produced any documentary evidence that the credit is in respect of supplying and laying PCC in the pipelines. In the appeal memo no evidence has been produced regarding nature of job done and therefore the appeal in respect of PCC work is dismissed - credit denied. CENVAT credit - repair and maintenance of internal roads within the factory premises - Held that: - No reasons have been given in the impugned order for denying the credit in respect of road work. In the absence of any reason this order is set aside and remanded to Commissioner (Appeals) for reconsideration - matter on remand. CENVAT credit - Republic Day celebration - Held that: - No argument has been submitted by the appellants in their appeal memo. In the absence of any argument in support of their claim, credit cannot be allowed - credit disallowed. CENVAT credit - Removal of Honeycomb from the factory premises - Held that: - removal of Honeycomb is part of maintenance of the factory premises. Credit of the services availed for maintenance of factory premises cannot be denied - credit allowed. Appeal allowed in part and part matter on remand.
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2018 (1) TMI 249
Whether the appellant have exceeded the exemption limit of ₹ 15 lakhs in every financial year i.e. from 1995-96 to 1998-99 and whether they are eligible for exemption N/N. 75/87-CE dt.1.3.1987 on the clearances of heat exchangers which is a part of refrigeration and air conditioner machine? Held that: - From the reading of Explanation II in both the notifications it can be seen that in case of exemption based on value of such clearances shall taken together for the purpose of aggregate value therefore in case of both the notification the value of both the clearances will be added - in the year 1996-97 and 1997-98 the aggregate value has exceeded threshold limit of ₹ 15 lakhs. Therefore in these two years exemption N/N. 75/87-CE will not be available over and above threshold limit of ₹ 15 lakhs - the duty needs to be re-quantified. Matter remanded to the adjudicating authority only for re-quantification of demand.
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2018 (1) TMI 248
Classification of goods - Residual Crude Petroleum Oil - classified under CTH 2709.00.00 or under CTH 27139000? - Held that: - similar issue decided in the case of Commissioner of C. Ex., Kanpur Versus Bajrang Petro Chemicals Pvt. Ltd. [2017 (11) TMI 596 - CESTAT ALLAHABAD], where it was held that the Residual Crude Oil is classifiable under Tariff Item No. 2709.00.00 - SCN not sustainable - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (1) TMI 247
Registration of dealer - KVAT - casual dealer in Chicken - The petitioner's claim is that he is having business only to a turnover of less than ₹ 10 lakhs and he is not required to take registration - Held that: - Section 6 of the KVAT Act states that in the case of an importer or casual trader the turnover limit of ₹ 10 lakhs is not applicable. The petitioner, in any event, had to take out registration - revision dismissed.
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