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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter October 16, 2019 Case Laws in this Newsletter: GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Articles EMPLOYEES CONTRIBUTIONS TO FUNDS- UN-NECESSARY LITIGATION BY REVENUE. Classification of services relating to vehicles – rental, leasing, transportation and RCM All about Limited Review in FAQs Format Recent Advance Rulings News Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver Farmers be Made Stakeholders in The Coffee Value Chain: Piyush Goyal India to be innovation capital of the world; Startups to power India’s growth: Piyush Goyal CBIC and Customs launch scheme to attract investment and support Make in India programme Notifications Companies Law F. No. A-12018/02/2017- Ad-IV/P - dated 14-10-2019 - Co. Law Notification for Delegation of powers to Tribunal -Section 458 read with section 418 of the Companies Act 2013 Customs 75/2019 - dated 15-10-2019 - Cus (NT) Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver GST 05/2019 - dated 14-10-2019 - UTGST Seeks to amend Notification No. 14/2018-Union territory Tax, dated the 8th October 2018 GST - States S.O. 390 - dated 14-10-2019 - Bihar SGST Bihar Goods and Services Tax (Sixth Amendment) Rules, 2019 S.O. 389 - dated 14-10-2019 - Bihar SGST Seeks to amend Notification No. S.O. 357, dated the 05th September, 2019 S.O. 388 - dated 14-10-2019 - Bihar SGST Seeks to make filing of annual return under section 44 (1) of BGST Act for F.Y. 2017-18 and 2018-19 optional for small taxpayers whose aggregate turnover is less than ₹ 2 crores and who have not filed the said return before the due date S.O. 387 - dated 14-10-2019 - Bihar SGST Seeks to prescribe the due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020 S.O. 386 - dated 14-10-2019 - Bihar SGST Seeks to prescribe the due date for furnishing FORM GSTR-1 for registered persons having aggregate turnover of up to 1.5 crore rupees for the quarters from October, 2019 to March, 2020 S.O. 385 - dated 14-10-2019 - Bihar SGST Seeks to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020 19/2019 - State Tax (Rate) - dated 30-9-2019 - Chhattisgarh SGST Seeks to exempt supply of goods from FAO for specified projects- New notification 18/2019 - State Tax (Rate) - dated 30-9-2019 - Chhattisgarh SGST Seeks to amend notification No 2/2019- State Tax (Rate) dated 7.3.2019 16/2019 State Tax (Rate) - dated 30-9-2019 - Chhattisgarh SGST Seeks to amend notification No 3/2017- State Tax (Rate) dated 28.6.2017 15/2019 - State Tax (Rate) - dated 30-9-2019 - Chhattisgarh SGST Seeks to amend notification No 2/2017- State Tax (Rate) dated 28.6.2017 14/2019 - State Tax (Rate) - dated 30-9-2019 - Chhattisgarh SGST Seeks to amend notification No 1/2017- State Tax (Rate) dated 28.6.2017 CCT/26-2/2018-19/49/1772 - dated 11-10-2019 - Goa SGST Seeks to prescribe the due date for furnishing of return in FORM GSTR-1 for registered persons having aggregate turnover more than 1.5 crore rupees for the months of October, 2019 to March, 2020 CCT/26-2/2018-19/48/1771 - dated 11-10-2019 - Goa SGST Prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020 4-DA/2019 - No. FD 47 CSL 2017 - dated 30-9-2019 - Karnataka SGST Seeks to bring rules 10, 11, 12 and 26 of the CGST (Fourth Amendment) Rules, 2019 in to force 18/2019 - No. FD 47 CSL 2017 - dated 30-9-2019 - Karnataka SGST Seeks to amend notification No 14/2019- Central Tax dated 7.3.2019 so as to exclude manufacturers of aerated waters from the purview of composition scheme 33470 - FIN-CT1-TAX- 0005/2019 - dated 30-9-2019 - Orissa SGST Appointment of Shri Sushil Kumar Lohani,IAS , the Commissioner of CT & GST as the Commissioner of Profession Tax Circulars / Instructions / Orders SEZ Instruction No. 99 - dated 10-10-2019 Compliance of Contiguity Condition of SEZ in terms of Rules 5 & 7 Customs PUBLIC NOTICE No. 08/2019 - dated 11-9-2019 Eligibility Criteria for availing of DPD Scheme by Importer Highlights / Catch Notes GST Levy of GST - Supply or not - receipt of prize money from horse race conducting entities - The applicant never passes the ownership of horses to the race organizer. Therefore, participation of horses for the purpose of events organized by the clubs is a supply of services to the event organizer. Visit to Get Source Classification of documents - Secured Printing and Delivery of Pattadar Passbook cum Title Deed - the Tile deed and Passbook qualify to be classified under CHSN 4820 and not under HSN 4907 Visit to Get Source Classification of supply - printing and supply of paper and paper boards - job work - If the final printed material is a book or a journal or a periodical and if the materials on which the printing is done are provided by the customers, then the activity would be covered under entry 26(i)(d) and would be liable to tax at 2.5% CGST plus 2.5% SGST. Visit to Get Source Levy of CGST - Providing Accommodation services to SEZ units - zero rated supplies or not - The supply of accommodation services provided to a SEZ Unit would be treated as a Zero-rated supply and this is subject to the provisions of section 17(5) of the CGST Act. Visit to Get Source Classification of services - sub-contract - Construction of residential complex - - This works contract is for a construction of a civil structure and since it is a residential real estate project, the works is predominantly for use other than commerce, industry or any other business or profession and hence it is covered under clause (a) of the entry 3(vi) of the Notification, subject to the conditions. Visit to Get Source Classification of services - Rate of tax - Development of Airport by construction of Runway, Taxi track, Apron, Isolation bay, Perimeter Road including Earth work and other allied works - the AAI is a Government Entity. Visit to Get Source Income Tax Revision of assessment order u/s 263 - Rejection of claim of depreciation - In the absence of the requisite evidence in support of the claim that the solar generators were purchased, installed, put to use for business and the part payment of the same was also paid, claim cannot be allowed. Visit to Get Source Reopening of assessment u/s 147 - additions u/s 68 - it is specifically found that cash were deposited in the Bank accounts of entry providers from where the amounts in question have been transferred to the account of the assessee. Therefore, there is escapement of income chargeable to tax - additions confirmed. Visit to Get Source Addition on account of Electricity expenses - merely because the electricity meter is not in name of the both the owners and is in name of one of the owners only, the same cannot be a basis for disallowance of electricity expenses Visit to Get Source TDS u/s 194H - Commission payment made to NPCI - the payment made to NFS could not be considered as commission or brokerage liable for deduction at source. Visit to Get Source Exemption u/s 11 - charitable activity u/s 2(15) - The surplus derived from running the STD booths, pharmaceutical shops etc. was incidental and ancillary to the dominant object of taking care of physically and mentally challenged persons and uplifting them and enabling them to survive and live in this society. - Benefit of exemption allowed. Visit to Get Source Customs Classification of imported goods - the multimedia speakers even if they are having additional features like USB port, etc. will appropriately be classified under CTH 8518 as pre-dominant function of the electric apparatus remains as a speaker. Visit to Get Source Action against the Customs Broker (CB) - Time limitation - enquiry report was submitted after expiry of 90 days - The intention of CB to not to enable the Department to adhere to the impugned time limit - the time line of Regulation 20(5) CBLR, 2013 is mere directory in nature and the non compliance thereof shall not vitiate the action taken against the defaulting CB. Visit to Get Source Service Tax VCES declaration - allegation of false declaration on the basis of TDS statement 26AS - Unless it is established that the entire payments received as reflected in Form 26AS were on account of services provided and such services did not have any provisions for abatement nor there were any exemption then only such payments received are required to be considered as consideration for computation of Service Tax. Since such exercise was not undertaken the demand raised is presumptive. Visit to Get Source Central Excise Short payment of duty - Adjudicating Authority obtained report from the field formation however, the report was obtained at the back of the appellant after concluding the hearing - there is a clear violation of natural justice. Visit to Get Source Case Laws: GST 2019 (10) TMI 528 Levy of GST - Supply or not - Whether receipt of prize money from horse race conducting entities, in the event horse owned by the applicant wins the race, would amount to supply under section 7 of the Central Goods and Service Tax Act, 2017 or not and consequently, liable to GST or not? - HELD THAT:- The activity undertaken by the applicant is analysed in view of above provisions. It is seen that the applicant is undertaking the services of providing specialized and trained horses for participation in the horse race. The applicant has already submitted that he is receiving the prize money from the horse race conducting entities, in the event, horse owned by the applicant wins the race. Thus, the prize money is nothing but the consideration received by the applicant. The activity undertaken by the applicant is already detailed into earlier paras. The applicant is undertaking the activity of rearing, training, maintaining and providing the horses, that are specialized one and according to the requirement of appropriate race authorities, for participating in horse races - We find this activity, as an activity covered by clause (a) of the definition of business under Section 2(17) of CGST Act, 2017 - The applicant never passes the ownership of horses to the race organizer. Therefore, participation of horses for the purpose of events organized by the clubs is a supply of services to the event organizer. All the ingredients of supply of services are satisfied in the activity undertaken by the applicant in respect of providing horse to the race club/ event organiser and receiving consideration thereof on winning of race. Therefore, this transaction is clearly covered under supply of services under section 7 of CGST Act. The applicant s services are not covered under exemption notification No. 12/2017 of CGST ACT and therefore, this transaction is not covered under exemption category of services. Hence, the N/N. 11/2017, which covers taxable supply of services and rate of tax thereon. The applicant s activity and services rendered are not specifically described in the said notification 11/2017 and hence, it is covered by the entry at Sr. no. 35 i.e. Other services and other miscellaneous services including services nowhere else classified and are held taxable services @ 18 %. The applicant s transaction is a supply of services, under entry at Sr. no. 35 of notification no. 11/2017 i.e. taxable services and liable to tax @ 18% under GST Act - Answered is in affirmative. 2019 (10) TMI 527 Classification of documents - Secured Printing and Delivery of Pattadar Passbook cum Title Deed - Whether Pattadar Passbook cum Title Deed (PPB cum TD) is a Document of Title so as to classify under HSN 4907 or as a Passbook under HSN 4820? HELD THAT:- A title deed and passbook shall be issued in accordance with the record of rights and shall have the same evidentiary value with regard to the title for the purpose of creation of mortagage under the provisions of Transfer of Property Act, 1882 as a document registered in accordance with the provisions of the Registration Act, 1908. On the basis of the examination of the provisions of The Telangana State Rights in Land Pattadar Passbooks Act - 1971 (Act no. 26 of 1971) this Authority is of the considered view that the Tile deed and Passbook qualify to be classified under CHSN 4820 and not under HSN 4907. 2019 (10) TMI 526 Classification of supply - supply of goods or supply of services - rate of tax - printing and supply of paper and paper boards - printing under job work. Where the principal material i.e. paper and paperboard belong to the applicant, on which the content supplied by the customer is printed and the finished goods are supplied - HELD THAT:- Since the printing would be the principal supply of the composite supply, in these cases, the entire composite supply would be treated as a supply of services by way of printing (principal supply) and the tax rate applicable to such printing would be applicable on the entire value of such supply. Entry no. 27 of Notification No. 11/2017 - Central Tax (Rate) was substituted to bring in the sub-entry (i) which reads as Services by way of printing of newspapers, books (including Braille books), journals and periodicals, where only content is supplied by the publisher and the physical inputs including paper used for printing belong to the printer which deals with printing of newspapers, books, journals and periodicals on the physical inputs of the printer himself, which is taxable at 12% - If the printed item is not newspaper or book or journal or periodical, then the services of the applicant is covered under Entry No. 27(ii) which reads other manufacturing services; publishing, printing and reproduction services; material recovery services, other than (i) above and hence is liable to tax at 18% Where the principal material i.e. paper and paperboard belong to the customer, on which the content supplied by the customer is printed and the finished goods are supplied - HELD THAT:- Since the nature of activity of the applicant is printing, entry 26(ii)(b) is not applicable. If the final printed material is a book or a journal or a periodical and if the materials on which the printing is done are provided by the customers, then the activity would be covered under entry 26(i)(d) and would be liable to tax at 2.5% CGST plus 2.5% SGST. But if the final printed material is other than a book or a journal or a periodical but the involves the jobwork of printing of all goods falling under Chapter 48 or 49, which attract CGST @ 6 per cent, then the activity is liable to tax at 6% CGST plus 6% SGST - But, if the jobwork of printing made on the materials belonging to other is not covered by the above two items, then the same is liable to be covered under Entry No. 26(iii) and is liable to tax at 9% CGST plus 9% SGST. 2019 (10) TMI 525 Levy of CGST and SGST/IGST - accommodation service proposed to be rendered by the applicant to SEZ units - zero rated supplies or not - whether invoice can be raised without charging Tax after executing LUT under section 16? - HELD THAT:- Supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit are treated as Zero Rated Supply in terms of Section 16(1)(b) of IGST Act, 2017. Further Rule 46 of CGST Rules 2017 stipulates that the invoice shall carry an endorsement Supply meant for export / Supply to SEZ unit or SEZ Developer for authorised operations on payment of Integrated Tax or Supply meant for Export / Supply to SEZ unit or SEZ Developer for authorised operations under Bond or letter of Undertaking without payment of Integrated Tax as the case may be - Therefore on reading Section 16(1)(b) of IGST Act, 2017 Rule 46 of CGST Rules 2017 together it is clearly evident that the supplies of goods or services or both towards the authorised operations only shall be treated as Supplies to SEZ Developer / SEZ unit. Thus, the present transaction proposed to be made by the applicant where he provides the accommodation services in his hotel to SEZ Unit would be treated as inter-State supply. Whether this supply of services to a SEZ Unit would be treated as a Zero rate supply? - HELD THAT:- The supply of accommodation services provided to a SEZ Unit would be treated as a Zero-rated supply and this is subject to the provisions of section 17(5) of the CGST Act. 2019 (10) TMI 524 Rate of GST - 'Government Authority or not - activity of construction of residential complex / residential houses undertaking on behalf of BDA - recipient of service - applicability of entry 3(vi) of the Notification No. 11/2017 - Central Tax (Rate) as amended. HELD THAT:- Bangalore Development Authority is an authority established by the State Government under the Bangalore Development Authority Act, 1976 and it is entrusted with the activity of development of the City of Bangalore and areas adjacent thereto and for matters connected therewith - the control over the entity rests with the Government of Karnataka and hence the Bangalore Development Authority satisfies both the conditions and hence is considered as a Government Entity within the meaning of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Whether the services provided by the applicant are covered under clauses (a), (b) or (c) of the entry no.3(vi) of the said Notification? - HELD THAT:- The applicant is constructing a Housing Project at two places in and around Bangalore. The Bangalore Development Authority in its tender has stated that it has taken up construction of housing in and around Bangalore City as designed by the Government of Karnataka. Since this is a residential project for general public, the same is not covered under clause (b) or (c) - This works contract is for a construction of a civil structure and since it is a residential real estate project, the works is predominantly for use other than commerce, industry or any other business or profession and hence it is covered under clause (a) of the entry 3(vi) of the Notification, subject to the conditions. Whether the recipient has procured the said services in relation to a work entrusted to it by the State Government? - HELD THAT:- The Bangalore Development Authority Act, which is passed by the State Legislature, has entrusted the activity of development of the City of Bangalore and areas adjacent thereto and for matters connected therewith to the BDA and the Authority has to obtain the sanction of the Government of Karnataka for every scheme they propose to implement. Hence, the condition is also satisfied - the services provided by the applicant to the Bangalore Development Authority in relation to the construction of two housing complexes referred to in the application are covered under entry no.3(vi)(a) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 (as amended) and is liable to tax at 6% under the CGST Act, 2017. Similarly, the services provided is covered under entry of Notification (11/2017) No. FD 48 CSL 2017 dated 29.06.2017 (as amended) and is liable to tax at 6% under the Karnataka Goods and Services Tax Act, 2017. 2019 (10) TMI 523 Classification of services - rate of tax - sub-contract - Construction of residential complex - composite supply - Whether the activity undertaken by the applicant is covered under section 2(119) of the CGST Act, 2018 read with point 6 Schedule II of the CGST Act, 2017 read with the Karnataka GST Act, 2017 and the IGST Act, 2017? - Government authority or not - transaction covered under point 3(ii) or point 3(ix) of the Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 as amended? - HELD THAT:- Bengaluru Development Authority has issued work orders to main contractor - the control over the entity rests with the Government of Karnataka and hence the Bangalore Development Authority satisfies both the conditions and hence is considered as a Government Entity. The projects of the applicant are involving the supply of both goods and services and is in relation to an immovable property and hence is a works contract within the meaning of section 2(119) of CGST Act. This works contract is for a construction of a civil structure and since it is a residential real estate project, the works is predominantly for use other than commerce, industry or any other business or profession and hence it is covered under clause (a) of the entry 3(vi) of the Notification, subject to the conditions. Applicability of clauses (a), (b) or (c) of the entry no.3(vi) of the said Notification - HELD THAT:- The applicant is constructing a Housing Project at two places in around Bangalore on subcontract basis rewarded from M/s. Gowri Infra Engineers Private Limited. The Bangalore Development Authority in its tender has stated that it has taken up construction of housing in and around Bangalore City as designed by the Government of Karnataka. Since this is a residential project for general public, the same is not covered under clause (b) or (c) - The projects of the applicant are involving the supply of both goods and services and is in relation to an immovable property and hence is a works contract within the meaning of section 2(119) of CGST Act. This works contract is for a construction of a civil structure and since it is a residential real estate project, the works is predominantly for use other than commerce, industry or any other business or profession and hence it is covered under clause (a) of the entry 3(vi) of the Notification, subject to the conditions. Whether the recipient has procured the said services in relation to a work entrusted to it by the State Government? - HELD THAT:- It is observed that the Bangalore Development Authority Act, which is passed by the State Legislature, has entrusted the activity of development of the City of Bangalore and areas adjacent thereto and for matters connected therewith to the BDA and the Authority has to obtain the sanction of the Government of Karnataka for every scheme they propose to implement. Hence, the condition is also satisfied - thus, the services provided by M/s. Gowri Infra Engineers Private Limited to Bangalore Development Authority in relation to the construction of housing complexes are covered under clause (a) of entry no.3(vi) of the Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 as amended from time to time. Bengaluru Development Authority is a Government Authority and the main contractor is providing services specified in item (vi) of the Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 and hence the sub-contract work of works contract provided by the applicant as a sub-contractor to the main contractor is covered under item (ix) of entry 3 of the said Notification as amended by Notification No. 1/2018 - Central Tax (Rate) dated 25.01.2018 and is taxable at 6% under CGST Act, 2017 w.e.f. 25.01.2018. For the period from 01.07.2017 to 24.01.2018, the same is taxable at 9% CGST. 2019 (10) TMI 522 Classification of services - Rate of tax - Development of Airport by construction of Runway, Taxi track, Apron, Isolation bay, Perimeter Road including Earth work and other allied works - Up gradation of Airport to make it suitable for operation of any type of aircraft by extension of Runway, Construction of New Apron, Taxi track, Isolation bay including Link taxi, GSE area, Perimeter road, and allied works (Civil Electrical) - Government entity or not? Whether the transaction is covered under the Sl.No. 3(vi) of the Notification No. 11/2017 - Central Tax dated 28.06.2017? HELD THAT:- The Composite supply of works contract as defined in section 2(119) of the CGST Act, 2017, provided to the Government Entity by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession is liable to tax at the rate of 6% under the CGST Act. Similar notification also exists under the Karnataka Goods and Services Tax Act and also under the Integrated Goods and Services Tax Act (wherein the tax rate is 12% IGST). The applicant is undertaking a contract of works contract of construction of a civil structure or any other original works for the Airport Authorities of India. The Department of Personnel and Training, Government of India has shown in the company profile that the shareholding of the Government of India in the Airport Authorities of India is 100% and hence the AAI is a Government Entity. Whether the constructed works is a civil structure or any other original works? - HELD THAT:- The applicant is engaged in construction of new civil structures. The activities carried out by the applicant are covered under the relevant serial number of the Notification. Whether the works are meant predominantly for use other than for commerce, industry, or any other business or profession? - HELD THAT:- The airlines that use the runway and the aprons etc constructed by the applicant work with a view to earn profits. They are engaged in commerce and business. Entry at Serial number 3(vi)(a) specifically provides that works be meant predominantly for use other than for commerce, industry, or any other business or profession . As the works carried out by the applicant are used in the process of commerce and business, the applicant does not qualify for the works to be classified under Serial number 3(vi)(a) - the works contract performed by the applicant cannot be considered as covered under Serial No. 3(vi) of the Notification No. 11/2017 - Central Tax dated 28.06.2017 liable to tax at 6%, but are more appropriately covered under Serial No.3(ii) of the of the Notification No. 11/2017 - Central Tax dated 28.06.2017 liable to tax at 9%. 2019 (10) TMI 521 Blocking input tax credit of supplier - provisional attachment of property - HELD THAT:- Issue Notice, returnable on 17th October 2019. By way of ad-interim relief, the respondents are directed to forthwith release the attachment of the bank account of the petitioner maintained with the ICICI Bank, Rajkot and unblock the credit of the petitioner of ₹ 24,30,850/- available in the electronic credit ledger. Income Tax 2019 (10) TMI 520 Reopening of assessment u/s 147 - original assessment u/s 143(3) - unexplained investment made by a Mauritius based Company towards share allocation money in Compulsory Convertible Cumulative Preference Shares - genuineness and creditworthiness of the foreign entity - information received from the investigation wing - beyond limitation - no failure on the part of the assessee to declare fully and truly all material facts - no new or additional material - desire to carry out enquiries - HELD THAT:- SLP dismissed. 2019 (10) TMI 519 Stay petition - contention of the petitioner is essentially that, in Ext.P9 order, there is no mention of any reason as to why the Appellate Authority deemed it necessary for the petitioners to pay 20% of the total demand, as a condition for stay of the balance 80% of the demand arising from the assessment order during the pendency of the appeal - HELD THAT:- Ext.P9 order is a laconic one bereft of any reasoning, and hence, cannot be legally sustained. Therefore quash Ext.P9 order, and direct the 1st respondent to pass fresh orders on the stay petition after hearing the petitioners. To enable the 1st respondent to do so, I direct the petitioners to appear before the 1st respondent, at his Office, at 11.00 a.m. on 14.11.2019. The 1st respondent shall pass order in the matter, as directed, within one month thereafter. It is made clear that recovery steps for recovery of amounts confirmed against the petitioners by the assessment order, shall be kept in abeyance till such time as orders are passed by the 1st respondent, as directed, and the order communicated to the petitioners. The petitioners shall produce a copy of the writ petition together with a copy of this judgment, before the 1st respondent, for further action. 2019 (10) TMI 518 Revision of assessment order - section 263 of the Income Tax Act, 1961 - Rejection of claim of depreciation - contention of the assessee is that the A.O. has adopted one of the plausible view - HELD THAT:- The assessee has not filed any evidence supporting this claim before us. In the absence of the requisite evidence in support of the claim that the solar generators were purchased, installed, put to use for business and the part payment of the same was also paid during the financial year 2012-13. There are no reason to interfere with the finding of the Ld. Pr. CIT - ground raised in the appeal is dismissed - appeal dismissed. 2019 (10) TMI 517 Fringe benefit tax - addition of expenses relating to supply of electricity at concessional rates to employees - HELD THAT:- The supply of electricity by the assessee to its employees at concessional rates would certainly be perquisite in terms of section 17(2) of the Act. However, it is incumbent upon the assessee to furnish evidence that the benefit given to employees in the form of supply on concessional rates is treated as perquisite and due taxes has been deducted at source. In the absence of such evidences, no fault can be found with the finding of the authorities below. Assessee during the course of hearing prayed that the issue may be restored to the file of the A.O. who can verify this fact by conducting requisite enquiries. D.R. strongly opposed this submission and stated that assessee was provided with sufficient opportunity in this regard. It will give second innings to the assessee without any reasonable cause. We have given our thoughtful consideration to the submissions made by the assessee and the Ld. D.R. The law is well settled that levy of tax should be at the right hand. In the case in hand, we have held that supply of electricity to its employees at a concessional rate would be a perquisite for the employees. Under these circumstances, the revenue is at liberty to proceed against the assessee for non-deduction of tax at source in the event, if the employees have offered the benefit for taxation in their respective returns, the assessee would not be liable for the FBT. It would be tantamount to double taxation. We therefore, set aside the orders of the authorities below and restore the issue to the file of the A.O. for verifying whether the employees offered such benefit in their returns, if any. - Assessee grounds raised in this appeal are allowed for statistical purposes. 2019 (10) TMI 516 Reopening of assessment u/s 147 - Assessee stated that the A.O. has failed to give any details about the information and documents which have been relied upon by the A.O. at assessment stage - HELD THAT:- A.O. has specifically recorded the fact in the assessment order that initially in different account of the Investors, the cash have been deposited from where the amount have been transferred to the another accounts of Investors and then transferred to assessee. These informations are specific to show that against the cash, entry have been provided to the assessee by entry providers. Assessee failed to produce any evidence before the authorities below. Therefore, it is a fit case of escapement of income on account of failure on the part of assessee to disclose fully and truly all material facts. Therefore, reopening of the assessment is wholly justified in the matter. The objections of the assessee have been separately disposed of by the A.O. in which no infirmity have been pointed out by the assessee. At the stage of recording of the reasons for reopening of the assessment, all relevant facts leading to belief are justified. Sufficiency of those material is not necessary. On making further enquiry into the matter, it is specifically found that cash were deposited in the Bank accounts of entry providers from where the amounts in question have been transferred to the account of the assessee. Therefore, there is escapement of income chargeable to tax on account of assessee s failure to furnish full and true particulars. Since in this case return was only processed under section 143(1), therefore, A.O. was justified in reopening of the assessment on bringing the material on record that there was an escapement of income from assessment in the matter. No infirmity have been pointed-out in the Orders of the authorities below for initiation of re-assessment proceedings in the matter. No justification to interfere with the Order of the Ld. CIT(A) in upholding the initiation of re-assessment proceedings in the matter. - Decided against assessee Addition u/s 68 - several entries provided by the entry providers which were not explained by the assessee, which were entered into the Bank account of the assessee - HELD THAT:- Merely showing that transactions were carried out through Banking channel in the facts and circumstances of the case is not sufficient to prove the genuineness of the transaction in the matter. The Hon ble Supreme Court in the case of CIT, West Bengal-II vs., Durga Prasad More [ 1971 (8) TMI 17 - SUPREME COURT] and Smt. Sumati Dayal vs., CIT, Bangalore [1995 (3) TMI 3 - SUPREME COURT] have held that Courts and Tribunals have to Judge the evidence before them by applying the test of human probability. If the said test is applied in this matter, it is clearly established that assessee failed to prove identity of the accommodation entry providers, their creditworthiness and genuine of the transaction in the matter. We, therefore, do not find any justification to interfere with the Orders of the authorities below in making the addition - Decided against assessee. 2019 (10) TMI 515 Addition u/s 68 - Protective addition - addition of gift as income from undisclosed sources - HELD THAT:- Protective addition cannot be sustained at second appellate stage and consequently no proceedings either for recovery of tax or for initiating any penalty proceedings could be initiated. If the addition has been made on substantive basis in case of another person, here in this case alleged entry provider Mr. Harish Kumar wherein the amount of gift given by him to the assessee has been added on substantive basis, then whether tax is recoverable from him or not is relevant at all. What is relevant is that same addition cannot be taxed twice and there has to specific finding in whose hand the amount is taxable. Before us both the parties could not provide the detail of fate of substantive addition, whether any appellate authority has held that the addition made in the case of Mr. Harish Kumar should be made on protective basis and substantive addition should be made in the case of the donees, i.e., the person who has received the gift. Until and unless there is such finding by the appellate authority in the case of Sri Harish Kumar, then protective addition has no legs to stand. We direct the Assessing Officer as under - to ascertain whether in the case of Shri Harish Kumar any finding has been given by the appellate authority that additions made in his hand should be taxed on protective basis and substantive addition should have been made in the hands of the donee, i.e. the assessee who has received the gift if addition has been deleted on merits in the case of Shri Harish Kumar then again no addition can be confirmed against the assessee. Until and unless the appellate authority has held that addition made in the hands of Shri Harish Kumar is to be examined or made in the case of the assessee no addition can be made or confirmed and if the substantive addition made in the hands of Shri Harish Kumar had attained finality then also no addition or any proceedings can be initiated against the assessee. AO is directed to comply with this direction within a period of six months from the date of receiving of the order, because already huge time have elapsed and by this time either the fate of the appeal of Shri Harish Kumar must have been decided or the assessment order in his case must have attained finality. Appeal treated as partly allowed for statistical purposes. 2019 (10) TMI 514 Ad hoc disallowance of expenditure - HELD THAT:- Disallowance has been made on purely adhoc basis without pointing out any specific defect in the vouchers so maintained by the assessee. There is no finding that the expenses have not been incurred for the purpose of business or expenses are bogus in nature. Unless and until the AO brings out specific defect or gives a specific finding that expenses claimed are bogus in nature or not incurred for the purposes of the business, there is no basis for making such adhoc disallowances for the sake of making such disallowances knowing full well that the same cannot be sustained during the appellate proceedings. We accordingly delete the addition so made by the Assessing officer and the ground of appeal so taken by the assessee is allowed Addition on account of Electricity expenses - HELD THAT:- In respect of premises situated at 5/8, Kala Kua, Alwar, the same has been taken on rent by the assessee company from the owner of the said premises Smt. Sumitra Devi Sanghi, a fact not disputed by the Revenue. Where the electricity meter is in name of the owner and the electricity bills comes in the name of the owner, the assessee reimburses and the pays the same to the owner, we see no infirmity in the said claim of the assessee company and the same is directed to be allowed. In respect of premises situated at Flat No.703, Wonder Height, Alwar, the same has been taken on rent by the assessee company from the owner of the said premises and has been provided to Shri Nikunj Sanghi, the Director of the assessee company for his residential accommodation. The said Flat No. 703 is adjoining the other two flats namely Flat No. 701 702 and all these three flats have been claimed as converted into one residential accommodation for Shri Nikunj Sanghi, the Director of the assessee company. Apparently, Flat No. 701 702 are owned by Shri Nikunj Sanghi only and one electricity meter has been installed for the combined residential accommodation consisting of three flats. The electricity meter apparently is taken in the name of Shri Nikunj Sanghi, being the owner of the two flats and not in the name of the other owner namely, Nalini Goyal who is the owner of the other flat. Where the facts relating to three flats combined and converted into a single residential accommodation for Shri Nikunj Sanghi, the Director of the assessee company is not being disputed by the Revenue, merely because the electricity meter is not in name of the both the owners and is in name of one of the owners only, the same cannot be a basis for disallowance of electricity expenses and the same is directed to be allowed. 2019 (10) TMI 513 TDS u/s 194A - Assessee bank has not furnished one copy of Form No.15G and Form No.15H to the jurisdictional Commissioner of Income tax as required under the Act - HELD THAT:- The provisions of sec. 197A(1A) merely requires a declaration to be filed by the payee of interest and once it is filed, the payer of the interest has not choice except to desist from deducting tax at source from the interest paid. In the case of Punjab National Bank [ 2016 (9) TMI 392 - ITAT AMRITSAR] it has been held that non-mentioning of PAN in Form No.15G and Form No.15H is only a technical breach, when the payees were having PAN. In the instant case, the assessee has furnished a statement showing the details of interest paid on terms deposits. A perusal of the same would show that the assessee has furnished PAN number of most of the depositors. Accordingly we are of the view that this issue requires reexamination in the light of principles discussed above. Accordingly we set aside the order passed by Ld CIT(A) and restore this issue to the file of the AO with the direction to examine this issue afresh TDS u/s 194H - Non-deduction of tax at source from the Commission payment made to NPCI - HELD THAT:- As decided in M/S CORPORATION BANK [ 2015 (3) TMI 1360 - ITAT] the payment made to NFS could not be considered as commission or brokerage liable for deduction at source. BANGALORE] - The assessee is not liable to deduct tax at source from the payments made NCPI towards NFS charges. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and delete the demand raised on this payment. 2019 (10) TMI 512 Income accrued in India - Fixed place PE - installation PE in India - taxability of offshore supplies made by SMCS to the aforementioned telecom operators in India - Revenue has taken the consistent position that some portion of the profit relating to these offshore supplies should be brought to tax in India - HELD THAT:- No business connection can be said to have been established, and therefore, no further income can be attributed to India. Our view is supported by the Circular no. 23 dated 23.07.1969 issued by the Central Board of Direct Taxes, wherein it has been stated that no liability will arise to a non-resident where transaction of sale is on principal to principal basis since the transaction of supply of components by the appellant are on its own account, unaffected by the services to be rendered by SPCNL. This itself would take the transaction of supply of components outside the purview of section 9(1)(i) Fixed place PE - Considering the facts on record, SPCNL should not be considered a fixed place from which business of the appellant was wholly or partly carried out. The business of SPCNL is not dependent on the appellant as the facts show the variance in the scope of activities nor it can be said that SPCNL is at the disposal of the appellant. Installation PE - A perusal of the Supply Contracts between the appellant and the telecom operators in India will indicate that the role of the appellant was limited to mere supply of hardware components directly from Italy. The appellant was neither responsible for, nor undertakes installation, testing and commissioning, the same being the responsibility of the telecom operators themselves, who either undertook the same themselves or had the option of appointing SPCNL. Considering these facts in the light of case of Nortel Networks India International Inc. [ 2016 (5) TMI 373 - DELHI HIGH COURT] it can be said that there was no installation PE of the appellant. Dependent agent PE - Obligation to carry out installation, commissioning and maintenance under the Services Contract was by way of separate contracts between SPCNL and the telecom operators. SPCNL cannot be regarded as DAPE of the appellant in India. Contracts between the appellant and telecom operators show that the appellant was not even responsible for performing pre-network surveys or software updates. The appellant does not hold any equity capital in SPCNL and the sphere of activities performed by SPCNL was much broader than those envisaged under the agreement entered into between SMCS and SPCNL. Assuming, yet not accepting that the installation activities were undertaken by SPCNL at the behest of the appellant, the same would still not render the income of the appellant to be taxable in India, since the supply of hardware components, i.e., the taxable activity, was completed before the installation activities. It was in this context that the offshore contract pertaining to supply of equipments and the onshore contract pertaining to provision of services were inextricably linked. In addition to this, there was a clear finding that contracts were negotiated and concluded by a team of persons in India, which fact finding is missing in the case in hand. Chargeability of interest u/s 234B - Issue decided in favour of the assessee in the case of GE Packaged Power Inc. [ 2015 (1) TMI 1168 - DELHI HIGH COURT] wherein it has been held that no interest under section 234B of the Act can be levied on the assessee-payee on the ground of non-payment of advance tax because the obligation was upon the payer to deduct the tax at source before making remittances to them. Thus we hold that no interest is leviable u/s 234B of the Act. Accordingly, we direct the Assessing Officer not to charge interest u/s 234B Taxing income from supply of software to Indian parties as income of the appellant - consideration received by the assessee from offshore supply of hardware components which imbibed the supply of software - HELD THAT:- As decided in ZTE CORPORATION [ 2017 (1) TMI 1338 - DELHI HIGH COURT] The supplies made (of the software) enabled the use of the hardware sold. It was not disputed that without the software, hardware use was not possible. The mere fact that separate invoicing was done for purchase and other transactions did not imply that it was royalty payment. In such cases, the nomenclature (of license or some other fee) is indeterminate of the true nature. Nor is the circumstance that updates of the software are routinely given to the assessee's customers. These facts do not detract from the nature of the transaction, which was supply of software, in the nature of articles or goods. This court is also not persuaded with the submission that the payments, if not royalty, amounted to payments for the use of machinery or equipment. Such a submission was never advanced before any of the lower tax authorities - Decided in favour of assessee. 2019 (10) TMI 511 Penalty u/s 271(1)(c) - defective notice - HELD THAT: - As decided in SHRI H. LAKSHMINARAYANA [ 2015 (7) TMI 601 - ITAT BANGALORE] show cause notice was defective as it did not spell out specifically the ground on which the penalty was sought to be imposed. The ITAT Bangalore Bench further held that such defect was not curable u/s 292BB. In view of these facts, the penalty in the case of the assessee also deserves to be deleted. Thus considering the judgement as cited by the assessee (supra), we are of the view that notices issued by the Revenue authorities were not legally and lawfully perfect. The levy of penalty on the basis of such notices is unlawful, illegal and unjustified. Taking into consideration all these facts, circumstances of the case and the case laws relied upon (supra), we allow these grounds of the assessee and delete the penalty levied by the AO and upheld by the ld. CIT(A). Thus Ground No. 1 and 2 of the assessee are allowed. Addition u/s 68 - HELD THAT:- Since in the present case the AO in the penalty proceedings had not examined the entire issue afresh and even otherwise the identity of the creditor and genuineness of the transaction has not been found fault with, therefore, we are of the view that the explanations and the documents relied upon by the assessee to prove the creditworthiness were only found to be inadequate and not found to be false. Under the set of facts, we are of the view that the Explanation to Section 271(1)(c) of the Act would come to help of the assessee. Hence on conspectus of the matter, we are of the view that the addition of cash credit confirmed by the ITAT in the facts and circumstances of the instant case, would not necessitate levy of penalty u/s 271(1)(c) of the Act, as the same in our view cannot be considered to be concealment of income. Accordingly, we set aside the order of the ld. CIT(A) on this issue and direct the AO to delete the penalty. - Decided in favour of assessee. 2019 (10) TMI 510 Additions made by AO - excess stock found during the course of survey - Addition made in respect of net profit - HELD THAT:- The basis of making addition is the statement recorded during the course of survey. Ld. Counsel for the assessee has taken me through the statement so recorded. It is stated that the whole purchases have been through banking channels - Considering the fact that the assesse has demonstrated that purchases were made through banking channels and have been recorded in the books of accounts, the revenue has not brought any contrary material on record. Under these undisputed facts, the A.O. is hereby directed to delete the addition of ₹ 16,80,000/- as made in respect of the excess stock. However, the addition in respect of net profit @ 2% is sustained on this addition - appeal allowed in part. 2019 (10) TMI 509 Deletion of disallowance of business expenses of ₹ 188.75 lakhs made by the AO - pre-construction expenses - HELD THAT:- Since the assessee is in the process of implementing a project, which is in the nature of Construction of project, the question of examining the setting up of business or commencement of business does not arise in this case. Since the assessee is constructing a project, all the expenses are incurred in connection there with are called pre-construction expenses and they are required to be capitalised as per the decision rendered by Hon ble Supreme Court in the case of CHALLAPALLI SUGARS LIMITED HINDUSTAN PETROLEUM CORPORATION LTD. VERSUS COMMISSIONER OF INCOME-TAX, AP COMMISSIONER OF INCOME-TAX (CENTRAL) , CALCUTTA [ 1974 (10) TMI 3 - SUPREME COURT] . The Ld A.R has raised a new contention that the other income should not be assessed separately, but it has to be reduced from the pre-construction expenses. However, this claim of the assessee requires examination of facts relating to other income and also the law explained by Hon ble Supreme Court/High Courts in this regard, which is also dependent upon the facts relating to Other income . The assessing officer did not examine this claim of the assessee with regard to other income, even though he has observed that the expenses can be capitalised - Accordingly, this claim of the assessee requires examination at the end of the AO - the issue is restored to the file of the AO for examining the above said claim of the assessee. Appeal allowed by way of remand. 2019 (10) TMI 508 Exemption u/s 11 - charitable activity u/s 2(15 ) - Assessee society has been set up with all forms of humanitarian grounds to take care of the physically and mentally challenged persons for their up lifting, survival and further establishment in life spread over throughout West Bengal specially in rural areas - HELD THAT:- As the predominant object of the assessee is to carry out charitable purpose and not to earn profit, it would not lose its charitable character. The surplus derived from running the STD booths, pharmaceutical shops etc. was incidental and ancillary to the dominant object of taking care of physically and mentally challenged persons and uplifting them and enabling them to survive and live in this society. In view of the above discussion we direct the AO to grant benefit of Section 11 of the Act to the assessee. - Decided in favour of assessee. 2019 (10) TMI 484 Maintainability of appeal - monetary amount involved in the appeal - HELD THAT:- The tax effect in this appeal is not exceeding the monetary limit as revised by the CBDT vide Circular dated 08.08.2019 for the purpose of filing of appeal by the department before the Income Tax Appellate Tribunal from ₹ 20,00,000/- to ₹ 50,00,000/-. The appeal of the department is not maintainable being monetary limit is less than/not exceeding ₹ 50,00,000/-. Appeal dismissed - decided against Revenue. Customs 2019 (10) TMI 507 Maintainability of application - appropriate forum - Smuggling - Gold chains - release of seized goods - concealment of gold chains - HELD THAT:- In this application filed under Section 482 Cr.P.C, this Court cannot adjudicate disputed questions of facts as to whether the petitioner had concealed the gold chains in the underwear worn by him or that he had kept them inside the pocket of his trouser and whether he had declared the goods or not - There is appropriate forum provided under the Act to adjudicate such disputed questions of facts. Section 128(1) of the Act states that any person aggrieved by any decision or order passed under the Act by an officer of customs lower in rank than a Principal Commissioner or Commissioner of Customs may appeal to the Commissioner (Appeals) within sixty days from the date of the communication to him of such decision or order - The petitioner is at liberty to challenge Annexure-D(2) order before the appellate authority. Petition dismissed. 2019 (10) TMI 506 Validity of action of the Custom Authorities in debiting the Social Welfare Surcharge to the duty credit scrip issued under the Merchandise Export from India Scheme (MEIS) - HELD THAT:- The trade is already being burdened with Social Welfare Surcharge in cases where the basic duty is exempt. It would continue to suffer unless this issue is decided expeditiously one way or the other. This as certainty of taxes payable is very important in carrying on of business. Petitions stand adjourned to 10 October 2019. 2019 (10) TMI 505 Classification of imported goods - Multimedia speakers - whether classifiable under CTH 8519/8527 or not? - HELD THAT:- The matter is no longer res integra as it has already been decided by this Tribunal in the case of LOGIC INDIA TRADING CO VERSUS COMMISSIONER OF CUSTOMS [ 2016 (3) TMI 5 - CESTAT BANGALORE] ; that the multimedia speakers even if they are having additional features like USB port, etc. will appropriately be classified under CTH 8518 as pre-dominant function of the electric apparatus remains as a speaker. The decision of this Tribunal in the case of M/s. Logic India Trading Co. vs. CC, Cochin had also been endorsed by Hon ble Supreme court in the case of COMMISSIONER VERSUS LOGIC INDIA TRADING CO. [ 2017 (1) TMI 477 - SC ORDER] . Appeal allowed - decided in favor of appellant. 2019 (10) TMI 504 Action against the Customs Broker (CB) - Time limitation - enquiry report was submitted after expiry of 90 days - SCN was issued on 10.08.2013 and the offence report was got prepared on 06.12.2013 - Diversion of goods stored in Custom Bonded Warehouses into domestic market - forged/fabricated documents to show the re-export of warehoused goods - evasion of Customs Duty. Whether the time frame prescribed in Regulation 20(5) is mandatory or directory i.e., whether the time therein be so strictly construed so as to result in declaring initiation of action itself invalid, if that is not adhered to? HELD THAT:- It is mandatory for the Court to look into the nature of the statute and the consequences which would follow from construing it in one way or the other, the ambit of the other provisions, the necessity of compliance of the provisions in question. Above all, whether the object of the enactment is defeated by holding it to be directory and whether the object would be achieved by construing it to be mandatory has to be considered. For the object of time limit in Regulation 20 of CBLR, 2019/2018 we opine that said time limit is evolved so that the inquiry and proceedings are not delayed indefinitely as it hampers the brokerages of the customs broker. At the same time, the time limit should not be so strictly adhered to, even in cases of serious lapse on the part of the customs broker and where the inquiry involves certain complicated facts. Merely because the inquiry was not completed within a stipulated period, the customs broker may not be allowed to walk free, as his suspension cannot be continued beyond the period prescribed in the Regulation and his licences need not be restored. The judgments on which reliance had been placed by the appellant taking a view that the revocation of a CHA license is bad in law since the time limit for completion of inquiry in terms of Regulation 20(5)/22(5) of CBLR, 2013/2018 has not been adhered to, are not applicable to the facts of the present case as most of these cases have dealt with the extraordinary delay caused at the instance of the revenue in conducting inquiry against the custom house agent, depriving them of their means of livelihood and it was observed that the purpose of prescribed time limit was to safeguard the interest of the custom broker and smooth import and export of goods - Whereas, present is the case of alleged fraud on part of the appellant. Adjudicating Authority has clearly observed the delaying strategy of the appellant s Director. Section 17 of Limitation Act while talking about effect of fraud or mistake lays that the fraud vitiates the limitation prescribed. Thus, those are not applicable to the present case. The intention of CB to not to enable the Department to adhere to the impugned time limit despite that the illegal act of diverting the warehoused goods to domestic market was alleged against the said CB, the time line of Regulation 20(5) CBLR, 2013 is mere directory in nature and the non compliance thereof shall not vitiate the action taken against the defaulting CB. The cancellation of appellants licence with the forfeiture of the security deposit and the imposition of penalty upon the appellant is therefore, held to be sustainable - appeal dismissed. Insolvency & Bankruptcy 2019 (10) TMI 503 Admissibility of application - Applicant has not filed its claim within the time prescribed i.e. 90 days from the date of admission - HELD THAT:- This Applicant submits that since the Applicant could not come to know of admission of Company Petition on 01.11.2018, he failed to file its claim application within the time prescribed i.e. 90 days - As soon as it has come to know of the admission and publication inviting claims during the period of Corporate Insolvency Resolution Process (CIRP), this applicant has filed it before the RP but whereas by that time, the prescribed time of 90 days was over, the RP did not consider this application on the ground that it was not filed within the time. Application admitted. 2019 (10) TMI 502 Maintainability of application - initiation of CIRP - outstanding debt - Non-performing asset - it was alleged that the Corporate Debtor failed and neglected to repay the facilities - HELD THAT:- The Financial Creditor has been able to prove on the basis of documentary evidence placed on record that the credit facilities/debt was duly disbursed to the Corporate Debtor which was later on assigned to the present Applicant M/s. Edelweiss Asset Reconstruction Co. Limited by way of Assignment Agreement dated 26th March, 2014. Along with the assignment, the present Applicant entered into the shoes of Bank of Baroda, the assignor and all the documents of security, securing the loan/credit facilities availed by the Corporate Debtor were handed over to the Financial Creditor which are sufficient to proceed against the Corporate Debtor and admit the present application for initiation of Corporate Insolvency Resolution Process. The Financial Creditor has been able to prove the default having taken place in payment of the outstanding debt, as on 31st March, 2018 on which date the account of the Corporate Debtor was declared as an NPA. The application is complete in all respects, and the Financial Creditor has proved the existence of financial debt owed by the Corporate Debtor to the Financial Creditor, the default having been occurred in payment of the financial debt, we have no other option but to admit the application - Application admitted - moratorium declared. 2019 (10) TMI 501 Maintainability of application - initiation of CIRP - Application rejected on the ground that the claim is barred by limitation - HELD THAT:- By Demand Drafts of February, 2018, Respondent paid certain amount. In such case, we are of the view that the amount having last paid in February, 2018 the application is not barred by limitation. The claim is disputed, we find that the ground of delay wrongly shown by the Adjudicating Authority. Further no ground has to be given as to why the claim of the Appellant has not Operational Debt . Appeal allowed. 2019 (10) TMI 500 Entitlement to Maturity Premium and Default Interest - HELD THAT:- Since the debenture holders are entitled to get this Maturity Premium amount over and above the principal and interest, it cannot be said that this Applicant is not entitled to claim maturity premium just because CIRP has been initiated against the corporate Debtor. An agreement between the parties is a document sacrosanct deciding the rights of the parties and the same will remain binding upon the parries, therefore when the obligations created upon themselves are violated, unless and until law prohibits from enforcing such obligations, the consequences of violation will automatically follow - By the language of this agreement between the parties, the Maturity Premium is to be construed as amount due as stated under this document, because the corporate debtor admittedly defaulted in repaying as agreed, therefore in the event of default, this debenture holders are entitled to claim even Maturity Premium as well. The debenture holders are only entitled to ₹ 20,94,152 default interest upon the default amount, as to the remaining balance default interest claim of ₹ 1,94,72,660 the debenture holders are not entitled because the remaining balance of default interest claim is not due as on the date of admission of this case, therefore, the claim of ₹ 1,94,72,660 as default interest is hereby rejected. Application disposed off. 2019 (10) TMI 499 Maintainability of application - initiation of CIRP - Corporate Debtor has committed a default - Section 9 of the IBC, 2016 R/w Rule 6 of the I B (AAA) Rules, 2016 - HELD THAT:- The Respondent has pleaded that it is responsibility of the Petitioner to approach the Commercial Tax Officer Department, Government of Karnataka for appropriate relief, for which they will furnish necessary cooperation to the Petitioner to settle the issue. Therefore, we are inclined to dispose the Company petition with directions to the Respondent to facilitate to resolve the issue with regard to claim of Commercial Tax Officer as per letter dated 18.08.2017 - application disposed off. Service Tax 2019 (10) TMI 498 CENVAT Credit - duty paying documents - inadmissible documents - April, 2009 to September, 2010 - Rule 9 (1) and 9 (2) of Cenvat Credit Rules - Time Limitation - HELD THAT:- The use of word shall in Rule 9 (1) makes the provision mandatory and it becomes clear that to avail cenvat credit mandatorily the documents as mentioned therein with such particulars as mentioned shall be furnished. In the present case no doubt the appellant has placed the invoice for availing the cenvat credit. Apparently and admittedly, the invoice is not issued in the name of the appellant, but in the name of Cameron (Score) PTE Ltd., Singapore. The person, who is named in the invoice can only avail the cenvat credit, as per the said rule. The subsequent argument on behalf of appellant that there have been the corrections in various invoices in the name of the appellant but there is no certification on record about those corrections to have been made by the service provider. Rule 9 (b) itself speaks about the supplementary invoices. The appellant could have invoked the said rule - In absence thereof the statutory mandate in rule 9 cannot be overlooked in view of the oral defences of the appellant. The fact that services have been received in India is also not coming out from all of the invoices - even the argument that the substantial benefit cannot be denied due to mere procedural lapse is not sustainable to extend any benefit to the appellant. Time Limitation - HELD THAT:- No doubt the period of demand is herein is April 2009 to 2010 and show cause notice was issued in February, 2013 with a corrigendum thereof in February, 2015, but, it is clear that liability of the service recipient settled abroad has been taken over by the appellant without having invoice being generated in his favour. No authentication has been received by the appellant about relevant changes as are impressed upon to be the basis for entitling appellant to avail credit. The said act and conduct to my opinion is definitely an act which is done with an intent to cause loss to the Government Exchequer - The Department is therefore held entitled to invoke the extended period of limitation. Appeal dismissed - decided against appellant. 2019 (10) TMI 497 Business Auxiliary Service - collection from the customers for obtaining temporary and permanent registration respectively with the RTO - HELD THAT:- The appellants are collecting some amounts from their customers / purchasers of the cars from their showroom and using the money for getting the vehicle registered with the RTO. Certainly the appellant is rendering a service to the customers and they are also getting a remuneration. However, on this very count, such revenue generated cannot be visited with service tax unless it falls under one or the other definitions of service tax under the various headings given under Section 65. The activity of the appellant does not come under the BAS insofar as it does not support any business whatsoever of the customer. Appeal allowed - decided in favor of appellant. 2019 (10) TMI 496 Refund of Service Tax - rejection of claim on the ground of time limitation - quarter July, 2016 to September, 2016 - N/N. 12/2013-ST, dated 01.07.2013 - HELD THAT:- No SCN/deficiency memo was issued to the appellant stating reasons for rejecting the refund. The refund sanctioning authority in the first round of litigation has rejected the refund without stating any reasons. The Commissioner (Appeals) by order dated 23.03.2018, has remanded the matter directing the adjudicating authority to pass a speaking order and also to look into the report of the range officer - In such remand proceedings, the appellant was given a copy of the range officer s report. On perusal of the range officer report, it is categorically stated by the range officer that the refund claim dated 14.06.2017 is well within time. On reading of Condition No.(e) along with (f) of the notification, it can be seen that the assessee can file one claim for every quarter. The refund claim for invoices under dispute, has been filed on 14.06.2017, which is well within the time - Therefore, on appreciation of facts, the refund claim filed is well within time, and, therefore, the rejection of the same stating the ground of limitation is unjustified. Appeal allowed - decided in favor of appellant. 2019 (10) TMI 495 VCES declaration - allegation of false declaration on the basis of TDS statement 26AS - declaration was for the months of November 2012 and December 2012 whereas the said declaration was held to be substantially false - HELD THAT:- Section 111 of Finance Act, 2013 empowered raising of demand if declaration filed under VCES was established to be substantially false. The declaration was for the months of November 2012 and December 2012 whereas the said declaration was held to be substantially false on the basis of service tax due calculated on the basis of information in Form 26AS for the period from 01 April, 2010 to 31 December, 2012. Since the comparison of tax dues declared for a larger period of tax dues was made said comparison is insufficient to hold the declaration to be substantially false. If the declaration was for two months, the tax dues should have been examined for same period to establish whether the declaration was substantially false - Further, there is no examination of the activities for which appellant had received payments as reflected in Form 26AS. Unless it is established that the entire payments received as reflected in Form 26AS were on account of services provided and such services did not have any provisions for abatement nor there were any exemption then only such payments received are required to be considered as consideration for computation of Service Tax. Since such exercise was not undertaken the demand raised is presumptive. Appeal allowed - decided in favor of appellant. 2019 (10) TMI 494 Condonation of delay in filing appeal - Service of impugned order - power of Commissioner (Appeals) to condone delay - time limitation - HELD THAT:- The Commissioner (Appeals) has relied on the report of the Assistant Commissioner indicating that the order impugned was served upon the appellant on 02.01.2018 By Hand and had also enclosed a copy of relevant page of dispatch register before the Commissioner (Appeals) but the said report was not disclosed to the assessee - It is well settled that if the authorities intend to rely upon any document for holding against the assessee, the principals of natural justice require discloser of the said document to the appellant-assessee as also to supply, a copy of the same, for their comments. The report of the Assistant Commissioner referred to and relied upon by him would be disclosed to the assessee by giving them a copy of the same and thereafter an opportunity would be provided to them to contest the same, if they chose to do so - matter remanded to Commissioner (Appeals) for fresh decision - appeal allowed by way of remand. Central Excise 2019 (10) TMI 493 Maintainability of appeal - requirement with the pre-deposit - appellants-writ petitioners had availed their appellate remedy under Section 35B of the Central Excise Act - HELD THAT:- The pre-amended Section 35F required the entire duty demanded by the adjudicating authority to be deposited, and conferred powers on the Commissioner (Appeals) or the Tribunal, in terms of the first proviso, to dispense with such deposit, subject to such conditions as it deemed fit to impose to safeguard the interests of Revenue. Instead of requiring the appellant to deposit the entire duty as demanded in the adjudication order and in conferring discretion on the Tribunal, subject to such conditions as it may deem fit to impose with a view to safeguard the interests of the revenue, to waive such a requirement, Parliament thought it fit to substitute Section 35F and prescribe a sum, equivalent to 7 percent of the disputed duty, to be deposited for an appeal to be entertained. Appeal dismissed. 2019 (10) TMI 492 Valuation - goods sold at Factory Gate - Finalization of their provisional assessment in respect of captive consumption - application of Rule 6(b) of the Valuation Rules 1988 - normal price for the purpose of determination of value under Section 4 of the Central Excise Act, 1944 - HELD THAT:- The fact of undervaluation as determined by the Assistant Commissioner is based on the documents and records of the Appellant and their own submissions. Appellants have not disputed the said findings but have challenged the order merely on the ground with regards to the applicability of certain decisions wherein it has been held that value in case of captively consumed goods should be determined on the basis of factory gate sale price. For the re-determination of the value in respect of the goods consumed captively the matter needs to be remitted back to the original authority for deciding the issue after taking into consideration. In respect of the stock transfers to the depot for the sale from depot the value in terms will have to be finally determined in terms of Section 4(2) of the Central Excise Act, 1944. Thus it will be the sale price of the said goods stocked transferred to the depot, when sold to independent buyers and the sale price being the consideration for sale. Thus appellants have to satisfy the adjudicating authority with reference to the actual sale price from the depot for finalization of the value as per Section 4(2) - Hence in this respect also the matter needs to be remitted back to original authority for reconsideration. Matter remanded back to original authority for redetermination of the issues - appeal allowed by way of remand. 2019 (10) TMI 491 Short payment of duty - Rule 3(5) of Cenvat Credit Rules - demand of differential duty alongwith equal amount of penalty - HELD THAT:- The appellant had submitted detailed calculation on the basis of bills of entry under which the inputs were procured and invoices under which the inputs were sold as such. According to the appellant, the correct duty amount is ₹ 9,77,045/-. The Adjudicating Authority obtained report from the field formation however, the report was obtained at the back of the appellant after concluding the hearing. Since in the report also there is difference of ₹ 1,27,774/- it was incumbent on the Adjudicating Authority to provide a copy of the report and seek explanation from the appellant, which the Adjudicating Authority has failed to do - thus, there is a clear violation of natural justice. The matter needs reconsideration for calculation of amount of duty as well as penalty imposed under Section 11AC - appeal allowed by way of remand. 2019 (10) TMI 490 Levy of NCCD - clearance of Polyster Filament Yarn to 100% EOU for captive consumption - rule 19 of the Central Excise Rules, 2002 - HELD THAT:- The Hon ble Apex Court in case of BAJAJ AUTO LIMITED VERSUS UNION OF INDIA OTHERS [ 2019 (3) TMI 1427 - SUPREME COURT] has held that exemption of excise duty would be applicable to NCCD also as the same is surcharge. The demand of NCCD on goods cleared for captive consumption and to 100% EOU is not sustainable - appeal allowed - decided in favor of appellant. 2019 (10) TMI 485 Maintainability of petition - alternative remedy of appeal - Area based exemption - certain excise benefits which a new unit is liable to get in form of excise and income tax exemptions given in Uttarakhand for a certain period of time, to new units - HELD THAT:- The petitioners have a statutory remedy in form of Section 35B of the Central Excise Act, 1944 before the Customs Excise and Service Tax Appellate Tribunal. This Court has been informed that the petitioners have already filed an appeal before the Appellate Authority. However, the petitioners have to deposit a statutory amount which is 7.5% of the total disputed demand, before the appellate authority. The petitioners have not deposited this statutory deposit, which is mandatory demand as per Section 35F of the aforesaid Act. This writ petition is totally misconceived for various reasons. Firstly, there is a statutory remedy available to the petitioners under Section 35B read with Section 35F of the Central Excise Act, 1944 and secondly, the petitioners have already availed this remedy. However, they have to deposit a statutory demand of 7.5% before the appellate authority before the matter could be heard. The petitioners in order to escape from this statutory liability of depositing of 7.5% of the demand amount have filed this writ petition. This is not permissible. Petition dismissed. CST, VAT & Sales Tax 2019 (10) TMI 489 Validity of assessment order - mis-match issue involved - assessment years 2012-2013, 2013-2014, 2014-2015 and 2015-2016 respectively - HELD THAT:- In view of the admitted position that the mis-match issue involved in these case has not been dealt with in accordance with the directions issued in M/S. JKM GRAPHICS SOLUTIONS PRIVATE LIMITED VERSUS THE COMMERCIAL TAX OFFICER [ 2017 (3) TMI 536 - MADRAS HIGH COURT] , without expressing any view on the merits of the matter, I am inclined to set aside the impugned orders of assessment and remit the matter back to the Assessing Officer to redo the assessment by following the procedures/guidelines/directions issued in JKM Graphics case. The matter is remitted back to the respondent/Assessing Officer to redo the assessment by following the guidelines/directions issued in JKM Graphics case - petition allowed by way of remand. 2019 (10) TMI 488 Maintainability of appeal - interpretation of statute - Section 28(3) of the Goa Tax on Entry of Goods Act, 2000 - time limitation - HELD THAT:- The petitioner's Second Appeal is restored to the Tribunal in order to enable the Tribunal to consider and dispose of the petitioners applications for condonation of delay on their own merits - application disposed off. 2019 (10) TMI 487 Recovery of arrears of Sales Tax - time limitation - Section 17(6) of the KGST Act - whether any obligation to pass fresh assessment orders for the years 1999-00 and 2000-01, was cast upon the first respondent on the basis of the directions contained in Exts. P7 and P8 judgments? - HELD THAT:- The petitioner cannot contend that the directions contained in Ext.P7 judgment was applicable for the assessment years 1999-00 and 2000-01 also. Hence, the contentions put forward by the petitioner, based on Exts.P7 and P8 judgments, are without substance and hence rejected. Whether Ext.P9 assessment order for the year 1999-00 is bad for the reason that the exemption available to rubble till January, 2000 was not taken into consideration by the assessing authority? - HELD THAT:- The assessee having failed to produce the requisite documents for the purpose of claiming exemption and having preferred an appeal against the assessment order, cannot be heard to contend that the assessment order was bad for the reason that a particular exemption was not taken into consideration by the assessing authority - the exemption claimed by the petitioner was not available through out the assessment year 1999-00. A reading of Section 17(6) shows that the section casts a liability on the assessing officer to complete the assessment within a period of four years from the expiry of the year to which the assessment relates. Completion of the assessment does not mean communication of the order of assessment. Ext.P10 assessment was completed on 28.03.2006 and not on 23.09.2013 or even 4.09.2006, as contended by the petitioner - In this context, it may be pertinent to consider the amendment brought to the KGST Act, by virtue of the Finance Act, 2005. Neither Ext.P11 nor any of the decisions therein lays down the position that an assessment order would be completed only on the order being served on the assessee. Hence, the contention that Ext.P10 order was issued beyond time, is liable to be rejected. There are no sustainable ground of challenge against Ext.P13 or any valid reason for granting the reliefs sought in the writ petition - petition dismissed. 2019 (10) TMI 486 Classification of goods - rusk/toast - whether rusk/toast would fall under entry 7 under the head Bread under Schedule I of the Chhattisgarh Value Added tax Act, 2005 or whether those items would be required to be dragged into residuary entry under Part IV of Schedule II of the said Act? - HELD THAT:- The settled position in law is that attempts has to be made to find out as to whether the same answers to description of the contents of the basic entry and only in the event it is not possible to do so, recourse to the residuary entry has to be taken as a last resort. Applying such a principle we cannot accept the arguments of the State that the rusk and toast should be dragged into the residuary item away from the broad head of bread, which finds entry and is exempted from levy of any tax under the VAT Act. The view so taken by the learned single judge in KESHARWANI ENTERPRISES VERSUS STATE OF CHHATTISGARH AND OTHERS (AND OTHER CASES) [ 2018 (3) TMI 1683 - CHATTISGARH HIGH COURT] has held that this court holds that rusk and toast also would fall within entry 7 of Schedule I of the VAT Act and it cannot be considered to be one which would come under the residuary entry, is well fortified and supported by the settled principles of law and binding precedents in relation to such interpretation, therefore, we are not enthused by the argument made on behalf of the State that the decision of the learned single judge needs to be interfered with by treating rusk and toast as different items to be brought under residuary entry and allow the taxing authorities to assess such items as such and demand tax. Appeal dismissed.
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