TMI Tax Updates - e-Newsletter
October 18, 2019

Case Laws in this Newsletter:

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

TMI SMS

• Commission Agents of agriculture produce is not required to be registered u/s 24(vii), but is liable to get registered u/s 22(i) of the CGST

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• Service tax was paid under wrong Registration No. of the Director is allowed to be adjusted with tax liability of the company.

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Articles

1. Analysis of GST Circulars issued on 11th October, 2019

   By: Chitresh Gupta

2. RECENT DEVELOPMENTS IN GST

   By: Dr. Sanjiv Agarwal

3. TRANSACATION THAT IS NEITHER A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. NITI Aayog launches India Innovation Index 2019

2. CCI approves Kora Master Fund LP investment of up to 10% ($75 million) in Edelweiss Securities Limited under sub-section (1) of Section 31 of the Act.

Notifications

Customs

1. 76/2019 - dated 17-10-2019 - Cus (NT)

Exchange Rates Notification No.76/2019-Custom (NT) dated 17.10.2019

2. 57/2019-Customs (N.T./CAA/DRI) - dated 16-10-2019 - Cus (NT)

Appointment of CAA by DGRI

FEMA

3. S.O. 3722(E) - dated 16-10-2019 - FEMA

U/s 6(7) of FEMA 1999, Central Government determines the instruments as debt instruments

GST - States

4. 25/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to notify the grant of alcoholic liquor licence neither a supply of goods nor a supply of service as per Section 7(2) of KGST Act, 2017

5. 24/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (7/2019) No. FD 48 CSL 2017, dated the 29th March, 2019

6. 23/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (4/2018) No. FD 48 CSL 2017, dated the 25th January, 2018

7. 22/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (13/2017) No. FD 48 CSL 2017, dated the 29th June, 2017

8. 21/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (12/2017) No. FD 48 CSL 2017, dated the 29th June, 2017

9. 20/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (11/2017) No.FD 48 CSL 2017, dated the 29th June, 2017

10. 19/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to exempt supply of goods for specified projects under FAO

11. 18/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (02/2019) No. FD 48 CSL 2017, dated the 7th March, 2019

12. 17/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (26/2018) No.FD 48 CSL 2017, dated the 31st December, 2018

13. 16/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (03/2017) No.FD 48 CSL 2017, dated the 29th June, 2017

14. 15/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (02/2017) No. FD 48 CSL 2017, dated the 29th June, 2017

15. 14/2019 No. FD 48 CSL 2017 - dated 30-9-2019 - Karnataka SGST

Seeks to amend Notification No. (01/2017) No.FD 48 CSL 2017, dated the 29th June, 2017

16. F. 17 (131-Pt.-II)ACCT/GST/2017/ 4891 - dated 10-10-2019 - Rajasthan SGST

Notification to prescribe the due date for furnishing of return in FORM GSTR-3B for the months of October, 2019 to March, 2020.

17. GST-2019-20/44 - dated 9-10-2019 - Uttar Pradesh 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

SEZ

18. S.O. 3720(E) - dated 11-10-2019 - SEZ

Central Government notifies an additional area of 1.965 hectares, as a part of above Special Economic Zone, thereby making the total area of the Special Economic Zone as 29.39 hectares at 371/2, Kadayam Perumpathu Village, Near Petrol Bunk, Mathapuram, Ambasamudram Taluk, Tirunelveli District, in the State of Tamil Nadu

Circulars / Instructions / Orders

GST

1. GST Trade Notice No. 013/2019 - dated 5-9-2019

GST— Special Refund Mela from 01.09.2019 to 22.09.2019 -Communication thereof

Highlights / Catch Notes

GST

• Non-Authorized SEZ Services Not Zero-Rated, Taxed at 18% Under IGST Act 2017.

  Case-Laws - AAR : In case of services provided to the SEZ Unit is not for authorized operations, then they would not be treated as supplies to SEZ Units and would not be covered under the zero-rated supplies but still would be a transaction covered under the IGST Act, 2017 and taxable at 18%
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• IT Support Services Classified Under Service Code 998316: Advising, Troubleshooting, and Recovery Included.

  Case-Laws - AAR : Classification of services - IT Support Services - The services are not directly involved in the provision of the service or supply of goods by the recipient, and hence only assists the recipient of services by providing advice, trouble shooting of hardware and software, to recover the damaged portion and the like - these services squarely fall under the Service Code 998316.
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• E-commerce platform exempt from GST on driver services, but must pay GST on services to drivers.

  Case-Laws - AAR : Liability of GST - Operation of e-commerce platform - The applicant is not liable to pay tax for the supply of services by drivers through the e-commerce platform operated by the applicant, but he is liable to pay tax on the services provided to the drivers
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• Commission Agents for Dry Chillies: No Registration Under CGST Section 24(vii), Required u/s 22(i.

  Case-Laws - AAR : Commission Agents - service of supplying dry chillies on behalf of farmers to the traders - Even the APMC Act considers them as agricultural produce - the applicant does not fall under the category of persons to be compulsorily registered u/s 24(vii) - However the applicant is liable to get registered u/s 22(i) of the CGST Act 2017.
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Income Tax

• Penalty Proceedings u/s 271(1)(c) Require Evidence, Not Just Upheld Additions by CIT(A.

  Case-Laws - HC : Merely because additions made by the AO have been partially upheld by the CIT (A), would not confer the ground to initiate proceedings u/s 271(1)(c) of the Act of imposition of penalty, unless it is found that there is concealment of material facts, or furnishing of inaccurate particulars.
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• Double Taxation Concerns: Payments Already Taxed at Same Rate Shouldn't Face Disallowance u/s 40A(2)(b.

  Case-Laws - AT : As the amount paid by the assessee to specific persons are taxed in the hands of specific persons at the same rate , disallowance u/s 40A(2)(b) will be meaningless inasmuch as “permitting the Revenue to tax the same income again at the same rate in the hand of principal payer would amount to double taxation".
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Customs

• Court Grants Customs Duty Refund Without Challan Requirement; Payment Confirmed Valid and Properly Executed.

  Case-Laws - AT : Refund of customs duty - No challan was taken by the appellant therefore, there is no question of producing any challan by the appellant. So far as the payment by the appellant is concerned, there is no dispute and the payment has been made correctly - refund allowed.
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Service Tax

• Appellant entitled to refund of excess service tax paid; claim not barred by limitation due to overpayment.

  Case-Laws - AT : Refund of excess service tax paid - It is just that excess amount paid by the assessee and happily accepted by the Revenue without raising any objection, which is being sought by the appellant - the claim for the same could never be barred by limitation.
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• Service Tax Error Corrected: Payment Recognized Under Correct Registration After No Objection Certificate Issued by Director.

  Case-Laws - AT : Service tax was paid under wrong Registration No. - whether could be treated as non-payment of service tax or not? - the said Director (in whose the tax was deposited) has given No Objection Certificate and as such the deposit made by the Appellant has to be treated as having been made in his own Registration No.
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Central Excise

• CENVAT Credit Dispute: Services for SEZ Construction and Residential Flats Ineligible as Input Services for Output Credits.

  Case-Laws - AT : CENVAT Credit - input services - SEZ unit - the services, which have been claimed by the assessee to have been used as input service for Maintenance & Repair of Immovable Property and Renting of property have actually being used by them for construction of building on SEZ and some residential flats and therefore same cannot be input services for their registered output services.
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• Chewing Tobacco Rules permit transferring unutilized CENVAT Credit between units; revocation by the Department cannot be retroactive.

  Case-Laws - AT : Transfer of CENVAT Credit lying un-utilized - the scheme contemplated under Chewing Tobacco Rules is self-contained and there is no bar under the said Rules to transfer the credit from one unit of the manufacturer to the other unit - If, at all, the Department wants to withdraw the permission, it cannot be done with retrospective effect.
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• Authority Oversteps: Ruling Beyond Show Cause Notice Scope, No Allegation of Goods Mismanagement by Manufacturer or Dealer.

  Case-Laws - AT : As there is no such allegation in the show cause notice to allege that the goods were never received by the appellant-manufacturer and supplied by the dealer, in that circumstance, the adjudicating authority has gone beyond the scope of show cause notice.
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• Court Rules Refilling and Relabeling Ink Containers Isn't Manufacturing; No Need to Reverse CVD Credit on Imports.

  Case-Laws - AT : Reversal of Cenvat credit - activity of refilling/relabeling of ink containers - Process not amounting to manufacture - f the activity does not amount to manufacture, in that case, the duty paid by the appellant shall amount to reversal of credit. Therefore, the appellant is not required to reverse the credit of CVD availed by the appellant at the time of import - Demand set aside
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Case Laws:

• GST

• 2019 (10) TMI 619
  Rate of IGST - invoices raised to the SEZ Units, even if the accommodation services were rendered outside the SEZ Zone - inter-state supply or not - HELD THAT:- The provisions in Section 7(5)(b) of the IGST Act, 2017 overrides the provisions in Section 12(3)(c) of the IGST Act, 2017 and hence the transaction of the applicant is an inter-State supply of services, provided that the supply of services made to the SEZ Unit is an authorized operation under the SEZ Act. The applicant has also provided the copy of the Circular No.2/2014 dated 25.07.2014 issued by the Development Commissioner, Office of the Zonal Development Commissioner (Kerala and Karnataka Special Economic Zones) to all Developer, Co-Developers and Units of SEZs located in Kerala and Karnataka, in which it is stated that the Accommodation Services are added to the list of services to enable the SEZ Units to avail service tax benefits for their authorized operation - In view of the above, if the SEZ Unit is procuring the accommodation services for their authorized operation, the same would be covered under supply to SEZ Units and hence would be inter-State supplies and would be a zero-rated supply under sub-section (1) of section 16 of the IGST Act, 2017. In case of services provided to the SEZ Unit is not for authorized operations, then they would not be treated as supplies to SEZ Units and would not be covered under the zero-rated supplies but still would be a transaction covered under the IGST Act, 2017 and taxable at 18% with the place of supply being the provision of such services.

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• 2019 (10) TMI 618
  Classification of goods - Char-Dolochar /Dolochar (waste emerged during the process of manufacturing Sponge Iron) supplied by him - whether classified under Tariff Item 2621 90 90 of Customs Tariff Act, 1975 or under Tariff Item 2701 20 90 of Customs Tariff Act, 1975? - N/N. 01/2017- Integrated Tax (Rate) dated 28 June 2017. HELD THAT:- Coal is a natural occurring substance, Volatile matter whereas in Coke is prepared material with few impurities and high Carbon content, and very low Volatile matter content which suits it for a better fuel - Char-dolachar should not be classified under sub-heading 2701 20 90 as Other Briquettes, ovoid s and similar solid fuels manufactured from coal. Where in briquette or ovoid or similar solid fuel manufactured from coal only. Hence Char dolachar is a by-product emerging during manufacture of sponge iron, and not a fuel manufactured from coal. Therefore byproduct dolochar does not fall under serial 43 of Schedule I of the Notification No. 1/2017-lntegrated Tax (Rate) dated 28.06.2017, which provides the list of goods that attract IGST at the rate of 5%. Chapter 2619 shall covers slag, dross (other than granulated slag), scaling and other waste from the manufacture of iron or steel. Therefore the impugned by product Char-Dolochar/Dolochar (waste emerged during the process of manufacturing Sponge Iron) supplied by the Applicant is classifiable under Tariff Item 2621 90 90 of Customs Tariff Act, 1975 and therefore, in view of Entry 30 of Schedule III of Notification 01/2017- Integrated Tax (Rate) dated 28 June 2017 as amended from time to time, attract a levy of 18%.\ The Char-Dolochar/Dolochar (waste emerging during the process of manufacturing Sponge Iron) supplied by the Applicant is classifiable under Tariff Item 26190090 of Customs Tariff Act, 1975 and therefore, in view of Entry 28 of Schedule III of Notification 01/2017- Integrated Tax (Rate) dated 28 June 2017, attract tax at the rate of 18 percent IGST - The intra-State supply of the same would attract CGST at 9% Entry 28 of Schedule III of Notification 01/2017- Central Tax (Rate) dated 28 June 2017 land similarly a KGST at 9 percent.

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• 2019 (10) TMI 617
  Classification of services - IT Support Services - IT Managed Services - N/N. 11/2017-Central Tax (Rate) dated 28th June 2017 - the entries that need to be examined are 99831, 99833, 99834 and 99839. The other entries which may need examination are 998598, 998729. HELD THAT:- The Support services provided by the applicant have been examined and it is seen that the support services include the support of software products and also hardware products. Some of the plans include support of the entire infrastructure (especially Pro-active support services). Hence it is common contract for maintenance of hardware and software and hence is directly related to the Group related to information technology services and hence is covered under the Group 99831. Whether the support services fall under Service Code (Tariff) 998313 or 998316 or 998319? - HELD THAT:- It is seen that applicant is providing support of both hardware and software and the issue boils down to whether they are covered under Information Technology Consulting and Support Services (Service Code 998313) or Information Technology Infrastructure and Network Management Services (Service Code 998316). The operations of the applicant are analysed with reference to the above and found that the support services mentioned above are all related to such services which are not directly involved in the provision of the service or supply of goods by the recipient, and hence only assists the recipient of services by providing advice, trouble shooting of hardware and software, to recover the damaged portion and the like - The Managed Services provided by the applicant have also been examined and found that they are related to the management of Data Centres, Storage infrastructures, Networks and Communication infrastructures and hence are directly related to the Group related to information technology services and hence is covered under the Group 99831. The managed services offered by the applicant is verified and found that they are involved in the management of IT infrastructure including networks and hence these services squarely fall under the Service Code 998316.

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• 2019 (10) TMI 616
  Liability of GST - supply of services by another person through the e-commerce platform operated by the applicant - GST Act, 2017 - providing drivers to the consumers - HELD THAT:- The applicant is only acting as an intermediary through the e-commerce platform, wherein the consumers who are in need of drivers would log in to the portal and select the driver. The drivers are listed in the e-commerce platform and the contract is between the drivers and the consumers, with the applicant acting as a facilitator. In some cases, the consideration for this service is received by the applicant on behalf of the drivers and the same would be paid to the drivers. Hence the applicant is not providing drivers to the consumers but only facilitating the consumers and drivers to come together for provision of service. The supplier of services is the e-commerce platform service provider - HELD THAT:- The applicant in the instant case and the recipient of the supply of service is the driver as he is the person liable to pay the consideration. The applicant is collecting service charges for the usage of electronic commerce platform like listing services, payment collection etc. and the applicant has admitted GST liability on the above service charges collected and declaring the same in the returns - This turnover is not subject matter of this application for advance ruling and hence not considered. Applicant is operating an electronic commerce platform and is providing a platform for the obtaining the services of drivers by the consumers - HELD THAT:- The drivers are the suppliers of services which are separate supplies and the treatment of the taxability of this transaction is not a subject matter of the advance ruling - However, it is pertinent to note that section 9(5) of the CGST Act 2017 does not shift the liability of these services provided by the drivers from the drivers themselves to the e-commerce operator. The applicant is not liable to pay tax for the supply of services by drivers through the e-commerce platform operated by the applicant, but he is liable to pay tax on the services provided to the drivers. Further, the applicant is liable to collect tax under section 52 on the net value of taxable supplies made by the drivers through it where the consideration with respect to such supplies is to be collected by the applicant.

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• 2019 (10) TMI 615
  Commission Agents - Dry Chilly - agriculture produce or not - service of supplying dry chillies on behalf of farmers to the traders - issue sale patties to the agriculturist principals. - section under which registration required - Rate of GST - Benefit of exemption - HSN Code for Dry Chilly. HELD THAT:- It is an admitted fact that the Applicant is a commission agent involved in the business of receipt of dry chillies from the farmers (principals) and supply of the same to the buyers/traders, on behalf of farmers in the Byadgi A.P.M.C. Market, Karnataka. They are registered under the APMC Act also under the GST Acts. They sell goods (dry chillies) on behalf of principals to the traders, issue invoices to the traders/buyers as prescribed under the APMC Act and also issue sale patties to the principals. They collect commission, on the services provided to the principals, from the purchasers / buyers and the same is also shown in the invoice issued to the purchasers. Whether the applicant qualifies to be an agent in terms of para 3 of Schedule I to CGST Act and also whether the applicant is involved in taxable supply or not? - HELD THAT:- In the instant case the applicant sells the goods i.e. dry chillies on behalf of the principal, issues invoice to the buyer/trader in his own name, receives commission as per APMC Act of the State of Karnataka. Therefore the applicant has the authority to pass the title of the goods on behalf of the principal to the buyer, as the invoice is raised in their own name and hence qualifies to be an agent in terms of para 3 of Schedule I to the CGST Act and also in terms of definition under Section 2(5) of CGST Act 2017. Whether the applicant is involved in making taxable supply or not? - HELD THAT:- In the instant case the principal i.e. farmer is not a taxable person and hence the applicant is not involved in supply of goods of another taxable person (farmer). Therefore the applicant does not fall under the category of persons to be compulsorily registered under Section 24(vii) of the CGST Act 2017. However the applicant is liable to get registered under Section 22(i) of the CGST Act 2017. Whether dry chilli qualifies to be agricultural produce or not? - HELD THAT:- In the instant case the dry chillies are produced out of plants and are used for food or as raw materials and is a product obtained by drying the chillies to make it marketable for the primary market and this process does not alter its essential characteristics. Hence dry chillies are covered under the term agricultural produce . Even the APMC Act considers them as agricultural produce - the Applicant is involved in provision of exempted supply of services to the farmers for sale of dry chillies, an agricultural produce, in terms of entry no. 54(g) of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017.

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• 2019 (10) TMI 614
  Permission for withdrawal of Advance Ruling application - input tax credit availed on one product can be utilized for payment of duty on other product - HELD THAT:- The application of the applicant is disposed off as withdrawn under section 98(2) of the CGST Act, 2017 and Section 98(2) of the Punjab GST Act, 2017.

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• 2019 (10) TMI 613
  Permission for withdrawal of Advance Ruling application - HSN/Tariff classification GST rate - supply of bicycle frame lock to be fixed on Bicycle - HELD THAT:- The application of the applicant is disposed off as withdrawn under section 98(2) of the CGST Act, 2017 and Section 98(2) of the Punjab GST Act, 2017.

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• 2019 (10) TMI 612
  Arrest in response of summons - section 69 read with section 132(5) of the CGST Act - HELD THAT:- Issue notice, returnable on 23.10.2019. By way of adinterim relief, the petitioner will appear before the second respondent in response to the summons dated 7.10.2019 (Annexure-A to the petition). He, however, shall not be arrested under section 69 read with section 132(5) of the CGST Act when he appears before the concerned authority.

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• 2019 (10) TMI 611
  Grant of regular bail - offences under Sections 132(1)(b),(c)(d),(f),(i) and (1) of Central Goods and Services Tax Act 2017 punishable under Section 132 (1)(i) and (iv) of Central Goods and Services Tax Act 2017 read with Section 132(5) of Central Goods and Services Tax Act 2017 - HELD THAT:- Petitioner has submitted that all the accused had created 35 fake firms and after making fake entries, had issued invoices involving tax amount of more than 66.81 crores. The firms were misused for evading G.S.T. input taxes by the accused. The fake firms were created in the State of Jammu and Kashmir, West Bengal, Gujarat, Assam, Telangana, Uttar Pradesh and Rajasthan. Keeping in view the seriousness of allegations levelled against the petitioner, no ground for grant of bail to her is made out. Petition dismissed.

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• 2019 (10) TMI 610
  Interim bail application - bail sought on humanitarian grounds as accused wife due to deliver very shortly - HELD THAT:- Considering the facts that petitioner s wife is due to deliver within this week and on humanitarian grounds, it is deemed proper to allow the interim bail application of the petitioner for a period of fifteen days subject to petitioner surrendering his passport with the concerned Jail Superintendent. The accused-petitioner shall be released on interim bail for a period of fifteen days from the date of release - interim bail application allowed.

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• Income Tax

• 2019 (10) TMI 609
  Disallowance of depreciation on leased assets though the assessee could not substantiate its claim and also could not substantiate the existence of assets on which such depreciation was claimed - Revenue has contested the claim of the assessee of depreciation Crores on the leased assets on the ground that transactions was not genuine - HELD THAT:- Special leave petition is dismissed. As a sequel to the above, pending interlocutory applications, if any, stand disposed of.

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• 2019 (10) TMI 608
  Charitable trust - benefit under Section 10(23C)(iv) - proof of charitable activities - HELD THAT:- Delay condoned. Leave granted.

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• 2019 (10) TMI 607
  Penalty u/s 271D and 271E - HELD THAT:- This Court in these proceedings under Article 226 of the Constitution of India, take note of the submissions of the learned counsel for the petitioners, that the appeals preferred by them against the penalty orders have since been heard by the appellate authority, and orders are not passed in the appeals only because of the pendency of these writ petitions. Also note that when these writ petitions were admitted by this Court, this Court had by an interim order passed in March 2019, stayed the recovery of the penalty amounts from the petitioners during the pendency of the writ petitions. The writ petitions have been pending before this Court for over six months and a stay has also been operating in favour of the petitioners, in the meanwhile. Taking note of the fact that the statutory appeals can now be disposed by the First Appellate Authority, dispose these writ petitions by directing the CIT (Appeals) before whom the appeals preferred by the petitioners, against the orders of penalty passed against them under the Income Tax Act, are pending, to consider and pass orders on the same, expeditiously after hearing the petitioners, at any rate, within three months from the date of receipt of a copy of this judgment.

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• 2019 (10) TMI 606
  Maintainability of Revision application u/s 263 - application dismissed on the ground that the Petitioner has remedy to file an appeal against the assessment order but dismissed it on merits - HELD THAT:- Deduction on account of stamp duty paid and other expenditure incurred in relation to transfer was not claimed in the return of income, the same could be urged before the Commissioner of Income Tax in the revision application. Thus, without considering the above submission, the impugned order holds that if claim is not made in the return of income, then it is not possible to urge the same before the revisional authority. In the above view, we are inclined to set aside the impugned order and restore the proceedings back to the file of the Commissioner of Income Tax. So far as objection of the Revenue is concerned, we find no merit therein. The Act itself provides remedy of revision from the order of assessment. Therefore, when the assessee chooses the remedy provided under the Act, then the Revenue cannot hold it against the assessee. In the present case, the revision application has not been dismissed by the authority on the ground that the Petitioner has remedy to file an appeal against the assessment order but dismissed it on merits. The impugned order dated 8 March 2019 passed by the Commissioner of Income Tax is set aside and the revision application is restored to the file of the Commissioner of Income Tax for fresh disposal.

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• 2019 (10) TMI 605
  Penalty u/s 271(1)(c) - HELD THAT:- CIT (A) has set aside the penalty imposed upon the respondent assessee u/s 271(1)(c) while observing that the AO had not been able to establish either any concealment of material fact, or furnishing of inaccurate particulars by the assessee and the Tribunal has affirmed the said finding of the CIT (A). The order passed by the AO in the relevant proceedings does not disclose as to what is the concealment of material fact, or furnishing of inaccurate particulars in respect whereof the penalty is sought to be imposed on the assessee. Merely because additions made by the AO have been partially upheld by the CIT (A), would not confer the ground to initiate proceedings u/s 271(1)(c) of the Act of imposition of penalty, unless it is found that there is concealment of material facts, or furnishing of inaccurate particulars. No question of law.

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• 2019 (10) TMI 604
  Penalty u/s 271(1)(c) - defective notice - non specification of charge - HELD THAT:- The contents of the notice issued before levy of the penalty which clearly show that A.O. has not mentioned as to for which limb of Section 271(1)(c) penalty proceedings have been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The ITAT, Delhi C-Bench in the case of Shri Gulshan Kumar Jhurani, New Delhi vs., ACIT, Circle-37(1), New Delhi [ 2019 (10) TMI 453 - ITAT DELHI] considering the Judgment of Pr. CIT vs., M/s. Sahara India Life Insurance Company Ltd., [ 2019 (8) TMI 409 - DELHI HIGH COURT] and M/s. SSA Emerald Meadows reported [ 2016 (8) TMI 1145 - SC ORDER] set aside the Orders of the authorities below in same circumstances and cancelled the penalty. - Decided in favour of assessee.

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• 2019 (10) TMI 603
  Under valuation of closing stock of Guar Seeds - AO adopted cost price @19.15 per kg. presuming that goods purchased on 30.07.2009 @ 22.11 per kg. have been sold out and goods out of opening stock were remained in closing stock - HELD THAT:- We are of the considered view that it would be reasonable and justifiable if average rate were applied for valuation of closing stock. We find that rate of opening stock was at Rs. 19.15 per kg. whereas closing stock was at Rs. 9.49 per kg. The average realization value is at Rs. 17.75 per kg. therefore, it would meet end of justice if average of 19.15+9.49+ 17.15= 46.14/3 = 15.83 per kg. may be adopted for valuation of closing stock as on 31.03.2010. Accordingly, the AO is directed to recalculate the closing stock by taking rate of Rs. 15.83 per kg. Thus, the Ground No. 1to 4 are partly allowed. So far, Ground No. 5 is concerned, since the closing stock is opening stock for next year. Therefore, as a corollary to increase in closing stock would lead to increase in opening stock of next year, therefore, the AO would take opening stock as on 1st April of next financial year as worked out on the basis of average rate as per our observation given herein above. Accordingly, this ground is allowed. Disallowance of salary payment in respect of person specified under section 40A(2)(b) - HELD THAT:- Recipient of remuneration are have requisite qualification and rendered service for handling of banking services, moreover, as the AO has accepted part payment reasonable, meaning thereby that they have rendered some services. If that is so, then, no disallowance under section 40A (2) (b) could be made as the recipient and payer are assessed to tax at same rate, hence, there is no evasion of tax. The copy of acknowledgement of return of income filed showed that both the person specified under section 40A (2) (b) of the Act are assessed at maximum marginal rate. Therefore, the issue is covered by the decision of Tribunal in the case of H.C. Sons v. ACIT Circle -12 Ahmedabad [ 2017 (1) TMI 1688 - ITAT AHMEDABAD] wherein following the ratio laid of PWS Engineers Limited v. DCIT [ 2016 (6) TMI 596 - GUJARAT HIGH COURT] held as long as the amount paid by the assessee to specific persons are taxed in the hands of specific persons at the same rate , disallowance under section 40A(2)(b) will be meaningless inasmuch as permitting the Revenue to tax the same income again at the same rate in the hand of principal payer would amount to double taxation . We are of the considered opinion that disallowance made under section 40A(2)(b) of the Act are not justified. Hence, same are directed to be deleted

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• 2019 (10) TMI 602
  Deduction of amortisation of preliminary expenses u/s. 35D - HELD THAT:- The impunged assessment year is not the first year of the assessee raising the instant amortization claim. It has come on record that the Assessing Officer had himself allowed the very relief of 20% in preceding assessment year whilst framing a regular assessment. The instant issue before us is therefore merely a consequential one since the earlier relief granted to the assessee hereinabove has attained finality. - Decided against revenue Disallowance u/s 14A - HELD THAT:- Assessee was having interest free fund to the tune of Rs. 201 crores as against its investment made in Mutual Fund amounting to Rs. 5 lacs only. Therefore, the appeal of the Revenue was dismissed. Considering the aforesaid facts on similar issue we do not find any merit in the ground of appeal of the Revenue, therefore, the same stand dismissed. - Decided against revenue Addition of unutilised CENVAT credit u/s. 145A - HELD THAT:- There can hardly be any dispute in view of catena of above referred case law that the impugned addition is a revenue neutral case since any adjustment made in closing stock follows a consequential increase in opening stock of the succeeding assessment year as well. The assessee has already demonstrated during the course of lower appellate proceedings that there is no revenue effect either way if it follows inclusive or exclusive method qua the CENVAT credit. DR fails to rebut this clinching factual position. We therefore affirm the CIT(A) s findings under challenge. The Revenue fails in its last substantive ground as well. Disallowance being the amount of Employees contribution to Provident Fund and ESI u/s. 2(24)(x) r.w.s. 36(1)(va) - addition was made as the assessee has deposited the Employees contribution to Provident Fund as well as ESI after the due date prescribed in the relevant Act - HELD THAT:- After following the decision of Hon ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation 2014 (1) TMI 502 - GUJARAT HIGH COURT] we do not find any merit in the appeal of the assessee as the assessee shall not be entitled to deduction of such sum in computing the income until such sum is credited by the assessee to the employees account in the relevant fund or funds on or before the due date prescribed in the relevant Act. Therefore, this ground of appeal of the assessee is dismissed.

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• 2019 (10) TMI 601
  Capital gain computation - only grievance of AO is that that assessee should not have been granted the deduction of the valuation of the land as on 01/04/1981 at INR 9 102600/ wherein the valuer has taken the land at the rate of INR 130/ per square metre - AO has rejected the valuation report stating that it is without any basis - CIT-A has held that assessee has been given an option according to the provisions of section 55 (2) (b) of the income tax act to adopt the fair market value as on 1/4/1981 by submitting the valuation report from an approved valuer to substitute in option to the cost of acquisition of the asset - HELD THAT:- AO has not put on record any evidence to show that the valuation report obtained by the assessee is devoid of any merit or the prevailing rate as on that date on 01/04/1981 of the similar property were less than INR 1 30/ per square meter. No such evidences have been shown to us or before the learned CIT A. In view of this, the rejection of the valuation report by the learned assessing officer cannot be accepted. Even otherwise in the grounds of appeal the learned AO has raised an issue that taking the valuation of land as per approved valuer s report means that the land purchased in 1993 has not been distinguished for the taxation purposes separately. However, no evidence has been produced before us that the impugned land sold by the assessee is acquired post 1 /4/1981. In view of this ground number 1 of the appeal is dismissed. Chargeable to tax as per the provisions of section 112 - HELD THAT:- The above issue now is squarely covered by the decision of Dempo Co Ltd [ 2016 (10) TMI 62 - SUPREME COURT] wherein it has been held that section 50 of the income tax act is a special provision for computing the capital gain in the case of depreciable asset is only restricted for the purpose of the provisions of section 48 of section 49 of the income tax act specifically. It has nothing to do with the exemption that is provided in totally different provisions. CIT- A while deciding the issue in para number 5.4.3 has relied upon the decision of the coordinate bench and granted relief to the assessee. - Decided against revenue.

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• 2019 (10) TMI 600
  Validity of notice u/s 148 - assessment of unexplained source of deposits in Canara Bank - HELD THAT:- No new issue has cropped up, subsequently on new set of facts. The reason forming belief was deposit of Rs. 31.00 lakhs which was sourced from the sale of land which attracts the capital gains tax and the assessee did not offer the same for taxation. Thus the issue for reopening and addition made is one and the same. we hold that the AO has rightly issued notice u/s 148, accordingly, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee on this ground. Merits of the case, the Ld.CIT(A) found that the impugned land was sold for non agricultural purpose and admitted that the said land is situated within the limits of GVMC. Therefore, the Ld.CIT(A) held that the sale consideration attracts capital gains tax and accordingly upheld the order of the AO. During the appeal hearing, the Ld.AR did not advance any arguments on merits of the case. Since the said land is within the limits of GVMC and the land was sold for non agricultural purposes to non agriculturists, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the assessee. The appeal of the assessee is dismissed.

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• 2019 (10) TMI 599
  Validity of initiation of proceeding u/s 147/148 - DR has pointed out that the assessee did not file any return of income for the year under consideration and the AO received an AIR information regarding deposit of cash of Rs. 38,29,000/- in the Bank of Baroda, Jaipur - HELD THAT:- AO after considering the withdrawal as well as transfer from one account to another account calculated the net deposit and therefore, the AO has formed the opinion that income assessable to tax has escaped assessment. We further note that before the CIT(A), the assessee has advanced arguments challenging the initiation of proceedings u/s 148 the same is without any basis and proper material on record but the assessee has not brought any material on record to show that these deposits in the bank account do not represent the income of the assessee. Therefore, in the absence of any contrary fact or material available on record the information received by the AO regarding deposits made in the bank account of the assessee and specifically when the assessee has not filed any return of income constitute a tangible material to form the belief that the income assessable to tax has escaped assessment. Accordingly, we do not find any substance or merit in this ground of the assessee. Addition on account of deposits made in the bank account - HELD THAT:- Except the submissions of the assessee and an affidavit filed in support of the submissions the assessee has not produced any other record to establish that the cash deposited in the bank account of the assessee was actually belong to one Shri Amit Goyal. In the absence of any documentary evidence to show that the said amount actually belongs to alleged shri Amit Goyal and also offered to tax in the hand of the other person we do not find any reasons to interfere with the impugned order of the ld. CIT(A) qua this issue.

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• 2019 (10) TMI 573
  Disallowance of claim of agricultural income - addition qua the long term capital gains - Admission of additional evidence - HELD THAT:- These matters are identical so also the plea taken in respect of filing of the additional evidence. On a consideration of the nature of the evidence sought to be produced, we are satisfied that such evidence has a bearing on the extent of liability to tax of the assessee. We, therefore, find that the evidence sough to be produced is relevant and since all the endeavor of the authorities under the Income- tax Act is to reach the just tax liability of the assessee, we are of the considered opinion that no prejudice would be caused to any of the parties by admitting all the additional evidence and setting aside the matter to the ld. AO to appreciate the contentions of the assessee in the light of such additional evidence.

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• Customs

• 2019 (10) TMI 598
  Confiscation of imported goods - Uncut Diamonds - lack of jurisdiction of Commissioner - HELD THAT:- While the petitioner impugns Ext.P11 order on various ground including the lack of jurisdiction of the Commissioner in directing a confiscation of goods that were eventually covered by the Kimberly Certificate prescribed for the purposes of its import, a delay in adjudication of the matter would prejudicially affect the petitioner, who has been permitted to re-export the goods by Ext.P11 order. Without prejudice to the right of the petitioner to impugn Ext.P11 order, to the extent it imposes a penalty and redemption fine in lieu of confiscation on the petitioner, before the appellate authority in appropriate proceedings, the petitioner is permitted to re-export the imported diamonds on the strength of the Kimberly Process Certificate now produced by him as Ext.P10, and subject to his paying the penalty and redemption fine under protest before the respondents. Petition disposed off.

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• 2019 (10) TMI 597
  Refund of customs duty - rejection of refund on the ground that appellant have not produced the challans - HELD THAT:- As per admitted fact, the payment was taken by the DRI through bankers cheques and the same was deposited in the bank and realized the amount. No challan was taken by the appellant therefore, there is no question of producing any challan by the appellant. So far as the payment by the appellant is concerned, there is no dispute and the payment has been made correctly. The appellant are entitled for the refund and the same may be processed in accordance with the law - appeal allowed - decided in favor of appellant.

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• Insolvency & Bankruptcy

• 2019 (10) TMI 596
  Admissibility of application - initiation of CIRP - Default of debt - section 60(5) of I BC - HELD THAT:- The Resolution professional has provided to the resolution applicants all relevant information in the Information memorandum for filing their resolution plans and CIRP cannot be further stalled by acceding to such request of the unsuccessful Resolution Applicant for serving them with copy of minutes of CoC meetings. The request of the Unsuccessful Resolution Applicant in MA No. 2140 of 2019 and 2141 of 2019 is hereby rejected. Application disposed off.

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• 2019 (10) TMI 595
  Maintainability of petition - initiation of CIRP - Corporate Debtor did not pay the outstanding amount and hence defaulted in payment of the operational debt - Section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Corporate Debtor has admitted to the default in payment of dues to the Operational Creditor stating that the Corporate Debtor is unable to pay the outstanding dues of the Operational Creditor due to circumstances and factors wholly beyond the control of the Corporate Debtor - The Operational Creditor has not proposed the name of an Interim Resolution Professional [IRP]. The Operational Creditor in the case in hand, succeeds in proving all the ingredients of Section 9(5)(i) of the Code and therefore, the application is liable to be admitted. The application filed by the Operational Creditor under Section 9 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, Kampilya Builders Private Limited is hereby admitted - Moratorium declared.

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• 2019 (10) TMI 594
  Direction to the Ex-Director/Promoter not to leave the country without permission of this Tribunal and to impound their passports - HELD THAT:- The non-applicant-respondent Nos. 1 to 3 would be required by the law enforcing agencies and there are substantial allegations which cannot be brushed aside merely on the ground that the non-applicants have co-operated with the Resolution Professional or other investigating agency so far or on the ground that the non-applicants have roots in society which would prevent them to flee this country. Therefore, the direction issued on 23.04.2019 that non-applicants-respondent Mr. Athar Zia, Mrs. Sheeza Zia Mr. Mohammad Zulfiqar Ullah Siddiqui are not to leave the country without prior permission of this Tribunal is made absolute - Accordingly, it is directed the aforesaid persons are not to leave the country without prior permission of this Tribunal. Impounding of passport - HELD THAT:- The Resolution Professional - applicant is granted liberty to move an appropriate application, if so advised, to the passport authorities under Section 10 or Section 10A of the Passport Act, 1967 for impounding of the passport of the non-applicant-respondent Nos. 1 to 3. The rejection of the prayer in that regard shall not be construed any bar on the right of the Resolution Professional-applicant to move the passport authorities. Application disposed off.

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• 2019 (10) TMI 593
  Permission for withdrawal of application - Maintainability of application - initiation of CIRP - Corporate Debtor - main plea taken by the appellant is that the Assignment Agreement dated 17th April, 2015 is not genuine - HELD THAT:- There are no ground to allege malicious intent on the part of the Financial Creditor for the purpose of Section 65 of the I B Code. The validity of the Assignment Agreement cannot be decided by the Adjudicating Authority and, therefore, the same issue could not been reiterated. The appeal stands disposed of as withdrawn.

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• Service Tax

• 2019 (10) TMI 592
  Refund of service tax - denial of refund on the ground that the Service Tax was paid in respect of services not completed by them - HELD THAT:- It is an undisputed fact that the assessee raised credit note in the name of M/s. CIFCL, which fact was also duly acknowledged by the other party. Moreover, from a perusal of the documents placed on record, M/s. CIFCL has confirmed having received the invoices and also confirmed to have not made any payment against the same. In the same letter, M/s. CIFCL has also confirmed that they have not availed Service Tax Input Credit against the said invoices. In the case on hand, with regard to the appellant s claim of issuing credit note, there is no counter by the Revenue and from the above, therefore, the credit note coupled with the confirmation by M/s. CIFCL is sufficient enough to hold that the appellant is in fact entitled to the refund. The Revenue authorities have not found the ineligibility of the appellant for refund or otherwise for want of any legal requirement, etc. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 591
  Refund of excess service tax paid - time limitation for claiming refund claim - appellant should have filed the claim for refund before one year from the relevant date i.e., from the date of payment of duty, which should have been before 05.10.2017 and 04.12.2017 and the assessee having filed the claim only on 15.05.2018 - HELD THAT:- It is not the case that the tax or duty which has been held to be unconstitutional, or even void for that matter, has been claimed as refund. It is just that excess amount paid by the assessee and happily accepted by the Revenue without raising any objection, which is being sought by the appellant. Hon ble jurisdictional High Court in the case of M/S. 3E INFOTECH VERSUS CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, COMMISSIONER OF CENTRAL EXCISE (APPEALS-I) [ 2018 (7) TMI 276 - MADRAS HIGH COURT ] squarely applies, wherein the Hon ble Court has even ordered for refund when the Service Tax itself was paid by mistake and that the claim for the same could never be barred by limitation. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 590
  CENVAT Credit - input services - outward transportation of goods from the factory/depot to the customers premises/port of shipment - place of removal - period from June 2007 to April 2008 - HELD THAT:- The appellant is entitled to cenvat credit of service tax paid on outward transportation of goods from the place of removal up to 31.03.2008 in view of the decision of the Hon ble Apex Court in the case of COMMISSIONER OF CUSTOMS CENTRAL EXCISE AND SERVICE TAX, GUNTUR VERSUS M/S. THE ANDHRA SUGARS LTD. [ 2018 (2) TMI 285 - SUPREME COURT] and also the decision of the Karnataka High Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, BANGALORE VERSUS M/S ABB LTD. AND OTHERS [ 2011 (3) TMI 248 - KARNATAKA HIGH COURT] . Further, the Hon ble Apex Court and the High Court of Karnataka in the aforesaid decision, also allowed the credit of service tax availed on transportation of goods up to customer s premises. Eligibility of cenvat credit of service tax on transportation of goods up to the customer s premises after the period w.e.f 01.04.2008 - HELD THAT:- In view of the various decisions of the Board Circular No. 1065/4/2018-CX dated 08.06.2018, the matter needs to be remanded to the original authority to verify certain factual aspects such as whether the sale is on FOR basis, whether the freight is integral part of the sale price, whether the Customs duty paid on the value inclusive of freight amount etc. Appeal is partly allowed in favour of the appellant for the period upto 31.03.2008 and partly remanded back to the original authority to pass a fresh order for the period April 2008.

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• 2019 (10) TMI 589
  Service tax was paid under wrong Registration No. - whether could be treated as non-payment of service tax or not? - HELD THAT:- There is no doubt about the fact that the Appellant had deposited the service tax. However, instead of depositing the same in their own Registration No., the same was, by mistake, deposited in the Registration No. of one of the Directors, obtained by him for his own Proprietary Concern. Admittedly, the said Director has given No Objection Certificate and as such the deposit made by the Appellant has to be treated as having been made in his own Registration No. In the absence of any dispute to the fact of payment of service tax, further confirmation of the same by the impugned order of the Commissioner (Appeals) cannot be appreciated. The order of the original adjudicating authority is restored - appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 588
  Non-payment of service tax - Commissioning and Installation services - Maintenance or repair services - Appellant appeared to have taken input/ service credit for providing above services; that the assessee had provided the above services to M/s. Tata Steel without payment of Service Tax though there was a contract for the above services, etc. - extended period of limitation - HELD THAT:- The Adjudicating Authority has given a finding on the contentions of the appellant; that the services rendered by the appellant was for consideration and that in case of orders for executing service, the appellant had sub-contracted after making payment for which, the appellant had also taken credit for the Service Tax amount charged. There is also a finding by Ld. Commissioner that the appellant did indeed allot vendor code and ledger to Tata Steel Ltd. by treating the other as its customers on which there is no refutal/rebuttal by the appellant and it is also a part of the record that the services rendered were the results of open bidding/tender where even the appellant amongst others, participated. On being successful, purchased order was placed and the contract came up executed. Extended period of limitation - HELD THAT:- It is a matter of record that the Revenue has come to know of the above facts only during the course of checking of records and not from an independent source and therefore, the same cannot be said to have been suppressed with an intention to evade tax and consequently, the demand cannot be raised beyond of the Normal period - there is no specific allegation of suppression, fraud, etc, to justify invoking larger period of limitation. The matter is remanded back to the file of the Adjudicating Authority for working out for liability, if any, for the normal period alone - matter allowed in part and part matter on remand.

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• 2019 (10) TMI 587
  CENVAT Credit - input services - Repair Maintenance Service of Audio Systems - The credit availed on the pollution equipment procured from M/s AVL India Pvt. Ltd. - SMS Services Campaign - Courier Agency Services - Mobile Phone Services - Security Services, Chartered Accountant Services, etc. - Consultancy Services - Advertising Event Management Services - Manpower Recruitment Service, Test Inspection Certification Service, Architect Service, Insurance Service and other Repair Maintenance Services. Repair and Maintenance of Audio System - HELD THAT:- The Appellant is entitled to avail Cenvat Credit of service tax paid on repair and maintenance service - reliance placed in the case of M/S. UTTAM TOYOTA VERSUS CCE ST, GHAZIABAD [ 2019 (2) TMI 573 - CESTAT ALLAHABAD] . Credit Availed On The Pollution Equipment Procured From M/s AVL India Pvt. Ltd. - only reason why this Cenvat Credit been denied to the Appellant is that it was not contested in reply to the show cause notice and the invoices had also not been submitted - HELD THAT:- This is apparently incorrect because not only had the Appellant contested this issue but had also enclosed the invoices. The procurement of the pollution equipment purchased by the Appellant is essential for provision of output service and therefore, the Appellant is entitled to take the credit. SMS Service Campaign - HELD THAT:- Advertisement of the Service Station of the Appellant is essential as it has to attract customers for servicing automobiles. It is not disputed that service station is not located at the place indicated by the Appellant. Hence, credit can be availed by the Appellant on service tax paid on advertising expenses. Courier Agency Services - HELD THAT:- The Adjudicating Authority could not have denied credit only for the reason that the invoices issued by the service providers did not contain the registration number - credit allowed. Mobile Phone Services - credit denied to the Appellant for the reason that the invoices against which credit was availed, were raised upon individual users of mobile phones (employees of the Appellant) and not the Appellant - HELD THAT:- The Department has not produced any evidence to rebut the presumption that the mobile phones were used in connection with the business of the Appellant - the Appellant is clearly entitled to avail the credit for mobile phones since the mobile phones were provided by the Appellant and payment of the bills was also made by the Appellant. Security Services And Chartered Accountant Services - HELD THAT:- The appellant entitled to credit following earlier decisions. Consultancy Services - HELD THAT:- When the order on which reliance was placed in the show cause notice has been set aside, the Appellant is entitled to avail the Cenvat Credit. Advertising and Event Management Services - Credit denied on the ground that there is no evidence to establish a nexus between the input and output service and that the amount incurred was reimbursed to the Appellant - HELD THAT:- The Appellant is, therefore, clearly entitled to avail the benefit of Cenvat Credit following earlier decision. Manpower Recruitment Service, Test Inspection Certification Service, Architect Service, Insurance Service and other Repair Maintenance Services - HELD THAT:- Appellant entitled to credit following earlier decoision. Valuation - Inclusion of the value of spare parts in assessable value - HELD THAT:- When spare parts are sold while providing Authorised Service Station Service , a sale tax place and VAT is charged by the Appellant. The Department, therefore, cannot levy service tax on the value of the spare parts. This is also clear from the Circular dated 23 August 2007 issued by the Department - demand set aside. Levy of service tax - amount received under warranty claims - HELD THAT:- In view of the Circular dated 23 August 2007, the service can be classified under Authorised Service Station Service but not under Business Auxiliary Service - leviability of service tax on this head, therefore, has to be set aside. Levy of service tax - commission received from banks - HELD THAT:- A demand cannot be confirmed under a category different from that proposed in the show cause notice - demand set aside. Imposition of interest and penalty - HELD THAT:- The issues on which demand is set aside, the penalty is also set aside. Appeal allowed in part.

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• 2019 (10) TMI 586
  Classification of services - Cargo Handling Services or not - loading/unloading for shifting by Tippers to short distances within the mines - HELD THAT:- The conclusions of the Ld. Commissioner (Appeals) that under the contract the Appellant is to transport coal by Tipper for short distances within the mines including loading, hence, it is taxable under Cargo Handling Service , cannot be countenanced. Under Section 65(105)(zzp) read with Sec. 65(50a) and Sec. 65(50b) of the Finance Act, 1994, the requirement of provisioning of taxable service to any person by a Goods Transport Agency in relation to transport of goods by road in a goods carriage stands satisfied in this case and transport for long or short distances is not the relevant criterion for classification under the category of Goods Transport Services. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 583
  Imposition of penalties u/s 77 and 78 of FA - Renting of immovable Property Service - appellant had collected rents and advances but had not discharged service tax except in respect of one shopping complex - extended period of limitation - HELD THAT:- In view of the fact that the penalties were imposed under mandatory provision by the lower authorities and they had no choice but to impose the same, there are no infirmity in the order. Further, during the relevant period, Section 80 of the Finance Act, 1994 which provided for waiver of penalties in case of reasonable cause for failure to comply with the provisions, does not apply. Appeal dismissed - decided against appellant.

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• Central Excise

• 2019 (10) TMI 585
  Refund of accumulated CENVAT Credit - Credit lying unutilized due to closure of the factory - Rule 5 of the Cenvat Credit Rules, 2002 - HELD THAT:- Subsequent to passing of order in original and impugned order, law on the issue involved in the present case has evolved and various judgments were passed on the said issue as cited by the Ld. Counsel. Matter remanded to the Adjudicating Authority for passing a fresh order - appeal allowed by way of remand.

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• 2019 (10) TMI 584
  Refund claim - duty paid for its export of goods to Bhutan - refund rejected on the ground that exports to Bhutan are specifically governed by Notification No. 45/2001 which required exports to be made only on payment of appropriate Excise Duty - HELD THAT:- I find from the Order-in-Original as well as the impugned Order-in-Appeal that the Revenue has nowhere disputed this aspect, i.e., the appellant did make the export after paying the appropriate Excise Duty and it was this duty which was claimed as refund under Rule 18 ibid. It is very clear from the above that a refund would include rebate as well, the claim for which has to be only under Section 11B. In the case on hand, there is no dispute on these aspects. However, the dispute is on the applicability of N/N. 45/2001 and the non-following of the procedure by the appellant. The appellant is entitled to the refund as claimed and the rejection of the same is not in order - Appeal allowed.

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• 2019 (10) TMI 582
  CENVAT Credit - manufacture of vaccines which is nil rated for central excise duty - allegation that appellant is not maintaining separate statutory record for Cenvat credit which have been availed on manufactured and exempted goods - HELD THAT:- Its matter of record that manufacturing and clearance of vaccine has been shown by the appellant in their own statutory records for the relevant period including in VAT records. As the appellant is professionally managed manufacturing plant and it is beyond our comprehension that the goods manufactured by some other plant which is a separate legal entity will find a place in the records of the appellant s statutory books or stock records - These evidences cannot be rejected lightly and the Department has rightly raised the issue of mis-utilization of the Cenvat credit. The appellant have failed to adduce any evidence to prove that M/s Panheber/Panera Biotec Pvt. Ltd. had any independent manufacturing facility within the appellant s own premises - there are no fault in the Department s conclusion that it is the appellant who had manufactured the vaccine in the name of M/s Panheber/Panera Biotec Pvt. Ltd. - appeal dismissed - decided against appellant.

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• 2019 (10) TMI 581
  CENVAT Credit - input services - Goods Transport Agency (GTA) service - Maintenance Repair of Immovable Property service - Renting of Immovable Property service - Department has entertained a view that the credit taken by the assessee on these input services either has not been used in providing output service or these cannot be input services for the output services provided by the appellant - HELD THAT:- It has been made very clear that the Cenvat Credit Rules are applicable only to manufacture of excisable goods or the provider of the taxable output service. It has further been clarified from the provision of Rule 68(2) that the person providing GTA service is neither the provider of the output service nor the manufacturer of final product as required under Cenvat Credit Rules, 2004. It has further been clarified that the recipient of the taxable services, even if, they discharge their service tax liability under Rule 68(2) are not entitled to avail the credit of service tax paid on taxable services received by the them as per Cenvat Credit Rules, 2004. From the above clarification there remain no doubt that credit on input services in respect of GTA services are not admissible even for the period prior to 19.04.2006. So no credit of input service is admissible for payment of service tax in respect of output service of GTA provided by the assessee. In respect of other input services - HELD THAT:- The services for the input service credit has been availed by the assessee have actually not gone into providing any output service of Maintenance Repair of the building or for service of Renting the property - The show cause notice as well as order-in-original mentioned that the services, which have been claimed by the assessee to have been used as input service for Maintenance Repair of Immovable Property and Renting of property have actually being used by them for construction of building on SEZ and some residential flats and therefore same cannot be input services for their registered output services. Appeal dismissed.

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• 2019 (10) TMI 580
  Transfer of CENVAT credit - de-bonding of 100% EOU and conversion to DTA unit - whether CENVAT Credit lying in balance in the books of account of 100% EOU as on the date of debonding, could be transferred to the DTA unit? - HELD THAT:- The issue has been considered by this Tribunal in series of judgments viz. TECHNOCRAFT INDUSTRIES (INDIA) LTD VERSUS COMMISSIONER OF CENTRAL EXCISE THANE I [ 2018 (12) TMI 8 - CESTAT MUMBAI] , TECUMSEH PRODUCTS INDIA P. LTD. VERSUS C.C.,C.E. S.T., HYDERABAD-IV [ 2015 (9) TMI 1487 - CESTAT BANGALORE] , M/S JOHN DEERE INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [ 2015 (10) TMI 844 - CESTAT MUMBAI] and COMMISSIONER OF CENTRAL EXCISE THANE - 1 VERSUS SEQUENT SCIENTIFIC LIMITED [ 2018 (4) TMI 590 - CESTAT MUMBAI] - It has been consistently held by the Tribunal in all these cases that the CENVAT Credit lying in balance as on the date of de-bonding of 100% EOU and conversion to DTA unit, could be transferred to the DTA unit and be utilised by the said unit. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 579
  Transfer of CENVAT Credit lying un-utilized in their Account of Manakapur unit - shifting of Unit from Manakapur falling under Belgaum Division to Hubballi Division - requirement of prior permission under Rule 10 of CCR, 2004 - HELD THAT:- As per Rule 16 of the Chewing Tobacco Rules, it is provided that CENVAT credit can be availed and utilized by the manufacturer and there is no mention of a unit in the said Rules as against the specific mention of unit in CCR - Further, the scheme contemplated under Chewing Tobacco Rules is self-contained and there is no bar under the said Rules to transfer the credit from one unit of the manufacturer to the other unit. Further, though, the permission was granted by the ACCE after examination of the entire records and the documents under Rule 10 of CCR but in fact, the said permission under Rule 10 is not required and the appellant is entitled to transfer the said credit from one unit to another unit under intimation to the Department. In view of the COMMISSIONER OF CUSTOMS VERSUS M/S HEWLETT PACKARD INDIA SALES LTD [ 2011 (8) TMI 666 - KARNATAKA HIGH COURT] , wherein it has been held by the Tribunal that prior permission under Rule 10 is not required for transferring the credit - Moreover, in the present case, the permission was validly given by the ACCE, Hubballi after examination of the entire records vide their letter dated 27.01.2016 and thereafter, the appellant has taken the credit to their Hubbali unit and utilized the same for payment of Central Excise duty for the same month. Therefore, by subsequent letter dated 03.02.2016, the Department cannot withdraw the permission granted earlier. If, at all, the Department wants to withdraw the permission, it cannot be done with retrospective effect in view of the decision relied upon by the appellant. Appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 578
  CENVAT Credit - imposition of penalties - diversion of goods - non-receipt of inputs - scope of SCN - HELD THAT:- There is no allegation in the SCN that the goods in question have not been received by appellant No.1 from appellant No.2. In the SCN the only issue is that the goods in question cannot be the inputs to manufacture final products by the appellant No.1. To ascertain such fact, no visit was made by the Revenue in the factory premises of the appellant No.1. No process of manufacturing has been brought on record. Moreover, no evidence has been produced by the Revenue that the said goods have not been diverted to be used by the appellant-manufacturer to manufacture final products, therefore, the allegation made against the appellant is only on the basis of assumptions and presumptions. The Revenue has not come with any evidence to show that the said inputs cannot be used by the appellant-manufacturer to manufacture their final products. No expert opinion has been obtained by the Revenue. No statement of transporter has been recorded to allege diversion of the goods. Therefore, the credit cannot be denied. In the impugned order, the adjudicating authority has alleged that there is diversion of goods and non receipt of goods by the appellant- manufacturer. As there is no such allegation in the show cause notice to allege that the goods were never received by the appellant-manufacturer and supplied by the dealer, in that circumstance, the adjudicating authority has gone beyond the scope of show cause notice. Such findings of the adjudicating authority are not sustainable in the eye of law. Credit cannot be denied - penalty also not imposable - appeal allowed - decided in favor of appellant.

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• 2019 (10) TMI 577
  Reversal of Cenvat credit - activity of refilling/relabeling of ink containers - Process not amounting to manufacture - appellant imported ink in bulk and procured the container form third parties in open market. The ink was procured and refilled in these containers and labelled and cleared as such - extended period of limitation - HELD THAT:- No demand has been raised for printing ink reservoir with sump chip in computation of demand. The imported ink container, the appellant has availed credit of CVD paid by them on the premise that the activity of refilling/relabeling. As per Chapter Note 7 to Chapter 32, the activity undertaken by the appellant does not amount to manufacture. Therefore, the appellant is not entitled to avail credit of CVD paid by them at time of import. Hon ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [ 2012 (7) TMI 141 - BOMBAY HIGH COURT] , by upholding the finding of this Tribunal that if the activity does not amount to manufacture and the goods have been cleared on payment of duty, in such case, the duty paid by the assessee which has been accepted by the department and more than the credit availed. In that circumstance, the duty paid by the assessee shall amount to reversal of credit and the assessee is not required to reverse the credit. Admittedly in this case, the appellant cleared the said imported goods after refilling on payment of duty. Therefore, if the activity does not amount to manufacture, in that case, the duty paid by the appellant shall amount to reversal of credit. Therefore, the appellant is not required to reverse the credit of CVD availed by the appellant at the time of import - Demand set aside - penalty also set aside. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (10) TMI 576
  Whether in absence of any inquiry made by the revenue authorities and in absence of any evidence to doubt the explanation furnished by the assessee, its claim of return of the goods could have been rejected merely on surmises and conjectures? HELD THAT:- In the facts of the present case, once the assessee set up a specific plea of having never received the goods in its stock and having returned the same from its factory premises, it was for the revenue authorities to have made proper inquiries from the selling dealer and from such other source as they may have been advised, to verify the correctness of the claim set up by the assessee. In absence of any inquiry being made and in absence of any evidence having placed on record, as may establish that the assessee had actually received those goods or dealt with the same, the suspicion that had arisen initially could not transform or lead to an adverse finding against the assessee. It is not for the revenue authorities to reach a conclusion as to existence of tax liability by speculating the manner in which a trader ought to have conducted himself. Such speculations may only give rise to suspicions but not to findings as to existence of a tax liability - For that finding to arise, there must be found existing evidence on record including that emerging from inquiry made from relevant sources. In this case there is no evidence of the taxable event having taken place. Petition allowed - answered in the negative i.e. in favor of the assessee and against the revenue.

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• 2019 (10) TMI 575
  Auction of immovable property - dispute of VAT Authorities of unpaid dues - HELD THAT:- As is well settled in law, no such sale, even if through public auction, would abridge or in any manner terminate the existing lease. If, therefore, the HPCL claims to be a lesseee of the original owner, the auction purchaser, it would prima facie appear, only receive title to the land subject to any subsisting impediment thereon. In any case, it is not necessary for us to make a final declaration in this respect, since the HPCL has not received any eviction notice either from respondent Nos.2 and 3 or respondent No.5 -successful bidder. If in future, HPCL receives any notice or any attempt is made on the part of any of the respondents to seek eviction of HPCL from the leased land, it would be open for HPCL to resist the same, as may be permissible in law. Petition disposed off.

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• Indian Laws

• 2019 (10) TMI 574
  Dishonor of cheque - repayment of loan not made - present petition has been filed on the ground that the petitioner and respondent no.2/complainant has settled their disputes and pursuant to the settlement, the petitioner has paid an amount of Rs.3 lacs which has been accepted by respondent no.2/complainant without any protest - HELD THAT:- Keeping in view the settlement arrived at between the parties and the poor financial condition of the petitioner, I hereby allow the present petition. As per the guidelines enshrined in decision rendered in DAMODAR S. PRABHU VERSUS SAYED BABALAL H. [ 2010 (5) TMI 380 - SUPREME COURT] , the petitioners are required to pay 10% of the cheque amount to be deposited as a condition for compounding with the Delhi Legal Services Authority, Patiala House Courts Complex, New Delhi.

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