TMI Tax Updates - e-Newsletter
October 23, 2017

Case Laws in this Newsletter:

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

TMI SMS

• Supply of goods shall be treated as deemed export under GST e.g. supplies against Advance Authorisation, to EOU, under EPCG scheme etc.

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Articles

1. INSOLVENCY AND BANKRUPTCY CODE, 2016 -A CRITICAL ANALYSIS

   By: CA.VINOD CHAURASIA

2. CBEC ISSUED 41 NOTIFICATIONS IN A DAY TO GIVE EFFECT TO GST COUNCIL DECISIONS IN 22ND MEET

   By: CA.VINOD CHAURASIA

News

1. Sovereign Gold Bond Scheme 2017 -18– Issue Price for the next subscription period i.e. October 23-25, 2017 would be ₹ 2,971– per gram with Settlement on October 30, 2017.

2. Ministry of Corporate Affairs issues Notification for commencement of Section 247 of the Companies Act, 2013 relating to Valuation by Registered Valuers

3. Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

4. Comments and Suggestions Invited for Amendment of Income-tax Rules wrt Registration of Charitable or Religious Trusts

5. RBI Reference Rate for US $

6. CIPAM-DIPP Launches Logo and Tagline Contest for Geographical Indications of India

7. DIPP eases mechanism for processing FDI proposals

8. CBEC to Redistribute Cases in Jurisdictions to Reduce Pendency of Cases With Commissioners (Appeal)

Notifications

Companies Law

1. F. No. 1/27/2013-CL-V - dated 18-10-2017 - Co. Law

Commencement of section 247 of Companies Act 2017

2. F. No. 1/27/2013-CL-V - dated 18-10-2017 - Co. Law

Companies (Registered Valuers and Valuation) Rules, 2017

Customs

3. 96/2017 - dated 18-10-2017 - Cus (NT)

Exchange Rates Notification No.96/2017-Custom(NT) dated 18.10.2017

GST

4. 49/2017 - dated 18-10-2017 - CGST

Evidences required to be produced by the supplier of deemed export supplies for claiming refund under rule 89(2)(g) of the CGST rules, 2017

5. 48/2017 - dated 18-10-2017 - CGST

Notified supplies, when the supply of goods shall be treated as deemed export under GST e.g. supplies against Advance Authorisation, to EOU, under EPCG scheme etc

6. 47/2017 - dated 18-10-2017 - CGST

Central Goods and Services Tax (Tenth Amendment) Rules, 2017

7. 39/2017 - dated 18-10-2017 - CGST Rate

Reduced rate of GST on Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government.

8. 40/2017 - dated 18-10-2017 - IGST Rate

Reduced rate of IGST on Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government.

9. 39/2017 - dated 18-10-2017 - UTGST Rate

Reduced rate of UTGST on Food preparations put up in unit containers and intended for free distribution to economically weaker sections of the society under a programme duly approved by the Central Government or any State Government.

GST - States

10. S.O. 243. - dated 13-10-2017 - Bihar SGST

Amendments in the Notification No. S.O.-105 dated the 29th June, 2017.

11. S.O. 241. - dated 13-10-2017 - Bihar SGST

The Bihar Goods and Services Tax (Seventh Amendment) Rules, 2017

12. S.O. 239. - dated 13-10-2017 - Bihar SGST

Extends the time limit for FORM GST ITC-01 input tax credit.

13. S.O. 237. - dated 13-10-2017 - Bihar SGST

Extends the time limit for furnishing the return by a composition supplier.

14. S.O. 235. - dated 13-10-2017 - Bihar SGST

Aggregate turnover in the preceding financial year did not exceed one crore and fifty lakh rupees and who did not opt for the composition levy.

15. S.O. 233. - dated 13-10-2017 - Bihar SGST

Specifies that the officers appointed.

16. S.O. 231. - dated 13-10-2017 - Bihar SGST

Amendments in the Notification No. S.O. No. 179, dated the 21st September, 2017

17. S.O. 227.-38/2017-State Tax (Rate) - dated 13-10-2017 - Bihar SGST

Amendment in the Notification Commercial Taxes Department No. 8/2017- State Tax (Rate), dated 29th June, 2017

18. S.O. 209. - dated 10-10-2017 - Bihar SGST

Last Date for filing of return in FORM GSTR-3B

19. S.O. 207. - dated 10-10-2017 - Bihar SGST

RCM Provision for Advocate modified Notification No. 13/2017- State Tax (Rate), dated 29th June, 2017,

20. S.O. 205. - dated 10-10-2017 - Bihar SGST

The Bihar Goods and Services Tax (Sixth Amendment) Rules, 2017.

21. S.O. 203. - dated 10-10-2017 - Bihar SGST

supercession of Notification No. S.O. -167 dated the 21st September, 2017 - Economic Zone developer or Special Economic Zone unit without payment of integra.

22. F-10-77/2017/CT/V (133)-36/2017-State Tax - dated 4-10-2017 - Chhattisgarh SGST

The Chhattisgarh Goods and Services Tax (Seventh Amendment) Rules, 2017.

23. F-10-73/2017/CT/V (125)-34/2017-State Tax - dated 15-9-2017 - Chhattisgarh SGST

The Chhattisgarh Goods and Services Tax (Sixth Amendment) Rules, 2017.

Money Laundering

24. 6/2017 - dated 16-10-2017 - PMLA

Prevention of Money-laundering (Maintenance of Records) Fifth Amendment Rules, 2017

Circulars / Instructions / Orders

Service Tax

1. 208/6/2017 - Service Tax - dated 17-10-2017

Reassignment of cases pending as on 30-6-2017 with the Commissioner of Central Excise and Service Tax (Appeals)

GST

2. 09/9/2017 - dated 18-10-2017

Authorized officer for enrollment of Goods and Services Tax Practitioner

3. 10/10/2017 - dated 18-10-2017

Clarification on movement of goods on approval basis

DGFT

4. 32/2015-2020 - dated 18-10-2017

Amendments in Chapter-4 of Hand Book of Procedures 2015-2020, related to clubbing of Advance Authorisations, extension of Export Obligation period and regularisation of bonafide default in the cases where Authorisations were issued for import of drugs from unregistered sources with pre import condition- reg

Highlights / Catch Notes

GST

• Tenth Amendment to CGST Rules 2017: Key Updates and Clarifications for Streamlined Tax Compliance and Effective Implementation.

  Notifications : Central Goods and Services Tax (Tenth Amendment) Rules, 2017 - Notification
  Visit to Get Source

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• Authority Ordered to Assist Petitioner in Completing GST Migration Due to Password Issue.

  Case-Laws - HC : Since the password has not been issued to the petitioner the petitioner is unable to complete the process of migration to GST - concerned authority directed to allow the petitioner to complete migration to GST - HC
  Visit to Get Source

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• High Court Orders Review of 2% VAT Application on Pre-July 2017 Works Contracts, Not GST.

  Case-Laws - HC : Levy of VAT or GST - case of petitioner is that the works contract for which the agreements were executed prior to 01.07.2017, GST cannot be imposed and 2% VAT alone is applicable - Commissioner directed to consider the representation - HC
  Visit to Get Source

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• GST Deemed Exports: Supplies for Advance Authorisation, EOUs, and EPCG Scheme Get Benefits and Exemptions.

  Notifications : Notified supplies, when the supply of goods shall be treated as deemed export under GST e.g. supplies against Advance Authorisation, to EOU, under EPCG scheme etc.
  Visit to Get Source

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Corporate Law

• Section 247 of Companies Act 2017 Activated, Impacting Corporate Governance and Compliance Requirements for Companies and Legal Professionals.

  Notifications : Commencement of section 247 of Companies Act 2017 - Notification
  Visit to Get Source

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• India's 2017 Valuation Rules: Ensuring Integrity, Consistency, and Professionalism for Registered Valuers in Asset Valuation Practices.

  Notifications : Companies (Registered Valuers and Valuation) Rules, 2017 - Notification
  Visit to Get Source

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Indian Laws

• Section 247 of Companies Act, 2013 Enforced: Valuations by Registered Valuers to Boost Transparency in Corporate Governance.

  News : Ministry of Corporate Affairs issues Notification for commencement of Section 247 of the Companies Act, 2013 relating to Valuation by Registered Valuers
  Visit to Get Source

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• Indian Government Invites Public Feedback on Proposed Amendments to Income-tax Rules for Charitable Trusts Registration.

  News : Comments and Suggestions Invited for Amendment of Income-tax Rules wrt Registration of Charitable or Religious Trusts
  Visit to Get Source

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Service Tax

• Cases with Central Excise and Service Tax Appeals from June 30, 2017, face reassignment for streamlined processing.

  Circulars : Reassignment of cases pending as on 30-6-2017 with the Commissioner of Central Excise and Service Tax (Appeals) - Circular
  Visit to Get Source

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Case Laws:

• GST

• 2017 (10) TMI 784
  Issuance of Password corresponding to the new provisional ID issued to the petitioner - case of petitioner is that Since the password has not been issued to the petitioner the petitioner is unable to complete the process of migration so as provided under Section 139 of GST Act read with Rule 24(1) of the CGST Rules, 2017 - Held that: - On inquiry made by the petitioner the petitioner has been informed on the GST Portal that the petitioner will not be allowed to deposit its tax and further to file the returns unless the late filing penalty and interest are also to be deposited. The contention of the petitioner is that there is no fault of the petitioner but on account of laches at the hands of the competent authority the petitioner company may suffer adverse financial consequences which may be arbitrary. The concerned respondent authority is directed to immediately issue a password to the petitioner company for completing migration process on the GST Portal for upload its returns and to deposit the due tax. It is further directed that the concerned respondent authority will allow the petitioner to complete migration to GST upon the receipt of such password as such issued to the petitioner company, in accordance with law. Petition allowed - decided in favor of petitioner.

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• 2017 (10) TMI 783
  Works contract - levy of VAT or GST - case of petitioner is that the contract works for which the agreements were executed prior to 01.07.2017, GST cannot be imposed and 2% VAT alone is applicable - Held that: - there will be a direction to the Commissioner of Commercial Taxes to consider the representation given by the petitioner/ association and pass orders on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order - petition allowed by way of remand.

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• Income Tax

• 2017 (10) TMI 782
  Addition u/s 50C - Held that:- As perused the ingredients of Sec.55 of the Stamp (Amendment) Act, 2011 which clearly exempt the leasehold property from valuation under the stamp duty (Supra) and even otherwise the judgment passed by the Hon’ble Mumbai High Court is guiding factor for coming to the right conclusion, therefore, we do not have any hesitation to hold that the plots under disputes were exempted from Stamp duty according to section 55 of the Stamp Act (supra) because the leasehold property does not fall within the dimension of the land and building. Hence, on the aforesaid analyzation, the addition u/s 50C of the I.T. Act stands deleted. Deemed dividend addition u/s 2(22)(e) - Held that:- It is undisputed fact that for purchase of the land/plot, the earnest money to the tune of Rs. 10 Lakhs was deposited with the authority of the J & K State, however, due to non-maturity of the sale, the earnest money was refunded to the assessee and the same money was returned back to the Sat Agrotech Overseas Pvt. Ltd., hence, in our considered view, the assessee has not earned any dividend, therefore, the same cannot fall under the provisions of Sec.2(22(e) as deemed dividend. Hence, we do not have any hesitation to delete the said addition as added on account of deemed dividend. No hesitation to delete the said addition as added on account of deemed dividend.

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• 2017 (10) TMI 781
  N.P. determination - Held that:- In view of the order of the Coordinate Bench in assessee’s own case for the Assessment Year 2008-09, wherein the net profit was estimated at 6% before depreciation, we are of the view that the estimation made by the Ld.CIT(A) @12.5% appears to be reasonable and the Learned Counsel for the assessee also submitted that the percentage adopted by the Ld.CIT(A) at 12.5% be sustained though the addition would result in less than the 12.5% if net profit is adopted at 6%, if followed the order of the Coordinate Bench in assessee’s own case.

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• 2017 (10) TMI 780
  Undisclosed income - addition on the basis of statement recorded at the time of survey - suo moto surrender - Held that:- From perusal of the record, it is clearly transpires that while filing an application dated 27.12.2008, the appellant has stated before the Assistant Director of Income Tax (Investigation) that he was forced to surrender the said amount at the time of survey, whereas there is no evidence or material furnished by the assessee to support the said contention and in fact the assessee himself has surrendered the amount as his undisclosed commission income of Rs. 5,00,000/- in assessment year 2006-07 and Rs. 7,00,000/- in assessment year 2007-08. Admittedly, the assessing authority has allowed enough opportunity to the assessee starting immediately from the date of survey till the assessment order dated 29.12.2008 is passed but the appellant for the first time stated that he has been forced to surrender the said amount only a day before the assessment proceedings are completed and the assessment order has been passed i.e. 27.12.2008. It is clearly an admission on the part of the appellant to surrender the amount of Rs. 5,00,000/- as an admitted commission which itself is an important piece of evidence, therefore, statement made voluntarily by the assessee could well affirm the basis of assessment which in the instant case is done. It is well settled law that burden lays on the assessee to establish that the admission made at the time of survey by means of a statement was wrong and, in fact, there was no additional income. In the present case, this burden does not even seem to have been admitted to be discharged by the assessee.

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• 2017 (10) TMI 779
  Qualification for deduction under Section 80IA - infrastructure facility transferred to another enterprise for the purpose of operating and maintaining such facility - whether once the assessee had transferred the infrastructure facility for maintenance and operation, the assessee could not claim any deduction under sub-section (4)? - Held that:- By virtue of the operation of the proviso, the developer would not be deprived of the benefit of deduction under sub-section (1) of Section 80IA on the profit earned by it from its activity of developing the infrastructure facility. The proviso does not operate as to depriving the developer of the benefit of the deduction even after the facility is transferred for the purpose of maintenance and operation but would split the profit element into one derived from the development of the infrastructure and that derived from the activity of maintenance and operation thereof. The assessee having transferred the facility for the limited purpose of maintenance and operation to RTIL, would receive a fixed payment of Rs. 328 lakhs per annum irrespective of the toll collection by RTIL. This profit element therefore would be relatable to the infrastructure development activity of the assessee and would qualify for deduction under Section 80IA of the Act. The RTIL would have a claim or deduction on its profit arising out of maintenance and operation of infrastructure facility which apparently would exclude the pay out of Rs. 328 lakhs to the assessee. Learned counsel for the Revenue submitted that this last element is, however, not clearly emerging from the record. Firstly, no such case is made out by the Revenue before the Tribunal. Secondly, if at all, the RTIL has claimed deduction on an amount larger than what it was entitled to, it would be a claim which should be disallowed in the hands of the RTIL and not in the hands of the present assessee.

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• 2017 (10) TMI 778
  Disallowance of claim for deduction in respect of non-performing assets from its income for the assessment year 2005-06 - main reason for disallowance made by AO was that the assessee’s application for registration as an NBFC was rejected by the RBI - Held that:- This question stands answered against the assessee by the Hon’ble Supreme Court in the case of Southern Technologies Limited Vs. Joint Commissioner of Income Tax reported in (2010 (1) TMI 5 - SUPREME COURT OF INDIA) as held the RBI Directions, 1998, though deviate from accounting practice as provided in the Companies Act, do not override the provisions of the Income-tax Act. Some companies, for example, treat write offs or expenses or liabilities as contingent liabilities. The point which we would like to make is whether such losses are contingent or actual cannot be decided only on the basis of presentation. Such presentation will not bind the authority under the Income-tax Act. Ultimately, the nature of transaction has to be examined. In each case, the authority has to examine the nature of expense/loss. Such examination and finding thereon will not depend upon presentation of expense/loss in the financial statements of the NBFC in terms of the 1998 Directions. Therefore, in our view, the RBI Directions 1998 and the Income-tax Act operate in different fields. - Decided in favour of the Revenue

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• 2017 (10) TMI 777
  Disallowance of transfer fees and brokerage expenses while computing long term capital gains on sale of said residential flat - Held that:- The explanation offered by the assessee that he was not informed by his AR about requirement of furnishing these documents before the AO and hence he did not furnish said evidences at the assessment stage is an plausible explanation which cannot be rejected at threshold to be not a reasonable or bonafide reasonable explanation more-so on perusal of invoices for both these expenses which are placed in paper book/page 72-74 the payments were made by the assessee through cheque/banking channel. The powers of learned CIT(A) is co-terminus with the powers of the AO and while deciding the appeal the learned CIT(A) should have caused enquiry of its own or directed AO to make an enquiry to verify bonafide and genuineness of the claim of the assessee instead of rejecting the claim of the assessee at threshold . We are of the considered view and direct that these additional evidences be and are hereby admitted in the interest of justice and matter be restored to the file of the AO for necessary verification / enquiry with respect to these additional evidences as to the bonafide and genuineness of the assessee’s claim on merits to be conducted by the AO and issue be decided on merits by the AO in denovo proceedings in accordance with law. Denied deduction to the assessee u/s. 54 - assessee has not purchased the residential flat within two years from the date of transfer /sale of residential flat on 17-02-2009 - Held that:- The allotment of flat by the Builder under self financing scheme has to treated as construction and period of three years window will be available for availing deduction u/s 54. The assessee has invested Rs. 26 lacs in new residential flat at ‘H’wing on 03-03-2011 i.e. within three years from the date of sale/transfer of flat on 17-02-2009 wherein substantial cost of the said flat was paid by the assessee as total cost was Rs. 32.76 lacs . The Builder later issued fresh letter of allotment on 15-10-2011 wherein the builder treated Rs. 26 lacs as part consideration towards said residential flat at ‘H’ Wing , which is again within three years from the date of sale of flat at Sahayadri Apartments by the assessee on 17-02-2009 on which income from long term capital gain arose. The assessee also paid through the builder service tax on the said payment of Rs. 26 lacs to the government which is duly acknowledged by the Builder. The Revenue also made direct enquiry with the builder and it could not be shown that these transactions are not genuine or are colourable device adopted by the assessee in collusion with the Builder to defraud revenue. The assessee has also brought on record government approvals for construction of ‘H’Wing on the plot developed by Builder. The assessee, thus got right, title and interest in the said flat within three years from the sale of flat on which the long term capital gain arose and the assessee will be entitled for deduction u/s 54. - Decided in favour of assessee.

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• 2017 (10) TMI 776
  Addition on account of cash deposited in the bank - assessee has not explained the source of the information, banks do not open & accept huge deposits without proper check on the identity of the person - CIT-A allowed the claim - Held that:- The saving account neither belong to assessee nor opened by the assessee. The CIT(A) has categorically recorded a finding to the effect that the cash so deposited belonging to M/s. Gem Corporation and during the assessment of Gem Corporation, it was added in the income of Gem Corporation. As the amount so deposited had already been brought to tax in the hands of Gem Corporation, making addition of the same amount in assessee’s hands amounts to double addition. The detailed finding so recorded by CIT(A) at para 4 has not been controverted by learned DR by bringing any positive material on record. Accordingly, I do not find any reason to interfere in the order of CIT(A). - Decided against revenue

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• 2017 (10) TMI 775
  Disallowance of commission paid by assessee in the course of the business of trading in chemical gases used in the Pharma and Industrial sectors - allowable business expenditure - Held that:- As during the year ended 31st March, 2010, relevant to A.Y. 2010-11, one Mr. Ketan Panchal introduced M/s. DNA Entertainment Pvt. Ltd. for sale of various gas cylinders and accordingly, the assessee had sold gas cylinders aggregating to Rs. 2,68,606/-. As this was a new customer, the assessee paid commission of Rs. 27,778/- to Mr. Ketan Panchal. In respect of payment of commission to Mr. Sandeep Sonar, I found that Mr. Sandeep Sonar had introduced himself to the assessee as a Sales Representative for procuring orders for sale of gas cylinders from the existing customers as well as from the new customers. In this endeavour, he brought business of selling gas cylinders to one M/s. Exe! Gas & Equipments Pvt. Ltd. for supply of gas cylinders of Rs. 1,25,000/- and accordingly, the assessee paid commission of Rs. 11,000/- to him from which the assessee deducted TDS of Rs. 1100/- and paid Rs. 9900/- by crossed account-payee cheque. In view of the above find no justification for the disallowance of commission paid by assessee in the normal course of business for the purpose of business. - Decided in favour of assessee For Assessment Year 2012-13 assessee had produced the evidence in the form of name, address, PAN and details of payment of commission by crossed account-payee cheques after deducting TDS to each of the six commission agents. The assessee had also furnished confirmation of accounts of each of these commission agents before the Commissioner (Appeals). The assessee also adduced evidence in the form of e-mails and other details to show that these commission agents rendered services for which the assessee had paid commission to them. I found that out of six agents, three agents namely. Mr. Sandeep More, Mr. R.B. Rahate and Mr. Narayan Hegde, were the commission agents to whom similar commission was paid for the A.Y. 2009-10 and the said commission was allowed by the AO while making scrutiny assessments. To these three commission agents, the assessee paid aggregate commission of Rs. 4,36,757/- out of total commission paid of Rs. 19,57,700/-. Therefore, direct the AO to delete disallowance of commission payment.

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• 2017 (10) TMI 774
  Penalty u/s.271(1)(c) - bogus purchase - Held that:- In the instant case, the revenue has established beyond any reasonable doubt that the assessee was indulged in booking bogus bill of an unworthy supplier to inflate the expenses. The tell-tale evidence in the form of statement of the supplier and confirmation thereof in the cross-examination by assessee coupled with lack of proof towards delivery of purchase and clouded or suspicious banking transactions recorded to this effect leaves us in no manner of doubt that assessee had deliberately and willfully subverted the real source and character of the transactions. While doing so, the assessee also prevented the revenue from knowing the real source of supply and whereabouts of supplier of the alleged goods purchased, if any. In the circumstances, the appellate authorities were left with no option but to estimate the plausible overstatement of expenditure on purchases and thereby understatement of profits. The undeniable fact of bogus purchase entered in the books of accounts and thereby vitiating the taxable income by the assessee was found as a matter of fact after threadbare enquiry. In these circumstances, the ratio of the aforesaid decisions are not applicable at all. As a consequence, we find no merit whatsoever in the appeal of the assessee. Appeal of the Assessee is dismissed.

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• 2017 (10) TMI 773
  Bogus purchase - disallowance at the rate of 25% of the hawala purchase - Held that:- Admittedly, in such type of cases, there is no option but to estimate the profit which depends upon the subjective approach of an individual and the material facts available on record. In the present appeal, the assessee is in the business of civil engineering, engaged in major repairs, maintenance, structural strengthening, water proofing and civil work of residential and office buildings. The assessee declared income of Rs. 60,74,880/- in his return filed on 29/09/2011. On the basis of information from the Maharashtra Sales Tax Department that the assessee made purchases from bogus entry providers, the addition was made. The assessee could not produce the necessary details like delivery of challans, etc.. As per the Revenue, the assessee used the material at different sites, which was procured from the parties, which are involved in bogus transactions. However, fact remains that unless and until the purchase material is used the project cannot be completed. Assessee did not produce the evidence of genuine purchase, therefore, considering the material facts, we have no option but to estimate the profit. It will meet the end of justice and to put an end to the litigation, if the disallowance is restricted to @ 25% of the bogus purchases. - Decided partly in favour of assessee.

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• 2017 (10) TMI 772
  Revision u/s 263 - unexplained bogus purchases - inadequate or no enquiry - Held that:- Assessing Officer has not gone into the aspects, as has been observed in the impugned order and the information received from the investigation wing was not properly investigated. It is also noted that the Ld. Assessing Officer did not make any enquiry with respect to remaining four parties from where the assessee claim to have made bogus purchases amounting to Rs. 2,30,89,345/-. It is also noted that these parties filed an affidavit before the Sales Tax Authorities that they were involved in bogus transactions/bogus sales, without effecting the actual delivery of goods. The assessee also did not produce these parties for examination to the satisfaction of the Assessing Officer. The Ld. Assessing Officer without making any enquiry with respect to these parties simply accepted the claim of the assessee, meaning thereby, the Ld. Assessing Officer mechanically accepted the claim of the assessee without application of mind or due enquiry, therefore, certainly the assessment order is erroneous as well as prejudicial to the interest of Revenue, causing loss to the Revenue. The Ld. Assessing Officer was expected to make detailed enquiry into the matter, which was not done. Totality of facts, clearly indicates that the assessment order has been framed without full enquiries, therefore, the ld. Commissioner justifiably invoked revisional jurisdiction. Commissioner has merely directed the Assessing Officer to make proper enquiries and after affording opportunity to the assessee decide in accordance with law, therefore, principally; the assessee should not feel aggrieved, because, if the assessee is in a position to explain the factual matrix, no grievance will be caused to the assessee. At the same time, the mandate of Article 265 of Constitution of India is to levy and collect due taxes. In view of this factual matrix, we affirm the stand of the ld. Commissioner. - Decided against assessee.

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• 2017 (10) TMI 771
  Bogus purchase - disallowance at the rate of 25% of the hawala purchase - Held that:- In the present appeal, the assessee, before AO as well as before the CIT (Appeal) duly furnished the ledger account, Bank statement of suppliers, item-wise quantitative details. While adjudicating the case of the assessee, the Ld. Commissioner of Income Tax (Appeal) has already analyze the details/factual matrix as is evident from para 8.11 onwards of the impugned orders. AO made the addition of the total amount but the Ld. AO was of the view that the disallowance at the rate of 25% of the hawala purchase will be reasonable, which is more than the suppressed production. The assessee has also not filed any appeal against the impugned order. The assessee duly co-related the sale and purchases by declaring GP @ 9.76% of the purchases. CIT(Appeal) has already restricted the disallowance to 25%, thus, we find no infirmity in his conclusion. The interest of Revenue under the material facts has already been safeguarded, therefore, the stand of the Ld. Commissioner of Income Tax (Appeal) is affirmed. Finally, the appeal of the Revenue is dismissed.

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• 2017 (10) TMI 770
  Estimated additional profit margin at the rate of 12.5% on the alleged tainted purchases - whether the additional estimation @ 12.5% (over and above already declared GP) may be substantially reduced? - Held that:- In the present appeals, the assessee is dealing in soft luggage/bags and has already declared the GP @ 15.82%. Admittedly, there can be no sale without purchases and as canvassed by the Ld. counsel for the assessee even it is admitted that the assessee made purchases from bogus parties still it cannot be ignored that the assessee has already declared the GP @ 15.82%. The Ld. Assessing Officer has further enhanced the addition at the rate of 12.5%, thus, the total GP jumps to 37.87%, which is practically not possible in such type of business. Thus, considering the factual matrix, submissions of the assessee and the material facts, available on record, the additional GP made by the Ld. Commissioner of Income Tax (Appeal) (@ 12.5%) is reduced to 6%, which will safeguard the interest of Revenue. It is worth mentioning that the Ld. counsel of the assessee duly agreed for such reduction. The Ld. Assessing Officer is directed to calculate the disallowance at the rate of 21.82% (15.82% already declared by the assessee plus 6% restricted by us against 12.5% by the Ld. Commissioner of Income Tax (Appeal)). Thus, both the appeals of the assessee are partly allowed.

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• 2017 (10) TMI 769
  Disallowance of interest expenditure u/s 36(1)(iii) - Held that:- Undisputedly, the Assessing Officer has disallowed part of interest cost amounting to Rs. 14,53,423, on the reasoning that assessee has advanced interest free loans to various parties from borrowed funds. However, from the assessment stage itself, the assessee has pleaded that sufficient interest free fund was available with the assessee to advance interest free loans. In fact, the Assessing Officer also to some extent has accepted assessee’s plea by observing that interest free loan of Rs. 74,03,683, was out of interest free funds available with the assessee. It is the claim of the assessee that as on 31st March 2007, the assessee was having interest free funds of Rs. 2,82,13,694, whereas, interest free loans advanced by the assessee stood at Rs. 2,49,75,541. In our considered opinion, the aforesaid contention of the assessee requires verification. In case, the assessee is able to establish the fact that sufficient interest free funds was available to advance interest free loan, no disallowance under section 36(1)(iii) of the Act can be made. In view of the aforesaid, we restore the issue to the file of the Assessing Officer for fresh adjudication in terms with our direction herein above Addition made under section 68 - Held that:- the assessee deserves an opportunity to prove the loan transactions through all the legal means available to it. If the assessee can prove the genuineness of the loan transactions by producing any witness, the assessee must be allowed to do so. As far as the contention of the learned Departmental Representative that learned Commissioner (Appeals) should not have deleted the loan standing in the name of Avtar Singh Sethi, as his creditworthiness was not proved, we must observe, in the remand report the Assessing Officer while examining this particular loan transaction has verified the bank account of the said loan creditor and found that the amount of Rs. 2 crore was advanced to the assessee a deposit of Rs. 1.99 crore was made in the account of the creditor. He has also stated that the assessee filed copy of account of the creditor to indicate that the said amount of Rs. 1.99 crore came from the over draft account. In our view, this fact also requires further verification by the Assessing Officer. In case, it is proved that the loan of Rs. 2 crore originated from Rs. 1.99 crore in the over draft account of the creditors, then, there will be no case for addition of the said amount. However, in our view, further enquiry has to be conducted by the Assessing Officer to establish availability of nexus or otherwise between the two amounts. With the aforesaid observations, we restore the matter back to the file of the Assessing Officer for considering afresh.

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• 2017 (10) TMI 768
  Penalty u/s 271C - TDS has been deducted by assessee under 194J instead of section 194C - short deduction of tds - reasonable cause - Held that:- In our considered view, levy of penalty under section 271C for failure to deduct tax at source is not automatic. In order to bring in application of section 271C in backdrop of overriding non obstante clause in section 273B, absence of reasonable cause, existence of which has to be established is sine qua non. No doubt initial burden is on the assessee to show that there existed reasonable cause to substantiate failure to deduct tax at source. There existed a reasonable cause for not deducting tax at source from payments made to U P Jal Nigam on the mobilisation fees paid (being reimbursement of expenses on actual cost) within meaning of section 273B, and accordingly no penalty under section 271C is exigible. Accordingly grounds raised by assessee on merits stands allowed.

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• Customs

• 2017 (10) TMI 767
  Maintainability of appeal - section 129A of the Customs Act,1962 - power of Commissioner of Customs to reject the application for grant of license - Held that: - The law is well settled. An appeal is always a creation of a statute and unless there is a specific remedy provided in the statute by way of an appeal, a right of appeal is never available to a litigant. The Regulation of 2013 framed under subsection (1) of section 146 is a complete Code in itself which governs the powers of the Licencing Authority to grant or deny a licence under the Regulation which is contemplated by subsection 1 of section 146. In the present case, the Commissioner of Customs acted in his capacity as the Licensing Authority under the said Regulation of 2013 and not as an Adjudicating Authority as contemplated by clause (a) of subsection 1 of section 129A of the said Act. Against the said order of the Commissioner (General), an appeal was not maintainable either under section 129A or under the provisions of the Regulation of 2013. The appeal under the said Regulation of 2013 is available only to a person who has been granted a licence. Appeal dismissed - decided against appellant.

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• 2017 (10) TMI 766
  Refund of excess duty paid - denial on the ground that the same is time-barred and that required documents were not furnished by the appellants - Held that: - the appellants have filed the refund claim on 06.05.2012 whereas originally M/s. BEML filed the refund claim which was rejected by Assistant Commissioner vide his Order-in-Original dated 13.03.2012 on the ground that BEML has neither paid the duty nor borne the duty. After the rejection of refund claim by BEML, M/s. BEML has not filed appeal against the Order-in-Original but appellant has filed the refund claim on 06.05.2012 whereas re-assessment was made on 30.12.2009 which is barred by Section 27 - as per Section 27 of the Customs Act, the time for filing the refund claim has to be strictly followed and the argument of the learned counsel for the appellant saying that it was only a deposit and not the duty is not tenable in law - the time limit as prescribed under Section 27 of the Customs Act is applicable in the present case. Appeal dismissed - decided against appellant.

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• 2017 (10) TMI 765
  Confiscation - Redemption fine - penalty - amusement park equipments like crazy cars, mini disco, roller coaster etc. under EPCG scheme - the goods appeared to be used one - since the Revenue has not produced any evidence which shows that there is a guilty mind on the part of the appellant to import the second hand goods, therefore the imposition of penalty is not warranted in the facts and circumstances of this case, penalty set aside - redemption fine also reduced to Rs. 1 lakh - Appeal allowed in part.

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• 2017 (10) TMI 764
  Penalty on CHA u/s 114(i) and 114 AA of the CA, 1962 - abetting with the exporters to clandestine export of their product - it was alleged that the main appellant herein being a CHA has not verified the antecedent of the exporters who sought to export Ketamine Hydrochloride in the guise of garments but did not notice it was concealed inside the said consignment which was detected after the Customs investigation and based on information - Held that: - when the adjudicating authority himself has abandoned the allegations in the show-cause notice for the violation of the Customs Act 1962, there being absence of evidence which indicate that appellant had a role, which is tantamounts to abettment in export of goods which are liable for confiscation, penalties imposed on these appellants are liable to be set aside - similar issue decided in the case of Sarosh Nagarwala, Skylark Travels Pvt Ltd, Flavian Walter D’Souza Versus Commissioner of Customs (Export) [2017 (1) TMI 405 - CESTAT MUMBAI], where it was held that provisions of Customs Act cannot be applied for in case of there being no finding as to the role attributable to appellants - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 763
  100% EOU - Violation of import conditions - obsolete goods - Held that: - the concerned officials of the appellant themselves have admitted that goods had become obsolete and the same had not been put to use. Further there was no evidence put up on record that when the goods were usable and had operational life, they were installed and put to use by the appellant - demand of duty upheld. The impugned order confiscating the goods listed in Annexure A&B of the show-cause notice and in lieu of confiscation, imposing redemption fine of Rs. 20 lakhs is not sustainable. Therefore, though the demand of duty confirmed for the goods, there are no further reason to order confiscation for these goods and when there is no confiscation warranted, there cannot be any question of imposing any redemption fine. Consequently, the redemption fines imposed are set aside. Appeal allowed in part.

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• 2017 (10) TMI 762
  Penalty u/s 112(a) of Customs Act, 1962 - cross examination sought for by appellant, which was not provided - Principles of Natural Justice - Held that: - appellants have not received hearing notice of the said dates - principle of natural justice was not adhered to by the adjudicating authority - the adjudicating authority to allow cross examination of the witnesses - appeal allowed by way of remand.

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• 2017 (10) TMI 761
  100% EOU - N/N. 52/03-cus dated 31-3-2003 - non-fulfillment of conditions relating to clearance under STPI scheme - Held that: - there was no malafide intention on the part of the appellant to violate any condition of licence provisions. Initially truck was supposed to be cleared under Notification no.52/03. When the appellant was unable to fulfill the condition they immediately paid the customs duty and cleared the goods, the conduct of the appellant is clearly bonefide. The goods were rightly confiscated but the appellant deserve some leniency in view of the conduct of the appellant and in absence of any malafide intention, therefore redemption fine reduced from Rs. 15 Lacs to Rs. 5 Lacs and penalty is reduced from Rs. 4 lacs to Rs. 1 lacs - appeal allowed in part.

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• 2017 (10) TMI 760
  Import of restricted goods - old and used photocopiers - confiscation - penalty - Held that: - the import of photocopiers had become restricted only after 19.10.2005. Goods imported herein have been done by a Bill of Entry filed on 27.04.2004. This being the case, they cannot be confiscated for want of a specific import licence and accordingly, the provisions of section 111 (d) will not be applicable in this matter. The interests of justice would be adequately served in this case by reducing the redemption fine imposed under section 111 (m) to Rs. 3,00,000/- and penalty imposed u/s 112 (a) ibid to Rs. 2,00,000/- - appeal allowed in part.

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• Corporate Laws

• 2017 (10) TMI 759
  Scheme of Amalgamation - Held that:- There is full compliance of SEBI Circulars dated 4th February, 2013 and 21st May, 2013. Although the Appellants have raised allegation that unaudited/management accounts of the three Companies, upto 31st December, 2013 were not placed before the Tribunal, but we find that all documents required under the law as provided in the Companies Act, 1956 and Clause 24(f) of the Listing Agreement and Circulars of SEBI were placed. Mere allegation made by the ‘minority shareholders’ (Appellants) that the valuation was not properly made will not hold good, till certain illegalities in the matter of valuation are highlighted. The Appellants, having failed to show any such illegality in the valuation made by the Valuer, on mere allegation it cannot be interfered with. From the record, we find that ‘Surplus Assets’ of ‘Trinetra Cement Limited’ have not been valued separately because the Company has to be-treated as ‘going concern’. It was in this premises, the valuation of both Trinetra Cement Limited’ and The India Cements Limited’- the ‘Net Asset Value method was not used. ‘Trinetra Cement Limited’ and ‘The India Cements Limited’, both have power plants, mining leases etc. which are their business assets - adding the market value of business assets of the enterprise value would be grossly erroneous as the very cash flows are generated using those business assets. Reasoning given by the Tribunal is not perverse, we are not inclined to interfere with the impugned order.

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• Insolvency & Bankruptcy

• 2017 (10) TMI 758
  Insolvency resolution process - Held that:- As heard learned Counsel for the 'Financial Creditor' who has taken us through the various paras of the application as already recorded in the preceding paras from the perusal of the record. We are satisfied that the 'Financial Creditor' has proved by overwhelming evidence that default has occurred. Accordingly, the application for initiation of Corporate Insolvency Resolution Process under section 7 is admitted and Mr. Sanjay Gupta, Registration No. IBBI/IPA-001/IP- P00117/2017-18/10252 is appointed as Interim Resolution Professional. In pursuance of Section 13(2) of Code, we direct that public announcement shall be immediately made by the Interim Resolution Professional with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code.

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• 2017 (10) TMI 757
  Corporate Insolvency Resolution Process - Held that:- Application deserves to be admitted and it is accordingly admitted under Section 7(5)(a) of the IB Code. This Adjudicating Authority is hereby appoint Shri Anil Kohli, as ‘Interim Insolvency Resolution Professional’ having address at 1011, Kirti Shikhar, District Centre Janak Puri, New Delhi-110058 and having Registration No. IBBI/IPA-001/IP-POO 112/2017-18/10219 under Section 13 (1)(c) of the Code. The Interim Insolvency Resolution Professional is hereby directed to cause a public announcement of the initiation of ‘Corporate Insolvency Resolution Process’ and call for submission of claims under Section 13(l)(b) read with Section 15 of the Code and Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This Adjudicating Authority hereby order moratorium under Section 13(l)(a) of the IB Code prohibiting the following as referred to in Section 14

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• Service Tax

• 2017 (10) TMI 755
  Classification of services - Port services - activity of transportation of cargo within the port area of Mumbai Port Trust - extended period of limitation - Held that: - It is settled law that there are divergent views on the issue and dispute is resolved by the Larger Bench, no malafide or suppression of facts can be alleged on the assesee. Even on the identical issue the Tribunal has held that it was a case of bonafide doubt for which extended period could not be invoked - the SCN is time barred - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 754
  Refund claim - Rule 5 of CCR - rejection on the ground that services by the respondent was provided in India therefore it cannot be treated as export of service in terms of Export of Services Rules, 2005 - Held that: - The law laid down by the Division Bench of this Court in the case of Commissioner vs. SGS India Private Limited [2014 (5) TMI 105 - BOMBAY HIGH COURT] will squarely apply to the facts of the case, where it was held that if services were rendered to such foreign clients located abroad, then, the act can be termed as `export of service' - appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 753
  CENVAT credit - ISD - appellant-assessees Whitefield unit took cenvat credit of various locations without distribution of such credit by becoming an ISD - Held that: - the entire issue can be decided on the basis of revenue-neutral point itself. It is undisputed that the Head Office of the appellant had availed cenvat credit of the service tax paid on various services rendered at different units of the appellant, as also at the Head Office. It is also undisputed that the service tax liability has been discharged by service recipients and these services are utilized by the appellantsHead Office as well as the other unit in manufacturing of final products on which duty liability is discharged and also for providing taxable output services. This undisputed fact would, go to show that appellant could/can distribute the entire service tax credit as per the provisions of Rule 7 to one unit or of the other units - the issue being of revenue-neutrality, appellant-assessee could have availed the cenvat credit of the service tax paid on various input services without registering the Head Office as ISD - credit allowed - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 752
  Refund claim - time limitation - Rule 5 of CCR, 2004 - rejection of refund on the ground that the claim have been filed beyond the period of one year from the date of issuance of the export invoice - Held that: - the issue is no more res integra and stand settled by Larger Bench decision of the Tribunal in the case of Commissioner of Service Tax, Goa Vs Ratio Pharma India Pvt Ltd. Vs [2015 (4) TMI 462 - CESTAT MUMBAI], where it was held that the relevant date for determining of limitation period is the date of receipt of foreign exchange - in the present case, the refund claims has been filed within a period of one year from the date of receipt of the foreign exchange, refund remains allowed. Whether the appellant is entitled to avail the credit of service tax which was not paid to the service providers within the time-limit of three months from the date of the invoices in terms of provisions of Rule 4 (7) of CCR, 2004? - Held that: - Rule 4(7) of Cenvat Credit Rules provides that if payments are not made within a period of three months, the credit availed by the recipient of the input services is to be paid back. The Tribunal has no powers to relax or extend the said period of three months provided under the law, being a creature of the Statute - the denial of the credit on the said count by the lower authorities is upheld. Penalty - Held that: - the issue involved is bonafide interpretation of the provisions of law and as the appellants had reflected the taking of the credit, in the statutory records, no malafide can be attributed to them - penalty set aside in toto. Appeal allowed in part.

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• 2017 (10) TMI 751
  Classification of services - Cargo Handling services - respondent is engaged in Drilling, Blasting and Transporting of yellow Bound-quarrying works - Held that: - The issue whether loading / unloading of limestone and rejects in mining area would fall under ‘Cargo handling services’ is covered by the judgement in the appellant’s own case Commissioner Vs Thriveni Earthmovers [2017 (1) TMI 717 - SUPREME COURT], where it was held that one year time is taken by the appellant to file this appeal for which there is no satisfactory explanation is given - appeal dismissed - decided against appellant.

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• 2017 (10) TMI 750
  Business Auxiliary Service - commission paid to foreign agents - reverse charge mechanism - Held that: - The period involved is 9.7.2004 to 31.12.2006. The provision for payment of service tax under reverse charge mechanism was brought into the Finance Act by introducing Section 66A with effect from 18.4.2006 - The decision in the case of Indian National Ship Owners Association Vs UOI [2008 (12) TMI 41 - BOMBAY HIGH COURT] wherein it was held that the section would be operative with effect from 18.4.2006 only - the demand prior to 18.4.2006 is unsustainable. Demand beyond 18.4.2006 - Held that: - the appellants are manufacturers of artificial and synthetic staple fibre yarn - reliance placed in the case of CCE (A) Trichy Versus Arvind A Traders, Anartex Exports & others [2015 (11) TMI 1176 - CESTAT CHENNAI] - the demand beyond 18.4.2006 is also not sustainable. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 749
  Classification of services - Management, Maintenance and Repair Services - Works contract service - period involved is prior to 1.6.2007 - Held that: - The period is 16.6.2005 to 31.10.2006 - the property in the goods always vests with the customer who gives the rollers for re-rubberisation and therefore the activity is Works Contract Service - appellant is covered by the judgement of Hon'ble Apex Court rendered in the case of Larsen & Toubro Ltd [2015 (8) TMI 749 - SUPREME COURT], where it was held that the period being prior to 1.6.2007, the demand is unsustainable - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 748
  Valuation - includibility - charges for asset usage - Held that: - It is not the case of Revenue that the equipment usage referred to in the impugned agreement is one that subsequently would have been taxable as ‘supply of tangible goods’ - it is clear from the decision of this Tribunal in Sujala Pipes Pvt Ltd v. Commissioner of Customs, Central Excise & Service Tax, Guntur [2014 (7) TMI 932 - CESTAT BANGALORE] that discharge of VAT liability is sufficient to exclude operation of the Finance Act, 1994 on any transaction for which a consideration is received - demand set aside - appeal allowed.

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• Central Excise

• 2017 (10) TMI 747
  Validity of Application made to Settlement commission - return not filed - Held that: - - the petitioner does not have a vested right to compel the first respondent Settlement Commission, to take on file the case for settlement without fulfilling the conditions prescribed under Section 32 E of the act. Record of the proceedings show that no return was filed and in such circumstances, an application for settlement cannot be made in view of the statutory embargo, as contained in Section 32 E (1)(a) of the Act - the impugned order is perfectly valid and calls for no interference - petition dismissed - decided against petitioner.

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• 2017 (10) TMI 746
  Demand of interest - interpretation of statute - Rule 173G(1)(d) - Held that: - during the relevant period of time, there was no provision in the Central Excise Act to charge interest where duty has been paid before issuance of show-cause notice - in the present case duty has not been determined either under Section 11AA or 11AB of the Central Excise Act, 1944. Section 11AB was amended from 11/05/2011 whereby it has been provided that interest would be liable from the first day of the month succeeding the month in which duty ought to have been paid - The period involved in the present case is prior to the amendment dt. 11/05/2001. Therefore in the present case, the appellant was not liable to pay the interest but he paid the interest in order to settle the audit objection and the same was paid before the issuance of the show-cause notice. The appellants are liable to pay interest on the differential duty liability amounting to Rs. 3,77,833/-. For quantification of the interest on this amount, adjudicating authority will compute the interest liability of the appellant - appeal allowed by way of remand.

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• 2017 (10) TMI 745
  CENVAT credit - various iron and steel items used in the fabrication of Storage Tanks, classified under chapter 73 - Held that: - the Hon’ble Gujarat High Court in the case of Mundra Ports & Special Economic Zone Ltd. v. C.C.E. & Cus. [2015 (5) TMI 663 - GUJARAT HIGH COURT] held that the definition of capital goods under Rule 2(k) of Cenvat Credit Rules as amended on 07.07.2009 would be applicable only prospectively - Revenue had not disputed the use of the items as mentioned in the impugned order - appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 744
  SSI Exemption - use of Brand name - case of Revenue is that the appellants are removing their products using the brand name LAKSHMI owned by another unit - Held that: - the same Commissioner(Appeals) in the appellant's own case for the subsequent period i.e. September 2005 to July 2006 involving an identical issue has decided in favor of the appellant by holding that the appellants have not used the brand name of Sri Lakshmi Industries, Coimbatore and both are different and the appellants are entitled for SSI exemption - the same Commissioner in respect of the another unit using the same name has taken a view that there is a difference in the nature of logo and the word Lakshmi which was used by the assessee and held by order dt. 24/04/2008 that the assessee is entitled for SSI exemption as they are not used brand name or trade name of another - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 743
  Clandestine removal - Trade Rubber - duty demanded mainly based on consumption of Sulphur and holding that 435.050 MT of tread rubber was produced during the period from August 1980 to August, 1985 - the appellant is having grievance that why the Department has taken the quantity of tread rubber produced by them based on only one input i.e. Sulphur, whereas the Department had the figures of other inputs with them - Held that: - when the Department does not have other documents seized by them, fair assessment of tread rubber manufactured/produced by the appellant could be in terms of average production taking consideration of the figures in case of all these four inputs mentioned above. After adding the production of these four inputs, viz. rubber, carbon black, electricity and Sulphur, the total comes to 8,22,115.8 Kgs. i.e. 822.12 MTs; if this total production is divided by four, the average production comes to 205.27 MTs. (822.12/4). Consequently, taking this as fair prudent assessment of production, we confirm the demand of Central Excise duty in case of production of 205.27 Mts of tread rubber - The duty in this regard is required to be computed by the original adjudicating authority to whom we are remanding this matter; but only for this limited purpose of quantification of duty. Penalty - Held that: - penalty reduced from Rs. 5 lakhs to Rs. 50,000/-. Appeal allowed in part and part matter on remand.

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• 2017 (10) TMI 742
  CENVAT credit - intermediate product - Modifier - the credits taken and utilised by the assessee on the item Modifier for further manufacture of Modified Bitumen for the period from January 2005 to December 2006 appeared irregular - Held that: - the respondent has manufactured the modifier by mixing together crumbed rubber, Gilsonite and Sulphur and this modifier is used in the manufacture of CRMB - the respondent has also raised an invoice on HPCL clearly showing that modifier has been sold to HPCL and the same is consigned to HPCL and this has been done only to save the cost of packing and transportation - the respondent has rightly taken the CENVAT credit on the said modifier which was used for the manufacture of CRMB on which the duty has been paid - appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 741
  Classification of goods - Control Panels - period involved is November, 2006 to August, 2007 - Held that: - the Tribunal in their own case has held that Ground Power Unit is classifiable under 8803 in terms of Note 3 of Section XVII, in the appellant’s own cases, [1998 (6) TMI 563 - CESTAT CHENNAI], the demand is unsustainable - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 740
  CENVAT credit - input services - Air Ticketing charges - Hire charges for the cabs - Export Agency Charges against fees/commission for exports - Installation charges - Outward Transportation of goods - Held that: - The Tribunal in the same assessee's case [2016 (9) TMI 538 - CESTAT CHENNAI] has dealt with the issue of Cenvat credit of service tax paid on Commissioning and Installation Services, Air Travel Services and Rent-a-Cab Services which has been allowed in favour of the appellant - credit allowed. Export Agency Charges - Held that: - Export agency charges had been incurred for the exports made by them - Reliance is placed on the decision of the Hon'ble High Court of Gujarat in the case of Commissioner Vs. Dynamic Industries [2014 (8) TMI 713 - GUJARAT HIGH COURT], wherein it was held that when impugned services were utilized for purpose of export of final products and exporters could not do business without them Service Tax paid on these services availed till goods reached port, was admissible - credit allowed. Outward transportation service - Held that: - the period of dispute involved in the present appeal is from 2006 to 2008. During the disputed period in the definition of the Input services there was no restriction that the credit can be availed only upto the place of removal - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 739
  CENVAT credit - irregular availment - Rule 4(7) of the CCR, 2004 - Held that: - the appellants have taken the ineligible CENVAT credit in violation of the provisions of Rule 4(7), in respect of the input service for which they have not made payment within three months from the date of receipt of invoices - this aspect of availment of CENVAT credit was detected during the audit conducted by the Revenue and thereafter the appellant reversed the entire ineligible credit in their CENVAT credit account in August 2012 and intimated the Department on 22/09/2012. Demand of interest u/r 14 of the CCR, 2004 read with Section 75 of the FA, 1994 - Held that: - the appellants have utilised an amount of Rs. 74,33,595/- for payment of service tax on certain services during the period March 2012 to July 2012 - interest upheld. Penalty u/r 15(3) of CCR - Held that: - appellants are not liable to penalty because they have been regularly filing their monthly returns in Form ER2 and ST3 and there is no suppression on their part nor Revenue has brought any evidence on record to show that they had any intention to evade payment of tax - penalty set aside. Appeal allowed in part.

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• 2017 (10) TMI 738
  CENVAT credit - input services - Construction of Canteen, Storing Shed and Rest Shed within the factory premises - Held that: - law was amended with effect from 01.04.2011 and prior to the said date the Construction Services have been held to be as cenvatable input service by catena of decisions of the Tribunal and admittedly, the credit was available prior to 04.04.2011 - Construction of Canteen, Storing Shed and Rest Shed are part of the factory and is required to be provided by the manufacturer for the welfare of its employees - during the relevant period the said services were proper eligible cenvatable services - credit allowed. Time limitation - Held that: - the issues involved interpretation of law and the credits were availed reflecting the same in the statutory records and requisite returns were also being filed with the Revenue, no malafide can be attributed to the appellant so as to invoke the longer period of limitation - the demand is barred by limitation. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 737
  Demand of interest - relevant date for calculation of interest - interpretation of statute - Rule 7 (4) of the Central Excise Rules, 2002 - Held that: - the issue is no more res integra and stands settled by earlier decision of the Tribunal in the same assessee's case [2016 (3) TMI 133 - CESTAT CHENNAI], where it was held that the interest liability would accrue only after the finalization of the provisional assessments - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 736
  Suo moto credit taken - amount paid twice - invocation of Section 11B of the Central Excise Act, 1944 - Held that: - the debits made by the appellant in the CENVAT Credit account and subsequently through PLA is nothing but double payment of tax on the same clearances - similar issue came up before the Tribunal in the case of Sopariwala Exports Pvt. Ltd. [2013 (5) TMI 430 - CESTAT AHMEDABAD], wherein it was held that the amount paid by mistake cannot be termed as duty in the case on hand. There is no dispute that the appellant had discharged the entire duty liability subsequently in cash in effect twice, cannot be made to go through the rigmarole of filing an application for refund of the amount debited by them in CENVAT account. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 735
  Clandestine removal - Shortage of Finished Goods - 317.625 MTs of sponge iron - whether there was a clandestine removal of 317.625 MTs of sponge iron which was found short during the visit and stock verification in the appellant's factory or otherwise? - Held that: - there is nothing on record to show that the appellant had received unaccounted money or appellant had received unaccounted raw materials, appellant has consumed unaccounted electricity or any other document to show that the goods were cleared clandestinely from the factory premises - the adjudicating authority was correct in dismissing the allegation made in the SCN that there was clandestine removal of the differential quantum of sponge iron - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 734
  Refund claim - jurisdiction - Whether the Show Cause Notice dated 03/11/2001 and the subsequent proceedings are in the teeth of the ruling of Hon'ble Supreme Court in the case of Mafatlal Industries Limited Versus Union of India [1996 (12) TMI 50 - SUPREME COURT OF INDIA]? - Held that: - the SCN is wholly without jurisdiction and is an abuse of the process of the law. Further, there is no appeal filed by the Revenue against finalization of the assessment order dated 19/07/2000. Further, there has been no appeal filed by the Revenue against the order granting refund dated 06/11/2000. In this view of the matter, the Show Cause Notice is void-ab-initio. - the SCN and the subsequent orders impugned herein are void-ab-initio and in the teeth of the ruling of Hon'ble Supreme Court in the case of Mafatlal Industries Limited Versus Union of India, wherein the Apex Court has held that The goods provisionally assessed under sub-rule (1) may be cleared for home consumption or export in the same manner as the goods which are finally assessed. Sub-rule (5) provides that when the duty leviable on the goods is assessed finally in accordance with the provisions of these Rules, the duty provisionally assessed shall be adjusted against the duty finally assessed, and if the duty provisionally assessed falls short or in excess of the duty finally assessed, the assessee shall pay the deficiency or be entitled to a refund, as the case may be. Any recoveries or refunds consequent upon the adjustment under sub-rule (5) of Rule 9B will not be governed by Section 11A or Section 11B, as the case may be. Whether the provisions of unjust enrichment introduced in the scheme of provisional assessment with effect from 25th June, 1999 by Notification No. 45/1999 CE have retrospective effect? - Held that: - the issue of unjust enrichment is concerned have been introduced in the provisional assessment scheme with effect from 25th June, 1999 and the same is not retrospective. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (10) TMI 733
  Scope of Entry 54 of List II of the Seventh Schedule to the Constitution of India - imposition of tax contrary to the tax on the sale of the undivided share in the land - works contract - Held that: - the petitioner-assessee can very well raise even the said issue raised before this Court in the present writ petition, namely, the taxability of the land cost, in the appeal filed before the said First Appellate Authority itself as the said questions are undoubtedly mixed questions of law and facts and the Authorities created under the Act including the Appellate Authorities are entitled to go into such mixed questions of facts and law and decide the same in accordance with law - petition disposed off.

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• Indian Laws

• 2017 (10) TMI 756
  Possession notice issued u/s 13(4) of SARFAESI Act - Held that:- The SARFAESI Act, 2002 is a strict act which requires strict compliance of the provisions provided therein and any deviation in compliance of the provisions renders the action of the secured creditor bad and unsustainable. The Debt Recovery Tribunal is fully empowered to go into the record of the secured creditor regarding the compliance of the provisions of the Act and Rule and the borrower gets an opportunity to see the record of the proceedings initiated and conducted by the bank against him in recovery of debt from him before the Debts Recovery Tribunal. In the writ petitions filed under Article 226 of the constitution before the High Court, the borrower never gets the opportunity to rebut the action taken by the secured creditor against him and by accepting the liability alleged by the secured creditor, he gets estopped from raising any objection against the action of the secured creditor, in future, since he admits the liability and thereby ratifies all the actions done by the secured creditor against the borrower. Therefore, the remedy under Section 17 of the SARFAESI Act, 2002 before the Debts Recovery Tribunal is a broad remedy available to the borrower/guarantor vis-a-vis the jurisdiction of the High Court under Articles 226 and 227 of the Constitution and he has further opportunity to file further appeal under Section 18 of the Debt Recovery Appellate Tribunal against the order of Debts Recovery Tribunal in case he fails to get any relief under Section 17 of the SARFAESI Act, 2002 from the Debts Recovery Tribunal. The remedy of appeal under Section 18 of the SARFAESI Act, 2002 also eludes a borrower who approaches the High Court under Article 226/227 of the Constitution of India directly against the proceedings under SARFAESI Act, 2002 where the scope of inquiry regarding the action of the secured creditor is very limited. The remedy under Article 226/227 of the Constitution is still available to the borrower after exhaustion of remedies under the SARFAESI Act, 2002. Therefore, in view of the legal position stated above this writ petition is being dismissed on the ground of alternative remedy available to the petitioner under Section 17 of the SARFAESI Act, 2002.

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