TMI Tax Updates - e-Newsletter
October 23, 2024

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs PMLA Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. ADJUDICATION--MY EXPERIENCE

   By: Sadanand Bulbule

2. APPOINTMENT OF RETIRED PROFESSORS, DOCTORS, TEACHING PERSONNEL IN THE UNIVERSITY – PAYMENT MADE TO THEM IS LIABLE TO TDS ?

   By: DR.MARIAPPAN GOVINDARAJAN

3. Delhi HC issued notice in circular mandating CA certification for proving credit reversal for post sales discount

   By: Bimal jain

4. Budgetary Support Scheme is not hit by Doctrine of Promissory Estopple and Legitimate Expectations

   By: Bimal jain

News

1. Advisory - Reg 07

2. Attention: Validation of bank account details while adding bank account as non core amendment

3. Auction for Sale (re-issue) of (i) '6.79% GS 2034', (ii) '7.46% GS 2073'

4. FINANCE MINISTER APPROVES CREATION / INCREASE OF CHIEF GENERAL MANAGER POSTS IN NATIONALISED BANKS

Notifications

Customs

1. 18/2024 - dated 21-10-2024 - ADD

Seeks to impose anti-dumping duty on imports of "Unframed glass mirror" falling under tariff item 7009 91 00 originating in or exported from China PR for a period of 5 years

GST - States

2. S.R.O. No. 908/2024 - dated 9-10-2024 - Kerala SGST

Amendment in Notification G.O. (P) No.65/2017/TAXES. dated 30th June, 2017

3. S.R.O. No. 907/2024 - dated 9-10-2024 - Kerala SGST

Amendment in Notification G.O. (P) No.62/2017/TAXES dated 30th June, 2017

4. S R.O. No. 909/2024 - dated 9-10-2024 - Kerala SGST

Amendment in Notification G.O. (P) No. 72/2017/TAXES dated 30th June, 2017

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/144 - dated 22-10-2024

Inclusion of Mutual Fund units in the SEBI (Prohibition of Insider Trading) Regulations, 2015

2. SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2024/143 - dated 22-10-2024

Association of persons regulated by the Board and their agents with certain persons

Highlights / Catch Notes

GST

• Validity of parallel proceedings by State & Central Authorities under GST Laws.

  Case-Laws - HC : Proceedings initiated by State Authority u/s 74 are valid even if Central Authority has already initiated proceedings. The term 'initiation of proceedings' refers to issuance of notice under CGST/SGST Acts, not issuance of summons u/s 70 for inquiry. The Patna High Court's judgment in Baibhaw Construction did not consider this aspect. Therefore, the petitions lack merit and are dismissed.
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• Court Allows Late Amendment of GSTR-1 for Export Invoice Errors, Emphasizing Fair Credit for Taxpayers.

  Case-Laws - HC : The High Court allowed the petitioner to rectify GSTR-1 for the months of October and November 2022 regarding five export invoices, despite the statutory time limit having expired. The court noted the petitioner's claim of genuine mistake and the fact that the error came to light before the deadline for correcting GSTR-1 u/s 37(3) of the GST Act. However, the petitioner was prevented from rectifying the error on the portal as the refund application was partially allowed. Following the judgment in Abdul Mannan Khan, the court directed the petitioner to resubmit the corrected GSTR-1 manually within three weeks, and instructed the respondent authority to receive and facilitate uploading the details on the web portal. The court emphasized that assessees should not be prejudiced from availing legitimate credit due to inadvertent human error, particularly in the absence of an effective statutory mechanism for rectification.
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• Airport duty-free shops can claim GST refunds on services from operators as goods sale is zero-rated.

  Case-Laws - HC : Duty Free Shops at international airports are entitled to claim Input Tax Credit and refund of GST paid on services provided by airport operators, as the sale of goods at these shops is a zero-rated supply. The levy of GST on such services is a revenue-neutral exercise. Petitioners directed to reimburse Rs. 6,11,084 to airport operators within four weeks, along with 8% interest from the date of deposit, and file necessary applications for claiming ITC and refund of the reimbursed amount and other refundable amounts, which shall be considered by the authorities within eight weeks. Petition disposed of.
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• Truck detained over incorrect interest calculation; Court orders release on bank guarantee deposit.

  Case-Laws - HC : The court held that the quantification of interest in the detention order dated 20.07.2024 was contrary to the statutory mandate of Sub-Section 3 of Section 129. The petitioner agreed to deposit a bank guarantee of the original amount of Rs. 8,40,924/-. Subject to depositing the bank guarantee, the petitioner's truck and material would be released after obtaining photographs and fulfilling other formalities. The respondents were granted liberty to issue notice to the petitioner u/s 129(3) for imposition of penalty. The petition was disposed of accordingly.
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• Denial of input tax credit if tax not paid to government upheld.

  Case-Laws - HC : Section 16(2)(c) of the Central/State Goods and Services Tax Act, 2017, denies input tax credit if the tax charged has not been deposited with the government. The High Court upheld this provision, stating that input tax credit is a conditional right and cannot be availed unless the tax collected has actually been paid to the exchequer. The Court relied on its previous decision in Nahasshukoor v. Assistant Commissioner, which held that input tax credit is a statutory benefit subject to prescribed conditions that must be followed by the purchasing dealer. Consequently, the writ petition challenging the denial of input tax credit was dismissed.
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• Taxpayer gets stay on tax recovery due to State's delay in constituting Tribunal.

  Case-Laws - HC : Petition filed under Article 226 challenging non-constitution of Tribunal and seeking stay on recovery of tax. State authorities acknowledged non-constitution and issued notification providing limitation period for appeal before Tribunal shall commence only after President/State President assumes office. Held, subject to deposit of 20% of remaining disputed tax amount, petitioner entitled to statutory benefit of stay u/s 112(9) and cannot be deprived due to State's failure to constitute Tribunal. Recovery of balance amount and steps taken deemed stayed. Petition disposed of.
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• Error in GST filing corrected to claim ITC; court orders manual form rectification.

  Case-Laws - HC : Rectification of GST Return filed incorrectly as B2C instead of B2B for the periods 2020-21 and 2021-22 was permitted to enable the petitioner to claim Input Tax Credit (ITC) benefit. The court held that allowing rectification would not cause any tax loss, and denying it would unnecessarily prejudice the petitioner. Relying on a Madras High Court precedent, the court directed the respondents to manually receive the corrected GSTR-1 forms from B2C to B2B for the said periods within four weeks, facilitating subsequent uploading on the web portal. The petition was disposed of accordingly.
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• Works contract service for laying sewage systems attracts 18% GST for local authority.

  Case-Laws - AAR : The applicant provides works contract services involving supply of goods and services for an immovable property to Bikaner Nagar Nigam, a local authority. Entry 3B of Notification No. 13/2017-CT (Rate) dated 28.06.2017 is not applicable as entries 3 and 3A cover services provided to local authorities. The applicant is liable to pay 18% GST (CGST 9% and SGST 9%) for providing services like laying, jointing, testing, and commissioning of sewer systems, sewage pumping stations, and sewage treatment plants to Bikaner Nagar Nigam under SAC 995424 for general construction services of local water and sewerage pipelines and related works.
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Income Tax

• Tax Tribunal Upholds Assessee's Use of Mixed Methods in Transfer Pricing Dispute, Rejecting Revenue's Appeal.

  Case-Laws - HC : This case pertains to a transfer pricing (TP) adjustment dispute involving the selection of the most appropriate method - Resale Price Method (RPM) or Transactional Net Margin Method (TNMM). The assessee selected RPM with gross profit to sales as the profit level indicator (PLI) for certain transactions, and TNMM for others. The Tax Officer rejected RPM and applied TNMM, which was upheld by the CIT(A). The key points are: The Revenue's appeal challenging the CIT(A)'s order deleting the TP adjustment was rejected, as the facts were similar to the previous year's case where the HC had ruled in the assessee's favor. The ITAT noted the Revenue failed to highlight material differences in facts between the two years that would impact the TP adjustment. The assessee's choice of method (RPM/TNMM) and tested party (foreign AE) varied between the years, but the Tax Officer applied TNMM in both years, rejecting the assessee's approach. No contentions were raised regarding the comparables. Hence, the ITAT upheld the CIT(A)'s order deleting the TP adjustment.
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• Reassessment Notices Must Be Issued by Faceless Officers, Not Jurisdictional Officers, for Validity Under Tax Law.

  Case-Laws - HC : The High Court held that for a valid reassessment notice u/s 148 of the Income Tax Act, the Revenue must comply with Section 151A, which mandates the issuance of such notice by a Faceless Assessment Officer (FAO) and not the Jurisdictional Assessing Officer (JAO). The Court reiterated that the JAO lacks jurisdiction to issue a notice u/s 148, as it would violate Section 151A's provisions. The Court emphasized that there is no concurrent jurisdiction between the JAO and FAO regarding Section 148 notices, assessments, or reassessments. Accepting concurrent jurisdiction would create chaos and render the faceless assessment proceedings redundant. Consequently, the High Court allowed the writ petition, ruling that the JAO lacked jurisdiction to issue the impugned reassessment notice.
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• Faceless Assessment: Court rejects concurrent jurisdiction, upholds FAO's exclusive authority over s.148 notices.

  Case-Laws - HC : Faceless assessment provisions u/s 151A require notice u/s 148 for income escaping assessment to be issued by Faceless Assessing Officer (FAO), not Jurisdictional Assessing Officer (JAO). Court held JAO lacks jurisdiction to issue Section 148 notice, as it would breach Section 151A. FAO and JAO cannot have concurrent jurisdiction for issuing Section 148 notice or passing assessment/reassessment orders, as specific jurisdiction is assigned to either FAO or JAO under faceless assessment scheme, excluding the other. Allowing concurrent jurisdiction would render faceless proceedings redundant and create chaos. Since JAO admittedly lacked jurisdiction, the writ petition challenging Section 148 notice issued by JAO was allowed.
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• Property sale proceeds in cash legally used for new purchase after due registration.

  Case-Laws - AT : Assessee received cash consideration from sale of property, deposited in bank account and utilized to purchase another property. AO accepted transaction in regular assessment without addition. Assessee contended no violation of Section 269SS as cash received after due registration of property, as per sale agreement and CBDT circulars. ITAT allowed appeal, relying on Dhinagharan case, holding cash payment made at time of registration before sub-registrar does not violate Section 269SS. No penalty leviable u/s 271D.
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• Deed Executed Before Tax Law Change Not Subject to New Provision, Assessee's Appeal Allowed.

  Case-Laws - AT : As per the provisions of Section 47 of the Registration Act, 1908, interpreted by the Supreme Court, a registered document shall operate from the time it would have commenced to operate if no registration was required, not from the time of registration. If the sale deed is executed and consideration paid before execution, after registration, it operates from the date of execution. Any changes made with parties' consent also relate back to the execution date. Therefore, the deed of conveyance executed on 31.03.2017 shall operate from that date. Since Section 56(2)(x) was inserted by Finance Act, 2017 w.e.f. 01.04.2017, it is not applicable to this case where the deed was executed before that date. It can only apply to deeds executed on or after 01.04.2017 involving immovable property received. The assessee's appeal is allowed.
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• Penalty for cash repayment of loan not applicable when paid by third party bidder in auction.

  Case-Laws - AT : The assessee failed to repay a loan to M/s. Mahindra & Mahindra Financial Services Pvt. Ltd., leading to the auctioning of a car during the assessment year. The successful bidder in the auction made a cash payment directly to M/s. Mahindra & Mahindra Financial Services Pvt. Ltd.'s bank account to clear the loan. The Appellate Tribunal held that since the cash payment was made by the bidder and not the assessee, the assessee cannot be penalized u/s 271E for violating section 269T's provisions regarding cash repayment of a loan. Consequently, the assessee's appeal against the penalty was allowed.
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• Assessee's claim of filing fee as revenue expense upheld; AO's order valid.

  Case-Laws - AT : The AO's order was not erroneous or prejudicial to the revenue's interests. The filing fee for increasing share capital was rightly allowed as revenue expenditure, supported by audited financials and judicial precedent. The AO examined the revised computation, disallowed deduction u/s 35ABB after due application of mind, and passed the assessment order at the originally returned income. The PCIT's revision u/s 263, deeming the AO's order erroneous and prejudicial, is unjustified and quashed. The assessee's appeal is allowed.
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• ITAT Validates Assessee's Late Payment Under Income Declaration Scheme 2016, Overruling CIT(A) Decision.

  Case-Laws - AT : The assessee made an undisclosed income declaration under Income Declaration Scheme-2016 for the assessment years 2010-11, 2011-12, and 2014-15, clubbing the income for 2012-13. The Principal Commissioner specified the amounts to be paid as tax, surcharge, and penalty in three installments. The assessee defaulted on the third installment payment due by 30.09.2017. However, a notification dated 13.02.2019 extended the payment date to 31.01.2020, along with 1% monthly interest, retrospectively effective from 01.06.2016. The assessee paid the balance tax with interest. The ITAT held that the assessee validly deposited the tax, surcharge, interest, and penalty under IDS-2016 and the 13.12.2019 notification, rectifying the default retrospectively. The CIT(A) failed to appreciate this retrospective rectification. Therefore, the issue was determined in favor of the assessee against the revenue.
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• Tribunal Rules Assessments for 2011-12 and 2012-13 Invalid Due to Timing of Satisfaction Note u/s 153C.

  Case-Laws - AT : The Income Tax Appellate Tribunal examined the validity of assessments made u/s 153C, considering the gap between the satisfaction note recorded by the Assessing Officer of the searched person and the jurisdictional Assessing Officer. The Tribunal relied on the Supreme Court's decision in Jasjit Singh's case, which held that the first proviso to Section 153C(1) applies not only to the question of abatement but also to the date from which the six-year period is reckoned for filing returns by third parties. In the present appeals, the requisition and satisfaction note were recorded by the jurisdictional Assessing Officer on 10/11/2021 for the Assessment Year 2022-23. The 10-year outer ceiling limit prescribed in the statute must be computed backward from 31/03/2022. The assessments framed for the Assessment Years 2011-12 and 2012-13 fell beyond this 10-year period contemplated u/s 153C(1). Consequently, the Tribunal decided in favor of the assessee.
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• Proven share purchase & demat existence, AO failed to refute evidence, assessee's company knowledge irrelevant if transactions valid.

  Case-Laws - AT : Bogus share transactions involving abnormal price rise in penny stock shares - Assessee produced evidence of share purchase, existence in demat account - AO failed to rebut assessee's evidence, merely relied on circumstantial evidence - Ignorance of assessee about company's financials not crucial when transactions substantiated - Denial of exemption u/s 10(38) not justified - Addition u/s 68 deleted by CIT(A), upheld by ITAT - AO should have discharged onus after assessee's evidence.
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• Trusts' tax liability: Association of Persons (AOP) vs individual slab rates? Rectification pending. Fresh examination ordered.

  Case-Laws - AT : Determination of tax liability and treatment as Association of Persons (AOP) for assessee trusts. Examination required on whether income taxable at slab rates u/s 164(1) or as AOP u/s 167B at Maximum Marginal Rate. Rectification application pending u/s 154. Issue restored to Assessing Officer for fresh consideration after examining all relevant details and documents. Appeals allowed for statistical purposes. Jurisdictional Assessing Officer to examine and verify necessary details for determining appropriate tax treatment.
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Customs

• ADD: Unframed glass mirrors from China hit with $234/ton duty for 5 years to counter dumping injury to US industry.

  Notifications : Unframed glass mirrors originating or exported from China are subject to anti-dumping duty of $234 per metric ton for 5 years to address material injury caused to domestic industry by dumped imports. The duty applies regardless of export country if origin is China, or if exported from China regardless of origin. Framed, decorative mirrors and silver-coated mirror glass are excluded from product scope. The duty aims to remove injury to domestic industry caused by significant dumping margins on subject goods imported from China.
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• Court Dismisses Petition on Alleged Luxury Car Duty Evasion; Emphasizes Need for Evidence and Technical Expertise.

  Case-Laws - HC : The High Court dismissed the petition filed by an informer seeking directions against private respondents (importers of luxury cars) and statutory authorities (Customs, DRI) for alleged undervaluation and duty evasion. The court held that complex matters involving technical expertise on import valuation, pricing, and duty cannot be adjudicated in writ jurisdiction. The statutory authorities had already investigated based on the informer's information and found no violation by the importers. Mere suspicion without substantiating collusion or mala fides cannot warrant directions against authorities or importers. The informer cannot misuse his status for a witch-hunt against importers. Substantial investigation had already occurred, and the proceedings cannot continue merely on the informer's insistence. The court cannot issue directions regarding future imports in writ jurisdiction.
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• Customs Seizure of Gold Bars Challenged; Case Remanded for Detailed Review on Legitimacy and Due Process.

  Case-Laws - AT : The case pertains to the confiscation of foreign marked gold bars by customs authorities. The appellant claimed the gold was procured from a legitimate source and was being sent as a legitimate business transaction. However, no documentary evidence was produced by the courier company or the appellant's representative at the time of seizure. The Adjudicating Authority and the Commissioner (Appeals) dismissed the appellant's defense in a cryptic manner without adequately considering the claim of legitimate procurement and transaction. The orders were passed without following principles of natural justice and without providing detailed reasons for rejecting the appellant's defense. Consequently, the matter has been remanded back to the Original Adjudicating Authority to decide by way of a speaking order within three months, subject to the appellant providing necessary documents and appearing for a personal hearing.
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• Supreme Court Remands Case on DMLA Classification; Emphasizes Revenue's Burden of Proof and Valid Test Requirements.

  Case-Laws - AT : Classification of imported goods, specifically di-methyl lauryl amine (DMLA), under the Customs Tariff Act, 1975. The key points are: The classification of DMLA as a 'surface active agent' under heading 3402 was disputed. The test reports submitted were questioned for their validity and bona fides. The adjudicating authority did not consider the test reports furnished by the importer. The Supreme Court's ruling in Hindustan Ferodo Ltd v. Collector of Central Excise emphasizes that the onus of establishing the classification lies with the Revenue, and if evidence is not led, the appeal should be allowed. The benchmark in note 3 of chapter 34 of the Customs Tariff Act, 1975, must be met through valid test results. The order was set aside for fresh adjudication after considering the test results. The penalties imposed on individuals were found unsustainable and set aside. The dispute was remanded back to the original authority for fresh adjudication.
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• Customs duty overcharging on LCD panels import despite Tribunal ruling. Refund claim rejected on technicality.

  Case-Laws - AT : Customs authorities erroneously collected excess duty on import of LCD panels despite Tribunal's prior decision against such classification. Refund claim was rejected on procedural grounds of non-furnishing documents, invoking interest liability u/s 27A. Appellant's compulsions were apparent - fastened with duty contrary to Tribunal's decision, deprived of order u/s 17(5) for appellate recourse, not a party to pending Supreme Court appeal, and limitation u/s 27. Refund application within one year was the only option. Rejection on procedural grounds after telescoped haste is invalidated. Order set aside, application restored for enabling appellant to provide deficient documents and fresh consideration as per settled classification law.
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• Customs duty tussle: Sewing needle import classification conundrum.

  Case-Laws - AT : Sewing machine needles classification under Customs Tariff Act, 1975 - sub-heading 8452 30 or tariff item 8448 5190 disputed. Declared value rejected, anti-dumping duty applicability contested. Tribunal held while anti-dumping duty liability on specific description within broad heading may require expert opinion, disputed classification validated per interpretative rules and judicial principles. Original authority non-compliance with remand terms found, impugned order set aside. Matter remanded to original authority for fresh adjudication considering test report, allowing cross-examination sought by importer, and customs authorities discharging onus.
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• Goods Misclassified Under SCOMET Without Licensing Opinion; Order Set Aside and Case Remanded for Reassessment.

  Case-Laws - AT : The adjudicating authority's superficial view on classifying the impugned goods under the SCOMET regime of the Foreign Trade Policy (FTP) is incorrect. The FTP is designed by the DGFT under the Foreign Trade Act, with customs playing an enforcement role. In technical matters like SCOMET, customs should obtain the licensing authority's opinion before applying restrictions indiscriminately. The assumption that restrictions can be broadbanded in a restrictive regime reflects an incorrect perspective on licensing rules. The authority failed to discharge its responsibility of factual ascertainment for adjudication and imposing penalties, disregarding the defense. The order is set aside, and the matter remanded to the original authority to seek the licensing authority's opinion on SCOMET applicability, consider any defense, and dispose of the show cause notice accordingly. The appeals are allowed by remand.
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Benami Property

• Law on benami property transactions: Sections deemed unconstitutional, fresh hearing ordered.

  Case-Laws - SC : The Supreme Court declared Section 3(2) of the unamended Prohibition of Benami Property Transactions Act, 1988 unconstitutional for being manifestly arbitrary and violative of Article 20(1) of the Constitution. Section 5 of the unamended Act was also held unconstitutional on the ground of manifest arbitrariness. However, the constitutional validity of the unamended provisions was not challenged, and the issue was not squarely addressed in the submissions. The Court allowed the review petition, recalled the previous judgment, and restored the civil appeal for fresh adjudication by a Bench nominated by the Chief Justice. Aggrieved parties in other proceedings disposed of based on the recalled judgment were granted liberty to seek review.
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PMLA

• Writ dismissed, pursue statutory appeal on provisional attachment under anti-money laundering law.

  Case-Laws - HC : Writ petition challenging order confirming provisional attachment under Prevention of Money Laundering Act dismissed. Court held alternative statutory remedy of appeal available u/s 26 of Act. Principles reiterated that High Court will not entertain writ petition when effective alternative statutory remedy exists, given complicated questions of fact involved requiring evidence-based determination. Petitioner relegated to pursue statutory appeal before Appellate Tribunal which shall decide expeditiously in accordance with law.
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SEBI

• SEBI Expands Insider Trading Rules to Mutual Funds, Mandates AMC Disclosure of Large Transactions by 2024.

  Circulars : This circular from SEBI outlines the inclusion of mutual fund units under the purview of SEBI's Prohibition of Insider Trading Regulations, 2015, effective November 1, 2024. Key points are: AMCs must disclose aggregate holdings of designated persons quarterly; designated persons must report transactions above INR 15 lakhs to the compliance officer within two business days; AMCs must disclose such reported transactions; violations must be disclosed in a specified format. The circular also harmonizes investment restrictions for AMC employees with the amended regulations, modifying certain clauses of the Master Circular for Mutual Funds. Reporting formats for holdings, transactions, and violations are annexed. The circular aims to strengthen insider trading regulations for mutual funds.
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• SEBI Circular: Regulated Entities Must Cut Ties with Unregistered Advisors, Except via Approved Platforms.

  Circulars : The circular issued by SEBI prohibits persons regulated by the Board, including stock exchanges, clearing corporations, depositories, and their agents, from having direct or indirect association with individuals or entities that provide investment advice, recommendations, or performance claims related to securities, unless registered or permitted by SEBI. This restriction does not apply to associations through specified digital platforms approved by SEBI with mechanisms to prevent unauthorized activities. Investor education activities are exempted from this prohibition. Regulated entities must terminate existing contracts with non-compliant persons within three months. The circular aims to protect investors and promote securities market development by regulating unauthorized investment advisory and performance claim activities.
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VAT

• Jewelry transport sans tax form presumed evasion, but no sale in state.

  Case-Laws - HC : The petitioner brought a consignment of jewelry from Mumbai to Cochin without a valid Form 8FA declaration as required under the Kerala Value Added Tax Rules. The Commercial Tax Authorities assumed the petitioner intended to evade tax by clandestinely selling the consignment within Kerala. However, it was admitted that the entire consignment was taken back to Mumbai via Coimbatore without any sale within Kerala. Although the authorities were initially justified in presuming tax evasion, the subsequent events showed no actual sale or tax evasion occurred within Kerala. Therefore, a lenient view regarding the imposition of penalty on the petitioner is warranted.
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Service Tax

• Tribunal Rules CENVAT Credit Eligible for Employee Services and Prefabs; No Extended Limitation for Tax Evasion.

  Case-Laws - AT : CENVAT credit eligibility for various services used by appellant - transportation of household goods of employees, travel/journeys by employees for official purposes, procurement and filling of diesel for DG sets at cell sites, and prefabricated buildings used as shelters treated as capital goods. Tribunal held that during relevant period, definition of 'input services' was wide, covering services used in relation to business. Hence, credit availed on transportation of employee goods, employee travel, diesel procurement/filling eligible as 'input services'. Prefabricated buildings/shelters are accessories to Base Transceiver Station (BTS), qualifying as capital goods eligible for CENVAT credit. Extended period of limitation not invokable as no evidence of suppression with intent to evade tax. Appeal allowed.
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• Services Without Consignment Note Not Taxable as 'Goods Transport Agency'; Appeal Granted, Penalties Overturned.

  Case-Laws - AT : Taxability of services provided without issuance of 'consignment note' under 'goods transport agency' service category on reverse charge basis was examined. It was held that to qualify as 'goods transport agency', two conditions must be fulfilled: providing service in relation to transport of goods by road and issuance of consignment note. Absence of consignment note precludes categorization as 'goods transport agency' service, rendering demand of service tax unsustainable. Extended period of limitation was also not invokable due to lack of suppression of facts with intent to evade tax, as Department was aware of relevant facts and appellant had sought clarification on taxability. Consequently, the impugned order confirming demand and penalties was set aside, and the appeal was allowed.
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• Refund Claims: Supreme Court Clarifies Interest Entitlement on Delayed Tax Refunds Beyond Statutory Time Limits.

  Case-Laws - AT : Refund of service tax, interest on delayed sanction of refund, and time limitation u/s 11B of the Central Excise Act, 1944, made applicable to service tax matters u/s 83 of the Finance Act, 1994. The authorities cannot alter the statutory time limit prescribed for considering refund applications. The Hon'ble Supreme Court has categorized refund claims into three heads: unconstitutional levy, illegal levy, and tax paid under mistake of law. Since the refund applications were filed beyond the stipulated one-year period, rejection of the claim by the Commissioner (Appeals) is in consonance with statutory provisions. However, the assessee-appellants are entitled to interest for the period computed from the expiry of three months from the date of filing refund applications till sanction of the refund amount. The matter is remanded to the original authority for quantification of interest. The appeal is allowed by way of remand.
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Central Excise

• Authorities can't challenge Development Commissioner's bunching of products under HS code for DTA sale.

  Case-Laws - HC : The court held that the revenue authorities cannot question the decision of the Development Commissioner regarding bunching of products for domestic tariff area (DTA) sale within the six-digit Harmonized System (HS) code. In light of the judgments in Ginni International Ltd. and Virlon Textile Mills Ltd., the revenue cannot go beyond or behind the Development Commissioner's decision. The court found no provision in Section 3(1) of the Central Excise Act, 1944, or Rule 100(A) of the Central Excise Rules, 1944, that empowers the revenue authorities to challenge the Development Commissioner's decision. Consequently, the court dismissed the appeal.
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• Appeal Partially Allowed: Credit Denied for Electricity and Merchant Exporter Invoices Due to Restrictive Amendments.

  Case-Laws - AT : Cenvat Credit case involving invoices issued by Merchant Exporter for services related to fulfilling Minimum Indicative Export Quota and invoices from U.P. Sugar Mills Cogen Association for contribution to install Gateway System. Appellant denied credit on contribution for Gateway System as per Supreme Court ruling disallowing credit on electricity cleared at contractual rates. Credit on Merchant Exporter's invoices disallowed as services unrelated to manufacturing activities, definition of input service amended restrictively in 2011. Extended period invoked correctly as appellant suppressed facts by not disclosing tripartite agreement and availing credit on unrelated services. Penalty under Cenvat Credit Rules upheld for demand related to Merchant Exporter's invoices. Interest demand upheld as credit wrongly availed. Appeal partially allowed.
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Case Laws:

• GST

• 2024 (10) TMI 1119
  Initiation of proceedings under Section 74 by the State Authority - jusriction of State Authority to initiate proccedings when proceedings have already been initiated by the Central Authority - interpretation of term initiation of any proceedings - HELD THAT:- Sub-section (2) of Section 6 indicates that, where a proper officer under the CGST Act has issued an order under the provisions of the said Act, he shall also issue an order under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act as the case may be under the intimation to the jurisdictional officer of the State Tax or the Union Territory Tax Authority as the case may be. The Section further provides that where a proper officer under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under the CGST Act on the same subject matter. The term initiation of any proceedings is no doubt a reference to the issuance of a notice under the provisions of the CGST/SGST Acts and the initiation of an enquiry or the issuance of summons under Section 70 of the CGST/SGST Acts cannot be deemed to be initiation of proceedings for the purpose of Section 6 (2) (b) of the CGST/SGST Acts. The judgment of the Patna High Court in Baibhaw Construction on which considerable reliance was placed by the learned counsel for the petitioners do not appear to have considered the question as to whether the term initiation of proceedings in Section 6 (2) (b) of the CGST/SGST Acts would include any notice issued for any enquiry or any summons issued for the purposes of completing such enquiry either by the Central Authority or by the State Authority. Therefore the judgment of the Patna High Court in Baibhaw Construction does not come to the aid of the petitioners. There are no merit in these writ petitions - petition dismissed.

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• 2024 (10) TMI 1118
  Seeking to rectify GSTR-1, for the months of October, 2022 and November, 2022 in respect of five export invoices - HELD THAT:- Having taken note of the fact that there is no objection as regards the claim made by the petitioner that the Form GSTR-1 was filed by reasons of a genuine mistake and such mistake had come to light for the first time when the order of part refund was issued on 6th July, 2023, i.e. much prior to the last date for correcting the return filed in Form GSTR-1 in terms of proviso to Section 37(3) of the GST Act, however, since, the petitioner s refund application was partly allowed the petitioner had been prevented from rectifying the error as there is no scope available to rectify such error on the portal. It, however, appears to be a case of genuine mistake, having regard to the stand taken both by the State respondents as also by the customs authorities. The Hon ble Division Bench in the case of Abdul Mannan Khan [ 2023 (5) TMI 287 - CALCUTTA HIGH COURT ] had been pleased to observed that assesses should not be prejudiced from availing credit that they are otherwise legitimately entitled to. The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under statute. By following the judgment delivered by the Hon ble Division Bench in Abdul Mannan Khan, it is directed that the petitioner to resubmit corrected GSTR-1 Form manually with a further direction upon the respondent no. 3, to receive the same provided the same is submitted within three weeks from the date. The respondent no. 3 is directed to receive the same manually and would facilitate uploading of the details in the web portal. The aforesaid direction is being issued by proceeding on the premise that the assessee should not be prejudiced from availing the benefit which it is otherwise legitimately entitled to, by taking note of the stand of the State respondents and the customs authorities. The writ petition is disposed of.

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• 2024 (10) TMI 1117
  Levy of GST on Duty Free Shops located at international airports - Entitlement to Input Tax Credit (ITC) and refund of GST paid - revenue neutrality - HELD THAT:- It would be a futile exercise to consider the larger issue of levy of GST on the services provided to the petitioners by respondent Nos.3 and 4 in view of the same being revenue neutral exercise, as the petitioners are entitled to claim/apporpirate/ adjust the un-utilised input tax credit in view of the zero rated supply of sale of goods at the Duty Free Shops by the petitioners on the Arrival and Departure Terminal of the International Airport. It is directed that the petitioners will reimburse sum of Rs. 6,11,084/- to the respondent Nos.3 and 4 with in a period of four weeks from the date of this order along with interest at the rate of 8% per annum from the date of deposit made by the respondent Nos.3 and 4 till such time, the entire reimbursement is done to them - The petitioners shall file necessary application in accordance with law for claiming the ITC and/or refund of the amount reimbursed to the respondent Nos.3 and 4 and other amounts refundable and the same shall be duly considered by the respondent Nos.1 and 2 within a period of eight weeks from the date of the order. Petition disposed off.

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• 2024 (10) TMI 1116
  Quantification of interest - quantification of amount in the detention order dated 20.07.2024 runs contrary to Statutory Mandate of Sub-Section 3 of Section 129 of the said Act - HELD THAT:- The petitioner is ready to deposit bank guarantee of the original amount of Rs. 8,40,924/- (Rupees Eight lakh, forty thousand, nine hundred and twenty four only) and subject to depositing the same, his truck and material may be released. If the petitioner deposits bank guarantee of Rs. 8,40,924/- (Rupees Eight lakh, forty thousand, nine hundred and twenty four only) before the respondents, his struck and material may be released after obtaining photographs and after fulfilling other formalities - The respondents are at liberty to issue notice to the petitioner as per Section 129 (3) of the Act for imposition of penalty. The petition is disposed off.

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• 2024 (10) TMI 1115
  Denial of input tax credit - interpretation of Section 16(2)(c) of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017 - HELD THAT:- Since the right to avail input tax credit is a conditional right, the petitioner cannot be given the benefit of input tax credit unless the amount of tax collected from the petitioner has actually been paid to the exchequer - the above view is taken in the light of the observations of a Division Bench of this Court in Nahasshukoor v. Assistant Commissioner and Others [ 2023 (11) TMI 1153 - KERALA HIGH COURT ], where this Court held As stated already, the input tax credit is in the nature of a benefit or concession conferred under the statute. The impugned provisions prescribe certain conditions for the purchasing dealers to avail of the benefit. It is up to the purchasing dealer to avail of the said benefit/concession following those conditions. The writ petition fails and it is accordingly dismissed.

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• 2024 (10) TMI 1114
  Maintainability of petition - alternative remedy of appeal - HELD THAT:- The appellant was afforded a personal hearing before passing Ext.P11 order that was impugned in the writ petition. Although it is his case that he was not aware of the substance of the issues in respect to which he was asked to show cause, it is found from a perusal of Ext.P11 order that the appellant was informed of the grounds on which the show cause notice was issued, and he had submitted before the adjudicating authority, that the records necessary for completing the assessment were available with him, but had not been carried by him at the time of personal hearing. It is found that the adjudication order was passed almost two weeks after the date of the personal hearing, within which time, the appellant could have made available the records before the adjudicating authority - appeal dismissed.

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• 2024 (10) TMI 1113
  Challenge to writ petition - petitioner did not have a reasonable opportunity to contest the tax demand on merits - violation of principles of natural justice - mismatch between the petitioner s GSTR 3B returns and the auto-populated GSTR 2A - HELD THAT:- On examining the impugned order, it is clear that the tax proposal was confirmed because the taxpayer failed to provide supporting documents. By taking note of the assertion that non- participation was on account of not being aware of these proceedings, it is just and appropriate that the petitioner be provided an opportunity to contest the tax proposal on merits. In this connection, it should be noticed that a sum of about Rs. 2.7 crore was recovered from the petitioner s bank account and that the petitioner had remitted 10% of the disputed tax demand earlier while proposing to file the appeal. To that extent, revenue interest is secured. The impugned order dated 15.09.2023 is set aside and the matter is remanded for reconsideration - Petition disposed off by way of remand.

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• 2024 (10) TMI 1112
  Rejection of appeal on the ground of time limitation - cancellation of petitioner s GST registration - HELD THAT:- The admitted facts are that the order in original was issued on 30.06.2023 and the appeal was lodged on 21.11.2023. The petitioner asserts that he did not have access to the portal on account of the cancellation of GST registration and that a copy of the order was received on 22.07.2023 by e-mail. Even if the assertion of the petitioner is not accepted, the period of delay beyond the condonable period is only about twenty days. By taking note of the facts and circumstances outlined above, this is an appropriate case to direct the appellate authority to receive and dispose of the appeal on merits. Petitions are disposed of by directing the appellate authority to receive and dispose of the appeal on merits.

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• 2024 (10) TMI 1111
  Seeking to quash the order - impugned order has been passed without giving any opportunity of hearing to the Petitioner - violation of principles of natural justice - HELD THAT:- Considering the contentions raised by the learned counsel appearing for the parties, but, however without expressing any opinion on the merits of the case, since the impugned order dated 04.04.2024 under Annexure-1 has been passed without giving opportunity of hearing to the Petitioner, the said order cannot be sustained in the eye of law. Accordingly, the order dated 04.04.2024 is liable to be quashed and is hereby quashed. This Court remits back the matter to the very same authority to rehear the same afresh - Petition disposed off by way of remand.

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• 2024 (10) TMI 1110
  Dismissal of appeal - petitioner has approached this Court by way of the present Writ Petition, contending that, he is not conversant with Hindi and that both himself and his learned counsel are unable to prepare a proper Appeal against the order - HELD THAT:- This Court finds substantial merit in the contention of the petitioner that he is entitled to a certified copy of the order in English to enable him to take further steps in the matter and that non-furnishing of such an order copy would gravely prejudice his rights under the provisions of the CGST Act, 2017, as he would be unable to take further steps under the provisions of the CGST Act, 2017. The 1st respondent shall furnish a certified copy of the order passed by him on 25.03.2024 bearing OIA No.VIZ-GST-001-APP-011 012-23-24, in English, to the petitioner herein. The said certified copy is to be furnished in English within three weeks from today - Petition disposed off.

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• 2024 (10) TMI 1109
  Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed of.

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• 2024 (10) TMI 1108
  Condonation of delay in filing the revocation application - compliance with all the requirements of paying the taxes, interest, late fee, penalty etc. due - HELD THAT:- The delay in Petitioner s invoking the proviso to Rule 23 of the Odisha Goods and Services Tax Rules (OGST Rules) is condoned and it is directed that subject to the Petitioner depositing all the taxes, interest, late fee, penalty etc. due and complying with other formalities, the Petitioner s application for revocation will be considered in accordance with law. The writ petition is disposed of.

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• 2024 (10) TMI 1107
  Withdrawal of Provisional Attachment under Section 83 of the CGST Act, 2017 - HELD THAT:- In light of the memo filed and after noticing the contention that the earlier attachment is withdrawn, the petition is disposed off.

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• 2024 (10) TMI 1106
  Dismissal of appeal filed beyond time - condonable under Section 107(4) of the KGST/CGST Act, 2017 or not - HELD THAT:- The date of filing of the appeal physically as extracted above, cannot be taken to be the date of actual filing of the appeal. The appeal ought to have been filed within 3 months from the date of receipt of the order and taking note of the date on which the appeal was filed online which is to be taken to be the date of filing of the appeal, the appeal could be construed to have been filed in time. If that were to be so, the present appeals having been filed in time, the orders of the Appellate Authority at Annexure-A in all the writ petitions are set aside and the matter is remitted to the appellate authority for fresh adjudication on the merits of the matter. Petition disposed off by way of remand.

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• 2024 (10) TMI 1105
  Violation of principles of natural justice - Non-application of mind - alleged non payment of tax in respect of the sale of medicines - HELD THAT:- The petitioner has placed on record prima facie evidence that supplies were made by either EMC Pharmacy (HUF) or EMC Pharmacy, a partnership firm, during the relevant period. The invoices issued by the said entities indicate that tax was collected. It is asserted in the affidavit and in the petitioner s reply that such taxes were remitted to the Government. As regards tax on rent, the petitioner has asserted that no rent was collected since it was intended as an additional facility for persons who visit the hospital. Since these aspects were not taken into account while issuing the impugned order, the matter requires reconsideration. The impugned order dated 27.03.2024 is set aside and the matter is remanded for reconsideration. After providing a reasonable opportunity to the petitioner, including a personal hearing, the respondent is directed to issue a fresh order with in three months from the date of receipt of a copy of this order. Petition disposed off by way of remand.

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• 2024 (10) TMI 1104
  Refund claim - appeal not filed within time limitation - adjudication of writ petition - HELD THAT:- The petitioner has placed on record evidence that the appeal was filed in Form GST APL-01 through the online mode on the GST portal on 28.06.2022. Such filing was in accordance with Rule 108(1) of the Central Goods and Services Tax Rules, 2017 (the GST Rules) and within the prescribed period of limitation. Sub-rule(3) of Rule 108 of the Central Goods and Services Tax Rules, 2017 indicates clearly that the requirement of filing a self-certified copy of the order appealed against becomes applicable, as per the first proviso thereto, only where the order appealed against is not uploaded on the common portal. In the case at hand, the order was duly uploaded on the common portal. In such event, the date of online filing is the date of filing of the appeal. Even otherwise, the filing of a hard copy is a purely procedural requirement. Consequently, the impugned order is not sustainable. The impugned order dated 24.01.2024 is set aside and the appellate authority is directed to receive and dispose of the appeal on merits - petition disposed off.

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• 2024 (10) TMI 1103
  Petition filed under Article 226 of the Constitution of India seeking multifarious reliefs - maintainability of petition - availing statutory remedy of appeal - non-constitution of the Tribunal - stay of recovery of tax - HELD THAT:- The respondent State authorities have acknowledged the fact of non-constitution of the Tribunal and come out with a notification bearing Order No. 09/2019-State Tax, S. O. 399, dated 11.12.2019 for removal of difficulties, in exercise of powers under Section 172 of the B.G.S.T Act, which provides that period of limitation for the purpose of preferring an appeal before the Tribunal under Section 112 shall start only after the date on which the President, or the State President, as the case may be, of the Tribunal after its constitution under Section 109 of the B.G.S.T Act, enters office. Subject to deposit of a sum equal to 20 percent of the remaining amount of tax in dispute, if not already deposited, in addition to the amount deposited earlier under Sub-Section (6) of Section 107 of the B.G.S.T. Act, the petitioner must be extended the statutory benefit of stay under Sub-Section (9) of Section 112 of the B.G.S.T. Act. The petitioner cannot be deprived of the benefit, due to non- constitution of the Tribunal by the respondents themselves. The recovery of balance amount, and any steps that may have been taken in this regard will thus be deemed to be stayed. Petition disposed off.

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• 2024 (10) TMI 1102
  Rectification of GST Return filed for the period 2020-21 and 2021-22 from B2B instead of B2C as was wrongly filed under GSTR-1 in order to get the Input Tax Credit (ITC) benefit - HELD THAT:- The fact remains that by permitting the Petitioner to rectify the above error, there will be no loss whatsoever caused to the Opposite Parties. It is not as if that there will be any escapement of tax. This is only about the ITC benefit which in any event has to be given to the Petitioner. On the contrary, if it is not permitted, then the Petitioner will unnecessarily be prejudiced. The Madras High Court in M/S. SUN DYE CHEM VERSUS THE ASSISTANT COMMISSIONER (ST) , THE COMMISSIONER OF STATE TAX [ 2020 (11) TMI 108 - MADRAS HIGH COURT] accepted the plea of the Petitioner and directed that the Petitioner in that case should be permitted to file the corrected form. The Court permits the Petitioner to resubmit the corrected Form-GSTR-1 from B2C to B2B for the aforementioned periods 2020-21 and 2021-22 and to enable the Petitioner to do so a direction is issued to the Opposite Parties to receive it manually. Once the corrected Forms are received manually, the Department will facilitate the uploading of those details in the web portal. The directions be carried out with in a period of four weeks. Petition disposed off.

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• 2024 (10) TMI 1101
  Challenge to tender notification dated 15.11.2018, issued by respondent No.3 inviting bids for various civil works - non-performance of the work under the tender notification - forfeiture of earnest money deposit (EMD) submitted by the petitioner - HELD THAT:- Initially, condition No.10 of the tender document mandated separate GST payment on the contract amount as per the Government order dated 10.10.2018. The petitioner, having accepted this condition, participated in the tender process and secured the bid. Therefore, respondent No.3 s decision to issue a corrigendum withdrawing this condition, and subsequently forfeiting the petitioner s EMD, constitutes an error. The petitioner did not violate any terms specified in the tender notification. Hence, respondent No.3 s action in forfeiting the petitioner s EMD amount is deemed arbitrary and discriminatory. Respondent No.3 is here by directed to refund the earnest/EMD money deposited by the petitioner following the tender notification dated 15.11.2018, vide Annexure-A, within a period of three months from the date of receipt of certified copy of this order - The writ petition is allowed.

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• 2024 (10) TMI 1100
  Seeking to quash the order passed u/s 73 of the CGST/OGST Act without granting any opportunity of personal hearing to the Petitioner - violation of principles of natural justice - HELD THAT:- Without expressing any opinion on the merits of the case, since the State Tax officer while passing the order dated 14.12.2023 has not been given opportunity of hearing to the Petitioner, the said order cannot be sustained in the eye of law. Accordingly, the order dated 14.12.2023 is liable to be quashed and is hereby quashed. Therefore, this Court remits back to the very same authority to rehear the matter afresh in accordance with law after giving opportunity of hearing to the Petitioner. Petition disposed off by way of remand.

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• 2024 (10) TMI 1099
  Seeking to quash the order on the ground of limitation - delay in filing the appeal - HELD THAT:- This Court sets aside the order passed by the Commissioner (Appeal), GST, Central Excise Customs, Bhubaneswar in Order-in-Appeal No.08/ST/RKL-GST/2024 and the matter is remitted to the very same authority to consider the same afresh taking into consideration the order passed by the apex Court in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [ 2022 (1) TMI 385 - SC ORDER] and pass appropriate order affording opportunity of hearing to all the parties. The writ petition stands disposed of.

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• 2024 (10) TMI 1098
  Challenge to summary of the Assessment Order passed under Section 73 of the SGST Act - HELD THAT:- The petitioner has been writing several letters asking the respondents to furnish the copy of the Assessment Order for the petitioner to file a statutory appeal. Despite the same, it appears that the respondents have not issued a certified copy of the order either posting it in the Web portal or by serving it manually. The petitioner can be given liberty to file a statutory appeal within a period of 30 days from the date of receipt of the Assessment Order. The respondents are directed to furnish the copy of the same within a period of 30 days from the date of receipt of a copy of this order. Petition disposed off.

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• 2024 (10) TMI 1097
  Exemption from GST - activity of providing, laying, jointing, testing and commissioning of sewer system and all ancillary works - Applicability of entry 3B of the NN 13/2017-CT (Rate) dated 28.06.2017 - BIKANER NAGAR NIGAM is local authority or not. HELD THAT:- In the instant case the applicant is engaged in providing works contract services . The applicant also admits the fact that they are engaged in supply of goods along with services for an immovable property. Thus, the services provided by the applicant are found to be works contract services, where goods along with services are supplied. BIKANER NAGAR NIGAM is covered under the definition of Local Authority. In the instant case, the applicant is providing services to BIKANER NAGAR NIGAM which is a local authority. The applicant provides services to Nagat Nigam, Bikaner, which is a local authority and all the three entries Sr No 3, 3A and 3B of the Notification 12/2017-CTR dtd 28.06.2017 are consistent and should not be read individually, the rate of tax on services provided by the applicant should be decided in terms of Sr No. 3 and 3A, since the said entries cover services provided to local authority , there need to go to Sr No. 3B - It is pertinent to mention here that the applicant has discharging it s tax liability by paying 18% GST (SGST CGST 9%) considering the supply of construction civil work under SAC 995424 prior to 19.10.2023. The SAC 995424 stands for general construction services of local water and sewerage pipelines, electricity and communication cables and related works. The applicant is providing its services to NAGAR NIGAM, BIKANER (local authority) of Providing, laying, jointing, testing and commissioning of sewer system and all ancillary works along with Design, construction, supply, installation. testing and commissioning (Civil, Electrical, Mechanical and Instrumentation and other necessary works) of Sewage Pumping Station/MWP(if any), Sewage Treatment Plant based on SBA Process with provision for waste water reuse including MPS and 10 MLD capacity STP based on SBR process With provision of 1 year defect liability 5 years O M for towns under package AMRUT-2.0/RAJ/SEWERAGE-13.. So, exemption entry No. 3B is not applicable to the applicant.

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• Income Tax

• 2024 (10) TMI 1096
  PE in India - activities of Research and development activities do not constitute a PE of the assessee in India - HELD THAT:- The question of law set out is covered by the decision Adobe Systems Incorporated [ 2016 (5) TMI 728 - DELHI HIGH COURT] Revenue from software supplies - taxable as Royalty under Article 12 of the India-Finland Double Taxation Avoidance Agreement - As it is admittedly covered by the decision of Engineering Analysis Centre of Excellence Private Limited [ 2021 (3) TMI 138 - SUPREME COURT] Permanent Establishment [PE] in India - profits attribution - A plain reading of the Article 7(1) would show, that the issue of taxability would arise qua the respondent/assessee only if profits accrue to the respondent/assessee, and that too only to the extent they can be attributed to its PE in India. Given this position, we are not inclined to entertain the appeal. Delay filling SLP - HELD THAT:- As there is gross delay of 508 days in filing this Special Leave Petition. The reasons assigned for seeking condonation of delay, in our view, are not sufficient in law to be accepted. Hence, the application seeking condonation of delay is dismissed. Consequently, the Special Leave Petition is also dismissed on the ground of delay.

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• 2024 (10) TMI 1095
  Reopening of assessment - One of the allegations was that the petitioner had transactions with the entities that were engaged in the practice of availing/issuing bogus sale/purchase bills - HELD THAT:-Petitioner replied to the aforesaid notice furnishing certain details. He stated that the income from the interest had not escaped assessment as the same was brought to tax. He also filed a copy of the return which reflected that the interest received by the petitioner was included in his total income had been assessed to tax. AO has proceeded to pass the impugned order which is, in effect, is a substantial reproduction of the said notice. The impugned order also indicates that the AO has not considered the petitioner s response that the interest, which according to the AO had escaped assessment, had been assessed to tax. This clearly indicates that the AO did not apply his mind to the reply furnished by the petitioner. The impugned order is set aside and the matter is remanded to the AO for considering the petitioner s reply afresh and to pass a reasoned order within a period of four weeks from date, after making necessary inquiries, in accordance with law. In so far as the petitioner s challenge to the jurisdiction of the AO is concerned, the said issue is pending for consideration before this Court in a batch of matter. Notwithstanding the same, this Court has not considered it apposite to interdict the proceedings. This Court directs that the proceedings as initiated by issuance of the said notice for the AY 2018-19 shall continue, however, the same would be subject to any order that may be passed in the batch of matters with regard to the jurisdiction of the AO to initiate the proceedings and to re-assess the income after issuance of the notification.The petition is disposed of in the aforesaid terms. Pending applications, also stands disposed of.

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• 2024 (10) TMI 1094
  TP Adjustment - MAM selection - RPM or TNMM - assessee selected Resale Price Method (RPM) as the most appropriate method and adopted the ratio of gross profit to sales as the profit level indicator (PLI) - respect of other transactions, the assessee used transactional net marginal method (TNMM) as the most appropriate method - HELD THAT:-Revenue s appeal could not have been rejected by following the decision in respect of AY 2004-05. Revenue is unable to point out any material difference in the facts obtaining in two years that would have a material bearing on the issue of TP adjustment. ITAT had produced the grounds as urged by the Revenue in its appeal against the order of CIT(A). The principal ground urged by the Revenue was that the CIT(A) had erred in deleting the addition. ITAT expressly noted in the impugned order that the submissions advanced by the DRP in respect of AY 2005-06 were reiteration of the submissions made in respect of its appeal in respect of AY 2004-05. This observation is not countered by the Revenue. To ascertain as to how the facts obtaining in AY 2004-05 are materially different from the facts as obtaining in the year 2005-06. One of the differences as mentioned in the appeal is that in AY 2004-05, the assessee had used TNMM with OP/OC as the PLI for benchmarking the international transaction. Assessee had also used its foreign associated enterprise (ESYS Singapore) as a tested party. In variance to the said method, the assessee had used RPM as the most appropriate method with PLI of GP/Sales for benchmarking the transactions in AY 2005-06. We find that the said fact would be of little relevance considering that the TPO had rejected RPM as the most appropriate method and had used TNMM as the most appropriate method in both the years AY 2004-05 and 2005-06. CIT(A) had concurred with the TPO s decision to use TNMM as the most appropriate method. TPO had also rejected the use of foreign AE as a tested party and thus, in both the years, the assessee s foreign AE was not used as the tested party. No contention has been canvased on behalf of the Revenue regarding the rejection of the comparable entities.

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• 2024 (10) TMI 1093
  Faceless assessment of income escaping assessment - notice issued under Section 148 is issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ), as is required by the provisions of Section 151A - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment u/s 148 of the Act, the Respondent-Revenue would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] wherein held Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice u/s 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice u/s 148. As there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed.

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• 2024 (10) TMI 1092
  Faceless assessment of income escaping assessment - notice issued u/s 148 is issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ), as is required by the provisions of Section 151A - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment u/s 148 of the Act, the Respondent-Revenue would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] wherein held Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice u/s 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148. As there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed.

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• 2024 (10) TMI 1091
  Faceless assessment of income escaping assessment - notice issued under Section 148 is issued by the Jurisdictional Assessing Officer ( JAO ) and not by a Faceless Assessing Officer ( FAO ), as is required by the provisions of Section 151A - HELD THAT:- It is now well settled that for a notice to be validly issued for reassessment u/s 148 of the Act, the Respondent-Revenue would need to be compliant with Section 151A, which has been interpreted and analysed in detail by a Division Bench of this Court in the case of Hexaware Technologies Limited [ 2024 (5) TMI 302 - BOMBAY HIGH COURT ] wherein held Court held that it was not permissible for the Jurisdictional Assessing Officer to issue a notice u/s 148, as the same would amount to breach of the provisions of section 151A of the IT Act. There is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice u/s 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the Scheme dated 29th March, 2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148. As there is no dispute that the JAO had no jurisdiction to issue the impugned notice, the Writ Petition is accordingly allowed.

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• 2024 (10) TMI 1090
  Estimation of commission income - 2% OR 0.5% agreed by the assessee - DR stated that the assessee itself in assessment proceedings for the preceding year had admitted to having been earned commission income @ 2% - assessee countered by stating that the 2% commission income was admitted by the assessee to have been earned in a specific transaction of sale of land and not with respect to the other accommodation entry transactions. HELD THAT:- We find merit in the contention of assessee that the commission income earned by it on the admitted business of providing accommodation entries was to be estimated by applying at the rate of 0.5% to the total bank deposits of the assessee. Assessee has demonstrated that in the case of other assessee s undertaking identical transactions, CIT(A) themselves had held commission income to be earned @ 0.5%. Assessee has also pointed out that the 2% commission rate admitted by the assessee in the preceding year was in relation to specific transaction of accommodation entry entered into with one M/s.Ardor Overseas Pvt.Ltd. DR was unable to controvert the above contentions of the Ld.Counsel for the assessee before us. In view of the same, we do not find any justification in the estimation of commission income by applying the rate of 2%. The order of the CIT(A) confirming the estimation of commission income @ 2% by the AO is, therefore, set aside and the AO is directed to estimate the commission income earned by the assessee by applying the rate of 0.5% to the total bank deposits of the assessee. All the grounds raised by the assessee are allowed.

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• 2024 (10) TMI 1089
  Unexplained deposits - Estimation of the rate of commission - HELD THAT:- These appeals pertains to very old Assessment Years no purpose would be served by remanding to the AO to adjudicate these issues afresh as due to the time lapse there will be lot of documents and personal verification which could not be made available. Respectfully following view taken in case of M/s Goldstar Finvest Pvt. [ 2019 (4) TMI 1936 - BOMBAY HIGH COURT ] we restrict the addition to 0.15% of the deposits made in the bank account of the assessee.

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• 2024 (10) TMI 1088
  Penalty u/s 271D - assessee has received the abovesaid sale consideration in cash - assessee has violated the provisions of section 269SS - HELD THAT:- As observed that assessee has sold a property and received cash after due registration of the property. The same was deposited in his bank account and further utilised to buy another property. AO in regular assessment proceeding accepted the above transaction and completed the assessment without making any addition. Assessee has brought to our notice sale agreement wherein the abovesaid amount was clearly mentioned as settlement amount at the time of registration, speech of Finance Minister for amending the provisions of section 269SS wherein certain provisions were modified to curb the black money circulation in real estate transaction and relevant CBDT circulars. We are of the view that the assessee has received cash after duly transferring the property after registration and money involved in this transaction is duly recorded in the sale deed. The Assessing Officer also has accepted the transaction as genuine as per the Act. As decided in Shri R. Dhinagharan (HUF) [ 2024 (1) TMI 61 - ITAT CHENNAI] it is an admitted fact that all sale deeds were registered and cash payment was made at one go before the sub- registrar at the time of registration of sale deeds of plots. Hence, in our view, there is no violation of provisions of section 269SS of the Act -Appeal filed by the assessee is allowed.

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• 2024 (10) TMI 1087
  Addition u/s 56(2)(x) - determine the date from which the deed of conveyance is operative - scope of Section 56(2)(x) of the Income Tax Act, which was inserted by the Finance Act, 2017 - HELD THAT:- We find that as decided in Gejo (D) Th.Lrs. Ors [ 2024 (1) TMI 1333 - SUPREME COURT] while examining the provisions of section 47 of the Registration Act, 1908, which provides that a registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration, held that when a compulsory registerable document is registered according to Registration Act, it shall operate from a date before the date of its registration. The Hon ble Supreme Court further held that if in a given case, a sale deed is executed and the entire agreed consideration is paid on or before execution of the sale deed, after it is registered, it will operate from the date of its execution. As the sale deed operates from the date on which it is executed and if any changes are made with the consent of both parties the same also relates back to the date of the execution of the sale deed. Therefore, having considered the provisions of section 47 of the Registration Act, 1908,as interpreted by the Hon ble Supreme Court in the judgment cited supra, we are of the considered view that the deed of conveyance in the present case shall operate from the date of its execution, i.e. 31.03.2017. Thus, since the deed of conveyance was executed amongst the parties in respect of immovable property on 31.03.2017, the provisions of section 56(2)(x), which were inserted by Finance Act, 2017 w.e.f. 01.04.2017, are not applicable to the present case and the said section can be only applicable to the facts wherein the sale deeds are executed on or after 01.04.2017 pursuant to which immovable property is received by any person. Assessee appeal allowed.

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• 2024 (10) TMI 1086
  Penalty u/s 271E - cash repayment of a loan - violation of provisions of section 269T - AR pleaded that the cash was not deposited by the assessee but by the successful bidder in the auction and since the penalty was initiated after a period of nine (9) years it is barred by limitation - HELD THAT:- It is an admitted fact that the assessee has failed in repayment of loan to M/s. Mahindra Mahindra Financial Services Pvt. Ltd., and thereafter M/s. Mahindra Mahindra Financial Services Pvt., Ltd., auctioned the car during the impugned assessment year. It is also an undisputed fact that the successful bidder in the auction has admitted the cash payment of loan to M/s. Mahindra Mahindra Financial Services Pvt., Ltd., directly into the bank account. Further, the B-Register of Andhra Pradesh Transport Department submitted by the Ld.AR also disclosed that auction budder becomes owner of the car from 10.04.2013. Since the cash payment was not by the assessee, but by the bidder directly to M/s. Mahindra Mahindra Financial Services Pvt., we are of the considered view that assessee cannot be penalised for deposit of cash which was made by a successful bidder during the auction. Appeal of the assessee is allowed.

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• 2024 (10) TMI 1085
  Revision u/s 263 - AO was erroneous and prejudicial to the interest of the revenue as an amount claimed as filing fee in respect of increased in share capital was wrongly allowed as revenue expenditure - HELD THAT:- During the course of proceedings before us, the assessee has also furnished audited financial statement for AY 2016-17 during which share capital of Rs. 10,00,00,000/- was raised and the expenses in respect of share capital had been debited to the P L account under the caption filing fees . During the scrutiny assessment proceedings for AY 2016-17, the said expenses had been allowed as revenue expenditure. In support of the contention that expenditure incurred in raising share capital is revenue in nature, the assessee has placed reliance inter alia on the decision of Navi Mumbai SEZ Private Ltd. [ 2015 (3) TMI 314 - ITAT MUMBAI] - Thus it is held that the expenditure of filing fee was allowed by the AO after requisite examination and , therefore, it cannot be said that the order of the AO was erroneous and/or prejudicial to the interest of the revenue. Assessee had submitted a revised computation showing income which was not examined by the AO - After making requisite inquiry and due application of mind, the AO passed the assessment order at income of Rs. 14,370/- (same as the original returned income). Accordingly, it is seen that issue regarding claim of deduction u/s 35ABB, which was the reason for filing revised return by the assessee, has also been duly examined during the course of assessment proceedings by the AO. We are of the view that the AO had already allowed the claim of the assessee regarding filing expenses being revenue expenditure and the deduction u/s 35ABB after due examination during the assessment proceedings. As such the order of the PCIT u/s 263 holding that order of the AO was erroneous and prejudicial to the revenue is not justified, the same is accordingly quashed. Apeal of the assessee is allowed.

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• 2024 (10) TMI 1084
  Undisclosed income declaration made under Income Declaration Scheme-2016 - subsequent non-payment of the declared amount within the stipulated period . HELD THAT:- In the instant case, the assessee made declaration of the undisclosed Income for A.Y. 2012-13 by clubbing the income for A.Y. 2010-11, 2011-12 and 2014-15. The principal commissioner specified the amounts to be paid by the assessee as tax, surcharge and penalty and the date and percentage of amount was to be deposited in three instalments as stated hereinbefore. The assessee, made default of payment in the payment of third instalment and could not pay by or before 30.09.2017, which was the stipulated date under the scheme and initial notifications. However notification dated 13.02.2019 was issued by the Central Government and extended date of payment of such amount till 31.01.2020, along with interest on such amount @1% for every month. The notification was brought into force with effect from 01.06.2016 retrospectively. Assessee paid the balance tax along with interest as per CBDT e-receipt for e-tax payment. Thus, we hold that the assessee has validly deposited the tax, surcharge, interest, penalty as required under IDS-2016 r/w notification dated 13.12.2019. CIT(A) has failed to appreciate that the default made by assessee in the part payment stood rectified retrospectively in view of notification dated 13.12.2019. In view of what we have held hereinabove, the main issue framed for consideration is thus determined in favour of the assessee and against the revenue.

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• 2024 (10) TMI 1083
  Bogus LTCG - share transaction being ingenuine and not supported by proper documentation - Addition u/s 68 - unexplained cash credit - assessee beneficiaries of penny stock acquired shares of TFC through preferential allotment i.e. off market transaction or by way of amalgamation or merger and once one year has passed, the shares price was rigged and beneficiaries sold their shares - HELD THAT:- Assessee made sale of shares through BSE and paid security transaction tax and there is no allegation against the share broker through whom assessee has made sales that they were indulging any price manipulation. Therefore, no justification in treating the LTCG as unexplained cash credit under section 68, particularly when the holding period of such scrips are of seven years. In the result, the addition of undisclosed income under section 68 is deleted. In the result, ground No. 3 of appeal is allowed. Addition on account of difference in salary income - AO made addition by taking view that as per data of Form AS-26, the assessee has not offered complete salary for taxation and thus made addition on account of difference in salary income - CIT(A) has already held that addition on the basis of Form 26-AS is factually wrong - HELD THAT:- We find that assessee has placed on record, copy of Form 26-AS wherein the total amount of salary is only of Rs. 4,05,000/- only. Thus, there is no mismatch in the salary offered by assessee, thus, the Assessing Officer is directed to delete the addition - Ground No.4 is allowed.

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• 2024 (10) TMI 1082
  Validity of assessments made u/s.153C - eight month gap between the date of satisfaction note recorded by the A.O. of the searched person and the date of satisfaction note recorded by the Jurisdictional A.O - HELD THAT:- The question regarding application of the first proviso to Section 153C (1) has been considered in the case of Jasjit Singh [ 2023 (10) TMI 572 - SUPREME COURT] wherein held that the application of first proviso to section 153C(1) of the Act would not be confined to question of abatement, but also with regard to date from which six year period was to be reckoned in respect of which returns were to be filed by third party and thus, period for which other persons i.e. Assessee is required to file returns, would commence only from date when materials were forwarded to their jurisdictional A.O. In the present Appeals the requisition was made and satisfaction note recorded by the Jurisdictional A.O. on 10/11/2021 the Assessment Year is 2022-23 the end of the Assessment Year 2022-23 is 31/03/2022. The computation of 10 years has to run backward from the said date i.e. 31/03/2022 starting from the AY 2022-23 to 10th Assessment Year 2013-14. The captioned appeals are pertaining to Assessment Years 2011-12 and 2012-13 which are beyond 10-year outer ceiling limit prescribed in the statute, thus the Assessment framed by the A.O. for A.Y 2011-12 and 2012-13 are beyond the periods contemplated under section 153C(1) of the Act. Decided in favour of assessee.

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• 2024 (10) TMI 1081
  Addition u/s 68 - denial of claim of exemption u/s 10(38) - Bogus share transactions - abnormal price rise in penny stock shares - HELD THAT:- When AO is having the details about the call record of the person who sold the shares to the assessee, wherein the question now remains of failure on the part of the assessee to produce the seller before the AO. In view of such overwhelming evidence of purchase of the shares, we find that existence of the shares in the Demat account of the company cannot be denied or rejected. Even the grounds of appeal raised by the learned AO before us is reliance on circumstantial evidence mentioned in the assessment order wherein abnormal price rise in the share of Surabhi chemical and investment Ltd without having strong financial status is challenged. The ground did not challenge that the impugned capital gain earned by the assessee has been proved as a sham transaction by the AO. Merely based on circumstantial evidence, the addition under section 68 could not have been made when assessee has discharged her initial onus by producing all the evidence. AO should have penetrated those evidence and thrown back onus on the assessee, which is lacking. Regarding the ignorance of the assessee with respect to the financial statements of the company who shares assessee purchased, it is clear from the statement that assessee stated that Mr Lalit Jain has carried out these transactions being part of the family. It is not unusual that brother-in-law of the assessee carried on these transactions. Mr Jain in statement has replied to most of the queries. However admittedly, he failed to answer who are the directors and what is the business of the company, but those questions are not so important, when overwhelming evidence are produced, that the capital gain exemption to the assessee can be denied. No infirmity in the order of CIT-A in deleting the addition - Decided in favour of assessee.

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• 2024 (10) TMI 1080
  Validity of notice issued u/s 274 r/w section 271(1)(c) - defective notice - AO did not mention under which the limb penalty under section 271(1)(c) of the Act has been levied - HELD THAT:- From the perusal of the notice issued u/s 274 r/w section 271(1)(c) of the Act, we find that the AO did not strike off any of the twin charges i.e., concealment of particulars of income or furnishing of inaccurate particulars of income. We find that the Larger Bench of the Hon ble Jurisdictional High Court in Mohd. Farhan A. Shaikh [ 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] held that the defect in notice by not striking off the irrelevant matter would vitiate the penalty proceedings. Appeal by the assessee is allowed.

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• 2024 (10) TMI 1079
  Determination of tax liability of the assessee trusts - Treatment to appellant as an Association of Person - whether the assessee s income is taxable at slab rates falling under clause (iv) of the first proviso to section 164(1) of the Act, or is taxable u/s 167B of the Act as an AOP at Maximum Marginal Rate? - AR submitted that the assessee trusts have also filed an application u/s 154 of the Act seeking to rectify the impugned intimation, to restrict the tax on the income of the assessee to slab rate HELD THAT:- We are of the considered view that whether the assessee s income is taxable at slab rates falling under clause (iv) of the first proviso to section 164(1) of the Act, or is taxable under section 167B of the Act as an AOP at Maximum Marginal Rate is required to be examined in detail by the Jurisdictional Assessing Officer having regard to the all the relevant material. Since the assessee s rectification application in this regard is also pending consideration u/s 154 of the Act, we deem it appropriate to restore the issue on merits to the file of the Jurisdictional Assessing Officer for consideration afresh after examination and verification of all the necessary details/documents. Appeals by the assessee trusts are allowed for statistical purposes.

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• Benami Property

• 2024 (10) TMI 1120
  Constitutional validity of the Prohibition of Benami Property Transactions Act, 1988 - Scope of the unamended provisions - whether the Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 has a prospective effect? - HELD THAT:- The Court has declared Section 3(2) of the unamended provisions of the Prohibition of Benami Property Transactions Act 1988 as unconstitutional for being manifestly arbitrary and as violative of Article 20(1) of the Constitution. The provisions of Section 5 of the unamended Act, prior to the Amendment of 2016, have been declared to be unconstitutional on the ground that they are manifestly arbitrary. It is not disputed that there was no challenge to the constitutional validity of the unamended provisions. This is also clear from the formulation of the question which arose for consideration before the Bench which has been extracted above. In the submissions of parties which have been recorded in the judgment, the issue of constitutional validity was not squarely addressed. A challenge to the constitutional validity of a statutory provision cannot be adjudicated upon in the absence of a lis and contest between the parties. We accordingly allow the review petition and recall the judgment [ 2022 (8) TMI 1047 - SUPREME COURT] dated 23 August 2022. Civil Appeal No 5783 of 2022 shall stand restored to file for fresh adjudication before a Bench to be nominated by the Chief Justice of India on the administrative side. Where any other proceedings have been disposed of by relying on the judgment of this Court in Ganpati Dealcom Private Ltd [ 2022 (8) TMI 1047 - SUPREME COURT] liberty is granted to the aggrieved party to seek a review in view of the present judgment.

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• Customs

• 2024 (10) TMI 1078
  Correctness, legality and propriety of the inaction in bringing a logical end as per law to the detailed and credible information given by the Petitioner - seeking declaration that the SVB orders, and orders of assessment and clearance of goods for home consumption obtained by Respondent nos.5 to 7 pursuant thereto or otherwise under Sections 17, 18 (2) and 47 of the Customs Act, 1962, having been obtained by the private Respondents 5 to 7 by material suppression - direction to Respondents to forthwith investigate the matter of continued massive undervaluation and mis-declaration of material particulars to evade customs duty in import of new Luxury Cars from such related parties - direction to official Respondents to inquire into the continued inaction by the concerned officer/s causing huge revenue loss. HELD THAT:- The Petitioner, who claims to be an informer, is seeking to bring before the Court information, which according to him, will be useful for the Customs Authorities and the Director of Revenue Intelligence in respect of import of cars in India. Once such a matter which involves technical expertise, the matters of import duties, the pricing across countries and various factors that go before international pricing, it is not possible for this Court in writ jurisdiction to arrive at determinative findings. Rights of the Respondents to pursue their statutory remedies also cannot be prejudiced. The statutory authorities were called upon to look into the information. Such course of action was adopted by the Hon ble Supreme Court when the Petitioner brought before them certain information. The Hon ble Supreme Court did not directly issue any specific direction to the private parties, but only called upon the statutory authorities to look into the information brought forth by the Petitioner - Pursuant to information supplied by the Petitioner in respect of the Respondent No. 5- Mercedes, the Director of Revenue Intelligence and the Customs Authorities have looked into the matter and have not found any violation. Even if they do, the methodology and procedure under the governing statute will have to be followed. The Petitioner, who claims to be an informer, has filed these proceedings himself against the private Respondents and the statutory authorities. The dispute between the private Respondent and the statutory authorities, if any, will be resolved through the mechanism provided under the governing statute. We are not inclined to grant any special status higher than that of an informer like any other citizen to the Petitioner. No case is made out of any collusion or mala fides on the part of the statutory authorities. Such collusion and mala fides cannot be casually intended and must be substantiated. Merely by raising suspicion about the merits of the stand taken by the Director of Revenue Intelligence and the Customs Authorities, directions cannot be issued against the private Respondents and the Director of Revenue Intelligence. If such casual assertions are accepted and the directions are given on the basis that the Director of Revenue Intelligence and the Customs Authorities, who are represented through the learned Additional Solicitor General, have colluded with the private Respondents, then it would be a serious matter on the part of these Respondents and their officers. Without any material, therefore, such observations and directions cannot be issued. It is clear that valuation and pricing of these cars is a complex matter and is governed by various factors. Therefore, the Special Valuation Cell is also set up which consists of experts. As regards the Petitioner s expertise in the subject, we have not been shown anything to demonstrate the same. Having called upon the Customs Authorities and the Director of Revenue Intelligence to look into the information supplied by the Petitioner, the matter cannot be taken forward in writ jurisdiction. Therefore, there are no material before us to reach a conclusion that the Director of Revenue Intelligence and the Customs Authorities have deliberately not looked into the information supplied by the Petitioner. This Court cannot in a writ jurisdiction give any direction in respect of future imports. The Petitioner himself as an informer cannot abuse the status granted by this Court to convert this litigation into a witch hunt against the private Respondents. Thus, on the basis of material supplied by the Petitioner, substantial investigation has taken place, substantial judicial time has been spent upon the same and the proceedings cannot go on merely because the Petitioner insists that they should go on - petition dismissed.

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• 2024 (10) TMI 1077
  Levy of penalty u/s 117 of the Customs Act - petitioner was denied a reasonable opportunity of being heard - Violation of principles of natural justice - HELD THAT:- The petitioner has placed on record the communications of 21-12-2023 and 1-1-2024 requesting for an adjournment of the proposed hearing. In fact, by communication dated 1-1-2024, through his counsel, the petitioner requested that the hearing be scheduled on any date except 5-1-2024 in the post noon session. The impugned order was issued on 5-1-2024. Undoubtedly, the petitioner was not provided a reasonable opportunity. In addition, on examining Section 117 of the Customs Act, it is found that the sum of Rs. 4,00,000/- is the ceiling with regard to imposition of penalty, whereas, in the impugned order, a penalty of Rs. 5,00,000/- was imposed under Section 117. This is clearly unsustainable. For reasons set out above, the impugned order is quashed insofar as it imposes a penalty of Rs. 5,00,000/- on the petitioner - the matter is remanded for reconsideration - petition disposed off by way of remand.

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• 2024 (10) TMI 1076
  Confiscation - foreign marked gold bars - burden to prove - legitimate source - Adequacy of evidence and documents presented by the appellant - Evaluation of the defense presented by the appellant - HELD THAT:- The entire case is based on interception of certain consignments in the Air Cargo Complex, Hyderabad which were being carried by the Courier companies. In the case of the appellant also it is apparent from the record that there has not been any document produced by the courier company or the representative of the appellant at the time of seizure. The entire case has been decided by the Adjudicating Authority in a very cryptic manner without going into detail as far as the defence taken by the appellant is concerned. One of the major point which appellants have claimed is that the gold in question was procured from legitimate source and was being sent as a legitimate business transaction. This aspect has not been adequately dealt with by the Adjudicating Authority and a very cryptic remark has been made at para 31(ii) Mr Mohammad Abdul Razzak also not submitted any documentary evidence . Therefore, order appears to have been passed in a bald manner, without following principles of natural justice. The Commissioner (Appeals) has found no reasons to disagree with observations made by Original Authority at para 36 holding invoices and documents produced being created one and afterthought to cover up them illicit act of processing foreign gold. He also observed that Assessee has certified it as foreign gold - the evidence given under statement could not be brushed aside that being sufficient evidence to the contrary and therefore, Commissioner (Appeals) has also not given detailed reasons as to why Original Adjudicating Authority observation was correct. In the interest of justice and having regards to the facts of the case, the matter is remanded back to the Original Adjudicating Authority - The Adjudicating Authority should decide this matter by way of speaking order within a period of 3 months subject to appellants providing necessary documents and appearing for personal hearing on the date(s) fixed by the Adjudicating Authority. Appeal allowed by way of remand to Original Adjudicating Authority.

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• 2024 (10) TMI 1075
  Classification of imported goods - di-methyl lauryl amine (DMLA) - advance authorisation scheme - to be classified under heading 3402 of First Schedule to Customs Tariff Act, 1975 or not - HELD THAT:- It is abundantly clear from note 3 of chapter 34 of First Schedule to Customs Tariff Act, 1975 that there are physical characteristics of surface active agent that may be ascertained. The ascertainment was questioned for bona fides by the noticee, including the conducting of the prescribed tests. The same taint was attached by the adjudicating authority to the reports submitted during that proceedings. It cannot be known for certain that the tests were, acceptably, validated. It was merely the advantages of one over the other that was cited before the adjudicating authority. The call to the adjudicating authority was not to adjudge between the two perceptions but to obtain an acceptable, unbiased report. Such a report, if enlightening upon the samples being surface-active agent , would have served the purpose and the doubts raised by the noticee are not, in the light of demonstrated interpretation, to be disregarded casually. A validated test would have served to decide upon the correctness of the classification and also to enlighten others faced with such quandary. The exactitude and rigour of the test is in doubt and, with the test reports furnished by the noticee not having been considered except peripherally, it would be appropriate to send for a further test. This is inescapable as the Hon ble Supreme Court, in Hindustan Ferodo Ltd v. Collector of Central Excise [ 1996 (12) TMI 49 - SUPREME COURT ], has held that It is not in dispute before us as it cannot be, that onus of establishing that the said rings fell within Item No. 22-F lay upon the Revenue. The Revenue led no evidence. The onus was not discharged. Assuming therefore, the Tribunal was right in rejecting the evidence that was produced on behalf of the appellants, the appeal should, nonetheless, have been allowed. The benchmark in note 3 of chapter 34 of First Schedule to Customs Tariff Act, 1975 must not only be there in the test results but must be shown to have been undertaken - To fulfill that requirement, it is necessary to set aside the order for fresh adjudication after considering the test results. Considering the minuteness of the issues involved, it is inconceivable that the two officials could have deliberately applied their mind to weave a conspiracy that avoids a residuary description while adopting a description that has some undeniable connection with the impugned goods to avail the benefits that accrued. The penalties on them are, clearly, not sustainable. The penalties on the individuals are set aside - the dispute remanded back to the original authority for a fresh adjudication.

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• 2024 (10) TMI 1074
  Rejection of appeal - alleged failure to furnish documentation, such as bills of entry, duty payment challans - evidence of bar of unjust enrichment of Customs Act, 1962 - refund claim for differential duty on import of LCD panels - HELD THAT:- The dispute over classification is not required to be resolved by the Tribunal or any lower authority for, as on the date of filing of the claim, the decision of the Tribunal in re Videocon Industries Ltd [ 2009 (2) TMI 814 - CESTAT MUMBAI] had held against the customs authorities even as far back as the date of import. There is no doubt that excess collection of duties of customs had been enforced at the time of import with no regard to the decision. Compounding that lack of judicial discipline, the claim for refund was disposed off on procedural grounds of non-furnishing of documents required to process the claim and upheld for no further reason than that the obligation under section 27A of Customs Act, 1962 devolve interest liability. That a tax administration, bound by a statute, woke up to the consequences of keeping an application pending beyond three months after corresponding for over a year and half about the incompleteness thereof and deployed such jeopardy as cause for not awaiting compilation of the documentation by the appellant is strange indeed. The compulsions of the appellant are all too apparent. Fastened with a duty liability contrary to judicial determination by the Tribunal, and deprived of order issued under section 17(5) of Customs Act, 1962, which could have been cause of action to initiate appellate recourse combined with not being a disputant in the appeal pending before the Hon ble Supreme Court on the very classification, and the possibility of limitation in section 27 of Customs Act, 1962 kicking in, an application for refund within one year of payment of differential duty was the first and last option - the telescoped haste after the long initial dawdle did not occur to the first appellate authority as peremptory. Interests of justice predicate that the erroneous rejection on procedural grounds be invalidated - the impugned order is set aside - application restored to the original authority for enabling the appellant to make good all deficiencies and for the application to be considered afresh in accordance with settled law relating to classification.

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• 2024 (10) TMI 1073
  Classification of goods - sewing machine needles - to be classified under sub-heading 8452 30 of First Schedule to Customs Tariff Act, 1975 or under tariff item 8448 5190 of First Schedule to Customs Tariff Act, 1975? - rejection of declared value - Applicability of anti dumping duty (ADD) - HELD THAT:- While the specifics of liability to anti dumping duty on enumerated description within a broad, and undisputed, description, at the heading or sub-heading level, may turn on expert opinion, disputed classification would be validated only in accordance with the interpretative rules, as enacted, and principles, as judicially determined. It is found that the terms of remand have not been complied with by the original authority and, to the extent that it was upheld in the impugned order, was not evaluated by the first appellate authority. Thus, there are no option but to set aside the impugned order and direct the original authority to adjudicate the matter afresh, in toto, in the light of the test report, after giving an opportunity for cross-examination as sought by the importer, and discharge of onus by customs authorities. Appeal allowed by way of remand.

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• 2024 (10) TMI 1072
  Refund of integrated goods and service tax (IGST) - contravention of N/N. 29/2015-20 dated 21st September 2017 - onus to prove - specific pleas taken before the original authority that were found to be unacceptable in the impugned order are that the SCOMET regime is intended to cover fermenters of particular specifications as well as certain specified components thereof which theirs were not - HELD THAT:- The adjudicating authority has taken a superficial view of the impugned goods to hold those to be subject to restrictions under the Foreign Trade Policy (FTP). The Foreign Trade Policy (FTP) is designed by the Directorate General of Foreign Trade (FGFT) under the authority of Foreign Trade (Development and Regulation) Act, 1992 with the customs authorities playing an agency role in enforcement thereof. In matters such as SCOMET regime, which, if wrongly applied and indiscriminately, could defeat the purpose of trade promotion and, involving technologies specified in international conventions, customs authorities should necessarily have obtained authoritative opinion from the licensing authority. The assumption of the adjudicating authority that the restrictions were amenable to broadbanding, and that too in a restrictive regime, is an incorrect perspective on licensing rules and regulations - It is unable to fathom the scope for preponderance of probability , which relates to discharge of onus to establish goods as not smuggled or in application of evidence, for varying the requirements of customs law to goods which, admittedly, had been declared and made available for examination at the time of export. From the manner in which the adjudicating authority has dealt with the proposition in the show cause notice, as well as disregard of the defence put up by the noticees, it would appear that the requirements of factual ascertainment in adjudication and pre-requisite for visiting penalties has not been followed. In view of the failure to discharge such responsibility, the impugned order is set aside and the matter remanded back to the original authority for reference to the licensing authority for their opinion on applicability of the SCOMET regime and to dispose off the show cause notice in accordance with such reports after considering the defence if any, put up by them. The appeals are allowed by way of remand.

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• PMLA

• 2024 (10) TMI 1071
  Maintainability of petition - availability of alternative remedy of appeal - Seeking to issue a Writ of Certiorari by calling for the records - Money Laundering - scheduled offences - attachment of the immovable property - HELD THAT:- Admittedly, in the instant case, on the complaint filed by the competent authority under sub-section (5) of Section 5 of the PML Act, the Adjudicating Authority i.e, respondent No.4 in exercise of powers conferred under sub-Section (3) of Section 8 of the PML Act, has passed the impugned order dated 30.09.2022 in Original Complaint No. 1738 of 2022 confirming the Provisional Attachment order No.11 of 2022 passed by respondent No.3 and against the said order, an appeal lies under Section 26 of the PML Act. In the case of United Bank of India v. Satyawati Tondon [ 2010 (7) TMI 829 - SUPREME COURT] the Hon ble Apex Court laid down the following principles for entertaining the writ petitions, when alternative remedy is available. In the case of PHR Invent Educational Society vs. UCO Bank and others [ 2024 (4) TMI 466 - SUPREME COURT (LB)] the Hon ble Apex Court while reiterating the principles laid down above, has observed that the High Courts will not entertain a petition under Article 226 of the Constitution of India if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance. In the instant case, in view of the complicated issues involved in this writ petition, which require determination basing on the evidence, and as the petitioner is having alternative remedy of statutory appeal under Section 26 of PML Act, taking into consideration the aforesaid judgments rendered by the Hon ble Apex Court, this Court is of the opinion that ends of justice would be met, if the petitioner is relegated to file an appeal under Section 26 of the PML Act before the Appellate Tribunal. This Writ Petition is disposed of relegating the petitioner to file appeal before the Appellate Tribunal and on filing such appeal, the Appellate Tribunal shall examine and dispose of the same, in accordance with law, as expeditiously as possible. There shall be no order as to costs. Petition disposed off.

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• Service Tax

• 2024 (10) TMI 1070
  Refund of service tax paid under Reverse Charge Mechanism (RCM) - rejection on the allegation that there was no provision which allowed refund of service tax paid under RCM - substantive right of the appellant to avail CENVAT Credit - Interpretation of Section 11B of the Central Excise Act, 1944, and Section 142(3) of the CGST Act, 2017 - HELD THAT:- There are no relevance of the decisions of tribunal relied by appellant in the matter as the issue has been authoritatively considered by Hon ble High Court of Jharkhand in the case of Rungta Mines [ 2022 (2) TMI 934 - JHARKHAND HIGH COURT] where it was held the petitioner on the one hand did not claim CENVAT Credit as per the procedure established by law under the existing law and on the other hand violated the provisions of law while filing his service tax returns and claimed the amount as input service and thereafter filed his petition for refund on 28.06.2018 referring to Section 142(3) of the CGST Act. The petitioner never had a right to claim refund under the existing law and had failed to exercise their right to claim CENVAT Credit as per law and wrongly claimed the impugned amount as credit in Service Tax Return (S.T. 3 return). Appellant placed reliance on the decision of Hon ble Bombay High Court in case of Combitic Global Caplet Pvt Ltd [ 2024 (6) TMI 498 - BOMBAY HIGH COURT] and Simbhaoli Sugar Ltd.[ 2024 (8) TMI 7 - CESTAT ALLAHABAD] - these decisions have not been rendered in respect of the amounts which became due to the concerned parties prior 30.06.2017. Thus these decisions are clearly distinguishable and do not support the case of the appellant. There are no merits in the appeal - appeal dismissed.

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• 2024 (10) TMI 1069
  Interpretation of statute - Section 35A of the Central Excise Act and Section 85 of the Finance Act, 1994 - power of Commissioner (Appeals) to remand the matter back to the original adjudicating authority - HELD THAT:- The powers of Commissioner (Appeal) in the matters relating to the Appeal, filed before him under the Central Excise Act, 1944 and under Finance Act, 1994 are identical. Subsection (5) of Section 85, make these powers co-terminus with the powers available under the Central Excise Act, 1994. In view of the Section 35A of CEA, the learned Commissioner (Appeals) is mandated to make such order as he deems just proper, confirming, modifying or annulling the decision or order appealed against. In view of the above said provisions it is deemed to remand the matter to be decided by the learned Commissioner (Appeals) instead of remanding it back to the Original Authority. The said observation is made in interest of justice for the reason that by remanding the matter back to original authority the appellant is forced into another round of litigation at the level of adjudicating authority, which could be avoided and which was the objective of amendments made in Section 35A of the Central Excise Act, 1944 by the Finance Act, 2001. Matter remanded back to the learned Commissioner (Appeals) for a decision within three months from the date of this order - appeal allowed by way of remand.

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• 2024 (10) TMI 1068
  Classification of service - Mailing List Compilation and Mailing Service or not - sharing of the CAT score by the appellant-IIM, Kozhikode with the non-IIM institutions for admission of candidates in their institutions - HELD THAT:- Mailing List Compilation is the process of compiling business and consumer mailing lists into a database. The appellant does not compile any information for the non-IIM institutions, the appellant only shares the CAT score obtained by the candidate in the examination conducted by them and only shares this information available with them and they do not compile any information from any other source. Further, it is found that they do not provide any services of sending documents, materials, information or any other goods by addressing, stuffing, sealing, metering or mailing the envelope or packet for or on behalf of the non-IIM institutions, therefore they are not a mailing company des-patching the goods to the customers. The activity of sharing of CAT score by the appellant with the non-IIM institution does not fall under the service category of Mailing List Compilation and Mailing Service , hence, the demand of service tax along with interest and imposition of penalties on the appellant are not sustainable and deserves to be set aside. Appeal allowed.

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• 2024 (10) TMI 1067
  Refund of service tax - whether the appellant is liable to pay service tax on the service of clinical trial on drugs for the foreign service recipient? - whether the service is export service or otherwise and liable to service tax? - HELD THAT:- The issue is no longer res-integra as the same issue in the appellant s own case vide Final Order No. 11772/2024 dated 14.08.2024 [ 2024 (8) TMI 1333 - CESTAT AHMEDABAD] has been decided considering various precedent judgments, in their favour that the service of clinical trial provided on the drugs supplied by the foreign service recipient is export of service and is not taxable, therefore the activity in the present case is not liable to service tax. Therefore, the demand in the present assessee s appeals is not sustainable. The Revenue has sought to reject the refund claims on the same ground that service is not export of service. Since this Tribunal has already taken a view that the very same service is export of service therefore, Revenue s appeals are not sustainable hence the same are liable to be dismissed. Assessee s appeals are allowed.

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• 2024 (10) TMI 1066
  Classification of service - intellectual property rights service or not - supply of technical drawing and other documents - extended period of limitation - HELD THAT:- The said issue has been examined by this Tribunal in the case of M/S. HOOGHLY MET COKE POWER CO. LIMITED VERSUS COMMISSIONER OF SERVICE TAX [ 2024 (8) TMI 611 - CESTAT KOLKATA] wherein it was held The designs and drawings have been considered as goods at the time of importation and customs duty has already been paid on the same. Hence, we hold that the imported drawings and designs cannot be considered as taxable service under the category of intellectual property services . Accordingly, we hold that the demand of service tax on the drawings and designs supplied by SSIT under the category of intellectual property services in the impugned order is not sustainable. Thus, no Service Tax is payable by the appellant under the category of intellectual property rights service for supply of industrial drawings and other technical documents which have been imported by the appellant by filing of bills of entry and by payment of appropriate customs duty thereon. The impugned order deserves no merits and accordingly the same is set aside - Appeal allowed.

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• 2024 (10) TMI 1065
  Classification of service - mining services or not - providing composite service in relation to mining i.e., rock breaking work, conversion of ores to different sizes, shifting / transportation of lumps and ores, removal of ROM, etc. - Non-payment of service tax of differential value of services provided during the relevant period - extended period of limitation. HELD THAT:- It is apparent from the record that, whichever activities fall under the taxable net i.e., cargo handling service and mining service, the appellant is paying Service Tax and the same has been accepted by the authorities below during the impugned period. The appellant is not paying service tax on transportation of coal within the mine, along with loading and unloading, on the presumption that the said activity falls under goods transportation agency service and Service Tax thereon is payable under reverse charge mechanism by the service recipient and therefore they would not be liable to pay service tax. In this case, from the work orders, it is indicated that the appellant has to provide only transportation of coal from pithead to other places within the mine, or up to railway siding, along with incidental loading and unloading, which has been ignored by the authorities below. It is found that the said particular activity undertaken by the appellant does not fall under the category of mining service . Therefore, the said service is taxable under the category of transportation service, as has been held by this Tribunal in the case of M/s. Maa Kalika Transport Pvt. Ltd. [ 2023 (7) TMI 435 - CESTAT KOLKATA] wherein this Tribunal observed service is provided in relation to transportation in such cases are based on if any ancillary/intermediate of goods, and the charges, if any, for such services are included in the invoice issued by the GTA, and not by any other person, such service would form part of GTA service and, therefore, the abatement of 75% would be available on it. - the appellant are not liable to pay service tax under the category of mining service . Only the differential amount between Profit Loss Account / balance sheet and S.T.-3 Return was sought to be demanded and whole of the amount pertains to transportation of coal within mining area along with loading and unloading. Therefore, the said activity falls under the category of transportation service, in these circumstances, no demand is sustainable against the appellant. Extended period of limitation - HELD THAT:- The impugned Show Cause Notices have been issued to the appellant by invoking the extended period of limitation. The demands falling under extended period of limitation are not sustainable against the appellant in the facts and circumstances of the case. Therefore, appellant succeeds on limitation also. The fact that post 30th June 2012, the negative list regime came into force; however, the demand has not been made under the negative list but proposed to be confirmed under mining service - the said demand is not sustainable under the category of mining service for the period post 30th June 2012 - the Service Tax demands against the appellant are not sustainable. The impugned orders are set aside - appeal allowed.

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• 2024 (10) TMI 1064
  CENVAT Credit of service tax paid - transportation services used for transportation of household goods of its employees - travel/ journeys performed by the employees - services used for transportation, procurement and filling of diesel - Prefabricated buildings used as shelters - Extended period of limitation. CENVAT Credit on services used for transportation of household goods of employees - HELD THAT:- It is seen that during the period under dispute, the definition of the term input services was very wide and it covered all the input services used in or in relation to the business. Thus, it is observed that CENVAT Credit availed on services used for transportation of household goods of employees, are input services for the appellant and they are eligible for the credit of service tax paid on such transportation services. Similarly, service tax credit availed on transportation services for travel of employees for official purposes like business meets, sales advertisement campaigns, etc., are also meant for furtherance of business. Hence, the CENVAT Credit availed on such services is also eligible as input service . There are no more res integra as the Tribunal, Bangalore in the case M/S. ROBERT BOSCH ENGINEERING BUSINESS SOLUTIONS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX BANGALORE-LTU [ 2016 (12) TMI 812 - CESTAT BANGALORE] has allowed the credit on such services as input services . CENVAT Credit on travel/journeys performed by employees for business purposes - CENVAT Credit on services used for transportation, procurement, and filling of diesel for DG sets at cell sites - HELD THAT:- During the underlying period, the Appellant have outsourced the said activity of performing Operations Maintenance to service providers who were responsible to ensure upkeep of cell site including the DG sets . Diesel is always required for the running the DG sets. Thus, as a part of providing operations maintenance services, the service providers procured, transported and filled diesel in the DG sets to ensure their continuous operation and sustenance of the cell site. On such activity of procurement, transportation and filling, the service providers charged service tax to the Appellant under the head Business Support Services. It is observed that at the cell site, uninterrupted power supply is required to effectively provide telecommunication services to the subscribers - the said services are input services for the Appellant for rendering their output services. In view thereof, the appellant are eligible for the CENVAT Credit availed on these input services . CENVAT Credit on prefabricated buildings used as shelters, treating them as capital goods - HELD THAT:- The subject goods i.e., tower materials, shelters of steel structure, etc,. received by the Appellant are accessories to Base Transceiver Station (BTS), which falls under heading Chapter 85 of Central Excise Tariff Act, 1985 (CETA). It is seen that BTS is one of the core parts of the cell site i.e. telecom infrastructure. The main function of BTS is to transmit and receive the global system of mobile communication for transmitting and receiving frequency. Shelters and other components together makes the telecom infrastructure in a workable condition, thus this equipment used for setting up of telecom infrastructure along with BTS becomes accessories to the BTS. Thus, CENVAT Credit on such towers and shelters are admissible to the Appellant under Rule 2(a)(A)(iii) of the CENVAT Credit Rules as an accessory to BTS - the said goods qualify as capital goods eligible for credit to the Appellant, in terms of Rule 2 (a)(A)(i) of the CENVAT Credit Rules. Extended period of limitation - HELD THAT:- The suppression of facts or mala fide intent is required to invoke the extended period of limitation. In this case, there is no evidence brought on record to substantiate the allegation of suppression with intention to evade the payment of tax. Accordingly, the extended period of limitation is not invokable in this case. Since, the principal demand itself is not sustainable, the demands of interest and imposition of penalty do not arise and hence the same is set aside. The appeal is allowed.

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• 2024 (10) TMI 1063
  Wrongful availment of CENVAT Credit - capital goods - Dumpers - Tippers - Availment of full CENVAT Credit on capital goods instead of 50% in the first year and the balance 50% in the second year in contravention of Rule 4(2)(a) of the CCR - Availment of CENVAT Credit twice on the strength of the same invoice. Alleged wrongful availment of CENVAT Credit on capital goods namely Dumpers and Tippers - HELD THAT:- With regard to availment of CENVAT Credit on dumpers and tippers, the issue is no longer res integra in terms of the decision of this Tribunal in the case of CCE, CCG ST, DELHI III VERSUS M/S BHARMAPUTRA INFRASTRUCTURE LTD. [ 2018 (7) TMI 438 - CESTAT NEW DELHI] wherein this Tribunal observed Dumpers/Tippers are vehicles which are specially designed for earth moving purposes and are meant to be used in the mining area. In terms of the decision of Hon ble Supreme Court (supra) they are not to be considered as motor vehicles. Consequently, the appellant would be eligible for Cenvat credit on dumpers / tippers as inputs which are used for providing the output service. However, the controversy stand resolved with effect from 22/06/2010 with issue of notification No. 25/2010-CE which has amended the Cenvat Credit Rules to allow Cenvat credit for dumpers / tippers registered in the name of service provider for providing taxable service for providing site formation etc. Availment of full CENVAT Credit on capital goods instead of 50% in the first year and the balance 50% in the second year in contravention of Rule 4(2)(a) of the CCR - HELD THAT:- Although in terms of Rule 4(2)(a) of the CENVAT Credit Rules, 2004, CENVAT Credit is available on capital goods - 50% in the first year of procurement of capital goods and the remaining 50% in the next year, the appellant availed the CENVAT Credit in the first year itself but was maintaining sufficient account in their CENVAT Credit Account. Therefore, in the light of the decision of the Hon ble Karnataka High Court, in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT] , Wherein it has been held that if an assessee is maintaining sufficient balance in their CENVAT Credit account, there is no requirement to pay interest for the intervening period. Admittedly, in this case, the appellant was maintaining sufficient balance in their CENVAT Credit account - Therefore, they are not required to pay interest for the intervening period. Availment of CENVAT Credit twice on the strength of the same invoice - HELD THAT:- From the invoices shown above, it is evident that these are two separate invoices are of same amount on which the appellant has taken the CENVAT Credit. Therefore, the appellant has not taken CENVAT Credit twice on the same invoice - The allegation made in the Show-Cause Notice is not sustainable. Consequently, no demand is sustainable on account of double availment of CENVAT Credit account by the appellant. Thus, no demand is sustainable against the appellant - no penalty is imposable on the appellant - the impugned order is set aside - appeal allowed.

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• 2024 (10) TMI 1062
  Liability to pay Service tax under the category of goods transport agency service on reverse charge basis - services provided without issuance of a consignment note - Extended period of limitation - HELD THAT:- The said issue is no more res integra as the same stands decided by this Tribunal in the case of South Eastern Coal Fields Ltd. v. Commissioner of Central Excise, Raipur [ 2016 (8) TMI 677 - CESTAT NEW DELHI] wherein it has been held It is clear that to be called goods transport agency a person should fulfill two conditions, namely, he should provide service in relation to transport of goods by road and issue consignment note, by whatever name called. In the present case, admittedly, no consignment note was issued by the goods transporter. The original authority held that the slip/challans issued for monitoring purposes by the appellant (receiver of service) will satisfy such conditions and tax liability can be upheld. The appellant has not issued any consignment note . Once it is established that there is no document issued by the transporter in the nature of consignment note , the transportation activity cannot be termed as Goods Transport Agency service received by the Appellant - the demand of service tax from the Appellant under Goods Transport Agency service on reverse charge basis is not sustainable - the demand of service tax confirmed in the impugned order set aside - Since the demand itself is set aside, the question of imposition of any penalty does not arise. Therefore, the penalties imposed are set aside. Extended period of limitation - HELD THAT:- It is observed that extended period of limitation is not invokable, as there is no suppression of facts with intention to evade the tax established in this case. It is found that the Department was in knowledge of the entire facts. It is also observed that the appellant had specifically requested for clarification from the Department vide its letter dated 06.07.2009 on the taxability of the transaction under goods transport agency service. Thus, most of the demand confirmed in the impugned order is not sustainable on the ground of limitation also. The impugned order is set aside - appeal allowed.

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• 2024 (10) TMI 1061
  Cash refund of CENVAT Credit in terms of Section 142(9)(b) of the C.G.S.T. Act - time limitation - violation of principle sof natural justice - HELD THAT:- The issue involved in this matter has been examined by the Tribunal in the case of M/S. CIRCOR FLOW TECHNOLOGIES INDIA PRIVATE LTD. VERSUS PRINCIPAL COMMISSIONER OF GST CENTRAL EXCISE, COIMBATORE [ 2021 (12) TMI 675 - CESTAT CHENNAI] , wherein this Tribunal examined this issue and observed In the present case, there is no allegation that the credit is not eligible to the appellant. It is merely stated that tax has been pald voluntarily and therefore credit is not available under the GST regime. Though credit is not available as Input Tax Credit under GST law, the credit under the erstwhile Cenvat Credit Rules is eligible to the appellant. Such credit has to be processed under Section 142(3) of GST Act, 2017 and refunded in cash to the assessee. It is found that in this case also, the appellant paid the license fees on 17th March, 2017, when the erstwhile provisions of service tax was in force, but reversed the credit on 26th September, 2017 and October 2017. We observe that the issue of timelimit has been examined by this Tribunal in the case of OSI SYSTEMS PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX RANGAREDDY - GST [ 2022 (9) TMI 801 - CESTAT HYDERABAD] wherein this Tribunal found that for transitional provisions under Section 142(3) of the C.G.S.T. Act, the limitation has been done away with and only thing required for refund is whether, under the facts and circumstances of the said case, unjust enrichment is attracted or not. In this case also, the refund claim has been rejected as time barred. The only issue to be seen is whether bar of unjust enrichment is applicable to the facts of this case. In that circumstances, the impugned order is set aside and the appeal is allowed, with a direction to the adjudicating authority to entertain the refund claim filed by the appellant on its own merits. The appeal is disposed of.

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• 2024 (10) TMI 1060
  Refund of service tax - interest on delayed sanction of the refund - time limitation - relevant date - Section 11B of the Central Excise Act, 1944, made applicable to service tax matter under Section 83 of the Finance Act, 1994 - Recovery of erroneously sanctioned refund - HELD THAT:- On reading of both Section 11B of the Act of 1944 and Section 103 of the Act of 1994, it transpires that the time line has been prescribed therein for consideration of the refund application filed by the assessee. Where the statute has prescribed a particular time limit, then the authorities functioning under such statute cannot alter such time line, in order to adopt some other time frame for consideration of the refund application. Various aspects for claim of refund under the indirect tax statutes have been elaborately discussed by the Constitutional Bench of the Hon ble Supreme Court in the case of Mafatlal Industries Ltd. and Others Vs. Union of India and Others [ 1996 (12) TMI 50 - SUPREME COURT] . The Hon ble Apex Court have categorized the claim of refund broadly into three heads i.e., (i) unconstitutional levy; (ii) illegal levy; and (iii) tax paid under mistake of law. Since, the appellants had filed the refund claim in the form and manner prescribed under Section 11B of the Act of 1944, the provisions contained therein alone have the application and accordingly, the department had acted upon, based on such statutory provision in disposal of such refund applications. Thus, since the appellants had not filed the refund applications within the stipulated time frame of one year , rejection of the claim amounting to Rs.6,13,77,646/- by the learned Commissioner (Appeals) is in consonance with such statutory provisions. In view of the fact that the refund application filed by the assessee-appellants in the year 2017 was now being considered for refund, which is much beyond the statutory time frame of three months, the assessee-appellants should be entitled for claim of interest for the period, to be computed from expiry of three months from the date of filing of refund applications, till sanction of the refund amount. Since, the exercise for quantification of interest is required to be done at the original stage, the matter should go back to the original authority, for the limited purpose of such quantification only. Appeal allowed by way of remand.

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• Central Excise

• 2024 (10) TMI 1059
  Rebate / refund of sum so wrongly paid - Applicability of exemption notification No. 3/2006-CE for biscuits exported out of India - whether goods under consideration exported out of India answers the description of goods mentioned in column 3 of the notification? - HELD THAT:- The claim of the Petitioner is under Rule 18 of the Central Excise Rules, 2004, which provides that where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and on fulfillment of such procedure, as may be specified in the notification. Section 2(d) of the Central Excise Act, 1944 defines excisable goods to mean goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as being subject to a duty of excise and includes salt. Rule 2(d) of Cenvat Credit Rules, 2004 defines exported goods to mean excisable goods which are exempt. Clause 1 (1.2) of Part V of the CBEC s Excise Manual of Supplementary Instructions 2005 clarifies that in Rule 18 and in the notification allowing rebate, the expression export goods has been used, which refers to excisable goods (dutiable or exempted) as well as non-excisable goods. It is further clarified that the benefit of the input stage rebate can be claimed on the export of all finished goods, whether excisable or not - the contention of the revenue that the goods exported were exempted under Notification No. 3 of 2006 and the petitioner was not required to pay duty and consequently cannot claim a rebate under Rule 18 is contrary to the said clarification. Notification No. 19/2004 dated 6th September 2004 as amended from time to time under Central Excise Rule 18 providing for procedure, conditions and limitations for the grant of rebate of duty do not state that if the Petitioner has wrongly paid excise duty (assuming the department s contention on this is accepted), the rebate claim will not be considered. Mahindra and Mahindra [ 2015 (9) TMI 403 - BOMBAY HIGH COURT] was a case where the goods were exempt under a particular notification. In contrast, in the present case before us, we have already observed above that the goods cleared by the Petitioner export are not covered by exemption notification No. 3 of 2006. In the case of Mahindra and Mahindra, the claim was not made under Rule 18 of the Central Excise Act, 2002, whereas in the present case before us, the claim was made under Rule 18 of the Central Excise Rules - It is a well-settled position that the decision is rendered in the context of the facts before the Court. If the facts are different, then the ratio of the said decision cannot be applied to another case mechanically. The decision is an authority for what it actually decides, having due regard to the factual conceptus. The ratio is of the essence, and not every observation found therein nor what may appear to logically flow from the various observations in the judgment. Therefore, the decision relied upon by the Revenue in the case of Mahindra and Mahindra Ltd. does not apply to the facts of the Petitioner s case. The Revisional Authority s order is set aside - the Respondents are directed to grant and sanction the Petitioner s rebate claims - The Petition is allowed.

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• 2024 (10) TMI 1058
  Interpretation of Para 9.24 of Hand Book of Procedure 1997-2002 regarding bunching of products for DTA sale within the six-digit HS Code - Whether the Department can be permitted to raise eyebrows on the decision of the Development Commissioner? - HELD THAT:- In view of judgment in the case of Ginni International Ltd. [ 2001 (9) TMI 165 - CEGAT, COURT NO. IV, NEW DELHI] , which got the stamp of approval from the Apex Court coupled with the ratio decidendi in the case of Virlon Textile Mills Ltd [ 2007 (4) TMI 6 - SUPREME COURT] , it can be safely held that the revenue cannot go beyond or behind the decision of the Development Commissioner. It is unable to read any such power in Section 3 (1) of the Central Excise Act, 1944 and Rule 100 (A) of Central Excise Rules, 1944, which were relied upon by the learned counsel for the appellant. Thus, there are no reason to interfere in this appeal. The appeal fails and is hereby dismissed.

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• 2024 (10) TMI 1057
  CENVAT Credit - duty on process loss during job work - case of the department is that in the process there is loss and on such quantity of process loss the duty is required to be paid - HELD THAT:- The issue in hand has been decided by this Tribunal in the various cases of the appellant itself. One of the decision which referred to earlier decision in the appellant s case M/S VOLTAMP TRANSFORMERS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, VADODARA [ 2013 (2) TMI 337 - CESTAT AHMEDABAD] where it was held that In the present case, the loss on account of waste and scrap is only 2% which has not been argued to be unreasonable by the Revenue. It is also not the case of the Revenue that waste and scrap generated has been clandestinely removed or that no waste and scrap is generated at all in the processes undertaken by the Job worker of the appellant. There is also no binding clause in Rule 4(5)(a) of CENVAT Credit Rules, 2004 that any loss of inputs by generation of waste and scrap has to be compensated by reversing equivalent credit taken on the virgin metal. The impugned order is set aside and appeal is allowed.

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• 2024 (10) TMI 1056
  Valuation of Barges - CENVAT Credit - violation of Rule 3 of Cenvat Credit Rules 2004 in the month of 2012 on the ground that input and input service were received in the factory before the manufacture and obtaining registration. Whether the valuation of barges manufactured by the appellant is correct on the basis of value declared in the insurance policy or the value adopted by the appellant in terms of Rule 8 on the basis of costing method based on their ledger and books of account? - HELD THAT:- The appellant have valued the barges manufactured by them as per Rule 8 of Central Excise Valuation Rules, 2000 for the reason that barges were not sold but used captively by the appellant for providing output service. In this fact, the valuation has to be done correctly under Rule 8 on Central Excise Valuation Rules, 2000. The revenue sought to value the goods on the basis of value declared in insurance policy. We find that there is no provision for taking the value shown in the insurance policy particularly in the fact of the present case as submitted by the appellant the value shown in the insurance policy has so many addition such as Ship stores and other addition in the barge post manufacturing of the barges therefore the value shown in the insurance policy does not represent the correct value of the barges. As regard the appellant s computation of the value we find that there is a Chartered Accountant Certificate which is based on the ledger and books of account of the appellant where from the total cost of manufacture has been arrived at. There are nothing wrong in the method of valuation by the appellant particularly for the reason that the department has no basis to challenge such valuation and no evidence to contradict the value arrived by the appellant therefore we are of the view that the appellant have correctly arrived at the value of barges. Therefore the differential excise duty on the dispute of valuation will not be sustainable. Whether the availment of Cenvat credit on the input and input service used in the three barges manufactured by the appellant prior to manufacture of such barges and before obtaining the Central Excise registration is correct or otherwise? - HELD THAT:- There is no dispute that all the input and input service were used in the manufacture of barges therefore even though the same was received before manufacture and even before obtaining the Central Excise registration but so long the input and input service are attributed to the manufacture of barges Cenvat credit cannot be denied. Even the transition provision provided under Cenvat credit rules permits for such credit, accordingly we do not find any reason for denying the Cenvat Credit. Hence the appellant are legally entitled for the Cenvat credit and the duty payment made out of such Cenvat credit is correct and legal. There are no doubt that the valuation of barges manufactured by the appellant in terms of rule 8 of Central Excise Valuation Rules, 2000 is correct and legal. The department s attempts to apply the value declared in insurance policies are absolutely illegal and incorrect. Hence, the differential duty demand does not sustain. As discussed above the appellant have rightly availed the Cenvat credit in respect of input and input service used in the manufactured of said barges. Therefore the demand on both the counts that is on valuation as well as Cenvat credit is not sustainable. We find that the appellant have made out a very strong case on limitation also as the appellant have clearly declared about their availment of Cenvat credit as well as the valuation method to the department vide letter dated 16.05.2012 whereas the show cause notice for the period 01.03.2011 to 26.04.2012 were issued on 01.11.2016 and 28.06.2017. Both show cause notices are not sustainable on the ground of limitation also therefore the demand is not sustainable on merit as well as on limitation - the impugned orders set aside - appeal allowed.

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• 2024 (10) TMI 1055
  CENVAT Credit - non-maintenance of separate accounts for the exempted services i.e. trading activity for the period 01.04.2007 to 31.03.2011 - common input services - trading activities covered under exempted service by N/N. 13/2011-CE (NT) dated 31.03.2011 - time limitation - HELD THAT:- The demand under Rule 6(3) of Cenvat Credit Rules, 2004 was raised on the ground that there are some common input services on which credit has been availed which are also attributed to the trading activities which have been declared as exempted service under Notification 13/2011-CE (NT) dated 31.03.2011. It is found that firstly, the trading activity became exempted only w.e.f 01.04.2011, the contention of the revenue that it has a retrospective effect is absolutely illegal as per the settled law by the Apex court in the various judgments that wherever, any clarification is against the assessee the same will have prospective effect and cannot have retrospective effect. Secondly, merely by declaring a trading activity as exempted service under a deeming fiction, the same cannot have retrospective effect. Prior to the amendment of Notification No. 13/2011-CE (NT) whereby, the trading activity was made deemed exempted service, there was no clarity even with the department and therefore, the amendment was brought. Firstly, there was a bonafide belief that trading activity will not attract any demand under Rule 6 (3), secondly, in fact, there is absolutely no suppression of fact on the part of the appellant. The entire demand is liable to set aside on the ground of time bar alone - the impugned order is set aside - appeal is allowed.

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• 2024 (10) TMI 1054
  Admissibility of refund claim in terms of Section 11B of the Central Excise Act, 1944 - deposit made during the investigation under protest - time limitation - HELD THAT:- Reliance placeed by the Lower Authorities on the definition for relevant date as per Explanation B (ec) to Section 11B and seeking to reject on the ground of limitation by relying on the date of the order of adjudicating authority for determining period of limitation of one year from the date of that order of the Additional Commissioner dropping the demand is totally miss placed. This clause is applicable only if at any point of time this amount was appropriated as duty and had arisen as refund on account of any judicial order. This is also evident from the ER1 Return formats. There are no merits in rejection of the refund claim on the ground of limitation. Reliance placed in the impugned order on various decisions do not support the case of the revenue as these are the case where refund has arisen as a consequence of decision in the appeal etc. As per proviso to Section 11B (2) the amount of unspent deposit lying as balance in the Appellant s account current is to be refunded to the Appellant without being credited to the consumer welfare fund. Thus such an amount can never be hit by the provisions of unjust-enrichment in terms of specific exemption provided in respect of such claims. There are no merits in the impugned order - appeal allowed.

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• 2024 (10) TMI 1053
  Cenvat Credit - invoices issued by Merchant Exporter M/s. Shri Dutt India Pvt. Ltd. in relation to services provided for fulfilment of Minimum Indicative Export Quota - invoices issued by the U.P. Sugar Mills Cogen Association for Contribution to install Gateway System to ensure about the surplus power exported or imported by a unit over a period - interest - extended period of limitation. Admissibility of credit in respect of the contribution made by the appellant for installation of the gateway system - HELD THAT:- The issue is squarely covered by the decision of Hon ble Supreme Court in case of Maruti Suzuki Limited [ 2009 (8) TMI 14 - SUPREME COURT] wherein it was held that assessee was not entitled to CENVAT credit. In short, assessee is entitled to credit on the eligible inputs utilized in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to CENVAT credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors etc., which is sold at a price. - In light of the claim made by the appellant that they are reversing the credit on proportionate basis in respect of electricity wheeled out by them there are no merits in the impugned order to the extent it is in respect of denial of credit on this account. CENVAT credit in respect of service received from the merchant exporter - HELD THAT:- The findings recorded in the impugned order are agreed to the effect that these services had no relationship howsoever negligible with manufacturing activities undertaken by the appellant - the impugned order that the definition of input service was amended in 2011 to delete activities relating to business from the inclusive part of definition. Thus the definition has become more restrictive than what was interpreted by the Hon ble High Court. As no sort of nexus can be shown between the services received by the appellant from the Merchant Exporter, for fulfillment of export quota, by procuring and exporting the sugar of other manufacturers there are no merits in the contentions raised by the appellant on the ground of admissibility of this credit. These activities are more akin to trading of goods for export as have been held by the impugned order. Extended period of limitation - HELD THAT:- The bonafide belief pleaded by the appellant need to be established and cannot be said to exist in isolation. The fact that appellant has been availing the CENVAT Credit against the invoices of the Merchant Exporter was never disclosed to the department, nor the tripartite agreement dated 16.12.2015 between the appellant, Merchant Exporter and M/s Shayadri SSK Ltd., Yeshwantnagar, Distt Satara, Maharashtra was ever disclosed - the fact that appellant has taken credit against the invoices of Merchant Exporter in respect of invoices which were in respect of services which were in no way related to the manufacturing activities of the appellant was never disclosed to the department and suppressed from the departmental authorities at the time of filing the return. It has been held that the discovery of certain facts during the course of audit which are not available on the returns is an act of suppression for invoking the extended period of limitation - the extended period has been correctly invoked the penalty imposed under Rule 15 of CENVAT Credit Rules, 2004 read with Section 78 of Finance Act, 1994 and Section 11AC of the Central Excise Act, 1944 to the extent it is in respect of this demand cannot be faulted with. Interest - HELD THAT:- As the demand in respect of wrongly availed CENVAT Credit against the invoices of Merchant Exporters is upheld the demand of interest follows and cannot be faulted with. Appeal allowed in part.

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• 2024 (10) TMI 1052
  Valuation of Excise Duty - inclusion of 75% VAT/CST subsidy received from the State Government in the assessable value - HELD THAT:- The issue is no mere res integra. The Tribunal in the case of M/S. MAHINDRA STEEL SERVICE CENTRE LTD. VERSUS PRINCIPAL COMMISSIONER OF CGST CENTRAL EXCISE, BHOPAL (M.P.) [ 2023 (12) TMI 476 - CESTAT NEW DELHI] , has held that no Excise Duty is required for the VAT subsidy granted by the State Govt. This decision has been upheld by the Hon ble Supreme Court. The impugned order is set aside - appeal allowed.

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• 2024 (10) TMI 1051
  Utilization of Cenvat Credit available under Basic Excise Duty for payment of Education Cess and Secondary Higher Education Cess - time limitation - HELD THAT:- The issue is no more res-integra. This Bench in the case of M/S GODREJ CONSUMERS PRODUCTS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, SILIGURI AND M/S GERMAN REMEDIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, SILIGURI [ 2023 (9) TMI 58 - CESTAT KOLKATA] had relied on the judgment of Hon ble High Court of Guwahati in the case of UNION OF INDIA VERSUS KAMAKHYA COSMETICS PHARMACEUTICAL PVT. LTD. [ 2012 (7) TMI 902 - GAUHATI HIGH COURT] , and has held there was no bar to utilize Cenvat credit of Basic Excise Duty for payment of Education Cess. - Since the issue in the present case is identical. Respectfully following the decision of the cited case law, the appeal is allowed on merits. Time limitation - HELD THAT:- The issue is that of interpretation which got clarified only after the issue reaching the Guwahati High Court, the Department has not made out any case of suppression on the part of the Appellant. Therefore, the confirmed demand for the extended period stands set aside on account of time bar also. The appeal is allowed both on account of merit as well as on account of limitation.

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• CST, VAT & Sales Tax

• 2024 (10) TMI 1050
  Evasion of tax - person responsible for such evasion - whether the petitioner can be seen as person who sought to evade the tax payable in respect of the consignment of jewellery that was brought by him from Mumbai to Cochin? - HELD THAT:- Taking in isolation the fact that the petitioner had not covered the consignment that was brought by him from Mumbai to Cochin by a valid Form 8FA declaration as mandated under the Kerala Value Added Tax Rules, the Commercial Tax Authorities in the State were perhaps justified in assuming that but for the detection, the petitioner might have well evaded his tax liability by clandestinely selling the consignment of jewellery within the State of Kerala. The imposition of a penalty on him in that event would have been acceptable. In the instant case however, we find that it is admitted by the Commercial Tax Officer at the Check Post in Walayar that the very goods that were brought by the petitioner from Mumbai to Cochin were taken back in their entirety to Mumbai via Coimbatore. The document produced by the petitioner as Annexure IV along with the O.T. Revision sufficiently corroborates the said fact. As a matter of fact, there was no sale occasioned of the jewellery items brought by the petitioner from Mumbai to Cochin within the State of Kerala. Although at the stage of determining the penal liability of the petitioner under Section 67 of the Act, the State was justified in presuming that but for the detection/apprehension of the petitioner, the petitioner could well have evaded the tax due to the State, in the light of the subsequent events which clearly points to the petitioner not having actually sold any items within the State, and having taken the goods outside the State a lenient view in the matter of the imposition of penalty is called for. The O.T. Revision is disposed off.

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