Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 24, 2017
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
TMI SMS
Articles
News
Notifications
Customs
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51/2017 - dated
18-10-2017
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ADD
Revocation of the anti-dumping duties imposed on imports of Soda Ash from Russia and Turkey
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50/2017 - dated
18-10-2017
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ADD
Revocation of the anti-dumping duties imposed on imports of Soda Ash from China, European Union, Kenya, Pakistan, Iran, Ukraine and United States of America (USA)
DGFT
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36/2015-2020 - dated
20-10-2017
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FTP
Addition of Krishnapatnam port for import of new vehicles
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35/2015-2020 - dated
18-10-2017
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FTP
Amendment in Para 2.17 of the Foreign Trade Policy 2015-2020 on imports and Exports to Democratic People's Republic of Korea (DPRK) in terms of UNSC resolutions concerning DPRK.
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34/2015-2020 - dated
18-10-2017
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FTP
Amendments in Foreign Trade Policy 2015-20 -reg
GST - States
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G.O.MS. No. 462 - dated
16-10-2017
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Andhra Pradesh SGST
Amendment in the Notification No. G.O.Ms.No. 264, Revenue (Commercial Taxes-II), Dt. 29th June, 2017 - Amendment list of goods where excess ITC cannot be refunded; i.e., notifying that Excess ITC is not refundable for Corduroy Fabrics
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G.O.MS. No. 459 - dated
16-10-2017
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Andhra Pradesh SGST
The Andhra Pradesh Goods and Services Tax (Seventh Amendment) Rules, 2017.
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G.O.MS. No. 458 - dated
16-10-2017
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Andhra Pradesh SGST
Recommendations of the Council, deduct tax from the payment made or credited to the supplier of taxable goods or services or both.
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G.O.MS. No. 457 - dated
16-10-2017
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Andhra Pradesh SGST
Exempting casual taxable persons making taxable supplies of handi-craft goods from obtaining Registration.
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G.O.MS. No. 456 - dated
16-10-2017
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Andhra Pradesh SGST
Waiver of late fee on late filing of GSTR 3B for the month of July, 2017.
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F-10-76/2017/CT/V (132) - dated
25-9-2017
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Chhattisgarh SGST
CORRIGENDUM - Commercial Tax Department, No. 13/2017-State Tax (Rate) notification No. F-10-43/2017/CT/V (81), dated the 28th June, 2017,
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F-10-75/2017/CT/V (131)-29/2017-State Tax (Rate) - dated
25-9-2017
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Chhattisgarh SGST
Amendments in the Notification No. 5/2017-State Tax (Rate) notification No. F-10-43/2017/CT/V (73), dated the 28th June, 2017.
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F-10-75/2017/CT/V (130)-28/2017-State Tax (Rate) - dated
25-9-2017
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Chhattisgarh SGST
Amendments in the Notification No. 2/2017-State Tax (Rate) notification No. F-10-43/2017/CT/V (70), dated the 28th June, 2017.
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F-10-75/2017/CT/V (129)-27/2017-State Tax (Rate) - dated
25-9-2017
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Chhattisgarh SGST
Amendments in the Notification No. 1/2017-State Tax (Rate) notification No. F-10-43/2017/CT/V (69), dated the 28th June, 2017.
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F-10-74/2017/CT/V (128)-26/2017-State Tax (Rate) - dated
23-9-2017
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Chhattisgarh SGST
Exemption intra state supply of heavy water and nuclear fuels Department of Atomic Energy to the Nuclear Power Corporation of India Ltd from the whole of the State tax.
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F-10-74/2017/CT/V (127)-25/2017-State (Rate) - dated
23-9-2017
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Chhattisgarh SGST
Amendments in the Notification No. 12/2017-State Tax (Rate) notification No. F-10-43/2017 CT/V (80), dated the 28th June, 2017.
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F-10-74/2017/CT/V (126)-24/2017-State Tax (Rate) - dated
23-9-2017
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Chhattisgarh SGST
Amendments in the Notification No. 11/2017-State Tax (Rate) notification No. F-10-43/2017/CT/V (79), dated the 28th June, 2017.
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F-10-73/2017/CT/V (124)-33/2017-State Tax - dated
15-9-2017
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Chhattisgarh SGST
Recommendations of the Council deduct tax from the payment made or credited to the supplier of taxable goods or services or both.
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F-10-73/2017/CT/V (123)-32/2017-State Tax - dated
15-9-2017
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Chhattisgarh SGST
Exemption on "Handicraft Goods."
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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States has no power to detain the goods in movement in the course of interstate since the central government has not notified the documents that have to be carried by a transporter of the goods in the course of interstate movement - HC
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Application for Refund - FORM-GST-RFD-01 as amended
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In the case of Deemed Export, either the recipient of goods or the supplier of goods (subject to conditions) may apply for for refund of tax (GST)
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Commissioner empowered to extent the time for export of goods under GST after the date of issue of invoice for export, beyond three months.
Income Tax
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Exemption u/s 11 - the assessee does not derive any profit looking at the excess of income or expenditure which is also meager, and All the fees charged by the assessee are for attainment of the ultimate object of the assessee of educational activities.
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Unexplained share capital/share premium - proof of genuine investors - the assessee has been able to prove identity of the share applicants, their creditworthiness and genuineness of the transactions in the matter.
Customs
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Confiscation - imports - excess goods found during examination - there is clear misdeclaration of quantity of distinctly different types of scrap having different values - Confiscation upheld
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Classification of imported vehicle/ car - misdeclaration - Violations of certain conditions with reference to freely importable items cannot make the items as a prohibited item.
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Eligibility of the importer to clear the goods for home consumption as a trader - e-waste - the goods are restricted and there are violations of Policy
DGFT
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Non-compliance of Sanitary and Phyto-Sanitary measures by Indian Exporters/Importers-reg. - Alert issued.
Service Tax
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Renting of immovable property service - joint ownership - their tax liability should have been determined by considering their individual rental receipts and not collective one, benefit on notification was extended.
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In the case of intermediary service, place of provision of services shall be the location of the service provider and therefore the services rendered by the appellant cannot be treated as export of services
Case Laws:
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GST
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2017 (10) TMI 831
Detention of goods - non compliance with the requirement of carrying the prescribed documents under the IGST Act - Held that: - although the power to prescribe the documents that are to accompany the transportation of goods in the course of interstate trade is conferred on the Central Government, the Central Government has, till date, not notified the documents that have to be carried by a transporter of the goods in the course of interstate movement - the detention in Ext.P5, for the sole reason that the transportation was not accompanied by the prescribed documents under the IGST Act/CGST Act/CGST Rules, cannot be legally sustained - appeal allowed - decided in favor of appellant.
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Income Tax
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2017 (10) TMI 829
Addition on account of Business Loss - higher amount has been spent on the project as against the total cost of expenditure - Held that: - The assessee failed to prove that liability/loss has been crystalized during assessment year under appeal and what is the basis thereof for making the claim of loss. It is very well clear under the Income Tax Act, deduction is not admissible on the basis of the mere provision or on the basis of event which has not crystalized on the date of its claim. There is no indication of loss in facts of case, so AS-7 will not apply. It is simply a case of delayed payment received from Delhi Government and Societies. There is also no denial by the Delhi Government as well as Societies for the claim of excess payment/ loss by the assessee which is also paid in subsequent year as per contention of the assessee. Therefore, disallowance of provision of loss was justified. Appeal dismissed - decided against assessee.
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2017 (10) TMI 828
Cancelling registration of society u/s 12AA - assessee has borrowed some amount from the bank and given the same for purchase of the land through bearer cheques amounts to utilization of the fund for non educational purposes - contention of the CIT that it is necessary that assessee should charge fees or exempt fees to the poor students or charge fees at the concessional rate, then only it can be said that it is existing for the charitable purposes - Held that:- We do not find that assessee is not engaged in the educational activities as merely charging of the fees does not make it existing for the purposes of the profit. This fact is also fortified for the reason that assessee has earned very meager amount of sum and which is also not alleged to have been applied for non-educational purposes. The assessee is running an educational institute but that does not mean that assessee must run it for free. Further it is also not alleged that the fees charged by the assessee is exorbitant and the primary motive of the assessee is to earn the profit. If the assessee does not charge the fees from student then it would not be possible for trust to carry on its activities for which it is established as the excess would not be available for ploughing back for development of the educational facility for the students. Hence, we do not find that the order of the Ld. CIT in cancelling the registration to the trust is sustainable. Further, merely because of the reason that assessee has borrowed some amount from the bank and given the same for purchase of the land through bearer cheques amounts to utilization of the fund for non educational purposes. It is an application of the fund for the objects of the trust. It is not the case of the revenue that the above loans given by the assessee are for altogether different purposes. We do not approve of such finding of CIT-A for the reason as assessee is carrying on educational activity, section 2 (15) does not also prescribe such condition, the assessee does not derive any profit looking at the excess of income or expenditure which is also meager, and All the fees charged by the assessee are for attainment of the ultimate object of the assessee of educational activities. In view of the above facts we direct the Ld. CIT to restore the registration granted to the assessee trust under section 12A A of the income tax act. - Decided in favour of assessee.
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2017 (10) TMI 827
Income chargeable to tax in India - whether receipt by the assessee is not “ Royalty” under Article 12 of the Double Taxation Avoidance Agreement between India and Thailand - Held that:- Admittedly, the Hon'ble Delhi High Court in assessee's own case [2016 (2) TMI 415 - DELHI HIGH COURT] has considered the above issue in AY 2007-08 and AY 2009-10 on the identical facts and circumstances deciding that the amendment made by the Finance Act 2012 will not affect Article 12 of the DTAA and therefore, the income earned by the assessee cannot be held to be royalty and consequently to chargeable to tax in India.
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2017 (10) TMI 826
Unexplained share capital/share premium - proof of genuine investors - Held that:- It may be noted here that investor companies have confirmed making investments in assessee-company who were having sufficient net worth to make investment in assessee-company. Assessee filed I.T. returns, PAN, Bank Statements of investor Company to prove they are existing assessees of Department and are genuine parties. No efforts are made by A.O. for production of investors at assessment stage. Therefore, the assessee has been able to prove identity of the share applicants, their creditworthiness and genuineness of the transactions in the matter. CIT(A), on examination of the material on record, further found that the only reason for the Revenue to goes for further verification was the report relating to survey conducted at the premises of the assesseecompany which forms part of satisfaction recorded for reopening of the assessment proceedings. From the said report, Ld. CIT(A) found that the business premises of the assessee actually belong to M/s. Bhushan Steel Ltd., and several other Companies having their Registered Offices at the same address. This created a suspicion in the mind of the Revenue. CIT(A) therefore, rightly noted that there is no law that more than one Company cannot have its Registered Office at one address. The Companies could have change their address later on. It is also an admitted fact that source of the capital investment companies were established during their respective assessment proceedings including in the case of the present assessee-company as per the findings of the Ld. CIT(A). Ld. CIT(A) also found that no evidence was found during the course of survey to indicate introduction of unaccounted cash/funds in the form of share capital in these companies. These findings of fact recorded by the Ld. CIT(A) have not been rebutted through any evidence or material on record. No evidence has been brought on record that money so invested in assessee-company came from coffers of assessee-company. All objections of A.O. have been considered by Ld. CIT(A) and various case law referred to above support the findings of Ld. CIT(A) that addition has been correctly deleted. - Decided in favour of assessee.
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2017 (10) TMI 825
Expenditure incurred on replacement of old furniture - nature of expenditure - revenue or capital - Held that:- When it is not in dispute that the expenditure has been incurred by assessee on repair of room cabinet, qua which all the necessary documents have been perused by the AO, we are of the considered view that the ld. CIT (A) has rightly taken the view that no new asset has been created of enduring benefit and as such, the expenditure is in the nature of revenue expenditure. So, we confirm the findings returned by ld. CIT (A). Consequently, Ground no.1 is determined against the Revenue. Expenditure incurred on account of processing fees paid to IDBI Bank Ltd. for increase in working capital overdraft facilities - nature of expenditure - revenue or capital - Held that:- When admittedly there is no capital creation with the loan facilities availed of by the assessee, the working capital overdraft facility cannot be kept under the category of capital expenses, rather working capital overdraft facility “is oftenly used to run day-to-day business”. Hence, the ld. CIT (A) has rightly deleted the addition by treating the same as revenue expenditure. Expenditure on Diwali gifts and sweets given to the outsourced Doctors - Held that:- AR has failed to bring on record any such documents to prove the hiring of services of the Doctors nor it is proved on record if the Doctors to whom the gifts are given are on the roll of the assessee or are rendering services since long. No doubt confirmation from the Doctors to whom the gifts are claimed to have been given by the assessee cannot be obtained but the assessee is required to bring on record the evidence to prove that such and such services have been rendered by the said Doctors. So, we are of the considered view that this issue is required to be remanded back to the AO to decide afresh after conducting verification of the fact that such and such services were actually rendered by the said Doctors and their services were necessary to run the day-to-day business of the assessee. Addition on account of bad debts - no efforts for recovery of such bad debts have been made by the assessee - Held that:- When the assessee has proved on record that the debts incurred were on revenue account and this fact has not been disputed by the AO that the debts have become bad and some have been written off and taken into account in computing the income in previous year, we find no ground to interfere into the findings returned by ld. CIT (A) deleting the addition. Hence, ground is determined against the Revenue. Addition on account of closing stock of consumables and medicines - Held that:- When the assessee has proved on record that services of pharmacy and path lab were outsourced and remaining items were brought as and when required, there used to be no stock as consumables on physical verification. So, again, we find no ground to interfere with the findings returned by ld. CIT (A). Hence, ground determined against the Revenue. Addition on amount paid to Jagmohan Garg (HUF) on account of rent paid - Held that:- Since ld. CIT (A) deleted the addition after verifying the fact that the payment has been made as per Agreement and the fact that the payment has been made through banking channel to the landlords directly and as such, there was no need to confirm these facts from landlords. Again, we find no ground to interfere in the findings returned by ld. CIT (A) Addition on account of purchases of consumables for lack of confirmation made by the parties from whom such consumables were purchased - Held that:- AO has written in para 1 of the assessment order that “the ld. AR appeared from time to time and submitted details and documents” but nowhere stated that the detailed documents were submitted. On the other hand, AO has categorically mentioned in the assessment order that no confirmation received as to the purchase of the consumables from the parties even after the issuance of the notice u/s 133 (6) of the Act. In these circumstances, the findings returned by the ld. CIT (A) deleting the addition of 10 ₹ 1,24,44,143/- are cryptic and non-speaking one. So, we remand this issue back to the ld. CIT (A) to decide afresh Addition on account of payment to various consultant Doctors - whether copies of ITR and computation of income was filed before AO and she has also verified the details - Held that:- When we examine the assessment order, no such documents have been brought before AO nor the concerned Doctors have filed any confirmation despite issuance of the notice u/s 133 (6) of the Act nor the ld. CIT (A) has called upon any remand report from the AO. So, in these circumstances, we remand this issue back to the file of ld. CIT (A) to decide afresh after providing an opportunity of being heard to the parties. Consequently, ground is determined in favour of the Revenue for statistical purposes. Addition on account of sundry creditors - no sundry creditors have been shown in the balance sheet - Assessee submitted that the list of sundry creditors is there at pages 88 & 89 of the paper book and the amount of ₹ 7,00,000/- has been claimed against Shri Sanjiv Gupta mentioned at Sl.No.6 of the sundry creditors - Held that:- We we are of the considered view that this fact is required to be verified by the AO in the light of the balance sheet. So, this issue is also remanded back to the AO to decide afresh after providing an opportunity of being heard to the parties. Consequently, ground is determined in favour of the Revenue for statistical purposes.
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2017 (10) TMI 824
Registration u/s 12AA of the Income Tax Act, 1961 - objective of society - Held that: - It is an admitted fact that the assessee society exists for education purpose only which has been duly recorded in Para 2.3 of impugned order. Further, three consecutive orders passed u/s143(3) of the Income Tax Act have accepted assessee’s claim of exemption u/s 10(23C)(iiiad). Thus, there remains no doubt that the objective of the assessee society is ‘education’. The observations of the Ld. CIT in the impugned order are contradictory. The Ld. CIT, on the one hand, mentions that the assessee society has been running a school and on the other hand he mentions that the objects appear to exist only on paper. This coupled with the fact that the department has also accepted the assessee’s claim of exemption u/s 1023C (iiiad) for three consecutive years leaves no doubt about the genuineness of the objects of the society. Appeal allowed - decided in favor of assessee.
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2017 (10) TMI 823
Penalty u/s 271(1)(c) - addition u/s 14A - proof of concealment of income - Held that:- Disallowance of expenditure ipso facto does not mean concealment of income. We also observe that the assessee has itself made suo motu disallowance which is not totally devoid of any reasonable basis. Therefore, no culpability is attributable on the part of the assessee in the instant case. It is trite that a finding in the quantum proceedings on disallowance cannot be automatically adopted for the purposes of section 271(1)(c) of the Act. As noted above, the assessee have discharged primary burden lay upon it. The explanation offered by the assessee towards interest disallowance made under s.14A appears to be satisfactory and is perceived to bear trappings of bonafide. The aforesaid disallowance under s.14A of the Act thus cannot be equated with any concealment of income. In the totality of the circumstances, we are of the view that discretion available to the CIT(A) for imposition of penalty ought to have been exercised judiciously and in favour of the assessee. Accordingly, the penalty so imposed by the Revenue is cancelled.
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2017 (10) TMI 822
Reopening of assessment - Held that:- Though, the assessee had filed its return of income voluntarily, however, no assessments under section 143(3) of the Act have been made. Subsequently, the Assessing Officer was in possession of specific information that certain purchases made by the assessee were not genuine as they were effected from hawala operators. Thus, as could be seen, there was tangible material before the Assessing Officer to form his belief that income has escaped assessment. That being the case, the Assessing Officer has properly exercised his power under section 147 of the Act to re–open the assessment for the impugned assessment years. Therefore, ground no.1 in all these appeals of the assessee are dismissed. Bogus purchases addition - Held that:- It is evident that the assessee was unable to prove the genuineness of purchases conclusively by producing documentary evidences such as transportation bills, delivery challans, lorry receipts, etc., to prove actual delivery of goods at its premises. Further, the notices issued under section 133(6) of the Act to the concerned parties also returned un–served. Moreover, the assessee also failed to produce the concerned parties before the Assessing Officer or confirmations from any such parties. In these circumstances, the disputed purchases cannot be accepted as genuine. However, the Assessing Officer has recorded a finding of fact that consumption of material to sales have been proved which pre–supposes that the goods might have purchased from some undisclosed sources and to regularise them assessee has obtained accommodation entries. In these circumstances, the normal gross profit rate as adopted by the learned Commissioner (Appeals) cannot be applied for making addition since such gross profit rate is applicable to genuine purchases. In these types of cases, the Tribunal is taking a consistent view of sustaining addition at 12.5% of the bogus purchases. Applying the same yardstick, the profit estimated at 12.5% of the alleged bogus purchases as done by the Assessing Officer is reasonable
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2017 (10) TMI 821
Disallowance of expenses - labor charges - disallowance on the ground that the assessee failed to deduct tax at source - whether filing of Form No.26A namely the certificate of the Chartered Accountant as prescribed under the proviso to section 201(1) of the Act can be taken as a conclusive proof that the recipients of the payment from the assessee has taken into account the sum received from an assessee on which no tax had been deducted at source for computing his income in such return of income? Held that: - the stand taken by the AO is quite vague. Form No.26A clearly specifies that the sum of ₹ 1,69,89,200/- is part of the gross contract amount of ₹ 7,87,57,116/- declared by Shri Banimali Koley as his contract receipts in the return of income filed for A.Y.2012-13. It is also clear from the remand report of the AO that it cannot be said that the assessee has not included the sum of ₹ 1,69,89,200/- received from the assessee in his gross receipts. The AO did not examine Shri Banimali Koley, if he had any doubts in this regard. He has however not chosen to do so but has given a remand report which is very vague. The certificate in Form No.26A has to be accepted as correct - disallowance sustained by CIT(A) u/s 40(a)(ia) of the Act should be deleted - appeal allowed - decided in favor of assessee.
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2017 (10) TMI 820
Genuinity of purchase transactions - issuance of bogus bills by Hawala Operators - addition u/s 69C of the Act - Held that: - the parties are listed as hawala operators in the list prepared by Maharashtra Sales-tax department. The parties have filed affidavit before Maharashtra Sales-tax authorities wherein they have admitted that they have not done any business, but only issued bogus purchase bills. All these facts clearly prove the fact that the above two parties are involved in providing accommodation entries without actual delivery of goods. Under these circumstances, purchases from these parties cannot be considered as genuine. What needs to be taxed is only the profit element embedded in such purchases and not the total purchases from the parties - appeal dismissed - decided against Revenue.
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2017 (10) TMI 819
Deduction u/s 54F - investment in house property - The AO disallowed the claim made by the assessee since the assessee has entered into contract for construction agreement prior to one year before the sale of the long term capital asset - Held that: - the assessee has completed the construction of the house within three years from the date of capital gains and the assessee has satisfied the condition for allowing deduction u/s 54F - the case is squarely covered by the decision in the case of Commissioner of Income-tax Versus Bharti Mishra [2014 (1) TMI 446 - DELHI HIGH COURT], where it was held that It is now a well-established principle of law that whereas eligibility criteria laid down in an exemption notification are required to be construed strictly, once it is found that the applicant satisfies the same, the exemption notification should be construed liberally - appeal dismissed - decided against Revenue.
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2017 (10) TMI 818
Disallowance made by the AO on account of the cash deposit in the bank - case of Revenue is that the ld. CIT(A) erred in admitting the additional evidence in contravention to the provisions of Rule 46A of the Income Tax Rules, 1962 - Held that: - sufficient information with regard to the source of cash deposited with the bank was explained by the assessee - sufficient details were furnished by the assessee with regard to the jeweler as it was registered with the Sales Tax Department and no verification with the sales tax department was carried out. But the lower authorities had not brought anything on record that the jeweler was not in existence at the relevant time when the jewellery was sold. The additions cannot be sustained in the hands of the assessee just because the parties failed to appear before the AO - appeal dismissed - decided against Revenue.
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Customs
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2017 (10) TMI 830
Anti-Dumping Duty - Soda Ash - sunset review - section 9A of the Custom Tariff Act, 1975 - time limitation - Held that: - the time was granted to the authorities to complete the proceedings from the statement of disclosure and it was expected the purpose was only within two months from the date of receipt of copy of the judgment. As record indicates, the authorities received this order somewhere on 30th March 2017 and pursuant thereto the hearing was fixed on 25th April 2017. Ultimately, the said proceedings had not culminated into any order and the original notification dated 3rd July 2012 was coming to an end on account of lapse of time on 2nd June 2017. Hence, the concerned affected parties like the petitioners mopped the authorities for seeking appropriate review, which is known as Sunset Review for continuing the Anti Dumping Duty on account o reasons mentioned threunder, which request came to be accepted with effect from resultant order dated 16th June 2017. There is a rival contention on account of the observations of paragraph D as well as in para 7 by both the sides that the said notification of initiation of Sunset Review was after recording a satisfaction which would render the Mid Term Review or OTS infructuous whereas the counsel for the respondent relying upon para 17 contended that the same was specifically made subject to the result of the MTR which was in fact an undertaking and which could not be completed on account of pendency of the litigation before this Court. The Notification of 3rd July 2012 got extended up to 2nd July 2018 or till it is revoked by another order or notification. It is requierd to be noted at this stage that this notification is issued by the Governmetn of India, which is the competent authority and not respondent no.2 who has no power to issue any such extension notification. There being an order available with the authorities and despite there being a time limit existed in it and if the proceedings are not completed within the time limit then the authorities after having recording Sunset Review then a question arises as to how the authorities are justified in simultaneously proceeding with both the review. In our view, the same was not permissible and it deals a serious blow to its competence to undertake and continue with Mid Term Review without there being any clear mandate from the court after the time granted by the Court had elapsed. No prejudice is likely to be caused to the respondents in case if the status quo as on date is ordered to be continued under which the Union of India is restrained from acting upon the order dated 22.7.2017 under which the final findings have been rendered and Sunset Review is annulled.
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2017 (10) TMI 817
Grant of bail - Smuggling - heavy quantity of foreign origin cigarettes - declaration made as import of scrap and other goods - Held that: - Upon hearing learned counsel for the parties, perusal of record and considering the complicity of accused, severity of punishment as wall as totality of the facts and circumstances, at this stage without commenting on merits of the case, I do not find it a fit case for grant of bail to the two applicants - bail application rejected.
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2017 (10) TMI 816
Smuggling - 24 numbers gold biscuits weighing 2.8 kgs - evidences on record like statements of all the persons, forensic data, the passport of all the individuals - confiscation of vehicle of Smt Fatimath Rubeena - Held that: - The appellant Smt. Fatimath Rubeena has not factually controverted the findings recorded by the adjudicating authority as there is corroboration of the fact that vehicle was to be used for transport of smuggled gold and was also used earlier - confiscation upheld. Shri Abdul Basheer - the adjudicating authority recorded a finding on the role attributed to Shri Abdul Basheer in paragraph No. 84 and relied upon the independent statements of various persons to hold that this appellant had recruited individual into aiding in the smuggling of the gold and was waiting outside the airport to collect the smuggled goods. He has also recorded a finding that this appellant was helping to organize the smuggling of gold biscuits through Calicut International Airport using carriers - Held that: - As against such detailed findings, in my view there is no effective contradiction of the same by this appellant - impugned order upheld. Shamsuddin K.A - confiscation - penalty - the appellant has tried to change the adjudicating authorities findings by stating that there was no verification of accounts maintained in appellant s shop before seizing the currency; ingredients required for confiscation of sale proceeds of smuggled goods - Held that: - there are no evidences to show that the Indian currency of ₹ 25,77,500/- is the sale proceeds of smuggled gold, in view of which, I hold that the absolute confiscation or confiscation of the Indian currency of ₹ 25,77,500/- is incorrect and not in accordance with law and needs to be set aside - In the absence of any evidence to indicate that the Indian currency of ₹ 25,77,500/- was sale proceeds of the smuggled gold, I find that the penalty imposed on this appellant is unwarranted and liable to be set aside and I do so. Shri Ummer Abdulla - penalty u/s 112(a) and (b) of the CA - Held that: - I do not find any reason to interfere in such detailed findings recorded by the adjudicating authority which clearly brings out the role attributable to this appellant in the smuggling of gold, hence the penalties imposed on this appellant are upheld and the appeal is rejected. Shri Althaf K.M - penalty u/s 112(a) and 114(AA) of the CA - Held that: - nothing is recorded in the mahazar; no evidence is brought on record linked appellant with any of the so called gold smuggling in fact members; appellant has not done any act or omission which was rendered the goods liable for confiscation under Customs Act. Hence penalty imposed on the appellant under Section 112(a) is incorrect as also under Section 114(AA) of the Customs Act, 1962 - further, It is also recorded that the appellant had not made any declaration about bringing gold to the Customs authorities when he arrived at Calicut Airport from Dubai and appellant himself has admitted in the statement recorded that the gold which he had handed over would have been transported out of the Airport without Customs clearance. In my view, the finding recorded by the adjudicating authority is correct and does not require any interference. Shri Manoj P - penalty u/s 112(a) of the CA 1962 - Held that: - It is noticed that in the findings the adjudicating authority has brought on record that this appellant was recruited by Shri Abdul Basheer to aid smuggling of the gold and was paid consideration; the statement of Shri Althaf indicated that this appellant was handed over gold within the Airport premises. I do not find any reason to hold contrary to detailed findings recorded by the adjudicating authority to impose penalty on this appellant - penalty upheld. Appeal allowed in part.
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2017 (10) TMI 815
Confiscation - excess goods found during examination - misdeclaration - Held that: - the goods were examined during the period from 25.07.2007 to 07.08.2007, after de-stuffing and seggregation and independent panchas were present during this process of examination. Hence, the contention of the appellants that the importer was not represented during the examination is untenable - the contention of the appellants that there was excess of only 2.15 MT in the consignment is not tenable as the quantity of excess scrap was in respect of Copper Scrap, Copper Wire Scrap, Brass Scrap and Aluminium Scrap. Hence, the adjustment of such scrap against the heavy melting scrap found less would be illogical as the scraps are of different kinds with different values and rates of duty. The contention of the appellants that surveyor report should be accepted as evidence in absence of testing of goods are also not convincing. In the present case, there is clear misdeclaration of quantity of distinctly different types of scrap having different values - Confiscation upheld - the quantum of redemption fine and penalty reduced. Appeal allowed in part.
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2017 (10) TMI 814
Rectification of mistake - mention of incorrect order number - Held that: - in para 3, the mention of order no. S/9-226/GATT/98 SVB dated 07.07.2000 is not by mistake whereas it was a reproduction of the finding given in page 7 of the Order-in-Original no. S/9-79/GATT/2001 GVC dated 22.02.2002 - Therefore the order no. mentioned in para 3 of this Tribunal order dated 28.11.2016 is not incorrect - ROM application not maintainable and is dismissed.
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2017 (10) TMI 813
Classification of imported vehicle - misdeclaration - it was alleged that The car is a converted vehicle originally designed for transport of less than 8 persons but apparently converted to carry more than 13 persons - violations of Policy with reference to Motor Vehicles Regulations in India - confiscation - Held that: - when the proceedings for reassessment were initiated by a show-cause notice, the original authority is bound to decide on the correct valuation. It is not sustainable for him to delegate such work to further proper officer. The original adjudicating authority was in fact acting as proper officer for reassessment and there is no other proper officer for such work. In any case, redetermination of value was not proposed with reference to specific value and legal provision and with supporting evidence in the show-cause notice. Similarly reclassification, with reasons, was not proposed in the show-cause notice. Incidentally it is noted that para 20(iv) of the original order rejected the classification under CTH 8703 and ordered reclassification under CTH 8702. We note that in fact, the appellant in their Bill of Entry classified their product under CTH 8702 only. It would appear that the said finding of the original authority is, perhaps, an error. In any case, when there was no proposal with reasons in the notice, reclassification without such proposal is not sustainable. We also note that the appellant contended on the correctness of the classification. We are not going into the details as that will be beyond the scope of the proceedings. Absolute Confiscation of imported car - section 125 of CA - Held that: - this imported car cannot be considered as a prohibited item. No evidence to such assertion has been provided by the lower authorities. Violations of certain conditions with reference to freely importable items cannot make the items as a prohibited item. Even in such a situation of holding the item as prohibited item, still Section 125 provides for option for redemption. In the present case, the lower authorities allowed reexport of goods only, though no such prayer has been made by the importer. We find that the reliance placed by the appellant on the decision of the Tribunal in Subramanyam Iyyer Vs. CC [2002 (7) TMI 621 - CEGAT, BANGALORE], in similar set of facts are appropriate and applicable to the present case. Considering the prayer of redemption, we find that the same can be redeemed for clearance on payment of fine of ₹ 20,000/- as fixed by the original authority. Regarding fixation of redemption fine, we note that the learned counsel for the appellant pleaded that the goods were in detention from March 2017 onwards increasing demurrage and cost. Factoring that, we hold that the said redemption fine is sufficient - penalty on importer upheld. Appeal allowed in part.
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2017 (10) TMI 812
Eligibility of the importer to clear the goods for home consumption as a trader - e-waste - import of used Multifunction Digital Photocopiers and Printers - violation of Foreign Trade (Development and Regulations) Act, 1992, Foreign Trade Policy 2015-2020 and Pollution Control Regulations applicable to e-waste - absolute confiscation - Held that: - the products under import are MFDs having use as digital multifunctional devices as intended. It is not clear as to how when the product imported in the form of whole machine and having certified functional life of 5/7 years, the same can be considered as waste. Even if the items imported require certain reconditioning, repair, it will not make the product as waste - It is specifically mentioned that the items imported are in full form and fit for use for printing A3 size papers and they are capable of being put to productive use and the machines were not in a damaged condition to such an extent which will compromise their functionaility. The residual life of these machines has been certified. In the face of these technical opinions and facts as recorded, the imported items cannot be considered as waste. The importation of the impugned goods is in violation of Import Policy of the relevant time and also of some of the conditions of Hazardous Waste Rules 2016. The violation of Hazardous Waste Rules is with reference to country of origin certificate. Other conditions mentioned therein have substantially been fulfilled. Penalty - whether such violations will result in refusal to release the goods on redemption in terms of Section 125 of Customs Act, 1962? - Held that: - Admittedly, the goods are restricted and there are violations of Policy - while confiscation of the imported items cannot be faulted with, we note that the appellants are entitled for release of the goods on payment of appropriate redemption fine - a redemption fine of ₹ 52 lakhs and ₹ 14 lakhs for consignments imported by M/s. Atul Automation Pvt. Ltd. and M/s. Parag Domestic Appliances, respectively can be imposed. Penalty u/s 114AA on both the importers as well as Director of one of the importer - Held that: - the provisions of Section 114AA will apply in cases where a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular - there is no situation of any false document submitted by the importer or by the Director of the importer. As such, the application of provisions of Section 114AA is not fully justified by the impugned order and accordingly, the penalties imposed u/s 114AA set aside. Appeal allowed in part.
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Service Tax
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2017 (10) TMI 811
Levy of service tax - sale of airport entry tickets to visitors of airport - failure to collect service tax - it was the Assessee’s case that it had not been permitted by the AAI to collect service tax for the period from 10th September 2004 to 1st March 2005 and that as soon as the AAI allowed the Assessee to do so with effect from 2nd March 2005, the Assessee obtained service tax registration and from that date onwards was paying service tax - extended period of limitation - whether the Department was justified in invoking the extended period of limitation of five years in terms of Clause (d) of the proviso to Section 73 (1) of the FA? Held that: - the CESTAT appears to have failed to note certain important dates and therefore came to the erroneous conclusion that the invocation of extended period of limitation by the Department was justified - the Court is not satisfied in the present case that the Department was justified in invoking the extended period of limitation under clause (d) of the proviso to Section 73 (1) of the FA - the impugned order dated 2nd March 2017 passed by the CESTAT is without application of mind. The CESTAT erred in holding that the extended period of limitation in terms of the proviso to Section 73 (1) of the FA was rightly invoked by the Department. Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 810
Refund claim - export of services - Business Auxiliary Service - Held that: - there is no infirmity in the impugned order which is based upon the various decisions rendered by the Tribunal - reliance placed in the case of M/s. Blue Star Ltd. Appellant Versus The Commissioner of Central Excise [2008 (3) TMI 32 - CESTAT BANGALORE], where it was held that the orders are booked in India and after the orders are booked, the parties concerned directly get in touch with the foreign suppliers. Once the foreign suppliers export the goods to India and receive their payments, a commission is paid to the appellant. Thus, the appellant has satisfied the requirements of Export of Service Rules, 2005, and entitled for refund - appeal dismissed - decided against Revenue.
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2017 (10) TMI 809
Refund claim - service tax paid on late payment charges collected from the customers - mistake of law - rejection on the ground of time bar and unjust enrichment - Section 11B of the Central Excise Act, 1944 - whether the refund claim of service tax filed by the assessee after the period of limitation prescribed under the law is to be sanctioned or not, without raising the issue of limitation? - Held that: - the Supreme Court in the case of Asst. Collector Vs. Anam Electrical Manufacturing [1997 (1) TMI 80 - SUPREME COURT OF INDIA] held that statutory time limit is applicable to claim for refund of even illegal levies and time limit cannot be extended by any authority - appeal dismissed - decided against appellant.
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2017 (10) TMI 808
Refund claim - Benefit of Notification 108/02/2009 dated 29.01.2009 - unjust enrichment - Held that: - the appellants are not entitled to the benefit of exclusion provided under Notification 108/02/2009 dated 29.01.2009 - the appellants have failed to bring on record any document which shows that they have constructed the flats on their land. The refund claim is barred by unjust enrichment as the appellant has not been able to prove that the service tax has not been passed on to the ultimate buyer - appeal dismissed - decided against appellant.
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2017 (10) TMI 807
Renting of immovable property service - Revenue is of the view that as the appellants have collectively and jointly let out the property and total rent received on the property is more than the threshold limit as per the N/N. 06/2005-ST dt. 01.03.2005, therefore, the appellants are liable to pay Service Tax - Held that: - the identical issue came up before this Tribunal in the case of Anil Saini and Others Vs. CCE, Chandigarh-I [2017 (1) TMI 101 - CESTAT CHANDIGARH], where Tribunal placing reliance in the case of CCE, Nasik Vs. Deoram Vishrambhai Patel [2015 (9) TMI 790 - CESTAT MUMBAI] held that the ownership of the Property and providing of taxable renting of immovable Property by the four appellants in this case is in their individual capacity and, therefore, their tax liability should have been determined by considering their individual rental receipts and not collective one, benefit on notification was extended. The co-owners of the property cannot be considered as liable to pay Service Tax (jointly or severally) as the Revenue has identified the services provider and the service recipients for imposing the Service Tax liability which are individuals. Therefore, the Service Tax liability is not sustainable. The demand of Service Tax against the appellants is not sustainable as the appellants are entitled to benefit of N/N. 06/2005-ST dt. 01.03.2005 - appeal allowed - decided in favor of appellant.
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2017 (10) TMI 806
Refund of unutilized CENVAT credit - Export of services - Rule 5 read with N/N. 27/2012 - POPOS Rules - Rule 8 of Place of Provision Rules, 2012 - case of Revenue is that Appellant is rendering marketing / technical support services falling under BAS to their parent company in Singapore wherein the actual service recipients are those availing services from the appellant, viz. the Indian client companies of the foreign parent company and therefore in terms of Rule 8 of Place of Provision Rules, 2012, services are provided in India - Held that: - as per the agreement also appellant is engaged in providing project support services, consulting services, marketing on product, technical support services etc. to the foreign company. The learned Commissioner has also come to the conclusion on the basis of the relevant documents available on record that such services are rendered to the group company located outside India and the payment of such services is received by the appellant in convertible foreign exchange - refund allowed. Intermediary services - W.e.f. 01/07/2012, in case of intermediary service defined under Rule 9 of Place of Provision Rules, 2012, the services are rendered in India - Held that: - the findings of both the authorities that the services rendered by the appellant fall under the definition of intermediary under Rule 2(f) of the Place of Provisions of Service Rules, 2012 and in terms of Rule 9 of the Place of Provision of Service Rules, 2012 specified vide Notification No.28/2012 dt. 20/06/2012 which is effective from 01/07/2012 in the case of intermediary service, place of provision of services shall be the location of the service provider and therefore the services rendered by the appellant cannot be treated as export of services in terms of Rule 3 of the Export of Service Rules, 2012. More so, condition No.(d) laid down in Rule 6(9) of the Service Tax Rules are not satisified - there is no infirmity in the impugned order. Appeal allowed in part.
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2017 (10) TMI 805
CENVAT credit - input services - construction service - consulting engineer service - mapping survey service - Held that: - the construction service, consulting engineer service and mapping service are activities relating to the business of the respondent, and get covered in the inclusive part of the definition of input service being activities relating to the business of the assessee - the decision in the cases of Reliance Gas Transportation Infrastructure Ltd. Versus Commissioner of Service Tax, Mumbai II [2016 (8) TMI 91 - CESTAT MUMBAI], M/s Vamona Developers Pvt Ltd Versus Commissioner of Customs, Central Excise And Service Tax, Pune-III [2015 (12) TMI 1111 - CESTAT MUMBAI] referred. The construction service, mapping service and consulting engineer service fall in the definition of input service even before 01/04/2011 and after 01/04/2011 - the credit could not be denied on the ground that the services were used for construction of the premises which is not excisable - appeal dismissed - decided against Revenue.
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2017 (10) TMI 804
Penalty u/s 76 and 77 - Manpower Recruitment and Supply service - deliberate suppression of facts - penalty under Section 76 & 77 has not been imposed in addition to the penalty imposed under Section 78 - Held that: - the learned Commissioner(Appeals) has given valid reasons for not imposing penalty under Sections 76 & 77 - appeal dismissed - decided against Revenue.
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2017 (10) TMI 803
Jurisdiction - power of Commissioner(Appeals) to remand - Refund of unutilized CENCAT credit - Held that: - the power of Commissioner to remand a matter has been upheld by decision in the case of COMMISSIONER OF C. EX., TIRUNELVELI Versus RAMESH ENTERPRISES [2010 (12) TMI 551 - CESTAT, CHENNAI], where it was held that in service tax matters, Commissioner (Appeals) has the power of remand under Section 85 of the Finance Act, 1994 - there is no infirmity in the impugned order whereby the Commissioner(Appeals) has only remanded the matter to requantify the refund amount - appeal dismissed - decided against Revenue.
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2017 (10) TMI 802
CENVAT credit - tour operator service - rent-a-cab service - N/N. 1/2006 - Held that: - the appellants have already reversed proportionate credit attributable to tour operator service and rent-a-cab scheme operator service and therefore the appellants are entitled to the benefit of abatement under N/N. 1/2006 in respect of tour operator service and rent-a-cab scheme operator service - In order to verify whether the appellants have actually reversed the proportionate service tax credit or not, this case needs to be remanded back to the original authority for verification of the same - appeal allowed by way of remand.
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2017 (10) TMI 801
Business Auxiliary Services - appellants are engaged in making arrangements for vehicle loans to interested customers, from various financial institutions, for which the appellants are getting some commission/income as percentage of loan amounts, which is reflected in their books of accounts as incentive received - Held that: - the commission received by the appellant is not in the nature of rental charges as claimed by the appellant. Moreover as per the lease agreement also, appellants are not authorised to sub-let the premises - he financial institutions are providing services of vehicle loans to the customers of the appellant which results in boosting the business of the financial institutions and in recognition of the said assistance rendered by the appellant, the financial institutions reciprocate with commission in some percentage of loan distributed though the appellant and this activity is a clear case of promotion of service rendered by the clients i.e. financial institutions, which is specifically included in the category of BAS specified under Finance Act, 1994 and are liable to service tax w.e.f. 01/07/2003. Such promotion of the business of financial help promote the business of the appellant also and does not alter the character of BAS - the appellants are liable to pay the services tax under the category of BAS. Penalty - Held that: - the penalty was dropped by invoking the provisions of 80 of the Finance Act on account of the fact that there were contradictory decisions on this issue during the relevant time - penalty set aside. Appeal allowed in part.
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2017 (10) TMI 800
Penalty u/s 76 and 77 - service tax collected but not deposited - Held that: - the appellant knowingly, was regularly collecting the service tax from their clients and were not depositing to the Govt. Account. Moreover, they were also not declaring the said service tax liability in the ST-3 returns, which clearly shows their malafide - penalty u/s 76 upheld. Penalty u/s 77 upheld - Held that: - in the SCN the said penalty was not even proposed - This is a settled law that adjudication order can not travel beyond the scope of SCN - penalty set aside. Appeal allowed in part.
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Central Excise
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2017 (10) TMI 799
Penalty on Director u/r 26 of CER, 2002 - Clandestine removal by the company - Penalty imposed on director on the ground that he was engaged in day to day affairs of the company SPMPL - case of appellant-director is that Sec. 11A(2) and the proviso thereto would apply and no penalty should be imposed on him - the said company discharged the entire Central Excise duty, interest thereof and also 25% of the penalty amount involved as per the provisions of Sec. 11AC of the Central Excise Act, 1944 - Held that: - the assessee M/s SPMPL has settled Central Excise duty as per the provisions of Sec 11A(1A) of the CEA, 1944. The lower authorities seeks to apply the provisions of Sec 11A(2A) in order to penalize the appellant herein under Rule 26 CER, 2002, which in my view, is in not in consonance with law settled by the Hon’ble High Court Punjab and Haryana in the case of Vikas Garg [2011 (10) TMI 554 - Punjab and Haryana High Court], where it was held that Once the proceedings against the firm stand concluded, penalty proceedings against partners of the firm cannot continue as Rule 26 of the Rules is not an independent provision but has to be read with Section 11A of the Act. The firm has satisfied the due of the Revenue, therefore, the imposition of penalty under Rule 26 of the Rules are not justified. Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (10) TMI 798
Transfer of CENVAT credit - case of Revenue is that appellant wrongly transferred this credit from Education Cess and Secondary Higher Education Cess to basic Excise duty and realization thereof for discharge of Central Excise duty on the finished goods cleared for utilisation from their factory - Held that: - there are no provisions in the Cenvat Credit Rule 2004 for transferring/retransferring of credits from the Cenvat Credit account from to Secondary an Higher Secondary Education Cess vice versa - appeal dismissed - decided against appellant.
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2017 (10) TMI 797
CENVAT credit - M/s Channel, Angle, TMT Bars etc. used in erection of capital goods, supporting structures within the factory - Held that: - the decision in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI] held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit. The Appellant should establish the said use by adducing evidences. In the result, the matter is remanded to the adjudicating authority - appeal allowed by way of remand.
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2017 (10) TMI 796
Confiscation - clandestine removal - goods lying in the factory premises unaccounted on the inputs and the finished goods - Held that: - The absence of any specific finding, in recording of the goods in the RG I register, but were found within the factory premises and there was no attempt to remove the said goods clandestinely, nor any precedent of the same - the confiscation for the said goods seems to be incorrect, is set-aside. CENVAT credit - no entries made in the RG 23A Part-I register as to receipt of the raw material - Held that: - It is undisputed that the appellant had not maintained any clandestine records during the period in question. At the same time, the appellant had availed Cenvat credit of the amount and recorded the same in RG 23A Part-I register and the said credit has been utilized by them for paying central excise duty on the finished goods cleared by debiting the same in RG 23A Part-II register - demand set aside. CENVAT credit - returned goods - Rule 16 of CER, 2004 - Held that: - the said demand needs to be upheld as the appellant has not been able to justify the same before the Tribunal that the goods which were received back were in fact received under some documents which indicate that the goods were originally cleared on payment of duty - in the absence of any co-relation, demand needs to be upheld. Appeal allowed in part.
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2017 (10) TMI 795
Clandestine removal - re-warehousing of indigenously procured goods - N/N. 22/2003-CE dated 31.03.2003 - Revenue took a view that the benefit of N/N. 22/2003-CE was only available to the appellant as 100% EOU. However, since the appellant was converted from 100% EOU to an EPCG unit, the conditions of said notification were not fulfilled and the exemption contained therein was not admissible to the appellants - whether the 5% custom duty on the capital goods is applicable to the indigenous capital goods or the appellants are required to pay the duty which was forgone when the appellants availed N/N. 22/2003-CE? Held that: - The duty involved on such clandestinely removed machinery was 13,22,559/-, which was paid by the appellants along with interest at full rate. The Customs Bonded Warehousing License of the appellant was thereafter suspended vide order-in-original dated 8.8.2005 issued by the Assistant Commissioner. The appellants were, therefore, required to pay duty of Customs and Central Excise on the remaining capital goods which were brought under the bond - the effective rate of customs duty on the capital goods imported under EPCG Scheme is prescribed under Notification 97/2004 @ 5% whereas no such Notification has been issued under Section 5A of Central Excise Act prescribing a similar concessional rate of duty in respect of indigenous capital goods supplied under EPCG Scheme. The deemed equivalence given by the DGFT to the imported and indigenous capital goods for the purpose of calculating export obligation can not be transported to another act, namely, Central Excise Act under which the obligations for procurement of indigenous goods under N/N. 22/2003-CE were made by the appellant and B-16 bond was also signed by appellant. The conditions in N/N 22/2003-CE are binding on the appellant in terms of the bond executed by them and the concessional duty under Central Excise is not covered under the Scheme of EPCG. Appeal dismissed - decided against appellant.
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2017 (10) TMI 794
Refund of Higher Education Cess paid on the amount of Cess as leviable under the Beedi s Workers Welfare Cess Act, 1976 - denial on the ground of time limitation and unjust enrichment - section 11B of the CEA, 1944 - Held that: - the present case is squarely covered by the decision of the Tribunal in the case of M/s. Itakhuli Tea Estate Versus Commissioner of Central Excise & Service Tax [2017 (5) TMI 143 - CESTAT KOLKATA], where it was held that Crude Oil Cess is not in the nature of excise duty and consequently, the Education Cess and Secondary and Higher Secondary Education Cess computed thereon, also does not bear the character of a duty of excise, but is merely an amount paid under a mistake of law. The provisions of the CEA, 1944 would not be applicable for refund of such amount paid by mistake - appeal allowed - decided in favor of appellant.
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2017 (10) TMI 793
CENVAT credit - capital goods - M.S. Channels/ M.S. Plates/Joists/CTD bars/TMT bars and cement, used for construction of foundation and structures of capital goods such as pre-heater towers, raw mill house, storage tanks, clinker silo, factory buildings, roads/drains and non plant buildings - Department however took the view that such foundations and structures are not capital goods - Denial of credit on the impugned items by the adjudicating authority has been done primarily relying on the ratio of Vandana Global Limited [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] and the Board circular No. 276/110/96-3TRU, dated 02.12.1996. Held that: - the said legal position by Ld. adjudicating authority has been over-taken by subsequent judgments of higher forums - in a recent judgment of the Hon’ble High Court of Madras in the case of Thiru Arooran Sugars, Thirumandakudi and Dalmia Cements (Bharat) Limited [2017 (7) TMI 524 - MADRAS HIGH COURT], relying upon their earlier judgments and that of the Hon'ble Apex Court in the case of Saraswati Sugar Mills vs. CCE, Delhi-III [2011 (8) TMI 4 - SUPREME COURT OF INDIA], it has been held that M.S. structural which support the plant & machinery should get the benefit of cenvat credit. The disputed credit on various appeals, having been availed before the amendment to rule 2(k) of Cenvat Credit Rules, 2004, w.e.f. 07.07.2009, cannot sustain and will have to be set aside which we hereby do - appeal allowed. Penalties - Held that: - it cannot be disputed that the issue per se was in litigation and the same was settled only by the judgments - penalties set aside. Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 792
Refund of unutilized CENVAT credit - denial on the ground that the appellant is maintaining separate account for basic excise duty and additional excise duty on Textile and Textile articles - Rule 5 of CCR, 2004 - whether the accumulated cenvat credit in their cenvat credit account for AED (T&TA) is refundable under Rule 5 of the CCR, 2004 in the facts and circumstances of the case? - Held that: - BED and AED could have been utilised inter-changeably - the appellant is entitled to claim refund of accumulated AED and T & TA lying unutilized in their Cenvat Credit account - refund allowed. In terms of N/N. 11/2002 CE(NT) dated 1.3.2002 whether the appellant is entitled for refund claim or not? - Held that: - This issue has already been settled by this Tribunal in the case of CCE, Jaipur II vs. Bhilwara Spinners Ltd. [2007 (11) TMI 249 - CESTAT, NEW DELHI], where it was held that refund claim u/r 5 of Cenvat Credit Rules cannot be denied unless the assessee claimed drawback or rebate - It is an admitted fact that in this case, the appellant has not claimed draw back of duty / rebate on the exported goods. Therefore, the provisions of N/N. 11/2002 CE (NT) dated 1.3.2002 are not restricting the claim of refund under Rule 5 of CCR, 2004, filed by the appellant - refund allowed. Refund allowed - decided in favor of appellant.
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2017 (10) TMI 791
Reversal of CENVAT credit - suo moto availment of CENVAT credit - Held that: - the facts of the case are identical to the facts in the case of BDH Industries Ltd. [2008 (7) TMI 78 - CESTAT MUMBAI] as in that case also the duty was paid twice, i.e. once for clearance of goods and another time just debit at the end of month. In the said decision it was held that the appellant were not entitled to suo moto take credit of the same - In the said decision it was held that the appellant were not entitled to suo moto take credit of the same - appeal dismissed - decided against appellant.
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2017 (10) TMI 790
CENVAT credit - input services - Outdoor Catering Services - Held that: - the Hon'ble High Court in the case of Commissioner of Central Excise, Nagpur Vs. Ultratech Cement Ltd [2010 (10) TMI 13 - BOMBAY HIGH COURT], upheld the admissibility of CENVAT credit on outdoor catering/canteen facility in manufacturing unit, subject to proportionate disallowance of credit as regards cost of food, recovered from the employee/worker - credit allowed. Extended period of limitation - Held that: - the issue being wholly interpretational in nature and there being no suppression of facts on the part of the appellant-assessee, the extended period of limitation is not invocable - SCN not tenable. Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 789
CENVAT credit - steel items used for fabrication of staircase, platform and walkways of the sugar manufacturing equipment - Held that: - the appellant is entitled to the same because it pertains to the steel items used for fabrication of staircase, platform and walkways which are necessary for the functioning of the capital goods and by following the ratio of the decision in the case of U.P. Sugar [2010 (8) TMI 900 - CESTAT NEW DELHI] - CENVAT credit allowed. CENVAT credit - capital goods - credit on balance 50% - Held that: - the appellant has stated in reply to the show-cause notice that the said credit pertains to 50% credit availed on the steel items during the period from November 2013 to March 2014 and the said credit pertains to the second 50% which was earlier allowed by the Commissioner - credit is admissible to the appellant. CENVAT credit - denial on the ground that no usage proof was provided by the appellant - Held that: - this case needs to be remanded to the original authority to verify the usage of the material amounting to ₹ 1,38,766/- - matter on remand. Appeal allowed in part and part matter on remand.
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2017 (10) TMI 788
CENVAT credit - capital goods - loco and loco parts - Held that: - issue is squarely covered in favour of the appellant by the judgments of the Division Bench of the Tribunal in the case of Bhusan Steel Ltd. [2012 (10) TMI 306 - CESTAT, KOLKATA], where it was held that the locomotive engines are used usually for pulling the passenger/goods trains that Diesel Locomotive torpedo ladle car carrying molten metal up to 300-350 MT is not only enhances the effectiveness, but without it the handling, and in turn production of finished goods would not be possible. Thus the view of Commr. (A) holding Diesel locomotive as accessory of capital goods is upheld and credit allowed - credit allowed. Penalty on General Manager - availment of irregular credit - Held that: - Since the main appeal involving locomotive and parts thereof is allowed , consequently appeal of the General Manager against the penalty is also allowed. Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 787
100% EOU - Refund claim - final product of the appellant is exempted from excise duty - Rule 5 of the CCR - refund claim has been rejected on the ground of technical discrepancies in the invoices raised by the appellant - Held that: - it is a settled principle of law that substantive benefit of credit cannot be denied on procedural or hyper technical objection. Since in this case, all the invoices are raised in relation to services utilised for Malphe Unit which are used for export of final product and benefit has been denied that the input service has not been utilised for the provision of output service - it is already held in the catena of judgements that the substantive benefit of CENVAT credit cannot be denied on mere procedural lapses. It is expected from the adjudicating authority to consider the various decisions given by the Tribunal and relied upon by the appellant - appeal allowed by way of remand.
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2017 (10) TMI 786
CENVAT credit - input services - management consultancy services - extended period of limitation - Held that: - the management consultancy service was taken for all the plants but one of the plant i.e. ARP was abandoned on 01/03/2011 and during the audit in 2010-11, an objection was raised by the Department that the appellant has availed irregular credit but thereafter no show-cause notice was issued till 01/08/2014, which is beyond the period of limitation of one year. The CENVAT credit once rightly availed is indefeasible and subsequent development of abandoning of plant will not make the appellant liable to reverse the CENVAT credit which was rightly availed by them. Further, the appellants have been filing the ER1 returns regularly in which they were showing the CENVAT credit availed by them and invoking the extended period of limitation in the facts and circumstances of this case is not legal and unsustainable - The credit was rightly availed during the period 2005-07 for the purpose of availing the management consultancy service received by the appellant during the said period. Appeal allowed - decided in favor of appellant.
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2017 (10) TMI 785
Penalty u/s 11AC - duty along with interest has been paid by the assessee prior to issuance of SCN - Clandestine manufacture and removal - it was alleged that appellants have suppressed the facts regarding development/manufacture of said packaged software and its removal, with intent to evade payment of duty - Held that: - the excise duty on the packaged software was introduced for the first time w.e.f. 01/03/2006 and the appellant had a bona fide belief that their software is not a packaged software and therefore is not liable to excise duty and that is why the excise duty was not paid - Further, the Department has not brought any evidence on record to show that there was suppression with intention to evade the payment of duty. In the case of CCE, Bangalore-I Vs. Geneva Fine Punch Enclosures Ltd. [2011 (1) TMI 746 - KARNATAKA HIGH COURT], Hon’ble Karnataka High Court held that once the duty is paid along with interest before issuance of the SCN, then Revenue will not issue SCN. Appeal allowed - decided in favor of appellant.
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