TMI Tax Updates - e-Newsletter
October 25, 2017

Case Laws in this Newsletter:

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

TMI SMS

• GST at the rate of 0.1% shall be payable on supply of taxable goods by a registered supplier to a registered recipient for export

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• Jurisdiction under GST - determination of rate of IGST on import of goods - HC refused to interfere into the matter.

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Articles

1. CASE LAWS IN ‘GST’

   By: DR.MARIAPPAN GOVINDARAJAN

2. LEVY OF IGST ON OCEAN FREIGHT IN RESPECT OF IMPORTED GOODS

   By: SURESH ASTEKAR

3. GST under RCM: When to pay (Basic level)

   By: CASanjay Kumawat

News

1. GST Revenue Collection Figures stand at ₹ 92,150 crore as on 23rd October, 2017; Waiver of late fee on filing of GSTR-3B for August and September, 2017 GST Revenue Figures – As on 23rd October, 2017

2. Government of India and the Asian Development Bank (ADB) Sign $300 Million Loan to Promote Further Fiscal Reforms in West Bengal

3. Commerce and Industry Minister Shri Suresh Prabhu launches CIPAM’s Website

4. Draft Notification of amendment of Rule 17A and Form 10A of the Income-tax Rules, 1962 – comments and suggestions thereof.

Notifications

GST

1. 40/2017 - dated 23-10-2017 - CGST Rate

CGST at the rate of 0.05% shall be payable on intra-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions.

2. 41/2017 - dated 23-10-2017 - IGST Rate

IGST at the rate of 0.1% shall be payable on inter-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions.

3. 40/2017 - dated 23-10-2017 - UTGST Rate

UTGST at the rate of 0.05% shall be payable on intra-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions.

GST - States

4. G.O.MS. No. 461 - dated 16-10-2017 - Andhra Pradesh SGST

Amendments in the Notification No. G.O.Ms.No.258, Revenue (Commercial Taxes-II), 29th June, 2017, - Change in rates of tax of certain goods like dried tamarind, roasted gram.

5. G.O.MS. No. 460 - dated 16-10-2017 - Andhra Pradesh SGST

Amendments in the Notification G.O.Ms.No.259, Revenue (Commercial Taxes-II), 29th June, 2017. - Reduction of rate of tax on services provided to the Central Government, State Government, Union Territory, etc.

6. F3(31)/Fin(R-ev-I)/2017-18/DS-VI/675-27/2017-State Tax - dated 20-10-2017 - Delhi SGST

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

7. F.No.12(56)FD/Tax/2017-Pt-III-106 - dated 13-10-2017 - Rajasthan SGST

Amendment in Notification No.F.12(56)FD/Tax/2017-Pt-I-49 dated 29.06.2017.

Circulars / Instructions / Orders

Income Tax

1. 25 of 2017 - dated 23-10-2017

Clarification related to guidelines for establishing ‘Piace of Effective Management’ (PoEM) in India-reg.

GST

2. 11/11/2017 - dated 20-10-2017

Clarification on taxability of printing contracts

Highlights / Catch Notes

GST

• IGST 0.1% Applies to Inter-State Goods for Export Between Registered Parties, Subject to Conditions.

  Notifications : IGST at the rate of 0.1% shall be payable on inter-State supply of taxable goods by a registered supplier to a registered recipient for export subject to specified conditions.
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• New Circular Clarifies GST Taxability for Printing Contracts: Goods vs. Services Classification Crucial for Accurate Tax Rates.

  Circulars : Clarification on taxability of printing contracts - GST - When to be treated as supply of goods or supply of services.
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• High Court Refuses to Change IGST Rate on Imports, Keeps GST Jurisdiction Intact.

  Case-Laws - HC : Jurisdiction under GST - determination of rate of IGST on import of goods - HC refused to interfere into the matter.
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Income Tax

• New Guidelines Define Place of Effective Management for Tax Residency of Subsidiaries in India.

  Circulars : Clarification related to guidelines for establishing ‘Piace of Effective Management’ (PoEM) in India - establishment of PoEM for subsidiaries/ group companies.
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• Income from Hoarding Rights is Taxable as House Property Income; Deduction u/s 24(a) Allowed.

  Case-Laws - AT : Income earned by the assessee, in consideration of having given rights to have play hoardings etc. are taxable as income from house property. Accordingly, deduction u/s 24(a) was indeed admissible
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• Court Rules Tax Additions Must Be Based on Verified Facts, Not Assumptions, in Construction Cost Cases.

  Case-Laws - AT : Genuineness of the purchases and total cost incurred towards the construction - on the basis of such half baked facts addition cannot be made on mere presumption and surmises.
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• Firm's Income Can't Rely Solely on Partner's Statement When Firm Didn't Exist on Survey Date.

  Case-Laws - AT : The sole basis of addition is the statement recorded under oath of one of the partners of the assessee firm which did not exist on the date of survey cannot be the basis for making the addition
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• Tribunal Orders Reconsideration of Assessee's Section 10A Benefits; Directs Assessing Officer to Review Entitlement Claims.

  Case-Laws - HC : Entitlement to benefit of Section 10A - issue raised for the first time before the tribunal - No reason to think that the Tribunal has committed an illegality by directing the Assessing Officer to decide the matter afresh duly adverting to the claim of the assessee - HC
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Customs

• Appellant's request for shipping bill conversion shouldn't be denied solely due to lack of physical exam u/s 74.

  Case-Laws - AT : Admittedly, no physical examination could be carried out. However, the same cannot be the sole reason for refusal of the request of the appellant for considering the claim for converting the shipping bill and to consider their request for drawback u/s 74
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Central Excise

• CESTAT Order on Unutilized Additional Excise Duty Credit Refund Should Be Set Aside for Lack of Legal Provision Denial.

  Case-Laws - HC : The final order passed by the (CESTAT) that the unutilised credit of Additional Excise Duty is refundable merely on the basis that there is no provision in law to deny refund, deserves to be set aside. - HC
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• CESTAT Oversteps: Only Adjudicating Authority Can Decide Interest Entitlement on Refund Claims.

  Case-Laws - HC : It is only the Adjudicating Authority which has jurisdiction to decide whether interest on refund claim should be granted, there was no reason for the CESTAT to have decided the issue of entitlement of the Appellant to claim interest on the refund claim - HC
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• Change of Ownership Doesn't Require Permission for CENVAT Credit Transfer per Rule 10 of CENVAT Credit Rules.

  Case-Laws - AT : Transfer of CENVAT credit - change of ownership - whether permission is required from the jurisdictional authority and is it mandatory for availment of Cenvat credit? - Rule 10 of CCR - Held No
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Case Laws:

• GST

• 2017 (10) TMI 881
  Jurisdiction under GST - determination of rate of IGST on import of goods - Maintainability of petition - alternative remedy of appeal - case of petitioner is that the respondent is neither a proper officer nor an adjudicating authority as defined and contemplated under the CGST Act or the IGST Act - Held that: - a Writ Court cannot make a fact finding exercise to ascertain, which would be an appropriate entry under which the goods are to be classified. It appears that the petitioner did not dispute the classification as under entry 84329010, but submitted that the correct rate of IGST should be at 12%. The respondent has taken a decision by classifying the goods by fixing the rate of tax at 18% and in support of such conclusion has given certain reasons. Exercising jurisdiction under Article 226, I do not propose to venture into as what would be the appropriate classification of the goods as this exercise being a factual exercise has to be necessarily agitated before the appellate authority. - Writ petition dismissed.

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• 2017 (10) TMI 880
  Vires of the Goods and Service Tax (Compensation to States) Act, 2017 - Main grievance of the petitioner is that on the coal imported by it prior to the introduction of goods and service tax regime, the petitioner had already paid clean energy cess at the prescribed rate and on the stock which the petitioner had not cleared, no credit would be allowed on such cess and the petitioner would be asked to pay fresh cess under the Goods and Service Tax (Compensation to States) Act, 2017 and the rules made thereunder - Held that: - issue notice - In view of the fact that the validity of a Union legislation is questioned, let there be NOTICE to the learned Attorney General also.

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• Income Tax

• 2017 (10) TMI 879
  Allowable deduction u/s 37(1) - allowability of employee expenses as business expenditure - commencement of activities in trading - Held that:- Assessee in the course of Assessment Proceedings furnished the complete details in respect of the expenses incurred by the assessee in respect of the employee cost relating to trading activity. On a specific query by the Assessing Officer the assessee also replied why the employee expenses in respect of trading activity was claimed as deduction against profit earned in trading business and why such expenses have not been capitalized, stating that none of these expenses related to the proposed manufacturing facility but were incurred in the operations of trading activity. Assessing Officer and the First Appellate Authority have not appreciated the submissions of the assessee in a proper perspective. The Memorandum of Association clearly shows that assessee is into business of manufacturing, producing, buying, purchasing, selling, distributing, supplying, merchandising, trading, importing, exporting or otherwise dealing in chemicals, chemical compounds, organic and inorganic forms in solid, liquid and gaseous etc., Therefore, assessee is into composite business of manufacturing as well as trading into chemicals. Since the assessee is into the business of trading and manufacturing of chemicals and since the assessee has commenced its activities in trading during this Assessment Year the expenses relating to the trading activities cannot be denied for the reason that assessee has not commenced its manufacturing operations of chemicals. We also see no reason for denying the expenses simply because assessee has incurred huge expenses towards salary and other expenses in trading activity which has only commenced during this Assessment Year. Thus, we direct the Assessing Officer to accept the assessee’s claim for expenses as returned by the assessee in its return of income and allow the loss claimed by the assessee on account of the claim for such expenses. Grounds raised by the assessee are allowed.

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• 2017 (10) TMI 878
  Reopening of assessment - Estimating net profit @ 6% on the alleged unproved purchases - Held that:- The return of income filed by the assessee for the AY 2009-10 and 2011-12 were processed u/s 143(1) only. In the case of ACIT vs. Rajesh Jhaveri Stock Brokers P. Ltd.(2007 (5) TMI 197 - SUPREME Court) has held that information u/s 143(1)(a) is not an assessment and the notice u/s 148 issued by the AO was valid. Therefore, in the instant case after receipt of information from the Sales Tax Department, Government of Maharashtra, the AO has rightly issued the notice u/s 148. Thus the ground raised by the assessee against the issuance of notice u/s 148 by the AO for the AY 2009-10 and 2011-12 are dismissed. For estimation of NP on bogus purchases it is the duty of the AO to enforce attendance of a witness if his evidence is material. At the same time the assessee must furnish the complete address of such person.A proper hearing must always include a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view. Cross-examination is allowed by procedural rules and evidently also by the rules of natural justice. Any witness who has been sworn on behalf of any party is liable to be cross-examined on behalf of the other party to the proceedings. In view of the above, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make a fresh assessment in the light of our observation hereinbefore after giving opportunity to the assessee to cross-examine the concerned parties. We also direct the assessee to file the relevant documents/evidence before the AO.

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• 2017 (10) TMI 877
  Income from house property - income earned in consideration of having given rights to have play hoardings etc. - Held that:- The assessee Society is a tenement co-operative housing society, in which ownership of the land and building vests in the society itself, and not the member of society. The consideration received by the assessee is for the right to install the hoarding rather than rent for hoarding installed by the assessee. The above observations are thus equally valid in the present context. In view of the above discussions, as also bearing in mind entirety of the case, hold that the income earned by the assessee, in consideration of having given rights to have play hoardings etc. are taxable as income from house property. Accordingly, deduction under section 24(a) was indeed admissible in the present case. Direct the Assessing Officer to allow the deduction under section 24(a), as claimed by the assessee. - Decided in favour of assessee.

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• 2017 (10) TMI 876
  Addition being 11% of the business expenditure u/s. 69 - Held that:- Assessing Officer has not brought on record any reasons for inclusion of manufacturing expenses which include fabrication and embroidery expenses and wages for working out the percentage of disallowance. There is not even a whisper as to why the Assessing Officer has chosen to include these expenses for making the disallowance. In the absence of reasons or any justification for disbelieving the genuineness of the manufacturing expenses, we are of the view that there is no basis for including the sum of Rs. 173.82 lacs for disallowance, the inclusion of manufacturing expenses in the disallowance. Keeping in view of the facts and circumstances of the case, we are of the view that there is no need to interfere in the impugned order on this issue, hence we uphold the same. With regard to the bogus purchases it is a fact that the purchases are hypothecated with the bank and in the absence of purchases i.e. stock, the banker would generally not give the loan to the appellant. The existence of Shri Anil Nagpal. proprietor of M/s Baba Finishers has also been adequately proved, in view of his physical presence before me as also the particulars of Permanent Account Number card and passport shown to me. That Shri Anil Nagpal is an Incometax assessee and has filed his Income-tax returns is also an undisputed fact. For the relevant year, his balance sheet, profit and loss accounts disclose transactions with the appellant company. In the light of these evidences, the appellant has satisfactorily discharged its onus of proving that the purchases made from the two parties were genuine and were liable for deduction under section 37(1) of the Income-tax Act. The Assessing Officer on the other hand has not been able to rebut the evidences Finished by the assessee. The Inspectors report stating the non-existence of E-64, Chankaya Palace, Janak Puri, New Delhi has been adequately rebutted by the evidences Finished by the Ld. Counsel as discussed above which prove the existence of E-64, Chankaya Palace, Janak Puri, New Delhi and the carrying of the business by Shri Anil Nagpal. Thus it was held that the address has satisfactorily discharged its onus and the Assessing Officer has failed to make out a justifiable case for disallowance of 11.77% of the consumables as bogus/inflated or unproved. As above, it has been already held that the inclusion of manufacturing expenses for determining the disallowance was totally unjustified. In effect it was rightly held there is no case for making the disallowance of Rs. 1,90,25 OO. Therefore, the disallowance made by the Assessing Officer was rightly deleted, which does not need any interference on our part. Appeal of the Revenue is dismissed.

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• 2017 (10) TMI 875
  Penalty u/s 271AAA - undisclosed income which was surrendered by the assessee during the course of assessment proceedings - Held that:- The amount was found during the course of search which the assessee claimed to be his wife’s savings/pin money. This amount was not surrendered at the time of search but was surrendered subsequently during the course of assessment proceedings by assessee surrendering the same in his own hands in the computation of income. Therefore, as per the specific provisions of section 271AAA, this amount does not specifically fall under the definition of undisclosed income found during the course of search. It is also noteworthy that the assessing officer accepted this surrender without any questions asked. Even if for the sake of argument, the same is accepted as to be cash found during the course of search, it is undisputed that the assessee has paid tax due thereon. The assessee has already explained the source that is savings/pin money of his wife and as far as the substantiation is concerned, it would be relevant to mention here that given the fact that it is a search case, the question of specifying and substantiating the manner in which the undisclosed income has been derived can be somewhat general and omnibus and no precise calculations or computations can be done with reference thereto. Thus we are of the considered view that the levy of penalty u/s 271AAA in the instant case - Decided in favour of assessee.

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• 2017 (10) TMI 874
  Addition of business income - compensation received by the assessee from Bhuminath Construction - addition on estimation basis - Held that:- There is no dispute about the fact that the assessee and Bhuminath Construction have entered into MoU for development of a Hotel. It is also a fact that as per the terms of MoU, Bhuminath Construction will advance a sum of Rs. 5 crore in installments to the assessee for development of the project. It is also made clear in the MoU that the said amount of Rs. 5 crore shall be interest free. Neither of the Departmental Authorities have taken into consideration the advantage derived by the assessee from the interest free fund received by it from Bhuminath Construction. Moreover, it appears that in case of Bhuminath Construction, the Assessing Officer has accepted the compensation paid of Rs. 6,75,150 to the assessee while completing the assessment. Therefore, if actually higher compensation has not been paid to the assessee, no addition can be made notionally and on mere presumption and surmises that the assessee might have received excess compensation or the compensation received is meager. Commissioner (Appeals) has categorically stated that the Assessing Officer had never doubted the genuineness of the purchases and total cost incurred towards the construction, however, he has sustained the addition primarily for the reason that expenditure incurred by the assessee on account of interest payment at Rs. 9,60,000 is more than the compensation received. However, on a perusal of the audited Profit & Loss account for the year ending 31st March 2007, we find the total expenditure debited to the Profit & Loss account of Rs. 6,30,617, including interest expenditure of Rs. 1,59,706. Thus, we are unable to understand where from the learned Commissioner (Appeals) has obtained the interest payment amount of Rs. 9.60 lakh. Thus, on the basis of such half baked facts addition cannot be made on mere presumption and surmises. Therefore, we have no hesitation in deleting the addition made on estimate basis.

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• 2017 (10) TMI 873
  Addition on basis of statement recorded under oath of one of the partners of the assessee firm which did not exist on the date of survey - department’s survey u/s. 133A - Discontinued business - whether the discrepancy in the stock of pig iron, scrap and cash can be assessed in the hands of the assessee firm, when undisputedly it has been taken-over from 01.09.2008 by a Private Limited Company? Held that:- Admittedly, when the survey was conducted on 29.09.2008, the assessee firm’s business including the stock in trade has been taken-over by the company and if any discrepancy is found when physical verification is done on 29.09.2008 it should have been answered by the company which is an artificial juristic person and is assessed as a separate assessee. When the department was aware of the takeover when the survey has happened, we do not understand why the company was not proceeded against. We note that the entire addition has been based on the statement given by the one of the partner of the firm which has been taken on oath. There are two deficiencies/flaw for this. Firstly, the partner is not there in the eyes of law, when the firm is not existing . Secondly, the survey team does not have power to record statement on oath. The Hon’ble Supreme Court in CIT Vs. S. Kader Khan & Son (2013 (6) TMI 305 - SUPREME COURT) has held that during survey the statement cannot be taken on oath and, therefore, there is no evidentiary value given on the recorded statement on oath during survey and additions cannot be made solely on the basis of statement recorded under oath. We find that the sole basis of addition is the statement recorded under oath of one of the partners of the assessee firm which did not exist on the date of survey on 29.09.2008 cannot be the basis for making the addition. Therefore, we find force in the grounds raised by the assessee and we allow the appeal of the assessee.

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• 2017 (10) TMI 872
  Entitlement to benefit of Section 10A - issue raised for the first time before the tribunal - Only when the Commissioner was seized of the proceedings under Section 263, the assessee raised an alternative claim for the benefit of Section 10A - Tribunal illegality by directing the Assessing Officer to decide the matter afresh duly adverting to the claim of the assessee for the benefit of Section 10A - Held that:- Admittedly, the assessee initially claimed the benefit of Section 10B which was allowed by the Assessing Officer. Only when the Commissioner was seized of the proceedings under Section 263, the assessee raised an alternative claim for the benefit of Section 10A. The Commissioner did not examine that plea and on the other hand, directed the Assessing Officer to withdraw the exemption under Section 10B. It was this order which was challenged by the assessees in the appeals filed by them before the Tribunal. Such an appeal filed by the assessee is liable to be considered by the Tribunal exercising its power under Section 254 of the Act which obliged the Tribunal to consider the appeal and pass such orders thereon as it thinks fit. It was this power of the Tribunal which was considered by the Apex Court in NTPC's case [1996 (12) TMI 7 - SUPREME Court] which held that where the Tribunal is only required to consider the questions of law arising from the facts which are on record, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Even if the contention raised by the learned Senior Counsel for the revenue that the power conferred on the appellants under Section 263 only authorised him to examine whether the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue, that restriction of power cannot affect the powers of the Tribunal which is bound to exercise under Section 254 of the Act. No reason to think that the Tribunal has committed an illegality by directing the Assessing Officer to decide the matter afresh duly adverting to the claim of the assessee for the benefit of Section 10A. - Decided in favour of the assessee

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• 2017 (10) TMI 871
  Addition u/s 68 - amount received from the party during the year through various cheque - Held that: - The Assessing Officer made the addition by summing up all the receipts from this customer and ignoring that the assessee had also effected sales to it through various transactions. Genuineness of such sales transactions has not been doubted by the AO - it is not convincing as to how an addition u/s 68 of the Act can be made for the amounts received from a customer to whom regular sales have been made during the year. It is, ergo, held that the addition was wrongly made and sustained. Addition deleted - appeal allowed.

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• 2017 (10) TMI 870
  Stay application - case of petitioner is that the application for stay has been rejected without any application of mind and without going into the contentions raised by the petitioner - Held that: - application dated 3rd January, 2017 made by the petitioner is as vague as possible. The impugned communication dated 14th August, 2017 does not contain any reason - Notwithstanding the impugned communication, it will be open for the petitioner to make a fresh application for stay of demand to the Assessing Officer - application rejected.

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• 2017 (10) TMI 869
  Deduction under Section 80HHC - retrospective effect of amendment in section 80HHC - Sections 3 and 4 of Taxation Laws (Amendment) Act, 2005 - Held that: - The issue has been settled by the decision of the Honourable Supreme Court in the case of COMMISSIONER OF INCOME TAX AND ANOTHER V. AVANI EXPORTS exporters having turnover below Rs. 10 crores and those having turnover above Rs. 10 crores should be treated similarly - petition allowed.

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• 2017 (10) TMI 868
  Deduction u/s 54B of the Act - Investment in agricultural land - denial of deduction on the ground that the sale was by way of an agreement to sell and not through registered Deed - Held that: - the assessee paid the consideration through cheques and also obtained the possession of the property in question - the word ‘Purchase’ cannot be interpreted and detached from the definition of word ‘transfer’ as given u/s 2(47) of the Act. When the transfer takes effect as per the provisions of section 2(47) of the Act, if a liability to pay tax arise in the case of the seller, the consequent right to get deduction on the purchase of property accrues in favour of the purchaser, if he otherwise is so eligible to claim it as per the relevant provisions of the Act. The Assessing officer is directed to give the benefit of deduction u/s 54B of the Act in respect of the purchase of the property at Village Dadu to the assessee - appeal allowed - decided in favor of assessee.

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• 2017 (10) TMI 867
  Registration u/s 12AA - bogus donation - cancellation of registration - Held that: - While it is possible that a particular donation may be bogus or fictitious and, as such, the assessee may be assessed to tax therefor and other steps may be taken against the assessee for recovery of interest or penalty, if permissible; but the fact that one donation may be bogus would not establish that the activities of the trust are not genuine or that the activities are not being carried out in accordance with the objects of the trust - However, if there are multiple bogus transactions of similar kind, it may lead to the reasonable assessment of the commissioner that the trust may be engaged in such activities and, as such, the activities of the trust may be found to be not genuine or such activities may be found not to be in conformity with the objects of the trust. The matter has been remanded before the appropriate commissioner, but only for the purpose of ascertaining whether the officials of the donor would stand by their statements in the wake of any cross-examination that they may have to face from the petitioner herein - appeal allowed by way of remand.

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• Customs

• 2017 (10) TMI 866
  Valuation - re-rollable steel scraps - rejection of declared value - the bills of entry were assessed on enhanced value, on the basis of cotemporaneous value of steel scraps imported by the other importers - Section 17 (5) of the Customs Act, 1962 - Held that: - at no point of time the appellant have any occasion to lodge a protest. The bills of entry were filed and the same have been assessed and the appellant has paid the duty to avoid detention and demurrage charges. At no point of time, the appellant has accepted the enhanced value or have offered to the authorities below to enhance the value. In this case the value of contemporaneous imports has been taken as a basis for enhancing the price. The transaction value has not been rejected under Section 14 of the Customs Act, read with Rule 3(2) of the Customs Valuation (Determination of Price of Imported Goods) Rules, 2007. Also, no samples were drawn from the consignments and no laboratory reports of the contents of the said goods are available - reliance placed on the decision in the case of S.K. Dhawan vs. CC (Import) Mumbai [2016 (3) TMI 888 - CESTAT MUMBAI]. The transaction value cannot be rejected on the basis of contemporaneous value of steel scrap in the absence of the details of such cotemporaneous imports and relied by the authorities below without bringing the evidence of undervaluation - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 865
  Advance Authorisation Scheme - clubbing of advance licences and export obligation discharge in respect of some of the advance licences - main contention of appellant is that consequent to the approval granted by DGFT for clubbing of the advance licences and regularization of export obligation, the quantity of excess raw materials utilized will necessarily have to be calculated as the net excess quantity after clubbing of the advance authorizations- Held that: - There is considerable merit in this ground of appeal put forth by the appellant, especially when viewed in the context of the letters of DGFT, conveying permission for clubbing of licences and regularization of export obligation. Only in the interest of expediting decision in this appeal, and only based on the request made by the departmental representatives themselves, was a request made by this Bench on 05.10.2016 to the concerned Commissioner for causing verification of these averments. Surely that did not involve any complicated procedural and protracted procedural impediments to cause ascertainment requested for. All that was required to confirm the veracity of copies of the letters submitted by the appellant as having been issued by the DGFT. In case, once the fact of the permission for clubbing of advance authorization and regularization of export obligation has been approved by the DGFT, it only remains to rework the net duty liability and interest thereon, and, to ascertain whether such liability worked out are in sync with that paid by the appellant and appropriated in the impugned order. Sadly, that has not happened. Even at this stage, we find from the letter dt. 07.09.2017 that the Review Cell of Air Cargo Customs, Chennai has only transferred the responsibility to the Asst. Commissioner (DEEC) Group-7D of Chennai Seaport Customs. The end result is akin to the story of "Where Everybody Blames Somebody when Nobody did what Anybody could have done". We also note that even in the nine hearings that have happened in this appeal in the last one year, for reasons we are not aware, three different ARs have appeared on behalf of the department - This is certainly not in keeping with the mission of National Litigation Policy which aims to transform the Government into an efficiency and responsible litigant. We are constrained to remand the matter to the original authority for de novo consideration - appeal allowed by way of remand.

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• 2017 (10) TMI 864
  Smuggling - opening of the “Sealed cover” - During this period, the Department of Revenue Intelligence (DRI) found some undeclared material, concealed behind cartons of papers in a consignment - whether, there was any obligation cast on the Petitioners to open the sealed cover immediately after 24th June, 2015, in view of the admitted position that no clean chit had been given to the Respondent on the said date, meaning thereby that he had not been exonerated? - Held that: - The undisputed position which emerges from the record is that the Respondent was initially placed under suspension on 4th October, 2013. His suspension was extended from time to time as per provisions of Rule 10 of the CCS (CCA) Rules. A DPC was convened on 17th June, 2015 on which date the case of the Respondent was kept in a sealed cover. It is also an undisputed fact that the Respondent’s suspension was revoked on 24th June, 2015 i.e. prior to the date when his juniors were promoted, vide order dated 30th June, 2015. The petitioner was neither under suspension, nor any kind of chargesheet had been issued to the Respondent on the date of promotion of his juniors. It is an undisputed fact that, till date, the respondent has actually not been promoted. Another undisputed fact is that one of the circumstances mentioned in para 2 of the OM dated 14th September, 1992, has arisen on 24th October, 2016 by way of issuance of a chargesheet to him. Consequently, disciplinary proceedings against the respondent are underway. We find that there is a specific bar in the OM, which envisages that in such circumstances, where any of the situations mentioned in para 2 arises before the actual promotion of the government servant, he will not be promoted until he is completely exonerated of the charges against him. We are, thus, of the considered view that the claim of the respondent for opening the sealed cover or giving effect to the recommendations of the DPC is not at all sustainable. The respondent, who was under the cloud even when his suspension was revoked, as the matter was pending consideration with the CVC, would stand rewarded, notwithstanding the fact that a chargesheet has been issued to him some time thereafter, for which he is admittedly facing a departmental inquiry. Neither the OMs dated 14th September, 1992 and 2nd November, 2012 nor the decisions of the Supreme Court, relied upon by the Respondent, supports his claim for opening of sealed cover at this stage. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 863
  Smuggling - Betel nuts - burden of proof - Held that: - It is well settled that the Betel Nuts are non-notified item and the onus lies with the department to establish the smuggled nature of goods - In the present case, the department had not discharged the burden of proof - In a recent decision, in the case of Maqsood Alam v. Commissioner of Customs, Lucknow [2015 (5) TMI 131 - CESTAT NEW DELHI], the Tribunal in identical situation allowed the appeal, and held that mere suspicion based on circumstances is not sufficient to sustain the allegation of smuggling. In the present case, both the authorities below proceeded on the basis of visual examination. They have ignored the evidences. Hence, such order cannot be sustained in the eye of law - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 862
  Release of seized goods - certificate evidencing local procurement of goods - Held that: - It is not in dispute that the Deputy Commissioner has received the copies of Annexure I, II and III mentioned in the said letter - by way of further adinterim relief, we direct that Shri Rahul Yadav, the Deputy Commissioner of Customs or any appropriate Officer of the Customs to release articles/goods which are in godown but which are not part of the Annexure SM1. This exercise shall be completed by the first respondent within a period of one week from today.

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• 2017 (10) TMI 861
  Release of detained goods - non-participation in the proceedings - Held that: - taking note of the letter of the third respondent dated 05.04.2017 and as the fourth respondent has not participated in the proceedings, whatever applies for the goods covered under the Bill of Entry No.7285334, dated 31.10.2016, will equally apply to the consignment covered in the Bill of Entry No.6885665, dated 27.09.2016 - there will be a direction to the third respondent to cause assessment and release the goods covered in the Bill of Entry No.6885665, dated 27.09.2016 and Bill of Entry No.7285334, dated 31.10.2016 - petition allowed.

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• 2017 (10) TMI 860
  Confiscation - Gold/jewellery - foreign convertible currency - Held that: - It is not clear as to what is the stage of the Revision Petition filed by the Department and whether it has been taken on file etc. Since the Assistant Commissioner (Legal), Chennai has informed the petitioner that the outcome of the Revenue's appeal is shortly awaited by letter dated 23.01.2017. The present stage of the matter has not been placed before the Court by the Revenue - the respondent directed to release the gold/ jewellery for the purpose of re-export, subject to the petitioner complying with the condition imposed by the Commissioner (Appeals-I) - petition disposed off.

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• 2017 (10) TMI 859
  Entitlement of interest - delayed Refund of SAD - N/N. 102/2007-Cus. - section 27A - Held that: - the issue is squarely covered by the decision in the case of Principal Commissioner of Custom Versus Riso India Pvt. Ltd. [2015 (10) TMI 1099 - DELHI HIGH COURT], where it was held that Department was not justified in denying interest to Respondent on the delayed refund of SAD by resorting the para 4.3 of the CBEC’s Circular No.6/2008 - interest granted - appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 858
  Conversion of shipping bills - free shipping bills to drawback shipping bills - rejection on the ground that the goods have left the country on the basis of free shipping bill without due examination by the customs officers as such, the provisions of Section 74 could not be availed by the appellant as there is no physical examination of the goods to identify them to be the same which were originally imported by them - Held that: - The import and export goods should be same for applying the provisions of Section 74. Such identity can no doubt established by physical examination and /or by documentary verification - admittedly, no physical examination could be carried out. However, the same cannot be the sole reason for refusal of the request of the appellant for considering the claim for converting the shipping bill and to consider their request for drawback under Section 74. The Board in the circular dt. 23/09/2010, in fact, clarified that the Commissioner may allow all industry rate of duty drawback on goods exported under free shipping bill, without conversion of such free shipping bill to drawback scheme shipping bill, in terms of the proviso to Rule 12(1)(a) of Drawback Rules, 1995. The appellants imported certain items and cleared them on payment of duty. Later after 4 months, they exported the said items. We are dealing with engineering product of easily identifiable nature with documentary support - Tribunal while dealing with similar requests by the exporters held that the refusal of conversion of the free shipping bill to drawback shipping bill cannot be on the basis of non-examination of such export cargo - In Essar Oil Ltd. Vs. CC, kandla [2014 (5) TMI 635 - CESTAT AHMEDABAD], it was held that even though no samples could be drawn on the furnace oil exported, to establish the exact nature of the product, based on documentary evidences, the conversion of shipping bill into drawback shipping bill and processing of the claim can be done. The conversion of shipping bill as sought for, allowed - appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2017 (10) TMI 856
  Corporate insolvency process - whether the Adjudicating Authority cannot exclude any court from the purview of Moratorium for the purpose of recovery of amount or execution of any judgement or decree, including the proceeding, if any, pending before the Hon’ble High Courts and Hon’ble Supreme Court of India against a ‘corporate debtor’? - Held that:- From clause (a) of sub-Section (1) of Section 14, it is clear that institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order by any court of law, tribunal, arbitration panel or other authority come within the purview of ‘moratorium. The said provision specifically do not exclude any Court, including the Hon’ble High Courts or Hon’ble Supreme Court of India. There is no provision to file any money suit or suit for recovery before the Hon’ble Supreme Court except under Article 131 of the Constitution of India where dispute between Government of India and one or more States or between the Government of India and any State or States on one side and one or two or more States is filed. Some High Courts have original jurisdiction to entertain the suits, which may include money suit or suit for recovery of money. The Hon’ble Supreme Court has power under Article 32 of the Constitution of India and Hon’ble High Court under Article 226 of Constitution of India which power cannot be curtailed by any provision of an Act or a Court. In view of the aforesaid provision of law, we make it clear that ‘moratorium’ will not affect any suit or case pending before the Hon’ble Supreme Court under Article 32 of the Constitution of India or where an order is passed under Article 136 of Constitution of India. ‘Moratorium’ will also not affect the power of the High Court under Article 226 of Constitution of India. However, so far as suit, if filed before any High Court under original jurisdiction which is a money suit or suit for recovery, against the ‘corporate debtor’ such suit cannot proceed after declaration of ‘moratorium, under Section 14 of the I&B Code.

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• 2017 (10) TMI 855
  Corporate Insolvency Resolution Process - guarantor contends that, in case his personal property is sold to realise the portion of the debt outstanding against M/s. Veesons Energy Systems Private Limited, the same shall create charge on the assets of the Corporate Debtor which shall amount ‘encumbering’ the properties of the Corporate Debtor - Held that:- Certainty in the event the guarantor fulfils his obligation for payment of outstanding debt of the Corporate Debtor, he has every right on the assets of the Corporate Debtor to the extent he has paid the outstanding debt to the creditors. It is clear that if the Financial Creditor during the Corporate Insolvency Resolution Process and declaration of the moratorium is permitted to proceed against the personal guarantor of the Corporate Debtor for recovery of the outstanding debt to the extent of the personal guarantee given, then, the security interest, if any, of the Financial Creditor shall get transferred to the guarantor which will be in violation of Section 14(1)(b) of the I&B Code, 2016. In the light of the above, Interlocutory Application of the personal guarantor is allowed. The 2nd Respondent, State Bank of India is restrained from proceeding against the personal guarantor till the period of moratorium is over.

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• Insolvency & Bankruptcy

• 2017 (10) TMI 857
  Corporate insolvency process - lack of notice of dispute - whether there is any notice of the dispute on behalf of the Corporate Debtor received by the Operational Creditor? - Held that:- There is an affidavit dated 21.08.2017 by the Authorised Representative that the petitioner has not received the full payment despite the service of demand notice nor the Operational Creditor has received any notice of dispute from the Corporate Debtor. There is a clear default committed by the respondent and this fact has not even been disputed nor any response has been filed despite opportunity having been granted. No defect in the application has been found or pointed out and there is compliance of the mandatory requirements of Section 9 (3) (b) and (c) of the Code. The petitioner has delivered the invoices for payment to the Corporate Debtor. The petitioner has even filed a copy of the statement of the bank of account i.e. its financial institution HDFC maintaining the account of the petitioner. The petitioner has also proposed the name of the Insolvency Resolution Process Mr.Adesh Kumar Singla, who has given the written communication in Form 2 giving all the necessary particulars. That communication is found to be in order.In view of the above, the petition deserves to be admitted.

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• Service Tax

• 2017 (10) TMI 854
  Valuation - sub-contract - petitioner contested the demand and produced Challan to prove that the main Contractor had paid service on the value, which was inclusive of value of service rendered by the petitioner - Held that: - Admittedly, the petitioner has not produced any document except the Challans evidencing payment of service tax by two Contractors. The adjudicating authority has rightly held that the Challans produced by the petitioner could not be taken into account for the purpose of establishing as to whether service tax in respect of the service rendered by the assessee to the above mentioned Contractors have been included in the payment made by them - The petitioner shall produce all the supporting documents before the Original Authority for decision afresh - appeal allowed by way of remand.

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• 2017 (10) TMI 853
  Refund claim - export of services - whether the services akin to that of the Respondent are to be treated as “Export of Service” as per provisions of the Export of Services Rules, 2005? - Held that: - the "Export of Service" may have taken place in India provided with the benefits of the services accrued outside India - "Export of Service" has been clearly held to be applicable where the benefit of service has accrued outside India. The Respondent's service i.e. delivering cash in India to the beneficiaries of the foreign principals, although appearing to have been rendered in India, but in true sense the beneficiaries of their services accrued outside India i.e. to foreigners who intended to transfer their money from foreign countries to their beneficiaries in India by utilising the services of Western Financial Services Inc., USA - the Appellate Tribunal is justified in rejecting the Appeal of the Appellant and arrive at the finding that the services rendered by the Respondent would fall under the category of “Export of Service” and the Respondent is not liable to pay service tax on the same. Appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 852
  Whether the Tribunal, under the facts and circumstances, was justified in holding that Notification No. 01/2006 ST is in confrontation with the charging section, Section 66 of the Finance Act, 1994? - Held that: - On plain reading of paragraphs 5 and 5.1, we find that there is no consideration of the detailed submissions made by the Appellate Revenue before CESTAT. In paragraphs 5 and 5.1, only the conclusions have been recorded without recording any reasons. We are constrained to hold that the impugned judgment and order is perverse and hence, the same deserves to be set aside - appeal is restored to the file of CESTAT, West Zonal Bench at Mumbai

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• 2017 (10) TMI 851
  Valuation - reimbursable expenses - whether the appellant is liable to pay service tax under reverse charge on the amounts paid to the mutual fund distributors in debit notes? - Held that: - the Tribunal in a number of cases has observed that once tax stands paid by the service provider, sub-contractor etc., second time confirmation of service tax on the service recipient would amount to double taxation - it needs to be examined as to whether service tax was paid by the service provider in respect of reimbursable expenses collected from the appellant by way of debit notes or not - appeal allowed by way of remand.

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• 2017 (10) TMI 850
  Levy of tax - commission earned by arranging charter of vessels operated by their clients overseas - non-receipt of the consideration in convertible foreign exchange - proviso to section 73(1) of Finance Act, 1994 - Export of Service Rules, 2005 - Held that: - there is no dispute that the recipients of the service provided by assessee are located outside the country. However, the bar to extending the eligibility for exemption under Export of Service Rules, 2005 is the rendering of services in India and the receipt of commission in Indian currency - it cannot be held that the activity of the assessee in promoting the interests of its clients in relation to the contracts between their clients and the Indian entities has been performed within India. Whether the consideration has been received in foreign currency as claimed by the assessee? - Held that: - it is only after 18th April 2006 that receipt of foreign currency was explicitly included as a condition in Export of Service Rules, 2005. Accordingly, any levy pertaining to the period prior to that would not sustain. Having exported services, the assessee is not liable to tax - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 849
  Refund claim - time limitation - reverse charge mechanism - 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 impugned order is not sustainable in law as the same is contrary to the decisions of the Hon’ble Supreme Court in the case of Anam Electrical Manaufacturing Co. [1997 (1) TMI 80 - SUPREME COURT OF INDIA], where it was 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 allowed - decided in favor of appellant.

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• 2017 (10) TMI 848
  Classification of services - C&F Agent service - appellant supplied imported LPG to other contracted oil companies and getting storage rent - Held that: - the appellant has never acted as an agent of other oil companies. In fact the LPG as imported is owned by the appellant. He is selling some part of it as per the requirements of other oil companies. They are charging certain amount as a rent for storage and upkeep of this LPG. We find any such arrangement, there is no obligation of C&F agency work. In fact, the appellant is not preparing any documents on behalf of other oil companies for selling / clearing the LPG to any third party - demand not sustainable. Extended period of limitation - Held that: - the appellant came forward and got themselves registered for service tax in August 2002 itself. Hence the present demand notice issued on 06/07/2005 based on such contractual arrangement, which is in the knowledge of the Department for many years, is clearly hit by limitation. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 847
  Classification of services - Clearing and Forwarding Agency Service - case of appellant is that they were only rendering commission sales agent services and were not indulging in any clearing and forwarding services - Held that: - It is specifically stated in the agreement that the principal has appointed the appellant for the purpose of effecting consignment / commission sales to their goods. It is not stated in the agreement that the appellant has to undertake clearance of the goods from the principal. This makes it clear that the appellant does not fall within the category of clearing and forwarding agent service - appeal allowed - decided in favor of appellant.

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• Central Excise

• 2017 (10) TMI 846
  SSI exemption - threshold exemption limit - it was found that CMP-Unit I, had sold both exempted and dutiable goods, during the period from 2002-03 to 2005-06 and the aggregate turnover, exceeded 300 lakhs (prior to 01.04.2004)/400 lakhs (after 01.04.2016) - whether, on the basis of the facts pleaded, the assessee is entitled to the benefit of SSI exemption, under N/N. 8/2003-CE, dated 01.03.2003, excluding certain clearance/turnover from the aggregate clearance computed, as per the Notification? Held that: - the assessee has not offered any explanation, on suppression of facts and considering the decisions relied on by the respondent, notification, under which, exemption was claimed, the Commissioner of Central Excise, Chennai-II Commissionerate, Chennai, has held that the assessee is not eligible for the benefit of exemption, on the basis of value of clearances, in a financial year, in terms of N/N. 08/2003-CE, dated 01.03.2003, as amended for the packing cartons and boxes manufactured and cleared by them, during the period from 2003-04 to 2006-07 (upto 12/2006). Show cause notice, dated 13.06.2007, has been issued, seeking for an explanation for imposing duty, interest and penalty. All the issues, including invoking of extended period, have been considered by the adjudicating authority in Order-in-Original, dated 11.09.2007. When the Tribunal has remitted the matter to the adjudicating authority, to re-do the matter afresh and to pass a reasoned order, on all legal and factual plea, further directions that no penalty should be imposed on the respondent, upon re-adjudication, would be amount to pre-judging the issue, by the Tribunal, on the issue of penalty. When the entire matter is directed to be adjudicated afresh, there cannot be a finding by the Tribunal, on one of the issues, raised in the show cause notice, viz., penalty. Order of the Tribunal is contrary to the exercise to be done, afresh by the adjudicating authority and the same requires to be set aside. Final order directing the matter to be adjudicating authority to re-do the adjudication, is sustained. Appeal allowed in part.

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• 2017 (10) TMI 845
  CENVAT credit - H.R.Coils, H.R. Sheets, M.S. Plates etc. - denial of credit on the ground that these items were structural items ordinarily used for civil construction or construction of factory shed - Held that: - the Commissioner (Appeals) proceeded on the basis of the Chartered Engineer's Certificate and followed the user test - Revenue have not countered such evidence in their grounds of appeal except reference of case laws - appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 844
  CENVAT credit - Capital goods - various iron and steel items used by them either as supporting structurals or for manufacture of components for the other capital goods, to be used in their chemical plant - time limitation - Held that: - the appellant kept their right to claim the credit, in abeyance. It was the accumulated credit, which was not being availed during the relevant period, on account of the legal proceedings having been initiated against them - such an action on the part of the assesse, with the stand taken as per the advice of the jurisdictional officers, would not subsequently attract the limitation prescribed under Rule 4(1) of the Cenvat Credit Rules. The said rules were amended with effect from 01.03.2015. Whether the same would be applicable retrospectively or prospectively is an issue required to be considered - appeal allowed by way of remand.

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• 2017 (10) TMI 843
  CENVAT credit - input services for job-worker - Job Work Godown Rent/Electricity Charges - Diesel Purchase for Genset - Diesel Purchase for Job Work purposes - DG Gen Set Hire Charges - denial on the ground that these are input services for the job-workers and not for appellants (principal manufacturer) and on the ground that job-work manufacturers are exempt under N/N. 25/2012-ST, dated 20.06.2012 - Held that: - Rule 3(1) of CCR, 2004 specifically allows credit of service tax paid on input services used in the manufacture of intermediate products by a job-worker availing the benefit of exemption under N/N. 214/86-CE, dated 25.03.1986 and received by the manufacturer for use in or in relation to manufacture of final product - Reliance placed in the case of MRF LTD. Versus COMMISSIONER OF C. EX. & ST. (LTU), CHENNAI [2014 (1) TMI 822 - CESTAT CHENNAI], where it was held that principal manufacturer is entitled to avail credit on services used by job worker manufacturing goods on behalf of the principal manufacturer availing exemption under N/N. 214/96-CE, dated 25.03.1986. CENVAT credit - Godown Maintenance - Held that: - The denial of credit in respect of these services on the ground that the service is provided outside the godown is not sustainable, as, input services need not necessarily be provided within the factory/godown, as held by the Hon'ble Bombay High Court in the case of Deepak Fertilizers & Petrochemicals Corpn- Ltd. Vs. Commissioner of Central Excise, Belapur [2013 (4) TMI 44 - BOMBAY HIGH COURT] - credit allowed. CENVAT credit - Photography Service - ISD invoice - Held that: - even after 01.04.2011 the Photography Services have to be considered as part and parcel of Advertisement, Brand Promotion and Sales Promotion Services and, therefore, credit of service tax paid thereon is admissible. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 842
  Refund of the excise duty paid on steel and cement used in construction of such houses - Denial on the ground that the refund claim for the period 1.10.2005 to 31.12.2005 was filed beyond the period of 120 days as mentioned in N/N. 32/2005 - Held that: - As per clause (c) of the exemption Notification, the refund claim has to be filed within 60 days at the end of the relevant quarter and such period may be extended by the jurisdictional Excise officer by another 60 days. The purpose of exemption was refund of duty paid on cement and steel used in construction for houses for Tsunami affected people which is a Notification issued in public interest. The view taken by the Commissioner (Appeals) that strict adherence to the time limit for filing refund claims in such notification would result in adversely affecting thereby defeating the very purpose of the notification has to be agreed upon in the peculiar facts and circumstances of the present case. Refund allowed - appeal dismissed - decided against Revenue.

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• 2017 (10) TMI 841
  Jurisdiction - power to remand - Whether after passing an order of remand to the Adjudicating Authority for deciding afresh the refund claim of the Appellant, CESTAT could have concluded the issue of entitlement of interest on the refund claim? - Held that: - Once it is an admitted position that it is only the Adjudicating Authority which has jurisdiction to decide whether interest on refund claim should be granted, there was no reason for the CESTAT to have decided the issue of entitlement of the Appellant to claim interest on the refund claim. In fact, the adjudication on the question, whether the Appellant is entitled to refund is not yet made. In the event, the Adjudicating Authority is inclined to grant refund, the fact that at the relevant time necessary documents were not produced by the Appellant, is only a factor to be considered for consideration of the question of grant of interest. However, this factor may not be conclusive. The part of the impugned order by which final adjudication was made by the CESTAT on the issue of entitlement of the Appellant to interest on the refund claim was completely erroneous and therefore, deserves to be set aside - the issue whether the Appellant is entitled to interest on the refund claim is kept open to be decided by the Adjudicating Authority - appeal allowed in part.

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• 2017 (10) TMI 840
  CENVAT credit - scope of input - ESI, Insurance and PF - whether ESI, Insurance, PF etc., would form part of the value of the Man-power Supplier Services or not - Held that: - Tribunal in number of cases laid down that the same would constitute a part of the "Man-power Service". There are various Commissionerate circulars also laying down that the service tax is required to be paid on the value including EPF and ESI contributions. In the present case, the service providers have given the break-up of the various factors, in which case, the Revenue has been able to pick-up the value of Insurance or PF etc. Presuming that the service provider would have raised only one consolidated figure bill for the entire service of Man-power Supply, the Revenue would not have been able to find out as to what is the break-up of the value of the impugned service. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 839
  Refund of unutilized CENVAT credit - time limitation - levy of AED (T& TA) - Rule 5 of CCR, 2004 - N/N. 31/2004-CE dated 09.07.2004 - Held that: - the claim has to be made before the expiry of one year from the payment of duty. But, it could be seen from the claim of refund of duty filed by the respondent, the same was made only in the year 2008 ie., the respondent assessee made the claim after a period of three years from the date of abolition of AED (T & TA), which is a clear time barred claim after the expiry of time limit for refund. Since the levy of Additional Excise Duty (T & TA) was abolished with effect from 09.07.2004, the unutilised balance credit stands lapsed and the claim of refund cannot be entertained after a period of nearly three years from the date of abolition of Additional Excise Duty (T & TA). It is clear from the records that after the abolition of Additional Excise Duty (T & TA) with effect from 09.07.2004, the unutilised balance credit lapsed, which ought to have been claimed within three years. The refund claim should have been filed within one year from the date of abolition, that too only when the respondent proves that the unutilised credit was on account of export. Hence, Rule 5 of CENVAT Credit Rules, 2004, is not applicable to the refund claim seeking refund in cash for the unutilised balance credit, that too after it was lapsed on 09.07.2004. The refund claim has to be filed within one year from the date of export as per Section 11 (B) of the Central Excise Act, 1944. Thus, it is evidently clear that the refund claim is not maintainable as time barred and hit by limitation. When the Central Excise Act, 1944 under Section 11(B), as amended, prescribes time limit for making any claim for refund of any duty of excise, the CESTAT ought to have concurred with the well considered view of the Adjudicating Authority. Moreover, CESTAT has not dealt with the aspect of limitation in the context of provisions under Section 11(B) of the Central Excise Act, 1944. Thus, the final order passed by the (CESTAT) that the unutilised credit of Additional Excise Duty is refundable merely on the basis that there is no provision in law to deny refund, deserves to be set aside. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 838
  Valuation - includibility - appellant under sales tax holiday vide notification 15/74 - Department was of the view that the amount received as sales tax from customers and not remitted to the government is an additional consideration and the same is liable to be included in the assessable value - Held that: - the appellant has disclosed the collection of amount in the sales tax return. The assessment order also observes that appellant was given time to produce C Form - If the said amount is assessed by sales tax authorities, then the same cannot be considered as additional consideration so as to be included in the assessable value. For verifying these aspects, the matter requires to be remanded to the adjudicating authority - appeal allowed by way of remand.

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• 2017 (10) TMI 837
  Re-credit of amount of CENVAT credit wrongly debited - Applicability of section 11B of the CEA, 1944 - job-work - Held that: - the appellants/assesses has a right to avail suo moto credit of the wrongly reversed amount - Adjudicating Authority as well as the First Appellate Authority, has erred in holding that the time limitation as provided under Section 11Bof CEA, 1944 will apply. The decision in the case of M/s Krishnav Engineering Ltd. Versus Customs, Excise And Service Tax Appellate Tribunal And Another [2015 (12) TMI 234 - ALLAHABAD HIGH COURT], followed, where it was held that the Cenvat credit taken by the appellant by intimating the department vide their letter dated 25th April, 2005 was in accordance with the procedure provided under Rule 9 of the Rules of 2004. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 836
  CENVAT credit - M/s Channel, Angle, Beam etc. used in fabrication of capital goods within the factory - Held that: - reliance placed in 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], where it was 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 - appeal allowed by way of remand.

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• 2017 (10) TMI 835
  Transfer of CENVAT credit - change of ownership - whether permission is required from the jurisdictional authority and is it mandatory for availment of Cenvat credit? - Rule 10 of CCR - Held that: - PAN number and ECC number which were held by Multi Pack System was the same, even ownership of the said Multi Pack System has been changed to the Appellant herein - the unit has undergone only a change in the name. It is also on record that the manufacturing activity under Central Excise registration number of Multi Pack System was the at very same place and subsequently, continued in the same place in the name of the Appellant herein. Rule 10(1) clearly indicates that if there is transfer of the factory due to change in ownership, the manufacturer shall be allowed to transfer the Cenvat credit lying unutilized to such transfer merged manufacturer - If the Appellant is functioning under different name and style from the very same place, mere change in shareholding pattern being accompanied by the change in the name of the transferor i.e. Multi Pack System cannot be said as change in ownership. Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 834
  Interest - relevant date for calculation of interest - whether interest is leviable/payable under Rule 7(4) of CER, 2002 immediately from next month to the provisional assessment directed by the department or after finalization of the provisional assessment on determination of the duty? - Held that: - In sub Section (3) of Section 18 of the Customs Act,1962 it is clearly laid down that interest would be payable after the provisional assessment is directed, whereas under sub Rule (4) of Rule 7of Central Excise Rules,2002 the interest would be attracted only on determination of duty i.e. the when the duty paid initially by way of provisional assessment, determined through final assessment. The judgement of Hon’ble Bombay High Court in the case of CEAT Ltd. vs CCE [2015 (2) TMI 794 - BOMBAY HIGH COURT], would be applicable, where it was held that The liability to pay interest arises on any amount payable to Central Government and consequent to order for final assessment under Rule 7 subrule (3). Appeal allowed - decided in favor of appellant.

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• 2017 (10) TMI 833
  SSI exemption - dummy units - mutuality of interest - Held that: - there is no infirmity in the impugned order wherein the Commissioner(Appeals) has given detailed reasons for his finding that the appellant is a dummy unit of M/s.FFL. Further, the appellants have not been able to bring any evidence to prove that both the units are independent - both the units have been using the same logo in all their documents and they have common management and personnel working for both the units. Further, there is a mutuality of interest and the fund flow between the two companies. Also, both the units have a common Managing Director and General Manager and both the units have invested in the share capital of M/s. Shetron Ltd. M/s. FFL has provided unsecured loan of Rs. 35 lakhs without any conditions - appeal dismissed - decided against appellant.

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• CST, VAT & Sales Tax

• 2017 (10) TMI 832
  Issuance of Writ of prohibition - Revision of assessment - TNGST Act - It is the case of the petitioner that the exercise of option under Section 7(C) of the Act is at the discretion of the assessee and the Assessing Officer does not have any jurisdiction or power to refuse such an option exercised by the assessee and more so, when the assessment has already become final - Held that: - Admittedly, the respondent has power and jurisdiction to issue notice to revise a completed assessment. Therefore, it cannot be stated that the impugned notice is without jurisdiction. The point that the petitioner seeks to canvass is on the ground that the Assessing Officer has no discretion, but to accept the option exercised by the dealer under Section 7 (C) of the Act. Apart from other contentions these aspects involves adjudication into facts. Equally, the issue relating to works contract is also a factual matter. Thus, the petitioner has to necessarily submit themselves to the jurisdiction of the respondent and file their objections to the notice dated 11.04.2005 - while declining to grant the prayer sought for, liberty is granted to the petitioner to submit their objections to the notice dated 11.04.2005 - petition dismissed.

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