TMI Tax Updates - e-Newsletter
October 5, 2023

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise Indian Laws

Articles

1. Analysis of the Notifications issued on 29.09.2023

   By: Rupesh Sharma

2. MEDIATION COUNCIL OF INDIA

   By: DR.MARIAPPAN GOVINDARAJAN

3. Court admitted the writ challenging amendment to Rule 61(5) of the CGST Rules

   By: Bimal jain

News

1. Advisory: e-Invoice JSON download functionality Live on the GST e-Invoice Portal

2. Shri Piyush Goyal, Union Minister of Commerce & Industry to co-chair 11th Meeting of the India-UAE High Level Joint Task Force on Investments along with His Highness Sheikh Hamed bin Zayed Al Nahyan, Member of the Executive Council of the Emirate of Abu Dhabi

3. Government of India notifies establishment of National Turmeric Board

4. National Investment and Infrastructure Fund (NIIF) launches $600 million India-Japan Fund (IJF) with Government of India and Japan Bank for International Cooperation (JBIC) as anchor investors

5. CCI approves acquisition of majority stake in Indira IVF by Zonnebaars and amalgamation of Spaceway Wellness into Indira IVF

6. CCI approves acquisition of certain stake of Lenskart Solutions Private Limited by Kedaara Capital Fund III LLP

7. CCI approves 100% shareholding of Lanco Amarkantak Power Limited by PFC Projects Limited, REC Limited, SJVN Limited and Damodar Valley Corporation

Notifications

DGFT

1. 34/2023 - dated 4-10-2023 - FTP

Registration under Coal Import Monitoring System (CIMS)- Amendment in Policy condition No. 07 (ii) of Chapter - 27 of Schedule-I (Import Policy) of ITC (HS), 2022

GST - States

2. S.O. 243 - dated 30-9-2023 - Bihar SGST

Bihar Goods and Services Tax (Amendment) Rules, 2023

3. S.O. 242 - dated 30-9-2023 - Bihar SGST

Amendment in Notification No. S.O. 284, dated the 16th November, 2017

4. S.O. 241 - dated 30-9-2023 - Bihar SGST

Notify supply of online money gaming, supply of online gaming other than online money gaming and supply of actionable claims in casinos under section 15(5) of the BGST Act, 2017

5. S.O. 240 - dated 30-9-2023 - Bihar SGST

Seeks to bring in force provisions of Bihar Goods and Services Tax (Amendment) Ordinance, 2023

6. 11/2023- State Tax (Rate) - dated 30-9-2023 - Bihar SGST

Seeks to amend Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017

7. 25/2023 – State Tax - dated 1-9-2023 - Jharkhand SGST

Amendment in Notification No. 07/2023– State Tax, dated the 05th June, 2023

8. 24/2023 – State Tax - dated 1-9-2023 - Jharkhand SGST

Amendment in Notification No. 06/2023– State Tax, dated the 05th June, 2023

9. S.R.O. No. 1061/2023 - dated 30-9-2023 - Kerala SGST

Amendment in Notification No. 125/2023/Taxes. dated 13th September, 2023

10. S.R.O. No. 1060/2023 - dated 30-9-2023 - Kerala SGST

Electronic commerce operator as required to collect tax at source u/s 52 notified as the class of persons who shall follow the special procedure

11. G.O. Ms. No. 16 - dated 4-8-2023 - Puducherry SGST

Amendment in Notification G.O. Ms. No. 6, dated 19th May, 2023

12. G.O. Ms. No. 15 - dated 4-8-2023 - Puducherry SGST

Amendment in Notification G.O. Ms. No. 5, dated 19th May, 2023

13. G.O. Ms. No. 14 - dated 4-8-2023 - Puducherry SGST

Amendment in Notification G.O. Ms. No. 4, dated 19th May, 2023

14. S.O. 77/P.A.5/2017/S.3/2023 - dated 20-9-2023 - Punjab SGST

Appointing the officers of Enforcement wing for the purposes of the Punjab Goods and Services Tax Act, 2017

Highlights / Catch Notes

GST

• Court Rules Unjustified Seizure of Goods Due to Genuine Documents, Despite Dispute Over Transport Route.

  Case-Laws - HC : Detention of goods - detention based on statement of driver regarding place of unloading of goods - route for transportation of goods disputed - The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine documents provided under the Act. The genuineness of the documents has not been disputed at any stage - Once the documents accompanying the goods were found to be genuine the goods ought not be have been seized. - HC
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• Seizure of Goods Unjustified: Genuine E-Way Bill Despite Purchaser's GST Cancellation, No Tax Evasion Risk for Petitioner.

  Case-Laws - HC : Detention of goods in transit - GST registration of purchaser / petitioner had been cancelled - Petitioner has opted for composition scheme - The fact remains that if the petitioner is in compounding, the benefit of input tax credit cannot be availed, hence there cannot be any evasion of tax, if the registration of the petitioner was cancelled on 30.11.2018, the generation of e-way bill, which has not been disputed to be genuine, the seizure cannot be made - HC
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• Court Upholds Right to Appeal in GST Cases Even if Tax Paid by Another Party; No Bar Found in Act.

  Case-Laws - HC : Right to file appeal - Aggrieved person - The counsel for the Respondents could not bring to notice any provision in the Act which would not entitle a person against whom the Order-in-Original is passed, but the tax and penalty has been paid on his behalf by somebody else cannot file an appeal challenging the Order-in-Original. - HC
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• Court Quashes Order Due to SCN Sent to Wrong Address; Fresh Order to Be Issued in Eight Weeks.

  Case-Laws - HC : Service of SCN - change in address - intimation of change of address in the GST portal done - SCN sent at the old address - the Impugned order is liable to be quashed. It is accordingly quashed and the case is remitted back to the respondents to pass fresh order on merits and in accordance with law within a period of eight weeks - HC
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Income Tax

• Court Rules Reopening Assessment Invalid Without Sharing Key Documents with Petitioner; Orders Assessing Officer to Provide Details.

  Case-Laws - HC : Validity of Reopening of assessment - providing information to the Petitioner - in the instant case, supporting documents have not been provided to the Assessee i.e., without providing the details uploaded on the Insight portal along with the information gathered from the investigation wing and new information uploaded on insight portal has not been provided - reopening notice set aside - AO directed to supply the RUD tot he assessee - HC
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• Section 263 Revision: Non-deduction of TDS on Brokerage to Non-Resident Brokers Upheld; Key Documentation Issues Highlighted.

  Case-Laws - AT : Revision u/s 263 - Non deduction of TDS u/s 195 on brokerage pad to non-resident brokers - This fact is admitted by assessee as in the paperbook index it is mentioned that the declaration by the parties of not having any permanent establishment in India along with their tax residency certificates have not been filed before the AO and have been filed only for the first time before ld. Pr. CIT. - Revision proceedings sustained - AT
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• FTC Disallowance for Late Form 67: Rule 128(9) Must Align with Act and DTAA for Fairness.

  Case-Laws - AT : Disallowance of Foreign Tax Credit (FTC) - delay in filing Form 67 - Rule 128(9) of the Rules has to be read down in conformity thereof. Rule 128(9) of the Rules cannot be read in isolation. Rules must be read in the context of the Act and the DTAA impacting the rights, liabilities and disabilities of the parties. - AT
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• Court Upholds On-Money Payments for Parking Allotment Based on WhatsApp Chats; Supported by Section 292C Presumption.

  Case-Laws - AT : On-money receipts - reliance on What's App chat of employees - presumption u/s 292C - the exception herein is the assessee’s “whatsapp” chats seized from its authorized staff accounts which have been nowhere disputed. And also that the said chats as well as learned lower authorities duly corroborates the fact that the corresponding heads therein in lieu of on-money payment is allotment of parking space only. - AT
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• Court Rules No Tax Deduction at Source Required for Reimbursements to Non-Resident u/ss 195 and 192.

  Case-Laws - AT : TDS u/s 195 r.w.s. 192 - salary costs of a seconded employee - The employees in their capacity as employees of the assessee had to control and supervise the activities of Msource India Pvt. Ltd. Therefore, the assessee for all practical purposes has to be treated as employer of the seconded employees. There is no obligation in law for deduction of tax at source on payments made for reimbursement of costs incurred by a non resident enterprise and therefore, the amount paid by the assessee was not to suffer tax deducted at source under Section 195 - AT
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• Court Rules No Taxable Perquisite on Deferred Sales Tax Prepayment; Finance Act 2023 Amendment Supports Decision.

  Case-Laws - AT : Taxability of difference between deferral sales tax liability and its prepayment at its NPV u/s. 28(iv) - Here in this case there is no benefit of perquisite arising to assessee by virtue of this arrangement. It is further to be noted that sec 28(iv) of the act has been amended by the finance act 2023 w.e.f A.Y 2024-25 which covers cash or in kind or partly in cash or partly in kind. This amendment clearly strengthens the contention of the assessee that in the year under consideration the same was not covered by section 28(iv). - AT
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Customs

• Customs Officers' Conduct Questioned: Commissioner Urged to Address Breaches of Court Orders by Officers.

  Case-Laws - HC : Conduct of the Customs officers - The Commissioner of Customs needs to look into such approach of the officers and not take it lightly so as to prevent a likelihood that such officers for reasons best known to them acting contrary to the binding orders passed by this Court and this is one of such cases. In these circumstances, it is requested that the Commissioner of Customs to look into the issue on understanding of the legal matters by such officers as in the present case wherein the Assistant Commissioner has totally discarded to consider the binding effect of the orders of this Court. - HC
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• Customs Broker's License Revoked for Fraudulent IGST Claims; Violated Regulation 10(n) and Section 17 of Limitation Act.

  Case-Laws - AT : Revocation of suspension of the respondent’s (Cotoms Broker) licence - irregular availment of IGST drawback and refund by using bogus manufacturing registration - in light of the unretracted admission of respondents/ CB’s G-card Holder about involvement of CB in this transaction we hold that this is a case of not merely the violation of Regulation 10(n) but a case of fraud committed by CB and fraud vitiates everything. The cardinal principal which is enshrined in section 17 of the Limitation Act is that fraud nullifies everything. - licence stands suspended - AT
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• Dispute Over Classification of Imported Poultry Feed Machinery: CTH 9406 00 93 vs. CTH 8436 10 00 Examined.

  Case-Laws - AT : Classification of imported goods - poultry Feed Milling machinery - to be classified under CTH 9406 00 93 or under CTH 8436 10 00? - there is direct entry at CTH 8436 which speaks of machineries used in poultry keeping - there is no categorical assertion that the goods in question fall under “silos”. Further there is nothing to show by way of evidence that the imported goods have been used for “storing ensilage”. Therefore, the classification arrived at by the Adjudicating Authority cannot be agreed upon. - AT
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• Tribunal Appeal Delays Refund Evaluation; Original Claim Must Be Assessed on Merits Despite Timing Concerns.

  Case-Laws - AT : Validity of assessment order - refund of BES - When the grounds for considering the appeal was the pendency of the appeal before the Tribunal, the Order of the Commissioner (Appeals) dismissing the appeal as pre-mature would not tantamount to the rejection of the original application filed before the Original Authority, which was admittedly within the time limit. Therefore, the original claim of refund has to be decided on merits considering it filed within the time limit without denying on the grounds of limitation, in the facts of the case. - AT
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• Portable Computers Classified Under Customs Tariff Heading 8471 30 90: Barcode, RFID, and Tablet Mobile Devices.

  Case-Laws - AAR : Classification of goods proposed to be imported - Portable Computers viz. Barcode Mobile Computers, RFID Mobile Computer and Tablet Mobile Computer - The 36 devices listed in the first paragraph of the ruling are classifiable under Customs Tariff Heading 8471 and more specifically, under sub-heading 8471 30 90 of the First Schedule to the Customs Tariff Act, 1975 - AAR
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Indian Laws

• SARFAESI Act Amendment: Borrowers' Redemption Rights End with Auction Notice Publication u/r 9(1) of 2002 Rules.

  Case-Laws - SC : Right of the auction purchaser of the property - Right of the Defaulter of Loan / Borrowers to redeem the secured property - in accordance with the unamended Section 13(8) of the SARFAESI Act, the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. The court went on to say that the amended provisions of Section 13(8) of the SARFAESI Act brought in a radical change inasmuch as the right of the borrower to redeem the secured asset would stand extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002 - SC
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IBC

• Supreme Court Upholds RP's Actions in CIRP; MSME Status Valid Post-Commencement, NCLAT Contempt Proceedings Overturned.

  Case-Laws - SC : CIRP - Status of the entity (Corporate debtor) as MSME or not - certificate being procured after the process started - NCLAT held the status of entity as MSME - Contempt proceedings against the Resolution professional for not folloiwng the decision of NCLAT - The appellant (RP) cannot be faulted for calling for other proposals in which the proposal given by respondent No.1 was also to be examined, put them to voting before the CoCs and declare the results - SC
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• High Court Dismisses Petition, Upholds IBC Priority Over Foreign Court Decree in Execution Proceedings.

  Case-Laws - HC : CIRP - Execution of decree awarded by foreign court - Overriding provision of IBC - The conduct speaks volumes in the case i.e. how clearly after every attempt to stall the execution proceedings failed, did the petitioner, as an after thought, try to forestall the execution proceedings. - Petition dismissed - HC
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PMLA

• Liability of Partners for Proceeds of Crime: Joint and Several Liability in Partnership Firm Under Scrutiny.

  Case-Laws - HC : Money Laundering - proceeds of crime were allegedly generated in a partnership firm - if the proceeds of the crime have emerged or flowed from the business of the firm, then, prima facie, all partners may have joint and several liabilities. Of course, this is an issue which requires detailed deliberation on facts as well as on law. - HC
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Service Tax

• High Court Dismisses Writ Petition; Validates Tax Demand After Petitioner Ignores Core Allegations of Misrepresentation and Suppression.

  Case-Laws - HC : Validity of demand confirmed without considering the reply submitted by the assessee - The petitioner has replied to the same by Annexure-13, but however, raising many contentions on jurisdiction, limitation and so on, as also citing various decisions, but, however, not focusing on the factual allegations raised of mis-representation and suppression of the actual taxable value of services provided during the assessment years. - Writ petition dismissed - HC
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• Show Cause Notice Limitation Period Starts on Tax Payment Date; July 25, 2016, Return Filing Validates Notice Timing.

  Case-Laws - HC : Extended period of limitation for issuing show cause notice - the relevant date is the date on which the tax has been paid. As is evident from Annexure-17, for the period between April, 2015 and September, 2015 the assessee has filed an ST-3 Return on 25.07.2016 while returns for the remaining relevant period were filed thereafter. The limitation, hence, commences on 25.07.20216 and as on 25.07.2021, the date of demand-cumshow cause notice; the five year period, has not expired. The ground of limitation raised fails and is rejected. - HC
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• Electricity Transmission and Distribution in Tamil Nadu Exempt from Service Tax, Court Rules Under Electricity Act, 2003.

  Case-Laws - AT : Exemption from service tax or not - activities relate to transmission and distribution of electricity - These services are not provided independently and are part of the appellant’s statutory functions and are hence done ‘for’ transmission and distribution of electric power to various consumers located within the state of Tamil Nadu in terms of the provisions of the Electricity Act, 2003. Without the said services being rendered transmission and distribution of electricity would be impaired. - Benefit of exemption available - AT
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• Penalty Imposed for Late Service Tax Payment Despite Pre-SCN Payment; Financial Constraint Defense Rejected u/s 80.

  Case-Laws - AT : Levy of penalty - Service tax with interest paid before issuance of SCN - A bald statement of financial constraint will not be enough. Even as per section 106 of the Indian Evidence Act, the fact within the knowledge of a person must be proved as the burden of proof is cast upon him - the appellant has not shown ‘reasonable cause’ within the meaning of Section 80 ibid for their failure to pay duty. - AT
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Central Excise

• Delay in Filing Appeals Under Central Excise Act Cannot Exceed 30-Day Extension Beyond 60-Day Limit.

  Case-Laws - HC : Condonation of delay in filing appeal before Commissioner (Appeals) - sufficient reason for delay provided or not - The limitation for filing appeal as provided under Section 35 of the Central Excise Act overrides the provisions of Section 5 of the Limitation Act and hence, the delay cannot be condoned beyond 30 days from the statutory period of appeal i.e. 60 days of communication of the order to the aggrieved person. - HC
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• Appellant's Cenvat Credit Payment Not Under Protest, Limitation Grounds Insufficient to Contest Duty Demand.

  Case-Laws - AT : Refund claim - payment under protest or not - payment of duty through reversal of cenvat credit - It is found that the appellant on being pointed out by the audit has agreed and paid the duty amount. Thereafter, after the issue of the show-cause notice they have contested the demand on the ground of limitation, the same cannot be considered as payment under protest. - AT
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Case Laws:

• GST

• 2023 (10) TMI 104
  Maintainability of appeal - appeal dismissed on the ground of time limitation - interpretation of statute - failure to appreciate the word communicated used in section 107 of the GST Act in contrast to the word served used in section 169 of the GST Act - HELD THAT:- Matter requires consideration. List thereafter along with Writ Tax No. 948/2023 - In the meantime, no coercive action shall be taken against the petitioner pursuant to the impugned order, provided the petitioner deposits 50% of the disputed tax amount in accordance with law within a period of two weeks from today.

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• 2023 (10) TMI 103
  Detention of goods - detention based on statement of driver regarding place of unloading of goods - route for transportation of goods disputed - non-existence of provision for declaring the route for transportation of the goods under GST Act - HELD THAT:- Admittedly, the goods in question were sold by the the registered dealer along with genuine documents i.e. tax invoices and e-way bills. At the time of interception it is alleged that driver of the vehicle made statement that goods were to be unloaded at the place which is not mentioned in the tax invoice but at Mainpuri itself. But perusal of the statement of the truck driver, which is prepared and uploaded by the revenue authority in GST MOV-01, it appears that not a single word has been whispered in respect of the goods in question to be unloaded at the place which has not been shown in the tax invoice accompanying the goods. Intent to evade tax - goods along with truck was not on the route of its destination - HELD THAT:- Under the GST Act, there is no specific provision which bounds the selling dealer to disclose the route to be taken during transportation of goods or while goods are in transit however there was a provision under VAT Act to disclose the rout during transportation of goods to reach its final destination. Once the legislature itself in its wisdom has chosen to delete the said provision, this Court opined that the authorities were not correct in passing the seizure order even if the vehicle was not on regular route or on different route. The power of detention as well as seizure can be exercised only when the goods were not accompanying with the genuine documents provided under the Act. The genuineness of the documents has not been disputed at any stage - Once the documents accompanying the goods were found to be genuine the goods ought not be have been seized. The impugned order dated 17.8.2021 cannot be sustained in the eyes of law and is hereby quashed - Petition allowed with costs.

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• 2023 (10) TMI 102
  Seeking release of seized goods - imposing of security as well as penalty for release - intent to evade tax - documents shown by the driver of truck relating to the consignment and both the parties were not verified by the competent officer - HELD THAT:- The petitioner has brought on record the various documents which shows that the purchaser was registered dealer and its registration is continuing / functioning. Further the returns have been filed and the electronic credit ledger also shows that the business is being undertaken by the purchaser i.e. M/s Shlok Brothers, Delhi. Once from the material brought on record, it shows that the business were being undertaken by the parties, the appellate as well as assessing authority were not justified in imposing/demanding the security as well as levying penalty under Section 129 (3) of the Act. The appellate authority has rebutted the documents on the ground that it is an afterthought. Once the material have been brought on record copy of which has also been filed as Annexure no. 9, the registration certificate of the purchaser in which at page no. 58 and 59 shows that registration of the purchasing firm is valid and the firm is functional - Once the purchaser is shown as functional / active the authorities ought not to have pass the impugned order confirming the seizure order dated 11.11.2020. The impugned orders dated 21.1.2022 passed by Additional Commissioner, Grade -2 (Appeal) Commercial Tax, Judicial Division Basti, respondent no. 1 and the order dated 11.11.2020 passed by Assistant Commissioner, Commercial Tax, Mobile Squad, Basti, respondent no.2 are hereby quashed - Petition allowed.

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• 2023 (10) TMI 101
  Detention of goods in transit - GST registration of purchaser / petitioner had been cancelled - petitioner has opted for composition scheme - HELD THAT:- Once the fact of composition is not disputed and there could be no availment of input tax credit, intention to evade the payment of tax or wrong availment of input tax credit does not arise at any stage. So far as the argument raised by the counsel for the petitioner that petitioner was neither intimated about the cancellation of registration or due process has not been followed in cancellation is concerned, the said argument has not been raised at any stage nor any pleading has been made in this respect in the writ petition. In view of the aforesaid fact, this Court does not permit the petitioner to raise the said argument for the first time in the present writ petition even without there being any pleading made in the writ petition in this respect, hence, the said argument is rejected. The fact remains that if the petitioner is in compounding, the benefit of input tax credit cannot be availed, hence there cannot be any evasion of tax, if the registration of the petitioner was cancelled on 30.11.2018, the generation of e-way bill, which has not been disputed to be genuine, the seizure cannot be made - The impugned order dated 22.11.2019 cannot be sustained in the eyes of law and is hereby quashed. Petition allowed.

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• 2023 (10) TMI 100
  Validity of SCN - Revenue submits that the notice issued is merely a show-cause notice issued under Section 74 of the U.P. GST Act and the petitioner may participate in the proceedings taking the objection that the notice issued is not in accordance with law. HELD THAT:- Since the notice is merely a show-cause notice issued under Section 74 of the U.P. GST Act, the petition is disposed of by requiring the petitioner to participate in the proceedings and may file objections to the same within two weeks from today.

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• 2023 (10) TMI 99
  Maintainability of petition - availability of alternative remedy - Vague SCN - SCN does not specify the violation or infringement of any of the provisions of the Act - misuse of the e-way bills by the two firms - no evidence has either been provided or disclosed for misuse of E-way bill - principles of natural justice - HELD THAT:- The respondent No. 2 has passed the impugned order after due consideration of the objections of the petitioner taken before him. There are no procedural impropriety committed by the respondent No. 2 in passing the impugned order. This is not a fit case where the statutory remedy of Appeal under Section 107 of the UPGST Act, 2017/CGST Act, 2017 can be bypassed. All the writ petitions are accordingly dismissed on the ground of availability of alternative remedy. However, liberty is granted to the petitioner to file an appeal under Section 107 of the Act before the Appellate Authority within a period of three weeks from today.

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• 2023 (10) TMI 98
  Input tax credit - only ground on which the petitioner has been said to have availed the input tax credit is the difference between GSTR 2A and GSTR 3B - HELD THAT:- This Court, after taking note of the judgment of the Supreme Court in the case of THE STATE OF KARNATAKA VERSUS M/S ECOM GILL COFFEE TRADING PRIVATE LIMITED [ 2023 (3) TMI 533 - SUPREME COURT ] as well as Calcutta High Court judgment in SUNCRAFT ENERGY PRIVATE LIMITED AND ANOTHER VERSUS THE ASSISTANT COMMISSIONER, STATE TAX, BALLYGUNGE CHARGE AND OTHERS [ 2023 (8) TMI 174 - CALCUTTA HIGH COURT ] has held that the input tax credit of the assessee under the GST regime cannot be denied merely on the difference of GSTR 2A and 3B. The matter is remitted back to the file of the Assessing Authority/1st respondent to examine the evidence of the petitioner irrespective of the Form GSTR 2A for the petitioner s claim for the input tax credit. After examination of the evidence placed by the petitioner/assessee, the Assessing Authority shall pass fresh orders in accordance with the law - Petition allowed by way of remand.

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• 2023 (10) TMI 97
  Right to file appeal - Aggrieved person - release of detained goods - payment was made by M/s. Blue Star Ltd. for and on behalf of the Petitioner - HELD THAT:- Respondent No. 1 is not justified in refusing to take the appeal, proposed to be filed by the Petitioner, on record. The Order-in- Original against which the appeal is proposed to be filed is passed against the Petitioner. The fact that the goods which were being transported were released to M/s. Blue Star Ltd. by making payment of Rs. 20,18,308/- on behalf of the Petitioner would not mean that appeal has to be filed by M/s. Blue Star Ltd. The said payment was made by M/s. Blue Star Ltd. for release of the goods in its capacity as an owner of the goods and the same was also deducted from the account of the Petitioner with M/s. Blue Star Ltd. Therefore, payment was made by M/s. Blue Star Ltd. for and on behalf of the Petitioner, thus, Respondent No. 1 was not justified in refusing to take the appeal on record. The counsel for the Respondents could not bring to notice any provision in the Act which would not entitle a person against whom the Order-in-Original is passed, but the tax and penalty has been paid on his behalf by somebody else cannot file an appeal challenging the Order-in-Original. The appeal has to be filed by person aggrieved and in the present case the Order-in-Original is passed against the Petitioner and therefore, the Petitioner is an aggrieved person and is entitled to file an appeal against the said order. Noting made by Respondent No. 1 on covering letter dated 27th January, 2020 is required to be quashed/deleted - Appeal disposed off.

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• 2023 (10) TMI 96
  Service of SCN - change in address - intimation of change of address in the GST portal done - SCN sent at the old address - H ELD THAT:- There is no merits in the impugned order as admittedly prior to the issuance of Show Cause Notice dated 28.04.2022, the petitioner had shifted the place of business to Flat No.14, AK Nayak Bhavan, 6th Floor, Jahangir Street, Muthialpet, George Town, Chennai. The petitioner had sent suitable intimation regarding the change of address in the Web Portal on 07.04.2022. Thus, the proceedings initiated were continued without proper service of notice on the petitioner. Therefore, the Impugned order is liable to be quashed. It is accordingly quashed and the case is remitted back to the respondents to pass fresh order on merits and in accordance with law within a period of eight weeks from the date of receipt of a copy of this order - Petition disposed off.

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• 2023 (10) TMI 95
  Maintainability of petition - respondents have circulated a show cause notice as well as the assessment order passed in the petitioner s case - tax was collected without any SCN earlier - HELD THAT:- The writ petitions are dismissed as infructuous. The petitioner is at liberty to take action as per law. No costs.

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• 2023 (10) TMI 94
  Refund of amount deposited by the petitioners with the respondent-revenue, that be taken into consideration in any proceedings and while passing appropriate orders on such proceedings - HELD THAT:- No opinion expressed on any of the rival contentions as may arise. Suffice it to observe that if the petitioners intend to make such an application, let the same be made within two weeks from today, and on such application being made, the respondents may consider such application and pass appropriate orders on the same. Considering the peculiar facts and circumstances of the case, the show cause notice be adjudicated within six months from the date on which the final reply is filed. Petition disposed off.

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• 2023 (10) TMI 93
  Seeking permission to amend the GSTR-I either manually or online - Section 38(5) of the WBGST Act, 2017 - HELD THAT:- Learned advocate appearing for the respondents in opposing the prayer of the writ petition submits that the petitioner has committed the mistake twice and the portal cannot accept such filing through online. However, he prays for time to take instruction as to how the issue could be resolved. List this matter for further consideration on 31 st July, 2023.

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• 2023 (10) TMI 92
  Tax on ENA (Extra Neutral Alcohol) on such rates as charged in the past or as per the decision of the GST Council - HELD THAT:- As an interim measure, it is directed that the effect and operation of orders dated 05.08.2022 and 26.12.2022 passed by Assistant Commissioner, Commercial Tax, Bhopal Circle - 5, Bhopal shall remain stayed till the next date of hearing. However, the petitioner shall continue to pay tax on ENA (Extra Neutral Alcohol) on such rates as charged in the past or as per the decision of the GST Council. Post along with W.P.No.30137/2022.

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• 2023 (10) TMI 91
  Cancellation of GST registration of petitioner - petitioner had not submitted Form GSTR 3B return for the period from March 2022 to August, 2022 - right of defence denied to petitioner - violation of principles of natural justice - HELD THAT:- Admittedly, the petitioner has filed his returns for the month of March 2022 on 3.11.2022, which is subsequent to the show cause notice and prior to Ext.P4 cancellation order. Thus, as Ext.P2 show cause notice or Ext.P4 order do not advert to any of these aspects, the same is passed in flagrant violation of the principles of natural justice, because the petitioner has been denied his right of defence to Ext.P2 show cause notice. It is trite; that quasi-judicial authorities have to function with fairness, openness and reasonableness. Ext.P2 show cause notice and Ext.P4 order substantiates that the respondents have acted in haste and in an unreasonable manner, denying the petitioner a fair opportunity to defend himself. Hence, Exts.P2 and P4 suffer from the errors of law and are liable to be quashed by exercising the extraordinary powers of this Court under Article 226 of the Constitution of India. Exts.P2 and P4 orders are quashed - petition allowed.

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• Income Tax

• 2023 (10) TMI 90
  Validity of Reopening of assessment - providing information to the Petitioner, without furnishing the material based upon which the information is provided - HELD THAT:- Providing information to the Petitioner, without furnishing the material based upon which the information is provided, would render an assessee handicapped in submitting an effective reply to the show cause notice, thereby rendering the purpose and spirit of section 148A(b) of the Act totally illusive and ephemeral. The fact that the material also was required to be supplied can very well be gauged from the clear directions issued by the Supreme Court in the case of Ashish Agarwal [ 2022 (5) TMI 240 - SUPREME COURT] . In the case at hand, the issue is not the correctness of the information based on Assessee s defense can be determined in the assessment proceedings under Section 148 of the Act; rather, in the instant case, supporting documents have not been provided to the Assessee i.e., without providing the details uploaded on the Insight portal along with the information gathered from the investigation wing and new information uploaded on insight portal has not been provided - reopening notice set aside. - AO directed to supply the RUD tot he assessee - Decided in favour of assessee.

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• 2023 (10) TMI 89
  Penalty u/s 271(1) (c) - sale tax exemptions were held to be a revenue receipt of the assessee company and addition was made to the total income of the assessee - HELD THAT:- In the present case, the issue was, whether the sales tax exemption availed during the relevant year as capital receipt, was to be held as revenue in nature. Appellate Authority observed that the penalty for the assessment year 2005-2006 and 2006-2007 has been deleted by the CIT (Appeals). Reference was made to the judgment passed in CIT vs. Reliance Petroproducts Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] wherein it was held that mere making of a claim, which is not sustainable in law, by itself, would not amount to furnishing inaccurate particulars of income. The penalty levied under Section 271 (1) (c) in the case of M/s Abhishek Industries Ltd. s case [ 2006 (8) TMI 123 - PUNJAB AND HARYANA HIGH COURT] on the identical issue has already been deleted by the CIT (A)-1, Ludhiana - In this backdrop, the appeal filed by the assessee (respondent herein) was allowed. Against the said order, the revenue preferred an appeal before the Income Tax Appellate Tribunal, Chandigarh, which was dismissed vide impugned order dated 28.01.2014 (Annexure A-4). In the present case, learned counsel for the respondent has referred to the judgment passed by this Court in M/s Amtek Auto Ltd. [ 2013 (6) TMI 133 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that merely for the reason that the assessee had claimed the expenditure to be revenue would not render the assessee liable to penalty proceedings. In Commissioner of Income Tax vs. Gurdaspur Co-operative Sugar Mills Ltd. [ 2013 (3) TMI 175 - PUNJAB AND HARYANA HIGH COURT] there was no dispute about the quantum of receipt of grant-in-aid from the State Government. The assessee had reflected the same as capital receipt, whereas it had been treated to be a revenue receipt. The Court observed that the issue, whether the amount of grant-in-aid was a capital receipt or a revenue receipt, was a debatable issue. In this backdrop, the penalty could not be imposed u/s 271 (1) (c) of the Act. No substantial question of law arises for consideration in this appeal, as the main issue was only with respect to the interpretation, as to whether the subsidy taken by the respondent-assessee was to be treated as revenue or capital and this would not amount to non disclosure of any source of income, which would be liable for imposition of penalty.

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• 2023 (10) TMI 88
  Revision u/s 263 - Deduction u/s 80P(2)(a)(i) deduction u/s 80P(2)(d) - HELD THAT:- We find that the solitary issue raised in the present appeal is covered by the decision of the co-ordinate bench for assessment year 2017-18 [ 2022 (12) TMI 355 - ITAT PUNE ] wherein also it was the order passed u/s 263 of the Act read with issue of deduction u/s 80P(2)(a)(i) or 80P(2)(d) of the Act to hold that the interest income earned on the investment of surplus money with banks is also eligible for exemption u/s. 80P(2)(a)(i). Thus order of revision passed by the Ld. PCIT u/s 263 of the Act cannot be sustained in the eyes of law - Decided in favour of assessee.

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• 2023 (10) TMI 87
  Revision u/s 263 - Non deduction of TDS u/s 195 on brokerage pad to non-resident brokers - as per CIT AO has not examined this issue and no evidence has been put forth by the assessee to prove that whether such entities have or do not have permanent establishment in India and whether the assessee failed to deduct tax at source u/s 195 of the Act on the alleged brokerage - HELD THAT:- As in the assessment records declaration by the parties of not having any permanent establishment in India having tax residency certificates of other countries were not available. This fact is admitted by assessee as in the paperbook index it is mentioned that the declaration by the parties of not having any permanent establishment in India along with their tax residency certificates have not been filed before the AO and have been filed only for the first time before ld. Pr. CIT. Therefore, when ld. Pr. CIT noticed that no such details were available in the assessment records, he was well within his jurisdiction to invoke the provisions of Section 263 of the Act and carried out the revisionary proceedings and therefore, carrying out such proceedings is well within the provisions of Section 263 of the Act and the relevant grounds of the assessee challenging such invocation of revisionary powers are hereby dismissed. Whether the AO is erroneous and prejudicial to the interests of the revenue? - Whenever an assessee makes any payment outside India, it has to furnish Form 15CB before the banking authorities and such Form 15CB are also uploaded in the income tax portal. So, when the case of the assessee was selected for scrutiny proceedings and in the assessment order ld. AO has observed that the reason includes (1) foreign remittance made to persons located in low tax jurisdiction countries and (2) value of foreign remittance sent by the assessee is higher than the gross total income. As per the audited financial statement against the gross receipts of Rs. 430.16 Crore the net profit before tax is Rs. 1.31 Crore whereas the brokerage paid to agents outside India is Rs. 5.62 Crore. So, based on both the issues as referred by the AO in the assessment order it was bare minimum expected from the AO to have called for the details of all the non-resident brokers to whom the brokerage has been paid and the basis of its calculation and why tax has not been deducted. AO has not called for any such details and therefore, the assessee did not file these details. The copy of the notice u/s 142(1) of the Act has also not been filed by the assessee. We thus, find that no such question was raised by the AO during the course of assessment proceedings about the alleged issue of deductibility of tax at source u/s 195 of the Act on the payment of brokerage - By not calling these details the assessment proceedings are erroneous and since the Revenue is involved which has not been examined by the AO, the assessment proceedings are prejudicial to the interests of the revenue also. Whether Pr. CIT ought to have raised independent enquiry on the issue? - No merit in this issue raised by the assessee because it is not a case of any incomplete enquiry for which ld. Pr. CIT ought to mention that what should have been done by the AO. It is a case where there is an apparent issue mentioned in the reason for selecting the case for scrutiny which should have been examined by the AO but nothing has been done on the part of the AO. CIT has called for the complete details from the assessee which have been filed by it before ld. Pr. CIT -Now, the further course of action cannot be taken up by ld. Pr. CIT to examine each and every party who has claimed to be non-resident and not liable to be taxed in India because it does not have any permanent establishment in India. This exercise ought to be carried out by the AO only. Thus CIT was justified in invoking the revisionary power u/s 263 of the Act and has rightly held the order of the AO dated 25.12.219 as erroneous and prejudicial to the interests of the revenue - Decided against assessee.

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• 2023 (10) TMI 86
  Condonation of delay - delay of 710 days in preferring the appeal before the learned CIT(A) and the reason attributed for the delay in filing the appeal to the pandemic - HELD THAT:- As a matter of fact, though the learned DR does not concede to condone the delay, there is no denial of the fact that the Hon ble Supreme Court in the Suo Motu proceedings in the case of [ 2022 (1) TMI 385 - SC ORDER] held that in cases, where the limitation would have expired during the period between 15/03/2020 and 28/02/2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01/03/2022, and in the event of actual balance period of limitation remaining with effect from 01/03/2022 is greater than 90 days, that longer period shall apply. Since the limitation period is applicable to this appeal also, following the direction of Hon ble Hon ble Apex Court, we condone the delay. Disallowance of Foreign Tax Credit (FTC) - delay in filing Form 67 - HELD THAT:- As decided in Union of India Vs. Azadi Bachao Andolan [ 2003 (10) TMI 5 - SUPREME COURT] as reached a conclusion that since Rule 128(9) of the Rules does not provide for disallowance of FTC in the case of delay in filing Form 67 and such filing within the time allowed for filing the return of income under section 139(1) of the Act is only directory, since DTAA over rides the Act, and the Rules cannot be contrary to the Act. We find from Article 25(2)(a) of the DTAA that where a resident of India derives income which, in accordance with the provisions of the convention, may be taxed in the United States, India shall allow as a deduction from the tax on the income of the resident an amount equal to the income tax paid, paid in the United States, whether directly or by deduction. In view of this provision over riding the provisions of the Act, according to us, Rule 128(9) of the Rules has to be read down in conformity thereof. Rule 128(9) of the Rules cannot be read in isolation. Rules must be read in the context of the Act and the DTAA impacting the rights, liabilities and disabilities of the parties. In the case of Purushothama Reddy Vankireddy [ 2022 (12) TMI 742 - ITAT HYDERABAD] also the Co-ordinate Bench of the Tribunal, in the similar circumstances, allowed the appeal of assessee for FTC claim. Decided in favour of assessee.

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• 2023 (10) TMI 85
  Addition u/s. 56(2)(viib) - share premium received by the appellant company - Determination of fair market value - Premium is excessive or not? - HELD THAT:- We do not find any reason to interfere with the order passed by the authorities below in not accepting the valuation report so prepared by the CA in regard to the preferential share available to the assessee keeping in view the provisions of section 56(2)(viib) r.w.Rule 11UA and according to us, the value of preferential share is rightly taken as the value of the share at which the company should have received the preference share capital including the premium. Thus having regard to the facts and circumstances of the case, the finding of the authorities below to this effect that the share premium received by the company is in excess of fair market value of the share, the addition thus made u/s. 56(2)(viib) of the Act is found to be just and proper particularly in view of the ratio laid down in case of M/s. Agro Portfolio Pvt. Ltd. vs. ITO [ 2018 (5) TMI 1088 - ITAT DELHI] . The order passed by the authorities below is found to be without any ambiguity and thus, upheld. The assessee s appeal is therefore found to be devoid of any merit and therefore dismissed.

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• 2023 (10) TMI 84
  Addition u/s 69A r.w.s. 115BBE - Cash found from the assessee by ADCP(Narcotics), Ludhiana and later on seized by the Department - unexplained source of cash - assessee by way of alternate contention submitted that where the AO has accepted the assessee s return of income disclosing income and taking the same into consideration and tax filings for earlier years, the source of cash so found and seized stand justified in terms of present and past savings of the assessee - HELD THAT:- As there is no contradiction in the alternate submission so made by the assessee before the Ld. CIT(A). Once the AO has recorded a finding that the cash so seized belongs to the assessee and not to any third person and rejected the initial explanation so furnished by the assessee, then in such a scenario, the onus shifts back on the assessee to explain the source of such cash found and seized from the possession of the assessee. In such a scenario, where the assessee came forward with an alternate submission that cash so found and seized is from his past earnings as duly reflected in his tax filings as accepted by the tax authorities and past savings which have been accumulated therefrom, the said explanation has to be examined based on material available on record and cannot be summarily dismissed as has been done in the present case by the CIT(A). The tax filings for the year under consideration as well as for the earlier years are very much part of record and as far as claim of past savings and availability of cash in hand, the AR has submitted the details and which can be verified by the authorities. Therefore, we agree with the submissions of the AR that the alternate contention was not rightly appreciated by the Ld. CIT(A) and we deem it appropriate to set-aside the matter to the file of the CIT(A) to examine the alternate contention a fresh as per law after providing reasonable opportunity to the assessee. Appeal of the assessee is allowed for statistical purposes.

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• 2023 (10) TMI 83
  On-money receipts - additions were made by AO relying upon the statements of employees and What s App chat - presumption u/s 292C - department had carried out section 133A survey - HELD THAT:- We are of the view in this factual backdrop that not only section 2(12) duly includes such seized material in the definition of books or books of account being in digital form but also the same carries presumption of correctness regarding the contents thereof u/s 292C of the Act. We make it clear that the assessee itself is fair enough in not disputing correctness of above stated whatsapp chat throughout. This is indeed coupled with the fact that its authorized person(s) Mr. Mangesh Nipunge as well as Smt. Mohini Shripad had also confirmed the fact that they had been collecting cash payments from purchasers. Faced with the situation, learned counsel quoted a catena of case laws that such search statements recorded u/s 132(4) hardly carry any significance in light of CBDT s landmark circular dated 10.03.2003. We, however, note that the exception herein is the assessee s whatsapp chats seized from its authorized staff accounts which have been nowhere disputed. And also that the said chats as well as learned lower authorities duly corroborates the fact that the corresponding heads therein in lieu of on-money payment is allotment of parking space only. We, thus, invoke the statute presumption u/s 292C in the facts and circumstances to confirm the impugned on-money addition of Rs. 3 lakhs in very terms. This former assessee s appeal fails therefore.

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• 2023 (10) TMI 82
  TP Adjustment - TP adjustment as per section 92CA and protective addition of the same amount under section 37 - Arm s Length Price (ALP) of Management Fee paid by the Appellant to its AE as NIL - Since the benefits accrued by the Assessee was more than the price paid for the services, the international transaction of management fee / service fee was treated to be at arm s length - HELD THAT:- We are of the opinion that similar issue came for consideration before this Tribunal in assessee s case for assessment year 2013-14 [ 2022 (6) TMI 1433 - ITAT BANGALORE] it is only on such analysis being provided by the assessee, can the TPO proceed to examine the rendering of services as well as benefit that the assessee might derive. In the matter of coming to the conclusion on the benefit that the assessee received, clear evidence cannot be insisted upon and the overall business scenario and type of services rendered have to be looked into. We also notice that similar payment made to the very same AE for similar services under the very same agreement, has been accepted to be at Arm s Length in AY 2017-18 2018-19. We are, therefore, of the view that it would be just and appropriate to set aside the issue with regard to determination of ALP to the AO/TPO for fresh consideration in the light of law as explained above and the other observations in this order. The AO/TPO will afford opportunity of being heard to the assessee in the set aside proceedings, before deciding the issue Additional depreciation on pellets - AO disallowing the claim of additional depreciation made on Pellets by categorizing these assets as Furniture Fixtures - whether the Plastic crates and Wooden pellets used as storage devices are to be classified as Plant Machinery or as Furniture Fixtures for the purpose of claiming depreciation? - HELD THAT:- As decided in the case of Parle Bisleri Pvt. Ltd. [ 2022 (7) TMI 289 - BOMBAY HIGH COURT ] wherein they considered the issue relating to whether bottles and crates could be treated as plant within the meaning of section 32(1)(i) Thus in the interest of justice, we remit the issue in dispute to the file of AO/TPO for fresh consideration. If the assets involved before us are similar to the one considered by the Hon ble Bombay High Court, then the additional depreciation on this is to be allowed. These grounds of assessee s appeal are partly allowed for statistical purposes. Commision paid to Executive Chairman - Disallowance of expenditure u/s 40(a)(i) for non-deduction of TDS by holding it as Payments towards Royalty - HELD THAT:- Assessee has made payment to M/s. Claessens International Ltd. to design its labels. AO has observed that the labels designed by the foreign party is intangible property of that party and the assessee has been given the right to use the design and this payment is to be considered as royalty and the assessee has not deducted TDS u/s 40(a)(i) - In our opinion, payment towards getting designing the labels of the assessee is just business expenses and there was no make available to the assessee and the recipient have no permanent establishment in India or any business connection in India, hence, in our opinion, foreign entity is not liable for taxation in India. Being so, the question of deduction of TDS u/s 40(a)(i) of the Act is not applicable Disallowance of business promotion expenses - HELD THAT:- Similar issue came for consideration before this Tribunal in assessee s own case in [ 2022 (11) TMI 1402 - ITAT BANGALORE] we direct the AO to allow the deduction towards business promotion expenses incurred by the assessee. These grounds of assessee are allowed. TDS u/s 195 - Assessee reimbursed an amount to its AE towards reimbursement of part of the salary costs of a seconded employee - AO has treated these payments as Fees for Technical Services (FTS) liable for TDS and since TDS has not been done, the AO has disallowed these payments, by invoking the provisions of section 40(a)(i) - HELD THAT:- We are of the opinion that similar issue came for consideration in the case of M/s. Abbey Business Services India [ 2020 (12) TMI 570 - KARNATAKA HIGH COURT ] seconded employees have to work at such place as the assessee may instruct and the employees have to function under the control, direction and supervision of the assessee and in accordance with the policies, rules and guidelines applicable to the employees of the assessee. The employees in their capacity as employees of the assessee had to control and supervise the activities of Msource India Pvt. Ltd. Therefore, the assessee for all practical purposes has to be treated as employer of the seconded employees. There is no obligation in law for deduction of tax at source on payments made for reimbursement of costs incurred by a non resident enterprise and therefore, the amount paid by the assessee was not to suffer tax deducted at source under Section 195 Disallowance u/s 14A in relation to exempt dividend income - HELD THAT:- As we direct the AO/TPO to restrict the disallowance to the extent of exempted income earned by the assessee in this assessment year under consideration. Disallowance of product promotion expenses and Brand promotion expenses - AO surmised that the Digital media expenses incurred are in violation of Excise laws - HELD THAT:- The assessee has filed additional evidence as above. These additional evidences are produced first time before us and explained that assessee has been prevented by sufficient cause in not filing these additional evidences before the lower authorities. In our opinion, these additional evidences are very important to adjudicate this issue in dispute. Accordingly, we admit these additional evidences for adjudication after admitting for adjudication. In our opinion, it is appropriate to remit the issue in dispute to the file of AO and AO has to see whether assessee has made any direct advertisement with regard to sale and marketing of liquor or assessee made any surrogate advertisement in this respect. If the assessee has made any surrogated advertisement or indirect advertisement not mentioning anything relating to the liquor, the claim of assessee is to be allowed. With these observations, we remit the issue in dispute to the file of AO for fresh consideration. Depreciation of Goodwill - Goodwill arising on acquisition of Karnataka Breweries and Distilleries Limited and other subsidiaries - HELD THAT:- As decided in assessee own case [ 2016 (9) TMI 1527 - ITAT BANGALORE ] depreciation on goodwill is not allowable based on the facts of the case of assessee. Respectfully following that decision, we hold that depreciation on goodwill is not allowable.

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• 2023 (10) TMI 81
  Non entertaining the claims of the assessee raised first time before the AO and then before the Ld.CIT (A) - Non-Adjudication of Grounds of Appeal on the merits of the matter on the ground that once claim is not made in the return, it cannot be made during the assessment proceedings - HELD THAT:- We found that assessee sought our indulgence in the matter which is already on record and in ITR filed by the assessee for which no new facts are required to be looked into therefore in the light of the judgment of honorable apex court in the case of National Thermal Power Co Ltd [ 1996 (12) TMI 7 - SUPREME COURT] and Pruthvi Brokers and shareholders [ 2012 (7) TMI 158 - BOMBAY HIGH COURT] wherein the honorable court held that assuming the assessing officer is not entitled to grant a deduction on the basis of letter filed during the course of assessment proceedings, the appellate authorities are entitle to consider the claim and adjudicate the same. It is clear therefore that an assessee is entitled to raise not merely additional legal submissions before the appellate authorities but is also entitled to raise additional claims before them. To that extent the order of Ld.CIT (A) is perverse by not adjudicating the matter on merits and dismissed on technical grounds itself. Therefore ground no. 1 raised by the assessee is allowed and stand of Ld.CIT (A) is set aside. Allowability of sales promotion expenses incurred on doctors for prescribing appellant company s product - HELD THAT:- This issue has deliberated in detail by the honorable apex court in the case of Apex Laboratories Ltd [ 2022 (2) TMI 1114 - SUPREME COURT] - Although the similar issue has been decided in appellants own case by the co-ordinate bench of ITAT Mumbai for the AY 2015-16 and 2016-17 [ 2021 (5) TMI 1073 - ITAT MUMBAI] but in the light of decision of honorable apex court in the case of Apex Laboratories (supra) there is no rescue to the assessee and amount of sales promotion expenses is disallowable. Hence, this ground of appeal raised by the assessee is dismissed. Taxability of difference between deferral sales tax liability and its prepayment at its NPV - chargeable to tax u/s. 41 or u/s. 28(iv) ? - HELD THAT:- We have examined the claim of the assessee and we are of the view that this surplus relying on the decision of honorable apex court in the matter of CIT Vs Balkrishna Industries Ltd.[ 2017 (11) TMI 1626 - SUPREME COURT] in view of the above decision this amount is neither chargeable to tax u/s. 41 nor u/s. 28(iv) as the same is not a remission or cessation of liability for the purposes of Sec. 41 nor covered by Sec. 28(iv) as the same is not a non-monetary benefit which can be covered in sec 28(iv). Sec 28(iv) comes into picture only when sum value of benefit or perquisite arising from business or profession. Here in this case there is no benefit of perquisite arising to assessee by virtue of this arrangement. It is further to be noted that sec 28(iv) of the act has been amended by the finance act 2023 w.e.f A.Y 2024-25 which covers cash or in kind or partly in cash or partly in kind. This amendment clearly strengthens the contention of the assessee that in the year under consideration the same was not covered by section 28(iv). Revenue is not supposed to take advantage of assessee ignorance about treatment of any particular receipt/expenditure. Entries in the books of accounts are not the decisive factor as has been held by honorable apex court in the case of Kedarnath Jute Mfg Ltd [ 1971 (8) TMI 10 - SUPREME COURT] , UP state industrial development corporation [ 1997 (4) TMI 2 - SUPREME COURT] and CIT Vs Woodward Governor India Pvt Ltd. [ 2009 (4) TMI 4 - SUPREME COURT] - Decided in favour of assessee.

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• Customs

• 2023 (10) TMI 80
  Amendment in shipping bills - Seeking to redecide the amendment request of the Petitioner and carry out amendment of GSTIN details in the BOE from Delhi to Vadodara Unit - HELD THAT:- The reasons as set out in the impugned order and more particularly, the Assistant Commissioner referring to the provisions of Section 25 of the GST Act, 2017 does not commend in the present case. It is found that the reasons as set out in the impugned order are quite different from the justification, the officer intends to give in the reply affidavit. Be that as it may, there are much substance in the contention as urged on behalf of the Petitioner that the Assistant Commissioner ought to have confined himself to the provisions of the Customs Act, namely, the provisions of Section 149, which provides for amendment of the documents. There is no material adverse to the Petitioner as to why the amendment of the Bill of Entry to change the GSTIN number of Head Office, Delhi to Vadodara, Gujarat ought not to have been granted. The Assistant Commissioner certainly did not have any jurisdiction as to what would be the position of the Revenue and/or the jurisdiction or the consequences which would fall under the CGST Act, 2017. Thus, ex-facie, there was no jurisdiction with the Assistant Commissioner in taking such view and passing an order of the nature as impugned. The Commissioner of Customs needs to look into such approach of the officers and not take it lightly so as to prevent a likelihood that such officers for reasons best known to them acting contrary to the binding orders passed by this Court and this is one of such cases. In these circumstances, it is requested that the Commissioner of Customs to look into the issue on understanding of the legal matters by such officers as in the present case wherein the Assistant Commissioner has totally discarded to consider the binding effect of the orders of this Court. Petition allowed.

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• 2023 (10) TMI 79
  Rejection of request for re-testing made by the petitioner in respect of the imported goods - HELD THAT:- This Court is of the considered view that no prejudice would be caused to any of the parties if the test with regard to the imported goods of the petitioner viz., lining materials is conducted once again by a reputed laboratory engaged by the respondents to find out whether the imported goods contain Polyurethane or not and the cost for the same will have to be necessarily borne by the petitioner. The impugned order dated 1-11-2022 passed by the respondents is hereby quashed and the matter is remanded back to the respondents for fresh consideration with regard to the issue as to whether the imported goods of the petitioner under the Bill of Entry dated 16-7-2022 contains Polyurethane or not with the directions imposed.

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• 2023 (10) TMI 78
  Revocation of suspension of the respondent s (Cotoms Broker) licence - irregular availment of IGST drawback and refund by using bogus manufacturing registration - failure to comply with Regulation 10(e) and 10(n) of CBLR, 2018 - HELD THAT:- It has come on record that M/s Fine Overseas is a firm existing only on the papers which was created in the name of Shri Sirajul Kallu. The exporter was not existing at the address mentioned in the IEC. The IEC and bank accounts were obtained for facilitating the fraudulent exports to avail ineligible IGST refund / drawbacks. From the RBI remittances report regarding accepted realization of exports by M/s Fine Overseas during the relevant period it has come on record that remittance of Rs. 41,575 USD against one shipping bill was realized as against an amount of Rs. 2,10,14,836/- for 8 shipping bills. To our opinion and in light of the unretracted admission of respondents/ CB s G-card Holder about involvement of CB in this transaction we hold that this is a case of not merely the violation of Regulation 10(n) but a case of fraud committed by CB and fraud vitiates everything. The cardinal principal which is enshrined in section 17 of the Limitation Act is that fraud nullifies everything. This Tribunal in the case of M/S. SWASTIK CARGO AGENCY VERSUS COMMISSIONER CUSTOMS, (AIRPORT GENERAL) , NEW DELHI [ 2023 (5) TMI 725 - CESTAT NEW DELHI] has held that this being a case of facilitating the fraudulent exports carried out and it being duly proved during the enquiry proceedings that the exporter were non-existent. CB is rightly held to have failed to verify the correctness of the document thereby violating its obligation as a customs broker even forfeiture of security deposit has rightly been ordered. In the light of the obligations conferred upon the CB by the Regulations CBLR, 2018 and the proven fraudulent act and conduct of CB on record, we hold that suspension of his licence is quite a proportionate penalty. The order under challenge is upheld to this extent. There is no violation of Regulation 10(e) has been set aside but violation of Regulation 10(n) of CBLR, 2018 by the appellant has been confirmed with confirmation that CB licence, in given circumstances is proportionate penalty - Appeal allowed in part.

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• 2023 (10) TMI 77
  Classification of imported goods - poultry Feed Milling machinery - to be classified under CTH 9406 00 93 or under CTH 8436 10 00? - HELD THAT:- Admittedly, the Assessee has placed the purchase order dated 19.01.2011 for Poultry Feed Milling Machinery . For these items, the exporter has raised the proforma invoice on 10.08.2011. The packing list has been prepared by the overseas exporter for various items falling under these categories of the goods. All these documents were before the Customs Officials when the Bill of Entry was presented based on the Proforma Invoice issued by the exporter. After examining the goods, it is seen that the officials have directly held that the goods are found to be silos without giving any detailed findings as to how they have arrived at this conclusion. The Adjudicating Authority in the OIO has not given any detailed findings as to how the conclusion can be drawn that the goods are silos when the description given in the Bill of Entry, Proforma Invoice, Bill of Lading, Packing list, etc., specifically speak of feed milling machinery. We observe that there is direct entry at CTH 8436 which speaks of machineries used in poultry keeping - there is no categorical assertion that the goods in question fall under silos . Further there is nothing to show by way of evidence that the imported goods have been used for storing ensilage . Therefore, the classification arrived at by the Adjudicating Authority cannot be agreed upon. Classification arrived at by the Commissioner (Appeals) - HELD THAT:- He has come to an independent and different classification which amounts to going beyond the brief available to him, without putting the importer to notice about this re-classification proposal. This also amounts to non-following of principles of natural justice. It is also clearly seen that when the specific classification is available at CTH 8436 10 00, he could not have classified them under CTH 8479 90 90. Therefore, the impugned OIA is dismissed on this count. Appeal of assessee allowed.

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• 2023 (10) TMI 76
  Validity of assessment order - refund of BES - rejection on the ground that claim is pre-mature - appeal pending before the Tribunal - HELD THAT:- The refund was claimed within the prescribed time but, the appeal against rejection of claim was rejected by the Court below, on the grounds that since the appeal on merits was pending before this Tribunal, it was premature - the appeal of the assessee have been finally allowed in their favour in RASHTRIYA CHEMICALS FERTILIZERS LTD VERSUS CC ST, VISAKHAPATNAM CUS [ 2019 (1) TMI 2032 - CESTAT HYDERABAD] , wherein, it had been held that CVD was chargeable at 1% and not 5%, by following rulings of Supreme Court in the case of M/S SRF LTD., M/S ITC LTD VERSUS COMMISSIONER OF CUSTOMS, CHENNAI, COMMISSIONER OF CUSTOMS (IMPORT AND GENERAL) , NEW DELHI [ 2015 (4) TMI 561 - SUPREME COURT] . If the argument of the Revenue is accepted, it will amount to miscarriage of justice in as much as the original refund application filed was admittedly within the time limit prescribed under the Act. Further, when the refund was rejected on merits, which in appeal, was dismissed as pre-mature on the grounds that appeal on merits was pending before Tribunal and when the Tribunal finally decided the appeal on merits, the refund is now being proposed to be denied on the grounds that it was not filed within the prescribed time limit. When the grounds for considering the appeal was the pendency of the appeal before the Tribunal, the Order of the Commissioner (Appeals) dismissing the appeal as pre-mature would not tantamount to the rejection of the original application filed before the Original Authority, which was admittedly within the time limit. Therefore, the original claim of refund has to be decided on merits considering it filed within the time limit without denying on the grounds of limitation, in the facts of the case. Matter remanded to the Original Adjudicating Authority to consider and allow refunds - appeal allowed by way of remand.

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• 2023 (10) TMI 75
  Detention of imported goods - illegal import - mis-declaration of value and description of goods - rejection of declared value - valuation of the goods - HELD THAT:- On perusal of the impugned order, as submitted by Learned AR, the goods were detained on reasonable believe that they are illegally imported by mis-declaring the value and description of the goods. Preliminarily, when details were sought, manufacturer of the goods informed that the value of the imported goods are lower than the market value of the goods. Based on the above email and data from Internet, further investigation was carried out. However, on inspection of the goods by Advocate Commissioner appointed by the Hon ble High Court of Kerala, it was found that there is no such mis-declaration regarding quantity as alleged. There is no such finding in impugned order as well. Valuation of imported goods - HELD THAT:- During investigation, matter was taken up with the Authorized importer of Corelle brand items to disclose the import price of the said goods, when imported by them and they have furnished the same. However, without considering this value, respondent took assistance from Chartered Engineer. Regarding the report submitted by the Chartered Engineer, the Chartered Engineer relied on the market value of similar indigenous items in India to ascertain the assessable value. In view of above facts, the method adopted by respondent to reject the transaction value based on such report of Chartered Engineer seems to be without any legal basis. As per the law laid down by the Apex Court in the matter of EICHER TRACTORS LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2000 (11) TMI 139 - SUPREME COURT ] and also in the case of COMMISSIONER OF CUSTOMS, CALCUTTA VERSUS SOUTH INDIA TELEVISION (P) LTD. [ 2007 (7) TMI 9 - SUPREME COURT] what should be accepted as transaction value for the purpose of assessment under Customs act is the price actually paid by the importer for the particular transaction unless it is unacceptable for the reasons set out in Rule 4, thus the Hon ble Supreme Court directs the customs authority to decide the validity of the particular value instead of rejecting transaction value. In the impugned order there is no reference to transaction value and the value paid by the importer for procurement of the goods. This kind of valuation of the imported goods is incorrect and an improper appreciation of the Customs Valuation Rules, 2007 - Appeal allowed.

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• 2023 (10) TMI 74
  Classification of goods proposed to be imported - Portable Computers viz. Barcode Mobile Computers, RFID Mobile Computer and Tablet Mobile Computer - classifiable under Heading 8471 as Automatic Data Processing (ADP) machines or under Heading 8517? - HELD THAT:- From the working and features of the impugned devices, it appears that these are not the units of ADP machines, but ADP machines themselves. Note 6(D) to Chapter 84 lists certain separately presented products that are to be excluded from Heading 8471, even if they can be classified as part of an ADP system. Note 6(f) to Chapter 84 mentions that a machine incorporating or working in conjunction with an automatic data processing machine and performing a specific function other than data processing are to be classified in the headings appropriate to their respective functions or, failing that, in residual headings. As the impugned devices, as described by the applicant, appear to be akin to ADP machines performing capturing of data and its further processing, Notes 6(D) and 6(E) do not appear to have application in this case. In respect of possible alternate Heading 8517, there is a need to examine the features of these devices in the context of Note 3 to Section XVI of the Tariff. Heading 8517 covers, Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of Heading 84.43, 85.25, 85.27 or 85.28 - As the devices also have communication capabilities, including cellular connectivity in 18 out of 36 devices, the classification under Heading 8517 needs to be examined. In the instant case, these devices combine computing and scanning functions for monitoring deliveries, tracking assets, and managing inventory. 18 out of 36 devices also have communication capabilities. However, for the products under consideration, automatic data processing appears to be the main function, while other functionalities of said machines are not different from auxiliary functions that could be seen on any computer, such as desktop or laptop computers. In regards to the classification opinion of the 68th session of the Harmonized System Committee, it is observed that the committee has classified RFID/barcode readers with a mobile operating system capable of scanning and cellular connectivity under sub-heading 8517 13. This sub-heading covers smartphones. Note 5 to Chapter 85 states that For the purposes of Heading 85.17, the term smartphones means telephones for cellular networks, equipped with a mobile operating system designed to perform the functions of an automatic data processing machine such as downloading and running multiple applications simultaneously, including third-party applications, and whether or not integrating other features such as digital cameras and navigational aid systems . The note clearly states that these devices are telephones for cellular networks designed to perform the functions of ADP machines. However, the devices under consideration are principally not telephones for cellular networks. The impugned devices have many features such as higher scanning capacity, ruggedness and enterprise-level security features, which a smartphone for cellular device connection lacks. These devices are used by enterprises to capture data. As already stated the products are used in inventory management, store receiving, order processing, package tracking, tracing delivering etc. These devices use Wi-Fi connectivity and Bluetooth for information sharing. Cellular connectivity is essentially used for GPS and information sharing, where Wi-Fi is not available. Cellular connectivity is also used for making calls. However, 18 out of 36 models do not have cellular connectivity. In view of forgoing discussion and facts on record, it is opined that the devices under consideration are not classifiable as smartphones. They merit classification under sub-heading 8471 30 90. The 36 devices listed in the first paragraph of the ruling are classifiable under Customs Tariff Heading 8471 and more specifically, under sub-heading 8471 30 90 of the First Schedule to the Customs Tariff Act, 1975.

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• Corporate Laws

• 2023 (10) TMI 73
  Condonation of delay of 44 days in refiling appeal - intentional delay or not - HELD THAT:- Since a plea has been taken that the appellant was not arrayed party before the NCLT and adverse order has been passed against the appellant, it is opined that instead of filing appeal the appellant was required to file an appropriate application before the NCLT for recall of the order and also for impleading him as Respondent in the main petition. It was submitted by Mr. Mukherjee, Ld. Sr. Counsel for appellant that subsequently an intervention application was also filed. Be that as it may, considering the fact that a plea has been taken that without impleading Appellant order has been passed, it is desirable to dispose of this appeal granting liberty to the appellant to file appropriate application before the NCLT. If such application is filed it is expected that Ld. NCLT without any further delay preferably within ten days from the date of filing of such application by the Appellant may pass appropriate order in accordance with law, after hearing all the parties - It goes without saying that Ld. NCLT may not be influenced by any of the observation recorded by this Tribunal, since no opinion recorded on the merit of the case. Appeal disposed off.

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• Insolvency & Bankruptcy

• 2023 (10) TMI 72
  CIRP - Status of the entity (Corporate debtor) as MSME or not - certificate being procured after the process started - NCLAT held the status of entity as MSME - Contempt proceedings against the Resolution professional for not folloiwng the decision of NCLAT - HELD THAT:- Reliance placed in the case of SARAVANA GLOBAL HOLDINGS LTD. AND ANR. VERSUS BAFNA PHARMACEUTICALS LTD. AND ORS. [ 2019 (9) TMI 841 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that Admittedly, the Corporate Debtor is a MSME and the promoters are not ineligible in terms of Section 29A of the I B Code . Therefore, it is not necessary for the Committee of Creditors to find out whether the Resolution Applicant is ineligible in terms of Section 29A or not. In the impugned judgment, it can hardly be disputed that there is no discussion on the special circumstances other than the reference to judgment in Bafna s case. The impugned judgment is predicated on a broad reasoning as if ipso facto there is no need to call other proposals if it is an MSME. In view of the larger context it would have, we clearly observe and hold that this is not the correct position of law - This is more so as in the factual scenario of Bafna s case, the observations were made in the context of (a) before the constitution of CoCs or (b) in terms of Section 12A of the Code on the basis of an offer given by the promoter in such a case. The appellant cannot be faulted for calling for other proposals in which the proposal given by respondent No.1 was also to be examined, put them to voting before the CoCs and declare the results - impugned order set aside - appeal allowed.

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• 2023 (10) TMI 71
  Related party or not - allowed to take place on the Committee of Creditors or not - Section 5(24) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- There can be no cavil to the proposition that so far as the appellant before us is concerned, on account of both the aspects urged by learned senior counsel for the appellant, the appellant cannot be treated as a related party and thus, would find a place on the Committee of Creditors. Having opined so, insofar as the other aspects are concerned, which have not been dealt with by the NCLAT, it would not be appropriate for this Court to venture into that area and other aspects, considering the nature of appeal before this Court as the NCLAT must bestow consideration on those aspects first before this Court is called upon to take a view in the matter, especially keeping in mind the limited jurisdiction of this Court vis-a-vis Section 62 of the Code limiting the appeal to a question of law . The impugned order set aside - matter remitted back to the NCLAT for its adjudication on the various other aspects which the appellant seeks - appeal allowed by way of remand.

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• 2023 (10) TMI 70
  Scope of N/N. S.O 1683(E) issued by the Ministry of Corporate Affairs, Government of India dated 24.05.2017 - jurisdiction provided to the tribunal by the notification to decide the issues raised - HELD THAT:- It is observed that the order in the case of M/S SPARTEK CERAMICS INDIA LTD. VERSUS UNION OF INDIA ORS. [ 2018 (10) TMI 1660 - SUPREME COURT] does not leave the party without remedy and, if aggrieved, a writ petition can be filed. Appeal dismissed.

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• 2023 (10) TMI 69
  CIRP - Execution of decree awarded by foreign court - Overriding provision of IBC - execution proceedings can be continued in view of the interim moratorium or not - HELD THAT:- If any act violates the provisions of FEMA, permission of RBI may be obtained postfacto. Therefore, it cannot be said that the foreign judgement is in breach of Indian law or fails to recognise such breach and therefore is inconclusive. As far as the contention of the learned counsel for the petitioner that the Foreign Judgement has purportedly held that foreign decree cannot be enforced in India and ought to be enforced in other countries is concerned, it is clear that such an observation was only to suggest that the decree holder had an option to enforce a foreign decree against the assets of judgement debtor in other countries. The judgements cited in the case of Mrs Shobha Vishwanatha [ 1996 (4) TMI 529 - MADRAS HIGH COURT ], Algemene Bank Netherland NV [ 1989 (12) TMI 271 - HIGH COURT OF BOMBAY] were in the context of FERA regime and therefore reliance by the counsel for the petitioner on these are misplaced. The conduct speaks volumes in the case i.e. how clearly after every attempt to stall the execution proceedings failed, did the petitioner, as an after thought, try to forestall the execution proceedings. There is no merit in the petition - Petition dismissed. Seeking a formal order staying further proceedings in the execution petition in view of deemed stay of further proceedings as per the provisions of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- As far as the IBC is concerned and with regard to the correctness of the order with regard to the currency of the interim moratorium, the preamble provides to complete the resolution in a time bound manner. Now coming to the question of constructive res-judicata as held in the case of Sarguja Transport Services [ 1986 (11) TMI 377 - SUPREME COURT] , that though the principles of res-judicata is not strictly applicable to writ petitions under Article 227 of the Constitution of India, the legal principles underlying Order XXIII, Rule 1(4)(b) would as a matter of public policy be applicable to writ petitions. Application dismissed.

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• 2023 (10) TMI 68
  CIRP - validity of liquidation order - Seeking consideration of Resolution Plan - Appeals have been filed by both the Appellant stating that they were willing to give a higher offer but without considering their offer liquidation order has been passed - HELD THAT:- The ends of justice be served in giving one opportunity to the CoC to consider the Plan/Revised Offer and take decision on the said offer. It is well settled that objective of the IBC is to revive the Corporate Debtor and liquidation is the last resort. In view of the aforesaid, the order directing for liquidation is set aside and the CIRP extended for a period of 60 days from today to complete the process - It is made clear that in event Resolution Plan is approved, an application be filed for approval of the plan before Adjudicating Authority. In event, Resolution Plan is not approved, the Resolution Professional shall immediately file application for liquidation. Appeal disposed off.

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• PMLA

• 2023 (10) TMI 67
  Money Laundering - Maintainability of writ petition under Article 226 of the Constitution of India - availability of alternative efficacious remedy available to the appellants - adjudication of the provisional attachment of properties is in progress, as provided under Section 8 of the Prevention of Money-Laundering Act, 2002 - decision of such adjudicating authority would be subject to appeal under the Act itself. HELD THAT:- It is true that there is no provision for challenging an order of provisional attachment, passed under Section 5(1) of the PMLA Act. In the absence of any statutory appeal being provided to challenge a provisional attachment order, a petition under Article 226 of the Constitution of India may be maintainable on its own merits, and the Court may examine the case on hand and may or may not entertain the writ petition on its merit. However, dealing with the present facts of the case, it is undisputed that the complaint under Section 5(5) of the PMLA Act has already been made before the adjudicating authority, and notices have already been issued. The provision u/s 6 of PMLA makes it clear that the Chairman or Members of the Committee are persons with sufficient experience in the field of law, administration, finance, and accountancy. Only a person having the qualification for appointment as a District Judge or has been a Member of the Indian Legal Services and has held a post in Grade I of the service will be appointed as a Member. Therefore, there is expected to be judicial scrutiny of a complaint filed under Section 5(5) of the PMLA Act - As per the aforesaid provision, the adjudicating authority must either accept the complaint and proceed further with the same or refuse to accept the complaint. The adjudicating authority has to follow the procedure prescribed in Section 8, which suggests that detailed scrutiny would be carried out and that too, at the earliest. The Court may exercise its extraordinary powers under Article 226 of the Constitution of India under exceptional circumstances like; an order passed without jurisdiction, breach of fundamental rights, violation of the principles of natural justice, excess of jurisdiction, or a challenge to the vires of a statute or delegated legislation. However, in the present appeal, when the authority empowered under Section 5 of the PMLA Act has scrutinised the materials relied on while passing the provisional attachment order dated 09.06.2023, and when the adjudicating authority is going to examine all such issues and pass appropriate orders, we do not find any justifiable reason to reconsider the same, that too, in this intra court appeal. Therefore, this appeal is dismissed.

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• 2023 (10) TMI 66
  Maintainability of petition - availability of effective remedy of appeal - Money Laundering - proceeds of crime - provisional attachment order - freezing the movable properties - proceeds of crime were allegedly generated in a partnership firm called M/s M.J Associates in which the first petitioner held only 51% - HELD THAT:- Under the scheme of the PMLA, an independent authority is constituted as the first tier to consider the claim of an aggrieved, regarding the correctness of the provisional attachment. The second tier, in the form of the Appellate Tribunal, is also authorised to consider the correctness of the order of attachment on facts as well. Significantly, even the High Court as an Appellate Court can consider, even on facts, the validity or otherwise of an order of provisional attachment and its consequent orders. When such statutory remedies are provided, including an appellate power on facts as well to the High Court, exercising the power under Article 226 of the Constitution of India would be akin to usurping the power of the Appellate Court. Such a procedure is not legally proper or justifiable, unless there are exceptional reasons to do so. The exceptional reason warranting an interference by this Court under Article 226 of the Constitution of India according to Sri. Rohatgi, the learned Senior Counsel is that the attachment could have been effected only to the extent of the percentage of share of the first petitioner in the proceeds of the crime quantified, and any excess is ex-facie a non est. Prima facie the said contention is not tenable - if the proceeds of the crime have emerged or flowed from the business of the firm, then, prima facie, all partners may have joint and several liabilities. Of course, this is an issue which requires detailed deliberation on facts as well as on law. Suffice to state, no exceptional circumstances are made out for an interference under Article 226 of the Constitution of India. Reckoning the nature of conclusion being arrived at in this writ petition, the question on the liability of the first petitioner for the entire Rs. 910.29 crores is left open for consideration. The objection of the respondents regarding the maintainability of the writ petition is upheld. The writ petition is therefore held to be not maintainable in view of the alternative remedy available - Petition dismissed.

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• Service Tax

• 2023 (10) TMI 65
  Wrongful levy of service tax - HELD THAT:- In the pending case as on interim measure, the concerned appellant (tenant) was directed to furnish bank guarantee qua the sum involved subject to which, the impugned judgment of the High Court was stayed. Issue notice returnable in six weeks.

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• 2023 (10) TMI 64
  Appropriate Forum - Hon ble Supreme Court or otherwise - Levy of service tax - amount received against WRP Way maintenance labour service by the Respondent is towards maintenance of Railway Tracks - Cleaning of Station services - W R Grinding FB Welding services falls under the category of Repairs and Maintenance of Railway Tracks as a original work - serial No. 12 of the Notification No. 25/2012-ST dated 20.06.2012 - Corroborative evidences or not - shared data of noticee by the Income tax department can be used against the applicant without carrying out Independent inquiry / investigation by the Applicant Department or not. Whether the order-in-original under challenge involves a question relating to determination of rate of duty of excise or the value of goods for the purposes of assessment of duty as appearing in Section 35G(1) and 35L(b) and therefore for the issue involved in the present appeal, the appeal would only be maintainable before the Hon ble Supreme Court? HELD THAT:- Reading the question of law framed indicates that the issue under consideration is as to whether the assessee was eligible for exception / exemption under Notification No. 25 of 2012. The exemption if denied, would require adjudication on rate of duty and therefore the appeal would fall under the caption not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for purposes of assessment . Essentially even if it is the contention of the appellant that from the year 2012, a negative list of services was prescribed and therefore there is no classification of service left open, the case of Saumya Construction Pvt. Ltd. [ 2014 (12) TMI 127 - GUJARAT HIGH COURT] where it was held that As can be seen on a combined reading of Section 35G and Section 35L of the Act, if the order of the Tribunal relates to determination of the rate of duty, the appeal would lie before the Supreme Court and not before the High Court. Even the Karnataka High Court in the case of Scott Wilson [ 2011 (4) TMI 500 - KARNATAKA HIGH COURT] held that it is clear that an order passed by the Appellate Tribunal relating to the determination of any question having relation to the rate of service taxes or to the value of services for the purposes of assessment lies to the Supreme Court under Section 35L(b) of the Act and not to the High Court under Section 35(G). This appeal under Section 35G, on the substantial questions of law raised, is not maintainable and is therefore accordingly dismissed.

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• 2023 (10) TMI 63
  Jurisdiction to issue SCN - SCN issued on the basis of the provisions declared ultra vires - Time-barred - HELD THAT:- The argument with respect to limitation is based on Section 73(1) of the Finance Act, 1994. Section 73(1), which came into effect from 28.05.2012, enables a notice to be served on the person chargeable with the service tax, which has not been levied or paid or which has been short-levied or short-paid within a period of 18 months from the relevant date. The relevant date discernible from Section 73(6) is the date on which the return is filed or the date prescribed under the Rules, if no return is filed. It has also to be noticed that when there is an allegation of short levy or short payment or erroneous refund on the grounds of (a) fraud, (b) collusion, (c) willful mis-statement, (d) suppression of facts; or (d) contravention of any of the provisions of this Chapter or the rules made thereunder with intent to evade payment of service tax, then the period of limitation is five years which period stands substituted for eighteen months as seen from the proviso to sub-section (1) of Section 73. When there is a delayed filing of the return under Rule 7C of the Service Tax Rules, 1994, it has to be presumed that the amount specified in Rule 7C has been paid and so has the tax liability been satisfied. In that circumstance, the relevant date is the date on which the tax has been paid. As is evident from Annexure-17, for the period between April, 2015 and September, 2015 the assessee has filed an ST-3 Return on 25.07.2016 while returns for the remaining relevant period were filed thereafter. The limitation, hence, commences on 25.07.20216 and as on 25.07.2021, the date of demand-cumshow cause notice; the five year period, has not expired. The ground of limitation raised fails and is rejected. Jurisdiction to issue SCN - HELD THAT:- The Central Services and Goods Act, 2017 came within one year, i.e. on 12.04.2017. The C.G.S.T. Act contained Section 173 by which Chapter V of the Finance Act stood omitted. However, Section 174 of the CGST Act dealing with Repeal and Saving, by sub-section (2) saved the operation of the Amended and Repealed Acts and orders issued thereunder or anything duly done or suffered thereunder; without any right, privilege or law accrued under the Amended Act being affected by reason of the amendment in Section 173. Hence, despite the CGST Act having come into force on 01.08.2017, the proceedings under Chapter V of the Finance Act, 1994 stands validated. Another contention raised by the learned counsel for the petitioner that earlier a notice was issued which was replied, but no action was taken thereunder - HELD THAT:- It is seen from Annexure-9 that a pre-notice consultation was scheduled on 09.07.2021 at 12:00 P.M. through virtual mode. The e-mail produced at Annexure-9 is said to have enclosed a demand-cum-show cause notice which was almost on the same lines of the demand-cum-show cause notice; but without a date. The petitioner has replied to the same by Annexure-13, but however, raising many contentions on jurisdiction, limitation and so on, as also citing various decisions, but, however, not focusing on the factual allegations raised of mis-representation and suppression of the actual taxable value of services provided during the assessment years. There are absolutely no reason to interfere with the show cause notices - petition dismissed.

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• 2023 (10) TMI 62
  Extended period of limitation - works contract service or not - applicability of rule 2A of the Service Tax (Determination of Value) Rules 2006 - Suppression of facts or not - HELD THAT:- There was a lot of ambiguity regarding the category of the services after the introduction of works contract service w.e.f. 01.06.2007 and it is only when the Supreme Court clarified the position in Larsen and Toubro [ 2015 (8) TMI 749 - SUPREME COURT ] that it was settled that indivisible contracts were liable to service tax under works contract w.e.f. 01.06.2007. Infact, disputes were subsequently also raised and the Supreme Court in Total Environment Building Systems [ 2022 (8) TMI 168 - SUPREME COURT ] affirmed the judgment of the Supreme Court in Larsen and Toubro and held the judgment did not require to be referred to a Larger Bench of the Supreme Court. In similar facts, the Tribunal in Incredible Unique Buildcon [ 2022 (7) TMI 1182 - CESTAT NEW DELHI ] held that the invocation of the extended period of limitation would not be justified. It is, therefore, not possible to sustain the invocation of the extended period of limitation from June 2007 upto September 2010 resorted to in the first show cause notice dated 23.10.2012 issued for the period January 2007 to March 2012. The appellant was clearing the pre-fabricated/pre-engineered steel buildings/structures and the parts thereof from its plants on payment of the excise duty as applicable and under the cover of the statutory prescribed invoices. This duty paid goods were cleared to the designated sites where erection, installation and commissioning were to be undertaken - the appellant has to pay service tax on the value of services as per rule 2A of the 2006 Rules and thereafter avail the CENVAT credit - On calculation of the demand under rule 2A of the 2006 Rules, the appellant would be entitled to refund of Rs. 28.72 crores which, the learned senior counsel for the appellant has stated, the appellant would not claim as refund. However, demand beyond extended period of limitation set aside. - Refund of the amount paid for the for the said period allowed. Appeal allowed.

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• 2023 (10) TMI 61
  Exemption from service tax or not - Business Auxiliary Service - Consulting Engineering Service - Renting of Immovable Property Service - Commercial Training or Coaching Service - whether the activities of the appellant relate to transmission and distribution of electricity and are exempted from service tax or not? - interest - penalties - extended period of limitation. HELD THAT:- In its judgment in the case of STATE OF HARYANA VERSUS DALMIA DADRI CEMENT LTD. [ 1987 (11) TMI 94 - SUPREME COURT] pertaining to the Sales Tax Act it was held by the Hon ble Apex Court that from a plain reading of the relevant clause it is clear that expression for use means intended for use. Thus the word for appearing in the notifications are to be construed as expressions of width and amplitude which cover within its scope any activity which is rendered in connection with the main activity of transmission and distribution of electricity. While examining a similar phrase the Hon ble Bombay High Court in the case of OIL AND NATURAL GAS CORPN. LTD. VERSUS CCE, SERVICE TAX AND CUSTOMS [ 2013 (4) TMI 103 - BOMBAY HIGH COURT] has held that - where the legislature or its delegate uses the expression in or in relation to , its object and purpose is to widen the scope and purview of its entitlement - A similar treatment has to be given to the word for in the context of the notifications. It would not suffice to examine the form of the activity sought to be classified in isolation. The guiding factor would be to examine it in conjunction with the real nature and substance of the main activity i.e transmission and distribution. It has hence to be ascertained whether the activity sought to be classified is an essential activity which is having a direct and close nexus with transmission and distribution of electricity. If so, all these services would be eligible for the exemption otherwise not. In the case of M/S S.K. SHAH VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, KOLHAPUR [ 2019 (2) TMI 1103 - CESTAT MUMBAI] it was held that by virtue of Notification No. 45/2010-ST dated 20.7.2010, transmission and distribution of electricity for the period upto February, 2010 has been retrospectively held to be not leviable to Service Tax in exercise of powers conferred by Section 11C of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. Subsequently, the transmission of electricity has been held exempted vide Notification No. 11/2010- ST dated 27.2.2010 and distribution of electricity under Notification No. 32/2010-ST dated 22.6.2010. It would now merit to examine the individual activities sought to be taxed by the department. The description of the activity as given by the appellant is mentioned below. i) Registration / application / name transfer from Wind Energy Generators (WEG): [ Business Auxiliary Service ], Registration fee, name transfer fee and Installation tie up fee are fixed as statutory fee for grant of permission for setting up of a wind mill. ii) Preparation of field feasibility reports etc., to establish wind farms. [ Consultant Engineer Service ]. The field feasibility report is prepared for the purpose of installation of wind electric generator. It is a mandatory/ statutory document and helps the appellant to monitor the role of the applicant in its capacity as an electric transmission and distribution utility. Without assessing feasibility and hereafter approving the grid tie up the appellant cannot allow the electricity generated by the WEG to enter the grid. iii) Non-employees for training/workshop. [ Commercial Coaching and Training ]. The training given to its own employees is without collecting fees. Training for others is done by collecting a nominal fee for meeting the cost of training. The training is given as a part of human resource development as skill upgradation is essential for providing and maintaining proper transmission and distribution of electricity. iv) Leasing land for power plant. [ Renting of Immovable Property Service ]. The vacant land of the appellant was given on lease for setting up diesel engine-based power project having 4 units of 49 MW each. The land has been leased out to optimize the generation, transmission and distribution of electricity. As per the discussions at para 7 and the judgments above it is clear that all taxable services provided for the transmission and distribution of electrical energy are exempt from the liability to service tax during the impugned period. The sole purpose of the impugned activities as described above are for ensuring the transmission and distribution of electricity. These services are not provided independently and are part of the appellant s statutory functions and are hence done for transmission and distribution of electric power to various consumers located within the state of Tamil Nadu in terms of the provisions of the Electricity Act, 2003. Without the said services being rendered transmission and distribution of electricity would be impaired. This being so the activities though being taxable services are covered by the exemption notifications stated above prior to 1.7.2012, and from the said date they figure in the negative list as per Section 66D(k) of the Finance Act 1994. Interest - penalties - extended period of limitation - HELD THAT:- Since the issue has been decided on merits in favour of the appellant the question of paying duty, interest, penalties or of invoking the extended period does not arise. Appeal allowed.

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• 2023 (10) TMI 60
  Valuation of service tax - non-inclusion of value of free supply of materials, in the gross amount, for arriving at the taxable turnover for payment of service tax - HELD THAT:- Admittedly the free supply, in the facts of the present case, of reinforcement and structural steel, was not part of the gross value of the contract, as agreed between the parties. In the facts of this case are covered in favour of the Appellant assessee by the ruling of the Apex Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [ 2018 (2) TMI 1325 - SUPREME COURT] , where it was held that the value of free supply of materials cannot be added to the gross value of the composite contract/works contract for calculation of service tax, whether the free supplies to construction service provider is outside the taxable value or gross amount charged, within the meaning of expression in Section 67 of the Finance Act. The impugned order set aside - appeal allowed.

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• 2023 (10) TMI 59
  Levy of penalty - Service tax with interest paid before issuance of SCN - CENVAT Credit used to pay duty which was found ineligible - failure to discharge the duty for the period from February 2009 to December 2009 - Penalty under section 76, 77 and 78 of FA - HELD THAT:- The SCN has framed allegations against the appellant for not having discharged duty for the period from February 2009 to December 2009. The demand had not crystallized at that stage and the question of the adjudicating authority scrutinizing the CENVAT credit entries would have been premature. As seen from para 3.0 of the impugned order it was in their reply to the SCN vide their letter dated 04/07/2012 that the appellant had claimed and brought to the notice of the learned adjudicating authority that they had discharged the entire demand even before issue of the SCN. It is only when the issue was finally examined by the adjudicating authority after following the process of natural justice that he recorded his findings, and the demand was confirmed. Scrutiny of the payments made against the demand alleged in the SCN is part of the quasi-judicial process prior to the issue of the order. The non receipt of service has not been disputed before us. Further it is also seen that the impugned order has pointed out discrepancies in the amounts claimed to have been debited towards duty from the credit account and that which was actually debited - This has also not been disputed by the appellant. This only goes to show that the scrutiny of payments claimed by the appellant is a part of the quasi-judicial process involved in the passing of the order in original and any discrepancies noticed and pointed out cannot be faulted. Levy of penalty - issuance of SCN - tax paid along with interest before the issuance of show-cause notice - Section 73(3) of the Finance Act 1994 - HELD THAT:- From a plain reading of the section 73 it is seen that nothing contained in sub-section (3) shall apply to a case where section 73 (4) applies. This is a case where the Original Authority has invoked the extended time limit under proviso to section 73(1) of the Finance Act 1994 for demand of service tax citing suppression of facts with an intention to evade payment of duty. The appellant has agreed that duty is payable for the entire period which was subsequently covered by the SCN and has paid a substantial part of the dues. Hence the payment of duty for the extended period, which is triggered by fraud, suppression etc, is not under challenge. This being so section 73 (4) applies in their case and they cannot seek protection under section 73 (3) - the appellants case is covered by section 73 (4) due to which section 73 (3) will not apply. Penalty under section 76, 77 and 78 of FA - HELD THAT:- The Appellant has stated that they had not discharged service tax for the period February 2009 to December 2009 due to financial constraints. The Appellant had borrowed heavily from the banks and all receipts were going directly to the bank as per the escrow arrangement. After adjustment of the loan liability the banks directly dispersed the salaries to the employees listed with the bank. Therefore, the appellant was not in a position to pay service tax within the time limit prescribed under the statute. However, the moment the investigating authority discovered the non-payment of service tax, the appellant had discharged duty along with part interest - It was for the appellant to prove financial constraint before the original authority and thereby plead reasonable cause for delayed payment. A bald statement of financial constraint will not be enough. Even as per section 106 of the Indian Evidence Act, the fact within the knowledge of a person must be proved as the burden of proof is cast upon him - the appellant has not shown reasonable cause within the meaning of Section 80 ibid for their failure to pay duty. The subjective satisfaction of the adjudicating authority cannot be interfered with as the impugned order is not shown to be demonstratively perverse based on no evidence or misreading of evidence or which a reasonable person could not form. The penalty imposed is mandatory in nature and as held by the Hon ble Supreme Court in UNION OF INDIA AND OTHERS VERSUS DHARMENDRA TEXTILE PROCESSORS AND OTHERS [ 2008 (9) TMI 52 - SUPREME COURT] , the section prescribing mandatory penalty should be read as penalty for a statutory offence and the authority imposing penalty has no discretion in the matter in such cases and was duty bound to impose penalty equal to the duties so determined. The impugned order merits to be upheld and is so ordered - Appeal dismissed.

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• 2023 (10) TMI 58
  Levy of Service Tax - amount reimbursed for repairs carried out during the warranty period and other free services - April 2006 to March 2007 - HELD THAT:- For earlier period i.e. May 2003 to March 2004 and April 2006 to March 2007 in appeal No.ST/582/2008 and ST/583/2008, similar issue was considered by this Tribunal and following the ratio laid down in the case of COMMISSIONER OF CENTRAL EXCISE, INDORE VERSUS JABALPUR MOTORS LTD. [ 2015 (1) TMI 1140 - CESTAT NEW DELHI ], the impugned orders were set aside and the appeals filed by the appellant were allowed, where the Tribunal held t he free services are rendered to the car buyers and not to M/s. MUL and the car buyers pay nothing therefor. Seen in this light it is evident that the demand of service tax as per column 5 of the table above is misconceived. There are no reason not to follow the said judgment of this Tribunal delivered for the earlier period. Consequently, following the said judgment, the present appeal is also allowed.

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• 2023 (10) TMI 57
  Refund of service tax paid in excess - refund claim was rejected on the ground of limitation prescribed under Section 11B of Central Excise Act, 1944 - HELD THAT:- It is found that on applying Section 11B of the Central Excise Act to the refund claims, a portion of the refund claims be time barred; however, the claim of the appellant relating to the tax amount paid on 29.06.2017 may not be hit by limitation prescribed under Section 11B. Also, there is an argument on merit relating to Point of Taxation Rules. Both sides fairly concede that the matter may be remanded for verification of the claim to the extent of payment made on 29.06.2017 and also on merit. The adjudicating authority to decide the same afresh. The impugned order is set aside and the appeal is remanded to the adjudicating authority to decide the issue on merit and on limitation relating to the refund claims pertaining only to the period 29.06.2017 as for the earlier period, it is hit by limitation. Appeal allowed by way of remand.

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• 2023 (10) TMI 56
  Classification of services - business support service or not - supply of fly ash to cement companies - period from May, 2006 to September, 2010 - HELD THAT:- A more or less identical issue has been considered in M/S. METTUR THERMAL POWER STATION VERSUS CCE, SALEM [ 2014 (12) TMI 594 - CESTAT CHENNAI] wherein this Bench has followed its earlier order in METTUR THERMAL POWER STATION VERSUS CCE (ST) , SALEM [ 2013 (10) TMI 436 - CESTAT CHENNAI] where the demand was set aside. The issue on hand is no more res integra in view of the fact that the same has already been decided by this very Bench in the cases of M/s. Mettur Thermal Power Station and hence, following the ratio laid down therein, the disputed activities of the appellant cannot be treated as business support service and the consequent demand would not therefore survive. Appeal allowed.

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• 2023 (10) TMI 51
  Refund of service tax - claim rejected stating that the claim was filed after expiry of one year from the relevant date (date of payment of tax) - Section 11B of Central Excise Act, 1944 - HELD THAT:- The original authority and appellate authority have held that the refund claim was filed beyond the limitation prescribed by Section 11B of Central Excise Act, 1944 - On perusing the impugned order-in-appeal it is noted that learned Commissioner (Appeals) has followed the ruling by Hon ble Supreme Court in the case of COLLECTOR OF CE., CHANDIGARH VERSUS DOABA CO-OPERATIVE SUGAR MILLS [ 1988 (8) TMI 103 - SUPREME COURT] . Learned Commissioner (Appeals) has reproduced the headnotes in his order which clearly indicate that Hon ble Supreme Court has held that for the refund claims made before the departmental authorities, limitations provided under Customs Act and Central Excise Act are applicable. Under the provisions of Section 11B of Central Excise Act, 1944, the refund claim has to be filed within one year from the relevant date and in the present case, relevant date is date of payment of service tax. It is clear from the record that the present refund claim was not filed within one year from the date of payment of service tax. There are no infirmity in the impugned order - appeal dismissed.

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• Central Excise

• 2023 (10) TMI 55
  Valuation of Inter-unit transfer of goods for captive consumption - entire value (i.e. 115% / 110% of the cost of production) or the actual cost of production (that is 100% of cost) excluding notional loading (that is 115% / 110%) of the goods manufactured by 1 unit, would be the cost of raw material of the another unit (who used the goods in the manufacture of another article) for the purpose of determining the value under Rule 8 of the Valuation Rules and Cost Accounting Standard-4 issued by ICWAI - Confiscation of goods - imposition of redemption fine - penalty. HELD THAT:- It would be appropriate that this appeal is remanded to the Tribunal by setting aside the impugned order dated 22nd March 2013 with a direction that the Tribunal on remand reconsiders the issue in the light of the decision of the larger bench in the case of M/S ITC LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI [ 2016 (4) TMI 280 - CESTAT CHENNAI] . Appeal disposed off.

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• 2023 (10) TMI 54
  Condonation of delay in filing appeal before Commissioner (Appeals) - sufficient reason for delay provided or not - delay occurred on account of illness of appellant - HELD THAT:- The plea of illness put forth by the appellant for explaining the delay caused in filing of the appeal to the Commissioner (Appeals) is on the face of the record untenable. The the demand notice of which the appellant is aggrieved was passed by the Assistant Commissioner, CGST, Dibrugarh Division on 01.05.2019. The limitation for filing appeal against this order to the Commissioner (Appeals) is 60 days which may be further extended by 30 days as per Section 35 of the Central Excise Act. The appellant has annexed the documents of his medical condition and the travel documents along with the writ petition, a perusal whereof would reveal that the appellant proceeded from Dibrugarh to Chennai on 02.07.2019 - the appellant was not suffering from any such medical condition from 01.05.2019 to 27.07.2018 which could have prevented him from filing an appeal against the order dated 01.05.2019 within the stipulated period of limitation. Law is well settled by a catena of judgments that the limitation for filing appeal as provided under Section 35 of the Central Excise Act overrides the provisions of Section 5 of the Limitation Act and hence, the delay cannot be condoned beyond 30 days from the statutory period of appeal i.e. 60 days of communication of the order to the aggrieved person. In the present case, admittedly the appellant filed the appeal against the order dated 01.05.2019 to the appellate authority i.e. Commissioner (Appeals) on 03.10.2019 which is well beyond the period of 60 days and further extended by 30 days. In the memo of appeal filed along with the writ petition, there is no indication justifying the reasons for delay in approaching the Commissioner (Appeals) against the order in original - on a perusal of the memorandum of appeal filed before the CESTAT, there are no justifiable cause because even in this memorandum, it is clearly stated that the order imposing service tax passed by the Assistant Commissioner was received by the appellant on 23.05.2019. As per discharge summary (page-31), the appellant was hale and hearty till 27.07.2018 on which date he was admitted in the hospital in relation to cardiac issues which manifested in the morning of 27.07.2018. The appellant was discharged from the hospital on 30.07.2018 but the appeal came to be filed as late as on 03.10.2019. Considering the statutory bar prescribed under Section 35 of the Central Excise Act and the law as laid down by Hon ble the Supreme Court in the judgments, the appeal to the Commissioner (Appeals) could not have been entertained on merits as the same was time barred - reliance can be placed in SINGH ENTERPRISES VERSUS COMMISSIONER OF C. EX., JAMSHEDPUR [ 2007 (12) TMI 11 - SUPREME COURT] . The judgment relied upon by the appellant s counsel in M/S. SHEKHAR RESORTS LIMITED (UNIT HOTEL ORIENT TAJ) VERSUS UNION OF INDIA ORS. [ 2023 (1) TMI 256 - SUPREME COURT] dealt with the extension of a scheme issued under the service tax regime. In the said case, Hon ble the Supreme Court held that the appellant therein was not responsible for not availing the benefits of the scheme in time. Thus, the said judgment is clearly distinguishable that the same has no application to the controversy at hand - In the case of COMMISSIONER OF INCOME-TAX VERSUS PHEROZA FRAMROZE AND CO. [ 2017 (5) TMI 436 - SUPREME COURT] , the Hon ble Supreme Court while considering the provisions of Section 268 of the Income Tax Act, held that the High Court has inherent jurisdiction to condone the delay. The said judgment also, does not deal with the mandatory provisions of the Central Excise Act and hence, is not applicable for deciding the controversy involved in this appeal. Thus, the CESTAT was absolutely justified in refusing to entertain the appeal filed by the appellant and in refusing to direct the Commissioner (Appeals) to condone the delay in filing of the first appeal, as stated above. As a consequence, the appeal lacks merit and is dismissed.

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• 2023 (10) TMI 53
  CENVAT Credit - input services - Constructions Services - Outdoor Catering - Travel Agent - AMC on Photocopy - Sify Communication (Broad Band Service). Constructions Services - HELD THAT:- As regards Construction Services which was availed by the appellant prior to December 2008 for modifying the facilities related to production are covered in the definition of Input Service as provided under Rule 2(l) of the CENVAT Credit Rules, 2004. This issue has been decided in favour of the appellant in the case of M/S RICO AUTO INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EXCISE-DELHI-III [ 2023 (5) TMI 601 - CESTAT CHANDIGARH] . Outdoor Catering - HELD THAT:- The CENVAT credit has only been denied on the ground that the sample salary slip of one of the employees shows that the appellants are recovering some amount from the employees for providing outdoor catering but this allegation was not there in the show-cause notice and hence, the Order-in-Original has travelled beyond the show-cause notice. Moreover, prior to 1st April, 2011, CENVAT credit on Canteen Services was permitted as held by the Hon ble High Court of Karnataka in the case of TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED, VERSUS THE COMMISSIONER OF CENTRAL TAX, BANGALORE [ 2021 (5) TMI 880 - KARNATAKA HIGH COURT] which was affirmed by the Hon ble Supreme Court in TOYOTA KIRLOSKAR MOTOR PRIVATE LIMITED VERSUS THE COMMISSIONER OF CENTRAL TAX [ 2021 (12) TMI 420 - SC ORDER] also. Therefore, the CENVAT credit has rightly been availed with regard to the outdoor catering. Travel Agent - HELD THAT:- The service tax paid to travel agents for making arrangements of the employees to visit customers, suppliers and other authorities is for the purpose of business only and cannot be termed as for personal use of the employees . This is also covered in the case of M/S. RAMCO CEMENTS LTD. VERSUS CCE, PUDUCHERRY [ 2017 (4) TMI 427 - CESTAT CHENNAI] . AMC on Photocopy - Sify Communication (Broad Band Service) - HELD THAT:- These services fall very much in the definition of Input Service as both the services are required for the business purposes and not for any personal use. The impugned order set aside by allowing all the five appeals of the appellant - appeal allowed.

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• 2023 (10) TMI 52
  Determination of annual capacity of production without issuance of the show cause notice - principles of natural justice - HELD THAT:- Although the appellant has not challenged the order of re-determination of annual capacity of production determined by the Joint Commissioner on subsequent dates, but while demanding duty from the appellants, the appellants are having right to challenge the re-determination of annual capacity of production as held by the Hon ble High Court in the case of M/S. BENGAL HAMMER INDUSTRIES (P) LTD. VERSUS UNION OF INDIA ORS. [ 2023 (5) TMI 437 - CALCUTTA HIGH COURT] . The order of re-determination of annual capacity without issuance of show cause notice is not sustainable. Accordingly, the impugned orders have no merits, therefore, the same are set aside. Appeal allowed.

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• 2023 (10) TMI 50
  Refund claim - payment under protest or not - duty amount paid by the appellant through reversal of cenvat credit and thereafter disputing/contesting the same on grounds of limitation - refund claim is time barred as it is filed after one year from the order or not - adjustment of the penalty amount from the sanctioned refund amount - HELD THAT:- The appellant avers that the time limit does not apply in their case as the payment of the duty amount through reversal of Cenvat Credit was disputed/ contested from the show-cause stage, hence it was paid under protest, and therefore the time limit under Section 11B does not apply. It is found that the appellant on being pointed out by the audit has agreed and paid the duty amount. Thereafter, after the issue of the show-cause notice they have contested the demand on the ground of limitation, the same cannot be considered as payment under protest. Time Limitation - HELD THAT:- The appellant has filed the refund claim after one year after the Hon ble CESTAT in CYIENT DLM PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, MYSURU COMMISSIONERATE [ 2019 (3) TMI 176 - CESTAT BANGALORE] , the relevant date for filing the refund in such cases is as per Section 11B(5) Explanation (B) (ec) of Central Excise Act, 1944, which mentions that the relevant date for filing the refund is the date of order of the Appellate Tribunal, however in this case the refund claim has been filed after one year of the Tribunal s order, hence it was held to be time-barred. Adjustment of the proportionate penalty imposed and adjusted by the adjudicating authority - HELD THAT:- The Commissioner (Appeals) has held that the Hon ble Tribunal s has not passed any order as regards the penalty on the ineligible cenvat credit availed by the appellant. The appellant submits that the Hon ble Tribunal has followed the decision in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE VERSUS M/S BILL FORGE PVT LTD, BANGALORE [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT] of the Hon ble High Court of Karnataka and interest only has been set aside, hence the Hon ble Tribunal has not passed any order as regards the penalty. It is found that proportionate penalty amount is payable as there was wrong availment of Cenvat credit. Therefore the imposition and adjustment of the penalty amount from the sanctioned refund amount is maintainable. The appeal is not maintainable and hence the same is dismissed.

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• 2023 (10) TMI 49
  CENVAT Credit - waste Met Coke generated during the course of sieving of Met Coke to be used in the manufacture of steel - common input services used for the said exempted product Met Coke as well as taxable goods - non-maintenance of separate records - Rule 6 of Cenvat Credit Rules - HELD THAT:- The Hon ble Supreme Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] in similar circumstances while examining the applicability of Rule 6(2) bagasse generated during the course of manufacture of sugar held In the present case it could not be pointed out as to whether any process in respect of Bagasse has been specified either in the Section or in the Chapter notice. In the absence thereof this deeming provision cannot be attracted. Otherwise, it is not in dispute that Bagasse is only an agricultural waste and residue, which itself is not the result of any process. Therefore, it cannot be treated as falling within the definition of Section 2(f) of the Act and the absence of manufacture, there cannot be any excise duty. It is found that subsequently this judgment has been followed in series of cases including by the Tribunal in the case of COMMISSIONER OF C. EX. AND CUS., RAIPUR VERSUS JAYASWAL NECO INDUSTRIES LTD. [ 2017 (7) TMI 1184 - CHHATTISGARH HIGH COURT] , wherein it is held that the waste Met Coke generated during the course of manufacture of sieving of iron ore fines cannot be subjected to Rule 6 of the Cenvat Credit Rules, 2004. There are no merit in the impugned order, consequently the same is set aside - appeal is allowed

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• Indian Laws

• 2023 (10) TMI 48
  Right of the auction purchaser of the property - Right of the Defaulter of Loan / Borrowers to redeem the secured property - Exercise of writ jurisdiction under Article 226 of the constitution - alternative remedy available to the Borrowers had already been availed of - confirmation of sale by the Bank under Rule 9(2) of the Rules of 2002 invests the successful auction purchaser with a vested right or not - impact of the amended Section 13(8) of the SARFAESI Act on the Borrowers right of redemption in an auction conducted under the SARFAESI Act - withholding of sale certificate under Rule 9(6) of the Rules of 2002 and enter into a private arrangement with a borrower - applicability of equitable considerations to override the outcome contemplated by the statutory auction process prescribed by the SARFAESI Act - right of redemption of mortgage stood extinguished upon publication of notice of auction or not - decisions of Telangana High Court in the case of CONCERN READYMIX AND ORS. VERSUS THE AUTHORISED OFFICER, CORPORATION BANK AND ORS. [ 2018 (12) TMI 1982 - TELANGANA HIGH COURT ] and AMME SRISAILAM VERSUS UNION BANK OF INDIA AND ORS. [ 2022 (8) TMI 1440 - TELANGANA HIGH COURT] lay down the correct position of law or not. HELD THAT:- The conclusion is summarised as below: (i) The High Court was not justified in exercising its writ jurisdiction under Article 226 of the Constitution more particularly when the borrowers had already availed the alternative remedy available to them under Section 17 of the SARFAESI Act. (ii) The confirmation of sale by the Bank under Rule 9(2) of the Rules of 2002 invests the successful auction purchaser with a vested right to obtain a certificate of sale of the immovable property in form given in appendix (V) to the Rules i.e., in accordance with Rule 9(6) of the SARFAESI. (iii) In accordance with the unamended Section 13(8) of the SARFAESI Act, the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. In other words, the borrower s right of redemption did not stand terminated on the date of the auction sale of the secured asset itself and remained alive till the transfer was completed in favour of the auction purchaser, by registration of the sale certificate and delivery of possession of the secured asset. However, the amended provisions of Section 13(8) of the SARFAESI Act, make it clear that the right of the borrower to redeem the secured asset stands extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002. In effect, the right of redemption available to the borrower under the present statutory regime is drastically curtailed and would be available only till the date of publication of the notice under Rule 9(1) of the Rules of 2002 and not till the completion of the sale or transfer of the secured asset in favour of the auction purchaser. (iv) The Bank after having confirmed the sale under Rule 9(2) of the Rules of 2002 could not have withhold the sale certificate under Rule 9(6) of the Rules of 2002 and enter into a private arrangement with a borrower. (v) The High Court under Article 226 of the Constitution could not have applied equitable considerations to overreach the outcome contemplated by the statutory auction process prescribed under the SARFAESI Act. (vi) The two decisions of the Telangana High Court in the case of Concern Readymix and Amme Srisailam do not lay down the correct position of law. In the same way, the decision of the Punjab and Haryana High Court in the case of Pal Alloys [ 2021 (12) TMI 1462 - PUNJAB AND HARYANA HIGH COURT] also does not lay down the correction position of law. The Telangana High Court in Concern Readymix (supra), examined the amended Section 13(8) of the SARFAESI Act, held that the same only restricts the right of the secured creditor and not the borrowers right of redemption, which will continue to exist until the execution of the conveyance. (vii) The decision of the Andhra Pradesh High Court in Sri Sai Annadhatha Polymers [ 2018 (6) TMI 1840 - ANDHRA PRADESH HIGH COURT] and the decision of the Telangana High Court in the case of K.V.V. Prasad Rao Gupta [ 2021 (2) TMI 1361 - TELANGANA HIGH COURT] lay down the correct position of law while interpreting the amended Section 13(8) of the SARFAESI Act. The true purport and scope of the amended Section 13(8) of the SARFAESI Act was looked into by the Andhra Pradesh High Court in Sri. Sai Annadhatha Polymers Anr. v. Canara Bank rep. by its Branch Manager, Mandanapalle. The court took the view that in accordance with the unamended Section 13(8) of the SARFAESI Act, the right of the borrower to redeem the secured asset was available till the sale or transfer of such secured asset. The court went on to say that the amended provisions of Section 13(8) of the SARFAESI Act brought in a radical change inasmuch as the right of the borrower to redeem the secured asset would stand extinguished thereunder on the very date of publication of the notice for public auction under Rule 9(1) of the Rules of 2002. The amended Section 13(8) of the SARFAESI Act was also looked into by the High Court of Telangana in the case of K.V.V. Prasad Rao Gupta v. State Bank of India [ 2021 (2) TMI 1361 - TELANGANA HIGH COURT] and relying on the decision of the Andhra Pradesh High Court in the case of Sri. Sai Annadhatha Polymers, the court observed under Rule 8(6) of the Rules of 2002, the petitioners are entitled for a thirty day notice period enabling them to clear the loan and to redeem the property as envisaged under Section 13(8) of the SARFAESI Act, and that if they fail to repay the amount within the stipulated period, after expiry of said period of 30 days, the secured creditor is entitled to issue publication of sale notice under Rule 9(1), and that on publication of such notice, the right of the borrower to redeem the property stands extinguished. Appeal allowed.

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• 2023 (10) TMI 47
  Dishonour of Cheque - misuse of blank cheque - rebuttal of presumption - cheque signed under coercion or not - HELD THAT:- In the instant case, the Complainant has duly proved his cheque and legal notice the accused/applicant also admitted his signature and bank account and he has not rebutted the fact and also failed to proved that at the time of signing the cheque, he was suffering from mental disease. Thus, the learned trial Court and the learned Appellate Court, after appreciating the oral and documentary evidence, have rightly convicted the accused/applicant under Section 138 of N.I. Act. That apart, it is settled position of law that the scope of interference in exercise of revisional powers of the High Court is quite limited inasmuch as it has to only verify that whether there is any material irregularity and/or illegality coupled with arbitrariness or perverseness in the impugned order or not. In the present case, no such circumstance is there warranting interference by this Court. The criminal revision preferred by the applicant is bereft of any substance and, therefore, the same is liable to be set aside - revision dismissed.

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• 2023 (10) TMI 46
  Dishonour of cheque - acquittal of accused - insufficient funds - rebuttal of presumption under Section 139 of N.I. Act - HELD THAT:- In the case in hand, the learned Trial Court did not appreciate this fact that the respondent did not deny the signature over the cheques of his account and the appellant proved this fact that the cheques were given by the respondent which were dishonored at the bank and despite receiving notice, the respondent did not pay the cheque amount. The respondent did not rebut these facts and documents filed by the appellant and in the statement of the respondent/accused, he admitted his signature over cheques of his account, as such presumption is in favour of the appellant under Section 139 of the NI Act. Therefore, the finding recorded by the Trial Court is not in accordance with law. In the case of NI Act, the complainant has only to prove the fact that the cheque in question was issued by the accused in discharge of any debt or liability to the complainant and under Section 139 of the Act, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act for discharge, in whole or in part, or any debt or other liability - the finding recorded by the learned Trial Court is not in accordance with the law, as such the impugned judgment being not sustainable in law is liable to be set aside. The impugned judgment passed by the learned Trial Court dated 23.10.2018 is hereby set aside - the acquittal appeal is allowed.

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• 2023 (10) TMI 45
  Dishonour of Cheque - insufficient funds - Authorised signatory to sign the cheque - liability of drawer of cheque - HELD THAT:- This Court finds that the two cheques, which have come on record at Exhibit 22 and 23 goes to indicate that Rameshkumar N. Agraval has signed these cheques as Authorized Signatory of the Company namely Apar Steel and Casting Pvt. Ltd. Co. Thus, it has come on record that he is the authorized person in conduct of business of Apar Steel and Casting Pvt. Ltd. Co. Aforesaid cheques are dated 02.05.2015 and 15.04.2015, whereas the disputed cheque, which is placed on record vide Exhibit 8 is signed by Rameshkumar N. Agraval in his individual capacity is dated 25.03.2016. In case of MAINUDDIN ABDUL SATTAR SHAIKH VERSUS VIJAY D. SALVI [ 2015 (8) TMI 907 - SUPREME COURT] , the Hon ble Supreme Court inter alia held that from a bare reading of Section 138 of the NI Act the essential ingredient to attract the liability is that a person who is made liable should be drawer of the cheque and should have drawn the cheque on account maintained by him with the banker, for the payment of any amount of money to any person from out of that account, for discharge in whole or part of any debt or other liability. Thus, in the context of aforesaid provisions as well as the principle laid down, a person who draws a cheque on account maintained by him for paying to the payee is alone liable for the offence under Section 138 of the NI Act. In the facts of the case, prima facie, this Court in present appeal would like to examine the aforesaid aspect in context of the two cheques, which has been brought on record vide Exhibit 22 and 23. Hence, this application requires consideration - Leave to appeal is granted.

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