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TMI Tax Updates - e-Newsletter October 7, 2020 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Central Excise CST, VAT & Sales Tax Indian Laws Articles REGISTRATION OF TRADE UNION UNDER ‘THE INDUSTRIAL RELATIONS CODE, 2020’ News Recommendations of the 42nd GST Council Meeting Declaration of Results of National Startup Awards 2020 Auction for Sale (Re-Issue) of ‘5.09% GS 2022’, Auction for Sale (Re-Issue) of ‘5.77% GS 2030’, Auction for Sale (Re-issue) of ‘GoI Floating Rate Bond 2033’, and Auction for Sale (Re-issue) of ‘ 6.80% GS 2060’ Notifications Central Excise 02/2020 - dated 5-10-2020 - CE (NT) Central Board of Indirect Taxes and Customs, appoints common adjudicating authority DGFT 38/2015-2020 - dated 6-10-2020 - FTP Amendments in Foreign Trade Policy 2015-2020, related to import under DFIA scheme 37/2015-2020 - dated 6-10-2020 - FTP Addition of enabling provision related to the issue of scrips under Scheme for Rebate of State Levies (RoSL) as notified by the Ministry of Textiles 36/2015-2020 - dated 6-10-2020 - FTP Amendment in Export Policy of Personal Protection Equipments/Masks GST - States G.O.MS. No. 286 - dated 29-9-2020 - Andhra Pradesh SGST Further amendment in Notification of the Government of Andhra Pradesh, issued vide G.O.Ms.No.263, Revenue(C.T.II) Department, Dated 29.6.2017 CCST ref.No.CCW/GST/74/2015 - dated 25-8-2020 - Andhra Pradesh SGST APGST Act, 2017- Section 168- Due date for filing return in GSTR-3B Electronically through the common for the months April, 2020 to September, 2020 F.3 (45)/Fin (Rev-I)/2020-21/DS-IV/103 - dated 30-9-2020 - Delhi SGST Delhi Goods and Services Tax (Removal of Difficulties) Order, 2020 37/2020– State Tax - dated 30-9-2020 - Delhi SGST Seeks to give effect to the provisions of rule 87 (13) and FORM GST PMT-09 of the DGST Rules, 2017 33/2020– State Tax - dated 30-9-2020 - Delhi SGST Seeks to insert proviso in Notification No. 04/2018– State Tax, dated the 23rd February, 2018 32/2020– State Tax - dated 30-9-2020 - Delhi SGST Seeks in insert proviso in Notification No. 76/2018- State Tax, dated the 3rd September, 2019 19/2020-State Tax - dated 30-9-2020 - Delhi SGST Seeks to specify class of persons, other than individuals who shall undergo authentication, of Aadhaar number in order to be eligible for registration 06/2020 - dated 24-9-2020 - Telangana SGST Seeks to amend Notification No. 04/2020 – State Tax, Dt. 20-06-2020 G.O. Ms. No. 87 - dated 27-7-2020 - Telangana SGST Providing for waiver of late fee for FORM GSTR-1 G.O. Ms. No. 86 - dated 27-7-2020 - Telangana SGST Extension of due date for quarterly furnishing of FORM GSTR-1 for tax payers with aggregate turnover of up to 1.5 crores Indian Laws S.O. 3467 (E) - dated 5-10-2020 - Indian Law Central Government constitutes the Monetary Policy Committee of the Reserve Bank of India Circulars / Instructions / Orders SEBI SEBI/HO/IMD/DF3/CIR/P/2020/194 - dated 5-10-2020 Review of Dividend option(s) / Plan(s) in case of Mutual Fund Schemes SEBI/HO/IMD/DF3/CIR/P/2020/197 - dated 5-10-2020 Product Labeling in Mutual Fund schemes – Risk-o-meter Customs Instruction No. 18/2020 - dated 6-10-2020 Directorate General of Audit as a Nodal Directorate for Customs Post Clearance Audit Companies Law ROC/WB/Admn./2020/2717 - dated 8-9-2020 Extension of time for holding of Annual General Meeting (AGM) for the financial year ended on 31.03.2020 - Roc KOLKATA Highlights / Catch Notes GST Principles of Natural justice - late filing of return - intent to evade or not - it is the case of petitioner is that various aspects have not been dealt with or discussed by the Appellate Authority - The impugned Order in the instant case, which is the order passed by the Appellate Authority, seems to be more of an order passed by the Assessing Authority rather than an order passed by the Appellate Authority - Matter restored before the appellate authority - HC Visit to Get Source Income Tax Entitlement for TDS credit - venture capital undertakings - proportionate share of contributors - deduction of TDS by the deductors on behalf of the assessee or not? - CIT (A) has rightly pointed out that the deduction of TDS by the deductors was on behalf of the assessee. Since, the information furnished by the deductors to Income Tax authorities refers to the assessee only and not to the investors, the AO was required to give credit to the assessee. - AT Visit to Get Source Customs Vacation of Interim Order - levy of redemption fine and penalty - import of consignments of multifunctional printers/devices (MFD) - whether, the Tribunal exercised its discretion in accordance with law, in light of the violations complained by the Department? - Held Yes - HC Visit to Get Source Refund of Mica Cess - levy of said mica cess got repealed vide the Finance Act, 2016 - effective date of repealment - cess applicable under the repealed Act was very much effective till the date of receipt of the Hon’ble President’s assent. The same being the legal position, no contrary conclusion can be drawn on the basis of contents of Office Memorandum dated 27.07.2016 as relied by the appellant. - AT Visit to Get Source Levy of penalty - late filing to bill of entry - since the Customs Official did not clear the goods under exemption, the appellant had no option but to file bill of entry without claiming the exemption notification. - This entire episode is a sufficient cause for delay in filing the bill of entry, therefore, invoking the sub-regulation-(2) of regulation 4, no charges for late presentation of bill of entry should have been demanded from the appellant - AT Visit to Get Source Valuation of imported goods - Sunglasses of various models - There are no reasons recorded for rejection of transaction value before taking the exercise of revaluation and enhancement of transaction value - demand, enhancement of declared value, redemption fine and penalty set aside - AT Visit to Get Source Valuation of imported goods - On the one hand OIO says there are no imports of identical or similar goods, and the other hand re-determines the values of some goods on the basis of price of identical goods said to have been imported by the appellants themselves. Moreover, adjudicating authority observes that the appellant has not been able to justify the vast difference in value with any cogent reasons. - It is for the department to prove that valuation was wrong rather than the appellant proving it otherwise. - AT Visit to Get Source Corporate Law Oppression and mismanagement - removal of the Petitioner from the Directorship - the instant Company Petition is maintainable U/s.241 of the Companies Act, 2013, and the Petitioner No. 1 deemed to be a shareholder of Respondent No. 1 Company by holding 51% of Shares as held by the Respondent No. 7, and the Petitioner Nos.2 to 4 cannot removed from the position of Directors of R 1 Company, without consent of majority shareholders and it is contrary to law and against the principle of natural justice - Tri Visit to Get Source Indian Laws Priority of settlement of claims - payment to secured creditors over tax dues - scope and ambit of Section 26(E) of The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and Section 31-B of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - a secured creditor under the above said provisions get priority over the right, if any, claimed by the revenue. - HC Visit to Get Source IBC Initiation of CIRP - The Credit facilities had admittedly been revised and sanctioned from time to time and finally on 15th February, 2018 when various documents had been got executed from the Corporate Debtor, the date of default could not be 28th February, 2018 and the date of the corporate debtor's account could not be declared as NPA on 29th May, 2018 when bank had accepted the Resolution passed by the Board of Directors of the Corporate Debtor on 15th February, 2018. - the CP, being devoid of any merit, liable to be dismissed. - Tri Visit to Get Source Central Excise Eligibility to avail CENVAT Credit - Export of exempted goods - Provision has also been made in Rule 6(6)(v) to state that goods cleared for export under bond in terms of Central Excise Rules shall also not be denied input credit, which also clearly implies that assessee shall be allowed to avail credit on inputs used in exported manufactured goods. - AT Visit to Get Source Availing cenvat credit against pre-deposit - to be considered as 'deposit of Service Tax or not' - Since, payment made under 35F is not specifically finding any place in Rule 3 ibid, taking of such amount as Cenvat credit is contrary to such statutory provision and hence, denial of Cenvat benefit in the present case by the authorities below is in conformity with the statutory provisions - Demand confirmed - AT Visit to Get Source CENVAT Credit - input services or not - residential accommodation for the housing of their staff as well as their officers, working in the factory - nexus with output service - credit allowed - AT Visit to Get Source Case Laws: GST 2020 (10) TMI 196 Principles of Natural justice - late filing of return - intent to evade or not - it is the case of petitioner is that various aspects have not been dealt with or discussed by the Appellate Authority though in the impugned Order he has referred to these grounds which the Petitioner has raised in their Appeal - HELD THAT:- It is true that the Appellate Authority in the impugned Order has reproduced most of the grounds that the Petitioner has raised in their Appeal. However, when we look into the impugned Order, all what is reflected is that the Appellate Authority has literally considered only the factual aspects of the case, that is, the date on which the Petitioner was supposed to submit their return and the defaults on the part of the Petitioner and the factual details in respect of the statutory provisions as is required. In addition, the order also reflects the date on which the demand notices were issued to the Petitioner. However, none of these paragraphs have the Appellate Authority's dealing with the specific objections and grounds that the Petitioner has raised in their memo of Appeal. It is by now a well settled position of law that the Appellate Authority while deciding the Appeal is duty bound to consider the grounds of challenge. The Appellate Authority is also required to pass a reasoned and speaking order considering and dealing with those grounds. The impugned Order in the instant case, which is the order passed by the Appellate Authority, seems to be more of an order passed by the Assessing Authority rather than an order passed by the Appellate Authority - In the opinion of this Court, the Appeal has not been justifiably decided and therefore the same deserves to be remitted back to the Appellate Authority for passing of a reasoned and speaking order dealing with the grounds raised in the Appeal challenging the order passed by the Assessing Authority on 20.8.2018. The matter stands remitted back to Respondent No.3-Appellate Authority for deciding the Appeal afresh specifically dealing with the grounds raised in the memo of Appeal by the Petitioner- Company, which also find place in the impugned Order - Petition allowed by way of remand. 2020 (10) TMI 195 Review of Order - Permission to file Form 'TRAN-1' by the extended date - transitional credit - HELD THAT:- The issue decided in the case of M/S. AJAY HARDWARE INDUSTRIES PVT. LTD., VERSUS UNION OF INDIA AND OTHERS [ 2019 (12) TMI 414 - PUNJAB AND HARYANA HIGH COURT ] where it was held that Merely, because the implementation has been stayed in Review by the Hon'ble Gujarat High Court, in our considered opinion, is no ground to review our judgment, however, in our view, the appropriate remedy for the Revenue would be to approach the Hon'ble Supreme Court by filing an appeal. Review application dismissed. 2020 (10) TMI 194 Review of Order - Permission to file Form 'TRAN-1' by the extended date - transitional credit - HELD THAT:- The issue decided in the case of M/S. AJAY HARDWARE INDUSTRIES PVT. LTD., VERSUS UNION OF INDIA AND OTHERS [2019 (12) TMI 414 - PUNJAB AND HARYANA HIGH COURT] where it was held that Merely, because the implementation has been stayed in Review by the Hon'ble Gujarat High Court, in our considered opinion, is no ground to review our judgment, however, in our view, the appropriate remedy for the Revenue would be to approach the Hon'ble Supreme Court by filing an appeal. Review application dismissed. Income Tax 2020 (10) TMI 193 Recovery proceedings initiated by way attachment of bank account - HELD THAT:- The petitioner has rightly challenged the impugned orders of assessment by way of statutory appal before the CIT (Appeals) as early as in March, 2020. Inter alia, an application for stay as well as an application for rectification of mistakes u/s 154 are also stated to have been filed. All three are yet pending. Though several issues are raised in the grounds, the primary ground agitated is the violation of principles of natural justice. As the petitioner has availed statutory appellate remedy, we are not inclined to interfere in the order of assessment and all grounds and issues are left open to be agitated in appeal. Assessing Officer has, pending stay application before the Assessing Officer, not only attached the bank account but has also recovered some portion of the disputed demand. While the attachment of the bank account will continue, it is made clear that no further amount will be appropriated therefrom. 2020 (10) TMI 192 Bogus purchases - purchases were made from a Firm whose registration was cancelled - HELD THAT:- HELD THAT:- As decided in VIJAY KUMAR GOEL [ 2015 (11) TMI 1821 - ALLAHABAD HIGH COURT] sales made by the assessee had been accepted by the assessing officer. We are of the opinion that the once the sales have been accepted, it necessary falls that the assessee had also made purchases and it cannot, therefore, be held that bogus purchases were made. Consequently, the mere fact that purchases were made from a Firm whose registration was cancelled does not mean that bogus purchase were made by the assessee or that the Firm was a non-existing Firm. - Decided in favour of assessee. 2020 (10) TMI 191 Bogus purchases - additions were made on the findings of survey action conducted by the Income Tax Investigation Wing on Sh. Sanjay Chowdhary and his concerns - CIT-A deleted the addition - HELD THAT:- Once Revenue has accepted the transaction with Sh. Sanjay Chauhary to be genuine in group case of the assessee, the same cannot be agitated or doubted in the assessee s case and, therefore, it is our considered opinion that the learned CIT (A) has rightly deleted the addition by placing reliance on the assessment order in the case of group concern namely M/s Khanna Jewellers Pvt. Ltd. On going through the order of lower authorities, an important fact that emerges is that a similar allegation was also made in the case of the assessee, among other allegations, in the earlier assessment years when it had made purchase from M/s Nazar Impex (P) Ltd. (a concern said to have been controlled by Shri Sanjay Chaudhary) and the assessee had approached ITSC for settlement of its case and the ITSC has held the said transactions to be genuine. While upholding the order passed by the learned CIT (A), we rely on the judgment of the Hon ble Jurisdictional High Court in the case of CIT vs. M/s Surendra Buildtech Pvt. Ltd [ 2012 (5) TMI 629 - DELHI HIGH COURT ] wherein the Hon ble Court held that where the Revenue failed to rebut the findings recorded by the learned CIT (A) by bringing any contrary material on record, the finding recorded by the lower authority based on documentary evidences needs to be upheld. - Decided against revenue. 2020 (10) TMI 190 TP Adjustment - Interest on outstanding receivable from AE - HELD THAT:- When we examine audited profit and loss account it shows that taxpayer is a debt free entity. It is settled principle of law that when taxpayer is debt free company there is no question of receiving any interest on the receivables. Perusal of TP study of the taxpayer shows working capital adjustment has been granted to the taxpayer in the year under assessment as well as in the earlier years. When undisputedly impact of working capital of tested party vis- -vis its comparables has been factored in the profitability of the taxpayer while benchmarking international transaction qua IT and ITES segments have been held to be at arm s length, then there is no need to impute the interest on outstanding receivables from associated enterprises (AE). Coordinate bench of tribunal in case of M/s. Target Sourcing Services India Pvt. Ltd. [ 2020 (1) TMI 127 - ITAT DELHI] following the decision rendered in case of Pr. CIT vs. Kusum Health Care Pvt. Ltd. [ 2017 (4) TMI 1254 - DELHI HIGH COURT] held that re-characterization of outstanding receivables as loan by the TPO and thereby imputing the interest on such outstanding receivables is not sustainable in the eyes of law Addition made by TPO/DRP on account of interest on outstanding receivable from AE is not sustainable, hence, order to be deleted. - Decided in favour of assessee. Deduction u/s 10AA on account of interest income and miscellaneous income - addition on the ground that the said income cannot be set to have any direct nexus with the assessee business because the assessee is not into the business of finance and investment - HELD THAT:- As relying on own case [ 2018 (2) TMI 1084 - ITAT DELHI] we are of the considered view that the taxpayer is entitled for deduction u/s 10A on the interest earned on the fixed income and miscellaneous income as Section 10A is a complete code providing the mechanism for computing profit of the business eligible for deduction and as such taxpayer is held to be entitled for deduction u/s 10AA. Approach adopted by AO/DRP is legally and factually misconceived that order of Tribunal has not yet attained finality, more particularly when order passed by Tribunal has not been stayed by the higher forum. - Decided in favour of assessee. 2020 (10) TMI 189 Entitlement for TDS credit - venture capital undertakings - proportionate share of contributors - deduction of TDS by the deductors on behalf of the assessee or not? - HELD THAT:- In the present case, the credit for TDS appearing in Form No. 26AS of the assessee, the assessee is entitled for TDS credit - assessee had furnished the details of income accrued/distributed to each of the contributors as per Form 64, therefore it was the responsibility of each of the contributors to include the income in their tax returns as reported in Form-64 by the assessee and pay the tax on the same. Since, all the details of the contributors were available with the AO, he could have verified the same. CIT (A) has rightly pointed out that the deduction of TDS by the deductors was on behalf of the assessee. Since, the information furnished by the deductors to Income Tax authorities refers to the assessee only and not to the investors, the AO was required to give credit to the assessee. - Decided in favour of assessee. Exemption u/s 10(23FB) - investments have been made by assessee in VCUs engaged in real estate activities which is neither a service nor activity involved in production and manufacture of article or things and therefore, will not be eligible to be claimed as VCUs as per the VCF regulation - HELD THAT:- As decided in own case [ 2018 (8) TMI 1046 - ITAT MUMBAI] after the assessee came into existence and started investing fund in Venture Capital Undertakings, real estate sector was not in the negative list of Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996. That being the case, the reasoning of the learned Principal Commissioner that the assessee is not eligible for exemption under section 10(23FB) of the Act is unsustainable. In this regard, it needs to be observed, the learned Principal Commissioner has stated that the amendment to section 10(23FB) by Finance Act, 2012, is prospective and will apply to assessment year 2013 14. There cannot be any dispute with the aforesaid observations of the learned Principal Commissioner.- undisputed fact is, the assessee has claimed exemption under section 10(23FB) of the Act for assessment year 2013 14. Hence, the provisions applicable to such assessment year would govern all issues relating to assessee s claim of exemption. Applying the conditions of section 10(23FB) applicable to assessment year 2013 14, assessee s claim of exemption under section 10(23FB) of the Act is allowable.- Decided in favour of assessee, 2020 (10) TMI 188 Deduction u/s 10A - Rejection of assessee claim holding that the undertaking of the assessee has been formed by splitting up or reconstruction of a business already in existence - HELD THAT:- Whether the undertaking of the assessee has been formed by splitting up or reconstruction of existing business was examined by the coordinate bench in the assessee s own case [ 2010 (8) TMI 1014 - ITAT BANGALORE] allowed the deduction u/s 10A of the Act to the assessee. Since the Ld. CIT(A) has followed the decision rendered by the coordinate bench on this issue, which has since been upheld by Hon ble Karnataka High Court M/S. GXS TECHNOLOGY CENTRE PVT. LTD [ 2018 (11) TMI 1799 - KARNATAKA HIGH COURT] we do not find any infirmity in this order. Accordingly, the appeal of the revenue is dismissed. TP Adjustment - comparable selection - HELD THAT:- The assessee is primarily engaged in providing design and development of software services to its parent company. Thus companies functionally dissimilar and earning abnormally high profits need to be deselected from final list of comparable. Also companies showing RPT% in excess of 15% need to be excluded. 2020 (10) TMI 187 Assessment u/s 153A - Cash Receipts towards Construction - HELD THAT:- Assessee has stated that actual investment in this regard is as per the regular books of accounts maintained by the firm and he has not invested any cash as alleged in the notice and request was made that the assessee can obtain confirmation from the vendor and the assessee also requested for the opportunity for cross examination of the vendor but the AO jumped to the conclusion on this basis that the assessee has not produced any material to show that the admission made by the assessee was incorrect in any way other than denying the payments stating that he was under stress. In our considered opinion, even the so called admission as noted by the AO is this much only that cash payment was indeed made. Even if we accept this admission as sacrosanct, the said cash payment can be added in the hands of the firm and not in the hands of the partners without bringing cogent material on record to show that such cash payment was made by the partners out of their own funds by giving a break up of how much is from own source of which partner. Addition might have been made in the hands of the firm and not in the hands of the partners and we delete the addition made by the AO in the hands of the partners. We could have directed the AO to make addition in the hands of the firm but by now, it has become time barred because more than 8 years have elapsed after the end of the relevant assessment year 2011 12. This addition is deleted and Issue No. 1 is decided in favour of the assessee. Investment in Om Sai Riddhi Siddhi Developers - HELD THAT:- Adverse inference drawn by the AO as regards payment of on money for purchase of various properties in question is not sustainable and we delete the same in the hands of both the partners i.e. Mr. S. D. Kotian and Mr. M N Rajendra Kumar and also in the hands of the firm M/s Om Riddhi Siddhi Developers. Issue No. 2 in the appeals of the assessee as well as issue No. 2 in the appeals of the revenue are decided in favour of the assessee. Investment in M/s K. D. Developers - HELD THAT:- Addition might have been made in the hands of the firm and not in the hands of the partners and we delete the addition made by the AO in the hands of the partners Mr. MNR. We could have directed to make addition in the hands of the firm but by now, it has become time barred because more than 7 8 years have elapsed after the end of the relevant assessment year 2011 12 and 2012 13. This addition is deleted. Undisclosed payment to Mr. Jayanti Lal Jain (JLJ) - HELD THAT:- The assessee requested the AO to provide an opportunity to the assessee to cross examine JLJ before the AO to establish the truth. After reproducing the reply, the AO brushed aside it by stating that the assessee has not produced any evidence in this regard and in the absence of any evidence to the contrary of the allegation of the AO, this amount is brought to tax as unexplained expenditure. In our considered opinion, this stand of the AO is like asking for an impossible because the assessee s stand is this that he had not made any cash payment to JLJ and there cannot be an evidence for negative and the stand of the AO to require the assessee to bring evidence in support of negative is nothing but asking the assessee to do an impossible task. - Decided in favour of assessee. Cash collected in developed projects - HELD THAT:- Three projects are owned and developed by two companies as per various MOUs and therefore, even if some on money in cash was received in respect of sale of these projects, income will be of these two companies in their agreed share but by no stretch of imagination, it can be considered as income of an individual i.e. Mr. MNR. Hence the addition made in the hands of MR. MNR is deleted for this reason alone and we do not discuss and examine other various arguments of both sides. Cash receipt on sale of shares in the company M/s MA Smart Builders Developers, Mangaluru in A. Y. 2017 18 - HELD THAT:- When the property sold is owned by the firm, the income on account of receipt of on money, if any, will be of that firm only and not of the partner of the firm. The second reason is this that the addition was made by the AO on the basis of the statement of the supervisor and material impounded during the course of survey conducted at the head office of SCDCC Bank on 27.12.2016 without bringing on record any material for corroboration in support of entries in loose sheets or digital evidence. Hence, the receipt of on money itself is not established beyond doubt. The value as per agreement is said to be ₹ 354,97,500/- and alleged receipt is only ₹ 200 Lacs i.e. ₹ 95 Lacs by cheque and ₹ 105 lacs by cash and hence, total alleged receipt is much less that value as per the agreement. Quantum of such receipts - AO has worked out the figures by multiplying the noted figures by 100 and 1000 - HELD THAT:- AO has been directed by CIT (A) to consider the cash receipt entries and unaccounted cheque entries if any as it is without multiplying it by 100 or 1000 and this finding and direction of CIT (A) has no infirmity because for such multiplication by 100 or 1000, no valid basis is given by the AO in the assessment order. Hence, we approve this finding of CIT (A) that unaccounted receipt is unaccounted turnover in respect of these projects and it should be computed by the AO by considering the entries in the seized materials about cash receipts by taking the noted figures as it is without any multiplication and if any entry about receipt of cheque is found as unaccounted then the amount of such cheques should also be added in unaccounted turnover without any multiplication. Quantum of to be brought to tax in respect of such unaccounted turnover - HELD THAT:- CIT (A) has held that 8% of such unaccounted turnover should be considered as income and from that, the income declared in the returns on account of these projects in respective year should be reduced and only the balance should be brought to tax. On the second aspect about reducing the income declared in the returns on account of these projects in respective year from the income to be computed in respect of unaccounted turnover, we find no infirmity in the order of CIT (A) and we confirm the same. Percentage of unaccounted turnover to be considered as income - AO has added the whole amount of alleged cash receipts but the CIT (A) held that only estimated income out of such alleged cash receipts can be added - HELD THAT:- In our considered opinion, the alleged cash receipts is unaccounted turnover only and 100% of turnover cannot be said to be income even in respect of unaccounted turnover and hence, we hold that there is no merit in this issue no. 5 raised by the revenue in its four appeals filed in the case of Mr. Mohammad Ameer. Cash investment in the lands purchased for projects executed by OSSRD - HELD THAT:- For whether extra cash receipt was there or not, we find that for assessment order for A. Y. 2014 15 and A. Y. 2016 - 17, the AO has noted the entries found in seized material and these entries are of cash and cheques both with dates. This is not the case of the assessee that these cheques are not received by him. If entries in the seized material about cheque receipts are correct then cash receipt noted on same documents should also be considered as correct. Hence, we hold that in the facts of the present case, extra cash was in fact received by the assessee for all these four years as alleged by the AO in all these four years. CIT (A) has directed the AO to compute the income @ 8% of unaccounted turnover - Although no basis is indicated by CIT (A) for adopting 8% rate but it appears to us that he has been guided by the provisions of section 44AD of I T Act but the provisions of this section are applicable only in those cases, where the annual turnover is below a specified amount. In the present case, turnover is much higher and therefore, the rate specified in this section cannot be adopted. Adopting 3% profit rate will meet the ends of justice in the facts of the present case and therefore, we direct the AO to adopt 3% rate to compute net profit on unaccounted turnover to be worked out by him in respect of these projects. Addition based on the statement recorded during the search - HELD THAT:- no merit in making addition only based on the statement recorded during the search and loose sheets found when the statement is retracted and details in the paper are not deciphered. These findings of learned CIT (A) could not be controverted by learned DR of the revenue by bringing any additional evidence on record in respect of identity and address of the persons named in loose paper and by deciphering the loose paper. Hence the addition made by the AO is based on the statement alone which is not sustainable as per settled position of law by now. Addition on the basis of retraction of the assessee - HELD THAT:- Addition made is purely based on the statement made by the assessee without any corroborative evidence by the AO. Before us also, learned DR could not produce any corroborative evidence which was available with the AO to make these additions. This is a settled position of law that any addition made only on the basis of statement of the assessee in course of search without bringing on record any adverse cogent material to corroborate such statement, the addition so made is not sustainable and therefore, we find no infirmity in the order of CIT (A) on these three issues and therefore, decline to interfere in this order of CIT (A) on these three issues. Accordingly, Issue of the revenue is also decided in favour of the assessee. 2020 (10) TMI 186 Assessment u/s 153A - unexplained gifts - Whether no incriminating material found? - HELD THAT:- DR could not controvert the above argument made by the leaned Counsel for the Assessee nor could produce or made a statement that any incriminating material is available in the record of the AO. Once there is no incriminating material, the issue is squarely covered in favour of assessee and against Revenue by the decision in the case of Continental Warehousing Corporation [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] . Resultantly, this issue of assessee s appeal is allowed. No addition of bogus gift. - Decided in favour of assessee. Customs 2020 (10) TMI 185 Release of detenue - Smuggling - electronic goods - whether delay in passing the detention order would vitiate the detention order? - HELD THAT:- There is nothing on record to indicate the steps taken or the efforts made by the executing authority to execute the order of detention between the period from March 3, 2020 to June 8, 2020. The executing authority has only stated that they visited the address mentioned in the detention order on February 25, 2020 and March 3, 2020 when they found the premises have been demolished for construction of SRA project. Further, they stated that they visited the mobile shop of the petitioner s brother on these two dates viz. February 25, 2020 and March 3, 2020 when they found the shop to be closed. Except for this no material is produced on the basis of which it can be said that the police authorities made reasonable efforts to locate the petitioner and apprehend him and yet they were not successful in finding him out - In the facts of the present case, it is not possible for us to accept the bare and vague contention of the executing authority that the detenu had absconded in the absence of bringing materials on record about efforts made to trace out the detenu during the period from March 3, 2020 to May 28, 2020. For the period from March 3, 2020 upto May 28, 2020, we find no serious efforts were made by the police authorities to apprehend the detenu and no materials are placed on record to indicate the steps taken. It is not stated where they looked for him and what inquiries were made by the police authorities to find his whereabouts. No materials are produced on the basis of which it can be said that the police authorities had made reasonable efforts to locate the petitioner and apprehend him and yet they were not successful in finding him out. Thus, this delay in execution of the detention order remains unexplained. The unreasonable delay in executing the order creates a serious doubt regarding the genuineness of the Detaining Authority as regards the immediate necessity of detaining the petitioner in order to prevent him from carrying on the prejudicial activity referred to in the grounds of detention. Hence, the inevitable conclusion would be that the Respondents were not serious in detaining the Petitioner under the preventive law of COFEPOSA. The detention order is set aside - petition allowed - decided in favor of petitioner. 2020 (10) TMI 184 Vacation of Interim Order - levy of redemption fine and penalty - import of consignments of multifunctional printers/devices ( MFD) - whether, the Tribunal exercised its discretion in accordance with law, in light of the violations complained by the Department? - HELD THAT:- We have already referred to the contentions of the learned counsel for appellant Department in detail. He drew our attention to two principal violations in the matter of import of the goods in question. The first being no compulsory registration under the Government Order dated 07/09/2012 and having regard to Sl.Nos.7 and 8 of the Schedule thereto, made under the provisions of BIS Act, 1986. In that regard, learned counsel for appellant also drew our attention to Notification of the Ministry of Communications and Information, Technical Department of Information Technology dated 07/11/2014, issued under the BIS Act, with reference to Sl.No.26, which deals with copying machines/duplicators. The original schedule refers to only printers, plotters and scanners. On a combined reading of the same, we find that the goods in question namely, MFDs do not fall in either of these two Schedules i.e., Schedule as per Notification dated 07/11/2014 or in the Schedule as originally appended to the Order dated 07/09/2012. In the circumstances, on the facts of this case, we hold that it was unnecessary for the respondents herein to register under the provisions of the Electronics and Information Technology Goods [Requirements for Compulsory Registration] Order, 2012. Non-compliance with Rule 13(2)(a), (b) and (c) of the H OW Rules, 2016 - HELD THAT:- There is force in the contentions of learned counsel for respondents, inasmuch as under the Order for compulsory registration of 2012, MFDs do not find a place and secondly, under the H OW Rules, submission of Form No.6 under Sl.No.4(j) of the Schedule VIII of H OW Rules, 2016 does not arise - Admittedly, Form No.7 deals with an application form for one time authorization of traders for Part-D of Schedule III, which deals with other wastes , under H OW Rules - Admittedly, the MFDs in question are category of other wastes . Noticing the fact that there was seizure of the goods in question and after the order of the Original Authority, the goods were held liable for confiscation and being aggrieved that respondents herein had challenged the order of the Authorities before the Tribunal. In the instant case, the Tribunal has applied the dictum of the Hon ble Supreme Court in COMMISSIONER OF CUSTOMS VERSUS M/S. ATUL AUTOMATIONS PVT. LTD., AND PARAG DOMESTIC APPLIANCES [ 2019 (1) TMI 1324 - SUPREME COURT] and has held that there was a substantial compliance in all respects and there was only a procedural aberration and hence, it granted relief in those cases which has been followed by the Tribunal in the instant cases also. While doing so, the Tribunal has also noticed Section 11(8) and (9) of the Foreign Trade Act, 1992 read with Rule 17(2) of the Foreign Trade (Regulation) Rules, 1993 also under Section 3(3) of the Foreign Trade Act. Hence, we find that the dictum of the Hon ble Supreme Court in Atul Automations would squarely apply in the instant cases also, which has been followed by the Tribunal. Therefore, the substantial questions of law raised by the Department in these cases with regard to the applicability of the judgment of the Apex Court in Atul Automations, would not arise. Appeal dismissed. 2020 (10) TMI 183 Refund of Mica Cess - levy of said mica cess got repealed vide the Finance Act, 2016 - effective date of repealment - It is the contention of the appellant that no mica cess is leviable on export of mica products w.e.f. 01.04.2016 whereas, the contention of the Department that the said levy got omitted only with effect from 14.05.2016 which is the date of enactment of Finance Act, 2016. Whether the date of repeal of mica cess would be 14.5.2016 i.e. the date of enactment of the Finance Act, 2016 (when the Finance Bill received the assent of the Hon ble President) or 01.04.2016 as mentioned in an office Memorandum dated 27.7.2016 issued by the Department of Economic Affairs, Budget Division, under Ministry of Finance, Govt. of India, which has been relied upon by the appellant while pursuing the refund application? HELD THAT:- On perusal of the amendments introduced vide Section 239 of the Finance Act, 2016, it clearly appears that the same would be applicable with the date of enactment i.e. 14.05.2016 inasmuch as no stipulation has been made to provide that the same would be applicable w.e.f. 01.04.2016. By virtue of said Section 239, the enactments mentioned in the Fifteenth Schedule have been repealed (incl. the repeal of mica cess levy). This is more so in view of the specific provision made in Section 241 of the Finance Act, 2016, reproduced above, which clearly provides that the duties levied under the respective enactments (which got repealed vide Section 239) immediately preceding the date on which the Finance Bill, 2016 receives the assent of the President, if not collected shall be collected and paid into the Reserve Bank of India for being credited to the Consolidated Fund of India - This clearly affirms the position that cess applicable under the repealed Act was very much effective till the date of receipt of the Hon ble President s assent. The same being the legal position, no contrary conclusion can be drawn on the basis of contents of Office Memorandum dated 27.07.2016 as relied by the appellant. The observation made by the Apex Court in BK. INDUSTRIES VERSUS UNION OF INDIA [ 1993 (4) TMI 66 - SUPREME COURT] is squarely applicable to the facts of the instant case, inasmuch as the Apex Court clearly held that Section 13 in the said case (Section 241 in the instant case) expressly provided that the cess due before the date of said repeal, but not collected, shall be collected according to law as if the Cess Act is not repealed. This provision amounts to a positive affirmation of the intention of the Parliament to keep the said imposition alive and effective till the date of the repeal of the Cess Act - Mere reliance by the learned Advocate on the Official Memorandum dated 27.7.2016 would not come to their rescue inasmuch the same cannot override the legal position emanating from the provisions contained in the statutory enactment. Appeal dismissed - decided against appellant. 2020 (10) TMI 182 Condonation of delay in filing appeal - power of Commissioner (Appeals) to condone delay - HELD THAT:- The Act. The Commissioner (Appeals) has noted that an Appeal under section 128 of the Act is required to be filed within a period of 60 days from the date of communication of the order but it can be presented within a further period of 30 days if the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from presenting the Appeal within the aforesaid period. The Commissioner (Appeals) noted that the present Appeal was presented even after the extended period of 30 days. A Division Bench of this Tribunal in Diamond Construction vs. Commissioner of Customs, Excise and Service Tax, Jabalpur, [ 2019 (2) TMI 1822 - CESTAT NEW DELHI ] has held that the Commissioner (Appeals) cannot condone any delay if the Appeal is presented beyond 30 days after the expiry of 60 days. The Commissioner (Appeals) committed no illegality in dismissing the Appeal - appeal rightly dismissed. 2020 (10) TMI 181 Levy of penalty - late filing to bill of entry - import of Stearic Acid which was partially exempted as per Notification No.12/12-Customs dated 17.03.2012 (Sr. No. 230A), till the amendment of tariff from 30.06.2017 - HELD THAT:- Though the importer is required to present the bill of entry before the end of the next day following the day (excluding holidays) on which the Aircraft or Vessel or Vehicle carrying the goods arrives at a Customs station at which such goods are to be cleared for home consumption or warehousing. However, as per sub regulation (2), it is provided that the penalty for late presentation of bill of entry shall be liable to be paid, if there was no sufficient cause for delay in filing the bill of entry. In the present case entire event from time of import till the filing of bill of entry is known to the Custom Department that the appellant intended to claim the exemption notification but due to apparent error in the notification, the appellant was not in a position to file the bill of entry on EDI System - Since, the appellant had strong belief that they are entitled for exemption Notification, they followed up the matter with the Customs, however, the Customs Official knowingly that the goods is exempted insisted the appellant to file bill of entry and pay the entire custom duty and the later they can claim the refund. Once it is admitted that the goods are exempted no any business person would pay the custom duty and clear the goods and this is the reason the appellant were reluctant to file the bill of entry. However, since the Customs Official did not clear the goods under exemption, the appellant had no option but to file bill of entry without claiming the exemption notification. This entire episode is a sufficient cause for delay in filing the bill of entry, therefore, invoking the sub-regulation-(2) of regulation 4, no charges for late presentation of bill of entry should have been demanded from the appellant - the appellant has made out a fit case for non-imposition of charges for late presentation of bill of entry. Accordingly, the charges paid for late filing of bill of entry is refundable to the appellant. Appeal allowed - decided in favor of appellant. 2020 (10) TMI 180 Valuation of imported goods - Sunglasses of various models - rejection of transaction value - confiscation of goods - imposition of penalty - HELD THAT:- Section 14 of the Customs Act provides that for the purpose of valuation the value of imported goods shall be the transaction value of such goods, i.e. to say, the price actually paid or payable for the goods when sold for export to India for delivery at the time of place of importation, or as the case may be for export from India, where the buyer and seller of the goods are not related and price is the sole consideration for the sale, subject to such other conditions as may be specified in the rules made in this behalf. It is further provided that rules made in this behalf may provide for the manner and acceptance or rejection of value declared by the importer or exporter, where the proper officer has reason to doubt the truth or accuracy of such value and determine value for the purposes of this Section. There are no reasons recorded for rejection of transaction value before taking the exercise of revaluation and enhancement of transaction value. Appeal allowed - decided in favor of appellant. 2020 (10) TMI 179 Principles of Natural Justice - Valuation of imported goods - re-determination of value sought to be done by the Adjudicating Authority - Chinese origin goods or Vietnamese and Swiss origin goods - Rejection of declared goods - HELD THAT:- It appears that the Adjudicating Authority has alleged the mis-declaration on the basis of the only fact that a small percentage of goods are not adhering to the country of origin. The appellants claim that they have contracted with the supplies and the goods came from China even though some goods had having marking of the countries. It is not forthcoming in the order as to how the importer had knowledge that some goods were of origin other than mentioned in COO. Moreover, it is not discussed as to how 80% goods whose COO was correctly declared were liable to calculation and re-determination of value. Similarly, the plea that the impugned goods are not liable to MRP was not discussed. Moreover, the Appellate Commissioner has based his order on the basis of report/comments dated 18.11.2011 obtained from Additional Commissioner. It is not clear whether copy of such report was given to the appellant and his submissions were obtained. The same are not part of findings of OIO. We also find that the OIO has some contradictions. On the one hand OIO says there are no imports of identical or similar goods, and the other hand re-determines the values of some goods on the basis of price of identical goods said to have been imported by the appellants themselves. Moreover, adjudicating authority observes that the appellant has not been able to justify the vast difference in value with any cogent reasons. It is for the department to prove that valuation was wrong rather than the appellant proving it otherwise. Under the circumstances, the issue needs to go back to the Original Authority to appreciate the facts afresh, considering the submissions of the appellant and to pass a reasoned order as per law - Appeal allowed by way of remand. Corporate Laws 2020 (10) TMI 178 Restoration of name of company in the Register of Companies - no return of income has been filed - issuance of SCN - HELD THAT:- In the Impugned Order it is not mentioned that before passing the Impugned Order, Learned Tribunal has served the notice on the Company or its Directors. Rule, 37 of the National Company Law Tribunal Rules, 2016 also provides that the Tribunal shall issue notice to the Respondent to show cause against the Application or Petition on the date of hearing to be specified in the notice. Such notice shall be accompanied by a copy of the Application with supporting documents. The Tribunal has not issued such notice to the Appellant - In such a situation, without giving any opportunity of hearing Learned Tribunal has passed the Impugned Order. Thus, the Impugned order hereby set aside and the matter is remitted back to the Tribunal with the direction that after hearing the parties decided the Appeal under Section 252 of the Act, as per law without influence by its earlier Order - Appeal allowed by way of remand. 2020 (10) TMI 177 Restoration of name of the Company in the Register of Companies, maintained by the Registrar of Companies - non-filing of financial statement and annual returns from the year 2013 onwards - Section 252(1) of the Companies Act, 2013 - HELD THAT:- Having satisfied with the reasons as mentioned in the appeal, the Tribunal is of the opinion that it would be just and proper to order restoration of the name of the Company in the Register of Companies. The Company is directed to file all statutory document(s) along with prescribed fees/additional fee/fine as decided by Registrar of Companies within 30 days from the date on which its name is restored on the Register of Companies by the Registrar of Companies. The appellant is directed to submit a declaration from the Directors regarding the deposits made during the demonetization period with the Registrar of Companies. Application disposed off. 2020 (10) TMI 176 Restoration of name of the Company in the Register of Companies, maintained by the Registrar of Companies - non-filing of audited financials and annual returns for the financial years 2014-2015, 2015-2016, 2016-2017, 2017-2018, 2018-2019 - Section 252(3) of the Companies Act, 2013 - HELD THAT:- The Tribunal is of the opinion that it would be just and proper to order restoration of the name of the Company in the Register of Companies. The Company is directed to file all the statutory document(s) along with prescribed fees/additional fee/fine as decided by Registrar of Companies within 30 days from the date on which its name is restored on the Register of Companies by the Registrar of Companies. The appellant is directed to submit a declaration from the Directors regarding the deposits made during the demonetization period with the Registrar of Companies. Appeal disposed off. 2020 (10) TMI 175 Sanction of Scheme of Amalgamation - section 230 and 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 - HELD THAT:- Further perusal of the scheme shows that the accounting treatment is in conformity with the established accounting standards. In short, there is no apprehension that any of the creditors would lose or be prejudiced if the proposed scheme is sanctioned. The said Scheme of Amalgamation will not cast any additional burden on the stakeholders and also will not prejudicially affect the interests of any class of the creditors in any manner. The Appointed date of the said Scheme is 01st April, 2018 - The scheme does not require any modification as it appears to be fair and reasonable, not contrary to public policy and also not violative of any provisions of law. All the statutory compliances have been made under section 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Scheme of Amalgamation between the Transferor Company and the Transferee Company was duly approved by the shareholders of respective companies. The Company Petitions are allowed and the scheme of Amalgamation annexed with the petition is hereby sanctioned which shall be binding on all the members, creditors and shareholders - Scheme is approved. 2020 (10) TMI 174 Oppression and mismanagement - rectification of share register of Respondent - shareholder of Respondent No. 1 Company or not - removal of the Petitioner from the Directorship of the Respondent No. 1 Company - maintainability of petition - section 241 of the Companies Act, 2013. HELD THAT:- All the Agreements i.e., Facilitation Agreement and Pledge Agreement dated 06.10.2016 and letter 07.10.2016, have been duly executed by the authorized signatory of the Respondent Nos. 1 7, namely Mr. Vikram Prabhakar (Respondent No. 2). However, the Respondent No. 2 contemptuously denying everything including his signature by alleging fraud, forgery, misrepresentation for the first time in his Reply, without raising those issues before filing the instant Company Petition. It is for the Respondents to take appropriate civil/criminal action if the Petitioners are resorting to such type of frauds. Instead of doing so, they are making baseless allegations in the instant Petition - the facts and circumstances of the case shows even though the Petitioner has rendered substantial services to the Respondents and got executed Facilitation Agreement in its favour, the Petitioner could not get any benefit out of the transaction and on the top of it, the Respondents wanted to remove even nominee Directors of Petitioner No. 1 on un-tenable grounds, as detailed supra, in order to deprive them as not to involve in the affairs of the Respondent No. 1 Company. They have succeeded in their attempt to remove them while the Company Petition is pending. The main contentions/allegations raised on behalf of the Respondents, such fraud, forgery, manipulation of records etc., are not at all tenable and not substantiated by the Respondents. It is relevant to point out here, the affairs of R 1 Company is under the control of other Respondents but not under the control of Petitioners, and even the nominee Directors of Petitioner No. 1 were thrown illegally, moreover by examining the signature of Mr. Vikram Prabhakar(MD/Respondent No. 2), appearing on various documents including Facilitation Agreement, Pledge Agreement, with naked eye, there is no doubt in our mind that those signatures are not all forged and those documents binds on the Respondents - In terms of said Facilitation and Pledge Agreements and as per said Articles of Association, all conditions required to be fulfilled for transfer of shares stand fulfilled, at least in respect of 51 % of shares held by Respondent No. 7 at the time of Pledge Agreement and the second Respondent cannot deny it and the Respondent No. 1 Company is bound to register the name of Petitioner No. 1 in the Register of Members of R 1 Company. Even subsequent consideration for transfer of shares was paid by the First Petitioner to the Respondent. The contention of the Respondent Nos.2 and 7 that the amount paid by the Petitioner No. 1 towards consideration of the share price value of the Transfer of Shares is not towards consideration for transfer of shares is not at all tenable and same is liable to be rejected. It is bounden duty of the Respondent No. 1 Company to register the names of the Petitioner No. 1 in the Register of Members. Moreover, it is not the case of the Petitioner that the Transfer of Shares in question was rejected by the Company, so as to give cause of action to the Petitioner to file any Petition/Application, U/s.58 or 59 of the Companies Act, 2013. Therefore, the Petitioner No. 1 deemed to be shareholder, holding 51% of Shares of Respondent No. 1 Company. Therefore, the Petitioner No. 1 can maintain the main Company Petition filed U/s.241 of the Companies Act, 2013. Similarly, by virtue of Facilitation Agreement, Petitioner Nos.2 to 4 are entitled to be continued as nominee Directors and they cannot be removed without participation of Petitioner No. 1 in the concerned meetings. Therefore, removal of the Petitioners No. 2 to 4 from the Directorship of Respondent No. 1 Company is illegally, contrary to law, and against the principle of nature justice. Transfer of shares - HELD THAT:- There are lapses on the part of first Petitioner to take appropriate action at appropriate time. So that the Respondents able to take several actions including transfer of shares to other Persons. In respect of remaining shares, there is no pledge Agreement by other shareholders unlike Respondent No. 7. Therefore, the first Petitioner has not satisfied the Tribunal for transfer of entire shareholding of R 1 Company by producing the relevant documents for Transfer of Shares, in terms of the Article 20, 21 22 and the extant provisions of the Companies Act. Thus, the instant Company Petition is maintainable U/s.241 of the Companies Act, 2013, and the Petitioner No. 1 deemed to be a shareholder of Respondent No. 1 Company by holding 51% of Shares as held by the Respondent No. 7, and the Petitioner Nos.2 to 4 cannot removed from the position of Directors of R 1 Company, without consent of majority shareholders and it is contrary to law and against the principle of natural justice - petition disposed off. 2020 (10) TMI 173 Sanction of Composite Scheme of Arrangement and Amalgamation - sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangement and Amalgamation) Rules, 2016 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, the Company Petition is made absolute in terms of the prayers thereof. The Transferor-Company be dissolved without the process of winding up - scheme is sanctioned. 2020 (10) TMI 172 Sanction of Amalgamation Scheme - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- In compliance of sub-section (5) of Section 230 of the Act and Rule 8 of the Companies (CAA) Rules, the Applicant Companies shall send a Notice of meeting in Form No. CAA 3 with a copy of the Scheme of Arrangement, the Explanatory Statement and the disclosures mentioned under Rule 6 to (1) Central Government through the Regional Director, North Western Region, (2) the Registrar of Companies, Gujarat; and (3) the Income Tax Authorities, (4) Reserve Bank of India;(5) BSE Limited (6) National Stock Exchange Limited as well as (7) Securities and Exchange Board of India; stating that representations, if any, to be made by them shall be made within a period of 30 (Thirty) days from the date of receipt of such notice, failing which it will be deemed that they have no objection to make on the proposed Scheme of Arrangement. The said notices shall be sent forthwith after the notice for the meetings are sent to the concerned Equity Shareholders, Secured and unsecured creditors of the Applicant Transferor Company, either by Registered Post or by Speed Post or by Courier or by Hand Delivery at the offices of the authorities as required by sub-rule (2) of Rule 8 of the Companies (CAA) Rules, 2016. The aforesaid authorities, who desire to make any representation under sub-section (5) of Section 230 shall send the same to this Tribunal with a copy of the same to be supplied to the Applicant Company. Application disposed off. 2020 (10) TMI 171 Approval of the Composite Scheme of Amalgamation - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Prior approval from Ministry of Civil Aviation is required to be obtained before sanction of the Scheme by this Tribunal. In the present case, the petitioner company has not placed on record the requisite approval, if any, obtained from the Ministry of Civil Aviation - taking in consideration of the said factum, the approval of the Scheme by this Tribunal is conditional upon the requisite sanction and approval from the Ministry of Civil Aviation in accordance with the prescribed guidelines. In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled (other than the one which is mentioned in para 15), this Tribunal, subject to para 16, sanctions the Scheme of Amalgamation, which are annexed as Annexure A9 with the Company Petition as well as the prayer made therein - the scheme is approved. Insolvency & Bankruptcy 2020 (10) TMI 197 Restraint Order - avoidance application pending on the ground around ₹ 118Ccrore was given as loan and reflected in loans and advances column in the financial year 2014-15 and 2015-16 - HELD THAT:- It appears the answering respondents are not present before this Bench, may be because date of hearing is not Imown to them, the applicant is therefore directed to intimate next date of hearing to the Respondents enabling them to appear and argue this application by filing their reply if any two days before next date of hearing. List this application along with Avoidance Application on 09.10.2020. 2020 (10) TMI 170 Liquidation of Company - section 33(2) of the Insolvency and Bankruptcy Code - HELD THAT:- It is resolved that: COC with 77.92% (100% of Members Meeting attended) resolved not to reissue form G further, and not to go for fresh EOI and recommended to file application for Liquidation of company under Sec 33 (2) of IBC 2016 and RP to continue as the liquidator and to file the application for liquidation of the company. The Corporate Debtor M/s. Sargam Builders Pvt. Ltd. is hereby put under liquidation with immediate effect under Section 33(2) of IBC, 2016 - As the RP has enclosed his consent to continue as the Liquidator and copy of Authorization for Assignment for and on behalf of Indian Institute of Insolvency Professionals of ICAI, along with this application, the Resolution Professional herein, Mr. Jasin Jose, is hereby appointed as Liquidator of the Corporate Debtor under Section 34 of IBC, 2016. Application disposed off. 2020 (10) TMI 169 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The reply dated 19.01.2018 sent by the corporate debtor, brings on record a dispute raised and existed between the parties prior to the issuance of the section 8 demand notice. There is thus force in the contention of the corporate debtor and it can be concluded that a dispute does truly exist between the parties in terms of section 5(6)(b) in the present case, which may or may not ultimately succeed but requires trial/investigation. Though this is not the forum to examine and adjudicate as to which portion of the claims or counter claims are admissible. Tribunal will not examine the merits of the dispute other than to see if there is in fact exist a 'real dispute' having some substance. There is 'Pre-existence dispute' which was raised by the corporate debtor prior to the notice served under section 8 of I B Code. It is a fit case to reject the application under section 9 of the I B Code - Application dismissed. 2020 (10) TMI 168 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- There is no doubt that there is an admitted debt and a default as per the agreed terms between the two parties. On the other hand the Petitioner admits that the present loan was renewed as the Respondent had been repaying the earlier debts. Thus, there is a running account between the two and the Respondent has given an undertaking that it has made arrangements for paying the debt and only requires some more time to settle the debt - It has already settled debts worth ₹ 36,81,38,388/- to several creditors who have approached this Tribunal. Since the Respondent is in the business of generating and selling power, its liabilities are paid out of its periodical receipts. The impact of the present financial distress caused by the global novel corona virus pandemic necessitating a nationwide lockdown, cannot be ignored. Major decisions have been taken to protect Industry from its effects, to inject economic stimulus and to revive the economy. More specifically, on 24.03.2020 the Legislature increased the minimum threshold of default from ₹ 1 Lakh to ₹ 1 Crore so that the Code is not used merely for recovery of debt. Modifications and suspension of various provisions of the Code have been initiated so that companies facing financial stress due to the pandemic can be supported rather than be pushed into CIRP, else in the present scenario they may end up in liquidation and lose value further, which is the not objective of the IBC or other enactments. Steps have also been taken to ensure availability of more funds in the hands of businesses so that they can cope with the present economic scenario and restart their business The Respondent's plea that it be given some more time to repay the debt needs to be accepted, and the Respondent/Corporate Debtor be directed to settle the debt at the earliest in consultation with the Petitioner/Financial Creditor - Petition is disposed of by directing the Respondent / Corporate Debtor to repay the balance debt or the amount as settled with the Petitioner within a period of 60 days, failing which the Petitioner would be at liberty to file a fresh petition for admission. 2020 (10) TMI 167 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - financial debt - existence of debt and dispute or not - time limitation - HELD THAT:- On the facts of the instant case, from a perusal of the copy of Certificate of Registration of the Financial Creditor NBFC, copy of Loan Agreement dated 20.03.2015, Bank statement of IIFL along with the certificate under Bankers' Book Evidence Act, 1891 it is more than clear that the Financial Creditor has provided financial assistance to the Corporate Debtor and there exists a financial debt within the meaning of Section 5(8) of the Code of 2016, having been disbursed against the consideration for the time value of money, as per the terms of the Loan agreement, i.e. money borrowed against the payment of interest. On a perusal of the Demand Promissory Note issued by the Corporate Debtor in favour of the Financial Creditor for ₹ 13 Crore and the Demand Notice dated 07.03.2019 demanding payment of loan amounts along with the reply filed by the Corporate Debtor, and the Independent Auditor's Report for year ending 31.03.2017 showing secured loan from the Financial Creditor, it is clear that there is default in the repayment of the debt, within the meaning of section 3(12) of the Code. It is not the case of the Corporate Debtor that there is no debt, or that the debt has been repaid. The only issue raised by the Corporate Debtor is merely that the amounts claimed by the Financial Creditor in the Petition are in excess. Neither the debt nor the default have been denied. Further, the Corporate Debtor has only raised the issue of limitation, but since we find that it is a case of continuing default, its argument fails. There is not only an existing debt and default, but that, as observed from the Corporate Debtor's Independent Auditor's Report, the Company has lost its substratum and its net worth is eroded, showing negative balances - It is seen that the Corporate Debtor has filed its Statement of Solvency in Form 8 along with the Independent Auditor's Report for year ending 31.03.2017 which records that the LLP has not made any profits and the Reserves and Surplus of the Corporate Debtor reflected in the Financial Statement shows negative balance. The Corporate Debtor has failed to file Audited Financial Statement for the year ending 2018 and 2019 to establish the fact that the Corporate Debtor is solvent. On perusal of the NeSL Report dated 18.07.2019 showing that the Corporate Debtor has defaulted in repayment of the financial debt. It is established that the Corporate Debtor is in default of an amount higher than the minimum required for the initiation of CIRP - present petition is an independent proceeding, initiated on account of the debt and default having occurred vis-a-vis the Loan Agreement dated 20.03.2015, entered into between the Financial Creditor and the Corporate Debtor, and initiated on account of the Petition filed by the Financial Creditor in the instant case. The instant application is filed strictly in accordance with the extant provisions of the Code and the debt and default are established by the Financial Creditor by submitting substantial evidence in support of the claim. It is therefore, a fit case for initiating CIRP - application admitted - moratorium declared. 2020 (10) TMI 166 Liquidation of Corporate Debtor - Section 33/34(1) of I B Code - HELD THAT:- Upon a query posed to the Resolution Professional whether he is willing to act as a Liquidator, if appointed by this Authority, the Resolution Professional submitted that he is willing to act as Liquidator and the written consent has also been placed on record along with the Application. A perusal of it shows that the Resolution Professional has given a written consent by the signed letter dated 14.11.2019 to act as a Liquidator of the Corporate Debtor, if appointed by this Authority. Since, no Resolution Plan has been received by this Authority under Sub-section (6) of Section 30 of the I B Code, 2016, before the expiry of the maximum period of CIR Process, in exercise of powers conferred under Sub-Clauses (i) (ii) and (iii) of Clause (a) of Sub-Section (1) of Section 33 of the I B Code, 2016, this Authority proceeds to pass the Liquidation Order - Application disposed off. 2020 (10) TMI 165 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - HELD THAT:- It is not in dispute that Corporate Debtor has written a number of letters wherein a request has been made to restructure the loan. In the letter dated 5th March 2018, a reference of letter dated 11th January 2016 on the same subject has been given. We have also perused the contents of this letter wherein the Corporate Debtor has acknowledged the fact of loan taken, non-payment of the same and request for restructuring of the debt. Thus, from the date of NPA or even considering 90 days period prior to that date, the first letter is well within three years period of expiry of limitation. Thereafter, all letters have been written within a period of three years from the date of letter dated 11th January 2016 and, this being an instance of continuing cause of action, so, the limit for filing of application gets extended accordingly - the debt is not barred by limitation. The application filed by the financial creditor under Section 7 of the Insolvency Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the corporate debtor, Shree Ram Saw Mill Private Limited, is hereby admitted - Moratorium declared. 2020 (10) TMI 164 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- There is undoubtedly that the default in repayment of various loan admittedly availed by the CD is artificial and man-made. There are inconsistencies as regards date of declaration of NPA as well as the date of default. The date of default in Packing Credit Account allegedly occurred on 28.02.2018 and the Cash Credit, Packing Credit/FBP/FBD, Inland/Import Letter of Credit and Inland/Foreign Bank Guarantee have been allegedly classified as Non Performing Asset on 29.05.2018. However, the total default amount in cash credit account seems to have been claimed, is ₹ 46,32,00,000/- as on 23.09.2018, that is subsequent to the date of declaration of account as NPA on 29.05.2018. This anomaly has not been properly explained. Evidently as on 31.03.2017, the Corporate Debtor company was a profit making solvent company, (As per admitted financial statement of Corporate Debtor). How this profit making company all of a sudden went into insolvency, no valid explanation is forthcoming. According to the Ld. Counsel for the Corporate Debtor, it is because the situation had changed from the middle of March, 2018 because of a sudden and unexpected circular issued by the Reserve Bank of India dated March 13, 2018 being Circular No. 20 by which all authorized dealer Category-I Bank authorized to deal in foreign exchange were directed to discontinue the practice of issuance of Letter of Undertakings (LoUs)/Letter of Comforts (LoCs) for trade credits for imports into India with immediate effect. There is enough material on record to prove that the Financial Creditor had never been serious in initiating any action under the Code against the Corporate Debtor either in the earlier application under Section 10 of the Code, filed by the corporate applicant, or in the present proceedings under Section 7 of the Code. The Credit facilities had admittedly been revised and sanctioned from time to time and finally on 15th February, 2018 when various documents had been got executed from the Corporate Debtor, the date of default could not be 28th February, 2018 and the date of the corporate debtor's account could not be declared as NPA on 29th May, 2018 when bank had accepted the Resolution passed by the Board of Directors of the Corporate Debtor on 15th February, 2018. The Bank appears to have some other Agenda either at the time of enhancing credit facilities or at the time of declaring the account of the Corporate Debtor as an NPA on 29th May, 2018. The Financial Creditor has completely failed to convince us as regards the date of default being 28th February, 2018, and classification of its account being a non-performing asset on 29th May, 2018. The two dates being, material for initiating CIRP against a corporate person, the application is bound to fail - In the facts and circumstances and the arguments discussed, the Intervener's application is found liable to be allowed, and the CP, being devoid of any merit, liable to be dismissed. Application dismissed. 2020 (10) TMI 163 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The OC and the CD have entered into an agreement with regard to purchase and supply of coal and the OC refused to accept the coal supplied by the CD both on the ground of inferior quality and also in not supplying the coal through a particular vessel by name MV Salt Lake City. It also appears that the prices of coal have been dropped after making payment by the OC to the CD at a particular price. The possibility of refusal of acceptance of coal by the OC due to fall of prices cannot be ruled out, since the advocate appearing for the applicant during the course of argument refused to accept coal when asked by this Tribunal as to why can't they resolve the issue by accepting coal from the CD as the CD expressed his ready and willingness to supply the coal. The OC did not place any material before this Tribunal to prove the alleged assertion by way of written concluding contract between the parties - It also transpires from the reply and the conduct that the OC is not inclined to accept the material due to obvious reasons. All the above allegations and counter allegations clearly proves a pre-existing dispute between the parties. In this case, the demand notice was dispatched on 01.06.2019 at 12.24 Noon as per the postal receipts placed by the OC and the CD is expected to receive it at least two/three days thereafter. In the meanwhile, the CD has sent an email to the OC on 31.05.2019 at 15.55 PM alleging so many breaches on the part of the OC which proves the pre-existing disputes between the parties with regard to enforcement of the terms conditions of the contract. Therefore, this Tribunal is of the considered opinion that this is not a fit case where Section 9 of the IBC can be triggered in the above facts and circumstances and the above Company Petition is liable to be dismissed. Petition dismissed. 2020 (10) TMI 162 Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - service of demand notice - whether the demand notice in Form No. 3 4 dated 16.10.2019 was properly served? - HELD THAT:- The demand notice dated 16.10.2019 was sent at the address as per the master data at Page No.20 of the petition in which the registered office is shown as Village Rani Ki Bain, P.O. Gutkar, District Mandi, Himachal Pradesh-175021. The postal receipt in respect of the Demand Notice is at page-24 of the petition - The copy of demand notice duly acknowledged by the Corporate Debtor is at Page 24 to 30 of the petition. The Corporate Debtor has replied to the demand notice dated 16.10.2019 vide e-mail dated 30.10.2019 admitting the debt. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- The respondent corporate debtor has not disputed the liability towards the operational creditor and has expressed its inability to pay the outstanding towards the operational creditor. Thus, there is no dispute as to the liability between the corporate debtor and the operational creditor. It is also observed that on the last date of hearing, learned counsel for the respondent has admitted its liability and submitted that this CP may be admitted. It has been shown that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. It is also observed that the conditions under Section 9 of the Code stand satisfied. The applicant-operational creditor states that from the above mentioned facts, it is clear that the liability of the respondent-corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default, which is more than ₹ 1 lac by the respondent-corporate debtor - In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition for initiation of the CIRP process in the case of the Corporate Debtor M/s. Ram Hari Auto's Pvt. Ltd. is admitted and moratorium and appointment of Interim Resolution Professional is declared. Application admitted - moratorium declared. 2020 (10) TMI 161 Sanction of resolution plan - Sections 30(6) and 31 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - HELD THAT:- The corporate debtor was incorporated on 10.12.1969 and as discussed above, the CIRP proceedings were initiated by order delivered on 13.02.2019. The present application is filed for approval of the resolution plan submitted by M/s.Haldiram Snacks Private Limited. The approval has been sought under the provisions of Section 31(1) of the Code. It is observed that the total admitted claim due to Operational Creditors (including workmen) is ₹ 3.53 crores but as the liquidation value i.e. ₹ 122.87 crores, is not sufficient to cover the dues of Financial Creditors, therefore, nothing is paid to be operational Creditors. Since, the Liquidation Value for the Operational Creditors is Zero, the resolution plan proposes to settle the 100% of the admitted Operational Creditors (including Workmen Employee and Statutory Dues) at Zero. Therefore, the amount to be distributed between operational creditors in the event of liquidation, if distributed in order of priority in Section 53(1) of the Code would be NIL. Further, there are no dissenting financial creditors as the resolution plan has been approved by 100% voting share of the Financial Creditors. Also it is stated in para 5.5 (ii) of the plan that Dissenting Financial Creditors shall be paid in accordance with Section 30(2) of the IBC provided that such payment shall not be made in priority to Financial Creditors who vote in favour of the plan. Hence, Section 30(2)(b) of the Act stands complied with. Requirements of Regulation 39(4) of the Regulations - HELD THAT:- It is observed that in the 10th meeting of CoC held on 04.11.2019, approval was given for obtaining 50% of the performance security in the form of Demand Draft and remaining 50% in the form of Bank Guarantee from the resolution applicant. It is submitted that as per the requirement of performance security, the Performance Guarantee has been provided in the way of Bank Draft for ₹ 11,50,00,000/- and remaining in the form of unconditional Bank Guarantee for ₹ 11,50,00,000 both favouring the Financial Creditor. A copy of Demand Draft and Unconditional Bank Guarantee is annexed as Annexure A-3 (Colly).It is thereby submitted that the requirements of performance security under Regulation 39(4) of the Regulations read with 36B(4A) of the Regulations are complied with. The resolution plan submitted by Haldiram Snacks Private Limited as approved by the CoC, is approved - moratorium shall cease to have effect. 2020 (10) TMI 160 Maintainability of application - initiation of CIRP - Corporate Debtor has committed default in payment of outstanding debt - Existence of debt and dispute or not - HELD THAT:- When we look at the scheme of the IBC, 2016, the preliminary condition is that there must be a debt which is met. The second condition is, such debt must be due and payable. In regard to this, as apparent from the provisions of clause 4.3 of Article IV of the Agreement between the parties as mentioned herein above, it is established that the delivery of the said flats has to be given upto May, 2020. Having said so, if we accept the contentions of the Financial Creditor that it may not be possible owing to prohibition on construction due to violation of sanction plan, hence, debt should be considered due and payable particularly when the Financial Creditor has repudiated the contract. This is particularly in the background of the fact that Financial Creditor does not wish to give effect to the provisions of the contract in toto i.e., if, based upon termination notice, the amount is considered as due and payable, then, obviously clause 9.1(i) of Article IX of the Agreement shall come into play. Hence, based upon the above proposition, it cannot be said that debt becomes due and payable. This petition is pre-mature at this stage and thus, not maintainable - Petition dismissed. Central Excise 2020 (10) TMI 159 Maintainability of petition - requirement of mandatory pre-deposit - the specific case of the petitioner was that in its appeal and during hearing they had submitted that an amount of ₹ 12,50,000/- has already been deposited and the demand notice dated 14th August 2019 contained an amount of ₹ 7,86,135/- which has been deposited before issuance of the said demand and required to be appropriated - HELD THAT:- Once a demand raised by the authority amounting to ₹ 22,99,635/- has attained finality up to the stage of Tribunal, there is no scope of considering the grievance of the petitioner regarding adjustment of any amount against this demand which might have been deposited by the petitioner at any stage prior to the demand raised by the petitioner. It is also found from the record that the petitioner himself had availed of the scheme declaring that an amount of ₹ 22,99,635/- was due against the petitioner and thereafter it is not open to the petitioner to raise any further grievance regarding the outstanding dues which remained against the petitioner. In exercise of the power under Article 226 of the Constitution of India, there is no scope for entering into the calculation which has been arrived at by the respondent department and on the face of it, it is not in dispute that the demand raised by the authority against the petitioner having attained finality, petitioner should go strictly as per scheme. Petition dismissed. 2020 (10) TMI 158 Reversal of CENVAT Credit - time limitation - Rule 3(5A) of the CENVAT Credit Rules, 2004 - Revenue Neutrality - HELD THAT:- The appellant is seeking the benefit of time bar merely by submitting that the goods i.e. the scarp items have been transferred to their other factory at Ghaziabad and hence, whatever duty is paid at Sambalpur factory will be available as credit at the recipient Ghaziabad factory and hence there would be a revenue neutral situation. The above contention is being raised for the first time before the Tribunal which was never pleaded before both the authorities below and hence cannot be allowed to be taken at this stage. The appellant appears to have been involved all along in delaying the adjudication and appeal proceedings. Moreover, the appellant has not submitted any rebuttal to the findings made by the original authority, which are grave in nature, while confirming the duty demand. The appellant is not entitled to seek the mercy of time bar benefit - Appeal dismissed - decided against appellant. 2020 (10) TMI 157 Eligibility to avail CENVAT Credit - Export of exempted goods - denial of credit availed by the appellant in the ER-1 returns filed by them - It is the contention of the lower authorities that since after the amendment vide Notification no. 24/2010, the goods which are already exempted cannot be exported under bond for export outside India, the benefit of Rule 6(6) of the Credit Rules shall not be available to the appellant and hence, the appellant is not entitled to avail credit of duty paid on inputs used in the manufacture of exempted goods - HELD THAT:- Since the final product is exempted from payment of Central Excise duty no duty liability arises even if the same is cleared for domestic consumption. However, the appellant has cleared the said exempted goods for export outside India. The general provisions contained in Credit Rules provides that credit is not allowed to be claimed on inputs if the same is used in manufacture of exempted goods as would be clearly discernible on perusal of Sub-Rule (1) to (4) of Rule 6. However, Sub-Rule (6) of Rule 6 carves out an exception to provide that if the goods are cleared to SEZ or a 100% EOUs, EHTP, etc the restrictions contained in the said rules shall not apply, clearly implying that final products which have been exported would not be denied of the input credit benefit - Provision has also been made in Rule 6(6)(v) to state that goods cleared for export under bond in terms of Central Excise Rules shall also not be denied input credit, which also clearly implies that assessee shall be allowed to avail credit on inputs used in exported manufactured goods. Subsequent amendment made in Notification No.42/2001 to do away with the requirement of following the bond related procedure in case of goods which are otherwise chargeable to NIL rate of duty or wholly exempted is merely a procedure and has no relation whatsoever with the credit entitlement under Credit Rules. The disallowance of credit by both the authorities below in the instant case is not proper. The issue has already been dealt by the Tribunal in the case of JOLLY BOARD LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2014 (3) TMI 124 - CESTAT MUMBAI] wherein the Bench after applying the ratio decidendi laid down by the various High Courts observed that In this case, appellant has not executed any bond for export of the goods. If the goods are exempted, execution of bond was not required. Appellant are entitled for refund claim - It is also emphasised and constantly held by the Tribunal that the policy of the Govt. of India is to promote the export of goods and not to export the domestic taxes and levies so as not to render the goods costlier in international market and un-competitive. The appellant is duly entitled to avail credit and therefore, the impugned duty demand is not sustainable - Appeal allowed - decided in favor of appellant. 2020 (10) TMI 156 Imposition of penalties u/r 26(2)(i) and Rule 26(2)(ii) of Central Excise Rules, 2002 - allegation that the appellant have issued invoices to M/s. Chandra Protecto Limited, Silvassa for supply of Copper Conductors, Copper Rods and Copper Wires whereas only invoices were issued without supplying the physical materials - HELD THAT:- It is a claim of the appellants that they have produced various documents and submissions however, the Adjudicating Authority has not properly dealt with the documents and submissions made by the appellants. Therefore, there is a violation of principles of natural justice. Irrespective of any grave nature of offence, if the principles of natural justice are not followed, the order will not sustain - matter remanded to the Adjudicating Authority for passing a fresh order after considering all the documents and submissions thereon made by the appellants - appeal allowed by way of remand. 2020 (10) TMI 155 Availing cenvat credit against pre-deposit - to be considered as 'deposit of Service Tax or not' - amount pre-deposited by the appellant in terms of Section 35F of the Central Excise Act, 1944 pursuant to the stay order - HELD THAT:- Rule 3 ibid is the enabling provision, which entitles a manufacturer or a service provider to take Cenvat credit of various duties and service tax mentioned therein. The said rule nowhere prescribes that amount deposited under Section 35F ibid should be considered as either duty or service tax for the purpose of taking the Cenvat benefit. Since, payment made under 35F is not specifically finding any place in Rule 3 ibid, taking of such amount as Cenvat credit is contrary to such statutory provision and hence, denial of Cenvat benefit in the present case by the authorities below is in conformity with the statutory provisions - In view of the fact that Rule 3 of the rules does not consider the amount of pre-deposit as service tax for availment of Cenvat credit by the manufacturer/service provider, taking of such credit by the appellant is not proper and justified. Thus, the service tax demand confirmed by the original authority and upheld in the impugned order cannot be faulted with. The department has invoked the provisions of Section 11AC of the Central Excise Act, 1944 for imposing mandatory penalty on the appellant. Insofar as invocation of the said statutory provision is concerned, the department has to specifically allege and prove with substantial evidence that there is element of fraud, collusion, willful misstatement, suppression of facts etc., with intent to evade payment of central excise duty/service tax. From the averments made in the appeal memorandum as well as the submissions made by the learned Advocate at the time of hearing of appeal, it transpires that the ingredients mentioned in Section 11AC ibid are absent and as such, the provisions of Section 11AC ibid cannot be invoked inasmuch as taking of Cenvat credit of the pre-deposit amount in question by the appellant was not owing to the reason of fraud, collusion, willful misstatement etc. - the availment of credit based on the valid and proper document cannot invite for the penal consequences by reason of fraud, collusion etc., with intent to evade Government revenue. Imposition of penalty under Section 11AC ibid by the department cannot stand for judicial scrutiny - the appeal is partly allowed in favour of the appellant by setting aside the penalty imposed on it under Section 11 AC ibid. 2020 (10) TMI 154 Refund of CENVAT Credit - time limitation - rejection on the ground that the claim is barred by limitation of time inasmuch as the appellant had filed the refund application after almost 13 years from the date of reversal of the Cenvat credit in question - HELD THAT:- It is an admitted fact on record that the appellant in this case had filed the refund application after almost 13 years from the date of reversal of Cenvat credit. Insofar as the time limit for filing of refund application is concerned, Section 11B ibid in clear and unambiguous term provides that the claim application should be filed within 1 year from the relevant date. The refund application filed by the appellant was considered by the original authority under Section 11B ibid and denied such benefit to the appellant on the ground of limitation. Since, the Central Excise statute clearly mandates the time limit for filing of the refund application, denial of the refund benefit solely on the ground of limitation by the original authority is inconformity with the statutory provisions inasmuch as the adjudicating as well as the appellate authorities are created under the statute and cannot interpret the provisions of law in a different manner than as provided by the legislature. The Hon ble Supreme Court in the case of COLLECTOR OF CE., CHANDIGARH VERSUS DOABA CO-OPERATIVE SUGAR MILLS [ 1988 (8) TMI 103 - SUPREME COURT] have ruled that statutory provisions cannot be interpreted differently by the authorities functioning there under and since the statute has clearly prescribed a time limit for filing of the refund application, the same has to be strictly adhered to by such authority. The refund application filed by the appellant was rejected under the ground of limitation, as per the provisions of Section 11B ibid - Appeal dismissed - decided against appellant. 2020 (10) TMI 153 CENVAT Credit - input services or not - residential accommodation for the housing of their staff as well as their officers, working in the factory - nexus with output service or not - HELD THAT:- This issue had come up before the Tribunal in the case of M/S ULTRATECH CEMENT LTD., (UNIT BIRLA WHITE) VERSUS CCE AND ST, JAIPUR II [ 2018 (3) TMI 1371 - CESTAT NEW DELHI] wherein it was held that the assessee/appellant requires the residential colony for availability of the workers for manufacture of dutiable goods and, as such, security services is essential in order to maintain the residential/industrial colony of the appellant. Accordingly, I hold that the appellant is entitled to the Cenvat credit under dispute. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2020 (10) TMI 152 Attachment of property - creation of encumbrance in the property - case of petitioner is that he is a bona fide purchaser, who had purchased the property prior to the encumbrance being created and therefore is entitled to protection from the charge created over the subject property - Section 24-A of The Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- Under Section 24 of the TNGST Act, the arrears of the tax will become immediately due on default of the outstanding taxes and consequently, a charge would be created on the properties of the person liable to pay the tax or the interest. Section 24-A of the TNGST Act provides that all charges or transfers made by the dealer during the pendency of any proceedings under the Act, shall be void. The intention to defraud the revenue requires to be derived from the manner in which the defaulter transfers the title of the property. When the transfer of title of the property is made within a reasonably short period from the knowledge of the tax arrears or whenever such a transfer of title is done among the family members of the defaulter, there can be a strong presumption that such transfer has been made to defraud the revenue. Since the defaulter had transferred the property in favour of his brother's wife, by appointing his own brother as the Power Agent to act on his behalf and such a sale has happened within six months from the date of which the demand of arrears of tax was made, it can be said there are no bona fides in such a transfer. Accordingly, in view of Section 24-A of the TNGST Act, the transfer itself is deemed to be void - the department may be entitled to recover the sales tax arrears of the later dealer, namely Thiru.T.C.Wilson, by enforcing the charge against the subject property in the manner provided under the Act. The respondents 1 and 2 are at liberty to enforce the charge over the subject property for recovery of the arrears of tax due from the assessee, namely Thiru.T.C.Wilson (late), proprietor of M/s.New Nelson Watch Company, in a manner known to law - Petition dismissed. Indian Laws 2020 (10) TMI 151 Grant of Bail - Dishonor of cheque - present applicant has been made accused because he is father of the proprietor of the said firm and looking after his business - applicant submits that the applicant is nowhere connected with the said firm - HELD THAT:- The dispute of the complainant is with the son of the present applicant i.e. Manoj Chouksey who is sole proprietor of the firm Deepti Construction in respect of the payment of certain amount for the material supplied by him. From the face of it, the present applicant is not concerned with the said dispute. Hence, the application deserves to be allowed. Without commenting on the merit of the case, this application is allowed - It is directed that in the event of arrest of the applicant in connection with the aforesaid crime number, he shall be released on bail upon his furnishing personal bond in the sum of ₹ 50,000/- (Fifty Thousand) with one surety in the like amount to the satisfaction of the arresting officer. Application disposed off. 2020 (10) TMI 150 Priority of settlement of claims - payment to secured creditors - Section 26(E) of The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and Section 31-B of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - HELD THAT:- In the judgement relied on by the learned senior counsel for the petitioner reported in Manu/KE/3448/2019 [State Bank of India v. State of Keral dated 30.07.2019] [ 2019 (7) TMI 1684 - KERALA HIGH COURT ] , the scope and ambit of Section 26(E) of The Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 and Section 31-B of The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 were considered in extenso. Accordingly, it was concluded that a secured creditor under the above said provisions get priority over the right, if any, claimed by the revenue. There is no fresh adjudication is required in the light of the judgement apart from the factual position which is not in dispute nor any contra materials produced. Petition allowed.
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