TMI Tax Updates - e-Newsletter
November 12, 2019

Case Laws in this Newsletter:

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

Articles

1. VOLUNTARY PAYMENT OF TAX UNDER GST LAWS

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. 27th Conference of Central and State Statistical Organizations (COCSSO) inaugurated at Kolkata, West Bengal on 11th November, 2019.

2. India’s service excellence to be showcased in GES 2019

Notifications

Customs

1. 44/2019 - dated 11-11-2019 - ADD

Seeks to amend notification No. 1/2017-Customs dated 5th January, 2017 to insert S. Nos. 48 to 52 in the duty table to finalize the assessment of exports of jute products by M/s. Roman Jute Mills Ltd. (Producer/Exporter) and M/s SMP International, LLC,USA (Exporter/ Trader), M/s Aziz Fibres Limited (Producer/Exporter), M/s Natore Jute Mills (producer), Bangladesh and M/s PNP Jute trading LLC (Exporter/Trader), USA

2. 43/2019 - dated 11-11-2019 - ADD

Seeks to rescind notification Nos. 24/2018- Customs (ADD) the dated 7th May, 2018, 41/2018- Customs (ADD) and 42/2018- Customs (ADD) dated 24th August, 2018 which had prescribed provisional assessment on export of jute products from Bangladesh by specified exporters

GST - States

3. G.O.Ms.No.453 - dated 6-11-2019 - Andhra Pradesh SGST

Seeks to amendment in Notification G.O.Ms.No.255, Dated 20.3.2019

4. G.O.Ms.No.452 - dated 6-11-2019 - Andhra Pradesh SGST

Seeks to amend Notification G.O.Ms.NO. 23, Dated 18.01.2019

5. G.O.Ms.No.451 - dated 6-11-2019 - Andhra Pradesh SGST

Seeks to amend Notification GO.Ms,No.583, Dated 12.12.2017

6. G.O.Ms.No.449 - dated 6-11-2019 - Andhra Pradesh SGST

Seeks to amend Notification G.O.Ms. No. 258, dated 29/06/2017

7. G.O. Ms. No. 450 - dated 6-11-2019 - Andhra Pradesh SGST

Seeks to amend Notification GO.MS.NO 582, dated 12.12.2017

8. 22/2019 - No. FD 47 CSL 2017 - dated 31-10-2019 - Karnataka SGST

Seeks to extend the last date for filing of FORM GST CMP-08 for the quarter July-September 2019 by four days from 18.10.2019 till 22.10.2019

9. 4-F/2019 - No. FD 47 CSL 2017 - dated 30-10-2019 - Karnataka SGST

Karnataka Goods and Services Tax (Seventh Amendment) Rules, 2019

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MRD/DOP1/CIR/P/2019/128 - dated 8-11-2019

Introduction of Cross-Margining facility in respect of offsetting positions in co-related equity Indices

2. SEBI/HO/CFD/DCR2/CIR/P/2019/133 - dated 8-11-2019

Streamlining the Process of Public Issue of Equity Shares and convertibles- Extension of time lime for implementation of Phase II of Unified Payments Interface with Application Supported by Blocked Amount

GST

3. 123/42/2019 - dated 11-11-2019

Restriction in availment of input tax credit in terms of sub-rule (4) of rule 36 of CGST Rules, 2017

Customs

4. Public Notice No. 25/2019 - dated 30-10-2019

Clarification regarding duty drawback allowed in cases of short- realisation of export proceeds due to bank charges deducted by foreign banks

5. PUBLIC NOTICE NO. 30/019 - dated 9-10-2019

Clarification regarding duty drawback allowed in cases of short realisation of export proceeds due to bank charges deducted by foreign banks

6. PUBLIC NOTICE NO. 27/2019 - dated 9-9-2019

IGST Refund drive from 13.09.2019 to 27.09.2019

7. Public Notice No. 20/2019 - dated 29-8-2019

Special Drive for rectification of IGST refund errors beginning from 2nd Sep. 2019 to 06th Sex 2019

Highlights / Catch Notes

GST

• Goods Detained for Route Change Despite Lack of Evidence of Intent to Violate e-Way Bill Directions.

  Case-Laws - HC : Detention of goods - the driver of the vehicle took an alternate route - No doubt, if the vehicle is detained at a place that is located on an entirely different stretch of road and plying in a direction other than towards the destination shown in the e- Way bill, then a presumption could be drawn that there was an attempt at transportation contrary to the e-Way Bill. - In the instant case, there is no such indication.
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• Clubs and societies must charge GST on member facilities and benefits, regardless of mutuality principles.

  Case-Laws - AAAR : Association of persons - Lions Club - principle of mutuality - scope of supply - provision by club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members will surely attract GST irrespective of the fact that such club is not set up with the objective of providing any goods or service to its members. - Activity liable to GST
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• Advance Ruling Authority Advised Against Ruling on Zero-Rated vs. Normal Supply for Export Services Clarification.

  Case-Laws - AAAR : Scope of Advance Ruling application - zero-rated supply or a Normal supply - export of service - The Advance Ruling Authority should have refrained from passing any ruling on the above mentioned two questions asked by the Respondent vide the Advance Ruling application filed before the Advance Ruling Authority
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• Iron Ore Mining Royalties from July 2017 to December 2018 Subject to 18% GST on Licensing Services.

  Case-Laws - AAAR : Rate of GST - royalty paid to Government for mining of Iron Ore for the period July, 2017 to December 2018 - The licensing services for the right to use minerals including its exploration and evaluation received by the Applicant is taxable @18% of GST
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• Authority Confirms Jurisdiction for Advance Ruling on Continuous Activity Related to Past Supplies.

  Case-Laws - AAAR : Seeking advance rulings on the supplies made in the past supplies - The activity on which the Applicant sought an advance ruling is a continuous activity and pronouncing an order on such activity shall be within the jurisdiction of the “Authority”.
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Income Tax

• Revenue's Tax Attempt Fails: Section 292C Presumption Rejected Due to Clear Loan Transaction Evidence in Seized Documents.

  Case-Laws - AT : Since the revenue failed to assess the said amount in the hands of the parties to the transaction, therefore, it was attempted to tax in the hands of the assessee on the basis of presumptive provisions of Section 292C - Once the seized documents are free from any ambiguity, then the said document reveals the transaction of loan cannot be presumed to be the document belongs to the assessee for the purpose of assessing the income being unexplained loan
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• No disallowance for late Provident Fund and ESI contributions if paid before Income Tax return due date per Section 43B.

  Case-Laws - AT : If the assessee had deposited employee's contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003.
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• Tax Authorities Misclassify Land Sale; Incorrectly Added as Capital Gains and Business Income, Raising Taxable Income.

  Case-Laws - AT : Gain on sale of land - business income or long term capital gain - Authorities below were not justified in making or confirming the addition in the hands of the assessee under the head `Capital gains’ as well as `Profits and gains from business or profession’
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• Supreme Court Prioritizes Substantive Justice Over Technicalities in Delay Condonation for Refund Claims.

  Case-Laws - HC : Condonation of delay - delay in filing claim of refund of amount - It is well settled law by the Hon'ble Supreme Court that instead of rejecting the matters on technicalities, the Courts shall do substantive justice by deciding the case on merits.
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• Legal Expenses Denied: Dispute Between Shareholder Groups Over Company Control Not Deductible as Business Expenses.

  Case-Laws - HC : Disallowance of legal expenses - the complaint filed before the Chief Metropolitan Magistrate Court has been made against the Directors / Shareholders in individual capacities. The entire dispute between the various group of shareholders was only to acquire the management and control of the appellant company and, therefore, these expenses are not expenses incurred for and on behalf of the company.
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Customs

• Antenna Classification for Base Stations in Mobile Networks Under Sub-heading 85177090 as "Parts" per Customs Rules.

  Case-Laws - AT : Classification of goods - Antenna for base station, imported and used in mobile telecommunication network - The correct classification of the Antenna for base station is under Sub-heading 85177090 as “parts”
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• Customs Authority Finds No Mis-declaration; Extended Limitation Period Unjustified Due to Lack of Intent to Evade Duty.

  Case-Laws - AT : Once the Customs authorities has come to the conclusion that there is no mis-declaration and there is no suppression of facts by the appellant in filing the Bill of Entry which was accepted by the Department, then invoking the extended period of limitation is not justified because there was no intention to evade payment of duty.
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• No Penalty Imposed u/s 112(a) of Customs Act as Appellant's Role in Undervaluing Furniture Unproven.

  Case-Laws - AT : Imposition of penalty u/s 112(a) of the Customs Act, 1962 - appellant engaged in the business of hotel management consultancy - The role of appellant has not been established in aiding and abetting the importer to undervalue the imported furniture. - No penalty
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• Court Upholds Additional Director General's Authority to Issue Show Cause Notices; Petitioners Fail to Prove Lack of Authority.

  Case-Laws - HC : Jurisdiction - power of Additional Director General, the Zonal unit to issue SCN - a government or an officer exercising statutory authority is acting regularly. The onus is on the person challenging his authority to establish it. The respondent writ petitioners have miserably failed to even make out a semblance of a case.
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Service Tax

• Local Self-Government Escapes Tax Evasion Allegations; Extended Limitation Period Inapplicable by Revenue Authority.

  Case-Laws - AT : Since the appellant is a local self-government, the allegation of intention to evade payment of tax is not sustainable against the appellant. Therefore extended period of limitation was not available to the Revenue in the present case.
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• Franchise Fees Ruled as Commercial Services, No Double Service Tax on Revenue-Sharing Portion Received.

  Case-Laws - AT : Commercial training and coaching services or business auxiliary service? - franchise fees - revenue sharing model - Career Launcher has paid Service Tax on the entire amount of fees collected from the students. It is on a revenue sharing basis, that part of this fee is remitted to the Appellant by Career Launcher. The Appellant, therefore, cannot be required to again pay Service Tax on this fee.
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Central Excise

• Goods Examination Ordered to Determine Classification as Plant Growth Regulators or Enhancers by CRCL Lab Under Excise Rules.

  Case-Laws - AT : Classification of goods - Harvest Plus and Cash Plus - Adjudicating Authority directed to get the goods examined by departmental chemical laboratory i.e. CRCL to decide whether the goods manufactured by manufacturer are Plant Growth Regulators or Plant Growth Enhancers.
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• Authority Adjusted Refund Against Dues u/s 35F Without Allowing Respondent to Submit Objections.

  Case-Laws - AT : Adjustment of sanctioned refund against outstanding confirmed dues - Section 35F - The Adjudicating authority, while adjusting the refund claim against the outstanding dues ought to have provided an opportunity to the Respondent to make submissions in this regard.
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• Court Considers Eligibility for Exemption on Yarn Waste Popcorn Conversion; Minor Use Shouldn't Disqualify Applicant.

  Case-Laws - AT : Benefit of exemption - the Appellant has brought yarn waste and converted the same into popcorn. What has been tested by the Man Made Textile Research Association is Polyster Popcorn and even the CIPET report is about PET waste - Adjudicating authority directed to consider that he small use of popcorn from yarn waste would not debar the Appellant from exemption.
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• Revocation of Central Excise Registration Violates Rule 9 of 2002 Regulations, Hindering Legal Manufacturing Operations.

  Case-Laws - AT : Revocation of Central Excise Registration - very person, who produces or manufactures any excisable goods, shall get registered. Thus, without registration, the respondent/assessee, cannot carry on the manufacture of the excisable goods. Thus, the order of revocation is in violation of the provisions of Central Excise Rules, particularly Rule 9 of the Central Excise Rules, 2002.
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Case Laws:

• GST

• 2019 (11) TMI 479
  Rate of GST - seeking advance rulings on the supplies made in the past supplies - royalty paid to Government for mining of Iron Ore for the period July, 2017 to December 2018 - reverse charge mechanism - as per the understanding of the Applicant, the mining lease service availed by them should be classified under the head 99733 - AAR is of the view that the present case of the Applicant does not come within the ambit of provisions of Section 97 of the CGST Act, 2017. Jurisdiction of AAR - HELD THAT:- The broad objective for setting up of the AAR/AAAR is to provide certainty in tax liability in advance in relation to an activity being undertaken or proposed to be undertaken by the Applicant as well as to reduce litigation. The activity on which the Applicant sought an advance ruling is a continuous activity and pronouncing an order on such activity shall be within the jurisdiction of the Authority . Merits of the case - rate of GST - HELD THAT:- On a conjoint reading of the notification no 27/2018-Central Tax (Rate) dated 31 12.2018, Minutes / Agenda / Proposal / Discussion of the GST council, we are of the view that amendments have been carried out vide the aforesaid notification to clarify the legislative intent as well as to resolve the unintended interpretations It is well settled that the legislative intent cannot be defeated by adopting interpretations which is clearly against such interpretations. Reliance placed in the decision of the Hon ble Supreme Court of India in the case of COLLECTOR OF CENTRAL EXCISE, SHILLONG VERSUS WOOD CRAFT PRODUCTS LTD. [ 1995 (3) TMI 93 - SUPREME COURT ], where in a 3 judges Bench of the Hon ble Court while interpreting amendments in Central Excise Tariff have held that the expression similar laminated wood in Heading No. 44.08 as it stood form the beginning must be construed to include within it block boards of all kinds so that the amendment in chapter Note 5 w.e.f. 19-3-19990 and thereafter w.e.f. 1-3-1992 merely clarified and made explicit that which was implicit in the heading throughout. These amendments were obviously made to end the dispute raised by the manufactures by an express statement - the ratio of the aforesaid case is squarely applicable to the instant case as well. Thus, the interpretation which defeats the intention of the legislature should be avoided. The licensing services for the right to use minerals including its exploration and evaluation received by the Applicant is taxable @ 18 % [9 % CGST and 9 % OGST] during 07/2017 to 12/2018.

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• 2019 (11) TMI 478
  Scope of Advance Ruling application - Classification of supply - supply of manpower services to highly technical industries such as Oil Gas, Power etc. - zero-rated supply or a Normal supply - export of service - delay in filing appeal - time limitation - challenge to AAAR decision. Time limitation - HELD THAT:- There is a delay of 26 days in filing the said appeal by the appellant and the Appellant has filed miscellaneous application for the condonation of the said delay of 26 days, wherein the Appellant, which happens to be the jurisdictional officer, has attributed the said delay of 26 days in filing of the instant appeal to the initial teething problem being faced by them in the implementation of the GST procedures after the introduction of the GST regime - the delay is condoned - appeal filed before us in terms of proviso to sub section 2 of section 100 of the CGST Act 2017. Merits of the case - classification of supply - challenge to impugned Advance Authority Ruling, wherein the Authority of the Advance Ruling held that the transactions covered under the Master Service Agreement (Intercompany Service Agreement) entered between Respondent and NES Abu Dhabi are export of services under the GST Act, 2017 - zero rated supply - determination of the place of supply of goods/services - whether the services being provided by them to their overseas client i.e. M/s NES Abu Dhabi in terms of the subject MSA Agreement will be export or not and whether the same would be zero-rated supply or not? - HELD THAT:- Section 97(2) of the CGST Act, 2017 encompassing the specific questions, which are to be sought under the Advance Ruling, it can decisively be inferred that the questions raised by the Respondent before the Advance Ruling Authority were beyond the scope and jurisdiction of the Advance Ruling, and hence do not warrant any ruling thereon. The Advance Ruling Authority should have refrained from passing any ruling on the above mentioned two questions asked by the Respondent vide the Advance Ruling application filed before the Advance Ruling Authority - since the questions asked by the Appellant are not covered under the scope and jurisdiction of the Advance Ruling, no advance ruling in this regard can be passed.

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• 2019 (11) TMI 477
  Requirement of registration - Association of persons - principle of mutuality - scope of supply - amount collected by individual lions clubs and lions districts is for convenience of lions members and pooled together only for paying meeting expenses and communication expenses - amount so collected is deposited in a single bank account - there is no furtherance of business in this activity and neither any services are rendered nor are any goods being traded - challenge to AAAR decision - condonation of delay in filing appeal. HELD THAT:- The appellant was prevented by a sufficient cause from presenting the appeal within period of thirty days from the receipt of the said ruling of AAR and accordingly allow the appellant to present the appeal within a further period of 30 days in terms of proviso to sub section 2 of section 100 of the CGST Act 2017. Merits of the case - Whether the Clubs or Associations and the members thereof can be considered as distinct persons or not? - HELD THAT:- We are only concerned with the element of service, if any, rendered by the club to its members against some consideration, which may be in the form of the entrance fee or membership fee. Therefore, the contention made by the Respondent with regard to the principle of mutuality to establish their claim that the club and its member are not distinct entity is not tenable in so far as taxability in the GST regime is concerned. Whether the activities, undertaken by the Respondent by way of organizing the Leadership program exclusively for their Lion members, can be considered as service or not? - HELD THAT:- It is pertinent to note that these Leadership Programs are conducted only for the Lion members. Non-Lion members are not allowed to participate in such programs. Thus, by doing so, the Respondents have rendered activity for the benefit of its members against the membership fee - Therefore, the activity of the Respondent in as much as they are conducting the Leadership Program exclusively for the Lion club members can clearly be considered as service being provided by the Respondent to its members. Whether the fee collected by the Respondent i.e. the Lions Club from its members in the form of entrance fee and annual membership fee can be treated as consideration or not? - HELD THAT:- The membership fee collected by the Club from its members is not only meant for meeting the administrative expenses, but is also towards organising the Leadership Program for the direct or indirect benefits of the members. Any Leadership Skill along with other skills, imparted to any Lion member is not restricted or limited to any particular project, but the overall impact of such qualities developed in any person stays for his entire life span and the benefits accrued out of such skills will undoubtedly go much beyond the Projects undertaken by the Lions Club. Thus, any membership fee collected by the Lions Club from its members will definitely be understood as consideration as the same has been paid for the supply of services. Whether the transaction between the Respondent i.e. Lions Club and its members can be construed as supply or not? - HELD THAT:- On perusal of the above definition of business, it can clearly be concluded that the provision of the leadership program by the Lions Club for the benefit of its members will come under the scope of business - Thus, it has been established that the supply of the services in the form of organising Leadership Program exclusively for Lion members has been made in the course of business only. It is believed that under the GST Law, the intent or objective of any club or association is immaterial in so far as the leviability of GST is concerned. Therefore, provision by club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members will surely attract GST irrespective of the fact that such club is not set up with the objective of providing any goods or service to its members. Hence, the observation of AAR does not hold any legal ground. The ruling made by AAR is set aside and subsequently it is held that Lions Club of Poona Kothrud, on account of the activities undertaken by them, is liable for taking registration for discharging their GST liability.

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• 2019 (11) TMI 476
  Export of services - photography activity, being performed by the Appellant on the diamonds sent by the vendors of the R2Net - non-applicability of condition no: iii) and v) of section 2(6) of IGST Act - performance based service - place of supply of services - recipient of service - challenge to AAAR Decision. HELD THAT:- The AAR observed that since the service performed by the Appellant viz.-photography service is in relation to the performance on goods, in this case the diamonds, which are being made available to the supplier of the service for the performance of the said service, the place of the supply of service will be the location where the service is actually performed. Since the goods are made available to the supplier of the service in the state of Maharashtra, the place of supply in the present case will be Maharashtra - Further, since the location of the supplier of the service is in Maharashtra and the place of the supply of the service is also in Maharashtra, it was held by the AAR that the said supply of the Appellant will be treated as an Intra - State supply in accordance with the provision of Section 8(2) of the IGST Act, 2017. The AAR, while answering the second question asked by the Appellant, wherein the Appellant had asked whether the supply made by them will be a zero rated supply i.e. export within the meaning of Section 2(23) read with Section 2 (6) of the IGST Act, 2017, held that the supply of the Appellant will not qualify as export of service, as the two of the 5 conditions prescribed for the export of a services, as laid out in Section 2(6) of the IGST Act, 2017, are not being satisfied by the Appellant in as much as (i) the place of the supply of the service is not outside India and also, (ii) the supplier of service and the recipient of service are merely establishments of a distinct person in accordance with explanation 1 in section 8 of IGST Act. Whether we have jurisdiction to decide the nature of the levy i.e. CGST and SGST or IGST, to be imposed on any supply of goods or services or both or not? - HELD THAT:- The question on determination of the place of supply has not been covered in the set of questions, on which the advance ruling can be given. Therefore, we cannot give any opinion or verdict on the question which involve the determination of the place of supply of the goods or services or both. Determination of place of supply - HELD THAT:- Since, we do not have jurisdiction to determine the place of supply of services or goods or both, no ruling on this particular question can be passed by the Advance Ruling Authority. This rationale also holds true in case of the second question asked by the Appellant i.e. whether the said supply could be treated as export within the meaning of Section 2(23) read with Section 2(6) of the IGST Act, 2017. Since the questions asked by the Appellant are not covered under our scope and jurisdiction, no ruling can be passed in the instant matter.

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• 2019 (11) TMI 475
  Scope of Advance Ruling - Jurisdiction to decide the case - Taxability - Export of services or not - intermediary services - Commission received by the Applicant in convertible Foreign Exchange - zero rated tax or not - Whether the Commission received by the Applicant in convertible Foreign Exchange for rendering services as an Intermediary between an exporter abroad and an Indian importer of an Equipment; is an export of services falling under section 2(6) outside the purview of section 13 (8) (b), attracting zero rated tax under section 16 (1) (a) of the Integrated Goods and Services Tax Act, 2017? - Place of supply of services - challenge to AAAR decision. HELD THAT:- The appellant (MI) is providing services to its principal Carl Zeiss GmbH in Germany in terms of procuring orders from customers in India for procurement of advanced laboratory instruments from its principal. The floor price is fixed by the principal and MI negotiates with customers in India for terms of supply and consideration / price above the floor price, for which they receive the commission from principal. After completion of the negotiations, the customers in India arranges for the foreign remittance for imports, and directly place the order to the foreign principal, who in turns directly supplies the instruments (goods) to the Indian customers. In most of the cases where the Indian Customers are entitled for the discounts, in kind ( discount in kind , like Free of cost items , such as: a TV set, a Computer or a Camera etc.) with respect to the material purchased by them, are to be provided by the appellant. The Authority for Advance Ruling while deciding the issue relied upon the tern intermediary , and held that the appellant is an intermediary because they are acting as a broker and the facilitating the process of sale of materials by their foreign principals to the Indian parties because they locate the customer, negotiate the prices and ensure the sale, they also provide for discounts to the customers out of the commission received by them. The advance ruling authority further held since the appellant (the service provider) is located in India and service recipient are located outside India, section 13 (8) (b) of the IGST Act would be applicable in determining the place of supply of such service in the instant case - The contention of the appellant is that though he has been covered under term intermediary the services provided are not intermediary services has been rejected by the Authority for Advance Ruling for reason being not tenable. The authority for Advance Ruling after rejection of the appellant s claim of export of service held it as an interstate supply as per provisions of section 7 (5) (c) of the IGST Act and eligible to levy of IGST. The Advance Ruling authority decided that applicant is an intermediary and the place of supply of Intermediary Services , as per Section 13(8)(b) being the location of the supplier of services, the said intermediary services cannot be treated as export of services under the provisions of the GST Act. Further, the Advance Ruling Authority held that in case the intermediary services are provided to the recipient located outside India, the inter-state provisions as contained under section 7(5)(c) shall be applicable and hence IGST is payable under such transaction. But from the questions posed it is evident that the appellant already holds himself out as an intermediary and has only posed the question as to whether the services given by him qualify to be export of services falling under Section 2(6) or whether is a intra-state supply . Scope of Advance Ruling - Jurisdiction to decide the case - HELD THAT:- The question on determination of the place of supply has not been covered in the above set of questions, on which the advance ruling can be given - Therefore, we cannot give any opinion or verdict on the question which involve the determination of the place of supply of the goods or services or both. As per the law we do not have jurisdiction to determine the place of supply of services or goods or both, and accordingly no ruling on this particular question can be passed by the Advance Ruling Authority. This rationale also holds true in case of the second question asked by the Appellant i.e. whether the said supply could be treated as intra-state supply under section 8 (1) of the IGST Act read with section 2(65) of the CGST Act.

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• 2019 (11) TMI 474
  Detention of goods alongwith vehicle - detention on the ground that the GSTR 3B returns had not been filed from June 2018 and GSTR I had not been filed from March 2019 - HELD THAT:- The reasons stated in Ext.P1 order cannot be a justification for detaining the goods in terms of Section 129 of the KGST Act. Similarly, the said ground cannot form the basis of Ext.P4 notice proposing confiscation of the goods detained inasmuch as the ingredients of the offence covered by Section 130 are not satisfied in the instant case. The writ petition by quashing Exts.P1 and P4 and directing the 1st respondent to forthwith release the goods and the vehicle to the petitioner on the petitioner producing a copy of the judgment before the said respondent - petition disposed off.

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• 2019 (11) TMI 473
  Detention of goods and vehicle - petitioner would submit that there is no mandate under section 129 of the GST Act for detaining goods that were covered by a valid e-Way Bill merely because the driver of the vehicle took an alternate route to reach the same destination - HELD THAT:- There cannot be a mechanical detention of a consignment solely because the driver of the vehicle had opted for a different route, other than what is normally taken by other transporters of goods covered by similar e-Way bills. No doubt, if the vehicle is detained at a place that is located on an entirely different stretch of road and plying in a direction other than towards the destination shown in the e- Way bill, then a presumption could be drawn that there was an attempt at transportation contrary to the e-Way Bill. This writ petition is allowed by directing the 1st respondent to forthwith release the goods and consignment to the petitioner - petition allowed.

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• 2019 (11) TMI 472
  Rectification of mistake - error apparent on the record or not - it was claimed that the inadvertent figures entered by their Accountant in the columns of output tax as well as input tax credit as also taxable supply filled up in GSTR-3B - applicability of provisions of Section 39 sub Section 9 of CGST Act 2017 - HELD THAT:- Before any direction is issued for reprograming GST Portal, we would like to have the official response of the respondents. However, in the meanwhile, Assistant Commissioner, CCO, GST Zone, Panchkula/respondent No.5 is directed to verify the corrected claims as projected in the manual annual returns placed at Annexure P-21 read with E-mail (Annexure P-10) in juxtaposition with the inadvertent mistake already made in the GSTR-1 and GSTR-3B for the months concerned in the assessment year 2017-18 - After a thorough evaluation, self speaking and reasoned report be submitted on or before the next date in the shape of an affidavit. Matter Adjourned to 10.12.2019.

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• 2019 (11) TMI 471
  Filing of declaration in form GST Tran 1 - transitional credit - vires of Rule 117(1) (1A) of the Central Goods and Service Tax Rules, 2017 - time limitation - CBIC Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT:- The nature of reliefs sought in the present petition and the facts disclosed herein is fully covered by the decision of this Court in M/S. BLUE BIRD PURE PVT. LTD. VERSUS UNION OF INDIA ORS. [ 2019 (7) TMI 1102 - DELHI HIGH COURT] wherein the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified TRAN-1 electronically or accept the same manually. The factual position in the present case is not any different and thus, the present petition is allowed and the respondents are directed to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 20.11.2019 - petition disposed off.

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• 2019 (11) TMI 470
  Detention of goods alongwith vehicle - non-application of mind - challenge against Ext.P9 order is mainly on the contention that, while in response to the notice received by the petitioner, he had clearly indicated that a substantial part of the turnover pertained to goods that were meant for export that were not liable to tax under the GST Act, the said contention was not examined by the respondent while passing Ext.P9 order - HELD THAT:- From a perusal of Ext.P9 that the contention of the petitioner regarding export of goods was not considered by the respondent in Ext.P9, although the said contention was raised in Ext.P7 reply submitted by the petitioner - In my view, the said non-consideration vitiates Ext.P9 order. The Ext.P9 order is quashed and the respondent is directed to pass fresh orders in lieu thereof, after hearing the petitioner and after specifically referring to the contentions in Ext.P7 reply submitted by the petitioner - petition disposed off.

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• 2019 (11) TMI 469
  Valuation - inclusion of component of GST in the invoices - contracts relating to execution of public projects - HELD THAT:- It is not in dispute that the liability to pay GST has come into force after 01.07.2017 - In light of statutory liability, the representation of the petitioner to permit him to include the GST component in the invoice that he has raised for the works executed after 01.07.2017 is to be considered appropriately by the respondent - Authority in light of observations made above and in accordance with law. Petition disposed off.

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• 2019 (11) TMI 468
  Anti-profiteering - supply of the book titled Ragas in Hindustani Music: Conceptual Aspects (without cassette) - benefit of reduction in the GST rate not passed on - violation of provisions of Section 171 of the CGST Act, 2017 - quantum of profiteering - HELD THAT:- The allegation that the Respondent had not passed on the benefit of reduction in the tax rate is not sustainable - Accordingly, the application filed by the Applicant requesting action against the Respondent for alleged violation of the provisions of the Section 171 of the CGST Act is not maintainable. Application dismissed.

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• 2019 (11) TMI 467
  Profiteering - supply of flats in the Expressway Towers project of the Respondent in Gurugram - benefit of Input Tax Credit (ITC) by way of commensurate reduction in the prices not passed on - contravention of provisions of section 171 of CGST Act - penalty - HELD THAT:- Since the present investigation is only up to 31.08.2018 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondents. In case this benefit is not passed on the Applicants or any other buyer shall be at liberty to approach the State Screening Committee Haryana for initiating fresh proceedings under Section 171 of the above Act against the Respondents. The concerned CGST or SGST Commissioner shall take necessary action to ensure that the benefit of additional ITC is passed on to the eligible house buyers in future. Penalty - HELD THAT:- It is evident from the above that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him under the above Policy in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus realized more price from them than he was entitled to collect and has also compelled his consumers/buyers to pay more GST than that they were required to pay and therefore, he is liable for imposition of penalty - Accordingly, a Show Cause Notice be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with rule 133(3)(d) of the CGST Rules, 2017 should not be impose on him.

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• 2019 (11) TMI 466
  Profiteering - purchase of Flat No in his project One Park Avenue , Patlipada Junction, Ghodbundar Road, Thane, Maharashtra-400607 - benefit of Input Tax Credit (ITC) availed by him by way of commensurate reduction in the price of the above flat - contravention of provisions of section 171 of CGST Act - HELD THAT:- The Applicant is not entitled to the benefit of additional ITC as his allotment has been cancelled by the Respondent on his own request. Therefore, the relationship of recipient and supplier stands terminated between the Applicant and the Respondent w.e.f. 24.11.2018 and therefore, he is not entitled to the benefit of additional ITC as per the provisions of Section 171 of the CGST Act, 2017 - He has further not paid the amount which he was required to pay in the pre and post GST period as per the terms of his allotment to become eligible for passing on of the benefit of ITC and therefore also he is not entitled to the above benefit. This Authority under Rule 133 (3) (a) of the CGST Rules, 2017 orders that the Respondent shall reduce the prices to be realized from the buyers of the flats commensurate with the benefit of ITC received by him - Since the present investigation is only up to 30.09.2018 any benefit of ITC which accrues subsequently shall also be passed on to the buyers by the Respondent. Penalty - HELD THAT:- It is also evident from the above narration of the facts that the Respondent has denied benefit of ITC to the buyers of the flats being constructed by him in his One Park Avenue project in contravention of the provisions of Section 171 (1) of the CGST Act, 2017 and has thus resorted to profiteering. Hence, he has committed an offence under Section 171 (3A) of the CGST Act, 2017 and therefore, he is apparently liable for imposition of penalty under the provisions - a SCN be issued to him directing him to explain why the penalty prescribed under Section 171 (3A) of the above Act read with Rule 133 (3) (d) of the CGST Rules, 2017 should not be imposed on him.

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• Income Tax

• 2019 (11) TMI 465
  Disallowance of legal expenses - Allowable revenue expenses u/s 37 - HELD THAT:- Legal expenses incurred by the appellant company was not for the purpose of carrying out its business and, therefore, was not allowable as expenditure under Section 37 . It held that these legal expenses were incurred so as to protect the Directors / Shareholders of the company in respect of the complaints filed against them in their individual capacity and not in respect of their conduct in the course of carrying on the business of the appellant company. In fact, the complaint filed before the Chief Metropolitan Magistrate Court has been made against the Directors / Shareholders in individual capacities. The entire dispute between the various group of shareholders was only to acquire the management and control of the appellant company and, therefore, these expenses are not expenses incurred for and on behalf of the company but expenses incurred for the Directors / Shareholders for their individual benefit so as to retain control and management of the appellant company. Tribunal has observed the fact that legal proceedings were also commenced against its Auditors / Company Secretary were only on off-shoot of the inter se dispute between different shareholders of the appellant company. Assessing Officer as well as the CIT(A) recorded the fact that the details of the nature of the legal expenses was not forthcoming from the appellant. In the aforesaid facts, the view taken by the Authorities under the Act including the Tribunal, is a possible view on facts and cannot be said to be perverse. In these circumstances, the questions as proposed in all the four appeals do not give rise to any substantial question of law. Thus, not entertained.

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• 2019 (11) TMI 464
  Reopening of assessment - assessment reopened on the basis of change of opinion - one time settlement by the Petitioner with its bankers - HELD THAT:- We find that both the CIT(A) and the Tribunal have found on facts that during the regular assessment proceedings, the Assessing Officer had occasion to consider the one time settlement by the Petitioner with its bankers. It found that during the scrutiny assessment proceedings, queries were raised and the Petitioner filed a detailed response on 11th November, 2008, giving complete details to Assessing Officer of the one time settlement and manner in which it was treated. This finding of fact is not shown to be perverse in any manner. The re-opening notice is not based on any fresh tangible material but proceeds on the material already on record with the Assessing Officer and also considered before passing the order dated 24th November, 2008 under Section 143(3) of the Act. Assessing Officer restricts himself only to deal with those issues where he does not agree with the Assessee s submission and gives reasons for it. Otherwise, it would be impossible to complete all the assessments within time limit available. Thus, the Court held that once a query is raised during Assessment Proceedings and the Assessee has responded to the query, to the satisfaction of the Assessing Officer, then there has been due consideration of the same. Therefore, issuing of the re-opening notice on the same facts which were considered earlier, clearly amounts to change of opinion. Thus, without jurisdiction. - Decided against revenue.

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• 2019 (11) TMI 463
  Condonation of delay - delay in filing the petition for refund of amount - according to the petitioner, his mother was undergoing medical treatment for uncontrolled hypertension and cardio myopathy for a long period and she died on 18.05.2016 and thereafter, he submitted the application, for return of refund of money - HELD THAT:- In the present case, the authority has failed to pass such orders, within the specified period and only on the complaint made by the petitioner, the order of rejection came to be passed on technical grounds rejecting refund of the amount, instead of deciding the issue on merits. The reason for not condoning delay is not supported by any material and it may not cause any genuine hardship. Insofar as the authorities are concerned, the amount of Rs. 1,89,153/- (Rupees One Lakh and Eighty Nine Thousand and One Hundred and Fifty Three only) may be small, on the other hand, it is a big amount, in the view of point of common man. The petitioner has stated that he is precluded from submitting the documents in respect of the medical treatment taken for his mother. Insofar as the petition for condoning the delay is concerned, when reasons are adduced, the authorities should try to consider the same and deal with the case on merits, instead of disposing of the matter on technical grounds. If at all the petitioner has to be refunded as per the claim made based on the documents, the authorities should refund the amount and it cannot be rejected on technicalities. It is well settled law by the Hon ble Supreme Court that instead of rejecting the matters on technicalities, the Courts shall do substantive justice by deciding the case on merits. In such view of that matter, the respondent ought to have condoned the delay and decided the matter on merits. Impugned order passed by the respondent dated 04.06.2019 is set aside and the matter is remanded back to the respondent for fresh consideration

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• 2019 (11) TMI 462
  Gain on sale of land - business income or long term capital gain - HELD THAT:- `Special provision for full value of consideration for transfer of assets other than capital assets in certain cases as contained in section 43CA of the Act, which has been heavily relied by the AO. Sub-section (1) provides that : `Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer. It is manifest from the above provision that it is a deeming provision in so far as the full value of consideration received as a result of transfer of some property, which is held otherwise than a capital asset, is concerned. It is not a charging provision in itself nor does the deeming fiction extends to `transfer . Unless the charge is created first under a specific provision, the deeming provision for computation is not activated. The ld. DR has not drawn our attention towards any provision of the Act, which in the given circumstances, deems `transfer of land so as to attract chargeability. Section 43CA of the Act can be magnetized only when some building or land etc., held otherwise than as a capital asset, is transferred. In case the property itself is not transferred, the question of deeming the stamp value as the full value of consideration does not arise, which is only a stage posterior to the `transfer of the property. Authorities below were not justified in making or confirming the addition in the hands of the assessee under the head `Capital gains as well as `Profits and gains from business or profession by treating it as a case of transfer of land to M/s Fulzan Properties in as much as the land itself was not transferred by the assessee during the year under consideration.

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• 2019 (11) TMI 461
  Claim u/s. 10B - alternate claim for allowing deduction u/s.10A - HELD THAT:- DRP s direction to the AO for carrying out a fresh examination of the claim of the assessee u/s.10A of the Act is in violation of the clear mandate of the provisions as discussed and hence cannot be countenanced. On our vacating such a direction, the position which would emerge is that the denial of the assessee s claim for deduction u/s 10B would attain finality but the alternate claim for allowing deduction u/s.10A, despite the DRP finding some merit in the same, would get jeopardised at the threshold even without verification, thereby causing irreparable prejudice to the assessee. It is pertinent to note that the ld. DRP itself found some merit in the contention of the assessee on the eligibility of claim u/s.10A, for which the relevant discussion has been made in Para Nos. 3.19 to 3.22. Albeit the DRP is not empowered to direct the AO to entertain and examine such a claim, but there are no fetters on its own powers to undertake such an exercise itself for ascertaining if the claim of the assessee is legally tenable. Under the given circumstances, we set-aside the impugned order and remit the matter to the DRP for adjudicating the issue itself without remitting the matter to the file of the AO.

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• 2019 (11) TMI 460
  Exemption u/s. 11 - Valid registration U/s. 12A - HELD THAT:- There is nothing on record to suggest that the registration granted U/s. 12A of the Act in the case of the assessee is revoked the assessee is entitled to the benefit of section 11 of the Act on compliance of the other relevant provisions of the Act. Further, on perusing the objects of the assessee, as observed from the order of the Ld. AO extracted hereinabove, it is apparent that the activities relate to preservation of environment, forests and wildlife. The commercial activities mentioned in the Memorandum of Association are only ancillary objects supporting the main objects of the assessee. Therefore, we are of the considered view that the assessee s objects fall under the 6th limb of section 2(15) hence in the case of the assessee the proviso to Section 2(15) of the Act is not applicable. On examining the revenue received by the assessee amounting to Rs. 3,70,59,197/- as observed in the Order of the Ld.CIT(A) which is extracted hereinabove, we are of the considered view that they are only residual income arising from the main objects / ancillary objects of the assessee-company. For the above stated reasons, we do not find the order of the Ld. AO justifiable for not granting the benefit of exemption U/s.11 of the Act and treating the amount as the taxable income of the assessee which is upheld by the Ld. CIT (A). - Decided in favour of assessee.

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• 2019 (11) TMI 459
  Disallowance made in respect of remittance of employees contribution towards EPF/ESI - Addition u/s 36(1)(va) r.w.s. 2(24)(x) - HELD THAT:- Tribunal has rightly relied on the decision of the Supreme Court in the case of CIT V. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] whereby, the Supreme Court held that omission of second proviso to Section 43B and amendment to first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively, i.e., with effect from 1.4.1988 i.e., the date of insertion of first proviso. The Delhi High Court in the case of CIT V. Aimil Ltd. [2009 (12) TMI 38 - DELHI HIGH COURT ] held that if the assessee had deposited employee s contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003. Appeal filed by the Assessee is allowed.

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• 2019 (11) TMI 458
  Revision u/s 263 - estimation of profit - accommodation entry provider - CIT(A) for the A.Yrs 2006-07 and 2007-08 vide its order dated 25/01/2017 had recorded a categorical finding that assessee is indeed an accommodation entry provider and had processed to estimate net profit i.e. commission income at 0.15% of the total turnover as against 1% adopted by the ld. AO - HELD THAT:- We hold that assessee herein is an accommodation entry provider. We find that the Hon ble Delhi High Court decision relied upon by the ld. CIT in the case of CIT vs. D.K.Garg [2017 (8) TMI 450 - DELHI HIGH COURT was in the case of an accommodation entry provider wherein the assessee therein had requested for adoption of peak credit theory in a situation where he could not explain the source of various deposits made in the bank account. In that context, the Hon ble Delhi High Court rejected the peak credit theory and directed to tax the total deposits as unexplained cash credit u/s.68 of the Act. We hold that such decision is factually distinguishable with the instant case. It is not in dispute that in the instant case, the Director of the assessee company had indeed given statement before the Maharashtra Sales Tax authorities during the course of sales tax search and had also categorically stated that it is only engaged in providing accommodation entries and no actual purchase and sale activities were carried out by the assessee company. It is well settled that what is to be taxed ultimately is only the real income of the assessee company. Considering the totality of facts and circumstances of the instant case and considering the behavior of the assessee in earlier and subsequent years which had also been approved by the ld. CIT(A) in certain years, we hold that commission income alone could be assessed as the real income of the assessee and not the value of transactions. Appeal of the assessee is allowed.

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• 2019 (11) TMI 457
  Addition u/s 68 - presumption u/s 292C - unexplained advance - Incriminating material found during the search - HELD THAT:- It is not in dispute that the assessee surrendered a sum of Rs. 30.00 lacs on account of incriminating material found during the search, therefore, the transaction of loan between two independent parties even if through the service of the assessee being broker cannot be thrust upon the assessee for want of taxing the same in the hands of the actual parties to the transaction. The reasoning of the A.O. and the ld. CIT(A) for making the addition is that if it is not assessed in the hands of the assessee then it would be a revenue loss as the complete particulars of Shri Naresh Kumar Maheshwari were not furnished by the assessee and therefore, the assessee is responsible for the loss of the revenue and liable to pay tax. There is no provision in the Act to deem such income which is otherwise not an income of the assessee. The documents in question clearly manifest the nature of the transaction and the parties to the transaction. Particulars of one of the parties were already available on the seized material and the revenue has already attempted to tax the said income in the hands of Shri Roshal Lal Sancheti but the ld. CIT(A) has deleted the said addition on the ground that a loan cannot be assessed to tax except it is unexplained credit U/s 68 of the Act. Therefore, the assessee being a broker cannot be held liable to pay tax on an income which does not arise or belong to the assessee. At the most, the income for providing the service as a broker can be taxed in the hands of the assessee for the transaction of loan which the assessee has already offered to tax as part of the surrendered income. Since the revenue failed to assess the said amount in the hands of the parties to the transaction, therefore, it was attempted to tax in the hands of the assessee on the basis of presumptive provisions of Section 292C of the Act. Once the seized documents are free from any ambiguity and the transaction is between the two independent parties then in such a situation, the said document reveals the transaction of loan cannot be presumed to be the document belongs to the assessee for the purpose of assessing the income being unexplained loan.- Appeal of the assessee is allowed.

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• 2019 (11) TMI 456
  Stay of demand - HELD THAT:- AR has tried to argue the case on merits but, we would not like state that we are not going into merits at this stage and stay petitions are being decided on the basis of prima-facie case made out by the Ld. AR. We note that the bank accounts of the assessee stood attached by the department. The assessee has also deposited Rs. 25 Lacs against the outstanding demand of AY 2014-15 after passing the assessment order. Since the project of the assesse is substantially incomplete and bank accounts of the assessee are attached, the balance of convenience also weighs in favour of the assessee . We therefore, consider it the reasonable and proper to grant stay to the assessee subject to the condition that assessee would deposit a sum of Rs. 25 Lacs on or before 25/05/2019 against the outstanding demand of AY 2014-15 and the case of the assessee is also fixed for hearing on out of turn basis on 03/06/2019. The assessee is directed not to take adjournment without any reasonable cause failing which the stay would be subject to review by the bench hearing the case. The issue of notice is dispensed with as both the parties are informed in the open court.

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• Customs

• 2019 (11) TMI 455
  Jurisdiction - power of Additional Director General, the Zonal unit to issue SCN - whether the Additional Director General, the Zonal unit, Kolkata of the Directorate of Revenue Intelligence had the authority and the power to issue the show-cause notice dated 2nd December, 2017? HELD THAT:- Section 4 of the said Act provides for appointment of any person to discharge the functions of, inter alia, the Commissioner of Customs. The breadth of this section is very wide. Considering the exigency, the government has the power to appoint, inter alia, any person as the Commissioner of Customs. This section provides a parallel and separate mode of recruitment distinct to the procedure mentioned in the said rules under Article 309, to the post of Commissioner. The said section laid down that any person could be appointed as Commissioner of Customs, not confining itself to appointments of officers of Customs as Commissioner or Principal Commissioner. Had that been so there could possibly been a source of conflict between the said sections of the Act and the Article 309 rules. For both the above reasons, the recruitment rules for recruitment, promotion and selection in the said 2016 rules do not apply, to the selection under Sections 4 and 6 of the said Act. In any event, there is in my opinion no conflict between the said Act and the rules. There is a well established presumption that a government or an officer exercising statutory authority is acting regularly. The onus is on the person challenging his authority to establish it. The respondent writ petitioners have miserably failed to even make out a semblance of a case. The impugned judgment and order dated 11th July, 2018 is set aside - Appeal allowed.

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• 2019 (11) TMI 454
  Application for settlement - Section 127B of the Customs Act, 1962 - SCN was issued on 07.02.2013 prior to listing of the application in terms of Section 127C(1) of the Act for admission/hearing thereof, raising various queries for response by the petitioner - whether there was any case pending in the Appellate Tribunal or Court which would act as a bar to maintainability of the application in terms of the second proviso to Section 127B? HELD THAT:- The Bench in a similar issue IN RE: SHRI AGARWAL TRADING COMPANY [ 2001 (2) TMI 481 - SETTLEMENT COMMISSION, MUMBAI] has proceeded to entertain the application based on the interpretation that the word case utilised in the proviso should assume the same meaning as the definition of the word under the Customs Act 1962 which means any proceeding under this act or any other act for the levy, assessment and collection of customs duty as contra distinguished from proceedings for prosecution. Further, the provisions of Section 127H of the Act empower the Commission to grant immunity to prosecution under either the Customs Act, the IPC or any other Central Act, in such cases where prosecution has not been instituted before the date of receipt of the Application for settlement by the Commission. Had the commission issued notice to the petitioner prior to hearing the matter, it would perhaps have been persuaded to adopt a reasoning similar to that of the Coordinate Bench - However this has not been done. Petition allowed.

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• 2019 (11) TMI 453
  Imposition of penalty u/s 112(a) of the Customs Act, 1962 - aiding and abetting the importer to undervalue the imported furniture - appellant engaged in the business of hotel management consultancy - reliance placed upon the statement of the appellant as well as the statement given by the main importer Shri HR Ravichandra - HELD THAT:- Commissioner has wrongly observed in the impugned order that the appellant has admitted that he has helped the importer Gardenia Comforts in undervaluation of the furniture. Commissioner has misread the evidence on record and has come to the conclusion on the basis of the involvement of the appellant in other cases wherein the appellant has confessed his guilty and has also approached the Settlement Commission along with other importers and paid the penalty of Rs. 10,000/- imposed by the Settlement Commission . but as far as, this case is concerned, there is no evidence on record to establish that the appellant has helped the importer in undervaluation of the furniture imported by them. Therefore, the Revenue has failed to establish the charge against the appellant on merits. The role of appellant has not been established in aiding and abetting the importer to undervalue the imported furniture. Therefore, in the facts and circumstances and the evidence on record, imposition of penalty on the appellant is not tenable in law and therefore, the penalty imposed is set aside by allowing the appeal of the appellant. Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 452
  Enhancement of penalty - Section 112 (a) of the Customs Act, 1962 - import of different type of Catheters - Drugs or not - imoprt of Catheter through Trivandrum Airport - designated airport or not - N/N. 1468 E dated 06.10.2005 - Whether there was any mis-declaration of description of goods in the bills of entry or not? - HELD THAT:- The appellant has been regularly importing the Catheter from the Trivandrum Airport during the period 23.11.2005 to 17.03.2011 and has been paying Customs Duty and no objection was raised by the Department during these six years regarding any violation made by the appellant. Further, the N/N. 146 E dated 06.10.2005 issued by the Department of Health was not in the knowledge of the appellant as well as the Customs officials and no objection was raised against the appellant. Subsequently, after the expiry of six years, a SCN dated 06.08.2011 was issued proposing confiscation of the goods imported under 111 Bills of Entry mentioned therein and also proposing penalty under Section 112 and 117 of the Act - the Original Authority after considering the submissions of the appellant has observed that there was no mis-declaration on the part of the appellant while filing the Bill of Entry and that finding has not been disturbed even by the Commissioner (A). Extended period of Limitation - HELD THAT:- The Department issued another SCN No.21/2010 dated 23.07.2010 demanding short payment of duty on certain items but in the said SCN also, no allegation was made that the appellant is not entitled to import through Trivandrum Airport - Once the Customs authorities has come to the conclusion that there is no mis-declaration and there is no suppression of facts by the appellant in filing the Bill of Entry which was accepted by the Department, then invoking the extended period of limitation is not justified because there was no intention to evade payment of duty. Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 451
  Classification of goods - Antenna for base station imported by the Respondent used in mobile telecommunication network - Respondents during the period May 2017 to August 2017 imported Antenna for Base Transmission Station(BTS) declared the same as parts classifying it under CTSH 85177090 of Customs Tariff Act, 1975; alleging that the said imported goods are classifiable under CSH 85176290 - Board s Circular No.01/2018 dt.15.1.2018 - Refund of Customs Duty - duty paid under protest. Whether the antenna for base station would be considered as a machine and accordingly classifiable under CSH 85176290 as claimed by the Revenue or as parts classifiable under CSH 85177090, claimed by the Respondent? HELD THAT:- Prior to 2007, the heading 8517 was consisting of Apparatus i.e. telephone instruments only for line telephony and not for radio telephony; the transmission apparatus for radio telephony was covered under heading 8525 and reception apparatus for radio telephony was covered under heading 85.27; the antenna for the apparatus for radio telephony under heading 8525 8527 was specifically covered as parts under 8527 of CTA,1975. After 01.01.2007 the instruments for radio telephony/mobile network, Apparatus for reception transmission, and parts have been placed under one heading i.e 8517 of CTA, 1975. Revenue continued classification of Antenna for mobile network as parts accepting its classification under 85177090 post 01.01.2007. A simple analysis of heading 8517 effective from 01.01.2007, it is clear that the instruments/telephone sets for cellular networks/wireless net works, apparatus both for transmission and reception of voice, images or other data in a wired or wireless network, and parts classified under the said heading broadly placed under three categories of single dash(-). First single dash(-) for telephone sets, including telephones for cellular network or for other wireless network; second single dash (-) for other apparatus for transmission or reception of voice, images, or other data including apparatus for communication in wired or wireless network (such as local or wide area network); and the third single dash(-), for parts . The base station is classified under the second category under CSH 85176100, to which neither side disputes. The Revenue s argument is based on the clarification issued by the Board on 01.01.2018 that Antenna is an essential device of a wireless communication system; the information can travel only in the electro-magnetic wave form. The antenna radiates the information in the form of electro-magnetic wave in an efficient and desired manner to the base station, where the information is picked up by the receiving antenna and passed on to the receiver via transmission line. The signal is de-modulated and the original message is then recovered at the receiver. Thus, the wireless communication gets established. It is the contention of the department that since the antenna can generate electro-magnetic wave from current and voltages and which can convert electromagnetic wave to current and voltages with these waves impinge on it, therefore, it can be considered as a machine, which independently receives and transmits electro-magnetic waves. In the present case, the manufacturer of Antenna as well as the chartered engineer s certificate, in clear terms clarified that the Antenna in question transmits and receives only signals and not performing any other function like conversion or regeneration of voice, images or other data signals and switching/routing of signals. Therefore, the Antenna stand alone cannot be considered as a machine , attracting classification under Heading 8517.62. Consequently, the observation of the Department in the circular dt.15.01.2018 that the Antenna itself is a complete device and has capability of functioning on its own of conversion of electrical signals into electro-magnetic waves and vice versa in a wireless communication system cannot be applied to the present goods as it would be complete only when connected to a base station. Revenue s interpretation of the said clause(a) in the present case is that in the event if the goods are not falling under any of the sub heading of heading 8517, then only it will be classifiable as parts , is incorrect. Clause b of the said Note 2 indicates that other parts , by implication which are not goods, if suitable for use solely or principally with a particular kind of machine of the same heading are to be classified with the machines of that kind or the headings mentioned under the said clause b as appropriate. The correct classification of the Antenna for base station is under Sub-heading 85177090 as parts - Since, the main issue of classification has been addressed, the other ancillary/alternative submission/issues on the eligibility of various exemption notifications issued in support of the classification of the said goods, becomes more of academic, hence not analysed. Appeal dismissed - decided against Revenue.

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• 2019 (11) TMI 450
  Levy of Additional Duty of Customs - Section 116 of Finance Act, 1999 - HELD THAT:- Very identical issue has been considered by this Tribunal in the case of M/S ATLANTIC SHIPPING PVT. LTD VERSUS C.C. JAMNAGAR (PREV) [ 2018 (9) TMI 458 - CESTAT AHMEDABAD] where it was held that the benefit of Exemption from additional duty of customs levied under Sub Section (1) of section 116 of Finance Act, 1999 has to be extended to the goods which are entitled to exemption under Notification 94/96-Customs. Tribunal being the identical issue involved the Additional Duty of Customs in the appellant s case is exempted in terms of the Sub Section (1) of the Section 116 of the Finance Act, 1999. Appeal allowed - decided in favor of appellant.

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• Insolvency & Bankruptcy

• 2019 (11) TMI 449
  Whether the finding that the financial creditor was discriminated against, leading the NCLAT to modify the adjudicating authority s directions, and consequently imposing greater financial burdens on the resolution applicant, is justified? HELD THAT:- Section 30 lays out the duties of the resolution professional and the various steps that she or he has to take, as well as the considerations that are to weigh, in examining a resolution plan. The principle of fairness engrafted in the provision is that the plan should make a provision for repayment of debts of operational creditors having regard to the value, which shall not be less than what is prescribed by the Board (i.e. the Insolvency Board), repayable in the event of liquidation, spelt out in Section 53. Section 30(3) requires the resolution professional to present the resolution plan to the committee of creditors and Section 30(4) stipulates that approval shall be by a vote not less than 75% of the voting share of the financial creditors. Given that the resolution process began well before the amended regulation came into force (in fact, January, 2017) and the resolution plan was prepared and approved before that event, the wide observations of the NCLAT, requiring the appellant to match the payout (offered to other financial creditors) to Hero, was not justified. The court notices that the liquidation value of the corporate debtor was ascertained at 36 Rs. crores. Against the said amount, the appellant offered Rs.54 crores. The plan was approved and, except the objections of the dissenting creditor (i.e Hero), the plan has attained finality. The order of the NCLT is hereby restored - Appeal allowed.

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• 2019 (11) TMI 448
  Jurisdiction - Dispensation of production of certified copy of the Order - petitioner submits that the National Company Law Tribunal has jurisdiction only in respect of debts and can entertain petitions only where debt is admittedly payable - HELD THAT:- Admittedly, the respondent herein filed petition before the National Company Law Tribunal, Bengaluru, for damages and hence it has no jurisdiction to adjudicate the matter. Inspite of the same, the National Company Law Tribunal has admitted the petition and appointed a resolution professional. In pursuance of the said Order, the professional will take charge of the Company and in that event, the very purpose of filing the present writ petition will be frustrated. Relist this matter on 31.10.2019.

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• 2019 (11) TMI 447
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of loan - Dates of default are 20.10.2018 and 16.01.2019. The Petition was filed on 03.05.2019 - amount is due and payable by the Corporate Debtor to the Financial Creditor - HELD THAT:- The Hon ble Supreme Court in the matter of Innoventive Industries Limited V. ICICI Bank Anr. [ 2017 (9) TMI 58 - SUPREME COURT ], has held that the provisions of section 7 become applicable as soon as financial debt is established and there is an existence of a default. The Hon ble court hadobserved that the moment the Adjudicating Authority is satisfied that a default inrepayment of debt had occurred, the process of insolvency is to be triggered unless the application is incomplete. This Petition reveals that there is a debt as defined in section 3(11) of IBC; there is a default within the meaning of section 3(12) of IBC; the application of the Financial Creditor is complete; an amount of more than Rupees One Lakh is due and payable and in default and no disciplinary proceedings are pending against the proposed resolution professional. Therefore, this petition deserves to be admitted. Petition admitted - moratorium declared.

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• 2019 (11) TMI 446
  Maintainability of application - initiation of CIRP - Corporate Debtor has defaulted in paying an amount - existence of debt and default or not - Section 9 of I B Code - HELD THAT:- This Bench is of the view that the Operational Creditor has proved existence of debt and default, therefore, we hereby admit this company application looking at the consent given by Mr. P. Sriram with a direction to the Operational Creditor to pay remuneration to the IRP and his expenses until the constitution of CoC . Application admitted - moratorium declared.

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• 2019 (11) TMI 445
  Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment of loan - Section 7 of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The banks give loans out of the money collected from depositors, share holders etc. The notional loss as pleaded by the Respondent is prima facie not tenable. The Ld. Counsel for the Petitioner has stated that credit facility of Rs. 2 Crore was not disbursed as the Respondent failed to fulfil the Terms of the sanction. Keeping in view the circumstances of the case, the Application of the Petitioner is admitted. Petition admitted - moratorium declared.

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• 2019 (11) TMI 444
  Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - existence of dispute - HELD THAT:- Since the Corporate Debtor had availed the loan facilities from the Financial Creditor and had executed the Loan Agreement and all the Security documents in favour of the Financial Creditor and committed a default in repayment and ultimately was declared a Non-Performing Assets, we are fully satisfied and have no option but to admit the application and initiate Corporate Insolvency Resolution Process under section 7 of the Insolvency Bankruptcy Code read with Rule 4 against the Corporate Debtor. Application admitted - moratorium declared.

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• 2019 (11) TMI 443
  Maintainability of application - initiation of CIRP - auction - CIRP was initiated fradulently in collusion with operational creditor or petitioner has perfected its right over property of the corporate debtor - Section 60(5) of the of Insolvency and Bankruptcy Code, 2016 read with Section 65 of the Insolvency and Bankruptcy, 2016 - HELD THAT:- A perusal of record shows that Applicant at initial stage had filed an I A No. 190/2018 praying for similar relief and this bench vide its order dated 29.08.2018 has already rejected the Application by discussing that this Adjudicating Authority has no power under the IB Code to review or recall its order. Further it was also held that auction cannot be considered complete since the applicant/auctioneer failed to deposit the auction money within stipulated time, therefore auction purchaser did not acquire any vested right over the property of the Corporate Debtor. Therefore, the question of excluding the asset of corporate debtor does not arise at all. Further, for imposition of cost to the Operational Creditor under section 65 of the IB Code, applicant has failed to prove or brought any evidence to the knowledge of this tribunal that Operational Creditor with fraudulent or malicious intention other than bringing resolution for the company initiated the CIRP proceedings against the Corporate Debtor and has only orally alleged the same - This tribunal after ascertaining all aspect of the petitioner/operational creditor under Section 9 of IBC has admitted the petition and for lack of any proper evidence, hence this Adjudicating Authority does not feel appropriate to invoke section 65 of the IB Code. Lastly, Member of COC i.e. Bank of Baroda has already admitted that as being member COC when they came to know about admission of the CIRP process of the Corporate Debtor by this Adjudicating Authority they, vide their communication letter dated 24.07.2018 and 10.07.2018 informed the present applicant/auction purchaser to collect its bid amount. Thereafter, the bank vide its letter dated 03.10.2018 has remitted back bid amount to the Applicant, which was collected by the Bank from the auction purchaser. Application dismissed.

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• 2019 (11) TMI 442
  Liquidation of Corporate Debtor - appointment of liquidator - section 34(1) of the IBC - CIRP closed - HELD THAT:- It is stated that CoC in its 3rd meeting held on 20.06.2018, with 100% majority resolved to close the process of CIRP and instructed the RP to file application for initiation of liquidation before this Adjudicating Authority, as the, EOI received from M/s. Freight Connection India Pvt. Ltd., Mumbai to purchase the said asset for an amount of Rs. 17.51 lakhs could not materialize and no realisations made therefrom. It is further stated that there are three major disputed receivables for which litigation is going on. However, in the opinion of Senior Counsels representing the Corporate Debtor, the outcome of all the three litigations are uncertain and may take longer time. Thus, in the above scenario revival of the Corporate Debtor is not in sight at present. It is found that CIRP has closed on 19.06.2018. The instant application is filed on 02.01.2019 - Considering all the facts and the documents annexed with the application, this Adjudicating Authority is of the considered view to pass an order for liquidation in respect of the Corporate Debtor viz. M/s. Gaytech Engineering Pvt. Ltd. and direct the Liquidator to issue a public announcement stating that the Corporate Debtor is in liquidation. This Adjudicating Authority hereby appoints the Resolution Professional as Liquidator under Section 34(1) of the IBC on terms and conditions approved by the COC in its meeting held on 20.06.2018. The Liquidator shall send an intimation to the Registrar of Companies with which the Corporate Debtor is registered - application disposed off.

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• 2019 (11) TMI 422
  Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - pre-existing dispute or not - section 9 of the IBC, 2016 R/ w 6 of the (Application to Adjudicating Authority) Rules, 2016 - HELD THAT:- The facts and circumstances of the case, when examined in the light of extant provisions of Code and the law leaves no iota of doubt that the Corporate Debtor has comrnitted Debt and default in question, which is established by the Petitioner. And there is neither pre-existing nor post-existing dispute made out by the Corporate Debtor. The Adjudicating Authority is satisfied that the instant Application/ petition is complete proviso 2 of Section 9 of the Code ; there is no payment of operational debt; the demand notice in question is delivered and no notice of dispute was received by the Petitioner; a qualified Resolution Professional by name Mr. Deepak Saruparia is suggested as Interim Resolution Professional to conduct the CIRP in respect of Corporate Debtor. Application admitted - moratorium declared.

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• Service Tax

• 2019 (11) TMI 441
  Recovery order - alleged non-payment of service tax dues under the Finance Act, 1994 - proceedings of recovery of third party from the petitioners - HELD THAT:- It is an agreed position between the parties that given the above facts and the nature of the dispute between the parties, it would be best adjudicated upon by the Commissioner of CGST and CE, Mumbai Central Commissionerate. This adjudication by the Commissioner of CGST and CE, Mumbai Central would be on the basis that the impugned communications dated 6th February, 2018, 13th March, 2018, 10th April, 2019, 17th July, 2018 and 4th January, 2019 issued by respondent no.1 Deputy Commissioner of Service Tax would be construed as show-cause notices to the petitioners - The Commissioner of CGST and CE would pass an appropriate order on the representation by following due process of law including the principles of natural justice. Petition disposed off.

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• 2019 (11) TMI 440
  Renting of Immovable Property Services to commercial concerns - non-payment of service tax - period from June 2007 to August 2012 - demand of interest - interest for part period paid - imposition of penalty - HELD THAT:- The service tax was levied on the activity of renting of immovable property service by giving retrospective effect to Section 65(105)(zzzz) of the Finance Act from 01/06/2007 itself. The said Finance Act received ascent of the Hon ble President of India on 28/05/2012 and as per Section 80(2) of the Finance Act, payment of tax and interest was to be made within 6 months i.e. on or before 27/11/2012. Further, the service tax amount of Rs. 47,37,557/- for the period June 2007 to August, 2007 has been discharged by the appellant on 25/10/2012 prior to the stipulated date. Further, as per the show-cause notice, the demand for service tax was for an amount of Rs. 43,68,851/- and the appellant has paid Rs. 47,37,557/- i.e. Rs. 3,68,706/- is paid in excess and subsequently for the period July 2010 to August 2012, appellant has also paid interest of Rs. 2,86,844/-. Demand of Interest - HELD THAT:- The appellants are liable to pay interest from June 2007 to June 20102. The appellant has already paid the interest from July 2010 to August, 2012 amounting to Rs. 2,84,844/- and now they are only liable to pay interest from June 2007 to June 2010. Since the appellant has already paid excess amount of service tax in the month of October 2012 itself amounting to Rs. 3,68,706/-, which can be appropriated towards the liability of interest - Since the amount of interest has not been calculated, the matter is remanded to the original authority for quantification of interest for the period June 2007 to June 2010 and the same may be appropriated from the excess amount paid by the appellant. Imposition of penalty - HELD THAT:- The assessee has paid the duty within the stipulated period as prescribed in the amendment, which was given retrospective effect. Prior to the amendment there was dispute regarding the taxability of renting of immovable property service and the issue has not yet been settled - the imposition of penalty is totally unwarranted and the same is set aside. The matter is remanded to the original authority for quantification of interest - Appeal allowed by way of remand.

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• 2019 (11) TMI 439
  Condonation of delay in filing an appeal before Commissioner (Appeals) - time limitation - demand of service tax on license amount paid by him to Chhattisgarh State Excise department for obtaining license for conducting the aforesaid business of retail sale liquor in malls - reverse charge mechanism - whether Commissioner (Appeals) has rightly held the appeal before him to be barred by time? HELD THAT:- The appeal can be filed in a period of 60 days from the date of communication of the said decision to the aggrieved person. Commissioner (Appeals) has a power to condone delay of subsequent 30 days in case some sufficient cause preventing the appellant to present the appeal within the said time is shown to him. There is no denial on part of the appellant for receiving the show-cause notice and no apparent demand for seeking an opportunity to reply. The initial adjudicating proceedings were also in his notice and even his employee appeared on 04.10.2017. Apparently and admittedly there is no effort on part of the appellant to enquire the status of his proceedings till he received the e-mail dated 27.07.2018. From the order-in-appeal para-3 thereof, it is rather observed that the appellant while filing an appeal before Commissioner (Appeals) had also filed an application praying for condonation of delay of 24 days on the ground that the said order was received over e-mail on 27.07.2018 by Shri Sadanand Singh, Manager of the appellant who underlined part from para 3 of 01 A. The said application amount to dismissal in view of the order of Commissioner (Appeals) dismissing the appeal as a whole on ground of limitation. The appellant herein has committed an intentional delay despite that the pendency of proceedings and even the order-in-original was in his notice. The date of information about recovery proceedings is also missing in the appellant s submission. The reasons quoted by the appellant due to which he was prevented from filing the appeal in time are, therefore, not sufficient explanation for the delay. Since apparently and admittedly the order assailed in the present appeal is passed only on the ground of limitation, touching the merits of the case is not possible at this Tribunal level. Appeal dismissed.

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• 2019 (11) TMI 438
  Condoantion of delay in filing appeal - power of Commissioner (Appeals) to condone delay - time limitation - HELD THAT:- The appellant filed the appeal before the Commissioner after a delay of 30 days after the expiry of two months which is provided for filing the appeal as per Section 85 of the Finance Act, 1994. Further, the appellants also filed the application seeking condonation of delay of 30 days by giving sufficient reasons for not filing the appeal in time - The appellant has also filed affidavit of the Director along with the application. Commissioner (Appeals) was not satisfied with the reasons given for the delay and did not condone the delay of 30 days which was within his power to condone. The delay in filing the appeal before the Commissioner was not deliberate and intentional and the Commissioner should have condoned the delay and should have decided the appeal on merits - the delay of 30 days in filing the appeal before the Commissioner is condoned - matter remanded back to the Commissioner (Appeals) to decide the same on merits after following the principles of natural justice. Appeal allowed by way of remand.

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• 2019 (11) TMI 437
  Demand of interest and penalty - Reversal of CENVAT Credit - duty paid on various inputs and inputs services during the period March, 2009 to October, 2010 - reversal of illegally availed CENVAT credit without utilizing the same - time limitation - HELD THAT:- Hon ble Supreme Court in the case of UOI AND ORS. VERSUS IND-SWIFT LABORATORIES LTD. [ 2011 (2) TMI 6 - SUPREME COURT ] was considered by the Hon ble Karnataka High Court in the case of Bill Forge [ 2011 (4) TMI 969 - KARNATAKA HIGH COURT ] and it is only after consideration of the said Apex Court decision, it was held that in case the availed Cenvat credit is not utilized, no interest liability would arise. The credit availed by the appellant in the present case was not utilized and remained only in their account books. The same was subsequently reversed by the appellant suo motu on realization that the same was not available to them. In such a scenario, no loss of revenue has occurred to the department so as to confirm the interest, which is nothing but payment to compensate any monetary loss - the confirmation of the interest for making the entry in the records, is neither justified nor in accordance with law. Time Limitation - HELD THAT:- The wrongly availed credit was reversed by the appellant in October, 2010 by reflecting the same in their ST3 returns, whereas the show cause notice stand issued on 18.10.2012 - Inasmuch as the demand of interest in the present case is by invoking the longer period of limitation, for which there are no justifiable reasons - the demand is held to be time barred. Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 436
  Classification of services - commercial training and coaching services or business auxiliary service? - franchise fees - revenue sharing model - case of appellant is that the agreement between the Appellant and Career Launcher is on a principal to principal basis with no element of agency and the Appellant functions in the capacity of an independent contractor where the Appellant is responsible for providing the cost of the equipments, premises, furniture and allied articles for the recruitment and selection of staff and the faculty - double taxation - Revenue sharing. Whether the taxable service was provided in relation to education? HELD THAT:- The word education has a wide meaning and includes the practice of teaching or training in a particular subject. The adjudicating authority, even after noticing that education apart from the process of teaching and learning includes training in a particular subject, erred in observing that education is different from training . In this connection what is important to notice is that the exemption is in relation to education . It cannot be doubted that the activity conducted by the Appellant is in relation to education and, therefore, the Appellant would clearly be entitled to the benefit of the exemption Notification dated 10 September 2004. It would be appropriate to refer to the decision of the Tribunal in SUNBEAM INFOCOMM PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE [ 2014 (8) TMI 783 - CESTAT MUMBAI] wherein even though education in Information Technology was conducted through authorized training centers throughout the State of Maharashtra, but the Appellant therein was only an authorized agency for supplying books of various courses, creation of authorized training centers, supervision of authorized training centers, collection of fees for various courses conducted and remitting the same to the authorized training centre. The Tribunal held that the activities were incidental or ancillary to the promotion of Information Technology Education of Maharashtra and, therefore, would be exempted under the Notification - In the present case, apart from imparting some of the aforesaid activities, the Appellant is in fact also providing education to the students and, therefore, the principles enumerated in the aforesaid decision of the Tribunal will apply with greater force in the present case. We express our inability to accept view taken by the adjudicating authority. Career Launcher has paid Service Tax on the entire amount of fees collected from the students. It is on a revenue sharing basis, that part of this fee is remitted to the Appellant by Career Launcher. The Appellant, therefore, cannot be required to again pay Service Tax on this fee. In fact no service is provided by the Appellant to Career Launcher because in terms of the agreement, the revenue is shared between Career Launcher and the Appellant. Reliance can be placed on the decision of the Tribunal in M/S. SAMADHAN SYSTEMS (P) LTD. VERSUS C.C.E., JAIPUR-I [ 2018 (2) TMI 1049 - CESTAT NEW DELHI] where it was held that no Service Tax liability will arise on the business partner of MAAC under commercial coaching and training service. The last alternative contention of the learned counsel for the Appellant, is that the Department cannot be permitted to discriminate between various assesses inasmuch as in the case of certain assesses, relating to same issues, a view was taken that training centres like the Appellant will not be required to pay Service Tax under the category of business auxiliary service , if Service Tax has been paid on the entire amount by the agencies with whom the agreement has been entered into - There is considerable force in the submission advanced by the learned Counsel for the Appellant. Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 435
  Classification of services - Business Auxiliary Service or not - appellant, which is a Government Company, is primarily engaged in procurement/purchase of food grains and essential commodities etc and distribution of the same to the financially weaker section of the society - extended period of limitation - HELD THAT:- The appellant s services are in relation to provisions of services on behalf of M/s Coal India Ltd. to distribute the coal for which duty is being assigned to the appellant on a consideration. Having provided such services on behalf of M/s Coal India Ltd. against consideration, the appellant have admittedly provided services falling under the category of Business Auxiliary Service . Extended period of limitation - demand stands raised by way of issuance of show cause notice dated 24 August, 2009 for the period 2005-06 to 2007-08 was till 31 March, 2008 by invoking the longer period of limitation - HELD THAT:- Apart from the fact that the appellant is a public sector undertaking of Government of Uttar Pradesh and as such cannot be attributed with any mala fide, we also note that the Commissioner in his impugned order has observed and thus the noticee may not have suppressed the facts, but because of their omission by not applying for registration non-filing of proper return, non-payment of service tax, non supply of proper information despite repeated correspondence by investigating agency and non-appearance in compliance of summons have lead to the suppression of facts by them - In the present case the Adjudicating Authority having himself held that there was no suppression on the part of the appellant, the longer period should not have been invoked. Penalty - HELD THAT:- The Commissioner has himself agreed that there was no suppression or mala fide. Inasmuch as the demand in the present appeal stands raised beyond the period of one year, the entire demand is barred by limitation and is required to be set aside. For the same reason, penalty imposed on the appellant is required to be set aside. Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 434
  Classification of services - renting of immovable property or not - appellant offered slaughter house belonging to them for operation and management to M/s Frigorifico Allana Ltd. by entering into an agreement by charging license fee to M/s Frigorifico Allana Ltd. through a contract - Extended period of limitation - validity of SCN - HELD THAT:- The said show cause notice came to be adjudicated by the Commissioner by way of passing two separate orders, one dated 10 January, 2014 and the other dated 19 September, 2014, which two orders are impugned before us by way of filing two separate appeals. As the same show cause notice has been adjudicated by way of order dated 10 January, 2014, the subsequent order passed on 19 September, 2014 has to be held as infructuous. As such the appeal filed against the same being Service Tax Appeal No.70363 of 2018 is dismissed on the said ground itself as infructuous. Classification of goods - The said transaction appeared to be Renting of Immovable Property to Revenue, therefore, service tax demand of around Rs. 1.31 crores was raised through show cause notice dated 18 October, 2013 by invoking extended period of limitation - HELD THAT:- The appellant is a Municipal Corporation which a local self-government and there are large number of decisions of Tribunal which have held that allegation of intention to evade payment of tax cannot be leveled against a Government Organization. Since the appellant is a local self-government, the allegation of intention to evade payment of tax is not sustainable against the appellant. Therefore extended period of limitation was not available to the Revenue in the present case - since the entire demand is beyond the normal period of limitation the same is not sustainable. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (11) TMI 433
  Classification of goods - Electrical Energy - whether classified under Tariff Item No.27160000 of Central Excise Tariff Act (CETA), 1985 or otherwise? - captive consumption - excess/surplus quantity is sold to outside to power distribution companies for a consideration without payment of duty as no rate of duty has been prescribed in the CETA, 1985. HELD THAT:- The issue involved in the present appeal is no more res integra and has been settled by the decision of the Allahabad High Court in the case of GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2013 (7) TMI 159 - ALLAHABAD HIGH COURT] which has been approved by the Hon ble Supreme Court in the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] . Further, the Division Bench of the Tribunal in the case of JAKARYA SUGARS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-II [ 2018 (5) TMI 1665 - CESTAT MUMBAI] has also considered the same issue and after relying upon the judgment of the Allahabad High Court in the case of Gularia Chini Mills has held that in the generation of electricity from bagasse, no other input or input service is used and therefore, the electrical energy is neither excisable under Section 2(d) of Central Excise Act, 1944 nor exempted goods and hence, Rule 6 is not applicable. The demand of 6% of the value of electricity sold to various companies is not sustainable in law - Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 432
  Clandestine manufacture and removal - MS Ingots and structural steel - third party evidence - corroborative evidences or not - HELD THAT:- Since the sole challenge to the order is its reliance upon third party evidence, it is necessary to check the evidentiary value of the third party evidence. There is no other evidence or document in the form of stock verification of the raw-material of the appellant and the material supplied to M/s. PIL nor is there any evidence about usage of any transportation by the appellants for transporting the alleged quantity of raw-material to M/s.PIL. In absence thereof, the documents recovered from M/s.PIL cannot be held conclusive against the appellant. The order confirming the recovery has no legal basis to sustain - Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 431
  Restoration of revoked Central Excise Registration to the respondent /assessee - It appeared to Revenue that the respondent/assessee has obtained registration by mis-declaration and thus, contravened Rule 9 of the Central Excise Rules, 2002 - HELD THAT:- Hon ble Supreme Court in the case of M/S ISHA MARBLES VERSUS BIHAR STATE ELECTRICITY BOARD [ 1995 (2) TMI 442 - SUPREME COURT] has held that the benefit of electric connection cannot be denied to Isha Marbles, which are in bonafide possession, after purchasing the premises under the auction proceedings, which was held by the Financial Corporation under the powers vested in it under the State Financial Corporation Act , it was also directed that Electricity Board can recover its electricity dues, which are contractual dues, from the earlier occupant under the process of law, but for the said reasons, cannot deny electricity connection to Isha Marbles. The withdrawal of registration under the facts and circumstances is unwarranted and uncalled for. Further, it is a fundamental right of every citizen to carry on trade and business or engage in any occupation for his livelihood, as is enshrined under Article 19(1)(g) of the Constitution of India. Further, there is no violation of provisions of Rule 9 of the Central Excise Rules, which provides - every person, who produces or manufactures any excisable goods, shall get registered. Thus, without registration, the respondent/assessee, cannot carry on the manufacture of the excisable goods. Thus, the order of revocation is also in violation of the provisions of Central Excise Rules, particularly Rule 9 of the Central Excise Rules, 2002. Appeal dismissed - decided against Revenue.

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• 2019 (11) TMI 430
  Clandestine procurement of raw material and removal of finished goods - MT Billets - shortages of raw material - case of appellant is that the allegation is based on presumption and on the third party evidence - corroborative evidences or not - HELD THAT:- Only documentary evidence to proceed against the appellant is loose parchi No. 5 (RUD2) as recovered by the department during the search of premises of M/s RPSL recording the alleged shortage. Apparently, there is no documentary evidence corroborating the said RUD2. No doubt show-cause notice is mentioning that separate proceedings had been initiated against M/s RPSL, but till date department has not produced from record the status of such proceedings , if any, ever initiated. It is coming in the show-cause notice itself para-6 (C) thereof as acknowledgement by Mr. Pankaj Sharma that they never cleared any excisable goods without payment of duty. He also acknowledged that no incriminating document was recovered from their unit during the course of search conducted in appellant s factory under Panchnama dated 05.02.2015. There is no denial of the department to the said acknowledgement/deposition nor any evidence contrary to that. In such circumstance the loose-parchi recovered from M/s RPSL cannot be corroborated from the statement of Manager, M/s RPSL irrespective having any admission for receiving unaccounted MS Billets from the appellant. Both these evidences, documentary as well as oral are nothing more than a third-party evidence. Law has been settled that where the allegation of duty evasion is based on the documents and records procured or seized from other person or premises the burden of proof does not lie on the person accused of such evasion. It is the settled law of evidence that any evidence to be admissible has to be proved in corroboration. It is also the settled principle of evidence that a documentary evidence can be contradicted only by way of admissible documentary evidence no oral evidence can falsify the contents of the documentary evidence produced on record - In the absence thereof the fact remains that there is no corroborative evidence to the loose parchi recovered by the department that to from the premises other than that of the appellant. The same cannot be relied upon - the impugned demand of Rs. 13,74,436/- is opined as wrongly confirmed by Commissioner (Appeals). Demand of Rs. 2,17,790/- as confirmed by the department on the basis of shortages notice in raw-material with appellant during search of his premises vide Panchnama dated 05.02.2015 - HELD THAT:- It is observed that there is no evidence on record except for the weighment of raw material. Admittedly the weighment is on average/estimation basis. Admittedly, there is no actual weighment of the goods done by the department. Department has failed to bring on the record the basis of deficiency arrived at by them as far as the alleged shortage of raw material i.e. silicon manganese, aluminium, ferro-silicon and CPC is concerned. This Tribunal has time and again reiterated that for quantification of inputs while proving the observed shortage in quantity of raw-material the same has to be done by a precise method for the purpose. Eye-estimation cannot be the precise method for weighment nor can the average of weight of a smallest quantity of raw-material suffice the purpose. The department has failed to prove convincingly, cogently and in corroboration of the admissible evidence the allegations of clandestine removal of MS Billets by the appellant and even the shortage of raw material available with the appellant. The adjudicating authority below has failed to give the specific details of invoices which are different from the consignment details of the 304.820 MT of Billets as were received by M/s RSPL. In fact, the entire order is silent about the said consignment details also - Appellants are not denied to be the regular supplier of M.S. Billets to M/s RSPL as their law material. In such circumstances, total reliance upon the admission of third-party ignoring the deposition of appellant that entire supply to M/s RSPL is after payment of duty and the respective invoices is an apparent mistake on part of Commissioner (Appeals). Demand set aside - appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 429
  Benefit of exemption - Valuation - manufacture of Recycle Polyester Staple Fiber through recycling route - benefit of serial No. 70 A of Notification No. 1/2011- CE - Appellant submits that Appellants are using inputs consisting of 95% of the Plastic Scrap and Plastic Waste including waste polyethylene terephthalate bottles and therefore the conditions of notification No. 1/2011 CE as amended are fulfilled - HELD THAT:- The exemption under notification No. 1/2011- CE dt. 01.03.2011 and other analogus notification during the subsequent period were being claimed by the Appellant on the ground that they were using plastic waste in manufacture of Polyster Staple Fibre. The Notification provided exemption to the finished goods of Chapter 54 or 55 and the description of such finished goods was Polyster Staple Fiber or Polyster filament yarn manufactured from plastic scrap or plastic waste including waste polyethylene terephthalate bottles falling under chapter 54 or 55 . The Appellant s contention is that Popcorn so produced is plastic waste and used in production of PSF and hence the same being manufactured from Plastic waste is eligible for exemption. They have also sought reliance upon and interpreted the report of CIPET, IIT Kharagpur etc to canvass their point that the popcorn should be considered as plastic waste. The subject exemption is available to finished goods if the same are manufactured by plastic waste. We find that the Appellant has brought yarn waste and converted the same into popcorn. What has been tested by the Man Made Textile Research Association is Polyster Popcorn and even the CIPET report is about PET waste. The IIT report is also about Popcorn considering it to be plastic waste. However the facts remains that Yarn waste was brought by the Appellant and converted into Popcorn. It is appropriate to remand the case back to the adjudicating authority to decide the case afresh by taking into consideration the contentions of the Appellant afresh viz. the reports of various institutes relied upon by the Appellant and also to consider the case that the small use of popcorn from yarn waste would not debar the Appellant from exemption. The percentage of small quantity of yarn waste as claimed by the appellant was not ascertained, which is important to draw a conclusion for eligibility of exemption - appeal allowed by way of remand.

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• 2019 (11) TMI 428
  CENVAT Credit - Furnace Oil and lubricating oils used in generation of electricity by the captive power plant and DG sets located at the clinker unit of the appellants - electricity is supplied to the grinding unit, captive jetty, water desalination (DMW) plant, administrative building and residential colony of the appellants - HELD THAT:- The issue in hand has been considered in the case of SANGHI INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., RAJKOT [ 2006 (4) TMI 422 - CESTAT, NEW DELHI] and the Cenvat credit was allowed in respect of inputs used in the captive power plant and desalination water to the extent it is used in the factory of the appellant, jetty and administrative building, however, the credit attributed to residential colony of the appellant is not admissible. Appeal allowed in part - decided partly in favor of assessee.

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• 2019 (11) TMI 427
  Adjustment of sanctioned refund against outstanding confirmed dues - Section 35F of Central Excise Act, 1944 and Section 35FF of Central Excise Act, 1944 - Board Circular No.802/2004, dt.08.12.2004 - whether the outstanding dues are in reality payable by the Respondent or already paid by the Respondent during the course of various proceedings as claimed by them? HELD THAT:- The Adjudicating authority, while adjusting the refund claim against the outstanding dues ought to have provided an opportunity to the Respondent to make submissions in this regard. Therefore, the issue needs to be re-examined by the Adjudicating authority after affording an opportunity of hearing to the Respondent. Appeal allowed by way of remand.

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• 2019 (11) TMI 426
  Refund claim - Deposit paid on debonding of unit - Revenue directed the appellant to pay differential duty of Rs. 83,49,549/- which was deposited by the appellant on 20 November, 2009 - Appellant claimed refund of the said amount - HELD THAT:- The observations of learned Commissioner (Appeals) that calculation of duty payable on the indigenous capital goods for conversion of 100% EOU to EPCG scheme was done on self assessment basis are contrary to the fact of the case. We, therefore, hold that impugned order is not sustainable and we set aside the same and remand the matter to learned Commissioner (Appeals) to decide the matter afresh by taking into consideration copies of said two letters referred - Appeal allowed by way of remand.

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• 2019 (11) TMI 425
  Classification of goods - Harvest Plus and Cash Plus - Whether to be classified under Central Excise Tariff Chapter No.31 or under Chapter 38? - HELD THAT:- Without subjecting the goods to the chemical examination by competent chemical laboratory the aspect of whether the goods are only Plant Growth Enhancers or they also have capability of regulating the plant growth cannot be ascertained. The matter remanded to Original Adjudicating Authority i.e. Commissioner with direction to get the goods examined by departmental chemical laboratory i.e. CRCL to decide whether the goods manufactured by manufacturer are Plant Growth Regulators or Plant Growth Enhancers - appeal allowed by way of remand.

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• CST, VAT & Sales Tax

• 2019 (11) TMI 424
  Condonation of delay of 97 days in filing appeal - Recovery of the amounts confirmed by Ext.P1 and P1(a) assessment orders - KGST Act - assessment years 2014-2015 and 2015-2016 - HELD THAT:- Taking note of the fact that the delay is only 97 days, I deem it appropriate to condone the same and direct the 2nd respondent to consider and pass orders on Ext.P4 and P4(a) stay petitions within a period of one month from the date of receipt of a copy of this judgment, after hearing the petitioner.

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• 2019 (11) TMI 423
  Special scheme of assessment - transitional period between the phasing out of the TNGST Act and the coming into force of the Tamil Nadu Value Added Tax Act, 2006 - Section 12C and Rule 15(5-E) of the Tamil Nadu General Sales Tax Act 1959 - service of SCN - Notice dated 02.03.2007 had been issued though served on the assessee/petitioner on 11.05.2007 - petitioner objected to the preassessment process on 21.05.2007 relying both on the expedited process of assessment set out under Section 12 C and seeking a personal hearing prior to conclusion of assessment proceedings - principles of natural justice. HELD THAT:- The question of suppression does not merely mean a difference in the interpretation of law vis-a-vis the petitioner and the respondent. In the present case, it is a legal dispute as to whether the transaction in question constitutes works contract, taxable at 4% or sale of equipment, taxable at 20%. Though the Assessing Authority, in the present case, has proceeded to assess the transaction as sale of equipment, taxable at the rate of 20%, that by itself cannot lead to an inference of suppression and a bonafide difference of opinion on the interpretation of a taxing statute cannot be ruled out. In the facts and the circumstances of the present case, particularly bearing in mind that no personal hearing has been granted to the petitioner, I am inclined to set aside the assessments, to be re-done de novo for both periods 2004-05 and 2005-06, on merits. The assessee shall appear before the Assessing Authority on 30.10.2019 at 10.30. a.m. No further notice need be issued in this regard. Assessment periods 2002-03, 2003- 04 and 2004-05 - Orders of assessment dated 27.02.2007 are impugned in relation to assessment periods 2002-03 and 2003-04 and show cause notice dated 27.02.2007 for the period 2004-05 - whether the provisions of Section 12C and the procedure for expedited assessment provided therein could also be sought by an assessee where there had been proceedings for assessment initiated even prior to 01.04.2006? - HELD THAT:- The tenor of Section 12C, to my mind, appears to be that assessments in relation to the periods prior to 01.04.2006 shall be on the basis of return and the declarations prescribed and such returns shall be accepted without requiring the presence of the dealer or production of books of accounts subject to the satisfaction of the conditions stated therein. This indicates that an order under Section 12C will have to be passed in cases where an assessee satisfies all the prevalent conditions even if proceedings for assessment have been initiated in respect of the periods in question. After all, the clarificatory circular issued by the Special Commissioner makes it clear that the purpose of Section 12 C and the corresponding Rule is to bring to an end proceedings for assessment as expeditiously as possible, if the officer is prima facie satisfied with the return and the exemptions sought by the assessee, subject to the conditions stipulated in the Rule. An assessment under Section 12 C must be framed even in respect of periods where there has been exchange of communication by way of pre-assessment notice, objections as well as personal hearing afforded to the petitioner prior to 01.04.2006, such proceedings pending completion as on 01.04.2006. The impugned orders of assessment though dated 27.02.2007 do not refer to the provisions of Section 12 C at all - Admittedly, in these cases the assessee has only invoked the applicability of Section 12C only after completion of assessment, by communication dated 19.03.2007 wherein for the first time Section 12 C is referred to and a request made to the Assessing Officer to cancel the assessment order and to recall the same. This request has been pending with no reply, hence prompting the assessee to approach this Court by way of the present Writ Petitions. The assessee has prima facie discharged the burden cast upon it to establish that the transactions in question constitute branch transfers and nothing further. The Assessing Authority has, on the other hand, not conclusively established suppression in order to take the present assessment out of the ambit of Section 12 C - impugned order as well as SCN set aside. Validity of orders of assessment dated 16.01.2007 passed in terms of the provisions of the Tamil Nadu General Sales Tax Act, 1959 - HELD THAT:- Orders of assessment in respect of the periods 2002-03 and 2005-06 are placed on file to establish that identical claims of exemption have been made by the petitioner for the previous and later years and the Assessing Authority has, on an examination of relevant documents, accepted the claim for exemption. The conclusion of the Assessing Authority turns on the position that the petitioner has not supplied cotton yarn for export but has, in fact, supplied cloth manufactured from out of the cotton yarn, for export. Learned counsel for the Revenue is unable to produce a copy of the Clarification and instead circulates a copy of the Exemption Notification to which I have already made reference. The fact that the petitioner has indeed supplied manufactured cotton is not denied by it - the case of the petitioner is admitted, simply on the anvil of consistency. Though a ground has been raised questioning the validity of the present assessment in the light of Section 12 C of the TNGST Act, this ground is given up by the learned counsel for the petitioner in the course of the hearing. Petition allowed.

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