Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 14, 2019
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Detention of goods - Section 129 of the GST Act - the validity period of the e-way bill that accompanied the transportation had already expired at the time of detention - the detention cannot be said to be unjustified.
Income Tax
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Addition on account of notional rental value - Assessee relied on the valuation as determined by the Municipal authority way back in 1994 and in our opinion the said valuation is not at all relevant nor is a base to determine the valuation of the property relating to the assessment year under consideration i.e. F.Y 2010-11 (A.Y 2011-12).
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Jurisdiction of the Initiating Officer to initiate the investigation - Benami transactions - This SOP was issued prior to the issue of Show Cause Notice under Section 24(1) of the PBPT Act, 1988. In the said SOP at Para No.4 the jurisdiction of I.O., Approving Authority and Administrator has been defined.
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Computation of Book Profit for the purpose of 115JB - where an obligation was undertaken to meet a liability and only consequential effect was to be determined, it could not be said that the amount in question was in a nature of contingent liability.
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Interest received on delayed compensation - TDS and interest belong to 5 parties - TDS certificate was issued in the name of the assessee and accordingly the assessee has paid the taxes due on such income on behalf of all other parties. - it is immaterial whether other parties have paid the taxes on such income.
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Disallowance on account of interest on borrowings paid by the assessee - it was mutually agreed between the assessee and the respective parties that the payment for fees will be made subject to the condition that the assessee applies for allotment of flat. - Following the method of accounting on Cash basis, amount of interest for earlier cannot be disallowed.
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Assessment u/s. 153A - the tax can be levied as per the provision of the Act. Thus, the tax cannot be charged from the assessee merely on the ground that he agreed for certain addition during the assessment proceedings.
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Accrual of interest income - Merely because GSL Educational Society decided not to make payment, accrued income cannot be reduced. The income has to be computed as per the provisions of the Act and as per which the amount accrued as per the system of accounting followed by the assessee required to be taxed.
Customs
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Levy of Anti-dumping duty - sodium saccharin - unless the notification is suitably worded cannot be claimed to be of all grades importantly, when Anti-Dumping Duty notification mentions the names of only the saccharin, it cannot be read to include its salts also - The anti-dumping duty is applicable to only ‘Saccharin’ and not ‘salt’ of Saccharin.
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Determination of date of Import for re-export - The assumption cannot be accepted that since the only provision that refers to relevant date for import is in Section 15 but that is for the limited purpose of determining rate of duty or tariff valuation. For other purposes, the general understanding of importation should apply. Goods cease to be treated as imported once they are cleared for home consumption.
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Proceedings against the Chartered Engineer - considering the fact that the appellant have been kept away from the business for three years, as per the document submitted by the Ld. Counsel issued from the Institute of Engineers India dated 28-11-2017, the appellant have suffered as he could not carry out his profession for 3 years, hence, the appellant deserves a leniency - quantum of penalty reduced.
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Considering the submissions made by learned counsel appearing for the appellant (The Commissioner of Customs) and the Directorate of Revenue Intelligence regarding impleadment of the Directorate as a party in the appeal, we are of the view that this prayer cannot be acceded to as the appellant and the directorate are authorities directly under the central government.
Indian Laws
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Dishonor of Cheque - it is presumed that the cheques in question were drawn for consideration and the holder of the cheques - The onus, thereafter, shifts on the accused-appellant to establish a probable defence so as to rebut such a presumption, which onus has not been discharged by the respondent.
Service Tax
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Exemption from service tax - construction of railway lines for private parties and construction of private roads - the term “railways” includes any form of railways in the absence of any stipulation to the contrary in the charging section - the charging section under CICS is also identically worded and find no reason to take a different view.
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Waiver of penalty - intent to evade tax or not - As the short fall has come during the investigation itself and the appellant did not explain the reasons and kept lingering on the matter for two years, in that circumstance, melafides of the appellant have been established by the Revenue.
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Nature of activity - service or not - The erection and installation is incidental to the sale/supply of the machine. Therefore, the entire transaction is of sale and purchase of the machine and, hence, no service is involved. Therefore, no Service Tax can be demanded.
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Refund of service tax - unjust enrichment - merely because the service tax amount was shown as expenses that alone cannot establish that the incidence was passed on. However once the service tax amount is booked as expenditure then the burden to prove that the same was not passed on become heavy on the assessee.
Central Excise
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Captive Consumption - manufacture of non-excisable goods - Inasmuch as the final product emerging from the factory of the manufacturer is not excisable (as opposed to exempt or cleared at Nil rate of duty), the show cause notice has been issued on an erroneous premise and without jurisdiction.
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Captive Consumption - the appellant was using cement within their factory without payment of duty - exemption under N.N. 67/95-CE - it is not necessary that cement in the case on hand is required to be necessarily used in the manufacture, it is also sufficient if cement is used ‘in relation’ to the manufacture of final product.
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CENVAT Credit - input - The use of cement as a stabilizing agent in the factory at the stage of treatment of hazardous waste can be said to be goods used in the factory by the assessee/manufacturer of a final product. - Credit allowed.
VAT
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Compliance with the pre-deposit - adjustment of duty paid under protest during investigation - the petitioner cannot contend that because a paltry amount was deposited under protest prior to the assessment and at the time of investigation, that be adjusted against the pre-deposit contemplated by section 26(6A) of as compliance with subsection (6A) of section 26 of the MVAT Act.
Case Laws:
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GST
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2019 (11) TMI 592
Detention of goods - Section 129 of the GST Act - detention was on the ground that the validity period of the e-way bill that accompanied the transportation had already expired at the time of detention - HELD THAT:- As the detention was on the ground that the validity period of the e-way bill that accompanied the transportation had already expired at the time of detention. Under the said circumstances, the detention cannot be said to be unjustified. It is directed that if the petitioner furnishes a bank guarantee for the tax and penalty amount quantified in Ext.P4 order, then the respondents shall release the consignment and the vehicle to the petitioner.
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Income Tax
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2019 (11) TMI 591
Computation of Book Profit for the purpose of 115JB - claim of the assessee that the amortized amount of exchange difference arising out of foreign currency borrowings are not contingent liability - HELD THAT:- Tribunal and the Commissioner (Appeals) held that the forward foreign exchange contract entered into by the assessee to buy or sell foreign currency at an agreed price at a a future date cannot be considered as a contingent in nature as it creates a continuing binding obligation on the date of the contract against the assessee. We find no error in the view taken by the Tribunal that in the present case where an obligation was undertaken to meet a liability and only consequential effect was to be determined, it could not be said that the amount in question was in a nature of contingent liability. Nothing is shown to us how the view taken is erroneous in law or on facts. Additional question of law to the effect that the Tribunal erred in not treating as capital expenditure for computation of book profit under Section 115JB when this amount was treated by the Assessing Officer and accepted by Assessee as a capital expenditure. Not only this point was not urged before the Tribunal but it does not even find reference in the present appeal memo. It is not permissible for the Appellant to urge said question for the first time in this Court, that too during the course of the oral argument. No substantial question of law
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2019 (11) TMI 590
Addition u/s 68 - unexplained cash credit - HELD THAT:- As far as the amount of ₹ 5,18,44,700/- is concerned, both the Commissioner (Appeals) and the Tribunal have, after considering the records, categorically held that this amount was relevant for the Assessment Year 2006-07. In fact the Assessing Officer in his remand report dated 16 September 2010 has accepted this position. As regard the amount of ₹ 2.94 crores is concerned, the Tribunal has sent the same for verification by the Assessing Officer. The contentions of the parties regarding this amount about its genuineness, etc. would be considered on remand.
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2019 (11) TMI 589
Addition u/s 68 - unexplained cash credit - Tribunal confirming the decision of the CIT(A) in deleting the addition - HELD THAT:- In the report, AO indicates that notices sent to some of the companies came back un-served, yet thereafter, the companies appeared before him through a representative and made submissions in support of their investments. The impugned order records that change of address was given to the Assessing Officer and yet it appears that notice was served on an incorrect address. Tribunal also records that in fact, one of the Director of the Company which has subscribed the shares, had given also an affidavit, stating that, the Company has paid ₹ 30 lakhs to 30,000 equity shares of ₹ 10/- each at a premium of ₹ 90/- to the Assessee Company. CIT(A) and the Tribunal have both come to a finding of fact that amounts received for share subscription is not hit by Section 68 of the Act as the identity, capacity of the shareholder is proved. Besides, the genuineness of the transactions also stands established. In the above circumstances, the concurrent finding of facts by the CIT(A) and the Tribunal do not call for any inference. Particularly in the absence of the Revenue s showing it to be perverse. No substantial question of law
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2019 (11) TMI 588
Waiver of interest u/s 220(2A) - payment of tax in arrears - whether the petitioner has satisfied the three conditions provided u/s 220 (2A) - HELD THAT:- It is seen that the Appellate Authority has reduced the tax liability of the petitioner. The said order of the Appellate Authority was given effect to by the Assessing Officer on 04.09.2017 by raising a demand of arrears of tax of ₹ 97,22,499/- and interest under Section 220(2) of ₹ 26,82,187/-. It is claimed by the petitioner that the entire tax liability has been paid within 30 days from the date of receipt of the giving effect order. Their dispute is with regard to the interest claimed. Therefore, the petitioner filed the Waiver Petition dated 13.12.2017 under Section 220 (2A). While considering the application for waiver of interest, the first respondent should apply his mind, as to whether the petitioner has satisfied the three conditions provided under Section 220 (2A) of the said Act in order to grant waiver. Therefore, application of mind of the first respondent should be apparent on the face of the order passed under Section 220 (2A). The first respondent has passed the rejection order only on the ground that the Directors of assessee Company have given loans to the assessee and that the assessee has been receiving a rental income of ₹ 1,12,500/- per month, he has not adverted to any of the contentions raised by the assessee in the waiver application in order to decide as to whether, the petitioner is entitled for waiver or not. Therefore, this Court, is inclined to remit the matter back to the first respondent to reconsider the matter afresh and pass orders on the merits and in accordance with law.
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2019 (11) TMI 587
Proceedings u/s 153C without having the incriminating material - HELD THAT:- In the instant case, there is no doubt that the assessee has filed the return of income on 30.09.2012 and the time limit for issue of notice u/s 143(2) was expired on 30.09.2013 prior to the date of transfer of the case to the AO having jurisdiction and the present AO had issued notice u/s 153C on 23.07.2014. By the time, the case was notified to the present AO, the assessment for the A.Y.2012-13 is unabated. Hence, the AO is not permitted to make any addition without having the incriminating material. In the instant case, the addition was made with reference to the rent paid by the assessee, which was accounted in the regular books of accounts and declared in the returns of income already filed and no incriminating material was found during the course of search. AO is not permitted to make any addition in the hands of the assessee relating to the rent paid by the assessee Accrual of interest income - method of accounting - HELD THAT:- In the instant case, there is no dispute that the assessee had advanced the sums to the GSL Educational Society and also receiving the interest and received the substantial amount from GSL Educational Society as per the incriminating material found and seized. The said sums were not accounted in the books of accounts, therefore, the said sums were admitted as income in the hands of the assessee. No evidence found during the course of search with regard to write off of the advance. The letter was received by the assessee on 28.01.2016 relevant to the F.Y.2016-17 which has no relevance in the impugned assessment year. The assessment required to be made as per the incriminating material found during the course of search and method of accounting followed by the assessee each year independently. If the assessee accepts to forego the advance merely on the basis of letter it would take the character of donation but not the allowable expenditure. Merely because the GSL Educational Society is not inclined to make the payment, the same cannot be allowed as expenditure deduction. Therefore, we are unable to accept the contention of the assessee that on the basis of letter issued by GSL Educational Society to reduce the return of income. The assessee is free to follow the procedure laid down under the Income Tax Act to make efforts collect the outstanding dues and write off as bad debt n in the subsequent years as per law. Thus we, decline to interfere with the order of the CIT(A) and dismiss the appeal of the assessee.
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2019 (11) TMI 586
Disallowance for the provision for warranty - HELD THAT:- Undisputedly the AO admitted the claim of the assessee by allowing of provision for warranty to the extent of 6.4% instead of 8% claim by the assessee by resorting to arithmetic calculation by taking average of the last four years prior to the assessment year under consideration. CIT(Appeals) without bifurcating the commission income and provision for warranty income affirmed the addition only on accrual basis. The assessee contended that the identical issue has already been settled in the judgment cited as CIT Vs. Smt. Paramjeet Luthra [ 2014 (9) TMI 725 - DELHI HIGH COURT] in favour of the assessee as relied by the Id counsel for the assessee the ratio of which is that in case of provision for warranty services the entire income could not be offered for taxation for the year under assessment when the assessee had few obligations for providing after sales maintenance services and the necessary' expenses is required to be kept for the same - we restore the quarrel to the file of the AO. AO is directed to decide the issue afresh in light of the directions by the coordinate bench given in earlier A.Ys.
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2019 (11) TMI 585
Disallowance u/s 14A - suo-mto disallowance made by the appellant - HELD THAT:- It is clear that the AO despite the fact that all the books of accounts were produced before him, he could not point out any nexus with the exempt income and that of the expenditure relatable to this exempt income. Even the Hon ble Supreme Court in the case of Godrej Boyce Mfg. Co. Ltd. [ 2017 (5) TMI 403 - SUPREME COURT] has clearly laid down the principle that the satisfaction of the AO must be there for making disallowance under section 14A of the Act read with Rule 8D of the Rules. In the present case, the satisfaction is missing in all the years. MAT Computation - disallowances made while determining the income under section 115JB - HELD THAT:- It is settled law that disallowance made under section 14A r.w.r. 8D cannot be applied while determining the book profit under section 115JB of the Act, in this regard we place our reliance on the order of Hon ble Jurisdictional High Court in the matter of CIT vs, M/s. Bengal Finance Investments Pvt. Ltd [ 2015 (2) TMI 1263 - BOMBAY HIGH COURT]
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2019 (11) TMI 584
Denial of deduction u/s.10B - belated filing of the return of income - reasonable cause in respect of the delay in filing of the returns - HELD THAT:- The facts remain that there was a survey on the premises of the assessee on 23.03.2010. For the assessment years 2008-09 and 2009-10, there was a delay in filing of the return on account of the Accountant of the company turning against the company and thereby causing loss of data, which had to be sorted out by sending the main server of the assessee to software engineers for retrieval of the original data. Though the reasons had been mentioned for the delay, and though such reasons do at the outset, seem to be reasonable, no evidence with supporting evidence has been placed before the Tribunal. The matter of the reasonable cause in respect of the delay in filing of the returns is before the Hon ble Jurisdictional High Court for assessment years 2008-09 2009-10 respectively. The issue is sub judice before the Hon ble Jurisdictional High Court and it is not appropriate for this Tribunal to decide on the said issue. However, considering the fact that, these are old appeals, and they need to dispose off the issues in the quantum appeals by the Revenue for assessment year 2008-09 and 2009-10 are restore to the file of Assessing Officer for denovo re-adjudication after granting the assessee adequate opportunity of being heard and after receipt of the decision of the Hon ble Jurisdictional High Court in Writ Petition in respect of condonation of delay in filing the return referred to supra for assessment years 2008-09 and 2009-10. Exclusion of freight, insurance from the export turnover as well as total turnover while computing deduction u/s.10B - CIT(A) has followed the judicial discipline and has followed the decision of the Special Bench of Chennai Tribunal in the case of ITO Vs. Sak Soft Ltd [ 2009 (3) TMI 243 - ITAT MADRAS-D] we find no reason to interfere in the order of the ld. CIT(A) on this issue CIT(A) directing the AO to alter the nomenclature of the addition from suppression in export turnover to increase in value of Closing Stock - As the issue of deduction u/s.10B itself is pending before the Hon ble Jurisdictional High Court and as the said issue has been restored to the file of Assessing Officer for re-adjudication after the decision of the Hon ble Jurisdictional High Court in W.Ps filed by the assessee referred to supra, this issue is also restored to the file of Assessing Officer for re-adjudication after considering the directions issued by the Hon ble Jurisdictional High Court in the W.P.s filed by the assessee. The Assessing Officer shall also verify as to whether the alleged suppressed turnover has been included in the turnover of the subsequent assessment years. Disallowance u/s.14A - HELD THAT:- Assessing Officer is to verify as to whether the assessee has earned any exempt income from the said investments. If no exempt income is earned, then in view of the decision of the Hon ble Delhi High Court in the case of Joint Investment Pvt. Ltd., Vs. C.I.T [ 2015 (3) TMI 155 - DELHI HIGH COURT] no disallowance is called for. Computation of book profit u/s.115JB - same is restored to the file of Assessing Officer for re-adjudication after deciding on the issue of deduction u/s.10B of the Act. Penalty levied u/s.271(1)(c) - HELD THAT:- As the issue of deduction u/s/10B of the Act and various other deductions and additions have been restored to the file of Assessing Officer for re-adjudication denovo, the very foundation of levy of penalty u/s.271(1)(c) of the Act would no more survive, consequently penalty imposed u/s.271(1)(c) of the Act stands deleted as the same has become infructuous.
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2019 (11) TMI 583
Assessment u/s.153A - additions without any incriminating materials found during the course of search. - HELD THAT:- Once the proceeding u/s 153A is initiated which are special proceedings, the legislature provides different treatments for abated and unabated assessments. However, in respect of unabated assessments the legislature has conferred powers on the AO to just follow the assessments already concluded unless incriminating materials are found in the course of search. It is also pertinent to note that the tax can be levied as per the provision of the Act. Thus, the tax cannot be charged from the assessee merely on the ground that he agreed for certain addition during the assessment proceedings. We hold that the addition made for the Assessment years i.e. 2006-07, 2007-08, 2008-09 2008-09, which were unabated/concluded assessments as on date of search cannot be made in the search assessments in the absence of any incriminating material found in the course of search and accordingly all those additions are directed to be deleted. Since the legal issues are addressed, we refrain to give our findings on merits of additions under the provisions of the Act. Accordingly, the grounds raised by the assessee for Assessment Years 2006-07, 2007-08, 2008-09 and 2009-10 are allowed.
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2019 (11) TMI 582
Disallowance u/s 40A(3) - purchase which were above ₹ 20000/- - HELD THAT:- It is pertinent to note that the assessee made the purchase of Cement from M/s. Nirmal Cement Store, Ghaziabad during the year and bills were issued from time to time by M/s. Nirmal Cement Store, Ghaziabad in favour of M/s. Bhardwaj Construction Co. and only two payment were made as per details filed by the assessee before the Assessing Officer. The confirmation of M/s Nirmal Cement Store was also filed by the assessee during the assessment proceedings alongwith connected Bills. As per the contentions of the assessee did not make the payment in cash to M/s Nirmal Cement Store except two payments through cheques as mentioned. This fact was also admitted by putting the signature of Nirmala Aggarwal Prop. M/s Nirmal Cement Store in the ledger Account at the time of her confirmation. This factual aspect was never commented by the Assessing Officer as well as the CIT(A). Besides that the Assessing Officer as well as the CIT(A) did not take the proper cognizance of the evidences produced before the authorities. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer. Addition of donation - HELD THAT:- AO as well as the CIT(A) has not taken the cognizance of the details relating to the donations and merely on the presumptions disallowed. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer for further adjudication. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Hence Ground Nos. 5 and 6 are partly allowed for statistical purpose. Disallowance on account of 10% of conveyance expenses being of personal nature - HELD THAT:- It is pertinent to note that the assessee submitted the details of the traveling and conveyance expenses, but the same was not verified by the Assessing Officer. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Hence Ground Nos. 7 and 8 are partly allowed for statistical purpose. Disallowance on account of interest on TDS - HELD THAT:- It is pertinent to note that the assessee was under statutory obligation to deduct the income tax at the time of credit or/and payment to the payee. Therefore, the CIT(A) rightly sustain the disallowance on account of interest on TDS. Hence, Ground Nos. 9 and 10 are dismissed. Disallowance on account of depreciation on Cars - Allowable business expenditure - HELD THAT:- It is pertinent to note that the vehicles have been used for business purposes and are business assets of the assessee. Therefore, the CIT(A) was not right in sustaining the said disallowance
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2019 (11) TMI 581
Disallowance on account of interest on borrowings paid by the assessee - AR submitted that no disallowance can be made in respect of the amount paid to such parties in the earlier years which is standing under the head loans and advances as opening balance - HELD THAT:- Payment was made from the current account held with the bank, are duly reflected in the ledger accounts. The details of party wise interest paid also reveals that no interest was paid to such bank. The said bank account is reflecting under the head current assets in the balance sheet. It is the case of the assessee that the assessee had to apply for the flat as a measure of commercial expediency in order to recover the fees amount. It was mutually agreed between the assessee and the respective parties that the payment for fees will be made subject to the condition that the assessee applies for allotment of flat. Assessee had to apply for allotment of flat as a measure of commercial expediency. The ledger account of such parties where in the receipt of money is reflecting was also placed on record. Further, a summary sheet reflecting the date of receipt of amount and the date of payment for flat is also submitted by the assessee. From the records it can be seen that the assessee had applied the fees amount towards the purchase of flat as per the terms agreed upon. It can further emerges from the records that the assessee had duly offered such receipt amount to its income on cash basis in accordance with its method of accounting which is also evident from the ledger accounts of such parties. CIT(A) was not right in sustaining the addition in respect of interest incurred on account of amount standing as advance in respect of interest incurred on account of amount standing as advance in respect of such parties. Therefore, the order of the CIT(A) is set aside. Ground No. 2(i) and 2(iii) are allowed. Addition on account of Vehicle Repair and maintenance - AR submitted that it is settled law that if the Assessing Officer has not pointed out any specific defect in the books of the assessee, and has not even pointed out the specific instances where the expenses have been incurred by the assessee for personal purposes, ad-hoc disallowance made by the Assessing Officer without any basis could not be upheld - HELD THAT:- From the perusal of records it can be seen that the assessee duly furnished the bills/vouchers in respect of the expenses related to vehicle repairs and maintenance. The Assessing Officer as well as the CIT(A) could not point out any discrepancy in the books of account of the assessee. Therefore, the CIT(A) is not right in confirming this addition. Ground No. 3 is allowed.
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2019 (11) TMI 580
Addition of net of understatement of sale consideration as well as understatement of expenditure from the collaboration agreement - HELD THAT:- Addition has been made by the ld AO on the basis of mere presumptions. The market value of the flat determined by the ld AO was without any evidence. The cost of construction is also determined by him at ₹ 1500/ sq ft without any evidence. He has not supported his order with any evidence of incurring expenditure by the assessee. He did not also take the expert opinion of departmental valuer if he had any doubt about the actual cost of construction incurred by the assessee. AO has also not made any enquiry with the buyers of those flats about the price paid by them. Further, the ld AO also did not submit what kind of enquiry he has made with real estate dealers of that area. He also did not deal with what kind of enquiry the inspector deputed has conducted. Obviously the inspector deputed could not have given the value of the flat sold as he has not an expert. The ld CIT(A) has considered all these facts and deleted the addition in absence of any material with respect to unaccounted expenditure or any on money received by the assessee on sale of flats. Further, the assessee supported the cost of construction with the registered valuers report. Therefore, there is no infirmity in the order of the ld CIT(A). The judicial precedent relied upon are on different facts. It merely said that inspector of the Income Tax is not qualified to estimate the cost of immovable property. There is no quarrel on this issue. Thus, we do not find any infirmity in the order of the ld CIT(A) in deleting the above addition
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2019 (11) TMI 579
Method of accounting of interest received on delayed compensation - Accrual of income - whether the impugned interest income is attributable to the period of 18 years beginning from the assessment year 1991-92 and up-to the assessment year 2008-09 as claimed by the assessee? - HELD THAT:- The court has awarded the interest on the enhanced compensation to the 5 parties. Therefore in our considered view the impugned interest income belongs to the 5 parties as claimed by the assessee. Assessee during the assessment proceedings has submitted the details of the parties who are entitled for the interest income along with the period to which the interest pertains. The details are available on page 24 of the paper book. None of the authorities below have pointed out any defect therein. The impugned interest income i.e. interest on the enhanced compensation was chargeable to tax to the respective years to which it pertains till the assessment year 2009-10. In holding so, we draw our support and guidance from the judgment of Hon ble Supreme Court in the case of Rama Bai v/s CIT [ 1989 (11) TMI 2 - SUPREME COURT] as held interest cannot be taken to have accrued on the date of the order of the Court granting enhanced compensation but has to be taken as having accrued year after year from the date of delivery of possession of the lands till the date of such order. Amendment under section 145A of the Act which mandates to levy the tax on the interest on the enhanced compensation in the year of receipt doesn t apply to the year under consideration. Therefore we hold that such interest income shall be subject to tax on accrual basis for the year under consideration. We note that the assessee has paid the tax on such interest income which was worked out for the each year involved separately in the year under consideration. Indeed the TDS certificate was issued in the name of the assessee and accordingly the assessee has paid the taxes due on such income on behalf of all other parties. This fact can be verified from the income tax return filed by the assessee placed on page 1 of the paper book. Therefore, it is immaterial whether other parties have paid the taxes on such income. As such there is no loss to the revenue as well as there is no technique used by the assessee to avoid the tax on such income adopting the colorable device - we set aside the order of the learned CIT (A) and direct the AO to delete the addition made - Decided in favour of assessee.
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2019 (11) TMI 578
Addition of foreign travelling expenses - HELD THAT:- AO while making addition in the case of the assessee had mentioned that some of the bills and vouchers are handmade and some of the expenses were paid in cash by the assessee. Apart from this, no other allegation has been raised by the AO. It is pertinent to mention here that the AO has nowhere pointed out during the course of investigation that expenses incurred by the assessee were in personal in nature and AO merely made the addition on the ground that the bills and vouchers are handmade and certain expenses are incurred in cash. At the same time, AO has not disputed with regard to incurring of expenses for business purposes. In the present facts and circumstances of the case, AO as well as CIT(A) were not right in making addition or restricting addition more particularly when the assessee had produced all the bills and vouchers regarding each expenses. Therefore, we are of the considered view that the orders passed by the Revenue authorities on this issue are not sustainable. Hence, the Ground No. 1 raised by the assessee is allowed. Addition for trade mark registration expenses - HELD THAT:- As submitted at Bar by assessee that so far registration of trademark has not been done and these expenses were exclusively incurred by the assessee on account of consultancy charges to professionals towards fee for registering the trademark whereas on the contrary the Revenue authorities disallowed those expenses on account of failure on the part of the assessee to submit the document in support of his claim. It is pertinent to mention that the assessee has already placed on record the document before Revenue authorities which is at page 105 of the paper book. Thus under these facts and circumstances of the case, the Revenue authorities were not expected to wipe out said document without verifying the authenticity of the issue in question and thus disallowed the expenses without any basis or reasoning. Hence, in our considered view, the orders passed by the Revenue authorities on this issue are not sustainable and the addition so made is deleted. Ground No. 2 of the assessee is allowed.
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2019 (11) TMI 577
Penalty u/s 271(1)(c) - concealment of income in respect of long term capital gains - HELD THAT:- It is well settled that the parameters of judging the justification for addition made in the assessment case of the assessee is different from the penalty imposed on account of concealment of income or filing inaccurate particulars of income and that certain disallowance/addition could legally be made in the assessment proceedings on the preponderance of probabilities but no penalty could be imposed u/s. 271(1)(c) on the preponderance of probabilities and Revenue has to prove that the claim of expenses by the assessee was not genuine or was inflated to reduce its tax liability. Before us, Ld.A.R. has given the reasons for not offering the capital gains to tax initially but was offered subsequently in the return of income filed in response to notice u/s 148 of the Act. The submissions have not been controverted by the Revenue nor have they been found to be untrue. There is nothing on record to demonstrate that assessee had concealed the particulars of income. Considering the totality of the aforesaid facts and also relying on the decision of Bombay ITAT in the case of NSE IT Ltd., Vs. DCIT [ 2018 (3) TMI 1585 - ITAT MUMBAI] we are of the view that in the present case no case for levy of penalty u/s. 271(1)(c) of the Act has been made out. We thus direct the deletion of penalty u/s. 271(1)(c) of the Act. Thus, the grounds of assessee are allowed.
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2019 (11) TMI 549
Addition u/s 40A - Disallowance of reimbursed by the company to an institute established for running a school at Satna - Whether running of school is not a business activity of the company and that the payment is hit by the provisions of section 40A(9)? - HELD THAT:- As held that the amount paid to an institute for running a school at Satna in Madhya Pradesh, was not hit by Section 40A(9) as it was in the nature of reimbursement of expenditure. This by following the decision of this Court in CIT vs. Glaxo Smithkline Pharmaceuticals Ltd. [ 2012 (3) TMI 565 - BOMBAY HIGH COURT] and Apex Court s decision in Kennametal (I) Ltd., v/s. CIT [ 2013 (2) TMI 627 - SC ORDER] Thus, the question (b) as proposed does not give rise to any substantial question of law. Thus, not entertained. Appeal admitted on the substantial question of law at (a) - Tribunal was justified in upholding the order of the CIT(A) in deleting disallowance reimbursed by the company to an institute established for running a school at Satna without appreciating the fact that running of school is not a business activity of the company and that the payment is hit by the provisions of section 40A(9)?
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2019 (11) TMI 548
Reopening of assessment u/s 147 - disallowance u/s 14A - HELD THAT:- A.O. initiated the re-assessment proceedings because assessee has undertaken off-market transactions of shares of Era Infra Engineering Ltd., for ₹ 35 lakhs, therefore, for examining the issue of ₹ 35 lakhs, the A.O. initiated the re-assessment proceedings, but, ultimately, no addition have been made of ₹ 35 lakhs. A.O. recorded wrong reasons in this case. A.O. instead of making any addition relating to the reasons recorded for ₹ 35 lakhs, made independent addition under section 14A. Thus, both the above decisions clearly apply to the facts and circumstances of the case. There was, thus, no justification for the A.O. to initiate re-assessment proceedings against the assessee. In this view of the matter, reopening of the assessment is invalid and bad in law. Accordingly, set aside the Orders of the authorities below and quash the reopening of the assessment. Resultantly, appeal of Assessee is allowed. In this view of the matter, there is no need to decide the addition under section 14A which is left with academic discussion only.
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2019 (11) TMI 547
Gain on sale of shares - capital gain - 3rd round of litigation before us - direction of ITAT, the AO was to verify whether the assessee has sold the shares of TOL in the assessment year under consideration or in the AY 2007- 08 - HELD THAT:- Assessee has not filed the copy of the bank statement for the AY 2007-08 depicting the purchase sale of shares of TOL as desired by the Authorities below. However, none of the authorities below has pointed out any defect in the submission filed by the assessee in the paper book listed above. Besides the above, we also note that there was single deposit in the bank account of the assessee for ₹ 3,86,192.00 in the AY 2001-02 representing the sale proceeds of shares but the same was reflected twice as the impugned cheque bearing no. 765816 was dishonored in the first time as evident from the copy of the bank statement placed on page 29 of the PB. However, the AO has wrongly considered the deposits of cheque twice against the sale of shares which is contrary to the facts available on record. This fact can be verified from the bank statement placed in the paper book. Thus we hold that the authorities below have made the addition for the sale of shares of TOL on wrong assumption of facts. On a question to the ld. DR about the source of information for the sale of shares of TOL in the AY 2001- 02 (under consideration), he failed to bring anything on record contrary to the arguments advanced by the ld. AR for the assessee. We also find that the authorities below were in possession of the information about the brokers involved in the sale and purchase of shares but none of them has taken any confirmation from them. There was no ambiguity in the direction of the ITAT as discussed above to verify the purchase and sale of shares of TOL but the AO in his assessment order has held that the assessee has not declared the sale of shares of M/s ATN International Ltd. resulting bogus long-term capital gain of 3,64,422.00 though there was no such direction in the order of the ITAT. Therefore, we are of the view that the authorities below have exceeded the direction issued by the ITAT which is unwanted. We are not convinced with the findings of the Ld. CIT (A) and accordingly direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed.
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2019 (11) TMI 546
Addition u/s. 68 or 69C - amount representing purchases made on credit - HELD THAT:- After receiving the payment of building sold, the payment was made and it was noted that the documentary proof is the books of the assessee which are audited and it shows that all these payments were made and the assessee also filed necessary evidence before the authorities below which was also accepted by the department in the next years for substantiating the claim of the assessee. We further note that the assessee has also filed the affidavit of Sh. Naresh Jain, Director of the assessee company. All these submissions of the assessee were forwarded to the AO for his comment. However, the AO adopted his earlier stand. Hence, the addition in dispute is not permissible u/s. 68 which should have been invoked u/s. 69C. We further note that the applicability of section 69C in place of section 68 of the Act applied by the AO, enabling the provision of section 292B permits the authority to do so in view of the decision in the case of Yadu Hari Dalmia vs. CIT [ 1980 (5) TMI 22 - DELHI HIGH COURT] . The unpaid purchase price could not be added to the income of the assessee as per the decision case of CIT vs. Ritu Anurag Aggarwal [ 2009 (7) TMI 1247 - DELHI HIGH COURT] . We are of the view that when purchases were not doubted by the AO, the addition in dispute u/s. 68 is not tenable. As per the aforesaid decision, in the present case AO had not disallowed the purchases from those creditors and trading result were also not disturbed. To support our aforesaid view, we draw support from the decision in the case of Pr. CIT vs. Kulwinder Singh [ 2017 (7) TMI 957 - PUNJAB AND HARYANA HIGH COURT] wherein it has been held that section 68 could not be invoked for the amount representing purchases made on credit. - Decided in favour of assessee.
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2019 (11) TMI 545
Addition on account of notional rental value - annual value of the house property - valuation for determining annual letting value - fair rent in the market - municipal valuation for determining annual letting value - HELD THAT:- Referring to ratio laid down by the Hon ble High Court of Calcutta in the case of Satya Co. Ltd. [ 1993 (8) TMI 293 - CALCUTTA HIGH COURT] held the Assessing Officer can ignore the municipal valuation for determining annual letting value if he finds that the same is not based on relevant material for determining the fair rent in the market and there is sufficient material on record for taking a different valuation Assessee relied on the valuation as determined by the Municipal authority way back in 1994 and in our opinion the said valuation is not at all relevant nor is a base to determine the valuation of the property relating to the assessment year under consideration i.e. F.Y 2010-11 (A.Y 2011-12). Accordingly the Assessing Officer did not accept such valuation and proceeded to elicit information from relevant websites and deputing his Inspector basing on which he determines the annual rental value for the said flat at ₹ 7,20,000/-. In our opinion, the Assessing Officer rightly ignored the valuation determined by the municipal authority in the year 1994.
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2019 (11) TMI 544
Addition being a difference in the total receipt of the assessee as per TDS certificate and return of income filed - assessee has been consistently following mercantile method of accounting - HELD THAT:- When the assessee has been consistently following the mercantile system of accounting which has been accepted by the Revenue, converse view cannot be taken by the Revenue as the Revenue is required to follow the rule of consistency as has been held by the Hon ble Apex Court in the case of Radhasoami Satsang vs. CIT [ 1991 (11) TMI 2 - SUPREME COURT] . Moreover, the entire exercise is revenue neutral because the assessee has paid the tax in 2007-08 when the income was actually accrued to him. AO to verify the facts inter alia that the assessee has offered the amount of tax qua the commission received during the year under assessment, when the income was accrued and has paid income-tax thereon in AY 2007-08, qua the same amount of which TDS was deducted in 2006-07; that no loss has been accrued to the Revenue because the assessee had paid the dummy tax during the year under assessment and paid actual tax on receipt of actual payment; that each payee of the commission had deducted TDS on the amounts paid/discharged as service-tax by the assessee and as such assessee is entitled to the benefit of TDS deducted on that account to the tune of ₹ 1,64,564/-. If the aforesaid facts are verified to be correct then addition made by the AO is not sustainable and is required to be deleted. Consequently, Grounds No.B, C, D E are determined in favour of the assessee in the above terms.
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Benami Property
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2019 (11) TMI 534
Jurisdiction of the Initiating Officer to initiate the investigation - Benami transactions - Section 26 (3) of the Prohibition of Benami Property Transactions Act, 1988 - Standard Operating Procedure (SOP) - CBDT Notification S.O. 1621(E) dated 18.05.2017 - HELD THAT:- This SOP was issued prior to the issue of Show Cause Notice under Section 24(1) of the PBPT Act, 1988. In the said SOP at Para No.4 the jurisdiction of I.O., Approving Authority and Administrator has been defined. It is on record that at this point of time the address of the Benamidar i.e. M/s. DSIPLwas at Ghaziabad which is coming under the jurisdiction Joint Commissioner of Income-Tax/Additional Commissioner of Income-Tax, (Benami Prohibition), Kanpur. It is undisputed that the properties are situated in Noida, Greater Noida, in the District of Ghaziabad within the jurisdiction of the same authority. It is clear that the I.O. had no territorial jurisdiction to issue the Show Cause Notice to any of the parties. The Competent Authority is the I.O. under the JCIT/Additional CIT, BPU Unit, Kanpur as per the areas defined under the said notification of CBDT. In the present case none of the criteria prescribed in Para 4 of the SOP is fulfilling. The Ld. Adjudicating Authority appears to have not considered this in proper prospective and hence passed the impugned order. In view of the aforesaid two documents and on the basis of foregoing reasons stated above, we are of the considered view that the I.O., Mumbai ought not to have issued show cause notice and taken up enquiry/investigation in the matter. The Competent Initiating Officer, having jurisdiction, is at liberty to initiate appropriate proceedings in accordance with law - the appeals are not decided either on merit or on any other issues except the territorial jurisdictional authority of Initiating Officer issuing show cause notice and subsequent actions on the basis of said notices - appeal allowed.
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Customs
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2019 (11) TMI 576
Permission for withdrawal of SLP - Time limit for issuance of SCN - Seizure/Detention of goods - HELD THAT:- The Special Leave Petition is dismissed as withdrawn.
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2019 (11) TMI 575
Valuation of imported goods - whether the impugned order of the tribunal without considering the report of and materials relied upon by the Directorate of Revenue Intelligence regarding the value of the goods and in its interpretation of the Customs Valuation (Determination of Value and Imported Goods) Rules, 2007 was erroneous in law and perverse? HELD THAT:- Considering the submissions made by learned counsel appearing for the appellant and the Directorate of Revenue Intelligence regarding impleadment of the Directorate as a party in the appeal, we are of the view that this prayer cannot be acceded to as the appellant and the directorate are authorities directly under the central government. List the appeal for hearing on 8th January 2020.
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2019 (11) TMI 574
Principles of Natural Justice - Cross-examination of two co-noticees of this appellant company, were not allowed - demand of differential duty - HELD THAT:- It appears from the facts of the case that while adjudicating the show cause notice, the Commissioner of Customs might have not relied upon the statements of Shri Vineet Saluja or Shri Pradeep Sharma. The process of adjudication of the show cause notice in question is yet to be completed - As and when the show cause notice is adjudicated upon and final order in original is passed, this appellant can always challenge the said order in original inter alia on the ground that the cross-examination of Shri Vineet Saluja and Shri Pradeep Sharma were not allowed. As and when final order in original is passed, this appellant always have an opportunity to prefer an appeal and to challenge the order in original on one more ground of non-availability of cross-examination. Beyond this, nothing is required to be observed by this Court. Appeal dismissed.
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2019 (11) TMI 573
Revival of appeal before CESTAT - Appeal was dismissed for failure to pre-deposit the amounts as directed under Section 129E of the Customs Act, 1962 - changed circumstances - HELD THAT:- This application which is made before us on the basis that the changed circumstances would warrant the setting aside of earlier orders of the Tribunal, dismissing the Petitioner s appeal, has not been made before the Tribunal. It is only after such an application is made to the Tribunal and it considers the application for restoration of its appeal on account of having paid the entire penalty and the application is disposed of by an order, that the occasion to approach this Court can arise. There is no order of the Tribunal on the changed circumstances asserted by the Petitioner. The Petitioner has chosen to directly to come to this Court without making any application to the Tribunal. This we do not appreciate. If there are changed circumstances, which according to the Petitioner, warrant the earlier order being re-called then the party has to move the Tribunal whose order is sought to be re-called before moving this Court - We are certain that if the Petitioner does move the Court, the Tribunal, on consideration of all facts, would take appropriate decision on such an application. Petition dismissed.
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2019 (11) TMI 572
Maintainability of appeal - refusal to hear the Appeal filed against the decision/order of the Deputy Commissioner dated 12-4-2016, which conveyed to the Assessee, a clarification issued by the Central Board of Excise Customs on 22-12-2015, by quoting the same in the said communication dated 12-4-2016 - HELD THAT:- The Tribunal erred in not entertaining the Appeal on merits. The Learned Commissioner (Appeals) vide order dated 27-2-2015 had directed the Departmental authority to seek suitable clarification from the Board, which was done and the Board issued the clarification on 22-12-2015 which was conveyed to the Assessee by Deputy Commissioner of Customs vide Communication dated 12-4-2016. The said communication cannot be said to be an adjudicating order or decision and it does not decide the rights of the parties - Hence, the Tribunal ought to have decided the Appeal on merits and in accordance with law instead of relegating the Appeallant to Commissioner (Appeals) again by observing that the appropriate Appellate Authority for any decision/order of the Deputy Commissioner dated 12-4-2016 would only be the Commissioner (Appeals). The Tribunal which is a fact finding body ought to decide the case on merits, taking into account the alleged clarification issued by the Board itself, instead of unnecessarily rejecting the Appeal, by citing such as the aforesaid reason - the Tribunal should decide the Appeal on merits and as per law. Appeal allowed - the order of the Tribunal dated 1-1-2019 is set aside, by restoring the appeal back to the Learned Tribunal to decide the Appeal on merits and in accordance with law.
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2019 (11) TMI 571
Provisional release of seized goods - kerosene - rejection of classification adopted by the respondent - this Court is of the considered view that an order of provisional release should not be entertained at this juncture and more particularly, when the show cause notice dated 26-10-2018 has already been issued - HELD THAT:- This Court, while allowing the appeal and setting aside the order passed by the Learned Single Judge in the present writ petition, is inclined to issue an appropriate direction for the conclusion of adjudication of the said show cause notice. The respondent herein - writ petitioner is directed to complete the adjudication of the said show cause notice dated 26-10-2018 on or before 16-4-2019 - Appeal allowed by way of remand.
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2019 (11) TMI 570
Imposition of penalty u/s 112(a) for ₹ 5 lakh and Section 114AA of CA - it was alleged that the appellant being a Chartered Engineer issued a Certificate in respect of import of embroidery machine under EPCG whereas the machines were not installed and diverted - HELD THAT:- The whole purpose of requirement of the Certificate from the Chartered Engineer is that machine which are imported under EPCG have been installed in the factory. Only on that basis the benefit of EPCG exemption is available to the importer. Without verifying the fact that the machines are installed in the factory the appellant was facilitated to evade Customs duty, therefore, there is a serious offence on the part of the appellant. The appellant is rightly liable for penalty under Section 112(a) and 114AA. However, considering the fact that the appellant have been kept away from the business for three years, as per the document submitted by the Ld. Counsel issued from the Institute of Engineers India dated 28-11-2017, the appellant have suffered as he could not carry out his profession for 3 years, hence, the appellant deserves a leniency - quantum of penalty reduced. Appeal allowed in part.
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2019 (11) TMI 569
Concessional rate of duty - determination of date of Import - time limitation - extension of re-export bond period - whether for the purpose of computing the period of 6 months or one year, the date of actual clearance/import of goods should be taken as date of import or the date on which the Bill of Entry was filed by the importer? - Benefit of N/N. 158/95-Cus., dated 14-11-1995 HELD THAT:- The concessional rate of duty prescribed is 15% of the aggregate of the duties of Customs, which would be leviable, in case of goods which are re-exported within six months of the date of importation. In case, the goods which are re-exported after six months, but within one year of the date of Importation, the rate of duty chargeable would be 30% of the aggregate of the duties of Customs. Therefore, the eligibility for partial exemption is dependent on the period of retention by the importer - Though the goods were entered for export on 23-8-2007 as per shipping bill, the permission for export is extended only on 1-9-2007. As the goods could have been cleared on import only after paying Customs duty, the earliest such is 18-9-2006 and with depositing of 30% of the aggregate duties of Customs, the importer was eligible to retain the goods for one year. In determining of one year, the original authority and appellate authority seem to have gone by date of filing of bill of entry even though the notification is silent on that. The assumption cannot be accepted that since the only provision that refers to relevant date for import is in Section 15 but that is for the limited purpose of determining rate of duty or tariff valuation. For other purposes, the general understanding of importation should apply. Goods cease to be treated as imported once they are cleared for home consumption. The date on which that happens should apply for determination of relevant date when the notification does not prescribe relevant date - There is, therefore, no reason to deny them the benefit of duty exemption as goods have been re-exported within one year from the date of clearance. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 568
Quantum of Merchant Overtime Fee Charges to the Customs Officers - benefit of N/N. 69/98-Cus. (N.T.), dated 4-9-1998 - Circular No. 101/2003-Cus., dated 5-12-2003 - appellant submits that irrespective of the number of documents required to be checked by the Customs Officers, the payments would relate only to the number of hours spent by the officer whereas Revenue submits that the above clarification issued by the Board is not in reference to the number of AREs-1 relating to each and every export but the same refers to only the number of documents in each AREs-1 which may be multiple in number. HELD THAT:- There are no force in the contention of the Ld. Advocate. Admittedly, the said clarification is in respect of the number of documents of each importer/exporter in respect of the value or of the consignment. The same, nowhere, clarifies that irrespective of the number of exports consignments, the payment would still be required to be paid on the basis of the time spent by the officer. In any case, the said para 4 of the clarification relates to the services provided to the number of importers/exporters and their documents during that period and cannot be considered to be a clarification on the legal issue, i. e., Merchant Overtime Fee Charges required to be paid singly in respect of the number of AREs-1 filed by the Officers. Appeal dismissed - decided against appellant.
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2019 (11) TMI 543
Interest on the delayed refund of Anti Dumping Duty - Relevant time for calculation of interest - calculation of interest from the date of expiry of three months from the making of the applications for refund - HELD THAT:- The Petitioner is entitled to grant of interest in terms of Section 27A of the Customs Act, 1962 i.e. from the expiry of three months, on amount of ₹ 39,46,441/- from the date of the application for refund of the said amount i.e. 18.01.2013 onwards, till the amount was refunded on 27.02.2018. Similarly, the Petitioner is entitled to interest on the amount of ₹ 24,61,739/- from 27.02.2013 onwards till the date of refund i.e. 27.02.2018. After the review, the DA recommended levy of ADD, and the Central Government accepted the recommendations and levied ADD vide notification No. 15/2013-Cus (ADD), dated 03.07.2013. It is to be noted that the Notification No. 15/2013 Cus does not anywhere state that it has retrospective effect, therefore the aforesaid notification No. 15/2013 Cus only has prospective effect with effect from 03.07.2013. Thus during the relevant period in the present case, the ADD was not chargeable. The delay in release of the refund claim of the petitioner was not justified and it could not be said that the refund application was made pre-maturely - the Respondents are directed to pay the interest on the aforesaid amounts in terms of Section 27A of the Customs Act within the period of 8 weeks from the date of receipt of the copy of this order - petition disposed off.
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2019 (11) TMI 542
Levy of Anti-dumping duty - sodium saccharin - benefit of N/N. 41/2007 - case of appellant is that the demand is time-barred as the goods were imported; goods were examined and tested and were provisionally released against bond; provisional assessment was finalised and test bond was cancelled on 13-11-2009, show cause notice was issued on 21-10-2010 which is beyond six months. HELD THAT:- The N/N. 41/2007 136/2009 mentions the item to be only saccharin falling under Tariff item 2925 11 00 and not Salts of Saccharin - unless the notification is suitably worded cannot be claimed to be of all grades importantly, when Anti-Dumping Duty notification mentions the names of only the saccharin, it cannot be read to include its salts also. The notification did not intend to levy Anti-Dumping Duty on salts of saccharin as submitted by the appellant - the N/N. 82/2001 Customs dated 30-7-2001 imposing Anti-Dumping Duty on Theophylline, Caffeine and Salts, it is not the case by the department that the impugned notification are similarly worded. Extended period of limitation - HELD THAT:- The department has assessed the goods on provisional basis after obtaining a test report, the assessment was finalised and the bond was cancelled under such circumstances, suppression of fact etc. cannot be alleged to invoke extended period of limitation - the SCN is barred by limitation. The anti-dumping duty is applicable to only Saccharin and not salt of Saccharin - Appeal allowed - decided in favor of appellant.
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Insolvency & Bankruptcy
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2019 (11) TMI 541
Admissibility of application - initiation of CIRP - Corporate Debtor failed to make repayment of outstanding amount - Section 7 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In exercise of inherent power conferred upon this Appellate Tribunal under Rule 11 of the NCLAT Rules 2016, we accept the Terms of Settlement and set aside the impugned order dated 10th July, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi in Company Petition No. (IB)-1069 (PB)/2018. The order (s) passed by Ld. Adjudicating Authority appointing Interim Resolution Professional , declaring moratorium and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action taken by the Resolution Professional are set aside - application disposed off as withdrawn.
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2019 (11) TMI 540
Maintainability of application - initiation of CIRP - application rejected on the ground of pre-existing dispute between the parties - Corporate Debtor in their suit filed, reflected a loan of 1,98,03,609.84, which suit has been filed after four months after the Demand Notice was issued u/s 8(1) of the Insolvency Bankruptcy Code (I B) Code - HELD THAT:- Apart from the fact that the suit has been filed by Respondent, subsequently, we find that in the said suit the Corporate Debtor has claimed that it is liable to recover a sum of ₹ 3,15,99,172.84 with penal and future interest @ 18% p.a. The aforesaid fact shows that there is a pre-existing dispute which is also corroborated and which was filed by Corporate Debtor - impugned order upheld - appeal dismissed.
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Service Tax
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2019 (11) TMI 567
Refund of service tax - time limitation - export of services - commission paid to overseas agents - claim was rejected on the ground that the claim pertaining to the period October 2008 to December 2008 was filed on 28.05.2009 i.e. within the period of six months as prescribed in notification however, without the duty paying challans which was dated 11.08.2009 - HELD THAT:- In the appellant s own case, the issue has been decided by the Tribunal in M/S SOPARIWALA EXPORTS PVT LTD VERSUS CCE ST- VADODARA-I [ 2018 (5) TMI 1460 - CESTAT AHMEDABAD] where it was held that the refund claim cannot be rejected on the ground of time bar, since, they have complied with the condition of filing the refund claim within 6 months from the date of export of goods for the relevant quarter i.e. from July, 2008 to Sept., 2008. Refund allowed - appeal allowed - decided in favor of appellant.
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2019 (11) TMI 566
Refund of service tax - unjust enrichment - section 11B of CEA - SCN was issued detailing unjust enrichment provisions in Section 11B as well as on the ground that sub-contractors are liable to pay service tax as well as main contractor - HELD THAT:- The Commissioner (Appeals) should have decided the matter only on the aspect of unjust enrichment as all other issues were either not raised at the first stage of SCN or settled in favour of the appellant. Though the appellant claimed that they have submitted various records however there is no particular records which show that incidence of service tax initially borne by the appellant was not passed on any other person. The fact remains that the sub contractor has charged the service tax and the same was reimbursed by the appellant to the sub contractor. The provision of the service tax was clearly made as expenditure in the books of the appellant - Even though I agree that merely because the service tax amount was shown as expenses that alone cannot establish that the incidence was passed on. However once the service tax amount is booked as expenditure then the burden to prove that the same was not passed on become heavy on the assessee. Though the service tax paid by the sub contactor though initially borne by the appellant and reimbursed the same to the sub contractor the treatment of the service charge as well as the service tax is same and the total value of service including service tax stand merged with the overall contract value of the appellant which was charged to their client. Therefore, in absence of any direct evidence it was not established that the incidence of service tax for which the refund was sought for has not been passed on to any other person - the refund is clearly hit by unjust enrichment. Appeal dismissed - decided against appellant.
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2019 (11) TMI 565
Nature of activity - service or not - Levy of service tax - service of erection and installation are provided by the foreign party to the appellant - reverse charge mechanism - N/N. 19/2003-ST dated 21/03/2003 - HELD THAT:- The entire transaction is of purchase of imported bubble wrap machines. The appellants have discharged custom duty considering the total value of machine shown in the invoice. There is no separate charge for service such are erection and installation of such machinery. On the total value of the invoice, Custom duty was paid. The erection and installation is incidental to the sale/supply of the machine. Therefore, the entire transaction is of sale and purchase of the machine and, hence, no service is involved. Therefore, no Service Tax can be demanded. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 564
Recovery of the service tax amount collected from the customer - Invocation of Section 73A of the Finance Act, 1994 - recovery sought on the ground that the appellant had claimed the benefit of N/N. 24/2007-ST dated 22.05.2007 and the benefit of the said notification was availed by the appellant, was not passed on to the customer - HELD THAT:- It is an admitted fact on record that the disputed amount in question was paid back by the appellant to its customer subsequent to issuance of the show cause notice. Thus, under such circumstances, it cannot be said that the provisions of Section 73A ibid should be applicable for recovery of such amount, considering the same as a collection of excess service tax from the customer. Under an identical situation, this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS VINAYAK AGROTECH LTD. [ 2012 (5) TMI 524 - CESTAT, NEW DELHI] where it was held that In terms of the provisions of Section 11D, the respondents have collected any duty from their customers representing the same as excess duty. As such, demand in terms of Section 11D is not required to be confirmed against the respondents. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 563
Waiver of penalty - short paid service tax paid later - intent to evade or not - HELD THAT:- Nowhere the appellant has made any defence regard the short fall of service tax paid by them. If the same is not detected by the Revenue, the said short fall remains a short fall of service tax which the appellant would have enjoyed - As the short fall has come during the investigation itself and the appellant did not explain the reasons and kept lingering on the matter for two years, in that circumstance, melafides of the appellant have been established by the Revenue. The appellant is not entitled for any relief from this Tribunal - Appeal dismissed.
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2019 (11) TMI 562
100% EOU - Refund of service tax - export of services - applicability of Section 11B of the Central Excise Act, 1944 - HELD THAT:- This Bench after considering the plea of the Ld. Consultant Shri. S. Ramachandran that the payment of service tax in respect of Renting of Immovable Property was by mistake however, concluded, that the refund could not be claimed under Rule 5 ibid - It is surprising to note as to how the adjudicating authority chose to read conclusion as direction, which was not there, in her order dated 31.10.2017 as to the filing of a separate claim under Section 11B ibid. She has also gone farther, when she concludes that clause (ec) to Explanation B of Section 11B ibid would come to the rescue of the appellant. The appellant consciously filed its application for refund under Rule 5 ibid and even though there were no such directions by this Bench, it impressed upon the adjudicating authority to obtain an order and succeeded. The appellant taking a cue from the earlier order of this Bench that Rule 5 ibid could not be invoked, chose to file an application under Section 11B ibid. It is intriguing to find that no appeal was filed against the first order of this Bench which rejected the appellant s claim made under Rule 5. However, in the subsequent order of this Bench which has been extensively relied by the appellant, this Bench has concluded that the denial of refund under Rule 5 of the CCR, 2004 was not justified. Appeal dismissed.
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2019 (11) TMI 561
Demand of service tax - works contract service - reverse charge mechanism - demand of interest and penalty - HELD THAT:- The revenue could not establish the said service as works contract service throughout the proceedings - the demand as also interest and penalty set aside related to confirmation of service tax on works contract service under reverse charge mechanism from the appellant who is service receiver. The document produced before the Original Authority established that the said service was repair and maintenance service . The issue is no more res-integra and stands settled by this Tribunal s decision in the case of SIEMENS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY [ 2013 (2) TMI 609 - CESTAT CHENNAI] wherein it was held that if the adjustment of excess paid amount is denied then there will be twice payment of service tax for the same service. relying on the earlier decision of this Tribunal, the demand of ₹ 29,631/- along with interest and penalty is not sustainable. The issue of payment of interest of ₹ 247/- which has not been pressed by the appellant. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 539
Exemption from service tax - Works Contract Services or Commercial or Industrial Construction Services? - construction of railway lines for private parties and construction of private roads - case of the revenue is that both CICS and WCS exclude railways or roads - Demand of interest and penalty as well - HELD THAT:- In respect of one of the appeals herein viz., M/S UNITED RAIL ROAD CONSULTANTS PVT LTD VERSUS COMMISSIONER OF CUSTOMS CENTRAL EXCISE SERVICE TAX, HYDERABAD-III [ 2019 (6) TMI 1409 - CESTAT HYDERABAD] has decided that the charging section of works contract under section 65(105)(zzzza) of the Finance Act, 1994 excludes railways. Since it does not qualify the term by saying railways for public carriage or railways by the Government , it was held that the term railways includes any form of railways in the absence of any stipulation to the contrary in the charging section - the charging section under CICS is also identically worded and find no reason to take a different view. Demand of interest and penalties - HELD THAT:- In both CICS and WCS the exclusions from railways, roads, dams, etc., extends to all forms of railways, roads, dams, etc., in the absence of any word restricting them to public railways, public roads, public dams etc. Consequently, demands raised in all these appeals must fail. Since the demands are themselves not sustainable, there is no question of any interest or penalty being imposed for non-payment of service tax. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 538
Refund of service tax - time limitation - refund claims has been rejected as time barred filed under N/N. 27/2012-CE N.T dated 18.06.2012 - period April 2016 to June 2016 and January 2016 to March 201 - refund rejected on the ground that the foreign remittances were received prior to one year from the date of filing the refund claims are barred by limitation in terms of the Notification - HELD THAT:- In the cases, in hand, the refund claim required to be filed on quarterly basis in terms of Rule 5 of CCR, 2004. Therefore, the appellant were required to file refund claims within one year from the date when the quarter ends and the same view was taken by this Tribunal in the case of M/S. NEO GROUP SERVICES INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX, BENGALURU EAST [ 2018 (11) TMI 978 - CESTAT BANGALORE] . The refund claims filed by the appellant are in time - Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 537
Refund of service tax - benefit of N/N. 41/2007-ST dated 06.10.07 - rejection of refund on the ground that the appellant has not exported the goods, the services for which the refund claim has been filed i.e. transportation of goods from their factory premises to the port of export and terminal handling charges at port are not port services and the documents produced by the appellant are not in their name for availment of Cenvat credit. Denial of refund on the ground that the appellant has not produced the proof of export - HELD THAT:- As it is a case of revenue that appellant has not exported the goods, in that case, the adjudicating authority was not required to go into the issue no. 2 3 and straight way could have rejected the refund claim as they have not exported the goods, but it is evidence on record that the appellant has filed the refund claim after export of the goods and the same is evident from the records placed before the authorities below while filing the refund claim but the adjudicating authorities below did not bother to see the documents filed by the appellant and in routine manner rejected the refund claim which is not appreciable. Denial of refund claim, on the ground that the services for which the appellant has availed Cenvat credit are not port services - HELD THAT:- The appellant has availed cenvat credit of transportation services from their factory to the port of export and CHA services availed at port. Without availing the services, the appellant cannot export their goods, therefore, they paid their service tax and availed Cenvat credit and nowhere Cenvat credit has been denied to the appellant by way of adjudication, in that circumstances, at the time of claiming refund claim the same cannot be disputed - As these are input services for export of goods by the appellant as port services, the appellant is entitled to avail into claim refund. The another ground for denial of refund claim is that the invoices are not in the name of the appellant - HELD THAT:- The appellant has availed the services and the availment of the services has not been challenged by the Revenue by any mode i.e by rejection of availment of service or by way of adjudication, nor the show cause notice has been issued for that, in that circumstances, at the time of claiming refund it cannot be said that the appellant has not produced the document whereas in the adjudication order itself, it has been recorded by the adjudicating authority that the appellant has been able to show indirectly that they have availed these services, therefore, refund claim cannot be rejected. Refund allowed - Appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (11) TMI 560
Principles of Natural Justice - cross-objection was rejected - reversal of CENVAT credit - electricity weld out to sister concern and also excess power generated and made over to the AVVNL - HELD THAT:- This Court is of the opinion that CESTAT correctly noticed the appellant s grievance that it was sought to be penalized in respect of an assumed wrong doing even though according to it the credit had been reversed at the appropriate stage, in respect of an electricity weld out to AVVNL. The Court is of the opinion that the assessee s cross-objections have to be heard afresh and decided on its merits. The impugned order is therefore set aside to that extent and the matter is remitted to the CESTAT which shall issue fresh notice and hear the parties - appeal allwoed by way of remand.
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2019 (11) TMI 559
CENVAT Credit - input - cement used as an input to stabilize hazardous waste generated in the manufacture of its final products zinc and lead - period of April 2013 to September 2013 - HELD THAT:- The interpretation of the CESTAT of the expression input as covering all goods used in a factory by a manufacturer of any final product - as evident from the words final product , re-enforces the intention of rule making authority to expand the definition and provide the benefit of input credit even to the processes which are not intrinsically covered or do not have a direct link with the manufacture of the final product. This aspect assumes significance in the present case since the input is used to stabilize a by-product, a hazardous waste, which is not permitted to be handled and transported without stabilizing, under the other laws. The use of cement as a stabilizing agent in the factory at the stage of treatment of hazardous waste can be said to be goods used in the factory by the assessee/manufacturer of a final product - appeal dismissed - decided against appellant.
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2019 (11) TMI 558
Captive Consumption - manufacture of non-excisable goods - Exemption under N/N. 67/95-C.E., dated 16-3-1995 - by-product - carbon dioxide generated as a by-product in the manufacture of alcoholic liquor - petitioner uses the said carbon dioxide in the further manufacturing process to produce alcoholic liquor for human consumption (beer) - it is also alleged that SCN issued without jurisdiction - HELD THAT:- While it is trite that this Court would not normally entertain a Writ Petition impugning a show cause notice issued under a taxing statute, the exceptional cases in which this Court would interfere would include instances where the statutory authority is seen transgressing the limits of its jurisdiction while issuing a show cause notice. The contention of the Learned Senior Counsel for the petitioner being that the show cause notice is issued without jurisdiction, the matter needs to be examined in that light. In the instant case, the final product manufactured by the petitioner company being beer, which is an alcoholic liquor for human consumption, the manufacturing process cannot be seen as coming under the purview of the Central Excise Act. The levy of Central Excise duty is not attracted in such cases, where a by-product emerges in the course of manufacture of non-excisable products and the captive consumption of the said byproduct is only intended to efficiently manufacture a non-excisable product - Inasmuch as the final product emerging from the factory of the manufacturer is not excisable (as opposed to exempt or cleared at Nil rate of duty), Ext. P1 show cause notice has been issued on an erroneous premise and without jurisdiction. The Writ Petition is therefore allowed by quashing Ext. P1 notice as one issued without jurisdiction.
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2019 (11) TMI 557
International Competitive Bidding - benefit of deemed exports under Notification No. 1(FT)/DEA/2010 dated 5th May, 2010 - only ground raised for rejecting the claim for exemption from terminal excise duty is that the petitioner did not comply with the conditions of the Customs Notification. HELD THAT:- Once the petitioner complies with the requirements of the Notification issued in terms of Rule 19 of the Central Excise Rules, 2002, then his entitlement for the benefit of exemption from terminal excise duty has to be recognized in accordance with the provisions of Chapter 8 of the Foreign Trade Policy read with the Central Excise Rules - Ext.P8 communication, to the extent it denies the benefit of exemption from terminal excise duty to the petitioner, for removal of the two transformers, cannot be legally sustained. The petitioner is entitled for exemption from terminal excise duty in respect of the supplies of the two transformers - Petition allowed.
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2019 (11) TMI 556
Captive Consumption - the appellant was using cement within their factory without payment of duty - Denial of exemption under Notification No. 67/95-CE dated 16th March 1995 - Demand for the reasons given therein the appellant s claim that exemption in terms of Notification No. 67/95-CE was incorrect and therefore sought to recover the same along with applicable interest and penalty - HELD THAT:- The capital goods or goods as the case may be, are granted exemption from duty if the same are manufactured in a factory and used within the factory of production in or in relation to manufacture of final products . It is therefore clear that it is not necessary that cement in the case on hand is required to be necessarily used in the manufacture, it is also sufficient if cement is used in relation to the manufacture of final product. The denial is incorrect and cannot be sustained - Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 555
CENVAT Credit - credit denied on the ground that the appellants have received only invoices and not the goods as per the statement of one Sh. Amit Gupta who was investigated by DGCEI - HELD THAT:- Revenue has failed to prove that if the said inputs have not been received in their factory, then from where the inputs have been replaced by the appellants against those invoices - also M/s Prime Metalloys Pvt Ltd have specifically mentioned that they have supplied the goods to the appellant. In the absence of any contrary evidence to the above facts, the Cenvat credit cannot be denied to the appellant - the investigation conducted by the DGCEI in this case is not proper and having various infirmities, the benefit of doubt goes to the favour of the appellants - Cenvat credit cannot be denied to the appellant. Penalty - HELD THAT:- As Cenvat credit cannot be denied, therefore, no penalty can be imposed on the appellants. The investigating team has issued the show cause notice only on the basis of pick and choose method without proper investigation. In that circumstance also, the impugned investigation is not sustainable against the appellants - Appeal allowed.
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2019 (11) TMI 554
Method of Valuation - applicability of Rule 4 of the Central Excise Valuation Rules, 2004 or Section 4(1)(a) of the Central Excise Act, 1944? - Valuation - physician samples cleared by the appellant - sale of such samples on principal to principal basis to customers - clearance of physician samples manufactured on job work basis (loan licensee) to the principal manufacturer - appellants are determining the value of the medicaments sold to their customers by adopting the transaction value under Section 4(1)(a) of the Central Excise Act, 1944 when the goods were sold, but when it was manufactured on job work basis (loan licensee) valued the same by taking the cost of production + 10% as provided in Rule 8 of the Central Excise Valuation Rules, 2000. Revenue disputed the method of valuation and alleging that the physician samples cleared by the appellant should have been valued in accordance with Rule 4 of the Central Excise Valuation Rules, 2000 by adopting the pro rata value of the trade pack of the medicaments. HELD THAT:- This Tribunal following the ratio laid down by Hon ble Supreme Court in COMMR. OF CENTRAL EXCISE CUSTOMS, SURAT VERSUS M/S SUN PHARMACEUTICALS INDS. LTD. ORS. [ 2015 (12) TMI 670 - SUPREME COURT] observed that whatever goods were sold by the appellant to their principal is correct transaction value in terms of Section 4. In both type of clearances in any circumstances, Rule 4 valuation shall not apply. Appeal allowed - decided in favor of appellant.
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2019 (11) TMI 536
CENVAT Credit - input services - Guest House - period October 2009 to March 2015 - denial on the ground that the guest house maintained by the appellant which has been taken on rent is not an input service - HELD THAT:- As contended by the appellant, the guest house has been used by the foreign technicians who used to visit their factory for technical assistance which ultimately resulted in production of their final goods, in that circumstances, the stay of technicians is used for manufacturing activity and the same is eligible as input service in terms of Rule 2(l) of CCR, 2004. Credit allowed - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2019 (11) TMI 553
Compliance with the pre-deposit - adjustment of duty paid under protest during investigation - MVAT Act - whether the amount of duty (which was paid under protest) should be considered for the purpose of computing the 10% mandatory pre-deposit required for filing the appeal in accordance with the Section 26(6A) of the MVAT Act? HELD THAT:- In the present case, the appeal is against an order. That order is an order passed under section 23. If it is that order which is appealable, then, all the sub-sections of section 23 and the assessment proceedings cannot be lost sight of. If already some amounts are paid, albeit under protest, they would be adjusted against the total tax liability and the demand to follow. The order, therefore, is a composite one - In the instant case, that order, copy of which is annexed to the petition, is passed by the Deputy Commissioner of Sales Tax. He had before him the request of the petitioner and the reply to the show cause notice, wherein, he was called upon to complete the VAT/CST assessment along with the entry tax for the financial year 2013-2014. It is, therefore, clear that if the petitioner/ appellant is aggrieved by it, it is an order of assessment. At the end of the assessment, there is a tax liability. That is crystallised and a notice of demand is issued to the petitioner. When the appeal is against such a tax liability, the petitioner cannot contend that because a paltry amount was deposited under protest prior to the assessment and at the time of investigation, that be adjusted against the pre-deposit contemplated by section 26(6A) of as compliance with subsection (6A) of section 26 of the MVAT Act. If this argument of Mr. Sridharan is accepted, it would mean that a payment under protest made at the time of investigation to avoid tax liability or to escape assessment would suffice and on the strength of that, the appeal would be entertained despite there being no proof of payment of the aggregate of the amounts as set out in clauses (a) and (b) of sub-section (6A) of section 26 of the MVAT Act. While it is true that payment under protest cannot be regarded as acceptance of the tax liability, that principle has no application to the instant case. It is opined that If the amount is paid within 4 weeks from today, the Appellate Court shall entertain the Appeal and decided it on merits in accordance with law - Petition dismissed.
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2019 (11) TMI 552
Validity of pre-assessment notices - It is the case the of the petitioner that even before Ext.P6 assessment order was passed he had preferred a request for revising the returns filed for the said years so as to correct certain discrepancies that had occurred while filing the returns. HELD THAT:- Inasmuch as for the assessment year 2012-2013 Ext.P6 assessment order has been passed completing the assessment in relation to the petitioner for the said year, permitting the petitioner to now revise his returns for the said year would not be possible. For the said year, the petitioner has to be relegated to his alternate remedy of filing an appeal before the appellate authority for urging his contentions on the merits of the case. If the petitioner prefers an appeal against Ext.P6 order within three weeks from the date of receipt of a copy of this judgment, then the appellate authority shall consider the same as one filed within time and proceed to consider the stay application preferred by the petitioner on merits. Assessment years 2013-2014, 2014-2015 and 2015-2016 - HELD THAT:- The proceedings are now at the stage where Exts.P7, P8 and P9 pre-assessment notices have been issued and the assessment is yet to be completed. It is not in dispute that there are no penal proceedings initiated against the petitioner for the said assessment years, and further, that the petitioner had in fact made a request for revising his return before the respondents - the petitioner in the instant case must be afforded an opportunity to revise his returns for the assessment years 2013-2014, 2014-2015 and 2015-2016. The respondents shall therefore do the needful to open the web portal of the Kerala Value Added Tax (KVAT) so as to enable the petitioner to upload the revised return for the assessment years in question. The Writ Petition is thus disposed by rejecting the challenge against Ext.P6 assessment order and relegating the petitioner to his alternate remedy of filing an appeal before the appellate authority under the Kerala Value Added Tax Act against the said order, and directing the respondents to permit the petitioner to revise the returns for the other assessment years (2013-14 to 2015-16).
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2019 (11) TMI 535
Levy of VAT - Transfer of right to use of telephone instruments provided by the assessee to its subscribers/customers - sale of SIM cards for mobile network service - HELD THAT:- Once the assessee had raised specific challenge as to absence of any transfer of right to use, it was for the Tribunal to have applied its mind and offered reasoning to meet such challenge. Second, had such exercise been gone into, it would have become necessary for the Tribunal to call for and examine evidence including the agreements entered into by the assessee with its subscribers; the bills raised by the assessee on its subscribers and other materials as may have also been relevant to determine the true nature of the contract entered into between the assessee and its subscribers which gave rise to the disputed receipts at the hands of the assessee. If upon examination of such material the Tribunal had reached the conclusion that there was a transfer of right to use, then in that situation a further question would have arisen as to apportionment and determination of the amount received by the assessee as may be attributed towards consideration for transfer of right to use as only that amount may have been subjected to tax. Admittedly, the activity performed by the assessee also involved providing service. Therefore, unless such bifurcation or apportionment is found to be permissible in law and unless such bifurcation was actually done, the exact assessment of the tax liability of the assessee would remain illusive or undetermined. Liability of tax on SIM cards - HELD THAT:- The Supreme Court in the Cases of BHARAT SANCHAR NIGAM LTD. (BSNL) VERSUS UNION OF INDIA [ 2006 (3) TMI 1 - SUPREME COURT] and IDEA MOBILE COMMUNICATION LTD. VERSUS CCE. C., COCHIN [ 2011 (8) TMI 3 - SUPREME COURT] , has held that the matter was remitted to the Tribunal to pass a fresh order - Similar treatment is warranted in the present case as well owing to similarity of law situation. The matter is remitted to the Tribunal to pass a fresh order after affording limited opportunity to the parties to lead additional evidence - revision allowed by way of remand.
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Indian Laws
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2019 (11) TMI 551
Grant of Anticipatory Bail - Allegations against Chartered Accountant - misconduct on the part of Chartered Accountant or not - It is alleged that the petitioner-accused No.1 has prepared the audit report by making use of counterfeit seal of audit firm by name KKP and Company. On registering the case, the Police are making attempts to arrest the petitioner - offences punishable u/s 419, 420, 465, 468, 470 and 471 of IPC - the petitioner strenuously contended that the petitioner has been falsely implicated in this case with vindictive motive - HELD THAT:- The complaint averments disclose that the petitioner was involved in preparing audit report, project report by making use of counterfeit seal of the firm KKP and Company. But, it is pertinent to note that the records produced by the petitioner reveals that the petitioner is a Chartered Accountant and she is practicing at Raibag and she is also dealing with preparing the reports. She is also appointed as Legal adviser to Commercial Tax Department and enrolled as Goods Services Tax practitioner also. It is quite evident that the petitioner has been practicing as a Chartered Accountant, it is needless to make elaborate discussion about these records as the same is not permissible while considering the bail application - this Court is of the view that there are valid grounds to allow the bail petition subject to certain terms and conditions. The petitioner is directed to appear before the Investigating Officer of the concerned police station within fifteen days from the date of receipt of certified copy of this order. On her appearance, the Investigating Officer shall interrogate the petitioner and enlarge her on bail on the same day subject to conditions imposed - petition allowed.
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2019 (11) TMI 550
Dishonor of Cheque - section 138 of Negotiable Instruments Act - cheque cannot be drawn towards discharge of whole or in part of any debt, due to short cheque amount than the dues existing - presumption as to negotiable instruments - Section 118(a) and Section 139 of the Act - HELD THAT:- The respondent has not rebutted the presumption of consideration in issuing the cheque on 2.10.2011 - Once the agent of the respondent has admitted the settlement of due amount and in absence of any other evidence the Trial Court or the High Court could not dismiss the complaint only on account of discrepancies in the determination of the amount due or oral evidence in the amount due when the written document crystalizes the amount due for which the cheque was issued. The accused has failed to lead any evidence to rebut the statutory presumption, a finding returned by both the Trial Court and the High Court. Both Courts not only erred in law but also committed perversity when the due amount is said to be disputed only on account of discrepancy in the cartons, packing material or the rate to determine the total liability as if the appellant was proving his debt before the Civil Court - Therefore, it is presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e., the appellant received the same in discharge of an existing debt. The onus, thereafter, shifts on the accused-appellant to establish a probable defence so as to rebut such a presumption, which onus has not been discharged by the respondent. The respondent is held guilty of dishonour of cheque for an offence under Section 138 of the Act. The respondent shall pay ₹ 10,77,712/- as fine i.e. twice of the amount of cheque of ₹ 5,38,856/- and a cost of litigation of ₹ 1,00,000/- within three months - Appeal allowed.
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