Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
November 18, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
PMLA
Service Tax
Central Excise
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Classification of supply - works contract - pure supply of goods or pure supply of services or composite supply of goods and services - activity of operation and maintenance of Mansi Wakai dam - PHED, a unit of Government of Rajasthan - since all the conditions of composite supply are satisfied, therefore it is a composite supply of works contract - the applicant is eligible for exemption - AAR
Income Tax
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TDS u/s 194H - Commission / brokerage on Air Tickets - Supplementary Commission - Non deduction of tax at source (TDS) at 10% plus surcharge - In light of the consensus between the parties that the travel agents have already paid income tax on the Supplementary Commission, there can be no further recovery of the shortfall in TDS owed by the Assessees. However, interest may be levied under Section 201(1A) of the IT Act. - SC
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Allowable business expenditure/commercial expediency - Considering that the expenditure was in the nature of moneys advanced to the subsidiaries, it cannot be said that there is no intimate connection between the Assessee and the two subsidiaries as far as the business activities are concerned. - Claim cannot be denied - HC
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Validity of faceless assessment u/s 144B - not being granted a fair opportunity of hearing - this court is of the firm view that the principles of natural justice to the aforesaid extent, particularly when the Act itself provides for a procedure for the same, stands violated. - matter restored back - HC
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Default u/s 201(1)/1A - period of limitation - limitation period was substituted from four years to six years for passing orders where TDS Statement had not been filed. - As specifically stated that the said amendment will take effect from 1/10/2014. As observed hereinabove, in the present cases, limitations provided for passing order under section 201(1) of the Act for A.Y. 2011-12 had already been expired on 31/3/2014 i.e. prior to section 201(3) came to be amended by Finance Act No.2 of 2014. - AT
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TDS u/s 194A - addition u/s.40(a)(ia) - Non deduction of TDS - the necessary requirement got fully satisfied once the certificate in the requisite form was obtained by the assessee and placed before the ld. CIT(A) and also the AO (during the course of remand proceedings). - the necessary condition has been satisfied and hence the assessee cannot be treated as an assessee in default. - AT
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Rectification of mistake u/s 154 - levying late-fee u/s 234E which was not leviable for period prior to 01.06.2015 - We find that it is not a case of revenue that the rectification-application u/s 154 against the intimation u/s 200A is absolutely barred in the scheme of the Act. We also observe that when the late-fee is not leviable in the law and on facts, by levying the same the assessees have been fastened with the liability beyond and against the scheme of the Act, which should not happen. - AT
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Revision u/s 263 by CIT - advance gross receipt and the interest receipt - The decision of the AO to allow / accept the advance fees as current liability cannot be stated as unsustainable in law as he has taken a possible view based on application of mind. CIT(E) has not brought any material on record to show that the view taken is contrary to law - AT
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Nature of expenditure - interest expenses - revenue or capital expenditure - whether the interest expenditure is required to be added to the cost of work in progress in case of income being recognized under Percentage of Completion Method - The project constitutes stock in trade of the assessee - Since that assessee had received loan for obtaining stock in trade, it was entitled to deduction u/s 36(1)(iii) of the Act. - AT
Customs
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Prosecution proceedings - Import of goods without valid license - import of ball bearings (restricted items) instead of spare parts of Road Rollers - Necessary sanction of the Collector of Customs for prosecution - Question of sanction according to Mr. Roy may arise at any stage of proceedings even it may arise at the inception of the proceeding as well. - HC
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Rate of Customs duty - Effective date of notification - on the date of bill of entry or date of clearance of goods - u/s 46 of the Act, the rate of duty enforced on the date and the time when the bills of entry presented for home consumption was 40%, the same had been already paid by the petitioner. This by no means could be altered by any power of re-assessment u/s 17 of the Act or at the time of clearance of the goods for home consumption u/s 47 of the Act - HC
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Valuation of imported goods - polished marble slab - the enhanced value once settled and duty having been paid accordingly without protest, importer is estopped from challenging the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. - AT
DGFT
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Export of Red Sanders wood by Forest Environment & Climate Change Department, Government of Odisha - Extension of time to finalize the modalities for export - Notification
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Relief in Average Export Obligation - All Regional Offices are requested to re-fix the Annual average export obligation for EPCG Authorizations for the year 2021-22 - Circular
Corporate Law
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Winding up of company - Payment of remuneration to the liquidator - The Tribunal mainly considered the provisions of IBBI (Liquidation Process) Regulations, 2016 as amended in 2019 which have quoted in para 5 and 6 of the impugned order and passed the order regarding the fees but the Tribunal has not considered the provisions of Ministry of Corporate Affairs dated 24.01.2020 regarding Companies (winding up) Rules, 2020. - Matter restored back - AT
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Maintainability of appeal - Appeal against the consent order - Oppression and Mismanagement - consent order cannot be assailed in appeal - If the Appellant is of the view that his counsel had made incorrect statement before the NCLT, he would be at liberty to approach the NCLT, but he may not be permitted to raise such issue before this Tribunal. - AT
Indian Laws
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Exemption from payment of additional toll under the New Industrial Policy, 2004 and package of incentives for development of industries in Jammu & Kashmir - the petitioner was rightly held not entitled to the benefit of exemption from payment of additional toll chargeable on capital goods imported by it for undertaking substantial expansion of its unit in the year 2006 - HC
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Forfeiture of properties of the first respondent - COFEPOSA - properties and the illegal earnings - The notice proceeds on the footing that once the relationship between the noticee and the detenue is established the property in the hands of the noticee would automatically become illegally acquired property. - a link or nexus is totally absent and no effort or endeavour has been made to establish such link or nexus - HC
IBC
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Initiation of CIRP - Financial creditors - The ‘Event of Default’ declared by the Respondent IDBI Bank has not been declared in accordance with the Inter-se Agreement entered into between participating banks of the Bank of Baroda consortium and the Security Trustee Agreement, and therefore cannot be called a valid ‘Event of Default’. - AT
PMLA
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Seeking grant of Regular Bail - Scheduled offence - The petitioner is a practicing advocate, in that circumstance, the liability of the petitioner for further investigation, interrogation and facing trial is not jeopardized and he is already held to be not at ‘flight risk’ and there is no possibility of tampering the evidence or influencing / intimidating the witnesses, - Bail Granted - HC
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Seeking grant of Regular bail - Money Laundering - embezzlement of government fund - the petitioner is a senior I.A.S officer of the State of Jharkhand. In the departmental proceeding she has been exonerated. - the apprehension of the Enforcement Directorate E.D with regard to tempering with the evidence cannot be ruled out. - The Court is not inclined to grant regular bail to the petitioner at this stage - HC
Service Tax
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Rejection of Refund claim - export of services - Rule 5 of Cenvat Credit Rules - there cannot be any more debit in the cenvat credit register on or after 01.07.2017 due to implementation of the GST regime - The Adjudicating Authority is directed to grant the refund alongwith interest - AT
Central Excise
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CENVAT Credit - valid documents or not - input service distribution - ISD registration is a procedural requirement, therefore, even if there is a lapse of non-obtaining the registration for some period, credit passed on by the Head Office cannot be denied to the appellant. - AT
Case Laws:
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GST
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2022 (11) TMI 787
Reimbursement of differential tax amount arising out of change in tax regime from Value Added Tax (VAT) to Goods and Service Tax (GST) with effect from 01.07.2017 - grievance of the petitioner is that in view of the introduction of the GST, petitioner is required to pay tax which was not envisaged while entering into the agreement - HELD THAT:- The Government has now come out with a revised guidelines in this respect in supersession of the guidelines issued vide Finance Department letter dated 07.12.2017. He has filed Additional Counter Affidavit of O.P.-authority in similar cases annexing the revised guidelines relating to works contract under GST issued by the Government of Odisha, Finance Department vide Office memorandum No. FIN-CTITAX-0045-2017/38535/F Dated 10.12.2018 - In that view of the matter, petitioner shall make a comprehensive representation before the appropriate authority within two weeks from today ventilating the grievance. If such a representation is filed, the authority will consider and dispose of the same, in the light of the aforesaid revised guidelines dated 10.12.2018 issued by the Finance Department, Government of Odisha, as expeditiously as possible, preferably by 02.01.2023. The writ petition is disposed of.
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2022 (11) TMI 786
Levy of penalty of 200% of the alleged tax due - wrong mention on E-way bill as outward supply - Section 129(3) of the Tamil Nadu Goods and Services Tax Act - HELD THAT:- It is submitted that consignment shall be released on payment of penalty of one time tax i.e., 100% tax and it is open to the Petitioner to agitate the rights finally by way of filing an appeal, if they are so advised. The learned counsel for the Petitioner submitted that they are willing to pay one time tax for the limited purpose of release of consignment and submit that the payment of 100% of tax as penalty may be adjusted towards 25% pre-deposit for filing an appeal, which was consented to by the learned Government Advocate for the Respondents. The writ petition stands disposed of with the following directions: (a) The Respondents shall release the consignment on the Petitioner paying 100% tax forthwith. (b) In the event of the Petitioner filing an appeal, 100% taxes paid shall be adjusted towards 25% pre-deposit for filing appeal.
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2022 (11) TMI 785
Rejection of Refund claim - refund rejected on the ground that the application was filed beyond the relevant period under Section 54(1) of the Central Goods and Services Tax Act, 2017 - bar on extension of time limit by Circular No.157/13/2021-GST dated 20.07.2021 - HELD THAT:- The Circular has been superseded vide Notification issued by the Government of India dated 05.07.2022, whereby, the time limit between 01.03.2020 to 28.02.2022 is directed to be excluded for computing the period of limitation for filing refund application under Sections 54 and 55 of the Act. The impugned order dated 21.01.2022 is liable to be set aside and accordingly, it is set aside. The Respondent shall consider the request / application for refund in terms of Sections 54 and 55 of the Act taking into account the Notification No.13 of 2022 Central Tax, dated 05.07.2022 and pass orders in accordance with law - Petition disposed off.
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2022 (11) TMI 784
Classification of supply - works contract - pure supply of goods or pure supply of services or composite supply of goods and services - activity of operation and maintenance of Mansi Wakai dam - PHED, a unit of Government of Rajasthan - benefit of exemption under entry 3 A of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 - HELD THAT:- The nature of contract is such that initial activities under ESCO model is the main service and the other services under O M contact combined with such service are in the nature of ancillary services which help in better operation of main activities under ESCO model and make the model successful. As per contract agreement, stipulated date of start is 11.02.2022 and stipulated date of completion of project/ work order No. SE(proj)/BSW/2021-22/1405-09 dated 11.02.2022 is 10.02.2025 - Works Contract in itself is a composite supply in which construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning etc are involved along with transfer or property in goods. Whether a supply is a works contract or not is dependent on whether the plant or device or property is a movable or immovable property? - HELD THAT:- Under the General Clauses Act 1897 the term immovable property has been defined under Section 3(26) as immovable property shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth - According to definition of works contract under GST regime, the supply of goods and services are done by the supplier simultaneously which is for immovable property. Hence in works contract supply of goods and services together is compulsory. The activities to be undertaken by the applicant in respect of Operation Maintenance of Mansi Wakai dam is a single supply and cannot be treated as distinct supplies, the given work is a contract for improvement of the pumping system under the Mansi Wakai project, wherein transfer of property in goods in the form of new pumping machinery and mechanical/electrical equipment shall be involved in the execution of such contract. It is understood that the properties for which improvement works has been assigned like pump houses, DAM, campus etc. cannot be moved from one site to another - The activities to be undertaken by the applicant in respect of Operation Maintenance is for an immovable property i.e. Mansi Wakai dam and thus the given work is held as works contract. Further, since all the conditions of composite supply are satisfied, therefore it is a composite supply of works contract - the applicant is eligible for exemption under entry No. 3 A of Notification No. 12/2017-CT (R) dated 28.06.2017. In this activity of Composite supply of goods and services if supply of goods is below 25% out of total value of supply then GST will be NIL in consonance with entry No. 3A of Notification No.12/2017-CT (R) dated 28.06.2017 (as amended) and if more than 25% of the total value of supply then GST will be @12% in consonance with entry No. 3(iii) of Notification No. 11/2017-CT (R) dated 28.06.2017(as amended).
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Income Tax
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2022 (11) TMI 783
TDS u/s 194H - Commission / brokerage on Air Tickets - Supplementary Commission - Non deduction of tax at source ( TDS ) at 10% plus surcharge from payments falling under the definition of Commission or Brokerage - Penalty proceedings against the airlines u/s 271C - reasonable cause for the air carriers to have not deducted TDS at the relevant period - Interpretation of Section 194H as introduced by the Finance Act, 2001, with effect from 01.04.2000 - characterization of the income earned by the agent besides the Standard Commission of 7% and whether this additional portion would be subject to TDS requirements under Section 194H - HELD THAT:- If we view the ambit of Section 194H in an expansive manner, the factum of the exact source of the payment would be of no consequence to the requirement of deducting TDS. Even on an indirect payment stemming from the consumer, the Assessees would remain liable under the IT Act. Consequently, the contention of the airlines regarding the point of origination for the amounts does not impair the applicability of Section 194H of the IT Act. Our conclusion in terms of the application of Section 194H of the IT Act to the Supplementary Commission amounts earned by the travel agent is unequivocally in favour of the Revenue. Section 194H is to be read with Section 182 of the Contract Act. If a relationship between two parties as culled out from their intentions as manifested in the terms of the contract between them indicate the existence of a principal agent relationship as defined under Section 182 of the Contract Act, then the definition of Commission under Section 194H of the IT Act stands attracted and the requirement to deduct TDS arises. The realities of how the airline industry functioned during the period in question bolsters our conclusion that it was practical and feasible for the Assessees to utilize the information provided by the BSP and the payment machinery employed by the IATA to make a consolidated deduction of TDS from the Supplementary Commission to satisfy their mandatory duties under Chapter XVIIB of the IT Act. In light of the consensus between the parties that the travel agents have already paid income tax on the Supplementary Commission, there can be no further recovery of the shortfall in TDS owed by the Assessees. However, interest may be levied under Section 201(1A) of the IT Act. As an epilogue to this aspect of the matter, the Assessing Officer is directed to compute the interest payable by the Assessees for the period from the date of default by them in terms of failure to deduct TDS, till the date of payment of income tax by the travel agents. It will be open to the Assessing Officer to look into any details that are necessary for completion of this exercise, including verification of whether tax was actually paid at all by the agents on the amounts from which TDS was supposed to be subtracted. Given that no documentary evidence was placed before us, we are conscious that there may be certain anomalies which the Assessing Officer is best positioned to iron out. In the eventuality that any of the agents have not yet paid taxes on the Supplementary Commission, the Revenue will be at liberty to proceed in accordance with law under the IT Act for recover of shortfall in TDS from the airlines. However, we limit the ability to levy penalties against the Assessees in light of Section 273B of the IT Act. While we reject the arguments of the Assessees on merits in terms of their liability under Section 194H of the IT Act, we hold in their favour on the count of the matter having been rendered revenue neutral due to the apparent payment of income taxes on the amounts in question by the travel agents. The Assessing Officer is directed to expeditiously complete the assignment of determining the interest payable in accordance with the guidelines laid down above, so as to bring a quietus to the litigation. Appeal allowed in part.
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2022 (11) TMI 782
Allowable business expenditure/commercial expediency - Disallowance of claim of expenditure on the ground that it was not incurred wholly and exclusively for the purposes of the business - expenditure incurred by the Assessee in the form of loans and advances to its subsidiaries which were subsequently written off - HELD THAT:- In the present case, while the nomenclature used for the expenditure incurred may have been different during AYs 1989-90 and 1990-91 where it was loans and advances which were subsequently written off, the fact remains that it was an irrecoverable expenditure as far as the Assessee was concerned. In the present AYs as well, what was paid as compensation by the Assessee to the very same subsidiaries was to recoup the business losses of the subsidiaries, and was again irrecoverable as far as the Assessee is concerned. Considering that the expenditure was in the nature of moneys advanced to the subsidiaries, it cannot be said that there is no intimate connection between the Assessee and the two subsidiaries as far as the business activities are concerned. In that sense the decision of the ITAT to allow the expenditure cannot be said to be inconsistent with the dictum of the Supreme Court in Travancore Titanium Products Ltd. [ 1966 (1) TMI 21 - SUPREME COURT ] It must therefore be concluded that the expenditure incurred by the Assessee in the present cases is not only incidental to the business of the Assessee but also necessitated or justified by commercial expediency. Consequently, the Court is not persuaded that the ITAT has in the present cases committed any legal error in answering the questions framed in favour of the Assessee and against the Department.
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2022 (11) TMI 781
Addition on account of difference in receipts as per the Assessee s bank account when compared with the books of accounts maintained by the Assessee - ITAT concurring with the CIT(A) that the AO had failed to verify the evidence produced before him and for not providing adequate opportunity for hearing to the Assessee - As per CIT AO failed to make any sincere effort regarding the aforesaid addition and the same was made only on the basis of doubt, suspicion, conjecture or surmises without affording proper opportunity of being heard to the Assessee - Substantial question of law - HELD THAT:- ITAT and CIT (A), both fact finding authorities have concurrently held that there is no merit in the ground raised with respect to the addition on account of the income declared by the Assessee and the receipts as per the books of account of the Assessee. CIT(A) in its order has set out the information and explanation furnished by the Assessee explaining each of the entries to substantiate its contention that the said amount is not exigible to tax. The CIT(A) has noted that the documentary evidence in support of the said explanation furnished by the Assessee was available on record. ITAT while concurring with the aforesaid finding has held that the Revenue has failed to controvert the said finding of the CIT(A). There is no substantial question of law raised in the present appeal. The Supreme Court in the case of Ram Kumar Aggarwal Anr. vs. Thawar Das (through LRs), [ 1999 (8) TMI 1008 - SUPREME COURT] has reiterated that under Section 100 of CPC, the jurisdiction of the High Court to interfere with the orders passed by the Courts below is confined to hearing on substantial question of law and interference with finding of the fact is not warranted if it involves re-appreciation of evidence.Appellant has not placed any material on record to contradict the aforesaid concurrent finding of facts returned by the ITAT and CIT(A). - Decided against revenue.
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2022 (11) TMI 780
Validity of faceless assessment u/s 144B - Assessee argued not being granted a fair opportunity of hearing in the course of the assessment being made - HELD THAT:- This court is of the opinion that in the instant case also though the petitioner did move an application requesting for a personal hearing on the first day itself on which she was supposed to make her submissions, the impugned order is silent as to why the said request was not considered or why the authorities did not find it proper or necessary for giving an opportunity of hearing to the petitioner. Thus, this court is of the firm view that the principles of natural justice to the aforesaid extent, particularly when the Act itself provides for a procedure for the same, stands violated. The impugned assessment order Annexure P/1, dated 29.09.2022, for the aforesaid reason stands set aside/quashed and the matter stands remitted back to the assessment authority for a fresh consideration after giving an opportunity of personal hearing to the petitioner in accordance with Section 144B(6)(vii) (viii) of the Act of 1961. This court fixes 01.12.2022 for making the petitioner herself available before the Assessment Authority who by that time shall take necessary steps in ensuring all arrangements to be made for personal hearing to be given to the petitioner in respect of the assessment under challenge in the present writ petition. After giving a reasonable opportunity of hearing to the petitioner the authority may pass a fresh order. This court while allowing the writ petition has not entered into the merits of the assessment made by the assessing authority. The authority would be free to take an appropriate decision after hearing the petitioner.
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2022 (11) TMI 779
Addition u/s 69A r.w.s 115BBE - return of income was selected for scrutiny assessment for scrutiny of cash deposit during demonetization period - HELD THAT:- Cashbook clearly shows the opening balance as on 01.04.2016 which has been duly verified and accepted by the AO. Cash flow statement exhibited at page 4 of the Paper Book clearly explains the cash deposit in the impugned bank account. Exhibit 13 is the statement of affairs as on 31.03.2017. We fail to understand as to when availability of opening cash in hand amounting to Rs. 8,34,821/- has been verified and accepted by the AO, then, why the ld. CIT(A) estimated the same at Rs.1 lakh. Further, when cash withdrawals have been duly reflected in the cash book, vis a vis, bank statement for the FY under consideration, why the same was not accepted by the CIT(A) when no defect has been pointed out in cash books, cash flow statement and statement of affairs filed by the assessee? In our considered opinion, once cash flow statement is not controverted by the Assessing Officer as well as the ld. CIT[A], when it was specifically submitted that the same is based on the entries made in the cashbook, then the source of cash deposit in the bank account cannot be discarded by the authorities below. See case of Omni [ 2016 (8) TMI 962 - DELHI HIGH COURT ] We do not find any merit in the addition sustained by the ld. CIT-A - Appeal of assessee allowed.
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2022 (11) TMI 778
Addition u/s 69A - advance received towards purchase of the property - assessee had failed to furnish any evidence of the return of advance to Sh. Gurpreet Singh Chadha during the assessment proceedings - HELD THAT:- It is found that the assessee has produced certain additional documents such as ledger account along with repayment statement duly confirmed by Gurpreet Singh Chaddha and the copy of the bank statement of Gurpreet Singh Chaddha and confirmation of re payment of the advance. The assessee has also enclosed the copy of the ITR and computation of income of Gurpreet Singh Chaddha before the CIT(A). Admittedly, those documents have not been considered by the Ld. A.O., since the assessee has not made available those documents to the A.O. in support of his contention, the A.O. has made addition and passed assessment order based on the material available on record. Since, the assessee has not made available all the documents in support of his contention and the A.O. had no opportunity to test the veracity, genuineness of those documents, we deem it fit to remand the matter to the file of Ld. A.O. with a direction to the assessee to produce all material evidences in support of his contentions that the assessee had repaid the said amount which was received Gurpreet Singh Chaddha. Further we direct the A.O. to consider the same and pass appropriate order in accordance with law after hearing the Assessee. Accordingly, we allow Ground Of the Revenue s Appeal.
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2022 (11) TMI 777
Default u/s 201(1)/1A - period of limitation - TDS u/s 194C OR 194I - Short deduction of TDS - mall owners have collected/recovered expenses in the form of Common Area Maintenance charges on which the deductors/tenants have deducted tax - HELD THAT:- As noted that earlier section 201(3) of the Act as amended by Finance Act, 2012 amended on 28/5/2012 was specifically made applicable retrospectively w.e.f. 1/14/2012, whereby limitation period was substituted from four years to six years for passing orders where TDS Statement had not been filed. However, section 201(3) of the Act as amended by Finance Act No.2 of 2014, as mentioned in the memorandum of the Finance Bill No.2 of 2014 is stated to have effect from 1st October, 2014. Thus, wherever the Parliament / Legislature wanted to make provisions applicable retrospectively, it has been so provided. - At this stage, it is required to be noted that while making amendment in section 201(3) of the Act by Finance Act No.2 of 2014, does not so specifically provide that the said amendment shall be made applicable retrospectively. As specifically stated that the said amendment will take effect from 1/10/2014. As observed hereinabove, in the present cases, limitations provided for passing order under section 201(1) of the Act for A.Y. 2011-12 had already been expired on 31/3/2014 i.e. prior to section 201(3) came to be amended by Finance Act No.2 of 2014. Similar view was taken by the Hon'ble High Court of Gujarat in the case of Tata Teleservices Vs. Union of India [ 2016 (2) TMI 414 - GUJARAT HIGH COURT ] and also in Oracle India Private Limited [ 2015 (11) TMI 408 - DELHI HIGH COURT ] against which SLP filed before the Hon'ble Supreme Court was dismissed [ 2016 (8) TMI 612 - SC ORDER ] Thus we have no hesitation to hold that the assessment order dated 30.03.2018 is barred by limitation. Appeal of assessee allowed .
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2022 (11) TMI 776
TDS u/s 194A - addition u/s.40(a)(ia) - Non deduction of TDS - assessee in default - scope of second proviso to section 40(a)(ia) - failure of the assessee to deduct tax at source on interest paid by it to Muthoot Mini Finance Corporation Ltd. - HELD THAT:- Legislature has given statutory recognition to the judgment in Hindustan Coca Cola Beverage [ 2007 (8) TMI 12 - SUPREME COURT ] amply demonstrates that the law declared by the Hon‟ble Supreme Court prevails even during the period 01-04-2012 to 30-06-2012 before the insertion of the proviso to section 201(1). Once a person is not deemed to be an assessee in default for failure to deduct tax at source or payment of tax after deduction, the logical consequence is that the provisions of section 40(a)(ia) do not get magnetized. Be that as it may, the relevant point to be accentuated in this regard is that the second proviso to section 40(a)(ia), considering failure of the assessee to deduct tax at source as not an assessee in default under the first proviso to section 201(1), unlike the first proviso to section 201(1), has been inserted w.e.f. 01-04-2013, which further strengthens the case of the assessee. The second point of view espoused by the AO as well as the ld. CIT(A) is that the assessee did not comply with the requirement of section 201(1) inasmuch as the certificate from the Chartered Accountant in Form 26A was not furnished. Admittedly, the assessee did not furnish it before the AO. For the first time, the assessee submitted a certificate from Muthoot Mini Finance Corporation Ltd. before the ld. CIT(A) that the income received from the assessee was included in the total income. Such certificate was not in Form 26A. However, during the course of the first appellate proceedings itself, the assessee furnished proper annexure to the certificate in Form 26A. CIT(A), on a remand report from the AO, has refused to take cognizance of it. In my opinion, the necessary requirement got fully satisfied once the certificate in the requisite form was obtained by the assessee and placed before the ld. CIT(A) and also the AO (during the course of remand proceedings). There is no qualitative difference between the first three certificates filed by the assessee before the CIT(A) for the first time for which the disallowance has been deleted and the fourth one, which was also filed before him for the first time for which the disallowance has been sustained. Ex consequenti, hold that the necessary condition has been satisfied and hence the assessee cannot be treated as an assessee in default. We ergo, delete the disallowance u/s.40(a)(ia) sustained in the first appeal. Appeal is allowed.
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2022 (11) TMI 775
Denial of deduction u/s.80P(2)(a)(i) on the interest income - HELD THAT:- The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. [ 2022 (1) TMI 419 - ITAT PUNE] has held, vide its order that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessee is also a Co-operative society registered under the Cooperative Societies Act. Respectfully following the decision of the Division Bench, we overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various Co-operative Banks. Assessee appeal is allowed.
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2022 (11) TMI 774
Revision u/s 263 by CIT - Period of limitation - whether the receipt of compensation for shortfall in guaranteed performance from Suzlon Energy Ltd is liable to tax in the facts and circumstances of the instant case? - HELD THAT:- It is pertinent to know that A.Y.2009-10 is a completed assessment as on the date of assumption of jurisdiction u/s.153C in the hands of the assessee. Admittedly, only incriminating material which was handed over is a petty cash book marked as Annexure A-8 pertains only to A.Y.2011-12 and not relatable to A.Y.2009-10. Hence, AO was fully justified in not looking into this issue while framing the search assessment on 29/03/2016. Hence, no error could be attributed in his order. Hence, the pre-requisite twin conditions of Section 263 cannot be cumulatively satisfied in the instant case and consequently invocation of revision jurisdiction u/s.263 of the ACT on the same is unsustainable in the eyes of law. We also find that the issue on receipt of compensation for shortfall in guaranteed performance from Suzlon Energy Ltd was claimed as capital receipt by the assessee in revised return filed on 31/03/2011 itself. AO had framed the original assessment u/s. 143(3) of the Act on 30/12/2011 by considering the said revised return. If at all there is any error, the error could only be in the said assessment order dated 30/12/2011. Hence, the time limit for reckoning revision jurisdiction u/s 263 has to be from that date on 30/12/2011 in terms of Section 263(2) of the Act and not from the search assessment framed on 29/03/2016. Hence, we hold that the revision order passed u/s.263 by the PCIT for A.Y.2009-10 is barred by limitation and accordingly, quashed. Appeal of the assessee is allowed.
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2022 (11) TMI 773
Deduction u/s 80IA - denial of deduction as assessee has not filed the return of income, on time, as per the time limit prescribed u/s 139(1) - As argued assessee was prevented by reasonable and sufficient cause for not filing the return of income before due date and there is minor delay of only 26 days - HELD THAT:- We have gone through the order of ld CIT(A) and explanation provided by the ld Counsel and noted that there is minor delay of 26 days, in filing of return of income. The ld CIT(A) relied on the judgment of M/s Unitech Ltd [ 2015 (10) TMI 950 - DELHI HIGH COURT] and M/s Anand Shelter developers and builders Pvt. Ltd [ 2017 (10) TMI 1285 - ITAT PUNE] and held that where divergent views are available and there is no direct decision of the Hon'ble Jurisdictional High Court, the view in favour of assessee has to be followed. Thus, we do not find any infirmity in the order of ld CIT(A). The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the appeal of the Revenue.
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2022 (11) TMI 772
Assessment u/s 153A - incriminating materials found during the course of search or not? - HELD THAT:- As for making an assessment u/s 153A the sine qua non is incriminating materials ought to have been found during the course of search. The assessee has made submissions with respect to the joint development agreement and its method of revenue recognition several times as enumerated above and consequently the same cannot be said to be incriminating material. In the instant case as could be seen from the order of assessment passed under section 153A r.w.s 143(3) of the Act, AO has made addition under the head income from business by adopting percentage completion method of revenue recognition. It is observed that the addition is made based on the opinion of the learned Assessing Officer that the significant risk and rewards of ownership have been transferred and consequently the percentage completion method of revenue recognition ought to have been followed. The same is not based on any incriminating material found during the course of search. In our opinion, learned Assessing Officer did not assume proper jurisdiction to issue notice under section 153A of the Act and consequently the notice issued under section 153A of the Act and the assessment order passed under section 153A r.w.s 143(3) of the Act for the assessment year 2016-17 is bad in law. Accordingly, the assessment for the AY 2016-17 is quashed. Period of limitation to issue notice u/s 153C - AY 2017-18 - The time limit to issue notice was upto 30.9.2018. The search took place on 10.1.2018. The assessment is pending during this time. As such, in case of pending assessments only one assessment shall be made separately for each assessment year on the basis of the income unearthed during the search or any other material existing or brought on the record of the AO. Even in the absence of any incriminating material abated assessment or reassessment could be done. The returns filed u/s 139 of the Act gets replaced by return filed u/s 153A(1) of the Act. Pending proceedings in appeal, revision/application shall not abate subsequent to initiation of section 153A of the Act. Further, recording of satisfaction under section 153A of the Act is not necessary unlike section 153C of the Act which mandates the recording of satisfaction. (Delhi International Pvt. Ltd.[ 2021 (11) TMI 928 - KARNATAKA HIGH COURT] ). In view of this discussion, we hold that issue of notice u/s 153A of the Act for the AY 2017-18 and consequent framing of assessment u/s 143(3) r.w.s. 153A of the Act is valid. Method of revenue recognition - additions made under the income from business by computing the income based on percentage completion method with respect to the Prestige Lakeside Habitat project - whether project completion method or percentage completion method has to be followed? - HELD THAT:- We are of the opinion that department is precluded from changing the method of accounting which has been consistently followed by the assessee from year to year in middle of the duration of the project. At the same time, we are aware of the fact that the concept of res judicata does not apply to income tax proceedings as each assessment year is being independent assessable unit, what is decided in one year may not apply in the following assessment year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and the parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in the subsequent year. There is no doubt that the land is held to be applicable to be stock in trade of the assessee and consequently 2(47) has no application. Thus, assessments have to be made under normal provisions of computing business income and the same has to be computed only when the transaction is complete. A mere advance received, especially when there is a right to terminate on failure to pay the balance amount, cannot by any stretch of imagination held to be a completed transaction. It is well settled law that agreement does not confer absolute title and merely enables the parties to pursue remedies available in law as per the contract. Thus, the offering of income on the conclusion of the transaction regularly is the correct and only method for computing the income in respect of the assessee. The assessee also gives an example in normal business transaction for other than property will it be income answer is no. It is not the case of the department that that assessee has received 100% money of the land and the department itself even on the percentage completion method is only considering the income progressively. Thus, the question of applying the project completion method does not apply on these type of transactions. The lower authorities have committed an error in adopting the percentage completion method of income recognition in computing the income from business. Adopting percentage completion method of recognizing revenue has resulted in double taxation which is impermissible in law and also brought on record by assessee that the same income has been offered for taxation in subsequent assessment years and paid tax thereon - the income offered in the subsequent years is income of the impugned assessment year will result in double taxation which is impermissible in law. Addition being expenditure of personal nature - HELD THAT:- As assessee has not placed any evidence in support of cheque was cancelled and no payment has been made. Hence, we dismiss this ground.
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2022 (11) TMI 771
Rectification of mistake u/s 154 - levying late-fee u/s 234E which was not leviable for period prior to 01.06.2015 - HELD THAT:- Late fee u/s 234E could not have been levied in the intimations u/s 200A for delay in filing quarterly returns of TDS for the period prior to 01.06.2015 Therefore, by levying late-fee which was not leviable, the Ld. AO has certainly committed a mistake apparent on record. Additionally, we also observe that under the scheme of Income-tax Act, 1961, the assesseee have two remedies against the intimation u/s 200A, viz. (i) file rectification-application u/s 154, or (ii) file appeal u/s 246A. We observe that the remedy to file rectification u/s 154 is not only one of the available remedies but also a simpler remedy and practically resorted to by many of the assessees, particularly in the matter of the late-fee u/s 234E wrongly levied by revenue-authorities. We find that it is not a case of revenue that the rectification-application u/s 154 against the intimation u/s 200A is absolutely barred in the scheme of the Act. We also observe that when the late-fee is not leviable in the law and on facts, by levying the same the assessees have been fastened with the liability beyond and against the scheme of the Act, which should not happen. In this regard, we gainfully refer a recent decision in the case of Akbar Mohammad, Nagaur [ 2022 (2) TMI 479 - ITAT JODHPUR] Thus having observed that there was an apparent mistake in the intimations sent by Ld. AO u/s 154, we are inclined to accept that the Ld. CIT(A) is not justified in dismissing the appeals of assessees. Therefore, Ground No. 1 is allowed. Validity of charging late-fee u/s 234E in the intimations issued u/s 200A for delay in filing quarterly-returns of TDS relatable to the period prior to 01.06.2015 - HELD THAT:- As section 200A(1) was amended w.e.f. 01.06.2015 by inserting clause (c) therein and it is only thereafter the authorities were enabled to charge latefee in the intimations u/s 200A. Therefore, it is very much clear that the authorities did not have any power to charge late-fee in respect of returns related to the period prior to 01.06.2015. See M/s. Keshav Industries Pvt. Ltd. [ 2020 (7) TMI 812 - ITAT INDORE] Mr. Rajendra Prasad Tiwari [ 2020 (7) TMI 812 - ITAT INDORE] Thus no hesitation in concluding that the late-fee levied u/s 234E levied by Ld. AO in the intimations made u/s 200A is illegal and deserves to be deleted. We, therefore, direct the Ld. AO to rectify intimations and delete the late-fee charged therein. Thus, the assessee succeeds in Ground No. 2 to 5.
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2022 (11) TMI 770
Revision u/s 263 by CIT - advance gross receipt and the interest receipt - Assessee contravening section 10(23C) (iiiad) r.w.s. 2(15) of the Act was not eligible for statutory deduction - revisional authority has come to conclusion that the assessee was not investigated by the ld. AO during the assessment proceeding, so, the assessment order is erroneous and prejudicial to the interest of the revenue - HELD THAT:- During the year of appeal, the assessee received the fees from students. The assessee during accounting treatment divide fees in two ways 1) The annual receipts which is related to financial year and taken directly in the revenue income. The receipts from students which are not related or utilized for this financial year under appeal as booked as advance under current liability in the balance sheet. These advance fees are taken as annual receipt in the revenue income in next financial year in which year it is related. 2) This is a circular process in each and every year. The ld. Counsel had pointed out that next year the issue was accepted, and the turnover was assessed by the ld. AO without making any addition in the assessment u/s 143(3). In assessee's case while interpreting the treatment of advance fees as current liability or revenue receipt. The AO has taken one view in allowing the current liability on the submissions of the assessee of various judicial pronouncements rendered in the context, whereas the CIT is not in agreement with the view of the ld. AO. The decision of the AO to allow / accept the advance fees as current liability cannot be stated as unsustainable in law as he has taken a possible view based on application of mind. CIT(E) has not brought any material on record to show that the view taken is contrary to law - we are of the considered view that the CIT is not justified in setting aside the order of the ld. AO. Accordingly, the directions of the PCIT are quashed. Appeal of assessee allowed.
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2022 (11) TMI 769
Reopening of assessment u/s 147 - Reasons to believe - HELD THAT:- We heard the rival submission and relied on the documents available in the record. In fact, the reasons recorded of the assessee that there are lacuna in the factual findings and in the PAN No. The issue was already agitated before the ld. CIT(A) but the matter was not taken proper care in relation to the legal ground. We find that the recorded reasons itself is erroneous and erred in fact. So the assessment order issued by the ld. AO is itself erroneous and non est . So the ground no. 1 and 2 of the assessee is allowed. Addition was made on basis of the entries were found in the books of accounts of the party under searched - HELD THAT:- As heard the rival submission relied on the documents available in the record. The entire addition was made on basis of the documents available in the record of the third party. Fact that the assessee has produced the deed documents to substantiate his claim related to transaction cash with the party. In remand report the issue was not properly controverted and taken care with relation to the search person and the parties related to sale and purchase of land. But the seller of the land confirmed the fact of the assessee and submitted the affidavit before the authority. The ld. Counsel has submitted the catena of judgment in favour of the assessee, considering the ratio decidendi of the judgment. The addition made by the ld. AO is duly set aside the addition amount addition is quashed. Ground No. 3 and 4 of the assessee are allowed.
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2022 (11) TMI 768
Validity of assessment u/s 153C r.w. Section 143(3) - Change of head of income from business income to income from other sources pursuant to search - HELD THAT:- As in this case the Assessing Officer pursuant to search and seizure has only changed the head of income from business income to income from other sources. In doing so, he has not referred to any incriminating material found during the search. In this view of the matter, the Ld. CIT(A) is correct that addition is not sustainable It is an undisputed fact that in the present case the Assessing Officer has only changed the head of the income from business income to income from other sources and this has not been done by reference to any seized incriminating material. Accordingly there is no infirmity in the order of the Ld. CIT(A). Hence, we uphold the same. Before parting we may refer to the pleading of the Ld. counsel for the assessee that in the case of the assessee the MAT provisions were applicable and in that view of the matter the tax effect is below the limit of CBDT circular for filing appeal before the Tribunal - Appeals of the Revenue stand dismissed.
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2022 (11) TMI 767
Reopening of assessment u/s 147 - non-application of mind by the AO - in the column No. 7, the AO mentioned that the provision of section 147(b) of the Act is applicable - glaring mistake in the Performa for approval as the valid ground for quashing reassessment on the foundation of non-application of mind by all the authorities involved in the process of recording reasons and providing approval u/s. 151 - HELD THAT:- AO, in the first page of reasons mentioned in column 7 that provisions of section 147(b) is applicable which is non-existent in the statute book for AY 2010-11. This apparently shows non-application of mind by the AO while filling proforma in a mechanical manner and the ACIT and PCIT also approved the same in a mechanical manner. So far as the contention of the Ld. Sr. DR that this defect is curable u/s. 292B of the Act is concerned, the same contention has been decided by the ITAT Delhi Bench in the case of Madhu Apartments India Pvt. Ltd. [ 2021 (2) TMI 709 - ITAT DELHI] the relevant part of which has already been reproduced in the earlier part of this order since the same was referred to and included in the relevant part para 10.2 of the order of the ITAT in the case of Omkam Developers Ltd. [ 2021 (5) TMI 414 - ITAT DELHI] . It was held that this kind of defect and non-application of mind by the AO is not curable u/s. 292B of the Act. Therefore, respectfully following the judgment of Yum! Restaurants [ 2017 (9) TMI 121 - DELHI HIGH COURT] and Smt. Kalpana Shantilal Haria [ 2018 (1) TMI 195 - BOMBAY HIGH COURT] and orders of ITAT Delhi Bench in the cases of Omkam Developers Ltd. vs. ITO (supra) and Madhu Apartments P. Ltd. vs. ITO (supra), we hold that the impugned reassessment proceedings and the impugned reassessment u/s. 147/144 of the Act deserve to be quashed only on this ground.- Assessee appeal allowed.
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2022 (11) TMI 766
Nature of expenditure - interest expenses - revenue or capital expenditure - Loan / Borrowings for Construction Project - The project constitutes stock in trade of the assessee - To be capitalized as work in progress or not - HELD THAT:- As issue in dispute before us is as to whether the interest expenditure is required to be added to the cost of work in progress in case of income being recognized under Percentage of Completion Method is same as in Lokhandwala Construction [ 2003 (1) TMI 93 - BOMBAY HIGH COURT] the loan obtained by that assessee before it was for stock in trade. The project of that assessee constituted stock in trade of that assessee. Since that assessee had received loan for obtaining stock in trade, it was entitled to deduction u/s 36(1)(iii) of the Act. The Hon ble High Court also placed reliance on the decision of the Hon ble Bombay High Court in the case of Calico Dyeing Printing Works vs CIT [ 1958 (3) TMI 59 - BOMBAY HIGH COURT] for the proposition that utilization of the capital was irrelevant for the purpose of adjudicating the claim of deduction u/s 36(1)(iii) of the Act. Ultimately the Hon ble High Court concluded that interest expenditure could not be treated as capital expenditure nor could it be added to the work in progress. All the appeals of the revenue are dismissed.
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Customs
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2022 (11) TMI 765
Prosecution proceedings - Necessary sanction of the Collector of Customs for prosecution - Import of goods without valid license - import of ball bearings (restricted items) instead of spare parts of Road Rollers - cheating customs authority - goods imported were not as per attested list of the goods appended to the Import license to Project Equipment Corporation (P.E.C.) - Importation of goods beyond the attested list was made on the basis of forged and fabricated documents under the forged signature - framing of charges - HELD THAT:- Question of sanction according to Mr. Roy may arise at any stage of proceedings even it may arise at the inception of the proceeding as well. There is nothing to suggest that the accused must wait till the charges are framed. According to Mr. Roy the order passed by the learned Trial Court suffers from illegality and should not be allowed to remain in force. The decision of Hon ble Supreme Court pronounced in the case of Ram Kumar [ 1987 (1) TMI 503 - SUPREME COURT ] is of no help to the petitioners because of difference in factual matrix. The petition under consideration is devoid of merit and is dismissed, however, without cost.
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2022 (11) TMI 764
Rate of Customs duty - Effective date of notification - On the date of bill of entry or date of clearance of goods - Validity of reassessment of bills of entry - non-speaking and unreasoned order or not - contrary to the provisions of Section 17 (5) of Customs Act or not - It is specifically the case of the petitioner that adjudication by the authority of the bill of entry is in violation of the principles of natural justice and in contravention of provision of Section 17(5) of the Act - Constitutional validity of Section 25(4) of the Act as amended by the Finance Act, 2016. Whether the Notification No.29/2018-CUS dated 01.03.2018 will be effective from 01.03.2018 or 06.03.2018 on the day on which it has been digitally signed? - HELD THAT:- What is effective date of Notification is a question no longer res integra. The Apex Court in case of UNION OF INDIA OTHERS VERSUS M/S GS CHATHA RICE MILLS ANOTHER [ 2020 (9) TMI 903 - SUPREME COURT] was to decide whether Notification No.5 of 2019-CUS dated 16.02.2019, which was uploaded on e-Gazette on 16.02.2019 at 20:46:58 hours are to be made applicable to the bills of entry presented for home consumption before such Notification was uploaded. The Apex Court held in categorical terms that the revised rate of duty apply to bills of entry presented subsequent to uploading of Notification in e-Gazette form. It is quite clear that when Section 25 of the Act empowers the Central Government to exempt either totally or subject to certain conditions from the whole or any part of the customs duty leviable thereon by a Notification in the Official Gazette, it has also the powers to modify and cancel. It is also necessary to refer to the decision of RUCHI SOYA INDUSTRIES LTD THROUGH AUTHORIZED REPRESENTATIVE VERSUS UNION OF INDIA 2 OTHERS [ 2020 (9) TMI 422 - GUJARAT HIGH COURT] where the bills of entry dated 01.03.2018 and 02.03.2018 were filed under the exemption Notification No.50 of 2017-CUS on the ground that though the principal Notification No.50 of 2017 was amended by Notification No.29 of 2018-CUS dated 01.03.2018 but came to be published electronically on 06.03.2018. The customs department enhanced the custom duty and directed the petitioner to pay the differential duty amount. This Court needs to remind itself of the extensive way of consideration of the issue of Notification in e-Gazette with the advent of IT Act and particularly, Section 8 of the IT Act. The Ministry of Urban Development discontinued the practice of physical printing and replaced it with electronic Gazette on 30.09.2015 in compliance with the provision of Section 8 of the IT Act. Thus, it switched over to exclusive e-publishing of the Government of India Gazette Notification on its official website with effect from 01.10.2015 and has done away with the physical printing of Gazette Notification. The date of publishing shall be the date of epublication on official website by way of electronic Gazette in respect of Gazette Notification. So far as the present bills of entry are concerned, under Section 46 of the Act, the rate of duty enforced on the date and the time when the bills of entry presented for home consumption was 40%, the same had been already paid by the petitioner. This by no means could be altered by any power of re-assessment under Section 17 of the Act or at the time of clearance of the goods for home consumption under Section 47 of the Act - The power of re-assessment under Section 17(4) of the Act could not have been exercised as it was not a case of incorrect self assessment of duty. The duty was correctly assessed at the time of selfassessment in terms of the duty which was in force on that date and at the time. The subsequent publication of the Notification bearing (29/2018-Cus, dated 01.03.2018 amending entry no. 65 of table notification no. 50/2017 dated 30.06.2017) would not have any sustained basis for re-assessment. The Notification could not be said to have been published without declaration form or digital signature certificate. Only after the declaration form and documents are signed digitally that they can be uploaded for e-publishing which has been done on 06.03.2018 at 19:15 hours. Therefore, the effective date of Notification in terms of Section 25(4) of the Act is the date of its publication in Official Gazette in e-mode on 06.03.2018 - Notification, therefore, cannot be said to have come into force on 01.03.2018 and enhanced rate of duty by way of Notification No.29/2018-CUS dated 01.03.2018 surely would not be, therefore, applicable. The petitioner would be entitled to pay only 40% of the duty which was applicable at the time of presenting the bills of entry for home consumption and not 54% under Section 17(4) of the Act. Petition allowed.
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2022 (11) TMI 763
Denial of benefit of Notification No. 21/2002-Cus. - whether the imported coal is coking coal or other than coking coal in the absence of retesting of sample - HELD THAT:- The Tribunal in M/S SHREE ELECTROMELT LTD. VERSUS COMMISSIONER OF CUSTOMS, JAMNAGAR [ 2018 (5) TMI 72 - CESTAT AHMEDABAD] on going through the chemical test report at load port and the chemical test report of the department found that the parameters do not match and once there are contradictions on the test reports, hence remanded the matter to adjudicating authority for re-test of sample - In absence of availability of remnant sample, ld. Adjudicating authority decided the present matter on the basis of available evidences and old reports and held that original test report of the Chemical examiner concluded that the sample was other than coking coal, therefore the consignment of 16500 Mts. of imported coal is liable to be re-assessed as Coal other than coking coal . The Ld. Adjudicating authority nowhere given any finding on the vital facts, which are very important for deciding the issue that whether the imported coal is coking coal or other than coking coal in the absence of retesting of sample. The matter is remanded to the Adjudicating Authority to decide the matter afresh after affording an opportunity of personal hearing to the appellants - Appeal is allowed by way of remand to the Adjudicating Authority.
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2022 (11) TMI 762
Valuation of imported goods - polished marble slab - mis-declaration of goods for evasion of duty of customs - rejection of declared value post the 100% examination of the consignment imported by the appellant - rule 12 of the Valuation Rules - HELD THAT:- No doubt in terms of Rule 3 of Customs Valuation (Determination of Value of Imported Goods), Rules, 2007 (hereinafter called as the Valuation Rules) read with Section 14 of Customs Act, 1962, it is the transaction value of such goods i.e. the price actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation or, as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the same, which has to be accepted. Reverting to the facts of the case, there is appellant s own letter dated 13.06.2017 acknowledging that the shipment was imported while declaring the shipment of polished marble slabs (CTH) 68022190. There is sufficient acceptance that on 100% second time check by the competent officers that instead 1202.5 Sq. Mtr. of polished marble slabs only 140 Sq. Mtr. of polished marble slabs were found in the shipment. In addition, there were found granite slabs of 1470 Sq. Mtr. approx. quantity, which were not declared in the Bill of Entry - Apparently and admittedly no protest was raised by the appellant. A speaking order was passed by the officer on 07-07-2017 based on the examination report and the explanation by the appellant. In the another decision of this Tribunal in the case of VIKAS SPINNERS VERSUS COMMISSIONER OF CUSTOMS, LUCKNOW [ 2000 (11) TMI 196 - CEGAT, COURT NO. IV, NEW DELHI ], it was held clearly that the enhanced value once settled and duty having been paid accordingly without protest, importer is estopped from challenging the same subsequently. It also holds that enhanced value uncontested and voluntarily accepted, and accordingly payment of duty made discharges the burden of the department to establish declared value to be incorrect. There are no infirmity in the order under challenge. As a result, the order of Commissioner (Appeals) is hereby upheld - appeal dismissed.
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Corporate Laws
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2022 (11) TMI 761
Seeking restoration of the name of the Company in the Register of Companies, West Bengal - Section 421(1) of the Companies Act, 2013 - HELD THAT:- The Tribunal has recorded in para 7 of the impugned order, the financial statements for the financial years ending 31.03.2013 to 31.03.2018 which shows that the Company is a going concern, but a look at the financial statements on the other hand shows that the company was not doing any kind of business and further para 8 it has been recorded that the company is not earning any revenue from operations since its incorporation i.e. from 2012-13 to 2017-18, therefore, has not earned any profits and does not have any fixed assets in the company. Appeal dismissed.
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2022 (11) TMI 760
Winding up of company - Payment of remuneration to the liquidator - Computation of remuneration as per IBC - Section 271(a) and 272(1)(a) of the Companies Act, 2013 - In the instant case does not involve the applicability of the provisions of IBC, 2016 or any of the Rules and Regulations under the Code, 201 - HELD THAT:- The Ld. Counsel for the Appellant filed Notification issued by the Ministry of Corporate Affairs dated 24.01.2020 in exercise of the powers conferred by sub-sections (1) and (2) of section 468 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013) and these Rules are known as Companies (winding up) Rules, 2020 wherein Rule 14 provides the appointment of Provisional Liquidator or Company Liquidator and also Part IV deals with cost, etc. in which Rule 188 giving Tribunal's power to fix a fee. The Tribunal mainly considered the provisions of IBBI (Liquidation Process) Regulations, 2016 as amended in 2019 which have quoted in para 5 and 6 of the impugned order and passed the order regarding the fees but the Tribunal has not considered the provisions of Ministry of Corporate Affairs dated 24.01.2020 regarding Companies (winding up) Rules, 2020. As the application was filed winding up provisions of Sections 271(a) and 271(1)(a) of the Companies Act, 2013 seeking winding up of the Company. The matter is remitted back to the National Company Law Tribunal, Cuttack Bench, Cuttack with a request to hear the parties herein and pass reasoned orders after considering the provisions of Companies (winding up) Rules, 2020 issued by the Ministry of Corporate Affairs vide Notification dated 24.01.2020 within eight weeks from the date of receipt of this judgment - Appeal disposed off.
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2022 (11) TMI 759
Maintainability of appeal - aggrieved person - Appeal against the consent order - Oppression and Mismanagement - Appellate Jurisdiction of this Tribunal under section 421 of the Companies Act, 2013 - HELD THAT:- Fact remains that on going through the record, it appears that on earlier occasion also the same allegation was made that this Appellant had taken a loan of Rs. 35 Lakh though it was treated for personal use, but it was shown, in the joint name of the Appellant and the Company. It is also not in dispute that till date whatever error was committed in the loan account of the Bajaj Finance, the error has not been got removed from the Bajaj Finance. Ld. Counsel for the Appellant before the Ld. NCLT, stated in specific term that on instruction of his client, he made submission for deposit of the said amount. Of course, during the hearing of this appeal, it was submitted by the Ld counsel of the Appellant that before the NCLT without proper instruction of the Appellant, his counsel had made said submission and as such, such submission may not come in the way of preferring the present appeal. On being asked Ld. Counsel for the Appellant admitted that he had not filed any petition before the Ld. NCLT as to whether the Ld. Counsel, had made submission without instruction of the client. Ld. Counsel for the Appellant accepts that no proper application has been filed before the NCLT with an allegation that his counsel without instruction from his client, has made such submission. If an authorization is given to a counsel and on authorization such submission is made by the counsel, the integrity of the counsel may not be questioned that too without apprising the concerned court. Such submission is not permissible to be raised before the Appellate Court - it is very much clear that only a person aggrieved with an order, can file appeal. Further consent order cannot be assailed in appeal. In this case, on perusal of para 42 of the impugned order which is quoted herein above, there is no dispute that the Appellant can be said to be aggrieved by the said order. Further the order impugned is a consent order. If the Appellant is of the view that his counsel had made incorrect statement before the NCLT, he would be at liberty to approach the NCLT, but he may not be permitted to raise such issue before this Tribunal. Appeal dismissed.
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2022 (11) TMI 758
Sanction of Scheme of Amalgamation - seeking directions for dispensing with the meetings of Equity Shareholders, Secured and Unsecured Creditors of the Applicant Companies - HELD THAT:- The Scheme contemplated between the petitioner companies, appears to be prima facie in compliance with all the requirements stipulated under the relevant Sections of the Companies Act, 2013. As the observations from the Statutory Authorities have been duly addressed by the Petitioner Companies and since all the requisite statutory compliances have been fulfilled, this Tribunal sanctions the Scheme of Amalgamation attached as Annexure - A1 with the petition. Petition allowed.
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Insolvency & Bankruptcy
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2022 (11) TMI 757
Approval of committee of creditors for certain actions - related parties transactions or not - Section 28 of IBC - HELD THAT:- The Adjudicating Authority, while allowing the application has categorically found that no prior approval was taken from the CoC, therefore, action taken under Section 28(1) was void. It has categorically dealt with the argument raised by the Appellant before us that since the accounts were placed before the CoC and they did not raise any objection, therefore, it was deemed approval to hold that no such provision is there in Section 28, the finding recorded by the Adjudicating Authority in the impugned order is approved. Submissions made by the Appellant that they have rendered services and the erstwhile RP is to be blamed is not the subject matter of this application because the fact remains that the erstwhile RP made the payments to the present Appellants which has been ordered to be reimbursed regarding which no approval of the CoC was taken in terms of Section 28(3) of the Code. Appeal dismissed.
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2022 (11) TMI 756
Maintainability of application - initiation of CIRP - Financial creditors - locus standi of IDBI Bank for filing application under section 7 of IBC - IDBI Bank alone could have filed the petition for the insolvency resolution or not - non-disbursement by Standard Chartered Bank of the additional amount after restructuring of debt - material change in the restructuring package and consequently the guarantee stands discharged or not? Whether Respondent IDBI Bank can independently declare an event of default and whether it is entitled to file application under section 7 against the corporate debtor after the event of default has occurred? - HELD THAT:- On looking at the Security Trustee Agreement, wherein the Lead Bank Bank of Baroda representing the consortium of banks has entered an agreement with Doshion and the Security Trustee IL FS Trust Company. This Security Trustee Agreement was executed on 26.11.2013 after the consortium banks had decided to provide loans to the borrower Doshion. In the Definition and Interpretation section of the Security Trustee Agreement, an Event of Default has been stated as having the meaning ascribed to in the financing documents - The action of declaring an Event of Default is also an action wherein this procedure was to be followed. Thus, it is clear that the Event of Default cannot be declared by an individual bank under the individual financing documents of the participating banks in the Bank of Baroda consortium and recourse must be taken to the Security Trustee Agreement and the Inter-se Agreement. Clause 7.2 of the Inter-se Agreement sets out a clear procedure by which an Event of Default can be declared by any an individual lender belonging to the Bank of Baroda consortium and this procedure is quite akin to the procedure set out in clause (4) of the Security Trustee Agreement regarding declaration of an Event of Default . Action taken by IDBI Bank regarding declaration of Event of Default and thereafter recall of the loan - HELD THAT:- Prior to the issue of this letter to FIPL, a letter dated 20.9.2016 was sent by IDBI Bank to the borrower Doshion (attached at pp.95-113 of the reply filed by the IDBI Bank) stating that since an Event of Default had taken place since the borrower Doshion has failed to service the principal and interest amount payable to IDBI Bank on the due dates, the original loan including restructured loan were being recalled - The recall notice to Doshion and thereafter, a letter to FIPL dated 4.11.2016 were sent by IDBI Bank without any reference or intimation to the Lead Bank i.e. Bank of Baroda or the Security Trustee. The Event of Default declared by the Respondent IDBI Bank has not been declared in accordance with the Inter-se Agreement entered into between participating banks of the Bank of Baroda consortium and the Security Trustee Agreement, and therefore cannot be called a valid Event of Default . Thus, the Respondent IDBI Bank was not entitled to act independently in declaring an Event of Default in respect of its individual loan and recalling the loan advanced by it to the borrower Doshion and seeking repayment of the said loan from the guarantor FIPL - the locus standi of the Respondent IDBI Bank in taking unilateral action for declaring an Event of Default in the repayment of the loan advanced by it is not established as the IDBI Bank being a participating bank of the Bank of Baroda consortium was bound to act under the clauses/provisions of the Inter-se Agreement and the Security Trustee Agreement. In view of the stipulations and provisions in the Inter-se Agreement of which the Respondent IDBI Bank was a signing party, and the provisions of the Security Trustee Agreement entered into between the Bank of Baroda (as a Lead Bank of the consortium) and the guarantor FIPL and IL FS Trustee Company Limited, the IDBI Bank could not have acted unilaterally in either declaring an Event of Default regarding repayment its loan facilities granted to the borrower Doshion and later seeking repayment of the loan from the guarantor Fivebro International Private Limited. - the Adjudicating Authority has committed gross error in not examining the provisions in the Inter-se Agreement, Security Trustee Agreement and the Deed of Guarantee, by which the four participating banks of the Bank of Baroda consortium have bound themselves while considering their effect in the adjudication of the section 7 application filed against the guarantor FIPL and thereafter admitting it. The corporate debtor Fivebro International Private Limited is freed from the rigours of CIRP and moratorium and other related provisions of IBC - Application disposed off.
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PMLA
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2022 (11) TMI 755
Seeking grant of Regular Bail - scheduled offences - proceeds of crime - illegal mining - using proceeds of the crime for procuring property/money - allegations against the accused named in the FIR are/were that they were found stealing sand from the river Swan Khad Una, which areas was otherwise not leased out to present bail petitioner - HELD THAT:- In the case at hand, on the one hand Enforcement Directorate shared information with the police Under Section 66(2) of the prevention of Money Laundering Act, 2002, with the State Police but at the same time arrested bail petitioner on the basis of ECIR as detailed hereinafter. Now question which needs determination is, whether without there being any evidence of en-massing/procurement of 'proceeds of crime' if any by bail petitioner, Enforcement Agency could proceed to register the case under Section 3 and 4 of Prevention of Money Laundering Act, 2002 or not? No doubt, had some material emerged in the earlier FIR 252 of 2021 against the petitioner suggestive the fact that he after having indulged in criminal activity possessed/ acquired or procured wealth/property with the help and aid of the proceeds of crime, Enforcement Department would have been justified to proceed against bail petitioner under Section 3 and 4 of Prevention of Money Laundering Act, 2002. No doubt, the petitioner is accused of having committed serious offence under Sections 3 and 4 of Prevention of Money Laundering Act, 2002, but guilt if any of the bail petitioner is yet to be established on record by leading cogent and the convincing evidence and as such there appears to be no reason to curtail his freedom for an indefinite period during trial, especially when investigating agency has already taken into custody entire record from the accused and he is in judicial custody for over a month - apprehension expressed by the learned Deputy Solicitor General of India that in the event of petitioner being enlarged on bail, he may flee from justice and tamper with the prosecution evidence can be best met by putting him to stringent conditions. By now, it is well settled that gravity alone cannot be a decisive ground to deny bail, rather competing factors are required to be balanced by the court while exercising its discretion. It has been repeatedly held by the Hon ble Apex Court that object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Bail petitioner has carved out a case for himself. Consequently, present petition is allowed. Bail petitioner is ordered to be enlarged on bail, subject to furnishing bail bonds in the sum of Rs.25 lac/- with two local sureties in the like amount each, to the satisfaction of the Investigating Officer, besides the other conditions imposed - application allowed.
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2022 (11) TMI 754
Seeking grant of Regular Bail - Scheduled offence - laundering of black money and political money - these companies are used as Shell Companies by politicians - HELD THAT:- Rigor of Sub-Section-(i) of Section 45 of PML Act is not in dispute, the court comes to a conclusion either to allow or reject the bail, these two conditions are required to be followed. ED has been provided full opportunity to oppose the bail. Prima facie the records are required to be considered for believing that the accused persons are not guilty of such offence and that he is not likely to commit any offence while on bail. Proviso to said Section speaks of granting bail, if it is less than Rs. 1 crore. The petitioner is a practicing advocate, in that circumstance, the liability of the petitioner for further investigation, interrogation and facing trial is not jeopardized and he is already held to be not at flight risk and there is no possibility of tampering the evidence or influencing / intimidating the witnesses, as has been submitted by the Mr. Nilesh Kumar, learned counsel appearing for the petitioner. It has been reported that in Hare Street P.S. Case No. 222 of 2022, the petitioner has already been granted bail and this case has been registered on the basis of that case, which is in view of the provisions of PML Act and the offence is also coming under the scheduled offence. Considering all these aspects of the matter including the duration of custody of the petitioner in the present case, as he is in jail custody since 18.08.2022, the court comes to a conclusion that he is entitled to be granted bail - application allowed.
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2022 (11) TMI 753
Seeking grant of Regular bail - Money Laundering - embezzlement of government fund - scheduled offences - proceeds of crime - HELD THAT:- In reading the entire complaint case there are allegations against this petitioner who happened to be a senior I.A.S officer of the State of Jharkhand to deposit a huge cash amount. A sum of Rs. 01.33 crore has been in the form of cash in the name of brother of her Chartered Accountant and mother of this petitioner has been also found to be invested which has come in the investigation. Thus, it cannot be said that the petitioner was not using the proceeds of crime in light of section 2(1)( u ) of the Act. There is no doubt that even if the allegation is one of the grave economic offence it is not a rule that the bail should be denied in every case since there is no such bar under the relevant enactment passed by the Legislature nor does the bail jurisprudence provides so as has been discussed by the Hon ble Supreme Court in the case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT [ 2019 (12) TMI 186 - SUPREME COURT] , but at the same time the consideration will have to be on case to case basis on the facts involved therein and seeking the presence of the accused to stand trial. The bail are being granted on certain conditions in appropriate cases and the object of putting such conditions should be to avoid possibility by the person hampering the investigation Section 45 of the Act is no more res integra. The conditions as embodied under section 45 of the Act will have to be complied even in respect of application for bail made under section 439 of the Cr. P.C. There are allegations against this petitioner of laundering a huge amount of money which has come in the investigation and it has been elaborately discussed - The modus operandi as adopted by the petitioner disclosed that she first open bank accounts for short duration, then deposited huge cash into it, then converted those cash into dem and drafts to purchase insurance policies of longer durations and prematurely closed those policies to bring back liquidity in her accounts for further investment. She used to invest the same either in the form of capital infusion by her brother Siddharth Singhal and her husband Abhishek Jha who is also an accused in their company M/s Pulse Sanjeevani Healthcare Private Ltd. Huge amount of cash amounting to Rs.73.81 lakhs was deposited in her various ICICI bank accounts. Admittedly, the petitioner is a senior I.A.S officer of the State of Jharkhand. In the departmental proceeding she has been exonerated. The Court does not want to make any comment on that exoneration as this Court is only considering the regular bail application of the petitioner - the apprehension of the Enforcement Directorate E.D with regard to tempering with the evidence cannot be ruled out. The Court is not inclined to grant regular bail to the petitioner at this stage - Petition dismissed.
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Service Tax
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2022 (11) TMI 752
Refund of service tax - banking and other financial services - appellant availed services of the foreign based companies for raising/ collecting financial funds through External Commercial Borrowings (ECB) and Foreign Currency Convertible Bonds (FCCB) - reverse charge mechanism - appellant only disputed the service tax demand of Rs. 2,26,213/- on the ground that amount was refunded by the Foreign Financial Institution to the Appellant and they have not received the services to that extent - suppression of facts - levy of penalty u/s 76, 77 and 78 of FA - HELD THAT:- Appellant had submitted the documents in support of their claim in this matter - there are force in submission of appellant - demand not sustainable. Levy of penalty - the submission of appellant is that penalty is not imposable as the Service Tax demand along with interest was paid before the issue of show cause notice - HELD THAT:- Such matter cannot be taken as evasion of service tax, the matter is revenue neutral as the Cenvat credit of service tax is always admissible and it is a fit case, for invocation of Section 80 of the Finance Act, 1994 - it is evident from the records that the appellant discharged the service tax liability along with interest thereon as soon as they came to know about the liability of service tax in this matter and they also paid the same much before the show cause notice. It is also a fact that they have not disputed to service tax liability on merits and the disputed transactions were reflected in the balance sheets of the appellant for the relevant years. These evidences available on records indicate that the appellant had no intention to suppress any information or withhold any information from the department with an intention to evade payment of service tax. Further whatever Service Tax was required to be paid by the appellant, was available to them as Cenvat credit and there was no need for them to evade any payment of tax. As such, the entire situation is revenue neutral, in which case, no mala fide can be attributable to the appellant - Penalty u/s 77 and 78 set aside. Penalty imposed under Section 76 and 78 - HELD THAT:- Simultaneous penalty under Section 76 and 78 cannot be imposed as held by Hon ble Gujarat High Court in the case of M/S RAVAL TRADING COMPANY VERSUS COMMISSIONER OF SERVICE TAX [ 2016 (2) TMI 172 - GUJARAT HIGH COURT] , therefore, the penalty imposed under Section 76 is also not sustainable. Appeal allowed.
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2022 (11) TMI 751
Rejection of Refund claim - export of services - Business Support Services - alleged non-compliance of the Condition 2(h) of N/N. 27/2017-ST - Rule 5 of Cenvat Credit Rules read with Notification No. 27/2017-ST - HELD THAT:- The debit of the amount of refund claim in the cenvat credit account (in ledger of the appellant) during the GST regime i.e. on or after 01.07.2017 is sufficient compliance of Condition 2(h) of the notification. In view of the observations of the Assessing Officer that the appellant have claimed refund less than the credit lying as on 30.06.2012, ipso facto established that they have not claimed more amount, and such amount has already been debited in the cenvat credit account in the ledger - It is further observed that there cannot be any more debit in the cenvat credit register on or after 01.07.2017 due to implementation of the GST regime. In these facts and circumstances, it is held that there is sufficient compliance of condition 2(h) of the Notification No. 27/2012-CE(NT). The Adjudicating Authority is directed to grant the refund alongwith interest to the appellant within a period of 60 days from receipt of copy of this order - appeal allowed - decided in favor of appellant.
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2022 (11) TMI 750
EOU - Interest for delayed refund - quantum of correct period of delay - Rule 5 of Cenvat Credit Rules read with Notification No. 27/2012-ST dated 28.06.2012 - HELD THAT:- Undisputedly the appellant has filed their refund claims during the period 09.10.2015 to 23.03.2016. These dates are verified from the evidences available on record. Accordingly, the appellant is entitled to interest from the end of three months from the date of receipt of application by the Department (as mentioned hereinabove) and such interest shall be payable till the date i.e. 04.06.2020 (date of sanction of refund). The Adjudicating Authority is directed to grant the amount of interest within a period of 45 days from the date of receipt of copy of this order - the appeal is allowed.
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2022 (11) TMI 749
Recovery of service tax - Consulting Engineer service received by it from an overseas Consulting Engineer - demand alongwith interest and penalty - HELD THAT:- Revenue s case is that the Commissioner (Appeals) has greatly erred in following judicial discipline and should have disobeyed the order of Larger Bench of this Tribunal which was upheld by the Supreme Court. According to the Revenue, since department was considering whether a review petition should be filed against the dismissal of SLP by the Supreme Court, the Commissioner (Appeals) should not have followed the decision of this Tribunal and Supreme Court. Needless to say that such a ground cannot be the basis for allowing any appeal by the Revenue. The appeal filed by the Revenue accordingly deserves to be dismissed. The appeal filed by the Revenue is dismissed.
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Central Excise
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2022 (11) TMI 748
CENVAT Credit - input services - outward GTA services used for transportation of their finished goods from their factory to customer s premises - place of removal - period from October 2015 to September 2016 - HELD THAT:- In the present matter, appellant has come forward with the documents /details i.e copy of purchase order, copies of invoices, copy of agreements, copy consignment notes, copy of certificate of chartered accountant. In view of the facts of the case, it is found that the impugned order is not in accordance with law. The Commissioner (Appeals) did not deal properly with these documents/ details and facts submitted by the Appellant before him in the impugned order. The case needs to be reconsidered by the Commissioner (Appeals) to decide the appeal a fresh after considering the said documents and vital facts - Appeal allowed by way of remand.
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2022 (11) TMI 747
CENVAT Credit - valid documents or not - photocopy of invoices issued by various service providers to the United Phosphorus Limited, Mumbai, (UPL) - transfer of service tax credit by UPL, Mumbai, as an ISD to the Appellant without obtaining registration - Rule 9 of the Cenvat Credit Rules, 2004 - HELD THAT:- In the present case the Cenvat Credit was denied on two count:-1) That the appellant have availed the Cenvat Credit on the strength of photocopy of invoices of various service providers which is in favour of appellant s Head Office. Secondly, the Head Office was not registered as an ISD, therefore the Head Office could not have distributed credit under a cover of invoice in terms of Rule 4A (1)(i) of the Rules. Whether the appellant has correctly availed the credit on the strength of photocopy? - credit was denied only on the presumption that there is a possibility of availing the credit by other unit of the appellant - HELD THAT:- Firstly, there is no charge in the show cause notice to these effects. Secondly, without any evidence such serious allegation cannot be accepted. It is further observed that in respect to photocopy of invoices, the same is not relevant for allowing the credit to the appellant, as the Head Office has distributed the credit to the appellant unit. In this case if there is any objection to be raised, it should be by the Jurisdiction Officer of the Head Office which is not the case here - the appellant have taken credit in respect of the distributed input credit by the Head Office on the basis of a statement. Since, there is a large number of services and invoices involved, the same was in co-operated the statement, the statement contains all the details as required under Rule 4A, therefore, on the basis of such statement credit is admissible. There is no dispute about the payment of Cenvat Credit on the input service received and credit thereof was distributed by the Head Office. It has not been established by the department that the credit which distributed on the invoices was distributed to more than one manufacturing unit of the appellant, as the same was neither a charge in the show cause notice nor evident in the impugned order - it is held that ISD registration is a procedural requirement, therefore, even if there is a lapse of non-obtaining the registration for some period, credit passed on by the Head Office cannot be denied to the appellant. The appellant are entitled for the Cenvat Credit, hence, the impugned order denying the Cenvat Credit is set aside - Appeal allowed.
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2022 (11) TMI 746
Rejection of refund claim - rejection on the ground of limitation provided under Notification No. 12/2013 dated 01.07.2013 as amended - rejection on the ground that the services were availed for the unregistered premises - HELD THAT:- The submissions made by the appellant to the effect that date of payment of advance amount is the date of payment of premium has not been considered by the authorities below inasmuch as no such finding to such extent has been recorded in this regard. Since the appellant, at this juncture, has submitted the working sheet mentioning that the refund application was filed within stipulated time of one year from the relevant date, the refund benefit should be available to the appellant - there are force in the submission of the appellant that the date of payment of premium is specifically to be examined by the original authority for ascertaining the fact regarding the time bar aspect as provided in the said notification for grant of the refund benefit. The matter is remanded to the original authority for recording a fresh finding - appeal is allowed by way of remand.
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Indian Laws
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2022 (11) TMI 745
Exemption from payment of additional toll under the New Industrial Policy, 2004 and package of incentives for development of industries in Jammu Kashmir - violation of provisions of SRO 22 of 2004 dated 31.01.2004 or not - HELD THAT:- The petitioner is not entitled to the benefit of exemption of additional toll on components, plants and machinery, building material and other equipments procured from outside the State for undertaking substantial expansion of the Unit either under the Industrial Policy, 2004 promulgated vide Government Order No.21-Ind of 2004 dated 27.01.2004 or under SRO 22 of 2004 dated 31.01.2004. This we say for the reasons given hereinafter. From a reading of Clause 3.11, it is clearly evident that the Industrial Policy envisages grant of exemption from payment of additional toll on components, plant and machinery and other equipments procured from outstate the State for building factory for a period of five years from the date of registration of the Unit as SSI, Medium or Large. Indisputably, the petitioner-Unit was registered with the Department of Industries in the year 1966 and, therefore, Clause-3.11 reproduced herein above was not in any way applicable - From a reading of Clause-3, it is abundantly clear that additional toll on components, plant and machinery, building material and other equipments imported from outside the State for construction of factory is exempted for a period of five years from the date of registration of the Units in Small, Medium or Large scale sector (including prestigious units). There is no denying the fact that as per the Industrial Policy, 2004, particularly Clause 3.14, the petitioner is entitled to toll tax exemption but Clause 3.14 is required to be read subject to SRO 22 of 2004. Levy of toll is regulated by the Act of legislation known as the Jammu and Kashmir Levy of Tolls Act, Samvat 1995. Section 3 of the Act is a charging Section and provides that levy of toll on various items brought in or taken out of the established check posts under the Act. Section 5 of the Act confers upon the Government power to grant exemption from payment of toll levied under the Act - with a view to give effect to the promises held out to the existing and prospective entrepreneurs in the Industrial Policy, 2004, the Government, inter alia, came up with a notification in exercise of the powers conferred by Section 5 of the Act as well. This was done by the Government in terms of SRO 22 of 2004. The impugned order of consideration is fully in consonance with law and the petitioner was rightly held not entitled to the benefit of exemption from payment of additional toll chargeable on capital goods imported by it for undertaking substantial expansion of its unit in the year 2006. Such exemption came to be provided only with the issuance of SRO 85 of 2008 and was to remain in operation w.e.f. 01.04.2008 to 31.03.2009 - The communications relied upon by the petitioner, particularly those made by the Department of Industries in favour of the petitioner are interdepartmental communications incapable of conferring any right on the petitioner to claim exemption from payment of additional toll under the Act and SRO 22 of 2004 issued thereunder. In terms of Article 265 of the Constitution of India, no taxes can be imposed, levied or collected save by authority of law. Petition dismissed.
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2022 (11) TMI 744
Forfeiture of properties of the first respondent - COFEPOSA - allegation that properties acquired out of the proceeds of illegal activities of her father, against whom proceedings under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 were launched - theory of presumption and burden to disprove - HELD THAT:- Supreme Court in Attorney General for India and Others v. Amratlal Prajivandas and others, [ 1994 (5) TMI 235 - SUPREME COURT ] held that though Section 8 of the Act of 13 of 1976, places the burden of establishing that the properties mentioned in the show cause notice issued under Section 6 of the Act of 13 of 1976, are not illegally acquired properties lies upon the noticee, the Competent Authority will have to at the least establish the connecting link between acquisition of those properties and the illegal earnings of the detenue and it is the burden of disproving such link that is placed on the noticee by operation of Section 8 of the Act of 13 of 1976. The question that would arise in the case on hand is not one of burden of proof, but as to whether the Competent Authority has made out the jurisdictional fact, namely the link or the nexus between the acquisition of the property and the illegal income of the father of the first respondent/detenue. If we are to look at the notice under Section 6(1) of the Act of 13 of 1976, and the subsequent proceedings there is nothing in the said notice to connect the purchase of the property with the illegal income of the detenue. The notice proceeds on the footing that once the relationship between the noticee and the detenue is established the property in the hands of the noticee would automatically become illegally acquired property. No doubt the learned Additional Solicitor General would be right in his submission that the Writ Court ought not to have invoked Section 102 of the Evidence Act, to conclude that the burden is on the Competent Authority, but at the same time, he cannot succeed unless he is able to go one step further and establish the nexus or the link. A perusal of the notice issued under Section 6 and the order of the Competent Authority passed under Section 7 of the Act of 13 of 1976, would demonstrate that such a link or nexus is totally absent and no effort or endeavour has been made to establish such link or nexus - there are no reason to interfere with the conclusion of the Writ Court in quashing the proceedings. Appeal dismissed.
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