TMI Tax Updates - e-Newsletter
November 26, 2021

Case Laws in this Newsletter:

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

Articles

1. TAXABILITY OF JOB WORKS OF TANKER BODY BUILDING

   By: Dr. Sanjiv Agarwal

2. ELECTRONIC DUTY CREDIT LEDGER REGULATIONS, 2021

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. “Insolvency and Bankruptcy Code (IBC), 2016 a “gamechanger reform”: Shri Piyush Goyal

2. Income Tax Department conducts search operations in Maharashtra, Gujarat and Delhi on certain Indian companies and their associate concerns, controlled by a neighbouring country

3. Union Finance Minister Ms. Nirmala Sitharaman visits Nhava Sheva; Reviews activities of Indian Customs

4. Registration granted to 105 Industrial Units under the North East Industrial Development Scheme (NEIDS), 2017 by the 9th Empowered Committee Meeting

5. PM Gati Shakti- BISAG-N team conducts capacity building exercises with senior government officials of relevant departments

Notifications

Customs

1. 94/2021 - dated 25-11-2021 - Cus (NT)

Amendment in Notification No. 92/2021-CUSTOMS (N.T.), dated 18th November, 2021

2. 93/2021 - dated 24-11-2021 - Cus (NT)

Amendment in Notification No. 92/2021-CUSTOMS (N.T.), dated 18th November, 2021

GST - States

3. S.O. 107/PGSTR/2017/R.61 /P.A.5/2017/S.168/2021 - dated 6-9-2021 - Punjab SGST

Prescribe the due dates for furnishing of FORM GSTR-3B for the months of July, August 2017

4. S.O. 106/P.A.5/2017/S.128/2021 - dated 6-9-2021 - Punjab SGST

Seeks to rationalize late fee for delay in filing of return in FORM GSTR-7

5. S.O. 105/P.A.5/2017/S.168/PGSTR/2017/R.61/2021 - dated 6-9-2021 - Punjab SGST

Prescribe the due dates for furnishing of FORM GSTR-3B for the months from April, 2019 to June, 2019

6. S.O. 104/P.A.5/2017/Ss. 1 and 51/Amd./2021 - dated 6-9-2021 - Punjab SGST

Amendment in Notification No. S.O.144/P.A.5/2017/Ss.1 and 51/2018, dated the 3rd September, 2018

7. S.O. 103/P.A.5/2017/S.148/2021 - dated 6-9-2021 - Punjab SGST

Seeks to extend the due date for filing of FORM GSTR - 1 for taxpayers having aggregate turnover upto ₹ 1.5 crores

8. S.O. 102/P.A.5/2017/S.168/2021 - dated 6-9-2021 - Punjab SGST

Prescribe the due dates for furnishing of FORM GSTR-3B for the months of April, May and June, 2018

9. S.O. 101 /P.A.5/2017/S.128/2021 - dated 6-9-2021 - Punjab SGST

Seeks to rescind Notification No. S.O.15/P.A.5/2017/S.128/2018, dated the 27th February, 2018

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/IMD/DF2/CIR/P/2021/668 - dated 24-11-2021

Norms for Silver Exchange Traded Funds (Silver ETFs) and Gold Exchange Traded Funds (Gold ETFs).

2. SEBI/HO/CFD/DCR2/P/CIR/2021/0661 - dated 23-11-2021

Publishing Investor Charter and Disclosure of Complaints by Merchant Bankers on their Websites

3. SEBI/HO/MRD2/DCAP/P/CIR/2021/667 - dated 23-11-2021

Segregation and Monitoring of Collateral at Client Level – Extension of timeline

4. SEBI/HO/MRD1/MRD1_ICC1/P/CIR/2021/664 - dated 23-11-2021

Disclosure of Complaints against the Stock Exchanges (excluding Commodity Derivatives Exchanges)/Depositories/Clearing Corporations

5. SEBI/HO/CFD/DIL1/P/CIR/2021/0660 - dated 23-11-2021

Non-compliance with certain provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”)

6. SEBI/HO/IMD/IMD-I/DOF6/P/CIR/2021/663 - dated 22-11-2021

Clarifications regarding amendment to SEBI (Alternative Investment Funds) Regulations, 2012

7. SEBI/HO/CFD/CMD1/CIR/P/2021/662 - dated 22-11-2021

Disclosure obligations of listed entities in relation to Related Party Transactions

IBC

8. IBBI/LIQ/46/2021 - dated 24-11-2021

Filing of list of stakeholders under clause (d) of sub-regulation (5) of regulation 31 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016

9. IBBI/CIRP/47/2021 - dated 24-11-2021

Filing of list of creditors under clause (ca) of sub-regulation (2) of regulation 13 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

Customs

10. Instruction No. 25/2021 - dated 24-11-2021

Import of teas from the neighbouring country (Nepal) as "Darjeeling Tea"

11. Instruction No. 24/2021 - dated 24-11-2021

Direction under Section 16 (5) of Food Safety and Standards Act, 2006 regarding extension of validity of the NOC for the Alcoholic Beverages Bottled in Origin & in Bulk

Highlights / Catch Notes

GST

• No ITC for AC Stage Carriages on Services from Similar Suppliers Under Sl.No.8(ii)(b) - Lower Tax Rate Applied.

  Case-Laws - AAR : Input tax credit (ITC) - Air Conditioned Stage Carriage - There is no exclusion of services from other taxable persons in the same line of business from this condition, as the entry clearly mentions that ITC should not be taken on “Goods & Service used in supplying the service”. Therefore if they are recipient of services from other suppliers who are in the same line of business and would like to claim a lower rate of tax under Sl.No.8(ii)(b), they cannot claim the credit of input tax charged on services from these other suppliers of similar service - AAR
  Visit to Get Source

  ---

• Telecom Services for GHMC Not Directly Linked to Constitutional Duties Under Article 243W and Schedule 12.

  Case-Laws - AAR : Classification of services - telecom services provided by Airtel to Greater Hyderabad Municipal Corporation (GHMC) - The applicant is providing data and voice services to GHMC and to the employees of the municipalities and general purpose for office and administrative purposes. Thus there is no direct relation between the services provided by the applicant and the functions discharged by the GHMC under Article 243W read with schedule 12 to the Constitution of India. - AAR
  Visit to Get Source

  ---

• Hospitality Services with Accommodation as Principal Supply Qualify for GST Exemption Under SAC 9963 Due to Low Tariff.

  Case-Laws - AAR : Classification of GST - Composite supply or a mixed supply? - The supply envisaged in the agreement, is a composite supply of hospitality services in which provision of accommodation, food and other amenities are naturally bundled in the course of business and supplied in conjunction. The provision of accommodation is the principal supply, being provided to all the candidates (headcount wise) and the applicable SAC is 9963 and per day equivalent tariff being less than ₹ 1000, the benefit of exemption is available - AAR
  Visit to Get Source

  ---

Income Tax

• Assessing Officer Wrongly Changed Consistent Revenue Recognition Method for Subscription Services, Violating Accounting Standard 9 (AS-9.

  Case-Laws - AT : Unearned revenue from subscription services - AO has clearly erred in changing consistently followed method of revenue recognition adopted by the assessee.We find due merits of the revenue recognition adopted by the assessee which is duly supported by mandate of AS-9 and other parameters referred above - it is also a settled law that unless there is change in the facts and circumstances or that it can be said that earlier adopted system was wrong, revenue recognition method cannot be disturbed. - AT
  Visit to Get Source

  ---

• Trust Denied Tax Exemption u/s 11 Due to Mutuality Principle, Educational Objective Not Affected by Section 2(15) Proviso.

  Case-Laws - AT : Exemption u/s 11 - claim denied relying on Principle of mutuality - quite clearly the object of the appellant trust is to promote education in the field of science of medicine and the profit on sale of books/journals is incidental thereto. In this view of the matter, proviso to Section 2(15) will have no application in the present case. It may be borne in mind that proviso to Section 2(15) comes into play only in respect of “any other object of general utility” and not in respect of relief to poor, education, medical relief etc. - AT
  Visit to Get Source

  ---

Customs

• Appeal Against Penalty u/s 114AA of Customs Act for Wrong Invoice by Foreign Supplier Succeeds.

  Case-Laws - AT : Levy of penalty u/s 114AA of Customs Act, 1962 - wrong invoice was sent by the foreign supplier - It was a genuine mistake of issuing wrong invoice which has been used by the CHA to file the Bill of Entry. The wrong invoice of USD 23750 was not given by the appellant, but the same was collected by CHA from the shipping liner. The appellant cannot be implicated for such mistake by imposing penalty. - AT
  Visit to Get Source

  ---

IBC

• Tribunal Reviews Formation of Consolidated Creditors' Committee Amid Group Insolvency Gaps in Insolvency and Bankruptcy Code.

  Case-Laws - AT : CIRP Proceedings - Resolution plan - seeking directing to form a consolidated ‘Committee of Creditor’ (CoC) of the Corporate Debtor alongwith ‘parent company’ and the Corporate Debtor etc. - The Code is silent on the issue of ‘Group Insolvency’ and only when input is available in respect of all subsidiary companies and holding company then only it can be examined and that too only with respect to the material available in the Appeal Paper book and relief sought. This Tribunal is the creature of the statute only and hence, it has to work within the framework of the Code. - AT
  Visit to Get Source

  ---

• Petitioner with full rights can't use Section 7 for dues; opts to sell mortgaged assets as per deed terms.

  Case-Laws - Tri : Initiation of CIRP - The petitioner has absolute rights in the mortgaged property and cannot initiate any action under section 7 upon non-payment of dues under the debenture trust deed, the petitioner has agreed to recourse and sell the mortgaged assets and recover the money due - this Bench conclude upon non-payment dues under the debenture trust deed, there is no default and the petitioner has agreed to recourse as envisaged under registered debenture trust deed-cum-mortgage. - Tri
  Visit to Get Source

  ---

• Only creditors, members, or partners can seek to void transactions in corporate debtor cases. Others lack standing.

  Case-Laws - Tri : Implementation of Resolution Plan - The mandate is very clear that only a "creditor, member or a partner" of the corporate debtor can make an application to the Adjudicating Authority to declare such transactions as void and reverse their effect. The applicant not being a creditor or partner of the corporate debtor is not competent to raise the issue nor can seek a direction to respondent No. 3 concerning the matter. - Tri
  Visit to Get Source

  ---

Service Tax

• Service Tax Refund Allowed Only u/s 11B; Must Prove No Transfer of Tax Burden to Another Party.

  Case-Laws - AT : Refund of service tax - erroneous classification of service tax - There can be no refund except for in the manner provided by Section 11B, i.e. without Assistant Commissioner recording his satisfaction to effect that the burden of tax paid and claimed as refund has not been further passed on. - AT
  Visit to Get Source

  ---

Central Excise

• Demand for 10% value of exempted goods u/r 6(3) unsustainable if proportionate CENVAT credit is reversed with interest.

  Case-Laws - AT : Reversal of CENVAT Credit - common input - Furnace Oil - Once the proportionate credit in respect of the inputs used in the manufacture of exempted goods has been reversed and interest thereupon was paid in case of any delay in reversal, the demand of 10% of the value of exempted goods under Rule 6(3) will not sustain - AT
  Visit to Get Source

  ---

Case Laws:

• GST

• 2021 (11) TMI 864
  Refund of GST - Section 54(11) of the Central Goods and Service Tax Act, 2017 - period of July, 2019 and August, 2019 - HELD THAT:- T he petitioner states that subsequent to the filing of the present writ petition, investigation has concluded and two Show Cause Notices dated 29th July, 2021 have been adjudicated upon. The present writ petition is disposed of as having become infructuous.

  ---

• 2021 (11) TMI 863
  Provisional attachment of accounts - initiation of proceedings by Respondent against the Petitioner - Section 67 of the CGST Act - HELD THAT:- At Court s direction, learned counsel for respondent no.1 has obtained instructions. He admits that every provisional attachment shall cease to have effect after the expiry of period of one year from the date the order had been passed under Section 83(1) of the Act. The present writ petition is allowed and the Respondents are directed to de-freeze the Petitioner s Current Account with Respondent no.2-Bank, within three working days of uploading of the present order - petition disposed off.

  ---

• 2021 (11) TMI 862
  Release of seized goods alongwith conveyance - exempt goods - Section 129 of the TNGST Act, 2017 - HELD THAT:- Considering the fact that the order has been passed under Section 130 of the TNGST Act, the impugned order dated 27.09.2021 stands quashed and the same shall be treated as Show Cause Notice issued under Section 129 of the TNGST Act, 2017. The petitioner is directed to comply with the requirements of Section 129 of the TNGST Act, 2017. If the petitioner pays the amount as is completed under Section 129 of the TNGST Act, the respondents shall release the vehicle. It is made clear that the respondents shall accept the amounts if the same is tendered by the petitioner. Writ Petition stands disposed of.

  ---

• 2021 (11) TMI 861
  Classification of services - rate of GST - Input tax credit - Air Conditioned Stage Carriage - inward supply of services received from the suppliers who are in the same line of business - Sl.No.8 (ii)(b) and Sl.No.8(vi) of Notification No. 11/2017-Central Tax (Rates), dt: 28-06-2017 - option of 12% (6% each towards CGST SGST) with no conditions attributed to it is applicable or not - HELD THAT:- The service mentioned at Sl.No.8(ii)(b) is Air Conditioned Stage Carriage whereas the service mentioned at Sl.No.8(vi) is transport of passengers in any motor vehicle designed to carry passengers where the cost of fuel is included in the consideration charges from the service recipient. Evidently though both the entries deal with motor vehicles for carrying passengers, the entry at Sl.No.8(vi) is a general entry whereas the entry at Sl.No.8(ii)(b) is the specific entry, i.e., Air Conditioned Stage Carriage. And it is the principle of interpretation of statute that general things do not derogate from special things and therefore that special provision prevails over the general provision. As the applicant has stated that they will be in the business of passenger transport in Air conditioned buses as stage carriages, the applicable entry in view of the above discussions is Sl.No.8(ii)(b) of Notification No.11 of 2017, dt: 28-06-2017 - Further they are liable to pay tax at the rate of 2.5% under CGST SGST respectively if they are not claiming any ITC on goods and services used in supplying service in the said entry. There is no exclusion of services from other taxable persons in the same line of business from this condition, as the entry clearly mentions that ITC should not be taken on Goods Service used in supplying the service . Therefore if they are recipient of services from other suppliers who are in the same line of business and would like to claim a lower rate of tax under Sl.No.8(ii)(b), they cannot claim the credit of input tax charged on services from these other suppliers of similar service - the entry Sl.No.8(vi) is not applicable to the nature of business of the applicant.

  ---

• 2021 (11) TMI 860
  Classification of services - telecom services provided by Airtel to Greater Hyderabad Municipal Corporation (GHMC) - Nil rated under GST as per the S. No. 3 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 or not - pure services - functions entrusted under article 243W - Invoices for telecommunication services are to be issued with (or) without GST - HELD THAT:- Under serial no. 3 of Notification No. 12/2017 pure services provided in relation to any function entrusted to a municipality under Article 243W of the Constitution of India is eligible for exemption from GST. Clearly the exemption should be directly related to the functions enumerated under Article 243W of the Constitution of India i.e., Responsibilities specified at Sl No.(1) or those functions listed under 12th schedule. Hon ble Supreme Court of India in the case of HH. MAHARAJADHIRAJA MADHAV RAO JIWAJI RAOSCINDIA BAHADUR VERSUS UNION OF INDIA [ 1970 (12) TMI 87 - SUPREME COURT] observed that the expression relating to means to bring into relation or establish a relation. It was further clarified that there should be a direct and immediate link with a covenant and that there cannot be any independent existence outside such covenant. Thus, the applicant is providing data and voice services to GHMC and to the employees of the municipalities and general purpose for office and administrative purposes. Thus there is no direct relation between the services provided by the applicant and the functions discharged by the GHMC under Article 243W read with schedule 12 to the Constitution of India. Therefore these services do not qualify for exemption under Notification No. 12/2017.

  ---

• 2021 (11) TMI 859
  Admissibility of application - Classification of services - rate of GST - EPC contract engaged in works, viz; site grading, earth filling, road works, storm water drains, utility corridor, street lighting, water storage and distribution system - civil contractor engaged in civil construction works, viz; prefabricated PUP (polyurethane) Administrative building, training centre, technology facilitation centre, etc. - HELD THAT:- It is evident that an applicant can seek an Advance Ruling only in relation to supply of goods or services or both undertaken or proposed to be undertaken by them. Further, as per Section 103 (1) of the GST Act, the ruling is binding only on the applicant and the concerned officer or the jurisdictional officer of the applicant. In the case at hand, the applicant is the recipient of the services and not supplier of such service. The application is not admitted, under Section 98(2) read with Section 95 (a) of CGST Act, 2017/TNGST Act, 2017.

  ---

• 2021 (11) TMI 858
  Classification of GST - applicant to provide the boarding, lodging facilities and such other agreed services, to AMSL - composite supply or a mixed supply? - principal supply or not - exemption under N/N. 12/2017-CT (Rate) dated 28.06.2017 - difference of opinion - HELD THAT:- The applicant is engaged in the business of hospitality providing boarding, lodging facilities and such other services to AMSL, who is into training youth in various healthcare related vocational programs as part of implementation of its projects under Deen Dayal Upadhyay Grameen Kaushalya Yojana (DDU-GKY). AMSL has engaged the applicant to provide the boarding, lodging facilities and such other agreed services, to AMSL in line with the SOP given by the Government of India for the implementation and furtherance of its projects under Id DDU GKY. As per the terms of agreement entered into by the applicant with AMSL, the consideration payable shall include fixed and variable cost towards accommodation and provision of food and other facilities based on the actual number of candidates availing the services at the hostel. The applicant has stated that, their primary and predominant activity is to provide accommodation to the candidates at the hostel, the supply of food and other amenities is ancillary but an integral part of the principal supply. The applicant has stated that the activity is a composite supply, where the principal supply is accommodation services. The applicant has stated that SAC 996322 shall be applicable to their activities and the services are exempted under Sl.no. 14 of Notification no. 12/2017CT (Rate) dt. 28.06.2017. From the Schedule of Charges (Schedule III) of the Agreement, it is seen that Rs. 3500/ is fixed towards the Rent per Candidate, per month for regions of Chennai and Rs. 3000/ towards the Rent per candidate for the accommodation per month in any region out of chennai, which translates to per day equivalent tariff of Rs. 117/Rs. 100 and the consideration for other supplies is Rs. 183/Rs. 150 per day. The total consideration/ equivalent declared tariff as per the agreement for the composite supply per day, amounts to Rs. 300/- Rs. 250/- per candidate per day which is below the specified limit of Rs. 1000 per day. Therefore, I find that the exemption at SI.No. 14 of Notification no.12/2017 CT(Rate) dt.28.06.2017 is applicable to the case in hand. The supply envisaged in the agreement entered with AMSL is a composite supply of hospitality services in which provision of accommodation, food and other amenities are naturally bundled in the course of business and supplied in conjunction. The provision of accommodation is the principal supply, being provided to all the candidates (headcount wise) and the applicable SAC is 9963 and per day equivalent tariff being less than Rs. 1000, the exemption provided under SI.No.14 of Notification no. 12/2017-CT(Rate) dt.28.06.2017 is applicable to the ease in hand. In view of the difference in the opinions of the Members, the case is referred to the Appellate Authority for hearing and decision on this issue in terms of Section 98(5) of the CGST/TNGST Act 2017, which provides that where the members of the Authority differ on any question on which the advance ruling is sought, they shall state the point or points on which they differ and make a reference to the Appellate Authority for hearing and decision on such question.

  ---

• Income Tax

• 2021 (11) TMI 857
  Validity of Assessment order passed by the National Faceless Assessment Centre - as argued the impugned order passed without appropriate Risk Management Strategy of the Board is contemplated under Section 144 (B) (1) (xvi) - HELD THAT:- Section 144 (B) of the Income Tax Act, 1961 was inserted with effect from 01.04.2021. As a matter of act the aforesaid provision contemplates that National Faceless Assessment Centre to examine the draft assessment order in accordance with the Risk Management Strategy specified by the Board. The Counsel for respondents was unable to confirm whether any Risk Management Strategy has been specified by the Board. How assessment orders have been passed by the respondents in terms of the aforesaid provisions. The writ petitioner is, therefore, directed to file a statutory appeal in terms of the above provisions within a period of 30 days from the date of receipt of this order. Considering the fact that the impugned order passed without appropriate Risk Management Strategy of the Board is contemplated under Section 144 (B) (1) (xvi) the Appellate Commissioner may consider the appeal of the writ petitioner, if such appeal is filed on merits and in accordance with law. The mandatory requirement a pre deposit under Section 220 (6) shall however, be waived in the light of the fact that the entire assessment proceedings was complete by the respondents at the fag end of the limitation to avoid lapsing of on account of limitation. The Appellate Commissioner is, therefore, directed to pass appropriate orders on merits.

  ---

• 2021 (11) TMI 856
  Revision u/s 263 by CIT - Reopening of assessment u/s 147 initiated against assessee - As pe CIT AO had failed to make independent inquiries to verify the source of cash deposited in bank by the assessee and also the claim of interest expenditure as per section 36(1)(iii) - HELD THAT:- What is crucial and important for assuming the jurisdiction to reopen the case of an assessee u/s 147 of the Act is the belief of the AO of the escapement of income . The mere fact that the cash is found deposited in the bank account may lead to a suspicion at best but it definitely cannot lead to belief of escapement of income. The cash deposit may be justified by the facts and figures revealed in the income tax return filed by the assessee. In any case there has to be more information in the possession of the AO to form belief that the cash deposits represent assesses own escaped income. In the present case we find that the AO has no categorical information in his possession either regarding the fact of return having been filed by the assessee nor any other information to the effect that the source of the cash deposits was unexplained. No inquiries were independently conducted by the AO regarding the source of cash deposits, which would have surely assisted in the formation of belief of escapement of income with regard to the same. The reasons recorded therefore do not justify the assumption of jurisdiction by the AO to reopen the case of the assessee u/s 147 of the Act. The order passed u/s 147 of the Act therefore is clearly not a valid order in the eyes of law. Collateral proceedings on the said order, u/s 263 of the Act, are therefore, we agree, not sustainable in law. The order passed by the Ld.PCIT u/s 263 of the Act is accordingly set aside. - Decided in favour of assessee.

  ---

• 2021 (11) TMI 855
  Validity of Reopening of assessment u/s 147 - addition on the basis of valuation report of District Valuation Officer (DVO) - reopening of assessment was beyond four years - HELD THAT:- Since the allegation of escapement of income is more than Rs. 1 lakh, the reopening cannot be said to be invalid in view of the provision of Section 149(1)(b) of the Act. Thus, the ground of maintainability of the reassessment proceeding as raised by the assessee fails. Reopening of assessment on DVO s report - Where the AO completed assessment under Section 143(3) making certain addition in respect of unexplained investment he could not reopen the said assessment for enhancement of said addition merely on the basis of the report of the DVO. In this regard, we are enlightened by the ratio laid down in AKSHAR INFRASTRUCTURE PVT LTD [ 2017 (3) TMI 393 - GUJARAT HIGH COURT] . Also in MUNIR ISMAIL VORAJI [ 2017 (5) TMI 684 - GUJARAT HIGH COURT] where on the basis of DVO s report reopening notice was issued and challenged before the Court. It was further found that no further enquiry was conducted to find out fair market value, neither was there any tangible material available to the AO to form an opinion that income chargeable to tax has escaped assessment. Ultimately such reopening of assessment merely on the basis of the DVO s report was held to be unjustified. We find similar fact in the case in hand which has been failed to be controverted by the Ld. DR before us. Therefore, we find no merit in the reopening the assessment under Section 147 of the Act merely on the basis of the DVO s report. - Decided in favour of assessee.

  ---

• 2021 (11) TMI 854
  Validity of assessment - Addition towards family cash found in search - AR submitted that notice u/s 143(2) was not served to the assessee within the specified time - HELD THAT:- Revenue can avail Section 292BB only if notice u/s 143(2) was issued and not when admitted position is that no notice was issued as in the instant case. As the notice u/s 143(2) should have been issued till the date 30/9/2014 but the same was issued after the statutory limit. This fact was not denied by the Ld. DR after going through the assessment records. Hence, the additional ground raised by the assessee are allowed. Thus, the assessment order itself becomes null and void ab initio as the notice issued was not issued within the specified time. Since, the assessment itself becomes nullity; there is no need to discuss the merits of the case. The appeal of the assessee is allowed.

  ---

• 2021 (11) TMI 853
  Validity of reopening of assessment u/s 147 - as argued notice u/s 143(2) was not properly served to the assessee - bogus purchases - HELD THAT:- As in the assessee s case, under the guise of reopening of the assessment, the AO wants to have a roving inquiry ; as observed hereinabove. Even as per the AO in the reasons recorded, has specially mentioned that for the purpose of verification of the claim, it is necessary to reopen the assessment. Under the circumstances, it cannot be said that the AO had any tangible material to form an opinion that the income chargeable to tax has escaped the assessment. Under the circumstances, the impugned action of reopening of the assessment in exercise of power under section 148 of the Income-tax Act for the reasons recorded hereinabove cannot be sustained. As in the assessee s case, the Assessing Officer has initiated proceeding of reopening on the facts that the assessee had not filed return of income and provision of section 147(b) is also not applicable for reopening of assessment proceeding - However, these details are factually incorrect. The assessee had filed his return of income on September 18, 2007 and duly acknowledged by the Assessing Officer in para No. 2 of the assessment order. As the return is originally filed by the assessee and no assessment was made earlier therefore, the assessee s case falls in section 147(b) of the Act. Thus, the case was reopened on incorrect fact which shows non-application of mind by the learned Assessing Officer. Hence, the proceeding is itself bad in law. See RMG POLYVINYL (I) LTD. [ 2017 (7) TMI 371 - DELHI HIGH COURT] . Thus reasons recorded by the Assessing Officer suffer from an infirmity of being misconceived in law and, therefore, initiation of proceeding thereupon is bad in law. - Decided in favour of assessee.

  ---

• 2021 (11) TMI 852
  Reopening of assessment u/s 147 - addition account of unexplained investment - HELD THAT:- There is no reference to any subsequent facts, i.e., subsequent to assessment of March, 2016, or information coming to the possession of the AO, even if available on record though discovered later, i.e., after 10/3/2016, giving rise to the reason to believe escapement aforesaid, and which is a condition precedent for the issue of notice u/s. 148 and assumption of jurisdiction u/s. 147. The reasons recorded u/s. 148(2) refer to the AO s letter dated 22/2/2016 and the assessee s reply thereto, both events occurring prior to 10/3/2016, i.e., during the course of the original assessment proceedings. Further, the AO s comments to the audit objection make it amply clear that the assessee s reply to his letter dated 22/2/2016 was accepted by the AO. The Revenue has not shown the said acceptance to be infirm, much less perverse, even as the course available in the former case would be a revision u/s. 263. It is also not the Revenue s case that the AO s opinion accepting the assessee s reply was perverse, i.e., a view no person properly instructed on facts and in law could take, as where the said reply is irrelevant or does not meet the letter dated 22/2/2016 by the AO. I am conscious, while so discussing, that there is no challenge to the notice u/s. 148(1) by the assessee, which aspect, i.e., the validity of the reasons recorded u/s. 148(2) or of the assumption of jurisdiction u/s. 147, must, therefore, be regarded as having attained finality. The present discussion only seeks to emphasize the non-sustainability of the argument advanced by the ld. Sr. DR inasmuch as there has been, both factually or legally, no omission to consider the assessee s explanation qua the impugned investment during the original assessment proceedings, nor the AO s view in accepting the said explanation perverse, in which either case the AO s objection to the audit objection would be rendered invalid in law. And the Revenues subsequent action in issuing notice u/s. 148 interpreted, even as argued by the ld. Sr. DR, as an acceptance by the Revenue of the revenue audit objection. Needless to add, the Revenue has not shown me any counter by the RAP to the AO s comments dated 13/4/2016, meeting his objection, so as to exhibit thereby that the audit objection would survive the AO s comments, i.e., obtain despite the same, which (comments) would thus stand rendered inconsequential - Decided against revenue.

  ---

• 2021 (11) TMI 851
  TP adjustment - Comparable selection - international transactions pertaining to provision of sales and marketing support services - Comparability of Axis Integrated Systems Limited - HELD THAT:- Axis is engaged in the business of trading digital signatures. Further, Axis is also engaged in providing Liasioningservices in the area of service tax, excise, foreign trade policy licensing, duty free credit entitlement certificates, etc -Axis develops and owns unique intellectual property tool Axis Mine . Judicial Pronouncements supporting exclusion of companies deriving significant benefit from proprietary process - See M/S ROLLS ROYCE MARINE INDIA PVT. LTD. [ 2014 (11) TMI 429 - ITAT MUMBAI] ,GLOBAL LOGIC INDIA PVT. LTD.[ 2015 (6) TMI 132 - ITAT DELHI] ,GENZYME INDIA PVT. LTD. [ 2018 (4) TMI 1772 - ITAT DELHI] - Axis rejected as a comparable as relying on LI AND FUNG (INDIA) PVT. LTD. [ 2018 (5) TMI 1009 - ITAT DELHI] . Unearned revenue from subscription services - HELD THAT:- As decided in own case we find that assessee has been following consistent system of revenue recognition. The assessee is inter alia engaged in the business of marketing, promotion and sale of Red Hat subscriptions to customers in Indian sub-continent to avail support services that are for the open source software system during the subscription period ranging from one to seven year, which is established by the special services agreement or contract. AO has clearly erred in changing consistently followed method of revenue recognition adopted by the assessee.We find due merits of the revenue recognition adopted by the assessee which is duly supported by mandate of AS-9 and other parameters referred above - it is also a settled law that unless there is change in the facts and circumstances or that it can be said that earlier adopted system was wrong, revenue recognition method cannot be disturbed. We note that such case exists here. In these circumstances, we set aside the order of the Assessing Officer and delete the addition in this regard.- Decided in favour of assessee.

  ---

• 2021 (11) TMI 850
  Exemption u/s 11 - claim denied relying on Principle of mutuality - AO considering the activities of the appellant trust as that of a mutual association - HELD THAT:- Authorities below have proceeded on the misconception that the assessee trust has claimed tax exemption on the basis of mutuality principle alone. Learned CIT(A) has rather summarily dismissed the contention of the assessee with respect of exemption under section 11 by the virtue of being a charitable institution, and simply observed that all the case laws relied upon by the AR are distinguishable . In our considered view quite clearly the object of the appellant trust is to promote education in the field of science of medicine and the profit on sale of books/journals is incidental thereto. In this view of the matter, proviso to Section 2(15) will have no application in the present case. It may be borne in mind that proviso to Section 2(15) comes into play only in respect of any other object of general utility and not in respect of relief to poor, education, medical relief etc. As long as object of the institution is charitable, as in our considered view, in this case, exemption cannot be declined merely on the ground that the assessee has received consideration for sale of training material or journal etc. incidental to furtherance of it s objective of imparting education. Thus we uphold the plea of the assessee. The Assessing Officer is, accordingly, directed to allow exemption under section 11 in respect of income of the assessee.

  ---

• 2021 (11) TMI 849
  Revision us 263 - time limit for passing the order of assessment - whether the date of dispatch has to be considered as the date of the order and consequently the impugned order has to be held as bad in law and barred by limitation? - HELD THAT:- As relying on M/S MAHARAJA SHOPPING COMPLEX [ 2014 (10) TMI 880 - KARNATAKA HIGH COURT] wherein held the date of dispatch of the order of assessment should be construed as the date of order of assessment and consequently quashed the orders of assessment as barred by limitation - Following the aforesaid judgment of Hon ble High Court of Karnataka, the impugned order has to be held as barred by time and is liable to be annulled and is hereby annulled. - Decided in favour of assessee.

  ---

• 2021 (11) TMI 824
  Validity of reopening of assessment - As argued by petitioner-company notice issue to an entity not in existence at the relevant time, as it had merged with the petitioner-company - HELD THAT:- Prima facie, there appears to be merit in the contention advanced by petitioner-company Respondents/revenue.says that, he will revert with instructions on this aspect of the matter. We may also note that although opportunity was given to the respondents/revenue to file a counter-affidavit in the matter; no affidavit has been filed, as yet. List the matter for directions on 17.11.2021.

  ---

• 2021 (11) TMI 823
  Validity of reopening of assessment - As argued by petitioner-company notice issue to an entity not in existence at the relevant time, as it had merged with the petitioner-company - HELD THAT:- Prima facie, there appears to be merit in the contention advanced by petitioner-company Respondents/revenue.says that, he will revert with instructions on this aspect of the matter. We may also note that although opportunity was given to the respondents/revenue to file a counter-affidavit in the matter; no affidavit has been filed, as yet. List the matter for directions on 17.11.2021.

  ---

• 2021 (11) TMI 822
  Validity of National Faceless Assessment - as argued respondents have not issued the mandatory draft assessment order as required under Section 144B(1)(xvi)(b) - HELD THAT:- This court has in many orders held that provisions of Section 144B are mandatory. Under Section 144B(1)(xvi)(b), if there is going to be a variation prejudicial to the assessee, a draft assessment order has to be issued. Admittedly it has not been issued. It has also been held by this court that non compliance with the procedure laid down under Section 144B of the Act would make the assessment order non est in view of the provisions of sub Section 9 of Section 144B of the Act. Since admittedly, there has been non compliance with the mandatory procedure laid down under Section 144B, the assessment order dated 13 th May 2021 is also non est. The order impugned is hereby quashed and set aside. Consequent demand notice and penalty notice both dated 13th May 2021 are also quashed and set aside.

  ---

• Customs

• 2021 (11) TMI 848
  Auction - ownership of the asset vests in the petitioner - NCLT is the appropriate forum to adjudicate the petitioner s prayers or not - re-export of goods - HELD THAT:- There is no dispute on facts and the question of i) error in the contract heading, ii) inadvertent absence of the signature of R5 in the copy of the contract placed in the typed set, iii) quantification of the asset supplied and paid for being 9899 MT and the remaining being 19537.50 MT stand categorically explained. Thus, the so-called factual discrepancies will not frustrate the maintainability of this writ petition. The Code is intended to consolidate and address the laws relating to re-organisation and insolvency resolution of corporate persons, firms and individuals in a time bound manner and in the interests of all stake holders. The RP is appointed to guide the process of CIRP under Section 20 of the Code and is expected to manage the operations of the corporate debtor as a going concern. As a part of such management, he is to make every endeavour to protect and preserve the value of the property of the corporate debtor - In the present case, the RP endeavours to auction the asset and secure the proceeds of such sale to the credit of the debtor and the benefit of the insolvency proceedings. In order to preserve the property either by way of auction or otherwise, the pre-condition under Section 20 is that what is stated to be preserved would be the property of the corporate debtor . This is on the one side. It is thus clear that the intention of the Code is never to address those assets over which a debtor has no title. Such assets, infact, stand specifically excluded from the liquidation process, being assets where the debtor might hold some right, but is not the owner to title of the asset. A pre-condition set out is the inclusion of the asset in question in the inventory of the debtor - The facts and circumstances that arose in those writ petitions are different and distinct from those that present themselves in the matter under consideration now. Reliance upon those decisions is thus to no avail. The petitioner thus assumes the status of an unpaid seller who continues to hold title/ownership to the asset imported - the official respondents are directed to dispose the representations of the petitioner dated 04.10.2019 and 04.02.2020 within a period of four weeks from today. Writ Petition is held to be maintainable.

  ---

• 2021 (11) TMI 847
  Levy of penalty u/s 114AA of Customs Act, 1962 - reassessment of the goods by amending the documents under Section 149 of the Act - wrong invoice was sent by the foreign supplier - misuse of provisions of Section 149 to undervalue the goods and evade customs duty - HELD THAT:- There is no previous incidence put forth by the department to prove that the appellant has been indulging in such practice of requesting for amendment of invoice to a lower value and thereafter remitting the balance amount to the foreign supplier, in fact, in the present case, appellant has remitted only US 7140 to the foreign supplier and no further amount has been paid. In later correspondence, the foreign supplier, the Company GY, China has requested the appellant to reexport goods so that they can send the goods actually ordered by the appellant. It was a genuine mistake of issuing wrong invoice which has been used by the CHA to file the Bill of Entry. The wrong invoice of USD 23750 was not given by the appellant, but the same was collected by CHA from the shipping liner. The appellant cannot be implicated for such mistake by imposing penalty. Moreover, the penalty imposed under Section 114AA is attracted only when there is deliberate falsification of documents in order to get undue benefit. Appeal allowed - decided in favor of appellant.

  ---

• Corporate Laws

• 2021 (11) TMI 846
  Sanction of Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016, and under Section 66 of the Companies Act - HELD THAT:- Various directions with regard to holding, convening and dispensing of various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

  ---

• 2021 (11) TMI 845
  Sanction of Composite Scheme of Arrangement - Section 230-232 read with Section 66 of the Companies Act, 2013 and read with of the Companies (Compromise, Arrangement, and Amalgamations) Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions regarding issuance of various notices also issued. The scheme is approved - application allowed.

  ---

• 2021 (11) TMI 844
  Sanction of Scheme of Arrangement - Section 23(1)(b) Read with Section 232 of the Companies Act, 2013, Read with Rule 15 (1) of Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 and Rule 23A of the National Company Law Tribunal Rules, 2016 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - various directions with regard to issuance of notices also issued. The scheme is approved - application allowed.

  ---

• Insolvency & Bankruptcy

• 2021 (11) TMI 843
  CIRP Proceedings - Resolution plan - seeking directing to form a consolidated Committee of Creditor (CoC) of the Corporate Debtor alongwith parent company and the Corporate Debtor etc. - HELD THAT:- It is an admitted fact that debt and default exists. The Corporate Debtor is in a bad financial health and has failed to execute the major project awarded to it by NHAI and there are huge costs overrun - the issue of limitations cannot be acceded too as the Balance Sheet of the corporate debtor as early as in the year 2018 acknowledges debt and Section 18 of Limitation Act, 1963 is applicable to the proceedings under the Code. Hence, the Appellant cannot be given advantage of the limitation also. Even the summary of financial linkage between the parent company and the SPVs cannot be examined on standalone mode. Even value of awards won by SPVs and Financial Debt and other input cannot be examined as these are not the subject matter of the Appeal even remotely. The Code is silent on the issue of Group Insolvency and only when input is available in respect of all subsidiary companies and holding company then only it can be examined and that too only with respect to the material available in the Appeal Paper book and relief sought. This Tribunal is the creature of the statute only and hence, it has to work within the framework of the Code. As far as filing of claim by the Respondent and withdrawing the claim, thereafter, is the prerogative of the Bankers at its own risks and based on its own evaluation. The claim has been withdrawn and permitted by the Adjudicating Authority . Hence, this issue is not of much consideration in the present appeal. Each member of CoCs have an independent mechanism for evaluation considering its own benefits and risks - it is amply clear that the Appellant has to prove the fraudulent or malicious intent and has to file specific application under Section 65 of the Code. The Appellant has not done so. Hence, this Tribunal cannot accede to the request of the Appellant to annule the proceedings. The Adjudicating Authority vide Section 7(5)(a) is fully satisfied from their observations in the impugned order that a Debt beyond the threshold limited of the Code exists and Default has occurred and the Application complied with the relevant applicable regulations and hence, thereafter, admitted the application. Appeal dismissed.

  ---

• 2021 (11) TMI 842
  Liquidation of the Corporate Debtor - Section 33 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is evident from the record that in compliances of Section 21 of Code read with Rule 6 8 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulation), the IRP constituted CoC. The liquidation of the Corporate Debtor is effective from the date of this order and the Moratorium declared vide order dated 03.02.2021 - Application allowed.

  ---

• 2021 (11) TMI 841
  Validity of reclassification of claims of the applicants as Other Creditors from Secured Financial Creditors - revision of claim of RP - HELD THAT:- Nowhere in the agreement, it is mentioned that the loan amount was transferred to the account of the Corporate Debtor. It is contended by the Resolution Professional that examination of the Balance Sheet and other records of the Corporate Debtor suggests that the liability of the Corporate Debtor under the above loan agreements were contingent in nature and the no direct borrowings from the Applicant/Creditor was ever reflected in the financials of the corporate debtor, despite the Corporate Debtor being joint borrower under the above loan agreement. Therefore, in de facto, the liability of corporate debtor under these loan agreements was always contingent and payable only in case of the default by the direct borrower. And this is not disputed by the Applicant. For a debt to become financial debt , the basic elements are that it ought to be a disbursal against the consideration for time value of money. Since, in the case in hand, there is no disbursal of the amount to the corporate debtor, therefore, the applicant cannot be treated as a financial creditor - the loan amount was not disbursed to the Corporate Debtor. Hence, this applicant is also not a financial creditor. Rather, the applicant is a secured creditor. Whether the RP can revise the claim or not? - HELD THAT:- A bare perusal of the Sub Regulation 2 of Regulation 14 (Supra) shows that the interim resolution professional or the resolution professional, as the case may be, shall revise the amounts of the claims admitted, including the estimates of claims made under sub regulation (1) as soon as may be practicable, when he comes across additional information warranting such revision. Application dismissed.

  ---

• 2021 (11) TMI 840
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - event of default - execution of debenture trust deed-cum-indenture of mortgage - HELD THAT:- The terms and conditions or the debenture trust deed-cum-indenture of mortgage, evidences the fact that the corporate debtor in view of the raising finance for the purposes of purchasing FSI, undertaking construction activities, creation and maintenance interest service deserve, meeting issue expenses and another general corporate purposes have issued correct placement of fully secured creditor and unlisted fully transferable non-convertible debentures having face value of Rs. 10 lakhs into two series after grant substitution amount of Rs. 25 crores. It was envisaged under the debenture trust deed-cum-indenture of mortgage that by way of private placement of a letter the issuer has offered for issuance by way of private placement of debentures. It is clear that the English mortgage is created in favour of the debenture trustee for the benefit of debenture holders and therefore, the title, ownership possession, interest, benefits, claim and demand including and lease hold rights or for the mortgaged units were transferred to the debenture trustee absolutely - in terms of the debenture trustee-cum-mortgage deed, it is clear that the title of the mortgaged properties is transferred to the debenture trustee absolutely and upon the satisfaction of the secured obligations the debenture trustee shall reconvey that the property to the corporate debtor the clause of reconveyance. Upon perusal of the debenture trustee deed-cum-indenture of mortgage dated January 10, 2018 it is clear that the events of defaults envisage the realization of security upon happening events of defaults as a mechanism defined under the agreement in the particular manner, wherein he has power to sale the property, upon to receiver and make application to the court permanent receiver under clause 32. It also envisages a provision at clause 35.5, wherein it is agreed between the parties that the debenture holders and debenture trustee can take properties without intervention of court - in terms of the English mortgage, the mortgagor has a recourse to repay the mortgaged debt and has the right to seek reconveyance of the properties to the mortgagor upon complete satisfaction of debt. The petitioner has absolute rights in the mortgaged property and cannot initiate any action under section 7 upon non-payment of dues under the debenture trust deed, the petitioner has agreed to recourse and sell the mortgaged assets and recover the money due - this Bench conclude upon non-payment dues under the debenture trust deed, there is no default and the petitioner has agreed to recourse as envisaged under registered debenture trust deed-cum-mortgage. Petition dismissed.

  ---

• 2021 (11) TMI 839
  Committee of creditors is seeking replacement of IRP - conflict of interest - HELD THAT:- In the present case, in the first meeting of CoC, the CoC proposed to replace IRP and in the second meeting the applicant was authorized to file this application. The CIRP has started on April 6, 2021 and as per the contentions made on behalf of the existing IRP, IRP has conducted CIRP as well as run the affairs of the corporate debtor in a most professional manner even during pandemic situation prevailing all over the country. It is also claimed that the CoC has not controverted this factual position. It is also stated that around 170 days have already passed and much progress has been achieved for resolution of insolvency of the corporate debtor. There should be perfect cohesiveness between the two pillars of CIRP. It is also noted that in the present case IRP was proposed by the original financial creditor, i. e., Invesco Asset Management (India) P. Ltd., which is a large financial institution who had filed application under section 7, hence, prima facie professional competency, capacity and neutral approach of such IRP cannot be doubted. CIRP period timeline of 180 days is also approaching - if it is not found so then CoC may file an application for change of IRP based upon short comings in the overall performance of IRP so fair. In this view of the matter, we refrain ourselves from dealing other contentions made by both sides. Application dismissed.

  ---

• 2021 (11) TMI 838
  Implementation of Resolution Plan - restraint on resolution professional and committee of creditors of GB Global Ltd. (erstwhile Mandhana Industries Ltd.) from handing over the management of the corporate debtor to the new resolution applicant - Fraudulent trading or wrongful trading - HELD THAT:- The land was proposed to be sold for a higher value than the purchase price. It is noted that on May 14, 2019 the KIADB claimed a sum of Rs. 69.93 lakhs towards additional cost of land. The applicant has not placed any material in support of the contention that the property was worth about Rs. 25 crores in 2010 which would show that it was proposed to be sold at a far lesser value. The mandate is very clear that only a creditor, member or a partner of the corporate debtor can make an application to the Adjudicating Authority to declare such transactions as void and reverse their effect. The applicant not being a creditor or partner of the corporate debtor is not competent to raise the issue nor can seek a direction to respondent No. 3 concerning the matter. As per respondent No. 3 a forensic auditor was appointed to look into the transactions of the corporate debtor and certain transactions of the corporate debtor were found to be questionable and the same are pending consideration before this Tribunal - The CoC is aware of the proposed sale of the land for Rs. 2.25 crores in the year 2010. No member of the CoC has questioned the propriety of the consideration. In the absence of any material the allegation of undervaluation cannot be accepted, for the limited purpose of this application. This application is found to be frivolous and without any merits - application dismissed.

  ---

• Service Tax

• 2021 (11) TMI 837
  Refund of service tax - erroneous classification of service tax - services erroneously classified under the category of Renting of Immovable Property Services, whereas the services provided by them actually were Service by Hostel for residential/ lodging purpose - exemption under N/N. 25/2012-ST dated 20.06.2012 - HELD THAT:- In the present case appellant has in the initial stage issued invoices claiming the service tax payable from their client, and have also deposited the same with the exchequer. Now by way of this application they seek the refund of the same. There can be no refund except for in the manner provided by Section 11B, i.e. without Assistant Commissioner recording his satisfaction to effect that the burden of tax paid and claimed as refund has not been further passed on. In the present case in absence of any such satisfaction matter needs to be referred back to the original authority of reconsideration of the refund claims - appeal allowed by way of remand.

  ---

• 2021 (11) TMI 836
  Works Contract Services - Composite Contract - Commissioning or Installation of Plant Machinery and Equipment Service - Repair and Maintenance Service - period involved in the matter is 2004-05 to 2008-09 - HELD THAT:- During the course of adjudication, all the 97 work contracts have not been examined in detail by the Adjudicating Authority and merely on the basis of sample contracts, the demand of service tax was confirmed. It is also a fact on record that for the contracts mentioned at Serial No. 1, 2, 4, 5, 34, 37, 39, 40, 58, 73, 94 to 97 at Annexure D , there is categorical finding of the Adjudicating Authority that these are the turnkey projects. Thus, where there is turnkey projects, the services were rendered along with supply of materials i.e. in the nature of Works Contract service and for that the proper classification is Works Contract service but for the rest of the Contracts no examination in detail with nature of work was done by the adjudicating authority to say whether any supplies are inclusive of the work contract or not? The matter remanded to the Adjudicating Authority to examine each and every contract in detail to ascertain the fact whether services have been provided along with material and it is a composite contract - appeal is disposed of by way of remand.

  ---

• 2021 (11) TMI 835
  Valuation - security agency services - inclusion of reimbursable expenses in the value of the taxable services - HELD THAT:- The issue is squarely covered in favour of the appellant by various decisions referred to by the appellant. Taking note of all the said decisions, the Tribunal in the case of M/S BHARAT COKING COAL LTD. VERSUS COMMR. OF CENTRAL EXCISE S. TAX, DHANBAD [ 2021 (9) TMI 23 - CESTAT KOLKATA] where it was held that Allahabad Bench of the Tribunal in the case of CENTRAL INDUSTRIAL SECURITY FORCE VERSUS COMMISSIONER OF CUSTOMS, C.E. S.T., ALLAHABAD [ 2019 (1) TMI 1661 - CESTAT ALLAHABAD ], has already settled the issue in favour of the appellant to hold that expenses incurred towards medical Services, vehicles, expenditure on Dog Squad, stationery expenses, telephone charges, expenditure incurred by the service recipient for accommodation provided to CISF etc are not includible. Appeal allowed - decided in favor of appellant.

  ---

• 2021 (11) TMI 834
  Non-payment of service tax - Outdoor catering services - period prior to October 2013 - Section 73(1) of the Finance Act, 1994 - Notification No.14/2013-ST dated 22.10.2013 - HELD THAT:- The issue decided in the case of M/S. SAI FOOD SERVICES VERSUS COMMISSIONER OF C.G. ST., NAVI MUMBAI [ 2020 (2) TMI 1394 - CESTAT MUMBAI] where it was held that since the appellant had provided the services of serving food and maintaining the canteen located in the factory, belonging to M/s. Ceat Ltd., the benefit of service tax exemption. There are no merit in the impugned orders demanding tax, interest and imposing penalty - appeal allowed - decided in favor of appellant.

  ---

• 2021 (11) TMI 831
  Recovery of service tax - demand pertaining to the period prior to 18.4.2006 and the period after such date - IPR Services - reverse charge mechanism - HELD THAT:- As a recipient of taxable service, the appellant was not liable to pay service tax under reverse charge mechanism prior to the period 18.4.2016 as per the judgment of Hon ble Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS ASSOCIATION VERSUS UNION OF INDIA [ 2008 (12) TMI 41 - BOMBAY HIGH COURT] , which was subsequently been affirmed by the Hon ble Supreme Court, UNION OF INDIA VERSUS INDIAN NATIONAL SHIPOWNERS ASSOCIATION [ 2009 (12) TMI 850 - SC ORDER] . Considering the factual matrix, the original authority has not only dropped the demand for the period prior to 18.4.2006 but also dropped the proposed demand towards IPR service received by the respondent after such effective date, holding that, such service was not liable for payment of service tax prior to the period 1.7.2012. There are no infirmity in the impugned order passed by the learned adjudicating authority - Revenue dismissed.

  ---

• Central Excise

• 2021 (11) TMI 833
  CENVAT Credit - input services - Works Contract Service used for Repair of their factory premises - inclusion part services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises - HELD THAT:- It is obvious that a exclusive part can only exclude what is otherwise included in the inclusive part, therefore. If anything is covered in the exclusive part it remains excluded irrespective of the fact that the same was specifically included in the main definition or the inclusive part. This is so because the exclusive part comes at the end of the definition and not before the inclusive part. Appeal dismissed.

  ---

• 2021 (11) TMI 832
  CENVAT Credit - input services - GTA services for carrying the waste namely sludge to the dumping yards - HELD THAT:- The appellants have to remove the waste from the factory to the demarcated dumping yards as required by the Pollution Control Board. If they do not comply with this mandatory requirement, their license for manufacture will be cancelled. Therefore, it can be stated that these services availed by the appellant are in relation to the activity of manufacture within the factory. The very same issue is considered by the Tribunal in the case of AMPHENOL INTERCONNECT INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE PUNE [ 2018 (9) TMI 810 - CESTAT MUMBAI] where it was held that the service tax paid for transportation of such waste material should be considered as input service, for the purpose of availment of Cenvat benefit. The credit availed by the appellant is eligible - Appeal allowed - decided in favor of appellant.

  ---

• 2021 (11) TMI 830
  CENVAT Credit - variance in the inventory of the Cenvat inputs maintained by the appellants - value of net shortages in the input inventory - HELD THAT:- The shortages and excesses if any found are theoretical due to huge quantity of inputs handling. It is not a case of the Department that the appellant have ever removed any Cenvat inputs without payment of duty from their factory. Therefore, even though there is any shortage or excess, the input was available within the factory premises or consumed in the production. It can be seen that the same facts and circumstances existing in the present case, even though there is some theoretical variation in the inputs was found and on that ground the CENVAT Credit cannot be denied. The CENVAT Credit cannot be denied to the appellant on a theoretical variance in the inputs - Appeal allowed - decided in favor of appellant.

  ---

• 2021 (11) TMI 829
  CENVAT Credit - common input - Furnace Oil - liability to pay 10% of the value of the exempted goods in terms of Rule 6(3) of CCR - appellant had suo moto reversed the proportionate credit before issuance of show-cause notice - HELD THAT:- There is no dispute to the fact that the appellant suo moto reversed the proportionate CENVAT Credit in respect of furnace oil before issuance of show-cause notice and also paid the interest @ 13%. However, subsequently the appellant also paid the remaining 11% interest in terms of Section 73 of the Finance Act, 2010. We find that even without considering the Finance Act, 2010 for the prior period and even subsequent to the validity of this retrospective amendment provision this issue was considered. In catena of judgments, various Courts and Tribunal has consistently held that if the assessee reversed the proportionate credit even though belatedly and paid the interest for delay in reversal, the demand of 5%/10% in terms of Rule 6(3) will not sustain. Therefore, since the appellant admittedly reversed the proportionate credit in respect of furnace oil used in or in relation to manufacture of exempted goods and also paid the interest @ 24%, the demand of 10% of the value of exempted goods will not sustain. Once the proportionate credit in respect of the inputs used in the manufacture of exempted goods has been reversed and interest thereupon was paid in case of any delay in reversal, the demand of 10% of the value of exempted goods under Rule 6(3) will not sustain - since the appellants have reversed the proportionate credit along with payment of 24% interest, the demand of 10% of value of the exempted goods in terms of Rule 6(3) is not sustainable - Appeal allowed - decided in favor of appellant.

  ---

• CST, VAT & Sales Tax

• 2021 (11) TMI 828
  Rejection of request of the petitioner for rectification of an Assessment Order - Recovery of proportionate Input Tax Credit - Section 84 of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- This is the case where the petitioner had failed to challenge the Assessment Order dated 16.06.2015 in time before the Appellate Commissioner. This is not a case where there is an error apparent on the face of record for the petitioner to invoke the jurisdiction of the Assessing Officer under Section 84 of the TNVAT Act, 2006 - The amount involved is also meagre amount of Rs. 33,063/- on account of the consequences of the Assessment Order under CST for the Assessment Year 2011-2012. Therefore, there is not only no merits in the present writ petition but also no equity in favour of the petitioner. This Writ Petition is dismissed with liberty to the petitioner to file a revision application, if such application can be filed in accordance with law.

  ---

• 2021 (11) TMI 827
  Validity of assessment orders - returns submitted for the Assessment Years 2006-2007 to 2010-2011 for which no assessment orders have been passed shall be deemed to have been assessed on 30.06.2012 - proviso to Section 22(2) of the TNVAT Act - HELD THAT:- The amendment to Section 22(2) of the TNVAT Act, 2006 in the year 2012, if no Assessment Orders were passed for the Assessment Years 2006-2007 to 2010-2011, assessment is deemed to have been completed on 30.06.2012. Since the assessment is deemed to have been completed on 30.06.2012, the avenue to revise the assessment is only under Section 27 of the TNVAT Act, 2006 from the aforesaid date. The arguments advanced by the learned counsel for the petitioner is acceptable in view of the fact that no other proceedings were pending at the instance of the petitioner so as to exclude the time under terms of Section 27(6), 27(7) and 27(8) of TNVAT Act, 2006. The impugned notices are to be declared as time barred and therefore liable to be quashed and are accordingly quashed subject to the rider that the petitioner had filed a complete return for the respective year along with the declaration and document for completing the assessment to invoke Section 27 of the TNVAT Act, 2006 - Petition allowed.

  ---

• Indian Laws

• 2021 (11) TMI 826
  Recovery of loan amount - Kerala Money Lenders Act, 1958. - basic contention of the learned counsel for the petitioners is that the complaint based on which Annexure-F final report filed was without any bona fides and it was intended to interfere with the on-going proceedings under Section 138 of the Negotiable Instruments Act - HELD THAT:- It is well settled position that the delay in lodging the FIR, often results in embellishment and exaggeration. It exposes the danger of introduction of a coloured version, an exaggerated account of incident or a concocted story as a result of deliberations and consultations, and thus casting a very serious doubt on its veracity. In such circumstances, the explanation for such huge delay was insisted upon and in the absence of which, the case can be quashed. It is true that the invocation of power under Section 482 Cr.P.C. is to be sparingly used in rare cases. Therefore, the exercise that should be performed before invoking the said jurisdiction, is to look carefully all the aspects of the case and to verify whether the case at hand is fit for invoking the powers under the said provision - No documents are also seen produced to substantiate, either availing of the loan in the year 2006 or repayment thereof. The aforesaid aspects coupled with long delay occurred in the initiation of the proceedings, which is much after the petitioners have initiated proceedings under Section 138 of the Negotiable Instruments Act, shatters the case advanced by the prosecution. From the aforesaid materials, the irresistible conclusion possible is that, the entire proceedings of submission of the complaint, filing of Annexure-F charge sheet and all further proceedings are clear abuse of process of law. The chances for successful prosecution based on Annexure-F charge sheet is very bleak particularly because of the fact that it lacks any specific material particulars in support of the allegations and the offences alleged. The petitioners are entitled to succeed - Petition allowed.

  ---

• 2021 (11) TMI 825
  Dishonor of Cheque - discharge of legally enforceable debt or not - rebuttal of presumption - HELD THAT:- There is no dispute with the proposition of law that the Court in exercise of its inherent powers will not lightly interfere where the Court may have to analyze the factual aspects of the case in detail and is required to deal with the defense that may or can be taken otherwise by the party in the proceedings. The proceedings in any given case are abuse of process of law or not depends upon the facts and circumstances of each case. In the case in hand, the precise submission made on behalf of the petitioner is that the cheque amounting Rs. 7,40,000/- subject matter of the complaint was though issued to the respondent initially yet on the asking of the respondent in lieu of the said cheque two more cheques of Rs. 3,70,000/- each were issued to the respondent and further the cheque Rs. 7,40,000 though returned by the respondent to the petitioner was again stolen by him after the amounts of two cheques were withdrawn by the respondent - The Court is of the considered view that the transaction as presented by the petitioner in the present has infact happened or meant to take place in that manner cannot be determined or commented upon by this Court in the present proceedings. The exact nature of liability can be brought on record by the complainant during the trial. It cannot be denied that there is a presumption in favour of the holder of the cheque that the cheque is issued in the discharge of some liability. Of course, the presumption can be rebutted by the author of the cheque. The petitioner herein can raise all the pleas which he has taken in the present petition before the trial but cannot agitate the same before this court in the present petition. The petition is dismissed.

  ---