TMI Tax Updates - e-Newsletter
November 30, 2018

Case Laws in this Newsletter:

GST Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax Wealth tax

Articles

• WHETHER THE FOREIGN ARBITRATION AWARD IS TO BE STAMPED FOR ENFORCEMENT IN INDIA
• MSME-an introduction of 12 schemes

News

• Examination for Confirmation of Enrollment of GST Practitioners; Extension of Eligibility Criteria for Registration

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• NITI Aayog to Organise Dialogue on Health System for A New India

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Notifications

GST

• 65/2018 - dated 29-11-2018 - CGST
  Seeks to extend the due date for filing of FORM GSTR - 4 for the quarter July to September, 2018 for taxpayers in Srikakulam district of Andhra Pradesh

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• 64/2018-Central Tax - dated 29-11-2018 - CGST
  Seeks to extend the due date for filing of FORM GSTR - 1 for taxpayers having aggregate turnover up to ₹ 1.5 crores for the quarter from July, 2018 to September, 2018 for taxpayers in Srikakulam district of Andhra Pradesh.

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• 63/2018-Central Tax - dated 29-11-2018 - CGST
  Seeks to extend the due date for filing of FORM GSTR - 1 for taxpayers having aggregate turnover above ₹ 1.5 crores for taxpayers in Srikakulam district in Andhra Pradesh and 11 districts of Tamil Nadu.

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• 62/2018 - dated 29-11-2018 - CGST
  Seeks to extend the last date for filing of FORM GSTR-3B for taxpayers in Srikakulam district of Andhra Pradesh and 11 districts of Tamil Nadu

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GST - States

• 859/2018/16(120)/XXVII(8)/CT-51 - dated 27-9-2018 - Uttarakhand SGST
  Governor is pleased to allow to appoint the 1st day of October, 2018, as the date on which the provisions of section 52 of the Uttarakhand Goods and Services Tax Act, 2017 shall come into force.

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• 858/2018/16(120)/XXVII(8)/CT-51 - dated 27-9-2018 - Uttarakhand SGST
  Set up by an Act of Parliament or a State Legislature

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• 853/2018/10(120)/XXVII(8)/2018/CT-41 - dated 27-9-2018 - Uttarakhand SGST
  Waives the late fee payable on FORM GSTR-3B, FORM GSTR-4, FORM GSTR-6

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• 4566/CSTUK/GST-Vidhi Section/ 2018-19/CT-46 - dated 13-9-2018 - Uttarakhand SGST
  Amendment in Notification Nos. 3795/CSTUK/GST-Vidhi Section/2017-18, dated the 06th November, 2017 and 6237/CSTUK/GST-Vidhi Section/2017-18, dated the 23th March, 2018

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• 4563/CSTUK/GST-Vidhi Section/ 2018-19/CT-45 - dated 13-9-2018 - Uttarakhand SGST
  Amendment in Notification Nos. 2319/CSTUK/GST-Vidhi Section/2017-18, dated the 08th August, 2017 and 3905/CSTUK/GST-Vidhi Section/2017-18, dated the 15th November, 2017

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• 759/2018/5/(120)/XXVII(8)/2018 CT-33 - dated 10-9-2018 - Uttarakhand SGST
  Extension of due date for filing of FORM GSTR - 1 for taxpayers having aggregate turnover up to ₹ 1.5 crores

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• 783/2018/11/(120)/XXVII(8)/2018 CT-31 - dated 6-9-2018 - Uttarakhand SGST
  Prescription of Certain Procedure for Obtaining GSTIN by Certain Tax Payers

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• 782/2018/11/(120)/XXVII(8)/2018 CTR-22 - dated 6-9-2018 - Uttarakhand SGST
  Amendment in Notification No. 522/2017/9(120)/XXVII(8)/2017, dated 29th June, 2017

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Income Tax

• 84/2018 - dated 26-11-2018 - IT
  U/s 35(1) (ii) of IT Act 1961 Central Government approved for organization M/s. Thalassemia and Sickle Cell Society

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• 83/2018 - dated 26-11-2018 - IT
  U/s 35(1) (ii) of IT Act 1961 Central Government approved for organization M/s Centre for Brain Research, Bangalore

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SEZ

• S.O. 5840 (E) - dated 13-11-2018 - SEZ
  Central Government hereby de-notifies an area of 371.887 hectares, thereby making resultant area as 572.258 hectares, at Villages- Akolia, Bardari, Kali-Billod, Jamodi and Kehda, District-Indore, in the State of Madhya Pradesh

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• G.S.R. 1139(E) - dated 9-11-2018 - SEZ
  Special Economic Zones (2nd Amendment) Rules, 2018

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Circulars / Instructions / Orders

Income Tax

• Instruction No. 6/2018 - dated 22-11-2018
  Templates of Rulings received from other jurisdictions under BEPS Action 5 - reg.

GST - States

• 5027/CSTUK/GST-Vidhi Section/2018-19/ON-04 - dated 4-10-2018
  Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117(1A) of the Uttarakhand Goods and Service Tax Rules, 2017 in certain cases

Highlights / Catch Notes

GST

• Rate of GST - work contract services involving the supply of goods and services to CSPDCL, a government authority - The nature of activities of CSPDCL being principally and predominantly, being commercial in nature, as per their (CSPDCLs) Memorandum of Association itself - rate of GST is 18%.
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• Detention of goods - dispute with regard to rate of tax and classification of the goods - the process of detention of the goods cannot be resorted to when the dispute is bona fide, especially, concerning the exigibility of tax and, more particularly, the rate of that tax.
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• Detention of goods with vehicle - the seizure of the goods on the ground that accompanying e-way bill had expired is not justified rather it was allowed to expire after the detention of the goods by incorrectly recording the time of interception - order of seizure quashed.
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Income Tax

• Penalty levied u/s.271(1)(c) - excess expenses disallowed and suppression of receipts - being bonafide mistake in accounting the total contract receipts, no penalty.
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• Penalty made u/s 271D - loan transaction between husband and wife - while levying the penalty u/s. 271D AO did not appreciate the fact that the provisions of section 269SS are not applicable on the loan transaction between husband and wife.
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• Addition on account of bogus purchases - Even though the books of account have not been rejected, since the AO has clearly established that the purchases were bogus, there is no justification for accepting the contentions of the AR that only part of the purchase should be disallowed
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• Additions u/s 68 - Merely by providing the Income Tax Return and PAN number is not enough to establish the creditworthiness and genuineness of the unsecured loans.
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• Exemption u/S. 10(23C)(iiiab) - Had it been the intention of the legislature to grant exemption only to the institutions individually or independently and not to the society as a whole, the language would have been different. The society or trust may run more than one institutions.
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Customs

• Classification of Marine Gas Oil (MGO) - HSD is nothing but MGO which is generally termed as diesel in India - Both are used as fuel in the land-use vehicles and marine-use vessels - Demand of customs duty / additional duty confirmed.
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• Refund claim - rejection on the ground that the appellants cannot claim the refund directly without challenging the assessment order - original authority directed to consider the refund of the appellant without insisting on the requirement for reassessment u/s 149
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• Refund claim - assessment order not challenged - Once an assessee choses not to file an appeal, then, he cannot challenge the same, in a collateral proceedings - the Tribunal has applied the Doctrine of Merger, which is not applicable to the facts of this case.
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• Valuation - customs duty on the quantity of remnant ATF on arrival at Chennai Airport - There cannot be any addition of freight / insurance or landing charges to the cost of ATF for arriving at the assessable value of the remnant ATF.
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• Appearance before the authorities - summons - to balance the competing interests of the investigating agency and the witness summoned, Sibin cannot seek exemption from appearance when the authority, for reasons that weighed with him, has felt that the witness's physical presence is essential for the progress of the investigation.
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SEZ

• Special Economic Zones (2nd Amendment) Rules, 2018 - Sub-Contracting - Rule 41 amended.
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Service Tax

• Penalty - Delayed payment of service tax - The conduct of the appellant in paying up service tax and interest, and the categoric finding of the Commissioner that there is no intention to evade tax, persuades us to hold that appellant has established reasonable cause for invoking Section 80 of the Act ibid.
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• 100% EOU - refund of accumulated CENVAT Credit - the benefit of refund in terms of Rule 5 cannot be denied on mere non-reflection of the credit particulars in the ST-3 Returns for such relevant period.
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• Penalty u/s 77, 78 and under Rule 7(C) - delayed payment of service tax - appellant approached their customer and requested them to pay service tax but their client did not pay the service tax on the ground that they were exempt being a charitable institution - No penalty.
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• Classification of services - Real Estate Agent Services or not - The MoU has not been executed fully and therefore the actual remuneration to the appellant have not got finalized and therefore issuing the show cause notice in such a stage was premature and unwarranted.
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• Liability of service tax - stock broker - transaction charges, SEBI turn over fees etc. paid to the NSE/BSE and collecting reimbursement of the same from their clients - demand of service tax is devoid of merit.
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• GTA Services - The RMC is then poured into a hopper and subsequently pumped with the help of pumps - the activity of pumping the RMC does not fall under the said category of services.
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• SEZ unit - refund of service taxes paid - The certificate of approval of services by the UAC makes it further clear that the list of specified services which are rendered in relation to the authorized operation has granted this specific certificate and therefore, the approval cannot be questioned by the Revenue
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• Business Auxiliary Service - respondents as distributors were receiving 1% volume discount on the total turnover - liability of service tax does not arise.
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• Nature of activity of "chit fund business" - cash management / fund management - the petitioner is not liable to pay service tax before 14.05.2015 - petition allowed.
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Central Excise

• Reversal of Cenvat Credit - removal of inputs as such - Revenue felt that since the assessee did not use the inputs in or in relation to the manufacture of finished goods and accordingly, the services used in procuring the inputs would not qualify for availing cenvat credit - demand is not sustainable.
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• Excisability - Waste - Bagasse - press mud - it is a natural by-product which does not involve any effort nor is it the primary intention of a sugar manufacturer to intend to manufacture press mud - The assessee is not liable to pay any duty even after 01.03.2015.
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• Extended period of limitation - customers who supplied plain glass was believed in good faith to be a service and accordingly, service tax was paid under Business Auxiliary Services - no suppression of facts - demand confirmed only for the normal period of limitation.
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• CENVAT Credit - input services - health services - since to obtain licence and run such hazardous manufacturing unit, emergency health care facility by way of OHC is a basic requirement and the same has a relation to the manufacturing process. - credit allowed.
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• Closure of their factory due to disconnection of power supply - demand of central excise duty - power connection of the appellant unit was never restored during the period - Demand of duty set side.
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• Interest on delayed Refund - relevant date - the amount of duty which was set aside by the Tribunal become refundable from 3 months of Tribunal order dated 12.06.2002. Accordingly, on such amount interest is payable from 3 months of date of Tribunal order.
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• Destruction of goods - remission of duty - “Manikchand” brand Gutkha/ Pan Masala, which the appellant was not in a position to sale in the market due to order of the District Judge, Mandaleshwar Court, on the issue of brand name - Adjudicating Authority rejected the application for remission on various counts which are absolutely irrelevant.
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VAT

• Forfeiture of tax paid u/s 46A of KGST Act - Sale of SIM Cards - The claim for refund, if any, would subsist only in the consumer and it is the State who is competent to make such refund as per the procedure prescribed - There can be no refund to the assessee.
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• There are no reason to sustain the distinction sought to be drawn between M-Sand and manufactured sand. M-Sand as it is generally understood is manufactured sand produced from quarried metals.
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• Claim of exemption - proof of new investments -It would remain open to the revenue to examine whether the unregistered dealer/seller claimed by such assessee was genuine and not a mere pretence or false claim made to evade any further inquiry.
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Case Laws:

• GST

• 2018 (11) TMI 1505
  Rate of GST - work contract services involving the supply of goods and services to CSPDCL - CSPDCL is a Government authority /Government entity or not - work predominantly for use other than for commerce, industry or any other business of profession or not - whether taxable at 18% or 12%? - Held that:- Close scrutiny of the balance sheet of CSPDCL reveals that 100% equity of CSPDCL as held by CSPDHL (Chhattisgarh State Power Distribution Holding Company Limited) and 100% of equity of CSPDHL is being held by Government of Chhattisgarh as is evident from the balance sheet of CSPDHL as on 31st March, 2016 - there is no ambiguity as regards CSPDCL, being a Government entity in view of the definition of 'Government Authority' as stipulated under N/N. 31 /2017-Central Tax (Rate), dated 13-10-2017. Nature of activities being under taken by the applicant - whether the same can be treated as the work predominantly for use other than for commerce, industry or any other business of profession or not? - Held that:- For availing the benefit of exemption Notification No. 24/2017State Tax (Rate), dated 23-9-2017, the pre-condition is that the services being provided by the Applicant to CSPDCL by way of construction erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of a civil structure or any other original works must predominantly be for use other than for commerce, industry, or any other business or profession. This effectively means that for availing the aforesaid benefit of reduced tax rate, it is of paramount importance that the services under taken/work done by the Applicant for CSPDCL must necessarily for use which is non-commercial in nature. Whether the constitution of CSPDCL has been incorporated for commercial aim or otherwise? - Held that:- It is seen that CSPDCL is a company incorporated under the Companies Act 1956, earlier known as Mahanadi Power Development Company Limited (Company Registration No. 1015822, dated 19-5-2003) and is a company limited by share. Further it is also in public domain that the main Objects of CSPDCL - on going through the main/ancillary objectives as enumerated in Memorandum of Association of CSPDCL, there hardly remains any doubt regarding the principal/primary and foremost aim of CSPDCL being predominantly commercial in nature The nature of activities of CSPDCL being principally and predominantly, being commercial in nature, as per their (CSPDCLs) Memorandum of Association itself, we come to the considered conclusion that the works contract services provided by the applicant M/s. A2Z Infra Engineering Ltd., Raipur to CSPDCL is liable for CGST and SGST @ 9% each. Ruling:- In the light of Notification No. 11/2017-State Tax (Rate), dated 28-6-2017 read with amendment Notification No. 24/2017-State Tax (Rate), dated 23-9-2017 and as the nature of works contract services provided by the Applicant. M/s. A2Z Infra Engineering Ltd., Raipur to Chhattisgarh State Power Distribution Company Ltd. (CSPDCL) being predominantly for commercial use by CSPDCL, the said services provided by the Applicant to CSPDCL, attracts CGST and SGST each @ 9% respectively.

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• 2018 (11) TMI 1504
  Detention of goods with vehicle - seizure order was passed solely on the ground that the e-way bill accompanying the goods had expired - Clause (a) and (b) of Sub-section (1) of Section 129 of the Act - Held that:- In view of the the fact that the petitioners alleged that the vehicle with the goods had entered Kanpur at 8.00 p.m. on 10.11.2018 much before the period mentioned in the e-way bill had expired which fact remains unanswered in the instructions, the seizure of the goods on the ground that accompanying e-way bill had expired is not justified rather it was allowed to expire after the detention of the goods by incorrectly recording the time of interception - the order of seizure dated 11.11.2018 issued under Section 129(1) of the Act to the writ petition is quashed - petition allowed.

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• 2018 (11) TMI 1503
  Jurisdiction - scope of adjudication proceedings - detention of goods - Ground Betel Nuts (Arecanuts) - dispute with regard to rate of tax and classification of the goods - case of petitioner is that dispute about the rate of tax is not a matter for adjudication in a proceeding under Section 68 or 129 of the GST Act. Held that:- The classification or the alleged misbranding of the product-even the alleged tax variation, not evasion though-cannot be considered here - the writ’s province is restricted. It is, indeed, for the assessing authorities to adjudicate on the issue. The case falls within the adjudicatory ambit of both J.K. Synthetics Limited and RAMS VERSUS SALES TAX OFFICER - in J.K. Synthetics Limited [1994 (5) TMI 233 - SUPREME COURT], where it was finally held that if the assessee pays the tax, which according to him is due based on the information supplied in his return, there would be no default on his part to meet his statutory obligation. Therefore, it would be difficult to hold that the 'tax payable' by him 'is not paid' and that he is liable for consequences. In the case of Rams [1993 (3) TMI 324 - KERALA HIGH COURT], it was held that the inspecting authority may entertain a suspicion that there is an attempt to evade tax. But if the records he seizes truly reflect the transaction and the assessee's explanation accords with his past conduct, for example, the returns he has filed earlier, the detention is not the answer. In the words of Rams, at best the inspecting authority can alert the assessing authority to initiate the proceedings “for assessment of any alleged sale, at which the petitioner will have all his opportunities to put forward his pleas on law and on fact.” Indeed, emphatic is the enunciation of law in Rams that the process of detention of the goods cannot be resorted to when the dispute is bona fide, especially, concerning the exigibility of tax and, more particularly, the rate of that tax. Thus, it can be concluded that the Ext.P11 is arbitrary and unsustainable, and is accordingly set aside - the Assistant State Tax Officer will release the goods forthwith - petition allowed.

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• 2018 (11) TMI 1502
  Release of seized vehicle - appealable order - imposing tax liability and interest upon the petitioner in the proceedings under Section 129 (3) of the Rajasthan/Central Goods and Service Tax Act, 2017 - Section 107 of the Rajasthan/Central Goods and Service Tax Act, 2017. Held that:- There is merit in the argument of the learned counsel for the appellant that since the goods confiscated are cumin seed (Zeera) and fennel seed (Saunf) which are perishable in nature as also the vehicle, they need to be released forthwith. The respondent No.3 is directed to release the same on furnishing a bank guarantee equivalent to the amount payable under Clause (1)(a) or (b) of Section 129 of the Central Goods and Services Tax Act, 2017 - decided in favor of petitioner.

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• 2018 (11) TMI 1501
  Maintainability of petition - appealable order - imposing tax liability and interest upon the petitioner in the proceedings under Section 129 (3) of the Rajasthan/Central Goods and Service Tax Act, 2017 - Section 107 of the Rajasthan/Central Goods and Service Tax Act, 2017. Held that:- The order impugned is appealable under Section 107 of the Act of 2017 - this Court is not inclined to entertain the present writ petition. It will be, however, open for the petitioner to avail remedy of appeal under the Act of 2017 - petition dismissed.

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• Income Tax

• 2018 (11) TMI 1500
  Claim of deduction u/s 10B - whether mere processing of the iron ore in a plant and machinery located outside the bonded area will not disentitle the assessee from deduction where the iron ore was excavated from the mining area belonging to an export oriented unit - location of the ‘SESA Plant’ outside the EOU and customs bonded area - Held that:- No reason to interfere in the matter. The special leave petition is, accordingly, dismissed. Pending application(s), if any, shall stand disposed of.

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• 2018 (11) TMI 1499
  Reopening of the assessment u/s 147 - as per AO income chargeable to tax had escaped the assessment - the assessee had already tabulated necessary details as were required by the Assessing Officer at the time of original assessment - there was no failure on the part of the assessee to disclose fully and truly any material facts which were necessary for assessment - Held that:- No reason to interfere in the matter. The special leave petition is, accordingly, dismissed.

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• 2018 (11) TMI 1498
  Claim for exemption under section 10(23C)(vi) - Assessee’s activities including charging a franchisee fee could not be regarded as a charitable activity within the meaning of section 2(15) - Held that:- Special Leave Petition is dismissed. Pending application(s) if any, stands disposed of accordingly.

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• 2018 (11) TMI 1497
  Interest receipt not constitute “business income” for the purpose of computation of deduction u/s 80IB - whether the corresponding interest expenditure incurred wholly and exclusively for generating such interest income should have been allowed u/s 57(iii) ? - Whether section 80HHC and 80IB are independent of each other? - Held that:- No reason to interfere in the matter. The special leave petition is dismissed, leaving questions of law open.

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• 2018 (11) TMI 1496
  Exemption u/S. 10(23C)(iiiab) - whether the exemption under Section 10(23C)(iiiab) is specific to the assessee trust or whether such exemption can be examined by further bifurcating the position of different institutions which are run by the assessee trust? - Held that:- Section 10(23C)(iiiab) grants exemption in relation to any income received by any person on behalf of any university or other educational institution existing solely for educational purposes and not for the purpose of profit, and which is wholly or substantially financed by the Government. This provision, thus, exempts the income received by a person on behalf of the institutions specifying the requirements of the said clause. The exemption is not relatable to the individual institution run under the common umbrella of a Trust. Therefore, if the assessee trust satisfies the statutory requirement noted above, the exemption provision would apply, irrespective of the fact that in isolated cases of a few institutions runs by such Trust, the requirement may not be seen to have been fulfilled. From the above, it is very clear that it is the trust or the society that has to apply for registration and claim exemption. Had it been the intention of the legislature to grant exemption only to the institutions individually or independently and not to the society as a whole, the language would have been different. The society or trust may run more than one institutions. Therefore, the argument of the Revenue that it should be institution specific and not the society as a whole in our opinion is not correct. No question of law arises

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• 2018 (11) TMI 1495
  Addition of unsecured loan as undisclosed income - assessee had failed to explain and establish the creditworthiness of the parties from whom the loans had been taken - Held that:- Assessee has only emphasized that Income Tax Return, PAN and other details have been filed by the assessee before the AO and therefore the credit worthiness of the parties has been established. AR has not provided the details of returned income of the parties and the explanation for deposit of cash by one person immediately before cheques were issued to the appellant. Establishing the credit worthiness and genuine would imply that the parties would be having sufficient surplus savings and funds backed by capital assets to provide loan to the assessee. Merely by providing the Income Tax Return and PAN number is not enough to establish the creditworthiness and genuineness of the unsecured loans. Accordingly, this addition made by the AO was rightly upheld by the CIT(A), which does not need any interference on my part, hence, uphold the order of the CIT(A) on the issue in dispute and dismiss the issue in dispute raised by the assessee. The findings of fact recorded by the Assessing Officer, CIT(A) and the Tribunal were not shown to be perverse based on non-appreciation of material on record or based on misreading of any evidence on record. Thus, question (b) cannot be held to be a substantial question of law. Addition on account of bogus purchases - Held that:- Purchases have been used for suppressing the profits of the business. Even though the books of account have not been rejected, since the AO has clearly established that the purchases were bogus, there is no justification for accepting the contentions of the AR that only part of the purchase should be disallowed. In view of the above observations this addition made by the AO was rightly upheld by the Ld. CIT(A), which does not need any interference. No substantial question of law.

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• 2018 (11) TMI 1494
  Deduction u/s 10A - order of Remand passed by the Tribunal - Tribunal not dealing with the relief granted by the CIT(Appeals) under Section 10A under the amendment provision to that Section - Held that:- Tribunal opined that the issue must go back to the file of the CITA for reconsideration to adjudicate the issue, on merits. The Tribunal came to such a conclusion, since, the CIT(A) has summarily dismissed the relief sought for by the assessee under Section 80HHC, though it granted relief to the assessee under Section 10A of the Act. Thus, the Tribunal was of the opinion that the matter requires to be re-examined. The assessee need not have any apprehension in this regard, as the order passed by the Tribunal is very clear, since this appeal is filed by the assessee and not by the Revenue. Therefore, in the assessee's appeal they cannot be worse of than they were before CITA. Therefore, in the facts and circumstances, it would suffice to clarify that the Remand to the CIT(A) is only to adjudicate the submission of the assessee with regard to their entitlement for the relief under Section 80HHC alone. The other portions of the order passed by the CIT(A) which were decided in favour of the assessee shall remain intact. With the above observations, the appeal stands disposed of confirming the order of Remand passed by the Tribunal and making the scope of remand clear as indicated in the preceding paragraph.

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• 2018 (11) TMI 1493
  Computation of income of the block period - undisclosed expenditure or investment - Held that:- In the present case, admittedly, the owner of the premises, in respect of which the “pakadi” is said to have been paid was not examined. Based on the sworn statement of one another person, who deposed u/s 132(4) that an amount of money was given to the earlier tenant, proceedings were taken against the assessee; which was not corroborated by any other evidence. There was also no enquiry carried out to find whether such amounts were in fact received by the assessee or the assessee had any undisclosed expenditure or investment on the basis of such amounts received. In such circumstances, we are of the opinion that the order of the Tribunal cannot be interfered with and we refuse to answer the question raised, which is merely on facts and not on law. The statement was confronted to the assessee, but he denied the same. The AO failed to get any corroborating evidence in the search conducted in the premises of the assessee and hence we have confirmed the order of the Tribunal affirming that of the CIT (Appeals), which set aside the order of the AO. There is no warrant for a remand. The appeal would stand rejected.

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• 2018 (11) TMI 1492
  Addition made on account of unexplained credit and unexplained expenditure - Held that:- We find that A.O. had made additions merely on the statement of Shri Praveen Kumar and Shri Uttam Singh Hinger, whereas, they have already retracted from the statement by way of specific affidavits filed by them. On the other hand, no other evidence was produced by the appellant herein to show that cash was paid by the Company to Shri Praveen Kumar Jain or any other person for accommodating the entries. In these circumstances, we find that the assessee succeeded in proving its identity and bonafide of the shares and the transactions. Thus, it being a pure question of fact, we find no reason to interfere in the impugned order.

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• 2018 (11) TMI 1491
  Addition u/s 68 - Bogus long term capital gain on sale of shares - assessee was not granted opportunity to cross examine to persons on whose basis addition is made - denial of natural justice - Held that:- AO without providing any material evidence, report on which he was relying and not granting an opportunity to cross examine the persons on whose statement he arrived at certain presuppositions, made addition in the hands of assessee. Before Ld. CIT (A) assessee once again raised plea of crossexamination granted to assessee and materials not based upon which the submissions have been made has not been provided for examination. Even then opportunity was not granted to assessee, though Ld. CIT (A) had coterminous powers as that of Ld. AO. This amounts to gross violation of principles of natural Justice. - Decided against revenue

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• 2018 (11) TMI 1490
  Addition u/s 68 - Unsecured cash credit - Held that:- Amount was transferred by the assessee through banking channel only. The account ledger of the Axis Bank of M/s Paramount Trading Co. was also filed by the assessee before the CIT(A) to explain that the amount was transferred out of the explained sources of the assessee. There is no incidence of pre-cash deposit before transfer, neither any such incidence was discussed by the CIT(A). The provisions of section 68 are applicable in case where the credit was received by the assessee. However, in the present case, the position is entirely different, as the amount of ₹ 58 lacs was not received by the assessee rather the amount was paid by the assessee to his wife out of his explained sources. Hence, the addition in dispute made in the hands of the assessee should not be taxed and therefore, the same is hereby deleted and accordingly, the appeal of the assessee stands allowed. Penalty made u/s 271D - loan transaction between husband and wife - Held that:- Assessee received advance money of ₹ 22 lacs from the four parties for the property no. 3498, Gali Sangrasha, Bara Hindu Rao, Delhi – 6. Due to some reasons, the deal was not materialized and the purchaser parties agreed to take another property which is in the name of assessee’s wife. The said amount was transferred to his wife’s account i.e., Mrs. Shahina Qureshi. Further note that there is no denial on the part of the AO that the amount of ₹ 22 lacs was received by the assessee from his wife, Mrs. Shahina Qureshi. However, while levying the penalty u/s. 271D AO did not appreciate the fact that the provisions of section 269SS are not applicable on the loan transaction between husband and wife. Thus, the question of levying of penalty u/s. 271D does not arise on the impugned transaction, hence, delete the penalty in dispute and allow the appeal of the assessee. - Decided in favour of assessee.

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• 2018 (11) TMI 1489
  Disallowance of exemption claimed u/s.10(38) - Long Term Capital Gain on sale of listed equity shares - Held that:- Nowhere the evidences filed by the assessee has been rebutted or any inquiry whatsoever has been conducted by the Assessing Officer or by the CIT(A) to prove that assessee was involved in any clandestine manner for routing its own unaccounted money. If the assessee has filed the entire evidences relating to purchase which is mostly through cheque shown in the earlier years and also filed all the details of sale transactions and the shares which have been routed through Demat account and sold through stock exchange on a quoted price on that date, then onus shifts upon the Department to prove that all these evidences are only make believe documents and certain minimal inquiry is required to rebut all these evidences. As stated above, nowhere it has been found that assessee was in any manner found to be 10 beneficiary of any accommodation entry under any inquiry or investigation. Once all these transactions are duly proved by trading from stock exchange, then to hold the sale of shares as unexplained credit or as unexplained money cannot be upheld. Accordingly, we hold that the money credited in the account of the assessee is from the sale of shares and accordingly benefit of Long Term Capital Gain on sale of such listed equity shares have to be given - Appeal of the assessee is allowed.

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• 2018 (11) TMI 1488
  Penalty levied u/s.271(1)(c) - excess expenses disallowed and suppression of receipts - bonafide mistake in accounting the total contract receipts - Held that:- There is only meager amount of ₹ 5,74,774/- due to non reconciliation of TDS certificate with the PLA. This shows that the intention of the assessee was not to conceal anything but the mistake crept due to unintentional and erroneous consideration of contract receipts. In the written submissions the assessee has placed reliance on the decision of ITAT Rajkot in the case of Ravjibhai Premjibhai Motisariya[2014 (3) TMI 1136 - ITAT RAJKOT] wherein such clerical mistake in the accounting has been held to be bonafide for which penalty u/s.271(1)(c) is not leviable. In the case in hand, we find that there appeared to be bonafide mistake in accounting the total contract receipts, therefore, this appears to be a bonafide mistake - Decided in favour of assessee.

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• 2018 (11) TMI 1487
  Addition merely on the strength of statement of third party - denial of natural justice - non providing opportunity to cross examine - Held that:- Respectfully following the order of the Tribunal, SMC Bench, Delhi in the case of Smt. Jyoti Gutpa vs. ITO [2018 (11) TMI 1353 - ITAT NEW DELHI] and in view of the law settled in the case of Andaman Timber vs. CIT (2015 (10) TMI 442 - SUPREME COURT), on identical facts and circumstances, the addition in dispute is deleted and the appeal of the assessee is allowed.

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• 2018 (11) TMI 1486
  Chargeability of profit on sale of land - business income or capital gain - Held that:- Merely because the assessee has entered into few transactions of purchase and sale of plot of land in past, during the year it cannot be said that assessee has sold the property is a trader. It was stated by the learned authorised representative that the assessee acquired the land out of its own fund, the agricultural income was also shown on that agricultural plot of land, disclosed as investment in books of accounts and not stock in trade, and therefore all these factors go to show that the assessee is an investor. These facts have not been denied by DR - when assessee held land for more than three years without borrowing funds and classified the same in its books of accounts , it cannot be said that assessee is not an investor. It is immaterial that the history of the assessee shows the various transactions of the purchase and sale of land, it may be the issue in that particular year. Accordingly direct the AO to treat the profit shown by the assessee of Laxmipur patti Land of ₹ 5.32 lakhs as long-term capital gain and Jaitpur Ghoshi land profit of ₹ 5.60 lakhs as short-term capital gain. Addition made as income from other sources instead of agricultural income - Held that:- The assessee did not show that how agricultural income has been earned by the assessee without putting any effort when learned assessing officer has shown that there is no relation between the period during the which the expenditure is debited in the ledger and the crop season. The receipts by Samiti are not the proof of agricultural activities but it may be the proof of selling of the agricultural produce. The assessee did not produce the bills for purchase of seeds and fertilizer. The assessee has also not given the copies of Kishan Bahi, Khasra Khatauani, and bills and vouchers for agricultural operation. The learned assessing officer has also shown that one of the agricultural produce shown by the assessee is labourintensive and no labour expenditure is shown. In view of this, we do not find any infirmity in the orders of the lower authorities in treating the income of ₹ 44135 as income from other sources. - Decided against assessee. Addition on account of alleged low household withdrawals - Held that:- The assessee has shown the household expenditure at a very low figure compared to the living standard shown by the learned assessing officer. The assessee also could not produce that how he is managing in such a low expenditure for household. No infirmity in the order of the learned commissioner appeals in deleting the addition of ₹ 70,000 and retaining the addition of ₹ 1 09650/– on account of low household withdrawal. Looking into the family size, the status of the assessee and the detailed analysis of the various nature of expenditure likely to be incurred by the learned assessing officer has shown , and in absence of any plausible explanation by the assessee, we do not find any infirmity in the order of the learned assessing officer. He has minutely calculated the expenditure on clothing, festival, and social obligation, religious expenses, entertainment expenses and medical and electricity expenses. The addition confirmed by the CIT-A is appropriate - Appeal filed by the assessee is partly allowed.

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• 2018 (11) TMI 1485
  TDS u/s 194A - payment towards interest to Non-Banking Financial Corporation (NBFC) without deducting TDS - Held that:- The assessee company has made payment towards interest to Non-Banking Financial Corporation (NBFC) without deducting TDS thereon and the loans were raised in the name of the assessee’s company itself which was utilized for business purpose only. In dispute that the companies are well-known finance companies engaged in the business of financing and as such are financial institutions. It is the case of the assessee that interest was paid to well-known finance companies who are NBFCs except two companies. No doubt, the assessee has not filed detail of any such material if the recipient of interest in question accounted for the interest received in their account and paid due liabilities of the income-tax, but taking the contentions raised by assessee on its face value as all the companies except two are well-known NBFC, the issue in question is remanded back to the AO to verify the contentions raised by the assessee and in case, he is satisfied that the concerned NBFCs have included this income in computation of their income offered to tax, then it would be deemed to comply with the provisions contained u/s 40(a)(ia). In case NBFCs are found to have shown the interest received in their books of account and paid due liabilities of the income-tax for computation of income then no disallowance can be made u/s 40(a)(ia). Appeal filled by assessee is allowed for statistical purposes.

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• 2018 (11) TMI 1484
  Expenditure incurred during construction/trial period - Revenue or capital expenditure - expenses before the commencement of the business are added to the cost of assets and allowed to be capitalised - matching concept - Held that:- It is an undisputed fact that assessee has shown income of ₹ 3,16,68,000/- pertaining to income from sale of power during trial run period has been adjusted from the expenditure incurred during construction/trial period from 17.7.2010 to 28.7.2010 amounting to ₹ 4,90,42,000/- pending capitalisation. AO on one hand has added the income and on the other hand treated the corresponding expenditure as capital. We are unable to appreciate the action of the AO in adding the receipts of ₹ 3,16,68,000/- as income, because if the expenses before the commencement of the business are added to the cost of assets and allowed to be capitalised then how the corresponding income from the commercial production is treated as revenue. It is also capital in nature which has to be reduced accordingly. This principle has been reiterated by the Supreme Court in the case of CIT vs. Bokaro Steel Limited [1998 (12) TMI 4 - SUPREME COURT] wherein held that if the assessee receives any amount which are inextricably linked with the process of setting up its plant and machinery, then such receipts will go to reduce the cost of its assets and would be receipts of a capital nature and cannot be taxed. We are of the view that, if income of ₹ 3.16 crore earned during the trial period is treated as income then corresponding expenses of ₹ 4.90 crore incurred during the trial period should also be allowed as revenue expenditure by applying the matching concept, which as discussed above will result in net loss of ₹ 1.74 crores. Thus, the addition made by the AO is unsustainable in law and on facts and hence, we do not find any infirmity in the order of the Ld. CIT (A) in deleting the addition and the same is affirmed - Decided against revenue

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• 2018 (11) TMI 1483
  TDS u/s 194C - payment made to Transporters without deducting TDS - Held that:- As relying on Soma Rani Ghosh vs. DCIT [2016 (10) TMI 55 - ITAT KOLKATA] we uphold the plea of the assessee and delete the impugned disallowance as it is not even in dispute that when we read section 194C(6) independently, and not in conjunction with section 194C(7), there is no default in tax withholding obligations leading to disallowance under section 40(a)(ia). The disallowance thus stands deleted - Decided in favour of assessee.

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• Customs

• 2018 (11) TMI 1482
  Application for early hearing of appeals - Mega Power Project - Exemption under Notification no. 21/2002 - Project Import - Held that:- List the appeals in the month of February, 2019 before the appropriate Bench - application disposed off.

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• 2018 (11) TMI 1481
  Powers to either quash the summons issued under Section 108 of Customs Act, 1962 or to stay further action pursuant to summons - Held that:- There is no reason to interfere with the interim order passed by the High Court - SLP dismissed.

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• 2018 (11) TMI 1480
  Smuggling - Evasion of Customs Duty - offences under sections 132 and 135(1)(a) of the Customs Act - import of certain household items - Held that:- The petitioner, while working as the authorized representative of the co-accused Ms. Rosy Chawla, had smuggled certain goods having a total value of ₹ 8,30,000/- (approx.) into the country by omitting to declare/mis-declaring the same before the Customs Authorities. While the smuggled items in question belonged to Ms. Rosy Chawla, the only role admittedly attributable to the petitioner is that on the instructions of the said Ms. Rosy Chawla, he helped clear the customs formalities in respect thereof in India. The petitioner mis-declared the smuggled goods and stated on the relevant form that they were brought to India only on account of Ms. Rosy Chawla’s transfer of residence. However, during investigation, the said goods were discovered to be brand new purchases. It is, thus, apparent that the culpability of the petitioner is on the same if not lower footing as that of the co-accused Ms. Rosy Chawla. While affirming the order of conviction, subject to the petitioner depositing an additional fine of ₹ 25,000/-, the sentence awarded to him is reduced to the period already undergone and accordingly, his remaining sentence is waived - passport to be released.

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• 2018 (11) TMI 1479
  Appearance before the authorities - summons under Section 108 of the Customs Act issued - case of petitioner is that he could not get permission; if at all he left the UAE without his employer's permission, he would lose his job. Therefore, he wanted to be examined through a questionnaire sent to him or through video-conference - Department insisted on his appearance. Held that:- An officer of the Customs will have the power to summon any person whose attendance he considers necessary either to give evidence or to produce a document. And under sub-section (3), all persons who are summoned shall be bound to attend either in person or by an authorised agent. In fact, Sri Augustian lays stress on this alternative and insists that the witness's physical appearance before the authority is not mandatory. The officer can insist on the witness's presence. When an investigation into a crime is in progress, the officer concerned must have complete freedom to proceed with the investigation unhindered-of course within the legal bounds. This Court will not supplant its view on how an investigation should be carried out - also, a person's liberty, safety, and dignity-not to be subjected to degrading or inhuman treatment, including infliction of physical injury-is sacrosanct. Therefore, to balance the competing interests of the investigating agency and the witness summoned, Sibin cannot seek exemption from appearance when the authority, for reasons that weighed with him, has felt that the witness's physical presence is essential for the progress of the investigation. At the same time, the Department must ensure that the witness, in the name of the inquiry, has not been subjected to any physical violence -say, torture. The writ petition disposed off holding that Sibin will appear before the authorities as summoned. But once Sibin appears, the Investigating Officer will examine Sibin strictly under the law - decided against petitioner.

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• 2018 (11) TMI 1478
  Refund claim - assessment order not challenged - can the refund application go behind an assessment, which has attained finality? - Whether the revenue could pursue the R.C.P. after participating in the proceedings consequent to the remand order, dated 24/4/2003, passed by the CESTAT? - applicability of Doctrine of merger. Held that:- The Hon'ble Supreme Court, in COLLECTOR OF CENTRAL EXCISE, KANPUR Vs. FLOCK (INDIA) PVT. LTD [2000 (8) TMI 88 - SUPREME COURT OF INDIA], has held that when an order which is appealable, under the Central Excise Act, is not challenged, then, the order is not liable to be questioned and the matter is not to be reopened in a proceeding, for refund. Once an assessee choses not to file an appeal, then, he cannot challenge the same, in a collateral proceedings. In this view, order, dated 4/7/2013, dismissing the Referred Case Petition No.2 of 2012, needs to be reviewed. While setting aside the orders of the assessment authority and the appellate authority, the Tribunal has applied the Doctrine of Merger, which is not applicable to the facts of this case. Tribunal has not stated precisely, as to how, the Doctrine of Merger, is applicable in this case. The Tribunal has not stated, as to which order has merged into which order and as to why the appeal before it was allowed by applying the Doctrine of Merger - The Doctrine of Merger would not apply, even if the order dated 31/3/2004, passed by the Commissioner (Appeals), in order in Appeal No.269 of 2004 was not challenged. Reliance of the respondent on the judgment of the Hon'ble Supreme Court in STATE OF PUNJAB OTHERS Vs. KRISHAN NIWAS [1997 (3) TMI 622 - SUPREME COURT] is of no assistance and are distinguishable. Appeal allowed.

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• 2018 (11) TMI 1477
  Refund claim - rejection on the ground that the appellants cannot claim the refund directly without challenging the assessment order - Held that:- The issue is squarely covered by the decision of the Division Bench of this Tribunal in M/S. BHARAT ELECTRONICS LIMITED VERSUS COMMISSIONER OF CUSTOMS [2016 (11) TMI 852 - CESTAT BANGALORE], wherein this Tribunal has allowed the appeal of the assessee by way of remand by holding that there is no requirement for re-assessment under Section 149. The appeals of the appellant are allowed by way of remand to the original authority with a direction to consider the refund of the appellant without insisting on the requirement for reassessment under Section 149 - The assessee’s claim for refund may be validated under Section 27 and paid to them - appeal allowed by way of remand.

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• 2018 (11) TMI 1476
  Valuation - customs duty on the quantity of remnant ATF on arrival at Chennai Airport - addition / includibility of freight, insurance and landing charges in assessable value - Held that:- The issue is squarely covered by the decision in the case of Interglobe Aviation Ltd. Vs CC New Delhi [2017 (9) TMI 926 - CESTAT NEW DELHI], where it was held that such remnant fuel, though construed to be an imported item for the purpose of customs duty, no freight element is attributable and cannot be added to form part of the assessable value. There cannot be any addition of freight / insurance or landing charges to the cost of ATF for arriving at the assessable value of the remnant ATF. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1475
  Demand of Additional Duty of Customs - Section 116 of the Finance Act, 1999 - classification of MGO - Held that:- Admittedly, both HSD and MGO are used only as fuel for compression engine either in automatic vehicles or marine vessels and in terms of technical specification for diesel fuel, there is not much variation between either of them. Further, in the HSN under Chapter Heading 2710 petroleum oils and oils obtained from bituminous minerals are classified into 7 categories and further, under Indian Customs Tariff which follows HSN classification, MGO classified in the HSN are sub-divided into three categories viz., 2710 19 20 Aviation Turbine Fuel, 2710 1930 High Speed Diesel and 2710 19 40 Light Diesel Oil (LDO). This clearly and categorically establishes the fact that HSD is nothing but MGO which is generally termed as diesel in India. The assessee has nowhere disputed the classification of the fuel in dispute under Tariff Heading 2710 19 30. Appeal allowed - decided in favor of Revenue.

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• 2018 (11) TMI 1436
  This Court cannot exercise powers as prayed for so as to either quash the summons issued under Section 108 of Customs Act, 1962 or to stay further action pursuant to summons.

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• Service Tax

• 2018 (11) TMI 1474
  Nature of activity of "chit fund business" - cash management / fund management - whether classifiable under the category of "banking and other financial services" - Held that:- The issue stands squarely covered by the decision in the case of UNION OF INDIA AND ORS. VERSUS M/S. MARGADARSHI CHIT FUNDS (P) LTD. ETC [2017 (7) TMI 224 - SUPREME COURT OF INDIA], where it was held that the petitioner is not liable to pay service tax before 14.05.2015 - petition allowed.

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• 2018 (11) TMI 1473
  Liability of service tax - charges of National Stock Exchange (NSE)/ Bombay Stock Exchange (BSE) such as transaction charges, SEBI turn over fees etc. paid to the NSE/BSE and collecting reimbursement of the same from their clients - appellant is a stock broker. Held that:- On this issue much water has flown as in various judgments, this Tribunal has consistently held that all these charges being statutory charges as per SEBI Rules, should not be liable for service tax - The Tribunal in the case of INDSES SECURITIES AND FINANCE LTD, SPAN CAPLEASE PVT LTD AND OTHERS VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [2018 (2) TMI 569 - CESTAT AHMEDABAD], where it was held that the allegation of the department that the demat charges collected by the brokers are banking and financial service, hence taxable, also devoid of merit in as much such charges are collected by the Appellant, and paid to the depository participants viz. CDSL/NSDL who are authorised to levy such charges under the Depositories Act, 1996. Demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1472
  Classification of services - Real Estate Agent Services or not - It appeared to Revenue that the appellant was liable to pay the service tax under the classification Real Estate Agent Service under section 65(88) of the Finance Act which defines a real estate agent as a person who is engaged in rendering any service in relation to sale, purchase, leasing and renting, of real estate and includes a real estate consultant - time limitation. Held that:- There is no consideration defined and/or provided for the alleged service. In absence of any defined consideration for the alleged service, there is no contract of service at all, and hence the transaction is not liable to service tax. Under the facts and circumstances, it is found that the appellant entered into an agreement of trading in land, wherein they agreed to transfer, a measurement or area of land, in a particular area in favour of the Sahara India. The appellant was also obligated to examine the title of the prospective land owner and to further ensure the availability of land owner at the office of the Registrar for execution of the sale deed. In fact Sahara India instead of paying the price directly to the land owner, paid lump sum amount to the appellant. Thereafter the appellant identified the land, the seller, and after being satisfied with the title of the seller, entered into agreement with the seller and obtained power of attorney, in their favour. Thereafter the appellant transferred the land in favour of Sahara India. Thus the transaction is one of trading in land. In such transactions the appellant could either incur a loss or have a surplus (profit). It is very clear from the provision of the MoU that the amount payable to the appellant is not quantified and it is more of the nature of a margin and share in the profit of the deal in purchase of land. For levy of service tax, a specific amount has to be agreed between the service recipient and the service provider. As no fixed amount has been agreed in the MoU which have been signed between the parties, the amount of the remuneration for service, if any is not clear in this case - since the specific remuneration has not been fixed in the deal for acquisition of the land, both the parties have worked more as a partner in the deal rather than as an agent and the principle, therefore the taxable value itself has not acquired finality in this case. The MoU has not been executed fully and therefore the actual remuneration to the appellant have not got finalized and therefore issuing the show cause notice in such a stage was premature and unwarranted. Extended period of limitation - Held that:- The issue relates to interpretation, and there is no malafide on the part of the appellant. The transaction is duly recorded in the books of accounts maintained by the appellant. Further there is no suppression of information from the revenue - extended period not applicable. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1471
  Penalty u/s 77, 78 and under Rule 7(C) - delayed payment of service tax - appellant approached their customer and requested them to pay service tax but their client did not pay the service tax on the ground that they were exempt being a charitable institution - Held that:- The appellant was constructing student hostel and staff quarters for the Trust only and they had a bona fide belief that they are not liable to pay service tax as they were doing construction work only for the Trust which had exemption vide Notification No.25/2012-ST dated 20.6.2012 - further, when the letters were received from the Department thereafter appellant paid the entire service tax along with interest from her own pocket in spite of the fact that the client of the appellant refused to pay the service tax to her. The imposition of penalty of 15% under Section 78 is not applicable in the present case, because in the present case, the entire service tax along with interest was paid two years before the issue of show-cause notice whereas reduced penalty under Section 78 is applicable if payment is made within 30 days from the date of show-cause notice. Penalties do not sustain - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1470
  GTA Services - pumping charges/unloading charges charged and collected from their customers - Liability of Service tax - Held that:- The issue involved is no more res integra as the same has been considered and laid to rest by this very Bench of the CESTAT in the case of Commissioner of Service Tax, Chennai Vs. RMC Readymix (I) Pvt. Ltd. [2017 (8) TMI 1308 - CESTAT, CHENNAI], where it was held that the activity of pumping the RMC does not fall under the said category of services. Appeal dismissed - decided against Revenue.

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• 2018 (11) TMI 1469
  Valuation - inclusion of amount reimbursed from the manufacturers for the services done during warranty period in assessable value - period from April, 2004 to March, 2009 and April, 2009 to March, 2010 - Held that:- The issue involved in this case is no more res integra as the same has already been considered and laid to rest by the decision of CESTAT, Chennai in the case of M/s. Shiva Automobiles Pvt. Ltd. Vs. Commissioner of Central Excise, Coimbatore [2018 (5) TMI 677 - CESTAT CHENNAI], where it was held that the cost of spare parts cannot be included for purposes of levy of service tax - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1468
  Business Auxiliary Service - respondents as distributors were receiving 1% volume discount on the total turnover - liability of service tax - Held that:- The important takeaway from the discussions on the differing nature of assessable value, one for the purpose of levy of Central Excise duty and the other for levy of service tax, is that they are two different and distinct entities. This indeed has to be so, since the purpose of levy of central excise duty is to levy tax on production or manufacture of excisable goods in India whereas service tax is a levy on service, which by its very intrinsic nature cannot then be an activity amounting to “manufacture” and subject to Central Excise levy. A value or consideration undisputedly forming part of assessable value for purposes of levy of central excise duty cannot then be also considered as part of the value of taxable service for levy of service tax. This is in keeping with the fundamental principle that the same activity cannot be considered as manufacture and subjected to excise levy and at the same time considered to be a service and subjected to service tax. In fact, the process amounting to “manufacture” is kept specifically out of the scope of Section 65 (19) of Finance Act, 1994 which prescribes service tax liability on processing of goods not amounting to manufacture. It has been consistently laid down by the Tribunal, in a plethora of decisions, that consideration which is subject to payment of excise duty is not liable for payment of service tax liability. No suppression of facts - Held that:- There does not appear to be any dispute or allegation that the respondents were not filing the prescribed statutory returns with the department - in the process of auditing, all the transactions were duly and properly audited by the Department; that such neither any attempt was made to conceal the facts nor to hide any information and the respondent had acted diligently in accordance with the provisions of law - there is no suppression of any information or facts. The Commissioner has correctly applied the law after appreciating the facts of the case - appeal dismissed.

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• 2018 (11) TMI 1467
  Erection, Commissioning and Installation Service - Non-payment of Service tax - works contract service - non-payment on the ground that the services performed for road, bridges etc. is excluded from the service tax purview under section 65(105)(zzzza) of the Finance Act, 1994 - period involved in the present case is July 2007 to September 2011 - Held that:- The contract entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. [2018 (9) TMI 1149 - CESTAT CHENNAI] had occasion to analyze the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only - The demand of service tax under ECIS cannot sustain after the period 1.6.2007. CENVAT Credit - rent-a-cab prior to 1.4.2011 - Held that:- The denial of CENVAT credit on rent-a-cab service being prior to 1.4.2011 is unjustified and the assessees are eligible to avail CENVAT credit on the same. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1466
  Commercial or industrial construction service - non-payment of service tax - case of appellant is that they fall under the category of works contract service involving execution of composite contracts and not liable to pay service tax - Held that:- The contract entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. [2018 (9) TMI 1149 - CESTAT CHENNAI] had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only. The demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007 - The levy of service tax prior to 1.6.2007 cannot also sustain by application of the decision of the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1465
  Commercial Construction services - eligibility for abatement of 67% of the taxable value - Department was of the view that cum-tax benefit has to be calculated first and then abatement should be taken on such value - present case is from April 2007 to March 2009 - Held that:- The contracts entered between the appellant and the service recipient is a composite contract which involves both supply of materials as well as rendering of service. The Tribunal in the case of Real Value Promoters Ltd. [2018 (9) TMI 1149 - CESTAT CHENNAI] had occasion to analyse the issue regarding demand of service tax under construction of residential complex services, commercial or industrial construction service and construction of complex service. The Tribunal has held that prior to 1.6.2007, levy of service tax can be under the above categories only for contracts which are purely for services. That after 1.6.2007, the above categories would be applicable only if the contracts are purely services and which are not composite contracts. Further, it was held that after 1.6.2007, demand in respect of composite contracts would fall under works contract service only. The demand of service tax under commercial or industrial construction service (residential complex) cannot sustain after the period 1.6.2007 - The levy of service tax prior to 1.6.2007 cannot also sustain by application of the decision of the Hon’ble Supreme Court in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT]. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1464
  Penalties u/s 76 and 78 of FA - Short payment of service tax - service tax paid belatedly for the period from April 2006 to June 2008 - Held that:- On perusal of the documents such as the list of sundry debtors etc., it is seen that there was huge amount pending as receivables. So also they had to meet expenses for salary, accident compensation of employees provided under manpower supply service - The department does not have a case that any of the transactions were unaccounted or that they had been indulging in a parallel accounting. It is commonly understood that the employees supplied through manpower supply service have to be given the salaries within due time. If the service receivers delay the payment, it would cause much hardship to the service provider as they have to make the statutory payments such EPF, ESI etc. to the Government - the appellant has put forward reasonable cause for not paying the service tax within due time and is a fit case for invoking Section 80 of the Finance Act for setting aside the penalties. The impugned order is modified to the extent of setting aside the penalties imposed under sections 76 as well as 78 in these appeals - appeal allowed in part.

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• 2018 (11) TMI 1463
  SEZ unit - refund of service taxes paid - services which were used in the authorized operations of the SEZ units - rejection of refund claim on the ground that the operations such as sales, marketing, HRD, etc., were not included in the authorized operations - N/N. 09/2009 - N/N. 15/2009. Held that:- Apparently, the services that are provided by the appellant in the case on hand find place in the list of specified services approved by the UAC. Therefore, the position is that the appellant having manufactured footwear, etc., is certainly not for self-consumption and therefore, the same are required to be sold/marketed and thus the reasons given by the adjudicating authority are illogical. The Approval Committee has issued the LoA and the same is issued by the Development Commissioner, Government of India, Ministry of Commerce and Industry, Department of Commerce after examining the nexus and therefore, the Revenue cannot sit over the judgement of the certificate - The certificate of approval of services by the UAC makes it further clear that the list of specified services which are rendered in relation to the authorized operation has granted this specific certificate and therefore, the approval cannot be questioned by the Revenue since the jurisdictional Commissioner of Central Excise is also a member of the Approval Committee. The Mumbai Bench of the Tribunal in the case of Tata Consultancy Services Ltd. [2012 (8) TMI 500 - CESTAT, MUMBAI] has held that Once the Approval Committee has given the nexus and the justification, rejection by the lower authorities of the refund claims of the service tax paid on various services on this ground is bad in law. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1462
  Principles of natural justice - case of appellant is that they had not filed a proper reply to the SCN - demand of service tax on various services - Held that:- In the interest of justice, the appellant should be given an opportunity to furnish their reply to the show cause notice - appeal allowed by way of remand.

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• 2018 (11) TMI 1461
  100% EOU - refund of accumulated CENVAT Credit - rejection on the ground that the credit particulars in respect of the input services were reflected in the ST-3 Returns for the period March 2012, which is after the date of export - Held that:- In the Cenvat regime, there is no specific requirement regarding maintenance of statutory records in the prescribed registers, which were hitherto provided under erstwhile Central Excise Rules, 1944 and the MODVAT statute. Since the appellant contended that the disputed credit was availed during the period April to June 2011 for export of service effected during such quarter, the benefit of refund in terms of Rule 5 cannot be denied on mere non-reflection of the credit particulars in the ST-3 Returns for such relevant period. The appellant had not produced any records to show that the credit particulars were really reflected in the Books of Accounts and were relatable to the services exported by the appellant during the period April to June 2011 - the matter should be remanded to the original authority for verification of the accounting records maintained by the appellant, to satisfy himself that the credit was availed during the relevant period and services were utilized for providing the exported output service during such period. Appeal allowed by way of remand.

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• 2018 (11) TMI 1460
  CENVAT Credit - input services - general insurance - repair and maintenance of motor vehicles and those utilized for staff welfare - Held that:- The Order-in-Original confirms the demand without given any specific finding on the admissibility/inadmissibility of individual services covered by the impugned show-cause notice by observing that the assessee had admitted the liability and paid the same along with interest. The assessee had indeed paid liability and informed the Joint/Additional Commissioner on 17.11.2015 about the payment made, however, on 29.2.2015 in its reply to the showcause notice contested all the issues before original adjudicating authority. In these circumstances, the observation of the original adjudicating authority to the effect that the appellants are not contesting the demand is incorrect. The matter is remanded to the original adjudicating authority to give findings with respect to admissibility of credit in each separate head and passing a speaking order after following the principles of natural justice - appeal allowed by way of remand.

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• 2018 (11) TMI 1459
  Laying of pipelines for transportation of petroleum products for various petroleum companies - benefit of N/N. 15/2004-ST dt. 10.09.2004 and N/N. 01/2006-ST dt. 01.03.2006 - It was also alleged that appellants had taken credit of duty on capital goods and other inputs and input services during the year 2006-07 - Scope of SCN. Held that:- The issue whether in cases of abatement has been settled in their favour in the case of Bharat Heavy Electricals Ltd. [2012 (4) TMI 197 - CESTAT, MUMBAI], wherein it has been held that the impugned Notification does not stipulate a condition where non-availment of CENVAT Credit is to be satisfied uniformly in all cases. Scope of SCN - Held that:- The Show Cause Notice dated 06.04.2009 has been issued on the proposition that the assessee cannot avail the simultaneous benefit of Credit of duty paid on inputs and capital goods under the CENVAT Credit Rules, 2004 as also the exemption under Notification No. 15/2004-ST dated 10.09.2004 and Notification No. 01/2006-ST dated 01.03.2006. This is specifically indicated in para 3.3 of the Show Cause Notice. However, the discussions leading to the conclusions in the impugned Order take a totally different route - The adjudicating authority proceeds on this tangent and holds that the appellant have not proved with any documentary evidence that they have not availed or taken the CENVAT Credit on the inputs/capital goods/input service in such cases for which they availed abatement - the impugned Order has travelled beyond the scope of the Show Cause Notice. Demand of tax liability related to Credit taken in respect of 'Commercial or Industrial Construction Service‛ - Held that:- This Bench of CESTAT in the case of M/s/ Real Value Promoters Pvt. Ltd. & Ors. Vs. Commissioner of G.S.T. & Central Excise, Chennai & Ors. [2018 (9) TMI 1149 - CESTAT CHENNAI], even for the period post 01.06.2007, the demand relating to indivisible Works Contract will necessarily have to be made only under the category of Works Contract Service, which is not the case here. Appeal allowed in toto.

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• 2018 (11) TMI 1458
  Penalty - Delayed payment of service tax - Management, Maintenance or Repair Service - It is the case of the assessee that they had to pay salary to their staff, PF, ESI and other statutory dues to their staff which created a huge cash flow problem and hence the service tax payment was delayed - Held that:- An identical issue has been considered by CESTAT, Chennai in the case of M/s. Dusters Total Solutions Services Pvt. Ltd. Vs. CST, Chennai [2018 (9) TMI 825 - CESTAT CHENNAI], where it was held that the appellant has paid up the service tax belatedly before issuance of SCN. The interest which is in the nature of compensation for the delay in payment, was also paid after issuance of SCN and much before issuing the Order-in-Original. The conduct of the appellant in paying up service tax and interest, and the categoric finding of the Commissioner that there is no intention to evade tax, persuades us to hold that appellant has established reasonable cause for invoking Section 80 of the Act ibid. The penalty imposed is not proper and therefore by using discretion under Section 80 of the Finance Act, the same is set aside - demand with ineterst upheld - appeal allowed in part.

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• Central Excise

• 2018 (11) TMI 1457
  Non-speaking order - Validity of remand of the case - Held that:- Admittedly, the legal issues on which the case would be decided on merits, even after remit, would be the same as has been decided by the Coordinate Bench of this Court in the matter of Vandana Global [2018 (5) TMI 305 - CHHATTISGARH, HIGH COURT] - Therefore, there is no point in remitting the matter back to the Tribunal for decision afresh as the case would involve the same structural steel items which were subject matter of decision making by the Division Bench in the matter of Vandana Global - appeal dismissed.

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• 2018 (11) TMI 1456
  Destruction of goods - remission of duty - Manikchand brand Gutkha/ Pan Masala, which the appellant was not in a position to sale in the market due to order of the District Judge, Mandaleshwar Court, on the issue of brand name - Held that:- It was beyond the control of the appellant to market the said goods. The Adjudicating Authority rejected the application on various counts which are absolutely irrelevant. As regards the reference made to a case of infringement of Intellectual Property Right, the Commissioner has no jurisdiction at all for drawing inference and holding that the appellant had malafide intention. The ld. Commissioner on his own viewed that the goods packed in Manikchand brand should have been repacked in RMD brand and sold. This is also beyond the jurisdiction of the ld. Commissioner for the reason that whether the goods can be repacked and sold it is completely on the assessee to decide after analyzing the practicability, feasibility and viability. There is no dispute that the goods for which remission was claimed, were packed in the brand name of Manikchand and due to injunction order passed by the District Judge, Mandaleshwar, the said goods, in such a condition, was not capable of being sold by the appellant. Therefore, this is a clear case that the goods were unfit for marketing and squarely cover under the provisions of Rule 21 of Central Excise Rules, 2002. Matter remanded to the Adjudicating Authority for reconsideration of appellant s remission application - appeal allowed by way of remand.

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• 2018 (11) TMI 1455
  Interest on delayed Refund - relevant date - From which date the appellant is entitled for interest on the sanctioned refund? - Held that:- The refund application filed by the applicant was admittedly filed on 14.07.1999 only, thereafter, the cause of action for refund arises. Since an amount i.e. 60 Lacs minus adjudged due as per order in original dated 21.04.1999 become refundable and the same should have been sanctioned within 3 months from date of filing of application i.e. 14.07.1999. Accordingly, on such balance amount the interest is payable from 3 months of date of filing the refund i.e. 14.07.1999. As regard remaining amount of refund that has arisen only from the date of Tribunal order dated 12.06.2002 by which the demand confirmed by the original order was set aside, that means the amount of duty which was set aside by the Tribunal become refundable from 3 months of Tribunal order dated 12.06.2002. Accordingly, on such amount interest is payable from 3 months of date of Tribunal order. In the present case, the period for interest has to be reckoned not only with reference to filing of refund application but also as per the provision of explanation (B)(ec) of section 11B, therefore, interest is payable in accordance with said provision. Appeal allowed in part.

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• 2018 (11) TMI 1454
  Clandestine removal - Cosmetics - relied upon documents - whole case of Revenue is based on the kacchi parchi/loose slips, recovered from ZMPL - Held that:- In view of the said Khacchi parchi/ loose slips not made RUD, the whole case of clandestine removal falls for want of sufficient evidence. There is no enquiry made with respect to the manufacturing capacity and the alleged clandestine removal - further there is no enquiry made with respect to receipt of sufficient packing material although the supplier of packing materials – Talman Containers was located at the same plot where JI is situated. Revenue has failed to take notice of records of production maintained mandatorily under the provisions of Drugs and Cosmetics Act, 1940. Further there is no evidence of transport of such goods alleged to be clandestinely removed, nor the evidence of receipt of inputs/raw materials for manufacture of such alleged finished goods cleared clandestinely - ZMPL being a trading concern have not committed any illegality in dispatching goods on the basis of the delivery challan. We further find that the estimation of turnover by Revenue on the basis of MRP is erroneous. For the purpose of SSI the actual transaction value of the clearances is relevant. It is only for the purpose of calculation of duty, that MRP is taken as base and abatement allowed as notified - the mistake of fact committed by the Ld. Commissioner in the impugned order by treating the recovery of Kacchi parchi from possession of Mr Ankit Valecha, whereas it is evident from the show cause notice and the punchnama that the said Kacchi parchi were recovered from Mr Sunil Valecha, Director of ZMPL. The impugned order is unsustainable for the lack of sufficient evidence and mistake of fact - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1453
  Closure of their factory due to disconnection of power supply - demand of central excise duty - Held that:- It is an undisputed fact that power connection of the appellant unit was never restored during the period 01.09.97 to 31.03.98, after the disconnection on 30.09.97 - the Ld. Commissioner have erred in upholding the duty liability for the period 01.10.97 to 31.03.98. No interest and penalty was imposable. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1452
  CENVAT Credit - input services - health services - manpower supply services availed to maintain Occupational Health Centre (OHC) at the factory engaged in hazardous manufacturing process - Held that:- Admittedly, health services are put under exclusion clause in 2012 amendment to CENVAT Credit Rules, 2004. Therefore, such health services if provided by a manufacture or service provider to its employees generally is no more to be treated as admissible credit but when there is statutory requirement to have provisions for first aid facility and primary treatment for employees in case of accident and injuries sustain by them and the said service is made available to other employees additionally without any extra expenditure, it cannot be excluded from the preview of availment of credit since to obtain licence and run such hazardous manufacturing unit, emergency health care facility by way of OHC is a basic requirement and the same has a relation to the manufacturing process. Denial of CENVAT credit on the ground that they fail to keep records of emergency treatment would not deprive the appellant to avail such credit, since it is made to meet a contingency/emergency situation and without any such hazardous accident also, the manpower engaged are entitled to get their remunerations. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1451
  Valuation - related party transaction - Section 4 (1) (b) of Central Excise Act, 1944 read with Rule 9 of Central Excise Valuation (Determination of the Price of Excisable Goods) Rules, 2000 - Shri HJ Rathi is the Managing Director of M/s.RDCPL and the Manager of a Trust, which is partner in M/s.JTC - Over-riding commission paid by the appellants to M/s.JTC - time limitation. Held that:- M/s. JTC belongs to a Trust i.e., Smt.Chandravatibai Laddha Trust, in which Shri H.J. Rathi is said to be the Manager. The Trustees are partners in M/s. JTC. Shri HJ Rathi is the Managing Director of M/s. RDCPL. Further for the very reason that Shri HJ Rathi is the Managing Director of M/s.RDCPL and the Manager of a Trust, which is partner in M/s.JTC cannot be the sole reason for holding that the appellants and M/s. JTC are related. It can be seen that the appellants are a private limited company whereas M/s.JTC is a partnership firm. They cannot be held to be related - No element of mutuality of interest and flow back of money from M/s.JTC to the appellants is either alleged or evidenced. M/s.JTC are not also held to be interconnected undertaking. Therefore, the situation enumerated in Section 4 (3) (b) of the Central Excise Act, 1944 are not fulfilled. The only fact that M/s. JTC has a temporary office in the premises of the appellants. Some staff members of M/s. JTC are sitting there, by itself cannot be become a valid ground to hold them to be related. Over-riding commission paid by the appellants to M/s. JTC - Held that:- It cannot be by any stretch of imagination leveled to be a flow back of money. Only in case where the appellants have received certain money from their customers influence of such consideration on the price at which the goods are sold can be a thought of. Time Limitation - Held that:- The appellants have been regularly filing the required declaration under Rule 173C (iii) (a) giving the details of the marketing pattern and interalia mentioning the fact that M/s.JTC have premises at the appellants. Therefore, no suppression of fact can be alleged - The period covered in the show-cause notice is from October 1999 to March 2003 and show-cause notice has been issued on 20/05/2005. Abinitio also the period further to May 2000 is clearly barred by limitation and further extended the show-cause notice is vitiated - extended period cannot be invoked. The demand confirmed against the appellant, M/s. RDCPL do not survive either on merits or on limitation - interest, penalty, etc. confirmed against the main appellant, i.e., M/s. RDCPL also do not sustain. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1450
  Extended period of limitation - customers who supplied plain glass was believed in good faith to be a service and accordingly, service tax was paid under Business Auxiliary Services - no suppression of facts - demand of Interest and penalty. Held that:- Undisputedly, the appellant was discharging service tax liability on the job work undertaken on behalf of the customers who supplied plain glass, by treating the same as service. The Revenue was happily accepting the same without raising objections at any point - It is the settled position of law that the extended period of limitation is available to the Revenue only when an assessee acts with a mala fide intention and there is a positive suppression or mis-statement by the assessee with an intention to evade payment of duty. Mere extracting the requirements of Section of the statute would not ipso facto amounts to suppression or mis-statement or fraud, to invoke the extended period of limitation. The invocation of extended period of limitation cannot be sustained and consequently, there can be no demand as well as interest for the period other than the normal period from the date of issuance of the Show Cause Notice - duty demand restricted to normal period. Interest - Penalty - Held that:- The issue being an interpretational one, the penalty is deleted - interest however is sustained, only for the normal period, if any. Appeal allowed in part.

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• 2018 (11) TMI 1449
  Excisability - Waste - Bagasse - press mud - Held that:- There is no duty liability on non-excisable goods cleared for a consideration, prior to 01.03.2015 and for this reason, the adjudicating authority has felt it proper and dropped the SOD up to 28.02.2015. Whether press mud, a waste, is a non-excisable commodity or not; and whether it is hit by the Explanations inserted with effect from 01.03.2015? - Held that:- Explanation 1 applies to exempted goods or final products including non-excisable goods cleared for a consideration. Rule 2(d) of the CENVAT Credit Rules (CCR), 2004 defines “exempted goods” to mean excisable goods which are exempt from the whole of the duty, to also include goods which are chargeable to nil rate of duty and the goods used impliedly suggest a final product - press mud cannot be compared with other by-products like bio-compose or even bagasse for that matter. Moreover, from a bare reading of Explanations 1 and 2 - press mud does not fit into the definition of “exempted goods”, as defined under Rule 2(d) of CCR because it is not an excisable good; nor can it be termed as a final product because it is not manufactured or produced from input or using input service. This is because it is a natural by-product which does not involve any effort nor is it the primary intention of a sugar manufacturer to intend to manufacture press mud. The assessee is not liable to pay any duty and therefore, the demand is set aside - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1448
  CENVAT Credit - job work undertaken in terms of Rule 4(5)(a) of the CCR, 2004 - case of appellant is that the duty on the goods manufactured on job work basis is an exception in terms of Rule 4(6) ibid - extended period of limitation. Held that:- The remand Order of the Commissioner (Appeals) requires no interference. The impugned Order is also sustained on the issue of larger period for the reasons given by the lower authorities and also since the communication is indirect, by the principal manufacturer and not by the assessee. There is a possibility of the adjudicating authority being influenced by the findings of the Commissioner (Appeals) which appears to be contrary to the pleadings inasmuch, the plea of the appellant is that its case is covered by the exception as per Rule 4(6) - the finding of the Commissioner (Appeals) on this requires setting aside and the adjudicating authority shall pass a fresh Order on these pleadings of the appellant as well - appeal allowed in part.

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• 2018 (11) TMI 1447
  CENVAT Credit - input services - Supply of Security Personnel deputed along with the goods to various customer sites - Supply of Manpower for Gardening and Housekeeping - denial on account of nexus - Held that:- The issue relating to supply of Manpower for Housekeeping and Landscaping were held to be eligible input services by the jurisdictional High Court in the case of Wipro Ltd. vs. Commissioner of C. Ex., Pondicherry [2017 (5) TMI 188 - MADRAS HIGH COURT] - credit allowed. Supply of Security Personnel deputed along with goods to the customer’s sites - Held that:- The same was very much essential since the value of the equipment/goods was very high and the supply depended on timely delivery - When the Manpower is used for Gardening and Housekeeping, Security Personnel/Watchmen engaged in overall security of their business premises could be held to be eligible, the same logic should equally apply to the same personnel being engaged for the services related to the appellant’s business and in assisting safe delivery - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1446
  CENVAT Credit - input services - Landscaping Services - Catering Services - period April, 2011 to January, 2014 - Held that:- The Hon’ble jurisdictional High Court in the case of Wipro Ltd. [2017 (5) TMI 188 - MADRAS HIGH COURT] after considering the rival contentions as well as decisions of other fora, has held Housekeeping/Landscaping Services to be eligible input services - credit allowed. Canteen services - Held that:- The issue stands settled in the case of M/s Reliance Industries Ltd. [2016 (8) TMI 123 - CESTAT MUMBAI], wherein the Mumbai Bench of this Tribunal, after considering the decisions of various fora, has inter alia held Outdoor Catering Service to be eligible for credit for the period after 01.04.2011 - credit allowed. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1445
  CENVAT Credit - input services - Vehicle Insurance - Vehicle Maintenance - Clearing and Forwarding (C&F) Service - Rent-a-cab Service - Port Service - period April, 2007 to March, 2011 - Held that:- This Bench of the Tribunal in the appellant’s own case M/S. DIAMOND ENGINEERING (CHENNAI) PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV [2017 (7) TMI 710 - CESTAT CHENNAI], has held that Insurance of vehicles and their maintenance has to be treated as input services in terms of Rule 2(l) of Cenvat Credit Rules, 2004, in as much as, they are related to the manufacturing activities of the assessee. Division Bench of CESTAT, Chennai in the case of M/s. Madras Cements Ltd. [2018 (5) TMI 411 - CESTAT CHENNAI] while considering the situation prior to 01.04.2011 has discussed the definition of “input services” and has held The credit allowed in respect of construction of residential complex and services relating to vehicle maintenance and repair service and vehicle insurance are eligible for credit - the C&F Service and Port Service are essentially the services provided in relation to the manufacture of final products and therefore, the appellant is entitled to avail the CENVAT Credit on the same. Appeal allowed - decided in favor of appellant.

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• 2018 (11) TMI 1444
  Restrain from appropriation of the refund sanctioned to the appellant - Held that:- The Order of this Bench implies that as on date, there is no Order or duty demand against the assessee and consequently, there can be no recovery proceedings - the Department Appeal shall be treated as infructuous since the matter is yet to be adjudicated - appeal dismissed as infructuous.

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• 2018 (11) TMI 1443
  Irregular availment of CENVAT Credit - input materials were removed as such by the appellant under the cover of invoices, on payment of an amount equal to the credit taken in terms of Rule 3 (5) of the Cenvat Credit Rules, 2004 - It is the case of the Revenue that since the assessee did not use the inputs in or in relation to the manufacture of finished goods and accordingly, the services used in procuring the inputs would not qualify for availing cenvat credit. Held that:- The issue is no more res-integra in view of the various decisions of the Hon’ble High Courts and the Tribunal. This Bench of the Tribunal in the case of Seven Star Steels Ltd. Vs. Commr. Of Central Excise, Customs & S. Tax, BBSR II [2013 (5) TMI 119 - CESTAT KOLKATA] by relying upon the decision of the Tribunal in the case of Chitrakoot Steel & Power Pvt. Ltd. Vs. Commissioner [2007 (11) TMI 135 - CESTAT, CHENNAI] had allowed the appeal filed by the assessee. CBEC vide Instruction F.No.96/85/2015/CX.I dated 07.12.2015 has observed, on the reversal of cenvat credit in respect of services paid on the input services that Rule 3(5) of the CENVAT Credit Rules, 2004 does not provide for reversal in respect of input services for a reason. Input services are consumed once the inputs and capital goods are received in the factory. Thus on receipt of inputs and capital goods, the associated input services have to be considered as consumed within the factory and become a cost to the business. Demand for reversal o the input services credit, when such input services cannot be reused, unlike inputs and capital goods which are available for reuse would not be fair to the trade. Appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (11) TMI 1442
  Stay of collection of penalty - AP VAT Act - Held that:- There is no merit in the present appeal - The Special Leave Petition is dismissed.

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• 2018 (11) TMI 1441
  Exemption u/s 4-A of the U.P. Trade Tax Act, 1948 - negligibility of machines as regards total investments made - no inquiry was conducted by the Tribunal before passing the final order - principles of natural justice - Held that:- It being a case of eligibility to exemption, a liberal approach is not warranted at this stage. The burden was strictly on the assessee to establish its entitlement to exemption. Only if the assessee was found to fall within the four corners of the scheme of exemption, a liberal approach may become available for the remaining purpose. In view of the specific finding recorded by this Court to the effect that the investment of ₹ 41,000/- was not negligible in the context of total investment of ₹ 2,51,000/-, the Tribunal has not erred in recording the finding to that effect. Once the Tribunal was rejecting the entire claim made by the assessee, with respect to both the disputed machineries, it was never open to the Tribunal to record a finding contrary to that recorded by this Court - Mere mention of the same in the operative part of the order would not vest any authority with the Tribunal to examine that issue de novo. That issue may have become open if upon remand, the Tribunal may have reached a conclusion that one of the two machines was new. In that event, the cost of the remaining machinery may have been required to be examined to determine whether that was negligible. That is clearly not the case here. It would remain open to the revenue to examine whether the unregistered dealer/seller claimed by such assessee was genuine and not a mere pretence or false claim made to evade any further inquiry. Once the assessee failed to establish the identity of the seller and the genuineness of the bill documents against which such purchases were claimed to have been made the assessee prevented the revenue from making any further inquiry to determine whether the machinery in question had been or had not been used or acquired for use anywhere else, before being purchased by the assessee. Therefore, the Tribunal has rightly rejected the claim made by the assessee. Revision dismissed - decided against the assessee.

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• 2018 (11) TMI 1440
  Separate assessment under KVAT Act, 2003 - M-Sand produced by the various writ petitioners by using a vertical/horizontal shaft impactor machine - the dealers had opted for compounding under Section 8 of the Act - Held that:- The proviso to section 8 clearly exempts manufactured sand produced by dealers engaged in the production of granite metals who have opted for compounding based on the specification in Sub clause (i) to (iv) of Clause (b) of Section 8. There is no reference to an inferior quality or negligible quantity of M-Sand which alone stands exempted. It cannot also be said that the M-Sand procured from the VSI/HSI are not produced by the machines referred to in Section 8(b). Section 8(b) is very clear and indicates compounding fee only on the specific machines provided there under with respect to a dealer producing granite metals. True, the legislature never contemplated the introduction of vertical or horizontal shaft impactors for the purpose of producing M-Sand from the granite metal produced by a separate process through an impactor. The exemption granted, did not exclude such production by a separate machine other than that specified in clause (b) of Section 8. There are no reason to sustain the distinction sought to be drawn between M-Sand and manufactured sand. M-Sand as it is generally understood is manufactured sand produced from quarried metals. In common parlance as also in commercial parlance M-Sand is manufactured sand produced from metals, as distinguished from natural sand. Appeal dismissed - decided against appellant.

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• 2018 (11) TMI 1439
  Forfeiture of tax paid u/s 46A of KGST Act - Sale of SIM Cards - levy of service tax under the Finance Act, 1994 and sales tax under the KGST Act - inclusion of activation charges in levy of sales tax - whether there could be forfeiture of the collected tax under Section 46A of the KGST Act, when the collection was validly made? Held that:- Section 46A of the KGST Act has two limbs; one imposing penalty and the other a clause of forfeiture, which, later limb, does not bring with it the essential requirement of mens rea though penal in nature. Any collection by way of tax or purporting to be by way of tax in contravention of the provisions noticed therein, shall be liable to penalty not exceeding rupees five thousand which requires mens rea. The second limb speaks of such collection, either by way of tax or purporting to be by way of tax in contravention of the specified provisions, being liable for forfeiture to the Government. The measure of forfeiture though penal is also an enabling provision, the direct consequence of which is the consumer's right to seek refund by making an application in the prescribed form with the prescribed documents. The distinction in the two limbs of Section 46A of the KGST Act is further accentuated by the fact that the provision speaks of an order issued by the Assessing Authority after giving the person from whom such forfeiture is made, an opportunity to show cause why penalty or forfeiture shall not be ordered. If forfeiture necessarily resulted in penalty, then the words employed would have been penalty and forfeiture, in conjunction. The legislature contemplated situations in which forfeiture would be a necessity, but the act of collection being not contumacious or in direct defiance of the provisions of law, in which event the registered dealer being absolved of such consequence of penalty. The collection made by the dealer becomes one purporting to be by way of tax on the sale of SIM Cards in respect of which he is not liable to pay tax. This again brings the act of collection within the framework of forfeiture as contemplated in Section 46A of the KGST Act, a necessary consequence by reason of the declaration of the Hon'ble Supreme Court. The claim for refund, if any, would subsist only in the consumer and it is the State who is competent to make such refund as per the procedure prescribed - There can be no refund to the assessee who admittedly has collected the amounts paid to the State as tax from its consumer on sale of SIM Cards. In the facts and circumstances, however, the first limb dealing with imposition of penalty, cannot apply and there could be no penalty levied. An order of forfeiture without an order of penalty, as seen from the words employed in the provision, is eminently permissible. The forfeiture is perfectly valid as per Section 46A of the KGST Act, which is in pari materia with Section 72 of the KVAT Act. The matters shall stand remanded to the Division Bench to consider the revisions.

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• 2018 (11) TMI 1438
  Time limitation - Section 67 of the KVAT Act, 2003 - proceedings initiated u/s 67 of the KVAT Act, 2003 challenged on the ground of the orders passed being vitiated on the ground of period of limitation having expired. Held that:- In the present case, the inspection was conducted in June, 2010. The first summons was issued on 06.12.2011 within the limitation period of three years as the provision stood from 2009 onwards. There was absolutely no reason why the Officer did not finalise the proceedings on the basis of the materials recovered without waiting for the assessee to produce the books for almost five years. Even now the Officer has finalised the proceedings in 2016 without any books of accounts being produced by the assessee. The mere non-cooperation of the assessee did not at all hamper the Department from finalising the proceedings, since they could have deemed the non-co-operation to be a cause for assuming that there is no maintenance of proper books of accounts. The repeated summons a mere ruse to save limitation. The proceedings were initiated and the first summons issued when there was a period of limitation stipulated. Even if we take the date of summons, to be the date, from which the detection of offence had to be made, on a reasonably proximate day; the time expires by 2014. We do not think that the proceedings can be sustained and we set aside Ext.P1. Petition allowed.

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• Wealth tax

• 2018 (11) TMI 1437
  Assessments made on urban land owned by the assessee as covered by the definition clause Section 2(ea) Explanation I (b) - value of urban land taken as on the valuation date - Held that:- With respect to the Chandigarh property, the Tribunal found no reason to interfere with the first appellate order. We also find no reason to interfere with the order insofar as the Chandigarh property since, it is on facts and based on the evidence produced by the assessee. - Decided in favour of assessee. With respect to the urban land other than the land in Chandigarh as we noticed when we discussed the First Appellate Authority's order, it is specifically noticed that no evidence was produced with respect to the other lands;as to whether they are beyond the limit as prescribed in Explanation I or are occupied with buildings. No approval for such construction or licences for carrying on business of freezing units were produced by the assessee. In such circumstance, the Tribunal went wrong in finding that there was lack of clarity in the order of the lower authorities. In fact, the lower authorities did not say anything about the lands being occupied by buildings because the assessee did not produce any evidence to show that. In such circumstances, we are of the opinion that the finding of the Tribunal on facts is perverse. The Tribunal ought not to have shifted the burden of proving that the lands were occupied with buildings, on to the shoulders of the Revenue. We see that there is no appearance before this Court and there is no production of any evidence with respect to lands, the value of which was added on, being occupied with buildings. We hence answer the question of law in favour of the Revenue and against the assessee.

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