TMI Tax Updates - e-Newsletter
November 5, 2019

Case Laws in this Newsletter:

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

Articles

• GST COLLECTIONS – DECLINING TREND
• RECENT DEVELOPMENTS IN CASE OF INDEPENDENT DIRECTORS

News

• Finance Minister Launches two new IT Initiatives -ICEDASH & ATITHI for improved monitoring and pace of Customs clearance of imported goods and facilitating arriving international passengers

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• Commerce & Industry Minister to launch curtain raiser of GES 2019

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Notifications

GST - States

• G.O. Ms. No. 47 - dated 18-9-2019 - Puducherry SGST
  Seeks to amend Notification G.O. Ms. No. 35, dated the 5th August, 2019

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Highlights / Catch Notes

GST

• Refund of IGST paid on export of goods - Merchant Exports - The persons who have procured goods by utilising the benefit of Notification No. 40/2017 - Central Tax (Rate) are not eligible to claim refund of the IGST paid on exports as per Rule 96(10) of the CGST Rules 2017 right from 23.10.2017, irrespective of the other transactions made by such person.
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• Rate of tax - supply of Kapton Polyimide Film Adhesive Tape to Indian Railways for use in its railway locomotives - Rate of GST is 18%
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• Classification of services - activity of conduct of examination includes services of printing of question papers also - Since there is involvement of rights in the question paper booklets printed and they cannot be supplied to anyone else and the confidentiality clauses of the contract are all involved, the same is to be treated as Composite supply with the supply of services being the principal supply
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• Classification of goods - Access Card’ printed and supplied by the applicant - Since there is involvement of rights to stay in the temple precincts attached to the card and other involvement of privileges and can only be issued by the recipient of supply of ‘Access Cards’, the same is to be treated as Composite supply with the supply of services being the principal supply.
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• Collection of contribution from its members by the association (club) - the amounts collected towards Corpus / Sinking Fund do not form part of consideration towards supply of services at the time of collection and hence is not liable to GST, at the time of collection. However the amounts so utilized for provision of service are liable to tax at the time of actual supply of service and the time of supply has to be determined in terms of Section 13 of the CGST Act 2017.
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• The supply of goods like wheel chairs, tricycles etc to the patients cannot be considered as a composite supply where the principal supply is health care services and accordingly will be liable to GST as individual supply of goods.
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• Natural Honey other than those put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available is exempt from GST
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Income Tax

• Return filed electronically does not permit the petitioner to make his claim to set off of his profits of this year from the carried forward losses of the previous year in terms of Section 72 - Assessee directed to make presentation before CBDT - In the meantime, allowed to file ITR in paper form.
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• Addition u/s 68 on account of cash deposited in banks post demonetization - disclosure under PMGKY - revenue accepted the revised disclosure made by the managing director - Additions deleted.
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• MAT - Calculation of book profit u/s 115JB - A.O seems to have acted beyond the provisions laid down in Section 115JB and has made the adjustment to the book profits computed as per Companies Act, of the items not appearing in the explanation 1 of Section 115JB. A.O grossly erred in making the additions
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• Levy of penalty u/s. 271D - treating the share application money as deposit u/s 269SS - once the A.O. has treated the share application money received by the assessee in cash, as undisclosed income of the assessee, he could not have proceeded on the basis that it was deposit; and that there was no question of levy of penalty u/s. 271D
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• Allowable business expenses/loss - compensation expenses attributable to unsold part of land - There is no concept of deferred revenue expenditure in tax laws. If the expenditure incurred is revenue in nature the same has to be allowed as expenditure/loss and the same is not to be allocated over some years.
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• Addition u/s. 40A(3) - submission of the assessee that certain cash payments were made in non banking hours in the late evening and certain payments were made on a date when bank was closed and the hotel booking was urgently required - deduction to be allowed, subject to verification.
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Customs

• Classification of goods - since in the instant case the language of condition No.38 in the Exemption Notification is clear and unambiguous, there is no need to resort to the interpretative process in order to determine whether the said condition is to be imparted strict or liberal construction.
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• Classification of imported goods - second hand/ used Casino Ship M V Majesty - on all the three decks of vessel are fitted casino games and the entire layout was to facilitate the playing of such games without any regular arrangement/ seating plan for carriage of passengers - to be classified under heading 8903
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• Classification of imported goods - import of multiplexers, satellite receivers, test and measurement equipments, computers, software and rack - rejection of declared value - items together constituted “Headend” for Cable TV operations - the imported goods are rightly classifiable under 8525.
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Indian Laws

• Whether separate notices u/s 13(4) of the SARFAESI Act, pertaining to different secured assets for a single debt, can be challenged in a single application u/s 17? - Held Yes - the cause of action of the said application is a composite bundle of facts, taking within its fold all the said three separate notices, since those emanate from the same single debt
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IBC

• Admissibility of application - initiation of CIRP - Restoration of non-existent Company (Corporate Debtor) - the application under Sections 7 and 9 will be maintainable against the ‘Corporate Debtor’, even if the name of a ‘Corporate Debtor’ has been struck-off.
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Service Tax

• Valuation - completion and finishing services - The appellant, being an assessee under the VAT Law, has to abide by the state law for payment of VAT - When VAT has already been paid on the value of goods, the same cannot be subjected to levy of Service Tax again.
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Central Excise

• Classification of goods - all of them are supplied to Railway - as per Rule 3(a) and 3(c) of Rules for Interpretation the classification under heading No.8607 is appropriate.
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• Clandestine removal - Shortage of total production - discrepancy consist of only 0.31% - appellant has been able to show that plausible reason of the discrepancy and also the fact that there is no gain to be made by clandestine clearance in terms of Central Excise Duty - demand set aside.
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• Valuation/undervaluation - the methodology adopted to quantify the duty evaded should be sustainable on the evidence available and quantum thereof, needs to be arrived in a logical; rational and legally appropriate manner. - The quantification of the duty liability requires to be arrived strictly on transaction to transaction basis.
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• The Supreme Court dismisses a Special Leave Petition , without granting leave but with reasons, there is no merger, but the reasons adduced by the Supreme Court for dismissing the SLP, nevertheless, constitute declaration of the law, within the meaning of Article 141 of the Constitution of India, which would be binding on all courts and Tribunals subordinate to the Supreme Court, and no such Court or Tribunal would be at liberty to take a view different from that of the Supreme Court.
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• CENVAT Credit - bagasse is not an excisable item and, that, therefore, a demand under Rule 6 of the Cenvat Credit Rules, on the ground of sale of electricity generated from bagasse, could not sustain.
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Case Laws:

• GST

• 2019 (11) TMI 164
  Classification of goods - Coir mats, mattings and floor coverings - whether covered under HSN 5702, 5703 and 5705? - whether taxable @ 5% GST vide Notification No.01/2017-CT (Rate) dated 28-06-2017 - HELD THAT:- Coir mats, mattings and floor coverings covered under HSN 5702, 5703 and 5705 are taxable @ 5% GST vide Notification No.01/2017-CT (Rate) dated 28-06-2017 as amended by Notification No.34/2017- CT (Rate) dated 13-10-2017. This classification covers only the commodities which are manufactured exclusively using coir fiber. If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under Customs Tariff Head 5703 90 90 and it will be taxed @ 12% GST. Whether or not item number (A)(xiii) in Schedule I - 2.5% (which reads as in Sl.N0.219, in column (2), for the figure, 5702, 5703, 5705 , shall be substituted), referred to in Notification No.34/2017-Central Tax (Rate) dtd.13-10-2017 is meant to cover PVC Tufted Coir Mats and Matting? - HELD THAT:- PVC Tufted Coir Mats and Matting cannot be considered as textile of coir and floor coverings covered under HSN 5702, 5703 and 5705. If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under the Customs Tariff Head 5703 90 90 and it will be taxed @ 12% GST as per Entry at SI No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Whether or not PVC Tufted Coir Mats and Matting attracts low band tax rate of 5% as per the recommendations of the Fitment Committee and approval of the GST Council? - HELD THAT:- PVC Tufted Coir Mats and Matting cannot be considered as textile of coir and floor coverings covered under HSN 5702, 5703 and 5705 and hence taxable @12% under Customs Tariff Head 5703 90 90. Whether or not PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 20-carpets and floor coverings of coir (inserted vide Sl.No.9 (iii) of Notification No.109/2008-Customs (N.T) dtd. 24-09-2008) corresponding to Entry Sl.No.219, of Schedule I attracting 5% GST? - HELD THAT:- No, PVC Tufted Coir Mats and Matting cannot be classified under tariff item 5703 90 20-carpets and floor coverings of coir (inserted vide Sl.No.9 (iii) of Notification No.109/2008-Customs (N.T) dtd. 24-09-2008) corresponding to Entry Sl.No.219, of Schedule I attracting 5% GST. Whether or not PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 90-of other textile material - other corresponding to entry in Sl.No.144 of Schedule II attracting 12% GST? - HELD THAT:- Yes, PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 90-of other textile material - other corresponding to entry in Sl.No.144 of Schedule II attracting 12% GST. PVC Coir Mats Matting can be classified under tariff item 57050049/57050090-Carpets, carpeting, rugs, mats and matting-Other corresponding to Entry in SL.No.219 of Schedule I attracting 5% GST? - HELD THAT:- The PVC Tufted Coir Mats and Matting are classifiable under Customs Tariff Head 5703 90 90 and attracts GST at the rate of 12% as per SI No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017.

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• 2019 (11) TMI 163
  Classification of goods - PVC Tufted Coir Mats and Matting - HELD THAT:- Coir mats, mattings and floor coverings covered under HSN 5702, 5703 and 5705 are taxable @ 5% GST vide Notification No.01/2017-CT (Rate) dated 28-06-2017 as amended by Notification No.34/2017- CT (Rate) dated 13-10-2017. This classification covers only the commodities which are manufactured exclusively using coir fiber. If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under Customs Tariff Head 5703 90 90 and it will be taxed @ 12% GST. Whether or not item number (A)(xiii) in Schedule I - 2.5% (which reads as in Sl.No.219, in column (2), for the figure, 5702, 5703, 5705 , shall be substituted), referred to in Notification No.34/2017-Central Tax (Rate) dtd. 13-10-2017 is meant to cover PVC Tufted Coir Mats and Matting? - HELD THAT:- PVC Tufted Coir Mats and Matting cannot be considered as textile of coir and floor coverings covered under HSN 5702, 5703 and 5705. If any, PVC or rubber or any other materials are stuffed on the textile of coir, which is used as floor mats or mattings, it will come under the Customs Tariff Head 5703 90 90 and it will be taxed @ 12% GST as per Entry at Sl No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Whether or not PVC Tufted Coir Mats and Matting attracts low band tax rate of 5% as per the recommendations of the Fitment Committee and approval of the GST Council? - HELD THAT:- PVC Tufted Coir Mats and Matting cannot be considered as textile of coir and floor coverings covered under HSN 5702, 5703 and 5705 and hence taxable @12% vide Customs Tariff Head 5703 90 90. Whether or not PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 20-carpets and floor coverings of coir (inserted vide Sl.No.9 (iii) of Notification No.109/2008-Customs (N.T) dtd.24-09-2008) corresponding to Entry Sl.No.219 of Schedule I attracting 5% GST? - HELD THAT:- No, PVC Tufted Coir Mats and Matting cannot be classified under tariff item 5703 90 20-carpets and floor coverings of coir (inserted vide Sl.No.9 (iii) of Notification No.109/2008-Customs (N.T) dtd.24-09-2008) corresponding to Entry Sl.No.219 of Schedule I attracting 5% GST. Whether or not PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 90-of other textile material - other corresponding to entry in Sl.No.144 of Schedule II attracting 12% GST? - HELD THAT:- Yes, PVC Tufted Coir Mats and Matting can be classified under tariff item 5703 90 90-of other textile material - other corresponding to entry in Sl.No.144 of Schedule II attracting 12% GST. PVC Coir Mats Matting can be classified under tariff item 57050049/57050090-Carpets, carpeting, rugs, mats and matting-Other corresponding to Entry in Sl.No.219 of Schedule I attracting 5% GST? - HELD THAT:- The PVC Tufted Coir Mats and Matting are classifiable under Customs Tariff Heading 5703 90 90 and attracts GST at the rate of 12% as per SI No. 144 of Schedule II of Notification No. 01/2017-Central Tax (Rate) dated 28.06.2017.

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• 2019 (11) TMI 162
  Maintainability of application - Refund of accumulated input tax credit on both inputs and input services - inverted duty structure - N/N. 21/2018-Central Tax dated April 18, 2018 and Notification No. 26/2018-Central Tax dated June 13, 2018 - HELD THAT:- As per provisions of Section 2(59) of CGST Act input means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business, input tax defines under section 2(62) of the GST act is any tax charged on supply of goods and service made to registered person under the head of SGST/CGST/IGST/UTGST Act - The entire application is related to the application of the Notification and hence the same are noted. Notification No. 26/2018 -Central Tax dated 13-06-2018 is a Notification which amends the Rules and is called the Central Goods and Services Tax (Fifth Amendment) Rules, 2018 . Further these rules are made by the Central Government to amend the Central Goods and Services Tax Rules, 2017 . Regarding the issue of refund, the applicant himself has already stated that his application for refund of unutilized input tax credit relatable to services is rejected by the jurisdictional authority. Since the jurisdictional refunding authority is an adjudicating authority and any decision by him is appealable under the Act before the concerned appellate authority and advance ruling authority is not the forum before such issue can be raised and in view of the above, the application is not maintainable on this account itself. Further, it is seen during the arguments, the vires of the rules are questioned and it is not within the scope of this authority for advance ruling. Appeal rejected as being not maintainable.

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• 2019 (11) TMI 161
  Classification of supply - Composite supply or not - supplies made to Government Entities - applicant has been awarded of contract works by the corporations of Karnataka Government such as M/s Dr. B.R. Ambedkar Development Corporation Limited, Schedule Tribes Welfare Department, Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited and other implementing agencies under Social Welfare Department, Government of Karnataka for providing the composite supply of drilling of bore wells for Irrigation purpose to small and marginal land owners of Schedule Caste/Schedule tribe/Other backward class farmers of economic weaker section, for agriculture purpose. HELD THAT:- The energized bore wells would be provided to the beneficiaries from the said Government Corporations. The beneficiaries are identified by the Corporation and the agreements are signed between the Corporation and the beneficiaries and the land is hypothecated to the Corporation towards the Loan component - The corporations allot the work to the drillers like the applicant and the contract is between the applicant and the corporation and there is no privity of contract between the applicant and the ultimate beneficiary. Further, the consideration for this contract is paid by the Corporation in full. Hence the service is provided by the applicant to the Corporation. In the instant case, the corporation is liable to pay the consideration for the composite supply of services of providing an energized bore well and hence the corporation would be deemed to be the recipient of supply of goods or services or both as per clause (93) of section 2 of the CGST Act and the supplier of this service is the applicant. Whether the corporations, which are receiving the service from the applicant, are Government entities within the meaning of the GST Act? - HELD THAT:- It is very clear that the corporations, Dr. B.R. Amedkar Development Corporation and Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited are both entities, established by the Government of Karnataka with 100% share capital and control to carry out the function entrusted by the Government of Karnataka. Hence they are clearly covered under the definition of Government Entity - The Minor Irrigation Scheme is defined by the Ministry of Water Resources, Government of India to include all ground water and surface water (both flow and lift) having culturable command area up to 2000 hectare individually. The provision of individual bore wells would come under the minor irrigation scheme for the reason that it involves the ground water by lifting and the culturable command area is less than 2000 hectare. Hence the provision of Energized Bore wells to individual farmers under the Ganga Kalyana Scheme would be covered under the Minor Irrigation Scheme. The service, being provided by the applicant, satisfies all the three required conditions and hence qualifies to be covered under entry No.3A to the Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017 as amended by Notification No.2/2018-Central Tax (Rate) dated 25.01.2018 thereby attracts NIL rate of GST.

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• 2019 (11) TMI 160
  Refund of IGST paid on export of goods - restriction introduced by Notification No. 3/2018 -Central tax (later substituted by Notification No.39/2018- Central Tax dated 04.09.2018 retrospectively from 23.10.2017) - export of goods for which corresponding inward supplies were procured at a concessional rate of 0.10% GST under Notification No. 40/2017- Central Tax (Rate), thereby holding that such restriction on IGST refund does not apply on export of goods which were procured on full payment of GST - Whether the above restriction prohibits refund of IGST paid in its entirety even on such exports where the goods have been procured on payment of full rate of GST by the person who procures only a small quantity of goods at concessional rate of 0.10% GST under Merchant Export Scheme as provided under Notification No. 40/2017- Central Tax (Rate)? HELD THAT:- The restriction is on the persons claiming refund of IGST paid that he must not have received supplies on which the benefit of the Government of India, Ministry of Finance notification No. 40/2017-Central Tax (Rate), dated the 23rd October, 2017 has been availed, and not related to the individual transactions. If the person has utilized the benefit of the said notification on his inward supplies, then he would not be eligible to the scheme of paying IGST on the export of goods and then claiming the entire amount of IGST paid as refund on such goods being exported. But this does not amount to denial of refund of input tax credit and he can always avail the benefit of zero-rated supplies on the basis of LUT. The scheme of Merchant Exports was brought into effect by Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017 and also other allied GST Notifications of State, which together allowed a registered exporter to procure goods at a concessional rate of 0.10 % GST. The applicant is intending to utilize the benefit of this notification to procure goods for exports. Hence sub-rule (10) of rule 96 has come into effect from 23.10.2017 which is also the date of effect of Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017. Hence there is an alignment of the Merchant Export scheme and the refund of IGST paid on exports - Hence it is clear that the persons who have procured goods utilising the benefits of the Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017 are not eligible to claim refund of the IGST paid on the export of such goods by virtue of the Rule 96(10). The persons who have procured goods by utilising the benefit of Notification No. 40/2017 - Central Tax (Rate) dated 23.10.2017 are not eligible to claim refund of the IGST paid on exports as per Rule 96(10) of the CGST Rules 2017 right from 23.10.2017, irrespective of the other transactions made by such person.

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• 2019 (11) TMI 159
  Rate of tax - main contractor or sub-contractor - applicability of entry SI No 3 (vi) (a) of notification 11/2017-CGST (Rate) as amended till date or Entry SI No. 3 (ix) of 11/2017 -Central Tax (Rate) as amended - HELD THAT:- It is pertinent to note that the applicant is principal contractor and providing supply of service to government entities as composite works contracts per provision of 2(119) such as design, erection, testing, commissioning, including pre-commissioning activities in relation to or incidental to installation of transformer of various capacity and providing through electrical infrastructures by extending 11 KV high transmission lines and Low transmission lines - the recipient of supply is actively engaged in commerce, business and trading of Electricity. On this count the composite works carried out by the applicant for the said Corporation are predominantly meant for trade and commerce. Therefore the applicant does not fulfill the conditions as prescribed in item no. (vi)(a) of Serial number 3 of Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017. The applicant is therefore not eligible for the concessional rate of 6% CGST and 6% KG ST under item no. (vi)(a) of Serial number 3 of Notification No.11/2017 - Central Tax (Rate) dated 28-06-2017 - The composite supply of works contract provided by the applicant is taxable at the rate of 9% CGST and 9% KGST under item no. (ii) of serial no. 3 till 28.03.2019 and thereafter at the same rate under item no. (xii) of serial number 3 of the amended Notification No. 11/2017 - Central Tax (Rate) dated 28-06-2017.

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• 2019 (11) TMI 158
  Rate of tax - supply of Kapton Polyimide Film Adhesive Tape to Indian Railways for use in its railway locomotives - HELD THAT:- The goods under Chapter 85 are not covered under Chapter 86. Even by the admission of the applicant in their catalogue, the pressure sensitive polymide film adhesive insulation tape find use in a wide range of industries and are not solely for use by Railways in their locomotives. Therefore by virtue of Note 3 alone the product is not liable to be classified under Heading 8607. Further, the pressure sensitive polymide film adhesive insulation tape is used in the locomotive for insulation and it can also be used in other industries for insulation. Hence their primary function is as insulators and hence they are not parts of the locomotives. Thus, rate of tax on supply of Kapton Polyimide Film Adhesive Tape to Indian Railways for use in its railway locomotives shall be the rate of tax as applicable to goods covered under the heading 8546-Electrical Insulators of any material and therefore the rate is 18%.

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• 2019 (11) TMI 157
  Classification of services - activity of printing of Question Paper books - whether activity of printing of Question Paper books is to be covered under HSN 4901 under the description Printed books, including Braille books in Serial Number 119 of Notification No. 2/2017 Central Tax (Rate) or under the sub-clause (vi) of clause (b) in serial Number 66 with SAC 9992 of Notification No. 12/2017 ? HELD THAT:- In the instant case applicant is engaged in printing the content supplied by the recipient using their own physical inputs like paper, ink etc. Since there is involvement of rights in the question paper booklets printed and they cannot be supplied to anyone else and the confidentiality clauses of the contract are all involved, the same is to be treated as Composite supply with the supply of services being the principal supply - Therefore the supply made by the applicant shall qualify to be treated as a composite supply where the principal supply is the supply of service. Therefore their supply would not constitute a supply of goods. Such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services. Whether their supply is covered under the SAC 9992 which is related to Education Services and hence covered under the Entry No. 66 of the Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017? - HELD THAT:- There may be several services relating to the conduct of examination like invigilation, distribution of question papers, collection of answer sheets, assessment of answer sheets, printing of question papers etc. Therefore the ambit of the services relating to conduct of examination includes services of printing of question papers also. Therefore the services supplied by the applicant are covered under the scope of SI. 66 of Notification No. 12/2017 - Central Tax (Rate) dated 28.06.2017. The heading 9992 given in SI. No. 66 is only indicative and it does not impact the inclusion of the supply by the applicant from the entry at SI. No. 66.

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• 2019 (11) TMI 156
  Classification of goods - Access Card printed and supplied by the applicant i.e. Pattabi Enterprises based on the contents provided by their customers - whether classifiable under HSN code 4901 10 20 under the description brochures, leaflets and similar printed matter whether or not in single sheet? Classification of goods - Access Card printed and supplied by the applicant i.e., Pattabi Enterprises based on the contents provided by their customers - whether classifiable under HSN code 4901 10 20 under the description brochures, leaflets and similar printed matter whether or not in single sheet and attracts GST rate of 5% in case of IGST and 2.5% CGST and 2.5% SGST in case of Intra State supplies? - applicability of N/N. 1/2017-CT (Rate) SI.No. 201 1/2017-IT (Rate) Sl.No.201 dated. 28.06.2017 and SGST/UTGST Notifications. HELD THAT:- In the instant case the applicant is engaged in printing the content supplied by the recipient using their own physical inputs including paper, ink etc. Since there is involvement of rights to stay in the temple precincts attached to the card and other involvement of privileges and can only be issued by the recipient of supply of Access Cards , the same is to be treated as Composite supply with the supply of services being the principal supply - Therefore such supplies would constitute supply of service falling under heading 9989 of the scheme of classification of services. Section 8(1)(a) of the Central GST Act clearly mandates that in case of a composite supply comprising of two or more supplies, where one of these supplies is the principal supply, such composite supply shall be treated as a supply of such principal supply. The supply made by the applicant thus amount to a supply of service and not supply of goods, as envisaged by the applicant. The supply of the applicant is covered under the Serial No. 27 of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 and is liable to tax at 9% under the CGST Act. Similarly the supply is liable to tax at 9% under the KGST Act. Interstate supply of such supplies would be liable to tax at 18% under the IGST Act.

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• 2019 (11) TMI 155
  Levy of CGST and SGST on the amount of contribution received from its members - applicability of benefit of Notification No. 12/2017 dated 28-6-2017 (SI No. 77) read with Notification No.2/2018 dated 25-1-2018 - restriction to claim input tax credit - levy of CGST/ SGST on amounts which it collects from its members for setting up a corpus fund - Scope of supply. Liability of GST on maintenance charges collected by the applicant from its members - HELD THAT:- The applicant is a registered entity and is an Association of Persons and is distinct from its members. The Association is receiving consideration for the supply of services. There is no dispute that the applicant is performing certain operations / services for which consideration is received. There is no such thing in the law that services provided as statutory obligations are not supplies under the definition of the Act. Section 7(1) of the CGST Act 2017. GST is levied on intra-State and inter-State supply of goods and services. According to section 7 of CGST Act, 2017, the expression supply includes all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business, and includes activities specified in Schedule II to the CGST Act, 2017. The definition of business in section 2(17) of CGST Act states that business includes provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members. The term person is defined in section 2(84) of the CGST Act, 2017 to include an association of persons or a body of individuals, whether incorporated or not, in India or outside India. The activity of the applicant is a provision of services to its members, and it is in the form of reimbursement of charges or share of contribution and the applicant is a non-profit entity. Taxability of the transaction - HELD THAT:- The service is covered under the Heading 9995. As per the Annexure to Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017, the services provided by the Home Owners Associations are covered under the Heading 9995 and specifically under Service Code of 9995 98 - Hence it is clear that what is supplied by the applicant is a service by the Home Owner's Association to its members and not a composite supply or mixed supply, which is actually a combination of more than one supply for a common consideration. Even if the same is considered as a composite supply, then the principal supply would be the Supply of services by the Home Owner's Association and hence the entire supply would be treated as a composite supply of such service. Regarding the services, the supply of services is made in common to all the members and it is only reimbursement of charges or share of contribution. Applicability of exemption under entry No. 77 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 as amended by the Notification No. 2/2018 - dated 25-01-2018 - HELD THAT:- The activity is covered under clause (c) of the entry 77 and reading together Services by a non-profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution upto an amount of seven thousand five hundred per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex is exempted from the levy of CGST. The exemption of ₹ 7,500/- is not available when the maintenance charges exceed ₹ 7,500/- per month per member. Therefore the members are required to discharge GST on the entire maintenance charges and not on just the amount in excess of ₹ 7500/-. The same ratio applies to the earlier period when the exemption was available on maintenance charges upto ₹ 5000/-. Whether the applicant is required to restrict the claim of input tax credit? - HELD THAT:- The applicant is involved in supply of taxable service, if the contribution exceeds ₹ 7,500/- per month per member and also involved in exempted supply of service when the contribution is upto ₹ 7,500/-. Therefore the applicant is providing partly taxable as well as partly exempted supply of service. Therefore, the applicant is liable to restrict the claim of input tax credit to the extent of exempt turnover as per Rule 42 of the CGST Rules 2017, which is related to common input tax credits. For the unrestricted amount of input tax credit, the applicant can avail the benefit of input tax credit. However, this is again subject to the restriction and ineligibilities as enumerated in the Act and rules made thereunder. Liability of GST on the amounts collected for corpus fund from members - HELD THAT:- It is seen that this amount is collected as a deposit and is utilised by the applicant as when required. The contributions are made by the members to the applicant as contributions to the corpus fund and not in relation to any service in particular. The proviso to the above clause states that the deposit given in respect of a future supply shall not be considered as payment made for such supply until the supplier applies such deposit as consideration. In the instant case the corpus / sinking fund so collected is the amount collected towards the future supply of service and accordingly gets applied as consideration towards supply of services only at the time of actual supply of services. Therefore the amounts collected towards Corpus / Sinking Fund do not form part of consideration towards supply of services at the time of collection and hence is not liable to GST, at the time of collection. However the amounts so utilized for provision of service are liable to tax at the time of actual supply of service and the time of supply has to be determined in terms of Section 13 of the CGST Act 2017.

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• 2019 (11) TMI 154
  Liability of GST - supply of medicines, drugs and other surgical goods from its pharmacy to inpatients - supply of medicines, drugs and other surgical goods from its pharmacy to outpatients - supply of incidental services as ' X-ray, Clinical laboratory etc rendered as part of health care service - supply of Implants and artificial limbs made during course of treatment to patients. Whether the applicant, a Multi Speciality Hospital is liable to pay GST on supply of medicines, drugs and other surgical goods from its pharmacy to inpatients? - HELD THAT:- The supply of medicines, drugs and other surgical goods from its pharmacy to in-patients are in the course of providing health care services which are naturally bundled and are provided in conjunction with each other, would be considered as ' Composite Supply and eligible for exemption under the category health care services'. Whether the applicant, a Multi Speciality Hospital is liable to pay GST on supply of medicines, drugs and other surgical goods from its pharmacy to outpatients? - HELD THAT:- The supply of medicines, drugs and other surgical goods by the hospital from its pharmacy to out-patients as part of health care services is a taxable supply of goods and thereby GST is applicable. Whether the applicant is liable to pay GST on supply of incidental services as ' X-ray, Clinical laboratory etc rendered as part of health care service? - HELD THAT:- As per SRO.No.371/2017 vide sl.no.74 (Notification No. 12/2017-CT (Rate) dtd,28-06-2017), services by way of diagnosis come under the category of health care services covered under SAC 9993 and thereby exempted. Whether the applicant is liable to pay GST on supply of Implants and artificial limbs made during course of treatment to patients? - HELD THAT:- The supply of goods like wheel chairs, tricycles etc to the patients cannot be considered as a composite supply where the principal supply is health care services and accordingly will be liable to GST as individual supply of goods.

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• 2019 (11) TMI 153
  Permission for withdrawal of appeal - Levy of GST and property tax - grievance of the petitioner-tenants is that respondent No.5 is insisting them to deposit the GST and the Property tax - HELD THAT:- Petition dismissed as withdrawn

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• 2019 (11) TMI 152
  Permission to withdraw petition - GST Act - HELD THAT:- In this view of the matter, he seeks permission to withdraw the present petition with liberty to seek appropriate remedy in accordance with law. A copy of the order dated 27.9.2019 passed by respondent no.2 has been produced in Court today. The present writ petition is dismissed as infructuous with liberty to petitioner to seek appropriate remedy in accordance with law.

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• 2019 (11) TMI 131
  Classification of services - rate of tax - restaurant services or not - resale of food bakery products - HELD THAT:- It is not a restaurant service - A restaurant is a place of business where food is prepared in the premises and served based on the orders received from the customer. In the instant case it is a bakery, where ready to eat items are sold and mere facility is provided to have it from the shop. classification of HSN and Tax rates on various goods - Sweets - HELD THAT:- Agra Peda, Maladoo, Rava Ladoo, Kappa Ladoo, Kesari, Kesari Beetroot, Boli, Boli Banana, Pappada Boli, Churuttu, Swefet Kachori, Halwa Guava, Halwa Jackfruit, Halwa- Mango, Halwa Wheat, Carrot Sweet, Kaju Burfi, Aval Vilayichathu, Ariunda, Avalose unda, Diamond Cuts (Sweet), Carrot Sweet and Unniyapam are classifiable under HSN Code 2106 90-Sweetmeat and attracts GST at the rate of 5% as per SI No. 101 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Chappathi - HELD THAT:- Chappathi is classifiable under HSN Code 2106 90 99 and is liable to GST at the rate of 5% as per SI No.99A of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Coconut Chutney Powder and Dosa Chutney Powder - HELD THAT:- Coconut Chutney Powder and Dosa Chutney Powder are classifiable under HSN Code 2106 90 99 and is liable to GST at the rate of 5% as per SI No. 100A of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Namkeen items - HELD THAT:- Achappam, Avalose Podi, Cheeda, Diamond Cuts(Hot), Kuzhalappam, Murukku and Thatta are classifiable under HSN Code 2106 90 and is liable to GST at the rate of 12% as per SI No. 46 of Schedule II of Notification No.01/20117 Central Tax (Rate) dated 28.06.2017 for those put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available - The rate of GST is 5% as per SI No. 101A of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017 for those other than put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available. Banana Chips - Chakka Chips - Cheema Chakka Chips - Chembu Chips - Kappa Chips - Sarkara Varatti - Kovakkai Vattal - Pavakkai Vattal - HELD THAT:- These are classifiable under HSN Code 2008 19 40-Other roasted and fried vegetable products and is liable to GST at the rate of 12%; as per SI No. 40 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Fried Peanuts and Chilly Nuts - HELD THAT:- Fried Peanuts and Chilly Nuts are classifiable under HSN Code 2008 and are liable to GST at the rate of 12% as per SI No. 40 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Pickles - HELD THAT:- Various pickles are classifiable under HSN Code 2001 90 00 and attracts GST at the rate of 12% as per SI No. 33 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. King Fish Pickle and Tuna Pickle - HELD THAT:- King Fish Pickle and Tuna Pickle are classifiable under HSN Code 1604 12 10 and Meat Pickle is classifiable under HSN Code 1602 90 00 and are liable to GST at the rate of 12% as per SI Nos. 31 and 29 respectively of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Mango Jam - Mixed Fruit Jam - Orange Jam - Pineapple Jam - Plantain Jam - HELD THAT:- Mango Jam, Mixed Fruit Jam, Orange Jam, Pineapple Jam and Plantain Jam are classifiable under HSN Code 2007 and attract GST at the rate of 12% as per SI No. 39 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Juice Green Mango - Juice Mango - Juice Passion Fruit - Juice Rose Apple - HELD THAT:- Juice Green Mango, Juice Mango, Juice Passion Fruit and Juice Rose Apple are classifiable under HSN Code 2009 and attract GST at the rate of 12% as per Si No. 41 of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Juice Butter Milk - HELD THAT:- Juice Butter Milk is classifiable under HSN Code 0403 90 10 and is exempted as per SI No. 26 of Notification No.02/2017 Central Tax (Rate) dated 28.06.2017. Caramel Pudding - Chocolate Pineapple Pudding - Fruit Salad Mix - Tender Coconut Pudding - HELD THAT:- These are classifiable under HSN Code 2106 90 99-Other food preparations not elsewhere specified or included and is liable to GST at the rate of 18% as per SI No. 23 of Schedule III of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Payasam of all varieties - HELD THAT:- These are classifiable under HSN Code 2106 90 99- Other food preparations not elsewhere specified or included and attracts GST at the rate of 18% as per SI No. 23 of Schedule III of Notification No. 01/2017 Central Tax (Rate) dated 28.06.2017. Various sandwiches and rolls - HELD THAT:- These are classifiable under HSN Code 2106 90 99-Other food preparations not elsewhere specified or included and taxable at the rate of 18% as per Sl No. 23 of of Schedule III of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Ada Chakka - Ada Pazham, - Ada Plain - Ada Ragi - Ada Wheat - Vattayappam - Sharkara Vattayappam, Banana Ball, Banana Fry, Bonda Veg, Chicken Burger, Chicken Cheese Steak, Chilli Padaval, Chilli Cauliflower, Chirotta, Parippu Vada, Sambar Vada, Sukhiyan, Mini Chicken Samosa, Noodle Chicken Samosa, Noodle Veg Samosa arid Punjabi Samosa - HELD THAT:- These are classifiable under HSN Code 2106 90 99-Other food preparations not elsewhere specified and liable to GST at the rate of 18% as per SI No. 23 of of Schedule III of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Various other food items - HELD THAT:- These are classifiable under HSN Code 2106 90 99-Other food preparations not elsewhere specified or included and is liable to GST at the rate of 18% as per Sl No. 23 of of Schedule III of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Lasagne - HELD THAT:- Lasagne is classifiable under HSN Code 1902 20 10 and is liable to GST at the rate of 12% as per SI No. 32B of Schedule II of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017. Natural Honey - HELD THAT:- Natural Honey is classifiable under HSN Code 0409 00 00 and is liable to GST at the rate of 5% as per SI No. 13 of Schedule I of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017 for those put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available - Natural Honey other than those put up in unit container and, (a) bearing a registered brand name; or (b) bearing a brand name on which an actionable claim or enforceable right in a court of law is available is exempt from GST as per SI No. 29 of Notification No.02/2017 Central Tax (Rate) dated 28.06.2017. Cone - HELD THAT:- Cone is classifiable under HSN Code 1905 32 90 and is liable to GST at the rate of 18% as per SI No. 16 of Schedule III of Notification No.01/2017 Central Tax (Rate) dated 28.06.2017.

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• Income Tax

• 2019 (11) TMI 151
  Recovery proceedings - stay of recovery pending disposal of the appeals by the Appellate Tribunal, it would appear that the Appellate Tribunal subsequently considered the appeals and dismissed the same - in the recovery proceedings that were initiated by the respondents when the appeals were dismissed, the recoveries effected were appropriated towards the tax liability confirmed on the petitioner for the year 2016-17 - HELD THAT:- Inasmuch as there has been an interim order in force against recovery proceedings in these Writ Petitions and now the Appellate Tribunal has already heard the appeals covered and is pending adjudication before the First Appellate Authority, these writ petitions can be disposed by directing the Appellate Authority concerned to pass orders in the pending proceedings before them. I, therefore, direct the Appellate Tribunal/CIT(Appeals) to pass final orders in the appeals/miscellaneous applications pending before them expeditiously, after hearing the petitioner.

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• 2019 (11) TMI 150
  Return filed electronically does not permit the petitioner to make his claim to set off of his profits of this year from the carried forward losses of the previous year in terms of Section 72 - HELD THAT:- The claim sought to be urged by the petitioner viz. Set off of business profits of this year offered to tax under the head capital gain being set off against carried forward loss is prima facie supported by the decisions of the Tribunal in the case of M.K. CREATIONS, C/O- SHANKARLAL JAIN ASSOCIATES [ 2017 (6) TMI 821 - ITAT MUMBAI] AND M/S SMART SENSORS AND TRANSDUCERS LTD. [ 2019 (4) TMI 1159 - ITAT MUMBAI] . It is also not disputed before us by the Revenue that the return of income in electronic form is self populted i.e. on filling in some entries, the other entries in the return are indicated by the system itself. Thus, the petitioner is unable to make a claim which according to him, he is entitled to in law. In case, the petitioner is compelled to file in the prescribed electronic form, it could be declared by the Assessing Officer as defective (if all entries are not filled) or raise a demand for tax on the basis of the declared income under Section 143(1) of the Act or if the assessment is taken to scrutiny under Section 143(3) of the Act, then the petitioner will not be entitled to raise a claim of set off under Section 72 of the Act during the assessment proceedings. The purpose and object of e-filing of return to have simplicity and uniformity in procedure. However, the above object cannot in its implementation result in an assessee not being entitled to make a claim of set off which he feels he is entitled to in accordance with the provisions of the Act. The allowability or dis-allowability of the claim is a subject matter to be considered by the Assessing Officer. However, the procedure of filing the return of income cannot bar an assessee from making a claim under the Act which he feels he is entitled to. In the absence of the petitioner filing its return of income on or before 31st October, 2019, the petitioner is likely to face penal consequences. We also in the present facts are of the view that awaiting the order of the Assessing Officer under Section 139(9) of the Act, declaring the return as defective, will not help as the issue would continue to remain even if a fresh return is filed. The issue raised is a fundamental issue, which needs to be addressed by the CBDT. It is in these aforesaid unusual circumstances, that we have not adopted the course of directing the petitioner to first demand justice from the Authority concerned before moving this Court in its writ jurisdiction. This view of ours is also supported by the fact that Mr. Walve, learned Counsel appearing for the Revenue on instructions states that the Assessing Officer who is present in Court states that in his experience he has not come across a case like this where the return which are prescribed under Section 139D of the Act r/w Rule 12 of the Rules do not take into account the situation where the assessee s claim cannot be considered. Moreover, from the facts as noted above, this situation (like the present) may not be restricted only to this petitioner but could generally arise in other cases also. Therefore, it would be appropriate that the petitioner make a representation on the above issue to the CBDT, who would then consider it in the context of facts involved in the present case and issue necessary guidelines for the benefit of the entire body of the assessees, if the petitioner is right in his claim that the prescribed return of income to be filed electronically provides prohibits an assessee from making its claim. In the meantime, the petitioner without prejudice to his rights and contentions would file the return of income in electronic form on the system before the last date. Besides, also file his return of income for the subject assessment year in paper form with the Assessing Officer before the last date. This return of income in paper form would be accepted by the Assessing Officer without prejudice to the Revenue s contention that such a return cannot be filed.

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• 2019 (11) TMI 149
  Revision u/s 263 - case was selected for scrutiny under CASS - addition u/s 68 - AO failed to make adequate enquiries with regard to the creditworthiness of the four loan creditors, from whom the assessee had received huge loan - HELD THAT:- The impugned loan is the subject matter of SCN issued u/s 263 of the Act, which the assessee received from two bodies corporate i.e. Anadya Technologies Pvt Ltd Hotahoti Wood Products Ltd. Although in the SCN, the ld PCIT while proposing to usurp the revisional jurisdiction found fault with the Assessment order on the ground of non-enquiry by AO into the loan transaction by the assessee with M/s Purbanchal Prestressed Ltd, which we find that enquiry under Section 133(6) was in fact carried out by the AO from the said party and evidence in support of compliance made by the said party was also furnished before the ld. Pr. CIT. We therefore note that since the evidence led by the assessee in this regard was found to be factually true, the ld. Pr. CIT did not pursue this ground any further while passing the impugned order. We therefore have no hesitation in observing that on this ground of non-enquiry, the order u/s 263 holding the assessment order to be erroneous and prejudicial to the interests of the Revenue per-se erroneous. Transactions involving receipt of loan from M/s Anadya Technologies Pvt Ltd M/s Hotahoti Wood Products Ltd during the year the information gathered by the AO through the enquiries conducted u/s 133(6) of the Act from the loan creditors, sufficiently established the creditworthiness of the loan creditor and the genuineness of the transactions and therefore the allegation on which the ld. Pr. CIT proceeded to issue the show cause notice u/s 263 is found to be untenable on facts and in law. From the order of the Ld. Pr. CIT, we note that he found fault with the AO s role of an investigator because in his subjective opinion the AO did not properly investigate into the facts of the case. Keeping the foregoing fault in mind and taking into account the facts as discussed in earlier paragraphs, we note that in the given facts of the present case the AO had made specific enquiry into the loan transactions of the assessee with its loan creditors based on the CASS parameter. In response to the enquiries made u/s 133(6) the loan creditors have filed their documents/details to substantiate/prove their identity(ies), creditworthiness and genuineness of the loan transactions. AO had examined all the details and called for financial statements of the loan creditors for verification of the loan transactions. Having done so, the AO has not drawn any adverse inference against any loan creditors. AO bore the capacity to draw satisfaction with the explanations furnished by the assessee as well as the loan creditors regarding the loan of ₹ 1,27,47,000/- received during the year and that the AO exercised due care by conducting requisite enquiries in respect of these loan transactions as the circumstances demanded, before drawing plausible inference in favour of the assessee. When confronted with the reasons set out in the SCN, the assessee had led before the ld. Pr. CIT sufficient documentary evidence which proved that the SCN had proceeded on assumption of incorrect facts which were not borne out from the assessment records. It was also established before the ld. Pr. CIT that before completion of assessment, the AO had indeed made enquiries from all the loan creditors u/s 133(6) and only after objective consideration of the evidences furnished, order u/s 143(3) of the Act was passed. On receipt of these objections, the ld. Pr. CIT himself did not make any effort to prove any factual or legal infirmity in the documents or explanations furnished nor he was able to prove that any of the documents or evidences were false so as to establish that the AO s order was erroneous as well as prejudicial to the Revenue s interests because the view taken by him was unsustainable in law. On the contrary, the ld. Pr. CIT merely set aside the assessment order directing AO to pass the order afresh in accordance with law which in our opinion was nothing but giving the AO second innings without establishing that the AO s order was erroneous as well as prejudicial to the interests of the Revenue Assessment order is not the result of non-application of mind or any inadequate enquiry. We are also of the considered opinion that while passing the assessment order the AO did not follow a view which can be said to be unsustainable in law . In the circumstances therefore, the jurisdictional facts for usurping the jurisdiction, being absent, we hold that the action of Pr. CIT was without jurisdiction and all subsequent actions are 'null' in the eyes of law. We therefore quash the order impugned before us. Appeal of assessee allowed.

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• 2019 (11) TMI 148
  Addition of share capital u/s 68 - HELD THAT:- Assessee produced sufficient documentary evidences before the A.O. to prove that money routed from the assessee itself which came back to the assessee in the form of share capital/premium, therefore, assessee proved identity of the Investors, their creditworthiness and genuineness of the transaction in the matter and as such have been able to prove ingredients of Section 68 - A.O. however did not make any further enquiry on the documentary evidences filed by the assessee. A.O. did not verify the trail of the source of funds received by assessee through various entities as explained above. We may also note that during the course of hearing of these appeals, A.O. was present in the Court, but, did not make any adverse comment upon the documentary evidences filed in the paper book filed by the assessee. A.O. thus, failed to conduct scrutiny of the documents at assessment stage and merely suspected the transaction between the Investor Companies and the assessee company despite the fact that in the deviation report the A.O. expressed doubts in making addition into the matter. It may also be noted here that no cash have been reported to have been deposited in the accounts of the assessee, the Investor Companies and other related parties. We are of the view that assessee has been able to prove that it has received genuine amounts which is routed through various companies. Therefore, there was no justification to make any addition under section 68. There is no evidence on record that assessee paid any amount on account of commission for arranging any transaction because it was a genuine transaction between the parties. Therefore, there is no justification to make the addition under section 69C of the I.T. Act as well. In view of the above, we set aside the Orders of the authorities below and delete the entire additions in all the assessment years under appeals Addition on account of the bogus purchases out of books sales and suppressed profit - HELD THAT:- The books of accounts were duly audited as per the companies act and as per the income tax act. No defects in such books were found either by the learned assessing officer or by the learned CIT A. Based on the information furnished by the assessee the learned assessing officer proceeded to make an addition at the rate of 25% of such purchases without conducting any enquiry. In the deviation proceedings, the learned assessing officer after scrutiny of the books of accounts, appraisal report and statement of the managing director of the company, which was retracted, held that no such addition should have been made. In the remand proceedings, also the AO held that on enquiry also made on test check basis of the 50% of the items got confirmed - on perusal of the deviation report and appraisal report that 4 the concluded assessment is no incriminating evidences were found. 25% of the purchases from the alleged bogus parties without finding any evidence and ignoring the sales paid by them to the assessee. Further, the learned CIT A applied the provisions of section 145 (3) of the income tax act by rejecting the books of accounts of the assessee partially, without even looking at the books of accounts is also incorrect. In view of this the addition made by the learned assessing officer for all those years on account of bogus purchases deserves to be deleted for concluded assessment as well as pending assessments. Addition u/s 68 on account of cash deposited in banks post demonetization - HELD THAT:- As per retraction letter dated 24/3/2017 of the managing director of the company which was submitted on 31/3/2017 where assessee has revised its disclosure from INR 50 crores to INR 30 crores under PMGKY. There is no whisper of further recording the statement of the managing director to show how the original disclosure was incorrect. In fact, revenue accepted the revised disclosure made by the managing director. In view of above facts the additions sustained by the learned CIT A of INR 73.13 crores are deleted thus ground number 5 of the appeal of the assessee for assessment year 2017 18 is allowed.

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• 2019 (11) TMI 147
  Exemption u/s 10AA - Gain from foreign currency - treating gain from foreign exchange fluctuation as income from other sources - HELD THAT:- We find that there is no dispute to this fact that the alleged amount is the net of gain/loss of the foreign currency received during the year from the revenue operations carried out by the assessee in the Special Economic Zone units running at Hyderabad and Pune. Therefore the issue is squarely covered by the judgment in the case of Sutlej Cotton Mills Ltd [ 1978 (9) TMI 1 - SUPREME COURT] and the CIT(A) has rightly deleted the addition treating the amount as part of relief eligible for exemption u/s 10AA. Even otherwise the assessee is required to pay tax on the book profit u/s 115JB of the Act and the alleged amount has already been added in the book profit and thus subjected to tax. This fact has also been highlighted in the finding of Ld. CIT(A). We therefore in the facts and circumstances of the case and respectfully following the judgment of Hon ble Supreme Court, find no reason to interfere in the finding of Ld. CIT(A). Accordingly Ground No.1 of the revenue stands dismissed. Attribution of salary of staff to the SEZ units - Disallowance of salary expenditure wrongly claimed by the assessee as part of Non SEZ units - HELD THAT:- The correct fact is that out of the 8 employees mentioned by the Ld. A.O, salary of 5 employees already stands debited to the SEZ units and the exemption has been claimed on the profits arrived after deducting the expenses of salary of the 5 employees to whom the total amount was paid. Further the Ld. A.O has made the impugned disallowance without bringing any detail on record so as to prove that the alleged salary was payable in the non SEZ units. The assessee s books of accounts are duly audited and it has bifurcated the salary expenses correctly under non SEZ units and SEZ units. In the case of the assessee for the determination of ALP in specified domestic transactions reference could have been made to the TPO but certainly the Ld. A.O has no power to make such disallowance. As per the provision of Section 92BA of the Act for the year under appeal the domestic pricing transfer provisions could apply if the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of ₹ 5 crores. But in the instant case the specified domestic pricing figure is ₹ 3,46,13,572/- which is less than ₹ 5 crores hence the provision of Section 92BA of the Act does not apply. A.O adopted wrong facts treating the salary debited to SEZ units at ₹ 2,12,90,094/- as salary debited to non SEZ units which makes the very basis of alleged disallowance incorrect. CIT(A) has rightly appreciated the facts and deleted the proportionate disallowance of salary expenditure of ₹ 2,07,68,143/-. We thus find no infirmity in the finding of CIT(A). Ground No. 2 3 of the revenue s appeal stands dismissed. Calculation of book profit u/s 115JB - HELD THAT:- It is an established proposition that for computing the book profit u/s 115JB of the Act limited scope is available with A.O to just refer to explanation No.1 of Section 115JB of the Act and make the adjustments of items mentioned therein if not made by the assessee. In the instant case A.O seems to have acted beyond the provisions laid down in Section 115JB and has made the adjustment to the book profits computed as per Companies Act, of the items not appearing in the explanation 1 of Section 115JB. A.O grossly erred in making the additions to the book profits without properly applying the provisions of section 115JB of the Act. Thus no addition of the alleged amounts ought to have been made to the book profits for the purpose of computing tax liability u/s 115JB of the Act. No interference is thus called for in the finding of Ld. CIT(A).

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• 2019 (11) TMI 146
  Addition u/s 68 - unsecured cash credit - shift of the onus on to the Department to prove addition - HELD THAT:- We should not forget the fact that out of the said four parties, one party namely M/s Radhey Krishna Gems Pvt. Ltd. filed copy of confirmation along with copy of ITR and relevant pages of the bank statement, in response to the notice u/s 133(6) issued by the AO. As is crystal clear from the above, there was no sufficient time before the AO to establish the ingredients contained in section 68 of the Act in respect of the remaining three parties. It is well settled that in order to discharge the onus, the assessee must prove the following (i) the identity of the creditor, (ii) the capacity of the creditor to advance money ; and (iii) the genuineness of the transaction. After the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts to the Department as held in Shankar Ind v. CIT [ 1985 (1) TMI 104 - ITAT CALCUTTA-D] The mere furnishing of particulars as held in CIT v. Precision [1993 (6) TMI 17 - CALCUTTA HIGH COURT] or the mere fact of payment by an account payee cheque as held in CIT v. United [ 1989 (5) TMI 18 - CALCUTTA HIGH COURT] or the mere submission of a confirmatory letter by the creditor as held in CIT v. Mahim [ 1994 (11) TMI 88 - KERALA HIGH COURT] is, by itself, not enough to shift the onus on to the Department, although these facts may, along with other facts, be relevant in establishing the genuineness of the transaction. As mentioned hereinabove, the new address along with full compliance was made by the assessee before the AO vide letter dated 22.03.2016. The AO completed the assessment u/s 143(3) on 30.03.2016 as it was getting time-barred. The Ld. CIT(A) should have appreciated the paucity of time before the AO to conduct further inquiries. Out of the said four parties, one party namely M/s Radhey Krishna Gems Pvt. Ltd. filed copy of confirmation along with copy of ITR and relevant pages of the bank statement, in response to the notice u/s 133(6) issued by the AO. The onus shifted to the AO. The AO failed to conduct any enquiry to verify the genuineness of the transactions with the above party. The addition made by the AO in respect of M/s Radhey Krishna Gems Pvt. Ltd is hereby deleted. However, following the ratio laid down in NRA Iron Steel (P.) Ltd. [ 2019 (3) TMI 323 - SUPREME COURT] Jansampark Advertising Marketing (P.) Ltd. [ 2015 (3) TMI 410 - DELHI HIGH COURT] we set aside the order of the Ld. CIT(A) in part and restore the matter to the file of the AO to make an order afresh in respect of the remaining three parties, after allowing reasonable opportunity of being heard to the assesse. We direct the assessee to file the relevant documents/evidence before the AO - Revenue appeal is partly allowed for statistical purposes.

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• 2019 (11) TMI 145
  Claim of depreciation on purchase of new Weaving Looms - HELD THAT:- On appreciation of facts in totality, we find the claim of the assessee towards depreciation of new Looms to be maintainable. It is not in dispute that new Looms were purchased during the financial year and were delivered in the premises of the assessee company. The facts and circumstances of the case shows that new Looms were ready for actual use even if it is momentarily presumed that actual productions were not carried out. On the conspectus of facts, where the asset was ready for use, depreciation ought to have been allowed. Be it as it may, the entire exercise is revenue neutral when seen holistically over years and therefore no adverse inference is required to be drawn. The action of the Revenue authorities is accordingly set aside and the claim of the depreciation is allowed. As regards claim towards transport and labour charges, it is submitted on behalf of the assessee that it has claimed the aforesaid expenses as revenue item whereas the Revenue has capitalized the same to the cost of the new Loom as same has been incurred for the purposes of transportation of new Looms to the factory premises. We do not find error in the action of the Revenue for capitalization of transport expenses. Having regard to the fact that transport and labour charges form part of the actual costs of new Looms, the assessee would thus be allowed benefit of depreciation on this count as well, as claimed in the alternative on behalf of the assessee. AO is accordingly directed to allow depreciation allowance on transport and labour charges component in accordance with law. The claim of the assessee is accordingly allowed in part.

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• 2019 (11) TMI 144
  Computation of deduction u/s 10A(4) - Not assessing the bank interest on short term export surplus deposits as Business income - HELD THAT:- We are of the considered view that the interest earned on short term export surplus deposit has to be treated as Business income for the purposes of computation of deduction u/s 10A(4) of the Act. Ground No. 1 is accordingly allowed. Disallowance of legal and professional fee and foreign taxes - Allowable revenue expenses - HELD THAT:- Expenses towards registration of stamp duty and legal expenses incurred in connection therewith have to be considered in the light of the provisions of section 37(1) of the Act. The Hon'ble Bombay High Court in the case of Cinecita Pvt Ltd [ 1982 (2) TMI 58 - BOMBAY HIGH COURT] has held The impugned expenditure did not involve any element of premium in the amount claimed as expenditure. It was incurred only to draw up and get registered an effective and proper lease deed and would have remained the same irrespective of the period of lease as long as it was more than one year. Further, the period of lease itself could not be decisive of the question whether the asset was of enduring nature. On these facts, the impugned expenditure was revenue in nature. A similar view was taken in the case of Hoechst Pharmaceuticals Ltd [ 1977 (11) TMI 55 - BOMBAY HIGH COURT] and in the case of Octavious Steel and Co. Ltd [ 1995 (4) TMI 11 - CALCUTTA HIGH COURT] . Considering the nature of expenditure in the light of the judicial decisions, legal expenses have to be allowed u/s 37(1) of the Act. We order accordingly. In so far as the claim of expenditure of legal and professional fees the facts on record show that this amount was deducted by overseas customer while releasing payment against invoices raised by the assessee. The deduction was on account of turnover taxes. In our considered opinion, this deduction by overseas customer is not a tax on profit of business as such but on the applicable laws of those countries. The assessee is very much entitled to deduction in respect of such expenditure u/s 37(1) - assessee has recorded the sales on gross basis, i.e. invoiced amount has been taken as sales, therefore, any deduction from invoiced amount has to be allowed as deduction from business income of the assessee. Ground No. 2 is allowed.

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• 2019 (11) TMI 143
  Disallowance of bogus purchases @ 12.5% of bogus/hawala dealers/non-existent vendors - HELD THAT:- AO has not disputed the sales of the assessee. AO solely relied upon the report of Investigation Wing of Sale Tax Department. CIT(A), the assessee urged that the purchases shown by assessee are genuine. The payments of purchases were made through account payee cheques. The goods were received by assessee and quantitative details and corresponding sales were shown to the AO. Though, the assessee fairly stated that they are unable to produce the supplier for verification. Also urged that the assessee has paid sale tax on behalf of the dealers and relied upon the decision of Hon ble Gujarat High Court in Simith P. Seth [ 2013 (10) TMI 1028 - GUJARAT HIGH COURT] . CIT(A) after considering the material placed before him and the ratio of the decisions including the decision of Simith P. Seth (supra) concluded that it has been held by various Courts that where assessee could show that he has made purchases and there are corresponding sales against the purchases, in such circumstances, it is appropriate to tax the possible profit of such purchase from non-genuine parties. CIT(A) restricted the disallowance to 12.5% of the purchases. CIT(A) after considering the material and the various decision of superior courts arrived on a fair conclusion, which we affirm. Even otherwise the revenue authority is required to tax the profit earned by the assessee on such bogus purchases and not the entire transaction. - Decided against revenue.

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• 2019 (11) TMI 142
  Levy of penalty u/s. 271D - assessee had accepted the amount and offered it for tax as income by revising its return of income originally filed - HELD THAT:- In Standard Brands Ltd. [ 2006 (7) TMI 126 - DELHI HIGH COURT] HC has held that the Revenue could not, on the one hand, contend that the amount was undisclosed income in the hands of the assessee and, at the same time, seek to initiate the proceedings against the assessee for alleged violation of the provisions of section 269SS of the Act; and that the Revenue having taken the stand that the income was undisclosed income in the hands of the assessee, it could not resort to the proceedings u/s. 269SS r.w.s 271D of the Act. In Diwan Enterprises [ 1998 (11) TMI 27 - DELHI HIGH COURT] where the assessee had surrendered the amount of alleged loan as its income, and the A.O. had accepted the surrendered amount and had treated it as the income of the assessee, the Hon ble Delhi High Court has held that the A.O. cannot treat the amount as a loan for the purpose of section 269SS r.w.s. 271D of the Act and levy penalty; and that the amount having ceased to be a loan, the very foundation for initiating the proceedings, for and levying the penalty u/s. 271D was lost. Also see R. P. Singh Co. (P.) Ltd. [ 2010 (9) TMI 863 - DELHI HIGH COURT] as held that once the A.O. has treated the share application money received by the assessee in cash, as undisclosed income of the assessee, he could not have proceeded on the basis that it was deposit; and that there was no question of levy of penalty u/s. 271D - Decided in favour of assessee.

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• 2019 (11) TMI 141
  Disallowance of expenses incurred in earning income which does not form part of total income under Chapter III u/s 14A - HELD THAT:- Disallowance u/s. 14A of the Act in the present assessment year should also be restricted to the income earned by the assessee, which does not form part of the total income under the Act, which is a sum of ₹ 4,11,628 being dividend income exempt u/s. 10(34) (35) of the Act and long term capital gain of ₹ 2,06,84,487 earned on sale of Kotak shares which is exempt u/s. 10(38) of the Act. We hold and direct accordingly.

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• 2019 (11) TMI 140
  Shortage of physical cash-in-hand - Difference in cash balance appearing in the books of the appellant and in hand - survey action u/s 133A - unaccounted purchase of jewellery - HELD THAT:- Cash shortage can be given against the unaccounted purchase of jewellery. Revenue did not have any evidence to show that the short cash was utilized elsewhere. Following the parity of reasoning, the said issue should be allowed in favour of the assessee. Therefore, it is directed to the AO and the CIT(A) to delete the entire addition made on account of unaccounted purchase of jewellery as well as cash shortage. Thus, the ground no.2 raised by the assessee is allowed.

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• 2019 (11) TMI 139
  Pro-rata deduction u/s. 80IB(10) on a housing project developed by the assessee - assessee has violated conditions of clause (e) and (f) of section 80IB(10) of the Act in respect of two flats out of entire project - HELD THAT:- Undisputedly, the assessee has violated conditions set out in clause (e) and (f) of section 80IB(10) in respect of only two flats. The Commissioner of Income Tax (Appeals) has granted proportionate deduction u/s. 80IB(10) in respect of remaining housing project. The Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. M/s. Vandana Properties [ 2012 (4) TMI 54 - BOMBAY HIGH COURT] has approved the concept of proportionate deduction u/s. 80IB(10) of the Act. The Hon ble Madras High Court in the case of Viswas Promoters Private Limited Vs. Assistant Commissioner of Income Tax [ 2012 (11) TMI 1117 - MADRAS HIGH COURT] has held that the assessee is eligible to claim proportionate relief on the units of a housing project satisfying the conditions laid down u/s. 80IB(10) of the Act. Thus, the Hon ble High Court upheld allowability of proportionate deduction u/s. 80IB(10) of the Act. The Tribunal in various decisions has been consistently allowing proportionate deduction to the extent housing project complies with all the conditions under the provisions of section 80IB(10) We find no infirmity in the order of Commissioner of Income Tax (Appeals) in allowing proportionate deduction u/s. 80IB(10) of the Act on eligible units of housing project. The impugned order is upheld and the appeal of Revenue is dismissed being devoid of any merit.

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• 2019 (11) TMI 138
  Allowable business expenses/loss - compensation expenses attributable to unsold part of land - HELD THAT:- There is no dispute regarding genuineness of the payment. In this view of the matter there is no accounting mandate that business expenditure incurred need to be allocated to the entire cost of land which is in stock of assessee to artificially increase the cost. In fact this is not sustainable as per accounting principle as the compensation paid has not been incurred for acquisition of land. The value of land is the cost incurred and other incidental expenses incurred for acquisition of land. The work-in-progress in this regard would be development activity done, which enhance the value of land. By no stretch of imagination the compensation paid for breach of contract can be treated as development activity in the land. There is no concept of deferred revenue expenditure in tax laws. If the expenditure incurred is revenue in nature the same has to be allowed as expenditure/loss and the same is not to be allocated over some years. Decision of Vatika Town Ships P. Ltd. [ 2013 (6) TMI 622 - ITAT DELHI] (to which one of the Accountant Member was a party) is fully applicable in the facts of the case wherein as held that when advances are returned alongwith interest, for booking of plots, when deal could not be materialized the compensation paid was business expenditure. This decision has been elaborately quoted by learned CIT(A) in his order reproduced above. Similarly, Hon'ble Delhi High Court in the case of CIT Vs. Bhagwan Das Rameshwar Dayal [ 1984 (5) TMI 35 - DELHI HIGH COURT] has held that damages paid on account of breach of contract are normal loss incidental to business. There is no infirmity in the order of learned CIT(A) that the compensation paid by the assessee is business expenditure/loss and the same is allowable in the present assessment year itself. - Decided against revenue

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• 2019 (11) TMI 137
  Reopening of assessment u/s 147 - assessment has been reopened solely on the basis of information received from Pr. DIT(Inv.), Ahmedabad - Non independent application of mind - HELD THAT:- Assessment has been carried away by the report of the investigation wing without making any independent verification to justify the reopening. The Hon ble High Court of Bombay in the case of Coronation Agro Industries Ltd. vs DCIT [2017 (1) TMI 904 - BOMBAY HIGH COURT] had an occasion to consider an identical issue with identical set of facts has held that notice u/s 148 of the Act is without jurisdiction Reasons recorded for reopening of the assessment are devoid of any independent application of mind by the AO and therefore, the notice issued u/s 148 of the Act deserves to be quashed. - Decided in favour of assessee.

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• 2019 (11) TMI 136
  Addition u/s. 40A(3) - submission of the assessee that certain payments were made in non banking hours in the late evening and certain payments were made on a date when bank was closed and the hotel booking was urgently required - Also certain payments were made to a number persons where each payment was below ₹ 20,000/- - HELD THAT:- In our opinion the Assessing Officer has not properly considered the factual aspect and has suddenly jumped to the conclusion for violation of section 40 A(3). Thus we deem it proper to restore the issue to the file of the Assessing Officer with a direction to go through the above details and decide the issue as per fact and law after giving due opportunity of being heard to the assessee. While doing so the Assessing Officer shall also consider the payments made on a day when the bank was closed or where the payments have been made to various persons where each payment is below ₹ 20,000/-. Grounds raised by the assessee is allowed for statistical purpose.

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• 2019 (11) TMI 135
  Penalty u/s.271(1)(c) - Defective notice - non striking of irrelevant words in Notice - HELD THAT:- Assessing Officer has issued notice under section 274 r.w.s. 271(1)(c) of the Act dated 28.02.2014 without striking off the irrelevant words, the penalty proceedings show a non-application of mind by the Assessing Officer and is, thus, unsustainable. The facts of the present appeal are identical to the facts of the case before the Hon'ble Supreme Court in the case of SSA's. Emarld Meadows [ 2016 (8) TMI 1145 - SC ORDER] and, therefore, the decision of Hon'ble Supreme Court squarely applies to the case of the assessee. Hence, respectfully following the same, we set aside the order passed by the CIT(A) and cancel the order of the Assessing Officer levying penalty - Decided in favour of assessee.

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• 2019 (11) TMI 134
  Rectification u/s 254 - ALP determination - Review or rectification - HELD THAT:- Assessee is not co-operating with authorities including tribunal and now hyper technical approach of hair splitting of the appellate order dated 16.06.2017 of the tribunal is done by the assessee in this MA and raising hyper technical pleas were done to somehow wriggle out of tribunal order dated 16.06.2017 by succeeding in somehow getting the appellate order dated 16.06.2017 passed by the tribunal recalled. One more feeble plea is raised by learned counsel for the assessee that the assessee was not exactly told by the Bench as to which all agreements were to be produced before the Bench at the time of hearing of the appeal . This clearly reveals and demonstrate the desperation of the assessee to somehow get the well reasoned detailed order dated 16.06.2017 passed by the tribunal recalled under the garb of this MA. The fact of the matter is that these agreements were entered into by the assessee to undertake various transactions during the impugned ay and in order to prove its contentions that only net revenue is to be considered while computing ALP and the so called claimed passed through costs are to be reduced from gross revenue to arrive at net revenue which is to be considered for determining ALP, the onus is on the assessee to produce relevant evidences to support its contentions. The said onus never get discharged. The next attempt is made in this MA to show that tribunal order dated 16.06.2017 was passed beyond 90 days and hence this order needed to be recalled. It is admitted by the assessee that the aforesaid appellate order dated 16.06.2017 passed by the tribunal was received on 25.07.2017. Merely because the appellate order dated 16.06.2017 passed by the tribunal was received by assessee on 25.07.2017 , a presumption is drawn by the assessee of its own that the appellate order was passed by the tribunal beyond 90 days , which later rightly stood corrected by assessee of its own during the course of hearing in MA when confronted with factual matrix of the case by not pressing too far this plea during the course of hearing before the Bench of this MA. It is also observed that further pleas are raised by assessee in this MA applications on merits of the issue which are infact an attempt to get the decision of the tribunal reviewed which is beyond the purview of limited scope of Section 254(2) as it is well settled that scope of provisions of Section 254(2) is limited to correcting mistakes apparent from records and the tribunal is debarred from reviewing its own decision while deciding MA. There is no need for us to go into these pleas challenging decision of the tribunal dated 16.06.2017 on merits of the issues as it is beyond limited scope of Section 254(2) of the 1961 Act as otherwise it will lead to reviewing of its own decision by the tribunal in MA which is not permissible

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• 2019 (11) TMI 133
  Additional depreciation as claimed on capital subsidy which was required to be deducted from the cost of fixed assets - HELD THAT:- In the present case it is an admitted fact that the A.O. reduced the total amount of subsidy of ₹ 32,59,741/- whereas the claim of the assessee is that the amount of ₹ 10,04,264/- was only received, the same was to be deducted from the cost of fixed assets and that no additional depreciation was to be worked out since the machinery was not purchased in the year of receipt of the subsidy where as the additional depreciation was allowable only in the year in which the machinery was purchased. The aforesaid claim of the assessee requires verification, therefore considering the totality of the fact deem it appropriate to set aside this issue back to the file of the A.O. to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. Calculation of the book profit u/s 115JB - not deducting the amount of Capital Subsidy from the book profit - HELD THAT:- A.O. considered the Subsidy as capital receipt and reduced it from the cost of assets therefore it was not chargeable to tax at all under any head of the income, then it could not have been treated as part of the Net Profit as per Profit Loss Account, so could not have been held to be taxable as book profit under MAT in terms of Section 115JB of the Act. So respectfully following the case of M/S. JSW STEEL LIMITED, (FORMERLY KNOWN AS JINDAL VIJAYNAGAR STEEL LIMITED) [ 2017 (4) TMI 47 - ITAT MUMBAI] this issue is decided in favour of the assessee.

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• 2019 (11) TMI 132
  Disallowance u/s 14A read with Rule 8D(2) - HELD THAT:- We should direct the Assessing Officer to give effect to the said direction of the CIT(A) by passing a speaking order after considering the principle of proportion , principle of presumption and the Jurisdictional High Court s judgement in the cases of (i) CIT vs. Reliance Utilities Powers Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT ] and (ii) HDFC Bank Ltd. vs. CIT [ 2016 (3) TMI 755 - BOMBAY HIGH COURT ] etc. Accordingly, the Assessing Officer is directed to pass a speaking order in a time bound manner within the three months from the date of pronouncement of this order after granting a reasonable opportunity of being heard to the assessee. Accordingly, the issue relating to the applicability of the proportions under clause (ii) of Rule 8D(2) of the Rules is allowed for statistical purposes. Applicability of the provisions of clause (iii) of Rule 8D(2) of the Rules - HELD THAT:- Assessee did not have much to argue in this respect except relying on the ground. On perusal of the order of the CIT(A), we find the CIT(A) rightly complied with the provisions of the said clause (iii) of Rule 8D(2) of the Rules. Therefore, we find no reasons to interfere with the same. Accordingly, the relevant ground on this issue stands dismissed.

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• Customs

• 2019 (11) TMI 130
  Applicability of N/N. 24/2015-2020 and 25/2015-2020, dated 25th August, 2017 - applicability of notification to gold coins, imported by the petitioners - HELD THAT:- It is declared that the impugned Notification Nos. 24/2015-2020, dated 25th August, 2017 and 25/2015-2020, dated 25th August, 2017, and Public Notice No. 20/2015-2020 issued by the DGFT, would not apply to the gold coins, imported by the petitioners in these writ petitions, which had left the Republic of Korea on 25th August, 2017. Inasmuch as the gold coins already stand provisionally released, no order for release thereof is required to be passed; however, the Bonds executed by the petitioner, pursuant to the order dated 14th September, 2017 of this Court, shall stand discharged. Petition allowed.

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• 2019 (11) TMI 129
  Valuation of imported goods - import of multiplexers, satellite receivers, test and measurement equipments, computers, software and rack - rejection of declared value - items together constituted Headend for Cable TV operations - classification of the item - whether classifiable under heading 85438999 or not - inclusion of freight and insurance charges in assessable value - HELD THAT:- The issue is squarely covered by the decision of CESTAT Delhi bench in the appellants own case BRIGADIER R DESHPANDE, M/S. INDUSIND MEDIA COMMUNICATION. LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [ 2017 (11) TMI 1343 - CESTAT NEW DELHI] where it was held that the imported goods are rightly classifiable under 8525. It is evident that exactly identical imports were affected by the appellants from Delhi and Mumbai. Even the quantities, unit value and FOB value as per the six invoices filed in respect of the imports made at Delhi and Mumbai was identical. Hence the issue as decided by the tribunal in case of Delhi imports will squarely cover the imports made at Mumbai. Since we find that the issue is squarely covered by the said decision in case of appellant themselves we follow the said decision and remand the matter back to adjudicating authority for re-computation of differential duty and penalties to be imposed in light of re-computed duty liabilities - appeal allowed by way of remand.

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• 2019 (11) TMI 128
  Classification of imported goods - second hand/ used Casino Ship M V Majesty - whether classified under 8901? - HELD THAT:- It is settled law that imported goods are to be assessed in the form and manner in which they are imported and presented for assessment/clearance to the Customs authority at the port of importation for the clearance - Hence the classification of the imported goods needs to be determined in accordance with the form in which they were presented for assessment to the customs authority, and not in the form they were designed and in the form they earlier existed. From the examination report reproduced above it is quite evident that casino games have been fitted on all the three decks of the vessel, and the layout of the decks including those of chairs and stools on the deck was to facilitate the playing of those casino games. Once the vessel is fitted with such casino games across the entire three decks with no regular seating plan etc., the same cannot be called a passenger ship. It is also not case of appellant that there is a fare charged by the appellant for the voyages that can be undertaken on the vessel imported. It is settled law that classification of goods under the Customs tariff is to be determined by the Custom Authorities and for determining the classification the Custom Authorities are bound by the Terms of Entries in the Tariff, Rules of Interpretation and decisions rendered by the competent courts in relation to the interpretation of tariff. The view taken by other authorities acting under other Acts and Legislation may have persuasive value for determining the classification under the Customs Tariff but cannot be termed as in any case binding on the Customs Authority for determining the classification. For determining the classification of the imported vessel will be as to what would be the usage of such vessel. If this question is put to the person who goes to the vessel and his response is that he visits the vessel for playing casino games and not for cruise/ voyage then the vessel is definitely a pleasure vessel for the purpose of classification under Custom Tariff - In the present case examination report clearly suggests that on all the three decks of vessel are fitted casino games and the entire layout was to facilitate the playing of such games without any regular arrangement/ seating plan for carriage of passengers. From the scheme of Chapter 89 of the Customs Tariff it is clearly evident that the Chapter has been totally aligned with HSN upto six digit level. Appeal dismissed - decided against appellant.

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• 2019 (11) TMI 127
  Classification of goods - Electronic Sensor Paver Vogel Model 1800-2 with AB 600-2-TV for laying bituminous pavement upto 9 meters along with multiplex big SKJ and its accessories - classified under CTH 84306100 or not? - N/N. 621/2002-Cus dated 01.03.2002 as amended - HELD THAT:- The issue in the present case is squarely covered by the decision of the Hon ble Apex Court in case of M/S GAMMON INDIA LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2011 (7) TMI 17 - SUPREME COURT] , where it was held that since in the instant case the language of condition No.38 in the Exemption Notification is clear and unambiguous, there is no need to resort to the interpretative process in order to determine whether the said condition is to be imparted strict or liberal construction. The issue is squarely covered against the appellants. However appellants do not dispute the same but have relied upon subsequent clarification issued by the Joint Secretary (TRU) clarifying that benefit of similar exemption notification would be admissible to the constituents of the consortium. Appeal dismissed - decided against appellant.

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• Insolvency & Bankruptcy

• 2019 (11) TMI 126
  Admissibility of application - initiation of CIRP - Restoration of non-existent Company (Corporate Debtor) - the name of M/s. Elektrans Shipping Private Limited (Corporate Debtor) was struck off by the Registrar of Companies on 12th September, 2018 in exercise of powers conferred by Section 248 of the Companies Act, 2013 - Section 9 of the I B Code - HELD THAT:- Similar issue decided in the case of MR. HEMANG PHOPHALIA VERSUS THE GREATER BOMBAY CO-OPERATIVE BANK LIMITED AND M/S. PENGUIN UMBRELLA WORKS PRIVATE LIMITED [ 2019 (9) TMI 893 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI ] where it was held that The name of the Company having been struck-off, the Corporate Person cannot file an application under Section 59 for Voluntary Liquidation. In such a case and in view of the provisions of Section 250 (3) read with Section 248 (7) and (8), we hold that the application under Sections 7 and 9 will be maintainable against the Corporate Debtor , even if the name of a Corporate Debtor has been struck-off. Appeal dismissed.

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• 2019 (11) TMI 125
  Admissibility of application - initiation of CIRP - Operational Creditor - Corporate Debtor - HELD THAT:- 1st Respondent has not disputed that it had no arrangement or agreement with M/s. Global Energy Talent Private Limited , an Indian entity shown as Corporate Debtor and had settled the matter with M/s. Global Energy Talent, Mauritius , it appears to us that the application under Section 9 was filed by 1st Respondent with malicious intention for purpose other than for the resolution of insolvency, or liquidation of M/s. Global Energy Talent Private Limited , as liable for action under Section 65 of the I B Code . The matter is also remitted to the Adjudicating Authority to decide whether any order is required to be passed against Mr. Mohamed Hesham Mohamed Amin Basha Mashaa l under Section 65 of the I B Code on the ground that the application was filed by him fraudulently with malicious intention for purpose other than for the resolution of insolvency, or liquidation - Appeal allowed.

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• Service Tax

• 2019 (11) TMI 124
  Valuation - completion and finishing services - inclusion of value of materials consumed while providing the finishing services - Department was of the view that the appellants failed to include the value of materials consumed by them while providing the finishing services - allegation in the SCN is that the appellants have only consumed materials in execution of completion and finishing works and that there is no transfer of property in goods - method adopted by the assessee for determining the value for payment of Service Tax under Works Contract Service. HELD THAT:- Rule 2A continues after 2012 also and the Composition Scheme has been replaced and inbuilt in the Rules itself in a different form whereby the service portion in Works Contract is specified at a percentage of gross value based on the nature of activities on which normal Service Tax rate applies instead of a lower composition rate on the gross value under the erstwhile composition scheme. Thus, the principle of valuation of taxable service under the amended provisions also remains the same. The appellant has arrived at the value of service portion of Works Contract Service as per Rule 2A (i) whereas the Department has proceeded to arrive at the value as per Rule 2A (ii) for the period after 01.07.2012 and under the Composition Scheme for the period prior to 01.07.2012. Rule 2A (ii) would apply only if the value is not determined under clause (i). The appellant in the present case has arrived at the value and also paid VAT as per the VAT Law. The value of transfer of property in goods has to be arrived at on the basis of purchase price of various goods, apportionment of overheads and profit margin. The appellant, being an assessee under the VAT Law, has to abide by the state law for payment of VAT. Thus, he can only arrive at the value of goods used in the Works Contract by applying the VAT Law after deducting the value arrived for payment of VAT; the remaining portion has been subjected to payment of Service Tax. When VAT has already been paid on the value of goods, the same cannot be subjected to levy of Service Tax again. The Hon ble Apex Court in the case of SAFETY RETREADING COMPANY (P) LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM, M/S TYRESOLES INDIA PRIVATE LMITED VERSUS THE COMMISSIONER OF CENTRAL EXCISE, GOA AND M/S LAXMI TYRES VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2017 (1) TMI 1110 - SUPREME COURT] has held that the assessee is liable to pay Service Tax only on the service component, which under the State Act was quantified at 30%. It was held that the assessee is not liable to pay Service Tax on the total amount for retreading including the value of materials/goods that have been used and sold in execution of the contract. The appellant has correctly discharged Service Tax on the service portion. The demands therefore cannot sustain - Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2019 (11) TMI 123
  CENVAT Credit - common input, input services used in dutiable goods (sugar and molasses) as well as exempted goods (bagasse and electricity) - Rule 6 (3A) of the Cenvat Credit Rules - N/N. 23/2004-CE (NT), dated 10th September, 2004. Is the CESTAT correct in holding that as electricity is not excisable, Rules 6(2) (3) of the CENVAT Credit Rules, 2004 are not applicable and consequently input credit is admissible in the facts and circumstances of the case? HELD THAT:- The point on which the learned Tribunal has decided the appeal is a point of law, i.e., the excisability, or otherwise, of electricity. It is required to be decided on the basis of the prevalent statutory position, as reflected in the Act, read with the Tariff and the law laid down on the point, and is not dependent on adjudication of any disputed question of fact. Statutorily, therefore, there is no escape from the position, in law, that electricity , or electrical energy , is excisable. The Supreme Court has, in UNION OF INDIA VERSUS DSCL SUGAR LTD. [ 2015 (10) TMI 566 - SUPREME COURT] clearly held that bagasse is not an excisable item and, that, therefore, a demand under Rule 6 of the Cenvat Credit Rules, on the ground of sale of electricity generated from bagasse, could not sustain - The inevitable sequitur of the discussion is that the decision of the Tribunal, to allow the appeal of the respondent on the basis of the judgment of the High Court of Allahabad in GULARIA CHINI MILLS AND OTHERS VERSUS UNION OF INDIA AND OTHERS [ 2013 (7) TMI 159 - ALLAHABAD HIGH COURT] , was justified, albeit for the reason that, as the electricity sold by the respondent was generated entirely from bagasse, and bagasse itself was in the nature of non-excisable waste/residue, no demand, posited on Rule 6(3)(i) of the Cenvat Credit Rules, could sustain against the respondent. The question of law, framed answered in the affirmative, and against the Revenue - Appeal dismissed.

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• 2019 (11) TMI 122
  Clandestine removal - SS Ingots - cross examination of the witnesses - production capacity of respondents - matching of actual production with electricity consumption and fuel consumption - Section 35H of the Central Excise Act, 1944 - HELD THAT:- It appears that there are allegations about production capacity of the respondent. As per Department appellant, production capacity of the respondent of SS Ingots is 13,580 MT per annum whereas as per respondent and the evidences led by the respondent with the help of Engineer Certificate dated 1st July, 2008 the production capacity of the respondent of SS Ingots is 1963 MT per annum. There are allegations and counter allegations about the DG Set transformers and the crucible furnaces. Be that as it may, the fact remains that the order passed by the CESTAT is on appreciation of the evidences on record and this appellant is in search of re-appreciation on record. Hence, it cannot be said that any substantial question of law is involved - Much has been argued out by the counsel for appellant about the procurement of the documentary evidences like a kutcha receipt of sale from the computer which was found in custody of Mr. Sahu. There is already an appreciation of facts done by CESTAT while pointing out that this appellant has failed to prove the production of SS Ingots, sale of SS Ingots and procurement of the raw material. So far as procurement of the raw material is concerned, there is no convincing evidence on record, as stated by CESTAT which requires interference by CESTAT to the Order-in-Original dated 10th October, 2013 and therefore, we see no reason to re-appreciate those evidences on record. This appellant has failed to prove the clandestine removal of the final product. Even otherwise, all the arguments of this appellant is based upon re-appreciation of the evidence by the CESTAT. The CESTAT is the final fact finding authority, and in matters such as this, an appeal lies, from the final order of the CESTAT, to this Court, only on substantial questions of law. Matters involving appreciable evidence ordinarily, would not involve substantial question of law, as this Court, in exercise of its powers conferred by Section 35H of the Act, is not empowered to re-appreciate evidence, which has already been appreciated by the CESTAT. There is nothing to indicate compliance with the strict stipulations contained in subsections (1) and (2) of Section 36B of the Act in the present case. There are no reason to interfere with the findings of the CESTAT regarding non-compliance of Section 36B of the Act either - there are no substantial question on law is involved in this Central Excise Appeal - appeal dismissed.

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• 2019 (11) TMI 121
  Valuation/undervaluation - Plywood, Veneer etc. manufacture and cleared by the appellants - confirmation of demand only on the basis of records recovered from the Dealers of the Appellant in Bangalore viz., The Veneers and Space System Agencies - genesis of the case is in the investigation conducted by the officers of DGCEI against these companies subsequent to such searches conducted at various premises on 30/03/2005. The Department presents evidence in the form of diaries, registers, note books, private records/slips recovered from the premises of M/s. The Veneers Bangalore and M/s. Space Systems and Agencies both belonging to Shri G. Suryanarayana and the statement of several other persons recorded - Preponderance of probability. HELD THAT:- The evidence made available by the Department in the form of record registers, diaries which are explained by the person from who possession the same have been recovered. Ongoing through the various records and the statements of the different persons, though retracted at a later stage, we find that the fact that there is under-valuation in the trade of the impugned products - We find that on the one hand, the Department tries to put down the pieces of evidence as an impregnable concrete defence to substantiate the allegation of under-valuation, defence attempts to wash it of saying it s a third-party evidence and as such, it cannot be relied upon and on the one hand, Sh. T.P. Haneefa, looking after the affairs of the company has denied any knowledge of payments over and above and on the other hand, the so-called confirmatory statements were retracted during the cross-examination - We find that DGCEI has made a series of cases against manufacturers of Veneers and Plywood across South India. Some cases have travelled up to the Tribunal on adjudication. Understandably, we are dealing with a case of tax-evasion and not a criminal case wherein the degree and standard of evidence is much higher and more precise. As far as the tax-evasion cases are concerned, we find that the principle of pre-ponderance of probability has precedence over proof beyond doubt. It is widely accepted that 'Preponderance of probability' is met when a proposition is more likely to be understood by people of reasonable intelligence to be true than to be not true. Effectively, the standard is satisfied if at least there is 50% or more chance that the given proposition is believable by a reasonably prudent to be true. Acceptance of the principle of preponderance cannot be a Licence to demand duty on the basis of assumptions/presumptions/ vague imputations. Therefore, while accepting the fact that there was under-valuation resorted to by these companies, we find that the methodology adopted to quantify the duty evaded should be sustainable on the evidence available and quantum thereof, needs to be arrived in a logical; rational and legally appropriate manner. The quantification of the duty liability requires to be arrived strictly on transaction to transaction basis. The show cause notice proposes to recover additional duties on the basis of a percentage of under valuation arrived at. Learned Commissioner has correctly denied an approach of quantifying the duty liability on an approximation basis as is proposed in annexure-D to the SCN in respect of Prime Veneers and Others.

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• 2019 (11) TMI 120
  Clandestine removal - duty paid would have been available as refund through PLA under N/N. 39/2001 - Shortage of total production - HELD THAT:- The Revenue recorded the statements of Shri Dipak Arora, Manager (Commercial) and Shri Kunal Bubna, General Manager (Commercial and Finance) both of them admitted that while there was no stock of 12mm TMT bars, the daily stock account showed 368.54 MT. However none of them admitted that there was any clandestine clearance. Both of them claimed that the said discrepancy was a result of the fact that while the when TMT bars was manufactured no actual weighment was done at the time of entering into the daily stock account - The charge of clandestine clearance has been made without any other evidence and it is a conclusion drawn solely on the basis of the discrepancy in the physical stock vis a vis daily stock account. This discrepancy needs to be appreceiated in the background of the fact that the discrepancy consist of only 0.31% of the total production during the said period and also from the fact that the appellant do not stand to gain by evading Central Excise Duty as they were availing benefit of Notification No. 39/2001-CE which entitled them to claim refund duty paid through PLA in cash - where the shortage was insignificantly low as compared to total production and the appellants were not gaining by clandestine clearance and in absence of any positive evidence of clandestine removal, the charge of clandestine removal cannot be sustained. In instant case appellant has been able to show that plausible reason of the discrepancy and also the fact that there is no gain to be made by clandestine clearance in terms of Central Excise Duty thus decisions relied upon by the Commissioner (Appeals) are on significantly different facts - appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 119
  Reversal of CENVAT credit - Written off partial value of inputs - Circular No. 645/36/2005-CX dated 16.07.2002 - Sub-Rule 5(B) in Rule 3 of Cenvat Credit Rules - HELD THAT:- The inputs on which value was written off was lying in the factory as the Revenue has not proved contrary that either the goods are not available or the same was disposed of or otherwise. Therefore, even though the inputs got obsolete but, since, the same is lying in factory, cenvat credit cannot be denied - the amended provision of sub-Rule 5(B) of Rule 3 of Cevat Credit Rules whereby it is provide that in case of partial written off value of the inputs the reversal of cenvat credit is required, however this provision came into effect from 01.03.2011 , therefore, prior to this date there was no statutory provision for reversal of credit in case partial value of the inputs is written off, therefore, during the period in question there was not statutory provision in reversal of cenvat credit in case of the value of the inputs is written off. Appeal allowed - decided in favor of appellant.

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• 2019 (11) TMI 118
  Classification of goods - Rubber buffer spring Freight Stock - Rubber recoil spring - Rubber draft gear pads - Elastomeric pads - Side bearer pads - Meter gauge pads - whether classifiable under chapter 40 sub-heading No.4016.19 of schedule to Central Excise Tariff Act, 1985? HELD THAT:- The learned Original Authority has held classification of all the 28 items manufactured by appellant to be under chapter heading No.4016 on the strength of the said Final Order in ARYAN EXPORTERS PRIVATE LTD. VERSUS COLLECTOR OF C. EX., ALLAHABAD [ 1999 (8) TMI 197 - CEGAT, NEW DELHI ]. During the relevant period of the present demand only 2 items out of them such as Rubber Buffer Spring For Freight Stock and Side Buffer Recoils Spring were manufactured by the appellant. We, therefore, hold that since the issue has attained finality Rubber Buffer Spring For Freight Stock and Side Buffer Recoils Spring shall be assessed in accordance with the rate of duty prevailing during the relevant time by classifying the said 2 items under chapter heading No.4016. We hold that remaining 26 types of items which were not manufactured till 1992 cannot be considered to be those on which this Tribunal had passed said order dated 10.08.1999. Since said 26 types of goods were not subject matter of dispute, we are free to decide classification of remaining 26 types of items as list above. In so far as the classification of said 26 items manufactured by appellant are concerned since all of them are supplied to Railway the description under heading No. 8607 is more appropriate for them as compared to description under chapter heading No.4016. Further, as per Rule 3(a) and 3(c) of Rules for Interpretation the classification under heading No.8607 is appropriate. Thus, appeal is rejected in respect of Rubber Buffer Spring For Freight Stock and Side Buffer Recoils Spring and Appeal is allowed in respect of rest 26 types of goods - appeal allowed in part.

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• 2019 (11) TMI 117
  CENVAT Credit - input services - Cab Operator - Commercial and industrial construction for canteen - Tarpaulin shed supply of tangible goods for use - Air Travel Agency - Cleaning Activity - Travel Agency - Courier Service. Cab-operator services - HELD THAT:- As per the use of services explained by the appellant, the appellants are entitled for the Cenvat Credit. The cab operator service is used by the employees for attending outside work. And the same is not used for their personal use or consumption - Therefore, having considering the exclusion clause which came into force from 01 April, 2011, cab operator service is indeed used for the business of the appellant s company - it is an eligible input service. Commercial and Industrial Construction service - services used for construction of canteen which is a part of setting-up of factory which is specifically included in the exclusion clause of definition of input services up to 01 April, 2011 - HELD THAT:- The appellant have given up the claim of credit on these services amounting to ₹ 1,00,435/- for the period after 01 April, 2011 - the demand of the same is upheld. Erection of Tarpaulin shed - HELD THAT:- It is observed that temporary shed is used for storage of raw material and finished goods for protection of the goods from rain water. Therefore, it is directly used in or in relation to manufacture of final product. Air Travel Agency - HELD THAT:- The air travelling is used by the employees of the company for company s business work. Therefore, it is not the service which is used for individual, the service is used in or in relation to the business of the company. Hence, use of service is for the company and not for the individual. Cleaning activity - HELD THAT:- Since it is marble manufacturing industry, it creates lot of dust and particles which needs to be cleaning on regular basis to carry uninterrupted production activity. Similarly, the pest control is also very much necessary for such pollution prone industries. Therefore, cleaning activity is directly used in the manufacture of the final product. Travel agency service - HELD THAT:- Travel agency service is again used for the employees for performing the outside duties for the companies. Therefore, it is used for the overall business of the company not for the individual s personal use. Courier service - HELD THAT:- Courier service is used for movement of samples, raw materials and mostly for authorized documents such as orders, quotations, marketing documents, instruction, cheques, etc. These activities are directly used in or in relation to manufacture as well as business of the appellant s company. Revenue could not bring anything on record contrary to the use of services presented by the appellant - all the services are indeed input services and eligible for Cenvat Credit. Credit allowed - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2019 (11) TMI 116
  Validity of assessment order - Penalty order - Section 67(1) of the Kerala VAT Act - HELD THAT:- Inasmuch as the petitioners had, in the assessment proceedings before the Assessing Authority under the KVAT Act, produced the Form 20H certificates obtained by them from the sub-contractors, evidencing the turnover on which tax was paid by the sub-contractors, it was not open to the Assessing Authority to disregard the said material while completing the assessment in relation to the petitioners. As rightly pointed out by the learned senior counsel, there is no statutory prohibition in considering material that is produced by the assessee at the time of hearing before the Assessing Authority merely because the said material was not included in the return that was filed by the assessee for the assessment year in question. On the facts of the instant cases, the material produced by the assessees to support their claim for deduction of a substantial part of the turnover, on which, tax had already been paid by their sub-contractors, ought to have been considered by the Assessing Authority while competing the assessment in relation to the petitioners. The non-consideration of the said material by the Assessing Authority vitiates the assessment orders that are impugned in these writ petitions. To enable the Assessing Authority to pass fresh orders as directed, the petitioners in the said writ petitions are directed to appear before the Assessing Authority, at his Office, at 11.00 a.m. on 28.10.2019. The Assessing Authority shall pass fresh orders, as directed, within one month thereafter - Petition allowed by way of remand.

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• 2019 (11) TMI 115
  Maintainability of petition - availability of alternative remedy of appeal - Concessional rate of duty - Diesel - notification dated 29.12.2017 - HELD THAT:- In case this order is heard on its merit, it would not only be going against the observations made by the Division Bench of this Court which only speaks of judicial remedy , which strictly speaking would be a statutory remedy available to the petitioner. The second reason would also be that in case observations are made by this Court while deciding the writ petition as to whether the use of diesel is actually in a manufacturing process or not, then the statutory remedy available to the petitioner under Section 51 of the Uttarakhand Value Added Tax Act, 2005 before the Joint Commissioner Appeals would be a mere formality, or rather it would become redundant. This Court refrains to say anything on the merit of the case. The writ petition stands dismissed in view of the statutory appeal available to the petitioner under Section 51 of the Uttarakhand Value Added Tax Act, 2005.

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• Indian Laws

• 2019 (11) TMI 114
  Maintainability of application - lack of availability of the regular appellate forum - principle of ubi jus ibi remedium - whether separate notices under Section 13(4) of the SARFAESI Act, pertaining to different secured assets for a single debt, can be challenged in a single application under Section 17 of the said Act? HELD THAT:- Section 17(1) of the SARFAESI Act provides that any person, including the borrower, aggrieved by any of the measures referred to in Section 13(4), may make an application along with such fee, as may be prescribed, to the Debts Recovery Tribunal having jurisdiction in the matter within the time as specified therein - The Debts Recovery Tribunal, upon an examination of the facts and circumstances and evidence produced by the parties, has the power to set at naught such measures under Section 13(4). It may also hold that such measures were taken in accordance with law, which shall entitle the secured creditor to take recourse to the measures to recover his secured debt. A perusal of Section 19(1) of the DRT Act, in conjunction with Section 17(1A) of the SARFAESI Act, indicates that the primary consideration for ascertaining the jurisdiction of the tribunal is not restricted to the situs of the secured asset but is primarily based on the debt itself, be it with regard to the place where the cause of action, wholly or in part, arises or the branch or any other office of a bank or financial institution where it is maintaining an account in which the debt claimed is outstanding for the time being or (in the DRT Act) the defendant resides or works. In the present situation, if the argument of the opposite parties is to be accepted, the borrowers/petitioners have to file several different applications under Section 17(1) of the SARFAESI Act before the different tribunals respectively having territorial jurisdiction over the secured assets, for the same debt, each time paying the amount of fees specified for such debt, since there is no provision for segregation or apportionment of the fees payable within the scope of Rule 13(2) of the said Rules. The said proposition, ipso facto, is absurd, since for the same grievance, the applicant cannot be expected to deposit fees several times over - Hence, the argument as to the petitioners avoiding fees returns as a boomerang against the opposite parties themselves inasmuch as the relevant provisions, as discussed above, indicate that the fees have to be put in on the basis of the debt alone. Thus, it is obvious that, for a single debt, the borrowers have to file a single application under Section 17(1) in a tribunal having jurisdiction of the borrowers choice, as provided in Section 17(1A) of the SARFAESI Act, putting in a single fee pertaining to the debt‐in‐question, in consonance with the chart provided under Rule 13(2) of the aforesaid Rules of 2002. The several notices, be those under Section 13(2) or Section 13(4) of the SARFAESI Act, pertain to the same debt and since the petitioners challenged measures taken under Section 13(4) in respect of a single debt, the cause of action of the said application is a composite bundle of facts, taking within its fold all the said three separate notices, since those emanate from the same single debt, permitting the petitioners to file a single application under Section 17(1) of the SARFAESI Act before a tribunal of their choice within the latitude provided under Section 17(1A) of the SARFAESI Act, which was precisely done by the petitioners in the present case. Application allowed.

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