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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter December 16, 2024 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise Highlights / Catch Notes GST Flavoured Milk GST Classification: Nutritious Dairy Product Over Sweetened Beverage. Case-Laws - HC : The High Court held that flavoured milk is to be classified under GST Tariff Heading 0402 and not 2202. The entry 0402 covers milk and milk products, including milk containing added sugar or sweetening matter. Although flavoured milk contains 0.5% Badam flavour, it cannot be excluded from Heading 0402 merely due to the addition of flavour. The principle of noscitur a sociis indicates that Heading 2202 covers beverages containing water as an essential part, except for tender coconut water. Since Heading 0402 is the specific entry and 2202 is the general entry, flavoured milk falls under 0402. Consequently, the question of penalty u/ss 122(2)(b) and 74 of the Central GST Act does not arise. The impugned order was set aside, and the petition was allowed. Visit to Get Source Arbitrary tax demand quashed; Taxpayer relief on limitations upheld. Case-Laws - HC : The High Court allowed the writ petition by quashing the appellate order dated June 28, 2024, due to procedural irregularities and arbitrary actions in the demand of tax, interest, and penalties u/ss 16(2)(c) and 73 of the GST Act. The Court held that provisions on limitation should be interpreted liberally where genuine hardships are demonstrated, considering judicial precedents supporting such relief. The Court found the petitioner's case meritorious in light of the procedural irregularities and arbitrary nature of the actions taken by the authorities. Visit to Get Source Petitioner's GST registration restored after court intervention; CGST/WBGST to open portal for tax payment. Case-Laws - HC : The High Court disposed of the writ petition by setting aside the impugned orders cancelling the petitioner's registration. The court directed the respondent CGST/WBGST authority to restore the petitioner's registration, open the portal for 45 days to enable the petitioner to make payment of revenue due, including penalty, within 15 working days as indicated by the respondent authority. Visit to Get Source Income Tax Indian company's transfer pricing adjustment on marketing expenses rejected; brand building costs allowed. Case-Laws - HC : The Delhi High Court upheld the order of the Tribunal on the following issues: 1. Transfer Pricing adjustment on Advertising, Marketing and Promotional (AMP) expenditure was rejected in the absence of evidence establishing an arrangement or concerted action between the Indian entity and its Associated Enterprise. 2. Disallowance u/s 14A was not warranted as there was no exempt income earned in the concerned Assessment Years. 3. Disallowance of brand building expenditure u/s 37 was not justified. As per Section 48 of the Trade Marks Act, the assessee, being a licensee, was entitled to claim such expenditure as business expenditure, although it may have enhanced the brand of the overseas owner. 4. Disallowance based on seized material pertaining to preceding years was not merited in the absence of incriminating material for the concerned Assessment Years, following the Supreme Court's decision in Sinhgad Technical Education Society. Visit to Get Source Taxman's reassessment order upheld; sufficient opportunity given for response. Case-Laws - HC : The High Court dismissed the petition challenging the validity of the order of reassessment. It held that sufficient opportunities were granted to the petitioner by serving notices physically and through email. The petitioner had responded to the notice u/s 148A(b) of the Act and even sought further time for filing an additional response. However, no objection was subsequently filed, and the Income Tax Officer passed appropriate orders in accordance with the law. The petitioner had provided an email address for communication and had submitted a response through that email ID. Hence, notices issued to that email ID cannot be considered irregular. The petitioner was aware of the proceedings but failed to avail the opportunity granted. The contention of unawareness of the technological mode of serving notices was rejected by the Court. The Court found no merit in the contention regarding violation of principles of natural justice. Visit to Get Source Vivad Se Vishwas Act Appeal Settlement: Tax Disputes Closed, Interest Payable for Delay. Case-Laws - HC : The High Court held that once an appeal by the Revenue is included in the application for settlement under the Direct Tax Vivad Se Vishwas Act, 2020 (VSV Act), all disputes forming the subject matter of that appeal and the potential outcome become subject to closure and discontinuance. The tax liability arising from such appeal sets is governed exclusively by the VSV Act. The issuance of the certificate u/s 5 of the VSV Act renders both appeals closed and all aspects of disputation rendered quietus. The Court rejected the claim for statutory interest u/s 244A of the Income Tax Act. However, it directed the respondents to pay interest at 5% per annum on account of the delay in releasing the amount determined under the VSV Act, for the period between February/November 2021 to February 2023. Visit to Get Source Dismissal of appeal challenging Income Tax order; Opportunity given, but delay tactics employed. Case-Laws - HC : The High Court dismissed the appeal challenging the order issued by the National Faceless Appeal Centre (NFAC) u/s 250 of the Income Tax Act. The court held that the appellant was afforded sufficient opportunity to produce supporting documents, but repeatedly sought adjournments without producing any documents, indicating a delay tactic. The notices issued u/s 250 satisfied the statutory requirements, explicitly conveying the purpose of the hearing. The appellant's contention of violation of natural justice principles was rejected, as a person who fails to avail the opportunity to make submissions and produce documents cannot complain about such violation. However, the High Court modified the single judge's direction requiring the appellant to remit 20% of the disputed tax as a pre-condition for filing a stay petition before the Appellate Tribunal. Visit to Get Source IT dept's final assessment order & demand notice set aside; technical glitches prevented e-filing. Case-Laws - HC : The High Court set aside the final assessment order and demand notice issued by the Income Tax department. The petitioner had filed an application u/s 35-A of the Income Tax Act manually, but failed to e-file the acknowledged copy of the application in Form No. 35-A despite repeated attempts between 29.12.2023 and 31.12.2023 due to technical glitches and bona fide reasons. The Court remitted the matter back to the Income Tax department for fresh reconsideration, accepting the petitioner's assertion that the failure to e-file was due to unavoidable circumstances and sufficient cause. Visit to Get Source Telecom Company Wins Appeal Against Disallowances on Amortization and Depreciation Costs. Case-Laws - AT : The ITAT allowed the assessee's appeal and deleted the disallowances made by the Assessing Officer (AO) u/s 154 read with Section 143(3) and by the CIT(A). The AO erred in passing the order u/s 154 by making the disallowance of amortization of telecom license u/s 35ABB and depreciation on right to use telecom spectrum u/s 32. The CIT(A) also erred by disallowing an amount which was not part of the appeal before them. The ITAT held that the CIT(A) exercised jurisdiction beyond the scope of the appeal by disallowing an amount which was part of separate appeal proceedings. Accordingly, the ITAT allowed the assessee's appeal and additional grounds, deleting the disallowances made by the AO and CIT(A). Visit to Get Source Offshore service vessels hire income of foreign resident not taxable in India. Case-Laws - AT : The Income Tax Appellate Tribunal held that the payments received by the assessee, a foreign resident without a permanent establishment in India, for providing offshore services vessels on hire were business receipts not taxable in India under the applicable Double Taxation Avoidance Agreement. The Tribunal rejected the tax authorities' reliance on Section 44BB of the Income Tax Act and the assessee's prior application for a lower withholding tax certificate, stating that the taxability of such receipts cannot be determined based solely on these factors. The Tribunal emphasized that the assessee's income cannot be taxed in India merely because it sought a lower withholding tax certificate, as determination of tax liability must be based on legal provisions, not unilateral concessions. Visit to Get Source Tax tribunal allows deduction without adjusting losses against profits. Case-Laws - AT : The Income Tax Appellate Tribunal held that the enhancement made by the Commissioner of Income Tax (Appeals) was incorrect. The Assessing Officer was directed to delete the impugned additions. The Tribunal opined that the loss from one eligible industrial undertaking need not necessarily be adjusted against the profits from another eligible industrial undertaking for the purpose of deduction u/s 80IB. The decision in Synco Industries Limited was distinguished on facts as the issue there pertained to allowability of deductions under Chapter VIA when the gross total income was nil. Since the assessee had positive gross total income, it was eligible for deduction u/s 80IB without adjusting the losses of one unit against profits of another. Visit to Get Source Payments for promotional schemes not commission, thus no TDS u/s 194H; But TDS non-compliance for PF/ESI for contractors. Case-Laws - AT : The ITAT held that the payments made by the assessee towards various promotional schemes like Gold Coin Scheme, Atoot Rishtey Scheme, and Foreign Scripts to dealers are not liable for tax deduction at source (TDS) u/s 194H of the Income Tax Act. The relationship between the assessee and dealers is that of seller and buyer, not principal and agent. Therefore, these payments do not constitute commission payments attracting TDS u/s 194H. However, the ITAT confirmed the disallowance of expenditure u/s 40(a)(ia) for non-deduction of TDS u/s 194C on payments made towards EPF, PF, and ESI contributions on behalf of labor suppliers or contractors. Visit to Get Source Foreign entity's justified delay in furnishing transfer pricing info; penalty waived. Case-Laws - AT : The assessee, a foreign-based company, initially failed to comply with the notice u/s 92D(3) within the statutory period of 60 days, responding on 25.03.2019 after a delay of 38 days. However, the Income Tax Appellate Tribunal (ITAT) considered the delay as minuscule and the reasons for non-compliance as bona fide and unintentional, given the peculiar circumstances of the assessee being a foreign entity and in the process of appointing a new authorized representative. The ITAT held that the penalty u/s 271G for non-compliance should be deleted, accepting the assessee's reasons for the inadvertent delay as reasonable. Consequently, the assessee's appeal against the penalty was allowed. Visit to Get Source Customs Customs Broker's Liability Limited for Export Documents Verification. Case-Laws - HC : The High Court dismissed the appeal and upheld the CESTAT order in M/s Bright Clearing [2022 (11) TMI 935 - CESTAT NEW DELHI]. The court held that under Regulation 10(n) of CBLR, 2018, the customs broker is not required to physically verify the address of the exporter/importer. The burden on the customs broker is liberal, and the potential misuse cannot be attributed to them. The customs broker's responsibility ends with fulfilling the obligation under Regulation 10. In this case, the exporters/importers had produced valid GSTIN and IEC certificates issued by the competent authorities, and the department had not doubted their identities. Therefore, the customs broker cannot be faulted for processing the export papers based on the documents provided. Visit to Get Source Tourist's personal gold jewelry exempt from seizure on arrival in India. Case-Laws - HC : The High Court held that the personal gold jewelry, consisting of a necklace and bracelet weighing 0.178 grams, worn by a tourist traveling from Azerbaijan to India, would not be liable for seizure as prohibited goods. The Court quashed the detention receipt and directed the release of the personal gold jewelry to the Petitioner within one week, considering it as personal effects exempt from the Baggage Rules, 2016. Visit to Get Source Customs license revocation & forfeiture upheld due to violations by broker. Case-Laws - HC : The High Court dismissed the appeal filed by the Customs broker challenging the revocation of license and forfeiture of security deposit by the Customs authorities. The court held that the power to suspend and revoke the license are distinct under the Customs Brokers Licensing Regulations, 2018. The 90-day timeline for initiating revocation proceedings applies from the date of the offence report, not the preliminary enquiry for suspension. Although the revocation notice was issued beyond 90 days from the preliminary enquiry, it was within the permissible period from the offence report date. The broker's consistent violations of verifying exporter details under Regulation 10(n) justified the revocation, despite the Tribunal's order being improper. No substantial question of law arose for consideration. Visit to Get Source Customs refund interest entitlement: 3 months from application date, not order date. Case-Laws - AT : The appellant is entitled to interest on the sanctioned refund from the date after three months from the date of application till the date of sanction of refund. The Commissioner (Appeals) erred in denying interest based on the explanation appended to Section 27A, which is not applicable as the refund sanction order was passed by the Deputy Commissioner of Customs. As per Section 27A, the appellant is eligible for interest after three months from the date of refund application, not from the date of the refund order, in line with the Supreme Court's ruling in Ranbaxy Laboratories Ltd. vs Union of India. The CESTAT set aside the impugned order and allowed the appeal. Visit to Get Source Delayed reply & flimsy grounds for cross-exam led to dismissal of appeal against mis-declaration order. Case-Laws - AT : The appellant sought stay of the impugned order citing violation of principles of natural justice due to denial of cross-examination of witnesses in quasi-judicial proceedings related to mis-declaration of quantity and value of goods. The Tribunal held that the appellant repeatedly delayed filing a reply to the show-cause notice and sought cross-examination on flimsy grounds without specifying valid reasons. Relying on Supreme Court precedent, the Tribunal ruled that cross-examination was unwarranted as the officers merely prepared documents based on evidence retrieved, and the appellant failed to contest the statements with specific reasons. Consequently, the appeal was dismissed for lack of merit. Visit to Get Source Corporate Law Offer of flat rejected, pre-deposit mandatory for RERA appeal despite moratorium in different project's insolvency. Case-Laws - HC : The appellant's application seeking attachment of a flat in lieu of the mandatory pre-deposit u/s 43(5) of the RERA was dismissed. The court held that the appellant cannot claim benefit of the moratorium issued by the NCLT for an exemption from making the pre-deposit, as the insolvency resolution process pertains to a different project. The court upheld the requirement of pre-deposit as a precondition for hearing appeals under RERA, as affirmed by the Supreme Court, rejecting the appellant's offer of a flat as security. Consequently, the appeal was dismissed. Visit to Get Source PMLA Apex court stresses personal liberty, expedites trial in ED case for fair justice. Case-Laws - SC : The Supreme Court reiterated the paramount importance of the right to life and liberty under Article 21 of the Constitution, emphasizing that prolonged incarceration of an accused awaiting trial unjustly deprives them of personal liberty. The grant of bail must be determined based on unique circumstances, balanced against factors like the gravity of the offence, likelihood of interference with the investigation, possibility of evidence tampering, threat to witnesses, societal impact, and risk of absconding. Since the charge sheet has been filed but charges are yet to be framed in the ED Case, the Trial Court is directed to decide on framing charges before the winter vacations or 31.12.2024, whichever is earlier, and thereafter fix a date within the second and third week of January 2025 for recording statements of the most material or vulnerable prosecution witnesses. The petition is disposed of. Visit to Get Source Property of equivalent value is 'proceeds of crime' if original unavailable. Case-Laws - AT : The Appellate Tribunal held that the definition of 'proceeds of crime' encompasses not only the property derived or obtained directly or indirectly from criminal activity, but also any other property of equivalent value when the original proceeds are unavailable. The Adjudicating Authority's narrow interpretation of the definition was incorrect. The Tribunal set aside the Adjudicating Authority's order and remanded the case for fresh consideration within the statutory period, with parties to remain present on 10.12.2024. The appeal was allowed. Visit to Get Source Service Tax Service Tax Penalty Waived for Admitted Liability Payment Before Notice. Case-Laws - AT : The appellant's appeal was allowed by the Appellate Tribunal, and the penalty imposed u/s 78 of the Finance Act, 1994, was set aside. It was held that when an assessee admits and discharges the service tax liability along with interest before the issuance of a show cause notice, it demonstrates a reasonable cause for non-payment, and the case stands closed u/s 73(3) of the Act. Since the appellant recorded the entire transaction in their books and paid the tax liability and interest without any mala fide intention, invoking Sections 73(3) and 80 of the Act, the penalty was rightly set aside. Visit to Get Source Landscaping materials exempted from service tax, accounts reconciliation ordered. Case-Laws - AT : The CESTAT partially allowed the appeal by setting aside the demand for service tax on the value of materials like grass, plants, manure, etc. supplied for landscaping activities under Interior Decorator Services. This was based on the settled position that the value of materials consumed while providing taxable services cannot be included in the taxable value. However, the matter was remanded to ascertain whether service tax had been paid on the difference between the figures in the balance sheet and ST-3 returns due to maintenance of accounts on accrual and receipt basis respectively. The penalties were set aside for the first demand, while for the other demands, the quantum would be determined after reconciliation of tax payable. Visit to Get Source Tribunal remands tax refund case for reconsideration due to inconsistent treatment of payment amounts. Case-Laws - AT : The Appellate Tribunal allowed the appeal and remanded the matter to the adjudicating authority for passing a fresh order. The Tribunal found that the refund claim was erroneously rejected by the lower authorities on the ground of limitation u/s 11B, as there was an inconsistency in treating part of the amount paid as a pre-deposit and the remaining amount differently, despite being of the same nature. The Tribunal set aside the impugned order, holding that the issue required reconsideration by the adjudicating authority. Visit to Get Source Central Excise Undervaluation upheld for non-existent dealers; Exemption denied for traded goods; Clandestine removal claim rejected. Case-Laws - AT : The CESTAT adjudicated on various demands and penalties imposed on the appellants. The key findings are: The demand on account of undervaluation of goods cleared to two non-existent dealers was upheld along with interest and penalty equal to duty. The benefit of exemption notification was denied proportionately for traded goods, and the matter was remanded for re-quantification. The substantial demand for alleged clandestine removal of Fatty Acid in the guise of Refined Palm Oil was set aside due to lack of evidence. The penalties imposed on the directors were reduced considering their roles and the offenses established. Visit to Get Source Animal Feed Supplements: Calcium, Vitamins Classified as Feed, Not Medicine Despite Doses. Case-Laws - AT : The CESTAT held that the animal feed supplements containing ingredients like calcium, magnesium, phosphorus, vitamin B12 and vitamin D3 are appropriately classified under Heading 2309 and Tariff Item No. 23099090 of the Central Excise Tariff Act, 1985. The Tribunal observed that the subject goods are nutrient supplements not mentioned in the pharmacopoeias and not prescribed by veterinary doctors for curing ailments, despite prescribed doses. Relying on the Supreme Court's ruling that the burden to prove correct classification lies on the Revenue, the Tribunal set aside the impugned order as the Revenue failed to discharge this burden. The Tribunal upheld its earlier decision in Dabur India Ltd. case classifying similar products as animal feed supplements. Visit to Get Source Excise duty evasion case: No willful suppression, inevitable intermixing for public distribution system. Case-Laws - AT : The appellant was charged with evasion of central excise duty on the quantity of SKO cleared from the refinery intended for public distribution system. The CESTAT held that there was no willful suppression or misdeclaration of facts to defraud the exchequer. Following the Supreme Court's judgment in Nizam Sugar Factory, the CESTAT ruled that the subsequent show cause notices did not involve suppression of facts already known to the authorities. Since the goods were intended for public distribution system without any end-use condition, and intermixing was inevitable, the CESTAT relied on the Dalmia Dadri Cement Ltd. case to allow full exemption from duty after clearance. Consequently, the appeal against recovery of central excise duty was allowed. Visit to Get Source Articles Supreme Court’s Landmark Verdict: Clarifying Reassessment Timelines and Taxpayer Rights Under the Income Tax Act The Role of GSTR 2A in Ensuring GST Compliance Practice support:Non-application of mind by authorities- need scrutiny of procedure and documentation at each stage. Non-application of mind, if proved, can be good ground of contesting proceeding as void , devoid of merits, irregular, unsustainable, liable to quashed etc. depending on nature of proceeding and seriousness of issues. INTEREST ON DELAYED REFUND OF IGST Supreme Court dismissed the SLP on grounds of delayed filing it News CCI issues cease and desist order against the Table Tennis Federation of India and its affiliate bodies ; decides against imposing any monetary penalties 3rd India-UK Financial Markets Dialogue: Joint Statement Notifications Customs 85/2024 - dated 13-12-2024 - Cus (NT) Fixation of Tariff Value of Edible Oils, Brass Scrap, Areca Nut, Gold and Silver G.S.R. 766(E) - dated 11-12-2024 - Cus (NT) Corrigendum - Notification No. 83/2024-Customs (N.T.), dated the 21st November, 2024 GST 31/2024 - dated 13-12-2024 - CGST Seeks to appoint common adjudicating authority for Show cause notices issued by officers of DGGI Money Laundering S.O. 5371(E) - dated 12-12-2024 - PMLA Reserve Bank of India has permits authorization to four additional entities to perform authentication under the Aadhaar Act for the purposes of section 11A of the Money laundering Act, 2002. SEBI SEBI/LAD-NRO/GN/2024/218 - dated 12-12-2024 - SEBI Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2024 Case Laws: GST 2024 (12) TMI 787 Dismissal of appeal on the ground of time limitation - challenge to validity of Rule 36(4) of the CGST/AGST Rules, 2017 - HELD THAT:- Having heard the learned counsel for the parties and after going through the material available on record, it is opined that the matter requires consideration. List for hearing on 13.02.2025. 2024 (12) TMI 786 Extension of limitation for passing the final order in respect of the concerned assessment year, i.e. A.Y. 2017-18 - HELD THAT:- The Appellate Authority is requested to dispose of these appeals as expeditiously as possible and in accordance with law and on their own merits. Should the Appellants not get the relief they seek under the statutory remedies, they shall have the liberty to inter-alia challenge the impugned notification dated 31st March 2023 because we have not examined the legality or validity of such notification. Petition disposed off. 2024 (12) TMI 785 Maintainability of petition - availability of alternative remedy - rejection of refund claim - HELD THAT:- Recently in the case of Oberoi Constructions Limited Vs. Union of India and ors.[ 2024 (11) TMI 588 - BOMBAY HIGH COURT] , several precedents on the practice of exhaustion of alternate remedies considered. By adopting the reasoning in the said decision, this petition is declined decline to be entertained. The contentions on merits must be examined by the Appellate Authorities under the Act. No case is made out to deviate from the usual practice of exhaustion of alternate remedies. By adopting the reasoning in Oberoi Constructions Limited instead of repeating the reasons and precedents, this petition is dismissed but with liberty to the Petitioner to avail of the alternate remedy of appeal. Petition disposed off. 2024 (12) TMI 784 Maintainability of petiiton - avaiability of alternative remedy - Classification of goods - flavoured milk - to be classified under GST Tariff Heading 0402 or 2202? - Applicability of penalty under Section 122(2)(b) and Section 74 of the Central GST Act. Maintainability of petiiton - availability of alternative remedy - HELD THAT:- The existence of an alternative remedy does not bar judicial review, under Article 226 of the Constitution of India. The decision, whether such a review is to be taken up or not, is within the sole purview of this court. Accordingly, this objection is rejected. Classification of flavoured milk under GST Tariff Heading 0402 or 2202 - whether only milk is to be treated under 0402? - HELD THAT:- The said entry not only enumerates milk per se but also cream, skimmed milk powder, milk food for babies etc. It includes even plain or concentrated milk containing sugar or other sweetening matter. This entry clearly incorporates milk and milk products. For example milk food for babies, by normal standards, is not milk. However, it is treated as falling in 0402. Thus, the test propounded by the 1st respondent that only plain milk is to be treated as falling under 0402 is not correct. The finding of the 1st respondent that flavoured milk goes out of this entry by addition of Badam flavour also cannot be accepted. Though the entry speaks only of milk containing added sugar or other sweetening matter, flavoured milk cannot be taken out of tariff heading 0402 merely because of addition of 0.5% of Badam flavour. Whether beverage is any type of drink except water and as such any milk drink, would fall within 2202? - HELD THAT:- The entries, under this chapter heading, enumerate water, mineral water, aerated water and other beverages which can be made only by using water. Except entry 2202 90 90, Tender coconut water , water is an essential part of the beverages mentioned therein. Applying the principle of Nocitur a Sociis, the placement of Tariff Item 2202 90 30 in the same tariff heading would mean that entry 2202 99 30, would cover beverages which contain milk as well as water. Sweetened milk or not - HELD THAT:- In a case where sweetened milk is to be sold, after bottling the same, it would fall within the meaning of Milk containing added sugar or other sweetening matter, under 0402. This drink could also be called a beverage, containing milk, falling under 2202. The entry, in 0402, is the special entry and the entry, under 2202, is the general entry and would have to give way to entry 0402. The same principle would apply to flavoured milk - The Hon ble High Court at Madras in the case of M/s Parle Agro Pvt. Limited Vs. Union of India [ 2023 (11) TMI 601 - MADRAS HIGH COURT ], after reviewing the law and the changes in the tariff entries, had come to the conclusion, on similar lines, that flavoured milk would fall under 0402 and not under 2202. Applicability of penalty under Section 122(2)(b) and Section 74 of the Central GST Act - HELD THAT:- In view of the fact that this Court is of the view that flavoured milk cannot be treated to fall under the Tariff Heading 2202, the question of penalty under any of the aforesaid provisions would not arise. In any event, the question of whether a penalty can be levied, even if flavoured milk falls within 2202, merely on the ground that the dealer changed his classification of goods from one entry to another is left open. The impugned order is set aside - petition allowed. 2024 (12) TMI 783 Violations under Section 16(2)(c) and Section 73 of the GST Act - demand of of tax, interest and penalties - procedural irregularities and substantive errors in tax demands - HELD THAT:- Upon a thorough examination of the documents presented to the Court and taking into account the arguments put forth by the parties, this Court allows the writ petition as statutory provisions on limitation should be interpreted liberally in cases where genuine hardships are demonstrated, particularly in light of judicial precedents supporting such relief. In S.K. CHAKRABORTY SONS VERSUS UNION OF INDIA ORS. [ 2023 (12) TMI 290 - CALCUTTA HIGH COURT] , the Hon ble Division Bench comprising Justice Debangsu Basak and Justice Md. Shabbar Rashidi held that ' since provisions of Section 5 of the Act of 1963 have not been expressly or impliedly excluded by Section 107 of the Act of 2017 by virtue of Section 29(2) of the Act of 1963, Section 5 of the Act of 1963 stands attracted. The prescribed period of 30 days from the date of communication of the adjudication order and the discretionary period of 30 days thereafter, aggregating to 60 days is not final and that, in given facts and circumstances of a case, the period for filling the appeal can be extended by the Appellate Authority.' In light of the procedural irregularities and the arbitrary nature of the actions, this court finds the petitioner s case to be meritorious. Accordingly, the writ petition is allowed, and the appellate order dated June 28, 2024 is quashed - Application disposed off. 2024 (12) TMI 782 Cancellation of petitioner s registration on the ground of non-filing of return - HELD THAT:- Considering the submissions of the parties, this writ petition being WAP 25452 of 2024 is disposed of by setting aside the impugned orders by both the concerned authorities and by directing the respondent CGST/WBGST authority to restore the petitioner s registration and open the portal for a period of 45 days from date of communication of this order by the counsel of the respondent authority to enable the petitioner to make the payment of revenue due as well as any other due including penalty to be indicated by the respondent authority concerned within a period of 15 working days. Petition disposed off. Income Tax 2024 (12) TMI 781 TP Adjustment - international transaction obtaining with respect to AMP expenses - Application of BLT - As decided by HC [ 2024 (7) TMI 1567 - DELHI HIGH COURT] ruled that BLT has no statutory mandate - HELD THAT:- Delay condoned. Leave granted. 2024 (12) TMI 780 Validity of order of reassessment - order stated to have been issued in violation of principles of natural justice - HELD THAT:- A perusal of Exhibit-P13 reveals that sufficient opportunities were granted to the petitioner by serving notices upon him both physically as well as through email. In fact, a response was filed by the petitioner pursuant to the notice u/s 148A(b) of the Act and he had even sought further time for filing an additional response. Subsequent thereto, no objection was filed, and then the Income Tax Officer passed appropriate orders in accordance with law. Moreover, in Annexure-R1A, petitioner himself had provided an e-mail address for communication. The response to the notice under Section 148A(b) was submitted through that e-mail ID. Hence, notices issued to that e-mail ID cannot be said to irregular. Thus, it cannot be said that the petitioner had not been granted notice of the proceedings. The repeated notices sent to the petitioner were met with a response once, which itself indicates that the petitioner was aware of the proceeding. It has been repeatedly held by the Supreme Court and various other High Courts that failure to avail of an opportunity cannot be regarded as absence of opportunity. In the instant case, it is evident that the petitioner had failed to avail the opportunity granted. The contention that he was unaware of the technological mode of serving notices cannot be accepted in the facts and circumstances of the case. Hence, I do not prima facie find any merit in the contention now raised by the petitioner regarding violation of principles of natural justice. Thus this is not a fit case for this Court to interfere in the exercise of the jurisdiction under Article 226 of the Constitution of India. 2024 (12) TMI 779 Reopening notice against deceased Assessee - HELD THAT:- We find ourselves in agreement with the submissions as made on behalf of the petitioner. As Supreme Court has held it to be the first principle of civilised jurisprudence that a person against whom any action is sought to be taken or whose right or interests are being affected should be given a reasonable opportunity to defend himself (see: UMC Technologies Private Limited vs. Food Corporation of India Anr [ 2020 (11) TMI 966 - SUPREME COURT] . This basic jurisprudential principle becomes applicable when any action of such nature were being initiated against Mr. Gene Gracious. Once Mr. Gene Gracious is a dead person there was no question of his defending such action or being heard so as to accord any sanctity to such order, and the consequential notice u/s 148 of the IT Act. The entire action under clause (b) and clause (d) of Section 148A were of no consequence being non-est. In this situation even the legal heirs cannot be bound by such order which is non-est, void ab initio. Also the provisions of Section 148A read with Section 148 as applicable in the facts of the present case (AY 2015-16) rests on a foundation that no notice under Section 148 could have been issued without a prior show cause notice being issued to an assessee and hearing being granted to the assessee on such show cause notice and an order passed thereon, as clearly seen from the legislative scheme under section 148A of the IT Act. All this is certainly not possible to be undertaken against a dead person and/or even against a non-existing entity [refer Principal Commissioner of Income-Tax, New Delhi vs. Maruti Suzuki India Ltd. [ 2019 (7) TMI 1449 - SUPREME COURT] Once such mandatory legal compliance itself could not be achieved, on such sole ground, the notice issued under Section 148 preceded by earlier actions is required to be held to be non-est and void ab initio. Department cannot maintain issuance of the notice as impugned to a dead person. Decided in favour of assessee. 2024 (12) TMI 778 Reopening of assessment u/s 147 against dead assessee - HELD THAT:- The provisions of Section 148A r.w.s. 148 as applicable in the facts of the present case (AY 2015-16) rests on a foundation that no notice u/s 148 could have been issued without a prior show cause notice being issued to an assessee and hearing being granted to the assessee on such show cause notice and an order passed thereon, as clearly seen from the legislative scheme u/s 148A of the IT Act. All this is certainly not possible to be undertaken against a dead person and/or even against a non existing entity [refer Principal Commissioner of Income-Tax, New Delhi vs. Maruti Suzuki India Ltd. [ 2019 (7) TMI 1449 - SUPREME COURT] . Once such mandatory legal compliance itself could not be achieved, on such sole ground, the notice issued u/s 148 preceded by earlier actions is required to be held to be non-est and void ab initio. We are in complete agreement with the view taken by the Courts in the decisions which are referred for the petitioner, which echo such principles that the department cannot maintain issuance of the notice as impugned to a dead person. In the present case, admittedly, the concerned assessee expired on 21 March 2020, the show cause notice u/s 148A (b) was issued on 24 March 2022 and an order thereon was passed on 14 April 2022 u/s 148A (d), as also the impugned notice u/s 148 was also issued on 14 April 2022. All this has happened after the said assessee had expired. Petition deserves to be allowed. 2024 (12) TMI 777 Addition as interest received by the assessee - CIT(A) deleted addition restored by ITAT - Whether assessee did not receive any interest during the block period? - Revenue has supported the order passed by the Appellate Tribunal and has contended that the assessee follows the mercantile method of accounting - HELD THAT:- As evident that the CIT(Appeals) on the basis of the remand report of the AO has recorded a finding that the debtors had stated that they had not paid any interest to the assessee during the block period. It has further been held that since the assessee is not a Company, interest cannot be assessed on accrual basis. The aforesaid finding of fact is recorded on the basis of material available on record. However, the aforesaid finding has been reversed by the Appellate Tribunal without assigning any reasons and without any improving reasoning on which the order of the CIT (Appeals) was based. Substantial question of law framed by this Court is answered in favour of the assessee and against the Revenue. 2024 (12) TMI 776 Assessment orders passed against the non-existent Firm - HELD THAT:- Form-C shows that the Firm stood dissolved way back in 2008. Thereafter, the petitioner was filing Return in his individual capacity. The respondents, admittedly, sent two notices in the Rajendranagar address mentioned herein above. Thus, the address shown in the cause title of the present petitions also has the same address of the present petitioner. We find substance in the argument for the petitioner that once Firm stood dissolved in the year 2008 itself, it cannot be accepted that the petitioner, an individual will keep track of any communication through erstwhile E-mail ID, which does not belong to him. Respondents are unable to show that in the impugned Assessment and Penalty proceedings, any notice was issued to the petitioner in the aforesaid Rajendranagar address. Thus, in our opinion, the petitioner was not served with the notice in the Assessment and Penalty proceedings. The impugned Assessment orders and penalty orders respectively are set aside. The proceedings are restored to its original numbers. 2024 (12) TMI 775 Validity of assessment proceedings as barred by limitation - HELD THAT:- There can be no dispute regarding the date of receipt of the order passed by the learned ITAT. Concededly, further proceedings by the TPO or by the AO pursuant to the remand by the learned ITAT are now barred as the time stipulated for passing an order under Section 153 of the Act has since expired. Consequently, the petitioner s return is required to be considered as accepted. 2024 (12) TMI 774 Statutory interest payment u/s 244A survival on settlement under the Direct Tax Vivad Se Vishwas Act, 2020 - whether the statutory interest payable under Section 244A and which right, according to the writ petitioner, had accrued and crystallized prior to the submission of the requisite forms in terms of Sections 3 and 4 of the VSV, would survive notwithstanding the determination of the settlement amount under Section 4 thereof? - HELD THAT:- A conjoint reading of the definition of the words appellant and disputed tax thus leads us to the irresistible conclusion that once an appeal preferred by the Revenue also comes to be included in the application submitted for settlement, all disputes forming the subject matter of that appeal as well as the potential outcome of such a challenge would become the subject of closure and discontinuance. The tax liability arising from such appeal sets would thus be governed exclusively by the VSV. As is manifest from the record, the application for settlement that the petitioner chose to submit under the VSV was not confined to the issues that emanated from its appeal alone. That application sought closure and settlement of all disputes which could be said to form the subject matter of the competing cross-appeals. The closure that was sought, therefore, was in respect of the entire gamut of disputes that formed the subject matter of those appeal sets. We note that in terms of Section 4 (2) of the IT Act, upon the filing of a declaration and the issuance of a certificate as contemplated under Section 5(1), any appeal pending before any authority in respect of disputed income, interest, or penalty is by way of a legal fiction deemed to be withdrawn from the date of issuance of such a certificate. The issuance of the certificate under Section 5 thus would have led to both the appeals being rendered a closure and all aspects of disputation being rendered a quietus. Firstly, and at the outset, it is manifest that clause (B) would not apply to the facts of the present case since admittedly both sets of appeals were pending on the specified date. In any event, we find ourselves unable to interpret the phrase giving effect to the order so passed; as relieving an appellant of the obligations that would flow when a composite application is preferred under the VSV, and which is intended to terminate a pending challenge raised at the behest of the Revenue and thus seeking to avoid a potential adverse decision thereon. The phrase giving effect to the order so passed would thus have to be construed accordingly. From the disclosures which are made in the rejoinder affidavit, we find that a total amount of INR 39,85,83,552/- was ultimately computed by the respondents as payable for AYs 2001-02 to 2004-05. The Form 5 s for AYs 2001-02, 2002-03 and 2004-05 came to be issued on 12 February 2021. For AY 2003-04, Form 5 was drawn and communicated to the writ petitioner on 10 November 2021. The amount as computed and noted above was ultimately released and refunded to the petitioner only on 13 February 2023. No plausible explanation has been proffered for the delay between February and November 2021 up to February 2023 and why the amount as determined as refundable was not released with due expedition. Thus, while we negate the claim for interest under Section 244A of the IT Act, we dispose of the writ petition by providing that the respondents would be obligated to pay interest @ 5% p.a. on account of the delay caused in the release of the amount as determined under the VSV. They would consequently be liable to pay interest for the period between February and November 2021 up to February 2023 on the amounts as determined to be payable to the petitioner. 2024 (12) TMI 773 Violation of the mandates of Section 250 - specific notice for hearing had not been issued to the appellant prior to the issuance of Ext.P8 order which is under challenge - Appellant's regular adjournment requests and failure to produce supporting documents - HELD THAT:- Though the appellant was repeatedly called upon by the NFAC to produce the supporting documents if any, he had not chosen to produce any such documents and had only kept on seeking adjournments purportedly for the said production of documents. Hence the contention of the appellant that Ext.P8 order had been issued without affording him an opportunity to be heard and that it violated the principles of natural justice cannot be countenanced. As regards the contention based on Section 250 of the IT Act that the said provision mandates the issuance of a separate notice for hearing and that such a notice was never issued to the appellant before the issuance of Ext.P8 order, the same is also not sustainable. A perusal of Exts.P4 and P6 notices issued to the appellant reveal that the same have been issued under Section 250 of the IT Act. The said notices satisfy all the mandates of the said section. They carried the forewarning as mentioned above, explicitly conveying that the same has been issued with respect to the hearing envisaged under Section 250 of the Act. The said fact, having been clearly expressed on the face of the notice itself, there was no scope to contend that the said notices were issued under Section 150 (4) as part of the inquiry that would be conducted by the Commissioner (Appeals) under the said sub-section. Nor was there any cause or reason to believe that a separate notice for hearing would be issued to the appellant by the NFAC. We thus note that the learned Single Judge had correctly concluded that in the facts and circumstances, the appellant could not harbor a grievance that he was not afforded an opportunity to file written submissions and supporting documents. The finding of the learned Judge that a person who fails to avail the opportunity granted to him to make submissions and produce documents in support of thereof cannot complain about the violation of natural justice is justified and well-founded. Appellant, who had been consistently seeking time since 31.07.2023 onwards purportedly for the production of documents to support his contentions in the appeal, had not chosen to prove his bonafides by producing the said documents along with the Writ Petition or even when the above Writ Appeal was filed by him. This gives credence to the contention put forth by the learned Standing Counsel for the respondents that the appellant had only been garnering time and was using the adjournment applications merely as a delay tactic. We find no reason to interfere with the judgment of the learned Single Judge, save to modify the latter part of the judgment that requires the appellant to remit 20% of the disputed tax as a pre-condition for filing a stay petition along with the appeal before the Appellate Tribunal. 2024 (12) TMI 772 TP Adjustment - Advertising, Marketing and Promotional AMP expenditure - HELD THAT:- As in the absence of any material or evidence which may have tended to establish the existence of an arrangement between the Indian entity and its AE, or which may have been viewed as evidence of them acting in concert, the view expressed by the TPO is untenable and the order of the Tribunal is liable to be upheld. This more so in light of the order passed by this Court in Seagram Manufacturing Private Ltd.[ 2016 (12) TMI 1284 - DELHI HIGH COURT] and which we propose to presently review. Viewed in light of the position of law which stood enunciated in the Maruti Suzuki [ 2015 (12) TMI 634 - DELHI HIGH COURT] and Sony Ericsson decisions [ 2015 (3) TMI 580 - DELHI HIGH COURT] we are of the considered opinion that the appeals fail to raise any substantial questions of law in this respect. Disallowance u/s 14A - Bearing in mind the admitted position of there being no exempt income which was earned in the concerned Assessment Years (AYs). We also bear in mind the judgment rendered recently in Alchemist Ltd. [ 2024 (8) TMI 1371 - DELHI HIGH COURT] . Disallowance of brand building expenditure u/s 37 - This issue came to be answered in favour of the respondent as would be evident from the order [ 2016 (12) TMI 1284 - DELHI HIGH COURT] wherein held nder the Trade Mark Act, especially Section 48, as long as the arrangement existed, the assessee, who was a licensee of the products, was entitled to claim them as business expenditure though in the ultimate analysis they might have enhanced the brand of the overseas owner. No doubt, if the arrangements were terminated, the brand presence of the overseas owner of the articles/IPR would have subsisted. But that would nevertheless subsist in any event on the theory of trans- national reputation of the IPR owner. Disallowing a certain proportion on an entirely artificial and notional basis from the expense otherwise deductible, in our opinion, was not justified. The question of law is answered against the revenue. Disallowance based on seized material pertaining to the preceding years - As conceded before us that the seized material pertained to AY 2002-03 whereas the present appeals pertain to the period AY 2007-08 to 2011-12. It is in the aforesaid context that the Tribunal had followed the view expressed by the Supreme Court in Sinhgad Technical Education Society [ 2017 (8) TMI 1298 - SUPREME COURT] to hold that in the absence of any incriminating material pertaining to the concerned AYs , no disallowances would be merited. 2024 (12) TMI 771 Validity of final assessment order and demand notice - petitioner filed an application u/s 35-A of the I.T. Act manually - failure of repeated attempts by the petitioner to e-file acknowledged copy of the application in Form No. 35-A HELD THAT:- As in the light of the specific assertion on the part of the petitioner that due to technical glitches and on account of bonafide reasons, unavoidable circumstances and sufficient cause, petitioner could not e-file the acknowledged copy of the said application in Form No.35-A of the I.T. Act, despite repeated attempts between 29.12.2023 and 31.12.2023, the impugned order deserves to be set aside and matter be remitted back to the respondent for reconsideration afresh. 2024 (12) TMI 770 Rectification u/s 154 - understatement of income on account of commission income received without offering such receipt, whereas corresponding TDS was claimed - HELD THAT:- We find that the assessee has filed all the details and the Assessing Officer, after examining such details, passed order under section 143(3) of the Act. We also find that it is not a fit case for making addition under section 154 of the Act for the reason that, whether or not the commission income 3,00,000, received by the assessee is taxable, has to be decided during the original assessment proceedings u/s 143(3) of the Act and not during the rectification proceedings u/s 154 of the Act. Even otherwise also, we find that the assessee, during the course of rectification proceedings, by way of written submissions dated 17/01/2017, intimated the Assessing Officer that an amoun received by the assessee from M/s. Parkson Graphics Pvt. Ltd. is in the nature of advance on which TDS was also deducted at ₹ 30,000, and hence, the Revenue ought to have no grievance in this regard. Considering the above facts, we hold that the AO was not justified in making addition - Assessee appeal allowed. 2024 (12) TMI 769 Disallowing the amount by CIT(A) in the order passed u/s 154 r.w.s. 250 - Disallowance of Amortization of telecom license u/s 35ABB and Depreciation on right to use of telecom spectrum u/s 32 - HELD THAT:- AO failed to appreciate that the Assessee has made two different claims which were altogether different and the same are not connected to each other. Apart from the same, the Ld. CIT(A) vide order dated 11/07/2024 has given clear finding that an amount has been rightly allowed to the Assessee in the assessment order passed u/s 143(3) of the Act and no addition is called for on the said ground. Thus, we are of the opinion that the A.O. committed error in passing the order u/s 154 of the Act by making the disallowance and on the other hand, the Ld. CIT(A) has also committed error in making reference two separate appeals filed by the Assessee and ended up with not deciding the issue involved in the appeal. Accordingly, we allow the Ground No. 3 of the Assessee and delete the addition made by the A.O. u/s 154 of the Act r.w. Section 143(3) of the Act which has been confirmed by Ld. CIT(A). Additional grounds of Appeal - CIT(A) has exercised its jurisdiction beyond the scope of the Appeal by disallowing amount which is part of separate appeal proceedings altogether and not the part of the Appeal/lis pending before the Ld. CIT(A ) - It is the fact on record that as against the order of the rectification passed u/s 154 of the Act the Assessee preferred an Appeal before the Ld. CIT(A). The grievance before CIT(A) of the Assessee against the addition made u/s 154 which was the disallowance made by the A.O. pertaining to amortization of telecom license on the right to use of telecom spectrum, however, the Ld. CIT(A) travel beyond the issue pending before him by making disallowance which has already been allowed to the Assessee and which was not disturbed by the A.O. in the rectification order. Thus, the action of the Ld. CIT(A) disallowing the amount of Rs. 2,77,04,74,906/- was beyond the scope of the Appeal pending before him and the same is not sustainable in the eyes of law. Accordingly, we allow the additional grounds of Appeal of the Assessee by deleting the addition made by the Ld. CIT(A). Appeal filed by the Assessee is allowed. 2024 (12) TMI 768 Assessment u/s 153C r.w.s. 153A - HELD THAT:- We find that the Coordinate Bench of Delhi Tribunal in Goldies Trading Co. Ltd [ 2024 (6) TMI 419 - ITAT DELHI] wherein held as per decision of Abhisar Buildwell Pvt. Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] no addition can be made the assessment framed u/s. 153A dehors incriminating material found during the search. Thus, we set aside the orders of the authorities below and decide the issues in favour of the assessee. 2024 (12) TMI 767 Revision u/s 263 - Assessment was completed by disallowing claim of exemption u/s. 10(10CC) and interest income - PCIT found that the assessee claimed Annuity payment was made to LIC as not taxable, which is contrary facts on record and against the provisions of law - HELD THAT:- We have given our thoughtful consideration and perused the materials available on record and the order passed in the case of Mafatbhai Bhikhabhai Parmar [ 2024 (6) TMI 642 - ITAT AHMEDABAD] held that deduction u/s 10(10CC) of the Act is available in respect of tax paid by employer for a non-monetary perquisite derived u/s 17(2) of the Act. The employer can t claim any deduction for such perquisite and the same is liable to be disallowed u/s 40(a)(v) - AO didn t make any enquiry from the employer about payment of perquisite which was claimed exempt u/s 10(10CC) of the Act and had allowed the claim of the assessee. The enquiry made by the PCIT from the employer revealed that neither any perquisite was paid to the assessee nor the employer had made any disallowance u/s 40(a)(v) of the Act. Therefore, the claim of exemption u/s 10(10CC) of the Act made by the assessee was wrong and incorrect. Similarly, the claim for exemption u/s 10(10BB) of the Act was also allowed by the AO without making any enquiry from the employer. It is thus evident from the above facts, that the AO had not conducted proper inquiries in respect of the claims as made in the return of income and, therefore, the order was rightly treated as erroneous and pre-judicial to the interest of revenue by the Ld. PCIT. As pointed out by the Ld. CITDR, it was held in the case of Navnit Lal Sakar Lal [ 2000 (11) TMI 1 - SUPREME COURT] that the amount utilized by the employer for obtaining deferred annuity policy would form part of remuneration payable to the assessee and was chargeable under the head salaries . Therefore, the annuity amount paid to LIC by the employer was remuneration of the assessee and taxable as salary. As the order of the AO was not in accordance with the decision of the Apex Court the order of the AO was erroneous and pre-judicial to the interest of revenue for this reason as well. It is a trite law and a well settled position that non application of mind or wrong assumption of facts or incorrect application of law by the A.O. will make the order erroneous and pre-judicial to the interest of Revenue. Therefore, we do not find anything wrong with the assumption of jurisdiction u/s 263 of the Act by the Ld. PCIT as the order of the AO was erroneous and pre-judicial to the interest of Revenue - Appeal filed by the Assessee is hereby dismissed. 2024 (12) TMI 766 Admissibility of the claim for deduction of bad debts not made in the original return - claim made by way of filing of revised return - HELD THAT:- Admittedly, facts relating to disclosure of claim of bad debts written off in the audited financial statements under note no. 19 are not in dispute. These financial statements were before the ld. AO. Claim was made by furnishing a revised computation along with complete details of the parties whose balances were written off. Also, assessee substantiated its claim by submitting that corresponding income was offered to tax in the preceding years, against which nothing cogent was brought on record by the Revenue to controvert the same. Assessee also explained the reasons which lead to the irrecoverability of the balances and were finally written off as bad debts. Position of law on the issue before us is a settled position, especially by the decision of TRF Ltd. [ 2010 (2) TMI 211 - SUPREME COURT ] coupled by CBDT circular referred above. On perusal of the judgement in the case of Goetz (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT ], no doubt Hon ble Court held that assessee can make a claim of deduction which has not been claimed in the return, only by filing a revised return within the time allowed. However, in the same judgement, Hon ble Court held that nothing impinges on the power of the appellate authorities to entertain such a claim of the assessee . Thus, power of an appellate authority to admit additional claim is not affected. In the present case before us, there is no dispute on facts that bad debts have been written off. Thus, under the law, assessee is undisputedly eligible for the claim so made. The only hurdle created by the AO is on account of this claim not made by way of filing of revised return. Claim of assessee is ought to be allowed, more particularly when there is no embargo applicable on the appellate authority to consider such claim as enunciated in Goetz (India) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT ] Accordingly, ground taken by the assessee is allowed. Appeal of the assessee is allowed. 2024 (12) TMI 765 Applicability of section 44BB - amount held to be received for provision of offshore services vessel - AO observed that as the vessel was provided by the assessee company for the purpose of providing services/facilities for extraction or production of mineral oil in India, therefore, such services fall within the provisions of section 44BB and that this section does not embargo any addition on the assessee to have earned for PE in India - AO has taken into consideration a letter issued from the assessee for withholding tax certificate u/s 197 of the Act wherein the assessee had claimed applicability of section 44BB. HELD THAT:- As no issue about taxability of receipt by a foreign resident, not having PE in India, from hire of vessel on time charter basis was examined in any form. So the reliance on the ONGC Case [ 2015 (7) TMI 91 - SUPREME COURT ] by the ld. Tax authorities was not justified. This issue has been examined in the case Smit Singapore Pte Ltd. [ 2020 (11) TMI 415 - ITAT MUMBAI ] wherein the issue was examined to some extent in the context of payment of royalty and it was held in para 18 that the hire charges were not royalty within the meaning of Article 12(3)(b) of India-Singapore Tax Treaty This aspect has been taken note of by the coordinate bench of Delhi in the case Baker Hughes Energy Technologies UK Ltd. [ 2023 (6) TMI 351 - ITAT DELHI ] and, dealing with the case of the assessee in that case that income of the assessee which is a tax resident of UK is not taxable in India since neither it had a permanent establishment in India nor the provisions of section 44B. As the payments received by the assessee are business receipts and the assessee does not have a PE in India. Therefore, the assessee is entitled to be benefitted of the DTAA provisions. Now, merely because of the fact that the assessee had applied for lower deduction certificate u/s 197 of the Act, that in itself cannot be a basis for imposing a tax liability as no admission against the interest of person is conclusive as far as it can be explained. To be more precise, determination of income and tax liability of a person cannot be decided based on concession given by any party at any stage of proceedings. If the assessee, in order to be cautious has sought this certificate u/s 197 of the Act, that cannot act as an estoppel. Thus, on that basis alone any adverse inference by the ld. tax authorities below was not justified. 2024 (12) TMI 764 Enhancement of income done by the ld. CIT(A) - loss should have been adjusted from exempt income of the Daman Units - Section 80IB deductions in light of the losses incurred by one unit - HELD THAT:- CIT(A) was of the firm belief that such loss from priority undertaking should have been set off against the profits from other priority undertaking at Daman Unit-II or III. The stand of the assessee was that it was not necessary that loss of one industrial undertaking should necessarily be adjusted against the profit of another eligible industrial undertaking. In support, strong reliance was placed on the decisions of CIT vs. Dewan Kraft System (P.) Ltd. [ 2007 (2) TMI 149 - DELHI HIGH COURT] CIT(A) was of the opinion that the decision of Synco Industries Limited [ 2008 (3) TMI 13 - SUPREME COURT ] squarely applies on the facts of the case in hand wherein the Hon ble Supreme Court has emphatically ruled that the assessee s contention that the profits derived from one industrial undertaking cannot be set off against the loss suffered from another industrial undertaking in view of Section 80-I(6) has no merits. CIT(A) observed that the Hon ble Supreme Court upheld that loss from the oil division of the assessee was required to be adjusted against the profits of the chemical division. CIT(A) further observed that the principle decided in the case of Dewan Kraft System (P.) Ltd. [ 2007 (2) TMI 149 - DELHI HIGH COURT] was considered and not approved by the Hon ble Supreme Court in the case of Synco Industries Ltd. (supra). Drawing support from the decision of the Hon ble Supreme Court (supra), the ld. CIT(A) was of the firm belief that the assessee was bound to set off the loss from one priority undertaking at Daman against profit from another priority undertaking at Daman. In our understanding, the Hon ble Supreme Court was seized with the question, whether a person is eligible for deduction under Chapter-VIA, when the gross total income of the assessee is determined as Nil. The Hon ble Supreme Court was of the opinion that if the gross total income of the assessee is Nil, there is no question of any deduction being allowed under Chapter VIA in computing the total income. This view has been followed by the Hon ble High Court wherein the High Court has also taken the view that deduction under Chapter VIA would be available only if the computation of gross total income as per the provisions of the Act, after setting off carried forward and unabsorbed depreciation of earlier years, is not Nil. The chart exhibited elsewhere clearly shows that in all the captioned assessment years under consideration, the assessee had positive gross total income from which it claimed deduction under Chapter VIA u/s 80I of the Act, in respect of eligible profits of Daman Units. In our considered opinion, the facts are totally distinguishable. We are of the considered view that enhancement done by the ld. CIT(A) is not correct and deserves to be set aside. The AO is directed to delete the impugned additions - Decided in favour of assessee. 2024 (12) TMI 763 Taxability of income in India - existence of PE in India - offshore supplies have been made by the assessee on the Indian port on disembarkation basis and the delivery of the goods is to be taken as having been made in India - profits from supplies made by the assessee on CIF basis are liable to be taxed in India on the ground that the sale is completed in India - HELD THAT:- The assessee has been taxed individually not and as Association of Person (AOP) with its consortium partner. The arguments of the Ld. AR advanced on behalf of the assessee are cogent and convincing to show that the SIPL is not the permanent establishment of the assessee and nothing has been brought on record by the revenue which may controvert the argument advanced and the material relied by the assessee in that regard. On the basis of the above discussion, we are of the considered opinion that the issue raised before the Tribunal in this relevant year is similar to the issue for A.Ys. 2018-19, 2019-20 [ 2023 (3) TMI 319 - ITAT MUMBAI ] and 2020-21 [ 2024 (4) TMI 796 - ITAT MUMBAI ]. Since the identical issue has been decided by the Ld. Coordinate Bench in earlier years in favour of the assessee as referred (supra) in the assessee s own case, therefore, we direct the Ld. AO to delete the impugned additions for the A.Y. 2021-22 also. 2024 (12) TMI 762 Disallowance u/s. 80IB(10) - residential project Venus Parkland - denial of deduction on the ground of non-completion of the particular project within five years i.e. on 31-03-2012, no BU certificate from AUDA of the 380 units of the project, allotment of more than one unit to one persons and non-maintenance of separate books of account of the residential project as required u/s. 80IB(10) - HELD THAT:-On appeal against these issues before Ld. CIT(A) who followed Jurisdictional High Court Judgement in assessee s own case for the A.Y. 2012-13 [ 2021 (11) TMI 764 - ITAT AHMEDABAD ] which was confirmed by the Hon ble Supreme Court [ 2023 (5) TMI 1404 - SC ORDER] deleted the addition and deduction of section 80IB granted to the appellant . Decided in favour of assessee. 2024 (12) TMI 761 TDS u/s 194H - incentives provided to dealers - non deduction of TDS on incentives constitutes payments in the nature of commission - HELD THAT:- We note that the risk and rewards of ownership of goods are transferred to dealers once the goods are invoiced and delivered to them in their place of business and hence, the relationship between the assessee and the dealers is only seller and buyer and not that of Principal-agent. Therefore, there is no agency between the assessee and the dealers and hence, the payments made towards promotional activities like Gold Coin Scheme, Atoot Rishtey Scheme, Foreign Scripts etc does not attract TDS u/s. 194H of the Act, which are provided as target incentive to increase the volume of sales. Since, these payments are made by the assessee towards a promotional activities to increase the sales volume of the products on Principal-Principal basis, we are of the considered view that, there is no relationship of Principal- Agent between the assessee and the dealers appointed in the State and hence, the provisions of section 194H of the Act is not applicable to these payments. As relying on Hon ble Apex Court decision in the case of Bharti Cellular Limited [ 2024 (3) TMI 41 - SUPREME COURT ] we are of the considered view that the payments made by the assessee towards promotional expenses in the form of various schemes are not liable for TDS u/s. 194H of the Act and hence, delete the addition. TDS u/s 194C - Disallowance towards EPF, PF ESI contribution of the job workers - As admitted fact that the assessee has made payments to ESI, PF authorities on behalf of labour supplier i.e. contractor. We note that the assessee has made payments towards EPF ESI contributions; however these payments are made in the name of the contractor, but not in the name of the assessee. Hence, these payments are nothing but payments made to the contractor towards his liabilities and hence, in our considered view, these payments are liable for TDS u/s. 194C. Therefore, we are inclined to confirm the order of the CIT(A) in disallowing this expenditure u/s. 40(a)(ia). 2024 (12) TMI 760 Penalty levied u/s.271(1)(c) - Appeal against quantum assessment is still pending - HELD THAT:- Bearing on the penalty as contented by assessee for the interest of natural justice and fair play, we set-aside the impugned order of the CIT(A) and direct him to pass orders [in the appeal preferred against levy of penalty u/s.271(1)(c)] after deciding the quantum appeal of the assessee for AY 2016-17. Assessee is at liberty to raise all the issues before the Ld.CIT(A) and the Ld.CIT(A) to decide the penalty appeal after passing/adjudicating the grounds of appeal preferred by the assessee against the assessment order for AY 2016-17. 2024 (12) TMI 759 Penalty u/s 271G - non-compliance to the notice u/s 92D(3) - HELD THAT:- Assessee has made the compliance after the expiry of statutory period of 60 days, as the Assessee responded to the notice dated 18.12.2018 by filing its response along with part details/documents on 25.03.2019, therefore considering the delay of 38 days as miniscule and the peculiar facts and circumstances of the case in totality as the Assessee is a foreign based company and was in the process of appointing new authorized representative and therefore sought further time by filing its letter dated 04.01.2019 but the AO extended the time only up to 10.01.2019 admittedly a shorter period which resulted into noncompliance, however subsequently the Assessee complied with the notices by filling relevant details/documents specifically on 25-03- 2019. Accordingly, the reasons submitted for non-compliance by the Assessee prima facie appears to be bonafide and unintentional and therefore considering the reasons for the minuscule delay in filing of the relevant documents, as reasonable and inadvertent, we are inclined to delete the penalty under consideration. Thus, the penalty under consideration is deleted. Appeal filed by the Assessee stands allowed. Customs 2024 (12) TMI 758 Non-Imposition of anti-dumping duty u/s 9A of the Customs Tariff Act 1975 - petitioner pointed out that the domestic industries have given up their right in terms of the recommendation made by the Directorate General of Trade Remedies, Department of Commerce, Ministry of Commerce and Industry, Government of India, in the Notification (Final Findings) F.No. 6/46/2020- DGTR dated 23.09.2021 for imposition of anti-dumping duty under Section 9A of the Customs Tariff Act, 1975 made by the designated authority, as well as, their claims on the basis of the order passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi. HELD THAT:- In view of the statement made, the special leave petition is dismissed as infructuous. 2024 (12) TMI 757 Clandestinely import of goods with an intention of avoiding huge amount of custom duty - allegation in the present case appears to be that although the consignments were declared to be containing Motherboard Casing with Power Supply, it was actually found that there were other electronic equipments also imported, which had not been declared - HELD THAT:- In the present case, it appears that the goods that were seized, were meant for delivery to the aforesaid entity at Delhi i.e. M/s. S. S. Overseas. There does not appear to be any material brought to the notice of this Court to indicate that the goods were actually meant for delivery to the applicant or his entity i.e. M/s. ACJ Computronix. The allegation in the present case appears to be that although the consignments were declared to be containing Motherboard Casing with Power Supply, it was actually found that there were other electronic equipments also imported, which had not been declared. It is a matter of record that the proprietor of M/s. S. S. Overseas was arrested and he was granted regular bail by the Competent Court at Delhi, on 23rd July 2024. It was observed in the order passed by the said Court that the entire goods have been already seized and considering the nature of allegations, even if custom duty is to be recovered, further physical custody of the said person was not necessary. This Court is of the opinion that considering the fact that the applicant, or his entity, was not even a consignee of the said goods and the statements brought to the notice of this Court only give an impression that the applicant may have had business relations with M/s. S. S. Overseas, without specific material to link the applicant with the aforesaid goods in the present case, the application can be allowed, so long as the applicant cooperates with the investigation. The goods have been already seized and the liability to pay custom duty would certainly be ascertained and foisted upon the responsible individuals in terms of the provisions of the Customs Act, 1962. The applicant is arrested on the file of Special Investigation and Intelligence Branch (Import), he shall be released on bail on furnishing PR Bond of Rs.50,000/- and one or two sureties in the like amount - applicant shall remain present before the office of the Special Investigating and Intelligence Branch (Import) (SSIB) on 16th and 17th December 2024 between 10:00 a.m. and 12:00 noon and thereafter, as and when required by respondent No. 1. The applicant shall cooperate with the investigation - The application is disposed of. 2024 (12) TMI 756 Revocation of Customs Broker license - forfeiture of the security deposit - levy of penalty - no requirement under Regulation 10(a) of CBLR, 2018 for the customs broker to have personally met the proprietor or any authorized person - HELD THAT:- M/s Bright Clearing [ 2022 (11) TMI 935 - CESTAT NEW DELHI ], after referring to the obligation of the customs broker, held that the burden is very liberal open and therefore, the scheme and its potential misuse cannot be put at the door of the customs broker. Just as the officers responsibility ends doing this part of the job (which may be of issuing the registration without physical verification or allowing the exports without assessing the documents or examining the goods) the customs broker s responsibility ends with fulfilling this responsibility under Regulation 10 of the CBLR, 2018. The dispute in these appeals relates to CBLR (10) (n), which, the Tribunal has discussed, did not require any physical verification of the address of the exporter/importer. The record shows that in this case, M/s Swastik Enterprises and M/s Ganesh Exports produced GSTIN and IEC certificates that were issued to them by the competent authority. The department has not doubted their identities. The department also issued the first-time export/ import approvals given public notice dated 17 September 2013. Upon verification of all these facts, the respondent may have processed the export papers of these two entities. Considering all these factors and the approach suggested in M/s Bright Clearing, it is not deemed appropriate to fault the CESTAT s order exercising the limited jurisdiction of entertaining an appeal only on substantial questions of law. The substantial questions of law as proposed do not arise in this appeal. The questions are mainly issues of re-appreciation of facts, and therefore, they cannot be styled as questions of law, much less still substantial questions of law - Appeal dismissed. 2024 (12) TMI 755 Challenge to seizure proceedings and detention receipt - smuggling of Gold - personal effects and personal jewellery - prohibited goods or not - HELD THAT:- A perusal of the decision cited by the Petitioner i.e., NATHAN NARAYANSAMY VERSUS COMMISSIONER OF CUSTOMS [ 2023 (9) TMI 1549 - DELHI HIGH COURT] would show that in a similar case, this Court has held that personal effects would be exempt especially if they are in the form of ornaments in case of a foreigner. Rule 5 of Baggage Rules, 2016 would not apply in terms of Proviso to Rule 3 of the said Rules. In the opinion of this Court, the present case would clearly be covered by the said judgment inasmuch as it is not controverted that the goods which have been detained are a necklace and bracelet weighing 0.178 gms. Under such circumstances, considering that this is 18 carat gold jewellery which was being worn by the tourist who was travelling from Azerbaijan to India, the same would not be liable to be seized and the detention receipt is accordingly quashed - let the personal gold jewellery be released to the Petitioner within a period of one week. Petition disposed off. 2024 (12) TMI 754 Jurisdiction to issue SCN - prime ground taken for challenging the show cause notices by amending the writ petitions is that there is no jurisdiction with the officers of D.R.I. who have issued the impugned show cause notices - Illegal retention of seized documents and articles - no legal sanction has been taken before starting the investigation sought to be carried out - HELD THAT:- The question in dispute is no longer res integra and the same has been finally settled by the Hon ble Apex Court in the case of M/s Canon India Pvt. Ltd. [ 2024 (11) TMI 391 - SUPREME COURT (LB) ], wherein it has been concluded ' DRI officers came to be appointed as the officers of customs vide Notification No. 19/90-Cus (N.T.) dated 26.04.1990 issued by the Department of Revenue, Ministry of Finance, Government of India. This notification later came to be superseded by Notification No. 17/2002 dated 07.03.2002 issued by the Department of Revenue, Ministry of Finance, Government of India, to account for administrative changes.' Keeping in view the order passed by the Supreme Court in M/s Canon India Pvt. Ltd., the DRI officer would be held to be a proper officer for issuing of notice and conducting of investigation. Accordingly, the contention of the petitioner(s) that the DRI officer would have no jurisdiction, cannot be accepted. Al the writ petitions are disposed of. 2024 (12) TMI 753 Revocation of the license - Forfeiture of security deposit - imposition of penalty - timelines for initiating proceedings for revocation of license - proceedings are beyond the period of ninety days - HELD THAT:- The power to suspend the licence is traceable to Regulation 16 (1) of the Customs Brokers Licensing Regulations, 2018. In terms of Regulation 16 (1), the Commissioner of Customs in appropriate cases where immediate action is required, is empowered to suspend the licence of a Customs broker, where an enquiry against such Customs broker is pending or contemplated. No doubt, a preliminary enquiry was conducted by the Customs authorities before suspending the licence on 25.3.2022. The said preliminary enquiry can be construed only for the purpose of the proceedings initiated under Regulation 16 (1). It is also evidenced by documents that after the suspension of the licence, a further enquiry was conducted and an offence report was drawn on 1.9.2022. It is based on the said report, which was drawn on 1.9.2022 that the proceedings for revocation of the licence was initiated by the Customs authorities. A reading of Regulations 16 (1) and 17 of the Customs Brokers Licensing Regulations, 2018 makes it explicitly clear that the powers to suspend the licence and the power to revoke the licence are distinct and different. No doubt, Regulation 17 (1) of the Regulations of 2018 mandates that the notice to revoke the licence has to be issued within a period of ninety days from the date of the report - The mere fact that a preliminary enquiry was conducted for the purpose of ascertaining the facts to determine as to whether a prima facie case for suspension of the licence with immediate effect has been made out or not by itself will not enable the Customs broker to contend that the proceedings for revocation, if any, ought to have been taken within ninety days from the date of the said report. Therefore, we find no merit in the contention raised by the learned counsel for the appellant. A reading of Regulation 17 (1) of the Customs Brokers Licensing Regulations, 2018 shows that the Commissioner of Customs is under an obligation to issue a notice to show cause stating the grounds on which it is proposed to revoke the licence. However, the consequence of not issuing the notice within the aforesaid period is nowhere laid down in the Regulations. A reading of Regulation 10 (n) undoubtedly shows that it is the solemn obligation of the Customs broker to verify the details of the exporter. As a matter of fact, there were other instances also wherein proceedings were initiated against the appellant for revocation of the licence on violation of the Regulations. In other words, the consistent case of the authorities is that the appellant is a habitual offender of the violation of Regulation 10 of the Customs Brokers Licensing Regulations, 2018. It is in the above backdrop that the Tribunal proceeded to consider the appeal and found that the proceedings initiated against the appellant are proper - though it was not within the domain of the Tribunal to have passed the order in the nature which is impugned in this appeal, it is refrained from commenting further on the order, since it meets the interest of justice. It is found that no substantial question of law arises for consideration in this appeal - appellant has not made out a case for entertaining the appeal - appeal dismissed. 2024 (12) TMI 752 Interest on sanctioned refund - relevant date for calculation of interest - whether the appellant is eligible for interest on the sanctioned refund after three months from the date of application or after the date of order of Commissioner (Appeals) remanding the matter to the adjudicating authority for reconsideration of the issue of refund? - HELD THAT:- The Learned Commissioner (Appeals) has denied the grant of interest only on the basis of explanation appended to Section 27A. In this regard it is found that the said explanation is not applicable in the present case for the reason that the refund sanction order was passed by the Deputy Commissioner of Customs. Therefore, as per Section 27A, the appellant is entitled for the interest on the sanctioned refund after three months from the date of application. This issue has been considered time and again particularly by the Hon ble Supreme Court in the case of RANBAXY LABORATORIES LTD. VERSUS UNION OF INDIA AND ORS. [ 2011 (10) TMI 16 - SUPREME COURT] where it was held that ' the liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made.' The appellant is rightly entitled for the grant of interest on the sanctioned refund from the date, after three months from the date of application, till the date of sanction of refund - the impugned order is set aside - Appeal allowed. 2024 (12) TMI 751 Classification of goods under Customs N/N. 50/2017-Cus. and subsequent amendment - Connectors - It is the case of the Revenue that the Connectors in question / under import were classifiable under CTH 85177090 that attracted 10% BCD vide Customs N/N. 57/2017, which has been confirmed in both the OIO as well as in the impugned OIA - HELD THAT:- The Department cannot take divergent stands especially when they themselves admit that the goods in question in this appeal are Connectors of cellular phones which were held to be classifiable under CTH 85177090 vide OIO dt. 23.12.2019 which came to be upheld in the Impugned Order--in--Appeal. The alternate claim of the appellant for the benefit of S.No.6A of N/N. 57/2017-Cus. (supra) has merit - the impugned order is set aside - appeal allowed. 2024 (12) TMI 750 Refund of excess infrastructure cess duty paid by the appellant at the time of import under self assessment - rejection of refund on the ground that the assessee did not challenge the assessment order - HELD THAT:- The appellant had filed both the bills of entry under self assessment and paid the duty @ 4%. The said assessment had become final. Subsequently, if the appellant had to avail the benefit of the concessional rate of duty @ of 1% under the notification, they were required to get the bills of entry reassessed, and thereafter, make the refund application but the appellant made the refund claim without challenging the self assessment of the bills of entry, which is clearly against the dictum laid down by the Apex Court in ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [ 2019 (9) TMI 802 - SUPREME COURT (LB)] . There are no infirmity in the impugned order rejecting the refund claim without seeking reassessment of the bill of entry and hence the same is affirmed - The appeal is, accordingly dismissed. 2024 (12) TMI 749 Seeking stay of the impugned order - Violation of principles of natural justice - denial of cross-examination of witnesses in quasi-judicial proceedings - mis-declaration of quantity and value of goods - HELD THAT:- The appellant instead of replying to the notice, vide letter dated 25.04.2015 requested for one months time to reply to the notice, which was granted up to 31.05.2015 and personal hearing was scheduled on 03.06.2015. The appellant once again vide his letter dated 25.05.2015 submitted that due to his illness, he was not in a position to reply to the notice and requested for 3 months time and time was granted again till 25.06.2015. Once again, the appellant vide letter dated 18.06.2015 submitted that he was bedridden and was advised complete rest and sought adjournment for filing the reply and to attend the personal hearing. The personal hearing was rescheduled to 16.07.2015 and the appellant was informed that reply to the notice could also be submitted on or before that date. The appellant once again vide letter dated 15.07.2015 submitted that that he was not in a position to reply to the notice and requested further time sought for another 3 months time. It is seen that the show-cause notice was issued on 31st March 2015, the appellant went on delaying to reply to the show-cause notice with one or the other pretext and nearly after 5 months, reply was filed on 24.08.2015. In his reply, the appellant had challenged legality of the show-cause notice and various proceedings during the investigation based on legal infirmities but nowhere has he stated specific reasons for cross-examination of the officers and other individuals - There is no mention of the name of the officers or any individuals. Only on 14.09.2015, the appellant submitted a letter providing the list of witnesses to be cross-examined and the reasons mentioned against these individuals are for having recorded statement, having prepared the inventory and arrested the appellant, having searched the shop premises of the appellant, having filed a reply to the retraction filed by the appellant, against the statement of the co-noticee and the witness who signed the Mahazar and finally stating that there was a complaint against the 9th witness, hence needs to be cross-examined. From the records placed, there are no reasons specified by the appellant for cross-examination of the above witnesses. There is no doubt that the appellant had been delaying in filing reply to the show-cause notice and now delaying in the progress of the adjudication proceedings by seeking cross-examination on flimsy grounds. The Supreme Court in the case of Kanungo and Company vs. Collector of Customs, Calcutta and Others [ 1972 (2) TMI 35 - SUPREME COURT ], wherein it was observed that ' there is no force in the third contention of the appellant . In the instant case the show-cause notice has relied upon various e-mails and other documents retrieved from the appellants premises and the officers concerned have only prepared the documents based on the details found in the consignment and from the documents retrieved from their computers and hence the cross examination does not serve any purpose.' In the case of N.S. Mahesh Vs. Commissioner of Customs, Cochin [ 2015 (11) TMI 1566 - KERALA HIGH COURT ], the Hon ble High Court of Kerala with regard to cross-examination of departmental officers and the co-noticee has observed ' On a perusal of Ext.P5 order, and the reasons given by the respondent to deny the request of the petitioner for cross-examination, I do not find any illegality in the said order that would warrant an interference with the said order in these proceedings under Article 226 of the Constitution of India.' There are no reason even in the case of Shri N.S. Mahesh, the need for cross-examination, since his statements do not find mention in the reply to the show-cause notice and the appellant has not contested the statement with specific reasons. Similarly, Shri O. Kasim Kunju was just a witness to the inventory and Mahazar and since none of these have been contested, the rejection of cross-examination is upheld. Hence, there are no merit in the appeal filed by the appellant and the same is dismissed. Appeal dismissed. 2024 (12) TMI 748 Seeking grant of anticipatory bail - mis-declaration of imported goods - suppression of documents - HELD THAT:- Prima facie from the material placed on record, the present applicant is allegedly connected with the said import of goods and also the witnesses had stated about past consignment being cleared, in which applicant had alleged nexus. If these aspects are considered, then while dealing with anticipatory bail, inference cannot be drawn that, present applicant is innocent and has no concern with the interception carried out on 29/05/2024 and 30/05/2024. The respondent on ascertaining value of the said goods, through Customs empaneled chartered engineer the value of the goods is Rs. 4,11,46,352/-. Conduct of applicant - suppression of documents - HELD THAT:- The respondent had issued summons to the applicant and had demanded all related documents regarding said shipment such as, sale and purchase invoice in between M/s. ACJ Computronix and S. S. Overseas, all transactions, balance sheet, profit and loss account etc. The applicant is issued with the 7 summonses. In this regard the applicant has submitted that, he has submitted all documents - Prima facie applicant has not supplied the invoices of the transaction between his firm and M/s. S. S. Overseas. The applicant had never appeared before customs authority on the pretext of sickness, business tour etc. - the applicant had suppressed the relevant documents from the custom authority. In such circumstances, though there is no bill of entry, the applicant has alleged nexus and his custodial interrogation becomes necessary. This cannot be a ground or a plea of parity. The facts in the present matter, are entirely different and conduct of the applicant has to be kept in mind. For all these reasons, the present applicant is not entitled for further protection - bail application rejected. Corporate Laws 2024 (12) TMI 747 Dismissal of application filed by the appellant herein by which the appellant had offered the attachment of a flat in lieu of the requisite pre-deposit as mandated under Section 43 (5) of the RERA - Section 58 of the Real Estate (Regulation Development) Act, 2016 - HELD THAT:- The learned NCLAT has clarified that the Insolvency Resolution Process is only with respect to one of the projects being undertaken by the appellant company, which, we are informed, is not the same as the one which is the subject matter of the proceedings before the Real Estate Appellate Tribunal. The appellant, therefore, cannot seek any benefit of the moratorium that has been issued by the learned NCLT for seeking an exemption from making the pre-deposit in terms of Section 43 (5) of the RERA. There are no merit in the submission of the learned senior counsel for the appellant that as the appellant is offering security of a flat, it should be granted an exemption from making the pre-deposit in terms of Section 43 (5) of RERA. The condition of making a pre-deposit as a pre-condition for the hearing of the appeal has been upheld by the Supreme Court in New Tech Promoters and Developers Pvt. Ltd. vs. State of Uttar Pradesh Ors. [ 2021 (12) TMI 892 - SUPREME COURT ]. The said provision does not leave any scope for granting an exemption from making the pre-deposit and instead accepting a security. There are no merit in the present appeal. The same is, accordingly, dismissed. Insolvency & Bankruptcy 2024 (12) TMI 746 Condonation of 16 days of delay in filing Appeal - Appellant herein is not a party to the proceedings - condonable period u/s 61(1) of I B Code, 2016 - HELD THAT:- It is seen that admittedly here, the knowledge of the Impugned Order was attributed on 19.08.2024 to the Appellant herein, who is not a party to the proceedings, that if the time taken to file the Appeal is contemplated to be determined from the date of knowledge, the Appeal filed by the Appellant, will be well within the proviso to Sub Section 2 of Section 61 of I B Code, 2016, and that, since, he was not a party to the proceedings and has sought for a complete exemption from filing the Certified copy of the Impugned Judgment by filing an Exemption Application i.e. IA No. 1010 / 2024, the delay in filing the Appeal can be denied to be condoned merely because, he has not applied for the Certified copy within 30 days from the date of the Judgment and even the date of knowledge i.e. 19.08.2024 which was an issue dealt in the matters of V. Nagarajan V. SKS Ispat Power Limited [ 2021 (10) TMI 941 - SUPREME COURT (LB)] . Since the law provides the latitude for a complete exemption from supplying the Certified copy, failure to apply for the Certified copy within the prescribed period of limitation from the date of knowledge i.e. 19.08.2024, since applied only on 08.10.2024, may be fatal enough to deny condonation of delay and that too, in the circumstances of the instant case, where the Appeal has been preferred on 14.09.2024 i.e., it was beyond the upper 45 days of time period prescribed under the proviso to Sub Section 2 of Section 61 of the I B Code, 2016, if computed from the date of pronouncement of the Judgment. The Appellant will not be falling within the proviso to Sub Section 2 of Section 61 of the I B Code, 2016. Thus, the instant Appeal deserves rejection on the ground of limitation. Appeal dismissed. PMLA 2024 (12) TMI 745 Money Laundering - predicate offence - Legitimacy of recruitment procedures for various educational posts - HELD THAT:- It is worth reiterating that this Court, through a catena of decisions, has consistently emphasized that prolonged incarceration of an accused awaiting trial unjustly deprives them of their right to personal liberty. Even statutory embargoes on the grant of bail must yield when weighed against the paramount importance of the right to life and liberty under Article 21 of the Constitution, particularly in cases where such incarceration extends over an unreasonably long period without conclusion of trial. Equally well-established is the principle that the grant of bail must be determined based on the unique circumstances of each case, balanced against settled factors such as the gravity of the offence, the nature of the allegations, likelihood of interference with the ongoing investigation, the possibility of evidence tampering, threat or influence over the material witnesses, the societal impact of such release, and the risk of the accused absconding among others. Since the charge sheet in the ED Case (ECIR No. KLZO- 11/19/2022) has already been filed but charges are yet to be framed, the Trial Court is directed to decide on framing of charges before the commencement of the winter vacations and/or before 31.12.2024, whichever is earlier - the Trial Court shall thereafter fix a date within the second and third week of January 2025 for recording the statements of such prosecution witnesses who are the most material or vulnerable - petition disposed off. 2024 (12) TMI 744 Money Laundering - proceeds of crime - scheduled offence - misappropriation of funds as well as abuse of power under Mahatma Gandhi National Rural Guarantee Scheme - whether a property derived or obtained directly or indirectly out of the criminal activity relating to scheduled offence can alone be considered to be the proceeds of crime or in absence of the availability of such property, any other such property of equivalent value would also fall in the definition of proceeds of crime ? HELD THAT:- The judgment in SHRI SADANANDA NAYAK VERSUS THE DEPUTY DIRECTOR DIRECTORATE OF ENFORCEMENT, BHUBANESWAR [ 2024 (10) TMI 1619 - APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI] deals with the issue and it is not only after referring to the judgment of Punjab and Haryana High Court in the case of Seema Garg [ 2021 (4) TMI 1247 - SUPREME COURT ] but even other judgments of High Courts and Supreme Court. However, reliance has been made on the judgment of the Apex Court in the case of Vijay Madanlal Choudhary [ 2022 (7) TMI 1316 - SUPREME COURT (LB) ] apart from the judgment of Delhi High Court in the case of Prakash Industries (supra). In the case of Prakash Industries [ 2022 (7) TMI 877 - DELHI HIGH COURT ], elaborate discussion to define the proceeds of crime has been made where the judgment of the Punjab and Haryana High Court in the case of Seema Garg was also referred but has been distinguished because Punjab and Haryana High Court taken only two limbs of the definition of proceeds of crime while it has three limbs. The specific argument raised before the Apex Court in the case of Vijay Madanlal Choudhary to make second and third limb together was not accepted i.e. other than the property acquired or derived directly or indirectly as a result of criminal activity, the property can be attached only when it is sent outside India. In that case, the property of equivalent value can be attached. The Adjudicating Authority committed grave illegality in taking narrow meaning or giving a different construction to the definition of proceeds of crime than legislated by the legislature. The courts are having no authority to nullify any definition though Constitutional Court declared it to be ultra vires. It is found that the reasons to cause interference in the impugned order of the Adjudicating Authority which is set aside with the remand of the case for a fresh consideration. It would be within the period specified in the statute and for that the parties would remain present before the Adjudicating Authority on 10.12.2024. The appeal is allowed. Service Tax 2024 (12) TMI 743 Levy of VAT or service tax - Service tax demand based on discrepancies between income tax and service tax returns - Section 66D(e) of the Finance Act, 1994 - HELD THAT:- In the present case, the show cause notice was issued on the basis of income tax returns and gross receipts shown in Form 26-AS. Further, perusal of the invoices produced on record clearly shows that the appellant has paid the VAT on all the goods supplied during the service rendered by the appellant. This is also an admitted fact that the appellant has paid the VAT on all the parts supplied at the time of servicing of the vehicles. The Adjudicating Authority has misinterpreted the circular dated 23.08.2007 and has not produced the entire circular, which was subsequently produced in the decision of the Tribunal in the case of M G Motors vs. CCE, Alwar [ 2020 (4) TMI 380 - CESTAT NEW DELHI ]. It is found that this issue is no more res integra and has been elaborately discussed by the Principal Bench of the Tribunal in the case of M G Motors vs. CCE, Alwar, wherein identical issue was involved and the Tribunal after relying upon the decision Samtech Industries vs. CCE, Kanpur [ 2014 (4) TMI 995 - CESTAT NEW DELHI ] has held that when invoices are issued showing the value of the goods used and the service charges separately, service tax would be chargeable only on the service/labour charges and the value of the goods used for repair would not be includable in the assessable value of the services. The impugned order is not sustainable in law and is liable to be set aside - Appeal allowed. 2024 (12) TMI 742 Quantum of penalty u/s 78 of the Finance Act, 1994 - HELD THAT:- The penalty under Section 78 can be set aside when a sufficient cost for non-payment of service tax is shown by the assessee. In the present case it is undisputed fact that the entire transaction was recorded by the appellant in the books of account and the service tax liability has been admitted by the appellant which was discharged well before the issuance of show cause notice and interest was also paid. As per Section 73(3) of Finance Act, 1994, it is clear that if the assessee pays the tax liability along with interest before issuance of show cause notice, the entire case stand closed and no show cause notice should be issued. As discussed, since, the appellant did not have mala fide intention, their case is not hit by section 73 (4) also. Therefore, considering the overall facts and circumstances of the case, the appellant has been able to show the reasonable cause for nonpayment of service tax. Therefore, penalty Imposed under Section 78 can be set aside, invoking section 80 as well as invoking Section 73(3) of the Finance Act. Penalty set aside - appeal allowed. 2024 (12) TMI 741 Recovery of service tax not paid or short paid with interest and penalty - HELD THAT:- It is found that the first demand which has been made in respect of the value of material such as grass, plants, manure, pesticides etc. supplied for landscaping activities under the category of Interior Decorator Services has to be included the said value. There are no merits in the inclusion of the said value in the value of the taxable services for the reason that the issue has been settled by the various decisions in this regard. In the case of M/S AGRAWAL COLOUR ADVANCE PHOTO SYSTEM, M/S AGRAWAL COLOUR QUICK SYSTEM, M/S AGRAWAL COLOUR PHOTO INDUSTRY VERSUS COMMISSIONER OF CENTRAL EXCISE AND ANOTHER [ 2020 (4) TMI 799 - MADHYA PRADESH HIGH COURT] Hon ble Madhya Pradesh High Court has held that value of the material supplied while providing the taxable services cannot be included in the value of taxable services, even if the material is consumed for providing the taxable service. Hence there are no merits in the demand made on this account. In respect of other two demands the only difference which is observed between the value of taxable services as per ST-3 returns and the figures in the Financial Accounts has been explained by the appellant to be for the reason that the books of account was maintained on accrual basis whereas service tax was paid on receipt basis. Commissioner (Appeals) have in absence of any evidence to substantiate the same held that in favour of the demands, in any case if service tax has been paid on the entire value then their cannot be demand for service tax second time. Appellant can establish the same by way of production of the said documents before the Original Authority. As the demand of service tax made by this order is set aside, the penalties are also set aside in respect of first demand. In respect of the other demands for which the matter remanded the quantum of penalty can be determining only after ascertainment of the tax payable after proper reconciliation. The demand made in respect of the cost of material supplied for providing landscaping services under the category of Interior Decorator Services set aside - matter is remanded for ascertaining the factum of payment of service tax on account of the difference in the manner of the figures in the balance sheet which were higher than those in the ST-3 returns during the same period - Penalties are set aside. Appeal is partly allowed by way of remand. 2024 (12) TMI 740 Levy of service tax - Commercial or Industrial construction services - Supply of tangible goods services - Manpower Recruitment and Supply services - GTA services - appellant did not apply for inclusion of these services in his service tax registration - suppression of facts or not - extended period of limitation. Demand under Construction of Commercial or Industrial Building and Civil Structure - HELD THAT:- Apart from contradictory stand of department in the show cause notice, treatment under the provisions of Income tax Act would not be relevant to determine taxability of services under the Finance Act, 1994, accordingly, demand of service tax on this count cannot be sustained. Demand of service tax under the category of Supply of Tangible Goods services - Demand of tax under the category of Goods Transport Agency (GTA) services - HELD THAT:- Upon perusal of relevant facts from the available records, it is found that demand of tax under the category of supply of tangible goods service and GTA service pertains to transportation of goods carried out by the appellant by his own trucks and that appellant has neither collected any tax nor issued consignment notes; be so, the said activity is not taxable either prior to negative list regime or even after the same is specifically included under 66D (p) of the Finance Act, 1994 - entire approach in the show cause notice of determining taxability is incorrect; taxability could not have been determined based on inferences from how the income is treated under other statues or nomenclature of income shown in the balance sheet. There is no reliable material based on which it can be said that appellant has provided taxable services as claimed by the revenue. In that view, burden of proving provision of taxable service stands not discharged by revenue. Consequently, demand of tax on construction service, supply of tangible goods and GTA cannot be sustained. Demand of tax under the category of Manpower Recruitment and Supply Agency for supply of labour to Ms. Rati Engineering and supply of tangible goods services for Machinery - HELD THAT:- Since, demand of service tax under the aforesaid categories and income is not tenable for the disputed period, consequently, appellant s claim of eligibility to threshold exemption in terms of notification no 8/2003 is correct. Extended period of limitation - HELD THAT:- Since impugned order is not tenable on merits, no finding given on limitation. The impugned order is set aside - appeal allowed. 2024 (12) TMI 739 Refund claim - whether amount paid during the investigation as well as amount paid during the pendency of appeal proceeding before lower appellate authority by challenging order-in-original as well as order-in-appeal considered as deposit of the payment of tax and for which limitation period under section 11B will apply or not? - HELD THAT:- It is found that the part refund was rejected and the same was upheld by the Commissioner (Appeals) on the ground that the said amount is not in the nature of pre-deposit. Accordingly, the Section 11B is applicable. Hence, the refund filed after the stipulated period of one year was rejected on the ground of time bar. Prima facie view that out of the total amount which are in the same nature, how the part can be treated as pre-deposit and remaining is other than pre-deposit. Therefore this issue also needs reconsideration. The impugned order is set aside - appeal allowed by way of remand to the adjudicating authority for passing a fresh order. Central Excise 2024 (12) TMI 738 Clandestine manufacture and removal of goods without keeping record - whole case has been made out on the basis of certain documents recovered from the possession of third party who claims to be accountant at the residence of the co-appellant - Admissibility of evidence without cross-examination of witnesses - violation of the provisions of Section 9 D of the erstwhile Central Excise Act, 1944. Whether in the absence of giving cross-examination to the witnesses, whose statements have been relied upon to implicate the appellants in the proceedings, is admissible or not? - HELD THAT:- The statements recorded during the course of investigation in the absence of any examination in Chief, thereafter, cross examination to the appellants are not sustainable. Therefore, on the basis of the statements, which have been relied upon by the authorities below, the demand cannot be raised. Whether the documents recovered from the possession of the third party and without any corroboration thereof, can the demand be raised against the appellants? - HELD THAT:- Whole of the demand raised against the appellant is without proper investigation and without any corroborative evidence/documents or otherwise, the allegation against the appellants on the clandestine manufacture and clearance of the goods, is not sustainable. Whether the investigation done is not proper and having lacuna and as any suppliers/buyers/transporters or any documents, which could have been visited easily from the name and address and available on record, the demand can be raised against the appellants or not? - HELD THAT:- Although the Revenue was having every documents which were recovered from the possession of Shri Sati Ram to allege clandestine manufacture and removal of goods, but the investigation did not bother to corroborate the evidence by way of verifying the veracity of the documents from supplier of the raw materials, buyer of the finished goods, transporter or commission agent etc. or other, whose details were available in those documents - whole of the investigation is faulty and on the basis of the faulty investigation, it cannot be alleged that the appellants were engaged in the activities of clandestine manufacture and clearance of excisable goods. There are no merit in the impugned order, therefore, the proceedings against the appellants are not sustainable and no demand can be raised against the appellants. Consequently, no penalties are imposable on the appellants. The impugned order set aside - appeal allowed. 2024 (12) TMI 737 Duty demand on excess storage of Fatty Acid - confirmation of demand is on the basis of the report received from the Delhi Commissionerate indicating that the Appellants have sold substantial quantity of goods at much lower price in the guise of stock transfer to M/s. Mayur Sales Corporation and M/s. Sunrise Enterprise, which were found to be nonexistent - HELD THAT:- The officers of the Delhi Commissionerate conducted verification and found that the two dealers namely, M/s. Mayur Sales Corporation and M/s. Sunrise Enterprise were nonexistent. Thus, it is observed that there is no truth in the submission of the appellant that no verification was conducted by the department to ascertain the existence of the two dealers. As the verification conducted by the officers of Delhi Commissionerate revealed the nonexistence of the two dealers, the demand confirmed on account of undervaluation of the goods cleared to these two dealers in the impugned order, is sustainable. Accordingly, the demand of Rs.5,68,101/- confirmed in the impugned order along with interest upheld. As the suppression of value has been established, the penalty equal to the duty imposed upheld on this count. Benefit of the N/N. 10/96-CE dated 23.07.1996 - HELD THAT:- The appellant would not be eligible for the benefit of notification 10/96-CE, to the extent of clearance of traded goods cleared during the period mentioned supra, proportionately. Accordingly, the denial of the benefit of notification 10/96-CE for all the goods manufactured and cleared is legally not sustainable. The benefit of notification 10/96-CE is not available to the appellant proportionately to the extent of value of the traded goods cleared by the appellant in the containers and jars. From the impugned order, we observe that demands of Rs.27,92,810/- and 50,95,061/- has been confirmed by denying the exemption 10/96-CE for all the goods. In view of the observations, the benefit is to be denied only proportional to the value of the traded goods. As the segregation of value of traded goods has not been done in the impugned order, these demands set aside and this issue remanded back to the adjudicating authority to deny the benefit of notification 10/96-CE proportional to the value of traded goods cleared by the appellant during the period in which traded goods were cleared in tin containers from 29.05.2008 and in poly jars from 01.04.2008. Demand of duty of Rs.53,38,184/- on account of Clandestine Removal of 1157.346 MT of Fatty Acid in the guise of Refined Palm Oil - HELD THAT:- The conclusion in the Order-in-Original that laboratory register shows content of FFA (Free Fatty Acid) range 4.8 to 5.6% in crude palm oil in majority cases does not in any way proof that RPO (D)/RPO(F) which are admittedly inferior quality RPO is Fatty Acid not RPO. It is observed that the Annexure C-6 does not reflect any comparison of the document mentioned in the Para iv of the impugned order. The said annexure refers to four seized documents namely 3/BBRL/FY08 and 19/BBRL/FTY/08 to 22/BBRL/FTY/08.In fact there is no record of a comparison of the said documents as referred to the order-in-original - the conclusion arrived at by the adjudicating authority that Fatty Acid has been removed in excess is totally baseless - there is no such comparative chart and department has failed to provide even an iota of proof as to excess removal of Fatty Acid or removal of Fatty Acid in the garb of RPO. The allegation of clandestine clearance is of serious nature and hence there should be tangible evidence of clandestine manufacture and clearance and not merely inferences or unwarranted assumptions. In the present case, it is observed that the demand has been confirmed purely on assumption basis. There is no evidence of actual removal of unaccounted finished goods from the factory without payment of duty. No finished goods cleared clandestinely has been recovered outside the factory. The department has not identified any purchasers of the clandestinely cleared finished goods. There is no corroborative evidence in the form of receipt of sale proceeds, whether by cheque or by cash, of such goods by the manufacturer or persons authorized by him - In the absence of any such evidence to support the clandestine clearance, we hold that the demand of Rs.53,38,184/- confirmed in the impugned order on account of clandestine clearance is not sustainable. Penalties imposed on the Directors of the appellant-company - HELD THAT:- The penalty has been imposed for their role in the commission of the alleged offence. From the findings, it is observed that the allegation of under valuation of goods cleared to non-existent dealers has been sustained. The allegation of irregular availment of the benefit of exemption notification 10/96-CE is partly sustained and the allegation of clandestine removal of goods is not sustained. Considering the roles played by the appellants, it is observed that the penalties imposed on the Directors of the appellant company is on the higher side, which need to be reduced in proportion to the offence committed - the penalties imposed Shri. Deepak Keshan and Shri. Rahul Nangalia Directors of the Appellant-company, reduced from Rs.1,00,000/- to Rs.50,000/- each. Application disposed off. 2024 (12) TMI 736 Entitlement to Cenvat credit on the strength of an endorsed bill of entry - Rule 9 of Cenvat Credit Rules, 2004 - HELD THAT:- There is catena of judgments wherein this issue has been considered and it was held that even on the endorsed bill of entry, the cenvat credit is admissible. In the case of M/s. Darshan industries [ 2003 (9) TMI 696 - CESTAT, MUMBAI] , the Hon ble Tribunal has held that ' We are in complete agreement with the view taken by the Rajasthan High Court in holding that on the basis of the endorsed invoices issued by the intermediatory purchaser and the invoices issued by the manufacturer, the assessee shall be entitled to claim the credit on the goods, on which the manufacturer has paid the duty.' In view of the judgment, it is settled that even on the strength of endorsed bill of entry, cenvat credit is admissible. It is found that it is not only the endorsed bill of entry but the respondent were issued importer invoice also which is otherwise a valid document for availing the cenvat credit in terms of Rule 9 of Cenvat Credit Rules, 2004. Therefore, since, the respondent are also receiving the importer s invoice, the cenvat credit is admissible. Accordingly, the view that there is absolutely no infirmity in the impugned order. Hence, the impugned order is upheld - Revenue s appeal is dismissed. 2024 (12) TMI 735 Reversal of Cenvat credit in terms of Rule 6(3)(i) of CCR - non-maintenance of separate accounts for dutiable and exempted goods - tooling fixtures - HELD THAT:- The identical issue as involved in the present case was already decided in favour of the assessee in the case of Needle Industries (India) Private Ltd. Versus Commissioner of Central Excise, Salem [ 2014 (8) TMI 980 - CESTAT CHENNAI] where it was held that ' these items are intermediate products captively used in the manufacture of dutiable final product and therefore, Cenvat credit cannot be denied.' It is observed that the Appellant is also eligible to avail Cenvat Credit in terms of CBEC Circular No. 665/56/2002-CX dated 25.09.2002 wherein it was clarified that Cenvat credit should not be denied on the capital goods used in manufacturing of intermediate goods exempt from payment of duty which are used captively in the manufacture of finished goods chargeable to duty. The demand raised cannot sustain and requires to be set aside - Since the demand itself cannot be sustained, the invocation of extended period and imposition of penalty does not arise. The impugned Order-in-Original No. 02/2016(CE) dated 29.01.2016 is set aside - appeal is allowed. 2024 (12) TMI 734 Classification of goods - animal feed supplements which contains ingredients such as calcium, magnesium, phosphorus, vitamin B12 and vitamin D3 - to be classified under Heading 3003 or 3004 of Schedule to Central Excise Tariff Act, 1985? - HELD THAT:- The subject goods are having nutrient supplements which do not find any mention in British Pharmacopoeia or Indian Pharmacopoeia and which are not prescribed by veterinary doctors for cure of any ailment and that though the doses are prescribed, that does not mean that they are medicaments. The original authority has in order-in-original impugned, has rejected the applicability of this Tribunal s decision in the case of DABUR INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [ 2005 (2) TMI 196 - CESTAT, NEW DELHI] only for the reason that in the case of Dabur India Ltd. laboratory report was available and in the present case laboratory report is not there. Such ground for holding that the finding of this Tribunal in the case of Dabur India Ltd. are not applicable in the present case is not sustainable. Hon ble Supreme Court in the case of PUMA AYURVEDIC HERBAL (P) LTD. VERSUS COMMISSIONER OF C. EX., NAGPUR [ 2006 (3) TMI 141 - SUPREME COURT] had held that the burden to show correct classification lies on Revenue. It is found that Revenue has not discharged such burden in the present case. Right from the initial stages of dispute, appellant has been claiming that the issue is no more res integra and settled in favour of the appellant through final order of this Tribunal in the case of Dabur India Ltd. In the said decision, similar products were held to be animal feed supplements. Thus, the classification adopted by the appellant under Heading 2309 and under Tariff Item No.23099090 is appropriate classification for animal feed supplements - the impugned order is set aside - appeal allowed. 2024 (12) TMI 733 Recovery of central excise duty - evasion of payment of duty on the quantity of SKO which was cleared from refinery for intended purpose of distribution under public distribution system - willful suppression, misdeclaration of facts and circumstances with an ulterior motive to defraud the government exchequer - Time limitation - HELD THAT:- Hon ble Supreme Court in Nizam Sugar Factory vs. Collector of Central Excise, A.P. [ 2006 (4) TMI 127 - SUPREME COURT] has held that when the first show cause notice was issued, all the relevant facts were in the knowledge of authorities and that while issuing the second and third show cause notices, the same and similar facts would not be taken as suppression of fact on the part of the assessee as these facts were already in the knowledge of the authorities. Therefore, Hon ble Supreme Court has held that in respect of second and third show cause notices, there was no suppression of fact on the part of the appellant. It is noted that in the above stated show cause notices dated 27.01.2016 and 22.12.2017 the same facts as that in show cause notice dated 30.01.2015 were stated and was stated that there were suppressions of fact. Hon ble Supreme Court has held that in respect of second and third show cause notices, there was no suppression of fact on the part of the appellant. It is noted that in the above stated show cause notices dated 27.01.2016 and 22.12.2017 the same facts as that in show cause notice dated 30.01.2015 were stated and was stated that there were suppressions of fact. In the present case the goods were intended for use in public distribution system. There is no evidence that there was any clandestine removal of the goods by any of the authorities. There was no end-use condition required for availment of exemption. It is noted that intermixing was inevitable - Revenue also did not draw samples and obtain a report from Central Revenue Laboratory as to the content of SKO in intermix. By following the judgment in the case of State of Haryana vs. Dalmia Dadri Cement Ltd. [ 1987 (11) TMI 94 - SUPREME COURT] it is held that there was no case for recovery of central excise duty on SKO after SKO was cleared for the intention of use in public distribution system by availing exemption allowing full exemption of duty. Appeal allowed. 2024 (12) TMI 732 Valuation of Excise Duty - inclusion of cost of certain inputs supplied by the principal manufacturer to the job worker (appellant) in the assessable value of the goods manufactured by the job worker and supplied to their principal manufacturer and the principal manufacturer cleared the final products on payment of duty - HELD THAT:- It is found that the facts of this case is exactly identical to the facts in the case of Hon ble Supreme Court judgment in International Auto Limited [ 2005 (3) TMI 132 - SUPREME COURT ] inasmuch as the appellant is job worker manufacturing the excisable goods using their own components and parts and some of the parts are supplied by the principal manufacturer on which the Cenvat credit was availed by the principal manufacturer. After the manufacture of job work goods the appellant have cleared the same to the principal manufacturer and the principal manufacturer in turn used the job work goods or cleared as such on payment of excise duty. It is this fact, in context of which the Hon ble Supreme Court held that since the principal manufacturer has cleared the ultimate goods on payment of duty, the value of parts supplied by the principal manufacturer of the job worker is not includible in the assessable value of the job work goods in the hands of the job worker. In the present case also the cost of the parts supplied by the principal manufacturer is not includible in the assessable value of the job workers. Therefore, the demand raised on the appellant who is a job worker, is not sustainable - the impugned order is set-aside - Appeal is allowed. 2024 (12) TMI 731 Levy of Central Excise duty - amount of sales tax remitted to the appellants under Incentive Scheme 2001 for Economic Development of Kutch District - extended period of limitation. HELD THAT:- The issue that whether under the Incentive Scheme-2001, on the Sales Tax remittance by the State Government, the said Sales Tax amount though collected from the buyer of the goods, is includable in the assessable value of the excisable goods for the purpose of charging Excise Duty has been consistently settled in Welspun Corporation Ltd [ 2017 (5) TMI 177 - CESTAT MUMBAI] where it was held that ' In the instant case as already discussed above it is not that Sales Tax was not only payable but in fact it stood actually paid, as the remission was nothing but the incentive or capital subsidy which the State Government granted with respect to the investment made by the appellants in the earthquake ravaged region of Kutch of State of Gujarat. Instead of recovering Sales Tax and then refunding the same as capital subsidy, the State Government had remitted the same to appellants. Consequently like CST since VAT which was payable was actually paid the same is required to be excluded from the transaction value.' The facts are absolutely identical that the assessee s units are located in Kutch District and they are availing the Incentive Scheme-2001, similarly like in the present case. Therefore, the facts and legal issues involving in the above cases are exactly identical, in the facts of the present case. Therefore, applying the ratio of the above judgment, the issue is no longer res-integra. Hence, the demand is not sustainable. The impugned orders are set aside. Appeals are allowed.
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TMI Tax Updates - e-Newsletter December 16, 2024

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Flavoured Milk GST Classification: Nutritious Dairy Product Over Sweetened Beverage.

Arbitrary tax demand quashed; Taxpayer relief on limitations upheld.

Petitioner's GST registration restored after court intervention; CGST/WBGST to open portal for tax payment.

Income Tax

Indian company's transfer pricing adjustment on marketing expenses rejected; brand building costs allowed.

Taxman's reassessment order upheld; sufficient opportunity given for response.

Vivad Se Vishwas Act Appeal Settlement: Tax Disputes Closed, Interest Payable for Delay.

Dismissal of appeal challenging Income Tax order; Opportunity given, but delay tactics employed.

IT dept's final assessment order & demand notice set aside; technical glitches prevented e-filing.

Telecom Company Wins Appeal Against Disallowances on Amortization and Depreciation Costs.

Offshore service vessels hire income of foreign resident not taxable in India.

Tax tribunal allows deduction without adjusting losses against profits.

Payments for promotional schemes not commission, thus no TDS u/s 194H; But TDS non-compliance for PF/ESI for contractors.

Foreign entity's justified delay in furnishing transfer pricing info; penalty waived.

Customs

Customs Broker's Liability Limited for Export Documents Verification.

Tourist's personal gold jewelry exempt from seizure on arrival in India.

Customs license revocation & forfeiture upheld due to violations by broker.

Customs refund interest entitlement: 3 months from application date, not order date.

Delayed reply & flimsy grounds for cross-exam led to dismissal of appeal against mis-declaration order.

Corporate Law

Offer of flat rejected, pre-deposit mandatory for RERA appeal despite moratorium in different project's insolvency.

PMLA

Apex court stresses personal liberty, expedites trial in ED case for fair justice.

Property of equivalent value is 'proceeds of crime' if original unavailable.

Service Tax

Service Tax Penalty Waived for Admitted Liability Payment Before Notice.

Landscaping materials exempted from service tax, accounts reconciliation ordered.

Tribunal remands tax refund case for reconsideration due to inconsistent treatment of payment amounts.

Central Excise

Undervaluation upheld for non-existent dealers; Exemption denied for traded goods; Clandestine removal claim rejected.

Animal Feed Supplements: Calcium, Vitamins Classified as Feed, Not Medicine Despite Doses.

Excise duty evasion case: No willful suppression, inevitable intermixing for public distribution system.

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TMI Tax Updates - e-Newsletter
December 16, 2024