Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
December 27, 2022
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Highlights / Catch Notes
GST
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Classification of goods - marine paint used on the hull of the ships - anti-fouling paint should be considered part of the ship or not? - The view taken by the Authority and Appellate Authority is based on the material placed before it. The Petitioner seeks to convert this limited enquiry in respect of Advance Ruling into an appellate enquiry, which is not permissible to be undertaken in writ jurisdiction. - HC
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Cancellation of GST registration granted to the petitioner - It is a principle at the heart of administrative law that where the law requires a thing to be done in a particular manner, it must be done in that manner alone. - If the Officer wishes to initiate proceedings for cancellation of registration, he must issue a notice as specified in Rule 21 of the CGST Rules and in form GST REG-17 and not in form GST REG-31. - HC
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Seeking grant of Regular Bail - fraudulent transactions - The Department seems content with the assumed position that Tobacco was not used in the smoking mixture, which assumption is in the teeth of the inconclusive opinion given by the chemist on 02.11.2022 - Why the Department chose not to send the samples to another lab seeking answers to query no. 2 and 3 when the accused is languishing in Jail, that too, in the clear absence of any opinion on the presence of Nicotine and Tobacco in the product? The benefit of this serious lapse in the investigation has to be given to the accused at this stage. - DSC
Income Tax
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Addition under the head ‘income from capital gains’ - when the assessee has relinquished her right in the land earmarked for common utility purpose in terms of regulatory requirements and also executed Gift Deed in favour of the Commissioner, Virudhachalam, without any consideration, then, the question of computing long term capital gains on such land and also business profit in terms of Sec.45(2) of the Act, does not arise. - AT
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Levy of penalty u/s 271C - Whether appellant is entitled to immunity from penalty as the appellant has opted for VSVS in respect of order u/s 201(1)? - Since the dispute is related to the quantum of 201(1) proceedings the same is already settled and therefore, penalty cannot be imposed subsequently under Section 271C of the Act. - AT
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Validity of Reopening of assessment u/s 147 - notice issued to a non-existing company - it is very clear that the assessee did not inform the AO as required under the law about striking off name of the company from the RoC and hence, we are of the considered view that case law referred to by the assessee has no application to facts of the present case - AT
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Revision u/s 263 - AO has not conducted necessary inquiry before allowing deduction u/s. 54F, but simply allowed the claim made by the assessee. Section 54F of the Act is not applicable, if the assessee at time of transfer of original assets, owns more than one residential house, other than the new assets acquired by him. Thus without applications of the provisions of law, the assessing officer has granted the relief to the assessee which otherwise the assessee is not eligible for the claim of deduction u/s. 54F of the Act. - AT
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Revision u/s 263 by CIT - The fact remains that the specific issue mentioned and has been examined and the contention of the assessee accepted by the Assessing Officer. Merely because the Assessing Officer did not write specific reasons for accepting the explanation of the assessee cannot be reason enough to invoke powers under section 263, and non-mentioning of these reasons do not render the assessment order "erroneous and prejudicial to the interest of the revenue". - AT
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Addition based on estimated additional gross profit - When the sale value of the cranes, which was considered for computation of WIP, has already included the profit component, the addition made by the AO, by firstly excluding the amount declared by the assessee and estimating the gross profit thereafter, results in double addition. - AT
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Nature of expenses - expenses pertain to a film which may not be released - legal fees paid to the retainer advocates firm for taking care of litigation - Whether the film is released or not, or whether it turns out to be a dud project, as in this case, is wholly irrelevant. - Claim allowed - AT
Customs
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Seeking recovery of damages alongwith interest - Benefit of redemption of goods could not be availed as the goods were sold in the auction - Had the Commissioner (Appeals) been apprised of the fact that the goods were not in existence, a different order could have been passed. In this state of facts, it is not possible for us to direct the Respondents to pay damages to the Petitioner. The appropriate course of action would be to relegate the parties to the Commissioner (Appeals) to find the solution to the situation and treat the impugned order as an interim order in the appeal and the restoration of the appeal. - HC
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Seeking conversion of shipping bills - The appellant has established its bona fides; but for the inaction by the DGFT, perhaps there would not have been any delay in seeking conversion/ amendment under Section 149 ibid. Vide letter dated 21.01.2016 itself the appellant did communicate to the DGFT for issuance of EODC by contending that it had fulfilled the export obligation, in response to which the said authority had replied on 25.01.2016 asking for bank realization certificates and, if at all there were any deficiencies, nothing prevented the said authority from communicating the same to the appellant-exporter. - Conversion allowed - AT
Central Excise
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Classification of goods - eligibility for exemption - The General Rules of Interpretation must be applied to decide classification and they cannot be used to decide the eligibility to an exemption notification. The benefit of the exemption notification is available to goods which are made wholly of cotton whereas in this case, undisputedly the products are not made wholly of cotton. - AT
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Interest on differential duty- captive consumption - revenue neutrality - revised CAS-4 prepared by the cost accountant - the liability to pay interest on duties short-paid at the time of clearance of goods for captive consumption does not get erased. The interest liability had not been discharged at the time of payment of differential duty and, hence, the essential precondition for dropping of further proceedings had not been complied with. Inevitably, the confirmation of differential duty necessarily has interest liability appended to it. - AT
Case Laws:
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GST
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2022 (12) TMI 1135
Classification of goods - marine paint used on the hull of the ships - anti-fouling paint should be considered part of the ship or not? - N/N. 1/2017, dated 28 June 2017 - HELD THAT:- The Authority has observed that the paint generally means any liquid or composition that, after application to a substrate in a thin layer, converts into a solid film. There are various types of paints; one type is anti-fouling paint, which falls under Item 3208. It was the Petitioner's case that the goods marine paint would be covered under Sr.No.252 being part of goods falling under Headings-8901, 8902, 8904, 8905, 8906 and 8907 and; therefore, the enquiry before the Authority was restricted to ascertaining whether goods- marine paint supplied by the Petitioner would be a part of goods Headings 8901, 8902, 8904, 8905, 8906 and 8907. Both the Authorities concluded that just because, as per the Merchant Shipping Act, the marine paint is mandatory to be applied, it does not become part of the ship. This is a considered opinion reached by both Authorities - both the Authorities have adopted the approach required for the classification of the goods in the context of the application of tax, and the Authorities have not widened the enquiry to ascertain various issues sought to be raised by the Petitioner as regards the legality of sailing of the vessel without the marine paint. The contention of the Petitioner primarily centered around the necessity to apply marine paint to increase the longevity and productivity of the vessel, and the legal position requiring that the paint to be used on a ship without which it cannot sail and requirements of International Conventions for applying anti-fouling system. Though the learned counsel for the Petitioner is right in contending that the argument of the learned counsel for the State that paint is just one part of the anti-fouling system was not a ground on which both the Authorities decide the question, the conclusion arrived at by the Authorities cannot be said to be without considering the material on record. In the case at hand, the Authority was considering the interpretation and classification of entries under the CGST Act. In our opinion, the Appellate Authority has rightly distinguished all these decisions cited observing that under this regime prime test is whether the product is marketable or not. Similarly, the Appellate Authority has also referred to and distinguished the decision of the Gujarat High Court in the case of SURGICHEM VERSUS STATE OF GUJARAT [ 1991 (7) TMI 303 - GUJARAT HIGH COURT] . The Authorities have dealt with the decisions cited before the Authorities, and there is no fundamental error in their approach. The view taken by the Authority and Appellate Authority is based on the material placed before it. The Petitioner seeks to convert this limited enquiry in respect of Advance Ruling into an appellate enquiry, which is not permissible to be undertaken in writ jurisdiction. The scrutiny in writ jurisdiction of the orders passed by the Authority and the Appellate Authority is minimal. The Petitioner, who sought an advance ruling as to which entry the marine paint should fall, was given full opportunity of hearing - Petition dismissed.
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2022 (12) TMI 1134
Cancellation of GST registration granted to the petitioner - application for revocation was beyond the time prescribed under Section 30 of the CGST/SGST Acts - HELD THAT:- It is a principle at the heart of administrative law that where the law requires a thing to be done in a particular manner, it must be done in that manner alone. - The action taken by the officer by initiating proceedings in form GST REG-31 of the CGST Rules and completing the proceedings for cancellation of registration by issuing Ext.P1 order is clearly without jurisdiction. If the Officer wishes to initiate proceedings for cancellation of registration, he must issue a notice as specified in Rule 21 of the CGST Rules and in form GST REG-17 and not in form GST REG-31. The Division Bench of the Gujarat High Court in AGGARWAL DYEING AND PRINTING WORKS VERSUS STATE OF GUJARAT 2 OTHER (S) [ 2022 (4) TMI 864 - GUJARAT HIGH COURT] has considered an almost identical situation. The Court considered the contents of the show cause notice issued in that case and came to the conclusion that the show cause notice was woefully inadequate inasmuch as it did not specify the reasons which compelled the Officer to initiate action for cancellation of registration. The Supreme Court in GOVERNMENT OF KERALA ANR. VERSUS MOTHER SUPERIOR ADORATION CONVENT [ 2021 (3) TMI 93 - SUPREME COURT] has taken the view that where concessions or exemptions are granted with a specific purpose of promoting or encouraging a certain activity the principle that such concessions/exemptions must be interpreted in favour of the revenue does not apply - In the facts of these cases, this Court is concerned with the provisions of Sections 29/30 of CGST/SGST which gives to the power to cancel registration and also to revoke it. These are not provisions which need to be interpreted with reference to the principles laid down in the COMMISSIONER OF CUSTOMS (IMPORT) , MUMBAI VERSUS M/S. DILIP KUMAR AND COMPANY ORS. [ 2018 (7) TMI 1826 - SUPREME COURT] and in GOVERNMENT OF KERALA ANR. VERSUS MOTHER SUPERIOR ADORATION CONVENT [ 2021 (3) TMI 93 - SUPREME COURT] . The quashing of the impugned order of cancellation will not have the effect of absolving the petitioner of any fiscal liability - Petition allowed.
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2022 (12) TMI 1133
Suspension of GST registration of petitioner - no additional place of business or any business in the principal place was found - HELD THAT:- As section 30 of the Assam GST Act, 2017 provides alternative and efficacious remedy to the petitioner to apply for revocation of the cancellation of the registration, the Court is of the considered opinion that the petitioner be relegated to the concerned designated authority for availing remedy as prescribed under the provision of section 30(1) of the Assam GST Act, 2017. As the petitioners have approached this Court within the period of limitation prescribed under section 30(1) of the Assam GST Act, the Court is inclined to provide that in the event the petitioner makes an application before the Officer empowered to deal with the prayer for revocation of cancellation of registration within a period of 15(fifteen) days from the date of this order, the concerned authorities shall accept the application for revocation filed by the petitioner under section 30 of the Assam GST Act, 2017 and if such an application is made/ filed within the extended time, such an application shall not be dismissed on the ground of delay. Application disposed off.
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2022 (12) TMI 1132
Cancellation of GST registration of petitioner - failure to furnish returns for a continuous period of six months - HELD THAT:- Since, the petitioner failed to furnish returns for a continuous period of six months and show cause notice has been sent to him, it is directed that the petitioner shall file an application for revocation under Section 30 of the GST Act in terms of Rule 23 of the GST Rules. Though it is time barred, we are inclined to wave the limitation and direct the petitioner to file application for revocation within 21 days hence. He shall also comply the other provision of Section 30 of the Uttarakhand GST Act, i.e, submission of returns for the defaulted six months and any further completed months after the revocation. In such case if dues is found to be due from the petitioner and he pays the same than his case shall be considered liberally by the revenue and shall be dispose of within 15 days. Application disposed off.
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2022 (12) TMI 1131
Seeking grant of bail - fake ITC passed without any actual supply of goods - bogus firms - offence under Section 132 (1) (b) of CGST Act, 2017 - HELD THAT:- As far as creation of firm is concerned, again since the entire process was online, at least, technical investigation in this regard is required and is wanting. However, considering that investigation is being carried out, also the fact that as on date, there is no independent evidence other than the statements against the accused, as also, the fact that he has already spent more than 35 days in JC, as also, considering that co-accused has already been admitted to bail and Department has not sought the cancellation of the bail of co-accused, the present accused Shubham Goyal is also admitted to bail on furnishing of bail bonds/surety bonds in the sum of Rs.5,00,000/with one surety of like amount to the satisfaction of the concerned MM/Duty MM subject to the conditions imposed. Application allowed.
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2022 (12) TMI 1130
Seeking grant of Regular Bail - fraudulent transactions - it is suspected that spurious goods have been exported and ITC claimed fraudulently - HELD THAT:- The case of the Department seems to be that there is a chain of documents without any actual supply of products while simultaneously there is no claim that the initial tax payment was not made and the entire claim of ITC in the chain is without any input tax deposit. Rather the Department is suggesting that, even though, there is payment of tax at one stage, all ITCs claimed in the chain are without any supply of goods. In the alternative and in my view, to explain the inherent contradiction in the said argument, the counsel for the Department has coined the parallel theory that if there was actual purchase of cigarettes by M/s Radiant Traders, the same were perhaps sold in the market without invoicing and spurious smoking mixture was used as a cover to explain its disappearance, as also, used for the purposes of claiming input tax credit for the export of the smoking mixture. This is proposed to be established by firstly, the lab test report dated 02.11.2022 and secondly, the statement of the applicant/accused. Surprisingly, even though, the report was given by the chemist on 02.11.2022, that is even before the arrest of the accused, the Department made no further attempt to seek an opinion from another lab on the subject. Rather, the Department chose to arrest the accused and even after the arrest and up till today the samples have not been sent to any other lab to seek answer to query no. 2 and 3 raised by the IO as far as back on 19.10.2022. The Department seems content with the assumed position that Tobacco was not used in the smoking mixture, which assumption is in the teeth of the inconclusive opinion given by the chemist on 02.11.2022 - Why the Department chose not to send the samples to another lab seeking answers to query no. 2 and 3 when the accused is languishing in Jail, that too, in the clear absence of any opinion on the presence of Nicotine and Tobacco in the product? The benefit of this serious lapse in the investigation has to be given to the accused at this stage. In view of the discussion pertaining to the assumption of the Department regarding non use of Tobacco as a input, even though the report of the chemical examiner being inconclusive on the presence of nicotine and tobacco for want of testing facility, the period already undergone by accused in JC and want of any evidence other than the statement of the accused and the aforesaid discussion, the accused is admitted to bail on furnishing bail bonds/surety bonds in the sum of Rs.10,00,000/with one surety of like amount to the satisfaction of the concerned Ld. MM/Duty MM and also subject to the conditions imposed. Bail application allowed.
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Income Tax
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2022 (12) TMI 1129
Revision u/s 263 by CIT - excess deduction claimed under Section 35 (2AB) - As stated that the assessee has suo moto added back amount while computing the taxable income for the relevant assessment year - HELD THAT:- As furnished the relevant extracts of the financial statement for the financial year 2015-2016 highlighting all the relevant details. Further the location wise break up of those items of expenses as reflected in the profit and loss account were also placed before the learned tribunal and it was explained that the items set out in the Column (B)(C)(D)(E) in the above table formed part of the depreciation on scientific research assets; assets written off and profit and loss on sales of asset debited in the profit and loss account. Thus, it was explained that the sum of Rs. 1,34,45,166/- was added back in the computation of income. This aspect of the matter has been analyzed by the learned tribunal and it has found that the said sum was added back in the computation of income and therefore there was absolutely no basis for the PCIT to invoke his power u/s 263 - records clearly show that the assessing officer had issued notices to the assessee on the very same issue considered their reply thereafter pointing out certain discrepancies issued show cause notice for which reply was submitted by the assessee and after a detailed enquiry the assessment has been completed. Thus, it is not a case of lack of enquiry or lack of proper enquiry. PCIT does not in as many words states that there was lack of enquiry or lack of proper enquiry and all that is said is that the assessing officer did not verify these aspects which is factually incorrect. Therefore, it is not a case where the PCIT could have invoked his jurisdiction under Section 263 of the Act. Advertisement expenditure for employment charged by LINKED IN and bank charges therein - Advertisement expenses in June 2014 were admitted as liability and crystallized for payment in the year under consideration owing to the fact that the LINKED IN being non-resident had furnished the necessary documents in the such as TRC under Section 90(4) of the Act read with Rule 21 AB of the Rules and no PE certificate etc. only in the assessment year under consideration. Tribunal noted it is not the case where these expenses were charged as deduction in the preceding year more importantly, the tribunal noted that there is no revenue implication and no prejudice is caused to the revenue since the tax rate applicable to the assessee during the assessment year 2015-2016 to which invoices relates and the tax rates applicable for the assessment year 2016-2017 in which the invoices were accounted and paid were the same. Hon ble Supreme Court in Malabar Industrial Company Limited [ 2000 (2) TMI 10 - SUPREME COURT] held that every loss of revenue cannot be treated as prejudicial to the interest of revenue and if the assessing officer has adopted one of the courses permissible under law or where two views are possible and the assessing officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the assessing officer is unsustainable under law. Also on facts the tribunal found that the PCIT has not carried out any enquiry on his own and merely set aside the assessment order and sent the file back to the assessing officer to re-examine the issues which is contrary to the law as laid down in several decisions and the tribunal rightly noted the decision in DG Housing Projects Limited [ 2012 (3) TMI 227 - DELHI HIGH COURT] - No substantial questions of law.
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2022 (12) TMI 1128
Amount shown in 26AS aken into consideration even when the TDS certificate indicates a higher receipt - HELD THAT: - We find that the Tribunal had done an elaborate fact finding exercise and has pointed out as to how the assessing officer erroneously relied upon only the figures mentioned in the TDS certificate and ignored Form No.26AS - HELD Simply because there is difference in the claim of assessee in respect of TDS credit and the corresponding income, the AO has made the addition which cannot be accepted when the Form 26AS gives a different picture, which also assessee has no control; and 26AS Forms are generated by the Income-tax department and the figures come close to the assessee s contention. Therefore, opinion the assessee s income should be taken as Rs.3,95,030/-, which is shown in Form 26AS (downloaded from the Income tax Department website) and she should be given TDS credit of only Rs.39,569/- as reflected in the Form 26AS. We direct the AO to adopt these figures and compute the taxable income of assessee accordingly as per law. In this appeal, the above factual position is not being disputed by the revenue. Thus, we are of the clear view that there is no substantial question of law much less substantial question of law arising in this appeal for consideration.
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2022 (12) TMI 1127
Revision u/s 263 - According to PCIT, the AO failed to verify the excess allowance of bad debts - HELD THAT:- As this being limited scrutiny assessment framed by the AO for the purpose of verification of large business loss incurred in the money lending. We noted that the AO has gone into the details and noted in the assessment order - We also noted that all the debtors have confirmed while summoned and statements were taken from them. Some of them could not attend in person but confirmed in writing. We noted that the AO has formed an opinion and now PCIT, should not have invoked the powers of revision u/s.263 of the Act on the same issue which is examined by the AO in detail. Hence, we find that the revision order passed by PCIT is bad in law and hence, the same is quashed. Appeal filed by the assessee is allowed.
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2022 (12) TMI 1126
Addition under the head income from capital gains - business of real estate development had converted her land into stock-in-trade in terms of provisions of Sec.45(2) - assessee has formed a layout as per approved plan from the local municipal authorities - AO has computed long term capital gains in terms of Sec.47(iii) of the Act, on land earmarked for road, on the ground that when the assessee has converted her own land into public roads, there is an extinguishment of right in the land which amounts to transfer within the meaning of Sec.47(iii) - HELD THAT:- We ourselves do not subscribe to the reasons given by the AO for the simple reason that the land earmarked for public utility purpose in terms of municipal regulations while forming residential lay out, cannot be brought to tax either u/s.47(iii) of the Act or u/s.45(2) of the Act, because, relinquishment of right in land earmarked for common utility purpose, cannot be considered as extinguishment of any right in property which can be considered as transfer within the definition of Sec.47(iii) - the provisions of Sec.45(2) of the Act, also cannot be invoked to compute business profits when the land has been converted into stock-in-trade, because, the assessee has not transferred the land for a consideration. We are of the considered view that when the assessee has relinquished her right in the land earmarked for common utility purpose in terms of regulatory requirements and also executed Gift Deed in favour of the Commissioner, Virudhachalam, without any consideration, then, the question of computing long term capital gains on such land and also business profit in terms of Sec.45(2) of the Act, does not arise. In this case, the assessee has executed a Gift Deed dated 22.03.2019 and handed over the land in favour of the Commissioner, Virudhachalam Municipality. In our considered view, said transaction neither attracts capital gains as per Sec.47(iii) of the Act, nor business profit as per Sec.45(2) - We are of the considered view that the AO is completely erred in taxing deemed long term capital gains and deemed book profit in respect of 40,386.81 sq.ft. land earmarked for public utility purpose and handed over to local municipal authorities. CIT(A) after considering relevant facts has rightly deleted the additions made by the AO and thus, we are inclined to uphold the order of the Ld.CIT(A) and dismiss the appeal filed by the Revenue.
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2022 (12) TMI 1125
Assessment u/s 153A - disallowance of deduction u/s 80IC - HELD THAT:- We note that the assessment was framed u/s notice u/s 153A of the Act. In the assessment order, no specific reason has been given by the Assessing Officer for making disallowance. He has not pointed out the defect if any noted in the books of accounts of the assessee warranting the said disallowance. In our considered opinion, CIT(A) has taken a correct view of that matter. Without pointing out any shortcoming in the claim of the assessee in terms of section 80IC of the Act, no disallowance is sustainable. More so when the AO himself noted that the assessee has furnished complete details and no defect has been pointed out. In this view of the matter, in our considered opinion, there is no infirmity in the order of the Ld. CIT(A), hence, we uphold the same. Whether addition has been made de-hors incriminating material found during search ? - The assessee had also relied upon Hon ble jurisdictional High Court decision in the case of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] CIT(A) has dismissed this ground of the assessee. We find that the same is only of academic interest. As, we have upheld the Ld. CIT(A) s order on merits and the Revenue s appeals are liable to be dismissed. Accordingly, the Cross Objections of the assessee are also dismissed as infructuous.
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2022 (12) TMI 1124
Assessment u/s 153C - Period of limitation - 6 years for the purpose of 153A and 153C - HELD THAT:- As in this case, there was a search conducted on 07.04.2016. AO s satisfaction for starting 153C proceedings against the present assessee was recorded on 29.03.2019. Taking this into account, six preceding assessment years are 2014-15 to 2019-20 which excludes AYs 2012-13 2013-14. This is as per the ratio laid down in the case of CIT vs. RRJ Securities Ltd.. [ 2015 (11) TMI 19 - DELHI HIGH COURT] and in Karina Airlines International Ltd.[ 2021 (6) TMI 368 - ITAT DELHI] had held that the amendment brought by the Finance Act, 2017 would not be applicable as it is prospective. It is not the case that Hon ble High Court has reversed the above decision of ITAT, Hence, following the precedence, we reject the pleadings and submission of the ld. CIT DR for the Revenue. In the present cases, since the date of search was 07.04.2016 the amendment brought by the Finance Act, 2017 would not be applicable. Accordingly, respectfully following the precedent as above, we do not find any infirmity in the order of the ld. CIT (A). Hence we uphold the same. Appeals filed by the Revenue are dismissed.
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2022 (12) TMI 1123
Levy of penalty u/s 271C - Whether appellant is entitled to immunity from penalty as the appellant has opted for VSVS in respect of order u/s 201(1)? - HELD THAT:- It is pertinent to note that the assessee filed application dated 09.12.2020 wherein the assessee opted for Vivad se Vishwas Scheme and the Revenue issued Form No. 3 on 11.02.2021 thereby determining the settlement amount. Which was paid by the assessee on 19.03.2021 as per Form 4 and Form 5 was issued on 09.04.2021 thereby giving order for full and final settlement of tax arrears in respect of the dispute under Section 201(1)/201(1A) of the Act. Since the dispute is related to the quantum of 201(1) proceedings the same is already settled and therefore, penalty cannot be imposed subsequently under Section 271C of the Act. Thus, the penalty proceedings by the Department and confirm by the CIT(A) is deleted. The appeal of the assessee allowed.
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2022 (12) TMI 1122
Validity of Reopening of assessment u/s 147 - notice issued to a non-existing company - non intimation of name of the company has been struck off from RoC - HELD THAT:- As the name of the company has been struck off from RoC on 05.04.2008 itself, the assessee officially did not communicate to the AO about striking off name of the company. Further, it was only when the notice u/s.148 of the Act, was served to the Director of the assessee company by Notice Server, the Director has written endorsement in the notice about striking of name of the company from the RoC. From the above, it is very clear that the assessee did not inform the AO as required under the law about striking off name of the company from the RoC and hence, we are of the considered view that case law referred to by the assessee has no application to facts of the present case and thus, we are of the opinion that there is no merit in the legal ground taken by the assessee on the issue of notice u/s.148 of the Act, and consequent assessment proceedings and hence, the ground taken by the assessee for all three assessment years is rejected. Approval of competent authority as required u/s.151(2) of the Act, before issue of re-assessment notice u/s.148 - HELD THAT:- In this case, for the AY 2003-04, DR fairly agreed that instead of JCIT, the CIT-III, Chennai, has approved issue of notice u/s.148 - for the AY 2003-04, the CITIII has granted approval instead of the Addl. CIT/JCIT as prescribed under the law and thus, notice issued u/s.148 of the Act, on 30.03.2010 for the AY 2003-04, is bad in law and consequent assessment proceedings is null and void. As regards AYs 2004-05 2005-06, DR placed evidences to prove that the Addl.CIT, Range-V, Chennai, has granted approval for issue of notice and in our considered view said approval is in accordance with law as prescribed u/s.151(2) of the Act and thus, re-assessment notice issued u/s.148 of the Act, and consequent assessment proceedings are valid and thus, we reject the ground taken by the assessee for the AYs 2004-05 2005-06. To sum up, notice u/s.148 of the Act, and consequent re-assessment proceedings for the AY 2003-04 is quashed and notice issued u/s.148 of the Act, and consequent re-assessment proceedings for the AYs 2004-05 2005-06 are upheld. Additions towards consideration paid for purchase of land as unexplained investment in the hands of the assessee on the basis of survey conducted and consequent statement recorded from Mr.Chelladurai, who claims to be an real estate agent - We find that the AO has treated difference between consideration paid for purchase of land as per books of accounts of the assessee and as per statement of Mr.Chelladurai as unexplained investment in the hands of the assessee. The assessee claimed that entire land transaction has been owned up and also income arises out of land transaction has been offered by M/s.Wescare (India) Ltd. We find that if at all the claim of the assessee is correct, then, the question of making further additions in the hands of the assessee towards very same land and consequent compensation / gain does not arise. But, facts remain that whether M/s.Wescare (India) Ltd., has considered the transaction in their books of accounts and also offered to tax compensation / profit arise out of land transactions is not clear. Therefore, we are of the considered view that the issue needs to go back to the file of the AO for both the assessment years to re-examine the claim of the assessee in light of agreement between the parties and also claim of the assessee that M/s.Wescare (India) Ltd., had offered the income in their hands. Hence, we set aside the issue for both the assessment years to the file of the AO and direct the AO to re-examine the claim in light of various averments made by the assessee and decide the issue in accordance with law.
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2022 (12) TMI 1121
Full credit of TDS as claimed resulting into grant of short refund - whether entire receipt pertaining to TDS was duly reflected in the accounts of the assessee supported by the reconciliation submitted justifying grant of full credit? - HELD THAT:- A closer scrutiny of the Ld.CIT(A) s order and Form No.26AS revealed that while the Ld.CIT(A) had noted this mismatch in Form No.26AS as on the date of processing of the return u/s 143(1) i.e. 10-12-2019 and at time of rejection of the rectification application-filed u/s 154 of the Act on 14-8-2020,the Form No.26AS filed before us by the assessee was updated form with data updated till 23-7-2021. Which means that, subsequent to the passing of the rectification order, and the order of the CIT(A) which was passed on 26-4-2021, the assessee had got its TDS data rectified ensuring that the TDS shown as not deducted on receipts from various parties in the list in para 4.4 of the CIT(A) order above, are duly reflected in the updated Form No.26AS. This fact was pointed out to assessee who fairly admitted that the TDS data must have been subsequently revised and updated. In view of rectification and updation of Form No.26AS we find that the assessee does have a case of short credit of TDS being given to it in the processing of its return filed for the year under section 143(1) of the Act. But in the interest of justice, this updated Form No.26AS filed by the assessee before us, reflecting all the TDS earlier noted as not deducted but now shown as deducted, needs to be verified by the Department and for the said purpose we restore the issue back to the AO to verify the authenticity of Form No.26AS now filed by the assessee before us, and thereafter allow credit of TDS as per law. Accordingly, grounds of appeal raised by the assessee are allowed in above terms for statistical purposes .
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2022 (12) TMI 1120
Revision u/s 263 - Reopening of assessment u/s 147 - Addition being profit working out on cash deposits - surrendering a profit @8% on the balance unexplained cash deposited by applying provisions of section 44AD - HELD THAT:- AO has considered surrendered income - The assessment order reflects that AO had taken into account the peak credit balance factor also. Thus, there appears to be an erroneous exercise of jurisdiction by Ld. Revisional Authority as the issue was thoroughly examined by the Ld. AO and taking into consideration the facts and circumstances assessment order was passed. There is force in the submission of AR, that when Ld. AO had examined the issue of deposit of cash and accepted it to be business income then Ld. PCIT was in error in setting aside the assessment order on the ground that one part of the income was assessed as per P L account and the other part of income was assessed as per the provisions of section 44AD of the Act, because as such there was no loss of revenue and rather the P L Account profit percentage being lower, the revenue only gained. That being so, the assessment order cannot be considered to be one prejudicial to the interest of revenue and accordingly invoking of the jurisdiction u/s 263 by Ld. PCIT is not justified. The ground raised are decided in favour of the appellant. The appeal of assessee is allowed.
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2022 (12) TMI 1119
Capital gain computation - invoking section 50C - CIT(A) held that the Stamp Duty valuation comes into picture, only when the sale deed is put for registration. Therefore the assessee s argument that the Jantri value of 2006 cannot be adopted, when the registration taken place only in 2011 - argument of the assessment namely since the possession of the property given in 2006-07 capital gain cannot be assessed during the AY 2012-13 - HELD THAT:- To meet the ends of justice, we deem it fit to set aside the matter back to the file of the Assessing Officer with a direction to the assessee to produce the bank accounts relating to the transaction on 15.09.2006 and 16.10.2006 and produce the copies of the bank statements, so as the Assessing officer can invoke second proviso to Section 50C of the Act. Needless to state, the assessee should cooperate with the Assessing Officer by producing the relevant bank statements, so as the A.O. can pass a fresh assessment order. For this reason, the appeal is allowed for statistical purposes.
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2022 (12) TMI 1118
Revision u/s 263 - Entitlement to deduction u/s. 54F - as per CIT had not applied his mind with regard to the ownership of two residential houses by the assessee as on 31.03.2015, which are reflected in the balance sheet, but simply granted the deduction u/s. 54F on purchase of a new property which is against the provisions of Section 54F - AO has not discussed any details either in the assessment order or in the notices issued to the assessee whether the assessee fulfills the conditions as prescribed u/s. 54F - HELD THAT:- As seen that the assessment order passed by the Assessing Officer is without any details and no information about the claim of deduction u/s. 54F of the Act more particularly when the claim is to the extent of Rs. 3,96,79,796/- by the assessee. Though the A.O. asked the assessee to justify the deduction claimed in computation of capital gain along with supporting evidences through notice issued u/s. 143(2) of the Act and the assessee made simple rely which is extracted in Para 6.1 above. The same does not details about the already existing property details, other information. Thus in our considered opinion that the Assessing Officer has not conducted necessary inquiry before allowing deduction u/s. 54F, but simply allowed the claim made by the assessee. Section 54F of the Act is not applicable, if the assessee at time of transfer of original assets, owns more than one residential house, other than the new assets acquired by him. Thus without applications of the provisions of law, the assessing officer has granted the relief to the assessee which otherwise the assessee is not eligible for the claim of deduction u/s. 54F of the Act. PCIT has invoked the provisions of Section 263 thereby set aside the erroneous assessment order passed by the Assessing Officer and directed the A.O. to pass a fresh assessment order after allowing adequate opportunities to the assessee in accordance with law following the prescribed procedure and duly examining the issue of allowability of deduction u/s. 54F - Decided against assessee.
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2022 (12) TMI 1117
Revision u/s 263 by CIT - assessee has claimed deduction of interest income u/s. 80(P)(2)(d) - PCIT noted that the ld. AO has not verified the issue of allowability of deduction u/s. 80(P)(2)(d) while passing the order u/s. 143(3) of the act and the order is erroneous in so far as it is prejudicial to the interest of revenue - HELD THAT:- As the A.O while framing the assessment had taken a possible view, and revenue did not demonstrate the error remain on the part of the ld. AO. In fact, when the ld. AO has conducted the required enquiry and not violated any of the conditions mentioned for revision of order as required by Explanation 2 of Section 263 of the Act, the order passed by the Assessing Officer could not be deemed to be erroneous so as to be prejudicial to the interests of the revenue As long as the action of the Assessing Officer cannot be said to be lacking bonafides, his action in accepting an explanation of the assessee cannot be faulted merely because it could have been lawful to make mere detailed inquiries or because he did not write specific reasons of accepting the explanation. As for learned PCIT's observations regarding accepting the explanation in a routine and perfunctory manner , there is nothing to question the bonfides of the AO or to elaborate as to what should have been 'appropriate' evidence. The fact remains that the specific issue mentioned and has been examined and the contention of the assessee accepted by the Assessing Officer. Merely because the Assessing Officer did not write specific reasons for accepting the explanation of the assessee cannot be reason enough to invoke powers under section 263, and non-mentioning of these reasons do not render the assessment order erroneous and prejudicial to the interest of the revenue . We vacate the impugned revision order. The assessee gets the relief accordingly.
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2022 (12) TMI 1116
Addition based on estimated additional gross profit - AO on the basis of the difference of gross profit @4.37% as compared to earlier year (i.e. 21.23% for AY 2012 13 - 16.86% for AY 2013 14) made the addition - plea of the assessee that the unaccounted investment in stock of WIP of cranes amounting to Rs. 3,15,32,000, accepted by the partner of the assessee, was valued at sales price - HELD THAT:- It is evident that the unaccounted investment in stock of WIP of cranes amounting to Rs. 3,15,32,000, is nothing but a difference of aggregated WIP of Rs. 5,73,00,000, based on sales value, and Rs. 2,57,68,000, i.e. the WIP as per the statement of stock submitted during the survey - The amount of Rs. 5,04,09,595, wherein the WIP was computed on sales value, was offered to tax by the assessee in its return of income. The other component in the aforesaid amount of Rs. 5,04,09,595, is unaccounted investment in raw materials accepted by the assessee amounting to Rs. 1,88,77,595. When the sale value of the cranes, which was considered for computation of WIP, has already included the profit component, the addition made by the AO, by firstly excluding the amount declared by the assessee and estimating the gross profit thereafter, results in double addition. Revenue has not brought anything on record to controvert the findings of the learned CIT(A) that the Sales Tax/VAT assessment order has accepted the assessee s books of account. Appeal by the Revenue is dismissed.
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2022 (12) TMI 1115
Nature of expenses - expenses pertain to a film which may not be released - legal fees paid to the retainer advocates firm for taking care of litigation - whether expenditures were incurred for exclusively for the purpose of its routine business? - disallowance for the short reason that these? - HELD THAT:- The approach is clearly erroneous because as long as it is not in dispute that the expenses are incurred wholly and exclusively for the purpose of business, as indeed is the position in this case, there is no occasion for disallowance of such expense. Whether the film is released or not, or whether it turns out to be a dud project, as in this case, is wholly irrelevant. We, therefore, uphold the plea of the assessee and direct the Assessing Officer to delete this disallowance - The assessee gets the relief accordingly. Disallowing service charges paid to the agent involved in the contract for the film Sher with film producing company - CIT(A) failed to appreciate that having failed to release the film Sher , the appellant has abandoned the said film permanently and thus the expenditure incurred in relation thereof is business loss/revenue expenditure - HELD THAT:- We find that, as subsequent developments turned out, there is no dispute that the film Sher‟ was finally abandoned and it was never released. The entire expenditure incurred on the said project, including these expenses, constitute business loss and are allowable as such. We, therefore, uphold the plea of the assessee, and, accordingly, direct the Assessing Officer to delete the impugned disallowance - The assessee gets the relief accordingly. Interest expenditure paid in respect of funds borrowed in the normal course of business - HELD THAT:- Only reason for impugned disallowance was that film was not released during the year, and as such interest was capitalized. However, once the film was eventually an abandoned project and was never released for public exhibition, the very basis of disallowance ceases to hold good in law. The entire project has turned out to be a dud project, and has come to an unsuccessful end. In this situation, and bearing in mind the fact that interest expenses having been incurred wholly and exclusively for the purpose of business is not in doubt anway, we deem it fit and proper to delete this disallowance as well. The assessee gets the relief accordingly.
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Customs
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2022 (12) TMI 1114
Seeking grant of Bail - Smuggling of iPhones - allegation is that the syndicate in which the Applicant has played a major role, imported several consignments of iPhones giving misdeclaration and thereby leading to evasion of customs duty - HELD THAT:- Upon perusal of the Arrest Memo, it appears that the same does not contain any particulars of the case in which the Applicant was arrested. It does not contain any file number. No particulars of the offence, save and except stating the penal sections, are forthcoming from the Arrest Memo. The Arrest Memo should contain the gist of the offence alleged to have been committed. The Arrest Memo prima facie appears to be bereft of necessary particulars. The contention of the learned Counsel for the first respondent that in the past, the Applicant has suffered penalty under Customs Act, he was absconding for quite some time, he has been non-cooperative in the investigation, bail had been rejected by the Courts below, cannot justify non-compliance with the Constitutional imperatives and statutory obligations. It is a settled principle of law that the remand order does not cure the violation of Constitutional safeguards even to deny bail. This Court is inclined to grant bail to the applicant. Accordingly, the application is allowed.
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2022 (12) TMI 1113
Seeking recovery of damages alongwith interest - Benefit of redemption of goods could not be availed as the goods were sold in the auction - HELD THAT:- It is an admitted fact that the goods were sold and were not in existence on the date when the Commissioner (Appeals) passed the order on 27 May 2016. There is no reference whatsoever to the non-existence of the goods. This is a fundamental error in the order passed by the Commissioner (Appeals). Had the Commissioner (Appeals) been apprised of the fact that the goods were not in existence, a different order could have been passed. In this state of facts, it is not possible for us to direct the Respondents to pay damages to the Petitioner. The appropriate course of action would be to relegate the parties to the Commissioner (Appeals) to find the solution to the situation and treat the impugned order as an interim order in the appeal and the restoration of the appeal. The appeal against the amendment order is not restored. Appeals disposed of by the Commissioner (Appeals), Mumbai are restored to the file of the Commissioner (Appeals) - petition disposed off.
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2022 (12) TMI 1112
Seeking conversion of shipping bills - request for Scheme Code change from 00-Free Shipping Bill to 03-Advance Authorization Shipping Bill in respect of four shipping bills - Double Layered Laminated Glass - whether the Revenue is justified in rejecting the request of the appellant for conversion of free shipping bills into Advance Authorization shipping bills for the reasons of limitation as well as non-fulfilment of conditions of paragraph 3(b)(c)(d) of the Board Circular No. 36/2010 ibid? HELD THAT:- A perusal of one of the shipping bills - Shipping Bill No. 8272820 dated 10.03.2015, reflects the file number, since as on the date of the said shipping bill, the appellant had not received the physical copy of the Advance Authorization. The same is the case with respect to the other three shipping bills which are in dispute, as well. By this, it is abundantly clear that the appellant, having requested for Advance Authorization, had filed the shipping bills in anticipation of their Advance Authorization. Further, as pointed out by the Learned Advocate for the appellant, the DGFT did not issue the EODC nor did it communicate any deficiency until the appellant-exporter approached the Hon‟ble High Court and hence, the delay cannot be attributed to the appellant-exporter alone. The appellant has established its bona fides; but for the inaction by the DGFT, perhaps there would not have been any delay in seeking conversion/ amendment under Section 149 ibid. Vide letter dated 21.01.2016 itself the appellant did communicate to the DGFT for issuance of EODC by contending that it had fulfilled the export obligation, in response to which the said authority had replied on 25.01.2016 asking for bank realization certificates and, if at all there were any deficiencies, nothing prevented the said authority from communicating the same to the appellant-exporter. From a perusal of the Form A.R.E.-1 with PART-A and PART-B, I am also of the view that both the Central Excise Officer as well as the Customs Officer have certified having opened and examined the relevant packages /consignment under those very shipping bills which are under dispute. Hence, there is no such violation as flagged in the impugned order to the conditions of paragraph 3(b)(c)(d) of the Board Circular ibid. Learned Advocate for the appellant also seriously contended that the period of limitation for filing an application seeking conversion within the meaning of Section 149 ibid. has not been provided under Section 149, but the same has only been provided in the Board Circular No. 36/2010 ibid. and the Hon‟ble jurisdictional High Court in M/s. Global Calcium Pvt. Ltd. v. Commissioner of Customs, Chennai [ 2017 (6) TMI 1359 - MADRAS HIGH COURT] as well as the Hon‟ble High Court of Kerala in M/s. Parayil Food Products Pvt. Ltd. v. Union of India [ 2020 (10) TMI 1141 - KERALA HIGH COURT] have considered the issue of the above time-limit stipulated in the Board Circular and held that the stipulation of the period of limitation was in utter violation of the statutory provision of Section 149 ibid. and that the request for conversion could not be denied as time-barred by resorting to the Board Circular. The denial of conversion from free shipping bills to Advance Authorization shipping bills by the lower authority and the impugned order, being bad in law, are set aside - Appeal allowed.
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Insolvency & Bankruptcy
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2022 (12) TMI 1111
Seeking early disposal of the complaints - case of the Petitioner is that it is one of the financial creditors of M/s Piyush IT Solutions Pvt. Ltd. and Respondent No.3 is the Resolution Professional (RP) appointed by the NCLT - non-adjudication of complaints dated 14th January, 2022 and 17 th January, 2022 filed by the Petitioner - HELD THAT:- Since the complaints are approximately 10 to 11 months old, the IBBI shall now take a decision on the same and communicate the same to the Petitioner within a period of one month from today. Considering the fact that the said application is also pending before the NCLT, the IBBI shall place its decision before the NCLT as well, for consideration. Petition disposed off.
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FEMA
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2022 (12) TMI 1110
Person aggrieved in section 17 of FEMA - deemed complainant - Whether appellant is not an aggrieved person? - Whether writ petitioner is not entitled for copy of the adjudication order as he was only an informer and he cannot be treated as complainant? - HELD THAT:- Perusal of the rules stated makes it clear that a complaint can be made only by a person authorised by a general or special order of the Central Government. Lis is between the the complainant and the person against whom allegations were made and ultimately adjudicated. As per the statutory provisions, by no stretch of imagination, appellant/petitioner can be termed as a complainant and consequentially entitled to a copy of the adjudicatory order. Though Mr. S. Shyam, learned counsel for the appellant further submitted that he is personally aggrieved over the decision taken by the Adjudicating Authority and in the above circumstances, entitled to a copy of the order, we are not inclined to accept the said submission also, for the reason that an informer, to the Enforcement Directorate, cannot be said to be personally aggrieved over a decision taken by the Adjudicating Authority. In the light of the above discussion, we find no error or infirmity in the impugned judgment, warranting interference. Accordingly, writ appeal is dismissed.
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Service Tax
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2022 (12) TMI 1109
Classification of services - Business Support Services or not - business of exhibition of cinematographic films - sharing of Revenue - distinct entities rendering service in de-mutualized capacity on principal-to-principal basis - HELD THAT:- The issue in dispute stands resolved by the decision of the Tribunal in M/S. RELIANCE MEDIAWORKS LIMITED VERSUS COMMISSIONER, SERVICE TAX-VI, MUMBAI [ 2022 (4) TMI 253 - CESTAT MUMBAI] where it was held that The agreement in the present appeal is almost the same as the agreement in other appeals that have been decided including that in INOX LEISURE LTD. VERSUS COMMISSIONER OF SERVICE TAX, HYDERABAD [ 2021 (10) TMI 893 - CESTAT HYDERABAD] , where under similar situation, it was held that no service tax can be levied on the appellant under BSS. Appeal allowed.
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Central Excise
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2022 (12) TMI 1108
Classification of goods - nonwoven felt fabrics falling under Central Excise Tariff Heading 5602 manufactured by it or not - eligibility for exemption Notification No. 29/2004-CE as amended by Notification No. 07/2012-CE - extended period of limitation - HELD THAT:- Exemption Notification No. 29/2004 is available for goods falling under Chapter 56 made of cotton and not to any other textile material. Undisputedly, the products of the appellant have 56 per cent cotton and 44 per cent of several other materials such as Acrylic, Polyester, wool, nylon, viscose as was found after test by CRCL. It has already been held by this Tribunal in MARK SPLENDOUR NONWOVENS P. LTD. VERSUS COMMR. OF C. EX., JAIPUR ALWAR [ 2017 (10) TMI 1432 - CESTAT NEW DELHI] that the appellant is not entitled to the benefit of this exemption for the same products. Extended period of limitation - HELD THAT:- These are irrelevant because no extended period of limitation has been invoked in either of these two appeals. As far as the appellant s submission regarding classification of textile materials by the predominant material by weight is concerned, we find that the dispute is not regarding the classification of the products but regarding the exemption notification. The General Rules of Interpretation must be applied to decide classification and they cannot be used to decide the eligibility to an exemption notification. The benefit of the exemption notification is available to goods which are made wholly of cotton whereas in this case, undisputedly the products are not made wholly of cotton. There are no force in the arguments of the appellant. Respectfully following the decision of this Tribunal in the appellant s own case for the earlier period, we hold that the appellant is not entitled to the benefit of the exemption notification. Appeal dismissed.
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2022 (12) TMI 1107
Interest on differential duty- captive consumption - revenue neutrality - revised CAS-4 prepared by the cost accountant - grievance of the appellant stems from the claim that the provision for charging interest under section 11AB of Central Excise Act, 1944 is triggered only when suppression, fraud or misrepresentation has caused evasion of duty - HELD THAT:- It is clear that the decision in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [ 2009 (7) TMI 6 - SUPREME COURT] has firmly established the principle that arising from the liability for duties of central excise devolving on the assessee at the price existing at the time of clearance, notwithstanding subsequent receipt of differential, interest under section 11AB of Central Excise Act, 1944 would have to be discharged for termination of proceedings under section 11A of Central Excise Act, 1944 - On the other hand, in COMMR. OF C. EX., BANGALORE-III VERSUS BHARAT HEAVY ELECTRICALS LTD. [ 2010 (4) TMI 439 - KARNATAKA HIGH COURT] , the principle established was that section 11AB of Central Excise Act, 1944 could not be invoked independently of section 11A of Central Excise Act, 1944 rendered superfluous owing to prompt discharge of tax liability on escalation of price. In the impugned proceedings, with confirmation of duty liability under section 11A of Central Excise Act, 1944, the claim of factual matrix identical with that in re Bharat Heavy Electricals Ltd does not find favour. Therefore, the liability to pay interest on duties short-paid at the time of clearance of goods for captive consumption does not get erased. The interest liability had not been discharged at the time of payment of differential duty and, hence, the essential precondition for dropping of further proceedings had not been complied with. Inevitably, the confirmation of differential duty necessarily has interest liability appended to it. Appeal dismissed.
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CST, VAT & Sales Tax
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2022 (12) TMI 1106
Maintainability of petition - availability of alternate remedy - time limitation - Rejection of claim for refund of octroi - only reason for rejecting and/or disallowing the Petitioner s claim for refund of octroi was that the Petitioner had failed to produce the original declaration duly certified by the Octroi Inspector, which was done subsequently. HELD THAT:- While the Respondent has alleged the availability of an alternate remedy, we find that no specific provision and/or details of the same have been stated. In any event we find in the facts of the present case, that the Petitioner is justified in approaching this Court under Article 226 of the Constitution of India. In so far as delay is concerned, we find that there has in fact been no delay so as to deny the Petitioner relief if the Petitioner is otherwise entitled to the same. It is well settled law that there is no rule of law, which says Courts under Article 226 of the Constitution cannot enquire into claims despite the passage of time. The test is to see whether the illegality complained of is manifest and whether the same can be sustained solely on the ground of laches. The test is not the physical running of time but the fact that justifiable reasons exist for warranting a Courts action in cases where injustice has been done or justice has been denied. All that the Court has to see is whether the delay and laches on the part of the Petitioner is such as to disentitle a Petitioner of the relief claimed. It is now well settled that where a case has been made out to merit interference under Article 226 relief would not be denied solely on the ground of delay. Thus, both the preliminary grounds of objection are rejected as entirely baseless and without any merit. Eligibility for a refund under Section 194(2) of the MMC Act - HELD THAT:- Inspector would render the Petitioner ineligible for a refund of octroi under Section 194(2) of the MMC Act. We have examined the provisions of Section 194(2) of the MMC Act and find that a plain reading of the same makes clear that the purport of Section 194(2) of the MMC Act is to exempt from octroi those articles which are imported for the purpose of fulfilling a specified contract with the Government or otherwise for the use of the Government - Section 194 (2) does not provide for an exemption of octroi at the threshold i.e. at the time of import but entitles a person/entity to claim a refund of octroi provided that such person/entity is eligible. In the case of OIL AND NATURAL GAS COMMISSION OF INDIA, VERSUS MUNICIPAL CORPORATION OF GREATER BOMBAY, MUNICIPAL COMMISSIONER, MUNICIPAL CORPORATION OF GREATER BOMBAY, DY. ASSESSOR COLLECTOR (O) AND STATE OF MAHARASHTRA. [ 2017 (9) TMI 1997 - BOMBAY HIGH COURT] the issue involved pertained to the powers of the Municipal Corporation of Greater Bombay to levy octroi on natural gas that was being imported by the Petitioner in that case (ONGC) within the Municipal limits of the Municipal Corporation of Greater Bombay. In the facts of that case Section 139 of the MMC Act specifically conferred powers upon the Municipal Corporation to impose four different types of taxes including octroi in terms of Entry 22(a) of Schedule-H - even the said judgment of ONGC is of absolutely no avail to the Respondents as the same was delivered and applicable in entirely different facts. Additionally as we have already held in the facts of the present case, the Respondent No.3 was duty bound to duly certify the octroi exemption since Petitioner had fulfilled the eligibility criteria. Petitioner could not therefore be deprived of its entitlement to octroi refund on failure of Respondent No.3 discharging its duties as required in law. Thus we hold the judgment relied upon is of no avail to the Respondents. There are no hesitation in holding that the Petitioner is eligible for a refund of octroi under Section 194 (2) of the MMC Act of an amount of Rs.16,71,401/- paid as octroi on the said articles imported pursuant to the said work order - in the facts of the present case the failure to provide a declaration of duty certified by the octroi officer would not render the Petitioner ineligible for a refund of octroi of Rs.16,71,401/- (Rupees Sixteen Lakhs Seventy One Thousand Four Hundred and One only) paid as octroi on the said articles imported pursuant to the said work order. Petition allowed.
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2022 (12) TMI 1105
Evasion of sales tax - concealing the sales figures of business pertaining to the year from 2009-2010 to 2013-2014 - HELD THAT:- The petitioner is now facing proceedings with civil consequences like imposition of penalty upon him. With the self same cause of action he has also been subjected to criminal proceedings as above. The criminal proceeding has been initiated without a sanction order from the Commissioner, as envisaged in law to be mandatory precondition for initiation thereof. All these facts unfailingly point out to the inherent illegality and nullity of the proceedings initiated against the petitioner. There should not be any hesitation to hold that in case the said proceeding is allowed to be continued against the petitioner, the same would amount to be abuse of the process of court. Revision allowed.
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Indian Laws
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2022 (12) TMI 1104
Appreciation of evidence - failure to give any evidence indicating that the substance Pyridoxal 5 Phosphate - extraordinary delay of more than four years between the initial site inspection, the show cause notice, and the complaint - powers of Respondent/ Drugs Inspector under Section 22 of the Drugs and Cosmetics Act, 1940 - HELD THAT:- Upon perusal of the legal nature of the impugned substance, it can be seen that the impugned substance has been categorized as a bulk food substance falling under the definition of food as per Section 3(1)(j) of the Food Safety and Standards Act, 2006. The impugned substance has specifically been mentioned as a food ingredient in Serial No.4(ii) of the Schedule-I of the Food Safety and Standards Regulations, 2016 - It is also worth mentioning that the Respondent has made no effort to prove that the alleged substance is only a drug and not a food- manufacturing substance. No scientific evidence or otherwise has been furnished to prove that the alleged substance is solely used for manufacturing drug and not food items. Prima Facie, due to the lack of evidence adduced by the Respondent in the four-year period between the initial enquiry and the complaint, this court cannot presume that the alleged substance can only be classified as a drug . There has been a gap of more than four years between the initial investigation and the filing of the complaint, and even after lapse of substantial amount of time, no evidence has been provided to sustain the claims in the complaint. In the present case, the Respondent has provided no explanation for the extraordinary delay of more than four years between the initial site inspection, the show cause notice, and the complaint. In fact, the absence of such an explanation only prompts the Court to infer some sinister motive behind initiating the criminal proceedings - While inordinate delay in itself may not be ground for quashing of a criminal complaint, in such cases, unexplained inordinate delay of such length must be taken into consideration as a very crucial factor as grounds for quashing a criminal complaint. It must be noted that the High Court while passing the impugned judgment, has failed to take into consideration to the facts and circumstances of the case. While it is true that the quashing of a criminal complaint must be done only in the rarest of rare cases, it is still the duty of the High Court to look into each and every case with great detail to prevent miscarriage of justice. The law is a sacrosanct entity that exists to serve the ends of justice, and the courts, as protectors of the law and servants of the law, must always ensure that frivolous cases do not pervert the sacrosanct nature of the law. The impugned order dated 23.08.2021 passed by the High Court is not liable to be sustained and is hereby set aside - Appeal allowed.
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2022 (12) TMI 1103
Continuing unlawful activity - Offence of organised crime - whether an FIR under the 2015 Act (Special enactment) is maintainable in law or can be registered if there is no FIR registered against the Accused after the promulgation of the 2015 Act for any offence under the Indian Penal Code or any other statute? HELD THAT:- It is plain from a bare reading of the non-obstante Clause in the Sub-section that the power to grant bail by the High Court or Court of Sessions is not only subject to the limitations imposed by Section 439 of the Code but is also subject to the limitations placed by Section 20(4) of the 2015 Act. Apart from the grant of opportunity to the Public Prosecutor, the other twin conditions are: the satisfaction of the court that there are reasonable grounds for believing that the Accused is not guilty of the alleged offence and that he is not likely to commit any offence while on bail. The conditions are cumulative and not alternative. The satisfaction contemplated regarding the Accused being not guilty has to be based on reasonable grounds. The expression 'reasonable grounds' means something more than prima facie grounds. It contemplates substantial probable causes for believing that the Accused is not guilty of the alleged offence. The reasonable belief contemplated in the provisions requires existence of such facts and circumstances as are sufficient in themselves to justify satisfaction that the Accused is not guilty of the alleged offence. Thus, recording of findings under the said provision is a sine qua non for granting bail under the 2015 Act. If the decision of the coordinate Bench of this Court in the case of STATE OF MAHARASHTRA VERSUS SHIVA @ SHIVAJI RAMAJI SONAWANE ORS. ETC. AND MEHMOOD KHAN YAKUB KHAN PATHAN ETC. ETC. [ 2015 (7) TMI 1420 - SUPREME COURT] is looked into closely along with other provisions of the Act, the same would indicate that the offence of 'organised crime' could be said to have been constituted by at least one instance of continuation, apart from continuing unlawful activity evidenced by more than one chargesheets in the preceding ten years. If 'organised crime' was synonymous with 'continuing unlawful activity', two separate definitions were not necessary. The definitions themselves indicate that the ingredients of use of violence in such activity with the objective of gaining pecuniary benefit are not included in the definition of 'continuing unlawful activity', but find place only in the definition of 'organised crime'. What is made punishable Under Section 3 is 'organised crime' and not 'continuing unlawful activity'. If 'organised crime' were to refer to only more than one chargesheets filed, the classification of crime in Section 3(1)(i) and 3(1)(ii) on the basis of consequence of resulting in death or otherwise would have been phrased differently, namely, by providing that 'if any one of such offence has resulted in the death', since continuing unlawful activity requires more than one offence. Reference to 'such offence' in Section 3(1) implies a specific act or omission. The dictum as laid by this Court in Shiva alias Shivaji Ramaji Sonawane does not require any relook. The dictum in Shiva alias Shivaji Ramaji Sonawane is the correct exposition of law. The appeal stands disposed of.
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