TMI Tax Updates - e-Newsletter
December 3, 2024

Case Laws in this Newsletter:

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

TMI Short Notes

1. Decoding the GST Forgery Case: Balancing Personal Liberty and Safeguarding Public Interest for Grant of Bail in Economic Offenses

  GST:

2. Equity and Justice in Tax Matters: Condonation of Bona Fide Delays

  Income Tax:

3. Embracing Equity in Tax Laws: Recognizing Genuine Difficulties in Condonation of Delays in filing of ITR

  Income Tax:

4. Recovery Proceedings Against Legal Heirs of Sole Proprietors: Invalidity of Demand Notices Issued Against Deceased Exporters

  Customs:

5. Jurisdiction of DRI Officers: Supreme Court Upholds Section 97 of Finance Act 2022 validating Customs Notices

  Customs:

Articles

1. PAYMENT OF PRE-DEPOSIT FOR FILING APPEAL BY DEBITING ELECTRONIC CREDIT LEDGER - POSSIBLE?

   By: DR.MARIAPPAN GOVINDARAJAN

2. SCOPE OF BUSINESS AND PLACE OF BUSINESS IN GST

   By: Dr. Sanjiv Agarwal

3. The Future of Internal Auditing: Trends to Watch

   By: Ishita Ramani

News

1. Gross and Net GST revenue collections for the month of Nov, 2024

2. SFIO conducts search operations at three companies engaged in manufacturing of EVs

3. National Statistics Office (NSO) under MoSPI is committed to ensuring accurate and reliable data while minimizing non-sampling errors

4. Computation of GDP

5. Global South not responsible for environmental damage, partner countries have shared responsibilities towards sustainability: Shri Piyush Goyal

6. Union Minister for Finance and Corporate Affairs Smt. Nirmala Sitharaman chairs Credit Outreach Programme at Madhubani, Bihar

7. CBDT extends due date for filing return of income in the case of an assessee withrequirement to furnish report referred to in section 92E, for AY 2024-25

8. UPI: Revolutionizing Digital Payments in India

Notifications

Central Excise

1. 30/2024 - dated 2-12-2024 - CE

Seeks to withdraw Road and Infrastructure Cess (RIC) on export of motor spirit, commonly known as petrol, and high speed diesel oil.

2. 29/2024 - dated 2-12-2024 - CE

Seeks to withdraw Special Additional Excise Duty (SAED) on production of Petroleum Crude and on export of Aviation Turbine Fuel, motor spirit, commonly known as petrol, and high speed diesel oil.

GST - States

3. 1785-F.T. - dated 22-11-2024 - West Bengal SGST

Seeks to amend Notification No.1135-F.T. dated 28.06.2017.

4. 1784-F.T. - dated 22-11-2024 - West Bengal SGST

Seeks to amend Notification No. 1128-F.T. dated 28.06.2017.

5. 1783-F.T. - dated 22-11-2024 - West Bengal SGST

Seeks to amend Notification No. 1125-F.T. dated 28.06.2017.

6. 1782-F.T. - dated 22-11-2024 - West Bengal SGST

Seeks to further amend Notification No. 1344-F.T. dated 13.09.2018 so as to make provisions for deduction of tax at source by a registered recipient of metal scraps for supplies from a registered supplier.

7. 1781-F.T. - dated 22-11-2024 - West Bengal SGST

Seeks to amend this Department's Notification No 1070-F.T dated 21.06.2017 so as to introduce the system of payment of tax under RCM on supply of metal scraps by unregistered person to registered person.

8. 1780-F.T - dated 22-11-2024 - West Bengal SGST

Seeks to supersede this Department's Notification no. 637-F.T. dated 14.06.2021 to rationalize the late fee structure for late filing of FORM GSTR-7 even further, by waiving off the late fee for filing of Form GSTR-7 for a month beyond the due date, where the total amount of State tax deducted at source in the month is nil.

Circulars / Instructions / Orders

Income Tax

1. 18/2024 - dated 30-11-2024

Extension of due date for furnishing return of income in the case of an assessee who is required to furnish a report referred to in section 92E regarding International Transactions for the AY 2024-25

Highlights / Catch Notes

GST

• Appellate order set aside, delay condonation granted in GST case for FY 2018-19.

  Case-Laws - HC : The High Court set aside the order dated 27.03.2024 bearing No. ACCT (Audit)-2/HPT/GST-ADJN/ORDER-2023/24/T for F.Y.2018-19 passed by respondent No. 1 and partly allowed the writ petition. The delay in filing the appeal was condoned by granting relief to the petitioner in line with the orders passed in the case of M/s. Sadhana Enviro Engineering Services, considering the peculiar facts and circumstances of the present case without examining the correctness of the Appellate Authority's order refusing to condone the delay u/s 107(4) of the KGST Act.
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• Tax authority ordered to reconsider rectification plea after court found lack of reasoning.

  Case-Laws - HC : The High Court set aside the impugned order dated 02.02.2024 rejecting the Rectification Application filed by the petitioner. The court found that the order lacked reasoning as to why there was no error apparent on the record to reject rectification. The court held that when an assessee seeks rectification, and the same is rejected without considering reasons or providing an opportunity to the assessee, it is contrary to Section 161. Consequently, the Rectification Application filed by the petitioner shall be considered afresh by the respondent after providing an opportunity to the petitioner, and appropriate orders shall be passed in accordance with law.
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• High Court quashes arbitrary GST registration cancellation order, restores registration for lack of reasoning.

  Case-Laws - HC : The High Court set aside the order cancelling the Petitioner's GST registration. The cancellation order by the quasi-judicial authority suffered from non-application of mind as it failed to assign any reason, violating principles of natural justice. Consequently, the Petitioner's registration was restored to the status prior to the issuance of the show cause notice dated 02.02.2022.
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• Petition to Amend GST Number in GSTR-1 Post-Limitation Period Dismissed; Highlights Cascading Effects of Late Corrections.

  Case-Laws - HC : The High Court dismissed the writ petition filed by the petitioner seeking permission to rectify/amend the GST number of the purchaser in GSTR-1 return after the expiration of the limitation period u/s 37(3) of the Central Goods and Services Tax Act, 2017. The Court held that if a person submits an erroneous GSTR-1 and does not correct it within the timeline, the subsequent GSTR-2A and GSTR-3B would also reflect the erroneous information, leading to cascading effects. The time limitation u/ss 37(1) and 37(3) is directly linked to Section 16(4), which allows input tax credit to be availed till the due date of furnishing the return u/s 39 for the month of September following the end of the financial year or furnishing of the annual return, whichever is earlier. The petitioner could not rectify the error beyond the statutory time limit prescribed under the GST Act.
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• Court Grants Anticipatory Bail in Fraud Case Involving Fake Forms and Fictitious Transactions Under GST Law.

  Case-Laws - HC : The High Court granted anticipatory bail to the petitioners who were accused of fraudulently claiming Input Tax Credit (ITC) by creating fake forms, forging bills, and showing fictitious transactions through dummy firms. The court held that the allegations prima facie attract offenses under the Indian Penal Code (IPC) for availing ITC fraudulently based on false documents and sham transactions, as well as penal provisions under the GST law. While prosecution under two different enactments is permissible as per Section 26 of the General Clauses Act, the court noted that the petitioners had already been prosecuted u/s 132 of the CGST Act for the same allegations and had remained in custody for a substantial period. Considering the overlapping nature of the allegations, the fact that the petitioners were not absconding, and their previous custody, the court granted them anticipatory bail.
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• Revenue authorities' order challenged, statutory appeal remedy available: High Court.

  Case-Laws - HC : The High Court dismissed the writ petition filed by the petitioner challenging the Order-in-Original and held that the petitioner has an adequate and efficacious statutory remedy of appeal u/s 107 of the CGST/AGST Act, 2017 against the Order-in-Original. The Court observed that it does not generally entertain writ petitions in revenue matters where the petitioner has a statutory remedy available. The Court found that there was no total violation of principles of natural justice as the petitioner was provided an opportunity to respond to the show cause notice. The Court disposed of the writ petition, reserving the liberty to the petitioner to avail the statutory remedy of appeal.
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• Taxpayer's writ petition against ITC denial dismissed; asked to file statutory appeal.

  Case-Laws - HC : The High Court dismissed the writ petition filed by the petitioner challenging the Order-in-Original issued under the CGST/AGST Act, 2017, denying input tax credit (ITC) and refund of ITC on zero-rated supplies. The Court held that the petitioner was provided an adequate opportunity to respond to the Demand-cum-Show Cause Notice but failed to submit an effective reply or avail personal hearing after seeking time. Principles of natural justice were not violated. The petitioner was directed to avail the statutory remedy of appeal u/s 107 of the CGST/AGST Act against the Order-in-Original, instead of directly approaching the High Court through a writ petition.
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• Petition Dismissed: Court Upholds GST Registration Cancellation Due to Late Appeal Filing Beyond Legal Time Limit.

  Case-Laws - HC : The High Court dismissed the petition challenging the cancellation of the petitioner's GST registration. The appeal against the cancellation order was filed beyond the prescribed limitation period. The Court held that it cannot condone the delay in filing the appeal under its extraordinary jurisdiction, as the Supreme Court has ruled that there is no power to condone the delay after the expiry of the statutory period for filing appeals under the relevant law. The Court observed that while it has wide jurisdiction under Article 226 of the Constitution, it cannot disregard the substantive provisions of the statute and pass orders contrary to the mechanism prescribed therein. Consequently, no interference was warranted in the impugned orders, and the petition was dismissed.
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• Govt entity directed to pay GST difference at enhanced rate + interest for delay.

  Case-Laws - HC : The High Court allowed the petition and directed the respondent No. 2, a government entity, to pay the petitioner the difference in GST amount at the enhanced rate of 18% instead of 12% for the period from 01.01.2022 to 30.09.2022 within three months, failing which the petitioner shall be entitled to interest at 6% per annum from the date of entitlement. The Court rejected the objections raised by respondents No. 2 & 3 regarding the maintainability of the writ petition and availability of alternative remedy under the Arbitration Act, as no disputed questions of fact were involved in the case.
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Income Tax

• Deadline extended for filing income tax returns with transfer pricing reports from Nov 30 to Dec 15 for FY 2024-25. -25 -25.

  Circulars : The Central Board of Direct Taxes extended the due date for furnishing return of income from 30th November 2024 to 15th December 2024 for the assessment year 2024-25 in cases where the assessee is required to furnish a report u/s 92E regarding international transactions.
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• ITAT Rules on Transfer Pricing: Upholds TPO's Unit Treatment, Remands Tested Parties Issue, Adjusts Brand Fees and Comparables.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) adjudicated on various transfer pricing issues concerning an assessee. Regarding segmentation of business activities, the ITAT upheld the Transfer Pricing Officer's (TPO) approach of treating the UDS and CM segments as a composite unit for determining the arm's length price, dismissing the assessee's claim of separate segments. However, on the issue of rejecting overseas associated enterprises as tested parties, the ITAT remanded the matter to the TPO for re-adjudication after obtaining necessary details and providing due opportunity to the assessee. The ITAT deleted the TPO's upward adjustment for brand development fees, relying on coordinate bench rulings that such expenditures are not international transactions. For the business processing service segment, the ITAT excluded Infosys Technologies Ltd. and HSCC India Ltd. from the list of comparables and restored the matter to the TPO for recalculation of adjustments. Regarding advances received for extended warranties, the ITAT held that such amounts become taxable income only in the year of maturity of the warranty contracts, not the year of sale, to avoid double taxation. The ITAT also remitted the issue of disallowance of reversed expense provisions to the Assessing Officer for re-adjudication after obtaining necessary details from the assessee.
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• Reassessment on change of opinion invalid; deduction u/s 54B stands.

  Case-Laws - HC : The High Court held that the reopening of assessment was invalid. Despite the amendment made in 1998 to Section 147 of the Act, reassessment proceedings cannot be initiated based on a change of opinion. The Assessing Officer (AO) had previously considered the issue of deduction u/s 54B and formed an opinion, albeit without recording reasons. The explanation provided by the petitioner was accepted, and the deduction u/s 54B was allowed. Consequently, the notice issued u/s 148 for the assessment year 2009-2010 and the order rejecting the objections were quashed by the High Court.
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• Tribunal Rules 20% of Cash Deposits Taxable for Textile Firm; Deletes Sundry Creditor Additions; Upholds 10% Expense Disallowance.

  Case-Laws - AT : The Appellate Tribunal rendered the following decision: The assessee, engaged in textile and grey business with a turnover exceeding Rs. 1 crore, made cash deposits during the demonetization period. Considering the business nature and inability to substantiate the entire source, 20% of the total cash deposit was treated as unexplained income, taxable at normal rates, while the remaining 80% was deleted. Regarding sundry creditors addition, the Tribunal directed deletion due to lack of verification by lower authorities despite the assessee providing account confirmations and sample purchase bills. The 10% ad hoc disallowance of expenses was upheld as the assessee did not offer income u/s 44AD, and the disallowance ratio was reasonable considering the nature of expenses.
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• Reasonable loan explanation accepted; Interest deduction allowed.

  Case-Laws - AT : The Income Tax Appellate Tribunal held that the assessee had reasonably discharged its onus to explain the loan credit by adducing proper legal evidence. The loan amount received from M/s. Abhilasha Shoppers Pvt. Ltd. was verifiable from the financial statements, TDS certificates, and bank statements. The repayment of loan along with interest was made through proper banking channels. The general statements recorded by the Investigation Wing were not specific to the assessee's case. Consequently, the Tribunal set aside the additions made u/s 68 and allowed the deduction of interest paid on the loan, following the decision in M/s. Vibrant Global Capital Ltd.
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• Income tax reassessment beyond 4-year period invalid; no failure by assessee to disclose material facts.

  Case-Laws - AT : The ITAT allowed the assessee's appeal against the reopening of assessment u/s 147 beyond the four-year period. The Assessing Officer failed to record a finding that the escapement of income was attributable to the assessee's failure to fully and truly disclose material facts. The Tribunal held that since the assessee had disclosed all facts in the return filed u/s 139(1) and the case was scrutinized u/s 143(3), the reopening beyond four years without establishing the assessee's failure to disclose material facts rendered the reassessment proceedings nullity, relying on the Supreme Court's decision in CEAT Ltd.
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• Income Tax Dispute: Partial Relief for Farmer on Agricultural Income Additions.

  Case-Laws - AT : The Income Tax Appellate Tribunal partly allowed the appeal. It directed the Assessing Officer to delete the addition of Rs. 66,825/- from the assessee's agricultural income and sustained the addition of Rs. 15,525/-. Regarding the addition in the name of the assessee's wife, the Tribunal held that since she is an independently assessed taxpayer and co-owner of the land, the income cannot be included in the assessee's hands based on presumptions and assumptions without substantive evidence. The Tribunal set aside the CIT(A)'s order and directed the deletion of the addition made in the assessee's hands pertaining to wife's income.
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• No penalty for income under-reporting when all facts disclosed to tax officer: ITAT.

  Case-Laws - AT : The Income Tax Appellate Tribunal allowed the assessee's appeal against the penalty levied u/s 270A. The Tribunal held that it was not a case of misrepresentation or suppression of facts, as the assessee had duly disclosed all relevant facts before the Assessing Officer and in the return of income. The Tribunal emphasized that for levying penalty u/s 270A, the Assessing Officer must establish misreporting of income under the specific clauses of sub-section (9) of Section 270A, which was not done in this case. The assessee's belief regarding the applicability of exemption u/s 54F was bona fide, and there was no question of misrepresentation or suppression of facts when all facts were duly stated and reported.
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• Employers Not Liable for Interest on Early Year Tax Shortfalls if Corrected by Year-End, Rules Tribunal.

  Case-Laws - AT : The Income Tax Appellate Tribunal held that if there are bona fide reasons for deducting lower tax in the earlier months of the financial year, and the shortfall is rectified immediately upon noticing it, then Section 192(3) of the Income Tax Act would save the employer from liability to pay interest u/s 201(1A). Merely short deduction of tax at source from salaries paid to employees does not invoke Section 201(1A), unless the total tax deducted by the end of the year is less than the tax deductible from the salary paid to the employee in that year. The Tribunal also held that Section 220(2) interest is applicable only when amounts specified in the demand notice u/s 156 are not paid within the stipulated period, which was not the case here. Consequently, the levy of interest u/ss 201(1A) and 220(2) was deleted.
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• Income tax demand quashed due to lack of DIN & improper approval for reopening assessment.

  Case-Laws - AT : The Income Tax Appellate Tribunal quashed the assessment order u/s 144/147 and the demand notice u/s 156, treating them as non-existent due to the failure to mention the Document Identification Number (DIN) as per the CBDT circular. Additionally, the Tribunal held that the notice issued u/s 148 was invalid due to lack of proper application of mind and objective satisfaction by the higher authority while granting approval, following the Bombay High Court's decision in Teleperformance Global Service (P) Ltd. Consequently, the assessee's appeal was allowed.
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• Tax tribunal orders fresh virtual hearing for assessee after appeal authority violated rules.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] under the National Faceless Appeal Centre (NFAC) and remitted the matter back to CIT(A) for de novo adjudication. The assessee's request for a personal hearing before CIT(A) was rejected, violating Rule 12 of the Faceless Appeals Rules 2021 which mandates providing a virtual hearing if requested by the assessee. Following the Bank of India case, the ITAT directed CIT(A) to grant an opportunity for a virtual hearing and pass a fresh speaking order in accordance with the law.
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• Educational trust's application for tax exemption to be reconsidered by CIT, delay condoned.

  Case-Laws - AT : The Income Tax Appellate Tribunal held that the assessee's application for registration u/s 80G was filed within the statutory time limit. The Tribunal directed the Commissioner of Income Tax (Exemptions) to treat the application as validly filed and verify the assessee's eligibility as per the Act after granting an opportunity to the assessee to file necessary documents. The provisional registration granted earlier cannot be cancelled solely on the ground of delay in filing the application. The Tribunal ruled that the interpretation adopted by the CIT(Exemptions) would lead to an unintended consequence of debarring existing trusts from seeking registration.
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• Holding Period for Liquidated Assets Starts from Company's Ownership; Land Sale Gains Classified as Long-Term Capital Gains.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) held that when an assessee receives property consequent to the liquidation of a company, the period of holding the asset is calculated from the date the previous owner (the company) held it, as per Explanation 1 to Section 2(42A) of the Income Tax Act. Therefore, the gain on the subsequent sale of the land received from the liquidated company was rightly treated as long-term capital gain by the assessee. Additionally, the provisions of Section 50C, which deal with deeming the stamp duty value as full consideration for transfer, were held inapplicable as the assessee did not transfer any capital asset but received the land on distribution of assets upon the company's liquidation, which is not considered a transfer u/s 46(1).
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• Commissions paid abroad exempt from TDS for non-resident service providers without Indian presence.

  Case-Laws - AT : The recipients were non-residents without any permanent establishment or business connection in India. The services were rendered outside India for which commission was paid, and the income accrued outside India. Consequently, no tax deduction at source (TDS) u/s 195 was liable to be made, and the disallowance u/s 40(a)(i) did not apply. The non-resident recipients had no presence or business activities in India, rendering their services entirely from abroad. Therefore, the assessee was not obligated to deduct TDS, and the appeal was allowed.
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• Tribunal Rules on Capital Gains from Property Possession Rights; Documentation Inadequate to Prove 2004 Family Settlement.

  Case-Laws - AT : The Income Tax Appellate Tribunal (ITAT) allowed the assessee's appeal for statistical purposes in relation to the computation of capital gains arising from the transfer of "possession rights" over a property. The assessee contended that the "possession rights" constituted a "capital asset" and the transfer of such rights was liable to capital gains tax. However, the ITAT observed that the assessee failed to furnish crucial documents supporting the acquisition of such "possession rights" through a family settlement agreement in 2004. The ITAT noted discrepancies in the assessee's computation of the "cost of acquisition" of the "possession rights." The assessee had computed the cost based on the registered valuer's report valuing the property as of 01.04.1981, despite not having ownership rights over the property. The ITAT found it unclear why the assessee computed the cost of acquisition based on ownership rights when the assessee had acquired only "possession rights" through a family arrangement without incurring any cost. While acknowledging that the "right of possession" qualifies as a capital asset, the ITAT held that the assessee failed to substantiate the date of acquisition of such rights (the 2004 family arrangement) and the basis for computing the cost of acquisition at Rs. 43,73,026. Consequently, the ITAT allowed the assessee's appeal for statistical purpose.
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• ITAT Reverses Relief Decision, Rules Surrogacy Advances Not Income; Remands Case for Further Evidence on Account Inaccuracy.

  Case-Laws - AT : The ITAT set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)] granting relief to the assessee (anonymized party) on the ground that the matter was sub-judice before the Supreme Court. The ITAT found that the CIT(A)'s order was based on a wrong fact, as the Supreme Court had already dismissed the writ petition before the appellate order was passed. Regarding the addition of advances received from surrogacy clients as income, the ITAT held that since the advances were received from foreign nationals, and due to the government's circular debarring foreign nationals from surrogacy in India, the procedures could not take place. Consequently, the liability to pay the amount subsisted, and the advances did not become the assessee's income. The ITAT found merit in the assessee's argument that when the advances were received and shown as outstanding in the books of account, and the assessee recognized part of the income from those foreign nationals as income, the accounts could not be considered true and correct. The ITAT restored the issue to the Assessing Officer (AO) with directions to provide the assessee another opportunity to substantiate with evidence.
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• Petitioner Granted Leave to Challenge Sanction Validity in High Court for Reopening Tax Assessment u/s 147.

  Case-Laws - SC : The Supreme Court disposed of the special leave petition as withdrawn, allowing the petitioner to raise the contention regarding the validity of sanction granted by the competent authority before issuing the notice of reopening assessment u/s 147 before the High Court through an appropriate application. The High Court had previously held that the Additional Commissioner of Income Tax had applied their mind and granted sanction in an integrated exercise, conveying satisfaction to the Assessing Officer separately. The High Court found no reason to believe there was a non-application of mind. However, the petitioner contended that this factual issue was raised before the High Court but not considered in the impugned judgment. The Supreme Court noted that while this contention was recorded in its order issuing notice, it was not agitated before the High Court according to the impugned judgment. Since the petitioner submitted that the contention was indeed raised at the hearing but not noted by the High Court, the Supreme Court permitted the petitioner to withdraw the special leave petition and file an appropriate application before the High Court to address this issue.
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Customs

• Refund claim remanded for re-processing after setting aside earlier order; appellant to submit documents.

  Case-Laws - AT : The Tribunal allowed the appeal by remanding the matter to the original authority to process the refund claims after providing an opportunity of hearing to the appellant. The Tribunal held that the Order-in-Appeal relied upon by the authorities to reject the refund claim has been set aside. Regarding non-submission of TR-6 challans and Bills of Entry, the appellant was directed to file the same before the refund authority. The Tribunal clarified that unjust enrichment is not applicable to provisional assessments prior to 2006, and in similar cases, the matter was remanded for verification of documents. The Tribunal directed the Revenue to finalize and cancel the PD bonds and communicate the same to the concerned refund section.
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• Court Rules Used Personal Jewellery Exempt from Duty Under Baggage Rules; Overturns Customs Misinterpretation.

  Case-Laws - HC : The High Court held that personal jewellery which is not newly acquired during an overseas trip, but rather has been a used personal effect carried by the passenger, would not be subject to the monetary restrictions and duty requirements u/rs 3 and 4 of the Baggage Rules, 2016. The Court made a distinction between 'personal jewellery' and 'jewellery' per se. Personal jewellery that has been a used personal effect of the passenger would be treated as 'personal effects' and exempt from duty restrictions, as clarified by the Customs Circular No. 72/98. This position would continue to be applicable under the Baggage Rules, 2016, despite the definition of 'personal effects' introduced therein. The Joint Commissioner of Customs misconstrued the scheme and objectives of the 2016 Rules by failing to appreciate this distinction between personal jewellery and newly acquired jewellery. Consequently, the Court set aside the order of confiscation and detention of the petitioner's personal gold ornaments, which were used personal effects and not newly acquired jewellery.
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• Court Rules Foreign Trade Policy Cannot Authorize Interest Levy u/s 28AA; Petitioner Wins Writ Petition.

  Case-Laws - HC : The High Court held that the Foreign Trade Policy cannot, by itself, authorize the levy of interest u/s 28AA of the Customs Act, 1962, for the recovery of wrongly availed amounts against duty credit scrips as rewards formulated under the Service Exports from India Scheme. The levy of interest must be supported by plenary legislation. While the Foreign Trade Policy contemplated that if any person is found ineligible for the benefit under any Scheme, the amount would have to be refunded along with interest u/s 28AA of the Customs Act, 1962, the Court ruled that no provision of the Act under which the Foreign Trade Policy has been framed has been pointed out to show that the provisions of Section 28AA have been made applicable for levying interest on any person who is found ineligible for any benefit received under the terms of any Scheme under the Foreign Trade Policy. Consequently, the petitioner succeeded, and the writ petition was allowed by the High Court.
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• Exporter Penalized for Misdeclared Goods; Tribunal Finds Lack of Fairness and Transparency in Low-Value Duty Case.

  Case-Laws - AT : The case pertains to a duty drawback claim where the exporter (appellant) allegedly misdeclared the export goods, leading to an excess drawback claim of Rs 20,394/-. The adjudicating authority confiscated the exported goods for misdeclaration and imposed penalties u/ss 114(iii) and 125 of the Customs Act, 1962. The key issues and holdings are: 1. The order imposing severe penalties for the excess drawback claim of Rs 20,394/- is non-speaking and lacks reasoning on the proportionality of the action. 2. The authority failed to consider a relevant circular issued before the order, which could have mitigated the penalties. 3. The exporter's request for a show cause notice and hearing was not granted, violating principles of natural justice. 4. The waiver of rights by the exporter to avoid demurrage and delays in the adjudication process does not justify the disproportionate penalties. 5. The Commissioner of Appeals upheld the confiscation and penalties based on the availability of goods at the time of the order, without addressing the lack of reasoning and proportionality. 6. The Tribunal held that the order lacked fairness, transparency, and proportionality, and remanding the matter after a decade would not serve justice in this low tax case involving a typographical.
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• Tribunal Orders Reclassification of Imported Additives for Cements; Calls for Detailed Review of Customs Duties.

  Case-Laws - AT : The case pertains to the classification of imported goods, specifically 'prepared additives for cements, mortars or concretes', for the purpose of determining the applicable customs duty. The key issues and holdings are as follows: 1. The first appellate authority had affirmed the classification of the goods under tariff item 3505 1090 of the First Schedule to the Customs Tariff Act, 1975, but the Tribunal found this classification lacking in justification and support. 2. The appellant claimed that the product should be classified under heading 3824 of the First Schedule, as it is exclusively used as an additive to cement and mortar, but this claim was not examined by the authorities. 3. The Tribunal held that heading 3824 is not a residuary heading, and according to Rule 3 of the General Rules for Interpretation of the Import Tariff, the specific description in the heading should prevail over any less specific description. 4. While the show cause notice proposed to alter the classification at the sub-heading level, the Tribunal observed that it was obligatory to isolate the relevant tariff item within such classification with appropriate justification, which was lacking in the present case. 5. The Tribunal set aside the impugned orders and remanded the matter back to the respective original authorities for fresh adjudication, directing them to carry out a comprehensive determination.
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• Tribunal Considers Anti-Dumping Duties on Color Coated Aluminum Coils with Specific Coatings; Clarifies Exclusions.

  Case-Laws - AT : Whether anti-dumping duty (ADD) is applicable on color coated aluminum coils imported as coated with Styrene/Butyl Methacrylate Copolymer, other than PE/PVDF. - The Tribunal found that the Trade TRU had clarified through Circular No.45/2017-Customs (ADD) that "color coated aluminum foil with either PE (Polyester) coating or PVDF (Fluorine-carbon), coating falling under CTH 7607" is excluded from the scope of the product under consideration (PUC) for ADD. 3. However, the Tribunal observed that the TRU had added the words "with either PE (Polyester) coating or PVDF (Fluorine-carbon), coating falling under CTH 7607" while issuing the circular, which led to the revenue restricting the exclusion. 4. The Tribunal noted that the Principal Bench had previously held that the product is not manufactured in India, and the Designated Authority had supported excluding color coated aluminum foil from the scope of ADD. 5. The Tribunal found merit in the appellant's contention that the purpose of imposing ADD is to safeguard the interests of the domestic industry.
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DGFT

• Govt approves export of 1kg Clobetasol Propionate using 0.95kg imported Betamethasone under new SION.

  Circulars : The Directorate General of Foreign Trade notified a new Standard Input Output Norm (SION) A-3682 under the 'Chemical and Allied Product' category. This SION permits the export of 1 kg of Clobetasol Propionate using 0.95 kg of Betamethasone as the imported input. The notification was issued by the Director General of Foreign Trade, who exercises powers conferred by the Foreign Trade Policy 2023.
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Indian Laws

• High Court Upholds Validity of Post-Dated Cheques in GST Payment Dispute, Allows Trial Under Negotiable Instruments Act.

  Case-Laws - HC : The petitioner issued two post-dated cheques bearing No. 622623 for Rs. 93,00,000/- and No. 622624 for Rs. 1,54,00,000/- to the respondent as per a Deed of Undertaking. The Deed stipulated that the petitioner would clear GST of Rs. 9,63,00,000/- for a firm, out of which 10% (Rs. 33,00,000/-) would be paid to the respondent. If the GST rate was 2%, the amount payable would be Rs. 1,54,00,000/-. The cheques were issued subject to fulfillment of certain conditions. The High Court held that such a stipulation regarding issuance of cheques could be valid. It found no ground to quash the complaint u/s 138 of the Negotiable Instruments Act or the cognizance taken by the Judicial Magistrate. The issues raised appeared to be matters for trial. The High Court rejected the petition invoking inherent powers for quashing, holding that no case for quashing was made out.
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Service Tax

• Service Tax Refund Granted for Mining Services; Interest Awarded for Delay in Payment.

  Case-Laws - AT : The key points from the legal summary are: 1. The services provided by the appellant amounted to mining activities and fell within the scope of "mining services" u/s 65(105)(zzzy) of the Finance Act, 1994, introduced on 01.06.2007. 2. The activities were not preparatory work but constituted mining activities per se to win the minerals (lignite). Therefore, they cannot be classified as "Site formation and clearance, excavation and earthmoving and demolition" u/s 65(97a). 3. Following the Supreme Court's decision in Doypack Systems P Ltd, the services related to mining of lignite, which is a mineral, and thus qualified as mining services. 4. The appellant is eligible for a refund of Rs. 4,60,77,978 paid as service tax before 01.06.2007, as the services were not taxable prior to that date. 5. The appellant has crossed the bar of unjust enrichment by providing evidence that the tax burden was borne by them. 6. The appellant is entitled to interest on the delayed refund payment as per Section 11BB of the Central Excise Act, 1944, from the expiry of 3 months from the date of the original refund application. 7.
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• Forfeited Deposits Not Consideration for Services Under Finance Act; Tribunal Confirms No Service in Contract Cancellation.

  Case-Laws - AT : The case deals with the issue of whether the amount retained through forfeiture of earnest money/security deposits of contractors can be considered as consideration for declared services u/s 66E(e) of the Finance Act, 1994, which covers "agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act." The Tribunal held that the forfeited amount cannot be considered as consideration towards rendering declared services u/s 66E(e). The cancellation of the contract itself is not considered a service. This decision is in line with earlier rulings of the Tribunal and the Supreme Court in the case of South Eastern Coalfields Limited. The Department's Circular No. 214/1/2023-ST dated 28th February 2023 clarified that the activities contemplated u/s 66E(e) are those where the agreements specifically refer to such an activity, and there is a flow of consideration for this activity. The Tribunal referred to its earlier decision in the case of Bharat Heavy Electricals Limited, which dealt with the decision in South Eastern Coalfields Limited. The Board decided not to file an appeal against the decision in South Eastern Coalfields Limited, which was upheld by the Supreme Court. Consequently, the Tribunal held that the amount retained was wrongly considered as consideration for rendering declared services.
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Central Excise

• Govt withdraws notifications related to Road & Infrastructure Cess rates on certain goods with immediate effect.

  Notifications : The Central Government rescinded Notification No. 10/2022-Central Excise and Notification No. 11/2022-Central Excise, both dated 30th June 2022, pertaining to the effective rates of Road and Infrastructure Cess, with immediate effect through Notification No. 30/2024-Central Excise dated 2nd December 2024, exercising powers conferred by relevant sections of the Finance Act 2018, Central Excise Act 1944, and General Clauses Act 1897.
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• Govt scraps special excise duty on crude oil & aviation fuel.

  Notifications : The Central Government has rescinded various notifications imposing Special/Additional Excise Duty on Crude Petroleum and Aviation Turbine Fuel (ATF), namely notifications numbered 03/2022 to 07/2022 and 09/2022 issued by the Ministry of Finance (Department of Revenue) on 30th June 2022, with immediate effect, except for actions already taken or omitted under those notifications.
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• Appellant Entitled to CENVAT Credit Despite Alleged Overvaluation of Soap Noodles; Penalties Overturned.

  Case-Laws - AT : The appellant was denied CENVAT credit on the allegation that the sender units inflated the value of Soap Noodles stock transferred to the appellant, leading to excess credit being taken. The key issues were whether the appellant is entitled to take CENVAT credit of duty paid on inputs u/r 3 of CENVAT Credit Rules, 2004, and the consequent recovery of credit along with interest and penalty. It was held that since the appellant paid duty on the invoices issued by the sender units at 115%/110% of the cost of production as per Rule 8 of Valuation Rules, the appellant is entitled to take CENVAT credit of the duty paid. The Punjab & Haryana High Court in VG. STEEL INDUSTRY VERSUS CCE case observed that even if duty is paid in excess of the finally payable amount, unless the excess is refunded, the assessee can claim CENVAT credit as the department cannot get the duty twice. Since the higher duty paid by the supplier was not challenged by the Revenue and not refunded, the appellant correctly took the CENVAT credit. The CENVAT credit of duty paid on procurement of inputs is admissible and cannot be asked to be reversed. Consequently, no penalty can be imposed. The impugned order was set aside, and the appeal was allowed.
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• Valuation of Clinker Transfers Must Follow Central Excise Rules; Tribunal Remands for Reassessment, Dismisses Penalties.

  Case-Laws - AT : The key legal issues and holdings in this case are: 1. Valuation of clinkers transferred by the appellant to their sister concern should be done u/r 4 read with Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, rather than Rule 8. This follows the Larger Bench judgment in Ispat Industries case and the Tribunal's own decision in Ultratech Cement Ltd. case. 2. The principle of revenue neutrality cannot be considered as an incentive to not follow the statutory valuation rules, solely on the ground that the other unit could avail credit of differential duty payable. Revenue neutrality is not a statutory concept but an equitable principle developed by courts as a mitigating factor in determining intention behind non-payment of duty. 3. The extended period of limitation cannot be applied in cases involving interpretation of statutory valuation principles, in the absence of suppression or misrepresentation of facts by the assessee. The Tribunal set aside the demand for the extended period. 4. The appeals are remanded to the adjudicating authority to redetermine the assessable value applying Rule 4 read with Rule 11, compute differential duty with interest for the normal period, and set aside the penalty, as the issue pertains to interpretation of valuation rules.
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Case Laws:

• GST

• 2024 (12) TMI 64
  Cancellation of registration of petitioner - cancellation order does not refer any reason for cancelling the registration of the petitioner - violation of principles of natural justice - HELD THAT:- The record shows that cancellation order has neither refer any violation of conditions mentioned under Section 29 (2) (a) to (e) of the GST Act nor reason has been mentioned for cancellation of registration of the petitioner. Further in the impugned order neither any reference whatsoever nor any finding was recorded to the effect of the material used against the petitioner nor any finding was recorded that the alleged material used against the petitioner was confronted with. In the absence of any such finding, the appellate order cannot be sustained in the eyes of law. This Court in APPARENT MARKETING PRIVATE LIMITED. VERSUS STATE OF U.P. AND 3 OTHERS [ 2022 (3) TMI 493 - ALLAHABAD HIGH COURT] decided on 5.3.2022 has set aside the impugned order with liberty to the respondent authority to issue a notice in accordance with Section 29 (2) of the Act. The impugned orders dated 31.3.2022, 26.3.2021 and 16.12.2020 are hereby set aside - Petition allowed.

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• 2024 (12) TMI 63
  Challenge to notifications dated 12 January 2017 - HELD THAT:- This Petition is disposed off by directing the concerned adjudicating authorities to dispose of notices issued to the Petitioner s members following the law and on their own merits after considering their contentions based on this Court s order in TATA MOTORS LIMITED VERSUS UNION OF INDIA, THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF INDIRECT TAXES CUSTOMS. [ 2024 (10) TMI 1350 - BOMBAY HIGH COURT] and Hon ble Supreme Court s order in UNION OF INDIA ANR. VERSUS M/S MOHIT MINERALS PVT. LTD. THROUGH DIRECTOR [ 2022 (5) TMI 968 - SUPREME COURT] . The Petition is disposed of.

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• 2024 (12) TMI 62
  Detention and seizure of goods - State E-way Bill was not present at the time of interception - HELD THAT:- It is not a case of the respondent authority that at the time of interception of the goods in question, the Central E-way bill under the GST Act was not available. Only E-way Bill 01 under UP GST Act was not available with the goods in question however before passing of the penalty order, the same was produced. The issue in hand is not res integra - The issue in hand is squarely covers with the judgements of Division Bench of this Court in the cases of M/S GODREJ AND BOYCE MANUFACTURING CO. LTD., L.G. ELECTRONICS INDIA PVT. LTD., BHARTI AIRTEL LIMITED, M/S GUALA CLOSURES (INDIA) PVT. LTD., M/S. RAS POLYTEX PVT. LIMITED, RIMJHIM ISPAT LIMITED, RIMJHIM ISPAT LIMITED, M/S. GAURANG PRODUCTS PVT. LTD., M/S. ADITYA BIRLA FASHION AND RETAIL LTD., M/S. NAVYUG AIRCONDITIONING AND M/S. PROACTIVE PLAST PVT. LTD. VERSUS STATE OF U.P. AND 02 OTHERS AND STATE OF U.P. AND 3 OTHERS [ 2018 (9) TMI 1261 - ALLAHABAD HIGH COURT] and M/S VARUN BEVERAGES LIMITED VERSUS STATE OF U.P. AND 2 OTHERS [ 2021 (10) TMI 429 - ALLAHABAD HIGH COURT] . Further during period from 1.2.2018 to 31.3.2018, the requirement of E-way Bill under UP GST Act read with the Rules framed thereunder was not enforceable. The goods in question was detained and seized on 18.03.2018 on the ground that E-way Bill 01-02 under UP GST Act was not accompanying with the goods. It is not the case of the respondent authorities that Central E-way Bill was not accompanying with the goods in question. Once the said fact is not disputed by the respondent authorities, neither the detention order nor the seizure order nor penalty was justified. The impugned orders dated 18.03.2018 and01.10.2020 cannot be sustained in the eyes of law and same are hereby quashed - Petition allowed.

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• 2024 (12) TMI 61
  Invocation of jurisdiction of the Department u/s 74(1) of the CGST Act, 2017 should not be invoked against the petitioner in respect of the amounts raised in the show cause notices - HELD THAT:- Having heard the learned counsel for the parties and upon perusal of the materials before the Court, at this stage let notice be issued, returnable in 2 weeks - Respondents may complete their instructions and file their counter affidavit in the meantime, if so advised - List on 09/12/2024.

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• 2024 (12) TMI 60
  Application for modification of the order - interest on the delay in payment of the GST amount from the due date of payment till actual realization as per the schedule applicable for delayed payment of GST as provided in the GST Act, 2017 - HELD THAT:- Once the petition has been allowed or dismissed, the order cannot be modified by filing an interlocutory application. This amounts to review of the order passed by this Court. After considering all the facts and circumstances, the Court has granted the relief and if the petitioner is not satisfied with the relief, that cannot be a ground for modification of the order. Application is accordingly dismissed.

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• 2024 (12) TMI 59
  Time limitation - dismissal of appeal on the ground that the delay in filing the appeal is not liable to be condoned under Section 107 (4) of the KGST Act - HELD THAT:- Having regard to the contentions put forth by both the learned counsels, without going into the question as to the correctness or otherwise of the order dated 08.08.2024 (Annexure-A) passed by the Appellate Authority refusing to condone the delay having regard to the order passed in the case of M/s. Sadhana Enviro Engineering Services2, under the peculiar facts and circumstances of the present case, relief sought for by the petitioner is liable to be granted in terms of the orders passed in the case of M/s. Sadhana Enviro Engineering Services2. The order dated 27.03.2024 bearing No. ACCT (Audit)-2/HPT/GST-ADJN/ORDER-2023/24/T for F.Y.2018-19 (Annexure L1) passed by respondent No. 1 is set aside - writ petition is partly allowed.

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• 2024 (12) TMI 58
  Challenge to assessment order - discrepancies between GSTR-01 and GSTR-3B and between the GSTR-2A and GSTR-3B - neither the show cause notices nor the impugned order of assessment have been served by tendering to the petitioner or by registered post, instead it was uploaded in the common portal - principles of natural justice - HELD THAT:- The impugned order is set aside and the petitioner shall deposit 25% of the disputed tax within a period of four (4) weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four (4) weeks from the date of receipt of a copy of this order along with supporting documents/material. If any such objections are filed, the same shall be considered by the respondent and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. The Writ Petition stands disposed of.

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• 2024 (12) TMI 57
  Challenge to Order of Assessment and order passed in the Rectification Application - error apparent on the face of record or not - HELD THAT:- A perusal of the order does not also indicate that there had been no error apparent on the record to reject the rectification. He had only extracted the tables indicating the figures which the petitioner is liable to pay. There is also no reasonings as to why there is no error apparent on the face of the record. For this reason, the impugned order dated 02.02.2024 is liable to be set aside. If pursuant to a Rectification Application, if a rectification is made and if it adversely affects the assessee, Proviso 3 contemplates an opportunity of hearing to be given. However, when an Rectification Application is made at the instance of assessee and the rectification is being sought to be rejected without considering the reasons for rectification or by giving reasons as to why such rectification could not be entertained. It is also imperative that the assessee to be put on notice. The order of rectification passed by the first respondent dated 02.02.2024 is contrary to the provisions of Section 161 and in that aspect, the same alone is set aside and the Rectification Application filed by the petitioner shall be taken afresh by the first respondent and after giving an opportunity to the petitioner, the first respondent shall pass appropriate orders and in accordance with law. Petition allowed.

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• 2024 (12) TMI 56
  Rejection of Petitioner s Appeal and Rectification Application on the ground that the board resolution filed along with the Appeal memo was defective - HELD THAT:- There is no serious defect based upon which the Appeal or the Rectification Application could have been rejected. Similar objections were made by the same officer rejecting about less than hundred matters on the alleged ground of defective resolutions. In DELPHI WORLD MONEY LTD. VERSUS THE UNION OF INDIA, THE COMMISSIONER (APPEALS-II) CGST CENTRAL EXCISE, MUMBAI, COMMISSIONER OF CGST AND CENTRAL EXCISE, RANGE 1, DIVISION III, MUMBAI. [ 2024 (11) TMI 781 - BOMBAY HIGH COURT] , earlier orders are referred and based upon the same order interfered with the orders made by this officer on almost identical grounds. The second Respondent should dispose of the appeal as expeditiously as possible and in any event before 31 January 2025.

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• 2024 (12) TMI 55
  Violation of principles of natural justice - service of SCN - impugned order is challenged on the premise that neither the show cause notices nor the impugned order of assessment have been served by tendering to the petitioner or by registered post, instead it was uploaded in the common portal - HELD THAT:- The impugned order is set aside and the petitioner shall deposit 25% of the disputed tax within a period of four (4) weeks from the date of receipt of a copy of this order. On complying with the above condition, the impugned order of assessment shall be treated as show cause notice and the petitioner shall submit its objections within a period of four (4) weeks from the date of receipt of a copy of this order along with supporting documents/material. If any such objections are filed, the same shall be considered by the respondent and orders shall be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. The Writ Petition stands disposed of.

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• 2024 (12) TMI 54
  Challenge to validity of Section 16 (4) of the Central Goods and Services Tax Act, 2017 - setting aside the Notification dated 31.03.2023 issued by the Ministry of Finance (Department of Revenue), whereby the time limit was extended for passing the orders under Section 73 of the CGST Act - HELD THAT:- The impugned order dated 28.01.2024 passed by the respondent No.4 is set aside. The matter is remitted to the respondent No.4 to decide the matter afresh in accordance with the provisions of Section 16 of the CGST Act, as amended, after providing an opportunity of hearing to the petitioner, within a period of 2(two) months from the date of production of a certified copy of this order. The writ petition stands disposed of.

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• 2024 (12) TMI 53
  Cancellation of GST Registration of the Petitioner - no-filing of returns u/s 39 of the Central Goods and Services Tax Act, 2017 - cancellation of registration without assigning any reason - non-application of mind - violation of principles of natural justice - HELD THAT:- A perusal of the impugned order dated 06.04.2022 would show that the said order is passed by a quasi-judicial authority. The effect of the said order would be that in absence of a registration, the petitioner cannot carry out his business. Therefore, the effect of the said impugned order would entail civil consequences. If this Court peruses the order, it is shocking that the respondent No. 4 had cancelled the registration without assigning any reason. This clearly shows a total non-application of mind. Accordingly, this Court therefore sets aside the said impugned order dated 06.04.2022, thereby restoring the status back to the date on which the Show Cause notice dated 02.02.2022 was issued. The instant writ petition stands disposed of.

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• 2024 (12) TMI 52
  Rejection of appeal preferred by the Petitioner herein against the Order of Adjudicating Authority dated 20th of December, 2023 - rejection on the ground that it was barred by limitation - rectification of the Order passed by the Adjudicating Authority - HELD THAT:- From perusal of the certificate issued by the Executive Engineer, R B, Division Kupwara dated 26th of July, 2024, it transpires that, prima facie, there is some mistake committed by the Executive Engineer concerned in uploading the TDS against the Permanent Account Number (PAN) of the Petitioner. We are not sure as to whether this aspect of the matter, if brought to the notice of the Adjudicating Authority, would ultimately result into rectification of the Order passed by the Adjudicating Authority or not - the Petitioner deserves an opportunity to place this material, including the certificate dated 26th of July, 2024 and other relevant record, before the Adjudicating Authority and seek rectification in terms of Section 161 of the Central Goods and Services Tax Act, 2017. It is deemd appropriate and in the interests of justice to dispose of this Petition by permitting the Petitioner to file a rectification application under Section 161 of the Act of 2017 before the Adjudicating Authority within a period of two weeks from today - petition disposed off.

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• 2024 (12) TMI 51
  Permission to rectify/ amend the GST number of the purchaser in GSTR-1 return with respect to the invoices dated 13.05.2021 (on account of human error) for the quarter ending 30.06.2021 after the limitation period is expired in terms of Section 37 (3) of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The process as submitted by learned counsel for the Revenue is complete in itself and each step precedes the earlier step. If one of the steps is erroneous and the same is not corrected or rectified within the timeline provided under the provisions, a cascading effect would occur to the subsequent process provided under the subsequent provisions. We are satisfied from the aforesaid provisions that if a person submits an erroneous GSTR-1, and does not correct it, the subsequent GSTR-2A and GSTR-3B would also reflect the erroneous information and the consequences thereof shall follow. The time limitation, as provided under Section 37 (1) and 37 (3) of the Act, is linked directly and proportionately to Section 16 (4) of the Act. In terms of the aforesaid provisions, input tax credit can be availed till the due date of furnishing the return under Section 39 of the Act for the month of September following the end of the financial year to which the invoice / debit note pertains or furnishing of the annual return, whichever is earlier. The correction in the corresponding GSTR-1 is permissible in terms of the timeline as specified in Section 16 (4) of the Act. The petitioner could not detect the error of mentioning the point of sale as Mumbai instead of Delhi and the mentioning of the GST number of purchaser of Mumbai instead of GST number of purchaser of Delhi which has resultant, as per his submissions, loss to the concerned purchaser, who could not avail the ITC. Last date of submission for rectification/ omission, admittedly falls on 30.11.2022 for the concerned petitioner. In Bharti Airtel s case [ 2021 (11) TMI 109 - SUPREME COURT] , the Supreme Court was considering the question of similar nature. In the said case, the Bharti Airtel has erroneously deposited cash and submitted that if it was allowed to rectify Form GSTR-3B so as to avail ITC for the relevant period, amount paid by it in cash towards the OTL would get credited to its electronic cash ledger account. After considering the provisions of Section 39 of the Act, which relates to the final return being filed under Form GSTR-3B, it proceeded to set aside the order passed by the Delhi High Court observing the matching and correction process happens on its own as per the mechanism specified in Sections 37 and 38, after which Form GSTR3 is generated for the purposes of submission of returns; and once it is submitted, any changes thereto may have cascading effect. Therefore, the law permits rectification of errors and omissions only at the initial stages of Forms GSTR-1 and GSTR-3, but in the specified manner. It is a different dispensation provided than the one in pre-GST period, which did not have the provision of auto-populated records and entries. As per Section 16 (4) of the Act, a registered person shall not be entitled to take input tax credit after the due date of furnishing of the return under Section 39 of the Act for the month of September following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier. Thus, ITC can be availed till the due date of furnishing of the return. If there is a correction in the corresponding GSTR-1 within the timeline, ITC would be permissible in terms of the timeline specified in Section 64 of the Act, therefore, the petitioner cannot be permitted to rectify the return beyond the statutory time limit prescribed under the GST Act. The claim of the petitioner for correction of the return is rejected. The writ petition is found to be without any force and is accordingly dismissed.

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• 2024 (12) TMI 50
  Seeking grant of anticipatory bail - fraudulent claims of Input Tax Credit (ITC) - creation of fake forms - forging and fabrication of fake bills showing inter se transactions of sales and purchases - HELD THAT:- The allegations are broadly to the effect that the petitioners had availed of Input Tax Credit by raising false bills and showing fictitious transactions effected through dummy firms which were actually not in business. Such allegations, on the face of it would certainly attract offence under IPC for allegedly availing Input Tax Credit fradulently on the basis of false documents and sham transactions. At the same time, since fraud had allegedly been committed with respect to availing Input Tax Credit under provisions of GST, the penal provisions of GST would also attracted. Section 26 of the General Clauses Act, 1897 suggests that there is no absolute bar to try an offender under two different enactments, but the bar is only to the punishment of the offender twice for the offence. The same set of facts, in conceivable cases, can constitute offences under two different laws. An act or an omission can amount to and constitute an offence under the IPC and at the same time, an offence under any other law - This Court however, finds that the said judgments particularly the Supreme Court s judgments have not directly dealt with the issue where act constitutes offence under two enactments particularly in reference to Section 26 of General Clauses Act. However, Hon ble the Supreme Court has specifically dealt with the said issue on several occasions in some other cases. Hon ble Supreme Court in TS BALIAH VERSUS TS RANGACHARI, INCOME-TAX OFFICER, CENTRAL CIRCLE VI, MADRAS [ 1968 (12) TMI 1 - SUPREME COURT] , held that where an act or an omission constitutes an offence under two enactments, the offender may be prosecuted and punished under either or both enactments but shall not be liable to be punished twice for the same offence. In STATE OF RAJASTHAN VERSUS HAT SINGH ORS. [ 2003 (1) TMI 723 - SUPREME COURT] Hon ble Apex Court discussed the doctrine of double jeopardy and section 26 of the General Clauses Act to observe that prosecution under two different Acts is permissible if the ingredients of the provisions are satisfied on the same facts. Admittedly, the petitioners have also been proceeded in a complaint filed against them under Section 132 of CGST Act, which is pending at Ludhiana wherein petitioner-Jatinder Menro remained in custody for 1 year and 8 months and petitioner-Mandeep Singh remained behind bars for about 1 year. It is also not in dispute that the petitioners were not on the run and had associated themselves with the authorities concerned. However, the petitioners now apprehend their arrest on account alleged disclosure statement dated 2.11.2013 by Sammy Dhiman and addition of offences punishable under Sections 465, 467, 468, 471 IPC. It is now pursuant to recording of said disclosure statement that the petitioners came to be nominated as accused in the present FIR on 02.11.2023. Having regard to the position wherein it is prima facie found that the allegations as in the complaint under Section 132 of CGST Act and in the FIR are more or less overlapping and also that the allegations pertaining to raising of false bills for showing false transactions would specifically be covered under offences under CGST and also that the petitioners have remained behind bars for a substantial period in respect of a complaint under Section 132 of CGST Act and neither the petitioners are alleged to been on the run during these five years nor the police had chosen to arrest them ever since lodging of the FIR, this Court is of the opinion that it is a fit case for grant of anticipatory bail to the petitioners. Petition allowed.

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• 2024 (12) TMI 49
  Maintainability of petition - availability of alternative remedy - Challenge to Order-in-Original and Summary of the Order - entitlement to Input Tax Credit [ITC] in respect of purchase of coal - refund of ITC on zero-rated supplies - violation of principles of natural justice - HELD THAT:- It is well settled that ordinarily in revenue matters, the court does not entertain a petition for a writ under Article 226 of the Constitution of India, where the petitioner has a statutory remedy, which without being unduly onerous, provides an adequate and efficacious remedy. The High Court in its writ jurisdiction, does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not act as a court of appeal against a decision of a court or tribunal or an adjudicating authority to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon a statutory remedy provided by the governing statute for obtaining relief. In the case in hand, it is not the case of the petitioner that the petitioner did not receive the Demand cum- Show Cause Notices. On receipt of the Demand cum- Show Cause Notices, the petitioner ought to have replied to the said Demand cum- Show Cause Notices. By issuance of a show cause notice, a noticee is asked to respond to the proposed action. With issuance of a show cause notice, the rights and obligations of the parties are not decided finally - In the case in hand, with the petitioner not availing the opportunity of submitting a reply to the show cause notice after seeking time for four weeks and to submit an effective reply and declining to avail any personal hearing to one Show Cause Notice and by not responding to the other Show Cause Notice, it is not open for the petitioner to raise a ground that it was a case of no notice and no opportunity of hearing. In view of the fact that an adequate, efficacious and statutory remedy has already been provided to assail an order like the Order-in-Original dated 06.09.2024 before the Appellate Authority, this Court is of the view that this writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail statutory remedy of appeal under Section 107 of the CGST/AGST Act, 2017. It is accordingly observed. This Court is of the considered view that while not entertaining the writ petition, the same can be disposed of with the following observations and directions balancing the equities and for the interest of justice as well as having regard to the fact that the bank account[s] of the petitioner has/have remained freezed and unoperational since 02.04.2024, a date prior to issuance of the Demand cum- Show Cause Notice dated 08.04.2024 - the writ petition stands disposed of.

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• 2024 (12) TMI 48
  Maintainability of petition - Availability of statutory remedy under Section 107 of the CGST/AGST Act, 2017 - Challenge to Order-in-Original and Summary of the Order - Input Tax Credit [ITC] in respect of purchase of coal - freezing of the petitioner s bank account - violation of principles of natural justice - HELD THAT:- It is well settled that ordinarily in revenue matters, the court does not entertain a petition for a writ under Article 226 of the Constitution of India, where the petitioner has a statutory remedy, which without being unduly onerous, provides an adequate and efficacious remedy. The High Court in its writ jurisdiction, does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not act as a court of appeal against a decision of a court or tribunal or an adjudicating authority to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by the governing statute for obtaining relief. In the case in hand, it is not the case of the petitioner that the petitioner did not receive the Demand cum- Show Cause Notice. On receipt of the Demand cum- Show Cause Notice, the petitioner ought to have replied to the said Demand cum- Show Cause Notice. By issuance of a show cause notice, a noticee is asked to respond to the proposed action. With issuance of a show cause notice, the rights and obligations of the parties are not decided finally. The event of issuance of a show cause notice is a step towards taking a final decision in the matter by the competent authority. A tentative view taken in the process cannot be deemed to be the final view taken in the matter. It has not emerged that there was total violation of the principles of natural justice in the case in hand. Prima facie the case is not one which falls in the category of no notice and no opportunity of hearing. There is a distinction between a case where there is total violation of the rule of audi alteram partem with no notice and no opportunity of hearing and a case where there is violation of a facet of the rule of audi alteram partem in that the assessee was not afforded with any notice and/or opportunity of hearing. It does not emerge from the facts of the case that the petitioner was not provided with any kind of prior opportunity and hearing before issuance of the impugned Order-in-Original. In view of the fact that an adequate, efficacious and statutory remedy has already been provided to assail an order like the Order-in-Original dated 16.08.2024 before the Appellate Authority, this Court is of the view that this writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail statutory remedy of appeal under Section 107 of the CGST/AGST Act, 2017. It is accordingly observed. This Court is of the considered view that while not entertaining the writ petition, the same can be disposed of subject to fulfilment of conditions imposed - the writ petition stands disposed of.

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• 2024 (12) TMI 47
  Legality of the Order-in-Original and Summary of the Order under the CGST/AGST Act, 2017 - Entitlement of the petitioner to Input Tax Credit (ITC) - refund of ITC on zero-rated supplies - after submission of the reply by the petitioner seeking time, the Adjudicating Authority did not apprise the petitioner about the next date of hearing in connection with the Demand cum- Show Cause Notice under reference - violation of principles of natural justice - HELD THAT:- It does not emerge from the facts of the case that the petitioner was not provided with any kind of prior opportunity and hearing before issuance of the impugned Order-in-Original. In the case in hand, it is not the case of the petitioner that the petitioner did not receive the Demand cum- Show Cause Notice. On receipt of the Demand cum- Show Cause Notice, the petitioner ought to have replied to the said Demand cum- Show Cause Notice. By issuance of a show cause notice, a noticee is asked to respond to the proposed action. With issuance of a show cause notice, the rights and obligations of the parties are not decided finally - A tentative view taken in the process cannot be deemed to be the final view taken in the matter. The final view is dependent on the response received from the noticee and if the noticee is able to show sufficient cause as to why no action as contemplated under the show cause notice should be taken the final view may altogether be different. In the case in hand, with the petitioner did not avail the opportunity of submitting an effective reply to the show cause notice after seeking time for four weeks and declined to avail any personal hearing. In such scenario, it is not open for the petitioner to raise a ground that it was a case of no notice and no opportunity of hearing. In view of the fact that an adequate, efficacious and statutory remedy has already been provided to assail an order like the Order-in-Original dated 08.04.2024 before the Appellate Authority, this Court is of the view that this writ petition preferred under Article 226 of the Constitution of India is not to be entertained at this stage, reserving the liberty to the petitioner to avail statutory remedy of appeal under Section 107 of the CGST/AGST Act, 2017. It is accordingly observed. The writ petition stands disposed of.

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• 2024 (12) TMI 46
  Condonation of delay in filing the appeal - Cancellation of registration of the petitioner - appeal against the cancellation of GST registration was filed within the prescribed limitation period - HELD THAT:- It is not in dispute that after service of the impugned order dated 04.03.2023, the appeal should have been preferred within limitation, but the appeal has been preferred beyond the limitation - Further, before this Court also, petitioner has failed to give any good ground for condonation of delay, therefore, this Court, under extra ordinary jurisdiction, cannot interfere with the impugned orders. The Apex Court in the case of Singh Enterprises Vs. Commissioner of C. Ex., Jamshedpur [ 2007 (12) TMI 11 - SUPREME COURT ], has specifically held there is complete exclusion of Section 5 of the Limitation Act. The Commissioner and the High Court were therefore justified in holding that there was no power to condone the delay after the expiry of 30 days period. In the subsequent decision in Mafatlal Industries Ltd. Ors. vs. Union of India Ors. [ 1996 (12) TMI 50 - SUPREME COURT] , this Court went on to observe that an Act cannot bar and curtail remedy under Article 226 or 32 of the Constitution. The Court, however, added a word of caution and expounded that the constitutional Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise its jurisdiction consistent with the provisions of the enactment. To put it differently, the fact that the High Court has wide jurisdiction under Article 226 of the Constitution, does not mean that it can disregard the substantive provisions of a statute and pass orders which can be settled only through a mechanism prescribed by the statute. Thus, no interference is called for in the impugned orders - petition dismissed.

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• 2024 (12) TMI 45
  Seeking reimbursement of extra GST amount paid - grievance of the petitioner is that despite the enhancement from 01.01.2022, the respondents are paying the running bills with 12% GST and the petitioner is paying 18% GST - HELD THAT:- Respondents No. 2 3 filed a return raising baseless objection regarding maintainability of writ petition, and availability of alternative remedy under the Arbitration Act - Needless to say that no disputed question of facts are involved in this case, therefore, the petitioner cannot be relegated to the Dispute Resolution Form as provided under the agreement. Respondent No.4 which is a State GST Department, according to which also the rate of GST has been enhanced from 12% to 18% and same is liable to be paid by respondent No. 2 which is a Government Entity. The respondent No. 2 is directed to pay the difference of GST amount to the petitioner @ 6% from 01.01.2022 to 30.09.2022 with a period of three months from the date of receipt of certified copy of this order, failing which the petitioner shall be entitled for interest @ 6% per annum from the date of entitlement - petition disposed off.

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• Income Tax

• 2024 (12) TMI 72
  Foreign Tax Credit (FTC) denied - Form No. 67 was filed belatedly - exparte assessment order challanged - HELD THAT:- Since the appeal against exparte assessment order is still pending before NAFC. Without expressing anything on merits of the case, the present appellate order passed by CIT[A] is hereby set-aside with a direction to decide the same along with the other appeal within a period of four months.

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• 2024 (12) TMI 71
  Disallowance of carried forward loss and unabsorbed depreciation u/s 72AB due to merger - HELD THAT:- We note that after taking into account the factual aspect of assessee s case under consideration, we note that the assessee has fulfilled the conditions mentioned u/s 72AB of the Act and hence, the assessee is eligible to claim set-off of accumulated loss and un-absorbed depreciation. AO has erred in interpreting the provisions to the effect that the claim could be made only after completion of the mandatory period referred to in sub section (2) of Section 72AB of the Act. The AO is therefore, directed to allow the claim of set off of carry forward losses and unabsorbed depreciation allowance of the predecessor entity in the hands of the appellant to the extent it is allowable in the hands of the predecessor entity as per records, in accordance with the provisions of Section 72BA of the Act. Decided in favour of assessee. Disallowance u/s 36(1)(viia) as assessee not having any rural branches and thus no rural advances - HELD THAT:- As decided in [ 2022 (12) TMI 1544 - ITAT RAJKOT] in assessee s case, wherein the Tribunal passed order to allow assessee s claim under section 36(1) (viia), what is to be seen by Assessing Officer is as to whether provision for bad and doubtful debts is created, irrespective of whether it is in respect of rural or non-rural advances by debiting profit and loss account and, to extent provision for doubtful debts so created, assessee is entitled for deduction subject to upper limit of deduction laid down in said section. In the case of Kodungallur Town Co-op Bank Ltd. [ 2016 (7) TMI 1413 - ITAT COCHIN] a Cooperative Bank is entitled to claim deduction of bad debts provided in first part of clause (viia) (a) of section 36(1) being 7.5 per cent of total income and same cannot be denied linking it to rural advances. Appeal of the Revenue is dismissed.

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• 2024 (12) TMI 70
  Denial of Exemption u/s 11 - non-filing of audit report in Form 10B along with return of income - form No. 10B was filed by after the filling of return of income - HELD THAT:- Admittedly, in the instant case the audit report in Form 10B was filed by the assessee through e-portal on 26.12.2020. Hence the audit report in Form 10B was filed prior to one month of the due date for furnishing the return of income under sub-section (1) of section 139 of the IT Act i.e. 15th February, 2021 in the instant case. Although the assessee failed to reflect the fact of filing audit report in its return of income, we are of the considered opinion that this being a technical error inadvertently committed by the assessee needs to be pardoned. Since the audit report in Form 10B was furnished by the assessee prior to one month of the due date for furnishing the return of income, therefore, the compliance of section 12(1)(b)(ii) r.w.s. 44AB, Explanation (ii) was very well made by the assessee and accordingly the order passed by Addl./JCIT(A)-1, Jaipur in our opinion is not justified. Accordingly, we set-aside the order passed by Ld. Addl./JCIT(A)- 1, Jaipur and allow the claim of exemption u/s 11 12 by the assessee in the light of the fact discussed in foregoing paragraphs that audit report for the period under consideration in Form 10B was filed prior to one month of the extended due date of filing return of income. Thus, the grounds of appeal raised by the assessee are allowed.

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• 2024 (12) TMI 69
  Reopening of assessment - undeclared sale consideration/capital gain - AO specifically mentions that the income is likely to be escaped is more than Rs. 50 lakhs and is represented in the form of asset - HELD THAT:- The assessee had merely sold immovable property amounting to Rs. 43 lakhs and, in fact, had invested this amount in purchase of another property of Rs. 90 lakhs leading to an addition of Rs. 47 lakhs. In this context, we have also examined the order under clause (d) of section 148 dated 29.03.2022 and we find that on the basis of sale of immovable properties worth Rs. 1,33,00,000/-, the assessee was show caused for the purpose of section 147 of the Act and, accordingly, the notice u/s 148 dated 29.03.2022 was issued. While in notice u/s 148A(b), AO had relied information of sale of immovable property worth 43lacs, received, from Sub-registrar and the TDS return filed u/s 194IA of the Act, was also considered to be sale of immovable property, while it was, in regard to TDS deduced as purchaser. Thus it was not a case of capital gain of Rs 1,33,00,000/- escaping assessment, as alleged in notice under clause (b) of section 148A of the Act. It is no doubt a case of mechanical reopening, as the AO, did not even bother to differentiate, on the two different information heads independently, and cumulatively considered to be escapement of capital gains of more than Rs. 50, lacks. The contention of Ld. DR that only prima facie case has to be seen at time of reopening is not sustainable it the light of mandate of new regime with regard to reopening of assessment beyond three years. Appeal of the assessee is allowed.

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• 2024 (12) TMI 68
  Levy of fee u/s 234E - Interest u/s 220(2) on default amount also been imposed - assessee submits that the provisions of sec 200A(1)(c)(d)(f) have come into force by Finance Act, 2015 only with effect from 01.06.2015 and there was no authority or competence or jurisdiction in respect of the assessment of the earlier period - HELD THAT:- As relying on SHRI BHASKAR ROY [ 2021 (12) TMI 784 - ITAT KOLKATA] we are inclined to hold that the demand raised by the Income-tax Authorities for levying late fee u/s. 234E of the Act for the period prior to 1-6-2015 cannot be sustained and we order accordingly. Decided in favour of assessee.

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• 2024 (12) TMI 67
  Addition u/s 50C - difference between sale consideration and stamp duty value - Difference was marginally very low i.e. only 2.7% of the sale consideration - HELD THAT:- Addition was unwarranted. Since this argument aligns with the judicial principles emphasising that minor deviation does not necessarily reflect an attempt to evade taxes, particularly when the variation is below a threshold limit of 5%. We in this respect rely on the decision of Shaista Irphan Mogul 2021 (8) TMI 270 - ITAT MUMBAI] . Accordingly, the addition made u/s 50C is deleted and Ground of the assessee is allowed. Allowability of deduction u/s 54F - Assessee claimed that two flats were constituted a single unit based on architectural plans and interior design - In this regard, architectural certificate was also furnished before the Bench. It is also acknowledged that the assessee has made substantive investment within the prescribed period by depositing in CGAS account, hence, we deem it necessary to allow the instant issue in favour of the assessee considering the judgment of Devdas Naik [ 2014 (7) TMI 173 - BOMBAY HIGH COURT] and accordingly, we direct the AO to delete the impugned addition. Appeal of the assessee is allowed.

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• 2024 (12) TMI 66
  Validity of assessment completed u/s 153A - No valid and lawful approval u/s.153D - assessee agued statutory approval given to the Assessing Officer for the assessment orders was not based on application of mind - approval was given by Addl. CIT in a mechanical manner within a short period of time during which it was humanly impossible for the Addl. CIT to go through exhaustive assessment records, search seizure materials and to thereafter give approval after due application of mind - HELD THAT:- We are of the view that the issue in dispute is squarely covered by the order Subodh Agarwal [ 2023 (2) TMI 1072 - ALLAHABAD HIGH COURT] order of Serajuddin Co. [ 2023 (3) TMI 785 - ORISSA HIGH COURT] and Shiv Kumar Nayyar [ 2024 (6) TMI 29 - DELHI HIGH COURT] in favour of the assessee. Further the issue in dispute is also squarely covered in favour of the assessee by the orders of Khoday Ehshwarsa and Sons [ 2024 (9) TMI 1660 - ITAT BANGALORE] . and in the case of Sanjay Duggal and Others [ 2021 (1) TMI 909 - ITAT DELHI] and in the case of Quality Structure Pvt. Ltd.[ 2024 (9) TMI 1661 - ITAT LUCKNOW] In view of the foregoing, we set aside the impugned appellate orders of learned CIT(A) deserve to be set aside; and the assessment orders passed by the Assessing Officer deserve to be annulled. Additions made in absence of incriminating material - Following the order of Hon ble Supreme Court in the case of Pr. CIT vs. Abhisar Buildwell (P) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT] no additions could be made in the assessment orders passed by the AO in the aforesaid assessment orders. Accordingly, the additions made in the aforesaid assessment orders deserve to be deleted.

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• 2024 (12) TMI 44
  Assessment u/s 153C - AO s assumption of jurisdiction u/s 153C - HELD THAT:- A predecessor Bench of this Court in CIT v. Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] held that if no incriminating material is found during the course of the search in respect of an issue, then no addition in respect of such an issue can be made in the assessment under Sections 153A and 153C of the Act.

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• 2024 (12) TMI 43
  Revision u/s 263 - provision made for depreciation on investment and the assessee had added back only relating to investments in India and excluded investments outside India - HELD THAT:- The tribunal by placing reliance on the order passed by it in the case of assessee for Assessment Year 1996-97 and 1997-98 inter alia held that the revenue as well as assessee are bound by the decision rendered by the tribunal and therefore, in the light of decision rendered by tribunal, the Commissioner of Income Tax committed an error in holding that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the revenue. Accordingly, the order passed by the Commissioner of Income Tax was set aside. The Supreme Court in G.M. Mittal Stainless Steel (P.) Ltd. [ 2002 (12) TMI 13 - SUPREME COURT ] has held that power under Section 263 of the Act has to be exercised on the basis of the material, which was available at the time when the Commissioner of Income Tax passed an order, the order passed by the tribunal was operative and therefore, the Assessing Officer s order could not have been termed as erroneous. Merely because the order of the Assessing Officer was passed relying which was subsequently reversed by this court cannot justify the order passed by the Commissioner of Income Tax under Section 263 of the Act. Decided in favour of the assessee.

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• 2024 (12) TMI 42
  Validity of reopening of assessment - deduction u/s 54B was wrongly claimed for the agricultural land sold by the brothers of the petitioner - objection filed by petitioner were rejected - HELD THAT:- It is a settled law that inspite of amendment made in the year 1998 u/s 147 of the Act, the reassessment proceedings cannot be initiated on change of opinion. For concluding that AO had applied mind to an issue not only assessment order is relevant but it can also be determined from record. It is for AO to determine how to frame an order. The issue accepted may not be even discussed in the order and assessee is not responsible for this. Non recording of reasons by the AO in assessment order for accepting the explanation on an issue shall not make a foundation for reassessment on same issue as AO had already dealt with it and formed an opinion. The issue of deduction u/s 54B was raised and discussed in the assessment proceedings. The explanation of petitioner on the issue was accepted and deduction u/s 54-B of the Act was allowed. It is inferred that AO formed an opinion albeit, not recorded the reasons for it. The notice issued u/s 148 for assessment year 2009-2010 and order rejecting the objections are quashed. WP allowed.

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• 2024 (12) TMI 41
  Unexplained money u/s. 69A - cash deposited in bank account of the appellant - HELD THAT:- As decided in SMT. PK NOORJAHAN [ 1997 (1) TMI 6 - SUPREME COURT] deliberating on the term may used in Section 69 said Income-tax Officer is not obliged to treat the source of investment as income in every case where the explanation offered by the assessee is found to be not satisfactory. It was further observed that the question as to whether the source of the investment should be treated as income or not u/s. 69 of the Act has to be considered in the light of the facts of each case. Discretion has been conferred on the Income-tax Officer u/s. 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case. As the assessee in the present case had failed to come forth with any plausible explanation both before the A.O/CIT(Appeals) as regards the source of the cash deposits in his bank account, therefore, we principally concur with the view taken by them. But it would be incorrect to not consider the fact that the assessee being a 44 years old commerce graduate would have some amount of cash in hand out of his past savings/current years income in his possession, viz. (i) private job with New Creative Fibre; (ii) wholesale business in the name of Suman Combines ; and (iii) past accumulated savings as on the date of making the cash deposits in his bank account. We firm conviction that an amount can safely be held that he would have been in possession of the assessee at the time of depositing of cash in his bank account during the year under consideration. Accordingly,we scale down the addition made by the A.O to Rs. 17.91 lacs [Rs.19.71 lacs (-) Rs. 2 lacs]. Assessee appeal partly allowed.

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• 2024 (12) TMI 40
  Addition u/s 68 - unexplained cash credits in bank account - HELD THAT:-Assessee is engaged in the business of textile and grey and is filing return of income for many years. The cash sales in the business of assessee, is a usual practice. Thus, considering the overall facts and circumstances of the case, entire cash deposit during demonetization period cannot be treated as unexplained credit, for a businessman having turnover of more than Rs. 1.00 crore. Considering the fact that the assessee is not able to substantiate the source of entire cash deposit, similarly entire cash deposit cannot be treated as income. Therefore, a reasonable addition out of total cash deposit will be sufficient to avoid the possibility of revenue leakage. Thus, considering the facts of the present case, 20% of total cash deposit are upheld and remaining addition is deleted. So far as taxing the addition is concerned, the cash deposit is out of business receipt, therefore, it cannot be taxed u/s 115BBE. AO is directed to tax the sustained addition at normal rate of tax. In the result, ground No. 1 of the appeal is partly allowed. Addition of sundry creditors - no supporting evidence like copy of bills, Ledger account and proof of subsequent payment is filed - CIT(A) confirmed the action of AO - HELD THAT:- On considering the submission and perusal of supporting evidence in the form of account confirmation and sample purchase bill, find that neither the AO nor the ld. CIT(A) verified such bills and account confirmation or made any independent investigation of such evidences. Moreover, all the purchase bills are in respect of yarn. Complete details of creditors are available on sales invoices/purchase bills. Thus, no justification of making such addition. AO is directed to delete the addition. In the result, ground No. 2 of appeal is allowed. Ad hoc disallowances of 10% of expenses - assessee submits that the assessee has offered income u/s 44AD, thus, there is no scope of further addition - HELD THAT:- CIT(A) confirmed the action of AO with similar view. Before me, the ld. AR of the assessee vehemently argued that the assessee has offered income under Section 44AD. On perusal of Profit Loss Account and computation of total income, we do not find any such reference in offering income u/s 44AD, thus, no merit in the submission of assessee. Considering the nature of expenses and the ratio of ad hoc disallowance being 10% only which is on reasonable basis. Thus, no reason to interfere in the findings of lower authorities. In the ground No. 3 of appeal is dismissed.

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• 2024 (12) TMI 39
  Addition in respect to loan obtained u/s 68 or under section 69A - HELD THAT:- Assessee, vide submission had submitted before the Assessing Officer, a detailed reply along with documents wherein confirmation in respect of loan taken from M/s. Abhilasha Shoppers Pvt. Ltd. for the period from 01/04/2012 to 31/03/2015 were submitted. It is clear that the loan creditor is assessed to income tax and its address and PAN details are matter of record. The financial statements of M/s.Abhilasha Shoppers Pvt. Ltd., were also submitted. The amount received and payable by the assessee as on 31/03/2013, is verifiable from the financial statements of the lender. The TDS certificate also placed - assessee has discharged its onus to explain the credit by adducing proper legal evidence. The amount has been repaid through proper banking channel and same is verifiable from the bank statement of the assessee. The statements of various persons reproduced in assessment order are not with reference to the verification of loan transaction of the assessee. They are general statements recorded by Investigation Wing of Kolkata, which are reproduced in the assessment order and are not in respect to any enquiry of loan in the case of the assessee. Confirmed copy of ledger evidencing repayment to lender is furnished. The legal evidence placed on record to explain loan credit does not get discredited by general statements. Addition u/s 68 - In the present case also, the loan amount has been repaid through proper banking channel along with interest. On the above factual position, there remains no scope to make addition under section 68. Consequently, respectfully following the decision of M/s. Vibrant Global Capital Ltd [ 2024 (11) TMI 312 - ITAT NAGPUR] and detailed legal position discussed therein, we are of the considered opinion that the addition made in the present case of the assessee u/s 68 of the Act is unjustified and unsustainable on facts and in law. In assessee s case, the confirmation and financial statement of lender have been placed on record. The assessee has reasonably discharged his onus to explain the credit by adducing legal evidence on record. Accordingly, we set aside the impugned order passed by the learned CIT(A) and the Assessing Officer on this issue and the addition made u/s 68 is hereby directed to be deleted. Thus, the grounds raised by the assessee are allowed. Addition being interest paid to M/s. Abhilasha Shoppers Pvt. Ltd. - The interest paid by the assessee is through proper banking channel. The TDS was deducted and was deposited in the account of the Government. The genuineness of loan transaction is held by us to have been established and we have ordered deletion of the addition of Rs. 50 lakh. The loan obtained has been utilized for the purpose of business. The interest paid to the very same party during subsequent assessment year has been allowed. Accordingly, the addition made by the AO by disallowing interest paid is held to be unjustified.

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• 2024 (12) TMI 38
  Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Where assessee s own funds and other non-interest bearing funds were more than the investment in tax free securities no disallowance u/s 14A can be made. See Cyquator Media Services Pvt. Ltd. vs DCIT [ 2023 (7) TMI 855 - ITAT MUMBAI] . Appeal of the assessee is allowed.

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• 2024 (12) TMI 37
  Validity of reopening u/s. 147 - issuance of notice u/s. 148 beyond the period of four years - addition towards share application money u/s. 68 - HELD THAT:- From the perusal of the aforesaid list of companies and the companies from whom assessee had received share application money, it can be seen that nowhere these companies have been mentioned by Shri Pravin Jain that any of the 6 entities were managed and controlled by him. Thus, the very premise of the ld. AO while recording the reasons is based on wrong assumption of facts. It is a very well settled law that ld. AO has acquired jurisdiction based on valid reasons and material and information referred to in the reasons recorded should have live link nexus with the income escaping assessment. If there is no such material and information relevant to the assessee, then ld. AO cannot reopen the case based on incorrect assumption of facts recorded and the reasons recorded. Reasons recorded by the AO do not clothe the him with the jurisdiction to reopen the assessment u/s 147 for the second time and accordingly, the reason recorded as well as the notice issued u/s. 148 is invalid and accordingly, same is quashed. Thus, the entire re-assessment order is quashed. Appeal of the assessee is allowed on jurisdictional issue.

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• 2024 (12) TMI 36
  Reopening of assessment u/s 147 - Notice beyond period of four years - assessee was beneficiary of accommodation entries from the account maintained in HDFC Bank - HELD THAT:- The reopening was made u/s 147 of the Act by issuing notice u/s 148 after the AO received information from DDIT(Inv), Unit-4(1), Kolkata. Therefore, the reopening can only be made subject to the satisfaction of the conditions as provided in first proviso to section 147 which state that where the assessment has been framed u/s 143(3) reopening after a period of four years can only be made if the escapement of income is attributed to the failure on the part of assessee to disclose material facts either in the return of income or during the course of assessment proceedings. This is not the facts in the present case. We note that the assessee has fully disclosed all the facts in the return of income filed u/s 139(1) of the Act and the case was also selected for scrutiny and assessment was framed vide order dated 22.12.2017 passed u/s 143(3). Therefore, non-mentioning on the part of the AO that the reopening beyond four years is made u/s 147 because of the failure on the part of the assessee to disclose fully and truly all the material facts which is necessary for assessment renders the re-assessment proceedings nullity. Reopening of assessment has been made by the AO without recording a concrete and clear-cut findings about the failure of the assessee is bad in law and cannot be sustained. The case of the assessee finds support from the decision of CEAT Ltd. [ 2023 (1) TMI 73 - SC ORDER ] wherein held that re-opening u/s 147 of the Act beyond 4 years from the end of the relevant assessment year can only be made if the AO has recorded a finding in the reasons that the escapement is attributable to the failure of the assessee to fully and truly the material facts qua the impugned income and not otherwise - Appeal of the assessee is allowed.

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• 2024 (12) TMI 35
  TDS u/s 195 - Deduction of TDS from the payments made to foreign associated enterprise/group companies - HELD THAT:- As relying on assessee s own case in [ 2024 (8) TMI 928 - ITAT DELHI] we hold that since the remittance made by HCLT to the foreign subsidiary/ AEs are held to be not taxable in India in the hands of the recipient company in India, there would be no obligation for the payer i.e. assessee company, to deduct tax at source u/s 195 of the Act. This proposition is already settled by the Hon ble Supreme Court in the case of GE India Technology India Ltd. [ 2010 (9) TMI 7 - SUPREME COURT] No infirmity in the order of the ld CIT(A). Accordingly, the addition u/s 201(1) and interest u/s 201(1A) of the Act on the assessee is hereby deleted and the grounds raised by the revenue are dismissed.

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• 2024 (12) TMI 34
  Disallowance u/s 37 - Allowability of business expenses - CIT(A) deleted addition - HELD THAT:- Section 37 of the Act provides that any expenditure not being in the nature of capital expenditure or personal expenses of the assessee laid out or expanded wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head Profits and gains of business or profession . The assessee wholly and exclusively claims that the entire expenses have been incurred for the business purposes. The assessee company has paid tax at MAT rate and there is no tax evasion. The Ld CIT(A) has examined this issue in correct prospective and rightly deleted the additions towards disallowances of business, expenditure u/s 37 of the Act made by the AO. Reasonings and findings of the Ld CIT(A), while granting relief is on proper appreciation of law expounded by the judicial dicta. We do not find any reasons to interfere with the findings of the Ld CIT(A). The appeal of the revenue is liable to be dismissed.

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• 2024 (12) TMI 33
  Estimation of gross agricultural income - calculating the net agriculture income @ 30% of gross income and thus making the addition of the balance amount as unexplained income - HELD THAT:- AO computed the income from paddy at Rs. 9,600/- per acre whereas income from wheat at Rs. 3,600/- per acre. After applying the rate of 30% the net income was estimated at 3,960/- in FY 1999-2000. In our opinion, the said calculation of AO was not based on any scientific formula or facts on record. Therefore, in our opinion, it would be reasonable and fair estimation of net agricultural income if both net profit rate of 45% is applied and 55% is treated as agricultural expenses. The total agricultural income in respect of 33.75 acre of land would be 5940 x 33.75 = 2,00,475/-. Considering the above facts and circumstances, we are inclined to set aside the order of Ld. CIT(A) and direct the AO to make delete the addition to the extent of Rs. 66,825/- and addition to the tune of Rs. 15,525/- is sustained. The appeal is partly allowed. Addition in respect of income in the name of Smt. Veena Mishra/wife of assessee - protective addition made in the assessee s hand - as observed that she was a house wife and did not have any independent sources of income and investment and therefore in his opinion, the income of Smt. Veena Mishra was belonging to Dr. Jagannath Mishra so the income was assessed in the hands of assessee whereas the same was added protectively in the hands of Smt. Veena Mishra - HELD THAT:- Smt. Veena Mishra is an independently assessed to income tax and wealth tax. Besides we also note that the assessee Smt. Veena Mishra is also co-owner of the land and land measuring 4.72 acres belonged to Smt. Veena Mishra out of total family holding of 60 acres. AO has made the addition in the hands of the assessee only on the basis of presumptions and assumptions without any substantive basis and also without bringing any evidences on record to the contrary to justify the inclusion of the assessee s income in the husband s hand. Therefore, we are not in agreement with the conclusion drawn by the Ld. CIT(A) as the same is based upon in correction assumption and appreciation of facts and accordingly can not be sustained. We would like to mention that this income is to be assessed in the hands of Smt. Veena Mishra. Therefore the addition made, is accordingly, directed to be deleted by setting aside the order of CIT(A). The ground is allowed.

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• 2024 (12) TMI 32
  Penalty proceedings u/s. 270A - Denial of Exemption u/s. 54F - assessee had shown income from house property from two properties, thus, he inferred that once the assessee owns two residential properties and the income of both the properties have been offered by the assessee in the return - HELD THAT:- In this case it is neither a case of misrepresentation or suppression of fact because assessee has duly placed all the facts before the AO as well as in the return of income. Other clauses from b to f are also not applicable to show that it is a case of misreporting of income. If ld. AO is levying the penalty by invoking Section 270A (9), then it is incumbent upon the AO to specify under which limb of Section 270A (9) he is initiating or is levying the penalty for misreporting of income. Penalty u/s 270 A is not automatic or adjunct to any addition made by the AO. Misreporting has to be established and onus is on the AO to give finding as how it amounts to misreporting under the clauses of sub section (9) of section 270A. As assessee had duly stated all the facts and stated that he was under a bonafide belief that the only property which he has purchased in his name (alongwith his father) on transfer of capital asset was the only property which was owned by him, and therefore on purchasing this property he can claim exemption u/s 54F. The other property which was bequeathed to him after demise of his mother and came as inheritance belonged to his mother and not him. On such bonafide belief and when this fact has been duly stated and reported, then where is the question of misrepresentation or suppression of fact. At best it is an inference of AO on interpretation of statute and not something he has found out any suppression of facts on his own or by any inquiry. Appeal of the assessee is allowed.

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• 2024 (12) TMI 31
  Revision u/s 263 - as per CIT assessee was one of the beneficiary in the scam of NSEL through its brokers in which case the ld. AO is said to have not made proper inquiry with respect to the impugned commodity transactions - assessee has entered into bogus commodity trading on NSEL by Client Code Modification (CCM) for which the AO has reopened the assessment but has not verified the information available in the Insight Portal/Investigation wing, thereby the information received has been unverified and unexplained which holds the assessment order to be erroneous in so far as it is prejudicial to the interest of the revenue HELD THAT:- AO has not verified the CCM data related to the assessee neither from the assessee nor from its brokers pertaining to the transactions made in July, 2013 which is when the assessee has booked loss in respect of investment made. The ld. AO has also not made any inquiry as to whether the assessee was involved in regular trading in the earlier occasion. It is also observed that the ld. AO has not looked into the fact whether the assessee has raised any complaint against the scam carried out by NSEL which the assessee claims to be the reason for the loss. AO has not inquired into the issue for which the reopening of assessment was initiated and has merely accepted the returned loss filed by the assessee without substantiating as to why he has arrived at the said conclusion. The assessee was also unable to explain whether it had filed the complete details along with the documentary evidence to establish the fact that it had not entered into any bogus trade transaction and whether or not it was one of the beneficiary to the NSEL scam. The assessment order is silent in respect of all these issues and more precisely the issue for which the reassessment was initiated. In the absence of the same, we find no infirmity in the order of the ld. PCIT in holding the assessment order to be erroneous in so far as it is prejudicial to the interest of the revenue. It is a case were the ld. AO has not dealt with or inquired into the issue which was the subject matter of the reassessment. We therefore are inclined to dismiss the grounds of appeal raised by the assessee and hereby uphold the order of the ld. PCIT. Decided against assessee.

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• 2024 (12) TMI 30
  Levy of interest u/s 201(1A) - late deduction of tax at source on salaries paid to floating staff members - bonafied reasons in deducting lower tax in the earlier months of financial year - as per AO the assessee has not followed the approach envisaged in sub-section (1) of section 192 of the Income Tax Act which mandates an employer to estimate salary income of the employee for the entire year and deduct monthly TDS on prorate basis HELD THAT:- If there are bonafide reasons in deducting a lower tax in earlier months of financial year and the same is made get immediately after noticing such shortfall, then in the eventuality section 192 sub-section (3) would save the employer from the liability of making payment of interest. Thus, to meet such eventualities sub-section (3) provides for adjustment of excess or deficiency arising out of the any previous months or failure to deduct in the financial year. Any other interpretation would render Sec. 192(3) nugatory and an employer would be put to undue burden of payment of interest for no fault of him. From this analysis, it is apparent that on mere short deduction of tax at source from the salaries paid to the employees, Sec. 201(1A) cannot be invoked, unless the total tax deducted by the end of the year is less than the tax deductable from the salary paid to the employee in that year. Since, in the instance case the assessee has reasonably estimated the income and in view of the above circumstances there was a short deduction of tax at the beginning of financial year which is adjusted in the later months. Therefore in our considered view interest is not chargeable for mere short deduction in the initial months. Thus these grounds raised by the assessee are allowed. Confirming the levy of interest u/s 220 sub-clause (2) of the Act - After having gone through the provisions of Sec. 220 subclause (2) of the Act, we are of the considered view that the same is applicable only where the amounts specified in the notice of demand issued u/s 156 of the Act is not paid within the stipulated period. But in the present case the provisions of Sec. 220 sub-clause (2) of the Act are not applicable as no order or notice of demand was ever issued in respect of the aforesaid assessment year. Therefore, the assessee would not have any liability with regard to levy of interest u/s 220(2) of the Act and therefore the levy of interest u/s 220(2) of the Act stands deleted and this ground raised by the assessee stands allowed.

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• 2024 (12) TMI 29
  Transfer pricing adjustment - UDS and CM are two distinct segments and cannot be combined for any TP adjustments and further that its overseas AEs being least complex are to be taken as its tested parties - TPO treated the UDS and CM as one composite segments and also proceeded to reject overseas AEs of assessee as tested parties and replace them with domestic entities to benchmark assessee international transactions. HELD THAT:- Action of revenue in combining the UDS and CM sector as one integral activities for determination of ALP we find sufficient force in the arguments of lower authorities. Absence of separate manufacturing facilities, prior contracts for purchase of vehicles, disproportionate allocation of expenses etc goes on to allude that the arguments of the two being separate activities cannot be taken. On its part the assessee has not been able to convincingly place on records any evidences in support of its claims. Consequently, we are inclined to concur with the findings of the Ld. TPO duly supported by DRP. The order of Ld. DRP is therefore sustained. Accordingly, the ground by the assessee towards rejection of segmentation of UDS and CM segment is dismissed. Rejection of overseas AEs as tested parties - TPO is directed to rea-judicate the matter afresh on merits and in accordance with law after obtaining all necessary details required for his TP study, and after giving due opportunities of being heard to the assessee.TPO shall pass a speaking order on the subject. The assessee is directed to comply with all the notices issued by the revenue on this subject matter. Accordingly, the ground of appeal no.6 raised by the assessee qua rejection of overseas AEs is allowed for statistical purposes only. Upward adjustments towards brand development fees done by the Ld. TPO - As noted that the Hon ble coordinate Benches of this tribunal in the case of M/s. Nippon paint India Pvt Ltd [ 2017 (3) TMI 1162 - ITAT CHENNAI] Hyundai Motor India Pvt Ltd [ 2017 (4) TMI 1193 - ITAT CHENNAI] and others including assessee s own case for 2007-08 [ 2013 (6) TMI 458 - ITAT CHENNAI] have held that AMP spending s are not international transactions and deleted the impugned additions in respective cases. It has accordingly been concluded in decision in assessee s own case for 2007-08 Supra that any addition on this account would be unjustified. No change in facts qua those of AY-2007-08 has been brought to our notice. Accordingly in respectful compliance to the decision of the coordinate bench of this tribunal in assessee s own case for 2007-08, we set aside the order of lower authorities and direct the Ld. AO to delete the impugned addition. Accordingly ground of appeal no.8 is allowed. Selection of comparable companies for business processing service segment - Infosys Technologies Ltd, cannot be compared with the respondent assessee in [ 2015 (4) TMI 949 - DELHI HIGH COURT] as seen from the financial data and it should be excluded from the list of comparables for the reason that it was a giant Company in the area of development of software . M/s HSCC India Ltd we find sufficient force in the argument that the company is bereft of any meritorious comparable given the same being a government company as well as one engaged in a totally different line of business. Accordingly we are of the view that the requested two companies cannot be included in the TP study by the TPO. We therefore deem it fit to restore the matter to the file of the Ld. TPO for recalculation of his adjustments after excluding M/s.Infosys BPO Ltd M/s HSCC India Ltd from his TP study. Advances received from customers towards extended warranty - HELD THAT:- As per terms of contract, the extended warranty contract comes to force only after the completion of base warranty agreement. Naturally the extended warranty receipts taken during the year of sales would become income of the assessee, if any in the year when such warranty agreements becomes enforceable. At this stage it is also pertinent to point out that not all receipts received on account of extended warranty contracts would become income of the assessee even in the year when such warranty agreements becomes enforceable. Simply because only those components of extended warranty receipts would be income of the assessee which have not been claimed by the customers. The amounts received qua extended warranty contracts are akin to prepaid expenses for repairs of cars. Naturally assessee will deem only those amounts as its income in respect of which no claims arose by the customers. Wherever warranty claims were made by customers pointing out some defect in the car, the assessee would not be showing the same as its income. The amounts received on account of extended warranty by the assessee therefore would become its income only in the year in which such extended warranty contracts mature. Now as the assessee has already been offering the said amounts in the year of maturity of such contracts, there taxation in the year of sale of car would certainly tantamount to a case of double taxation. Accordingly, we are of the view that the amounts received by the assessee as advance from customers towards extended warranty and added by the Ld. AO was not required. Accordingly, Ld. AO is directed to delete the addition. The ground of appeal raised by the assessee is therefore allowed. Disallowance of provision for expenses reversed - HELD THAT:- Admittedly, the assessee has not deducted TDS on certain receipts. We have also noted the observations of DRP regarding no claim having been made by the assessee qua some expenses in the return of income. We have also noted that the assessee has not provided details of TDS to the Ld. AO. As been noted that the Ld. AO also not clearly brought out in his order detailed bifurcation of the expenses as to viz expenses involving TDS deduction, those pertaining to last year and which were not claimed during the year etc. Be that as it may be we are of the view that ends of justice would be met if the matter is restored to the file of the AO for read judication after doing necessary verification. We set aside the order of lower authorities on this account and direct the Ld. AO to obtain all necessary details from the assessee and read judicate the matter by way of an speaking order after giving due opportunity of being heard. The assessee shall comply with all the notices of AO. Accordingly, ground is allowed for statistical purposes. Eligibility for claim of its unobserved depreciation allowed - AO is therefore directed to allow the same to the assessee.

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• 2024 (12) TMI 28
  Assessment order and the demand notice has been issued without any DIN mentioned - non- issue of separate DIN in separate communication - HELD THAT:-We find that the assessment order and the demand notice has been issued without any DIN mentioned in the order and similarly, no DIN has been mentioned in the demand notice issued u/s 156 either, which is not as per provisions of the CBDT circular no 19 dated 14/08/2019, and there is nothing on record to show that there were any exceptional circumstances which would sustain communication of final assessment order manually without DIN and the failure to allocate DIN is an error which could not be rectified by invoking the provisions of section 292B of the Act 61 . Moreover, even if we consider the common DIN generated on 25/11/2019, even then also we find, that in case of the demand notice issued u/s 156 of the Act 61, the same is dated 26th November, 2019, which means that on the date of generation of the common DIN, there was no demand notice u/s 156 in legal existence. There are identical judgments of various benches on this issue, that the basic requirement is the quoting of the DIN number on the body of the assessment order and on the demand notice. Subsequent generation of DIN either on the same day or next day and intimated to the assessee by way of separate communication does not satisfy the conditions of para 3 and 4 of the said circular. Thus, we hold that the assessment order u/s 144/ 147 dated 25/11/2019 and the demand notice u/s 156 dated 26/11/2019, (in Form - 7), cannot be legally sustained and it has to be treated that both has never been issued and will cease to have effect in the eyes of law. Legality of notice issued u/s 148 - As pertaining to the recorded reasons (undated) and the corresponding approval granted by the Ld. PCIT, Jammu, dated 26/07/2018, and we are in agreement with the assessee that there has not been any proper application of mind resulting in an objective satisfaction of the higher authority, and according approval to an incorrect figure of quantum of income which had escaped assessment, which are at great variance with each other, as mentioned in approval and recorded reasons, cannot be legally sustained. As such respectfully following the observation in the case of Teleperformance Global Service (P) Ltd, [ 2024 (3) TMI 1082 - BOMBAY HIGH COURT] we hold that the notice issued u/s 148 of the Act 61, was to be quashed and set aside. Assessee appeal allowed.

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• 2024 (12) TMI 27
  Validity of order of CIT(A)(NFAC) s order u/s 250 emanating from the Assessment Order u/s 144 - Assessee s request for personal hearing before the CIT(A) rejected - HELD THAT:- We deem it fit and proper to remit the matter to the first appellate authority after giving an opportunity for a personal hearing, in terms of rule 12 of the Faceless Appeals Rules 2021, for adjudication de novo in accordance with the law and by way of a speaking order. Thus faceless Appeal Scheme 2021 has made it mandatory to provide Virtual Hearing if asked by the Assessee. In this case the assessee had asked for personal hearing which has not been provided by the CIT(A)(NFAC). In these facts and circumstances of the case, respectfully following the decision BANK OF INDIA [ 2022 (6) TMI 1450 - ITAT MUMBAI] we set aside the order of the Ld.CIT(A)(NFAC) to the Ld.CIT(A) for de-novo adjudication after granting opportunity of virtual hearing as asked by the assessee.

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• 2024 (12) TMI 26
  Rejection of registration u/s 80G - assessee s application was filed beyond the statutory time limit - Cancellation of provisional registration - HELD THAT:- When we read the Budget Speech of Hon ble Finance Minister 2020 and the Memorandum of Finance Bill 2020 together, it becomes clear that the concept of Provisional registration was mainly to facilitate the registration of newly formed Trust/Institutions which have not yet begun the activities. In continuation of this when we read the sub clause iii of Proviso of section 80G(5) , which we have already reproduced above, it is clear that the intention of parliament in putting the word or within six months of commencement of its activities, whichever is earlier is in the context of the newly formed Trust/institutions. For the existing Trust/Institution, the time limit for applying for Regular Registration is within six months of expiry of Provisional registration if they are applying under subclause (iii) of the Proviso to Section 80G(5) of the Act. If we agree with the interpretation of the CIT(E), then say a trust which was formed in the year 2000, performed charitable activities since 2000, but did not apply for registration u/s 80G, the said trust will never be able to apply for registration now. This in our opinion is not the intention of the legislation. Even otherwise, the Provisional Approval is upto AY 2024-25, and it can be cancelled by the CIT(E) only on the specific violations by the assessee. In this case there is gross non application of mind by the CIT(E), as he has not considered the reply filed by the assessee in response to show cause notice and not followed the binding decision of ITAT Pune in the case of T.B.Lulla Charitable foundation [ 2024 (6) TMI 798 - ITAT PUNE] . Hon ble Supreme Court in the case of Union Of India And Others vs Kamlakshi Finance Corporation [ 1991 (9) TMI 72 - SUPREME COURT] has held that the Collector has to follow the binding precedence of jurisdictional Tribunal. CIT(E) has not discussed whether the Assessee fulfils all other conditions mentioned in the section as he rejected it on technical ground. Therefore, in these facts and circumstances we hold that the Assessee had made the application in form 10AB within the prescribed time limit and hence it is valid application. Therefore, we direct the CIT(E) to treat the application as filed within statutory time and verify assessee s eligibility as per the Act. CIT(E) shall grant opportunity to the assessee. Assessee shall be at liberty to file all the necessary documents before the CIT(E). Appeal of the assessee is allowed for statistical purpose.

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• 2024 (12) TMI 25
  Rejecting the application for registration u/s 12AB and cancelling provisional registration granted u/s 12AB - undertakings of the assessee are not fall within the ambit of charitable activities - zero income and expenditure during the relevant year in assessee s books which has been taken up as the cause for rejection of the assessee s request - HELD THAT:- It was essential for the CIT(E) to look into the activities and objectives of the trust, that the subject trust is established for public charitable activities and such activities are genuine in nature. CIT(E), eventually have powers to examine, inquire and verify the records of the assessee, so as to record his specific finding / satisfaction qua the assessee s eligibility for grant of registration. In present case, we note that the ld. CIT(E) had not come up with any clarity in his order as to how the activities of the assessee trust does not fall within the scope of charitable purpose. Allegation that assessee could not prove any charitable activity or the source of funds are not verifiable was not confronted to the assessee, whereas the assessee should have been afforded with the opportunity to place its submissions / evidence / contentions to rebut to such perceptions. Such action was against the principle of natural justice. As following case of Chhattisgarh Urology Society [ 2018 (2) TMI 1156 - CHHATTISGARH HIGH COURT] we observe that the Ld. CIT(E) was under the abounded duty to look into, for his satisfaction about the Objects of the trust, the genuineness of the activities and compliances under any other law and to pass an appropriate speaking order. Appeals assailing the issue therein has to be restored back to the file of the CIT(E) to reconsidering the applications of the assessee in form 10AB for grant of registration u/s 12AB and 80G(5) of the Act. Appeals of the assessee are allowed for statistical purpose.

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• 2024 (12) TMI 24
  Gain on land sold - LTCG or STCG - sale of land at Tiruvottiyur High Road received on liquidation of company - distribution of assets of the company on account of liquidation - AO by going through the provisions of section 2(47) noted that the property received by assessee on liquidation of company is transferred within the provisions of section 2(47) and the provisions of section 46(2) of the Act and treated this holding period by the assessee from 10.12.2012 i.e., the date of release deed by the company to the assessee and sold within one year - HELD THAT:- The assessee i.e., 360 equity shares were held by assessee for last so many years in company which got liquidated and company gave land it was holding . The assessee along with other shareholders sold his share of property at Thiruvottiyur High Road and received sale consideration on various dates. We are of the view that the provisions of section 2(42A), Explanation 1 is very clear which explains that when a person received property consequent to liquidation of the company, the period of holding of asset has to be taken from the date of previous owner i.e., company held it. We agree with the contention of the assessee as the Explanation to Section 2(42A) of the Act is very clear and hence, we confirm the order of CIT(A). This issue of Revenue s appeal is dismissed. Applicability of provisions of Section 50C - A look at the provisions of section 50C of the Act shows that the same applies to a consideration received or accruing as a result of the transfer by an assessee of a capital asset. In the present case, the appellant has not received any consideration as a result of the transfer by him ie. the appellant has not transferred any capital asset. Rather, the appellant has received an assets of a company are distributed to its shareholders on its liquidation in the form of land at Seevaram which is not be a transfer by the company for the purposes of section 45 as per the provisions of section 46(1) of the Act - Thus provisions of section 50C of the Act are not applicable in the case of the appellant for the Seevaram land received on distribution of asset on liquidation of company. Therefore, the issue is decided in favour of the appellant.

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• 2024 (12) TMI 23
  TDS u/s 195 - disallowance u/s 40(a)(i) - commission paid to non-resident parties for services rendered outside India - as argued non resident has no permanent resident or business in India, and they had given services outside India and they have not person in any action in India HELD THAT:- The recipients were resident outside India and they have no place of resident or business place in India. The services were rendered outside India by way of sales services for which the commission was paid and income to them also accrued outside India. In view of that no TDS was liable to be made and therefore section 40(a)(i) did not apply. In the present case both the persons to whom the commission has been paid are certainly non-residents. The commission has been paid to them for the services they gave outside India for selling the goods of the appellant outside India. The appellant has made the payment to them by making remittance through regular banking channel from India to overseas in their bank accounts. In view of that recipients of the payments are not liable to tax in India under any provisions of the Income Tax Act, 1961, and therefore, the assessee is not liable to make TDS and Section 195(1) of the Act does not apply. See Nova Techno cast Pvt. Ltd [ 2018 (5) TMI 1182 - GUJARAT HIGH COURT] Both the brokers are non-residents and the assessing officer has not disputed this fact. The non-residents recipient of commission, have no permanent resident or business establishment, in India or any business connection in India and they had given their services outside India, nor they have in any manner whatsoever presence of any kind in India. - Assessee appeal allowed.

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• 2024 (12) TMI 22
  Capital gains computation - possession rights over the said property - assessee submitted that possession rights in the said piece of land were clearly with the assessee which constituted a capital asset and transfer of such right of possession constituted transfer of capital asset and such gain was liable to be taxed as capital gains tax - as alleged right was acquired purely by way of a family arrangement without incurring any cost HELD THAT:- We observe that the Counsel for the assessee submitted before us during the course of hearing that the assessee had entered into a family settlement agreement in the year 2004 on a Rs.100/- stamp paper by way of which the assessee and four other family members had been granted the right of possession/right of tilling over such property. However, we observe that this fact was submitted before us for the first time and during the course of assessment proceedings/appellate proceedings such family agreement/arrangements by which the possession of such property was given to the assessee, was never brought to the notice of the assessing officer/Ld. CIT(A) for their consideration. Assessee, in our view has not given this important document which establishes that he was in possession of such possession rights in respect of the above property since 2004. Though assessee has made reference to extracts of the assessment/appellate orders of the co-owners of such property to establish that he was having right to possession over such property, but that in our view, would not qualify as substantive evidence to prove that the assessee was having possession rights over such property. This is especially in the light of the fact that the possession agreement dated 2004 was not brought to the notice of the assessing officer/Ld. CIT(A) for their consideration. Computing the cost of acquisition of such possession rights in the return of income filed by the assessee in response to notice issued by AO u/s.148 of the Act, the assessee has taken cost of acquisition of such right of possession by taking the value of land as per value computed by registered Valuer Report as on 01.04.1981. It is not clear that why the assessee has taken the cost of acquisition of right of possession on the basis of registered value of such land/property as per report of registered valuer as on 01.04.1981 and thereafter indexing the same to compute the cost of acquisition as on the date of transfer of such capital asset, when as per the assessee s own submission, the assessee was not having ownership rights in the said property. Therefore, it is not clear as to why the assessee has computed the cost of acquisition with reference to the ownership rights in the said piece of land and that too by taking reference of the value of land as per registered Valuer Report as on 01.04.1981, when in fact, the assessee was not the owner of the said property and further the assessee, as per the ld. Counsel s submission before us, got possession right over such property by way of a family arrangement entered in the year 2004. Therefore, it is not clear as to on what basis against the transfer consideration of Rs. 53 lakhs, the assessee has computed cost of acquisition of such property at Rs. 43,73,026/-. Therefore, while in our view, the right of possession in respect of such property would qualify as a capital asset, however, the assessee has failed to furnish certain important documents with respect to the date of acquisition of such capital asset (family arrangement in the year 2004) and further, it is also not clear as to how the assessee has taken the cost of acquisition of such right to possession at Rs. 43,73,026/- when admittedly the said right was acquired purely by way of a family arrangement without incurring any cost and such cost of acquisition has been computed by the assessee with reference to the registered value of such property as on 01.04.1981 and thereafter indexing the cost of value of such property when the assessee was admitted to having no ownership right in the property. Appeal of the assessee is allowed for statistical purposes.

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• 2024 (12) TMI 21
  Penalty u/s 271(1)(c) - penalty qua the relief already granted by ITAT in quantum-proceeding - HELD THAT:- We agree that the penalty u/s 271(1)(c) is not sustainable qua the relief already granted by ITAT in quantum-proceeding because the very basis of imposition of penalty has collapsed to that extent. Therefore, the AO is directed to delete penalty to that extent. This deletion is, however, subject to the rider that if the revenue is in further appeal before High Court against the quantum deleted by ITAT and the ITAT s order is reversed, the revenue shall have power to revive the penalty in accordance with law. Penalty qua the long-term capital gain - The addition is a result of a fair view taken by ITAT in the matter of estimation and hence to that extent, it should not be considered as concealment. Being so, we hereby come to the conclusion that penalty is sustainable for first component of Rs. 3,85,258/- but not for other component of Rs. 2,40,998/-. We hold accordingly. Penalty qua the undisclosed interest income - It is culled out from assessment-order that the assessee received sale-proceeds of immovable properties through cheques in his bank account (Para 2.5 of assessment-order) and the impugned interest income is also from bank accounts. Therefore, it can be discerned that when the AO, vide order-sheet entry dated 12.09.2012, questioned the assessee to explain the transactions of sale of immovable properties, the assessee had to declare not only capital gain but also interest from banks in the revised return. Therefore, the plea of AR that the declaration of interest income was voluntary is not acceptable and the same is rejected. Consequently, the imposition of penalty qua the interest income is hereby upheld.

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• 2024 (12) TMI 20
  Recognition of revenue from surrogacy cases - advance from surrogacy clients as income of the year - addition on the ground that the assessee has received these amounts from the surrogacy patients which are lying in the books of account for a long time and such outstanding advances represent the income of the assessee - assessee itself has recognized these receipts as revenue from surrogacy clients in the books of accounts maintained by it as seized from the assessee s premises during the search operation and it is only on a subsequent date that the assessee has reversed these entries - addition by estimating the income @ 15% under ICDS HELD THAT:- A perusal of the order of the CIT (A) shows that he granted relief to the assessee on the ground that the matter is subjudice before the Hon ble Supreme Court where the Rule notified by the Central Government was under challenge. We find the learned CIT (A) decided the appeal assuming the pendency of the writ petition. The record shows that the Hon ble Supreme Court had already dismissed the writ petition before passing of the appellate order. Therefore, the order of the learned CIT (A) which is based on wrong fact is liable to be set aside. At the same the time, it is an admitted fact that the advances were received in the past years and do not pertain to the impugned AY It is on account of the circular issued by the Govt. of India debarring the foreign nationals from commission of surrogacy in India, that the procedures could not take place and further the assessee had shown the amounts as advance outstanding in its books of account. We find merit in the argument of assessee that when the advances are received in the books of account mostly from 2013 onwards and such advances received are from the foreign nationals, hence the liability to pay the amount subsists, it continues to be a liability and does not become the income of the assessee. When the assessee after doing certain procedures has recognized part of the income received from those foreign nationals as income of the assessee, the accounts of the assessee cannot be said to be true and correct. Since it is the submission of assessee that it has recognized most of the amounts due to the foreign nationals as well as the persons of Indian origins as income in subsequent A.Ys, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the AO with a direction to give one more opportunity to the assessee to substantiate with evidence to his satisfaction that (a) the assessee has refunded the amounts to the foreign nationals where a request has been made and (b) whenever certain procedures have been conducted, the assessee has recognized part of such income as his income in the concerned assessment year and (c) the assessee has recognized such advances as income due to cessation of liability in any of the later years. AO shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the Revenue are accordingly allowed for statistical purposes.

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• 2024 (12) TMI 3
  Reopening the assessment u/s 147 - valid sanction being granted by the competent authority, before issuing the impugned Notice of reopening of assessment or not? - as decided by HC [ 2018 (5) TMI 1551 - GUJARAT HIGH COURT] Addl. Commissioner of Income tax had not only put his remarks on the proforma presented before him by the Assessing Officer but also separately conveyed his satisfaction to the Assessing Officer in a separate letter. The application of mind and grant of sanction was, thus, one integrated exercise. Even independently, we have no reason to believe or hold that this was a case of nonapplication of mind HELD THAT:- Our attention is invited to order [ 2018 (9) TMI 476 - SC ORDER] passed by this Court while issuing notice on this Petition. We find that the contentions which are recorded in the said order were raised only by way of a rejoinder in the writ petition filed by the petitioner. We find from the impugned judgment that this factual contention was not agitated before the High Court. As petitioner submits that in fact, this contention was agitated before the High Court. The High Court has recorded the contentions raised by the counsel for the petitioner. Therefore, if the case of the petitioner is that this contention was raised at the time of hearing, but was not noted and considered, the remedy of the petitioner is before the High Court. Petitioner seeks permission to withdraw this Petition on the ground that the petitioner wants to file an appropriate application before the High Court. We dispose of the Special Leave Petition as withdrawn.

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• Customs

• 2024 (12) TMI 65
  Refund claim being the excess payment of duty held as refundable consequent upon the passing of the Order-in-Original - original authority rejected the refund claim on the ground that the original Bills of Entry and their duty payment documents that is TR-6 challans were not placed on record. Secondly, since the assessments were provisional and the above order finalising the provisional assessments, the PD bonds were to be finalised and cancelled; and the cancellation of PD bonds was also not placed on record and no evidences was produced to prove unjust enrichment HELD THAT:- The Order-in-Appeal which was relied upon by the authorities to reject the refund claim has been set aside by this Tribunal vide Final Order [ 2022 (1) TMI 326 - CESTAT BANGALORE] . Hence, the impugned order rejecting the refund claim on this ground cannot be sustained. Non-submission of TR-6 challans and Bills of Entry - Appellant is directed to file the same before the refund authority after collecting it from the assessment group as stated by them in their letter dated 16.05.2016. Since the PD bonds has to be finalised and cancelled by the Department, it is for the Revenue to cancel the same and communicate to the concerned refund section. Unjust enrichment - Tribunal vide Final Order had clearly held that unjust enrichment is not applicable to the provisions assessments prior to 2006 before the amendment to Section 27 read with Section 18 of the Customs Act, 1962. In similar cases, this Tribunal [ 2023 (10) TMI 1460 - CESTAT BANGALORE] has remanded the matter to the original authority for verification of documents. The appeal is allowed by way of remand to the original authority to process the refund claims needless to say an opportunity of hearing to be provided to the appellant.

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• 2024 (12) TMI 19
  Import of Baggage - Personal Effects - Detention and confiscation of gold ornaments by Customs authorities - petitioner had travelled from Bengaluru to Dubai and and opted for the green channel. She was intercepted by a Customs Officer after she had crossed the green channel. On her search, one plastic box containing 3 gold bangles, weighing 130 grams, 15 gold beads (parts of bracelets) weighing 89 grams were recovered - According to the respondents, all jewellery and ornaments, personal or otherwise, is liable to be viewed as prohibited goods in addition to being subject to the restrictions contained in the 2016 Rules - as argued phrase bringing into cannot possibly be construed as being applicable to personal effects . HELD THAT:- As per Circular No. 72/98-Customs dated 24 September 1998 the competent authority clarified that the phrase personal effects would include personal jewellery . The respondents thus consciously sought to introduce a distinction between personal jewellery and the word jewellery per se as it appears in the Appendices. The clear intent of that Circular appears to have been to include personal items of jewellery or ornaments within the meaning of the expression personal effects . When the aforesaid 1998 Rules came to be amended in 2006, by virtue of the Baggage (Amendment) Rules, 2006 [2006 Amendment], the stipulation with respect to articles allowed entry free of duty remained the same except for the increased monetary limits of INR 35,000/-, 15,000/- and 3,000/- which came to be incorporated. Rule 2(vi) of the 2016 Rules essentially adopts the same concept of used personal effects as was intended under the 1998 Rules, and by way of abundant caution, a definition now stands placed in the 2016 Rules and which purports to define the expression personal effects with sufficient clarity. However, the same would not detract from the distinction which the respondents themselves acknowledged in the Circular and intended customs officers to bear in mind the distinction which must be recognised to exist when construing and identifying personal jewellery as opposed to jewellery per se. The expression jewellery as it appears in Rule 2(vi) would thus have to be construed as inclusive of articles newly acquired as opposed to used personal articles of jewellery which may have been borne on the person while exiting the country or carried in its baggage. Thus, personal jewellery which is not found to have been acquired on an overseas trip and was always a used personal effect of the passenger would not be subject to the monetary prescriptions incorporated in Rules 3 and 4 of the 2016 Rules. This clearly appeals to reason bearing in mind the understanding of the respondents themselves and which was explained and highlighted in the clarificatory Circular referred to above. That Circular had come to be issued at a time when the Appendices to the 1998 Rules had employed the phrase used personal effects, excluding jewellery . The clarification is thus liable to be appreciated in the aforesaid light and the statutory position as enunciated by the respondents themselves requiring the customs officers to bear a distinction between personal jewellery and the word jewellery when used on its own and as it appears in the Appendices. This position, in our considered opinion, would continue to endure and remain unimpacted by the provisions contained in the 2016 Rules. Thus Joint Commissioner of Customs has clearly misconstrued the scheme as well as the objectives of the 2016 Rules. In the absence of the case of the petitioner having been tried or evaluated on the basis of the postulates that we have enunciated hereinabove, we find ourselves unable to sustain the order impugned.

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• 2024 (12) TMI 18
  Demand of interest - Recovery of wrongly availed amount against duty credit scrip as rewards formulated for Service Exports from India Scheme - Foreign Trade Policy authoring the levy of interest u/s 28AA of the Customs Act, 1962 - HELD THAT:- No provision of the 1992 Act under which Foreign Trade Policy has been framed has been pointed out to show that the provisions of Section 28AA of the 1962 Act have been made applicable for levying interest on any person who is found ineligible for any benefit received under the terms of any Scheme under the Foreign Trade Policy. It is true that Chapter 3 of the Foreign Trade Policy which was in operation for the period from 01-04-2015 to 31-03-2020 contemplates that if any person is found to be ineligible for the benefit under any Scheme the amount will have to be refunded along with interest u/s 28AA of the 1962 Act. We must hold that the provisions of the Foreign Trade Policy cannot by itself authorise the levy of interest u/s 28AA of the 1962 Act as such levy must be supported by plenary legislation. Petitioner is entitled to succeed. Therefore, this writ petition is allowed.

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• 2024 (12) TMI 17
  Duty Drawback - Mis-declaration of export goods - adjudicating authority confiscated the said exported goods for their mis-declaration and gave option to redeem the same on payment of redemption fine u/s 125 of Customs Act, 1962 and imposed penalty u/s 114(iii) of the Customs Act, 1962 - HELD THAT:- This is a case of drawback where the allegation is that the goods exported merited classification under CTH 6200 2000 and 6005 2000 as against CTH 6205 9090 and 62059090 as declared by the appellant, which meant that the appellant was actually entitled to drawback of Rs1,19,224/- as against Rs.1,39,618.79 claimed by them, thus resulting in an excess claim of Rs 20,394/-. The order is totally non-speaking while it imposes severe fine and penalties for an excess drawback claim of Rs 20,394/. The least the Authority could do is to disclose his mind on the severity of the matter. Circular issued a little before the OIO was passed totally missed the attention of the Ld. Original Authority. The order after accepting that the error was typographical in nature, gives a miss to the principle of proportionality while evoking the penal provisions. Moreso in a case where no SCN was issued or hearing granted as per the request of the appellant. Such waiver of rights is not uncommon where the exporter finds speed of essence and does not want to lose time and money on demurrage etc, in the delay that a formal adjudication process involves. Hence the decision is shocking to the conscience, being wholly out of proportion to the misconduct caused by a typographical error and merits to be set aside for lacking both fairness and transparency. Commissioner Appeals who could have remedied the defect, only recorded that the goods were available for confiscation at the time of passing the OIO and hence the confiscation of goods and imposition was sustainable. The amount of excess drawback involved was only Rs 20,394/- and that the order of the Original Authority was issued where in manifest non application of mind is evident, the order merits to be set aside. Justice will not be served by remanding this low tax matter back to the Ld. Original Authority, for a decision afresh, after a decade.

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• 2024 (12) TMI 16
  Classification of imported goods - Import of prepared additives for cements, mortars or concretes - classification defect owing to which differential duty was ordered for recovery - General Rules for Interpretation of Import Tariff - HELD THAT:- Though the first appellate authority had affirmed the classification against tariff item 3505 1090 of First Schedule to Customs Tariff Act, 1975, it would again appear that the finding therein was devoid of any support to indicate that the goods are other modified starches or other than dextrins with the sub-heading. On the other hand, the claim of the appellant herein that the product is exclusively used as additives to cement and mortar and, therefore, appropriately classifiable within heading 3824 of First Schedule to Customs Tariff Act, 1975 has not been examined at all A plain understanding of the enumeration in the said heading makes it abundantly clear that it is not intended as a residuary but also one in which the specific description outweigh any other less specific description in terms of rule 3 of General Rules for Interpretation of the Import Tariff appended to Customs Tariff Act, 1975. There is no doubt that the show cause notice had proposed to alter the classification but only at sub-heading level. Notwithstanding that, it was obligatory, and indeed acceptable, to isolate the relevant tariff item within such classification with appropriate justification. Neither is there any such justification nor indeed, as pointed out supra, has the Commissioner of Customs narrowed down the classification at the tariff item level. In view of this, assessment under section 17, and recovery under section 28, of Customs Act, 1962 required to be re-determined. Needless to say such determination should be comprehensive and not by mere reliance on a few isolated expressions deployed in the test report or technical literature or information at the public domain. In order to this may be carried out, we set aside the impugned orders and restore the notices back to the respective original authorities for fresh adjudication. Appeals are, thus, allowed by way of remand.

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• 2024 (12) TMI 15
  Anti dumping duty (ADD) - Color coated aluminum coils imported as coated with Styrene/ Butyl Methacrylate Copolymer other than PE/ PVDF liable to anti dumping duty or not? - HELD THAT:- We find that on the basis of these directions, TRU vide Circular No.45/2017- Customs (ADD) dated 22.11.2017,clarified that- color coated aluminum foil with either PE (Polyester) coating of PVDF (Fluorine- carbon), coating falling under CTH 7607 is excluded from the scope of PUC. We also observe that although the Tribunal has in para 9 of their order in the matter of G. M. Alloys [ 2017 (11) TMI 491 - CESTAT NEW DELHI] specifically directed to exclude color coated aluminum foil from the scope of anti dumping duty, but while issuing the circular the TRU added the words- with either PE (Polyester) coating of PVDF (Fluorine- carbon), coating falling under CTH 7607 . This is the reason why the revenue is restricting the exclusion. We also observe that the Principal Bench of this Tribunal had noted that the product is not being manufactured in India. The DI had specifically supported in the submissions before us that product under consideration can exclude color coated aluminum foil as the same is not manufactured in India. We find force in the contention of the counsel for the Appellant that the purpose of imposition of anti dumping duty is to safeguard the interest of domestic industry engaged in the manufacture of similar goods. We also observe that the Appellant is a member of ACP Manufacturer Association and the Principal Bench of this Tribunal in the case of ACP Manufacture Association vs. Union of India [ 2023 (11) TMI 570 - CESTAT NEW DELHI-LB] has again excluded color coated coil from imposition of anti dumping duty though in different Notification dated 06.12.2021. It is, therefore, our considered view that anti dumping duty is not attracted on color coated aluminum coil imported by the Appellant.

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• Service Tax

• 2024 (12) TMI 14
  Service Tax on Technical Testing and Analysis Service has been paid by the service recipient under Reverse Charge Mechanism-RCM - as alleged such demand is not tenable because testing of mint samples has not been considered under RCM u/s 68 (2) of the Finance Act, 1994 and in Rule 2 (1) (d) of Service Tax Rules, 1994 or in the relevant Notification issued by the Government from time to time and the statutory liability of service provider cannot be shifted on service recipient by mutual agreement until and unless the provisions of law allow doing so - HELD THAT:- It is not disputed that the service recipient namely, M/s. MCX Sohan Lal Commodity Management Pvt. Ltd., New Delhi have in fact paid the Service Tax on Technical testing Analysis Service received by them from the Appellants. The Challans evidencing payment of such tax were submitted before the Adjudicating Authority below and again annexed with this Appeal. We find force in the contention of the Appellant that once the Service Tax has been discharged by the recipient of service, demand of Service Tax from the Appellant again will amount to double taxation which is not permissible under law. The case laws relied upon by the Appellant and the CBEC Circular dated 17.12.2004 are applicable in the facts and circumstances of the case. We also observe that the Appellants have been filing regular ST-3 Returns and maintaining the statutory records relating to payment of Service Tax wherein all the transactions were duly recorded. There is no allegation that any transaction was found beyond the mandatory records maintained by the Appellant. It is also an admitted fact that the Appellants are an autonomous body under Government of India, Ministry of MSME. We considered view that the extended period of limitation is not applicable in the instant case. My opinion on limitation also gets support from the decision of Continental Foundation Jt. Venture Vs. CCE, Chandigarh-1 [ 2007 (8) TMI 11 - SUPREME COURT] there is no question of payment of interest and the same are set aside. The penalty imposed is also set aside.

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• 2024 (12) TMI 13
  Demand of service tax - Manpower Recruitment or Supply (MRS) - Amounts reimbursable from DT towards ESI PF/Uniform /Tea expenses - HELD THAT:- We find that the Appellant is getting several expenses reimbursed which are in the nature of ESI/PF Charges, Uniform expenses, tea expenses and the said reimbursements are akin to the issues decided in the Apex Court s judgement Intercontinental Consultant Technocrats [ 2018 (3) TMI 357 - SUPREME COURT] since the Appellants had collected ESI and PF charges which are indicated separately in the invoices as reimbursements from customer (DT) no abatement on statutory levy like ESI/PF could be extended as per extant Board circular and so the department has entertained the view that the amount was taxable. As per the Apex Court s decision, such reimbursements are taxable only w.e.f. 14th May 2015, the date on which the amendment to Section 67 came into force. Hence in view of the above discussions and judicial precedents pointed above, we are inclined to hold that reimbursements in the nature of ESI/PF charges/ Uniform charges, tea expenses and insurance does not fall within the ambit of levy of service tax during the material period (2003-04-2007-08 in the present case) and hence the demand is not legally sustainable. As the demand itself is unsustainable, question of imposition of penalty does not arise. Period involved in respect of Manpower Recruitment and Supply Service is between 29.06.2005 to 31.03.2008 for MRC and 26.05.2005 to 27.12.2005 for Nursing Assistants provided to Delphi- TVS - whether the conditions precedent for invocation of the extended period of limitation existed or not? - We find that no specific reasons have been mentioned for invoking the extended period of time in paragraph 9 of the Show Cause Notice. Appellant has been regularly filing periodical returns and discharging applicable service tax. The department was aware of the facts and the issue was detected only upon audit conducted by the department. It is to mention that the ST 3 returns filed by the Appellant periodically are subject to examination and scrutiny by proper officers before whom the returns are filed. Appellants were under bona fide belief that no service tax was liable to be paid and hence the appellant also did not charge any service tax. Only after departments stand, the Appellant has raised debit notes on MRC towards service tax. We find that the adjudicating authority in his findings has pointed out to audit findings and non-disclosure by the Appellant, when it was pleaded specifically by the Appellant that they were not aware of the lapses which were unintentional. We are inclined to hold that invocation of extended period in respect of MRS is not legally sustainable in this case. As per Rule 7 of Service Tax Rules,1994 every assessee shall submit the half yearly return by the 25th of the month following the particular half-year. Hence demand of service tax for the period from October 2007- March 2008 is only sustainable and the interest payment u/s 75 automatically flows from such duty demand. We find that the lower authority has imposed penalty only u/s 78 for the total demand. As the demand for extended period is unsustainable. The penalty imposed under Section 78 is set aside. The Appellant has pleaded sufficient cause for non-imposition of penalty and hence penalty for the normal period is also set aside. Disallowance of Cenvat credit - assessee had failed to provide valid documents for availing of such Cenvat Credit and hence the recovery of Cenvat Credit along with interest is sustained. The Appellant has not disputed payment of interest towards belated payment of service tax. Demand on reimbursements of PF/ESI/Uniform /Tea expenses is not legally sustainable and demand on MRS service is upheld only for the normal period. The appeal is partly allowed, with consequential benefits, if any on the above terms.

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• 2024 (12) TMI 12
  Classification of services - Services falling within the definition of mining services or Site formation and clearance, excavation and earthmoving and demolition - scope of section 65(105)(zzzy) of the Finance Act, 1994, which was introduced on 01.06.2007 - HELD THAT:- The activities undertaken by the appellant amounted to mining activity ipso facto. Following the decision of Doypack Systems P Ltd [ 1988 (2) TMI 61 - SUPREME COURT] we also find that the activity relates to the mining of lignite which is mining of mineral. Accordingly, the services provided by the appellant are falling in the scope of clause (zzzy) of sub-section (105) of section 65 of the Act. Since we have already explained the necessity to read the contract in its entirety and finding the mining service to be more specific, appropriate and applicable category, we do not delve upon the classification of such services as transportation of goods. The services provided by the appellant under the said contract were not preparatory work to mining activities but they were carried out to win the minerals and constituted mining activities per se, we hold that the views expressed by Commissioner of Central GST (A) in para 8 of the impugned order are incorrect and contrary to the statutory provisions. We also carefully referred to the circulars cited in impugned order, however in view of discussion and plain reading of law as it stood at the relevant time, we do not find any merit in the decision taken in the impugned and thus we hold that the services provided by the appellant under the said contract are in the nature of mining services so defined in clause (zzzy) of sub-section (105) of section 65 of the Act and not falling within the meaning of Site formation and clearance, excavation and earthmoving and demolition defined in clause (97a) of section 65 of the Act. We also hold by following the principles laid down by the Apex Court that the said services cannot be subjected to tax prior to 01.06.2007 and accordingly the appellant merits refund of amounts paid by them. Facts relating to the contract number 53223 dated 07.12.2004 are not verifiable since the appellant have neither supplied the copy of the contract nor the relevant invoices. All the issues involved in the present case are significantly and dominantly factual issues in nature and therefore careful examination of the facts emanating from contemporaneous evidences is indispensable before reaching to any conclusion otherwise that will be complete miscarriage of justice to the other side. Thus, in absence of relevant materials, we do not wish to interfere in the impugned order to the extent that related to the services provided by the appellant under contract number 53223. Refund of service tax - Since, we have held that the services are classifiable under clause (zzzy) i.e. mining services, brought to taxability w.e.f. 01.06.2007, the amount denoted as [D] above i.e. Rs. 2,04,87,723 is not eligible whereas the amount denoted as [C] above i.e. Rs. 4,60,77,978 is found eligible in facts as well as law. Thus, we hold that the appellant is eligible for refund. Unjust enrichment - We find from the facts and submissions made by the appellant, more particularly the invoices attached to the refund applications and certificate from the chartered accountant that the incidence of such tax was borne by them and therefore bar of unjust enrichment was not applicable. We also find that said documentary evidences were furnished by the appellant to the lower authorities and against which no plausible explanations or contemporaneous evidences have been brought on record by the revenue to inflict bar of unjust enrichment. Therefore, we hold that the appellant has crossed the bar of unjust enrichment since the burden of tax was borne by themselves. Interest on refund prayed by the appellant - As we find that the adjudicating authority in order-in-original ordered to deny the interest on refund to the appellant. As held by us above, the Appellant is eligible for refund of Rs. 4,60,77,978 and since the interest is consequential in terms of Section 11BB of the Central Excise Act, 1944 we hold that the Appellant is eligible for interest on delayed payment of interest in terms of Section 11BB of the Central Excise Act, 1944 which is made applicable to service tax provisions vide Section 83 of the Finance Act, 1994, by following the decision of Supreme Court in case of Ranbaxy Laboratories Ltd v. UOI [ 2011 (10) TMI 16 - SUPREME COURT ] held the liability of the revenue to pay interest u/s 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund u/s 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made. Thus the appellant is entitled for interest from the expiry of 3 months from the date of original application filed for claim of refunds before the jurisdictional authority till the date of sanction. Thus finding from the facts and records that services provided by the appellant under contract are not preparatory work but they are mining activities per se, services provided prior to 01.06.2007 were not taxable and thus the impugned order is modified to that extent and the appellant is allowed refund with consequential relief of interest as per above. The appeal filed by the Appellants is partly allowed in the above terms.

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• 2024 (12) TMI 11
  Demand of Service Tax on Amount retained through forfeiture of earnest money/security deposits of contractors - Declared Service - consideration for tolerating the act of poor performance by service providers /contractors - Applicability of section 66E(e) of the Finance Act, 1994 - HELD THAT:-From the perusal of these decisions it becomes abundantly clear that the issue of considering a forfeited amount as an amount of consideration towards declared services stands already settled in favour of the assessee. The same is already held to not to be the consideration towards rendering declared service defined u/s 66E(e) of the Finance Act, 1944. In fact the cancellation of contract itself is held to not to be a service. We find no reason to differ from these findings. We further observe that department also vide Circular No.214/1/2023-ST dated 28th February, 2023 has clarified about leviability of service tax on the declared services, agreeing to the obligation to refrain from an act or to tolerate an act or a situation, or to do an act under clause (e) of section 66E of Finance Act, 1994 and has clarified that the activities contemplated under section 66 E (e) i.e. when one party agrees to refrain from an act or to tolerate an act or a situation, or to do an act, are the activities where the agreements specifically refers to such an activity and there is a flow of consideration for this activity. The decision of this Tribunal in the case of Dy. General Manager (Finance), Bharat Heavy Electricals Limited [ 2022 (9) TMI 1005 - CESTAT NEW DELHI] wherein the earlier decision of the Tribunal in the case of M/s. South Eastern Coalfields [ 2020 (12) TMI 912 - CESTAT NEW DELHI] was dealt with, has been referred in this Circular. The Board has decided to not to file any appeal against the decision in M/s. South Eastern Coalfields [ 2023 (8) TMI 606 - SC ORDER] . The said decision has also been upheld by Hon ble Supreme Court [ 2023 (8) TMI 606 - SC ORDER] passed in the case of Commissioner of Central Excise and Service Tax vs. South Eastern Coal Fields Limited in Civil Appeal No. 2372/2021. We hold that the amount retained has wrongly been held to be the amount towards rendering declared service. The order under challenge is therefore set aside and consequent thereto, the appeal is hereby allowed.

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• Central Excise

• 2024 (12) TMI 10
  Clandestine manufacture and removal - alleged fraudulent availment of cenvat credit on the strength of invoices issued by their Unit-II located at Coimbatore without actually receiving the goods - levy of penalty on the appellants - HELD THAT:- The appellant s factory was visited on 14.09.2005 on the basis of intelligence about indulgence in clandestine manufacture and clearance of electrical stampings and parts of motors and also fraudulent availment of cenvat credit on invoices without receiving the inputs. Voluminous records have been seized during the search operation and subsequently statements of various persons including the employees of the appellant have been recorded. The evidences that have been brought on record revealed that the appellant has indulged in clandestine manufacture and clearance of the excisable goods without payment of duty; also in the truck load cleared excess quantity of goods than the quantity mentioned in the invoices for clearance. The argument of the appellant that only on the basis of these statements and without any corroborative evidence from the suppliers of raw materials, consumption of electricity, purchaser of the goods since not investigated and brought on record, the confirmation of the demands and recovery of cenvat credit alleging fraudulent availment cannot be sustained. Similar arguments have been raised by the appellant before the Special Court for Economic Offences at Bangalore which has been dealt at length and ultimately the Court analysing the evidences and statements of witnesses called for who were subjected to examination-in-chief and cross-examination, and also referring to various documentary evidences placed before the Court by the prosecution and taken on record, arrived at the conclusion that there had been manufacture and clandestine clearance of excisable goods and consequently convicted all the accused who are appellants. The requirement of evidence to prove a case in a criminal case is more rigorous than in comparison to confirmation of demand by the adjudicating authority on the principle of preponderance of probability. In the present case, on a trial to criminal liability, the Court has arrived at the conclusion that there has been evidence of clandestine manufacture and clearance of the goods and fraudulent availment of cenvat credit which rests on the evidences and the witnesses who have admitted before the Court in addition to their admission before the authorities which have been recorded under Section 14 of the Central Excise Act, 1944. The argument of the learned advocate disputing the said evidences cannot be acceptable. Further, it is found that the learned Commissioner analysing the records recorded a detailed finding which corroborates the statements furnished by the witnesses. Therefore, the contention of the appellant that allegation of clandestine clearance of goods cannot be sustained is also devoid of merit. The confirmation of demand of duty on goods manufactured and cleared clandestinely amounting to Rs.27,46,833/- confirmed in the impugned order with interest and equivalent penalty under Section 11AC of the Central Excise Act, 1944 is upheld. Also, wrong availment of cenvat credit of Rs.2,72,388/- only on the basis of invoices without receipt of inputs confirmed in the impugned order with interest and equivalent penalty under Rule 15(2) of Cenvat Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944 is upheld. The penalty imposed on the other appellants viz. Mr. G.R. Govindarajan, Managing Director, Mr. S. Rajamannar, CEO, Mr. R. Rajendran, Manager-Accounts and Mr. R.N. Ramesh, In-charge of Despatches under Rule 26 of the Central Excise Rules, 2002 is upheld but reduced to Rs.25,000/- each in respect of Mr. G.R. Govindarajan, Managing Director, Mr. S. Rajamannar, CEO; to Rs.5000/- each in respect of Mr. R. Rajendran, Manager-Accounts and Mr. R.N. Ramesh, In-charge of Despatches. Similarly, the penalty imposed under Section 26 of Central Excise Rules, 2002 on M/s. Raaja Magnetics (RML-II), Coimbatore is reduced to Rs.25,000/- to meet the ends of justice. Penalty imposed under other provisions on all appellants are set aside. The impugned order is modified to the above extent - the appeals filed by the appellants are disposed of.

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• 2024 (12) TMI 9
  Admissibility of CENVAT Credit availed on inputs at B-59 transferred to Unit B-165 - credit on inputs used in the final product not amounting to manufacture - credit on rejected goods and procedural discrepancies. Admissibility of the credit availed on inputs received in their factory and later transferred to their other Unit B-165 having separate Central Excise registration - HELD THAT:- The appellant had accounted for the receipt of the inputs and its transfer to their other Unit at B-165 under proper challans which have been accounted there in their records, later consumed in the manufacture of finished goods cleared for export on payment of duty. Thus, the entire movement of the inputs from the stage of receipt at B-59 till the clearance of the final product on payment of duty from B-165 had been duly recorded. On going through the said documents, it is opined that the appellant could able to establish the receipt and transfer of inputs and its proper use at Unit B-165 to the satisfaction of the authority. In these circumstances, there is no justification for denial of the cenvat credit of Rs.72,97,860/- merely because necessary permission was not obtained for clearance of finished goods on payment of duty from Unit B-165 , instead of bringing it back to their Unit at B-59. CENVAT credit of Rs.18,24,719/- availed on inputs that were used in the manufacture of finished goods was denied on the ground that the process of conversion of inputs into final products does not amount to manufacturer - HELD THAT:- This issue has been considered by this Tribunal in their own case and it has been observed that the process viz. drilling, burr removal, grinding, blackening etc. as per the specification of customers undertaken by the appellant result into the emergence of a new product having distinct identity, use and hence amount to manufacture, vide Final Order [ 2023 (10) TMI 958 - CESTAT BANGALORE ]. Thus, the credit on this count is also admissible. Admissibility of cenvat credit of demand of Rs.5,60,978/- on rejected goods - HELD THAT:- Credit cannot be denied merely on the ground of affixation of wrong seal indicating the receipt of returned goods at Unit B-165, which pertains to B-49, when the documents submitted reveal that the rejected goods were duly received recorded as inputs and reprocessed and cleared on payment of duty on the processed goods. Extended period of limitation - penalty - HELD THAT:- The demand pertains to the period December 2004 to July 2005 and the show-cause notice was issued on 08.08.2007 invoking suppression of facts which cannot be sustained when all movements of inputs from B-59 to B-165 had been duly recorded by the Appellant and clearance of finished goods effected on payment of appropriate Central Excise duty. Therefore, the demand is also barred by limitation and cannot be sustained. Further, we find that the transfer of raw materials and utilisation of credit availed on inputs used in the manufacture of finished goods later cleared on payment of duty relate to the appellant s own units at B-59 and B-165, therefore imposition of penalty on the appellant also cannot be sustained. The impugned order is set aside - appeal is allowed.

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• 2024 (12) TMI 8
  Liability to pay Excise duty on the scrap/waste generated during the job work - whether the appellant who is the principal manufacturer and has sent these raw materials to the job workers for conversion in terms of Notification No. 214/86-CE dated 25.03.1986, is required to pay Central Excise duty in respect of waste and scrap generated at the job workers factories and cleared by the job workers without payment of duty for the disputed period? - HELD THAT:- The Tribunal Chennai vide its Final Order No. 41199/2024 dated 10.09.2024 [ 2024 (9) TMI 1245 - CESTAT CHENNAI] has decided the issue in favour of the assessee. The Impugned Order dated 15.03.2016 of the Commissioner of Central Excise (Appeals-I), Chennai cannot sustain and so ordered to be set aside - Appeal allowed.

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• 2024 (12) TMI 7
  Default in timely payment of duty on goods cleared - Contravention of Rule 8(3A) of the Central Excise Rules, 2002 (Rules) - extended period of limitation - penalty - period from April 2011 to July 2011 and August 2011 to December 2011 - doctrine of merger - HELD THAT:- The issue as to whether the Assessee can utilise the CENVAT credit toward payment of duty when in default is no more res integra and many judicial authorities have held that the provision of Rule 8(3A) of Central Excise Rules, 2002 as ultravires to the Main Act. The Hon ble Gujarat High Court in the case of M/s. Indsur Global Ltd. Vs. UOI [ 2014 (12) TMI 585 - GUJARAT HIGH COURT] struck down the condition in Rule 8(3A) for payment of duty without utilizing the CENVAT credit as unconstitutional and invalid. It is found that the Department had preferred an appeal against the decision passed in Indsur Global Ltd. before the Hon ble Supreme Court. The Ld. Counsel for the appellant has submitted before us that the appeal filed by the Department in Indsur Global Ltd. has been disposed by the Hon ble Apex Court in UNION OF INDIA ORS. VERSUS INDSUR GLOBAL LTD. [ 2024 (7) TMI 1559 - SC ORDER (LB)] . The appeal was referred to the Lok Adalat proceedings before the Hon ble Supreme Court and settlement has been arrived at. The effect is that the stay order having merged with the order of settlement, stands vacated. The decision rendered by the Hon ble High Courts of Gujarat and Madras in the above cases would revive and be in force as a precedent. The demand raised alleging violation of Rule 8(3A) cannot sustain and requires to be set aside. Ordered accordingly. Since the demand itself does not sustain, the invocation of extended period and imposition of penalties does not arise. The impugned order is set aside - appeal allowed.

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• 2024 (12) TMI 6
  CENVAT credit - denial of credit paid by sender units, based on the allegation that sender units inflated the value of Soap Noodles stock transferred to the appellants, as compared to the cost of such materials debited by each of the sender units, and the appellants took excess credit - recovery alongwith interest and penalty - whether appellant is entitled to take Cenvat credit of duty paid on inputs in terms of Rule 3 of Cenvat Credit Rules, 2004 or not? - HELD THAT:- Admittedly, the appellant has paid duty on the invoices issued by the sender unit of 115% / 110% of the cost of production in terms of Rule 8 of Valuation Rules, therefore, the appellant is entitled to take cenvat credit of what duty they have paid. The said issue has been examined by the Hon ble Punjab Haryana High Court in the case of VG. STEEL INDUSTRY VERSUS CCE [ 2011 (5) TMI 154 - PUNJAB AND HARYANA HIGH COURT] , wherein the Hon ble High Court has observed even if the duty has been paid in excess of the amount finally held to be payable, unless the excess duty paid has been refunded, the assessee could claim cenvat credit as the department could not get the duty twice . Thus, the appellant has correctly taken the cenvat credit as higher duty paid by the supplier which has not been challenged by the Revenue and not the higher duty paid has been refunded to the sender unit. The Cenvat credit of duty paid on procurement of inputs is admissible and cannot be asked to reverse. In these circumstances, no penalty can be imposed on the appellants - the impugned order is set aside - appeal allowed.

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• 2024 (12) TMI 5
  CENVAT Credit - input services - Air Travel Agent service - Architect service - Business Support Service - Clearing Forwarding service - Club Membership service - Telephone service - GTA service - Housekeeping service - Design Development service - Chartered Accountant Services - Sponsorship services - Outdoor Catering services - denial of credit on the ground that the disputed services are not in conformity with the definition of input service as per Rule 2(l) of the CENVAT Credit Rules, 2004 - period of dispute involved in the present case is from January, 2005 to January, 2014 - HELD THAT:- The case of the appellants is covered under both the un-amended as well amended definition of input service . Such definition clause, effective upto 31.03.2011, has specifically provided the phrase activities relating to business , for consideration of certain taxable services as input service , for the purpose of availment of CENVAT Credit of Service Tax paid thereon. Since the appellants are a corporate entity and maintained adequate records to demonstrate that the expenses incurred were in context with the services used by them for their business activities, the disputed services received prior to 01.04.2011 should be considered as input service for the purpose of taking of CENVAT Credit of Service Tax paid thereon. The definition of input service was substituted by Notification No. 03/2011-C.E. (N.T.) dated 01.03.2011 w.e.f. 01.04.2011. The effect of the substituted definition is that the phrase means was enumerated in the said definition clause, which covers any services used directly or indirectly, in or in relation to manufacture of the final products and clearance of the finished products upto the place of removal for consideration as input service . Since such definition clause is very wide and cover various services for consideration as input service, narrow interpretation cannot be placed to deny the benefit of CENVAT Credit availed by the appellants on the disputed services - the CENVAT Credit availed by them on the disputed services are in fact, input services and denial of the benefit of such credit in terms of Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11A of the Central Excise Act, 1944, shall not stand the scrutiny of law. Considering the submissions of the appellant that they are not contesting the credit of Service Tax paid by them on cable operator service and rent-a-cab service, we hold that the appellants are liable to reverse the CENVAT Credit amounting to Rs.68,709/- availed on such services. Learned Advocate fairly concedes that the said amount of Rs.68,709/- has already been reversed by the appellants. Since such aspect of reversal is required to be examined at the original stage, the original authority is directed to examine such reversal of CENVAT Credit. The impugned order to the extent it has denied the CENVAT Credit benefit amounting to Rs. 9,49,18,339/- is set aside and appeal to such extent is allowed in favour of the appellants - the original authority should examine the records to ascertain whether, the CENVAT Credit amounting to Rs.68,709/- has already been reversed by the appellant and if such amount had already been reversed, no proceedings shall be initiated by the Department for recovery of the same from the appellants. Appeal disposed off.

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• 2024 (12) TMI 2
  Valuation of goods transferred to sister units - clinkers transferred by the appellant to their sister concern - to be valued under Rule 4 or Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000? - Revenue Neutrality - Extended period of limitation - suppression of facts or not. HELD THAT:- This Tribunal in appellant s own case for their own unit for the period from March 2011 to November 2013 held that Rule 4 read with Rule 11 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 be adopted following the judgment of the Larger Bench of the Tribunal in the case of Ispat Industries case [ 2007 (2) TMI 5 - CESTAT, MUMBAI-LB] . This Tribunal in M/S. ULTRATECH CEMENT LTD., (UNIT: RAJASHREE CEMENT WORKS), VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS [ 2024 (1) TMI 663 - CESTAT BANGALORE ] observed we have no hesitation to hold that the appropriate rules for determination of the assessable value of the goods for the transferred clinkers to sister units will be Rule 4 read with 11 of the Central Excise Valuation Rules, 2004 rather than Rule 8 of the Central Excise Valuation Rules, 2000 for the period in question. Revenue Neutrality - HELD THAT:- The appellant has argued that the aspect of revenue neutrality is not considered while deciding the case for earlier period. In support, they have referred to the judgment of the Hon ble Supreme Court in Nirlon Ltd. s case [ 2015 (5) TMI 101 - SUPREME COURT] . It is found that the said argument of the learned advocate is misplaced and the principle of law laid down by the Hon ble Supreme Court has been misunderstood in ascertaining the correct method of valuation applicable for clearance of goods to own unit on stock transfer basis. The revenue neutrality is not a statutory concept but a principle of equity developed by courts as a mitigating factor in appreciating the intention of the persons while applying the principle of law to a particular situation to determine the reason for non-payment of duty. Revenue neutrality cannot be considered as an incentive not to follow the statutory provision governing principle of valuation solely on the ground that the other unit could avail the benefit of credit of the differential duty payable. Extended period of limitation - suppression of facts or not - HELD THAT:- This Tribunal for the earlier period while applying the principle of valuation under Rule 4 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 to the circumstances of the case has set aside the demand for the extended period of limitation holding that the same cannot be applicable to cases involving interpretation of statutory principles of valuation and in absence of suppression or misdeclaration of facts on the part of the assessee. Appeal is modified to the extent of setting aside the demand for the extended period of limitation and the demand with interest to be confirmed for the normal period of limitation. All these appeals are remanded to the adjudicating authority to redetermine the assessable value applying the principle of Rule 4 read with Rule 11 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 and compute the differential duty with interest for the normal period. As the issue pertains to interpretation of provision of Central Excise (Valuation) Rules, 2000 imposition of penalty is also not warranted and accordingly not sustainable, hence, set aside. Appeal disposed off by way of remand.

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• CST, VAT & Sales Tax

• 2024 (12) TMI 4
  Rejection of prayer of the petitioners for representation by their advocate - challenge to quash CR Case - Prosecution proceedings against the Partners of the Firm for evasion of Tax - HELD THAT:- From the record of proceeding, it is seen that having registered the C.R. case, a summon has already been issued to the petitioner and the petitioner had entered appearance through the learned counsel before the learned trial Court below. Though it is contended in this petition, the prayer for representation of the petitioner is disallowed, the order sheets annexed along with this petition donot disclose anything to that effect rather the order sheet reflects that the petitioner s application for adjournment and for his absence was duly considered by the learned trial Court below by order dated 13.12.2012. This Court has also perused the complaint filed by the authorities as recorded hereinabove, and reading of the aforesaid materials if taken on its face value discloses the offences as alleged inasmuch as this Court in exercise of its power under Section 482 of Cr.P.C. cannot go into the factual dispute and allegation as raised in the present case more particularly, when such facts are not admitted by the Taxation department. The criminal petition stands dismissed. Interim order, if any, passed earlier stands vacated - LCR be returned back.

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• Indian Laws

• 2024 (12) TMI 1
  Dishonour of Cheque - application filed u/s 482 of CrPC for quashing complaint under Section 138 of NI Act - HELD THAT:- Admittedly, the petitioner has issued two numbers of post-dated Cheques bearing No. 622623 and 622624 for an amount of Rs. 93,00,000/- and Rs. 1,54,00,000/- respectively. The parties have entered into an agreement with certain stipulations/terms and conditions. The terms and conditions of the Deed of Undertaking duly executed between the petitioner and the respondent provides that the petitioner will clear the GST, amounting to Rs. 9,63,00,000/-in respect of the firm-M/s Kurung Kumey Enterprises for execution of the work. An amount of Rs. 9,63,00,000/-, of which 10% GST amount will be Rs. 33,00,000/- shall be paid by the petitioner to the respondent. If the GST of 2% is reflected by the Department of Municipal Corporation, the amount to be paid by the petitioner will be Rs. 1,54,00,000/- to the respondent. Perusal of the Deed of Undertaking goes to show that the two Cheques have been issued as post-dated for an amount of Rs. 93,00,000/- and Rs. 1,54,00,000/- to the respondent on fulfillment of certain conditions. Having considered the said stipulation, it is afraid that such an stipulation could be a valid stipulation insofar as the issuance of Cheques are concerned. This Court finds no ground to quash the proceedings of C.R. No. 100/2022 and taking cognizance by the learned Judicial Magistrate First Class, Yupia, as if at all, the issues/grounds that have been raised appears to be a matter of trial before the competent Court. It is not inclined to invoke the inherent power of this Court for quashing of the proceedings in the instant case - The criminal petition is rejected and stands dismissed.

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