Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 11, 2019
Case Laws in this Newsletter:
GST
Income Tax
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Due date for furnishing of FORM GSTR – 7 for the month of January, 2019 extended till 28.02.2019
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Provisional attachment of property - invocation of provisions of section 83 of the CGST Act against the directors of the petitioner-company - in any case, at this stage, section 83 of the Act does not apply to the directors of the private company.
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Coupled with the fact that the power of taxation earlier vested with the municipalities u/s 128(2)(vii) of the U.P. Municipalities Act, 1916 having been omitted by virtue of Section 173 of the U.P. Goods and Service Tax Act, 2017, the municipality did not even have the statutory competence to levy, impose or collect Advertisement Tax.
Income Tax
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Assessment u/s 158BC - period of limitation - proper authorization - search u/s 132 - continuous search operation or not - search and seizure were conducted on two days by two different authorised persons - Appeal of the assessee rejected.
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Seeking interest on return of seized cash after adjustment of tax - in terms of the Explanation to Section 244A(1)(b) the amount was the excess tax (on change of its character from seized amount to tax paid), the petitioner is entitled to interest.
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Declarations of undisclosed income - Income Declaration Scheme, 2016 - extension of time for making payment of the third installment sought - Appellant directed to deposit the amount with interest @12% - SC
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Assessment u/s 153A - TAT remanded the back relying upon the decision in Lancy’s case [2016 (2) TMI 797 - KARNATAKA HIGH COURT] - The appeal was dismissed, as being bereft of any substantial question of law. Therefore, the judgment reported in Lancy’s case cannot be said to be applicable in law or that it is binding for any reason whatsoever.
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Nature of transaction - slump sale or transfer of shares - slump sale u/s 2(42C) - transfer of shares in a company will not result in a transfer of an undertaking or part of the undertaking to make it a slump sale.
Corporate Law
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Companies (Significant Beneficial Owners) Amendment Rules, 2019
Indian Laws
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Dishonor of Cheque - Examination of handwriting contained in the impugned cheque - once the accused has taken a defence that he has never issued any cheques in favour of the petitioner, relief was rightly granted in his favor.
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Dishonor of Cheque - cheque bearing the signature of petitioner - The contentions for the petitioner that the petitioner was not a Director at the time of signing of the cheque or the same is without consideration cannot be evaluated, appreciated or decided at this stage.
SEBI
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Format for annual secretarial audit report and annual secretarial compliance report for listed entities and their material subsidiaries
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Derivative on such stock shall be moved to physical settlement in case certain specified conditions are satisfied.
Service Tax
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Penalty u/s 78 of FA - even if the appellant subsequently pays the amount on being pointed out by the department, along with interest, imposition of penalty under Section 78 of the Finance Act cannot be waived - penalty upheld.
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Penalty u/s 70, 77 and 78 of FA - non-filing of ST-3 return would not amount to suppression of facts, with intent to defraud Government revenue, unless it is corroborated with other evidences of malafide intention - Penalty u/s 78 set aside - however, penalty u/s 70 and 77 confirmed.
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CENVAT Credit - capital goods - tower material - pre-fabricated building / shelter - Until the Tribunal stepped in and conclusively held that no cenvat credit can be claimed as the goods are capital goods, the matter was at large - demand beyond the normal period and levy of penalty is not warranted.
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Imposition of penalty - tax collected but not deposited to the Government - financial difficulty can never be a justification for not remitting or depositing the collected tax in Government Treasury - levy of penalty confirmed.
Central Excise
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Classification of Henna Powder - deemed manufacture - repacking from bulk in unit packs - the product is a beauty or make up preparation for application on the hands. In terms of Section Note 4 to Section VI, such beauty or make up preparations are to be classified only under the heading 3304 of tariff and not anywhere else - the processes undertaken by the appellant also amount to manufacture
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Transfer of credit - Rule 10 of CENVAT Credit Rules - merging of units - availment of credit on capital goods - Rule 10 do not mandate for any separate written permission from jurisdictional authorities - credit allowed.
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CENVAT Credit - input services - Fees paid by the appellant for site visit by officials of CII - Though in the invoices it stated that these are management consultancy service, but it is not for any management consultancy services - credit not allowed.
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CENVAT Credit - inputs - pipeline fabrication work - EOU crane - electrical installation - earthing connection - insulation of acid plant etc. - the same cannot be consider as civil construction or support structure - Credit allowed.
VAT
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Extenuation of period of Limitation - Period for reopening of an assessment was already expired - extending the period of limitation from 5 years to 6 years to be not applicable to those assessments which stood completed and the 5 year period for re-opening of assessment stood expired.
Case Laws:
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GST
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2019 (2) TMI 427
IT-grievance redressal mechanism - Circular No.39/13/2018-GST dated 03.04.2018 issued by CBIC - Held that:- The respondent Nos. 1, 2 and 7 will ensure that the Commissioner, second respondent, meets the petitioner or its representatives on Monday i.e. 11th February, 2018 at 11.30 a.m. and will ensure that the petitioner’s grievances are redressed - matter posted for “Passing Orders” on 14th February, 2018.
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2019 (2) TMI 426
Legislative competence to the imposition, collection and realization of the Advertisement Tax - Constitutional validity of Nagar Palika Parishad Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 - Uttar Pradesh Goods and Service Tax Act, 2017 - U.P. Municipalities Act, 1916 - Articles 14, 19, 21, 246, Seventh Schedule, List-II. Whether the bye-laws framed on 12.1.2017 by the respondents and published on 19.8.2017, were beyond the statutory power of the municipalities? Held that:- This Court has no hesitation in holding that after the omission of Entry-55 of the List-II of the Seventh Schedule to the Constitution of India having been omitted by the 101 Amendment Act, 2016 with effect from 16.9.2016, even the State Government did not have the legislative competence to levy or collect taxes on advertisement which was earlier available under Entry-55, this coupled with the fact that the power of taxation earlier vested with the municipalities under section 128(2)(vii) of the U.P. Municipalities Act, 1916 having been omitted by virtue of Section 173 of the U.P. Goods and Service Tax Act, 2017, the municipality did not even have the statutory competence to levy, impose or collect Advertisement Tax. The levy and collection of the Advertisement Tax under the provisions of Nagar Palika Parishad, Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 is clearly without legislative or statutory competence and is ultra-vires under Article 265 of the Constitution of India, U.P. Municipalities Act, 1916 and U.P. Goods and Service Tax Act, 2017. This Court has no hesitation in holding that the said Nagar Palika Parishad, Hathras (Vigyapan Kar Ka Nirdharan Aur Wasuli Viniyaman) Upvidhi, 2015 is without any legislative or statutory competence and, thus, are hereby struck down - the Court has held the levy and collection of Advertisement Tax as ultra-vires, the amounts so collected from the petitioner are liable to be refunded. Petition allowed.
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2019 (2) TMI 425
Provisional attachment of property - invocation of provisions of section 83 of the CGST Act against the directors of the petitioner-company - Held that:- The reliance placed upon section 89 of the Act is thoroughly misconceived inasmuch the same relates to recovery of any tax, interest or penalty due from a private company in respect of supply of goods or services. Moreover, even if such amount cannot be recovered from the private company, the directors of the company do not ipso facto become liable to pay such amount and it is only if the director fails to prove that non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company, that the same can be invoked. However, in any case, at this stage, section 83 of the Act does not apply to the directors of the private company. The impugned orders of attachment, to the extent the same attach the bank accounts of the directors, as set out in the statement at page 8 and 9 of the petition, at serial No. 1, 2, 3, 4, 5, 10 and 11 are concerned, are totally without any authority of law - the respondents are directed to forthwith release the attachment of bank accounts - petition allowed.
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2019 (2) TMI 424
Filing of Form GST TRAN - 1 - petitioner made several complaints before the Nodal Officer, but the same has not been considered so far - Held that:- It is hardly required to be stated that the Nodal Officer appointed under the Central Goods Services Tax (CGST) and State Goods Services Tax (SGST) Acts is obligated to consider the complaint of the petitioner and take a decision in the matter. However, the same has not been done, it is imperative for this Court to direct respondent No.7 - Nodal Officer to consider the complaint/representation made by the petitioner at Annexures-H and K to the writ petition and take a decision in accordance with law in an expedite manner - petition disposed off.
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Income Tax
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2019 (2) TMI 423
Transfer Pricing Adjustment - interest on loan to Sun Pharma Global Inc (AE) at London Inter Bank Offer Rate (LIBOR) Plus 2% Rate - Addition u/s 14A - Disallowance of provision for leave encashment u/s. 43B - Revenue appeal SLP dismissed on the ground of delay.
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2019 (2) TMI 422
Deduction u/s.80IA - netting of interest for disallowance - HC dismissed the appeal of assessee. SLP dismissed.
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2019 (2) TMI 421
Appeal filed by the Revenue against the order of the learned Tribunal - maintainability of appeal - Transfer pricing adjustments - reference to TPO - acceptable comparable. - HC dismissed the revenue appeal as no substantial question of law involved. SLP dismissed.
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2019 (2) TMI 420
Declarations of undisclosed income - Income Declaration Scheme, 2016 - extension of time for making payment of the third installment sought - HC dismissed the petition. Appellant directed to deposit the amount with interest @12%.
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2019 (2) TMI 419
Nature of transaction - slump sale or transfer of shares - transfer of entire shareholding in its subsidiary UHEL to a third party - Held that:- transfer of shares in a company will not result in a transfer of an undertaking or part of the undertaking to make it a slump sale. - Tribunal has invoked the correct principle of law to draw a distinction between transfer of shares and transfer of undertaking. In the present facts, what has been transferred are mere shares of the respondent in UHEL. There has been no transfer of an undertaking of UHEL. The undertaking continues to be vested in UHEL. Only there has been change in pattern of its share holdings which would not make it slump sale. This position is evident from the statutory definition of slump sale and the term 'undertaking' as defined in the Act read with the binding decision of the Apex Court in [2012 (1) TMI 52 - SUPREME COURT OF INDIA] and [1954 (10) TMI 2 - SUPREME COURT] - Decided against the revenue.
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2019 (2) TMI 418
Seeking interest on return of seized cash after adjustment of tax - assessee shown the amount of cash seized as advance tax in the ITR which was not accepted and an independent demand of tax was raised - Held that:- Admittedly, the assessment for the Assessment Year 2015-16 has not been done under Section 153(A) or Chapter XIV-B of the Act. It has been done under Section 143(3) of the Act. Therefore, on a plain and strict reading of Section 132B(4) of the Act, no interest can be granted under Section 132B(4) of the Act, as it only provides for grant of interest by fixing the termination date for it as the date of completion of the assessment under Section 153A or Chapter XIV-B of the Act i.e. special provision for assessment to be done on account of search proceedings. The grant of interest under the provision of Section 132B of the Act even where assessment is completed under Section 143(3) of the Act should have been explicitly provided therein. It is not permissible for us to read something into the statutory provision, which is not there. However, though the Revenue did not accept the declaration made by the petitioner in its return of advance tax, the fact is that the petitioner claimed it to be tax. Therefore, on the date the demand notice under Section 156 of the Act was issued, there was an excess amount with the Revenue which the Petitioner was claiming to be tax. Therefore, in terms of the Explanation to Section 244A(1)(b) of the Act the amount of ₹ 35 lakhs was the excess tax (on change of its character from seized amount to tax paid), the petitioner is entitled to interest of ₹ 35 lakhs w.e.f. 16th December, 2016 on the passing of assessment order. - Interest @6% allowed. - Decided partly in favor of assessee.
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2019 (2) TMI 417
Stay of demand - regular appeal is pending before CIT(A) - petitioner directed to pay 10% of the disputed demand before 31.12.2018 in three installments pending disposal of the appeal - Held that:- justice would be sub-served in directing the petitioner-company to deposit ₹ 8,00,000/- (Rupees Eight Lakhs only) in addition to the amount already deposited if any, on or before 21.01.2019 with liberty to move before the concerned First Appellate Authority for early disposal of the appeal, subject to the aforesaid deposit.
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2019 (2) TMI 416
Assessment u/s 153A - necessity of incriminating material during the course of search - ITAT remanded the back relying upon the decision in Lancy’s case [2016 (2) TMI 797 - KARNATAKA HIGH COURT], wherein HC has dismissed the appeal - Held that:- A judgment of the court becomes binding only when a question arises for consideration, is contested by both sides and thereafter findings are recorded by the Court. None of these conditions have been fulfilled. There is no notice issued to the other side. No question of law has been determined. The appeal was dismissed, as being bereft of any substantial question of law. Therefore, the judgment reported in Lancy’s case cannot be said to be applicable in law or that it is binding for any reason whatsoever. Under these circumstances, when the Tribunal has relied on the judgment in Lancy’s case, we are of the view that a grave error has been committed. Therefore, the only issue that Lancy’s case has been wrongly followed, the impugned order requires to be set aside. - Matter restored before the ITAT
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2019 (2) TMI 415
Assessment u/s 158BC - period of limitation - proper authorization - search u/s 132 - continuous search operation or not - search and seizure were conducted on two days by two different authorised persons - The limitation commences from the last day of the month in which the last panchnama was recorded - Held that:- Even if the search operations continue for a number of days or are conducted on days not continuous or consequent, that would not be relevant in so far as computing limitation which has to be from the last date on which incriminating material was recovered and seized, which seizure is also evidenced by a panchnama. Once on the basis of an authorisation a search is initiated, then it has to be continuous unless there is a restraint order issued against any documents or materials. This is also logical since once the search party leaves the premises, no one would leave any incriminating material in the premises for further seizure. Once the search party leaves the subject premises, for a further search there should be a fresh authorisation. However, if a restraint order is issued against any material and the same allowed to be kept in the premises itself, then within sixty days a further search could be carried out on the very same authorisation but; confined to the materials against which a restraint order is issued under Section 132 (3). The panchnama drawn up last, would be that drawn up seizing incriminating materials; a seizure as provided in Section 132. Whether it be on the first authorisation or the last under a series of such authorisations is not relevant for our case, which has only one authorisation. A panchanama was drawn up and the other documents which the authorised officer wished to examine were placed in an almirah and the same issued with a restraint order under Section 132(3). Tribunal has rightly found that at the time when the search was proceeded with, it would not have been in the contemplation of the authorised officer that an assessment order would be issued only after the period of limitation. It cannot also be assumed that the authorised officer had at the time of search itself decided to issue an order after the limitation as provided under Section 158BE. Here is not a case where there was unexplained delay in carrying out the further seizure of the documents against which a restraint order is issued. Regarding the issue that, search and seizure were conducted on two days by two different authorised persons - Held that:- at the first appellate stage, the specific contention was that both the officers though authorised had independently conducted the search on the two separate days. This contention cannot vitiate the search and seizure and was not accepted by the first appellate authority or the Tribunal. Here too, the contention is reiterated, which we find to be a mere after thought to delay the finalisation by realisation of the demand. Appeal rejected - Decided against the assessee.
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Service Tax
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2019 (2) TMI 414
Imposition of penalty - tax collected but not deposited to the Government - Held that:- After recovering the tax, it was the bounden duty of the assessee to have remitted it or deposited it in the Central Government Treasury - If the answer to that is that the assessee is in financial difficulty and such a reason or ground can never be a justification for not remitting or depositing the collected tax in Government Treasury, then, the reasons in paragraph 6 to sustain the penalty is neither perverse nor vitiated by any error of law apparent on the face of the record. Consequently, none of the questions proposed are substantial questions of law. Demand upheld - Appeal dismissed - decided against appellant.
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2019 (2) TMI 413
CENVAT Credit - capital goods - tower material - pre-fabricated building / shelter - time limitation - Held that:- The Tribunal found that the submission of the Revenue even if noted and on this point, that does not carry its case any further. Until the Tribunal stepped in and conclusively held that no cenvat credit can be claimed as the goods are capital goods, the matter was at large. Penalty - Held that:- Because the issue was of interpretation and arguable, the penalties cannot be sustained. They also cannot be sustained because the demand has not been upheld in full. Appeal dismissed - decided against Revenue.
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2019 (2) TMI 412
Penalty u/s 70, 77 and 78 of FA - demand of service tax along with interest were paid before issuance of the SCN - no intent to evade - Held that:- Apparently, there is no material available on record to show that the appellant had indulged into suppression of facts, with intent to evade payment of service tax. In any event, non-filing of ST-3 return would not amount to suppression of facts, with intent to defraud Government revenue, unless it is corroborated with other evidences of malafide intention - the imposition of penalty under Section 78 of the Act is not justified. The imposition of penalties under Section 70 and 77 of the Act are warranted for delayed filing of ST-3 returns and for non-submission of documents within the stipulated time frame. Appeal allowed in part.
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2019 (2) TMI 411
Penalty u/s 78 of FA - Non-payment of service tax - appellant had rendered service and collected service charges with tax but not paid the tax to the department - advertising agency service - period October 2007 to March 2010 - Held that:- It is not in dispute also that during the period they have failed to furnish any returns with the department informing the collection of service tax along with service charges from the customers. In these circumstances, even if the appellant subsequently pays the amount on being pointed out by the department, along with interest, imposition of penalty under Section 78 of the Finance Act cannot be waived - penalty upheld. Demand of Service Tax - web hosting, server collocation, domain name registration etc. - Held that:- The services rendered by the appellant all in the taxable category of ‘information technology software service’ brought into statute with effect from 16.5.2008 and accordingly, confirmation of demand of ₹ 8,12,493/- for the said period with interest and penalty - the appellant’s plea that they have not raised the issue of taxability for rendering services viz. domain name registration, web hosting, web design etc. is devoid of merit and liable to be rejected. Appeal dismissed - decided against appellant.
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2019 (2) TMI 410
Classification of services - Business Auxiliary services or not - services of marketing rendered to one M/s e-Biz.Com (P) Limited, Noida - scope of Commercial Concern - case of appellant is that the appellant being an individual is not covered under the definition of taxable service for Business Auxiliary Service - Held that:- Being an individual and carrying out an activity for client through computer online interface, it would be difficult to presume that such activity would attract service tax - demand set aside - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 409
Classification of services - Business Auxiliary services or not - exports of alcoholic liquor - one organization has been given the monopoly over trade; they procured goods from various vendors and retained a percentage of amount and transferred the rest to the supplier - period July, 2003 to March 2006 - Held that:- In this case the title gets transferred as soon as the ship sails. It is also clearly reflected in the impugned order that all records showed that there was sales and purchase between the two organizations. - the contention of the Revenue cannot be agreed upon, that the appellant should be treated as an agent of NMDC and charged service tax on the 3% of the sale value retained by them. The appellant is not liable to pay service tax - appeal allowed - decided in favor of appellant.
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Central Excise
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2019 (2) TMI 408
CENVAT Credit - inputs - pipeline fabrication work - EOU crane - electrical installation - earthing connection - insulation of acid plant etc. - Held that:- CESTAT Larger Bench decision in the case of Manglam Cement Ltd. Vs. Commissioner of Central Excise, Jaipur [2018 (3) TMI 1547 - CESTAT NEW DELHI] has given a finding that steel items used for fabrication of support structure for smooth erection of machine including cement had to be considered as “assessories of capital goods” and those items are inputs and eligible to get benefit of CENVAT credit as they fall within the scope and ambit of both Rules 2(a)(A) as well as 2(K) of CENVAT Credit Rules, 2004, it can’t be said that those credits are inadmissible. As found from the nature of services electric installation, preparation of earthing system for electricity and insulation of acid container should be regard as “safety measure” for protection of factory and its workers who are engaged in or in relation to the manufacturing process, the same cannot be consider as civil construction or support structure. Extended period of limitation - Held that:- It cannot be said that only because audit party had found some credit availed as inadmissible, suppression of fact is made out. Further it is not established that appellant had any malafide intention to suppress its duty liability from the department - extended period cannot be invoked. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 407
Demand based on relied upon documents and statements - applicability of judgment of this Tribunal in the case of Mekala Raja Plywoods [2014 (5) TMI 245 - CESTAT AHMEDABAD] - Held that:- Since after consideration of all the documents, cross examination in the same statements this Tribunal in the case of Mekala Raja Plywoods set aside the entire demand by allowing the party’s appeal and dismissing the Revenue’s appeal, the charges in the present case also not sustainable. Since the same statements which were relied upon in the present case have been retracted by the witnesses those statements commonly used in the present case do not have any substance as all the statements lost its truthfulness. Admittedly the present case is also made out only on the basis of all those evidences which were existing in the case of Mekala Raja Plywoods case, we do not hesitate to say that the ratio of Mekala Raja Plywoods case directly applies in the present case. Thus, in the identical set of case, under a common investigation and based on same evidences the Tribunal after considering cross examination and other evidence allow the appeal of the assessee - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 406
Interest on delayed refund - relevant date for calculation of refund - Held that:- The wording of the Section 11BB is categorical and the interest it is payable after three months from the date of application of refund which in this case is 12.05.2008. The relevant date for filing a refund claim under Section 11B has no significance in determining the date for payment of interest under Section 11BB - appeal dismissed - decided against Revenue.
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2019 (2) TMI 405
CENVAT Credit - capital goods - welding electrodes used for fabrication and repairs and maintenance within the factory premises - time limitation - Held that:- In the appellant’s own case on similar and identical issue of denial of CENVAT credit on welding electrodes was decided by this Bench in M/S ULTRATECH CEMENTS LTD. VERSUS THE COMMISSIONER C. CE&ST, GUNTUR [2016 (10) TMI 1169 - CESTAT HYDERABAD] which holds a view that appellant are eligible for CENVAT credit. Supreme Court in the case of Ramala Sahkari Chini Mills Ltd [2016 (2) TMI 902 - SUPREME COURT] has held that welding electrodes used in the maintenance of machines are eligible for CENVAT credit. Credit allowed - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 404
CENVAT Credit - input services - pest control services - site visit fee for national award bill (management consultancy) service - Held that:- The product stored by the appellant being sugar and is being used as input for aerated beverages which are used for human consumption, it is essential that the premises are to be kept pest free - the pest control services availed by the appellant are input services - credit allowed. Fees paid by the appellant for site visit by officials of CII - Held that:- It is seen from the invoice that the site visit has been made in regard to National Award for Food Safety, 2014. Though in the invoices it stated that these are management consultancy service, it is neither the case of the appellant that they had requested for any management consultancy and the visit is indeed in respect of assessing the appellant with regard to giving an award. This can never be considered as input services - credit cannot be allowed. Appeal allowed in part.
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2019 (2) TMI 403
CENVAT Credit - waste arising during the manufacture is cleared for a consideration - demand of reversal of CENVAT credit proportionate to the value of the waste BOPP film and waste paper scrap cleared - explanation (1) to Rule 6 (1) of the CENVAT Credit Rules, 2004 - Held that:- This issue is no longer res integra and it has been held in the cases of Menon & Menon [2017 (12) TMI 85 - CESTAT MUMBAI] and M/s Shivratna Udyog Ltd [2017 (9) TMI 985 - CESTAT MUMBAI] that explanation (1) to Rule 6 of CENVAT Credit Rules, 2004 covers non-excisable goods manufactured or produced using inputs on which CENVAT credit has been availed. It does not cover waste material which arises during the process of manufacturing even if the same is cleared for some consideration. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 402
CENVAT Credit - Clearance of manufactured products to various organisations of Government of India - benefit of N/N. 10/1997-CE and N/N. 64/1995-CE availed - no separate records maintained for inputs and input services utilized for manufacturing exempted goods - Held that:- For the clearances made to the defence related establishments, respondent is discharging the applicable Central Excise Duty. It is also noticed that the demand is for the period 2004-05 to 2007-08. It remains also undisputed that the respondent had paid off the CENVAT credit with interest, attributable proportionately to the inputs and input services utilized for manufacturing of the exempted goods. Rule 6 (3) (ii) very clearly indicates that a manufacturer needs to reverse only the CENVAT credit attributable to the inputs and input services used in or in relation to the goods which are manufactured and cleared claiming exemption - In the case in hand, there is no dispute, that respondent had reversed the CENVAT credit on the inputs and input services attributable to the exempted goods cleared by them (recorded in impugned order). Appeal dismissed - decided against Revenue.
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2019 (2) TMI 401
Transfer of credit - Rule 10 of CENVAT Credit Rules - merging of units - availment of credit on capital goods - Held that:- Undisputed facts are ESCL and ESIAD have merged together and formed merged ESCL and are given one registration number which would indicate that the unit was functioning out of one premises; that both the units unmerged ESCL and ESID, were operating/manufacturing. The merger of the both units was accepted by the authorities in the form of issuing a new registration certificate, there was no outward movement of inputs or capital goods from the premises of unmerged ESCL and ESID, as also from merged ESCL, would mean that all the inputs and the capital goods on which CENVAT credit was availed by the unmerged units were available in the premises. Rule 10 do not mandate for any separate written permission from jurisdictional authorities. The language of Rule 10(1) specifically states that manufacturer shall be allowed to transfer the CENVAT credit lying unutilized in his accounts to such transfer, sold, merged, leased or amalgamated factory. The Provisions of Rule 10(3) is also complied in this case as the stock of inputs as such or in process or capital goods are also to be transferred along with the factory premises, in the name of merged ESCL and there is due accounting in merged ESCL. Ineligible CENVAT credit availed on capital goods - 100% credit availed in subsequent year - Held that:- The appellant had not availed any CENVAT credit in the year of receipt of the capital goods and has availed CENVAT 100% in the subsequently after the factory was commissioned. The appellant has correctly availed the CENVAT credit on capital goods. There is no doubt as to the fact that the capital goods were received in the factory premises in ESIAD and they were installed and CENVAT credit was availed subsequent to the production activity - the impugned order to the extent it denies CENVAT credit on capital goods is also not in consonance with the law. Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 400
Classification of Henna Powder - under the chapter heading 3304 or 3305 - deemed manufacture - repacking from bulk in unit packs - Penalty - Rule 25 of Central Excise Rules, 2002 read with Section 11AC of The Central Excise Act, 1944 - Held that: - From the description of the product as it appears on the packing it is quite evident the product is a beauty or make up preparation for application on the hands. In terms of Section Note 4 to Section VI, such beauty or make up preparations are to be classified only under the heading 3304 of tariff and not anywhere else in the Schedule. In terms of chapter note 3 to Chapter 33, also these goods have to be classified as per the use as indicated on the packing material. It is fact that though the Henna Powder in unit container could be used for colouring the hairs also, but the packing describes the use of the product being cleared as beauty or makeup preparation for decoration of the hands. In view of the specific description and use as is mentioned on the packing the classification under heading 3305 cannot be accepted. Since the product gets classified under Chapter 33, in terms of Chapter Note 5, “conversion of powder into tablets, labelling or relabelling of containers intended for consumers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the products marketable to the consumer, shall be construed as ‘manufacture’.” Thus the processes undertaken by the appellant also amount to manufacture Penalty 25 of Central excise Rules, 2002 read with Section 11AC of Central Excise Act, 1944 - Held that:- The demand in the present case is made within the normal period of limitation as provided by Section 11A (1) - Not even a whisper or iota of mention of ingredients mentioned for invoking extended period of limitation as per proviso to section 11A(1) is there in any of the two show cause notices, or adjudication order. Since the ingredients as prescribed for invoking extended period of limitation are identical to those for invoking Section 11AC for imposition of penalty, there is no justification to sustain the penalty imposed. The penalty equivalent to the duty demanded imposed on the appellants under Rule 25 of Central Excise Rules, 2002 read with Section 11AC of The Central Excise Act, 1944 is set aside - The demand of duty under Section 11A along with interest under Section 11AB of Central excise Act, 1944 is upheld - appeal allowed in part.
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2019 (2) TMI 399
Cenvat credit - Held that: - Tribunal has in case of M/s Everest Metal Works [2008 (10) TMI 495 - CESTAT, NEW DELHI} held that: - I do not wish to make comments on the correctness of either of the two orders. If the appellate authority was of the view that the order of the adjudicating authority was not based on cogent evidence, the matter could have been sent for de novo adjudication. The onus to prove that the goods in question were actually received is clearly on the person who claims to have purchased and received the goods. If the person claims some benefit he has to prove the foundational facts. The Commissioner (Appeals) was not correct in fastening the onus on the Department and on the ground that the Department has failed to establish the non-receipt of the goods by the respondent, set aside the order without consequential order of remand. Clearly the Department cannot prove the non-receipt, the assessee has to prove by positive evidence the receipt of goods so as to enable him to take cenvat credit. Since Commissioner has not examined the evidences gathered by the revenue during course of investigation and rendered finding categorical finding in respect of them and the receipt of the goods covered by the said invoice by the respondent, we are without expressing any opinion on the evidences and submissions made by the appellants remand the matter back to Commissioner for reconsideration of entire issue afresh - Appeal allowed by way of remand.
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CST, VAT & Sales Tax
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2019 (2) TMI 398
Extension of time to comply with the impugned order - Held that:- There are no error, much less apparent, in the order impugned, warranting its reconsideration - Review petition dismissed.
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2019 (2) TMI 397
Refusal to grant stay of collection of the disputed tax - Held that:- There is no reason to entertain this special leave petition - SLP dismissed.
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2019 (2) TMI 396
Extenuation of period of Limitation - Period for reopening of an assessment was already expired - effect of amendment - Section 25(1) of the KVAT Act - Held that:- The issue is covered by the decision in the case of THE COMMERCIAL TAX OFFICER, ANCHAL, KOLLAM, THE INTELLIGENCE OFFICER (IB) , COMMERCIAL TAXES, KOLLAM AND THE DEPUTY TAHSILDAR, REVENUE RECOVERY, TALUK OFFICE, VARKALA, THIRUVANANTHAPURAM VERSUS S. NAJEEM AND S. SAJEEV [2018 (8) TMI 1160 - KERALA HIGH COURT], where it was held that The amendment by substitution in the present case, extending the period of limitation from 5 years to 6 years to be not applicable to those assessments which stood completed and the 5 year period for re-opening of assessment under Section 25(1) stood expired - petition disposed off.
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2019 (2) TMI 395
Quantum of pre-deposit - petitioner has filed this Review Petition contending that the condition in Ext.P9 order of the appellate authority is more onerous than what has been statutorily mandated under the proviso to Section 55(4) of the KVAT Act - Held that:- The petitioner is liable to pay 20% of the disputed tax - the petitioner must pay ₹ 2,93,81,208/-(20%) in six instalments - review petition disposed off.
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2019 (2) TMI 394
Cancellation of registration of the petitioner - TNVAT Act, 2006 - principles of natural justice - Held that:- Perusal of the cancellation clarification notice dated 12.06.2017 would clearly indicate that the petitioner was given 15 days time to make his reply with regard to the business activity being carried on in the premises. Therefore, it is evident that the time granted therein, expires only on 27.01.2017, however, an order of cancellation was issued on 23.06.2017, which means that the respondent has chosen to pass the order without even waiting for the petitioner to make his reply. This Court finds that the impugned cancellation of registration was passed in violation of principles of natural justice - this Court is inclined to set aside the impugned cancellation order - petition allowed.
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Indian Laws
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2019 (2) TMI 393
Dishonor of Cheque - cheque bearing the signature of petitioner - liability of petitioner to make the payment - case of petitioner is that the petitioner was not a Director at the time of issuance/ signing of the cheque and the same was without consideration, therefore, he is not liable to make the payment or even to be summoned in the matter - whether the Trial Court was justified or not in issuing summons to the petitioner vide the impugned order dated 17.11.2014? Held that:- It is a well settled law that the Trial Court is only expected to consider the prima facie case at this stage to proceed against the accused and not whether the case would result in conviction - It needs no elaboration that at this stage the Court is required to evaluate the material and documents which have been placed on record by the petitioner and taken at the face value thereof, whether existence of the ingredients constituting the alleged offence or offences are prima-facie disclosed or not. The cheque clearly bears the signature of the petitioner. The contentions raised by the learned counsel for the petitioner that the petitioner was not a Director at the time of signing of the cheque or the same is without consideration cannot be evaluated, appreciated or decided at this stage which requires recording of the oral and documentary evidence which can be recorded only in accordance with law at the appropriate stage. Section 58(4) of The Limited Liability Partnership Act, 2008 makes it clear that there was no ground made out for the Trial Court to discharge the petitioner from the present case at that stage and the Trial Court was right in holding that sufficient material is on record to frame notice against the petitioner - petition dismissed - decided against petitioner.
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2019 (2) TMI 392
Dishonor of Cheque - Examination of handwriting contained in the impugned cheque - Section 45 of the Evidence Act - relief granted of getting the age of handwriting of impugned cheques examined by some handwriting expert, even when the petitioner therein (respondent herein) have not prayed or requested for the same - Held that:- the accused/respondent has taken a defence that he has never issued any cheques in favour of the petitioner, some of his cheques were stolen by someone and amounts of the cheques is filled by forging them. In such situation, the learned Revisional Court has rightly held that in view of the presumption available in favour of the complainant, the accused/respondent should be granted an opportunity to rebut that presumption. Reliance placed on the judgment of Hon'ble Supreme Court passed in the case of T. Nagappa Vs. Y. R. Muralidhar [2008 (4) TMI 789 - SUPREME COURT OF INDIA], where the court being the master of the proceedings must determine as to whether the application filed by the accused in terms of sub-section (2) of Section 243 of the Code is bona fide or not or whether thereby he intends to bring on record a relevant material. The Revisional Court has rightly granted the relief to the respondents - petition dismissed - decided against petitioner.
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