Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 13, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Companies Law
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File No. 1 /1 /2018-CL.I - dated
9-2-2018
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Co. Law
Central Government appoints the 09 February, 2018 as the date on which the provisions of the Companies (Amendment) Act, 2017 shall come into force
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F.No.1/27/2013-CL-V(Part) - dated
9-2-2018
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Co. Law
Companies (Registered Valuers and Valuation) Amendment Rules, 2018
GST - States
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CT/LEG/GST-NT/12/17/1743-002/2018 - dated
9-2-2018
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Nagaland SGST
Notifies 1st June, 2018 as the date for Intra-State e-Waybill
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CT/LEG/GST-NT/12/17/1692-001/2018 - dated
25-1-2018
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Nagaland SGST
Extension of time on FORM GSTR-6 by an ISD.
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FIN/REV-3/GST/1/08 (Pt-1)/017 - dated
1-1-2018
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Nagaland SGST
Amend Notification (F.NO.FIN/REV-3/GST/I/08 (Pt-I) “C”,30th June,2017) on Rate of tax under Composition Scheme for Manufactures and other Supplies.
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FIN/REV-3/GST/1/08(Pt-1)/020 - dated
29-12-2017
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Nagaland SGST
Waives late fee for failure to furnish Return in FORM GSTR-4.
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FIN/REV-3/GST/1/08(Pt-1)/019 - dated
29-12-2017
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Nagaland SGST
Notifies date for e-Way Bill shall come into force.
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FIN/REV-3/GST/1/08(Pt-1)/018 - dated
29-12-2017
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Nagaland SGST
Extends time for quarterly return (Upto 1.5 crore turnover ) in FORM GSTR-1
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CT/LEG/GST-NT/12/17/1922-032/2017 - dated
29-12-2017
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Nagaland SGST
Extension of time in FORM GSTR-1 (Turnover more than 1.5 crore)
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CT/LEG/GST-NT/12/17/1921-031/2017 - dated
21-12-2017
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Nagaland SGST
Extension of time in FORM GSTR-5A.
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CT/LEG/GST-NT/12/17/1920-030/2017 - dated
21-12-2017
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Nagaland SGST
Extension of time in FORM GSTR-5.
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CT/LEG/GST-NT/12/17/1919-029/2017 - dated
21-12-2017
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Nagaland SGST
Extension of time in FORM GST ITC-01
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FIN/REV-3/GST/1/08 (Pt-1)/102 - dated
28-11-2017
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Nagaland SGST
Amend NT No.12_2017 CT(R) extend exemption to admission to protected monuments (Amendment in F.NO.FIN/REV3/GST/1/(Pt-1) “O”,30th June,2017)
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38439-FIN-CT1-TAX-0043/2017- S.R.O. No. 776/2017 - dated
30-12-2017
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Orissa SGST
Notification on waiver of late fee payable U/s 47 of the OGST Act,2017 for failure to furnish return (quarterly) in FORM GSTR-4 by the registered persons opting for composition levy which is in excess of ₹ 25/- per each day of default.
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37917-FIN-CT1-TAX-0034/2017- S.R.O. No. 741/2017 - dated
22-12-2017
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Orissa SGST
The Odisha Goods and Services Tax (Eleventh Amendment) Rules, 2017.
IBC
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No. 30/14/2017 - dated
6-2-2018
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IBC
Corrigendum to Order of constitution of Insolvency Law Committee
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Clarifications regarding GST in respect of certain services - TRU clarified 6 vital issues.
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Seizure of goods - Section 129(1) of the UP GST - Even if the seizure is treated to be under Section 129(1) of the Central G.S.T., as there was no provision of E-Way bill on the relevant date under the Central G.S.T. prima facie the seizure appears to be illegal. - HC
Income Tax
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Reopening of assessment - Validity of reasons to believe - reopening of the assessment cannot be held for a fishing or a roving inquiry or for verification of the records. - HC
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Nature of income - Though the assessee has financial service as an ancillary object to its main object, such activity is not the main business activity of the assessee - AO was right in treating interest income under the head ‘Income from other sources’ - AT
Customs
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Misdeclaration - Import of restricted item - When the goods are allowed for re-export, there should not be any redemption fine because redemption fine is for enjoyment of the goods in the manner of home consumption even when a law is violated. - AT
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Absolute confiscation - import of one consignment of ‘off the road tyres’ and ‘run flat tyres’ - the appellant is willing to put the symbol on tyres before clearance - If symbol is put on tyres, the registration with BIS is not required, in that circumstances, the goods can not be confiscated. - AT
Central Excise
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CENVAT credit - Compensation received by the appellant for supplying inferior quality of ink - The compensation is a regular activity and this was an income of the appellant which was to be added to the value of the goods - credit to be reversed - AT
Case Laws:
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GST
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2018 (2) TMI 663
Seizure of goods - Section 129(1) of the U.P. Goods and Services Tax Act, 2017 - submission is that as admittedly the seized goods were in transit from outside the State the transaction would be covered by the Integrated Goods and Services Tax Act, 2017 (I.G.S.T.) read with Central G.S.T. - Held that: - The provisions of U.P.G.S.T. are applicable to transactions within the State of U.P. whereas I.G.S.T. covers the interstate transactions. Even if the seizure is treated to be under Section 129(1) of the Central G.S.T., as there was no provision of E-Way bill on the relevant date under the Central G.S.T. prima facie the seizure appears to be illegal. As the goods seized are said to be perishable nature the same are directed to be released along with vehicle subject to the petitioner furnishing indemnity bond and security - petition allowed.
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Income Tax
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2018 (2) TMI 677
Reopening of assessment - aggregate fair market value of the said shares to the extent it exceeds the consideration requires to be taxed as deemed income of the assessee under the head income from other sources under Section 56(1) - Held that:- The issue to be decided in the instant case are not pure questions of law, but requires in-depth consideration of the factual position and then apply the legal principles. The assessment having been completed in the names of the petitioner firm and protectively against the partners, they have to necessarily avail the appeal remedy available to them under the provisions of the Act. This is more so because the petitioners have not been able to establish that the appellate remedy is not efficacious, nor the petitioners were able to convince the Court that their cases fall within the well-defined exceptions which have been drawn as to when jurisdiction under Article 226 of the Constitution could be exercised. For the above reasons, Writ Petitions are dismissed as not maintainable, as the petitioners have an effective alternate remedy of appeal before the Appellate Authority, leaving it open to the petitioners to avail the appellate remedy
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2018 (2) TMI 676
Reopening of assessment - booking of losses through NMCE platform operating through the proper M/s. R. P. Jambuwala - Held that:- There is nothing on the record that the said sum of ₹ 16.51 lacs was a loss claimed by the assessee. In fact, the balance sheet would show that the said figure was the assessee's receipt through sales. If the case of the Revenue was that after showing the sale of the commodities at ₹ 16.51 lacs, the assessee had claimed artificial losses. No such ground has come on record in the reasons recorded. The Revenue is bound by the reasons recorded by the Assessing Officer for reopening assessment which reasons are shown to be palpably incorrect. On the basis of the reasons recorded, it would not be possible to allow the Revenue to carry out fresh assessment. Facts are similar in all cases. Respective impugned notices are set aside. - Decided in favour of assessee
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2018 (2) TMI 675
Reopening of assessment - unaccounted sales - sales of manufactured goods to specific party was found bogus - eligibility of reasons to believe - Held that:- From the statement of the Director, it can be culled out that the finished goods manufactured by the assessee stated to have been sold to M/s H K Impex Pvt. Ltd would first reach the premises of M/s. H. K Impex Pvt. Ltd., Umbergaon from where under the instructions of the recipient the same would be diverted to Vasai or Bhayandar without disclosure to the Excise Authorities. This later portion of the movement of the goods may be unauthorized and may have either Central Excise or the Sales Tax evasion angle. Nevertheless, this factum would not establish that there was no sale of the goods made by the assessee, as claimed in the reasons recorded. At any rate, no such fact emerges from the statement of the Director of the company contrary to what the reasons record. - Decided against assessee.
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2018 (2) TMI 674
Reopening of assessment - Validity of reasons to believe - Held that:- Requirement of reason to believe would apply even in a case where the reopening of assessment is being resorted to where previously no scrutiny assessment was framed. In the context of such requirement of reason to believe, on number of occasions, this Court has held and declared that reopening of the assessment cannot be held for a fishing or a roving inquiry or for verification of the records. If one reverts back to the reasons recorded by the Assessing Officer for reopening the assessment, all that he has stated that the records suggest that the assessee has entered into sale transaction of the property of ₹ 40,00,000/and the sale transaction entered into by the assessee is required to be verified. In the result, impugned notice dated 27.03.2017 is set aside. Petition is allowed
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2018 (2) TMI 673
Proceedings u/s 158BC - recording satisfaction after completion of proceedings - inordinate delay in recording satisfaction - period of limitation - block assessment - Held that:- Even going by the judgment of the Supreme Court in the case of Calcutta Knitwears [2014 (4) TMI 33 - SUPREME COURT] that satisfaction note can be recorded after completion of the proceedings under Section 158BC the same must be done immediately thereafter. The Supreme Court in the said judgment had noted that there is no embargo in the law for recording satisfaction after completion of proceedings under Section 158BC of the Act. Further noticed that Section 158BE [2] (b) only provides for limitation for completion of block assessment under Section 158BD which is two years from the end of the month in which the notice for such purpose was served on such person, who happen to be other than the searched person. It was in this background the Supreme Court had culled out the ratio, as reproduced in para 44 of the judgment. Thus, even if such satisfaction note were to be recorded after completion of the proceedings under Section 158BC, the same has to be done immediately thereafter. The term 'immediately' has not been defined nor is it possible to quantify it in absolute terms. In any case, period close to nine months for completion of the proceedings under Section 158BC of the Act, without there being any limiting factor on the Assessing Officer to have recorded satisfaction earlier, cannot be stated to be an immediate action. See Commissioner of Income-Tax v. Bharat Bhushan Jain [2015 (1) TMI 705 - DELHI HIGH COURT] - Decided against revenue
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2018 (2) TMI 672
Penalty u/s 271(1)(c) - concealment of income and for furnishing inaccurate particulars of income - disclosure of the capital gain tax - order of penalty passed by the AO came to be set aside by the Commissioner in exercise of his revisional powers under section 264 - Held that:- In terms of clause (a) of subsection (4) of section 264, revisional powers would not be exercised, inter alia, in a case where the period of limitation for filing appeal has not expired and the assessee has not waived the right of appeal. This is essentially to ensure that at the hands of the same assessee a single issue does not receive consideration at the hands of two separate and independent authorities, one exercising appellate jurisdiction and the other revisional jurisdiction. We find that the assessee had clearly made a choice to persuade the Commissioner of Income Tax to exercise his revisional powers under section 264 and not pursue his appeal before the Appellate Commissioner. The revisional authority therefore correctly proceeded to decide the revision petition of the assessee and on facts correctly allowed the same. This later observation needs no elaboration since the order of the Commissioner is self explanatory and eloquent. The assessee had made full disclosure of the capital gain tax and there was no failure on his part to give necessary details thereof.
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2018 (2) TMI 671
Penalty u/s.271C - proof of existence of reasonable cause - assessee company had failed to deduct tax at source and also failed to pay the amount of TDS to the credit of the Government account within the specified time - Held that:- Both, the Commissioner (Appeals) as well as the Tribunal have concurrently found that the assessee had submitted an explanation for the delay in deduction of tax at source and in late deposit of such tax, which explanation was found to be reasonable. Section 273B of the Act, inter alia, provides that notwithstanding anything contained in the provisions of section 271C of the Act, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if it is proved that there was reasonable cause for the said failure. In the facts of the present case, the Tribunal having recorded a concurrent finding of fact to the effect that the assessee has proved that there was reasonable cause for failure in deducting tax at source and delay in making payment to the Government account, was wholly justified upholding the action of the Commissioner (Appeals) of invoking the provisions of section 273B of the Act and deleting the penalty. - Decided in favour of assessee
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2018 (2) TMI 670
Restricting the deduction under section 54 - actual consideration for the new house property determination - purchase within specified time limit under section 54 - what is the cost of the new residential house so purchased by the assessee at C 6 Anandvan Complex - Held that:- The arrangements for separate purchase of furniture and fixtures were indeed artificial, but the remedy did not lie in declining deduction under section 54 to the buyer to that extent. The remedy was in bringing the right amount of capital gains to tax by ignoring the nomenclature of sale of personal effects, specifically excluded under section 2(14)(ii) from the definition of capital assets, as sale of residential property. That, however, was not done. It could not have been open to the authorities below to treat the payment of ₹ 18,00,000 on account of furniture and fixtures on standalone basis, and thus exclude it as a separate item rather than as a “cost of the residential house so purchased”. In our considered view, therefore, the assessee is entitled to deduction under section 54F by treating entire amount of ₹ 78,00,000 as the “cost of the residential house” purchased within specified time limit under section 54. Here is an NRI who decided to sell a fairly spacious house in his hometown, and yet, to keep his India connection alive, invested a part of these sale proceeds in a smaller residential unit, but he has been declined the legitimate deduction under section 54 in respect of the same, only for the reason, as the circumstances suggest, that he is made an unwilling party to artificially splitting of sale consideration to minimise the capital gains burden of the seller. Leaving even this aspect of the matter aside, quite clearly the sale of furniture and fixtures was an integral part of the deal of buying the house property. Whichever we way look at it thus, the assessee was wronged in partial denial of deduction. Now that the facts on record demonstrate that the actual consideration for the new house property was ₹ 78,00,000, he is being sought to be declined resultant relief on the ground that this particular plea was not taken earlier. That is certainly not a fair treatment to an assessee. What matters really is that whether the assessee deserves the relief on merits or not, and when the assessee deserves the relief on merits, such technicalities should not be allowed to come in the way of justice to the assessees. We are, therefore, not inclined to uphold the technical objection raised by the learned Departmental Representative. We uphold the grievance of the assessee, and, accordingly, direct the Assessing Officer to delete the disallowance of deduction under section 54 to the extent of ₹ 18,00,000. The assessee will get the relief accordingly. - Decided in favour of assessee
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2018 (2) TMI 669
Penalty u/s 271(1)(c) - AO disallowed and added the depreciation and insurance expenses to the total income of the assessee - defective notice - Held that:- The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. - Decided in favour of assessee
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2018 (2) TMI 668
Disallowance towards lodging, fooding and travelling expenditure and other expenses - Held that:- The assessee came to India to complete the sale transaction of the said ancestral property. During the sale transaction, the assessee stayed in India and incurred other expenses of ₹ 3 lakhs towards airfare, fooding & lodging expenses. We find that the assessee did not produce any documentary evidence either before the AO or the CIT-A in support of the claim of towards lodging, fooding and travelling expenditure incurred by the assessee during the said transaction. However, the CIT-A considering the submissions of assessee has restricted the same to ₹ 1.50 lakhs i.e. 50% of ₹ 3 lakhs under the head ‘other expenses’. It is quite, reasonable and justified in the facts and circumstances of the case. Therefore, our interference is uncalled for on this issue. We uphold the order of the CIT-A in restricting the same on this issue. Therefore, the ground no. 1 relating to other expenses is dismissed. Addition towards claim of exemption u/s. 54EC - Held that:- Section 54EC mandates that investment in specified bonds to be made within prescribed time by the assessee either out of sale proceeds of capital asset or out of any other means. In the present case, admittedly the assessee had not made any investments in the specified bonds as per provisions of section 54EC of the Act, which has rightly been denied by the AO and confirmed by the CIT-A. In view of aforesaid discussion, we hold that since no amount was invested in the specified bonds mandated u/s. 54EC of the Act, the lower authorities have rightly rejected the claim of assessee in this regard. - Decided against assessee.
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2018 (2) TMI 667
Deemed dividend u/s 2(22)(e) - Held that:- A perusal of the material available on record shows that the assessee is challenging the addition made by the Assessing Officer on account of addition u/s 2(22)(e). The assessee before the Assessing Officer had made a submission that the amount of ₹ 12,00,000/- received from Saamag Infrastructure Ltd. as advance was in the normal course of business. Now, it is the submission of the assessee that the amount of ₹ 12,00,000/- was received from Saamag Infrastructure Ltd. which, in turn, had received the amount from M/s Zenith Township Pvt. Ltd. and from the said amount, the amount was given to the assessee and, therefore, the provisions of section 2(22)(e) are not applicable. Since this plea is being taken for the first time before the Tribunal, 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 ld. CIT(A) with a direction to adjudicate the issue afresh and in accordance with law after giving due opportunity of being heard to the assessee. There is nothing in the Income-tax Act which restricts the Tribunal to the determination of questions raised before the departmental authorities. All questions, whether of law or of facts, which relate to the assessment of the assessee may be raised before the Tribunal. If for reasons recorded by the departmental authorities in respect of a contention raised by the assessee, grant of relief to him on another ground is justified, it would be open to the departmental authorities and the Tribunal, and indeed they would be under a duty, to grant that relief. The right of the assessee to relief is not restricted to the plea raised by him - matter is restored to the file of the ld. CIT(A) for adjudication of the issue afresh as directed earlier.
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2018 (2) TMI 666
Miscellaneous application being barred by limitation - provision of condonation of delay u/s 254(2) - Held that:- In view of the facts and circumstances of the case when the miscellaneous application is barred by limitation and following the earlier order of this Tribunal in case of ITO vs. Shri Ram Ratan Modi [2018 (2) TMI 589 - ITAT JAIPUR) we dismissed the miscellaneous application as not maintainable being barred by limitation.
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2018 (2) TMI 665
Nature of income - Treatment to interest income - busniss income or income from other sources - Held that:- we find that the assessee was engaged in the business of manufacturing of fragrance and flavours. During the year, the assessee has discontinued its business operations. The assessee has earned interest income from inter corporate deposits and treated the same as other income in its financial statements - No merit in the arguments of the assessee for the reason that all along the assessee has treated interest income under the head ‘Income from other sources’ and without any change in material facts, the same has been brought under the head ‘Income from business’ without any justification - the assessee itself has treated interest income as ‘other income’ in its financial statements which clearly implies that the same is not from its business operations. Though the assessee claims that its activity is in accordance with its object clause in memorandum of association, on perusal of the memorandum of association we find that the assessee’s main object is to manufacture fragrance and flavours. Though the assessee has financial service as an ancillary object to its main object, such activity is not the main business activity of the assessee. Therefore, there is no justification for treating interest income under the head ‘Income from business’. AO was right in treating interest income under the head ‘Income from other sources’. Disallowance of expenditure claimed against interest income - Held that:- We do not find any merit in the findings of the AO for the reason that whether the assessee has income under the head ‘business’or not, expenditure incurred to maintain the corporate status of the assessee needs to be allowed. In this case, on perusal of the details of expenditure we find that the assessee has incurred office rent, auditor’s remuneration and other small miscellaneous expenses which are mainly incurred to keep the corporate status of the assessee. Therefore, we are of the considered view that the AO was erred in disallowing expenditure incurred by the assessee. We direct the AO to allow expenditure claimed by the assessee u/s 37(1) of the Income-tax Act, 1961. Allowability of bad debts written off - Held that:- Hon’ble Supreme Court in the case of TRF Ltd vs CIT (2010 (2) TMI 211 - SUPREME COURT ) has held that once bad debt is written off in the books of account, then the assessee is not required to prove whether debt has really become bad or not; but the facts are not clear. The assessee has taken this plea by way of additional ground before the Tribunal for the first time. The AO did not have an occasion to examine the claim of the assessee in the light of provisions of section 36(1)(vii) and the decision of Hon’ble Supreme Court in the case of TRF Ltd vs CIT(supra). Therefore, we are of the considered view that the issue needs to be examined by the AO.
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2018 (2) TMI 664
Accrual of interest on FDRs - interest credited on Infrastructure Development Fund Account maintained by the assessee and considering by it as capital receipt in the books of account as being not offered for taxation - Held that:- As relying on assessee's own case [2015 (6) TMI 1151 - ITAT AGRA] the interest in question cannot be treated as income of the assessee, therefore, the grievance of the assessee is accepted and as such allowed. The grounds of the Department’s appeal is found without merits and substance and hence, dismissed.
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Customs
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2018 (2) TMI 662
Absolute confiscation - import of one consignment of ‘off the road tyres’ and ‘run flat tyres’ - seizure - It was found that the run flat tyres were not in conformity with the requirement of Board’s Instruction dated 30.01.2012 inasmuch as the said tyres were required to carry a security symbol with them - Held that: - it is not disputed that the tyres in question having the embossed mark as RF which represent run flat tyre - the appellant is willing to put the symbol on tyres before clearance. The appellant shall put the symbol on tyres . If symbol is put on tyres, the registration with BIS is not required, in that circumstances, the goods can not be confiscated. Therefore, the appellant is directed to put the symbol as required as per instruction dated 30.1.12, before clearance of the goods. After doing the needful, the adjusting authority shall reconsider the issue of release of goods and thereafter pass an appropriate order - appeal allowed by way of remand.
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2018 (2) TMI 661
Rectification of Mistake - error in the first para of the order No. A/89803/17/SMB dt.1.9.2017 that there a mention “Thirteen (13) years have passed. But no re-adjudication order has been passed” - Held that: - the case was made out in the year 2001 therefore even more than 13 years have passed facing the litigation by the appellant. Accordingly, we do not find any error in the order of this Tribunal dt. 1.9.2017 - ROM application dismissed.
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2018 (2) TMI 660
Status of applicant - functus officio - rule 28C, read with rule 28A, of the Customs Excise Service Tax Appellate Tribunal (Procedure) Rules, 1982 - Held that: - applicant is not a respondent on record and that, as adjudicating author of the order impugned before us, he is functus officio. The adjudicating authority has no existence with the closure of proceedings initiated in a show cause notice and, deprived of the faculty of initiative, is thereafter a mindless slave to directions of designated authorities empowered under Customs Act, 1962. The present applications are beyond the scope of empowerment under the statute and are liable to dismissed on that ground alone. Here we have an applicant without locus standii, who chooses neither to appear in person or be properly represented, who has demonstrably established his ignorance of records that he wants expunged and who has, with total disregard of Customs Act, 1962, of the rules of procedure and of code of decorous conduct, sought remedies that are not available to right wrongs that are imagined. The applications are devoid of merit and are dismissed.
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2018 (2) TMI 659
Condonation of delay - Held that: - there no deliberate delay or lapse on the part of the appellant in pursuing their appeal before this Tribunal. We further notice that this matter relates to licence of the appellant and there is no implication of revenue in this appeal - application for condonation of delay allowed. Rejection of the representation which was made with respect to the order dated 26th November 2015 passed by the Commissioner deregistering them under the Courier Import and Exports (Clearance) Regulation, 1998 - Held that: - As the main appeal against the order of deregistration being appeal No. C/87576/16 has been admitted for hearing by this Tribunal, the appellant does not want to press this appeal and the same is disposed of as withdrawn - application disposed off.
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2018 (2) TMI 658
Restoration of appeal - case of appellant is that there is no deliberate default on their part and accordingly the ex-parte order may be recalled and the appeal be restored - Held that: - the appellant was diligently pursuing the appeal and it was only due to difficulty beyond their control, they could not appear on 22.5.2017 - the order dated 22.5.2017 recalled and appeal restored to its original number - application for ROA allowed.
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2018 (2) TMI 657
Misdeclaration - Import of restricted item - Copper Wire Scrap with PVC sheathing of Druid grade - main contention of the department is that the imported goods have been misdeclared as copper scrap, lead scrap and insulated material whereas they are actually Copper Wire Scrap with PVC sheathing of Druid grade" which can be imported without a license only by the units registered with the Ministry of Environment and Forests but the importer herein does not possess such license. Held that: - While the imported goods were in fact copper wire scrap only, even as per the commercial invoice, pre-shipment inspection certificate etc. and Form-9 submitted under Rule 16 (5) of the Hazardous Wastes Rules, the declaration of the goods in the Bill of Entry as copper waste scrap, lead scrap and insulation material separately has not helped their case with the department. Very possibly, the appellant had made such a declaration taking into account that the percentage of copper in the imported goods was 41%, lead 37% and plastic and ferrous 22% as per the transboundary movement documents and load port certificate. When the goods are allowed for re-export, there should not be any redemption fine because redemption fine is for enjoyment of the goods in the manner of home consumption even when a law is violated. Redemption fine in a way redeems the violation committed by the importer and paves the way for unencumbered enjoyment of the imported goods thereafter. However, this is not a case where the goods have been cleared for home consumption - redemption fine is an overkill and is to be set aside. Penalty u/s 112 (a) of the CA 1962 - Held that: - Lalkamal, the High sea buyer, M/s.Sterling Steels, the original importer will surely require a rap on the knuckles at least for the wrong declaration in the Bill of Entry. However, the penalties imposed on these persons under Section 112 (a) of the Customs Act, 1962 of ₹ 2 lakhs each is excessive and interest of justice would be served by reducing the penalties on them to ₹ 1,00,000/- (Rupees one lakh only). Penalty on Vimal Kumar, Asif Rehman, proprietors of Sri Lalkamal Enterprises and Sterling Steels respectively - Held that: - penalties cannot be sustained since they are proprietors - it is settled law that both proprietor and the proprietaryship firm cannot be penalized in such matters. Hence penalties imposed on these persons are set aside. Appellant Shri Abdul Saleem has been indicated as friend of Shri Asif Rehman, Proprietor of Sterling Steel who had allegedly arranged import consignment from Qatar - the said appellant was only in the nature of a broker or agent who brought sellers and buyers together and it would be unfair to penalize him. The penalty imposed on him is also therefore set aside. Appeal allowed in part.
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2018 (2) TMI 656
Monetary limit involved in appeal - Held that: - As per the Board’s Circular F.No.390/Misc./163/2010-JC dated 17/8/2011 as amended by Circular F. No. 390/Misc./163/2010-JC dated 17.12.2015 on Government’s litigation, the Revenue is barred from filing appeal before this Tribunal, if the amount of duty or penalty or interest involved is not in excess ₹ 10 lacs unless the case involves classification, refund, or a matter of legal and recurring nature. The amount involved in this case is not in excess of ₹ 10 lakhs - the appeal is dismissed as per the above referred Government’s litigation policy.
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2018 (2) TMI 655
Levy of duty - liquid bulk inputs - whether on the quality landed in India or the quality declared in the documents of inputs as loaded on the vessel? - Held that: - identical issue decided in the case of Mangalore Refinery And Petrochemicals Ltd. Versus Commissioner of Customs, Mangalore [2015 (9) TMI 245 - SUPREME COURT], where it was held that a demand or duty on transaction value would be leviable in spite of ocean loss, it flies in the face of Section 23 of the Customs Act in particular, the general statutory scheme and Rules 4 and 9 of the Customs Valuation Rules. Valuation - includibility - charges that are recovered from the vessel after the arrival of goods at the Indian port - Held that: - the issue decided in the case of C.C.E., Mangalore Versus Mangalore Refinery & Petrochemicals Ltd. [2016 (1) TMI 325 - SUPREME COURT], where it was held that The demurrage charges are admittedly incurred after the goods reached at Indian ports and, therefore, it is a post-importation event. Such charges, therefore, cannot form part of the transaction value. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 654
Amendment in shipping bills - conversion of shipping bills under drawback scheme into DEEC scheme - Held that: - Only when proper documents claiming DEEC benefits are filed at the time of export that facilitates to scrutiny by Customs. But due to failure of the appellant to file such documents at the time of export, amendment of the shipping bills under Section 149 of the Customs Act, 1962 became difficult without good reason stated by appellant. The appellant has no right to cause prejudice to other side by a belated claim. Appeal dismissed.
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2018 (2) TMI 653
Duty Drawback - N/N. 43/2001-C.E. (N.T.), dated 26-6-2001 under Rule 19(2) of Central Excise Rules, 2002 - the applicant were procuring raw materials on payments of Excise duty for the manufacture of printed Diaries, Ruled/ Un-ruled/ Printed Exercise books, Single/Multi-coloured printed books and printed colouring books, etc., for which they had availed higher rate of Duty drawback as they were not availing the CENVAT credit - Penalty. Held that: - It was noticed by the officers that the applicant had procured duty free raw materials, availing the provision of Notification No. 43/2001-C.E. (N.T.), dated 26-6-2001 under Rule 19(2) of Central Excise Rules, 2002 and used the same in the manufacture of printed books and colouring books which were subsequently exported under Duty Drawback Scheme claiming higher rate of drawback, i.e., Customs, Central Excise and Service Tax components put together instead of eligible Customs portion of drawback and in certain cases have availed both Central Excise and Customs portion of drawback for the Cenvat availed goods for the period from 2011-12 (Oct, 2011) to 2015-16. The applicant has made true and full disclosure of the liability before the Bench and also co-operated in the proceedings before the Bench and investigations conducted. The Bench thus holds it a fit case to settle the ineligible duty drawback at ₹ 20,01,721/- and the interest thereon at ₹ 3,66,965/-. Applicability of provisions of Section 113 of the Customs Act, 1962 - Held that: - The’ physical availability of the goods is necessary only for ordering confiscation which is different from holding the goods liable for confiscation. However in the instant case, Bench is not going into the question of confiscation of the exports made. It is a settled law that the goods can be held liable for confiscation if the commission or/omission of the importer or exporter have rendered the goods liable for confiscation. Demand of interest - Held that: - The interest liability is settled at ₹ 3,66,965/-. As the applicant has already paid the said amount as confirmed by the Revenue, the same is appropriated and adjusted towards the interest liability and no further liability subsists in this regard. This case does not warrant imposition of Fine or Penalty on the applicant, M/s. Lovely Offset Printers, Sivakasi. Application settled u/s 127(5) of the Customs Act, 1962.
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Corporate Laws
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2018 (2) TMI 652
Symbolic possession of the premises by OL - removal of seal and notice pasted on the premises - Held that:- As stated by the Official Liquidator and as submitted by the learned advocate Mr.Acharya for the Official Liquidator, when the company in liquidation does not claim ownership of the premises, the Official Liquidator shall be required to remove the seal and the notice pasted on the premises for taking symbolic possession of the premises. The Official Liquidator is, therefore, directed to remove the seal placed on the lock and notice pasted on the main door of the premises for taking symbolic possession of the premises within a period of ten days from today. On removal of such seal and notice pasted on the premises, the premises shall not be treated to be in custody of this Court.
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Service Tax
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2018 (2) TMI 650
Renting of Immovable Property Service - vires of levy of service tax under the category of Renting of Immovable Property Service - Held that: - As per the rent deed agreement, M/s. Vishal Retail Limited was required to pay service tax on the renting of immovable property service, if so payable - The said levy of service tax has been held ultra-vires by the Hon’ble High Court of Delhi in the case of Home Solution Retail India Limited Vs. UOI [2009 (4) TMI 14 - DELHI HIGH COURT] wherein M/s. Vishal Retail Limited was also one of the petitioners. Therefore, the appellant was under the bonafide belief that as the vires of levy of service tax has been challenged and the same has been held as ultra-vires, it cannot be alleged against the appellant that they have not paid the service tax with malafide intention for the part of property let-out to M/s. Vishal Retail Limited. Extended period of limitation - Held that: - nowhere it is coming out from the records that when the investigation was conducted by DGCEI against M/s. Vishal Retail Limited or against the appellant. In that circumstances, the benefit of doubt goes to the appellant therefore, the extended period of limitation is not invokable. Penalty - Held that: - there is no malafide intention for not paying the service tax on the premise let-out to M/s. Vishal Retail Limited therefore, no penalty is imposable on the appellant. Appeal allowed in part.
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2018 (2) TMI 649
Condonation of delay of 10 days in filing appeal - Maintainability of appeal - Held that: - Section 85 (3A) of Finance Act, 1994 says that the appeal is to be filed before the ld. Commissioner (Appeals) within 60 days of communication of the adjudication order and the said period can be further extended by another 30 days if the reasons for causing delay is explained satisfactorily. The reasons for causing delay have been explained by the appellant that the Consultant dealing the case, was in difficulty as his mother was in hospital and he was looking after her. In that circumstances, the appellant has explained the reasons for causing the delay of 10 days satisfactorily - the delay in filing the appeal before the ld. Commissioner (Appeals) is condoned. The matter is consigned to the ld. Commissioner (Appeals) to decide the issue on merits - appeal allowed by way of remand.
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2018 (2) TMI 648
Business Auxiliary Services - software of computer reservation system provided by Gallilieo - Held that: - similar issue decided in the case of D. Pauls Consumer Benefit Ltd. Versus CCE, New Delhi [2017 (3) TMI 1019 - CESTAT NEW DELHI], where it was held that They are by using these GDS/CRS for booking tickets, receiving incentives from the said companies for every segment booked by them. Hence, the service provided by the assessee-Appellants has rightly been covered under the heading Business Auxiliary Service as defined u/s 65(19) of the FA, 1994 - the demand be restricted to normal period limitation and no penalty is imposable on the Appellants. Matter remanded to the adjudicating authority to compute the demand- appeal allowed by way of remand.
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2018 (2) TMI 647
Construction of Residential and Commercial Complexes - Composite Work Contract service - Held that: - In the case of B.L. Mehta Construction Pvt. Limited Vs. CCE, Chandigarh [2017 (8) TMI 520 - CESTAT CHANDIGARH], identical matter came before this Tribunal, where Tribunal has already held that as the construction of said flats is for personal use, therefore, no demand of service tax is not sustainable - demand of service tax is not sustainable against the appellant - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 646
Liability of service tax - discounts/commissions/incentives from various Print Medias - Advertisement Agency Service - Held that: - Discount given by the Print Media are not related to the gross amounts received from the service recipient and as such cannot be held to be taxable - reliance placed in the case of Mccan Erickson (India) Pvt. Ltd. vs. Commissioner of Service Tax, Delhi [2008 (1) TMI 137 - CESTAT NEW DELHI] - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 645
Sale of rights and privilege of export of sugar - levy of service tax - Held that: - the transaction in question regarding sale of rights and privilege of export of sugar quota is sale of goods and no service is involved - appeal allowed.
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Central Excise
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2018 (2) TMI 644
Restoration of appeal - appeal disposed of ex parte vide final order dated 30.5.2017, order No. A/87923/17/EB - Held that: - the appellant has been prevented by sufficient cause for their non-appearance on the date fixed on 30.5.2017 when the appeal was decided ex parte - In the interest of justice, application for restoration allowed and appeal restored.
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2018 (2) TMI 643
Restoration of appeal - appeal dismissed for non-compliance with pre-deposit - Held that: - the appellant M/s Gayatri Gramin Vikas Seva Sangh has already deposited 20% of the duty in dispute. Accordingly, taking the amended provision into consideration, we feel it fit and proper to modify the earlier stay order dated 27.01.2014 by modifying the amount of deposit for stay to ₹ 50,00,000/- which has already been deposited by the appellants during the course of investigation. Appeal restored to their original Nos. which were dismissed by the Tribunal vide order dated 18.06.2014 for non-compliance of the pre-deposit order - application allowed.
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2018 (2) TMI 642
Rectification of mistake - error in as much as this Bench set aside the penalty under Section 11AC whereas the Adjudicating Authority in the order impugned imposed the penalty under Rule 13 of CCR 2002 - Held that: - the penalty was imposed under Rule 13(2) and Section 11AC, Rule 13(2) and Section 11AC are parimateria, therefore even though in the Tribunal’s Order while setting aside the penalty mentioned to Section 11AC, it does not lead to any error apparent on record - no error apparent on record crept out in this Tribunal order - ROM Application dismissed.
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2018 (2) TMI 641
Prayer for extension of stay - extension sought on the ground that their appeal has not come up for disposal for no fault of theirs - Held that: - in the case of M/s. Venketeshwara Filaments Pvt. Ltd. & Ors. Vs. C.C.E. & S.T., Vapi [2014 (12) TMI 227 - CESTAT AHMEDABAD], where it was held that stay order passed by this Tribunal, if it is in force beyond 7.8.2014, it would continue till the disposal of the appeals and there is no need for filing any further applications for extension orders granting stay either fully or partially. As the stay in the present case was in force beyond 07.08.2014, the same would continue till the disposal of the appeal - application for extension of stay is disposed of.
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2018 (2) TMI 640
CENVAT credit - denial of credit to the main Appellant M/s Siddhi Ferrous on the ground that they have not received any input - penalty - principles of natural justice - Held that: - Hon’ble Punjab & Haryana High Court in the case of Jindal Drugs Pvt. Ltd. Vs. UOI [2016 (6) TMI 956 - PUNJAB & HARYANA HIGH COURT] has laid down the procedure that has not been followed in respect of the statements recorded on which the Revenue wishes to rely upon. The adjudicating authority be given a chance for extending cross-examination and to follow the provisions of Section 9D of the CEA, 1944 - the matters are remanded to the adjudicating authority to reconsider the issue afresh after following principles of Natural Justice - appeal allowed by way of remand.
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2018 (2) TMI 639
Clandestine removal - job-work - it was alleged that the Appellant had not followed the procedure as prescribed under Rule 10 of the CERT, 2002, therefore, confiscation under Rule 25 of CER, 2002 has rightly been ordered and imposition of penalty also - Held that: - it cannot be said that merely non-following of procedure laid down under Rule 10 CER, 2002 would lead to the inference that these transformers meant to be cleared without payment of duty, in absence of any other evidence and invite harsh action of confiscation of the excess stock found in the premises of the Appellant. Therefore, direction for confiscation of the excess quantity of transformers found the Appellant’s premises is set aside. Undisputedly and admittedly, the Appellants have violated the provisions of Rule 10 of CER, 2002 inasmuch as, challans were not prepared and followed other formalities in the movement of transformers. It is required that proper records has to be maintained for movement of the goods and on receipt of the same against proper documents records to be maintained at the recipient’s end. Thus, in these circumstances, imposition of penalty on the Appellant is sustainable. However, considering overall circumstances, penalty is reduced to ₹ 2,00,000/-. Appeal allowed in part.
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2018 (2) TMI 638
Demand of interest - relevant date - Section 11BB of the CEA - Held that: - CBEC has issued a Circular No.670/61/2002-CE dated 01.10.2002 wherein the specific directions were given for dealing with the issue of interest on delayed refund - it flows that if there is delay in sanctioning the refund claim then interest flows automatically and appellant is entitled for interest. There is no requirement to file a claim of interest by the appellant. It was not required by the appellant to claim interest as it flows automatically that while sanctioning refund, if same is not sanctioned within three months from the date of application of refund - appellant is entitled to claim interest after three months from the date of application for refund claim till its realisation. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 637
Valuation - includibility - whether the appellant is required to include the outward freight from the factory gate to the customer's premises when remitting the amount at 8% of the total price of the exempted price minus sales tax etc. under Rule 6(3)(b) of Cenvat Credit Rules 2004? - Held that: - identical issue has been decided by the Tribunal in the case of Koya & Co. Construction Pvt. Ltd. v. CCE [2007 (2) TMI 86 - CESTAT,BANGALORE], where it was held that charging of 8% on the transportation cost and cost of jointing, laying and commissioning cannot be justified at all in terms of Central Excise law - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 636
CENVAT credit - bill discount service - denial on the premise that the said service is falling under negative list and on this negative list service the appellant cannot avail Cenvat credit - Held that: - It is fact on record that appellant has received service on which service tax has been paid - in terms of Rule 3 of Cenvat Credit Rules, on the service, if service tax has been paid, the assessee is entitled to avail Cenvat credit. Admittedly, on the service in question the appellant has paid the service tax therefore, in terms of Rule 3 of Cenvat Credit Rules, 2004 the appellant has correctly availed Cenvat credit - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 635
Valuation - physician samples to be supplied to its principal - whether it should be covered under Section 4(1)(b) of the Central Excise Act, 1944 or under Section 4A of the Central Excise Act, 1944? - Held that: - the appellant is manufacturing some medicines on his own, and the remaining about 40 medicines are obtained on the basis of job-work. No separate assessment pertaining to the valuation of the physician sample has been made out by the lower authority as per the ratio laid down by the Tribunal in the case of ZYG Pharma Pvt. Ltd. v. Commissioner of Central Excise, Indore [2016 (12) TMI 524 - CESTAT NEW DELHI]. Matter remanded to the original authority to make out the valuation of the physician samples of the medicines manufactured by the appellant separately and the samples manufactured by the job-worker but by providing reasonable opportunity of hearing to the appellant - appeal allowed by way of remand.
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2018 (2) TMI 634
Penalty - duty paid before issuance of SCN - Held that: - it appears that duty is paid before issuing the show cause notice. Then penalty is not leviable - reliance placed in the case of Union of India v. Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] - penalty set aside - Remaining order is upheld - appeal allowed in part.
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2018 (2) TMI 633
Valuation - related party transaction - period 01/07/2002 to April 2003 - Rule 8 and Rule 9 of CENVAT Credit Rules - Held that: - The said rules are applicable only in a situation when the appellant is clearing 100% of the production to the person to whom he is related. Admittedly the appellant is not clearing the 100% of the production through related person - Rule 8 and Rule 9 of CENVAT Credit Rules are not applicable to the facts of the case - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 632
Valuation - includibility - miscellaneous income under the various components like scrap sale, drum sale to the employees - CENVAT credit - compensation received by the appellant for supplying inferior quality of ink - Held that: - the miscellaneous income was adhoc income which was generated by selling the scrap like sale of old drums and furniture, etc - appellant has also received advances from the customers which was not return during the period under consideration but remained as outstanding in the balancesheet - the said income cannot be added to the value of final products. CENVAT credit - Compensation received by the appellant for supplying inferior quality of ink - Held that: - The compensation is a regular activity and this was an income of the appellant which was to be added to the value of the goods. The Commissioner has rightly asked the appellant to reverse the credit on this amount. Appeal dismissed.
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2018 (2) TMI 631
100% EOU - fictitious firm - cancellation of registration - demand of duty - penalty - Held that: - the appellant has sold the goods without any consideration, no payment was received and no attempt was made to recover the amount. On enquiry by the department, it was found that M/s. Panorama Enterprises is a fictitious firm not holding a valid ARO - impugned order upheld - appeal dismissed - decided against appellant.
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2018 (2) TMI 630
Penalty u/s 11AC - duty with interest paid before issuance of SCN - Held that: - the appellant has deposited all duty amount along with interest before issuing the show cause notice. When it is so, than penalty is not leviable under Section 11AC - reliance placed in the case of Union of India v. Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] - appeal allowed.
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2018 (2) TMI 629
Single registration for different units - effective date - Held that: - Hon'ble Supreme Court in the case of Commissioner of Central Excise v. M.P.V. & Engineering Industries [2003 (3) TMI 107 - SUPREME COURT OF INDIA], held that the benefit of the registration is extended from the date on which the application for grant of registration was made. Thus, when the application was made from that date the appellant was entitled for the benefit of single registration. Quantification is needed to get the benefit and undertake to supply all the data to the adjudicating authority - appeal allowed by way of remand.
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2018 (2) TMI 628
Prayer for adjournment - assessee submits that he has not received the paper and he has applied for necessary papers - Held that: - it appears that the Learned Counsel for the respondent-assessee, Gas Authority of India Ltd, is interested in lingering on the case and generate his fee for appearance from the milky cow, the public sector undertaking, Gas Authority of India Ltd. - The Registry is directed to send a copy of this order to the Chairman and Managing Director of Gas Authority India Ltd and also to the Secretary, Public Sector Enterprises, for necessary action, if any.
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2018 (2) TMI 627
Penalty - malafide intention - time limitation - Held that: - the demand is not time-barred - penalty was cancelled for the reason that the duty was paid along with the interest before issuing the SCN. By mis-interpreting the wordings or law, no benefit can be extended to the appellant - appeal dismissed - decided against appellant.
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2018 (2) TMI 626
Quantum of the reversal of CENVAT credit - Held that: - When the dispute is regarding the quantum of the amount reversed, the impugned order is set aside and the matter is remanded to the original authority to ensure for 100% reversal of the CENVAT credit enjoyed by the appellant - appeal allowed by way of remand.
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2018 (2) TMI 625
Benefit of N/N. 50/2003-CE dated 10.06.2003 - as in the respondent case, there was substantial expansion by installing additional plant and machinery and by increasing the existing installed capacity by more than 50% of the existing installed capacity, they claimed the benefit of the exemption Notification in question - Held that: - The Tribunal in the case of CCE, Shillong vs. Hindustan Coco Cola [2004 (2) TMI 493 - CESTAT, KOLKATA] relied upon by the Commissioner (Appeals) has observed that the condition of increase in the installed capacity would relate to overall expansion and not in all the sections of the manufacturing unit individually - benefit of notification allowed - appeal dismissed - decided against Revenue.
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2018 (2) TMI 624
Suo motu re-credit of the duty initially paid/reversed in their books of accounts, after a period of time - Held that:- Both sides fairly agree that it would be inappropriate to decide the issue following the Division Bench judgment when the matter is on Board of the High Court. In similar circumstances this Tribunal in the case of Ashapura Volclay Ltd. and others Vs. C.C., Jamnagar - [2017 (6) TMI 659 - CESTAT - Ahmedabad] following the principle laid down by the Larger Bench, disposed of the matter, with the liberty to approach the Tribunal after disposal of the cases pending before the higher forum. Following the said judgment, the present appeals are also disposed of with the liberty to both sides to approach the Tribunal soon after the verdict of the Hon’ble High Court in the pending Appeal against the Division Bench judgment of this Tribunal in Garden Silk Mills Ltd.’s case (2015 (12) TMI 942 - CESTAT AHMEDABAD). Needless to mention, no recovery nor any refund would be processed during the period.
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2018 (2) TMI 623
Clandestine removal - opportunity to cross-examination - principles of Natural Justice - Held that: - the statements which are used against the appellants are required to be subjected to cross-examination before confirming the demand of clandestine removal based on those statements - appeal allowed by way of remand.
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2018 (2) TMI 622
Short payment of Central Excise Duty - It appeared to Revenue that the said difference was on account of under valuation on account of clandestine clearance of goods manufactured - Held that: - Since the revenue was making allegations of clandestine manufacture and clandestine removal of goods and evasion the Central Excise duty, the burden was on Revenue to establish that the said goods allegedly/clandestinely manufactured by relying on such evidence which could establish manufacture in clandestine manner. There is no evidence in the said SCN in respect of procurement of raw materials consumptions of electricity, excess employee employed, transportation of goods, purchasers of said allegedly/clandestinely removed goods and recovery of sale proceeds. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 621
Penalty u/r 26 of CER 2002 - clandestine removal - Held that: - Revenue has not placed on record any evidence to show that the said two Coils/Cutters were aware of the clandestine activities of M/s Pasondia Steel Profiles Ltd. and were having any knowledge about such illegal activities, if any of M/s Pasondia Steel Profiles Ltd. In the absence of any such evidence about the knowledge, the imposition of penalties upon the appellants are not proper - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 620
Refund claim - finalization of provisional assessment - denial on the ground of unjust enrichment - Held that: - It is not in dispute that consequent to the finalization of provisional assessment, the appellant had filed the refund claim of the excess duty of ₹ 49,17,209/- paid during the period of provisional assessment - The appellant had claimed interest from 18.04.1999 i.e. three months after filing the refund claim till the payment of the refund amount to them i.e. 20.09.2012. When the facts are clear and not in dispute that the refund claim was filed on 18.01.1999, the interest under Section 11BB is attracted three months after expiry of the refund application - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 619
CENVAT credit - common input services used in manufacture o taxable as well as exempt goods - Held that: - certain common services were used for both the entities i.e. for the premises of the respondent as well as of M/s. Keva Flavours decided that the respondent is entitled for credit to the ratio of 95% - the respondent shall get the cenvat credit on the services which was received and used for the purpose of their premises to that extent it cannot be denied - appeal dismissed - decided against Revenue.
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2018 (2) TMI 618
Demand confirmed with interest and penalty - Alleging that their Silvassa Unit had availed inadmissible credit to the extent of input services attributable to their exempted units - show cause notice issued for recovery - Held that:- As decided in assesee's own case show Cause Notice nowhere established that the Cenvat credit which was proposed to be recovered was used in a unit exclusively engaged in manufacture of exempted goods. It is admitted that the Services such as Advertisement Service & Sales Promotion Services, were utilized in Corporate Office, Kaushambi, Ghaziabad. The ld. Counsel also contended that both the Show Cause Notices are hit by limitation. He has also contended that the second Show Cause Notice is repetition of the first Show Cause Notice. We keep the issue of limitation open. We set aside both impugned Order-in-Original and allow both appeals. The appellants shall be entitled for consequential relief, if any, as per law.
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2018 (2) TMI 617
Cash refund - various input services - export of services - Held that: - except the three services namely, cab operators service, insurance auxiliary service and servicing motor vehicles, the service tax paid on all other services used for the export goods are eligible to refund as held in various cases - appeal allowed in part.
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2018 (2) TMI 616
CENVAT credit - input services - denial on the ground that the appellant has availed cenvat credit on the services which was used beyond the place of removal and these services have no nexus with the manufacturing activity of the appellant - Held that: - the facts are not disputed the appellant is a manufacturer as well as output service provider and maintaining a common cenvat credit account for inputs/input services used for manufacturing as well as providing output services. Tribunal in the case of Commissioner of Central Excise, Nashik Vs. Graphite India Ltd. [2017 (2) TMI 155 - CESTAT MUMBAI] has held that the cenvat credit availed in common pool cannot be denied to the assessee on the premise that the same has been used for manufacturing activity. The appellant has correctly availed the cenvat credit on the services in question being output service provider - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 615
CENVAT credit - bogus invoices - goods not received by the principal manufacturers/dealers - Held that: - in this case, no investigation was conducted at the end of the respondents to ascertain the fact that they actually received the duty paid goods or not?. As the respondents have received the goods against the invoices which show the particulars as per Rule 9 of the CCR, 2004, therefore, respondents are entitled to avail cenvat credit of duty paid by them. It is not a duty for the respondents to investigate the particulars of manufacturer/supplier to ascertain the fact that manufactured supplier had supplied the goods to the dealers. In those circumstances, the cenvat credit to the respondents cannot be denied. Penalty on the dealer, viz. Shri Kaluram Ramdayal Heda is not imposable. Appeal dismissed - decided against Revenue.
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2018 (2) TMI 614
CENVAT credit - inputs/capital goods - Rail Systems, M.S. Racks, Testing Stands, cast crayon beams, battery sets, metal furniture (Tables), M.S. Beams and other fabrication items - Held that: - battery sets, and cast cryston beams are used in or in relation to the manufacture of finished goods, hence eligible to credit. From the record, it is not clear whether the MS Angles, MS beams, channels etc. are used for the fabrication of the machineries or supporting structure of capital goods - to ascertain the use of MS Angles, MS Beams etc. in the factory, it is hereby remanded to the adjudicating authority to ascertain the fact and decide the same. Appeal allowed in part and part matter on remand.
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2018 (2) TMI 613
Re-credit of duty, reversed earlier - whether the Appellant-Assessee could avail suo motu re-credit of the duty initially paid/reversed in their books of accounts, after a period of time? - Held that: - In similar circumstances, a Division Bench of this Tribunal in the case of Ashapura Volclay Ltd and others Vs. C.C., Jamnagar [2017 (6) TMI 659 - CESTAT - Ahmedabad] following the principle laid down by the Larger Bench, disposed of the matter, with the liberty to approach the Tribunal after disposal of the cases pending before the higher forum - appeal disposed off.
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2018 (2) TMI 612
Reversal of CENVAT credit - rule 6(3) of CCR 2004 - Held that: - reliance placed in the case of ICMC Corporation Ltd v. CESTAT Chennai [2014 (1) TMI 1473 - MADRAS HIGH COURT], where it was held that there is only an account entry reversal and factually there is no outflow of funds from the assessee to result in filing application under Section 11B of the Central Excise Act, 1944 claiming refund of duty - demand of duty set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 611
Liability of Central Excise Duty - manufacture of tyres, tubes and flaps falling under Central Excise Tariff Headings 40.11, 40.12 and 40.13 - Section 4A of the CEA 1944 read with N/N. 11/2006-C.E. (N.T.), dated 29-5-2006 - Held that: - tyres, tubes and flaps manufactured by the appellant’s unit at Mysore is not to be assessed under Section 4A as parts of automobile. It is to be noted here that tyres and tubes are not only used for automobiles. They are used in animal drawn vehicles, aircrafts and various other machineries. It is not tenable to hold the tyres and tubes are to be considered as parts and components of automobiles. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (2) TMI 610
Penalty u/s 54(1)(1) of the U.P. VAT Act - delayed deposit of tax - Held that: - It is admitted that the assessee has deposited tax late by two days. It is also not in dispute that on the relevant date when the admitted tax was to be deposited the assessee had no funds available in its bank account. It is, however, not disputed that revisionist had overdraft facilities available and the amount of admitted tax could have been paid from it. The amount of interest payable upon the delayed deposit of admitted tax has been deposited by the revisionist and the interest of State is adequately protected. This Court finds that the assessee was not having liquid funds available in its bank account when the admitted tax was to be deposited. This explanation submitted by the assessee was accepted by the assessing authority and four days time was allowed for the purpose. The assessee in fact had deposited the amount of admitted tax alongwith interest but by a delay of two days. Once the statute itself confers discretion upon the authority concerned and the imposition of penalty is not automatic, the authority concerned is expected to take into consideration relevant facts and circumstances that are placed before it. The exercise of jurisdiction to levy penalty in the facts and circumstances is not proper - revision allowed.
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2018 (2) TMI 609
Recalling an order of dismissal of application - Section 9(2) of the Central Sales Tax Act, 1956 - Held that: - the question of declaration forms containing “Self” as consignee/purchasing dealer had come up for the first time before revisional authority and hence there was no scope of urging that point before the appellate authority. The revisional authority has however given factual finding on this issue. No material is available from which we can come to a decision that such finding was perverse - petition dismissed.
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Indian Laws
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2018 (2) TMI 651
Interpretation of section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and section 31 of the Land Acquisition Act, 1894 - Whether a deposit in the Treasury or with the Collector amounts to a payment of compensation under Section 24(2) of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 especially when the landowners have refused to accept compensation? - Held that:- Question No. 1 may be referred to a larger bench. The acquisition proceedings do not lapse if the amount is deposited in the Treasury and such fact is made known to the claimants by the competent authority as required in law. Only interest is attracted, in case if the deposit is not made in Court. Consequently, unable to persuade myself to agree with the outcome of Pune Municipal Corporation (2014 (1) TMI 1643 - Supreme Court Of India). However, according to me the judgment in Pune Municipal Corporation (2014 (1) TMI 1643 - Supreme Court Of India) is not rendered in per incuriam. In view of the above, the judgment in Pune Municipal Corporation (supra) may have to be reconsidered by a larger bench, inasmuch as Pune Municipal Corporation (supra) was decided by a bench of three judges. The Registry is directed to place the papers before the Hon ble Chief Justice of India for appropriate orders. Whether the conscious omission referred to in paragraph 11 of the judgment in Sree Balaji Nagar Residential Association v. State of Tamil Nadu, (2014 (9) TMI 941 - Supreme Court Of India) makes any substantial difference to the legal position with regard to the exclusion or inclusion of the period covered by an interim order of the Court for the purpose of determination of the applicability of Section 24(2) of the 2013 Act? - Held that:- The conscious omission referred to in paragraph 11 of the judgment in Sree Balaji (supra) does not make any substantial difference to the legal position with regard to the exclusion or inclusion of the period covered by an interim order of the Court for the purpose of determination of the applicability of Section 24(2) of the 2013 Act. In fact, excluding such periods of interim stay from the calculation of the time period of five years under S. 24(2) makes a reading of the Act more consistent. Whether the principle of actus curiae neminemgravabit , namely act of the court should not prejudice any parties would be applicable in the present case to exclude the period covered by an interim order for the purpose of determining the question with regard to taking of possession as contemplated in Section 24(2) of the 2013 Act? - Held that:- The principle of actus curiae neminemgravabit , or that the act of the court should not prejudice any parties, would be applicable in the present case to exclude the period covered by an interim order for the purpose of determining the question with regard to taking of possession as contemplated in Section 24(2) of the 2013 Act.
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