Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 14, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
TMI SMS
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Levy IGST on ocean freight whereas the value of import goods includes Ocean Freight. - Vires of N/N. 8/2017-Integrated Tax [Rate] dated 28th June 2017 and Entry 10 of the N/N. 10/2017 - interim relief granted - HC
Income Tax
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Slump sale - transfer of Planet M. division in consideration of equity shares and 6% redeemable unsecured debentures - the provisions of section 50B are not applicable to this case as it is a case of slump exchange and not a slump sale - AT
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Registration u/s 12A eligibility - charitable activities along with organizing of spiritual lectures, the assessee by no means ceases to be a religious institution - spreading spirituality was not considered to be a religious activity - AT
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Power of CIT to cancel registration u/s 12A - power to cancel the registration was first conferred on the Commissioner w.e.f. 1.6.2010 - merely because the Commissioner had wrongly given effect to such cancellation w.e.f. A.Y. 2009-10, it did not vitiate the entire order. - HC
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Revision petition u/s 264 - amount taxed twice - The question of double taxation was very much appearing before the Assessing Officer during the assessment - AO is directed to modify the order of assessment - HC
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The activity performed by the assessee clearly appears to be inseparably linked to the 'charitable purpose' of providing mid-day meals at village schools - the restriction created by the first proviso to Section 2(15) did not operate against the assessee - HC
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Claim of expenses from Capital Gains - Words “wholly and exclusively” do not connote “necessarily”. - The words “in connection with” are of wide import and if such expenses have an intimate connection with the transfer, they have to be allowed u/s 48. - AAR
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Exemption u/s. 54B - LTCG from sale of agricultural land - One of the conditions for claiming deduction u/s. 54F is that claim should have been made in the return of income. Since no such claim was made by assessee in the return of income u/s. 139(1) or 139(5), therefore, the claim of the assessee cannot be entertained. - AT
Customs
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Penalty u/s 114 (i) of the CA 1962 - shipping bill did not contain the signature of the exporter authorizing the export of the goods /reading books. It is very clear that there has been contravention of law of Customs Act by the appellant - penalty upheld - AT
IBC
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Insolvency resolution process - The petitioner cannot be forced to buy goods from the respondent-corporate debtor and it has every right to claim the outstanding amount which is overdue. - The respondent cannot raise a voice to say that there was no term fixed for payment for the outstanding amount on the ground that the transactions between the parties continued in the normal course of business since 2012 - Tri
Service Tax
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Short payment of service tax - mere non mentioning of legal provision will not vitiate the proceedings when the gist of the provisions is available in the allegation and discussions recorded in the impugned order. - AT
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Business Auxiliary Service - commission paid to foreign based commission agents, who were placing export order with them - the said SCN did not invoke provisions of Section 66A for demand of said service tax - SCN not valid - AT
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The receipt of the Municipal Corporation i.e. appellant that the amount towards so called advertisement was collected as Jahirat Kar (Advertisement Tax) - the advertisement tax being statutory tax levy by the Municipal Corporation should not be liable to service tax. - AT
Central Excise
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Transfer of accumulated CENVAT credit to other unit - if the said credit was available to the appellant prior to their registration, the fact of surrendering of licence should not be adopted and the appellant request to transfer the credit should not be denied on such hyper technical grounds. - AT
Case Laws:
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GST
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2018 (2) TMI 770
Levy GST on ocean freight whereas the value of import goods includes Ocean Freight. - Vires of N/N. 8/2017-Integrated Tax [Rate] dated 28th June 2017 and Entry 10 of the N/N. 10/2017-Integrated Tax [Rate] also dated 28th June 2017 - petitioner's grievance is that under the impugned Notifications, the petitioner is asked to pay tax at the prescribed rate all over again on the ocean freight - Counsel for the petitioner submitted that the impugned Notifications are ultra vires the Act and are in any case in exercise of excessive delegation of powers of subordinate legislation - Held that: - Notice and notice as to interim relief, returnable on 9th March 2018.
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2018 (2) TMI 766
Lack of access to online profile on the Goods and Service Tax Network - petitioner unable to generate e-way bills - Held that: - The special sessions of Parliament or special or extraordinary meetings of Council would mean nothing to the assessees unless they obtain easy access to the website and portals. The regime is not tax friendly. We hope and trust that those in charge of implementation and administration of this law will at least now wake up and put in place the requisite mechanism. The respondents are directed to reopen the portal and give easy access to the petitioners and all assessees - petition allowed.
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Income Tax
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2018 (2) TMI 771
Entitlement to benefit of proviso to Section 112 (1) - tax payable on the long term capital gains arising on the sale of equity shares of Hero Honda Motors Ltd. - benefit of indexation under Second proviso to Section 48 - Held that:- The benefit of the proviso of Section 112(1) of the Act is applicable in the case of non-resident as well,in spite of section 48. This issue is identical to the above case and the decision in Cairn UK [2013 (10) TMI 430 - DELHI HIGH COURT] is squarely applicable. Following the above decision we conclude that the benefit under Section 112(1) of the Act could not be denied to the Applicant. We have been following this line in several cases and more recently in the case of Pan-Asia iGate Solutions, Mauritius, In Re [2014 (5) TMI 631 - AUTHORITY FOR ADVANCE RULINGS]. Claim deduction for expenses claimed as incurred in connection with the transfer of shares of HHML, as per provisions of section 48 - Held that:- Words “wholly and exclusively” do not connote “necessarily”. If the expenses have been incurred in connection with the transfer, they are to be allowed. The words “in connection with” are of wide import and if such expenses have an intimate connection with the transfer, they have to be allowed u/s 48. In the instant case there is no doubt that the expenses are incurred for effecting the transfer only. Even if it was a mutual decision of the two parties for their convenience, that the shares should be dematerialized and an Escrow account be opened, as contended by the Revenue, this in no way suggests that the expense were not incurred wholly and exclusively in connection with the transfer of shares. During the course of the final hearing, the Revenue has not opposed the Applicant’s contentions on the issue. Hence, the same are to be treated as allowable as a deduction under section 48 of the Act. - Appeal Decided in favour of assessee
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2018 (2) TMI 769
Application u/s 12-AA denied - proof of charitable activities - society is getting preparation and distribution charges per child per month from the state govt., the activity in this field cannot be treated as charitable in nature - Held that:- Merely because the State had itself not been able to cook and supply cooked food by way of mid-day-meals at it's schools and further because it out-sourced that part of the work, against consideration, it cannot be said that it transformed the activity into one in the nature of trade, commerce or business etc. Execution of a contract between two parties, in these facts cannot be decisive whether the activity itself was one purely in the nature of trade, commerce or business. What was more important is to examine whether assessee had engaged in an activity that was inseparably linked to and performed in continuation of the charitable scheme of the government. The fact that some money had been paid by the State to the assessee was only a necessary expense at the hands of the State. Looking at the nature of expenses met by the assessee one cannot escape the conclusion that similar expenses would have been incurred by the State, had it performed that work itself or though it's own agencies. The payments received were utilized to defray the expenses met to perform the task of cooking and supplying the meals as directed by the State government. It is also not the case of the revenue that the assessee was in any manner free to utilize either the materials supplied to it or food cooked by it, as per it's own wish/discretion. The assessee appears to have acted merely as an agent of the State. Therefore it would be wrong to conclude that because there existed a contract between the assessee & the government therefore the assessee was not pursuing a "charitable purpose". On the other hand the activity performed by the assessee clearly appears to be inseparably linked to the 'charitable purpose' of providing mid-day meals at village schools. Also, admittedly, the total receipts of the assessee were below the limit of ₹ 10,00,000/- as stipulated under the second proviso to Section 2(15) of the Act. Tribunal has rightly concluded that the restriction created by the first proviso to Section 2(15) of the Act did not operate against the assessee and therefore the activity of the assessee, even though it may have involved an activity in the nature of trade, commerce or business, etc., it would fall within the ambit of general public utility and therefore be a charitable purpose under Section 2(15) of the Act. Alternatively, if it be assumed that in that process the assessee engaged in an activity in the nature of trade, commerce or business, etc, then, because the receipts from such activity were below ₹ 10,00,000/-, the assessee was still entitled to registration under Section 12AA(1)(b)(ii) of the Act. - Decided in favour of assessee
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2018 (2) TMI 768
Validity of reopening of assessment - notice issued by AO u/s 148 beyond the 04 years - necessary approval of Chief Commissioner or CIT as per the provisions of Section 151(1) had not been obtained by the Assessing Officer -scope of amendment - Held that:- As quite obvious from a reading of the Board’s circular, issued on 31.10.1989 hat the Revenue authorities at a higher level existed and interpreted the amendments in the manner that the Calcutta High Court in East India Hotels Ltd. v. Deputy Commissioner of Income Tax (1992 (2) TMI 12 - CALCUTTA High Court) did. The arguments of the Revenue by laying emphasis on the expression “as aforesaid” appeared to have some force. However, a closer reflection would reveal that “as aforesaid” is capable of two interpretations – narrow – textual one as is urged on behalf of the Revenue and a broader one. In the contention of Section 151(1), the proviso when it refers to an Assessing Officer, could also mean not merely an Assessing Officer below the rank of Assistant Commissioner and Deputy Commissioner but also all Assessing Officers. The latter interpretation has been clearly followed by the Calcutta High Court – as well as the Revenue authorities. Yet one more reason which persuades us to reject the Revenue’s submission to disagree with the Calcutta High Court’s judgment which is that in the case of a non-assessment (i.e. when the assessment is framed under Section 143(1), a higher standard of approval of the Joint Commissioner is insisted upon. The interpretation given by the Calcutta High Court – where endorsed in this judgment, places even scrutiny assessment at par with such assessments and ensures that there is no disconnect and a minimum safeguard, by way of an opinion by the higher official expressing satisfaction is on the record before a notice is issued under Section 148, in respect of a period beyond 4 years from the end of the relevant assessment. - Decided in favour of assessee
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2018 (2) TMI 765
Revision petition u/s 264 in favor of assessee - amount taxed twice - Held that:- The revisional powers of the Commissioner under section 264 of the Act are very wide and empowers the Commissioner to take any order of his subordinate authority into revision and further make necessary inquiry to pass such order as he thinks fit. These powers are subject to two main restrictions viz. that the order would be subject to the provisions of the Act and in any case, cannot be an order prejudicial to the assessee. In case of National Thermal Power Co. Ltd.v. Commissioner of Income Tax [1996 (12) TMI 7 - SUPREME Court] has held that there is no reason to restrict the power of the Tribunal under section 264 of the Act to entertain any question for the first time so long as the relevant facts are on record. The Court referred to the judgment in case of Jute Corporation of India Ltd. v. CIT [1990 (9) TMI 6 - SUPREME Court] and noted the observations with approval that an appellate authority is vested with all the plenary powers which the subordinate authority may have and there is no reason to justify curtailment of the power of the appellate Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Assessing Officer. The question of double taxation was very much appearing before the Assessing Officer during the assessment for the assessment year 2013-14. It was this issue which the assessee had carried before the Commissioner in revision petition. Thus, this issue arose out of the order of assessment and all necessary facts to entertain such a question were any way on record. It is by now well settled that assessment proceedings are not adversarial and the Revenue can tax only the real income. Thus order of the Commissioner is set aside - AO is directed to modify the order of assessment by deleting sum of ₹ 44,80,302/from the total income of the assessee with consequential tax implication.- Decided in favour of assessee
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2018 (2) TMI 764
Reopening of assessment - proof of payment of recognized expenditure - eligibility of reasons to believe - assessment beyond period of four years from the end of relevant assessment year - Held that:- The information on which the Assessing Officer proceeded to form a belief that the said payment was not a recognized deduction, the said payment could not have been allowed to be deduced from the income, was already on the record. This would be relevant in the context of the fact that the impugned notice came to be issued beyond the period of four years from the end of relevant assessment year and the element of true and full disclosure on the part of the assessee would be important. There was nothing outside of the record which could have thrown any light on the nature of payment and its deductibility in terms of provisions of the Income-tax Act. We are not called upon to judge the Assessing Officer's assertion that though such payments were recognized in partnership deed, as per the Income-tax law, the payments were not allowable deductions, being the nature of payments made to the outgoing partner and therefore were in the nature of capital expenditure. We are presently concerned with the limited issue of reopening of the assessment beyond period of four years from the end of relevant assessment year. In this respect, the Revenue has completely failed in satisfying us that there was any failure on the part of the assessee in disclosing truly and fully, all material facts. From the reasons recorded by the Assessing Officer as well as material produced before us, it is completely visible that all necessary facts were already on record, duly disclosing and that there was no failure on the part of the assessee in this regard - Decided in favour of assessee.
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2018 (2) TMI 763
Reopening of assessment - notice issued after four years - disallowance of claim of expenditure of 30% of the receipts - Held that:- As during the survey operations, the assessee was confronted with such entry in the diary and the assessee admitted that the said figure of ₹ 5,96,914/represented his unaccounted cash and professional receipts, which he had not offered to tax. While therefore filing a return in response to the notice under section 148 of the Act, the assessee included such income in the declared income. The Assessing Officer accepted such return and, as noted earlier, barring minor adjustment of claim of expenditure, confirmed the assessee's declaration of income. To reopen such assessment, the impugned notice came to be issued which clearly is beyond the period of four years from the end of relevant assessment year. The reasons proceed concededly only on the material available on record. Such relevant material included the notings in the assessee's diary which recorded a figure of ₹ 5,96,914/as outstanding fees to be collected and other entries referring to certain outstanding payments. Fact remains that whatever legal conclusions on the basis of the factual analysis the Assessing Officer desirous to arrive at, is based on the material already on record all throughout during previously reopened assessment proceedings. In absence of any new information or material which do not form part of the original assessment proceedings, it would not be open for the Assessing Officer to frame fresh assessment, that too, in a case where the notice of reopening has been issued beyond a period of four years - Decided in favour of assessee
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2018 (2) TMI 761
Allowing the additional claim of the assessee without filing valid revised return - Held that:- A perusal of the grounds of appeal raised before the Tribunal reveals that the same relate to taking of cognizance of the revised return filed after due date prescribed under section 139(5) of the Act. Insofar as the issue relating to the revised return is concerned, the same has attained finality by the earlier order passed by the Tribunal [2013 (3) TMI 783 - ITAT AHMEDABAD] whereby the Tribunal allowed the cross appeal of the assessee and held that the decision in the case of Goetze (India) Ltd. v. CIT (2006 (3) TMI 75 - SUPREME Court) was limited to the power of the assessing authority only to entertain a claim for deduction otherwise than by filing revised return of income and it did not impinge upon the power of the appellate authority. Thereafter, the proceedings before the Commissioner (Appeals) were on the merits of the additional ground raised by the assessee. The order of the Commissioner (Appeals) has not been questioned by the revenue before the Tribunal. Accordingly, no question on the merits of the additional ground arises out of the impugned order.
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2018 (2) TMI 758
Stay of demand - Penalty u/s 271D - cash loans from parents - repayment of loan in cash to Mother - whether only impossible situations for compliance of the provision contained in Section 269SS would constitute "reasonable cause" within the meaning of Section 273B? - Held that:- It would be inappropriate for this Court to consider the question as to whether the petitioner has made out a reasonable cause falling within the scope of Section 273B of the Act for non-compliance of the provisions contained in Section 266SS in respect of the transactions involved in this case, as the same is an issue primarily to be considered by the Appellate Authority in the appeals preferred by the petitioner. As seen that the income earned by the petitioner during the relevant year, even going by the assessment made by the Department, is only approximately ₹ 20,00,000/-, of which it is conceded that he has paid around ₹ 5,00,000/- towards tax. It is beyond dispute that if the petitioner does not remit the 15% of the amount directed to be paid, the benefit of the interim order will not be available to him. At the same time, if he is compelled to pay such a huge amount, there is force in the contention that the same will have an adverse impact on his business. In the circumstances, I deem it appropriate to modify Ext.P7 order granting stay for 95% of the demand covered by Ext.P1 order, on condition that he shall pay the remaining 5% in two instalments, the first of which shall be paid on or before 01/02/2018 and the second instalment before, 01/03/2018.
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2018 (2) TMI 756
Power of CIT to cancel registration u/s 12A - registration order cancelled with retrospective effect - scope of amendment to section 12A - Commissioner concluded that the activity conducted by the assessee was clearly in the nature of trade and business - according to the Tribunal, the Commissioner could not have cancelled such registration w.e.f. A.Y. 2009-10 as that would refer to a date prior to the date when the power to cancel the registration (granted under Section 12-A(1) of the Act) was first conferred on the Commissioner. Held that:- In the instant case, undisputedly the registration had been granted much prior to the introduction of the first proviso to Section 2(15) of the Act. Therefore, on the date of grant of registration to the assessee, it was fully eligible for the registration. The registration thus granted did not suffer from any inherent or fundamental defect. Then, the assessee continued to avail the benefit of the registration for all the assessment years subsequent to the grant of its registration. Such a registration order cannot be allowed to be cancelled with retrospective effect so as to affect past transactions that too in absence of any express legislative intent and without any adverse inference being first drawn against the assessee, in terms of Section 13(8) of the Act, during the relevant assessment year. In absence of any legislative intent expressed to suggest that the legislature had empowered the Commissioner to cancel the assessee's registration under Section 12-A of the Act with retrospective effect, such power could not be deemed to exist or arise or be exercised to unsettle closed/part transactions especially because in this case the ground for cancellation has not arisen out of allegation of fraud, collusion or misrepresentation. Cancellation of the assessee's registration under Section 12-A of the Act, if at all, could be done only prospectively and not retrospectively as had been done by the Commissioner in this case. Thus, question no. 1 is answered in the negative that is in favour of the assessee and against the revenue. Validity of notice issued - jurisdictional error - Held that:- The cancellation of registration would not be automatic or natural or the only consequence of the receipts (arising from an activity specified in the first proviso to Section 2(15) of the Act), exceeding ₹ 10,00,000/- in any previous year. In case of the assessee before us to whom registration under Section 12A of the Act had been granted before incorporation of the provisos to Section 2(15) of the Act, in the event of its receipts from activities specified in the first proviso to Section 2(15) of the Act exceeding ₹ 10,00,000/- in a subsequent year, cancellation of the registration under Section 12-A of the Act would not be the natural or the only consequence of such an event, if established. We answer the question no.2 in favour of the revenue and against the assessee. According to us the cancellation notice having been issued on 06.03.2012, it did not suffer from any jurisdictional error. On that date the Commissioner had vested (in him) the power to cancel a registration granted to the assessee under Section 12A of the Act (on 24.09.2003). Therefore, merely because the Commissioner had wrongly given effect to such cancellation w.e.f. A.Y. 2009-10, it did not vitiate the entire order. Since the Tribunal has not recorded any finding either on the merits of the contention raised by the assessee, that it was pursuing a charitable purpose and as to the date from which the registration could have been cancelled in pursuance of the notice dated 06.03.2012, we consider it necessary to remit the matter to the Tribunal to decide this issue afresh in accordance with law.
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2018 (2) TMI 748
Penalty u/s 271AAA - Held that:- We find in the assessment order, the A.O has categorically mentioned that the assessee company has declared the amounts surrendered as miscellaneous income under the head income from other sources. A perusal of the assessment order shows that the assessee has surrendered the income, explained the manner in which it was earned and has paid the taxes due thereon. Therefore, the assessee has fulfilled all the conditions laid down in Section 271AAA for non-levy of penalty under the said provisions. Even otherwise also, it is an admitted fact that no search has taken place in the premises of the assessee and, therefore, provisions of Section 271AAA are not at all applicable. - Decided against revenue.
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2018 (2) TMI 745
Taxability of gains on sale of lands claimed to be agricultural lands by assessee - nature of land - Held that:- Here the lands in question are away from Municipal limits and cannot be treated as urban lands under W.T. Act or under IT Act. Be that as it may, what is noticed from the ‘agreement of sale-cum-GPA’ and ‘sale deed’ entered by assessee is that assessee never brought the said lands in his name. The agreement of sale-cum-GPA is from the original owners and assessee sold the same as GPA holder only. Thus, the ownership of land has to be examined. The mutation of land in assessee name was not placed on record. It is admitted that assessee has not earned any income from the land. Whether any agricultural/ development activity was undertaken on the land was also not explained or examined. As seen from the record, there is a rectification deed dt. 30-04-2008, the contents of which are not available. The lands were not mutated in assessee name, what assessee has sold as GPA holder was only assessee’s right to property. Then, it can also become an ‘adventure in nature of trade’, if the intention is only for subsequent sale on profit. As these aspects are not examined, it is of the opinion that the AO and CIT(A) have erred in treating the same as sale of urban land - set aside the orders of AO and CIT(A) and restore the issue to the file of AO to examine afresh and to determine the nature of transaction - Appeal of assessee allowed for statistical purposes.
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2018 (2) TMI 744
TDS u/s. 194C and 194J on broad band charges - payment made to HCL Infinet and HCL Comnet - Held that:- The grounds of appeal as raised in this appeal by the assessee are squarely covered [2017 (8) TMI 714 - ITAT MUMBAI] no TDS is required to be made on payments made towards internet and communication charges. - Decided in favour of assessee.
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2018 (2) TMI 743
Addition under the head 'Bakshis' and 'Tips & Bakshis" - allowable busniss expenditure - Held that:- In the present case the plea of the assessee is based on the existing customs and practice prevalent for a long time. This was accepted by the tribunal in A.Y.2009-10 [2017 (12) TMI 303 - ITAT KOLKATA]. Moreover, the vouchers were filed before the CIT(A) which were omitted to be considered by the CIT(A). In these circumstance we are of the view that the decision rendered by the tribunal on identical facts should be followed. Respectfully following the decision of the tribunal we direct that the impugned addition made by the AO be deleted. - Decided in favour of assessee
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2018 (2) TMI 742
Disallowance on account of supervision charges - guinity of expenditure - as contented by assessee no enquiry was made by the A.O. with the concerned contractors to verify the genuineness of claim of the assessee for supervision charges - Held that:- No agreement or contract entered into with the concerned parties is produced by the assessee on record to show the nature of services agreed to be rendered by the concerned parties and the terms and conditions on which such services were to be rendered. The assessee has also not produced any evidence to show that the services were actually rendered by the said parties for the purpose of the assessee’s business Assessee in the present case has failed to discharge the onus that lies on him to support and substantiate its claim for deduction on account of supervision charges by producing the relevant documentary evidence and this being so, we find no infirmity in the impugned order of the Ld. CIT(A) confirming the disallowance made by the A.O. on account of supervision charges. The same is accordingly upheld dismissing this appeal filed by the assessee.
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2018 (2) TMI 741
Revision u/s 263 - error committed by AO in taxing the interest income in the manner as specified under Rule 8 of IT Rules, 1962 which is causing prejudice to the interest of revenue - Held that:- CIT u/s 263 of the Act has not pointed out any defect in the submission filed by assessee before him during proceedings. The assessee before Ld. Pr. CIT has made the submission that amount of interest income is directly linked with the agricultural operation of assessee. Therefore, the same has to be included in the composite income as specified under Rule 8 of IT Rules, 1962. We find force in the advanced argument by the assessee as the impugned interest income is directly linked with the agricultural operation of assessee. See Eveready Industries India Ltd. v. CIT & Anr. reported (2009 (12) TMI 226 - CALCUTTA HIGH COURT) . The income is directly linked with the business operation of assessee. Therefore, same is liable for taxation in the manner specified in Rule 8 of IT Rules, 1962. We uphold the grievance of the assessee and quash the impugned revision order as devoid of jurisdiction.- Decided in favour of assessee.
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2018 (2) TMI 740
Penalty u/s. 271 - defective notice - Held that:- AO has initiated the penalty for concealing the particulars of income or furnishing inaccurate particulars of income as well as in the penalty order dated 29.6.2016 he held that the assessee had without reasonable cause concealed the particulars of his income, and / or furnished inaccurate particulars of income assessed. Therefore, in view of above, the penalty in dispute is not sustainable in the eyes of law and needs to be deleted. See CIT & Anr. Vs. M/s SSA’s Emerald Meadows [2015 (11) TMI 1620 – Karnataka High Court] wherein held that the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. - Decided in favour of assessee
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2018 (2) TMI 739
Claim of deduction u/s. 54B - whether agricultural activities were carried out by the assessee on his share of land? - Held that:- AO has raised doubt that the land was not used for agricultural purpose either by assessee or his parents. The revenue record in the form of 7/12 extracts clearly indicate that Sugarcane was grown in Gut No. 239, Village – Gahunje wherein, the assessee is one of the owner. A close reading of 7/12 extracts for financial year 2007-08, 2008-09 and 2009-10 in respect of Survey No. 239 show that land was under self cultivation. During the course of scrutiny assessment proceedings, the Assessing Officer has not raised any doubt over the authenticity of 7/12 extracts furnished by assessee. The 7/12 extracts is revenue record maintained by Land Revenue Department of State Govt. Therefore, it carries some sanctity with respect of its contents. The assessee has also furnished a copy of bank statement indicating that Sugarcane cultivated by assessee was sold to sugar factories. The assessee received payment from sugar factories in his bank account bearing No.4016 with Pune District Central Co Operative Bank Ltd, Dehuroad Branch, Pune. A perusal of bank statement shows that the assessee has received payment in respect of Sugarcane bill on various dates starting from 18.07.2008 to 05.02.2010. The entries in the passbook further supports the claim of assessee that sugarcane was cultivated during the financial year 2008-09 and 2009-10. The land revenue entries in 7/12 extract indicating the crop grown coincides with the payments received by assessee in his Bank account for sale of sugarcane. No infirmity in the order of Commissioner of Income Tax (Appeals) in accepting assessee’s claim of deduction u/s. 54B on the basis of 7/12 extracts, the genuineness of which was never in question. Accordingly, Ground No. 1 raised in the appeal by the Department is dismissed. Claim of deduction u/s.54F - benefit of deduction u/s.54F is with respect to capital gains arising in the hands of wife of assessee which was suo-moto clubbed in the hands of assessee u/s. 64 - Held that:- One of the conditions for claiming deduction u/s. 54F is that claim should have been made in the return of income. Since no such claim was made by assessee in the return of income u/s.139(1) or 139(5) of the Act, therefore, the claim of the assessee cannot be entertained. The claim made by assessee u/s. 54F was in respect of capital gain arising in the hands of wife of the assessee, Smt. Sangita Ramakant Bodke, therefore, the same should have been claimed in the return of income filed by the wife of assessee. The claim of assessee u/s. 54F is liable to be rejected on this ground, as well. We observe that in the written submissions, the assessee has admitted that the claim was made mistakenly. Thus, in view of our above observations and the admission by assessee, the Ground No. 2 raised in the appeal by Department is allowed. Addition on account of interest on housing loan - claim is not made in the return of income or revised return of income - since the assessee has not shown any income under the head ‘Income from House Property thus claim of deduction of interest on house loan cannot be allowed - Held that:- We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in accepting the claim of assessee made during assessment proceedings by following revised computation of income. No material has been placed on record by Revenue to show that the house in respect of which claim is made, is not self occupied. The provisions of section 24 permit such deduction in respect of self occupied house up to ₹ 30,000/-. Thus, Ground No. 3 raised in appeal by Revenue is dismissed. Allowance of agricultural income of the assessee - Held that:- In this case as per 7/12 extract the appellant is undisputedly owner of agricultural land depicting cultivation of various crops. Ideally, the appellant should have substantiated the income with further details like sales bill of agricultural produce but considering the smallness of amount, the contention of the appellant can be accepted. Accordingly, the Assessing Officer is correctly directed to delete the addition under the head ‘Other Sources’ and treat the same as agricultural income. Thus Ground No. 4 raised in appeal by the Revenue is dismissed.
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2018 (2) TMI 738
Seeking stay of demand - Held that:- We direct the assessee-company to pay 50% of the demand in question on or before 28/02/2018 and furnish bank guarantee for balance demand for a period of 6 months before the Assessing Officer on or before 28/02/2018. The stay order is valid for a period of six months from the date of the order or till disposal of the appeal whichever is earlier. The matter is already listed for hearing for 17/05/2018. However, we direct the registry to advance the hearing date to 09/04/2018. The stay order is subject to condition that the assessee- company shall not seek adjournment of the appeal without any just and reasonable.
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2018 (2) TMI 737
Penalty u/s. 271 - defective notice - Held that:- AO has initiated the penalty for concealing the particulars of income or furnishing inaccurate particulars of income as well as in the penalty order dated 29.6.2016 he held that the assessee had without reasonable cause concealed the particulars of his income, and / or furnished inaccurate particulars of income assessed. Therefore, in view of above, the penalty in dispute is not sustainable in the eyes of law and needs to be deleted. See CIT & Anr. Vs. M/s SSA’s Emerald Meadows [2015 (11) TMI 1620 – Karnataka High Court] wherein held that the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. - Decided in favour of assessee
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2018 (2) TMI 735
Addition of bogus purchases u/s 69C - genuineness of purchases - Held that:- AO was erred in making 100% addition towards alleged bogus purchases u/s 69C of the Act. CIT(A), without appreciating the facts has gone on a different footing and estimated gross profit by adopting assessment year 2013-14 gross profit to sustain the addition made by the AO towards alleged bogus purchases. Though the AO has made addition on the basis of information received from sales-tax department failed to make any further enquiries in the light of evidences filed by the assessee to ascertain genuineness of purchases. Therefore, we are of the considered view that the case law relied upon by the Ld.DR is not applicable to the facts of present case. In this view of the matter and considering the ratios of the case laws discussed by us, we direct the AO to estimate net profit on total alleged bogus purchases at 12.5% for AYs 2010-11 and 2011-12.
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2018 (2) TMI 734
Addition treating the premium paid to hedge against exchange fluctuation risk as service fees - Held that:- The appellant has drawn attention to the fact that the similar amounts claimed in the preceding years have been allowed and has also explained in detail that the loan from Bridgestone Corporation Japan was utilized for working capital needs and repayment of existing loans and hence has to be treated as on revenue account and not on capital account and hence as the expenditure was incurred for the purposes of business it was also allowable u/s 37. The claim of the appellant is found to be eligible for allowance in the year under consideration - Decided in favour of assessee. Addition on account of under valuation of closing stock - Held that:- As per section 145A of the Income Tax Act, 1961, wherein method of valuation will be applicable not only in closing stock, but on inventory i.e. opening and closing stock as well as on both purchases and sales. Therefore, the AC is not justified in adding the excise duty in closing stock of raw materials and incidental goods. We, therefore, direct the AO to compute the total income by adding cess, duty or tax paid incurred not only in closing stock but also in purchases, opening stock, sales, wherever such excise duty is already added. In respect of assessment years 2005-06, 2008-09, and 2009- 10, the Ld. CIT(A) has already allowed the claim of the assessee as we have held above. Therefore, on the same reasoning, Departmental appeals for all the three years are dismissed.
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2018 (2) TMI 732
Registration u/s 12A eligibility - Voluntary contributions received by the Appellant covered under exceptions covered under sub-section (2)(b) of section 115BBC - charitable activities along with organizing of spiritual lectures, the assessee by no means ceases to be a religious institution - Held that:- In the present case, as per the objects clauses reproduced by the AO this is also an object of the assessee to establish and maintain ‘anathashrama’, ‘old age home’ ‘home for deaf and dumb’ and to render all sorts of help to the poor and needy including conducting of marriage and mass marriage. These objects are similar to the objects of the assessee trust in the case of judgment of Hon’ble Delhi High Court rendered in the case of CIT (E) Vs. Bhagwan Shree Laxmi Naraindham Trust (2015 (9) TMI 558 - DELHI HIGH COURT) as reproduced above except this that in that case, this was also an object that the assessee trust will arrange spiritual lectures but in the present case, there is no such object. But in considered opinion, this difference is not material because spreading spirituality was not considered to be a religious activity in that case as can be seen in Para 15 of that judgment reproduced above - Decided in favour of the assessee.
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2018 (2) TMI 730
Disallowance u/s 14A - sufficiency of own funds - Held that:- If there are funds available both interest-free and over draft and/or loans taken, then a presumption would arise that investments would be out of the interest-free fund generated or available with the company, if the interest-free funds were sufficient to meet the investments. In this case this presumption is established. As relying on CIT vs. Reliance Utilities and Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] we direct the AO to delete the disallowance as made u.s 14A - Decided in favour of assessee Slump sale - transfer of Planet M. division in consideration of equity shares and 6% redeemable unsecured debentures - whether an exchange of the said division and not sale as contemplated under the provision of section 50B - Held that:- Planet M Division transferred by the assessee as on a going concern basis where no cost of acquisition is possible to be attributed individual assets in that undertaking and therefore the charging of provisions of section 45 are not attracted. We further hold that the provisions of section 50B are not applicable to this case as it is a case of slump exchange and not a slump sale. Accordingly we set aside the order of CIT(A) and direct the AO not to tax the amount of capital gain - Decided in favour of assessee Disallowing software expenses relating to website portal - nature of expenditure - revenue or capital - Held that:- We find that the Ld. CIT(A) allowed the appeal of the assessee by following the earlier order for A.Y. 2007-08 which has attained finality. We have observed that order of Ld. CIT(A) is correct and does not suffer from any infirmity as it has been passed after considering the facts of the case in the light of the similar issue decided in A.Y. 2007-08 which attained finality. Also on merit the issue has been correctly decided as the expense are of revenue nature and therefore we are inclined to uphold the same.- Decided in favour of assessee
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2018 (2) TMI 729
Taxability of the profit claimed to be earned by the assessee on sale of agricultural land - nature of land sold - Held that:- Although the assessee has once again relied on the documentary evidence filed by the assessee to show that the land in question sold by the assessee was an agricultural land as per the relevant land record, he has failed to adduce any evidence to show that the said land was actually utilised by the assessee for carrying out any agricultural activity during the period of two years immediately preceding the date of transfer. He has also not been able to produce any evidence to rebut or controvert the findings recorded by the Ld. CIT(A) in his impugned order that the land sold by the assessee was not fit to use for agricultural purpose. It is thus clear that the user condition to establish that the land sold by the assessee was an agricultural land is not satisfied in the present case - addition made by the A.O. on account of long term capital gain arising to the assessee from the sale of the said land confirmed - Decided against assessee Addition of car expenses claimed by the assessee for the involvement of personal element - Held that:- Since the personal use of the said vehicles by the assessee could not be ruled out, some disallowance for such personal use, in my opinion, was very much called for and since such disallowance made by the A.O. to the extent of about 25% for such personal use is fair and reasonable, I do not find any justifiable reason to interfere with the impugned order of the Ld. CIT(A) confirming the same Disallowance of maintenance cost of office equipment - Held that:- Admittedly there was a failure of the assessee to produce the supporting bills and vouchers for verification of the A.O. Keeping in view all it would be fair and reasonable to restrict the disallowance made by the A.O. out of maintenance cost of office equipment to ₹ 25,000/-. Addition on account of expenses on staff training which was done on the basis that the total expenditure incurred by the assessee on salary was only ₹ 2,08,142/- - Held that:- Keeping in view the nature of the assessee’s business, the entire disallowance made by the A.O. on account of staff training expenses is not justified and it would be fair and reasonable to restrict the same to 50%. Disallowance on account of loss claimed by the assessee on sale of assets - Held that:- As find that the said loss cannot be claimed by the assessee in case of depreciable asset after the introduction of the concept of “block of asset”. Even the assessee has not been able to bring on record anything to show that the relevant “block of asset” had got exhausted during the year under consideration so as to justify the claim of the assessee for loss on sale of assets. Therefore, find no infirmity in the impugned order of the Ld. CIT(A) upholding the action of the A.O. in disallowing the claim of the assessee for loss on sale of assets.- Decided against assessee Addition on fresh capital introduction - guinity of gift received and capacity of gift donor - Held that:- CIT(A) confirmed the said addition made by the A.O. after having found that the source of capital introduction explained by the assessee as gift from Shri Ashim Kumar Bandhopadhyay was not supported by any evidence and there was a failure on the part of the assessee to establish the capacity of Shri Ashim Kumar Bandhopadhyay to give such gift. Even at the time of hearing before the Tribunal, the learned counsel for the assessee has not produced any evidence to establish the capacity of Shri Ashim Kumar Bandhopadhyay to give the amount in question as gift to the assessee. Therefore, find no justifiable reason to interfere with the impugned order of the Ld. CIT(A) confirming the addition made by the A.O. - Decided against assessee.
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2018 (2) TMI 714
Allowable busniss expenditure - amount paid in lieu of the shares of the litigating parties - Held that:- The declaration cum indemnity of all the recipients/concerned parties is available. We have also perused the orders from Hon'ble High Court of Delhi and Bombay, which clearly indicates that the assessee duly paid the impugned amounts in lieu of the shares of the litigating parties and the expenses were incurred to safeguard the business interest of the assessee, which is permissible under the Act. No evidence in any manner has been adduced by the Revenue contradicting the factual finding recorded by the Ld. Commissioner of Income Tax (Appeal). Assessee entered into a development agreement on 29/10/2004 with Seth Industries Pvt. Ltd. at a consideration of ₹ 14.50 croers followed by supplemental agreement dated 22/02/2006 and deed of conveyance made on 08/11/2006 at agreed price of ₹ 23,04,80,219/- and the amount of ₹ 6.50 crores was made to the shareholders in respect of which supporting documents have been duly filed. It is evidently clear that the payment of ₹ 6.50 crores was made to these shareholders of Seth Industries Pvt. Ltd. for withdrawal of litigations and suits filed before Hon'ble High Court of Delhi and Bombay, so that the development of the said property could be smoothly undertaken without any hindrance, consequently, the expenditure was incurred to protect the business interest of the assessee and further to safeguard the assessee itself for further losses, resultantly, we find no infirmity in the order of the First Appellate Authority. The same is affirmed. The appeal of the Revenue is, therefore, dismissed.
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2018 (2) TMI 713
Eligibility for deduction u/s 54E - investment made of ₹ 50 lakhs each of different two Financial Years within a period of six months - Held that:- Prior to amendment, the time limit of ₹ 50 lakhs as prescribed u/s 54EC is per year and if the assessee invest ₹ 50 lakh each in two different years, otherwise fulfilling other conditions of section 54EC, thus assessee will be entitle to the benefit of ₹ 1 crore and not merely ₹ 50 lakhs. Thus, the limit of ₹ 50 lakh under the first proviso is not per assessee but per Financial Year. So far as, the amendment made by the Finance Act, 2014 is w.e.f. 01/04/2015 i.e. Assessment Year 2015-16 onwards and cannot be held to be retrospective. Thus, we hold that the assessee is entitle to deduction u/s 54EC as claimed by him and does not restrict the addition as has been done by the Assessing Officer - Decided in favour of assessee Disallowing of non-qualifying expenditure u/s 48 - Held that:- Before this Tribunal, claimed that the amount was paid through banking channel and thus so far as payment is concerned there is no dispute. We have also perused the observation made in para 5.1.1 of the impugned order. Considering the totality of facts and the assertion made by the assessee, we are of the view that the whole issue needs reexamination by the AO, afresh. AO is directed to examine the claim of the assessee for which due opportunity of being heard be provided and the true facts may be brought on record. AO is to also to examine the fact and the clauses mentioned in client agreement dated 27/05/2008 (alongwith the scope of work and other attendant facts) between Devidayal Sales Ltd. and Avandus Capital Pvt. Ltd. and genuineness of payment claimed to be made by the assessee. The assessee is also directed to furnish necessary evidence to substantiate the claim, thus, this appeal of the assessee is allowed for statistical purposes.
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2018 (2) TMI 696
Failure on part to deduct tax at source on interest payments as required u/s 194A - default u/s 201(1) - Held that:- CIT(A) has strangely proceeded to uphold orders of the AO stating that the assessee is in the regular practice of not providing information required for TDS verification before the AO and since the matter was getting barred by limitation, the AO’s action in passing the orders u/s 201(1)/201(1A) of the Act was upheld. On an appraisal of the material on record, we find that the coordinate bench of the Tribunal in the assessee’s own case for AYs. 2011-12 and 2012-13 had an occasion to deal with identical facts similar to that prevailing in the asst. years 2011-12 and 2012-13, where the AO was directed by CIT(A) to verify and examine the issue afresh and consider the assessee’s claim after affording the assessee adequate opportunity of being heard. As clear from the record as to how many cases of payment of interest the assessee was having Form No.15G/15H and whether these Forms were at all submitted with the jurisdictional CIT. CIT(A)'s rejecting the assessee’s claims which are presently before us for consideration, cannot be sustained in view of the observations by the CIT(A) of the lacuna and shortcomings of the AO in carrying out proper verification in the TDS made on interest payments. Set aside the impugned order of the CIT(A) for asst. year 2013-14 and restore the matter to the file of the AO for denovo adjudication of this matter, with the directions to verify the assessee’s TDS liability branch wise and deductee wise details of interest payments on the point of availability of Form No.15G/15H only in respect of cases when such Forms were before the respective CIT even though belatedly. Assessee’s grounds are treated as allowed for statistical purposes.
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2018 (2) TMI 694
TDS u/s.194C and 194A - non deduction of tds - Addition u/s.40(a)(ia) - recipient of the amount have paid the due taxes - Held that:- Hon’ble Delhi High Court in the case of Ansal Land Mark Township (P) Ltd. (2015 (9) TMI 79 - DELHI HIGH COURT) has held that the second proviso to Section 40(a)(ia) of the Act is declaratory and curative in nature and has retrospective in operation w.e.f 01.04.2005. Therefore, find that the order of the CIT(A) to that extent is not tenable. CIT(A) observed that no evidence was produced before him to show that the recipient of the amount have paid the due taxes by showing the amounts as their income in their return of income filed by them - restore this issue to the file of AO for examination as to whether the recipient of the amount have paid taxes on the amounts received from the assessee or not. If the AO finds that the recipients of the amount have paid due taxes on the amount received from the assessee, then no disallowance u/s.40(a)(ia) of the Act should not be made by the AO.- Decided in favour of assessee for statistical purposes. Addition u/s.36(1)(va) - assessee has not deposited the employee share of EPF within the due dates - Held that:- Following the decision in the case of Essae Teraoka (P) Ltd.vs DCIT (2014 (3) TMI 386 - KARNATAKA HIGH COURT) hold that employees contribution to PF and ESI is allowable deduction to the assessee if deposited before due date of filing of return u/s.139(1)of the Act. In the instant case, it is not in dispute that the contribution to PF was deposited by the assessee before due date of filing the return of income u/s.139(1) of the Act. Thus delete the disallowance of employees contribution to PF - Decided in favour of assessee
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Customs
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2018 (2) TMI 760
Refund claim - rejection for want of re-assessment under Section 27 of the Customs, Act, 1962 - Held that: - As this Court has found that the impugned order is not consonance with the earlier direction issued by the Court, in W.P.No.3486 of 2016, dated 18.04.2017, and the Department themselves have realized the same, this Court is inclined to allow the Writ Petition - the matter is remanded to the Lower Adjudicating Authority for de nova adjudication, who shall consider the petitioner's refund claim and proceed with in accordance with law - petition allowed by way of remand.
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2018 (2) TMI 759
Drawback - time limitation - demand on the ground that the petitioner failed to produce evidence of realization of export proceeds in respect of the exported goods within the period allowed under the Foreign Exchange Maintenance Act (FEMA) and Central Excise Duties and Service Tax Drawback Rules, 1995 - Held that: - if the petitioner produces evidence to show that the sale proceeds have been realized within the time provided by the R.B.I., which is one year in the instant case, then, the petitioner would be entitled for being repaid the amount, so recovered. However, it is not very clear as to whether such recovery has been done from the petitioner. The matter is remanded to the first respondent for fresh consideration - petition allowed by way of remand.
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2018 (2) TMI 754
Whether the Tribunal can override the statutory provisions enshrined in the law inasmuch as the second proviso to Section 114A of Customs Act, 1962, has been ignored in reducing the penalty wherein specific provisions are enlisted that the benefit of reduced penalty shall be available only when penalty is paid within 30 days of the date of communication of the Order which is not in the present matter? Held that: - the issue squarely covered by the decision in the case of Commissioner of Central Excise, Jaipur-I Versus. M/s. Lucky Plast Ltd. and others [2015 (9) TMI 825 - RAJASTHAN HIGH COURT], where it was held that The central excise duty is payable on the manufacture of excisable goods. It is not payable on the issuance of the show cause notice, or at any time thereafter. The Proviso to Section 11AC is applicable, if the payment is made within 30 days of communication of the order levying penalty, and not from the date of issuance of the show cause notice. Appeal allowed - decided in favor of Revenue.
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2018 (2) TMI 753
Smuggling - illegal export of red sanders in artifact form - Held that: - only where a company, which as per the explanation includes also a firm, was found guilty of an offence would those in charge of and responsible to it in the conduct of its affairs, be liable - As in the instant case, the firm M/s. Rare Crafts, of which petitioners are partners has not been arrayed as an accused, no liability could be fastened to petitioners. - revision allowed.
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2018 (2) TMI 752
Smuggling - Gold - petitioners’ case is that while it is true that they were carrying gold, this was in no sense contraband and there was no attempt to smuggle gold - denial of opportunity to declare their goods because they were purportedly arrested at the aerobridge ramp at the exit of the aircraft even before they arrived at the immigration counters and before they could approach the custom desks to declare their goods - Held that: - it is always open to the Adjudicating Authority, after viewing the additional material, to reiterate his previous conclusion if he finds that there is no material on DVDs to support the petitioners’ case, or to hold that in any view of the matter, the petitioners’ submissions even after viewing the sufficient material cannot be sustained - appeal allowed by way of remand.
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2018 (2) TMI 751
Suspension of CHA License - Regulation 19(2) of CBLR, 2013 - time limitation - Held that: - In fact, there is a gross delay in concluding the enquiry for which there is no explanation. Even as of today, no final order has been passed on the basis of the Enquiry Report. Therefore, there is no reason to interfere with the findings of fact and ultimate order passed by the Tribunal - appeal dismissed.
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2018 (2) TMI 750
Recovery of differential duty - fulfillment of export obligation - Held that: - Admittedly, the petitioner has not replied to the show cause notices issued to them. The redemption certificates, which are required to be submitted by the petitioner, to fulfil the export obligations, has been obtained by the petitioner, only after the first respondent-Original Authority passed the orders-in-original - in order to provide an opportunity to the petitioner, this Court is inclined to set aside the orders impugned herein and remand the matters to the first respondent-Original Authority to redo the entire exercise - appeal allowed by way of remand.
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2018 (2) TMI 749
EPCG Scheme - Whether the goods declared for export under EPCG Scheme as Marble Block, which were subsequently found as “Silicified Limestone” on the basis of GSI test report are to be treated as “Marble Block”? - Held that: - The man has taken license or mining lease from State of Rajasthan as a marble exporter but merely chemical test has given it limestone as discussed by the Tribunal by referring to meaning of Wikipedia the marble is also one kind of limestone - the view taken by the Tribunal is just and proper - appeal dismissed.
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2018 (2) TMI 703
Export of Basmati Rice - Circular No. 33(RE-08)/2004-09 dated 30/09/2009 - Held that: - Tribunal had directed to get the samples tested through Agmark approved laboratories in view of the fact that M/s SGS India Pvt. Ltd. was not a qualified laboratory as per the Circular issued by the DGFT Revenue should not have once again relied on the test report given by M/s SGS India Pvt. Ltd. for adjudication in the present matter - It was held by this Tribunal by affirming the order dated 31/03/2010 passed by ld. Commissioner (Appeals) that report given by M/s SGS India Pvt. Ltd. was not qualified to adjudicate the matter - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 686
Penalty u/s 114 (i) of the CA 1962 - main allegation alleged against the appellant is that the appellant failed to ensure that proper authorization was taken from Shri Okora Wisdom before accepting the consignment from their co-loader M/s. DPEX Worldwide Express Pvt. Ltd. for export to Indonesia - Held that: - Since it is brought out from the evidence that the shipping bill did not contain the signature of the exporter authorizing the export of the goods /reading books. It is very clear that there has been contravention of law of Customs Act by the appellant - penalty upheld - appeal dismissed - decided against appellant.
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2018 (2) TMI 682
Speaking order - the Bill of Entry was assessed based on the declaration and check list submitted by the appellant themselves and also considered that there was no request from the appellant for reassessment or for issue of speaking order - Held that: - keeping in mind the ratio of the judgment of the Hon’ble Supreme Court in Priya Blue Industries [2004 (9) TMI 105 - SUPREME COURT OF INDIA], where it was held that Once an Order of Assessment is passed the duty would be payable as per that order. Unless that order of assessment has been reviewed under Section 28 and/or modified in an Appeal that Order stands, the matter is remanded to the lower appellate authority for considering the appeals filed by the appellant on merit - appeal allowed by way of remand.
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Insolvency & Bankruptcy
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2018 (2) TMI 731
Insolvency resolution process - existence of default in payment of debt - delivery of demand notice to the corporate-debtor - Held that:- There is no averment in the objections that the address of the corporate-debtor as furnished by the operational creditor was inicorrect. Rather, there is no challenge with regard to the delivery of the entire paper book, which was sent at the time of filing the instant petition and also receipt of notice of the instant petition issued by the Adjudicating Authority at the same address. Anyhow, the tracking report of the postal department with regard to delivery of the demand notice is the conclusive proof of the delivery and this objection seems to have been taken just for the sake of it. The resolution process can be initiated on occurrence of the default by the corporate-debtor as per Section 8(1) of the Code. Admittedly the respondent-corporate debtor has committed default as according to the respondent itself, there is an outstanding liability of ₹ 68,20,235/- as on 11.05.2017 as per its own ledger account as at Annexure R-1 attached with the objections. The application filed in Form No.5 is complete in all respects as the required information has been furnished. The petitioner has also complied with various clauses (a), (b) and (c) of Section 9 (3) of the Code as already discussed. The petitioner cannot be forced to buy goods from the respondent-corporate debtor and it has every right to claim the outstanding amount which is overdue. The petitioner admittedly stopped making purchases from the respondent-corporate debtor from May 2017 and sent the demand notice under Section 8(1) of the Code which would have been a sufficient alert for the respondent, to repay the outstanding amount. The respondent cannot raise a voice to say that there was no term fixed for payment for the outstanding amount on the ground that the transactions between the parties continued in the normal course of business since 2012 and that various payments have been made from time to time as reflected from the ledger account of both the parties. The above contention cannot be said to raising a 'dispute' which may be covered within the definition of the term as defined in sub-section (6) of Section 5 of the Code. If there is a difference of about ₹ 2 lacs in the total outstanding amount as per the books of account of the parties, that is for the Interim Resolution Professional or Resolution Professional as the case may be, to determine. The term 'default' is defined in sub-section (12) of Section 3 of the Code as per which non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the case may be. One of the objections raised by the corporate debtor that there is concealment of material fact by the operational creditor with regard to the purchases made by the petitioner from the respondent is not acceptable as there is a categorical assertion of the petitioner that the goods/materials were supplied as per the invoices/bills (sales) to the corporate debtor and thereafter against the entire outstanding payment of supply of goods/materials there was adjustments/set-off in the books of account of the operational creditor as payments/part payments of entire outstanding amount by way of purchase of items of corporate debtor as per the summary statement. So, there is no force in the contention that there is concealment of the material facts. Instant petition deserves to be admitted. The instant petition is admitted declaring moratorium in terms of sub-section (1) of Section 14 of the Code.
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2018 (2) TMI 692
Corporate Insolvency Resolution Process - proof of inability to pay debt - Held that:- This Bench is satisfied that the Corporate Debtor is in default of liquidating its debt. The financial creditor is therefore entitled to the prayer made. They have proposed the name of Mr. Pinaki Sircar, 31/7, N C Chawdhary Road, Kolkata-700042; Email: [email protected], Contact No.: 9830011159; IP Registration No.: IBBI/IPA-002/IP-N00063/2016-2017/10141 as the Insolvency Resolution Professional. The aforesaid IRP has given his consent as well as certified that he is eligible to be appointed in accordance with the provisions of the Insolvency and Bankruptcy Code of India and that there are no disciplinary proceedings pending against him is in record. We hereby Admit the present petition. A moratorium in terms of Section 14 shall come into effect forthwith
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2018 (2) TMI 684
Corporate Insolvency Resolution Process - existence of default - Held that:- The total amount of debt granted and disbursed has been elaborately explained and for further details reference has been made to Annexure A-2 which shows that CC facility was given by disbursing ₹ 7 crores on 04.04.2017. Another facility described as LC4 A/cs account ₹ 50 crores was given and the amount was disbursed on 02.03.2015. Likewise, the amount of default has also been elaborately given along with the dates which can be ascertained by referring to Annexure A-3. Therefore, we do not find any substance in the objection raised by the Corporate Debtor. Another objection raised by the Corporate Debtor is that the petition was not maintainable without joining the lead Bank would not detain us as Section 7 of the Code itself shows that a financial creditor either by itself or jointly with other financial creditor may file an application for initiating Corporate Insolvency Resolution Process against a Corporate Debtor when a default has occurred. Therefore, there is no obligation to join the lead Bank. A certificate of registration dated 14.09.2017 issued to Mr. Gian Chand Narang by the Insolvency and Bankruptcy Board of India has been placed on record vide aforesaid diary number.According to the declaration made, by Mr. Gian Chand Narang, no disciplinary proceedings are pending against him nor he is a related party to ‘Financial Debtor’ namely NCML Industries Limited nor he is an employee of the NCML Industries Limited. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. Thus this petition is admitted
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FEMA
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2018 (2) TMI 762
Right to cross-examine - Cross examine the witnesses whose statements were recorded under Section 37 of FEMA and whose statements have been relied upon in the complaint - complaint alleges that the provisions of section 3(b) of the FEMA have been contravened by the petitioner by making a payment to Cricket South Africa (CSA) a person residing outside India, without permission of the Reserve Bank of India (RBI) and that is inter alia apparent from an agreement dated 30th March, 2009 executed between the BCCI and Cricket South Africa - Held that:- (i) The impugned order dated 10th July, 2015 and the contents of the communication are quashed and set aside. (ii) We direct respondent no. 1 to issue summons to the persons whose statements have been recorded and permit the advocates for the petitioner to cross-examine them. However, we are of the firm view that neither the petitioner nor the respondents can delay the proceedings any further. (iii) We are indeed surprised that the show cause notice issued way back on 25th November, 2011 remains unadjudicated till date. We do not see how even the respondents agreed to the postponement of the proceedings before this court and in a petition filed on 21st August, 2015. Since this petition was pending for more than two years, the adjudication has been delayed further. Hence, to ensure that the adjudication proceedings come to an end expeditiously, we direct that the petitioner will appear before the adjudicating authority on 14th February, 2018 at 10.30 a.m. and the adjudicating authority shall issue summonses in the requisite forms to the persons whose statements have been recorded and are being relied upon to appear before it for cross-examination and such cross examination shall be held on or before 2nd March, 2018. (iv) The cross-examination shall be conducted and concluded in two or three sittings and positively by 13th March, 2018. (v) After the cross-examination is conducted and further opportunities, as envisaged by the rules, are provided, we direct that the adjudication proceedings shall be concluded as expeditiously as possible and in any event by 31st May, 2018. No extension shall be granted in any circumstances. (vi) We clarify that we have not expressed any opinion on the rival contentions as far as the merits of the allegations in the show cause notices. We also clarify that each of them are kept open for being raised at an appropriate stage before appropriate forum. We must indicate that it is because of the acts and deeds of the BCCI in relation to a tournament styled as IPL that all these proceedings had to be initiated and now conducted in accordance with the FEMA. If IPL has led to serious breaches and violations of the FEMA, then, it is high time the organisers realise that after 10 years of holding such tournaments what we have achieved can be termed as a gain or advantage or benefit for they are outweighed completely by the resultant illegalities and breaches of law, which are projected in several courts consuming a lot of precious judicial time. If the IPL has resulted in all of us being acquainted and familiar with phrases such as "Betting", "fixing of matches", then, the RBI and the Central Government should at least now consider whether holding such tournaments serves the interest of a budding cricketer, the sport, the game itself. There is a auction and buying and selling of young cricket players by business houses and chubs. Apart from huge money involved, the tournament has brought with it crimes and casualties in the form of ban on clubs and players allegedly involved in wrong doing and breaching of rules and regulations
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Service Tax
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2018 (2) TMI 747
Short payment of service tax - main point of the demand notice is that the appellant-assessee did not discharge the Service Tax on the full consideration shown as income in their accounts for rendering various taxable services - Held that: - Concept of reverse charge has been examined and upheld for the service imported by the appellant-assessee. We are in agreement with the learned AR that mere non mentioning of legal provision will not vitiate the proceedings when the gist of the provisions is available in the allegation and discussions recorded in the impugned order. Revenue neutrality - Held that: - Revenue neutrality per se cannot be a ground for non payment of any tax which is otherwise payable. If the view of the appellant is accepted then the basis of Cenvat Credit Rules, 2004 will became redundant - appeal of assessee dismissed. Penalty u/s 78 - Held that: - There is a categorical, factual finding in the impugned order to the effect that the show cause notice did not allege any conscious act on the part of the appellant-assessee which will constitute fraud, collusion or willful misstatement etc. with intend to evade payment of tax - penalty not leviable. Appeal disposed off.
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2018 (2) TMI 746
Services to cellular phone exporters on behalf of BPL Mobile Cellular Ltd. and were also engaged in collection of bill amounts from the customers and the like for which they receive commission and incentives - Department took the view that the said amounts would constitute taxable income exigible to service tax levied under BAS for the period 01.07.2003 to 09.07.2004 on taxable income of ₹ 20,96,145/- - Held that: - the value of commission and incentive received by the appellant from BPL Mobile Cellular Ltd. will definitely form taxable income for the purposes of levy under "Business Auxiliary Service" during the impugned period. Extended period of limitation - Held that: - there is no suppression or mens rea on the part of the appellant, a finding which has not been appealed against by the department. Hence there cannot be any invocation of extended period of limitation. Penalty u/s 76 - Held that: - there was reasonable cause for the failure to discharge service tax liability and hence the penalty imposed under Section 76 of the Act, is also set aside. For the purpose of calculation of demand for the normal period, matter is remanded - appeal allowed.
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2018 (2) TMI 733
Levy of service tax - Renting of Immoveable Property - Mandeep Keeper - Advertisement - Supply of Tangible Goods - demand on the deposit - Held that: - As regard demand on the deposit, the adjudicating authority has not verified relevant fact - matter remanded to verify the facts. Land rent and bazaar land rent - Held that: - no evidence is on record to show that on what account the land rent and bazaar land rent is collected - therefore the Commissioner needs to verify this aspect. Slaughter house fees Held that: - as per the Schedule Twelfth of Article 243W, Regulation of Slaughter houses is the sovereign function of the Municipal Corporation. Therefore the fees collected towards the Regulation of Slaughter houses, the demand of Service Tax is hereby set aside. Advertisement - Held that: - It is observed from the receipt of the Municipal Corporation i.e. appellant that the amount towards so called advertisement was collected as Jahirat Kar (Advertisement Tax) - the advertisement tax being statutory tax levy by the Municipal Corporation should not be liable to service tax. Penalty - Held that: - appellant is a Government Municipal Corporation and not an individual. It cannot be imagined that the Government itself involved in suppression of fact with intent to evade service tax. Being non-existence of malafide intention no penalty can be imposed. Appeal allowed in part - part matter on remand.
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2018 (2) TMI 728
Monetary limit for filing appeal - Instructions dated 17-12-2015 issued by the C.B.E. & C - Held that: - the C.B.E. & C. in exercise of the powers conferred by Section 35R of the Central Excise Act, 1944 fixing monetary limits below which appeal shall not be filed in the Tribunal. The monetary limit has been enhanced to ₹ 10 lakhs through the said Instructions. Further, the Board vide letter dated 01.01.2016 clarified that the said instructions will apply to all pending appeals in CESTAT - the present appeals is not falling under any one of the excluded category mentioned in the above Instructions - appeal dismissed - decided against Revenue.
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2018 (2) TMI 726
GTA Service - abatement at 75% in terms of N/N. 32/2004-ST - reverse charge mechanism - Held that: - The Tribunal in number of cases has held that where the GTA was not registered with the Department, there was no question of availment of credit - decision in the case of Lykes Line Ltd. Versus Commissioner of Service Tax, Mumbai-I [2016 (11) TMI 192 - CESTAT MUMBAI] referred. The appellant had produced a general certificate of the GTA indicating that no credit was being availed by him - if a certificate to the effect that no credit has been availed by the GTA stands produced in respect of a few number of invoices, the same would reflect upon the same fact that credit was not being availed in respect of balance invoice/consignment notes also. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 725
Refund claim - services utilized for export purposes - N/N. 17/2009-ST dated 07.07.2009 - denial on account of nexus - Held that: - Revenue has not been able to place any evidence on record to show that the disputed services were not utilized for export purposes - the appellants have been able to adequately substantiate that services were utilized for export purposes - refund allowed - appeal dismissed - decided against Revenue.
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2018 (2) TMI 722
SEZ unit - refund claim - N/N. 9/2009-S.T. dated 3rd March, 2009 - rejection on the ground of time bar - Held that: - reliance placed in the case of M/s. Cumins Technologies India Pvt. Ltd. Versus C.C.E. & S.T., Bhopal [2016 (12) TMI 794 - CESTAT NEW DELHI], where it was held that rejection of refund claim on the ground of limitation will not hold good and the application should merit consideration for grant of refund - the matter is required to be adjudged in the light of the above mentioned decision - appeal allowed by way of remand.
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2018 (2) TMI 720
SSI exemption - rent a cab service - abatement of 60% - whether for the benefit of exemption for small scale service provider in terms of N/N. 6/2005-ST, the aggregate value should be computed after allowing 60% of abatement or the total value so received by the service provider? - Held that: - 60% of the consideration received is exempted from the whole of the service tax leviable theron. Therefore, for the purpose of calculation of aggregate value as per said explanation B 60% of the consideration received by the appellant for which exemption was admissible does not need to be taken into consideration. After excluding 60% consideration the aggregate value of clearance for the year 2007-08, 2008-09 and 2009-10 in the present case is within the permissible limit for the exemption under the said N/N. 6/2005-ST dated 01.03.2005 - appeal allowed.
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2018 (2) TMI 719
Liability of service tax - reverse charge mechanism - services of a transporter for movement of their inputs - Held that: - there is no dispute about the fact that the service tax deposited by the transporters with the department. As such the objection of the Revenue cannot be appreciated, as it would amount to double deposit of the same amount of service tax on the services - appeals are allowed by restoring the orders of the original adjudicating authority.
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2018 (2) TMI 717
Refund claim - Rule 6(3) of Cenvat Credit Rules, 2004 - inclusion of cost of medical examination/test reports received by the appellant from LIC - Held that: - sub Rule (3) of Rule 6 of Cenvat Credit Rules, 2004 was not applicable in the present case - I deleted that part from the impugned Order-in-Appeal which relates to inclusion of cost of medical examination and test reports received by the appellant from LIC ordered to be included in the taxable value since, the same not subject matter of litigation in the present case - appeal allowed.
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2018 (2) TMI 689
Refund of unutilized CENVAT credit - N/N. 27/2012-CE(NT) dated 18/06/2012 - whether refund can be granted to the respondent, when they have debited the amount not on the dated of filing of refund claim but on a later date? - Held that: - the condition prescribed in the said notification having met, although on a later date the failure to debit on the date of filing the refund is not such a lapse that it would debar the respondent from the refund - issue decided in the case of Sandoz Pvt. Ltd. Versus Commissioner of Central Excise, Belapur [2015 (10) TMI 882 - CESTAT MUMBAI], where it was held that The failure to debit on the date of filing the refund claim is not such a lapse that it would debar the appellants from the refund - appeal dismissed - decided against Revenue.
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2018 (2) TMI 687
Classification of services - agreement with M/s. MALCO to carry out mining services - Business Auxiliary Services or mining services - Held that: - This Tribunal in the respondent’s own case, M/s. Thirumala Enterprises Versus Commissioner of Central Excise, Salem [2018 (2) TMI 288 - CESTAT CHENNAI] has set aside the demand for the earlier period holding that activity of loading and transportation of limestone and rejects from mine head to crushing premises under taken within mining area and covered by Mines Act, 1952 would not be taxable under Business Auxiliary Service - appeal dismissed - decided against Revenue.
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2018 (2) TMI 685
Business Auxiliary Service - commission paid to foreign based commission agents, who were placing export order with them - Held that: - rules cannot be made to make service recipient liable to pay service tax, when Finance Act, 1994 makes a service provider liable to pay the same - the said SCN did not invoke provisions of Section 66A for demand of said service tax - SCN not valid - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 681
Valuation - Cargo handling services - includibility - crab hire charges - crane hire charges - labour charges collected from their customers - Held that: - the entire case sought to be built by the department against the respondent is based on presumption that the crane, grab and labour charges indicated in the P&L Account might/would have been part of the Cargo Handling Services and / or Maintenance of Repair services. It is interesting to note that even the SCN is not able to make up its mind into which service these charges would fall. The allegation built up on assumption and presumption is not sustainable in law - appeal dismissed - decided against Revenue.
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2018 (2) TMI 680
CENVAT credit - input services - Business Support Services - Transport of Goods by road - Sponsorship Services - denial on account of nexus - Held that: - these services have been availed for providing output services. Services availed for meetings and trainings held in hotel - Held that: - similar issue came in the case of Hindustan Petroleum Corporation Ltd [2016 (9) TMI 680 - CESTAT HYDERABAD], where it was held that the specific inclusion of services used in relation to “coaching and training”, I hold that the appellant is eligible to avail the aforesaid credit on this item - credit allowed. Repairs and renovation services as well as Manpower Recruitment and Supply Services - Held that: - These fall within the definition of input services and are covered by various decisions - the denial of credit is unjustified. Appeal allowed.
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Central Excise
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2018 (2) TMI 727
CENVAT credit - duty paying documents - whether endorsed invoices can be held to be valid documents for the purpose of availment of Cenvat Credit during the relevant period? - Held that: - the Revenue itself endorsed the invoices at the request of the Sahyadri Sahkari Sahkkar Karkhana Ltd. If they would have objected at that particular point of time, said sender of the capital goods would have issued fresh invoices. There is no dispute about receipt of the capital goods and their duty paid character and only the technical objection is being adopted by the Revenue for denial of the Cenvat Credit, which is otherwise available to the appellant - It is well settled law that substantive benefits cannot be denied by raising grounds of technical procedural violation, if any. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 724
Construction of Residential Complex Services - difference in figures in profit and loss account and the figure in ST-3 return - Held that: - the demand cannot be raised on the basis of comparisons of ST-3 Returns and Profit & Loss Account, without there being any other independent corroborative evidence - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 723
CENVAT credit - Electricity consumed by them captively for the manufacture of their final dutiable product - extended period of limitation - Held that: - demand is barred by limitation as no ground is raised by the Adjudicating Authority for invoking the longer period. On merits also, the Hon’ble Chhattisgarh High Court in the case of UNION OF INDIA Versus HEG LTD. [2009 (11) TMI 648 - CHHATTISGARH HIGH COURT] held that an asessee would be entitled to the credit of duty paid on such capital goods. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 721
CENVAT credit - capital goods - plates, supporting structures and fabricated tanks etc., used by the appellant in their factory for manufacture of sugar and molasses - Held that: - the denial of credit on the ground that proper intimation was not given under Rule 57(T) cannot be appreciated inasmuch as the same is only a procedural violation which substantive benefit should not be denied. CENVAT credit to the extent of ₹ 1,59,900/- stands disallowed for non production of proper documents - matter remanded to the lower authorities with directions to the appellant to produce the documents in support of their claim. Appeal allowed in part and part matter on remand.
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2018 (2) TMI 718
CENVAT credit - input removed as such - Held that: - In the present case, Revenue could not establish that inputs as such were cleared by the manufacturer-appellants. Therefore, the said Show Cause Notice is not sustainable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 716
Confiscation - goods still lying in the factory - penalty - Held that: - SCN proposed confiscation of final product which were still within the factory and such proposal through the said SCN was raised after the appellant had obtained registration under Central Excise Law - In the present case said finished goods were still lying in the factory. Therefore, they were not the goods on which duty was evaded and, therefore, they were not liable for confiscation and hence the penalty was not imposable on them - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 715
Clandestine removal - it has been alleged that the Appellant-ship breakers have indulged in clearance of scrap/steel plates, clandestinely, without payment of duty - Held that: - In the absence of the detailed analysis of the evidences, it is difficult to ascertain the facts alleged in the SCN. It is prudent to remand the matters to the adjudicating authority, to analyse the evidences in detail and record findings on the said evidences relied upon in raising the demands and proposing penalties against the respective Appellants - Appeal allowed by way of remand.
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2018 (2) TMI 712
CENVAT credit - job-worker - denial of credit on the ground that respondent is a job-worker - Held that: - the assessee-respondent has cleared the excisable goods after payment of duty. When it is so, then assessee-respondent is entitled to the CENVAT credit as per the provisions of CCR 2004 - appeal dismissed - decided against Revenue.
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2018 (2) TMI 711
Penalty - duty with interest paid before issuance of SCN - Held that: - similar issue decided in the case of CCE & C., AURANGABAD Versus MATSYODARI STEEL & ALLOYS PVT. LTD. [2007 (7) TMI 183 - HIGH COURT BOMBAY], where it was held that no penalty u/s 11AC is imposable in view of payment of duty before issuance of show cause notice - Except cancellation of penalty impugned order is hereby sustained - appeal allowed in part.
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2018 (2) TMI 710
Eligibility of concessional rate of duty on domestic clearances - whether ‘barium chloride’ and ‘corundum sand’ are raw materials and not consumables? - similar issue decided in appellant own case Premium Tools Pvt Ltd, Sham Chandrakant Keluskar Versus Commissioner of Central Excise & Customs, Nasik [2017 (1) TMI 290 - CESTAT MUMBAI], where it was held that The context of the exemption afforded to materials imported by ‘export oriented units’ and the condition stipulated for eligibility to excise duties, instead of half of the aggregate of duties of customs, that ‘raw materials’ be domestically procured does not permit the latitude of treating ‘consumables’ as ‘raw materials.’ - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 709
Attachment of property - case of assessee is that Section 11 proviso is not applicable where the department has taken the action as there is no business or trade transfer - Held that: - In the instant case, the recovery is against M/s Ralliwolf Limited and the department has attached its property to protect the interest of the Revenue/recovery - When M/s Rallifwolf Limited is the owner as on today and also has the liability against the department then department has rightly attached the property to recover the said dues. The property was rightly attached - appeal allowed - decided in favor of Revenue.
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2018 (2) TMI 708
Refund claim denied on the premise that appellants have failed to co-relate the input credit availed by them on export goods - Held that:- Identical issue has already come up before the Tribunal in Repro India Ltd [2013 (4) TMI 894 - CESTAT MUMBAI] as held this case refund of input was denied on the premise that appellant failed to co-relate the input credit availed by them towards goods exported which needs examination at the end of adjudicating authority. Therefore, it would be appropriated and in the interest of justice to remand the matter back to the adjudicating authority to examine the issue of co-relation of Cenvat Credit availed by them towards goods exported. Thus we set aside the impugned orders and remand the matter back to the adjudicating authority as discussed hereinabove.
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2018 (2) TMI 707
Monetary limit of filing appeal - Held that: - the total demand, in the instant case, is only 25,000/- which is less than 10 lakhs - As per the national policy of litigation, the department is not supposed to file the appeal in such type of cases. The appeal is not maintainable in view of the Board’s Circular F. No. 390/MISC/163/ 2010/ JC dated 17th December 2015 - appeal dismissed.
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2018 (2) TMI 706
Time limitation - Demand subsequently has been raised on the basis of the interpretation of the word “feedstock”, used in the notification - Held that: - no evidence has been brought forward to suggest that the appellants have used the furnace oil for the purpose other than whatsoever declared in details to the department. Therefore, demand beyond normal period would not sustain. There is no reason to interfere with the impugned order and the same is hereby sustained - appeal dismissed - decided against Revenue.
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2018 (2) TMI 705
Matter was remanded for the purpose of requantification - Even today, in the revised list, none is present for the appellant nor any adjournment application is available on record. It shows that the appellant has no material to support its claim. It supports the finding of the adjudicating authority. When it is so, there is no reason to interfere with the findings recorded in the impugned order which is hereby sustained along with the reasons mentioned therein. Appeal dismissed.
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2018 (2) TMI 704
Business Auxiliary Services - consideration received for transfer of rights and privileges of export of sugar quota - Held that: - the issue involved in the case of Commissioner of Central Excise & Service Tax, Meerut-I Versus M/s Bajaj Hindusthan Sugar Ltd. [2017 (10) TMI 1055 - CESTAT ALLAHABAD] was same regarding rights and privileges of export of sugar quota and it was held that the said transaction is sale of goods and there was no service involved - appeal dismissed - decided against Revenue.
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2018 (2) TMI 702
CENVATcredit - input - Sugar Sales Commission - It appeared to Revenue that Sugar Sale is not input and service and therefore, said Cenvat credit was not admissible - Held that: - Since the issue is no more res-integra, following decision of this Tribunal in the above stated case of Birla Corporation Ltd. [2014 (6) TMI 385 - CESTAT NEW DELHI], where it was held that commission agents service would be cenvatable as the term ‘advertisement and sale promotion’ was there in the definition of input service even during period prior to 1.4.2011 - appeal dismissed - decided against Revenue.
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2018 (2) TMI 701
Transfer of accumulated CENVAT credit to other unit - denial on the ground that the same was availed by them after surrender of their registration - Held that: - if the said credit was available to the appellant prior to their registration, the fact of surrendering of licence should not be adopted and the appellant request to transfer the credit should not be denied on such hyper technical grounds. It is well settled law that substantive benefit should not be denied on the ground of procedural and technical violations, if an assessee is otherwise entitled to the same. Inasmuch as the impugned orders have not verified the above fact, it is fit to set aside the impugned order and remand the same for verification of the above issue - appeal allowed by way of remand.
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2018 (2) TMI 700
Remission of duty - Due to summer season, there is auto combustion in the open pit, in which molasses was stored and the same turned into black carbonized lumps as residue - Held that: - the said Section talks about the recovery of the dues for which a Civil case is required to be filed by the Revenue. The issue in the present case is first to decide the liability of the person who has to pay the duty. The matter to the Commissioner (Appeals) for fresh consideration - appeal allowed by way of remand.
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2018 (2) TMI 699
CENVAT credit - scope of SCN - Held that: - in the impugned order there is no reference to any notice issued to the service provider or any case made out against them. The said fact is required to be verified by the authorities below inasmuch as the availment of credit by the present appellant is dependent upon the same - appeal allowed by way of remand.
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2018 (2) TMI 698
Valuation - includibility - Revenue entertained a view that the differential freight amount is required to be added to the assessable value of the goods and duty is to be paid - Held that: - The Hon'ble Supreme Court in the case of Baroda Electric Meters Ltd. vs. Collector of Central Excise [1997 (7) TMI 126 - SUPREME COURT OF INDIA] has held that in case the freight expenses incurred by an assessee are less than the freight expenses recovered by him from his customers, the differential amount will not be includable in the assessable value, since the duty of excise is on manufacture and not on profit made by a person on transportation - amount not includible. Further, as the exports were under bond and no duty was payable, the question of adding differential amount in assessable value and paying duty on the same, does not arise. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 697
Refund claim - duty paid under protest - time limitation - Held that: - the provisions of Section11B provide a period of one year, for claiming refund, from the relevant date. The relevant date also stands prescribed in the said Section. However, if the duties have been paid under protest, the period of one year is not applicable - matter remanded for reconsideration - appeal allowed by way of remand.
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2018 (2) TMI 695
Classification of goods - sugar syrup - captive consumption - whether the sugar syrups prepared in the assessee's factory, who is primarily engaged in the manufacture of biscuits, are classifiable under Tariff Item 17029090? - Held that: - this Bench of the Tribunal in the appellants own case, Swati Biscuit Manufacturing Company And Others Versus Commissioner of Customs, Central Excise And Service Tax, Allahabad And Vice-Versa [2018 (2) TMI 522 - CESTAT ALLAHABAD] has held that the sugar syrup in question is not marketable and hence not excisable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 693
100% EOU - whether the respondents are liable to pay education cess for the third time while calculating the duty demand? - Held that: - once education cess is added to the customs duties to arrive the aggregate of customs duties, the question of charging education cess again does not arise - reliance placed in respondent own case EID Parry (India) Ltd. Versus CCE & ST, LTU Chennai And Vice-Versa [2017 (9) TMI 876 - CESTAT CHENNAI] - appeal dismissed - decided against Revenue.
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2018 (2) TMI 691
CENVAT credit - fake invoices - It was alleged that the appellant did not receive the goods but have taken Cenvat credit on the strength of invoices without receipt of goods - Held that: - the Central Excise Officers did not carry out any investigation at the end of M/s Shanker Traders - it is not conclusively established that the appellant did not receive the inputs - the SCN dated 20/04/2012 is not sustainable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 690
CENVAT credit - fake invoices - It was alleged that the appellant did not receive the goods but have taken Cenvat credit on the strength of invoices without receipt of goods - Held that: - the Central Excise Officers did not carry out any investigation at the end of M/s Shanker Traders - it is not conclusively established that the appellant did not receive the inputs - the SCN dated 20/04/2012 is not sustainable - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 688
CENVAT credit of Education Cess & Secondary and Higher Education Cess paid on CVD - It appeared to Revenue that in terms of N/N. 13/2012 & 14/2012-Cus both dated 17/03/2012, the said both cesses on CVD were exempted - Held that: - there are plethora of decisions which have held that the recipient of inputs cannot do the re-assessment of the goods at the end of input manufacturer. Even if the amount of duty is paid excess on the inputs unless it is refunded the recipient of such inputs is entitled to the entire Cenvat credit of duty paid - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 683
Remission of duty - Rule 21 of the Central Excise Rules, 2002 - storage loss - molasses - C.B.E.C. Circular No. 261/15/82/CX-8 dated 18/07/1983 & Circular dated 06/02/1982 - Held that: - The said C.B.E.C. Circular No. 261/15/82/CE-13 dated 18/07/1983, has clarified that storage loss of Molasses up to 2% is condonable, when Molasses are stored in Pucca Pits or Steel Tanks. In the present case, the loss stated in the said application dated 18/03/2013 was less than 2%. Therefore, the said loss was condonable. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 679
Valuation - discount of 1.9% given, to get the early payment - includibility - Held that: - Clearly since the Appellant had consented to receive payment early from Tata Motors by agreeing to get the Hundi discounted and in terms of such understanding provided discount, it cannot be said that M/s Tata Motors has incurred any expenditure on behalf of Appellant - demand do not sustain - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 678
CENVAT credit - input service distributor - distribution of credit without excluding that proportion of tax paid on input services attributable to ‘trading’ in goods which, being an exempt activity, was not within the scope of entitlement - Held that: - There is no dispute that the headquarters of the appellant carries on trading and that the services procured there cannot but have been used in relation to trading also. The appellant has failed to maintain separate set of accounts and is unable to compute the value of input services that was rendered to them for such activity. Therefore, the availment, and the distribution thereof, are not in accordance with law - appeal dismissed - decided against appellant.
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CST, VAT & Sales Tax
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2018 (2) TMI 767
Penalty u/s 15-A (I)(o) of the Act - case of petitioner is that Form-31 is to be filled by seller and merely for the reason that details are not correctly filled, it would not mean that there was intention to evade payment of tax - whether penalty justified? - Held that: - Tribunal, however, has observed that there is no check post between Faridabad and Noida, therefore, possibility of misuse of Form-31 cannot be ruled out. The specific finding by the first appellate authority that there was no such misuse of form-31 by the assessee in the past, has neither been dealt with nor has been reserved. Even otherwise sales and purchase of earth moving equipments and its spare parts are made through banking transactions and are subject to the provisions of Central Excise Act. The mere fact that cheque number is not specified in the order of first appellate authority would not justify inference that the transaction was not a banking transaction. Tribunal is not justified in restoring penalty upon the assessee under Section 15-A (i)(o) - decided in favor of assessee.
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2018 (2) TMI 757
Demand of interest - Whether the Hon’ble Tribunal has erred in law and in facts in deleting levy of interest u/s 30(5) of the Gujarat Value Added Tax Act in respect of tax paid on turnover related to marketing scheme? - Held that: - the Tribunal found that there was full compliance with the provisions of sub-section (2) of section 30 of the Act and, therefore, sub-section (5) thereof was not attracted. In view of the fact that the respondent dealer had furnished returns as required under sub-section (1) of section 29 of the Act and had paid into the Government treasury the whole of the amount due from him according to such return and had duly complied with the provisions of sub-section (2) of section 30, no infirmity can be found in the impugned order passed by the Tribunal in holding that the provisions of sub-section (5) of section 30 would not be attracted - the question does not merit acceptance. Whether the Hon’ble Tribunal has erred in law and in facts in reversing the order of the first appellate authority and deleting levy of tax, interest and penalty to the extent of amount of stock difference of ₹ 7,50,000/- which was found by Income Tax authorities during survey proceedings and disclosure made before the Income Tax authorities? Whether the Hon’ble Tribunal has erred in law and in facts in confirming order of the first appellate authority and deleting levy of tax, interest and penalty to the extent of stock difference of ₹ 7,50,000/- which was found by the Income Tax authorities during survey proceedings and disclosure made before the Income Tax authorities and thereby rejecting cross objection of the appellant herein? Held that: - the assessing authority had relied only on the statement made before the Income Tax authorities and had not taken into consideration the fact that the Income Tax authorities had not taken into consideration the stock lying at the exhibition place as well as the fact that the books of accounts were closed and adjusted and audited by a Chartered Accountant and the investigation report of the department had given a clean chit to the appellant. It is in this backdrop that the Tribunal found no justification in confirming the order of the first appellate authority and set aside the same and for the very same reason, dismissed the cross objections filed by the appellant - the findings recorded by the Income Tax authorities during the course of search, could have been made a starting point for inquiry as regards the discrepancy in the physical stock and that shown in the stock register. However, the statement made by the dealer, ipso facto, could not have been the basis of an addition. The Tribunal was wholly justified in setting aside the order of the first appellate authority to the extent it had confirmed the demand which had no legal basis, and confirming the order to the extent it had reduced the tax liability imposed by the assessing authority - these questions also does not merit acceptance. Appeal dismissed.
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2018 (2) TMI 755
Principles of natural justice - main contention of appellant is that neither in the assessment order nor while passing orders on the applications filed seeking rectification, the Assessing Authority has applied its mind to the various materials placed before it and the request made seeking exemption against the labour charges, sales effected outside the State, TDS input tax, etc. - Held that: - the authorities do not refer to the documents said to have been produced by the appellant/assessee before the Assessing Authority at different intervals - By relying upon the original records, learned High Court Government Pleader has vehemently contended that no such documents were produced by the appellant. Question whether any such document had been indeed produced and how it had any bearing on the merits of the matter is itself a disputed question which we cannot go into in exercise of the power under Articles 226 & 227 of the Constitution of India. Appellant ought to have filed an appeal challenging the assessment order. An opportunity has to be provided to the appellant to file an appeal against the re-assessment order taking up all legal contentions open to him. Appeal disposed off.
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Wealth tax
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2018 (2) TMI 736
Determination of net-wealth for the purpose of Wealth Tax Act - Held that:- Sub-section 2 of section 50C provides a remedy to the assessee in case he has aggrieved with adoption of such sale consideration on the basis of deeming provision. He can file a reference to the AO and the AO shall send the reference to the DVO for determining fair market value of the property on the date of transfer. Thus, it cannot be taken as gospel truth. The assessee has to be given an opportunity to contest this rate. Similarly, report of the DVO is to be supplied to the assessee his comments are to be taken. Only thereafter net wealth could be determined. In the present cases, report of the DVO is still awaited. While dealing with the property no.4, Narol, Ahmedabad the ld.CIT(A) has observed that the AO is directed to adopt value of the property on receipt of report from the DVO if the valuation is more than the value of the property declared and accepted by the AO. Now, how this type of direction can be made without confronting the assessee with report of the DVO ?. We are of the view that ends of justice will be met, if we set aside order of the CWT(A) and restore all these issues to the file of AO. AO shall provide copies of DVO’s report in case those reports are being relied upon by him for determination of net wealth - Appeals of the assessee are allowed for statistical purpose.
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