TMI Tax Updates - e-Newsletter
February 17, 2018

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. Long Term Capital Gain under Finance Bill 2018

   By: Mayank Pandey

2. COMPOUNDING OF OFFENCES UNDER GST

   By: Dr. Sanjiv Agarwal

News

1. Orders of the Supreme Court, High Courts and CESTAT accepted by the Central Board of Excise and Customs (CBEC); Department decides not to file any Review Petitions and SLPs against such Orders to reduce litigations so that cases on similar questions of law or identical case on facts, pending in the field, can be expeditiously decided

2. RBI Reference Rate for US $

3. PNB fraud PMLA case: ED summons Nirav Modi, Choksi

4. The Chairman and Members of the 15thFinance Commission calls on the Hon’ble President of Indiaand apprises him of the progress made in the work of the Commission so far

Notifications

Customs

1. 12/2018 - dated 15-2-2018 - Cus (NT)

Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver

GST - States

2. KA. NI-177/XI-9(42)/17 - dated 6-2-2018 - Uttar Pradesh SGST

Rescind Notification No. KA. NI-2-138/XI-9(42)/17-U.P. Act-1-2017-Order(101)-2018 dated 30-01-2018

3. KA. NI-2-160/XI-9(47)/17 - dated 31-1-2018 - Uttar Pradesh SGST

Supersession of the notification KA.NI-2-752/Xl-9(15)/17-U.P.Act-1-2017-Order-(2)-2017 dated 21-06-2017

4. KA. NI-2-159/XI-9(47)/17 - dated 31-1-2018 - Uttar Pradesh SGST

Reduction of late fee in case of delayed filing of form GSTR-1

5. KA. NI-2-158/XI-9(47)/17 - dated 31-1-2018 - Uttar Pradesh SGST

Reduction of late fee in case of delayed filing of form GSTR-5

6. KA. NI-2-157/XI-9(47)/17 - dated 31-1-2018 - Uttar Pradesh SGST

Reduction of late fee in case of delayed filing of form GSTR-5A

7. KA. NI-2-156/XI-9(47)/17 - dated 31-1-2018 - Uttar Pradesh SGST

Reduction of late fee in case of delayed filing of form GSTR-6

8. KA. NI-2-139/XI-9(42)/17 - dated 30-1-2018 - Uttar Pradesh SGST

Uttar Pradesh Goods and Services Tax (Twelfth Amendment) Rules, 2018

9. KA. NI-2-138/XI-9(42)/17 - dated 30-1-2018 - Uttar Pradesh SGST

Governor appoints the 1st day of February, 2018 as the date from which the provisions of serial number 10 and 11 of notification No. KA. NI-2-1359/XI-9(42)/17-U.P. GST Rules 2017-Order-(45)-2017 dated 2010-2017, shall come into force

10. KA. NI-2-137/XI-9(42)/17 - dated 30-1-2018 - Uttar Pradesh SGST

Amendment in Notification No. KA. NI-2-849/XI-9(15)/17-U.P. Act-1-2017-Order(16)-2017 dated 30-06-2017

11. KA. NI-2-136/XI-9(42)/17 - dated 30-1-2018 - Uttar Pradesh SGST

Waives late fee for failure to furnish Return in FORM GSTR-4

12. KA. NI-2-135/XI-9(42)/17 - dated 30-1-2018 - Uttar Pradesh SGST

Time period for furnishing the details in FORM GSTR-I

13. KA. NI-2-82/XI-9(42)/17 - dated 18-1-2018 - Uttar Pradesh SGST

Uttar Pradesh Goods and Services Tax (Eleventh Amendment) Rules, 2018

Circulars / Instructions / Orders

Income Tax

1. 02/2018 - dated 15-2-2018

Explanatory Notes to the Provisions of the Finance Act, 2017

DGFT

2. 60/2015-2020 - dated 15-2-2018

Amendments/Corrections in Table 2 of Appendix 3B Foreign Trade Policy 2015-20

Central Excise

3. 1063/2/2018-CX - dated 16-2-2018

Orders of Supreme Court, High Courts and CESTAT accepted by the Department and on which no review petitions, SLPs have been filed– reg.

Highlights / Catch Notes

Income Tax

• Finance Act 2017: Key Changes in Income Tax Rates, Deductions, Compliance, and Anti-Evasion Measures to Modernize Tax System.

  Circulars : Explanatory Notes to the Provisions of the Finance Act, 2017 - Circular
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• Capital Subsidy Exclusion: CIT(A) Erred on Deemed Dividends u/s 2(22)(e) of Income Tax Act.

  Case-Laws - AT : Deemed dividend u/s 2(22)(e) - CIT(A) was not justified in holding that the amount of capital subsidy was a part of accumulated profited to be considered as deemed dividend under S. 2(22)(e). - AT
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Customs

• Customs Update: New Tariff Values Set for Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold, and Silver.

  Notifications : Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver - Notification
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• Importers Not Liable for Duty on Goods Lost, Stolen, or Destroyed Before Clearance or Warehousing.

  Case-Laws - AT : If the goods are pilferred after they are unloaded or lost or destroyed at any time before clearance for home consumption or deposit in warehouse, importer is not liable to pay duty leviable on such goods. - AT
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• Appellants denied Project Import benefits as pipes were for drinking water supply, not water treatment.

  Case-Laws - AT : Project import - the appellants have imported pipes and utilized the same for drinking water supply project and not for water treatment project - appellants will not be entitled to the benefit of Project Import - AT
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• Imported Audio Visual Equipment Can Be Cleared Without Import License as Capital Goods for Service Providers.

  Case-Laws - AT : Import of restricted item - audio visual equipment - the imported goods will be eligible for clearance without an import licence since they are in the nature of capital goods for the importer who is providing audio visual service. - AT
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DGFT

• DGFT Updates Table 2, Appendix 3B in Foreign Trade Policy 2015-20 with Key Amendments for Stakeholders.

  Circulars : Amendments/Corrections in Table 2 of Appendix 3B Foreign Trade Policy 2015-20 - Public Notice
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IBC

• Assignee Cannot File Petition for Unassigned Arbitral Award Recovery Under Operational Debt Agreement.

  Case-Laws - Tri : Corporate Insolvency Resolution Process - the Petitioner being an Assignee under the Assignment Agreement of the operational debt cannot maintain this Petition for recovery of arbitral Award amount which has not been assigned to it. - Tri
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Service Tax

• High Court Affirms CESTAT's Ruling: Maintenance Charges Not Taxable as Management or Repair Services Under Service Tax Provisions.

  Case-Laws - HC : Levy of service tax - maintenance charges for upkeep of the apartment or premises - whether the CESTAT was right in holding that the assessee was not providing Management, Maintenance or Repair Service by collecting amount from prospective flat buyers, for maintaining the building, in the guise of deposits which is not returnable? - Appeal of the revenue dismissed - HC
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• Composition Scheme Inapplicable for Pure Service Erection Contracts in Works Contract Services.

  Case-Laws - AT : Composition scheme for works contract - If the erection contract is only a service contract there is no question of availing composition scheme available to works contract service. - AT
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• Donations to Clubs or Associations from Non-Members Exempt from Service Tax Under Finance Act, 1994.

  Case-Laws - AT : Nature of receipt of donation - clubs or associations services - Such donations even if made by the non-members, cannot be made liable to service tax under the Finance Act, 1994 - AT
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• Property Promoter and Manager Not Taxed as Real Estate Agents for Owner Name Substitution.

  Case-Laws - AT : Liability of tax - real estate agent service - the promoter and manager of such property cannot be taxed as real estate agent for the consideration received to substitute the name of the owner / allottee in their records - AT
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• Service Tax on Name Change Fees in Residential Complex Sent Back for Review by Original Authority.

  Case-Laws - AT : Real Estate Agent service - service tax was on the charges collected for change of name of the owner of the property in the residential complex originally built and promoted by the appellant - matter remanded to the Original Authority for a fresh re-look - AT
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• Bunker-houses ruled as accommodations, not tangible goods; service tax demand overturned by authorities.

  Case-Laws - AT : Supply of tangible goods service - bunker-houses - appellant is claiming these are accommodations created at site. - there is no identified supply of bunker-houses as considered by the lower authorities - demand of service tax set aside - AT
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• Hospitals and public medical facilities not classified as commercial; fees don't change their non-commercial status.

  Case-Laws - AT : Commercial or Industrial Construction Services - The hospitals and buildings for medical facilities used by the public cannot be considered as civil construction or building intended for use for commerce or industry. Collection of fee, if any, for the usage of the said facility by itself will not make a building as used for commerce or industry. - AT
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• Application Rejected under VCES Due to Disqualification from Previous Demand under Works Contract Service for 2007-08, Section 106(2.

  Case-Laws - AT : Voluntary Compliance Entitlement Scheme - rejection of VCES application - the appellant attracts disqualification because demand was confirmed against him under the WCS for the period 2007-08 which clearly covered under Section 106(2) of the Finance Act, 2013 - AT
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• Power Plant Operations Not Taxable: Agreements Exempt from Service Tax on Maintenance and Repair Services.

  Case-Laws - AT : Whether appellant herein engaged in operations and maintenance of power plants, as per the agreements entered with GVK industries Ltd., at various locations is liable to be taxed? - operation of power plant is not taxable under maintenance and repair services - AT
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Central Excise

• Department Accepts Judicial Orders Without Filing Reviews or SLPs, Ensuring Clarity and Compliance with Court Decisions.

  Circulars : Orders of Supreme Court, High Courts and CESTAT accepted by the Department and on which no review petitions, SLPs have been filed– reg. - Circular
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• SSI Exemption Case: No Common Financial Pool Found Among Four Entities, Impacting Clubbing of Clearances for Tax Purposes.

  Case-Laws - AT : SSI Exemption - clubbing of clearances of four entities - buying and selling material to each other - a few transactions do not by any manner indicate that there was a common pool of funds. - AT
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• Appellants obstruct proceedings by seeking cross-examination of former employees; fail to dispute goods valuation with Revenue cooperation.

  Case-Laws - AT : Validity of SCN - The appellants are trying to defeat the proceedings by seeking cross examination of the people who were their employees and have now left. - They cannot escape by challenging the valuation of goods where they failed to co-operate and where reasonable opportunity has been given done by the Revenue, to give proper valuation. - AT
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• Rose and Sarasaparilla Syrups Classified as 'Sharbat' Under CETH 2108.20, Not CETH 2001.00.

  Case-Laws - AT : Classification of Rose Syrup - Sarasaparilla Syrup’ (Nannari syrup) - whether classified under CETH 2001.00 or under CETH 2108.20? - subject goods merit classification under 2108.20 as 'Sharbat' - AT
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Case Laws:

• Income Tax

• 2018 (2) TMI 1094
  Reopening of assessment - Deduction u/s. 80IA in respect of three Windmills situated at Bogat - eligibility of reasons to believe - Held that:- Assessee's claim for deduction under section 80IA of the Act was examined by the Assessing Officer minutely during the scrutiny assessment proceedings. He has given detailed reasons for reducing the claim by Rs. 3.8 lacs and accepting the rest of the claim. Any attempt now on part of the Assessing Officer to modify this position would be based on change of opinion. May be that an angle or an element of the claim may not have been directly addressed by the Assessing Officer during the original assessment to the satisfaction of the present Assessing Officer, nevertheless, same cannot be a ground for reopening of the assessment which was previously framed after scrutiny. - Decided in favour of assessee.

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• 2018 (2) TMI 1093
  Validity of reopening of assessment - notice against non existent entity - eligibility of reasons to believe - notice not addressed in the correct name - Held that:- When notice is issued under Section 147/148 of the Act, firm and conclusive findings are not required for merits would be examined and thereafter final finding recorded in the assessment order. As long as, there is honest and reasonable opinion formed by the Assessing Officer and the “reasons to believe” are not mere “reasons to suspect”, the courts should not interject to stop the adjudication process and scrutiny on merits. Absolute certainty is not required at the time of issue of notice and at the same time, “reasons to believe” must not be based on mere suspicion, gossip or rumour. The said test and criteria, we have no hesitation in holding, is satisfied in the present case. There is evidence and material on record to justify issue of notice under Section 147/148 of the Act. There was no doubt and debate that the notice was meant for the petitioner and no one else. Legal error and mistake was made in addressing the notice. Noticeably, the appellant having received the said notice, had filed without prejudice reply/letter dated 11.04.2017. They had objected to the notice being issued in the name of the Company, which had ceased to exist. However, the reading of the said letter indicates that they had understood and were aware, that the notice was for them. It was replied and dealt with by them. The fact that notice was addressed to M/s Sky Light Hospitality Pvt. Ltd., a company which had been dissolved, was an error and technical lapse on the part of the respondent. No prejudice was caused. Notice under Section 147/148 of the Act was issued at the end of the limitation period. Noticeably, Assessment Order for the assessment year 2013-2014 was passed on 31.03.2016, one year earlier. Second lapse is also apparent. Despite correctly noting the background, notice under Section 147/148 of the Act was not addressed in the correct name and even the PAN Number mentioned was incorrect. Nevertheless, human errors and mistakes cannot and should not nullify proceedings which are otherwise valid and no prejudice had been caused. This is the effect and mandate of Section 292B of the Act. Writ petition dismissed.

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• 2018 (2) TMI 1092
  Reopening of assessment u/s 147 - claim for deduction u/s 80IC - Held that:- No doubt the assessment was reopened by the revenue within four years from the end of the assessment year but powers conferred on the Revenue u/s 147/148 is to power to reassess and not power to review. AO in original assessment framed u/s 143(3) vide orders dated 29-11-2010 has elaborately discussed the issue of deduction u/s 80IC wherein revised return of income filed by the assessee on 25-02-2010 was duly considered by the AO while framing assessment u/s 143(3) and thus assessment order dated 29-11-2010 was passed by the AO u/s 143(3) was finalised by the AO after due application of mind . The Revenue has also allowed the claim of deduction u/s 80IC to the assessee w.r.t. Haridwar unit for AY 2007-08 after detailed deliberation and discussions in an assessment framed u/s 143(3) vide assessment orders dated 24-12-2009. The decision of Hon’ble Bombay High Court in the case of Jet Speed Audio Private Limited(2015 (2) TMI 766 - BOMBAY HIGH COURT) supports the contention of the assessee. Thus powers u/s 147/148 is to reassess and not to review the decisions of the AO as change of opinion is not permissible for reopening of the concluded otherwise there will be no end to litigation. - Decided in favour of assessee.

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• 2018 (2) TMI 1091
  Section 80G disallowance - Held that:- We are of the opinion that both the lower authorities have erred in law as well as on facts in this peculiar circumstances to interpret the relevant statutory provision Section 80G of the Act in an unsustainable manner which tantamounts to denying the necessary relief in both assessment years i.e. the year of actual payment as well as that of getting the necessary donation receipt. The purpose of using the crucial expression “in relevant previous year” in statute is to ensure actual payment on or before the relevant previous year rather than altogether rejecting a case alike the instant facts only. We therefore accept assessee’s first substantive ground to delete the impugned Section 80G disallowance under challenge. Disallowing of claim of sundry balances - Held that:- We find that Peninsular Plantations Ltd. vs. ACIT [2014 (4) TMI 214 - KERALA HIGH COURT] holds that such a specific money lending clause is not necessary as it is very much possible for a company to lend money to another entity even in absence of a money lending clause. Their lordships are of the view that the test in such a case would be as to whether the transaction in question has taken place in ordinary course of business or not. The assessee’s above referred evidence sufficiently indicates that it had proposed to charge interest on the advances in question given through banking channel. We conclude that the money in question advanced as per its above object clause or for that even in absence of object clause amounted to a transaction in its ordinary course of business only. Both the lower authorities corresponding finding by this effect accordingly stand reversed. Treating the impugned write off as a capital loss and not revenue in nature so as to be deposited against income of the impugned assessment year - Held that:- As assessee has advanced the sum in question of Rs. 60lacs and Rs. 40lacs to M/s. Bhagyam Industries Pvt. Ltd. and M/s. Dolphin Metal (India) Ltd. totaling to Rs. 1 crore through banking channel in its ordinary course of business in lieu of charging interest and non recovery thereof for almost three years formed sufficient reason to write them off as sundry balances as revenue loss to be adjusted against its income of the impugned assessment year. The assessee’s second substantive ground is accordingly accepted.

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• 2018 (2) TMI 1090
  Allowable busniss expenses u/s 37(1) - payment of damage for breach of contract - compensation/damages paid by TEDPL - Held that:- In the absence of any suggestion of bad faith or fraud, the true principle is that the taxing statute has to be applied in accordance with the legal rights of the parties to the transaction. When the transaction is embodied in a document, the liability to tax depends upon the meaning and content of the language used therein, and this must be determined in accordance with the ordinary rules of construction as held in CIT v. Motors General & Stores (P.) Ltd. (1967(5) TMI 3 - SUPREME Court). To recapitulate the ratio laid down in the above decisions, the payment of damage for breach of contract as in the instant case is an allowable expenditure u/s 37 of the Act. We hold so. The compensation of Rs. 20 crore arrived at by the arbitrator is not based on a calculation. During the course of hearing, the assessee files a written submission stating that had TET invested the amount in bank FDR, it would have earned interest @ 9.5%. As against this, the compensation paid @ 10.30% (interest amount is computed on advances of Rs. 49.23 crore on day to day basis till the date of refund in May 2012) was only marginally higher. As the award given by the arbitrator is bereft of calculation, we direct the AO to restrict the compensation/damages to 9.5% on Rs. 49.23 crore in place of 10.30% on day to day basis till the date of refund in May 2012. The assessee would file the details of before the AO. We hold that the compensation/damages paid by TEDPL is an allowable expense u/s 37 of the Act - Decided in favour of assessee.

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• 2018 (2) TMI 1089
  Penalty levied u/s 272A(2)(k)/274 r.w.s. 200(3) - reasonable cause in not furnishing the said quarterly TDS return in time - whether the provisions of section 200(3) are applicable? - Held that:- The case of the assessee before us is that the delay in submission of e-TDS return was because of strict requirement of e-filing of the statement and filing of such e-TDS return in this year PAN of person on whose behalf tax is collected were required mandatorily, otherwise e-return was not getting uploaded, hence the delay in filing quarterly TDS return late. We hold that the assessee had reasonable cause in not furnishing the same in time and in view of the provisions of section 273B of the Act, we hold that the assessee is not liable to levy of penalty under section 272A(2)(k) of the Act. Hence, the Assessing Officer is directed to delete the same. - Decided in favour of assessee.

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• 2018 (2) TMI 1088
  Adjustment on account of royalty payment - ALP adjustment - Held that:- Since the issue as to payment of royalty by the taxpayer to its AE is one of the actual business arrangement, there is no material on file to take a different view on the issue as the same has already been settled in favour of the taxpayer in AY 2010-11 and AY 2011-12, so ALP adjustment on account of royalty payment made by the TPO/AO is not sustainable in the eyes of law, hence ordered to be deleted by the AO. Consequently, the appeal filed by the taxpayer is hereby allowed.

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• 2018 (2) TMI 1087
  Scheme of taxation of charitable or religious trust/institution as codified u/s.11,12 and 13 – Carry forward of excess expenditure for adjustment against income of subsequent years - Held that:- We find that the issue before us of carry forward of excess expenditure for adjustment against income of subsequent years is covered by the decisions of the Co-ordinate Benches of this Tribunal in the case of Jyothi Charitable Trust [2015 (7) TMI 859 - ITAT BANGALORE] and the case of ITO (Exemption) Vs. Shraddha Trust [2017 (4) TMI 1289 - ITAT BANGALORE]. Thus uphold the order of the ld CIT(A) in directing the AO to allow carry forward of excess expenditure for adjustment against income of subsequent years - Decided against revenue

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• 2018 (2) TMI 1086
  Levy of penalty u/s 271(1)(c) - reopening of assessment - satisfaction recorded by the JCIT without application of own mind - Held that:- Where re-assessment proceedings were initiated under section 148 of the Act against additional income offered by the assessee in the revised return of income, there was no assessment under section 143(1) of the Act itself. Hence, mention of Explanation 2(c) is incorrect. The JCIT had approved the same in an automatic fashion. We hold that in such circumstances, where the satisfaction had been recorded by the JCIT in mechanical manner and without application of mind for according his sanction for issuing notice under section 148 of the Act, reopening of assessment under section 147 / 148 of the Act is invalid. Accordingly, consequent penalty proceedings initiated and completed against the assessee under section 271(1)(c) of the Act are without jurisdiction and held to be invalid and bad in law. - Decided in favour of assessee.

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• 2018 (2) TMI 1085
  Deemed dividend u/s 2(22)(e) - capital subsidy/grant receipt - urrent accommodation adjustments accounts/trade advances - whether or not in the nature of loan or advance - Held that:- The provision of S. 2(22)(e) along with its Explanations – 2 as stood at the relevant point of time, shall only mean that the expression "accumulated profits" shall only include all the profits of the company up to the date of distribution which are normal revenue profits. The words used are plain, clear and unambiguous that only the profits of the company are to be considered for this purpose. The said provision nowhere indicates that capital subsidy/grant should also be included/ considered within the expression “accumulated profits”. The amount of capital subsidy of Rs. 36.87 lakh could not be considered as a accumulated profit and is out of the preview of the S. 2(22)(e). Accordingly, the ld. CIT(A) was not justified in holding that the amount of capital subsidy was a part of accumulated profited to be considered as deemed dividend under S. 2(22)(e). Therefore, for this reason also, the addition made of the deemed dividend to this extent was not justified. Thus the alternate plea of the assessee is allowed. Disallowance u/s 37(1) - assessee had advanced interest free to one Shri Neeraj Kumar, who is son in law of the assessee - Held that:- In this case also, in absence of anything to the contrary, as per the settled legal position, a presumption can be drawn that advance given of Rs. 7,92,300/- to Shri Neeraj Kumar were out of the huge interest free capital of Rs. 40 lacs, which was many times more. In view of this, we do not agree with the observation of the ld. CIT(A) that the appellant failed to substantiate his claim by a fund flow statement. Thereapart, such interest free fund could be utilized by the assessee for any purpose whatsoever as held by the Hon’ble jurisdiction High Court in the case of ACIT v/s Ram Kishan Verma (2012 (5) TMI 417 - ITAT, Jaipur) and in Hero Cycle P. Ltd vs. CIT (2015 (11) TMI 1314 - SUPREME COURT OF INDIA). Hence, the CIT(A) was not justified in confirming the disallowance and the same is directed to be deleted. Thus Ground No. 2 of the assessee is allowed.

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• 2018 (2) TMI 1084
  TPA - ALP determination - comparable selection criteria - Held that:- Assessee is into “IT Enabled Services” and “IT Software Development” thus companies functionally dissimlar with that of assessee need to be deselected from final list. Treating foreign exchange gain/loss as non-operating items in both the segments i.e. ITES services and Software Development services while determining the arm’s length price of the international transactions - Held that:- Foreign exchange gain/loss cannot be treated as non-operating items while calculating the margin of the taxpayer as well as comparables. So, we direct to treat the foreign exchange gain/loss as non-operating margin as non-operating items while benchmarking the international transactions. Decided in favour of Assessee. Adjustment on account of working capital differences between the taxpayer vis-àvis comparable companies - Held that:- We are of the considered view that the taxpayer is entitled for working capital adjustment to be on the same page with the comparables. So, the taxpayer is entitled for working capital adjustment, the quantum of which is to be checked by the ld. TPO who has to proceed on the lines of the decision rendered by the coordinate Bench of the Tribunal in taxpayer’s own case for AY 2008-09 Deduction u/s 10A of the Act being the interest on FDR and misc. income - Held that:- Following the findings returned by the coordinate Bench of the Tribunal in taxpayer’s own case for AY 2010-11 based on the decision of Hon’ble High Court in Riviera Home Furnishing (2015 (11) TMI 1139 - DELHI HIGH COURT), we are of the considered view that the taxpayer is entitled for deduction u/s 10A on the interest earned on fixed deposit receipts. Pay recoveries from the employees eligible for sec 10A deduction - Held that:- Similar view as to allowing the deduction u/s 10A of the Act on excess provision returned back has been expressed by the coordinate Bench of the Tribunal in Birlasoft (India) Ltd. vs. DCIT [2011 (1) TMI 406 - ITAT, DELHI ]. Following the decision rendered by the coordinate Bench of the Tribunal, we are of the considered view that notice pay recoveries from the employees is also part of the business profit of the taxpayer on which the taxpayer is also eligible for deduction u/s 10A. Set off of Minimum Alternate Tax (MAT) credit brought forward during the year under assessment u/s 115JAA - Held that:- When it is not in dispute that the taxpayer has claimed the credit being brought forward figure, the taxpayer is entitled for set off of MAT credit of the same. So, the AO is directed to proceed accordingly after due verification.

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• 2018 (2) TMI 1083
  Allowability of expenditure in advertisement - nature of expenditure - revenue or capital expenditure - Held that:- When the assessee incurred expenditure in the course of earning profit, whether mere facilitating the assessee in carrying out trading operations or the business in a more effective manner, then the expenditure is only on the revenue account. A mere incidental benefit or enduring benefit or commercial advantage cannot result in disallowing the claim of the assessee. In the case before us, the assessee incurred expenditure in making advertisement in respect of the products made by it and sale of the same. While making advertisement, the assessee has to necessarily display the brand. Even though there is incidental increase in value of brand by way of advertisement made by the assessee, the real benefit is only to carry out the business in an effective and profitable manner. The expenditure incurred by the assessee is in the course of earning of profit without touching the capital asset. In view of the above, this Tribunal is of the considered opinion that the expenditure incurred by the assessee is only revenue in nature. See Alembic Chemical Works Company Limited [1989 (3) TMI 5 - SUPREME Court] - Decided against revenue.

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• 2018 (2) TMI 1082
  Disallowance made under Rule 8D2(ii) r.w.s. 14A - sufficiency of own funds - Held that:- AS the assessee has demonstrated that the interest paid was totally for sugar trading business or for loans on Plant & Machinery and no interest was paid for investment in assets which earned exempt income and also since the assessee is having its own funds many times more than the investments made, no disallowance is required to be made under Rule 8D2(ii) in view of the decision in the case of HDFC Bank v. DCIT (2016 (3) TMI 755 - BOMBAY HIGH COURT) and CIT v. Reliance Utilities & Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) we do not see any infirmity in the order passed by the Ld.CIT(A) in deleting the disallowance under Rule 8D2(ii) of the Act. Eligibility to claim u/s. 80IA - initial Assessment Year - profit earned during the Assessment Year entitled for deduction under Section 80IA(5 without deducting the losses, which were absorbed in the earlier years? - Held that:- This issue in appeal is now squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Hercules Hoist Ltd. [2017 (6) TMI 1125 - BOMBAY HIGH COURT] wherein the Hon'ble Jurisdictional High Court taking note of the decision in the case of Vellayudhaswamy Spinning Mills P. Ltd [2010 (3) TMI 860 - Madras High Court] held that profit from the eligible business for the purpose of determining the quantum of deduction under section 80IA has to be computed before deduction of the notionally brought forward losses and depreciation of eligible business as they have to be allowed to be setoff other income in earlier years. - Decided against revenue Disallowance made under Rule 8D2(iii) - as per assessee only dividend earning investment is from Rajaram Solvex Ltd and the assessee has computed the suomoto disallowance at 0.5% of the investment made in such company as the expenditure attributable for earning such dividend income - Held that:- Accepting the contentions of the assessee, we hold that the disallowance under Rule 8D2(iii) of the Act could not be more than Rs..9,200/- since the calculation appears to be in consonance with the decision of the Special Bench in the case of ACIT v. Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI], wherein it has been held that only those investments which yielded dividend income should be considered for disallowance under Rule 8D2(iii) of the Act. Thus we direct the Assessing Officer to delete the disallowance made under Rule 8D2(iii) of the Act. - Decided in favour of assessee

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• 2018 (2) TMI 1081
  Disallowance of commission paid - Held that:- For the present year it is undisputed that commission paid by the assessee is 12.28% of revenue whereas, in Assessment Year 2008-09 the coordinate bench has accepted 12.73% of the commission of the turnover as reasonable. Therefore, we do not find any reason to confirm the disallowance. In the present case also the assessee has submitted the details of commission paid. It is not the case of the AO that such commission is not backed by room rent revenue. in view of this as the coordinate bench has determined the percentage based on the gross revenue we do not find any reason to confirm the disallowance. In the result ground No. 1 of the appeal fo the assessee is allowed. Interest expenditure on funds borrowed to purchase the property not considered as acquisition of the property - Held that:- CIT(A) has held that as the appellant had received the possession of the property on 12.10.2006 the interest paid prior to and after receiving the possession is deemed to have been allowed against the annual value of the property. However, he has held that interest expenditure is to be a part of cost of acquisition but because of section 24B the assessee is not entitled to the same. However, the ld CIT(A) has failed to appreciate that though the deed of this property was executed on 12.10.2006 but the property was incapable of being let out as there was no occupancy around that area. However, the above fact could not be demonstrated before the ld Assessing Officer and we do not find any such mention in the order of the ld Assessing Officer, therefore, we set aside Ground back to the file of the ld CIT(A) to correctly adjudicate to ascertain the facts whether the property is capable of being let out or not and then decide about the amount of interest to be considered as cost of acquisition. Treatment to interest expenditure incurred by the assessee for the business purposes - Held that:- CIT(A) should have examined the claim of the assessee of allowability of the above expenditure as allowable interest expenditure against the business income. In view of this we set aside this ground of appeal to the file of the ld CIT(A). In the result ground of the appeal of the assessee is allowed accordingly. Gain from sale of property - LTCG or STCG - period of holding - Held that:- Both properties were acquired on the date on which the properties were allotted to the assessee and therefore, both the properties are long term capital asset. In short he held that the date of allotment of the property the date of acquisition of the property. Ld DR could not point out that how the date of acquisition should not be considered from the date of allotment of the property. In view of this we do not find any infirmity in the order of the ld CIT(A) in holding that both the properties are held by assessee for more than 36 months and therefore, they are long term capital assets - Decided against revenue

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• 2018 (2) TMI 1080
  Registration granted u/s. 12A cancelled - proof of charitable activities - assessee received donation in lieu of cash from M/s. Herbicure - Held that:- Registration granted u/s. 12AA of the Act cannot be cancelled without infraction of law as contemplated u/s. 12AA(3) of the Act. As per the requirement of section 12AA(3) of the Act, the Ld. CIT(E) has to be satisfied that the activities of the trust or institution are ingenuine or are not being carried out in accordance with the object of the trust or institution. When the assessee is carrying out the object of the trust for which it was created and has applied the donation it received from M/s. Herbicure for the objects for which it has been created, the assessee Trust cannot be termed to be ingenuine or cannot be held to be not carrying out its activity in accordance with the object of the trust. Therefore, we set aside the order of the Ld. CIT(E) and allow the appeal of the assessee.

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• Customs

• 2018 (2) TMI 1079
  Duty drawback - allegation was that the petitioners have availed excess drawback - opportunity of personal hearing sought by the petitioner - Held that: - The powers under the provisions of the Customs Act and the relevant Regulations do not envisage piecemeal hearing to render a decision in a controverted manner. All that this Court can do is to direct the respondent to consider the preliminary issues as first among other issues that the petitioner may raise. For this purpose, the petitioner has to necessarily submit their additional reply on the factual issues to enable the Authority to adjudicate the said show cause notices as a whole. The prayer sought for by the petitioners cannot be granted and that the petitioners should necessarily submit their additional reply to the said show cause notices, touching upon the merits of the matter and thereafter, it is for the respondent to decide the case - petition dismissed.

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• 2018 (2) TMI 1078
  Principles of natural justice - It is urged that the trial court did not appreciate the evidence in correct perspective. Summons to appear before the Investigating Agency were issued by speed post and were duly served upon the respondent - Held that: - The trial court committed no error to observe that before initiating criminal proceedings against the respondent, the prosecution/Investigating Agency was expected to ensure that the summons were duly served upon the respondent and he avoided to appear before it deliberately or intentionally - The impugned judgment is based upon fair and proper appreciation of evidence and this Court finds no illegality or irregularity to grant leave to file appeal against acquittal - petition dismissed.

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• 2018 (2) TMI 1077
  Whether the appellant are required to discharge duty on the invoice quantity of bulk liquid cargo imported as reflected in the Bills of entry or on the quantity shown in the out turn report as determined? Held that: - Hon’ble Supreme Court in the case of Mangalore Refinery and Petrochemicals Ltd. Vs CCE Mangalore [2015 (9) TMI 245 - SUPREME COURT] has held that If the goods are pilferred after they are unloaded or lost or destroyed at any time before clearance for home consumption or deposit in warehouse, importer is not liable to pay duty leviable on such goods. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1076
  Refund claim - denial on the ground that since the appellant had not filed appeal against the assessment order, therefore, the refund claim filed under Sec 27 of the Customs Act, 1962 is not maintainable - whether the appellant are entitled to refund of customs duty paid against respective Bills of Entry which was finally assessed on 22.2.2014? - Held that: - post amendment to Sec 27, w.e.f. 1.4.2011 there is no necessity to file appeal against the assessment order, while claiming refund under Section 27 of the Customs Act, 1962 - reliance placed in the case of Micromax Informatics Ltd vs UOI [2016 (3) TMI 431 - DELHI HIGH COURT]. The matter is remanded to the Adjudicating Authority to consider the refund claim on merit - Appeal allowed by way of remand.

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• 2018 (2) TMI 1075
  Valuation - includibility - royalty charges paid by the appellant to the Japan Company - Held that: - the cost of imported components and parts are to be excluded to arrive at the net value for computation of royalty charges - the factual and legal findings as recorded by the Original Authority cannot be contested - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1074
  Project import - Drinking Water Supply Projects for supply of water for human or animal consumption - N/N. 21/2002-Cus. dated 1.3.2002 - Held that: - the appellants have imported pipes and utilized the same for drinking water supply project and not for water treatment project - appellants will not be entitled to the benefit of Project Import as well as Customs N/N. 21/2002. Reliance placed in the case of Pratibha Industries Ltd. Versus Commissioner [2015 (8) TMI 623 - SUPREME COURT], where it was held that Tribunal has rightly come to conclusion that appellant shall not be covered by Notification No. 21/2002-Cus., which grants complete exemption from payment of basic excise duty and additional duty falling under Heading 9801 required for drinking water supply project for supply of water for human and animal consumption. Appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1073
  ROM application - validity of stay order - Held that: - Stay Order has been pronounced after appreciating the submissions of both sides - Hon'ble Karnataka High Court in the case of CCE, Bangalore-III Vs. McDowell & Co. Ltd. [2005 (4) TMI 77 - HIGH COURT OF KARNATAKA AT BANGALORE] has held that once the Tribunal has passed an order in connection with predeposit under Section 35F of the Central Excise Act, 1944, Tribunal cannot modify that order subsequently like an appellate authority. There is no justification for interfering with Stay Order dt. 07/08/2015 or modifying the same as there is no error on the face of the record - ROM application dismissed.

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• 2018 (2) TMI 1072
  100% EOU - Refund of unutilized CENVAT credit - respondent had claimed that these services on which credit was availed were utilized in the manufacture and export of readymade garments - Held that: - the CBEC has issued Circular No.120/01/2010/ST dated 19.1.2010 in which certain guidelines have been prescribed to process such refund claims under Rule 5 - the learned Commissioner (A) has recorded the finding that all the services, received and utilized by the respondent, are having nexus with the service/goods exported. Refund allowed - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1071
  Demand of differential duty - quantities received by the OMCs in excess of the quantities found removed at the end of their refineries - Held that: - Because of the nature of the goods i.e. petroleum products, such variations are inevitable - The guidelines have allowed monthly adjustments between the quantities of excess receipt with the quantities of short receipt before the payment of duty on monthly basis. Even though this clarification is dated 14/02/2014, which is after the date of impugned order, we are of the view that the benefit of such monthly adjustments may be extended even for the earlier periods. Matter remanded to the original authority for de novo decision by working out the demand after granting the adjustments as per the Ministry of Finance, Department of Revenue's circular - appeal allowed by way of remand.

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• 2018 (2) TMI 1070
  Short levy of customs duty - finalisation of provisional assessment - Held that: - The customs duty is to be charged only on the basis of the actual quantity of crude receipt in the shore tank - the original authority has already perused copies of the respective shore tank receipt certificates and has finalised the provisional assessments - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1069
  Valuation - includibility - whether the demurrage charges are to be included in the assessable value? - Held that: - on identical facts, this Tribunal in the case of M/s. Bharat Petroleum Corporation Limited Versus The Commissioner of Customs And Vice-Versa [2017 (10) TMI 302 - CESTAT BANGALORE] has allowed the appeal of the assessee by dropping the demurrage charges. Penalty u/s 114A also dropped. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1068
  Benefit of N/N. 21/2002 (Sl.No.140) - import of parts of snap buttons - Revenue, after clearance of the goods, took the view that this exemption notification is not applicable to parts of snap buttons - Held that: - reliance placed in the case of KITEX GARMENTS LTD. Versus COMMR. OF CUS., COCHIN [2009 (3) TMI 454 - CESTAT, BANGALORE], where it was held that the benefit to be extended to parts. The snap button consists of 4 parts, a single part in isolation does not have any use at all. If one part is imported, all the other parts also have necessarily to be imported for use. In such circumstances, the part also would be covered by entry No.140. Any other interpretation would lead to absurdity - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1067
  Import of restricted item - audio visual equipment - whether capital goods or not? - Circular dt. 06/12/2012 - Held that: - FTP allowed import of second hand capital goods without a licence only if such goods are in the nature of capital good - The DGFT has clarified, as per their circular dt. 06/12/2012, that audio visual equipments imported by the service providers can be considered as capital goods. Such clarification was not available to the adjudicating authority which has lead to the passing of the impugned order - the imported goods will be eligible for clearance without an import licence since they are in the nature of capital goods for the importer who is providing audio visual service. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1066
  Concessional rate of CVD - N/N. 6/2002-CE dt. 01/03/2002 - Held that: - Tribunal in the case of IBM INDIA PVT. LTD. Versus COMMISSIONER OF CUSTOMS, BANGALORE [2009 (5) TMI 299 - CESTAT, BANGALORE] has held that when this server is a computer, it conforms the definition of computer and when it falls under 84.71 as given in the entry in the notification then the benefit cannot be denied - benefit allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1065
  Valuation - related party transaction - loading of invoice value - adjudicating authority took the view that this profit margin was extremely low in comparison to the profit margin recorded by Apple, Ireland - Held that: - there is absolutely no justification to load the value of goods imported from Singapore on the basis of the profit margin of the Ireland unit. The transaction value between the foreign supplier and the respondent has been consistently accepted by the SVB and has been periodically renewed - transaction value must be accepted - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1064
  Interest on delayed refunds - relevant date - Held that: - Similar issue came up before Hon’ble High Court of Gujarat in the case of Kamakshi Tradxim (India) Pvt. Ltd [2017 (4) TMI 223 - GUJARAT HIGH COURT] wherein their Lordships have followed the law laid down by the Apex Court in the case of Ranbaxy Laboratories Limited [2011 (10) TMI 16 - Supreme Court of India], where it was held that interest shall be payable on the expiry of a period of three months from the dte of receipt of the application under sub-section (1) of Section 11BB of the Act and not on the expiry of the said period from the date on which the order or refund is made. Lower authorities are directed to pay interest to appellant after 3 months from the date of filing of refund claims by the appellant till the date of actual refund paid to appellant - appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2018 (2) TMI 1063
  Company name removal from the Register of Companies [‘ROC’] - non commencement of business within one year of its incorporation - restoration of name seeked - Held that:- The Company is registered with the object of doing Real Estate business including other businesses. From the documents filed by the appellant on 23rd August, 2016 it appears that the Company entered into the MOU to purchase certain lands for the purpose of development. The Bank’s account also shows certain transactions relating to the Company by the date of striking off the Company. Even otherwise, another ground that is available for restoration of the Company is if it is otherwise just to restore the name. ‘If it is otherwise’ means it must be any other ground other than carrying on business or in operation on the date of striking off. The ROC in his Representation did not raise any objection for restoring the name of the Company on the ground that it is involved in any act which is illegal or tax evasion. According to the Appellant, the Company is going ahead with its business and it has to pay the balance amount to the owner of the land from whom the Company purchased the land. Therefore, even otherwise it is just to restore the name of the Company. As already stated above, the Company had filed copies of Bank Statement and Income Tax Returns. Therefore, this Tribunal is of the view that it is just to restore the name of the Company in the Register of Companies

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• 2018 (2) TMI 1062
  Oppression and mismanagement - Company Petition maintainability - no proper GPA and not fulfilling requisite conditions prescribed under u/s. 241 of the Companies Act, 2013 - validity of sale deed - removal of second respondent from the office of Company - Held that:- Company has proposed an Extraordinary General Meeting as early as 2nd July, 2015 with proposal to remove the second respondent from the office of Company on the ground that he was facing charges under section 138 of NI Act, in Court of law and misappropriated Rs. 2,20,000/- of Company funds . In addition, in the above transaction, the respondent Nos. 2, 3 & 7 are inter-related with each other As per section 184 of Companies Act, 2013 and Articles of Association of the Company, and principles of natural justice, it is paramount duty of the Company especially the respondents to convene a shareholders’ meeting and take a decision as per law about the said transaction. Admittedly, the respondents have not taken any such decision and vague contentions have been made stating that the impugned transactions are in accordance with law. So the impugned sale deed dated 3-11-2015 is liable to be set-aside for the above reasons and consequently, the subsequent sale deed dated 4th November, 2016 executed by Mrs. G.Saraswathi Devi (Respondent No. 7) in favour of Respondent No. 8 (Vara Boomi Homes) is also liable to be set-aside. The contention of the respondents that single act of execution impugned sale deeds contrary to law would not constitute acts oppression and mismanagement so as to take action u/ss. 241 & 242 of Companies Act, 2013 is not at all tenable and liable to be rejected. The contention of respondent that in the absence of clear allegations/contentions made by the petitioner in the petition, the petition itself is not maintainable is not all tenable and it is hereby rejected. The Tribunal is fully empowered to pass appropriate orders basing on the contentions/allegations made in the petition. At the same time, the Tribunal cannot interfere in the decisions/matters taken in its ordinary course of business. The allegations of respondents against the petitioner with regard to unsound mind, professional misconduct/imprisonment etc. are not all tenable and not relate to the issue in ‘question. And these allegations are uncalled for. It is surprising to notice. It when the Company is facing serious allegations of acts of oppression and mismanagement in conducting the business in accordance with law, the respondents are resorting to personal allegations against the petitioner without substantiating the allegations made against them by the petitioner. The above circumstances amply justify the Tribunal to exercise the powers conferred on it u/s 242 of Companies Act, 2013 so as to put an end to the affairs of Company as complained of. The impugned sale deeds are hereby declared as illegal and they are liable to set aside.

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• Insolvency & Bankruptcy

• 2018 (2) TMI 1095
  Corporate Insolvency Resolution Process - Whether the Award amount is an operational debt?- Whether Petitioner, i.e., TVS Interconnect Systems Private Limited is an Operational Creditor - Whether there exists any dispute relating to the operational debt? - enforce the Arbitration Agreement - suppression of material facts - Held that:- In view of the Assignment Agreement, it can be said that the Petitioner is an 'Assignee' of the operational debt due to MOKA from ORG. The Petitioner, in this case is not seeking initiation of Corporate Insolvency Resolution Process on the basis of the debt assigned to it, but on the basis of the Arbitral Award. Therefore, Petitioner although can be termed as 'Operational Creditor' in respect of the operational debt assigned to it, it cannot enforce the Arbitration Agreement which is in favour of MOKA the Assignor unless there is specific assignment of the arbitral award amount to the Petitioner provided the Award amount is having the characteristics of operational debt. Therefore, the Petitioner being an Assignee under the Assignment Agreement of the operational debt cannot maintain this Petition for recovery of arbitral Award amount which has not been assigned to it. The material on record show that the Petitioner obtained assigned debt from MOKA on 14.11.2013 during the pendency of arbitral proceedings and the same was also brought to the notice of the learned Arbitrator. It is also a fact that MOKA also filed Section 138, N.I. Act case before the Criminal Court, and that fact was in the knowledge of the Petitioner. But Petitioner made self-serving statement in the Reply Affidavit that only recently it came to know about the winding up proceedings. Therefore, it is a clear case where the Petitioner cannot deny knowledge about the winding up proceedings filed by MOKA which is Assignor of the debt of ORG. Therefore, such a material fact has been suppressed by the Petitioner. The contract have to be construed strictly without altering the nature of the contract, as it may affect the interest of either of the parties adversely. In the case on hand, the Assignment Agreement is only with reference to the operational debt but not to the Award amount. Therefore, the assignment contract if strictly construed cannot take in its ambit the arbitral Award amount.

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• PMLA

• 2018 (2) TMI 1061
  Offence under PMLA - provisional attachment orders - nature of offence - whether M/s Jagati Publications Pvt. Ltd. and Y.S Jagan Mohan Reddy have thereby committed the schedule offence of cheating and the Proceeds of Crime are liable to be proceeded against under PMLA? - Held that:- From the facts of the present case, at the best if proved, it may be a case of cheating. The suit for recovery of amount has not been filed. Shares are with the investors. They have not filed any criminal complaint against the appellant. The period of purchased of shares and investment prior to 1st June, 2009. There is no investment after 1st June, 2009. No case is pending against the investors. There is no complaint or civil action initiated by them. It is matter of fact that the money was invested by the three investor in the year 2006, 2007, 2008 and upto March, 2009 i.e. prior to 01.06.2009 even as per the allegations in the charge sheet (constituting the basis of the impugned order) the alleged crimes, in respect of which allegations are made against the Appellants have taken place prior to 2009. The penal provisions, which are sought to be pressed against the accused, were not included in the Schedule to the PMLA during the relevant time. They were only included in the Schedule only by way of amendment to PMLA vide Act No. 21 of 2009 w.e.f. 01.06.2009. Here is not a case where it could be said that the investors have taken any advantage from the Government of Andhra Pradesh. The respondent has not denied the said aspect. Nothing has been discussed in the provisional attachment order about the factual position of the matter as well as by the Adjudicating Authority while issuing the notice under section 8 of the Act. If the contentions of the respondent is accepted in the case like this, there would be flood of litigations under this Act which is not permissible in law. Even otherwise, the attachments of M/s Jagati Publications seem to be wholly unnecessary as the High Court passed Orders dated 23.05.2012 restraining the alienation of any assets of the company while taking into account that M/s Jagati Publications is a media house and many employees are dependent on the functioning of the company. The said interim order is still continuing. Therefore, the provisional attachment in the present case is bad and against the law applicable to the facts of the case. After having gone through the charge sheet even if the allegations are taken as correct in the predicate charge, no “schedule offence” was prima facie committed for the purposes of PMLA. Thus, the Provisional Attachment Order, and confirmation thereof, is not sustainable in law. The same is set-aside. The attachment order of attaching the amount is lifted forth-with.

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• 2018 (2) TMI 1060
  Offence under PMLA - respondents are not pressing the interim order granted by the Appellate Tribunal, Prevention of Money Laundering Act, at New Delhi - Held that:- Though Mrs.G.Hema, Special Public Prosecutor, appearing for the appellant seeks for interference of the orders, impugned in these appeals and also sought for an answer on the substantial questions of law, raised in the instant Civil Miscellaneous Appeals, in view of the averments and submission of the learned Senior Counsel, we are of the view that there is no need to address the above. In the instant case, as the interim orders passed by the Tribunal, are not pressed by the respondents, the same shall be eschewed by the Tribunal, at the time of passing final orders. The parties are at liberty to seek for early disposal of the appeals, before the Tribunal.

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• 2018 (2) TMI 1059
  Offence under PMLA - private companies allegedly investing in companies owned by Mr. Y.S. Jaganmohan Reddy, namely M/s Jagati Publication Pvt. Ltd. in exchange for obtaining SEZ lands at prices lower than the stipulated rates as a quid pro quo, which is stated to have resulted in monetary losses to the exchequer - Held that:- From the entire gamut of the matter and material placed on record, it appears to us that the allegation of bribe and cheating are yet to be considered by the Special Court. It is yet to be examined as to whether any criminality is involved or not. There is no denial on the part of the appellants that investment was made. There are two versions, the version of the respondent is that the investors have bribed the amount. The second version is that it was a genuine investment. The issue of discrimination would also have to be decided by the Special Court. Further, as the burden of proof has not been discharged by the appellant, their request for release of all the properties cannot be acceded to. As regard Hetero and Aurobindo, they have agreed to secure total sum of Rs. 15.50 crores till the complaints are finally decided by the Special Court. As against Jagati and Janani, we are of the view that remaining Rs. 15 crores must be secured by Jagati and Janani without- prejudice as the total amount of bribery as per CBI and ED is Rs. 29.50 crores. The ED has already attached fixed deposit of Rs. 14.50 crores from Jagati. Subject to deposit of balance of Rs. 15 crores, properties of Janani shall stand released. In case the sum of Rs. 15 crores is not deposited by the appellant within six weeks from the date of order then the provisional attachment of land and property as per provisional attachment order shall continue till the final outcome of the matter which is pending before the special judge. These directions are passed without prejudice in order to secure the entire alleged amount. The fate of securing of Rs. 29.50 crores in respect of M/s. Janani & Jagati would be dependent upon the final decision passed by the Special Court.

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• 2018 (2) TMI 1058
  Offence under PMLA - in-genuine investments made into M/s Jagati Publications Ltd and M/s Carmel Asia Holdings Pvt Ltd - provisional attachment - Held that:- The allegation of bribe and cheating are yet to be considered by the Special Court. It is yet to be examined after trial as to whether any criminality is involved or not. There is no denial on the part of the appellants that the said investments were made. There are versions against the version of the respondent who stated that the investors have obtained favour from Government of Andhra Pradesh. The said aspect has to be determined at the time of trial as to whether despite of attachment of land of Government of Andhra Pradesh it was a genuine investment. In view of facts involved in the present appeals the appellants have not discharged their burden fully, thus benefit of doubt cannot be given to the appellants in the present appeals at this stage as the respondent is yet to prove the said allegation before the Special Court about the criminality of the appellant who are allegedly involved in the schedule offences and under PML Act, 2002. We are in agreement with the submission of the learned senior counsel for the appellants that attachment to an extent of Rs. 2,50,00,000/- in the hands of M/s Indira Television Pvt.Ltd. is ex facie erroneous as the last tranche of investment of Rs. 2,50,00,000/- was made by M/s Carmel Asia Holdings Pvt. Ltd. into M/s Indira Television Pvt Ltd. from 01.04.2014 to 30.09.2014 The attached properties were, admittedly, acquired by 31.03.2014.Therefore, without prejudice, we modify the impugned order about the attachment, at least, to an extent of Rs. 2,50,00,000/- in the hands of M/s Indira Television Pvt Ltd. as the said attachment ought not have been done. Similarly the attachment to an extent of Rs. 6,94,88,000/- in the hands of M/s Janani Infrastructure Pvt.Ltd.is erroneous as it is the admitted position that as investment of Rs. 6,94,88,000/- into M/s Janani Infrastructure Pvt. Ltd. by M/s Carmel Asia Holdings Pvt. Ltd. (Out of the total investment of Rs. 11,54,87,968) was made on 30.10.2006 and 30.11.2006 even prior to the investment by M/s P.R. Energy Holdings Ltd. into the M/s Carmel.

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• Service Tax

• 2018 (2) TMI 1057
  Levy of penalty u/s 28 of the FA, 1994 at a reduced rate of 25% - decision in the case of Commissioner of CGST And Central Excise, Surat Versus Metro Security Services [2017 (7) TMI 529 - GUJARAT HIGH COURT] contested - Held that: - delay condoned - leave granted.

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• 2018 (2) TMI 1056
  Levy of service tax - maintenance charges for upkeep of the apartment or premises - whether the CESTAT was right in holding that the assessee was not providing Management, Maintenance or Repair Service by collecting amount from prospective flat buyers, for maintaining the building, in the guise of deposits which is not returnable? - Whether the CESTAT has erred in holding that assessee is providing statutory service and has rendered definition provided under Section 65(105)(zzg) of Finance Act as null and void by accepting that he is not providing Management, Maintenance or repair service by maintaining the building and collecting amount for that or not? - interest - penalty. Held that: - management, maintenance or repair means any service provided by any person under a contract or an agreement, or a manufacturer or any person authorised by him, in relation to, the management of properties, whether immovable or not, maintenance or repair of properties, whether immovable or not, or maintenance or repair including reconditioning on restoration, or servicing of any goods, excluding a motor vehicle. Then, there is an explanation which clears doubts and it declares that for the purposes of this clause, namely, 65 (64), goods includes computer software and properties include information technology software. The words “Taxable service” is defined in Section 65, Clause (105) to mean any service provided or to be provided to any person by any person in relation to management, maintenance or repair. Since the MOFA has been referred by the counsel appearing before us, we would be required to make a reference to its provisions. The MOFA is an Act to regulate in the State of Maharashtra, the promotion of the construction of the sale and management, and the transfer of Flats on ownership basis. It was brought to the notice of the State Government that, consequent on the acute shortage of housing in several areas of the State of Maharashtra, sundry abuses, malpractices and difficulties relating to the promotion of construction, and the sale and management and transfer of Flats taken on ownership basis exist and are increasing. The Act must, therefore, receive an interpretation consistent with its object and purpose. This Court, on several occasions, had emphasised the aims and objects of the Act. The deposit or the monies themselves are held and appropriated towards payment of taxes, etc., popularly known as outgoings. The building and the Flats therein has to stand intact till all the Flats or units are sold and the statutory obligations are fully discharged. This is not a service of the nature understood by Section 65 (64) of the Finance Act, 1994. It is not a contractor simplicitor of maintenance of immovable property. It is not as if there is a existing building comprising of Flats, fully occupied, the maintenance and upkeep of which is handed over under a contract. It is a statutory obligation superimposed on a contract to sell a Flat/unit in a building to be constructed on a piece or parcel of land. That cannot be confused with a taxable service as defined under the Finance Act, 1994. The day-to-day upkeep, maintenance and repair is till the statutory duty is fully performed. The Revenue does not wish to take into consideration the background in which buildings are maintained and till they are conveyed with complete title to even the land beneath. Thus, the provisions of Sections 5 and 6 and eventually the further provisions right upto Section 13 of the MOFA would make it clear that builder and developer maintains and repairs the property till it is conveyed or the title in the same is conveyed to the Flat purchasers or the legal entity which would ultimately be formed by him. Thus, a cooperative housing society or a company would have to be formed of all those Flat purchasers who have purchased the Flats prior to or under construction, namely, subsequently purchased Flats. The completion of the building or it being rendered fit for occupation is one of the duties and obligation of the builder and promoter under this law. For them to be conveyed he has to maintain the property. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1055
  Maintainability of petition - classification dispute - alternative remedy - Held that: - in the instant case, the petitioner/assessee did not place the decision of the Division Bench of this Court, in the case of Commissioner of C. Ex. Tiruchirappalli Vs. Indian Humes Pipes Co. Ltd. [2015 (9) TMI 479 - MADRAS HIGH COURT] nor the decision in the case of Lanco Infratch Ltd., Vs. Commissioner of Customs, Central Excise and Service Tax, Hyderabad [2015 (5) TMI 37 - CESTAT BANGALORE (LB)] before the respondent, at the time of adjudication - this Court is inclined to grant one more opportunity to the assessee to go before the Assessing Officer and putforth their case, despite the fact that they have failed to place the decision - petition allowed by way of remand.

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• 2018 (2) TMI 1054
  Works contract service - appellants are engaged in supply and erection of raw water piping and pumping system for M/s Raj West Power Limited and Common Effluent Treatment Plant and RO System for ELDCO SIDCUL Industrial Park at Sitarganj in Rajasthan - Revenue entertained a view that the appellants are liable to service tax under works contract service and for the same, gross value which includes the materials supplied also should have been considered by the appellant - case of appellant is that they had separate contracts – one for supply of materials and another for execution of work either for erecting piping and pumping of raw water supply or for effluent treatment for two clients. Held that: - It is clear that the appellant had shown two contracts both dated 20/08/2007 in respect of Barmer Project. One is claimed to be supply contract and another is claimed to be erection contract. There is a coordination agreement dated 30/08/2007 - The said coordination agreement readwith the supply/erection contracts leads to an apparent conclusion that the intended purpose of both the parties is the supply and erection of raw water piping and pumping system. While examining the two contracts now contested in the present appeals, we note except for substitution of the word “contractor” for “supplier” the warranty or defects liability condition mentioned in Clause 34 of both the agreements are identical. It clearly establishes that as the supplier and contractor is one and the same the warranty and defect liability is to be on the appellant without any distinction for supply contract or erection contract. The defect liability clause in labour contract also talks about “defect in material”, “bad materials”. Materials are supplied in terms of supply contract which also carries same terms. This alongwith the scope of coordination agreement clearly reveals that the scope of composite works contract is clear and should be read together for the purpose of service tax. Composition scheme for works contract - concessional rate of duty - Held that: - If the erection contract is only a service contract there is no question of availing composition scheme available to works contract service. In fact, the appellants later switched over to payment of service tax with full rate without composition. This clearly reveals that action of the appellant is with full knowledge of the legal implication of the course of action for discharging service tax by them. Extended period of limitation - Held that: - the appellant is fully aware of the legal implications of service tax liability on composite works contract. Their act of first paying composition rate on what is claimed to be a service contract and later switching over to full rate of payment without composition clearly reveals the knowledge and deliberate intend of the appellant - extended period rightly invoked. Appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1053
  Advertising service to Government Departments - non-payment of service tax - case of appellant is that since the first demand notice was issued invoking extended period, alleging suppression second demand notice invoking extended period is bad in law - Held that: - the principles laid down by the Hon'ble Supreme Court in Nizam Sugar Factory [2006 (4) TMI 127 - SUPREME COURT OF INDIA] is applicable to present case, where it was held that When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. Thus there was no suppression of facts on the part of the assessee/appellant. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1052
  Nature of receipt of donation - clubs or associations services - Valuation - it was alleged that subscription and other fees collected from the members of such clubs, associations etc., form taxable income as defined in Section 65 (25) (a) read with definition of corresponding taxable service in Section 65 (105) (zzze) of the Finance Act, 1994 - Held that: - there was no quid pro quo vis-`-vis such donations by way of providing any service to such donors by the appellant in return, has been brought forth by Revenue - these amounts would not in any way come within the ambit of amounts received against provision of services. Such donations even if made by the non-members, cannot be made liable to service tax under the Finance Act, 1994 - Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1051
  Principles of Natural Justice - there was no discussion of any of the points raised by the appellant except reproduction of all the points raised with a summary conclusion confirming the original order - Held that: - The appellants made elaborate submissions on each one of the points now in dispute and we note there are clear judicial pronouncements covering at least two of these disputes. These were not considered by the lower authorities - matter remanded for fresh consideration - appeal allowed by way of remand.

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• 2018 (2) TMI 1050
  Valuation - non-inclusion of certain considerations received by the appellants, which they claimed to the reimbursement expenses - Held that: - Admittedly, the legal position is that reimbursement expenses made on actual basis are not to be included in the gross taxable value. This aspect can be verified with the basic documents, which are available with the appellant and list of such expenses are already submitted before the jurisdictional authorities. This requires cross verification with the documents. Penalty - Held that: - Mere failure to pay tax or failure to comply with any provisions without any intention to evade tax will not attract Section 78 - penalty set aside. Matter remanded to the original authority for decision on the claim of the appellant regarding correct classification as well as exclusion of reimbursement expenses and value of sale of goods - appeal allowed by way of remand.

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• 2018 (2) TMI 1049
  Liability of service tax - Commercial training and coaching service - full Service Tax liability on the gross value received by the students has been discharged by MAAC - Held that: - the appellant do not receive any amount from the service recipient as a consideration. The arrangement is that the gross amount paid by the students is credited to MAAC on which Service Tax has been discharged - It is clear that the appellant acts as an instrument in carrying out the training programme which is designed and managed by the MAAC - All these facts will indicate that MAAC is overall managing and the commercial coaching and training service suffered tax at their hands - no liability arises in the hands of appellant. Demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1048
  Liability of tax - real estate agent service - Revenue entertained a view that this consideration is received by the appellant acting as a real estate agent - Held that: - The Tribunal while examining similar set of facts held that the promoter and manager of such property cannot be taxed as real estate agent for the consideration received to substitute the name of the owner / allottee in their records - reliance placed in the case of RIICO Ltd., M/s. Rajasthan State Industrial Development & Investment Corpn. Ltd. Vs. CCE, Jaipur-II [2017 (5) TMI 673 - CESTAT NEW DELHI] - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1047
  Supply of tangible goods service - appellant is claiming these are accommodations created at site. The Revenue is claiming that these are tangible goods supplied by the client - Held that: - these bunk houses are in fact created on concrete platform at site with various components and accessories and as such, there is no “supply of bunk-house” to be called supply of tangible goods in the present arrangement. The bunk-house accommodation is created at site based some on permanent concrete base with some dismantable components - there is no identified supply of bunker-houses as considered by the lower authorities - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1046
  Real Estate Agent service - service tax was on the charges collected for change of name of the owner of the property in the residential complex originally built and promoted by the appellant - Held that: - the ld. AR categorically submitted that nowhere in the appeal papers, it is clearly brought out that the appellant is owners of the residential complex, which was sold to various buyers and they continue to maintain records of the owners of the property. No such finding has been recorded anywhere - matter remanded to the Original Authority for a fresh re-look mainly to the effect that as to whether there is a change in the facts of the case as pleaded by the ld. Consultant for the appellant - appeal allowed by way of remand.

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• 2018 (2) TMI 1045
  Clearing and Forwarding Agency Service - Revenue entertained a view that the appellant is also getting other considerations, which assessee claimed as reimbursement, should also form part of taxable value - Held that: - It is clear from the scope of the agreement that the appellants were in fact acting as Clearing & Forwarding Agent of the client cement company. They were also undertaking various connected activities, which are essentially loading, transporting the cement. The amount attributable to such activities are shown separately in the agreement as reimbursement. Tribunal in various earlier cases held that when the expenditure incurred by the assessee are in terms of agreement and are actually re-imbursed without any variation, the same shall not form part of the taxable value for C & F agency service. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1044
  Refund of unutilized CENVAT credit - Information Technology Software Service - Business Auxiliary Service - Held that: - as far as rejection of refund on input services on Management, Maintenance or Repair Service and Management or Business Consultant’s service, is wrong and not sustainable. These two services have been held to be eligible input services as per the decisions cited supra. Moreover, in appellant’s own case, this Tribunal has already held them as eligible input services - the lower authorities will quantify the refund amount after verifying the documents and thereafter, sanction the eligible amount of refund - appeal allowed by way of remand.

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• 2018 (2) TMI 1043
  Refund of unutilized CENVAT credit - input services - Renting of Immovable Property Service - Event Management Service - Outdoor Catering service - Air Travel Agency service - denial on account of nexus - Held that: - In view of definition of input service as contained in Rule 2(l) of CENVAT Credit Rules, all these input services on which refund has been denied are related to the provisions of Export of Service - for the subsequent period, the Department itself has allowed the refund on certain services and this Tribunal in the appellant’s own case Commissioner of Service Tax Versus Nvidia Graphics Pvt Ltd [2017 (1) TMI 1081 - CESTAT BANGALORE] has allowed the refund on ‘Renting of Immovable Property service’ and “Event Management Service”. All these services fall in the definition of “input service” and the appellants are entitled to claim refund subject to verification of documents - appeal allowed by way of remand.

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• 2018 (2) TMI 1042
  Management or Business Consultant service - Revenue entertained a view that the appellants were providing taxable service under the category of “Management or Business Consultant” in terms of Section 65(65) read with Section 65(105)(r) of the Finance Act, 1994 - Held that: - respondent–assessee has not provided any advice or consultancy with reference to organisation of M/s RPS Associates or business of M/s RPS Associates. No such role can be inferred from the agreement - demand set aside. Real Estate Agent service - consideration received to effect the change of name of allottees/ buyer of the property in the project developed by the appellant - Held that: - identical issue decided in the case of CST Vs. Ansal Properties & Infrastructure Ltd. [2017 (9) TMI 1071 - CESTAT NEW DELHI], where it was held that the changes made in the records of the respondent are not causative factors for such sale or purchase, no service tax liability can be confirmed against the respondent under this category. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1041
  Commercial or Industrial Construction Services - construction of cardio vascular centre at Bikaner by M/s. N.S. Associates for M/s. Haldiram Charitable Society - whether commercial activity or otherwise? - Held that: - The provisions of Section 65(25)(b) intended for taxing “Commercial or Industrial Construction Service” is for construction of a new building or civil structure, which is used or to be used primarily for commerce or industry or work intended for commerce or industry. The building now in dispute is a medical facility intended to be used for treatment of public. In fact, the respondent pleaded that the said building has been handed over to the Government for use as a medical facility for common public. The hospitals and buildings for medical facilities used by the public cannot be considered as civil construction or building intended for use for commerce or industry. Collection of fee, if any, for the usage of the said facility by itself will not make a building as used for commerce or industry. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1040
  Refund claim - time limitation - N/N. 14/2016-CE (NT) dated 01/03/2016 - Rule 5 read with N/N. 27/2012-CE (NT) dated 18/06/2012 - Held that: - the period of one year, in case of export of service, shall be reckoned from the date of receipt of foreign exchange and not from any other date - In the admitted fact of this case, the refund claims were filed within one year from the date of receipt of foreign exchange. Therefore, irrespective of whether the amendment provision was brought from 01/03/2016, the refund claim filed by the respondent is well within the period specified under Section 11B - the refund is not time barred. The issue is covered by the judgement of this Tribunal in the case of Bechtel India Pvt. Ltd. [2013 (7) TMI 490 - CESTAT NEW DELHI], where it was held that In case of export of Services, export is complete only when foreign exchange is received in India. Relevant date of export of services is date of receipt of foreign exchange. Refund allowed - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1039
  Renting of immovable property services - Penalty - case of appellant is that they have received compensation and not rent from seller - Held that: - Though there was no agreement between the seller and appellant, still in the current circumstances it is seen that the appellant had allowed the seller to use premises for further renting, for a consideration - appellant could have availed the credit of Service Tax already paid by seller - demand upheld - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1038
  Business Auxiliary Service - short payment of service tax - tax liability on the Overriding Commission received for cargo bookings undertaken by them for Airlines not discharged - Held that: - the adjudicating authority has not recorded any reasoning for coming to a conclusion as to why he has held that the respondents herein had not undertaken any activity of cargo handing during the period in question and that they did not receive any Overriding commission. The adjudicating authority should be given an opportunity to come to a conclusion afresh on this point - appeal allowed by way of remand.

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• 2018 (2) TMI 1037
  Refund claim - service tax paid on the services used in relation to export - N/N. 41/2007 dated 6.10.2007 - Port services - GTA Service - Overseas Commission - Held that: - as, regards port services, it is not disputed that the appellant has submitted the bills issued by various service provider. The appellant has paid the service tax to the service provider, is also not disputed - when all the documents are produced, refund to be allowed. GTA service - Held that: - amount of refund claim of Rs. 34,794/- was disallowed for the reason that draw back has been claimed. In the peculiar facts and circumstances, impugned order appears reasonable - refund rejected. Overseas Commission - Held that: - appellant has not submitted the contract / agreement. Further, the appellant has not submitted the documents evidencing the actual payment to the co commission agent as well as foreign commission agent of the said services - appellant submits that the said documents can be produced to the lower authorities - matter placed on remand for re-examination of documents. Appeal allowed in part and part matter on remand.

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• 2018 (2) TMI 1036
  Valuation - Management, Maintenance and Repair service - case of the Revenue was that the appellant/assessee was required to pay the Service Tax on the total contracted value, including consumables and items used in the repair of the motors - Held that: - The appellant/assessee has paid value added tax on goods used in the repairing process. The mere fact that the cost of the various items was shown for the purpose of price variation will not make any difference to the legal position. Reliance placed in the case of M/s JP TRANSFORMERS Versus COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, KANPUR [2014 (7) TMI 115 - CESTAT NEW DELHI], where it was held that on examination of the documentary evidences, we find that the agreements as also the invoices reflected the cost of the materials and the labour separately as also establishes the fact of payment of excise duty, VAT/CST on the said goods sold, it has to be held that no service tax would be leviable on the value of the materials sold. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1035
  CENVAT credit - input services - sales promotion - Held that: - reliance placed in the case of BHURUKA GASES LTD. Versus COMMISSIONER OF C. EX., CUS. & S.T., BANGALORE-I [2014 (1) TMI 1662 - CESTAT BANGALORE], where it was held that Canvassing and procuring order were in relation to sales promotion and would fall under sales promotion activity - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1034
  100% EOU - service tax and education cess on the royalty paid - intellectual property service - services of temporary transfer of technical know-how - the sole contention of the Department is that such technical know-how is recognised under international treaties to which India is a signatory and hence it is leviable to tax in India - Held that: - as per Article 253 of the Constitution of India, for implementing any treaty agreement or convention with any country or any decision made at international conference etc., there should be a municipal legislation enacted for giving effect to such international agreement or treaties - also, the show-cause notice does not clearly state the nature of know-how which the appellant has availed from his foreign company. Demand not sustainable and is set aside - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1033
  Adjustment of excess service tax paid - Held that: - the issue is no longer res integra and is decided in favor of the respondent in the case of Jubilant Organosys Ltd. [2014 (10) TMI 138 - CESTAT NEW DELHI], where it was held that the adjustments of service tax was allowed in terms of Rule 6(4A) of Service Tax Rules, under similar circumstances - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1032
  Voluntary Compliance Entitlement Scheme - declaration under VCES rejected alleging that in the adjudication for the period up to 2007-08, there was a demand of Rs. 1,83,849/- under Works Contract Service and hence the appellant suffered from disqualification under second proviso to Section 106(1) - Held that: - the VCES scheme is part and parcel of Finance Act, 1994 and all the provisions of the Finance Act are applicable to the scheme to the extent of specifically excluded - the appellant attracts disqualification because demand was confirmed against him under the WCS for the period 2007-08 which clearly covered under Section 106(2) of the Finance Act, 2013 - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1031
  Consulting engineer service - Extended period of limitation - whether the Department was entitled to issue show-cause notice dt. 21/04/2005 for demand of service tax, by invoking the longer time limit under Section 73 of the Finance Act, 1994? - Held that: - the Department had in fact issued 5 show-cause notices which covered some of period covered in the present proceedings. From the earlier SCN and the corresponding order of the original authority, it is found that the Department, in fact, in addition to alleging non-filinng of ST3 returns had also assessed the liability of the respondent for a part of the period which is covered in the present proceeding - the Department was precluded from issuing another SCN invoking the suppression clause. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1030
  C&F Services - recipient of service - reverse charge mechanism - Held that: - It is not in dispute that the show cause notice has been issued to all the appellants for recovery of service tax under Section 73 of the Finance Act, 1994. The issue of demand of service tax under Section 73 was adjudicated and demands confirmed relying upon retrospective amendments to Finance Act, 1994. A Division Bench of this Tribunal in the case of L.H. Sugar Factory [2004 (1) TMI 111 - CESTAT, NEW DELHI] in an identical issue ruled in favour of the assessee. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1029
  Condonation of delay of 1557 days in filing the appeal - non-service of notice u/s 37C of the CEA 1994 read with Section 83 of the FA 1994 - Held that: - impugned order has been served on the employee Shri Sudhir Niranjanlal Sharma on 18.1.2013 who has furnished an acknowledgement with regard to receipt of the OIO - the delay on the part of the appellant is hit by the Doctrine of Laches - the explanation for the inordinate delay given by the appellant is not convincing or persuasive. Delay being huge and unreasonable as well as appellant not having been able to put forward sufficient cause for condonation of the same - COD application dismissed.

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• 2018 (2) TMI 1028
  Refund claim - Renting of Immovable Property Services - Maintenance or Repair Services - Delegate (Commercial Training or Coaching) - Maintenance or Repair Service - denial on the ground that the entire credit availed on the input services could not be utilised by them being an E.O.U - Held that: - in the appellant's own case M/s. Integra Software Services Pvt. Ltd. Versus CCE & ST, Pondicherry [2017 (8) TMI 1053 - CESTAT CHENNAI], the issue whether the appellant is eligible for credit on Renting of Immovable Property Service for the service tax paid under reverse charge mechanism by the company has been discussed and analysed - the issue has to be remanded to the adjudicating authority who shall consider facts of the case - matter on remand. With regard to the Maintenance or Repair Services, the learned consultant has submitted that the invoices pertain to Housekeeping Services and the appellants have paid service tax under this category - Held that: - By mistake, they have noted in their ledger that the service tax has been paid under Maintenance or Repair Services. This aspect also requires verification - matter on remand. The credit/refund in respect of Management Consultant Services and Delegate Fees having decided in favour of the appellants in the case of M/s. Integra Software Services Pvt. Ltd. Versus CCE & ST, Pondicherry [2017 (8) TMI 1053 - CESTAT CHENNAI] - refund allowed. Partly decided in favor of appellant and part matter on remand.

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• 2018 (2) TMI 1027
  Whether appellant herein engaged in operations and maintenance of power plants, as per the agreements entered with GVK industries Ltd., at various locations is liable to be taxed? - the contract is for operation and maintenance of the power plant to produce electricity and transmit it to the power grid. Appellants are challenging orders on two grounds i.e. production of electricity is manufacture of goods and that contracts cannot be vivisected and amounts are not received for maintenance and repair but for running of power plant effectively. Held that: - the amounts which are received by the appellant as consideration, are for running of the power plant and not only for maintenance and repair charges. The agreement is for operation of power plant for 24 x 7 in pursuance of such agreement, appellant prepares a detailed plan as to how to conduct maintenance of the power plant, repairs of various machinery and submits the plan to the power plant owners, in order to, give them advance intimation of the planned shutdown of the power plant - this maintenance under taken by the appellant is in order to keep the power plant in the working conditions; there is no interruption in power generation and transmission to the power grid. Similar issue came up before this Bench in the case CLP Power India Ltd., [2016 (11) TMI 645 - CESTAT MUMBAI] wherein the Bench after referring to various case laws and producing excerpts from them, concluded operation of power plant is not taxable under maintenance and repair services - decided in favor of appellant. Manufacture - whether Generation of the electricity is a manufactured product? - Held that: - the Tribunal in the case of NTPC Sail Power Co. Pvt Ltd., [2009 (5) TMI 59 - CESTAT, KOLKATA] have clearly held so and no other contrary decision is brought to our notice - decided in favor of appellant. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1026
  Benefit of N/N. 32/2004-ST, dated 03.12.2004 - C&F and logistic services - Department took the view that exemption would not be available to the appellant as there was no evidence to show that the conditions specified in the notification were fulfilled - Held that: - circular No. 137/154/2008-CD.4, dated 21.08.2008, clarified that it is but evident that even for the past cases before the extension of benefit of 75%, abatement to GTA services unconditionally (by notification No. 13/2008, dated 1.3.2008), the benefit of such abatement will be available to the appellant without requirement of any specific endorsement on every consignment note, but merely on general declaration from GTA - In the instant case, from the facts it is seen that the appellants have obtained such undertaking letters from the concerned transporters. This being so, the confirmation of demand is in contradiction to the clarifications of CBEC themselves vide circular dated 21.08.2008 - demand set aside - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1025
  Valuation - GTA service - abatement - N/N. 32/2004-ST, dated 03.12.2004 - Department took the view that there is no evidence that credit of duty paid on inputs or capital goods, has not been taken by the Goods Transport Agency under N/N. 12/2003-ST, dated 20.06.2003 - Held that: - from circular No. 137/154/2008-CD.4, dated 21.08.2008, it is but evident that even for the past cases before the extension of benefit of 75%, abatement to GTA services unconditionally (by notification No. 13/2008, dated 1.3.2008), the benefit of such abatement will be available to the appellant without requirement of any specific endorsement on every consignment note, but merely on general declaration from GTA. In the instant case, from the facts it is seen that the appellants have obtained such undertaking letters from concerned transporters. This being so, the confirmation of demand is in contradiction to the clarifications of CBEC themselves vide circular dated 21.08.2008 - demand set aside. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1024
  Business of selling residential houses and apartments - levy of service tax - case of appellant is that they are contesting the issue only on the confirmation of the demands against them of Rs. 8.26 lakhs approximately on the ground that the said demand has been confirmed for the period post December 2012 for which no show-cause notices has been issued. Held that: - it is found that demand of approximately Rs. 7.48 lakhs has not raised in the show-cause notice issued to the appellant - the demand of approximately Rs. 7.48 lakhs which arises in respect of these two agreements entered post December 2012, are unsustainable as there is no demands which have been raised in the show-cause notice. To that extent the assessee/appellants appeal is allowed. Demand of Rs. 1.08 lakhs for the period in question up to December 2012 - interest - penalty - Held that: - the said demand is liable to be upheld as there is dispute that the tax liability needs to be discharged on the said amounts - Since the issue involved in these cases is regarding the interpretation of the provisions of Section 65(105). Hence no penalty is required to be discharged but the interest liability on the said amount of Rs. 1.08 lakhs needs to be discharged by the main appellant - interest upheld - penalty set aside. Appeal allowed in part.

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• Central Excise

• 2018 (2) TMI 1023
  Clandestine removal - unaccounted stock/clearances of excisable goods - irregular maintenance of records - penalty u/r 25/26 of CER - shortage of SS Billets - Held that: - the case of clandestine removal cannot be upheld only on the basis of shortage of excisable goods, it is imperative for the assessee to explain satisfactorily the non-availability of excisable goods which were produced and accounted for in their records. In the absence of satisfactorily explanation an inescapable conclusion as drawn by the lower authority regarding non-duty paid clearance of such accounted goods cannot be contested Unaccounted clearance of SS billets and flats - Held that: - while noting that detailed evidence regarding actual clearance, receipt of money, transport details were not available in the present case, it cannot be denied that evidence of unaccounted excess production has been recorded and the same could not be rebutted effectively by the appellant. Shri Desai has also accepted the production as reported by him. When such is the case, the burden is on the appellant to establish that the said goods were never in existence or not clandestinely cleared - decided against appellant. Appeal allowed in part.

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• 2018 (2) TMI 1022
  SSI Exemption - Dummy units - clubbing of clearances - During the course of investigation, it appeared that some records namely delivery notes, invoices of unused receipts were not only related to APPD but also to another two units viz; The Veera Silver Frames (VSF) and Sri Ambigai Lumber Board Works (ALBW) - Department took the view that although three units in the names of APPD, VSF, ALBW were apparently engaged in manufacture of Plywood and Block Boards, in reality only one unit APPD was manufacturing the said products and that the other two units were dummy units - SCN was only issued to APPD and not to VSF and ALBW - penalty - principles of natural justice. Held that: - It has been a long received rule that no one is to be condemned, punished or deprived in any judicial proceeding unless, he has had an opportunity of being heard - This is the essence of the maxim Audi Alteram Partem, namely no man should be condemned unheard. The maxim, being a cardinal principle of justice, is required to be followed in all judicial proceedings - The Central Excise Act, 1944 also similarly requires that where recovery of duties not levied or not paid or short levied or short paid etc. is proposed to be recovered from any person the Central Excise officer shall serve notice on such person, inter alia requiring him to show cause why he should not pay the amount specified in the notice. In the two show cause notices dt. 08.11.2012 08.01.2013 and in the statement of demand dt. 30.12.2013 the proposals for imposition of penalties under Rule 25 / Rule 26 (1) of the Rules have been made against VSF, ALBW and also Managing Partners and Partners of VSF and ALBW. All these persons should have been separately asked to show cause in the notice why proposed penalty should not be imposed on them - there are a number of Tribunal decisions which have consistently held that non-issue of SCN on the affected persons would vitiate the proceedings. The penalties imposed cannot sustain on account of their having not been asked to show cause with regard to proposal to impose such penalty, the penalties are therefore set aside. The Hon ble High Court of Bombay, in the case of CCE Mumbai Vs Sapna Engineering [2017 (3) TMI 782 - BOMBAY HIGH COURT] held that non-issue of SCN to the unit considered as a dummy unit vitiates the entire proceedings. Since the alleged dummy units namely VSF and ALBW having not been put to notice by way of issue of SCN, the entire proceedings for clubbing of value of clearances of those units with that of APPD will get vitiated ab initio. Hence the proceedings which have culminated in the impugned orders confirming differential duty liability on APPD by reason of clubbing of clearances of VSF and ALBW with that of APPD along with the imposition of penalties on APPD cannot sustain. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1021
  Clandestine removal - demand based on the chemist diary as per the panchnama drawn in the factory premises of the appellant - case of appellant is that panchnama is totally silent in respect of the original records. It is not possible to ascertain the writer/author of such photocopies. Held that: - the charge of clandestine of removal of the goods has been made against the appellant on the basis of chemist diaries recovered from the Chief Chemist, the main evidence and on the basis of statements recorded thereof - the Chief Chemist diaries showed that the raw material issued for manufacturing of the goods. The document does not reveal that the fact that the raw material issued for manufacturing has actually been manufactured whereas central excise duty to be paid by the assessee on manufacture of goods. Admittedly, the evidence of manufacturing of the goods has not been coming out from the diaries maintained by Shri Y.K.Bhargava. The contents of the diaries, merely showing issuance of raw materials, in that circumstance, cross examination of Shri Y.K.Bhargava was required to ascertain the truth. During the adjudication, the statement of Shri Y.K.Bhargava was not examined in chief and thereafter no opportunity for of cross examination of Shri Y.K.Bhargava is afforded to the appellant, therefore, there is gross violation of principle of natural justice In terms of Section 9D of the Central Excise Act. The sole basis is the diary maintained by Shri Y.K.Bhargava and prior to June, 2005, Mr. Duggal was maintaining the diaries. Admittedly, the statement of Shri Duggal has not been recorded. Therefore, the contents of the diaries cannot be examined. Moreover, the contents of the diaries maintained by Shri Y.K.Bhargava which is the fact on record are not with the regard to the clandestine removal, in that circumstance, the statement of Shri Y.K.Bhargava cannot be the basis to allege clandestine removal. Te demands on the basis of diaries recovered and other documents recovered from the appellant cannot be the basis to allege clandestine manufacture of the goods - the demands are on the basis of assumptions and presumptions, the charge of clandestine removal of the goods is not sustainable, in the absence of positive evidence or corroborative evidence. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1020
  Clandestine manufacture and removal - shortage of stock - on examination of the electrical power consumption for the period from 5.8.2011 to 18.1.2012, it was found that there is huge gap in the electric power consumption and case of production per metric ton (PMT) ranging from Rs. 1972/- per M.T. during December 2011 to January 2012 to Rs. 2171/- per MT during August 2011 - demand is based upon the private note book and invoice books recovered from the room of Shri Kuldeep Saini, the Supervisor of the Appellant Company. Held that: - The officers has not been able to find single buyer of the said goods shown to have received the goods from the Appellant. There is no corroboration with goods having been received by any single person. Even not a single statement of transporter or driver of vehicle has been recorded to show that the goods allegedly were removed from the Appellant factory without payment of duty. No investigation has been undertaken from the raw material supplier as whether any goods were received by the Appellant in clandestine manner. Though the show cause notice has relied upon the statement of weighbridge owner to allege that the clandestinely cleared goods by the Appellant were weighed at the said weighbridge, however even the vehicle owner or drivers were not questioned whose vehicle numbers were mentioned in the weighbridge register - no evidence in the form of receipt of amount towards consideration of such alleged clandestine clearance has been brought on record. The revenue has alleged that the looking to the power consumption it shows that the Appellant had manufactured and cleared the goods without payment of duty - Held that: - only on the basis of electricity consumption without showing commensurate quantity of raw material consumed, source of procurement of excess raw material, payment made to raw material supplier, excess labour involved, clearance of finished goods its transportation and receipt of consideration of finished goods, the demand cannot be made - demand not sustainable. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1019
  CENVAT credit - cement, HR plates, Angles, Channels, Beams, chequered plates and asbestos Cement Products (roofing sheets) etc. - Held that: - appellant have been producing the Chartered Engineer s certificate before the lower authorities and the said certificate indicates the use of items for fabrication of storage tanks, bunkers, conveyors, pollution control equipments and supporting equipments. In the absence of any contradictory certificate on record holding otherwise, that the inputs were used for fabrication of machinery, dismissal of certificate issued by Chartered Engineer by both the lower authorities that too summarily, seems to be not in consonance of law. Further, receipt of goods and thereafter used for fabrication as per Chartered Engineer certificate is not contested but only contested on a point that the inputs do not fall under the category of capital goods and hence not eligible for cenvat credit, will not carry any further of the Revenue. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1018
  CENVAT credit - it was alleged that appellant had wrongly availed Cenvat credit on the basis of invoices, without actual receipt of the goods in its factory - Held that: - except the statements of third party i.e. transporters and the Custom House Agent, the department has not brought any other evidence to substantiate its claim that the goods were not received in the factory of the appellant and Cenvat credit was availed based on the invoices only. Further, though the transporters were called for cross-examination on different dates, but they could not present themselves before the adjudicating authority. Thus, the statement recorded from those transporters cannot be used in isolation for deciding the case against the appellant. Tribunal in the case of M/s Kamdhenu Ispat Ltd. [2017 (9) TMI 546 - CESTAT NEW DELHI] has dealt with identical situation, where the opportunity of cross-examination of the witnesses were not provided to the appellant. Since the onus lies with the department to prove that the Cenvat credit was availed without receiving of the goods has not been satisfactorily discharged, the adjudged demand cannot be confirmed against the appellant. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1017
  Rectification of mistake - AR defended the impugned order and submitted that under the garb of rectification of mistake application, the applicant wants to review the decision on merits - Held that: - there is no error apparent on the face of the record which needs to be corrected under the garb of rectification of mistake application - the Tribunal has a limited power of review. The Tribunal cannot change the decision on merits under the garb of rectification application - ROM application dismissed.

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• 2018 (2) TMI 1016
  CENVAT credit - outdoor catering availed for their canteen for the period after 1.4.2011 - Held that: - there is no evidence that the canteen services have been used primarily for personal use of employees. Provision of canteen is a statutory requirement in large factory and thus it cannot be said that the canteen is provided primarily for personal use of employees. In these circumstances, cenvat credit on outdoor catering services availed for maintaining canteen cannot be disallowed except for the part where the amount is recovered from the employees. The demand of recovery of cenvat credit on canteen services is set aside - the matter is remanded to the Commissioner (Appeals) to decide afresh - appeal allowed by way of remand.

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• 2018 (2) TMI 1015
  CENVAT credit - whether the respondent is entitled for CENVAT credit of service tax paid on various services received and used in the residential township located near their refinery and Petrochemical Complex at Jamnagar, Surat, Vadodara, & Nagothane? Held that: - services involved in the present case are related to construction, repairs and maintenance of residential complex - though the respondent had submitted CAS-4 certificate, both the Authorities have only went on interpretation of definition of input service as provided under Rule-2(l) of CCR 2004, to decide eligibility of credit - Both the Authorities below have not verified the factual aspects whether the expenses of various services used for construction, repair and maintenance of residential complex were included in the cost of the final product which were cleared on payment of duty. Matter needs reconsideration - appeal allowed by way of remand.

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• 2018 (2) TMI 1014
  SSI Exemption - clubbing of clearances of four entities i.e., Silicone Carbide Grinding Mills Pvt. Ltd (i.e. SCGM), Lignin Research Center (i.e. LRC), Sweta Electric (P) Ltd (i.e. Sweta) and Indostaits (Pvt.) Ltd. (i.e. Indostraits) - dummy units - it has been held in the impugned order that the four companies are dummy company. They are a facade created for circumventing the small scale notifications and therefore the aggregate value of clearance of all four companies were clubbed. Held that: - while there were noteworthy transaction between SCGM and LRC, no significant transaction in respect of Sweta and Indostraits has been pointed out in the show-cause notice or in the impugned order. The only evidence in respect of Sweta and Indostraits relates to common office premises, common control of Shri S.V. Jayshankar. In absence of any evidence of common pool of funds, free movement of material, common manufacturing operations etc, merely on the basis of some common shareholding and management clubbing of clearance by holding them as dummy units cannot be upheld. In these circumstances, the charge for clubbing the clearances of Sweta and Indostraits with SCGM and LRC cannot be sustained. The two units were commercially interacting with each other as in they were buying and selling material to each other. Therefore a few transactions do not by any manner indicate that there was a common pool of funds. It can be seen that the SCGM and LRC came into existence as totally different units. SCGM came into existence in1982 while LRC was formed in 1966. The original shareholding pattern was very different at the time of formation. Later by resignation and induction of partners the shareholding pattern evolved to present state - It is apparent that the SCGM and LRC have separate identities right from the inception. Various licences have been procured at different times. Thus independent development of the two cannot be doubted. Tribunal in the case of Electro Mechanical Engg Corpn [2002 (5) TMI 186 - CEGAT, NEW DELHI] has in almost identical circumstances held that clearances cannot be clubbed. No evidence of any significant transaction between Sweta and Indostraits among themselves or with SCGM and LRC. Some instances of transactions have been pointed out between SCGM and LRC, but they are neither significant nor substantial to prove that there was common pool of funding or common identity of the two or any flowback. Thus the clearances of the four appellants cannot be clubbed for the purpose of small scale exemption. Extended period of limitation - Held that: - at the material time there was a view of revenue that each limited company is a manufacturer by itself and will be entitled to a separate exemption limit. In such circumstances the bonafides of the appellants cannot be doubted - invocation of larger period of limitation is not justified. Confiscation of goods cleared during the previous five years - redemption fine - Held that: - Since on merits the case is not established there can be no confiscation. Moreover in absence of goods and in absence of any seizure no confiscation can be ordered and no redemption fine can be imposed - confiscation and redemption fine set aside. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1013
  SSI exemption - SCN pending for adjudication - Held that: - the Appellant’s claim for SSI Exemption for the year 2004 - 05 is subject to outcome of the adjudication of show cause notice dt. 20.07.2005. The ld. Consultant has informed us the said SCN dt. 20.07.2005 is pending for adjudication - it is appropriate to remand the case back to the adjudication authority for deciding the eligibility of the Appellant towards SSI Exemption subject to outcome of adjudication of SCN dt. 20.07.2005 - appeal allowed by way of remand.

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• 2018 (2) TMI 1012
  Validity of SCN - cross-examination sought of employees who left the organisation - only challenge to the impugned order is by trying to shift the responsibility on two employees, who have later left the organisation - Held that: - It is apparent that the show-cause notice is not merely based on the statements. A lot of records have also been recovered from the appellant's premises as well as from M/s.B.G. Shirke Construction Technology Ltd., Pune, and thus simply because of two employees whose statements have been relied upon and, according to the appellants are not traceable and therefore, cross examination cannot be granted is not sufficient to dislodge the impugned order. The appellants are trying to defeat the proceedings by seeking cross examination of the people who were their employees and have now left. They are not traceable by the appellants too. They cannot escape by challenging the valuation of goods where they failed to co-operate and where reasonable opportunity has been given done by the Revenue, to give proper valuation. Appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1011
  CENVAT credit - Rule 6(3) of the Cenvat Credit Rules, 2004 - Revenue is seeking to demand 5% of the value of the exempted goods in terms of Rule 6(3)(i) of the Cenvat Credit Rules whereas the appellant wished to reverse the amount in terms of Rule 6(3)(iii) of the Cenvat Credit Rules - Held that: - Tribunal in the case of Mercedes Benz India (P) Ltd. [2015 (8) TMI 24 - CESTAT MUMBAI] held that Revenue cannot enforce an option on them and it is their will to choose from the various options available under Rule 6(3) of the Cenvat Credit Rules. It is apparent that Revenue cannot enforce any option on the appellant. Accordingly the option exercised by the appellant cannot be discarded even if the same has been made after the clearance of the goods. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1010
  CENVAT credit - outdoor catering services - Held that: - the outdoor catering services availed in respect of canteen maintained on account of the factory required under the Factories Act, 1948 cannot be treated as excluded from the definition of input service - outdoor catering services not primarily for personal use or consumption of employee would be covered under the definition. The respondent can avail the benefit of the said credit only to the extent that the incidence of which is borne by the respondent - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1009
  Demand of interest and penalty - wrongful cenvat credit availed and reversed by the appellant - Held that: - it is apparent that the credit utilized in most of the months is in excess of the credit available as closing balance in the previous months. In these circumstances, it cannot be said that the appellant has not utilized the credit wrongly availed - Hon’ble High Court of Bombay in the case of GL&V India Pvt. Ltd. - 2015 (321) ELT 611 (Bom.) has held that interest can be demanded even if cenvat credit wrongly availed has not been utilized. Extended period of limitation - Held that: - the period of limitation would be applicable to demand of interest and demand only within five years from the date of issuance of the same can be upheld. The impugned order is modified to that extent and the penalty and demand of interest is accordingly revised to that which is within five years from the date of issue of SCN. Appeal allowed.

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• 2018 (2) TMI 1008
  Recovery of erroneous refund - Held that: - Though the appellants have filed appeal before the Hon'ble High Court but no stay has been granted by the Hon'ble High Court - Therefore, in the present case, which is related to recovery proceedings of the erroneous refund, the matter cannot be kept in abeyance - appeal dismissed.

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• 2018 (2) TMI 1007
  Refund of cenvat credit reversed - Bagasse - denial on the ground of unjust enrichment - Held that: - The appellant has submitted the evidence in support of their claim before Tribunal. However, the same was not presented before Commissioner (Appeals) - The impugned order is set aside and the matter is remanded to the Commissioner (Appeals) for reconsideration - appeal allowed by way of remand.

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• 2018 (2) TMI 1006
  SSI Exemption - whether the appellant is entitled for SSI exemption N/N. 175/86-CE dated 01/03/1986 for the period 1991-92, when they failed to file a declaration under N/N. 13/92-CE (NT) dated 14/05/1992? - Held that: - merely for non-filing of said declaration, substantial benefit of N/N. 175/86-CE dated 01/03/1986 cannot be denied. It is the fact on record, which is admitted in the order passed by the lower authorities that the appellant’s turn over in both the relevant years were well within the exemption limit of Rs. 30 lakhs - appellant was entitled for exemption N/N. 175/86 and/or 1/93-CE - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1005
  Valuation - physician samples - Section 4(1)(a) of CEA - Held that: - Section 4 (1) (b) can be made applicable only when there is no sale value is available - As per the fact of the present case there is no dispute about the nature of the transaction, i.e. sale of goods on principal to principal basis, provisions of Section 4 (1) (b) is not applicable - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1004
  Valuation - includibility - quantity discount - Held that: - the appellants are manufacturing the said goods on job work basis. In these circumstances, the valuation is to be arrived at on the basis of the decision of the Hon,ble Apex Court in the case of Ujagar Prints [1988 (11) TMI 106 - SUPREME COURT OF INDIA] - reliance placed in the case of Atul Painters [2005 (8) TMI 414 - CESTAT, MUMBAI], where it was held that Revenue should bring out the fact of grant of the discount led to lowering the assessable value than as per the Ujjagar Prints formula - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1003
  Condonation of delay of 455 days in filing appeal - delay due to financial difficulty - Held that: - the only reason stated in the application seeking condonation of 455 days delay is the financial difficulties but the applicant has not given any proof regarding his financial difficulties - there is a delay of 455 days which is inordinate delay which has not been satisfactorily explained - delay cannot be condoned - appeal dismissed.

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• 2018 (2) TMI 1002
  Manufacture - repacking / relabeling of the Copper Sulphate purchased from other suppliers - It was alleged in the SCN that the respondent had not taken into account the value of Copper Sulphate purchased from other manufacturers and sold to customers after repacking and relabelling at their sales depot at Chikmaglur - Held that: - Revenue has not been able to bring any evidence on record to prove that the respondent has been carrying out labelling or relabeling of Copper Sulphate purchased from other dealers - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1001
  CENVAT credit - input/input services for manufacture of taxable as well as exempt goods - non-maintenance of separate records - demand of an amount equivalent to 6% of the value of the exempted goods cleared - Held that: - there is no dispute as to the fact the respondent had cleared the sulphuric acid to fertilizer unit which availed the benefit of Notification No. 04/2006-CE as amended. The said Notification specifically provides for availment of an exemption subject to following the chapter X procedure. It is settled law, the goods cleared under chapter X procedure are not exempted goods - demand set aside - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1000
  Rectification of mistake - Held that: - it is evident that the aspect of issue concerning clause (ii) and (iii) of Sl. No.3 of Notification No.23/2003 was very much in dispute and indeed was raised in the show cause notices and confirmed by the adjudicating authority. This being so, we find merit in the submission of ld. AR that it is incorrect to state that there is no dispute on this matter from the department’s side - the observation of the Tribunal in para 20 of the impugned order, namely, that there is no dispute on either side insofar as clause (ii) and (iii) is concerned, is a mistake apparent on the face of the record, which requires rectification and we proceed to do so accordingly. Ld. counsel has made contentions that the issue has been clarified by the DGFT and Director (Cost) in their favour. We however find that these communications may not have been available to the adjudicating authority - as the Tribunal has already remanded the matter to the adjudicating authority, we modify the order by making additional directions to the said authority to also consider the dispute regarding clause (ii) and (iii) of Sl. No.3 of Notification No. 23/2003, taking into account the submissions put forth by both the sides. ROM application dismissed

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• 2018 (2) TMI 999
  CENVAT credit - input services - Real Estate Service - Commercial Construction Service - change of opinion - extended period of limitation - Held that: - the transactions under dispute are properly recorded in the books of accounts ordinarily maintained in the normal course of business - also, the said transactions were already subjected to previous audit which was done prior to May, 2013. It is evident on the face of record, that it is only after the subsequent audit that the SCN were issued by way of change of opinion. The SCN for the extended period of limitation is not maintainable - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 998
  Classification of goods - Rose Syrup - Sarasaparilla Syrup’ (Nannari syrup) - whether classified under CETH 2001.00 or under CETH 2108.20? - Extended period of limitation - Held that: - the products are made out of rose petals and nannari (roots). They are known as 'Rose Syrup' and 'Sarasaparilla Syrup'. Chapter Note 6 to Chapter 21 of the tariff clearly states that syrup containing not less than 10% fruit juice or flavoured with non-fruit flavours such as rose, khus, kewara fall under 2108.00 - following the decision laid down in Bectors Foods Specialities Pvt. Ltd. [2008 (8) TMI 146 - CESTAT NEW DELHI], it is held that the subject goods merit classification under 2108.20 as 'Sharbat' from 16.3.1995 onwards - the demand prior to 16.3.1995 is unsustainable and requires to be set aside - Consequently, the demand as well as interest raised after 16.3.95 is upheld. Penalty - Held that: - aking into consideration the issue being classification and interpretational one, we are of the considered opinion that the penalties imposed are unwarranted and thereby we set aside the same. The matter is remanded to the adjudicating authority for the limited purpose of re-quantification of duty giving the benefit of cum duty price to the appellant.

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• 2018 (2) TMI 997
  Refund claim - unjust enrichment - whether the refund arising to the appellant on finalization of provisional assessment for the period October, 2009, have been rightly rejected on the ground of unjust enrichment? - Held that: - the appellant have collected lesser amount of duty and or/ nothing more than what is stated in their invoices or the excise duty indicated on the invoices - there is no case made out by the Revenue of unjust enrichment. Matter remanded with the direction to the Assistant Commissioner/Deputy Commissioner to allow the refund subject to verification - appeal allowed by way of remand.

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• 2018 (2) TMI 996
  CENVAT credit - input services - Octroi - Commercial & Industrial construction services - Erection, Commissioning and Installation Services - Rent-a-Cab Service - interior Decorator Services - denial on the premises that these services are not used in or in relation to the manufacture of final product as per Rule 2(l) of CCR 2004. Octroi service - Held that: - the said services were in connection with the procurement of inputs, it is to be held as part of business and the payment to these agencies was a business expenditure in connection with manufacture of goods - credit allowed. Commercial or Industrial Construction Services - Erection, Commissioning or Installation Services - Held that: - any services availed by appellant for repair and maintenance or erection, commissioning or installation services, appellant is entitled for CENVAT Credit - credit allowed. Rent-a-Cab Service - Held that: - there is an assumption and presumption of learned adjudicating authority that the service has been used for personal use - without specific allegation, CENVAT credit cannot be denied to the appellant - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 995
  Valuation - Cement supplied to industrial/institutional consumers - concessional rate of duty - Department took the view that such packages would require the goods to be sold under RSP and hence provisions of section 4A of the Act will apply - Held that: - reliance placed in the case of GRASIM INDUSTRIES LTD. (UNIT-I) Versus COMMISSIONER OF C. EX., TRICHY [2008 (10) TMI 462 - CESTAT, CHENNAI], where it was held that no RSP requires to be printed on the goods sold to ‘industrial/institutional consumers as defined under the rules framed under the Standards of Weights and Measures Act and that such goods would be covered under Sl. No. 1B or 1C of N/N. 4/2006-C.E. by virtue of the Second Proviso to the Explanation to Sl. No. 1C of the Notification as amended. There is no stay ordered by the Hon'ble Supreme Court against the decision of M/s. Grasim Industries Ltd. and decision in this case apply - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 994
  Refund claim - P or P Medicaments - case of Revenue is that there is no erroneous payment of duty on the physician samples and hence question of refund of duty does not arise - Held that: - Hon’ble Supreme Court in CCE, SURAT Vs. SUN PHARMACEUTICALS INDS. LTD.- 2015 (12) TMI 670 - SUPREME COURT, whereby it has been held that in such cases the valuation would be covered by Section 4 (1) (a) of the Central Excise Act, 1944, on the basis of the contract price between the two parties - refund eligible - for the limited purpose of examining whether the refund so sanctioned would be hit by unjust enrichment, the matter are remanded back to the original authority. Demand of interest - penalty - delayed payment of duty - Held that: - As we have already decided the primary issue in favour of the appellants in respect of other two appeals on the refund matter, this appeal is also allowed by setting aside the portion of the impugned order relating to upholding of demand of interest amount of Rs. 4,54,419/- and penalty of Rs. 2,000/- - interest and penalty set aside. Appeal allowed by way of remand.

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• 2018 (2) TMI 993
  100% EOU - refund of unutilized CENVAT credit - input service - telecom service - maintenance and repair service - Held that: - The work undertaken by the two providers are not seen to be construction of actual structure but appear to be in the nature of repair. While addition, alteration, replacement or remodeling of existing structures do find specific mention in section 66E(b) of Finance Act, 1994, repair does not - refund allowed - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 992
  CENVAT credit - gardening service - rent-a-cab service - maintenance service - Held that: - in various decisions it was held that all these services are eligible for credit - Tribunal in Reliance Industries Ltd v. Commissioner of Central Excise & Service Tax, LTU, Mumbai [2016 (8) TMI 123 - CESTAT MUMBAI] has held that in the absence of evidence of personal consumption, availment of credit of tax paid on ‘rent-a-cab service’ is proper - credit on gardening service and maintenance service allowed in the case of Commissioner of Central Excise, Bangalore v. Millipore India Pvt Ltd [2011 (4) TMI 1122 - KARNATAKA HIGH COURT] - credit allowed - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (2) TMI 991
  Principles of Natural Justice - TNVAT Act - CST Act - reversal of input tax credit - impugned orders have been challenged on the ground that the petitioner was not afforded adequate opportunity to submit their objections and that no opportunity of personal hearing was granted - Held that: - Considering the fact situation, which has led to the impugned assessment orders and also the fact such a consequence is on account of the petitioner not being diligent, this Court is inclined to grant one more opportunity to the petitioner, however, subject to a condition - the writ petitions are disposed of with a direction to the petitioner to pay 15% of the disputed tax for each of the assessment years within a period of three weeks from the date of receipt of a copy of this order - petition allowed by way of remand.

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• 2018 (2) TMI 990
  Reversal of input tax credit - TNVAT Act - Form C - principles of Natural Justice - Held that: - there is violation of natural justice and writ Court has not committed any error - Writ Court has set aside the orders impugned therein, on the grounds that there was no proposal for input tax credit. If law permits initiation of fresh action, no liberty need be given - petition dismissed.

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• 2018 (2) TMI 989
  Release of attached property - whether the Bank has priority over the dues of the Sales Tax Department? - Held that: - the issue is no longer res integra and has been decided by a Full Bench of this Court in the case of The Assistant Commissioner (CT) vs. the Indian Overseas Bank and another [2016 (12) TMI 373 - MADRAS HIGH COURT] in which the Court held that financial institution, which is a secured creditor would have 'Priority of Charge' over the mortgaged property over and above the Department of the Government. The attachment of the mortgaged property by the Sales Tax Department is held to be without jurisdiction - petition allowed.

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• 2018 (2) TMI 988
  Principles of Natural Justice - the respondent did not appreciate the scope of documents produced by the petitioner, though they have admitted that the petitioner has produced 62 invoice copies - Held that: - this Court is of the view that the assessment should be redone by considering all the documents and by directing the petitioner to produce all the documents, since the endeavor of the respondent should be to ensure that, correct rate of tax is levied and collected, as the assessment order should not be paper orders. - petition allowed by way of remand.

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• 2018 (2) TMI 987
  Validity of assessment order - TNVAT Act - it was alleged that substantial part of the mistake lies with the dealers, as they did not respond to the revision notices respectively dated 01.4.2016 and 06.4.2016 - Held that: - On a perusal of the income and expenditure accounts filed by the petitioners under the Income Tax Act, 1961 for the relevant assessment years, it is seen that substantial portion of the work has been done by the petitioners for various local bodies and the petitioners have given the contract numbers and also mentioned about the departmental supply of materials wherever it has been given. It may be true that the petitioners did not produce the copies of the contract agreements. However, the petitioners having transacted business with the Governmental bodies, the respondent can accept any authenticated record given by the concerned authority, for whom, the work has been performed by the petitioners and this would be sufficient to examine the correctness of the transactions reported by the petitioners in their respective turn over. The petitioner directed to pay 15% of the dispute tax for each of the assessment years as computed in the impugned assessment orders, within a period of 15 days from the date of receipt of a copy of this order - petition disposed off.

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