TMI Tax Updates - e-Newsletter
February 24, 2018

Case Laws in this Newsletter:

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

TMI SMS

• Scrutiny assessment - notice issued u/s 143(2) shall be deemed to be served even if assessee not available to receive - SC

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Articles

1. How to revise or rectify wrong entries for Exports (for refund) already filed in GST Portal?

   By: Praveen Nair

2. Disqualification of directors-Option availaible to individual directors?

   By: SIGMA LEGAL

News

1. Asian Development Bank (ADB) and the Government of India Sign $ 84 Million Loan for Improvement and Expansion of Water Supply in the State of Bihar

2. MOU between DEA and NBCC for construction of housing for IES officers signed

3. RBI Reference Rate for US $

4. PNB fraud: ED seizes ₹ 94cr assets, luxury cars of Nirav Modi, Choksi

5. Government of India signs a MoU with Canada’s International Development Research Centre (IDRC)

6. Electoral Bearer Bond Scheme 2018

Notifications

GST - States

1. SRO 529 - dated 27-12-2017 - Jammu & Kashmir SGST

Amendment in Jammu and Kashmir Goods and Services Tax Rules, 2017

2. SRO 521 - dated 21-12-2017 - Jammu & Kashmir SGST

Jammu and Kashmir Reimbursement of Central Taxes for promotion of Industries in the State of Jammu and Kashmir

3. SRO 519 - dated 21-12-2017 - Jammu & Kashmir SGST

Jammu and Kashmir Reimbursement of State Taxes for promotion of Industries in the State of Jammu and Kashmir

4. SRO 506 - dated 13-12-2017 - Jammu & Kashmir SGST

Amendments in Jammu and Kashmir Goods and Services Tax Rules, 2017

5. 3511-FIN-CT1-TAX-0043/2017-S.R.O. No. 63/2018 - dated 8-2-2018 - Orissa SGST

Rescindment of F. D. Notification No. 38443-FIN-CT1-TAX-0043-2017 dated 30th December, 2017 bearing SRO No-777 of 2017

6. 3507-FIN-CT1-TAX-0043/2017-S.R.O. No. 62/2018 - dated 8-2-2018 - Orissa SGST

Amendment to Finance Department Notification No. 2242-FIN-CT1-TAX-0043-2017 dated 25.01.2018 bearing SRO No-44 of 2018.

7. 3503-FIN-CT1-TAX-0043/2017-S.R.O. No. 61/2018 - dated 8-2-2018 - Orissa SGST

Rescinded of the F.D. Notification No-24209 dated 17.8.2017 bearing SRO No. 366/2017

8. 2274-FIN-CT1-TAX-0043/2017-S.R.O. No. 52/2018 - dated 25-1-2018 - Orissa SGST

Reduction of late fee in case of delayed filing of Form GSTR-6.

9. 2270-FIN-CT1-TAX-0043/2017-S.R.O. No. 51/2018 - dated 25-1-2018 - Orissa SGST

Supersession of Notification Finance Department Notification No.19305-FIN-CT1-TAX-0022/2017 dated 22.6.2017, bearing S.R.O. No. 287, notifying www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns and computation and settlement of integrated tax and www.ewaybillgst.gov.in as the Common Goods and Services Tax Electronic Portal for furnishing electronic way bill.

10. 2270-FIN-CT1-TAX-0043/2017-S.R.O. No. 51/2018 - dated 25-1-2018 - Orissa SGST

Supersession of Notification Finance Department Notification No.19305-FIN-CT1-TAX-0022/2017 dated 22.6.2017, bearing S.R.O. No. 287, notifying www.gst.gov.in as the Common Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing of returns and computation and settlement of integrated tax and www.ewaybillgst.gov.in as the Common Goods and Services Tax Electronic Portal for furnishing electronic way bill.

11. 2266-FIN-CT1-TAX-0043/2017-S.R.O. No. 50/2018 - dated 25-1-2018 - Orissa SGST

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

12. 2262-FIN-CT1-TAX-0043/2017-S.R.O. No. 49/2018 - dated 25-1-2018 - Orissa SGST

Reduction of late fee in case of delayed filing of Form GSTR-5.

13. 2258-FIN-CT1-TAX-0043/2017-S.R.O. No. 48/2018 - dated 25-1-2018 - Orissa SGST

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

14. 2254-FIN-CT1-TAX-0043/2017-S.R.O. No. 47/2018 - dated 25-1-2018 - Orissa SGST

Amendments in the notification of the Finance Department No.33023-FIN-CT1-TAX-0043/2017/FIN, dated the 14th November, 2017 bearing S.R.O.No 551/2017.

15. 2250-FIN-CT1-TAX-0043/2017-S.R.O. No. 46/2018 - dated 25-1-2018 - Orissa SGST

Exemption of State tax on intra-state supplies of goods from so much tax as specified in Schedule IV of Finance Department notification No.19829-FIN-CT1-TAX-0022-2017 dated 29.6.2017, as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table, on the value that represent margin of the supplier, on supply of such goods.

16. 2246-FIN-CT1-TAX-0043/2017-S.R.O. No. 45/2018 - dated 25-1-2018 - Orissa SGST

Amendment of Finance Department Notification No. 19833-FIN-CT1-TAX-0022/2017, dated the 29th June, 2017, bearing S.R.O. No 296/2017 exempting intra-state supplies of few more goods like De-oiled rice bran and Cotton seed oil cake.

17. 2242-FIN-CT1-TAX-0043/2017- S.R.O. No. 44/2018 - dated 25-1-2018 - Orissa SGST

Amendment in the Notification No. 19829 -FIN-CT1-TAX-0022/2017, dated the 29th June, 2017, S.R.O. No. 295 /2017, fixing the rate of State Tax on intra-state supply of Goods like Tamarind kernel powder and Mehendi paste in cones etc.

18. 2238-FIN-CT1-TAX-0043/2017-S.R.O. No. 43/2018 - dated 25-1-2018 - Orissa SGST

Notification specifying the classes of registered persons who supply development rights to a developer, builder/construction company/any other registered person against consideration, wholly or partly, in the form of construction service of complex, building or civil structure & registered persons who supply construction service of complex, building or civil structure to supplier of development rights against consideration, wholly or partly, in the form of transfer of development rights and the time of onset of liability to pay State Tax.

19. 2234-FIN-CT1-TAX-0043/2017-S.R.O. No. 42/2018 - dated 25-1-2018 - Orissa SGST

Exemption of intra-State supply of services by way of grant of license or lease to explore or mine petroleum crude or natural gas or both, from so much of the State Tax as is leviable on the consideration paid to the Government in the form of Government’s share of profit Petroleum.

20. 2230-FIN-CT1-TAX-0043/2017-S.R.O. No. 41/2018 - dated 25-1-2018 - Orissa SGST

Amendment to Finance Department Notification No.19877-FIN-CT1-TAX-0022/2017 dated the 29th June, 2017, bearing S.R.O. No 307/2017 notifying categories of services on which tax is to be paid on reverse charge basis by the recipient of such Services.

21. 2226-FIN-CT1-TAX-0043/2017-S.R.O. No. 40/2018 - dated 25-1-2018 - Orissa SGST

Amendments in the notification of the Government of Odisha in the Finance Department No.19873-FIN-CT1-TAX-0022-2017, dated the 29th June, 2017.

Income Tax

22. 11/2018 - dated 19-2-2018 - IT

Agreement between the Government of the Republic of India and the Government of the Republic of Kenya for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes

Circulars / Instructions / Orders

DGFT

1. 63/2015-2020 - dated 21-2-2018

Amendments in ANFs 4F & 4G of Handbook of Procedures 2015·20 - reg.

Highlights / Catch Notes

Income Tax

• India and Kenya Agree on Tax Treaty to Prevent Double Taxation and Boost Economic Cooperation.

  Notifications : Agreement between the Government of the Republic of India and the Government of the Republic of of Kenya for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes - Notification
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• Court Upholds Validity of Scrutiny Assessment Notice u/s 143(2) Despite Assessee's Absence for Delivery.

  Case-Laws - SC : Selection of case of scrutiny assessment - validity of notice - Attainment of requirement u/s 143(2) - deemed service of notice - non-availability of the Assessee to receive the notice sent by registered post as many as on two occasions - decided in favor of revenue - SC
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• High Court Rules Cash Loan Violations u/s 269SS Attract Penalties, Regardless of Explanations for Cash Transactions.

  Case-Laws - HC : Penalty u/s 271D - Even if, the Assessee has explained the identity, the source and genuineness of receipt in cash for the purpose of Section 68, would not by itself permit / allow a party to obtain loans in cash in breach of Section 269 SS of the Act. - HC
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• Court Upholds Penalty for Violating Section 269SS; Lack of Education Not a Valid Defense for Cash Handling Violations.

  Case-Laws - HC : Penalty u/s 271D - reasonable cause for violation of Section 269SS - when the Karta is dealing with the large amounts of cash. Lack of formal education cannot by itself be the conclusive of ignorance of the law, particularly in respect of men of business. - HC
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• Assessing Officer to Review TDS Liability on Overseas Bandwidth Services u/s 40(a)(i) for Technical Fee Classification.

  Case-Laws - HC : Addition u/s 40(a)(i) - TDS liability - bandwidth allocation by overseas service provider - fee for technical services - AO directed to examine the materials before him and call for additional expert or technical advice, as is necessary - HC
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• Partners' Excess Remuneration Claim Disallowed; FDR Interest Tied Directly to Business, No Extra Taxable Income Added.

  Case-Laws - AT : Disallowance of excess claim of remuneration to the partners claimed - nature of income - interest on FDR - the interest on the FDR has direct nexus with the business activity of the assessee - no additions - AT
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• Court Rules Against Taxing Advance Payment u/s 33AB(7) of Income Tax Act; Deems Revenue's Action Inappropriate.

  Case-Laws - AT : Applicability of section 33AB(7) - The provisions of section 33AB (7) uses the expression ‘being utilised’ - assessee had paid substantial portion of the proforma invoice value as advance before 31.3.2012 and had included the same in the utilization statement - action of the revenue in bringing to tax the deemed income in terms of section 33AB(7) deserves to be deleted - AT
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Corporate Law

• Section 96: Company Meets AGM Requirement, Tribunal Cannot Question Meeting Conduct.

  Case-Laws - Tri : The only requirement of Section 96 of the Act is holding of AGM of the company each year, which has been complied with. The manner in which the meeting has been conducted cannot be raised as a question before the Tribunal. - Tri
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Service Tax

• Service Tax Refund Claim Denied Due to Time Limit; Authorities Must Follow Legal Provisions in Act.

  Case-Laws - AT : Refund of service tax - rejection on the ground of time limitation - The authority examining the said claim is bound by the legal provisions of these Acts in discharging his duties. - AT
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• Revenue Barred from Issuing Second Show Cause Notice Under IPR Service Due to Prior Notice and Limitation Period Rules.

  Case-Laws - AT : Validity of subsequent SCN - Intellectual Property Right Service - the Revenue having raised their earlier SCN was debarred from raising a subsequent SCN by invoking the larger period of limitation in respect of the said facts and circumstances - AT
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Central Excise

• Manufacturer Liable for Duty Due to Non-Compliance with Actual User Condition for Naphtha Used in Fertilizer Production.

  Case-Laws - HC : Benefit of exemption - actual user condition - the naphtha supplied against competitive bidding was not entirely consumed for the manufacture of fertilizers by the RCF - for such failure, the manufacturer, where the goods were intended to be used is required to pay differential duty. - HC
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• Appellant Wins Refund for Excess Duty Paid Due to Price Variation in Central Excise Case, Citing GPF Clause.

  Case-Laws - AT : Refund claim - price variation clause - appellant entitled to refund of the excess duty paid due the deductions towards non achievement of GPF - AT
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• Court Rules Corrigendum Notifications Lack Power for Retrospective Duty Rate Changes, Unlike Parliamentary Acts.

  Case-Laws - HC : Rate of duty - effective date of correction through corrigendum notification - The question of retrospective effect of such correction cannot be equated with exercise of the power of the Parliament to make a law with retrospective effect. - HC
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• Textile Fabric with PU Foam Classified Under Chapter 59.03 as PVC Leather Cloth or Rexine Cloth per Central Excise Rules.

  Case-Laws - AT : Classification of goods - textile fabric combined with PU foam as textile fabric laminated with polyurethane foam - the product PVC leather cloth also known as rexine cloth has to be correctly classified under Chapter 59.03 - AT
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• CENVAT Credit on Input Services for Leased Premises Allowed for Central Excise Duty Payment.

  Case-Laws - AT : CENVAT credit - input services credit in respect of premises, which is being leased out - the credit availed on payment of service tax can be utilized for discharge of central excise duty. - AT
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VAT

• High Court Rules No Limitation Period for Filing Form 'F' Under CST; Late Submissions Cannot Be Rejected.

  Case-Laws - HC : CST - stock transfer against form 'F' - The revenue has not produced any specific Rule prescribed for limitation for the said purpose and therefore, the separate ‘F’ Forms furnished by the petitioner assessee could not have been rejected on the ground of being filed belatedly. - HC
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• Suppressed Turnover Excluded from Compounding Tax Rate Benefits in Compounding Provisions.

  Case-Laws - HC : In respect of any suppressed turnover, which was not declared as part of the compounding proceedings, the benefit of the rate of tax applicable to compounding provision would not be applicable. - HC
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Case Laws:

• Income Tax

• 2018 (2) TMI 1474
  Selection of case of scrutiny assessment - validity of notice - Attainment of requirement u/s 143(2) - deemed service of notice - High Court [2012 (12) TMI 1148 - ALLAHABAD HIGH COURT] answered the question in the negative taking the view that what is required to be satisfied by the Revenue is service of notice and not mere issuance thereof - Held that:- The non-availability of the respondent – Assessee to receive the notice sent by registered post as many as on two occasions and service of notice on 19th October, 2006 on the authorized representative of the respondent Assessee whom the respondent Assessee now disowns, in our considered view, is sufficient to draw an inference of deemed service of notice on the respondent – Assessee and sufficient compliance of the requirement of Section 143(2) of the Income Tax Act, 1961. We have taken we are of the opinion that the High Court was not right in coming to the impugned conclusion in the facts of the instant matter. We, accordingly, allow this appeal and set aside the order of the High Court.

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• 2018 (2) TMI 1473
  Reopening of assessment - eligibility to deduction u/s 10B - eligibility of reasons to believe - change of opinion - Held that:- The assessment in question was framed without scrutiny when the assessee's return was accepted under section 143(1). AO had objections to the assessee's claim of deduction under section 10A of the Act. Similar claims made by the assessee for the assessment years 2009-2010 and 2011-2012 were not accepted by the Assessing Officer. CIT(Appeals) in both cases did allow the assessee's appeal upon which the Revenue had filed the appeals before the Tribunal and such appeals were pending when the Assessing Officer recorded the reasons and issued the impugned notice for reopening. As held by the Supreme Court in case of Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers P. Ltd. reported in (2007 (5) TMI 197 - SUPREME Court), in case where the original assessment is not framed after scrutiny, Assessing Officer cannot be stated to have formed any opinion and therefore, the concept of change of opinion would not apply. It is undisputedly true that despite such wider latitude available to the Assessing Officer to reopen the assessment, the requirement that he had reason to believe that income chargeable to tax had escaped assessment must still be fulfilled. In this context, Revenue's stand is that assessee's claim for deduction under section 10A is not eligible. That is how the Assessing Officer had framed the assessments for the assessment years 2009-2010 and 2011-2012 that is immediately preceding and succeeding the assessment years. When the Tribunal has allowed such claim of the assessee, Revenue is in appeal before the High Court. For the present year, under such circumstances, the reopening would have to be allowed. Mere ground that the Assessing Officer made a wrong reference to the issue before the High Court instead of Tribunal, would not shake the very foundation of the reasons recorded by the Assessing Officer. It was obviously and apparently an inadvertent error in referring to the forum before which such issue is pending. - Decided against assessee.

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• 2018 (2) TMI 1472
  Deemed dividend u/s 2(22)(e) - Held that:- The Tribunal has taken a view rightly that a deemed dividend could only have been assessed in the hands of a person who is shareholder of the lender company and not in the hands of the borrowing concern in which such shareholder is a member or partner having substantial interest. Admittedly, in the present case the assessee-company was not a shareholder of the lender company. But, in this case both the lender and the borrower have common shareholders. See CIT v. Ankitech (P) Ltd [2008 (6) TMI 611 - ITAT DELHI] - Decided in favour of assessee.

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• 2018 (2) TMI 1471
  Reopening of assessment - reasons to believe - Held that:- AO in the reasons recorded, proceeded on the erroneous footing that the assessee had not filed return at all. The first premise for issuing the notice was thus factually incorrect. It is now not disputed by the Revenue that the assessee did file return of income for the year under consideration which was duly acknowledged by the Department. The entire reasoning thus proceeded on the wrong premise that the assessee had never filed the return. This itself would be sufficient to annul the notice of reopening the assessment. The assessee had from the outset been contending that the assessee’s accounts are duly audited and such audited accounts are presented alongwith the return. This has been so asserted in the objections before the Assessing Officer as well as in the petition before us. Both times, the response of AO in the order disposing of the objections and the affidavit-in-reply filed in this petition is that the assessee’s cash deposits can only be verified through assessment proceedings. AO does not even contended that the said cash deposits were not duly reflected in the return filed, but that he wishes to verify the validity of such deposits and the assessee’s claim of exemption, being a Trust. Re-assessment, even in a case where the return was not scrutinized before acceptance originally, cannot be resorted to unless AO had a reason to believe that the income chargeable to tax has escaped assessment. For mere verification or for a fishing inquiry, reopening of the assessment is not permissible. - Decided in favour of assessee.

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• 2018 (2) TMI 1470
  Stay on demand - Held that:- Though normally this Court will not interfere in writ jurisdiction against said interlocutory orders passed by the Appellate Authority, which is seized of the appeal before it, but in view of the peculiar facts and circumstances of the case and looking to the fact that the appeal itself is coming up for final hearing after its pre-ponement of date on 09.04.2018 itself, and on which date it is expected that the learned Tribunal will take up the said appeal for final hearing and decide the said appeal, it is considered just and proper in the facts and circumstances, for the limited period, to direct the petitioner-assessee to further deposit a sum of 10 Crores against the impugned demand within a period of two weeks with the respondent-Income Tax Department and further to undertake before the Tribunal that they will not seek any adjournment of hearing of the said appeal on the date fixed by the Tribunal on 09.04.2018.

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• 2018 (2) TMI 1469
  Issue of taxability of the sale tax exemption benefit availed by assessee - Held that:- At this stage of our dictation, Mr. Chhotaray interjected to mention that it should be Assessing Officer / Inspector and not Assessing Officer alone. This is contrary to what was stated to us during the hearing. In fact, we were categorically told by Mr. Chhotaray that he has met the Assessing Officer twice and he was informed by him that no order has been passed. Mr. Chhotaray, now states that he was receiving instructions both from Assessing Officer as well as Inspector. In any case, the Assessing Officer who has instructed Mr. Chhotaray has to ensure that the facts are correctly briefed to the Counsel for the Revenue appearing before this Court. The least that is expected of a State is fairness. Facts are sacred. We are unable to understand why the incorrect instructions are given to the Counsel, which in turn leads taking up time, which is otherwise scarce considering the quantum of pending income tax appeals. Moreover, the absence of the Assessing Officer being fully updated with all facts may lead to waste of time and effort on all sides. This for the reason that in case, we hold in favour of the Revenue on the present question no.(iii) in this appeal, then, the entire exercise done consequent to the impugned order of the Tribunal i.e. passing of an order dated 29th July, 2015 of the Assessing Officer and further orders in appeal therefrom would all be rendered infructuous. This as the basis / foundation of the order dated 29th July 2015 and subsequent orders in appeal will be set aside. Besides, being most unfair to the respondent assessee. We direct the Assessing Officer to file an affidavit pointing out the circumstances which led to his giving incorrect fact to the Counsel for the Revenue leading to unnecessary waste of time and effort. We adjourn the hearing of this appeal to 26th February, 2018 to enable the filing of the affidavit.

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• 2018 (2) TMI 1468
  Claim for written back of excess provision for bad and doubtful debts - Held that:- If an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability and the same is written back in the books of accounts, the said written back expenditure, loss or trading liability shall be eligible to levy of tax as income. The burden lies on the Revenue to prove that the provision for bad and doubtful debts written back was allowed as expenditure reducing profit in the profits and loss account for the previous year. It is the case of the assessee that as per RBI guidelines for provisioning of bad and doubtful debts, in terms of Section 36(1)(viia), provision was made. The same being excess, was written back in the books of accounts. Recovery if any from such written of accounts is being offered to tax on yearly basis under the head “Miscellaneous income” by the bank. The appellate authority as well as the Tribunal placing reliance on the decision of the ITAT, Delhi Bench in the case of Bank of Tokyo Vs. JCIT (2009 (7) TMI 178 - ITAT DELHI-B) and considering the fact that the Revenue has not established that the excess provision written back in the profit and loss account was allowed as deduction in the previous years has given a finding against the Revenue. We do not find any infirmity or irregularity in such finding - Decided in favour of assessee.

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• 2018 (2) TMI 1467
  Penalty u/s 271D - reasonable cause for violation of Section 269SS - Tribunal partly allowed the Appeal by restoring the issue of amounts received in cash from agriculturists to the Assessing Officer to verify whether the agriculturists were not having banking facilities so as to delete the penalty under Section 271 D - Held that:- The law provides that the breach of Section 269 SS invites penalty under Section 271 D. The aforesaid breach has no relation to addition and / or deletion of income. The mere fact that a party accepts loans in cash (which are otherwise explainable) would not absolve a party from penalty under Section 271 D of the Act in the absence of reasonable cause. The fact that the Applicant's Appeal in quantum proceedings before CIT(A) deleted addition under Section 68 would have no bearing in respect of penalty imposed under Section 271D of the Act, for breach of Section 269SS of the Act. Even if, the Assessee has explained the identity, the source and genuineness of receipt in cash for the purpose of Section 68 of the Act, would not by itself permit / allow a party to obtain loans in cash in breach of Section 269 SS of the Act. So far as the next submission that reasonable cause made out by the Applicant, was that the Karta of the HUF being educated only upto 4th standard and was ignorant of the provisions of Section 269 SS of the Act. The Tribunal has dealt with the issue of reasonable cause and wherever it found that the reasonable cause has been made out, it restored the issue to the Assessing Officer for the purposes of verification of the facts stated by the Applicant in support thereof. In any case, the education of the Karta of the HUF is upto 4th standard, cannot by itself lead to presumption that he is ignorant of law. This is more particularly when the Karta is dealing with the large amounts of cash. Lack of formal education cannot by itself be the conclusive of ignorance of the law, particularly in respect of men of business. This of course, is without prejudice to the legal maxim that ignorance of law is no excuse. As under Section 260 A (7) the provisions of Code of Civil Procedure are made applicable to the appeals filed under the Act. Therefore, this would necessarily require application of O.41 R.1 and R.5 of the Code of Civil Procedure. The determination of the tax payable by the Assessee is in the nature of money decree and the same should be paid over to the successful party. In case, the applicant finally succeed in the appeal it would get the amounts paid in excess along with interest. However, there is no reason in the present facts to deny the successful party from the fruits of the decision of the Tribunal.

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• 2018 (2) TMI 1466
  Penalty u/s 271(1)(c) - Reopening of assessment - reason recorded for reopening of the assessment was the claim for donation under Section 35(1) - Held that:- Held that:- It is undisputed that when filing of return of income on 12 February 2008, consequent to reopening notice, the Respondent had not made a claim deduction of 1.00 Crore for donation, inspite of donation made to M/s. Indian Medical Scientific Research Foundation, Agra. The said Research Foundation was not known to be a bogus institution both at the time the donation and claim was made in the return of income filed in regular assessment proceedings under Section 143(3) of the Act. The foundation carried out its activities under a notification issued by the Central Government which entitled donations made to it, the benefit of Section 35(1) of the Act. We further find that during the course of regular proceedings itself the Respondent-Assessee brought it to the notice of Assessing Officer that there is a C.B.I. enquiry proceedings against the M/s. Indian Medical Scientific Research Foundation, Agra and offered to withdraw the claim for donation. Thus, there was a complete disclosure on the part of the Respondent-Assessee. In fact, on appreciation of facts, both the CIT(A) and the Tribunal have held that the Respondent was misled into believing that M/s. Indian Medical Scientific Research Foundation, Agra was a genuine institution - view taken by both the CIT(A) and the Tribunal is a possible view - No substantial question of law.

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• 2018 (2) TMI 1465
  Adjustment of refund against next assessment year - Held that:- According to the counsel for the petitioner thus, after the adjustment for the refund of the earlier year, the deposit towards disputed tax liability for the current year would exceed 20%. Counsel for the Revenue do not dispute this factual assertion of the petitioner. In view of these developments, no further relief would be needed to enable the petitioner to enjoy the stay pending appeal for the current assessment year since the insistence of the Principal Commissioner vide his impugned communication dated 19.07.2017 in any case, stands fulfilled.

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• 2018 (2) TMI 1464
  Addition u/s 68 - genuineness of the transaction and the creditworthiness of the parties - reassessment proceedings - Held that:- The material on record in the form of the orders of the lower appellate authorities disclosed that both the assessee and later the share applicants (upon receiving notice under Section 131 of the Act) had produced documentary proof. These included the assessments and income-tax returns filed by the share applicants as well as confirmation and acknowledgment documents. If the AO wished to pursue the matter, there were sufficient clues for him to have proceeded – for instance, it could have issued notices and obtained statements from the bankers of the share applicants or even the balance sheets which existed in the income-tax records of their Assessing Officers. He did not choose to pursue both but instead rested his conclusions entirely on the basis of remarks received from the Commissioner. These remarks can at best be considered opinion but not primary evidence to displace the inferences that had to be drawn with respect to the genuineness of the transaction and the creditworthiness of the parties. - Decided in favour of assessee.

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• 2018 (2) TMI 1463
  Addition 41(1) - remission of liability - sum towards waiver of sales tax - Held that:- The facts in this case are identical with that of the Sales Tax Deferral Scheme of the State of West Bengal in which the State had identically permitted the collection of sales tax but deferred the payment by 12 years. The assessee, like in the case of Sulzer India Limited (2014 (12) TMI 267 - BOMBAY HIGH COURT), approached for a pre-deposit, which was permitted. In the circumstances, it was held that Section 41(1) of the Act does not apply. Deduction u/s 10A - exclusion of telecommunication charges from export turnover - Held that:- Explanation 2(iv) to Section 10A of the Act is concerned, this issue is covered by the decision in the case of Commissioner of Income Tax vs. Genpact India, [2011 (11) TMI 119 - DELHI HIGH COURT). In that case, the Court turned down the submission of the Revenue that the telecommunication charges are to be excluded in the concept of export turnover. For the same reasons in this case too, the Court is of the opinion that the decision of the ITAT does not call for interference

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• 2018 (2) TMI 1462
  Additions made by the assessing authority on account of accrued interest on loans which are classified as “Non-performing Assets” - applicability of provisions of section 43D - Held that:- When an asset becomes non-performing, it ceases to yield income and once a particular asset is shown to be a non– performing asset, then it is nothing but no revenue is yielded. See Commissioner of Income-Tax and another Vs. Canfin Homes Limited (2011 (8) TMI 178 - KARNATAKA HIGH COURT). In such cases, paying tax would not arise. Hence, we answer the substantial question of law against the revenue.

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• 2018 (2) TMI 1461
  Addition u/s 40(a)(i) - TDS liability - bandwidth allocation by overseas service provider - fee for technical services - whether the charges paid by the assessee to the MCI WorldCom Asia P. Limited (a non-resident overseas Singapore based entity) ought to have been subjected to tax deduction? - income by way of amounts paid to the overseas entities or non-residents - Held that:- In the present case the relevant provisions of the master service agreement have been extracted by the CIT(A). The relevant conditions state that “service” would mean “the specific telecommunication service rendered by WorldCom outside India to the customer and as identified in the relevant Service Order” The agreement also places certain restrictions upon the re-sale of the services to the third parties which are provided by the MCI Worldcom Asia P. Limited. If these contractual conditions are taken into account, it is quite apparent that the nature of services in issue is not merely internal bandwidth connectivity but whole range of other services. The payments for these services are determined by relevant “service orders”, which are agreed to and refused from time to time. In the present case, clearly the Revenue did not examine as to whether the services or any of them fulfil the character of “fee” so as to result in taxability of the payment in India, in terms of Section 9(1)(vii) of the Act. Thus the impugned order cannot be sustained. It is hereby set aside. The matter is remitted to the Assessing Officer, who shall proceed to examine the materials before him and call for additional expert or technical advice, as is necessary, having regard to the declaration of law in the case of Bharti Cellular Ltd. (2008 (10) TMI 321 - DELHI HIGH COURT).

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• 2018 (2) TMI 1460
  Suppression of sales - differential price between the price of two flats sold to the sister concern and the price offered by third parties - Appellate Commissioner and Tribunal concurred in their factual finding that there had been no suppression of sales as the two flats were sold at a discount price, for business exigencies and in particular, to compensate SAPL, who had advanced interest free loan to the assessee - Held that:- It is clear from the language of Section 260A of the IT Act an appeal under the aforesaid section shall lie to the High Court from every order passed in appeal by the Appellate Tribunal only if the High Court is satisfied that the case involves a substantial question of law. In this case, the Appellate Commissioner and the learned Tribunal have arrived at the concurrent factual finding that there was no suppression of sales. There is no question of law, not to speak of substantial question of law. As held by the Supreme Court in Vijay Kumar Talwar v. Commissioner of Income Tax, Delhi [2010 (12) TMI 2 - Supreme Court of India] the general rule is that the High Court does not interfere with concurrent findings of Courts below. - Decided in favour of assessee.

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• 2018 (2) TMI 1459
  Disallowance of excess claim of remuneration to the partners claimed - nature of income - interest on FDR - Held that:- There is not dispute that the business of the assessee dealing in food grains, oil seeds and pulses etc is a seasonal business depending upon crop seasons. Therefore, during the non harvesting season the assessee is not having much business activity and accordingly the funds which are otherwise required for the business activity has to be kept in the bank. Further, it is also not disputed by the AO that some of the FDRs were taken by the assessee to avail overdraft facility from the Bank for the purpose of business activity during the pick season of crops. Thus, the funds which could not be utilized during the slack season and therefore was not immediately needed were kept in bank deposits including FDR - the interest on the FDR has direct nexus with the business activity of the assessee. As relying on case of CIT vs. Lok Holding [2008 (1) TMI 365 - BOMBAY HIGH COURT] CIT-A as not erred deleting the disallowance - Decided against revenue

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• 2018 (2) TMI 1458
  Disallowance u/s 43B - payment of employees contribution to Provident Fund and ESIC - Held that:- The issue in appeal is squarely covered by the decision of the Hon'ble Jurisdictional High Court Ghatge Patil Transport Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] wherein held both employees' and employer's contributions are covered under the amendment to Section 43B of I.T. Act - the Tribunal was right in holding that payments are subject to benefits of Section 43B – Decided against revenue. Allowing set off of brought forward depreciation for A.Y. 2001-02 beyond eight assessment years - Held that:- On perusal of the order of the Coordinate Bench in assessee’s own case we find that similar issue had come up before the Tribunal in A.Y. 2009-10 and the Coordinate Bench has decided this issue in favour of the assessee allowed setting off of depreciation. – Decided against revenue.

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• 2018 (2) TMI 1457
  Disallowance u/s 40(a)(ia) - payments to transport contractors without fulfilling the conditions laid down in sections 194(6) and 194(7) - assessee did not furnish in the prescribed format the details of those contractors where no TDS was made to the prescribed authority - Held that:- We find that the assessee made payments to transport contractors amounting to 80,23,971/- whereas the assessee has provided the details and PAN only in respect of nine transporters to the tune of 67,24,412/- during the course of assessment proceedings. As per provisions of Section 194C(6) if the transport contractors furnish the details in respect of their PAN to the person paying or crediting to such contractors TDS need not be deducted. In the case in hand we can see from the assessment order that the assessee has provided details of PAN only in respect of nine contractors amounting to 67,24,412/- and no details have been furnished in respect of balance amount of 12,99,559/-. Even if we say that the assessee has complied with provisions of Section 194C(6) it is only to the extent of 67,24,412/-. Therefore, since the assessee has not furnished the details of PAN in respect of other contractors, the assessee has not complied with the provisions of Section 194C(6) at least to the tune of 12,99,559/-. Therefore, in our view the said amount is liable to be disallowed under Section 40(a)(ia) of the Act as the assessee did not furnish PAN details to the AO and the assessee was under the obligation to deduct TDS on this amount. - Decided partly in favour of revenue

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• 2018 (2) TMI 1456
  Applicability of section 33AB(7) against the assessee - deemed income of the assessee - utilizing the withdrawals from NABARD deposit accounts 0 assessee’s main business activity is cultivation of tea, manufacturing of tea from leaves procured from own garden as well as from bought leaves and also trading of tea - Held that:- A provision for deduction, exemption or relief should be construed reasonably and in favour of the assessee. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. It is only elementary that a statutory provision is to be interpreted ut res magis valeat quam pereat, i.e to make it workable rather than redundant. Applying this legal maxim, it would be just and fair to hold that the assessee, having utilized the amounts withdrawn from NABARD deposit for its intended purposes within the time specified under the respective scheme, should not be fastened with tax liability on deemed income basis, merely because it had not utilized the entire amounts withdrawn before 31.3.2012 (i.e within that previous year). In case if the assessee is taxed on deemed income basis in this year for non-utilisation of withdrawals within that previous year, then the assessee would never get any deduction in subsequent years also for this utilization. This would in effect result in withdrawal of deduction in part earlier granted to the assessee at the time of making deposit with NABARD. The provisions of section 33AB (7) of the Act uses the expression ‘being utilised’. It is not in dispute that the assessee had placed orders for acquisition of various machineries that are required for setting up of new units to be engaged in growing and manufacturing of tea i.e acquisition for machineries for specified purposes. It is not in dispute that the assessee had paid substantial portion of the proforma invoice value as advance before 31.3.2012 and had included the same in the utilization statement before 31.3.2012 which clearly indicates its intention of utilizing the withdrawals from NABARD deposit accounts. Hence the spirit of the section had been satisfied by the assessee. In view of the reliance placed on the CBDT Circular No. 495 dated 22.9.87 explaining the scope and effect of section 32AB(6) of the Act which is pari materia with section 33AB(7) of the Act and in view of the judicial precedents relied upon hereinabove for interpretation of statutes, we hold that the action of the revenue in bringing to tax the deemed income in terms of section 33AB(7) of the Act deserves to be deleted. - Decided in favour of assessee.

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• Customs

• 2018 (2) TMI 1454
  Classification of imported goods - 0.1% Natural Brassinolide fertilizer - appellant claimed classification of the said goods under Heading 31010099 as “other animal or vegetable fertilizer whether or not mixed together or chemically treated; fertilizer produced by the mixing or chemical treatment or animal or vegetable products” - Revenue objected to the said classification and sought classification of the product under Heading 38089340 as “plant growth regulators”. Held that: - there is only a fine distinction between ‘fertilizer’ and a ‘plant growth regulator’. While fertilizer is generally for promoting the growth of plant or crop for desired increased harvest, the plant growth regulators work on specific areas resulting in modified growth or even retardation of certain growth - n the absence of chemical test in the present imports the classification has necessarily to be done based on documents recovered, literature filed by the appellant. When specifically asked about availability of current imports or samples from past imports, no such samples were available and no imports currently. In such situation the classification has to be done with available literature and import documents only. The matter has to go back to the Original Authority to re-decide the issue - applicability of chapter note and also the instructions issued by the Board alongwith that of competent authorities of Central Insecticides Board & Registration Committee, Insecticides Act etc. are to be examined by the Original Authority - appeal allowed by way of remand.

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• Corporate Laws

• 2018 (2) TMI 1452
  Comply with the arbitration award - Violation of the provisions of the Companies Act, 2013 - whether the Company can convert a loan into equity shares if at the time of raising the money, the company had not passed special resolution? - removal of the Petitioners as Directors - Held that:- The arguments of the learned counsel for the Appellants is that this Section could not have been applied and if at all Section 81 of the Old Act would be relevant, as according to him, when the loans were raised, at that time the New Act was not in force. We find that there is no substance in this argument. When the New Act is in force and conversion of loan has to be done, the conversion would be permissible only as per the new provisions. In view of sub-Section (3) of Section 62 when the question of issue of further share capital is taken up, conversion of loan into share capital would be permissible provided there was special resolution passed by the company in General Meeting which granted option as a term attached to the loan raised by the Company permitting conversion of such loan into shares of the company. It cannot be that moment a document is executed, the party goes and takes over the Companies and starts doing whatever he likes without following any procedure for transfer of shares, administration etc. Till the Petitioners resigned as Directors or were removed under established procedure under the Companies Act, or in execution, it will not be permissible not to send any notices to them and declare that they have not attended meetings and they discontinued to be Directors under Section 167 of the New Act. The Appellants themselves in the NCLT relied on Section 167 to claim that the Original Petitioners were not Directors. As such, they were bound to show that duly notified and called meetings were not attended to so as to attract Section 167 of the New Act. Original Petitioners have filed an Execution Petition before the High Court of Calcutta to give effect to the award. Even the Appellant No. 1 has filed application under Section 17 of the Arbitration Act as has been referred above. It would be more appropriate for the parties to cooperate with each other and comply with the Arbitration Award as has been passed between the signatory parties and do the necessary legal compliances as per the Arbitration Award for implementation/execution of the same. If it is done mutually, execution would not be necessary, otherwise the aggrieved parties would naturally have the option of the execution of the award. Till that time, it is necessary for the parties not to commit such acts as would attract violation of the provisions of the Companies Act, 2013. For such reasons, we are unable to interfere with the impugned order. We decline to interfere with the impugned order. The appeal is disposed of accordingly. We, however, make it clear that the Appellant No. 1 and Respondents are free to either mutually comply with the Arbitral Award or take steps permissible, under provisions of the Companies Act, 2013 or resort to Execution under the Arbitration and Conciliation Act, 1996.

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• 2018 (2) TMI 1451
  Manner of holding of 44th Annual General Meeting of the shareholders of the company - non compiling with the provisions of the Companies (Management and Administration) Rules, 2014 - oppression or mis-management - Held that:- Filing of the instant petition is simply an abuse of the process of the Court and to harass the company and its management. Except the name of respondent No.5 Mr.Sudhir Avasthi, there is not even remote reference to the role of respondents No.2 to 4 and in what capacity, they have been impleaded. Name of respondent No.2 as a Director of the company appears in the Report Annexure P-4 sent to BSE. In order to support the contention that the company has not complied with the provisions of the Companies (Management and Administration) Rules, 2014, the petitioner has not appended with this report, copy of Form No.MGT-15, prescribed in the aforesaid Rules, which the company is required to file with the Registrar of Companies. In the absence of filing of such form, it is not possible to accept the contention raised by the petitioner. In any case, if there is any violation, the remedy is not to file a petition before the Tribunal, but before the appropriate authority for violation, if any, of the provisions of the Companies Act, 2013 and the rules framed thereunder. The only requirement of Section 96 of the Act is holding of AGM of the company each year, which has been complied with. The manner in which the meeting has been conducted cannot be raised as a question before the Tribunal. It is simply alleged in the petition that the petitioner was present through his representative and certain other shareholders present also raised objection, but the name of any such person, has not been mentioned. The petitioner has not disclosed the name of his representative present in meeting nor any affidavit of the said representative to support this allegation. The petitioner has also stated that shareholders were threatened by the management at the time of voting, but it is not the case of the petitioner that any complaint with the concerned police station was lodged to support this assertion. Non-compliance of certain provisions, the same may amount to an offence or an act of oppression or mis-management for which the requisite percentage of the shareholders is necessary to maintain a petition under Section 241 of the Act. Section 244 of the Act deals with the right of the members to file a petition on the ground of oppression and mis-management. The instant petition is, therefore, dismissed at the preliminary stage with exemplary costs of 50,000/-

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• Service Tax

• 2018 (2) TMI 1449
  Refund of unutilized CENVAT credit - input services - N/N. 17/2009- ST dated 07.07.2009 (as superseded by N/N. 52/2011-ST dated 30.12.2011) - Whether the CESTAT was right in not considering all the grounds of appeal raised before the appeal filed before it and passing order without considering them? Held that: - We do not think how a factual conspectus, based on which the remand was directed, can be taken as a precedent for the purpose of the present case. Even otherwise, all the judgments and particularly rendered by the Hon'ble Supreme Court have been duly noted and considered by this court. The tribunal's order is not vitiated by any error of law - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1448
  Applicability of decision in the case Suresh Kumar Bansal and Others [2016 (6) TMI 192 - DELHI HIGH COURT] - claim of Revenue is that impugned order is not legal and proper, inasmuch as the said judgment was not “in rem”, rather it was “in-personnem” - Construction services - Held that: - the ld. Commissioner (Appeals) has taken the correct stand in deciding the appeals of the appellants - From the operative part of the impugned order, it transpires that there was no need for the Revenue to file any appeal against the impugned order, for the reason that the appeals of the appellant in context with the refund application were rejected by the ld. Commissioner (Appeals), especially in view of admittance of appeal by the Hon’ble Supreme Court - appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1447
  Refund of service tax - rejection on the ground of time limitation - Section 11 B of the Central Excise Act, 1944 - Held that: - The statutory provisions contained in Section 11 B ibid provides the time limit of one year for filing the refund application - In this case, as per the explanation (B) (f) appended to Section 11 B, the relevant date should be reckoned from the date of payment of the Service Tax. Since, the refund application was filed by the appellant beyond one year from such relevant date, as per the mandates of Section 11 B, the refund application is clearly barred by limitation of time - The Hon’ble Supreme Court in the case of Doaba Co-operative Sugar Mills [1988 (8) TMI 103 - SUPREME COURT OF INDIA], held that if proceedings have been taken under the statue by the Department, the provision of limitation, prescribed under that statute will alone prevail with regard to applicability of the time limit for filing the refund claim. The amount, now claimed as refund, has been deposited to Government account as service tax. Return of such amount is prayed for with the service tax Department under the provisions of Finance Act, 1994 read with Section 11 B of Central Excise Act, 1944. The authority examining the said claim is bound by the legal provisions of these Acts in discharging his duties. Appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1446
  Refund of service tax paid - input services - gardening services - Held that: - in the permission granted by the Pollution control Board to appellant, there is no clause which requires the appellant to maintain a green belt of approximately 33% of the area for which they have sought permission for construction of Research and Development facility - refund allowed. Fencing of the land leased out by the appellant - Held that: - the lower authorities were correct in coming to a conclusion that these services which were rendered by the service providers could not be correlated with the export of services of the appellant - Before the Tribunal also they are unable to correlate the said services rendered with export services from the appellant's premises - refund cannot be allowed. Appeal allowed in part.

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• 2018 (2) TMI 1445
  Validity of subsequent SCN - Intellectual Property Right Service - it was the contention of appellant that the Revenue having raised their earlier SCN was debarred from raising a subsequent SCN by invoking the larger period of limitation in respect of the said facts and circumstances - Held that: - There is no dispute about the fact that in respect of the same set of proceedings, an earlier SCN was issued under a different category of services. However, subsequently, with the introduction of Intellectual Property Service, being a taxable service, fresh proceedings were initiated by invoking the larger period of limitation. The Hon’ble Supreme Court in the case of Nizam Sugar Factory Vs. Collector of Central Excise, A.P. [2006 (4) TMI 127 - SUPREME COURT OF INDIA] has categorically held that when the first show cause notice is issued, all the facts come to the knowledge of the Revenue, in which circumstances, subsequent show cause notices cannot be issued alleging suppression of facts on the part of the assessee. The demand is barred by limitation - appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1444
  GTA service - Benefit of N/N. 32/2004-ST, dated 03.12.2004 - appellant were discharging service tax liability on 25% of the total freight charges paid by them - Department took the view that notification exemption is not available to appellant as there was no evidence to show that the conditions of the notification were fulfilled - Held that: - circular No.137/154/2008-CDA, dated 21.08.2008, clarifies 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 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 cannot sustain. Reliance placed in the case of CCE, Allahabad Versus M/s. Sangam Structurals Ltd. [2015 (3) TMI 523 - CESTAT NEW DELHI], where it was held that conditions prescribed by the CBEC circular dated 27.7.2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1443
  GTA service - Benefit of N/N. 32/2004-ST, dated 03.12.2004 - appellant were discharging service tax liability on 25% of the total freight charges paid by them - Department took the view that notification exemption is not available to appellant as there was no evidence to show that the conditions of the notification were fulfilled - Held that: - circular No.137/154/2008-CDA, dated 21.08.2008, clarifies 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 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 cannot sustain. Reliance placed in the case of CCE, Allahabad Versus M/s. Sangam Structurals Ltd. [2015 (3) TMI 523 - CESTAT NEW DELHI], where it was held that conditions prescribed by the CBEC circular dated 27.7.2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2018 (2) TMI 1455
  Benefit of exemption - actual user condition - Whether benefit of N/N. 6/2002-CE as amended or N/N. 6/2006-CE read with N/N. 21/2002-Cus dated 1st March, 2002 which was available to “naphtha” used in the manufacture of “fertilizer”, is available to the respondent for that quantity of “naphtha” which was manufactured and cleared by it to M/s. Rashtriya Chemicals and Fertilizers Ltd availing the benefits under the said notifications, but admittedly, not used by RCF in the manufacture of “fertilizers”? Whether the CESTAT was correct in holding that Central Excise Duty can be demanded from a person other than manufacturer of the excisable goods in a situation where the goods are locally procured under N/N. 6/2002-CE or 6/2006-CE, the liability to pay the duty would be that of the user manufacturer who in the present case is RCF? Held that: - It is common ground that the naptha was supplied by the respondent-assessee by resort to the international competitive bidding process. The naptha brought for this supply was claimed to be exempted by the assessee. The tribunal noted that naphtha is exempt from payment of excise duty if supplied against international competitive bidding and used in the manufacture of fertilizers - The tribunal came to the conclusion that the notifications read together would reveal that in the present case, the naphtha supplied against competitive bidding was not entirely consumed for the manufacture of fertilizers by the RCF. In the present case, for such failure, the manufacturer, where the goods were intended to be used is required to pay differential duty. If the user and manufacturer are one and the same, there is no difficulty. The tribunal gave an illustration, as can be found completely consistent with the case at hand. If the importer of the goods is 'A' but the goods are to be used in the factory of 'B', then, in such situation also, though the goods may be imported by 'A' but the liability to pay the differential duty in the event of failure to use the goods is on 'B'. The question is not of local procurement and the tribunal found, therefore, that M/s. HPCL, at the time of clearance, has satisfied both the pre-conditions, namely, the goods were supplied against international competitive bidding and for the manufacture of fertilizers. The actual use of the goods is post clearance condition and which is required to be fulfilled by the buyer/user, which is the RCF. Hence, the assessee cannot be expected to ensure the precise use of the goods by M/s. RCF. Appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1453
  Refund claim - price variation clause - Since the discharge of Central Excise Duty is based on the price variation clause the appellant sought permission for provisional assessment for payment of Central Excise Duty Said provision assessments were finalized and refund arose - rejection of refund on the ground of unjust enrichment - Held that: - there is no dispute as to the facts the first appellate authorities order in all these appeals in Order-ln-Appeal 30/06/2008 held in favour of appellant on merits has not been challenged by the revenue before higher Judical fora. Hence, on merits in all these appeals appellant entitled to refund of the excess duty paid due the deductions towards non achievement of GPF and we hold so. The ratio of the decision of the Hon'ble High Court Gujarat-Accra Pac (I) Pvt Ltd [2013 (2) TMI 795 - GUJARAT HIGH COURT] would apply, wherein it was held that once an Issue is decided and against which no further proceedings are carried then such decision IS bending of all parties. Unjust enrichment - Held that: - Singareni Collieries Company Ltd (SCCL) is a Government of India undertaking - from the certificate submitted to lower authorities it is indicated that appellant had not passed on the incident of Central Excise Duty to the recipient of the goods hence it has to be held that the appellant has passed hurdle of unjust enrichment in the cases in hand and should given the refund of amount paid excess. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1442
  Rate of duty - effective date of correction through corrigendum notification - Corrigenda issued by the Government of India dated 15th January 1997 and 21st September 2000 - original amendments were made through Budget in September 1996 by the Parliament, which eventually became the Finance Act of 1996. Held that: - We do not have for a moment any doubt that all along what was presented before the Parliament, after the amendment in the Finance Bill and what was accepted by the Parliament was the prescription of basic rate of duty at 12% for unprocessed as well as processed fabric. The affidavits filed by the responsible officers of the Union of India need not be doubted. We have therefore no reason to believe that the budgetary proposals did not carry such amendment or that the Parliament did not accept such proposals; as is stated before us - Inevitable conclusion therefore one would reach is that the Finance Act, 1996 revised the rate of basic duty for unprocessed and processed fabric @ 12% ad valorem. Correspondingly, the structure of additional Nil rate of duty for unprocessed fabric was maintained and additional duty @ 8% for the processed fabric was prescribed. The contention that corrigendum dated 21st September 2000 must relate back to the original publication of rate of duty and that in any case the Parliament has power to make law with retrospective effect cannot be accepted. Firstly, the corrigendum is in the nature of a publication required since the original publication carried a wrong figure. The corrigendum is not a piece of legislation. The question of retrospective effect of such correction cannot be equated with exercise of the power of the Parliament to make a law with retrospective effect. In case of Union of India v. Ganesh Das Bhojraj [2000 (2) TMI 89 - SUPREME Court], it was observed that the exemption notification would take effect as soon as it is published in the Government Gazette. Publication in the Government Gazette is recognized as an established practice of bringing a rule or subordinate legislation to the notice of the persons concerned. It was observed that thereafter individual notices to members of public would not be necessary and the interested persons can acquaint himself with the contents of the notification published in the Gazette. Petition allowed.

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• 2018 (2) TMI 1441
  Whether Hon'ble Tribunal i.e. Respondent no.2 has erred by not appreciating legal position that in case of unreported compliance of stay order before Hon'ble Tribunal appeal merits restoration of appeal? Held that: - we are unable to understand the approach of the Tribunal. Eventually, Tribunals are set up to render substantial justice and not to defeat just and bonafide claims by hyper technical approach. Somehow or the other, we find that a file clearance drive which the Revenue adopts on its administrative side has taken over the Tribunal members. The Tribunals are discharging quasi judicial functions. In fact, it is more a judicial power and when it has to adjudicate the Appeals on merits and in accordance with law, it is suppose to give parties an opportunity to argue their cases on merits particularly once the Tribunal is satisfied that the parties i.e. the assessee has acted bonafide. There is no gross negligence and utter callousness in this case. True, it is that there was a lapse and which was of reporting compliance to the Tribunal. The Tribunal should have noted that not only the lapse is cured, but the amounts are deposited after the warrant of attachment was levied. Thus, even recovery by coercive means once resorted, resulted in substantial part of the revenue being secured. After this, there was no occasion for the Tribunal to adopt an approach which defeats justice. Appeal allowed - decided in favor of appellant.

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• 2018 (2) TMI 1440
  SSI Exemption - crossing of threshold limit - suppression of value - Department has received the information that the assessee-Appellants have already exhausted the SSI limit of 1 crore, but are preparing the bills/vouchers by showing the lower value by 25 to 50% - Held that: - the sole case of the Department is based on the information generated from the computer - The assessee-Appellants have not maintained any register for the raw material and the finished stock. Hence, the actual production cannot be verified. It proves that they have kept the production within the prescribed limit of SSI Exemption by showing the lower value on the vouchers or sometimes selling the goods without any vouchers - demand upheld - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1439
  Classification of goods - textile fabric combined with PU foam as textile fabric laminated with polyurethane foam - whether classified under CETH 5903 of CETA or under Chapter 39? - benefit of N/N. 29/2004-CE dated 9.7.2004 as amended by N/N. 10/2005-CE dated 1.3.2005? - Held that: - It is stated in the Circular dated 13.12.1995 that the process of manufacturing PVC leather cloth involves coating of a paste of plastic material (PVC) on one side of the base fabric. In this case, the plastic is not combined with the textile but is coated on textile fabric to form final product. Textile fabrics does not act as reinforcing material. Such fabrics are used for upholstery and can take sharp bends without cracking. After analyzing the applicability of Chapter Note 2(a) of Chapter 59, Section Note 1(d) of Section XI as well as Chapter Note 2(k) under Chapter 29 together with the HSN Notes, the Board has concluded that the product PVC leather cloth also known as rexine cloth has to be correctly classified under Chapter 59.03 of CETA, 1985. The SCN alleges that the respondent clears PU foam sheets and polyester granules (for laminating the PU foam) to their job workers who convert the granules into yarn and knit the yarn into fabrics and use it to laminate the PU form sheets. In fact, the respondent clears PU foam to their job workers who cut the same into the required size and laminate the PU foam on textile fabric. The respondent does not send any polyester granules to the job worker. After lamination the product cleared from the job worker is called as textile fabric laminated with PU foam and not PU material laminated for textile as contended in the SCN. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1438
  Extended period of limitation - It is appellant's case that department was put to knowledge about manufacture on job work basis - Held that: - apart from the raw materials supplied by M/s CPSML which were delivered through challans and accounted, the appellant was receiving raw materials from other sources like M/s Parthiv Spinning Mills without invoices which was unaccounted. Investigation revealed that appellant procured raw material in different names and this unaccounted raw material was used to clear finished product clandestinely without payment on duty. The mahazar establishes that there were discrepancies in the registers maintained for stock of raw material, stock of finished product. Physical verification of stock showed shortage of both. The appellant is guilty of suppression of facts with intent to evade payment of duty. The ingredients of the proviso to section 11AC is strongly established - the extended period has been rightly invoked - appeal dismissed - decided against appellant.

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• 2018 (2) TMI 1437
  Clandestine removal - MS Ingots, CTD/TMT Bars and mis-rolls - Held that: - Department officers visited the premises in December. The investigation continued for another two years as seen from statement of Sh.M.Seetharama Reddy which was recorded on 15.12.2005 and again on 25.4.2006. Still, the department has not made any investigation as to whether respondent had procured excess unaccounted inputs, or details of suppliers who have supplied unaccounted inputs/raw material for alleged unaccounted manufacture of finished products. Apart from private records and statements there is no material to establish clandestine clearance of goods. Clandestine clearance being a very serious charge, the department is duty bound to establish the same with reliable evidence. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1436
  Clandestine removal - case of Revenue is that the respondents have maintained two sets of invoices in order to remove finished products without payment of duty - Held that: - It is brought out from records that other than four numbers of invoices, no other double set of invoices were unearthed during the investigation. The statement of the buyers whose name is mentioned in the double set of invoices were recorded by the department. All of them have stated that they have no idea about such invoices and that they have received only duty paid goods. The department has not ventured to verify and find out whether the quantity covered in the alleged second set of invoices were actually raised in the factory of the recipients - the department has not conducted any investigation for unaccounted raw material for the huge clandestine clearance alleged against the respondent. So also there is no evidence for flow back of funds. The entire case is built on mere suspicions of officers without any documentary evidence. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1435
  Valuation - Appellant contested the show cause notice on the ground that the entire stock at the warehousing terminal at Ghatkesar Secunderabad was cleared from the terminal on payment of duty, while Revenue's case they should have discharged the duty liability i.e. 06.09.2004, on price prevailing on that day - Held that: - identical issue decided in respondent own case HINDUSTAN PETROLEUM CORPORATION LTD. Versus CCE., VISAKHAPATNAM [2010 (4) TMI 951 - CESTAT BANGALORE], where it was held that If the Revenue authorities of all over India are accepting the fact that the transaction value of the petroleum goods consequent to withdrawal of the warehousing facility has to be on the transaction value on the date of clearance, we do not find any reason for non-application of the said procedure in this case. Appeal dismissed - decided against Revenue.

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• 2018 (2) TMI 1434
  Clandestine removal - Zinc - shortage of raw material - Held that: - zinc was lying in the tank which is raw material - In the impugned order, there is no reference regarding the zinc which was lying in the tank. During the course of argument, it is submitted that six months before the computation of the raw material was also made where the element of the zinc was considered. When it is so, then we set aside the impugned order in this regard and remand the matter to the original authority to decide the shortage of the raw material - matter on remand. Valuation - includibility - value of bought out items - Held that: - identical issue has come up before the Tribunal in the case of Bharat Sanchar Nigam Ltd. Vs. CCE, Raipur [2018 (2) TMI 1384 - CESTAT NEW DELHI], where it was held that the towers were used by the assessee-appellants for only transmission of the signals without carrying out any further business activity, amount not includible - decided in favor of appellant. Decided partly in favor of appellant and part matter on remand.

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• 2018 (2) TMI 1433
  CENVAT credit - input services credit in respect of premises, which is being leased out - The department was of the view that appellant has not used the input services, on which credit was availed, in or in relation to the manufacture of their finished products - Held that: - The input credit whether availed on capital goods, inputs or input services is accounted in a common pool of credit. While utilising credit it is not necessary that there should be one to one correlation - the Cenvat Credit Rules does not prohibit the credit availed on capital goods to be utilized to discharge duty on finished products or for payment of service tax. So also the credit availed on payment of service tax can be utilized for discharge of central excise duty. The Tribunal in the case of Nvaratna S.G. Highway Prop. Pvt Ltd. [2012 (7) TMI 316 - CESTAT, AHMEDABAD] held that without construction of mall / building the renting of immovable property services cannot be provided and therefore construction service is an eligible service for credit for providing output service of Renting of immovable property. The disallowance of input service credit is unjustified - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2018 (2) TMI 1432
  Input Tax Credit - Section 10(3) of the KVAT Act, 2003 - demand raised relying upon the decision of this Court in the case of M/s.Kirloskar Electric Co. Ltd., & Ors. vs. The State of Karnataka & Ors. [2018 (2) TMI 524 - KARNATAKA HIGH COURT], where it was held that the machinery provisions cannot be allowed to override and defeat the substantive claim of the Input Tax Credits under Section 10(3) of the KVAT Act, 2003, which without any restriction of the time frame, allowed such deduction or credit of the ITC against the OPT liability of the Dealer in question - Held that: - this Court is of the opinion that since the judgment of this Court has been delivered in recent past and the same can very well be cited before the Appellate Authority also, by which, he is bound, this writ petition deserves to be disposed of by relegating the petitionerassessee to the appellate remedy already availed by it. The writ petitions are disposed of with a liberty to the petitioner to pursue the pending appeals before the Joint Commissioner (Appeals) and at the same time, the Joint Commissioner (Appeals) is also directed to entertain the appeals on merits and decide the same on merits in accordance with the law.

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• 2018 (2) TMI 1431
  Demand on the ground that the assessee did not furnish the prescribed Form ‘F’ declarations to prove that the transaction in question were branch transfers not attracting levy of CST - Held that: - this Court is satisfied that Respondent Department itself failed to issue blank ‘F’ Form declarations, allowing the petitioner in turn to furnish the same on monthly basis, as required under Rule 12(5) of CST Rules. The consolidated ‘F’ Form for the entire year, which gives the details of such branch transfers supported by other relevant documents, such as Proforma Invoices and Delivery Challans has been rejected on the ground that separate ‘F’ Forms were not filed within the period of limitation. The respondent has not produced any specific Rule prescribed for limitation for the said purpose and therefore, the separate ‘F’ Forms furnished by the petitioner assessee could not have been rejected on the ground of being filed belatedly. The demand raised against the petitioner assessee for the alleged failure of production of separate ‘F’ Forms, cannot be sustained - petition allowed - decided in favor of petitioner.

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• 2018 (2) TMI 1430
  Entertainment Tax u/s 6- A(4) of Karnataka Entertainment Tax Act, 1958 - “Bangalore Fashion Week” organized and held by the petitioner in Hotel Crown Plaza on 03.02.2012 - case of petitioner is that the Event organized by the petitioner did not fall within the four corners of the definition of ‘Entertainment’ as defined in Section 2(e)(iii) of the Act, 1958 as it was a Fashion Week, in which, the apparels and dresses of various manufacturers were put in exhibition on mannequins and even live models. Held that: - There is little doubt that the Event of ‘Bangalore Fashion Week” which included lifestyle parties, after Hour Parties, Press Conferences, display of designer products through mannequins and live models etc., would fall within the definition clauses and charging provisions of the said Act, 1958 - There is no doubt that the wide words employed in the said definition of ‘Entertainment’, which words are joined by the word “or” are by themselves of wide amplitude or import and there is neither any exclusion nor any separate inclusion in the said definition, because the legislature in its own wisdom already provided the wide words include all pervasive entertainments so as to cover all kinds of amusement, entertainment, exhibition or performance or pageant or a game or sport whether held in indoor or outdoor and made them taxable under the provisions of Section 3 of the said Act, 1958. The event organized by the petitioner clearly attracts the entertainment tax liability and there is no escape from the wide definition of “Entertainment” and charging provisions as contained in the Act itself. The overlapping of the words employed in the definition of ‘Entertainment’ is intended to cover different kinds of Events and things of entertainment and they cannot be construed in separate and water tight compartments. At this stage, there is no need to relegate the petitioner to the appellate channels, as provided under the said Act against the said impugned assessment order - petition dismissed - decided against petitioner.

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• 2018 (2) TMI 1429
  Review of the judgment dated 10.08.2017 - Held that: - the judgment under review was passed relying on that portion of the judgment of the Division Bench in Silver Line Villas & Apartments Pvt. Ltd v. State of Kerala [2016 (12) TMI 1695 - KERALA HIGH COURT], which took a stand that in respect of any suppressed turnover, which was not declared as part of the compounding proceedings, the benefit of the rate of tax applicable to compounding provision would not be applicable. The judgment under review does not call for any interference - review petition dismissed.

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• Indian Laws

• 2018 (2) TMI 1475
  Transportation of Ready mix plaster - Prohibition to transport sand beyond border - It is the grievance of the Petitioners that though the vehicles were seized and taken to the Police Station, the Revenue authorities have not followed the procedure prescribed under sub-Section 8 of Section 48 of the Maharashtra Land Revenue Code, 1966. Held that: - it is mandatory for the Revenue Officials to produce attached vehicles before the Collector within a period of 48 hours. This seizure of vehicles, without verifying whether the act alleged is an offence or violation of any of the regulations, and failing to produce it before prescribed authority to facilitate its release causes great prejudice and also financial loss to the owner. Apart from the harassment caused on account of illegal actions of the Revenue Officials in seizing vehicles and goods, there is failure to observe provisions of Section 48 (8)(2) of M.L.R.Code - Apart from this, the mandate of Section 48-8(2) of the Act has also not been followed by the Revenue Officials. In the circumstances, while directing the release of the seized vehicles as well as the material attached, we direct the Respondent–State to deposit the costs of 10,000/- in each Writ Petition, in this Court within a period of four weeks from today. Petition disposed off.

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• 2018 (2) TMI 1450
  Whether the provisions of Limitation Act, especially Section 18 of the Act, which is invoked by the Trial Court, in this case, can be made applicable to the litigation which is governed by the provisions of the Carriage by Air Act, 1972? Held that: - In the instant case, it is admitted that the Carriage by Air Act is a special enactment of the year 1972 and therefore later enactment to the general law of Limitation Act, which was enacted in 1963. Hence, as per above said Principle No.2, it will be necessary to ascertain the intention of the rule making authority to know which law should prevail. For this purpose, if one goes through the provisions of the said Act and the object and reasons for which the said Act was enacted, then it can be seen that the object of enacting the Carriage by Air Act 1972, was to provide a specific period of limitation and thereby to exclude the application of the Limitation Act. A cursory glance to the provisions of the Carriage by Air Act and the reading of the preamble of the Act makes it clear that it was enacted to give effect to the Warsaw Convention (of 1929) for unification of rules relating to international carriage by air to which India is a signatory, and further to give effect to the Hague Protocol of 1955. The rule making authority has made its intention clear that in case of the claims under this Act, the provisions of this Act will prevail in respect of limitation and thereby excluded the application of the general law of limitation. Consistent view taken by the Apex Court and also by various High Courts is that the Carriage by Air Act 1972, being a special statute, enacted to give effect to the international convention, the provisions thereof will have overriding effect. In view thereof, section 18 of the Limitation Act, which is a general enactment cannot have any application in the present case to extend the period of limitation, which is prescribed in Rule 30 of of Schedule II of the Act. As admittedly in this case, action of filing the suit in the Court was not taken within two years from the date on which cause of action arose and as provisions of Section 18 of the Limitation Act, cannot be made applicable, the suit apparently is barred by limitation - petition allowed - decided in favor of petitioner.

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