TMI Tax Updates - e-Newsletter
February 25, 2019

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

TMI SMS

• GST Council meeting - Real estate sector - GST fixed @1% in case of affordable housing and 5% without ITC in other residential properties

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Articles

1. Free of Cost Supply - Valuation Implications

   By: CA Akash Phophalia

2. Complete analysis of MCA Form MSME 1

   By: Sandeep Rawat

News

1. Recommendations of the 33rd GST Council meeting

2. NITI Aayog hosts Conference on The Future of Indian Banking

3. Removal of Tariff Crucial to Achieve Bilateral Trade Target of USD 200 billion by 2022-Cr Chaudhary

4. Suresh Prabhu inaugurates Aviation Infra Projects in 7 States

Notifications

GST - States

1. Order No. 02/2019-State Tax - dated 13-2-2019 - West Bengal SGST

West Bengal Goods and Services Tax (Second Removal of Difficulties) Order, 2019

2. Order No. 01/2019-State Tax - dated 13-2-2019 - West Bengal SGST

West Bengal Goods and Services Tax (Removal of Difficulties) Order, 2019

3. 234–F.T. - dated 13-2-2019 - West Bengal SGST

Corrigendum to Notification No. 1899-FT dated 31/12/2018

4. 08/2019 – State Tax - dated 8-2-2019 - West Bengal SGST

Extension of the due date for furnishing Form GSTR-7 for the month of January, 2019 till 28/02/2019

5. 07/2019 – State Tax - dated 31-1-2019 - West Bengal SGST

Extension of the due date for furnishing Form GSTR-7 for the months of October, 2018 to December, 2018 till 28/02/2019

6. 175-F.T. - 1/2019-State Tax (Rate) - dated 29-1-2019 - West Bengal SGST

Seeks to rescind notification No. 1132-F.T. dated 28.06.2017 in view of bringing into effect the amendments (regarding RCM on supplies by unregistered persons) in the GST Acts

7. 174-F.T. - 5/2019-State Tax - dated 29-1-2019 - West Bengal SGST

Seeks to amend notification No. 1142-F.T. dated 28.06.2017 so as to align the rates for Composition Scheme with WBGST Rules, 2017

8. 173-F.T. - . 3/2019-State Tax - dated 29-1-2019 - West Bengal SGST

West Bengal Goods and Services Tax (Amendment) Rules, 2019.

Circulars / Instructions / Orders

SEBI

1. SEBI/HO/MRD/DRMNP/CIR/P/2019/33 - dated 21-2-2019

Revision in Haircut on Central Government Securities (G-Sec) accepted as Collateral

Highlights / Catch Notes

GST

• GST Council Sets 1% Rate for Affordable Housing, 5% for Other Residential Properties Without ITC Benefit.

  News : Recommendations of the 33rd GST Council meeting - Real estate sector - GST fixed @1% in case of affordable housing properties and 5% without ITC in other residential properties.
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Income Tax

• ITAT Rules in Favor of Assessee on Jurisdiction Issue, TDS Liability Remains Unresolved; Case Sent Back for Review.

  Case-Laws - HC : Territorial jurisdiction of AO Kolkata - TDS liability - power to make the assessment - ITAT decided in favor of assessee, on ground of passage of time, without touching the basic issue of TDS liability of the assessee - Matter restored before the tribunal with direction.
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• Court Quashes Reopening of Assessment; AO's Notice u/s 148 Invalid Due to Mere Change of Opinion.

  Case-Laws - HC : Reopening of assessment - AO seeks to reopen the assessment on a mere change of opinion inasmuch as, at the time of scrutiny assessment, AO had applied his mind to the issue and even recorded finding in respect thereof in the assessment order framed u/s 143(3) - Notice issued u/s 148 quashed.
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• Educational Trust Institution Granted Separate PAN for Tax; Interim Relief Issued u/s 139A.

  Case-Laws - HC : Separate entity for the purpose of assessment of tax - allotment of separate PAN u/s 139A an education institution run by the Trust - Notices issues, interim relief granted.
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• Deduction Denied: Section 54F Not Met Due to Failure to Deposit Net Consideration in Notified Account by Due Date.

  Case-Laws - AT : Denial of deduction u/s 54F - net consideration has not been utilized for the purposes of deposit in the notified bank account in terms of Section 54F(4) of the Act before due date specified u/s 139(1) - additions confirmed.
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Customs

• Petitioner Denied Export Duty Drawback: Goods Not Manufactured in India, Ineligible Under Para 8.3(b) as Non-Supplier.

  Case-Laws - HC : Denial of export duty drawback to the petitioner - the condition of manufactured in India, is not satisfied - the petitioner not being the supplier shall not be entitled to the benefit of the deemed export drawback under Para 8.3(b) as claimed by the petitioner.
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• Court Rules on TCL DV522 Camera Import Classification: Primarily Video, Not Still Image, Impacting Customs Duties.

  Case-Laws - AT : Classification of imported goods - TCL Still Image Digital Video Cameras-DV522 - the appellant had claimed that the product recorded by them is not a video camera but meant to record still image primarily, however, could not produce any evidence to support their claim.
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SEBI

• SEBI Revises Haircut on Central Government Securities as Collateral to Align with Market Conditions, Boost Risk Management.

  Circulars : Revision in Haircut on Central Government Securities (G-Sec) accepted as Collateral
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Service Tax

• No Penalty Imposed: Appellant Pays Service Tax Promptly, No Evasion Intent Found u/s 78 Finance Act.

  Case-Laws - AT : Penalty u/s 78 of FA - Tax paid on being pointed out - The conduct of the appellant of prompt payment of Service Tax immediately after gaining knowledge about its liability to pay Service Tax, is sufficient reason to believe that the appellant did not have an intention to evade the payment of Service Tax - No penalty.
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• Appellants' Activities Not Classified as Advertising Agency Service Under Finance Act 1994; Dispute on Service Tax Classification.

  Case-Laws - AT : Classification of services - Scope of SCN - This is not to say that activity provided by appellants does not fall under any taxable category listed out during the period of dispute in the Finance Act, 1994, but Advertising Agency Service itself they certainly are not.
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• Appellant's Disclosure on Slump Sale Payments Negates Extended Tax Assessment Period Due to No Fact Suppression.

  Case-Laws - AT : Extended period of limitation - in all the letters issued by the appellant to the department, they have given the details of the payments made and also clarified that they are making the payments in accordance with Slump Sale Agreement - the appellant cannot be saddled with the guilt of suppression of facts with intention to evade payment of service tax.
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• Reassessment Needed for Service Tax on Works Contract Services to Joint Stock Companies Per Notification No. 24/2012.

  Case-Laws - AT : Works Contract service - construction services - the liability for service tax under WCS in respect of the activity carried out to Joint Stock Company is to be re-determined after extending the benefit of abatement under Notification No. 24/2012.
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Central Excise

• Polyurethane Cushions for Revolving Chairs Classified Under Chapter 3926 30 10, Not Chapter 94, Due to Specific Use.

  Case-Laws - AT : Classification of Polyurethane Moulded Parts of Chairs - the products in the required shape to be used as cushion for revolving chairs are furniture, as such they do not find any entry under Chapter 94 and in views of the specific entry under Chapter 3926 30 10, the products are to be classified therein.
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• Export-Oriented Unit Cleared of Breach for Turbo Charger Components Due to Non-Specific Export Permissions.

  Case-Laws - AT : 100% EOU - similar goods or not - when the permission granted to appellant has not listed any specific components of a turbo charger but instead has only indicated export product as 12,50,000 nos. of turbo charger component which was even subsequently enhanced to 32,00,000 nos. of turbo charger components, the appellant cannot then be said to have caused a breach of the conditions.
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• Duty Demand Set Aside for Damaged Goods from 100% Export Oriented Unit Not Cleared for Domestic Tariff Area.

  Case-Laws - AT : 100% EOU - return of damaged goods - goods were damaged in transit while they were taken out for export - since goods are not cleared for DTA, demand of duty set aside.
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• Court Allows Credit for Topographical Surveys and Environmental Consultancy as Essential Input Services for Factory Setup.

  Case-Laws - AT : ITC - input services - change of land use - topographical survey - consultancy of environmental issue - The service in question has been used by the appellant for setting up of a factory and without setting up of the factory the appellant is not able to manufacture their final product - Credit allowed.
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Case Laws:

• GST

• 2019 (2) TMI 1341
  Extension of time period for filing of GST Tran-1 - input tax credit - migration to GST regime - petitioner has alleged in the petition that despite making several efforts on the last date for filing of the application, the electronic system of the respondent no.2 did not respond, as a result of which the petitioner is likely to suffer loss of the credit that it is entitled to by passage of time. Held that:- The respondents are directed to open the portal before 31st of March 2019. In the event they do not do so, they will entertain the GST TRAN-1 of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They will also ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained for use of the credit likely to be considered for the petitioner. List this matter on 25.03.2019.

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• 2019 (2) TMI 1340
  Imposition of advertisement tax - Vires of the Mathura Vrindavan Nagar Nigam (Vigyapan Kar Ka Nirdharan and Wasuli Viniyaman) Upvidhi, 2017 - submission is that the aforesaid bye-laws were notified in the Official Gazette and were enforced w.e.f. 6.1.2018 but on the said date the Municipal Corporation had no authority in law to impose any advertisement tax - Held that:- The Mathura Vrindavan Nagar Nigam framed the said bye-laws in exercise of its powers under Sub-Section (2) (h) of the Section 172 of the U.P. Municipal Corporation Act which enabled it to impose tax on advertisement not being advertisement published in the news papers. The aforesaid provision of Sub-Section (2)(h) of Section 172 of the U.P. Municipal Corporation Act was omitted vide Section 173 of the U.P. G.S.T. Act which was enforced w.e.f. 01.07.2017. It may be pertinent to note that not only the G.S.T. Act was implemented w.e.f. 01.07.2017 but even the provision of Section 173 thereof was enforced with effect from the said date. Thus, Section 172 (2) (h) of the U.P. Municipal Corporation Act stood omitted w.e.f. 01.07.2017. In view of the aforesaid omission of Section 172 (2) (h) of the U.P. Municipal Corporation Act by the U.P. G.S.T. Act, all Municipal Corporations in the State of U.P. were denuded of the power to impose tax on advertisement after 01.01.2017. Once the said power of imposing tax on advertisement itself was taken away, no bye-law in that regard could have been framed and promulgated. Apart from the above, the State legislature was invested with the power to make laws in respect of taxes on advertisement vide Entry 55 of List II to the 7th Schedule of the Constitution but the said Entry was deleted by the Constitution (101st Amendment) Act, 2016 w.e.f. 12.09.2016. The Mathura Vrindavan Nagar Nigam had no legislative competence on 6.01.2018 to promulgate the aforesaid bye-laws in view of omission of Section 172 (2) (h) of the U.P. Municipal Corporation Act by virtue of Section 173 of the U.P. G.S.T. Act which was enforced on 01.07.2017 as also due to the omission of Entry 55 of List II of 7th Schedule to the Constitution of India empowering the State to make bye-laws in respect of tax on advertisement vide Section 17 of the Constitution (101st Amendment) Act, 2016 enforced w.e.f. 16.09.2016. Thus, the Municipal Corporation on the relevant date lacked the necessary legislative competence to make and promulgate the said bye-laws - petition allowed.

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• Income Tax

• 2019 (2) TMI 1339
  Application for advance ruling - Scrutiny assessment before AAR - HELD THAT:- There are no scrutiny proceedings pending before the assessing officer with regard to the question raised before the Hon’ble AAR. With out prejudice to the final report to be submitted u/s 245 R(4) after examining in detail all the facts relating to the transaction, the admission of the application may be accepted.” In view of the above, the application is admitted leaving all questions of law and facts open. The Department may submit its final report at the earliest.

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• 2019 (2) TMI 1338
  Default u/s 201(1) - failure to deduct TDS - liability to pay interest u/s 201(1A) if the payee of such amounts has files a nil return or a return showing a loss - HELD THAT:- Leave granted.

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• 2019 (2) TMI 1337
  Nature of land sold - capital asset or agricultural land - maintainability of appeal - HELD THAT:- We are not inclined to entertain this petition under Article 136 of the Constitution of India. The special leave petition is, accordingly, dismissed. Pending application(s), if any, shall stand disposed of.

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• 2019 (2) TMI 1336
  Addition of undisclosed stock - HELD THAT:- Once a finding of fact has been recorded in favour of the assessee by the two authorities for deleting the said amount, there is no good ground to interfere in such finding until and unless they are preserves. Similar is the case of deletion of Rs. 4,70,282/- and 7,80,200/- once the proceeding has been dropped under Section 145(3) of the Act which goes to show that the books of accounts of the assessee has been accepted and the same is not under challenge in the present appeal, therefore, the aforesaid addition cannot be sustained. - Decided against revenue

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• 2019 (2) TMI 1335
  Territorial jurisdiction of AO Kolkata - TDS liability - power to make the assessment - ITAT decided in favor of assessee, on ground of passage of time, without touching the basic issue of TDS liability of the assessee - TDS on payment of interest - HELD THAT:- The order of the tribunal was made on 20th December, 2007. For more than 10 years, this appeal under Section 260A is pending before this Court. Therefore, the fact remains that as far as the Calcutta assessments are concerned, a most unreliable and erroneous one for all practical purposes remains in the file. The tribunal has not touched it on the ground of passage of time. No determination has been made on the real issue as to whether the required tax was not deducted by the assessee in its other 134 branches. It is a most unfortunate state of affairs but from the point of revenue, a determination, even a proper guess work or best judgement assessment should be made in respect of the Calcutta branches. The tribunal should do it itself without remanding the matter to the Assessing Officer. We also caution the tribunal that since nothing has been done by the authority for so long. unnecessary harassment is not caused to the assessee and that the tribunal will proceed on the basis of the available records before it and pass an order which is just and reasonable. It would be open to the revenue to take appropriate action with regard to the other 134 branches outside the Kolkata jurisdiction.

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• 2019 (2) TMI 1333
  Assessment u/s 153A - AO of the searched person has recorded satisfaction on 16.03.2018, i.e. after a period of more than one year from the date of the assessment order - HELD THAT:- As submitted that upon receipt of the satisfaction note, the petitioner had raised objections in respect of the same and requested the respondent to pass a reasoned order disposing of the same. However, the respondent instead of deciding the objections, has straightaway proceeded to pass assessment order under section 143(3) read with section 153C read with section 153A(1)(b) of the Income Tax Act, 1961. Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 04.02.2019. By way of ad-interim relief, the impugned assessment orders dated 22.12.2018 (Annexure “G” collectively to the petition) for Assessment Years 2009-10 to 2014-15 are hereby stayed.

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• 2019 (2) TMI 1332
  Depreciation on distribution network, material supply contract and brand use - specification of reason as to how it falls within the clause “any other business or commercial rights of a similar nature” of Section 32(1)(ii) and as to how the doctrine of “ejusdem generis” is applicable in the instant case - HELD THAT:- Registry is directed to communicate a copy of this order to the Tribunal. This would enable the Tribunal to keep the papers and proceedings relating to the present appeal available, to be produced when sought for by the Court. Learned Counsel appearing for the respondent waives service. Addition u/s 14A r.w.r. 8D - HELD THAT:- Question as impugned in this appeal held that the assessee had not earned any exempt income during the year under consideration. The Tribunal, therefore, followed the decision of Delhi High Court in case of CIT Vs. Holcim India (Pvt.) Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT]. In such decision, the Delhi High Court ruled that when there is no exempt income earned by the assessee, no disallowance under Section 14A of the Act can be made.

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• 2019 (2) TMI 1331
  Reopening of assessment - reopening beyond a period of four years from the end of the relevant assessment year - HELD THAT:- In the absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment, the reopening of assessment under section 147 of the Act beyond a period of four years from the end of the relevant assessment year is invalid. The record of the case reveals that at the time of scrutiny assessment, the AO had gone into this very issue of interest on NPA and had made addition in that regard, which had been carried in appeal before the CIT (Appeals) and in further appeal before the Tribunal. Therefore, it is evident that the AO seeks to reopen the assessment on a mere change of opinion inasmuch as, at the time of scrutiny assessment, AO had applied his mind to the issue and even recorded finding in respect thereof in the assessment order framed under section 143(3) - the assessment order has merged with the order passed by the CIT (Appeals) and the Tribunal and hence also, the reopening of the assessment on this very ground is without authority of law. Lastly, even on merits, the issue stands concluded in favour of the assessee by the above cited decision of this court, which has been confirmed by the Supreme Court and hence, on the reasons recorded for reopening the assessment, the AO could not have formed the belief that any income chargeable to tax has escaped assessment. The impugned notice under section 148 of the Act, therefore, cannot be sustained. - Decided in favour of assessee.

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• 2019 (2) TMI 1330
  Reopening of assessment - firm had claimed excess deduction u/s 10AA - HELD THAT:- AO seeks to reopen the assessment on the basis of conjectures and surmises and that on the reasons recorded, the AO could not have formed the belief that income chargeable to tax has escaped assessment. As further pointed out that in this case the impugned notice has been issued on 31st March, 2018 in relation to AY 2011-12 which is clearly beyond a period of four years from the end of the relevant assessment year without there being any failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment, therefore, the assumption of jurisdiction on the part of the AO under section 147 of the Act, is invalid. Having regard to the submission advanced by the learned counsel for the petitioner, Issue Notice returnable on 5th February, 2019.

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• 2019 (2) TMI 1329
  Separate entity for the purpose of assessment of tax - allotment of separate PAN u/s 139A an education institution run by the Trust - it is submitted that merely because a separate PAN has been allotted to N.G. Patel Polytechnic, it does not make it a separate entity for the purpose of assessment of tax - HELD THAT:- Having regard to the submissions advanced by the learned counsel for the petitioner, Issue Notice returnable on 28th January, 2019. By way of ad-interim relief, the respondent is restrained from proceeding further pursuant to the impugned notice dated 23.3.2018 issued to N.G. Patel Polytechnic for assessment year 2011-12 (Annexure-D to the petition). The respondent is directed not to serve the assessment order in case the same is not yet served. The respondent is further directed to furnish a copy of the reasons recorded to the petitioner within a period of one week from the date of receipt of a copy of this order.

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• 2019 (2) TMI 1328
  Deduction u/s 80HHC and 80HHD - HELD THAT:- As far as the questions pertaining to Sections 80HHC and 80HHD are concerned, they are covered by a judgment of this Court rendered in the same assessee’s case and reported in EIH Ltd. v. Commissioner of Income-Tax (2011 (8) TMI 411 - CALCUTTA HIGH COURT). As submitted on behalf of the assessee that on a special leave petition carried by the Revenue against such judgment, leave has been granted and the appeal is pending consideration before the Supreme Court. Since the previous view of this Court is binding on a coordinate Bench and such view of this Court has not yet been upset by the Supreme Court, the legal issues pertaining to Sections 80HHC and 80HHD of the Act are answered in consonance with the law as declared in the previous judgment pertaining to the assessee as noted above. Chapter VIA double deduction - whether an assessee is entitled to claim deductions under divers provisions in respect of the same income, if the assessee qualifies under the various provisions - HELD THAT:- The two provisions involved are Sections 80HHD and 80-IA of the Act. A previous view of the Supreme Court was that if the assessee is entitled to claim on more than one head, the assessee must be left free to do so, subject to the deduction not being more than the income earned under such head. However, the same issue has been referred to a larger Bench for reconsideration in the judgment ACIT vs. Micro Labs Ltd.(2015 (12) TMI 708 - SUPREME COURT).

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• 2019 (2) TMI 1327
  Non-prosecution of appeal - AR submitted that the assessee could not appear for various reasons and submissions are without any supporting evidence and reasons for non-prosecution of case before the CIT(A) - HELD THAT:- CIT(A) has granted sufficient opportunities. When a query was raised to the learned AR being the Reasonable cause and Reasons for non-appearance, the explanations of learned AR are not satisfactory and are not supported with any evidence. We, considering the principles of natural justice and the reasons envisaged by learned AR are not supportive to the case, consider it appropriate to restore the entire disputed issue to the file of the CIT(A) but considering the facts on record with respect to non-appearance of the assessee or learned AR in spite of issuing notices on various dates in appellate proceedings and the assessee chose not to appear which cannot be overlooked. Therefore, we are of the substantive opinion that the assessee should be provided an opportunity of hearing but with payment of cost of Rs. 10,000/- to the Income-tax Department within a period of one month from the date of receipt of this order.

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• 2019 (2) TMI 1326
  Penalty u/s 271(1)(c) - HELD THAT:- Assessee has taken a legal ground before the CIT(A) challenging the levy of penalty in this case u/s 271(1)(c) of the IT Act. CIT(A) has not adjudicated the legal ground taken before him. Considering the totality of the facts of the case and in the interest of justice deem it proper to restore this matter back to the file of the CIT(A) with direction to adjudicate the same. Needless to say the CIT(A) shall grant due opportunity of being heard to the assessee and decide the issue as per fact and law.

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• 2019 (2) TMI 1325
  Penalty u/s 271(1)(c) - non specification of charge - defective notice - HELD THAT:- The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the Id. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled . See COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee.

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• 2019 (2) TMI 1324
  Disallowance of deduction u/s 80IB(8A) - assessee is not independently carrying on scientific research but is a contract researcher - HELD THAT:- Claim has to be examined in each of the years and left a note of caution that the view taken therein may not apply to subsequent years, if there are change of facts. However, as seen from the approval granted, there are no change of facts and assessee is found to be eligible for deduction u/s. 80IB. We find the authorities were renewing the certificates after verifying whether the assessee is fulfilling the requisite conditions. CIT (A), therefore, verified that the prescribed authority has renewed the certificate for the A.Y 2012-13 and thereafter considered the ITAT orders to grant relief to the assessee. We find that the facts and circumstances of the case in this A.Y are also the same as in the earlier A.Ys before the ITAT, and the learned DR has not been able to rebut the findings of the CIT (A). In view of the same, the appeal of the Revenue is dismissed.

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• 2019 (2) TMI 1323
  Capital gain computation - cost of the parking area should be loaded with the cost of the shops and the parking area is a capital asset of the assessee - HELD THAT:- The only revenue the assessee can derive from the parking area is on account of parking fee charged from the patrons or tenants or any other party. The revenue arising from such parking fee shall obviously be reflected in the assessee’s profit and loss account. AO has based his decision on the budgeted cost prepared by the assessee for the project in which the parking area has been specially mentioned as “saleable area”. But what the AO has ignored is that the saleable area has been mentioned at 0.00 sq ft. This itself shows that the parking area is not a saleable area. Considering the facts of the case in totality, we do not find any error or infirmity in the findings of the CIT(A). Addition being interest paid to DLF Ltd on borrowed capital - HELD THAT:- There is no dispute that the assessee has borrowed funds for its business. There is also no dispute that the assessee was having sufficient interest free funds to make the investment in shares of Hyderabad based companies. Assuming, yet not accepting, the borrowed funds have been utilised for purchase of shares for getting controlling interest in the land owned by the companies so that it can construct malls/multiplexes at Hyderabad. This strategic investment clearly shows that the borrowed funds, if any, have been utilised for expansion of the business and is for the business purposes. The Hon'ble High Court of Delhi in the case of Reebok India Company [2018 (10) TMI 439 - DELHI HIGH COURT has held that once it is established that there was a connection and nexus between the interest paid and claimed by the assessee as expenditure and the purpose of business which need not necessarily be business of the assessee itself, the revenue cannot assume role and occupy the arm chair of a business man to decide whether expenditure was reasonable. In assessee’s sister concern, DLF Brand Limited, the Tribunal had the occasion to consider a similar issue and has allowed the claim of interest expenditure on the amount borrowed for investment in subsidiary companies. Charging interest upto the cut off - non exclusion of interest income from two customers - HELD THAT:- There is no dispute that the cut off date has been chosen by the assessee as 25th March. It is also true that every year the assessee is charging interest upto 25th March. This, in itself, complete one full year. There is no reason why interest should be assumed for six days. We, therefore, do not find any error or infirmity in the findings of the CIT(A) to this extent. In so far as non exclusion of interest income from two customers, namely, Shri Kiran Deep Mann and Shri Rajpal Singh is concerned, we are of the considered opinion that a business man has to discharge many social and moral obligations and while discharging such obligations, the business man may not charge anything from the customers. We, therefore, do not find any error in such practice of the assessee. Proportionate interest on borrowed capital being used for making investment in shares - HELD THAT:- CIT(A) allowed the grievance of the assessee by deleting the expenditure since he has deleted the disallowance of proportionate interest. Since we have confirmed the findings of the CIT(A) vide Ground No. 2 this ground is also dismissed.

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• 2019 (2) TMI 1322
  TP Adjustment - computation of arm’s length price - aggregation of international and domestic segments pertaining to IT segment - TPO re-characterized the assessee’s limited risk IT services as ITeS, thereby rejecting the functional analysis as documented in the Transfer Pricing Documentation - HELD THAT:- Assessee company has given all the information relating to international segment and domestic segment with the related party sales transaction of the assessee company with its AE’s. Besides that the TPO has also re-characterized the assessee’s limited risk IT services as ITeS, thereby rejecting the functional analysis as documented in the Transfer Pricing Documentation. The TPO while re-characterizing the IT services as IT enabled Services has not given any finding or reasons as to why the same is done. Thus, on both account that is aggregation of international and domestic segments pertaining to IT segment and the re-characterization of the IT services as IT enabled Services, the issues need to be addressed by the TPO after taking into account all the relevant evidence provided by the assessee company during the assessment proceedings which the TPO failed to take into account. Therefore, it will be appropriate to remand back the entire Transfer pricing issue to the file of the TPO/AO. Allowability of provision for warranty - HELD THAT:- The assessee company’s submissions were not properly taken into account by the Assessing Officer during the Assessment Proceedings while deciding the provision for warranty. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer who will decide the same after taking into account all the submissions and evidence provided by the assessee company during the assessment proceedings.

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• 2019 (2) TMI 1321
  Disallowance of interest paid on loans - interest bearing funds has been diverted to give various loans and advances for non business purposes - HELD THAT:- The assessee has claimed to have borrowed loans for specific purpose of acquisition of property. According to the assessee, amount from Citibank has been partially used for business purpose and partially used for acquisition of property. Similarly loan taken from LIC and HDFC are for the purpose of acquisition of property. Likewise, interest paid on unsecured loan is fully funded for the purposes of business. There are divergent facts emerging from the orders of the lower authorities and the arguments of the assessee in light of certain evidences. It is the case of the AO that the assessee has diverted interest bearing funds for non business purposes, but the assessee claims that the loan taken from Citibank has been partially funded for business purpose and partially funded for acquisition of property. Notice that the assessee has taken a proposition in the light of the decision in the case of CIT vs Reliance Utilities & Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] wherein held that when mixed funds are available, a general presumption goes in favour of the assessee that loans and advances are out of interest free funds and no part of interest bearing funds has been used. Consequently, no interest expense has been disallowed. In this case, the assessee has filed enough evidence to prove that loan has been partially borrowed for the purpose of business. The issue needs to be re-examined by the AO in the light of claim of the assessee that the Citibank loan has been partially funded for business purpose. - Appeal filed by the assessee is allowed for statistical purpose.

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• 2019 (2) TMI 1320
  Unexplained expenditure u/s 69C - bogus purchases - addition towards estimated profit from the project @7% on total expenditure incurred for the year and debited to the P&L Account - HELD THAT:- There is no error in the findings recorded by the CIT(A) while scaling down addition made by the AO towards alleged bogus purchases and restricting 20% profit on such alleged bogus purchases. Hence, we are inclined to uphold the findings of CIT(A) and reject ground taken by the revenue. See COMMISSIONER OF INCOME-TAX-I VERSUS SIMIT P SHETH [2013 (10) TMI 1028 - GUJARAT HIGH COURT] Disallowance of interest paid on unsecured loan and excluded from work-in-progress - AO has excluded interest paid on unsecured loan on the ground that the total unsecured loan on which interest has been paid, has been treated as unexplained cash credit u/s 68 of and also consequent interest expenditure is reduced from work-in-progress - CIT(A) deleted addition - HELD THAT:- This is a recurring issue which is emanating from AY 2009-10. AO, initially made addition towards unsecured loan taken from certain parties u/s 68. CIT(A) has deleted addition made by the AO on the basis of additional evidence filed by the assessee towards unsecured loan taken from 23 parties and confirmed unsecured loan taken from 12 parties. CIT(A) also directed the AO to work out interest components of genuine loans as well as loans which were confirmed has unexplained credits. CIT(A) has, by following his predecessor’s order, directed the AO to examine the claim of the assessee in light of additional evidence and also keeping in view findings recorded by the CIT(A) for AY 2009-10. Revenue has not challenged the findings of CIT(A) in deleting addition made by the AO towards unexplained loan for AY 2009-10. Since the issue is recurring from AY 2009-10 and which has a cascading effect on addition made by the AO towards interest disallowance for the year under consideration, we find that there is no error in the findings recorded by the Ld.CIT(A) and directing the AO to examine the claim of the assessee in the light of evidence filed by the assessee and also keeping in mind the findings recorded by the Ld.CIT(A) for AY 2009-10. - Decided against revenue

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• 2019 (2) TMI 1319
  Reopening of assessment - Estimating of income from fish ponds - survey u/s 133A - AO found that the assessee are engaged in the pisci culture in 86 acres of fish tanks taken on lease - HELD THAT:- In the instant case, the AO has reopened the assessment since the income declared by the assessee was less than Rs. 15,000/- per acre. In response to the notice, the assessee have admitted the income @ Rs. 15,000/- per acre of water spread area and the lower authorities failed to bring any evidence or material to support the contention that the income is more than Rs. 15,000/- per acre admitted by the assessee. Therefore, respectfully following the view taken by this Tribunal we hold that estimation of income at Rs. 15,000/- per acre is reasonable. Accordingly, we set aside the orders of the lower authorities and allow the appeals of the assessee.

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• 2019 (2) TMI 1318
  Denial of deduction u/s 54F - belated deposits in the scheme is not in terms with the provisions of the Act - deposit in the capital gain account scheme has been made on 31.03.2014 i.e. on or before extended due date in terms of Section 139(4) of the Act instead of depositing it on or before the due date 31 07-2013 in terms of Section 139(1) - deposits made in the designated capital gain account scheme within the extended due date under s.139(4) - HELD THAT:- In the present case, we are concerned with utilization of net consideration arising on sale of original assets towards deposit in capital gain account scheme. The time stipulated for such deposit is qua Section 139(1) of the Act. Hence, the suggestion on behalf of the assessee for eligibility of deposits subsequent to expiry of time limit under s.139(1) of the Act [expressly provided in the Act] is not aligned with and militates against the plain provisions of law codified in Section 54F(4) of the Act. The mandate of Section 54F(4) of the Act being crystal clear, it is quite difficult to depart therefrom. While holding so, we also refer to the decision of the Hon’ble Supreme Court rendered in the case of Dilipkumar & Co. [2018 (7) TMI 1826 - SUPREME COURT OF INDIA] requiring strict construction of beneficial provision. In the absence of any ambiguity in the exemption provision for eligibility, we do not see any reason to interfere with the order of the CIT(A) where the net consideration has not been utilized for the purposes of deposit in the notified bank account in terms of Section 54F(4) of the Act before due date specified under s.139(1) of the Act. We now turn to decisions referred to on behalf of the assessee. These decisions were rendered in the context of their own facts. In both cases, the consideration was invested for purchase of residential house within stipulated period. In the instant case, the issue is with reference to deposit in scheme. Coupled with this, the benefit of law on interpretation of beneficial provision by Hon’ble Supreme Court in Dilipkumar & Co. (supra) was not available in those cases. - Decided against assessee.

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• 2019 (2) TMI 1317
  Addition u/s 68 - unexplained cash credit - Identity, Genuineness and Creditworthiness of the parties with respect to share application money - HELD THAT:- Assessee has filed the second appeal before us along with relevant information in the form of additional evidence. Since the additional grounds of appeal and additional evidences are all in relation to the additions made by the Assessing Officer and no verification of fresh facts are necessary, we are inclined to admit the same and remit the same to the file of Assessing Officer for Denovo consideration in accordance with law. Needless to mention that assessee shall be given a fair opportunity of hearing. - Appeal of assessee is allowed for statistical purposes.

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• Benami Property

• 2019 (2) TMI 1334
  Offence under Prohibition of Benami Property Transactions Act, 1988 - Concerned authority jurisdiction or power to issue a show cause notice under amended Act in relation to the 2011 transaction? - whether a shareholder and a company are separate legal entities and that a shareholder cannot be treated as a beneficial owner within the meaning of the amendment Act of 1988 in respect of a property owned by a company incorporated under the provisions of the Companies Act, 1956 needs to be gone into - HELD THAT:- The authority in our opinion cannot decide its own jurisdiction in such a case. It has to be decided by us. Only after such a decision only those matters which can be decided by the said authority may be remanded to them. In view of the above reasons, we stay the operation of the impugned judgment and order. The appeal is formally admitted. We feel that it should be heard out on an expeditious manner. As the respondents are represented formal issue and service of the notice of appeal are dispensed with. Learned Advocate-on-Record for the appellant is directed to file informal paper books by 8th February, 2019, serving two copies thereof upon the advocate-on-record for the respondent not later than seven days before the date of hearing of the appeal. List this appeal for hearing on 27th February, 2019 at the top. The reference referred to in Section 24(5) shall not be treated as final and shall only be treated as provisional during the whole period the writ application and the appeal are pending before this Court. Subject to its result, the reference will be treated as final. Thereafter, time to pass the adjudication order under Section 26(7) of the said Act will start to run. Hence, it follows that the respondent authorities will not take any further steps in the matter till the disposal of the appeal.

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• Customs

• 2019 (2) TMI 1316
  Denial of export duty drawback to the petitioner - petitioner is a power generation company which has implemented various non-mega power projects - It is the case on behalf of the petitioner that in respect of the supply of the above plant to the power project, the petitioner applied to the Respondent No. 3 for claiming the deemed export drawback in respect of the custom duties paid on the imported equipments and spare parts as per the provisions of Chapter 8 of the Foreign Trade Policy - Territorial jurisdiction of this Court. Territorial Jurisdiction - It is the specific case on behalf of the respondents that as no cause of action much less part of cause of action has arisen within the territorial jurisdiction of the High Court of Gujarat, the Gujarat High Court shall not have any territorial jurisdiction to decide the dispute with respect to deemed drawback between the parties - Held that:- It cannot be said that no part cause of action has arisen within the territorial jurisdiction of the Gujarat High Court. Considering the nature of controversy and the reliefs sought it can be said that part cause of action can be said to have arisen at New Delhi however, at the same time when the goods in question, on which the duty drawback is claimed, were used in the project in Gujarat, it can be said that part cause of action has also arisen in Gujarat and therefore, it cannot be said that this Court has no territorial jurisdiction. Under the circumstances, preliminary objection/s raised on behalf of the Union of India that this Court has no territorial jurisdiction is hereby overruled. Rejection of the claim of the petitioner of deemed export drawback on the goods imported by the petitioner, for supply of off-shore equipments and spare parts to the petitioner, supplied by one ‘Alstom’, which came to be used by the petitioner to set up a power project - Held that:- While considering the benefits of deemed export duty drawback the conditions to be satisfied are that the goods supplied are manufactured in India; supply of goods are to the power projects and that the benefits of deemed export shall be available under Paragraphs (d), (e), (f), (g) of Chapter 8.2, only if the supply is made under procedure of ICB i.e. International Competitive Bidding - In the present case the goods supplied by Alstom and imported by the petitioner was under the procedure of ICB. It is also not in dispute that the said goods imported are used in power projects. However, one essential condition that such imported goods on which the custom duty is paid and which are used in the power project shall be manufactured in India, is not satisfied. “Manufacture” is defined under Chapter 9.36 of the FTP and it means to make, produce, fabricate, assemble, process or bring it to existence by hand or by machine, a new product having a distinctive name, character or use and shall include processes such as refrigeration, re-packing, polishing, labelling, reconditioning.etc. In the present case the goods which are imported by the petitioner and supplied by Alstom on which the custom duty is paid and for which the deemed export drawback is claimed, cannot be said to be manufactured in India even as per the definition of “manufacture” contained in clause/Chapter 9.36. Nothing is on record that any of the activities contained in Chapter/Clause 9.36 had been carried out in India before the same is used in the power project. It appears that the goods which are imported are directly used in the power project. The power project itself cannot be said to be the goods. The underlying intent and idea to classify certain transactions to be deemed export is to give them a status of export so as to make eligible or a manufacture of such goods including contractor or subcontractor to get benefit of duty draw back and thereby compete with persons who would supply imported goods. The idea seems to be to give the benefit to the local manufacturers and when the locally manufactured goods are supplied, then they are deemed to be export and thereby idea is to provide level playing field to permit such manufacturer/supplier to drawback duty supplied by him on any inputs of such goods which are ultimately supplied to non-mega power project - considering the object and reasons of the FTDR as well as underlying intent and idea to grant the benefit of deemed export drawback and one of the essential conditions is that the goods imported and supplied to the non-Mega power project must be/shall be manufactured in India and in the present case the goods imported for which the benefit of deemed export drawback is claimed, cannot be said to be ‘manufactured in India’, the claim of the petitioner of deemed export drawback is rightly rejected. It is also required to be noted at this stage that in the present case the supplier is Alstom and the petitioner has imported the goods. Therefore, considering Clause/Chapter 8.4.4(i) in respect of the supplies made under Paragraphs 8.2(g) of FTP, i.e. supply of goods to power projects, the supplier shall be entitled to the benefits listed in Para 8.3(b) namely deemed export drawback. Therefore also, the petitioner not being the supplier shall not be entitled to the benefit of the deemed export drawback under Para 8.3(b) as claimed by the petitioner. The impugned decision of the Respondent No. 3 rejecting the claim of the petitioner of deemed export drawback and the impugned minutes of meeting of the Policy Interpretation Committee being PIC No. 10/AM-11, dated 15-3-2011 are absolutely in consonance with the Foreign Trade Policy (2009-2014) and the petitioner has been rightly denied the benefit of deemed export duty drawback - petition dismissed - decided against petitioner.

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• 2019 (2) TMI 1315
  Carrying of contraband item in abdomen of the accused - 49 pieces of bullet shaped capsules comprising of Hashish secreted in the body of accused - Sections 21(b) 23(b) of the NDPS Act - retraction of statements - procedure laid down under Section 103 of the Customs Act for recovery of contraband secreted inside the body of the appellant not carried on properly - Held that:- Customs officers including the officers of the Air Intelligence Unit are empowered to investigate offences under the NDPS Act and are vested with all the powers of an officer-in-charge of a police station for the purpose of such investigation in terms of Section 53 of the NDPS Act. When a customs officer undertakes investigation of offences under the NDPS Act he is not only governed by the provisions of Customs Act but also by the provisions of the NDPS Act - Search of a person under the NDPS Act is governed by Section 50 of the said Act. Section 103 of the Customs Act lays down the procedure that a customs officer is required to follow to conduct X-ray of the body of the suspect for detecting and/or recovering contrabands secreted inside his body - The procedure described above calls for magisterial intervention not only for the purpose of holding X-ray of the body of the suspect but also requires magisterial permission for undertaking suitable action for recovery of the contraband secreted inside the body upon receipt of report of the radiologist. Initial magisterial permission for conducting X-ray of the suspect is not a substitute of the subsequent magisterial sanction for undertaking suitable action to bring out the contraband in the presence of a registered medical practitioner upon receipt of the X-ray report. Accordingly, consent of the suspect for conducting X-ray of his body cannot be treated to be a valid consent under sub-section (8) of Section 103 to waive the necessity of magisterial permission for undertaking suitable action for bringing out the contraband in presence of a doctor upon receipt of the X-ray report - Thus, consent of the appellant in Ext.11 to conduct X-ray in the instant case does not absolve the authorities to follow the procedure adumbrated in sub-sections (5) and (6) of the said section for bringing out the goods secreted inside the body of the suspect. In the facts of the instant case, I find that the radiologist who purportedly conducted X-ray of the abdomen of the suspect has neither been examined nor had he sent his report along with X-ray plates to the Magistrate for suitable action as contemplated under the said provision of law. On the other hand, X-ray plates along with report of the radiologist were produced by P.W.1. Radiologist was not examined in the instant case and in my considered opinion it cannot be said that the report of the radiologist along with X-ray plates was duly proved - the prosecution has failed to prove that it had followed the procedure laid down under Section 103 of the Customs Act for recovery of contraband secreted inside the body of the appellant. Finally, it has been argued that as the recovery of the narcotic substance secreted inside the body of the appellant was in ordinary course of passing stool and that too in the morning of the very next day after radiological examination was conducted, there was no scope for obtaining of order under Section 103(6) of the Customs Act. Procedure entailing recovery of narcotics/contraband from the body of the suspect requires invasion into the physical body of the suspect and an encroachment into his privacy. Such exercise being invasive in nature must not only be in strict compliance of statutory safeguards as contemplated in Section 103 of the Customs Act but also must be in consonance to the dignity of the suspect and ought not involve any cruel, degrading or inhuman treatment lest such procedure runs fowl of Article 21 of the Constitution. Admittedly in the instant case, radiologist s report was not forwarded to the magistrate nor the latter s permission obtained for undertaking suitable action for bringing out the contraband from the body of the appellant. On the other hand, appellant was kept detained in the A.I.U. office under surveillance till it is claimed that he defecated resulting in ejection of the contraband. It is contended as the ejection of the contraband was through normal metabolic process compliance of Section 103 of the Customs Act was neither applicable nor feasible. It appears from the evidence of the prosecution witnesses that on receipt of X-ray report, the appellant was kept under surveillance at the A.I.U. office till he defecated on the next morning allegedly ejecting the contraband from his body. The alleged recovery of contraband in the instant case appears to have been made shrouded in secrecy and is sought to be proved only on the basis of the uncorroborated version of the A.I.U. officials. Although P.W. 1 claimed that such recovery was made in the presence of two independent witnesses, no independent witness was examined to prove such fact. Entire process of alleged recovery took place within the closed confines of the A.I.U. office while the appellant was in the custody of the said officials. No medical aid or supervision was extended to him during his detention or at the time of alleged recovery. Hence, it is most unsafe to rely on the mere ipse dixit of the A.I.U. officials to come to a finding that narcotic substance was recovered from the excreta of the appellant particularly when such exercise was done without magisterial permission, bereft of medical supervision and was not supported by independent witnesses. Reliability on statements of the appellant - Held that:- None of the said statements relied by the prosecution have been proved beyond reasonable doubt. Ext. 18 was purportedly recorded on 11-2-2012 in the presence of P.W.9 (Amitava Lahiri) and P.W.5 (S. Bhattacharya). Although P.W.9 claims that he recorded and read over the said statement to the appellant in Hindi, his version is not corroborated by P.W.5 (S. Bhattacharya). With regard to the purported statement recorded on 12-2-2012 (Ext. 6) there are number of discrepancies. P.W.2, who claimed to be present at the time of recording of the statement, stated that it is not mentioned in the statement in which language the appellant made such statement. It is the duty of the prosecution to prove the purported voluntary statements of the appellant beyond reasonable doubt in order to enable the court to come to a finding of guilt on the sole basis of such statements. The discussion of the evidence of the prosecution witnesses with regard to the said statements leaves no doubt in one s mind that the evidence in that regard is too flimsy and contradictory to inspire confidence - the statements claimed to be made by the appellant have not been proved beyond reasonable doubt and I do not consider it prudent to rely on such statements to come to a finding of guilt against the appellant. Conviction and sentence imposed on the appellant is, accordingly, set aside - appeal allowed.

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• 2019 (2) TMI 1314
  Classification of imported goods - TCL Still Image Digital Video Cameras-DV522 - whether classified under CTH 85258030 or otherwise? - benefit of N/N. 25/2005-Cus. Dt. 1.3.2005 (Sr. No. 13) - Held that:- Before the Ld. Commissioner (Appeals), appellant could not able to justify, even though claimed that the primary function of the imported “Camcorders” DV 552 is meant for recording Still Image and not for video recording, by production of the relevant literature/user manual submitting that the same is unavailable. The Commissioner taking the product description and usage from the internet and also the circular of the board on the issue, came to the conclusion that the imported product is a ‘Video Camera’ and not eligible to the benefit of said notification. Before the Ld. Commissioner (Appeals) as well as before this forum, that is in the grounds of appeal, even though the appellant had claimed that the product recorded by them is not a video camera but meant to record still image primarily, however, could not produce any evidence to support their claim - impugned order upheld - appeal dismissed - decided against appellant.

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• 2019 (2) TMI 1313
  Maintainability of appeal - whether, appeal is maintainable before the Tribunal under Section 129A of the Customs Act, 1962 in respect of the matters decided under the CHALR, 2004 - alleged misuse of CHA License - Principles of natural justice - Held that:- The issue arising out of the present dispute is no more open for any debate in view of the decisions of this Tribunal in the case of Commissioner of Customs (General), Mumbai Vs. Mukadam Freight Systems Pvt. Ltd. [2017 (5) TMI 798 - CESTAT MUMBAI]. The Tribunal has held that the right to prefer an appeal to the Tribunal under Section 129A of the Act against an order passed under CHALR, 2004 is only available to the CHA and Revenue cannot question maintainability of the order passed under such Regulations. Appeal dismissed - decided against Revenue.

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• Service Tax

• 2019 (2) TMI 1312
  Rejection of VCES Declaration - appellant had indicated that they have paid their dues on 2.5.2013, which is prior to the coming into operation of the VCES scheme - rejection of declaration on the ground that dues were paid prior to the insertion of VCES Scheme - Held that:- Although the impugned order has been passed after the passing of the order of this Tribunal in ANISHA DEEPAK TANK VERSUS COMMISSIONER OF CENTRAL EXCISE NASHIK [2018 (5) TMI 1210 - CESTAT MUMBAI], dated 29.12.2017, but still the Commissioner rejected the aforesaid submission of the Appellant on the ground that the aforesaid appeal i.e. Appeal No. ST/86978/2014 is not maintainable before the tribunal as per the VCES scheme and therefore he decided the appeal on merits and confirmed the demand with interest and penalty through the impugned order. While going through the order dated 29.12.2017 of the Tribunal in appellant’s case concerning VCES scheme, I find that the ground of non-maintainability of Appeal before this Tribunal, which has been given by the Commissioner while rejecting the submission of the appellant in the present case, has not been argued anywhere by the revenue in that Appeal. Once the issue has been decided by the Tribunal in favour of appellant it can’t be reopened by any of the authorities below. The Commissioner has erred in recording the finding on the admissibility of the declaration filed by the appellant under the VCES Scheme. Nothing has been produced on record nor it is the case of revenue that the aforesaid order dated 29.12.2017 has been challenged by the revenue in appeal. Appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1311
  Penalty u/s 78 of FA - Tax paid on being pointed out - Appellant also willing to deposit the amount of interest u/s 75 ibid - no suppression of facts - construction services - amendment in the provisions - lot of confusion amongst the builders - Held that:- The provisions under Section 11AC of the Central Excise Act, 1944 and Section 78 of the Finance Act, 1994, are pari materia - In the matter of Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] the Hon’ble Supreme Court has laid down that unintentional and bona fide non-payment of duty does not entail penalty under Section 11AC of the Act of 1944 - Similarly, in the matter of Commissioner of Central Excise, Vapi v. Kisan Mouldings Limited [2010 (9) TMI 451 - SUPREME COURT OF INDIA], following the ratio of Rajasthan Spinning and Weaving Mills case, the Hon’ble Supreme Court has held that since it is a case of bona fide mistake and there was no intention to evade tax by the respondent, penalty was rightly not imposed. Thus, it is quite vivid that presence of mens rea is absolutely necessary ingredient for imposing penalty under Section 78 of the Finance Act, 1994, as laid down by the Hon’ble Supreme Court - In the present matter, the Appellants were under a bona fide belief that they were not liable to pay Service Tax for construction services. The conduct of the appellant of prompt payment of Service Tax immediately after gaining knowledge about its liability to pay Service Tax, is sufficient reason to believe that the appellant did not have an intention to evade the payment of Service Tax. Therefore, considering the overall facts and circumstances of the case, while upholding the interest liability u/s.75 ibid, Section 80 ibid can be invoked for waiver of penalty imposed on the appellant. Penalty set aside - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1310
  Classification of services - Advertisement agency service or not - monthly printing charges - appellant had charged service tax on 5% of the billed amount and discharged VAT @ 4% on 95% of the billed amount - Department took the view that appellants should have treated the entire transaction as towards provision of taxable services under the category of Advertising Agency and discharged the service tax on the entire value - Held that:- The services provided, for being exigible to service tax liability would have to be one which is connected with the making or preparation of an advertising or its display or exhibition. It is therefore relevant to examine whether the appellants provided any such service where the activity of the appellant would then fall under any of these categories - Surely it cannot be said of the appellants that they had prepared advertising material on their own. On the other hand, the facts clearly indicate that the basic market promotional material as per the approved design lay out by Reader s Digest had been given to the appellants for getting them printed in approved material. Appellants were only required to procure the material including paper, get the subject matter printed on to such paper with personalization for individual clients and post/despatch the material as per the mailing schedule. It cannot also be said of the appellants that they were engaged in display or exhibition or for that matter that they were Advertising Consultant for Reader s Digest. This agreement is a Master Agreement and not the local country agreement. Be that as it may, what comes out of para.4.02 is that the appellant is required to create specification sheet and project documents subject to Reader s Digest approval. . From such activity, it cannot be concluded that appellants were engaged in making or preparing advertisement per se - the end product on which advertisement has been printed and communicated to the clients of Reader s Digest in a personalized form is to be of dimensions which are approved by the postal authorities. None of the other functions included in para 4.02 bear any remote connection to making or preparation of advertisement or for that matter, display of such advertisement. We are certainly not enthused by the attempt of the department to straightjacket the appellants into the category of Advertising Agency Service . This is not to say that activity provided by appellants does not fall under any taxable category listed out during the period of dispute in the Finance Act, 1994, but Advertising Agency Service itself they certainly are not. The impugned order to the contrary confirming the demand of service tax liability on the appellants under the category of Advertisement Agency Service cannot sustain and will require to be set aside - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1309
  Short-payment of service tax - freight charges - consulting engineering service to the concerned persons / clients as per the Slump Sale Agreement - time limitation - Held that:- When the appellant has taken up the business of NEPC, which includes assets as well as liabilities, they have to establish with concrete evidence that the liability to discharge service tax is retained by NEPC. In the present case, as agreed by the Slump Sale Agreement, the appellants have to pay up the amount to the clients under GTA service as well as Consulting Engineering Service. Therefore, they are liable to pay the service tax on these amounts under reverse charge mechanism - on merits, the apellant falls. Time Limitation - Held that:- In the present case, the services were availed by NEPC and thereafter the payments were made by appellant pursuant to the Slump Sale Agreement. It is also seen that there is no specific stipulation in the agreement with regard to the burden to discharge the service tax liability - Further, in all the letters issued by the appellant to the department, they have given the details of the payments made and also clarified that they are making the payments in accordance with Slump Sale Agreement - the appellant cannot be saddled with the guilt of suppression of facts with intention to evade payment of service tax - SCN issued extended period cannot sustain - appellant succeeds on the ground of limitation. The impugned order is set aside on the ground of limitation - Appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1308
  Works Contract service - construction services - Revenue has challenged the portion of the adjudicating order in which substantial portion of demand proposed in the show cause notice has been dropped - time limitation - Held that:- For the period prior to 01/07/2012, the classification of service was required to be done and activities carried out are to be classified under Works Contract Service. The show cause notice issued on 23/10/2013 has proposed the demand of service tax under the categories of Commercial or Industrial Construction Service as well as Erection and Commissioning Service - As such since the classification has been held to be under WCS, there is no infirmity in the findings of the adjudicating authority to the effect that the demand prior 01/07/2012 is liable to be set aside. Demand for the period commencing 01/07/2012 - Held that:- After the amendment to the Finance Act, 1994, there is no need for classification of service into various categories. The demand confirmed by the adjudicating authority for the service provided to Joint Stock Company FEAT is for the period 2012-13 and as such will be liable for payment of service tax - the liability for service tax under WCS in respect of the activity carried out to Joint Stock Company is to be re-determined after extending the benefit of abatement under Notification No. 24/2012. When said benefit is extended the ultimate demand of service will come down from Rs. 3.67 lakh confirmed by adjudicating authority - the original authority is directed to verify such payment of service tax claimed by the M/s Lattice. Appeal disposed off.

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• 2019 (2) TMI 1307
  Imposition of penalty u/s 76 of FA - malafide intent or not - Held that:- In terms of the provisions of Finance Act, if an assessee deposits the entire dues along with interest and 25% of the penalty, the penalty imposed under Section 78 is required to be reduced to 25%. However, in the present case, the appellant had already deposited 25%, though under Section 78, which penalty stands set aside by Commissioner (Appeals) - the penalty imposed under Section 76 is reduced to 25% of the same, which already stands deposited by the appellants - balance penalty is set aside - appeal disposed off.

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• 2019 (2) TMI 1306
  Commercial or Industrial construction service - benefit of N/N. 15/2004-ST dated 10.09.2004 - inclusion of free supply material by the service recipient in assessable value - Held that:- As per the judgment of Hon’ble Supreme Court in the case of Bhayan Builders [2018 (2) TMI 1325 - SUPREME COURT OF INDIA], the issue is no longer res-integra. It was held in the case that value of the goods/materials cannot be added for the purpose of aforesaid notification dated September 10, 2004, as amended by notification dated March 01, 2005 - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1305
  Taxability - Management, Maintenance and Repair of Roads for the period 2005-2006 to 2008-2009 - GTA service on reverse charge mechanism - Held that:- As regard taxability of Management, Maintenance and Repair of Roads, the same was exempted retrospectively by Section 97 of the Finance Act, 1994 - As per Section 97 the service of Management, Maintenance and Repair of Roads is exempted for the period from 16.06.2005 to 26.07.2009 where under the period of the present case is covered. Accordingly, the demand of Management, Maintenance and Repair of Roads is not sustainable and the same is set aside. GTA service - Held that:- The facts whether the consignment note was issued or otherwise has not been presented before the adjudicating authority, therefore, the matter related to GTA service needs reconsideration - matter on remand. Appeal allowed in part and part matter on remand.

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• 2019 (2) TMI 1304
  Maintenance or repair services - Benefit of N/N. 18/2005-ST dated 07.06.2005 - case of the department is that the appellant had provided service of repair and maintenance, therefore, the abatement available for commercial or industrial construction service under N/N. 18/2005-ST is not eligible to the appellant - Held that:- The facts that whether the contract was executed with the material and payment of sales tax on works contract service, have not been verified by the adjudicating authority. The adjudicating authority has decided the matter only on the ground that the service falls under the repair and maintenance service, accordingly, the abatement is not available. The matter needs to be remanded to the adjudicating authority for verifying the fact of execution of work with material and whether the same falls under works contract - appeal allowed by way of remand.

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• 2019 (2) TMI 1303
  Extended period of limitation - Technical Testing and Analysis - services provided to the other departments of Government of Gujarat - case of the department is that the appellant being provider of service of Technical Testing and Analysis, they are liable to pay service tax - Held that:- There is no dispute that the appellant are a part of the Government of Gujarat, providing services of Technical Testing and Analysis to the other departments of the same Government of Gujarat. Being a Government organization, the suppression of facts, mis-declaration, fraud, collusion, willful mis-declaration etc. cannot be alleged against the appellant for the reason that there is no individual’s interest or benefit is involved and therefore, there cannot be an intention to evade payment of service tax. In respect of service provided other than the Government agencies, the appellant were admittedly paying the service tax. Therefore, there was a bonafide belief that being a Government organization and providing service to the government departments of the same Government of Gujarat, does not attract service tax. Hon'ble High Courts and the Tribunal had taken a consistent view that in case of non-payment of duty/ tax, malafide intention cannot be alleged in the case of Government Agency - appeals are allowed on limitation only.

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• Central Excise

• 2019 (2) TMI 1302
  Issuance of show cause notice to the petitioner with regard to the same subject matter - Held that:- The action of issuance of summons was challenged on diverse grounds including being hit by legal malafides - That plea cannot be treated as infructuous, as it would go to the root of the matter and if accepted, inevitably, vitiate the exercise of authority by the competent officer. The fact remains that the writ petitions filed by the petitioner challenging the show cause notices have been transferred to Jaipur Bench for being heard on merits. In this peculiar circumstances, we deem it appropriate to grant liberty to the petitioner to raise all contentions which have been raised in SHREE CEMENT LIMITED [2019 (2) TMI 1220 - RAJASTHAN HIGH COURT] for challenging the summons - SLP disposed off.

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• 2019 (2) TMI 1301
  Excisability - exempt goods - Bagasse, pressmud and composed fertilizer produced during the course of the manufacture of sugar and molasses - period March, 2015 to June, 2017 - Rule 6 of the Cenvat Credit Rules, 2004 - Held that:- A consistent view has been taken by this Tribunal that Rule 6 of CENVAT Credit Rules, 2004 has no application in given facts - reliance placed in the case of M/s Shivratna Udyog Ltd. & Others etc. Vs. Commissioner of Customs & Central Excise [2017 (9) TMI 985 - CESTAT MUMBAI], where it was held that all the goods which are cleared without payment of amount under Rule 6(3) are either by product or waste - appeal dismissed - decided against Revenue.

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• 2019 (2) TMI 1300
  SSI Exemption - classification of manufactured goods in dispute - Polyurethane Moulded Parts of Chairs of various models and polyurethane moulded seats for motor vehicles - appellants have claimed the classification under 94019000 and 94012000 respectively - Revenue disputed the classification and has held that the classification of the same should be under 39263010 as Polyurethene moulded form seat cushion and the benefit of said notification is not available. Held that:- Chapter sub-heading 39.29 covers other articles of plastics and articles of other materials of heading 3901 5o 3914 - 3926 30 10 is a sub-heading for fitting for furniture cut work or article under chapter heading 3926 3010, pertains to such articles made of polyurethene foam. Therefore, the description given in the chapter is specifically covering the articles manufactured by the appellants. In view of the chapter note 1 (a) to Chapter 94 Section XX, these are not covered under Chapter 94. Therefore, this cannot be classified under Chapter 94 as claimed by the appellants. The learned Commissioner (Appeals) has correctly found that the products manufactured by the appellant is polyurethene form in the required shape to be used as cushion for revolving chairs are furniture, as such they do not find any entry under Chapter 94 and in views of the specific entry under Chapter 3926 30 10, the products are to be classified as held by the order-in-original/order-in-appeal. Cum-duty benefit - Held that:- The appellants are eligible for cum duty benefit - in order to verify the eligibility of the appellants for Cenvat Credit and for quantification of demand after allowing cum duty benefit, the case requires to go back to the jurisdictional Assistant/Deputy Commissioner. Penalty u/s 11AC - Held that:- The issue has already been raised by the department and Additional Commissioner vide adjudication order dated 03/08/2007 has confirmed the classification in favour of the Revenue. In spite of the same, the appellants continued to classify the impugned goods under Chapter 94. It is not brought to our notice if an appeal has been filed against the said order and if a stay was granted - Penalty upheld. Appeal allowed in part and part matter remanded.

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• 2019 (2) TMI 1299
  Reverse charge mechanism - non-payment of service tax - royalty payment to NML for the period from July 2010 and March 2011 - demand of interest - CENVAT Credit - Rule 9 of Cenvat Credit Rules, 2004 - Held that:- Appellant has submitted that the tax liability demanded in the impugned order dt. 28.02.2013 of Rs. 6,21,24,362/- is not contested by the appellant and is contesting the interest and penalty liability - the impugned order demanding the said tax liability upheld - penalty u/s 78 set aside - penalty u/s 77 upheld. Service tax on technical assistance fees which the appellants paid up although no tax was payable - remaining liability of Rs. 62,12,436/- relates to service tax on trade mark fees which also was deposited before issue of the SCN - Held that:- Appellant submits that though appellants are not contesting liability on merits, however, they are required to have discharged only Rs. 5,79,21,902/- against the demand of Rs. 6,21,24,362/- and excess amount of Rs. 42,02,460/- has been paid. The Ld. Consultant has made a prayer for remand of the matter for the limited purpose of enabling reworking of the tax liability - this is a fair request and is therefore acceded to. Demand of Interest - Held that:- Section 73 (3) of the Finance Act, 1994 provides for very similar situation where the assessee can pay up the tax liability short paid on the basis of his own assessment or being pointed by the proper officer before issue of notice on him. However Explanation (1) to sub-section clearly indicates that interest under Section 75 ibid shall also be payable on the amount so paid by the person under Section 73 (3). This being so, there is no escape from interest even when the appellants had paid up the entire tax liability before issue of SCN - demand of interest upheld. CENVAT Credit - invocation of Rule (9) (1) (bb) of CCR - Held that:- Since the tax amount of Rs. 6,21,24,362/- has been paid by them under reverse charge mechanism which specifically fits under Section 9 (e) ibid, the credit has therefore been availed by the appellants not under Rule 9 (bb) but under Rule 9 (e) of the CCR 2004 - this contention is found to be correct - There is no doubt that the demand of Rs. 6,21,24,362/- was made under the premise that the same was required to be paid under reverse charge basis. This being so, such payment will only within the ambit of Rule 9(e) ibid and not Rule 9 (bb) of the CCR 2004 - no suppression can be foisted on the appellant in respect of tax liability of Rs. 6,21,24,362/- which has been paid after being pointed out to them, before issue of SCN - the impugned order cannot be sustained and will require to be set aside. Appeal disposed off.

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• 2019 (2) TMI 1298
  Import of batteries to be used for manufacture of mobile handsets and similar phones - actual user condition - benefit of N/N. 21/2005 dated 1.3.2005 superseded by Notification No.23/2010 dated 27.2.2010 denied - entire case of the Revenue is that the batteries imported by the appellants were not used in the process of manufacture of the finished goods viz., mobile phones or other phones, hence cannot be treated as the parts and accessories of the said mobile phones or other phones - Held that:- This Tribunal has consistently held in its various decisions that when mobile/other phones cannot work without batteries, they are to be considered as parts of the mobile phones - reliance placed in the case of CC (Imports) Chennai vs. Vuppalamrita Magnetic Components Ltd. [2016 (5) TMI 989 - CESTAT CHENNAI] - thus, the imported batteries are essentially parts and accessories of the mobile phones and the benefit of exemption under Notification 21/2005 dated 1.3.2005 is admissible to them - decided in favor of appellant. Denial of benefit alos on the ground that while filing the Bill of Entry, appellants have shown the address of the premises which was not the same as the premises in respect of which the Bond was executed - Held that:- N/N. 21/2005 itself is admissible on the basis of the certificate given by the jurisdictional officer and in terms of Bond executed before him. When the certificate was issued for a particular premises and a Bill of entry filed indicating some wrong address of the same person, the error in mentioning address cannot be anything but a clerical error - Because the certificate indicating the correct address was part of the assessment documents. The error in address subsequently been rectified also. It is not the case of the Department that the goods were not received in the premises where they were meant for. It is also not the case that goods have not been duly accounted for. In his order the Asst. Commissioner has only stated that records for accountal and assessments were not produced before him. If such records were required, Asst. Commissioner could have called for a report on verification of receipt and usage of the said goods and thereafter, adjudicated the matter - adjudicating authority should afford an opportunity to the appellants to produce the documents with records to receipt and accountal of the said goods in the premises where the Bond have been executed and thereafter, take a final view with regards to the admissibility of benefit of exemption Notification. The matter remanded back to the adjudicating authority for consideration of the documents with regards to receipt and usage of the goods at the premises for which the Bond was executed - appeal allowed by way of remand.

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• 2019 (2) TMI 1297
  CENVAT Credit - inputs, capital goods as well as input services relating to the electricity that is wheeled out to TNEB - extended period of limitation - Held that:- The Hon’ble Supreme Court in the case of Maruti Suzuki Ltd. [2009 (8) TMI 14 - SUPREME COURT] has held that the credit in respect of input services which is used for electricity that is sold outside is not eligible for credit. Applying this decision, the appellant does not have a case on merits. Extended period of limitation - Held that:- The department has no case that the appellant had not disclosed the credit availed in their ER-1 returns. Further, the appellant has reversed the entire credit on 31.1.2011. All these would go to show that there was no intention to evade payment of duty or tax less any positive act of suppression on the part of the appellant - the department has miserably failed to establish with cogent evidence that the appellant is guilty of suppression of facts with intention to evade payment of duty so as to invoke the extended period of limitation. The show cause notice issued to the appellant is time-barred. Appeal succeeds on limitation.

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• 2019 (2) TMI 1296
  100% EOU - Valuation - turbo charger components, machined castings, tools / jigs / fixtures - similar goods or not - bearing housing and turbine wheel assembly and components - concessional rate of duty under N/N. 23/2003-CE dated 31.3.2003 - DTA clearance - Held that:- On perusal of N/N. 23/2003-CE, it is found that there is no such conditionality that the goods are to be produced or manufactured wholly from the raw materials produced or manufactured in India. In fact, such requirement is found only in condition 3 which in any case is not sought to be availed by the appellant. This being so, this ground for denial of the benefit is not sustainable. Requirement of taking prior permission from jurisdictional Customs / Central Excise authority for DTA sale of goods - Circular 12/2005-Cus. dated 4.3.2005 - Held that:- The Circular states that EOUs are not required to take permission from the jurisdictional customs/central excise authority for DTA sale of goods. The units may sell the goods on payment of duty as per the conditions and entitlements as specified in Foreign Trade Policy - the above CBEC clarification will fully apply and hence the denial of benefit will also not succeed. Denial of notification benefit also denied on the ground that the goods cleared in DTA are not similar to the goods exported by the appellant - Held that:- There is no doubt that the appellant had exported bearing housing whereas the goods to be cleared into DTA seeking benefit of Notification 23/2003 was turbo wheel assembly. While, the adjudicating authority has been at pains to cite the difference in characteristics and function of these two items, the fact remains that both of them are components of turbo charger and hence will surely fall under the broad banded term turbo charger components which is the export product as per the EOU/green card issued to the appellant by the Development Commissioner. Hence when the permission granted to appellant has not listed any specific components of a turbo charger but instead has only indicated export product as 12,50,000 nos. of turbo charger component which was even subsequently enhanced to 32,00,000 nos. of turbo charger components, the appellant cannot then be said to have caused a breach of the conditions. The impugned order in this regard cannot then sustain - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1295
  100% EOU - return of damaged goods - goods were damaged in transit while they were taken out for export - Granite slabs - demand of duty - case of appellant is that as the goods were not cleared to DTA, they are not liable to pay duty - Held that:- The Tribunal in the case of Tab India Granites (P) Ltd. [2017 (8) TMI 1161 - CESTAT CHENNAI] had occasion to consider the very same issue set aside the demand - demand set aside - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1294
  CENVAT Credit - input service - commission paid to their foreign commission agent as a service recipient - Held that:- This Tribunal in the case of Stanely Seating [2017 (1) TMI 972 - CESTAT BANGALORE] has held that the assessee is entitled to CENVAT credit on sales commission - credit allowed - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1293
  CENVAT Credit - common inputs used in taxable as well as exempt activity - non-maintenance of separate records - Rule 6 of the CENVAT Credit Rules, 2004 - Held that:- The appellant has already reversed the proportionate CENVAT credit in terms of Rule 6(3)(ii) read with Rule 6(3A) and therefore, he is not required to pay 5% / 6% of the value of the exempted service as demanded by the Commissioner (A) - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1292
  CENVAT Credit - input services - change of land use - topographical survey - consultancy of environmental issue - Held that:- Although the services of setting up of a new factory has been excluded from inclusive part of the definition and particularly excluded the service portion of execution of works contract and construction services which includes A construction execution of works construction building for civil construction or lying the foundation or making the structure for support of capital goods. It does not mean that the other services used for setting up for a new factory, the credit is not available. The service in question has been used by the appellant for setting up of a factory and without setting up of the factory the appellant is not able to manufacture their final product. In that circumstances, the services used by the appellant are the part of the means part of the definition of input service. Moreover these services have not been excluded from the definition of input service specifically. Credit allowed - appeal allowed - decided in favor of appellant.

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• 2019 (2) TMI 1291
  CENVAT Credit - input and input services which has been used for manufacture of dutiable as well as the exempted goods - non-maintenance of separate records - Rule 6(3) of Central Excise Rules, 2004 - demand of 10% of the valuable exempted goods - time limitation - Held that:- There is no dispute that the appellant is not entitled to avail Cenvat credit on common input/input services to be used in manufacture of exempted as well as dutiable goods in terms of Rule 6(3) of Central Excise Rule, 2004. Time Limitation - Held that:- Initially, in 2007 the appellant was manufacturing only dutiable goods but in August 2007 the appellant started manufacturing exempted goods also apart from dutiable goods and was availing Cenvat credit on common inputs and input services for manufacturing both dutiable exempted final goods and not reversing the proportionate Cenvat credit attributable to exempted goods or paying 10% of the valuable exempted goods. These facts were also available during the course of audit conducted during the period 16th/17th April 2008 and no objection was raised by the Revenue - the show cause notice is rightly issued to the appellant by invoking the extended period of limitation. The appellant is required either to reverse the proportionate Cenvat credit attributable to exempted final product or to pay 10% of the value of exempted final product for the period 17.05.2009 till date 31.03.2011 along with interest - penalty not invocable - appeal allowed in part.

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• CST, VAT & Sales Tax

• 2019 (2) TMI 1290
  Condonation of delay in filing revision - proceedings taken by the AO for rectifying an apparent mistake that occurred in the order of the AO - Held that:- The proceedings taken by the AO was not at all relevant for filing a revision from the order of the Tribunal dated 30.08.2016. It is also pertinent that it was not the AO's duty to file an appeal. The Deputy Commissioner (Law) is the proper person to decide as to whether an appeal is to be filed or not. On arriving at such an opinion, the Deputy Commissioner usually makes a request to the Advocate General's office, on which the Special Government Pleader (Taxes) takes a call as to whether the appeal has to be filed or not. The Deputy Commissioner (Law) would not have been apprised of the proceedings taken by the AO; nor is that necessary. A mistake in TIN number would not disentitle the filing of a revision before this Court. The filing of an appeal is also the responsibility of the Deputy Commissioner (Law) and not of the AO - the application for delay condition is rejected.

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• 2019 (2) TMI 1289
  Cancellation of registration of the petitioner - validity of assessment proceedings - Held that:- In view of the fact that the petitioner had already filed returns till the month of November, 2018 and in view of the fact that said returns can be filed till the end of 31.03.2019 as per notification Nos.21 and 22 of 2019 and considering the fact that the petitioner has to file the monthly return only for December, 2018, this Writ Petition is disposed of with the direction that petitioner shall file their monthly return for December, 2018, within a period of two weeks from the date of receipt of a copy of this order along with the application for restoration of registration.

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• Indian Laws

• 2019 (2) TMI 1288
  Arbitration proceedings - petitioner refused to participate in the arbitration proceedings - Enforceability of a foreign award - sale of Non Basmati Parboiled Rice, Thailand origin - whether it was open to the petitioner to raise grounds regarding enforceability of the foreign awards despite the judgment of the High Court in SLEEPWELL INDUSTRIES CO. LTD. VERSUS LMJ INTERNATIONAL LTD. [2014 (12) TMI 1339 - CALCUTTA HIGH COURT] rejecting the objections in the context of maintainability of the execution petition and which decision had attained finality consequent to rejection of the special leave petitions by this Court and including the review petition by the High Court? Held that:- The grounds urged by the petitioner in the earlier round regarding the maintainability of the execution case could not have been considered in isolation and de hors the issue of enforceability of the subject foreign awards. For, the same was intrinsically linked to the question of enforceability of the subject foreign awards. In any case, all contentions available to the petitioner in that regard could and ought to have been raised specifically and, if raised, could have been examined by the Court at that stage itself. We are of the considered opinion that the scheme of Section 48 of the Act does not envisage piecemeal consideration of the issue of maintainability of the execution case concerning the foreign awards, in the first place; and then the issue of enforceability thereof. Whereas, keeping in mind the legislative intent of speedy disposal of arbitration proceedings and limited interference by the courts, the Court is expected to consider both these aspects simultaneously at the threshold. Taking any other view would result in encouraging successive and multiple round of proceedings for the execution of foreign awards. We cannot countenance such a situation keeping in mind the avowed object of the Arbitration and Conciliation Act, 1996, in particular, while dealing with the enforcement of foreign awards. For, the scope of interference has been consciously constricted by the legislature in relation to the execution of foreign awards. Therefore, the subject application filed by the petitioner deserves to be rejected, being barred by constructive res judicata, as has been justly observed by the High Court in the impugned judgment. The special leave petitions are dismissed with exemplary costs, quantified at an aggregate amount of Rs. 20,00,000/-.

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• 2019 (2) TMI 1287
  Auction of the property when the tenanted premises were occupied by the petitioner's late mother at an an advanced age of over 83 years - permit to stay in the said property - Validity of CBDT's instructions dated 19.07.1993 - permission to negotiate and acquire the property bearing address A-3/4, Vasant Vihar, New Delhi - Held that:- This Court did not interfere with the this Court's view that the protection envisaged under the Delhi Rent Control Act, 1956 was not available in respect of the property and that the petitioner (Smt Shiela Sen Gupta) could be evicted by following the procedure under the Public Premises (Eviction of Unauthorized Occupation) Act, 1971. However, keeping in view her advanced age, the court permitted the petitioner's mother to continue to occupy the premises for a further period of two years from the date of the order. This order concluded the first round of litigation - There is clearly no dispute that the lease in respect of the tenanted premises had expired and the petitioner's parents were unauthorised occupants of the said property. They were, however, continuing to occupy the tenanted premises under protection of the Delhi Rent Control Act, 1956, which was no longer applicable with respect to the property being purchased by the appropriate authority. This Court clearly rejected the contention that the CBDT's instruction dated 19.07.1993 was arbitrary or unreasonable. It is also apparent from the plain reading of the aforesaid order that this Court did not accept that the petitioner therein had any rights in respect of the said property and expressly clarified that the observations made by the Court would not confer any advantage on the petitioner therein or release her from the undertaking she had furnished. The petitioner's mother expired on 01.01.2016. Thereafter, the petitioner continued to pursue the Appropriate Authority for information regarding disposal of the property - The petitioner has filed the present petition as the Income Tax Department continues to use the said property without any immediate timelines to dispose of the same. Insofar as the challenge to the CBDT's Policy (CBDT's Instructions dated 19.07.1993) is concerned, the said issue is no longer res integra. The challenge to the same had been rejected by the Division Bench of this Court in its order dated 07.07.2014, which was subsequently upheld by the Supreme Court in its order dated 03.08.2015. The petitioner's endeavour to once again re-litigate the issues is clearly an abuse of the process of law. This Court is of the view that the present petition is an abuse of the process of this Court and such speculative petitions, which are clogging the docket of this Court, ought to be discouraged - the present petition is dismissed with costs quantified at Rs. 50,000/-.

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