TMI Tax Updates - e-Newsletter
February 26, 2024

Case Laws in this Newsletter:

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

Articles

• LATEST AMENDMENTS TO ‘IBBI (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016
• 100 % Penalty cannot be Imposed if Show Cause Notice is issued under section 73
• INPUT SERVICE DISTRIBUTOR IN GST & CHANGES BY FINANCE ACT, 2024
• Department to serve Notice through other modes of communication if Assessee fails to respond to communication sent through E-mail

Notifications

DGFT

• 61/2023 - dated 23-2-2024 - FTP
  Extension in Import Period for Yellow Peas under ITC (HS) Code 07131010 of Chapter 07 of ITC (HS), 2022, Schedule -l (Import Policy)

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GST - States

• S.O. 49 - dated 12-1-2024 - Jammu & Kashmir SGST
  Seeks to amend Notification No. SRO-GST 15/2017, dated the 08th July, 2017

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• S.O. 48 - dated 12-1-2024 - Jammu & Kashmir SGST
  Seeks to amend Notification No. SRO-GST11/2017, dated the 08th July, 2017

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• S.O. 47 - dated 12-1-2024 - Jammu & Kashmir SGST
  Amendment in Notification No. SRO-GST 12/2017, dated the 08th July, 2017

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• S.O. 45 - dated 12-1-2024 - Jammu & Kashmir SGST
  Seeks to amend Notification No. SRO-GST 2/2017, dated the 08th July, 2017

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• 04/2024-State Tax - dated 21-2-2024 - Maharashtra SGST
  Seeks to notify special procedure to be followed by a registered person engaged in manufacturing of certain goods.

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• 03/2024-State Tax - dated 21-2-2024 - Maharashtra SGST
  Seeks to rescind Notification No. 30/2023- State Tax, dated the 22nd August, 2023

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SEZ

• S.O. 844 (E) - dated 23-2-2024 - SEZ
  Central Government de-notifies an area of 4.4723 hectares at Village Gwal Pahari, Gurugram in the State of Haryana

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Highlights / Catch Notes

GST

• Jurisdiction of Superintendent to pass the order - Monetary limit - The High Court noted that, the circular dated 9.2.2018 limited the power of the Superintendent, Central Goods and Service Tax & Central Excise to matters not exceeding Rs. 10,00,000/-. However, the amount involved in the present case exceeded Rs. 16,00,000/-. - Consequently, the court found the impugned order to be without jurisdiction and set it aside, granting liberty to the respondents to proceed afresh in accordance with the law.
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• Levy of penalty - e-way bill had expired four days prior to the date of detention - existence of mens rea - The High Court found no evidence of intent to evade tax in the present case, considering the accompanying documents and the explanation for the delay in movement. - The failure to extend the e-way bill was viewed as a technical breach, insufficient for penalty under Section 129(3) of the Act.
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• Cancellation of GST registration of the Petitioner with retrospective effect - The High Court in view of the above facts that Petitioner does not seek to carry on business or continue with the registration, the impugned order dated 14.03.2023 is modified to the limited extent that registration shall now be treated as cancelled with effect from 15.08.2021 i.e., the date of the death of the assessee. - Regarding refund, the High Court clarified tahat the petitioner can make an application to claim amounts standing to the credit of the predecessor and directs concerned authorities to consider it in accordance with the law.
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• Rectification of DRC-3 - Entitlement to concessional rate of tax without ITC for new projects and unsold units of existing projects post 1st April 2019 - requirement to reverse ITC - The court recognized the bona fide mistake made by the petitioner in mentioning the financial year in Form DRC 03 and directed the tax authorities to permit rectification of the error.
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• Cancellation of GST registration - non-furnishing of returns - The High court interfered with the cancellation of GST registration, considering the petitioner's circumstances and willingness to comply with statutory requirements. The petitioner was directed to pay outstanding dues, and upon fulfillment of conditions, the registration would be restored.
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• Condonation of delay in filing an appeal before the Appellate Authority - Assessment of unregistered person - Ignoring the Registration Certificate already assigned - Benefit of notification extended to the assessees who suffered with demand as a result of assessment under Section 73 and Section 74 of the GST Act. But despite the fact that the petitioner is a registered and has been assessed under Section 63 of the GST Act by way of erroneous exercise of jurisdiction, such benefit would not be extended to the petitioner. - The High Court held that, there is glaring mistake in jurisdictional fact. - Matter restored back.
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Income Tax

• Collection of TCS u/s 206C - Sale of tendu leaves at the second stage whereas in the first stage the tendu leaves were sold on the Govt Undertaking - The ITAT observed that the assessee has collected Form no. 27BA as per Rule 37J and form 27C as per rule 37C from all the six parties copies of which are placed at page 31 to 48 of PB stating that they were engaged in business of manufacturing of Bidies and the tendu leaves were to be used for the purpose of manufacturing units and not for the purpose of trading. - AO directed to delete the demand by holding that the provision of TCS u/s 206C of the Act are not applicable to the assessee. The appeal of the assessee is allowed.
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• Assessment u/s 153A - Addition of cash deposits in bank account and savings bank account interest - The ITAT held that the additions related to cash deposits and savings bank interest were unsustainable as there was no incriminating material found during the search.
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• Validity of assessment order not bearing Document Identification Number (DIN) - The ITAT held that, there is no dispute that both the assesssment order and the Intimation were uploaded on 30/11/2021. That apart, notice of demand u/s. 156 of the Act dated 30.11.2021, manually signed, as is the assessment order, forms part of the appeal file itself. This is in complete conformity with the Board Circular supra. What, then, is the assessee’s grievance? Rather, the Intimation and the order being displayed on the Revenue’s portal, the objection is not only invalid but also unfortunate.The assessee’s appeal for AY 2015-16 is accordingly dismissed.
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• Disallowance of exemption claimed u/s 54EC - non filling ROI - investment made in REC - assessee has neither filed return of income u/s 139(1) of the Act, nor in response to the notice issued u/s 148 - The tribunal concluded that for claiming exemption under section 54EC of the Income Tax Act, it is not mandatory to file a return of income. - Even at the time of hearing the Ld. DR has not brought our attention to such provision of the Act, suggesting that it is mandatory, for claiming exemption u/s 54EC of the Act, to file the return of income. - AO directed to allow the benefit of exemption.
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• Assessment u/s 153A - Addition based on the valuation report - completed assessment - nature of material found in the course of search which led to impugned additions - The Tribunal held that the addition made towards the alleged difference in cost of construction made in the order of the assessment deserves to be deleted as the addition on cost of construction is based on valuation report which is in the realm of estimations without any nexus to any incriminating documents per se. Hence, in the absence of any incriminating material found, therefore, we see no perceptible reason to confirm the addition and therefore, the same is directed to be deleted.
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• Levy of penalty u/s 234E - delay of 484 days in filling Form No. 26Q (TDS Return) - technical glitches on the part of the system - The ITAT allowed the appeals, focusing on the legal and technical nuances presented. The tribunal found that the appeals were filed within the extended limitation period provided by the Supreme Court due to the COVID-19 pandemic. It also highlighted that the technical issues faced by the assessee in filing TDS returns were not considered by the CIT(A), which led to an unjust imposition of late fees.
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• Validity of Revision u/s 263 - Admisibility of Deduction u/s 80P, Deduction from total income under chapter VI-A and business expenses - The ITAT quashed the order passed under section 263 of the Income Tax Act by the PCIT, essentially allowing the appeal in favor of the assessee. The Tribunal concluded that the AO had made the necessary inquiries and verifications, and therefore, the PCIT's revision under section 263 was not warranted.
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• Adjustment of "seized asset" against "existing liability" and levy of "interest u/s 234B" - outer time period of 120 days - The ITAT held that Ld AO miserably failed to adhere to the provisions of section 132B[1] and the CIT [A] is not justified in confirming the interest charged u/s. 234B of the Act for the period up to 15-09-2010. Therefore AO directed to rework the computation in accordance with the provisions of law after providing proper opportunity of hearing to the assessees. - However, ITAT the claim concerning the grant of interest on seized assets u/s 132B(4), agreeing with the lower authorities that FDRs do not qualify as "money" for the purpose of interest entitlement.
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Customs

• Seeking refund the pre-deposit along with applicable interest - recovery of cash and seizure of goods of foreign origin - contravention of EXIM Policy - The High court concludes that the petitioner is entitled to interest on the entire amount deposited, including the redemption fine and penalty, as the revenue authority retained the amount without any legal right.
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• Waiver of detention and demurrage charges - seeking relief for release of the imported machinery for home consumption - classify the goods under Chapter 90 as Runway Friction Measuring Machine - The court ruled in favor of the petitioner, directing the respondents to release the friction testing machine for home consumption within a week, subject to furnishing a bond for payment of differential duty if the department succeeds in its appeal. The court also directed the waiver of demurrage and detention charges and stated that the release would be without prejudice to the respondents' rights in their appeal.
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• Imposition of penalty and confiscation/redemption fine - repairing works for risers and pipes - repair activity done at DTA location instead of designated EOU location - violation of TSA bond furnished by ONGC - The Tribunal held that, Section 111(J) comes into operation only when goods are removed from the customs area or warehouse without permission or contrary to the permission already granted. It does not deal with the warehouse goods in transit with which the above regulations i.e. Warehoused Goods (Removable) Regulations, 1963 have been provided and which make the goods dutiable in the hands of persons executing bond for any violation of conditions of bond. - As far as appellants are concerned, if intention was to evade service-tax, then show cause notice should have been issued under relevant provisions including penal provisions of Finance Act, 1994.
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• Classification of imported goods - electrical machines or Apparatus - ''Student interactive respond system'' under CTH 8471 60 29 - The Tribunal confirmed the order of Commissioner that the equipments are teaching accessories which enable students in a class to respond to queries and these equipments are used along with the ADP machine. Considering the above and the fact that similar items being cleared under CTH 8471 at Hyderabad and Chennai organizations as seen from the Bill of Entry placed before us, there is no merit in the Department Appeal and the same is rejected.
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• Classification of imported goods - 474.860 MTs of imported goods, namely, Petroleum Hydrocarbon Solvent (125/240) Grade M.T.O - the test report dated 03.03.2016 of Customs Laboratory, Kandla provides that 90% of goods by volume get distilled at 195 degee C, i.e. below 210-degree C followed by 95% distillation at 207-degree C. - The tribunal agreed with the appellant's interpretation, following legal precedents and rejecting the department's classification. - Interpreting at in the Chapter note as “upto” the benefit was allowed by classifying the goods under Customs Tariff Heading 2710 1990.
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• Classification of ‘NIKON Camera Model N2120’ with standard accessories - Classification under CTH 8525 89 00 with benefit of Notification No. 50/2017-Cus - The applicant has submitted that the device is not launched commercially in India and requested to ensure maintenance of its confidentiality - The AAR ruled that, the same is correctly classifiable under sub-heading 8525 89 00 The benefit of exemption is available to the importer.
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Indian Laws

• Right to Terminate Agreement - delay in the delivery of possession of the apartment - The Supreme Court held that, there are no hesitation in holding that the NCDRC overstepped its power and jurisdiction in ignoring the binding covenants in the Agreement and in introducing its own logic and rationale to decide as to what the future course of action of the parties and more particularly, the appellants, should be - as it is informed that the appellants did not choose to act upon the belated offer of the respondent-company, in its letter dated 29.11.2017, and are still intent on terminating the Agreement as per Clause 11.3 of the Agreement, we set aside the order dated 09.11.2022 passed by the NCDRC and allow Consumer Complaint No. 35 of 2018, directing the respondent-company to refund the deposited amount with interest.
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• Contempt application preferred by the appellant alleging non-compliance of order passed by the learned Single Judge of the High Court - entitlement to refund of the excess payment made by the petitioner - The Supreme Court held that, the learned Single Judge was not justified in discharging the respondents in the contempt case without ensuring payment of the refund amount with interest to the appellant herein. - The Court grants relief to the appellant, directing the respondents to refund the excess amount paid with interest at the rate of 12% per annum for specified periods, and imposes a deadline for compliance with the order.
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• Access to Technology in Courts - Hearings through hybrid mode or video conferencing - Lack of Uniformity - Infrastructure and Connectivity - The Supreme Court held that, the use of technology by the Bar and the Bench is no longer an option but a necessity. Members of the Bench, the Bar and the litigants must aid each other to create a technologically adept and friendly environment. - The court issued a series of directions aimed at addressing the identified issues and ensuring the effective implementation of technology in court proceedings.
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• Dishonour of Cheque - exercise of discretion rationally, by the Trial Court for award of interim compensation - The court underscores that Section 143A is directory, not mandatory, and the trial court has discretion in awarding interim compensation. It mandates reasons for such an award, particularly if the accused's conduct includes delay tactics. - The trial court is justified in expecting cooperation from the accused for a speedy trial and can consider non-cooperation as a factor for interim compensation.
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Service Tax

• Extended period of limitation - liability of a subcontractor to pay service tax - The High court concluded that the interpretation issue regarding subcontractor liability was unsettled until a later decision in 2019. Therefore, the respondent's actions were considered bona fide, and the failure to disclose the payment of service tax did not constitute suppression of facts. - Consequently, the court upheld the Tribunal's decision to remit the case back to the Commissioner without invoking the proviso to extend the period of limitation.
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• Levy of service tax - body corporate - interest income under the head “Lease and Equipment Finance Income” - interest income-rental - interest income-funding - The Tribunal found that the service tax demand, interest, and penalties were based on a misinterpretation of the nature of transactions undertaken by the appellant. Teh CESTAT held that the appellant's services did not strictly fall within the definition of “banking and other financial services” as they did not provide financial leasing in the manner defined under the Act.
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• Demand of service tax - Franchise service (reverse charge) - Revenue Sharing Agreement - Instead for every student enrolled in a course, Centennial College, Canada gets a specified amount as a share of the fees. - The tribunal held that the agreement between the appellant and Centennial College, Canada, was determined to be a typical revenue sharing model rather than a franchise service. Therefore, it did not fall within the ambit of taxable franchise services under the reverse charge mechanism.
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• Condonation of delay in filing appeal before the Commissioner (Appeals) - Dismissal of appeal on the ground that the appeal was delayed by thirty three days - exclusion of the period during which the matter was pending before the High Court. - The Supreme court found merit in the appellant's argument and held that the delay in filing the appeal should be condoned under the proviso to sub-section 3A of Section 85 of the Finance Act, 1994. Consequently, the impugned orders were set aside, and the matter was restored to the file of the Commissioner (Appeals)
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Central Excise

• Denial of CENVAT Credit - inputs/capital goods or not - HR, MS and SS plates received and utilized during 2003 to 2005 for setting up of Copper III plant - The Tribunal held that, all that the said rule requires is whether such capital goods are used for manufacture of excisable goods in the factory. Once this requirement is satisfied, the fact that such capital goods came into existence as an immovable property is irrelevant or immaterial to avail Cenvat Credit. - The Appellants have availed Cenvat credit on H.R. M.S. & S.S. plates used in the fabrication of supporting structures of capital goods. There are cetena of decision wherein it has been held that the credit of steel used to support capital goods is eligible for credit.
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Case Laws:

• GST

• 2024 (2) TMI 1183
  Jurisdiction of Superintendent to pass the order - Monetary limit - jurisdiction to various authorities in relation to the maximum amount of Central Tax not paid or short paid or erroneously refunded or input tax credit of central tax wrongly availed or utilized - HELD THAT:- It is stated that according to the circular dated 09.02.2018, power of the Superintendent, Central Goods and Service Tax Central Excise is limited to the matter not exceeding Rs. 10,00,000/- and in the present case the amount involved is more than Rs. 16,00,000/- and consequently, the impugned order passed by it is without jurisdiction. Evidently the impugned order dated 20.11.2023, as contained in Annexure No.1 to the writ petition, is without jurisdiction and is accordingly set aside. Liberty is granted to the respondents to proceed afresh in accordance with law. Petition allowed.

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• 2024 (2) TMI 1182
  Validity of assessment order - proceedings were initiated against the petitioner by issuing an intimation and show cause notice - exercise of discretionary jurisdiction - HELD THAT:- The assessing officer had dropped proceedings in respect of the tax liability arising out of alleged discrepancy between the GSTR-1 and GSTR-3B returns and RCM on inward supply, whereas the revenue abstract at the foot of the order specifies liability in respect of these heads. Thus, the impugned assessment order suffers from non application of mind resulting in patent errors. For such reason, the impugned assessment order warrants interference. The impugned assessment order is quashed and the matter is remanded for re-consideration. The respondent is directed to provide a reasonable opportunity to the petitioner, including a personal hearing, and thereafter issue a fresh assessment order within a maximum period of two months from the date of receipt of a copy of this order. Petition allowed by way of remand.

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• 2024 (2) TMI 1181
  Levy of penalty - e-way bill had expired four days prior to the date of detention - existence of mens rea - HELD THAT:- This Court in M/S. HINDUSTAN HERBAL COSMETICS VERSUS STATE OF U.P. AND 2 OTHERS [ 2024 (1) TMI 282 - ALLAHABAD HIGH COURT] held that mens rea to evade tax is essential for imposition of penalty. The factual aspect in the present case clearly does not indicate any mens rea whatsoever for evasion of tax. The goods were accompanied by the relevant documents and the explanation of the petitioner with regard to slow movement of the goods coupled with GPS tracking system clearly indicate that the truck was moving slowly due to mechanical fault in the engine of the vehicle. This factual aspect should be considered by the authorities below. The breach committed by the petitioner with respect to not extending time period of the e-way bill is only a technical breach and it cannot be the sole ground for penalty order being passed under Section 129(3) of Act. The finding of the authorities with regard to intention to evade tax is not supported by the factual matrix of the case, and accordingly, the impugned orders dated April 6, 2022 and June 22, 2022 are quashed and set aside - This Court directs the respondents to refund the amount of tax and penalty deposited by the petitioner within a period of four weeks from date. Petition allowed.

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• 2024 (2) TMI 1180
  Violation of principles of natural justice - further opportunity of hearing not provided - ex-parte order - HELD THAT:- Whatever be the correct fact as to the status of proceedings conducted on 06.11.2023, the order does not make any mention of the same. It is equally true that the assessing authority did not pass any order on the date fixed i.e. 06.11.2023. Instead he has chosen to pass the order on 20.11.2023, 14 days thereafter. Neither the impugned order nor the instructions of the learned Standing Counsel indicate that any date was fixed for 20.11.2023. Without fixing any further date and without giving petitioner any further opportunity the impugned order has been passed. Rules of natural justice ensure fairness in proceedings. Once the authority had fixed the matter for hearing on 06.11.2023 it was incumbent on that authority either to pass the order or to fix another date and communicate the same to the petitioner. Communication of the other date was necessary as according to the assessing authority the petitioner failed to appear before it on the date fixed on 06.11.2023 - In absence of any provision under the Act to allow for ex-parte proceedings to arise in such facts, it is found that the breach of natural justice pressed by the petitioner is real. The short time of five days granted by the notice dated 13.06.2023 itself suggests the unnecessary hurry in which the proceedings were sought to be concluded. In any case since no order was passed on 06.11.2023 and no notice was issued for the next date 20.11.2023, we find that the proceedings had been wrongly concluded ex-parte against the petitioner. The order dated 20.11.2023 is set aside. The petitioner may treat the said order to be the final notice issued to him. It may file its reply together with all supporting documents within a period of two weeks from today - petition disposed off.

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• 2024 (2) TMI 1179
  Cancellation of registration has been passed without any application of mind - time limitation - HELD THAT:- In the present case, the facts are similar to one in SURENDRA BAHADUR SINGH VERSUS STATE OF U.P. THRU. PRIN. SECY. COMMERCIAL TAX (GST) LKO. AND 2 OTHERS [ 2023 (8) TMI 1262 - ALLAHABAD HIGH COURT] , wherein the appeal was barred by time under Section 107 of the Act. However, the Division Bench in Surendra Bahadur Singh's case took into consideration the original order and set aside the same being non-reasoned and allowed the petitioner therein to file reply to the show cause notice. The order in original dated December 22, 2022 and the appellate order dated December 27, 2023 are quashed and set aside - Petition allowed.

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• 2024 (2) TMI 1178
  Cancellation of GST registration of the Petitioner with retrospective effect - Death of the assessee - Refund of the amount standing to the credit of the predecessor / assessee - failure to furnish returns for a continuous period of six months - SCN fails to specify any cogent reason for cancellation - violation of principles of natural justice - HELD THAT:- In terms of Section 29(2) of the Act, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period. Although, it is not considered apposite to examine this aspect but assuming that the respondent s contention in required to consider this aspect while passing any order for cancellation of GST registration with retrospective effect. Thus, a taxpayer's registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. In view of the above facts that Petitioner does not seek to carry on business or continue with the registration, the impugned order dated 14.03.2023 is modified to the limited extent that registration shall now be treated as cancelled with effect from 15.08.2021 i.e., the date when Sh. Pawan Kumar passed away. Petitioner shall furnish the details as required by Section 29 of the Act. Petition disposed off.

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• 2024 (2) TMI 1177
  Cancellation of GST registration of the petitioner with retrospective effect - show cause notice is ex facie defective as the same does not contain any details or quantum of wrongful availment of Input Tax Credit or any refund claimed on the said account or reasons - violation of principles of natural justice - HELD THAT:- In terms of Section 29(2) of the Central Goods and Services Tax Act, 2017, the proper officer may cancel the GST registration of a person from such date including any retrospective date, as he may deem fit if the circumstances set out in the said sub-section are satisfied. Registration cannot be cancelled with retrospective effect mechanically. It can be cancelled only if the proper officer deems it fit to do so. Such satisfaction cannot be subjective but must be based on some objective criteria. It is important to note that, according to the respondent, one of the consequences for cancelling a taxpayer s registration with retrospective effect is that the taxpayer s customers are denied the input tax credit availed in respect of the supplies made by the tax payer during such period - Thus, a taxpayer s registration can be cancelled with retrospective effect only where such consequences are intended and are warranted. It is clear that both the petitioner and the respondent want the GST registration to be cancelled, though for different reasons. The order of cancellation is modified to the extent that the same shall operate with effect from 01.02.2021, i.e., the date on which the petitioner discontinued business - Petition disposed off.

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• 2024 (2) TMI 1176
  Availment of wrongful input tax credit - case of petitioner is that he had applied for cancellation of his DVAT Act Registration and never applied for migration to the GST Scheme - HELD THAT:- Respondent No.3 prays for some more time to take instructions. Respondent No.3 shall place on record the documents and material available in their record with regard to the alleged migration of the petitioner from DVAT to GST Scheme. At request, list on 21.02.2024. In the meantime further proceedings on the Show Cause Notice shall remain stayed.

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• 2024 (2) TMI 1175
  Rectification of DRC-3 - Entitlement to concessional rate of tax without ITC for new projects and unsold units of existing projects post 1st April 2019 - requirement to reverse ITC, in terms of the said Notification No. 3/2019, pertaining to unsold units as on 31st March 2019 as per Rule 42 of the CGST Rules - it is the case of Petitioner No. 1 that it would be immaterial as to for which period Petitioner No. 1 had reversed the ITC or made payment of GST for such ITC utilised on unsold units as on 31st March 2019 - HELD THAT:- Petitioner No. 1 has made a bona fide mistake in Form DRC 03 dated 26th August 2022 and 1st September 2022. Petitioner No. 1 had inadvertently shown the year as Financial Year 2019-20 instead of Financial Year 2018-19. As correctly submitted by Petitioner No. 1, the fact, that the there was a bona fide mistake, was clear from the narration in the said Form DRC 03. Further, as rightly submitted by Petitioner No. 1, in Financial Year 2019-2020, Petitioner No. 1 was not entitled to avail of any ITC and had not availed of any ITC, and, consequently, there was no question of ITC for Financial Year 2019-20 being reversed by Petitioner No. 1. The Division Bench of this Court, in STAR ENGINEERS (I) PVT. LTD. VERSUS UNION OF INDIA, STATE OF MAHARASHTRA AND DEPUTY COMMISSIONER OF STATE TAX-GST [ 2023 (12) TMI 729 - BOMBAY HIGH COURT ], has held that a bona fide inadvertent error in furnishing details in a GST return need to be recognised, and ought to be permitted to be corrected by the Department, when, in such cases, the Department is aware that there is no loss of revenue to the Government. This Court further held that such free play in the joints requires an eminent recognition and that the Department needs to avoid unwarranted litigation on such issues, and make the system more assessee friendly. Applying the ratio of the aforesaid judgment, in the present case also, since the error made by the Petitioner No. 1 is a bona fide error, the Department is required to be directed to permit Petitioner No. 1 to rectify the said error. In these circumstances, there are no doubt that this Petition is required to be allowed - petition allowed.

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• 2024 (2) TMI 1174
  Cancellation of GST registration - non-furnishing of returns in compliance of the provisions of Section 39 of the CGST Act, 2017 for a continuous period of 6 [six] or more months - HELD THAT:- The GST registration of the petitioner has been cancelled under Section 29[2][c] of the CGST Act, 2017 for the reason that the petitioner did not submit returns for a period of 6 [six] months and more; the provisions contained in Rule 22 of the CGST Rules, 2017 which provides that if a noticee receiving a notice under Rule 22[1], furnishes all the pending returns and makes full payment of the tax dues, along with applicable interest and late fee, the proper officer is required to drop the proceedings; the undertaking given on behalf of the petitioner that he is ready and willing to comply such terms; and the orders passed by the coordinate benches of this Court as well as by this Court in similar matters whereby the writ petitions have been disposed of with a direction to the respondent authorities to revoke the cancellation of registration upon due payment of all statutory dues payable by the petitioners therein; this Court is of the considered view that no purpose will be served by keeping this writ petition pending and the present writ petition can be disposed of in similar terms, as had been passed in similar writ petitions. The petitioner is directed to approach the concerned authority within a period of 1 [one] month from today, seeking revocation of cancellation and restoration of his GST registration. On such approach by the petitioner, the concerned authority will intimate the petitioner the total outstanding statutory dues, if any, standing in the name of the petitioner till the date of cancellation of registration and any other outstanding dues under the GST Act required to be paid by the petitioner. The impugned Order is hereby interfered with and set aside - Petition allowed.

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• 2024 (2) TMI 1173
  Condonation of delay in filing an appeal before the Appellate Authority - Assessment of unregistered person - Ignoring the Registration Certificate already assigned - Benefit of notification extended to the assessees who suffered with demand as a result of assessment under Section 73 and Section 74 of the GST Act. But despite the fact that the petitioner is a registered and has been assessed under Section 63 of the GST Act by way of erroneous exercise of jurisdiction, such benefit would not be extended to the petitioner. - HELD THAT:- There is patent error of jurisdictional fact as revealed from the records available. The Registration Certificate (Original as also Amended) granted with effect from 01.07.2017 much prior to issue of notice under Section 63 and the Assessment Order dated 29.03.2023 passed under Section 74 of the GST Act evince that the Assessing Authority was well aware of the fact that the petitioner does not fall within the scope of the expression where a taxable person fails to obtain registration even though liable to do so employed in Section 63, so as to invoke power to proceed with the assessment thereunder. This apart, it is not denied that the Assessing Authority is not authorized or competent to verify the status of the petitioner. In view of settled legal position as set forth by way of enunciation of different Courts, this Court is inclined to issue writ of certiorari. In TRIMBAK GANGADHAR TELANG VERSUS RAMCHANDRA GANESH BHIDE [ 1977 (1) TMI 161 - SUPREME COURT ] the Hon ble Supreme Court held that It is a well-settled rule of practice of this Court not to interfere with the exercise of discretionary power under articles 226 and 227 of the Constitution merely because two views are possible on the facts of a case. Article 226 of the Constitution of India preserves to the High Court power to issue writ of certiorari amongst others. The principles on which the writ of certiorari is issued are well-settled. This Court is of the considered view that the Order dated 09.08.2023 passed in Appeal bearing No. AD210223003708N by the Additional Commissioner of State Tax (Appeal), Central Zone-II, Odisha, is liable to be set aside - the matter is remitted to the Additional Commissioner of State Tax (Appeal), Central Zone-II, Odisha at Cuttack, for adjudication in accordance with law after due compliance of the principles of natural justice - Petition allowed by way of remand.

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• Income Tax

• 2024 (2) TMI 1172
  Recovery made from the petitioner in the matter of demand under various assessments - HELD THAT:- As taking into consideration the peculiar circumstances of the present case that the appeals are pending since 2016 and 2019 and recoveries have been made long back, instead of keeping this petition pending, in exercise of our discretionary jurisdiction, we are inclined to dispose off this petition with a direction to the respondent to decide the pending appeals within an outer limit of three months from the date of receipt of copy of this order.

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• 2024 (2) TMI 1171
  Denial of exemption u/s 11 and 12 - not uploading the Audit Report - delay in filing Form 10B - It is the case of the Assessee that the Assessee had uploaded in its Audit Report in Form No. 10B through its auditor, due to some technical mistake in the software the Audit Report uploaded was neither accepted by the system nor was it rejected immediately and no intimation either through e-mail or any post from the Department has given to the Assessee on this regard HELD THAT:- As seen from the record that the Form No. 10B was ready as on 29/09/2017 i.e. before filing Return of Income u/s 139 of the Act i.e. 26/10/2017. After coming to know about the said mistake of not uploading the Audit Report, the same has been uploaded on 06/09/2019. After coming to know about not uploading the Audit Report, the Assessee filed a letter for condonation of delay uploading the Form 10B along with certificate from auditors explaining the reason for delay and hard copy of Form No. 10B was sent through registered post to the Jurisdictional Commissioner of Income Tax (Exemptions). Thus, it can be safely construed that the Revenue has rejected the plea of the Assessee based on mere technicalities and it is not the case of the Revenue that the Audit Report was not ready as on the date of filing of the return or Assessee is not eligible for any other reason for claiming charitable status by claiming application of income for charitable purpose u/s 11 12 of the Act. It is well settled law that the Revenue Authorities have to tax the right person in right manner and shall not disallow the eligible deductions on mere technicalities. The Revenue authorities have not followed the ratio laid down in the case of Pawan Kumar Agarwal [ 2014 (5) TMI 449 - DELHI HIGH COURT] , therefore, in our considered opinion the Revenue Authorities should have allowed the benefit of exemption to the Assessee. Thus we allow the Grounds of appeal of the Assessee by deleting the addition made by the A.O, which has been confirmed by the CIT(A).

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• 2024 (2) TMI 1170
  Reopening of assessment u/s 147 - profit earned from the commodity transaction was not shown in the return of income - AO jurisdiction to make addition in respect of the item which does not form basis for forming opinion that income escaped assessment of tax especially, in view of the fact that no addition was made in respect of item for which the reasons were issued for by issuance notice u/s. 148 of the Act HELD THAT:- This issue is no longer res integra by virtue of the judgment of Jet Airways (I) Ltd.,[ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] , Ranbaxy Laboratories Ltd. vs. CIT, [ 2011 (6) TMI 4 - DELHI HIGH COURT] and Shri Ram Singh, [ 2008 (5) TMI 200 - RAJASTHAN HIGH COURT] wherein it is held that it is not permissible for the Assessing Officer to make any other addition, if no addition is made in respect of items of which reasons were recorded for issuance of notice u/s. 148. Thus law is settled to the extent that it is not permissible for the AO to make any other addition, if the AO had chosen not to make addition in respect of items for which reasons were recorded by issuing notice u/s. 148 . As discussed, since the AO had chosen not to make addition in respect of the profit of Rs. 15,884/- earned from the commodity transaction made through Star Commodities, the AO had no jurisdiction to make addition u/s. 69. The very fact that the AO had sought make addition on the commodity transaction shows that the AO had no doubts about the genuineness of transaction. The addition of profit is separate and independent of addition made by the AO u/s. 69 of the Act. Thus, ratio of decision in the case of Jet Airways(I) Ltd. [ 2010 (4) TMI 431 - HIGH COURT OF BOMBAY] is squarely applicable to the facts of present case. Therefore, the AO had no jurisdiction to make addition. We, therefore, direct the AO to delete the addition and the appeal filed by the assessee stands allowed.

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• 2024 (2) TMI 1169
  Deduction u/s 80P(2) - interest accrued/earned on fixed/term deposits investment - reasoning given by the tax authorities in denying the claim for deduction u/s 80P(2)(d) is that interest was received from banks - HELD THAT:- Revenue reasoning has no legs to stand as a cooperative bank is principally a cooperative society and holds a banking license to operate on a larger scale under the guidelines of RBI. This issue was came to consider by Hon ble Karnataka High Court in CIT Vs Totagars Cooperative Sale Society , finds reported [ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT] wherein their lordships referring to the decision of Hon ble Apex Court in the case of Totgars Co-operative Sales Society Ltd. [ 2010 (2) TMI 3 - SUPREME COURT] held that the ratio of decision of the Hon ble Supreme Court in the aforesaid case (supra) not to be applied in respect of interest income on investment as same falls u/s 80P(2)(d) and not u/s 80P(2)(a)(i) of the Act Thus we hold that the interest income earned by the appellant society from its investment held with other cooperative banks since being a registered co-operative society under respective state laws, qualifies for deductions u/s 80P(2)(d) of the Act. Resultantly, we set-aside the impugned orders and reverse the denial of deduction. Appeal of assessee allowed.

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• 2024 (2) TMI 1168
  Revision u/s 263 - Deduction u/s 80P(2)(d) - PCIT held that the assessee has earned interest income on the FDRs maintained with Co-op. Bank which was not eligible for deduction u/s 80P(2)(d) - HELD THAT:- We note that there is no reference to interest received from Coop Bank. At the time of hearing, the AR before us duly demonstrated that the impugned amount of interest was received from the members only and not from the Co-operative Bank. The argument was also not controverted by the DR on behalf of the revenue. Even on perusal of the order of PCIT who after pointing out difference in the amount of interest as discussed above, has reached to the conclusion that such difference represents the interest from the cooperative bank but what we find is this that such conclusion of the PCIT was not based on any material. Therefore, we hold that the PCIT has concluded the assessment order as erroneous in so far prejudicial to the interest of revenue on wrong assumptions of facts and therefore, his PCIT order u/s 263 of the Act is not sustainable. Accordingly, we quash the order passed by the PCIT u/s 263 of the Act. Hence, the ground of appeal of the assessee is allowed.

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• 2024 (2) TMI 1167
  TCS u/s 206C - Sale of tendu leaves at the second stage whereas in the first stage the tendu leaves were sold on the Govt Undertaking - Treating the assessee in default for non-collection of tax at source u/s 206C(6)/206C(7) - CIT(A) dismissed the appeal of the assessee by holding that the assessee is involved in the trades in Tendu leaves and the provisions of section 206C were applicable as the tendu leaves were purchased from Government Undertaking i.e. Orissa Forest Development Corporation Ltd. HELD THAT:- CIT(A) has wrongly observed that the provisions of Section 206C of the Act were applicable to the assessee even though the assessee has made sale at second stage and the entity involved in the first stage was public sector undertaking. In the present case we also find that the assessee has collected Form no. 27BA as per Rule 37J and form 27C as per rule 37C from all the six parties copies of which are placed stating that they were engaged in business of manufacturing of Bidies and the tendu leaves were to be used for the purpose of manufacturing units and not for the purpose of trading. In the case of Karnataka Forest Development vs. ITO [ 2015 (7) TMI 908 - ITAT BANGALORE] the coordinate bench has held that where the assessee has obtained the form 27 to the effect that the buyer would use the tendu leaves in manufacturing process , then the assessee cannot be treated as assessee in default u/s 206C of the Act or liable for interest. Where the declaration is made in terms of section 206C(1A) of the Act , then the liability to collect at source under section 206C(1 ) would not apply We direct the AO to delete the demand by holding that the provision of TCS u/s 206C of the Act are not applicable to the assessee. The appeal of the assessee is allowed.

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• 2024 (2) TMI 1166
  Assessment u/s 153A - Addition of cash deposits in bank account and savings bank account interest - additions based on the bank account statement furnished by the assessee - HELD THAT:- Considering the fact that assessment for the impugned assessment year did not abate on the date of search and seizure operation, the Assessing Officer could not have made any addition in absence of any incriminating material. This is so because of the ratio laid down by the Hon ble Supreme Court in case of PCIT vs Abhisar Buildwel (P.) Ltd. [ 2023 (5) TMI 587 - SUPREME COURT] . Before us, the Revenue was unable to bring on record any material to establish that the aforesaid two additions were made based on any incriminating material found as a result of search. In view of the aforesaid, we delete the additions. Addition applying peak theory - We find the addition has been enhanced by FAA by applying peak theory. However, how the peak amount was arrived at is not discernible from the order of FAA - we are inclined to restore this issue to the file of the AO for examining afresh and decide it after providing due and reasonable opportunity of being heard to assessee. Penalty u/s 271(1)(c) - HELD THAT:- While dealing with the quantum appeal of assessee (supra), we have deleted few additions and restored back to the AO for deciding afresh. Thus, at present, there is no surviving additions against the assessee. That being the factual position on record, the penalty imposed u/s 271(1)(c) of the Act cannot survive. Accordingly, we delete the penalty imposed u/s 271(1)(c). Addition cash deposits in bank account - HELD THAT:- As the proximity between cash withdrawal and deposit is quite close. Further, the Departmental Authorities have not brought any material on record to establish that the cash withdrawals were utilized for any other purpose and not available with the assessee for re-deposit. Thus we hold that the source of cash deposit has been explained by the assessee. Accordingly, we delete the addition. Penalty imposed u/s 271AAA to be deleted.

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• 2024 (2) TMI 1165
  Disallowance of Advertisement and business promotion expense - addition made as such expenses were not incurred for earning revenue during the year - HELD THAT:- In our view this is not a valid reason having regard to the nature of assessee s business and the method of accounting followed by it. These expenses have necessarily to be incurred for the purpose of marketing and selling of flats. It is not the case of the Revenue that the said expenses have not been incurred for the purposes of assessee s business. Genuineness of the said expenses have also not been doubted by the Revenue. The assessee s case is that it has followed Accounting Standards in respect of its project and the same has not been disputed by the Revenue authorities. For the reasons set out above and following the decision of Somnath Buildtech [ 2022 (11) TMI 250 - DELHI HIGH COURT] we allow Grounds of the assessee and direct the Ld. AO to delete the impugned disallowances. Denial of credit of TDS as appearing in Form 26AS - HELD THAT:- This needs verification. We, therefore, direct the Ld. AO to verify the assessee s claim. If found to be correct, he should take remedial action and allow appropriate relief to the assessee. Appeal of the assessee is allowed.

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• 2024 (2) TMI 1164
  Validity of assessment order not bearing Document Identification Number (DIN) - HELD THAT:- The assessee s only grievance before us was that the assessment order not bearing Document Identification Number (DIN), the assessment is, in view of CIT v. Brandix Mauritius Holdings Ltd.[ 2023 (4) TMI 579 - DELHI HIGH COURT] and Board Circular 19/2019, dated 14/8/2019, placing copies of the same on record, invalid. Even as he was unable to show us the legal basis for the same; s. 292B, with sub-heading Allotment of Document Identification Number , being omitted by Finance Act, 2011, w.e.f. 01.04.2011, nor indeed any Rule to that effect, assessment record was called for, allowing Smt. Devi, the ld. Sr. DR, time to do so. She would vide her written submission dated 16/11/2023, place on record a communication dated 30/11/2021, the date of the assessment order, which bears DIN. Though Appellant would object, stating that the said document is a separate document, titled Intimation letter for order u/s. 143(3) of the Income Tax Act , we find it as without merit and, rather, appears to have been made without reading the said document, whereby the assessee is informed of being conveyed the order u/s. 143(3) dated 30.11.2021, issued earlier, electronically, i.e., after completion of accounting by CPC. There is no dispute that both the assesssment order and the Intimation were uploaded on 30/11/2021. That apart, notice of demand u/s. 156 of the Act dated 30.11.2021, manually signed, as is the assessment order, forms part of the appeal file itself. This is in complete conformity with the Board Circular supra. What, then, is the assessee s grievance? Rather, the Intimation and the order being displayed on the Revenue s portal, the objection is not only invalid but also unfortunate.The assessee s appeal for AY 2015-16 is accordingly dismissed. Assessment order has not been signed, either physically or digitally, by the AO - AY: 2016-17 - HELD THAT:- Sec. 282A(2) provides that if the name and office of the designated income tax authority is printed, stamped or otherwise written on any notice or document required to be issued, served or given for the purposes of the Act by any income tax authority, the same shall be deemed to be authenticated. Further, r. 127A provides that the printing of the name and office of the income authority in the body of the email or in the attachment thereto where the notice or other document is transmitted by way of attachment to the email, or is displayed as a part of electronic record, or likewise on the attachment to the electronic record, it would be deemed to be authenticated where the email or, as the case may be, electronic record is sent from the email address of the income tax authority or, as the case may be, displayed on its designated website. It is clear that the law has provided for deemed authentication in view of the transmission of the documents electronically from a designated email address or per a designated website. The name of the officer, along with designation, is clearly printed on the assessment order. That is, not only is the assessment order signed physically, it is also deemed to be authenticated. There is no case by the assessee that the conditions of r. 127A have not been complied with; the Revenue stating of both uploading as well as transmission through email ID on the date of passing the assessment order, and which aspect is not in dispute. Adoption of correct profit rate - Adoption of a higher net profit rate of 5% (of sales) for AY 2019-20, as against at 2% for the preceding years - HELD THAT:- For years prior to AY 2019-20, the Revenue was, in the absence of the assessee returning income u/s. 148, constrained to assess the income u/s. 144 of the Act, which obliged the AO to gather material and confront the same to him. That is, the Act throws the burden for making an informed estimate of the assessee s income for the relevant year/s on the AO. Though the returns voluntarily filed earlier, disclosing profit at 8%, disregarded due to the assessee being a non-resident, could validly be regarded as evidence, the Revenue has not done so. Board requiring the assessments to be evidence-based, rather than on the basis of the statements, unless corroborated, the Revenue has proceeded on the basis of the reported profit of other firms in the business. It has failed to appreciate that all the returns, filed earlier by the assessee voluntarily, returning profit at 8%, is corroborating material, so that the lower of the two rates, i.e., 5%, as admitted, could have been applied for all the years. Be that as it may, it is not so constrained for the current year, for which the assessment is u/s. 143(3) of the Act. The assessee returning income at Rs. 98,70,252, the AO has accepted the same. The same is consistent with the estimated turnover of Rs. 20 crores, yielding a profit rate of less than 5%. Appellant was in this regard specifically questioned by the Bench about the turnover per the software for f.y. 2018-19, i.e., the previous year relevant to AY 2019-20, and to which he replied as being not available. There is, in this view of the matter, no scope, factually and, therefore, legally; the ld. CIT(A) emphasizing the latter, for any reduction therein. That is, the assessee stands rightly assessed. As we have dwelled on the facts of the case as we are, in confirming the assessed income, not in agreement with the ld. CIT(A). There is no law that the assessed income, a product of the law as applied to the facts of a case, cannot be lower than the returned income. Rather, it is only where an assessment fails, that the assessee may not be able to avoid the tax incident on his returned income (CIT v. Shelly Products [ 2003 (5) TMI 4 - SUPREME COURT ] Assessee s appeals are dismissed.

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• 2024 (2) TMI 1163
  Disallowance of exemption claimed u/s 54EC - non filling ROI - assessee has neither filed return of income u/s 139(1) of the Act, nor in response to the notice issued u/s 148 - AO in the absence of return filed by the assessee has disallowed the exemption claimed - HELD THAT:- As perused the provisions of section 54EC of the Act r.w.s. 139(1) of the Act and note that it has nowhere been provided that for claiming exemption u/s 54EC of the Act, the assessee has to file the return of income. Even at the time of hearing the Ld. DR has not brought our attention to such provision of the Act, suggesting that it is mandatory, for claiming exemption u/s 54EC of the Act, to file the return of income. Accordingly, we are not convinced with the findings of the Ld. CIT(A). Thus, we direct the AO to allow the exemption to the assessee on account of investment made in REC Ltd. as per the provision of law even if the assessee does not file the return of income. Ground of appeal of the assessee is allowed.

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• 2024 (2) TMI 1162
  Assessment u/s 153A - Addition based on the valuation report - completed assessment - nature of material found in the course of search which led to impugned additions - whether addition made on the completed assessment when the valuation is made purely based on the statement and view of the building made by the searched? - HELD THAT:- Considering the fact that the year under assessment is a completed assessment and in a search proceeding so far as it relates to the completed assessment only the addition can only be made with any corroborative material found during the search. As it is evidently cleared from the facts recorded and discussed in the orders of the lower authority they have merely based on the outer look and the statement of Shri Bhanwar Lal Soni there is no corroborative material suggest that the assessee has invested the money beyond the cost reflected in the books of accounts. In support of so assessee submitted that the assessee himself constructed the property which is of family owned and if the rate of State PWD is considered instead of Central PWD then there is no much difference even otherwise and the objections raised by the assessee has not been considered by the lower authority and has made the addition which is nothing but on the presumption and assumption. Such type of addition cannot be made in the post search case as decided by the apex court in the case of Abhisar Buildwell P. Ltd [ 2023 (4) TMI 1056 - SUPREME COURT] Merely the statement cannot be made base to make the addition and the decision of the apex court that in search assessment u/s 153A, AO cannot assess or reassess the total income filed under s. 153A of the Act unless some incriminating material was found during the search. Revenue has not demonstrated the nature of material found in the course of search which led to impugned additions in the absence of any incriminating material. The cost of land incurred and recorded in the books has been duly accepted and reduced from the fair value derived by the valuer in the order passed under section 154 of the Act. The sustained addition is based on the valuation report of the DVO which is also considering the CPWD rates instead of PWD rates. Thus, the addition made towards the alleged difference in cost of construction made in the order of the assessment deserves to be deleted as the addition on cost of construction is based on valuation report which is in the realm of estimations without any nexus to any incriminating documents per se. Hence, in the absence of any incriminating material found, therefore, we see no perceptible reason to confirm the addition and therefore, the same is directed to be deleted. Appeal of the assessee is allowed.

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• 2024 (2) TMI 1161
  Limitation period to file the appeal - Covid period leverage - HELD THAT:- The date of filling the appeal was 27.10.2021 and the date of order is 30.11.2020. The period of exclusion is from 15.03.2020 till 02.10.2021, notwithstanding the actual balance period of limitation remaining all person shall have a limitation period of 90 days from 03.10.2021. Thus the appeal in this case is filed within the 90 days from 03.10.2021 i.e. on 27.10.2021. Levy of penalty u/s 234E - delay of 484 days in filling Form No. 26Q - technical glitches on the part of the system - HELD THAT:- Assessee has paid tax on 07.05.2019, 07.06.2019 and 04.07.2019. Later on, when it was came to the knowledge to the assessee that the data of same deduction has to file in Form No. 26Q hence immediately trust made efforts to file correction statement. However, due to technically reason Traces has not allowed to make correction in Form 24Q and also not permitted to replace the data in Form No 26Q directly through correction statement. Therefore, assessee trust compelled to file return in another Form 26Q and the same Form was processed u/s 200A of the Income Tax Act 1961 by the Central processing Cell of TDS treated the same return as a new return. Accordingly, the Central processing Cell of TDS has imposed late fee considering the delay of 484 days ignoring the facts of the case. The intimation of demand in this regard was received to assessee on 14.07.2021 from the jurisdiction assessing officer. Thus, it is evidently clear that there is no delay in payment of taxes but due to the technical glitches on the part of the system the correct form is uploaded. Thus we direct the ld. AO to delete the levy of penalty - Decided in favour of assessee.

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• 2024 (2) TMI 1150
  Validity of Revision u/s 263 - Admisibility of Deduction u/s 80P, Deduction from total income under chapter VI-A and business expenses - HELD THAT:- AO has raised the issue on hand and has allowed the claim of the assessee after applying his mind on the issue. Thus, the contention of the ld. PCIT is nothing but making the review of the assessment under taken by the ld. FAO and PCIT intend to impose his view on the order passed by the FAO and the same is not permitted under the provisions of section 263. It is not the case that the ld. AO had passed the order without conducting any inquiries into the issue under consideration and specific details regarding the deduction claimed was called for the ld. FAO and therefore after he has taken a plausible view in the matter and allowed the deduction u/s. 80P(2)(d) claimed by the assessee. Thus the revisionary order thus cannot be passed merely to review the opinion formed by ld. AO for the reason that a higher authority does not concur with the view taken by ld. AO, without there being any substantive material in possession of such higher authority that has not been considered by ld. AO while forming such opinion. As decided in M/s Malabar Industrial Co. Ltd [ 2000 (2) TMI 10 - SUPREME COURT] if the AO has adopted one of the two or more courses permissible in law and it has resulted in loss of revenue, or where two views are possible and AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order and it is prejudicial to the interest of the Revenue, unless the view taken by the AO is totally unsustainable in law. Based on the discussion so record we are of the considered view that no action u/s 263 is called for in this matter once the ld. AO has already examined the issue which the ld. PCIT is pointing out in his order as submitted the assessee. This submission of assessee is fortified from the observations in the case of CIT Vs. Max India [ 2007 (11) TMI 12 - SUPREME COURT] wherein held that phrase prejudicial to the interests of the Revenue in section 263 of the Income-tax Act, 1961, has to be read in conjunction with the expression erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue. Even a bare reading of clause (a) to the Explanation 2 of Section 263(1) enables a deeming fiction for the CIT to treat the order of AO erroneous in so far as prejudicial to the interest of revenue if in the opinion of CIT the order is passed without making inquiry or verification which should have been made. This again substantiates that the assessee challenging the validity of Sec 263 is completely valid as in the present case the assessment order was passed after making due enquiry as well as verification from the assessee hence the CIT has no power to invoke the power provided u/s 263 - Appeal of assessee allowed.

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• 2024 (2) TMI 1149
  Revision u/s 263 by CIT against reopening of assessment - AO had not made enquiries on capital gains, investment in time deposits with the Axis Bank and deduction u/s 54 thereby making his order erroneous and prejudicial to the interest of the Revenue - HELD THAT:- We find once the Ld. AO having recorded the reasons for reopening the assessment and having formed a belief that income of the assessee had escaped assessment, had not made any addition in the reassessment proceedings in respect of issues that are subject matter of reopening. Hence, the very basis of formation of belief for the Ld. AO vanishes. Hence, the Ld. AO could not have framed any reassessment per se. Logically the Ld. AO should have simply dropped the initiation of reassessment proceedings instead of passing a separate reassessment order. Once, the reassessment order per se framed by the Ld. AO is not sustainable in the eyes of law, any revision order passed thereon u/s 263 seeking to revise such unsustainable order cannot be accepted in the eyes of law and consequential revision order also passed u/s 263 of the Act deserves to be quashed. Our view is further fortified by the decision of Sh. Pramajit Singh vs. PCIT [ 2023 (12) TMI 1292 - ITAT DELHI] wherein the Tribunal placed reliance on the decision of Software Consultants [ 2012 (2) TMI 18 - DELHI HIGH COURT] AO did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order under Section 263 of the Act. Sequitur is that the Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction under Section 263 of the Act - Appeal filed by the assessee is allowed.

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• 2024 (2) TMI 1148
  Adjustment of seized asset against existing liability and levy of interest u/s 234B - outer time period of 120 days - HELD THAT:- It is undisputed fact that the AO accepted the returned income as the Assessed income of the respective assessees. The seized Cash and FDRs are from the disclosed source of income from the respective assessees only and therefore no addition or disallowance made by the AO while framing scrutiny assessments u/s. 143[3] of the Act. As the AO has not acted upon the Application for release/adjustment of Cash and FDRs, there was no occasion for him to record his satisfaction and prior approval from the Competent Authority for release of seized goods. The second proviso to section 132B(1)(i) makes it clear that the assets are required to be released within a period of 120 days from the date on which the last of the authorizations for search under section 132 or for requisition under s. 132A, as the case may be, was executed. In the present cases last date of search action concluded on 15-05-2010 and the outer time period of 120 days expired on 15-09-2010, but the Ld AO has not acted upon the Application for release of the seized goods and thereby retained the seized Cash and FDRs beyond the period of 120 days prescribed in the 2nd Proviso to section 132B(1)(i) of the Act. Coming to the main section 132B(1) of the Act, which prescribes that the assets seized u/s. 132 can be adjusted against any existing liability as per IT, WT or the amount of liability determined on the completion of regular assessment or reassessment including any penalty levied or interest payable in connection with such assessment or reassessment. As per this sub- section, AO ought to have adjusted against the tax liability of Rs. 6,39,620/- while framing the regular assessment as against the seized Cash of Rs. 5,39,000/- and FDRs of Rs. 99,99,999/-. In that event also, the assessee is entitled for release of surplus FDRs seized by the Department as per section 132B [3] of the Act and therefore there is no question of levy of interest u/s 234B and C of the Act. Thus in our considered view, the Ld AO miserably failed to adhere to the provisions of section 132B[1] and the CIT [A] is not justified in confirming the interest charged u/s. 234B of the Act for the period up to 15-09-2010. Therefore we direct the Ld AO to rework the computation in accordance with the provisions of law after providing proper opportunity of hearing to the assessees. Appeals filed by the assessees are allowed for statistical purpose. Non granting of Interest u/s 132B(4) on seized asset viz. FDR - CIT(a) held that mere seizure of the FDs, the appellant has not suffered any pecuniary loss by way of loss of interest, therefore, no interest u/s. 132B(4) can be granted to the assessee - HELD THAT:- Section 132(1)(c) of the Act reads Any person is in possession of any Money, Bullion, Jewellery or Other Valuable Article or Things . Hence, Money is different from bullion, jewellery or other valuable article or things. Seized FDRs cannot be treated as Money , but only as Other Valuable Article or Things . As per section 132B[4][a] of the Act, the assessee is entitled to interest on the amount by which the aggregate amount of Money seized after 120 days. Thus the arguments of the assessee are not in consonance to the provisions of law and the same is liable to be rejected. The case law of Ajay Gupta-Vs-CIT [ 2007 (4) TMI 42 - HIGH COURT, NEW DELHI] relied by the assessee is not relating to seizure of FDRs but of Money and hence not applicable to the facts of the present case. Whereas the Madras High Court judgment in the case of Anil Kumar Kedia [ 2011 (1) TMI 1171 - MADRAS HIGH COURT] which was relied by the Ld. CIT(A) is squarely applicable to the facts of the present case. Thus we do not any infirmity in the orders passed by the lower authorities and the same does not require any interference and the assessee appeals are hereby dismissed.

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• 2024 (2) TMI 1147
  Disallowing credit of TDS - TDS credit is not reflected in Form 26AS - whether the credit claimed is allowable u/s 199? - HELD THAT:- In the case of Bhura Mal Raj Mal [ 1996 (4) TMI 114 - RAJASTHAN HIGH COURT] the High Court held that the credit for tax deducted at source should not be denied on the ground that the assessment year of the payer in which the deduction is made is different from that of the recipient. In the case of Anup Rajendra Tapadia [ 2023 (3) TMI 35 - ITAT PUNE] ITAT held that in terms of Rule 37BA(3)(i), benefit of TDS is to be given for assessment year for which corresponding income is assessable, therefore, where assessee received rental income on 31.03.2020, benefit of TDS had to be allowed in Assessment Year 2020-21 even though tenant inadvertently reported same in AY 2021-22. Thus we are of the considered view that in case the assessee has not claimed double deduction of credit of TDS, then the assessee is entitled to claim deduction of TDS in the year in which the corresponding income has been offered to tax by the assessee and the assessee has raised invoices on the payer. In the instant case, the assessee s contention is that both the services as well as invoices have been raised on the payer in the impugned assessment year i.e. A.Y. 2020-21 and further, the assessee has not claimed deduction of TDS in any prior assessment year as well. Accordingly, matter is being restored to the file of AO with a view to verify whether the assessee has claimed TDS of the aforesaid amount in any other assessment year and accordingly, relief may be granted to the assessee as per law. Appeal of the assessee is allowed for statistical purposes.

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• Customs

• 2024 (2) TMI 1146
  Seeking refund the pre-deposit along with applicable interest - recovery of cash and seizure of goods of foreign origin - contravention of EXIM Policy - seized u/s 110 - seized goods released provisionally upon furnishing a bond and a bank guarantee - confiscation - penalty imposed - whether the petitioner is entitled to the claim of interest on the entire amount deposited by him as redemption fine and penalty ? - HELD THAT:- Admittedly, the redemption money and penalty was paid before filing the appeal by getting the bank guarantee encashed vide letter. Admittedly, the Tribunal has set aside the Order-in-Original and granted the consequential benefits to the petitioner. Revenue cannot be permitted to enrich itself at the cost of the petitioner. It may have earned the interest on the redemption and the penalty amount deposited by the petitioner, which amount was ultimately found to be refundable. Relying upon the decision of the Supreme Court, the Division Bench of the High Court in R.H.L. Profiles Ltd. Vs. Commr. Of Cus., Ex. And Service Tax [ 2017 (4) TMI 1252 - ALLAHABAD HIGH COURT] , held that on the amount which was illegally confiscated by the Revenue and ultimately refunded, the assessee-appellant is entitled to interest and the department is under obligation to pay the same. Revenue has retained the redemption money and the penalty amount without any right and therefore in view of the decision of the Hon ble Supreme Court in the case of Tata Chemicals Limited [ 2014 (3) TMI 610 - SUPREME COURT] , we are of the view that respondent is under obligation to grant interest to the petitioner on the whole amount (redemption charges and penalty) and not just on the pre-deposit amount, which was the statutory requirement under Section 129E of the Customs Act, 1962. We accordingly quash the impugned Corrigendum dated 10.02.2023 issued by Assistant Commissioner (Refund) and direct the respondent to refund to the petitioner along with interest at the rate of 6% per annum from the date of the deposit till the date of refund. Respondent is directed to process the refund within two weeks. Petition is disposed of along with pending application.

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• 2024 (2) TMI 1145
  Non-compliance to Orders of the appellate authority by the subordinate original authority - Waive detention and demurrage charges - seeking relief for release of the imported machinery for home consumption - classify the goods under Chapter 90 as Runway Friction Measuring Machine - imported friction testing vehicle - prohibited in terms of Section 2(33) - confiscation in terms of Section 111(d) - redemption fine and imposed penalty - HELD THAT:- In our view, it is settled law that the principle of judicial discipline requires that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. Applying this settled legal position, by the said Order dated 23rd March 2023, the Commissioner of Customs (Appeals) has set aside the confiscation of the imported machinery and ordered release of the same for home consumption. Though an Appeal has been filed against the said Order dated 23rd March 2023, being Customs Appeal No. 86471 of 2023, neither the appellate authority nor any other competent Court has stayed the operation of the said Order dated 23rd March 2023. Thus, the Respondents will have to be directed to release the Friction Testing Machine without prejudice to their rights and contentions in the Appeal filed by them. Hence, we hereby pass the following Orders : a. The Respondents are directed to release the Friction Testing Machine for home consumption within a period of one week from the date of intimation of this Order, subject to the Petitioner furnishing a bond for payment of differential duty, in the event, the department succeeds in its Appeal filed before the Tribunal. b. In regard to the demmurage and detention charges, the Respondents are directed to issue a waiver certificate to the Petitioner along with the release of the said goods. c. The release of the machinery will be without prejudice to the rights and contentions of the Respondents in Custom Appeals No. 86471 of 2023 filed by them. Petition is disposed of.

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• 2024 (2) TMI 1144
  Denial of refund of SAD - goods supplied under sales invoice not contain rubber stamp and not computer printed - non-submission of the Chartered Accountant s certificate - whether the burden of 4% SAD has been passed on by the importer or not - mandatory declaration required under Condition 2(b) of Notification No. 102/2007-Cus - HELD THAT:- The allegation that the stamping was not done in the invoices issued to the buyer has been examined by the Larger Bench of the Tribunal in the case of Chowgule Company Pvt. Ltd. Vs. Commissioner of Customs [ 2014 (8) TMI 214 - CESTAT MUMBAI (LB)] wherein it was has held in that case that non-declaration of duty in the invoice issued to the buyer itself is an affirmation that no credit would be available. Appellant has obtained the Chartered Accountant s certificate and has submitted it before the Commissioner (Appeals). The Commissioner (Appeals) has held that non-submission of the Chartered Accountant s certificate before the original authority is not a curable defect and has rejected the claim. Board vide instruction circular issued from F.No. 275/34/2006- CX.8A, has stated that Commissioner (Appeals) while deciding the appeals filed before him u/s 128A of the Customs Act, 1962, shall, after making such further enquiry as may be necessary, pass such order, as he thinks just and proper, confirming, modifying or annulling the decision or order appealed against. He can direct the production of any document, or the examination of any witness to enable him dispose of the appeal. In the circumstances it was not proper of him to have rejected the appeal without examining it on merits and after issuing a proper speaking order. Thus, it is proper to remand the matter back to the Original Authority who shall consider the Chartered Accountant s certificate apart from the other documents already submitted by the Appellant at the time of filing the refund claim. He should also verify the invoices to check that they don t indicate the payment of SAD. If so he shall accept the same in affirmation that no credit would be available, in line with the judgment of the Larger Bench in Chowgule Company (supra). All other issues are left open. He shall point out discrepancies in writing, if any to the appellant and afford a reasonable opportunity of hearing to them for advancing their claim. The impugned order is set aside on the above terms and the appeal is disposed of accordingly.

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• 2024 (2) TMI 1143
  Confiscation of the gold and imposed penalties on various noticee - activity of buying and selling of gold and jewellery -legitimate Or Not - Seized 12 gold bars weighing 11990.82 gms - HELD THAT:- In this particular case, it is seen from the records that no such opportunity was given to the Appellant though they have made specific request to this effect. Therefore, we find that principles of natural justice has not been followed by the Adjudicating Authority. The Appellant has produced voluminous records of their ledgers, invoices, copies of Banking transactions etc. to prove that they were carrying legitimate activity of buying and selling of gold and jwellery. These documents have to be properly verified before any conclusion can be arrived at as to whether the seized Golds have the backing of proper licit documents or not. Therefore, we remand the matter to the Adjudicating Authority with the following directions - After following the principles of natural justice, the Adjudicating Authority will pass a considered decision.

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• 2024 (2) TMI 1142
  Challenged the rejection of classification - Goods imported for use as parts of motor vehicles - Commissioner relied on note 3 to section XVII to arrive at the distinguishing factor between the classification of the impugned goods in chapter 87 vis-a-vis chapter 84, 85 and chapter 72 onwards - HELD THAT:- Similar matters have been examined earlier in appellants own case as well as the case of Suzuki Motors Gujarat Pvt Ltd.[ 2022 (6) TMI 1089 - CESTAT AHMEDABAD] . It is noticed in the impugned order, that there were specific averment made by the appellants before Commissioner regarding satisfactions of all 3 conditions. The same has also been recorded in the impugned order however, the impugned order presumes that note 3 to Section XVII can override note 2 to section XVII. Note 3 only make the distinction in case of disputes in classification within chapter 86 to 88. It does not apply to the disputes involving classification in chapters other than chapter 86 to 88. Thus, if a item can be used in a car as well as in a railway loco motive than the classification has to be done with the heading for which it is used solely or principally. This note does not apply to chapter other than chapter 86 to 88. Thus, the impugned order is set aside and matter remanded to original adjudication authority for fresh adjudication in the light of the decision of tribunal in appellant s own case as well as in the case of Suzuki Motors Gujarat Private Limited.[ 2022 (6) TMI 1089 - CESTAT AHMEDABAD] . Appeal is allowed by way of remand.

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• 2024 (2) TMI 1141
  Imposition of penalty and confiscation/redemption fine - repairing works for risers and pipes - repair activity done at DTA location instead of designated EOU location - violation of TSA bond furnished by ONGC - Validity of show cause notice issued to the parties - severally and jointly for confiscation - HELD THAT:- Show cause notice was not maintainable as per the provisions quoted and same has been confirmed by both lower authorities under wrong provisions. Firstly, we find that Section 54 of the Customs Act is applicable where any goods imported in a Customs station are intended for transshipment. It is by no way forthcoming that the goods were coming from any Customs station and meant for transshipment as envisaged in Section 54. It is clear from the provisions of Manufacture and Other Operations in Warehouse Regulation, 1966 that, the regulations require that the persons removing the goods from warehouse has obligation to pay duty in case goods are not received within three months or such extended period as a proper officer may extend and in case the proof of receipt is not received then the permission is required to be cancelled and duty bond enforced. Coming to the Clause 111(J), it is clear that the same can be thus enforced against the person who attempts to remove or actually removes goods from Customs area or warehouse without the permission of the proper officer or contrary to the terms of such conditions. The Clause comes into operation only when goods are removed from the customs area or warehouse without permission or contrary to the permission already granted. It does not deal with the warehouse goods in transit with which the above regulations i.e. Warehoused Goods (Removable) Regulations, 1963 have been provided and which make the goods dutiable in the hands of persons executing bond for any violation of conditions of bond. Thus, the liability under the bond is of the person executing it. As far as appellants are concerned, if intention was to evade service-tax, then show cause notice should have been issued under relevant provisions including penal provisions of Finance Act, 1994. Thus, giving show cause to the party and same having been sustained without proper legal construction by the authorities below, we are inclined to set aside the proceeding of imposition of penalty etc. for violation of Section 111(J) against alleged recipients of the goods at this belated stage and particularly when duty of Service Tax has also been discharged and accepted by the department reckoning in the invoice that work has been done by E.O.U, even though E.O.U may not have normally paid service tax. Also the party executing the bond and its intermediary responsible for executed bond have neither been investigated, nor show caused in the matter. The forensic evidence regarding rebuttal of two statements not having been considered by lower authorities, we are not commenting either way on the same, nor are inclined to rely on testimonial evidence in the absence of proper defense examination including forensic having been afforded in such old matter and service tax penal provisions not having been invoked. Appeals are allowed with consequential relief.

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• 2024 (2) TMI 1140
  Classification of imported goods - electrical machines or Apparatus - ''Student interactive respond system'' under CTH 8471 60 29 - HELD THAT:- Appellant herein had classified the goods under CTH 8543 87 99 which covers electronic machines and apparatus having individual function specified or included elsewhere in the Chapter Note 85. Reliance is placed by the Appellant on Chapter Note 4 of Section XVI of the Customs Tariff Act, 1944 however as per the explanatory notes of the CTH 8543, this heading specifically states that electrical appliances and apparatus of this heading must have individual functions. It further states that most of the appliances of this heading consist of an assembly of electrical goods or parts (valves, transformers, capacitors, chokes, resistors etc). The impugned goods do not satisfy any of the above criteria and therefore classification under CTH 8543 as an item with individual function is ruled out. As rightly observed by the Commissioner in the impugned order the equipments are teaching accessories which enable students in a class to respond to queries and these equipments are used along with the ADP machine. Considering the above and the fact that similar items being cleared under CTH 8471 at Hyderabad and Chennai organizations as seen from the Bill of Entry placed before us, there is no merit in the Department Appeal and the same is rejected.

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• 2024 (2) TMI 1139
  Classification of imported goods - 474.860 MTs of imported goods, namely, Petroleum Hydrocarbon Solvent (125/240) Grade M.T.O - to be classified under CTH 27101990 and therefore same being freely importable? - HELD THAT:- The test report of Customs Laboratory, provides that 90% of goods by volume get distilled at 195 degee C, i.e. below 210-degree C followed by 95% distillation at 207-degree C. We find that this issue is similar to the one decided by the Hon ble SUPREME COURT in the matter of Krishna Technochem Pvt. Ltd [ 2022 (4) TMI 732 - SUPREME COURT] as well as Kunjal Synergies Pvt. Ltd Vs. C.C., Mundar [ 2023 (9) TMI 730 - CESTAT AHMEDABAD] of this bench only, wherein 95% distillation had taken place below 210 degree C and therefore interpreting at in the above said Chapter note as upto the benefit was allowed by classifying the goods under Customs Tariff Heading 2710 1990 and rejecting department s classification under CTH 2710 12. We, therefore, agree with the aforesaid decision and hold that the classification made by the appellant is correct. Appeal is therefore allowed with consequential relief.

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• 2024 (2) TMI 1138
  Valuation - Import of Christmas light and others electrical items from China - adopted the NIDB data to enhance the value - revised the Customs Duty to be paid - HELD THAT:- We find that the Department has not made any attempt to follow the procedure given under the Valuation (Determination of Value of Importers Goods) Rules 2007 and has simply adopted the NIDB data and selectively enhanced value. Thus, Commissioner (Appeals), has given a detailed finding along with reasons while setting aside the Order-in-Original. We do not find any reason to interfere with the same. Accordingly, we dismiss the Appeal filed by the Revenue.

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• 2024 (2) TMI 1137
  Illegally export goods from India to Nepal - unauthorized route without any valid documents using Bicycles - confiscation good - redemption fine and penalty imposed - HELD THAT:- It is only a presumption by the Revenue that the goods were attempted to be exported outside India without proper documentation and without proper channel and no corroborative evidence has been produced on record. Further, the statement of the appellant was recorded during the course of investigation wherein the appellant claimed the ownership of the goods and the ownership of the bicycles recovered during investigation. As no corroborative evidence has brought on record by the Revenue to allege that there is an attempt for illegal export of goods. Thus, confiscation of the impugned goods is not sustainable. Accordingly, no redemption fine can be imposed and no penalty can be imposed. Hnece, set aside the impugned order in toto and allow the appeal with consequential relief, if any.

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• 2024 (2) TMI 1136
  Seeking advance ruling u/s 28H - classification and applicability of notification - importation of goods i.e. NIKON Camera Model N2120 - classification under CTH 8525 89 00 with benefit of Notification No. 50/2017-Cus - commercial quantity - Whether digital camera with still image as well as moving image capability would be eligible for exemption benefit under the entry as Digital Still Image Video Camera - HELD THAT:- In view of the definition of Digital Still Image Video Camera in C.B.I. C. Circular 32/2007-Cus. whereby such cameras have the capability of taking still images and also include digital cameras that take moving images for a limited period of time, although they are primarily still image camera. Whereas regarding cameras which the applicant intends to import, recording time is not limited, it may appear that the subject goods fall outside the purview of Digital Still Image Video Camera . As regards apprehension that the subject goods fall out of the purview of the Digital Still Image Video Camera, for the reason that recording time is not limited and in view of the aforementioned circular, it appears that the subject goods is not eligible for the benefit of S. No. 502 Notification No. 50/2017-Cus. However, the wording used in the said Circular lay emphasis on principal function and not excludes cameras which have the capability to record moving images for a unlimited period of time. Language used in the Circular is of inclusive nature, whereby under the term. Digital Still Image Video Camera includes digital cameras that take moving image for limited period of time although they are primarily still image cameras. This may lead to inference that exemption under the notification is admissible to only those digital cameras whose principal function relates to still photography even though such cameras are capable of recording moving images. Based on the reasons cited by the applicant in the application, said model of digital camera proposed to be imported by the applicant is principally a still image digital camera. Accordingly exemption under Serial Number 502 Notification No. 50/2017-Cus., is admissible on import of said model no. if digital camera. In view of the above, I rule as under: - Nikon Camera Model No. N2120 with standard accessories proposed to be imported by the applicant is correctly classifiable under sub-heading 8525 89 00 of the First Schedule to Customs Tariff Act, 1975. Also, in terms of, The Accessories (Condition) Rules, 1963 the said camera along with the standard accessory, if presented together shall be chargeable under the sub-heading 8525 89 00. However, any item/accessory, optional in nature, would merit classification in the tariff heading appropriate to it. The benefit vide S. No. 502 of Notification No. 50/2017-Cus., is available on import of the aforesaid Nikon Camera Model No. N2120. The applicant has submitted that the device is not launched commercially in India and requested to ensure maintenance of its confidentiality. In this regard, I note that the commercial import of the subject goods in question is already underway, thus, I am, of the view that maintaining confidentiality by invoking proviso to Rule 27 of the Customs Authority for Advance Rulings Regulations, 2021, is not required in the instant matter.

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• Service Tax

• 2024 (2) TMI 1160
  Demand of service tax - Commercial Training or Coaching Services - Franchise Services against Forward Charge - Franchise Services against Reverse Charge - Business Auxiliary Services - Management or Business Consultant Services - Wrong computation of the proposed demands due to invocation of Best Judgment Assessment instead of actual value on accrual basis - Whether demand could not have been confirmed on merits? - invocation of Extended period of Limitation - levy of penalties u/s 76, 77 and 78 of the Finance Act - Inordinate delay in adjudication. Inordinate delay in adjudication - HELD THAT:- Appellant placed reliance upon the provisions of section 73(4B) of the Finance Act to contend that the order passed by the Commissioner should be set aside as it was passed beyond the period prescribed in the said section. This ground which is both factual and legal was not taken by the appellant in reply to the show cause notice. Section 73(4B) provides that the Central Excise Officer shall determine the amount of service tax within one year from the date of notice, where it is possible to do so. In the absence of such a ground having been taken in the reply to the show cause notice, it was not considered by the Commissioner. It would, therefore, in the absence of the factual aspect having been brought on record, not be appropriate to decide this issue. Extended Period of Limitation - HELD THAT:- The proviso to section 73(1) of the Finance Act stipulates that where any service tax has not been levied or paid by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of the Chapter or the Rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax, the provisions of the said section shall have effect as if, for the word one year , the word five years has been substituted. It would be seen from the show cause notice that the extended period of limitation has been invoked by alleging that facts had been suppressed with intent to evade payment of service tax merely because the appellant did not pay service tax for certain services. The show cause notice also mentions that had the investigation not been conducted by the department, non payment of service would not have come to the notice of the department. The Commissioner, in the impugned order, also after noticing that the appellant had not paid service tax correctly and had failed to bring the correct facts to the knowledge of the department observed that in the era of self-assessment great trust is placed on the assessee by the department, but this trust had been breached by the appellant - The Commissioner, therefore, concluded that the onus for proper assessment and discharge of service tax was on the appellant and as the appellant had failed to discharge the said burden, the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act was correctly invoked. Whether the extended period of limitation can be invoked merely because service tax is not paid for some services? - HELD THAT:- In the present case, the contention of the appellant is that service tax was not paid as the appellant believed that it was not liable to pay service - It has been repeatedly held by the Supreme Court and the Delhi High Court that mere suppression of facts is not enough. Suppression has to be wilful with an intent to evade payment of service tax. In PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY [ 1995 (3) TMI 100 - SUPREME COURT ] the Supreme Court examined whether the Department was justified in initiating proceedings for short levy after the expiry of the normal period of six months by invoking the proviso to section 11A of the Excise Act. The proviso to section 11A of the Excise Act carved out an exception to the provisions that permitted the Department to reopen proceedings if the levy was short within six months of the relevant date and permitted the Authority to exercise this power within five years from the relevant date under the circumstances mentioned in the proviso, one of which was suppression of facts. It is in this context that the Supreme Court observed that since suppression of facts has been used in the company of strong words such as fraud, collusion, or wilful default, suppression of facts must be deliberate and with an intent to escape payment of duty. Mere suppression of facts is not enough and there must be a deliberate and wilful attempt on the part of the assessee to evade payment of tax. In the absence of any intention to evade payment of service tax, which intention should be evident from the materials on record or from the conduct of the assessee, the extended period of limitation cannot be invoked. Thus, mere non disclosure of the receipts in the service tax returns would not mean that there was an intent to evade payment of service tax. In the present case, all that has been stated in the impugned order is that since the appellant suppressed facts, the provisions of the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act would be applicable since such suppression of facts was with an intent to evade payment of service tax. The extended period of limitation could not, in view of the aforesaid decisions, have been invoked in the present case even if the returns were self assessed. Management consultancy service - HELD THAT:- The entire demand confirmed under this head falls within the extended period of limitation. It has been held that the extended period of limitation could not have been invoked. The confirmation of demand under this head, therefore, deserves to set aside. Franchise service (forward charge) - HELD THAT:- The appellant has challenged only the amount confirmed for the extended period of limitation. As held above, the extended period of limitation could not have been invoked. The demand of Rs. 5,02,168/- for the normal period is, therefore, confirmed. Merits commercial coaching and training services - HELD THAT:- Out of the amount of Rs. 2,11,42,021/-, an amount of Rs. 1,81,41,040/- was set aside as service tax could not be levied. The finding recorded by the Commissioner does not suffer from any error and the learned authorised representative appearing for the department has also not been able to point out any specific error in the finding. It is, because of the discussion on the extended period of limitation, also barred by limitation - Though an amount of Rs. 25,95,804/- has been set aside in the operative part of the order, but while calculating the amount it has included this amount. This is a calculation error and, therefore, the demand for this amount has to be set aside. Out of the total amount of Rs. 40,71,261/-, the demand of Rs. 28,92,043/- upto February 2010 has been set aside because of the Notification dated 10.09.2004. It is also barred by limitation. The amount of Rs. 4,05,174/- for the period March 2010 is also barred by limitation. Regarding the remaining demand of Rs. 7,74,044/- for the period from April 2010 to March 2011, learned counsel for the appellant stated that the appellant agrees to pay this demand. Since the demand of Rs. 28,92,043/- and Rs. 4,05,174/- is barred by limitation the appeal filed by the department to assail this finding, for the reasons stated while discussing the limitation issue, deserves to be dismissed. So far as the amount of Rs. 7,74,044/- is concerned, payment of this amount is admitted by the appellant. Franchise service (reverse charge) - HELD THAT:- The franchise service was not provided by the appellant since the agreement in question is a mere revenue sharing agreement - In the present appeal, there is no fixed amount specified to be paid to Centennial College, Canada. Instead for every student enrolled in a course, Centennial College, Canada gets a specified amount as a share of the fees. This is a typical revenue sharing model and in view of the aforesaid decision of the Tribunal in Niraj Prasad, there is no element of service involved. The appellant is, therefore, justified in submitting that franchise service (reverse charge) was not rendered by the appellant since the agreement was a mere revenue sharing agreement. - the appellant was not required to pay any service tax on franchise service on a reverse charge basis. Penalty under section 78 - HELD THAT:- The Commissioner has imposed penalty under section 78 of the Finance Act for the reason that the ingredients for imposing penalty under this section and for invoking the extended period of limitation are same. It has been found that the extended period of limitation could not have been invoked. Thus, the penalty under section 78 of the Finance Act deserves to be set aside. Penalty under section 77 - HELD THAT:- Penalty of Rs. 10,000/- has been imposed upon the appellant for the reason that the appellant had contravened the provisions of section 70 of the Finance Act as the correct periodical ST-3 returns had not been filed. The appellant has very fairly stated that it is liable to pay an amount of Rs. 7,74,044/- towards service tax against commercial coaching and training service for the normal period. It has also been found that the demand towards franchise service (forward charge) for the normal period has to be confirmed. Major portion of the demand has been set aside only for the reason that the extended period of limitation could not have been invoked. The penalty under section 77 of the Finance Act has, therefore, been correctly imposed. Appeal disposed off.

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• 2024 (2) TMI 1159
  Levy of service tax - support of services of business and commerce or not - Consignment Agent carried out the handling job - HELD THAT:- On an identical set of facts, in their own case for an earlier period, this Tribunal in M/S THE TINPLATE COMPANY OF INDIA LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, JAMSHEDPUR [ 2023 (9) TMI 1438 - CESTAT KOLKATA] has dropped the demand raised against the appellant and therefore, the same treatment should be given to the present Show Cause Notice and the demands - it was held in the said case that It is evident from the records and the reports submitted by the ld.Commissioner, Jamshedpur that the appellant has not received any amount towards marketing agency agreement, therefore, the question of demanding service tax does not arise. Following the precedent decision in the appellant s own case for an earlier period, the demand raised against the appellant is set aside - appeal allowed.

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• 2024 (2) TMI 1135
  Condonation of delay in filing appeal before the Commissioner (Appeals) - Dismissal of appeal on the ground that the appeal was delayed by thirty three days - Section 85 of the Finance Act, 1994 - exclusion of the period during which the matter was pending before the High Court. - HELD THAT:- The appellant could have no doubt filed an appeal before the Appellate Commissioner within the period of limitation prescribed under sub-section 3A of Section 85 of the Finance Act, 1994. However, for reasons best known to the appellant, it approached the High Court under the W.P. 5452/2018. However, the High Court while permitting the appellant to withdraw the said writ petition by its order dated 12.03.2018 also reserved liberty to the appellant herein to seek alternative statutory remedy available in law. Therefore, the period during which the matter was pending before the High Court, i.e. from 05.03.2018 to 12.03.2018 ought to be excluded since the High Court specifically granted liberty to the appellant herein to file the appeal before the Appellate Commissioner. The appellant filed the appeal on 11.04.2018. If the period during which the matter was pending before the High Court, i.e. 05.03.2018 to 12.03.2018, is excluded then the appellant would have the benefit of the proviso to sub-section 3A of Section 85 of the Finance Act 1994. No doubt the said appeal has not been filed within the main provision but the proviso extends the period of limitation by one month. In the instant case, the appeal was filed on 11.04.2018 within a period of one month from 12.03.2018, which is the order of the High Court. The interest of justice would be subserved in this case if, having regard to the proviso to sub-section 3A of Section 85 of the Finance Act, 1994, the delay in filing the appeal is condoned. In the above circumstances, it is condoned. The impugned orders of the High Court, the Tribunal and the Appellate Commissioner are set aside - Matter restored on the file of the Commissioner (Appeals), Bhopal - appeal disposed off.

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• 2024 (2) TMI 1134
  Extended period of limitation - liability of a subcontractor to pay service tax - Validity of order of CESTAT for directing the Commissioner to calculate the service tax liability for the normal period prescribed under Section 73 (1) of the Finance Act, 1994 without invoking the proviso that seeks to extend the period of limitation - HELD THAT:- It is an undisputed fact that the question about levy of service tax by the sub-contractor was subjected to adjudication in the matter of COMMISSIONER OF SERVICE TAX VERSUS MELANGE DEVELOPERS PVT. LTD. [ 2019 (6) TMI 518 - CESTAT NEW DELHI-LB] , which was decided on 23-5-2019 by the larger Bench of the Tribunal, wherein the issue was set at rest that the sub-contractor was liable to pay service tax. Therefore, the said date in the facts of this case it was a doubtful issue as to who would be liable to pay the service tax. In the instant case the service tax was already deposited by the main contractor. The facts involved in this case that there was an interpretation issue about the liability. The Supreme Court in the matter of THE COMMISSIONER, CENTRAL EXCISE AND CUSTOMS AND ANOTHER VERSUS M/S RELIANCE INDUSTRIES LTD. AND COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S RELIANCE INDUSTRIES LTD. [ 2023 (7) TMI 196 - SUPREME COURT] while dealing with the issue of suppression of facts, observed that if the appellant was under a bona fide belief based upon certain judgment then in such case the said bona fide belief cannot be stated to be a suppression of fact and Court held We note that the issue of valuation involved in this particular matter is indeed one were two plausible views could co-exist. In such cases of cases of disputes of interpretation of legal provisions, it would be totally unjustified to invoke the extended period of limitation by considering the assessee's view to be lacking bona fides. In any scheme of self-assessment it becomes the responsibility of the assessee to determine his liability of duty correctly. This determination is required to be made on the basis of his own judgment and in a bona fide manner. Since the interpretational issue was disputed which was ultimately set at rest in 2019, it can very well be presumed that the same would not amount to suppression and the acts were bona fide whereby the proviso that seeks to extend the period of limitation under Section 73 of the Act can be pressed into motion. The order of the learned Tribunal remitting back to the Commissioner to calculate the service tax liability for the period prescribed under Section 73(1) of the Act without invoking the proviso that seeks to extend the period of limitation appears to be justified - no question of law arises for consideration - Appeal dismissed.

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• 2024 (2) TMI 1133
  Valuation of service - consulting engineering service - non-inclusion of value of expenses incurred by them for accommodation, travelling and foods expenses which were incurred on the visiting engineers of the service provider - HELD THAT:- The matter is no longer res-integra as Hon ble Delhi High Court in the case of INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. VERSUS UOI. ANR. [ 2012 (12) TMI 150 - DELHI HIGH COURT] where it was held that What is brought to charge under the relevant Sections is only the consideration for the taxable service. By including the expenditure and costs, Rule 5(1) goes far beyond the charging provisions and cannot be upheld. The above order of Hon ble Delhi High Court has also been endorsed by Hon ble Supreme Court in the case of UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [ 2018 (3) TMI 357 - SUPREME COURT] where it was held that value of free supplies of diesel and explosives would not warrant inclusion while arriving at the gross amount charged on its service tax is to be paid. The impugned order-in-appeal is not sustainable and therefore set aside - appeal allowed.

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• 2024 (2) TMI 1132
  Levy of service tax - body corporate or not as provided in the definition of banking and financial services - interest income under the head Lease and Equipment Finance Income - interest income-rental - interest income-funding - suppression of facts or not - Extended period of Limitation - HELD THAT:- This issue has been considered by various Benches of the Tribunal and here we may refer to the observation of the Tribunal in the case of KANSAI NEROLAC PAINTS LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [ 2017 (2) TMI 262 - CESTAT MUMBAI ] where it was held that Hence, banking and other financial services provided by a banking company or a financial institution or a non- banking financial company or any other service provider similar to a bank or a financial institution are liable to service tax under Section 65(105)(zm) of the Finance Act, 1994. Department of Posts is not similar to a bank or a financial institution and hence does not fall within the category of any other similar service provider. Further, in the present case service tax under banking and other financial service has been demanded from the appellant on the lease and finance income received in respect of contract entered into prior to 16.08.2002. It is pertinent to note that financial leasing services provided by the appellant i.e. body corporate are taxable only from 16.08.2002 whereas in the present case service tax is sought to be demanded on the basis of the agreement prior to 16.08.2002 hence the impugned order confirming demand of service tax is liable to be set aside on this ground alone. Interest income-rental - HELD THAT:- The appellant received rent for renting equipment, further the perusal of sample copies of agreements will indicate that the appellant is only providing its equipment on rent basis to its customers and is not providing any financial leasing services. These services is entirely different from the service of financial leasing for the purpose of levy of service tax. Interest income-funding - HELD THAT:- For this purpose the appellant entered into equipment finance agreement with the customers which is on record whereby the purchaser could either make one time down payment for purchasing the equipment or could make the payment in installments as agreed between them. The ownership in the machine is not transferred to the customer in the beginning and the customer was to make payment in specified installments. This arrangement of sale and purchase cannot be subjected to service tax under financial leasing as has been done in the impugned order - Further, as per Section 67 of the act the interest income on loans is excluded from the value to calculate service tax on any service and the circular no. 80/10/2004-S.T. dated 17.09.2004 reiterates the same position. Further, as regards the finance income facility management, it is seen that this amount is received by the appellant for providing printing/copying equipment to the customers along with operator at the premises of customers and the customer paid to the appellant per impression charges based on the usage of the machine during a month - Ld. Commissioner has gone on presumption that this amount of Rs. 9,37,76,673/- has been received by the appellant for providing financial leasing service without taking into consideration the actual nature of the transaction. Hence, the demand is liable to be set aside. Extended period of limitation - suppression of facts or not - HELD THAT:- All the facts were in the knowledge of the department w.e.f. 2004 i.e. the appellant got itself registered with the service tax authorities under the banking and financial services and paid service tax on agreements entered into after 16.08.2002. Before issuing the show cause notice dated 22.10.2007 a series of correspondence transpired between appellant and department which shows the department was aware of the transactions but in spite of that the show cause notice was issued after delay of three years alleging suppression. Further, the appellant is not liable to pay service tax on agreements entered into prior to 2002. Further, the appellant was maintaining proper records of service tax paid and regularly filed returns. Moreover, the issue involved in the present case relates to interpretation of complex legal issues. Further, the appellant was subjected to regular audits and the demand of service tax is raised on the basis of audit objections. The impugned order is not sustainable in law and is set aside - appeal allowed.

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• 2024 (2) TMI 1131
  Classification of services - activity for laying of pipe line for irrigation projects - Erection, commissioning and installation services or not - time limitation - HELD THAT:- Since, it is undisputed that the activity under taken by the appellant is laying of pipeline for irrigation projects for the period involved under a composite contract, and the show cause notice also demands service tax under erection, commissioning and installation charges , we find that the entire demand needs to be set aside as unsustainable. It is noted that similar issue came up before the Larger Bench of the Tribunal in the case of M/S. LANCO INFRATECH LTD. AND OTHERS VERSUS VERSUS CC, CE ST, HYDERABAD [ 2015 (5) TMI 37 - CESTAT BANGALORE (LB)] and the Larger Bench, after considering the various decisions and the provisions of Finance Act, 1994 held that Where under an agreement, whether termed as works contract, turnkey or EPC, the principal contractor, in terms of the agreement with the employer/ contractee, assigns the works to a sub-contractor and the transfer of property in goods involved in the execution of such works passes on accretion to or incorporation into the works on the property belonging to the employer/ contractee, the principal contractor cannot be considered to have provided the taxable (works contract) service enumerated and defined in Section 65(105)(zzzza) of the Act. The above reproduced Larger Bench ratio would squarely cover the issue in favour of the appellant in the case in hand. Accordingly, the entire demand which has been raised by the show cause notice is liable to be set aside. There are strong force in the contentions raised by the Learned Counsel that prior to 01.06.2007 the demand on the appellant cannot be sustained in view of the judgment of the Apex Court in the case of STATE OF ANDHRA PRADESH ORS. VERSUS LARSEN TOURBO LTD. ORS. [ 2008 (8) TMI 21 - SUPREME COURT] , as it is the admitted fact that contracts which are awarded to the appellant are for supply, erection commissioning of various irrigation projects. That would mean that the entire contract is a works contract. The impugned order is set aside - appeal allowed.

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• Central Excise

• 2024 (2) TMI 1158
  Liability of Excise duty equal to Special Additional Duty of customs (SAD) under Section 3(5) of the Customs Tariff Act 1975 - Intraocular Lens cleared to DTA - SCN dated 2-6-2015 issued under Section 11A (1)/ (5) of the Central Excise Act 1944 is without jurisdiction since the said Section 11A (5) stood omitted with effect from 14-5-2015 - Extended period of limitation - suppression of facts or not - HELD THAT:- The exemption under N/N. 23/2003-CE is not required and further that the goods cleared in DTA, if imported, were also exempt from SAD under Sr. No.1 of N/N. 29/2010-CUS dated 27-2-2010 up to 16-3-2012 and thereafter under Sr. No.2 of N/N. 21/2012-Cus dated 17-3-2012 since the same are pre-packaged goods for retail sale to which provisions of Legal Metrology Act and Rules apply. Therefore, excise duty equal to SAD payable under the Proviso to Section 3 (1) of the Central Excise Act 1944, will be NIL. Consequently, the exemption under N/N. 23/2003-CE is not required. It is thus clear that exemption from Excise duty equal to SAD under Notification No.23/2003-CE is not required since the said goods if imported are exempt from SAD and therefore Excise duty equal to SAD payable under the Proviso to Section 3 (1) of the Central Excise Act 1944, will be NIL. The Show Cause Notice dated 27-5-2015, which is purportedly issued under Section 11A(1)/A (5) of the Central Excise Act 1944 was barred by time and not maintainable in law. If the Notice is purported to be issued under Section 11A(1), the same is barred by time, having been issued beyond the period of one year then specified in Section 11A (1). If the Notice is purported to be issued under Section 11A (5), the same is not maintainable in law, since the said Section 11A (5) stood omitted with effect from 14-5-2015. The show cause notice having been issued under a non-existing provision is not maintainable in law. Section 11A (5) read with Section 11A (4) applies in cases of fraud, collusion, wilful mis-statement, suppression of facts or contravention with intent to evade, none of which is present in this case. In the ER-2 Returns it is duly disclosed that the Appellant were availing Notification No.23/2003-CE. The Appellant have been subjected to audit from time to time. The Audit report records that the Appellant were availing Notification No.23/2003. The department was therefore fully aware that the Appellant were availing benefit of Notification no.23/2003. Moreover, No Dues certificate was also issued by the department at the time of exit from EOU. Accordingly, it is not a case of fraud, collusion, wilful mis-statement, suppression of facts or contravention with intent to evade and the larger period of limitation is inapplicable in the present case. The impugned order is not tenable both on merits and on limitation - appeal allowed.

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• 2024 (2) TMI 1157
  Valuation - taking local Maximum Retail Price (MRP) for calculating the aggregate of Customs duties (Basic, CVD, SAD, Cess) to arrive at the Excise duty payable by 100% EOU under the Proviso to Section 3(1) of the Central Excise Act 1944 - correctness of demanding Education Cess and Secondary and Higher Education Cess once again on the aggregate of customs duties which already includes such Cess on the basic customs duty and CVD - SCN purportedly issued under Section 11A (5) of the Central Excise Act 1944 is without jurisdiction since the said Section 11A (5) stood omitted with effect from 14-5-2015 or not - whether Notice is barred by time and the larger period of limitation apply since the goods were cleared after verification of duty payment and issue of No dues certificate by the central excise officer? HELD THAT:- It would be evident from the calculation that the Principal Commissioner has wrongly calculated the Basic customs duty on the MRP of the goods, which is contrary to the provisions of Proviso to Section 3 (1) of the Central Excise Tariff Act. As per Proviso to said Section 3 (1), Excise duty on goods manufactured by a 100% EOU and brought to any place in India shall be an amount equal to aggregate of customs duties leviable on like goods when imported into India and the value of such goods shall be as per the Customs Act 1962 and the Customs Tariff Act 1975. The said Acts do not provide for calculating the basic customs duty on the local Maximum Retail price (MRP) but require adoption of the transaction value as per Section 14 of the Customs Act 1962. Instead of taking such value which is mentioned in the Column before the Column of MRP on page 55 of the Appeal, the Principal Commissioner has taken the MRP, which is plainly erroneous. Accordingly, the assessable value taken for calculating the Basic Duty is ex-facie erroneous. As regards the CVD, the Principal Commissioner has wrongly calculated the same on MRP instead of MRP less abatement under Notification No. 49/2008-CE (NT) dated 24-12-2008. Accordingly, the value taken for calculation of CVD is also ex-facie erroneous. Further, the Principal Commissioner has wrongly taken Education Cess and Secondary and Higher Secondary Education Cess once again on the aggregate of customs duties, although the same were already considered while calculating the aggregate of customs duties. Extended period of limitation - HELD THAT:- Even otherwise, the Show Cause Notice dated 27-05-2015, which is purportedly issued under Section 11A (5) of the Central Excise Act 1944 was not maintainable in law since the said Section 11A (5) stood omitted with effect from 14-05-2015. The show cause notice having been issued under a non-existing provision is not maintainable in law. Further the said Section 11A (5) read with Section 11A (4) is applicable in cases of fraud, collusion, willful mis-statement, suppression of facts or contravention with intent to evade, none of which is present in this case. As evident from letter dated 22-5-2012 of the Superintendent, prior to de-bonding, the factory was visited by the Central Excise officers and the stock and calculation of duty were duly verified by the Central Excise officers. It is evident from the letter that the department was fully aware of availing of notification No.23/2003-CE. Therefore, the larger period of limitation is inapplicable in the present case. The impugned order is not tenable and is liable to be set aside - appeal allowed.

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• 2024 (2) TMI 1156
  Denial of CENVAT Credit - inputs/capital goods or not - HR, MS and SS plates received and utilized during 2003 to 2005 for setting up of Copper III plant - impugned order has disallowed such Cenvat credit on the ground that the plant and machinery so fabricated, are immovable and fixed to earth and cannot be called capital goods - HELD THAT:- There is no restriction in Rule 2(k) of Cenvat Credit Rules, 2004, for the availment of the Cenvat credit of the duty paid on goods used for manufacture of capital goods. All that the said rule requires is whether such capital goods are used for manufacture of excisable goods in the factory. Once this requirement is satisfied, the fact that such capital goods came into existence as an immovable property is irrelevant or immaterial to avail Cenvat Credit. The Appellants have used MS and SS plates used in the fabrication of chimneys. Chimneys are pollution control equipment and are thus specified capital goods under sub-clause (ii) of clause (A) of the definition of capital goods under Rule 2(a) of the Cenvat Credit Rules, 2004. The Hon'ble Supreme Court in COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS LTD. [ 2010 (7) TMI 12 - SUPREME COURT ] has examined the issue of eligibility of Cenvat credit availed on MS plates items used in the fabrication of chimneys. The Hon'ble Supreme Court has held that, once it is not under dispute that the impugned items are used in the fabrication of chimneys, Cenvat credit availed on the same cannot be denied. Thus, ground in impugned order is also rejected. Iron and steel items used in the fabrication of supporting structures for capital goods - HELD THAT:- Cenvat credit has been denied on iron and steel items used in the fabrication of supporting structures for capital goods is eligible. The Appellants have availed Cenvat credit on H.R. M.S. S.S. plates used in the fabrication of supporting structures of capital goods. There are cetena of decision wherein it has been held that the credit of steel used to support capital goods is eligible for credit. Denial of credit on account of an inordinate delay in availing Cenvat credit in violation of Rule 4(1) of the Cenvat Credit Rules, 2002 and/or 2004 - HELD THAT:- There is no specific time limit prescribed for availment of Cenvat credit on inputs under Rule 4(1) of the Cenvat Credit Rules. The sub-rule which prescribes that CENVAT credit in respect of inputs may be taken immediately in Rule 4(1) makes it clear that the said provision is an enabling provision and enables the assessee to avail Cenvat credit immediately on receipt of the inputs. There are no merit in the impugned order. The same is set aside and the appeal is allowed.

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• CST, VAT & Sales Tax

• 2024 (2) TMI 1155
  Refund claim - rejection of refund on the ground that the assessment order dated 23.08.2012 was not available on the DVAT Portal - HELD THAT:- It is informed by the learned counsel for respondents that petitioner had produced the relevant original documents, certified copy of the order as well as original F- Forms which have been duly verified. In view of the fact that the basis of the impugned order was non-availability of certain record, which has now been verified by the department, the impugned order dated 24.02.2022 is liable to be set aside and the matter calls for a remit. The matter is remitted to the competent authority to pass consequential orders in respect of the refund application of the petitioner - petition disposed off.

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• Indian Laws

• 2024 (2) TMI 1154
  Right to Terminate Agreement - delay in the delivery of possession of the apartment - The jurisdiction and powers of the National Consumer Disputes Redressal Commission (NCDRC) - Scope and interpretation of the terms of the Contract - Purchase of 4BHK apartment, on the sixth floor of the proposed building - Seeking unconditional Refund of amount paid with interest - HELD THAT:- The date of offer of possession , under Clause 1.14, linked with issuance of the Occupation Certificate was distinct and separate from the date of delivery of possession for fit outs and Clause 11.3 unequivocally provided the consequences in the event of delay in that regard. The right of election given thereunder to the appellants to either continue or to terminate the Agreement within ninety days from the expiry of the grace period was absolute and it was not open to the NCDRC to apply its own standards and conclude that, though there was delay in handing over possession of the apartment, such delay was not unreasonable enough to warrant cancellation of the Agreement. It was not for the NCDRC to rewrite the terms and conditions of the contract between the parties and apply its own subjective criteria to determine the course of action to be adopted by either of them. The fact that the appellants were anxious to avoid the additional tax liability, owing to the introduction of the Goods and Service Tax regime, cannot be held against them or be imputed to them as an underhand motive for backing out of the Agreement. Avoidance of tax is neither illegal nor equivalent to tax evasion and, therefore, the urgency shown by the appellants in trying to complete the process quickly so as to avoid an additional tax burden was natural. Further, it cannot be presumed that the appellants, who were willing to spend over 7.5 ₹ Crore for the apartment, would back out at the eleventh hour only because the tax component was increasing by ₹40 lakh or so. There are no hesitation in holding that the NCDRC overstepped its power and jurisdiction in ignoring the binding covenants in the Agreement and in introducing its own logic and rationale to decide as to what the future course of action of the parties and more particularly, the appellants, should be - as it is informed that the appellants did not choose to act upon the belated offer of the respondent-company, in its letter dated 29.11.2017, and are still intent on terminating the Agreement as per Clause 11.3 of the Agreement, we set aside the order dated 09.11.2022 passed by the NCDRC and allow Consumer Complaint No. 35 of 2018, directing the respondent-company to refund the deposited amount of ₹2,25,31,148/- in twelve equal monthly installments, through post-dated cheques, with simple interest thereon @ 12% p.a., from the date of receipt of the said amount or parts thereof till actual repayment. The first such installment shall be payable on the 5th of April, 2024, and the succeeding installments shall be payable on the fifth of each calendar month thereafter, till fully paid. Appeal allowed.

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• 2024 (2) TMI 1153
  Contempt application preferred by the appellant alleging non-compliance of order passed by the learned Single Judge of the High Court - entitlement to refund of the excess payment made by the petitioner over and above the notified price - requirement of furnishing all documents relating to refund of the excess amount - HELD THAT:- Suffice it to say that the claim of the appellant for refund pertaining to the third period, i.e. 1st January, 2007 till March, 2008 stands concluded with the rejection of SLP(Civil) No. 21019 of 2010 vide order dated 9th September, 2010 passed by this Court. Admittedly, the appellant has not been refunded the amount for the period running from 1st January, 2007 till March, 2008 and, therefore, the learned Single Judge was not justified in discharging the respondents in the contempt case without ensuring payment of the refund amount with interest to the appellant herein. Regarding the issue of interest on the refund for the period running from 1st January, 2005 to 11th December, 2005, the learned Single Judge rejected the claim of the appellant herein holding the said demand to be exaggerated. While drawing such inference, the learned Single Judge completely ignored the judgment rendered by this Court in Ashoka Smokeless Coal Industries(P) Ltd. and Ors. [ 2005 (12) TMI 610 - SUPREME COURT] wherein a pertinent direction had been given to make the refund of the excess amount with interest @ 12% per annum. Admittedly, as per the affidavit filed by the respondents, the interest which has been applied on the refund amount for the period between 1st January, 2005 to 11th December, 2005 is at the bank rate i.e. 3.5% per annum. Evidently thus, the respondents have failed to faithfully comply with the orders passed by the Jharkhand High Court as well as this Court. Thus, it is hereby directed that the appellant shall be entitled to interest @ 12% per annum on the refund amount for the period running from 1st January, 2005 to 11th December, 2005. The interest @ 3.5% per annum, already paid, shall be deducted from the differential amount. The appellant shall also be entitled to receive refund of the excess amount paid for the period between 1st January, 2007 till March, 2008 with interest @ 12% per annum in the same terms as directed by this Court vide order dated 9th September, 2010. The amount as directed above shall be paid to the appellant within a period of two months from today failing which, the officers concerned shall be made personally liable to pay the interest amount to the appellant. Appeal disposed off.

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• 2024 (2) TMI 1152
  Access to Technology in Courts - Hearings through hybrid mode or video conferencing - Lack of Uniformity - Infrastructure and Connectivity - Requirement to file affidavit detailing video conferencing hearings taken place in the last three months - whether any courts are declining to permit video conferencing hearings - request to assist the court with data on hybrid hearings in the tribunals under various ministries of the Union Government on the next date of hearing - HELD THAT:- During the course of the hearing, it has emerged that whereas several High Courts do have facilities for video conferencing, very few High Courts are operating through the hybrid mode of hearing. The infrastructure which is required for conducting hybrid hearings may be of a different order as compared to the infrastructure for video conferencing. Bearing in mind the above situation as it has emerged across the country in the High Courts, Mr Gaurav Agrawal and Mr K Parameshwar, counsel, nominated as amici curiae. The amici curiae are requested to collate all the information which has been provided in the affidavits which have been filed before this Court in a tabulated chart so that further effective orders can be passed by this Court. The amici curiae may also distribute the work in connection with the High Courts between them and individually contact the Registrars General/Registrars (IT) of the High Courts so that necessary information can be placed before this Court in that regard. The amici curiae shall also place before this Court the steps which have been taken by all the High Courts to facilitate e-filing. The use of technology by the Bar and the Bench is no longer an option but a necessity. Members of the Bench, the Bar and the litigants must aid each other to create a technologically adept and friendly environment. The directions given below must be implemented by all concerned stakeholders in letter and in spirit. (i) After a lapse of two weeks from the date of this order, no High Court shall deny access to video conferencing facilities or hearing through the hybrid mode to any member of the Bar or litigant desirous of availing of such a facility; (ii) All State Governments shall provide necessary funds to the High Courts to put into place the facilities requisite for that purpose within the time frame indicated above; (iii) The High Courts shall ensure that adequate internet facilities, including Wi-Fi facilities, with sufficient bandwidth are made available free of charge to all advocates and litigants appearing before the High Courts within the precincts of the High Court complex; (iv) The links available for accessing video conferencing/hybrid hearings shall be made available in the daily cause-list of each court and there shall be no requirement of making prior applications. No High Court shall impose an age requirement or any other arbitrary criteria for availing of virtual/hybrid hearings; (v) All the High Courts shall put into place an SOP within a period of four weeks for availing of access to hybrid/video conference hearings. In order to effectuate this, Justice Rajiv Shakdher, Hon ble Judge of the High Court of Delhi is requested to prepare a model SOP, in conjunction with Mr Gaurav Agrawal and Mr K Parameshwar, based on the SOP which has been prepared by the e-Committee. Once the SOP is prepared, it shall be placed on the record of these proceedings and be circulated in advance to all the High Courts so that a uniform SOP is adopted across all the High Courts for facilitating video conference/hybrid hearings; (vi) All the High Courts shall, on or before the next date of listing, place on the record the following details: (a) The number of video conferencing licences which have been obtained by the High Court and the nature of the hybrid infrastructure; (b) A court-wise tabulation of the number of video conference/hybrid hearings which have taken place since 1 April 2023; and (c) The steps which have been taken to ensure that Wi-Fi/internet facilities are made available within every High Court to members of the Bar and litigants appearing in person in compliance with the above directions. (vii) The Union Ministry of Electronics Information Technology is directed to coordinate with the Department of Justice to ensure that adequate bandwidth and internet connectivity is provided to all the courts in the North-East and in Uttarakhand, Himachal Pradesh and Jammu and Kashmir so as to facilitate access to online hearings; (viii) All High Courts shall ensure that adequate training facilities are made available to the members of the Bar and Bench so as to enable all practising advocates and Judges of each High Court to be conversant with the use of technology. Such training facilities shall be set up by all the High Courts under intimation to this Court within a period of two weeks from the date of this order; and (ix) The Union of India shall ensure that on or before 15 November 2023, all tribunals are provided with requisite infrastructure for hybrid hearings. All Tribunals shall ensure the commencement of hybrid hearings no later than 15 November 2023. The directions governing the High Courts shall also apply to the Tribunals functioning under all the Ministries of the Union Government including CESTAT, ITAT, NCLAT, NCLT, AFT, NCDRC, NGT, SAT, CAT, DRATs and DRTs. List the proceedings on 6 November 2023.

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• 2024 (2) TMI 1151
  Maintainability of petition - availing the remedy of filing the revision petition - Dishonour of Cheque - exercise of discretion rationally, by the Trial Court interim compensation - HELD THAT:- Petitioner cannot be permitted to seek a second revision in the garb of the present petition under Section 482 Cr.P.C. In Rajan Kumar Manchanda v. State of Karnataka, [ 1987 (11) TMI 404 - SUPREME COURT] , the Supreme Court observed that the bar under Section 397(3) Cr.P.C. cannot be overcome merely by stating that petition was filed invoking inherent powers of the High Court under Section 482 Cr.P.C. In Surender Kumar Jain v. State Anr., [ 2012 (1) TMI 352 - DELHI HIGH COURT] this Court observed that the High Court does enjoy inherent powers under Section 482 Cr.P.C. but that power has to be exercised sparingly and with great caution, particularly, when the person approaching the High Court has already availed remedy of first revision in the Sessions Court. The power under Section 482 Cr.P.C. has to be sparingly exercised and should not be used as a substitute for a second revision albeit there can be no doubt that when there is a serious miscarriage of justice or abuse of process of the Court or where mandatory provisions of law are not complied with and when the High Court feels that the inherent jurisdiction has not been exercised correctly by the Revisional Court, it can interfere as held by the Supreme Court in Kailash Verma [ 2005 (1) TMI 406 - SUPREME COURT] . Thus, the question is whether Petitioner has made out an extraordinary case warranting interference by this Court exercising jurisdiction under Section 482 Cr.P.C. Whether the Trial Court has exercised its discretion rationally, keeping into account the facts of the case and the conduct of the Petitioner and if the exercise of discretion warrants any interference by this Court while exercising inherent powers under Section 482 Cr.P.C.? - HELD THAT:- Impugned order dated 18.08.2023 shows that the learned Magistrate has passed a reasoned order supporting the award of compensation in favour of the Respondent. Trial Court observed that Petitioner has admitted her signatures on the cheque in question as well as the factum of issuance of the cheque from her account, leading to the mandatory presumptions under Sections 118A and 139 of the NI Act against her to the effect that the cheque was drawn by her for a consideration and the Respondent Company had received the same in discharge of a debt/liability, from the Petitioner. Trial Court rightly observed that the only factor which could then have come to the rescue of the Petitioner while deciding the application was that Petitioner was not responsible for dragging or delaying the proceedings. Power under Section 482 Cr.P.C. has to be exercised sparingly and not as a substitute for second revision. High Court can entertain a petition under Section 482 Cr.P.C. where there is serious miscarriage of justice and abuse of process of Court or an error of jurisdiction or violation of mandatory provisions of law, however, this provision cannot be invoked calling upon the High Court to substitute its findings for that of the Trial Court or the Revisional Court, particularly, on findings of fact rendered therein or to interfere where discretion has been exercised by the Trial Court on sound reasoning - It is equally settled if the impugned orders record a finding of fact as concurrent findings, based on detailed appreciation of material before it, the High Court should be extremely slow in interfering. The object of Section 482 Cr.P.C. is to set right a patent defect or an error of jurisdiction of law which has to be a well-founded error in the given case. This Court sees no reason to exercise jurisdiction under Section 482 Cr.P.C. in light of the findings of the Trial Court and a concurrent finding by the Revisional Court and the petition is dismissed being devoid of merits - petition dismissed.

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• 2024 (2) TMI 1130
  Agony of trial - Forgery of the passport application - whether a prima facie case, to subject the Appellants to the agony of trial, has been made out - Whether the actions of the Appellants prima facie constitute the offence of cheating under Section 420 IPC? - Whether there has been a prima facie case made out for forgery under Sections 468 and 471 IPC? - Whether there has been a violation of Section 12(b) of the Passports Act, 1967? The offence of cheating under Section 420 IPC - HELD THAT:- The background of this case and the chronology of events squarely indicate that it is the touchstone of a marital dispute. The insinuations made by Respondent No. 2, even if they possess an iota of truth, have miserably failed to prima facie establish the elements of cheating and thus, the accusation made against the Appellants under Section 420 IPC must fall flat. The offence of forgery under Sections 468 and 471 IPC - HELD THAT:- The offences of forgery and cheating intersect and converge, as the act of forgery is committed with the intent to deceive or cheat an individual. Having extensively addressed the aspect of dishonest intent in the context of cheating under Section 420 IPC, it stands established that no dishonest intent can be made out against the Appellants. Our focus therefore will now be confined, for the sake of brevity, to the first element, i.e., the preparation of a false document. The determination of whether the Appellants prepared a false document, by forging Respondent No. 2 s signature, however, cannot be even prima facie ascertained at this juncture - It is also significant to highlight that the proceedings as against the concerned Passport Officer, who was implicated as Accused No. 4, already stand quashed. In such like situation and coupled with the nature of allegations, it cannot be appreciated as to why the Appellants be subjected to the ordeal of trial. Questions overlooked by the lower courts - HELD THAT:- The Trial Magistrate should have approached the complaint with due care and circumspection, recognising that the allegations do not pertain to offences against property or documents related to property marks. Instead of wielding judicial authority against the Appellants, the Trial Magistrate should have exercised prudence, making at least a cursory effort to discern the actual victim or victimiser . The failure to do so is both fallible and atrocious - The sum and substance of the above discussion is that the elementary ingredients of cheating and forgery are conspicuously missing. Thus, the continuation of the criminal proceedings against the Appellants is nothing but an abuse of the process of law. In the context of Section 12(b) of the Passports Act, 1967 - HELD THAT:- In the present case, it is crucial to consider that the State FSL report explicitly stated that the alleged forgery of Respondent No. 2 s signatures on the passport application was inconclusive. Moreover, the cognizance of such like offence can be taken only at the instance of the Prescribed Authority. No complaint to that effect has been disclosed against the Appellants. This Court, therefore, will exercise caution before invoking such severe offences and penalties solely on the basis of conjectures and surmises. The conduct exhibited by Respondent No. 2 - HELD THAT:- The Appellants were unnecessarily implicated and dragged into criminal proceedings, thereby causing undue hardship to them. These instances shed light on Respondent No. 2 s conduct preceding the initiation of the present proceedings and provide insight into his motivations for instigating the same - It is undeniable that despite the evident discord between the Appellants and Respondent No. 2, resulting in numerous complaints and legal proceedings, the issue at hand has adversely impacted the rights and interests of the minor child. The right to travel abroad is a fundamental right of an individual, albeit not absolute, and subject to established legal procedures. The impugned judgment of the High Court dated 18.02.2021, and that of the Trial Magistrate dated 15.03.2018, are hereby set aside - Appeal allowed.

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