Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 28, 2020
Case Laws in this Newsletter:
GST
Income Tax
Benami Property
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Anti-profiteering measure - Constitutional validity of Section 171 of the Central Goods and Services Tax Act 2017 read with Rule 126 of the Central Goods and Services Tax Rules 2017 - all the writ petitions should be transferred to the High Court of Delhi, where earlier writ petitions are already pending. - SC
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Release of detained goods alongwith vehicle - levy of penalty - The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. - HC
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Effect of order of Moratorium declared under IBC - proceeding pending before the GST authorities under the GST Act 2017 - the aspect as to whether a pending proceeding before GST authority is also a proceeding as provided in Section 14- (1) (a) has not been examined by the Commissioner of GST - matter restored - HC
Income Tax
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Income accrued in India - Having considered the facts in totality and discussed in preceding paras, we do not see any commercial or economic rationale or ease of doing business in incorporating the applicant in Mauritius and interposing it in the JV. - the applicant is not entitled to benefit under Article 13(4) of Indo-Mauritius DTAA in regard to gains arising from the transaction of sale of shares. - AAR
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Waiver of interest - Since the CCIT has no power to grant waiver of interest in the light of the specific instruction of the Central Board Of Direct Taxes, the Court in the exercise of its power under Article 226 of the Constitution of India can order waiver applying the legal principles applicable in the case of winding up of a company - HC
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Unexplained loan u/s 68 - Since the assessee explained that sufficient loan amount have been taken from the family for purchase of property for family, then in that event, A.O. shall have to consider the explanation of assessee in the light of fact that assessee made investment in purchase of property from the family source. - AT
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It cannot be said that by giving opportunity of being heard for hearing immediately one day assessing officer has discharged his obligation of giving opportunity of being heard. Thus Ld. CIT(A) was right in observing that the AO has erred in making the addition on account of unexplained income of the assessee - AT
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Revision u/s 263 - Additions u/s 56(2)(vii)(b) - application of proviso is entirely a factual matter which has not been examined at all, and, in any event, it is a highly contentious issue whether an allotment letter issued by a private builder, even if that allotment be bonafide, can be equated with DDA allotments referred to in CBDT Circular no 471 dated 15.10.1986. - AT
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Penalty levied u/s 271(1)(c) - Scope of penalty proceedings u/s 271(1)(c) of IT Act cannot be widened later to include within its scope such additions which were not sought to be covered within the scope of penalty U/s 271(1)(c) of IT Act, at the time when penalty proceedings were initiated and assessment order was passed. - AT
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Agreed additions - Though, there is no legal bar on challenging an agreed addition, but the fact of the matter is that a valid challenge can be laid before the appellate authorities only if such an admission before the AO was not in consonance with law. - AT
Customs
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Condonation of delay in filing appeal - service of order - Time and again, the Higher Constitutional Courts direct the learned fact finding Tribunals below not to be trigger-happy to dispose of the cases for default of appearance or on mere delay. - HC
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It is no part of revenue authority’s duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue. They must act reasonably and fairly. - HC
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Refund claim - Exemption from IGST on goods imported under EPCG Scheme - the amendment of Notification No.16/2015-Cus vide Serial No.1 of Notification No.79/2017 dated 13th October, 2017, would also apply to imports made during the period 1.7.2017 to 13.10.2017. Trade Notice 11/2018 dated 30.6.2017 to the extent it is stated therein that under Chapter 5 importers would need to pay IGST is hereby quashed and set aside - HC
Direct Taxes
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Benami transaction or not - The law recognises jointness only in the event of existence of a coparcenary and no coparcenary is pleaded. In relation to partnership also, the law distinguishes between partnership firm under the Partnership Act, 1932 and a Joint Hindu Family Business Firm to which the Partnership Act is not applicable - HC
Indian Laws
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Dishonor of cheque - insufficiency of funds - This Court finds from the order passed by the learned A.C.J.M., Sherghati that he has simply acted as a post office in a routine and mechanical manner by forwarding the complaint petition to the police station for institution of FIR and investigation - HC
Service Tax
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Service tax audit - Jurisdiction post GST era - Sections 173 and 174 of the GST Act of 2017 - The impugned notices should be stayed till June 12, 2020 or until further orders whichever is earlier. - HC
Central Excise
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Refund / re-credit of CENVAT credit - When a debit to the CENVAT credit account could be treated as a mode of payment of duty at the time of removal of goods, we fail to understand how the limitation under Section 11B of the Act could be denied when only restoration of such claim is only by way of reversal of that debit entry only upon the returning such CENVAT Invoices and the vendors not having availed any CENVAT credit, being the undisputed facts. - HC
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Refund / re-credit of CENVAT credit - When a debit to the CENVAT credit account could be treated as a mode of payment of duty at the time of removal of goods, we fail to understand how the limitation under Section 11B of the Act could be denied when only restoration of such claim is only by way of reversal of that debit entry only upon the returning such CENVAT Invoices and the vendors not having availed any CENVAT credit, being the undisputed facts. - HC
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Refund of Excise Duty - Already 26 years have passed due to one mistake in the decision taken by the Assessing Authority - the Asseesing Authority passed an order denying the refund partially, invoking the technical plea of limitation ignoring the exemption under the Second Proviso of Section 11B of the Act, whereby no limitation would apply when payment of Duty is treated as payment made 'under protest'. - Refund allowed - HC
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Benefit of reduced rate of duty - Denial of benefit on the ground that paver blocks are different from building blocks - even if it is accepted that appellant had classified the same under Chapter Heading 68101990 and puts the same in “others” category, still the same is covered under Notification No. 10/2006-CE for reduced rate of duty and comparison of the same with solid and hollow building blocks by the Commissioner (Appeals) in denying such concessional rate of duty appears to be irregular. - AT
Case Laws:
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GST
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2020 (2) TMI 1188
Anti-profiteering measure - Constitutional validity of Section 171 of the Central Goods and Services Tax Act 2017 read with Rule 126 of the Central Goods and Services Tax Rules 2017 - time limitation - HELD THAT:- It is considered appropriate and proper that, in the interests of a uniform and consistent view on the law, all the writ petitions should be transferred to the High Court of Delhi, where earlier writ petitions are already pending.
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2020 (2) TMI 1187
Release of goods alongwith the vehicle - Section 129(1)(a) of the GST Act - an Appeal under Section 107 (1) of the Act was filed - HELD THAT:- When, however, the Appellate Court instead of adjudicating as to whether the amount was payable under Section 129 (1) (a) or under Section 129 (1) (b) adjudicated on different aspects as well on 28.1.2020, the petitioner has filed the instant petition under the Article 226 of the Constitution of India - Learned counsel for the petitioner further submitted that under Section 168 of the U.P. GST Act, 2017, a certain Government Order had also been issued on 1.7.2017 (annexed as annexure no. 6 to the writ petition) which states that when the invoice is there it would be deemed that the person from whose possession the invoice is found would the owner and when the invoice came from the petitioner, it shall be deemed to be the owner. Matter requires consideration - However, if the petitioner deposits the amount as is payable under Section 129(1)(a) of the GST Act, the goods and the vehicle shall be released.
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2020 (2) TMI 1186
Release of detained goods alongwith vehicle - levy of penalty - principles of natural justice - HELD THAT:- While issuing notice, this Court directed that the vehicle as well as the goods be released, upon payment of the tax, in terms of the impugned notice - The writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law. It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of SYNERGY FERTICHEM PVT. LTD VERSUS STATE OF GUJARAT [ 2019 (12) TMI 1213 - GUJARAT HIGH COURT] . It is now for the applicant to make good his case that the show cause notice, issued in GST-MOV-10, deserves to be discharged - Application disposed off.
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2020 (2) TMI 1185
Effect of order of Moratorium declared under IBC - proceeding pending before the GST authorities under the GST Act 2017 - HELD THAT:- The Commissioner takes a view that by the order dated 26.08.2019, the National Company Law Tribunal has declared a moratorium under Section 14 (Section 13) of The Insolvency and Bankruptcy Code, 2016 against the corporate debtor in respect of execution of any judgment and decree or order of any court of law, tribunal, arbitration panel or other authority. Accordingly, in the order of the Commissioner a question was raised whether issuance of show cause notice by the GST authorities would mean to be an execution of an order or it be treated as decree against the petitioner. By raising such question, the objection that the further proceeding is not maintainable because of the order of moratorium of the National Company Law Tribunal was overruled. From the order dated 15.1.2019, it is discernible that the aspect as to whether a pending proceeding before GST authority is also a proceeding as provided in Section 14- (1) (a) has not been examined by the Commissioner of GST and consequently the implication thereof i.e. if it is a proceeding whether the order of moratorium would also cover the said proceeding, has also not been looked into. The matter is remanded back for a fresh consideration by examining the aspect as to whether the order of moratorium of the National Company Law Tribunal also covers the proceeding pending before the GST authorities under the GST Act 2017 - Petition allowed by way of remand.
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2020 (2) TMI 1184
Reduction in the rate of GST - Situation pre and post GST implementation - It is pointed out by learned senior counsel for the petitioner that the respondents have acted unreasonably, inasmuch, as, for the period prior to reduction of GST from 12% to nil w.e.f. 27.07.2018, the DGAP had computed the base price on average basis. However, for the period after the GST rate became nil w.e.f. 27.07.2018, the base price has been worked out item by item. HELD THAT:- Our attention has been drawn to the tabulation filed by the petitioner before the DGAP, which shows that in respect of several items sold by the petitioner, after the reduction of GST to nil, the price actually fell, however, while computing the profiteered amount; such cases have been excluded from consideration - Prima facie, it appears to us that the impugned order needs consideration and the petitioner has been able to make out a strong case for grant of interim relief. List on 24.09.2020.
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Income Tax
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2020 (2) TMI 1183
Income accrued in India - Capital gains derived by a 'resident' of a contracting state from the alienation of property other - Indo-Mauritius DTAA in regard to gains arising from the transaction of sale of shares - HELD THAT:- In the instant case the applicant was incorporated few days before the JV was formed and has no independent sources of funds or sources of income nor has any fiscal independence. All the funds are with the holding companies. The applicant has no tangible assets, business activities except for owning the shares of the JV. Subjecting the facts to various tests i.e., Fiscal nullity Test, Commercial/business substance Test, Look at Principle Test, Investment Participation Test, Time duration Test, Business operations Period in India Test, Generation of taxable revenues in India Test, Scheme and Dominant Purpose Test etc., the applicant fails the tests being a tax avoidance device, the dominant purpose of its interposing is to avoid taxes in India. As emphasized before us by the Ld. AR that introduction of BSDM helped in doing business and providing supportive business environment. BSDM is an entity created two weeks before the filing of bid, it has no financial background, past experience or other unique skills to facilitate the instant business venture. The applicant could not provide any rationale or commercial basis for interposing of entity at fag end of the bidding process. The learned AR also could not provide any evidence as to how BSDM helped in doing business or providing support for the project. The points in its favor of applicant seem to be that it is tax resident of Mauritius holding a valid T RC and legal owner of shares which it disposed subsequently. We are unable to agree with the logic that the entity was brought in for ease of doing business or for operational reasons and to provide supportive business environment. The reason proffered by Ld. AR lacks substance and merit. First objection of the Revenue was admission of new entity at later stage was not ordained by EOI - AR has indicated that in the EOI filed by the consortium, it was stated that the final share holdings by three SA airport operators will be finalised once the requirement Of RFP are known and that GVK and the SA airport operators submitted the names of the respective entities in the legally binding technical and financial bid which was accepted by AAI. We are in agreement with the Revenue that no-where in the EOI it was mentioned that a new member would be brought in at a later stage. The uncertainty was only limited to the shares of three SA airport operators i.e., ACSA, Old Mutual and Bidvest and not to the composition of the consortium per se. Revenue was the interposing of the applicant was without any commercial reason - AR has argued that that it is a general practice on the part of MNCs to highlight the financial and technical competency of the group as a whole and while investing separate SPVs are formed for commercial reason, ease of doing business and supported business environment in determining the jurisdiction of SPV. Having considered the facts in totality and discussed in preceding paras, we do not see any commercial or economic rationale or ease of doing business in incorporating the applicant in Mauritius and interposing it in the JV. Other plea of the Ld. AR is that AAI has approved the bid being fully aware that BSDM was prime member of the JV entity. The plea is not germane to issue at hand as AAI is not concerned with the interpretation of treaty and interposing of any entity for tax avoidance and therefore acceptance of bid by AAI is not an endorsement or justification for granting treaty benefit to the applicant. Alternate plea of the Ld. AR is that even if it is assumed without admitting that the accusation of shares in MIAL was done by applicant, solely with a view to take advantage of the beneficial provisions of Indo-Mauritius DTAA, the benefit cannot be denied as there is no limitation of benefit provision (LOB) in the DTAA. The plea is not tenable for the reason that the facts point towards a tax avoidance device and the Hon'ble Apex court in the case of Vodafone [ 2012 (1) TMI 52 - SUPREME COURT] has clearly mentioned that though LOB and Look through provisions cannot be read into a tax treaty but if it is established that the Mauritian company is interposed as a device, it is open to the tax Department to discard the device and take into consideration the real transaction between the parties and the transaction would be subjected to tax. We are of the considered opinion that the applicant is not entitled to benefit under Article 13(4) of Indo-Mauritius DTAA in regard to gains arising from the transaction of sale of shares.
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2020 (2) TMI 1182
Waiver of interest under Section 234A, Section 234B and Section 234C read with Section 119 (2) (a) - petitioner Company being wound up - HELD THAT:- Section 119 of the Income Tax Act, 1961 has been incorporated to grant waiver from payment of interest in case of genuine hardship. Therefore, the Central Board of Direct Taxes has given power to issue instructions and direction to be followed while granting waiver of interest. This power is either exercised by the Board and/or by senior officers of the Income Tax Department like the first respondent. From a reading of CBDT s Notification dated 26.06.2006 bearing reference No.400/29/2002-IT(B) petitioner is not specifically covered by any of the situation contemplated in the above notification. Therefore, no fault can be found with the impugned order of the 1st respondent as the 1st respondent is bound by the above notification though the petitioner company was ordered to be wound up by an order. The Central Board of Direct Taxes while issuing the above notification has not factored a situation like the present case where an assessee is legally incapacitated from making any payments as it was ordered to be wound up. It was under a legal disability. Though the notification has not considered the above situation petitioner is entitled for a partial relief for the above reason dehors the above notification. The date of winding up dates back to the date of petition and during the aforesaid period, there was a legal disability to pay the tax by the company as the official liquidator obtained leave of the company court under the Companies Act, 1956. Since the 1st respondent has no power to grant waiver of interest in the light of the specific instruction of the Central Board Of Direct Taxes, the Court in the exercise of its power under Article 226 of the Constitution of India can order waiver applying the legal principles applicable in the case of winding up of a company, The effect of an order of winding up is to put the company into the hands of the official liquidator for completing the process of liquidating it. Till an order of the Court for distribution of the company s assets is obtained and assets are distributed, the properties of the company continue to be that of the company. The company under liquidation continues to exist as a juristic personality only till an order under Section 481 of the Companies Act, 1956 is passed for its eventual dissolution. It is only thereafter, the company ceases to exist in the eye of law. Thus, during the period in dispute between 18.06.2001 and 27.10.2006, the petitioner company by itself was under a disability and could not discharge any liability without the permission of the court. In this case no attempt was made for recovery of tax from the petitioner company by the Income Tax Authorities by obtaining suitable orders of this court nor the official liquidator took any steps in that direction. It should also be borne in mind that the petitioner had filed income tax return in time which also culminated in separate assessment orders of the assessing officers on 16.03.1998, 25.03.1999 and 31.03.1999 respectively for the respective Assessment Years. During this period, the petitioner company was facing a threat of being wound up apart from threat of arrest of its directors. The petitioner has also demonstrated that there was an en mass resignation by the directors of the company on account of financial difficulties which plagued the petitioner company and that the petitioner company was unable to defend itself effectively in these proceedings. The Managing Director of the petitioner company was also later arrested and was remanded to judicial custody. During the aforesaid period, the company had become a shell company. During the aforesaid period, notices under Section 148 of the Income Tax Act, 1961 were issued to the petitioner for the Assessment Year 1996-1997 on 13.06.1999 and for the Assessment Year 1997-98 on 11.10.2000 to reopen the assessment. Thus, the petitioner company was handicapped from paying the tax that was re-assessed as it was ordered to be wound. At that stage, the interest of the petitioner was to be represented by the Official Liquidator before the Income Tax Authorities by filing appeal against the re-assessment orders who failed to do so. As the petitioner was under a legal disability during the period between 18.06.2001 and 27.10.2006, during the subsistence of winding up order and since the petitioner company was under the control of this court and the official liquidator, I am of the view, this is a fit case for granting partial relief to the petitioner. There should be a waiver of interest under Section 234A, Section 234B and Section 234C of the Income Tax Act, 1961 for the period between 18.06.2001 and 27.10.2006 alone. Remit the case back to the 2nd respondent to compute the interest payable by the petitioner from the due date upto 18.06.2001 and for the period commencing from 27.10.2006 upto the actual date of payment under the aforesaid provision of the Income Tax Act, 1961. While computing the interest payable by the petitioner, the 2nd respondent shall exclude the period between 18.06.2001 and 27.10.2006. 2nd respondent shall compute the interest and communicate to the petitioner for the aforesaid period within a period of 30 days from date of receipt of a copy of this order. Petitioner shall pay the amount determined by the 2nd respondent within 15 days thereafter. In case, there is a failure on the part of the petitioner to pay an amount within the aforesaid period, the relief granted to the petitioner herein shall come to an end sine die and the impugned order shall stand revived.
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2020 (2) TMI 1181
Unexplained loan u/s 68 - disproportionate income of the creditors - loan amount have been taken from the family for purchase of property for family - HELD THAT:- A.O, did not doubt the identity of the creditors and their creditworthiness. The A.O. merely doubted genuineness of the transaction because of the disproportionate income of the creditors as regards the loan advanced to the assessee. In case A.O. was having any doubt on any of the point, he could have summoned all the creditors and record their statements on oath under section 131 of the I.T. Act, 1961, to find-out the truth. Since all the creditors are having sufficient funds in their Bank accounts and they have confirmed giving loan to the assessee, initial burden upon assessee is discharged to prove all the three ingredients of Section 68 of the I.T. Act, 1961, i.e., identity of the creditors, their creditworthiness and genuineness of the transaction particularly when all the creditors are assessed to tax and transactions are routed through banking channel only. A.O, however, did not make any enquiry into the matter on the documentary evidences furnished by the assessee and merely rejected the claim of assessee on irrelevant reasons that the creditors have disproportionate income to that of the loan advanced to the assessee. A.O. failed to examine the creditworthiness of the creditors from the source explained in their Bank accounts. Since no further investigation have been carried out by the A.O. on the documentary evidences filed by assessee, therefore, A.O. cannot fasten the assessee with such liability under section 68 of the I.T. Act, 1961. The A.O. failed to carry his suspicion to logical conclusion by further investigation. In the present case has even proved source of the source of the creditors. Therefore, there is no question of considering it to be unexplained credits in the hands of the assessee. The A.O. suspected the loan amount because the assessee filed return of income at ₹ 30 lakhs only and made investment of ₹ 11.65 crores. Since the assessee explained that sufficient loan amount have been taken from the family for purchase of property for family, then in that event, A.O. shall have to consider the explanation of assessee in the light of fact that assessee made investment in purchase of property from the family source. In the absence of any investigation from the side of the A.O. on the documentary evidences filed on record, there were no justification to make the addition. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. - Decided in favour of assessee.
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2020 (2) TMI 1180
Addition on account of explained income - addition on the basis of DVO's report - HELD THAT:- Issue decided in SMT. USHA RANI TALLA AND OTHERS [ 2015 (7) TMI 250 - ITAT DELHI] basis of which it could be said that the said that the investment shown by the appellant was understated and that anything above what was disclosed by the appellant. Thus, the condition precedent for making reference to the DVO by invoking the provisions of Sec. 142A was not satisfied in the present case. Moreover, on perusal of the assessment order, it is noted that nowhere the AO has mentioned that what are the mistakes and unreliability has been found out by the AO in the books of accounts of the appellant. Thus, the AO has not pointed out any defects in the books as far as related to the investment made by the appellant. AO has erred in referring the matter to the DVO and consequently the DVO's report on the value of investment in the property cannot replace the actual purchase value shown in the purchase deed - Assessing Officer has erred in adopting the value of the property as estimated by the DVO by replacing the value shown in the purchase deed. assessing officer has not given sufficient opportunity of being heard to the assessee. It cannot be said that by giving opportunity of being heard for hearing immediately one day assessing officer has discharged his obligation of giving opportunity of being heard. Thus Ld. CIT(A) was right in observing that the AO has erred in making the addition on account of unexplained income of the assessee and accordingly rightly directed the AO to delete the addition in dispute - Decided against revenue
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2020 (2) TMI 1179
Transfer pricing addition - international transaction of `Provision of Carpet designing, planning and estimation services - Comparable selection - HELD THAT:- Referring to carpet design services of assessee companies functionally dissimilar with that of assessee need to be deselected from final list. Also excluding certain companies on the basis of higher turnover. Accentia Technologies Ltd., Eclerx Services Ltd.and Infosys BPO Ltd to be excluded from final list. Send the matter back to the AO/TPO for fresh determination of ALP of the international transaction in dispute in accordance with the directions given supra - Appeal is allowed for statistical purposes.
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2020 (2) TMI 1178
Levy of penalty u/s 271(1)(c) - Defective notice - AO has not struck the relevant portion of the from to indicate as to whether the penalty is for concealment of income or for furnishing inaccurate particulars of income - no clear cut satisfaction has been recorded by AO as to whether the assessee has concealed the particulars of income or furnished inaccurate particulars of income - HELD THAT:- We find similar issue arose before the Hon ble Bombay High Court in the case of Goa Coastal Resorts Recreation [ 2020 (1) TMI 93 - BOMBAY HIGH COURT ] wherein the Hon ble High Court held that penalty is not leviable. AO was not justified in levying penalty u/s 271(1)(c) of the Act and therefore direct its deletion. Appeal of the assessee is allowed.
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2020 (2) TMI 1177
Revision u/s 263 - difference in stamp duty value and consideration is taxable u/s 56(2)(vii)(b) which the AO has not taxed - amount of advances given to Ankur Orbit Enterprises which is received back by the appellant and used by the appellant to make payments of properties purchased by the appellant in 2009 as according to the Pr. GIT, the repayment is not clear and verifiable - HELD THAT:- We find that there is no material whatsoever to indicate, leave aside establish, that the Assessing Officer had examined the application of Section 56(2)(vii)(b) at all. Learned counsel s plea that this provision to section 56(2)(vii)(b) comes into play, overlooks the fact that application of proviso is entirely a factual matter which has not been examined at all, and, in any event, it is a highly contentious issue whether an allotment letter issued by a private builder, even if that allotment be bonafide, can be equated with DDA allotments referred to in CBDT Circular no 471 dated 15.10.1986. It is not each and every allotment by a builder which can be equated with the allotment letter by the DDA; that aspect has to be examined on merits and it is to be seen whether the terms of the scheme of allotment and construction of flats/houses by the cooperative societies or institutions are similar to those mentioned in para 2 of Board Circular No. 471 as is stipulated in CBDT circular No. 672. Para 2 of the CBDT circular no. 471. Clearly, no exercise was carried out to even examine this aspect of the matter. This inertia on the part of the Assessing Officer renders the order erroneous and prejudicial to the interests of the revenue. Similar is the case with respect to the loan of ₹ 3.30 crores. No efforts were made to examine genuineness of the loan at all, and the mere fact that it has been paid back would not take the matter outside the ambit of scrutiny by the Assessing Officer. AO thus clearly remained passive on the facts which clearly called for some basic inquiries. As a matter of fact, so far as application of section 56(2)(vii)(b) AO did not examine the matter as all, and there was no occasion to examine whether the proviso to Section 56(2)(vii)(b) would come into play. The evidences being produced by the assessee now were never examined by the AO, and, even with these evidences, the matter cannot be concluded one way or the other. The matter needs to be examined in detail. As regards the borrowing of ₹ 3.30 crores from Ankur Orbit Enterprises, there is nothing before us to show that the matter was examined in reasonable detail by the Assessing Officer. In view of these discussions, as also bearing in mind entirety of the case, we uphold the impugned revision order passed by the learned PCIT, and decline to interfere in the matter. - Decided against assessee.
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2020 (2) TMI 1176
Addition to the opening and closing stock of inventories - HELD THAT:- Merely relying upon the orders passed by his predecessor in office in assessee s own case for the assessment year 1996 97 onwards, learned Commissioner (Appeals) has upheld the addition made by the Assessing Officer. Notably, while deciding assessee s appeals for the assessment years 1996 97, 1997 98, 1998 99, 2000 01 and 2001 02, the Tribunal in Hon'ble Supreme Court in CIT v/s Woodward Governor India Pvt. Ltd., [2009 (4) TMI 4 - SUPREME COURT] held that the value of closing stock is not to include the liability on account of exchange fluctuation. Thus, ultimately, the Tribunal deleted the addition made to the opening and closing stock. Following the aforesaid decision, the Tribunal again decided the issue in favour of the assessee in the assessment year 2003 04, in an appeal being by deleting the addition made on account of adjustment made to the closing stock. The same view was reiterated by the Tribunal over and again while deciding assessee s appeal in the assessment year 2004 05. Thus, following the consistent view of the Tribunal in the preceding assessment years, as referred to above, the addition made by the Assessing Officer on account of adjustment to the opening and closing stock has to be deleted. Disallowance u/s 14A r/w rule 8D - HELD THAT:- Now it is fairly well settled that rule 8D is applicable from the assessment year 2008 09. Therefore, the Assessing Officer has completely gone wrong in computing the disallowance under section 14A of the Act by applying rule 8D. Considering the relevant facts, we are of the view that disallowance under section 14A of the Act in the impugned assessment year should be restricted to 5% of the dividend income earned during the year. These grounds are partly allowed. Addition on account of reimbursement of cost incurred on behalf of the Associated Enterprises (AEs) - HELD THAT:- Undisputedly, both the Assessing Officer and learned Commissioner (Appeals) have recorded a concurrent finding of the fact that the assessee has failed to furnish any supporting evidence to demonstrate that the reimbursement made by the AEs was at arm's length price. Therefore, the Transfer Pricing Officer has added a mark up of 12.5% on estimate basis to the cost incurred for determining the arm's length price of the service provided. Before us, the assessee has furnished certain additional evidences by way of Debit Notes to demonstrate that the reimbursement was on the basis of actual cost incurred without any mark up. In our considered opinion, the additional evidences furnished by the assessee will have a crucial bearing in deciding the arm's length nature of transaction with the AEs. We are inclined to admit the additional evidences furnished by the assessee. However, since these evidences were not furnished either before the Assessing Officer or before learned Commissioner (Appeals), to provide a fair opportunity to the Revenue to evaluate the evidences and take a decision on the matter, we are inclined to restore the issue to the Assessing Officer for fresh adjudication after due opportunity of being heard to the assessee. Adjustment to the arm's length price of the international transaction with the AE has to be made qua the international transaction and cannot be made at the entity level - Admission of additional ground - HELD THAT:- It is the contention of the learned Authorised Representative that if the arm's length price is computed purely on the basis of transaction with the AE, the margin will fall within 5% of the margin of the comparables requiring no further adjustment. Therefore, the issues raised regarding acceptability or otherwise of certain comparables may not have to be decided in the impugned assessment year. Keeping in view the aforesaid submissions of the assessee, we restore the issue back to the file of the Assessing Officer for computing the margin of the assessee by taking into consideration only the transaction with the AE and not at entity level. In case, it is found that assessee s margin falls within 5% of the margin of the rest of the selected comparables, there may not be any need for adjudicating the dispute relating to the comparables in the impugned assessment year. However, the issues relating to the comparables are kept open for adjudication if they arise in any other assessment year in future.Additional ground is allowed for statistical purposes
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2020 (2) TMI 1175
Penalty levied u/s 271(1)(c) - assessee has furnished inaccurate particulars of its income while claiming the expenditure for which neither the liability has arisen nor revenue has accrued - CIT-A deleted the penalty - HELD THAT:- Penalty proceedings u/s 271(1)(c) were neither initiated by the AO during assessment proceedings nor by the Ld. CIT(A) during the appellate proceedings in respect of the aforesaid disallowance - CIT(A) has also not levied any penalty under Section 271(1)(c) of I.T. Act. Scope of penalty proceedings u/s 271(1)(c) of IT Act cannot be widened later to include within its scope such additions which were not sought to be covered within the scope of penalty U/s 271(1)(c) of IT Act, at the time when penalty proceedings were initiated and assessment order was passed. Regarding disallowance and consequent addition amounting to aforesaid ₹ 102,60,80,000/- was highly disputable issue, on which two different views were legitimately possible. There was full disclosure of materials facts and circumstances by the assessee in the Returns of Income and during assessment proceedings; and that no relevant information of fact was withheld by the assessee from the revenue s authorities during assessment proceedings. When there was full disclosure of materials facts and circumstances by the assessee in the Return of Income and during assessment proceedings; then, on a the disputable issue of quantum addition, on which two different views are legitimately possible, of which the one favourable to the assessee has been adopted by the assessee; eventually, the Assessee may or may not succeed in the quantum proceedings and the disputable issue, on which two different views were possible, may eventually be decided against the Assessee in quantum proceedings Assessee cannot be burdened with penalty u/s 271(1)(c) if on a disputable issue of quantum addition, on which two different views were legitimately possible, the Assessee decided to adopt the view which was favourable to the assessee; in a case in which all necessary details were filed by the Assessee in support of the claim and when no material inaccuracies were found in these details, and when the assessee is not guilty of suppression of any material facts. In quantum proceedings, when two different views are legitimately possible on a disputable claim made by the assessee; one of which is favourable to the assessee, the multiplicity of legitimate views and disputability of the claim has the effect of excluding the scope of penalty U/s 271(1)(c) in respect of such disputable claim even if the disputable claim is decided against the assessee in quantum proceedings; because in such a case the disputable claim made by the assessee neither amounts to concealment of particulars of income nor to furnishing of inaccurate particulars of income CIT(DR) has failed to bring any facts and circumstances legal provision or judicial precedents to our attention to persuade us to take a view different from the view taken by the Ld. CIT(A) deleting the aforesaid penalty vide his impugned appellate order dated 01.12.2016 - this is not a fit case for penalty under Section 271(1)(c) - Decided in favour of assessee
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2020 (2) TMI 1174
Addition u/s 68 - HELD THAT:- Assessee declared, inter-alia, loan credit of ₹ 2,69,000/- in the name of M/s. Yashoda Construction. Though, the relevant evidence was not filed at the assessment stage because of paucity of time, the assessee did furnish copy of return of M/s. Yashoda Construction along with Profit and Loss Account and Balance Sheet, indicating that the said creditor had acknowledged such a balance receivable from the assessee, which was also reflected in his Balance Sheet. Once the creditor had admitted the transaction and also incorporated the same in his accounts, there remained nothing more to prove the genuineness of the transaction, more so, when the AO of the creditor also did not raise any doubt over it. Considering the above facts, order to delete the addition. Ad-hoc disallowance towards Salary to labourers - AO found certain infirmities in the details furnished in as much as the expenses were mostly backed by self-made vouchers - HELD THAT:- Though, there is no legal bar on challenging an agreed addition, but the fact of the matter is that a valid challenge can be laid before the appellate authorities only if such an admission before the AO was not in consonance with law. If, on the other hand, an admission is based purely on factual matrix, then the assessee cannot challenge the same before the appellate authorities without there being any contrary evidence. The reason is obvious that when an assessee agrees for an addition, the AO does not proceed further in his examination on that issue and closes it by recording the concession of the assessee. The later challenge to such an admission de hors any contrary evidence cannot bring the arms of the clock back enabling the AO to continue from the stage where he left the issue on the assessee agreeing for the surrender. In such a scenario, the assessee cannot be allowed to resile from the agreed addition made before the AO in the backdrop of a pure factual panorama. The extant addition, being an agreed addition on purely factual aspects without any thing contrary, cannot, ergo, be interfered with. I, therefore, countenance the impugned order on this score. This ground fails.
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2020 (2) TMI 1173
Rectification application u/s 254 - provisions of section 56(2)(vii)(b) are not applicable is founded on the argument that the immovable property is received without consideration - HELD THAT:- In the instant case, there is no dispute that the Agreement for Sale is dated 10.09.2014. We have held that the Letter of Allotment dated 27.04.2012 which has been produced at para 4 hereinabove cannot be considered as the date of execution of agreement by any stretch of imagination. In this context, we have relied on the judgment of the Hon'ble Supreme Court in Alapati Venkataramiah v. CIT Alapati Venkataramiah v. CIT [ 1965 (3) TMI 21 - SUPREME COURT] , CIT v. Podar Cements Pvt. Ltd. [ 1997 (5) TMI 2 - SUPREME COURT] wherein it is held that once the executed documents are registered, transfer will take place on the date of execution of documents and not on the date of registration of documents. It is well-settled that immovable property is not conveyed by delivery of possession, but by a duly registered deed. Further, it is the date of execution of registered document, not the date of delivery of possession or the date of registration of document, which is relevant. In the instant case, the Agreement for Sale is dated 10.09.2014. Section 56(2)(viii)(b)(ii) clearly stipulates that where any immoveable property is received for a consideration which is less than the stamp duty value of the property by an amount exceeding ₹ 50000/-, the stamp duty value of such property as exceeds such consideration , shall be chargeable to tax in the hands of the individual or HUF as income from other sources. It is applicable from A.Y. 2014-15. Thus it is crystal clear that the aforesaid section is applicable to the instant case. In the written submission filed by the assessee before the CIT(A), it has been mentioned at page 3 that the provisions of section 56(2)(vii)(b) was introduced by the Finance Act, 2013 w.e.f. 01.04.2014 and hence, the amended provision is not applicable to the case of the assessee, since the appellant was entitled to the immovable property during the AY 2013-14. The same submission was reiterated during the course of hearing and hence, it cannot be said that it was never mentioned. The decision of the Hon'ble Supreme Court in the case of National Cement Mines Industries Ltd. [ 1961 (1) TMI 11 - SUPREME COURT] has been referred in the impugned order just to explain that in construing a commercial transaction the true nature and character of the transaction have to be ascertained from the covenants of the contract in the light of the surrounding circumstances. There is no mistake in referring to the above decision of the Hon'ble Supreme Court because only a settled principle has been illustrated therein. The conclusion in the impugned order is based on the judgment of the Hon'ble Supreme Court in the case of Alapati Venkataramiah (supra) and Podar Cements (P.) Ltd. (supra). A perusal of the above facts clearly indicate that the applicant has not pointed out any mistake apparent from the record. A mistake apparent on the record must be an obvious mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. What the applicant wants is a review of the order passed by the Tribunal. The Tribunal is a creature of the statute. The Tribunal cannot review its own decision unless it is permitted to do so by the statute. - MA rejected.
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Benami Property
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2020 (2) TMI 1172
Benami transaction - petition sued for partition of immoveable properties and dissolution of partnership firms in terms of the Agreement/Family Settlement dated 11th March, 2014 between the plaintiffs and the defendants - HELD THAT:- Plaintiffs are required to take a categorical stand, whether are bound by the partition affected vide the Agreement/Family Settlement dated 11th March, 2014 or are proceeding on the premise that there has been no partition and if are proceeding on the latter premise, to satisfy that they have a share in accordance with law in the properties, title to which is held by others and/or right in the partnership firms, notwithstanding being not a partner thereof. The law recognises jointness only in the event of existence of a coparcenary and no coparcenary is pleaded. In relation to partnership also, the law distinguishes between partnership firm under the Partnership Act, 1932 and a Joint Hindu Family Business Firm to which the Partnership Act is not applicable. Though the Benami Law also admits of exceptions but no case of the title holders or the partners being trustees or having held property for the benefit of others, has been pleaded. The counsel for the plaintiffs seeks time to consider. - Matter adjourned.
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Customs
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2020 (2) TMI 1171
Provisional release of seized goods - goods were seized on the ground of over valuation - HELD THAT:- Respondent Nos.1 and 2 to decide the claim of the petitioner under the Customs Act, 1962 for provisional release of goods in accordance with law, rules, regulations, Government policy applicable to the facts of the present case and as early as possible and practicable preferably within a period of two weeks. Petition disposed off.
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2020 (2) TMI 1170
Condonation of delay in filing appeal - service of order - application for the condonation of delay rejected stating that the Order-in-Appeal was despatched on 11.04.2014 through Speed Post and there is a huge delay of 4 1/2 years in filing the Appeal - HELD THAT:- The learned Tribunal has not mentioned anything about the acknowledgment of the speed post containing Order-In-Appeal, to the Assessee. If the order would have despatched in 'Speed post with Acknowledgment Due', the Department ought to have produced the Acknowledgment Card bearing the signatures of the Assessee. The learned Tribunal only got satisfied with the fact that the Order-In-Appeal was sent to the Assessee through Speed Post and has dismissed the Application for Condonation of delay, without verifying the fact that the Order-In-Appeal has been received by the Assessee or not. Mere despatching of order does not imply the receipt of the same. If the Assessee would have received the order, it could have filed the Appeal in time. Therefore the learned Tribunal was not justified in dismissing the Application on the ground of limitation. Time and again, the Higher Constitutional Courts direct the learned fact finding Tribunals below not to be trigger-happy to dispose of the cases for default of appearance or on mere delay. Matter remanded back to the Tribunal for deciding the Appeal afresh on merits - appeal allowed by way of remand.
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2020 (2) TMI 1169
Demand of interest on the sale proceeds of the auction conducted - respondents submits that the petitioner has no locus standi to file the present Writ Petition under Section 226 of the Constitution of India - HELD THAT:- The petitioner became entitled to the amount finally pursuant to the direction of the Tribunal. Section 150 of the Customs Act, 1962 provides a procedure for sale of imported goods and application of sale proceeds thereof - the Section prescribes on the manner in which the proceeds of the sale of the confiscated goods has to be appropriated and adjusted. After adjustment of the proceeds, balance if any, has to be paid back to the owner of the goods. Since there was delay in paying the amount to the owner. Section 150 of the Customs Act, 1962 was amended and the above proviso was inserted vide Section 52 of the Finance Act, 2011 with effect from 08.04.2011. In the present case, imports were made during the month of April 1998. The importer apparently abandoned the goods. Under these circumstances, the petitioner sent repeated representations to the respondents to permit the petitioner to either take back the goods to Hong Kong or to sell the goods to any other buyer in India in accordance with the provisions of the EXIM Policy as in force at the relevant point of time - However, that was not allowed. The Tribunal by its order dated 27.7.1999 remanded the case back to the 1st respondent to consider the issue afresh as the respondents had already auctioned the imported goods. Instead of refunding the balance amount after due adjustment and appropriation the respondents have dragged on the proceedings for over a period of two decades. Therefore, the question is whether the petitioner should now be relegated to work out his remedy in a civil court as was submitted by the learned counsel for the respondents or whether the court can award interest to the petitioner and if so at what rate? - The necessity for filing a suit under Section 9 of the Civil Procedure Code would arise only where there are disputed questions of fact that needs to be established after trial. Such exercise would result in waste of time. The department will also have to be spare its official to appear in Court - there is no point in relegating the petitioner to approach a civil Court for getting interest on such delayed payment and deny the relief. As there are no disputes in the facts and circumstances of the present case I am inclined to take up the case and pass order. The denial of benefit of the notification to the appellant was unfair. There can be no doubt that the authorities functioning under the Act must, as are in duty bound, to protect the interest of the Revenue by levying and collecting the duty in accordance with law - no less and also no more. It is no part of their duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue. They must act reasonably and fairly. The 2nd respondent is therefore directed to calculate the interest at the varying rate of interest that was notified and in force for the purpose of refund Section 27H of the Customs Act and determine the interest payable to the petitioner on the delayed payment of ₹ 10.72,624/- calculated at the expiry of six months from the date of sale of the imported goods. The 2nd respondent shall calculate the aforesaid amount within a period of three months from the date of receipt of copy of this order.
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2020 (2) TMI 1168
Refund claim - Exemption from IGST on goods imported under EPCG Scheme - rejection on the ground that Notification No. 33/2015-2020 dated 13.10.2017 of the Ministry of Commerce and Notification No.79/2017-Cus dated 13.10.2017 of the Ministry of Finance under which such imported goods were exempted from payment of IGST, came into force only on 13.10.2017, but the petitioner had filed the bill of entry on 3.8.2017 - exemption of import of such goods from payment of IGST. HELD THAT:- For the purpose of examining the validity of the petitioner s claim for exemption from payment of IGST in respect of capital goods imported by it on the strength of the authorisation held by it under the EPCG Scheme prior to the issuance of Notification No.79/2017-Cus exempting import of such goods from payment of IGST, it may be necessary to refer to the relevant provisions of the Foreign Trade Policy and the notifications issued in this regard from time to time - In the exercise of powers under section 5 of the Foreign Trade (Development and Regulation) Act, 1992, the Central Government has notified the Foreign Trade Policy 2015-20 vide Notification No.1/2015-20 which came into effect from 1st April 2015. The objective of the EPCG Scheme is to facilitate import of capital goods for producing quality goods and services to enhance India's export competitiveness. Towards that end, authorisations are issued to importers permitting them to import capital goods at zero customs duty. An authorisation is valid for import for eighteen months from the date of issue of authorisation, and under the authorisation the importer is allowed to import capital goods at zero customs duty. The scheme also casts an obligation on the importer who imports capital goods under the Scheme at zero customs duty to fulfill export obligation at six times of the duty saved. Thus, while granting exemption from payment of customs duty, a corresponding obligation has been cast on the importer to fulfill export obligation as provided under the EPCG scheme. Thus, exemption from payment of customs duty under the EPCG Scheme is not an exemption simpliciter, but is an exemption with a corresponding obligation on the authorisation holder to export goods equivalent to six times the duty saved on import of such capital goods. On conjoint reading of the Chapter 5 of the Foreign Trade Policy and Notification No.16/2015-Cus dated 1st April, 2015, it is evident that though the notification is a statutory notification issued in exercise of powers under section 25 of the Customs Act, it is not an exemption notification simpliciter, but an exemption notification issued to give effect to the EPCG Scheme floated under the Foreign Trade Policy which is an incentive scheme. Thus, in the opinion of this court, Notification No.16/2015-Cus dated 1st April, 2015 and the amending notifications cannot be equated with statutory notifications ordinarily issued under section 25 of the Customs Act, granting exemption from payment of customs duty - Considering the nature of the EPCG Scheme, it is evident that it is an incentive scheme whereby a promise has been held out that the importer would be charged zero customs duty on the goods imported by it, provided it exports goods equivalent to six times the duty saved on capital goods. The petitioner applied for and was issued an authorisation on 31.3.2017, and hence, was not required to pay any customs duty as well as additional duty of customs on such import in view of Notification 16/2015 dated 1st April, 2015. Since vide Notification No.26/2017, the words and figures sub-sections (1), (3) and (5) of section 3 of the Customs Tariff Act were inserted, the petitioner was not granted the benefit of exemption from payment of IGST, despite the fact that it was an additional duty introduced by way of sub-section (7) and sub-section (9) of section 3 of the Customs Tariff Act. The petitioner therefore paid the IGST - Subsequently, vide Notification No.33/2015-2020, dated 13th October, 2017, issued in exercise of powers conferred by section 5 of Foreign Trade (Development and Regulation) Act, 1992, read with paragraph 1.02 of the Foreign Trade Policy, 2015-20, as amended from time to time, the Central Government made amendments in the Foreign Trade Policy 2015-2020. Chapter 5 of the Foreign Trade Policy, 2015-2020 makes provision for the EPCG Scheme, which is an incentive scheme. The incentive given is that the importer holding a valid authorisation for capital goods covered under the EPCG Scheme would be exempted from payment of customs duty and additional duty under section 3 of the Customs Tariff Act, and correspondingly, the importer would be obliged to fulfill export obligation to the extent provided in the Scheme. Since exemption from payment of customs duty and additional duty can only be granted under section 25 of the Customs Act, to give effect to the promise held out in Foreign Trade Policy 2015-2020, Notification No.16/2015-Customs dated 1st April, 2015 came to be issued exempting import of goods covered by a valid authorisation issued under the EPCG Scheme in terms of Chapter 5 of the Foreign Trade Policy, from the whole of the customs duty leviable under the First Schedule to the Customs Tariff Act and the whole of the additional duty leviable under section 3 of the Customs Tariff Act. In the facts of the present case, though the exemption notification has been issued under section 25 of the Customs Act, it has been issued for the purpose of implementing the EPCG Scheme which holds out a promise that import of capital goods under the scheme would be exempt from payment of additional duty under section 3 of the Customs Tariff Act. Therefore, the notification has to be read in the context of the EPCG policy keeping in mind the object envisaged by the policy and not in the strict sense as in the case of a general exemption under section 25 of the Customs Act. It is held that the amendment of Notification No.16/2015-Cus vide Serial No.1 of Notification No.79/2017 dated 13th October, 2017, would also apply to imports made during the period 1.7.2017 to 13.10.2017. Trade Notice 11/2018 dated 30.6.2017 to the extent it is stated therein that under Chapter 5 importers would need to pay IGST is hereby quashed and set aside - Petition allowed - decided in favor of petitioner.
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Service Tax
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2020 (2) TMI 1167
Service tax audit - Jurisdiction post GST era - Sections 173 and 174 of the GST Act of 2017 - respondent authorities has placed reliance on a coordinate Bench judgment of the Calcutta High Court in M/S. GITANJALI VACATIONVILLE PRIVATE LIMITED ANR. VERSUS THE UNION OF INDIA ANR. [ 2019 (1) TMI 917 - CALCUTTA HIGH COURT] wherein the Court had refused to pass any interim order. HELD THAT:- The impugned notices dated December 13, 2018 and April 25, 2019 should be stayed till June 12, 2020 or until further orders whichever is earlier. Let the matter appear in the combined monthly list for the month of June 2020 under the heading Hearing .
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Central Excise
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2020 (2) TMI 1166
Refund of CENVAT credit - rejection on the ground of limitation under Section 11B of the Central Excise Act, 1944 - Appellant/Assessee has submitted that the limitation prescribed under Section 11B of the Act does not apply when instead of claiming the refund in cash, the Assessee merely claims the restoration of the CENVAT credit - HELD THAT:- The Division Bench of Allahabad High Court in M/S KRISHNAV ENGINEERING LTD. VERSUS CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL AND ANOTHER [ 2015 (12) TMI 234 - ALLAHABAD HIGH COURT] held in para 7 that where it is not a case of refund of duty but a case of reversal of an entry in the books relating to CENVAT credit, the limitation under Section 11B of the Act will not apply. The learned Tribunal has erred in applying the limitation of the Section 11B of the Act in the present case, where the refund of duty was not claimed in cash as such, but only by the restoration of CENVAT credit by the Assessee - When a debit to the CENVAT credit account could be treated as a mode of payment of duty at the time of removal of goods, we fail to understand how the limitation under Section 11B of the Act could be denied when only restoration of such claim is only by way of reversal of that debit entry only upon the returning such CENVAT Invoices and the vendors not having availed any CENVAT credit, being the undisputed facts. The learned Revenue authorities could not deny the adjustment entry of restoration of CENVAT credit in the present case irrespective of limitation. Rule 4(5)(a)(iii) of the Cenvat Credit Rules, 2004 is clear and it permits the Assessee to credit the CENVAT account book, if the goods are received back after 180 days. Therefore, in the face of a clear Rule permitting the said adjustment entry, merely because the Assessee made a claim in prescribed Form R under Rule 127, his claim of adjustment entry could not be refused by the authorities below. The appeal filed by the Assessee deserves to be allowed and the same is accordingly allowed - questions of law are answered in favour of the Assessee and against the Revenue.
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2020 (2) TMI 1165
Manufacture of un-machined castings - it was claimed by the Writ petitioner/Assessee that, it has filed the classification lists as to explain what amount of Castings the Assessee Company produced, the same was denied by the Revenue and ultimately, the Assessing Authority passed an order against the Assessee which was appealed before the First Appellate Authority - HELD THAT:- Even though the learned counsel for the Assessee just and again reiterated that the Assessee has produced the classification list to establish that, it had manufactured unmachined castings, the fact remains that both the Appellate Authority as well as CESTAT concurrently held that no such classification list has been filed as claimed by the Assessee - In such view of the matter while sitting in the Writ jurisdiction under Article 226 of the Constitution of India, we cannot go over the said factual finding which has been concurrently found by both the Authorities. If at all the Assessee still feels to file classification list to establish its case for getting exemption of the duty, it is open to the Assessee to agitate the same in the manner known to law. Petition dismissed - decided against petitioner.
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2020 (2) TMI 1164
Refund of Excise Duty - payment made under protest - applicability of time limitation u/s 11B of the Central Excise Act - HELD THAT:- The exemption in the present case was granted to the specific Assessee, in the specific facts and for specific quantity of the Coin Blanks manufactured and supplied by the Assessee. This was done for the purpose of maintaining the value of Coin Blanks itself - The payment of excise duty at the time of clearance of goods in anticipation of exemption right from the day one was therefore with the ardent hope of real and effective exemption and the refund of duty paid by the Assessee under compulsion for clearance of the goods. Such a payment even though not labelled by the Assessee to have been paid 'under protest', could very well be treated as payment made by the Assessee 'under protest' only as per the provisions of Section 11B of the Act paving the way for the rightful refund of excise duty in consonance with Article 265 of Constitution of India which does not permit the State to collect the tax or duty without authority of law. The refund is for clearances of goods in question pertains to period from 1994. Already 26 years have passed due to one mistake in the decision taken by the Assessing Authority. The intention of Adhoc exemption itself was a glaring fact available before the Assessing Authority. Particularly the clarification issued on 30.06.1995 makes it clear that exemption was applicable for the entire quantity of goods supplied but ignoring this fact, the Asseesing Authority passed an order denying the refund partially, invoking the technical plea of limitation ignoring the exemption under the Second Proviso of Section 11B of the Act, whereby no limitation would apply when payment of Duty is treated as payment made 'under protest'. The present Writ Petition filed by Assessee Steel Authority of India Ltd., deserves to be allowed - Petition allowed - decided in favor of petitioner.
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2020 (2) TMI 1163
Benefit of reduced rate of duty - N/N. 10/2006-CE dated 01.03.2006 - Denial of benefit on the ground that paver blocks are different from building blocks - HELD THAT:- Going by the show-cause notice, it would appear that an artificial distinction is made by the respondent-department between hollow and solid concrete blocks and paver blocks by taking reference from Indian Standard Specifications and paver blocks were excluded from the purview of the notification on the ground that those were primarily used in the parking area of a building, road junctions, warehouse terminal, foot-path etc. and not used as concrete mason building blocks, for which the same is distinguishable from concrete blocks and this forms the basis of the duty demand. A close scrutiny of Notification No. 10/2006-CE, would reveal that all goods covered under Chapter Heading 68 except Heading 6804, 6805, 6811, 6812, 6813 are covered in the said notification for concessional rate of duty @ 8% and not 16% - Therefore, even if it is accepted that appellant had classified the same under Chapter Heading 68101990 and puts the same in others category, still the same is covered under Notification No. 10/2006-CE for reduced rate of duty and comparison of the same with solid and hollow building blocks by the Commissioner (Appeals) in denying such concessional rate of duty appears to be irregular. Extended period of limitation - HELD THAT:- The appellant company has placed it on record vide letter dated 01.04.2007 that on the advised of its Chartered Accountant, they have reduced payment of Excise duty from 16% to 8% as they are covered under the said notification. Therefore, invocation of extended period on the ground that said letter was replied back by the respondent-department with a negative note, without its reference been cited in the order of the Commissioner (Appeals), cannot be said to be in conformity to the statutory provisions for invocation of extended period also. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2020 (2) TMI 1162
Valuation - supply of Supari - rejection of declared value - Enhancement of value - revisionist has disclosed the sale of Supari at the rate of 44-45 per kg and instead the Assessing Authority was of the view that revisionist has undervalued the price of the said product, which according to him was ₹ 90/- per kg only with a view to evade tax - HELD THAT:- The entire exercise undertaken by the assessing authority in rejecting the books of account and subsequently carrying out best judgment assessment is on the basis that the price of Supari is ₹ 90/-. No material has been disclosed from which the assessing authority could determine the said price. Not only the material should have been duly considered by him in his order, but due opportunity should be provided to the assessee to rebut the same. In absence of due disclosure of the material which resulted in formation of opinion, the order of the Assessing Authority is clearly vitiated, as well as the First Appellate Authority and the Tribunal. The order Commercial Tax Tribunal, Lucknow deserves to be set-aside and the matter is remanded to the Assessing Authority to pass a fresh order after giving an opportunity of of hearing to the petitioner - Petition allowed by way of remand.
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2020 (2) TMI 1161
Requirement of Revision/Re-assessment - Branch Transfer - non-compliance with the terms under Rule 4 (3-A) of the Central Sales Tax Rules - Form-F duly verified - HELD THAT:- The Tribunal was right in setting aside the order passed by the First Appellate Authority holding that the compliance with the requirement under Rule 4(3-A) of the Rules is mandatory, in view of the Circular issued by the Principal Commissioner and Commissioner of Commercial Taxes, in Acts Cell III/124278/94 dated 23.12.1994 reflected in paragraph 34 of its order of the learned Tribunal. Petition dismissed.
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Indian Laws
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2020 (2) TMI 1160
Dishonor of cheque - insufficiency of funds - complainant claims that when the disputes between the parties are pending before the different courts, it looks highly suspicious that the complainant would issue cheque in favour of the accused persons - HELD THAT:- The matters relating to defect in the goods and deficiency in service are admittedly pending consideration before the State Consumer Dispute Redressal Commission where respondent no. 5 had claimed a compensation of ₹ 80,00,000/- with interest. About the alleged threat given to respondent no. 5 over telephone again a complaint case is pending at Sherghati which is not under challenge in the present case. To this Court, therefore, no difficulty in accepting the plea of the petitioners that this case is more by way of a grievance over the lodgement of the cheque issued by respondent no. 5 at the time of availing the financial assistance. The said cheque stood dishonoured on presentation in want of sufficient fund and apparently the respondent no. 5 while premediating a legal action and filing of a complaint case against him for the alleged dishonour of cheque brought the present complaint and got it referred to Amas Police Station by the learned A.C.J.M., Sherghati. This Court finds from the order passed by the learned A.C.J.M., Sherghati that he has simply acted as a post office in a routine and mechanical manner by forwarding the complaint petition to the police station for institution of FIR and investigation - There was no statement in the complaint petition that the steps required to be taken under Section 154(3) Cr.P.C. was complied with by the informant. This Court would also observe that the learned A.C.J.M., Sherghati has recorded the order on the body of the petition itself which cannot be said to be a healthy practice. Apart from the aforesaid fact that no statement was made in the complaint petition that there was a compliance of Section 154(3) Cr.P.C., this Court finds on the face of the allegations made in the FIR that a bare reading of the same would not disclose any offence - this Court finds it just and proper to exercise its extraordinary power under Article 226 of the Constitution of India to quash and cancel the First Information Report giving rise to Amas P.S. - The First Information Report is, thus, quashed and this application is allowed.
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