Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
February 5, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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GST - E-way bill rules postponed - Notification
Income Tax
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Disallowance u/s 40A(2)(b) - related party - AO has not brought any comparables from the market to make out that the current payment is excessive and unreasonable within the meaning of section 40A(2)(b). - AT
Service Tax
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Renting immovable of property service - letting out warehouses to FCI - as these services are for agricultural produce, which is not in dispute, therefore, the appellant is not liable to pay service tax on Storage and Warehousing which has been exempted from service tax as per section 65 (105) zza) of the FA, 1994 - AT
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The services provided to World Bank and International Finance Corporation being entities of United Nation, exempted under N/N. 16/2002-ST. - AT
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Liability of service tax - Intellectual Property Rights (IPR) - Service - payment of consideration for usage of Trademark "AREVA", which is owned and registered by parent company of the appellants in France - not liable to be taxed - demand set aside - AT
Central Excise
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CENVAT credit - duty paying documents - If the department starts accepting the invoices issued by a trader, who is not a registered dealer, it will create chaos in the Cenvat credit system and there will be flagrant misuse of the said scheme, which is a facility to present cascading effect of taxes - AT
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CENVAT credit - duty paying documents - mention of incorrect vehicle no. has little effect regarding admissibility of CENVAT credit, and such error may be treated as the clerical mistake - credit allowed - AT
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CENVAT crediit - whether can cenvat credit of service tax paid on the services in relation to issue and receipts of Foreign Currency Convertible Bond (FCCB) in Singapore, a place outside India, be used for paying central excise duty on the goods manufactured in India? - Credit allowed - AT
VAT
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Motor Vehicle or not? - Tata Hitachi Model EX 200 LC Hydraulic Excavator with HD Bucket and kit loaded on Truck No.HR 38 F 1131 - not to be classified as motor vehicle for the purpose of taxation - HC
Case Laws:
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GST
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2018 (2) TMI 195
Seizure of goods - Tasla - Section 129(1) of the Uttar Pradesh Goods and Services Tax Act, 2017 - Held that: - the impugned order of seizure cannot be held to be bad in law only for the reason that the wrong provision of Act has been mentioned while passing the same as the power of seizure is clearly traceable under the relevant Act as well - the impugned order is to be treated to have been passed under IGST Act read with Section 129 of the Central G.S.T. Act rather than the one passed under U.P.G.S.T. Act. The goods and the vehicle seized are directed to be released on furnishing indemnity bond as well as security other than cash and bank guarantee of the taxable amount of the seized goods.
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2018 (2) TMI 194
Liability of interest - The demand raised by the respondent was accepted by the petitioner and the same was also duly paid. However, the petitioner is still liable to pay interest thereon. Thesaid amount comes to ₹ 3,48,735/- - The petitioner is permitted to remit the said amount to therespondent in five equal monthly instalments. The first instalment shall commence from 01.02.2018 - petition disposed off.
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Income Tax
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2018 (2) TMI 193
Entitlement for deduction u/s 10B - whether conversion of ungarbled pepper to be fit for human consumption amounts to production? - Held that:- We are unable to countenance assessee's contention, especially since the finding that un-garbled and garbled pepper are not two distinct commodities was not based on any specific provision in the statute. Yet again we notice that under Section 80HHC the benefit is to any industrial undertaking carrying on 'manufacture' or 'processing'. The benefit under Section 10B is to any undertaking carrying on 'manufacture' or 'production'. Hence the statute itself recognizes the distinction between “manufacture”, “production” and “processing”. A manufacture or production necessarily has to lead to a different commodity while a processing may not result in a new commodity being brought out. We, hence, decline to entertain the contention as raised by the learned Counsel. The process of garbling to make pepper edible does not give rise to a different commodity distinct from the raw pepper purchased. - Decided against assessee
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2018 (2) TMI 192
Rejection of an application made u/s 197 - empowerment to the AO to cancel the certificate issued under Section 197(1) with regard to lower and/or nil withholding tax - Held that:- This Court had occasion in Mckinsey and Company Inc. Vs. U.O.I. [2010 (4) TMI 235 - BOMBAY HIGH COURT] to consider the exercise of powers under Section 197(2) of the Act by the Assessing Officer i.e. to cancel the certificate granted earlier. This Court had observed that AO can exercise power under Section 197(2) for canceling the certificate which has been earlier issued/ granted. However, such a cancellation/ departure from the earlier view has to be made on valid and cogent reasons, i.e. when there is material on record to justify the departure. The impugned order does not indicate any such material, nor Revenue is able to show us any such change in circumstances which would warrant canceling certificate dated 4 May 2017. The basis/ ground (a) of the impugned order is not sustainable in the facts and renders the order bad. Outstanding tax demand payable to the revenue by the petitioner - Held that:- Where the petitioner states that the issue is concluded by a decision dated 27 May 2016 of the Tribunal in its own case, then the assessing officer has to consider the same and give some modicum of reason why it is prima facie not covered by the decision of the Tribunal. This is particularly so in the back ground of the petitioner’s Appeal with respect to the demand of ₹ 6.68 Crores being heard by the CIT(A) as far back as in February 2017 and no order being passed thereon till date. Further, in the present case the impugned order does not deal with the petitioner’s contention that the demand of ₹ 28.00 Lakhs is on account of mistake in application of TRACE system nor does it deal with the Petitioner's contention that the entire demand of ₹ 6.90Crores can be adjusted against the refundable deposit of ₹ 7.30 Crores, consequent to the order dated 27 May 2016 of the Tribunal in its favour. Therefore, the impugned order dated 23 October 2017 seeking to cancel the certificate dated 5 May 2017 is a non-speaking order as it does not consider the petitioner’s submissions.
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2018 (2) TMI 191
Assessment u/s 153A - Can the Assessing Officer rely on materials already available with him (much prior to the search) in a proceeding under Section 153A? - computation of capital gains - Held that:- The mere fact that without proceeding under Section 147 read with Sections 148 and 149, the Department proceeded under Section 153A would not by that alone absolve the assessee from making good the tax relating to the income which has escaped assessment. The mere fact that the provision under which the Department proceeded was not proper, would not vitiate the entire proceedings especially since there is no procedural requirement distinguishing a notice under Section 148 or one under Section 153A. The first transaction, transferring half of the right in the property, was made by execution of a sale deed on 01.07.1998 after which the purchaser Abdul Hameed was found to have withdrawn ₹ 50,50,000/-. Hence, there was clear evidence as to the total consideration received, being ₹ 1,01,00,000/- in the two transactions; establishing the information as disclosed from the copy of the consent letters received along with the Tax Evasion Petition. The first transaction took place in the financial year 1998-1999, in which the assessee admitted receipt of only ₹ 44,00,000/- and after the execution of the first sale deed, there was a withdrawal of ₹ 50,50,000/- from the purchaser's account. This obviously was for the second transaction, the sale deed of which was executed on 10.05.1999, at the commencement of the next financial year 1999-2000. The exact amount of income escaped from assessment is supported by ample evidence. We do not see any reason to interfere with the orders of the Tribunal. The questions of law are answered in favour of the Revenue and against the assessee. The appeal is rejected affirming the order of the Tribunal. The computation of capital gains shall be proceeded with by the Assessing Officer and finalised expeditiously; if not already done. The parties are left to suffer their respective costs.
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2018 (2) TMI 190
License fees - method of accounting followed by the Respondent has been consistently accepted by the Revenue - Held that:- There is no dispute that in the subsequent accounting year, the assessee did make imports and did derive benefits under the advance licence and the duty entitlement pass book and paid tax thereon. Therefore, it is not as if the Revenue has been deprived of any tax. We are told that the rate of tax remained the same in the present assessment year as well as in the subsequent assessment year. Therefore, the dispute raised by the Revenue is entirely academic or at best may have a minor tax-effect. Therefore, no need for the Revenue to continue with this litigation when it was quite clear that not only was it fruitless (on merits) but also that it may not have added anything much to the public coffers. The manner in which the Respondent – Assessee has reflected his income by following mercantile system of accounting cannot be found fault with as the amounts attributable to the period post 31st March is income which has not accrued during the previous year relevant the subject Assessment Year. This is so as it is not due during the period for which the Revenue seeks to bring it to tax. Appellant has not been able to show that the method followed by the Respondent does not correctly bring out the income chargeable to the tax. The obligation in respect of the license fees billed for the entire calender year is yet to be discharged at the end of the previous year related to the subject Assessment Year and would be due only in the next previous year related to the next Assessment Year.
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2018 (2) TMI 189
Penalty u/s 271AAA - disclosure of unaccounted income - Held that:- Conditions mentioned in section 271AAA(2) for granting immunity from the penalty are satisfied in the present case as the assessee in his statement under section 132(4) has made a disclosure of unaccounted income; the manner in which the same was earned was also clearly stated and the taxes were also paid. On overall analysis of the entire material on record as well as the order impugned, we unhesitatingly conclude that no error is committed by the Tribunal in confirming the order of CIT(A) in deleting the penalty imposed on the assessee under section 271AAA - Decided in favour of assessee.
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2018 (2) TMI 188
Rectification of mistake - Held that:- Having directed the restoration of the matter to the Assessing Officer, it goes on to extract certain observation of the Delhi High Court in Logitronics P.Ltd. (supra) and only thereafter i.e. considering the above decision, decides ground No. 2 in the Appeal, was in favour of the Revenue. In the aforesaid facts, we cannot with certainty state that the decision in Logitronics P.Ltd. (2011 (2) TMI 12 - DELHI HIGH COURT) had not even remotely influenced the decision taken. In this case, the manner in which the order dated 28 March 2016 is structured and in the final view/direction given after considering the decision of the Delhi High Court in Logitronics P.Ltd. (2011 (2) TMI 12 - DELHI HIGH COURT) it does prima facie appear to us, have been influenced by it. In the present case, Tribunal while dealing with the rectification application, must deal with the Petitioner's grievance that the Delhi High Court's decision in Logitronics P.Ltd. (supra) does not apply to the present facts. We are satisfied that the above aspect has to be considered while disposing of the rectification application in the present facts. Restore each of the Petitioner's rectification application to the Tribunal for fresh consideration. This restoration is only to reconsider the Petitioner's grievance in respect of reference/reliance upon the Delhi High Court decision in Logitronics P.Ltd. (supra)
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2018 (2) TMI 187
Commission of error by court below in passing the impugned order so far as Exh. 3 filed by the department - applicability of provisions of Section 132 - Held that:- Under Section 132 on a requisition being made under Sub-section (I), the officer or authority referred to in Clause (a) or Clause (b) or Clause (c), as the case may be, of the subsection shall deliver the books of account, other documents or assets to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody. Once the warrant of authorization is issued against any person, then the seized amount is required to be retained by the Income Tax Authority and without taking over of the said amount, no further proceedings can be started against any person, from whose custody the amount was recovered. The Lower Court has not properly appreciated the provisions of Section 132 of the Income Tax Act and rejected the claim of the applicant. This application succeeds and is hereby allowed. The order passed by the J. M. F. C, Kathor below Exh. 3 is hereby quashed and set aside. It is declared that the department is entitled to retain the cash till the final conclusion of the proceedings under the Income Tax Act. The Investigating Officer is permitted to handover the Muddamal currency notes amounting to ₹ 13,00,000/- (Thirteen Lakh) to the applicant-Deputy Director of Income Tax (Investigation), Unit-II, Surat at the earliest. It is clarified that prior to handing over the Muddamal currency notes, the Investigating Officer shall get the videography of the currency notes done as provided in the decision in the case of Sunderbhai Ambalal Soni vs. State of Gujarat, [2002 (10) TMI 773 - SUPREME COURT], and if necessary, to carry out the Panchnama with the serial numbers of the currency notes, if not already done. A copy of the Panchnama or the videography be placed before the court concerned and the same shall be furnished to the Income Tax Department so also to the respondent No. 2-original first informant. The applicant-department shall be free to undertake all actions permitted under the law, however, he shall make the Fixed Deposit of the entire amount of ₹ 13,00,000/- with any Nationalized Bank within a period of four weeks from the date of taking over such Muddamal currency notes, initially for a period of two years and, thereafter, the same shall be renewed from time to time till the finalization of such proceedings initiated by the applicant-department. Any appropriation, if, is to be made, the same shall be made only with the prior permission of this Court.
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2018 (2) TMI 186
Reopening of assessment - reasons to believe - submission made on behalf of the Revenue that there was a mistake in the reasons recorded - Held that:- A reopening notice under Section 148 of the Act seeks to reopen settled issues between the State and the Assessee with regard to the income tax dues of the Assessee. The basis of jurisdiction to reopen an Assessment is reason to believe of the Assessing Officer that income chargeable to tax has escaped Assessment. This should be evident in the reasons recorded by him. These reasons which forms the basis must be strictly read. It is not open to either improve upon or change the reasons recorded. The reasons for reopening notice under Section 148 of the Act for reopening notice as recorded at the time of issuing the reopening notice under Section 148 of the Act must be clear and have to be read strictly. Therefore, the submission made on behalf of the Revenue that these was a mistake in the reasons recorded and an attempt to substitute the reasons being made orally by the Revenue, cannot be accepted. Moreover, we find that the reasons as recorded do not indicate any reasons to believe that income chargeable to tax has escaped assessment. It is more in the nature of seeking to find out after reopening the Assessment whether there are reasons to believe that income chargeable to tax has escaped Assessment or not - Decided in favour of assessee
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2018 (2) TMI 185
Accrued or a contingent liability - liability of the Assessee to pay enhanced licence fee - Revisions of licence fees - Tax treatment of claim of licence fee as deduction - whether licence fee payable to the Railways to be an accrued liability? - Held that:- The question of law in this appeal are no longer res integra; they have been concluded by the common judgment of this Court in Jagdish Prasad Gupta v. CIT [2017 (8) TMI 734 - DELHI HIGH COURT] as held that the assessee’s liability to pay enhanced license fee to the Railways for the assessment in question was an accrued liability that arises in the year in which the payment was issued.
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2018 (2) TMI 184
Entitled to waiver of interest levied u/s 220 (2A) - rectification of mistake - Held that:- A perusal of the impugned order does not reveal any cogent reason for rejecting the request of the petitioner. The respondent is bound to consider the Petition, as to whether the petitioner fulfilled all the three conditions laid down under Section 220 (2A) and record reasons, as to how, the petitioner is not entitled to the waiver of penal interest. Junior Standing Counsel for the Revenue pointed out that, the Rectification Petition is said to have been presented wayback in the year 2007, and by now, it would have been disposed of. Whereas, the learned counsel appearing for the petitioner, on instructions, submitted that the Petition is yet to be disposed of, and the same is pending before the respondent. Thus, considering the fact that Petition for rectification is pending, and this Court, being satisfied that the respondent has not recorded any reasons, as to why, the petitioner is not entitled to waiver of interest, levied under Section 220 (2A), the matter requires to be re-considered by the respondent afresh. Thus, for the above reasons, this Writ Petition is allowed
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2018 (2) TMI 183
Validity of Notice u/s 133 (6) - Notice addressed to a deceased person - liability of legal representatives - Held that:- This Court is satisfied that the present petition is misconceived and cannot be entertained. The Noticee even if deceased, the Legal Representatives or the persons who inherit the estate of the decreased persons will have to comply with the said Notice for furnishing the requisite information. The very purpose of the provisions of Section 133 (6) of the Act is to elicit the requisite information and details from the person concerned. From the reply filed by the petitioner, the wife of the deceased Government Servant, prima facie, it appears that a large sum of ₹ 95.83 lakh was found to be in the credit of the Bank Account of a First Division Clerk of the City Civil Court, Bangalore, which was bound to raise a doubt or a query in the mind of the Income Tax Officer and therefore, when the Information was called from the Noticee under Section 133 (6) of the Act, the fact of death of the Noticee may not have been in the knowledge of the concerned Income Tax Officer. There is nothing or record to show that the fact of death was within the knowledge of the Respondent - Income Tax Officer and he still issued the Notice to a deceased person. The Legal Representatives including the petitioner, wife of late Mr. T. V. Sathyanarayana before this court cannot protest or deny the obligation to furnish such information including the Bank details and relevant vouchers to be obtained from the concerned Bank of the husband of the present petitioner. After all, the wife of a person cannot plead ignorance about a huge cash inflow in her husband's bank account. - Decided in favour of revenue
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2018 (2) TMI 182
Deemed dividend u/s. 2(22)(e) - normal charge of depreciation required to be considered for calculating accumulated profits for the purpose of determination of deemed dividend - Held that:- The ‘accumulated profits’ in the case of the company are to be considered after allowing the normal depreciation. Assessee has furnished such working before the Ld.CIT(A), wherein it resulted in the loss of ₹ 3,35,59,784/-. Considering the above, the opinion that there are no accumulated profits so as to consider the loan as ‘deemed dividend’. In view of that, assessee’s grounds are allowed and AO is directed not to treat any amount as deemed dividend on the facts of the case. - Decided in favour of assessee.
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2018 (2) TMI 181
Income from sale of shares - capital gain or busniss income - as submitted that shares were not held as stock-in-trade and the shares were not reshuffled for long period - Held that:- In the instant case, the shares are fairly held for a period of 4 months upwards before being disposed of by the assessee on which short term capital gain was earned and very few shares were sold within a period of one month from the date of purchase. The shares on which long term capital gains were earned were held for period of 1 year 3 months. The assessee has not borrowed interest bearing funds for making investments on which STCG/LTCG was earned as no interest has been debited vis-a-vis investments portfolio of the assessee. The Revenue has accepted in preceding years gains arising from the dealing in the share as capital gains wherein the assessee was held to be an investor and principle of consistency has to be followed. Income earned by the assessee from dealing in shares is to be assessed as income from capital gains and we have no hesitation in confirming the well reasoned appellate order passed by learned CIT(A). This ground raised by the Revenue is dismissed. Loss arising from the Future and Option ( F& O) segment - Held that:- The copy of reply received from NSE was duly handed over to the assessee by the AO but the assessee could not rebut the same as no evidences are brought on record by the assessee to prove that F & O transactions were genuine. Even before us no additional evidences are filed to contend that F & O losses were genuine. Thus the loss in F & O segment claimed to have been incurred were bogus/sham loss which was being allegedly incurred only with a view to set off the same against the income from short term capital gains on sale of shares/securities in order to reduce the tax liability. Thus, we disallow this loss by holding the same to be sham and the appeal of the assessee on this ground stood dismissed and we have no hesitation in confirming the well reasoned appellate order of learned CIT(A).
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2018 (2) TMI 180
Capital gains on the transfer of land - Exemption u/s. 54F - Held that:- Capital gains on the transfer of land for development did not arise in the year under consideration and accordingly direct the AO to exclude the capital gains on the transfer of land given for development. Coming to the capital gain on transfer of constructed area, which was considered as a second transaction, as can be seen from the details placed on record, most of the semi-constructed structures in Block-A were sold in August, 2001, which pertains to AY. 2002-03. Therefore, as far as the capital gains on Block-A (entirely) does not pertain to the year under consideration. For sale in Block-B is concerned, as per the details the capital gains arise in AYs. 2002-03, 2003-04 and 2004-05. As stated by the Ld. Counsel for assessee, only five flats in Block-B are sold in financial year relevant to the impugned assessment year. Therefore, any long term capital gains in those five flats on sale of proportionate un-divided share of land and short term capital gain on the sale of super structure/flat can only be brought to tax in the year under consideration. Accordingly, AO is directed to re-work out the capital gains only that extent and the share of assessee, Dr. Sudhir Naik in that can only be brought to tax in his case. Claim of 54F/54 - contention that assessee has sold all the flats allotted to him and therefore, at the time of investing in the new house, he has no other house except this house - Held that:- As seen from the agreements all the apartments received in the development agreement would become one house technically, even though they are of independent units. But, when the claim is made, it was the contention of assessee that all those flats were sold. Therefore, assessee does not own any other house, except the house in which he has invested. This aspect has not been considered by the AO or by the CIT(A) in the correct perspective. Therefore, this matter has to be re-examined by the AO keeping in mind the date of sale of various apartments and the claim u/s. 54F/54. Accordingly, the ground is considered allowed for statistical purposes.
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2018 (2) TMI 179
TDS u/s 194C - non deduction of tds - Assessee in default under the provisions of Sec. 201(1) and 201(1A) - period of limitation - Held that:- Keeping in view the judgment of the Hon’ble High Court of Bombay in the case of Director of Income tax (International taxation) Vs. Mahindra & Mahindra Ltd. (2014 (7) TMI 265 - BOMBAY HIGH COURT) and finding ourselves to be in agreement with the view taken by the Tribunal in the case of the assessee for the aforementioned years, therefore, are of the considered view that the order passed by the A.O under Sec. 201(1A) as on 28.03.2011 being substantially beyond the period of one year from the end of the financial year in which the proceedings under Sec. 201(1)/201(1A) were initiated, therefore, the respective orders passed by the A.O U/ss. 201(1)/201(1A) are clearly barred by limitation. - Decided in favour of assessee.
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2018 (2) TMI 178
Claim of deduction u/s. 801B(10) - conditions contemplated under the said statutory provision were not found to be satisfied by the assessee - (i) that as the Building “E” was only a part of the project which had commenced in the year 1993 as per the Commencement Certificate dated 09.06.1993, therefore, the approval of the Building “E” was just an endorsement of the original Commencement Certificate dated 09.06.1993; (ii) the size of the Plot on which the Building “E” was constructed was less than 1 acre; and (iii) the provisions of Sec. 80IB(10) was clearly restricted to only one project on minimum area of 1 acre. - Held that:- We find that the Hon’ble High Court of Bombay in the case of CIT-25, Vs. M/s Vandana Properties [2012 (4) TMI 54 - BOMBAY HIGH COURT] while disposing of the appeals of the assessee for A.Y(s) 2004-05 & 2005-06 had held that the assessee was entitled towards claim of deduction under Sec. 80IB(10) in respect of Building “E”, after deliberating on the various aspects on which the claim of the assessee was assailed by the revenue before it - Decided in favour of assessee.
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2018 (2) TMI 177
Claim of exemption raised by the assessee u/s 54F - Held that:- The case of the assessee before us does not fall within the sweep of the disqualification contemplated in the proviso of Sec. 54F(1) for two reasons, viz. (i) the properties, i.e. Tara Manzil and Noor Manzil were not residential properties but commercial properties; and (ii) that the assessee was not the absolute owner of the aforesaid properties, but rather, was only a fractional owner of the same. It can safely be concluded that the observations of the CIT(A) do not suffer from any infirmity. Thus as being in agreement with the view taken by the coordinate bench of the Tribunal in the case of Shri Rasiklal N. Satra (2005 (9) TMI 635 - ITAT MUMBAI) therefore, uphold the order of the CIT(A). - Decided against revenue.
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2018 (2) TMI 176
Bogus purchases - Managing Director of the company admitted that purchase made from the parties were non-genuine - Held that:- Keeping in view the substantial material which had been placed on record by the assessee before the lower authorities, viz. copy of the stock register and details of consumption and material purchased, details of opening work in progress, closing work in progress, stock statement as on 31.03.2008 and 31.03.2009 and consumption formula required as per Government books, it can safely be concluded that the purchases claimed by the assesses to have been made from the aforementioned parties were utilized by the assessee for the construction of the roads carried out by the assessee in the course of the execution of its contract works. We find that a coordinate bench of the Tribunal while disposing of the appeal in the assesse’s own case for A.Y 2010-11, wherein identical facts and issue were there before the Tribunal, had restricted the disallowance to the extent of 2% of alleged bogus purchases. - Decided against revenue
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2018 (2) TMI 175
Disallowance on account of interest expenses claimed on bill discounting charges - assessee had sufficient fund to meet this business requirement which was instead used by the assessee for making interest free advance to its related parties - Held that:- CIT(A) has passed a detailed order listing therein the full sequences of events and how the bills have discounted and payments were made to sundry creditors. We are in agreement with the conclusion drawn by the CIT(A) that the AO has taken an overall view of the matter and disallowed the interest charge in arbitrary manner without application of mind. In our opinion the order of the CIT(A) is correct and deserves to be upheld. - Decided against revenue Disallowance on account of brokerage paid for getting the credit facility from nationalized banks - assessee could not establish the identity of the party and genuineness of transaction - Held that:- A perusal of the order of the CIT(A) reveals that confirmation from the recipient M/s. Avias Corporate Services Pvt. Ltd. was produced before him. The learned CIT(A) also recorded a finding of fact that the bill is towards the credit facilities arranged from IOB and thus the payment was made in connection with professional services for obtaining credit facility. It was also noted by the CIT(A) that TDS has been deducted and the payment was made through banking channels. Having perused the facts on record and after hearing both the parties, we find that the learned CIT(A) has taken a correct view of the matter which deserves to be upheld - Decided against revenue
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2018 (2) TMI 174
Disallowance of foreign exchange loss - Held that:- Since we have already restored the issue to the file of the Assessing Officer/TPO to decide the issue in the light of the MAP resolution which was made after the final order was passed, therefore, following the same reasonings, we restore this issue to the file of the Assessing Officer/TPO for deciding the issue afresh in the light of the MAP resolution. Disallowance u/s 14A - Held that:- Hon’ble Delhi High Court in the case of Cheminvest Limited vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT ] has held that section 14A will not apply if no exempt income has been received or receivable during the relevant previous year. Since in the instant case, it is an admitted fact that no exempt income has been received by the assessee during the impugned assessment year, therefore in the absence of any contrary material brought to our notice by the ld. DR, we hold that no disallowance u/s 14A is called for. The ground raised by the assessee is accordingly allowed. Disallowance of claim of brought forward losses and MAT credit - Held that:- At the time of hearing both the sides agreed that this ground is consequential in nature and no speaking order has been passed. Therefore, we restore this issue to the file of the Assessing Officer with a direction to pass a speaking order as per fact and law after giving due opportunity of being heard to the assessee.
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2018 (2) TMI 173
Rejecting the application u/s 12AA(1)(b)(ii) - proof of charitable activities - prescribed conditions for registration of the trust - Held that:- CIT has to examine the objects of the trust or institution and the genuineness of the activities. Since in the present case there is no activity carried out by the assessee, therefore, there is no question of genuineness and satisfaction of the ld. CIT. Accordingly, the said conditions of section 12AA(1) of the Act become infructuous. The only condition left is satisfying about the objects of the trust or institution which have been reproduced in the present case. The ld. CIT(E) has not brought an iota of evidence to prove that the said objects of the assessee society are not of charitable in nature. Therefore, in such facts and circumstances of the case, the ld. CIT(E) has to examine the objects of the trust and if they are found to be charitable, the assessee deserves to be granted registration u/s 12AA(1) of the Act. Since the issue in the present case is squarely covered by the decision of the coordinate bench of ITAT Delhi in the case of Vidyadayani [2017 (12) TMI 1251 - ITAT DELHI], we set aside the order of the ld. CIT(E) and direct him to grant registration u/s 12AA(1) of the Act. - Decided in favour of assessee.
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2018 (2) TMI 172
Deduction u/s. 54 - justification on purchase of two flats in different localities on account of family compulsions - Held that:- We are of considered view that the assessee is eligible to claim deduction u/s. 54 in respect of only one flat of his choice. We do not find any infirmity in the findings of authorities below in restricting deduction to ₹ 50,89,950/- i.e. the cost of one flat. Accordingly, ground No. 1 raised in appeal by assessee is dismissed. Expenditure paid as compensation to the tenant for vacating the premises - Held that:- The said tenant in affidavit has admitted to have received ₹ 12,00,000/- for relinquishing his tenancy rights. The ld. AR submitted that since, the ancestral house was jointly owned by assessee and Jayant Dattatraya Bhalerao and Ashok Dattatraya Bhalerao, all the three co-owners equally contributed towards the payment of compensation to Shri Vaman Shriniwas Kulkarni. Thus, 1/3rd share of assessee comes to ₹ 4,00,000/-. The assessee has filed affidavit of tenant as additional evidence for the first time before Tribunal. Under such circumstances we deem it appropriate to remit ground No. 2 to Assessing Officer for verification of facts. The Assessing Officer shall decide this issue de-novo
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2018 (2) TMI 171
Addition u/s 14A - Held that:- The assessee’s claim should be allowed in view of the binding judgments of the Hon’ble Bombay High Court in the case of HDFC (2014 (7) TMI 724 - BOMBAY HIGH COURT ) and Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) and existence of “interest free own funds” of the assessee, the assessee should be given relief on the amount of ₹ 8,43,096/-. Thus, Ground No.2 raised by the assessee is allowed. Attracting the provisions of section 40A(2)(b) - Held that:- CIT(A) held that the disallowance of ₹ 40 lakhs is almost three times of gross margin allowed by that assessee which cannot be held to be justified. The correlation drawn by the AO to the PF deductions was also not approved by the CIT(A). For want of comparable cases to be brought on record by the AO, the CIT(A) deleted the addition. We find the order of the CIT(A) is fair and reasonable and it does not call for any interference. The same is the finding of CIT(A) for A.Y. 2011-12. In both the assessments, AO has not brought any comparables from the market to make out that the current payment is excessive and unreasonable within the meaning of section 40A(2)(b). We therefore uphold the order of CIT(A) for both the years and dismiss the relevant grounds raised by the revenue for both the assessment years, i.e. A.Yrs. 2010-11 and 2011-12. Invoking the provisions of section 80IA(5) - Held that:- As decided in Serum International Ltd. [2013 (1) TMI 688 - ITAT PUNE] when the assessee exercises the option, only the losses of the years beginning from the initial A.Y. are to be brought forward and not the losses of the earlier years which have been already set off against the income of the assessee - no notional brought forward and set off against the profits of the eligible business as no such mandate is provided in section 80-IA(5). When the assessee exercises the option, only the losses of the years beginning from the initial A.Y. are to be brought forward and not the losses of the earlier years which have been already set off against the income of the assessee. As DR has not brought to the notice of the Bench any decision contrary on the issue in question it is to be held that the assessee is eligible for claim of deduction u/s 80-IA for the year under consideration in a manner whereby the initial assessment year referred to in section 80-IA(5) is to be taken as the A.Y. 2004-05 as the assessee has opted to claim this deduction only in this assessment year - Decided in favour of assessee.
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2018 (2) TMI 170
Penalty proceeding u/s 271A - assessee has not maintained any books of accounts and filed his return of income by declaring the income u/s 44AD - reasonable cause - Held that:- We find that the assessee is earning the income by selling of milk though basically the assessee is an agriculturist having agricultural land. The assessee is having its own cows and Buffalos and thereafter, the sale of milk is not a regular business in true. The assessee has explained the reasons for not maintaining the books of accounts as assessee is basically an agriculturist and carrying out agricultural operations apart from the selling milk from the animal kept by the assessee. We find that the explanation of the assessee though may not be accepted as per the strict provisions of law however, the AO has not found the explanation of the assessee as untrue or malafide. The explanation furnished by the assessee clearly proves that there was a reasonable cause for not maintaining the books of accounts. Nature of the activity carried out by the assessee and in view of the provisions of section 273B of the Act we find that the assessee has explained a reasonable cause and consequently no penalty can be imposed. In view of the facts and circumstances of the case we delete the penalty of levy u/s 271A - Decided in favour of assessee.
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2018 (2) TMI 169
Penalty levied u/s 272A(2)(k) r.w.s. 200(3) - delay in submission of e-TDS return - Held that:- The case of the assessee before us is that the delay in submission of e-TDS return was because of the problem of awareness of Return Preparation Utility, which was updated by NSDL in the first year i.e. assessment year 2011-12. Because of the requirement of e-TDS furnishing of TDS statement arising for the first time in assessment year 2011-12, there were problems faced by the assessee and hence, the delay in filing quarterly TDS return late. The assessee had reasonable cause in not furnishing the same in time and in view of the provisions of section 273B, we hold that the assessee is not liable to levy of penalty under section 272A(2)(k). Assessing Officer is directed to delete the same. - Decided in favour of assessee.
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2018 (2) TMI 168
Allowability of busniss loss - machinery has been imported by the assessee but before it could be transported to the assessee’s premises at Hyderabad and installed and thereafter put to use, the machinery got damaged - Held that:- In the case before us, since the machinery has not been installed and put to use by the assessee, the assessee cannot capitalize the same and the depreciation thereon cannot be allowed. An expense is capitalized when it is recorded as an asset, due to its future value on the balance sheet, rather than as an expense in the income statement. Since the machinery got damaged even before it reached the assessee’s premises, and it had no future value, it was an expense. CIT(A) has, in fact accepted that this amount is allowable to the assessee but in the year of crystalization. The reason for confirming the disallowance is that the loss has not crystalized during the year, as the appeal by the assessee against the insurance company is still pending before the Hon’ble High Court of Madras. We agree with the assessee, that the business loss has occurred and is allowable to the assessee in the relevant assessment year and as and when the compensation is finalized by the Hon’ble High Court of Madras, and the assessee receives it, it would have to offer the same to taxation in such assessment year of receipt. The finding of the CIT(A) has not been challenged by the revenue and therefore it has become final.- Decided in favour of assessee
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2018 (2) TMI 167
Penalty u/s 271(1)(b) - held that:- As per section 271(1)(b) of the Act, the Assessing Officer or the ld. CIT, if satisfied that any person fails to comply with the notice u/s 142(1) of the Act, then a sum of ₹ 10,000/- for each failure has to be levied, In the present case, the assessee having complied with all the notices u/s 142(1) of the Act and there is a reasonable cause u/s 273B of the Act, therefore, no penalty u/s 271(1)(b) of ht Act can be levied. Assessment in the present case has already been completed for the impugned A.Y. u/s 152A r.w.s 143(3) of the Act for assessment year 2006-07 to 2011-12 and u/s 143(3) of the Act for assessment year 2012-13 vide order dated 27.02.2015 has been completed where the additions in different years have been made as is evident from the orders placed at pages 171 to 257 of the ld. CIT(A) against the order of assessment u/s 153A/143(3) dated 28.03.2016. Thus order having been passed u/s 153A/143(3) of the Act we set aside the impugned penalty order and direct the Assessing Officer to delete the penalty. Thus, all the grounds raised by the assessee are allowed.
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2018 (2) TMI 166
Addition of capital gains - set off provision allow adjustment of loss under any head other than capital gain against income from any head including the head capital gains - Held that:- In the present case the assessee had earned capital gain but had no loss under any other head but it had accumulated depreciation which has been brought forward from earlier years. The various decisions of various Benches of the Tribunal in the case of Virmani Industries Pvt. Ltd. and Others (1995 (10) TMI 1 - SUPREME Court) has held that brought forward depreciation from earlier years becomes part of the current year’s depreciation and has further held that since there is no difference between the brought forward depreciation and current year’s depreciation therefore, is allowable as set off against the capital gains. Long Term Capital Gain earned by the assessee is eligible to be set off against the brought forward unabsorbed depreciation and therefore, we set aside the orders of authorities below. - Decided in favour of assessee.
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2018 (2) TMI 165
Reopening of assessment - reasons to believe - Held that:- We are of the opinion that the order u/s.143(3) dated 23.12.2011 and order u/s.143(3)/147 dated 28.8.2014 are two separate appellate orders and the submission of A.R. that the order u/s.143(3) merged with u/s.143(3)/147 cannot be accepted. In the present appeal, the assessee has not raised grounds based on the order u/s.143(3)/147 of the Act and further not challenged the additions in the order u/s.143(3)/147, and we are of the opinion that appeal is not maintainable accordingly, we dismiss the appeal filed by the assessee.
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2018 (2) TMI 164
Disallowance u/s 14A - Held that:- As observed from the assessee’s Profit & Loss Account that there is only one item of expenditure of ₹ 6,230/- which has been booked in the accounts and there is no exempt income earned by the assessee. We find that the question of disallowance u/s 14A when there is no exempt income is no more res integra in view of the judgment in the case Cheminvest Ltd. vs. CIT (2015 (9) TMI 238 - DELHI HIGH COURT), wherein it has been held that if there is no exempt income, there can be no question of making any disallowance u/s 14A. - Decided in favour of assessee.
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2018 (2) TMI 163
Claim of deduction u/s 80IC - Held that:- A perusal of the order of the Assessing officer reveals that the Assessing officer has not disputed that the assessee unit has carried out substantial expansion as provided under clause (b) of sub section (2) read with clause (ix) of sub section (7) of section 80IC of the Act. Almost similar view has also been taken in the case of ‘M/s Stovekraft India vs. Commissioner of Income Tax’ Stove Craft (2017 (12) TMI 69 - HIMACHAL PRADESH HIGH COURT) wherein held the Revenue has not disputed, (a) the units having carried out substantial expansion within the definition of the Section, (b) their entitlement and extent of deduction would be dependent upon interpretation of the relevant provisions. No justification at this stage to give the Assessing officer a second innings to re-examine undisputed facts. - Decided against revenue
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2018 (2) TMI 162
Reopening of assessment - proceeding against dissolved entity - copy of reasons recorded were not provided to the assessee - Held that:- In the present case despite specifically request by the assessee to the AO / CIT(A) for providing the reasons recorded for assumption of jurisdiction, AO or the CIT (A) have failed to comply the mandatory requirement of law by providing the reasons recorded before issuance of notice u/s 148 to the assessee, hence objection raised by the assessee vide letter dt.09.12.2008 remained unanswered. Further the reasons brought on record by the Standing Counsel for the Revenue, reproduced herein above are bereft of any reasoning and are not pertain to the years under consideration. From a perusal of the two reasoning’s reproduced herein above, it is not discernible as to for which BOI the reasons were recorded, for which year it were recorded, what were the PAN nos of BOI and what were ground s for reopening. Further the reasons reproduced hereinabove are only the reasons forming part of the note sheet, whereas for the requirement of law, the reasons should be recorded separately and thereafter proceedings should be initiated by the AO.As the copy of reasons are required to be provided to the assessee and note sheet of the proceedings cannot acquire the status of reasons recorded Therefore the reassessment proceedings initiated by the Revenue against the BOI are without any jurisdiction - Decided in favour of assessee.
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2018 (2) TMI 161
Accumulation of income for application for charitable purposes u/s. 11(1)(a) - to be allowed at 15% of gross receipts or net receipts i.e.; gross receipts less Revenue expenditure - Held that:- Respectfully following the decision of the co-ordinate bench in the case of Mary Immaculate Society (2015 (6) TMI 1149 - ITAT BANGALORE), we hold and direct the AO that the accumulation u/s. 11(1)(a) of the Act is to be allowed at 15% of gross receipts, as claimed by the assessee. Consequently, grounds raised by the Revenue are dismissed. Claim for Depreciation - Held that:- We uphold the order of the ld CIT(A) in directing the AO to allow the assessee’s claim for depreciation. See Al-Ameen Charitable Fund Trust & Others (2016 (3) TMI 462 - KARNATAKA HIGH COURT). Carry forward of excess application of income for set off as application against income of subsequent years - Held that:- Following the aforesaid decision of the co-ordinate bench in the case of Shraddha Trust [2017 (4) TMI 1289 - ITAT BANGALORE] we uphold the order of the ld CIT(A) in directing the AO to allow the assessee’s claim for carry forward of surplus application of income for set off as application against income of subsequent years
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2018 (2) TMI 118
Penalty levied u/s 158BFA - explanations of the assessee with regard to small investments - Held that:- As examined the issues on which additions were made by the AO and we find that there were small small amounts invested. Though the assessee has tried to explain the same, but it was not accepted by the Assessing Officer. No doubt for non-acceptance of explanations of the assessee, addition can be made but penalty under section 158BFA could not be sustained. We, therefore, find no merit in the penalty levied by the AO and confirmed by the ld. CIT(A). Accordingly, we set aside the order of the CIT(A) and delete the penalty. - Decided in favour of assessee.
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Customs
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2018 (2) TMI 160
Refund of security deposit made towards the provisional assessment of Bills of Entry - unjust enrichment - Held that: - Bills of Entry was provisionally assessed during the period 9.2.2004 to 2.12.2004 and the consignment was finally assessed by the Appraising Group VI on 23.5.2007. At the time of provisional assessment, there was no provision of unjust enrichment in case of a refund arising out of the final assessment in terms of Section 18 of the Customs Act, 1962 - as the provisional assessment was made in 2004, the unjust enrichment provision is not applicable. Once it is proved that the amount of refund has been shown as receivable, then it is not possible that the same amount could have been recovered by any other means. Therefore, the treatment of this amount shown as receivable is evidence that the incidence of refund amount has not been passed on. We direct the adjudicating authority before re-processing the refund as to make sure that the amount shown as receivable from Customs under the head of Loan and Advance covered the amount of present refund. If it is found correct then the appellant is prima facie entitled for the refund and such amount will not be hit by unjust enrichment - appeal allowed by way of remand.
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2018 (2) TMI 159
Benefit of N/N. 66/2004-Cus. (serial No. 152-B) - it was alleged that the appellant was misusing the benefit of the exemption notification as amended by N/N. 66/2004-Cus. by using the imported waste paper in the manufacture of paper other than newsprint - Held that: - there is no deliberate violation of the conditions of the exemption notification in question - the diversion of about 10% of the imported waste paper is only incidental and does not call for any adverse inference on the part of the appellant - there is no case made out against fraud, suppression of facts and/or falsification of record. In this view of the matter, the appellant has not violated the conditions of N/N. 21/2002-Cus. as amended. Penalty on Director u/s 112 - Held that: - he should have been more vigilant and should have suo motu informed the Revenue of the utilization of the imported waste paper for manufacture of paper other than newsprint - penalty upheld but quantum reduced. Appeal allowed in part.
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2018 (2) TMI 158
Importer - SCN issued to the appellants along with M/s. Maruti Wood Industries, Arunesh Saw Mills, and the overseas suppliers contending that M/s. Maruthi Wood Industries are not the true importers who caused the import of the logs but their name were used by the appellant fraudulently - the case of department is mainly based on the statement given by proprietor Shri B. Dinesh of M/s. Maruti Wood Industries. In the statement given on 26.11.2013, the said person denied issuing no objection letter. Statements from staff of the appellants (Custom Broker), was also recorded. Held that: - At the time of hearing, the Id. counsel has submitted that appeals were filed by the new importer on whom redemption fine was imposed. That these appeals have been remanded to the adjudicating authority vide Final Order No.40611 to 40615/2017 dt.31.03.2017. It is seen that the authorities below have failed to take note of the fact that the statement given by proprietor Sh. B. Dinesh was retracted. The appeals filed by new importers were remanded, inter alia, on such grounds. Therefore, I am of the view that these appeals also require to be reconsidered by the original authority. In such denovo proceedings, the appellants shall be given opportunity to adduce evidence and for personal hearing. The adjudicating authority shall, after due process of law, pass a reasoned speaking order - Appeals are allowed by way of remand to the adjudicating authority.
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2018 (2) TMI 157
Valuation - rejection of declared value - safari brand wafer bars - Held that: - Though a search was conducted in the premises of the respondent, nothing incriminating was unearthed. The value has been proposed to enhance on the basis of the price available in the local market and on cash bills for purchase of safari chocolates. It is not clear whether the cash bills pertain to safari chocolate or safari wafers - there are no reasons to reject the price declared by the respondents - appeal dismissed - decided against Revenue.
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2018 (2) TMI 119
Bail application - Held that: - considering the nature of allegations, role attributed to the applicant, this is a fit case to exercise the discretion and enlarge the applicant on regular bail. Hence, the present application is allowed and the applicant is ordered to be released on regular bail - application allowed.
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Insolvency & Bankruptcy
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2018 (2) TMI 196
Corporate insolvency procedure - Held that:- The Insolvency and Bankruptcy Board of India vide its letter dated 01.01.2018 has recommended a panel of Insolvency Professionals for appointment as Insolvency Resolution Professional in compliance with Section 16(3)(a) of the Code in order to cut delay. The list of recommended Insolvency Professionals provides instant solution to the Adjudicating Authority to pick up the name and make appointment. It helps in meeting the time line given in the Code and the unnecessary time wasted firstly in asking the Insolvency and Bankruptcy Board of India to recommend the name and then to appoint such Interim Resolution Professional by Adjudicating Authority. Accordingly, we appoint Mr. Sachin Sapra, email id [email protected] (Mobile No. 9910219977) as an Interim Resolution Professional. His registration number is IBBI/IPA-002/IP-N00005/2016-17/10005. The aforesaid Interim Resolution Professional has no disciplinary proceeding pending against him nor anything else has been pointed out with regard to his antecedents. The Interim Resolution Professional has filed necessary declaration in accordance with the IBBI Regulations and the provisions of the Code. In pursuance of Section 13(2) of Code, we direct that Interim Insolvency Resolution Professional shall immediately on his appointment make public announcement with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. A necessary consequence of the moratorium flows from the provisions of Section 14(1)(a), (b), (c) & (d).
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Service Tax
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2018 (2) TMI 156
Banking and Other Financial Services - the assessee raised funds through issue of Foreign Currency Convertible Bonds (FCCB) in capital markets through overseas lead arrrangers to whom they paid charges in the form of upfront fee, management fee, commitment fee, underwriting fee, out-of-pocket expense, legal fee etc. - period involved is after 18.4.2006 - reverse charge mechanism - Held that: - The Tribunal in assessee's own case M/s. Sakthi Sugars Ltd Versus Commissioner of Central Excise, Salem [2017 (9) TMI 30 - CESTAT CHENNAI], has held that the demand on said legal fees cannot sustain for the reason such charges will not fall under Banking and Financial services and that such service has become taxable only with effect from 1.9.2009 - the demand on legal fees requires to be set aside. For the limited purpose of requantification of the demand, eliminating legal fees, the matter is remanded to the original authority - appeal allowed by way of remand.
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2018 (2) TMI 155
Extended period of limitation - the appellant had already discharged duty liability for the period 24.6.2005 to 14.7.2005 but had not discharged duty liability for the period 15.6.2005 to 23.6.2005 - Held that: - The duty liability for the period 24.06.2005 to 14.7.2005 was discharged vide challans dt. 6.9.2005 (1) and dt. 7.10.2005 (4). It is apparent that the respondent did not have any reason not to pay the service tax for the said period - For the period 10.09.2004 to 16.09.2004 the respondent had not included the value of such service in their ST.3 Returns. It is apparent that having no reason to claim exemption on the said activity. The appellant did not to disclose the said income in the ST-3 Return and did not pay the service tax leviable thereon. Invocation of extended period of limitation is fully justified - appeal allowed - decided in favor of Revenue.
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2018 (2) TMI 154
Renting immovable of property service - case of the department is that the activity of letting out warehouses to FCI would attract service tax under section 65 (105 (zzzz) of the Finance Act, 1994 as renting of immovable property for business or commerce - Held that: - As the appellant is providing various other services apart from the space for storage, therefore, the services appropriately fall under the category of Storage and Warehousing Services. Further, as these services are for agricultural produce, which is not in dispute, therefore, the appellant is not liable to pay service tax on Storage and Warehousing which has been exempted from service tax as per section 65 (105) zza) of the FA, 1994 - the appellant is not required to pay service tax on their activity - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 153
Benefit of N/N. 16/02-Service Tax dated 2.8.2002 - Whether the service provided to World Bank and International Finance Corporation is eligible for exemption N/N. 16/02-Service Tax dated 2.8.2002, which provides exemption to the services provided to United Nations or an International Organization? - Held that: - the definition of international organization as provided therein all the entities of United Nations are covered in the exemption. Therefore, if any entity falls under the umbrella of United Nation, all those entities are covered under the explanation in the exemption notification and apart from those entities, if there are other entities which may or may not part of United Nation, but listed in schedule of Section 3 of the United Nation (Privileges and Immunities) Act, 1947, those entities will be covered under International organization - in the present case, World Bank and International Finance Corporation are part of United Nations. Therefore, there is no need to resort to the definition of International Organization for extending the benefit of notification. In this scenario, the services provided to World Bank and International Finance Corporation being entities of United Nation, exempted under N/N. 16/2002-ST. - benefit allowed. CENVAT credit - Whether the appellant are entitled for CENVAT Credit in respect of input services namely, credit of Insurance Auxiliary Service, Outdoor Catering Service and Mandap Keeper Service for the period prior to 1.4.2011? - Held that: - the Insurance Auxiliary service used for indemnification of the officials such as Directors, employees, who play key role in providing the output service. The mandap keeper service used for conducting interviews for hiring employees, therefore, it is directly related to the overall providing of output service. Outdoor catering service is provided to the employees and clients of the appellant and the cost of the outdoor catering is incurred by the appellant. Therefore, it qualifies as input service and the credit is admissible. The exclusion clause was introduced on 1.4.2011 - In the present case, the period involved is prior to that date. Therefore, there is no dispute for allowing the credit on the aforesaid services - credit allowed. Whether the short utilization of CENVAT Credit against the eligible 20% can be carried forward in the subsequent month and such carried forward amount can be utilized, which comes to more than 20% of the total tax liability in the subsequent month? - Held that: - f in a particular month against the liability of 20% if the appellant utilized less than 20% and the remaining amount is available to the appellant for utilization and the same was utilized in subsequent month. On considering overall period, the total utilization remains within 20% ceiling irrespective in some month utilization is less than 20% and in subsequent month, the utilization is more than 20%, the conditions of Rule 6(3)(c) of CENVAT Credit Rules, 2002, in our view stand complied with - identical issue decided in the case of VIJAYANAND ROADLINES LTD. Versus COMMISSIONER OF C. EX., BELGAUM [2006 (12) TMI 56 - CESTAT,BANGALORE], where it was held that In case a service provider avails credit on any input service and renders such output services which are chargeable to service tax as well as exempted, then the service provider is required to maintain separate accounts for receipt and consumption of input service meant for taxable output service and non-taxable (exempted) output service - in the present case, the appellant in overall period did not exceed 20% of CENVAT Credit utilized. Hence, the demand of service tax equivalent to amount of CENVAT Credit utilized in excess to 20% is not sustainable, accordingly set aside. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 152
Refund claim - time limitation - whether the time period for filing refund under Rule 5 i.e. one year from the date of invoice or from the receipt of convertible foreign exchange against the export of service? - Held that: - From the plain reading of Rule 6A of the Service Tax Rules, 1994, unless and until the payment consideration in convertible foreign exchange against the export of service is received, the export of service is not complete - the relevant date of one year for filing of refund claim should be reckoned from the date of receipt of convertible foreign exchange - appeal dismissed - decided against Revenue.
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2018 (2) TMI 151
Management, Maintenance or Repair services - period of dispute is from July 2004 to March 2008 - Held that: - The activities undertaken by the appellants in pursuance of the work order is clearly covered by the tax entry as they are involved in management, maintenance of such circuit for which they have obtained consideration from their clients - demand upheld. Liability of service tax as of sub-contractor - Held that: - The present work order given to the appellants cannot be considered as a subcontract of such contract given to the main system integrators. As already noted, the system integrators are involved in various activities taxable under various tax entries. The details are not before us. As such, it will not be possible to come to a conclusion that the appellant has only executed the said contract work of a main contract of the same tax entry given to the system integrators. Time limitation - Held that: - no tax is paid on the present disputed activity - Extended period demand is sustainable. Penalty - invocation of section 80 - Held that: - Section 80 provides for waiver of penalty imposed under Section 78, if the appellants can show reasonable cause. The appellants have pleaded that Wipro has given a certificate of payment of service tax on the whole consideration which is inclusive of consideration paid to the appellants - penalty waived by invoking section 80. Appeal allowed in part.
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2018 (2) TMI 150
Demand from re-constituted partnership firm - Held that: - the partnership firm constituted by the original partners is no longer in existence as it has been dissolved by the death of the partners - since the firm has obtained new service tax registration, we are of the opinion that the demand prior to 27.8.2000 will not sustain which requires to be set aside, which we hereby do. Valuation - includibility - amount repaid / refunded to the customers - Held that: - This issue has not been considered by the authorities below. The said issue requires verification and for this matter, we are of the view that the matter has to be remanded to the adjudicating authority - matter on remand. Appeal allowed by way of remand.
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2018 (2) TMI 149
Intellectual Property Service - reverse charge mechanism - case of appellant is that Since recognition by Indian law is a pre-requisite to tax under IPR service, the appellants are not liable to pay service tax - Held that: - In the present case, the IPR is not registered for enforcement under any law including Trade Mark Act in India. This is an admitted fact. IPR now under consideration can be construed to be recognized by the Indian Law, if he satisfies the requirement of IPR as per law. Registration is not a requirement - the appellant cannot be held liable for service tax under IPR - appeal allowed.
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2018 (2) TMI 148
Liability of service tax - payment of consideration for usage of Trademark "AREVA", which is owned and registered by parent company of the appellants in France - reverse charge mechanism - Held that: - There is no provision of Intellectual Property Rights Service for tax liability on reverse charge basis, when such Intellectual Property Rights/Trademark is not recognised for enforcement in India under any law for the time being in force. The submission of the Revenue that the Trademark used by the appellants were recognised by the Trademarks Act, 1999 as the same is fulfilling the legal requirements, cannot be appreciated. As long as it is legally not recognised by a process under the Act, the same cannot be considered as recognised by the law. Circular dated 17.09.2004 of CBEC clarifies that IPRs covered under Indian law in force at present alone are chargeable to service tax. In fact, the clarification supports appellants. Appeal allowed - decided in favor of appellant.
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2018 (2) TMI 147
Business Auxiliary Services - appellants were doing powder coating on the aluminium channels / frames supplied by the customers - Held that: - issue is decided in the case of M/s. Hitech Industrial Lining Pvt. Ltd. Versus Commissioner of Central Excise, Salem [2017 (8) TMI 837 - CESTAT CHENNAI], where it was held that the appellant was only discharging job work much amounted to processing of goods and therefore did not involve any production of goods - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 146
Penalty u/s 78 of FA - construction of a false ceiling on works contract basis - payment of tax with interest on being pointed out - Held that: - during the relevant period, there was lot of confusion in the field and the law came to be settled with the Hon’ble Supreme Court decision in the case of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT], where it was held that - the benefit of Section 80 of the Finance Act, 1994, stand extended to the appellants and penalties stand set aside - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 145
Penalty u/s 76 - payment of service tax with interest before issuance of SCN - service tax on taxable amount realized from customers - Held that: - appellants have discharged their liability of service tax along with interest before issuance of the SCN. The entire tax along with interest was paid on 14.2.2011 whereas the SCN has been issued on 4.10.2011. Sub-section (3) to Section 73 provides that when the assessee pays the entire service tax liability on its own volition or on being pointed out by the department, no SCN is to be served on the assessee - penalty unjustified - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 144
Valuation - includibility - reimbursable expenses - Banking and Other Financial Services - Held that: - the issue has been decided by the Hon'ble High Court of Delhi in the case of Intercontinental Consultants & Technocrats Pvt. Ltd Vs UOI as well as CST Chennai Vs Sangamitra Services Agency [2012 (12) TMI 150 - DELHI HIGH COURT], where it was held that the reimbursable expenses not includible in the assessable value - impugned order does not call for any interference - appeal dismissed - decided against appellant-Revenue.
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2018 (2) TMI 143
CENVAT credit - input services - rent-a-cab service - tour operator service - renting of immovable property - general insurance service (medi claim) - event management service - denial on the ground of nexus - Held that: - the definition of input services prior to 1.4.2011 included the words “activities relating to business” and therefore had a wide ambit covering almost all services - There are plethora of decisions which covers both the services which are impugned in the present appeal - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 142
Liability of service tax - reimbursement expenses incurred towards catalogue printing charges, cost of tender document, crane charges, legal opinion charges, freight charges, vendor registration charges etc. - Held that: - the amounts received are actual reimbursements of specified expenditure, no service tax can be charged on the same. As such, the amount is only being reimbursed to them, hence the judgment of the Hon’ble Madras High Court in the case of Commissioner of Service Tax Vs. Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT] would be squarely covered in favor of them, where it was held that if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration / Commission - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 141
Classification of services - Cargo Handling Activity or otherwise? - mis-interpretation of provisions of Section 2 (f) of the Central Excise Act, 1944 - Held that: - the activity of loading, unloading, packing and unpacking etc. done by the respondent were within the factory premises and since those goods were not meant for loading into any vehicle for outward movement, the same should not fall under the purview of Cargo Handling Service - impugned order upheld - appeal dismissed - decided against Revenue.
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Central Excise
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2018 (2) TMI 140
Maintainability of appeal - acquittal of accused - Held that: - after filing of the complaint case before the trial Court the complainant and its witnesses shied away and did not turn up to the Court for cross-examination after pre-charge evidence were recorded - There was no alternative for the trial Court except to dismiss the complaint and to acquit the accused - appeal dismissed.
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2018 (2) TMI 139
Valuation - job-work - appellant submitted that Rule 10A(i) and (ii) are not applicable as the goods are not sold by the appellant but are used as packing materials by M/s. Marico Ltd. (principal) for packing of coconut oil - department was of the view that the price has to be determined upto 1.4.2007 applying Rule 8 and thereafter under Rule 10A(iii) r/w Rule 4 / Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 - whether the appellants have correctly arrived at the assessable value of the job worked goods? - Held that: - The appellants have paid duty on the assessable valueworked out by taking into account the cost of materials plus conversion cost as laid down in the case of Ujagar Prints. The principal manufacturer (M/s.Marico) used the bottles in its factory for filling coconut oil - It needs to be mentioned that Rule 8 applies when goods are not sold. The goods (HDPE bottles) are sold by appellant to M/s. Marico. The appellant does not captively consume the goods nor does M/s.Marico consume it on behalf of appellant. Similar issue decided in the case of ADVANCE SURFACTANTS INDIA LTD. Versus COMMR. OF C. EX., MANGALORE [2011 (3) TMI 1380 - CESTAT, BANGALORE], where it was held that provisions of Rule 10A can be brought into play only when there is a situation where excisable goods are produced or manufactured by a job worker on behalf of a person and cleared to the buyer of the principal and/or cleared to a depot or a consignment agent. The intention of the Legislature was to capture the tax on the goods, on the value of the said goods when cleared to the ultimate consumers. Appeal allowed.
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2018 (2) TMI 138
Demand of interest and penalty - - Held that: - It is not disputed that the appellant has reversed the credit before utilization - similar issue decided in the case of The Commissioner of Central Excise, Madurai Versus M/s. Strategic Engineering (P) Ltd. [2014 (11) TMI 89 - MADRAS HIGH COURT], where it was held that it is an admitted fact that Rule 14 of the Cenvat Credit Rules has been subsequently amended, wherein it has been clearly stated as “taken and utilised”. Therefore it is quite clear the mere taking itself would not compel the assessee to pay interest as well as penalty. The demand of interest and penalty cannot legally sustained - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 137
Liability of interest - wrong availment of CENVAT credit - Held that: - the appellant had reversed the irregular cenvat credit taken by them on being pointed out by the Revenue - also, the cenvat credit was reversed before the issuance of show cause notice - the appellant is liable to pay interest for irregular availment of cenvat credit in view of the judgment of Hon’ble Bombay High Court in the case of GL&V India [2015 (5) TMI 375 - BOMBAY HIGH COURT] - demand of interest upheld. Extended period of limitation - penalty - Held that: - though the Revenue has invoked the extended period of limitation, but they have not been able to bring on record any material which shows that there was suppression of fact or fraud or collusion or willful misstatement with intent to evade payment of tax - also, the wrongly availed credit was reversed before the issue of show cause notice, therefore there is no intent to evade - extended period and penalty not invocable. Appeal allowed in part.
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2018 (2) TMI 136
Scope of SCN - change in classification - Held that: - the SCN was issued proposing to demand service tax under business support service and the original authority has confirmed the demand under the said category whereas at the appellate stage, the Commissioner (appeals) has changed the classification from business support service to brand promotion service suo motu and unilaterally which is not permitted under law - the impugned order passed by the Commissioner (Appeals) going beyond the SCN is not sustainable in law. Appeal allowed - decided in favor of appellant-assessee.
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2018 (2) TMI 135
CENVAT credit - capital goods - non receipt or subsequent transfer of capital goods - transfer of capital goods to nu-registered factory premises - Held that: - the term factory would also mean the registered premises of a registered person and not any premises which are not registered. Consequently the entire premises on which the impugned order grant relief to the assessee fails. Rule 9 of the Central Excise Rules read with N/N. 35/2001-CE(NT) dated 26.06.2001 clearly mentioned that registration given to a person is only in respect of this specified premises. In this circumstance only the premises which are registered can be deemed to be a factory of manufacturer. Under these circumstances, removal of goods from the registered premises to un-registered premises would require reversal of CENVAT duty amount under the CENVAT Credit Rules. Thus no distinction can be made if the goods are received in the registered factory premises and cleared, or the same are not received in the factory premises at all. CENVAT credit not allowed - appeal dismissed - decided against appellant.
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2018 (2) TMI 134
Refund claim - unjust enrichment - whether the provisions of unjust enrichment is applicable in respect of the refunds arising out of finalization of provisional assessments pertaining to period prior to 25.6.1999 even if the assessments are finalized after 25.6.1999 (when Rule 9B of the Central Excise Rules, 1944 was amended vide notification No. 45/99-CE(NT) dt. 25.6.1999)? Held that: - where the provisional assessment is pertaining to the period prior to the amendment of Rule 9B vide N/N. 45/99-CE(NT) dt. 25.6.1999 and finalization of assessment completed after the said date refund arising out of such finalization of assessment will not hit by unjust enrichment as the provision of unjust enrichment shall not be applicable - the provision of unjust enrichment is not applicable - refund allowed - appeal allowed - decided in favor of appellant.
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2018 (2) TMI 133
Refund of Central Excise Duty - outward freight - rejection on the ground of time limitation - Section 11B of the CEA - Held that: - the Central Excise duty was paid in this case through challan dated 22.01.2007. Admittedly, the refund claim was filed on 22.01.2018 as is evident from paragraph 2 of the order of Commissioner (A). Since Section 9 of the General Clauses Act, which is applicable in determining as to when the period of limitation begins, the period of limitation in this case should commence from 23.01.2007 and, by following that date, the statutory period of one year finishes on 22.01.2008. Since the appellant had filed their refund claim application on 22.01.2008, the refund claim has been filed within the period of limitation laid down by the Section 11B of the CEA. Refund claim is not barred by limitation - matter is remanded back to the adjudicating authority for fresh adjudication after giving fair opportunity to the appellant to defend their case - appeal allowed by way of remand.
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2018 (2) TMI 132
Valuation - goods cleared to units/branches located all over India for consumption/use to provide services to their customers - The case of the department is that as there were no sale it appeared that the value of excisable goods manufactured by the respondent should have been determined as per Section 4(1) (b) of the Central Excise Act, 1944 read with Rule 11 and Rule 8 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 i.e. by cost construction method - Held that: - the matter needs to be referred to the Larger Bench to resolve the following question: - Whether during the period after 1st July 2000 the valuation of the goods supplied which does not involve as sale should be done under Rule 8 of Central Excise Rules, 2000 or on the basis of cost of production without adding any notional profit - matter referred to Larger Bench.
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2018 (2) TMI 131
CENVAT credit - duty paying documents - Revenue was of the view that the invoices not having been issued by a registered dealer, are not the proper documents under Rule 9 of Cenvat Credit Rules - capital goods - Held that: - there is no dispute that M/s Chemicals Sales was not registered with the Central Excise Department as first or second stage dealer during the impugned period. The law is clear under Rule 9 of Cenvat Credit Rules, 2004 that the invoice should be issued by a manufacturer, an importer or a first/second stage dealer. If the invoice was not issued by any of the above categories, the same cannot be considered as a valid document in eyes of law and the Cenvat credit taken on the basis of such a document is irregular and inadmissible - If the department starts accepting the invoices issued by a trader, who is not a registered dealer, it will create chaos in the Cenvat credit system and there will be flagrant misuse of the said scheme, which is a facility to present cascading effect of taxes. Time limitation - penalty - Held that: - appellants while declaring availement of Cenvat credit in the ER-1 returns have misstated the facts because the invoices, on which they had availed Cenvat credit, were not issued by a manufacturer/importer/registered dealer thereby resulting in availment of irregular and fraudulent credit. As a result, they had mis-declared the availment of Cenvat credit - extended period and penalty rightly invoked. CENVAT credit - capital goods - Revenue is of the view that the same are the capital goods and hence the appellant no.1 should have taken Cenvat credit to the extent of 50% of the duty paid on such capital goods - scope of SCN - Held that: - since the credit held inadmissible to them in the first year, was available to them in the succeeding years. I observe that the issue is not covered by the show cause notice. However, the appellants no.1 are at liberty to avail admissible credit and needs no approval - the order of Commissioner (Appeals), in so far as it relates to the irregular credit of ₹ 53,005/-, is set aside and the matter is remanded back to Commissioner (Appeals) to pass a fresh order after giving fair opportunity to the appellants to defend their case - Matter on remand. Appeal disposed off.
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2018 (2) TMI 130
CENVAT credit - duty paying documents - It is the case of the Revenue that the invoices issued by OPL did not contain the details as required under the provisions of Rule 9(2) of CENVAT Credit Rules, 2004 - What are the conditions to avail CENVAT credit on inputs? - Held that: - mention of vehicle Registration No. was not warranted in this case since the supplier and receiver of the goods were situated in the same premises, and accordingly, mention of incorrect vehicle no. has little effect regarding admissibility of CENVAT credit, and such error may be treated as the clerical mistake as contended by the appellant in various statements and grounds of appeals since nothing contrary is apparent from the records. What are the responsibilities of the purchaser of inputs to make them eligible to avail CENVAT credit? - Held that: - the first appellate authority has called for and considered all the records that need to be gone into to come to the conclusion that whether the main respondent has correctly availed cenvat credit of the duty paid by OPL. This factual matrix has not been controverted in the grounds of appeal. What are the responsibilities of the supplier of the inputs and issuer of CENVAT credit? - Held that: - it is on record and held by the first appellate authority that OPL has in fact filed returns with the authorities as and when manufactured and cleared grey fabrics. Appeal dismissed - decided against Revenue.
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2018 (2) TMI 129
CENVAT crediit - whether can cenvat credit of service tax paid on the services in relation to issue and receipts of Foreign Currency Convertible Bond (FCCB) in Singapore, a place outside India, be used for paying central excise duty on the goods manufactured in India? - whether the entire cenvat credit taken can be used even when no separate account has been maintained in respect of receipt and consumption of common input service used in the manufacture of dutiable final product or in providing output taxable services and such input services are also used for manufacture of exempted final products or for providing exempted services? Held that: - The Rule 6(5) of the Cenvat Credit Rules, 2004 covers the input services of banking and other financial services and specifically allows the credit of input services, even if they are partly used for the provision of taxable activities. The respondent has filed the breakup of their turnover during the relevant financial year which has been quoted hereinabove. From the perusal of the turnover, it is evident that the major part of the turnover is with respect to manufacture and clearance of dutiable packaged software which is almost 50% of the total turnover. Thereafter the balance turnover is with respect to exempted goods customised software and for services - the respondent has utilised the cenvat credit taken in their business activities in India and a major part of it is with regard to manufacture and clearance of dutiable output/services. Respondent-assessee is entitled to consequential benefit - appeal dismissed - decided against Revenue.
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2018 (2) TMI 128
CENVAT credit - inputs/capital goods/input services - Welding Electrodes - whether credit is admissible to welding electrodes used for repair and maintenance of capital goods? - Held that: - The Larger Bench in the case of Ramala Sahkari Chini Mills Ltd. Vs. Commissioner of Central Excise, Meerut - I [2016 (2) TMI 902 - SUPREME COURT] had observed that the definition of 'inputs' in the CENVAT Credit Rules as it stood prior to 1.4.2011 cannot be given a restrictive meaning - the denial of credit is unjustified and the appellants are eligible for credit - appeal allowed.
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2018 (2) TMI 127
SSI Exemption - use of brand name - demand on the ground that he is manufacturing the water filter parts under the brand name of MEIL - Held that: - the matter has already travelled upto Tribunal and there is no discussion or finding in the earlier orders of the Tribunal on the issue of appellants being a manufacturer or a trader. As already observed the first order of the Tribunal upheld the Revenue's stand on classification of the goods as falling under Chapter Heading 84.21 and the second order passed on ROM directed the lower authorities to examine the applicability of SSI benefit. As such, it would not be proper for us to go beyond the earlier orders of the Tribunal and to discuss the issue of the appellants being a manufacturer or not. Brand name - Held that: - the brand name ‘Mahaan’ was endorsed in his name only with effect from 01.04.1998. The lower authorities have already granted the benefit to the appellants, for the period post 01.04.1998. Nothing more is required to be considered at this stage. Appeal dismissed - decided against appellant.
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2018 (2) TMI 126
Valuation - includibility - design charges of GR Pipes - Held that: - the design and drawing charges collected by the appellants were only in respect of GR pipes which they subsequently sold to M/s. BSES - there is a direct nexus between the said charges collected and the pipes sold to M/S. BSES - The amount of ₹ 6,20,400/- surely was an additional payment required to be done by M/s. BSES and ors., to the appellants herein by reason of order in connection with the sale of the impugned GR pipes. The addition of such charges for arriving at the assessable value cannot then be disputed - demand upheld. Penalty - Held that: - the controversy has emanated only on account of interpretational error on the part of the appellants, who had held the view albeit incorrect - there is no suppression on the part of the appellants for which reason, the penalty is set aside. Appeal allowed in part.
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2018 (2) TMI 125
Rectification of mistake - addition of grounds of appeal under Rule 10 of the CESTAT Procedure Rules, 1982 - Held that: - the additional grounds by the applicant is that Asst. Commissioner had no jurisdiction to file appeal before the Commissioner (Appeals) as the Order-in-Original was passed by the Additional Commissioner. This issue is purely a question of law based on Section 35E(2) of the CEA, 1944. It is a settled position that the question of law can be raised at any stage - the grounds involved being question of law, is allowed to be raised at this stage when the appeal is pending for disposal - application for rectification of mistake allowed.
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2018 (2) TMI 124
CENVAT credit - duty paying invoices - denial on the ground that the serial number on the invoices on which the credit was taken was hand written - Held that: - Para 3.2 of the Central Excise Manual says that Hand written serial number shall not be accepted - however, said Central Excise Manual and the para 3.2 of Chapter 4 thereof are merely departmental instructions. In the absence of any statutory provision, the credit cannot be denied - appeal allowed.
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CST, VAT & Sales Tax
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2018 (2) TMI 123
Validity of SCN - recovery of VAT dues of the seller of the flat from the purchaser of the flat in the housing society - case of petitioner is that the impugned notice issued by the respondent authority to the housing society is wholly without jurisdiction, bad and illegal as the petitioner is a bonafide purchaser of property for valuable consideration - Held that: - it is evident that the petitioner had issued public notices dt.1.2.2016 in two newspapers inviting any claim on the property. The respondent authorities did not respond to the same. The petitioner was never informed about the VAT dues either by the sellers or by the Respondents. Therefore, in our opinion the respondents can be said to be negligent in not being attentive to the notice issued by the petitioner, hence, the petitioner cannot be fixed with any constructive notice of the VAT dues. The core component which emanates from a bare reading of the aforesaid section is that the charge or transfer of the property shall be void if it is made with an intention of defrauding the government revenue . Thus, the transfer of property can be declared void provided there is intention to defraud the government revenue. The Act does not lay down any mechanism to declare the transfer as void. In our considered opinion, the only remedy available to the respondent authorities is to approach the Civil Court for a declaration to treat the transfer as void by adducing evidence of an intention to defraud . In the present case no tax was due on the petitioner and no charge is created on the property in question in respect of the alleged dues of the erstwhile owner which is an essential requirement of the section. Hence, the applicability of the provisions of section 47 in the case of the petitioner itself is an argumentative issue. In such circumstances, the only recourse available for the VAT authorities is to approach the Civil Court to annul the transfer on the ground that it was made with an intention to defraud the government. A conspectus of the aforenoted sections of the Act, will postulate that the authorities are not conferred with any powers to issue any communication/notice to the Society instructing it not to issue a No due certificate in relation to the property. In our opinion, such notice will circumvent the provisions of the Act as they do not intend to empower or authorize the department to issue directions/instructions directing the Society to refuse No due certificate of the property on which charge is established. By issuing the impunged notice debarring the Society from issuing the No due certificate, the authorities have conferred upon themselves with the power which is lacking in the provisions of the Act, hence, the same can be said to be extralegal and unwarranted. Thus, the impugned notice merits to be set aside as the same travels beyond the scope of the provisions of the GVAT Act. However, the department may, if so desire, take appropriate proceedings in accordance with law for having the transfer to be declared as void under section 47 of the GVAT Act. Petition allowed.
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2018 (2) TMI 122
Validity of assessment order - finality attached to the Form F declaration - petitioner's contention is that the third respondent committed an error in disallowing the claim of exemption on the ground that the third parties are agents of the petitioner and not the employees of the petitioner, without taking into consideration the legal position that, once Form F declaration is filed, it is mandatory that exemption ought to be necessarily granted. Held that: - similar issue in the case of M/s.Hindustan Petroleum Corporation Ltd. v. The Deputy Commissioner (CT) [2016 (12) TMI 313 - MADRAS HIGH COURT]. In the said case, the writ petitions were filed challenging the assessment orders under the CST Act and the TNGST Act by which the assessing officer disallowed the stock transfer effected by the petitioner therein to their depot at Tada, State of Andra Pradesh. The Court considered various decisions and held that the assessing officer in the said case misdirected himself in not posing a right question for arriving at a right conclusion. The reasons assigned in the impugned order with regard to finality of the Form H declaration is incorrect. This writ petition is partly allowed, in so far as it relates to enquiry into the Form F declaration and the same is set aside and the matter is remanded to the third respondent to conduct an enquiry, examine the correctness of Form F declaration, who shall afford an opportunity of personal hearing to the petitioner - appeal allowed in part and part matter on remand.
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2018 (2) TMI 121
Motor Vehicle or not? - Tata Hitachi Model EX 200 LC Hydraulic Excavator with HD Bucket and kit loaded on Truck No.HR 38 F 1131 - Petitioner has contended that Tata Hitachi Model EX 200 LC Hydraulic Excavator is not a motor vehicle as defined in Clause 28 of Section 2 of the Motor vehicles Act, 1988 and therefore, cannot be brought under tax net - whether Tata Hitachi Model EX 200 LC Hydraulic Excavator is a motor vehicle, falling within Section 2 (i) of the Motor Vehicles Act, 1988 and whether tax has to be paid? Held that: - In RDS Projects Ltd., Vs. Commercial Tax Officer, Chennai, [2006 (11) TMI 559 - MADRAS HIGH COURT], a Hon'ble Division Bench of this Court, directed physical inspection of the machines and file a report. After considering the report, the Hon'ble Division Bench of this Court framed a question, as to whether the excavator not running of tyres but on iron chain plates such as, the caterpillars and military tanks and others, would fall within the definition of Section 2 (i) of the Tamil Nadu Tax on Entry of Motor Vehicles Act, 1990 read with Section 2 (28) of the Motor Vehicles Act, 1988, and whether, liable to pay tax under Section 3 of the Tamil Nadu Tax on Entry of Motor Vehicles Rules, 1990 - it was held in the case that having regard to its distinguishing features from the other excavators has to be held as not "motor vehicle" falling under the definition of the term defined under Section 2(28) of the Motor Vehicles Act, 1988 and therefore, not liable for entry tax. Petition allowed.
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2018 (2) TMI 120
Penalty u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 - Exemption towards the sales made to 100% EOU - disallowance of exemption on the ground that on the ground that tools did not fall, within the scope of the notification, issued in GO Ms.No.528 CT & RE dated 21.11.1997 - Held that: - similar issue decided in the case of Appollo Saline Pharmaceuticals Versus Commercial Tax Officer (Fac) And others [2001 (10) TMI 1100 - MADRAS HIGH COURT], where it was held that The assessments for the assessment years 1993-94 and 1994-95 which were assessments made on the basis of the accounts, and not based on any other material and were not estimates, have therefore, to be regarded as assessments made under Section 12(1) to which the penal provisions of Section 12(3) are not attracted. The levy of penalty for those two assessment years is set aside - revision dismissed - decided against Revenue.
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