Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 12, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
PMLA
Service Tax
Central Excise
Articles
News
Highlights / Catch Notes
GST
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Recommendationsregarding Data Analytics made during the 26th meeting of the GST Council
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Recommendations regarding E-way Bill made during meeting of the GST Council
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Recommendations made during the 26th meeting of the GST Council held in New Delhi Today
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26th Meeting of the GST Council meets & decides Extension of tax exemptions for exporters for six months
Income Tax
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Exemption u/s 10B - eligibility criteria - whether deduction can be claimed for a period of 10 consecutive years beginning with the previous year in which the assessee begins manufacture of the products, the assessee could in this case claim the right to enjoy the benefit of Section 10B for a period of 10 years from 20.06.2007 when it was approved as a 100 per cent export oriented undertaking? - simultaneous benefit under Section 80IC claimed - decided against the assessee - HC
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Income accrued in India - Existence of Permanent establishment (PE) there was no basis for the AO to conclude that the Special Bench of the ITAT had erred in its conclusion in favour of the Assessee that the LOs were not carrying on any activity which was either incidental and auxiliary in nature. - HC
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Levy of penalty u/s 271C - non deduction of tds on payment of lease rent to Noida Authority u/s 194I - Since assessee failed to prove its bonafide through any relevant and cogent evidence, therefore, assessee cannot take benefit of Section 273B of the I.T. Act as the assessee has failed to prove any reasonable cause for failure to comply with provisions of law - AT
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Addition u/s 40A(3) - variation in the recording of entries in assessee’s ledger - provisions of section 40A(3) shall not be a hindrance in the business operation of the assessee, who has been following such pattern from earlier years and on the principle of going concern which the revenue has not doubted. - AT
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Transfer of capital asset by a company to its subsidiary company - Long term capital gain v/s long term capital loss - transaction cannot be regarded as transfer u/s 2(47)(iv) - the question of computing either capital loss or capital gain does not arise. Thus, the assessee is not entitled to carry forward the capital loss of ₹ 25 crores as claimed - AT
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MAT - Book profit adjustments - when the provision for gratuity is being made on the basis of actuarial valuation, it cannot be said to be an unascertained liability and added in terms of clause (c) to Explanation (1) to section 115JB of the I.T. Act. - AT
Service Tax
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Classification of services - whether the activity of providing cab to other travel agents for rendering services to foreign tourist would fall under the definition of rent-a-cab service? - Held No - AT
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Demand of service tax - Supply of Tangible Goods - the appellant has furnished documents which show that the said user fee collected is assessed under the VAT Act. The levy of VAT and service tax being mutually exclusive, the demand is not sustainable - AT
Central Excise
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Evasion of tax - civil and criminal proceedings can be initiated simultaneously and judgment in one proceeding will not have impact on the other - merely because CESTAT had set aside the demand, the criminal proceedings cannot be quashed. - HC
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Classification of goods - The goods i.e. trimmings and end cuts arise during the course of manufacture of Stitch Bonded Fabrics of Glass is correctly classifiable as waste and scrap of glass under Tariff items 7001 0090 - AT
Case Laws:
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Income Tax
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2018 (3) TMI 438
Net profit determination - Net profit ratio of 2.5% of total turnover - Held that:- Referring to the law laid down in the case of Telelinks versus CIT (2014 (12) TMI 570 - PUNJAB & HARYANA HIGH COURT), we are of the view that learned Tribunal has rightly assessed the net profit at the rate of 2.5% of total turnover instead of 5.2% and directed the Assessing Officer to calculate the net profit accordingly. No substantial question of law arises in this appeal.
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2018 (3) TMI 437
Penalty u/s 271D / 271E - non-compliance of the provisions of Section 269-SS and 269-T - competent authority to levy the penalty - Held that:- We are of the view that first show cause notice, without initiating proceedings for imposition of penalty under Section 271-D (was issued on 22.9.2017). It is also well settled that a penalty under this provision is independent under assessment. The action inviting imposition of penalty is granting of loans above the prescribed limitation otherwise then through banking channels and as such infringement of Section 269-SS is not related to the income that may be assessed or finally adjudicated. We find no force on the contention advanced by the learned Senior counsel for the petitioner. Writ petition has no merit and is, accordingly, dismissed.
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2018 (3) TMI 436
Reopening of assessment - non disclosure of sale of land - whether Letter of Allotment does not confer the possession of land on the buyers and possession of land is given only on execution of sale deed - Held that:- Admittedly, in the present case, plot of land which have been sold are the trading assets of the Assessee. Thus, the above Section would have no application. So far as the reliance upon the statement of Mr. Deshmukh is concerned, it was pointed out that sale deed and consequent possession of the plot was given to Mr. Deshmukh only on 11th March, 2004 and not at the time of issuing an allotment letter in 2002. Thus, the sole reliance upon the statement of Mr. Deshmukh, is not justified in the context of the documentary evidence to the contrary. Therefore, on the basis of the allotment letter, it is clear that no possession of the plot was given to the prospective buyers till the execution of the sale deed. In the above circumstances, the view taken by the Tribunal, on facts, is a possible view. Therefore, the proposed question does not give rise to any substantial question of law. Also it is an undisputed position that Assessee has offered the income on sale of plot to tax, on execution of sale deed. The Revenue has also accepted the tax on it. Therefore, in the absence of Revenue pointing out any change in law in the subsequent year which works to its prejudice, subjecting the sale of plot to tax in the subject Assessment Years, is only an academic exercise.
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2018 (3) TMI 435
Exemption under Section 10B - eligibility criteria - whether deduction can be claimed for a period of 10 consecutive years beginning with the previous year in which the assessee begins manufacture of the products, the assessee could in this case claim the right to enjoy the benefit of Section 10B for a period of 10 years from 20.06.2007 when it was approved as a 100 per cent export oriented undertaking? - simultaneous benefit under Section 80IC claimed - Held that:- The mere fact that the assessee (it may be noticed, who had in fact enjoyed the benefit of deduction under Section 80HHC from 1992-1993 and, thereafter, took further benefit under Section 80IC from 2004-2005 for a period of 5 years) thought it fit to apply and get the approval within the meaning of Section 10B cannot bind the income tax authorities to take a view contrary to the one, which we have taken, as merely obtaining the status of a 100 per cent export oriented undertaking cannot clothe the assessee with the right to claim benefit of deduction beyond 10 years, as we have explained. May be, it has impact for other purposes and on which we do not wish to pronounce; but, we are only concerned in this case with the question whether the assessee is entitled to the benefit under Section 10B and, in our view, the assessee is not entitled. Therefore, that the assessee had embarked upon an exercise, which is turned out to be futile, cannot be an argument, which will advance the case of the assessee. Therefore answer the question of law in favour of the appellant / revenue and against the respondent / assessee. The order of the Tribunal will stand set aside in regard to the claim under Section 10B of the Act. Having regard to the fact that we have found that the respondent / assessee was not entitled to the benefit under Section 10B and also having regard to the fact that the assessment order reflects that documents were produced in support of the claim under Section 80IC, but, in view of the impossibility to claim the both together, the claim under Section 80IC had been given up, we would think that it will be in the fitness of things that we remit the matter back to the Assessing Officer for consideration of the case of the assessee under Section 80IC of the Act for the assessment year in question.
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2018 (3) TMI 434
Income accrued in India - Existence of Permanent establishment (PE) so as to attract the provisions of Section 9 - income directly or indirectly attributable to the branches/offices is not taxable in India - DTAA between India and Japan - Held that:- The Court is unable to be persuaded that the ITAT erred in its conclusion that the evidence produced by the AO does not show that the LOs of the Assessee carried on any activity which was not incidental and auxiliary in nature. As urged that the ITAT had merely gone by the fact that the Reserve Bank of India (“RBI”) had not found the Assessee to be in violation of any of the conditions subject to which it was permitted to operate its LOs in India. The Court finds that, independent of the above factor, the ITAT has in fact examined in detail all the materials referred to by the AO in its remand report as well as the order of the CIT (A) and has given detailed reasons why none of these materials establish that the LOs were used by the Assessee to carry on any business or trading activity in India. The said factual finding by the ITAT has not been shown to be perverse. The Court further notes that there was no basis for the AO to conclude that the Special Bench of the ITAT had erred in its conclusion in favour of the Assessee that the LOs were not carrying on any activity which was either incidental and auxiliary in nature. With the consistent position in this regard continuing since 1977-78, in the absence of any evidence to suggest a change in the circumstances, there was no warrant for the AO and the CIT (A) to take a different view of the matter. - Decided in favour of assessee.
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2018 (3) TMI 433
Applicability of section 194H in respect of discount allowed to the distributors on distribution of pre-paid SIM cards/talk time - Held that:- As decided in assessee's own case [2017 (5) TMI 1538 - ITAT JAIPUR] Section 194H pre-supposes the payment to be made to the third party namely, Distributor or the Agency and if on a close scrutiny of Section 182, Distributor is not an agent, therefore, in our considered opinion, the provisions of Section 194H have wrongly been invoked, and therefore, the first issue is answered in favour of assessee. Deduction of TDS under section 194J in respect of roaming charges paid to other telecom operators - Held that:- As decided in assessee's own case [2017 (7) TMI 1076 - RAJASTHAN HIGH COURT] as decided the issue in favour of the assessee by holding that the fee paid for roaming charges does not fall in the ambit of fee for technical services as no human intervention is required in providing the roaming services by the mobile service provider. - Decided in favour of assessee.
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2018 (3) TMI 432
Levy of penalty u/s 271C - non deduction of tds on payment of lease rent to Noida Authority u/s 194I - Held that:- A.O. in the order u/s 201(1) / 201(1A) specifically noted the explanation of assessee in which it was submitted by assessee that assessee requested the Noida Authority to clarify their position whether their income is exempt, but, no reply have been received from them. Prior to it, the Writ Petition of Noida Authority was dismissed by Hon’ble Allahabad High Court. A.O. ultimately, rejected the contention of assessee and passed the order for recovery of the short deduction with interest. The assessee in the penalty proceedings claimed before A.O. that income of the Noida Authority exempt under section 10(20) of the I.T. Act, which fact was also has not proved by the assessee because it was incorrect. Therefore, the assessee had been negligent in not deducting TDS on lease rent paid to Noida Authority without any justification. Since assessee failed to prove its bonafide through any relevant and cogent evidence, therefore, assessee cannot take benefit of Section 273B of the I.T. Act as the assessee has failed to prove any reasonable cause for failure to comply with provisions of law. No interference is called for in the matter. Assessee submission that since the assessee moved an application under section 154 before Ld. CIT(A) for rectification of the impugned order, therefore, appeals of the assessee may be kept in abeyance, this issue is not arising out of the orders of the authorities below and even the assessee has not moved any proper application for admission of additional ground before the Tribunal that assessment order is time barred, therefore, such plea of the assessee cannot be entertained at this stage. The request of the assessee for keeping the appeals in abeyance is accordingly rejected. - Decided against assessee.
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2018 (3) TMI 431
Eligibility to deduction u/s 36(1)(vii) - Held that:- For an amount to be claimed as deduction u/s 36(1)(vii), the same should be written off as irrecoverable in the accounts of the assessee for the previous year. Further condition for allowance of the claim u/s 36(1)(vii) is mentioned in Section 36(2) of the I.T.Act. The Hon’ble High Court had restored to the issue for the reason that no inquiry was made by the Tribunal in this regard. Both the parties have agreed that it would suffice, if the matter is restored to the A.O. for examination whether there is actual write off of amount of ₹ 1,16,521 during the relevant assessment year. In view of the submission of both AR and DR, restore the issue to the A.O. - Decided in favour of assessee for statistical purposes.
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2018 (3) TMI 430
Transfer of land whereas by virtue of executing the Joint Development Agreement (JDA) - capital gain computation - eligible transfer u/s 2(47) - pro-rata transfer of land - entitlement for deduction u/s 54F - Held that:- CIT(A) directed the Assessing Officer to re-compute the long term capital Gains on the amount actually received by the appellant in pursuance of the said agreement as relying on case of C.S. Atwal & Others [2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT]. Thus we uphold the order of the Ld. CIT(A). Regarding the deduction under section 54F which has not been allowed by the Ld. CIT(A) we hereby direct the Assessing Officer to allow the due benefits to the assessee as provided under the Income Tax Act. Since the issue has been decided in the favour of the assessee, any decision on the grounds of reopening becomes academic in nature and hence needs no adjudication.
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2018 (3) TMI 429
Addition u/s 40A(3) -variation in the recording of entries in assessee’s ledger - genuineness of the payment by the assessee and identity of the sellers - relationship of a principal and agent - Held that:- The provisions of section 40A(3) are not intended to restrict the business activities but to caution that payments exceeding ₹ 20,000/- are made in cheque/draft. The provisions of section 40A(3) of the Act are to be in consonance with business expediency trade practice and other genuine relevant factors. In this present case, the assessee has intimated the circumstances under which the assessee was compelled to make the cash payments and also the genuineness of payment and the identity of the payee is not doubted. Considering business expediency and judicial decisions dealt above, we are of the substantive view that the provisions of section 40A(3) shall not be a hindrance in the business operation of the assessee, who has been following such pattern from earlier years and on the principle of going concern which the revenue has not doubted. - Decided in favour of assessee Levy of penalty u/s 271B - not obtaining the audit report as required under section 44AB - efault committed by the assessee - Held that:- As find from the income tax returns for the assessment years 2012-13 and 2013-14 filed by the assessee that the assessee has shown business income from the sale of recharge vouchers and not shown as turnover. Perusal of the order in the case of Anoop Kumar Beri (2004 (7) TMI 305 - ITAT DELHI-F ) find that the assessee was under bonafide belief that receipts from commission were not to be included for the purpose of determining the obligation of audit under section 44AB and same constituted a reasonable cause for not getting the accounts audited. In the present case, the income shown by the assessee is from the commission on sale of recharge vouchers, which alone can be treated as assessee’s turnover. Thus the default committed by the assessee in not presenting the audit report is exonorable and we do not find any mala fide on the part of the assessee in this way. Hence, we delete the penalty imposed u/s.271B - Decided in favour of assessee
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2018 (3) TMI 428
Capital gain computation - adopting value of Stamp Valuation Authority - Held that:- From the above, it is clear that assessee has made objections for adopting value of Stamp Valuation Authority, which exceeds FMV of the property on the date of transfer, AO may refer the valuation of the capital assets to a valuation officer. In the given case, AO has adopted the stamp valuation without referring to the valuation officer, even though, AO objected for adopting SRO value. We are in agreement with the findings of the coordinate benches and accordingly, we remit this issue back to the file of the AO with a direction to refer this matter to the DVO and redo the income from capital gains de-novo. Coming to the adoption of SRO value for cost of acquisition as on 1981 instead of FMV as on that date, we notice that SRO value is a guideline value, which is to be applied for calculation of stamp duty only and the same is borne by the purchaser. As far as seller is concerned, what is relevant is the fair market value that could have been received by him. In few cases, they raise objection before the stamp valuation authority for adopting higher valuation or go to courts. Therefore, it is proper and wise to adopt the actual FMV existed as on 1981. Therefore, we are inclined to remit this issue also to the file of AO to determine the FMV as on 1981. Therefore, ground raised by the assessee on this issue is allowed. With regard to adhoc disallowance of expenditure of ₹ 1 lakh, we notice that AO has disallowed ₹ 1 lakh against the claim of expenditure to the extent of ₹ 6,47,621/-, which may be reduced to 10% of the expenditure claimed since all the expenditures are relating to running of the assessee’s business. Accordingly, this ground is partly allowed.
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2018 (3) TMI 427
Transfer of capital asset by a company to its subsidiary company - Long term capital gain v/s long term capital loss - whether there is a valid transfer? - Held that:- The undisputed fact is that M/s. Emami Realty Ltd is a 100% subsidiary of M/s.Emami Infrastructure Ltd, the assessee herein. M/s.Emami Rainbow Niketan Pvt. Ltd is in turn a 100% subsidiary of M/s. Emami Realty Ltd. In other words, this is a second step down 100% subsidiary of the assessee. The issue is whether the provisions of section 45(iv)(a)(b) is applicable to a second step down subsidiary. They are divergent views on this issue We prefer to follow the decision in the case of Petrosil Oil Co. Ltd [1998 (7) TMI 63 - BOMBAY High Court] we have to hold that the transaction in question cannot be regarded as transfer in view of provisions of section 47(iv) of the Act, as it is a transfer of capital asset by a company to its subsidiary company and as a second step down 100% subsidiary company is also as subsidiary of the assessee company under the Companies’ Act 1956 as the term ’subsidiary company’ has not been defined under the Income-tax Act, 1961. Hence we hold that the transaction of sale of shares of M/s. Zandu Realty by the assessee to M/s. Emami Rainbow Niketan Ltd is not regarded as a transfer in view of Sec.47(iv) of the Act. Hence, the question of computing either capital loss or capital gain does not arise. Thus, the assessee is not entitled to carry forward the capital loss of ₹ 25 crores as claimed. Therefore, the ground nos. 2 & 3 raised by the assessee in the appeal are dismissed and Ground No. 4 is allowed.
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2018 (3) TMI 426
Revision u/s 263 - assessee has claimed additional depreciation on plant and machinery u/s 32 (1)(iia) which was not verified by the AO during the course of assessment proceedings - whether activity of mining and extraction of coal amounts to manufacturing activity? - Held that:- As relying on CIT vs. G.S Atwal & Co. (2001 (2) TMI 32 - CALCUTTA High Court) there remains no ambiguity that the activity of assessee i.e. mining and extracting of coal is manufacturing activity. Therefore, assessee is very much entitle for additional depreciation u/s 32(1)(iia) of the Act. It was also observed that the issue about the activities of assessee was duly examined by AO during the course of assessment proceedings as evident from the submission of Ld. AR discussed in the preceding paragraphs. Therefore, in our considered view AO allowed the claim of assessee for the additional depreciation after necessary verification and application of his mind. Similarly, we find that Ld. Pr. CIT in his impugned order u/s 263 has held that AO has not verified the necessary details of the plant and machinery purchased during the year. In this regard, we find that the AO has raised the queries regarding the addition of fixed asset which are duly responded by the assessee during the course of assessment proceeding. In view of above, we feel that the assessment order u/s 143(3) of the Act was passed duly after due examination of the records for the addition of plant and machinery as well as activities carried on by assessee - Decided in favour of assessee
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2018 (3) TMI 425
Disallowance u/s.14A - assessment order passed u/s.153C r.w.s. 143(3) - Held that:- It is an undisputed fact that the AO already made an addition under the said provisions during the regular assessment proceedings u/s.143(3) of the Act. This issue now stands remitted by the Tribunal to the file of AO. Further, it is an undisputed fact that no seized material exists to support the Revenue to assume jurisdiction validly u/s.153C of the Act for invoking the provisions of section 14A of the Act successfully in this non-abated assessment. We do not approve the AO’s attempts to resort to make additions by making disallowance u/s.14A of the Act in the assessment made u/s.153C of the Act in the absence of any incriminating material. - Decided in favour of assessee Disallowance being contribution to Group Gratuity Scheme - perusal of the orders of the Revenue does not indicate the existence of any incriminating material linking to the said claim of the assessee. We find the contents of Para No.7 of the AO and Para Nos. 3.11 and 3.12 of the order of CIT(A) are relevant. Considering the same, we are of the view that this issue also should be decided in favour of the assessee Set off of the disallowed sum against the contingency disclosed by the assessee in the return of income towards discrepancies/additions if any - Held that:- It is settled issue that the contingent disclosure is available for set off against the disallowance u/s. 14 of the Act. However, in the present case, the question of set off does not arise as we have already granted relief to the assessee on legal issue relating to the recording of satisfaction before invoking the provisions of section 14A of the Act r.w. Rule 8D(2) of the I.T. Rules. The Ground No.2/Additional Ground No.2(a) becomes academic. Reduction of returned loss offered by the assessee during the search & seizure proceedings - additional groud admission - Held that:- We examined the objections raised by the Ld. DR for the Revenue and find there is need for investigation into the seized material and other documents that were discovered during the search and seizure operation and the reasons that led to the disclosure of ₹ 1.91 crores in general and ₹ 60 lakhs in particular for the year under consideration. In our view, this exercise falls in the zone of investigation of facts. Accordingly, the conditions mentioned by the Supreme Court in the case of NTPC Ltd. (1996 (12) TMI 7 - SUPREME Court) do not allow in this case for admission of the additional ground. Accordingly, the additional Ground No.2(b) raised by the assessee is not admitted. Disallowance being contribution to Group Gratuity Scheme - Held that:- the order of CIT(A) on this issue is fair and reasonable as the scheme has not been approved till date, as admitted by the Ld. AR for the assessee. Hence, it does not call for any interference on this issue - Decided against assessee disallowance of Portfolio Management Fees - Held that:- We find the claim of the assessee with regard to payment of PMS fees paid by the assessee is an allowable deduction from the capital gains. Therefore, we direct the AO to examine the facts of the present case and apply the ratio laid down by the Tribunal in the case of Serum Institute of India Ltd. (2018 (3) TMI 391 - ITAT PUNE).
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2018 (3) TMI 424
Validity of assessment u/s 153C - proof of incriminating material found - Held that:- When dumb documents like the present loose sheets of papers are recovered and the Revenue wants to make use of it, the onus rests on the Revenue to collect cogent evidence to corroborate the noting therein. The Revenue has failed to corroborate the noting by bringing some cogent material on record to prove conclusively that the noting in the seized papers reveal the unaccounted on-money receipts of the assessee. Further, no circumstantial evidence in the form of any unaccounted cash, jewellery or investments outside the books of account was found in course of search in the case of assessee. Thus, the impugned addition was made by the AO on grossly inadequate material or rather no material at all and as such, deserves to be deleted. See ACIT vs. Layer Exports Pvt. Ltd. [2016 (10) TMI 1024 - ITAT MUMBAI] and ITO vs. Mangalam Gems Pvt. Ltd. [2017 (2) TMI 165 - ITAT MUMBAI] - Decided in favour of assessee
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2018 (3) TMI 423
Disallowance u/s 14A - addition to the book profit u/s 115JB - Held that:- We find the Assessing Officer made disallowance u/s 14A and also added the same to the book profit u/s 115JB. We find the ld. CIT(A) restricted such disallowance to ₹ 12,75,500/- and also directed the Assessing Officer to add the amount of ₹ 12,75,500/- to the book profit instead of ₹ 14,72,158/- as expenditure incurred in relation to the exempt income. Tribunal in assessee’s own case for assessment year 2006-07 [2016 (4) TMI 1306 - ITAT DELHI], we deem it proper to restore the issue to the file of the Assessing Officer for adjudication of the issue afresh in the light of the decision of the Tribunal and in accordance with law after giving due opportunity of being heard to the assessee. Interest charged u/s 234B and 234C in respect of disallowance on account of ‘provision for bad and doubtful debts’ and ‘deferred tax liability’ made under MAT provision of the I.T. Act - Held that:- No interest u/s 234B and 243C could have been levied consequent to inclusion of the above two items while computing book profit as per Explanation (1) to section 115JB which were brought on the statute book with retrospective effect from 01.04.2001 by the Finance Act, 2008 and 2009 respectively and that after filing of the return of income. The assessee cannot be held as a defaulter of payment of advance tax on account of a subsequent amendment which came into force retrospectively after filing of the return. So far as the decision relied on by the ld. DR in the case of Rolta India Ltd. (2011 (1) TMI 5 - SUPREME COURT OF INDIA) is concerned, the same relates to the levy of interest u/s 234B on the tax calculated on book profit u/s 115JA. There is no dispute to the fact that the assessee is liable to interest u/s 234B on the tax calculated on book profit u/s 115J/115JA. The question before the Hon’ble Supreme Court was as to whether the assessee which is a MAT company was not in a position to estimate its profit for the current year prior to the end of the financial year on 31st March. However, in the instant case the amendments which got the assent of the President were brought into the statue book after the end of the financial year. Therefore, the assessee was not in a position to estimate its liability under the MAT provisions. Addition to the total income of the assessee by disallowing payment of royalty by the assessee to its AE being at arm’s length price - Held that:- So long as the expenditure or payment has been demonstrated to have been incurred or laid out for the purpose of business; it was no concern of the TPO to disallow it on any extraneous reasoning. He was expected to examine the international transaction as he actually found them and then make suitable adjustment but a wholesale disallowance of the expenditure is not warranted. It has further been held that it is not open to the TPO to question the judgment of the assessee as to how it should conduct its business and regarding the necessity or otherwise of incurring the expenditure in the interest of its business. It is entirely the choice of the assessee as to from whom it contemplates to source its technology or technical knowhow and as to what steps should be taken to meet the competition prevalent in the market and to stave off the competitors. This is the domain of the businessman and the TPO has no say in the matter. The Revenue cannot justifiably claim to place itself in the arm chair of businessman or in the position of the Board of Directors and assume the role to decide how much is the reasonable expenditure having regard to the circumstances of the case. In view of the above discussion and in view of the detailed reasoning giving by the CIT(A) while deleting the disallowance made by the Assessing Officer. Addition on account of provision for gratuity to book profit as per provision of section 115JB - Held that:- It is an admitted fact that the provision for such gratuity was made on the basis of actuarial valuation which even has been accepted by the Assessing Officer. The only grievance of the Assessing Officer is that since the actual payment of the gratuity is deferred to a later date on the happening of certain events namely death or voluntary retirement of the employee which are uncertain events, therefore, such provision is as an unascertained liability. However, the various Benches of the Tribunal are continuously and consistently holding that when the provision for gratuity is being made on the basis of actuarial valuation, it cannot be said to be an unascertained liability and added in terms of clause (c) to Explanation (1) to section 115JB of the I.T. Act. The Hon’ble Bombay High Court in the case of CIT v. Echjay Forgings Private Limited[2001 (2) TMI 56 - BOMBAY High Court] has held that since provision for gratuity was made on the basis of actuarial valuation, it was an ascertained liability and the said amount would not be added to the net profits. - Decided against revenue
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Customs
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2018 (3) TMI 439
Pre-deposit - the only ground which was canvassed was that the Bank did not advance loan to the Appellant - Held that: - we find no error in the approach of the Appellate Tribunal when in the first impugned order dated 16th October 2014, it was held that the Appellant neither pleaded the financial hardship nor placed any material in support of such a plea - there was absolutely no merit in the Applications for modification which have been decided against the Appellant by the two other impugned orders. Appeal dismissed - decided against appellant.
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2018 (3) TMI 422
Conversion of License - power of DGFT to issue Advance License retrospectively - Held that: - In the case of Bhilwara Spinners Ltd. [2011 (3) TMI 112 - BOMBAY HIGH COURT], the Hon’ble High Court has observed that DGFT is empowered to amend or modify the license retrospectively - demand set aside - appeal dismissed - decided against Revenue.
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2018 (3) TMI 421
Classification of coal imported by the appellant/assessee - whether classified under CTH 2701 1290 or otherwise? - N/N. 12/2012-Cus. dated 17.3.2012 - Held that: - different Benches of CESTAT rendered conflicting decisions. The Chennai Bench as well as Ahmedabad Bench held that coal imported would fall under steam coal attracting nil rate of duty. It was also followed by the Mumbai Bench. On the other hand, the Bangalore Bench of CESTAT held that the coal imported would be bituminous coal attracting duty @ 5% - Thus, in view of the conflicting decisions, the matter was referred to the Larger Bench and vide order dated 16.1.2017, the issue was taken up for consideration by the Larger Bench - The department has not filed any appeal against the above Larger Bench decision. The appeals require to be remanded to the adjudicating authority for denovo consideration - appeal allowed by way of remand.
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Corporate Laws
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2018 (3) TMI 420
Winding up - Held that:- Petitioner’s entire claim in this application for the principal sum of ₹ 25,31,990.75/-, as mentioned in the notice dated September 03, 2016 is deemed to have been admitted by the company. In this application filed in the month of November, 2016 the petitioner has not disclosed any agreement entitling it to claim interest on account of unpaid bills. The petitioner is entitled to receive interest on account of the unpaid bills at the rate of 6%, p.a. from the month of December 20, 2016. As far as the defect pointed out that the petitioner has filed this application by taking out a notice of motion, the same is a matter of procedure. It is settled law that the procedure is the handmaid of justice and the defect in this application is cured by directing the petitioner to pay costs assessed at ₹ 10,000/- to the State Legal Services Authority. Subject to payment of costs by the petitioner, as directed above within December 18, 2017, the winding up application is admitted for ₹ 25,31,990/-, together with interest thereon at the rate of 6% from the month of December, 2016. If, the company pays the amount of ₹ 25,31,990/- together with interest thereon at the rate of 6% from the month of December, 2016 to the petitioner within January 15, 2018, the winding up application shall stand permanently stayed. In the event of any failure on the part of the company to pay the said amount within the time frame mentioned above, the petitioner will cause advertisement in the Bengali newspaper, “Bartaman” and English newspaper, “The Statesman”.
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PMLA
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2018 (3) TMI 419
Acquittal from the charges punishable under Section 3 read with Section 4 of PMLA 2002 - Held that:- The accused were acquitted from the charges punishable under Section 3 read with Section 4 of PMLA 2002 wherein it was further ordered that the properties of the accused which were attached by the said authority are acquitted u/s 235(1) Cr.P.C. from the charges punishable u/s 3 r/w 4 of the Prevention of Money Laundering Act, 2002 and the properties which are attached by the authority of Prevention of Money Laundering Act, 2002 under Ex. P.40, Ex. P.41 is ordered to be released and directed to hand over the same with respective accused. As the respondent has not disputed the said facts, under these circumstances, it appears from the acquittal order that all the appellants are acquitted pertaining to the FIR as well as charges punishable Section 3 or 4 of PMLA. All the appeals are allowed. The properties which are attached by the authority are released forthwith.
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Service Tax
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2018 (3) TMI 418
Classification of services - rent-a-cab services or otherwise - whether the activity of providing cab to other travel agents for rendering services to foreign tourist would fall under the definition of rent-a-cab service? - Held that: - The definition of rent-a-cab scheme operator as under section 65(91) is any person engaged in the business of renting of cabs. The facts reveal that the appellant was collecting hire charges - The issue whether hiring of vehicles would fall under definition of rent-a-cab service has been decided in the case of Sachin Malhotra [2014 (10) TMI 816 - UTTARAKHAND HIGH COURT], where it was held that unless there is control, which is passed to the hirer under the rent-a-cab scheme, there cannot be a taxable transaction under Section 65(105)(o), read with Section 65(91) of the Service Tax Act. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 417
Classification of services - Works Contract Services or Erection, Commissioning or Installation Services - benefit of abatement under N/N. 01/2006 ST dated 01/03/2006 - Held that: - The activity carried out by the appellant is in the nature of Erection, Commissioning or Installation and for the disputed period i.e. 2008-09 to 2009-10, the activity will also be covered under the category of Works Contract Service (WCS) which was introduced in the statute w.e.f. 01/06/2007. Reliance placed in the case of ABL Infrastructure Pvt. Ltd. V/s CCE, Nashik [2015 (2) TMI 801 - CESTAT MUMBAI] in which the Tribunal has held that the assessee will be entitled to the benefit of the Composition Scheme even if the option, there or, is exercised at a later date. The matter remanded to the Adjudicating Authority for deciding the issue de novo after extending the benefit of the Works Contract Composition Scheme and requantify the Service Tax payable thereon - appeal allowed by way of remand.
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2018 (3) TMI 416
Liability of service tax - agreements with various financial institutes including banks and general insurance companies to expand sale of their cars - Business auxiliary services or not? - the Department's case is that appellants, for arranging vehicle loans and vehicle insurance from Maruti Finance and Maruti Insurance to their customers, are getting commission amounts from the said companies and hence they are promoting or marketing the business of those companies and receiving in lieu commission - appellants contend that as dealers of MUL, they are only providing services on behalf of the clients i.e. MUL and that they have not entered any agreement with the financial institutions/banks and hence there can be no service tax liability. Held that: - MUL receive 3.5% commission from the financial institutions out of which 3% is passed on to the dealer. Adjudicating authority has concluded that the fact of commission routed through MUL is of no consequence in view of Section 67 of the Act as value for any taxable service shall be the gross amount charged by the service provider for taxable service rendered by him to his client and that it is nowhere provided that money should flow directly from the service recipient. In the case of CCE, Jaipur vs. Ajmer Automobiles Pvt. LTd. [2012 (8) TMI 535 - CESTAT, NEW DELHI], on similar issue, the Tribunal has held that since MUL had paid the service tax on the entire commission, in such cases, tax is not payable again for the same amount. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 415
Change of cause title - change from commissioner of Central Excise, LTU, Chennai to “The Commissioner of GST & Central Excise, Trichy” consequent upon the introduction of GST and the resultant change in the jurisdiction - Held that: - the miscellaneous applications filed by Revenue for change of cause title allowed - application allowed.
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2018 (3) TMI 414
Club Association Services - demand of service tax - Held that: - reliance placed in the case of Ranchi Club Ltd. Versus Chief Commissioner of Central Excise & Service Tax [2012 (6) TMI 636 - Jharkhand High Court], where it was held that If the club even though a distinct legal entity is only acting as an agent for its members in matter of supply of various preparations to them no sale would be involved as the element of transfer would be completely absent - appeal allowed - decided in favor of appellant
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2018 (3) TMI 413
Refund of Service tax - export of textile made-ups under the claim of drawback - Held that: - an identical issue was considered by the Tribunal in the case of Art & Craft Inc. & others Vs. Commissioner, [2016 (4) TMI 25 - CESTAT NEW DELHI] where the Tribunal held that N/N. 33/2008-ST dated 07.12.2008 cannot be held to be of retrospective nature and the refund claims filed prior to the introduction of the said notification would be hit by N/N. 41/2007-ST, if the exports have been made under duty drawback. The exports were made prior to the introduction of the N/N. 33/2008-ST dated 07.12.2008 and were admittedly under the claim of drawback, the refunds are not admissible to the appellants - appeal dismissed - decided against appellant.
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2018 (3) TMI 412
Demand of service tax - Supply of Tangible Goods - disallowance of credit on input services - whether the activities of supply of equipment would fall within the ambit of supply of tangible goods or not? - Held that: - when there is supply of use of equipment without transferring right of possession and effective control of the equipment, the same would fall within the category of supply of tangible goods service - the activity carried out by the appellant, involving supply of tangible goods for use, since such supply also involves transfer of right of possession and effective control of such goods, the said activity would not fall under "supply of tangible goods" service. Moreover, the appellant has furnished documents which show that the said user fee collected is assessed under the VAT Act. The levy of VAT and service tax being mutually exclusive, the demand is not sustainable on this ground also - demand set aside. Disallowance of credit on input services - Held that: - There are various decisions of the Tribunal as well as the High Courts which have held the above activities to be eligible for credit - the disallowance of credit on the impugned services except club services are eligible for credit. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (3) TMI 411
Evasion of tax - prosecution case is that A4 and A5 having obtained permission from the Deputy Commissioner, Central Excise, Guntur for destruction of two autoconers, indeed, did not do so, but they, with the conspiracy of A1 to A3, fabricated record of destruction in their premises and sold the two autoconers to M/s.SJSML for ₹ 50 lakhs - Whether there are merits in this Criminal Petition to quash the proceedings in C.C.No.29 of 2006? Held that: - civil and criminal proceedings can be initiated simultaneously and judgment in one proceeding will not have impact on the other - In the case on hand also, merely because CESTAT held that A4 and A5 need not pay the tax as claimed before the Commissioner, Customs and Central Excise, Guntur and approved by him, the criminal proceedings cannot be quashed. The CESTAT observed as if it was not in dispute that machinery was dismantled under the supervision of the Central Excise Range Officers and cleared from the factory as scrap. When the foundation for case of the Department was that two autoconers were not destructed despite obtaining permission, it is quite astounding as to how the CESTAT observed that the destruction of two autoconers was not in dispute. Therefore, though the order of the CESTAT attained finality on civil side, still criminal proceedings against fraud and cheating can be independently established by the prosecution. Petition dismissed - decided against petitioner.
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2018 (3) TMI 410
CENVAT credit - trading activity undertaken by the appellant - demand of 6% of trading activity - Held that: - learned Commissioner (Appeals) failed to understand that there is no trading services, there is only trading activity as per the provisions of Finance Act also, the activity of trading is termed as an exempted service but there is no trading service - appellant has taken cenvat credit and not claimed the refund thereof. Therefore, it would be only a revenue neutral situation, the appellant is not required to pay 6% of the value of trading activity. Extended period of limitation - Held that: - the goods have been exported by the appellant under ARE 1 document and the same was in the knowledge of department - extended period not invocable. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 409
Refund of education/ higher education cess - Revenue entertained a view that such cess is not refundable as no exemption is provided for the same - appellant enjoyed area based exemption under N/N. 56/2002-CE dated 14/11/2002 - Held that: - reliance placed in the case of M/s. SRD Nutrients Private Limited Versus Commissioner of Central Excise Guwahati [2017 (11) TMI 655 - SUPREME COURT OF INDIA], where it was held that appellants were entitled to refund of Education Cess and Higher Education Cess which was paid along with excise duty once the excise duty itself was exempted from levy - decided in favor of appellant. Valuation of excisable goods - outward freight up to the place of delivery of their finished goods - includibility - Held that: - the appellant have not produced anything on record which would show that they had cleared the goods from the factory gate to a warehouse, any other premises, a depot, consignment agents premises etc. from where such excisable goods were sold. Admittedly, the goods sold by the appellant delivered at the buyers premises will not make the place of removal as buyers premises - there is no justification for the appellant to consider the assessable value with inclusion of freight element after the goods were sold/removed from the factory - decided against appellant. Appeal allowed in part.
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2018 (3) TMI 408
Refund claim - unjust enrichment - Held that: - since the documents were not before the Commissioner (Appeals) and, therefore, the Commissioner (Appeals) has not examined these documents. Further, the appellant has produced these documents before me, but the same has not been examined by the original authority - this case needs to be remanded back to the original authority to examine afresh various documents viz. balance sheet and the certificate issued by the Chartered Accountant and then decide the refund claim of the appellant - appeal allowed by way of remand.
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2018 (3) TMI 407
EOU - demand of interest - N/N. 52/2003-CUS and 22/2003-CE - imported raw materials on which duty has been foregone and material utilised for manufacturing of finished goods - Held that: - even if the Revenue Authorities demand the interest liability, on the raw-materials which were imported and used, the amount paid excess by the respondent would suffice for the demand of the interest, if any - It can be noticed that any excess payment can be adjusted towards the duty of payable by a person is contemplated and it would mean including the interest also and in this case there cannot be any recovery of interest - interest not warranted - appeal allowed in part.
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2018 (3) TMI 406
Demand of excise duty - goods cleared as spent solvents - It is the case of the Revenue in the SCN as confirmed by the Lower Authorities that the spent solvents which are distilled and purified in the appellant s premises are manufactured products and liable for excise duty - Held that: - the issue is no more res integra, the decision of Jurisdictional High Court of Andhra Pradesh in the case of COMMISSIONER OF C. EX., HYDERABAD-I Versus AUROBINDO PHARMA LTD. [2010 (10) TMI 175 - ANDHRA PRADESH HIGH COURT] has come to a conclusion which is in favour of the assessee. It was held in the case that the spent solvent is not a marketable product after process of manufacture. The law is settled which is in favour of the appellant i.e. spent solvents are not to be excisable. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 405
CENVAT credit - common inputs/input services for taxable as well as exempt goods - demand of an amount equivalent to 8% or 10% of the value of the exempted goods - Held that: - the Adjudicating Authority has diligently gone through the entire case records and held in favour of respondent with which we concur - We find no reason to interfere in such a reasoned order given by the Adjudicating Authority as Revenue has not contradicted the findings effectively and hold that the impugned order is correct and legal and does not require any interference - appeal dismissed - decided against Revenue.
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2018 (3) TMI 404
Recovery of duty alongwith interest - Advance licenses - Held that: - It is also seen from the records that the Ministry of Commerce and Industry by letter No. 8/EOU/495/Prop/2005/5060 dated 27.10.2005 had informed the respondent herein that exports effected prior to 1.4.2000 needs no regularisation; and by letter 8/EOU-495/Prop/2005/5060 dated 27.10.2005 had informed the respondent herein that exports effected prior to 1.4.2000 needs no regularisation; and by letter 8/EOU/495/VSEZ/2006/4887 dated 14.08.2006 regularised the exports made post 1.4.2000 by the respondent from the third parties - the learned Commissioner was correct to hold that the proceedings initiated by the show-cause notice needs to be dropped - appeal dismissed - decided against Revenue.
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2018 (3) TMI 403
Clandestine removal - shortage of raw material - MS billets - Held that: - the production particulars for 21.1.2013 was not recorded in such statutory register, even though the Central Excise officers visited the factory on 24.1.2013. Thus, the provisions of clause (b) of sub-rule (1) of Rule 25 is violated/contravened by the appellant and as such, the excess found stock was liable for confiscation. Considering the fact that there was no scope for entering the production particulars on 24.1.2013 in the statutory record on the said date and in view of the fact that the balance excess found stock was also available in the factory of the appellant, the quantum of redemption fine and penalty, in this case, can be reduced in the interest of justice. Appeal allowed in part.
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2018 (3) TMI 402
CENVAT credit - it was alleged that appellant had wrongly passed on Cenvat credit to its buyer, without supplying the Cenvatable goods - natural justice - Held that: - though, the appellant has specifically requested for cross-examination of Shri E/51089/17-SM Vikas Gupta, whose statement has been relied on by the department for confirmation of the adjudged demand, but no such opportunity has been given to the appellant for such cross examination. Thus, it is a case of violation of the principles of natural justice - the matter should also be remanded to the original authority for affording opportunity of cross-examination of the witness Shri Vikas Gupta, authorised signatory of M/s Vikas Enterprises by the appellant - appeal allowed by way of remand.
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2018 (3) TMI 401
Deduction on account of ‘interest on receivables’ - case of Revenue is that that the deduction on account of free replacement of breakages and interest on receivables is not admissible - Held that: - the invoices issued by the Appellant provides for 21 days credit. This period is to be reckoned for the purpose of deduction on account of interest on amount receivables for credit period as the Appellant were claiming/ borrowing funds from the bank - the deduction claimed by the Appellant has to be allowed - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 400
Levy of excise duty - distilled methanol cleared by appellant - Held that: - The adjudicating authority has only relied upon the statement of various buyers but has not considered the binding judgment of Hon’ble High Court of Andhra Pradesh in the case of CCE, Hyderabad-I vs. Aurobindo Pharma Limited [2010 (10) TMI 175 - ANDHRA PRADESH HIGH COURT], where it was held that the spent solvent is not a marketable product after process of manufacture. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 399
Benefit of N/N. 4/2006 dated 01.03.2006 vide Sr. No.47 - The department’s case is that as per Sr. No.47 of 4/2006 and list 3 of Sr. No.58 the product covered under exemption is Natural Micronised Progesterone tablet whereas the appellants product consist of various ingredients, the product is not alone Natural Micronised Progesterone, accordingly, exemption is not available - Held that: - as per the exemption entry the drug and medicine both are exempted. Drug contains only one ingredient i.e. basic drug whereas any medicine which is manufactured out of a drug is invariably consist of other ingredients which is not in the form of excipient. Merely by adding the excipient, the medicine which has character of basic drug does not get altered. Therefore, only by adding excipient the exemption cannot be denied. From the packing of the product it can be seen that the product sold is Natural Micronised Progesterone. Therefore even though it contains various other excipients, the medicine is clearly covered under Sr. No.58 of the list 3 of N/N. 21/2002-Cus. Therefore it is eligible for exemption N/N. 4/2006-CE. Appeal dismissed - decided against Revenue.
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2018 (3) TMI 398
Reversal of CENVAT credit - Rule 6 (3) (b) of CCR - it was alleged that M.S Coils/ HR sheets used for manufacture of such pipes were exclusively used for manufacture of exempted final products being of specific grade and were even separately stored hence could not be treated as common input used for manufacture of dutiable or exempted goods - Held that: - as far as demand of cenvat credit of ₹ 1,01,25,986/- is concerned the Appellant has already reversed the 8%/10% amount on the value of exempted goods in terms of Rule 6 (3). We find that even though the inputs has been exclusively used in exempted goods, the assessee cannot be forced not to pay the amount in terms of Rule 6 (3) and instead reverse the credit. Further it is to be seen that apart from said input i.e HR Coils and MS Plates the Appellant has used common inputs i.e welding electrodes, welding wires, flux, oxygen gas, grinding wheels etc. in manufacture of exempted goods and thus reversed the amount in terms of Rule 6 (3) (b). In such circumstances it cannot be said that all the inputs are for exclusive use in exempted final products. The Rule 6 (1) and Rule 6 (3) (b) both cannot be applied in case of such clearances. Demand of ₹ 64,40,555/- made on the ground that they have used common inputs and hence liable to pay 8%/10% amount in terms of Rule 6 (3) (b) eventhough they have maintained the separate account and the proportionate credit was reversed by them at the time of clearance - Held that: - where the Appellant has reversed the proportionate credit and has also maintained separate accounts of inputs used in such exempted goods, they cannot be forced to pay the amount in terms of Rule 6 (3) (b). It is apparent from the record that the major item i.e MS Plates and HR sheets account was separately maintained and in case of common inputs the credits were proportionately reversed. Further in terms of retrospective amendment to rule 6 of the Cenvat Credit Rules by Section 73 of the Finance Act, 2010 as long as the assessee reverses the proportionate cenvat credit, the same is considered as sufficient compliance with Rule 6 - demand not sustainable. Demand u/s 11D - Held that: - the show cause notice has nowhere alleged that the said amount has been represented as excise duty by the Appellant. Hence the Board Circular No.599/36/2001-CE dt. 12.11.2001 is not applicable - demand not sustainable. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 397
Reversal of CENVAT credit - job-work - case of Revenue is that as the said jobwork is exempted in terms of N/N. 214/86 hence the Appellant are liable for reversal of 8/10% amount of the value of jobwork goods i.e. exempted goods in terms of Rule 6 (3) of CCR - Held that: - the issue settled in the case of STERLITE INDUSTRIES (I) LTD. Versus COMMISSIONER OF CENTRAL EXCISE, PUNE [2004 (12) TMI 108 - CESTAT, MUMBAI], where it was held that Modvat credit of duty paid on the inputs used in the manufacture of final product cleared without payment of duty for further utilisation in the manufacture of final product, which are cleared on payment of duty by the principal manufacturer, would not be hit by provision of Rule 57C. The issue involved stands settled in favour of assessee as credit is available on the inputs used in jobwork activity undertaken in terms of N/N. 214/86-CE - demand set aside. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 396
Refund of duty paid by their job worker on physician’s sample - Section 4A of the CEA - Held that: - the issue is no more res integra. Hon’ble Apex Court in the case of Sun Pharmaceutical Inds. Ltd. [2008 (9) TMI 992 - CESTAT AHMEDABAD], where it was held that lower assessable value of sample packs does not hold any merit to allege undervaluation with an intent to evade Central Excise duty and calculation of value of sample packs on pro rata basis is not supported by law. Matter is remanded to the original adjudicating authority to decide following the decision of the Hon'ble Apex Court in Sun Pharmaceutical Inds. Ltd. - appeal allowed by way of remand.
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2018 (3) TMI 395
Valuation of intermediate product - Proteolysed Liver Extract and Pharma Reptone - Demands were raised against the Appellant by issue of show cause notices on the ground that as per section 4, the value of the goods shall be based on the value of the comparable goods or cost of production, if any - Held that: - the same goods are being purchased by the Appellant from five different manufacturers. The Appellant for the purpose of valuation of such captively consumed goods has made the invoices of all such manufactures as basis, we do not find any reason not to accept such prices of other manufacturer as comparable goods prices - matter remanded back to the adjudicating authority to verify the facts once again and to pass a reasoned order by valuing the goods in terms of Rule 6 (b) (i) of Valuation Rules and to make such adjustments as appear to be reasonable - appeal allowed by way of remand.
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2018 (3) TMI 394
Classification of goods - Stitch Bonded Fabrics of Glass falling - whether classified under CETH 70199090 or otherwise? - Held that: - waste and scrap of glass is covered under Tariff items 7001 and the nature of scrap in the appellant’s case since does not fall under first two sub-heading will fall under 7001 00 90 as other waste and scrap of glass. There is no dispute that the trimmings and end cut is waste and scrap and technical/chemical characteristics of the material content is undisputedly glass, therefore, there is no doubt that the goods in question is waste and scrap of glass and correctly classifiable under Tariff items 7001 0090. The goods i.e. trimmings and end cuts arise during the course of manufacture of Stitch Bonded Fabrics of Glass is correctly classifiable as waste and scrap of glass under Tariff items 7001 0090 - appeal dismissed - decided against appellant.
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2018 (3) TMI 393
SSI exemption - use of Brand name - N/N. 8/2003-CE dt. 01.03.2001 - Held that: - Ultimately the logo of the Appellant was held to be deceptively similar and they were restrained from using said logo which debars them claiming any ownership of said logo ab-initio. Even the application for registration was not filed by the Appellant company but by one of the directors in their individual capacity and hence the Appellant never showed or exercise their ownership upon said logo. Even if the goods were supplied by the Appellant to OEM manufacturer then too they are not entitled to claim any benefit of the exemption notification in question - the Appellant Unit is not eligible for the benefit under exemption notification in question and are liable for duty. Personal penalties imposed upon Shri Kishore M. Vasant and Shri A. K. Agarwal - Held that: - issue involved is one of interpretation of notification - it cannot be said these persons were involved in intentional duty evasion - penalties set aside. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 392
SSI Exemption - N/N. 8/2003-CE - since there is no one-to-one co-relation between the inputs and final products under Modvat scheme, hence it is not possible to allow the manufacturer to simultaneously avail modvat on some products and avail exemption on some other products under small scale exemption scheme - Held that: - Hon’ble Supreme Court judgment in the case of Nebulae Health Care Ltd [2015 (11) TMI 95 - SUPREME COURT], wherein it was held that if Cenvat credit is availed in respect of goods manufactured for others and not on goods manufactured on own account and once excise duty is paid on the goods manufactured for others the SSI unit is entitled to avail benefit of SSI exemption on the goods manufactured on own account. Once the assessee is maintaining separate records and is not availing availing credit on inputs used for the production of goods, which are cleared under N/N. 8/2003-CE dt. 1.3.2003, they are eligible to claim exemption under the said notification. The Appellant is eligible for the benefit of SSI exemption and the demands are not sustainable - appeal allowed - decided in favor of appellant.
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