TMI Tax Updates - e-Newsletter
March 18, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. EXEMPTONS FROM PROVISIONS OF RESERVE BANK OF INDIA ACT, 1934

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Income Tax Department conducts searches in Tamil Nadu

2. Impact of Coronavirus on Supply Chain

3. Promotion of Local Manufacturing

4. First Virtual Trade Fair by APEDA draws huge response from foreign participants and Indian exporters

5. Export Promotion

6. Demand of Indian Products in International Market

7. IFSC Authority takes decisions on various regulations, and fee structures

Notifications

GST - States

1. (01/2021)FD 16 CSL 2021 - dated 5-3-2021 - Karnataka SGST

Supersession Notification (09/2020) No. FD 03 CSL 2020 dated: 2nd April, 2020

2. 05/2021-State Tax - dated 15-3-2021 - Maharashtra SGST

Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding ₹ 50 Cr from 01st April 2021

3. 03/2021-State Tax - dated 15-3-2021 - Maharashtra SGST

Seeks to notify persons to whom provisions of sub-section (6B) or sub-section (6C) of section 25 of MGST Act will not apply.

4. G.O. Ms. No. 4 - dated 10-3-2021 - Puducherry SGST

Supersession Notification G.O. Ms. No. 12, dated the 1st April, 2020

Income Tax

5. 18/2021 - dated 16-3-2021 - IT

Income-tax (5th Amendment) Rules, 2021 - New Rule 29BA. Application for grant of certificate for determination of appropriate proportion of sum (other than Salary), payable to non-resident, chargeable in case of the recipien

6. 17/2021 - dated 16-3-2021 - IT

Amendment in Notification No. 66/2014 dated 13th November, 2014

SEBI

7. SEBI/LAD-NRO/GN/2021/11 - dated 16-3-2021 - SEBI

Securities and Exchange Board of India (Investment Advisers) (Second Amendment) Regulations, 2021

8. SEBI/LAD-NRO/GN/2021/10 - dated 16-3-2021 - SEBI

Securities and Exchange Board of India (Portfolio Managers) (Amendment) Regulations, 2021

9. SEBI/LAD-NRO/GN/2021/09 - dated 16-3-2021 - SEBI

Securities and Exchange Board of India (Research Analysts) (Amendment) Regulations, 2021

Circulars / Instructions / Orders

DGFT

1. 41/2015-2020 - dated 16-3-2021

Amendment in Appendix 2E (List of agencies to issue Certificate of Origin-Non Preferential) regarding change in Indian Chemical Council branch address for Certificate of Origin

Highlights / Catch Notes

GST

• GST on Royalty Payments for Mineral Exploration: Applicant Responsible for Tax in Uttar Pradesh.

  Case-Laws - AAR : Classification of services - Leasing - Royalty - exploration of natural resources - This activity of payment of lease charge/ dead rent/ royalty is towards the supply of service i.e. Licensing service for the right to use minerals including exploration and evolution, wherein the Government of Uttar Pradesh is supplier and the applicant is recipient. The liability of payment of GST liability on the amount of royalty paid to the Government is on the Service recipient i.e. the applicant in the instant case - AAR
  Visit to Get Source

  ---

• Appeal Authority Criticized for Overlooking Primary Argument in Penalty Levy Case; Focused Only on Alternate Plea.

  Case-Laws - HC : Levy of penalty - In the present case, the course adopted by the appeal authority leaves a lot to be desired. The appeal authority appears to have only considered and offered reasons to accept the alternate plea made by the petitioner but it has not made any application of mind to the main plea that there was no infraction of law and the penalty provisions were not attracted. - HC
  Visit to Get Source

  ---

• Court Permits Petitioner to Seek Revision of GST Form TRAN-1 for Transitional Credit via GST Council Review.

  Case-Laws - HC : Seeking to revise/correct/file afresh declaration in GST Form TRAN-1 to enable it to claim transitional credit of eligible duties - This Court grants liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner's assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit - HC
  Visit to Get Source

  ---

Income Tax

• No Late Fee for TDS Statement Delays Before June 1, 2015, Due to Prospective Amendment in Section 200A.

  Case-Laws - HC : Late fee levied u/s 234E - delay in furnishing the tax deducted at source statement - the amendment to section 200A of the Act came into effect from 01/06/2015 and is held to be prospective in nature and therefore no computation of fee for the demand or intimation for fee under section 234 E could be made for late deposit of TDS for the assessment years prior to 01/06/2015. - HC
  Visit to Get Source

  ---

• Penalty u/s 271(1)(c) Invalidated: Revenue's Argument Using External Sales Tax Info Rejected, Lacks Valid Basis.

  Case-Laws - AT : Penalty levied under 271(1)(c) - The revenue has tried to make out a case that since the addition was made pursuant to information from sales tax department, this penalty appeal falls in the exception carved out in the CBDT circular regarding appeals arising out of additions made pursuant to information from outside agencies. We are of the opinion that this plea is not tenable inasmuch as once revenue accepts that penalty is levied on outside agency information the penalty levied will have no legs to stand. - AT
  Visit to Get Source

  ---

• Disallowing carry forward of business or unabsorbed depreciation is inappropriate in appeals if pending rectification by Assessing Officer.

  Case-Laws - AT : Disallowance of carry forward of business/unabsorbed depreciation in absence of evidences - when the issue is already pending before the learned Assessing Officer for rectification, it is not appropriate for her to decide on that issue in appellate proceedings. - AT
  Visit to Get Source

  ---

IBC

• Tribunal Allows 193-Day Appeal Delay, Excludes Legal Remedy Time u/s 61(2) of Insolvency & Bankruptcy Code 2016.

  Case-Laws - AT : Condonation of delay of 193 days in filing appeal - The ‘time spent’ in prosecuting the legal remedy by the Petitioner/Appellant/Bank is required to be excluded while computing the period of limitation as envisaged under section 61(2) of the ‘Insolvency & Bankruptcy Code, 2016 - this ‘Tribunal’ by adopting a practical, purposeful, meaningful, a rational approach and by taking a pragmatic view of the matter in a lenient and liberal manner condones the delay of 193 days in furtherance of substantial cause of justice. - AT
  Visit to Get Source

  ---

Service Tax

• Court Rules Reimbursable Expenses Like Travel and Marketing Not Part of Taxable Service Value for Agents.

  Case-Laws - AT : Valuation - inclusion in taxable services or not - expense incurred by the agents, namely, travel, conveyance and vehicle running expenses, training expenses, printing and stationary, and business development/marketing and sales promotion expenses - confirmation of demand by the adjudicating authority by including the reimbursable expenses in the gross taxable value cannot be sustained. - AT
  Visit to Get Source

  ---

• CENVAT Credit Eligibility: Location Irrelevant, Focus on Intent and Receipt of Input Services by Assessee.

  Case-Laws - AT : CENVAT credit - input services - It is immaterial that where is the location of the service was provided. It is important to see that irrespective of such services have been provided anywhere but it is for the purpose of the assessee and it is received by the assessee. If that test is qualified then it cannot be said that the service was not received by the assessee. Thus the appellant is entitled to Cenvat credit. - AT
  Visit to Get Source

  ---

Central Excise

• Appellant Allowed to Offset Refund from One Unit Against Demand for Another Unit Under Provisional Assessment.

  Case-Laws - AT : Seeking appropriation of refund due to it in respect of one of its units against the demand in respect of its another unit - provisional assessment - the appellant had stated that before finalization of their balance-sheet and differential ED, they had made the following advance payments towards the expected differential duty - Permission granted - AT
  Visit to Get Source

  ---

VAT

• Court Rules Form VAT 240 Invalid for Input Tax Credit Claim; Proper Return Filing Required Under KVAT Act Sections 10(3) & 10(4).

  Case-Laws - HC : Input Tax Credit - The learned Single Judge was justified in dismissing the writ petitions as the appellant was claiming input tax credit based upon Form VAT 240 and by no stretch of imagination Form VAT 240 can be treated as a returns for the purposes of claiming input tax credit, especially in the light of the fact that filing of returns to compute the net tax liability has to take place keeping in view Section 10(3) and 10(4) of the KVAT Act. - HC
  Visit to Get Source

  ---

Case Laws:

• GST

• 2021 (3) TMI 643
  Classification of services - Leasing - Royalty - exploration of natural resources - service provided by the Government of Uttar Pradesh to M/s. Ajay Kumar Singh in accordance with the Notification No. 11/2017-CT (Rate) dated 28.06.2017 read with annexure thereof - to be classified under Chapter number 9973 as Licensing services for the right to use minerals including its exploration and evolution or any other service under the said chapter or not - rate of GST HELD THAT:- The Government provides license to various companies for exploration of natural resources. For this, the licensee company is required to pay the consideration to the Government in the form of annual licensing fee, lease charge, royalty, dead rent etc. In the State of Uttar Pradesh the mining lease is governed by the U.P. Minor Minerals (Concession) Rules, 1963. Rule 13 of the said Rules deals with Security Deposit , Rule 21 deals Royalty and Rule 22 deals Dead Rent . This activity of payment of lease charge/ dead rent/ royalty is towards the supply of service i.e. Licensing service for the right to use minerals including exploration and evolution, wherein the Government of Uttar Pradesh is supplier and the applicant is recipient. The liability of payment of GST liability on the amount of royalty paid to the Government is on the Service recipient i.e. the applicant in the instant case, in terms of Sl. No. 5 of Notification No. 13/2017 -Central Tax (Rate) dated 28-06-2017. Classification of service - HELD THAT:- The Applicant has been awarded with a lease of the area specified in the lease agreement and conferred the right to extract the minerals lying underneath for appropriation. The right so conferred is not limited to using the minerals over the lease period but rather to appropriate the minerals extracted during the lease period Of course, extraction of minerals and the Government, does not continue to enjoy title over the minerals extracted by the lessee. Rather the applicant enjoys the title over the minerals extracted from the lease hold area and accordingly appropriates the property in the minerals by way of sale or otherwise - the impugned service received by the Applicant from the State Government merits classification under the head Licensing services for the right to use minerals including its exploration and evaluation at Serial No. 257, Heading 9973, Group 99733. Rate of GST on given services provided by the Government of Uttar Pradesh to applicant for which royalty is being paid - HELD THAT:- It may be appreciated that amendment of Entry SI No. 17 (viii) was approved merely to clarify the GST rate applicable to the right to use Intellectual Property and similar products other than IPR which are covered under Group 99733 - On a conjoint reading of the notification no. 27/2018-Central Tax (Rate) dated 31.12.2018, Minutes / Agenda / Proposal/ Discussion of the GST council, we are of the view that amendments have been carried out vide the aforesaid notification to clarify the legislative intent as well as to resolve the unintended interpretations. It is well settled that the legislative intent cannot be defeated by adopting interpretations which is clearly against such interpretations. In view of this, the service received by the applicant from State Government is liable to be taxed @ 18%.

  ---

• 2021 (3) TMI 641
  Levy of penalty - Appellate authority reduced the quantum of penalty - petitioner treated to be the owner of the goods - proper application of mind not made by appeal authority - principles of natural justice - HELD THAT:- In the present case not only the appeal authority has not made any observations to the effect that the assessee had limited his appeal to the alternate ground but the appeal authority has copiously referred to the entire submissions advanced by the petitioner including submissions advanced on the merits of the matter. Yet, it has not dealt with or decided the same. Such a course adopted by the appeal authority is not productive or useful either for the purposes of adjudication made by it or for the purposes of testing the correctness of the adjudication made by such appeal authority, by the higher forum. The grounds of appeal may be voluminous and the arguments elaborate. However, for the purposes of recording reasons, it is the exact nature of the objection or ground raised that must be recorded and noticed as may disclose to the higher forum, the precise application of mind made by the appeal authority. By referring to the entire memo of appeal or a written argument, the appeal authority not only makes it difficult for itself to decide the exact issue raised but also makes it difficult for the higher forum to examine the correctness of the adjudication made by the appeal authority. In the present case, the course adopted by the appeal authority leaves a lot to be desired. The appeal authority appears to have only considered and offered reasons to accept the alternate plea made by the petitioner but it has not made any application of mind to the main plea that there was no infraction of law and the penalty provisions were not attracted. In absence of any discussion on that issue, the order passed by the appeal authority cannot be sustained to that extent and is hereby set aside - the matter is remitted to the appeal authority to pass fresh order. Petition allowed by way of remand.

  ---

• 2021 (3) TMI 640
  Seeking to revise/correct/file afresh declaration in GST Form TRAN-1 to enable it to claim transitional credit of eligible duties - non-refund/adjustment of the unavailed CENVAT Credit existing in the name of the Petitioner - vires of time limit to file Form TRAN-1 specified in Rule 117(1) 1(A) Rule 120A of the Central Goods and Service Tax Rules, 2017 - vires of due date contemplated under the Rule 117 of the CGST Rules to claim the transitional credit within a specified period of time being procedural in nature - refund/carry forward the unavailed CENVAT Credit in the Electronic Ledger maintained by the Petitioner. HELD THAT:- On the introduction of GST regime, Government granted opportunity to registered persons to carry forward unutilized credit of duties/taxes paid under different erstwhile taxing statues. GST is an electronic based tax regime and most of people of India are not well conversant with electronic mechanism. Most of us are not able to load simple forms electronically whereas there were a number of steps and columns in TRAN-1 forms thus possibility of mistake cannot be ruled out. Various reasons assigned by Petitioners seem to be plausible and we find ourselves in consonance with the argument of Petitioners that unutilized credit arising on account of duty/tax paid under erstwhile Acts is vested right which cannot be taken away on procedural or technical grounds. The Respondent authorities were having complete record of already registered persons and at present they are free to verify fact and figures of any Petitioner thus inspite of being aware of complete facts and figures, the Respondent cannot deprive Petitioners from their valuable right of credit. The issue is no more res integra as the delay and all other aspects have been dealt with by the Hon ble Courts one after another, and the propositions of permission to make the necessary amendments in light of the new regime of GST have been affirmed upto the Hon ble Supreme Court in ADFERT TECHNOLOGIES PVT. LTD. VERSUS UNION OF INDIA AND ORS. [ 2019 (11) TMI 282 - PUNJAB AND HARYANA HIGH COURT ] . This Court grants liberty to the petitioner to make an application before GST Council (through Standing Counsel, who is further requested to hand over the same to the jurisdictional officer) for forwarding the same to the GST Council to issue requisite certificate of recommendation alongwith requisite particulars, evidence and a certified copy of the order instantly and such decision be taken forthwith and if the petitioner s assertion is found to be correct, the GST Council shall issue necessary recommendation to the Commissioner to enable the petitioner to get the benefit of CENVAT credit - Petition allowed.

  ---

• 2021 (3) TMI 639
  Profiteering - Revenue contends that the kind of adjustment, alluded to on behalf of the petitioner, is not contemplated under the provisions of Section 171 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- Till such time the respondents file their return, status quo, as obtaining today, should be maintained for the reason that a coordinate Bench, vide aforementioned order, i.e., order dated 18.02.2020, has taken a similar view, albeit, at the interim stage. It is ordered accordingly. List the matter on 29.04.2021.

  ---

• 2021 (3) TMI 638
  Vires of Rule 44A of the Central Goods and Services Tax Rules, 2017 - It is the case of the petitioners that the said Rule is ultra vires the provisions of the Central Goods and Services Tax Act, 2017 - HELD THAT:- List the captioned mattes on 30.04.2021, albeit, at the end of supplementary board.

  ---

• Income Tax

• 2021 (3) TMI 642
  Addition u/s.36(i)(ii) - Commission paid to directors - whether in the nature of Dividend - rule of consistency - payment to Directors/shareholders was hit by the provisions of section 36(1)(ii) as the said commission would have been payable to the Directors as dividend and accordingly, disallowed the same - Bogus purchases - Disallowance of insurance expense - Allowable revenue expenditure - HELD THAT:- There is a delay of 452 days in filing this Special Leave Petition and we do not find any justifiable reason to condone this huge delay. The Special Leave Petition is, accordingly, dismissed on the ground of delay.

  ---

• 2021 (3) TMI 636
  Exemption u/s 11 - eligibility of registration under section 12-AA and approval under section 80 G - as per revenue no activities were started by the Trust? - HELD THAT:- As relying on M/S. ANANDA SOCIAL AND EDUCATIONAL TRUST VERSUS THE COMMISSIONER OF INCOME TAX ANOTHER [ 2020 (2) TMI 1293 - SUPREME COURT] term activities in the provision includes proposed activities . That is to say, a Commissioner is bound to consider whether the objects of the Trust are genuinely charitable in nature and whether the activities which the Trust proposed to carry on are genuine in the sense that they are in line with the objects of the Trust. In contrast, the position would be different where the Commissioner proposes to cancel the registration of a Trust under sub-section (3) of section 12AA of the Act. There the Commissioner would be bound to record the finding that an activity or activities actually carried on by the Trust are not genuine being not in accordance with the objects of the Trust. Similarly, the situation would be different where the trust has before applying for registration found to have undertaken activities contrary to the objects of the Trust - Decided in favour of assessee.

  ---

• 2021 (3) TMI 634
  Late fee levied u/s 234E - delay in furnishing the tax deducted at source statement - intimation u/s 200A - scope of amendment to section 200A - HELD THAT:- Admittedly, the levy of late fees under section 234E has been exercised under section 200A for period prior to 01/06/2015. We note that the amendment to section 200A of the Act came into effect from 01/06/2015 and is held to be prospective in nature and therefore no computation of fee for the demand or intimation for fee under section 234 E could be made for late deposit of TDS for the assessment years prior to 01/06/2015. This view is supported by the decision of Hon ble Karnataka High Court in case of Fatheraj Singhvi [ 2016 (9) TMI 964 - KARNATAKA HIGH COURT ]. Late fee under section 234B cannot be levied for a period up to 01/06/2015. In the present years under consideration, interest u/s 234B is not leviable for asst. year 2013-14 2014-15. However for asst. year 2015-16 the amended provisions would be applicable. In respect of asst. year 2015-16, no interest would be chargeable for the first quarter. We therefore direct Ld.AO to delete the addition made under section 234B of the Act in the hands of assessee for the relevant assessment years under consideration. - Decided in favour of assessee.

  ---

• 2021 (3) TMI 632
  Estimation of income - Bogus purchases - HELD THAT:- Nature of business of the assessee and the nature of investigation done by the AO and thereafter, held that disallowance be kept at 6.75% (being gross profit rate) of transactions covered by accommodation entries. CIT(A) has taken note of the fact that the AO has not issued notice u/s 133(6) to the said parties to verify the genuineness of purchases. We agree with the above findings of the Ld. CIT(A) and affirm his order. Again considering the facts and circumstances of the case for AY 2010-11, the Ld. CIT(A) has restricted the disallowance to 8.25% (being a rate higher than gross profit rate on account of fact that deficiency is reasonably proved by the Assessing Officer) of transactions covered by accommodation entries. For AY 2011-12, the Ld. CIT(A) has followed the rate applied for AY 2009-10 i.e. 6.75% of value of accommodation entries found to be bogus on the ground that the facts for AY 2011-12 are similar to AY 2009-10.

  ---

• 2021 (3) TMI 624
  Disallowance u/s. 14A r.w Rule 8D(2)(i) and 8D(2)(ii) - AO held that he was not satisfied with the explanation given by the assessee and was not satisfied with the correctness of the claim made by the assessee - HELD THAT:- AO stated that direct expenditure relatable to earning of exempt income as per appendix 4(b) of the Tax Audit Report is Rs. 1,60,950/-. This quantum of disallowance was challenged by the assessee under Rule 8D(2)(i) of the I.T Rules. Smt. Priyanka Salapuria, Ld. Counsel for the assessee has submitted that the Ld. AO made this disallowance without any calculation and without any basis. On an examination of facts, we find that the Ld. AO made the disallowance, based on Tax Audit Report. Thus, we uphold the order of the Ld. CIT(A) on this issue and dismiss ground no. 2(a) of assessee s appeal. Net interest expenditure should be considered while calculating the disallowance made under Rule 8D(2)(ii) of the I.T Rules, 1962 - Assessee has not submitted any calculation or other information in support of this ground. The Ld. AO at page-3 held that interest on borrowing obtained for specific purposes is deleted from the total interest expenses of the assessee and only the balance is disallowed under Rule 8D(2)(ii). In the absence of any cogent material filed by the assessee, we uphold the order of the Ld. CIT(A) on this issue and dismiss ground no. 2(b) of assessee s appeal. Disallowance u/s 43B on Leave Encashment - HELD THAT:- Ground of assessee s appeal has to be rejected as this issue has been adjudicated by the Hon ble Supreme Court against the assessee in the case of Exide Industries Ltd Vs. U.O.I [ 2020 (4) TMI 792 - SUPREME COURT] . Respectfully following the same, we dismiss this ground (3a) of assessee s appeal.

  ---

• 2021 (3) TMI 623
  Set-off of carried forward business losses against short term capital gain raised by selling of capital assets which were not converted into stock-in-trade and computed as per section 50C in view of provisions of section 72 - HELD THAT:- Following the precedents HICKSON DADAJEE PVT. LTD. VERSUS ACIT (5) (1) , MUMBAI [ 2014 (2) TMI 1293 - ITAT MUMBAI] and EVERSHINE PHARMACEUTICALS DISTRIBUTORS PVT. LTD. [ 2012 (8) TMI 1188 - ITAT MUMBAI] CIT(A) held that the ground of appeal is allowed and AO is directed to grant set off of carry forward loss after verification of records. Against this order the Revenue is in appeal before us. We have heard learned Departmental Representative and perused the record. We agree with the finding of learned CIT(A) that the issue is covered in favour of the assessee by the Tribunal decision cited there. Hence, we uphold the order of learned CIT(A). Revenue s appeal is dismissed.

  ---

• 2021 (3) TMI 622
  Disallowance under section 36(1)(iii) - assessee has extended interest free loan to its sister concern on the secured borrowings for which the assessee has debited interest - AO worked out proportionate interest to be disallowed under section 36(1)(iii) - HELD THAT:- AO gone through the orders of authorities below. On perusal of the appellate order, we find that against the transaction of Rs. 2.99 crores, by considering and agreeing the reasoning of the AR of the assessee that the transaction arose out of a family settlement/partition and no such loan was never ever given by the assessee, the ld. CIT(A) decided the issue in favour of the assessee. While doing so, the ld. CIT(A) has not given an opportunity to the Assessing Officer for filing remand report on the materials/ documentation brought on record afresh, which were considered by the ld. CIT(A). Accordingly, we set aside the order of the ld. CIT(A) on this issue and remit the matter back to the file of the Assessing Officer to verify and decide the issue afresh in accordance with law after affording an opportunity of being heard to the assessee. Thus, the ground raised by the Revenue is allowed. Addition being LTCG short reported - Non verifying whether the conditions laid down in Proviso 1 and Proviso 2 to section 50C of the Act were satisfied or not by the assessee - CIT(A) deleted the addition by following various decisions - HELD THAT:- Before us, by way of paper book, the assessee has filed copy of various decisions including the recent judgement in the case of CIT v. Vummudi Amarendran [ 2020 (10) TMI 517 - MADRAS HIGH COURT] wherein held that amendment by insertion of proviso to section 50C(1) of the Act introduced with effect from 01.04.2017 which provides that where date of agreement, fixing amount of consideration and date of registration for transfer of capital assets are not same, value adopted or assessed or assessable by stamp valuation authority on date of agreement may be taken for purpose of computing full value of consideration for such transfer seeks to relieve the assessee from undue hardship and, thus, should be taken to be retrospectively effective. Assessing Officer is directed to examine the issue in line with the above judgement and decide the issue afresh in accordance with law after affording an opportunity of being heard to the assessee. Thus, the ground raised by the Revenue is allowed for statistical purposes.

  ---

• 2021 (3) TMI 621
  Bogus purchases - Addition is solely made upon sales tax department information - HELD THAT:- AO has not bothered to make any enquiry of his own. In this case the sales or any other aspect of the working have not been doubted. It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from honourable jurisdictional High Court decision in the case of Nikunj Eximp Enterprises [ 2014 (7) TMI 559 - BOMBAY HIGH COURT] . In this case the honourable High Court has upheld hundred percent allowance for the purchases said to be bogus when sales are not doubted. Facts of the present case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. In such situation in our considered opinion on the facts and circumstances of the case the disallowance out of the bogus purchases done by the learned CIT(A) meets the end of justice. Accordingly we uphold the order of learned CIT(A). Penalty levied under 271(1)(c) - disallowance of 100% on account of bogus purchases solely on Sales Tax Department information - HELD THAT:- The purchase vouchers were duly produced and the payments were through banking channel. In these backgrounds in our considered opinion assessee cannot be visited with the regours of penalty under section 271(1)(c) of the Act. As a matter of fact on many occasions on similar circumstances in quantum proceedings the disallowance itself has been deleted. Assessee cannot be said to have been guilty of concealment or furnishing of inaccurate particulars of income. In this regard we draw support from the decision of a larger bench of the honourable Supreme Court in the case of Hindustan Steels Ltd. state of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] where in it was held that the authority may no t levy the penalty if the conduct of the assessee is not found to be contumacious. Tax effect in this case is below the limit fixed by CBDT for filing appeals before ITAT. The revenue has tried to make out a case that since the addition was made pursuant to information from sales tax department, this penalty appeal falls in the exception carved out in the CBDT circular regarding appeals arising out of additions made pursuant to information from outside agencies. We are of the opinion that this plea is not tenable inasmuch as once revenue accepts that penalty is levied on outside agency information the penalty levied will have no legs to stand. Revenue appeal dismissed.

  ---

• 2021 (3) TMI 620
  Disallowance u/s 14A - contention of the assessee that, no expenditure has been incurred for earning income, has been rejected by the lower authorities on the ground that some man power must have been required for monitoring financial activity or earning of income relating to dividends as investment - HELD THAT:- The lower authorities have held that even the statutory audit must have also been verified whether the amount of dividend received from the investment/re-investment is accurate/properly accounted for in the assessee s books of accounts and, therefore, some expenditure of the audit also relates to the activity of earning dividend income. Once the Rule 8D of the Rules has been made applicable, the disallowance in terms of Rule 8D(2)(ii) is automatic and there is no option left with the Assessing Officer except to estimate the disallowance as per rules. In view of the detailed findings of the learned CIT(A) on the issue in dispute, we do not find any error in the order of the learned CIT(A). Accordingly, we uphold the same. The ground no. 1 of the appeal is dismissed. Disallowance carry forward of business/unabsorbed depreciation in absence of evidences - HELD THAT:- CIT(A) has noticed that the assessee has already filed rectification application before the Assessing Officer which was pending. We agree with the finding of the learned CIT(A) that when the issue is already pending before the learned Assessing Officer for rectification, it is not appropriate for her to decide on that issue in appellate proceedings. We, accordingly, concur with the findings of the learned CIT(A) on the issue in dispute. The ground no. 2 of the appeal is dismissed.

  ---

• 2021 (3) TMI 619
  Revision u/s 263 - Disallowing 70% of the deduction claimed u/s 80IC - HELD THAT:- The schedule of fixed assets we find that as on 01.04.2011, the cost of plant and machinery and the additions made were to the tune of Rs. 1,85,23,460/- which makes the addition more than 50% and justifying that there was substantial expansion as per the relevant provisions of the Act and section 80IC of the Act which fact is also substantiated by the auditor s report in Form 10CCB wherein the auditors were satisfied that there was substantial expansion as per provisions of the law. Respectfully following the ratio laid down M/S. AARHAM SOFTRONICS [ 2019 (2) TMI 1285 - SUPREME COURT] we set aside the findings of the ld. CIT(A) and direct the Assessing Officer to allow 100% of the deduction claimed u/s 80IC of the Act. - Decided in favour of assessee.

  ---

• 2021 (3) TMI 617
  Principal taxable income of Assessee - Addition on protective basis - amount found from the lockers of the assessee would be considered as the income of the father of the assessee - HELD THAT:- Additions were made in the hands of the assessee on protective basis and in the proceedings of the father namely Dr GG Dhir, where substantive addition was made, the same amount has been held to be an income of the father. Accordingly once the income has been charged in the hands of the father, it cannot be again charged in the hands of the assessees before us. Chargeability of interest u/s 158BFA(1) - delay in filing of the return - interest on the assessee s income pursuant to the block assessment in the hands of the assessee - HELD THAT:- Matter involves the computation of income of the assessee after taking into account the judgment of the Hon ble High Court in the case of the father and effect of the said decision on the chargeability of interest. It is also admitted to the ld. CIT(A) that once the High Court holds the taxability of the impugned addition in the hands of assessee s father, the addition so made in the hands of assessee shall automatically stand deleted. We are also of the opinion that the computation of interest is integrally connected to the computation of income assessed. The primary duty of computation of income and interest thereon lies with the Assessing Officer and, therefore, it would be in the fitness of the facts, the matter pertaining to computation of income and interest is required to be remanded to the file of Assessing Officer. We remand the matter to the file of the Assessing Officer with the direction to comply with the decision of the Hon ble High Court treating the amount recovered from the impugned lockers as the income of Dr GG Dhir and thereafter decide chargeability of the interest on the residual amount after deleting the amount owned by the father. We make it abundantly clear that the date of chargeability of the interest on the residual income would be the date when such amount was due for taxation, in terms of the block assessment order. Appeals of the assessees are allowed for statistical purposes.

  ---

• 2021 (3) TMI 616
  CIT(A) has passed an ex parte order after fixing the appeal on three occasions - non service of notice/mode of service - HELD THAT:- As noted that the Ld. CIT(A) has not said anything regarding service of notice/mode of service, whether it was served or it has returned etc. So, the impugned order of Ld. CIT(A) is bad since Ld. CIT(A) is duty bound to decide the appeal in accordance to section 250(6) of the Act. So, we do not countenance the action of Ld. CIT(A) to have dismissed the appeal ex parte and not on merits, which according to us is per-se in violation of natural justice and without giving proper opportunity of hearing to the assessee. We note that the AO has acknowledged to have served notices on six (6) share subscribers out of eleven (11) and the assessee was not put to notice regarding the non-service of notice to eight (8) parties. However, it has been brought to our notice that all the share subscribers had in fact replied with all the details and supporting documents to the assessee pursuant to sec. 133(6) notice. The replies from share subscribers were late by one (1) day (before the assessment was framed on 21.12.2016). Therefore, we find that in this case the assessee did not get proper opportunity before the AO, therefore, we relying on the decision of Tin Box Company [ 2001 (2) TMI 13 - SUPREME COURT ] set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO for de novo assessment in accordance to law. Appeal of assessee is allowed for statistical purpose.

  ---

• Customs

• 2021 (3) TMI 637
  Fragrant violation of the judicial comity of Courts - Non application of mind while allowing bail - Permission to travel abroad to her home for one year from 06.01.2021 to 05.01.2022 - Sumuggling of Gold - HELD THAT:- It is essential to observe that even if the circumstances after the order dated 31.08.2020 had in any manner been changed, it was always open to the applicant to file the application before the Trial Court seeking permission to travel abroad to seek redressal in accordance with law by either seeking a review of the order dated 31.08.2020 of this Court or filing a fresh petition in relation thereto or assailing the order dated 31.08.2020 of this Court before the Hon ble Supreme Court but in any event there could not have been any concealment of the facts that vide order dated 31.08.2020 in CRL.M.C.1529/2020, the prayer made by Begaim Akynova, holder of Khazakistan passport no.8622501 i.e. the applicant herein in relation to the very same complaint case qua which the allegations had been made against Begaim Akynova and the co-accused in relation to their apprehension on 13.09.2019 at the IGI Airport, New Delhi, with a recovery of 1875 gms of gold from Begaim Akynova holder of Khazakistan passport no.8622501 had been considered and the same was declined. Whilst setting aside the impugned order dated 06.01.2021 of the learned CMM, PHC, New Delhi vide which permission was granted to the respondent herein to travel abroad, which order is hereby set aside in toto, it is essential to observe that most unfortunately there is even a representation for the Department i.e. Department of Customs also on the date 06.01.2021 before the learned Trial Court via counsel Mr.Vishal Chadha, who the learned SPP for the Department of Customs, Mr.Satish Aggarwala present today submits is one of the counsel representing the Customs Department before the District Courts. Information be sent to the Chairman, Bar Council of India of the proceedings of the present matter which be sent through the Registrar General of this Court in relation to the manner of which the proceedings in relation to the application filed by Begaim Akynova have been conducted both by the learned counsel for Department of Customs as well as by the learned counsel for the applicant Begaim Akynova i.e. respondent to the present petition - Furthermore, the learned Trial Court seized of the proceedings on the date 06.01.2021 i.e. the learned CMM, New Delhi, has apparently not chosen to inquire as to what was the fate of the prayer made by the applicant before the learned Trial Court in proceedings before the High Court under Section 482 of the Cr.P.C., 1973 vide order dated 31.08.2020 despite the applicant thereof having mentioned therein that the High Court of Delhi had allowed the co-accused Aida Askerbkova to travel abroad to her home. That the learned Trial Court did not even choose to ascertain the status of the proceedings dated 31.08.2020 in relation to any orders that could or may have been passed and had in fact been passed in the instant case in CRL.M.C.1529/2020 whereby the prayer made by Begaim Akynova to travel abroad had been expressly declined vide paragraph 24 thereof, also cannot be overlooked. The matter be also placed before the Inspecting Committee of Judges of this Court qua the learned Trial Court in relation to the virtual non application of mind in the instant case and disregard to the hierarchy of Courts - Petition disposed off.

  ---

• Corporate Laws

• 2021 (3) TMI 618
  Demand of Return of deposits with interest - allegation is that neither interest is paid to the depositors nor returned the deposits and that the entire money collected by way of deposits have been siphoned off - HELD THAT:- It appears from the record that this Company Petition is filed under Section 237 read with Section 247 of the Companies Act 1956, by the Petitioners to declare the affairs of the Respondent Company ought to be investigated by an inspector appointed by the Central Government. The Learned counsel appearing for the petitioners submitted that the depositors deposited huge sum of money with Kakkazham -Neerkunnam Union of SNDP Yogam. The Kakkazham -Neerkunnam Union of SNDP Yogam neither repaid the interest nor returned the deposit to the depositors. Aggrieved by the act of the Yogam the Petitioner filed this Petition before the High Court of Kerala. The entire money collected by way of deposits have been siphoned off. The depositors approached before Sub Court and Munsiff Court, Alappuzha for recovery of money and they have obtained money decrees against the SNDP Sakha Yogam Branch No.363. The total amount due under the decrees come to Rs. 5,56,81,066/. The 131 decree holders formed an organisation named as Nikshepaka Samrakshana Samithy and obtained registration as A 391. The samithy authorised with Power of Attorney to Sri. Unnikrishnan Nair, for the purpose of realising the decree amount from the SNDP authorities. The assets of the Shaka will have to be first liquidated in a purposeful manner so as to obtain maximum resource to facilitate settlement of the various creditors, which effort will also have to be fortified by effective steps to recover money from its debtors. The affairs of the Respondent Company ought to be investigated by an Inspector appointed by the Central Government. Petition disposed off.

  ---

• Insolvency & Bankruptcy

• 2021 (3) TMI 633
  Seeking Liquidation of Corporate Debtor - no Resolution Plan has been approved by the Committee of Creditors (CoC) before the maximum period permitted for the Corporate Insolvency Resolution Process (CIRP) under Section 12 of IBC - HELD THAT:- The Appellate Tribunal has to perforce consider the relief sought by the Appellant-Resolution Professional approved by the CoC for setting aside the impugned order and initiation of Liquidation Process. The Adjudicating Authority has failed to implement the order of the Appellate Tribunal dated 18.11.2019. It is settled law that whatever power vests in the Adjudicating Authority is always available to Appellate Authority. It is in the fitness of situation to allow the appeal and set aside the impugned order - Corporate Debtor- M/s.K.S.Oils Ltd shall liquidate in the manner as laid down in Chapter-III of the Code - moratorium shall cease to have effect - Application allowed.

  ---

• 2021 (3) TMI 631
  Condonation of delay of 193 days in filing appeal - sufficient cause for delay present or not - application for Review before NCLT - Jurisdiction of NCLT to decide on the issue - Doctrine of Merger - Balance of Convenience - HELD THAT:- Section 61 of the Insolvency Bankruptcy Code enjoins that an Appeal shall be filed within 30 days before the National Company Law Appellate Tribunal and a further period of 15 days is provided only if sufficient cause is made out for preferring the Appeal within the extended period. Furthermore, the aspect of Consolidated Appeal does not arise in any event, the application for condonation of delay , is liable to be dismissed, of course with costs. One cannot ignore a prime fact that the term sufficient cause implies no negligence, nor inaction nor want of bonafides on the part of the litigant. In fact, in excluding the time, the period starting from the institution of former proceeding till the end of the said proceeding, would be calculated. If a litigant was bonafide prosecuting his rights in a Court / Tribunal due to wrong advise, the limitation shall remain in limbo , which is the underlying Principle of Section 14 of the Limitation Act, 1963 - The essence of sufficient cause is whether it was an act of prudence or reasonable man on the part of person filing an Appeal . It is to be taken note of that whether the Appellant had acted with reasonable diligence in prosecuting his Appeal . Although an Appeal is filed after the expiry of 30 days, if the Tribunal is satisfied that there was sufficient cause in not filing an Appeal , but such period had not exceeded 15 days, this Tribunal bearing in mind that an axiomatic principle in law that if a party/litigant was involved in a Bonafide Litigious Activity , then, the said time spent in such litigation can be excluded, because of the fact that the said party had acted with reasonable diligence in prosecuting his Appeal - in the present case, the action of the Petitioner/Appellant in moving the Hon ble Supreme Court of India in Civil Appeal No.3169 of 2019 after the Impugned Order dated 25.6.2019 passed by the Adjudicating Authority , instead of preferring an Appeal before this Tribunal and later filing of the Review Proceeding before the Adjudicating Authority , pursuant to the liberty granted by the Hon ble Supreme Court as per order dated 29.7.2019 are bonafide, of course based on act of prudence or reasonable person in prosecuting the concerned proceeding with reasonable due diligence. The time spent in prosecuting the legal remedy by the Petitioner/Appellant/Bank is required to be excluded while computing the period of limitation as envisaged under section 61(2) of the Insolvency Bankruptcy Code, 2016 - this Tribunal by adopting a practical, purposeful, meaningful, a rational approach and by taking a pragmatic view of the matter in a lenient and liberal manner condones the delay of 193 days in furtherance of substantial cause of justice. Application allowed.

  ---

• 2021 (3) TMI 629
  Seeking approval of Resolution Plan - non-compliant as regard the mandate of Section 30(2) of the Code, 2016 - HELD THAT:- Section 61(1) authorizes any person aggrieved by the order of Adjudicating Authority under this part can prefer an appeal before the Appellate Tribunal - The part here refers to Part -II of the Code which comprises CIRP and Liquidation Process. Here what we observed that any person aggrieved comprises of stakeholders in the process of CIRP and Liquidation Process. The Appellant is stranger to the CIRP till 11th June, 2020. On 12.06.2020 the Appellant for the first time expressed its interest to submit a Resolution Plan for the Asian Colours Coated Ispat Ltd, this email was marked to all CoC members. No financial proposal was provided in the said letter. RP issued Form G initially on 01.10.2018, revised on 14th December 2018. EoI was received from 12 Resolution Applicants, out of which 11 were found eligible. Last date for receipt of Resolution plan was 08th March 2019. Only one resolution plan was received from successful Resolution Applicant, whereas Appellant has asked for EOI on 12th June 2020 when application seeking approval of Resolution Plan was already filed by RP on 10th July, 2019 under section 31 of Code after Committee of Creditors (CoC) Approval on 28th June 2019 with 79.3% voting share. All this reflect that Appellant wanted to enter fray nearly one year after CoC approval of Resolution Plan; it neither qualifies as Resolution Applicant nor as prospective Resolution Applicant or successful or unsuccessful Resolution Applicant and hence cannot be termed as aggrieved party. Appellant may be termed as an outsider standing on the sidelines. Corporate Insolvency Resolution Process is time bound, value maximization has also to be in time-bound manner. Thus, Appellant is neither an aggrieved party in the process of CIRP nor he has a locus standi to file the appeal. Appeal is held to be not maintainable and Appellant has no locus to maintain it - appeal dismissed.

  ---

• 2021 (3) TMI 628
  Seeking directions from this tribunal in discharging his duties (Resolution Professional) in Corporate Insolvency Resolution Process (CIRP) of Independent TV Limited. - Section 19(2) (3) and Section 60(5) of IBC - HELD THAT:- This Bench is of the considered view that there is a clear case of negligence and lapse on the part of Respondent No.4 Bank in observing normal banking prudence in this case and the Bench hereby orders that Respondent No.4 Bank will immediately make good of Rs. 44,90,000/- withdrawn from the Bank Account of the Corporate Debtor by the persons who were not authorized to sign on behalf of the Company on the date allowing the transactions from the Bank Account of the Corporate Debtor. The plea of the Respondent No.4 Bank that a meager amount of Rs. 561.11/- was standing to the credit of the Corporate Debtor as on the date of initiation of Corporate Insolvency Resolution Process is not tenable as during course of Corporate Insolvency Resolution Process, there are going to be deposits and payments from the Bank Account of the Corporate Debtor in the normal course of the business, wherein the monies will be credited to bank account of the Corporate Debtor in normal course of business, and debit entries can be effected by the Bank on the instructions received from the Authorized signatory of the bank account only. The order of this Court is to be complied within 15 days by the Respondent No.4 Bank. However, since a fraud has been committed against the Respondent No.4 Bank, the Respondent No.4 Bank is free to initiate Criminal/Civil actions against the other Respondents and/or against any other persons involved in committing fraud against the Respondent No.4 Bank. The compliance be reported by the Respondent No.4 Bank by way of an affidavit to this bench.

  ---

• 2021 (3) TMI 626
  Constitutional validity of Sections 35- AA and 35-AB of the Banking Regulations Act, 1949 - Liability in the case of Contract of Guarantee - who is responsible, principal or the borrower - Financial Debt - initiation of CIRP - HELD THAT:- Reserve Bank of India has powers to issue certain directions to certain banks and Banking companies so as to see that there is proper recovery of public money or for any other such purpose. As a matter of fact, Section 3(11) definition of Insolvency Bankruptcy Code, deals with debt meaning a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt - Any sum which is due and payable by the borrower/Corporate Debtor to the Bank is a Financial Debt within the meaning of Section 5(8) of the Code. The CIRP is to be initiated when a default is made in regard to the payment of Debt by the Corporate Debtor . In Law, a Creditor is not to be restrained from filing such application in accordance with Law . The trigger for initiating Insolvency Process is the occurrence of default by the Debtor . In the case on hand resting upon the Gazette Notification of the Ministry of Finance dated 05.05.2017 whereby the Central Government had authorized the Reserve Bank of India to issue such directions to any banking company or banking companies which may be considered necessary to initiate insolvency resolution process in respect of default under the provisions of the Insolvency and Bankruptcy Code, 2016, the Reserve Bank of India had issued a letter dated 28.08.2017 (Annexure A- 7, Page 156 of Volume I of the Paper Book), whereby the Respondent/Company s name was shown at Sl No 20 in the List of Accounts of the Appellant /State Bank of India. Indeed, based on the recommendations of internal advisory committee (IAC) constituted pursuant to the Banking Regulation (Amendment) Ordinance, 2017 12 accounts were identified for immediate reference for resolution under the I B Code etc. Thus, by no stretch of imagination it can be said that there was no issuance of authorization by the Central Government to the Reserve Bank of India for issuance of such direction(s) to any banking company to initiate insolvency resolution process in respect of default under the I B Code and added further, the Reserve Bank of India through letter dated 28.08.2017 issued a specific list of accounts wherein the Respondent s name admitted. This Tribunal bearing in mind that it has allowed Comp. App. (AT) (Ins) No. 294/2020, the Comp. App(AT)(Ins) No. 295/ 2020 has become an Otiose one, because of the fact as a concomitant effect, the 2nd order dated 10.01.2020 passed by the Adjudicating Authority becomes a nugatory one in the eye of Law and accordingly stands disposed of - Application disposed off.

  ---

• Service Tax

• 2021 (3) TMI 630
  CENVAT credit - input services - Dredging Services - Marine Consultancy Services provided by the service provider for smooth navigation of the vessels at private jetty which is used by the appellant - denial on the ground that the place where this service is provided does not belong to the appellant and, it was used by the other jetty owners also - HELD THAT:- There is absolutely no dispute that the appellant themselves are the service recipient. They borne the service charges along with service tax paid by the service provider. The service was availed for smooth navigation of vessels at the private jetty. Therefore the service was indeed received by the appellant and the same was used for their business purpose. The expenses of the service was also borne by the appellant which was not in dispute rather they have submitted an affidavit of the service provider that the entire service charge was paid by the appellant and no any amount was recovered from any other private jetty owner. It is immaterial that where is the location of the service was provided. It is important to see that irrespective of such services have been provided anywhere but it is for the purpose of the assessee and it is received by the assessee. If that test is qualified then it cannot be said that the service was not received by the assessee. Thus the appellant is entitled to Cenvat credit. Reliance also placed in the case of M/S. SANGHI INDUSTRIES LTD AND OTHERS VERSUS C.C.E. S.T., RAJKOT AND OTHERS [ 2019 (12) TMI 528 - CESTAT AHMEDABAD] where it was held that credit of the dredging service provided at the private jetty has been allowed. There is no reason to deny Cenvat credit in respect of Dredging and Marine Consultancy Service - Appeal allowed - decided in favor of appellant.

  ---

• 2021 (3) TMI 615
  Non-payment of service tax - recovery of certain amount from the employees who opted termination of employment or resignation from service before serving the notice period prescribed under the contract of employment - violation of Section 66E(e) of Finance Act, 1994 - HELD THAT:- The issue of levy of service tax on the amount received by the employer from the employee in lieu of notice period on termination of employment is no more res integra and covered by the judgment of the Madras High Court in GE T and D India Ltd s case [ 2020 (1) TMI 1096 - MADRAS HIGH COURT ] where it was held that Though normally, a contract of employment qua an employer and employee has to be read as a whole, there are situations within a contract that constitute rendition of service such as breach of a stipulation of noncompete. Notice pay, in lieu of sudden termination however, does not give rise to the rendition of service either by the employer or the employee. There are no merit in the order passed by the Learned Commissioner (Appeals) - appeal allowed - decided in favor of appellant.

  ---

• 2021 (3) TMI 614
  Valuation - inclusion in taxable services or not - expense incurred by the agents, namely, travel, conveyance and vehicle running expenses, training expenses, printing and stationary, and business development/marketing and sales promotion expenses - adjustment of service tax amount initially paid by the appellant under rule 2(1)(d)(iii) of Service Tax Rules, 1994 with the commission paid to the agents to be deposited under Section 73A(2) of the Finance Act, 1994. Whether the expense incurred by the agents, namely, travel, conveyance and vehicle running expenses, training expenses, printing and stationary, and business development/marketing and sales promotion expenses are to be part of the gross taxable value in discharging service tax by the appellant? - HELD THAT:- The expenses incurred by the insurance agents are proposed to be included and under Rule 5(1) of the Service Tax (Determination of Value) Rules, 2006 which was in force during the relevant time. The said Rule 5(1) has been struck down by the Hon ble Delhi High Court as ultra vires to Section 66 and 67 of Finance Act, 1994 and the said judgement has been upheld by the Hon ble Supreme Court in Intercontinental Consultants and Technocrats Pvt Ltd case [ 2018 (3) TMI 357 - SUPREME COURT ] - thus confirmation of demand by the adjudicating authority by including the reimbursable expenses in the gross taxable value cannot be sustained. Whether the service tax amount initially paid by the appellant under rule 2(1)(d)(iii) of Service Tax Rules, 1994 and later adjusted with the commission paid to the agents to be deposited under Section 73A(2) of the Finance Act, 1994? - HELD THAT:- The issue has been addressed at length by this Tribunal in Bajaj Allianz Life Insurance Company Ltd [ 2019 (6) TMI 104 - CESTAT MUMBAI ] where this Tribunal held that The service tax initially paid by the Appellants and later collected from the insurance agents by adjusting the commission paid, cannot be directed to be deposited under Section 73A(2) of Finance Act, 1994. Appeal allowed - decided in favor of appellant.

  ---

• Central Excise

• 2021 (3) TMI 627
  CENVAT Credit - input services - Air Civil Enclave Services - Authorized Service Station Service - Mandap Keeper Service - Outdoor Caterer Service - Rent-a-Cab Operator s Service - Tour Operator Service - Travel Agent Service - Renting of Immovable Service - Convention Service - Company Secretary Service - Steamer Agent Service - Telecommunication Service - credit denied mainly on the ground that the appellant could not establish the nexus between the said services and appellant s manufacturing/business activity - HELD THAT:- As per the use declared by the appellant, all the services were used either in relation to the manufacturing activity of the appellant or in relation to the overall business activity. It is also not disputed that the invoices were issued in the name of the appellant therefore, there is no question of receipt and use of service by any other person except by the appellant. Rent-a-cab service - Tour Operator service - Travel Agent service - HELD THAT:- The said services pertain to hiring of vehicles which are used by its employees for their movement within the Refinery premises or for travelling outside in connection with its business - Travel agent service has been utilized for booking of travel tickets for its employees for their official travel. The services are, therefore, used in or in relation to manufacturing / business activities of the company - reliance can be placed in the case of M/S ADANI PORT SPECIAL ECONOMIC ZONE LTD AND M/S ADANI PETRONET PORT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2015 (12) TMI 1060 - CESTAT AHMEDABAD ] - credit allowed. Renting of Immovable Property - HELD THAT:- These services pertain to service tax paid by the output service provider towards the office premises provided to the company on rent. These office premises are being used for carrying out its business activity viz. procurement, marketing, auditing, accounting etc. - reliance can be placed in the case of M/S. HINDUSTAN COCA-COLA BEVERAGES PVT. LD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-IV [ 2019 (5) TMI 251 - CESTAT CHENNAI ] - credit allowed. Telecommunication Service - HELD THAT:- The mobile phone service is used by employees for carrying out business activities - reliance can be placed in the case of M/S ADANI PORT SPECIAL ECONOMIC ZONE LTD AND M/S ADANI PETRONET PORT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2015 (12) TMI 1060 - CESTAT AHMEDABAD ] - credit allowed. Convention Service - HELD THAT:- The said services were utilized in relation to training of its employees. The input service provider has provided the stay and other facilities for the employees of the company who attended such trainings - reliance can be placed in the case of M/S HINDUSTAN PETROLEUM CORPORATION LTD. VERSUS CCE, C ST, VISAKHAPATNAM [ 2016 (9) TMI 680 - CESTAT HYDERABAD ] - credit allowed. Airport Civil Enclave - HELD THAT:- The said service is received in connection with its private aircraft which is used for travel of employees, consulting engineers, business clients etc. connected with the manufacturing activity and business of the company - reliance can be placed in the case of M/S RELIANCE INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LTU, MUMBAI [ 2016 (8) TMI 123 - CESTAT MUMBAI ] - credit allowed. Authorized service station - HELD THAT:- The said service is used for servicing of company owned vehicles which are used by the employees for their official travel for carrying out their official responsibilities which are in relation to manufacture / business - reliance can be placed in the case of M/S RELIANCE INDUSTRIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE SERVICE TAX, LTU, MUMBAI [ 2016 (8) TMI 123 - CESTAT MUMBAI ] - credit allowed. Company secretary - HELD THAT:- The said service is utilized for fulfilling various statutory obligations of the company such as Secretarial Audit under Clause 47 (c) of the SEBI s listing agreement and certification etc. which are in relation to manufacture / business - reliance can be placed in the case of M/S ADANI PORT SPECIAL ECONOMIC ZONE LTD AND M/S ADANI PETRONET PORT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2015 (12) TMI 1060 - CESTAT AHMEDABAD ] - credit allowed. Outdoor catering - HELD THAT:- The said service pertains to operation of industrial canteens which are located in its Refinery. In terms of the provisions of the Factory Act, it is mandatory for certain factories to provide an industrial canteen within the factory premises - reliance can be placed in the case of M/S ADANI PORT SPECIAL ECONOMIC ZONE LTD AND M/S ADANI PETRONET PORT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2015 (12) TMI 1060 - CESTAT AHMEDABAD ] - credit allowed. Mandap Keeper - HELD THAT:- The said service is rendered by the hotel used by the company for the purpose of conducting interviews for recruitment of employees and for business conferences held with its business associates - reliance can be placed in the case of M/S ADANI PORT SPECIAL ECONOMIC ZONE LTD AND M/S ADANI PETRONET PORT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2015 (12) TMI 1060 - CESTAT AHMEDABAD ] - credit allowed. Steamer agent - HELD THAT:- The said service has been utilized by it in relation to procurement of inputs / inward transportation of inputs or capital goods which is specifically covered by the definition of input service - reliance can be placed in the case of M/S ADANI PORT SPECIAL ECONOMIC ZONE LTD AND M/S ADANI PETRONET PORT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, AHMEDABAD [ 2015 (12) TMI 1060 - CESTAT AHMEDABAD ] - credit allowed. The appellant is entitle for the Cenvat Credit - However, in respect of same services some of the invoices were not produced by the appellant which needs to be verified. Therefore, in such cases the matter needs to be remitted back to the Adjudicating Authority - Appeal allowed by way of remand.

  ---

• 2021 (3) TMI 625
  Seeking appropriation of refund due to it in respect of one of its units against the demand in respect of its another unit - provisional assessment - the appellant had stated that before finalization of their balance-sheet and differential ED, they had made the following advance payments towards the expected differential duty - HELD THAT:- Undisputedly, the appellant s request for appropriation was made vide its request letter dated 09.10.2017. There is also a communication from the Deputy Commissioner, Poonamallee Divison that no refund claim was filed. Taking note of the above and considering the change in law with the introduction of C.G.S.T., the Commissioner (Appeals), Nagpur, while considering refund/adjustment claim of Butibori Unit out of excess duty available with Poonamallee Unit, has allowed the appropriation/adjustment of differential duty to be paid by the appellant s Butibori Unit against the excess amount of the appellant s Poonamallee Unit. It is to be noted that since the appellant unit (Butibori) was under LTU, had there been no implementation of C.G.S.T. Act, 2017, then the appellant could have normally adjusted the differential Central Excise Duty in LTU. In fact, though this was brought to the notice of the First Appellate Authority, here in the case on hand, in the impugned order, the same has been ignored for the reasons best known to the First Appellate Authority. It is not the case of the Revenue that the above order is a subject matter of appeal or has been reversed by higher fora. Admittedly, the excess duty paid by the appellant that has remained with the Revenue, has to be refunded to the appellant by following the due process of law as prescribed in the statute. Matter remanded back to the file of the Adjudicating Authority to look into the refund due, as calculated by the appellant, and then appropriate/adjust excess duty of the Poonamallee Unit, if any, available thereafter towards duty and interest liability of the unit in appeal here, in terms with the findings and discussions of the Learned Commissioner (Appeals), Nagpur, to avoid inconsistency.

  ---

• CST, VAT & Sales Tax

• 2021 (3) TMI 635
  Input Tax Credit - Audit Report submitted in Form VAT 240 even though such claims were not made while submitting monthly returns - appellant s grievance is that the Commissioner of Commercial Taxes has wrongly denied the input tax credit based upon the information available in Form No.240 by placing reliance upon the judgment delivered by this Court in the case of Centum Industries Ltd. [ 2015 (10) TMI 47 - KARNATAKA HIGH COURT ] - HELD THAT:- By no stretch of imagination it can be said that merely because the dealer has submitted audited statement of accounts in Form VAT 240 he is entitled for input tax credit. It is pertinent to note that Form VAT 240 is only the audited statement of accounts issued by the Chartered Accountant/Cost Accountant/Tax Practitioner and it can never be construed as returns to compute the net tax liability under Section 10(3) as rightly held by the learned singe Judge. The substantive provision of the KVAT Act i.e., Section 10(3) has to be read harmoniously with the procedural provision of filing of the returns under Section 35 of the KVAT Act. The learned Single Judge was therefore justified in holding that filing of returns within the time prescribed under Section 35 of the KVAT Act is mandatory and based upon the returns filed by a dealer the tax liability is determined after deducting the input tax from output tax. Form VAT 240 can never be treated to be returns in any manner. The learned Single Judge was justified in dismissing the writ petitions as the appellant was claiming input tax credit based upon Form VAT 240 and by no stretch of imagination Form VAT 240 can be treated as a returns for the purposes of claiming input tax credit, especially in the light of the fact that filing of returns to compute the net tax liability has to take place keeping in view Section 10(3) and 10(4) of the KVAT Act. Appeal dismissed - decided against appellant.

  ---