TMI Tax Updates - e-Newsletter
March 22, 2018

Case Laws in this Newsletter:

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

TMI SMS

• CENVAT credit - prior to amendment w.e.f. 1.4.2008 - tax paid on GTA from the place of removal upto the first point, has to be allowed - SC

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• Commercial coaching or training - Certificates or degrees awarded by IIPM not recognized by AICTE or UGC - levy of Service tax confirmed.

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News

• Shri P.P. Chaudhary calls for multi-polar world, says India is ready to take its well-deserved place with leading nations of the world

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• RBI Reference Rate for US $

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Notifications

Customs

• 12/2018 - dated 20-3-2018 - ADD
  Seeks to impose anti-dumping duty on imports of 'Dimethylacetamide' originating in or exported from China PR and Turkey

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• 11/2018 - dated 20-3-2018 - ADD
  Seeks to order for provisional assessment in the matter of initiation of New Shipper Review under Rule 22 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping duty on dumped articles and for determination of injury) Rules, 1995, for determination of individual dumping margin for exports by M/s. Kuitun Jinjiang Chemical Industries Co. Ltd (Producer) through Foshan Kaisino Building Material Co. Ltd. (Exporter) in the case of anti-dumping duty imposed on imports of 'Melamine' originating in or exported from China PR.

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• 10/2018 - dated 20-3-2018 - ADD
  Seeks to amend notification No. 11/2014-Customs (ADD) dated the 11th March, 2014

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• 31/2018 - dated 20-3-2018 - Cus
  seeks to amend notification No. 50/2017-Customs, dated 30.06.2017

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• 30/2018 - dated 20-3-2018 - Cus
  seeks to amend notification No. 27/2011-Customs, dated the 1st March, 2011, so as to reduce export duty on raw sugar, white or refined sugar from 20% to Nil

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• 22/2018 - dated 20-3-2018 - Cus (NT)
  Amendments in the First Schedule to the Customs Tariff Act, 1975

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DGFT

• 53/2015-2020 - dated 21-3-2018 - FTP
  Amendment in import policy and policy condition of pepper classified under Chapter 09 of ITC (HS), 2017-Schedule-1(1mport Policy)

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GST - States

• ERTS(T) 65/2017/Pt/244 - dated 31-1-2018 - Meghalaya SGST
  Assigns the proper offioers in relation to the various Sections.

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• ERTS(T) 65/2017/Pt/222-009/2018 - dated 25-1-2018 - Meghalaya SGST
  Amendments in the Notification of the Government of Meghalaya No. ERTS(T)65/2017/45, dated the 15th November, 2017.

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• ERTS(T) 65/2017/Pt/221-008/2018 - dated 25-1-2018 - Meghalaya SGST
  Exempts the state tax on intra-state supplies of goods Old and used, petrol Liquefied petroleum gases (LPG).

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• ERTS(T) 65/2017/Pt/220-007/2018 - dated 25-1-2018 - Meghalaya SGST
  Amendments in the notification No. ERTS(T)65/2017/2, dated the 29th June, 2017.

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• ERTS(T) 65/2017/Pt/219-006/2018 - dated 25-1-2018 - Meghalaya SGST
  Amendments in the Notification No. ERTS(T)65/2017/1, dated the 29th June, 2017.

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• ERTS(T) 65/2017/Pt/218-005/2018 - dated 25-1-2018 - Meghalaya SGST
  Exemption of Central Government's share of Profit Petroleum from Central tax

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• ERTS(T) 65/2017/Pt/217-004/2018 - dated 25-1-2018 - Meghalaya SGST
  Notifies the following classes of registered persons who supply development rights to a developer, builder, construction company or any other registered person against consideration, wholly or partly, in the form of construction service of complex, building or civil structure.

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• ERTS(T) 65/2017/Pt/216-003/2018 - dated 25-1-2018 - Meghalaya SGST
  Amendments in the Notification No. ERTS(T) 65/2017/13, dated the 29th June, 2017.

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• ERTS(T) 65/2017/Pt/215-002/2018 - dated 25-1-2018 - Meghalaya SGST
  Amendments in the Notification No. ERTS(T) 65/2017/12, dated the 29th June, 2017.

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• ERTS(T) 65/2017/Pt/214-001/2018 - dated 25-1-2018 - Meghalaya SGST
  Amendments in the Notification No. ERTS(T) 65/2017/11, dated the 29th June, 2017.

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• FIN/REV-3/GST/1/08(Pt-1)/049 - dated 25-1-2018 - Nagaland SGST
  Amendment of notification No. 53 dated 26th Oct, 2017 for notifying e-way bill website.

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• FIN/REV-3/GST/1/08(Pt-1)/048 - dated 25-1-2018 - Nagaland SGST
  State Government hereby Notifies Common Goods and Services Tax Electronic Portal.

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• FIN/REV-3/GST/1/08(Pt-1)/047 - dated 25-1-2018 - Nagaland SGST
  Reduction of late fee in case of delayed filing of FORM GSTR-6

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• FIN/REV-3/GST/1/08(Pt-1)/046 - dated 25-1-2018 - Nagaland SGST
  Reduction of late fee in case of delayed filing of FORM GSTR-5A.

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• FIN/REV-3/GST/1/08(Pt-1)/045 - dated 25-1-2018 - Nagaland SGST
  Reduction of late fee in case of delayed filing of FORM GSTR-5

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• FIN/REV-3/GST/1/08(Pt-1)/044 - dated 25-1-2018 - Nagaland SGST
  Reduction of late fee in case of delayed filing of FORM GSTR-1.

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• FIN/REV-3/GST/1/08(Pt-1)/042 - dated 25-1-2018 - Nagaland SGST
  Amendment in Notification No F.NO.FIN/REV3/GST(Pt-1) F.NO.FIN/REV3/GST(Pt-1)/100, 28th Nov,2017.

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• FIN/REV-3/GST/1/08(Pt-1)/041 - dated 25-1-2018 - Nagaland SGST
  Amendment in Notification No F.NO.FIN/REV3/GST(Pt-1) “D” dated 30th June, 2017.

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• FIN/REV-3/GST/1/08(Pt-1)/040 - dated 25-1-2018 - Nagaland SGST
  Amendments in the Notification No. F.NO.FIN/REV-3/GST/1/08 (Pt-1)'E', dated the 30th June, 2017

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• FIN/REV-3/GST/1/08(Pt-1)/039 - dated 25-1-2018 - Nagaland SGST
  Amendment in Notification No F.NO.FIN/REV-3/GST(Pt-1) “D” dated 30th June,2017

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• FIN/REV-3/GST/1/08(Pt-1)/038 - dated 25-1-2018 - Nagaland SGST
  Seeks to exempt State Government's share of Profit Petroleum from State tax.

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• FIN/REV-3/GST/1/08(Pt-1)/037 - dated 25-1-2018 - Nagaland SGST
  Seeks to provide special procedure with respect to payment of tax by registered person supplying service.

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• FIN/REV-3/GST/1/08(Pt-1)/035 - dated 25-1-2018 - Nagaland SGST
  Seeks to amend notification No. FIN/REV-3/GST/1/08(Pt-1)/035 "O" dated 30th June,2017 so as to exempt certain services.

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• FIN/REV-3/GST/1/08(Pt-1)/034 - dated 25-1-2018 - Nagaland SGST
  Seeks to amend notification No N dated 30th June,2017 so as to notify CGST rates of various services.

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Circulars / Instructions / Orders

GST - States

• Trade Notice No. 25/2017 - dated 22-1-2018
  Filling of return under GST.
• Trade Notice No. 24/2017 - dated 26-12-2017
  Issues in respect of maintenance of books of accounts relating to additional place of business by a principal or an auctioneer for the purpose of auction of tea, coffee, rubber etc.
• Trade Notice No. 23/2017 - dated 26-12-2017
  Clarifications on issues regarding treatment of supply by an artiste in various states and supply of goods by artistes from galleries.

Customs

• 43/2018 - dated 19-3-2018
  Subject: EGM related errors – Amendment of No. of container mismatch & container no. mismatch in
• 42/2018 - dated 16-3-2018
  Subject: Constitution of “Environment Protection Unit” At JNCH
• 41/2018 - dated 15-3-2018
  Subject: Compliance of E-Waste (Management) Rules, 2016- reg.
• 40/2018 - dated 14-3-2018
  Subject: Use and removal of DEPB Scrip.
• 39/2018 - dated 14-3-2018
  Subject: IGST Refund Facilitation Camp
• 01/2018 - dated 14-3-2018
  Subject: Special Drive "Exports Refunds fortnight" beginning from 15th March to 29th March 2018- reg.
• 38/2018 - dated 12-3-2018
  Sub: IGST Refund not disbursed due to PFMS error – reg.
• 37/2018 - dated 9-3-2018
  Subject: Submission of Bank Guarantee for the purpose of extension of Warehousing Bonds as per the conditions of Board’s Circular No 21/2016.
• 35/2018 - dated 8-3-2018
  Subject :- Issuance of Form E-13 before LEO for Export Containers in JNCH– reg.

Highlights / Catch Notes

Income Tax

• Accrual of income - sale of additional FSI to the purchaser - The right to the said amount of ₹ 500 per sq ft has not accrued to the assessee and the owner of such amount would be decided by Courts and till such time as the issue is resolved the said amount does not accrue to the assessee - No additions - AT
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• TDS u/s 194C - Non deduction of tds on reimbursement of expenses made to group companies without any markup - In the case of reimbursement of expenses, the expenditure incurred is related to the person who has not made the original payment - No TDS liability - AT
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• Voluntary contributions to the assessee-society qualify as income u/s. 2(24)(iia) of the Act, and is therefore, subject to the provisions of the Act - the assessee is not entitled to exemption u/s. 11 in-as-much as it is admittedly not registered u/s. 12AA - AT
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• Income from sale of shares - The treatment given by the assessee in respect of share transactions by separately offering business income and short term capital gains / long term capital gains does not warrant any disturbance and deserves to be accepted. - AT
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• Disallowance of depreciation on assets acquired and leased back - On a combined reading of Section 2(13) and Section 2(24) the income derived from leasing of the trucks would be business income, or income derived in the course of business, and has been so assessed - claim of depreciation allowed - AT
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• Penalty u/s 271(1)(c) - unexplained cash deposits in bank account - validity of notice - absence of specific charge - this would be in utter violation of the principles of natural justice, such notice being null and void ab initio. - AT
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• The addition confirmed u/s 68 as unexplained credit instead of long term capital gain as claimed by the assessee - however, the source identity and genuineness of the transaction having been established by documentary evidences - Additions deleted - AT
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• Penalty u/s.271(1)(c) - penalty cannot be levied where a bonafide claim of the assessee was rejected by the tax department. - AT
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• Additions made u/s 40(a)(ia) - resident-receiver of amounts, paid tax on such receipts; even when the payer has failed to deduct tax at source - Liability of the assessee u/s 201(1) being treated as an assessee in default confirmed - HC
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• Payment of interest u/s 244A for the delay caused by the assessee for correcting the TDS certificates - review of judgment - the Commissioner of Income Tax had denied the grant of interest on specific grounds which had been indicated in the order itself - HC refused to review the decision
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Customs

• Duty of Customs on import of Chickpeas (garbanzos) including Kabuli chana and Bengal gram (desi chana) - Tariff Rates revised.
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• Classification of semi-finished goods - spectacle lenses - change in classification to 8 digits tariff headings - when the spectacle lenses imported by the appellant were given the benefit of exemption as per the exemption notification No.6/6 dated 1st March, 2006, the said position continued even thereafter and therefore the appellant was entitled to the benefit of this notification even for the period in question - AT
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Service Tax

• Refund of unutilized CENVAT credit - export of services - the proceeds for export of service were not received directly in foreign exchange but the same was routed by the Foreign Service receiver through M/s. Wells Forgo NA, USA through HSBC Bank. Ultimately the amount was received by the appellant in rupees - refund allowed - AT
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• Rent-a-cab - The business undertaken by BMTC is to provide bus facility/transport facility to the citizens of Bangalore city and the main activity is running the buses in the city for the convenience of citizens and not a rent-a-cab scheme operation - demand set aside - AT
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• Valuation - w.e.f. 1.3.2011, the value of taxable service would include the total amount collected by the PCO operator - since it is specifically stated that the said notification shall be effective only from 1.3.2011, the period involved in the present case being prior to 1.3.2011, the demand of differential amount of service tax alleging that entire amount collected by the PCO operator is subject to levy of service tax cannot sustain. - AT
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• Commercial training or coaching services - the certificates and degrees awarded by IIPM and also by IMI, Europe do not enjoy the recognition from AICTE or UGC - there is no scope to exclude “Academic Courses”, conducted by IIPM from the purview of Service tax levy - AT
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• Classification of services - if the services have been provided along with material and the value of material supplied cannot be vivisected, in that circumstance, the appropriate classification of the service shall be Works Contract service - there is no merit in the impugned order demanding service tax from M/s. Xerox under the category of Maintenance and Repair Services/ Business Support Service. - AT
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• Renting of Immovable Property Service - non-payment of service tax - retrospective amendment - The recovery of the service tax on Renting of Immovable Property cannot be affected invoking extended period of limitation - AT
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• Man power recruitment or supply agency services or not - activity of bagging and shipping work executed by the appellant - such lump sum work order can be considered as job work activity - demand set aside - AT
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• The statutory definition of section 65(91a) of the Finance Act, 1994 specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person - AT
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Central Excise

• Reversal of Cenvat Credit - we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. - AT
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• Valuation - physician samples which are distributed free as part of marketing strategy, or as a gift or donation to doctors - the assessment cannot be done under Section 4(1)(a) and the assessment has to be done under Section 4(1)(b). The assessment cannot be done under Section 4A as the said goods are not marked with MRP - AT
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• Cenvat Credit - Input services - Event Management Services - the activity of family day function is related to business activity of the respondent - the respondent is entitled to avail the Cenvat credit of Event Management Services for family day function - AT
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• CENVAT credit - construction service - the amendment carried out w.e.f. 1.4.2011, has no implication in the present case, as the services have been availed and paid for prior to the said date - AT
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• CENVAT credit - Input service - GTA - prior to amendment w.e.f. 1.4.2008 - tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. - SC
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• CENVAT credit - Input service - GTA - from 01.04.2008, with the aforesaid amendment, the CENVAT credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be. - SC
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• Valuation - toilet soaps exclusively to the CSD Canteens, under the Ministry of Defence - requirement to affix MRP - A ‘maximum retail price’ is affixed on the impugned package does not, of itself, render the goods liable to comply with the provisions of the law relating to ‘maximum retail price’ - AT
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• Liability of duty - extended period of limitation - there were conflicting views of different Benches of the Tribunal which came to be decided only with the issue of decision of the Larger Bench. Hence, it will not be fair on the part of the Revenue to take the view that appellant has suppressed the facts in the present case - AT
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VAT

• Sale of property for recovery of sales tax arrears - proper remedy available for the respondent/Department is to approach the Official Liquidator, by way of a Claim Petition, and the respondent/Department is not justified in proceedings against the petitioner, who is a bona fide purchaser, for valuable consideration. - HC
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• Penultimate sale - whether the purchased goods and the exported goods are one and the same for the purpose of claiming penultimate sale exemption u/s 5(3) of the Central Sales Tax Act? - the "same goods" theory has no application, assessee is entitled to exemption u/s 5(3) - HC
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Case Laws:

• GST

• 2018 (3) TMI 1019
  Detention of the goods of the petitioner, along with the vehicle - Section 129 of the Central Goods and Services Tax Act - Held that: - the first respondent directed to complete the adjudication provided for under Section 129, within a week from the date of production of a copy of this judgment - petition disposed off.

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• 2018 (3) TMI 1018
  Detention of goods - sub-section (3) of Section 129 of the Central Goods and Services Tax Act - Held that: - In terms of the interim order passed by this Court on 22.02.2018, this Court directed release of the goods detained against execution of a bond - this writ petition is disposed of directing the second respondent to complete the adjudication provided for under Section 129 of the Act, within one month from the date of receipt of a copy of this judgment.

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• 2018 (3) TMI 1017
  Consideration of representations submitted by the petitioner - Levy of GST - Works Contract, on which VAT was imposed previously - the petitioner/association made representations on 05.07.2017 10.07.2017, 11.07.2017 and 11.09.2017 to the respondents stating that the contract works for which the agreements were executed prior to 01.07.2017 GST cannot be imposed and 2% VAT alone is applicable. Held that: - since the petitioner's representations are pending, it is appropriate for the respondent to respond to the same by giving them a reply. The appropriate person who would be in a position to give reply is that the Commissioner of Commercial Taxes shall give a reply. Because all other authorities are the department of Highways and National Highways etc., who would not be in a position to specifically address the issue pointed out by the petitioner. There will be a direction to the Commissioner of Commercial Taxes to consider the representation given by the petitioner/ association and pass orders on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order.

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• 2018 (3) TMI 1016
  Consideration of representations submitted by the petitioner - Levy of GST - Works Contract, on which VAT was imposed previously - the petitioner/association made representations on 05.07.2017 10.07.2017, 11.07.2017 and 11.09.2017 to the respondents stating that the contract works for which the agreements were executed prior to 01.07.2017 GST cannot be imposed and 2% VAT alone is applicable. Held that: - since the petitioner's representations are pending, it is appropriate for the respondent to respond to the same by giving them a reply. The appropriate person who would be in a position to give reply is that the Commissioner of Commercial Taxes shall give a reply. Because all other authorities are the department of Highways and National Highways etc., who would not be in a position to specifically address the issue pointed out by the petitioner. There will be a direction to the Commissioner of Commercial Taxes to consider the representation given by the petitioner/ association and pass orders on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order.

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• Income Tax

• 2018 (3) TMI 1041
  Treating the receipts from the lease of its hotel - business income OR house property income - Held that:- SLP dismissed. HC order confirmed [2017 (8) TMI 193 - BOMBAY HIGH COURT]. HC has correctly observed that the business was handed over by the respondent assessee to KHIL in the year 1994 and since the assessment year 1995-96 till the assessment year 2005-06, the income from the same was assessed as a business income. The assessment for the year 1995-96 was completed under Section 143(3) of the Income Tax Act. So also, for the assessment year 2003-04 and assessment year 2005-06, the assessment was completed under Section 143(3) of the Income Tax Act. The claim of the assessee of the said income being a business income was accepted. The assessee is not receiving any rent amount but is receiving 1% of the total revenue earned by KHIL and does not get any fix amount as rent. These aspects are considered by the Tribunal. - Decided against revenue.

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• 2018 (3) TMI 1040
  Allowability of expenditure under the head of “Provision of Expenses” - contingent expenses or actual expenses - Held that:- CIT(A) observed that assessee has actually spent ₹ 20,68,120/- in the F.Y.2010-11 as against provision of ₹ 18,00,000/- made in the case of Nova Space. CIT(A) also observed that assessee has actually spent ₹ 66,51,354/-in subsequent years(Rs.38,48,253/- in A.Y. 11-12, ₹ 3,79,886 in A.Y. 2012-13 and ₹ 24,23,215/- in A.Y. 2013-14) out of the total provisions of ₹ 85,00,000/- and ₹ 18,48,646/- was written back and offered for taxation in the Assessment year 2013-14 in the project called “Vaishnavi Project in M/s Divya Development. Balance amount of ₹ 18,48,646/- which was not spent in the case of Divya Development had also been incorporated by the assessee as its income in the A.Y.2013-14. No infirmity in the order of CIT(A) for deleting the addition made on account of provision of expenses. We also found that similar issue has been dealt with by the Tribunal in assessee’s own case for immediately preceding year and decided in favour of the assessee. Invocation of provisions u/s. 40(a)(ia) entire provision so made was not liable for tax deduction at source because the expenditure were below the prescribed limits and were in the nature of purchase of raw materials and in some cases required TDS has been deducted at a different point of time i.e., either at the time of giving advance or at later point of time when the actual payee is identified. Detailed finding of CIT(A) has not been controverted by Department by bringing any positive material on record. No reason to interfere in the order of CIT(A). Purchases from the suspicion suppliers - CIT(A) has deleted the addition so made - Held that:- Considering the observation so made by the AO vis-à-vis, finding so recorded by the CIT(A), we are of the opinion that some disallowance is required to be made. Accordingly, we modify the order of lower authorities and direct the AO to restrict addition to the extent of 2% of such purchases. We direct accordingly.

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• 2018 (3) TMI 1039
  Accrual of income - entitlement of additional FSI available on the land owned by the appellant - assessee firm has developed and sold the FSI to the purchaser and the society for each of the building was formed as per the Co-operative Society Act. The balanced FSI available in hand with the assessee firm in 1995 was 14202.40 sq.mtr - in 1995 the assessee firm submitted the revised plan before the BMC and got the permission for total FSI of 89226.13 sq.mtr. - Held that:- The area sold upto 1,52,874.63 sq ft belonged to the assessee firm undisputedly and therefore whole of the sale consideration belongs to the assessee and has been duly accounted for in the books of accounts. As per the chart enclosed for A Y 2006-07, 2007-08 and 2008-09, the assessee started making deposit with court an amount equal to ₹ 500 per sq ft once the disputed FSI was utilized. Thus, the amount to the extent of ₹ 500 per Sq Ft has not accrued to the appellant and therefore cannot be treated as income of the assessee. The A.O has misunderstood the issue as of deduction of amount. The said amount has not accrued to the assessee and the question of claiming it as deduction would arise only if it is first held that it is income of the assessee. From the record, we also found that the ownership of additional FS1 is in dispute and the assessee has been permitted to develop and sell the such disputed additional FSI subject to certain conditions and deposit of ₹ 500 per sq ft of such additional FSI sold. The right to the said amount of ₹ 500 per sq ft has not accrued to the assessee and the owner of such amount would be decided by Courts and till such time as the issue is resolved the said amount does not accrue to the assessee. The detailed finding so given by the CIT(A) to the effect that ₹ 500/- per sq.ft of built-up area so deposited in the Court is not accrued to the assessee after relying on various judicial pronouncements, are as per material on record and which have not been controverted by learned DR by bringing any positive material on record. Accordingly, we do not find any reason to interfere in the order of CIT(A) for all the three years under consideration.

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• 2018 (3) TMI 1038
  Unexplained jewellery addition - jewellery found from the joint lockers - Held that:- AO has made the addition on account of purported unexplained jewellery claimed by the assessee without appreciating the fact that the jewellery found during the course of search and seizure operations was from the locker held by the father in law and husband of the assessee and hence the addition in the hands of the assessee is uncalled for. As was noted that jewellery found from the joint lockers was explained to be belonging to Late mother in law of the assessee Smt. Sarita Soni, however, the AO has rejected this contention. It is further noted that assessee’s belongs to joint family and it is undisputed position that marriages of mother in law had taken place 53 years prior to the search and marriage of the assessee had taken place 20 years. As further note that the Hon’ble High Court of Delhi in the case of Ashok Chadha vs. ITO [2010 (9) TMI 1174 - ITAT DELHI] has accepted the jewellery of 906.60 grams in the case of married lady even without documentary evidence as the denying the explanation would tantamount to overlooking the realities of life - Decided in favour of assessee

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• 2018 (3) TMI 1037
  TDS u/s 194C - Non deduction of tds on reimbursement of expenses made to group companies - invoking the provisions of section 40a(ia) - Held that:- As decided in assessee's own case [2012 (11) TMI 1155 - ITAT MUMBAI] disallowance cannot be made as it has not been shown or established that aforementioned payments were made by the assessee to the aforementioned group concerns against any contract work carried out by them for the assessee. In the case of reimbursement of expenses, the expenditure incurred is related to the person who has not made the original payment. The payment of expenditure is made by “X” party on behalf of “Y” party and later on the same is reimbursed to “X” party by “Y” party, the expenditure is pertaining to “Y” party and not pertaining to “X” party. - Not required to deduct TDS - Decided in favour of assessee Non TDS on advertising and promotion expenses relating to Team Lease Service Pvt. Ltd. - Held that:- As given that Rule 31ACB is applicable with effect from 19.02.2013, and that the ammendment made in section 40a(ia) of the Act came into effect from 1 April 2013, the assessee could not produced the said evidences during the course of the assessment proceedings, which were concluded prior to 19.02. 2013. The assessee only requested for remitting the matter back to the file of the AO for verification of the certificate and accordingly deciding the issue. Hence, we remit this issue back to file of the AO for limited verification only to give effect to the direction mentioned above.

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• 2018 (3) TMI 1036
  Penalty u/s 271(1)(c) - deducting the cost of fixed assets by the amount of capital subsidy received from the Govt - disallowed the excess depreciation - Held that:- The only lapse on the part of the assessee unearthed by the AO in the assessment proceedings was that instead of deducting the cost of fixed assets by the amount of capital subsidy received from the Govt., the assessee had shown it as part of reserves in the balance sheet and for this lapse, the AO had already disallowed the excess depreciation claimed. These facts, however, nowhere go to suggest that the assessee had furnished the inaccurate particulars to attract penalty u/s. 271(1)(c). Had the assessee not declared the capital subsidy received and claimed the depreciation on full value of capital assets, the matter would have been different. However, once all the information were given in the return of income accompanied by relevant books maintained by assessee, in our considered opinion, simple disallowance of depreciation will not amount to furnishing of inaccurate particulars, as held in the case of CIT vs. Ajaib Singh & Co. [2001 (8) TMI 79 - PUNJAB AND HARYANA High Court] and other several decisions relied by the assessee before us including CIT vs. Reliance Petroproducts Pvt. Ltd (2010 (3) TMI 80 - SUPREME COURT). - Decided in favour of assessee.

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• 2018 (3) TMI 1035
  Determination of the correct income for the current year chargeable to tax under the Act - AO has regarded the assessee as not a charitable trust - Held that:- There is no basis for allowing exemption to the assessee on its’ income u/s. 11 to whatever extent. We may accordingly answer the two aspects of the impugned assessment that we discern as arising for our consideration/ adjudication. The voluntary contributions to the assessee-society qualify as income u/s. 2(24)(iia) of the Act, and is therefore, subject to the provisions of the Act, eligible for exemption u/s. 11 on application. Two, the assessee is not entitled to exemption u/s. 11 in-as-much as it is admittedly not registered u/s. 12AA of the Act, which issue stands settled by the decision by the Apex Court in U.P. Forest Corporation v. Dy. CIT [2007 (11) TMI 303 - SUPREME Court]. That apart, it may be appreciated that not so holding, i.e., that the assessee is not entitled to any exemption u/s. 11 on account of non-registration u/s. 12AA, on which aspect there is no ambivalence in law (refer section 12A(1)), would render our own order as internally inconsistent, i.e., the same malady that inflicts the orders by the Revenue authorities, besides laying down a wholly unacceptable legal proposition/judicial precedent, inconsistent with the decision in U.P. Forest Corporation v. Dy. CIT (supra). We are also, we may add, conscious of the provision of s. 12A(2), which essentially seeks to extend the benefit of sections 11 and 12 to years for which registration u/s. 12AA is not available subject to the non-change of the objects of the trust during the intervening period, i.e., at the time of grant of registration and that obtaining during the relevant previous year. The same, however, would get triggered only upon grant of registration u/s. 12AA, which has admittedly not even been applied for by the assessee. The matter accordingly shall travel back to the file of the AO for adjudication afresh in accordance with law, in light of the foregoing findings/ observations. The assessee shall be allowed deduction qua any expenditure incurred, if any, including administrative expenditure, for the purposes of the running the institution or organizing its’ activities. The burden of proof or the onus to prove the said expenditure would be on the assessee, whose accounts are presumably audited, i.e., under the provisions of its charter read with its’ governing law, i.e., Society Registration Act, 1860. A charitable trust, we may though clarify, is to apply its’ accounting income, so that the expenditure need not necessarily satisfy the mandate of sec. 37(1) or sec. 57.

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• 2018 (3) TMI 1034
  Validity of order u/s 154 - Disallowance of NPA Provisions and Other Reserves - das per assessee the total provision made by the assessee up to 31.03.2007 amounting to ₹ 15.35 crore and the provision for the year assessment year 2007-2008 being only ₹ 2.13 crore was well within the permissible limit and hence allowable - Held that:- We noticed that the objections raised by the assessee are to be examined in detail after referring to the balance sheet and other records furnished by the assessee. The A.O. had conveniently ignored the objections of the assessee and passed the rectification order. The only obvious and patent mistake that are apparent from record can only be rectified u/s 154 of the I.T.Act. In the instant case, the mistakes, if at all, that was sought to be rectified u/s 154, can be done only after detailed examination of the books of account, balance sheet and profit and loss account of the assessee and such detail examination cannot be made while passing order u/s 154 of the I.T.Act. Hence, we are of the view that the CIT(A) has correctly quashed the order u/s 154 passed by the Assessing Officer. - Decided against revenue

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• 2018 (3) TMI 1033
  Disallowance of interest - Held that:- As decided in assessee's own case [2014 (4) TMI 1214 - ITAT KOLKATA] if these are funds available both interest free and overdraft and / or loans taken, then a presumption would arise that investments would be out of the interest free fund generated or available with the company, if the interest free funds were sufficient to meet the investments. In this case this presumption is established considering the finding of fact both by the CIT(A) and Tribunal. We are therefore, of the opinion that Ld. CIT(Appeals) was justified in allowing the interest paid on loans to be deducted from the interest earned - Decided against revenue

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• 2018 (3) TMI 1032
  Reopening of assessment u/s.147 - addition of 12.5% made in respect of bogus purchases found during the course of survey - Held that:- There is no allegation by the assessee before AO that copy of impounded documents were not supplied to the assessee so as to enable it to furnish the required details. Even before the CIT(A), there is no such request made by the assessee, therefore, contention of ld. AR to restore the matter back to the file of the AO is not acceptable at all. So far as giving of credit of the GP rate already declared by the assessee is concerned [2017 (4) TMI 402 - ITAT MUMBAI] we restore the matter back to the file of the AO for deciding afresh in terms of the observation made by the Tribunal - Decided partly in favour of assessee for statistical purposes.

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• 2018 (3) TMI 1031
  Deduction claimed u/s 10B/10A both on regular income and on the additional income offered by way of TP adjustment by the assessee - Held that:- The assessee in the return of income had claimed the deduction under section 10B of the Act. During the course of assessment proceedings, the assessee filed an alternate claim that since the unit was registered under STPI, the assessee was entitled to claim the deduction under section 10A of the Act. Both the authorities below have denied the deduction under section 10B . Further, on one reason or the other had also denied the alternate claim of assessee under section 10A. We find that the Tribunal in assessee’s own case [2015 (3) TMI 151 - ITAT PUNE] had held that the assessee was not entitled to the claim of benefit under section 10B of the Act, but the assessee was held to be eligible to claim the deduction under section 10A of the Act, for which the matter was restored back to the file of Assessing Officer. The issue arising in the present appeal before us is identical and following the same parity of reasoning, we direct AO to verify the claim of deduction under section 10A Addition u/s 10B on the suo-moto transfer pricing adjustment as relying on case of M/s. iGate Global Solutions Ltd. [2014 (6) TMI 1007 - KARNATAKA HIGH COURT] the assessee is entitled to claim the aforesaid deduction under section 10A on additional income offered on account of suo-moto adjustment on account of transfer pricing provisions. The provisions of section 92C(4) of the Act are not attracted. The modified ground of appeal No.4 raised by the assessee is thus, allowed.

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• 2018 (3) TMI 1030
  Income from sale of shares - Treatment of Short Term Capital Gains as Business Income - assessee had maintained dual portfolio in its books of accounts i.e both investment and trading portfolio - Held that:- AO had already accepted the assessee’s stand of being an investor for Asst Years 2007-08 and 2008-09 by accepting the long term capital gains reported by the assessee. The dispute was only with acceptance of short term capital gains and for that limited purpose alone, the revenue was trying to treat the assessee as trader in shares and not investor in shares. This divergent stand of the lower authorities is not appreciated. The assessee had purchased the shares that the assessee had invested in the aforesaid scrips with an intention to earn dividend and for holding for quite a long period of time and earn capital appreciation thereon. These are also supported by the Board Resolution passed by the assessee company to treat the purchase of certain scrips in each year as investments, much prior to the introduction of concessional rate of tax in the statute pursuant to levy of STT. We also find from the perusal of the audited financial statements, the assessee has got sufficient own funds at its disposal which were used for making investments and no part of the borrowed funds were used for making investments. The trading transactions disclosed by the assessee comprised of 96 scrips (trading in shares) and 269 scrips (trading in derivatives) for the Asst Year 2006-07. The profit derived from these trading transactions were duly offered to tax by the assessee as business income and accepted by the revenue. The assessee had after conversion of stock into investment as on 1.4.2005 had held those shares for a reasonable period of time and the weighted average period of holding of those shares was 82 days. This shows the intention of the assessee to hold those shares as investments to earn dividend and reap the benefits of capital appreciation and at the same time, exit at a profitable moment depending upon the market conditions The treatment given by the assessee in respect of share transactions by separately offering business income and short term capital gains / long term capital gains does not warrant any disturbance and deserves to be accepted. Disallowance of Consultancy charges - Held that:- The only way is to understand the veracity of the transactions is by cross verifying the other side who had submitted those reports. He fairly agreed that let this matter be examined by the ld AO. We find that this request of the ld AR deserves to be considered in as much as the disallowance has been made only by way of suspicion by the ld AO. Accordingly, in the interest of justice and fair play, we deem it fit and appropriate to remand this issue to the file of the ld AO to decide the same by making necessary cross verifications from M/s Batliwala & Karani Securities India Pvt Ltd in the legal process known to law.

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• 2018 (3) TMI 1029
  Addition towards share capital - source of the share applicants for making investment in share application monies of assessee company - Held that:- The nature of receipt towards share application money is well established from the entries passed in the respective balance sheets of the companies as investments. Hence the nature of receipt is proved by the assessee beyond doubt. In respect of source of credit, the assessee has to prove the three necessary ingredients i.e identity of share applicants, genuineness of transactions and creditworthiness of share applicants. In the instant case, we find that the identity of share applicants is proved beyond doubt by the assessee by furnishing the name, address, PAN of share applicants together with the copies of balance sheets and Income Tax Returns . With regard to the creditworthiness of share applicants, the ld AO himself states that the five share applicants had invested in assessee company’s shares by taking money from some other companies. Hence the source of the share applicants for making investment in share application monies of assessee company is also proved. By this, the creditworthiness of the share applicants is also proved beyond doubt. The five share applicants had paid the monies to the assessee company by account payee cheques out of sufficient bank balances available in their bank accounts, which are quite evident from the bank statements enclosed in the paper book. We agree with the arguments of the ld AR that the source of source of share applicants need not be proved by the assessee herein. The assessee had indeed proved the identity of the share applicants, creditworthiness of share applicants and genuineness of transactions beyond doubt. We find that the entire addition has been made by the ld AO based upon suspicion, surmises and conjectures and not upon proper evaluation and appraisal of the evidences and documents filed before him. - Decided against revenue

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• 2018 (3) TMI 1028
  Addition u/s 40A(3)- main reason for addition made by the AO is because the Authorized Representative has agreed for addition before the Assessing Officer - tribunal committed an error in passing the order - Held that:- The tribunal gave a specific finding in the order as find in this case, the assessee has paid more than ₹ 20,000/- in a day and obtained the receipt only for ₹ 19,000/-. This fact is admitted before the A.O. It is a clear violation of section 40A(3) of the Act. The ld.CIT(A) without considering section 40A(3) of the Act, simply deleted the addition made by the A.O. Thus find the order passed by the ld. CIT(A) is contrary to the provisions of section 40A(3) of the Act. In view of the above finding given by the Tribunal, we find no error apparent on the face of the order passed. Thus, this Misc. Application filed by the assessee is dismissed.

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• 2018 (3) TMI 1027
  Disallowance of depreciation on assets acquired from M/s Sahney Krikwood and leased back - Held that:- As long as the asset is utilized for the purpose of business of the assessee, the requirement of Section 32 will stand satisfied, notwithstanding non-usage of the asset itself by the assessee. On a combined reading of Section 2(13) and Section 2(24) the income derived from leasing of the trucks would be business income, or income derived in the course of business, and has been so assessed. Hence, it fulfills the second requirement of Section 32 viz. that the asset must be used in the course of business. See ICDS Ltd. Vs. CIT [2013 (1) TMI 344 - SUPREME COURT ] Interest u/s 220 (2)- Held that:- Interest u/s 220 (20) should be calculated from the date of fresh assessment when the assessment is de novo set aside and the interest could not be calculated from the date of original assessment order, which is very clear from the CBDT Circular No. 334 dated 3/04/1982. Thus we direct the AO to recomputed interest accordingly. Hence, we allow this ground of appeal of the assessee. Disallowance of provision of leave encashment - Held that:- CIT-A has decided the issue by following the law laid down by the Hon’ble Supreme Court in Bharat Earth Movers vs. Commissioner of Income Tax [2000 (8) TMI 4 - SUPREME Court] wherein held provision for meeting the liability for encashment of earned leave by the employee is an admissible deduction

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• 2018 (3) TMI 1026
  Penalty u/s 271(1)(c) - unexplained cash deposits in bank account - validity of notice - absence of specific charge - Held that:- ‘Suppressio vari’, or ‘suppression of truth’, which has, in section 271(1)(c) of the IT Act, as its equivalent, ‘concealment of income’, and ‘suggestio falsi’, literally, ‘suggesting or stating a falsehood’, which manifests itself as ‘furnishing of inaccurate particulars thereof’, are two distinctly separate charges; that leveling of either of these charges has to be explicitly brought to the notice/knowledge of the assessee, sans which, the assessee, under a nebulous notice containing both these charges, is rendered incapable of defending the charge per se. This would be in utter violation of the principles of natural justice, such notice being null and void ab initio. It is also pertinent to note at this juncture that the notice u/s 274 is a mandatory statutory notice without which, the initiation of penalty proceedings would be nugatory, nay, non est in the eye of the law. Therefore, the argument of the Department that where initiation of penalty in the Assessment Order, the levy in the penalty order and the confirmation of such penalty in the first appellate order are on one and the same charge, the contents of the notice u/s 274 are of no effect, the assessee having been duly apprised of the specific charge against them, is not acceptable in law. Therefore, particularly following ‘Manjunatha’ (2013 (7) TMI 620 - KARNATAKA HIGH COURT), we hold that the notices under challenge are not in conformity with the law and they are void ab initio. - Decided in favour of assessee

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• 2018 (3) TMI 1025
  Validity of the reopening done u/s.147 - eligibility of the assessee for claiming deduction u/s.10A - Held that:- The claim made by the assessee u/s.10A of the Act cannot be treated as an entirely new claim, since the basis of the claim was profits earned by it from its STPI unit. It might be true that profits earned from STPI was not eligible for deduction u/s.10B of the Act. However, admittedly, such profit was eligible for deduction u/s.10A of the Act. Just because the assessee mentioned a wrong Section, in my opinion, it could not be deprived of a legislate claim for which it was otherwise eligible. In my opinion lower authorities erred in not considering correctness of the claim of deduction made by the ld. Assessing Officer u/s. 10B of the Act Since the claim made by the assessee u/s.10A of the Act, cannot be considered as a fresh claim as the claim emanated from working of the same STPI unit on which it had earlier preferred a claim under section 10B of the Act. Thus, claim of the assessee cannot be considered as fresh one. The question whether assessee was eligible for claiming deduction u/s.10B of the Act ought have been considered on the merits of such claim - set aside the orders of the lower authorities and remit the issue regarding eligibility of the assessee for claiming deduction u/s.10A of the Act back to the file of the ld. Assessing Officer for consideration afresh - Decided in favour of assessee for statistical purposes.

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• 2018 (3) TMI 1024
  Non compliance with condition precedent u/s 179(1) - recovery of dues of the company from the directors - revision application u/s 264 rejected - attachment orders - Held that:- The condition precedent to recover the dues from the Petitioner i.e. a Director of the defaulting company is that the Revenue cannot recover its tax dues from the Directors. Thus the condition precedent to recover the dues from the Petitioner i.e. a Director of the defaulting company is that the Revenue cannot recover its tax dues from the defaulting limited company. In an identical fact situation, this Court had in the Chintan A. Shah v/s. Income Tax Officer (2018 (3) TMI 959 - BOMBAY HIGH COURT) had allowed the Petition on 22nd February, 2018. The Petitioner is the brother of Mr. Chinan Shah above and Directors of the same defaulting private company. Therefore, we set aside the impugned orders dated 2nd March, 2016 and 13th June, 2017 passed by the Assessing Officer and the Commissioner of Income Tax. However, it is made clear that the attachment of bank account by an order dated 3rd August, 2015 of the delinquent private limited company, would continue.

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• 2018 (3) TMI 1023
  Payment of interest u/s 244A for the delay caused by the assessee for correcting the TDS certificates - review of judgment - Held that:- Evaluating the scope of Section 244A (2), which clearly indicates that if the proceedings resulting in the refund of delay for the reasons attributable to the assessee, whether wholly or in part, the period of the delay so attributable shall be excluded from the period for which interest is payable. Statue also indicates that, if any question arises as to the period to be excluded, it has to be decided by the Principal Chief Commissioner or the Chief Commissioner. Under what all circumstances can such an eventuality arise is a matter to be considered by a competent authority. Once the competent authority had taken such a decision, this Court, in a petition under Article 226 of the Constitution of India will not go into the merits of the contention, unless the decision is illegal or perverse. Each case has to be decided on its own facts. In CIT, Thiruvananthapuram v State Bank of Travancore (2014 (1) TMI 25 - KERALA HIGH COURT), the Division Bench was considering a case in which interest was directed to be paid by the Commissioner of Income Tax, which was confirmed by the Tribunal. The said case rests on its own facts. In the present case, the Commissioner of Income Tax had denied the grant of interest on specific grounds which had been indicated in the order itself and it was after arriving at a conclusion that such a power is vested with the Commissioner, that this Court had upheld the view expressed by the Commissioner. In the said circumstances, we do not think that the decision in CIT, Thiruvananthapuram v State Bank of Travancore (supra) is an authority to review the judgment.

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• 2018 (3) TMI 1022
  Additions made u/s 40(a)(ia) - resident-receiver of amounts, paid tax on such receipts; even when the payer has failed to deduct tax at source - assessee in default - Held that:- To avail of the beneficial provisos under Sections 40(a)(ia) & 201(1), there should be (i) return of income under Section 139(ii), with computation of income including such amounts received, as also (ii) payment of tax on such income. Only if all the three conditions are satisfied, would the beneficial provision be applicable to an assessee who failed to deduct tax at source. In the present case, admittedly, resident-receiver to whom the assessee paid or credited the lease rent has filed a return belatedly and not paid any tax due on the income declared. When there is no tax paid on the income declared; even if for reason of a loss return, there cannot be any claim raised by the assessee in default to absolve him from the consequences flowing from Sections 201(1) and 40(a)(ia). He will then be treated as an 'assessee in default' and would be liable to pay the amount of TDS with interest as also subject to the expenses being disallowed. Additional ground urged on the basis of Section 43(2) - Held that:- The term “paid” has been defined as an amount paid or actually incurred and hence in the case of a loss return, even if there is no actual payment, the loss return, which does not raise a liability to pay, has to be liberally construed is the argument. The definition clause is with reference to 'income from profits and gains of business'. By the specific words employed in sub-section(2) of Section 43, this is with reference to the method of accounting; which is either on accrual or receipt. There is no ground raised on the basis of the method of accounting of the assessee, herein and the contention is only to be rejected. The definition clause has nothing to do with Section 201(1) or the determination of an 'assessee in default'. We cannot countenance the further argument of the learned Senior Counsel that the appellant/ assessee should be considered as a charitable educational institution under Section 12AA. Admittedly, the assessee had applied for such registration only in the year 2011-12. The application for condonation of delay for the previous years stood rejected. There is no question of any exemption allowed in a year in which such registration was not available; especially by this Court exercising jurisdiction under Section 260A - Decided in favour of the Revenue. Liability of the assessee under Section 201(1) being treated as an assessee in default confirmed - Decided in favour of the revenue

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• 2018 (3) TMI 1021
  Penalty u/s.271(1)(c) - bonafide claim of travelling expenditure - Held that:- As per record, we observe that all the facts were disclosed and the claim was made for deduction of travelling expenses. As per record the assessee has made a bonafide claim. The AO as well as CIT(A) have not challenged the genuineness / bonafides of the expenditure so incurred. The claim of the assessee is also supported by various decisions and documentary evidences placed on the record. Thus, penalty cannot be levied where a bonafide claim of the assessee was rejected by the tax department. No merit for the penalty so imposed u/s. 271(1)(c) on account of disallowance of part of travelling expenses. - Decided in favour of assessee.

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• 2018 (3) TMI 1020
  Addition u/s 68 - long term capital gain as claimed by the assessee rejected - Held that:- The assessee just wanted to enter into the transaction to earn exempted capital gain, but the assessee did not sell all the share 45000 shares instead of sale of a part i.e. 8000 shares only when that time was the best price ever. All the transaction were made through account payee cheque / banking channel and assessee had purchased share in financial year 2009-10 and sold the same in the financial year 2013-14 resulting in Long Term Capital Gain. The assessee has submitted various documentary evidences to prove the genuineness of the transaction of sale and purchase of shares which includes a copy of purchase bill dated 22.02.2010; a copy of share transfer form in the favour of the assessee; Copy of bank statement highlighting the payment made against the share purchased; Transaction statement of the stock broker i.e. Pace Stock Broking Services (P) Ltd., account; copy of bank statement in which sale proceed from the sale of shares received; copy of calculation of long term capital gain, which was not faulted by the AO. Lower authorities have not considered the aforesaid documents and rejected all the claims made by the assessee by relying on the report of the Investigation Wing and thereby made the addition, which is not sustainable in the eyes of law. Further find that the AO has given detailed explanation in the order regarding the modus-operandi of bogus LTCG scheme but failed to substantiate how the assessee fell in the purview of the same without bringing any material on record and proving that the assesssee was directly involved in the so called bogus transaction. The addition in dispute made by the AO and upheld by the CIT(A) u/s 68 as unexplained credit instead of long term capital gain as claimed by the assessee, however, the source identity and genuineness of the transaction having been established by documentary evidences and there is no case for making addition u/s 68 hence, the same deserve to be deleted. - Decided in favour of assessee.

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• Customs

• 2018 (3) TMI 1015
  Condonation of delay in filing appeal - power of Commissioner (A) to condone delay - Held that: - if the appellant were aggrieved by the assessment of the Bill of Entry, he could have either asked for re-assessment of the Bill of Entry or at least challenged the same before the First Appellate Authority within the time available to him for such purpose - Since the appeal has been filed before the Commissioner (A) well beyond the period, which he is empowered to condone, the appeal has been rightly rejected by the Commissioner (A) - appeal dismissed - decided against appellant.

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• 2018 (3) TMI 1014
  Re-assessment of value - Stearic Acid Pace imported from Malaysia - enhancement of value - Held that: - Section 14 of the Customs Act as well as Customs Valuation Rules provides for rejection of transaction value only in certain specific cases and only after rejection of such value, the value can be re-assessed - In the present case, the transaction value has been rejected only by reference to NIDB data as well as in comparison of supplies made by the same suppler for another buyer in Cochin. Such rejection of transaction value is not justified especially in view of the fact that the two consignments are not comparable in terms of quantity and quality of the goods - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1013
  Export of goods without having the license for export - Muriate of Potash - restricted item - Held that: - there is negligence on the part of the appellant because before making the shipping bill, he has neither inspected the documents nor the goods or its literature. But fact remains that the export item is a chemical item and appellant is not a chemical expert - the quantum of penalty reduced - appeal allowed in part.

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• 2018 (3) TMI 974
  Classification of semi-finished goods - spectacle lenses - eligibility for exemption N/N. 6/2006-CE dated 1.3.2006 providing for exemption to spectacle lens - Whether the goods are classifiable under CTH 9001.90.90 of the Customs Tariff Schedule or otherwise? - Held that: - this Tribunal in appellant’s own case M/s. Essilor India Pvt. Ltd. Versus Commissioner of Customs, Bangalore [2016 (5) TMI 303 - SUPREME COURT] has allowed the appeals of the appellant, holding that there is no change in the tariff rate or in the nomenclature of various entries in the earlier notifications which were of tariff heading of 8 digits. As a consequence, when the spectacle lenses imported by the appellant were given the benefit of exemption as per the exemption notification No.6/6 dated 1st March, 2006, the said position continued even thereafter and therefore the appellant was entitled to the benefit of this notification even for the period in question - appeal allowed - decided in favor of appellant.

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• Service Tax

• 2018 (3) TMI 1012
  Interim stay on the payment of the disputed tax liability - the decision in the case of M/s N.V. Marketing Pvt. Ltd. Versus CST, Delhi [2017 (11) TMI 1406 - CESTAT NEW DELHI] contested upon - Held that: - there will be interim stay on the payment of the disputed tax liability subject to the condition that the appellant gives a bank guarantee for the amount of the disputed liability.

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• 2018 (3) TMI 1011
  Interpretation of statute - commercial training or coaching services - it was alleged that since the training courses conducted by IIPM do not result in award of any certificate/ Diploma/ Degree or any other educational qualification recognized by the law being in force, the activity will fall under the category of Section 65 (105) (zzc) of the Act and is a taxable service liable to payment of Service Tax - Held that: - there is no scope to exclude “Academic Courses”, conducted by IIPM from the purview of Service tax levy. The exclusion provided in Section 65 (27) is available to any institute or establishments which issues any certificate or any educational qualification recognized by law for the time being in force. But it is an admitted position that the certificates and degrees awarded by IIPM and also by IMI, Europe do not enjoy the recognition from AICTE or UGC. These facts have been declared by IIPM in their prospectus and advertisements and such facts have been admitted by the Dean of IIPM in his statements before the investigating authorities - IIPM clearly falls under the definition of Commercial Training or Coaching Centre as defined in law Section 65 (27) and the services rendered by them are liable to Service Tax. Time limitation - whether extended period of time could be invoked in the present case for confirmation of Service Tax demand? - Held that: - It is on record that IIPM neither took registration nor registered themselves with Department up to 22/07/2005. On the said day the registration was taken only at Bangalore even though IIPM has Institutes in many other places. They also did not pay any Service Tax or file ST-3 Returns even though the tax on Commercial Training or Coaching Centre was levied w.e.f. 01/07/2003 - Since they have failed to obtain registration or file returns or even intimate the Department of the activities undertaken, the Department is fully justified in issuing show cause notice to demand of Service Tax along with interest by invoking the extended period of time - extended period rightly invoked. Demand upheld - appeal allowed - decided in favor of Revenue.

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• 2018 (3) TMI 1010
  Construction of residential complex - whether construction of residential complex will come within the definition of personal use figuring in the Explanation under section 65(91a) of the Finance Act, 1994? - Held that: - It is evident from the facts of the case that M/s.Lanco has engaged the assessee with the specific purpose of construction of such residential units which are meant for personal use of the employees of M/s. Lanco. The statutory definition of section 65(91a) of the Finance Act, 1994 specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person - the above exclusion clause covers the construction activity undertaken by the assessee. Appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 1009
  Business Auxiliary Service - reverse charge mechanism - demand on the premise that the appellant did not get registered themselves under the Business Auxiliary Service by issuance of the show cause notice dated 24.04.2009 by invoking extended period of limitation - Held that: - the Hon’ble High Court observed in the case of Indian National Shipowners Association V. Union of India [2008 (12) TMI 41 - BOMBAY HIGH COURT], that the extended period of limitation is not invokable. As the extended period of limitation is not invokable, no penalty is imposable on the appellant. Appeal disposed off.

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• 2018 (3) TMI 1008
  CENVAT credit - capital goods not sold as scrap - Held that: - These documents are undoubtedly relevant to arrive at proper conclusion on this issue and, therefore, need to be examined first by Ld. Commissioner (Appeals). Besides, the findings of the Commissioner (Appeals) are very terse and restricted to simply endorsing the order of the adjudicating authority without giving any kind of analysis on the submissions of the appellant made before him and the case laws cited by the appellant. Such an order, which lacks judicial analysis of the contentions of the appellant, does not do justice to any of the sides. Hence, the matter requires to be re-adjudicated by the Ld. Commissioner (Appeals), who should give proper findings on averments and documentation furnished by the appellant in their defence. Utilization of excess Cenvat credit of basic custom duty - Held that: - The appellant had not shown the Cenvat credit of BCD, CVD and Cenvat duty separately in their register. On this issue too, the Ld. Commissioner (Appeals) has given no finding at all in his order and simply upheld the order of the adjudicating authority - matter requires reconsideration. Appeal allowed by way of remand.

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• 2018 (3) TMI 1007
  Valuation - inclusion of amount of discount given to PCO operators - whether the assessee has to discharge service tax on the entire amount collected by the PCO operator from the PCO user (customer)? - Held that: - Prior to 1.6.2008, the appellant BSNL was discharging service tax on the basis of metered calls of the PCO recorded in the exchange. Thus PCO operators were allowed to charge Re.1 per MCU and this Re.1 comprised of Re.0.11 towards service tax and balance ₹ 0.89 towards commission payable to operators and revenue share of BSNL. After 1.6.2008, though Re.1 per MCU remained the same, the nature of payment to PCO operator was changed by providing a slab basis / defined rates. Thus for Re.1 collected by PCO operator, he retained Re.0.30 and Re.0.40 and paid Re.0.70 and Re.0.60 to BSNL upon which BSNL discharged the service tax. According to department, Re.0.30 and Re.0.40 in the nature of discount given to PCO operator should be included for levy of service tax. In Bharti Infotel Ltd. [2005 (7) TMI 3 - CESTAT, New Delhi], it was decided that such commission / discount cannot be included in the value for levy of service tax. N/N. 2/2011-ST dt.1.3.2011 has inserted an Explanation in Rule 5, clause (1) of Service Tax (Determination of Value) Rules, 2006, which says that W.e.f. 1.3.2011, the value of taxable services in sub-clause (zzzx) of clause 105 of Section 65 namely the telecommunication services, shall be the gross amount paid by the person / PCO user to whom the telecom service is provided by the telegraph authority. The said amendment makes it clear that w.e.f. 1.3.2011, the value of taxable service would include the total amount collected by the PCO operator - since it is specifically stated that the said notification shall be effective only from 1.3.2011, the period involved in the present case being prior to 1.3.2011, the demand of differential amount of service tax alleging that entire amount collected by the PCO operator is subject to levy of service tax cannot sustain. Appeal allowed - decided in favor of assessee.

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• 2018 (3) TMI 1006
  Classification of services - Maintenance and Repair services - Business Support Service - Business Auxiliary Service - Whether the activity undertaken by M/s. Xerox for various contracts for Maintenance and Repairs do qualify as Maintenance or Repair Service, or not? - Held that: - It is a fact that appellant is engaged in the activity of Maintenance and Repair of equipments supplied by them under various contracts. M/s. Xerox is required to replace the parts and accessories at the time of repair or maintenance - these are the Works Contracts and M/s. Xerox is paying VAT on the portion of materials supplied - M/s. Xerox is liable to pay service tax only on Labour Portion. Whether the service namely, XGS shall qualify under 'Business Support Service' or Business Auxiliary Service or under Works Contract service? - Held that: - the appellant is engaged in the activity of printing of bill and not Billing . Therefore, the said printing of bill is altogether a different activity from the billing and cannot be termed as Billing - the services in question do not qualify under the category Business Auxiliary Service. Whether the activities undertaken by M/s. Xerox under various contracts of Maintenance and Repair Service and Business Support Service are properly classifiable under Works Contract or not? - Held that: - The said issue has been examined by the Hon’ble Apex Court in the case of Larsen & Toubro Limited [2015 (8) TMI 749 - SUPREME COURT] wherein it has been held that prior to 01 June 2007, if the services have been provided along with material and the value of material supplied cannot be vivisected, in that circumstance, the appropriate classification of the service shall be Works Contract service and the same was not taxable prior to 01.06.2007. Therefore, for the period prior to 01.06.2007, no demand is sustainable under the category of Maintenance and Repair Service/ Business Support Service/ Business Auxiliary Service for the activity undertaken by M/s. Xerox as the services of Business Support Service and Maintenance and Repair along with material and the agreement cannot vivisect the amount of material supplied by M/s. Xerox. For the period post 01.06.2007, the Maintenance and Repair and XGS services are under Works Contract, whether the services under Works Contract is taxable or not? - Held that: - for the first time Section 65 (105) (zzzza) set-out to tax the service as Works Contract service for levy of service tax on the works executed along with the material - there is no merit in the impugned order demanding service tax from M/s. Xerox under the category of Maintenance and Repair Services/ Business Support Service. As no demand is sustainable on M/s. Xerox therefore demand of interest and penalties are also set-aside. Appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 1005
  Man power recruitment or supply agency services or not - whether the activity of bagging and shipping work executed by the appellant as per the contract for bagging and shipping amounts to supply of man power or not? - Held that: - The scope of the work is to execute bins filing, bagging, stitching, handling and dispatch of finished product on round the clock basis. The rates are fixed on tonnage basis. Thus it is seen from the contract that the work involves bagging and shipping of finished products. There is nothing in the contract to show that the appellant has any obligation to supply man power. Instead the contract speaks of execution of work. The employees are under the control and supervision of appellants for executing the work and not under the supervision of MFL. The appellant has discharged the statutory obligations of his workers which shows that they worked on behalf of appellant. The consideration is not paid by MFL on the basis of the number of persons employed but on the basis of work executed. A similar issue was analyzed by the Tribunal in the case of Bhaghyashree Enterprises [2017 (3) TMI 786 - CESTAT MUMBAI] wherein the Tribunal had held the issue in favour of the assessee holding that such lump sum work order can be considered as job work activity. - amounts received by the appellant cannot be taxed under the category of Man Power Recruitment or Supply Services. Outdoor Catering Services - benefit of N/N. 1/2006-ST - Held that: - this issue can be remanded to the adjudicating authority so as to give the appellant further opportunity to furnish documents in order to claim the abatement in terms of N/N. 1/2006-ST - matter on remand. Appeal allowed in part and part matter on remand.

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• 2018 (3) TMI 1004
  Refund claim - sub-contractor - whether the appellants being sub-contractors are entitled to refund of service tax paid on Construction Services used in the construction of the building for institute of Kidney Disease & Research Center, when the original contract awarded to the main contractor, M/s Malini Constructions? Held that: - both the sub-contractor as well as the main contractor engaged in providing works contract service during the relevant period for carrying out the above construction work would be eligible to the exemption. The Ld. Commissioner (Appeals) upheld the rejection of refund claim on the ground that the appellants had not established the fact that they had provided works contract service to the main contractor i.e. M/s Malini Constructions during the relevant period - the fact remains to be scrutinized is whether the appellants had provided works contract service to M/s Malini Constructions, and accordingly, eligible to claim refund of service tax paid during the said period. Appeal allowed by way of remand.

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• 2018 (3) TMI 1003
  CENVAT credit - input services - Catering Charges - Insurance Premium on employees - Insurance charges on Vehicles - Brokerage charges paid for arranging residential premises for employees. Canteen services provided to the patients during the course of clinical test on them - Held that: - it has direct nexus with the output services of clinical test service provided by the respondent, accordingly, eligible to credit as the same does not fall in the exclusion clause of the definition of the input services - credit allowed. Insurance Service taken on the employees - Held that: - the issue is covered by the judgment in the case of ECOF Industries Pvt Ltd [2011 (2) TMI 1130 - KARNATAKA HIGH COURT], where it was held that the credit on similar issue allowed - credit allowed. Insurance Charges on vehicles - Brokerage charges for arranging accommodation for the employees - Held that: - these services are not eligible for credit - credit not allowed. Appeal allowed in part.

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• 2018 (3) TMI 1002
  Renting of Immovable Property Service - non-payment of service tax - time limitation - whether the demand of service tax raised for non-payment of tax on Renting of Immovable Property Service during the period 2007-2008 is barred by limitation? - Held that: - There is no dispute of the fact that by virtue of retrospective legislation viz. Sec. 77 of Finance Act,2010 service tax on Renting of Immovable Property Service has been validated to be payable from the date of its insertion in the Finance Act,1994 i.e. w.e.f. 01.06.2007. The Hon ble Calcutta High Court in the case of INFINITY INFOTECH PARKS LTD. Versus UNION OF INDIA [2014 (12) TMI 36 - CALCUTTA HIGH COURT] has recently considered the issue of recovery service tax on renting of immovable property invoking the extended period of limitation, and observed that the extended period of limitation cannot be invoked for recovery of the service tax not paid during the relevant period on Renting of Immovable Property Service. The recovery of the service tax on Renting of Immovable Property cannot be affected invoking extended period of limitation - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1001
  Rent-a-cab Scheme Operator Service - non-payment of service tax - Held that: - the issue involved in the present appeals already stands decided by the Tribunal. In the case of BMTC vs. CST [2015 (2) TMI 100 - CESTAT BANGALORE], where it was held that Apparently BMTC cannot be considered to be a person engaged in renting of cab service at all. The business undertaken by BMTC is to provide bus facility/transport facility to the citizens of Bangalore city and the main activity is running the buses in the city for the convenience of citizens and not a rent-a-cab scheme operation - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1000
  Consulting Engineer Service - reverse charge mechanism - Held that: - chargeability of service tax on taxable services provided by non-recipient or a person located outside India to a recipient in India on reverse charge basis became payable only after introduction of Section 66A in the Finance Act, 1994 with effect from 18.4.2006 - Since the entire demand in the present case is prior to this date, the demand cannot be upheld - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 999
  Refund of unutilized CENVAT credit - export of services - N/N. 5/2006-CE (NT) dated 14.3.2006 - denial on the ground that the condition that the payment for export service is to be received by the service provider in convertible foreign exchange was not satisfied - Held that: - one of the conditions for allowing refund is that the proceeds for export of service should have been received in convertible foreign currency. In respect of the present refund claims, the proceeds for export of service were not received directly in foreign exchange but the same was routed by the Foreign Service receiver through M/s. Wells Forgo NA, USA through HSBC Bank. Ultimately the amount was received by the appellant in rupees. The issue has been decided in favour of the appellant by this Tribunal in the case of BBC World Services India Pvt. Ltd. vs. Commissioner of Service Tax, Delhi [2018 (2) TMI 369 - CESTAT NEW DELHI], where it was held that there is no no merit in the findings by the lower authority to the effect that foreign exchange has not been received in convertible foreign currency for export of services by the appellant. Appeal allowed- decided in favor of appellant.

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• 2018 (3) TMI 998
  Business Auxiliary services - Pre-deposit - Held that: - The appellant should pre-deposit the amount and report compliance to the Commissioner (Appeals) - matter remanded to decide the case on merits.

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• 2018 (3) TMI 997
  Refund claim - service tax paid on the discounts passed on to their clients out of the discounts received by them from print/visual media - Held that: - there is no infirmity in the impugned order by which the Commissioner (Appeals) has set aside the Order-in-Original on the ground that the aspect of unjust enrichment has not been considered by the original authority - subsequent to the decision of the Commissioner (Appeals), the original authority vide Order dated 30.12.2016 has examined in detail the aspect of unjust enrichment - appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 996
  Penalty u/s 78 - CENVAT credit - various input services - Held that: - identical issue decided in the case of Taj Malabar Hotel (vivanta, Malabar Cochin) , Willingdon Island Versus Commissioner of Central Excise, Customs and Service Tax, Cochin-CCE [2018 (3) TMI 973 - CESTAT BANGALORE] where the Tribunal disposed of the appeal by way of remand - appeal allowed by way of remand.

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• 2018 (3) TMI 995
  CENVAT credit - input services - Club Services - Tours and Travel Services - Sodexho Passes - Rent-a-Cab Service - Credit Card Services - Held that: - all these services on which cenvat credit has been allowed by the Commissioner (Appeals) fall in the definition of input service as held by various Benches of the Tribunal - reliance placed in the case of Pam Pharmaceuticals & Allied Machinery Co. P. Ltd. Versus Commissioner of Central Excise, Mumbai V [2016 (3) TMI 229 - CESTAT MUMBAI], COMMISSIONER OF SERVICE TAX, BANGALORE Versus YODLEE INFOTECH (P) LTD. [2015 (11) TMI 653 - CESTAT BANGALORE] credit rightly allowed - appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 994
  Liability of service tax - the appellant has received advances from various parties and the Department was of the view that service tax was required to be paid on such advances - Held that: - from the copies of the certificates placed on record, it is seen that the appellant has written off such advances and hence there will be no liability for payment of service tax. But since such certificates were procured only subsequent to the date of the impugned order, the appellant could not produce the same before the adjudicating authority. Matter remanded to the adjudicating authority for a de novo decision in the matter after perusing the additional documents which the appellant is in a position to submit - appeal allowed by way of remand.

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• Central Excise

• 2018 (3) TMI 993
  CENVAT credit - Input service - GTA - goods transport agency service availed for transport of goods from the place of removal to depots or the buyers premises - interpretation of statute - input service which is defined in Rule 2(l) of the CENVAT Credit Rules, 2004 - Held that: - the expression used in the aforesaid Rule is “from the place of removal”. It has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. Our view gets support from the amendment which has been carried out by the rule making authority w.e.f. 01.04.2008 vide N/N. 10/2008CE(NT) dated 01.03.2008 whereby the aforesaid expression “from the place of removal” is substituted by “upto the place of removal”. Thus from 01.04.2008, with the aforesaid amendment, the CENVAT credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be. Appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 992
  Extended period of limitation - the appellant mainly contended that in absence of suppression, misstatement, fraud etc, the extended period of limitation cannot be invoked, for confirmation of the duty demand - Held that: - the process of debonding initiated by the appellant was known to the Department on 26/12/2007 and upon satisfaction that the appellant deserved for debonding of its unit, the Authorities have recommended positively for issuance of the NOC - it cannot be said that the appellant had indulged into the activities of suppression, fraud etc., with the intent to defraud the Government revenue. It is manifestly clear that the appellant had no fraudulent intention in depriving the Government revenue - in this case the SCN should have been issued within the normal period of the date of knowledge regarding debonding of the unit by the appellant. Since, SCN was issued beyond the period of one year, the same is barred by limitation of time. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 991
  Irregular availment of CENVAT credit - Business Auxiliary Service - the credit was denied only on the basis that the input services were for post-removal and post export activities of the appellant - Held that: - The fact that the appellant claimed M/s.Agility Logistics Pvt. Ltd. India having registered office in India provided various services have not been dealt with - the denial of credit was based on the certain assertions and presumptions and not based on any categorization of input services and examination of the provisions of Cenvat Credit Rules, 2004. The appellant did provide details of the services availed by them, which they claimed included the services provided M/s.Agility Logistics Pvt. Ltd. India. The lower authorities did not examine the issue in factual context and proceeded to deny only on the basis of the certain presumptions - appellant shall be provided an adequate opportunity to present their side of the case along with supporting evidences - appeal allowed by way of remand.

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• 2018 (3) TMI 990
  CENVAT credit - construction service - denial on the ground that construction service was specifically excluded from the eligible input service w.e.f. 1.42011 by an amendment - Held that: - Admittedly, the construction services commenced and were provided much before even the amendment was introduced on 1.4.2011 if at all, a small portion of service could have been rendered after 1.4.2011 - the amendment carried out w.e.f. 1.4.2011, has no implication in the present case, as the services have been availed and paid for prior to the said date. The credit was availed on 30.04.2011 by itself cannot be the reason for denial. This much has been clarified by the Board also vide their circular dated 29.04.2011. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 989
  Cenvat credit - input services - Event Management Services - denial on account of nexus - Held that: - the family day function, which is generally celebrated once in a year for families of the workers employed in the factory, certainly motivates the workers to enhance their productivity for the company. In that circumstance, the activity of family day function is related to business activity of the respondent - the respondent is entitled to avail the Cenvat credit of Event Management Services for family day function - appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 988
  Valuation - physician samples which are distributed free as part of marketing strategy, or as a gift or donation to doctors - The appellants are seeking to apply Rule 11 read with Rule 8 whereas Revenue is seeking to apply Rule 11 read with Rule 4 of the Central Excise Rules. Held that: - the physician samples are not sold by the appellants but are cleared free cost. It is not the appellant's case that any of the Rule 4 to 10 of the Central Excise Valuation (determination of price of excisable goods) Rules 2000 are directly applicable. Since no transaction value available, the assessment cannot be done under Section 4 (1) (a) and the assessment has to be done under Section 4 (1) (b). The assessment cannot be done under Section 4A as the said goods are not marked with MRP. It is apparent that neither Rule 4 nor Rule 8 of the Central Excise Valuation (determination of price of excisable goods) Rules, 2000 are directly applicable to the situation and both the rules have to be applied as reasonable alternatives with suitable adjustments in terms of Rule 11 of the Central Excise Valuation (determination of price of excisable goods) Rules, 2000 - In the instant case, it is seen that identical goods different only in respect of size of packing and marking of MRP, are being assessed under Section 4A of the Central Excise Act and such comparable value after suitable adjustments can be adopted for the purpose of assessment of physician samples in terms of Rule 4 of Central Excise Valuation (determination of price of excisable goods) Rules, 2000. This does not amount to application of Section 4A of the Central Excise Act to physician samples. Appeal dismissed - decided against appellant.

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• 2018 (3) TMI 987
  Exemption/refund of education cess and higher education cess paid on final products cleared by them - Held that: - procedure for return of goods and re-clearance was clearly cover by the provisions of Central Excise Rules, 2002, and the appellants followed the same. There is no allegation of violation of any provision of said Rule or above mentioned notification. In the absence of any contrary legal provision, the concession available under N/N. 56/2002 on payment of duty on the goods cleared by the appellants, cannot be denied - the appellant/assessee shall be eligible for refund/re-credit of education/higher education cess. Valuation - inclusion of outward freight element - Held that: - The refund/re-credit with reference to the value attributable to outward freight is not available to the appellant assessee. Appeal allowed in part.

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• 2018 (3) TMI 986
  CENVAT credit - whether credit is admissible on the MS items etc. used for fabrication and erection of structural support of capital goods? - Held that: - the jurisdictional High Court in the case of India Cements [2015 (3) TMI 661 - MADRAS HIGH COURT] as well as in the case of thiru Arooran Sugars Ltd. [2017 (7) TMI 524 - MADRAS HIGH COURT] has held that credit is admissible on MS items, HR sheets etc. used for fabrication of capital goods / structural supports of capital goods - credit allowed. Whether the credit is admissible on welding electrodes and tubes and pipes? - Held that: - The very same issue was considered by the Hon’ble Apex Court in Ramala Sahkari Chini Mills Ltd. Vs. Commissioner of Central Excise, Meerut [2010 (11) TMI 34 - SUPREME COURT OF INDIA], wherein the meaning of the word 'includes' was analysed by the Hon’ble Larger Bench of the Supreme Court and held that the said words used in the definition of inputs does not have restricted meaning. The amendment in the definition of inputs restricting the use of MS items for structural support of capital goods was inserted only on 7.7.2009 - the goods on which credit is availed was received in the factory prior to 7.7.2009. On the date of receipt of goods the restriction brought forth by the amendment dated 7.7.2009 was not in existence - credit allowed. Appeal allowed - decided in favor of appelalnt.

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• 2018 (3) TMI 985
  Reversal of Cenvat Credit - Non-payment of amount on monthly basis as per the provisions of Rule 6(3A) of Cenvat Credit Rules - demand of an amount equal to the 10% of the value of the exempted goods under sub-rule (3)(i) of Rule 6 of the CCR - Held that: - considering that the intimation regarding closing balances was submitted within three days of filing their option, it appears that the same has been done within the reasonable period and the Revenue s contention in this regard is not tenable - the Board s Circular dt. 09.05.2008 laid down that the calculation of Cenvat credit attributed to inputs is to be done on the basis of actual consumption of inputs used and the quantification may be made based on the stores/production records maintained by the manufacturer. Since, the appellants have done the same on actual monthly basis and a certificate from the Chartered Accountant was submitted at the end of the year, the Revenue is not prejudiced by the approach based on actual consumption in accordance with Board s Circular dt. 09.05.2008. Tribunal in the case of M/s Mercedes Benz India (P) Ltd vs CCE, Pune-I [2015 (8) TMI 24 - CESTAT MUMBAI] has held that we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 984
  Manufacture - whether blending of duty paid branded motor spirit with multifunction additives would amount to manufacture in terms of Section 2(f) of the Central Excise Act, 1944? - Held that: - the issue already stands decided in favour of the assessee’s in the case of Bharat Petroleum Corporation Ltd. vs. CCE [2009 (2) TMI 170 - CESTAT, NEW DELHI], wherein it was held that the activity will not amount to manufacture - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 983
  Liability of duty - extended period of limitation - construction of supporting structures such as gantry girders, rails, columns, civil foundation footings, etc. - Whether such structures are excisable goods and whether excise duty is liable to be paid on such goods under CET 7308 90 10? Held that: - The issue came to be decided against the appellant only with the decision of Larger Bench in the case of Mahindra & Mahindra [2005 (11) TMI 103 - CESTAT, NEW DELHI]. The merit having been settled against the appellant, the excise duty is liable to be paid on the goods fabricated by the appellant. However, we note that there were conflicting views of different Benches of the Tribunal which came to be decided only with the issue of decision of the Larger Bench. Hence, it will not be fair on the part of the Revenue to take the view that appellant has suppressed the facts in the present case. The Revenue was not justified in invoking the suppression clause for making the demand for extended period - once the issue is settled on merits, the appellant will be liable to pay duty only for the period falling under the normal time limit from the date of issue of show-cause notice. Demand is upheld for the period falling with the normal time limit - adjudicating authority is directed to re-quantify the demand - appeal allowed in part.

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• 2018 (3) TMI 982
  CENVAT credit - manufacture of herbal extracts, spices extracts, capsules and tablets which are known as food supplements - The department was of the view that the appellant was entitled to the benefit of N/N. 115/75-CE dated 30.4.1975 - Held that: - it will not be correct to take the view that the appellant’s industry falls within the categories of industries listed out in the Schedule to the Notification. The fact that solvent extraction is a process which is utilized within the factory cannot bring the factory within the purview of an industry such as oil mill and solvent extraction industry. So, prima facie, it appears to us that appellant may not be eligible for the N/N. 115/75 ibid during the disputed period. The CENVAT credit availed by the appellant already stands reversed at the time of making payment of duty on clearance of final products. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 981
  Valuation - toilet soaps exclusively to the CSD Canteens, under the Ministry of Defence - requirement to affix MRP - Section 4A of the CEA - Held that: - the Tribunal in the case of Charms Cosmetics Pvt. Ltd. [2017 (3) TMI 1129 - CESTAT MUMBAI], where it was held that A ‘maximum retail price’ is affixed on the impugned package does not, of itself, render the goods liable to comply with the provisions of the law relating to ‘maximum retail price’ - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 980
  Reduction of penalty u/r 25 of CER, 2002 - intent to evade duty not present - Held that: - the duty has been paid by the respondent along with interest and there was no intention to evade duty and therefore, the imposition of penalty under Rule 25 is not warranted. Penalty u/r 27 - Held that: - there is no infirmity in imposing the penalty under Rule 27 which is a general penalty for committing violation of a Rule - penalty upheld. Appeal allowed in part.

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• CST, VAT & Sales Tax

• 2018 (3) TMI 979
  Assessment of escaped turnover - Time limitation - whether the provisions contained in sub-section (1) of Section 25 of the Act as amended from 01.04.2017, could be availed of by the competent authority for assessing the escaped turnover of the dealers under the Act for the year 2011-12? - Held that: - prior to the Finance Act, 2017, the time limit prescribed for initiating proceedings for assessing the escaped turnover of a dealer under sub-section (1) of Section 25 of the Act was five years - The plain meaning of the words used in the third proviso to subsection (1) of the Act indicates beyond doubt that the period fixed for proceeding to determine the turnover of the dealers which has escaped assessment to tax, which expires on 31.03.2017, has been extended upto 31.03.2018, in terms of the said proviso. In the light of the said provision, the third respondent is certainly entitled to initiate proceedings for assessing the escaped turn over of the petitioner for the year 2011-12 before 31.3.2018. Petition dismissed.

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• 2018 (3) TMI 978
  Validity of assessment order - smuggling - the challenge against Exts.P1 and P2 notices is on the ground that the same are issued without complying with the directions issued by the Appellate Tribunal in Ext.P3 order and this Court in Ext.P8 judgment. Held that: - Since it was contended by the petitioner in the appeals and second appeals preferred against the assessment orders that proper enquiry was not conducted by the competent authority before making huge additions on that ground in their turnover, the Appellate Tribunal ordered the assessing authority to pass fresh orders after conducting an independent enquiry. It is seen that later when the petitioner complained that steps are being taken to complete assessments without providing them the copies of the materials proposed to be used against them, this Court, in terms of Ext.P8 judgment, directed the assessing authority to provide copies of all such materials. If as a matter of fact, the assessing authority has issued the impugned notices without complying the directions issued by the Tribunal in Ext.P3 order and this Court in Ext.P8 judgment, it is for the petitioner to challenge the assessment orders on that ground before the appellate authority. Petition is dismissed being one instituted without any bonafides.

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• 2018 (3) TMI 977
  Penalty u/s 40(2) of the TNVAT Act - TDS amount recovered and remitted by the contractee - adjustment of TDS towards penalty - Held that: - when the assessment proceedings were made, the petitioner was able to convince that the Assessing Officer by records that the transaction done by the petitioner is entitled for exemption which plea was accepted and assessment was completed. Therefore, the respondent could not have levied penalty at the first instance and could not have adjusted the tax which was deducted at source by the contractee and remitted to the respondent towards the petitioner's account - In fact, the respondent should have refunded the amount to the petitioner as a consequence of holding that the petitioner is eligible for exemption of the contract receipt. The levy of penalty and the adjustment of TDS towards the said penalty is illegal - petition allowed - decided in favor of petitioner.

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• 2018 (3) TMI 976
  Penultimate sale - whether the purchased goods and the exported goods are one and the same for the purpose of claiming penultimate sale exemption under Section 5(3) of the Central Sales Tax Act? - Held that: - a constitution Bench of the Apex Court, in the case of State of Karnataka Versus Azad Coach Builders Pvt. Ltd. and another [2010 (9) TMI 879 - SUPREME COURT OF INDIA] has held that When the transaction between the assessee and the exporter and the transaction between the exporter and foreign buyer are inextricably connected with each other, in our view, the "same goods" theory has no application, assessee is entitled to exemption under section 5(3) of the CST Act - petition allowed - decided in favor of petitioner.

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• 2018 (3) TMI 975
  Sale of property for recovery of sales tax arrears - by virtue of the impugned notice, the first respondent seeks to proceed against the immovable property owned by the defaulting Company for recovery of the sales tax dues - Held that: - The property, having been sold by the Official Liquidator pursuant to the order passed in Winding Up proceedings and the sale, having been held pursuant to the orders by this Court, proper remedy available for the respondent/Department is to approach the Official Liquidator, by way of a Claim Petition, and the respondent/Department is not justified in proceedings against the petitioner, who is a bona fide purchaser, for valuable consideration. It may not be necessary for this Court to set aside the impugned proceedings, but, it would suffice to hold that the impugned proceedings cannot be enforced against the petitioner or the property purchased by them, leaving it open to the Commissioner of Sales Tax Department to proceed against the defaulting Company - petition disposed off.

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