TMI Tax Updates - e-Newsletter
March 22, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Securities / SEBI Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

News

1. Income Tax Department conducts searches in Mumbai

2. 20 States implement ease of doing business reforms

3. Release of publication “Handbook on Ethics for Insolvency Professionals: Ethical and Regulatory Framework”

4. CCI approves acquisition of 51% of the equity share capital of NESCO Utility by Tata Power Company Limited from Grid Corporation of Odisha Limited

5. Customs Officials seize 21 lakh peacock tail feathers

Notifications

Customs

1. G.S.R. 201 (E) - dated 19-3-2021 - ADD

Corrigendum - Notification No. 14/2021-Customs (ADD), dated the 18th March, 2021

DGFT

2. S.O. 1266 (E) - dated 19-3-2021 - FTP

Central Government notifies the annual quota for the fiscal year 2021–22 items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-1 (Import Policy)

3. S.O. 1261(E) - dated 19-3-2021 - FTP

Central Government partial modification of Notification S.O. 3446(E) dated 1st October, 2020

GST - States

4. FTX.56/2017/Pt-IV/57 - dated 11-1-2021 - Assam SGST

Amendment in Notification No. FTX.56/2017/Pt-III/339 dated the 30th December, 2019

5. FIN/REV-3/GST/1/08 (Pt-I) (Vol II)/40 - dated 8-3-2021 - Nagaland SGST

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

6. CT/LEG/GST-NT/12/17/108 - 01/2021 - dated 28-2-2021 - Nagaland SGST

Seeks to extend the time limit for furnishing of the annual return

7. FIN/REV-3/GST/1/08 (Pt-1) (Vol II) 39 - dated 23-2-2021 - Nagaland SGST

Seeks to notify persons to whom provisions of sub-section 6B or sub-section 6C

8. 8899- FIN-CT1 -TAX- 0002/2020 - dated 17-3-2021 - Orissa SGST

Notification to implement e-invoicing for the taxpayers having aggregate turnover exceeding ₹ 50 crore from 1st April, 2021

9. F.1-11 (91)-TAX/GST/2020(Part-V) - dated 12-3-2021 - Tripura SGST

Seeks to extend the time limit for furnishing of the annual return

10. F.1-11(91)-TAX/GST/2020 (PART- VI) - dated 9-3-2021 - Tripura SGST

Seeks to specify the class of persons who shall be exempted from Aadhar authentication.

11. 125/2021/1(120)/XXVII(8)/2020/CT-01 - dated 15-2-2021 - Uttarakhand SGST

Uttarakhand Goods and Services Tax (Second Amendment) Rules, 2021

12. 123/2021/6(120)/XXVII(8)/2020/CT-92 - dated 15-2-2021 - Uttarakhand SGST

Regarding appointing 1 jan 2021as the date on which the provision of section 3,4,5,6,7,8 9, 10 and 15 of Uttarakhand Goods and Services Tax (Amendment) Act, 2020 (Act No. 25 of 2020) shall come into force.

13. 16/2021/6(120)/XXVII(8)/2020/CT-89 - dated 7-1-2021 - Uttarakhand SGST

Waiver of penalty for non-compliance of the provisions of notification No. 331/2020/5(120) /XXVI(8)/2020/CT-14 dated 20th May, 2020

14. 15/2021/5(120)/XXVII(8)/2020/CT-91 - dated 7-1-2021 - Uttarakhand SGST

Amendment in Notification No. 344/2020/5(120)/XXVII(8)/2020/CT-35 dated 20th May, 2020

Circulars / Instructions / Orders

DGFT

1. 44/2015-20 - dated 19-3-2021

Implementation of MoU between India and Mozambique for import of pigeon peas from Mozambique

Highlights / Catch Notes

GST

• Advance Payment Marks GST Time of Supply, Confirms Authority; Aligns with Legal Provisions on Liability Timing.

  Case-Laws - AAAR : Time of supply - Absolute control of the money received in advance - The law is crystal clear that once any advance amount is received towards provision of any service that will be treated as the time of supply. We, therefore, opined that the Authority has rightly ruled that the time of receiving of advance payment will be time of supply with reference to discharge of GST liability. - AAAR
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• Court Rules No Tax on Alleged Concealed Iron Scrap Turnover if Transactions Have Invoices and E-Way Bills Despite Discrepancies.

  Case-Laws - HC : Levy of tax - concealed turnover of iron scrap - non-production of books of accounts by the petitioner - discrepancy in the GSTR-3B and GSTR-2A or not - once the revenue authority accepted, even if impliedly, that the transaction were covered by regular invoices and those details had been uploaded on the web portal by issuing e-way bills, merely because there may have been existed certain discrepancies, the transaction cannot be said to be one falling under the category of undisclosed turnover - HC
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• Court Orders Reopening of Portal for TRAN Declaration u/s 140(3) CGST Act; Petitioner Granted Relief.

  Case-Laws - HC : Seeking reopening of portal for filing TRAN Declaration form - Section 140(3) of the CGST Act - In the present case also, the petitioner has made out a clear case for grant of relief. The third respondent is said to be the nodal officer. The respondents 2 and 3 are directed to facilitate the uploading of Form TRAN-1 by the petitioner as originally prayed for by her - HC
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Income Tax

• Court Rules Insufficient Grounds for Reopening Assessment; Directs Officer to Reconsider Objections u/s 147 for 2015-16.

  Case-Laws - HC : Reopening of assessment u/s 147 - Rejection of objections of the assessee - The stance of the Assessing Officer leads this Court to prima facie believe that the Assessing Officer had no good reason to issue the impugned notice for reopening. Had the Assessing Officer been more pro-active, he would have realized upon looking into the objections raised by the writ applicant that issuing notice for the assessment year 2015-16 could be a mistake. - AO directed to consider the objections raised by the assessee afresh - HC
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• CSR Provision Disallowed u/s 115JB: Funds Lack Defined End-Use, Not an Ascertained Liability for Tax Deduction.

  Case-Laws - AT : Disallowance of provision of CSR u/s 115JB - provision made for CSR - In the present case, how the amount ear-marked for spending towards the CSR obligation will be spent is “not certain”, “clear” or “definitely known”. At best, it is just an amount which has been set aside for being spent towards Corporate Social Responsibility but without any further certainty of its end-use. Thus, it cannot be said that the liability is an ascertained liability. - AT
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• ITAT orders Assessing Officer to issue separate orders for assessments u/ss 143(3) and 147. Combined order vacated.

  Case-Laws - AT : Reopening of assessment u/s 147 - Earlier, ITAT remanded the matter back requesting the AO to provide reasons for initiating reassessment proceedings. - AO must have passed distinct and separate orders giving effect to the Tribunal’s orders which is emanating from the assessment order passed u/s. 143(3) and fresh reassessment order which is emanating from reassessment notice dated 23.3.2016. As such, we vacate the combined assessment order dated 29.12.2016 passed u/s. 143(3) r.w.s. 147 r.w.s. 254 of the Act and direct the AO to pass distinct and separate assessment orders one in respect of order giving effect to the Tribunal’s orders emanating from the assessment order u/s. 143(3) and another in respect of reassessment order u/s. 143(3) r.w.s. 147 of the Act. - AT
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• Interest u/s 234A Not Applicable Without Assessment u/ss 143(3), 144, or 147 Due to No Tax Return Filed.

  Case-Laws - AT : Interest u/s 234A(1) or as per Sec. 234A(3) - It has categorically been mentioned in sub-section (3) of Section 234A of the Act that provisions of said sub-section can only be invoked in the case where the completion of assessment U/s 143(3)/144 or 147 of the Act takes place, but admittedly in the present case, no return was filed. There was no occasion for completion of the assessment under the above provisions, therefore, the assesse cannot take benefit of sub-section (3) of Section 234A of the Act. - AT
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• Tax Authorities Wrongly Dismiss Assessee's Claim on Business Use of Properties; Decision Reversed, Income Reclassification Ordered.

  Case-Laws - AT : Income from house properties OR business income - By simply sitting in the office, AO just assigned the reason that I don’t agree with your submission. - the ld.Revenue authorities are not justified in rejecting the claim of the assessee that house properties were used for the purpose of business. This claim was rejected without making any investigation. Therefore, we reverse the finding of both the authorities and direct the AO not to assess house property income. - AT
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Customs

• Matter Referred to Larger Bench for Review After Single Member Bench Disagrees with Division Benches' Opinions.

  Case-Laws - AT : Reference the matter to the larger bench of 3 members by the Single Member Bench - Even if the learned Member hearing this appeal found it difficult to accept the view taken by the Division Benches of the Tribunal, then too the matter could have been placed only before two Members of the Tribunal, who could then have examined whether the matter require re-consideration by a Larger Bench of three Members of the Tribunal. - AT
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Service Tax

• Air Travel Agent Services Classified u/s 65A, Incentives for Achieving Targets Not Taxed as Business Auxiliary Services.

  Case-Laws - AT : Levy of Service Tax - Incentive received - (i) the air travel agent is promoting its own business and is not promoting the business of the airlines; - (ii) the air travel agent is not promoting the business of the CRS Companies; - (iii) in any view of the matter, the classification of the service would fall under “air travel agent” service and not “BAS” in terms of the provisions of section 65A of the Finance Act; and - (iv) the incentives paid for achieving the targets are not leviable to service tax. - AT
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• CENVAT Credit Reversal Not Required for Services in Jammu & Kashmir u/r 2(e)(1) Due to Partial Tax Exemption.

  Case-Laws - AT : Reversal of CENVAT Credit - services provided to the service recipient located in the state of Jammu & Kashmir - As per Rule 2(e)(1), the taxable service, which is exempt from the whole of the service tax leviable thereon, is an exempted service. It is not the case of any side that the service which has been provided under the state of Jammu & Kashmir has been exempted as whole. Therefore, the said provision is not applicable to the facts of this case. - Credit not required to be reversed - AT
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Central Excise

• Excise Duty Refund Denied Due to Time Limits; Misapplication of Clause (ec) Overturned for Export-Related Refund.

  Case-Laws - AT : Refund of excise duty paid - denial on the ground of time limitation - The Commissioner (Appeals) has wrongly invoked the provision of Clause (ec) for denying the refund on the ground that the refund has arisen on account of the order passed by the Commissioner in appeal whereas in fact the refund has arisen on account of export of goods and the Department having accepted the order of the Commissioner (Appeals) dated 27/07/2015 should have refunded the amount in cash to the appellant. - AT
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• Appellant Seeks Refund of CENVAT Credit Reversed Post-Audit, Claims It Was a Deposit, No Initial Protest Made.

  Case-Laws - AT : Refund of CENVAT Credit - As audit team raised the objection, the appellant reversed the said amount, the matter ends. Later on, after almost three years they filed refund claim saying that the said amount is to treated as deposit as they were not required to pay said amount. There is no judicial pronouncement on the issue whether they were required to reverse the Cenvat credit or not and they have not made any protest that they are not required to reverse the amount. - AT
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Case Laws:

• GST

• 2021 (3) TMI 802
  Time of supply - Deposit Works being executed by the applicant - whether it is the time of receipt of funds from the client government department or the time when expenditure incurred towards execution of the work is debited to Deposit Works account? - value of supply under both situations - Challenge to AAR decision - Authority of Advance Ruling has ruled that the value of the supply, on the advance payment received by the applicant, will be the amount of advance received by the applicant towards that particular work/supply. HELD THAT:- Apart from entrusted work of executing housing and improvement schemes in the State, the applicant may also undertake the execution of any housing or other building project at the request of the State Government or, with the previous approval of the State Government, at the request of any other person on such terms and conditions as may be agreed upon. This work is known as Deposit Work . As per the appellant the funds required for execution of such projects are provided entirely by the Government, generally in lump sum before the start of the work string with certain restrictions viz. the funds cannot be diverted to any other project and any interest accruing from these funds will be paid back to the Government by depositing it in the relevant Head of Accounts. Whether the advance received by the appellant, for the said deposit work, is to be treated as Advance Payment received for the said work or as Deposit ? - HELD THAT:- As per the appellant the money received for the said deposit work to be treated as deposit in terms of proviso of Sub Section (31) of Section 2 of the CGST Act, 2017. Absolute control of the money - HELD THAT:- Advances are generally given so that the work get completed smoothly without any hindrances and may not get delay due to lack of fund. Restrictions regarding use of advance are normally attached so that the amount cannot be diverted for any other project and to avoid any delay in timely completion of the project - any condition/restrictions attached with the advance do not alter its character, it remains advance which later on get adjusted in payment once bills /invoices are issued). Interest paid back to the Government - HELD THAT:- As per the definition of Deposit Work given in the Chapter 2 of Financial Handbook, Vol-VI, Deposit work are those works which are assigned to government construction agencies for execution in such capacity. IN such case, the funds are provided by the Government through the department for whom the building or any other structure is to be constructed - as per the interest payment challans provided by the appellant the interest amount is being credited to the Government account and not in the account of the service recipient agency. The law is crystal clear that once any advance amount is received towards provision of any service that will be treated as the time of supply. We, therefore, opined that the Authority has rightly ruled that the time of receiving of advance payment will be time of supply with reference to discharge of GST liability. The Authority of Advance Ruling has correctly ruled that the value of the supply, on the advance payment received by the applicant, will be the amount of advance received by the applicant towards that particular work/supply - ruling of AAR upheld.

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• 2021 (3) TMI 800
  Levy of tax - concealed turnover of iron scrap - non-production of books of accounts by the petitioner - discrepancy in the GSTR-3B and GSTR-2A or not - HELD THAT:- Once the revenue authority admits that the invoice and the e-way bills relied upon by it, had been issued in regular course, it is difficult to imagine how the appeal authority could have reached a conclusion that the goods sold or purchased against those invoices were unaccounted for. The invoice is primary evidence of the transaction. Unless the revenue authority disputes it s genuineness, it cannot be lightly overlooked. Then, in the present case, the revenue authorities further admit to the issuance of the e-way bills against the aforesaid invoices. Therefore, the transaction was not only made against the regular invoice but also the details of the transaction were uploaded on the portal of the revenue authority. The alleged discrepancy in GSTR-3B and GSTR-2A referred to by the assessing authority did not even find favour with the appeal authority, inasmuch as, it did not refer to the same in the impugned order. Therefore, that part of the submission advanced by learned Standing Counsel cannot be accepted - Petition allowed.

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• 2021 (3) TMI 794
  Release of confiscated goods alongwith truck - section 130 of the Central Goods and Services Tax Act, 2017 - HELD THAT:- The final order of confiscation under Section 130 of the CGST Act, 2017 has been passed. In such circumstances, the writ applicant relegated to challenge such order of confiscation by preferring an appeal before the appellate authority under Section 107 of the Act. As the truck has already been released by way of the interim order, nothing further requires to be adjudicated in the present matter - application disposed off.

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• 2021 (3) TMI 791
  Seeking reopening of portal for filing TRAN Declaration form - Section 140(3) of the CGST Act - HELD THAT:- Issue covered in the case of M/S. CHECKPOINT APPAREL LABELING SOLUTIONS INDIA PRIVATE LIMITED VERSUS THE COMMISSIONER OF GST CENTRAL EXCISE, 1. THE COMMISSIONER OF GST CENTRAL EXCISE, THE SUPERINTENDENT OF CENTRAL TAX (CGST), THE NODAL OFFICER GST GRIEVANCES, GOODS AND SERVICE TAX NETWORK [ 2020 (8) TMI 209 - MADRAS HIGH COURT ] where it was held that The exchange of communications between 28.12.2017 and 01.01.2020 reveal that the petitioner has been diligent in making efforts to open the portal and upload the forms and the respondents are directed to do the needful forthwith to enable the petitioner to upload the requisite forms. In the present case also, the petitioner has made out a clear case for grant of relief. The third respondent is said to be the nodal officer. The respondents 2 and 3 are directed to facilitate the uploading of Form TRAN-1 by the petitioner as originally prayed for by her - application allowed.

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• Income Tax

• 2021 (3) TMI 798
  Reopening of assessment u/s 147 - case of the department that it is in receipt of specific information that the writ applicant is involved in the accommodation entries through the Venus Group - stance of the writ applicant before the Assessing Officer while putting forward his objections to the impugned notice was that the writ applicant had actually received loan during the F.Y. 2011-12 and 2012-13 i.e. A.Y. 2012-13 and 2013-14. During the A.Y. 2015-16, the said loan was repaid in installments through the RTGS - whether the impugned notice of reopening issued under Section 148 of the Act should be quashed and set aside ? - HELD THAT:- Assessing Officer while disposing of the objections stated that the objections raised by the writ applicant would be examined at the time of reassessment proceedings. The Assessing Officer failed to assign any good reason why there was no merit in any of the objections raised by the writ applicant to the notice of the reopening. We are of the view that the Assessing Officer failed to exercise his jurisdiction vested in him for the purpose of dealing with the objections raised by the writ applicant. On receipt of the reasons, the noticee is entitled to file his objections and the Assessing Officer, in turn, is obliged to dispose of the objections by passing a speaking order. Though the Assessing Officer had an opportunity at the stage of dealing with the objections to verify the contention of the writ applicant, which went to the root of the matter, he very conveniently ignored the issue by taking a stance that the factual proposition would be examined at the time of reassessment proceedings after giving sufficient opportunity to the assessee. Such stance of the Assessing Officer leads this Court to prima facie believe that the Assessing Officer had no good reason to issue the impugned notice for reopening. Had the Assessing Officer been more pro-active, he would have realized upon looking into the objections raised by the writ applicant that issuing notice for the assessment year 2015-16 could be a mistake. The aforesaid aspects prima facie leave us to note that the Assessing Officer had no material to suggest that the writ applicant had made payment in cash to Sanjeet Motor Finance Pvt. Ltd. and thereafter, received the same amount back through the RTGS. We may also refer to and rely upon the observations made by a Coordinate Bench of this Court in the case of Pal Gram Hindu Sarvajanik Trust [ 2016 (4) TMI 311 - GUJARAT HIGH COURT] . We are of the view that we should quash and set aside the order disposing of the objections passed by the Assessing Officer and remit the matter to the Assessing Officer for fresh consideration of the objections raised by the assessee. This writ application succeeds in part. The order passed by the Assessing Officer disposing of the objections dated 10.09.2018 is hereby quashed and set aside. The matter is remitted to the Assessing Officer for fresh consideration of the objections in accordance with law.

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• 2021 (3) TMI 787
  Estimation of income - bogus purchases - AO estimated the profit @ 12.5% of the disputed purchases - HELD THAT:- In the instant case, the AO has recorded the statement of Shri Hiten Parekh, proprietor of M/s Hiten Enterprises, from whom the assessee claimed to have made the purchases. In that statement, Shri Parekh has stated before the AO categorically that he had done genuine business with M/s Smita Electrical Industries (the assessee) and the entries were through Jain Sahakar Bank Ltd., Mandvi Branch, Mumbai-400003. AO could have made further inquiries/investigations to dislodge the above statement of Shri Parekh. However, the AO has not done even preliminary inquiry to verify the contentions of Shri Parekh. AO has also noted in the assessment order at page 6 that the assessee was able to correlate the purchases of materials with the allocation of raw materials and sale of finished goods. CIT(A) has rightly deleted the estimated profit @ 12.5% on purchases of Rs. 18,93,737/- from Hiten Enterprises. He has rightly restricted the disallowance to 12.5% of purchases of Rs. 26,719/- from Raj Traders.

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• 2021 (3) TMI 785
  Estimation of income - Bogus purchases - HELD THAT:- In the instant case the notice u/s 133(6) issued by the AO to the concerned parties in the address given by the assessee were returned un-served by the postal authorities with the remarks not known or no such address or left . Thereafter, the AO asked the assessee to product those parties before him to verify the genuineness of the transactions. The assessee failed to do so. It is recorded by the AO, that the assessee filed before him (i) copy of ledger accounts along with copy of purchase invoices of the specified parties, (ii) copy of bank statements evidencing payments made through proper banking channels by issuing account payee cheques in respect of all the parties, highlighting the relevant entries, (iii) chart showing the details of purchases of the alleged parties and (iv) details in respect of purchases from the abovementioned parties and the corresponding sales. As recorded by the AO, the assessee failed to file before him documents such as delivery challans, transport receipts, octroi receipts for payment of octroi duty, receipt of weighbridge for weighing of goods, excise gate pass, goods inward register. Considering the above facts and circumstances of the case and keeping in mind the nature of business of the assessee which is trading in ferrous and non-ferrous metals, we are of the considered view that estimating the profit @ 6% on the disputed purchases would be proper. Therefore, we set aside the order of the Ld. CIT(A) and direct the AO to estimate the profit @ 6% on the disputed purchase.

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• 2021 (3) TMI 784
  Rectification u/s 154 - TDS u/s 195 - Non deduction of TDS - payments made to non-residents - whether the TDS has been made by the assessee or not and since the assessee had made TDS on the payments made to non-residents, the AO ought to have deleted the disallowance to expenses made in the original order of assessment? - HELD THAT:- Issue that was remanded by the Tribunal in the order dated 03.05.2017 was only to verify whether the assessee had made TDS. The question whether expenditure can be regarded as capital in nature has already been decided by the DRP in its direction dated 29.11.2018 and the DRP has already held that the expenditure in question cannot be regarded as an expenditure of capital in nature. The aforesaid directions of the DRP has not been challenged either by the Assessee or the revenue and have become final. Therefore, the AO while giving effect to the order of the Tribunal, was not competent to go into the question as to whether the expenditure of software is capital or revenue in nature. In the light of the DRP s findings which we have already extracted above there cannot be any debate or doubt on the claim of the assessee and the AO s Order Giving Effect to the directions of the Tribunal suffer from an apparent mistake from the face of the record and therefore the proceedings under section 154 of the Act were justified. We, therefore, direct that the deduction claimed by the assessee should be allowed.

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• 2021 (3) TMI 781
  Addition with regard to accrued interest on standard assets - HELD THAT:- AR before the Assessing Officer had agreed to the addition stating that accrued interest to the extent of Rs. 9,90,000 is on standard assets and not on nonperforming assets (NPA s). Therefore, see no reason to interfere with the orders of the Income Tax Authorities and confirm the addition. Disallowance invoking the provisions of section 40(a)(ia) - failure on the part of the assessee to deduct tax at source with regard to interest payment to the assessee s members and cooperative societies - HELD THAT:- The issue raised in this appeal is squarely covered by the order of the Bangalore Bench of the Tribunal in the case of M/s.Chikmangalur Jilla Mahila Sahakara Bank Niyamitha [ 2018 (7) TMI 292 - ITAT BANGALORE] . No details with regard to payment of interest whether it is to members or to other cooperative societies have been furnished. Therefore, the matter needs to be examined by the A.O. de novo. The assessee is directed to furnish the necessary details with regard to the payment of interest whether it is paid to the members / other cooperative societies or to non-members. A.O. is directed not to make disallowance with regard to the interest paid to assessee s members and other cooperative societies. Appeal filed by the assessee is allowed for statistical purposes.

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• 2021 (3) TMI 780
  Addition on account of long term capital gain - Transfer of capital asset u/s 2(47) - Transfer in question effected in which A.Y. - HELD THAT:- As decided in MORMASJI MANCHARJI VAID [ 2001 (6) TMI 58 - GUJARAT HIGH COURT ] as pleased to give credence on the date of transfer of possession of the property by way of transferring the right, title and interest of the property and not the date of registration of the deed of conveyance. Thus, we find that the ratio laid down in the above passed by the Jurisdictional High Court has rightly been applied by the Ld. CIT(A) by holding the said transfer took place on 23.02.2011 when the possession was handed over to the purchaser relevant to the A.Y. 2011-12 and consequently deleting the addition without any ambiguity so as to warrant interference. Hence, the appeal preferred by Revenue is found to be devoid of any merit and hence dismissed. Revenue s appeal is dismissed.

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• 2021 (3) TMI 779
  Disallowance of provision of CSR u/s 115JB - whether the provision for CSR as made by the assessee can be considered as an ascertained liability or not? - HELD THAT:- Although the assessee has set-aside an amount ear-marked for spending towards the CSR obligation, how the ear-marked amount will be finally spent has not been determined. As per the Cambridge Advanced Learner s Dictionary, the meaning of the word ascertained is to make certain . In dictionary.com, the word ascertain has been described as to make certain, clear or definitely known . In the present case, how the amount ear-marked for spending towards the CSR obligation will be spent is not certain , clear or definitely known . At best, it is just an amount which has been set aside for being spent towards Corporate Social Responsibility but without any further certainty of its end-use. Thus, it cannot be said that the liability is an ascertained liability. Although, the Ld. AR has placed reliance on numerous judicial precedents, the same are distinguishable on facts as in those cases the nature/mode of expenditure ear-marked for Corporate Social Responsibility spending was very much determined and specified i.e. the nature/mode of expenditure was ascertained . Therefore, on the peculiar facts of this case we are unable to agree to the contention of the Ld. AR that the impugned disallowance u/s 115JB was an ascertained liability. We dismiss the grounds raised by the assessee.

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• 2021 (3) TMI 772
  Exemption u/s 11 - interest received from bank deposit as `Commercial or Business Income - assessee is a charitable society having registration under 12AA - HELD THAT:- The assessee had been established by Government of Karnataka vide GO No.CI-69-SPC-92 dated 22.05.1992 as a society registered under the Karnataka Societies (Registration) Act, 1960. The assessee has been established for charitable purposes and is registered u/s 12AA of the I.T.Act. The assessee acts as a single window facilitation for the purpose of establishing industries in the State of Karnataka. The income received during the assessment year 2013-2014 consisted of single window facilitation and interest on fixed deposit. AO had treated the entire income as commercial / business, falling under the first proviso to section 2(15) of the I.T.Act and denied exemption u/s 11 - AR had relied on various case laws for the proposition that when the dormant object of the assessee is not to make profit, proviso to section 2(15) of the I.T.Act does not have application. This specific plea of the assessee has not been adjudicated by the A.O. nor by the CIT(A). Therefore, we are of the view that the matter needs to be examined de novo by the A.O. Accordingly, the issues raised in this appeal are restored to the files of the A.O. The A.O. shall afford a reasonable opportunity of hearing to the assessee and take a decision in accordance with law. Appeal filed by the assessee is allowed for statistical purposes.

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• 2021 (3) TMI 770
  Combined order - Reopening of assessment u/s 147 - reassessment beyond the period of 4 years - initiation of reassessment proceedings was made based on audit objection - Earlier, ITAT remanded the matter back requesting the AO to provide reasons for initiating reassessment proceedings - CIT(Appeals) upheld the TP adjustment made by the AO, however, he directed the AO to grant depreciation at the prescribed rate applicable to furniture fittings in respect of server racks, however with regard to depreciation on networking equipment/active components etc. decided the issue in favour of assessee allowing depreciation @ 60% against which the revenue filed appeal before the Tribunal - HELD THAT:- With regard to non-grant of depreciation on the basis of additional ground in respect of depreciation on goodwill which was acquired by NXP India from Philips Electronics India Ltd. and Conexant India at the time of slump sale, the assessee filed appeal before the Tribunal. Tribunal vide order dated 12.8.2015 and 22.7.2015 remanded the matter back to the file of AO for fresh consideration. In the meanwhile, the AO vide notice dated 22.3.2016 initiated reassessment proceedings u/s. 148 of the Act for this AY 2009-10, pursuant to which the assessee filed return of income on 23.4.2016 requesting the AO to provide reasons for initiating reassessment proceedings. AO vide letter dated 27.10.2016 informed the assessee that reassessment proceedings were initiated as per BTA dated 22.7.2008 between the assessee and NF India, goodwill is not treated as part of consideration, hence the assessee made a wrong claim of deducting the goodwill from the sale consideration received. The assessee filed objections against the reassessment proceedings vide letter dated 13.12.2016 questioning the validity of the proceedings. AO overlooking the objection of the assessee, passed combined assessment order giving effect to the ITAT Order dated 22.7.2015 and 12.8.2015 and the reassessment order on 29.12.2016. Against this, the assessee filed appeal before the CIT(Appeals). The CIT(Appeals) also disposed of the appeal by the impugned order dated 22.2.2018. The assessee is in appeal before the Tribunal. AO passed a combined order giving effect to earlier orders of Tribunal with regard to original assessment and also reassessment order u/s. 143(3) r.w.s. 147 of the Act which is incorrect. AO must have passed distinct and separate orders giving effect to the Tribunal s orders which is emanating from the assessment order passed u/s. 143(3) and fresh reassessment order which is emanating from reassessment notice dated 23.3.2016. As such, we vacate the combined assessment order dated 29.12.2016 passed u/s. 143(3) r.w.s. 147 r.w.s. 254 of the Act and direct the AO to pass distinct and separate assessment orders one in respect of order giving effect to the Tribunal s orders emanating from the assessment order u/s. 143(3) and another in respect of reassessment order u/s. 143(3) r.w.s. 147 of the Act. Accordingly, the issue in dispute is remitted in its entirety to the file of Assessing Officer to pass separate assessment orders as directed above, after giving opportunity of being heard to the assessee. Appeal by the assessee is allowed for statistical purposes.

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• 2021 (3) TMI 769
  Rectification u/s 154 - Interest liability u/s 234A(1) or as per Sec. 234A(3) - assessee did not file the return of income u/s 139(1) but filed her return of income for the first time in compliance to notice u/s 148 - HELD THAT:- On perusal of the facts, we found that it is an admitted position that in the present case, the assessee had not filed any return of income either U/s 139(1) or U/s 139(4) of the Act and for the first time the return of income was filed by the assessee in response to notice U/s 148 of the Act on 11/02/2016. Since no return of income was earlier filed U/s 139(1) or U/s 139(4) of the Act, therefore there was no question of any assessment U/s 143(3)/144/147 of the Act. Therefore, for this reason alone, the assessee s case do not fall U/s 234A(3) of the Act and it is plainly covered by the provisions of Section 234A(1) explanation (3) of the Act whereas where interest is to be charged from the due date of filing of return till the date of filing of return in response to notice U/s 147 of the Act. It has categorically been mentioned in sub-section (3) of Section 234A of the Act that provisions of said sub-section can only be invoked in the case where the completion of assessment U/s 143(3)/144 or 147 of the Act takes place, but admittedly in the present case, no return was filed. There was no occasion for completion of the assessment under the above provisions, therefore, the assesse cannot take benefit of sub-section (3) of Section 234A of the Act. Provisions of rectification can only be invoked for correcting the mistake which are apparent on record and in the present case, the mistake is obvious and patent and do not involve any dispute which is debatable in nature. The decision relied upon by the ld AR is not applicable to the facts of the present case. No new facts and circumstances have been brought on record before us by the ld AR as the dispute involved in the present case is only applicability of the period of charging of interest which can be gathered on the plain reading of provisions of Section 234A(1) - Decided against assessee.

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• 2021 (3) TMI 765
  Estimation of income - bogus purchases - bench asked that if assessee is ready for 8% of the addition of total purchases than matter can be heard - HELD THAT:- It is pertinent to note here sales were not disputed by the lower authorities so we just failed to understand how purchases can be doubted. So ultimately, Ld. A.R. agreed for 8% addition of the total sales amount. We agree with the proposal of 8% of addition. Appeal field by the Assessee is partly allowed.

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• 2021 (3) TMI 764
  Disallowance u/s 14A - suo moto addition - HELD THAT:- All the Investments are liable to be considered for the purpose of making disallowance u/s. 14A irrespective of the head under which they are placed. The embargo is that only the investments yielding exempt income during the year should be considered for computing average value of investments. The Hon ble Delhi High Court in ACB India Ltd. [ 2015 (4) TMI 224 - DELHI HIGH COURT] has held that the average value of investments, for the purposes of Rule 8D(2)(iii), should be confined to those securities in respect of which exempt income is earned and not the total investments. Similar view has been taken by the Special Bench of the Tribunal in the case of ACIT vs. Vireet Investments (P) Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] - In view of the afore referred precedents, we set aside the impugned order to this extent and remit the matter to the file of Assessing Officer for recomputing the disallowance under Rule 8D(2)(iii) by considering only such investments in calculating the average value of investments, which have yielded exempt income during the year. The assessee will be allowed hearing opportunity in the fresh proceedings. It is further made clear that while computing disallowance u/s. 14A, the suo motu disallowance offered by the assessee should be accordingly reduced. Claiming deduction of Education Cess on income-tax for the year under consideration - HELD THAT:- This issue is no more res Integra in view of the judgment of Hon ble jurisdictional High Court in Sesa Goa Lt. Vs. JCIT [ 2020 (3) TMI 347 - BOMBAY HIGH COURT] in which it has been held that Education Cess is not disallowable expenditure u/s. 40(a)(ii) of the Act. Similar view has earlier been taken in Chambal Fertilisers and Chemicals Ltd. and Another. [ 2018 (10) TMI 589 - RAJASTHAN HIGH COURT] - We, ergo, direct to allow deduction for such an amount after verification. - Assessee appeal is allowed for statistical purposes.

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• 2021 (3) TMI 762
  Depreciation u/s 32(1)(ii) which is to be amortized in the five consecutive years - Assessee submitted that the difference was on account of excess of liabilities over the tangible assets and had to be treated on account of intangible asset being on account of business or commercial rights of similar nature covered under section 31(1)(ii) of the Act and the depreciation should be allowed on the same - HELD THAT:- AO was not justified in applying the ratio laid down by the Hon ble Jurisdictional High Court in Techno Shares Stock Ltd. [ 2009 (9) TMI 18 - BOMBAY HIGH COURT ] The expenditure claimed by the assessee on acquisition of the Bank is capital in nature which is corroborated by the decision of the Tribunal, Pune Bench, in M/s. Cosmos Co-operative Bank Ltd. v/s DCIT [ 2014 (1) TMI 1696 - ITAT PUNE ] wherein it has been held that the cost of acquisition was intangible in nature and it was on account of business or commercial rights of similar nature which is covered under section 32(1)(ii) of the Act. Consequently, we do not find any infirmity in the order passed by the learned Commissioner (Appeals) by allowing the claim of the assessee. We also note that the facts of the decision of the Hon ble Supreme Court in Techno Shares and Stock Ltd. [ 2010 (9) TMI 6 - SUPREME COURT ] are distinguishable in nature insofar as the facts of the present issue is concerned. Therefore, the case law relied upon by the Revenue is not applicable to the facts of the present appeal. Accordingly, the order of the learned Commissioner (Appeals) is hereby upheld by dismissing the grounds raised by the Revenue.

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• 2021 (3) TMI 761
  Penalty u/s. 271(1)(c) - bogus purchases - disallowance to an extent of 12.5% of the non-genuine purchases - HELD THAT:- It is a settled position of law that penalty cannot be levied when an ad hoc estimation is made. In this case Assessing Officer treated entire purchases as non-genuine. Ld. CIT(A) considering the evidences and various submissions of the assessee restricted the disallowance to an extent of 12.5% of the non-genuine purchases. Similar view has been taken by the Hon ble Delhi High Court in the case of CIT v. Aero Traders Pvt. Ltd. [ 2010 (1) TMI 32 - DELHI HIGH COURT ] wherein affirmed the order of the Tribunal in holding that estimated rate of profit applied on the turnover of the assessee does not amount to concealment or furnishing inaccurate particulars. In the case on hand the Ld. CIT(A) observed that the penalty was imposed based on estimation basis and following the decision in the case of Harigopal Singh v. CIT [ 2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT ] deleted the penalty levied by the Assessing Officer. Thus, we do not observe any infirmity in the order passed by the Ld. CIT(A) in deleting the penalty u/s. 271(1)(c) of the Act levied by the Assessing Officer for the Assessment Year. Grounds raised by the revenue are rejected. Appeal of the revenue is dismissed.

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• 2021 (3) TMI 760
  Rectification u/s 254 - Contention of assessee that the ITAT has felt into apparent error while upholding the disallowance of commission payment by not taking into account the document which were submitted - contention of the assessee that the ITAT has committed error in appreciating the evidences by way of paperbook which was duly submitted and tribunal mistakenly noted that no evidence has been submitted in support of the claim - HELD THAT:- As as reflected in adjudication by the tribunal as quoted in the above submissions, the tribunal has mistakenly noted that nothing has been submitted before tribunal. There is an apparent mistake inasmuch as the tribunal has missed out the paperbook submitted. Moreover, the last ground has also remained unadjudicated. Hence, agree that the order of the tribunal deserves to be recalled. Hence, the order of the tribunal is recalled. Registry is directed to fix the appeal in normal course on 17.05.2021. Issue notice to the parties. Accordingly, this miscellaneous application filed by the assessee stands allowed.

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• 2021 (3) TMI 759
  Disallowance of Transport expenses for want of evidence or details - HELD THAT:- Assessee has entered into hire contract agreement with the said JC CO which inter alia provided that the said JC CO would provide truck at a monthly rent and the total expenses of all the trips shall be incurred by the JC CO by debiting the same to the account of the assessee, and that the assessee shall provide advance to the drivers of trip during the trip. The said agreement also provided that whatever rent and expenses paid by the assessee would be credited to his account, and the net amount would be paid after deducting the commission. This agreement demonstrates that there was an understanding between two parties as to the operation, maintenance and payment of commission, therefore, the claim of the assessee cannot be doubted or disbelieved. Assessee also filed copy of ledger account of the assessee in the books of JC CO and copy of logbook showing details of various trip undertaken by the assessee. Payments made by the assessee are identifiable with the details furnished before us and also before the ld.CIT(A). It is pertinent to observe here that similar claim of the assessee was allowed by the Revenue for the earlier year, which fact has not been denied by the Revenue authorities. No sincere efforts have been put in by the ld.CIT(A) to examine the claim of the assessee, though requisite details were placed before him. After considering the facts and circumstances of the case in totality, supported by the evidences submitted by the assessee, we find that action of Revenue authorities in disallowing the claim of the assessee for transport expenses cannot be sustained. We, therefore, reverse their orders, and allow this ground no.1 of assessee appeal. Income from house properties OR business income - AO was of the view that since no proof of business activities being carried out at these premises were furnished by the assessee therefore, the assessee would not have kept the properties idle, he would have earned some income in the form of rent etc., which the assessee would have received in cash or in cheque as unaccounted money - AO accordingly estimated reasonable market rentable value of the properties and estimated income - HELD THAT:- AO was expecting that the assessee should produce some secondary evidence in the shape of letter head, electricity bills showing that the premises were used for the purpose of business. To our mind, these reasoning are fallacious. The assessee has been pleading that premises has been used for business purpose. AO should have deputed someone to inspect the sites. By simply sitting in the office, he just assigned the reason that I don t agree with your submission. This type of simple denial of the claim is not sustainable in the eyes of law. The statement of facts made by the assessee has to be rejected on the basis of some investigation. AO has rejected the statement of facts on the ground of insufficiency of evidence produced by the assessee. To some extent for an ideal situation, the assessee could be asked to produce more evidence, but pleadings cannot be rejected simply for insufficiency without investigating or inspecting site in such circumstances. We have accepted the claim of the assessee that it has been engaged in transportation business. We have allowed transportation expenses. Considering this aspect, we are of the view that the ld.Revenue authorities are not justified in rejecting the claim of the assessee that house properties were used for the purpose of business. This claim was rejected without making any investigation. Therefore, we reverse the finding of both the authorities and direct the AO not to assess house property income. Disallowance of Interest expenditure on borrowed funds claimed - HELD THAT:- Both the assessees were engaged in transportation business. They have earned professional receipts from transport business. Both the assessees were partners in the firms. They have earned share of profit from the partnership firms as well as interest income. The ld.CIT(A) has also accepted partly this pleading of both the appeals. Considering the above facts, once it is accepted that they were partners in the firm and they have income which is to be assessed as business income, then all consequential expenditure pertaining to this business are to be allowed. Taking this fact in mind, we are of the view that interest expenses claimed by both the assessees are relating to their professional activities or to the funds deployed with the partnership firms. Therefore, the expenses are to be allowed to both the assessees. We allow this ground of appeal and delete disallowances.

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• 2021 (3) TMI 758
  Claim of deprecation on goodwill - goodwill arised on amalgamation of Fame India Ltd. into Inox Leisure Ltd. - assessee submitted before the ld. CIT(A) that Assessing Officer had not at all discussed its claim of goodwill arising on account of amalgamation of its subsidiary company in the assessment order in spite of that fact that its claim of depreciation on account of amalgamation was made vide letter dated 20th January, 2016 during the course of assessment proceedings - HELD THAT:- During the course of assessment proceedings, the assessee has given a complete detail along with supporting documents demonstrating that goodwill was arised on account of amalgamation of companies, however, the Assessing Officer has not made any discussion to the claim of the assessee. At the appellate stage, the ld. CIT(A) has held in a unwarranted manner that the claim of the assessee is not permitted under the existing law on the pretext that the issue raised requires investigation and verification. We consider that the decision of the ld. CIT(A) is unjustified and he had not made any discussion to the legal findings and not substantiated his decision with any material to come to the conclusion. As per law it is required to carry out the required investigation and verification of the facts to tax the real income. In the light of the above facts and judicial findings, we direct the ld. CIT(A) to consider the claim of the assessee on merit after verification/examination of the material to be produced by the assessee with reference to claim of goodwill arsied on account of amalgamation of companies. Therefore, we restore this issue to the file of ld. CIT(A) for adjudicating the impugned issue of claim of depreciation on goodwill afresh on merit after examination as per the direction laid down in the decision of Zydus Wellness Ltd. [ 2017 (10) TMI 373 - GUJARAT HIGH COURT] . Disallowance on account of delay payment of employee contribution towards PF ESIC - not crediting the amount on or before due date as prescribed u/s. 36(1)(va) - HELD THAT:- Hon ble Jurisdictional High Court of Gujarat in the case of CIT vs. Amoli Organics P. Ltd [ 2013 (11) TMI 971 - GUJARAT HIGH COURT] held that assessee was entitled to make payment within grace period under the provident fund act and if within that grace period employees contribution have been deposited by the assessee, it cannot be said that assessee has not deposited the amount within due date prescribed under the provident fund act - we restore this issue to the file of CIT(A) for deciding afresh after examination of the claim of assessee that amount was deposited within the grace period as provided in the provident fund act. Therefore, this ground of appeal of the assessee is also allowed for statistical purposes.

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• Customs

• 2021 (3) TMI 775
  Reference the matter to the larger bench of 3 members by the Single Member Bench - learned Member hearing this appeal found it difficult to accept the view taken by the Division Benches of the Tribunal - Levy of penalty u/s 112(a) of the Customs Act, 1962 - exporter who has mis-declared the goods is located in Dubai, UAE - period 2012-13 - offence committed outside India - whether during the relevant period i.e. 2012-13, the Customs Act was applicable only to the whole of India or whether it was applicable also beyond the territorial jurisdiction of India, in which case penalty could be imposed on companies incorporated abroad? HELD THAT:- It is clear from various Constitution Bench judgments of the Supreme Court [ 2002 (9) TMI 799 - SUPREME COURT] that judicial discipline and propriety demands that a Bench of two learned Judges should follow the decision of a Bench of three learned Judges, but if a Bench of two learned Judges concludes that an earlier judgment of three learned Judges is so very incorrect that in no circumstances can it be followed, the proper course for the Bench of two learned Judges to adopt is to refer the matter before it to a Bench of three learned Judges setting out the reasons why it could not agree with the judgment rendered by three Hon ble Judges. It is only when the Bench of three learned judges also comes to a conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, that a reference to a Bench of five learned Judges would be justified. The learned Member could not have ignored the binding decision of the Division Bench of the Tribunal in SHAFEEK P.K., KERALA VERSUS CC, COCHIN [ 2015 (9) TMI 1257 - CESTAT BANGALORE] . In case the learned Member was not inclined to accept the view taken by the Division Bench that the Customs Act was applicable only within the territory of India and not beyond the territory of India prior to 29.30.2018, judicial discipline and propriety required the learned Member to make a request for the matter to be placed before a Division Bench of the Tribunal, which could then have examined whether the Division Bench decision of the Tribunal in Shafeek P.K. required any reconsideration, but that was not done. Even if there was only a decision of a learned Member of the Tribunal, then too judicial discipline and propriety required the learned Member to make a reference to a Division Bench after framing the issue(s) for determination by the Division Bench. What should have been the constitution of the Bench for deciding the reference made by the learned Member? - HELD THAT:- The learned Member hearing this appeal could have made an observation for placing the matter before a Bench of two Members of the Tribunal. Even if the learned Member hearing this appeal found it difficult to accept the view taken by the Division Benches of the Tribunal, then too the matter could have been placed only before two Members of the Tribunal, who could then have examined whether the matter require re-consideration by a Larger Bench of three Members of the Tribunal. Thus, it was not necessary for the learned Member hearing this appeal to make a reference to a Larger Bench for the reason that the Division Benches of the Tribunal have already expressed views on the issue that has been referred - The papers may be placed before the learned Member to decide the Appeal on merits.

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• Securities / SEBI

• 2021 (3) TMI 757
  Violation of the provisions of PFTUP Regulations - artificial trades - manipulative trading - there was a pattern of trading and the price of the shares went up in pre-planned manner by engaging in small trades sometimes of one share each but no explanation of the same was offered - HELD THAT:- This Tribunal held that the placing of orders in a very small number generally may point towards the possible violation of the provisions of PFTUP Regulations still it is possible that an investor observing the movement of the scrip could be placing orders in the system without any intention to manipulate the market. Finding that there is no connection of the appellants therein either with the company or with the group connected with the company it was found that merely irrational behaviour of the investor, for want of connection, it cannot be said that they were trading in manipulative or fraudulent manner Finding that the scrip of Mapro was not a miracle scrip and taking into consideration the doubtful pattern of the trades carried out by the appellant therein this Tribunal though set aside the direction to pay penalty imposed upon the appellant therein, it was held that warning to the appellant that repetition of trading of similar nature as impugned one will lead to penal consequences. All the appellants are small investors. They are admittedly close relatives. However, they are not found to be connected with any other parties involved are not anyway connected to the group entities as described in the appeal of Bharti Goyal [ 2020 (8) TMI 843 - SECURITIES APPELLATE TRIBUNAL MUMBAI] In the circumstances, the present appeal is partly allowed without any order as to costs. The direction of the adjudicating officer to pay penalty against each of the appellants is hereby set aside. Instead the appellants are warned that repetition of trading of similar nature may lead to penal consequence. The appeal is accordingly disposed of.

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• Insolvency & Bankruptcy

• 2021 (3) TMI 774
  Monthly fees payable to the Applicant under the service agreements - Will form part of the IRP Costs in terms of the IBC or not - permission to file its claims with the Respondent / Liquidator for payment of the monthly fees for the relevant period under the service agreements - right to terminate the lease agreement - HELD THAT:- The Applicant required the Corporate Debtor to cure the breach of agreement within 30 days and invoked right to terminate the agreement in case the breach was not cured within that period. Admittedly the breach was not cured by the Corporate Debtor. Hence the Leave and Licence agreement stood terminated within 30 days from the period of notice i.e. with effect from 31/05/2019. Clause 21.3 of the Leave and License agreement is clear that if the Applicant did not refund the security deposit, the Corporate Debtor would be entitled to continue to occupy the premises until receipt of the entire security amount without payment of any further license fee during the period of occupation. In view of this the Respondent was not required to hand over the possession till the security deposit was refunded and also need not to pay any license fee for the premises from 1st June, 2019. The Applicant even though made elaborate pleadings, the letter dated 17/08/2019 written by the Respondent to the Applicant, was not enclosed to the Application (furnished in the reply). This letter makes it abundantly clear that the Respondent did not require the premises during the CIRP and the Applicant s insistence on the factor that the RP could utilise the premise for CIRP may not be helpful to the Applicant in aid of this Application - Applicant is not entitled to any payment with respect to the licence fee after 31st May, 2019. Since the security deposit is with the Applicant to ensure the payment of licence fee, the Applicant shall refund the security deposit to the Respondent after deducting the licence fee payable from 1st March 2019 to 31st May 2019 - application disposed off.

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• 2021 (3) TMI 771
  Validity of CIRP proceedings - Committee of Creditors came to be constituted by the IRP hastily - Operational Creditor was settled and in terms of the Settlement Agreement - HELD THAT:- It is established that immediately after passing of the impugned order, the claim of Operational Creditor was settled and in terms of the Settlement Agreement, which envisaged payment of Rs. 13,47,989/- towards full and final settlement of the claim of Operational Creditor, withdrawal application was to be filed before the Adjudicating Authority as a sequel to settlement. It is flabbergasting to find that the Committee of Creditors came to be constituted by the IRP on 16th March, 2021 so hastily though only a single claim was said to have been received by the IRP. Without commenting upon the fairness of the procedure adopted in constituting the Committee of Creditors so hastily, in view of the fact that the Operational Creditor, being the sole claimant is satisfied with the settlement of his claim in terms of the Settlement Agreement executed barely within four days of the passing of the impugned order in ex parte demonstrating that it had the capacity and will to settle the Operational Creditor s claim, we find this to be a fit case for accepting the settlement arrived at between the parties. The Corporate Debtor is released from the rigour of CIRP - Appeal disposed off.

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• 2021 (3) TMI 767
  Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Application rejected on the ground of Pre-Existing Dispute and Claims being time barred - HELD THAT:- The law with respect to date of default and limitation under IBC has been clearly laid down by the Hon ble Supreme Court in a catena of Judgements. In VASHDEO R BHOJWANI VERSUS ABHYUDAYA CO-OPERATIVE BANK LTD AND ANR. [ 2019 (9) TMI 711 - SUPREME COURT ], the Hon ble Supreme Court referring to B.K. EDUCATIONAL SERVICES PRIVATE LIMITED VERSUS PARAG GUPTA AND ASSOCIATES [ 2018 (10) TMI 777 - SUPREME COURT ] held that when the recovery certificate dated 24-12- 2001 was issued, this certificate injured effectively and completely the appellant s rights as a result of which limitation would have begun ticking. In the aforenoted Judgement it is clearly observed that the period of limitation for an Application seeking initiation of CIRP under Section 7 of the Code is governed by Article 137 of the Limitation Act and is, therefore three years from the date when the Right to Apply accrues. In the instant case, the material on record and the admitted invoices, evidence that the first unpaid debt is dated 12.03.2011 - It is significant to note that there is gap between 14.06.2012 and 02.04.2015 of almost three years. Be that as it may, the date of default is of relevance here. As the Code mandates, Section 9 Application is filed after the issuance of Demand Notice under Section 8(1) which contains the details of unpaid Operational Debt. It is also interesting to note that Part IV of the Application under Section 9 mentions the date of default as June 30, 2017 ; for an amount of Rs. 2,39,85,521.35/-. It is seen from the record that the date of first default is March 2011 and the cumulative amount claimed is Rs. 2,39,85,521.35/-. Section 9 Application emanates from the Demand Notice under Section 8(1). Both have to be read conjointly and the date of default cannot be construed to be different merely because it is differently mentioned as 2011 in Section 8 Notice and 2017 in Application under Section 9 - the argument of the Learned Counsel for the Operational Creditor that the period should be confined only from 2015 to 2017 cannot be sustained. The Tribunal cannot confine to one or other invoice if the Applicant has relied on all the invoices to arrive at the amount of Rs. 2,39,85,521.35/- in the Demand Notice under Section 8. We are of the view that the Tribunal does not have Jurisdiction in these Insolvency Proceedings to cut-short the invoices which would cause recurring dates of cause of action as it is not a suit for recovery. In the present case, the Operational Creditor failed to bring on record any acknowledgement in writing by the Corporate Debtor or its representative within three years of the date of the first default - the Application filed under Section 9 is barred by limitation. Pre-existing dispute between the parties - HELD THAT:- In the instant case, Learned Counsel appearing for the Corporate Debtor drew our attention to pages 626 to 630 of Volume III, which is a part of the Reply filed before the Adjudicating Authority wherein the email correspondence between the parties dated 21.07.2012, 18.12.2013, 31.07.2015, 18.08.2015 is reproduced. It is seen from this correspondence that it pertains to the period between 2012 to 2015 and establish that they relate to regular day-to-day issues viz. projector having been switched off , shifting of the computers systems , the costs charged for the shifting , issue regarding DG set etc. It is noted that the last Complaint about the equipment or services rendered is dated 19.08.2015. It is pertinent to mention that nowhere in this correspondence any issue with respect to training or payment of Rs. 25/- Lakhs or any other breach of the clauses of the Master Licence Agreement has been raised. The material on record and the documentary evidence filed does not establish that there was any dispute prior to issuance of the Section 8 Demand Notice or that there was any assertion of facts supported by any evidence to establish existence of a dispute. The Demand Notice under Section 8(1) dated 08.08.2017 and the Reply which was filed one month later for the very first time raises these issues - though the Application is barred by limitation there is no Pre-Existing Dispute between the parties. Appeal dismissed.

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• 2021 (3) TMI 766
  Execution of lease - Section 167 (1)(b) of the Companies Act, 2013 - leasing and alleged transfer of possession of the land - HELD THAT:- The purpose of looking at various issues connected with the signing of the lease deeds dated 03.12.2019 and 25.06.2020 and the connected circumstances has been a limited one- i.e. the interest of the company itself. The act of creating document after document of lease deed in doubtful circumstances with common director hobnobbing on both sides and declaring possession taken, and facts and documents as discussed above, are sufficient for NCLT to step in to protect property of the company from forces within, in the interest of the Company and its shareholders. Transfer of possession would require animus and also corpus. Common Directors - Respondent No. 4, with or without his son present on land of the Company would not be sufficient to show animus. Further evidence would be required. Here it appears to be instant paper possession. Fault cannot be found if NCLT did not accept the claim of possession of Appellant and passed orders. The transfer of entire substratum of Company would adversely affect the interests of its shareholders. Appeal dismissed.

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• 2021 (3) TMI 763
  Filing of separate claims by Financial Creditors for Corporate Guarantor and Principal Borrower - HELD THAT:- There is no substance in the submissions of Counsel for Respondent that case would be different if same IRP/RP is there in the two CIRPs. It would be just a matter of co-ordination between the two IRPs/RPs. Till payment is received in one CIRP, claim can be maintained in both CIRPs for same amount and representation in CoC in both CIRPs to the extent of amount due will be justified. This is the reason why Section 60 (3) provides for transfer of proceeding to Adjudicating Authority where already there is a pending proceeding. There is no question of looking into Judgments when Section 60 of IBC is clear and makes the two CIRPs maintainable in such matters. If they are maintainable, claim in both (subject to adjustments on receipts) would also be maintainable. The Respondent will consider the claim of the Appellant Borrower and appropriately deal with the Appellant as Financial Creditor in the CoC - Appeal allowed.

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• 2021 (3) TMI 756
  Entitlement (of Operational Creditor) to get copy of Information Memorandum and Resolution Plan - respondent has stated that applicant is neither a member of the CoC as stipulated under section 21 of the Code nor the applicant is entitled to attend the meeting of CoC - HELD THAT:- Since the applicant s admitted claim as an operational creditor is less than 10 per cent. of the total debt of the corporate debtor, the applicant is not entitled to get copy of the resolution plan. As far as the status of the claim of the applicant is concerned, the respondent has submitted that the claim is admitted as an operational creditor. Application dismissed.

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• 2021 (3) TMI 755
  Settlement of claims of employees under Liquidation process - revised claim filed claiming salary, LTA, bonus and gratuity - applicants submit that due to inadvertence and oversight the form-D filed in the month of January, 2019 did not include gratuity amount receivable by them from the corporate debtor - HELD THAT:- The revised claims were filed by the applicants in these applications belatedly and the resolution professional has received the claims only after the approval of the resolution plan by the CoC. Further the individual claims filed by the applicants were already admitted by the resolution professional. In view of this there is no merit in the applications filed by the applicants, accordingly both the applications are dismissed. However, this Bench during the hearing of the approval of resolution plan required the resolution applicant to come forward with some payment so that these employee applicants will get some benefits and considering the same, the resolution applicant has agreed to make a payment of Rs. 11,00,000 to the resolution professional which will be distributed to all the employees/workers equally, apart from the payment provided in the resolution plan. The resolution applicant sent to resolution professional, has confirmed and revised the plan amount accordingly - Application allowed.

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• 2021 (3) TMI 754
  Approval of Resolution Plan - applicant filed this application seeking appropriate direction to the RP to place the resolution plan of the applicant being H2 bidder before the CoC for confirmation - HELD THAT:- It is matter of record that resolution plan of respondent No. 3 was approved by a vote of approximately 82.41 per cent. voting share of the CoC members. It is to be noted that resolution plan submitted by the resolution applicant(s) are subject to deliberation of commercial wisdom of the CoC and the CoC are to consider the resolution plan(s), keeping in mind, to achieve, maximisation of value of assets of the corporate debtor , as also the value of assets of the financial creditor and the operational creditor , thereby balancing the interest of all stake holders, which is the spirit of the Code. Further, the CIRP has to be completed in time bound manner and 270 days was got over in January 28, 2020 itself. It is also matter of record that 22 days are excluded from CIRP on filing the application before the Adjudicating Authority. Pursuant to such exclusion permitted by this Adjudicating Authority, the period of 270 days was expired on February 19, 2020. Such exclusion was sought for in the interest of stake holders of the corporate debtor as CIRP was in the advance stage of finalising successful resolution applicant for CD. It is also matter of record that on approval of the resolution plan by the CoC member, an application under section 30 of the Insolvency and Bankruptcy Code has already been filed before this Adjudicating Authority for sanction of plan and same is sub judice, under such circumstances if commercial wisdom is interfered at this stage which is the prerogative of CoC, in that event, the whole process will get frustrated and the CIRP has to be started afresh, which will frustrate the very objective of the IB Code as the time is the essence of the Code. The instant application was not only premature on the date of filing, but is also devoid of merit and hence dismissed.

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• Service Tax

• 2021 (3) TMI 799
  Seeking leave of the Hon ble Court to withdraw SCN - Levy of Service tax - Legal service - HELD THAT:- The purpose underlying the petition substantially gets worked out. This petition would not be an impediment in aforesaid intended action by the Respondent. Petition disposed off.

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• 2021 (3) TMI 793
  Exempt services or not - activity of trading - period prior to 01.04.2011 - requirement of reversal of credit taken on input service - input services used directly or indirectly or in relation to the manufacture of taxable goods is eligible for credit in terms of Rule 2(1) of the Cenvat Credit Rules, 2004 or not - HELD THAT:- It is well settled in law that even quasi-judicial authority, while exercising its statutory powers, has to assign reasons and based on the reasons assigned by it, has to record the findings. In other words, the Tribunal exercising the statutory power under the Act is required to apply its mind and record the findings. In any case, if the Tribunal relies on a particular decision, it is duty bound to examine, by assigning reasons, as to how the ratio of the aforesaid decision applies to the fact situation of the case. It is evident that the Tribunal has merely relied on the judgment of the High Court of Madras in the case of M/S. FLSMIDTH PVT., LD. [ 2014 (12) TMI 699 - MADRAS HIGH COURT ] and has not even assigned any reason as to how the aforesaid decision applies to the fact situation of the case. Thus, the order passed by the Tribunal is cryptic and suffers from the vice of non-application of mind. Matter remanded to the Tribunal for fresh adjudication after considering the submissions made at the Bar and to decide the matter by a speaking order - appeal allowed by way of remand.

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• 2021 (3) TMI 786
  Refund of service tax paid - time limitation - quarter April 2017 to June 2017 as per Rule 6(1A) of Service Tax Rules, vide challan Nos. 1420 and 9589 in June 2017 - HELD THAT:- Following the introduction of GST w.e.f. 01.07.2017, the appellant on 10.01.2018 filed a refund claim of Rs. 3,79,85,793/- being excess advance tax lying to their credit in terms of transitional provisions in Section 142 of the CGST Act 2017 deposited as service tax in advance under Rule 6(1A) of the Service Tax Rules, 1994 - as per the decision in the case of FLUID CONTROLS PVT. LTD. VERSUS COMMR. OF C. EX. S.T., PUNE-I [ 2018 (3) TMI 1857 - CESTAT MUMBAI] and decision in the case of R.S. CHEMICALS VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [ 2017 (4) TMI 884 - CESTAT ALLAHABAD] , time bar of Section 11B(1) of the Central Excise Act is not applicable to advance/deposits, wrong remittance of tax not payable and other payments which are not in the nature of taxes or duties. The other ground for rejection of the claim was that the appellant has not given intimation of advance deposit of Rs. 15,00,000/- as required under Rule 6(1A) of Service Tax Rules, 1994. This issue has been considered by various Benches of the Tribunal and has been consistently held to be a procedural formality and merely non-observance of the procedure laid down in the said Rule cannot be a ground for denial of substantive benefit - as per Section 142(1) of CGST Act which provides for cash refund in situations specified in Section 11B(2) of the Central Excise Act and the appellant s case is squarely covered by Clause B of proviso to Section 11B(2) which provides for cash refund of balance in account current. Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 783
  Extended period of limitation - time period for issuance of SCN - whether for the period 1.7.2012 to 31.3.2013, the demand is sustainable by issuance of show cause notice dated 6.4.2018 or not? - HELD THAT:- In terms of section 73 of Finance Act, 1994, the demand can be raised within five years by invoking the extended period of limitation. Admittedly, in this case in hand, the show cause notice dated 6.4.2018 was issued for the period 1.7.2012 to 31.3.2013 which is beyond the period of five years for the said demand. The Commissioner (Appeals) has invoked the Limitation Act. The said provisions are not applicable to the facts of the present case. As the limitation prescribed for the matter is governed under section 73(1) of the Finance Act, 1994, therefore, the provisions of Finance Act, 1994 are applicable in the present case for limitation. Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 778
  Reversal of CENVAT Credit - services provided to the service recipient located in the state of Jammu Kashmir, which is exempted service - appellant is not maintaining separate account of inputs/input service used for providing exempted and taxable service - appellant has not provided any documentary evidence such as C.A. certificate with regard to payment of service tax - appellant has cleared inputs as such but has not reversed the cenvat credit availed on these inputs and no documents have been provided by the appellant in respect of reversal of the cenvat credit. HELD THAT:- As per Rule 2(e)(1), the taxable service, which is exempt from the whole of the service tax leviable thereon, is an exempted service. It is not the case of any side that the service which has been provided under the state of Jammu Kashmir has been exempted as whole. Therefore, the said provision is not applicable to the facts of this case. On consideration of the decision in the case of Adecco Flexione Workforce Solutions Ltd [ 2015 (11) TMI 1047 - CESTAT BANGALORE ] the period of dispute is year 2008-09, whereas the definition of exempted service under Rule 2(e) of the Cenvat Credit Rules, 2004 has been introduced on 20.06.2012; therefore, the said decision is not applicable to the facts of this case. Further, in the case of Ramboll Imisoft Pvt Ltd [ 2016 (6) TMI 1071 - CESTAT HYDERABAD ], this Tribunal has examined the issue in details and examined the definition of exempted service under Rule 2(e) of the Cenvat Credit Rules, 2004 and held that Section 64 of the Finance Act is not applicable to the state of Jammu Kashmir. The appellant is providing taxable service and not any exempted service in the state of Jammu Kashmir, for which reversal of the cenvat credit is sought by the Revenue, therefore, the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 are not applicable to the facts of this case. CENVAT Credit denied - Non production of documentary evidence such as C.A. certificate for payment of service tax on exempted service by the appellant - HELD THAT:- The appellant has produced the C.A. certificate dated 14.09.2019 and placed before me which certifies that the appellant has paid service tax on these exempted service, therefore, the said payment of service tax shall amounts to reversal of the cenvat credit of Rs. 93,206/- in the light of the decision of Hon ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [ 2012 (7) TMI 141 - BOMBAY HIGH COURT ]. Hence, the said amount of Rs. 93,206/- is set aside. CENVAT Credit - denial on the ground that there is no evidence on record that inputs cleared as such, the appellant has reversed the cenvat credit - HELD THAT:- The invoice itself speaks that the cenvat credit has reversed in terms of Rule 3(4) of the Cenvat Credit Rules, 2004 and also produced the C.A. certificate along with details of all the invoices - the appellant has already reversed the cenvat credit of Rs. 87,036/-. Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 773
  Levy of Service Tax - Incentive received by service receiver from service provider, on appreciable performance - Validity of demand made without specifying the sub clause of BAS under which the activities are covered - validity of service tax demand, under the taxable category of BAS in absence of three parties service provider, service receiver and targeted audience - demand under the case value of service is fixed under an option provided under the Rules - validity of claiming liability without specifying the consideration for service as provided under section 67 of the Chapter V of Finance Act, 1994 as amended up to date - validity of demand made in absence of the relationship of service provider and service receiver? - these matters were placed before Division Bench for decision. Whether the air travel agent is promoting it own business and not the business of the airlines? - HELD THAT:- For an activity to be considered as promotional, it is necessary that a service provider must promote or endorse the service of the client. It has, therefore, to be seen whether in the present case the travel agent is encouraging a passenger to purchase a ticket of a particular airline. The facts reveal that the travel agent is only providing options to the passenger and it the passenger who determines the airline for travel. It is only when the target of having achieved the pre-determined number of bookings is achieved that the airline pays an incentive to the travel agent. It cannot, therefore, be said that the travel agent is promoting the services of any airline. Incidentally, the airlines may benefit if more tickets are sold, but this would not mean that the travel agent is providing a service for promoting the airlines - by rendering of services connected to travel by air, a travel agent would render air travel agent services, which services cannot be said to be for promotion or marketing for the airlines. Whether the air travel agent is promoting the business of CRS companies? - HELD THAT:- Mere selection of software or exercising of a choice would not result in any promotional activity. The Department has not pointed out at any activity undertaken by an air travel agent that promotes the business of the CRS Company - The passenger cannot be deemed to be an audience for promotion of the business of CRS Companies, for the passenger can neither book directly through a CRS Company nor can a passenger be influenced by any travel agent to book through a particular CRS Company. Section 65A of the Finance Act - HELD THAT:- The two competing entries are air travel agent service and BAS . It would be seen from the definition of air travel agent that it includes all services connected with or in relation to the booking of passage for travel by air. The services in question are booking of airlines tickets and for achieving a pre-determined target, the air travel agent also receives an additional amount in the form of incentives/commission from the airlines or the CRS Companies. The receipt of incentives commission would not change the nature of the services rendered by the travel agent - This apart, the definition of BAS would also reveal that the service provider must promote or market the service of a client. As noticed above, it is not a case where the air travel agent is promoting the service of airlines/CRS Companies. The air travel agent is, by sale of airlines ticket, ensuring the promotion of its own business even though this may lead to incidental promotion of the business of the airlines/CRS Companies. Thus, in terms of the provision of section 65A (2)(a) of the Finance Act, the classification of the service would fall under air travel agent services and not BAS. Whether Incentives paid for achieving targets are taxable? - HELD THAT:- In this regard following can be held: (i) the air travel agent is promoting its own business and is not promoting the business of the airlines; (ii) the air travel agent is not promoting the business of the CRS Companies; (iii) in any view of the matter, the classification of the service would fall under air travel agent service and not BAS in terms of the provisions of section 65A of the Finance Act; and (iv) the incentives paid for achieving the targets are not leviable to service tax. Further, i. view of above submissions, it would not been necessary to decide that once the IATA agent has discharged his service tax liability in terms of section 67 of the Finance Act or rule 6 (7) of the 1994 Rules, no further service tax could be demanded on the amount paid to or passed on by the IATA agent. Application disposed off.

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• Central Excise

• 2021 (3) TMI 790
  Interest on delayed refund (already sanctioned) - rate of interest on refund - HELD THAT:- The Hon ble Jurisdictional Punjab Haryana High Court in the case of LSE Securities Ltd. [ 2015 (8) TMI 687 - PUNJAB AND HARYANA HIGH COURT ] directed the department to pay interest @ 15% per annum from the date became due after excluding 3 months from the date of passing of order - Further, in the case of Shreewood Products Pvt.Ltd.- [ 2016 (10) TMI 273 - PUNJAB AND HARYANA HIGH COURT ]), again the Hon ble Jurisdictional High Court has held that the appellant is entitled to payment of interest @ 12% per annum in terms of section 11BB of Central Excise Act, 1944 after 3 months after passing of the order of this Tribunal till the refund was granted. The appellant is entitled to refund @ 12% per annum after 3 months from the date of passing of the order of this Tribunal i.e.19.12.2019 till the refund is granted - Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 789
  CENVAT Credit - input services - Air and Rail Travel services - Club and Association service - Outdoor Catering service - Goods Transport Operator service - period between February, 2016 and June, 2017. Outdoor Catering services - HELD THAT:- The appellant is entitled to avail such credit provided the amount is paid by it and not collected from the individual employees to meet the expenses and such a settled position of law is not required to be reopened by any further reference to the larger bench in view of the operation of explanation-V to Section-11 of the CPC and not the main provision of Section 11, placing reliance on which judgement of Sunbel Alloys Co. Of India Ltd. [ 2015 (2) TMI 137 - BOMBAY HIGH COURT ] that was delivered in an altogether different factual matrix - When a factory can t functioning without fulfilling statutory requirements, tax paid to meet such requirement is to be accepted as eligible credit otherwise there is no way out to avoid double taxation. Air Travel Agent Service - Rail Travel Agent service - Tour Operator Services - denial on the ground that appellant failed to produce substantial evidence to support its stand that travel by its employees were meant for official work like sales promotion or to enhance the business of the company - HELD THAT:- There is no reason to disbelief the call letters placed in additional submission at page 30 and 32 and accept the same as additional evidence as per Rule 23(2) of the CESTAT Procedure Rules so as to meet the requirement of Rule 9(5) of the CENVAT credit Rules, 2004. Even otherwise also presumption of an official tour goes in favour of the invoice referred above that had been disbelieved by the learned Commissioner (Appeals), in view of the short duration of the travel by the General Manager of the appellant s Company alone. However, this is not the stage to scrutinise documents while deciding an appeal to find out conclusive proof of the nature of CENVAT credit availed, for which reassessment at the adjudication level would be the only way out. Courier Services - H ELD THAT:- Tribunal in respect of previous period of the appellant that allowed courier service inputs for necessary availment of credit - Credit allowed. Goods Transport Operator - HELD THAT:- The claim of the appellant to avail goods transport operator service for a meagre amount of Rs. 624/- needs no consideration as the same had been allowed by the Commissioner (Appeals) in para 9 of his order and the amount placed in the table of appeal memo matches with the figures shown for which this amount of Rs. 624/- against which claim is made is based on typographical error in the order of the Commissioner (Appeals) in computing the amount - Appellant s claim on availment of input services on goods transport service is therefore to be read as allowed in full. Club Association Service - HELD THAT:- When it has been clearly mentioned in Rule 2(l) the premises of the provider of the output service or an office relating to such factory or premises of the manufacturer is covered for availment of CENVAT credit, there are no reason to denied such credit to the appellant since it negativates personal use of the employees as being spent for maintenance of corporate office. Availment of service of outdoor catering for meeting statutory requirement of canteen service is allowed to the extent of non-realisation of the said amount from the employees that would be verified by the adjudicating authority for which a limited remand is made solely for the verification of documents vis-a-vis for verification of documentary evidence to justify travels for business purpose - credit on all other items allowed - appeal allowed.

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• 2021 (3) TMI 788
  Refund of excise duty paid - denial on the ground of time limitation - appropriation of amount towards the arrears pending - Section 11B of the Central Excise Act, 1944 - HELD THAT:- The appellant filed the refund claim on 20/03/2013 in respect of the duty paid on the goods exported. The Assistant Commissioner sanctioned the refund but appropriated an amount of Rs. 16,04,530/- towards arrears pending in another case and the said appropriation was set aside by the Commissioner (Appeals) and thereafter it was incumbent on the Department to refund the said amount of Rs. 16,04,530/-. When the Department did not refund the said amount, the appellant after waiting about four years wrote a letter dated 14/01/2019 requesting the Assistant Commissioner to release the amount but the Department wrongly issued a show-cause notice proposing to deny the refund claim on time-bar and subsequently denied the refund claim by Order-in-Original dated 29/04/2019 on time-bar and the same was upheld by the Commissioner (Appeals) by the impugned order. The Commissioner (Appeals) has wrongly invoked the provision of Clause (ec) for denying the refund on the ground that the refund has arisen on account of the order passed by the Commissioner in appeal whereas in fact the refund has arisen on account of export of goods and the Department having accepted the order of the Commissioner (Appeals) dated 27/07/2015 should have refunded the amount in cash to the appellant. This issue has been considered by the Tribunal in the case of SPIC LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI [ 2006 (11) TMI 73 - CESTAT, CHENNAI] wherein on identical facts, the Chennai Bench of the CESTAT has held that there is no need to file any refund application under the provisions of the Act. Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 782
  Levy of penalty u/r 26 of Central Excise Rules, 2002 - Clandestine removal - Filter Cigarettes - penalty levied appellant has not obtained invoices before booking consignment - HELD THAT:- From section 26 of CER, it is very much clear that any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty. From the facts of the case neither Revenue nor the statement of the appellant having knowledge of description of the goods and the goods in question are not duty paid. Further, the appellant is only booking agent who facilitates the persons coming to the Railway counter for booking and charging Rs. 100/- for booking and assistance. The appellant was nowhere had opportunity to know about the description of the goods or duty paying character of the goods. In the absence of such element of knowledge, provisions of Rule 26 of the Rules cannot be attracted in the facts and circumstances. Thus, without establishing knowledge of the appellant about the character of non payment of duty and description of the goods, penalty under Rule 26 of Central Excise Rules, 2002 is not imposable - appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 777
  CENVAT Credit - credit denied on the premise as per Notification No. 02/14-CE (N.T) dt. 20.01.2014, the appellant was not entitled to avail credit prior to the Notification No. 02/14 (N.T) dt. 20.01.2014 in terms of Notification No. 01/10-CE dt. 06.02.2010 - extended period of limitation - HELD THAT:- There is no provision in law for the appellant to file invoices before the department in time. In these circumstances, it is found that as the assessee was allowed credit by the adjudicating authority although the revenue has filed appeal against those orders before the Commissioner (Appeals). Extended period of limitation - HELD THAT:- In these circumstances, when the adjudicating authorities are having a divergent view, the extended period of limitation is not invokable in the facts and circumstances of this case. Admittedly, in the case in hand, the show cause notice has been issued by invoking extended period of limitation, therefore, the denial of credit is barred by limitation. The show cause notice issued to the appellant is barred by limitation - Appeal allowed - decided in favor of appellant.

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• 2021 (3) TMI 776
  Levy of penalty - non-filing of the returns namely ER-4, ER-5, ER-6 and ER-7 for the period 2014-15 - HELD THAT:- In this case, it is a fact on record that the appellant has not filed the returns namely ER-4, ER-5, ER-6 and ER-7 but on the other hand, there is no Revenue implication for the same. This is only procedural of lapse on the part of the appellant, therefore, leniencies are to be given to the appellant. The consolidated penalty for non-filing of the returns namely ER-4, ER-5, ER-6 and ER-7 for the period 2014-15, the penalty is reduced to Rs. 20,000/- - Appeal allowed in part.

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• 2021 (3) TMI 768
  Refund of CENVAT Credit - refund rejected by authorities below holding that the same is barred by limitation in terms of Section 11B of the Central Excise Act, 1944 - whether the reverse amount is to be treated as under protest or a deposit for entertaining the refund claim by not applying provision of Section 11B of the Central Excise Act, 1944? - HELD THAT:- From the verification of records, it is found that during the course of audit an objection was raised to the appellant and on the basis of that objection they reversed the Cenvat credit but no protest has been lodged by the appellant and they have also not asked for issuance of any show cause notice from the department. As audit team raised the objection, the appellant reversed the said amount, the matter ends. Later on, after almost three years they filed refund claim saying that the said amount is to treated as deposit as they were not required to pay said amount. There is no judicial pronouncement on the issue whether they were required to reverse the Cenvat credit or not and they have not made any protest that they are not required to reverse the amount. There are no infirmity in the impugned order holding that refund claim is barred by limitation - appeal dismissed - decided against appellant.

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• CST, VAT & Sales Tax

• 2021 (3) TMI 797
  Classification of sale - Inter state sale or local sale - whether the transaction of purchase of cotton between the respondent Mill and one Maharashtra State Co-opertive Cotton Growers Marketing Federation Ltd., Bombay is inter state sale or local sale by reason of delivery of goods, after payment of entire sale consideration within Tamil Nadu - HELD THAT:- The issue involved in this case is squarely covered by the decision of the Hon ble Division Bench of this Court in the case of THE STATE OF TAMIL NADU REPRESENTED VERSUS TVL. ANNAMALAIAR MILLS LTD [ 2015 (12) TMI 468 - MADRAS HIGH COURT ] where it was held that Tamil Nadu Sales Tax Appellate Tribunal, after verifying the facts stated by the assessee, in the light of the documents referred to above and by applying the principles laid down by the Hon ble Supreme Court in South India Viscose Ltd v. State of Tamil Nadu, reported in [1981 (7) TMI 204 - SUPREME COURT OF INDIA] and also by applying the view of the TNTST, Chennai in the cases, was of the firm view that the transaction cannot be considered as local sale, but only as inter state purchase and the same was not liable to tax under the TNGST Act 1959 at the point of last purchase in the State and accordingly allowed all the five appeals. Petition dismissed.

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• 2021 (3) TMI 796
  Assessment of turnover - hank yarn obligation - HELD THAT:- Tribunal was right in holding that the hank yarn obligation represented the consideration received for the hank yarn manufactured and transferred to other mills accounts to discharge the statutory obligation imposed for other mills by the Statutory Authority and in that process, they received the hank yarn obligation. Hence, the Tribunal was right in holding that the same represented the consideration received for the hank yarn manufactured and transferred to other mills accounts - the factual details are rightly re-appreciated by the Tribunal and that there are no reasons to interfere with the same - Petition dismissed. Assessment made on the disputed turnover of Rs. 7,86,81,405/- - cotton purchases effected by the petitioner from the Maharashtra Federation in the Maharashtra State - HELD THAT:- The said issue is covered in favour of the petitioner in the light of the Larger Bench decision of the Special Tribunal in the case of JAMBAI KNM. TEXTILES (P.) LIMITED AND OTHERS VERSUS STATE OF TAMIL NADU AND OTHERS [ 1999 (11) TMI 840 - TAMIL NADU TAXATION SPECIAL TRIBUNAL] where it was held that the transaction cannot be considered as local sale, but only as inter state purchase and the same was not liable to tax under the TNGST Act 1959 at the point of last purchase in the State. The finding rendered by the Tribunal with regard to hank yarn obligation is confirmed and the finding rendered by the Tribunal with regard to the cotton purchases effected by the petitioner is set aside - appeal allowed in part.

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• 2021 (3) TMI 795
  Reopening of a proceeding under Section 16 of the State Act - Form-F declarations are accepted - Classification of sale - inter-state sale or local sale - HELD THAT:- The legal issue raised in this writ petition is no longer res integra and has been settled by the Hon ble Supreme Court in the case of Ashok Leyland Ltd., to the effect that once Form F Declarations are accepted and the assessment is completed, then the question of re-assessment does not arise. Petition allowed.

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• 2021 (3) TMI 792
  Rejection of request for absolute stay of the demands of tax, interest and penalty arising out of assessments framed in terms of the provisions of the Tamil Nadu Value Added Tax Act, 2006 - HELD THAT:- A perusal of the impugned order reveals the three vital aspects to be looked into while disposing stay applications, i) prima facie case, ii) financial stringency and iii) balance of convenience, have not been adverted to. Financial soundness of this petitioner is not in question and the balance of convenience can be ascertained only after examination of whether a prima facie case has been made out. The impugned order must be set aside for nonapplication of mind, to be re-done de novo after hearing the petitioner. For this purpose, the petitioner will appear before the first respondent on Wednesday, the 10 th of March, 2021 at 10.30 a.m. without expecting any further notice in this regard, along with supporting materials, if any, in support of its request for stay. Upon hearing the petitioner and considering materials, if any that may be filed, orders will be passed within a period of four (4) weeks thereafter, ie., on or before 09.04.2021 - Petition allowed.

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• Indian Laws

• 2021 (3) TMI 801
  Requirement of Prescribed Uniform for the Central Excise Inspectors - seeking framing of Rules and Guidelines regarding wearing of Prescribed Uniform for all officials top to bottom while working and posted in Central GST, Central Excise, Land Custom Stations and Other Customs formations which are being managed by officers of Central Excise - HELD THAT:- It appears that certain members of the petitioner s association were found guilty of insubordination and disobedience for not paying honour and respect to the National Flag and certain disciplinary proceedings were initiated against them. The petitioner s association has filed the instant writ petition on behalf of those persons. We cannot appreciate the manner in which, the instant writ petition has been filed, particularly, when the disciplinary proceedings were initiated against the General Secretary of the petitioner s association and he has himself challenged the same before the Central Administrative Tribunal where the case is pending. The writ petition appears to have been filed with ulterior motive to put undue pressure on the authorities, which cannot be appreciated. It is also to be noted that this writ petition has been registered as a Public Interest Litigation, however, the learned counsel for petitioner submits that he has not filed it as Public Interest Litigation and it has been filed in individual capacity on behalf of petitioner s association. Petition dismissed.

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