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TMI Tax Updates - e-Newsletter March 23, 2020 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws Articles E-WAY BILL – SOME ISSUES Updates of 39th GST Council Meeting held on March 14, 2020 News Cabinet approves expenditure for reimbursing the losses under MSP operations for cotton during the cotton years (October to September) 2014-15 to 2018-19 Notifications Customs 23/2020-Customs (N.T./CAA/DRI) - dated 20-3-2020 - Cus (NT) Appointment of CAA by DGRI 22/2020-Customs (N.T./CAA/DRI) - dated 20-3-2020 - Cus (NT) Appointment of CAA by DGRI GST 14/2020 - dated 21-3-2020 - CGST Class of registered person required to issue invoice having Dynamic Quick Response (QR) code 13/2020 - dated 21-3-2020 - CGST GST- E-invoice - registered person required to issue e-invoice where aggregate turnover in preceding Finacial year exceeds the threshold limit. 12/2020 - dated 21-3-2020 - CGST Seeks to amend Notification No. 21/2019- Central Tax, dated the 23rd April, 2019 11/2020 - dated 21-3-2020 - CGST Notifies registered persons (hereinafter referred to as the erstwhile registered person), who are corporate debtors under the provisions of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), 10/2020 - dated 21-3-2020 - CGST Special procedure for certain processes - ascertain the tax period - payment of tax - availing ITC GST - States S.O. 90 - dated 17-3-2020 - Bihar SGST Bihar Goods and Services Tax (Second Amendment) Rules, 2020 29/2019 – State Tax (Rate) - dated 11-3-2020 - Jharkhand SGST Amendment in Notification No. 13/2017- State Tax (Rate), dated the 29th June, 2017 28/2019 – State Tax(Rate) - dated 11-3-2020 - Jharkhand SGST Seeks to amend Notification No. 12/2017- State Tax (Rate), dated the 29th June, 2017 27/2019 – State Tax(Rate) - dated 11-3-2020 - Jharkhand SGST Seeks to amend Notification No. 1/2017-State Tax (Rate), dated the 29th June, 2017, 26/2019 – State Tax (Rate) - dated 11-3-2020 - Jharkhand SGST Seeks to insert Explanation in Notification No. 11/2017- State Tax (Rate), dated the 29th June, 2017 07/2020 – State Tax - dated 18-3-2020 - West Bengal SGST Seeks to prescribe due dates for filing of return in FORM GSTR-3B in a staggered manner 06/2020 – State Tax - dated 18-3-2020 - West Bengal SGST Seeks to extend the last date for furnishing of annual return/reconciliation statement in FORM GSTR-9/FORM GSTR-9C for the period from 01.07.2017 to 31.03.2018 Income Tax 21/2020 - dated 20-3-2020 - IT Corrigendum - Notification No. 18/2020 dated 18/03/2020 20/2020 - dated 20-3-2020 - IT Central Board of Direct Taxes authorizes the Assessing Officer working in the Principal Chief Commissioner of Income-tax (international Taxation) 19/2020 - dated 20-3-2020 - IT Seeks to amend Notification No. 33/2019 dated 09/04/2019 SEBI S.O. 1165(E) - dated 19-3-2020 - SEBI Designation of courts to be Special Courts Circulars / Instructions / Orders SEBI SEBI/HO/CFD/CMD1/CIR/P/2020/38 - dated 19-3-2020 Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 due to the CoVID -19 virus pandemic DGFT Policy Circular No. 34/2015-20 - dated 20-3-2020 Clarification on Export of API/Formulations (Restricted) under Advance Licence Customs PUBLIC NOTICE NO. 04/2020 - dated 2-2-2020 ICES Advisory 01/2020 (SCMTR) dated 13.01.2020 — Registration and Application Process for all the Stakeholders Highlights / Catch Notes GST Clinical establishment or not - supply of health care services - The Applicant’s submissions do not clarify or claim that its plant-based preparations are manufactured exclusively in accordance with the formulae described in any authoritative book of Ayurveda specified in the First Schedule of the Drugs and Cosmetics Act, 1940. It does not claim that the persons administering the plant-based preparations are ‘authorised medical practitioners’ in Ayurveda within the meaning of Para No. 2 (k) of the Exemption Notification. - Benefit of exemption not available - AAR Visit to Get Source Works contract - composite supply or not - supply to railways - The Applicant’s supply is not in the nature of repair and maintenance of an existing structure, but a new construction. It involves installation, erection and commissioning of a network of interlinked equipment and structures attached to earth. It is, therefore, ‘original work’ within the meaning of clause 2 (zs) of Notification No. 12/2017 - AAR Visit to Get Source Levy of IGST - Export of services - RCM - Activity of sales representative, identification of customers in India - intermediary services or not - the supply of services of the applicant under these transactions squarely falls under the Intermediary services and thereby the supply is in the taxable territory and thus the said supply is taxable, under forward charge mechanism. - AAR Visit to Get Source Input tax credit (ITC) - Restrictions u/s 17(5) - inputs attributable to the renting of immovable property - construction of immovable property intending for letting out for rent - The application is hereby rejected as the issue is pending before the Hon’ble Supreme Court of India and hence is sub-judice. - AAR Visit to Get Source Undervaluation - Detention of goods - Merely because the manufacturer sells his products to its customer or dealer at a price lower than the MRP, as such cannot be a ground on which the product or the vehicle could be seized or detained. If at all if this, according to the respondents, is contrary to the law, the authorities are supposed to draw an appropriate proceeding under the law - HC Visit to Get Source Income Tax Demand of additional tax u/s 143(1A) - Prima facie adjustments - the burden of proving that the assessee has attempted to evade tax is on the Revenue which may be discharged by the Revenue by establishing facts and circumstances - We cannot mechanically apply the provisions of Section 143(1A) - Section 143(1-A) can only be invoked when the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. - SC Visit to Get Source Correct head of income - sub-leasing of already leased out property - maintenance charges and air conditioning hire charges - Service charges received from tenants are liable to be assessed as "income from other sources" and not as "income from house property". - HC Visit to Get Source Penalty u/s 271(1)(c) - Whether 'mens rea' or deliberate attempt is not essential for levy of penalty - A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing the inaccurate particulars. - HC Visit to Get Source Addition u/s 68 - Unexplained share capital - A share applicant company have been assessed to tax u/s 143(3) of the Act and the source of money in question was brought to tax in their hands - no additions can be made in the case of the assessee company - AT Visit to Get Source Addition u/s 69B - assessment u/s 153A - search action u/s.132 and seized incriminating documents - Purchase of land - If there was some doubt, revenue ought to have recorded statement of the seller along with statement of witnesses. The Department does not have any other evidence other than the so-called banachhitti wherein appellant’s son has made an agreement to purchase land - in view of the inadequate/insufficient evidence and enquiry, we delete the addition - AT Visit to Get Source Addition made in respect of employees contribution towards PF/ESI - if the assessee had deposited employee's contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003. - AT Visit to Get Source Extension of stay against outstanding demand - When the lower authorities have not given any heed to the direction of the Tribunal, we find it a fit case for extension of stay against outstanding demand by the Department. The assessee cannot be put to face the harassment/ harsh treatment due to non-disposal of the appeal. - AT Visit to Get Source Reopening of assessment u/s 147 - notice for reopening is issued beyond a period of 4 years - There is no tangible material for the respondent to come to the conclusion that there is escapment of income from assessment. Moreover, there is no live link for formation of such belief while recording the reasons for reopening the assessment. - HC Visit to Get Source TDS u/s 192 - TDS - Salary - reimbursement/ payments made to employees under the head of uniform allowance - Whether the employee is able to substantiate his claim to exemption has no bearing on the estimate of income liable to tax to be made by the employer - self certification on the part of the employees was adequate for the assessee not to deduct tax from the reimbursement allowance towards expenditure incurred for uniforms. - HC Visit to Get Source Deduction u/s 10B - setting off of the brought forward unabsorbed depreciation loss of the earlier years - the deductions either under Section 10A or 10B would be made while computing the gross total income of the eligible undertaking (like the Assessee) under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI of the Act. - HC Visit to Get Source Customs Imposition of redemption fine in lieu of confiscation of conveyance - the Tribunal, on a correct interpretation of the proviso to sub-section (2) of section 115 of the Act of 1962 has held that the maximum fine on the conveyance cannot exceed the value of goods sought to be smuggled or the smuggled goods. - HC Visit to Get Source Provisional release of seized goods - The adjudicating authorities should be permitted to exercise their discretion in manner known to law. While exercising their discretion, they may also examine the statements made by the petitioner. Naturally, they would have to provide an opportunity to the petitioner of being heard. When the adjudicating authority is empowered even to reject provisional release of goods, unless such orders are passed by the adjudicating authority, this Court should not interfere with such process. - HC Visit to Get Source Amendment in the shipping bill - Section 149 of the Customs Act, 1962 - at the time of export which is established from shipping bill wherein the appellant have categorically claimed the benefit of MEIS, therefore, there are no reason why the amendment in the Shipping Bill under section 149 should not be allowed. - AT Visit to Get Source Refrain from imposition of penalty - classification of imported goods - colour data projectors - It is only when there is any ambiguity in the Exemption Notification, that the Notification is required to be interpreted in favour of the Revenue - There is no ambiguity in the Exemption Notification dated 1st March, 2005 and indeed none has been pointed out by the Commissioner in the impugned order. - When penalty is not proposed in the Show cause notice (SCN), no penalty can be imposed - AT Visit to Get Source Service Tax Levy of Service Tax - Cleaning Activity - removal of fly ash from the pond - The Respondent is not clearing the fly ash with the objective of cleaning the pond or free the pond from contamination. Fly ash is being excavated and transported to the specified areas as per the contract. - AT Visit to Get Source Applicability of interest to CENVAT credit recovery - Availed versus Taken and / or utilization of credit - Recovery of CENVAT credit wrongly taken or erroneously refunded - it is unusual for ‘utilization’ to be qualified with ‘ineligibility’ on its own as ‘utilization’ is solely for the purpose of discharge of tax/duty liability which, even if not warranted, does not, by any stretch of usage, behove description as ‘wrongly.’ Such a transferred epithet can only reasonably mean ‘utilization’ after having been wrongly taken and, thereby, made ineligible. - AT Visit to Get Source Levy of Service Tax - amount which employer recovers out of the salary paid to the employee if the employee breaches the contract of total term of employment - The said recovery is out of the salary already paid and we also note that salary is not covered by the provisions of service tax - AT Visit to Get Source Imposition of penalty - intention to evade service tax - it is found that the contention of the appellant that they bona fidely believed that they are not liable to pay service tax but when the audit party raised the objection that they are liable to pay service tax, then they immediately paid the service tax along with interest which is admitted in the impugned order, is justified - Further except mere allegation of suppression, the Department did not bring any material to prove that there was suppression and concealment of facts to evade payment of tax. - Penalty set aside. - AT Visit to Get Source Claim of refund - SEZ unit - Notification No. 09/2009-ST and 17/2011-ST - mere supply of surplus power in DTA as mentioned in Rule 47 of SEZ Rules, cannot be construed that the assessee carries on business, as there is no DTA Unit of the assessee. Apart from that, SEZ, Mundra, directed the assessee to claim refund in terms of Para 2(c) of the notification, then, rejection of refund claims considering under Para 2(d) of notification by the Adjudicating authority is totally unwarranted and cannot be sustained. - AT Visit to Get Source Power of service tax department to Audit and seek information - Post GST era - The said Rule 5A is, even otherwise, relatable to Clause (k) of Section 94 (2), since the said Rule – while casting an obligation on the assessee to produce the records, he is obliged to maintain under the Finance Act, 1994, simultaneously empowers the Competent Authorities to ensure compliance of the said obligation. Thus, we reject the submission of learned senior counsel for the Petitioner that the Central Government lacked the authority and competence to frame Rule 5A. - HC Visit to Get Source Central Excise Non-speaking order - It is clear that the order of Tribunal is certainly a non-speaking order and the Tribunal failed to consider the grounds raised by the appellant. Merely reproduction of comments from the show cause notice or order-in-original is not sufficient for a Tribunal to dismiss the appeal filed by the appellant. Each and every ground raised should be sufficiently discussed by the Tribunal while passing any order, that too, upon recording the rival contentions raised by either parties before it. - HC Visit to Get Source CENVAT Credit - slag - exempt goods - Board’s Circular which has been issued without taking into consideration the implications of the provisions and the instructions, cannot be applied blindly for drawing adverse conclusion against the assessee. It was also held that merely on the strength of the said Circular dated 14.01.2011 Cenvat Credit cannot be denied, when there is no such provision in the Cenvat Credit Rules, 2004. - AT Visit to Get Source Valuation - Scope of the show cause notice (SCN) - Since the show cause notice or the appeal filed by Revenue does not propose to determine the assessable value of wholesale pack in the form in which it is offered for clearance, there are no merits in the appeal filed by the Revenue - AT Visit to Get Source 100% EOU - refund of unutilized balance of cesses in cash - CGST Act does not allow them to carry forward the cesses as input tax credit - There is no provision in the CENVAT Credit Rules 2004 or the Central Excise Act 1944 to allow cash refund of cesses lying in balance in the CENVAT Credit account on the ground that appellant was not able to use the same. - AT Visit to Get Source CENVAT credit - Capital Goods - allegation that plant erected at site are embedded to the earth and as such, such plant facilities cannot be considered as excisable goods for the purpose of availment of CENVAT credit on such disputed items - The denial of CENVAT benefit on the disputed goods should not stand for judicial scrutiny, as against rules framed in the CENVAT Statute - AT Visit to Get Source Process amounting to manufacture or not - Availing Cenvat Credit - whether the activities of opening the imported stock, inspection of the same, quality checks and repacking with affixture of sticker amounts to ‘manufacture’ within the meaning of Section 2 (f) (iii) of the Central Excise Act, 1944? - Held Yes - AT Visit to Get Source VAT Valuation - disallowance of deduction of target based discount - Vires of Section 9 (5) of the Jharkhand Value Added Tax Act, 2005 - There are no difficulty in holding that Section 9(5) of the JVAT Act, brought into force by amendment in the JVAT Act in the year 2011, is beyond the legislative competence of the State Legislature, and the same is ultra vires Article 246(1) of the Constitution of India, and cannot be sustained in the eyes of law - HC Visit to Get Source Levy of tax - Job-work - trading and sales in absence of Form-F - Section 6 A of the Central Sales Tax Act - The question regarding levy of sales act on the goods which are not accompanied by Form- F are on which the dealer cannot produce Form- F is no longer res-integra - AO directed to re-consider the issue in view of decision of SC - HC Visit to Get Source Case Laws: GST 2020 (3) TMI 896 Clinical establishment or not - supply of health care service from a clinical establishment - exempt under Entry No. 74 of the Exemption Notification or not - whether the Applicant is a clinical establishment that provides health care services by way of diagnosis, treatment or care for illness in any recognised system of medicines in India? HELD THAT:- Bundled supplies of two or more taxable goods or services, one of which is identifiable as principal supply within the meaning of section 2 (90) of the GST Act, is defined as composite supply under section 2 (30) of the said Act if they are naturally bundled and supplied in conjunction with one another in the ordinary course of business. All other bundled supplies are clubbed under the term mixed supply. The Applicant s submissions, however, do not clarify or claim that its plant-based preparations are manufactured exclusively in accordance with the formulae described in any authoritative book of Ayurveda specified in the First Schedule of the Drugs and Cosmetics Act, 1940. It does not claim that the persons administering the plant-based preparations are authorised medical practitioners in Ayurveda within the meaning of Para No. 2 (k) of the Exemption Notification. The Applicant has not clarified whether these persons possess the medical qualification included in the Second Schedule of the Indian Medicine Central Council Act, 1970 and registered under the said Act as medical practitioners. This Authority cannot accept the Applicant s claim that it is a clinical establishment offering treatment in the recognised ayurvedic system of medicine. Its supplies are not, therefore, health care service by a clinical establishment, as defined under Para No. 2(s) of the Exemption Notification - Applicant s supply is, therefore, not exempt under Entry No. 74 of the Exemption Notification. It needs to remain registered, as its liability to pay GST does not cease. 2020 (3) TMI 895 Works contract - composite supply or not - supply to railways - supply involves designing, engineering, manufacturing, site installation, cable laying, erection, testing, commissioning etc. - eligibility for GST under Entry 3 (v) (a) of the Rate Notification - HELD THAT:- Erection and commissioning of SCADA System involves attaching cables and other electrical equipment to the earth with no intention of removing or shifting them in foreseeable future. Moreover, the parts are so interlinked to constitute a functioning SCADA System that none can be moved separately or without causing substantial damage to the goods attached to earth. The moveable character of the goods like cables and other equipment, therefore, becomes extinct. The Applicant s supply thus amounts to erection and commissioning of an immovable property involving transfer of property in goods in its execution and, therefore, works contract within the meaning of section 2 (119) of the GST Act. Whether the Applicant s supply is original work within the meaning of clause 2 (zs) of Notification No. 12/2017- Central Tax (Rate) dated 28/06/2017, as amended? - HELD THAT:- The Applicant s supply is not in the nature of repair and maintenance of an existing structure, but a new construction. It involves installation, erection and commissioning of a network of interlinked equipment and structures attached to earth. It is, therefore, original work within the meaning of clause 2 (zs) of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017, as amended. Whether supply to RVNL qualifies as a supply pertaining to railways, including monorail and metro? - HELD THAT:- SCADA, in the context of the Applicant s supply to RVNL, is the system that controls and monitors the electrical network of the metro, enabling the operator to issue suitable commands to be followed in the operation of the metro. Using the SCADA interface, the operator sends instructions to the Remote Terminal Unit, which accordingly controls the signals, lights and other electrical equipment of the metro. It is, therefore, a power supply and distribution network installed for the purpose of the operation of the metro. It, therefore, is a supply pertaining to railways, including metro, as defined under section 2 (31) (c) of the Railways Act, 1989. 2020 (3) TMI 894 Levy of IGST - Export of services - Reverse Charge Mechanism - intermediary services or not - eligibility of Input Tax Credit - Provision in GST Returns to Show the transactions - IGST from Customer not collected and is absorbed as Cost-impact on the transaction value. Do export of services attracts IGST under RCM? - HELD THAT:- The Reverse Charge Mechanism is nothing but shifting the tax liability on to the receiver. In the instant case the applicant is, undoubtedly, a supplier and hence the question of levy of IGST on export of services, under RCM , does not arise. Do the services considered as Intermediary Service? - HELD THAT:- In the instant case the applicant acts as an agent, in terms of the aforesaid agreements, to the parent company Fom Industrie s.r.l, Italy as well as M/s. Universal Pack s.r.l, Italy beyond doubt. Therefore the supply of services of the applicant under these transactions squarely falls under the Intermediary services and thereby the supply is in the taxable territory and thus the said supply is taxable, under forward charge mechanism. Is IGST paid under RCM eligible for ITC? - HELD THAT:- The levy of IGST is only on the inter-state supplies and importation of goods/services is treated as inter-state supply, in terms of Section 7(2)/7(4) of the IGST Act 2017 respectively. The IGST is levied on import of goods, as part of customs duty, and collected under The Customs Act 1962. The IGST paid on clearance of imported goods by the applicant is available for ITC to the applicant. Further import of services attract IGST and the concerned importer has to discharge the said levy under RCM, which is also available for ITC to the importer of services. In the instant case the applicant is not importing any services and hence payment of IGST under RCM does not arise. Provision/ s in GST returns to show the transactions of the applicant - also, no IGST collected from the Customer and is absorbed as Cost-impact on the transaction value - HELD THAT:- No rulings are given in respect of fourth and fifth questions, as they do not get covered under Section 97(2) of the CGST Act 2017 and hence out of the jurisdiction of this authority. 2020 (3) TMI 893 Maintainability of application - Input tax credit (ITC) - Restrictions u/s 17(5) - inputs attributable to the renting of immovable property - construction of immovable property intending for letting out for rent - HELD THAT:- It is pertinent to mention here that the Department has filed an appeal under SLP No.26696/2019 before the Hon ble Supreme Court of India, against the order of the Hon ble High Court of Orissa in M/S. SAFARI RETREATS PRIVATE LIMITED AND ANOTHER VERSUS CHIEF COMMISSIONER OF CENTRAL GOODS SERVICE TAX OTHERS [ 2019 (5) TMI 1278 - ORISSA HIGH COURT] . Thus the issue is pending before the Hon ble Supreme Court and therefore the said issue is sub-judice. Therefore the instant application is liable for rejection under Section 98(2) of CGST Act 2017. The application is hereby rejected as the issue is pending before the Hon ble Supreme Court of India and hence is sub-judice. 2020 (3) TMI 892 Provisional attachment of Petitioners' bank accounts - Section 83 of the Central Goods and Services Tax Act, 2017 [read with Rule 159 of CGST Rules, 2017] - HELD THAT:- Subject to the impugned orders being set aside, the time bound directions be issued to the Respondents to pass fresh orders in accordance with law, the Petitioners would ensure that no payments other than those set out in the 'tabular form' would be made from the accounts and that further receipts in the accounts till date of passing of fresh orders will remain untouched. He also states, again on instructions, that the Petitioners would furnish to the Respondents the receipts for the payments made to the vendors for completing the live residential and commercial projects of the Petitioners, accompanied by an affidavit explaining the details of such payments. Thirdly, the Petitioners will maintain status quo with regard to FDs, both which are under lien as well as the FDR which is free from encumbrances. The impugned order of provisional attachment of Petitioners' bank accounts are hereby set aside upon the condition that fresh orders would be passed by the Respondent No.2 in that regard, in accordance with law, taking into account the submissions made by the Petitioners in these petitions, not later than 10th April, 2020. 2020 (3) TMI 891 Filing of FORM GST TRAN-1 and/or revised TRAN-1 Form - HELD THAT:- The GSTN authorities (Authority that manages the portal) are directed to open the portal for the petitioners till March 31, 2020. This order shall not create any equity in favour of any of the petitioners insofar as their claim is concerned and the same shall be subject to scrutiny by the concerned authority. Petition disposed off. 2020 (3) TMI 890 Release of vehicle alongwith the goods - discrepancies in the valuation of the goods - Section 129(3) of the Central Goods and Service Tax Act, 2017 - HELD THAT:- When the vehicle was intercepted from the 14.01.2020, the person Incharge of the conveyance was in fact carrying the requisite documents, which he was supposed to carry in the course of transportation of the goods. As regards the discrepancy found in the course of inspection, the only observation made by the authorities concerned is that the valuation does not seem to have been properly conducted. Merely because the manufacturer sells his products to its customer or dealer at a price lower than the MRP, as such cannot be a ground on which the product or the vehicle could be seized or detained. If at all if this, according to the respondents, is contrary to the law, the authorities are supposed to draw an appropriate proceeding under the law - The Inspecting Authorities for the alleged discrepancy could have only intimated the Assessing Authority for initiating appropriate proceedings. What is more relevant to take note of is the fact that the details in the invoice bill as well as in the e-way bill matched the products found in the vehicle at the time of inspection except for the price of sale. Maintainability of petition - alternative remedy available to the petitioner - HELD THAT:- This Court is of the opinion that since the case of the petitioners at the outset itself was that the entire proceedings for detention of the vehicle and the seizure of the goods being in total contravention to the GST law, relegating the petitioners to avail the alternative remedy of appeal under Section 107 would not be proper, legal and justified - when this Court also finds that the proceedings of detention and seizure of the goods and the vehicle by the respondents is without any authority of law. This Court is of the opinion that under valuation of a good in the invoice cannot be a ground for detention of the goods and vehicle for a proceeding to be drawn under Section 129 of the Central Goods and Service Tax Act, 2017 read with Rule 138 of the Central Goods and Service Tax Rules, 2017 - Petition allowed. Income Tax 2020 (3) TMI 889 Demand of additional tax under the provisions of Section 143(1-A) - Prima facie adjustments - As per section 143(1A), additional tax has to be charged @ 20% of the tax payable on such excess amount . The excess amount refers to the increase in the income and by implication the reduction in loss where even after the addition there is negative income. - disallowing 25% of the depreciation - HELD THAT:- This Court in Commissioner of Income Tax, Gauhati vs. Sati Oil Udyog Limited and another [ 2015 (3) TMI 854 - SUPREME COURT] had occasion to consider elaborately the provisions of Section 143(1-A), its object and validity. There was a challenge to the retrospectivity of the provisions of Section 143(1-A) as introduced by Finance Act, 1993. The Gauhati High Court had held that retrospective effect given to the amendment would be arbitrary and unreasonable. The appeal was filed by the Revenue in this Court in which appeal, this Court had occasion to examine the constitutional validity of the provisions. This Court in the above judgment held that object of Section 143(1-A) was the prevention of evasion of tax. As relying on KP VARGHESE VERSUS INCOME-TAX OFFICER, ERNAKULAM, AND ANOTHER [ 1981 (9) TMI 1 - SUPREME COURT] in the above case held that provisions of Section 143(1-A) should be made to apply only to tax evaders. This Court in the above case upheld the constitutional validity of Section 143(1-A) (as inserted by the Finance Act, 1993) subject to holding that Section 143(1-A) can only be invoked where it is found on facts that the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully by the assessee. Even after dis-allowing 25% of the depreciation, the assessee in the return remained in loss and the 100% depreciation was claimed by the assessee in the return due to a bonafide mistake. By Taxation Laws (Amendment) Act, 1991, the depreciation in the case of Company was restricted to 75% which due to oversight was missed by the assessee while filing the return. CIT by deciding the revision petition has also not made any observation to the effact that 100% depreciation claimed by the assessee was with intend to evade payment of tax lawfully payable by the assessee, rather the Commissioner in his order dated 31.03.1992 has observed that whenever adjustment is made, additional tax has to be charged @ 20% of the tax payable on such excess amount. While interpreting a Tax Legislature the consequences and hardship are not looked into but the purpose and object by which taxing statutes have been enacted cannot be lost sight. This Court while considering the very same provision i.e. Section 143(1-A), its object and purpose and while upholding the provision held that the burden of proving that the assessee has attempted to evade tax is on the Revenue which may be discharged by the Revenue by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has, in fact, attempted to evade tax lawfully payable by it. In the present case, not even whisper, that claim of 100% depreciation by the assessee, 25% of which was disallowed was with intend to evade tax. We cannot mechanically apply the provisions of Section 143(1-A) in the facts of the present case and in view of the categorical pronouncement by this Court in Commissioner of Income Tax, Gauhati vs. Sati Oil Udyog Limited and another [2015 (3) TMI 854 - SUPREME COURT] where it is held that Section 143(1-A) can only be invoked when the lesser amount stated in the return filed by the assessee is a result of an attempt to evade tax lawfully payable by the assessee. In view of the above, we hold that mechanical application of Section 143(1-A) in the facts of the present case was uncalled for. 2020 (3) TMI 888 Notification providing guidelines with respect to the functioning of the Court in view of the Coronavirus pandemic - petitioner has made a specific prayer seeking a writ of mandamus upon the Income Tax Authorities preventing them from distributing jewellary that was seized almost four decades back - HELD THAT:- Owing to the resolution of the Bar Council that prohibits lawyers from participating in judicial proceedings, find that none has appeared on behalf of the respondent authorities. In the prevailing situation, passing a writ of mandamus against the Income Tax Authorities would go against the notification issued by the Registrar General. However, keeping in mind the extra-ordinary calamity that we are combating and for the ends of justice,request the Income Tax Authorities to stay their hands with regard to distribution of jewellery that has been lying with them for four decades, for a limited period of time. Request the Authorities to consider the representation made by the petitioner on March 11, 2020 and accordingly not release the jewellery to the private respondents for the time being. This matter shall be taken up on March 25, 2020 at the top under the heading Motion . 2020 (3) TMI 887 Condonation of delay - delay of 586 days in filing the appeal - TDS u/s 194H - payment to the distributors in prepaid SIM cards is a discount or commission - HELD THAT:- Revenue acted with due diligence, in our opinion, inasmuch as on 3rd April, 2018 the judicial folder was sent by the Income Tax department to the Ministry of Law and Justice for preparing the appeal. 4th April, 2018 was the last date for preferment of the appeal. The very next day after receiving the folder, the Ministry of Law and Justice handed over the file to learned counsel for preparation of the appeal. On 9th April, 2018 learned counsel handed over the drafts to the Ministry of Law. Had the appeal been expeditiously filed thereafter, there would have been a delay of not more than two weeks in filing it. However, the appeal papers after moving through various departments of the government for scrutiny, approval and so on, was ultimately filed on 13th November, 2019. There is no explanation for this delay. Although Mr. Dutta, learned advocate for the appellant contends that considering the issue involved we should condone the delay, we are of the view that even if some explanation was offered, we could have exercised our discretion. In this case, condonation of the delay would amount to condoning the utter failure or negligence on the part of the department to take steps with regard to this appeal. 2020 (3) TMI 886 Settlement commission order - Income Tax Settlement Commission, in exercise of their powers under Section 245F(1) read with Section 154 - waiver granted u/s 234A, no case for waiver of interest under Section 234B for any of the assessment years involved and the interest u/s.234B shall be charged upto the date of order under Section 245D(4) - Assessee Mr.N.Prasad submitted that the order passed by the Settlement Commission, impugned in the present writ petition, deserves to be interfered with in view of the law laid down by the Hon'ble Supreme Court in the case of CIT -Vs- M.H.Ghaswala [ 2001 (10) TMI 4 - SUPREME COURT] and Brij Lal -Vs- CIT [ 2010 (10) TMI 8 - SUPREME COURT] . - HELD THAT:- We are satisfied that the present impugned order of the Settlement Commission does not require any interference by this Court at this stage. If the Assessee intends to make any submission on the basis of any subsequent Supreme Court decision, which according to the Assessee is applicable to the facts of the present case, he is at liberty to move the Settlement Commission itself. Since apparently the impugned order has been passed in pursuance of the remand order of the Hon'ble Supreme Court itself, if there is any subsequent development or law or change of position of law at the hands of the Hon'ble Supreme Court, it is open to the Assessee to move the Settlement Commission itself for applying the correct position of law. Therefore, with the aforesaid liberty given to the petitioner, we are not inclined to interfere with the impugned order at this stage. 2020 (3) TMI 885 Stay application - recovery proceedings - HELD THAT:- Recovery proceeding are pre-mature, since the petitioner has admittedly filed an application seeking stay before the Appellate Commissioner and the Central Board of Direct Taxes (CBDT) has, in Instruction No. 1914 F. No. 404/72/93 ITCC dated 02.12.1993 directed the Appellate Commissioner to dispose the applications for stay filed by an assessee within a period of two weeks from date of filing of the same. In view of the aforesaid, the impugned communication dated 21.02.2020 is set aside. The petitioner is permitted to appear before the Commissioner of Income Tax (Appeals)/R2 on Tuesday, the 09th March of 2020 at 10.30 a.m. without expecting any further notice in this regard. After hearing the petitioner and considering the stay application, an order shall be passed by R2, taking into consideration the three fold aspects of prima facie case, financial stringency and balance of convenience. This exercise shall be completed within a period of four (4) weeks from 09.03.2020, i.e., on or before 07.04.2020. Let no coercive measures for recovery be insisted upon till 07.04.2020 2020 (3) TMI 884 Reopening of assessment u/s 147 - HELD THAT:- We find that the order of the Tribunal is correct. The mere fact that reasons exist on the file cannot sanctify them and the only way to ascertain whether the requirements under Section 147 of the Act have been met out would be at the very least that the assessing officer sign the same. Without signatures, the document becomes anonymous piece of paper to which no credence can be given. The action under Section 147 of the Act is quasi-judicial action and if it is permitted that such action can be done as anonymously, it would have very serious consequences in other cases also. If the Court accepts such pieces of paper who can tomorrow stop an assessee from substituting a signed paper with another unsigned paper? Moreover the reasons are undated, hence do not establish that they were recorded prior to issuance of notice. Appeal is dismissed. 2020 (3) TMI 883 Correct head of income - leasing and renting of immovable properties with all infrastructural facilities with providing maintenance and related activities of the said immovable properties sub-leasing of already leased out property - income from house property or income from business - HELD THAT:- A perusal of the Judgment of the Hon'ble Supreme Court in RAYALA CORPORATION PVT. LTD. [ 2016 (8) TMI 522 - SUPREME COURT] would show that it only treats the assessee's income by leasing out the property as income from business and profession as claimed by the assessee. However, the said Judgment does not deal with the income under other heads and no finding has been given by the Hon'ble Supreme Court. Making it clear as stated above, as no finding has been given with regard to any other heads, this Court is of the view that as per the Judgment of the Hon'ble Supreme Court, the rental income derived from the house property should be treated as business income. Hence, the question of law viz., 1 (a) is answered in favour of the assessee. Income from maintenance charges and air conditioning hire charges - It should not be treated as business income as it is covered by the Judgment of this Court in the case of Tarapore Co. Vs. Commissioner of Income Tax [ 2002 (8) TMI 47 - MADRAS HIGH COURT] wherein this Court has held that Service charges received from tenants are liable to be assessed as income from other sources and not as income from house property . Hence, the question of law viz.,1 (b) is answered in favour of the Revenue. 2020 (3) TMI 882 Assessment u/s 153C - addition of interest payment u/s 69C on the basis of the documents seized from a third party - penalty under Section 271D and 271E Levied - Such documents seized from the third party reflected loan transactions in cash - HELD THAT:- Tribunal took notice of the fact that such documents were not found or recovered from the possession of the assessee. In such circumstances, no presumption under Section 132(4A) as well as under Section 292C of the Act 1961 could be drawn. The Tribunal also took notice of the fact that the Assessing Officer had based his findings on the basis of a statement, but the statement has not been found to be acceptable in view of the conflicting stance. The Tribunal concurred with the findings recorded by the CIT(A) that it is not established that the loans were obtained and repaid in cash. The Tribunal also took notice of the fact that the quantum proceedings had attained finality. In short, in view of the concurrent findings of the fact recorded by the two authorities, there is nothing to substantiate the case of the Revenue that the assessee had obtained the loan in cash and the same was also repaid in cash. In view of the aforesaid findings of fact recorded by the Tribunal, we are of the view that none of the questions, as proposed by the Revenue, could be termed as substantial questions of law 2020 (3) TMI 881 Penalty u/s 271(1)(c) - Whether 'mens rea' or deliberate attempt is not essential for levy of penalty, if it is established that assessee has furnished inaccurate particulars or concealment of particulars of income, penalty is levaible? - HELD THAT:- A bare perusal of the provisions of section 271( 1)(c) would indicate that there has to be concealment of the particulars of the income or furnishing of inaccurate particulars of the income of the assessee. As held by the Supreme Court in the case of Reliance Petro products Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] the meaning of the word particulars used in the Section 271(1)(c) would embrace the meaning of the details of the claim made. The principal argument of revenue that at the time of filing of the return, the claim was made as revenue expenditure, while the Assessing Officer treated the same as the capital expenditure, we are not in a position to accept the contention as canvassed on behalf of the Revenue. As held by the Supreme Court in Reliance Petroproducts Pvt. Ltd. [Supra] unless the case is strictly covered by the provision, the assessee cannot be exposed to penalty. In short, the penalty provision cannot be invoked unless a clear cut case is made out - making an incorrect claim by any stretch of imagination would not tantamount to furnishing inaccurate particulars. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing the inaccurate particulars. Therefore, assuming for a moment, the claim was made as revenue expenditure, but in fact, it was found to be capital expenditure that by itself would not be sufficient to arrive at the conclusion that the case is one of inaccurate particulars. - Decided against revenue. 2020 (3) TMI 880 Correct head of income - franchise fees charged by the appellant - income from house property or business income - HELD THAT:- The issue has already been decided in the Judgment of this Court in the case of Tamil Nadu Toursim Development Corporation Ltd., Vs. Deputy Commissioner of Income Tax reported in [ 2014 (9) TMI 431 - MADRAS HIGH COURT] . Hence, in view of the above, the appeals are liable to be dismissed. The questions of law framed are answered against the appellant. 2020 (3) TMI 879 Levy of late fees u/s 234E - statement processed u/s 200A - Justification in confirming the levy of late fee u/s 234E in the statement of tax deducted at source processed u/s 200A even when when the amendment brought in the Finance Act 2015 w.e.f. 01.06.2015 paved the way for levying the fee u/s 234E in the statement processed u/s 200A - HELD THAT:- In the given facts and circumstances of the case as well as following the decisions given by us in the case of State Bank of India, Genda Chowk [ 2018 (11) TMI 1714 - ITAT INDORE] and M/s. Madhya Pradesh Power Transmission Ltd. others [ 2018 (12) TMI 1323 - ITAT INDORE] are of the opinion that in the given set of facts of the instant appeals wherein fee u/s 234E of the Act was levied in the statements processed u/s 200A of the Act before 01.06.2015 i.e. before the amendment brought into effect from 01.06.2015 in section 200A of the Act thereby enabling the revenue authorities to raise demand in respect of levy of fees u/s 234E of the Act. CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer. Accordingly findings of ld. CIT(A) in all these appeals are reversed and revenue is directed to delete the levy of fees u/s 234E of the Act in all these 4 cases. Thus, common issue raised in all these appeals are decided in favour of the assessee. 2020 (3) TMI 878 Penalty u/s 271(1)(c) - Defective notice - non specification of charge - HELD THAT:- Notice clearly shows that the Assessing Officer did not specify under which limb of the provision he has initiated the proceedings. Moreover, the penal proceedings are separate from assessment proceedings and while initiating penalty proceedings u/s 271(1)(c) of the Act, it is incumbent upon the Assessing Officer to demonstrate under which limb he is proposing levy of penalty If the notice is read with the decision of M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] in our considered opinion, the penalty will not survive. As decided in M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] issued by the Assessing Officer u/s 274 r.w.s 271(1)(c) of the Act to be bad in law as it did not specify which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The issue was decided in favour of the assessee. 2020 (3) TMI 877 Loss of valuation of Held to Maturity (HTM) securities when HTM securities are capital in nature - HELD THAT:- It is evident that this issue of allowability of loss in value of HTM securities was decided in favour of the assessee and against the Revenue in assessee‟ own case [ 2019 (6) TMI 1456 - ITAT PUNE] by the Co-ordinate Bench of the Tribunal, Pune. Considering the settled nature of the issue, we are of the opinion that pending of the appeal before the Hon‟ble Supreme Court is not a ground for not adjudicating the issue before us. Accordingly, we find that the order of the Ld. CIT(Appeals) is fair and reasonable and same does not call for any interference. Hence, grounds raised by the Revenue in both the appeals are dismissed. Provision for bad and doubtful debts as per Section 36(1)(viia) - HELD THAT:- AR has fairly admitted that the Tribunal in assessee s own case in assessment year 2010-11 has restricted deduction u/s. 36(1)(viia) to the extent of provision made. Thus, in view of the admitted position, this ground of appeal by the assessee qua the claim of deduction u/s. 36(1)(viia) is allowed to the extent of provision actually made for bad and doubtful debts in the books of account. Accordingly, the ground No. 2 of the appeal is partly allowed in favour of assessee. Disallowance u/s.14A r.w.r. 8D(2)(iii) - HELD THAT:- No disallowance u/s. 14A is warranted in respect of shares held by the assessee as stock in trade. Disallowance made u/s. 40(a)(ia) on short deduction of tax - HELD THAT:- Hon‟ble Calcutta High Court in the case of Commissioner of Income Tax Vs. S K Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] deleted the disallowance made u/s. 40(a)(ia) on short deduction of tax. Following the parity of reasons the disallowance made in the assessment year under appeal is deleted. Applicability of the provision u/s.115JB(2)(b) - HELD THAT:- As perusing the orders of the Assessing Officer and Ld. CIT(Appeals) and also the amended Clause(b) read with proviso to Section 211(2) of the Companies Act, 1956, we find there is a requirement of verification of facts whether the assessee is a Banking Company or Corporation or otherwise. The orders of the Assessing Officer or the Ld. CIT(Appeals) are silent on the aspect of the arguments of the assessee that it is not a Banking Company. To that extent, the order of the Ld. CIT(Appeals) is not a speaking order as per Section 250(6) of the Act. Therefore, we are of the opinion that the order of the Ld. CIT(Appeals) stands erroneous so far as the interpretation of Explanation 3 of the Section 115JB of the Act. Explanation commencing on or before 01.04.2012 should be properly interpreted by the Ld. CIT(Appeals) in the remand proceedings. In view of the above facts and circumstances, we remand the issue back to the file of the Ld. CIT(Appeals) who shall pass a speaking order after hearing the submissions of the assessee on the aspect of applicability of provision 115JB 2020 (3) TMI 876 Deduction u/s 54F - LTCG - construction of residential flat - conversion of capital assets into stock in trade - HELD THAT:- As per amended sub-section(2) of section 45 of the Act, which was inserted by the Taxation Legislation (Amendment Act), 1984 w.e.f. 1.4.1985, notwithstanding anything contained in sub-section (1), the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income tax as his income of the previous year in which such stock in trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. In view of above CBDT circular and order of Special Bench of Kolkata Bench of the Tribunal in the case of Octavius Steel Co. Ltd [ 2002 (5) TMI 204 - ITAT CALCUTTA] have no hesitation to hold that the Assessing Officer was also not correct in denying benefit of section 54F of the Act to the assessee on the ground that residential flat was not constructed after the date of transfer but alongwith saleable flats. Addition u/s 43CA - Amount pertaining to a residential unit offered as a settlement to one Md. Ekram way back in the year 2009 - Revenue s case is that both the lower authorities have rightly invoked se. 43CA of the Act since the corresponding agreement took place on 28.02.2015 - HELD THAT:- Departmental representative fails to rebut the clinching fact that the court proceedings qua the foregoing settlement attained finality in the year 2009 whereas sec. 43CA of the Act came into effect much later w.e.f. 01.04.2014. We therefore go by the clinching evidence of court settlement in the year 2009 than the agreement between the parties and direct Assessing Officer to delete the impugned disallowance. Interest computation u/s 234A and 234B - HELD THAT:- Issue restored to the Assessing Officer in view of hon ble jurisdictional high court s decision in Ajay Prakash Verma vs. ITO [ 2013 (1) TMI 140 - JHARKHAND HIGH COURT] 2020 (3) TMI 875 Excess cash found in search - addition based on document impounded during the course of survey - HELD THAT:- AO has incorrectly picked up the figure of ₹ 2,45,290/- against ₹ 7,02,030/- appearing in the books of account. Even otherwise, during the assessment proceedings, nothing adverse was pointed out by the AO, therefore, regarding the difference of ₹ 4,45,460/-, fact that the cash does not belong to the assessee was also completely ignored by AO and Ld. CIT(A). Keeping in view of the facts and circumstances of case and in view of the supporting documentary evidences at APB page no. 129-134, the addition in dispute is not sustainable in the eyes of law, therefore, we delete the addition of ₹ 9,02,200/- and allow the ground no. 2 raised in the appeal. Bogus purchases - HELD THAT:- AO has incorrectly picked up the figure of ₹ 2,45,290/- against ₹ 7,02,030/- appearing in the books of account. Even otherwise, during the assessment proceedings, nothing adverse was pointed out by the AO, therefore, regarding the difference of ₹ 4,45,460/-, fact that the cash does not belong to the assessee was also completely ignored by AO and Ld. CIT(A). Keeping in view of the facts and circumstances of case and in view of the supporting documentary evidences at APB page no. 129-134, the addition in dispute is not sustainable in the eyes of law, therefore, we delete the addition and allow the ground no. 2 raised in the appeal. Disallowance of purchase from three parties - HELD THAT:- When books of accounts have not been rejected, no disallowance of purchases can be made - we are of the view that the AO has not doubted the sale made by the assessee in the absence of the same, disallowance on account of purchases cannot be made. Secondly, the AO has not rejected the books of account as required under section 145 of the I.T. Act, therefore, the addition on account of purchases cannot be made. As stated by the Ld. Counsel for the assessee that the proof of the documentary evidences at page no. 253 to 265, the assessee company was assessed u/s. 143(3) of the Act in the subsequent years and no such addition has been made by the AO - Decided in favour of assessee. 2020 (3) TMI 874 Addition u/s 68 - Unexplained share capital - case of the assessee is that M/s. Seacom Merchants is assessed to tax and the very same amount has been brought to tax in the hands - HELD THAT:- As decided in M/S. C.P RE-ROLLERS LTD. VERSUS D.C.I.T, CIR-1, DURGAPUR [ 2019 (4) TMI 557 - ITAT KOLKATA] PAN details, bank account statements, audited financial statements, balance sheet, profit and loss account, Income Tax acknowledgments, and ROC statements etc were placed on AO's record. One of the directors of share applicant companies appeared before the AO in response to summon u/s 131 of the Act and explained the genuineness of three share applicants. Therefore, considering this factual position and precedents relied on the subject, as noted above, we delete the addition made by the assessing officer U/s 68 A share applicant company have been assessed to tax u/s 143(3) of the Act and the source of money in question was brought to tax in their hands, we uphold the order of the ld. CIT(A) that no additions can be made in the case of the assessee company's share applicant company have been assessed to tax u/s 143(3) of the Act and the source of money in question was brought to tax in their hands, we uphold the order of the ld. CIT(A) that no additions can be made in the case of the assessee company. - Decided in favour of assessee. 2020 (3) TMI 873 Revision u/s 263 - Addition u/s 40A(3) - HELD THAT:- We modify the impugned order of Pr. CIT and direct the AO to follow the propositions of law laid down by the Tribunal in the case of Binod Kumar Burnwal [ 2018 (12) TMI 1693 - ITAT KOLKATA] and Haridas Som [ 2019 (9) TMI 685 - ITAT KOLKATA] as held impugned disallowance provision does not apply in case of overwhelming evidence of genuineness of payments coupled with business exigencies which may go beyond the prescribed Rule 6DD of the Income Tax Rules, 1962 - thus not to disallow payments u/s 40A(3) if the same are genuine. 2020 (3) TMI 872 TP Adjustment - comparable selection - whether the turnover filter cannot be a criteria for exclusion of comparable companies? - HELD THAT:- In the case of Neilsen Sports India P Ltd [ 2019 (6) TMI 1396 - ITAT BANGALORE] the co-ordinate bench, by following the decisions rendered by other co-ordinate benches, has applied the turnover filter for examining the comparability of companies. In the instant case, the assessee shall fall under the category of companies having turnover of 1 200 crores, while the two comparable companies referred above do not fall under the above said category. Accordingly, by following the decision rendered by the co-ordinate bench in the case of Genisys Integrating Systems [ 2011 (8) TMI 952 - ITAT BANGALORE] we direct the AO/TPO to exclude both M/s Larsen Toubro Infotech Ltd and M/s Persistent Systems Ltd. 2020 (3) TMI 871 Exemption u/s.11 - assessee is involved in the commercial activity and held that assessee s case falls under the last limb last of the Section 2(15) - CIT (A) held that the activities carried out by the assessee are not in the nature of trade, business or commerce or rendering services in relation to the same - HELD THAT:- We hold that exemption u/s.11 could not be denied to the assessee as it is not involved in any commercial activity so as to fall within the purview of 1st proviso to Section 2(15). Accordingly, disallowances made by the Assessing Officer are deleted. 2020 (3) TMI 870 Disallowance u/s 14A - HELD THAT:- CIT(A) has already upheld the disallowance to the extent of exempt income earned by the assessee in the present year i.e., ₹ 14,000/- and as per the Tribunal order cited by learned AR of the assessee having rendered in the case of Sivan Securities [ 2019 (6) TMI 1109 - ITAT BANGALORE] and also the judgment of Hon ble Delhi High Court rendered in the case of CIT v. Joint Investment Pvt. Ltd. [ 2015 (3) TMI 155 - DELHI HIGH COURT] the disallowance under section 14A cannot the exceed the exempt income earned in the relevant year and hence, respectfully following the judicial precedence, we decline to interfere in the order of CIT(A) on this issue and accordingly revised grounds 2 to 5 raised by the Revenue are rejected. Disallowance made by the AO in respect of large increase in Tailoring and maintenance expenses - HELD THAT:- Assessee has explained about increase under the business promotion head because several new special schemes of customers / dealers were conducted and this increase in expenditure is ₹ 529.32 lakhs. The AO has made part disallowance to the extent of dip in gross-profits rate by 3.9%. This finding is also given by CIT(A) that the AO has not disputed the fact that the payments were actually made / incurred in the normal course of business of the assessee. Hence, on this issue, we find no infirmity in the order of CIT(A) and therefore, we decline to interfere. Disallowance made by the AO out of provision of warranty expenditure - Revenue submitted that the disallowance made by the AO has been deleted by CIT(A) without any valid basis and therefore, on this issue also, the order of CIT(A) should be reversed - HELD THAT:- As decided in M/S. ROTORK CONTROLS INDIA (P) LTD. [ 2009 (5) TMI 16 - SUPREME COURT] a liability is a present obligation arising from past events. Similarly, in para 13 of the same judgment, it is observed by Hon ble Apex Court that a past event that leads to a present obligation is called an obligating event and the obligating event is an event that creates an obligation which results in an outflow of resources. In the same para 13, it is observed that for a liability to quality for recognition, there must be not only present obligation but also the probability of outflow of resources to settle that obligation. In the facts of the present case, it is seen that from the past history, there is no likelihood that the obligation of warranty will result into an outflow of resources. Hence, respectfully following this judgment of Hon ble Apex Court and in view of the facts of the present case, we reverse the order of CIT(A) on this issue and restore that of the AO. - Decided in favour of revenue 2020 (3) TMI 869 Maintainability of appeal - low tax effect - HELD THAT:- Hon'ble Supreme Court in the case of The Commissioner of Income Tax-5,New Delhi Vs. Keshav Power Ltd. [ 2019 (8) TMI 811 - SC ORDER] has also applied the Circular No.17/2019 dated 08.08.2019 and has dismissed the appeal holding since the tax effect involved in the matter is less than ₹ 2 crores, going by the latest circular issued by the CBDT, we see no reason to interfere in this matter. The Special Leave Petition is dismissed, leaving all the questions of law open - The appeal filed by the Revenue is found to be non-maintainable. 2020 (3) TMI 868 Disallowance u/s. 14A - HELD THAT:- Upon perusal of assessee s financial statements as placed on record, we concur with the submissions of assessee s own funds far exceeded the investments held by the assessee which is evident from the fact that the assessee has year-end share capital and free reserves aggregating to ₹ 17.25 Crores as against investments of ₹ 9.16 Crores held by the assessee. Further, the incremental reserves during the year far exceeds the incremental investments made by the assessee during the year. In such a case, unless nexus of borrowed funds vis- -vis investments made by the assessee was established by AO, a presumption was to be drawn in assessee s favor that the investments were out of own funds. The cited case laws, which are binding in nature, squarely apply to facts of the case. Therefore, we hold that on given factual matrix, interest disallowance u/r 8D(2)(ii) would not be warranted. Therefore, we delete the same. Disallowance of direct expenditure u/r 8D(2)(i) - assessee has identified direct expenditure in the shape of demat charges and securities transactions charges and offered suo-moto disallowance of the same in its computation of income. These expenses are directly relatable to earning of exempt income and the same has already been disallowed by the assessee while computing its income under normal provisions. However, the same has not been added back while computing Book Profits u/s115JB. Keeping in view the clause (f) to explanation-1 to Section 115JB (2), the same would be added back while computing Book Profits u/s 115JB. The Ld.AO is directed to add back the same while making computations u/s 115JB. Disallowance of indirect expenditure u/r 8D(2)(iii) - AO is directed to consider only those investments which have yielded exempt income during the year and add back the same while computing income under normal provisions. However, the same would not be added back while making computations u/s 115JB as held by Delhi Tribunal (Special Bench) in ACIT Vs. Vireet Investment (P.) Ltd. [ 2017 (6) TMI 1124 - ITAT DELHI] . 2020 (3) TMI 867 Addition u/s 69B - assessment u/s 153A - search action u/s.132 and seized incriminating documents including a document in question pertaining to purchasing of three bigha land wherein assessee s son has signed document with one of the sellers out of two sellers who owned the land and it was so-called decided to sale land at the rate of ₹ 9 lakhs per bigha and it is claimed to have been by the revenue authority that on same document thumb impression of one of the sellers and two witnesses are also there and appellant s son has signed on behalf of the assessee - HELD THAT:- We cannot believe this fact of the revenue because no statement of sellers were recorded by the department. If there was some doubt, revenue ought to have recorded statement of the seller along with statement of witnesses. The Department does not have any other evidence other than the so-called banachhitti wherein appellant s son has made an agreement to purchase land at the rate of ₹ 27 lakhs. On the basis of aforesaid so-called banachhitti, addition cannot be made. The Department ought to have collected more evidences and should have recorded the statement of the other concerned parties. Thus, in view of the inadequate/insufficient evidence and enquiry, we delete the addition - Decided in favour of assessee. 2020 (3) TMI 866 Reopening of assessment u/s 147 - Jurisdiction of ITO to issue notice - notice u/s 148 was issued to the legal heir on behalf of the deceased assessee by ITO, Ward-1(4), Jaipur after seeking approval of JCIT, Range-1, Jaipur whereas the jurisdiction over the deceased assessee was with ITO, Ward 2(1), Jaipur under JCIT Range-2, Jaipur - HELD THAT:- ITO Ward 1(4), Jaipur herself has stated that the jurisdiction over the case does not lie with her but with ITO Ward 2(1), Jaipur. The aforesaid communication has been written to the Pr. CIT very next month of issuance of notice on 26.03.2015. Apparently, there was no further communication from the office of ld Pr. CIT and PAN of the deceased assessee was not transferred to ITO Ward 2(1) and continues with ITO Ward 1(4) and having issued the notice u/s 148, she continued with the proceedings and passed the assessment order u/s 147 read with 143(3) of the Act. Therefore, even though notice has been issued by ITO, Ward 1(4), Jaipur but once she is clear that the jurisdiction over the matter lies with ITO, Ward 2(1), Jaipur, merely because the permission has not been received from the ld. Pr. CIT for transfer of PAN, she cannot proceed and pass the assessment order in absence of requisite jurisdiction at first place which is governed by last known residence address of the deceased assessee as mandated by section 124(1)(b) of the Act. Therefore, where there is no dispute that the jurisdiction over the deceased assessee lies with ITO Ward 2(1), Jaipur, the assessment order passed by ITO Ward 1(4) cannot be sustained and set-aside for want of requisite jurisdiction. Where there is no dispute that the jurisdiction over the deceased assessee lies with ITO Ward 2(1), Jaipur, the assessment order passed by ITO Ward 1(4) cannot be sustained and set-aside for want of requisite jurisdiction. Regarding contention of the ld. DR that the assessee has not challenged the jurisdiction within the prescribed time limit provided u/s 124(3) - We find that the assessee has also challenged the service of notice u/s 148 and 142(1) and in any case where the ITO Ward 1(4) herself is clear that the jurisdiction in the case of the decease assessee doesn t lie with her and lies with ITO, Ward 2(1), Jaipur and has written a letter as earlier as 21.04.2015 to ld. Pr. CIT and there has been no action by the office of ld Pr. CIT till the passing of the assessment order, there is no basis to blame the assessee for filing the late objections as the provisions of section 124(3) comes in play only on satisfaction of provisions of section 124(1) of the Act. We are of the considered view that jurisdiction over the deceased assessee lies with the ITO, Ward 1(4), Jaipur and for want of requisite jurisdiction, assessment order passed u/s 143(3) read with 147 by ITO, Ward 2(1), Jaipur deserves to be set aside. - Decided in favour of assessee. 2020 (3) TMI 865 Penalty levied u/s 271(1)(c) - AO has nowhere specified that the penalty was either for concealment of income or for filing inaccurate particulars of income - HELD THAT:- We find that in the assessment order for all the three years the penalty has been initiated for concealment of income whereas in the notices issued for all the three years, penalty has been initiated for concealing the particulars of income or furnishing of inaccurate particulars of the income. In the penalty order the AO has held the assessee was liable for penalty for concealing its income by furnishing inaccurate particulars of the income. Thus, it is evident that the Assessing Officer is not certain on the charges the penalty has been levied whether it is concealment of income or furnishing of inaccurate particulars of income. The dictionary meaning of the word conceal is to hide, withdraw or remove from observation ; cover or keep from sight ; to avoid disclosing or divulging . Thus, concealment of particular of income means non-disclosure of particulars of income. On the other hand, where particulars are disclosed but such disclosure is not correct, true or accurate, it would amount to furnishing of inaccurate particulars of income . Thus, the two changes of levy of penalty are different. Hon ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] has cancelled the penalty where the Assessing Officer failed to strike out the specific reason of levy of penalty in the notice issued. In the case SSA Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] has also cancelled the penalty u/s 271(1)(c) in absence of charges of levy not clear in the notice issued. Hon ble High Court recently in the case of Pr. CIT Vs. M/s. Sahara India Life Insurance Company Ltd., [ 2019 (8) TMI 409 - DELHI HIGH COURT] following the decision of Hon ble Supreme Court in the case of M/s. SSA Emerald Meadows (supra) confirmed cancellation of penalty. Set aside and the penalty levied u/s 271(1)(c) of the Act in all the three assessment years are cancelled - Decided in favour of assessee. 2020 (3) TMI 864 Levy of penalty u/s 271(1)(c) - defective notice - HELD THAT:- Assessee placed on record copy of the notice issued before levy of the penalty dated 09.12.201, 31.05.2012 and 07.02.2014 in which the A.O. has similarly mentioned have concealed the particulars of your income or furnished inaccurate particulars of such income. Thus, the Department has been regularly issuing such notice to the assessee without specifying as to whether assessee has furnished inaccurate particulars of income or concealed the particulars of income - see M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT]. We are of the view that the penalty is not leviable in the matter. In this case, the A.O. issued show cause notices for levy of penalty under section 271(1)(c) of the Act which is bad in law as it did not specify in which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. See M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] - Decided in favour of assessee. 2020 (3) TMI 863 Addition made in respect of employees contribution towards PF/ESI - delay in remittance of Provident Fund and ESI - Addition u/s 36(1)(va) r.w.s. 2(24)(x) - HELD THAT:- As decided in M/S. INDUSTRIAL SECURITY INTELLIGENCE INDIA PVT. LTD [ 2015 (7) TMI 1063 - MADRAS HIGH COURT] we find that the Tribunal has rightly relied on the decision of the Supreme Court in the case of CIT V. Alom Extrusions Ltd. [ 2009 (11) TMI 27 - SUPREME COURT] whereby held that omission of second proviso to Section 43B and amendment to first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively, i.e., with effect from 1.4.1988 i.e., the date of insertion of first proviso. The Delhi High Court in the case of CIT V. Amil Ltd. [ 2009 (12) TMI 38 - DELHI HIGH COURT] held that if the assessee had deposited employee's contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003. In the present case, the assessee had remitted the employees contribution beyond the due date for payment, but within the due date for filing the return of income. Hence, following the above-said decisions, we find no reason to differ with the findings of the Tribunal.- Decided in favour of assessee. 2020 (3) TMI 862 Extension of stay against outstanding demand by the Department - Penalty levied u/s 271AAB - HELD THAT:- Earlier the appeal of the assessee was heard by the Tribunal on 7-02-2019 but it was released on account of other connected appeals of the group concerns which are required to be heard together. Tribunal noted that there is a common surrender on behalf of the group which has resulted penalty levied u/s 271AAB of the Act against all five persons of the group. Since the finding in an isolated case may have a direct bearings on the merits of the other cases which may also adversely affect the case of other group concerns, therefore, in order to avoid such a situation, the Tribunal directed the ld. CIT(A) to dispose off the appeals of other group concerns/ persons expeditiously vide order dated 30-04-2019. Despite the said directions, the appeals in the case of Shri Ashosk Chandak and Shri Naresh Choudhry are still pending for disposal before the ld. CIT(A) and penalty proceedings in the case of M/s. SMS AAMW Tollways Pvt Ltd are pending before the AO. When the lower authorities have not given any heed to the direction of the Tribunal, we find it a fit case for extension of stay against outstanding demand by the Department. The assessee cannot be put to face the harassment/ harsh treatment due to non-disposal of the appeal. Accordingly, we extend the stay for a further period of 180 days or till the disposal of the appeal whichever is earlier. 2020 (3) TMI 814 Deduction u/s 10B - AO not allowed the deduction to be made under Section 10B of the Act before the setting off of the brought forward unabsorbed depreciation loss of the earlier years - whether the deduction or exemption claimed by the Assessee under Section 10B has to be given prior to the carry forward depreciation allowance of the previous years or not? - HELD THAT:- Here in the case in hand, the Assessee is entitled to seek exemption by way of deduction under Section 10B, since it is a 100% EOU, which is an admitted fact. In that capacity, the Assessee claimed exemption / deduction of a sum of ₹ 29,26,65,024/- from out of the profit and gain of the business which amounts to ₹ 30,82,27,633/-. Also it claimed unabsorbed brought forward depreciation allowances relating to AY 2001-02 to the extent of ₹ 1,55,62,609/-, thereby shown the taxable income as Nil in the Return submitted for the AY 2004- 05. At the stage of the aggregate of the incomes under other heads, the provisions for set off and carry forward contained in Sections 70, 72 and 74 of the Act would be a premature for application. The deduction under Section 10A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the Assessee from the gross total income. Ultimately, the issue has been settled with the following words of the Hon'ble Apex Court in the M/S YOKOGAWA INDIA LTD. [ 2016 (12) TMI 881 - SUPREME COURT] the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI . Therefore the law has been settled by the said decision of the Hon'ble Apex Court, where in clear terms, it has been held that, the deductions either under Section 10A or 10B would be made while computing the gross total income of the eligible undertaking (like the Assessee) under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI of the Act. Here in the case in hand, the total income was first arrived at by the Revenue through the Assessing Officer in the Assessment Order by computing the total income by way of brought forward or carry forward the depreciation allowance of the earlier Assessment Years and set off the unabsorbed depreciation first and making the return Nil, thereby leaving the Assessee in a position where it could not claim any deduction under Section 10B as there was no income after set off of carry forward depreciation and unabsorbed depreciation from earlier years. This method of computing the income in the present case made by the Revenue is totally against the said law as has been declared by the Hon'ble Apex Court in the aforesaid decision in Commissioner of Income-tax v. Yokogawa India Ltd., ( cited supra ). No hesitation to hold that, the decision of the ITAT, which is impugned herein, would not stand in the legal scrutiny, in view of the law having been declared by the Hon'ble Apex Court. Therefore, we are of the view that, the Substantial Question of Law raised in this Appeal is covered by the said decision, therefore it can be answered accordingly. - Decided in favour of assessee 2020 (3) TMI 813 TDS u/s 192 on salary - reimbursement / payments made to employees under the head of uniform allowance - addition u/s 201(1) read with section 201(1A) - as per AO there was no provision for granting exemption on the basis of self certification - None of the employees on his own has added the allowances received to his own income in his individual income tax return and has claimed exemption under section 10(14)(i) - HELD THAT:- In terms of the Circular No.15 dated 8.5.1969, for the purpose of calculation of tax deductible at source under section 192, self-certification on the part of the employee that the conveyance was owned by him and being used by him for the purposes of employment was adequate. The present case relates to uniform allowance, which as noticed earlier is exempt from tax under section 10(14)(i) of the Act read with rule 2BB(1)(f) of the rules to the extent to which such expenses are actually incurred for that purpose. Under the Act, the liability to the employer is to deduct tax at source to the extent of the taxable income of the employee. If any part of such income is exempt, there is no liability to deduct tax at source from such income. Since liability to pay tax under the Act is of the individual employee and the liability on the part of the employer is only to deduct tax at source, Circular No.15 dated 8.5.1969 provides that self certification on the part of the employee is sufficient for the disbursing officer for calculation of the tax deductible at source. While the said circular relates to conveyances, the underlying principle can well be applied even in the case of uniform allowance. Therefore, if an employee gives a certificate certifying that he had incurred certain expenditure towards uniforms and maintenance thereof, insofar as the disbursing officer is concerned, that would be adequate while calculating the tax deductible at source. If the Assessing Officer has any doubt about the claim made by any individual employee, he can always take upon the issue during the course of assessment proceedings of such employee, inasmuch as, as rightly submitted by the learned counsel for the respondent, self certification is good enough for the employer not to deduct tax at source, it does not grant any immunity to the employee if the claim is incorrect. As held by this court in Commissioner of Income-tax v. Oil Natural Gas Corporation Ltd., [ 1998 (11) TMI 3 - GUJARAT HIGH COURT] whether an employee actually incurs such amount for official purposes is relevant for assessment of such employee because the exemption operates in his terms and conditions of availing such exemption that is to be fulfilled by him. Whether the employee is able to substantiate his claim to exemption has no bearing on the estimate of income liable to tax to be made by the employer. Under the circumstances, there is no legal infirmity in the impugned order passed by the Tribunal in placing reliance upon the above circular for holding that self certification on the part of the employees was adequate for the assessee not to deduct tax from the reimbursement allowance towards expenditure incurred for uniforms. This court is of the view that the impugned order passed by the Tribunal does not suffer from any legal infirmity warranting interference -Income Tax Appellate Tribunal was right in law in confirming the order of the Commissioner of Income-tax (Appeals) deleting the additions made by the Assessing Officer under section 201(1) - Decided in favour of the assessee and against the revenue. 2020 (3) TMI 812 Reopening of assessment u/s 147 - notice for reopening is issued beyond a period of 4 years on the basis of the verification of the material available during the scrutiny assessment - whether income chargeable to tax has escaped assessment for the failure on part of the assessee to disclose fully and truly all material facts, is emerging from the reasons recorded? - HELD THAT:- When the impugned notice issued under Section 148 of the Act is clearly beyond the period of four years from the end of relevant assessment year, in view of the first proviso to Section 147 of the Act, the respondent has to record the reason as to whether the income chargeable to tax has escaped assessment for the failure on part of the assessee to disclose truly and fully all material facts for its assessment for the year under consideration. On perusal of the reasons recorded as well as material on record, it is evident that there was no failure on the part of the petitioner to disclose truly and fully all material facts. It is settled proposition of law that for fishing inquiry, reopening of assessment is not permissible, that too, reopening beyond the period of four years from the end of the relevant assessment year when it is not even the case of the respondent that there is a failure on the part of the petitioner to disclose truly and fully all material facts. There is no tangible material for the respondent to come to the conclusion that there is escapment of income from assessment. Moreover, there is no live link for formation of such belief while recording the reasons for reopening the assessment. In such circumstances, when the entire material had been placed by the petitioner before the Assessing Officer, who accepted the view canvassed by the assessee then merely because he did not record such acceptance in assessment order would not be a ground to conclude that income has escaped the assessment, and therefore, the assessment is required to be reopened. Petition succeeds and is accordingly allowed. The impugned notice dated 29.03.2018 issued by the respondent under Section 148 is hereby quashed and set aside - Decided in favour of assessee. Customs 2020 (3) TMI 861 Violation of principles of natural justice - opportunity of hearing to the petitioner not provided - It is the case of the petitioner that the petitioner was never supplied with the copy of the order placing the petitioner company in the Denied Entities List (DEL) - HELD THAT:- SCN merely states that DRI has informed that the petitioner Firm is suspected to be misusing the Advance Authorisation . Details of the allegations against the petitioner have not been given in the Show Cause Notice. As far as the order placing the petitioner on DEL is concerned, the same is stated to have been passed on 26.06.2019, that is even prior to the issuance of the Show Cause Notice. In terms of Rule 9(2) of the Rules, the same was clearly premature and not permissible as on that date proceedings of cancellation of the license of the petitioner had not been initiated in accordance with Rule 10 of the Rules. Proviso to Section 9(4) of The Foreign Trade (Development and Regulations) Act, 1992 mandates grant of reasonable opportunity to the licensee of being heard before suspending the license - The learned counsel for the respondent has also produced before me the office file containing the purported order placing the petitioner on DEL. A perusal of the same shows that it records no reasons for placing the petitioner on DEL. It is merely a note on the letter received from DRI. The Impugned Order dated 26.06.2019, placing the petitioner on DEL, is therefore, clearly in breach of not only the Act, the Rules but also the Guidelines - Petition allowed. 2020 (3) TMI 860 Imposition of redemption fine in lieu of confiscation of conveyance - Interpretation of statute - section 115(2) of The Customs Act, 1962 - seizure and confiscation of Diesel Oil - illegal import or not - HELD THAT:- The proviso to sub-section (2) of section 115, categorically provides that where any conveyance is used for the carriage of goods or passengers for hire the owner of any conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be. Clearly, therefore, the redemption fine which can be imposed in lieu of the confiscation of the conveyance should not exceed the market price of the goods which are sought to be smuggled or smuggled goods . The adjudicating authority having found that the respondent had illegally imported/smuggled 150 MT of diesel oil valued at ₹ 75,00,000/- into the tug MV Al- Vard, with an intention to use the same for plying inside the sea without payment of duty thereon, confiscated the goods. The adjudicating authority also imposed customs duty amounting to ₹ 12,71,406/-. Further, the adjudicating authority found that tug MV Al-Vard valued at ₹ 6,75,00,000/- was found utilized in illegal import of diesel oil and ordered confiscation of the tug MV Al-Vard under sub-section (2) of section 115 of the Act of 1962. Having observed thus, the adjudicating authority in the operative portion, ordered confiscation of tug MV Al-Vard having assessable value of ₹ 6,75,00,000/- and imposed redemption fine of ₹ 1,75,00,000/- in lieu of confiscation under the proviso to sub-section (2) of section 115 of the Act of 1962 on the respondent - it is not now open to the appellant to contend that the proviso to sub-section (2) of section 115 is applicable only in the cases where conveyance is used for the carriage of goods or passengers for hire for smuggling of the goods and since the tug was not hired the proviso to subsection (2) of section 115 of the Act of 1962 is not at all applicable to the facts of the present case. The Tribunal, having regard to the proviso to sub-section (2) of section 115 of the Act of 1962, has observed that the maximum fine on the conveyance can be an amount not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be, and held that the maximum redemption fine which can be imposed cannot be more than ₹ 51,82,850/- - Thus, the Tribunal, on a correct interpretation of the proviso to sub-section (2) of section 115 of the Act of 1962 has held that the maximum fine on the conveyance cannot exceed the value of goods sought to be smuggled or the smuggled goods. The view taken by the Tribunal do not suffer from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law, warranting interference - appeal dismissed. 2020 (3) TMI 859 Provisional release of seized goods - Gold - Section 110 (A) of the Customs Act, 1962 - HELD THAT:- The petitioner had sent a representation claiming provisional release under Section 110 (A) of the Customs Act, 1962. Under Section 110 (A) of the Customs Act, 1962, the goods which were seized can be released provisionally provided a bond is executed by the person, from whom the goods were seized. It must however be kept in mind that penalty has to be decided during the adjudication process. During the adjudication process, the adjudicating authority has to take a further decision whether to provisionally release the seized goods or not - The learned counsel for the petitioner stated that the adjudication process under Section 125 of the Customs Act, 1962 and Section 110 (A) of the Customs Act and independent of the adjudication process and since it has been specifically indicated in the said statute, the petitioner can claim provisional release of goods on providing necessary bond on payment of duty and penalty. The penalty can be decided only during the adjudication process. The adjudicating authorities should be permitted to exercise their discretion in manner known to law. While exercising their discretion, they may also examine the statements made by the petitioner. Naturally, they would have to provide an opportunity to the petitioner of being heard. When the adjudicating authority is empowered even to reject provisional release of goods, unless such orders are passed by the adjudicating authority, this Court should not interfere with such process. The respondent/Adjudicating Authority has to take a decision to provisionally release the goods. The Adjudicating Authority may complete the adjudicating process on or before 30.04.2020 and may give an opportunity of personal hearing to the petitioner, if he so requires - Petition dismissed. 2020 (3) TMI 858 Maintainability of appeal - appellant submitted that till the clarification is issued by the Kingdom of Thailand in terms of the said order, no effective reply could be given to the impugned show cause notice dated 14.11.2012 and therefore, no useful purpose will be served by relegating the Assessee before the concerned authority - HELD THAT:- No interference is called for in the order of the learned Single Judge, which in our opinion, adequately protects the interest of the Assessee / appellant before the concerned authority as well. It is needless to say that explanation has to be submitted by the Assessee in pursuance of the impugned notice dated 14.11.2012 and the Assessee is free to raise all the contentions before the concerned authority. Since the learned single Judge has already protected the interests of the Assessee / appellant that no final order will be passed by the concerned authroity without appropriate explanation with regard to the treaty to the Kingdom of Thailand, we think that when such clarifications are received by the Government, the Assessee is bound to again have his say before the concerned authority. The directions issued by the learned Single Judge call for no interference by this Court - Appeal disposed off. 2020 (3) TMI 857 Amendment in the shipping bill - Section 149 of the Customs Act, 1962 - rejection of request on the ground that as per the DGFT Public Notice such correction was only allowed for the period 01.06.2015 to 30.09.2015 Since, the present shipping bill were filed thereafter the correction cannot be made in the shipping bills - HELD THAT:- Only because DGFT Public Notice prescribe certain period that doesn t mean after that period, amendment cannot be made. Section 149 clearly provides for amendment in the documents such as Shipping Bill Entry, Bill of etc, in the case where document is on record at the relevant time - In the present case, at the time of export which is established from shipping bill wherein the appellant have categorically claimed the benefit of MEIS, therefore, there are no reason why the amendment in the Shipping Bill under section 149 should not be allowed. The appellant is entitled for amendment in the Shipping Bill as claimed by them - Appeal allowed - decided in favor of appellant. 2020 (3) TMI 856 Refrain from imposition of penalty - classification of imported goods - colour data projectors - whether classifiable under 8528 61 00 as projectors of a kind solely or principally used in an ADP system of Heading 8471 or under 8528 69 00? - Benefit of the Notification dated 1 March, 2005 - extended period of limitation - Section 28(4) of the Customs Act. Whether the colour data projectors imported by Sony India are classifiable under 8528 61 00 as projectors of a kind solely or principally used in an ADP system of Heading 8471 or under 8528 69 00? - HELD THAT:- The colour data projectors imported by Sony India are classifiable under Heading 8528 61 00 - reliance can be placed in the case of ACER INDIA (P) LTD. VERSUS CC [ 2009 (11) TMI 931 - CESTAT AHMEDABAD] and COMMR. OF CUS. C. EX., HYDERABAD-II VERSUS AVECO VISCOMM PRIVATE LTD. [ 2010 (9) TMI 436 - CESTAT, BANGALORE] . Entitlement of benefit of the Notification dated 1 March, 2005 - HELD THAT:- This Notification automatically grants exemption from payment of the whole of the Customs duty if the product is covered by the description specified in Column (3). All goods falling under 8528 61 are specified in Column (3) of the Table. It is only when there is any ambiguity in the Exemption Notification, that the Notification is required to be interpreted in favour of the Revenue - There is no ambiguity in the Exemption Notification dated 1st March, 2005 and indeed none has been pointed out by the Commissioner in the impugned order. Whether the extended period of limitation under Section 28(4) of the Customs Act could have been invoked in the present case? - HELD THAT:- It is not necessary to examine the contention raised by the Learned Counsel for the Appellant about the invocation of the extended period of limitation. Whether the Commissioner was justified in refraining from imposing penalty? - HELD THAT:- The reason given by the Commissioner is that the penal provisions under the relevant sections of the Customs Act were not invoked in the show cause notice - Revenue has not been able to place any portion of the show cause notice which calls upon Sony India to show cause why penalty should be imposed under particular sections of the Customs Act. The show cause notice is the foundation and unless an assessee is put to notice penalty cannot be imposed. Thus, no penalty could have been imposed upon the Appellant. Appeal allowed - decided in favor of appellant. Corporate Laws 2020 (3) TMI 808 Stay on operation, enforcement and effect of the law itself - directors of the defaulting company - Section 167(1) clause (a) of the Act - HELD THAT:- The order dated 15th October, 2019 passed on these petitions raising legal queries, sufficiently protects the interest of both sides. This Court has performed a balancing act. Therefore, taking that order and the queries further it is clear that Section 164 of the Companies Act, 2013 provides for disqualifications for appointment of director. By sub-section (1), the eligibility for appointment of the director of a company is the aspect dealt with. By sub-section (2), it is said that no person, who is or has been a director of a company, which has not filed financial statements or annual returns for any continuous period of three years, shall be eligible to be re-appointed as a director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so. Then, there is a proviso, which has been inserted by Act 1 of 2018. As far as Section 167(1)(a) is concerned, there, the vacancy would not occur in the case of a director, who has incurred the disqualifications specified in Section 164 more so, when he incurs that disqualification is sufficiently set out in the statute itself and in the order passed on 15th October, 2019. Applicability of principle of retrospectivity - HELD THAT:- The interpretation of the legal provision is a job or task to be performed by the Court and understanding of the legal provisions by a member of Executive or any Executive functionary cannot be a substitute for that exercise. The Court cannot rely upon them to interpret the legal provisions. The interpretation of the legal provisions must be based on the language of the statute. In such circumstances, we do not think that the interim relief as sought can be granted. A blanket stay or a relief having far reaching legal consequences as sought cannot be granted. The prayers in that behalf are rejected. The application for interim reliefs is disposed of in these terms. Insolvency & Bankruptcy 2020 (3) TMI 855 Validity of declaration of wilful defaulter - HELD THAT:- The initial order of the Identification Committee declaring the petitioners as well as the PMPL as wilful defaulters, was upheld both by the coordinate bench of this court on April 6, 2017 and affirmed by a division bench of this court, sitting in appeal over the order of the learned Single Judge, passed on June 12, 2017 - The fresh representation thereafter, before the Review Committee, might have contained several allegations, including some already adjudicated by the Identification Committee on merits, which attained finality, the scope of enquiry of the Review Committee, which was opened up only by the order of the Supreme Court dated May 8, 2019, was restricted, by the said order itself, to the subsequent event of corporate resolution and its effect on the wilful defaulter tag on the petitioners - the issue raised by the petitioners has to be turned down, since the Review Committee was justified in restricting its enquiry only to such subsequent event and its effect and not reopening the merits of the declaration of wilful defaulters by the Identification Committee, since the same had already attained finality. As far as the subsequent event is concerned, the petitioners are justified in arguing that since the wilful default tag was attached to the petitioners merely in the capacity of the promoters and directors of the defaulting company, which itself had been absolved of such default, automatically removing its wilful defaulter tag, such tag could not be sustained thereafter. The petitioners were castigated as wilful defaulters only due to the alleged actions taken by them in commission of the default by PMPL. Hence, the term wilful default , even in respect of the petitioners, does not pertain to their general conduct as company officials but is restricted to the default committed by the company, of which they were promoters/directors - the Review Committee adopted a palpably erroneous legal process in taking the view that the petitioners and the company were individually labelled as wilful defaulters. The impact of the sustenance of such tag would be severely detrimental to the petitioners, more so in view of the provisions of Section 29A of the Insolvency and Bankruptcy Code, 2016. Once the default itself is resolved through a Corporate Resolution Process and the company is itself absolved from such tag by its merger with a different company, the default cannot be said to continue in respect of the directors, since it has already been absolved. It was not separate causes of action, which led to the declaration of the petitioners and the PMPL as wilful defaulters, but the same alleged defaults - Once the default itself goes by virtue of a corporate resolution, the wilful defaulter tag of the petitioners, in the capacity of promoters and directors of such company only and not in their individual capacities, had to go. Thus, the Review Committee acted palpably without jurisdiction in refusing to withdraw the wilful defaulter tag attached to the petitioners, on an unjust and unfair basis. Petition allowed. 2020 (3) TMI 854 Violation of Principles of Natural Justice - an opportunity of hearing to the petitioner before passing the impugned order, not afforded - Section-5(8)(F) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the opinion of the Court, the petitioner has failed to make out any extra ordinary grounds to invoke Article-226 of the Constitution of India. As recorded in the preceding part of the order, the proceedings before the NCLT for proceeded in due course and the order-sheet also reflects the proceedings and the reasoned orders passed by the NCLT from time to time - The Court is therefore, of the view that though writ petition can be maintained, in view of the vast powers of the High Court under Article-226 of the Constitution of India. However, in the facts of this case, the Court is not inclined to exercise such powers in view of the existing statutory alternative efficacious remedy. The Court is of the view that any interference at this stage, even on the procedural aspect would bring ongoing proceedings under IBC to halt, which the Court is not inclined in view of time line that statute prescribes. In any case, where the petitioner has not challenged the ultimate order dated 07-02-2020, merely on procedural aspect, the Court is not inclined to quash and set aside the order dated 05-02-2020. Petition dismissed. 2020 (3) TMI 853 Maintainability of petition - non-performing asset - Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This is a writ petition instituted by a director, when admittedly, on the date of filing of the writ petition an Interim Resolution Professional had been appointed by the NCLT for executing Corporate Insolvency Resolution Process. This fact was suppressed. It was only stated in the affidavit that the respondent bank had filed a claim petition in C.P.No.1100 of 2018 before the National Company Law Tribunal (NCLT), Chennai. No other fact has been disclosed in the writ petition. Therefore, prima facie I hold that the Managing Director has suppressed a vital information from this Court while filing the writ petition and on that ground, the writ petition, has to be dismissed as not maintainable. The fact is that the on going process of project is under a cloud of suspicion since the Thoothukudi Smart City Limited has disclaimed offering of any project to the petitioner herein. Even otherwise, the petitioner should have informed the Interim Resolution Professional about the institution and filing of the writ petition. The writ petitioner has not only suppressed the facts before the Court but, deliberately screened material facts from the knowledge of the Interim Resolution Professional. Any Court can grant reliefs only to a person who comes to the Court with clean hands. Somebody who comes with dishonest intentions can never be granted any relief. Petition dismissed. Service Tax 2020 (3) TMI 852 Refund of service tax - time limitation - principles of unjust enrichment - refund denied on the ground that appellant did not produce evidence or documentary proof that the appellant has not passed the incidence of duty to its customers - Section 11B of the Central Excise Act, 1944 - HELD THAT:- Larger Bench of the Tribunal in the case of M/S VEER OVERSEAS LTD. VERSUS CCE, PANCHKULA [ 2018 (4) TMI 910 - CESTAT CHANDIGARH] examined the decisions of various Courts where Section 11B has been held to be not applicable to refund of any amount made under any mistake of law. In the present case, the refund claim filed by the appellant would be governed by the provisions of limitation prescribed under Section 11B of Central Excise Act, 1944. Since the refund was filed after expiry of limitation the same cannot be entertained. Unjust enrichment - HELD THAT:- This question would not arise as a refund is not sanctioned on merit. In these circumstances, refund is not admissible being barred by limitation as prescribed under Section 11B of Central Excise Act, 1944. In view of the claim being barred by limitation, other issues do not remain relevant. Appeal dismissed - decided against appellant. 2020 (3) TMI 851 Maintainability of appeal - incorporation of additional grounds in the appeal - Rule 10 of CESTAT Procedure Rules,1982 - Refund of service tax - service tax paid on transportation of iron ore, from the mining site to the appellant s crusher plant, located 6 km away from mining area - reverse charge mechanism - Section 11B of the Central Excise Act,1944 as applicable to service tax vide Section 83 of the Finance Act,1994 - HELD THAT:- In view of the specific provision under Rule 10 of the CESTAT Procedure Rules, we are inclined to entertain the misc. applications, seeking incorporation of additional grounds. The misc. applications are allowed, which have substantial bearing on the main appeals. On going through the relevant documents, such as, the contract between the appellant and the raising contractors, the monthly bills raised by them on the appellant, the transit pass in Form-G , issued by the mining authority for the purpose of payment of mining royalty, and transportation of iron ore from the mines site. The raising contractors have not issued any other document in the name of the appellant, for the purpose of transportation of iron ore, which can be termed as a consignment note, as stipulated under Rule 4B of the Service Tax Rules,1994, as amended. As per the legal principles decided by different benches of Tribunal and relied upon by the appellant, the activities of transportation of iron ore in the present case, do not fall under the GTA service in terms of Sec.65(105)(zzp) of the Finance Act,1994, nor the raising contractors fall under the definition of GTA as defined under Sec.65(50b) of the said Finance Act. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 850 Levy of Service Tax - Cleaning Activity - removal of fly ash from the pond - HELD THAT:- The cleaning activity has been defined under Section 65(24b) of the Finance Act. Cleaning activity means cleaning, including specialized cleaning services such as disinfecting, exterminating or sterilizing of objects or premises, of- (I) commercial or industrial buildings and premises thereof: or (ii) factory, plant or machinery, tank or reservoir of such commercial or industrial buildings and premises thereof, But does not include such services in relation to agriculture, horticulture, animal husbandary or dairying; - thus, cleaning service has been also defined in the Board s Notification F. No. B1/6/2005-TRU dated 27/07/2005. Also, in the present case, the activity of excavation and transportation of fly ash from the pond, for channeling the slurry water-flow cannot be termed as cleaning activity in terms of Section 65 (24B) of the Finance Act. The Respondent is not clearing the fly ash with the objective of cleaning the pond or free the pond from contamination. Fly ash is being excavated and transported to the specified areas as per the contract. Works Contract service - sub-contract - work done as a sub contractor for McNally Bharat Engineering Co. Ltd., Purba Medinipur Zilla Parishad and Rites Ltd. - HELD THAT:- The contracts of railway in respect of Rites Ltd. under section 65(25b) of the Finance Act 1994. In the case of Purba Medinipur Zilla Parishad which relates evacuation of ash pond and it s transportation, this bench has already decided the issue in the case of the same assessee vide PURBA MEDINIPUR ZILLA PARISHAD VERSUS COMMISSIONER OF C. EX., HALDIA [ 2010 (5) TMI 369 - CESTAT, KOLKATA] . Also, It cannot be urged that there was any wilful suppression of facts with an intention to evade payment of duty as is the requirement of Section 73(1) of the Act. The Learned Commissioner has erred in confirming the demand and invoking the provision of 73(1) of the Finance Act 1994 as well as in imposing the penalty u/s. 78 and u/s. 76 of the Finance Act 1994 - the impugned order cannot be sustained and the same is set aside - Appeal allowed - decided in favor of appellant. 2020 (3) TMI 849 Applicability of interest to CENVAT credit recovery - Availed versus Taken and / or utilization of credit - Recovery of CENVAT credit wrongly taken or erroneously refunded - rule 14 of CENVAT Credit Rules, 2004 - HELD THAT:- From a perusal of rule 14 of CENVAT Credit Rules, 2004 and, in particular, of the disjunctive collation of taken , utilized and erroneously refunded with the expression wrongly qualifying, not three but only two, it would appear that the assumption of credit and a refund of credit, if wrong, would have to pay the price in the form of interest. However, it is unusual for utilization to be qualified with ineligibility on its own as utilization is solely for the purpose of discharge of tax/duty liability which, even if not warranted, does not, by any stretch of usage, behove description as wrongly. Such a transferred epithet can only reasonably mean utilization after having been wrongly taken and, thereby, made ineligible. The foundation of the confirmation of demand, charging of interest and the imposition of penalty is built upon sand - demand set aside - appeal allowed - decided in favor of appellant. 2020 (3) TMI 848 Interest on delayed refund - relevant time for calculation of interest - appellant have challenged that portion of the order to which the interest was not granted i.e. from date of deposit till the date of the order - HELD THAT:- The refund in case of pre-deposit governed by Section 35FF according to which the interest is payable from three months of the order by which the demand was set-aside. Therefore, there is no question of interest from the date of deposit. A similar issue has been considered by the Division Bench in the case of M/S. PETRONET LNG LIMITED VERSUS COMMISSIONER OF CUSTOMS, AHMEDABAD [ 2018 (8) TMI 111 - CESTAT AHMEDABAD] where it was held that in terms of clause (b) of sub-Section (1B) of Section 27, the period of one year shall be computed from the date of Commissioner (Appeal) order. Thus the interest is payable under Section 35FF wherein there is no provision for payment of interest on refund from the date of deposit - appeal dismissed - decided against appellant. 2020 (3) TMI 847 GTA Services - appellant paid amount towards transportation of goods - reverse charge mechanism - revenue neutrality - HELD THAT:- The appellant is entitled to get the benefit of CENVAT credit on the GTA services, therefore, making the situation revenue neutral. It is further observed that this Tribunal in the case of M/S STAR ALLOYS CHEMICALS PVT. LTD. VERSUS CCE ST, RAIPUR [ 2018 (4) TMI 363 - CESTAT NEW DELHI] , wherein in identical situation has held that in the case of GTA service, CENVAT credit is available, therefore extended period cannot be invoked. Normal period of limitation - HELD THAT:- Hon ble Supreme Court in the case of COMMISSIONER OF C. EX., PUNE VERSUS COCA-COLA INDIA PVT. LTD. [ 2007 (4) TMI 17 - SUPREME COURT] , COMMISSIONER OF C. EX. CUS., VADODARA VERSUS NARMADA CHEMATUR PHARMACEUTICALS LTD. [ 2004 (12) TMI 93 - SUPREME COURT] , has held that if there is no revenue implication involved, then no tax is required to be paid. It has been further held that, if for the same assessee, tax paid is modavable/cenvatable, then no tax is required to be paid - the appellant is not liable to pay tax for normal period of limitation as well. Further, the appellant has deposited an amount of ₹ 6,50,002/- during the course of investigation, and on specific query, it has been replied by the appellant that they have taken CENVAT Credit on the same. Therefore, that amount needs to be confirmed, as they have already taken the credit. Therefore, the balance service tax demand along with interest and penalty are not sustainable in the eyes of law and is hereby set aside. Appeal allowed on merits as well as on limitation. 2020 (3) TMI 846 GTA service - service of transportation of goods by road - demand of differential tax arising from the benefit of notification no. 35/2004-ST dated 3rd December 2004 available to providers of transport of goods by road service - HELD THAT:- The first of the two impugned orders is not convincing in the refutation of the claim of the assessees that carriage of goods or articles from door to door suffices to exclude the ambit of transportation of goods by road service from such activity. Neither does the ground of appeal against the second of the impugned orders nor has Learned Authorised Representative much to add in support of this premise. Though there is overwhelming emphasis on door-to-door in the circulars relied upon by that authority, this does not, in our opinion, constitute the sole defining distinction between the two rival entries. Doubtlessly, time sensitive is of critical relevance; however, neither of the two show cause notices advert to any special treatment accorded to one or more of the several consignments sought to be covered within the taxability as courier agency service ; indeed, it would appear that, in the absence of any evidence other than the statements relied upon in the two show cause notices, the determination in the first adjudication order is founded upon assumptions and presumptions. In addition to time sensitivity , there is another factor, that is no less critical, distinguishing the two taxable services: the inalienable presence of a person accompanying the document, goods or articles. Both the impugned orders are in consensus that there is no person in evidence other than the obvious driver of the goods carriage and, while the later does not consider that to suffice for conformity with the definition, the former deems that to be sufficient. There is an inherent flaw in this logic: the rendering of transportation of goods by road service cannot be bereft of the presence of the driver and would, in circumstances of door-to-door delivery, transform such activity to that of courier agency service even in the ostensible absence of time sensitivity - the distinction between the two taxable entries cannot be left to such vaguely founded conclusions as revealing of legislative intent. This is apparent in the contradictory viewpoints in near identical proceedings emerging from the two adjudication proceedings. The assessee-appellant has acknowledged one of the computations of tax recovered but not deposited. The adjudicating authority, after appropriating the subsequent deposit, along with interest thereon, has concluded as due compliance. We have no reason to interfere with that portion of the order - Insofar as the contested amount of ₹ 2,15,772, along with interest thereon, alleged to have been recovered from recipients of service is concerned, no evidence has been presented before us of not being obliged to comply with section 73A of Finance Act, 1994. We, therefore, find no grounds to interfere with that portion of the order, too. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 845 CENVAT Credit - input services - courier services - services received in India from the foreign service providers/co-loaders - reverse charge mechanism - period from May 2006 to August 2007 - CBEC Circular dated 31.10.1996, F.No. 341/43/96 - HELD THAT:- The issue decided in the case of FIRST FLIGHT COURIERS LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-II [ 2016 (8) TMI 145 - CESTAT MUMBAI] where it was held that the services received by the courier agency from the co-loader is not liable to Service Tax, and further where such service is provide by a co-loader situated outside India, the said activity is beyond the territorial jurisdiction of Service Tax Law and on this account also not taxable. The issue is wholly revenue neutral, as the appellant courier agency is entitled to input service credit and moreover, they have admittedly paid tax on the gross amount, and on this score also, the part of the amount cannot be taxed again, which is incurred by them for payment to co-loader (overseas). Appeal allowed - decided in favor of appellant. 2020 (3) TMI 844 Levy of Service Tax - amount which employer recovers out of the salary paid to the employee if the employee breaches the contract of total term of employment - HELD THAT:- The term of contract between the appellant and his employee are that employee shall be paid salary and the term of employment is a fixed term and if the employee leaves the job before the term is over then certain amount already paid as salary is recovered by the appellant from his employee. This part of the recovery is treated by Revenue as consideration for charging service tax. The said recovery is out of the salary already paid and we also note that salary is not covered by the provisions of service tax - Appeal allowed - decided in favor of appellant. 2020 (3) TMI 811 Power of service tax department to Audit and seek information - Post GST era - Rule 5A of the Service Tax Rules, 1994 as having lapsed w.e.f. 01.07.2017 - Held that:- From Section 94 of the Finance Act, 1994 it would be seen that the Central Government has been empowered to make Rules for carrying out the provision of Chapter 5 of the Finance Act, 1994, which contains the provisions in relation to levy of service tax. Power of Central Government to frame Rules - Held that:- The specific aspects in respect of which the Rules may be framed as enumerated in clauses (a) to (m) of Section 94(2) do not take away the general and omnibus power to make Rules conferred by the opening words of Section 94 (2). The Parliament consciously while enumerating the specific matters in respect of which Rules may be framed, preserved the general Rule making power of the Central Government. The only statutory limitation placed on the said Rule making power is that the Rule(s) should be framed for the purpose of enforcing the service tax regime. Therefore, the power of the Central Government to frame rules for carrying out the provisions of the service tax regime was exhaustive, and there is absolutely nothing to suggest that the said power did not encompass the power to frame a Rule of the kind as Rule 5A, as framed w.e.f. 28.12.2007. Scope of Rule 5A - Held that:- The power vested in the Competent Authorities to recover service tax not levied or paid, or short levied or short paid, or erroneously refunded [under Section 73 of the Finance Act, 1994] would remain a dead letter, if the Competent Authority under the Act is not empowered in terms of the Rule 5A. The said Rule 5A is, even otherwise, relatable to Clause (k) of Section 94 (2), since the said Rule while casting an obligation on the assessee to produce the records, he is obliged to maintain under the Finance Act, 1994, simultaneously empowers the Competent Authorities to ensure compliance of the said obligation. Thus, we reject the submission of learned senior counsel for the Petitioner that the Central Government lacked the authority and competence to frame Rule 5A. Post GST era - Held that:- there is nothing to show that the Parliament intended to grant blanket immunity to all assessees whose past acts and omissions may, otherwise, fall foul of the provisions of, inter alia, Chapter V of Finance Act, 1994. On the contrary, it is clear to us that the intention of the Parliament was clearly to save not only ongoing investigation, inquiry, verification etc. but also to specifically enable the initiation of fresh investigation, inquiry verification etc. in respect of acts and omissions relating to inter alia, the erstwhile service tax regime. Conclusion:- the assessee is obliged to maintain and provide all the records prepared or maintained by it for accounting of transactions with regard to providing of any service; receipt or procurement of input services and payment for such input services; receipt, purchase, manufacture, storage, sale or delivery, as the case may be, in regard to inputs and capital goods; other activities such as manufacture and sale of goods, if any and; all other financial records maintained by him in the normal course of business. A perusal of the notice dated 06.11.2019 shows that the Respondents have called for records which the Petitioner is obliged to maintain in terms of Rule 5 of the Service Tax Rules. Therefore, we do not find merit in this submission either. 2020 (3) TMI 810 Claim of refund - SEZ unit - Interpretation of statute - Notification No. 09/2009-ST and 17/2011-ST and various provisions of SEZ Act - Revenue is of the view that since the Respondent supplied the electricity generated in their power plant located in SEZ Mundra in DTA also they are not entitle for refund - HELD THAT:- In the identical set of facts and also on the law point, this Tribunal in bunch of appeals filed by Revenue decided the issue in ADANI POWER LTD. VERSUS CST AHMEDABAD AND VICE-VERSA [ 2016 (3) TMI 231 - CESTAT AHMEDABAD] wherein the Tribunal, after analyzing the relevant notifications, various provisions of SEZ Act and correspondence made with SEZ authorities and Ministry of Commerce and Industries, it was held that mere supply of surplus power in DTA as mentioned in Rule 47 of SEZ Rules, cannot be construed that the assessee carries on business, as there is no DTA Unit of the assessee. Apart from that, SEZ, Mundra, directed the assessee to claim refund in terms of Para 2(c) of the notification, then, rejection of refund claims considering under Para 2(d) of notification by the Adjudicating authority is totally unwarranted and cannot be sustained. Whether Commissioner (Appeals) has power to remand the matter to Adjudicating Authority? - HELD THAT:- This being a case of refund of service tax, clearly covered by the ratio of Hon ble Gujarat High Court judgment in the case of COMMISSIONER OF SERVICE TAX VERSUS VERSUS ASSOCIATED HOTELS LIMITED [ 2014 (4) TMI 406 - GUJARAT HIGH COURT] . In the said judgment, the Hon ble High Court has also referred to the judgments of Hon ble Supreme Court in the case of MIL INDIA LTD. VERSUS COMMISSIONER OF C. EX., NOIDA [ 2007 (3) TMI 8 - SUPREME COURT] . Therefore, the learned Commissioner (Appeals) has power to remand the matter to the Adjudicating Authority, therefore, on this count also, Revenue s appeal does not sustain. Appeal dismissed - decided against Revenue. 2020 (3) TMI 809 Imposition of penalty - Non-payment of Service tax - assessee had received services from abroad, viz. Management service/advise, Data Communication, use of Trademark, etc. - reverse charge mechanism - Suppression of material facts or not - HELD THAT:- Perusal of the provisions of Section 73, 77 and 78 of the Finance Act, 1994 states that Section 73(3) is very clear as it says that if a tax is paid along with interest before the issuance of show-cause notice, then in that case show-cause notice shall not be issued. In the present case, it is found that the contention of the appellant that they bona fidely believed that they are not liable to pay service tax but when the audit party raised the objection that they are liable to pay service tax, then they immediately paid the service tax along with interest which is admitted in the impugned order, is justified - Further except mere allegation of suppression, the Department did not bring any material to prove that there was suppression and concealment of facts to evade payment of tax. The imposition of penalty under Section 77 78 is not justified and bad in law - Penalty set aside - appeal allowed - decided in favor of appellant. Central Excise 2020 (3) TMI 843 Valuation - tin coils of width above 600 mm seized from the godown - non-speaking order - HELD THAT:- The Tribunal had not given any reason and had not considered the non-seizure, however made as if there was a seizure. When the order-in-original was challenged based on certain vital facts, the Tribunal, being the fact finding authority, ought to have given reasons for non-interference of the order-in-original. It is clear that the order of Tribunal is certainly a non-speaking order and the Tribunal failed to consider the grounds raised by the appellant. Merely reproduction of comments from the show cause notice or order-in-original is not sufficient for a Tribunal to dismiss the appeal filed by the appellant. Each and every ground raised should be sufficiently discussed by the Tribunal while passing any order, that too, upon recording the rival contentions raised by either parties before it. The order passed by the Appellate Authority does not show any light on such discussions and it is merely reproduction of the contents raised in the show cause notice. The Tribunal has not independently applied its mind for dismissal of the appeal. The Tribunal is obligated to record the reasons for its decision and bereft of such reasons in the order impugned, order of the Tribunal deserves to be set aside - the matter is remitted back to the Tribunal for fresh consideration on merits. Appeal allowed by way of remand. 2020 (3) TMI 842 Imposition of penalty u/r 26 of CER - Allegation of issuance of Cenvatable invoice to various customers without supplying of goods - HELD THAT:- Since, undisputedly, all the evidences relied upon in the present case were already considered by this Tribunal in the case of M/S SUN TEXTILE ENGINEERS, M/S SHAH FOILS LTD. VERSUS C.C.E. S.T. - SURAT-I [ 2019 (12) TMI 846 - CESTAT AHMEDABAD] . Therefore, there is no need to again deal with all the common evidences such as pen drives recovered, documents recovered, etc. - In the present case, the only issue is related to imposition of penalty under Rule 26 against the appellant on the ground that they have fraudulently passed on the credit without supplying the goods. The common evidence such as bill conditioning ledger, statements, etc were also considered. As the Tribunal has come to a conclusion that these evidences are not sufficient and accordingly, the charge of Shah Foils Ltd. that they have only issued the bills and not supplied the goods were not accepted by the Tribunal - In the present case, there are various traders in whose name the Cenvatable invoices were issued. In the case which arose out of same evidence, therefore, in the present case also, the penalty imposed on the appellants will not sustain - penalty set aside - appeal allowed - decided in favor of appellant. 2020 (3) TMI 841 CENVAT Credit - slag - exempt goods - benefit of N/N. 4/2006-CE dated 01.03.2006 - It is the case of the department that in terms of section 5A(1A) manufacturers are barred to remove absolutely exempted goods on payment of duty and referring to the Board s Circular No.940/01/2011-CX dated 14.01.2011 - Period of dispute is from November 2009 to August 2014 - HELD THAT:- Reliance can be placed in the case of M/S HINDUSTAN COCA-COLA BEVERAGES PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE [ 2013 (12) TMI 453 - CESTAT MUMBAI] and M/S NEULAND LABORATORIES LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, HYDERABAD- I [ 2013 (11) TMI 1339 - CESTAT BANGALORE] . The Tribunal while dealing with the implication of Board s Circular dated 14.01.2011 held that there is no provision or Rule under Cenvat Credit Rules, 2004, which puts an obligation on the receiver of goods to ascertain whether duty was payable on the said goods or not by the manufacturer supplier and then avail credit. Even a jurisdictional Central Excise officer at the manufacturers suppliers end may not be able to do the same as power of assessment has been taken away even from him. Board s Circular which has been issued without taking into consideration the implications of the provisions and the instructions, cannot be applied blindly for drawing adverse conclusion against the assessee. It was also held that merely on the strength of the said Circular dated 14.01.2011 Cenvat Credit cannot be denied, when there is no such provision in the Cenvat Credit Rules, 2004. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 840 Area Based exemption - goods manufactured in the factory shed at Khasra No. 115 and Plot No. B of Khasra No. 119 - Board Circulars dated 22.12.2010, 17.02.2012 and 01.04.2013 - seizure/confiscation of goods - imposition of penalties - HELD THAT:- It is undisputed that the appellant is entitled to area based exemption with respect to their main unit/ (unit-I) located at Plot F/119. Further, it is undisputed that so far the other two plots are concerned at Khasra No. 115 (Unit-II) earlier M/s Careplus was functioning and availing area based exemption vide declaration dated 27.12.2006. Thus, the appellant unit-II being admittedly the successor of M/s Careplus is also entitled to area based exemption till 27.12.2016. Further, admittedly at the present unit-III of the appellant (Plot B/119), earlier M/s Innovate was functioning and availing area based exemption vide declaration dated 27.12.2006, and admittedly the appellant unit-III is a successor of the said M/s Innovate and is accordingly eligible for exemption till 27.12.2016 under the exemption scheme (notification read with clarifications). There is a virtual corridor / private road existing between the three sheds, admittedly located in one industrial complex and hence for all practical purposes, the three units can be said to be adjacent to each other. Further, it is admitted fact that the two units namely M/s Fantasy and M/s Jyoti Lab have their entry exit gate from the South East common passage, whereas the three units of the appellant are using the common passage on the North West side. Thus, there is no practical interference in movement between the three units of the appellant and virtual corridor exits. In this view of the matter also, Unit-II and Unit-III of the appellant are held to be eligible for area based exemption. Thus, the appellant is entitled for area based exemption with respect to their unit-II located at Khasra No. 115 and unit-III located at Plot B/119 - appeal allowed - decided in favor of appellant. 2020 (3) TMI 839 Method of Valuation - Rule 11 read with Rule 4 or Rule 10(b)(ii) of Central Excise Valuation Rules, 2000 - related party transaction - inter-connected undertakings - mutuality of interest - the department s entire case is based on the fact that the appellant in its Annual Returns and Balance Sheets reflected the transaction with JBSL, SRBSL and JBIL as related party transactions - extended period of limitation - penalty - HELD THAT:- The show cause notice as well as the impugned order has mis-understood the difference in the concept of related party under the Companies Act, MRTP Act and Central Excise Act. In the present case, the department has failed to prove mutuality of interest between the appellant and its buyers. It is settled law that mutuality of interest is a two way street. Further, common directorship is not evidence enough to establish mutuality of interest. Also, the three companies did not have cross-shareholding at any point of time. It is settled law that there has to be extra commercial consideration or flow back of money and free flow of money from one company to another, cumulatively, for indicating interdependence of the units with each other. In the instant case, there has been no free flow of money from one company to another nor has there been any money given by the two companies to the appellant company - the allegation of mutuality of interest fails. Further, there is nothing on record to show that the price charged by the appellant company from the said two buyer companies i.e. JBIL and SRBSL, had been influenced by either the common directors on the Board of the companies involved or due to the shareholding of the promoter group in the appellant and the said two buyer companies - The price agreed by the appellant company to the said two buyer companies at the time of entering into contracts were for bulk quantities to be supplied over the next twelve months. Such rates were in consonance with the price then prevailing and the difference of 20-30% alleged in the show cause notice is in respect of rates charged to other independent buyers under changed market conditions at a later point of time, for much smaller quantities. No additional consideration flowed to the appellant company from either of the two buyer companies. Extended period of limitation - HELD THAT:- The demands of duty are barred by limitation as the show cause notices were issued beyond the prescribed period of one year as contained in Section 11A(1) of the Central Excise Act. Penalty u/r 26 of CER - HELD THAT:- No allegations against Mr.S.Mohapatra have been proved to conclude that he had reason to believe that the said goods were liable to confiscation. No material evidence has been placed on record in respect of the same. In view of the aforesaid, penalty under Rule 26 of the Central Excise Rules cannot be imposed. Application disposed off. 2020 (3) TMI 838 Valuation - Scope of the show cause notice (SCN) - short paid the Central Excise Duty - inclusion of MRP of these toffees in the MRP of the jar cleared by them containing 150 Bubble Gums and 20 Solano Toffees - extended period of limitation - HELD THAT:- It is not the case of the revenue that the jar containing 150 bubble gums and 20 Solano Toffees were to be valued as per the Section 4A of the Central Excise Act, 1944. On the contrary the finding of the Adjudicating authority that the said pack is an whole sale pack and not the retail sale pack has been admitted by the Committee of the Chief Commissioners while directing to file this appeal. After having done so, revenue has proposed to determine the value of whole sale pack by applying the provisions of Section 4A in respect of the Bubble Gums cleared by the appellant and the value of remaining Solano Toffees by treating them as free samples by application of Section 4 of the Central Excise Act, 1944 - We are not in agreement with such approach as by doing so revenue has proposed to disintegrate the wholesale package and determine the value of individual components under separate provisions of the same act. Section 4A is not applicable to the whole sale pack in the form in which the jar containing 150 Bubble Gums and 20 Solano Toffees was cleared the value of entire jar was to be determined by application of Section 4 as it existed at that time. Revenue has in the show cause proposed not to determine the value of the whole sale pack but only a component of the said pack under Section 4 - Section 4 should have been applied to the entire pack in the form in which it is cleared, and liability to duty determined. Since the show cause notice or the appeal filed by Revenue does not propose to determine the assessable value of wholesale pack in the form in which it is offered for clearance, there are no merits in the appeal filed by the Revenue - appeal dismissed - decided against Revenue. 2020 (3) TMI 837 100% EOU - refund of unutilized balance of cesses in cash - whether the appellant is entitled to cash refund of cesses in respect of which they had a balance in CENVAT credit account which they could not utilise on 01.07.2017? - HELD THAT:- The provisions of CGST allow them to carry forward the same as input tax credit under the CGST. However, the CGST Act does not allow them to carry forward the cesses as input tax credit. The appellant s case is that as a result they will be losing the credit balance and therefore, the same must be paid to them in cash. There is no provision in the CENVAT Credit Rules 2004 or the Central Excise Act 1944 to allow cash refund of cesses lying in balance in the CENVAT Credit account on the ground that appellant was not able to use the same. Appeal dismissed - decided against appellant. 2020 (3) TMI 836 CENVAT credit - Capital Goods - allegation that plant erected at site are embedded to the earth and as such, such plant facilities cannot be considered as excisable goods for the purpose of availment of CENVAT credit on such disputed items - requirement to avail 50% of CENVAT credit in respect of capital goods during the year of receipt - allegation that appellant had availed 100% CENVAT credit on the capital goods in the financial year of receipt. HELD THAT:- On receipt of the disputed goods, the appellant had availed CENVAT credit under the head inputs . Those goods received in the factory were subsequently used for assembly/manufacture of capital goods, installed within the factory of manufacture of final products. The period under dispute involved in this case is from September 2006 to December 2008 - all goods excepting the excluded items/goods itemised therein, were considered as inputs for the purpose of availment of CENVAT credit. Further, the explanation appended to the said definition clearly specifies that the goods used for manufacture of capital goods, which are further used in the factory of the manufacturer should also be considered as inputs. The documents/records submitted by the appellant clearly demonstrate that the goods in question were used for erection/manufacture of various capital goods namely clinkerisation plant, power plant etc., installed within the factory of manufacture of cement. Thus, as per the definition of inputs contained in Rule 2(k) ibid, the appellant should be eligible for the CENVAT benefit on the disputed goods used for manufacture of capital goods. The denial of CENVAT benefit on the disputed goods should not stand for judicial scrutiny, as against rules framed in the CENVAT Statute - appeal allowed - decided in favor of appellant. 2020 (3) TMI 835 Valuation - annual capacity of production - Section 3A of Central Excise Act, 1944 - demand was confirmed on the ground that appellant had not intimated the department before stopping production / closing of the factory - HELD THAT:- Taking note of the fact that there is stoppage of production during the period 1.4.1998 to 17.6.1998, the demand of duty, interest or penalty for the disputed period cannot sustain and the same is required to be set aside. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 834 CENVAT Credit - inputs/capital goods - MS Items - angles, channels and plates which are used for construction of plant and supporting structures of machinery - period from September 2008 to December 2010 - denial of credit on the ground that the MS items have been used as support structure of capital goods and for laying foundation - HELD THAT:- It is not found that these items have been used as support structure for capital goods. In paragraph-2 the ld. Counsel has explained as to the purposes for which MS items were used. Apart from a bald allegation in the SCN that these items are used as support structures, department has not put forward any cogent evidence to show that these are support structures for particular item of capital goods. As these items have not been used as support structures or for laying foundation, we find that the disallowance of credit is unjustified. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 833 Valuation - includibility - whether such tools supplied free of cost by M/s Tata Motors Ltd. would get included in the cost of parts on proportionate basis? - HELD THAT:- Larger Bench decision of the Tribunal in the case of MUTUAL INDUSTRIES LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, MUMBAI [ 2000 (3) TMI 74 - CEGAT, COURT NO. I, NEW DELHI] where it was held that Proposition that such inclusion need not be made when after successive income tax depreciation cost of the moulds become zero, not acceptable. Time Limitation - HELD THAT:- The appellant being manufacturer of motor vehicles part, the cost of the tools has to be included in the assessable value of the parts. As such, there are no infirmity in the invocation of the longer period of limitation. Appeal dismissed - decided against appellant. 2020 (3) TMI 832 Refund of MOT Charges - principles of unjust enrichment - Section 11B of Central Excise Act, 1944 - HELD THAT:- Though the refund is made under Section 11B, the said section provides for refunds of duty and interest whereas, in the present case, the refund is for MOT charges, therefore provisions of Section 11B will not apply. Consequently, the provisions of unjust-enrichment is also not applicable. In a similar case, where refund was in respect of not duty or interest but for differential penalty, this Tribunal in the case of M/S INDICON COPIER SERVICES VERSUS COMMISSIONER OF CUSTOMS (EXPORTS) , CHENNAI [ 2016 (3) TMI 606 - CESTAT CHENNAI] held that section for providing refund deals with only duty and interest element, therefore, it was held that unjust-enrichment is not applicable. The ratio of this judgment is applicable in the present case. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 831 Cenvat Credit - Process amounting to manufacture or not - whether the activities of opening the imported stock, inspection of the same, quality checks and repacking with affixture of sticker amounts to manufacture within the meaning of Section 2 (f) (iii) of the Central Excise Act, 1944? HELD THAT:- This Bench in the appellant s own case M/S. HONDA MOTOR INDIA P. LTD., M. RAMAKRISHNA REDDY, MANAGER (PARTS) , ATUL GUPTA, DY. MANAGER (ACCOUNTS FINANCE) VERSUS CCE, CHENNAI I [ 2018 (6) TMI 909 - CESTAT CHENNAI] where it was held that The processes carried out on the impugned goods received by the appellants from the port / other warehouses will amount to manufacture within the meaning of section 2(f)(iii) of the Act. There is no change with regard to facts or law and therefore, the above ruling applies to the current appeals as well, on all fours. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 830 Refund of Excise Duty - amount paid under protest under Compounded Levy Scheme - unjust enrichment - HELD THAT:- In view of the categorical declaration in the invoices that the assessee have collected duty on the basis of the transaction value, which is further supported by the accounting treatment in the books of account, it is held that there can be no presumption that the assessee has passed on the duty paid under Compounded Levy Scheme, to the buyers of their goods. Thus, the respondent has discharged presumption under Section 12B of the Act, that burden of duty has not been passed to the buyers of the goods, which is deposited under Compounded Levy Scheme - appeal dismissed - decided against Revenue. 2020 (3) TMI 829 SSI Exemption - clubbing of clearances - the allegation in the case is that unit Nos. II and III were not having manufacturing facility to manufacture the goods in question and the same have been manufactured by unit No. I which has been cleared on the invoices issued by units Nos. II and III, therefore the duty is required to be paid by the unit No. I for clearance of the said machines. HELD THAT:- The reports relied upon by the Revenue is without visiting and examining the machinery installed at unit No. II and unit No. III whereas the report produced by the appellants is based on physical verification of the machinery installed by the Chartered Engineer at unit No. II and unit No. III. As Shri N.K. Arora has given report after visiting the unit and have stated that Unit No. II and III are having manufacturing facility to manufacture the goods in question, therefore, the allegation made by the Revenue that unit Nos. II and III are not having manufacturing facility is not sustainable. Therefore, it is held that the unit Nos. II and III are having the facility to manufacture the goods in question, therefore, the allegation against unit No. I is not sustainable. The allegation is that all the units are family concern, therefore, the clearance of made by all the units are to be clubbed with the clearances of unit No. I - unit No. I is private limited company and unit No. II and III are partnership concern, therefore, it cannot be said that all the units are family concerns as the director and the company are two separate entities. The allegation of the Revenue that unit Nos. II and III are not having manufacturing facility and the same cleared clandestinely by unit No. I are based on assumptions and presumptions. Therefore, the demands against the appellant are set aside and no penalty is imposable on all the appellants. Appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2020 (3) TMI 828 Valuation - disallowance of deduction of target based discount - Vires of Section 9 (5) of the Jharkhand Value Added Tax Act, 2005 - amendment made in the year 2011 in the section - validity of retrospective effect given to this provision with effect from 1.4.2010 - Jharkhand VAT Act - HELD THAT:- The submission of learned counsel for the State that in the matters of economic concerns, the Court should not generally interfere, as the laws relating to economic activities should be viewed with greater latitude than laws touching civil rights, and the State must be left with wide latitude in devising ways and means of fiscal or regulatory measures, does not apply in the present case, as in this case, the constitutionality of Section 9(5) of the JVAT Act and the legislative competence of State Legislature in bringing sub-Section (5) in Section 9 of the JVAT Act, is challenged, on the ground that the same is beyond the legislative competence of the State, as in garb of Entry-54 List-II of Seventh Schedule of the Constitution of India, any transaction could not be added in Article 366(29A) of the Constitution of India, treating the same to be sale by a deeming fiction, even though, it is not a sale, within the meaning of Sale of Goods Act, or does not fall within the Article 366(29A) of the Constitution of India. The law is well settled in this regard right from Gannon Dunkerley s case [ 1958 (4) TMI 42 - SUPREME COURT ], in the year 1959, to Bharat Sanchar Nigam s case [ 2006 (3) TMI 1 - SUPREME COURT ], and Rajasthan Chemists Association s case [ 2006 (7) TMI 17 - SUPREME COURT ], in the year 2006, wherein the Hon ble Apex Court has dealt with the several earlier decisions and has come to the conclusion that in order to levy tax on sale, the transactions must fall within any of the clauses of Article 366 (29A) of the Constitution of India, or within the meaning of the Sales of Goods Act, for the purpose of levy of sales tax. In absence thereof, the Provincial Legislature cannot, in the purported exercise of its power to levy tax on sales or purchases of goods, tax even such transactions, which are not sales or purchases, by merely enacting that they shall be deemed to be sales or purchases by the dealers. In the present case, we find that the State Government has exceeded its legislative competence and has in that effort, treated the trade discounts / incentives as taxable transactions, treating them to be sale by a deeming fiction by bringing sub-Section (5) in Section 9 of the JVAT Act, and has thus sought to make such transactions taxable, which are in addition to the transactions described under Article 366(29A) of the Constitution of India, which the State Government could not do, and admittedly, prior to bringing of Section 9(5) of the JVAT Act, into the Statute Book, such transactions were never being subjected to tax under the JVAT Act. Thus, by bringing Section 9(5) in the JVAT Act into the Statute Book, the dealers have been put to a disadvantageous position, which was not there, prior to the amendment made in the year 2011, and this putting the dealers into a disadvantageous position was not within the legislative competence of the State Legislature - Though it is well settled that this Court should not interfere into the fiscal legislations, and the laws, relating to economic activities should be viewed with greater latitude than the laws touching civil rights, and even if there are possibilities of abuse, that cannot in itself be a ground for invalidating the legislation, but since the State action is not within the competence of the State Legislature, this Court has no option, but to strike down the action of the State Legislature, which was beyond its legislative competence. There are no difficulty in holding that Section 9(5) of the JVAT Act, brought into force by amendment in the JVAT Act in the year 2011, is beyond the legislative competence of the State Legislature, and the same is ultra vires Article 246(1) of the Constitution of India, and cannot be sustained in the eyes of law - Accordingly, sub-Section (5) of Section 9 of the JVAT Act, as it stood with effect from 1.4.2010 to 30.06.2017 in the Statute Book, is hereby, held to be ultra vires, and accordingly, it has to be treated as if never existing in the Statute Book. Petition allowed. 2020 (3) TMI 827 Question arisen for consideration is whether the meaning can be expanded to include manufacture of otherwise goods for purposes of petitioner obtaining From C on concessional purchase of HSD? By consent list on 26th March, 2020 under same heading. 2020 (3) TMI 826 Initiation of proceedings under Section 21(2) of Trade Tax Act - assessing authority came to the conclusion that entire transaction of sale of food grains to Assam was at the instance of the revisionist, thereafter, added the said turnover to the account of the revisionist - HELD THAT:- In the instant revisions, the revisionists has reiterated the same grounds which have been raised by him before the first appellate authority as well as the Tribunal. The assessing authority considering the fact that bank draft of ₹ 6 lacs was prepared at the behest of the revisionist adding the turnover of M/s Shanker Traders to the turnover of the revisionist. The only submission challenging the said finding is that the revisionist does not have an account with the Union Bank of India. In this regard, the argument of the revisionist is not convincing and liable to be rejected, as there is no requirement that a person has to be an account holder only then he can have a bank draft prepared. It is open for anyone to deposit the requisite fee and have demand draft/bankers' cheque prepared. There is no material or evidence to set aside the findings recorded by the Tribunal. Sufficient reasons have been stated and considered by the Tribunal which are available on record. The bank draft was made at the behest of the revisionist and his name finds mention in the papers including the builty. The revisionist cannot resile from the facts which have been recorded by the Tribunal and, therefore, there is no material on which the findings of Tribunal can be interfered. Revision dismissed. 2020 (3) TMI 825 Imposition of penalty u/s54 (1) (14) of the Trade tax act - dispute related only to pressure horns which according to the Authority are not used in tractors but are used in other vehicles like car, three wheeler etc. - HELD THAT:- In the instant revision no material has been produced by the revenue from which it could be determined that the finding of the Tribunal is contrary to record or perverse and that pressure horns cannot be used in auto tractors and that the levy of the penalty was justified. The Tribunal, has held that the pressure horns which were being transported were for use in the tractors, and no attempt has been made nor any material placed before us to upset the said finding recorded by the Tribunal, and therefore we find no infirmity with the findings recorded by the Tribunal. Revision dismissed. 2020 (3) TMI 824 Benefit of Form-D - Tribunal rejected the claim of the revisionist on the ground that since the matter relates to assessment year 1998-99 and submitted Form 3D after a period of two years as prescribed under the Act and therefore the benefit of the same cannot be granted to the revisionist - HELD THAT:- It is admitted case that the revisionist did not filed form 3-D before the assessing authority and the same were furnished subsequent to the passing of the assessment order. The Tribunal has recorded the fact that Form 3-D was submitted by means of an application under Section 12B of the Act before the Tribunal for acceptance of the said Form and to grant benefit of the same to the revisionist. The Tribunal has recorded a finding that form 3-D was pertaining to assessment year 2002-03, where as the assessment pertains to the year 1998-99 and therefore Forms have been procured by the revisionist after two years of the assessment, therefore, benefit of the same cannot be granted to the revisionist. Revision dismissed. 2020 (3) TMI 823 Levy of penalty u/s 54(1)(14) of U.P. Value Added Tax Act, 2008 - import of goods from outside the State - Form 38 had certain unfilled (blank) column - existenc eof mens rea or not - contravention of the provisions of Section 50 of the Act, 2008 - HELD THAT:- In the instant case it is admitted fact that the respondent had duly applied for and obtained Form 38 for import of goods and the Column 6 of the said Form was left blank on account of negligence of the respondent. It is only on account of non filling of Column nos. 2 to 6, penalty has been imposed upon the respondent. It has been submitted on behalf of the respondent that there was no intention to evade tax and the driver of the vehicle carrying the goods was carrying all the relevant documents including the bill/challan/bilty etc. from which the details of goods being carried on the vehicle could have been verified by the officer concerned and therefore there was no occasion for the assessing officer to pass penalty order, inasmuch as there was no intention on the part of the assesee to evade tax. The vehicle was accompanied by Form 38 and all other documents were being carried along with other documents and only due to human error column would remain unfilled. It was the duty of the Officer managing the Check Post who after discovering that some column of Form 38 found unfilled should have filled the same himself in the light of Circular dated 03.02.2009 and should have allowed the vehicle to proceed alongwith the goods. It is undisputed that the goods transported were the same which were mentioned in the various documents (bill/builty/challan etc.) carried by the driver of the vehicle. Revision dismissed. 2020 (3) TMI 822 Imposition of penalty u/s 54(1)(14) of the U.P. Value Added Tax Act, 2008 - contravention of the provisions of Section 50 of the Act, 2008 - existence of mens rea or not - HELD THAT:- Perusal sub Section 6 of Section 28A itself indicates that penalty can be imposed only after giving opportunity of being heard that the goods were being so transported in an attempt to evade payment of tax due or likely to be due under the Act and therefore mens rea becomes essential ingredient. Non-filling up of column no. 6 i.e. not mentioning of bill / cash memo / chalan / invoice number may lead to an inference that in case of non-checking of goods the declaration form may be re-used for importing goods of same quantity, weight and value to evade payment of tax but it cannot be the sole ground to impose penalty under Section 54(1)(14) of the Act, 2008. Satisfaction has to be recorded after giving opportunity to the dealer / person and after considering all the relevant materials / evidences on record that there was an intention to evade payment of tax. The guilty mind is necessary to be established to impose penalty under Section 54(1)(14) of the Act, 2008. In the present case, the vehicle was accompanied by Form 38 and all other documents were being carried along with other documents and only due to human error column would remain unfilled. It was the duty of the Officer managing the Check Post who after discovering that some column of Form 38 found unfilled should have filled the same himself in the light of Circular dated 03.02.2009 and should have allowed the vehicle to proceed alongwith the goods. It is undisputed that the goods transported were the same which were mentioned in the various documents (bill/builty/challan etc.) carried by the driver of the vehicle. Revision dismissed. 2020 (3) TMI 821 Imposition of penalty u/s 54(1)(14) of the U.P. Value Added Added Tax Act - blank From-38 - Whether under the facts and circumstances of the case, the Commercial Tax Tribunal was legally justified in deleting the penalty levied under Section 54(1)(14) of the U.P. Value Added Tax Act? HELD THAT:- The aforesaid question of law is infact a question of fact and the Tribunal being last forum for recording the findings of fact has given finding of fact that there was no intention on the part of the respondent to evade tax and therefore, the Tribunal has allowed the appeal of the respondent - This Court has perused the order of the Tribunal and do not find any infirmity in the same and no interference is required by this Court. The question raised by the revisionist is infact a question of fact and the same is accordingly decided in favour of the respondent and against the Revenue/revisionist. Revision dismissed. 2020 (3) TMI 820 Imposition of penalty u/s 54 (1) (14) of the U.P. Value Added Tax Act, 2008 - intent to evade tax - Learned counsel for the Revenue submitted that since Form 38 was filed with magic ink and, therefore, there was intention to evade tax - HELD THAT:- Concededly, at the time of interception of goods, other documents, namely invoices and bilty were also found. These documents were in order. Even Form 38 was found to be duly filled up evidencing the transaction under which the goods were being imported. The assessee had duly produced his books of accounts in which the transaction in question is duly accounted for. In such circumstances, merely on assumption that Form 38 could be re-used, the Assessing Officer was not justified in imposting penalty. Revision dismissed. 2020 (3) TMI 819 Best Judgement assessment - enhancement of taxable turnover - rejection of books of accounts - Section 8-A of the U.P. Trade Tax Act, 1948 as well as under Section 7(1)(2) of the Central Sales Tax Act - HELD THAT:- The Commercial Tax Tribunal, while passing the impugned order has recorded a fact that even previously in the year 1995-96, the books of accounts were rejected and the best judgment assessment was carried out. The findings of the Special Investigation team for the assessment year 1996-97 with regard to the fact that no books of account were found and no manufacturing activity was carried out no explanation for the same was given by the revisionist either before the authorities below of before this Court. The Tribunal has looked into all the aspects of the matter and considered the ground raised by the revisionist and has rightly upheld the rejection of the books of account of the revisionist and the assessment order passed by the Assessing Authority. The tribunal has also considered all the fact that the revisionist was a registered dealer with U.P. Khadi and Gramodyog Board and was supplying goods to Khadi Gramodyog. The findings recorded that the large amount of iron procured which was used in manufacturing was sham and such large quantity of iron could not have been procured which also does not tally with the output of the revisionist and after considering the entire proceedings the Tribunal has rightly upheld the rejection of books of account by the Assessing Authority and the same requires no interference. Revision dismissed. 2020 (3) TMI 818 Validity of ex-parte assessment order - intra-state sales - applicability of provisions of Section 6-A of the Act, 1956 - HELD THAT:- It is undisputed that the goods were transported from Allahabad to Calcutta. It is also admitted that for transportation of the said goods Form-F was issued by the dealer in Calcutta, the assessing authority on the basis of the above mentioned facts passed the assessment order in exercise of power under Section 21 of the Act, 1948 was done only on account of the subsequent developments and report submitted by the S.I.B. The said report of S.I.B clearly indicated that the revisionists had in fact sold the goods in question in Calcutta himself and that the provisions of Section 6-A of the Act, 1956 were not applicable in this case. The authorities were of the view that there was clear evasion of tax and second appellate order was passed. The only defect with the assessment order as has been mentioned by the counsel for the revisionist is that at best the said transaction would be inter state sale rather than intra state sale. He submits that the entire proceedings are based on a solitary material/evidence/ the report of S.I.B. If the report of S.I.B. is to be believed than the transaction was an inter state sale, the goods emanating from Allahabad were to be sold in Calcutta - It is undisputed that the report of S.I.B. clearly indicates that the goods were sold in Calcutta and the provisions of the Act, 1956 would be applicable rather than provisions of the Act, 1948. The matter is remanded to the tribunal to hear the revisionist only for the purpose of remanding the same to the appropriate assessing authority to assess the tax imposed on the revisionist on the basis of the admitted claim of the transaction - Petition allowed by way of remand. 2020 (3) TMI 817 Imposition of penalty u/s 4-B(5) of the U.P. Trade Tax Act, 1948 - diesel purchased against Form III-B - existence of mens-rea on the part of the applicant or not - admittedly diesel has been used in generator set for generation of electricity used for plant and machinery, used for manufacture of Khandsari namely notified goods - HELD THAT:- It is an admitted fact that the revisionist factory had no power connection and therefore had installed generator set for production of power which in turn was used to run the plant and machinery for manufacture of sugar. It has also been urged that the remaining amount of Diesel was used for maintenance and installation of machinery, which is permissible under the law. Looking into the facts and circumstances that the Revenue in exercise of power under Section 4-B of the Act, 1948 has granted recognition certificate to the revisionist for procuring Diesel Oil to be used for production of sugar and taking into consideration the judgment of this Court in the case of M/S SHREE BHAWANI PAPER MILLS LTD., M/S RAMA SHYAMA PAPERS LTD., M/S GOELS COIR FOAM (INDIA) PVT. LTD., M/S CAMPHOR AND ALLIED PRODUCTS, M/S N.P. AGRO (INDIA) INDUSTRIES LTD., M/S BHOLENATH INDUSTRIES LTD. VERSUS STATE OF U.P. AND ANOTHER [ 2015 (11) TMI 48 - ALLAHABAD HIGH COURT] , the revisionist was entitled for the benefit under the Act, 1948. Perusal of the impugned order passed by the Tribunal clearly indicates that there was no material before the Tribunal to conclude that the excess Diesel has been diverted for private gain or that the excess quantity of Diesel Oil was utilised for other purposes which was different from the purpose of manufacturing sugar. Before coming to such a finding, there should have been sufficient material before the Tribunal to reach such a conclusion. In absence of any such material, such a finding cannot be recorded by the Tribunal. The matter is required to be remanded to the U.P. Trade Tax Tribunal, to pass fresh orders - revision allowed by way of remand. 2020 (3) TMI 816 Levy of tax - Job-work - trading and sales in absence of Form-F - Section 6 A of the Central Sales Tax Act - HELD THAT:- The question regarding levy of sales act on the goods which are not accompanied by Form- F are on which the dealer cannot produce Form- F is no longer res-integra and has considered by the Hon'ble Supreme Court in the case of AMBICA STEELS LTD. VERSUS STATE OF UP. AND OTHERS [ 2009 (3) TMI 550 - SUPREME COURT] where it was held that even in cases where the dealer cannot produce Form- F he can still demonstrate before the authorities that the said transaction is not a sale and for which the Court has allowed the dealer to produce relevant document and material and other evidences to prove that the said transaction was not a sale on which the Central Sales Tax cannot be levied. The Supreme Court has given liberty to the dealer to appear and submit before the assessing authority the material from which it can be determined as to the nature of the transaction and the assessing authority after considering the entire material would come to a finding as to whether provisions of Central Sales Tax would be applicable under said transaction or not. It is directed that the revisionist will appear and submit before the assessing authority alongwith a certified copy of this judgement in six weeks to complete the assessing proceedings with regard to the said transaction only, on its own merits, after examining the record of transactions between the parties, keeping in mind that the assessee has not in possession of Form- F - Revision disposed off. Indian Laws 2020 (3) TMI 815 Termination Order - Action against the Judicial officer by the High Court - Misconduct - Charge of corruption - seeking reinstatement with consequential benefits and seniority - High Court vehemently contended that the termination order could not be labelled as punitive or arbitrary or having been passed without sufficient material - HELD THAT:- The entire objective of probation is to provide the employer an opportunity to evaluate the probationer s performance and test his suitability for a particular post. Such an exercise is a necessary part of the process of recruitment, and must not be treated lightly. Written tests and interviews are only attempts to predict a candidate s possibility of success at a particular job. The true test of suitability is actual performance of duties which can only be applied after the candidate joins and starts working. Probationers have no indefeasible right to continue in employment until confirmed, and they can be relieved by the competent authority if found unsuitable. Its only in a very limited category of cases that such probationers can seek protection under the principles of natural justice, say when they are removed in a manner which prejudices their future prospects in alternate fields or casts aspersions on their character or violates their constitutional rights. There is nothing on record in the present case to infer that the motivation behind the removal was any allegation. Instead, it was routine confirmation exercise. The evaluation of services rendered during the probationary period was made at the end of the first respondent s tenure, along with 92 others. Vigilance reports were called not just for the Respondent No. 1 petitioner, but also for at least ten other candidates - It is thus clear that the object was not to verify whether the allegations against the first respondent had been proved or not, but merely to ascertain whether there were sufficient reasons or a possible cloud on his suitability, given the higher standard of probity expected of a judge. Since Respondent No.1 has failed to establish that the High Court intended or has actually punished him for any defined misconduct, it stands crystallized that the object of the High Court on the administrative side was to verify the suitability and not enquire into the allegations against the first respondent. Independently also, it is not found that the foundation was the allegations but it was based upon a holistic assessment of the respondent s service record. Even taking an effects based approach, we do not feel that the order of non confirmation or the preceding circumstances would prejudice the respondent, meriting a higher procedural requirement. Appeal allowed - decided in favor of appellant. 2020 (3) TMI 807 Maintainability of petition - petitioner states that he has filed a fresh writ petition challenging the consequent order and consequently the present writ petition has been rendered infructuous - HELD THAT:- Petition disposed of as having been rendered infructuous. 2020 (3) TMI 806 Disqualification of petitioner's Director,s DIN - Whether the disqualification of the petitioner's Director Identification Number (DIN) would operate in respect of the defaulting company only or all other companies in respect of which the petitioner is a Director? - HELD THAT:- Section 164(2) of the 2013 Act, if construed in proper perspective, indicates that the legislature intentionally made a distinction in the language of the first part of the said sub‐section with the second part thereof. Sub‐section (2) of Section 164 starts with the expression no person, who is or has been a Director of a company , which has committed defaults specified therein, while the sub‐section ends with the expression shall be eligible to be re‐appointed as a Director of that company or appointed in other company for a period of five years from the date on which the said company fails to do so - a specific distinction is made in the sub‐section between the directorship of a person of a defaulting company, in respect of which the eligibility of 're‐ appointment' as a Director has been prevented, whereas, as regards other companies, the term 'appointed', as opposed to 're‐appointed' has been deliberately used, thereby indicating only fresh appointments. There could not be any other meaning attributed to the user of the terms 're‐appointed' and 'appointed' in two parts of the said sub‐section, in respect of directorship in the defaulting company and in respect of other companies respectively. Section 167 of the 2013 Act and the proviso to sub‐section (1)(a) thereof shows that the said proviso came into force after disqualification of the petitioner by the respondents. Hence, the proviso is not applicable to cases where the disqualification took place before enactment of the said amendment - Applicability of Rule 14 of the 2014 Rules pertains ex facie to the company at default and not to other companies and, as such, it cannot be mandatory for the Director to comply with the provisions thereof in respect of all other companies of which she/he is a Director but which are not at default, but in respect of defaulting company only. The disqualification of the DIN of the respective petitioners in respect of other companies, than the company in respect of which the default has been allegedly committed, is set aside - petition disposed off.
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