Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 29, 2018
Case Laws in this Newsletter:
Income Tax
Benami Property
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Articles
News
Notifications
Customs
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35/2018 - dated
28-3-2018
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Cus
Seeks to amend various Customs exemption Notifications to exempt integrated tax and goods and services tax compensation cess on import of goods under Advance Authorisation/EPCG Schemes till 01.10.2018
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34/2018 - dated
27-3-2018
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Cus
Seeks to amend Notification No. 69/2011-Customs, dated the 29th July, 2011
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28/2018 - dated
28-3-2018
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Cus (NT)
Courier Imports and Exports (Electronic Declaration and Processing) Amendment Regulations, 2018
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27/2018 - dated
28-3-2018
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Cus (NT)
Appointment of customs airports as international courier terminals
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26/2018 - dated
28-3-2018
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver- Reg.
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25/2018 - dated
28-3-2018
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Cus (NT)
Amendment in Notification No. 64/1994 -Customs (N.T.) dated the 21 November, 1994
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24/2018 - dated
28-3-2018
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Cus (NT)
Amendment in Notification No. 92/2017-Customs (N.T.), dated the 28th September, 2017
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23/2018 - dated
28-3-2018
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Cus (NT)
Amendment in Notification No. 82/2017-Customs (N.T.), dated the 24th August, 2017
GST - States
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S.O. 158 - dated
23-3-2018
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Bihar SGST
Relates to generation of e-way bill, of movement of the goods.
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S.O. 157 - dated
23-3-2018
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Bihar SGST
Last date for filing of return in FORM GSTR-3B
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S.O. 156 - dated
23-3-2018
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Bihar SGST
Appoints the 1st day of April, 2018, as the date from which the provisions of sub-rules (ii) [other than clause (7)], (iii), (iv), (v), (vi) and (vii) of rule 2 of notification No. S.O. 148 , dated the 7th March, 2018.
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S.O. 155 - dated
23-3-2018
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Bihar SGST
Bihar Goods and Services Tax (Third Amendment) Rules, 2018.
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F-10-9/2018/CT/V (23)-13/2018-State Tax - dated
7-3-2018
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Chhattisgarh SGST
Rescinds Notification No. 6/2018- State Tax, F-10-2/2018/CT/V (5) dated the 24th January, 2018
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F-10-9/2018/CT/V (22)-12/2018-State Tax - dated
7-3-2018
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Chhattisgarh SGST
Chhattisgarh Goods and Service Tax (Second Amendment) Rules, 2018
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F.3(67)/Fin.(Rev.-I)/2017-18/DS-VI/140 - dated
14-3-2018
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Delhi SGST
Appoint the following officers for discharging of statutory duties
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CCT/26-2/2017-18/30 - dated
26-3-2018
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Goa SGST
Last date for filing of return in FORM GSTR-3B
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38/1/2017-Fin(R&C)(51) - dated
21-3-2018
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Goa SGST
Rescinds the Government notification No. 38/1/2017-Fin(R&C)(45)/431, dated the 31st January, 2018.
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38/1/2017-Fin(R&C)(50) - dated
21-3-2018
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Goa SGST
The Goa Goods and Services Tax (Second Amendment) Rules, 2018.
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38/1/2017-Fin(R&C)(49) - dated
27-2-2018
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Goa SGST
Appoints the 1st day of July, 2017, as the date from which provisions of serial numbers 2(i), 2(ii), 2(iii), 2(iv), 2(v), 2(vi), 2(vii) and 2(viii) of Notification No. 38/1/2017-Fin(R&C)(13)/2357 dated the 13th September, 2017.
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16/2018-State Tax - dated
23-3-2018
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Gujarat SGST
Time Limits for From GSTR-3B for Apr May June 2018.
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(GHN-40)/GSTR-2018/(22)-TH - dated
23-3-2018
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Gujarat SGST
Corrigendum to rules Notification No-34/2017- 55/2017 dated 15-11-2017
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(GHN-39)/GST-2018/S.164(21)-15/2018-State Tax - dated
23-3-2018
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Gujarat SGST
Appointing 1st April 2018 for E-way Bill Rules.
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(GHN-38)/GSTR-2018(20).TH-14/2018-State Tax - dated
23-3-2018
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Gujarat SGST
The Gujarat Goods and Services Tax (Third Amendment) Rules, 2018.
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(GHN-37)/GST-2018/S.11(1)(29).TH-10/2018-State Tax (Rate) - dated
23-3-2018
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Gujarat SGST
Amendment in the Notification No.8/2017 – State Tax (Rate), dated the 13th October, 2017, Notification No.38/2017- State Tax (Rate) - Exemption from reverse charge up to 30th June 2018.
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34/ST-2 - dated
15-3-2018
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Haryana SGST
Rescinds the, Haryana Government, Excise and Taxation Department, notification No. 18/ST-2, dated the 25th January, 2018.
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33/ST-2 - dated
15-3-2018
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Haryana SGST
The Haryana Goods and Services Tax (Fourth Amendment) Rules, 2018.
Highlights / Catch Notes
Income Tax
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Unexplained credits u/s 68 - share application received - assessee did not submit the details of the mode of payment by these two persons and that neither their identity nor the creditworthiness nor the genuineness of the transactions is proved - additions confirmed - AT
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Addition of interest income - dumb/ bald seized documents - addition by invoking section 292C - document does not mention the name of the assessee, does not bear the signature of the assesee, not in the handwriting of the assessee, documents has imply jottings of certain figures - No additions - AT
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Penalty u/s 271(1)(b)- assessee refused to answer the notice u/s 142(1) - assessee was an attorney of some account holder - levy of penalty confimred - HC
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Eligibility to deduction u/s 35 (1) - donation made much before the withdrawal of notification - Such withdrawal cannot take away the vested right of the assessee for claiming deduction u/s 35 (1) - AT
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Exemption u/s 11 - Rejection of Application to grant registration of Trust u/s 12AA - So far as question of apprehensions raised by ld. CIT that under the garb of charitable activities, the Trustee are indulging into money laundering is concerned, this question can be taken care of by the appropriate forum as the person who is donating huge cash must be an incometax assessee, if not he or she can be brought to tax by the tax authorities - registration granted. - AT
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Cash credit - Additions u/s 68 instead of u/s 69 - Mentioning of wrong Section in the orders of the authorities below would not be fatal to the case of Revenue. May be technically Section 68 is not applicable in the case of the assessee, but, assessee failed to explain source of the cash deposit in her bank account - additions confirmed - AT
Customs
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Anti Dumping Duty - quantification of duty - fixing AD duty based on reference landed value is one of the accepted method which has been followed in the past including for various steel products produced by the same appellants. - AT
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Imposition of Anti Dumping Duty - new/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) - For the injury analysis, the DA had examined all the mandatory parameters prescribed under the law. There is no need for segment wise analysis for OEM and replacement market. The categorical conclusion that dumped imports had caused material injury to the DI cannot be contested either in law or on fact. - AT
Indian Laws
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The property was held in fiduciary capacity - Whether the provisions of the Benami Transactions (Prohibition) Act, 1988, would apply to a transaction of the year 1972 is another matter, but, in view of pleadings in the suit filed by respondent No.1, it cannot be said that this could be a ground for rejection of the plaint at the threshold - HC
Service Tax
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Business Auxiliary Services - chilling of milk amounts to manufacture and it is settled law that process amounting to manufacture is not liable to service tax - activity do not come under the clutches of service tax - AT
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CENVAT credit - duty paying documents - Since as per the proviso appended to Rule 4A (2), debit note cannot be denied as a proper document, the credit should be available to the appellant, subject to fulfilment of the other conditions laid down in sub-rule (2) of the said Rules. - AT
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Jurisdiction of Court - requirement of fulfillment of Bank Guarantee - service tax default - The Court, on the basis of the undertaking given by a party, cannot convert itself into an executing Court to execute the terms agreed by the party, while deciding the bail application - HC
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Penalty u/s 76 and section 78 - the proceedings itself should have closed under Section 73 (3) as the service tax liability alongwith interest has been discharged prior to issue of show cause notice - penalty set aside. - AT
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Service of SCN - There is no attempt to serve the notice in the normal process by registered post or speed post - Straight away upon receiving the notice it has been served by affixture - there is no valid service of SCN. - AT
Central Excise
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CENVAT credit - input service - the assessee/appellant require the residential colony and availability of the workers for manufacture of dutiable goods and, as such, security services is essential part in order to maintain the residential/industrial colony of the appellant - credit allowed - AT
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CENVAT credit - input services - service tax paid on the taxable service used in the wind mill cannot be denied to the appellant. - AT
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Clandestine removal - onus to prove - the Department has not produced any other tangible evidence to show that the higher percentage of scrap of 11.46% were removed by the appellant in clandestine manner - demand set aside - AT
VAT
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Demand of tax refund earlier - obtained de-oiled rice bran as a by-product - partial rebate under Section 17 of the KVAT Act - Once indemnity bond is furnished, the payment of tax refunded is mandatory and the same cannot be assailed by the petitioner. - HC
Case Laws:
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Income Tax
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2018 (3) TMI 1411
Penalty u/s 271(1)(b)- assessee refused to answer the notice under Section 142(1) - accounts held in HSBC Bank - assessee was an attorney of some account holder - Held that:- The material on the record indicates that the French official source shared information with the Indian Government with respect to accounts held in HSBC Bank. Prima facie, such material disclosed that the assessee was an attorney of some account holder. In the Court’s opinion, if the assessee really had no connection with such accounts, no prejudice could really have ensued to him if he would have complied with the notice under Section 142(1) of the Act and filed the consent form. In these circumstances, the penalty cannot be held to be erroneous or unwarranted. No question of law arises
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2018 (3) TMI 1410
Cash credit - Additions u/s 68 instead of u/s 69 - The contention of assessee that amount was withdrawn for property deal could not materialized and she deposited back the cash was not found tenable - A.O. noted that assessee kept on withdrawing the cash throughout the year for the purpose of buying a property and kept accumulating the cash at home. Any property deal would not go throughout the year. Moreover, for a property deal no one keeps withdrawing the cash throughout the year in small-small amounts. The assessee is not in business of real estate where she would frequently require cash withdrawals for sale and purchase of the property. Held that:- The assessee has income from salary, house property and income from other sources. The assessee has no business income in assessment year under appeal. The assessee is also not a property dealer. - assessee did not produce any evidence in support of same, if any, transaction was conducted by assessee dealing in any property. - ultimately, assessee failed to explain the source of the cash deposit in the bank account. Even as against the returned income declared, the deposit of cash in the bank account is more. Therefore, assessee has no explanation at all for deposit of the cash in the bank account. Mentioning of wrong Section in the orders of the authorities below would not be fatal to the case of Revenue. May be technically Section 68 is not applicable in the case of the assessee, but, assessee failed to explain source of the cash deposit in her bank account. Addition was rightly made against the assessee for unexplained cash deposit in bank account of the assessee. No merit in the arguments of the Assessee that when Ld. CIT(A) could accept the explanation of assessee for ₹ 9 lakhs, the entire addition should have been deleted. This argument itself has no force and is rejected because assessee failed to explain the source of the cash deposit in the bank account and also failed to explain any co-relation between the cash withdrawals and cash deposit in her bank account. - Decided against assessee.
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2018 (3) TMI 1409
Income arising from sale of securities - capital gain or busniss income - Held that:- The assessee is Non Banking Financial Company and income from capital gains where investment made in equities are sold. The assessee treated long term capital gain from sale of equities held for more than 12 months exempt u/s 10 (38) of the Act. AO treated it as business income. Now, the above issue is squarely covered in favour of the assessee by Circular No. 6 dated 29.02.2016 issued by CBDT. The above circular speaks that if shares are held for more than 12 months, if assessee shows it as LTCG, same should be accepted. We are of the opinion that when the assessee himself has treated the income arising from sale of securities held for more than 12 months as capital gains, there is no reason to dispute it by Assessing Officer. Disallowance u/s 14A - Held that:- AO has not recorded satisfaction that how the claim of the assessee is incorrect. He also did not comment upon the argument of the assessee that on the dividend received from Dabur Limited no expenditure is incurred. The provisions of section 14 A (2) mandatorily provides that AO should record satisfaction about the correctness of the claim of the assessee. There is no such satisfaction recorded by the Assessing Officer. Addition made by the Assessing Officer and confirmed by the Ld. CIT (A) cannot be sustained. Accordingly ground No.3 of the appeal of the assessee is allowed and AO is directed to delete the disallowance. Disallowance on ad-hoc basis - Held that:- Assessee has incurred ₹ 13,93,000/- under the head business promotion expenses of ₹ 16,01,689/- under travelling expenses. The assessee could not produce bills and vouchers of the above business expenses and therefore, disallowance of ₹ 15,68000/- was made u/s 37.
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2018 (3) TMI 1408
Exemption u/s 11 - Rejection of Application to grant registration of Trust u/s 12AA - genuineness of the huge cash donation made by the Trustee - Held that:- We are of the considered view that certainly this is a subjective opinion of the ld. CIT because when cash donation by the Trustee has reached into the kitty of assessee Trust, its application for charitable purposes is to be examined at the time of assessment. So far as question of apprehensions raised by ld. CIT that under the garb of charitable activities, the Trustee are indulging into money laundering is concerned, this question can be taken care of by the appropriate forum as the person who is donating huge cash must be an incometax assessee, if not he or she can be brought to tax by the tax authorities. The object of the assessee Trust to be charitable and genuineness of the charitable activities are concerned, again when the assessee Trust has proved to have purchased the land to establish the educational institution and brought on record the sale deeds and also brought on record the complete detail of the construction work-in-progress being carried out by the assessee Trust and also brought on record copies of the bank ledger of the assessee Trust showing its complete income and expenditure, there is no material on record to dispute the same at the juncture of according registration u/s 12A rather all these apprehensions raised by CIT can be taken care of by the AO at the time of assessment and as such are beyond the purview of CIT (Exemptions). When the assessee Trust has brought on record all the necessary documents to achieve the aims and objects of the assessee Trust enshrined in its memorandum of articles and undisputedly is into charitable activities by establishing educational institutions, merely denying the registration on the basis of apprehensions, conjectures and surmises that since trustees of the assessee have donated huge cash amount to assessee Trust, there appears to be money laundering, is not sustainable in the eyes of law - Decided in favour of assessee
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2018 (3) TMI 1407
TDS u/s 194I - payment of the impugned amount by way of "Lease Premium" to MMRDA - assessee in default - Held that:- As decided in assessee's own case [2018 (3) TMI 1338 - ITAT KOLKATA] we are not in agreement with the findings of the Assessing Officer and we decline to hold that the Commissioner of Income Tax(A) has erred in not treating the assessee as assessee in default within the meaning of section 201(1)of the Income Tax Act for non-deduction of TDS on payment of lease premium to MMRDA. For invoking the provisions of section 201(1)this is a precondition that the person should be required to deduct any sum in accordance with the provisions of this Act and he does not deduct, or does not pay or after deduction fails to pay the whole or in part of the tax as required under the provisions of the Act, then only such person shall be deemed to be an assessee in default in respect of payment of such tax. In the case in hand, the assessee was not liable to deduct any tax on payment of lease premium to MMRDA because it was capital expenditure to acquire land on lease with substantial right to construct a commercial building complex - Decided in favour of assessee.
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2018 (3) TMI 1406
Addition of interest income - dumb/ bald seized documents - addition by invoking section 292C - Held that:- Addition on account of alleged interest income is not sustainable in the eyes of law, because the document does not mention the name of the assessee, does not bear the signature of the assesee, not in the handwriting of the assessee, documents has imply jottings of certain figures and does not indicate whether it is an investment or deposit or loan, hence, the said seized document is dumb/bald and even otherwise, the same was never found either in the possession or control of the assessee. - Decided in favour of assessee
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2018 (3) TMI 1405
Eligibility to deduction u/s 35 (1) - donation made much before the withdrawal of notification - Held that:- The assessee cannot suffer on account of withdrawal of notification given to M/s. School of Human Genetics and Population Health, Kolkata granting approval u/s 35 (1) (ii) of the Act. This recognition was originally granted on 28th January, 2010 and renewed on 17th June, 2010 by Government of India . Ministry of Science and Technology. In response to letter dated 03.02.2014 given by M/s. School of Human Genetics and Population Health, to the assessee, donation of ₹ 15,00,000/- was made on 31.03.2014 by the assessee. The said amount was given to the donee on 31.03.2014 and withdrawal was on 15.09.2016. i.e. after 17 months from the date of donation made in March, 2014. Such withdrawal in my view cannot take away the vested right of the assessee for claiming deduction under Section 35 (1) of the Act. As the donation to “ School of Human Genetics and Population Health” was made while it was holding the approval in question, we direct the AO to grant the said deduction as claimed. In the result this issue is decided in favour of the assessee.
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2018 (3) TMI 1404
Penalty u/s. 271(1)(c) - addition u/s 69 - non specification of charge - Held that:- Show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. Imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. - Decided in favour of assessee.
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2018 (3) TMI 1403
Addition u/s 68 - treating the share capital subscription as unexplained cash credits - denial of natural justice - Held that:- As assessee contented that although notices under section 133(6) were issued by the A.O. to all the 16 share applicants, the relevant documentary evidence furnished by them in response to the said notices in the form of statement of source of funds, copies of relevant bank statements, copies of allotment advices, copies of IT returns and audited accounts etc. was not taken into consideration by the A.O. while deciding the issue under section 68 and this position clearly evident from the assessment order passed by the A.O. is not disputed even by the learned DR. Even the summons issued by the A.O. to the directors of the assessee company were not served in time to enable them to comply with the same. He has contended that no further opportunity however was given by the A.O. to the assessee company or even its directors to comply with the requirements and support and substantiate their case by explaining the relevant cash credits representing share capital contribution in terms of section 68. We find merit in the contention of the learned counsel for the assessee that the assessment under section 143(3)/147/263/143(3) was made by the A.O. without giving proper and sufficient opportunity of being heard to the assessee and without considering the relevant documentary evidence filed by the concerned share applicants in response to the notices issued under section 133(6). Restore the matter to the file of the A.O. to decide the same afresh after giving the assessee proper and sufficient opportunity of being heard and after taking into consideration the entire evidence already available on record as well as other documentary evidence which the assessee may choose to file in support of its case on the issue. - Decided in favour of assessee for statistical purpose.
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2018 (3) TMI 1402
Unexplained credits u/s 68 - share application received - Held that:- The assessee has not furnished any supporting evidence to explain the sources. By way of confirmation letters, the assessee may have been able to provide identity of the transactions but has failed to prove the creditworthiness of the parties as well as the genuineness of the transactions, particularly when both the parties are not Income Tax Assessee and the payments are made in cash. The CIT (A) has clearly brought out that the assessee did not submit the details of the mode of payment by these two persons and that neither their identity nor the creditworthiness nor the genuineness of the transactions is proved. No reason to interfere with the order of the CIT (A) on this issue and the addition is confirmed. - Decided against assessee.
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2018 (3) TMI 1401
Addition u/s 69/69A - receipt in the bank account - AO observed that the sum was not accounted in the books of account - onus to prove the nature and the source of deposit in his bank account - Held that:- The controversy raised however is without any substance in law, as the impugned sum stands admittedly received by the assessee, duly credited to his bank account, so that even if not credited in his books of account - which in fact he has shown to, the assessee is yet obliged u/s. 69/69A to furnish a satisfactory explanation as to the nature and the source of deposit in his bank account. Additions u/s 68 - genuineness of the credit transaction - Held that:- The creditor at the time of the impugned credit, in fact already extended ₹ 3.95 lacs to the assessee during the relevant year itself. Though it is only the credit of ₹ 9 lacs that is under examination, the creditors’ – who is also maintaining books of account, capacity has to be shown with reference to the entire sum. A credit may not necessarily arise from the creditors’ current year income, and may well be from his capital, hereinbefore employed in some other asset/s, since realized. At the same time, it may be that a creditor may be merely a conduit for funds, the source of which is thus located in another person/s, so that the creditor is only an ostensibly source, and does not have the capacity to lend or assume (financial) risk. We have already stated that the identity is proved, and there is nothing on record to doubt the genuineness of the transaction. The matter, therefore, for examination of the capacity shall have to necessarily travel back to the file of the AO. To the extent the aspect of capacity is linked to genuineness, which may have some overlap, our finding as to genuineness may be regarded as reserved. The primary burden toward establishing the credit would be on the assessee. The AO shall decide issuing definite finding/s of fact, based on the material on record.- Assessee’s appeal is allowed for statistical purposes.
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2018 (3) TMI 1400
Penalty u/s 271(1)(c) - Non specification of charge - defective show cause notice - Held that:- The show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. - Decided in favour of assessee.
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2018 (3) TMI 1399
Addition u/s 14A - Held that:- Disallowance under section 14A cannot exceed the total actual expenditure incurred and claimed by the assessee. The appellant case the appeal is allowed and the excess additions made in terms of Rule 8D for an amount of ₹ 6,47,21,925/- is directed to be deleted. As a logical corollary this addition would also be required to be deleted in computing book profit under section 115JB of the IT Act - Decided against revenue
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2018 (3) TMI 1398
Disallowance u/s 14A read with Rule 8D - Held that:- In the instant case, the AO has not recorded any dissatisfaction as to the claim of the assessee that no expenditure was incurred to earn exempt income as per its account and in such circumstances, the computation under sub-rule (2) of Rule 8D cannot be made. In this case, undisputedly, the assessee has earned dividend income to the tune of ₹ 200/- but disallowance u/s 14A read with Rule 8D has been made to the tune of ₹ 3,71,410/-. Hon’ble Delhi High Court in Joint Investments (P.) Ltd. (2015 (3) TMI 155 - DELHI HIGH COURT) case also decided the identical issue that disallowance u/s 14A is to be made only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income. So, we are of the considered view that in any case, disallowance cannot be made more than exempt dividend income earned by the assessee. So, impugned order passed by the ld. CIT (A) is not sustainable in the eyes of law, hence the addition made by the AO and confirmed by the ld. CIT (A) by invoking the provisions of section 14A and Rule 8D is to be restricted to the earned exempt income i.e. ₹ 200/-. Consequently, present appeal filed by the assessee is partly allowed.
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Benami Property
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2018 (3) TMI 1391
Whether the transfer of property is hit by the provisions of Benami Transactions (Prohibition) Act, 1988 - title of the property - fiduciary capacity - Whether the court below was justified in rejecting the application filed on behalf of defendant No.1 seeking rejection of plaint under Order 7 Rule 11 (d) of the Code of Civil Procedure? Held that: - The property was held in fiduciary capacity - Whether the provisions of the Benami Transactions (Prohibition) Act, 1988, would apply to a transaction of the year 1972 is another matter, but, in view of pleadings in the suit filed by respondent No.1, it cannot be said that this could be a ground for rejection of the plaint at the threshold. It would certainly be a matter requiring evidence, particularly when the defendant No.1 would dispute the claim made by the respondent No.1 in the plaint. Thus, this ground also does not hold good and the court below was justified in holding in favour of the respondent in that regard. The court below committed a grave error in holding that since the defendant No.1 had not filed a suit for declaration of title, it could not be said that cause of action for the respondent No.1 herein had arisen. The suit filed on 21.12.1994 was on the basis that the plaintiff therein was the absolute owner of the suit property and in exclusive possession thereof. There was no question of seeking declaration of title at that point in time. The court below has also erred in holding in the impugned order that the question of limitation in the facts of the present case would require evidence and that therefore, it could be decided only at the time of trial of the suit. As stated above, on an interpretation of the law pertaining to the accrual of the cause of action in the context of Article 58 of schedule to the Limitation Act, 1963, in the present case, on the face of record, it is evident that the suit filed on 20.11.2011 by the respondent No.1 was barred by limitation and that therefore, the application for rejection of plaint filed on behalf of the defendant No.1 (vendor of the applicants) deserved to be allowed on this count. The suit filed by respondent No.1 is barred by limitation and hence the plaint deserves to be rejected under Order 7 Rule 11 (d) of the C.P.C. and accordingly it is rejected - petition dismissed.
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Customs
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2018 (3) TMI 1397
Maintainability of appeal - non-compliance with pre-deposit - Section 129 E of the Customs Act, 1962 - Whether the Appellate Tribunal was justified in dismissing the Appeal without examining the merits under Section 129E of the Act in view of the Order dated 16.11.2015 of this Hon'ble High Court granting unconditional waiver of the requirement of pre-deposit in case of other importers? Held that: - Sub-section (1) of Section 129B states that the parties be given an opportunity of being heard, but, the jurisdiction vesting in the Tribunal is an appellate jurisdiction. It enables it to pass such orders as it think fit, but, particularly confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority who passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary. The various Sub-sections of Section 129B would denote that the Tribunal can postpone or adjourn the hearing so as to accommodate party who seeks a personal hearing but, in no case, the Tribunal is empowered to dispose of the appeal without adjudication on merits merely because there is no compliance reported by the assessee with the terms and conditions imposed on it when the Tribunal considered a stay application or passed its order thereon. Thus, the Tribunal was not justified in dismissing the appeal - The Tribunal shall now adjudicate the Appeal on merits in accordance with law and as expeditiously as possible. Petition disposed off.
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2018 (3) TMI 1396
Clearance of the imported RBD Palmolein (Edible Grade) - Held that: - in view of the judgment Union of India Vs. Param Industries Ltd. [2015 (6) TMI 732 - SUPREME COURT], the petitioner would work out their remedy before the appropriate Authorities, for which, the learned senior standing counsel for the respondents has no objection - Writ Petition is disposed of giving liberty to the petitioner to work out their remedy before the appropriate Authorities in accordance with law.
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2018 (3) TMI 1395
Imposition of Anti Dumping Duty - new/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16”, used in buses and lorries/trucks - import from China PR - Held that: - the demand for the subject goods was showing raising trend. The imports from subject country increased by 12 times between 2012-2013 and POI. The market share of DI had in fact declined during the material period. The DA has clearly recorded that there is a significant price gap between domestic and imported product which led to the consumers increasingly switching over to imported Chinese products. It is clear that the dumped imports resulted in sale of imported goods below the cost of sale of DI. The conclusion of the DA regarding causal link between dumped imports and the injury to the DI are categorical. The imports of subject goods have increased in absolute terms over the entire period of investigation. These imports were under-cutting the prices of DI. The price under- cutting caused by the dumped imports resulted in increase in market share of imports and decline in market share of DI. For the injury analysis, the DA had examined all the mandatory parameters prescribed under the law. There is no need for segment wise analysis for OEM and replacement market. The categorical conclusion that dumped imports had caused material injury to the DI cannot be contested either in law or on fact. The imposition of AD duty on the subject goods are to be sustained - appeal dismissed.
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2018 (3) TMI 1394
Anti Dumping Duty - quantification of duty - colour coated/pre-painted flat products of alloy or non-alloy steel - import from China PR and EU - Held that: - when there is an available admitted transfer price as a market price, there is no reason for the DA not to consider the same. In fact, JSCPL is a separate legal entity though a subsidiary of JSW. The actual purchase cost (market price) of the raw material, as per the books of accounts maintained by the appellant, were considered for calculating NIP. We also note that in terms of para (iii) of Annexure III of AD Rules, the data of the Domestic Industry is to be used to calculate NIP - The contention that the cost of production of JSW for manufacture of HR coil to calculate NIP for JSCPL is not in line with requirements of Annexure III to AD rules. JSW is not a part of DI in the present case. There is no mandate either in terms of WTO agreement or AD rules for the DA to recommend AD duty in a particular form. The DA will consider the facts and circumstances of each case during the course of investigation and recommend the AD duty accordingly. This can be based on reference price or fixed duty or ad-valorem - fixing AD duty based on reference landed value is one of the accepted method which has been followed in the past including for various steel products produced by the same appellants. Appeal dismissed.
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2018 (3) TMI 1393
Re-export of impugned goods - confiscation - penalty - import of Pharmaceutical Gelatin Bloom 220 - restricted/prohibited goods or not - Held that: - the appellant have not ventured to import any prohibited goods and or restricted goods. Further the item imported was permissible to be imported freely subject to compliance of standards and permission by Wild Life (Protection) Act, 1972 CITES. The only irregularity found is that upon test, two of the parameters (biological criteria) were found to non-compliant - there was a delay in testing and the samples were drawn by the Customs officers and not by the experts of FSSAI or Staff of Sriram Institute for National Research, Delhi - There were every chances of contamination due to non-handling as per the required criteria. There is no mala-fide on the part of the appellant-importer nor a case is made out against them that they have ventured to import prohibited/restricted goods in violation of the provisions of the Customs Act - Confiscation as well as penalty set aside. Appeal allowed - decided in favor of appellant.
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Corporate Laws
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2018 (3) TMI 1392
Refusal of registration of shares and appeal against refusal - High court dismissed the appeal - question of law - Held that:- In the instant case, there is no resolution passed by the company refusing to register the transfer of shares. Since the Company Law Board has gone into the contentions by the appellant for refusing to register transfer for all purposes, it has to be taken that those contentions are the grounds taken by the appellant for refusing to transfer the shares. The appellant has taken several grounds in the memorandum of appeal and raised questions of law as well on these aspects. No doubt, one of the main questions of law stressed in the appeal pertains to the limitation. But on going through the several grounds taken in the Memorandum of Appeal and the questions of law raised specifically in the appeal and the grounds, it is apparent that the appellant had raised questions of law other than the question of law on limitation. As per order 15.09.2017, the High Court, however, declined to consider the review holding that the same was beyond the scope of review and that the same can be corrected only by a superior forum. We are afraid that the stand taken by the High Court cannot be justified in the factual background we have explained and the legal position analysed above. The appellant having taken specific grounds in the appeal and having raised questions of law regarding its right to refuse registration of transfer on sufficient ground, being a statutory appeal under Section 10F of the Companies Act, 1956, the High Court should have considered the same among other questions of law.
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Service Tax
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2018 (3) TMI 1390
Jurisdiction of Court - requirement of fulfillment of Bank Guarantee - petitioners collected the service tax from the service recipients and did not pay the same to the credit of the Central Government. - Bail conditions - The condition, that the petitioners shall furnish bank guarantee for the remaining due amount, within ten days from the date of order of the Court below, imposed, while granting bail to the petitioners, is what is brought into question in the present criminal petitions. Held that: - The Court, on the basis of the undertaking given by a party, cannot convert itself into an executing Court to execute the terms agreed by the party, while deciding the bail application - the condition imposed by the Court below to the extent of directing the petitioners to furnish bank guarantee for the remaining amount cannot be sustained and is set aside. Petition allowed - decided in favor of petitioner.
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2018 (3) TMI 1389
C&F Agency service - cold storage charges - Department entertained the view that the cold storage charges should be included in the gross value charged by the appellant for C&F service and the appellant should be liable to pay the Service Tax on such gross amount. Held that: - as per the scope of the contract, it is evident that the appellant had only provided the forwarding activities with regard to goods received from the service receiver M/s HLL. Since the appellant had not provided Clearing and Forwarding Services simultaneously, we are of view that the activities undertaken by the appellant, only for forwarding the goods, should not fall under the taxable category of C&F services - Hon’ble Punjab & Haryana High Court in the case of Kulcip Medicines (P) Ltd. [2009 (2) TMI 89 - PUNJAB AND HARYANA HIGH COURT] has held that if one person has rendered services as Forwarding Agent, without rendering any service as Clearing Agent, he should not be termed as the C&F Agent. The Service Tax demand confirmed in this case, by adding the value of cold storage charges in the gross value of C&F Agent Service cannot be sustained - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1388
Service of SCN - whether the Show Cause Notice was validly served on the appellant-assessee or not? Held that: - There is no attempt to serve the notice in the normal process by registered post or speed post. Further the service report prepared by the Superintendent, Faizabad also does not contain any number of attempts undertaken to serve the notice directly to the assessee. Straight away upon receiving the notice it has been served by affixture - there is no valid service of SCN. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1387
Demand of interest and penalty - delay in payment of service tax - adjustment of demand raised by audit team with the advance tax deposited - Held that: - for the period April to August 2013, the appellant had deposited the Service Tax in advance on 29.03.2013. Thus, it is evident that there was no delay in payment of Service Tax by the appellant, as assorted by the Revenue - Since interest is compensatory in character and the same is liable to be paid, only when there is delay in payment of tax, and in this case, admittedly, there is no delay, no interest can be demanded from the appellant. Penalty u/s 78 - Held that: - since the appellant had deposited the service tax before the due date, the charges of suppression, fraud, collusion etc., cannot be levelled against it for imposition of the penalty. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1386
CENVAT credit - duty paying documents - Rule 9 (1) of the CCR 2004 - appellant had availed Cenvat credit of service tax paid on input services received in its head office at Indore. The bills/ invoices were issued by the vendors in the name of Narmada Jhabua Gramin Bank, New Palasia, Indore and the head office distributed the credit through a letter, mentioning therein that the credit to be taken by regional office, Sehore. Held that: - on the basis of debit note issued by the head office, the appellant, in this case, had availed the Cenvat benefit. Since as per the proviso appended to Rule 4A (2), debit note cannot be denied as a proper document, the credit should be available to the appellant, subject to fulfilment of the other conditions laid down in sub-rule (2) of the said Rules. Since the appellants' submits that the debit note contained all the requisite particulars, as provided under the said rule, the matter should go back to the original authority for verification of the documents and for allowing the Cenvat benefit, if the same are in conformity with the statutory provisions - the original authority should also decide whether penalty can be imposed on the facts and in the circumstances of the present case, especially in view of the fact that the appellant is a banking company and is owned and controlled by the Government Departments. Appeal allowed by way of remand.
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2018 (3) TMI 1385
Refund of Service Tax paid on the taxable services used for exportation of the goods - denial on the ground that the requirements/conditions laid down in Notification dated 29.06.2012 have not been properly complied with by the respondent - Held that: - the disputed services involved in this case were used/ utilized by the appellant in or in relation to exportation of goods. Since the Department has not specifically alleged that the entire goods were not exported by the respondent, the refund claim cannot be denied on the procedural conditions - refund allowed - appeal dismissed - decided against Revenue.
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2018 (3) TMI 1384
Change in tax entry - classification of service - provision of Multi Purpose Support Vessel (MSV) to ONGC and L&T on charter hire basis - case of Revenue is that prior to 16/05/2008 the service should be taxed under different entry, namely, BSS - whether taxable under Business Support service or under supply of tangible goods? - Held that: - Tribunal in Diebold Systems (P) Ltd. Vs. CST, Chennai [2007 (11) TMI 93 - CESTAT, CHENNAI] held that in case of introduction of new tax entry without amending the pre-existing tax entry it cannot be said that the same activity will be liable to tax under pre-existing as well as new entry - there is no merit in the contention of the Revenue for the tax liability of the appellant in respect of supply of tangible goods prior to 16/05/2008. Eligibility of the appellant/assessee for concession under N/N. 12/2003 - Held that: - There is nothing in the present appeal to state that the Notification 12/2003-ST is not available because of existence of different facts which are evidenced. Penalty u/s 76 and section 78 - Held that: - the proceedings itself should have closed under Section 73 (3) as the service tax liability alongwith interest has been discharged prior to issue of show cause notice - penalty set aside. Appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (3) TMI 1383
Whether Hon'ble Tribunal is correct in concluding that Rule 5 will not be applicable when there is change in the parameters resulting in less production when there is no specific condition in the said Rules ibid that Rule would be applicable only to enhanced or when there is no change in the parameters of the furnace? Is not the formula following as per sub rule (3) of Rule 3 in respect of annual capacity determined basing on the production during the relevant period sustainable or not? Held that: - the subject matter is pending on the file of the Hon'ble Supreme Court, instant civil miscellaneous appeal is disposed of, giving liberty to the appellant, to take appropriate decision, if so warrants, after the outcome of the decision, in the reference made.
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2018 (3) TMI 1382
Monetary limit of appeal - Refund of ₹ 2,28,907/- - Held that: - as per Circular F.No.390/Misc./163/2010-JC/Pt, Central Board of Excise & Customs fixes the monetary limit below which appeal shall not be filed in the High Court as ₹ 20,00,000/- - as the amount involved, is less that the aforesaid limit, the appeal is dismissed.
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2018 (3) TMI 1381
Immunity from payment of penalty - Held that: - In the instant case, after being satisfied that the respondent-company had made a full and correct disclosure of the tax liability, the settlement commission decided to grant immunity from payment of penalty in excess of Rupees Ten Lakhs - Since we do not find any jurisdictional error in the order of the settlement commission so as to interfere with the same, the petition is liable to be dismissed - decided against Revenue.
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2018 (3) TMI 1380
Re-credit/refund of interest paid - whether the appellants are entitled to re-credit of duty of ₹ 3,67,713/- and refund of ₹ 80,904/- paid as interest on account of various issues/ objections raised by the audit? - Held that: - undisputedly the appellant had received input materials against Invalidation letter issued by DGFT as per N/N. 44/2001-CE(NT) dated 26.06.2001, however the condition laid down under clause-(ii) and (xii) of the said Notification had not been complied with - the appellant are not eligible to avail the benefit of said Notification and consequently the re-credit of ₹ 1,94,897/- is irregular and the interest paid on the said irregular credit is also recoverable. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1379
Clandestine removal - interception of vehicle at midnight of 23.08.2003 regarding transportation of impugned goods without invoice/bill and without payment of duty - Held that: - The Department in this case, had not produced any cogent, tangible and convincing evidence in support of clandestine removal of goods and as such, the adjudged demand cannot be confirmed on the basis of mere assumptions and presumptions. The Commissioner (Appeals) has recorded detailed findings with regard to setting aside of the adjudication order, so far as it confirmed the duty liability and imposed penalty on the respondent. Since, the said order was passed based on the available records and evidences; I am of the view that the findings recorded therein cannot be disturbed at this juncture, in absence of any plausible evidence being produced by Revenue to sustain the charges of clandestine removal. Appeal dismissed - decided against Revenue.
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2018 (3) TMI 1378
Clandestine manufacture and removal - excess stock of 48.870 M.T. of raw-material i.e. bloom/billet and 28.578 M.T. of finished products namely, MS Tubes - Held that: - the Department has not specifically brought out any evidence of fact of clandestine removal of goods, with the help of any tangible evidence - the onus lies on the Department to prove clandestine removal of goods having not been satisfied/ fulfilled in this case, the charges levelled against the appellant cannot be sustained in the eyes of law - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1377
Clandestine removal - onus to prove - natural justice - Held that: - the appellant has stated that the raw material procured was substandard in quality and therefore, in comparison to the subsequent period of 2007-08, the generation of scrap during the year 2006-07 was more. However, the submissions made by the appellant in those statements were not considered by the authorities below - the Department has not produced any other tangible evidence to show that the higher percentage of scrap of 11.46% were removed by the appellant in clandestine manner. Since, the onus lies with the Department to prove clandestine activities of the appellant has not been satisfactorily discharged in this case - demand set aside - appeal allowed - decided in favor of assessee.
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2018 (3) TMI 1376
Principles of Natural Justice - Clandestine Removal - the adjudicating authority, in this case, has passed the ex-parte order in confirming the duty demand on the appellant - Held that: - Since the appellant at this juncture, submits that it has adequate documents/records to demonstrate that appropriate duty liability has been discharged and the goods were not clandestinely removed from the factory, then, as per the principles of natural justice, one more opportunity should be granted to the appellant to produce the documents before the original authority - appeal allowed by way of remand.
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2018 (3) TMI 1375
CENVAT credit - input services - telephone services - insurance services - maintenance of vehicle - denial on account of nexus - Held that: - The services availed by the appellant from the service provider of mobile phone and for insurance and maintenance of vehicles are integral part of the manufacturing activity inasmuch as, without such service, the appellant cannot smoothly transact its business of manufacturing as well as selling of its goods. Since the said services have nexus with the purpose, for which the appellant has setup its manufacturing unit, the same should be considered as input service under the amended definition of input service effective from 01.04.2011 - credit allowed. Utilization of services in the wind mill - Held that: - such wind mill is a captive mill dedicated entirely for supplying the electrical energy to the appellant for accomplishing its manufacturing activity. It is only for the technological requirement that the wind mill should be located at a place in the higher altitude; the appellant had installed such mill outside its factory premises and used generated electricity there from for its manufacturing activity - service tax paid on the taxable service used in the wind mill cannot be denied to the appellant. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1374
Refund of accumulated CENVAT credit - time limitation - Section 11 B of the CEA 1944 - Held that: - the legislatures have not specifically prescribed the relevant date in context with filing of refund application of un-accumulated CENVAT credit in terms of Rule 5 of the CCR. Thus, the refund application filed by the applicant cannot be straight away rejected, by considering the date of export as the relevant date for consideration of such time limit. The Tribunal in the case of JCT Ltd. [2013 (12) TMI 583 - CESTAT NEW DELHI] has held that the refund application cannot be rejected in terms of Section 11B of the Act. Appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1373
Refund claim - benefit of N/N. 06/2006-CE dated 01.03.2006 - Held that: - Admittedly, as per N/N. 06/2006-CE dated 01.03.2006, the duty is not wholly exempt, in that circumstances, the Revenue cannot force to the appellant to avail the benefit of N/N. 06/2006-CE, therefore, the ground of rejection of refund claim is not sustainable - refund allowed - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1372
Refund of the duty paid after issuance of SCN 4.2.2008 - the adjudicating authority rejected the refund claim on the premise that a SCN to demand duty was already issued to the appellant - Held that: - Considering the fact that the demand of duty of ₹ 30,68,816/- has already set aside against the appellant vide order dated 29.10.2009 by the adjudicating authority and the appellant has paid duty after issuance of SCN dated 4.2.2008 - further, all the subsequent proceedings have been set aside by the Hon’ble Punjab & Haryana High Court vide order dated 26.10.2010, therefore, the appellant is entitled to claim refund of the amount paid by them - refund allowed - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1371
CENVAT credit - input service - security services deploy at the residential colony situated outside/adjacent to the factory - Rule 2 (l) of the CCR 2004 - Held that: - the assessee/appellant require the residential colony and availability of the workers for manufacture of dutiable goods and, as such, security services is essential part in order to maintain the residential/industrial colony of the appellant - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (3) TMI 1370
CENVAT credit - it was alleged that instead of opportunity provided by this Tribunal in remand, the appellant have failed to provide necessary verification, as such, appeals are dismissed - Held that: - the appellant have done their best whatever they could do under the scheme of Act under rule - the authorities below fail to exercise their duty to make adequate enquiries by referring or calling for cross-verification report of the concerned jurisdictional officers of the manufacturers - the appellant entitled to take CENVAT credit - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (3) TMI 1369
Demand of tax refunded earlier - manufacture of refined rice bran oil - obtained de-oiled rice bran as a by-product - partial rebate under Section 17 of the KVAT Act - interest - penalty. Held that: - it is clear that Annexure-C notice issued under section 42 of the KVAT Act is only for the purpose of information to the assessee and has no legal force and the same cannot be enforced. The same is held to be only for the purpose of information. Parallel proceedings initiated by the Deputy Commissioner if any, is not the subject matter of the present proceedings, there is no overlapping as such and hence, the argument of the petitioner on this ground also fails. Penalty - Held that: - It is trite law that penalty is not automatic, while imposing penalty, it is mandatory to provide an opportunity of hearing to the dealer but in the batch of present cases, no such penalty is levied by the prescribed authority. Interest - Held that: - there is a delay caused in making the payment of legitimate taxes to the department. However, levy of interest under Section 36 shall be subject to hearing in the peculiar circumstances of the case on hand. It is true that interest would have been attracted if there is any omission on the part of the dealer if no output tax paid or short paid or higher input tax claimed. The prescribed authority ought to have examined this aspect of the matter in providing an opportunity of hearing to the petitioner. Once indemnity bond is furnished, the payment of tax refunded is mandatory and the same cannot be assailed by the petitioner. Hence, confirming the demand of tax refunded, the matters are remanded to the prescribed authority to examine the levy of interest applicable to the tax demanded. Petition allowed in part.
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2018 (3) TMI 1368
Waiver of arrears on interest - Karnataka Tax on Entry of Goods Act, 1979 - Karasamadhana Scheme, 2017 - Respondent No.3 rejected the application on the ground that the application submitted by the petitioner was not accompanied by 10% of the arrears of tax - Held that: - It is apparent that the petitioner has deposited 30% of the arrears of interest before the Appellate Authority and the same is not disputed by the revenue - Rejection of the application of the assessee on the ground that no arrears of interest was demanded by the Authorities is untenable. Hence, the Respondent No.3-Authority ought to have considered the demand notice along with the assessment order - entitlement of the petitioner for the scheme cannot be denied on this count. Petition allowed - decided in favor of petitioner.
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2018 (3) TMI 1367
Rate of tax - works contract - what is the rate of tax applicable to the contract/activity of the petitioner for flex, vinyl printing and installation? - Held that: - The Commissioner of Commercial Taxes ought to have examined whether the installation work carried on by the assessee is a composite contract attracting Sl. No.23 of the Sixth Schedule to the Act - The Commissioner proceeded on the ground that the contract falls under Entry 23 of the Sixth Schedule without assigning any valid reasons. In the circumstances, this Court is of the considered opinion that the Respondent No.1-Commissioner of Commercial Taxes shall examine this aspect and a decision shall be taken in accordance with law. The Commissioner’s clarification impugned at Annexure-E to Writ Petition No.51431/2017 is quashed - matter is remanded to Respondent No.1-Commissioner of Commercial Taxes to examine the issue in the light of the observations made as aforesaid and take a decision in accordance with law in an expedite manner - petition allowed by way of remand.
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2018 (3) TMI 1366
Taxable turnover liable to tax under Section 3(5) of the Tamil Nadu General Sales Tax Act, 1959 - Held that: - the respondent took a stand that the polythene granules purchased by the appellant / writ petitioner from the dealer has been resold in its entirety and the said fact is seriously disputed by the appellant / writ petitioner - a portion of the purchases have not been used for manufacture purpose and they were resold. Thus, the petitioner has contravened the provisions under Section 3(3) of the Act. Hence, the said turnover has been assessed to tax at 1% which is in accordance with statute The purchase turnover of ₹ 82.56,954/- cannot be included for the purpose of levying the tax at the rate of 1% p.a. and for the purpose of assessment under the provisions of the Tamil Nadu Additional Sales Tax Act - penalty also set aside - appeal allowed in part.
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2018 (3) TMI 1365
Whether the Commercial Tax Tribunal has erred in law in holding that supply of cement, steel and bricks etc. to the contractors by the Government Department, for which cost is deducted from the bills of the contractors, does not amount to sale and is it not liable to tax? Held that: - it is admitted by Mrs. Beena Pandey, learned Standing Counsel for the State of U.P. that the respondent is a registered dealer - there is no reason to not apply the principle laid down by the Hon ble Apex Court in M/s N.M. Goel and Co. [1988 (10) TMI 106 - SUPREME COURT OF INDIA], where it was held that The costs of materials so supplied and consumed in the construction work have been deducted from the final bill of the petitioner, showing that there was sale of those materials. If the department had not supplied those materials, the petitioner would have purchased the same from the market. The Tribunal to the extent it is impugned is set aside and the order of the Assessing Officer restored - revision allowed.
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Wealth tax
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2018 (3) TMI 1364
Wealth tax assessment - whether loose pearls and stones are also includible in the definition of assets? - Held that:- As per the definition of jewellery in the Wealth Tax Act jewellery includes precious stones and semi-precious stones including the loose items not embedded in jewellery. CIT(A) examined the definition of the gemstones in internet and held that loose pearls and stones are also includible in the definition of assets. AR submitted that the pearls are not stones but separate bifurcation of pearls and stones was not submitted. A.R did not place any decision to controvert the finding of the Ld.CIT(A). As per the definition available in internet precious stones are diamond ruby emeralds and rest of them are semi-precious stones which include variants from non-organic stones. CIT(A) has rightly upheld the addition made by the A.O and we do not see any reason to interfere in the order of the Ld. CIT(A). - Decided against assessee.
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